##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
  þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended July 31, 2006
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number: 1-12123
 JLG INDUSTRIES, INC.
  PENNSYLVANIA
(State or other jurisdiction of incorporation 
or organization)
    
    25-1199382
(I.R.S. Employer
Identification No.)1 JLG Drive, McConnellsburg, PA
(Address of principal executive offices)
    
    17233-9533
(Zip Code)
 Registrants telephone number, including area code:
(717) 485-5161
 Securities registered pursuant to Section 12(b) of the Act:
 (Title of class)
    
    (Name of exchange on which registered)Capital Stock ($.20 par value)
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
  ý o
 o ý
 ý o
 o
  ý o o
 o ý
  Documents Incorporated by Reference




---



##### Table of Contents



TABLE OF CONTENTS
   PART I1. Business
    
    
    1Products and Services
    
    
    1Industry
    
    
    4Segment Financial Information
    
    
    5Marketing and Distribution
    
    
    5Product Development
    
    
    5Intellectual Property
    
    
    5Seasonal Nature of Business
    
    
    6Competition
    
    
    6Material and Supply Arrangements
    
    
    6Product Liability
    
    
    6Employees
    
    
    6Environmental
    
    
    6Foreign Operations
    
    
    7Executive Officers of the Registrant
    
    
    7Available Information
    
    
    81A. Risk Factors
    
    
    81B. Unresolved Staff Comments
    
    
    152. Properties
    
    
    153. Legal Proceedings
    
    
    154. Submission of Matters to a Vote of Security Holders
    
    
    16PART II5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
    
    
    166. Selected Financial Data
    
    
    187. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Overview
    
    
    19Results of Operations
    
    
    20Financial Condition
    
    
    26Critical Accounting Policies and Estimates
    
    
    30Outlook
    
    
    33Recent Accounting Pronouncements
    
    
    34Off-Balance Sheet Arrangements
    
    
    347A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    348. Financial Statements and Supplementary Data
    
    
    36Consolidated Statements of Income
    
    
    36Consolidated Balance Sheets
    
    
    37Consolidated Statements of Shareholders Equity
    
    
    38Consolidated Statements of Cash Flows
    
    
    39Notes to Consolidated Financial Statements
    
    
    40Reports of Independent Registered Public Accounting Firm
    
    
    709. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    729A. Controls and Procedures
    
    
    729B. Other Information
    
    
    73




---



##### Table of Contents



TABLE OF CONTENTS (continued)
   PART III10. Directors and Executive Officers of the Registrant
    
    7311. Executive Compensation
    
    7312. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    7313. Certain Relationships and Related Transactions
    
    7314. Principal Accountant Fees and Services
    
    74PART IV15. Exhibits and Financial Statement Schedules
    
    74(a) (1) Financial Statements
    
    74(a) (2) Financial Statement Schedules
    
    74(a) (3) Exhibits
    
    74Signatures
    
    75EX-12EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I
 
 ITEM 1. BUSINESS
 ® ® ® ® ®
    ®
 
 Products and Services
   1




---



##### Table of Contents



2




---



##### Table of Contents



® ®
       3




---



##### Table of Contents



Industry
  4




---



##### Table of Contents



Segment Financial Information
  
 Marketing and Distribution
    
 Product Development
  
 Intellectual Property
  5




---



##### Table of Contents



Seasonal Nature of Business
  
 Competition
  
 Material and Supply Arrangements
  
 Product Liability
   
 Employees
  
 Environmental
  6




---



##### Table of Contents



Foreign Operations
  
 Executive Officers of the Registrant
  PrincipalPositionName
    
    Age
    
    Position
    
    Held SinceWilliam M. Lasky
    
    
    59
    
    
    Chairman of the Board, President and Chief
Executive Officer
    
    
    2001James H. Woodward, Jr
    
    
    53
    
    
    Executive Vice President and Chief Financial Officer
    
    
    2002Peter L. Bonafede, Jr
    
    
    56
    
    
    Senior Vice President, Manufacturing and Supply
Chain Management
    
    
    2005Israel Celli
    
    
    53
    
    
    Senior Vice President, International Market
Development and Sales
    
    
    2006Wayne P. MacDonald
    
    
    53
    
    
    Senior Vice President, Engineering
    
    
    2002Craig E. Paylor
    
    
    50
    
    
    Senior Vice President, Marketing
    
    
    2006Philip H. Rehbein
    
    
    56
    
    
    Senior Vice President, Commercial Solutions Group
    
    
    2005Thomas D. Singer
    
    
    54
    
    
    Senior Vice President, General Counsel and Secretary
    
    
    2001
 William M. Lasky
 James H. Woodward, Jr.
 Peter L. Bonafede
 Israel Celli
 Wayne P. MacDonald
 7




---



##### Table of Contents



Craig E. Paylor
 Phillip H. Rehbein
 Thomas D. Singer
  
 Available Information
    
 ITEM 1A. RISK FACTORS
  Our business is highly cyclical and seasonal, which could at times adversely affect our liquidity
and ability to borrow under our credit facilities.
  8




---



##### Table of Contents



Our customer base is consolidated and a relatively small number of customers account for a majority
of our sales, the loss of which may adversely impact our revenues.
  We operate in a highly competitive industry, and there is no assurance that customers will continue
to regard our products favorably or that we will be able to continue to compete successfully.
  Our manufacturing operations are dependent upon third-party suppliers, making us vulnerable to
supply shortages and price increases.
  9




---



##### Table of Contents



We may experience credit losses in excess of our allowances and reserves for doubtful accounts,
finance and pledged finance receivables, notes receivable and guarantees of indebtedness of others.
  Our customers need financing to purchase our products, which exposes us to additional business and
credit risks.
  Our credit facilities impose operating and financial limitations that may inhibit our ability to
make capital expenditures, strategic investments and the violation of which may adversely impact
our capital resources.
  
    
    incur additional indebtedness, including to make acquisitions;
    
    pay dividends or make other distributions;
    
    make investments or repurchase our stock;
    
    consolidate, merge or sell all or substantially all of our assets; and
    
    enter into transactions with affiliates.
  10




---



##### Table of Contents



Our warranty reserves may be insufficient to cover increased or unexpected warranty claims, which
could require the use of cash and short-term investments to cover such claims.
  Our products involve risks of personal injury and property damage, which expose us to potentially
significant liability.
  Our success depends on our ability to improve productivity and streamline operations to control or
reduce costs.
  If we are unable to successfully introduce new products and services, our revenues and market share
may be adversely impacted.
  We may face limitations on our ability to finance future acquisitions and integrate acquired
businesses.
  11




---



##### Table of Contents



Failures of our infrastructure could have a material adverse effect on our business.
  We have substantial international operations, the conduct of which subject us to risks that may
have a material adverse effect on our revenues and financial performance.
   
    
    currency volatility and/or exchange controls;
    
    labor unrest;
    
    differing, and in many cases more stringent, labor regulations;
    
    differing protection of intellectual property;
    
    regional economic uncertainty;
    
    political instability;
    
    restrictions on the transfer of funds into or out of a country;
    
    export duties and quotas;
    
    domestic and international customs and tariffs;
    
    current and changing regulatory environments;
    
    difficulty in obtaining distribution support;
    
    difficulty in staffing and managing widespread operations;
 12




---



##### Table of Contents




    
    differences in the availability and terms of financing; and
    
    potentially adverse tax consequences.
   Currency fluctuations from our international sales may have an unpredictable impact on our
financial performance.
  Compliance with environmental and other governmental regulations could be costly and require us to
make significant expenditures.
   We face risks related to an SEC inquiry.
  13




---



##### Table of Contents



We are dependent on the management and leadership of Mr. Lasky and other key members of management,
the loss of whom could adversely impact our operations.
  We may be subject to unanticipated litigation, to which the resolution and response may require
significant expenditures and adversely impact our ability to conduct our business.
  We may be subject to greater than anticipated tax liabilities.
  Catastrophic events may disrupt our business.
   14




---



##### Table of Contents



ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  Location
    
    Size
    
    Owned/Leased
    
    ProductsNew EquipmentMcConnellsburg, Pennsylvania
    
    515,000 sq. ft.
    
    Owned
    
    Boom lifts, TelehandlersShippensburg, Pennsylvania
    
    320,000 sq. ft.
    
    Owned
    
    Boom lifts, Scissor liftsBedford, Pennsylvania
    
    133,000 sq. ft.
    
    Owned
    
    Vertical Mast lifts, Scissor Lifts, Trailer Boom LiftsLaVerne, California
    
    20,000 sq. ft.
    
    Leased
    
    TrailersMaasmechelen, Belgium
    
    80,000 sq. ft.
    
    Leased
    
    Boom lifts, Scissor lifts, TelehandlersOrrville, Ohio
    
    332,000 sq. ft.
    
    Owned
    
    Telehandler and Boom lift SubassembliesOakes, North Dakota
    
    78,000 sq. ft.
    
    Leased
    
    Telehandler SubassembliesTonneins, France
    
    38,000 sq. ft.
    
    Owned
    
    Vertical Mast liftsTonneins, France
    
    63,000 sq. ft.
    
    Leased
    
    Vertical Mast liftsUsed EquipmentMcConnellsburg, Pennsylvania
    
    45,000 sq. ft.
    
    Owned
    
    After-sales service and supportMcConnellsburg, Pennsylvania
    
    27,000 sq. ft.
    
    Leased
    
    After-sales service and supportPort Macquarie, Australia
    
    25,000 sq. ft.
    
    Owned
    
    After-sales service and supportTonneins, France
    
    29,000 sq. ft.
    
    Leased
    
    After-sales service and supportHouston, Texas
    
    72,000 sq. ft.
    
    Leased
    
    After-sales service and supportKennesaw, Georgia
    
    43,000 sq. ft.
    
    Leased
    
    After-sales service and support
     
 ITEM 3. LEGAL PROCEEDINGS
  15




---



##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
  Price per Share
    
    Average Shares Traded DailyQuarter Ended
    
    2006
    
    2005
    
    2006
    
    2005High
    
    Low
    
    High
    
    LowOctober 30 and October 31
    
    $
    19.13
    
    
    $
    15.01
    
    
    $
    8.76
    
    
    $
    6.34
    
    
    
    995,163
    
    
    
    624,172January 29 and January 30
    
    $
    26.95
    
    
    $
    18.45
    
    
    $
    10.04
    
    
    $
    8.47
    
    
    
    1,192,220
    
    
    
    759,396April 30 and May 1
    
    $
    32.16
    
    
    $
    26.22
    
    
    $
    11.97
    
    
    $
    8.35
    
    
    
    1,440,581
    
    
    
    1,028,674July 31
    
    $
    29.54
    
    
    $
    16.74
    
    
    $
    15.67
    
    
    $
    10.15
    
    
    
    1,976,306
    
    
    
    879,308Annual
    
    $
    32.16
    
    
    $
    15.01
    
    
    $
    15.67
    
    
    $
    6.34
    
    
    
    1,403,397
    
    
    
    822,531
      16




---



##### Table of Contents



(c)Total
    
    
    (d)Number
    
    
    Maximumof Shares
    
    
    Number of(b)
    
    
    Purchased
    
    
    Shares thatAverage
    
    
    as Part of
    
    
    May Yet Be(a)
    
    
    Price
    
    
    Publicly
    
    
    PurchasedTotal Number
    
    
    Paid
    
    
    Announced
    
    
    Under theof Shares
    
    
    Per
    
    
    Plans or
    
    
    Plans orPeriod
    
    Purchased(1)
    
    
    Share
    
    
    Programs
    
    
    ProgramsMay 1, 2006 through June 4, 2006
    
    
    3⁄4
    
    
    $
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4June 5, 2006 through July 2, 2006
    
    
    3⁄4
    
    
    $
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4July 3, 2006 through July 31, 2006
    
    
    112
    
    
    $
    18.10
    
    
    
    3⁄4
    
    
    
    3⁄4Total
    
    
    112
    
    
    $
    18.10
    
    
    
    3⁄4
    
    
    
    3⁄4
 1
    
    The total number of shares purchased represents shares
surrendered to us to satisfy minimum tax withholding obligations in connection with the vesting of
restricted stock issued to employees.
  17




---



##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA
 SIX-YEAR FINANCIAL SUMMARY
 (in millions of dollars, except per share data and number of employees)
 Years Ended July 31,
    
    2006
    
    2005
    
    2004
    
    2003
    
    2002
    
    2001RESULTS OF OPERATIONSRevenues
    
    $
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0
    
    
    $
    751.1
    
    
    $
    770.1
    
    
    $
    963.9Gross profit
    
    
    443.0
    
    
    
    287.2
    
    
    
    225.4
    
    
    
    134.4
    
    
    
    132.1
    
    
    
    188.8Selling, administrative and product development expenses
    
    
    (194.6
    )
    
    
    (166.9
    )
    
    
    (149.5
    )
    
    
    (95.3
    )
    
    
    (95.3
    )
    
    
    (104.5
    )Gain related
to sale of Gradall excavator product line
    
    
    14.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.1
    )Restructuring charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.8
    )
    
    
    (6.1
    )
    
    
    (4.4
    )Income from operations
    
    
    263.0
    
    
    
    120.3
    
    
    
    75.9
    
    
    
    36.3
    
    
    
    30.7
    
    
    
    73.8Interest expense, net of interest income
    
    
    (17.7
    )
    
    
    (28.6
    )
    
    
    (35.4
    )
    
    
    (25.9
    )
    
    
    (15.3
    )
    
    
    (20.9
    )Miscellaneous, net
    
    
    (3.2
    )
    
    
    1.4
    
    
    
    1.4
    
    
    
    4.6
    
    
    
    3.8
    
    
    
    1.4Income before taxes and cumulative effect of change in
accounting principle
    
    
    242.1
    
    
    
    93.1
    
    
    
    41.9
    
    
    
    15.0
    
    
    
    19.2
    
    
    
    54.3Income tax provision
    
    
    (92.8
    )
    
    
    (35.9
    )
    
    
    (15.3
    )
    
    
    (2.6
    )
    
    
    (6.3
    )
    
    
    (20.1
    )Income before cumulative effect of change in accounting principal
    
    
    149.3
    
    
    
    57.2
    
    
    
    26.6
    
    
    
    12.4
    
    
    
    12.9
    
    
    
    34.2Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (114.5
    )
    
    
    Net income (loss)
    
    
    149.3
    
    
    
    57.2
    
    
    
    26.6
    
    
    
    12.4
    
    
    
    (101.6
    )
    
    
    34.2PER SHARE DATAEarnings per common share before cumulative effect of change in
accounting principle
    
    $
    1.43
    
    
    $
    .61
    
    
    $
    .31
    
    
    $
    .15
    
    
    $
    .15
    
    
    $
    .41Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.36
    )
    
    
    Earnings (loss) per common share
    
    
    1.43
    
    
    
    .61
    
    
    
    .31
    
    
    
    .15
    
    
    
    (1.21
    )
    
    
    .41Earnings per common shareassuming dilution before cumulative
effect of change in accounting principle
    
    
    1.40
    
    
    
    .60
    
    
    
    .30
    
    
    
    .14
    
    
    
    .15
    
    
    
    .40Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.33
    )
    
    
    Earnings (loss) per common shareassuming dilution
    
    
    1.40
    
    
    
    .60
    
    
    
    .30
    
    
    
    .14
    
    
    
    (1.18
    )
    
    
    .40Cash dividends
    
    
    .015
    
    
    
    .01
    
    
    
    .01
    
    
    
    .01
    
    
    
    .0125
    
    
    
    .02PERFORMANCE MEASURES (before cumulative effect of change in
accounting principle)Return on revenues
    
    
    6.5
    %
    
    
    3.3
    %
    
    
    2.2
    %
    
    
    1.6
    %
    
    
    1.7
    %
    
    
    3.5
    %Return on average assets
    
    
    11.9
    %
    
    
    5.4
    %
    
    
    2.7
    %
    
    
    1.5
    %
    
    
    1.6
    %
    
    
    4.4
    %Return on average shareholders equity
    
    
    26.3
    %
    
    
    16.6
    %
    
    
    10.5
    %
    
    
    5.2
    %
    
    
    3.8
    %
    
    
    10.5
    %FINANCIAL POSITIONWorking capital
    
    $
    607.4
    
    
    $
    489.2
    
    
    $
    340.6
    
    
    $
    382.8
    
    
    $
    231.2
    
    
    $
    254.8Current assets as a percent of current liabilities
    
    
    242
    %
    
    
    229
    %
    
    
    216
    %
    
    
    273
    %
    
    
    188
    %
    
    
    250
    %Property, plant and equipment, net
    
    
    98.3
    
    
    
    85.9
    
    
    
    91.5
    
    
    
    79.7
    
    
    
    84.4
    
    
    
    98.4Total assets
    
    
    1,397.3
    
    
    
    1,203.6
    
    
    
    1,027.4
    
    
    
    936.2
    
    
    
    778.2
    
    
    
    825.6Total debt
    
    
    239.6
    
    
    
    289.3
    
    
    
    423.5
    
    
    
    460.6
    
    
    
    279.3
    
    
    
    299.2Shareholders equity
    
    
    675.4
    
    
    
    478.6
    
    
    
    281.3
    
    
    
    247.7
    
    
    
    236.0
    
    
    
    333.4Total debt as a percent of total capitalization
    
    
    26
    %
    
    
    38
    %
    
    
    60
    %
    
    
    65
    %
    
    
    54
    %
    
    
    47
    %Book value per share
    
    
    6.33
    
    
    
    4.63
    
    
    
    3.20
    
    
    
    2.86
    
    
    
    2.76
    
    
    
    3.96OTHER DATAProduct development expenditures
    
    $
    28.7
    
    
    $
    23.8
    
    
    $
    20.2
    
    
    $
    16.1
    
    
    $
    15.6
    
    
    $
    15.9Capital expenditures, net of retirements
    
    
    32.3
    
    
    
    13.4
    
    
    
    12.0
    
    
    
    10.3
    
    
    
    12.4
    
    
    
    10.7Net additions to rental fleet
    
    
    6.7
    
    
    
    7.9
    
    
    
    5.9
    
    
    
    4.1
    
    
    
    5.6
    
    
    
    12.4Depreciation and amortization
    
    
    28.6
    
    
    
    28.9
    
    
    
    25.7
    
    
    
    19.9
    
    
    
    21.0
    
    
    
    28.8Employees
    
    
    4,088
    
    
    
    3,927
    
    
    
    3,056
    
    
    
    2,263
    
    
    
    2,801
    
    
    
    3,300
 This summary should be read in conjunction with Managements Discussion and Analysis of
Financial Condition and Results of Operations in Item 7, Part II of this report. All share and per
share data have been adjusted for the two-for-one stock split effective March 27, 2006. Results for
fiscal 2006 included a gain of $14.6 million related to the sale of the Gradall excavator product
line. Amounts subsequent to fiscal 2003 reflect the acquisitions of OmniQuip in August 2003 and
Delta in April 2004. The cumulative effect of change in accounting principle in fiscal 2002
represents a goodwill impairment charge.
 18




---



##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
 OVERVIEW
    19
    Table of Contents        
 RESULTS OF OPERATIONS
   20




---



##### Table of Contents



Years Ended July 31,2006
    
    
    2005
    
    
    2004Segment: (a)North American Distribution
    
    $
    1,704.0
    
    
    $
    1,329.6
    
    
    $
    930.8European Distribution
    
    
    407.2
    
    
    
    261.6
    
    
    
    177.4Rest of World Distribution
    
    
    166.8
    
    
    
    130.0
    
    
    
    69.9Access Financial Solutions (b)
    
    
    11.4
    
    
    
    13.8
    
    
    
    15.9$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0Products:Aerial work platforms
    
    $
    1,159.8
    
    
    $
    888.0
    
    
    $
    562.0Telehandlers
    
    
    776.0
    
    
    
    511.8
    
    
    
    358.9Excavators
    
    
    26.8
    
    
    
    61.6
    
    
    
    52.7After-sales service and
support, including parts sales,
and used and reconditioned
equipment sales
    
    
    305.7
    
    
    
    252.4
    
    
    
    196.6Financial products (b)
    
    
    11.1
    
    
    
    11.9
    
    
    
    15.2Rentals
    
    
    10.0
    
    
    
    9.3
    
    
    
    8.6$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0Geographic: (a)United States
    
    $
    1,678.7
    
    
    $
    1,311.5
    
    
    $
    923.7Europe
    
    
    408.5
    
    
    
    264.0
    
    
    
    178.4Other
    
    
    202.2
    
    
    
    159.5
    
    
    
    91.9$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0
 
 (a)
    
    Revenues by segment and geographic region are not the same since revenues for Access
Financial Solutions are included in the United States and Europe as well as revenues from
sales in Canada being included in Other.(b)
    
    Revenues for Access Financial Solutions and for financial products are not the same
because Access Financial Solutions also receives revenues from rental purchase agreements
that are recorded for accounting purposes as rental revenues from operating leases. Results for Fiscal 2006 and 2005
   21




---



##### Table of Contents



22




---



##### Table of Contents



Strategic initiatives
    
    $
    11.7Bonus expense
    
    
    5.5Consulting and legal costs
    
    
    4.6Salaries and related benefits
    
    
    4.5Stock option expense
    
    
    3.6Profit sharing and 401(k) plan
    
    
    2.2Accelerated vesting of restricted shares
    
    
    (1.7
    )Other
    
    
    (2.8
    )$
    27.6
       23




---



##### Table of Contents



Results for Fiscal 2005 and 2004
       24




---



##### Table of Contents



Salaries and related benefits
    
    $
    5.4Bonus expense
    
    
    3.9Advertising and trade shows
    
    
    3.2Incremental expenses from Delta operations
    
    
    2.9Consulting and legal costs
    
    
    2.2Depreciation and amortization expense
    
    
    1.6Product development expenses
    
    
    1.4ServicePlus operations
    
    
    1.4Utilities
    
    
    1.1Pension and other postretirement benefit costs
    
    
    (1.1
    )OmniQuip integration expenses
    
    
    (4.2
    )Bad debt provisions
    
    
    (4.6
    )Other
    
    
    4.3$
    17.5
     25




---



##### Table of Contents



FINANCIAL CONDITION
 LIQUIDITY AND CAPITAL RESOURCES
 Cash Flow From Operating Activities
  26




---



##### Table of Contents



Cash Flow Used For Investing Activities
  Cash Flow From Financing Activities
    CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsShort- and long-term debt (a)
    
    $
    286.1
    
    
    $
    25.7
    
    
    $
    118.0
    
    
    $
    24.5
    
    
    $
    117.9Limited recourse debt (b)
    
    
    23.7
    
    
    
    16.0
    
    
    
    7.7
    
    
    
    
    
    
    
    Operating leases (c)
    
    
    37.7
    
    
    
    7.4
    
    
    
    13.7
    
    
    
    6.7
    
    
    
    9.9Purchase obligations (d)
    
    
    147.7
    
    
    
    147.7
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations (e)
    
    $
    495.2
    
    
    $
    196.8
    
    
    $
    139.4
    
    
    $
    31.2
    
    
    $
    127.8
 
 (a)
    
    Includes our 2008 Notes, 2012 Notes, a $10.0 million five-year loan and a $5.0 million
promissory note as more fully described in Note 9 of Notes to Consolidated Financial
Statements, Item 8 of Part II of this report and associated estimated interest expense
payments.(b)
    
    Our limited recourse debt is the result of the sale of finance receivables through limited
recourse monetization transactions.(c)
    
    In accordance with SFAS No. 13, Accounting for Leases, operating lease obligations are not
reflected in the balance sheet. 27




---



##### Table of Contents



(d)
    
    We enter into contractual arrangements that result in our obligation to make future payments,
including purchase obligations. We enter into these arrangements in the ordinary course of
business in order to ensure adequate levels of inventories, machinery and equipment, or
services. Purchase obligations primarily consist of inventory purchase commitments, including
raw materials, components and sourced products.(e)
    
    We anticipate that our funding obligation for our pension and postretirement benefit plans in
fiscal 2007 will approximate $1.9 million. That amount principally represents contributions
either required by regulations or laws or, with respect to unfunded plans, necessary to fund
current benefits. We have not presented estimated
pension and postretirement funding in the table above as the funding can vary from year to year
based upon changes in the fair value of the plan assets and actuarial assumptions.  Amount of Commitment Expiration Per PeriodTotalAmounts
    
    
    Less than
    
    
    
    
    
    
    
    
    
    
    OverCommitted
    
    
    1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsStandby letters of credit
    
    $
    12.5
    
    
    $
    10.8
    
    
    $
    1.7
    
    
    $
    
    
    
    $
    Guarantees (a)
    
    
    87.3
    
    
    
    13.6
    
    
    
    19.7
    
    
    
    52.1
    
    
    
    1.9Total commercial commitments
    
    $
    99.8
    
    
    $
    24.4
    
    
    $
    21.4
    
    
    $
    52.1
    
    
    $
    1.9
 
 (a)
    
    We discuss our guarantee agreements in Note 14 of the Notes to Consolidated Financial
Statements, Item 8 of Part II of this report.  STRATEGIC INITIATIVES, ACQUISITIONS AND DIVESTITURES
   28




---



##### Table of Contents



LONG-TERM DEBT AND EQUITY
     29




---



##### Table of Contents



CREDIT FACILITIES
  MONETIZATION OF FINANCE RECEIVABLES AND PROGRAM AGREEMENTS
   
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  30




---



##### Table of Contents



Allowance for Doubtful Accounts and Reserves for Finance Receivables:
 Goodwill:
 Guarantees of the Indebtedness of Others:
   Income Taxes:
  31




---



##### Table of Contents



Inventory Valuation:
 Long-Lived Assets:
 Pension and Postretirement Benefits:
 Product Liability:
 Revenue Recognition:
 32




---



##### Table of Contents



Warranty:
 
 OUTLOOK
   33




---



##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
  
 OFF-BALANCE SHEET ARRANGEMENTS
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 MARKET RISK
     34




---



##### Table of Contents



35




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 CONSOLIDATED STATEMENTS OF INCOME
 Years Ended July 31,(in millions, except per share data)
    
    2006
    
    
    2005
    
    
    2004RevenuesNet sales
    
    $
    2,268.3
    
    
    $
    1,713.8
    
    
    $
    1,170.2Financial products
    
    
    11.1
    
    
    
    11.9
    
    
    
    15.2Rentals
    
    
    10.0
    
    
    
    9.3
    
    
    
    8.62,289.4
    
    
    
    1,735.0
    
    
    
    1,194.0Cost of sales
    
    
    1,846.4
    
    
    
    1,447.8
    
    
    
    968.6Gross profit
    
    
    443.0
    
    
    
    287.2
    
    
    
    225.4Selling and administrative expenses
    
    
    164.3
    
    
    
    142.3
    
    
    
    128.5Product development expenses
    
    
    30.3
    
    
    
    24.6
    
    
    
    21.0Gain related to sale of Gradall excavator product line
    
    
    (14.6
    )
    
    
    
    
    
    
    Income from operations
    
    
    263.0
    
    
    
    120.3
    
    
    
    75.9Other income (deductions):Interest expense, net of interest income
    
    
    (17.7
    )
    
    
    (28.6
    )
    
    
    (35.4
    )Miscellaneous, net
    
    
    (3.2
    )
    
    
    1.4
    
    
    
    1.4Income before taxes
    
    
    242.1
    
    
    
    93.1
    
    
    
    41.9Income tax provision
    
    
    92.8
    
    
    
    35.9
    
    
    
    15.3Net income
    
    $
    149.3
    
    
    $
    57.2
    
    
    $
    26.6Earnings per common share
    
    $
    1.43
    
    
    $
    .61
    
    
    $
    .31Earnings per common shareassuming dilution
    
    $
    1.40
    
    
    $
    .60
    
    
    $
    .30Cash dividends per share
    
    $
    .015
    
    
    $
    .01
    
    
    $
    .01Weighted average shares outstanding
    
    
    104.3
    
    
    
    93.1
    
    
    
    85.7Weighted average shares outstandingassuming dilution
    
    
    106.5
    
    
    
    95.6
    
    
    
    88.1
 The accompanying notes are an integral part of these consolidated financial statements.
 36




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
 July 31,(in millions, except per share data)
    
    2006
    
    
    2005ASSETSCurrent AssetsCash and cash equivalents
    
    $
    328.1
    
    
    $
    223.6Trade accounts and finance receivables, less allowance for doubtful accounts
and provision for losses of $9.9 in 2006 and $11.3 in 2005
    
    
    445.6
    
    
    
    419.9Inventories
    
    
    212.9
    
    
    
    169.1Other current assets
    
    
    47.6
    
    
    
    56.7Total Current Assets
    
    
    1,034.2
    
    
    
    869.3Property, plant and equipment, net
    
    
    98.3
    
    
    
    85.9Equipment held for rental, net of accumulated depreciation of $9.6 in 2006 and
$9.0 in 2005
    
    
    21.5
    
    
    
    22.6Finance receivables, less current portion
    
    
    29.2
    
    
    
    30.4Pledged finance receivables, less current portion
    
    
    7.7
    
    
    
    33.6Goodwill
    
    
    57.4
    
    
    
    61.6Intangible assets, net of accumulated amortization of $5.3 in 2006 and $6.8 in
2005
    
    
    74.1
    
    
    
    32.1Other assets
    
    
    74.9
    
    
    
    68.1$
    1,397.3
    
    
    $
    1,203.6LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesShort-term debt
    
    $
    5.7
    
    
    $
    0.7Current portion of long-term debt
    
    
    2.8
    
    
    
    0.8Current portion of limited recourse debt from finance receivables monetizations
    
    
    16.0
    
    
    
    29.6Accounts payable
    
    
    233.7
    
    
    
    200.3Accrued expenses
    
    
    168.6
    
    
    
    148.7Total Current Liabilities
    
    
    426.8
    
    
    
    380.1Long-term debt, less current portion
    
    
    207.4
    
    
    
    224.2Limited recourse debt from finance receivables monetizations, less current
portion
    
    
    7.7
    
    
    
    34.0Accrued post-retirement benefits
    
    
    25.7
    
    
    
    31.1Other long-term liabilities
    
    
    20.0
    
    
    
    27.3Provisions for contingencies
    
    
    34.3
    
    
    
    28.3Shareholders EquityCapital stock:Authorized shares: 200.0 at $.20 par valueIssued and outstanding shares: 2006  106.8 shares; 2005  103.3 shares
    
    
    21.4
    
    
    
    20.7Additional paid-in capital
    
    
    209.3
    
    
    
    170.4Retained earnings
    
    
    458.2
    
    
    
    310.5Unearned compensation
    
    
    
    
    
    
    (7.4
    )Accumulated other comprehensive loss
    
    
    (13.5
    )
    
    
    (15.6
    )Total Shareholders Equity
    
    
    675.4
    
    
    
    478.6$
    1,397.3
    
    
    $
    1,203.6
 The accompanying notes are an integral part of these consolidated financial statements.
 37




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 AccumulatedOther
    
    
    TotalCapital Stock
    
    
    Additional
    
    
    Retained
    
    
    Unearned
    
    
    Comprehensive
    
    
    Shareholders(in millions, except per share data)
    
    Shares
    
    
    Par Value
    
    
    Paid-in Capital
    
    
    Earnings
    
    
    Compensation
    
    
    (Loss) Income
    
    
    EquityBalances at July 31, 2003
    
    
    86.7
    
    
    $
    17.3
    
    
    $
    14.9
    
    
    $
    228.5
    
    
    $
    (5.4
    )
    
    $
    (7.6
    )
    
    $
    247.7Comprehensive income:Net income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26.6Aggregate translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Minimum pension liability
adjustment, net of deferred taxes
of $0.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.4Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28.1Dividends paid: $.01 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Shares issued under incentive plan
    
    
    1.1
    
    
    
    0.3
    
    
    
    5.2
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    2.5Tax benefit related to exercise of
nonqualified stock options
    
    
    
    
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.7Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.1
    
    
    
    
    
    
    
    3.1Balances at July 31, 2004
    
    
    87.8
    
    
    
    17.6
    
    
    
    20.8
    
    
    
    254.3
    
    
    
    (5.3
    )
    
    
    (6.1
    )
    
    
    281.3Comprehensive income:Net income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57.2Aggregate translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7.6
    )Minimum pension liability
adjustment, net of deferred tax
benefit of $1.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.9
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47.7Dividends paid: $.01 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.0
    )
    
    
    
    
    
    
    
    
    
    
    (1.0
    )Net proceeds from issuance of Common
Stock
    
    
    11.5
    
    
    
    2.3
    
    
    
    117.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119.4Shares issued under incentive plan
    
    
    4.0
    
    
    
    0.8
    
    
    
    24.6
    
    
    
    
    
    
    
    (5.6
    )
    
    
    
    
    
    
    19.8Tax benefit related to exercise of
nonqualified stock options
    
    
    
    
    
    
    
    
    
    
    7.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.9Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.5
    
    
    
    
    
    
    
    3.5Balances at July 31, 2005
    
    
    103.3
    
    
    
    20.7
    
    
    
    170.4
    
    
    
    310.5
    
    
    
    (7.4
    )
    
    
    (15.6
    )
    
    
    478.6Comprehensive income:Net income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149.3Aggregate translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.3
    )Minimum pension liability
adjustment, net of deferred taxes
of $2.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.4Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151.4Dividends paid: $.015 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.6
    )
    
    
    
    
    
    
    
    
    
    
    (1.6
    )Stock options exercised
    
    
    3.1
    
    
    
    0.6
    
    
    
    18.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18.6Tax benefit related to exercise of
nonqualified stock options
    
    
    
    
    
    
    
    
    
    
    20.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.4Stock-based compensation and awards of
restricted shares
    
    
    0.4
    
    
    
    0.1
    
    
    
    7.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.0Reclassification of unearned
compensation to additional paid in
capital upon adoption of Statement of
Financial Accounting Standards No. 123R
(see Note 1)
    
    
    
    
    
    
    
    
    
    
    (7.4
    )
    
    
    
    
    
    
    7.4
    
    
    
    
    
    
    
    3⁄4Balances at July 31, 2006
    
    
    106.8
    
    
    $
    21.4
    
    
    $
    209.3
    
    
    $
    458.2
    
    
    $
    3⁄4
    
    
    $
    (13.5
    )
    
    $
    675.4
 The accompanying notes are an integral part of these consolidated financial statements.
 38




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended July 31,(in millions)
    
    2006
    
    
    2005
    
    
    2004OPERATIONSNet income
    
    $
    149.3
    
    
    $
    57.2
    
    
    $
    26.6Adjustments to reconcile net income to cash flow from
operating activities:Gain related to sale of Gradall excavator product line
    
    
    (14.6
    )
    
    
    
    
    
    
    Gain on sale of equipment held for rental
    
    
    (13.7
    )
    
    
    (11.7
    )
    
    
    (12.5
    )(Gain) loss on sale of property, plant and equipment
    
    
    (0.4
    )
    
    
    0.9
    
    
    
    0.3Non-cash charges and credits:Depreciation and amortization
    
    
    28.6
    
    
    
    28.9
    
    
    
    25.7Provision for self-insured losses
    
    
    11.7
    
    
    
    12.7
    
    
    
    10.3Deferred income taxes
    
    
    (2.3
    )
    
    
    (16.5
    )
    
    
    (7.9
    )Other
    
    
    14.9
    
    
    
    10.8
    
    
    
    14.7Changes in selected working capital items:Accounts receivable
    
    
    (45.3
    )
    
    
    (25.9
    )
    
    
    (66.3
    )Inventories
    
    
    (64.7
    )
    
    
    (15.3
    )
    
    
    9.2Accounts payable
    
    
    42.3
    
    
    
    60.4
    
    
    
    33.2Other operating assets and liabilities
    
    
    33.5
    
    
    
    30.6
    
    
    
    13.5Changes in finance receivables
    
    
    (2.3
    )
    
    
    1.9
    
    
    
    (6.1
    )Changes in pledged finance receivables
    
    
    (0.6
    )
    
    
    
    
    
    
    (14.9
    )Changes in other assets and liabilities
    
    
    (17.6
    )
    
    
    8.4
    
    
    
    (11.1
    )Cash flow from operating activities
    
    
    118.8
    
    
    
    142.4
    
    
    
    14.7INVESTMENTSPurchases of property, plant and equipment
    
    
    (32.6
    )
    
    
    (15.4
    )
    
    
    (12.4
    )Proceeds from the sale of property, plant and equipment
    
    
    0.7
    
    
    
    1.1
    
    
    
    0.1Purchases of equipment held for rental
    
    
    (43.5
    )
    
    
    (31.3
    )
    
    
    (26.7
    )Proceeds from the sale of equipment held for rental
    
    
    50.6
    
    
    
    35.1
    
    
    
    33.3Proceeds from the sale of Gradall excavator product line
    
    
    33.0
    
    
    
    
    
    
    
    Cash portion of acquisitions
    
    
    (47.1
    )
    
    
    (0.1
    )
    
    
    (109.6
    )Other
    
    
    0.1
    
    
    
    0.3
    
    
    
    0.4Cash flow used for investing activities
    
    
    (38.8
    )
    
    
    (10.3
    )
    
    
    (114.9
    )FINANCINGIssuance of long-term debt
    
    
    10.0
    
    
    
    156.0
    
    
    
    352.0Repayment of long-term debt
    
    
    (21.5
    )
    
    
    (232.5
    )
    
    
    (362.6
    )Issuance of limited recourse debt
    
    
    
    
    
    
    
    
    
    
    14.0Repayment of limited recourse debt
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Payment of dividends
    
    
    (1.6
    )
    
    
    (1.0
    )
    
    
    (0.8
    )Net proceeds from issuance of common stock
    
    
    
    
    
    
    119.4
    
    
    
    Cash proceeds received from the exercise of stock options
    
    
    18.6
    
    
    
    19.8
    
    
    
    2.5Excess tax benefits from stock-based compensation
    
    
    20.4
    
    
    
    
    
    
    
    Cash flow from financing activities
    
    
    25.9
    
    
    
    61.7
    
    
    
    4.8CURRENCY ADJUSTMENTSEffect of exchange rate changes on cash
    
    
    (1.4
    )
    
    
    (7.9
    )
    
    
    0.3CASH AND CASH EQUIVALENTSNet change in cash and cash equivalents
    
    
    104.5
    
    
    
    185.9
    
    
    
    (95.1
    )Beginning balance
    
    
    223.6
    
    
    
    37.7
    
    
    
    132.8Ending balance
    
    $
    328.1
    
    
    $
    223.6
    
    
    $
    37.7
 The accompanying notes are an integral part of these consolidated financial statements.
 39




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (in millions, except per share data and unless otherwise indicated)
 NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
 Principles of Consolidation and Statement Presentation
   Reclassifications
  Use of Estimates
  Capital Stock
  Revenue Recognition
   40




---



##### Table of Contents



Shipping and Handling Fees
  Cash and Cash Equivalents
  Inventories
   2006
    
    
    2005Finished goods
    
    $
    112.4
    
    
    $
    78.8Raw materials and work in process
    
    
    116.1
    
    
    
    107.4228.5
    
    
    
    186.2Less excess and obsolete inventory reserve
    
    
    (6.5
    )
    
    
    (8.9
    )Net inventories at FIFO cost
    
    
    222.0
    
    
    
    177.3Less LIFO reserve
    
    
    (9.1
    )
    
    
    (8.2
    )$
    212.9
    
    
    $
    169.1
  Property, Plant and Equipment and Equipment Held for Rental
  41




---



##### Table of Contents



Long-Lived Assets
  Goodwill
     42




---



##### Table of Contents



North American
    
    
    EuropeanDistribution
    
    
    Distribution
    
    
    TotalBalance as of August 1, 2004
    
    $
    60.8
    
    
    $
    2.1
    
    
    $
    62.9Additions
    
    
    
    
    
    
    0.1
    
    
    
    0.1Reductions
    
    
    (1.4
    )
    
    
    
    
    
    
    (1.4
    )Balance as of July 31, 2005
    
    
    59.4
    
    
    
    2.2
    
    
    
    61.6Dispositions
    
    
    (1.2
    )
    
    
    
    
    
    
    (1.2
    )Reductions
    
    
    (3.1
    )
    
    
    
    
    
    
    (3.1
    )Translation
    
    
    
    
    
    
    0.1
    
    
    
    0.1Balance as of July 31, 2006
    
    $
    55.1
    
    
    $
    2.3
    
    
    $
    57.4
  Income Taxes
  Product Development
  Product Warranty
   Balance as of August 1, 2004
    
    $
    11.8Payments
    
    
    (12.9
    )Accruals
    
    
    14.5Balance as of July 31, 2005
    
    
    13.4Payments
    
    
    (13.6
    )Accruals
    
    
    17.9Sale of Gradall excavator product line (see Note 3)
    
    
    (1.0
    )Balance as of July 31, 2006
    
    $
    16.7
 43




---



##### Table of Contents



Concentrations of Credit Risk
  Advertising and Promotion
  Foreign Currency Translation
   Derivative Instruments
    44




---



##### Table of Contents



Employee Retirement Plans
  Stock-Based Compensation
    45




---



##### Table of Contents



2005
    
    
    2004Net income, as reported
    
    $
    57.2
    
    
    $
    26.6Less: Total stock-based employee compensation expense
determined under fair value based method for all awards, net
of related tax effects
    
    
    (2.3
    )
    
    
    (2.9
    )Pro forma net income
    
    $
    54.9
    
    
    $
    23.7Earnings per share:Earnings per common shareas reported
    
    $
    .61
    
    
    $
    .31Earnings per common sharepro forma
    
    $
    .59
    
    
    $
    .28Earnings per common shareassuming dilutionas reported
    
    $
    .60
    
    
    $
    .30Earnings per common shareassuming dilutionpro forma
    
    $
    .57
    
    
    $
    .27
  2006
    
    2005
    
    2004Expected volatility
    
    
    48.1
    %
    
    
    51.5
    %
    
    
    59.1
    %Expected life in years
    
    
    6.0
    
    
    
    5.0
    
    
    
    5.0Dividend yield
    
    
    .07
    %
    
    
    .07
    %
    
    
    .14
    %Risk free interest rate
    
    
    4.98
    %
    
    
    4.03
    %
    
    
    3.68
    %
 Recent Accounting Pronouncements
    46




---



##### Table of Contents



NOTE 2ACQUISITIONS
 FISCAL 2006
    Property, plant and equipment
    
    $
    6.3Inventory
    
    
    0.8Other intangible assets
    
    
    45.1Other liabilities
    
    
    (0.1
    )Net cash consideration
    
    $
    52.1
   47




---



##### Table of Contents



FISCAL 2004
    Accounts receivable
    
    $
    8.5Inventory
    
    
    3.2Property, plant and equipment
    
    
    1.4Goodwill
    
    
    0.7Other intangible assets, trademarks
    
    
    2.9Accounts payable
    
    
    (3.9
    )Other assets and liabilities, net
    
    
    (2.8
    )Assumed debt
    
    
    (0.1
    )Net cash consideration
    
    $
    9.9
    48




---



##### Table of Contents



Accounts receivable
    
    $
    33.9Inventory
    
    
    37.4Property, plant and equipment
    
    
    9.7Goodwill
    
    
    26.7Other intangible assets, primarily trademarks and patents
    
    
    34.2Accounts payable
    
    
    (19.5
    )Other assets and liabilities, net (a)
    
    
    (11.7
    )Assumed debt
    
    
    (3.6
    )Net cash consideration
    
    $
    107.1
 
 (a) Includes $8.1 million related to personnel reductions and facility closings or restructuring.
     Involuntary Employee Termination and Relocation Benefits:Accrual related to OmniQuip acquisition
    
    $
    10.0Adjustment to initial accrual
    
    
    (2.4
    )Costs incurred
    
    
    (4.8
    )Balance at July 31, 2004
    
    
    2.8Adjustment to initial accrual
    
    
    (1.1
    )Costs incurred
    
    
    (1.3
    )Balance at July 31, 2005
    
    
    0.4Costs incurred
    
    
    Balance at July 31, 2006
    
    $
    0.4
 49




---



##### Table of Contents



Facility Closure and Restructuring Costs:Accrual related to OmniQuip acquisition
    
    $
    13.6Adjustment to initial accrual
    
    
    (7.7
    )Costs incurred
    
    
    (1.6
    )Balance at July 31, 2004
    
    
    4.3Adjustment to initial accrual
    
    
    (1.1
    )Balance at July 31, 2005
    
    
    3.2Adjustment to initial accrual
    
    
    (3.2
    )Balance at July 31, 2006
    
    $
    
   NOTE 3 DISPOSITION OF ASSETS
   ASSETSTrade receivables  net
    
    $
    7.3Inventories
    
    
    21.1Property, plant and equipment
    
    
    8.9Goodwill
    
    
    1.2Other assets
    
    
    2.2$
    40.7LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    8.9Accrued expenses
    
    
    3.7Other long-term liabilities
    
    
    7.5Provisions for contingencies
    
    
    0.1Accumulated other comprehensive loss
    
    
    (3.4
    )$
    16.8
 50




---



##### Table of Contents



NOTE 4BASIC AND DILUTED EARNINGS PER SHARE
  2006
    
    
    2005
    
    
    2004Net income
    
    $
    149.3
    
    
    $
    57.2
    
    
    $
    26.6Denominator for basic earnings per
shareweighted average shares
    
    
    104.3
    
    
    
    93.1
    
    
    
    85.7Effect of dilutive securitiesemployee
stock options and unvested restricted
shares
    
    
    2.2
    
    
    
    2.5
    
    
    
    2.4Denominator for diluted earnings per
shareweighted average shares adjusted for
dilutive securities
    
    
    106.5
    
    
    
    95.6
    
    
    
    88.1Earnings per common share
    
    $
    1.43
    
    
    $
    .61
    
    
    $
    .31Earnings per common shareassuming dilution
    
    $
    1.40
    
    
    $
    .60
    
    
    $
    .30
 NOTE 5 TRADE ACCOUNTS AND FINANCE RECEIVABLES
  2006
    
    
    2005Trade accounts receivable
    
    $
    428.3
    
    
    $
    394.0Finance receivables
    
    
    11.3
    
    
    
    8.0Pledged finance receivables
    
    
    15.9
    
    
    
    29.2455.5
    
    
    
    431.2Less allowance for doubtful accounts and provisions for losses
    
    
    (9.9
    )
    
    
    (11.3
    )$
    445.6
    
    
    $
    419.9
   2006
    
    
    2005Gross finance and pledged finance receivables
    
    $
    63.9
    
    
    $
    91.5Estimated residual value
    
    
    8.5
    
    
    
    18.472.4
    
    
    
    109.9Unearned income
    
    
    (8.3
    )
    
    
    (8.6
    )Net finance and pledged finance receivables
    
    
    64.1
    
    
    
    101.3Provision for losses
    
    
    (2.2
    )
    
    
    (2.8
    )$
    61.9
    
    
    $
    98.5
  51




---



##### Table of Contents



2007
    
    $
    27.62008
    
    
    15.92009
    
    
    7.22010
    
    
    4.12011
    
    
    6.2Thereafter
    
    
    2.9Residual value in equipment at lease end
    
    
    8.5Less: unearned finance income
    
    
    (8.3
    )Net investment in leases
    
    $
    64.1
  NOTE 6PROPERTY, PLANT AND EQUIPMENT
  2006
    
    
    2005Land and improvements
    
    $
    8.2
    
    
    $
    8.7Buildings and improvements
    
    
    61.1
    
    
    
    63.4Machinery and equipment
    
    
    115.2
    
    
    
    111.1Construction-in-process
    
    
    23.0
    
    
    
    4.6207.5
    
    
    
    187.8Less allowance for depreciation and amortization
    
    
    (109.2
    )
    
    
    (101.9
    )$
    98.3
    
    
    $
    85.9
  52




---



##### Table of Contents



NOTE 7INTANGIBLE ASSETS
  Weighted Average
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmortization Period (in years)
    
    
    Value
    
    
    Amortization
    
    
    ValueFinite LivedCustomer-related
    
    20
    

    
    
    $
    30.8
    
    
    $
    (1.3
    )
    
    $
    29.5Patents
    
    10
    

    
    
    
    15.7
    
    
    
    (3.5
    )
    
    
    12.2Covenant-not-to-compete
    
    20
    

    
    
    
    6.4
    
    
    
    (0.2
    )
    
    
    6.2Trademark
    
    10
    

    
    
    
    1.5
    
    
    
    (0.3
    )
    
    
    1.217
    

    
    
    
    54.4
    
    
    
    (5.3
    )
    
    
    49.1Indefinite LivedTrademarks
    
    
    
    
    
    
    25.0
    
    
    
    
    
    
    
    25.0Total Intangible Assets
    
    
    
    
    
    $
    79.4
    
    
    $
    (5.3
    )
    
    $
    74.1
  Weighted Average
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmortization Period (in years)
    
    
    Value
    
    
    Amortization
    
    
    ValueFinite LivedPatents
    
    9
    

    
    
    $
    5.8
    
    
    $
    (1.6
    )
    
    $
    4.2Contracts
    
    2
    

    
    
    
    3.8
    
    
    
    (3.8
    )
    
    
    Trademark
    
    10
    

    
    
    
    1.5
    
    
    
    (0.2
    )
    
    
    1.3Other
    
    10
    

    
    
    
    2.8
    
    
    
    (1.2
    )
    
    
    1.67
    

    
    
    
    13.9
    
    
    
    (6.8
    )
    
    
    7.1Indefinite LivedTrademarks
    
    
    
    
    
    
    25.0
    
    
    
    
    
    
    
    25.0Total Intangible Assets
    
    
    
    
    
    $
    38.9
    
    
    $
    (6.8
    )
    
    $
    32.1
  NOTE 8OTHER ASSETS
  2006
    
    
    2005Future income tax benefits
    
    $
    37.1
    
    
    $
    38.9Customer notes receivable and other investments
    
    
    27.6
    
    
    
    19.7Deferred finance charges
    
    
    7.0
    
    
    
    8.7Other
    
    
    6.1
    
    
    
    8.377.8
    
    
    
    75.6Less allowance for notes receivable
    
    
    (2.9
    )
    
    
    (7.5
    )$
    74.9
    
    
    $
    68.1
  53




---



##### Table of Contents



NOTE 9BANK CREDIT LINES AND LONG-TERM DEBT
    2006
    
    
    20058 3/8% senior subordinated notes due 2012
    
    $
    113.8
    
    
    $
    113.88 1/4% senior unsecured notes due 2008
    
    
    89.5
    
    
    
    110.0Fair value hedging adjustment (a)
    
    
    (6.3
    )
    
    
    (2.9
    )Other
    
    
    13.2
    
    
    
    4.1210.2
    
    
    
    225.0Less current portion
    
    
    (2.8
    )
    
    
    (0.8
    )$
    207.4
    
    
    $
    224.2
 
 (a)
    
    These hedging adjustments are transactions that we have entered into related to our 8 1/4%
senior unsecured notes due 2008 (2008 Notes) and our 8 3/8% senior subordinated notes due
2012 (2012 Notes).  54




---



##### Table of Contents



NOTE 10LIMITED RECOURSE DEBT FROM FINANCE RECEIVABLES MONETIZATIONS
  NOTE 11ACCRUED EXPENSES
  2006
    
    
    2005Accrued payroll and related taxes and benefits
    
    $
    40.1
    
    
    $
    37.2Accrued income taxes
    
    
    35.2
    
    
    
    17.7Accrued sales rebate and commissions
    
    
    22.1
    
    
    
    22.7Accrued warranty
    
    
    16.7
    
    
    
    13.4Provisions for contingencies
    
    
    9.5
    
    
    
    9.5Fair value of forward exchange contracts
    
    
    9.2
    
    
    
    Other accrued expenses
    
    
    35.8
    
    
    
    48.2$
    168.6
    
    
    $
    148.7
 55




---



##### Table of Contents



NOTE 12INCOME TAXES
  2006
    
    
    2005
    
    
    2004Pre-tax income:United States
    
    $
    225.3
    
    
    $
    85.0
    
    
    $
    34.4Other countries
    
    
    16.8
    
    
    
    8.1
    
    
    
    7.5$
    242.1
    
    
    $
    93.1
    
    
    $
    41.9
  2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    86.3
    
    
    $
    42.8
    
    
    $
    20.2State
    
    
    7.2
    
    
    
    2.7
    
    
    
    (0.2
    )Foreign
    
    
    1.5
    
    
    
    6.2
    
    
    
    4.295.0
    
    
    
    51.7
    
    
    
    24.2Deferred:Federal
    
    
    (4.1
    )
    
    
    (15.0
    )
    
    
    (7.9
    )State
    
    
    2.7
    
    
    
    (0.6
    )
    
    
    (0.7
    )Foreign
    
    
    (0.8
    )
    
    
    (0.2
    )
    
    
    (0.3
    )(2.2
    )
    
    
    (15.8
    )
    
    
    (8.9
    )$
    92.8
    
    
    $
    35.9
    
    
    $
    15.3
   2006
    
    2005
    
    2004Statutory U.S. federal income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Increase in contingencies
    
    
    2
    
    
    
    2
    
    
    
    Effect of export profits taxed at lower rates and
federal manufacturing deduction
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )Effect of earnings sourced in various jurisdictions
    
    
    1
    
    
    
    3
    
    
    
    3Executive compensation
    
    
    
    
    
    
    1
    
    
    
    Other
    
    
    1
    
    
    
    
    
    
    
    1Effective tax rate
    
    
    38
    %
    
    
    39
    %
    
    
    36
    %
 56




---



##### Table of Contents



2006
    
    
    2005Future income tax benefits  current:Warranty and product liability
    
    $
    9.8
    
    
    $
    7.9Accrual for sales allowances
    
    
    8.1
    
    
    
    8.4Accounts receivable and inventory
    
    
    5.6
    
    
    
    7.2Accrued payroll and employee-related benefits
    
    
    4.9
    
    
    
    2.1Other items
    
    
    1.3
    
    
    
    2.229.7
    
    
    
    27.8Non-current deferred assets:Postretirement benefits
    
    
    17.8
    
    
    
    22.2Contingencies and product liability
    
    
    14.4
    
    
    
    10.9Loss carryforwards
    
    
    4.3
    
    
    
    6.2Other
    
    
    4.8
    
    
    
    3.9Valuation allowance
    
    
    (4.2
    )
    
    
    (4.3
    )37.1
    
    
    
    38.9Net deferred tax assets
    
    $
    66.8
    
    
    $
    66.7
   NOTE 13EMPLOYEE RETIREMENT PLANS
     57




---



##### Table of Contents



Pension Benefits
    
    
    Postretirement Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    42.2
    
    
    $
    33.2
    
    
    $
    36.7
    
    
    $
    36.3Service cost
    
    
    2.0
    
    
    
    2.3
    
    
    
    1.4
    
    
    
    1.6Interest cost
    
    
    1.6
    
    
    
    2.0
    
    
    
    1.8
    
    
    
    2.0Amendments
    
    
    
    
    
    
    (1.0
    )
    
    
    
    
    
    
    Change in plan provisions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.4
    )Actuarial (gain)/loss
    
    
    0.1
    
    
    
    7.7
    
    
    
    (0.7
    )
    
    
    3.1Benefits paid
    
    
    (1.1
    )
    
    
    (2.0
    )
    
    
    (1.5
    )
    
    
    (1.9
    )Settlements
    
    
    (24.9
    )
    
    
    
    
    
    
    
    
    
    
    Curtailment of plans
    
    
    
    
    
    
    
    
    
    
    (13.2
    )
    
    
    Benefit obligation at end of year
    
    $
    19.9
    
    
    $
    42.2
    
    
    $
    24.5
    
    
    $
    36.7Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    15.7
    
    
    $
    14.7
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    1.4
    
    
    
    0.7
    
    
    
    
    
    
    
    Contributions
    
    
    1.0
    
    
    
    2.3
    
    
    
    1.5
    
    
    
    1.9Benefits paid
    
    
    (1.1
    )
    
    
    (2.0
    )
    
    
    (1.5
    )
    
    
    (1.9
    )Settlements
    
    
    (17.0
    )
    
    
    
    
    
    
    
    
    
    
    Fair value of plan assets at end of year
    
    $
    
    
    
    $
    15.7
    
    
    $
    
    
    
    $
    Funded status
    
    $
    (19.9
    )
    
    $
    (26.5
    )
    
    $
    (24.5
    )
    
    $
    (36.7
    )Unrecognized net actuarial (gain)/loss
    
    
    4.8
    
    
    
    14.5
    
    
    
    (0.3
    )
    
    
    10.6Unrecognized prior service cost
    
    
    
    
    
    
    (0.7
    )
    
    
    (0.9
    )
    
    
    (5.0
    )Accrued benefit cost
    
    $
    (15.1
    )
    
    $
    (12.7
    )
    
    $
    (25.7
    )
    
    $
    (31.1
    )Amounts recognized in the consolidated balance
sheet:Accrued benefit cost
    
    $
    (15.1
    )
    
    $
    (18.2
    )
    
    $
    (25.7
    )
    
    $
    (31.1
    )Accumulated other comprehensive loss
    
    
    
    
    
    
    5.5
    
    
    
    
    
    
    
    Net amount recognized
    
    $
    (15.1
    )
    
    $
    (12.7
    )
    
    $
    (25.7
    )
    
    $
    (31.1
    )
  2006
    
    2005Equity securities
    
    
    
    %
    
    
    70
    %Debt securities
    
    
    
    
    
    
    29Cash
    
    
    
    
    
    
    1
    %
    
    
    100
    %
  58




---



##### Table of Contents



2006
    
    2005All defined benefit pension plans:Accumulated benefit obligation
    
    $
    14.5
    
    
    $
    33.8Unfunded defined benefit pension plans:Projected benefit obligation
    
    
    19.9
    
    
    
    17.6Accumulated benefit obligation
    
    
    14.5
    
    
    
    12.2Defined benefit pension plans with an accumulated
benefit obligation in excess of the fair value of
plan assets:Projected benefit obligation
    
    
    
    
    
    
    24.5Accumulated benefit obligation
    
    
    
    
    
    
    21.6Fair value of plan assets
    
    
    
    
    
    
    15.7
   Pension Benefits
    
    
    Postretirement Benefits2006
    
    
    2005
    
    
    2004
    
    
    2006
    
    
    2005
    
    
    2004Service cost
    
    $
    2.0
    
    
    $
    2.3
    
    
    $
    2.1
    
    
    $
    1.4
    
    
    $
    1.6
    
    
    $
    2.0Interest cost
    
    
    1.6
    
    
    
    2.0
    
    
    
    2.0
    
    
    
    1.8
    
    
    
    2.0
    
    
    
    2.4Expected return
    
    
    (0.6
    )
    
    
    (1.2
    )
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    (0.9
    )
    
    
    (0.7
    )
    
    
    (0.4
    )Amortization of net loss
    
    
    0.6
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.9Curtailment gain recognized
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlement loss recognized
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Curtailment credit for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.7
    )
    
    
    
    
    
    
    $
    3.4
    
    
    $
    3.7
    
    
    $
    4.0
    
    
    $
    (3.9
    )
    
    $
    3.3
    
    
    $
    4.9
    59




---



##### Table of Contents



Pension Benefits
    
    Postretirement Benefits2006
    
    2005
    
    2004
    
    2006
    
    2005
    
    2004Discount rate
    
    
    6.00
    %
    
    
    5.50
    %
    
    
    6.25
    %
    
    
    6.00
    %
    
    
    5.50
    %
    
    
    6.25
    %Expected return on plan assets
    
    
    
    
    
    
    7.75
    %
    
    
    8.0
    %
    
    
    
    
    
    
    
    
    
    
    Rate of compensation increase
    
    
    6.00
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    
    
    
    
    
    
    
    
    
   One-Percentage-PointIncrease
    
    DecreasePostretirement benefit obligation
    
    $
    1.7
    
    
    $
    1.6Service and interest cost components
    
    $
    0.6
    
    
    $
    0.5
   Pension
    
    PostretirementBenefits
    
    Benefits2007
    
    $
    0.5
    
    
    $
    1.82008
    
    
    1.0
    
    
    
    1.92009
    
    
    12.6
    
    
    
    2.02010
    
    
    0.5
    
    
    
    2.12011
    
    
    0.5
    
    
    
    2.22012 - 2016
    
    
    17.6
    
    
    
    11.1
  60




---



##### Table of Contents



NOTE 14COMMITMENTS AND CONTINGENCIES
      NOTE 15LEASES
   61




---



##### Table of Contents



2007
    
    $
    0.42008
    
    
    0.42009
    
    
    0.42010
    
    
    0.42011
    
    
    0.4Thereafter
    
    
    1.7Total minimum lease payments
    
    
    3.7Less amount representing interest
    
    
    (.8
    )Present value of net minimum lease payments
    
    
    2.9Less obligations under capital lease, current portion
    
    
    (.3
    )Obligations under capital lease, less current portion
    
    $
    2.6
  NOTE 16STOCK-BASED INCENTIVE PLAN
     62




---



##### Table of Contents



Number of SecuritiesNumber of Securities
    
    
    
    
    
    
    Remaining Availableto Be Issued Upon
    
    
    Weighted Average
    
    
    for Future IssuanceExercise of
    
    
    Exercise Price of
    
    
    Under EquityPlan Category
    
    Outstanding Options
    
    
    Outstanding Options
    
    
    Compensation PlansEquity
compensation plans
approved by
security holders
    
    
    3,261
    
    
    $
    8.52
    
    
    
    4,853Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,261
    
    
    $
    8.52
    
    
    
    4,853
  2006
    
    
    2005
    
    
    2004Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseOptions
    
    
   Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding options at
the beginning of the year
    
    
    6,032
    
    
    $
    6.57
    
    
    
    9,614
    
    
    $
    5.87
    
    
    
    9,358
    
    
    $
    5.58Options granted
    
    
    406
    
    
    
    18.53
    
    
    
    508
    
    
    
    14.52
    
    
    
    1,152
    
    
    
    6.96Options forfeited or expired
    
    
    (83
    )
    
    
    8.83
    
    
    
    (64
    )
    
    
    6.39
    
    
    
    (234
    )
    
    
    5.67Options exercised
    
    
    (3,094
    )
    
    
    6.01
    
    
    
    (4,026
    )
    
    
    5.90
    
    
    
    (662
    )
    
    
    3.80Outstanding options at the
end of the year
    
    
    3,261
    
    
    $
    8.52
    
    
    
    6,032
    
    
    $
    6.57
    
    
    
    9,614
    
    
    $
    5.87Exercisable options at the
end of the year
    
    
    2,216
    
    
    $
    6.07
    
    
    
    3,740
    
    
    $
    6.06
    
    
    
    6,274
    
    
    $
    6.21
   63




---



##### Table of Contents



Options OutstandingWeighted AverageRemainingContractual Term
    
    
    Weighted Average
    
    
    AggregateRange of Exercise Prices
    
    Number Outstanding
    
    
    (years)
    
    
    Exercise Price
    
    
    Intrinsic Value$3.95 to $5.46
    
    
    1,369
    
    
    
    6
    
    
    $
    4.43
    
    
    $
    18.85.65 to 7.38
    
    
    898
    
    
    
    7
    
    
    
    6.93
    
    
    
    10.08.49 to 8.85
    
    
    78
    
    
    
    3
    
    
    
    8.73
    
    
    
    0.79.05 to 22.76
    
    
    916
    
    
    
    5
    
    
    
    16.17
    
    
    
    1.93,261
    
    
    
    7
    
    
    
    8.52
    
    
    $
    31.4Our information with respect to stock options vested or expected to vest at July 31, 2006 is
as follows (in thousands, except weighted average exercise price and aggregate intrinsic value):Options Vested or Expected to VestWeighted AverageRemainingNumber
    
    
    Contractual Term
    
    
    Weighted Average
    
    
    Aggregate IntrinsicRange of Exercise Prices
    
    Outstanding
    
    
    (years)
    
    
    Exercise Price
    
    
    Value$3.95 to $5.46
    
    
    1,369
    
    
    
    6
    
    
    $
    4.43
    
    
    $
    18.85.65 to 7.38
    
    
    869
    
    
    
    7
    
    
    
    6.93
    
    
    
    9.68.49 to 8.85
    
    
    77
    
    
    
    3
    
    
    
    8.73
    
    
    
    0.79.05 to 22.76
    
    
    882
    
    
    
    9
    
    
    
    16.14
    
    
    
    1.93,197
    
    
    
    7
    
    
    
    8.45
    
    
    $
    31.0Our information with respect to stock options exercisable at July 31, 2006 is as follows (in
thousands, except weighted average exercise price and aggregate intrinsic value):Options ExercisableWeighted AverageRemainingNumber
    
    
    Contractual Term
    
    
    Weighted Average
    
    
    Aggregate IntrinsicRange of Exercise Prices
    
    Outstanding
    
    
    (years)
    
    
    Exercise Price
    
    
    Value$3.95 to $5.46
    
    
    1,369
    
    
    
    6
    
    
    $
    4.43
    
    
    $
    18.85.65 to 7.38
    
    
    566
    
    
    
    7
    
    
    
    6.90
    
    
    
    6.38.49 to 8.85
    
    
    72
    
    
    
    2
    
    
    
    8.75
    
    
    
    0.79.05 to 22.76
    
    
    209
    
    
    
    7
    
    
    
    13.58
    
    
    
    0.92,216
    
    
    
    6
    
    
    
    6.07
    
    
    $
    26.7
  64




---



##### Table of Contents



2006
    
    
    2005
    
    
    2004Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber of
    
    
    Grant Date
    
    
    Number of
    
    
    Grant Date
    
    
    Number of
    
    
    Grant DateShares
    
    
    Fair Value
    
    
  Shares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueNonvested at the beginning
of the year
    
    
    888
    
    
    $
    9.86
    
    
    
    1,809
    
    
    $
    4.84
    
    
    
    1,446
    
    
    $
    4.31Granted
    
    
    385
    
    
    
    19.04
    
    
    
    392
    
    
    
    14.21
    
    
    
    440
    
    
    
    6.92Vested
    
    
    (96
    )
    
    
    6.50
    
    
    
    (1,306
    )
    
    
    4.43
    
    
    
    (50
    )
    
    
    6.40Forfeited or transferred to
deferred compensation plan
    
    
    (12
    )
    
    
    18.46
    
    
    
    (7
    )
    
    
    7.99
    
    
    
    (27
    )
    
    
    4.83Nonvested at the end of the year
    
    
    1,165
    
    
    $
    13.10
    
    
    
    888
    
    
    $
    9.86
    
    
    
    1,809
    
    
    $
    4.84
   NOTE 17INTEREST EXPENSE, NET OF INTEREST INCOME
  2006
    
    
    2005
    
    
    2004Interest expense
    
    $
    27.3
    
    
    $
    32.2
    
    
    $
    38.1Interest income
    
    
    (9.6
    )
    
    
    (3.6
    )
    
    
    (2.7
    )$
    17.7
    
    
    $
    28.6
    
    
    $
    35.4
 NOTE 18SEGMENT INFORMATION
   65




---



##### Table of Contents



2006
    
    
    2005
    
    
    2004Revenues:North American Distribution
    
    $
    1,704.0
    
    
    $
    1,329.6
    
    
    $
    930.8European Distribution
    
    
    407.2
    
    
    
    261.6
    
    
    
    177.4Rest of World Distribution
    
    
    166.8
    
    
    
    130.0
    
    
    
    69.9Access Financial Solutions
    
    
    11.4
    
    
    
    13.8
    
    
    
    15.9$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0Segment profit (loss):North American Distribution (a)
    
    $
    254.2
    
    
    $
    114.3
    
    
    $
    92.5European Distribution
    
    
    39.0
    
    
    
    21.5
    
    
    
    3.8Rest of World Distribution
    
    
    39.4
    
    
    
    32.5
    
    
    
    15.3Access Financial Solutions
    
    
    4.9
    
    
    
    4.4
    
    
    
    1.7General corporate
    
    
    (77.6
    )
    
    
    (58.8
    )
    
    
    (48.3
    )Segment profit
    
    
    259.9
    
    
    
    113.9
    
    
    
    65.0Add Access Financial Solutions interest expense
    
    
    3.1
    
    
    
    6.4
    
    
    
    10.9Operating income
    
    $
    263.0
    
    
    $
    120.3
    
    
    $
    75.9Depreciation and amortization:North American Distribution
    
    $
    16.8
    
    
    $
    19.3
    
    
    $
    20.4European Distribution
    
    
    9.5
    
    
    
    6.7
    
    
    
    2.9Rest of World Distribution
    
    
    0.4
    
    
    
    0.4
    
    
    
    0.4Access Financial Solutions
    
    
    0.3
    
    
    
    0.9
    
    
    
    0.7General corporate
    
    
    1.6
    
    
    
    1.6
    
    
    
    1.3$
    28.6
    
    
    $
    28.9
    
    
    $
    25.7
 
 (a)
    
    Includes $14.6 million in fiscal 2006 related to the gain on the sale of the Gradall excavator
product line. 66




---



##### Table of Contents



2006
    
    
    2005
    
    
    2004Expenditures for long-lived assets:North American Distribution
    
    $
    47.4
    
    
    $
    31.1
    
    
    $
    28.6European Distribution
    
    
    25.5
    
    
    
    12.2
    
    
    
    9.2Rest of World Distribution
    
    
    0.7
    
    
    
    0.8
    
    
    
    0.4Access Financial Solutions
    
    
    
    
    
    
    0.2
    
    
    
    0.3General corporate
    
    
    2.5
    
    
    
    2.3
    
    
    
    0.6$
    76.1
    
    
    $
    46.6
    
    
    $
    39.1Assets:North American Distribution
    
    $
    580.3
    
    
    $
    511.9
    
    
    $
    535.2European Distribution
    
    
    327.7
    
    
    
    281.6
    
    
    
    204.0Rest of World Distribution
    
    
    46.9
    
    
    
    54.1
    
    
    
    28.3Access Financial Solutions
    
    
    77.6
    
    
    
    111.1
    
    
    
    191.2General corporate
    
    
    364.8
    
    
    
    244.9
    
    
    
    68.7$
    1,397.3
    
    
    $
    1,203.6
    
    
    $
    1,027.4
  2006
    
    2005
    
    2004North American DistributionCustomer A
    
    
    17
    %
    
    
    18
    %
    
    
    16
    %Customer B
    
    
    14
    %
    
    
    
    %
    
    
    10
    %Customer C
    
    
    12
    %
    
    
    13
    %
    
    
    
    %European DistributionCustomer D
    
    
    12
    %
    
    
    
    %
    
    
    
    %Customer E
    
    
    10
    %
    
    
    13
    %
    
    
    
    %Rest of World DistributionCustomer H
    
    
    
    %
    
    
    11
    %
    
    
    11
    %Access Financial SolutionsCustomer A
    
    
    
    %
    
    
    
    %
    
    
    10
    %Customer F
    
    
    14
    %
    
    
    16
    %
    
    
    17
    %Customer G
    
    
    12
    %
    
    
    
    %
    
    
    
    %Customer I
    
    
    
    %
    
    
    
    %
    
    
    17
    %
  2006
    
    
    2005
    
    
    2004Aerial work platforms
    
    $
    1,159.8
    
    
    $
    888.0
    
    
    $
    562.0Telehandlers
    
    
    776.0
    
    
    
    511.8
    
    
    
    358.9Excavators
    
    
    26.8
    
    
    
    61.6
    
    
    
    52.7After-sales service and support,
including parts sales, and used
and reconditioned equipment sales
    
    
    305.7
    
    
    
    252.4
    
    
    
    196.6Financial products
    
    
    11.1
    
    
    
    11.9
    
    
    
    15.2Rentals
    
    
    10.0
    
    
    
    9.3
    
    
    
    8.6$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0
  67




---



##### Table of Contents



2006
    
    
    2005
    
    
    2004United States
    
    $
    1,678.7
    
    
    $
    1,311.5
    
    
    $
    923.7Europe
    
    
    408.5
    
    
    
    264.0
    
    
    
    178.4Other
    
    
    202.2
    
    
    
    159.5
    
    
    
    91.9$
    2,289.4
    
    
    $
    1,735.0
    
    
    $
    1,194.0
  2006
    
    
    2005
    
    
    2004United States
    
    $
    164.2
    
    
    $
    110.1
    
    
    $
    121.6Europe
    
    
    27.7
    
    
    
    28.9
    
    
    
    24.5Other
    
    
    2.0
    
    
    
    1.6
    
    
    
    1.8$
    193.9
    
    
    $
    140.6
    
    
    $
    147.9
 NOTE 19COMPREHENSIVE INCOME
  2006
    
    
    2005Aggregate translation adjustments
    
    $
    (13.5
    )
    
    $
    (12.2
    )Minimum pension liability adjustment, net of deferred tax benefit
    
    
    
    
    
    
    (3.4
    )$
    (13.5
    )
    
    $
    (15.6
    )
  NOTE 20SHAREHOLDER RIGHTS PLAN
     68




---



##### Table of Contents



NOTE 21SUBSEQUENT EVENT
  NOTE 22UNAUDITED QUARTERLY FINANCIAL INFORMATION
  Earnings (loss)
    
    
    Earnings (loss) PerNet (Loss)
    
    
    Per Common
    
    
    Common ShareRevenues
    
    
    Gross Profit
    
    
    Income
    
    
    Share
    
    
    Assuming Dilution2006October 30
    
    $
    477.7
    
    
    $
    94.9
    
    
    $
    27.9
    
    
    $
    .27
    
    
    $
    .27January 29
    
    
    494.4
    
    
    
    95.9
    
    
    
    27.4
    
    
    
    .26
    
    
    
    .26April 30
    
    
    629.6
    
    
    
    118.1
    
    
    
    46.2
    
    
    
    .44
    
    
    
    .43July 31
    
    
    687.7
    
    
    
    134.1
    
    
    
    47.8
    
    
    
    .45
    
    
    
    .45$
    2,289.4
    
    
    $
    443.0
    
    
    $
    149.3
    
    
    $
    1.43
    
    
    $
    1.402005October 31
    
    $
    306.7
    
    
    $
    25.7
    
    
    
    ($8.7
    )
    
    
    ($.10
    )
    
    
    ($.10
    )January 30
    
    
    353.4
    
    
    
    54.0
    
    
    
    7.5
    
    
    
    .09
    
    
    
    .08May 1
    
    
    505.4
    
    
    
    97.9
    
    
    
    22.7
    
    
    
    .24
    
    
    
    .24July 31
    
    
    569.5
    
    
    
    109.6
    
    
    
    35.7
    
    
    
    .35
    
    
    
    .35$
    1,735.0
    
    
    $
    287.2
    
    
    $
    57.2
    
    
    $
    .61
    
    
    $
    .60
   69




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 70




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     .
   
 71




---



##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
     Changes in Internal Control Over Financial Reporting
  72




---



##### Table of Contents



CEO and CFO Certifications
  
 ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
     
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  73




---



##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
 (a) (1) Financial Statements
  
 (2) Financial Statement Schedules
  
 (3) Exhibits
  (b) See Item 15(a) 3 above.
 (c) See Item 15(a) 1 and 15(a) 2 above.
 74




---



##### Table of Contents



SIGNATURES
  JLG INDUSTRIES, INC.
(Registrant)/s/ William M. LaskyWilliam M. Lasky, Chairman of the Board,President and Chief Executive Officer  /s/ James H. Woodward, Jr.

James H. Woodward, Jr., Executive Vice President
and Chief Financial Officer/s/John W. Cook

John W. Cook, Chief Accounting Officer/s/ Roy V. Armes

Roy V. Armes, Director/s/ Thomas P. Capo

Thomas P. Capo, Director/s/ James A. Mezera

James A. Mezera, Director/s/ Stephen Rabinowitz
Stephen Rabinowitz, Director
 75




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Articles of Incorporation of JLG Industries, Inc.,
which appears as Exhibit 3.1 to the Companys Form 8-K
(File No. 1-12123filed March 23, 2006), is hereby
incorporated by reference.3.2
    
    By-laws of JLG Industries, Inc., which appear as
Exhibit 3 to the Companys Form 10-Q (File No.
1-12123 filed March 4, 2003), is hereby incorporated
by reference.4.1
    
    Rights Agreement, dated as of May 24, 2000, between
JLG Industries, Inc. and American Stock Transfer and
Trust Company, which appears as Exhibit 1 to the
Companys Form 8-A12B (File No. 1-12123filed May 31,
2000), is hereby incorporated by reference.4.2
    
    Purchase Agreement, dated June 12, 2002, among JLG
Industries, Inc., the Note Guarantors, Wachovia
Securities, Inc., Credit Suisse First Boston
Corporation, J.P. Morgan Securities, Inc., Banc One
Capital Markets, Inc., BMO Nesbitt Burns Corp., BNY
Capital Markets, Inc., and Credit Lyonnais Securities
(USA) Inc., which appears as Exhibit 1 to the
Companys Form S-4 (File No. 333-99217filed September
6, 2002), is hereby incorporated by reference.4.3
    
    Indenture dated June 17, 2002, by and among JLG
Industries, Inc., the Note Guarantors, and The Bank of
New York, as Trustee, which appears as Exhibit 4.1 to
the Companys Form S-4 (File No. 333-99217filed
September 6, 2002), is hereby incorporated by
reference.4.4
    
    Registration Rights Agreement, dated June 17, 2002, by
and among JLG Industries, Inc., the Note Guarantors,
and Wachovia Securities, Inc., Credit Suisse First
Boston Corporation, J.P. Morgan Securities Inc., Banc
One Capital Markets, Inc., BMO Nesbitt Burns Corp.,
BNY Capital Markets, Inc., and Credit Lyonnais
Securities (USA) Inc., which appears as Exhibit 4.2 to
the Companys Form S-4 (File No. 333-99217 filed
September 6, 2002), is hereby incorporated by
reference.4.5
    
    Purchase Agreement, dated April 30, 2003, among JLG
Industries, Inc., the Note Guarantors (as defined
therein), the Initial Purchasers (as defined therein)
and The Bank of New York, as Trustee, which appears as
Exhibit 1 to the Companys Form S-4 (File No.
333-107468filed July 30, 2003), is hereby
incorporated by reference.4.6
    
    Indenture dated as of May 5, 2003, by and among JLG
Industries, Inc., the Note Guarantors party thereto,
and The Bank of New York, as Trustee, which appears as
Exhibit 4 to the Companys Form 10-Q (File No.
1-12123filed May 29, 2003), is hereby incorporated by
reference.4.7
    
    Registration Rights Agreement, dated May 5, 2003, by
and among JLG Industries, Inc., the Note Guarantors,
and Credit Suisse First Boston LLC, Deutsche Bank
Securities, Inc., Banc One Capital Markets, Inc., BMO
Nesbitt Burns Corp., Credit Lyonnais Securities (USA)
Inc., NatCity Investments, Inc., and SunTrust Capital
Markets, Inc., as Initial Purchasers, which appears as
Exhibit 4.2 to the Companys Form S-4 (File No.
333-107468filed July 30, 2003), is hereby
incorporated by reference.
 76




---



##### Table of Contents



ExhibitNumber
    
    Description10.1
    
    JLG Industries, Inc. Directors
Deferred Compensation Plan as
amended and restated effective
November 1, 2003, which appears as
Exhibit 10.2 to the Companys Form
10-Q (File No. 1-12123filed March
16, 2004), is hereby incorporated by
reference.10.2
    
    JLG Industries, Inc. 2005 Long Term
Incentive Plan, which appears as
Exhibit 10.1 to the Companys Form
10-Q (File No. 1-12123filed
November 22, 2005), is hereby
incorporated by reference.10.3
    
    JLG Industries, Inc. Supplemental
Executive Retirement Plan effective
September 6, 2000, which appears as
Exhibit 10.1 to the Companys Form
10-Q (File No. 1-12123filed June
14, 2001), is hereby incorporated by
reference.10.4
    
    JLG Industries, Inc. Executive
Retiree Medical Benefits Plan
effective June 1, 1995, which
appears as Exhibit 10.9 to the
Companys Form 10-K (File No.
1-12123filed October 17, 1996), is
hereby incorporated by reference.10.5
    
    JLG Industries, Inc. Executive
Severance Plan effective February
16, 2000, which appears as Exhibit
10.1 to the Companys Form 10-Q
(File No. 1-12123filed June 5,
2000), is hereby incorporated by
reference.10.6
    
    Employment Agreement dated November
1, 1999 between JLG Industries, Inc.
and William M. Lasky, which appears
as Exhibit 10.2 to the Companys
Form 10-Q (File No. 1-12123filed
December 14, 1999), is hereby
incorporated by reference.10.7
    
    Employment Agreement dated July 18,
2000 between JLG Industries, Inc.
and James H. Woodward, Jr., which
appears as Exhibit 10.14 to the
Companys Form 10-K (File No.
1-12123filed October 6, 2000), is
hereby incorporated by reference.10.8
    
    JLG Industries, Inc. Executive
Deferred Compensation Plan as
amended and restated effective
November 1, 2003, which appears as
Exhibit 10.3 to the Companys Form
10-Q (File No. 1-12123filed March
16, 2004), is hereby incorporated by
reference.10.9
    
    Revolving Credit Agreement dated as
of September 23, 2003 among JLG
Industries, Inc., the several banks
and other financial institutions and
lenders from time to time party
hereto, SunTrust Bank, as
Administrative Agent, Manufacturers
and Traders Trust Company, as
Syndication Agent, and Standard
Federal Bank N.A., as Documentation
Agent, which appears as Exhibit
10.17 to the Companys Form 10-K
(File No. 1-12123filed October 6,
2003), is hereby incorporated by
reference.10.10
    
    First Amendment and Waiver to
Revolving Credit Agreement dated
February 4, 2004 among JLG
Industries, Inc., the several banks
and other financial institutions and
lenders from time to time party
hereto, SunTrust Bank, as
Administrative Agent, Manufacturers
and Traders Trust Company, as
Syndication Agent, and Standard
Federal Bank N.A., as Documentation
Agent which appears as Exhibit 10.4
to the Companys Form 10-Q (File No.
1-12123filed March 16, 2004), is
hereby incorporated by reference.
 77




---



##### Table of Contents



ExhibitNumber
    
    Description10.11
    
    Amendment to Revolving Credit
Agreement dated February 24, 2005,
among JLG Industries, Inc., the
several banks and other financial
institutions and lenders from time
to time party thereto, SunTrust
Bank, as Administrative Agent,
Issuing Bank and Swingline Lender,
Manufacturers and Traders Trust
Company, as Syndication Agent, and
Standard Federal Bank, N.A., as
Documentation Agent, which appears
as Exhibit 10.1 to the Companys
Form 8-K (File No. 1-12123filed
March 1, 2005), is hereby
incorporated by reference.10.12
    
    Amended and Restated Revolving
Credit Agreement dated as of
November 30, 2005 among JLG
Industries, Inc., the several banks
and other financial institutions and
lenders from time to time party
hereto, SunTrust Bank, as Issuing
Bank, Swingline Lender and
Administrative Agent, Manufacturers
and Traders Trust Company, as
Syndication Agent, and LaSalle Bank
Midwest National Association, as
Documentation Agent, which appears
as Exhibit 10.1 to the Companys
Form 8-K (File No. 1-12123filed
December 6, 2005), is hereby
incorporated by reference.10.13
    
    Form of Employee Stock Option
Agreement under the Long Term
Incentive Plan, which appears as
Exhibit 10.18 to the Companys Form
10-K (File No. 1-12123filed October
6, 2004), is hereby incorporated by
reference.10.14
    
    Amended and Restated Form of
Employee Restricted Stock Agreement
under the Long Term Incentive Plan,
which appears as Exhibit 10.1 to the
Companys Form 8-K (File No.
1-12123filed July 28, 2005), is
hereby incorporated by reference.10.15
    
    Form of Director Stock Option
Agreement under the Long Term
Incentive Plan, which appears as
Exhibit 10.18 to the Companys Form
10-K (File No. 1-12123filed October
6, 2004), is hereby incorporated by
reference.10.16
    
    Form of Director Restricted Stock
Agreement under the Long Term
Incentive Plan, which appears as
Exhibit 10.18 to the Companys Form
10-K (File No. 1-12123filed October
6, 2004), is hereby incorporated by
reference.10.17
    
    JLG Industries, Inc. Restated Annual
Management Incentive Plan, which
appears as Exhibit 10.2 to the
Companys Form 10-Q (File No.
1-12123 3⁄4filed November 22,
2005), is hereby incorporated by
reference.10.18
    
    Form of Performance Share Agreement
under the Long Term Incentive Plan,
which appears as Exhibit 10.2 to the
Companys Form 8-K (File No.
1-12123filed July 28, 2005), is
hereby incorporated by reference.10.19
    
    Summary of JLG Industries, Inc.s
Non-Employee Directors Compensation
Program, which appears as Exhibit
10.1 to the Companys Form 8-K (File
No. 1-12123filed December 1, 2004),
is hereby incorporated by reference.10.20
    
    Summary of JLG Industries, Inc.s
2007 Base Salaries, which appears in
the Companys Form 8-K (File No.
1-12123filed July 25, 2006), is
hereby incorporated by reference.10.21
    
    Strategic Alliance Agreement, dated
as of October 27, 2005, by and
between JLG Industries, Inc. and
Caterpillar Inc, which appears as
Exhibit 10.1 to the Companys Form
8-K (File No. 1-12123filed November
2, 2005), is hereby incorporated by
reference.
 78




---



##### Table of Contents



ExhibitNumber
    
    Description10.22
    
    Asset Purchase Agreement, dated as of October 27,
2005, by and among JLG Industries, Inc., Caterpillar
S.A.R.L., Caterpillar (U.K.) Limited, Caterpillar
Inc., and certain other Caterpillar Inc. affiliates,
which appears as Exhibit 10.1 to the Companys Form
8-K (File No. 1-12123filed November 2, 2005), is
hereby incorporated by reference.10.23
    
    Summary of JLG Industries, Inc.s Restated Annual
Management Incentive Plan, which appears in the
Companys Form 8-K (File No. 1-12123filed September
5, 2006), is hereby incorporated by reference.12
    
    Statement Regarding Computation of Ratios21
    
    Subsidiaries of the Registrant23
    
    Consent of Independent Auditors31.1
    
    Section 302 Certification of Chief Executive Officer31.2
    
    Section 302 Certification of Chief Financial Officer32.1
    
    Section 906 Certification of Chief Executive Officer32.2
    
    Section 906 Certification of Chief Financial Officer
 79