Joy Global's management knows that markets are slowing, and indeed, it is preparing for negative growth in revenue and earnings in 2013. The company is rapidly cutting costs and seeking operating efficiencies to absorb some of the weakness. The company is set to maintain its robust margins even in times of strain, and a key component is the company's aftermarket parts and services business, which accounts for about 60% of revenue. The servicing of deployed equipment provides Joy with a steady revenue stream, robust margins and significant visibility. In recent years, Joy has been acquisitive as it seeks to bulk up to compete with global giants including Caterpillar ( CAT). The company's acquisition of International Mining Machinery Holdings is a key to opening additional opportunities, since that is one of China's domestic producers of mining machinery. After recent acquisitions, Joy's debt-to-capital ratio popped to about 40%. Management said it expect the business to generate $4 billion of free cash flow between 2012 and 2017, which can be used to pay down debt, repurchase shares or make additional acquisitions. The stock currently sports a 1.3% dividend yield. Just this past weekend, China's purchasing managers' index came in line with expectations at 50.6. More importantly, this was the second consecutive month above the 50 level, which indicates expansion. The number is at a seven-month high, with the best output since July, solid growth in new export orders and a pickup in purchasing activity. The official PMI of non-manufacturing sectors also improved to 55.6 in November, led by expansion in construction and partially offset by slower air, rail, food and beverages. These data, along with stronger retail sales, exports and services, all point to a soft landing in China and the possibility for 8% GDP growth in the fourth quarter. Our bottom line: Joy is a high-quality, well-positioned and well-managed company that is being extremely attentive to managing its costs in times of tightness. This should set up the company for lots of operating leverage when the global economy picks up.