James M. Field – Chief Financial Officer & Senior Vice President Marie Ziegler – Vice President & Treasurer Susan Karlix – Manager of Investor Relations Tony Huegel – Director of Investor Relations

Andrew Obin – Bank of America Merrill Lynch Andy Kaplowitz – Barclays Capital Joel Tiss – Buckingham Research Ashish Gupta – Credit Agricole Securities Analyst for Jamie Cook – Credit Suisse Jerry Revich – Goldman Sachs David Raso – ISI Group Ann Duignan – JPMorgan Eli Lustgarten – Longbow Securities Vance Edelson – Morgan Stanley Seth Weber – RBC Capital Markets Henry Kirn – UBS Rob Wertheimer – Vertical Research Partners Andy Casey – Wells Fargo Securities Lawrence DeMaria – William Blair

Good morning and welcome to Deere’s Second Quarter Earnings Conference Call. (Operator instructions) I would now like to turn the call over to Mr. Tony Huegel, Director of Investor Relations. Thank you. You may begin.

Good morning. Also on the call today are Jim Field, our Chief Financial Officer; Marie Ziegler, Vice President and Treasurer; and Susan Karlix, Manager, Investor Communications. Today we’ll take a closer look at Deere’s second quarter earnings, then spend some time talking about our markets and the outlook for the remainder of 2012. After that, we’ll respond to your questions. Please note that slides are available to complement the call this morning. They can be accessed on our Web site at www.johndeere.com. First, a reminder. This call is being broadcast live on the Internet and recorded for future transmission and use by Deere and Thompson Reuters. Any other use, recording, or transmission of any portion of this copyrighted broadcast without the expressed written consent of Deere is strictly prohibited. Participants in the call, including the Q&A, agree that their likeness and remarks in all media may be stored and used as part of the earnings call. This call includes forward-looking comments concerning the company’s projections, plans and objectives for the future that are subject to important risks and uncertainties. Additional information concerning factors that could cause actual results to differ materially is contained in the company’s most recent Form 8-K and periodic reports filed with the Securities and Exchange Commission. This call also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America, or GAAP. Additionally, information concerning these measures, including reconciliations to comparable GAAP measures, is included in the release and posted on our Web site at www.johndeere.com/financialreports under Other Financial Information. Now, here’s Susan.

: Quarterly net income surpassed $1 billion for the first time. Revenues also broke new ground topping the $10 billion mark. Another category that hit a new quarterly high was Economic Profit, or SBA, which was greater in the second quarter than in all but four full previous years. Ag and Turf led the way, but our other divisions, Construction and Forestry and Financial Services contributed to our performance as well. As cited in our earnings announcement, John Deere is continuing to benefit from a global farm economy that CEO Sam Allen said is showing impressive strength and endurance. This has led to a big increase in demand for our products and we have raised our full year earnings forecast to about $3.35 billion. It was, in summary, a record-breaking quarter and one that puts Deere squarely on course for another terrific year. Now let’s look at the second quarter in detail starting on Slide 4. Net sales and revenues were up 12% to $10 billion in the quarter. Net income attributable to Deere & Company was about $1.1 billion. On Slide 5, total worldwide equipment operations net sales were $9.4 billion, up 13% quarter over quarter. At comps and exchange, sales were up 15%. Price realization in the quarter was positive by 5 points. Turning to a review of our individual businesses, let’s start with Agriculture and Turf on Slide 6. Sales were up 11% in the quarter. Operating profit was $1.4 billion, resulting in a record-setting 18% operating margin. Results benefitted from higher shipment volumes and price realizations, partially offset by increased production costs related to new products and engine emission requirements, as well as higher raw material costs and research and development expenses. Before we review the industry sales outlook, let’s look at some of the fundamentals affecting the Ag business. Slide 7 outlines the US commodity price estimates that underlie our financial forecast. All are within the ranges published by the USDA on May 10th. As you can see, US crop prices are forecast to remain strong through 2012, driven by global demand and tight supply. Also shown are the current 2012-2013 crop prices. Keep in mind the underlying assumption is for more normal higher yield, however, it is impossible to determine the outcome of the 2012-’13 crop year in May, as there are many unknowns. For example, good weather in the Midwest allowed for early planting, but the summer and fall growing conditions will have a much greater impact on ultimate crop yields. Dry weather persists in the south central US and drought conditions are emerging in the southeast. Slide 8 highlights cash receipts. 2011 US farm cash receipts were at record levels, about 14% higher than the previous record in 2008. The 2012 cash receipts number is now forecast to set another record slightly above last year’s level. As a reminder, in our modeling, current and prior year cash receipts are the primary driver of equipment purchases in the US market. We do see increased demand as illustrated by our strong outlook. Our base case on acres planted and yields for the 2012-2013 crop year is shown on Slide 9. Driven by strong global demand and low carryover stocks, our base case calls for an increase in total planted acres this crop year. With global carryover stocks at low levels, corn prices through 2011-’12 crop year are forecast to remain at historically high levels. This has prompted a forecast increase of about 4% more corn acres being planted in the 2012-’13 crop year. Continued exports to China and the gradual growth in S&L [ph] demand also are factors. Soybean planted area is expected to be flat in 2012, while exports increase due to strong demands from China and the weather-impacted poor crops in South America. Higher wheat acreage is forecast with domestic usage and exports expected to expand. As a result of poor weather in west Texas and the southeast, we expect cotton acres planted to go down in the 2012-’13 crop year. Demand, however, remains strong, particularly from Asia. Keep in mind, forecasts involving acres planted, yield and price are very preliminary at this point and will be determined by many factors, including weather. Before moving on, we talked about commodity price estimates, cash receipts, planted acres and yield. It’s too early in the year to know final outcomes for any of these variables. Cash receipts are a function of price and quantity with projected yields and acres up despite lower corn prices. The projected revenue from corn and beans is virtually identical between last crop year and the coming crop year. With cash receipts at record levels, this bodes well for future farm prospects. Our economic outlook for the EU 27 is on Slide 10. We see strength in the European Ag sector continuing with 2012 farm income expected to remain at very attractive levels, supported by good commodity prices. Equipment demand continues strong with a favorable outlook in northern Europe where farm sizes are larger, offsetting weakness in the south. On Slide 11, you’ll see the economic fundamentals outlined for a few of our other targeted growth markets. Slide 12 illustrates the value of agricultural production in Brazil. This is a good proxy for the health of agribusiness. It encompasses over 20 different crops and has a high correlation to tractor sales over time. As you can see in the graph on the left, the 2012 value of Ag production in Brazil is expected to increase 2.7% over the 2011 levels. Our 2012 Ag and Turf industry outlooks are summarized on Slide 13. The outlook for industry sales in the US and Canada is now up more than 10%, which is an increase from our last forecast. Remember, going into the year, we were looking for sales to be up 5% to 10% and were saying up about 10% last quarter. Demand continues to be strong, especially for high horsepower equipment, a reflection of positive conditions in the global farm economy, and used equipment levels are low. In fact, we ended the second quarter with used tractor and combine levels well below a year ago. The EU 27 industry outlook remains flat to up 5% from the attractive levels of 2011. The improvement is due to favorable conditions in the grain, livestock and dairy sectors, which are outweighing general economic concerns. Our 2012 industry outlook in the CIS countries is unchanged from last quarter. It calls for considerably higher growth after last year’s notable rise. In Asia, we still expect sales to increase by a moderate amount. After several years of strong growth, the tractor market in India is forecast to be down slightly. We continue to see strength in China. Industry sales of tractors and combines in South America are now expected to be down 5% to 10% in relation to the strong levels of 2011 due to uncertainty in Argentina and drought in parts of the region. Remember, the South American outlook is for tractors and combines only. It excludes cotton, sugarcane harvesting equipment, sprayers and planters, all categories in which Deere has a strong presence. Turning to another product category, we expect industry retail sales of turf and utility equipment in the US and Canada to be up about 5% in 2012. This represents a slight improvement from last quarter. Due to the early arrival of spring, sales of riding lawn and commercial mowing equipment have gotten off to a strong start. We’re also seeing continued favorable acceptance of our new utility vehicles. On Slide 14, in March, Deere announced the third capacity expansion in four years at our flagship tractor factory in Waterloo, Iowa. As the global farm economy continues to show impressive strength and endurance, ongoing investments in Waterloo will help Deere meet future demand. As outlined on the slide, Waterloo has a truly global market footprint. Finally, 2013, when the latest expansion is complete, manufacturing capacity for large tractors in Waterloo will have increased by more than 50% since 2008. Putting this all together on Slide 15, we continue to forecast fiscal year 2012 year sales of worldwide Ag and Turf equipment to be up about 15%. This includes negative currency translations of about 3 points. Full year operating margin for the divisions is forecast at about 15%, a record. This illustrates solid execution on our part in light of widespread product transitions to Interim Tier 4 engines and our global growth initiatives. Let’s focus now on Construction and Forestry on Slide 16. Net sales were up 26% in the quarter. Operating profit was $119 million, helped by price realization and higher shipment volumes, partially offset by higher costs and unfavorable product mix. For the quarter, C&F had a 7% operating margin and a 4% incremental margin. There are three major factors to consider in analyzing the division’s results. First, there was a negative mix of product this quarter compared to the second quarter of 2011. Wheel loaders and crawlers, two of our higher-margin products, converted to Interim Tier 4 engines this quarter, impacting production levels. With those two lines down for a time, our sales were more heavily influenced by partner products, on which we don’t benefit from any manufacturing absorption. In addition, in May 2011, the SAP software conversion was implemented, essentially shutting down our two largest C&F factories for a time. That meant production was unusually high in last year’s second quarter as dealers placed orders early to ensure delivery of machines prior to the SAP changeover. Another factor underlying C&F margins for the quarter has to do with growth. The division has two new factories going up in Brazil and one in China. The facility in India is still in its infancy stage. There’s a lot of money being spent on growth right now with few sales to offset the costs. And third, results were affected by R&D expenses related to new products in support of global growth and Interim Tier 4 transitions. Other costs shown on the slide were also higher in the quarter compared to second quarter 2011. Bottom line, C&F faced some tough comparisons in the quarter due to the factors just noted, but all did correct themselves over the long run. In the quarter, C&F margins include about five negative points from mix, growth and increased R&D, impacting incremental margins by about 22 points. On Slide 17, let’s look at the economic indicators on the bottom part of the slide. While stable or improved from last quarter, the underlying fundamentals still don’t point to strong recovery. Overall, economic growth continues at a slow pace despite promising signs that things are picking up. C&F continues to benefit from improved sales to independent rental companies as they record higher utilization levels and rental rates. We also see strength in the Energy, Material Handling, Industrial and International sectors. Also encouraging, Deere dealers continue to see an improvement in their Rental and Used Equipment markets, that sales in Construction and Forestry are now forecast to be up about 20% in fiscal 2012 with negative currency translations of about 1 point. Global forestry markets are now expected to be flat in 2012 from the strong levels of a year ago. Weakness in Europe is being offset by improvement in other international markets. C&F full year operating margin is projected to be about 8%. Our Final Tier 4 engine emissions solution, introduced in March, is on Slide 18. We will continue with our systematic building block approach first introduced with cooled EGR to meet Tier 3/Stage IIIa engine emission requirements. For Interim Tier 4/Stage IIIb, we added a smart exhaust filter to our proven cooled EGR solutions, and to meet Final Tier 4/Stage IV compliance, we will add SCR to our cooled EGR and smart exhaust filter. With the combination of cooled EGR, smart exhaust filter and urea, we expect to deliver the best fluid economy in the industry in many applications, equal to or better than the John Deere Interim Tier 4. Not only is John Deere a leading off-highway engine manufacturer, we also have the best-in-class dealer network standing with us to support this new engine technology. Let’s move now to our Financial Services operations. Slide 19 shows the financial services provision for credit losses as a percent of the total average owned portfolio. Year to date on an annualized basis, the provision is a mere 5 basis points. This reflects lower write off, primarily in the Ag portfolio, as well as recoveries of prior-year write offs and fewer repossessions. Our 2012 financial forecast contemplates a loss provision of about 23 basis points of a percentage of the average owned portfolio. For your reference, the ten year average is about 34 basis points. Moving to Slide 20, worldwide Financial Services net income attributable to Deere & Company was $109 million in the quarter versus $105 million in 2011. That income benefitted from growth in the credit portfolio, partially offset by increased selling, administrative, and general expenses. Looking ahead, we are now projecting worldwide Financial Services net income attributable to Deere & Company of about $465 million in 2012. The slight decrease from fiscal 2011, when income was $471 million, is mainly attributable to two things – increased selling, administrative, and general expenses in support of the equipment operations in global growth, and narrower financing spreads. These items are being largely offset by growth in the portfolio. Now on Slide 21, let’s look at Receivables and Inventory. For the company as a whole, Receivables and Inventory ended the second quarter up about $2.3 billion compared with the second quarter of 2011. That’s equal to 36% of trailing twelve-month sales, which is similar to what we have seen in other recent years of high equipment sales. To help put this increase into perspective, our implied sales guidance for the second half of the year is up nearly 18%. That means over $2.5 billion in additional shipments. Over 60% of this $2.3 billion year-over-year increase is in inventory, inventory needed to meet shipment schedules in the second half of the year. In addition, remember that shipments and retail activity were much more front end-loaded last year due to Interim Tier 4 transitions, especially on combines, and C&F SAP conversions. In response to continuing strong demand conditions, we now expect to end 2012 with Receivables and Inventories about $600 million higher than 2011. Let’s turn now to Raw Material and Logistics on Slide 22. Second quarter material costs were up about $185 million over last year. A little over three-fourths of the $400 million increase being forecast for the year occurred in the first half. As we have shared in the past, changes in Deere’s raw material costs tend to lag the market by three to six months depending on the type of commodity or contract. About 80% of the increase is for Ag and Turf and about 20% for C&F. Finally, as we introduce new products and features to our growing customer base, the product costs of compliance with engine emission regulations in North America and Europe will be roughly $500 million higher than 2011. Note, however, that the combined increase in material and Interim Tier 4 product costs will be more than offset by what we are forecasting to be 4 points of price realization. Looking at R&D expense on Slide 23, R&D was up about 18% in the second quarter compared to the same period last year. Our 2012 forecast calls for R&D expense to be up about 13%. As stated in previous quarters, R&D spending is expected to remain at high levels for the next few years as we continue product launches with Interim Tier 4, and soon thereafter, Final Tier 4 engines. Also included is ongoing new product development expense for our growing global customer base. Moving now to Slide 24, SA&G expense for the equipment operations was up about 5% in the second quarter. Growth accounted for about 3 points of the increase. Our fiscal year 2012 forecast calls for SA&G expense to be up about 11% with growth accounting for about 4 points and currency translation a negative 2 points. On Slide 25 you see our equipment operations’ history of strong cash flow. We are forecasting cash flow from equipment operations to reach about $3.4 billion in 2012. Slide 26 illustrates the steady increases we have made in dividends paid to shareholders since 2003. In keeping with our use of cash priorities, we have consistently and moderately raised the dividend. In fact, the dividend has been raised 64% since introducing our revised John Deere strategy in 2010. For those not familiar with the strategy, it is included in the appendix. On Slide 27, we outline our 2012 outlook for the remainder of the year. The third quarter forecast calls for net sales to be up about 25% compared to the third quarter of 2011. Price realization is expected to be positive by about 4 points with currency translation being a negative 4 points. The net sales forecast for the full year is up about 15% compared to 2011, translated at constant exchange, up about 18 points. Price realization of 4 points will contribute to results. As stated in the press release, we have increased our full year 2012 net income forecast to about $3.35 billion as promising fundamentals are lending strong support to our plans for increased sales and profitability. In closing, 2012 is shaping up to be what Sam Allen called a year of outstanding performance. As we’ve stated in the past, promising fundamentals are lending strong support to the company’s wide-ranging plans for growth. We aim to capitalize on these trends through extensive investments in new products and additional capacity, a list that includes no fewer than a dozen major projects and seven new factories, as summarized on Slide 28. These investments are essential to the success of our plans for driving sales and profits. They also put Deere in a sound position to respond to society’s needs for food, shelter and infrastructure, needs that are growing by the day. In our view, trends of this nature have power and persistence, as well as a good deal of promise. We’re confident they should prove highly rewarding to our customers and investors in the years ahead. Tony?

Thank you, Susan. Now we’re ready to begin the Q&A portion of the call. The operator will instruct you on the calling procedure, but as a reminder, in consideration of others, please limit yourself to one question and one related follow-up. If you have additional questions, we ask that you rejoin the queue. Operator?

(Operator instructions) Our first question comes from Henry Kirn. Please state your company name. Henry Kirn – UBS: Hi. Good morning, guys. It’s UBS.

Hi, Henry.

Good morning, Henry. Henry Kirn – UBS: I’m wondering if you could talk about Europe, maybe the progress with your market share goals in Europe, the credit availability in the market and your thoughts on any risks to subsidies given recent elections in that key market.

I’ll start with the credit availability. Credit still remains available and readily available in the market. As we’ve talked about in the past, the market in general is more affected negatively in the south, but the northern part of Europe, which tends to be stronger markets for Deere, continues to be very strong, so as you see in our outlook, we continue to look for flat to up 5% in the market for the year.

There’s been no change in government posturing or commentary on CAP reform, so it continues to be strong in current year, next year, and then starting in 2014, it is basically frozen at the level of payments, which are supportive of farm income, and it stays there through 2020, so there’s been no change in that.

And then in terms of where we are, I would say, with our plans in Europe -- actually, I was just there a couple weeks ago with Sam and reviewing the progress on implementing the dealer of tomorrow, which is an integral component of our long-range plans for Europe and that’s progressing on track. Henry Kirn – UBS: That’s helpful, and on South America, could you talk about the content -- the competitive dynamics given the weaker forecast?

The weaker forecast, really, is more of a function of two things. Of course, there was some weather impact from the drought that affected both southern Brazil and Argentina, but more importantly, we’ve lowered our outlook for Argentina specifically, basically through dealing with some challenges there around some of the government policies.

Thanks, Henry.

Our next question comes from Eli Lustgarten. Please state your company name. Eli Lustgarten – Longbow Securities: Longbow Securities. Good morning, everyone.

Good morning, Eli. Eli Lustgarten – Longbow Securities: Can we talk a little bit about production in the Ag business? You had a hell of a second quarter. Volume was a little lighter than we expected, I think original consensus on those numbers, and profitability was sort of outstanding. Was some production shifted to the third quarter, that way we didn’t see any tonnage numbers this quarter? Because it looks like you’re going to have a bigger third quarter than second quarter in Ag. Can you give some color of what’s happening in the shipments? And profitability, I guess you’re implying in Ag it will be lower in the second half of the year than included in the second quarter.

In terms of the second quarter being a little lower than the outlook we had given in February, really, that’s driven by three areas. You mentioned South America. Argentina in particular, was much lower than what we had anticipated, and then also Asia, so India and China. Both were lower in the quarter than we had forecasted.

Eli, this is Jim. The way -- maybe another way to get at your question is if you look at the first half of the year versus the second half. The second half versus the first half, shipments are going to be up about 20%, but when you look at what’s going on, absorption will be down $150 million, which we said is part of the issue of why we’ve got the inventory built up at the second quarter. Some of that’s going to get released, obviously a significant portion, in the third and fourth quarter, so when you’re doing the analyses on first half versus second half, that absorption impact is a big portion of it. The second piece of it, when you do that analysis, first half versus second half, we’ve given the SA&G guidance and you can see that that’s up pretty significant in the second half if we’re going to hit our SA&G guidance. And that really is a reflection of how we feel about the market conditions. We’re investing in increased marketing expenses. Of course there’s an element of it that’s variable related to service publications and all that, but I would very much also read that, in connection with the increased inventory levels, that we’re going to end the year out with the notion that Sam said, that these trends are looking very enduring. Thank you. Eli Lustgarten – Longbow Securities: Okay, and can we follow it a bit, follow that with talk about the Construction & Forestry business? I guess volume was as strong as anyone expected. Margins were a little bit weaker. You started to explain some of it, but will we begin to see some improvement in the second half on margin? Your 8% implication says that we should have 8% margins in the second half versus it was roughly 8% in the first half. So are we seeing better profitability and a better mix in the second half, or what can we expect in the Construction & Forestry, and particularly if we look out towards the end of the year? Will volumes hold or is there any fear that the United Rentals are overspending in the first half and not in the second half?

Sure. As it relates to mix, maybe it would help to give a little bit more color on that. Some of the differences year over year in mix is remember last year, we converted to SAP, so there was a ramp up of production ahead of that, knowing that the facilities would be shut down for a period of time, and so on core construction equipment products, production was heavier than normal last year and the margins are attractive, certainly, on those products. And then we also, this year, those -- a couple of those key construction products were going through Interim Tier 4 conversion, so year over year, the production was lower on that product, and as a result, there was a higher level of partner product in the mix than what would be normally. But again, from an order intake perspective, things are very positive and we feel pretty strongly about the second half of the year for that division. A lot of it’s just mix and shifting of when that production is occurring year over year. Okay, can we move to the next question?

Our next question comes from Jerry Revich. Please state your company name. Jerry Revich – Goldman Sachs: Good morning. It’s Goldman Sachs.

Good morning, Jerry.

Good morning, Jerry. Jerry Revich – Goldman Sachs: On pricing, you had excellent realization in the quarter. Can you say more about the drivers of the acceleration that you saw, and with your US production rates rising in the back half of the year, step us through why your guidance assumes pricing slows in the back half?

Our guidance for the full year is 4 points. We probably had a little bit of a favorable mix, but I wouldn’t read anything into it, I think in terms of the timing of some of the product launches, so really, no story there. Jerry Revich – Goldman Sachs: Can you say more about the mix in the quarter, Marie?

I think we’ve talked a little bit about the fact that -- and maybe the most significant thing that we haven’t addressed, let me start over, is in terms of our combines. Combines, as you may recall, last year were very front end-loaded. If you go back over on average over time, we have about 35% of our combine sales are shipped in the first half of the year and it’s about 65% in the back half. Last year we were 50/50. This year it’s more like 25%/75%, so you’ve got a lot of these combines that are coming in the back half of the year for the Ag division. And that has to do, really, with the move to Interim Tier 4 and the way we managed our production to meet market needs and optimize our ability to serve our customers.

And then I would add, Jerry, because we only give pricing in whole percentage increments, 50 basis points one way or another way can vacillate us to 4 or 5, so I think when Marie said there’s not a real story there, there’s -- we continue to expect a strong price realization and a very good acceptance of our product and, of course, our guidance is for, and we’d be delighted if it ends up at, 5, but that’s where we’re at. Thank you.

Okay, thanks. Next caller?

Our next question comes from Steven Volkmann. Please state your company name. Mr. Volkmann, please check your mute button. We’re unable to hear you.

Why don’t we go ahead and go to the next caller and then we’ll try to get Steve back in.

Our next question comes from Ann Duignan. Please state your company name. Ann Duignan – JPMorgan: Hi. JP Morgan.

Good morning. Ann Duignan – JPMorgan: Good morning, guys. Can you talk a little bit about the changing practices in agriculture on the back of greater corn-on-corn acres and the increase in the total acres for crops, what that’s doing to demand for things like large horsepower tractors, et cetera, et cetera? And then in conjunction with that, does that tie in to your comments about ending the year with greater inventory? Can you talk about any forward outlook you have into -- I know, Marie, you won’t give guidance for 2013, but are you -- we heard from dealers last week that they were taking orders already for things like planters into 2013. Can you just talk about what might be driving some of that in terms of the changing practices in the Midwest?

Ann, this is Jim. Why don’t I start with the whole corn-on-corn question? Obviously, when you have corn-on-corn, and to the extent that that is a long-term shift in practices, it’s nothing but positive for Deere. It means more activity in the field because you’re either going to have to come through with some tillage instrument to deal with the debris or you’re going to have to put a chopper head on a combine, and therefore, the horsepower requirements for the combines, all other things being equal, would increase somewhat to deal with the increased load from the chopping head. So that practice of corn-on-corn, which seems to be a growing practice, is something that is positive and nearly in basically every respect to Deere because it means more activity in the field, it means higher hours on tractors, all those sorts of things. In terms of the increased acreage, I think -- and what’s going on in general, I think just speaks to our long-term belief that the fundamental dynamics of the agricultural equipment businesses are very good and very positive with lots of positive macroeconomic tailwinds. Ann Duignan – JPMorgan: And maybe to follow on that, then, the frustrating thing for us to understand the fundamentals is your commentary to investors that some of your end markets in the US are at 120% of normal. Can you talk about the conflict between both of those comments?

Well, the way -- first of all, it’s really important for folks to understand how we establish normal, and that’s a backward-looking calculation, basically an average of the prior seven years, so to the extent that you have a growing market, our measurements as a percent of normals are lagging. They lag and so they don’t reflect that in the normals. But I would say a couple other things, that you’re right. You predicted quite correctly that Marie’s not going to give you 2013 outlook, but look, we’re bringing on capacity, we’ve got higher SA&G expenses in the second half of the year, we’re building inventory and we’re going to end with higher levels of inventory. I think there’s a reasonable inference that could be drawn as to what we think the prospects are for 2013. I hope that was helpful. Thank you, Ann.

Thank you. Can we go to the next caller, please?

Our next question comes from Rob Wertheimer. Please state your company name. Rob Wertheimer – Vertical Research Partners: It’s Vertical Research Partners. Good morning, everybody.

Hi. Rob Wertheimer – Vertical Research Partners: I just wanted to ask, if you wouldn’t mind, of a state of the union on the Construction & Forestry business. I asked this last quarter a little bit and I’m well aware that in the US, we’re still as an industry well below normal, but your revenues are hitting record highs. I’m just curious if that’s strictly in the US, if that’s geographically expansive? Could you just give us a timeframe of how that business is trending geographically/what’s going on there?

Certainly, we’ve, from a market share perspective, we have, over recent years, had taken some very good market share. As you may have heard us talk about before today, we are a clear number two provider in the US and Canada markets on construction. And actually, our market share, while we don’t disclose that in this region, we are the clear -- we are actually closer to number one than what number three would be to us. The other thing we’ve done in that process is a much broader -- brought a much broader portfolio to the market. We’ve also talked a lot about price realization over the last decade, averaging over 3 points of positive price realization year over year for the company, and of course, C&F has contributed to that, as well. So as you look at all of those factors, while on a net sales basis, it looks like we’re at record sales levels, from a unit sales perspective, the industry in the US and Canada is still at relatively low levels.

Maybe just to add on, as we look at our international business, that’s still in the Construction & Forestry division, a relatively small piece of the business, but it is up. But we are seeing strength in several segments in the US or recovery, and that includes independent rental companies, as well as our dealers investing in some rental activity. We have strength in Material Handling and a lot of that is related to Ag activity, strength in Industrial and Energy, so there are some segments in the US that are recovering. Rob Wertheimer – Vertical Research Partners: Great. That was really helpful, thank you. Tony, in national, we talked a little about the implements and how you had really nice sales in attachments to in implements. Can you talk structurally about, as the curve has been so strong in tractors and combines, have expensive planters or other implements capped up or have they lagged and farmers -- Has it been one for one? Has it been better than one for one because people put more updated attachments on older machines? Or is it lagging and people bought the power and now they’re buying the rest of the complex? Thanks.

Hi, Rob. This is Jim. I would tell you in general what we’re seeing across the entire large Ag portfolio. Sprayers, tillage, seeding equipment is reasonably strong, as well, and I can’t tell you if it’s one for one, but all sectors are seeing some pretty significant strength and farmers are investing their healthy cash flows in equipment.

Right, and we talked about earlier in the year along that line with -- you mentioned seeding equipment and that’s typically our early order program for that product line. Normally, it’s a three-stage early order program. It actually sold out in the first stage. Last year, tillage equipment, I think for the first time ever, we actually sold out. We were at capacity on tillage equipment for the year, so these other implements actually have had a very strong year, as well.

Thank you.

Thank you. Let’s move to the next caller.

Our next question comes from Lawrence DeMaria. Please state your company name. Lawrence DeMaria – William Blair: Hi. Good morning. From William Blair. Can you guys just talk a little about Europe? Now that you have all the new products here that were launched last year into this year, and now working on the dealerships, obviously, are you seeing any market share changes yet? And if not, do you expect that to accelerate over the next year or so?

Larry, a lot of those new products just launched into the market. We have good order intake. We’re very excited about the opportunities and we believe that will translate into good sales activity as we move through time, but again, some of those products are just newly into production. Lawrence DeMaria – William Blair: Okay, thanks, and then as it relates to the expansion in Brazil and China for construction, obviously you stated you’re still expanding there, but is there any slowdown on the timing of the expansion given the current market dynamics in those two obviously important regions?

No, there’s no change on either of those. Could we move to the next caller? Thank you.

Your next question comes from Jamie Cook. Please state your company name. Analyst for Jamie Cook – Credit Suisse: This is Andrew Briscalia [ph] on behalf of Jamie Cook, Credit Suisse.

Good morning. Analyst for Jamie Cook – Credit Suisse: Looking just at your incrementals, how should we think of 2012 as a peak, looking at your incrementals or Ag, and just longer term, how should we think of emissions, mix, change of mix and capacity impacting your incrementals?

We have a long-term project within the company to continue to improve our operating margin. That’s -- we internally refer to that as E700. There is a tremendous amount of work being done there, so we are aspiring to higher margins than we currently deliver on average over time. That said, we are well on our way to recovering the product costs for Interim Tier 4. That said, there’s more spend ahead of us as we look to Final Tier 4, which those compliance dates begin 2014-’15, but there -- we will, over the course of this year, we will have recovered most, and by 2013, it’s fair to say we will have recovered nearly all of the product costs. Analyst for Jamie Cook – Credit Suisse: Okay, that’s helpful, and then just on your capital allocation, just a question on looking at your share repurchase, is there a chance of being a little more aggressive given where the stock’s pricing and what’s your bear case on the US Ag?

Certainly, as we’ve stated in the past, we don’t have any set target that we communicate or anything along that line with the share repurchase, but we do look at our share repurchase program as a value-enhancing use of cash, and so, certainly, as -- when the stock price is at -- below what we would deem fair value for the company, we would certainly respond accordingly. Okay, thank you. Let’s move to the next caller, please.

Our next question comes from Andy Casey. Please state your company name. Andy Casey – Wells Fargo Securities: Wells Fargo Securities. Good morning, everyone.

Good morning.

Good morning. Andy Casey – Wells Fargo Securities: Just a quick question. You may have indirectly answered this, but the full year and the Q3 revenue guidance seems to indicate a growth pace moderation to around 10% as you go into the back quarter of the year from the 25% in Q3. Can you provide a little bit more color on the assumptions behind that trend?

I think you’re still dealing with some of the aftermath of Interim Tier 4 product transitions and I would not read anything into it. Again, we’ve increased our outlook for ND inventories. Andy Casey – Wells Fargo Securities: Okay. I’ll take the rest of them offline. Thank you.

Thank you, Andy.

Next caller?

Our next question comes from Vance Edelson. Please state your company name. Vance Edelson – Morgan Stanley: Hi. It’s Morgan Stanley. Thanks. In terms of C&F having such a strong quarter, beyond the product mix shifts and your own market share gains, could you provide a little more on the conditions in the US by end market, so across commercial construction infrastructure, even the single family? What are the trends you’re seeing out there most recently and do you feel confident that conditions are going to keep improving?

Well, certainly, Marie mentioned the three or four areas where we’re seeing strength. Today if you look at where housing starts are, while they are improving, from a historic basis, they’re at very low levels, so as a result, you’re not seeing a lot of contribution from the housing market relative to these other areas. But again, we are seeing some signs of life, if you will, in those markets and are certainly hopeful that that will continue to improve as we move forward.

And I think the other thing, if you just look at an aggregate and you look at where the aggregate industry unit sales are relative to the history, that would suggest that there’s plenty of runway in the construction business in North America. We have had record levels of sales, but if you look at the overall industry, it’s far below what folks would consider to be normal. Vance Edelson – Morgan Stanley: Okay, that’s very helpful. And then just back on Ag and Turf, with the pricing getting stronger during the quarter, could you just walk us through pricing power by region? Are there any geographies where you feel you have a notable ability to raise prices, and conversely, any place where there’s more customer sensitivity or greater competition that might keep a lid on pricing?

As you may be aware, Vance, we do not provide any more granularity to the price realization, either by division or by geography, but it is safe to say that all geographies and all divisions are contributing to the price and that’s about all we can say. So, thank you. Let’s move on to the next caller, please.

Our next question comes from Andy Kaplowitz. Please state your company name. Andy Kaplowitz – Barclays Capital: Good morning, guys. Barclays.

Good morning. Andy Kaplowitz – Barclays Capital: Can you hear me okay?

Yes. Andy Kaplowitz – Barclays Capital: Maybe if I could kind of push you a little bit on C&F margins, Susan, you mentioned 5 points of negative mix effects. It seems like a lot of these negative mix effects should go away within the next two to three quarters as you transition from IT4 on some of these big, big pieces of equipment and that shouldn’t last much longer. I know that the expenses from the build-out internationally are going to continue, but maybe if you could comment on these 5 points going away over the next couple quarters.

First of all, I want to clarify, the 5 points was not mix alone. That included mix, R&D and growth, so it’s the combination of those three. Certainly, the mix impact, as we talked about, in the quarter should soften, at least, but certainly the R&D and growth expenses will not. Those will continue on through the year as we look to grow internationally. Andy Kaplowitz – Barclays Capital: Okay. Maybe I’ll just shift gears, then, Tony, and ask about the CIS region. You didn’t change your outlook for that region in Ag, but up a considerable amount is obviously a little nebulous, and you have expanded or you announced another Waterloo expansion. I think a lot of that would go internationally, so maybe you can comment on the strength of that region, especially Russia, and what the impact is on your business.

Certainly, while we don’t give a numeric outlook for that region, at this point, the sales are certainly very favorable and up strongly this year. Russia, in particular, is up strongly year over year. You are correct; we do sell a significant number of Waterloo tractors into that market as well as large combines from our East Moline, Illinois facility, not to mention some construction equipment, as well, and forestry.

Our next question comes from Seth Weber. Please state your company name. Seth Weber – RBC Capital Markets: Hi. Good morning. It’s RBC. Sorry if I missed this, but on the -- you had previously talked about $500 million of IT costs for the year and that being front end-loaded. Can you just give us some granularity on where we are on that relative to that number first half or second half?

Sure. So far what we talked about was IT4 costs year to date. The IT4 cost was not the front end-loaded portion. What you may be thinking of is the raw material cost, the $400 million. Seth Weber – RBC Capital Markets: Okay.

Was more front end-loaded, and we’re actually more than three-fourths of the way -- of that has already been spent through the second quarter of the year on the raw material. Interim Tier 4 actually accelerates as you go through the year. We talked about in the first quarter roughly $75 million. This quarter was roughly $135 million, and as we continue to convert product, obviously you have more products and that results in higher costs. Seth Weber – RBC Capital Markets: Okay, that’s helpful. Thanks, Tony. And then, I guess, a follow-up, the higher industry outlook for North America on the Ag side, would you characterize that as coming from high horsepower equipment or do you think the smaller equipment is pushing the increase there?

The increase would be large Ag. Seth Weber – RBC Capital Markets: Large Ag? Okay. Thank you very much.

Thank you. Next caller?

Our next question comes from David Raso. Please state your company name. David Raso – ISI Group: ISI. I’m trying to get a better read on your confidence in the 2013 demand based on your inventory. I can take you to the calc how I get to it, but essentially, I’m looking at your inventory calced about $1.1 billion higher than normal in the sense of where the inventory is relative to the next six months’ sales you’re expecting versus the historical norm. Of that $1.1 billion, just to maybe give us a little better feel, how much of that would you argue is confidence in ’13? I’m just trying to get a feel for how much was simply maybe a little overbilled versus that large of number, there’s that much confidence in the spring selling season for ’13 already. You can answer that any way you’d like, but $1.1 billion’s a sizable number the way I’m calculating it.

It’s very early, but we see many areas of the world where things continue to be very strong, including North America, and so in order to be sure that we can meet customer demand, we are putting some additional product plans in place and that’s reflected in the ending inventory. It’s premature for us, much as I think we all would like to know what 2013 is going to look like, it’s premature for us to provide definitive guidance at this point, but the trends, the fundamentals, appear very stable in many parts of the world. David Raso – ISI Group: Could you help us with a little more geographic color on where you’re most confident geographically? Obviously, we can extrapolate the margin benefit or detriment to that comment, but just where are you having the most confidence geographically to have that level of inventory at this stage of the year?

Well, clearly, large Ag in North America, as indicated by our industry outlooks, is where a significant source of the strength is. But going back to your question is the way we like to look at it is receivables and inventory together, and when I look at it on that basis, I see a number that’s slightly higher than the percentage -- a slightly higher percentage than our historical norm for very high sales activity levels, but nothing that we believe is concerning. The other issue is, if you look back at history, we’ve vastly built out our parts distribution network and put parts distribution facilities in Russia, we’ve expanded the parts distribution facility in Brazil, all of which is aimed at the John Deere Value Proposition, so some of that inventory is also there supporting that initiative. Thank you, David.

Our next question comes from Joel Tiss. Please state your company name. Joel Tiss – Buckingham Research: Hi. Buckingham Research. I wonder if you can -- Can you give us a little more help on, even if you just aggregated all together on what the costs of all your various expansions are, I guess the twelve new plants, and how those costs flow through 2012 and 2013? And to the extent you can, any sort of an idea what revenue capacity you’re building in? So, I know you’re not going to tell us that, but maybe like the increments to how much you’re adding 20% to Russia or whatever, just to help us understand how this all fits together and it might help us with the flow of numbers into ’13 and ’14.

Growth and SG&A we’re saying is up 4 points for the full year, and that’s maybe indicative of the kind of expenses that we’re seeing. There are incrementally a few costs in manufacturing because you’re putting in a little bit of personnel into those places, but that’s really where the bulk of the increment is at this stage of the game. And in terms of what our future revenue potential is, the only thing that we’ve really publicly stated is that -- is going back to the Waterloo opportunity, and there, we’ve got another 10% capacity well ahead of us, and that’s really the only area that we’ve put anything to numbers.

The only thing I would add to that, Joel, is that we’re not going to talk about what the incremental growth opportunity is in ’13 or ’14, but we would tell you that these are the expenditures that’s going to enable the revised John Deere strategy, which would ultimately get us to doubling the company by 2018, so thank you.

Next question, please?

Our next question comes from Ashish Gupta. Please state your company name. Ashish Gupta – Credit Agricole Securities: DRC [ph]. Hi. Good morning. It’s great to hear your confidence in 2013. In reference to the slide on Waterloo, can you just walk us through the impact to your margins for making increasing equipment in North America and selling it internationally specifically? I’m just trying to -- wonder if there’s a transfer pricing that makes international margins appear lower under GAAP?

Yes, if you look under GAAP, when we report the outside US/Canada margins, that is heavily -- that’s influenced by transfer pricing, so to your point, with the Waterloo tractors as an example, when we sell those tractors in Europe, for example, the outside US and Canada portion is only going to receive, really, the marketing margin, so the more significant manufacturing margin gets reported in the US region, so when you look at those numbers, it does distort, in many cases, where the -- it distorts the margin in outside US and Canada. When we look at it internally from a profit by a product basis and don’t -- and basically strip out the transfer pricing, in many cases, the margins on tractors, for example, regardless of where they’re sold in the world, the margins are very comparable. Of course, you have additional shipping and logistics costs, but outside of that, the margins are very comparable. Ashish Gupta – Credit Agricole Securities: That’s really helpful. If I could sneak in just one more, with all these capacity expansions, I’m just wondering, do you believe you’re under producing global demand in Ag, large Ag?

I’ll take that. I would say at Waterloo and at Harvester, we’re working very hard to squeak out any incremental production that we can.

And also, I think that would be true in cotton. We’ve struggled to keep up with the demand in spring, as well. Thank you very much.

We’ve got time for one more question.

Our last question comes from Andrew Obin. Please state your company name. Andrew Obin – Bank of America Merrill Lynch: It’s Bank of American Merrill Lynch. Can you hear me?

Yes, we can. Andrew Obin – Bank of America Merrill Lynch: Just to follow up on Joel’s question, in terms of your growth costs in C&F, could you quantify them, just specifically that piece, and when do these run off? So this is the Brazilian factory, Chinese expansion, that’s what I mean.

Those factories will start production next year, so you would have a -- you’ll be in some period of ramp up, certainly, probably into 2014 as new product ships in, so you’re a ways away from that. But again, you don’t have any actual manufacturing taking place right now, so the growth costs are really represented in that SG&A. Andrew Obin – Bank of America Merrill Lynch: But out of these 5% percentage points that you guys talked about, is growth half? Just give us sense how much of it will linger?

Maybe as we look through the full year, it would be a better way. We know that mix neutralizes, but we’re going to continue to see some growth expenses. We’ve got a little heavier weighting on IT4 product costs, a little bit of raw material coming in in the second half for them, so it continues. We’re not going to provide any more granularity at this point. Do you have another question, Andrew? I think maybe we lost Andrew. With that, thank you very much. We’ll be around this afternoon to answer your questions. Good day.

And that concludes today’s conference. Thank you for your participation. You may disconnect at this time.