Good morning. My name is Cynthia, and I will be your conference operator today. At this time I would like to welcome everyone to the AGCO Corporation 2008 First Quarter Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today Tuesday April 29, 2008. I would now like to introduce Greg Peterson, Director of Investor Relations. Mr. Peterson. Please go ahead sir.

Thank you Cynthia and good morning and thank you for joining us for AGCO's first quarter 2008 earnings conference call. During this call, we will refer to a slide presentation. The slides, earnings press release and our financial statements are posted on our website at agcocorp.com. The non-GAAP measures used in the slide presentation are reconciled to GAAP measures in the appendix to the slides. On the call with me this morning are, Mr. Martin Richenhagen, our Chairman, President and Chief Executive Officer and Andy Beck, our Senior Vice President and Chief Financial Officer. Before we get started this morning, let me remind you that during the course of this conference call, we will make forward-looking statements, including some related to future sales, earnings, production levels, supplier and production constraints, farm income, working capital improvement, cash flow, margins effective tax rate, capital expenditure and strategic initiatives. We wish to caution you that these statements are predictions and that actual events or results may differ materially. We refer you to the periodic reports that we file from time to time with the Securities and Exchange Commission including the company's Form 10-K for the year ended December 31, 2007. These documents discuss important factors that could cause actual results to differ materially from those contained in our forward-looking statements. A replay of this call will be available on our corporate website. I will now turn the call over to Martin.

Thank you Greg and good morning. I'll begin my remarks on slide 3 where you can see that we had a very good start to the year. We posted record quarterly sales and earnings. Our sales increased approximately 34% compared to the first quarter of 2007 and our adjusted earnings per share in the first quarter were up 142% compared to the first quarter last year. We used our well positioned brands to leverage very healthy market conditions and produce strong results in the quarter. Our EAME [Europe/Africa/Middle East] segment continues to grow strongly and improve its profitability. In Europe, our Fendt brand performed well, showing the best sales and margin improvement. Recall that during the first quarter of 2007, our Fendt sales were artificially low as we were initiating production on our new high horsepower series tractors and experienced supply constraints. Both of these events negatively impacted our sales during the first quarter of 2007. The South American market continues to respond to strong commodity prices. In Brazil, acreage devoted to corn, soybeans and sugarcane has expanded and crop production is expected to be up from 2007 levels. Market conditions in Argentina also were very good in the first quarter. However, government restrictions on grain export resulted in a disruption in the market late in the quarter that may impact industry demand there in the coming months. In North America, record 2007 farm income is driving strong sales in high horsepower tractor and combines. The slowing in the general economy softened demand for compact and utility tractors that are more often used in non-farming applications. On slide 4, you can see our production schedule for 2007 and 2008. Tractor and combine production levels were up 25% in the first quarter of 2008 compared to the first quarter of 2007.…

Thank you Martin. Referring to slide 6 which highlights AGCO's regional net sales, the chart on the right shows our regional sales performance excluding the impact of currency translation. For the first quarter of 2008, currency translation had a positive impact of approximately 13%. Excluding the impact of currency translation, the Europe, Africa, Middle East segment had sales growth of approximately 20% during the first quarter of 2008. The growth in our European region was led by sales increases in Germany, France and Eastern Europe. North American sales increased approximately 10% in the first quarter of 2008 compared to the first quarter 2007, excluding currency translation impacts. As Martin mentioned, sales increases in our high horsepower tractors and combines were responsible for much of the growth. In South America, first quarter 2008 sales improved approximately 44% from the prior year excluding currency translation impacts. Robust farm economics and expanding plantings in Brazil have led to strong demand for tractors and combines. We also saw improved sales in Argentina. Our first quarter 2008 sales in our Asia-Pacific segment increased approximately 28% excluding the impact of currency. Significantly improved harvests in Australia and New Zealand are producing better sales. Part sales for the first quarter of 2008 were $225 million, up 15.4% compared to the same period in 2007 after removing the impact of currency translation. Slide 7 highlights our sales and margin performance. Operating margins for the first quarter of 2008 were up from 2007 levels due to sales growth, improved product mix in Europe and cost control initiatives, partially offset by currency impacts in North America. Our Europe, Africa, Middle East margins, which reached 9.3% in the first quarter of 2008 were up approximately 330 basis points compared to 2007 due to improved volumes and product mix. In the first…

[Operator Instructions]. Your first question comes from the line of Stephen Volkmann with JPMorgan.

Hi, good morning

Good morning

I was hoping you might comment a little bit on your capacity utilization, and I am really focused in the higher horsepower equipment here. Maybe if you could by region and give us a sense of what you are doing with respect to increasing capacity in those regions as well.

Actually, all our high horsepower tractors on wheels, so the conventional tractors are made in factories in Europe and in South America. We have some projects we work on in our factory in Finland in order to prepare this factory for the growth that we might see in 2009. We have I think no major problem within our big factory in France and we already decided on some investments in the area of $13 million.

$13 million to $15 million.

$13 million to $15 million in our German Fendt factory to cope with this growing demand. Here in the U.S., we actually have a factory in Jackson, Minnesota for the big high horsepower four-wheel drive articulated tractor and the track tractor with no restrictions in capacity. So overall, we are fine and we are actually trying to make reasonable investments in order not to change our breakeven point too much. And also, we have in mind of always not only capacity, but also the return on invested capital. The important achievements we so far could generate is that we are in very close contact to key suppliers. And my overall summary is that we do pretty well. We certainly have the one or the other little problem here and there. But I think we do very well and may be better than the industry.

Okay, great. And then just quick follow-up Martin on central and east Europe could sort of size that opportunity for us maybe with respect to what you do in Europe and... so we can get a sense of how big that's become for you and what the growth rates look like there and any ...maybe any market share shift that you've sensed might be happening there.

Well we are using, let's say I am always using kind of simple numbers as the market in Russia and the countries of the former Russian union or Russian Federation in combines and tractors only about 100,000 units. The population of product in the marketplace has been cut in half since 1995. So it's a major reduction that is a burden to the Russian farmer. And the population is kind of also between 10 and 15 years of age. So that means in theory, this market should show substantial growth. We see it and it depends pretty much on how farmers in a position to finance retails. And we see an improvement after the change of Russian laws that made now ...that changed in a way that farmland can be owned farmers. And so farmers are in position to securitize their ...the business and the bank system seems to be also in acceptable good shape. So therefore, we think that this market will be more and more important in the future. When it comes to our existing organizational setup we are working... we took over the 100% of our importer and distribution network. So I think this is a pretty good situation. And we are now having the best distribution network you could think of in this market. And when it comes to investment in the future, I think our strategy will be rather to think about localizing certain components before we do assembly, because the problem in Russia is there is no local supply. And the tax subsidies you only get when you have localized your product. So what we will do and we have a very good experience on how to do that coming from our investment in Brazil. We will most probably start with things like engines and so on before we go there with a assembly operation. The situation in 2008 first quarter, I would like to hand over to Andy

Okay.

Because he has some numbers for you.

Our sales in that region were about 10% of our European sales for the first quarter. And our sales growth in that region was about 60% for the first quarter.

60?

Yes.

Great, thanks very much.

Your next question comes from the line of Ann Duignan with Bear Stearns.

Good morning guys.

Good morning.

Good morning and how are you doing.

So far so good. My question, first question your production was up 25% in Q1 but your outlook is for production to be up to 10%... 12% to14%. It looks if I look at the bar chart like in Q2 you are forecasting at least 25% year-over-year increase in production. Why does slowdown in the back half of the year, particularly given the stimulus package which we would expect to actually stimulate demand in the back half?

Ann I think you can try to look at that chart and see that last year the production was shaped with may be a little unusual and that we did ramp up production throughout the year as the demand started growing. So, I think the comparables by quarter are... become tougher throughout the year. So we are expecting our production to remain up, but it will be at a lower percentage as we go throughout the year.

Okay. And such... because of the ramp up last year so it's a...

Right. I think you know what you've got our sales outlook and that obviously includes some impact for stimulus package and things like that. So we do think all the markets are going to remain very strong. But it's we are attempting to level the production out well more this year than last year.

The two quick follow ups. What was the impact of currency on your operating profits or on your earnings?

Well on... we always talk about two offsetting impacts, the positive impact being the currency translation which grosses up our sales and our earnings particularly in Europe and somewhat in South America offset by the impact of the importing tractors, particularly from Europe and Brazil and North America. And if you net those two out, currency was probably positive by a couple of cents a share this quarter.

And my kind of follow up is just you have taken up your sales growth. You have taken up your earnings growth. You kept your CapEx outlook the same. But you didn't change the [ph] cash flow. I am curious as to why that is. Is there...do you include dividends in there and you may be anticipating introducing a dividend for the first time or is it just working capital. May be you could explain that me?

Sure. No, it does not include any plans for a dividend or anything like that. If the...the fact that there is no change I think reflects the fact that our inventory levels are a little higher than we would want it at this point in the year some of the delays that Martin talked about with some our suppliers are impacting inventory levels even though we are able to get product out if affects the timing and our ability manage inventories as well as we'd like. So, we're probably being a little cautious there and expect to manage those inventories down throughout the year. But at this point, we didn't want to raise that guidance because of that fact.

Okay you have any comments on the dividend when is next time that you might consider it?

Ann, we so far decided not to do it and the reason is that we certain opportunities to invest in our business, generating pretty good return. So we actually therefore do not plan to pay a dividend this year at least this is my position right now. Of course we review that every quarter and as soon as we think that this is feasible we certainly will keep you posted.

Okay, I'll get back in line. Thanks guys.

Thanks.

Your next question comes from Terry Darling with Goldman Sachs.

I just had a couple of questions on the guidance as well. Andy the revenue guidance what was in for currency before and what's in for currency now?

Yes, currency was about 4% of the increase before and now it is about 9%. So 5% increase resulting... 5% of the increase relates to currency.

And same question for price and raw material inflation please?

Yes on pricing, we had said it's about 1.5% to 2%. I think our pricing in the first quarter was about 2% and now for the full year we're looking at probably 50 to 75 basis points better. So we're up at about 2.5% now of what our expected pricing is. That is we're putting that in as a result of the material price increases that are coming on, that we see right now as it primarily relates to steel and steel related components that we have. And we continue to see a rising inflation in those components. So there could be a reason that we have to increase prices even more from that 2.5%.

Did you have a raw material inflation number in total for us?

No, I don't have that. I don't have a number ...but again you can say is from what our earlier expectation is that 50 to 75 basis points in increase in pricing is all to cover the additional inflation in the material costs.

I guess were I am going with it is if you look at your margin and guidance for second half of the year implied by the first quarter result and your comment that you'd expect the second quarter be flattish. Looks like you are assuming that your margins will be down year-over-year in the second half and yet the production is up and you are pushing price here. What I am missing in that calculation?

Its part of... the one think you got to keep in mind and was in our prepared comments was the, there is an impact of mix change. A year ago are sales in Fendt in the first quarter were unusually low and even had a very unusual mix in terms of all low and medium horsepower tractors and this year we are back to normal. And so our production in Fendt was significantly higher in the first quarter and that levels off and effectively reverses itself in the third quarter where last year was a bit unusual in terms of the numbers of high horsepower tractors sold and amount of units sold in that third quarter. So, we're seeing some benefit of the mix here in the first quarter, primarily a little in the second quarter and then it offsets more in the third. So the third quarter is...will show the impact of that. Fourth quarter, we expect again our margins to be back up.

If we pull Fendt out of the equation, are you still expecting the rest of the business to be down and if so, why would that be?

No, I don't think we are expecting, the margins are impacting more and more by currency, again going back to the comments we made about what's happening with our overall currency picture. We're getting this big increase in sales as a result of currency, but the offset is the fact that the dollar continues to weaken and we have to continue to change our forecast relating to margin. So we do expect our margins to be lower than what we probably would have said a quarter ago. But it's primarily...its really relating to currency. The other impact again is the material cost increases that we are seeing. But again we are focused and targeting at our pricing loss of that.

So the net raw material is sort of a push for the year?

That's the challenge and it is a big challenge. But that is what we are targeting to do.

And we somewhat take here a conservative approach.

Thank you. Last question can you tell us what the average horsepower of the tractor sold in the Central and Eastern Europe market for you is in ballpark terms?

Actually we don't have that number here. But is the buff what we typically sell in other markets, because we've mainly sell high horsepower tractors. So, we could actually, we could provide that number but not now.

Okay, thank you.

You're welcome. Operator: Your next question comes from Andrew Obin of Merrill Lynch.

Hi, guys. Good morning. Just more of a longer term question on South America. As I look at your incrementals back in '99 to '03 and compare them to what we're seeing now. It seems that sort of bank for the buck as we raised production is not as good as it used to be. And I was just wondering thinking couple of years out, does it come back or do we stay at current levels because of more competition?

I think one of the reasons you're seeing that Andrew is some... is two factors. One is again to see [ph] at least for us when we're selling the products outside of the Brazilian market we are impacted by the strong Brazilian real in relation to those currencies and to the dollar for some of those markets we sell the products to.

So Argentine sales. So sales in Argentina hurt you because of FX?

Well they are not as... they are incrementally not as favorable as they would have been years ago.

Andrew, I just want to make sure that you understand also our position. We are in Brazil...we were in Brazil as the first player in the industry. And we do have two brands with a complete product offering and we have exclusive distribution. So therefore, competition does hurt as less than in other markets. And some competitors have a much different image in this market with regard to brand and product and so on. Some of course are very aggressive because they decided to buy market share. I am not sure whether that's a good strategy but you can see that also reflected in their results.

Just to segue into market share, what do you expect by the end of the year, again on that now that we've seen a little bit more of your competition what they are doing in terms of pricing and discounting. I mean what are you seeing in terms of your market share change in South America by the end of the year and by the end of next year?

We will gain market share.

You believe you can gain market share in South America?

Because of better product, better service, better distribution and we see that also with other brands we own that we differentiate ourselves by our product and not by price.

And then just a final question. How did Challenger do in the quarter?

Challenger sales were up significantly in the quarter. Our Challenger sales were up about 50% in the quarter.

And what about profitability?

Profitability was improved by few a million dollars, about $4 million or $5 million for the quarter.

$4 million to $5 million positive?

Yes.

Thank you very much. Congratulations on a good quarter.

Thank you, Andrew.

Your next question comes from Andy Casey with Wachovia Securities.

Thanks, good morning everybody.

Good morning, Andy.

On the North American margin pressure, that's primarily the currency impact that you talked about. Can you update us on the initiatives to reduce the currency impact going forward?

Well actually, as you might remember we replaced the management team. We have a new in charge. We have a new team in charge and we have a very important portfolio specific initiative that will show results soon and that showed or generated already results. I do not want to go too much into detail here because we think we have some very good ideas we don't want to share with everybody. The improvements so far Andy when you take... after taking exchange rate out compared to the previous years, can you give us a number.

I think what we're... have been able to do is offset currency to a major extent. I think we would have been this is off top of my head probably $20 million to $30 million improvement last year and this year, looking about the same amount of improvement. However, the currency continues to be offsetting those internal improvements that we're making. So, we're still looking at relatively flat results in the North American market. But again, all because of currency impacts that we're offsetting with cost reduction programs, the growth that we're seeing in the market. So there's a lot of things that we are doing. And reference to your specific question, some of the structural things that we are changing, we are starting to get more and more tractors from our Indian supplier which moves products from Brazil to India. That's a move that we're making in the short term and long term we have another project to look at other moves products as well.

Okay, thanks for that. And then just want to... if you can an update on past strategy to increase the penetration of Sisu engines in your products. How is that going, you alluded to potential engine plant in the future some where east of where engine plant is today?

Thatis pretty much on plan. So that means we install or we instead install a capacity of around 50,000 engines. Last year we were at about 40, 25.

Last year about 40. We were about low 40s last year and growing again this year. So we're

Compared to 25 maybe

25

In 2006 I would say.

Okay, thank you very much.

Your next question comes from Jamie Cook with Credit Suisse.

Hi, good morning. I guess more and just to get back to the guidance question. If you look at what you're implying for the second quarter, it looks like earnings in the back half of the year will sort of be flat to down modestly. And I appreciate the comments that you talked about it relative to mix in the third quarter. But I'm just trying to get better feel on other, any other issues looming out there that you...are you concerned about or should we view your estimates for 2008 as your traditional sort of AGCO conservative estimates?

Yes. That would be my proposal.

Okay. And then do you care to comment on your longer term strategy of increasing your margins I think. You know your margins and I guess the new revenue forecast given where we are... given where we sit today in 2008?

We are reviewing that and we have that you know how my approach is. I prefer instead of giving you big numbers, I prefer to do my homework first and what we do is we are just sitting together here we last week met with the management team in order to define a more aggressive strategy for the coming years. We have a pretty good internal target now. And the next step is the need to define those actions that support the treatment of strategy. So when we come to Wall Street next we will go in to detail and let you know how we see things and what we want shoot for.

And I am sorry last can you just give us an update on the sprayer business in terms how sales are tracking in and what we are seeing on a profitability basis?

Yes, here we have some good news for you. Andy.

Yes, the sprayer business our sales were up a little bit over 10% in the first quarter and earnings were up about the same. So we had a pretty strong first quarter. And for full year we're seeing a good sales improvement but even more dramatic earnings improvement. We've had some issues there, but what appear to be turning the corner with our new distribution strategy in some of the new products that we're introducing.

Care to give us the margin target for '08.

Margin target for '08

For sprayer

Sprayers, it's going to be in 4% to 5% range.

All right. Thanks, congratulation.

Thank you.

Your next question comes from Mark Koznarek with Cleveland Research.

Hi, good morning.

Good morning Mark.

Just wondering if you folks could clarify a bit more.

Now we lost you. Mark.

Well, do I still have you.

Now you do.

Okay, thanks. I'll start again. The second quarter margin comment being flat you've already pointed out that the production will be up 25% in the Fendt mix will be positive. So what offsets there besides [indiscernible]

Yes, the offset is primarily currency, as well as higher... some of these initiatives in terms of engineering, higher engineering expense. Some of the system projects expense that we talked about heavier here in the second quarter which makes as an offset to some of the other benefits that you discussed.

On those investment initiatives that was $13 million in the first quarter. Is that similar amount or even larger in the second quarter?

It should be here. In the second quarter it's going to be little larger I believe.

Okay. So, like 15 to 20.

Yes, exactly. Yes.

Okay. So actually you're kind of front end loading those expenses so...

That's correct.

Okay. Then you also mentioned a situation developing in Argentina with the export related issues and could you talk about exactly what's going on down there and what... how that changes the outlook for AG equipment demand?

Well, actually this is in an interesting situation. We saw that already last year not only that Argentina does not pay subsidies to farmers, they also add quite a... big tax or customs on all products exported to different countries. So that means farmer to get a little penalty and this is a kind of income stream for the government coming from farming. And the higher those taxes or those customs are the less competitive of course the farmers in Argentina might become. Now... how I see it yes those customs went up again. But on the other hand you see this big demand and therefore I am not 100% sure that that really will slow down our business in Argentina but its at least a question you have to go a little bit more into detail. And we still get lets say we somewhat... we are a little bit more conservative on the business in Argentina right.

Yes, I think what we have seen is some disruption relating to some of the actions going on down there and are a little cautious. But so far the market has held up and continues to be strong and... but it is again something to watch for the balance of the year.

What kind of rapping that together into your forecast. What... you have recent raised your overall forecast to 20% to 22% growth. Has the Latin American revenue forecast excluding currency actually increased, as well as part of this forecast revision or have you otherwise modified it in a different direction?

No,

No, part of the increase was an expectation that the market would be stronger in South America compared to what we had said a quarter ago.

Okay. So, despite this Argentina there is enough growth in Brazil and elsewhere to offset that.

That's right.

Correct.

Okay, good. Thank you.

Your next question comes from Charlie Rentschler with Wall Street Access.

Good morning. I wondered if you could tell us where you might be with sugarcane harvester for Brazil?

Charlie, good morning. First of all you saw the improvement in the sprayer business. So you always looking for that.

Yes.

With regard to the sugarcane harvester we decided not to do an investment. Not to buy a company. The only company that is available as a fairly tiny little business and the product actually doesn't look that well. As you might know or I would like to remember that everybody that we a very strong position in the sugarcane industry where the Valtra tractor and the reason is the doability and real ability and quality of that product. Now what we decided is to buy the intellectual property of a design that has been developed between a very well known engineer and inventor in Brazil and some of the sugar mills. We own it now 100% and this guy is now working for us. And so, we somewhat could leap frog with regards to redevelopment of that product. And I am sure that while we will have a prototype. We have already won which is more mockup and we will have a prototype consisting more of parts coming from our platforms very soon.

Very good. Are you any closer to thinking about building wheeled tractors, non-articulated wheel tractors in North America to overcome the FX headwinds?

Yes we think about intelligent little steps to go into that direction. And we plan to have some or let's say exactly three light assembly operations in U.S. as a first step.

Okay. So you are moving along that direction?

Exactly.

And then finally shifting from products. The ERP system that is going in, are you seeing... are you starting to see some benefits and do you see the end of the...

Right now we see problems cost and complexity and a lot of work. The good news is we are on budget financially and on plan more or less time wise. The benefits we will not see this year and most probably not next year, but this is a project which will generate some important cost reductions due to a reduction in complexity.

Thank you.

Your next question comes from Barry Bannister with Stifel Nicolaus.

Hi, question about the comment earlier you'd mentioned the Argentine issues but what about Brazil, whether policy changes you eluded to, that would affect the balance of the year?

The only discussion about it you can see in Brazil right now is whether the government would put a program in that allows re financing of existing deals. So, but we don't thing that will have an impact on the demand and the market as such. We need to carefully follow up on that because you want to make sure that you don't run into a problem of payments.

Yes, I read about that $80 billion or $90 billion but you haven't assessed whether it has any effect on your finance JV here?

We so far believe that we have the right reserve in place that we are attracting that carefully also doing during the year in order to make sure that we are in good shape.

You mentioned Fendt London Scandinavia where we... can I assume those are Veltra's strong holds and had they been more normal, can you give rough basis point effect on the margin in EMEA.

Well, actually I am not sure whether we can do that but, as weakness in the first quarter. So... and the reason for that is actually more or less weather. The... we have a late spring and summer before that might change. Do we have a number on.

No, I don't think it would be that significant The Vulture brand still performed relatively well. Again, one of the improvement in being for the first quarter was the Fendt brand but, we're on track with the rest of the brands as well.

Okay and you mentioned lastly Challenger was up $4 million to $5 million but was that a positive level and if so, meaningfully positive.

It's up in positive but relatively low, obviously most of those sales are in North America and the products that they're selling are mainly European sourced products. So we're constrained by the currency again.

On the other hand since you always asking good question this is actually the right direction. So you'll remember that we were not always positive in the past.

Do you characterize that business is seeking critical mass so that it can earn a better margin or as it competitively under pressure because there are other entries in those products.

No I think the first one is the right approach, needs volume.

Volume? Thanks.

You're welcome.

Your next question comes from Robert Wertheimer with Morgan Stanley.

Hi, Good morning everybody, first on the increase pricing you mention earlier I think in response to Terry's question, have you put that through already. Do you put that through on orders that are already in the books and can you do another one just sort of given your orders in the balance of the year, or is it going to be late in the game.

First of all, I think when you... I think everybody in the industry normally should have the same problem, it looks like that some forget about putting the right pricing in place. Second, I believe that we can do more and for the remaining months of the year and third you of course can do also some...you can generate some improvements for the...for your order book via the discounts you give.

That's fair.

But don't get, maybe.

Second question...thank you. The second question in Europe just I wanted to understand the gap between tractors flat for AGCO in Europe and then EMEA sales up 20% you may have explained a part of it with the Central and Eastern Europe I am not sure how that ties in up 60 but that's only 10% of the mix. So was the rest just shift to big tractors or was it African, Middle East or what was the gap?

Well I think the issue there is that again it's some about, wholesale versus retail and what got to deliver to customers and registered as retail. But I believe you will see that those retail numbers will increase. We...so I don't think we really haven't an overall issue there and a lot of that growth as you say is mix related in terms of the rotation to higher horsepower business as well.

How much for that mix about it. Do you have a estimate.

I don't have an estimate for you. I am sorry.

And last one, sorry for the detail here but for Andy. In South America, gap between total revenue growth, the currency neutral was I think 26% the Real only appreciated about 10% in respect of the dollar. Argentina Peso was flat. So I am just trying to understand if there is something else in that revenue gap; if I misunderstand the currency flow somehow.

So with 26% I think it depends on how you calculate that. To be honest with you. But we are looking the way we calculate that is we say what is if our current sale, we are using last year's exchange rate and what's that difference. So I believe our number is correct.

And you do it on a quarterly av?

Do it on an average, yes.

Okay.

Your next question comes from Ann Duignan with Bear Stearns.

Hi guys I just have a quick follow up. A question on ERP implementation. Have you actually gone live anywhere yet with SAP.

No we have not.

And when do you anticipate that implementation?

We are targeting second half of the year.

And it will be Fendt first am I correct.

Yes.

I wish them luck

Thank you.

Ladies and gentlemen, we have reached the end of the allotted time for the question and answer session. I will turn the call back over to management for closing remark.

Thank you Cynthia, we just want to take an opportunity to thank everyone for their interest in AGCO and if you do have follow up questions. Feel free to call me later today, thanks.

Ladies and gentlemen this concludes AGCO Corporation 2008 first quarter earnings release conference call. You may now disconnect.