Good morning and welcome to the Deere’s fourth quarter earnings conference call. (Operator Instructions) I would now like to turn the call over to Ms. Marie Ziegler, Vice President, Investor Relations.

Good morning. Also on today’s call are James Field, Chief Financial Officer, Susan Karlix and Justin [Merrivac] from the Deere Investor Relations staff. Today we will take a closer look at Deere’s fourth quarter earnings and then spend some time talking about our markets and provide our first look at how things may shape up in 2010. After that, we will respond to your questions. Please note that slides are available to complement the call this morning. They can be accessed on our website at www.johndeere.com. First though a reminder, this call is being broadcast live on the Internet and recorded for future transmission and use by Deere and Thomson Reuters. Any other use, recording, or transmission of any portion of this copyrighted broadcast without the express written consent of Deere is strictly prohibited. Participants in the call, including the Q&A session, 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. Actual results might differ materially from those projected in these forward-looking statements. 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. The company, except as required by law, undertakes no obligation to update or revise its forward-looking information. The call and accompanying materials are not an offer to sell or a solicitation of offers to buy any of the company’s securities. This call will also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America, otherwise referred to as GAAP. Additional information concerning these measures, including reconciliations to comparable GAAP measures, is posted on our website at www.johndeere.com/financialreports, under other financial information and under conference call information slides. Call participants should consider the other information on risks and uncertainties and non-GAAP measures in addition to the information presented during this call. Now, for a closer look at our fourth quarter, here is Susan.

Thank you Marie, John Deere today announced the completion of a solidly profitable year. We did so in the face of challenging market conditions, effecting virtually every one of the company’s major businesses and major markets. Earnings alone though tell only part of the story and the fact is 2009 was a year of significant achievements in many ways. In 2009 for example, saw the biggest single year sales decline in company history, over $5 billion. Yet our net income of just under $900 million was the eighth highest ever. What’s more, John Deere generated a good deal of cash last year, $1.4 billion from the equipment operations. That was more than enough to cover capital expenditures and dividends, both of which continued at healthy rates. And it leads to another impressive statistic. Company and dealer inventories came down by well over a billion dollars last year. As a result these inventories in relation to sales, finished the year right where they started, at 24%. That’s quite an accomplishment in light of the magnitude of the sales downturn. What about economic profit or [SVA], one of the primary metrics used to manage the company. SVA was obviously much lower for the year but it actually remained in positive territory for our equipment businesses. Liquidity was another success story, in spite of the worst financial crisis in memory, the company maintained competitive access to the credit markets. We issued over $9 billion in new debt and have the cash on hand to fund virtually all the maturities coming up through 2010. Partly as a result our customers were able to experience uninterrupted access to financing from John Deere. No doubt 2009 was one tough year but the company remained on a profitable footing, reinforced its financial position, continued to fund important…

Thank you Susan, we are now ready to begin the Q&A portion of the call.

(Operator Instructions) Your first question comes from the line of Steve Volkmann - Jefferies & Co. Steve Volkmann - Jefferies & Co.: I was hoping we could talk a little bit about cash in 2010 and I’ll put my question and follow-up together, should we be expecting I guess working capital to start to become a use as things stabilize here and you rebuild a little bit and give us your thoughts with respect to that. And then obviously you have basically no net debt on the equipment balance sheet here, what’s your thinking with respect to how much cash you need to keep on the balance sheet as we go through 2010.

Let me start with working capital, our forecast currently has trade receivables and inventories for the enterprise, that includes the equipment operations piece that is funded by Capital Corp. staying about flat in 2010 so I wouldn’t expect a big change. Steve Volkmann - Jefferies & Co.: Flat in dollar terms.

Yes, in absolute dollar terms. Regarding the second portion of your question, I think we’ll turn it over to James.

I think as we’ve said before that we’ve decided in this environment to maintain a relatively conservative financial position with a sufficient amount of liquidity given the choppy nature of what we saw over the last year and I think you can anticipate that we will continue with that posture throughout 2010. Steve Volkmann - Jefferies & Co.: But you’ve also said that over time you would expect to draw down that liquidity as market conditions allowed and I guess what you’re saying is that you see no signs that they’re allowing that so far.

We’re not ready to say that we’ve seen the signs that we would draw down some of that liquidity.

Your next question comes from the line of Robert Wertheimer - Morgan Stanley

Just one quick clean up question, I thought you were separation charges were going to be about $85 million in 4Q, it was $47. Are those going to come back later, what was the reason for the forecast versus the actual.

I think maybe we’ve got pre-tax or full year or something mixed in here. The separation for the full year is, on an after-tax basis, is about, its exactly $57.6 million in the quarter, $47.6 and then on a pre-tax basis the voluntary separation in the quarter is $76 million and $91 million for the full year.

So pre-tax in the quarter it was $76, I think you [inaudible] $85 so I thought that’s a big gap. Okay, second question would be and this is just a bigger question, when you’re talking to farmers especially in the US and Canada, are you hearing caution because they don’t know how they’re going to end up the year or are you hearing, we just flat don’t want to buy or are you hearing, we don’t know yet because we haven’t finished and then as a second part of that, are you seeing a big split between tractors and combines, combines have been stronger this year.

Well actually as I think as Susan alluded to earlier, I’m sure you’re all aware the harvest has been running very late so we’ve seen our farm customers very much focused on trying to get that crop in. Interestingly in the month of October we saw a big decline in our used combine inventories that our dealers are financing as customers were getting additional equipment to help support their requirements in the harvest. As we moved out of October and into November we have seen actually a pick up in the pace of retail activity and it actually influenced our outlook a bit so we’re maybe a little more positive then we would have been a few weeks ago. So we have seen some better than expected retail activity. I can’t really differentiate between the combines and the tractors in terms of retail activity in part because the combines have an early order program on them as is our custom and tractors don’t. I wouldn’t know that there’s any dramatic difference.

And my last one, used equipment prices.

Used equipment prices in the United States are down, I’m speaking on the Ag side, are down 7% to 10% from the very high levels of a year ago. We continue to see very good levels of turns in both tractors and combines.

Your next question comes from the line of David Raso - ISI Group

My question is about price versus cost, the spread you’re forecasting for 2010 using the mid point, is about $486 million. That more than offsets the post retirement increase. But given the comment you just made on used equipment pricing, I’m just trying to think through what percent of your raw material cost component cost for 2010 do you already feel you have locked in, hedged, however you want to describe it, that makes you feel comfortable raw materials will be down year over year. As well, maybe what percent of your sales for 2010 already in backlog with a pretty set selling price.

Regarding the selling price, we, after the events of 2008 I think you’re aware, that we changed the way we lock our customers in, and that is we don’t lock the price until we actually provide the shipping, we lock in on an availability date and until that time, there is a possibility of up to another 4% of price increase. And then obviously the customer would have the ability to make another decision at that point. Regarding our hedging, as you well know, there is no ability in the steel markets, for example to go out, no practical ability, to do hedging. We have used various contracting strategies with our steel vendors and actually with many vendors, some of which involve indexing so you have the ability to take advantage of moves up and down. But we actually do use a variety of techniques and maybe I’ll just conclude by saying that there is a lag affect on this, you certainly saw it very pronounced in 2008 and 2009 and for us in round numbers about a six month lag up and down. The bulk of our production as you know, we really start to ramp up in the latter part of the first quarter, heavy production typically in a typical year in the second quarter and then as you move into the end of the third quarter we’re starting to ramp down a bit. You can assume that we’re probably contracting for material in a few months ahead of that. So again, that kind of gives that plus the index probably gives rise to the six-month lag.

But what I’m trying to figure, in the channel you hear about the 4% combine increase, the 3% on the tractors, 5% plus on the new 8000, but you’re already starting to hear about some discounting on the seven’s, some on the six’s and so forth and I’m just trying to, obviously the 1% to 2% price increase, if maybe you can split it between Ag and construction, that might be of some help. Because it looks like the initial Ag increases are above that, there’s already some discounting.

The initial Ag increases are on average the price increase is about 3%. And we have not published anything to our dealers on the construction side, but we have told them in dealer meetings that they should look for things that are flattish and that really explains the price increase. The other thing is as you’re quoting some of those price increases, remember that when we do our price calculation, we strip out any kind of feature upgrade. And so, and we re-class that into volume, so when you’re hearing a list price quote on say the new AR tractors which is in the 4% to 6% range, some of that is going to be re-classed into volume because it reflects higher horsepower, new features in the cab and things like that.

I would also add to that that those prices that you’re talking about is pricing in the North American market. And so we had some very different dynamics in other parts of the world as well.

Your next question comes from the line of Eli Lustgarten - Longbow Research

Good morning and Happy Turkey, I have two clarifications I want to make sure, on slide 34 and 35 you show pension OPEB contributions $358 in 2009 and $400 million in 2010, that’s different from the incremental $400 million that will hit the P&L statement that you’re talking about, correct.

That’s a very good question, one is the cash number, that’s actual funding. The $400 million that one, when we talk about the income charge, that’s an accrual expense.

And so is the incremental $400 million hitting the P&L but that’s not the cash impact.

Its just coincident that they’re the same number.

That’s why I just wanted to make sure. And the other one is a clarification, you said margins effectively in fiscal 2010 in both divisions are going to be similar to 2009, is that adjusted margins or as reported margins.

As reported.

Now didn’t construction equipment lose money for the year.

That’s correct.

And are you forecasting that its going to lose money for the year in 2010.

That is exactly what that would imply.

I just wanted to make sure that I didn’t—

Basically although, and again I applaud their performance given the extremely difficult market conditions they’re in, they do benefit from some increase in production tonnage but basically they’re $100 million higher pension and OPEB eats most of that. There’s a little bit more R&D as Susan talked about earlier.

And then a question, two-part, in your statement 2011, you gave 2011 prices or preliminary prices for the Ag market, the implication if I drew it correctly, that farm cash receipts in 2011 you’re assuming will be relatively flat to down, and the second part of the question, with new management and congratulations everyone—

You’re going way over the number of questions, so let’s stop with the cash receipts question, we do not yet have our forecast for 2011 cash receipts, I think we specifically provide that I can’t remember if its February or May when we forecast that. So I don’t know because remember that as we look at cash receipts it is a function of quantity and price. So at this point we’re not prepared to, simply don’t have the details to provide you with any more comments on 2011.

Your next question comes from the line of Meredith Taylor - Barclays Capital

I’m hoping just to start out, you can talk about the extent to which revenues by segment trailed dealer retail sales this year and what you’re assuming there for the contribution from the catch up in 2010.

Well if you look at the, I wouldn’t have a better way to describe it then to tell you look at the change in receivables and inventories as probably the best way to characterize it. Did I not understand what you’re looking for?

Well I was talking more from a revenue standpoint, how much your revenues trailed your dealer retail sales.

I don’t, our dealer retails would have been down I’m sure a little bit less then what our own revenues were because again we, I’m not sure.

I’d say, that probably the easiest way to look at that is look at the change in the receivables, that’s the difference between what we’ve shipped and really what’s going on in the retail marketplace for sort of a gross approximation of that difference.

And thanks for giving the color on the large Ag versus the small Ag, when you talked about the down 10%, I mean were you talking about production down 10% or were you talking about revenues down 10% and then as we net out price etc., how should we think about what volumes are down in that business for 2010.

That would have been a, it’s a proxy, that down 10% is the sales, it’s a proxy because our inventories again and receivables outlook is flat, we’re thinking that our sales will be, so its kind of this time its both the same.

And then maybe if you can just kind of follow along those lines around the large Ag give us an update on how your order book is trending.

Okay, and then we’re also over on the number of questions, actually going forward I am going to ask that all analysts do respect the one plus one because we have several people in queue and we need to make sure we get through them. In terms of the order book, the combine order activity, we’re about 75% covered for model year 2010. As I mentioned earlier we’d actually seen retail activity jump so we’ve seen a pretty good increase in that over the last few weeks. In terms of the effective availability date for 8R’s it would be April and it’s the same for our 9000 Series tractors. This is, last year for 8R’s, well it would have been the 8030’s then, the effective availability would have been July, but remember that at this point last year we still had the expectation that we were going to send a lot of product into Russia and we were not.

Your next question comes from the line of Ann Duignan - JPMorgan

Talking about Russia, could you comment on when we were over at Agri Technic, there was a lot of talk about the Russian government considering a bill that would effectively mean that even if a company was assembling in Russia they would have to use 90% local components. Can you comment on what you’re hearing on that, this came from the BDMA. And then would that cause you to maybe postpone or slow down your investment in Russia.

I think that it would be fair to say that we are working very closely with Russian government to make sure that we understand any rules that are being proposed. Our investment in Russia is limited. We’re going into a leased facility and basically its, the lease and the tooling combined are about a $50 million investment so we have quite a bit of flexibility. And I think I’m going to stop at that. If you are thinking about the risks in terms of the 2010 forecast from any impact in Russia, bear in mind that we said all along that we would start production in the spring of 2010 and we are online for that. But we’re going to do one model, get it right. Go to a second model, so the bottom line is there is not a lot of production and sales activity effectively that occur over the course of the year because we will be very much in the ramp up mode.

And my follow-up then is on Western Europe, how much confidence do you have in the down 10% to 15%, just given the lack of visibility in that region right now and how bad things are currently in the Ag equipment market.

I would agree with you that there is a lot of concern, there are a few glimmers of positive things happening with dairy. The prices have stabilized to the point that we’ve seen, they are not slaughtering their herds and so you’ve seen some stabilization of profitability so that their break-even, maybe a little bit better. One of the factors at play is certainly lower levels of income, again we think that as people take a look at their income positions over the course of the year, benefiting from some of the lower input costs, you might see a little bit of improvement as you move through the year there. On the other hand we would tell you that, and we’ve talked about this before, used equipment, there is very, very little used equipment in Western Europe, really up until the liquidity crisis in the world. That affected the ability for used equipment in Western Europe to move East and it went all the way into Russia. That has had a pretty pronounced affect. I think over time on values, we’re not at a crisis stage by any means on used equipment in Western Europe but that does, we did very much temper our outlook for the market and take that into consideration.

You know in terms of how confident we are that is our forecast but I’d offer a couple other points. That’s on top of course the pretty significant decrease this year that we saw in that Western European market. The second point is, I would tell you that our folks that are in the Western European theater have been pretty good in their feel for the market and we called the softness and basically we’re pretty accurate with our projections in 2009 in this marketplace. So I think the team there is very close to the market and of course it always is a forecast but we think it’s a very reasonable forecast.

Your next question comes from the line of Jamie Cook - Credit Suisse

Two quick follow-up questions, when we think about the pension expense I think you mentioned Q1 we were going to have $125, the remaining three quarters, do we split it about evenly or how are you thinking about that and—

It would be about $100, $100 and the $75 and that’s very round numbers.

And then I guess just my last follow-up question, just back to Eli’s question on construction and forestry, I know we have to add back the $100 million or so on pension, but that’s still, given your sales increase I thought you would do a little better than just slightly break-even or so, I’m just trying to, R&D, is there anything else that I’m missing there. That still seemed a little disappointing relative to what I thought even if I adjust for pension.

When we talk about being up 18%, you are [off] and incredibly low base. So your not, its not like you’re adding production as the sweet spot of the cycle and I think that’s what you all need to bear in mind. You’re off a very, very low base.

Your next question comes from the line of Andrew Casey – Wells Fargo Andrew Casey – Wells Fargo : Just returning to the outlook, trying to understand the quarterly progression in the tonnage, is that all related to very weak comparisons this year and then the 8000 Series start up or are you expecting some of this November trend that you highlighted earlier to continue.

I think it has frankly more to do with the way tonnage played out last year and the back order positions that we had then really what you can read into the market for this year. If you’ll recall last year in the Ag division we were expecting a very good level of retail sales and frankly in many parts of the world and as events played out we still had extremely good retail sales in the early part of the year in the US and Canada. But in redirected production that had been intended for other markets into the US and Canada. So I think that you need to bear that in mind. In construction they have been jamming on the brakes for a very long period of time and so and last year as a result of the liquidity crisis and the extreme difficulties in the US housing market, they really took their pain very early in the year and, or they went into the year, excuse me, thinking that it was going to be a little better and then took their, then jammed on the brakes even harder. And so I think it really has to do more with the comparisons.

Your next question comes from the line of Henry Kirn - UBS

Happy Thanksgiving, could you detail the breakdown between res and non-res demand for construction equipment as you see it today, and what are you looking for as a sign post that equipment demand could finally begin to start to improve again.

We’re at least probably six to nine months away from a slight uptick in overall construction equipment demand in 2010. In fact we have industry retail activity this year down about 5% to 10%. We still have rental companies depleting although we think that the pace is slowing at least in our equipment sizes, but we have as you know a very cautious outlook on the non-res side. And although the government money is flowing, this would be the Federal stimulus money and it is pretty much going as planned, you still have significant budget issues in states and local governments that is restraining the overall impact of that stimulus money and so again, we have a fairly pragmatic view of the construction markets in the US.

And as my follow-up, you highlighted the real dollar exchange rate as a risk to [inaudible] sales, could you give a little color on how you’re thinking about that and what you’re watching for, if the effect could go the wrong way on you.

We don’t take a view on the future direction of the real but we would note that is has been strengthening at a pretty good clip against the US dollar. And we know that farmers in Brazil sell their crops in dollars, their expenses are real based and so we’re keeping a close eye on that. I can’t see that there is a specific trigger point.

Your next question comes from the line of Seth Weber - RBC Capital Markets

Just following up on the production question, the ramp through the year, at what point do you think that you’ll be needing to add employees back and start restaffing to meet that ramp up.

I would not be able to answer that question. That would not be something we would be able to do in this forum.

Well maybe asked differently how much can you maybe try and handicap what percentage of your cost savings over the past year do you think are permanent versus temporary.

You bet, for next year we are looking at saving from the voluntary separation program, again this is 2010 in the $50 to $60 million range, that’s a pre-tax number and then in 2011 and beyond about $75 million, that includes the $50 to $60 we’ll get in 2010. We have savings from Welland in the $40 million range. We’ve got that raw materials, I just recite that because that’s in the $150 to $200 million range. In our Landscapes operation they have closed 15% of their store locations. They’ve done a lot of store mergers with fertilizer and irrigation so we’re not really pulling out of markets but we’re realigning our organizational structure. I don’t remember off the top of my head the number of employees, but we have restructured those operations and we think that next year the savings from that would be in the $50 to possibly $75 million range.

Just a quick follow-up, can you talk about the credit situation in Brazil please. I know last quarter there was some timing issue with some of the payments coming back on line and can you just give us any color there on Brazil.

If you look at the non-performing you’ll still see that it is higher in Ag and we cite, and this is in the Appendix, that like 70%, 75% of that is due to Brazil. We are working our way through the normal credit collection processes. Have collected a little bit more cash and do have some customers that are stressed, but the most important thing is that we believe that our reserves are adequate. We are stress testing that portfolio every two months, we do a thorough customer analysis. So we feel that we are adequately provisioned.

Your final question comes from the line of Andrew Obin - BAS - ML

Just to follow-up and I apologize if I missed it, so for construction and forestry we are explicitly guiding for margin that is very much in line with 2009 in 2010, is that, am I correct in—

That’s exactly what we’re saying.

And just to follow-up on that question, so taking a top down view and revenue is going to be down 1% next year, and we’ve taken out a lot of cost over the past couple of years, and I understand the pension issue, but if you look at pricing, if you look at tax rate, if you look at the finance side, that effects most of it. So how should I be thinking about a company, about [investable] company that has revenue decline of 1% and possibility decline of 25%. What am I missing.

Pension and OPEB.

Not but I mean a lot of it is, you have pricing, you’ve taken out, you’ve been cutting costs. You’ve done a fantastic job cutting costs in this downturn, should I just be thinking is that really pension and OPEB.

Its pension, OPEB and then I have to say that the mix in North American Ag is not trivial, this is a big deal. Susan gave you a number of a point of margin for the full year. That’s mix. There’s also absorption issues as we take tonnage down in North American, that is also very significant. And that might be the missing link in understanding the outlook. Thank you all very much for listening. We will be available today to respond to your questions and have a safe and Happy Thanksgiving those of you who will be celebrating it.