Marie Z. Ziegler: In the fourth quarter of last year, we were full bore, full press ahead and so the ending inventory guidance reflects the fact that you are up against a fourth quarter end that was higher reflecting the general business conditions. This year you would have Montenegro at full bore which you did not have last year, you would have additional parts inventories as we are building our sales in new markets; you need to prepare for that.

David Raso (Citigroup): On the raw material increase, particularly steel, are you seeing it more from surcharges being put onto your current contracts or are contracts coming up that you are seeing the ramp of 50% from March to June?

Marie Z. Ziegler: I understand your interest in the issue but that level of detail we are not prepared to discuss.

David Raso (Citigroup): The more of the variability in your $400 million to $500 million is already in an agreed-upon new contract. That gives you some assuredness around that number but you are seeing surcharges and new closeout for June going up every day. Is your handle moving target versus new contracted numbers?

Marie Z. Ziegler: It comes from many commodities, not only steel. The contracts all have different options and $400 million to $500 million is our best estimate at this time and we have no further comments.

Seth Weber (Banc Of America Securities): On the interim price increases, is that just for the ag space or do you expect to also put increases on the other two businesses over the balance of the year?

Marie Z. Ziegler: I cannot speculate about what we might do with pricing actions. Our current forecast for those divisions would not contemplate further pricing actions. That does not preclude us from doing something but I can only say about what is in the forecast and that is what is baked in.

Seth Weber (Banc Of America Securities): On the C&F business, can you characterize any of the positive pricing that you saw there?

Marie Z. Ziegler: We would not drill into that level of granularity and I am going to stick with the fact that we are somewhat positive in the second quarter and the guidance for the full year is flat and a remarkable achievement in the current environment.

Daniel Dowd (Bernstein): When do you think it would be realistic to expect incremental revenues from your international investments?

Marie Z. Ziegler: From those existing projects, the incremental revenues will kick in rapidly, but I do not know what actions we may choose to take in the future that would overall affect the incremental margin that is being generated. As we see opportunities to invest in these good markets, our model says that this is the time that we should be investing as we have high value-added projects to add.

Daniel Dowd (Bernstein): It seems reasonable to expect given what are explosive growth opportunities that the issue of higher than usual SA&G is likely to linger for a while. This is not likely to get straightened out in the next four quarters or so. Is that correct or do you think the overseas margins are likely to rapidly close in on the domestic margins?

Marie Z. Ziegler: On the SA&G, I would not use the terminology “straightened out.” We are making some deliberate choices to invest for the future and I do expect that we will continue to be in an investment mode in some of those growth markets for a period of time and that is consistent with the opportunities we have seen in the future in some of those countries.

Barry Bannister (Stifel Nicolaus & Company): On the international side your sales growth has gone from 32% to 37% to 46% in the last three quarters but your incremental margin in international has gone from 30% to 26% to 14% so it is basically cut in half. Are raw materials and component issues far more of a problem overseas than in North America, perhaps due to the fragmentation of those markets?

Marie Z. Ziegler: I have not heard real significant differentiation between the challenges in any one country or any one geographic market.

Bill Ratzburg: It has to do with the mix of products, where they are produced, and where the absorption occurs in the factories versus where the revenues are counted. As an example, large tractors made in Waterloo have good incremental margin absorption. The manufacturing impact accrues in the North American operations but revenue is occurring overseas. So I think that when you do the segmentation of the domestic versus international, you get a certain distortion because of that, so you look at the whole to get a better picture.

Barry Bannister (Stifel Nicolaus & Company): Is it a strategy of Deere to spend as it were some of the strong EPS gains on market expansion, thereby capping the upside to EPS?

Marie Z. Ziegler: No, when we talk about SA&G investments, we are not talking about discounts. In our pricing we are looking at the value that we are delivering to our overall customer. Our SA&G takes more of the form of when you are building a new factory, you are going to have people in position who would bring in machine tools, doing the market development, maybe strengthening a dealer network when you may not have revenue to offset that and a lot of our SA&G comes in the form of what I would generally call dealer development and market development. We have got people on the ground helping to develop trade finance for example and banking relationships. We are investing in the Kaluga facility for example, it has parts distribution.

Mark Koznarek (Cleveland Research Company): You are expanding Waterloo 25%. Is that all going to be on by next year?

Marie Z. Ziegler: No, in fact, in the release, we said that we expect that it would be fully implemented in 2010.