This summary is based on the first quarter fiscal 2008 earnings call conducted by Deere & Co. (DE: chart) on February 13, 2008.

Management:

- Vice President of Investor Relations: Marie Ziegler
- Investor Relations: Bill Ratzberg
- Investor Relations: Susan Karlix
- Chief Financial Officer: Michael Mack

Key Investors Issues

- Net income was up 54% to $369.1 million or 83 cents a share.
- Sales increased 18% to $5 billion.
- The firm still has 29 million shares remain under the current 40 million share repurchase program.

First Quarter Highlights

Net income was $369.1 million or 83 cents a share from $238.7 million or 52 cents a share in the prior year, up 54% on equipment operations net sales of $4.5 billion.

- Worldwide net sales and revenues increased 18% to $5.201 billion compared with $4.425 billion a year ago, with 4 points related to positive currency translation, 2 points of price realization and increased volume.
- Production tonnage was up 21% and second quarter world tonnage is expected to increase about 19% driven by a strong, global market.
- Equipment sales in the United States and Canada were up 9% and net sales outside the United States and Canada increased by 37%, which included a positive currency-translation effect of 11%.

The equipment divisions reported operating profit of $457 million compared with $270 million last year, with the improvement due to the favorable impact of higher sales and production volumes and improved price realization.

- Trade receivables and inventories were $6.488 billion, or 29% percent of previous 12-month sales, compared with $5.672 billion, or 28% of sales, a year ago.
- Financial services reported net income of $97.7 million compared with $88.2 million last year, with the growth attributable to growth in the credit portfolio, higher crop insurance income and a lower effective tax rate.
- Higher interest expense resulting from increased leverage, higher selling, administrative and general expenses, and an increase in the provision for credit losses partially offset the improvements.
- Approximately 29 million shares remain under the current 40 million share repurchase program, approved by the Board of Directors in May of 2007.

Performance of Business Segments:

- Agricultural sales increased 33%, primarily as a result of higher volumes, the favorable effects of currency translation, and improved price realization.
- Operating profit was $332 million, up 142% from $137 million, due to the favorable impact of higher sales and production volumes and improved price realization, partially offset by higher selling, administrative and general expenses attributable in large part to currency translation.
- Also affecting the quarter''s results were increased research and development expenses.

Inventories rose as the division ramped up to meet increasing global demand and the resulting additional absorption, contributed about 7 of the 29 points of incremental margin.

- Looking ahead, global Ag fundamentals are very encouraging as worldwide stocks-to-use ratios remain at very low levels, particularly for corn and wheat.
- In December, the United States enacted the Energy Independence and Security Act of 2007, which significantly expanded mandatory levels of renewable fuels, providing support for the continuing investments being made in ethanol and defining target levels and time-frames for more advanced bio-fuels as well.
- This may support significant and exciting new opportunities for Deere equipment and services related to the planting, cultivating, harvesting and handling of other cellulosic materials.

Total U.S. cash receipts are expected to be above the $300 billion for the subsequent two years, translating into a stronger order book, not only for tractors and combines, but also for products like sprayers and seeding equipment.

- Industry sales of agricultural equipment in the United States and Canada, are now up 15% to 20% from 2007 and the outlook for South America is up 15% or more as farm incomes continue to accelerate in Brazil and Argentina.
- The outlook for Western Europe is now for industry sales to be up 3% to 5% for the fiscal year, and strong growth expected to continue in Central Europe and the Commonwealth of Independent States countries, including Russia.

- Commercial & Consumer sales were up 16%, with LESCO operations, accounted for 14% of the sales increase.
- The division had operating profit of $8 million, down 79% as a result of higher selling, administrative and general expenses from LESCO, partially offset by higher sales volumes.
- New product introductions continue to drive excellent customer interest, helping to offset challenging market conditions.
- The first quarter is a seasonally weak quarter for this business and not surprisingly, in the United States not much fertilizer is applied in the November to January time period.

Portions of the business continue to be affected by the housing slowdown and general economic conditions.

- Forecast reflects slightly lower incremental sales at LESCO as the rise in fertilizer prices is expected to reduce applications demand by consumers.
- But it also reflects the exciting new product offerings coming to market this year, including the Z-Trak Pro and Estate mowing lines, Select Series homeowner models and Utility vehicles.

- Construction & Forestry sales declined 6% though operating profit rose to $117 million, versus $95 million a year ago.
- The profit increase was mainly due to improved price realization and the positive effect of production levels in closer alignment with retail demand, partially offset by higher raw-material costs and lower sales volumes.
- Despite very challenging economic conditions in the U.S., production tonnage increased 2% as the division benefited from producing closer to retail demand, made possible by exceptional inventory management and positive price realization.

Fiscal 2008 Outlook: