This summary is based on the third quarter fiscal 2007 earnings call conducted by Deere & Company (DE: chart) on August 15, 2007.

Chief Finance Officer: Mike Mack

Vice President Investor Relations: Marie Ziegler

Investor Relations: Susan Karlix

Investor Relations: Bill Ratzburg

Key Investors Issues

- Earnings per share increased to $2.37 from $1.85 in the prior year quarter.
- Quarterly revenue rose to $6.63 billion from $6.27 billion in the previous year.
- For fiscal 2007, the company projects net income is $1.70 billion versus the previous guidance of $1.55 billion.

Third Quarter Fiscal 2007 Financial Highlights

Deere reported record third quarter net income of $537 million on equipment operations net sales of almost $6 billion.

On a continuing operations basis, income increased 23% and diluted earnings per share rose 28%.

The third quarter total worldwide equipment operations net sales were up 5% compared to the prior year quarter.

There were about three points related to positive currency translation, price realization was about 2 points. In fact, all three equipment divisions had positive price realization in the quarter. This is particularly gratifying given the difficulty in the Construction and Forestry markets. LESCO, the company’s newest opportunity, added about another two points. The physical volume in the equipment businesses was down slightly in the quarter, making the bottom line performance all the more impressive.

For the full fiscal year, worldwide production tonnage is now forecast to be up 4% versus the previous forecast of up 2%. The fourth quarter 2007 tonnage for the worldwide equipment operations is expected to be up 19%. Within the US and Canada, while Construction and Forestry tonnage is anticipated to decrease 22%, agricultural tonnage is forecast to increase 63%.

There is a significant change in the undistributed earnings of unconsolidated subsidiaries and affiliates between 2007 and 2006.

This change is largely due to higher dividends of about $448 million, paid by credit so far during 2007. As a reminder, this includes a $230 million special dividend paid during the second quarter of 2007. This dividend is a result of support for higher leverage in credit operations from the rating agencies.

The third quarter marks the 29th consecutive quarter, where the firm has reduced trade receivables and inventories as a percent of sales but compared to the same quarter in the prior year.

The reported trade receivables and inventory at 31 July, were $37 million lower than a year ago. On a constant exchange basis, this reduction is an impressive $234 million.

The fiscal year 2007 forecast now calls for a $250 million increase in inventories and receivables versus the previous estimate of about $150 million increase. By division, agriculture now anticipates an increase of about $375 million, about one-third of which is from currency translation, compared to the previous estimate of $175 million, and virtually all of the $200 million-change, being in company owned inventory as the firm builds up raw material and components in anticipation of better markets in 2008.

In the third quarter, the costs rose approximately $75 million versus last year.

The company’s fiscal year 2007 forecast continues to include an increase in raw material freight of about $200 million. By division, the break-down is now about $80 million for agriculture, about $20 million for C&CE, and about $100 million for Construction and Forestry.