Good morning and welcome to Deere & Company's first quarter earnings conference call. Your lines have been placed in listen-only mode until the question-and-answer session of today's conference. I would like to turn the call over to Mr. Tony Huegel, Director of Investor Relations. Thank you. You may begin. Tony Huegel - Deere & Co.: Hello. Also on the call today are Raj Kalathur, our Chief Financial Officer; and Josh Jepsen, our Manager of Investor Communications. Today we'll take a closer look at Deere's first quarter earnings, then spend some time talking about our markets and our current outlook for fiscal 2017. After that we'll 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/earnings. First a reminder, this call is being broadcast live on the Internet and recorded for future transmission and use by Deere & Company. 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 plans and projections for the future that are subject to important risks and uncertainties. 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. This call also may include financial measures that are not in conformance with accounting principles generally accepted in the United States of America, or GAAP. Additional information concerning these measures including reconciliations to comparable GAAP measures is included in the release and posted…

Thank you. So the first one is from Ross Gilardi. Your line is now open.

Sorry if I missed this at the beginning, but I just want to understand, is the guide increase on net income from $1.4 billion to $1.5 billion, is that being driven largely by the SiteOne gain? And can you help us understand why a 300 basis point increase in the revenue guide doesn't drive a greater than $100 million net income guide? Tony Huegel - Deere & Co.: Sure. I think certainly our original budget would not have assumed the SiteOne gain, so that would be part of the change from original budget to our current guidance. Of course, I'd note also in the quarter, as Josh talked about there was a tax impact. That's about $25 million negative. And then if you think about some of the increased sales that came, mix was not as favorable. I think some would anticipate, especially in the Ag division for example, a higher incremental margin. But keep in mind – again as Josh pointed out in the opening comments, the sales increases were really pretty wide spread geographically. And to the extent that there were additional sales coming from the U.S. and Canada market, it was mostly or largely coming from small Ag, so compact utility tractors, which again have attractive margins versus things like our large tractors and combines, not quite as significant of a margin. And so that's really what was driving some of that. Okay?

Okay, thanks. Tony Huegel - Deere & Co.: Thank you, next caller?

Thank you. Next question's from Timothy Thein of Citigroup. Your line is open.

Hi. Good morning. Tony, the question relates to Financial Services, and I guess I'll tie it in, in part to Josh's comments about some stabilization that you'd seen in the used market in North America. It doesn't appear that you booked an impairment this quarter. I'm just wondering, did that signal kind of an improvement that you've seen in terms of the rate of lease returns, as well as some of the values realized on some of the new sales? Tony Huegel - Deere & Co.: Certainly to your point, no – really no change in the guidance on Financial Services. As it relates specifically to operating leases, I think I'd say largely the quarter went as expected. So I think many would view that as good news in that regard. And I would point out though to be fair, first quarter is a relatively low quarter for lease returns, you'll see more – with a seasonal impact, you'll see a bit more in the second quarter. But I think as you think about risk going forward, certainly as we've taken some additional depreciation and impairment in the past to anticipate this, as well as the fact that the used equipment market is appearing to stabilize, is a good sign and gives us I think some, I'll say cautious optimism as we go into second quarter with those operating lease returns. So we'll see how that progresses, but again, at least through the first three months, things moving pretty much as planned for Financial Services. Okay? Thank you. Next caller?

Thank you. The next question is from Ann Duignan of JPMorgan Securities. Your line is open.

Just to follow up on the last question. Your other operating expense in Financial Services remains elevated, and last quarter a large portion of that was the loss on sale of used equipment. Could you talk about whether you incurred a loss on sale of used equipment in the quarter and how much that was? Tony Huegel - Deere & Co.: Yeah. I mean certainly you see that, and it was forecasted to see some loss on the sale of equipment and again, it was largely according to forecast. If you look at that year-over-year, it was roughly in line with what we incurred last year, so really no elevated level of losses coming from those leases. Maybe I'll just – some of the other things that we're seeing, volumes actually showed year-over-year in the first quarter a slight decrease, so that's on operating leases, which are pretty good sign, as well as when you think about return rates, we're seeing those return rates also stabilizing. And I'll further note that as you think about going past second quarter, we largely get beyond that headwind that we've been experiencing with those 12 month leases. And we'd have significantly fewer as we go through the second half of 2017, which again assuming the performance on those longer than 12 month leases maintain or improve, would actually bode pretty well for operating lease returns again as we move further into the year. So hopefully that helps and we'll move on to the next caller. Thank you.

Thank you. Next question is from Jerry Revich of Goldman Sachs. Your line is open. Jerry Revich - Goldman Sachs & Co.: Hi. Good morning, everyone. Tony Huegel - Deere & Co.: Hi. Jerry Revich - Goldman Sachs & Co.: Tony, I'm wondering if you could talk about the stabilization in dealer inventories. It sounds like from the prepared remarks you're producing in line with retail demand this year. Can you just frame for us over the past couple of years how much dealer inventory has come out of the channel? And is there any opportunity for some modest restocking it over the next couple of years? Or are you folks planning on running leaner than you did, call it, three, four years ago in terms of dealer inventories? Tony Huegel - Deere & Co.: I think as you think about new equipment – and where we've really talked about through 2016 and even in 2015 is as we ended the year, the target was to have inventories in line with our current retail sales environment. And so, the real difference this year is, we aren't seeing a significant decline in that retail environment year-over-year as we had both in 2015 and 2016. And as a result of that we're able to produce largely to retail demand. Obviously there's going be puts and takes by individual products. But as you think about large Ag in total for the U.S. and Canada, we're producing in line with retail, which does give us some year-over-year benefit obviously in our sales as we're able to do that. So really the answer to your question would depend on what happens to the retail environment. In a year where you start to see the retail environment improving, that's when we would consider starting to lift that inventory level in line with that. But, again, we're in pretty good shape. Now I think your question was specifically around Ag & Turf. And I'd point out for C&F, we ended the year and, again, we talked about this last quarter, if anything – inventories at our dealers were actually maybe a little light versus where we would normally have them. And that's where you have some benefit potentially if you start to see some recovery in that market, you'd certainly see some inventory coming back in for C&F. Again, if we see that industry really starting to improve. Jerry Revich - Goldman Sachs & Co.: Okay, thank you. Tony Huegel - Deere & Co.: Thank you. Next caller?

Thank you. Next question is from Jamie Cook of Credit Suisse. Your line is open. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Hi. Good morning. Tony, just wanted to get into the – I mean you talked about C&F and you talked about where the dealer inventories are. But you did raise your outlook for C&F which is curious to me because I know that's a division that's sort of has disappointed you guys in the past, in terms of being a little optimistic. And then the forecast doesn't follow through. So just sort of on the ground what are you seeing to give you that confidence level that we should be raising guidance, because I think you wanted to take a more conservative approach there, I don't know if you saw anything in the quarter or in January or in February to give you confidence? Thanks. Tony Huegel - Deere & Co.: I appreciate that question. Certainly a 7% increase in Construction & Forestry for the year is what we're currently guiding. We did see the industry – our industry outlook improved a little bit certainly from where we were at original budget, but really what we saw in the quarter was a very, very strong order book. And that's what's driving that confidence in terms of where that outlook improved. Now I'll go back to the previous comments. A lot of this is really the benefit we're seeing in those higher sales and large part is the fact that again, inventories at our dealers ended the year at very, very low levels. And especially compared to the industry, our used equipment at our dealers are actually in very good shape as well. So that does give us the opportunity and, again, some additional optimism that we'll…

Thank you. Next caller is David Raso of Evercore. Your line is open.

I was curious, organically you raised Ag & Turf revenues by over – basically $900 million, kind of a 5% swing. But your end market outlooks didn't change notably except for a little bit in South America. Can you help us better understand why the large – and obviously you didn't change your inventory outlook as well. Is there a change in your production versus retail? I didn't hear that in the earlier answer. Have you changed your view of production versus retail in Ag? Tony Huegel - Deere & Co.: Specifically in Ag, and actually I'll look at the slide that we showed, there's really very little change for Ag when you think about the fiscal forecast, still forecasting inventory/receivables combined down $125 million. What I would say is I think on the margin we saw some slight improvement across the board geographically with the exception of South America, as you pointed out, not enough really to shift the overall industry guidance, but I think again on the margin, some slight improvement in the underlying industry. But certainly from our sales perspective, we saw maybe a little bit more growth there in terms of market share anticipation in the year.

So in general, within each range some improvement, with only South America a true bump-up in range? Tony Huegel - Deere & Co.: Correct. Yes, exactly. Rajesh Kalathur - Deere & Co.: So, David, this is Raj. Just to add some more color to what Tony said and what Josh said earlier, on the Ag side, we are looking at – retail is actually growing around the world. So this is in Region 4, we said there are some compact utility tractors. We're also seeing some strength in some commodities like cotton, for example. And then beyond that, you will also look at Region 3. We talked about Brazil. There's also more enthusiasm in Argentina and a little bit more in Mexico. And then if you go to Region 1, there's a little bit more enthusiasm in China. So all these things add up to what you said. Tony Huegel - Deere & Co.: Okay.

I appreciate it. Tony Huegel - Deere & Co.: Thank you. Next caller?

Thank you.

Thank you. Next is from Joe O'Dea of Vertical Research Partners. Your line is open.

Hi, good morning. In terms of the inventory, and you talked about carrying about half as much as the rest of the industry, we still continue to see the 100-plus horsepower category for the industry come in pretty high. Are you able to give any kind of breakdown for your own inventory levels if we split that 100-plus into the large stuff and the small stuff? So combines are actually at what look like very healthy inventory levels for the industry. Do your large tractors mirror what we would see in combines, and so we can bucket all of the higher inventory levels in the small category? But just to try to understand that important category of tractor where we don't get as much visibility. Tony Huegel - Deere & Co.: Sure. I'm not going to be able to give you specific numbers, but keep in mind large tractors do tend to run a little higher than combines. And some of that's just the significant seasonality of combines and the way we use the early order program versus tractors using the more sequential traditional type of order book. So again, you do see generally a little higher level of orders. But what I would say is, similar to what we said in the past, really what is driving that elevated level would be what we would consider midsize livestock-oriented machines that are in that kind of 100-horsepower to 200-horsepower. It's not what we would consider large Ag in the 220-plus range. Those are in very, very good shape from a new inventory level perspective. Again, keep in mind, as you move into lower horsepower ranges, you also have a bit of a shift in our stocking strategy. So we've talked about on the very small stuff, we tend to run with higher levels of inventory as a percent of sales simply because those tend to be a bit more of an impulse buy. And then as you move into that midsize, certain products within that midsize range are going to mirror a little bit closer to what we have with small Ag, and others are going to mirror more what we do – lean more towards what we do with large Ag. So you do get a little bit of mix there as well, and so that's really what is driving those levels. We are moving some of those midsize livestock-oriented type of products, is where we're seeing most of the inventory reduction in the year that's forecast. But again, I think generally you see a little bit higher stocking strategy on those versus the very large equipment. So hopefully that helps, but let's go ahead and move on to the next caller.

It does, thanks.

Thank you. The next question is from Steven Fisher of UBS. Your line is open.

Thanks, good morning. From a timing perspective, you're forecasting roughly flat revenues in the first half on the equipment side. That would imply you have upwards of 8% revenue growth in the second half. You talked to Jamie about some of the visibility you have in the orders on the construction side. What's the visibility you have on the Ag side in getting to that overall strong growth in the second half of the year? Tony Huegel - Deere & Co.: As you think about – again, we've talked about this quite often. In North America, we certainly have our best visibility. And so when you think about large Ag in particular in North America, we do, as I just mentioned, have early order programs on combines and other seasonal equipment. So certainly that combine early order program in most years is 90-plus percent of our annual production. That ended during our first quarter, and so we have very good visibility on combines. I'll assume the next question on that will be how did it end? So I'll go ahead and give you that now.

Sure. Tony Huegel - Deere & Co.: And we did on combines ended up single digit year over year, and again, I think it's reflective – a couple questions ago someone mentioned the combine inventory position, and that certainly is reflected in that strong sales. On large tractors, again, we run a more of a traditional sequential order book. And there I would say, as you look at our 7R, 8R, and 9R tractors, it's a mix, but generally in line year over year from an availability perspective. So what we mean there is if a customer comes in today and orders a tractor, when would that next availability be. So some are a little further out year over year, some are a little closer. 8Rs, for example, are actually a little behind from an availability perspective, three to four weeks. Last year it would have been end of May, early June, and this year availability is early May. But then you look at things like 7R tractors, and they're a few weeks ahead, as are some of the 9R tractors, so again, in general, running very much in line. So I would say our visibility is pretty good and our order book is very comparable year-over-year in terms of what we're seeing today versus the forecast that we have in place. So again, I think we'll obviously have even better visibility next quarter, but on large Ag pretty good visibility for the year.

Thank you. Tony Huegel - Deere & Co.: Thank you. Next caller?

Next is from Lawrence De Maria of William Blair. Your line is open. Larry T. De Maria - William Blair & Co. LLC: Hi, thanks. Good morning, Tony, guys. Tony Huegel - Deere & Co.: Hi, Larry. Larry T. De Maria - William Blair & Co. LLC: In North America, specifically some of your competition has been having some issues with their distribution. And I'm just curious, how you would view your distribution vis-à-vis the competition in terms of stress levels? And I'm assuming it's in better shape obviously. And just kind of curious what kind of market share changes or programs you might be running to take advantage of the situation and your relative health? And then just on the last question you just answered, can you give a large tractor percentage like you did for combines? Thanks. Tony Huegel - Deere & Co.: Again, we don't comment in terms of the order book specifically on tractor because it's simply a different type of ordering program in terms of not using an early order program. But as it relates to the dealers, our dealer distribution especially in North America on the Ag side and the Construction as well, for that matter, is actually in very good shape. As we've done a lot of work in recent years, with that dealer network seen a lot of consolidation. Generally, those dealers of tomorrow in particular, their margins are very strong. They utilize parts and service to really cover a significant portion of their fixed cost, which help them as they go through leaner complete goods years, like we're seeing over the last several years. And so that's really helped us maintain again a very, very strong dealer network. One of the things we've talked about, as you go through a downturn, often it does provide a good market share opportunity for us as we tend to manage our inventories much better than the competition. So we're in a better position that way. Our dealers tend to be much stronger. We've had additional investment in product, so really expanding that technology gap between our product and customers. So when you do see that market returning, generally that's again some of our best market share opportunities. And we would expect the same to occur as we go into future years here. Larry T. De Maria - William Blair & Co. LLC: So would that be factored into this year, Tony? Or would that provide upside if you're able to take advantage in the downturn this year? Tony Huegel - Deere & Co.: Certainly we would have that factored in. And I think as you look at our sales versus the sum total of the guidance that we have for industry, I think certainly that's reflected in those numbers, so. Larry T. De Maria - William Blair & Co. LLC: Thank you. Tony Huegel - Deere & Co.: Yep. Next caller?

Next is from Michael Shlisky of Seaport Global Securities. Your line is open.

Good morning, guys. Just want to go back to your comments earlier on the livestock industry. It's only been a few quarters of some kind of weak trends here. Do you think we're kind of seeing the early innings of a multiyear down swing in the livestock world at this time, or is it just more of a temporary blip? And I know you have some kind of new midsize tractor refreshes this year. Is it possible that if we do see a down swing, Deere might gain some share with some of your newer products out there, just kind of fit that 100 horsepower, 110 horsepower range? Tony Huegel - Deere & Co.: Certainly when you bring out new product you always hope that that drives some market share gain. Livestock again, I think you've certainly seen some higher margins, especially through the fall months. You're going get a varying range of what could happen as you move through the year. But I think, as many people are aware, we do use Informa economics as an external consultant there. And generally, I think they would see the feeder cattle market seeing some improvement in margins as we go into 2017. Again, not forecasting the very, very strong margins that we saw a couple years ago, but certainly seeing some improvement. Same thing really for the pork industry. Poultry has remained pretty positive although as production has increased, you see a little bit of erosion in some of those margins. But, again, staying positive. I think, what I would point out is, across the board, on all of those commodities, there is a healthy level of export demand anticipated for U.S. producers. And I think that's probably one of the bigger questions is, does that export market actually happen or not. And so, if you want to point to risk, I think there would be – that would be the major one we would point to, but certainly today in the forecast, we would anticipate margins to stabilize and maybe even slightly improve across the complex. Okay.

Thanks, Tony. Tony Huegel - Deere & Co.: Thank you. Next caller?

Thank you. Our next question is from Andrew Casey of Wells Fargo. Your line is open.

Thank you. Good morning, everybody. Tony Huegel - Deere & Co.: Hi, Andy.

Can you provide some additional color on Europe, I mean specifically orders and whether industry inventory levels are elevated in any particular region? Tony Huegel - Deere & Co.: Yeah. I mean I think as you think about Europe from an inventory perspective, certainly not a major concern there. I mean used in pockets would be elevated. Places like the UK with exchange, sliding a bit there. Actually it's helped the used equipment market. That was the area we previously had been pointing to with some elevated used, but you'll see pockets there. But from a new side, actually pretty good shape from an inventory perspective. It's a market that's kind of languished a bit over the last several years in terms of slight up, slight down throughout the region, and really kind of forecasting that as we move through the year. Now one of the positive signs, as Josh pointed out, is dairy now after a year, a year-and-a-half of really having some – creating some headwind in that market appears in current forecast anyway to maybe be seeing some recovery. Now that likely isn't going to drive equipment until maybe later in the year, but really into 2018 assuming that that recovery continues. So again, as usual, kind of pockety, but inventory largely is not really a concern from that perspective. Thank you.

Thanks. Tony Huegel - Deere & Co.: Next caller?

Yes. Next question is from Adam Uhlman of Cleveland Research. Your line is open.

Hi. Good morning. Tony Huegel - Deere & Co.: Hey, Adam.

I was wondering if we could go back to Construction & Forestry outlook. I'm curious if a pickup in demand from the rental channel is what has been driving the improvement in the order book recently? And then related to that, have you changed your pricing assumptions at all for C&F this year with the dealer inventories getting weak and it sounds like with the strong orders, has that been a component of the forecast increase? Tony Huegel - Deere & Co.: Yeah. Certainly rental I think for us with some of the new product, especially in the compact equipment, is certainly a positive year-over-year. We've talked about things like our skid steer loader that's new this year, that we talked about that really at original budget. So that certainly is a part of the sales for Deere in that regard. Pricing, keep in mind that's less a function of an inventory issue for us. The negative pricing that we saw last year was not driven by our dealers having excess inventory. It was simply the competitive environment where in order to get sales, we were losing market share early in the year and had to ramp up discounting in order to protect some of that. So I think it's a little early yet to anticipate any improvement from a competitive perspective. Certainly we're hopeful that that would happen, but that would not have been part of the change in our outlook from original budget. Okay, thank you. Next caller?

Thank you. The next is from Brett Wong of Piper Jaffray & Company. Your line is open. Brett W. S. Wong - Piper Jaffray & Co.: Hey, guys. Thanks for taking my question. Tony Huegel - Deere & Co.: You bet. Brett W. S. Wong - Piper Jaffray & Co.: Have you started to see any increased lending in Brazil? And on the government credit availability, do you see any risk to where funds are going to come from? And any thoughts around kind of rates moving lower for Moderfrota there? Also do you see any risk to demand in Brazil given the strengths of the reais impacting some farmer profitability? Thanks. Tony Huegel - Deere & Co.: Yeah. I think broadly as our outlook would anticipate, we continue to see strength and strengthening markets in South America including Brazil. Profitability, while FX may have some impact, certainly is still very positive there. From a FINAME perspective, there's always risk. I think the risk is always greater when you think beyond June, when you move into the next fiscal year in particular. And to your point there's actual opportunity there as well as the overall market rate has come down. I think there is some speculation that there could be some pressure to reduce the Moderfrota rate as we go forward. We'll see what happens there. From a funding perspective, I think the government continues to be very supportive of agriculture. We've seen that, as Josh mentioned. We've already seen them at 50% to the original budget for Moderfrota, and what we've been told is their commitment remains and to the extent there's need for additional funding, that it will be available. So again, I think history would tell us that something that they have supported in the past. So hopefully, we'll continue to see that support as we go forward. Thank you. Next caller?

Thank you. Next is from Robert Wertheimer of Barclays Capital. Your line is open.

Thank you, good morning. Tony, just to clarify on your comments on how far you're out on the 7s, 8s, and 9s, that assumes a flat underlying production rate, and you're a few weeks ahead, a few weeks behind. Is that how I should interpret that? Tony Huegel - Deere & Co.: That is no. because that implies a production rate in line with what our forecast is.

What your forecast is, okay. Tony Huegel - Deere & Co.: That's a very good clarification. It does not necessarily imply that we're – even if we've same availability that you have flat sales year over year, they could be higher, they could be lower.

Exactly. Okay, perfect. And then on commissions paid to dealers, maybe I missed it, but I think that's a new disclosure. Is that a new business practice? What exactly does that mean? Is there something shifting in the market where dealers want you to coordinate with big farmers more directly, or maybe it's on the used trade-in more directly. What exactly does that imply, if anything? Tony Huegel - Deere & Co.: There are some markets where we do have a little higher level of direct sales to large and very large customers. Brazil would be a market that we would highlight in particular. We have talked about commissions to dealers in the past, and it's usually in environments like this, where you're seeing sales in Brazil really elevated. And so again, in order to compensate our dealers as those sales go directly there are commissions paid to those, those instead of being booked as part of our net sales, actually accounting rules would require us to book those as SA&G in again sales commission. So that's largely what's driving it. You see it a little bit in U.S. and Canada. But again, mostly what you're seeing in the quarter was driven by Brazil.

Got it, thanks. Tony Huegel - Deere & Co.: Yes, thank you. Next caller?

Thank you. Next is from Mig Dobre of Robert W. Baird & Company. Your line is open. Mig Dobre - Robert W. Baird & Co., Inc.: Yes, thank you. Good morning. So growth is very much back half weighted for your guidance. I'm trying to see if you can give us a little bit of color as to how we should be thinking about margin progression sequentially, or maybe operating income, however you want to frame it, first half versus second half. And also associated with this, have you made any changes to your raw material assumption for the year? Tony Huegel - Deere & Co.: Generally, again, as you would expect, as you move through the year – and I'm looking at total equipment operations, second and third quarter tends to be our stronger margin quarters. And then we start to see that come off in the fourth quarter, first quarter being as usual the lowest margin quarter. So again, not a significant shift in that breakdown as you move through the year. Again, I'd point out, some years, second and third quarter often compete for which one is the higher margin quarter. But, again, that would be the progression. On a raw material perspective, certainly commodity prices have risen a bit in the quarter from – it actually came down a bit and then back up. But we're still forecasting, I'd say in some cases slight headwind, but really mostly flattish. When you consider the offset of the cost reduction programs that we have in place, those elevated commodity prices are being offset, so really not a significant change from original budget. Okay, next caller?

Thank you. Next is from Seth Weber of RBC Capital Markets. Your line is open.

Hey. Good morning, everybody. Tony Huegel - Deere & Co.: Hi, Seth.

I just wanted to go back to the pricing question – or the pricing discussion. Pricing was up 2% in the first quarter. You're guiding to 2% in the second quarter, but full year is only up 1%. Is that just some conservatism, or are you seeing something out there in the order book that's causing you to think second half pricing will be softer? Thank you. Tony Huegel - Deere & Co.: Keep in mind, first quarter is, again, a very light quarter, and rarely do you see the first quarter drive the full year. Some of that gets into comps year over year as you think about the progression. But again, as you think about pricing, we've talked about over the last several years, even when it's been a point, it's been closer to 1.5 points, and that wouldn't be unique this year versus some of the other years. So again, what we'll see as we go through the year how that pricing works out. And as we talked about earlier, what happens with C&F could drive some of that as well, if the market's competitive environment lessens up a bit, I think that's where we would hope at some point we would see some better pricing.

Okay. Tony Huegel - Deere & Co.: Okay, next caller?

Thank you.

Thank you. Next is from Sebastian Kuenne of Berenberg Bank. Your line is open. Sebastian Kuenne - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Good morning, gentlemen. We all know that the farmer expectations for future income is really bullish since November. So the Midwestern farmers are very positive on the outlook. So I think this might translate also to the dealers becoming a bit more positive. So when you say that the pre-orders are shooting up, is that really orders from the end farmer that the farmer purchase and order these large equipment, or is it more restocking with the dealers? Do you see a difference in Q1 this year compared to last year? Tony Huegel - Deere & Co.: It's a good point and one to always keep in mind. What I would tell you is, on the combine early order program, there is a mix there every year between retail and some dealer order for stock. The mix this year is very consistent with what we saw a year ago. And similarly on our large tractors, it would be a very similar mix. So the short answer is no, it's not increased orders that should be implied to see just inventory increases. It's again, a similar mix between retail and stock, with the heavier on a large Ag equipment, a heavier mix – much heavier mix towards retail versus stock. Okay, thank you. Next caller? Sebastian Kuenne - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Just a quick follow-up, but it's true that last year the focus was more on destocking with your dealers, whereas this year the trend is more towards restocking? Tony Huegel - Deere & Co.: Again, what we're not doing is under-producing to retail. So last year we would – yeah, so again, I would say inventory levels, other than the fact that we have the ability to produce to retail, is not really a story, if you will, in terms of our orders year over year. Okay. Next caller? Sebastian Kuenne - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Thank you. Thank you.

Thank you. Next is from Nicole Deblase of Deutsche Bank. Your line is open.

Thanks for squeezing me in, guys. Good morning. So I want to ask about the Construction & Forestry margin guidance. I know you guys had a 150 basis point headwind from sales incentives during the first quarter, and I guess I'm curious, does that completely go away in 2Q and beyond? I'm just trying to think of the cadence of C&F margins throughout 2017. Tony Huegel - Deere & Co.: Certainly as you get into the back-half of the year, the comp gets much easier. Now I guess I should point out in second quarter, remember, because we increased our outlook for discounting, there was the accrual bumped-up in the second quarter. So that does create I guess an easier comp in the second quarter. But as you think about sequentially pricing in the end market we would hope becomes more consistent as we move through the back-half of the year. But really, a little bit higher material costs, not so much from materials being purchased in the U.S. so much, but some higher emissions-related costs. And remember, we do purchase – we have some partner products that come from Japan. Some of those yen-based products on excavators, the exchange is creating some higher costs year-over-year there. And again, the negative price realization is really what's driving from a negative side some of the lower margins in C&F so.

Got it, thanks. Tony Huegel - Deere & Co.: Thank you, and we'll take one last call.

Yes. Our last question is from Joel Tiss, BMO. Your line is open.

Hey. Most of them have been answered. I don't know if you talked about the warranty, why it was up so much. And I just wanted to add on that, the cost cutting, is that pretty much all just head count reduction? Or is there anything else in there? Thank you. Tony Huegel - Deere & Co.: Yeah. I'll start with warranty and I'll let Raj handle the cost reduction. But really if you think about that warranty that was identified for Ag in the quarter, again, I would emphasize first quarter is a relatively low quarter, so changes tend to be magnified a bit more than they would be certainly in things like our second and third quarter. But it was in part due to a change in our Service Parts Warranty program. So in the U.S. and Canada, our parts for Ag & Turf in the past would have been 90-day warranty. That has shifted to a full year for Ag parts and six months on Turf parts. So obviously, when you make those changes, again, there's an accrual for all of the service parts that are already at a dealer in dealer inventory, and that accrual rate goes up for all of those. And so that's reflected in the quarter that the change is made and you're seeing that reflected this quarter. Rajesh Kalathur - Deere & Co.: And, Joel, your question on structural cost reduction, which bucket it's coming from, we have said in the past, material costs, direct and indirect, would be about 40% of that and people-related costs about 20%. And then there are a lot of other areas like R&D and lower depreciation that constitute the rest. So I would say people-related costs is definitely delivering as we anticipated, so is the material costs. If you recall on the material costs we said that structural cost reduction we're aiming for is about 2.5%, but we allow for 1.5 points of material inflation and FX, and net of only 1 point is included in the structural cost reduction goal of over $500 million. So that is also yielding results as we anticipated.

Just a quick – sorry. Why would you have to take a charge for raw material cost-related reductions? Tony Huegel - Deere & Co.: It's just simply as we did the calculation from a practical perspective, we assumed there would be some commodity inflation that would be more than offset by the cost-reduction project. That's not uncommon for us historically as you see inflationary periods here and there. And so, it was a way to make sure that we really were looking at this on a net-basis, not a gross-basis from a cost reduction perspective as it relates to material so.

Okay, thank you very much. Rajesh Kalathur - Deere & Co.: Thank you. Tony Huegel - Deere & Co.: And again, we'll conclude our call. We appreciate your participation. As always, we'll be available throughout the day and in the next week to take any follow-up calls. Thank you.

Thank you. And that concludes today's conference. Thank you all for joining. You may now disconnect.