1. First off Gregg, can you give us a little history about your company in the skid steer market?

John Deere entered into the compact construction equipment business with a focused business unit [Commercial Worksite Products or CWP] in 1998 — a four model introduction of Deere designed and manufactured skid steers. In the past nine years, the CWP product line has evolved and grown into a 15 tractor line up that includes over 100 Worksite Pro Attachments.

2. How many skid steers do you sell in your lineup today?

• 300 Series skid steers — seven models (313, 315, 317, 320, 325, 328 and 332)
• 300 Series compact track loaders — two models (CT322 and CT332)
• Worksite Pro Attachments — over 100

3. Which companies have the biggest market share for skid steer loaders in the North American market today?

Bobcat is the share leader in skid steers and John Deere has gained significant market share in the past few years, closing in on the number 2 position at an extremely fast pace.

4. What growth markets do you see for skid steers? Landscaping? General construction? Private users?

The construction industry, and thus the landscape industry, has been one of the main economic highlights for most of this century. These segments offer the largest growth potential for the light equipment market segment in 2006 and beyond.

5. Do you see any declining markets?

There is some concern that higher interest rates and higher oil prices will drag down consumer spending in 2007/2008, however, economic expansion is expected to continue in the United States through 2010 fueling the various skid steer and CTL market segments. Several powerful factors are still in place which will continue to fuel skid steer and compact track loader sales, including historically low long-term interest rates which have been fueling housing starts and small business growth.

6. What have been the major market evolutions in the skid steer industry over the last two years?

John Deere is seeing a demand in compact equipment products and features that offer productivity and uptime and at a low daily operating cost for the consumer.

7. Which are the more popular machines – radial or vertical lift skid steers?

Over the past 10 years, customers have been purchasing skid steers that are larger and therefore the manufacturers are building machines with higher capacity and operating weights. Vertical lift style boom systems are the most popular on the larger machines because they can reach up high and also reach out over a dump truck sidewall better then the radial lifts units. It should be noted that radial lift machines are more popular in the smaller skid steer sizes due to compact advantages.

8. What is the most popular size of skid steers?

The most popular sized skid steer has a rated operating capacity of 1751 to 2201 lbs. For John Deere, this is a 320 skid steer loader.

9. Do you see skid steers getting bigger or smaller?

We believe that you will see a few competitors adding some larger models to their line over the next year or so to match the size and power of the 332 model that Deere has been selling since 2001. However, we do not believe that machines will go much larger than 3,200 lbs of rated operating capacity because those machines would no longer posses the traits or dimensions of how a skid steer is supposed to act or operate. In addition, many customers will move past an extremely large skid steer to a wheel loader that will better meet their higher capacity/performance needs.

10. Do you think compact track loaders (also called rubber track loaders) will have a big impact on skid steer sales in 2007?

The largest market segments for compact track loaders are landscape, building, underground and rental. The skid steer and compact track loader markets were strong once again in 2006. The 2007 outlook continues to look positive. Skid steer sales are projected to be down slightly and the compact track loader market is expected to see significant growth due to more competitors entering the business and additional familiarity to performance attributes

11. Do you see compact wheel loaders affecting skid steer sales at all?

Compact wheel loaders do impact sales of skid steers because they offer advantages of a smooth ride, higher travel speeds and increased carrying capacities. John Deere’s 244J compact wheel loader offers features like 19-mph travel speeds, stereo steering, ride control, return-to-dig and a best-in-class operator station environment. Consumers seeking these features tend to purchase a wheel loader before a skid steer loader.

12. What are the most popular “add ons” to a skid steer purchase?

The most popular John Deere features are items like two-speed, anti-theft, air conditioning/heater, suspension seat, 12-volt connection for cell phone, over-the-tire steel or rubber tracks and single push button Quik-Tatch controls for changing attachments from the seat of the cab.

13. What is the most popular operator control pattern?

Clearly the most popular control pattern used today within the industry is the foot pedal control pattern. This pattern is most familiar to the operator in precise controlling of the boom and bucket. We see joystick controls being the wave of the future.

14. How have creature features changed over the years?

During the late 1990s, most consumers were looking for a low-cost skid steer to operate like a mechanized wheelbarrow. Today, customers are increasingly moving to skid steers as their primary piece of operational equipment with creature comforts including enclosed cabs, heat and air conditioning, suspension seat, 12-volt systems and push button Quik-Tatch.

15. Is self-leveling popular?

The self-level option tends to be popular with the low hour or weekend users. Self-level works best on the radial lift style boom system because the bucket on that system needs to be adjusted constantly throughout the radial lift path. Vertical lift systems tend to offer a more vertical lift path that does not need regular adjustment as often when loading.

16. What kind of engine options do contractors have when buying a skid steer?

Common engines in a skid steer generally range between 45 to 99 hp. No manufacturer offers engine options with various skid steer or CTL models

17. With so many manufacturers in the skid steer market, what is your company doing to become a bigger brand in the North American skid steer marketplace?

Everything, every decision and every step that John Deere takes has to do with offering the end-user products that are the most productive, designed with the industry’s highest uptime features at the lowest daily operating cost available in the industry.

18. Is the skid steer attachment industry growing?

The skid steer attachment industry continues to grow and is still a major percent of business for the largest skid steer manufacturers in North America. Distributors feel that the attachments business provides the largest opportunity for a generous margin on the complete sale to any end user.

19. What advice would you give for a future purchase of a compact track loader?

Consider these seven things:

1. Track & Undercarriage Durability — Ask the salesman what is the expected life of the undercarriage and tracks in your conditions in hours. Ask customers in your trade in similar conditions what their undercarriage life has delivered.

2. Track & Undercarriage Replacement Costs — Ask the salesmen for a parts price summary of all the parts needed to rebuild the undercarriage as well as the cost of the rubber tracks. Items #1 and #2 will be two key elements in determining your cost per hour of operation.

3. Machine Performance — Conduct side-by-side demos on the same day in the same conditions and try to determine if there is a difference in machine performance, comfort and operation between brands

4. Talk Shop — Talk to customers that have owned a compact track loader for two years or more and ask if they have had any issues or advice.

5. Pick the Perfect Size — Determine what your machine size needs are, including dimensions, rated operating capacity, trailering weight, etc.

6. The Dealer — Consider the dealership’s product support, training, parts availability and road ready service.

7. Resale Value – Consider your resale value, reviewing auction and wholesale prices vs. initial new purchase prices.

20. Thanks a ton for all your help, Gregg.

That’s not really a question, but you’re very welcome.