Deere & Company Investor Relations - John Deere

John Deere 

Committed to Those 

Linked to the Land 

Deere & Company 

May / June 2012

Safe Harbor Statement & Disclosures 

This presentation includes forward-looking comments subject to important risks 

and uncertainties. It may also contain financial measures that are not in 

conformance with accounting principles generally accepted in the United States 

of America (GAAP). 

Refer to Deere’s reports filed on Forms 8-K (current), 10-Q (quarterly), and 

10-K (annual) for information on factors that could cause actual results to differ 

materially from information in this presentation and for information reconciling 

financial measures to GAAP. 

Guidance noted in the following slides was effective as of the company’s most 

recent earnings release and conference call (16 May 2012). Nothing in this 

presentation should be construed as reaffirming or disaffirming such guidance. 

This presentation is not an offer to sell or a solicitation of offers to buy any of 

Deere’s securities. 

2 

| Deere & Company | May / June 2012

Table of Contents 

3 

| Deere & Company | May / June 2012 

Slide # 

John Deere Strategy 4 

Macroeconomic Tailwinds 19 

Foundational Success Factors 26 

Global Markets and Opportunities 38 

John Deere Financial Services 69 

John Deere Power Systems 75 

Farm Fundamentals 78 

Market and Currency Volatility 87 

Appendix 90


Strategy

5 | Deere & Company | May / June 2012

The John Deere Strategy 

Our Purpose: Committed to those linked to the land 

6 

No longer “business as usual” 

– Global macro-trends present significant 

opportunities for John Deere 

– Global population and income growth 

– Global infrastructure needs 

– New customer segments 

– Technology advances 


460E Articulated Dump Truck 

744K Wheel Loader 

843K Wheeled Feller Buncher 

8360R Tractor 

S690 Combine 

X728 Riding Mower


Realizing Sustainable Growth Through Global Expansion 

Sustainable SVA growth is delivered by distinctively serving 

our customers, employees, and investors 

Extend and enhance our financial and operating achievements of 

recent years 

Our challenge: to capture anticipated tailwinds by attracting 

more customers to the John Deere Experience across our six key 

geographies (US/Canada, EU 27, Brazil, CIS/Russia, India, 

China) in a manner that meets local needs while leveraging our 

global scale 



Agricultural and Construction Equipment Aspirations 

Agricultural Equipment Solutions 

Strategy 

– Defend and grow market share in 

developed markets 

– Grow market share in developing 

markets 

Construction Equipment Solutions 

Strategy 

– Continue to grow strong #2 position in 

North America 

– Globalize the business 

8 | Deere & Company | May / June 2012 

9530T Tractor - USA 

755K Crawler Loader - USA 

6488 Combine - China 

435 Backhoe Loader - India


Performance Target Aspirations 

Sales 

– Enterprise net sales of $50 billion 

at mid-cycle by 2018 

Profitability 

– Operating margins of no less than 

12% at mid-cycle by 2014 

Asset Efficiency 

– Asset turns of 2.5 times at midcycle 

by 2018 


Equipment 

Operations 

Equipment 

Operations 

2010 Normal Volume 

$25 billion 

6.6% 

2018 Normal Volume 

$50 billion 

12.3% 

U.S. & Canada 

BRIC 

13.0% 

2009 2010 2011 

1.9 2.2 2.3 

2009 2010 2011 

Rest of World


Integrated Enterprise 

Integrated portfolio of businesses, each with a vital and specific role 

Global Growth Businesses 

Agricultural and Construction Equipment Solutions 

– Invest in global expansion for profitable growth by 

capitalizing on macro-trends 

Complementary Businesses 

Turf and Forestry Equipment Solutions 

– Defend and grow share, enhance SVA, strengthen the 

channel of the Global Growth Businesses 

Supporting Businesses 

Financial Services, Power Systems, Worldwide 

Parts, and Intelligent Solutions Group 

– Strengthen and further differentiate our Global 

Growth and Complementary Businesses 


Financial 

Services 

S660i Combine 310SJ Backhoe Loader 

XUV 550 Gator 1170E Wheeled Harvester 

Power 

Systems 

Worldwide 

Parts 

Intelligent 

Solutions


Foundational and Critical Success Factors 

Both Foundational and Critical 

Success Factors necessary… 

FOUNDATIONAL SUCCESS FACTORS 

Building on the core strengths that have guided our success 

Exceptional Operating Performance 

Disciplined SVA Growth 

Aligned High-Performance Teamwork 

CRITICAL SUCCESS FACTORS 

Developing the capabilities essential to reaching our goals 

Deep Customer Understanding 

Deliver Customer Value 

World-Class Distribution System 

Grow Extraordinary Talent 


…to ensure that Deere is the 

provider of choice across the 

world


Foundational Success Factors 

Exceptional Operating Performance - Equipment Operations 

� 29.8% OROA in 2011, a record high for the company 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

2009 

12% 

*Excludes fiscal 2009 expenses related to goodwill impairment and voluntary employee-separation, for reconciliation to GAAP see “2009 OROA 

Reconciliation to GAAP” slide in Appendix. 

12 


2009, adjusted* 

80% 

Low 

2001 

2010 

2002 

2003 

2007 

2006 

20% 

100% 

Normal 

% of Normal Volume 

2011 

2008 

2005 

2004 

12% OROA (SVA Neutral) 

120% 

High 

28%



Exceptional Operating Performance - Equipment Operations 

� SVA Model: Higher Net Cash Flow, More Consistently 

$ Millions 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

13 


Adoption of SVA Model 

Sale of Trade Receivables to 

Credit 

� Over $7 billion in Pension/OPEB contributions, 2001-2011



SVA ($ millions) 

Disciplined SVA Growth - Equipment Operations 

� SVA Journey, 1991 - 2011 

2,800 

2,400 

2,000 

1,600 

1,200 

800 

400 

0 

-400 

-800 

-1,200 

-1,600 

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Note: For reconciliation of SVA to GAAP, please see “Equipment Ops SVA Reconciliation to GAAP” slide in Appendix 

14 




SVA ($ millions) 

Disciplined SVA Growth - Enterprise 

� SVA Journey, 2002 - 2011 

� SVA in 2011 was ~ $2.5 billion – a record high for the company 

2,800 

2,400 

2,000 

1,600 

1,200 

800 

400 

0 

-400 

-800 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Note: For reconciliation of SVA to GAAP, please see “Equipment Ops SVA Reconciliation to GAAP” slide in Appendix 

15 




16 

Aligned High-Performance Teamwork 

� Integral part of strategy, reinforced with compensation 

� Global Performance Management reinforces alignment 

� Base pay changes linked to achieving goals 

STI: Short-Term Incentive – Bonus focuses on OROA/ROE 

� Covers most worldwide salaried employees 

� Applies one enterprise-wide bonus metric 

MTI: Mid-Term Incentive – Bonus driven by sustained SVA creation 

� About 8,200 management employees eligible 

LTI: Long-Term Incentive – Primarily stock options 

� Top 900 employees eligible 

� Minimum stock holding requirements for senior management (~ top 125) 



Measures 

Commitment to execute and monitor all initiatives critical to our success 

Performance measures 

– Traditional financial measures based on what we are delivering today to our stakeholders 

Health measures 

Metric Target 

Sales Net Sales Growth Target $50B* (2018, at mid-cycle) 

Profitability Return on Sales (Operating Margin) 12% (2014, at mid-cycle) 

Asset Efficiency Asset Turns 2.5x (2018, at mid-cycle) 

*Implies a CAGR of ~ 9% (2010 – 2018) vs. historical CAGR of 7-8% 

– The qualities, attributes and actions being introduced to ensure the sustainability of our 

performance over time 

Exceptional Operating 

Performance 

Disciplined SVA Growth 

Aligned High- Performance 

Teamwork 


Metric Target 

Quality % JDQPS certification 

Sales/SVA Mix 

by Geography 

Employee Engagement 

% Non- U.S. & Canada 

Employee Survey’s 

Engagement Index


In Summary 

18 

Accelerated emphasis on global growth 

–$50 billion mid-cycle sales by 2018 

–Approximately 50% outside of U.S. & Canada 

–Capitalize on increased global demand for food, shelter and infrastructure 

Focus on improved profitability 

–12% mid-cycle margin by 2014 

Continued adherence to OROA/SVA model 

–30% OROA at mid-cycle sales (12% at trough) with improved asset turns 

Focus on two growth platforms 

–Global pre-eminence in agricultural-equipment solutions 

–Global construction-equipment operations (with presence in China) 

–Complementary/supporting businesses to help drive performance of global 

growth platforms 

Revised metrics reflect strategic direction 

–“Performance” metrics align compensation to strategy 

–“Health” metrics introduced to monitor underlying factors (e.g., market 

share, quality) to ensure performance is sustainable 


Macroeconomic Tailwinds 

Support John Deere’s 

Global Growth Businesses

Long-Term Macroeconomic Tailwinds 

Support Global Growth Opportunities 

Population growing in size and affluence 

By 2050, world population will reach 9 billion, up from ~7 billion today, with 

most of population growth in Asia and Africa 

Large middle class developing in China and India 

Opportunity #1: Feeding the world 

Agricultural output must double by 2050 

Gross output must increase 3.4% annually in the next 10 years vs. 2.4% 

annual growth in past 10 years 

Natural resources under strain, especially water 

Opportunity #2: Massive urbanization 

Migration from rural areas creates need for infrastructure development 

2010: For the first time in history, more than half the world population lives 

in cities 

2050: More than 70 percent will live in cities 


Strong Global Tailwinds in Ag & Construction 

Significant Growth from Developing Economies 

Agriculture and Construction amongst the Top 10 industry 

sectors in the G-20 countries . . . 

Sector 

Manufacturing 

Real Estate and Business Activities 

Wholesale and Retail Trade 

Transport, Storage and 

Telecommunication 

Financial Intermediation 

Construction 

Health and Social Services 

Public Administration and Defense, 

Compulsory Social Security 

Education 

Agriculture 

Social and Personal Services 

Utilities 

Mining 

Hotels and Restaurants 

Private Household Services 

21 


Absolute increase in real value 

added 2009-18, 

$ Billions 

88 

462 

381 

351 

331 

321 

289 

757 

647 

575 

1,315 

1,052 

1,805 

2,301 

Note: G20 countries account for 73% and 89% of agriculture and construction segments respectively. 

Total global growth for agriculture is $520B and construction is $854B 

3,625 

CAGR 

2009-18 

Percent 

3.1 

2.3 

5.3 

2.9 

5.2 

4.0 

4.1 

3.0 

3.2 

3.4 

2.9 

2.7 

4.8 

3.8 

3.8 

. . . Significant growth in Agriculture and Construction 

between 2009-2018 will happen in the BRIC countries 

Private Household Services 

Agriculture 

Mining 

Manufacturing 

Utilities 

Transport, Storage and 

Telecommunication 

Construction 

Wholesale and Retail Trade 

Financial Intermediation 

Public Administration and Defense, 

Compulsory Social Security 

Education 

Hotels and Restaurants 

Social and Personal Services 

Real Estate and Business Activities 

Health and Social Services 

1 Brazil, Russia, India, China 

Sector 

Source: Global Insight World Industry Service 

Share of growth 

from BRIC 1 

17% 

26% 

24% 

36% 

36% 

34% 

34% 

39% 

49% 

46% 

61% 

58% 

58% 

71% 

71% 

Real value-added 2005 USD

Developing Economies Growing Faster 

While developed economies have 

always accounted for a larger 

share of GDP . . . 

Real GDP 1 

$ Trillions 

11.3 

1.3 

10.0 

1970 

3.8 

28.1 

5.2 

22.9 

1990 

Developing Developed 

22 


46.6 

12.0 

34.6 

2008 

1 Real GDP (expenditure method) base year 2005 

CAGR, 

1970-2008 

Percent 

6.1 

1.9x 

3.3 

... their growth will slow 

significantly, relative to that 

of developing economies 

Real GDP 1 

$ Trillions 

46.6 

12.0 

34.6 

2008 

3.0 

65.5 

22.5 

43.0 

2020 

115.3 

53.3 

62.0 

2039 

Developed countries include OECD. Developing countries include all developing markets (Regions as defined by Global Insight) 

Source: Global Insight World Market Monitor 

CAGR, 

2008-2039 

Percent 

4.9 

2.6x 

1.9

Dynamics of Food Demand 

Services 

Processed 

Products 

Livestock 

Products 

Commodities 

Source: World Bank 2008 

23 


27% of world’s population 

(Most hunger problems solved at 

$2.50 threshold) 

20% of world’s population 

(2/3rds experience hunger & 

malnutrition) 

Per Capita 

Income 

>$10 

per day 

$2.50-10 

per day 

$1.25-2.50 

per day 

Global Construction and Infrastructure Needs 

Infrastructure is expected to be the fastest 

growing segment of construction 

Residential 

Non-residential 

Infrastructure 

WW Construction spending 

Gross output, $ 2008 Billions 

6,509 

2,266 

2,356 

1,888 

2008 

3.6% 

9,915 

2,998 

3,555 

3,361 

2020 

24 


CAGR 

2008-2020 

Percent 

2.4 

3.5 

4.9 

Estimated gross spending as a percent of 

2008 global GDP 

Construction 

12% 

Mining & Quarrying 

All Other 

*Note: Construction and Mines & Quarries account for ~5% and ~4% of 2008 value-added WW GDP, respectively 

Source: IHS Global Insight, March 2009; Off Highway Research; AEM; CCMA; Yengst; Deere analysis 

74% 

7% Ag, Hunting, 

Forestry & Fishing 

7%

Global Construction Spending in 2020 

Concentrated in a Small Number of Markets 

China 

Construction spending 2020 absolute, 

Top 10 (Billions of 2009 $s) 

U.S. & Canada 

India 

Japan 

U.K. 

France 

Germany 

Brazil 

Russia 

Italy 

432 

365 

302 

299 

267 

257 

592 

751 

25 


1,508 



Residential 

2,049 

All Construction 

Construction spending 2010-2020 change, 

Top 10 (Billions of 2009 $s) 

�China + U.S. & Canada� 36% of 2020 absolute, compared to 30% today 

�China + U.S. & Canada + Brazil, Russia, India � 50% of 2020 absolute, compared to 40% today 

Source: IHS Global Insight, Deere Analysis, August 2011 

China 

U.S. & Canada 

India 

Brazil 

Russia 

U.K. 

Japan 

Indonesia 

Mexico 

Korea 

168 

106 

103 

95 

92 

60 

57 

437 

534 

1,128 



Residential 

All Construction

Foundational 

Success Factors 

Building on Core Strengths 

That Have Guided Our 

Success

Asset Management 

Dramatic Reduction in Asset Intensity 

Quarterly Receivables & Inventory as a % of Previous 12 Months Sales 

60% 

55% 

50% 

45% 

40% 

35% 

30% 

25% 

Avoided ~ $5.5 billion in working capital in 2011 vs. 1997 

Receivable level in 2011 consistent with 1997, with almost 3x the sales 

20% 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 

*Through 2 nd quarter 2012 

27 


Prior Year 

Current Year 

$ Millions 

$35,000 

$30,000 

$25,000 

$20,000 

$15,000 

$10,000 

$5,000 

$0 

Trade Receivables and Net Sales 

Trade Receivables Net Sales 

1997 2011

Productivity Improvement 

~ 6% CAGR over 30 Years 

$ Thousands 

Deere’s net sales and revenues per employee have increased at a CAGR 

of ~ 6% over last 30 years 

$600 

$500 

$400 

$300 

$200 

$100 

$0 

28 


Net Sales and Revenues per Employee 

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Manufacturing Efficiencies – Waterloo, IA 

Journey to a 6-Day Drive Train 

Production Days 

50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

Prior to 2005 2005 2006 2007 2008 

29 


-12 Days 

� Relocation of 412 machines 

� Eliminated 155 machines 

-14 Days 

� Machining departments based on part families 

� Arranged machines using cellular concepts 

� Started evacuation of multi-story buildings 

-10 Days 

� Total evacuation of multi-story buildings 

� New heat treat fully operational 

� Set-up improvement 

� On-site forging storage 

� Insourcing of core processes 

-2 Days 

� Run size optimization and 

set-up improvement 

� Daily run size parameters 

� Outsourcing non-core 

processes

Investment in New Products and Technologies 

$1,400 

$1,200 

$1,000 

$800 

$600 

$400 

$200 

$0 

Source: Deere & Company and competitor SEC filings 

30 


R&D as Percent of Net Sales 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

6.00% 

5.00% 

4.00% 

3.00% 

2.00% 

1.00% 

0.00% 

Deere R&D $ Deere % Competitor A % Competitor B % Competitor C %

Net Sales by Product Category 

Equipment Operations - Fiscal Year 2011 

Agriculture & Turf – $24.1B Construction & Forestry – $5.4B 

Small Ag 

Turf 

Other 

31 


Large Ag 

Forestry 

CWP 

Other 

Construction

Committed Bank Group Supports Credit Facility 

Average length of continuous relationship = ~29 Years 

$5.00 billion credit facility supporting commercial paper 

$ Millions 

– $1.50 billion 61-month facility expiring in 2017 

– $2.75 billion 49-month facility expiring in 2015 

– $750 million 364-day facility expiring in 2013 

– Have not drawn on facility 

– $2.7 billion incremental capacity as of 30 April 2012 

$6,000 

$5,000 

$4,000 

$3,000 

$2,000 

$1,000 

$0 

32 


Credit Facility Size & Commercial Paper Outstanding 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Total Facility CP Outstanding as of October 31

Deere Use-of-Cash Priorities 

Cash from Operations 

Committed to “A” Rating 

Fund Operating and Growth Needs 

Common Stock Dividend 

Share Repurchase 

33 


� Manage the balance sheet, including liquidity, to support a rating 

that provides access to low-cost and readily available short- and 

long-term funding mechanisms 

� Reflects the strategic nature of our financial services operation 

� Fund value-creating investments in our businesses 

� Consistently and moderately raise dividend targeting a 25%- 

35% payout ratio of mid-cycle earnings 

� Consider share repurchase as a means to deploy excess cash 

to shareholders, once above requirements are met and 

repurchase is viewed as value-enhancing

Worldwide Financial Services 

2012 Unsecured Term Debt Maturities* 

* Maturities as of 30 April 2012 

34 

$ Millions 

$2,400 

$2,200 

$2,000 

$1,800 

$1,600 

$1,400 

$1,200 

$1,000 

$800 

$600 

$400 

$200 

$0 


1Q 2Q 3Q 4Q

Share Repurchase 

As Part of Publicly Announced Plans 

35 

Cumulative cost of repurchases 2004-2Q2012: ~ $8.3 billion 

Amount remaining on May 2008 authorization of $5 billion: ~ $3.3 billion 

30 April 2012 period ended shares (basic): ~ 397.7 million 

(diluted): ~ 402.1 million 

Shares repurchased 2004-2Q2012: ~ 149.8 million 

Average repurchase price 2004-2Q2012: $55.64 


Actual 

Shares 

Repurchased* 

(in millions) 

Total Amount** 

(in billions) 

2004 5.9 $0.2 

2005 27.7 $0.9 

2006 34.0 $1.3 

2007 25.7 $1.5 

2008 21.2 $1.7 

2009 0.0 $0.0 

2010 5.2 $0.4 

2011 20.8 $1.7 

2012 YTD 9.3 $0.7 

* All shares adjusted for two-for-one stock split effective 26 November 2007 

** Rounded totals for each period – sum may not tie to cumulative cost of repurchases 2004-2Q2012

Deere Quarterly Dividends Declared* 

Q1 2003 – Q2 2012 

$0.50 

$0.45 

$0.40 

$0.35 

$0.30 

$0.25 

$0.20 

$0.15 

$0.10 

$0.05 

$0.00 

$0.11 

$0.14 $0.16 

36 


$0.20 

$0.22 

$0.25 

$0.28 

$0.30 

$0.35 

$0.41 

$0.46 

'03 Q1 

Q2 

Q3 

Q4 

'04 Q1 

Q2 

Q3 

Q4 

'05 Q1 

Q2 

Q3 

Q4 

'06 Q1 

Q2 

Q3 

Q4 

'07 Q1 

Q2 

Q3 

Q4 

'08 Q1 

Q2 

Q3 

Q4 

'09 Q1 

Q2 

Q3 

Q4 

'10 Q1 

Q2 

Q3 

Q4 

'11 Q1 

Q2 

Q3 

Q4 

'12 Q1 

Q2 

* Adjusted for 2 for 1 stock split on 26 November 2007

Sources and Uses of Cash Fiscal 2004 - 2011 

Equipment Operations 

$ Millions 

$21,000 

$18,000 

$15,000 

$12,000 

$9,000 

$6,000 

$3,000 

$0 

$4,287 

Beginning 

Cash & Cash 

Equivalents 

(10/31/03) 

(1) Other includes proceeds from maturities and sales of marketable securities and purchases of marketable securities and reconciliation for non-cash 

items including excess tax benefits from share-based compensation and the effect of exchange rates on cash and cash equivalents 

Source: Deere & Company SEC filings 

$16,378 

Cash From 

Operations 

37 


$5,214 

Capital 

Expenditures 

$748 

Investment in 

Financial 

Services 

$638 

Divestitures, 

net of 

Acquisitions 

$2,411 

Net Change in 

Debt and 

Intercompany 

Balances 

$3,270 

$6,194 

~58% of cash from operations 

returned to shareholders 

Dividends Share 

Repurchase, 

net of 

Common 

Stock 

Issuances 

$278 

$3,188 

Other(1) Ending Cash & 

Cash 

Equivalents 

(10/31/11)

Global Markets and 

Opportunities

Growing Global Presence 

FY 2011 equipment net sales outside U.S. & Canada over 4x the 

level in FY 2000 

$ Millions 

$14,000 

$12,000 

$10,000 

$8,000 

$6,000 

$4,000 

$2,000 

$0 

39 


Net Sales Outside U.S. and Canada 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Net Sales Outside U.S. & Canada % of Total Net Sales 

50% 

45% 

40% 

35% 

30% 

25% 

20%

Net Sales by Major Markets 

Fiscal Years 2011, 2010, 2009, 2008 

(in millions of dollars) 2011 2010 

40 


% 

Change 2009 2008 

United States 15,029 13,026 +15% 11,568 13,166 

Canada 2,329 1,767 +32% 1,454 1,902 

Western Europe 4,382 3,360 +30% 3,427 4,610 

Central Europe & CIS 1,407 746 +89% 749 1,874 

Central & South America 3,612 2,623 +38% 1,787 2,577 

Asia, Africa & Middle East 1,930 1,431 +35% 1,166 1,062 

Asia Pacific, Australia & 

New Zealand 

777 620 +25% 605 612 

Total 29,466 23,573 +25% 20,756 25,803

U.S. and Canada 

Factory Locations 

British Columbia, Canada 

Log Loaders & Specialty Products 

Iowa, USA 

Cotton Harvesting Equipment 

Planting Equipment 

Spraying Equipment 

Tillage Equipment 

Ag Tractors 

Components 

Foundry 

Engines 

Hay & Forage Equipment 

Articulated Dump Trucks 

4WD Loaders 

Motor Graders 

Skidders 

Wheeled Feller Bunchers 

Backhoes 

Compact Tracked Loaders 

Crawler Dozers 

High-Speed Dozers 

Knuckleboom Loaders 

Skid Steer Loaders 

Tracked Feller Bunchers 

Tracked Harvesters 

California, USA 

Satellite Receivers 


Alberta, Canada 

Remanufactured Components 

Kansas, USA 

Power Transmission Equipment 

North Dakota, USA 

Air Seeding Equipment 

Electronics 

Missouri, USA 

Remanufactured Components 

Wisconsin, USA 

Lawn & Garden Equipment 

Utility Vehicles 

Golf & Turf Reel Mowers 

Louisiana, USA 

Sugarcane Harvesting Equipment 

Tractor Loaders 

Scrapers 

Cotton Strippers 

Illinois, USA 

Combine Harvesters 

Headers 

Planting Equipment 

Hydraulic Cylinders 

Tennessee, USA 

Lawn Tractors 

North Carolina, USA 

Commercial Mowers 

Golf & Turf Mowers 

Utility Vehicles 

Hydraulic Excavators 

Georgia, USA 

Utility Tractors 

Compact Utility Tractors

U.S. and Canada 

Recent Announcements 

March 2012 – Final Tier 4/Stage IV solution to combine 

proven EGR Interim Tier 4 platform with customized 

selective catalytic reduction (SCR) system 

March 2012 – $70 million investment at Waterloo, IA 

factory to expand production of large farm tractors by 

10% 

January 2012 – Strategic agreement with MacDon to 

manufacture self-propelled windrowers 

December 2011 – $85 million in capital improvements 

at Des Moines, IA factory to expand production of selfpropelled 

sprayers 

August 2011 – Largest, most significant product 

introduction in the company’s history 

Deere & Company Forecast as of 16 May 2012 

42 


Waterloo Works Capacity 

Expansion 

2008 to 2013 

25% 

2008- 

2010 

15% 

2010- 

2012 

10% 

2012- 

2013

EU 27 


Horst, The Netherlands 


Zweibrücken, Germany 

Combine & Forage Harvesters 

Material Handling Equipment 

Saran, France 

Engines 

Arc-les-Gray, France 

Forage Equipment 

Balers 

Material Handling Equipment 

43 


Madrid, Spain 

Components 

Mannheim, Germany 

Tractors 

Joensuu, Finland 

Wheel Forwarders 

Wheel Harvesters 

Forestry Attachments 

Stadtlohn, Germany 

Forage Harvesters 

Headers 

Gummersbach, Germany 

Walk-Behind Mowers 

Bruchsal, Germany 

Tractor, Combine & Forestry Cabs

EU 27 

Economic Data 

General (2010) 

Population ~ 516 million 

GDP (PPP) ~ $13.77 trillion 

Top four economies based on GDP: 

Agricultural (2009) 

PPP: Purchasing Power Parity 

Source: FAO, Global Insight, The World Factbook 

44 


Production Net Exports 

Total Grains 15% 4% 

Wheat 20% 7% 

Barley 39% 39% 

Pork Meat 22% 30% 

Cow Milk 27% 22% 

Source: USDA, 2011 

Germany, UK, France, Italy 

Utilized agricultural area ~ 192 million hectares 

Arable land ~ 111 million hectares 

Approximately 70 million hectares of permanent 

crop or grassland 

Share of the world market: 

GDP Composition 

73.2% 

1.8% 

25.0% 

Agriculture Industry Services 

Source: The World Factbook, 2011 est. 

Labor Composition 

66.6% 

4.7% 

28.7% 


Source: The World Factbook, 2010 est.

EU 27 

Economic Update 

Optimism continues in the Agricultural sector 

Farm business climate and mood remain at high levels 

Farm income expected to be above long-term average levels 

Grain, beef and milk prices at attractive levels 

Demand for agricultural equipment remains strong 

Sovereign debt and fiscal issues concentrated in Southern Europe 



Not key agricultural markets 

Low levels of used equipment

EU 27 


November 2011 – Awards received at Agritechnica 2011 

7280R – “Tractor of the Year 2012” 

6R tractor – “Machine of the Year” 

Five silver medals 

June 2011 – Largest new product introduction for Region 2* 

Over 100 new products 

80% of large tractor and combine models new or 

updated 

Focus on Dealer of Tomorrow strategy 

May 2011 – John Deere and Kuhn Group sign strategic 

cooperation 

Provides large square balers into Region 2* in 2012 

* Region 2: EU 27, CIS (including Russia), Mediterranean countries in Africa, and the Near and Middle East 

46 


EUR bn (nominal prices) 

EU 27 

Government Support of Agriculture 

70 

60 

50 

40 

30 

20 

10 

Common Agricultural Policy proposed budget 2014-2020 frozen at 2007-2013 nominal levels 

0 

Rules generally known, eliminating uncertainty 

Redistribution of direct payments in favor of new member states 

1990 1995 2000 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 

Source: EU Commission, Agra Europe 

47 


2007-2013 2014-2020 

Pillar I (Direct Payments + Market Expenditures) Pillar II (Rural Development)

Brazil 


São Paulo, Brazil (JV) 

Components 

Horizontina, Brazil 


Planters 



Catalão, Brazil 

Sugarcane Harvesters 

Sprayers 

Montenegro, Brazil 

Tractors 

Indaiatuba, Brazil 

Backhoe Loaders 

4WD Loaders 

Indaiatuba, Brazil (JV) 

Excavators 

Existing Under Construction

Brazil 

Economic Data 




Top four cities based on population: 

Agricultural 

São Paulo, Rio de Janeiro, Salvador and Brasília 

Brazil converted ~ 13 million hectares from pasture land into 

crop land in the last 10 years 

Soybean, Corn, Sorghum, Cotton, and Sugarcane 

Deere projects ~20 million hectares will be brought into 

production in the next decade 

Soybeans and corn 

Deere projects ~5% CAGR in industry equipment sales through 

the end of this decade 


Source: Brazilian Institute of Geography and Statistics (IBGE), The World Fact Book 


49 



67.4% 

5.8% 

26.8% 


Source: Brazilian Institute of Geography 

and Statistics (IBGE), 2010 


58% 

18% 

24% 


Source: Brazilian Institute of Applied 

Economic Research (IPEA), 2008

Brazil 


October 2011 – Two new factories in São Paulo to manufacture construction equipment 

Solely-owned Deere factory 

Backhoe and four-wheel-drive loaders 

Partner with Hitachi in second factory 

Excavators 

Expect production to begin in 2013 

Agriculture portfolio and dealer expansion 

50 new or updated products 

Dealer locations roughly doubled since 2007 

Achieved 4 points of tractor market share in 

FY 2011 1 


1 Carta da Anfavea, November 2011 

50 


Brazil 

Gross Value of Production 

Source: MAPA (Brazilian Ministry of Agriculture), May 2012 

51 

Expected to increase 2.7% in 2012 over last season 

1997 

1999 

* In Brazilian Real 

Gross Value of Agricultural Production* 

2001 

2003 


2005 

2007 

2009 

2011 

2011 Mix by Crop 

35% 

16% 

49% 

Grains Sugarcane Other

Brazil 


Tractor 

52 

R$123 billion approved for 2011/2012 Agriculture and Livestock Plan 

R$107 billion targeted towards Agribusiness (large-scale operations) 

7% higher than 2010/2011 

R$16 billion targeted towards family agriculture (small-scale operations) 

Government programs to support equipment purchases 

Programs 1 

Mais Alimentos 

Pró-Trator 

Trator Solidário 

Finame PSI 

Moderfrota 

Combine 

Engine 


hp Where 

50-78 

50-120 

50-80 

All 

All 

Brazil 

SP 

PR 

Brazil 

Brazil 

Programs 1 Class Where 

Interest 

Rate 

2% 

0% 

~ 2% 2 

5.5% to 7.3% 3 

7.5%/9.5% 4 

Interest 

Rate 

Grace 

Period (Max) Term Maturity 

3 Years 

2 

2 

2 

1.5 

Grace 

10 

5 

5 

10 

4-8 5 

Perennial 

Dec11 

Dec14 

Dec13 

Jun12 

Period (Max) Term Maturity 

Mais Alimentos IV Brazil 2% 3 Years 10 Perennial 

Finame PSI 

Moderfrota 

All 

All 

Brazil 

Brazil 

1 Exclusively Finame qualified products. Minimum of 60% local content (weight and value) 

2 Same as Pronaf (Programa Nacional de Fortalecimento da Agricultura Familiar) 

3 6.5% if annual gross revenue < R$90 million, 8.7% other farmers 

5.5% to 7.3% 3 

7.5%/9.5% 4 

2 

1.5 

Up to 10 

4-8 5 

Dec13 

Jun12 

4 7.5% if annual gross revenue < R$500 thousand and 80% of income from agriculture related 

activities. 9.5% all other farmers 

5 Depending if used or new equipment and if equipment acquisition is isolated or in combination with 

implements

CIS 


Domodedovo, Russia 

Tractors 


Combine Front-End Equipment 

Backhoes, Loaders, Graders 

Log Forwarders, Skidders 



Orenburg, Russia 

Seeding Equipment 



Orenburg, Russia 

Seeding Equipment 




CIS 

Economic Data 




Top four economies based on GDP: 

Agricultural (2009) 

Russia, Ukraine, Kazakhstan and Belarus 

Utilized agricultural area ~ 560 million hectares 

Arable land ~ 196 million hectares 

Deere estimates “western-style” equipment used 

CIS 


November 2011 – Orenburg, Russia 

Move existing operations to a new, larger facility 

Increase available manufacturing space by ~ 600 percent 

Expand product offering from four to fifteen models 

March 2011 – Domodedovo, Russia 

Double manufacturing space at the factory 

Expand capacity for existing products 

Enable addition of new products such as log 

forwarders and front-end equipment 

55 


CIS 


Export barriers lifted 

Russian grain export ban ended in July 2011 

Ukraine’s wheat and corn export duty ended in October 2011 

Barley export duty ended in January 2012 

Russian Ag funding is expected to increase in 2012 by ~ 7% in nominal terms 

Annual Ag support in the Russian National Ag Program for 2013 - 2020 expected to 

more than double by 2020 in nominal terms, but can be shortened and/or 

restructured due to WTO requirements 

Ag modernization support, including machinery investments, expected to be $4.2 billion 

over 8 year period 

Loan interest rate subsidies may decline in favor of direct payments 

56 


India 




Pune, India 

Engines 

Transmissions 

Tractors (36-75 hp) 

Sirhind, India 


Gummidipoondi, India (JV) 

Side-Shift Backhoes 

4WD Loaders (planned production 2013) 

Dewas, India 



India 

Economic Data 

General 

Population ~ 1.205 billion (July 2012 est.) 

GDP (PPP) ~ $4.463 trillion (2011 est.) 

Top four cities based on population (2011 est.): 

Agricultural 

Mumbai, Delhi, Bangalore and Hyderabad 

Total land area ~ 3.0 million sq km 

Arable land ~ 1.5 million sq km (2005 est.) 

Annual industry tractor sales >500,000 units 

High interest rates 

Commodity prices expected to soften against 2011 but remain 

elevated due to strong demand 

Increased focus from government for farm mechanization 

Infrastructure investment projected to be ~ 9% of GDP by 2012 

(~5% in 2007) 


Source: The World Fact Book, Censusindia, Tractor Manufacturers Association of India 

58 



62.8% 

18.9% 

18.2% 


Source: IHS Global Insight, 2010 est. 


34.0% 

14.0% 

52.0% 



India 


January 2011 – New tractor factory in Dewas and 

expand current tractor facility in Pune 

~ $100 million investment 

Expect production in Dewas to begin in 2013 

October 2010 – Ashok Leyland John Deere 

Construction Equipment Company inauguration 

Production of backhoes commenced in 2011 

Four-wheel-drive loader production expected in 2013 

September 2010 – New combine factory in Sirhind 

Production commenced February 2012 

John Deere has been the largest exporter of tractors 

from India for past 8 years 


59 


India 


2012F 

2011 

2010 

2009 

2008 

2007 

2006 

2005 

2004 

185 

159 

325 

262 

610 

623 

530 

258 

672 

231 

766 

240 

313 

143 

123 


170 

194 

180 

195 

560 

197 

36 

750 

638 

207 

56 

438 

728 

48 

151 

237 

0 500 1,000 1,500 2,000 2,500 

Rupees (in billions) 

Source: India Ministry of Agriculture (2004-2009), India Ministry of Finance (2010-2012) 

60 

756 

809 

917 

1,090 

1,191 

35 

1,296 

60 

1,420 

40 

1,440 

275 

332 

Fertilizer Subsidy 

Food Subsidy (for households) 

Interest Rate Subsidy (for farmers) 

Irrigation Subsidy 

Electricity Subsidy 

2,048 

Other Subsidies (mainly for seeds)

China 




Harbin, China 

Combine Front-End Equipment 

Tractors (150+ hp) 

Planters 

Sprayers 

Irrigation Products 

Xuzhou, China (JV) 

Excavators 

Jiamusi, China 

Large Combine Harvesters 

Corn Pickers 

Ningbo, China 


Small Combine Harvesters 

Tianjin (TEDA), China 

4WD Loaders 

Excavators 


Engines 


Transmissions 

Tianjin, China (JV) 



China 

Economic Data 

General 

Population ~ 1.343 billion (July 2012 est.) 

GDP (PPP) ~ $11.3 trillion (2011 est.) 

Top four cities based on population (2009): 

Agricultural 

Shanghai, Beijing, Chongqing and Shenzhen 

Total land area ~ 9.6 million sq km 

Arable land ~ 1.4 million sq km (2005 est.) 

Share of the world market: 


Source: The World Factbook 

Production 

Total Grains 17% 

Wheat 17% 

Corn 22% 

Rice 30% 

Cotton 27% 

Source: USDA, 2011 



43.1% 

10.1% 

46.8% 


Source: The World Factbook, 2011 est. 


34.6% 

28.7% 

36.7% 



China 


May 2011 – New engine facility in Tianjin 



May 2011 – New factory in Harbin 

~ $80 million initial outlay 

Mid- and large-sized tractors 

Harvesting front-end equipment 

Planters and sprayers 

Irrigation products 



63 


Construction Equipment (New) 

Drivetrain 

December 2010 – New construction equipment factory in Tianjin 



Office (New) 

Engines (New) 

Product 

Test (PV&V) 

Tianjin Economic-Technological Development Area (TEDA) Site

China 


12 

28 

Source: China Ministry of Agriculture 

64 

2012F 

2011 

2010 

2009 

2008 

2007 

2006 

2005 

2004 

13 

12 

3 

14 

72 

75 

72 

15 


4 

15 

17 

4 

31 

1 

86 

7 

108 

52 

2 

15 

15 

19 

0 25 50 75 100 125 150 175 

RMB (in billions) 

15 

12 

20 

4 

20 

22 

103 

15 

16 

Material Subsidy (basic subsidy for purchase of inputs) 

Grain Direct Subsidy (for growing encouraged crops) 

Seed Subsidy (for purchasing high-performing seed) 

Equipment Subsidy (for purchasing encouraged equipment) 

13 

22 

18 

123 

127 

141 

20 

165

Other Regions 


Monterrey, Mexico 

Rotary Cutters 

Implements 

Components 

Torreon, Mexico 

Axles 

Engines 

Electronics 

Rosario, Argentina 

Engines 

Tractors (planned) 

Combines (planned) 



Ramos, Mexico 

Ag Loaders 

Compact Utility Tractor Loaders 

Utility Tractor Cabs 

Saltillo, Mexico 

Ag Tractors 

Transaxles 

Kibbutz Beit Hashita, Israel 

Cotton Picker Components 

Richards Bay, South Africa 

Articulated Dump Trucks 

Loaders 

Tokoroa, New Zealand 

Forestry Harvester Heads

Worldwide Parts Services 

Supporting the Global Growth of Our Equipment Operations 

Recent announcements: 

� November 2011 – Bruchsal, Germany 

� Inauguration of new deconsolidation & packaging facility within 

European Parts Distribution Center 

� September 2011 – Rosario, Argentina 

� Construction of new, larger parts facility 

66 


3 largest Parts Distribution Centers 

Other Parts Distribution locations

John Deere FarmSight TM 

Integrated wireless technology linking the equipment, owners, operators, dealers, and 

agricultural consultants to provide more productivity to a farm or business. 

� Machine Optimization 

� Solutions that get the most out of machinery 

� Use of precision technology and wireless data networks 

� Higher levels of productivity and increased uptime 

� Logistics Optimization 

� Manage logistics and machinery from remote locations 

� Fleet management solutions 

� Increased machine-to-machine communication 

� Ag Decision Support 

� User-friendly monitors, sensors, wireless networks 

� Easy access to machinery and agronomic data 

� Enable proactive management decisions 

67 


John Deere Water 

Leveraging our leadership in global agriculture to provide innovative and efficient agricultural 

water management solutions, and increase agricultural productivity 

� Innovative solutions 

� Efficient irrigation and water management 

� Superior channel partners 

� Integration of machinery and technology 

� Consistent application of the right amount of 

water at the right time 

� Enable increased yields and higher quality 

crops 

� Improve water use efficiency and reduce input 

costs 

� Partnering with our customers 

� Optimize operations and output 

� Enable good stewardship of water resources 

68 



Financial Services

John Deere Financial Services 

Supporting the Global Growth of Our Equipment Operations 

New locations announced: 

� China … began operations 4Q 2011 

� Russia … began operations 2Q 2012 

� Chile … operations expected to begin 2H 2012 

� India … operations expected to begin 2H 2012 

� Thailand … operations expected to begin 2H 2012 


70 


John Deere Financial Services 

$28.1 Billion Owned Portfolio at 31 October 2011 

Portfolio Composition by 

Market 

C&F 

13% 

Ag & Turf 

87% 

71 


Latin America 

6% 

Europe 

7% 

Canada 

12% 


Geography 

Australia 

3% 


Product 

Information above includes all Deere lending activities worldwide. John Deere Capital Corporation is the largest lending operation of Deere & Company. 

U.S. 

72% 

Leasing 

12% 

Wholesale / 

Floorplan 

21% 

Revolving Credit 

9% 

Installment 

Financing 

58%

John Deere Capital Corporation 

Profitability and Growth 

72 


271 275 

291 

Administered Portfolio Growth ($ Billions) 

16.4 

17.7 

18.6 19.0 19.1 19.3 

Net Income ($ Millions) 

311 

282 

149 

319 

364 

2004 2005 2006 2007 2008 2009 2010 2011 

21.1 

23.3 

2004 2005 2006 2007 2008 2009 2010 2011 

Write-offs/Average Owned Portfolio 

0.28% 0.16% 0.22% 0.29% 0.33% 

0.70% 

0.48% 

0.12% 

2004 2005 2006 2007 2008 2009 2010 2011

John Deere Capital Corporation Retail Notes 

60+ Days Past Due vs. Write-offs 

Agriculture & Turf 1 

3.95% 

3.45% 

2.95% 

2.45% 

1.95% 

1.45% 

0.95% 

0.45% 

-0.05% 

Extremely low write-offs; average less than 5 

bps over last 10 years 

Even in severe Ag market of the 1980s, losses 

were comparatively low 

'83 '86 '89 '92 '95 '98 '01 '04 '07 '10 

Net Write-offs (Ag) Installments 60+DPD (Ag) 

73 


Construction & Forestry 

3.95% 

3.45% 

2.95% 

2.45% 

1.95% 

1.45% 

0.95% 

0.45% 

The performance and quality 

of portfolio improved during 

2011 

-0.05% 

'95 '98 '01 '04 '07 '10 

Net Write-offs (C&F) Installments 60+DPD (C&F) 

(1) 1982 – 1985 includes Construction; 1986 - 1994 includes Lawn & Grounds Care; beginning in 2009 includes both Ag and Turf equipment; As % 

of Owned Losses After Dealer Reserve Charges 

Source: 1982 – 1994 internal reporting, 1995 - 2010 JDCC 10-K filings, 2011 Deere & Company 8-K filed with SEC 23 November 2011

U.S. Resale Value vs. Loan Balance 

7830 Tractor and 9670 Combine 

Resale Value as a % of Original List Price 

7830 Tractor (1) 

110% 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

Loan Balance 

0% 

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 

Time Since Origination 

Model Year 

2010 2009 2008 2007 2006 2005 

(1) Model 7810 was replaced with Model 7820 in 2004. In 2007 the 7830 series was introduced to the market. Loan balance assumes a 

30% down payment on the highest list price financed for 5 years with annual payments at a rate of 6.50%. 

(2) Model 9650 was replaced with Model 9660 in 2004. Model 9660 was subsequently replaced with Model 9670 in 2006. 

Loan balance assumes a 30% down payment on the highest list price financed for 5 years with annual payments at a rate of 6.50%. 

Source for equipment values: North American Equipment Dealers Association 

74 


9670 Combine (2) 

Resale Value as a % of Original List Price 

110% 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

Loan Balance 

0% 

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 

Time Since Origination 

Model Year 

2010 2009 2008 2007 2006 2005


Power Systems 

Engine Emissions and 

Technology

Tier 4 Engine Implementation 

Interim Tier 4 (IT4): 

50% Nitrogen Oxide (NOx) reduction 

90% Particulate Matter (PM) reduction 

Final Tier 4 

PM, g/kw-hr 

0.50 

0.40 

0.30 

0.20 

0.10 

76 


0 

Interim 

Tier 4 

Tier 3 

Tier 

2 

Final Tier 4 (FT4): 

Tier 1 

80% NOx reduction 

0 2.00 4.00 6.00 8.00 10.00 12.00 

NOx, g/kw-hr

Final Tier 4 

Continuing Our Planned Building-Block Approach 

Combines our customized selective catalytic reduction (SCR) system with our 

proven IT4 engine platform of cooled exhaust gas recirculation (EGR), diesel 

oxidation catalyst (DOC), and diesel particulate filter (DPF) 

An optimized solution – John Deere Integrated Emissions Control system 

– Meets Final Tier 4 emissions regulations 

– Uncompromised performance: power, torque, and responsiveness 

A fluid-efficient solution - maximum total fluid economy, not just fuel economy 

– Leverages the proven fuel efficiency of our PowerTech Plus engine platform 

– Low diesel exhaust fluid (DEF) dosing rates 

– Operate efficiently with low-sulfur diesel and B5-B20 blends 

A field-proven solution 

– Since 2005, our cooled EGR engines have a proven record of performance and durability 

– More than 5 million customer operating hours with our smart exhaust filter technology 

– Dedicated in-house aftertreatment team customizing our own SCR system 

An integrated vehicle solution 

– We design, manufacture, and service the engine, drivetrain, hydraulics, cooling, and electrical 

systems 

A fully supported solution 

– John Deere’s proven worldwide dealer network is highly trained to provide service and support 

as well as increase productivity, reliability, and utilization of Deere machines 

77 


Farm Fundamentals

U.S. Farm Cash Receipts 

Operating Cash Receipts and Government Payments 

$ Billions 

Total cash receipts remain at historically high levels 

Record levels expected for 2011 

$400 

$350 

$300 

$250 

$200 

$150 

$100 

$50 

$0 

79 


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 

Source: 1998 – 2010: USDA 13 February 2012 

2011F – 2012F: Deere & Company Forecast as of 16 May 2012 

Government Payments Total Cash Receipts

U.S. Farm Balance Sheet Strong 

$ Billions 

$2,500 

$2,000 

$1,500 

$1,000 

$500 

$0 

1970 

1971 

1972 

1973 

1974 

1975 

1976 

1977 

1978 

1979 

1980 

1981 

1982 

1983 

1984 

1985 

1986 

1987 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011F 

2012F 

Farm Debt Farm Equity Debt to Equity Ratio (%) Debt to Asset Ratio (%) 

Source: 1970 – 2010: USDA 13 February 2012 

2011F – 2012F: Deere & Company Forecast as of 16 May 2012 

80 


30% 

28% 

26% 

24% 

22% 

20% 

18% 

16% 

14% 

12% 

10%

Corn, Soybeans, Wheat and Cotton Prices 

Nearby Futures: 7 May 2007 – 7 May 2012 

Dollars Per Bushel 

Dollars per Bushel 

9.00 

8.00 

7.00 

6.00 

5.00 

4.00 

3.00 

2.00 

Corn 

1.00 

5/7/07 5/7/08 5/7/09 5/7/10 5/7/11 5/7/12 

14.00 

12.00 

10.00 

8.00 

6.00 

4.00 

Wheat 

2.00 

5/7/07 5/7/08 5/7/09 5/7/10 5/7/11 5/7/12 

Source: Chicago Board of Trade – Corn, Soybeans & Wheat; Intercontinental Exchange – Cotton 

81 


Dollars per Bushel 

Dollars per Pound 

18.00 

16.00 

14.00 

12.00 

10.00 

8.00 

6.00 

Soybeans 

4.00 

5/7/07 5/7/08 5/7/09 5/7/10 5/7/11 5/7/12 

2.25 

2.00 

1.75 

1.50 

1.25 

1.00 

0.75 

0.50 

Cotton 

0.25 

5/7/07 5/7/08 5/7/09 5/7/10 5/7/11 5/7/12

Agricultural Growth – Energy 

2007 U.S. Energy Bill 

Significantly expanded mandatory levels of renewable fuels 

Gallons (billions) 

40 

35 

30 

25 

20 

15 

10 

5 

0 

Source: Energy Independence and Security Act of 2007 

82 


2008 2010 2012 2014 2016 2018 2020 2022 

Corn-Based Starch Ethanol Advanced Biofuels

Uses of U.S. Corn Crop 2010-2021 

Bushels (millions) 

Source: USDA Agricultural Projections to 2021, February 2012 

83 

25,000 

20,000 

15,000 

10,000 

5,000 

0 

Feed & residual Ethanol & By-Products for fuel 

Food, Seed, & Industrial (Less Ethanol) Exports 

Ethanol & By-Products for Fuel as % of Total Corn Usage 


41.0% 

38.0% 

35.0% 

32.0% 

29.0% 

26.0% 

23.0% 

20.0%

World Farm Fundamentals 

Global Stocks-To-Use Ratios 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

1992 

Source: USDA - 10 May 2012 

1993 

1994 

1995 


1996 

1997 

1998 

Cotton 

Wheat 

Corn 

Soybeans 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011E 

2012P

Agricultural Growth – Energy 

U.S. Ethanol 

Source: Informa – April 2012 

85 

Bushels (millions) 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 


0 

U.S. Corn Used In Ethanol 

99/00 01/02 03/04 05/06 07/08 09/10F 11/12F 13/14F 15/16F

Daily Ethanol Margin Per Bushel Corn Grind 

Based on Nearby Futures Prices (Excl ITDA*) 

$3.00 

$2.50 

$2.00 

$1.50 

$1.00 

$0.50 

$0.00 

($0.50) 

5/7/08 

8/7/08 

11/7/08 

2/7/09 

*Interest, Tax, Depreciation and Amortization (ITDA) totals ~$0.50 and is often disregarded in margin calculations because it does not influence short 

term production decisions 

Source: Informa – May 2012 

86 


5/7/09 

8/7/09 

11/7/09 

2/7/10 

5/7/10 

8/7/10 

11/7/10 

2/7/11 

5/7/11 

8/7/11 

11/7/11 

2/7/12 

5/7/12

Market and Currency 

Volatility

Volatility / Uncertainty Metrics 

Updated as of 15 May 2012 

Percentage Points 

Spread over Treasuries (bps) 

100 

75 

50 

25 

400 

300 

200 

100 

VIX 

(Chicago Board Options Exchange Market Volatility Index) 


Sep 08-Dec 09 Avg.: 36 

Credit Crisis Peak: 81 

Rolling 12 Mo Avg.: 24 

Rolling 12 Mo Peak: 48 

15 May 12: 22 

0 

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 

'A' Industrial Index 3-Year Spread 

Sep 08-Dec 09 Avg.: 209 




15 May 12: 52 

0 


Spread over T-Bill (bps) 

Basis Points 

500 

375 

250 

125 

TED Spread 

(Spread differential between 3M LIBOR and 3M T-Bill) 

Sep 08-Dec 09 Avg.: 98 




15 May 12: 38 

0 


1,200 

900 

600 

300 

GECC 5 Yr CDS 

Sep 08-Dec 09 Avg.: 411 

Credit Crisis Peak: 1,000 



15 May 12: 168 

0 

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Currency Movement Post Credit Crisis 

Stronger FC Indexed Value Weaker FC 

135 

125 

115 

105 

95 

85 

75 

65 

FY 2007 


FY 2008 FY 2009 FY 2010 FY 2011 

EUR 

GBP 

AUD 

JPY 

CAD 

BRL

Appendix

Enterprise SVA Reconciliation to GAAP 

(millions of dollars unless stated otherwise) 

Equipment Operations 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Net Sales 

Average Identifiable Assets 

11,077 11,703 13,349 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 

With Inventories at LIFO 8,743 6,229 5,965 6,482 7,248 7,546 8,092 9,652 9,647 9,196 11,516 

With Inventories at Standard Cost 9,678 7,147 6,925 7,477 8,312 8,634 9,205 10,812 10,950 10,494 12,875 

Operating Profit (46) 401 708 1,905 1,842 1,905 2,318 2,927 1,365 2,909 3,839 

Percent of Net Sales 

Operating Return on Assets 

-0.4% 3.4% 5.3% 10.8% 9.5% 9.6% 10.8% 11.3% 6.6% 12.3% 13.0% 

With Inventories at LIFO -0.5% 6.4% 11.9% 29.4% 25.4% 25.2% 28.6% 30.3% 14.1% 31.6% 33.3% 

With Inventories at Standard Cost -0.5% 5.6% 10.2% 25.5% 22.2% 22.1% 25.2% 27.1% 12.5% 27.7% 29.8% 

SVA Cost of Assets (1,162) (858) (831) (897) (998) (1,036) (1,094) (1,284) (1,301) (1,259) (1,545) 

Equipment Operations SVA (1,208) (457) (123) 1,008 844 869 1,224 1,643 64 1,650 2,294 

Financial Services 

Net Income 262 330 309 345 584 364 337 203 373 471 

Average Equity 2,115 2,177 2,265 2,227 2,466 2,524 2,355 2,732 3,064 3,194 

Return on Equity 12.40% 15.20% 13.60% 15.50% 23.70% 14.40% 14.30% 7.40% 12.20% 14.70% 

Operating Profit Continuing 416 504 466 491 521 553 493 242 499 725 

Change in Allowance for Doubtful Receivables 16 17 -8 -12 15 17 -4 68 -14 - 

SVA Income Continuing 432 521 458 479 536 570 489 310 485 725 

Average Equity Continuing Operations 2,115 2,177 2,163 2,110 2,424 2,524 2,355 2,732 3,064 3,194 

Average Allowance for Doubtful Receivables 161 160 165 150 148 167 183 195 232 - 

SVA Average Equity 2,276 2,337 2,328 2,260 2,572 2,691 2,538 2,927 3,296 3,194 

Cost of Equity -437 -431 -414 -410 -457 -480 -430 -458 -420 -492 

SVA Continuing Operations 44 69 79 90 59 -148 65 233 

SVA Discontinued Operations -11 25 - - - - - - 

Financial Services SVA (5) 90 44 69 79 90 59 (148) 65 233 

Deere & Company - Enterprise SVA (462) 

91 


(33) 

1,052 

913 

948 

1,314 

1,702 

(84) 

1,715 

2,527

Equipment Ops SVA Reconciliation to GAAP 


Equipment Operations 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 

Net Sales 


5,848 5,723 6,479 7,663 8,830 9,640 11,082 11,926 9,701 11,169 11,077 

With Inventories at LIFO 5,585 5,765 5,449 5,551 6,187 6,502 6,682 7,672 7,724 8,069 8,743 

With Inventories at Standard Cost 6,702 6,846 6,442 6,494 7,131 7,488 7,703 8,711 8,739 9,039 9,678 

Operating Profit 16 77 242 847 1,006 1,125 1,402 1,476 272 693 (46) 



0.3% 1.3% 3.7% 11.1% 11.4% 11.7% 12.6% 12.4% 2.8% 6.2% -0.4% 

With Inventories at LIFO 0.3% 1.3% 4.4% 15.3% 16.3% 17.3% 21.0% 19.3% 3.5% 8.6% -0.5% 

With Inventories at Standard Cost 0.2% 1.1% 3.8% 13.0% 14.1% 15.0% 18.2% 16.9% 3.1% 7.7% -0.5% 

SVA Cost of Assets (804) (821) (773) (780) (856) (898) (924) (1,045) (1,049) (1,085) (1,162) 

SVA (788) (744) (531) 67 150 227 477 431 (776) (392) (1,208) 

Equipment Operations 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

Net Sales 


11,703 13,349 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 

With Inventories at LIFO 6,229 5,965 6,482 7,248 7,546 8,092 9,652 9,647 9,196 11,516 

With Inventories at Standard Cost 7,147 6,925 7,477 8,312 8,634 9,205 10,812 10,950 10,494 12,875 

Operating Profit 401 708 1,905 1,842 1,905 2,318 2,927 1,365 2,909 3,839 



3.4% 5.3% 10.8% 9.5% 9.6% 10.8% 11.3% 6.6% 12.3% 13.0% 

With Inventories at LIFO 6.4% 11.9% 29.4% 25.4% 25.2% 28.6% 30.3% 14.1% 31.6% 33.3% 

With Inventories at Standard Cost 5.6% 10.2% 25.5% 22.2% 22.1% 25.2% 27.1% 12.5% 27.7% 29.8% 

SVA Cost of Assets (858) (831) (897) (998) (1,036) (1,094) (1,284) (1,301) (1,259) (1,545) 

SVA (457) (123) 1,008 844 869 1,224 1,643 64 1,650 2,294 

92 


2009 OROA Reconciliation to GAAP 



2009, as 

Exclude Goodwill 

Impairment & 

Voluntary Employee- 2009, as 


Reported Separation Adjusted 

Net Sales 


20,756 

20,756 

With Inventories at LIFO 9,647 

9,647 

With Inventories at Standard Cost 10,950 

10,950 

Operating Profit 1,365 

380 1,745 



6.6% 8.4% 

With Inventories at LIFO 14.1% 18.1% 

With Inventories at Standard Cost 12.5% 15.9% 

93

Deere & Company Investor Relations - John Deere

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