deere & company investor relations current tractor facility in pune ... from india for past 7...

John Deere Committed to Those Linked to the Land

Deere & Company December 2011 / January 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 (23 November 2011). 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 | December 2011 / January 2012

|

Table of Contents

Slide #

John Deere Strategy 4

Feet on the Ground 5

Eyes on the Horizon 9

John Deere Strategy Detail 19

Macroeconomic Tailwinds 36

Foundational Success Factors 44

Global Markets and Opportunities 56

John Deere Financial Services 77

John Deere Power Systems 82

Farm Fundamentals 85

Market and Currency Volatility 94

Appendix 97


| 4 Deere & Company | December 2011 / January 2012

Feet on the Ground

|

Feet on the Ground Fiscal Year 2011 Results – Equipment Operations

Exceptional results • Record net sales … ~ $29.5 billion

• Record net income … $2.8 billion

• 13% operating profit margin

• Cash flows from operations … $3.0 billion


|

Investments in the business and capital returned to shareholders • New factories … six announced

• New products … largest introductions ever in Europe and the U.S.

• Capex and R&D … ~ $2.3 billion

• Operating cash flow returned to shareholders … ~ 70% • Quarterly dividend … increased twice to $.41 per share (+37%)

• Share repurchase … ~ 20.8 million shares

Feet on the Ground Fiscal Year 2011 Results – Equipment Operations


|

Feet on the Ground Fiscal Year 2012 Outlook – Equipment Operations

Strong company outlook • Net sales up ~ 15% vs. FY 2011

• Net income … ~ $3.2 billion

• Strong operating profit margins

• Cash flows from operations … ~ $3.6 billion

Investing in the business and returning capital to shareholders • Capex $1.2 to $1.3 billion

• R&D up ~ 10%

• Maintain dividend targets and share repurchase objectives

Deere & Company Forecast as of 23 November 2011


Eyes on the Horizon

|

• 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

Eyes on the Horizon EU 27 – Recent Announcements

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


|

Eyes on the Horizon Brazil – Recent Announcements

• 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


1 Carta da Anfavea, November 2011

• 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 20111


|

Eyes on the Horizon CIS – Recent Announcements

• 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


|

• 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

• Backhoes

• Four-wheel-drive loaders

• Production commenced in 2011

• September 2010 – New combine factory in Sirhind


• John Deere has been the largest exporter of tractors from India for past 7 years

Eyes on the Horizon India – Recent Announcements



|

Eyes on the Horizon China – Recent Announcements


Construction Equipment (New)

Engines (New)

Product Test (PV&V)

Office (New)

Tianjin Economic and Development Area (TEDA) Site

Drivetrain

• 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


• December 2010 – New construction equipment factory in Tianjin




|

Eyes on the Horizon U.S. and Canada – Recent Announcements

• August 2011 – Largest, most significant product introduction in the company’s history

• May 2011 – 8335R tractor differentiating through technology

• Single fluid, EGR iT4 engine design validated

• Better fuel efficiency than 8430 and 8320R

• First row-crop tractor to break through 300 PTO hp barrier

• Factory installed JDLinkTM to help increase customer profitability

John Deere 8335R: Nebraska OECD Tractor Test 1990—Summary 758 John Deere 8320R: Nebraska OECD Tractor Test 1963—Summary 660 John Deere 8430: Nebraska OECD Tractor Test 1873—Summary 527 PTO – Power Take-Off


|

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

Eyes on the Horizon John Deere FarmSightTM


|

Eyes on the Horizon Financial Services


New locations announced: ● China … began operations 4Q 2011 ● Russia … operations expected to begin 1H 2012

● Chile … operations expected to begin 1H 2012

● India … operations expected to begin 2H 2012

● Thailand … operations expected to begin 2H 2012

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

Eyes on the Horizon Worldwide Parts Services


Supporting the Global Growth of Our Equipment Operations

3 largest Parts Distribution Centers Other Parts Distribution locations


John Deere Strategy Detail

|

The John Deere Strategy – In Summary

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


|

The John Deere Strategy Our Purpose: Committed to those linked to the land

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


|

Our Aspirations Realizing Sustainable SVA Growth Through Global Expansion

Sustainable SVA Growth

–Distinctively serve our customers, employees and investors

–Extend and enhance our financial and operating achievements of recent years


|

Our Aspirations Realizing Sustainable SVA Growth Through Global Expansion

Global Expansion

–Attract more customers to the John Deere Experience across our six key geographies (U.S. & Canada, EU 27, Brazil, CIS/Russia, India, China) in a manner that meets local needs while leveraging our global scale

2010 Normal Volume ~ $25 billion

2018 Normal Volume ~ $50 billion

U.S. - Canada BRIC Rest of World


|

Global Growth Businesses

–Invest in global expansion for profitable growth by capitalizing on macro-trends

Agricultural Equipment Solutions Construction Equipment Solutions

Integrated Enterprise Leveraging Our Strengths and Unique Capabilities


|

Complementary Businesses

–Defend and grow share, enhance SVA, strengthen the channel of the Global Growth Businesses


Turf Equipment Solutions Forestry Equipment Solutions


|

Supporting Businesses

–Strengthen and further differentiate our Global Growth and Complementary Businesses

John Deere Financial Services

John Deere Power Systems

Worldwide Parts Services

Intelligent Solutions Group



|

Critical Success Factors Developing the Capabilities Essential to Reaching Our Goals

Needed to serve a diverse set of global customers more effectively

Deep Customer Understanding (DCU) – Understanding our customers’ most important local

needs

Deliver Customer Value (DCV) – Profitably translating our customers’ needs into

products and services at prices our customers are willing to pay

World-Class Distribution System – Developing world-class channels of dealers, aligned

with John Deere and achieving market preeminence

Grow Extraordinary Talent – Extraordinary leaders and engaged employees

delivering aligned high-performance teamwork globally


|

*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.

Foundational Success Factors Building on Our Core Strengths

Exceptional Operating Performance - Equipment Operations

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

12%

20%

28%

2001

2002

2003

2004

2005 2006

2007 2008

2009

2009, adjusted*

2010

2011

0%

5%

10%

15%

20%

25%

30%

35%

% of Normal Volume

80% Low

100% Normal

120% High

12% OROA (SVA Neutral)


|

Exceptional Operating Performance - Equipment Operations

− SVA Model: Higher Net Cash Flow, More Consistently


0

500

1,000

1,500

2,000

2,500

3,000

3,500

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

$ M

illio

ns

Sale of Trade Receivables to Credit

Adoption of SVA Model

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


|

SVA (

$ m

illio

ns)

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


Disciplined SVA Growth - Equipment Operations

− SVA Journey, 1991 - 2011

-1,600

-1,200

-800

-400

0

400

800

1,200

1,600

2,000

2,400

2,800

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


|

SVA (

$ m

illio

ns)

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


Disciplined SVA Growth - Enterprise

− SVA Journey, 2002 - 2011

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

-800

-400

0

400

800

1,200

1,600

2,000

2,400

2,800

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


|

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)



|

Commitment to execute and monitor all initiatives critical to our success

Performance metrics

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

Measures Delivering Results Today While Building for the Future

Performance 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%


|

Health Measures Metric Target

Exceptional Operating Performance Quality % JDQPS certification

Disciplined SVA Growth Sales/SVA Mix by Geography % Non- U.S. & Canada

Aligned High- Performance Teamwork Employee Engagement Employee Survey’s

Engagement Index

Measures Delivering Results Today While Building for the Future

Commitment to execute and monitor all initiatives critical to our success

Health metrics

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


|

Since 1837, the company has delivered innovative products of superior quality built on a tradition of commitment and integrity

–How we do business is critical to our continued success

–Integrity

–Quality

–Commitment

–Innovation

John Deere Values Unwavering Adherence to Our Values


Macroeconomic Tailwinds Support John Deere’s Global Growth Businesses

|

Population and Income Growth

Most of population growth through 2050 in Asia and Africa • By 2050, world population will reach 9 billion, increasing from

6.3 billion today

• Aging population in North America, modest growth

• Shrinking and aging population in Europe

Large middle-class developing in China and India • 200 million households expected to join the middle class

Source: FAO, How to Feed the World 2050 and OECD Working Paper No. 285


|

Challenges from Population and Income Growth

Feeding the world – agricultural output must double by 2050

• Gross output must increase @ 3.4% annually in next 10 years vs. 2.4% annual growth in past 10 years

• Natural resources under strain, especially water

Massive urbanization – migration from rural areas creates need for roads, power grids, water containment and distribution systems

• 2010 milestone: For first time, more than half the world population lives in cities

• 2050: More than 70 percent will live in cities

Source: FAO, How to Feed the World 2050


|

17%

24%

26%

34%

34%

36%

36%

39%

46%

49%

58%

58%

61%

71%

71%

Health and Social Services

Real Estate and Business Activities

Social and Personal Services

Hotels and Restaurants

Education

Public Administration and Defense, Compulsory Social Security

Financial Intermediation

Wholesale and Retail Trade

Construction

Transport, Storage and Telecommunication

Utilities

Manufacturing

Mining

Agriculture

Private Household Services

88

289

321

331

351

381

462

575

647

757

1,052

1,315

1,805

2,301

Private Household Services

Hotels and Restaurants

Mining

Utilities

Social and Personal Services

Agriculture

Education

Public Administration and Defense, Compulsory Social Security

Health and Social Services

Construction

Financial Intermediation

Transport, Storage and Telecommunication

Wholesale and Retail Trade

Real Estate and Business Activities

Manufacturing

Sector

Agriculture and Construction amongst the Top 10 industry sectors in the G-20 countries . . .

Absolute increase in real value added 2009-18, $ Billions

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

Share of growth from BRIC1 Sector

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

1Brazil, Russia, India, China

Source: Global Insight World Industry Service Real value-added 2005 USD

Strong Global Tailwinds in Ag & Construction Significant Growth from Developing Economies

3,625


|

Developing Economies Growing Faster

While developed economies have always accounted for a larger share of GDP . . .

10.022.9

34.6

1.3

12.0

28.1

1990

5.2

11.3

1970

46.6

3.8

2008

Real GDP1

$ Trillions

6.1

CAGR, 1970-2008 Percent

3.3

34.6 43.062.0

12.0

3.0

2039 2020 2008

65.5

115.3

53.3

22.5 46.6

Real GDP1

$ Trillions

4.9

CAGR, 2008-2039 Percent

... their growth will slow significantly, relative to that of developing economies

1 Real GDP (expenditure method) base year 2005

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

1.9x 2.6x

1.9

Developing Developed

Source: Global Insight World Market Monitor


|

Dynamics of Food Demand

Source: World Bank 2008

>$10 per day

27% of world’s population (Most hunger problems solved at

$2.50 threshold)

Services

Processed Products

Livestock Products

Commodities

Per Capita Income

20% of world’s population (2/3rds experience hunger &

malnutrition)

$2.50-10 per day

$1.25-2.50 per day

<$1.25 per day


http://en.wikipedia.org/wiki/Image:Pudliszki-wyroby.jpg�

|

Global Construction and Infrastructure Needs

2,266

2,356

1,888

6,509

2008

2,998

3,555

3,361

9,915

2020

3.6%

Infrastructure is expected to be the fastest growing segment of construction

Estimated gross spending as a percent of 2008 global GDP

2.4

3.5

4.9

Residential Non-residential Infrastructure

CAGR 2008-2020 Percent

WW Construction spending Gross output, $ 2008 Billions

Construction 12%

Mining & Quarrying 7% Ag, Hunting,

Forestry & Fishing 7%

All Other 74%

*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


|

Infrastructure

Non-residential

Residential

All Construction

Construction spending 2020 absolute, Top 10 (Billions of 2009 $s)

2,049

1,508

751

592

432

365

302

299

267

257

China

U.S. & Canada

India

Japan

U.K.

France

Germany

Brazil

Russia

Italy

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

Construction spending 2010-2020 change, Top 10 (Billions of 2009 $s)

1,128

534

437

168

106

103

95

92

60

57

China

U.S. & Canada

India

Brazil

Russia

U.K.

Japan

Indonesia

Mexico

Korea

Infrastructure

Non-residential

Residential

All Construction

Global Construction Spending in 2020 Concentrated in a Small Number of Markets

Source: IHS Global Insight, Deere Analysis, August 2011


Foundational Success Factors Building on Core Strengths That Have Guided Our Success

|

Asset Management Dramatic Reduction in Asset Intensity

20%

25%

30%

35%

40%

45%

50%

55%

60%

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

Prior Year

Current Year

Trade Receivables and Net Sales

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Trade Receivables Net Sales

$ M

illio

ns

1997 2011

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

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

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


|

Productivity Improvement ~ 6% CAGR over 30 Years

• Deere’s net sales and revenues per employee have increased at a CAGR of ~ 6% over last 30 years

Net Sales and Revenues per Employee

$0

$100

$200

$300

$400

$500

$600

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

$ T

hou

sands


|

Manufacturing Efficiencies – Waterloo, IA Journey to a 6-Day Drive Train

Product

ion D

ays

0

5

10

15

20

25

30

35

40

45

50

Prior to 2005 2005 2006 2007 2008

Relocation of 412 machines Eliminated 155 machines

Total evacuation of multi-story buildings New heat treat fully operational Set-up improvement On-site forging storage Insourcing of core processes

Machining departments based on part families Arranged machines using cellular concepts Started evacuation of multi-story buildings

Run size optimization and set-up improvement

Daily run size parameters Outsourcing non-core

processes

-12 Days

-2 Days

-10 Days

-14 Days


|

Investment in New Products and Technologies

R&D as Percent of Net Sales

Source: Deere & Company and competitor SEC filings

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

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

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


|

Net Sales by Product Category Equipment Operations - Fiscal Year 2011

Agriculture & Turf Construction & Forestry

Construction

Forestry

CWP Other

Large Ag

Small Ag

Turf

Other


|

Committed Bank Group Supports Credit Facility

• Average length of continuous relationship = ~29 Years

• $5.00 billion credit facility supporting commercial paper – $2.75 billion 49-month facility expiring in 2015 – $1.50 billion 37-month facility expiring in 2013 – $750 million 364-day facility expiring in 2012 – Have not drawn on facility – $3.7 billion incremental capacity as of 31 October 2011

Credit Facility Size & Commercial Paper Outstanding

$ M

illio

ns

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

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

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

Committed to “A” Rating

Cash from Operations

Fund Operating and Growth Needs

Common Stock Dividend

Share Repurchase

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 31 October 2011

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

FY 2012 1Q 2Q 3Q 4Q

$ M

illio

ns

USD CAD

1Q


|

Share Repurchase As Part of Publicly Announced Plans

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

Cumulative cost of repurchases 2004-2011: ~ $7.6 billion Amount remaining on May 2008 authorization of $5 billion: ~ $4.1 billion 31 October 2011 period ended shares (basic): ~ 406.1 million (diluted): ~ 409.9 million Shares repurchased 2004-2011: ~ 140.5 million Average repurchase price 2004-2011: $54.04

* 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 2004-2011


|

$0.11

$0.14 $0.16

$0.20 $0.22

$0.25

$0.28 $0.30

$0.35

$0.41

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

'03 Q

1

Q2

Q3

Q4

'04 Q

1

Q2

Q3

Q4

'05 Q

1

Q2

Q3

Q4

'06 Q

1

Q2

Q3

Q4

'07 Q

1

Q2

Q3

Q4

'08 Q

1

Q2

Q3

Q4

'09 Q

1

Q2

Q3

Q4

'10 Q

1

Q2

Q3

Q4

'11 Q

1

Q2

Q3

Q4

Deere Quarterly Dividends Declared* Q1 2003 – Q4 2011

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


|

Sources and Uses of Cash Fiscal 2004 - 2011 Equipment Operations

(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

$4,287

$16,378

$5,214

$748

$638

$2,411

$3,270

$6,194

$278

$0

$3,000

$6,000

$9,000

$12,000

$15,000

$18,000

$21,000

Beginning Cash & Cash Equivalents (10/31/03)

Cash From Operations

Capital Expenditures

Investment in Financial Services

Divestitures, net of

Acquisitions

Net Change in Debt and

Intercompany Balances

Dividends Share Repurchase,

net of Common

Stock Issuances

Other Ending Cash & Cash

Equivalents (10/31/11)

~58% of cash from operations returned to shareholders

(1)

$ M

illio

ns

$3,188


Global Markets and Opportunities

|

Growing Global Presence

• FY 2011 equipment net sales outside U.S. & Canada over 4x the level in FY 2000

20%

25%

30%

35%

40%

45%

50%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

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

• FY 2011 equipment net sales outside U.S. & Canada over 4x the level in FY 2000

$ M

illio

ns

Net Sales Outside U.S. and Canada

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


|

Net Sales by Major Markets Fiscal Years 2011, 2010, 2009, 2008

(in millions of dollars) 2011 2010 %

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


|

EU 27 Factory Locations

Joensuu, Finland • Wheel Forwarders • Wheel Harvesters • Forestry Attachments

Bruchsal, Germany • Tractor & Combine Cabs

Mannheim, Germany • Tractors

Zweibrücken, Germany • Combine & Forage Harvesters • Material Handling Equipment

Arc-les-Gray, France • Forage Equipment • Balers • Material Handling Equipment

Saran, France • Engines

Madrid, Spain • Components

Horst, The Netherlands • Spraying Equipment

Stadtlohn, Germany • Forage Harvesters • Headers

Gummersbach, Germany • Walk-Behind Mowers


|

EU 27 Economic Data

PPP: Purchasing Power Parity Source: FAO, Global Insight, The World Factbook

1.8%

25.0%

73.2%

GDP Composition

Agriculture Industry Services

Source: The World Factbook, 2010 est.

5.6%

27.7%

66.7%

Labor Composition



Production Net Exports

Total Grains 16% 7% Wheat 21% 13% Beef Meat 14% 23% Pork Meat 22% 28% Cow Milk 27% 25%

Source: USDA, 2010

• General (2010) • Population ~ 516 million

• GDP (PPP) ~ $13.77 trillion

• Top four economies based on GDP:

• Germany, UK, France, Italy

• Agricultural (2009) • 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:


|

EU 27 Economic Update

• Farm income projected stable in 2012 at high 2011 levels • Grain, beef, and milk prices remain at attractive levels

• Pork prices increasing

• Demand for agricultural machinery expected to be stable • Low levels of used equipment

• Sovereign debt and fiscal issues create potential downside economic risk and consumer caution



|

0

10

20

30

40

50

60

70

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

EUR

bn

(nom

inal

pric

es)

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

2007-2013 2014-2020

EU 27 Government Support of Agriculture

• Common Agricultural Policy proposed budget 2014-2020 frozen at 2007-2013 nominal levels • Rules generally known, eliminating uncertainty

• Redistribution of direct payments in favor of new member states

Source: EU Commission, Agra Europe


|

Brazil Factory Locations

São Paulo, Brazil (JV) • Sugarcane Equipment

Catalão, Brazil • Sugarcane Harvesters • Sprayers (planned)

Montenegro, Brazil • Tractors

Horizontina, Brazil • Combine Harvesters • Planters

Indaiatuba, Brazil (under construction)

• Backhoe Loaders • 4WD Loaders

Indaiatuba, Brazil (JV) (under construction)

• Excavators



|

Brazil Economic Data



• Top four cities based on population:

• São Paulo, Rio de Janeiro, Salvador and Brasília

• Agricultural • 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 over the next decade

5.8%

26.8%

67.4%

GDP Composition


Source: Brazilian Institute of Geography and Statistics (IBGE), 2010

18%

24% 58%

Labor Composition


Source: Brazilian Institute of Applied Economic Research (IPEA), 2008

PPP: Purchasing Power Parity Source: Brazilian Institute of Geography and Statistics (IBGE), The World Fact Book Deere & Company Forecast as of 23 November 2011


|

Brazil (in billions of U.S. dollars) 2010

Previous 2010

2011 Forecast

Previous 2011

2012 Forecast

Previous 2012

Soybeans 4.5 4.5 13.8 5.2 8.4 5.4

Sugarcane 9.1 10.3 10.4 11.3 9.8 12.0

Other* 0.7 0.6 4.2 3.7 (1.0) 3.6

Total 14.3 15.4 28.4 20.2 17.2 21.0

Argentina (in billions of U.S. dollars) 2010

Previous 2010

2011 Forecast

Previous 2011

2012 Forecast

Previous 2012

Total 6.1 6.1 9.3 8.0 6.4 8.4

* Includes corn, paddy rice, and cotton

Brazil and Argentina Farm Net Income

Deere & Company Forecast as of 23 November 2011 (Previous Forecast as of 17 August 2011)


|

• 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

Brazil Government Support of Agriculture

Tractor

Programs 1

Engine

hp Where

Interest

Rate

Grace

Period (Max) Term Maturity

Mais Alimentos

Pró-Trator

Trator Solidário

50-78

50-120

50-80

Brazil

SP

PR

2%

0%

5.5%

3 Years

2

2

10

5

5

Perennial

Dec11

Dec14

Finame PSI

Moderfrota

All

All

Brazil

Brazil

6.5% to 8.7%2

7.5%/9.5%3

2

1.5

10

2-84

Dec12

Jun12

1 Exclusively Finame qualified products. Minimum of 60% local content (weight and value). 2 6.5% if annual gross revenue < R$90 million, 8.7% other farmers

3 7.5% if annual gross revenue < R$500 thousand and 80% of income from agriculture related activities. 9.5% all other farmers 4Depending if used or new equipment

Combine

Programs 1 Class Where

Interest

Rate

Grace

Period (Max) Term Maturity

Mais Alimentos IV Brazil 2% 3 Years 10 Perennial

Finame PSI

Moderfrota

All

All

Brazil

Brazil

6.5% to 8.7%2

7.5%/9.5%3

2

1.5

Up to 10

2-84

Dec12

Jun12


|

CIS Factory Locations

Orenburg, Russia • Seeding Equipment • Tillage Equipment (planned) • Spraying Equipment (planned)

Domodedovo, Russia • Tractors • Combine Harvesters • Log Forwarders (planned) • Combine Front-End Equipment (planned)



|

CIS Economic Data



• Top four economies based on GDP:

• Russia, Ukraine, Kazakhstan and Belarus

• Agricultural (2009) • Utilized agricultural area ~ 560 million hectares

• Arable land ~ 196 million hectares

• Deere estimates “western-style” equipment used <25% of farmed hectares


PPP: Purchasing Power Parity Source: FAO, Global Insight, The World Factbook Deere & Company Forecast as of 23 November 2011

4.0%

36.8%

59.2%

GDP Composition



10.0%

31.9% 58.1%

Labor Composition




Total Grains 8% 7% Wheat 13% 7% Barley 17% 23% Rapeseed 4% 14% Sunflower 43% 17%

Source: USDA, 2010

(Russia)

(Russia)


|

CIS Government Support of Agriculture

• Export barriers lifted • Russian grain export ban ended in July

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

• Annual Ag support in the Russian National Ag Program for 2013 - 2020 expected to more than double by 2020 in nominal terms

• 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


|

India Factory Locations

Gummidipoondi, India (JV) • Side-Shift Backhoes • 4WD Loaders

Pune, India • Engines • Transmissions • Tractors

Sirhind, India (under construction)

• Combine Harvesters

Dewas, India (under construction) • Tractors



|

India Economic Data

• General • Population ~ 1.189 billion (July 2011 est.)

• GDP (PPP) ~ $1.538 trillion (2010 est.)

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

• Mumbai, Delhi, Bangalore and Hyderabad

• Agricultural • Total land area ~ 2.9 million sq km

• Arable land ~ 1.5 million sq km (2005 est.) • Annual industry tractor sales >500,000 units

• Strong momentum with good production and high commodity prices

• Increased credit availability in the agricultural sector

• Infrastructure investment projected to be ~ 9% of GDP by 2012 (~5% in 2007)

18.9%

18.2% 62.8%

GDP Composition


Source: IHS Global Insight, 2010 est.

52.0%

14.0%

34.0%

Labor Composition



PPP: Purchasing Power Parity Source: The World Fact Book, Censusindia, Tractor Manufacturers Association of India


| Deere & Company | December 2011 / January 2012 72

India Government Support of Agriculture

159

185

262

325

766

530

550

500

258

231

240

313

438

560

606

606

123

143

170

195

237

180

194

197

207

275

36

56

48

151

332

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

2004

2005

2006

2007

2008

2009

2010F

2011F

Rupees (in billions)

Fertilizer Subsidy

Food Subsidy (for households)

Irrigation Subsidy

Electricity Subsidy

Other Subsidies (mainly for seeds)

Source: India Ministry of Agriculture (2004-2009), India Ministry of Finance (2010-2011)

756

809

917

1,191

2,048

1,090

1,156

1,106

|

China Factory Locations

Xuzhou, China (JV) • Excavators

Ningbo, China • Tractors • Combine Harvesters

Tianjin, China (JV) • Tractors

Tianjin (TEDA), China • Transmissions

Jiamusi, Brazil • Combine Harvesters • Corn Pickers

Harbin, China (under construction)

• Combine Front-End Equipment • Tractors • Planters • Sprayers • Irrigation Products

Tianjin (TEDA), China (under construction)

• 4WD Loaders • Excavators

Tianjin (TEDA), China (under construction)

• Engines



|

China Economic Data

• General • Population ~ 1.337 billion (July 2011 est.)

• GDP (PPP) ~ $10.09 trillion (2010 est.)

• Top four cities based on population (2009):

• Shanghai, Beijing, Chongqing and Shenzhen

• Agricultural • Total land area ~ 9.6 million sq km

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


10.2%

46.8%

43.0%

GDP Composition



38.1%

27.8%

34.1%

Labor Composition



PPP: Purchasing Power Parity Source: The World Factbook, USDA 2010


Total Grains 17% 0% Wheat 18% 7% Corn 21% 0% Rice 30% 0% Cotton 26% 0%


|

Source: China Ministry of Agriculture

China Government Support of Agriculture

12

28

72

75

72

86

12

13

14

15

15

19

15

15

3

4

4

7

12

20

20

22

1

2

4

13

16

18

0 25 50 75 100 125 150 175

2004

2005

2006

2007

2008

2009

2010

2011F

RMB (in billions)

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)

141

15

17

31

52

103

127

123


|

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


John Deere Financial Services

|

Portfolio Composition by Market

John Deere Financial Services $28.1 Billion Owned Portfolio at 31 October 2011

Portfolio Composition by Geography

Portfolio Composition by Product

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

Ag & Turf 87%

C&F 13%

U.S. 72%

Canada 12%

Europe 7%

Latin America 6%

Australia 3%

Revolving Credit9%

Leasing12%

Installment Financing

58%

Wholesale / Floorplan

21%


|

John Deere Capital Corporation Profitability and Growth

271 275 291 311

282

149

319 364

2004 2005 2006 2007 2008 2009 2010 2011

Net Income ($ Millions)

2004 2005 2006 2007 2008 2009 2010 2011

0.28% 0.16% 0.22% 0.29% 0.33%

0.70%

0.48%

0.12%

Write-offs/Average Owned Portfolio

2004 2005 2006 2007 2008 2009 2010 2011

16.4 17.7 18.6 19.0 19.1 19.3

21.1 23.3

Administered Portfolio Growth ($ Billions)


|

John Deere Capital Corporation Retail Notes 60+ Days Past Due vs. Write-offs

Agriculture & Turf1

• 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

Construction & Forestry • The performance and quality

of portfolio improved during 2011

-0.05%

0.45%

0.95%

1.45%

1.95%

2.45%

2.95%

3.45%

3.95%

'83 '86 '89 '92 '95 '98 '01 '04 '07 '10 Net Write-offs (Ag) Installments 60+DPD (Ag)

-0.05%

0.45%

0.95%

1.45%

1.95%

2.45%

2.95%

3.45%

3.95%

'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


|

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

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

Res

ale

Val

ue

as a

% o

f O

rigin

al L

ist

Pric

e

Time Since Origination

2010 2009 2008 2007 2006 2005

U.S. Resale Value vs. Loan Balance 7830 Tractor and 9670 Combine

(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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

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

Res

ale

Val

ue

as a

% o

f O

rigin

al L

ist

Pric

e

Time Since Origination

2010 2009 2008 2007 2006 2005

Loan Balance

Model Year

7830 Tractor (1)

Model Year

9670 Combine (2)

Loan Balance


John Deere Power Systems Engine Emissions and Technology

|

Interim Tier 4 (IT4): • 50% Nitrogen Oxide (NOx) reduction • 90% Particulate Matter (PM) reduction • 100 hp emission break removed

Final Tier 4 (FT4): • 80% NOx reduction • 175 hp emission break removed

Same regulations from 75-750 hp

Tier 4 Engine Implementation

Final Tier 4

0

0.10

0.20

0.30

0.40

0.50

0 2.00 4.00 6.00 8.00 10.00 12.00

Tier 1

Tier 2

Tier 3

Interim Tier 4

NOx, g/kw-hr

PM

, g

/kw

-hr


|

Interim Tier 4 Building on Proven Technology & Fuel Efficiency

Decision to use cooled exhaust gas recirculation (EGR) with diesel oxidation catalyst (DOC)/diesel particulate filter (DPF) driven by customer focus and needs analysis

• A simple solution – No additional fluids (Urea) – More operator friendly – Less complex to maintain

• A fuel efficient solution – optimal performance & fuel-choice flexibility – Tier 3/Stage IIIA cooled EGR John Deere 8320R rated the most fuel efficient tractor ever

reviewed at the Nebraska Test Lab – Operate efficiently with low-sulfur diesel and B5-B20 blends

• A field proven solution – Since 2005, John Deere cooled EGR engines have a proven record of reliability in on-the-farm

use • An integrated vehicle solution

– John Deere designs, manufactures and services the engine, drivetrain, hydraulics, cooling and electrical systems

– John Deere Precision Farming Technology delivers input and labor savings to increase yields • A fully supported solution

– John Deere dealers worldwide are highly trained to provide service and support as well as increase productivity / reliability / utilization of Deere machines


Farm Fundamentals

|

U.S. Farm Cash Receipts Operating Cash Receipts and Government Payments

• Total cash receipts remain at historically high levels

• Record levels expected for 2011

$0

$50

$100

$150

$200

$250

$300

$350

$400

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

$ B

illio

ns

Government Payments Total Cash Receipts

Source: 1998 – 2010: USDA 29 November 2011 2011F – 2012F: Deere & Company Forecast as of 23 November 2011


|

U.S. Farm Balance Sheet Strong

10%

12%

14%

16%

18%

20%

22%

24%

26%

28%

30%

$0

$500

$1,000

$1,500

$2,000

$2,500 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

$ B

illio

ns

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

Source: 1970 – 2010: USDA 29 November 2011 2011F – 2012F: Deere & Company Forecast as of 23 November 2011


|

Corn, Soybeans, Wheat and Cotton Prices Nearby Futures: 13 December 2006 – 13 December 2011

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

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

12/13/06 12/13/07 12/13/08 12/13/09 12/13/10 12/13/11

Do

llars

Per

Bu

shel

Corn

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

12/13/06 12/13/07 12/13/08 12/13/09 12/13/10 12/13/11

Doll

ars

per

Bu

shel

Soybeans

2.00

4.00

6.00

8.00

10.00

12.00

14.00

12/13/06 12/13/07 12/13/08 12/13/09 12/13/10 12/13/11

Do

llars

per

Bu

shel

Wheat

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

12/13/06 12/13/07 12/13/08 12/13/09 12/13/10 12/13/11

Do

llars

per

Po

un

d

Cotton


|

Agricultural Growth – Energy 2007 U.S. Energy Bill

• Significantly expanded mandatory levels of renewable fuels

Source: Energy Independence and Security Act of 2007

0

5

10

15

20

25

30

35

40

2008 2010 2012 2014 2016 2018 2020 2022

Gal

lons

(bill

ions)

Corn-Based Starch Ethanol Advanced Biofuels


|

Uses of U.S. Corn Crop 2009-2020

32.0%

32.5%

33.0%

33.5%

34.0%

34.5%

35.0%

35.5%

36.0%

36.5%

37.0%

0

5,000

10,000

15,000

20,000

25,000

Feed & residual Ethanol for fuel Food, Seed, & Industrial (Less Ethanol) Exports Ethanol for Fuel as % of Total Corn Usage

Bush

els

(mill

ions)

Source: USDA Agricultural Projections to 2020, February 2011


|

0%

10%

20%

30%

40%

50%

60%

70% 1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010E

2011P

World Farm Fundamentals Global Stocks-To-Use Ratios

Corn

Wheat

Soybeans

Source: USDA - 9 December 2011

Cotton


|

Agricultural Growth – Energy U.S. Ethanol

U.S. Corn Used In Ethanol

Source: Informa – November 2011

0

1,000

2,000

3,000

4,000

5,000

6,000

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

Bush

els

(mill

ions)


|

Daily Ethanol Margin Per Bushel Corn Grind Based on Nearby Futures Prices (Excl ITDA*)

*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 – December 2011

($0.50)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

12/6

/07

3/6

/08

6/6

/08

9/6

/08

12/6

/08

3/6

/09

6/6

/09

9/6

/09

12/6

/09

3/6

/10

6/6

/10

9/6

/10

12/6

/10

3/6

/11

6/6

/11

9/6

/11

12/6

/11


Market and Currency Volatility

|

Volatility / Uncertainty Metrics Updated as of 31 October 2011

0

100

200

300

400

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

Sp

read

ove

r T

reas

uri

es (

bps

)

'A' Industrial Index 3-Year Spread

2005-2006 Avg.: 482007-Aug 08 Avg.: 113Sep 08-Dec 09 Avg.: 2092010 Avg.: 732011 YTD Avg.: 7131 Oct 11: 68

0

25

50

75

100


Per

cen

tag

e P

oin

ts

VIX(Chicago Board Options Exchange Market Volatility Index)

0

300

600

900

1,200


Bas

is P

oin

ts

GECC 5 Yr CDS

0

125

250

375

500


Sp

read

ove

r T

-Bil

l (b

ps)

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





|

65

75

85

95

105

115

125

135

Ind

exed

Valu

e

EUR

GBP

AUD

JPY

CAD

BRL

Wea

ker

FC

Str

onger

FC

Currency Movement Post Credit Crisis

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011


Appendix

|

Enterprise SVA Reconciliation to GAAP

Equipment Operations 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Net Sales 11,077 11,703 13,349 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 Average Identifiable Assets

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

Operating Return on AssetsWith 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 ServicesNet Income 262 330 309 345 584 364 337 203 373 471Average Equity 2,115 2,177 2,265 2,227 2,466 2,524 2,355 2,732 3,064 3,194Return 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 725Change 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 725Average Equity Continuing Operations 2,115 2,177 2,163 2,110 2,424 2,524 2,355 2,732 3,064 3,194Average 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 3,194Cost of Equity -437 -431 -414 -410 -457 -480 -430 -458 -420 -492SVA Continuing Operations 44 69 79 90 59 -148 65 233SVA Discontinued Operations -11 25 - - - - - - Financial Services SVA (5) 90 44 69 79 90 59 (148) 65 233

Deere & Company - Enterprise SVA (462) (33) 1,052 913 948 1,314 1,702 (84) 1,715 2,527

(millions of dollars unless stated otherwise)


|

Equipment Ops SVA Reconciliation to GAAP

Equipment Operations 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Net Sales 5,848 5,723 6,479 7,663 8,830 9,640 11,082 11,926 9,701 11,169 11,077 Average Identifiable Assets

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) Percent of Net Sales 0.3% 1.3% 3.7% 11.1% 11.4% 11.7% 12.6% 12.4% 2.8% 6.2% -0.4%

Operating Return on AssetsWith 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 2011Net Sales 11,703 13,349 17,673 19,401 19,884 21,489 25,803 20,756 23,573 29,466 Average Identifiable Assets

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 Percent of Net Sales 3.4% 5.3% 10.8% 9.5% 9.6% 10.8% 11.3% 6.6% 12.3% 13.0%

Operating Return on AssetsWith 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



|

2009 OROA Reconciliation to GAAP Equipment Operations

Equipment Operations2009, as Reported

Exclude Goodwill Impairment &

Voluntary Employee-Separation

2009, as Adjusted

Net Sales 20,756 20,756 Average Identifiable Assets

With Inventories at LIFO 9,647 9,647 With Inventories at Standard Cost 10,950 10,950

Operating Profit 1,365 380 1,745 Percent of Net Sales 6.6% 8.4%

Operating Return on AssetsWith Inventories at LIFO 14.1% 18.1%With Inventories at Standard Cost 12.5% 15.9%



deere & company investor relations current tractor facility in pune ... from india for past 7...

Documents