Deere & Company Investor Relations - John Deere

John DeereCommitted to Those Linked to the Land

Market Fundamentals

Deere & CompanyNovember 2013

| Deere & Company | November 2013

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 (20 November 2013). 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

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Table of Contents

Slide #Ag Fundamentals – U.S. 4

Construction & Forestry Fundamentals – U.S. 12

Other Regions 15

Deere & Company | November 20133

Ag FundamentalsUnited States


U.S. Farm Cash Receipts

Source: 1998 – 2012: USDA 27 August 20132013F – 2014F: Deere & Company Forecast as of 20 November 2013

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F

$ Bill

ions

Government Payments Total Cash Receipts

Projected total cash receipts remain at historically high levels


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

$3,00019

7119

7219

7319

7419

7519

7619

7719

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

12F

2013

F20

14F

$ Bill

ions

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

Source: 1970 – 2012: USDA 27 August 20132013F – 2014F: Deere & Company Forecast as of 20 November 2013

6


Corn, Soybeans, Wheat and Cotton PricesNearby Futures: 25 November 2008 – 25 November 2013

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

1.002.003.004.005.006.007.008.009.00

11/25/08 11/25/09 11/25/10 11/25/11 11/25/12 11/25/13

Do

llars

Per

Bu

shel

Corn

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

11/25/08 11/25/09 11/25/10 11/25/11 11/25/12 11/25/13

Dol

lars

per

Bu

shel

Soybeans

2.00

4.00

6.00

8.00

10.00

12.00

14.00

11/25/08 11/25/09 11/25/10 11/25/11 11/25/12 11/25/13

Do

llars

per

Bu

shel

Wheat

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

11/25/08 11/25/09 11/25/10 11/25/11 11/25/12 11/25/13

Dol

lars

per

Pou

nd

Cotton

7


Uses of U.S. Corn Crop 2011-2022Bus

hels

(m

illio

ns)

Source: USDA Agricultural Projections to 2022, February 2013

8

20.0%

23.0%

26.0%

29.0%

32.0%

35.0%

38.0%

41.0%

0

5,000

10,000

15,000

20,000

25,000

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


World Farm FundamentalsGlobal Stocks-to-Use Ratios

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013P

Source: USDA – 11 October 2013

Cotton

Wheat

Corn

Soybeans


Agricultural Growth – EnergyU.S. Ethanol

U.S. Corn Used In Ethanol

Source: Informa – November 2013

10

0

1,000

2,000

3,000

4,000

5,000

6,000

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

Bus

hels

(m

illio

ns)


Daily Ethanol Margin Per Bushel Corn GrindBased 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 decisionsSource: Informa – November 2013

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

11/2

5/09

2/25

/10

5/25

/10

8/25

/10

11/2

5/10

2/25

/11

5/25

/11

8/25

/11

11/2

5/11

2/25

/12

5/25

/12

8/25

/12

11/2

5/12

2/25

/13

5/25

/13

8/25

/13

11/2

5/13

11

Construction & Forestry FundamentalsUnited States


U.S. Housing Starts

13

Source: 1960 – 2012: U.S. Census Bureau September 20132013F – 2014F: Deere & Company Forecast as of 20 November 2013

0.000

0.250

0.500

0.750

1.000

1.250

1.500

1.750

2.000

2.250

2.500

1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014F

Housing Starts (Millions of Units)

Multi-Family Housing Starts

Single-Family Housing Starts


U.S. Construction Spending

14

-160%-150%-140%-130%-120%-110%-100%-90%-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%30%40%50%60%70%

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,300

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F

% Total C

onstruction Spend

Bill

ions

, 200

5 Cha

ined

$’s

U.S. Construction Spending (Billions, 2005 Chained $’s)

Residential Investment in StructuresNonresidential Investment in StructuresGovernment Investment in StructuresGovernment Infrastructure Investment

Source: 1995 – 2012: U.S. Bureau of Economic Analysis September 20132013F – 2014F: Deere & Company Forecast as of 20 November 2013

Other Regions

|

EU 28Macroeconomic Data


2012 2013 2014FGDP Growth (%) -0.4% 0.0% 1.2%

Inflation (%) 2.5% 1.5% 1.7%

Unemployment (%) 10.7% 11.3% 11.2%

Source: IHS Global Insight October 2013

5%

23%

72%

Labor Composition

Agriculture Industry ServicesSource: The World Factbook, 2011 est.

2%

25%

73%

GDP Composition

Agriculture Industry Services

Source: The World Factbook, 2012 est.

-3.0-2.0-1.00.01.02.03.04.0

Germany UK France Italy Spain

Major Economies – GDP Growth (%)

2012

2013

2014F

|

EU 28Ag Economic Data


• Utilized agricultural area ~ 187 million hectares

• Arable land ~ 107 million hectares

• Growth potential for Ag equipment industry in Central & Eastern Europe

• Ongoing farm & Ag land consolidation and yield improvements

• Average farm size ~ 14 hectares

• Number of farms ~ 12 million

Source: FAO, Eurostat Agricultural Census 2010Deere & Company Forecast as of 20 November 2013

Production Net Exports

Total Grains 15% 5%Wheat 20% 10%Barley 41% 21%Pork Meat 22% 30%Cow Milk 30% 19%

Source: USDA, September 2013; average 2011-2013(Total Grains excl. Rice)

Share of the World Market

$0

$20

$40

$60

$80

$100

$120

2004 2006 2008 2010 2012 2014F

$ Bill

ions

Crop Value of Production

Crops included: Wheat, Barley, Corn, Rapeseed,Sunflower Seed, Soybeans, Sugar Beet, Cotton and RiceSource: IHS Global Insight as of September 2013


Deere & Company Forecast as of 20 November 2013

Economic UpdateEU 28 – Fiscal 2014

Short-term economic stress has diminished, but risks remain • Only modest GDP growth expected

Grain prices and farm income lower but to remain near long-term average

Solid livestock margins• Beef prices at historic highs• Pork prices above long-term average• Improved milk prices will support dairy farmers


EU 28Government Support of Agriculture

Source: EU Commission, Agra Europe

19

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 (n

omin

al p

rices

)

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

2007-2013 2014-2020

• Common Agricultural Policy proposed budget 2014-2020 frozen at 2007-2013 nominal levels (-14% in real terms)

• Portion of direct payments tied to environmentally-friendly farming practices• Limited effects of direct payments redistribution in favor of new member states• In nominal terms & over the full time period, Pillar I ~ constant – but bigger cuts in Pillar II

|

BrazilMacroeconomic Data


17%

23%

60%

Labor Composition

Agriculture Industry ServicesSource: Brazilian Institute of Geography and Statistics (IBGE), 2012

Source: IHS Global Insight 2013

2012 2013F 2014FInterest rate (%) 8.5% 8.1% 8.9%

CPI Inflation (%) 5.4% 6.2% 5.4%

Unemployment (%) 5.5% 5.6% 5.6%

-2.00.02.04.06.08.0

2009 2010 2011 2012 2013F 2014F

GDP Growth (%)

5%

26%

68%

GDP Composition

Agriculture Industry ServicesSource: Brazilian Institute of Geography and Statistics (IBGE), 2012 est.

|

BrazilAg Economic Data



Soybean 8% 19%Corn 28% 38%Sugar 21% 44%Beef 16% 17%Chicken 16% 36%

• Agricultural area ~ 275 million hectares1

• Planted area ~ 72 million hectares2

• ~ 17 million hectares brought into production from 2002-2012 (~ half from pasture)

• ~ 24 million hectares will be brought into production in next decade3

• ~ 4.5% CAGR in industry equipment sales through the end of the decade3


• Number of farms ~ 5 million

Source: USDA, 2013; average 2011-2012

1 Includes pasture, excludes double crop2 Includes double crop3 Deere & Company Forecast as of 20 November 2013Source: FAO, Conab, Brazilian Institute of Geography and Statistics (IBGE)


Crops included: Soybean, Corn, Rice, Wheat, Sorghum, Cotton, SugarcaneSource: Actual: MAPA (Brazilian Ministry of Agriculture), Oct 20132013 & 2014 : Deere & Company Forecast as of 20 November 2013

Gross Value of Agricultural Production

Bill

ions

of

Bra

zilia

n Rea

l

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F2014F


• R$156 billion approved for 2013/2014 Agriculture and Livestock Plan *• R$135 billion targeted towards Agribusiness mid/large-scale operations (17.4% higher than 2012/2013)• R$21 billion targeted towards family agriculture (16.7% higher than 2012/2013).

• Special credit line for warehouse investments with 3.5% interest rate by year, 15 years of term and total budget of R$ 25 billion in 5 years.

BrazilGovernment Support for Agriculture

22

Tractor Programs 1

Enginehp Where

InterestRate

GracePeriod (Max) Term Maturity

Mais AlimentosPró-TratorTrator Solidário

50-7850-12055-75

BrazilSPPR

2.0%0.0%

~ 2.0%

3 Years32

10610

PerennialNot Defined

Dec14

Finame PSI-BKModerfrota

AllAll

BrazilBrazil

3.0%-3.5%2

5.5%23

1.5104

Dec13Jun13

CombinePrograms 1 Class Where

InterestRate

GracePeriod (Max) Term Maturity

Mais Alimentos IV Brazil 2.0% 3 Years 10 Perennial

Finame PSI-BKModerfrota

AllAll

BrazilBrazil

3.0%-3.5%2

5.5%23

1.5104

Dec13Jun13

1 Exclusively Finame qualified products. Minimum of 60% local content (weight and value)2 3% until 30 June 2013 then 3.5% until 13 December 2013. 3 3 years if amount financed > R$100 million

Government programs to support equipment purchases

* Includes budget for financing input costs, investments and production trade.

|

CISMacroeconomic Data


Source: IHS Global Insight October 2013

4%

36%

60%

GDP Composition

Agriculture Industry Services

Source: The World Factbook, 2012 est.

8%

27%

65%

Labor Composition


(Russia)

(Russia)

2012 2013 2014FGDP Growth (%) 3.6% 2.5% 3.6%

Inflation (%) 5.8% 6.5% 5.9%

Unemployment (%) 5.4% 5.3% 5.2%

-2.0-1.00.01.02.03.04.05.06.07.08.09.0

Russia Ukraine Kazakhstan Belarus

Major Economies – GDP Growth (%)

201220132014F

|


Total Grains 10% 18%Wheat 15% 18%Barley 22% 26%Rapeseed 4% 17%Sunflower 50% 34%

CISAg Economic Data


Source: USDA, September 2013; average 2011-2013(Total Grains excl. Rice)

Source: FAO, CIS farm statistics 2006-2007 (Russia, Ukraine and Kazakhstan)Deere & Company Forecast as of 20 November 2013



• Significant opportunities exist to improve yield rates in all major crops

• Land under cultivation (sown crops) expected to remain flat over the next decade

• Deere estimates “Western-style” equipment used on <25% of farm land


• Number of farms ~ 0.5 million


$0

$10

$20

$30

$40

$50

$60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F

$ Bill

ions


Crops included: Wheat, Barley, Corn, Sunflower Seed, Rapeseed, Soybeans, Sugar BeetSource: IHS Global Insight as of September 2013, Russia and Ukraine only


CISGovernment Support of Agriculture

• Import policies affecting combine sales in Russia, Kazakhstan and Belarus

• Restructured Russian National Ag Program 2013 - 2020 expected to increase Ag support by over 60% by 2020 in nominal terms

• 2013 annual Ag federal budget increased 17-20%, includes additional regional subsidies• Interest rate subsidies for Ag equipment largely eliminated, replaced with direct area payments

to Ag operations and direct subsidies to domestic Ag equipment industry• Ag equipment localization requirements re-considered/strenghtened

25

|

ChinaMacroeconomic Data


2012 2013F 2014FInterest rate (%) 6.3% 6.0% 5.9%

Inflation (%) 2.7% 2.4% 2.8%

Unemployment (%) 4.1% 4.1% 4.1%

9.210.5

9.37.7 7.8 8.0

0.02.04.06.08.0

10.012.0

2009 2010 2011 2012 2013F 2014F

GDP Growth (%)


10%

45%

45%

GDP Composition

Agriculture Industry ServicesSource: IHS Global Insight, 2012 est.

35%

29%

36%

Labor Composition


|

ChinaAg Economic Data


$0

$50

$100

$150

$200

$250

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F

$ Bill

ions


Crops Included: Corn, Wheat, Rice, Oilseeds, and CottonSource: IHS Global Insight 2013


Source: FAO, IHS Global Insight, China National Bureau of Statistics


• Arable land & permanent crops ~ 126 million hectares

• 121 million hectares cultivated in 2011

• Rural population % of total declined 9% 2003-2012

• Average farm size ~ 0.5 hectares

• Number of farms ~ 252 millionShare of the World Market


Total Grains 21% 0.5%Wheat 18% 0.7%Corn 24% 0.1%Rice 31% 0.8%Cotton 29% 0.2%


Source: China Ministry of Agriculture

ChinaGovernment Support of Agriculture

12

28

72

75

72

86

108

133

12

13

14

15

15

19

15

15

15

15

3

4

4

7

12

20

20

22

22

22

1

2

4

13

16

18

21

22

0 25 50 75 100 125 150 175 200

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013E

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

28

166

192

|

IndiaMacroeconomic Data


2012 2013F 2014FInterest rate (%) 10.2% 9.9% 9.5%

Inflation - WPI (%) 7.5% 6.1% 6.5%

Unemployment (%) 8.1% 8.2% 7.8%

0.02.04.06.08.0

10.0

2009 2010 2011 2012 2013F 2014F

GDP Growth (%)


18%

18%64%

GDP Composition

Agriculture Industry ServicesSource: IHS Global Insight, 2010 est.

53%

19%

28%

Labor Composition


|

IndiaAg Economic Data


$0

$30

$60

$90

$120

$150

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F

$ Bill

ions


Crops included: Corn, Wheat, Rice, Oilseeds, CottonSource: IHS Global Insight 2013


Source: FAO, Tractor Manufacturers Association of India, Indian Ministry of Agriculture



• 140 million hectares net area sown (2007/08)

• Annual industry tractor sales > 500,000 units

• Average farm size ~ 1.2 hectares

• Number of farms ~ 129 millionShare of the World Market


Total Grains 10% 6%Wheat 14% 6%Corn 2% 3%Rice 22% 20%Cotton 21% 13%


IndiaGovernment Support of Agriculture

185

262

325

766

530

623

672

660

231

240

313

438

560

638

728

850

35

40

54

143

170

195

237

194

197

207

275

56

48

151

332

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

2005

2006

2007

2008

2009

2010

2011

2012

Rupees (in billions)

Fertilizer Subsidy

Food Subsidy (for households)

Interest Rate Subsidy (for farmers)

Irrigation Subsidy

Electricity Subsidy

Other Subsidies (mainly for seeds)

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

809

917

1,191

2,048

1,090

1,296

1,440

31

1,564

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Deere & Company Investor Relations - John Deere