INTEGRITY QUALITY COMMITMENT INNOVATION Industry Perspective Joanne Howard Challenges and Opportunities in Managing Agricultural Operations for a Low-Carbon

INTEGRITY • QUALITY • COMMITMENT • INNOVATION

Industry Perspective

Joanne Howard

Challenges and Opportunities in Managing Agricultural Operationsfor a Low-Carbon Economy

18 July 2007

2INTEGRITY • QUALITY • COMMITMENT • INNOVATION

John Deere Today

#1 provider to agricultural and forestry businesses worldwide

#2 construction equipment provider in North America

Quality leader in lawn, grounds and turf care equipment

A leading worldwide manufacturer of off-highway diesel engines

One of the largest equipment finance companies in the U.S.

Key investor in alternative energy sources

Exciting new entities: John Deere Agri Services, Intelligent Mobile Equipment Technologies, Landscapes, Wind Energy

An American icon – founded in 1837 – growing outside the United States for more than 50 years


Mannheim, Germany

Richards Bay, South Africa

Pune, India

Jiamusi, China

Stadtlohn, GermanyGummersbach, Germany

Horst, NetherlandsEnschede, Netherlands

Bruchsal, Germany

Zweibruecken, Germany

Arc-les-Gray, France

Saran, France

Madrid, Spain

Catalao, Brazil

Horizontina, Brazil

Rosario, Argentina

Saltillo, MexicoMonterrey, Mexico

Torreon, Mexico

Valley City, NDFargo, ND

Minneapolis, MN

Dubuque, IAHoricon, WI

Waterloo, IA

Moline, IL

East Moline, IL

Welland, Ontario

Edmonton, Alberta

Davenport, IA

Des Moines, IA

Langley, British Columbia

Ottumwa, IA

Springfield, MO

Coffeyville, KS

Thibodaux, LA

Fuquay-Varina, NC

Greeneville, TN

Augusta, GA

Kernersville, NC

Joensuu, Finland

Rock Valley, IAKlemme, IA

Tokoroa, New Zealand

Tianjin, China

Orenburg, Russia

Tampere, Finland

John Deere Today

Montenegro, Brazil

Brisbane, Australia


2006 Net Sales & Revenues: $22.148 Billion

Commercial & Consumer 18%

Agricultural 46%

Credit 8%Construction & Forestry 26%

Other 2%

Investing nearly $2 million per day in research and development


We Contribute…We Solve

Our Factories/Buildings• Direct / Indirect

Emissions

Customers/Dealers• Carbon sequestration:

agricultural, forestry, mowing opportunities

Product• Engine Emissions• Biofuel Usage

Research & Development• Renewable energy sources• Biomass Activities


We Contribute


Greenhouse Gas Accounting Protocols

ConsistencyCompany A’s ton of GHG = Company B’s ton of GHG


Deere’s Direct vs. Indirect Emissions

Largest Direct Processes• Foundry• Heat Treat• Painting• Powerhouses• Testing Operations

31% Direct 69% Indirect

Purchased Electricity & Steam

Deere’s GHG Emissions


Annual GHG Inventory

2006 Percent By Region (Absolute Basis)

U.S.80%

Europe11%

Canada3%

Mexico4%

South America

1%

Asia / Pacific Rim3%

Year Energy Cost (US$)2003 $78,685,8802004 $87,130,0722005 $100,139,9302006 $111,983,6800

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2003 2004 2005 2006

To

ns

CO

2-E

qu

iv

Direct Indirect


Manufacturing - Direct29%

Manufacturing - Indirect

60%

Offices - Owned 4%

Offices - Leased

1%

Fleet2%

Warehouses4%

2006 CO2 Tonnage Breakdown (FY2006 Data)

Manufacturing: 89%


Enhanced External Communications

2006 Global Citizenship Report

External Web Page


Voluntary Program Participation


John Deere & USCAP


Industry Perspective: We Contribute

• Standardization• Uniform federal framework of climate legislation• Uniform guidelines for GHG inventory and registry

• Credit for Early Action


We Solve


Fuel Efficient Diesel EnginesJohn Deere Power Systems

Performance optimized Tier 3 PowerTech Plus™ engines providing industry-leading fuel economy, power, response


8430 Tractor: Set new record as most fuel-efficient row crop tractor ever tested in the Nebraska Test Lab


Use of Renewable MaterialsJohn Deere Power Systems

25 x ‘25 Renewable Fuels Champion

Promoting quality standards, handling, distribution and use of biodiesel fuels


Use of Recycled Materials in Products


"The pneumatic down pressure feature on my 1770NT planter easily adjusts from the tractor cab and provides more down pressure options than you will ever find that you need." — Kenneth Wisehart, Shirley, Ind.

"The single-disc fertilizer openers provide efficient fertilizer placement with minimal soil disturbance." — Grant Troop, Quarryville, Pa.

Conservation Tillage Equipment


Precision Farming EquipmentJohn Deere Ag Management Solutions

• GreenStar AutoTrac

• iTECPro

Multiple precision Ag applications

Precision Ag Solutions for Growers Worldwide

Precision Ag Solutions for Growers Worldwide


Nutrient Application Equipment and SolutionsJohn Deere Agri Services

Turning information into insight and strategies that add value and strengthen businesses across the agri-food supply chain

• OptiGro

• Soil Information Systems


Financial Services

John Deere Wind Energy • Provide advice, debt and equity

investment and the foundation for a successful project through:• Long-term, comprehensive project

management services• Turbine supply• A stream-lined project approval

process and technical support• Expertise in agriculture, financial

services and wind energy technology


Wind Climate benefits

• A single turbine displaces 2700 tons of Carbon Dioxide annually

• Current fleet of installed turbines in US• Avoid 19 million CO2 tons annually • Avoids burning 16 million tons of coal each year or 50

million Barrels of Oil• Avoids consumption of Water in fossil fuel generation

• Avg. per person consumption for energy: 100,000 gallons of water


Project Locations 17 April 2007

= Operating = In Construction = Planned (Approved) (75.2 MW) (228.5 MW) (233.15 MW)


JD Wind 3


One Farmer’s Sentiments on Wind Energy

"I think it's one of the greatest things that ever happened. It's good for my pocketbook. It's good for the environment.”

-- Chuck Goodman, retired farmer near Alta, Iowa; Has three wind turbines on his land


We Solve: Summary

• Fuel-efficient diesel engines• Use of renewable materials in products• Corn- and soy-based plastics for some

combine and tractor components• Conservation tillage equipment: planters, air

seeders, drills• Precision farming equipment: GreenStar

AutoTrac and iTEC Pro• Nutrient application equipment and solutions:

OptiGro and Soil Information System• Wind energy service provider


Industry Perspective: We Solve• Technology Policies and Measures:

• Renewables - use / research / standards• Emission Offsets:

• Ensuring robust and reliable participation by agricultural and forestry sectors in climate policies• Offsets should include a variety of options, e.g. soil, plant, forest

sequestration, methane capture, renewable energy• Offsets must be verifiable• Development of a single, nationwide standard for verifying and

accounting for agriculture and forestry offsets is needed


Questions?For further information:

Joanne Howard309 765 5152

[email protected]

Documents

INTEGRITY QUALITY COMMITMENT INNOVATION Industry Perspective Joanne Howard Challenges and Opportunities in Managing Agricultural Operations for a Low-Carbon