Industry Perspective

Joanne Howard

Challenges and Opportunities in Managing Agricultural Operations for a Low-Carbon Economy 18 July 2007 INTEGRITY • QUALITY • COMMITMENT • INNOVATION

John Deere Today

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

 #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 2

INTEGRITY • QUALITY • COMMITMENT • INNOVATION

John Deere Today

Valley City, ND Fargo, ND Edmonton, Alberta Minneapolis, MN Langley, British Columbia Rock Valley, IA Des Moines, IA Ottumwa, IA Springfield, MO Coffeyville, KS Greeneville, TN Welland, Ontario Klemme, IA Waterloo, IA Dubuque, IA Horicon, WI Davenport, IA Moline, IL East Moline, IL Kernersville, NC Fuquay-Varina, NC Augusta, GA Torreon, Mexico Monterrey, Mexico Saltillo, Mexico Catalao, Brazil Horizontina, Brazil Rosario, Argentina Madrid, Spain Saran, France Arc-les-Gray, France Montenegro, Brazil

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3 Zweibruecken, Germany Bruchsal, Germany Tampere, Finland Joensuu, Finland Enschede, Netherlands Horst, Netherlands Gummersbach, Germany Stadtlohn, Germany Mannheim, Germany Jiamusi, China Tianjin, China Orenburg, Russia Pune, India Richards Bay, South Africa Brisbane, Australia Tokoroa, New Zealand

2006 Net Sales & Revenues: $22.148 Billion

Credit 8% Construction & Forestry 26% Other 2% Agricultural 46%

Investing nearly $2 million per day in research and development

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We Contribute…We Solve

Our Factories/Buildings

• Direct / Indirect Emissions

Product

• Engine Emissions • Biofuel Usage

INTEGRITY • QUALITY • COMMITMENT • INNOVATION Research & Development

• Renewable energy sources • Biomass Activities

Customers/Dealers

• Carbon sequestration: agricultural, forestry, mowing opportunities 5

We Contribute

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Greenhouse Gas Accounting Protocols

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

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INTEGRITY • QUALITY • COMMITMENT • INNOVATION

Deere’s Direct vs. Indirect Emissions

Deere’s GHG Emissions

31%

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

69%

Indirect Purchased Electricity & Steam 8

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Annual GHG Inventory

1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2003 2004 Direct Indirect 2005 2006

2006 Percent By Region (Absolute Basis) Canada 3% Mexico 4% Asia / Pacific Rim 3% South America 1% Europe 11% U.S.

80% Year 2003 2004 2005 2006 Energy Cost (US$)

$78,685,880 $87,130,072 $100,139,930 $111,983,680 9

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2006 CO2 Tonnage Breakdown

(FY2006 Data)

Offices - Leased 1% Warehouses 4% Fleet 2% Offices - Owned 4% Manufacturing - Direct 29% Manufacturing - Indirect 60%

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Manufacturing: 89%

Enhanced External Communications

2006 Global Citizenship Report External Web Page

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Voluntary Program Participation

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John Deere & USCAP

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Industry Perspective: We Contribute

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

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We Solve

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Fuel Efficient Diesel Engines John Deere Power Systems

Performance optimized Tier 3 PowerTech Plus

™

engines providing industry-leading fuel economy, power, response INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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8430 Tractor: Set new

record as most fuel efficient row crop tractor ever tested in the Nebraska Test Lab

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Use of Renewable Materials John Deere Power Systems

25 x ‘25 Renewable Fuels Champion Promoting quality standards, handling, distribution and use of biodiesel fuels INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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Use of Recycled Materials in Products

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Conservation Tillage Equipment

"The single-disc fertilizer openers provide efficient fertilizer placement with minimal soil disturbance."

— Grant Troop, Quarryville, Pa.

"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.

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Precision Farming Equipment John Deere Ag Management Solutions

•

GreenStar AutoTrac

•

iTECPro Multiple precision Ag applications Precision Ag Solutions for Growers Worldwide

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INTEGRITY • QUALITY • COMMITMENT • INNOVATION

Nutrient Application Equipment and Solutions John 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 INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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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 23

INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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

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= Operating (75.2 MW) = In Construction = Planned (Approved) (228.5 MW) (233.15 MW) Project Locations 17 April 2007

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JD Wind 3

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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

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INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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 28

INTEGRITY • QUALITY • COMMITMENT • INNOVATION

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 29

INTEGRITY • QUALITY • COMMITMENT • INNOVATION

Questions?

For further information: Joanne Howard 309 765 5152 [email protected]

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