1. Deere & Company Yen-Hua Huang (Gina) Cheng- Yuan Huang Yu-Te Hung (Ted) Te-Chi Kuo (William) Presented: April 12, 2012

2. Agenda Overview Macroeconomics Industry Descriptions Company Descriptions Financial analysis and Competitors Financial projection and Models Recommendation

3. Overview: Deere & Company, founded 1837, is an globalized company and provides products and services primarily for agriculture and forestry all over the world. It operates in three major business segments: agriculture/ turf (A&T), construction/forestry, & financial services. GICS MAP20106010SymbolDE Current Price79.34 (4/12/2012) Forward P/E12.16 Market Cap.32.04BEnterprise Value57.87B ROA5.99%EPS6.75 ROE42.32%Profit Margin8.63%

4. Source from Deere Mar 2012 presentation for strategy

5. Macroeconomic Tailwinds : Global population Global infrastructure needs

6. Macroeconomic Tailwinds :  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 More People, More Food

7. Source from Deere Mar 2012 presentation for strategy

9. Source from Deere Mar 2012 presentation for strategy

11. Sector : Industrial Goods Industry : Farm and Construction Machinery Farm Equipment : Construction Equipment : Source from IBIS world

12. Construction Revenue Drivers : the value of all non-residential construction Demand from mining The value of residential construction Source form IBIS world

13. Farm revenue drivers Demand from crop production Agriculture price index Private spending on home improvements Source form IBIS world

14. Main Competitors: Company's Name TickerStock PriceForward P/EEPS Deere & Company DE79.349.66.75 Caterpillar Inc. CAT105.879.357.4 CNH Global NV CNH41.048.833.91 Kubota Corporation KUB47.8314.152.59 AGCO Corporation AGCO45.558.615.95

15. Relevant Stock Market Prospects Deere & Company’s GICS code is #20106010. Therefore, the firm majorly competes with Caterpillar Inc. (CAT), CNH Global NV( CNH), and AGCO Corporation (AGCO).

16. Relevant Stock Market Prospects: Industry Top 1 st Player: Caterpillar Inc. (CAT) accounts for 20.3% of the market share. Top 2 nd Player: Deere & Company (DE) accounts for 7.5% of the market share. -Caterpiller provides more comprehensive product lines, including construction & mining equipment and logging machinery -Deere is the world’s leading manufacturer of agricultural equipment -Both of them are Illinois-based

17. Relevant Stock Market Prospects Key statistics regarding Deere and its competitors Source: Yahoo Finance

18. Relevant Stock Market Prospects - Compared with the market index Source: Yahoo Finance

19. A Glance at the Company and Its Business - Basic Description Deere & Company manufactures and services primarily for agriculture and forestry worldwide. Agricultural output will need to double by mid- century to satisfy demand and do so from the essentially same amount of land and with even less water. Deere & Company is consisted of: 1. Agriculture & Turf Segment 2. Construction & Forestry Segment 3. Financial Service Segment

20. A Glance at the Company and Its Business - Basic Description - Agricultural & Turf segment provides utility equipment and related parts Tractor Model D Wheeled Feller Buncher Cotton Picker Rice Binder Sub-compact Utility Tractor Source from Deere website

21. A Glance at the Company and Its Business - Basic Description - Construction & Forestry segment offers utility equipment and related parts Source from Deere website Earthmoving contractor and road builder Power Shovel

22. A Glance at the Company and Its Business - Basic Description - Financial service segment works for worldwide equipment financing, marketing and business development, agricultural financial service, and international lending. -Deere’s interest income will be viewed as the operating assets. -If its debt rating is downgraded, the financial service will not support Deere’s sales as before.

23. A Glance at the Company and Its Business Deere’s Strategy 1. Continue to grow strong at 2 nd position in North America 2. Globalize the Business 3. Improve volumes and pricing 4. Grow market share in developing market

24. A Glance at the Company and Its Business A Leading Technology Source: Deere’s website

25. A Glance at the Company and Its Business Revenue by Business Segment

26. A Glance at the Company and Its Business Revenue by Geographic Segment

27. A Glance at the Company and Its Business Business Drivers: - Demand from crop production -Agricultural price index -Private spending on home improvements -Natural disaster index

28. Brief Description of Deere’s Competitors: Caterpillar Inc. : world’s leader of manufacturer of construction and mining equipment. CNH Global NV : important manufacturer of agricultural and construction equipment. Kubota Corporation : Japan’s leader of manufacturer of agricultural and construction equipment AGCO Corporation : Europe-based manufacturer of agricultural equipment

29. CAT

30. CNH

31. KUB

32. AGCO

33. Financial Ratios Company's Name TickerStock Price Forward P/E EPSEBIT/TAEBIT/EV Deere & Company DE79.349.66.7513.00%8.61% Caterpillar Inc. CAT105.879.357.413.78%7.03% CNH Global NV CNH41.048.833.917.62%8.91% Kubota Corporation KUB47.8314.152.598.84%7.46% AGCO Corporation AGCO45.558.615.9512.32%7.33%

34. DECATCNHKUBAGCOIndustryAve. Market Cap 32.88B68.55B9.84B12.01B4.43B2.14B Current P/E 12.1214.3110.518.477.6610.15 12.61 Forward P/E 9.69.358.8314.158.61N/A10.11 Prof. Margin 8.63%8.19%4.89%5.44%6.65%7.38%6.76% P/B 4.825.341.211.551.492.22.88 P/S 11.140.50.990.510.90.83 ROE 5.99%6.16%4.17%4.35%6.00%4.65%5.33% ROA 42.32%40.29%12.07%8.60%20.57%14.00%24.77% Multiples

35. Joel Greenblatt (in million) (In thousands) EBIT Tangible Assets EVEBIT/TAEBIT/EVSUM DE4.9847.0856.91 13.00%8.61% 21.61% CAT7.1269.9999.84 13.78%7.03% 20.81% CNH1.9431.0121.45 7.62%8.91% 16.53% KUB1.1216.3714.75 8.84%7.46% 16.3% AGCO0.595.405.17 12.32%7.33% 19.65%

36. Source: Yahoo. Finance

37. Dupont Analysis Dupont Ratio2008200920102011 Profit Margin7.96%4.21%7.95%9.53% Total Asset Turnover 66.62%50.46%54.48%61.12% Equity Multiplier 592.50%852.02%686.42%707.38% ROE31.42%18.10%29.73%41.20%

38. Liabilities Breakdown

39. Assets Breakdown

40. Source form Deere 2010 annual report Receivable :

41. 1.Required return Financial Projections

42. 2. Growth rate 3. Key assumption(A1 and A2 sheet) Financial Projections

43. DCF Model Application of Valuation Tools

44. Recommendation: Buy 100 shares @market price Current Price$79.34 (04/12/2012) DCF Price$96.27 Multiple Price$85.12 Target Price $94.04

45. Thank you ! Q&A