DEERE & COMPANY 2006 GLOBAL CITIZENSHIP REPORT 2006 Citizenship Brochure Page 1 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black John Deere’s Worldwide Headquarters in Moline, Ill., designed by famed architect Eero Saarinen, was completed in 1964. It was designed to reflect the company’s timeless values and its ties to the land. Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 2 “How we get results is as important as the results we get.” - Robert W. Lane, Chairman and Chief Executive Officer, Deere & Company About John Deere TABLE OF CONTENTS Deere & Company, known familiarly as John Deere, is a publicly held company incorporated in Delaware, USA. It has four divisions: Agricultural Equipment – John Deere is the world’s leading manufacturer of farm equipment. The company offers a complete line of farming services and solutions with products primarily sold and serviced through the industry’s premier dealer network. Chairman’s Letter 4 John Deere at a Glance 6 Our Values 8 Four Founding Values Public Affairs Commercial and Consumer Equipment – John Deere produces and markets North America’s broadest line of lawn and garden tractors, mowers, and other outdoor power products. John Deere Landscapes provides irrigation equipment and nursery supplies to landscape-service professionals across the United States. Governance Ethics & Compliance Our Stewardship Construction and Forestry – The company is the world’s leading manufacturer of forestry equipment and is a major manufacturer of construction equipment in North America. Environment Credit – John Deere Credit is one of the largest equipment finance companies in the United States and has operations in 17 countries. It provides retail, wholesale and lease financing, and offers revolving credit and operating loans. Health & Safety 12 Climate Change John Deere serves customers in more than 110 countries, always abiding by World Trade Organization guidelines. Our Products 24 Our Employees 28 Our Suppliers and Dealers 32 Our Philanthropy 35 Unless otherwise indicated, all capitalized or otherwise typographically distinguished names of products and services are trademarks or servicemarks of Deere & Company. 3 2006 Citizenship Brochure Page 3 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black leadership, helps us improve the world while growing a business as great as our products. OUR VALUES John Deere fully recognizes the need to conduct business with integrity wherever we do business. Without a doubt: How we get results is as important as the results we get. We believe our independent board of directors (I am the only Deere & Company employee on the board) provides us a level of corporate governance that is best in class. Drawn from a range of industries and sectors, our directors provide helpful insight to the company and carefully promote and safeguard the interests of our shareholders. Likewise our business conduct guidelines for employees and suppliers worldwide hold every individual accountable for fair dealing, respecting others and obeying the law. Our independent board and our compliance guidelines have earned the company its standing on Business Ethics magazine’s list of most ethical companies for the past seven years. Our long-standing values of integrity, quality, commitment and innovation are touchstones for our behaviors worldwide. Achieving Performance that Endures The Deere & Company 2006 Global Citizenship Report reflects the commitment and efforts of our employees, dealers and suppliers around the world, who support our company’s mission to distinctively serve customers – those linked to the land – through a great business. At John Deere, we are proud of the global role we play in feeding and clothing people, helping to develop renewable energy sources, building much-needed infrastructure, and beautifying homes, parks and public spaces. OUR STEWARDSHIP John Deere aims its worldwide operations and processes at improving productivity while minimizing environmental impacts. For example, major investments in state-of-the-art facilities this past year in Waterloo, Iowa, Pune, India and Montenegro, Brazil, are helping us respond to variable market conditions while reducing waste and energy use. From our advanced paint systems to our remanufacturing processes, we manage and reclaim materials effectively. We also are proud of the work our employees have done to support the company’s success of the past few years: • Customer focus, with rigorous attention to asset management, has helped us deliver record operating performance. • Disciplined growth has extended our footprint into new markets and geographies. We have invested in and continue to explore exciting alternative energy technologies, such as solar energy, to power some of our facilities. In the United States, the company is joining the Environmental Protection Agency’s Climate Leaders and has become an early member of the United States Climate Action Partnership. • Aligned high-performance teamwork throughout the enterprise has focused our energies and added clarity of purpose. To make sure that our work results in performance that endures, we integrate the needs of our customers, shareholders, employees, suppliers, dealers and communities. Our effort to satisfy these needs comprises our global citizenship. In other words, we provide products that are relevant to our customers and society at large. We create, distribute and service our offerings in ways that respect the earth’s limited resources and the health and well-being of its inhabitants. We provide employees with safe and healthy workplaces and challenge them to develop to their full potential. We operate our facilities and processes in ways that protect the environment and make them valued assets for our communities. Vitally important, our factories provide remarkably safe environments – employees are the safest in the industry, and in fact, are safer at work than at home! OUR PRODUCTS John Deere invests approximately $2 million a day in research and development – much of which is aimed at increasing productivity and reliability while enabling our customers to operate in safe and environmentally sound ways. For instance, we offer precision agricultural technologies to minimize input requirements for seed, fertilizer and pesticide. We have certified the This broad approach to citizenship, coupled with our market 4 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 4 use of 5 percent biodiesel in most of our heavy equipment. Our U.S. EPA Tier 3-compliant diesel engines not only dramatically reduce emissions, they also have achieved improved fuel efficiency. Investments in water management technologies help farmers reduce water requirements and eliminate wasteful runoff. Practices such as no-tillage planting reduce wind and water erosion and the release of chemicals into the air. donations, sponsorships and memberships as well as through innumerable volunteer hours. The primary giving arm is the John Deere Foundation, based in the United States, which donates between $9 million and $12 million annually. Its major areas of support include the Solutions to World Hunger initiative, arts and cultural programs, education, and economic development. In Canada, Europe, Latin America, Asia and Australia, smaller foundations and localized contribution programs have supported a wide range of organizations and projects that have lasting value for their communities. OUR EMPLOYEES Although it is my privilege to lead Deere & Company, it is the people who work here who make it the great company it is. John Deere employees have the opportunity to develop their own potential and contribute to the world through goods and services that benefit humankind. To achieve the company’s aim of growing a business as great as our products, we depend on diverse employees around the world to develop innovative ways to meet customer needs. ****** At John Deere, we believe performance that endures is possible because our corporate citizenship integrates the interests of shareholders, customers, employees, suppliers, dealers and communities. This approach to citizenship around the world helps us attract and retain the best talent, gives our customers reason to be loyal to our products and services, enriches our dealers and suppliers, supports the quality of life in the communities in which we live and work, helps protect the environment and preserve precious resources, and, ultimately, delivers a valuable return to our investors. Our ranking in both FORTUNE magazine’s lists of America’s and global “Most Admired” companies is attributable in great part to the talent, innovation and volunteerism of our 47,000 employees. For instance, it was a proud moment when our United Auto Workers Union employees in Dubuque, Iowa volunteered their time to build equipment needed by Hurricane Katrina victims. OUR SUPPLIERS AND DEALERS Please enjoy this Global Citizenship Report which, together with our annual report, demonstrates ways in which John Deere contributes to human flourishing. John Deere is proud of its diverse and high-quality worldwide supply base. All of our suppliers are expected to adhere to the company’s Supplier Code of Conduct, which prohibits gift-giving or improper payments to secure business; prohibits engaging in or supporting child, involuntary or forced labor; and requires paying competitive wages. The company expects suppliers to support diversity and equal employment opportunity, as well as comply with environmental, health and safety regulations. They are also expected to be familiar with the business practices of their suppliers and ensure they operate within the guidelines of our Supplier Code of Conduct, Sincerely, 1 April 2007 Robert W. Lane Chairman and Chief Executive Officer Deere & Company To our customers, the “face” of the company is the John Deere dealer. These independent business people and their employees personify our company in their own communities. Just as a diverse and inclusive employee base enriches John Deere, so does a dealer organization that mirrors the range of customers we serve worldwide. John Deere dealers are held to high ethical standards, consistent with the company’s own code of conduct. OUR PHILANTHROPY John Deere has long supported its communities around the world. We do this through monetary contributions, in-kind 5 2006 Citizenship Brochure Page 5 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black Operating Locations Valley City, ND Fargo, ND Edmonton, Alberta Minneapolis, MN Burlington, Ontario Mississauga, Ontario Zweibrücken, Germany Bruchsal, Germany Grimsby, Ontario Luxembourg Langley, British Columbia Welland, Ontario Schaffhausen, Switzerland Waterloo, IA Dubuque, IA Madison, WI Horicon, WI Davenport, IA Des Moines, IA Ottumwa, IA Springfield, MO Moline, IL Milan, IL Torrance, CA East Moline, IL Cary, NC San Marcos, CA Coffeyville, KS Kernersville, NC Lenexa, KS Fuquay-Varina, NC Greeneville, TN Alpharetta, GA Augusta, GA Orenburg Torreón, Mexico Monterrey, Mexico Thibodaux, LA Saltillo, Mexico Madrid, Spain Saran, France Catalão, Brazil Arc-les-Gray, France Horizontina, Brazil Montenegro, Brazil Rosário, Argentina Porto Alegre, Brazil JOHN DEERE AT A GLANCE 2006 Net Sales and Revenues: $22.1 billion Agriculture: $10.2 billion Construction & Forestry:$5.8 billion Commercial & Consumer: $3.9 billion Credit: $1.8 billion Other: $445 million 2006 Net Income: $1.7 billion Deere & Company and its affiliated companies manufacture, distribute, and finance a full line of equipment for use in agriculture, construction, forestry, and lawn and turf care; manufacture engines and other powertrain components for John Deere equipment and other manufacturers; and provide credit and other services to customers around the world. The company markets its products primarily through a worldwide network of independent dealers supported by a decentralized marketing organization. (Fiscal year ending October 31, 2006) 6 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 6 Richards Bay, So ENVIRONMENTAL, HEALTH AND SAFETY PERFORMANCE AT A GLANCE Workplace Safety Lost-Time Injury Frequency Rate n, Germany Tampere, Finland sal, Germany 2005 2006 0.35 0.29 0.27 (lost-time injuries per 200,000 hours worked) Joensuu, Finland uxembourg 2004 Enschede, Netherlands Horst, Netherlands Gummersbach, Germany Lost-Time Injury Severity Rate 2004 2005 2006 7.4 4.4 5.7 (days lost per 200,000 hours worked) Stadtlohn, Germany Mannheim, Germany Environmental Impact Jiamusi, China Tianjin, China Beijing, China Total Waste 2004 2005 2006 22.4 23.9 23.4 (kilograms per ton of production) Hazardous Waste Orenburg, Russia Singapore 2004 2005 2006 1.84 1.97 2.06 (kilograms per ton of production) Pune, India Process Wastewater Magarpatta, India 2004 0.91 Richards Bay, South Africa 2005 0.96 2006 0.94 (cubic meters per ton of production) Brisbane, Australia Greenhouse Gas Intensity Tokoroa, New Zealand 2004 2005 2006 0.66 0.64 0.65 (tons of CO2 equivalent per ton of production) WORLDWIDE HEADQUARTERS EMPLOYEES Deere & Company One John Deere Place Moline, IL 61265-8098 EUROPEAN HEADQUARTERS At Oct. 31, 2006, John Deere had approximately 46,500 full-time employees, including approximately 27,000 employees in the United States and Canada. Unions are certified as bargaining agents for approximately 38 percent of John Deere’s United States employees. Deere & Company European Office Steubenstrasse 36-42, D-68163 Mannheim Germany For more information and a complete listing of operating, marketing, sales, and parts distribution locations, please visit www.johndeere.com. 7 2006 Citizenship Brochure Page 7 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black OUR VALUES Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 8 standing Contributor honor was established to recognize those who aid in “carrying forward the spirit of rural development and setting forth a commendable example to the industry.” THE VALUES THAT SUPPORT PERFORMANCE THAT ENDURES PUBLIC AFFAIRS WORLDWIDE John Deere’s values – integrity, quality, commitment and innovation – can be traced back to the company’s founder, John Deere. During his lifetime, no report on the progress of his Plow Works was without accolades for his personal and professional integrity. John Deere has a long history of community and government involvement. Since founder John Deere served as mayor of Moline, Illinois, in the 1870s, the company has been engaged in the advancement of sound public policy. This work remains an important business strategy today. Throughout the company’s 170-year history, the values John Deere lived by have been fundamental guides and measures in every aspect of the company’s operations and an explicit part of its strategy. John Deere employees have always understood that while business results are critical, how results are achieved is as important as the results themselves. John Deere recognizes that sound public policy helps the company achieve its business objectives and highly values company and employee involvement in the political process. Public Affairs Worldwide promotes good citizenship by encouraging employee participation in voting. In addition, John Deere offers employee involvement programs, including the John Deere Political Action Committee (JDPAC), the company’s voluntary employee political contributions program in the United States, and the John Deere Government Action Information Network (JDGAIN), a company program through which employees are asked to voluntarily contact their elected officials about pending legislation of interest to the company. THE VALUES Integrity means telling the truth, keeping our word and treating others with fairness and respect. It is demonstrated through honest relationships, effective decisions that consider the balanced interests of all those who have a stake in our success, and unquestioned commitment to ethical and legal behavior. Just as John Deere employees apply the company’s values to their work in business and in their communities, our Public Affairs Worldwide organization advocates for sustainable and fair government policies and practices throughout the world. John Deere recognizes that its businesses operate in a diverse, ever-changing world. Public Affairs Worldwide works to keep the employees of John Deere informed and engaged with that changing world. By doing so, a working environment of learning continually fosters educated thought leadership. Quality means delivering the value that customers, employees, shareholders and other business partners expect, every time we interact with them. Innovation means inventing, designing and developing breakthrough products and services that customers want to buy from John Deere. Strategic investment in research and development is a mainstay of the company as we constantly strive to delight customers with products and services that help them realize their own aspirations of effectiveness and efficiency. Public Affairs Worldwide collaborates with an international network of public affairs professionals to monitor economic, political, and social policies and trends throughout the world that affect customers, employees, and the company. Commitment means doing our best to meet expectations predictably on time, every time, over the long run. VALUES IN ACTION John Deere employees strive to exemplify the John Deere values in their work. In 2006, for example, a John Deere employee was given a personal award from the government of China for his contributions to development in that country. GOVERNANCE: LEADERSHIP FOR HIGH PERFORMANCE Strong corporate governance is an essential foundation for delivering high performance over the long term – performance that endures. Wayne Haughton, Director of Marketing, East Asia, was named one of 10 outstanding contributors to the construction of China’s agricultural machinery distribution system. The Out- A diverse and independent board of directors provides rigorous and diligent oversight and expectations of high performance. It also brings expertise, business skills, and strategic global perspectives to guide the company’s growth while maintaining its values, stewardship, and contribution to human flourishing. John Deere has always served those linked to the land, and the company’s values reflect the integrity, efficiency, and stewardship that are common characteristics of its customers. Recognizing that the company would be better able to serve shareholders in an era of global growth and increasingly complex business requirements if it changed its board composition, 9 2006 Citizenship Brochure Page 9 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black John Deere moved to an independent board of directors more than a decade ago. the chairman, such as setting agendas for board and committee meetings, to be shared by all directors. Since then, the board has been able to attract top talent from business, academia and government. It has also adopted policies and practices aimed at deep understanding, effective oversight, and inspired business guidance for Deere & Company’s diverse businesses, markets, and growth opportunities. • The board makes extensive use of the “presiding director” concept for executive sessions and for specific subjects, such as succession planning. • The independent directors annually review the performance of the chief executive officer on business results, execution of strategies and development of employees. Important policies include: • To provide board members with detailed knowledge about the company, the board holds its meetings at various company locations and requests presentations on major projects and strategies. • To further align board members and shareholders’ interests, a significant portion of directors’ compensation is paid in restricted Deere & Company stock. • The board has five chartered committees, Corporate Governance, which includes an environment, health, safety, and climate program review, Audit Review, Compensation, Pension Plan Oversight, and Executive. • A majority of directors must be independent. Deere & Company Chief Executive Officer Robert W. Lane is the Chairman of the Board and currently the only member who is an employee of the company. By charter, the Corporate Governance, Audit Review, and Compensation committees are made up of independent directors. • Board policy calls for many of the conventional functions of John Deere’s Board of Directors reflects the company’s complexity and its global presence. Board members come from a variety of countries, professions, and cultures. Board members are, from left, Antonio Madero B., Vance D. Coffman, Dipak C. Jain, Crandall C. Bowles, T. Kevin Dunnigan, Robert W. Lane, Arthur L. Kelly, Thomas H. Patrick, Richard B. Myers, Joachim Milberg and Aulana L. Peters. 10 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 10 ETHICS AND COMPLIANCE e-mail; and a post office box as alternative means for confidential reporting of possible unethical or improper actions. We choose to operate Deere & Company by a standard of business ethics that is rooted in the company’s core values. We are committed to living our values and, through doing so, building a business as great as our products. Social Responsibility – John Deere takes seriously its responsibility to the communities in which it has a presence. Employees are encouraged to participate in community service as may be appropriate on a voluntary basis. The company is also committed to conducting its worldwide business operations in a manner that safeguards people and sustains the environment through the design of its products and the conduct of its operations. Our products should not pose unreasonable risk of injury to persons or damage to property. Safety is an integral consideration in the development of products. The company has for many years had a formal statement, the Deere & Company Business Conduct Guidelines, that describes how we will do business. We will always strive to abide by the law, and, as demonstrated throughout the history of the company, we will adhere to the highest ethical standards. The Business Conduct Guidelines address human and business relationships, business ethics, and social responsibility. OFFICE OF CORPORATE COMPLIANCE: FOSTERING AND MAINTAINING AN ETHICAL CULTURE Human Relationships – The company’s commitment to human rights is a fundamental element of its daily operations. Our objective is to be an exemplary global corporate citizen. Employees are expected to: While our ethical standards are deeply rooted in our culture, we take additional measures to help ensure consistency and compliance. • honor the human rights and respect the individual dignity of all persons globally; In 2001, the John Deere Office of Corporate Compliance was established in response to the increasing complexity of laws, regulations, and cultural practices in the global markets where John Deere does business. The role of the Office of Corporate Compliance is to provide the company and employees with guidance on compliance with law and adherence to all aspects of the company’s Business Conduct Guidelines, policies and practices. • support diversity and equal opportunity in employment and freedom of association; • not tolerate unlawful discrimination in company workplaces; • continually work to provide safe and healthy workplaces for all employees; and • reject the use of any form of forced or indentured labor or child labor in the production or manufacture of goods. The Office of Corporate Compliance conducts continuous training, communications, and sharing of best practices throughout John Deere’s operations to ensure and enhance compliance with all laws and regulations. It provides employees with access to all of John Deere’s global policies, and provides guidance to employees in their responses to complex and sometimes ambiguous business and cultural situations. Business Relationships – Our business relationships must be mutually beneficial — that is, the relationship has to be a good one both for the other party and for the company. Commercial relationships with all parties must not be tainted by favoritism or unethical practices. Privacy – Maintaining and respecting the privacy of current and prospective customers, employees, retirees, dealers, suppliers, and investors is critical to John Deere’s continued global success. The company is dedicated to complying with applicable laws concerning privacy. John Deere is well-regarded for its governance and compliance policies and its heritage of ethical business practices and good corporate citizenship. The company regularly appears among the top-rated companies in CRO magazine’s ranking of publicly held U.S. companies (published by Business Ethics magazine until it merged with CRO last year). The magazine’s latest ranking of 1,100 companies appears in its January/February 2007 issue. Business Ethics - Employees who observe what they believe to be unethical or improper actions are encouraged to contact company officials about their concerns. John Deere also maintains a compliance hotline, available 24 hours a day; anonymous 11 2006 Citizenship Brochure Page 11 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black OUR STEWARDSHIP Sustained growth and well-being require husbanding the planet’s resources for our own and future generations. Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 12 T A company-wide focus on quality extends to our EHS programs, which emphasize continuous improvement. We believe that this commitment to the responsible management of human and natural resources contributes to the sustainable growth of our company. To this end, the company is committed to: THE WORLD AND OUR PLACE IN IT John Deere places great value on environmental protection and human safety. We believe that our commitment to the responsible management of human and natural resources contributes to the sustainable growth of our company. • making EHS considerations a priority in business planning and decision-making; As a global manufacturer, we strive to conduct our business in a manner that safeguards our employees, customers, community neighbors, suppliers and the environment. • developing and implementing EHS management systems at each unit to assure regulatory compliance; • providing adequate financial and human resources for EHS programs; Our operating processes reflect this commitment to environmental protection through energy-efficient systems and waste elimination and reduction. When investing in new products, approaches or technologies, we give preference to those that have the most favorable impact and safeguard our customers. • implementing controls and reports necessary to monitor performance; and • promoting a healthy workplace through health management programs. By their very nature, many of our products interact with the environment to achieve their purpose: improving the human condition. We recognize and willingly accept our responsibility to promote efficient, responsible use of natural resources while preventing or minimizing unfavorable impacts. ENVIRONMENTAL, HEALTH & SAFETY MANAGEMENT SYSTEM John Deere’s long traditions of environmental stewardship and commitment to safety in the workplace are integrated throughout the company’s operations through the John Deere EHS Management System. The system is a set of formal, documented processes for controlling environmental, health and safety impacts and driving continuous improvement. It provides the framework for John Deere facilities to meet legal obligations and company standards everywhere the company does business. The system includes elements from published standards ISO 14001, OHSAS 18001, ANSI Z10, and Deere & Company’s Business Conduct Guidelines. Significant resources and effort are dedicated to designing products that meet customer needs most effectively and efficiently while minimizing environmental disruption and sustaining natural resources. EHS POLICIES AND PRACTICES The Deere & Company Environment, Health & Safety (EHS) Policy requires that wherever we do business we will comply with the spirit and intent of all applicable EHS regulations. 4OTAL7ASTE KILOGRAMSPERTONOFPRODUCTION 13 2006 Citizenship Brochure Page 13 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black The John Deere EHS Management System is composed of four sections – assessing, planning, implementing, and reviewing. All John Deere manufacturing sites are required to have management systems in place that meet the John Deere EHS Management System or have ISO 14001 and OHSAS 18001 certification. • External Audit Program: Under the EHS External Audit Program, teams of John Deere auditors from throughout the company are led by external auditors to review compliance to environmental, health and safety legal obligations and conformance with the John Deere EHS Management System at our manufacturing and parts distribution facilities. Facilities may be audited every one to four years, depending upon EHS risk, status of program development, unit performance, and the time since any previous audit. In addition, the Deere Production System, a set of common tools and processes being implemented throughout John Deere, includes an audit process that contains audit protocols on safety and ergonomics against which all facilities are measured. The John Deere EHS Management System ensures each unit manages EHS risk consistently around the world including taking potential EHS risks into account when designing or changing processes, using new materials, tools or equipment, or making other changes. John Deere considers protection of the environment and the safety of employees to be the responsibility of all employees, and therefore requires training programs at all locations. The general manager at each location is accountable for the unit’s EHS performance. These audits provide assurance that environmental and safety policies and standards are implemented worldwide. Progress on corrective actions is reported quarterly in audit scorecards provided to the company’s worldwide management team. AUDITS AND ASSURANCE • Self-Audit Program: The Self-Audit Program complements the External Audit Program. The scope of a unit’s self-audit depends upon the environmental, safety and health risk of the facility. John Deere’s EHS assurance program is composed of three elements: an annual compliance-assurance letter, an external audit program, and a self-audit program. • Compliance Assurance Letter: Annually, the company chairman requires managers of John Deere manufacturing and parts distribution facilities to provide formal documentation of their facilities’ efforts to appropriately manage risks and safeguard employees and the environment. These letters are submitted to the corporate EHS director with copies to members of the company’s senior management team. 2006 ENVIRONMENTAL HIGHLIGHTS • The John Deere Davenport Works was accepted into the U.S. Environmental Protection Agency’s Performance Track program, a voluntary partnership that encourages and rewards top environmental performances among U.S. companies. • Deere-Hitachi Construction Equipment Machinery Corporation in Kernersville, N.C., received an award from the city for (AZARDOUS7ASTE KILOGRAMSPERTONOFPRODUCTION 14 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 14 The development of alternative energy sources is important to John Deere and its customers. 2006 Citizenship Brochure Page 15 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black one year of perfect performance by the factory’s wastewater treatment facility even though during the same period the factory increased production by 61 percent, hired 500 new employees, and had a 65-percent increase in wastewater volume. GHG, emissions from current operations while ensuring that any new facilities minimize them. In addition, the company continues to reduce its products’ emissions, which helps customers reduce their GHG emissions. As part of that effort, the company has become an early member of the United States Climate Action Partnership. • Motores John Deere, Torreón, Mexico, earned Clean Industry certification by Mexico’s Environment and Natural Resources Department (PROFEPA). The two-year certification is issued to businesses that pass an analysis of the environmental impacts of equipment and processes used in manufacturing and service. Certification requires an initial environmental assessment by a third-party registrar. The factory assembles engines and axles as part of John Deere Power Systems. TRACKING OUR EMISSIONS John Deere began its energy efficiency program in 1972 with our North American units. The program includes implementing energy conservation programs and tracking energy use. In 2003, John Deere began its worldwide GHG inventory program. Between 1972 and 2006, the energy conservation programs reduced the company’s total GHG emissions by 63 percent per ton of production. • The company’s new tractor factory in Montenegro, Brazil, was designed and constructed with respect for the environment. About 25 percent of the building site is maintained as undisturbed nature habitat. Disturbance to the land was minimized through tree relocation and the planting of four trees for every one that had to be removed during construction. In addition, all wastewater is treated on-site and recycled to water vegetation, minimizing the use of potable water for irrigation. There are no buried tanks at the site and no floor drains. Groundwater monitoring wells have been installed, the factory uses low-emission paints, and water curtain technology helps control paint-booth emissions. Minimal-energy-use principles were used to select energy-efficient motors, lighting design and energy management systems. As part of the company’s commitment to reduce greenhouse gases, in early 2007, Deere & Company joined the U.S. Environmental Protection Agency’s Climate Leaders program, a voluntary initiative in which the EPA works with companies to set aggressive long-term emission-reduction goals. The company is currently working to ensure its inventory process is consistent with the program’s inventory guidance. When that process is complete, the company will begin working with the EPA to set emissions-reduction goals. Greenhouse gas emissions from John Deere operations are mostly carbon dioxide. Less than 3 percent of emissions are of other greenhouse gases (CH4, N2O, HFCs, PFCs, SF6). John Deere measures its GHG emissions in tons of carbon dioxide equivalent per ton of production. The company’s GHG inventory protocol classifies emissions into two categories, direct emissions from site operations and indirect emissions from CLIMATE CHANGE The impact on global climate from the emissions of carbon dioxide, or CO2, and other greenhouse gases is a global business issue. John Deere is working to reduce greenhouse gas, or 0ROCESS7ASTEWATER CUBICMETERSPERTONOFPRODUCTION 16 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 16 electricity and steam purchases. In 1972, approximately 17 percent of our GHG emissions were indirect. In 2006, indirect emissions accounted for more than 60 percent of the company’s GHG emissions. 40 percent. All energy generated by the cells is fed into the factory’s power grid. • New paint systems were completed at both John Deere Werke Bruchsal in Germany and John Deere Davenport Works in the United States. Both systems were designed to minimize energy and material usage. The result: a combined reduction of more than 1,500 tons of greenhouse gas emissions annually. Since 2004, our climate program results and strategy have been reviewed annually with senior management. 2006 FACILITY ENERGY EFFICIENCY HIGHLIGHTS • Maschinenfabrik Kemper GmbH & Co. KG, a John Deere unit in Stadtlohn, Germany, has replaced disposable plastic packaging with returnable bags. That has cut cycle time by two-thirds and reduced emissions from the propane formerly used to heat the shrink-wrap the plant was using. The factory manufactures headers for self-propelled forage harvesters and stores finished goods outdoors until they are shipped to John Deere dealers. • The John Deere factory in Enschede, Netherlands, replaced an outdated building with a larger, more energy-efficient one. The move immediately cut natural gas use by 25 percent and electricity consumption by 20 percent. The new building was designed to use more natural light, improving the work environment. The factory reduced energy consumption further with the installation of a new compressor. During the winter, air used to cool the compressor is used to heat adjacent areas. • John Deere factories in Dubuque and Davenport, Iowa, partnered to change how steel scrap from laser-cutting and flamecutting operations is recycled by sorting it and sending it directly to the company’s foundry in Waterloo, Iowa. The change eliminated a more-circuitous recycling process that included a recycler and additional transport requiring more energy usage. • John Deere Waterloo (Iowa) Works redesigned and relocated its heat treat operations, moving 42 pieces of equipment from eight building locations to a single 70,000-square-foot building and adding 25 new pieces of equipment. The move resulted in a 50-percent reduction in natural gas, decreased material handling and a reduction of more than 8,000 tons of greenhouse gas emissions annually. RESEARCHING AND PROMOTING ALTERNATIVE ENERGY SOURCES • In Germany, John Deere Werke Mannheim has installed photovoltaic cells to turn sunlight into energy. A solar panel measuring 3,940 square feet, which is thought to be the largest of its type in Germany, is embedded in the roof of the factory’s apprentice workshop and can generate up to 45,000 kilowatthours of electricity annually. A second, smaller panel uses an electrically powered tracking system to ensure the panel is always directed toward the sun, increasing its energy yield by )NDIRECT%MISSIONS $IRECT%MISSIONS Raising awareness of green power options, the John Deere parts distribution center in Dallas, Texas, is one of the U.S. EPA’s Green Power Partners participating in the agency’s Fortune 500 Green Power Challenge. The goal of the challenge is for participating companies to buy a total of more than 5 billion kilowatt-hours of power from alternative sources by the end of 2007. #/%MISSIONS TONSOF#/EQUIVALENTPERTONOFPRODUCTION 17 2006 Citizenship Brochure Page 17 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black In 2006, the United Soybean Board presented John Deere with its Outstanding Achievement Award for the company’s biodiesel factory fill program. In early 2005, John Deere began using a 2-percent biodiesel blend as the preferred factory fill in machines made in the United States. Since then, John Deere facilities have used more than one million gallons of the biodiesel blend. In addition, Deere was recognized by the U.S. National Biodiesel Board in 2006 with an Industry Partnership award for promoting the use of biodiesel. Besides using biodiesel to fuel new products and promoting its development and use in the industry, John Deere commits part of its research and development spending to research into other energy sources. Wind energy, too, is an area of alternative energy focus for the company. For example, John Deere partnered with developer Wind Capital Group and Missouri’s Rural Electric Cooperatives to begin work on the state’s first utility-scale wind energy project in northwest Missouri. The 50-megawatt project, named “Bluegrass Ridge” in tribute to the area’s historic role in bluegrass seed harvesting, will produce enough power for 30,000 homes. Springfield, Missouri-based Associated Electric Cooperative, Inc., will purchase the project’s power output and distribute it through its network of regional and local rural electric cooperatives. John Deere provides financing for the project through its John Deere Wind Energy business unit. Farmers involved in the project area receive annual lease payments and the area benefits from job creation and an expanded tax base. That project was just one of many. At the end of 2006, John Deere’s wind energy business had 45 turbines in operation with generating capacity of 55 megawatts, representing an investment of $65 million, and an additional $245 million in projects were under construction. For its financing of community-based wind energy projects, John Deere Wind Energy was named a runner-up for a renewable-energy financing award by investment firms Euromoney Institutional Investors PLC and Goldman Sachs. 18 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 18 ENERGY LEADERSHIP John Deere uses its technological prowess and market presence to help educate people about the possibilities of less-harmful ways of creating energy. In Germany, John Deere Werke Mannheim partnered with a new regional energy efficiency agency to host an exhibit on renewable energy. More than 40 companies from throughout Germany participated in the two-day event, which provided information and demonstrations of photovoltaic technology, biogas production, alternative heating systems and other renewable energy technologies. Almost 2,500 people visited the exhibition, which filled the indoor display floor of the factory’s visitor center and some outdoor areas. The exhibition was jointly organized by John Deere Werke Mannheim, Mattfeldt & Sänger, a specialist on environmental fairs, and the Energy Efficiency Agency of the newly formed Metropolitan Region Rhine-Neckar. The regional initiative aims to integrate the population across the borders of the three German states of Hessia, Baden-Württemberg and RhinelandPalatinate. The visitors’ train at the Parc Floral in Orléans, France, is now powered by a quieter and cleaner John Deere engine thanks to John Deere distributor Equip’ Jardin. With the aid of a grant from the European John Deere Goodwill Fund and help from the John Deere marketing division in Ormes, a donated 60-kilowatt John Deere 4045T engine was installed in the train. The upgraded train improves the visitor experience and the environment. The engine produces 75 percent less pollution than the engine it replaced. The small train takes visitors on a 3-kilometer tour around the site. The Parc is one of France’s 10 most-visited attractions, drawing about 145,000 visitors every year who are attracted by the park’s reputation for clean air and tranquility. Product designs take into account the work that will have to be done in assembly by employees such as those building tractor and combine cabs at John Deere’s Bruchsal, Germany, factory, left. 19 2006 Citizenship Brochure Page 19 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black WORKPLACE SAFETY AND HEALTH • Also during the year, the John Deere Waterloo (Iowa) Works Foundry passed 4.4 million employee hours, or more than five years, without a lost-time injury, exceeding its previous safety record. Safeguarding employees has been a priority at John Deere throughout its history, and the company’s commitment to the safety and health of employees remains a fundamental requirement at all John Deere operations, contributing to the sustainable growth of the company. • In Tokoroa, New Zealand, where 66 employees manufacture forestry harvesting equipment, John Deere’s Waratah factory completed its fifth year without a lost-time incident. Employees show that they value a workplace where they are safeguarded from injuries through their loyalty, increased productivity and quality, and reduced absenteeism. Other benefits of a focus on safety and health include lower than average workers’ compensation costs. • John Deere’s Pune, India, operation exceeded 2 million hours without a lost time injury in 2006. • The company’s worldwide headquarters, in Moline, Illinois, surpassed 22 million hours without a lost-time injury. John Deere’s goal is zero injuries. This aggressive goal, coupled with the company’s historical emphasis on employee safety and health, has made John Deere factories among the safest in the world. • The John Deere facility in Horst, Netherlands, reported in 2006 that it had not had a lost time injury in over four years. • John Deere’s Zweibrücken, Germany, facility reached 3.6 million hours without a lost-time injury during the year. The company’s worldwide injury frequency rate improved 7 percent in 2006 compared with 2005, and its severity rate improved 23 percent from levels already far lower than the averages in even non-manufacturing sectors. Enterprise-wide, those measures are at their lowest rates in history even though the company has added 18 facilities to its safety measurement system over the past three years. • The company’s Waterloo (Iowa) Works posted more than 18.7 million hours without a lost-time injury. • John Deere operations in Jiamusi, China, achieved 1.5 million hours without a lost-time injury. • The company’s Greeneville, Tennessee factory, which, as part of a U.S. Occupational Safety and Health Administration program, is a Voluntary Protection Plan site for maintaining safety excellence, reported that it had logged eight million work hours without a lost-time injury. In 2006, the U.S. National Safety Council presented 79 awards to 41 John Deere units for their safety performances, adding to an impressive record: In the past 30 years, John Deere units have received more than 900 safety awards from the agency. ERGONOMICS At the end of fiscal year 2006, there were 26 John Deere facilities that had each worked more than a million hours without a lost-time injury. One reason for John Deere employees’ success in creating safe work environments is the company’s long history of research into ergonomics, or designing work and workstations to eliminate repetitive and awkward movement. Doing so helps reduce stress and eliminate many potential injuries and disorders associated with the overuse of muscles, bad posture, and repetitive tasks. The practical application of ergonomics remains a primary driver in John Deere’s efforts to reduce workplace injuries through continuous improvement principles. Among other safety landmarks celebrated in 2006: • John Deere’s European factories’ frequency rates fell to 88 percent below the European metal-working industry average. • Lost-time injury frequency rates at John Deere’s Mexico factories are 89 percent below the average for agricultural equipment manufacturing, according to statistics maintained by the Mexican Labor Ministry. As part of that effort, the safety department at the John Deere Waterloo (Iowa) Works has built a virtual reality theater, one of only four such facilities in the world dedicated to optimizing ergonomics in manufacturing. Virtual reality lets engineers and others immerse themselves in a computer-generated representation of a work environment to examine product and component designs for potential safety and ergonomic hazards before manufacturing begins. • John Deere’s China factories have lost-time injury frequency rates that are 88 percent below the U.S. industrial machinery and equipment industry average. • During 2006, John Deere Welland Works in Canada surpassed 4.8 million employee hours, or almost three years, without a lost-time injury. The application of advanced technology is an important ad- 20 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 20 Between 2005 and 2007, the company produced three television programs to help educate large property owners about standard safety principles for operating and maintaining their equipment. 2006 Citizenship Brochure Page 21 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black vance, but practical experience continues to drive the company’s ergonomics training. An Ergo Daze event in 2006 at the John Deere Des Moines Works, for example, helped increase employees’ awareness of ergonomics-related injuries and prevention by assigning manufacturing engineers to job shadow assemblers for three days. Through the event, engineers were better able to understand how improved product manufacturing designs can affect workmanship, efficiency and the health of assemblers. Assemblers had the opportunity to provide suggestions for improvement. Together, the participants identified 83 potential ergonomic and safety issues that were then assigned to several groups for resolution. An added benefit of such exercises is that the knowledge gained can be passed on to dealers and customers who maintain John Deere equipment. OFF-THE-JOB SAFETY S By tracking off-the-job injury statistics, the company is able to tailor specific safety messages covering risks away from work to employees at individual facilities. In addition, many units host safety and health fairs, promoting everything from hunting safety to cholesterol screening and awareness. OCCUPATIONAL HEALTH AND INDUSTRIAL HYGIENE By participating in professional organizations and monitoring regulatory news, the company’s occupational health and industrial hygiene professionals provide expertise for evaluating potential employee exposures to hazardous materials. They also manage employee injuries and illnesses to minimize impacts to the employee and productivity; protect the confidentiality of employees’ medical information; and ensure that all units have medical emergency action plans that include consideration of 0.42 0.35 0.29 0.27 03 04 05 06 Lost-Time Injury Frequency Rate ( injuries per 200,000 hours worked ) 22 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black t a s e w In addition to injury prevention, occupational health services are provided on-site at John Deere’s large units. Another reason for John Deere’s enviable safety record is the work of continuous improvement teams. The Continuous Improvement Process, originally a joint Deere and United Auto Workers union initiative that is now used throughout the company, has work teams of production employees setting quarterly goals in the areas of quality, safety, efficiency, and delivery. 02 a d c t g w John Deere’s safety ethic isn’t limited to its factories. The company encourages employees to apply safety principles in their homes, too. At John Deere Turf Care in North Carolina, a team of 13 employees conducted a different kind of ergonomics event: a fourday RAPID, or Risk and Performance Improvement Deployment. Their assignment was to identify ergonomic risk factors, quickly implement solutions to eliminate those risks, and plan for longer-term solutions where necessary. The team reviewed 18 work stations and identified more than 100 opportunities for improvements. 0.29 Safety goals are set based on frequent safety audits, production employees’ experience and observations, and formal gap analysis tools. The teams then undertake projects to make their workplaces safer, and share their project results with other CI teams from their own and other facilities. The result: Hundreds of safety-improvement projects are completed every quarter throughout the company. 2006 Citizenship Brochure Page 22 t c s c automatic external defibrillators. Occupational health and industrial hygiene services include providing guidelines on medical surveillance of employees who work in positions where they could be exposed to hazardous materials, and providing guidance and support to a community of practice made up of wellness advocates. The community of practice can implement programs to improve employee health. John Deere Injury and Illness Rates Compared to Selected Industries (Frequency rate: Cases involving days away from work and deaths per 200,000 employee hours worked) Such added programs can build on company-sponsored wellness programs already available to help employees maintain their health and balance their personal and work-life needs. The programs provide resources such as health risk assessment tools and health coaches who deliver personalized education and support to assist employees in maintaining or improving their physical, mental and social well-being. Many John Deere units have on-site fitness centers, while others subsidize memberships at nearby health clubs. Individual units also regularly offer health fairs and educational seminars where employees can receive free screenings and gain valuable information about their health. In 2006, the company added to its health services by developing an enterprise-wide pandemic influenza planning procedure that individual factories and offices will use to create local response plans. 0.18 John Deere China 0.21 Finance,Ins., Real Estate 0.30 John Deere Mexico 0.32 John Deere S. America 0.46 Electronic Equip/Computer 0.50 John Deere Europe 0.71 Apparel 0.80 Aircraft 1.00 Telecommunications 1.10 Lawn & Garden Equipt. Mfg. In the event of a pandemic, or global disease outbreak, the company’s employees will thus be well-informed as to the steps they should take to protect their health and that of their co-workers. John Deere U.S. & Canada 1.10 Printing 1.10 Services 1.20 Grain Milling 1.20 Utilities 1.30 Mining 1.50 Food Mfg 1.60 Furniture 1.70 Farm Machinery & Equipt. Mfg. 1.80 Construction Machinery Mfg. 2.10 Motor Vehicles 2.20 Warehouse & Storage 2.20 Construction 2.40 Forestry & Logging 2.80 Iron & Steel Foundries 2.90 Trucking 2.90 (Sources: John Deere; U.S. Bureau of Labor Statistics) ,OST4IME)NJURY3EVERITY2ATE DAYSLOSTPERHOURSWORKED 23 2006 Citizenship Brochure Page 23 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black OUR PRODUCTS Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 24 V VALUES IN MOTION John Deere’s fundamental values – integrity, quality, commitment, and innovation – are expressed in our products as well as in the way we make them. Our products are known for their quality, reliability, innovative designs, and performance. All John Deere products incorporate features to lessen environmental impact or advance sustainable production and efficiency. EFFICIENCY AND PRODUCTIVITY John Deere’s PowerTech Plus family of diesel engines boasts best-in-class fuel economy as well as increased performance and power density compared with earlier engines while meeting strict U.S. Environmental Protection Agency Tier 3 and European Union Stage III emission requirements. The company’s PowerTech E 4.5L and 6.8L engines are also Tier 3 certified by the U.S. EPA and Stage III A certified by the European Union. Customers thus have a wide variety of environmentally friendly engine options that don’t compromise on performance. Coupling these engines with John Deere’s leading transmission designs, the company’s products achieve remarkable efficiency levels. The John Deere 8430 Tractor set a record for lowest specific fuel consumption among row crop tractors at the University of Nebraska Tractor Test Laboratory, the officially designated tractor testing station for the United States. The 8430 was equipped with the PowerTech Plus 9.0L engine coupled to the John Deere Automatic Power Shift transmission. The PowerTech Plus engine features variable geometry turbo and cooled exhaust gas recirculation in a more-powerful, cleaner-burning design. It incorporates the new Vari-Cool cooling system with precise control for fan speed and air flow. The John Deere 350D Excavator with Tier 3-certified John Deere engine provides more horsepower than its predecessor using the same amount of fuel. Among fuel-saving features: Auto-idle reduces engine speed when hydraulics aren’t in use. are easy to transport and store. A bundler that sits on a forwarder chassis compresses the residue into standard-sized cylindrical bundles called slash logs that can be picked up by standard logging trucks and delivered to power plants. A slash log normally weighs 500kg-700kg and contains about 1MWh of energy, or the equivalent of about a half a barrel of oil. PRODUCTS FOR SUSTAINABILITY The environmental benefits of no-till farming methods, pioneered by John Deere, are easier to realize with such products as the John Deere 1770NT Planter, which was named the 2006 No-Till Product of the Year at the 15th annual National NoTillage Conference. Featuring MaxEmerge XP or Pro-Series XP row units, the planter provides outstanding seed spacing accuracy, depth control, and seed-to-soil contact for superior germination, bulk seed filling for more efficient no-tilling, and has a narrow transport width for maneuvering along tight country lanes. Machine performance is just one aspect of John Deere’s focus on environmental impacts. Just as important is what goes into our products and how they’re used. John Deere uses recycled or renewable materials in its products, such as a B2 biodiesel blend as factory fill and corn- and soy-based plastics for components of our combines and some tractors. The John Deere 1490D Energy Wood Harvester is a direct contributor to alternative energy use. It creates fuel bundles from logging residue by compressing the residue into bundles that John Deere’s GreenStar AutoTrac assisted steering system helps farmers conserve agricultural inputs while decreasing environmental impact and fuel consumption by using GPS to steer the vehicle down the field. In 2006, John Deere announced a completely automated system, iTECPro, for intelligent To- John Deere product design benefits from eight simulation laboratories, like this virtual reality lab, left, that can help engineers quickly get innovative new products to market. 25 2006 Citizenship Brochure Page 25 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black tal Equipment Control. Besides guiding the tractor precisely through the field, the system also automates implement controls, speed, and headland turns, further reducing input costs and fuel usage. RESOURCE MANAGEMENT John Deere Agri Services offers even higher levels of precision and efficiency in land use. Its OptiGro service, for example, uses digital aerial imaging to create maps from which agronomists can generate plot-specific prescriptions. These prescriptions can be downloaded to Swath Control Pro-equipped John Deere sprayers to deliver chemicals precisely and only where needed. The end result is uniform crop growth that increases yields and makes harvesting far more efficient while minimizing chemical use and field passes. Agri Services’ digital multispectral imagery enables better environmental management. Large-scale environmental changes such as fire damage, flooding, erosion, or chemical spills can be quickly located and quantified and effects tracked over time, which allows for the most effective containment and solution planning. John Deere Agri Services digital multispectral imagery enables large-scale environmental changes to be quickly located and quantified for efficient environmental management. Agri Services’ Soil Information System spots field-level soil variability to enhance the design of a new planting or to troubleshoot fertility problems. The system uses special machines that combine a suite of sensors with GPS to probe the soil and collect readings on soil compaction, texture, moisture, and resistivity at levels of resolution previously unavailable. Armed with three-dimensional maps detailing physical and chemical soil variability at a sub-inch level of accuracy, producers can undertake soil management practices that enhance design, productivity and conservation. ago saves energy equal to 10.7 million barrels of crude oil. Also, because products that are remanufactured are kept out of the waste stream longer, landfill space is preserved and air pollution is reduced. Other studies have shown that about 85 percent of the energy expended in the manufacture of the original product is preserved in the remanufactured product. John Deere’s Phoenix Reman Group, which includes Phoenix Piston Hydraulics Inc., in Edmonton, Alberta, Canada, provides remanufactured hydraulic and powertrain components to manufacturers of heavy equipment. ReGen Technologies L.L.C., a joint venture between John Deere and SRC Holdings Co., remanufactures engines, fuel systems and engine components for John Deere at its plant in Springfield, Missouri. Water management is another critical aspect of our customers’ businesses and a focus of John Deere’s growth. The company’s John Deere Golf & Turf One Source, a service platform through which the company provides products and services for golf courses, launched John Deere Golf Irrigation in early 2006. In June, John Deere acquired Roberts Irrigation Products, a manufacturer of high performance plastic micro and drip irrigation products for the agricultural, nursery, and greenhouse markets. Both businesses help customers effectively manage water to improve plant health, and reduce the use of chemicals. The company recently expanded the Missouri factory, increasing its total floor space to 133,000 square feet. The expansion increases both production space and room for core storage. PRODUCT SAFETY As a global manufacturer, John Deere strives to conduct its business in a manner that safeguards our customers. Appropriate features are built into John Deere products in an effort to help protect operators from injury, illness and fatigue. User understanding is also key to safety, and we are committed to helping customers learn the most effective and safest ways to operate and maintain our products. REMANUFACTURING: THE ULTIMATE IN RECYCLING John Deere has been involved in remanufacturing engines, components, and hydraulic pumps for more than a decade. Remanufacturing has well-known environmental benefits. Studies performed at the Fraunhofer Institute in Stuttgart, Germany, suggest that worldwide remanufacturing at levels of a few years 26 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 26 At John Deere, product safety is guided by a single principle, the General Rule for Product Safety. It says that an acceptable design is one that does not present an unreasonable risk of injury to a product user or others in its vicinity. John Deere factories have product safety committees and product safety facilitators that carry out the safety review process during both product improvement and product development. This includes undertaking comprehensive safety reviews using such tools as John Deere’s Hazard Discovery and Rating System, checklist-based reviews, Failure Modes and Effects Analysis, and the Quantitative Safety Risk Assessment. Product safety is an integral part of product development. Employing the company’s virtual reality technology to explore design issues such as visibility, control placement, headroom and ergonomics regularly results in product innovations related to safety. For example, the ComfortGard cab available on popular John Deere 3000 Twenty and 4000 Twenty series compact utility tractors earned the AE50 Award from the American Society of Agricultural and Biological Engineers. The award cited the cab’s intuitive operating systems, its design for operator comfort, and its unobstructed foot deck. The cab is sealed and pressurized to maintain a dust-free operator environment and the unique offset mounting system reduces noise levels for an ultra-quiet ride. Able to harvest the debris, or slash, left during forest management, the John Deere 1490D Energy Wood Harvester creates energy packets out of material that would otherwise go to waste. At the corporate level, the Product Safety Department monitors safety developments inside and outside the company to assure they are communicated among company units. Product Safety professionals participate in safety-related trade associations and standards development organizations. They also maintain a product incident reporting system that helps to guide design changes in new or existing equipment. Realizing that the most important safety element of any machine is the operator, John Deere works with customers, John Deere dealers and external safety organizations to promote proper use and maintenance of its products. The company and its divisions and units provide training resources such as videos, posters, brochures, and guides. The company also encourages dealers to promote safety in their communities through local John Deere Safety Days. Besides regular training programs for professional equipment operators, the company delivers safety DVDs with new lawn and garden tractors to help consumers learn to operate equipment safely. Between 2005 and 2007, the company produced three television programs to educate a growing customer segment known as large property owners, who typically have country acreages but may not be aware of standard safety practices for the equipment they buy to maintain their land. The view from inside a John Deere ComfortGard cab isn’t much different from that of an open station, but there’s far less noise and no dust. 27 2006 Citizenship Brochure Page 27 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black OUR EMPLOYEES Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 28 A ALIGNED TEAMWORK John Deere’s 47,000 employees around the world invest their time, intellect, talent and energy to help the company build and grow a business as great as our products. Talented, diverse employees understand customers and are committed to their success. Employees set high quality standards, manage assets wisely, generate new ideas, keep the company competitive, open new markets, protect the environment, operate safely, support each other and our communities, and act with integrity. THE WAY WE WORK TOGETHER: ALIGNED HIGH-PERFORMANCE TEAMWORK The first two elements of the company’s three-pronged strategy (exceptional operating performance and disciplined growth) rely heavily on the third element: aligned high-performance teamwork, which enables John Deere employees to focus on the most important metrics and concentrate their efforts toward common goals. As a highly decentralized company, John Deere encourages decision making at the closest point of use. Therefore, it is important to have uniform processes, approaches and systems that allow for both focus and immediacy. Three key tools have been implemented across the worldwide salaried workforce to support aligned high-performance teamwork. In 2006, the company was recognized as one of the top 25 world leaders in HR practices by Human Resource Executive magazine, in great part due to the consistent application of these advanced tools. • The Global Performance Management System (GPMS), an online tool, clarifies the ways in which goals can be met – business unit by business unit, department by department, and individual by individual. Over 18,000 salaried employees participate with management in the creation of their annual performance plans, mid-year reviews and year-end appraisals. All employees are expected to accept responsibility for achieving specific business results. At the same time, employees need appropriate resources, including feedback, to be fully successful. Objective and fair appraisal of employee performance is vital. Employees are evaluated on what is accomplished and on how the results are achieved. Managers and employees share the responsibility to engage in both formal and informal performance discussions. • The Total Rewards Strategy (TRS) provides competitive total John Deere’s processes and systems are all designed to foster aligned high-performance teamwork. compensation for good company performance. John Deere aims for upper quartile total compensation for great company performance. In both 2005 and 2006, the company achieved great performance and paid out at its maximum range for short- term bonuses (linked to a single year’s performance) and mid-term bonuses (linked to a rolling four-year cycle to encourage sustained performance). The benefits provided to our employees are also calculated as part of TRS. In keeping with the laws specific to each country in which it has operations, John Deere provides a broad range of highly competitive health and other insurance benefits as well as retirement funding mechanisms. • The Global Job Evaluation (GJE) process carefully defines and evaluates the salary range level of every position in the company, according to a methodology developed by the Hay Consulting Group, the world’s leading human resource experts. Factors affecting the rating a position receives can include responsibilities, level of strategic contribution, span of control, budget and management requirements, revenue generation potential, degree of complexity and sophistication, specialization of skills, educational requirements and experience. GJE positions are supported by development paths that help employees understand how to progress from one level to another to advance in their careers. The company has established respectful and inclusive relationships with its wage employees as well, whether they are represented by unions or works councils or are independent. In addition to job-training, wage employees learn about our financial and operating metrics and, in most cases, when productivity targets are met these employees also have the opportunity to share in the success of the company. Under a process known as CI, for Continuous Improvement, production employee teams also set their own goals for quality, efficiency, delivery, and safety improvements. They then create projects, typically within their work areas, to reach those goals. In addition, employees are rewarded for improving productivity. PERSONAL DEVELOPMENT In 2005, a new career-development process was introduced to John Deere’s 16,000 salaried employees in the United States and Canada that helps employees take ownership of their own progress. The process identifies “paths,” which if followed, can build the skills, experience, knowledge and competencies that could qualify an individual for a specific position. This system allows employees to own many aspects of their own career development. Employees also post internal resumes into the company’s worldwide system so that when job opportunities occur in the organization, hiring managers can search for individuals with the right skills and experience. Such a system helps 29 2006 Citizenship Brochure Page 29 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black to ensure that everyone has an equal opportunity to progress based on their abilities. The process is being expanded to other countries. EMPLOYEE NETWORKS Employees with diverse backgrounds, talents and perspectives are in the best position to help the company understand customer needs. John Deere supports a range of employee networks addressing three key factors – business, career and community. These vital and engaging groups help the company attract and retain top talent and achieve improved results, and they have supported their local communities through events and sponsorships. • John Deere Learning is a set of “colleges” and course curricula that support each of the major functions of the company, from engineering to marketing, manufacturing to finance, and human resources to supply management. “Learning paths” define and provide ways for employees to build skills and acquire knowledge and experience. • Coaching and Mentoring services are available to salaried employees to enhance individual performance. Individuals are matched up (coaches and employees or mentors and mentees) and then helped to create trusting relationships that lead to improved results. Employees report that through coaching or Networks located around the world bring together people with shared interests, gender, ethnicity, skills or specialization in order to welcome new employees, sponsor professional and technical forums, encourage a broad understanding of corporate goals, participate in community outreach programs and plan and implement social, cultural and educational events. In 2006, new networks were founded in Spain, Germany, Finland and Brazil. This past year, Minority Engineer magazine ranked John Deere eighth in its listing of the top 50 companies for minority workers; the ranking is up from 40th place in 2005. Employee networks currently include: • African-American: An inclusive group dedicated to developing the skill sets of its members to lead, assist and excel professionally and to help improve recruitment and retention through personal relationships. This network accomplishes its objectives through the creation of a collaborative environment. In 2006, this network was responsible for securing $1.6 million in new sales through relationships developed with the National Conference of Black Mayors. • Asian/Pacific Islander or LOTUS: (Lead, Organize, Teach, Unite and Support.) This group aims to promote an inclusive, collaborative environment for all employees within John Deere in order to help them accomplish outstanding business results. This group leads, assists and supports the company’s efforts to employ, develop and retain Asian/Pacific Islanders. Rigorous and comprehensive training and education programs help John Deere employees reach high performance levels. • Hispanic: This group works to improve and enrich employees’ professional performance and involvement in the community, as well as to improve communication among members. The group’s vision is unity within John Deere; its mission is to lead, assist and support the company’s effort to employ develop and retain Hispanics in the workforce. mentoring, they have been able to get started in a new position effectively, handle difficult situations, manage complex projects, deal with stress, become a better supervisor or manager, get organized or prioritize efficiently, and even overcome personal limitations. • Advanced education at community colleges, technical institutions and universities is supported by the company when such study helps employees develop skills, knowledge and competencies important to the company. John Deere provides tuition reimbursement and assistance for associate, technical, four-year and graduate degrees as appropriate. • Multicultural: These networks bring together employees from a variety of racial and ethnic backgrounds to promote understanding, create an inclusive and collaborative environment and foster personal and professional development. • New employees or NEON: (New Employee Organizational Network.) This network welcomes new employees or those 30 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 30 who are early in their careers, with the aim of helping them acclimate to the company, build networks and socialize. ways easy (especially for those who are traveling or as we near production deadlines), it is important. • Women REACH: (Relating, Enriching, Achieving, Challenging and Helping.) This network has regular meetings, forums, educational events and conferences to help women share, grow, and build professional relationships. The aim of this group is to help female employees reach their full potential. We know our employees are committed to getting their jobs done well and we understand the need to be flexible. Not only does making time for family and personal interests make for more well-rounded individuals, it also makes for more productive employees. John Deere management understands that people need to let their minds take time off from work in order that they return refreshed and ready to go. WORK-LIFE BALANCE We believe John Deere has among the best working environments in the corporate world. We offer our employees a number of options to suit their needs, from flexible schedules to telecommuting to job sharing. While we do not offer on-site daycare, we subsidize daycare facilities in a number of our communities so that employees have viable options. Additionally, some of our larger facilities have fitness centers on site. We provide access to other services to save employees time, such as a credit union, barbershop and dry cleaning. We also have a deep commitment to our local communities, which often translates into interesting and rewarding volunteering experiences – many of which can involve family members and friends. In any growing and high-performing company, employees will have peaks in their workloads. However, most employees at John Deere are able to maintain reasonable schedules much of the time. We believe employees need to make time for their families and their personal interests. Although that is not al High-performance teamwork is a vital part of John Deere’s strategy for growing a business as great as our products. A team of employees at John Deere’s Davenport, Iowa, factory celebrated production of the first articulated dump trucks under a strategic alliance with South Africa’s Bell Equipment Limited. 31 2006 Citizenship Brochure Page 31 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black OUR SUPPLIERS AND DEALERS Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 32 MONITORING ENVIRONMENTAL RISKS VALUES ACROSS BORDERS John Deere does more than require compliance with the Supplier Code of Conduct. The company also closely evaluates potential suppliers who provide services that might carry a higher-than-normal environmental risk. In those cases, John Deere environmental and supply management experts conduct an on-site environmental evaluation to assess the potential supplier’s past site history and environmental performance. Among the processes and policies reviewed are the supplier’s: John Deere’s commitment to integrity and social responsibility extends into businesses and communities around the world through its diverse and worldwide supply base and its unparalleled dealer network. JOHN DEERE SUPPLIER CODE OF CONDUCT To ensure that suppliers conduct business with integrity and in a socially and environmentally responsible manner, all of John Deere’s suppliers are expected to abide by the John Deere Supplier Code of Conduct. • operational controls; Under the Supplier Code of Conduct, suppliers: • water pollution controls; • may not offer gifts, even of nominal value, to John Deere or its employees; • solid and hazardous waste management; and • may not offer gifts to government agencies, or bribes, kickbacks, or other payments to gain business advantages; In addition, because John Deere prohibits the use of certain chemical compounds in its products and processes, all John Deere suppliers are expected to exclude these substances from materials and products they provide to the company. • environmental management system; • air pollution controls; • spill control and emergency planning. • are expected to comply with applicable local child labor laws and employ only workers who meet legal age requirements for their locations; Even when a supplier meets all the requirements, certain “environmental flags” can trigger a focused review. If the review indicates the need, an environmental re-inspection of the supplier is undertaken. Among environmental flags are changes observed on a supplier’s property, such as stockpiling of waste, evidence of chemical spillage on floors and roof surfaces, and housekeeping problems. Regulatory activities, significant events such as fires, or changes in facility water treatment capabilities, or changes in management or ownership also call for re-inspections. • must not engage in or support the use of forced or involuntary labor; • are expected to comply with all applicable local laws concerning discrimination in hiring and employment practices; • are expected to conduct their operations in a way that protects the environment and to comply with all applicable environmental laws and regulations in the countries in which they operate; and • are expected to provide safe working environments that support accident prevention and minimize exposure to health risks and to comply with all applicable safety and health laws and regulations in the countries in which they operate. SUPPLIER SUPPORT AND DIVERSITY John Deere recognizes that a sustainable business relies on strong, competent suppliers and a supply base that mirrors the diversity of its customers worldwide. In that regard, John Deere maintains programs to find, qualify, and help develop capable small and diverse suppliers. Besides adhering to the code of conduct, suppliers are expected to be familiar with the business practices of their own suppliers and sub-contractors and ensure that they, too, operate within the guidelines of the code. John Deere provides a reporting process through which suppliers or their employees can anonymously report potential violations of the code of conduct. Since 1980, John Deere’s supplier diversity program has been an integral part of our business. The company seeks out capable suppliers through a supplier diversity Web site, supplier fairs and other research by corporate and factory-based supplier diversity coordinators. Through its supplier development function, the company’s engineers routinely work with suppliers to help them improve manufacturing processes to reduce waste and costs. Engine assembly, like that at John Deere’s Torreón, Mexico, factory, left, relies on high-quality suppliers as well as highly skilled employees. 33 2006 Citizenship Brochure Page 33 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black JOHN DEERE DEALERS to crises. John Deere dealers and territory managers were among the first to enter New Orleans following the devastating storm surge that hit the coast along with Hurricane Katrina. Dealer employees from nearby cities provided assistance while assessing equipment needs, and worked to get John Deere-donated equipment into the hands of police departments in Kenner, Louisiana, and New Orleans. John Deere equipment was also presented to the Orleans Levee District, Plaquemines and St. Bernard parishes, and disaster response agencies. For most customers, John Deere dealers are the face of the company, even though dealers are, in fact, independent businesses. Our dealers accept responsibility for promoting the John Deere line in their territories and enhancing John Deere’s reputation with their customers. Our dealers are commonly leaders in the communities where they do business. To become a John Deere dealer one must be of good character, have the capability to manage and run a business, and command sufficient creditworthiness to ensure sustained successful operations. John Deere distributes information on how to become a dealer so that the company can attract high-caliber, qualified candidates with diverse backgrounds. For Deere’s three equipment divisions in the United States, for example, more than 220 dealers are members of minority groups – African-American, American Indian, Asian, and Hispanic, or are owned by women. Through its training materials and guidelines, John Deere works to help dealers operate safe and environmentally sound dealerships. Training is available to dealer employees through John Deere University courses, both classroom and online, on topics such as chemical management, including the use of refrigerants, used oil, and other potentially hazardous material. Spill prevention and control, waste management planning, and workplace and customer safety training are also made available and promoted to dealers. John Deere dealership employees work to keep John Deere machines productive and safe for customers. Training is also undertaken at product introductions, such as the one in Warsaw, Poland, in 2006, which attracted about 3,700 people from John Deere dealerships in Europe, Africa and the Middle East. Deere’s independent dealers are often significant businesses in their trade areas, providing economic opportunities for residents. This is especially true in growing markets such as Russia where John Deere is expanding its dealer networks. In developed markets, John Deere dealerships have always been important to local economies. John Deere agricultural equipment dealers in the United States, as an example, hold more than $4 billion in assets, generate more than $14 billion in revenues, and employ nearly 32,500 workers. They spend more than $65 million in advertising, sales promotion and professional services and more than $15.6 million on employee training annually. As community leaders, dealers commonly support local charities and events, sometimes by lending equipment as well as through direct monetary donations. Dealers are the face of John Deere in their communities, helping show the company’s concern for customer satisfaction and safety. As important, John Deere dealers are known for their response 34 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 34 OUR PHILANTHROPY VALUES IN THE COMMUNITY John Deere’s values – integrity, quality, commitment, and innovation – are demonstrated daily, not only in the company’s business dealings, but also in the many ways it contributes to communities and causes around the world where John Deere employees and their families live and work. Besides its formal structures and contributions program, the company encourages its employees around the world to contribute their time and talents in helping to improve the conditions of their communities. Such volunteerism is considered an integral part of employment with John Deere, and the company’s support of such efforts is seen by employees as a benefit. The company’s philanthropic structures include the John Deere Foundation, the John Deere Foundation of Canada, the European John Deere Goodwill Fund, and Fundaçaõ John Deere in Brazil. Through these entities, the company partners with public and private organizations to improve communities and provide active leadership in growth and development initiatives. John Deere supports a variety of educational programs, such as volunteer classroom instructors for Junior Achievement and partnering with SECME, Inc. to help interest minority students in technical and engineering careers. Photo courtesy JA Worldwide and StretchPhotography.com 35 2006 Citizenship Brochure Page 35 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 36 SUSTAINED GIVING THROUGH THE JOHN DEERE FOUNDATION lift 400,000 more people out of poverty. Although KickStart sells the pumps, such grants are essential to defray the costs of marketing necessary to get the pumps into farmers’ hands at a price they can afford and providing training in the use and maintenance of the pumps. Philanthropic efforts must be sustained to be effective in bettering communities and society in general. The work of the John Deere Foundation is one way the company’s philanthropy is able to have lasting effects. The foundation was established in 1948 and, since its inception, has invested millions of dollars to support education, human services, community development, and arts and culture. GROWTH PLANS The John Deere Foundation has doubled its annual giving over the past three years and anticipates awarding grants and gifts totaling $12 million in 2007. The foundation is currently funded by annual contributions from John Deere, but plans are under way to create an endowment fund by 2037, the company’s 200th anniversary. The foundation expanded its scope globally in 2005, and added Solutions for World Hunger as a fifth category of giving. As part of that expansion, the foundation established relationships with KickStart, the Food Resources Bank, the World Food Prize, and the Wheaton (Illinois) College Human Needs and Global Resources Program. Guiding the work of the John Deere Foundation is a board of directors that meets regularly to review funding requests. The board bases its funding decisions on its categories of giving, the availability of funds, the expected success of a requestor’s program, the program’s effect upon John Deere employees, and the demonstrated level of community support. FOUNDATION GIVES $3 MILLION TO KICKSTART KickStart, a non-profit organization that helps farmers in Kenya, Tanzania, and Mali get out of poverty, is a major foundation partner. EDUCATION SUPPORT: A JOHN DEERE TRADITION KickStart develops and sells low-cost equipment such as simple irrigation pumps to subsistence farmers, many of whom struggle to cultivate tiny parcels of land. This small investment often means the difference between barely growing enough to feed a family and growing enough to operate a profitable commercial farm. Education is the key to success, both for individuals and organizations. John Deere is committed to improving education for students from pre-elementary through college, helping to create a vital and diverse workforce for the future. John Deere’s support benefits a wide variety of programs, from Junior Achievement, FFA and the National 4-H Council to colleges and universities around the world. Based on sophisticated impact monitoring, KickStart reports that 85 percent of the farmers who invest in a KickStart treadle pump for small-field crop irrigation see their net incomes rise from $100 to $1,000 in the first year of using the pump. The additional income also boosts village economies as farmers spend money on health care, education and other goods. Through partnerships with organizations such as SECME, Inc., (formerly the Southeastern Coalition for Minorities in Engineering), which seeks to interest minority students in technical and engineering careers, and INROADS, a program that places students into internships, John Deere encourages students of all backgrounds to explore the possibilities of a technical career. Farmers using KickStart equipment, ranging from the pumps to an oilseed press and a simple machine to make blocks for building, have had enough success to account for a measurable impact on their countries’ economies. As of late 2006, KickStart had helped more than 47,000 families (about 240,000 people) start profitable commercial farm businesses. The European Goodwill Fund supports educational projects such as the donation of the “Young Scholar Award” of the Mannheim Center of European Economic Sciences, and the Heidelberg Center of American Studies spring academy, where 20 young scientists from all over the world spend a week in Heidelberg discussing their Masters or Ph.D. theses on issues related to American studies. A three-year, $3 million grant from the John Deere Foundation is helping KickStart expand its program into three more African countries with a goal of selling 125,000 pumps and helping to In Brazil, Fundaçaõ John Deere sponsored the publication of the book Balaio de Idéias, or Basket of Ideas, which educates children about environmental protection and issues related to climate, geography, and history. The government of São Paulo State printed 2500 additional copies of the educational book to distribute to public schools after an initial 3000 were printed. The majority of farmers who invest in the KickStart pump see their net income rise from $100 to $1000 in the first year of using the pump. 37 Photo © Alison M. Jones, www.alisonjonesphoto.com 2006 Citizenship Brochure Page 37 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black CIVIC BETTERMENT FOR ORGANIC GROWTH The historic Lanz Chapel in Mannheim, Germany, today serves as a community meeting hall, after being reconstructed in part, through a contribution from the John Deere Foundation. The chapel was originally built in 1907 next to the Heinrich Lanz agricultural equipment facility, Deere’s industrial predecessor in Mannheim. The foundation’s support of community development is important for organic growth. In 2006, the foundation approved a $500,000 grant to the Greater Cedar Valley Alliance to support economic development in Waterloo, Iowa, where a major John Deere factory is located. Another example is the $100,000 grant to the Illinois Quad Cities Chamber of Commerce, which serves Moline, Illinois, where John Deere’s Worldwide Headquarters and other facilities are located, to support the chamber’s five-year development plan. Civic betterment through the John Deere Foundation is often inspired and supported by senior John Deere officers and managers who are involved in many community projects. Foundation contributed $500,000 to the Central America and Mexico Hurricane Relief, or CAMHR organization. The foundation also contributed $50,000 to the Southeast Asia Earthquake Relief Fund (SAERF) for relief and reconstruction efforts in Pakistan. John Deere responded to the December 2004 Indonesian tsunami in 2005 and the August 2005 Hurricane Katrina through its partnership with the Red Cross of America. Besides donating $1 million to the relief funds, the company matched its employees’ donations to the Red Cross for Hurricane Katrina relief efforts. DISASTER RESPONSE: A STRATEGY FOR HELPING THOSE IN NEED John Deere has a long history of supporting people in need. In 2006, Deere & Company Chairman and CEO Bob Lane was one of four prominent business leaders identified by the Bush Administration to lead fund-raising efforts in response to disasters in Central America and Mexico. In addition, the John Deere Donating equipment is also an important part of John Deere’s support of disaster relief. While cash donations are vital, John Deere equipment makes long-lasting impacts in disaster recovery and reconstruction. (Some $500,000 of equipment 38 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 38 was donated in 2005 in support of hurricane recovery efforts.) Proficiency Award, the Farm Business Management Career Development Event and the PAS Ornamental Horticulture Specialist Award. In 2006 John Deere developed a disaster plan that would provide the foundation with a consistent approach and hasten response to future disasters. Part of the plan included setting aside $1 million for disaster relief as part of the foundation’s regular giving every year. The U.S. Jaycees Outstanding Young Farmers has been sponsored by John Deere for over 30 years. The program recognizes some of the most prominent young farmers in the United States each year. The purpose of the program is to foster better urban and rural relations, and show appreciation to young farmers for their contributions and achievements in their profession and their communities. DEERE GIVES BIG TO UNITED WAY The United Way is a top charity for John Deere and its employees. The company and its employees across the United States contribute every year to United Way through campaigns at John Deere facilities. John Deere supports United Way in other ways, too, through company grants, employee participation, and loaned executives. JOHN DEERE VITAL TO ITS COMMUNITIES In addition to grants made by the John Deere Foundation, support for a variety of organizations and activities is provided through other corporate gifts and grants from subsidiary and division operating units around the world. JOHN DEERE SPONSORSHIPS BUILD CLOSE RELATIONSHIPS JOHN DEERE AND THE ARTS John Deere’s national sponsored program provides financial support to selected national non-profit organizations or events which will benefit or promote the company and its products. John Deere has built long-standing relationships with many organizations through corporate sponsorships, such as National FFA, the Society of Hispanic Professional Engineers, the National 4-H Council, the U.S. Jaycees Outstanding Young Farmer program, Skills U.S.A., and Minorities in Agriculture, National Resources and other Related Sciences, or MANRRS. As part of its commitment to community betterment, John Deere has supported arts and cultural venues for many years. The company’s long-standing commitment to arts and culture was formally recognized in 2005 when John Deere was selected as one of the “Ten Best Companies Supporting the Arts in America.” Presented by the Business Committee for the Arts, the award acknowledges companies for “exceptional involvement with the arts that enrich the workplace, education and the community.” The organization cited the company’s ongoing support for museums, galleries, symphonies, concert series and other organizations that actively promote the arts and cultural education in many forums. John Deere is one of the largest and longest continuous sponsors of National FFA, supporting the organization for over 60 years. The company sponsors National FFA programs including LifeKnowledge, Collegiate Team Ag Education, the Turfgrass Management Proficiency Award, the Forest Management *OHN$EERE&OUNDATION#ONTRIBUTIONS !RTSAND#ULTURE #OMMUNITY$EVELOPMENT %DUCATION (EALTHAND(UMAN 3ERVICES 3OLUTIONSFOR7ORLD (UNGER 39 2006 Citizenship Brochure Page 39 Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black Vertis QCA 1300 19th Street, Suite 200 East Moline, IL 61244 Cyan Magenta Yellow Black 2006 Citizenship Brochure Page 40