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DEERE DELIVERS SOUND PERFORMANCE IN YEAR OF UNCERTAINTYDespite unsettled conditions that weighed on demand for popular models of equipment, John Deere had a year of sound performance in 2019. Among our achievements, we launched important new products with the latest technology and advanced features, improved our competitive position throughout much of the world, and took further actions to ensure the success of the strategic plan that will guide our efforts in coming years. Plus, we provided solid returns to our shareholders.

The overall economic picture continued to be positive, leading to improved demand for smaller equipment and record sales and profits for eere s construction and forestry business. Key agricultural markets, however, remained under pressure. Persistent trade tensions and difficult growing and harvesting conditions caused many farmers to become cautious about making major purchases.

et income for fiscal was . billion a percent increase over 2018 and the second-highest total in company history. Net sales and revenues rose 5 percent, to . billion a new high. d usted for changes in the U.S. tax code – which reduced 2018 reported earnings by a significant amount net income was up 4 percent.

The company again generated healthy cash flow in addition to . billion in economic profit or Shareholder Value Added* (SVA). SVA equals operating profit minus an implied cost of capital. It is a primary measure for managing the company and making investment decisions.

eere maintained its strong financial condition ending the year with a healthy cash balance of about

. billion. ur equipment operations carried relatively modest debt while the financial services business remained conservatively capitalized.

The company s financial performance allowed it to ma e further investments in advanced products, technologies, and other growth-oriented projects. For the year,

eere devoted . billion to research and development and capital expenditures.

lso nearly . billion was returned to investors in the form of dividends and share repurchases. The quarterly dividend rate was increased during the year by 10 percent, marking the eighth increase in the last decade.

eere shareholders reali ed a total return of percent for the year versus 14 percent for the broader market.

BROAD LINEUP BOLSTERING PERFORMANCEeere s largest business griculture Turf T

reported a small increase in sales but lower profit. wing in part to higher production costs operating

profit declined percent to . billion. The division benefited from sales of small tractors and turf equipment while sales of larger models were generally lower.

f significance customers responded positively to products featuring the latest in precision technologies.

With help from a stronger economy and our Wirtgen roadbuilding unit results for onstruction orestry

moved higher. ales increased by percent and operating profit rose percent e ceeding billion for the first time. rowth was further boosted by construction activity in orth merica. drove record volumes across key equipment categories.

eere s financial services unit made a substantial contribution to company earnings while providing competitive financing to our global customers. Its loan and lease portfolio grew by percent to . billion as credit quality continued to be strong. Net income was lower mainly due to prior year ta benefits and impairments and higher losses on operating leases in 2019.

GLOBAL TRENDS SUPPORTIVE OF GROWTHeere s record of performance has provided a sturdy

foundation for the company to capitalize on trends of power and promise. These trends as we ve noted in the past, center on a growing global population and an emerging middle class in many parts of the world.

Although commodity prices may show wide variation over short periods, demand tends to follow a steadier course. In the last half century, global consumption of

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DEERE STRATEGY FOCUSES ON TECHNOLOGY, GLOBAL GROWTH, AND STANDOUT FINANCIAL PERFORMANCE company s fi

CHAIRMAN & CEO LETTER

New VÖGELE Super 3000-3i tracked paver can pave widths up to 18 meters (59 feet). The largest paver in VÖGELE’s lineup, the Super 3000-3i, is designed for a broad range of applications.

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New R4140i and R4150i self-propelled sprayers, designed for the European market, include the ExactApply intelligent nozzle control system for precision spraying.

grain and oilseeds has declined only three times and risen without interruption for more than two decades. We have every reason to believe this trend of steady growth in demand will continue, requiring increased levels of agricultural production.

At the same time, people are racing to live in cities, leading to a greater need for roads, bridges, buildings, and the equipment needed to construct them. Urbanization also spurs development of an economic middle class, especially in fast-growing emerging markets.

PURSUING A FAR-REACHING STRATEGYThese factors point to continuing demand for productive equipment and underscore our company’s ambitious operating strategy. The plan stresses the importance of technology, global growth, and standout financial performance. It aims to esta lish a more

exi le cost structure and a more versatile usiness and product lineup that can generate solid financial results on a consistent basis.

At the heart of the strategy is a commitment to innovation and quality. Throughout our history,

oth have proved crucial to expanding our glo al presence and providing customers ith exceptional productivity and reliable performance.

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In support of our strategic plan, e are placing particular emphasis on these areas:

– Precision Technologies. Intensify our efforts in precision technologies, a field certain to define the future of our industries and one in which Deere is committed to being the undisputed leader. Areas of focus include making further advances in vehicle automation and autonomy and increasing the number of customers who choose to manage their farms through our digital operations center.

– Aftermarket. xpand Deere s aftermar et usiness y increasing our share of parts purchased and service work performed on our products over their life cycle.

– Capital Allocation. Ensure a disciplined approach to capital allocation by focusing research and investment dollars on the most promising and profita le opportunities. We will, at the same time, conduct a careful assessment of those operations that cannot meet our performance standards.

– Structure. Create a leaner organizational structure that can respond to changing market conditions with greater speed and agility. The company has taken a number of streamlining actions in recent months and is evaluating further moves along these lines.

– Talent. Step up efforts to become a magnet for talented employees, especially those with the technical skills needed to ensure our success as a smart industrial company.

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DB Planter with ExactEmerge is a large row-crop planter capable of faster planting speeds and precise seed placement at speeds up to 10 miles per hour.

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CHAIRMAN & CEO LETTER

Unless indicated otherwise, all capitalized names of products and services are trademarks or service marks of Deere & Company.

PRECISION AG MAKES FURTHER GAINS AS CUSTOMERS EMBRACE ITS BENEFITS

roadbuilding unit introduced a new generation of large milling machines and pavers.

Precision agriculture made further gains in 2019 as customers increasingly embraced its productivity-enhancing enefits. Sales continued to gro for our popular systems that automatically guide equipment in the field ith great accuracy. Another product that has enjoyed wide acceptance is a harvesting-management tool that automates combine settings and improves machine performance.

What’s more, the John Deere Operations Center – which we regard as a proxy for growth in precision technologies – continued to gain users. The center ended the year with customer accounts holding more than 160 million acres of production data.

PROMOTING SUSTAINABILITY IN OPERATIONS & PRODUCTSJohn Deere is committed to operating in a safe, environmentally sustainable manner and developing products that disturb the environment to a minimal extent.

During the year, a ne filtration system as installed at our Greeneville, Tennessee, factory, which reduced water usage in the paint system by over 20 percent. Also, Deere headquarters and several factories in Mexico undertook major composting projects to reduce

aste that other ise ould go to landfills. In another example, a new monitoring system helped manage

SETTING THE PACE IN INNOVATIONLong a Deere hallmark, product innovation earned further global recognition last year, including a gold medal and three silver medals from Europe’s leading agricultural trade fair and a pair of silver medals from a well-regarded agribusiness exhibition in France. In addition, a noted group of .S. agricultural and biological engineers recognized six of our new products for innovation. Among the honored innovations as an advanced tractor transmission that helps drive electrically-powered implements as well as a popular feature that enables dealers to remotely monitor the condition of customer equipment in the field.

During the year, extensive updates were made to the company s agship ro -crop tractors, including introduction of the industry s first fixed-frame four-track tractor. Enhancements to other large and mid- sized tractors boost comfort and performance and offer increased levels of innovation. A ne ly launched self-propelled sprayer, equipped with a 1,600-gallon tan and 132-foot car on-fi er oom, has raised the

ar for applicator productivity. In another case, an advanced ro -crop planter for customers in South America delivers up to t ice the planting accuracy as previous models.

New construction equipment included mid-sized and production-class wheel loaders that provide improved comfort and performance as well as an upgraded crawler dozer with more power and durability. Our Wirtgen

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Versatile 6M-series tractor lineup has been significantly updated for 2020 with improvements in visibility, comfort, maneuverability, and technology. Their compact size, wide horsepower range, and versatility make 6M tractors a popular power choice for a variety of farm applications – as well as roadside mowing and property maintenance.

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energy consumption at our factory in Bruchsal, Germany.

Meanwhile, customers have responded favorably to advanced products designed and built with sustainability in mind. These products apply inputs with great precision, efficiently guide equipment through the field, and offer improved fuel economy as well as greater reliance on electric drives. Our Blue River Technology unit continued with the development of sprayers that aim to dramatically reduce herbicide usage.

SHOWING THE WAY IN RESPONSIBLE CITIZENSHIPWherever we operate, Deere is committed to sharing with others and being a responsible corporate citizen. During the year, the company and its foundation made charita le contri utions of approximately $38 million, helping improve lives throughout the world. These contributions focused on empowering smallholder farmers, helping local communities grow, and providing quality educational opportunities.

As in past years, Deere employees supported their communities through extensive volunteer efforts. By logging some 215,000 volunteer hours in 2019, a record, employees moved closer to the goal of 1 million volunteer hours for the period 2017 through 2022.

Deere continued its work in support of smallholder farmers in southeast Asia and sub-Saharan Africa.

During the year, the program as expanded to Nigeria, where it is helping farmers in 11 villages adopt more modern agricultural practices and achieve higher living standards.

Well-known for its record of responsible citizenship, Deere earned further accolades in 2019. The company again appeared in prominent listings of best employers and was recognized for having one of the world’s top-100 brands. For a second year, Deere was honored as a leading U.S. company for social innovation by the American Innovation Index A ards. Sponsored y Fordham University, the awards recognize the ways in which a company s activities and products enefit society.

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GAINING STRENGTH & STABILITYThrough its performance in 2019 and other recent years, Deere has shown an improving ability to produce solid financial results under a ide range of mar et conditions.

his record of success re ects a steady investment in new products and markets as well as leadership in emerging fields such as precision technologies. Our business model has gained strength and stability as a result, making Deere a more formidable competitor and a better investment.

This is a great time to be associated with John Deere. We are, after all, in an unprecedented position to help respond to the world’s growing need for food, shelter, and infrastructure – and do so in a manner that is both sustainable and profita le.

By working together and capitalizing on the collective strengths and unique attributes of employees, dealers, and suppliers orld ide, e firmly elieve Deere can seize the great opportunities ahead and extend its record of success well into the future.

On behalf of the John Deere team,

December 19, 2019

I

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Samuel R. AllenChairman

John C. May Chief xecutive Officer

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