John Deere 2010 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 2010 John Deere annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

6
Investors Seeing Strong Returns
John Deere investors shared in our success of 2010. Stockholders
realized a total return of 72 percent during the fi scal year
compared with about 17 percent for the overall U.S. equity
market. This signifi ed the fi nancial community’s recognition of
our achievements and our attractive prospects for growth in
the future. Roughly one-third of the company’s cash fl ow from
operations was returned to our owners in dividends and share
repurchases. Dividends totaled about $500 million for the year,
a record, while share repurchases of nearly $360 million were
made. Since mid-2004, the company has increased the quarterly
dividend rate on eight occasions (through fi rst-quarter 2011)
and repurchased more than 100 million shares of common stock.
Revised Strategy Unveiled
As our world changes, so must John Deere. With those words,
the company in 2010 introduced an ambitious blueprint to
guide its efforts in meeting the world’s expanding needs in the
years ahead. The next evolution of the John Deere Strategy
builds on the company’s strong record of achievement. It raises
the bar on growth and profi tability and puts more emphasis
on global expansion.
The strategy concentrates the company’s focus on two growth
areas – agricultural and construction equipment solutions.
Other operations – turf, forestry, parts, engines, intelligent
solutions, and fi nancial services – have vital roles supporting
or complementing the growth operations. Emphasizing a lineup
of tightly knit operations puts Deere in a stronger position
to leverage strengths, optimize investments, effi ciently target
leadership and employee resources, and extend its ability to
compete in the global marketplace.
Further, the revised strategy sets out challenging metrics
including $50 billion in mid-cycle sales by 2018 and 12 percent
mid-cycle operating margins by 2014. Meeting these goals
would result in a near-doubling of sales, a healthy increase in
profi tability, and an almost three-fold increase in economic profi t,
or SVA. The strategic plan targets roughly half of the company’s
sales coming from outside the U.S. and Canada by 2018, versus
about one-third today.
In addition, measures are being introduced to help assure that
fi nancial performance remains sustainable as we accelerate
our growth aspirations. “Health” metrics, as they’re being
known, pertain to product quality, market share and employee
engagement, among other areas.
John Deere’s innovative 748H skidder is one of several products assembled at the
company’s facility near Moscow, Russia, that went into operation during the year.
The factory also produces high-horsepower tractors, combines, backhoe loaders
and motor graders for promising markets in Russia and neighboring areas.