Building globally — together

Over the last several years, we’ve been fortunate to make significant investments in global markets, expanding our footprint to provide products that meet the needs of our customers worldwide. And it’s all thanks to customers like you, right here at home.

Your input has helped make our business successful, and that has enabled us to expand in these emerging markets. Much of what we’ve learned from our customers and dealers in North America is serving as the foundation for our business in other markets. Since its start in 2009, Triton In Indaiatuba, Brazil, we have marked the completion of two Sitework Development has built their world-class manufacturing facilities. One is producing G-Series business from the ground up with 150 Excavators, the other our K-Series Backhoes and Wheel Loaders. employees and more than 100 pieces In China, we are manufacturing wheel loaders and excavators of equipment. Manager David Garrett designed specifically to meet that country’s growing needs. In India, credits his local dealer, R.W. Moore, and we’ve been producing backhoe loaders through a joint venture John Deere Financial with helping clear with Ashok-Leyland for over two years. India is the largest backhoe the way to growth since the recession. loader market in the world.

“Right now the economy is on fre, so While global growth is an important focus, our presence right here we need to keep buying equipment at home is always a top priority. By listening and responding, we will build our world-class products and services — together — leveraging and hiring people. The relationships the power of our dealer network to deliver solutions that optimize we’ve established with R.W. Moore, David Garrett your productivity and uptime. John Deere, and John Deere Financial Manager, Triton have allowed us to do just that.” Sitework Development

WE CAN BE PART OF YOUR SUCCESS STORY. Domenic G. Ruccolo For fast, easy access to credit for your Senior Vice President, Sales & Marketing John Deere equipment, parts, and Worldwide Construction & Forestry Division service needs, or for more information, visit JohnDeereFinancial.com or your nearest John Deere dealer.

CR2211088 JohnDeereFinancial.com DEERE & COMPANY WORLD HEADQUARTERS

ANNIVERSARY

Architect Eero Saarinen (right) discusses plans for the new Deere & Company World Headquarters, originally called the Administrative Center, with Chairman William Hewitt.

“ No old or worn-out ideas can be tolerated within these walls — for somehow through the environment they provide, they foster and build the special qualities of individual initiative, imagination, and vision. They will not merely shelter — they will silently but surely inspire and encourage.” — Industrial designer Henry Dreyfuss A FEW THINGS YOU MIGHT NOT KNOW ABOUT DEERE & COMPANY WORLD HEADQUARTERS

1 Deere & Company Chairman William Hewitt saw great possibility in the sprawling, hilly farm property covered in woods.

Ignoring those who told him Deere should move its administrative offices to Chicago, New York, or San Francisco, Chairman William Hewitt chose the rural site in Moline, Illinois, to build what is now the Deere & Company World Headquarters.

Originally called the Administrative Center, the facility opened 50 years ago, in April 1964, with a public introduction in June of that year. Industrial designer Henry Dreyfuss described the structure as having “the quality of timelessness.” 2

“And yet it is contemporary,” Dreyfuss said during the facility’s grand-opening ceremony. “It belongs to today and tomorrow.” Dreyfuss, who worked on Deere’s “New Generation of Power” tractor models introduced in 1960, suggested Hewitt hire Finnish architect Eero Saarinen to design the building, according to tran- scripts of the speeches given at the ceremony.

“Henry (Dreyfuss) said if we were interested in an architect whose work will last and still be excellent 25 or 50 years from now,” Hewitt said, “we should seriously consider Eero Saarinen.”

“For all its size and the daring use of site, this is a building that beckons and welcomes you,” Dreyfuss said. “The men and women who will work here will give it life and warmth. The design in steel and glass will give them and their work inspiration, will permit imagination, will inspire courage and conviction.

Saarinen died a few days after construction started on the build- ing, but his wife, Aline, spoke at the event. She said Hewitt told her, “I do believe that if people work in a beautiful environment they will be happier, they will be more productive, that we will attract the best kind of people.”

Architect Kevin Roche, who worked for Saarinen and took over his employer’s many projects after he died, attended the event. Artist Alexander Girard, who created the three-dimensional mural on the display floor, also attended.

Hewitt said in his speech, “The highway that bisects the site was not paved at the time. It was just a gravel road full Former U.S. President Artist Alexander Girard The imperial koi of chuckholes and sometimes impassable in the winter, but 1 Dwight Eisenhower visited 2 designed “Refections of 3 fsh were a gift we knew it was going to be paved so we went ahead with our the headquarters in 1965, an Era,” the mural on the from Japanese building plans.” and President Jimmy Carter display foor. Although visitors to Deere & toured the site in 1979. composed of thousands Company in 1972. Deere acquired 700 acres that had been part of four farms for of historical items, it’s the new headquarters. The site is now closer to 1,200 acres. considered a single piece of art.

4 The Construction Review 6 50 TH ANNIVERSARY

NEW DIGS, NEW DIRECTION

The walls designed by architect Eero Saarinen and endorsed by industrial designer Henry Dreyfuss 3 lived up to the reputation set before them. Business did not go on as usual in the new Deere & Company World Headquarters, but took on an invigorated spirit that lead to an evolution in John Deere offerings.

7 With a change of concept, both wheel and crawler tractors broke out of the traditional perception of simply being vehicles on 4 which attachments could be mounted. They were now seen as unique pieces of 5 equipment in their own right, and production began for the first dedicated backhoes, utility tractors and loaders, and forklifts. The distinction formed is an important one, for the product lines that have followed are responsible for giving the John Deere Construction & Forestry Division its breadth, depth, and ultimately its 8 position in the world.

Move-in day was April 17, William Hewitt, then-chairman Workers built a small mockup On the third foor of the East Henry Moore’s sculpture 4 1964. About 900 employees 5 and CEO of Deere & Company, 6 of the East Offce Building 7 Offce Building, framed 8 “Hill Arches” was brought who had worked in four was one of three recipients on the edge of the grounds, historical photos show to the site by helicopter and separate buildings all of the Award of Merit from and it still stands today by the construction of the placed on the island by the moved into what is now the the Davenport, Iowa, Catholic the grounds maintenance headquarters in the 1960s. lakes in 1974. East Offce Building. It took Interracial Council. Dr. Martin building. Hewitt and Saarinen four moving companies to Luther King Jr. was also used the mockup to test transport 250 vanloads of honored at the banquet. design ideas for the offces supplies and fles. and details used on the building’s exterior.

5 COVER STORY

As a Customer Advocate Group member and owner of over 30 John Deere backhoes, this digging veteran has been key in making the 710K the standup machine it is today

Larry Heiderscheidt, Owner, Heiderscheidt Digging

6 The Construction Review 7 Welcome to Sleepy Eye, Minnesota, where if you need any digging done, there’s one name you need to know — Heiderscheidt Digging. Mastery of the backhoe makes this crew experts for any job that might use one. From installing sewer and water lines to demolishing silos and barns, this family business makes its bread and butter with John Deere backhoes. But that’s not to say it’s a one-way relationship.

1

BORN AND RAISED ON BACKHOES Larry Heiderscheidt has been putting his expertise operating back- hoes to work for about as long as he can remember, and his son, Todd, can say the same — 31 years of digging, and as for his dad, this will be year 55.

Coming from a family of 14 where the kids were expected to pitch in to put food on the table, Larry Heiderscheidt is no stranger to hard work. One of his first jobs was working on a neighbor’s farm for $10 a week, shoveling silage in piles twice his height. The fact he’s about to demolish the same silo he used to fill doesn’t faze him in the least — it’s just “What used to take me half a day, another job done well by a John Deere I can do in an hour. It’s unbelievable backhoe. “This will be number 211.” what I accomplish with this 710K.” A few strategic taps of the bucket later 2 and there’s nothing left but the hardy — Larry Heiderscheidt smile of a man who loves what he does. DAY ONE The Heiderscheidts know these backhoes inside and out because they’ve been working them since the first 710B was built. “Back in ’82 I got one of the two pilot 710B Backhoes to test as part of the Customer Advocate Group (CAG),” says the elder Heiderscheidt. “I almost didn’t let them take it back. I ended up buying two within a year.” The family’s been providing their input and helping Deere build together ever since.

“Deere reps visit to get our input on new machines, and we go to the testing grounds at Dubuque Works — I even have the personal cell-phone numbers of engineers to call with questions and sugges- tions,” says the younger Heiderscheidt. “I love being involved in the improvement process. Letting the engineers know what can make our job easier and seeing what they can make happen means I get a better machine, and these improvements make all the difference in my day’s productivity.”

8 TThehe ConstructionConstruction ReviewReview COVER STORY

Lowell Heiderscheidt likes Deere machines because they’re tough, reliable, and fun to work with. Just like him.

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Whether digging ditches, Brought up on a steady Using the extendable A Deere family through 1 working the quarry, 2 diet of hard work, Larry 3 dipperstick, Larry 4 and through, Lowell demolishing barns, or laying Heiderscheidt shows no signs Heiderscheidt demolishes Heiderscheidt, brother of foundations, the Heiderscheidts of slowing down, and has an outdated barn. Larry, helps boost productivity like the smooth metering of the already purchased his own with a 655K Crawler Loader. new K-Series Backhoes because 710K to keep up with his son’s. of the extra speed and safety they provide.

4

9 COVER STORY

HEAVY LIFTING IN LUXURY “When the first backhoes came out, they didn’t even have cabs on them,” recalls the elder Heiderscheidt. “Now we’re riding in comfort with air conditioning and ride control — there are a lot of features that help fight fatigue, and that puts production way up. What used to take me half a day, I can do in an hour. It’s unbelievable what I accomplish with this 710K.”

“I love being involved in the improvement As for the younger Heiderscheidt, it’s the pilot controls making for smooth metering that stands out as a key improvement to the 710K. While at Dubuque process. Letting the engineers know what Works for CAG testing, he worked his first machine with pilot controls and was can make our job easier and seeing what convinced on the spot. “I was in heaven. It was so smooth, and Deere noticed how impressed I was. Now you can get pilot controls in any Deere backhoe. The they can make happen means I get a better metering keeps improving, the 710K is quiet with the new engine, all the power machine, and these improvements make all is there while still being fuel efficient — I don’t know what else to say, it’s just a solid machine. What they’re going to do to make it better, I have no idea. But the difference in my day’s productivity.” the engineers always seem to come up with something I like.” — Todd Heiderscheidt BACKHOE BACKUP It doesn’t take long to learn that the Heiderscheidts tell it how it is. So when they’re not cracking jokes or giving you a hard time, you’re certain that what they say is genuine. “RDO Equipment in Mankato has a very nice group down there,” says the younger Heiderscheidt. “Their service manager is awesome and does his best to keep us going. And as for Deere, they’re the best machines you can buy.”

Father and son agree on the 710K. “I’ve seen and run a lot of backhoes,” Dad adds. “As far as I’m concerned, there isn’t one that can hold a candle to Deere.” On behalf of John Deere, thank you for helping make that statement possible. Heiderscheidt Digging is serviced by RDO® Equipment Co., Mankato, Minnesota.

CHECK OUT THE VIDEO AT: JohnDeere.com/heiderscheidt

YOU TALK, WE LISTEN The 710K Backhoe features enhancements directly suggested by proud Customer Advocate Group member and operator Todd Heiderscheidt of Heiderscheidt Digging. Wanting to be able to grasp cumbersome objects between the bucket and gripper teeth while extending and retracting the arm, he suggested redesigning the outer- box, to put the hydraulics on the outside of the boom, and add teeth to the arm for better grip. Good call, Todd.

10 The Construction Review FROM THE ENGINEERS

“THE HEIDERSCHEIDTS HAVE HELPED MOLD THE 710K INTO WHAT IT IS TODAY.”

— Bill Less, Supervisor of Backhoe Product Support, John Deere Dubuque Works

MAKING IT HAPPEN

Amidst the bustle of the John Deere Dubuque Works factory you’ll find employees Scott Price and Bill Less picking up the phone when Larry and Todd Heiderscheidt of Heiderscheidt Digging call. Part of Price and Less’s responsibilities include taking the Heiderscheidts’ input to the drawing board for improvements on future backhoes, and it’s a job they enjoy.

“Every visit is an adventure,” says Less. “The Heiderscheidts

are so personable and entertaining, on top of being experts on Dealer Marketing Assistance the machine. They strive to be as productive as possible and aren’t afraid to Center Specialist Scott Price push the limits.” Price enthusiastically adds, “That’s why we use them for input. helps take the Heiderscheidts’ They get absolutely every ounce of productivity the machine is able to provide. input directly to the factory floor. If there’s an area underperforming, they’ll find it faster than anyone.”

Improving performance is what it’s all about, and Less thinks it’s safe to say the Heiderscheidts have done their part. “They started with utility tractors with backhoe attachments on them, purchased the first dedicated backhoe, were involved in the first 710 pilot backhoe, and continue to provide input. The Heiderscheidts have helped mold the 710K into what it is today.”

11 GET A NEW LEASE ON

Like many who are considering an equipment acquisition, you’re probably very familiar with traditional financing. But learning more about leasing can give you a new lease on a healthier bottom line.

BONDING AND TAXES Rather than buying capital investments, leasing There’s a significant provides a number of cash-flow benefits. This can connection between be especially true late in the year if you’re facing leasing equipment and Alternative Minimum Tax (AMT) or Mid-Quarter bonding capacity, so it’s Convention penalties. important to know all the factors that might stand between you and larger projects.

PAY FOR IT WHEN YOU NEED IT, NOT AFTER Bonding companies When weighing your installment and lease options, start by asking yourself how use a simple formula to important it is to own your equipment. With a lease, you’re paying for the use of the equipment, not the equipment itself. At the end of the lease term, you can simply determine contractor return the equipment to your dealer if you wish. capacity. They multiply your liquid assets by Leasing also allows you to keep pace with the continuous evolution of technology. 10, then take 75 percent The state-of-the-art machine you buy today may not be as productive or efficient as of the result. If the new others coming on the scene tomorrow. Leasing makes it easier to stay up to date with figure is lower than the newest models to remain competitive, or to meet new or changing local emission requirements. And with your newer equipment, you’ll experience less downtime and a the amount of the reduction in maintenance expenses — without retaining equipment that has outlived job you’re bidding on, its peak effectiveness. you won’t qualify for a bond. If the new figure Another advantage is lower payments and less capital outlay up-front. Compared to is higher, you’ll be in the 10- to 20-percent down payment required on an installment loan, leasing generally requires only the first two monthly payments, which are calculated by the lender the running. based on an assumption of how much the equipment will be worth at the end of the lease. That figure, called the residual value, is subtracted from the retail price, and the remainder is spread over the length of the lease term in monthly payments that tend to be generally lower than those on an installment loan.

In addition to keeping your cash flow more pre- dictable with regular payments, leasing can have a positive effect on your balance sheet. In fact, under Returning the equipment at the end of your certain circumstances, leased equipment doesn’t even appear on your balance sheet because it’s lease is just one option. If you decide the considered neither an asset nor a liability. This can be very important to your future acquisition plans equipment is worth keeping in your fleet, because it strengthens your financial ratios. you can buy it outright for the applicable purchase-option price, or you can simply re- new the lease. It’s more common, however, for contractors to add a new piece of equip- ment with a new lease.

1212 TheThe ConstructionConstruction ReviewReview A HEALTHY CASH FLOW

Here’s an example of how leasing has a positive effect on the bonding companies’ formula. Let’s look at a contractor with $400,000 in liquid assets who wants to bid on a $2.8-million project. Before the bidding process, he purchases a $250,000 piece of equipment on an installment loan, and the down payment reduces his liquid assets by $37,500.

The bonding company would then plug the num- Had the contractor leased the equipment, the results would have been bers into the formula: Liquid assets ($362,500) x 10 different. Remember, leased equipment, with the proper structure, doesn’t ($3,625,000) x 75%. The new total is $2.7 million, appear as a balance sheet asset, so his liquid assets would only have been which is $100,000 lower than the amount of the bid. reduced by the amount of his first two lease payments, roughly $10,000. This contractor might not be able to get bonded When you plug $390,000 into the bonding companies’ formula, the result and might be unable to compete for the project. is $2.9 million, qualifying the contractor for a bond.

BUYING LEASING While installment loans let you depre- ciate the equipment and apply that $362,500 $390,000 deduction on your tax return, leasing enables you to deduct expenses. Both options reduce your tax liability, but x 10 x 10 leasing often creates a greater deduc- tion. When you buy the equipment at lease termination, you can start the $3,625,000 $3,900,000 depreciation cycle, stretching your tax benefit out even longer. If reducing x 75% x 75% your tax liability is a high priority, you should always get firsthand advice from THE FORMULA IN ACTION $2,718,750 $2,925,000 a Certified Public Accountant (CPA).

★ QUALIFIES FOR BID ★

Loans versus leases: A review

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13 EMISSION SPOTLIGHT

John Deere updates its equipment to meet EPA Interim Tier 4 (IT4)/EU Stage IIIB and Final Tier 4 (FT4)/EU Stage IV standards. Engine technology in all models is simple, fluid efficient, field proven, and fully integrated and supported.

OUR LATEST IT4 EQUIPMENT MODELS: SCRAPER TRACTORS 9R/9RT WHEEL LOADERS 204K 244J 304K 324J 344K 444K 524K 544K 644K Hybrid 744K 824K 844K-II BACKHOE LOADERS 310K 310K EP 310SK 310SK TC 410K 410K TMC 710K TRACTOR LOADERS 210K 210K EP CRAWLER LOADERS 605K 655K 755K CRAWLER DOZERS 450J 550K 650K 700K 750K 850K SKID STEER LOADERS 313 315 328E 332E COMPACT TRACK LOADERS 329E 333E EXCAVATORS 27D 130G 135G 160G LC 180G LC 210G/210G LC 245G LC 470G LC 670G LC 870G LC ARTICULATED DUMP TRUCKS 250D-II 300D-II 370E 410E 460E

HERE’S A LIST OF OUR FT4 EQUIPMENT TO DATE: WHEEL LOADERS 624K 644K 724K MOTOR GRADERS 670G/GP 672G/GP 770G/GP 772G/GP 870G/GP 872G/GP SKID STEER LOADERS 318E 320E 326E COMPACT TRACK LOADERS 319E 323E EXCAVATORS 17D 35G 50G 60G 75G 85G 250G LC 350G LC 380G LC

ARE YOU Share your story for the chance to be featured. John Deere is committed to building the machines and technologies that rise to your challenges. And we’re dedicated to building the relationships that make these groundbreaking improvements possible. The stories are everywhere — and we’d love to hear yours.

Submit your BUILDING. TOGETHER. story to WITH JOHN DEERE? [email protected], and we’ll send you a free hat* to show our appreciation.

* No purchase necessary. Customer must sign a John Deere promotional release.

14 The Construction Review TO CONQUER A COURSE IN PEBBLE BEACH, YOU NEED EVERY PIECE OF IRON

Jason Sloan Director/Project Manager, Frontier Golf IN YOUR BAG. Poppy Hills Golf Course, Pebble Beach, CA

A “bucket list” course in Pebble Beach, California, Poppy Hills was long overdue for a drainage update. After every rain, players called it “Sloppy Poppy.” So golf course architects Robert Trent Jones II and contractor Frontier Golf came in and redesigned the whole loop. In just eight months, they replaced the irrigation system, reshaped the landscape, and sand capped the entire course. Frontier Golf relied on John Deere dozers, excavators, ADTs, and loaders. John Deere WorkSight™ remote diagnostics kept their machines in top form, while Topcon integrated grade control sped up rough and fairway shaping. Staying on schedule was critical — tee times started flling up months before completion. But thanks to John Deere, Watch the video at Frontier Golf hit every green in regulation. JohnDeere.com/WorkSight

YOUR DIRECTIONS. FOLLOWED.

Building your construction business together. Your business keeps the world moving forward. And to meet deadlines, the right equipment is a plus. So when guys like you gave us direction on our K-Series Dozers, we were all ears. You wanted more visibility to the blade. We saw to it. Reduced sound and vibration? We heard you loud and clear. And when you demanded more uptime and productivity, we delivered Ultimate Uptime featuring John Deere WorkSight™ and integrated grade control options, including a Topcon 3D-MC2 system installed at the factory. To fnd out more about K-Series Dozers, contact your dealer or visit our website. JohnDeere.com/dozers

DKMAG208CU Litho in U.S.A. (14-09)