What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-09 compared with 2020-08-07 · 373 added, 340 removed, 647 unchanged (52% of the section changed)

3 unchanged sentences

(unaudited and in millions, except share amounts)

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Current Assets:

8 unchanged sentences

Deferred tax assets 69.7 93.8

Other assets 186.5 153.0

Intangible assets, net 462.2 501.7

Goodwill 1,273.3 1,298.3

$ 7,940.3 $ 7,759.7

LIABILITIES AND STOCKHOLDERS’ EQUITY

18 unchanged sentences

Common stock;

$0.01 par value, 150,000,000 shares authorized, 74,895,942 and 75,471,562 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

$ 0.01 par value, 150,000,000 shares authorized, 74,899,318 and 75,471,562 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital 24.2 4.7

5 unchanged sentences

Total liabilities and stockholders’ equity

$ 7,940.3 $ 7,759.7

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(unaudited and in millions, except per share data)

Three Months Ended June 30,

Three Months Ended September 30,

Net sales $ 2,497.5 $ 2,109.4

Cost of goods sold 1,918.8 1,659.2

Gross profit 578.7 450.2

Selling, general and administrative expenses 251.3 245.0

2 unchanged sentences

Amortization of intangibles

Goodwill impairment charge

Restructuring expenses

Bad debt expense 5.8 0.8

Restructuring expenses

Income from operations 224.0 105.9

3 unchanged sentences

Income tax provision

Income before equity in net earnings of affiliates

Income (loss) before equity in net earnings of affiliates 147.9 ( 4.5 )

Equity in net earnings of affiliates

Net loss attributable to noncontrolling interests

Net income 158.1 6.3

Net (income) loss attributable to noncontrolling interests ( 0.8 ) 1.3

Net income attributable to AGCO Corporation and subsidiaries $ 157.3 $ 7.6

Net income per common share attributable to AGCO Corporation and subsidiaries:

$ 2.10 $ 0.10

$ 2.09 $ 0.10

Cash dividends declared and paid per common share $ 0.16 $ 0.16

4 unchanged sentences

(unaudited and in millions, except per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Net sales $ 6,432.6 $ 6,527.8

Cost of goods sold 4,970.7 5,057.0

Gross profit 1,461.9 1,470.8

Selling, general and administrative expenses 718.4 767.9

3 unchanged sentences

Goodwill impairment charge

Restructuring expenses

Bad debt expense 9.0 2.1

Restructuring expenses

Income from operations 421.7 397.9

5 unchanged sentences

Equity in net earnings of affiliates

Net loss (income) attributable to noncontrolling interests

Net income 284.4 212.4

Net loss attributable to noncontrolling interests 7.3 1.1

Net income attributable to AGCO Corporation and subsidiaries $ 291.7 $ 213.5

Net income per common share attributable to AGCO Corporation and subsidiaries:

$ 3.89 $ 2.79

$ 3.86 $ 2.77

Cash dividends declared and paid per common share $ 0.48 $ 0.47

2 unchanged sentences

AGCO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited and in millions)

Three Months Ended June 30,

Other comprehensive (loss) income, net of reclassification adjustments:

Three Months Ended September 30,

Net income $ 158.1 $ 6.3

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments ( 30.3 ) ( 62.7 )

1 unchanged sentence

Deferred gains and losses on derivatives, net of tax ( 1.1 ) ( 1.6 )

Other comprehensive (loss) income, net of reclassification adjustments

Comprehensive income

Comprehensive loss (income) attributable to noncontrolling interests

Comprehensive income attributable to AGCO Corporation and subsidiaries

Six Months Ended June 30,

Other comprehensive (loss) income, net of reclassification adjustments:

Other comprehensive loss, net of reclassification adjustments ( 28.0 ) ( 61.5 )

Comprehensive income (loss) 130.1 ( 55.2 )

Comprehensive loss attributable to noncontrolling interests 1.4 2.0

Comprehensive income (loss) attributable to AGCO Corporation and subsidiaries $ 131.5 $ ( 53.2 )

Nine Months Ended September 30,

Net income $ 284.4 $ 212.4

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments ( 275.4 ) ( 46.1 )

1 unchanged sentence

Deferred gains and losses on derivatives, net of tax 3.9 ( 0.9 )

Other comprehensive (loss) income, net of reclassification adjustments

Comprehensive (loss) income

Other comprehensive loss, net of reclassification adjustments ( 261.2 ) ( 38.2 )

Comprehensive income 23.2 174.2

Comprehensive loss (income) attributable to noncontrolling interests 12.7 ( 0.4 )

Comprehensive (loss) income attributable to AGCO Corporation and subsidiaries

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 35.9 $ 173.8

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(unaudited and in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Net income $ 284.4 $ 212.4

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation 154.9 159.2

Amortization of intangibles 44.7 45.6

3 unchanged sentences

Deferred income tax provision 2.4 43.1

Other 19.2 1.9

Changes in operating assets and liabilities:

6 unchanged sentences

Total adjustments ( 60.3 ) ( 292.6 )

Net cash used in operating activities

Net cash provided by (used in) operating activities 224.1 ( 80.2 )

Cash flows from investing activities:

2 unchanged sentences

Investments in unconsolidated affiliates ( 4.7 ) —

Purchase of businesses, net of cash acquired ( 2.8 ) —

Net cash used in investing activities ( 189.7 ) ( 187.2 )

9 unchanged sentences

Effects of exchange rate changes on cash, cash equivalents and restricted cash ( 15.7 ) ( 11.8 )

Decrease in cash, cash equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and restricted cash 78.2 ( 44.1 )

Cash, cash equivalents and restricted cash, beginning of period 432.8 326.1

46 unchanged sentences

Therefore, adoption of the standard by the Company’s finance joint ventures will likely impact the Company’s “Investment in affiliates” and “Equity in net earnings of affiliates.” The Company’s finance joint ventures currently are evaluating the impact of ASU 2016-13 to their results of operations and financial condition.

Notes to Condensed Consolidated Financial Statements - Continued

RESTRUCTURING EXPENSES

2 unchanged sentences

In addition, during 2019, the Company initiated various restructuring activities in an effort to rationalize its grain storage and protein production system operations.

During the six months ended June 30, 2020 , the Company recorded severance and related costs associated with further rationalizations in connection with the termination of approximately 300 employees.

Restructuring expenses activity during the three and six months ended June 30, 2020 is summarized as follows (in millions):

Write-down of Property, Plant and Equipment

Employee Severance

Facility Closure Costs

During the nine months ended September 30, 2020, the Company recorded severance and related costs associated with further rationalizations in connection with the termination of approximately 320 employees.

Restructuring expenses activity during the three and nine months ended September 30, 2020 is summarized as follows (in millions):

Write-down of Property, Plant and Equipment Employee Severance Facility Closure Costs Total

Balance as of December 31, 2019 $ — $ 4.8 $ — $ 4.8

6 unchanged sentences

Non-cash expense ( 1.6 ) — — ( 1.6 )

Cash expense — 2.2 — 2.2

Second quarter 2020 cash activity — ( 0.8 ) — ( 0.8 )

1 unchanged sentence

Balance as of June 30, 2020 $ — $ 4.9 $ — $ 4.9

Notes to Condensed Consolidated Financial Statements - Continued

Third quarter 2020 provision — 0.9 — 0.9

Third quarter 2020 cash activity — ( 1.1 ) — ( 1.1 )

Third quarter 2020 provision reversal — ( 0.1 ) — ( 0.1 )

Balance as of September 30, 2020 $ — $ 4.6 $ — $ 4.6

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the three and six months ended June 30, 2020 and 2019 (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The Company recorded stock compensation expense as follows for the three and nine months ended September 30, 2020 and 2019 (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Cost of goods sold $ 0.5 $ 0.3 $ 0.9 $ 1.3

3 unchanged sentences

Under the Company’s Long-Term Incentive Plan (the “Plan”), up to 10,000,000 shares of AGCO common stock may be issued.

As of June 30, 2020 , of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,237,655 shares were available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below.

As of September 30, 2020, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,252,617 shares were available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below.

The Plan allows the Company, under the direction of the Board of Directors’ Compensation Committee, to make grants of performance shares, stock appreciation rights, restricted stock units and restricted stock awards to employees, officers and non-employee directors of the Company.

Notes to Condensed Consolidated Financial Statements - Continued

Long-Term Incentive Plan and Related Performance Awards

The weighted average grant-date fair value of performance awards granted under the Plan during the six months ended June 30, 2020 and 2019 was $ 70.84 and $ 61.01 , respectively.

During the six months ended June 30, 2020 , the Company granted 425,440 performance awards related to varying performance periods.

The weighted average grant-date fair value of performance awards granted under the Plan during the nine months ended September 30, 2020 and 2019 was $ 70.84 and $ 61.01 , respectively.

During the nine months ended September 30, 2020, the Company granted 425,440 performance awards related to varying performance periods.

The awards granted assume the maximum target levels of performance are achieved.

The compensation expense associated with all awards granted under the Plan is amortized ratably over the vesting or performance period based on the Company’s projected assessment of the level of performance that will be achieved.

Performance award transactions during the six months ended June 30, 2020 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan awards:

Performance award transactions during the nine months ended September 30, 2020 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan awards:

Shares awarded but not earned at January 1 932,182

2 unchanged sentences

Shares earned —

Shares awarded but not earned at June 30

As of June 30, 2020 , the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $ 25.8 million , and the weighted average period over which it is expected to be recognized is approximately two years .

Shares awarded but not earned at September 30 1,291,764

As of September 30, 2020, the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $ 28.0 million, and the weighted average period over which it is expected to be recognized is approximately two years .

The compensation cost not yet recognized could be higher or lower based on actual achieved levels of performance.

Restricted Stock Unit Awards

During the six months ended June 30, 2020 , the Company granted 95,593 restricted stock unit (“RSU”) awards.

During the nine months ended September 30, 2020, the Company granted 95,593 restricted stock unit (“RSU”) awards.

These awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third per year over a three-year requisite service period, subject to adjustment in certain cases based on performance metric relative to the Company's peer group, commencing in 2020.

The compensation expense associated with these awards is being amortized ratably over the requisite service period for the awards that are expected to vest.

The weighted average grant-date fair value of the RSUs granted under the Plan during the six months ended June 30, 2020 and 2019 was $ 70.83 and $ 61.01 , respectively.

Notes to Condensed Consolidated Financial Statements - Continued

RSU transactions during the six months ended June 30, 2020 were as follows:

The weighted average grant-date fair value of the RSUs granted under the Plan during the nine months ended September 30, 2020 and 2019 was $ 70.83 and $ 61.01 , respectively.

RSU transactions during the nine months ended September 30, 2020 were as follows:

RSUs awarded but not vested at January 1 396,529

RSUs awarded 95,593

RSUs forfeited ( 36,753 )

RSUs awarded but not vested at June 30

As of June 30, 2020 , the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 12.2 million , and the weighted average period over which it is expected to be recognized is approximately one and one-half years .

RSUs vested ( 116,882 )

RSUs awarded but not vested at September 30 338,487

As of September 30, 2020, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 9.7 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

Notes to Condensed Consolidated Financial Statements - Continued

Stock-Settled Appreciation Rights

1 unchanged sentence

The Company estimates the fair value of the grants using the Black-Scholes option pricing model.

SSAR transactions during the six months ended June 30, 2020 were as follows:

SSAR transactions during the nine months ended September 30, 2020 were as follows:

SSARs outstanding at January 1 759,675

2 unchanged sentences

SSARs canceled or forfeited ( 35,061 )

SSARs outstanding at June 30

As of June 30, 2020 , the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 4.8 million , and the weighted average period over which it is expected to be recognized is approximately two and one-half years .

SSARs outstanding at September 30 881,489

As of September 30, 2020, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 4.2 million, and the weighted average period over which it is expected to be recognized is approximately two and one-half years.

Director Restricted Stock Grants

1 unchanged sentence

The 2020 grant was made on April 30, 2020 and equated to 25,542 shares of common stock, of which 19,862 shares of common stock were issued after shares were withheld for taxes.

The Company recorded stock compensation expense of approximately $ 1.4 million during the six months ended June 30, 2020 associated with these grants.

The Company recorded stock compensation expense of approximately $ 1.4 million during the nine months ended September 30, 2020 associated with these grants.

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the six months ended June 30, 2020 are summarized as follows (in millions):

North America

South America

Europe/Middle East

Asia/Pacific/Africa

Changes in the carrying amount of goodwill during the nine months ended September 30, 2020 are summarized as follows (in millions):

North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Balance as of December 31, 2019 $ 606.0 $ 112.2 $ 463.3 $ 116.8 $ 1,298.3

Acquisition 7.2 — — — 7.2

Impairment charge ( 20.0 ) — — — ( 20.0 )

Foreign currency translation ( 0.1 ) ( 31.5 ) 16.7 2.7 ( 12.2 )

Balance as of June 30, 2020

Balance as of September 30, 2020 $ 593.1 $ 80.7 $ 480.0 $ 119.5 $ 1,273.3

On September 10, 2020, the Company acquired 151 Research, Inc., a company specializing in agricultural technology, for approximately $ 2.8 million.

The Company agreed to further contingent consideration related to the acquisition, and therefore recorded a liability of approximately $ 4.4 million as of September 30, 2020 to reflect estimated achievement of agreed upon targets.

The acquisition did not have a material impact on the Company.

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist.

1 unchanged sentence

The COVID-19 pandemic has adversely impacted the global economy as a whole.

Based on current macroeconomic conditions, the Company assessed its goodwill and other intangible assets for indications of impairment as of March 31, 2020 and June 30, 2020 .

As of June 30, 2020 , the Company concluded there were indicators of impairment during the three months ended June 30, 2020 related to one of its smaller reporting units, which is a 50 % -owned tillage and seeding joint venture.

Based on current macroeconomic conditions, the Company assessed its goodwill and other intangible assets for indications of impairment as of March 31, 2020, June 30, 2020 and September 30, 2020.

As of June 30, 2020, the Company concluded there were indicators of impairment during the three months ended June 30, 2020 related to one of its smaller reporting units, which is a 50 %-owned tillage and seeding equipment joint venture.

The Company consolidates the reporting unit as it was determined to be the primary beneficiary of the joint venture.

Deteriorating market conditions for the products the joint venture

Notes to Condensed Consolidated Financial Statements - Continued

sells have been negatively impacted by the COVID-19 pandemic in the second quarter, greater than initially expected.

As a result, recently updated strategic reviews with revised forecasts indicated an impairment of the entire goodwill balance of this reporting unit was necessary as of June 30, 2020 .

Deteriorating market conditions for the products the joint venture sells were negatively impacted by the COVID-19 pandemic in the second quarter, greater than initially expected.

As a result, updated strategic reviews with revised forecasts indicated an impairment of the entire goodwill balance of this reporting unit was necessary as of June 30, 2020.

During the three months ended June 30, 2020, an impairment charge of approximately $ 20.0 million was recorded as "Goodwill impairment charge" within the Company's Condensed Consolidated Statements of Operations, with an offsetting benefit of approximately $ 10.0 million included within "Net loss attributable to noncontrolling interests."

Changes in the carrying amount of acquired intangible assets during the six months ended June 30, 2020 are summarized as follows (in millions):

Notes to Condensed Consolidated Financial Statements - Continued

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2020 are summarized as follows (in millions):

Gross carrying amounts:

Trademarks and Tradenames

Customer Relationships

Patents and Technology

Land Use Rights

Trademarks and Tradenames Customer Relationships Patents and Technology Land Use Rights Total

Balance as of December 31, 2019 $ 199.3 $ 579.0 $ 151.1 $ 8.5 $ 937.9

Foreign currency translation 2.3 ( 3.7 ) 3.0 0.2 1.8

Balance as of June 30, 2020

Balance as of September 30, 2020 $ 201.6 $ 575.3 $ 154.1 $ 8.7 $ 939.7

Accumulated amortization:

Trademarks and Tradenames

Customer Relationships

Patents and Technology

Land Use Rights

Trademarks and Tradenames Customer Relationships Patents and Technology Land Use Rights Total

Balance as of December 31, 2019 $ 83.3 $ 347.4 $ 88.7 $ 3.1 $ 522.5

1 unchanged sentence

Foreign currency translation 0.5 ( 4.7 ) 2.1 0.1 ( 2.0 )

Balance as of June 30, 2020

Balance as of September 30, 2020 $ 91.4 $ 372.7 $ 97.8 $ 3.3 $ 565.2

Indefinite-lived intangible assets:

2 unchanged sentences

Foreign currency translation 1.4

Balance as of June 30, 2020

Balance as of September 30, 2020 $ 87.7

The Company currently amortizes certain acquired intangible assets, primarily on a straight-line basis, over their estimated useful lives, which range from five to 50 years.

Long-term debt consisted of the following at June 30, 2020 and December 31, 2019 (in millions):

June 30, 2020

December 31, 2019

Long-term debt consisted of the following at September 30, 2020 and December 31, 2019 (in millions):

September 30, 2020 December 31, 2019

Senior term loan due 2022 $ 175.4 $ 168.1

4 unchanged sentences

Debt issuance costs ( 2.8 ) ( 2.3 )

1,515.5 1,194.7

Senior term loans due 2021 ( 84.2 ) —

Current portion of other long-term debt ( 2.0 ) ( 2.9 )

2 unchanged sentences

In October 2018, the Company entered into a term loan agreement with Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.

(“Rabobank”) in the amount of € 150.0 million (or approximately $ 168.1 million as of June 30, 2020 ).

Notes to Condensed Consolidated Financial Statements - Continued

(“Rabobank”) in the amount of € 150.0 million (or approximately $ 175.4 million as of September 30, 2020).

The Company is permitted to prepay the term loan before its maturity date of October 28, 2022.

Interest is payable on the term loan quarterly in arrears at an annual rate equal to the Euro Interbank Offered Rate (“EURIBOR”) plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating.

Notes to Condensed Consolidated Financial Statements - Continued

Credit Facility

3 unchanged sentences

dollars plus 1.0 %, plus a margin ranging from 0.0 % to 0.875 % based on the Company’s credit rating.

As of June 30, 2020 , the Company had approximately $ 196.1 million of outstanding borrowings under the revolving credit facility and the ability to borrow approximately $ 603.9 million under the revolving credit facility.

As of December 31, 2019 , the Company had no outstanding borrowings under the revolving credit facility and the ability to borrow approximately $ 800.0 million under the revolving credit facility.

On April 9, 2020, the Company entered into an amendment to its $ 800.0 million multi-currency revolving credit facility to include incremental term loans (“2020 term loans”) that allow the Company to borrow an aggregate principal amount of € 235.0 million and $ 267.5 million , respectively (or an aggregate of approximately $ 530.9 million as of June 30, 2020 ).

As of September 30, 2020 and December 31, 2019, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $ 800.0 million under the revolving credit facility.

On April 9, 2020, the Company entered into an amendment to its $ 800.0 million multi-currency revolving credit facility to include incremental term loans (“2020 term loans”) that allow the Company to borrow an aggregate principal amount of € 235.0 million and $ 267.5 million, respectively (or an aggregate of approximately $ 542.4 million as of September 30, 2020).

Amounts can be drawn incrementally at any time prior to maturity, but must be drawn down proportionately.

6 unchanged sentences

The Company also has to fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio.

On April 15, 2020, the Company borrowed € 117.5 million and $ 133.8 million (or an aggregate of approximately $ 265.5 million as of June 30, 2020 ) of 2020 term loans.

On April 15, 2020, the Company borrowed € 117.5 million and $ 133.8 million (or an aggregate of approximately $ 271.2 million as of September 30, 2020) of 2020 term loans.

The Company simultaneously repaid € 100.0 million (or approximately $ 108.7 million) of its revolving credit facility from the borrowings received.

There were no other borrowings on the 2020 term loans subsequent to the initial borrowings in April during the three months ended June 30, 2020.

As of June 30, 2020 , the Company had the ability to borrow approximately $ 265.4 million of 2020 term loans.

There were no other borrowings on the 2020 term loans subsequent to the initial borrowings in April 2020.

As of September 30, 2020, the Company had the ability to borrow approximately $ 271.2 million of 2020 term loans.

Interest on U.S.

dollar borrowings under the Company's credit facility and the 2020 term loans is calculated based upon LIBOR.

dollar borrowings under the Company's revolving credit facility and the 2020 term loans is calculated based upon LIBOR.

In the event that LIBOR is no longer published, interest will be calculated upon a base rate.

The credit facility and 2020 term loans also provides for an expedited amendment process once a replacement for LIBOR is established.

The revolving credit facility and the 2020 term loans also provide for an expedited amendment process once a replacement for LIBOR is established.

1.002 % Senior Term Loan Due 2025

In December 2018, the Company entered into a term loan with the European Investment Bank ("EIB"), which provided the Company with the ability to borrow up to € 250.0 million.

The € 250.0 million (or approximately $ 280.3 million as of June 30, 2020 ) of funding was received on January 25, 2019 with a maturity date of January 24, 2025.

The € 250.0 million (or approximately $ 292.4 million as of September 30, 2020) of funding was received on January 25, 2019 with a maturity date of January 24, 2025.

The Company is permitted to prepay the term loan before its maturity date.

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

In aggregate, the Company has indebtedness of € 657.0 million (or approximately $ 736.5 million as of June 30, 2020 ) through this group of twelve related term loan agreements.

In aggregate, the Company has indebtedness of € 657.0 million (or approximately $ 768.4 million as of September 30, 2020) through this group of twelve related term loan agreements.

The provisions of the term loan agreements are substantially identical, with the exception of interest rate terms and maturities.

3 unchanged sentences

Short-Term Borrowings

As of June 30, 2020 and December 31, 2019 , the Company had short-term borrowings due within one year of approximately $ 102.6 million and $ 150.5 million , respectively.

As of September 30, 2020 and December 31, 2019, the Company had short-term borrowings due within one year of approximately $ 47.7 million and $ 150.5 million, respectively.

Standby Letters of Credit and Similar Instruments

The Company has arrangements with various banks to issue standby letters of credit or similar instruments, which guarantee the Company’s obligations for the purchase or sale of certain inventories and for potential claims exposure for insurance coverage.

At June 30, 2020 and December 31, 2019 , outstanding letters of credit totaled approximately $ 14.4 million and $ 13.9 million , respectively.

At September 30, 2020 and December 31, 2019, outstanding letters of credit totaled approximately $ 14.4 million and $ 13.9 million, respectively.

RECOVERABLE INDIRECT TAXES

3 unchanged sentences

The Company believes that these tax credits, net of established reserves, are realizable.

The Company had recorded approximately $ 99.1 million and $ 142.3 million , respectively, of VAT tax credits, net of reserves, as of June 30, 2020 and December 31, 2019 .

Inventories at June 30, 2020 and December 31, 2019 were as follows (in millions):

June 30, 2020

December 31, 2019

The Company had recorded approximately $ 93.7 million and $ 142.3 million, respectively, of VAT tax credits, net of reserves, as of September 30, 2020 and December 31, 2019.

Inventories at September 30, 2020 and December 31, 2019 were as follows (in millions):

September 30, 2020 December 31, 2019

Finished goods $ 734.4 $ 780.1

3 unchanged sentences

Inventories, net $ 2,057.1 $ 2,078.7

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

The warranty reserve activity for the three and six months ended June 30, 2020 and 2019 consisted of the following (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

The warranty reserve activity for the three and nine months ended September 30, 2020 and 2019 consisted of the following (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Balance at beginning of period $ 409.0 $ 371.9 $ 392.8 $ 360.9

Acquisition 0.2 — 0.2 —

Accruals for warranties issued during the period 73.2 46.8 187.1 145.9

1 unchanged sentence

Foreign currency translation 12.5 ( 13.3 ) 2.4 ( 13.8 )

Balance at June 30

Notes to Condensed Consolidated Financial Statements - Continued

Balance at September 30 $ 438.4 $ 359.4 $ 438.4 $ 359.4

The Company’s agricultural equipment products generally are warranted against defects in material and workmanship for a period of one to four years .

The Company accrues for future warranty costs at the time of sale based on historical warranty experience.

Approximately $ 334.3 million and $ 331.9 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 , respectively.

Approximately $ 74.7 million and $ 60.9 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 , respectively.

Approximately $ 356.4 million and $ 331.9 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively.

Approximately $ 82.0 million and $ 60.9 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively.

The Company recognizes recoveries of the costs associated with warranties it provides when the collection is probable.

When specifics of the recovery have been agreed upon with the Company’s suppliers through confirmation of liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net.” Estimates of the amount of warranty claim recoveries to be received from the Company’s suppliers based upon contractual supplier arrangements are recorded within “Other current assets.”

Notes to Condensed Consolidated Financial Statements - Continued

NET INCOME PER COMMON SHARE

1 unchanged sentence

Diluted net income per common share assumes the exercise of outstanding SSARs and the vesting of performance share awards and RSUs using the treasury stock method when the effects of such assumptions are dilutive.

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and six months ended June 30, 2020 and 2019 is as follows (in millions, except per share data):

Three Months Ended June 30,

Six Months Ended June 30,

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions, except per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Basic net income per share:

7 unchanged sentences

Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share

75.4 76.7 75.5 77.1

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 2.09 $ 0.10 $ 3.86 $ 2.77

SSARs to purchase approximately 0.7 million shares of the Company’s common stock for both three and six months ended June 30, 2020 , and approximately 0.4 million and 0.6 million shares of the Company's common stock for the three and six months ended June 30, 2019 , respectively, were outstanding but not included in the calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

SSARs to purchase approximately 0.5 million and 0.7 million shares of the Company’s common stock for the three and nine months ended September 30, 2020, and approximately 0.2 million and 0.4 million shares of the Company's common stock for the three and nine months ended September 30, 2019, respectively, were outstanding but not included in the calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

Notes to Condensed Consolidated Financial Statements - Continued

At June 30, 2020 and December 31, 2019 , the Company had approximately $ 229.4 million and $ 210.7 million , respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of June 30, 2020 and December 31, 2019 include certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 50.9 million and $ 44.9 million , respectively.

At June 30, 2020 and December 31, 2019 , the Company had approximately $ 53.4 million and $ 51.0 million , respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months.

At September 30, 2020 and December 31, 2019, the Company had approximately $ 248.0 million and $ 210.7 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of September 30, 2020 and December 31, 2019 include certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 55.0 million and $ 44.9 million, respectively.

At September 30, 2020 and December 31, 2019, the Company had approximately $ 99.0 million and $ 51.0 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months.

The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes.

At June 30, 2020 and December 31, 2019 , the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 33.8 million and $ 28.4 million , respectively.

At September 30, 2020 and December 31, 2019, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 37.5 million and $ 28.4 million, respectively.

Generally, tax years 2014 through 2019 remain open to examination by taxing authorities in the United States and certain other foreign tax jurisdictions.

The Company and its subsidiaries are routinely examined by tax authorities in the United States and in various state, local and foreign jurisdictions.

As of June 30, 2020 , a number of income tax examinations in foreign jurisdictions are ongoing.

The Company maintains a valuation allowance to fully reserve against its net deferred tax assets in the United States and certain other foreign jurisdictions.

As of September 30, 2020, a number of income tax examinations in foreign jurisdictions are ongoing.

The Company maintains a valuation allowance to fully reserve against its net deferred tax assets in the United States, Brazil and certain other foreign jurisdictions.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and available tax planning strategies and determined that all adjustments to the valuation allowances were appropriate.

During the third quarter of 2019, the Company recorded a non-cash deferred income tax charge of approximately $ 53.7 million to establish a valuation allowance against its Brazilian net deferred income tax assets.

The Company regularly assesses the likelihood that its deferred tax assets will be recovered from estimated future taxable income and available tax planning strategies and has determined that all adjustments to the valuation allowances have been appropriate.

In making this assessment, all available evidence was considered including the current economic climate, as well as reasonable tax planning strategies.

The Company believes it is more likely than not that the Company will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

On March 27, 2020, the CARES Act (the “Act”) was enacted in the United States in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses.

On March 27, 2020, the CARES Act (the “Act”) was enacted in the United States in response to the COVID-19 pandemic to, among other things, provide tax relief to businesses.

Tax provisions of the Act include the deferral of certain payroll taxes, relief for retaining employees and other provisions.

9 unchanged sentences

During 2020 and 2019, the Company designated certain foreign currency contracts as cash flow hedges of expected future sales and purchases.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 125.3 million and $ 332.7 million as of June 30, 2020 and December 31, 2019 , respectively.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 196.3 million and $ 332.7 million as of September 30, 2020 and December 31, 2019, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and six months ended June 30, 2020 and 2019 (in millions):

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and nine months ended September 30, 2020 and 2019 (in millions):

Recognized in Net Income

Three Months Ended June 30,

Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss

Classification of Gain (Loss)

Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)

Foreign currency contracts

Cost of goods sold

Foreign currency contracts

Cost of goods sold

Three Months Ended September 30, Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)

Foreign currency contracts $ ( 0.1 ) Cost of goods sold $ 1.0 $ 1,918.8

Foreign currency contracts $ 0.1 Cost of goods sold $ 1.7 $ 1,659.2

Recognized in Net Income

Six Months Ended June 30,

Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss

Classification of Gain (Loss)

Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)

Foreign currency contracts (1)

Cost of goods sold

Nine Months Ended September 30, Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss Classification of Gain (Loss) Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)

Foreign currency contracts (1)

$ 8.1 Cost of goods sold $ 4.2 $ 4,970.7

(1) The outstanding contracts as of June 30, 2020 range in maturity through December 2020 .

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the six months ended June 30, 2020 (in millions):

Before-Tax Amount

After-Tax Amount

Foreign currency contracts $ ( 0.3 ) Cost of goods sold $ 0.6 $ 5,057.0

(1) The outstanding contracts as of September 30, 2020 range in maturity through December 2020.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the nine months ended September 30, 2020 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated derivative net losses as of December 31, 2019 $ ( 1.5 ) $ ( 0.2 ) $ ( 1.3 )

1 unchanged sentence

Net gains reclassified from accumulated other comprehensive loss into income ( 4.4 ) ( 0.2 ) ( 4.2 )

Accumulated derivative net gains as of June 30, 2020

Accumulated derivative net gains as of September 30, 2020 $ 3.0 $ 0.4 $ 2.6

Net Investment Hedges

6 unchanged sentences

The cross currency swap has an expiration date of January 19, 2021.

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 245.7 million (or approximately $ 275.4 million as of June 30, 2020 ) and will receive $ 300.0 million from the counterparties.

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 245.7 million (or approximately $ 287.4 million as of September 30, 2020) and will receive $ 300.0 million from the counterparties.

The Company will receive quarterly interest payments from the counterparties based on a fixed interest rate until maturity of the cross currency swap.

1 unchanged sentence

In May 2020, the Company repaid the designated amount outstanding under its multi-currency revolving credit facility and the foreign currency denominated debt was de-designated as a net investment hedge.

During the six months ended June 30, 2019 , the Company designated € 160.0 million (or approximately $ 182.1 million as of June 30, 2019 ) of its multi-currency revolving credit facility as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

During the nine months ended September 30, 2019, the Company designated € 190.0 million of its multi-currency revolving credit facility as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

During September 2019, the Company repaid the designated amount outstanding under its multi-currency revolving credit facility and the foreign currency denominated debt was de-designated as a net investment hedge.

1 unchanged sentence

Notional Amount as of

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Cross currency swap contract $ 300.0 $ 300.0

The following table summarizes the after-tax impact of changes in the fair value of the instrument designated as a net investment hedge during the three and six months ended June 30, 2020 and 2019 (in millions):

The following table summarizes the after-tax impact of changes in the fair value of the instrument designated as a net investment hedge during the three and nine months ended September 30, 2020 and 2019 (in millions):

Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss for the Three Months Ended

Gain Recognized in Accumulated

Other Comprehensive Loss for the Six Months Ended

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Other Comprehensive Loss for the Three Months Ended Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss for the Nine Months Ended

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Cross currency swap contract $ ( 13.3 ) $ 12.0 $ ( 11.8 ) $ 16.8

4 unchanged sentences

Gains and losses on such contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and are immediately recognized into earnings.

As of June 30, 2020 and December 31, 2019 , the Company had outstanding foreign currency contracts with a notional amount of approximately $ 2,552.4 million and $ 2,800.3 million , respectively.

As of September 30, 2020 and December 31, 2019, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 2,795.5 million and $ 2,800.3 million, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

The following table summarizes the impact that changes in the fair value of derivatives not designated as hedging instruments had on net income (in millions):

Loss Recognized in Net Income for the Three Months Ended

Gain Recognized in Net Income for the Six Months Ended

Gain (Loss) Recognized in Net Income for the Three Months Ended Gain Recognized in Net Income for the Nine Months Ended

Classification of Gain (Loss)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Foreign currency contracts

Other expense, net

Notes to Condensed Consolidated Financial Statements - Continued

The table below sets forth the fair value of derivative instruments as of June 30, 2020 (in millions):

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Foreign currency contracts Other expense, net $ ( 7.0 ) $ 25.6 $ 16.1 $ 31.3

The table below sets forth the fair value of derivative instruments as of September 30, 2020 (in millions):

Asset Derivatives as of

June 30, 2020

Liability Derivatives as of

June 30, 2020

Balance Sheet Location

September 30, 2020 Liability Derivatives as of

September 30, 2020

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Derivative instruments designated as hedging instruments:

Foreign currency contracts

Other current assets

Other current liabilities

Cross currency swap contract

Other noncurrent assets

Other noncurrent liabilities

Foreign currency contracts Other current assets $ 3.5 Other current liabilities $ 0.5

Cross currency swap contract Other noncurrent assets 15.2 Other noncurrent liabilities —

Derivative instruments not designated as hedging instruments:

Foreign currency contracts

Other current assets

Other current liabilities

Foreign currency contracts Other current assets 19.9 Other current liabilities 11.4

Total derivative instruments $ 38.6 $ 11.9

1 unchanged sentence

Asset Derivatives as of

December 31, 2019

Liability Derivatives as of

December 31, 2019 Liability Derivatives as of

December 31, 2019

Balance Sheet Location

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Derivative instruments designated as hedging instruments:

Foreign currency contracts

Other current assets

Other current liabilities

Cross currency swap contract

Other noncurrent assets

Other noncurrent liabilities

Foreign currency contracts Other current assets $ 0.6 Other current liabilities $ 1.9

Cross currency swap contract Other noncurrent assets 27.0 Other noncurrent liabilities —

Derivative instruments not designated as hedging instruments:

Foreign currency contracts

Other current assets

Other current liabilities

Foreign currency contracts Other current assets 11.7 Other current liabilities 13.1

Total derivative instruments $ 39.3 $ 15.0

1 unchanged sentence

CHANGES IN STOCKHOLDERS’ EQUITY

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and six months ended June 30, 2020 (in millions):

Paid-in Capital

Accumulated Other

Comprehensive Loss

Noncontrolling

Total Stockholders’

Balance, March 31, 2020

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and nine months ended September 30, 2020 (in millions):

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, June 30, 2020 $ 0.8 $ 10.1 $ 4,490.4 $ ( 1,825.2 ) $ 41.4 $ 2,717.5

Stock compensation — 14.1 — — — 14.1

Issuance of stock awards

Comprehensive income:

2 unchanged sentences

Foreign currency translation adjustments

— — — ( 28.1 ) ( 2.2 ) ( 30.3 )

Defined benefit pension plans, net of tax

— — — 3.4 — 3.4

Deferred gains and losses on derivatives, net of tax

— — — ( 1.1 ) — ( 1.1 )

Payment of dividends to stockholders

— — ( 12.0 ) — — ( 12.0 )

Change in noncontrolling interest

Balance, June 30, 2020

Paid-in Capital

Accumulated Other

Comprehensive Loss

Noncontrolling

Total Stockholders’

— — — — 0.2 0.2

Balance, September 30, 2020 $ 0.8 $ 24.2 $ 4,635.7 $ ( 1,851.0 ) $ 40.2 $ 2,849.9

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, December 31, 2019 $ 0.8 $ 4.7 $ 4,443.5 $ ( 1,595.2 ) $ 53.2 $ 2,907.0

1 unchanged sentence

Issuance of stock awards

— ( 7.3 ) ( 8.4 ) — — ( 15.7 )

SSARs exercised — — ( 0.1 ) — — ( 0.1 )

1 unchanged sentence

Net income (loss)

— — 291.7 — ( 7.3 ) 284.4

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments

— — — ( 270.0 ) ( 5.4 ) ( 275.4 )

Defined benefit pension plans, net of tax

— — — 10.3 — 10.3

Deferred gains and losses on derivatives, net of tax

— — — 3.9 — 3.9

Payment of dividends to stockholders

— — ( 36.0 ) — — ( 36.0 )

Purchases and retirement of common stock

— ( 3.4 ) ( 51.6 ) — — ( 55.0 )

Change in noncontrolling interest — — — — ( 0.3 ) ( 0.3 )

Balance, June 30, 2020

Balance, September 30, 2020 $ 0.8 $ 24.2 $ 4,635.7 $ ( 1,851.0 ) $ 40.2 $ 2,849.9

Notes to Condensed Consolidated Financial Statements - Continued

Paid-in Capital

Accumulated Other

Comprehensive Loss

Noncontrolling

Total Stockholders’

Balance, March 31, 2019

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, June 30, 2019 $ 0.8 $ 7.1 $ 4,591.1 $ ( 1,534.3 ) $ 64.0 $ 3,128.7

Stock compensation — 8.1 — — — 8.1

Issuance of stock awards

— — ( 0.1 ) — — ( 0.1 )

SSARs exercised — — ( 0.7 ) — — ( 0.7 )

1 unchanged sentence

Net income (loss)

Other comprehensive income, net of reclassification adjustments:

— — 7.6 — ( 1.3 ) 6.3

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments

— — — ( 62.0 ) ( 0.7 ) ( 62.7 )

Defined benefit pension plans, net of tax

— — — 2.8 — 2.8

Deferred gains and losses on derivatives, net of tax

— — — ( 1.6 ) — ( 1.6 )

Payment of dividends to stockholders

— — ( 12.2 ) — — ( 12.2 )

Purchases and retirement of common stock

— ( 11.3 ) ( 18.7 ) — — ( 30.0 )

Investment by noncontrolling interests

Balance, June 30, 2019

Paid-in Capital

Accumulated Other

Comprehensive Loss

Noncontrolling

Total Stockholders’

— — — — 0.2 0.2

Balance, September 30, 2019

$ 0.8 $ 3.9 $ 4,567.0 $ ( 1,595.1 ) $ 62.2 $ 3,038.8

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, December 31, 2018 $ 0.8 $ 10.2 $ 4,477.3 $ ( 1,555.4 ) $ 60.6 $ 2,993.5

1 unchanged sentence

Issuance of stock awards

— ( 13.2 ) ( 9.8 ) — — ( 23.0 )

SSARs exercised — ( 3.1 ) ( 1.0 ) — — ( 4.1 )

Comprehensive income:

Other comprehensive income, net of reclassification adjustments:

Net income (loss) — — 213.5 — ( 1.1 ) 212.4

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments

— — — ( 47.6 ) 1.5 ( 46.1 )

Defined benefit pension plans, net of tax

— — — 8.8 — 8.8

Deferred gains and losses on derivatives, net of tax

— — — ( 0.9 ) — ( 0.9 )

Payment of dividends to stockholders

— — ( 35.9 ) — — ( 35.9 )

Purchases and retirement of common stock

— ( 22.9 ) ( 77.1 ) — — ( 100.0 )

Investment by noncontrolling interests — — — — 1.2 1.2

Balance, June 30, 2019

Balance, September 30, 2019

$ 0.8 $ 3.9 $ 4,567.0 $ ( 1,595.1 ) $ 62.2 $ 3,038.8

Notes to Condensed Consolidated Financial Statements - Continued

Total comprehensive (loss) income attributable to noncontrolling interests for the three and six months ended June 30, 2020 and 2019 was as follows (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Net (loss) income

Total comprehensive (loss) income attributable to noncontrolling interests for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Net income (loss) $ 0.8 $ ( 1.3 ) $ ( 7.3 ) $ ( 1.1 )

Other comprehensive (loss) income:

1 unchanged sentence

Total comprehensive (loss) income $ ( 1.4 ) $ ( 2.0 ) $ ( 12.7 ) $ 0.4

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the six months ended June 30, 2020 (in millions):

Defined Benefit Pension Plans

Deferred Net Gains (Losses) on Derivatives

Cumulative Translation Adjustment

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the nine months ended September 30, 2020 (in millions):

Defined Benefit Pension Plans Deferred Net Gains (Losses) on Derivatives Cumulative Translation Adjustment Total

Accumulated other comprehensive loss, December 31, 2019

$ ( 296.4 ) $ ( 1.3 ) $ ( 1,297.5 ) $ ( 1,595.2 )

Other comprehensive income (loss) before reclassifications — 8.1 ( 270.0 ) ( 261.9 )

1 unchanged sentence

Other comprehensive income (loss), net of reclassification adjustments 10.3 3.9 ( 270.0 ) ( 255.8 )

Accumulated other comprehensive loss, June 30, 2020

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three months ended June 30, 2020 and 2019 (in millions):

Amount Reclassified from Accumulated Other Comprehensive Loss

Affected Line Item within the Condensed Consolidated

Accumulated other comprehensive loss, September 30, 2020

$ ( 286.1 ) $ 2.6 $ ( 1,567.5 ) $ ( 1,851.0 )

Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Condensed Consolidated

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components

Three Months Ended June 30, 2020 (1)

Three Months Ended June 30, 2019 (1)

Net (gains) losses on foreign currency contracts

Cost of goods sold

Details about Accumulated Other Comprehensive Loss Components Three Months Ended September 30, 2020 (1)

Three Months Ended September 30, 2019 (1)

Net gains on foreign currency contracts $ ( 1.2 ) $ ( 1.6 ) Cost of goods sold

Reclassification before tax ( 1.2 ) ( 1.6 )

Income tax provision

0.2 ( 0.1 ) Income tax benefit (provision)

Reclassification net of tax $ ( 1.0 ) $ ( 1.7 )

Defined benefit pension plans:

Amortization of net actuarial losses

Other expense, net (2)

Amortization of prior service cost

Other expense, net (2)

Amortization of net actuarial losses $ 3.5 $ 2.9 Other expense, net (2)

Amortization of prior service cost 0.5 0.4 Other expense, net (2)

Reclassification before tax 4.0 3.3

2 unchanged sentences

Net losses reclassified from accumulated other comprehensive loss $ 2.4 $ 1.1

(1) (Gains) losses included within the Condensed Consolidated Statements of Operations for the three months ended June 30, 2020 and 2019 , respectively.

(1) (Gains) losses included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2020 and 2019, respectively.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements - Continued

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the six months ended June 30, 2020 and 2019 (in millions):

Amount Reclassified from Accumulated Other Comprehensive Loss

Affected Line Item within the Condensed Consolidated

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the nine months ended September 30, 2020 and 2019 (in millions):

Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Condensed Consolidated

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components

Six Months Ended June 30, 2020 (1)

Six Months Ended June 30, 2019 (1)

Net (gains) losses on foreign currency contracts

Cost of goods sold

Details about Accumulated Other Comprehensive Loss Components Nine Months Ended September 30, 2020 (1)

Nine Months Ended September 30, 2019 (1)

Net gains on foreign currency contracts $ ( 4.4 ) $ ( 0.5 ) Cost of goods sold

Reclassification before tax ( 4.4 ) ( 0.5 )

2 unchanged sentences

Defined benefit pension plans:

Amortization of net actuarial losses

Other expense, net (2)

Amortization of prior service cost

Other expense, net (2)

Amortization of net actuarial losses $ 10.2 $ 9.0 Other expense, net (2)

Amortization of prior service cost 1.7 1.3 Other expense, net (2)

Reclassification before tax 11.9 10.3

2 unchanged sentences

Net losses reclassified from accumulated other comprehensive loss $ 6.1 $ 8.2

(1) (Gains) losses included within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2020 and 2019 , respectively.

(1) (Gains) losses included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020 and 2019, respectively.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost.

1 unchanged sentence

Share Repurchase Program

During the three months ended June 30, 2020 , the Company did not purchase any shares directly or enter into any accelerated share repurchase (“ASR”) agreements as a result of its suspension of share repurchases until business visibility improves.

During the three months ended September 30, 2020, the Company did not purchase any shares directly or enter into any accelerated share repurchase (“ASR”) agreements as a result of its suspension of share repurchases until business visibility improves.

During the three months ended March 31, 2020, the Company entered into ASR agreements with a financial institution to repurchase an aggregate of $ 55.0 million of shares of its common stock.

1 unchanged sentence

The specific number of shares the Company ultimately repurchased was determined at the completion of the term of the ASR agreements based on the daily volume-weighted average share price of the Company’s common stock less an agreed upon discount.

Upon settlement of the ASR agreements, the Company was entitled to receive additional shares of common stock or, under certain circumstances, was required to remit a settlement amount.

All shares received under the ASR agreements were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets.

As of June 30, 2020 , the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 245.0 million , which has no expiration date .

As of September 30, 2020, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 245.0 million, which has no expiration date.

Notes to Condensed Consolidated Financial Statements - Continued

1 unchanged sentence

The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures.

As of June 30, 2020 and December 31, 2019 , the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 1.5 billion and $ 1.6 billion , respectively.

As of September 30, 2020 and December 31, 2019, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 1.5 billion and $ 1.6 billion, respectively.

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays an annual fee related to the servicing of the receivables sold.

3 unchanged sentences

The Company reviewed its accounting for the accounts receivable sales agreements and determined that these facilities should be accounted for as off-balance sheet transactions.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 4.3 million and $ 12.4 million , respectively, during the three and six months ended June 30, 2020 .

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 11.0 million and $ 19.7 million , respectively, during the three and six months ended June 30, 2019 .

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 6.1 million and $ 18.5 million, respectively, during the three and nine months ended September 30, 2020.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 10.6 million and $ 30.3 million, respectively, during the three and nine months ended September 30, 2019.

The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers.

1 unchanged sentence

The Company does not service the receivables after the sale occurs and does not maintain any direct retained interest in the receivables.

As of June 30, 2020 and December 31, 2019 , these finance joint ventures had approximately $ 77.3 million and $ 104.3 million , respectively, of outstanding accounts receivable associated with these arrangements.

As of September 30, 2020 and December 31, 2019, these finance joint ventures had approximately $ 67.5 million and $ 104.3 million, respectively, of outstanding accounts receivable associated with these arrangements.

The Company reviewed its accounting for these arrangements and determined that these arrangements should be accounted for as off-balance sheet transactions.

3 unchanged sentences

PENSION AND POSTRETIREMENT BENEFIT PLANS

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and six months ended June 30, 2020 and 2019 are set forth below (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019 are set forth below (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Pension benefits 2020 2019 2020 2019

Service cost $ 4.0 $ 3.9 $ 12.0 $ 11.7

Interest cost 4.1 5.1 12.3 15.7

3 unchanged sentences

Net periodic pension cost $ 4.9 $ 5.5 $ 14.7 $ 16.5

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Postretirement benefits 2020 2019 2020 2019

Service cost $ — $ 0.1 $ — $ 0.1

Interest cost 0.3 0.3 0.9 1.0

3 unchanged sentences

The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations.

The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s defined pension and postretirement benefit plans during the six months ended June 30, 2020 (in millions):

Before-Tax Amount

After-Tax Amount

The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s defined pension and postretirement benefit plans during the nine months ended September 30, 2020 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated other comprehensive loss as of December 31, 2019 $ ( 393.2 ) $ ( 96.8 ) $ ( 296.4 )

1 unchanged sentence

Amortization of prior service cost 1.7 0.1 1.6

Accumulated other comprehensive loss as of June 30, 2020

During the six months ended June 30, 2020 , the Company made approximately $ 17.1 million of contributions to its defined pension benefit plans.

Accumulated other comprehensive loss as of September 30, 2020 $ ( 381.3 ) $ ( 95.2 ) $ ( 286.1 )

During the nine months ended September 30, 2020, the Company made approximately $ 23.8 million of contributions to its defined pension benefit plans.

The Company currently estimates its minimum contributions for 2020 to its defined pension benefit plans will aggregate approximately $ 32.5 million.

During the six months ended June 30, 2020 , the Company made approximately $ 0.7 million of contributions to its postretirement health care and life insurance benefit plans.

During the nine months ended September 30, 2020, the Company made approximately $ 1.1 million of contributions to its postretirement health care and life insurance benefit plans.

The Company currently estimates that it will make approximately $ 1.6 million of contributions to its postretirement health care and life insurance benefit plans during 2020.

17 unchanged sentences

See Note 11 for additional information on the Company’s derivative instruments and hedging activities.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 are summarized below (in millions):

As of June 30, 2020

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 are summarized below (in millions):

As of September 30, 2020

Level 1 Level 2 Level 3 Total

Derivative assets $ — $ 38.6 $ — $ 38.6

1 unchanged sentence

As of December 31, 2019

Level 1 Level 2 Level 3 Total

Derivative assets $ — $ 39.3 $ — $ 39.3

2 unchanged sentences

See Note 5 for additional information on the Company’s long-term debt.

Notes to Condensed Consolidated Financial Statements - Continued

RELATED PARTIES

The Company has a minority equity interest in Tractors and Farm Equipment Limited (“TAFE”), which manufactures and sells Massey Ferguson-branded equipment primarily in India, and also supplies tractors and components to the Company for sale in other markets.

On October 15, 2020, TAFE repurchased 461,000 shares of its common stock from the Company for approximately $ 33.9 million, resulting in an approximate remaining 20.7 % ownership interest.

Mallika Srinivasan, who is the Chairman and Managing Director of TAFE, is currently a member of the Company’s Board of Directors.

SEGMENT REPORTING

3 unchanged sentences

The Company’s selling, general and administrative expenses and engineering expenses are generally charged to each segment based on the region and division where the expenses are incurred.

As a result, the components of income from operations for one segment may not be comparable to another segment.

Segment results for the three and six months ended June 30, 2020 and 2019 and assets as of June 30, 2020 and December 31, 2019 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended June 30,

North America

South America

Europe/Middle East

Asia/Pacific/Africa

Notes to Condensed Consolidated Financial Statements - Continued

the components of income from operations for one segment may not be comparable to another segment.

Segment results for the three and nine months ended September 30, 2020 and 2019 and assets as of September 30, 2020 and December 31, 2019 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended September 30, North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Net sales $ 582.2 $ 273.9 $ 1,405.9 $ 235.5 $ 2,497.5

Income from operations 58.3 16.7 187.5 23.8 286.3

Depreciation 15.4 6.1 26.6 4.5 52.6

Capital expenditures 9.2 2.9 52.8 0.7 65.6

Net sales $ 536.2 $ 239.4 $ 1,145.7 $ 188.1 $ 2,109.4

Income (loss) from operations 32.5 ( 5.6 ) 122.0 11.5 160.4

Depreciation 15.0 8.0 25.4 3.7 52.1

Capital expenditures 11.4 7.7 51.2 2.9 73.2

Six Months Ended June 30,

North America

South America

Europe/Middle East

Asia/Pacific/Africa

Income (loss) from operations

Nine Months Ended September 30, North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Net sales $ 1,689.9 $ 606.3 $ 3,644.2 $ 492.2 $ 6,432.6

Income from operations 183.9 13.4 380.8 36.5 614.6

Depreciation 46.2 19.6 79.0 10.1 154.9

Capital expenditures 27.5 13.3 137.3 5.0 183.1

Net sales $ 1,651.3 $ 581.3 $ 3,813.5 $ 481.7 $ 6,527.8

Income (loss) from operations 114.5 ( 21.2 ) 458.5 21.9 573.7

Depreciation 46.7 24.7 77.8 10.0 159.2

Capital expenditures 41.3 24.8 116.1 5.9 188.1

As of June 30, 2020

As of September 30, 2020 $ 1,168.2 $ 626.0 $ 2,343.2 $ 515.4 $ 4,652.8

As of December 31, 2019 1,125.6 758.0 2,187.7 430.2 4,501.5

Notes to Condensed Consolidated Financial Statements - Continued

A reconciliation from the segment information to the consolidated balances for income from operations and total assets is set forth below (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Segment income from operations $ 286.3 $ 160.4 $ 614.6 $ 573.7

1 unchanged sentence

Amortization of intangibles ( 14.8 ) ( 14.9 ) ( 44.7 ) ( 45.6 )

Goodwill impairment charge

Stock compensation expense ( 13.7 ) ( 7.8 ) ( 26.3 ) ( 32.0 )

Goodwill impairment charge — — ( 20.0 ) —

Restructuring expenses ( 0.8 ) ( 1.3 ) ( 5.4 ) ( 3.0 )

Consolidated income from operations $ 224.0 $ 105.9 $ 421.7 $ 397.9

June 30, 2020

December 31, 2019

Notes to Condensed Consolidated Financial Statements - Continued

September 30, 2020 December 31, 2019

Segment assets $ 4,652.8 $ 4,501.5

3 unchanged sentences

Intangible assets, net 462.2 501.7

Goodwill 1,273.3 1,298.3

Consolidated total assets $ 7,940.3 $ 7,759.7

4 unchanged sentences

The Company believes that any losses that it might incur on the resale of this equipment will not be material, due to the fair value of the underlying equipment.

At June 30, 2020 , the Company has outstanding guarantees of indebtedness owed to third parties of approximately $ 25.4 million , primarily related to dealer and end-user financing of equipment.

At September 30, 2020, the Company has outstanding guarantees of indebtedness owed to third parties of approximately $ 18.4 million, primarily related to dealer and end-user financing of equipment.

Such guarantees generally obligate the Company to repay outstanding finance obligations owed to financial institutions if dealers or end users default on such loans through 2026.

4 unchanged sentences

The Company believes the credit risk associated with these guarantees is not material.

In addition, at June 30, 2020 , the Company had accrued approximately $ 21.5 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

In addition, at September 30, 2020, the Company had accrued approximately $ 23.7 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under the guarantees is approximately $ 66.8 million.

Notes to Condensed Consolidated Financial Statements - Continued

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of June 30, 2020 and December 31, 2019 were as follows (in millions):

June 30, 2020

December 31, 2019

Operating Leases (1)

Finance Leases

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2020 and December 31, 2019 were as follows (in millions):

September 30, 2020 December 31, 2019

Operating Leases (1)

Finance Leases Operating Leases (1)

Finance Leases

2020 $ 12.9 $ 1.7 $ 48.3 $ 4.8

2021 46.8 3.1 40.8 2.7

2022 37.2 1.3 31.5 1.2

2023 28.5 1.0 24.1 0.9

2024 19.5 0.7 16.7 0.6

Thereafter 61.8 9.1 61.6 8.7

Total lease payments 206.7 16.9 223.0 18.9

imputed interest (2)

( 23.4 ) ( 2.1 ) ( 32.1 ) ( 2.4 )

Present value of leased liabilities $ 183.3 $ 14.8 $ 190.9 $ 16.5

1 unchanged sentence

(2) Calculated for each lease using either the implicit interest rate or the incremental borrowing rate when the implicit interest rate is not readily available.

At June 30, 2020 , the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 2,677.7 million .

The outstanding contracts as of June 30, 2020 range in maturity through December 2020 (see Note 11 ).

At September 30, 2020, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 2,991.8 million.

The outstanding contracts as of September 30, 2020 range in maturity through December 2020 (see Note 11).

The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures.

3 unchanged sentences

In August 2008, as part of routine audits, the Brazilian taxing authorities disallowed deductions relating to the amortization of certain goodwill recognized in connection with a reorganization of the Company’s Brazilian operations and the related transfer of certain assets to the Company’s Brazilian subsidiaries.

The amount of the tax disallowance through June 30, 2020 , not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 24.0 million ).

The amount of the tax disallowance through September 30, 2020, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 23.3 million).

The amount ultimately in dispute will be significantly greater because of interest and penalties.

8 unchanged sentences

(1) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to extended warranty and maintenance contracts and where the performance obligation is satisfied over time, (2) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to certain grain storage and protein production systems and where the performance obligation is satisfied over time and (3) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to technology services and where the performance obligation is satisfied over time.

Significant changes in the balance of contract liabilities for the three and six months ended June 30, 2020 and 2019 were as follows (in millions):

Three Months Ended June 30,

Significant changes in the balance of contract liabilities for the three and nine months ended September 30, 2020 and 2019 were as follows (in millions):

Three Months Ended September 30,

Balance at beginning of period $ 118.7 $ 88.0

3 unchanged sentences

Foreign currency translation 4.7 ( 2.2 )

Balance at June 30

Six Months Ended June 30,

Balance at September 30 $ 144.9 $ 90.3

Nine Months Ended September 30,

Balance at beginning of period $ 104.0 $ 76.8

3 unchanged sentences

Foreign currency translation 0.9 ( 2.1 )

Balance at June 30

Balance at September 30 $ 144.9 $ 90.3

The contract liabilities are classified as either “Accrued expenses” or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets.

Remaining Performance Obligations

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2020 are $ 24.8 million for the remainder of 2020 , $ 35.9 million in 2021 , $ 24.1 million in 2022 , $ 12.3 million in 2023 and $ 5.8 million thereafter, and relate primarily to extended warranty contracts.

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2020 are $ 13.1 million for the remainder of 2020, $ 45.8 million in 2021, $ 34.5 million in 2022, $ 18.3 million in 2023 and $ 10.2 million thereafter, and relate primarily to extended warranty contracts.

The Company applied the practical expedient in ASU 2014-09 and has not disclosed information about remaining performance obligations that have original expected durations of 12 months or less.

1 unchanged sentence

Disaggregated Revenue

Net sales for the three months ended June 30, 2020 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America

South America (1)

Europe/Middle East

Asia/Pacific/Africa

Consolidated (1)

Net sales for the three months ended September 30, 2020 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Primary geographical markets:

United States $ 468.3 $ — $ — $ — $ 468.3

Canada 93.8 — — — 93.8

South America — 271.6 — — 271.6

Germany — — 387.0 — 387.0

France — — 261.8 — 261.8

United Kingdom and Ireland — — 131.3 — 131.3

Finland and Scandinavia — — 189.3 — 189.3

Other Europe — — 397.5 — 397.5

Middle East and Algeria — — 39.0 — 39.0

Africa — — — 15.8 15.8

Asia — — — 109.9 109.9

Australia and New Zealand — — — 109.8 109.8

Mexico, Central America and Caribbean 20.1 2.3 — — 22.4

$ 582.2 $ 273.9 $ 1,405.9 $ 235.5 $ 2,497.5

Major products:

Tractors $ 198.4 $ 154.3 $ 1,033.5 $ 82.5 $ 1,468.7

Replacement parts 94.8 22.8 249.6 23.6 390.8

1 unchanged sentence

Combines, application equipment and other machinery 137.0 80.1 93.5 62.1 372.7

(1) Rounding may impact the summation of amounts.

$ 582.2 $ 273.9 $ 1,405.9 $ 235.5 $ 2,497.5

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the three months ended June 30, 2019 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the three months ended September 30, 2019 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America (1)

Europe/Middle East

Asia/Pacific/Africa

Consolidated (1)

South America Europe/Middle East Asia/Pacific/Africa (1)

Primary geographical markets:

United States $ 431.7 $ — $ — $ — $ 431.7

Canada 79.8 — — — 79.8

South America — 236.3 — — 236.3

Germany — — 255.4 — 255.4

France — — 237.8 — 237.8

United Kingdom and Ireland — — 115.3 — 115.3

Finland and Scandinavia — — 176.5 — 176.5

Other Europe — — 343.8 — 343.8

Middle East and Algeria — — 16.9 — 16.9

Africa — — — 26.7 26.7

Asia — — — 79.4 79.4

Australia and New Zealand — — — 82.1 82.1

Mexico, Central America and Caribbean 24.6 3.1 — — 27.7

$ 536.2 $ 239.4 $ 1,145.7 $ 188.1 $ 2,109.4

Major products:

Tractors $ 166.1 $ 135.2 $ 772.0 $ 70.2 $ 1,143.5

Replacement parts 87.2 22.1 233.6 19.7 362.6

1 unchanged sentence

Combines, application equipment and other machinery 117.2 63.1 100.8 39.6 320.7

$ 536.2 $ 239.4 $ 1,145.7 $ 188.1 $ 2,109.4

(1) Rounding may impact the summation of amounts.

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the six months ended June 30, 2020 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America

South America

Europe/Middle East (1)

Net sales for the nine months ended September 30, 2020 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America Europe/Middle East (1)

Asia/Pacific/Africa (1)

1 unchanged sentence

United States $ 1,387.8 $ — $ — $ — $ 1,387.8

Canada 238.2 — — — 238.2

South America — 600.8 — — 600.8

Germany — — 981.4 — 981.4

France — — 697.5 — 697.5

United Kingdom and Ireland — — 354.9 — 354.9

Finland and Scandinavia — — 466.2 — 466.2

Other Europe — — 1,047.1 — 1,047.1

Middle East and Algeria — — 97.1 — 97.1

Africa — — — 31.8 31.8

Asia — — — 243.8 243.8

Australia and New Zealand — — — 216.6 216.6

Mexico, Central America and Caribbean 63.9 5.5 — — 69.4

$ 1,689.9 $ 606.3 $ 3,644.2 $ 492.2 $ 6,432.6

Major products:

Tractors $ 515.4 $ 331.2 $ 2,486.0 $ 189.9 $ 3,522.5

Replacement parts 272.8 59.6 707.6 60.2 1,100.2

Grain storage and protein production systems 391.6 55.5 90.1 144.7 681.9

Other machinery

Combines, application equipment and other machinery 510.1 160.0 360.4 97.5 1,128.0

$ 1,689.9 $ 606.3 $ 3,644.2 $ 492.2 $ 6,432.6

(1) Rounding may impact the summation of amounts.

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the six months ended June 30, 2019 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America

Europe/Middle East

Asia/Pacific/Africa (1)

Net sales for the nine months ended September 30, 2019 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America Europe/Middle East Asia/Pacific/Africa (1)

Consolidated (1)

1 unchanged sentence

United States $ 1,344.5 $ — $ — $ — $ 1,344.5

Canada 232.9 — — — 232.9

South America — 571.3 — — 571.3

Germany — — 916.3 — 916.3

France — — 743.4 — 743.4

United Kingdom and Ireland — — 405.5 — 405.5

Finland and Scandinavia — — 545.1 — 545.1

Other Europe — — 1,151.3 — 1,151.3

Middle East and Algeria — — 51.9 — 51.9

Africa — — — 76.7 76.7

Asia — — — 216.2 216.2

Australia and New Zealand — — — 188.9 188.9

Mexico, Central America and Caribbean 73.9 10.0 — — 83.9

$ 1,651.3 $ 581.3 $ 3,813.5 $ 481.7 $ 6,527.8

Major products:

Tractors $ 493.7 $ 325.8 $ 2,595.8 $ 197.2 $ 3,612.5

Replacement parts 247.4 65.4 681.9 53.6 1,048.3

Grain storage and protein production systems 435.8 56.4 143.4 157.0 792.6

Other machinery

Combines, application equipment and other machinery 474.4 133.7 392.4 73.9 1,074.4

$ 1,651.3 $ 581.3 $ 3,813.5 $ 481.7 $ 6,527.8

(1) Rounding may impact the summation of amounts.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements