What changed in this filing

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Item 1. Financial Statements

2021-05-07 compared with 2020-11-09 · 198 added, 445 removed, 575 unchanged (53% of the section changed)

3 unchanged sentences

(unaudited and in millions, except share amounts)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Current Assets:

11 unchanged sentences

Goodwill 1,276.8 1,306.5

$ 7,940.3 $ 7,759.7

Total assets $ 8,312.3 $ 8,504.2

LIABILITIES AND STOCKHOLDERS’ EQUITY

18 unchanged sentences

Common stock;

$ 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

$ 0.01 par value, 150,000,000 shares authorized, 75,330,392 and 74,962,231 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital 5.7 30.9

5 unchanged sentences

Total liabilities and stockholders’ equity $ 8,312.3 $ 8,504.2

$ 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 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

Operating expenses:

Engineering expenses

Amortization of intangibles

Bad debt expense 5.8 0.8

Restructuring expenses

Income from operations 224.0 105.9

Interest expense, net

Other expense, net

Income before income taxes and equity in net earnings of affiliates 205.1 78.7

Income tax provision

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

Equity in net earnings of affiliates

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

Weighted average number of common and common equivalent shares outstanding:

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in millions, except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Net sales $ 2,378.7 $ 1,928.3

5 unchanged sentences

Amortization of intangibles

Goodwill impairment charge

Bad debt expense 9.0 2.1

Restructuring expenses

Bad debt (credit) expense ( 0.4 ) 1.8

Income from operations 195.2 100.4

6 unchanged sentences

Net income 151.4 66.3

Net loss attributable to noncontrolling interests 7.3 1.1

Net income attributable to noncontrolling interests ( 0.6 ) ( 1.6 )

Net income attributable to AGCO Corporation and subsidiaries $ 150.8 $ 64.7

8 unchanged sentences

(unaudited and in millions)

Three Months Ended September 30,

Three Months Ended March 31,

Net income $ 151.4 $ 66.3

5 unchanged sentences

Comprehensive income (loss) 143.9 ( 135.6 )

Comprehensive loss attributable to noncontrolling interests 1.4 2.0

Comprehensive (income) loss attributable to noncontrolling interests ( 0.2 ) 4.1

Comprehensive income (loss) attributable to AGCO Corporation and subsidiaries $ 143.7 $ ( 131.5 )

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 )

Defined benefit pension plans, net of tax 10.3 8.8

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

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 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)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Stock compensation expense 6.8 2.6

Goodwill impairment charge 20.0 —

Equity in net earnings of affiliates, net of cash received ( 14.7 ) ( 11.2 )

9 unchanged sentences

Total adjustments ( 466.7 ) ( 501.6 )

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

Net cash used in operating activities ( 315.3 ) ( 435.3 )

Cash flows from investing activities:

3 unchanged sentences

Purchase of businesses, net of cash acquired ( 0.8 ) —

Other ( 2.5 ) —

Net cash used in investing activities ( 66.8 ) ( 62.7 )

5 unchanged sentences

Payment of minimum tax withholdings on stock compensation ( 26.5 ) ( 16.0 )

Payment of debt issuance costs ( 1.4 ) ( 0.5 )

Investment by noncontrolling interests 0.2 1.2

Net cash provided by financing activities 59.5 235.1

Net cash (used in) provided by financing activities ( 260.0 ) 476.7

Effects of exchange rate changes on cash, cash equivalents and restricted cash ( 23.3 ) ( 24.8 )

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

Decrease in cash, cash equivalents and restricted cash ( 665.4 ) ( 46.1 )

Cash, cash equivalents and restricted cash, beginning of period 1,119.1 432.8

9 unchanged sentences

Results for interim periods are not necessarily indicative of the results for the year.

The Company cannot predict the ongoing impact of the coronavirus (“COVID-19”) pandemic due to increased volatility in global economic and political environments, uncertain market demand for its products, supply chain disruptions, possible workforce unavailability, exchange rate and commodity price volatility and availability of financing, and their impact to the Company’s net sales, production volumes, costs and overall financial condition and available funding.

The Company may be required to record significant impairment charges in the future with respect to noncurrent assets such as goodwill and other intangible assets and equity method investments, whose fair values may be negatively affected by the COVID-19 pandemic.

The Company also may be required to write-down obsolete inventory due to decreased customer demand and sales orders.

The Company is closely monitoring the collection of accounts receivable, as well as the operating results of its finance joint ventures around the world.

If economic conditions around the world continue to deteriorate, the Company and its finance joint ventures may not collect accounts receivable at expected levels, and the operating results of its finance joint ventures may be negatively impacted, thus negatively impacting the Company’s results of operations and financial condition.

The Company also is closely assessing its compliance with debt covenants, the recognition of any future insurance recoveries, cash flow hedging forecasts as compared to actual transactions, the fair value of pension assets, accounting for incentive and stock compensation accruals, revenue recognition and discount reserve setting as well as the realization of deferred tax assets in light of the COVID-19 pandemic.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company cannot predict the ongoing impact of the COVID-19 pandemic on the increased volatility in global economic and political environments, uncertain market demand for its products, supply chain disruptions, possible workforce unavailability, exchange rate and commodity price volatility and availability of financing, and their impact to the Company’s net sales, production volumes, costs and overall financial condition and available funding.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary accounting relief for contract modifications to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to a new alternative reference rate.

ASU 2020-04 can be applied as of the beginning of the interim period that includes March 12, 2020 or any date thereafter.

ASU 2020-04 generally will no longer be available to apply after December 31, 2022.

Interest on U.S.

dollar borrowings under the Company's credit facility and its April 2020 amendment 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 its April 2020 amendment provide for an expedited amendment process once a replacement for LIBOR is established (see Note 5).

The Company adopted this standard as of March 31, 2020.

The adoption did not have a material impact to the Company’s results of operations, financial condition and cash flows.

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires measurement and recognition of expected versus incurred credit losses for financial assets held.

ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods as the adoption of the standard relates to the Company.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”), which provides, among other things, targeted improvements to certain aspects of accounting for credit losses addressed by ASU 2016-13.

In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326), Financial Instruments - Credit Losses,” which clarifies the treatment of expected recoveries for amounts previously written-off on purchased receivables, provides transition relief for troubled debt restructurings and allows for certain disclosure simplifications of accrued interest.

The effective dates for both ASU 2019-04 and ASU 2019-11 are the same as the effective dates for ASU 2016-13.

The Company adopted this standard, and its subsequent modifications, as of

Notes to Condensed Consolidated Financial Statements - Continued

January 1, 2020.

The adoption did not have a material impact to the Company’s results of operations, financial condition and cash flows.

During the three months ended March 31, 2021, the Company adopted the following pronouncements, which did not have a material impact to the Company’s results of operations, financial condition and cash flows.

• ASU 2019-12 – “Simplifying the Accounting for Income Taxes” was adopted as of January 1, 2021.

• ASU 2021-01 – “Reference Rate Reform:

Scope” was adopted as of January 1, 2021.

New Accounting Pronouncements to be Adopted

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies various aspects related to accounting for income taxes by removing certain exceptions for investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in accounting for income taxes.

ASU 2019-12 is effective for annual periods beginning after December 15, 2020, and interim periods within those annual periods using a prospective approach.

Early adoption is permitted.

Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis.

The standard will not have a material impact on the Company's results of operations, financial condition and cash flows.

As discussed above, in June 2016, the FASB issued ASU 2016-13, which requires measurement and recognition of expected versus incurred credit losses for financial assets held.

In June 2016, the FASB issued ASU 2016-13, which requires measurement and recognition of expected versus incurred credit losses for financial assets.

In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

2 unchanged sentences

The standard, and its subsequent modification, will likely impact the results of operations and financial condition of the Company’s finance joint ventures.

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

Therefore, adoption of the standard by the Company’s finance joint ventures likely will 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.

RESTRUCTURING EXPENSES

From 2014 through 2020, the Company announced and initiated several actions to rationalize employee headcount at various manufacturing facilities and various administrative offices located in Europe, South America, Africa, China and the United States in order to reduce costs in response to softening global market demand and lower production volumes.

The aggregate headcount reduction was approximately 4,160 employees between 2014 and 2019.

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 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

In recent years, the Company has announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the U.S., Europe, South America, Africa and China in order to reduce costs in response to softening global demand.

Restructuring expenses activity during the three months ended March 31, 2021 is summarized as follows (in millions):

Employee Severance Facility Closure Costs Other Related Closure Costs Total

Balance as of December 31, 2020 $ 11.1 $ 3.9 $ 1.8 $ 16.8

First quarter 2021 provision 1.3 — — 1.3

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

First quarter 2021 cash activity ( 2.3 ) ( 3.9 ) — ( 6.2 )

1 unchanged sentence

Balance as of March 31, 2021 $ 10.0 $ — $ 1.6 $ 11.6

Second quarter 2020 provision 1.6 2.2 — 3.8

Non-cash expense ( 1.6 ) — — ( 1.6 )

Cash expense — 2.2 — 2.2

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

Foreign currency translation — ( 0.1 ) — ( 0.1 )

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

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

Notes to Condensed Consolidated Financial Statements - Continued

STOCK COMPENSATION PLANS

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

The Company recorded stock compensation expense as follows for the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31,

Cost of goods sold $ 0.3 $ 0.1

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 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.

As of March 31, 2021, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,814,295 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 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 weighted average grant-date fair value of performance awards granted under the Plan during the three months ended March 31, 2021 and 2020 was $ 123.26 and $ 70.84 , respectively.

During the three months ended March 31, 2021, the Company granted 269,508 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 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:

Performance award transactions during the three months ended March 31, 2021 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 1 582,952

2 unchanged sentences

Shares earned ( 142 )

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 .

Shares awarded but not earned at March 31 850,658

As of March 31, 2021, 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 $ 41.6 million, and the weighted average period over which it is expected to be recognized is approximately two and one-half 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 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.

During the three months ended March 31, 2021, the Company granted 89,775 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.

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 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:

The weighted average grant-date fair value of the RSUs granted under the Plan during the three months ended March 31, 2021 and 2020 was $ 113.63 and $ 70.83 , respectively.

RSU transactions during the three months ended March 31, 2021 were as follows:

Notes to Condensed Consolidated Financial Statements - Continued

RSUs awarded but not vested at January 1 143,287

2 unchanged sentences

RSUs vested ( 63,280 )

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

RSUs awarded but not vested at March 31 169,433

As of March 31, 2021, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 13.7 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

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 nine months ended September 30, 2020 were as follows:

SSAR transactions during the three months ended March 31, 2021 were as follows:

SSARs outstanding at January 1 403,150

2 unchanged sentences

SSARs canceled or forfeited ( 754 )

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.

SSARs outstanding at March 31 298,620

The Company did not grant any SSARs during the three months ended March 31, 2021, and does not currently anticipate granting any SSARs in the future.

As of March 31, 2021, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 1.7 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 2021 grant was made on April 22, 2021 and equated to 9,117 shares of common stock, of which 7,899 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 nine months ended September 30, 2020 associated with these grants.

The Company recorded stock compensation expense of approximately $ 1.4 million during the three months ended June 30, 2021 associated with these grants.

GOODWILL AND OTHER INTANGIBLE ASSETS

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

Changes in the carrying amount of goodwill during the three months ended March 31, 2021 are summarized as follows (in millions):

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

Balance as of December 31, 2020 $ 593.4 $ 87.5 $ 501.3 $ 124.3 $ 1,306.5

Acquisition 7.2 — — — 7.2

Impairment charge ( 20.0 ) — — — ( 20.0 )

Foreign currency translation 0.1 ( 8.1 ) ( 18.4 ) ( 3.3 ) ( 29.7 )

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.

Balance as of March 31, 2021 $ 593.5 $ 79.4 $ 482.9 $ 121.0 $ 1,276.8

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

The Company conducts its annual impairment analyses as of October 1 each fiscal year.

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, 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 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."

The COVID-19 pandemic continues to adversely impact 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, 2021 and concluded there were no indicators of impairment during the three months ended March 31, 2021.

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):

Changes in the carrying amount of acquired intangible assets during the three months ended March 31, 2021 are summarized as follows (in millions):

Gross carrying amounts:

2 unchanged sentences

Foreign currency translation ( 3.4 ) ( 7.8 ) ( 3.6 ) — ( 14.8 )

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

Balance as of March 31, 2021 $ 202.6 $ 577.6 $ 154.4 $ 9.1 $ 943.7

Accumulated amortization:

3 unchanged sentences

Foreign currency translation ( 1.2 ) ( 5.9 ) ( 2.7 ) — ( 9.8 )

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

Balance as of March 31, 2021 $ 96.7 $ 393.7 $ 106.2 $ 3.4 $ 600.0

Indefinite-lived intangible assets:

2 unchanged sentences

Foreign currency translation ( 1.6 )

Balance as of September 30, 2020 $ 87.7

Balance as of March 31, 2021 $ 87.8

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 September 30, 2020 and December 31, 2019 (in millions):

September 30, 2020 December 31, 2019

Notes to Condensed Consolidated Financial Statements - Continued

Long-term debt consisted of the following at March 31, 2021 and December 31, 2020 (in millions):

March 31, 2021 December 31, 2020

Senior term loan due 2022 $ 176.1 $ 184.0

5 unchanged sentences

1,248.5 1,582.6

Senior term loans due 2021 ( 84.2 ) —

Senior term loans due 2021, net of debt issuance costs ( 309.7 ) ( 323.6 )

Current portion of other long-term debt ( 2.2 ) ( 2.3 )

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 $ 175.4 million as of September 30, 2020).

(“Rabobank”) in the amount of € 150.0 million (or approximately $ 176.1 million as of March 31, 2021).

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

In October 2018, the Company entered into a multi-currency revolving credit facility of $ 800.0 million.

The maturity date of the credit facility is October 17, 2023.

The credit facility expires on October 17, 2023.

Interest accrues on amounts outstanding under the credit facility, at the Company’s option, at either (1) LIBOR plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating, or (2) the base rate, which is equal to the higher of (i) the administrative agent’s base lending rate for the applicable currency, (ii) the federal funds rate plus 0.5 %, and (iii) one-month LIBOR for loans denominated in U.S.

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

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).

As of March 31, 2021 and December 31, 2020, 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 credit facility to include incremental term loans (“2020 term loans”) that allow the Company to borrow aggregate principal amounts of € 235.0 million and $ 267.5 million (or an aggregate of approximately $ 543.3 million as of March 31, 2021).

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 $ 271.2 million as of September 30, 2020) of 2020 term loans.

On April 15, 2020, the Company borrowed € 117.5 million and $ 133.8 million 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 2020.

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

On February 16, 2021, the Company repaid the 2020 term loans of € 117.5 million and $ 133.8 million (or an aggregate of approximately $ 276.0 million as of February 16, 2021).

As of March 31, 2021, the Company had the ability to borrow € 117.5 million and $ 133.7 million (or an aggregate of approximately $ 271.6 million) of 2020 term loans.

Notes to Condensed Consolidated Financial Statements - Continued

Interest on U.S.

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

dollar borrowings under the Company’s 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 either a base rate or the secured overnight financing rate depending on cost.

The credit facility and 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 $ 292.4 million as of September 30, 2020) of funding was received on January 25, 2019 with a maturity date of January 24, 2025.

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 293.4 million as of March 31, 2021) from the European Investment Bank.

The loan matures on January 24, 2025.

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

3 unchanged sentences

Of the 2016 term loans, an aggregate amount of € 56.0 million (or approximately $ 61.1 million) was repaid upon maturity of two term loan agreements in October 2019.

Notes to Condensed Consolidated Financial Statements - Continued

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.

In aggregate, the Company has indebtedness of € 657.0 million (or approximately $ 771.1 million as of March 31, 2021) through this group of twelve remaining related term loan agreements.

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

The Company is permitted to prepay the term loans before their maturity dates.

For the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.70 % to 2.26 % and a maturity date between August 2021 and August 2028.

For the term loans with a floating interest rate, interest is payable in arrears on a semi-annual basis, with interest rates based on the EURIBOR plus a margin ranging from 0.70 % to 1.25 % and a maturity date between August 2021 and August 2025.

For the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.70 % to 2.26 % and maturity dates between August 2021 and August 2028.

For the term loans with a floating interest rate, interest is payable in arrears on a semi-annual basis, with interest rates based on the EURIBOR plus a margin ranging from 0.70 % to 1.25 % and maturity dates between August 2021 and August 2025.

Short-Term Borrowings

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.

As of March 31, 2021 and December 31, 2020, the Company had short-term borrowings due within one year of approximately $ 51.8 million and $ 33.8 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 September 30, 2020 and December 31, 2019, outstanding letters of credit totaled approximately $ 14.4 million and $ 13.9 million, respectively.

At March 31, 2021 and December 31, 2020, outstanding letters of credit totaled approximately $ 14.6 million and $ 14.4 million, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

RECOVERABLE INDIRECT TAXES

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

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

The Company had recorded approximately $ 88.1 million and $ 91.2 million, respectively, of VAT tax credits, net of reserves, as of March 31, 2021 and December 31, 2020.

Inventories at March 31, 2021 and December 31, 2020 were as follows (in millions):

March 31, 2021 December 31, 2020

Finished goods $ 768.9 $ 641.3

3 unchanged sentences

Inventories, net $ 2,360.3 $ 1,974.4

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

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

The warranty reserve activity for the three months ended March 31, 2021 and 2020 consisted of the following (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 521.8 $ 392.8

Acquisition 0.2 — 0.2 —

Accruals for warranties issued during the period 93.3 56.3

1 unchanged sentence

Foreign currency translation ( 17.8 ) ( 15.1 )

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

Balance at March 31 $ 542.0 $ 384.6

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 $ 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.

Approximately $ 450.0 million and $ 431.6 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively.

Approximately $ 92.0 million and $ 90.2 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively.

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

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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 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

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 months ended March 31, 2021 and 2020 is as follows (in millions, except per share data):

Three Months Ended March 31,

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 $ 1.99 $ 0.85

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 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.

There were no SSARs outstanding for the three months ended March 31, 2021 that had an antidilutive impact.

SSARs to purchase approximately 0.7 million shares of the Company's common stock for the three months ended March 31, 2020 were outstanding but not included in the calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

At March 31, 2021 and December 31, 2020, the Company had approximately $ 237.4 million and $ 227.9 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 March 31, 2021 and December 31, 2020 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 68.5 million and $ 64.1 million, respectively.

At March 31, 2021 and December 31, 2020, the Company had approximately $ 55.2 million and $ 57.1 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 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.

At March 31, 2021 and December 31, 2020, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 39.6 million and $ 39.4 million, respectively.

Generally, tax years 2015 through 2020 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 September 30, 2020, a number of income tax examinations in foreign jurisdictions are ongoing.

As of March 31, 2021, 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.

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.

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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 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.

Other governments around the world have also enacted similar measures and may enact further measures in the future.

To date, the Act and other similar worldwide measures have not had a material impact to the Company’s results of operations or financial condition.

Notes to Condensed Consolidated Financial Statements - Continued

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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During 2021 and 2020, 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 $ 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 nine months ended September 30, 2020 and 2019 (in millions):

Recognized in Net Income

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

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 232.1 million and $ 395.8 million as of March 31, 2021 and December 31, 2020, respectively.

Steel Commodity Contracts

During 2021 and 2020, the Company designated certain steel commodity contracts as cash flow hedges of expected future purchases of steel.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 20.9 million and $ 14.7 million as of March 31, 2021 and December 31, 2020, respectively.

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 months ended March 31, 2021 and 2020 (in millions):

Recognized in Net Income

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

Three Months Ended March 31, Gain (Loss) Recognized in Accumulated

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

2 unchanged sentences

$ ( 6.8 ) Cost of goods sold $ ( 3.7 ) $ 1,808.2

Commodity contracts (2)

7.8 Cost of goods sold — $ 1,808.2

Total $ 1.0 $ ( 3.7 )

Foreign currency contracts $ 9.5 Cost of goods sold $ 0.1 $ 1,477.8

(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):

(1) The outstanding contracts as of March 31, 2021 range in maturity through December 2021.

(2) The outstanding contracts as of March 31, 2021 range in maturity through October 2021.

Notes to Condensed Consolidated Financial Statements - Continued

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended March 31, 2021 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

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Net changes in fair value of derivatives 1.3 0.3 1.0

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

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

Net losses reclassified from accumulated other comprehensive loss into income 3.4 ( 0.3 ) 3.7

Accumulated derivative net gains as of March 31, 2021 $ 1.7 $ ( 0.5 ) $ 2.2

Net Investment Hedges

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To the extent foreign currency denominated debt is de-designated from a net investment hedge relationship, changes in the value of the foreign currency denominated debt are recorded in earnings through the maturity date.

Notes to Condensed Consolidated Financial Statements - Continued

In January 2018, the Company entered into a cross currency swap contract as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

The cross currency swap expired on January 19, 2021.

At maturity of the cross currency swap contract, the Company delivered the notional amount of approximately € 245.7 million (or approximately $ 297.1 million as of January 19, 2021) and received $ 300.0 million from the counterparties, resulting in a gain of approximately $ 2.9 million that was recognized in accumulated other comprehensive loss.

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

On January 29, 2021, the Company entered into a new cross currency swap contract as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

The cross currency swap has an expiration date of January 29, 2028.

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.

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 291.0 million as of March 31, 2021) 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 the maturity of the cross currency swap.

During the three months ended March 31, 2020, the Company designated € 110.0 million of its multi-currency revolving credit facility with a maturity date of October 17, 2023 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

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 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.

The following table summarizes the notional values of the instrument designated as a net investment hedge (in millions):

Notional Amount as of

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

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 nine months ended September 30, 2020 and 2019 (in millions):

Notes to Condensed Consolidated Financial Statements - Continued

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 months ended March 31, 2021 and 2020 (in millions):

Gain (Loss) Recognized in Accumulated

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

Other Comprehensive Loss for the Three Months Ended

March 31, 2021 March 31, 2020

Cross currency swap contract $ ( 4.1 ) $ 7.3

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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 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

As of March 31, 2021 and December 31, 2020, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,091.5 million and $ 3,326.6 million, respectively.

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):

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

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

Classification of Gain (Loss)

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

March 31, 2021 March 31, 2020

Foreign currency contracts Other expense, net $ 34.4 $ 32.1

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

The table below sets forth the fair value of derivative instruments as of March 31, 2021 (in millions):

Asset Derivatives as of

September 30, 2020 Liability Derivatives as of

September 30, 2020

March 31, 2021 Liability Derivatives as of

March 31, 2021

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

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Foreign currency contracts Other current assets $ 1.2 Other current liabilities $ 7.8

Commodity contracts Other current assets $ 8.3 Other current liabilities $ —

Cross currency swap contract Other noncurrent assets — Other noncurrent liabilities 2.6

2 unchanged sentences

Total derivative instruments $ 32.7 $ 16.2

Notes to Condensed Consolidated Financial Statements - Continued

The table below sets forth the fair value of derivative instruments as of December 31, 2020 (in millions):

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Foreign currency contracts Other current assets $ 1.0 Other current liabilities $ 4.5

Commodity contracts Other current assets 0.5 Other current assets —

Cross currency swap contract Other noncurrent assets 1.5 Other noncurrent liabilities —

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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 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

Comprehensive income:

Net income (loss) — — 157.3 — 0.8 158.1

Other comprehensive loss, net of reclassification adjustments:

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

— — — — 0.2 0.2

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

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three months ended March 31, 2021 and 2020 (in millions):

Stock Additional

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SSARs exercised — ( 2.5 ) — — — ( 2.5 )

Comprehensive loss:

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, 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

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 )

Comprehensive income:

Net income (loss)

— — 7.6 — ( 1.3 ) 6.3

Net income — — 150.8 — 0.6 151.4

Other comprehensive loss, net of reclassification adjustments:

7 unchanged sentences

— — ( 12.0 ) — — ( 12.0 )

Purchases and retirement of common stock

— ( 11.3 ) ( 18.7 ) — — ( 30.0 )

Investment by noncontrolling interests

— — — — 0.2 0.2

Balance, September 30, 2019

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

Balance, March 31, 2021 $ 0.8 $ 5.7 $ 4,897.9 $ ( 1,817.9 ) $ 38.2 $ 3,124.7

Stock Additional

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

Comprehensive income:

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

Comprehensive loss:

Net income — — 64.7 — 1.6 66.3

Other comprehensive loss, net of reclassification adjustments:

9 unchanged sentences

— ( 3.4 ) ( 51.6 ) — — ( 55.0 )

Investment by noncontrolling interests — — — — 1.2 1.2

Balance, September 30, 2019

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

Changes in noncontrolling interests — — — — ( 0.6 ) ( 0.6 )

Balance, March 31, 2020 $ 0.8 $ — $ 4,432.7 $ ( 1,791.4 ) $ 48.5 $ 2,690.6

Notes to Condensed Consolidated Financial Statements - Continued

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:

Total comprehensive income (loss) attributable to noncontrolling interests for the three months ended March 31, 2021 and 2020 was as follows (in millions):

Three Months Ended March 31,

Net income $ 0.6 $ 1.6

Other comprehensive loss:

Foreign currency translation adjustments ( 0.4 ) ( 5.7 )

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 nine months ended September 30, 2020 (in millions):

Total comprehensive income (loss) $ 0.2 $ ( 4.1 )

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 three months ended March 31, 2021 (in millions):

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

Accumulated other comprehensive loss, December 31, 2020 $ ( 313.3 ) $ ( 2.5 ) $ ( 1,495.0 ) $ ( 1,810.8 )

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

Other comprehensive income (loss) before reclassifications 31.2 1.0 ( 46.9 ) ( 14.7 )

Net losses (gains) reclassified from accumulated other comprehensive loss 10.3 ( 4.2 ) — 6.1

Net losses reclassified from accumulated other comprehensive loss 3.9 3.7 — 7.6

Other comprehensive income (loss), net of reclassification adjustments 35.1 4.7 ( 46.9 ) ( 7.1 )

Accumulated other comprehensive loss, September 30, 2020

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

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 September 30, 2020 and 2019 (in millions):

Accumulated other comprehensive loss, March 31, 2021 $ ( 278.2 ) $ 2.2 $ ( 1,541.9 ) $ ( 1,817.9 )

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 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

Details about Accumulated Other Comprehensive Loss Components Three Months Ended March 31, 2021 (1)

Three Months Ended March 31, 2020 (1)

Net losses (gains) on foreign currency contracts $ 3.4 $ ( 0.1 ) Cost of goods sold

Reclassification before tax 3.4 ( 0.1 )

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Net losses reclassified from accumulated other comprehensive loss $ 7.6 $ 3.4

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

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020, respectively.

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

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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 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 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 )

0.2 ( 0.1 ) Income tax provision

Reclassification net of tax $ ( 4.2 ) $ ( 0.6 )

Defined benefit pension plans:

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

( 1.6 ) ( 1.5 ) Income tax provision

Reclassification net of tax $ 10.3 $ 8.8

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 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.

See Note 14 for additional information on the Company’s defined benefit pension plans.

Share Repurchase Program

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.

The Company received approximately 970,141 shares during the three months ended March 31, 2020 related to the ASR agreements.

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.

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 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

During the three months ended March 31, 2021, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of March 31, 2021, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 245.0 million, which has no expiration date.

ACCOUNTS RECEIVABLE SALES AGREEMENTS

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 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.

As of March 31, 2021 and December 31, 2020, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 1.3 billion and $ 1.5 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.

2 unchanged sentences

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

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 $ 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 accounts for the receivable sales agreements 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 $ 4.6 million and $ 8.1 million, respectively, during the three months ended March 31, 2021 and 2020.

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 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.

As of March 31, 2021 and December 31, 2020, these finance joint ventures had approximately $ 80.7 million and $ 85.2 million, respectively, of outstanding accounts receivable associated with these arrangements.

The Company accounts for these arrangements as off-balance sheet transactions.

In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world.

The Company reviewed the sale of such receivables and determined that these arrangements should be accounted for as off-balance sheet transactions.

The Company accounts for the sale of such receivables as off-balance sheet transactions.

Notes to Condensed Consolidated Financial Statements - Continued

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 nine months ended September 30, 2020 and 2019 are set forth below (in millions):

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

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three months ended March 31, 2021 and 2020 are set forth below (in millions):

Three Months Ended March 31,

Pension benefits 2021 2020

4 unchanged sentences

Amortization of prior service cost 0.5 0.5

Curtailment (1)

Net periodic pension cost $ 2.8 $ 4.9

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

(1) During the three months ended March 31, 2021, the Company amended its Executive Nonqualified Pension Plan (“ENPP”) to freeze the plan as of December 31, 2024 to future salary benefit accruals, and to eliminate a life-time annuity feature for participants reaching age 65 subsequent to December 31, 2022.

This amendment resulted in a curtailment gain related to the ENPP's net prior service credit.

Three Months Ended March 31,

Postretirement benefits 2021 2020

2 unchanged sentences

Amortization of net actuarial losses — 0.1

Amortization of prior service cost — — 0.1 0.1

Net periodic postretirement benefit cost $ 0.3 $ 0.4

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 nine months ended September 30, 2020 (in millions):

The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s defined pension and postretirement benefit plans during the three months ended March 31, 2021 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

2 unchanged sentences

Amortization of prior service cost 0.5 — 0.5

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.

Plan amendment (1)

Accumulated other comprehensive loss as of March 31, 2021 $ ( 376.8 ) $ ( 98.6 ) $ ( 278.2 )

(1) During the three months ended March 31, 2021, the Company amended its ENPP.

The amendment resulted in a remeasurement gain of approximately $ 10.5 million as well as the impacts of approximately $ 12.2 million due to the elimination a life-time annuity feature and approximately $ 9.7 million due to the freezing of future salary benefits, partially offset by a curtailment gain of approximately $ 1.2 million.

During the three months ended March 31, 2021, the Company made approximately $ 11.4 million of contributions to its defined pension benefit plans.

The Company currently estimates its minimum contributions for 2021 to its defined pension benefit plans will aggregate approximately $ 36.5 million.

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.

During the three months ended March 31, 2021, the Company made approximately $ 0.3 million of contributions to its postretirement health care and life insurance benefit plans.

The Company currently estimates that it will make approximately $ 1.5 million of contributions to its postretirement health care and life insurance benefit plans during 2021.

11 unchanged sentences

The Company categorizes its pension plan assets into one of the three levels of the fair value hierarchy.

The Company enters into foreign currency and interest rate swap contracts.

The Company enters into foreign currency, commodity and interest rate swap contracts.

The fair values of the Company’s derivative instruments are determined using discounted cash flow valuation models.

3 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 September 30, 2020 and December 31, 2019 are summarized below (in millions):

As of September 30, 2020

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 are summarized below (in millions):

As of March 31, 2021

Level 1 Level 2 Level 3 Total

7 unchanged sentences

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

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.

Notes to Condensed Consolidated Financial Statements - Continued

16 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.

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

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

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

Segment results for the three months ended March 31, 2021 and 2020 and assets as of March 31, 2021 and December 31, 2020 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended March 31, North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Net sales $ 611.1 $ 240.5 $ 1,327.2 $ 199.9 $ 2,378.7

6 unchanged sentences

Capital expenditures 10.1 7.1 41.7 1.7 60.6

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

As of March 31, 2021 $ 1,281.3 $ 695.5 $ 2,513.5 $ 533.1 $ 5,023.4

As of December 31, 2020 1,051.9 687.6 2,238.7 536.2 4,514.4

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 September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Segment income from operations $ 256.4 $ 153.1

2 unchanged sentences

Stock compensation expense ( 6.5 ) ( 2.5 )

Goodwill impairment charge — — ( 20.0 ) —

Restructuring expenses ( 1.3 ) ( 0.8 )

Consolidated income from operations $ 195.2 $ 100.4

Notes to Condensed Consolidated Financial Statements - Continued

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Segment assets $ 5,023.4 $ 4,514.4

5 unchanged sentences

Consolidated total assets $ 8,312.3 $ 8,504.2

Notes to Condensed Consolidated Financial Statements - Continued

17 COMMITMENTS AND CONTINGENCIES

3 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 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.

At March 31, 2021, the Company has outstanding guarantees of indebtedness owed to related and third parties of approximately $ 18.8 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 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.

In addition, at March 31, 2021, the Company had accrued approximately $ 24.8 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 $ 104.2 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 September 30, 2020 and December 31, 2019 were as follows (in millions):

September 30, 2020 December 31, 2019

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of March 31, 2021 and December 31, 2020 were as follows (in millions):

March 31, 2021 December 31, 2020

Operating Leases (1)

13 unchanged sentences

(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 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).

At March 31, 2021, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,323.6 million.

The outstanding contracts as of March 31, 2021 range in maturity through December 2021.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 20.9 million that range in maturity through October 2021.

Notes to Condensed Consolidated Financial Statements - Continued

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.

The Company also sells certain accounts receivable under factoring arrangements to financial institutions around the world.

The Company reviewed the sale of such receivables and determined that these facilities should be accounted for as off-balance sheet transactions.

The Company accounts for the sale of such receivables as off-balance sheet transactions.

Contingencies

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 September 30, 2020, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 23.3 million).

The amount of the tax disallowance through March 31, 2021, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 22.9 million).

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

4 unchanged sentences

The Company believes that none of these claims or actions, either individually or in the aggregate, are material to its business or financial statements as a whole, including its results of operations and financial condition.

Notes to Condensed Consolidated Financial Statements - Continued

Contract Liabilities

1 unchanged sentence

(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 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

Advance consideration received 57.6 45.2

Revenue recognized during the period for extended warranty contracts, maintenance services and technology services ( 11.5 ) ( 8.7 )

Revenue recognized during the period related to grain storage and protein production systems ( 24.6 ) ( 32.0 )

Foreign currency translation 4.7 ( 2.2 )

Balance at September 30 $ 144.9 $ 90.3

Nine Months Ended September 30,

Significant changes in the balance of contract liabilities for the three months ended March 31, 2021 and 2020 were as follows (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 172.0 $ 104.0

3 unchanged sentences

Foreign currency translation ( 2.6 ) ( 4.4 )

Balance at September 30 $ 144.9 $ 90.3

Balance at March 31 $ 186.3 $ 111.6

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 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.

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2021 are $ 43.3 million for the remainder of 2021, $ 51.1 million in 2022, $ 33.0 million in 2023, $ 14.9 million in 2024 and $ 7.9 million thereafter, and relate primarily to extended warranty contracts.

Notes to Condensed Consolidated Financial Statements - Continued

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.

Disaggregated Revenue

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

Net sales for the three months ended March 31, 2021 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

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

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 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

Grain storage and protein production systems 165.6 19.0 39.3 58.7 282.6

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

Net sales for the three months ended March 31, 2020 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America Europe/Middle East (1)

22 unchanged sentences

(1) Rounding may impact the summation of amounts.

Notes to Condensed Consolidated Financial Statements - Continued

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)

Primary geographical markets:

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

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