What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-08 · 250 added, 476 removed, 591 unchanged (55% of the section changed)

3 unchanged sentences

(unaudited and in millions, except share amounts)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current Assets:

6 unchanged sentences

Right-of-use lease assets 163.9 154.1

Investment in affiliates 480.4 442.7

Investments in affiliates 423.2 413.5

Deferred tax assets 186.4 169.3

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Common stock;

$ 0.01 par value, 150,000,000 shares authorized, 74,834,173 and 74,962,231 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

$ 0.01 par value, 150,000,000 shares authorized, 74,542,772 and 74,441,312 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 2.9 3.9

9 unchanged sentences

(unaudited and in millions, except per share data)

Three Months Ended September 30,

Net sales $ 2,725.1 $ 2,497.5

Cost of goods sold 2,098.4 1,918.8

Gross profit 626.7 578.7

Selling, general and administrative expenses 266.1 251.3

Operating expenses:

Engineering expenses

Amortization of intangibles

Restructuring expenses

Bad debt expense 0.4 5.8

Income from operations 251.9 224.0

Interest expense, net

Other expense, net

Income before income taxes and equity in net earnings of affiliates 236.6 205.1

Income tax provision

Income before equity in net earnings of affiliates 166.5 147.9

Equity in net earnings of affiliates

Net income 182.4 158.1

Net income attributable to noncontrolling interests ( 1.1 ) ( 0.8 )

Net income attributable to AGCO Corporation and subsidiaries $ 181.3 $ 157.3

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

$ 2.41 $ 2.10

$ 2.40 $ 2.09

Cash dividends declared and paid per common share $ 0.20 $ 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 $ 2,685.7 $ 2,378.7

5 unchanged sentences

Amortization of intangibles

Goodwill impairment charge

Impairment charges 36.0 —

Restructuring expenses

Bad debt (credit) expense ( 0.3 ) 9.0

Bad debt expense (credit) 1.6 ( 0.4 )

Income from operations 204.0 195.2

6 unchanged sentences

Net income 137.0 151.4

Net (income) loss attributable to noncontrolling interests ( 3.3 ) 7.3

Net loss (income) attributable to noncontrolling interests 14.8 ( 0.6 )

Net income attributable to AGCO Corporation and subsidiaries $ 151.8 $ 150.8

6 unchanged sentences

AGCO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in millions)

Three Months Ended September 30,

Net income $ 182.4 $ 158.1

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments ( 65.4 ) ( 30.3 )

Defined benefit pension plans, net of tax 2.6 3.4

Deferred gains and losses on derivatives, net of tax ( 3.4 ) ( 1.1 )

Other comprehensive loss, net of reclassification adjustments ( 66.2 ) ( 28.0 )

Comprehensive income 116.2 130.1

Comprehensive (income) loss attributable to noncontrolling interests ( 1.1 ) 1.4

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 115.1 $ 131.5

Nine Months Ended September 30,

Three Months Ended March 31,

Net income $ 137.0 $ 151.4

5 unchanged sentences

Comprehensive income 273.7 143.9

Comprehensive (income) loss attributable to noncontrolling interests ( 3.7 ) 12.7

Comprehensive loss (income) attributable to noncontrolling interests 14.0 ( 0.2 )

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 287.7 $ 143.7

3 unchanged sentences

(unaudited and in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 137.0 $ 151.4

Adjustments to reconcile net income to net provided by operating activities:

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

Depreciation 54.7 54.8

1 unchanged sentence

Stock compensation expense 7.0 6.8

Goodwill impairment charge — 20.0

Impairment charges 36.0 —

Equity in net earnings of affiliates, net of cash received ( 11.1 ) ( 14.7 )

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Total adjustments ( 713.5 ) ( 466.7 )

Net cash provided by operating activities 41.5 224.1

Net cash used in operating activities ( 576.5 ) ( 315.3 )

Cash flows from investing activities:

2 unchanged sentences

Investments in unconsolidated affiliates ( 0.1 ) ( 0.1 )

(Purchase) sale of businesses, net, and net of cash acquired ( 16.8 ) ( 2.8 )

Purchase of businesses, net, and net of cash acquired ( 61.9 ) ( 0.8 )

Other — ( 2.5 )

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Repayments of indebtedness ( 459.1 ) ( 416.8 )

Purchases and retirement of common stock ( 75.0 ) ( 55.0 )

Payment of dividends to stockholders ( 14.9 ) ( 12.0 )

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

Payment of debt issuance costs — ( 1.4 )

Distributions to noncontrolling interest ( 11.6 ) —

Net cash (used in) provided by financing activities ( 377.6 ) 59.5

Net cash provided by (used in) financing activities 479.1 ( 260.0 )

Effects of exchange rate changes on cash, cash equivalents and restricted cash ( 8.0 ) ( 23.3 )

(Decrease) increase in cash, cash equivalents and restricted cash ( 582.1 ) 78.2

Decrease in cash, cash equivalents and restricted cash ( 233.4 ) ( 665.4 )

Cash, cash equivalents and restricted cash, beginning of period 889.1 1,119.1

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

The Company cannot predict the future impact of the COVID-19 pandemic on its business, including any related impacts on the global economic and political environments, market demand for its products, supply chain disruptions, possible workforce unavailability, exchange rate and commodity prices and availability of financing, and their impact to the Company’s net sales, production volumes, costs and overall financial conditions.

Recently Adopted Accounting Pronouncements

During the nine months ended September 30, 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.

The Company cannot predict the future impact of the COVID-19 pandemic on its business, including any related impacts on the global economic and political environments, market demand for its products, supply chain disruptions, possible workforce unavailability, exchange rates, commodity prices and availability of financing, and their impact to the Company’s net sales, production volumes, costs and overall financial conditions.

New Accounting Pronouncements to be Adopted

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments”, which requires measurement and recognition of expected versus incurred credit losses for financial assets.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments,” 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):

Effective Dates,” which delays the effective date of ASU 2016-13 for smaller reporting companies and other non-SEC reporting entities.

This applies to the Company’s equity method finance joint ventures, who are now required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

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 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.

This applies to the Company’s equity method finance joint ventures, which are now required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

The standard, and its subsequent modification, likely will 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 likely will impact the Company’s “Investments 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.

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832):

Disclosure by Business Entities about Government Assistance,” which improves the transparency of government assistance received by most business entities by requiring the disclosure of:

(1) the types of government assistance received;

(2) the accounting for such assistance;

and (3) the effect of the assistance on a business entity's financial statements.

This guidance will be effective for annual periods beginning after December 15, 2021.

Early adoption is permitted.

The Company is currently evaluating the impact of the new

guidance on the Company's annual disclosures.

Additionally, the Company will adopt the following pronouncement, effective for fiscal years beginning after December 15, 2022, which is not expected to have a material impact the Company's results of operations, financial condition and cash flows.

• ASU 2021-08 – “Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”

Notes to Condensed Consolidated Financial Statements - Continued

On August 13, 2021, the Company acquired Headsight, LLC (“Headsight”) for approximately $ 16.8 million.

Headsight is headquartered in Bremen, Indiana and manufactures header height sensors used in corn and grain harvesting operations.

The Company allocated the purchase price to the assets acquired and liabilities assumed based on estimates of their fair values as of the acquisition date.

The acquired net assets primarily consisted of accounts receivable, inventories, lease right-of-use assets and liabilities, accounts payable and accrued expenses, property, plant and equipment, and customer relationship, technology and trademark identifiable intangible assets.

The Company recorded approximately $ 4.8 million of customer relationship, technology and trademark identifiable intangible assets and approximately $ 8.9 million of goodwill associated with the acquisition.

The results of operations of Headsight have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition.

On May 2, 2022, the Company acquired JCA Industries, Inc.

(“JCA”) for 63.0 million Canadian dollars (or approximately $ 49.2 million as of May 2, 2022).

JCA is located in Winnipeg, Manitoba, Canada, and specializes in the design of electronic systems and software development to automate and control agricultural equipment.

The Company is in the process of determining the allocation of the purchase price to the fair values of the assets acquired and liabilities assumed.

On January 1, 2022, the Company acquired Appareo Systems, LLC (“Appareo”) for approximately $ 61.9 million, net of approximately $ 0.5 million of cash.

As a result of the acquisition of the remaining 50 % interest in IAS, the Company's previous operating joint venture with Appareo, the Company recorded a gain of approximately $ 3.4 million on the remeasurement of the previously held equity interest within “Other expense, net” in the Company's Condensed Consolidated Statements of Operations.

The fair value of the previously held 50 % interest in the joint venture as of the acquisition date was approximately $ 11.2 million.

Appareo is headquartered in Fargo, North Dakota and offers engineering, manufacturing, and technology for end-to-end product development.

The Company allocated the purchase price to the assets acquired and liabilities assumed based on preliminary estimates of their fair values as of the acquisition date.

The acquired net assets primarily consisted of accounts receivable, inventories, other current and noncurrent assets, assets held for sale, lease right-of-use assets and liabilities, accounts payable, accrued expenses, other current and noncurrent liabilities, property, plant and equipment, as well as customer relationship, technology, non-competition agreements and trademark identifiable intangible assets.

The Company recorded approximately $ 20.5 million of goodwill associated with the acquisition.

The results of operations of Appareo have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s North America geographical reportable segment.

Proforma financial information related to the acquisition of Headsight was not material to the Company’s result of operations.

The acquired identifiable intangible assets of Headsight as of the date of the acquisition are summarized in the following table (in millions):

Proforma financial information related to the acquisition of Appareo was not material to the Company’s results of operations.

The preliminary estimate of acquired identifiable intangible assets of Appareo as of the date of the acquisition are summarized in the following table (in millions):

Intangible Asset

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Trademarks 4.9 10 years

On September 10, 2021, the Company acquired Farm Robotics and Automation S.L.

(“Faromatics”) for approximately € 4.6 million (or approximately $ 5.5 million) net of approximately € 0.1 million (or approximately $ 0.1 million) of cash and € 0.8 million (or approximately $ 0.9 million) of escrowed cash which could be payable by the Company with in 18 months of the acquisition date.

Faromatics is headquartered in Barcelona, Spain, and is the creator of ChickenBoy ® , the world's first ceiling-suspended robot that monitors broiler chickens and helps farmers increase animal welfare and farm productivity.

The Company allocated the purchase price to the assets acquired and liabilities assumed based on estimates of their fair values as of the acquisition date.

The acquired net assets primarily consisted of inventories, other assets, lease right-of-use assets and liabilities, accounts payable and accrued expenses, property, plant and equipment, and technology identifiable intangible assets.

The Company recorded approximately € 1.5 million (or approximately $ 1.7 million) of technology and approximately € 4.8 million (or approximately $ 5.7 million) of goodwill associated with the acquisition.

The results of operations of Faromatics have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s North America and Europe/Middle East geographical reportable segments.

Proforma financial information related to the acquisition of Faromatics was not material to the Company’s result of operations.

The acquired identifiable intangible assets of Faromatics as of the date of the acquisition are summarized in the following table (in millions):

Intangible Asset

Amount Weighted-Average Useful Life

Technology $ 1.7 15 years

Non-competition agreements 1.4 5 years

Notes to Condensed Consolidated Financial Statements - Continued

RESTRUCTURING EXPENSES AND IMPAIRMENT CHARGES

Restructuring Expenses

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.

Restructuring expenses activity during the three and nine months ended September 30, 2021 is summarized as follows (in millions):

Gain on Sale of Joint Venture Employee Severance Facility Closure Costs Other Related Closure Costs Total

Restructuring expenses activity during the three months ended March 31, 2022 is summarized as follows (in millions):

Employee Severance Other Related Closure Costs Total

Balance as of December 31, 2021 $ 14.5 $ 0.2 $ 14.7

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Balance as of March 31, 2022 $ 13.8 $ 0.3 $ 14.1

Second quarter 2021 provision — 3.9 — 1.5 5.4

Second quarter 2021 provision reversal — ( 0.7 ) — — ( 0.7 )

Second quarter 2021 cash activity — ( 1.9 ) — ( 0.7 ) ( 2.6 )

Foreign currency translation — — — 0.2 0.2

Balance as of June 30, 2021 $ — $ 11.3 $ — $ 2.6 $ 13.9

Third quarter 2021 provision — 5.1 — — 5.1

Third quarter 2021 provision reversal ( 2.5 ) ( 1.2 ) — — ( 3.7 )

Third quarter 2021 cash activity 2.5 ( 3.0 ) — ( 1.4 ) ( 1.9 )

Foreign currency translation — ( 0.2 ) — ( 0.1 ) ( 0.3 )

Balance as of September 30, 2021 $ — $ 12.0 $ — $ 1.1 $ 13.1

In addition, during the three months ended December 31, 2019, the Company exited and sold it’s 50 % interest in its USC, LLC joint venture to its joint venture partner.

The Company recorded a loss of approximately $ 2.1 million associated with the sale, reflected at the time within “Restructuring expenses” in the Company’s Consolidated Statements of Operations.

As a result of the final payments received from the former joint venture partner related to the sale during the three months ended September 30, 2021, the Company recorded a gain of approximately $ 2.5 million, also reflected within “Restructuring expenses” in the Company’s Condensed Consolidated Statements of Operations.

Impairment Charges

In light of the current conflict between Russia and Ukraine, during the three months ended March 31, 2022, the Company assessed the fair value of its gross assets related to the joint ventures operating in Russia for potential impairment and recorded asset impairment charges of approximately $ 36.0 million, reflected as “Impairment charges” in its Condensed Consolidated Statements of Operations, with an offsetting benefit of approximately $ 12.2 million included within “Net loss (income) attributable to noncontrolling interests.” In addition, during the three months ended March 31, 2022, the Company recorded a write-down of its investment in its Russian finance joint venture of approximately $ 4.8 million, reflected within “Equity in net earnings of affiliates” in its Condensed Consolidated Statements of Operations.

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the three and nine months ended September 30, 2021 and 2020 (in millions):

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

2021 2020 2021 2020

The Company recorded stock compensation expense as follows for the three months ended March 31, 2022 and 2021 (in millions):

Three Months Ended March 31,

Cost of goods sold $ 0.3 $ 0.3

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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, 2021, of the 10,000,000 shares reserved for issuance under the Plan, 3,860,676 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’ Talent and Compensation Committee, to

Notes to Condensed Consolidated Financial Statements - Continued

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.

As of March 31, 2022, of the 10,000,000 shares reserved for issuance under the Plan, 3,823,268 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’ Talent and 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.

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, 2021 and 2020 was $ 123.33 and $ 70.84 , respectively.

During the nine months ended September 30, 2021, the Company granted 281,310 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, 2022 and 2021 was $ 124.12 and $ 123.26 , respectively.

Notes to Condensed Consolidated Financial Statements - Continued

During the three months ended March 31, 2022, the Company granted 274,566 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.

The 2021 grant of performance award shares is subject to a total shareholder return modifier.

Performance award transactions during the nine months ended September 30, 2021 are presented as if the Company were to achieve its maximum levels of performance and assume the 2021 performance awards subject to the total shareholder return modifier are achieved at target levels under the plan awards, and were as follows:

The 2022 and 2021 grants of performance award shares are subject to a total shareholder return modifier.

Performance award transactions during the three months ended March 31, 2022 are presented as if the Company were to achieve its maximum levels of performance and assume the 2022 and 2021 performance awards subject to the total shareholder return modifier are achieved at target levels under the plan awards, and were as follows:

Shares awarded but not earned at January 1 514,714

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Shares vested ( 2,534 )

Shares awarded but not earned at September 30 851,882

As of September 30, 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 $ 27.4 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 31 777,966

As of March 31, 2022, 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 $ 46.0 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

The weighted average grant-date fair value of the restricted stock units ("RSUs") granted under the Plan during the nine months ended September 30, 2021 and 2020 was $ 113.91 and $ 70.83 , respectively.

During the nine months ended September 30, 2021, the Company granted 92,848 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 2020 grant of RSU’s to certain executives has a three-year cliff vesting requirement subject to adjustment based on a total shareholders return metric relative to the Company's defined peer group.

The weighted average grant-date fair value of the restricted stock units (“RSUs”) granted under the Plan during the three months ended March 31, 2022 and 2021 was $ 117.08 and $ 113.63 , respectively.

During the three months ended March 31, 2022, the Company granted 91,583 RSU awards.

RSUs granted in 2022 and 2021 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 2020 grant of RSU’s to certain executives has a three-year cliff vesting requirement subject to adjustment based on a total shareholder return modifier relative to the Company's defined peer group.

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

RSU transactions during the nine months ended September 30, 2021 assume the 2020 RSUs subject to the total shareholder return modifier are achieved at target levels, and were as follows:

RSU transactions during the three months ended March 31, 2022 assume the 2020 RSUs subject to the total shareholder return modifier are achieved at target levels, and were as follows:

RSUs awarded but not vested at January 1 159,228

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RSUs vested ( 65,025 )

RSUs awarded but not vested at September 30 170,512

As of September 30, 2021, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 10.7 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

RSUs awarded but not vested at March 31 183,386

As of March 31, 2022, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 17.0 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

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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, 2021 were as follows:

SSAR transactions during the three months ended March 31, 2022 were as follows:

SSARs outstanding at January 1 194,611

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SSARs canceled or forfeited —

SSARs outstanding at September 30 210,235

The Company did not grant any SSARs during the nine months ended September 30, 2021, and does not currently anticipate granting any SSARs in the future.

As of September 30, 2021, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 1.1 million, and the weighted average period over which it is expected to be recognized is approximately two years .

SSARs outstanding at March 31 156,560

The Company did not grant any SSARs during the three months ended March 31, 2022, and does not currently anticipate granting any SSARs in the future.

As of March 31, 2022, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.7 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

Director Restricted Stock Grants

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The 2022 grant was made on April 28, 2022 and equated to 11,664 shares of common stock, of which 10,301 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, 2021 associated with these grants.

The Company recorded stock compensation expense of approximately $ 1.5 million during the three months ended June 30, 2022 associated with these grants.

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the nine months ended September 30, 2021 are summarized as follows (in millions):

Changes in the carrying amount of goodwill during the three months ended March 31, 2022 are summarized as follows (in millions):

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

Balance as of December 31, 2021 $ 609.6 $ 81.7 $ 469.5 $ 120.0 $ 1,280.8

Acquisitions 13.0 — 1.6 — 14.6

Acquisition 20.5 — — — 20.5

Foreign currency translation 0.1 14.1 ( 9.5 ) ( 1.3 ) 3.4

Balance as of September 30, 2021 $ 606.4 $ 83.6 $ 478.8 $ 120.5 $ 1,289.3

Balance as of March 31, 2022 $ 630.2 $ 95.8 $ 460.0 $ 118.7 $ 1,304.7

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.

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 was a 50 %-owned tillage and seeding joint venture.

As a result, the entire goodwill balance of this reporting unit was impaired, and during the three months ended June 30, 2020, the Company recorded a non-cash impairment charge of approximately $ 20.0 million as "Impairment charges" 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." During the three months ended June 30, 2021, the Company sold its 50 % interest in the joint venture.

Notes to Condensed Consolidated Financial Statements - Continued

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2021 are summarized as follows (in millions):

Changes in the carrying amount of acquired intangible assets during the three months ended March 31, 2022 are summarized as follows (in millions):

Gross carrying amounts:

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Balance as of December 31, 2021 $ 189.0 $ 568.6 $ 139.9 $ 7.0 $ 904.5

Acquisitions 0.7 3.2 2.6 — 6.5

Sale of business ( 1.3 ) ( 4.4 ) ( 17.1 ) — ( 22.8 )

Acquisition 6.3 9.8 6.3 — 22.4

Foreign currency translation ( 1.3 ) 0.9 ( 1.5 ) 0.1 ( 1.8 )

Balance as of September 30, 2021 $ 201.3 $ 575.9 $ 138.9 $ 9.2 $ 925.3

Balance as of March 31, 2022 $ 194.0 $ 579.3 $ 144.7 $ 7.1 $ 925.1

Accumulated amortization:

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Amortization expense 3.4 9.5 2.4 — 15.3

Sale of business ( 1.3 ) ( 4.4 ) ( 15.2 ) — ( 20.9 )

Foreign currency translation ( 0.4 ) 1.4 ( 1.2 ) 0.1 ( 0.1 )

Balance as of September 30, 2021 $ 100.3 $ 407.9 $ 94.6 $ 3.6 $ 606.4

Balance as of March 31, 2022 $ 96.1 $ 420.6 $ 95.9 $ 1.6 $ 614.2

Indefinite-lived intangible assets:

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Foreign currency translation ( 0.8 )

Balance as of September 30, 2021 $ 87.4

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.

Balance as of March 31, 2022 $ 85.9

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

Notes to Condensed Consolidated Financial Statements - Continued

Long-term debt consisted of the following at September 30, 2021 and December 31, 2020 (in millions):

September 30, 2021 December 31, 2020

Senior term loan due 2022 $ 173.8 $ 184.0

Long-term debt consisted of the following at March 31, 2022 and December 31, 2021 (in millions):

March 31, 2022 December 31, 2021

Credit facility, expires 2023 $ 600.0 $ —

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Senior term loans due between 2023 and 2028 355.5 445.9

0.800 % Senior notes due 2028

Other long-term debt 7.5 7.7

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1,901.5 1,413.3

Senior term loans due 2021, net of debt issuance costs ( 222.5 ) ( 323.6 )

Current portion of other long-term debt ( 2.1 ) ( 2.1 )

Total long-term indebtedness, less current portion $ 1,899.4 $ 1,411.2

Short-term Credit Facility

In April 2022, the Company entered into a short-term revolving credit facility of € 225.0 million with Coöperatieve Rabobank U.A., or “Rabobank.” The € 225.0 million (or approximately $ 240.0 million) was borrowed on April 26, 2022, with a maturity date of March 31, 2023.

Interest accrues on amounts outstanding under the credit facility, at the Company’s option, at either (1) the secured overnight financing rate (“SOFR”) for borrowings denominated in U.S.

dollars or Euro Interbank Offered Rate (“EURIBOR”) for borrowings denominated in Euros plus a margin of 0.75 %, 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 %, or (iii) one-month adjusted term SOFR plus 1.0 %, plus a margin of 0.75 %.

The credit facility contains covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends.

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

0.800 % Senior Notes Due 2028

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 692.5 million) of senior notes at an issue price of 99.993 %.

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 665.6 million as of March 31, 2022) of senior notes at an issue price of 99.993 %.

The notes mature on October 6, 2028, and interest is payable annually, in arrears, at 0.800 %.

The senior notes contain covenants restricting, among other things, the incurrence of certain secured indebtedness.

The notes contain covenants restricting, among other things, the incurrence of certain secured indebtedness.

The senior notes are subject to both optional and mandatory redemption in certain events.

During October 2021, the Company used the proceeds received from the senior notes to repay its € 150.0 million (or approximately $ 173.4 million as of October 8, 2021) senior term loan due 2022, $ 370.0 million related to its multi-currency revolving credit facility, and two of its 2016 senior term loans due October 2021 with an aggregate amount outstanding of € 192.0 million (or approximately $ 223.8 million as of October 19, 2021).

In August 2021, prior to the issuance of the senior notes, the Company repaid two of its 2018 senior term loans due August 2021 with an aggregate amount of € 72.0 million (or approximately $ 85.5 million as of August 1, 2021).

The Company intends to use an additional aggregate amount of € 73.5 million (or approximately $ 85.2 million as of September 30, 2021) of the proceeds from the issuance of the senior notes and existing cash to repay one of its 2016 senior term loans due October 2023 and one of its 2018 senior term loans due August 2023.

Senior Term Loan Due 2022

In October 2018, the Company entered into a term loan agreement with Coöperatieve Rabobank U.A (“Rabobank”) in the amount of € 150.0 million (or approximately $ 173.8 million as of September 30, 2021).

Interest was 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.

As mentioned previously, during October 2021, the Company repaid its senior term loan of € 150.0 million (or approximately $ 173.4 million as of October 8, 2021) with the proceeds from its 0.800 % senior notes due 2028.

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 September 30, 2021 the Company had $ 395.0 million outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $ 405.0 million under the revolving credit facility.

As of March 31, 2022 the Company had $ 600.0 million of outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $ 200.0 million under the revolving credit facility.

During April 2022, the Company borrowed $ 200.0 million under its revolving credit facility.

As of December 31, 2021 the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $ 800.0 million under the facility.

As mentioned previously, on October 15, 2021, the Company repaid $ 370.0 million of its multicurrency revolving credit facility as a result of the issuance of its 0.800 % senior notes due 2028.

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 $ 539.8 million as of September 30, 2021).

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

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Once amounts have been repaid, those amounts are not permitted to be re-drawn.

The maturity date of the 2020 term loans is April 8, 2022.

Interest accrues on amounts outstanding under the 2020 term loans, at the Company's option, at either (1) LIBOR plus a margin based on the Company's credit rating ranging from 1.125 % to 2.125 % until April 8, 2021 and ranging from 1.375 % to 2.375 % thereafter, 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 based on the Company’s credit rating ranging from 0.125 % to 1.375 % until April 8, 2021 and ranging from 0.375 % to 1.375 % thereafter.

The 2020 term loans contain covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends.

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

The maturity date of the 2020 term loans was April 8, 2022.

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.

There were no other borrowings on the 2020 term loans subsequent to

Notes to Condensed Consolidated Financial Statements - Continued

the initial borrowings in April 2020.

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 September 30, 2021, the Company had the ability to borrow € 117.5 million and $ 133.7 million (or an aggregate of approximately $ 269.8 million) of the 2020 term loans.

As of March 31, 2022, the Company had the ability to borrow € 117.5 million and $ 133.7 million (or an aggregate of approximately $ 264.0 million) of the 2020 term loans.

As described above, the Company’s credit facility allows it to select from among various interest rate options.

Due to the phase-out of LIBOR, LIBOR-based rates no longer will be available for borrowings denominated in U.S.

dollars after December 31, 2022, and for loans denominated in other currencies after December 31, 2021.

The interest rates reflected in the Company’s credit facility were designed to accommodate the discontinuation of LIBOR-based rates and a shift to the “Secured Overnight Financing Rate” or a base rate, and, as such, the Company does not believe that moving to other rates will have a materially adverse effect on the Company’s results of operations or financial position.

dollars after December 31, 2022, and already are not available for loans denominated in other currencies.

The interest rates reflected in the Company’s credit facility were designed to accommodate the discontinuation of LIBOR-based rates and a shift to SOFR or a base rate, and, as such, the Company does not believe that moving to other rates will have a materially adverse effect on the Company’s results of operations or financial position.

In addition, the credit facility agreement also provides for an expedited amendment process once a replacement for LIBOR is established, which the Company may elect to utilize to add additional interest-rate alternatives.

1.002 % Senior Term Loan Due 2025

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 289.7 million as of September 30, 2021) from the European Investment Bank.

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 277.3 million as of March 31, 2022) from the European Investment Bank.

The loan matures on January 24, 2025.

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

Additionally, as mentioned previously, the Company repaid € 192.0 million (or approximately $ 223.8 million as of October 19, 2021) upon maturity of two 2016 senior term loans in October 2021.

In August 2021, prior to the issuance of the senior notes due 2028, the

Notes to Condensed Consolidated Financial Statements - Continued

Company repaid two of its 2018 senior term loans upon maturity with an aggregate amount of € 72.0 million (or approximately $ 85.5 million as of August 1, 2021).

In aggregate, as of September 30, 2021, the Company had indebtedness of € 585.0 million (or approximately $ 677.8 million as of September 30, 2021) through a group of ten remaining related term loan agreements.

As of October 31, 2021, as a result of further repayments discussed previously, the Company had indebtedness of € 393.0 million (or approximately $ 456.7 million) through a group of eight remaining term loan agreements.

Additionally, the Company repaid € 192.0 million (or approximately $ 223.8 million as of October 19, 2021) upon maturity of two 2016 senior term loans in October 2021.

In August 2021, prior to the issuance of the senior notes due 2028, the Company repaid two of its 2018 senior term loans upon maturity with an aggregate amount of € 72.0 million (or approximately $ 85.5 million as of August 1, 2021).

On February 1, 2022, the Company repaid € 72.5 million (or approximately $ 81.7 million) of one of its 2018 senior term loans due August 2023 with existing cash on hand.

In aggregate, as of March 31, 2022, the Company had indebtedness of € 320.5 million (or approximately $ 355.5 million as of March 31, 2022) through a group of seven remaining related term loan agreements.

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

As of September 30, 2021, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.90 % to 2.26 % and maturity dates between October 2021 and August 2028.

As of March 31, 2022, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.90 % to 2.26 % and maturity dates between August 2023 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 1.10 % to 1.25 % and maturity dates between October 2023 and August 2025.

Short-Term Borrowings

As of September 30, 2021 and December 31, 2020, the Company had short-term borrowings due within one year of approximately $ 77.8 million and $ 33.8 million, respectively.

As of March 31, 2022 and December 31, 2021, the Company had short-term borrowings due within one year of approximately $ 93.2 million and $ 90.8 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, 2021 and December 31, 2020, outstanding letters of credit totaled approximately $ 14.6 million and $ 14.4 million, respectively.

At both March 31, 2022 and December 31, 2021, outstanding letters of credit totaled approximately $ 14.6 million.

RECOVERABLE INDIRECT TAXES

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These taxes are accumulated as tax credits and create assets that are reduced by the VAT collected from the Company’s sales in the Brazilian market.

The Company regularly assesses the recoverability of these tax credits, and establishes reserves when necessary against them, through analyses that include, amongst others, the history of realization, the transfer of tax credits to third parties as authorized by the government, anticipated changes in the supply chain and the future expectation of tax debits from the Company’s ongoing operations.

The Company regularly assesses the recoverability of these tax credits, and

Notes to Condensed Consolidated Financial Statements - Continued

establishes reserves when necessary against them, through analyses that include, amongst others, the history of realization, the transfer of tax credits to third parties as authorized by the government, anticipated changes in the supply chain and the future expectation of tax debits from the Company’s ongoing operations.

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

The Company had recorded approximately $ 122.2 million and $ 91.2 million, respectively, of VAT tax credits, net of reserves, as of September 30, 2021 and December 31, 2020.

Inventories at September 30, 2021 and December 31, 2020 were as follows (in millions):

September 30, 2021 December 31, 2020

The Company had recorded approximately $ 142.3 million and $ 114.4 million, respectively, of VAT tax credits, net of reserves, as of March 31, 2022 and December 31, 2021.

Inventories at March 31, 2022 and December 31, 2021 were as follows (in millions):

March 31, 2022 December 31, 2021

Finished goods $ 857.1 $ 718.2

3 unchanged sentences

Inventories, net $ 3,259.7 $ 2,593.7

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

The warranty reserve activity for the three and nine months ended September 30, 2021 and 2020, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

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

2021 2020 2021 2020

The warranty reserve activity for the three months ended March 31, 2022 and 2021, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 592.5 $ 521.8

Acquisition — 0.2 — 0.2

Accruals for warranties issued during the period 83.3 93.3

1 unchanged sentence

Foreign currency translation ( 3.6 ) ( 17.8 )

Balance at September 30 $ 568.7 $ 438.4 $ 568.7 $ 438.4

Balance at March 31 $ 614.5 $ 542.0

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 $ 473.5 million, $ 431.6 million and $ 356.4 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2021, December 31, 2020 and September 30, 2020, respectively.

Approximately $ 95.2 million, $ 90.2 million and $ 82.0 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2021, December 31, 2020, and September 30, 2020, respectively.

Approximately $ 519.6 million, $ 492.7 million and $ 450.0 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Approximately $ 94.9 million, $ 99.8 million and $ 92.0 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2022, December 31, 2021, and March 31, 2021, respectively.

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

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

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

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

2021 2020 2021 2020

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, 2022 and 2021 is as follows (in millions, except per share data):

Three Months Ended March 31,

Basic net income per share:

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

75.6 75.4 75.8 75.5

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 2.03 $ 1.99

There were no SSARs outstanding for the three and nine months ended September 30, 2021 that 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, respectively, were outstanding but not included in the calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

At September 30, 2021 and December 31, 2020, the Company had approximately $ 253.1 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 September 30, 2021 and December 31, 2020 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 62.1 million and $ 64.1 million, respectively.

In addition, the gross unrecognized income tax benefits as of September 30, 2021 exclude certain deposits made in a foreign jurisdiction of approximately $ 6.8 million associated with an ongoing audit.

At September 30, 2021 and December 31, 2020, the Company had approximately $ 50.8 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, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

At September 30, 2021 and December 31, 2020, the Company had approximately $ 201.5 million and $ 163.8 million, respectively, of accrued taxes and approximately $ 0.8 million and $ 7.0 million, respectively, of deferred taxes related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Other noncurrent liabilities” and “Deferred tax liabilities,” respectively, in the Company’s Condensed Consolidated Balance Sheets.

There were no SSARs outstanding for the three months ended March 31, 2022 and 2021 that had an antidilutive impact.

At March 31, 2022 and December 31, 2021, the Company had approximately $ 256.5 million and $ 246.4 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, 2022 and December 31, 2021 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 61.5 million and $ 70.2 million, respectively.

In addition, the gross unrecognized income tax benefits as of March 31, 2022 and December 31, 2021 exclude certain deposits made in a foreign jurisdiction of approximately $ 46.8 million and $ 6.7 million, respectively, associated with an ongoing audit.

At March 31, 2022 and December 31, 2021, the Company had approximately $ 12.7 million and $ 40.1 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, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

At March 31, 2022 and December 31, 2021, the Company had approximately $ 234.3 million and $ 196.7 million, respectively, of accrued taxes and approximately $ 9.5 million and $ 9.6 million, respectively, of deferred taxes related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Other noncurrent liabilities” and “Deferred tax liabilities,” respectively, in the Company’s Condensed Consolidated Balance Sheets.

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

At September 30, 2021 and December 31, 2020, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 41.7 million and $ 39.4 million, respectively.

At March 31, 2022 and December 31, 2021, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 31.7 million and $ 32.7 million, respectively.

Generally, tax years 2016 through 2021 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, 2021, a number of income tax examinations in foreign jurisdictions are ongoing.

The Company’s income tax provision as of September 30, 2021 includes the benefit of a reversal of approximately $ 67.8 million related to a valuation allowance previously established against the Company’s net deferred tax assets in the United States that the Company recorded as of June 30, 2021.

Improvements in income in the United States during 2020 and year-to-date 2021, along with updated future projected income levels, supported the reversal of the valuation allowance.

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

As of March 31, 2022, 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 certain 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 regularly assesses the likelihood that its deferred tax assets will be

Notes to Condensed Consolidated Financial Statements - Continued

recovered from estimated future taxable income and available tax planning strategies and has determined that all adjustments to the valuation allowances have been appropriate.

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.

Notes to Condensed Consolidated Financial Statements - Continued

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 unchanged sentences

During 2022 and 2021, 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 $ 293.0 million and $ 395.8 million as of September 30, 2021 and December 31, 2020, respectively.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 235.9 million as of March 31, 2022.

The Company did not have any derivatives that were designated as cash flow hedges related to foreign currency contracts as of December 31, 2021.

Steel Commodity Contracts

During 2022 and 2021, 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 $ 11.9 million and $ 14.7 million as of September 30, 2021 and December 31, 2020, 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, 2021 and 2020 (in millions):

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 21.6 million and $ 31.9 million as of March 31, 2022 and December 31, 2021, 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, 2022 and 2021 (in millions):

Recognized in Net Income

Three 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

6 unchanged sentences

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

Recognized in Net Income

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)

$ ( 5.8 ) Cost of goods sold $ ( 7.4 ) $ 6,093.5

Commodity contracts (2)

$ 13.5 Cost of goods sold 8.2 $ 6,093.5

Commodity contracts 7.8 Cost of goods sold — 1,808.2

Total $ 1.0 $ ( 3.7 )

Foreign currency contracts $ 8.1 Cost of goods sold $ 4.2 $ 4,970.7

(1) The outstanding contracts as of September 30, 2021 range in maturity through December 2021.

(2) The outstanding contracts as of September 30, 2021 range in maturity through July 2022.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended September 30, 2021 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated derivative net gains as of June 30, 2021 $ 11.6 $ 3.8 $ 7.8

Net changes in fair value of derivatives 1.9 0.3 1.6

Net gains reclassified from accumulated other comprehensive loss into income ( 7.0 ) ( 2.0 ) ( 5.0 )

Accumulated derivative net gains as of September 30, 2021 $ 6.5 $ 2.1 $ 4.4

(1) The outstanding contracts as of March 31, 2022 range in maturity through December 2022.

(2) The outstanding contracts as of March 31, 2022 range in maturity through August 2022.

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 nine months ended September 30, 2021 (in millions):

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, 2022 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

2 unchanged sentences

Net gains reclassified from accumulated other comprehensive loss into income ( 1.2 ) ( 0.3 ) ( 0.9 )

Accumulated derivative net gains as of September 30, 2021 $ 6.5 $ 2.1 $ 4.4

A s of September 30, 2021, approximately $ 0.7 million of derivative net losses and approximately $ 5.5 million of derivatives net gains, before taxes, remain in accumulated other comprehensive loss held by the Company related to foreign currency contracts and commodity contracts, respectively, as the inventory associated with the losses and gains had not yet been sold.

Accumulated derivative net losses as of March 31, 2022 $ ( 4.8 ) $ ( 1.1 ) $ ( 3.7 )

A s of March 31, 2022, approximately $ 2.4 million of derivatives net losses, before taxes, remain in accumulated other comprehensive loss held by the Company related to commodity contracts, as the inventory associated with the losses had not yet been sold.

Net Investment Hedges

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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 € 247.9 million (or approximately $ 287.3 million as of September 30, 2021) 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 € 247.9 million (or approximately $ 275.0 million as of March 31, 2022) 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.

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

Notional Amount as of

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cross currency swap contract $ 300.0 $ 300.0

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

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three months ended March 31, 2022 and 2021 (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, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Cross currency swap contract $ 5.8 $ ( 13.3 ) $ 5.5 $ ( 11.8 )

Foreign currency denominated debt — — — 1.7

Other Comprehensive Loss for the Three Months Ended

Before-Tax Amount Income Tax After-Tax Amount

March 31, 2022 $ 4.2 $ 1.1 $ 3.1

March 31, 2021 ( 4.1 ) — ( 4.1 )

Derivative Transactions Not Designated as Hedging Instruments

2 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 September 30, 2021 and December 31, 2020, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,390.6 million and $ 3,326.6 million, respectively.

As of March 31, 2022 and December 31, 2021, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,360.9 million and $ 3,681.9 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):

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

Classification of Gain (Loss)

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

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

Classification of (Loss) Gain

March 31, 2022 March 31, 2021

Foreign currency contracts Other expense, net $ ( 13.8 ) $ 34.4

The table below sets forth the fair value of derivative instruments as of September 30, 2021 (in millions):

The table below sets forth the fair value of derivative instruments as of March 31, 2022 (in millions):

Asset Derivatives as of

September 30, 2021 Liability Derivatives as of

September 30, 2021

March 31, 2022 Liability Derivatives as of

March 31, 2022

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

4 unchanged sentences

Derivative instruments not designated as hedging instruments:

Foreign currency contracts Other current assets 13.2 Other current liabilities 9.3

Foreign currency contracts (1)

Other current assets 10.9 Other current liabilities 22.7

Total derivative instruments $ 32.1 $ 29.7

(1) The outstanding contracts as of March 31, 2022 range in maturity through October 2022.

Notes to Condensed Consolidated Financial Statements - Continued

6 unchanged sentences

Foreign currency contracts Other current assets $ — Other current liabilities $ —

Commodity contracts Other current assets 0.5 Other current assets —

Commodity contracts Other current assets 0.2 Other current liabilities 2.0

Cross currency swap contract Other noncurrent assets 12.5 Other noncurrent liabilities —

Derivative instruments not designated as hedging instruments:

Foreign currency contracts Other current assets 12.3 Other current liabilities 22.2

Foreign currency contracts (1)

Other current assets 15.1 Other current liabilities 5.1

Total derivative instruments $ 27.8 $ 7.1

(1) The outstanding contracts as of December 31, 2021 range in maturity through October 2022.

Notes to Condensed Consolidated Financial Statements - Continued

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, 2021 (in millions):

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, June 30, 2021 $ 0.8 $ 11.7 $ 4,864.1 $ ( 1,738.3 ) $ 26.5 $ 3,164.8

Stock compensation — 5.9 — — — 5.9

SSARs exercised — ( 0.5 ) — — — ( 0.5 )

Comprehensive income:

Net income — — 181.3 — 1.1 182.4

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments

— — — ( 65.4 ) — ( 65.4 )

Defined benefit pension plans, net of tax — — — 2.6 — 2.6

Deferred gains and losses on derivatives, net of tax

— — — ( 3.4 ) — ( 3.4 )

Payment of dividends to stockholders — — ( 15.0 ) — — ( 15.0 )

Purchases and retirement of common stock

( 0.1 ) ( 13.5 ) ( 61.4 ) — — ( 75.0 )

Balance, September 30, 2021 $ 0.7 $ 3.6 $ 4,969.0 $ ( 1,804.5 ) $ 27.6 $ 3,196.4

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, 2022 and 2021 (in millions):

Stock Additional

9 unchanged sentences

Comprehensive income:

Net income — — 614.9 — 3.3 618.2

Other comprehensive income, net of reclassification adjustments:

Foreign currency translation adjustments — — — ( 32.3 ) 0.4 ( 31.9 )

Defined benefit pension plans, net of tax — — — 31.7 — 31.7

Deferred gains and losses on derivatives, net of tax — — — 6.9 — 6.9

Payment of dividends to stockholders — — ( 343.6 ) — — ( 343.6 )

Purchases and retirement of common stock ( 0.1 ) ( 13.5 ) ( 61.4 ) — — ( 75.0 )

Distributions to noncontrolling interest — — — — ( 3.5 ) ( 3.5 )

Change in noncontrolling interest — — — — ( 10.6 ) ( 10.6 )

Balance, September 30, 2021 $ 0.7 $ 3.6 $ 4,969.0 $ ( 1,804.5 ) $ 27.6 $ 3,196.4

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, 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 — — 157.3 — 0.8 158.1

Net income (loss) — — 151.8 — ( 14.8 ) 137.0

Other comprehensive loss, net of reclassification adjustments:

2 unchanged sentences

Defined benefit pension plans, net of tax — — — 1.7 — 1.7

— — — 3.4 — 3.4

Deferred gains and losses on derivatives, net of tax

1 unchanged sentence

Payment of dividends to stockholders — — ( 14.9 ) — — ( 14.9 )

— — ( 12.0 ) — — ( 12.0 )

Changes in noncontrolling interests — — — — 0.2 0.2

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

Distributions to noncontrolling interest — — — — ( 13.8 ) ( 13.8 )

Balance, March 31, 2022 $ 0.7 $ 2.9 $ 5,306.2 $ ( 1,635.0 ) $ 0.1 $ 3,674.9

Stock Additional

8 unchanged sentences

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

Comprehensive loss:

Net income (loss) — — 291.7 — ( 7.3 ) 284.4

Comprehensive income:

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

— ( 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

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

Notes to Condensed Consolidated Financial Statements - Continued

Total comprehensive income (loss) attributable to noncontrolling interests for the three and nine months ended September 30, 2021 and 2020 was as follows (in millions):

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

2021 2020 2021 2020

Net income (loss) $ 1.1 $ 0.8 $ 3.3 $ ( 7.3 )

Total comprehensive (loss) income attributable to noncontrolling interests for the three months ended March 31, 2022 and 2021 was as follows (in millions):

Three Months Ended March 31,

Net (loss) income $ ( 14.8 ) $ 0.6

Other comprehensive income (loss):

Foreign currency translation adjustments 0.8 ( 0.4 )

Total comprehensive income (loss) $ 1.1 $ ( 1.4 ) $ 3.7 $ ( 12.7 )

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, 2021 (in millions):

Total comprehensive (loss) income $ ( 14.0 ) $ 0.2

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, 2022 (in millions):

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

Accumulated other comprehensive loss, December 31, 2021

$ ( 230.4 ) $ ( 0.4 ) $ ( 1,540.1 ) $ ( 1,770.9 )

Other comprehensive income (loss) before reclassifications — ( 2.4 ) 137.5 135.1

1 unchanged sentence

Other comprehensive income (loss), net of reclassification adjustments 1.7 ( 3.3 ) 137.5 135.9

Accumulated other comprehensive loss, September 30, 2021 $ ( 281.6 ) $ 4.4 $ ( 1,527.3 ) $ ( 1,804.5 )

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, 2021 and 2020 (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 Three Months Ended September 30, 2021 (1)

Three Months Ended September 30, 2020 (1)

Net losses (gains) on foreign currency contracts $ 1.5 $ ( 1.2 ) Cost of goods sold

Net gains on commodity contracts $ ( 8.5 ) $ — Cost of goods sold

Reclassification before tax ( 7.0 ) ( 1.2 )

2.0 0.2 Income tax benefit (provision)

Reclassification net of tax $ ( 5.0 ) $ ( 1.0 )

Defined benefit pension plans:

Amortization of net actuarial losses $ 3.4 $ 3.5 Other expense, net (2)

Amortization of prior service cost 0.1 0.5 Other expense, net (2)

Reclassification before tax 3.5 4.0

( 0.9 ) ( 0.6 ) Income tax provision

Reclassification net of tax $ 2.6 $ 3.4

Net (gains) losses reclassified from accumulated other comprehensive loss $ ( 2.4 ) $ 2.4

(1) (Gains) losses included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2021 and 2020, respectively.

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

See Note 15 for additional information on the Company’s defined benefit pension plans.

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, 2021 and 2020 (in millions):

Accumulated other comprehensive loss, March 31, 2022

$ ( 228.7 ) $ ( 3.7 ) $ ( 1,402.6 ) $ ( 1,635.0 )

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

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Nine Months Ended September 30, 2021 (1)

Nine Months Ended September 30, 2020 (1)

Net losses (gains) on foreign currency contracts $ 8.4 $ ( 4.4 ) Cost of goods sold

Details about Accumulated Other Comprehensive Loss Components Three Months Ended March 31, 2022 (1)

Three Months Ended March 31, 2021 (1)

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

Net gains on commodity contracts $ ( 1.3 ) $ — Cost of goods sold

9 unchanged sentences

Net losses reclassified from accumulated other comprehensive loss $ 0.8 $ 7.6

(1) Losses included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2021 and 2020, respectively.

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, respectively.

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

See Note 15 for additional information on the Company’s defined benefit pension plans.

(3) During the nine months ended September 30, 2021, the Company amended its ENPP.

The amendment resulted in a net gain of approximately $ 23.2 million, after tax, recognized in "Accumulated other comprehensive loss" in the Company's Condensed Balance Sheets.

See Note 15 for additional information regarding the Company's defined benefit pension plans.

Notes to Condensed Consolidated Financial Statements - Continued

Share Repurchase Program

In August 2021, the Company entered into an ASR agreement with a financial institution to repurchase an aggregate of $ 75.0 million of shares of its common stock.

The Company received 558,471 shares to date in this transaction.

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, 2021, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 170.0 million, which has no expiration date.

In November 2021, the Company entered into an ASR agreement with a financial institution to repurchase an aggregate of $ 60.0 million shares of its common stock.

The Company received 393,733 shares to date in this transaction.

The specific number of shares the Company will ultimately repurchase will be determined at the completion of the term of the ASR 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, the Company may be entitled to receive additional shares of common stock or, under certain circumstances, be required to remit a settlement amount.

The Company expects that additional shares will be received by the Company upon final settlement of its current ASR agreement, which expires during the first quarter of 2022.

In November 2021, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase an aggregate of $ 60.0 million shares of its common stock.

The Company received 393,733 shares in this transaction as of December 31, 2021.

On January 19, 2022, the Company received an additional 113,824 shares upon final settlement of its November 2021 ASR agreement.

All shares received under the ASR agreement discussed above 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.

Notes to Condensed Consolidated Financial Statements - Continued

As of March 31, 2022, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 110.0 million, which has no expiration date.

On April 28, 2022, the Company's Board of Directors approved an increase to its quarterly dividend commencing in the second quarter of 2022 by 20 % to $ 0.24 per common share and declared a special dividend of $ 4.50 per common share that will be paid during the second quarter of 2022.

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, 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.

As of March 31, 2022 and December 31, 2021, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 1.2 billion and $ 1.3 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.

4 unchanged sentences

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 $ 7.4 million and $ 17.1 million, respectively, during the three and nine months ended September 30, 2021.

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 ended September 30, 2020.

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

As of March 31, 2022 and December 31, 2021, the cash received from these arrangements was approximately $ 181.2 million and $ 215.4 million, respectively.

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 $ 7.9 million and $ 4.6 million for the three months ended March 31, 2022 and 2021, respectively.

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, 2021 and December 31, 2020, these finance joint ventures had approximately $ 67.0 million and $ 85.2 million, respectively, of outstanding accounts receivable associated with these arrangements.

As of March 31, 2022 and December 31, 2021, these finance joint ventures had approximately $ 87.8 million and $ 82.1 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 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, 2021 and 2020 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, 2022 and 2021 are set forth below (in millions):

Three Months Ended March 31,

Pension benefits 2022 2021

5 unchanged sentences

Curtailment (1)

— — ( 1.2 ) $ —

Net periodic pension cost $ 5.0 $ 2.8

(1) During the nine months ended September 30, 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.

(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 September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Postretirement benefits 2022 2021

1 unchanged sentence

Interest cost 0.2 0.2

Amortization of net actuarial losses 0.1 0.1 0.1 0.2

Amortization of prior service cost 0.1 —

1 unchanged sentence

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, 2021 (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, 2022 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated other comprehensive loss as of December 31, 2020 $ ( 412.5 ) $ ( 99.2 ) $ ( 313.3 )

Accumulated other comprehensive loss, December 31, 2021 $ ( 302.4 ) $ ( 72.0 ) $ ( 230.4 )

Amortization of net actuarial losses 2.2 0.6 1.6

Amortization of prior service cost 0.2 0.1 0.1

Plan amendment (1)

31.2 8.0 23.2

Accumulated other comprehensive loss as of September 30, 2021 $ ( 369.8 ) $ ( 88.2 ) $ ( 281.6 )

(1) During the nine months ended September 30, 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.

The after-tax impact of the aggregate of these items was approximately $ 23.2 million.

During the nine months ended September 30, 2021, the Company made approximately $ 28.3 million of contributions to its defined pension benefit plans.

Accumulated other comprehensive loss as of March 31, 2022 $ ( 300.0 ) $ ( 71.3 ) $ ( 228.7 )

During the three months ended March 31, 2022, the Company made approximately $ 10.6 million of contributions to its defined pension benefit plans.

The Company currently estimates its minimum contributions for 2022 to its defined pension benefit plans will aggregate approximately $ 36.4 million.

During the nine months ended September 30, 2021, the Company made approximately $ 1.0 million of contributions to its postretirement health care and life insurance benefit plans.

During the three months ended March 31, 2022, 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 2022.

17 unchanged sentences

See Note 12 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, 2021 and December 31, 2020 are summarized below (in millions):

As of September 30, 2021

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 are summarized below (in millions):

As of March 31, 2022

Level 1 Level 2 Level 3 Total

5 unchanged sentences

Derivative liabilities — 7.1 — 7.1

The carrying amounts of long-term debt under the Company’s senior term loan due 2022, 1.002 % senior term loan due 2025 and senior term loans due between 2021 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

The carrying amounts of long-term debt under the Company’s 1.002 % senior term loan due 2025 and senior term loans due between 2023 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

At March 31, 2022, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 541.7 million (or approximately $ 600.9 million as of March 31, 2022), compared to the carrying value of € 600.0 million (or approximately $ 665.6 million as of March 31, 2022).

See Note 6 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

5 unchanged sentences

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 nine months ended September 30, 2021 and 2020 and assets as of September 30, 2021 and December 31, 2020 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 $ 638.7 $ 383.3 $ 1,462.4 $ 240.7 $ 2,725.1

Income from operations 35.8 44.4 192.3 28.6 301.1

Depreciation 14.8 6.7 28.6 4.2 54.3

Capital expenditures 10.5 8.9 55.6 3.1 78.1

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

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

Segment results for the three months ended March 31, 2022 and 2021 and assets as of March 31, 2022 and December 31, 2021 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 $ 701.0 $ 356.4 $ 1,403.1 $ 225.2 $ 2,685.7

6 unchanged sentences

Capital expenditures 12.3 6.6 43.5 1.1 63.5

As of September 30, 2021 $ 1,321.6 $ 854.4 $ 2,605.6 $ 633.1 $ 5,414.7

As of March 31, 2022 $ 1,594.6 $ 1,151.3 $ 2,598.1 $ 656.1 $ 6,000.1

As of December 31, 2021 1,328.1 922.7 2,348.7 610.6 5,210.1

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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Segment income from operations $ 297.2 $ 256.4

Impairment charges ( 36.0 ) —

Corporate expenses ( 32.2 ) ( 35.9 )

Amortization of intangibles ( 15.3 ) ( 17.5 )

Goodwill impairment charge — — — ( 20.0 )

Stock compensation expense ( 6.7 ) ( 6.5 )

1 unchanged sentence

Consolidated income from operations $ 204.0 $ 195.2

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Segment assets $ 6,000.1 $ 5,210.1

11 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, 2021, the Company has outstanding guarantees of indebtedness owed to related and third parties of approximately $ 23.2 million, primarily related to dealer and end-user financing of equipment.

At March 31, 2022, the Company has outstanding guarantees of indebtedness owed to related and third parties of approximately $ 24.9 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 2027.

4 unchanged sentences

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

In addition, at September 30, 2021, the Company had accrued approximately $ 24.3 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, 2022, the Company had accrued approximately $ 22.4 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 these guarantees is approximately $ 174.4 million.

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2021 and December 31, 2020 were as follows (in millions):

September 30, 2021 December 31, 2020

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of March 31, 2022 and December 31, 2021 were as follows (in millions):

March 31, 2022 December 31, 2021

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, 2021, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,683.6 million.

The outstanding contracts as of September 30, 2021 range in maturity through December 2021.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 11.9 million that range in maturity through July 2022.

At March 31, 2022, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,596.8 million.

The outstanding contracts as of March 31, 2022 range in maturity through December 2022.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 21.6 million that range in maturity through August 2022.

Notes to Condensed Consolidated Financial Statements - Continued

4 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 September 30, 2021, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 24.2 million).

The amount of the tax disallowance through March 31, 2022, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 27.8 million).

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

2 unchanged sentences

However, the ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which could take several years.

During 2017, the Company purchased Precision Planting, which provides precision agricultural technology solutions.

In 2018, Deere & Company filed separate complaints in the U.S.

District Court of Delaware against the Company and its Precision Planting subsidiary alleging that certain products of those entities infringe certain patents of Deere.

The two complaints subsequently were consolidated into a single case, Case No.

1:18-cv-00827-CFC (CONSOLIDATED), that currently is scheduled for trial in July 2022.

It is the Company’s position that no patents have been, or are continuing to be, infringed, and the Company is vigorously contesting the allegations in the complaint.

The Company has an indemnity right under the purchase agreement related to the acquisition of Precision Planting from its previous owner.

Pursuant to that right, the previous owner of Precision Planting currently is responsible for the litigation costs associated with the complaint and is obligated to reimburse AGCO for some or all of the damages in the event of an adverse outcome in the litigation.

In the event of an adverse outcome, the Company estimates that the range of possible damages, based upon the advice of third-party specialists, would be up to approximately $ 7.0 million.

Deere & Company has provided an estimate of its damages that is significantly higher than the Company estimates and that the Company believes does not have merit.

The Company is a party to various other legal claims and actions incidental to its business.

3 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 nine months ended September 30, 2021 and 2020 were as follows (in millions):

Three Months Ended September 30,

Balance at beginning of period $ 201.2 $ 118.7

Advance consideration received 54.7 57.6

Revenue recognized during the period for extended warranty contracts, maintenance services and technology services ( 18.8 ) ( 11.5 )

Revenue recognized during the period related to grain storage and protein production systems ( 24.2 ) ( 24.6 )

Foreign currency translation ( 3.5 ) 4.7

Balance at September 30 $ 209.4 $ 144.9

Notes to Condensed Consolidated Financial Statements - Continued

Nine Months Ended September 30,

Significant changes in the balance of contract liabilities for the three months ended March 31, 2022 and 2021 were as follows (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 226.2 $ 172.0

3 unchanged sentences

Foreign currency translation ( 3.6 ) ( 2.6 )

Balance at September 30 $ 209.4 $ 144.9

Balance at March 31 $ 232.4 $ 186.3

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.

During the three and nine months ended September 30, 2021, we recognized approximately $ 18.7 million and $ 61.9 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2021.

During the three and nine months ended September 30, 2020, we recognized approximately $ 10.5 million and $ 36.3 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2020.

During the three months ended March 31, 2022, we recognized approximately $ 24.0 million of revenue that was recorded as a contract liability at the beginning of 2022.

During the three months ended March 31, 2021, we recognized approximately $ 25.7 million of revenue that was recorded as a contract liability at the beginning of 2021.

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, 2021 are $ 17.1 million for the remainder of 2021, $ 66.7 million in 2022, $ 51.9 million in 2023, $ 27.1 million in 2024 and $ 18.0 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 March 31, 2022 are $ 58.7 million for the remainder of 2022, $ 69.1 million in 2023, $ 42.5 million in 2024, $ 20.2 million in 2025 and $ 10.9 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 September 30, 2021 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 (1)

Net sales for the three months ended March 31, 2022 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 Consolidated (1)

Primary geographical markets:

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

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

20 unchanged sentences

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

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the nine months ended September 30, 2021 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 (1)

Primary geographical markets:

United States $ 1,576.2 $ — $ — $ — $ 1,576.2

Canada 332.0 — — — 332.0

South America — 894.4 — — 894.4

Germany — — 988.2 — 988.2

France — — 768.4 — 768.4

United Kingdom and Ireland — — 450.9 — 450.9

Finland and Scandinavia — — 574.9 — 574.9

Other Europe — — 1,490.5 — 1,490.5

Middle East and Algeria — — 151.9 — 151.9

Africa — — — 99.5 99.5

Asia — — — 318.8 318.8

Australia and New Zealand — — — 253.4 253.4

Mexico, Central America and Caribbean 76.3 7.7 — — 84.0

$ 1,984.5 $ 902.1 $ 4,424.8 $ 671.7 $ 7,983.1

Major products:

Tractors $ 661.0 $ 440.2 $ 2,967.3 $ 295.8 $ 4,364.3

Replacement parts 305.5 99.7 839.2 77.0 1,321.4

Grain storage and protein production systems 418.4 96.0 131.6 173.7 819.7

Combines, application equipment and other machinery 599.6 266.1 486.7 125.3 1,477.7

$ 1,984.5 $ 902.1 $ 4,424.8 $ 671.7 $ 7,983.1

(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):

North America South America Europe/Middle East (1)

Asia/Pacific/Africa (1)

Primary geographical markets:

United States $ 1,373.6 $ — $ — $ — $ 1,373.6

Canada 252.4 — — — 252.4

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

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.

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