What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-09 · 226 added, 204 removed, 861 unchanged (33% of the section changed)

3 unchanged sentences

(unaudited and in millions, except share amounts)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current Assets:

32 unchanged sentences

Common stock;

$ 0.01 par value, 150,000,000 shares authorized, 74,597,462 and 74,441,312 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

$ 0.01 par value, 150,000,000 shares authorized, 74,598,077 and 74,441,312 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 21.8 3.9

9 unchanged sentences

(unaudited and in millions, except per share data)

Three Months Ended June 30,

Three Months Ended September 30,

Net sales $ 3,121.6 $ 2,725.1

6 unchanged sentences

Restructuring expenses

Bad debt expense (credit) 1.6 ( 0.3 )

Bad debt (credit) expense ( 1.1 ) 0.4

Income from operations 332.1 251.9

6 unchanged sentences

Net income 237.9 182.4

Net loss (income) attributable to noncontrolling interests 0.1 ( 1.6 )

Net income attributable to noncontrolling interests — ( 1.1 )

Net income attributable to AGCO Corporation and subsidiaries $ 237.9 $ 181.3

8 unchanged sentences

(unaudited and in millions, except per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Net sales $ 8,752.5 $ 7,983.1

27 unchanged sentences

(unaudited and in millions)

Three Months Ended June 30,

Three Months Ended September 30,

Net income $ 237.9 $ 182.4

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

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation adjustments ( 75.7 ) ( 65.4 )

1 unchanged sentence

Deferred gains and losses on derivatives, net of tax 1.3 ( 3.4 )

Other comprehensive (loss) income, net of reclassification adjustments ( 126.0 ) 80.4

Other comprehensive loss, net of reclassification adjustments ( 91.3 ) ( 66.2 )

Comprehensive income 146.6 116.2

1 unchanged sentence

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 146.6 $ 115.1

Six Months Ended June 30,

Nine Months Ended September 30,

Net income $ 552.5 $ 618.2

Other comprehensive income, net of reclassification adjustments:

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

Foreign currency translation adjustments ( 61.9 ) ( 31.9 )

1 unchanged sentence

Deferred gains and losses on derivatives, net of tax ( 5.2 ) 6.9

Other comprehensive income, net of reclassification adjustments 10.7 72.9

Other comprehensive (loss) income, net of reclassification adjustments ( 80.6 ) 6.7

Comprehensive income 471.9 624.9

5 unchanged sentences

(unaudited and in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net income $ 552.5 $ 618.2

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

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

Depreciation 157.1 164.2

3 unchanged sentences

Equity in net earnings of affiliates, net of cash received ( 39.1 ) ( 48.6 )

Deferred income tax benefit ( 0.6 ) ( 65.5 )

Deferred income tax provision (benefit) 5.7 ( 67.3 )

Other 2.3 12.2

7 unchanged sentences

Total adjustments ( 847.6 ) ( 576.7 )

Net cash used in operating activities ( 566.2 ) ( 124.9 )

Net cash (used in) provided by operating activities ( 295.1 ) 41.5

Cash flows from investing activities:

8 unchanged sentences

Repayments of indebtedness ( 158.8 ) ( 1,384.9 )

Purchases and retirement of common stock — ( 75.0 )

Payment of dividends to stockholders ( 386.4 ) ( 343.6 )

25 unchanged sentences

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 adoption of ASU 2016-13 is not expected to have a material impact on the Company's results of operations or financial condition.

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

5 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of the new

guidance on the Company's annual disclosures.

The adoption of ASU 2021-10 is not expected to have a material impact on the Company's annual disclosures.

In September 2022, the FASB issued ASU 2022-04, “Liabilities-Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.” The new standard requires that a buyer in a supplier finance program disclose sufficient information about the key terms of the program, the amount of outstanding confirmed obligations at period end, where the obligations are presented in the balance sheet, and a rollforward of the obligations during the annual period.

This guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the rollforward, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on the Company's quarterly and annual disclosures.

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 on the Company's results of operations, financial condition or cash flows.

1 unchanged sentence

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

Notes to Condensed Consolidated Financial Statements - Continued

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

4 unchanged sentences

The Company recorded approximately 43.9 million Canadian dollars (or approximately $ 34.0 million) of goodwill associated with the acquisition.

Notes to Condensed Consolidated Financial Statements - Continued

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

The results of operations of JCA 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.

10 unchanged sentences

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

The acquired identifiable intangible assets of JCA and Appareo as of the date of their respective acquisitions during the first six months in 2022 are summarized in the following table (in millions):

The acquired identifiable intangible assets of JCA and Appareo as of the date of their respective acquisitions during the first nine months in 2022 are summarized in the following table (in millions):

Intangible Asset

8 unchanged sentences

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 six months ended June 30, 2022 is summarized as follows (in millions):

Restructuring expenses activity during the three and nine months ended September 30, 2022 is summarized as follows (in millions):

Employee Severance Other Related Closure Costs Total

9 unchanged sentences

Balance as of June 30, 2022 $ 10.3 $ 0.3 $ 10.6

Third quarter 2022 provision 1.0 — 1.0

Third quarter 2022 provision reversal — — —

Third quarter 2022 cash activity ( 3.4 ) — ( 3.4 )

Foreign currency translation ( 0.6 ) — ( 0.6 )

Balance as of September 30, 2022 $ 7.3 $ 0.3 $ 7.6

Impairment Charges

1 unchanged sentence

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the three and six months ended June 30, 2022 and 2021 (in millions):

Three Months Ended June 30, Six Months Ended June 30,

The Company recorded stock compensation expense as follows for the three and nine months ended September 30, 2022 and 2021 (in millions):

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

2022 2021 2022 2021

2 unchanged sentences

Total stock compensation expense $ 7.8 $ 6.0 $ 25.4 $ 21.3

Notes to Condensed Consolidated Financial Statements - Continued

Stock Incentive Plan

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

As of June 30, 2022, of the 10,000,000 shares reserved for issuance under the Plan, 3,817,951 shares were available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below.

As of September 30, 2022, of the 10,000,000 shares reserved for issuance under the Plan, 3,735,396 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.

Notes to Condensed Consolidated Financial Statements - Continued

Long-Term Incentive Plan and Related Performance Awards

The weighted average grant-date fair value of performance awards granted under the Plan during the six months ended June 30, 2022 and 2021 was $ 124.12 and $ 123.26 , respectively.

During the six months ended June 30, 2022, the Company granted 274,566 performance awards related to varying performance periods.

The weighted average grant-date fair value of performance awards granted under the Plan during the nine months ended September 30, 2022 and 2021 was $ 119.35 and $ 123.33 , respectively.

During the nine months ended September 30, 2022, the Company granted 320,120 performance awards related to varying performance periods.

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

Performance award transactions during the six months ended June 30, 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:

Performance award transactions during the nine months ended September 30, 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

2 unchanged sentences

Shares vested ( 2,534 )

Shares awarded but not earned at June 30 773,886

As of June 30, 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 $ 40.6 million, and the weighted average period over which it is expected to be recognized is approximately two years .

Shares awarded but not earned at September 30 815,400

As of September 30, 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 $ 38.4 million, and the weighted average period over which it is expected to be recognized is approximately two years .

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

On July 13, 2022, the Company granted 22,777 performance award shares (subject to the Company achieving future target levels of performance).

The 2022 grant of performance award shares is subject to a total shareholder return modifier.

Restricted Stock Unit Awards

The weighted average grant-date fair value of the restricted stock units (“RSUs”) granted under the Plan during the six months ended June 30, 2022 and 2021 was $ 117.08 and $ 113.63 , respectively.

During the six months ended June 30, 2022, the Company granted 91,583 RSU 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, 2022 and 2021 was $ 109.09 and $ 113.91 , respectively.

During the nine months ended September 30, 2022, the Company granted 133,546 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.

1 unchanged sentence

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 six months ended June 30, 2022 assume the 2020 RSUs subject to the total shareholder return modifier are achieved at target levels, and were as follows:

RSU transactions during the nine months ended September 30, 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

2 unchanged sentences

RSUs vested ( 65,906 )

RSUs awarded but not vested at June 30 182,482

As of June 30, 2022, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 14.9 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

On July 13, 2022, the Company granted 41,963 RSUs under the Plan.

RSUs awarded but not vested at September 30 222,908

Notes to Condensed Consolidated Financial Statements - Continued

As of September 30, 2022, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 16.1 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

Stock-Settled Appreciation Rights

1 unchanged sentence

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

SSAR transactions during the six months ended June 30, 2022 were as follows:

SSAR transactions during the nine months ended September 30, 2022 were as follows:

SSARs outstanding at January 1 194,611

2 unchanged sentences

SSARs canceled or forfeited —

SSARs outstanding at June 30 156,560

The Company did not grant any SSARs during the six months ended June 30, 2022, and does not currently anticipate granting any SSARs in the future.

As of June 30, 2022, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.6 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

SSARs outstanding at September 30 156,560

The Company did not grant any SSARs during the nine months ended September 30, 2022, and does not currently anticipate granting any SSARs in the future.

As of September 30, 2022, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.4 million, and the weighted average period over which it is expected to be recognized is approximately one year .

Director Restricted Stock Grants

1 unchanged sentence

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 $ 1.5 million during the six months ended June 30, 2022 associated with these grants.

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

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the six months ended June 30, 2022 are summarized as follows (in millions):

Changes in the carrying amount of goodwill during the nine months ended September 30, 2022 are summarized as follows (in millions):

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

2 unchanged sentences

Foreign currency translation ( 2.5 ) 2.5 ( 59.0 ) ( 13.1 ) ( 72.1 )

Balance as of June 30, 2022 $ 664.3 $ 86.6 $ 434.6 $ 112.7 $ 1,298.2

Balance as of September 30, 2022 $ 661.9 $ 84.2 $ 410.5 $ 106.9 $ 1,263.5

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

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements - Continued

Changes in the carrying amount of acquired intangible assets during the six months ended June 30, 2022 are summarized as follows (in millions):

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2022 are summarized as follows (in millions):

Gross carrying amounts:

3 unchanged sentences

Foreign currency translation ( 10.2 ) ( 21.7 ) ( 11.1 ) ( 0.7 ) ( 43.7 )

Balance as of June 30, 2022 $ 190.2 $ 572.6 $ 149.1 $ 6.7 $ 918.6

Balance as of September 30, 2022 $ 185.9 $ 562.3 $ 144.2 $ 6.3 $ 898.7

Accumulated amortization:

3 unchanged sentences

Foreign currency translation ( 3.9 ) ( 16.8 ) ( 8.6 ) ( 0.1 ) ( 29.4 )

Balance as of June 30, 2022 $ 97.6 $ 420.0 $ 94.7 $ 1.5 $ 613.8

Balance as of September 30, 2022 $ 98.4 $ 421.3 $ 93.8 $ 1.5 $ 615.0

Indefinite-lived intangible assets:

2 unchanged sentences

Foreign currency translation ( 4.6 )

Balance as of June 30, 2022 $ 84.0

Balance as of September 30, 2022 $ 82.1

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

Long-term debt consisted of the following at June 30, 2022 and December 31, 2021 (in millions):

June 30, 2022 December 31, 2021

External-use software, for which amortization has not started, was approximately $ 1.8 million as of September 30, 2022 and classified within "Intangible assets, net."

Long-term debt consisted of the following at September 30, 2022 and December 31, 2021 (in millions):

September 30, 2022 December 31, 2021

Credit facility, expires 2023 800.0 —

8 unchanged sentences

Uncommitted Credit Facility

In June 2022, the Company entered into an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 104.1 million as of June 30, 2022).

In June 2022, the Company entered into an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 97.7 million as of September 30, 2022).

The credit facility expires on December 31, 2026.

Any loans will bear interest at market rates.

As of June 30, 2022, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 104.1 million).

Short-term Credit Facility

In April 2022, the Company entered into a short-term revolving credit facility of € 225.0 million with Coöperatieve

Any loans will bear interest at the Euro Interbank Offered Rate (“EURIBOR”) plus a credit spread.

As of September 30, 2022, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 97.7 million).

Notes to Condensed Consolidated Financial Statements - Continued

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.

Short-term Credit Facility

In April 2022, the Company entered into a short-term multi-currency revolving credit facility of € 225.0 million with Coöperatieve Rabobank U.A., or “Rabobank.” The Company borrowed $ 240.0 million in U.S.

dollars (or approximately € 225.0 million as of April 26, 2022), with a maturity date of March 31, 2023, which remained outstanding as of September 30, 2022.

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 %.

dollars or 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.

If, on the last business day of any quarter, the outstanding borrowings on the credit facility exceed the U.S.

dollar equivalent of € 225.0 million (as of that date) by 5 % or more, the Company is required to repay the amount above such 5 % allowance.

0.800 % Senior Notes Due 2028

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 624.8 million as of June 30, 2022) of senior notes at an issue price of 99.993 %.

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 586.4 million as of September 30, 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 %.

6 unchanged sentences

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

As of June 30, 2022 the Company had $ 800.0 million of outstanding borrowings under the revolving credit facility and therefore had no availability to borrow under the revolving credit facility.

As of September 30, 2022, the Company had $ 800.0 million of outstanding borrowings under the credit facility and therefore had no additional availability.

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.

8 unchanged sentences

1.002 % Senior Term Loan Due 2025

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 260.4 million as of June 30, 2022) from the European Investment Bank.

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 244.3 million as of September 30, 2022) from the European Investment Bank.

The loan matures on January 24, 2025.

1 unchanged sentence

Interest is payable on the loan at 1.002 % per annum, payable semi-annually in arrears.

Notes to Condensed Consolidated Financial Statements - Continued

Senior Term Loans Due Between 2023 and 2028

3 unchanged sentences

On April 19, 2022, the Company repaid € 1.0 million (or approximately $ 1.1 million) of one of its 2016 senior term loans due October 2023.

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

Notes to Condensed Consolidated Financial Statements - Continued

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 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 June 30, 2022, the Company had indebtedness of € 319.5 million (or approximately $ 332.7 million as of June 30, 2022) through a group of six remaining related term loan agreements.

In aggregate, as of September 30, 2022, the Company had indebtedness of € 319.5 million (or approximately $ 312.2 million as of September 30, 2022) through a group of six 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 June 30, 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.

As of September 30, 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 loan with a floating interest rate, interest is payable in arrears on a semi-annual basis, with an interest rate based on the EURIBOR plus a margin of 1.10 % and a maturity date of August 2025.

Short-Term Borrowings

As of June 30, 2022 and December 31, 2021, the Company had short-term borrowings due within one year of approximately $ 320.8 million and $ 90.8 million, respectively.

The balance as of June 30, 2022 related to short-term borrowings includes the short-term revolving credit facility discussed previously of approximately $ 240.0 million.

As of September 30, 2022 and December 31, 2021, the Company had short-term borrowings due within one year of approximately $ 261.8 million and $ 90.8 million, respectively.

The balance as of September 30, 2022 related to short-term borrowings includes the short-term multi-currency revolving credit facility discussed previously of approximately $ 240.0 million.

Standby Letters of Credit and Similar Instruments

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

At June 30, 2022 and December 31, 2021, outstanding letters of credit totaled approximately $ 14.4 million and $ 14.6 million, respectively.

At September 30, 2022 and December 31, 2021, outstanding letters of credit totaled approximately $ 14.4 million and $ 14.6 million, respectively.

RECOVERABLE INDIRECT TAXES

3 unchanged sentences

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

The Company had recorded approximately $ 127.9 million and $ 114.4 million, respectively, of VAT tax credits, net of reserves, as of June 30, 2022 and December 31, 2021.

Inventories at June 30, 2022 and December 31, 2021 were as follows (in millions):

June 30, 2022 December 31, 2021

The Company had recorded approximately $ 117.3 million and $ 114.4 million, respectively, of VAT tax credits, net of reserves, as of September 30, 2022 and December 31, 2021.

Notes to Condensed Consolidated Financial Statements - Continued

Inventories at September 30, 2022 and December 31, 2021 were as follows (in millions):

September 30, 2022 December 31, 2021

Finished goods $ 925.6 $ 718.2

3 unchanged sentences

Inventories, net $ 3,324.7 $ 2,593.7

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

The warranty reserve activity for the three and six months ended June 30, 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 June 30, Six Months Ended June 30,

The warranty reserve activity for the three and nine months ended September 30, 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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

3 unchanged sentences

Foreign currency translation ( 31.9 ) ( 14.0 ) ( 72.4 ) ( 23.9 )

Balance at June 30 $ 589.5 $ 579.3 $ 589.5 $ 579.3

Balance at September 30 $ 561.9 $ 568.7 $ 561.9 $ 568.7

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 $ 499.8 million, $ 492.7 million and $ 482.2 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively.

Approximately $ 89.7 million, $ 99.8 million and $ 97.1 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2022, December 31, 2021, and June 30, 2021, respectively.

Approximately $ 482.1 million, $ 492.7 million and $ 473.5 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2022, December 31, 2021 and September 30, 2021, respectively.

Approximately $ 79.8 million, $ 99.8 million and $ 95.2 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2022, December 31, 2021, and September 30, 2021, respectively.

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

4 unchanged sentences

Diluted net income per common share assumes the exercise of outstanding SSARs and the vesting of performance share awards and RSUs using the treasury stock method when there is no other circumstance other than the passage of time under which they would not be issued, and the effects of such assumptions are dilutive.

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and six months ended June 30, 2022 and 2021 is as follows (in millions, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and nine months ended September 30, 2022 and 2021 is as follows (in millions, except per share data):

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

2022 2021 2022 2021

9 unchanged sentences

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 3.18 $ 2.40 $ 7.58 $ 8.11

There were no SSARs outstanding for the three and six months ended June 30, 2022 and 2021 that had an antidilutive impact.

At June 30, 2022 and December 31, 2021, the Company had approximately $ 257.9 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 June 30, 2022 and December 31, 2021 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 63.0 million and $ 70.2 million, respectively.

In addition, the gross unrecognized income tax benefits as of June 30, 2022 and December 31, 2021 exclude certain deposits made in a foreign jurisdiction of approximately $ 43.9 million and $ 6.7 million, respectively, associated with an ongoing audit.

At June 30, 2022 and December 31, 2021, the Company had approximately $ 12.0 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 June 30, 2022 and December 31, 2021, the Company had approximately $ 239.2 million and $ 196.7 million, respectively, of accrued taxes and approximately $ 6.7 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.

There were no SSARs outstanding for the three and nine months ended September 30, 2022 and 2021 that had an antidilutive impact.

At September 30, 2022 and December 31, 2021, the Company had approximately $ 246.5 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 September 30, 2022 and December 31, 2021 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 62.3 million and $ 70.2 million, respectively.

In addition, the gross unrecognized income tax benefits as of September 30, 2022 and December 31, 2021 exclude certain deposits made in a foreign jurisdiction of approximately $ 41.2 million and $ 6.7 million, respectively, associated with an ongoing audit.

At September 30, 2022 and December 31, 2021, the Company had approximately $ 10.4 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 September 30, 2022 and December 31, 2021, the Company had approximately $ 236.7 million and $ 196.7 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 0.5 million of deferred tax assets and $ 9.6 million of deferred tax liabilities, respectively, related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” 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 June 30, 2022 and December 31, 2021, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 31.5 million and $ 32.7 million, respectively.

At September 30, 2022 and December 31, 2021, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 22.4 million and $ 32.7 million, respectively.

The decrease in accrued interest and penalties primarily resulted from a foreign jurisdiction interest rate reduction announced during the three months ended September 30, 2022.

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 June 30, 2022, a number of income tax examinations in foreign jurisdictions are ongoing.

During the three months ended June 30, 2021, the Company’s income tax provision included the benefit of a reversal of approximately $ 67.8 million related to a valuation allowance previously established against the Company’s net deferred tax

As of September 30, 2022, a number of income tax examinations in foreign jurisdictions are ongoing.

Notes to Condensed Consolidated Financial Statements - Continued

assets in the United States.

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 2021, along with updated future projected income levels, supported the reversal of the valuation allowance.

12 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 $ 242.7 million as of June 30, 2022.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 150.6 million as of September 30, 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.

1 unchanged sentence

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 $ 18.5 million and $ 31.9 million as of June 30, 2022 and December 31, 2021, respectively.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 2.0 million and $ 31.9 million as of September 30, 2022 and December 31, 2021, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and six months ended June 30, 2022 and 2021 (in millions):

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and nine months ended September 30, 2022 and 2021 (in millions):

Recognized in Net Income

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

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

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

9 unchanged sentences

Recognized in Net Income

Six Months Ended June 30, Gain (Loss) Recognized in Accumulated

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

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

8 unchanged sentences

Total $ 7.7 $ 0.8

(1) The outstanding contracts as of June 30, 2022 range in maturity through December 2022.

(2) The outstanding contracts as of June 30, 2022 range in maturity through November 2022.

(1) The outstanding contracts as of September 30, 2022 range in maturity through December 2022.

(2) The outstanding contracts as of September 30, 2022 range in maturity through November 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 three months ended June 30, 2022 (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 September 30, 2022 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

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

Accumulated derivative net losses as of June 30, 2022 $ ( 9.6 ) $ ( 2.7 ) $ ( 6.9 )

Net changes in fair value of derivatives ( 5.1 ) ( 1.3 ) ( 3.8 )

Net losses reclassified from accumulated other comprehensive loss into income 6.6 1.5 5.1

Accumulated derivative net losses as of June 30, 2022 $ ( 9.6 ) $ ( 2.7 ) $ ( 6.9 )

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the six months ended June 30, 2022 (in millions):

Accumulated derivative net losses as of September 30, 2022 $ ( 8.1 ) $ ( 2.5 ) $ ( 5.6 )

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, 2022 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

2 unchanged sentences

Net losses reclassified from accumulated other comprehensive loss into income 10.8 2.6 8.2

Accumulated derivative net losses as of June 30, 2022 $ ( 9.6 ) $ ( 2.7 ) $ ( 6.9 )

As of June 30, 2022, approximately $ 0.7 million of derivative realized net losses and approximately $ 0.7 million of derivative realized net gains, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that had not yet been sold.

Accumulated derivative net losses as of September 30, 2022 $ ( 8.1 ) $ ( 2.5 ) $ ( 5.6 )

As of September 30, 2022, approximately $ 1.2 million and $ 1.9 million of derivative realized net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that 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 $ 258.2 million as of June 30, 2022) 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 $ 242.3 million as of September 30, 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.

2 unchanged sentences

Notional Amount as of

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cross currency swap contract $ 300.0 $ 300.0

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 and six months ended June 30, 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 Six Months Ended

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 and nine months ended September 30, 2022 and 2021 (in millions):

Gain Recognized in Accumulated

Other Comprehensive Loss for the

Three Months Ended Gain Recognized in Accumulated

Other Comprehensive Loss for the Nine Months Ended

Before-Tax Amount Income Tax After-Tax Amount Before-Tax Amount Income Tax After-Tax Amount

June 30, 2022 $ 16.6 $ 4.3 $ 12.3 $ 20.8 $ 5.4 $ 15.4

June 30, 2021 3.8 — 3.8 ( 0.3 ) — ( 0.3 )

September 30, 2022 $ 13.7 $ 3.5 $ 10.2 $ 34.5 $ 8.9 $ 25.6

September 30, 2021 5.8 1.8 4.0 5.5 1.8 3.7

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 June 30, 2022 and December 31, 2021, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,191.8 million and $ 3,681.9 million, respectively.

As of September 30, 2022 and December 31, 2021, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3.1 billion and $ 3.7 billion, respectively.

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

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

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

Classification of Gain (Loss)

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Foreign currency contracts Other expense, net $ ( 6.1 ) $ ( 1.7 ) $ ( 19.5 ) $ 27.6

The table below sets forth the fair value of derivative instruments as of June 30, 2022 (in millions):

The table below sets forth the fair value of derivative instruments as of September 30, 2022 (in millions):

Asset Derivatives as of

June 30, 2022 Liability Derivatives as of

June 30, 2022

September 30, 2022 Liability Derivatives as of

September 30, 2022

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

7 unchanged sentences

Total derivative instruments $ 80.5 $ 17.0

(1) The outstanding contracts as of June 30, 2022 range in maturity through October 2022.

(1) The outstanding contracts as of September 30, 2022 range in maturity through December 2022.

Notes to Condensed Consolidated Financial Statements - Continued

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CHANGES IN STOCKHOLDERS’ EQUITY

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and six months ended June 30, 2022 (in millions):

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, 2022 (in millions):

Stock Additional

3 unchanged sentences

Interests Total Stockholders’

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

Balance, June 30, 2022 $ 0.7 $ 13.3 $ 5,130.3 $ ( 1,761.1 ) $ 0.1 $ 3,383.3

Stock compensation — 7.8 — — — 7.8

3 unchanged sentences

Comprehensive income:

Net income (loss) — — 177.7 — ( 0.1 ) 177.6

Net income — — 237.9 — — 237.9

Other comprehensive loss, net of reclassification adjustments:

5 unchanged sentences

Payment of dividends to stockholders — — ( 17.9 ) — — ( 17.9 )

Distributions to noncontrolling interest — — — — — —

Balance, June 30, 2022 $ 0.7 $ 13.3 $ 5,130.3 $ ( 1,761.1 ) $ 0.1 $ 3,383.3

Change in noncontrolling interest

— — — — 0.1 0.1

Balance, September 30, 2022 $ 0.7 $ 21.8 $ 5,350.3 $ ( 1,852.4 ) $ 0.2 $ 3,520.6

Stock Additional

15 unchanged sentences

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

Balance, June 30, 2022 $ 0.7 $ 13.3 $ 5,130.3 $ ( 1,761.1 ) $ 0.1 $ 3,383.3

Change in noncontrolling interest — — — — 0.1 0.1

Balance, September 30, 2022 $ 0.7 $ 21.8 $ 5,350.3 $ ( 1,852.4 ) $ 0.2 $ 3,520.6

Notes to Condensed Consolidated Financial Statements - Continued

Stock Additional

3 unchanged sentences

Interests Total Stockholders’

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

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

11 unchanged sentences

— — ( 15.0 ) — — ( 15.0 )

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

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

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

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

Stock Additional

19 unchanged sentences

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

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

Total comprehensive income (loss) attributable to noncontrolling interests for the three and six months ended June 30, 2022 and 2021 was as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Total comprehensive income (loss) attributable to noncontrolling interests for the three and nine months ended September 30, 2022 and 2021 was as follows (in millions):

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

2022 2021 2022 2021

Net (loss) income $ ( 0.1 ) $ 1.6 $ ( 14.9 ) $ 2.2

Net income (loss) $ — $ 1.1 $ ( 14.9 ) $ 3.3

Other comprehensive income:

1 unchanged sentence

Total comprehensive income (loss) $ — $ 1.1 $ ( 14.0 ) $ 3.7

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 six months ended June 30, 2022 (in millions):

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, 2022 (in millions):

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

1 unchanged sentence

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

Other comprehensive income (loss) before reclassifications — ( 9.6 ) 12.9 3.3

Other comprehensive loss before reclassifications ( 18.3 ) ( 13.4 ) ( 62.8 ) ( 94.5 )

Net losses reclassified from accumulated other comprehensive loss 4.8 8.2 — 13.0

Other comprehensive income (loss), net of reclassification adjustments 3.4 ( 6.5 ) 12.9 9.8

Accumulated other comprehensive loss, June 30, 2022

Other comprehensive loss, net of reclassification adjustments ( 13.5 ) ( 5.2 ) ( 62.8 ) ( 81.5 )

Accumulated other comprehensive loss, September 30, 2022

$ ( 243.9 ) $ ( 5.6 ) $ ( 1,602.9 ) $ ( 1,852.4 )

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three months ended June 30, 2022 and 2021 (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 June 30, 2022 (1)

Three Months Ended June 30, 2021 (1)

Details about Accumulated Other Comprehensive Loss Components Three Months Ended September 30, 2022 (1)

Three Months Ended September 30, 2021 (1)

Net losses on foreign currency contracts $ 5.5 $ 1.5 Cost of goods sold

9 unchanged sentences

Reclassification net of tax $ 1.4 $ 2.6

Net losses reclassified from accumulated other comprehensive loss $ 5.7 $ 2.5

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the three months ended June 30, 2022 and 2021, respectively.

Net losses (gains) reclassified from accumulated other comprehensive loss $ 6.5 $ ( 2.4 )

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2022 and 2021, respectively.

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

3 unchanged sentences

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Six Months Ended June 30, 2022 (1)

Six Months Ended June 30, 2021 (1)

Details about Accumulated Other Comprehensive Loss Components Nine Months Ended September 30, 2022 (1)

Nine Months Ended September 30, 2021 (1)

Net losses on foreign currency contracts $ 8.2 $ 8.4 Cost of goods sold

10 unchanged sentences

Net losses reclassified from accumulated other comprehensive loss $ 13.0 $ 7.7

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2022 and 2021, respectively.

(1) Losses (gains) included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022 and 2021, respectively.

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

5 unchanged sentences

All shares received under the ASR agreement 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.

During the three and six months ended June 30, 2022, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of June 30, 2022, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 110.0 million, which has no expiration date.

During the three and nine months ended September 30, 2022, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of September 30, 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 variable dividend of $ 4.50 per common share that was paid during the second quarter of 2022.

1 unchanged sentence

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

As of June 30, 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.

The Company also pays the respective AGCO Finance entities a subsidized interest payment with respect to the accounts receivable sales agreements, calculated based upon LIBOR plus a

As of September 30, 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.

Notes to Condensed Consolidated Financial Statements - Continued

margin on any non-interest bearing accounts receivable outstanding and sold under the accounts receivable sales agreements.

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.

The Company also pays the respective AGCO Finance entities a subsidized interest payment with respect to the accounts receivable sales agreements, calculated based upon LIBOR plus a margin on any non-interest-bearing accounts receivable outstanding and sold under the accounts receivable sales agreements.

Following the phase out of LIBOR-denominated rates, the Company expects this funding to be based upon the interest rate charged by Rabobank to its affiliate, which, in turn, such affiliate then lends to the AGCO Finance entities plus an agreed-upon margin.

3 unchanged sentences

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

As of June 30, 2022 and December 31, 2021, the cash received from these arrangements was approximately $ 174.9 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 $ 10.2 million and $ 18.1 million, respectively, during the three and six months ended June 30, 2022.

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 $ 5.1 million and $ 9.7 million, respectively, during the three and six months ended June 30, 2021.

As of September 30, 2022 and December 31, 2021, the cash received from these arrangements was approximately $ 170.8 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 $ 20.4 million and $ 38.5 million, respectively, during the three and nine months ended September 30, 2022.

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.

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

1 unchanged sentence

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

As of June 30, 2022 and December 31, 2021, these finance joint ventures had approximately $ 50.7 million and $ 42.6 million, respectively, of outstanding accounts receivable associated with these arrangements.

As of September 30, 2022 and December 31, 2021, these finance joint ventures had approximately $ 45.8 million and $ 42.6 million, respectively, of outstanding accounts receivable associated with these arrangements.

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

4 unchanged sentences

PENSION AND POSTRETIREMENT BENEFIT PLANS

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and six months ended June 30, 2022 and 2021 are set forth below (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and nine months ended September 30, 2022 and 2021 are set forth below (in millions):

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

Pension benefits 2022 2021 2022 2021

7 unchanged sentences

Net periodic pension cost $ 4.7 $ 2.3 $ 14.6 $ 7.6

(1) During the six months ended June 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 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.

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

Notes to Condensed Consolidated Financial Statements - Continued

Three Months Ended June 30, Six Months Ended June 30,

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

Postretirement benefits 2022 2021 2022 2021

1 unchanged sentence

Interest cost 0.2 0.2 0.7 0.6

Amortization of net actuarial losses — 0.1 — 0.1

Amortization of prior service cost — 0.1 0.1 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 six months ended June 30, 2022 (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 nine months ended September 30, 2022 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

2 unchanged sentences

Amortization of prior service cost 0.2 0.1 0.1

Accumulated other comprehensive loss as of June 30, 2022 $ ( 297.8 ) $ ( 70.8 ) $ ( 227.0 )

During the six months ended June 30, 2022, the Company made approximately $ 18.9 million of contributions to its defined pension benefit plans.

Revision of prior service cost estimate ( 24.4 ) ( 6.1 ) ( 18.3 )

Accumulated other comprehensive loss as of September 30, 2022 $ ( 320.2 ) $ ( 76.3 ) $ ( 243.9 )

The Company’s defined benefit pension obligation has been reflected on the manner in which its defined benefit plans are being administered or expected to be administered in the future.

The obligation and resulting liability or asset is calculated employing both actuarial and legal assumptions.

These assumptions include, but are not limited to, future inflation, the return on pension assets, discount rates, life expectancy and potential salary increases.

There are also assumptions related to the manner in which individual benefit plan benefits are calculated, some of which are legal in nature and include, but are not limited to, member eligibility, years of service, and the uniformity of both guaranteed minimum pension benefits and member normal retirement ages for men and women.

Some of these assumptions also are subject to the outcome of certain legal cases, which are currently unknown.

In the event that any of these assumptions or the administration approach are proven to be different from the Company’s current interpretations and approach, there could be material increases or decreases in the Company’s defined benefit pension obligation and related amounts such as prior service cost and actuarial gains and losses, as well as the related amount and timing of future contributions to be paid by the Company.

During the three months ended September 30, 2022, the Company updated its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligation related to certain defined benefit plans and recorded a revision of its estimate of prior service cost of approximately $ 24.4 million.

During the nine months ended September 30, 2022, the Company made approximately $ 26.3 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 $ 34.2 million.

During the six months ended June 30, 2022, the Company made approximately $ 0.7 million of contributions to its postretirement health care and life insurance benefit plans.

During the nine months ended September 30, 2022, the Company made approximately $ 1.2 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 June 30, 2022 and December 31, 2021 are summarized below (in millions):

As of June 30, 2022

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 are summarized below (in millions):

As of September 30, 2022

Level 1 Level 2 Level 3 Total

6 unchanged sentences

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 June 30, 2022, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 480.6 million (or approximately $ 500.5 million as of June 30, 2022), compared to the carrying value of € 600.0 million (or approximately $ 624.8 million as of June 30, 2022).

At September 30, 2022, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 462.5 million (or approximately $ 452.0 million as of September 30, 2022), compared to the carrying value of € 600.0 million (or approximately $ 586.4 million as of September 30, 2022).

See Note 6 for additional information on the Company’s long-term debt.

6 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 six months ended June 30, 2022 and 2021 and assets as of June 30, 2022 and December 31, 2021 based on the Company’s reportable segments are as follows (in millions):

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

Segment results for the three and nine months ended September 30, 2022 and 2021 and assets as of September 30, 2022 and December 31, 2021 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 $ 910.5 $ 571.2 $ 1,390.1 $ 249.8 $ 3,121.6

6 unchanged sentences

Capital expenditures 10.5 8.9 55.6 3.1 78.1

Six Months Ended June 30, North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

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

Net sales $ 2,351.4 $ 1,446.8 $ 4,260.8 $ 693.5 $ 8,752.5

6 unchanged sentences

Capital expenditures 31.6 20.5 139.4 7.2 198.7

As of June 30, 2022 $ 1,683.1 $ 1,124.4 $ 2,635.2 $ 652.3 $ 6,095.0

As of September 30, 2022 $ 1,742.8 $ 1,197.8 $ 2,507.7 $ 624.5 $ 6,072.8

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

1 unchanged sentence

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

6 unchanged sentences

Consolidated income from operations $ 332.1 $ 251.9 $ 799.6 $ 737.4

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Segment assets $ 6,072.8 $ 5,210.1

10 unchanged sentences

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

At June 30, 2022, the Company has outstanding guarantees of indebtedness owed to related and third parties of approximately $ 27.1 million, primarily related to dealer and end-user financing of equipment.

At September 30, 2022, the Company has outstanding guarantees of indebtedness owed to related and third parties of approximately $ 27.9 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 June 30, 2022, the Company had accrued approximately $ 20.2 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

In addition, at September 30, 2022, the Company had accrued approximately $ 19.8 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under these guarantees is approximately $ 184.3 million.

Notes to Condensed Consolidated Financial Statements - Continued

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of June 30, 2022 and December 31, 2021 were as follows (in millions):

June 30, 2022 December 31, 2021

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2022 and December 31, 2021 were as follows (in millions):

September 30, 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 June 30, 2022, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,434.5 million.

The outstanding contracts as of June 30, 2022 range in maturity through December 2022.

At September 30, 2022, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,277.9 million.

The outstanding contracts as of September 30, 2022 range in maturity through December 2022.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 2.0 million that range in maturity through November 2022.

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 June 30, 2022, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 25.0 million).

The amount of the tax disallowance through September 30, 2022, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 24.4 million).

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

17 unchanged sentences

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

Significant changes in the balance of contract liabilities for the three and six months ended June 30, 2022 and 2021 were as follows (in millions):

Three Months Ended June 30,

Significant changes in the balance of contract liabilities for the three and nine months ended September 30, 2022 and 2021 were as follows (in millions):

Three Months Ended September 30,

Balance at beginning of period $ 217.7 $ 201.2

3 unchanged sentences

Foreign currency translation ( 12.0 ) ( 3.5 )

Balance at June 30 $ 217.7 $ 201.2

Six Months Ended June 30,

Balance at September 30 $ 209.4 $ 209.4

Nine Months Ended September 30,

Balance at beginning of period $ 226.2 $ 172.0

3 unchanged sentences

Foreign currency translation ( 27.5 ) ( 4.3 )

Balance at June 30 $ 217.7 $ 201.2

Balance at September 30 $ 209.4 $ 209.4

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 six months ended June 30, 2022, we recognized approximately $ 28.3 million and $ 52.4 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2022.

During the three and six months ended June 30, 2021, we recognized approximately $ 17.4 million and $ 43.2 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, 2022, the Company recognized approximately $ 22.0 million and $ 74.2 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2022.

During the three and nine months ended September 30, 2021, the Company recognized approximately $ 18.7 million and $ 61.9 million, respectively, 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 June 30, 2022 are $ 42.3 million for the remainder of 2022, $ 68.8 million in 2023, $ 44.4 million in 2024, $ 21.7 million in 2025 and $ 13.0 million thereafter, and relate primarily to extended warranty contracts.

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

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2022 are $ 26.4 million for the remainder of 2022, $ 68.7 million in 2023, $ 47.9 million in 2024, $ 23.9 million in 2025 and $ 15.9 million thereafter, and relate primarily to extended warranty contracts.

Notes to Condensed Consolidated Financial Statements - Continued

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.

Disaggregated Revenue

Net sales for the three months ended June 30, 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)

Net sales for the three months ended September 30, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America Europe/Middle East (1)

Asia/Pacific/Africa (1)

Consolidated (1)

Primary geographical markets:

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the three months ended June 30, 2021 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America (1)

Europe/Middle East (1)

Asia/Pacific/Africa Consolidated (1)

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)

Primary geographical markets:

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the six months ended June 30, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the nine months ended September 30, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America Europe/Middle East (1)

Asia/Pacific/Africa Consolidated

Asia/Pacific/Africa (1)

Consolidated (1)

Primary geographical markets:

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the six months ended June 30, 2021 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America Europe/Middle East (1)

Asia/Pacific/Africa Consolidated (1)

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:

21 unchanged sentences

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