What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-02-25 · 377 added, 352 removed, 1802 unchanged (29% of the section changed)

3 unchanged sentences

Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

Consolidated Balance Sheets as of December 31, 2022 and 2021

9 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 1, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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Auditor judgment was required to evaluate certain assumptions which had a higher degree of measurement uncertainty.

Significant assumptions included estimated incentive rates,

which were the estimated rates at which programs were applied to eligible products, and estimated achievement by dealers of specified cumulative targeted purchase levels.

Significant assumptions included estimated incentive rates, which were the

estimated rates at which programs were applied to eligible products, and estimated achievement by dealers of specified cumulative targeted purchase levels.

The following are the primary procedures we performed to address this critical audit matter.

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We involved tax professionals with specialized skills and knowledge, who assisted in:

• inspecting correspondence and assessments from the taxing authorities

• evaluating the Company’s interpretation and application of tax laws

• developing an expectation of the Company’s tax positions and comparing the results to the Company’s assessment

Assessment of goodwill impairment for certain reporting units

Assessment of goodwill impairment for a certain reporting unit

As discussed in Note 1 to the consolidated financial statements, the Company evaluates goodwill for impairment annually as of October 1 and when events or circumstances indicate that fair value of a reporting unit may be below its carrying value.

2 unchanged sentences

The fair values of the reporting units are determined based on a combination of valuation techniques, including an income approach and guideline public company method.

Based on the Company’s analysis, the Company determined that the fair values of certain reporting units were in excess of the carrying values and therefore did not record any goodwill impairment for these reporting units.

We identified the assessment of goodwill impairment for certain reporting units as a critical audit matter because a high degree of subjective auditor judgment was required to evaluate the fair value of the reporting units.

Based on the Company’s analysis, the Company determined that the fair value of a certain reporting unit was in excess of the carrying value and therefore did not record any goodwill impairment for this reporting unit.

We identified the assessment of goodwill impairment for a certain reporting unit as a critical audit matter because a high degree of subjective auditor judgment was required to evaluate the fair value of the reporting unit.

The fair value model used the following significant assumptions for which there was limited observable market information:

forecasted revenue growth and discount rates.

The determined fair values were sensitive to changes in these significant assumptions.

forecasted revenue growth, forecasted gross margin, and discount rate.

The determined fair value was sensitive to changes in these significant assumptions.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment process, including controls over the significant assumptions.

We performed sensitivity analyses over the significant assumptions to assess their impact on the Company’s fair value determination.

We compared the Company’s forecasted revenue growth used in the valuation model against underlying business strategies and growth plans.

We compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to forecast.

We compared the Company’s forecasted revenue growth and gross margin used in the valuation model against underlying business strategies and growth plans.

We compared the Company’s historical revenue and gross margin forecasts to actual results to assess the Company’s ability to forecast.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

• comparing the Company’s discount rate inputs to publicly available information for comparable entities to test the selected discount rate

• recomputing the estimate of fair value for the reporting units using the Company’s significant assumptions and comparing the result to the Company’s fair value estimate

• performing sensitivity analyses over the significant assumptions to assess the impact on the Company's fair value determination

• recomputing the estimate of fair value for the reporting unit using the Company’s significant assumptions and comparing the result to the Company’s fair value estimate

We have served as the Company’s auditor since 2002.

Atlanta, Georgia

February 25, 2022

March 1, 2023

AGCO CORPORATION

21 unchanged sentences

Net income 874.7 901.5 419.8

Net (income) loss attributable to noncontrolling interests ( 4.5 ) 7.3 2.4

Net loss (income) attributable to noncontrolling interests 14.9 ( 4.5 ) 7.3

Net income attributable to AGCO Corporation and subsidiaries $ 889.6 $ 897.0 $ 427.1

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Net income $ 874.7 $ 901.5 $ 419.8

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

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

Defined benefit pension plans, net of taxes:

Prior service credit (cost) arising during the year 10.0 0.3 ( 4.7 )

Net loss recognized due to settlement 0.1 0.3 0.6

Prior service (cost) credit arising during the year ( 19.1 ) 10.0 0.3

Net (gain) loss recognized due to settlement ( 0.4 ) 0.1 0.3

Net loss recognized due to curtailment — 6.3 —

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Net changes in fair value of derivatives ( 14.6 ) 5.1 5.1

Net gains reclassified from accumulated other comprehensive loss into income ( 3.0 ) ( 6.3 ) ( 0.1 )

Net losses (gains) reclassified from accumulated other comprehensive loss into income 14.1 ( 3.0 ) ( 6.3 )

Foreign currency translation adjustments ( 30.0 ) ( 45.5 ) ( 201.8 )

Other comprehensive gain (loss), net of reclassification adjustments 39.5 ( 219.9 ) ( 37.3 )

Other comprehensive (loss) gain, net of reclassification adjustments ( 31.3 ) 39.5 ( 219.9 )

Comprehensive income 843.4 941.0 199.9

Comprehensive (income) loss attributable to noncontrolling interests ( 4.1 ) 11.6 ( 0.1 )

Comprehensive loss (income) attributable to noncontrolling interests 14.0 ( 4.1 ) 11.6

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 857.4 $ 936.9 $ 211.5

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Payment of dividends to shareholders — — — $ ( 48.0 ) — — — — — ( 48.0 )

Issuance of restricted stock 14,105 — 1.0 — — — — — — 1.0

Issuance of non-employee director restricted stock 19,862 — 1.1 $ — — — — — — 1.1

Issuance of stock awards 374,212 — ( 7.3 ) $ ( 8.4 ) — — — — — ( 15.7 )

6 unchanged sentences

Defined benefit pension plans, net of taxes:

Prior service cost arising during year — — — — ( 4.7 ) — — ( 4.7 ) — ( 4.7 )

Prior service credit arising during year — — — $ — 0.3 — — 0.3 — 0.3

Net loss recognized due to settlement — — — $ — 0.3 — — 0.3 — 0.3

5 unchanged sentences

Balance, December 31, 2020 74,962,231 0.8 30.9 $ 4,759.1 ( 313.3 ) ( 1,495.0 ) ( 2.5 ) ( 1,810.8 ) 38.0 3,018.0

Net income (loss) — — — 427.1 — — — — ( 7.3 ) 419.8

Net income — — — 897.0 — — — — 4.5 901.5

Payment of dividends to shareholders — — — ( 358.5 ) — — — — — ( 358.5 )

Issuance of restricted stock 19,862 — 1.1 — — — — — — 1.1

Issuance of non-employee director restricted stock 8,912 — 1.3 — — — — — — 1.3

Issuance of stock awards 362,034 — ( 29.5 ) — — — — — — ( 29.5 )

1 unchanged sentence

Stock compensation — — 26.1 — — — — — — 26.1

Investment by noncontrolling interests — — — — — — — — 0.2 0.2

Distribution to noncontrolling interest — — — — — — — — ( 3.6 ) ( 3.6 )

Changes in noncontrolling interest — — — — — — — — ( 0.5 ) ( 0.5 )

Sale of noncontrolling interests — — — — — — — — ( 10.6 ) ( 10.6 )

Purchases and retirement of common stock ( 952,204 ) ( 0.1 ) ( 19.5 ) ( 115.4 ) — — — — — ( 135.0 )

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Net loss recognized due to settlement — — — — 0.1 — — 0.1 — 0.1

Net actuarial loss arising during year — — — — ( 32.7 ) — — ( 32.7 ) — ( 32.7 )

Net loss recognized due to curtailment — — — — 6.3 — — 6.3 — 6.3

Net actuarial gain arising during year — — — — 53.6 — — 53.6 — 53.6

Amortization of prior service cost included in net periodic pension cost — — — — 0.6 — — 0.6 — 0.6

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Balance, December 31, 2021 74,441,312 0.7 3.9 5,182.2 ( 230.4 ) ( 1,540.1 ) ( 0.4 ) ( 1,770.9 ) 27.9 3,443.8

Net income — — — 897.0 — — — — 4.5 901.5

Net income (loss) — — — 889.6 — — — — ( 14.9 ) 874.7

Payment of dividends to shareholders — — — ( 404.3 ) — — — — — ( 404.3 )

Issuance of restricted stock 8,912 — 1.3 — — — — — — 1.3

Issuance of non-employee director restricted stock 10,301 — 1.5 — — — — — — 1.5

Issuance of stock awards 250,719 — ( 6.5 ) ( 12.9 ) — — — — — ( 19.4 )

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Stock compensation — — 32.5 — — — — — — 32.5

Distribution to noncontrolling interest — — — — — — — — ( 3.6 ) ( 3.6 )

Sale of noncontrolling interests — — — — — — — — ( 10.6 ) ( 10.6 )

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

Investment by noncontrolling interests — — — — — — — — 0.1 0.1

Purchases and retirement of common stock ( 113,824 ) — — — — — — — — —

1 unchanged sentence

Prior service credit arising during year — — — — ( 19.1 ) — — ( 19.1 ) — ( 19.1 )

Net loss recognized due to settlement — — — — 0.1 — — 0.1 — 0.1

Net loss recognized due to curtailment — — — — 6.3 — — 6.3 — 6.3

Net gain recognized due to settlement — — — — ( 0.4 ) — — ( 0.4 ) — ( 0.4 )

Net actuarial gain arising during year — — — — 12.3 — — 12.3 — 12.3

Amortization of prior service cost included in net periodic pension cost — — — — 0.6 — — 0.6 — 0.6

Amortization of net actuarial losses included in net periodic pension cost — — — — 6.4 — — 6.4 — 6.4

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Payment of debt issuance costs ( 3.6 ) ( 3.8 ) ( 1.4 )

(Distributions to) investments by noncontrolling interests, net ( 3.5 ) ( 3.1 ) 1.6

Distributions to noncontrolling interests, net ( 11.5 ) ( 3.5 ) ( 3.1 )

Net cash (used in) provided by financing activities ( 407.0 ) ( 539.5 ) 22.7

9 unchanged sentences

The Company sells a full range of agricultural equipment, including tractors, combines, hay tools, sprayers, forage equipment, seeding and tillage equipment, implements, and grain storage and protein production systems.

The Company’s products are widely recognized in the agricultural equipment industry and are marketed under a number of well-known brand names including:

Challenger ® , Fendt ® , GSI ® , Massey Ferguson ® and Valtra ® .

The Company’s products are widely recognized in the agricultural equipment industry and are marketed under a number of well-known brand names including Fendt ® , GSI ® , Massey Ferguson ® , Precision Planting ® and Valtra ® , supported by our FUSE ® precision agriculture solutions.

The Company distributes most of its products through a combination of approximately 3,100 independent dealers and distributors as well as the Company utilizes associates and licensees to provide a distribution channel for its products.

In addition, the Company provides retail financing through its finance joint ventures with CoöperatieveRabobank U.A., or “Rabobank.”

In addition, the Company provides retail financing through its finance joint ventures with Coöperatieve Rabobank U.A., or “Rabobank.”

Basis of Presentation and Consolidation

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Actual results could differ from those estimates.

The estimates made by management primarily relate to accounts and notes receivable, inventories, deferred income tax valuation allowances, uncertain tax positions, goodwill and other identifiable intangible assets, and certain accrued liabilities, principally relating to reserves for volume discounts and sales incentives, warranty obligations, product liability and workers’ compensation obligations, and pensions and postretirement benefits.

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

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

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

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

In the event economic conditions were to deteriorate, the Company and its finance joint ventures may not collect accounts receivable at expected levels, and the operating results of its finance joint ventures may be negatively impacted, thus negatively impacting the Company's results of operations and financial condition.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Foreign Currency Translation

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dollar effective July 1, 2018.

The Company is subject to the risk of the imposition of limitations by governments on international transfers of funds.

For example, in recent years, the Argentine government has substantially limited the ability of companies to transfer funds out of Argentina.

As a consequence of these limitations, the spread between the official government exchange rate and the

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

exchange rates resulting implicitly from certain capital market operations, usually effected to obtain U.S.

dollars, has broadened significantly.

The net monetary assets of the Company’s operations in Argentina denominated in pesos at the official government rate were approximately 4.1 billion (or approximately $ 23.0 million) as of December 31, 2022, inclusive of approximately 6.8 billion pesos (or approximately $ 38.1 million) in cash and cash equivalents.

In addition, the Company has an obligation to reimburse AGCO Capital Argentina S.A., one of its finance joint ventures with Rabobank, up to $ 10 million under a guarantee related to the ability of AGCO Capital Argentina S.A.

to transfer funds out of Argentina.

The finance joint venture in Argentina has net monetary assets denominated in pesos at the official government rate of approximately 4.1 billion (or approximately $ 22.9 million) as of December 31, 2022, of which a majority is cash and cash equivalents.

Future impairments and charges are possible in connection with these exposures.

Cash, Cash Equivalents and Restricted Cash

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The Company’s reportable segments are not its reporting units.

Goodwill is evaluated annually as of October 1 for impairment using a qualitative assessment or a quantitative one-step assessment.

Goodwill is evaluated annually as of October 1 st for impairment using a qualitative assessment or a quantitative one-step assessment.

If the Company elects to perform a qualitative assessment and determines the fair value of its reporting units more likely than not exceed the carrying value of their net assets, no further evaluation is necessary.

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Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

The results of our goodwill and long-lived assets impairment analyses conducted as of October 1, 2021 indicated that no indicators of impairment existed and no reduction in the carrying amount of goodwill and long-lived assets was required.

The results of our goodwill and long-lived assets impairment analyses conducted as of October 1, 2022, 2021 and 2020 indicated that no indicators of impairment existed and no reduction in the carrying amount of goodwill and long-lived assets was required.

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

Based on macroeconomic conditions throughout 2020, the Company assessed its goodwill and other intangible assets for indications of impairment, and 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 equipment joint venture.

As a result, the entire goodwill balance of this reporting unit was impaired, and during the three months ended June 30,

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2020, the Company recorded a non-cash impairment charge of approximately $ 20.0 million as “Impairment charges” within the Company’s Consolidated Statements of Operations, with an offsetting benefit of approximately $ 10.0 million included within “Net (income) loss attributable to noncontrolling interests.” During the three months ended June 30, 2021, the Company sold its 50 % interest in the joint venture.

The Company’s goodwill impairment analysis conducted as of October 1, 2020 indicated that no other indicators of impairment existed and no reduction in the carrying amount of goodwill and long-lived assets was required related to the Company’s other reporting units.

The Company’s goodwill impairment analysis conducted as of October 1, 2019, indicated that the carrying value of the net assets of the Company’s grain storage and protein production systems operations in Europe/Middle East was in excess of the fair value of the reporting unit, and therefore, the Company recorded a non-cash impairment charge of approximately $ 173.6 million within “Impairment charges” in the Company’s Consolidated Statements of Operations.

During the three months ended December 31, 2019, the Company also recorded a non-cash impairment charge of approximately $ 3.0 million within “Impairment charges” in the Company’s Consolidated Statements of Operations.

The impairment charge related to certain long-lived assets associated with the Company’s grain storage and protein production systems operations within North America, due to the discontinuation of a certain brand name and related product, and customers.

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 Consolidated Statements of Operations, with an offsetting benefit of approximately $ 10.0 million included within “Net (income) loss attributable to noncontrolling interests.” During the three months ended June 30, 2021, the Company sold its 50 % interest in the joint venture.

The Company’s accumulated goodwill impairment is approximately $ 354.1 million related to impairment charges the Company recorded during 2019, 2012 and 2006 pertaining to its grain storage and protein production systems business in Europe/Middle East, its Chinese harvesting reporting unit and its former sprayer reporting unit, respectively.

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

Acquisitions 7.2 — — — 7.2

Impairment charge ( 20.0 ) — — — ( 20.0 )

Sale of a joint venture ( 5.1 ) — — — ( 5.1 )

Foreign currency translation 0.2 ( 24.7 ) 38.0 7.5 21.0

1 unchanged sentence

Acquisition 16.2 — 0.6 — 16.8

Impairment charge ( 20.0 ) — — — ( 20.0 )

Foreign currency translation — ( 5.8 ) ( 32.4 ) ( 4.3 ) ( 42.5 )

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Balance as of December 31, 2022 $ 667.3 $ 86.0 $ 444.3 $ 113.2 $ 1,310.8

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

External-use software, which is or will be marketed for sale, was approximately $ 3.4 million as of December 31, 2022 and classified within “Intangible assets, net.” Amortization of external-use software has not started as the product is still being developed.

The acquired intangible assets have a weighted average useful life as follows:

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The Valtra brand is currently sold in approximately 60 countries around the world.

Both the Massey Ferguson brand and the Valtra brand are primary product lines of the Company’s business, and the Company plans to use these trademarks for an indefinite period of time.

Both the Massey

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Ferguson brand and the Valtra brand are primary product lines of the Company’s business, and the Company plans to use these trademarks for an indefinite period of time.

The Company plans to continue to make investments in product development to enhance the value of these brands into the future.

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The Massey Ferguson and Valtra trademark registrations can be renewed at a nominal cost in the countries in which the Company operates.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the carrying amount of acquired intangible assets during 2022 and 2021 are summarized as follows (in millions):

Trademarks and

Gross Carrying Amounts Trademarks and

Trade Names Customer

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Balance as of December 31, 2020 $ 195.1 $ 580.6 $ 157.2 $ 6.8 $ 939.7

Acquisitions 0.7 3.2 6.1 — 10.0

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

Foreign currency translation ( 5.5 ) ( 10.8 ) ( 6.3 ) 0.2 ( 22.4 )

1 unchanged sentence

Acquisitions 7.1 15.4 15.4 — 37.9

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

Foreign currency translation ( 4.3 ) ( 9.5 ) ( 4.7 ) ( 0.5 ) ( 19.0 )

4 unchanged sentences

Technology Land Use

Accumulated amortization:

Balance as of December 31, 2020 $ 85.3 $ 384.7 $ 102.4 $ 1.1 $ 573.5

Amortization expense 10.8 37.4 12.5 0.2 60.9

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

Foreign currency translation ( 1.7 ) ( 8.0 ) ( 5.0 ) 0.2 ( 14.5 )

1 unchanged sentence

Amortization expense 11.7 37.9 10.4 0.1 60.1

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

Foreign currency translation ( 1.5 ) ( 6.8 ) ( 3.6 ) — ( 11.9 )

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Balance as of December 31, 2022 $ 84.8

During the year ended December 31, 2021, the Company acquired approximately $ 16.3 million of functional intellectual property licenses associated with various component technology related to the Company’s products.

The Company is amortizing these licenses over a period of five years , and recorded amortization expense of approximately $ 0.2 million during 2021, resulting in a remaining unamortized amount of approximately $ 16.1 million as of December 31, 2021, reflected within “Other assets” in the Company's Consolidated Balance Sheets.

During the years ended December 31, 2022 and December 31, 2021, the Company acquired approximately $ 2.0 million and $ 16.3 million, respectively, of functional intellectual property licenses associated with various component technology related to the Company’s products.

The Company is amortizing these licenses over a period of five years , and recorded amortization expense of approximately $ 3.0 million during 2022 within “Engineering expenses” and $ 0.2 million during 2021 within “Amortization of intangibles” in the Company's Consolidated Statements of Operations, resulting in a remaining unamortized amount of approximately $ 15.1 million as of December 31, 2022, reflected within “Other assets” in the Company's Consolidated Balance Sheets.

AGCO CORPORATION

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All incentive programs are recorded and presented as a reduction of revenue, due to the fact that the Company does not receive a distinct good or service in exchange for the consideration provided.

Dealers or distributors may not return equipment or replacement parts while its contract with the Company is in force, except for under established promotional and annual replacement parts return programs.

Dealers or distributors may not return equipment or replacement parts while their contract with the Company is in force, except for under established promotional and annual replacement parts return programs.

At the time of sale, the Company estimates the amount of returns based on the terms of promotional and annual return programs and anticipated returns in the future.

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Total stock compensation expense $ 34.0 $ 27.6 $ 37.9

The Company recognizes the effect of award forfeitures as an adjustment to stock compensation expense in the period in which the forfeiture occurs.

Research and Development Expenses

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Shipping and handling costs are accounted for as fulfillment costs and are expensed and accrued at the time revenue is recognized within “Cost of goods sold,” with the exception of certain handling costs included in “Selling, general and administrative expenses” in the amount of $ 48.4 million, $ 43.6 million and $ 38.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Interest Expense, Net

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$ 13.0 $ 6.7 $ 15.0

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Income taxes are accounted for under the asset and liability method.

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Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 11.87 $ 11.85 $ 5.65

There were no SSARs outstanding for the year ended December 31, 2021 that had an antidilutive impact.

SSARs to purchase approximately 0.3 million shares and 0.2 million shares of the Company’s common stock for the years ended December 31, 2020 and 2019, respectively, were outstanding but not included in the calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

AGCO CORPORATION

8 unchanged sentences

Defined benefit pension plans $ ( 2.0 ) $ 1.2 $ ( 0.8 ) $ —

Net gain on derivatives 2.5 ( 0.4 ) 2.1 —

Net loss on derivatives ( 0.5 ) — ( 0.5 ) —

Foreign currency translation adjustments ( 30.9 ) — ( 30.9 ) 0.9

5 unchanged sentences

Defined benefit pension plans $ 110.1 $ ( 27.2 ) $ 82.9 $ —

Net loss on derivatives ( 1.5 ) 0.3 ( 1.2 ) —

Net gain on derivatives 2.5 ( 0.4 ) 2.1 —

Foreign currency translation adjustments ( 45.1 ) — ( 45.1 ) ( 0.4 )

Total components of other comprehensive loss $ ( 218.3 ) $ 2.7 $ ( 215.6 ) $ ( 4.3 )

Total components of other comprehensive income $ 67.5 $ ( 27.6 ) $ 39.9 $ ( 0.4 )

AGCO Corporation and Subsidiaries Noncontrolling Interests

24 unchanged sentences

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848).” The amendments in this update provide optional expedients and exceptions for applying Generally Accepted Accounting Principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

In January 2021, the FASB issued ASU 2021-01, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

The amendments in these updates are effective for all entities as of March 12, 2020 through December 31, 2022.

The Company has adopted this guidance and the adoption did not have a material impact on the Company's results of operations, financial condition and cash flows.

The Company adopted the following pronouncements, none of which had 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 2020-01 – “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” was adopted as of January 1, 2021.

• ASU 2020-08 – “Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs” was adopted as of January 1, 2021.

New Accounting Pronouncements to be Adopted

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

In 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 will likely impact the Company’s “Investment in affiliates” and “Equity in net earnings of affiliates.” The Company’s finance joint ventures are currently 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:

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;

1 unchanged sentence

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.

This guidance was 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 results of operations, financial condition and cash flows.

Additionally, the Company will adopt the following pronouncement, 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”

The Company receives government assistance generally in the form of research and development grants and employee payroll assistance, among others.

The Company’s policy is to account for government assistance using guidance analogous to government grants found in International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance .

The Company has adopted this guidance and the adoption did not have a material impact on the Company’s results of operations, financial condition and cash flows and was deemed not material for annual disclosure as of December 31, 2022.

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 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, 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, impacts the results of operations and financial condition of the Company’s finance joint ventures.

As such, adoption of the standard by the Company’s finance joint ventures on January 1, 2023 impacted the Company’s “Investments in affiliates” and “Retained earnings” by an immaterial amount.

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 adoption of ASU 2022-04 will result in disclosure of the Company’s supplier financing programs.

The Company has adopted ASU 2021-08, “Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” effective for fiscal years beginning after December 15, 2022, which did not have a material impact on the Company’s results of operations, financial condition or cash flows but is dependent on future acquisitions.

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

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

On January 1, 2022 the Company acquired Appareo Systems, LLC (“Appareo”) for approximately $ 62.1 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 Consolidated Statements of

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On January 01, 2022 the Company acquired Appareo Systems, LLC (“Appareo”) for approximately $ 61.4 million, net of cash acquired of approximately $ 0.5 million, as well as indebtedness payable to the Company's former 50 % joint venture with Appareo of approximately $ 0.9 million.

Appareo is headquartered in Fargo, North Dakota and specializes in the research, development, design, and manufacture of tangible technology focused on communication, monitoring, sensing, tracking and controlling devices and systems used in the agricultural and aviation industries as well as other off-road businesses.

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.

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 recorded approximately $ 25.8 million of goodwill associated with the acquisition.

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

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

Intangible Asset

Amount Weighted-Average Useful Life

Customer relationships $ 15.4 10 years

Technology 15.4 8 years

Trademarks 5.7 10 years

Non-competition agreements 1.4 5 years

On December 1, 2021, the Company acquired Creatives Sites Media, Inc.

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The Company recorded approximately $ 5.7 million of goodwill associated with the acquisition.

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

The associated goodwill was included in the Company’s North American geographical reportable segment.

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

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The Company recorded approximately € 4.4 million (or approximately $ 5.2 million) of technology and approximately € 1.8 million (or approximately $ 2.2 million) of goodwill associated with the acquisition.

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

The associated goodwill was included in the Company’s North American and Europe/Middle East geographical reportable segments.

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

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

The associated goodwill was included in the Company’s North American geographical reportable segment.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The acquired identifiable intangible assets of Headsight and Faromatics as of the date of their respective acquisitions during 2021 are summarized in the following table (in millions):

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Trademarks 0.7 7 years

The Company allocated the purchase price of the assets acquired and liabilities assumed of the CSM, Faromatics and Headsight acquisitions based on estimates of their fair values of their respective acquisition dates.

The acquired net assets related to these acquisitions generally consisted of accounts receivable, inventories, lease right-of-use assets and liabilities, property, plant and equipment, accounts payable and accrued expenses.

Proforma financial information related to these acquisitions was not material to the Company's results of operations.

On September 10, 2020, the Company acquired 151 Research, Inc.

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In addition, the Company agreed to further contingent consideration related to the acquisition and recorded a liability of approximately $ 4.4 million to reflect estimated achievement of agreed-upon targets as of the acquisition date.

During 2021, the Company paid approximately $ 0.5 million of contingent consideration and updated the estimated achievement of related agreed-upon targets, resulting in a reversal of approximately $ 3.3 million of the liability.

The remaining $ 0.8 million of contingent consideration as of December 31, 2021, included approximately $ 0.2 million of positive foreign currency translation impacts.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company allocated the purchase price of the assets acquired and liabilities assumed of the JCA, Appareo, CSM, Faromatics and Headsight acquisitions based on estimates of their fair values of their respective acquisition dates.

The acquired net assets related to these acquisitions generally consisted of accounts receivable, inventories, other current and noncurrent assets, lease right-of-use assets and liabilities, property, plant and equipment, assets held for sale, identifiable intangibles assets, goodwill, accounts payable, accrued expenses and other current and noncurrent liabilities and deferred tax assets and liabilities.

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

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

Restructuring Expenses and Impairment Charges

Restructuring Expenses

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During 2022, the Company recorded severance and related costs associated with these rationalizations in connection with the termination of approximately 105 employees.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The components of the restructuring expenses are summarized as follows (in millions):

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2022 provision 6.9 — — — — 6.9

Non-cash expense — — ( 0.2 ) — — ( 0.2 )

Cash expense 18.4 — — 1.5 — 19.9

2022 provision reversal ( 0.8 ) — — — — ( 0.8 )

5 unchanged sentences

The Company recorded a loss of approximately $ 2.1 million associated with the sale, which was reflected 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 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 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 Consolidated Statements of Operations, with an offsetting benefit of approximately $ 12.2 million included within “Net loss (income) attributable to noncontrolling interests.” The Company sold its interest in its Russian distribution joint venture during the three months ended December 31, 2022.

Foreign currency translation impacts since inception of the Russian joint venture previously recognized within “Accumulated other comprehensive loss” were therefore recorded within “Other expense, net” on the Company’s Consolidated Statements of Operations during the three months ended December 31, 2022.

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 Consolidated Statements of Operations.

The Russian finance joint venture was sold during the three months ended December 31, 2022.

AGCO CORPORATION

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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 receivables 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, and such affiliate then lends to the AGCO Finance entities plus an agreed-upon margin.

The Company also pays the respective AGCO Finance entities a subsidized interest payment with respect to the accounts receivable sales agreements, calculated based upon the interest rate charged by Rabobank to its affiliate, and such affiliate then lends to the AGCO Finance entities plus an agreed-upon margin.

These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s Consolidated Statements of Operations.

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

In certain foreign countries, the Company invoices its finance joint ventures directly and the finance joint ventures retain a form of title to the goods delivered to dealers until the dealer makes payment so that the finance joint ventures can recover the goods in the event of dealer or end customer default on payment.

This occurs as the laws of some foreign countries do not provide for a seller’s retention of a security interest in goods in the same manner as established in the United States Uniform Commercial Code.

The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment.

The dealer or distributor may not return equipment or replacement parts to the Company while its contract with the finance joint venture is in force, and can only return the equipment to the retail finance joint venture with penalties that would generally not make it economically beneficial to do so.

Investments in Affiliates

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AGCO has a 49 % interest in the Company’s finance joint ventures (Note 14).

The Company’s manufacturing joint ventures consist of Groupement International De Mecanique Agricole SA (“GIMA”) (a joint venture with a third-party manufacturer to purchase, design and manufacture components for agricultural equipment in France) and a joint venture with a third-party manufacturer to manufacture protein production equipment in China.

The other joint ventures represent investments in farm equipment manufacturers, an electronic and software system manufacturer, precision agriculture technology providers, distributors and licensees.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The other joint ventures represent investments in farm equipment manufacturers, an electronic and software system manufacturer, precision agriculture technology providers, distributors and licensees.

The Company’s equity in net earnings of affiliates for the years ended December 31, 2022, 2021 and 2020 were as follows (in millions):

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The portion of the Company’s retained earnings balance that represents undistributed retained earnings of equity method investees was approximately $ 401.9 million and $ 365.6 million as of December 31, 2022 and 2021, respectively.

During 2021, the Company received dividends of approximately $ 84.4 million from certain finance joint ventures.

Approximately $ 22.7 million of these dividends were a return of investment in excess of earnings related to a certain finance joint venture.

The Company received dividends from certain finance joint ventures of approximately $ 27.0 million and $ 84.4 million during 2022 and 2021, respectively.

Approximately $ 5.7 million and $ 22.7 million of these dividends were a return of investment in excess of earnings related to a certain finance joint venture during 2022 and 2021, respectively, and were included within “Sale of, distributions from (investments in) unconsolidated affiliates, net” within the Company’s Consolidated Statements of Cash Flows.

In addition, during the year ended December 31, 2022, the Company recorded a write-down of the investment in its Russian finance joint venture of approximately $ 4.8 million, reflected within “Equity in net earnings of affiliates” in the Consolidated Statements of Operations.

The Russian finance joint venture was sold during the three months ended December 31, 2022.

AGCO CORPORATION

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Improvements in income in the United States and Brazil during 2020 and 2021, along with updated future projected income levels, supported the reversal of both valuation allowances during those respective periods in 2021.

During the three months ended September 30, 2019, the Company recorded a non-cash deferred income tax charge of approximately $ 53.7 million to establish a valuation allowance against its Brazilian net deferred income tax assets.

Swiss tax reform was enacted during 2019 and eliminated certain preferential tax items as well as implemented new tax rates at both the federal and cantonal levels.

During the three months ended December 31, 2019, the Company recognized a one-time income tax gain of approximately $ 21.8 million associated with the changing of Swiss federal and cantonal tax rates as well as recognition of a deferred tax asset associated with the estimated value of a tax basis step-up of the Company’s Swiss subsidiary’s assets.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A reconciliation of income taxes computed at the United States federal statutory income tax rate (21% for 2022, 2021 and 2020) to the provision for income taxes reflected in the Company’s Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 is as follows (in millions):

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Provision for income taxes at United States federal statutory rate (1)

$ 232.5 $ 198.3 $ 118.0

State and local income taxes, net of federal income tax effects (1)

( 2.9 ) 2.2 ( 3.5 )

Taxes on foreign income which differ from the United States statutory rate 43.6 16.2 13.9

3 unchanged sentences

Research and development tax credits ( 6.9 ) ( 7.4 ) ( 9.0 )

Impacts related to changes in tax laws — — ( 21.8 )

Other 4.3 ( 0.3 ) 1.4

$ 296.6 $ 108.4 $ 187.7

____________________________________

(1)There were no impacts related to changes in tax laws that impacted the Company in 2022, 2021 and 2020.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The significant components of the deferred tax assets and liabilities at December 31, 2022 and 2021 were as follows (in millions):

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Total deferred tax liabilities 137.4 192.0

Net deferred tax assets (liabilities) $ 52.4 $ ( 34.8 )

Net deferred tax assets $ 116.5 $ 52.4

Amounts recognized in Consolidated Balance Sheets:

2 unchanged sentences

$ 116.5 $ 52.4

As reflected in the preceding table, the Company recorded a net deferred tax asset of $ 52.4 million as of December 31, 2021 and a net deferred tax liability of $ 34.8 million as of December 31, 2020, and had a valuation allowance against its gross deferred tax assets of approximately $ 47.4 million and $ 181.0 million as of December 31, 2021 and 2020, respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As reflected in the preceding table, the Company recorded a net deferred tax asset of $ 116.5 million and $ 52.4 million as of December 31, 2022 and 2021, respectively, and had a valuation allowance against its gross deferred tax assets of approximately $ 47.3 million and $ 47.4 million as of December 31, 2022 and 2021, respectively.

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

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The Company recognizes income tax benefits from uncertain tax positions only when there is a more than 50% likelihood that the tax positions will be sustained upon examination by the taxing authorities based on the technical merits of the positions.

At December 31, 2021 and 2020, the Company had $ 246.4 million and $ 227.9 million, respectively, of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

At December 31, 2022 and 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.

At December 31, 2022 and 2021, the Company had

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

approximately $ 274.1 million and $ 196.7 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 2.8 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 Consolidated Balance Sheets.

The Company accrued approximately $ 6.0 million and $ 4.8 million of interest and penalties related to unrecognized tax benefits in its provision for income taxes during 2022 and 2021, respectively.

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Gross unrecognized income tax benefits at the end of the year $ 281.7 $ 246.4

At December 31, 2022 and 2021, the Company had $ 281.7 million and $ 246.4 million, respectively, of unrecognized income tax benefits, which would affect the Company’s effective tax rate if recognized.

The reconciliation of gross unrecognized income tax benefits above for 2022 and 2021 excludes certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 74.0 million and $ 70.2 million, respectively.

The change in certain indirect favorable effects between 2021 and 2020 includes approximately $ 9.9 million related to additions and reductions for tax positions of current and prior years, changes in judgments and lapses of statutes of limitations.

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

The change in certain indirect favorable effects between 2022 and 2021 includes approximately $ 22.4 million and $ 3.8 million, respectively, related to additions and reductions for tax positions of current and prior years, changes in judgments and lapses of statutes of limitations.

During 2022, the Company made the determination that it will be able to utilize approximately $ 15.7 million of indirect favorable benefits in the United States related to the settlement of a foreign audit examination.

In addition, the gross unrecognized income tax benefits as of December 31, 2022 and 2021 exclude certain deposits made in a foreign jurisdiction of approximately $ 45.1 million and $ 6.7 million, respectively, associated with an ongoing audit.

The Company and its subsidiaries file income tax returns in the United States and in various state, local and foreign jurisdictions.

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Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized income tax benefits balance may materially change within the next 12 months.

In certain foreign jurisdictions, there are either statutory expirations or the Company’s settlement expectations such that approximately

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

$ 40.1 million could be concluded within the next 12 months.

In certain foreign jurisdictions, there are either statutory expirations or the Company’s settlement expectations such that approximately $ 10.4 million could be concluded within the next 12 months.

Although there are ongoing examinations in various federal and state jurisdictions, the 2017 through 2022 tax years generally remain subject to examination in the United States by applicable authorities.

1 unchanged sentence

In Brazil, the Company is contesting disallowed deductions related to amortization of certain goodwill amounts (see Note 12).

In 2022, the U.S.

Inflation Reduction Act and the CHIPS and Science Act of 2022 (the “Acts”) were signed into law.

These acts include, among other provisions, a corporate alternative minimum tax of 15%, an excise tax on the repurchase of corporate stock, various climate and energy provisions, and incentives for investment in semiconductor manufacturing.

The primary provisions of the Acts are effective during 2023 and forward.

The Company is evaluating the impact these acts could have on the Company’s future tax provision and the effective tax rate, as well as any other impacts on the Company’s financial position and results of operations.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

December 31, 2022 December 31, 2021

Senior term loan due 2022 $ — $ 184.0

Credit facility, expires 2027 200.0 —

8 unchanged sentences

Total long-term indebtedness, less current portion $ 1,264.8 $ 1,411.2

____________________________________

(1) Maturity dates are reflected as of December 31, 2021.

At December 31, 2022, the aggregate scheduled maturities of long-term debt, excluding the current portion of long-term debt, are as follows (in millions):

2 unchanged sentences

Current Indebtedness

Credit Facility

In December 2022, the Company, certain of its subsidiaries and Rabobank, and other named lenders entered into an amendment to its credit facility providing for a $ 1.25 billion multi-currency unsecured revolving credit facility (“credit facility”), which replaced the Company’s former $ 800.0 million multi-currency unsecured revolving credit facility, which is discussed below.

The amendment provided an additional $ 450.0 million in borrowing capacity.

An initial borrowing under the credit facility was used to repay and retire a $ 240.0 million short-term multi-currency revolving credit facility with Rabobank that was due to mature on March 31, 2023.

The credit facility consists of a $ 325.0 million U.S.

dollar tranche and a $ 925.0 million multi-currency tranche for loans denominated in U.S.

Dollars, Euros or other currencies to be agreed upon.

The credit facility matures on December 19, 2027.

Interest accrues on amounts outstanding for any borrowings denominated in U.S.

dollars, at the Company’s option, at either (1) the Secured Overnight Financing Rate (“SOFR”) plus 0.1 % plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating, or (2) the base rate, which is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5 %, and (iii) Term SOFR for a one-month tenor plus 1.0 %, plus a margin ranging from 0.000 % to 0.875 % based on the Company’s credit rating.

Interest accrues on amounts outstanding for any borrowings denominated in Euros at the Euro Interbank Offered Rate (“EURIBOR”) plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating.

As of December 31, 2022, the Company had $ 200.0 million outstanding

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

borrowings under the revolving credit facility and had the ability to borrow $ 1,050.0 million.

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 $ 106.9 million as of December 31, 2022).

The credit facility expires on December 31, 2026.

Any loans will bear interest at the EURIBOR plus a credit spread.

As of December 31, 2022, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 106.9 million).

0.800 % Senior Notes Due 2028

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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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

€ 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).

Credit Facility

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

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

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

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

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.

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 our 0.800 % senior notes due 2028.

As of December 31, 2021 and 2020, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $ 800.0 million under the facility.

On April 9, 2020, the Company entered into an amendment to its $ 800.0 million multi-currency revolving credit facility to include incremental term loans (“2020 term loans”) that allow the Company to borrow an aggregate principal amount of € 235.0 million and $ 267.5 million, respectively (or an aggregate amount of approximately $ 534.1 million as of December 31, 2021).

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

Amounts drawn must be in a minimum principal amount of $ 100.0 million and integral multiples of $ 50.0 million in excess thereof.

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.

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.

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

As of December 31, 2021, the Company had the ability to borrow approximately € 117.5 million and $ 133.7 million of 2020 term loans (or an aggregate amount of approximately $ 267.0 million).

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 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” (“SOFR”) or a base rate, and, as such, the Company does not believe that moving to the other rates will have a materially adverse effect on the Company’s results of operations.

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

4 unchanged sentences

Senior Term Loans Due Between 2023 and 2028

In October 2016, the Company borrowed an aggregate amount of € 375.0 million through a group of seven related term loan agreements, and in August 2018, the Company borrowed an additional aggregate amount of € 338.0 million through

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

a group of another seven related term loan agreements.

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

Additionally, as mentioned previously, the Company repaid € 192.0 million (or approximately $ 223.8 million as of October 19, 2021) upon maturity of two of its 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, the Company had indebtedness of € 393.0 million (or approximately $ 445.9 million as of December 31, 2021) through a group of eight remaining related term loan agreements.

As of February 1, 2022, as a result of a further repayment discussed previously, the Company had indebtedness of € 320.5 million (or approximately $ 361.0 million) through a group of seven remaining related term loan agreements.

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

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

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

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

In aggregate, the Company had indebtedness of € 319.5 million (or approximately $ 341.6 million as of December 31, 2022) through a group of six remaining related term loan agreements.

Two of the term loan agreements in the aggregate amount of € 173.0 million (or approximately $ 184.9 million net of debt issuance costs, as of December 31, 2022) will mature in August and October 2023.

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

As of December 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 0.90 % to 1.25 % and maturity dates between August 2023 and August 2025.

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.

The term loans contain covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends, and are subject to acceleration in the event of default.

Former Indebtedness

Short-term Credit Facility

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

Interest accrued on amounts outstanding under the short-term credit facility, at the Company’s option, at either (1) SOFR for borrowings denominated in U.S.

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 contained covenants restricting, among other things, the incurrence of indebtedness and the

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

making of certain payments, including dividends.

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

As previously mentioned, during December 2022, the Company repaid the $ 240.0 million outstanding borrowings under the facility in U.S.

Credit Facility Due 2023

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

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

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

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

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

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

As previously mentioned, during December 2022, the Company amended its credit facility agreement and replaced its $ 800.0 million multi-currency revolving credit facility with a new $ 1.25 billion credit facility.

On April 15, 2020, the Company borrowed € 117.5 million and $ 133.8 million under a term loan facility that had been added to our multi-currency revolving credit facility.

While outstanding, the loans bore interest at one-month LIBOR plus a margin of 1.625 %.

The Company repaid the two loans on February 16, 2021 (for an aggregate amount of approximately $ 276.0 million as of that date).

The term loans matured on April 8, 2022.

Senior Term Loan Due 2022

In October 2018, the Company entered in a term loan agreement with Rabobank in the amount of € 150.0 million.

In October 2018, the Company entered into a term loan agreement with Rabobank in the amount of € 150.0 million.

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

1 unchanged sentence

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

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.

During October 2021, the Company repaid its senior term loan of € 150.0 million (or approximately $ 173.4 million as of October 8, 2021).

Short-Term Borrowings

19 unchanged sentences

Amortization of prior service cost 0.1 0.7 2.1

Net loss recognized due to settlement 0.1 0.2 0.5

Net (gain) loss recognized due to settlement ( 0.4 ) 0.1 0.2

Curtailment gain (1)

21 unchanged sentences

For the Company’s Swiss cash balance plan, the interest crediting rate of 1.0 % for both 2022 and 2021 was set equal to the current annual minimum rate set by the government for the mandatory portion of the account balance.

Above mandatory amounts have an interest crediting rate of 0.25 % for 2021 and 0.0 % for 2020.

Above mandatory amounts have an interest crediting rate of 0.25 % for both 2022 and 2021.

Net annual postretirement benefit costs, and the weighted average discount rate used to determine them, for the years ended December 31, 2022, 2021 and 2020 are set forth below (in millions, except percentages):

52 unchanged sentences

Net loss recognized due to settlement 0.1 — 0.1

Net actuarial loss arising during the year ( 37.8 ) ( 5.1 ) ( 32.7 )

Net loss recognized due to curtailment 8.5 2.2 6.3

Net actuarial gain arising during the year 71.0 17.4 53.6

Amortization of prior service cost 0.8 0.2 0.6

2 unchanged sentences

Prior service credit arising during the year ( 25.5 ) ( 6.4 ) ( 19.1 )

Net loss recognized due to settlement 0.1 — 0.1

Net loss recognized due to curtailment 8.5 2.2 6.3

Net (gain) loss recognized due to settlement ( 0.4 ) — ( 0.4 )

Net actuarial gain arising during the year 15.0 2.7 12.3

4 unchanged sentences

Unrecognized net actuarial losses $ 270.0 $ 291.7

The decrease in unrecognized net actuarial losses between years primarily resulted from higher discount rates at December 31, 2021 compared to December 31, 2020, as well as a result of the amendment to the Company's ENPP as previously discussed.

The decrease in unrecognized net actuarial losses between years primarily resulted from higher discount rates at December 31, 2022 compared to December 31, 2021.

The unrecognized net actuarial losses will be impacted in future periods by actual asset returns, discount rate changes, currency exchange rate fluctuations, actual demographic experience and certain other factors.

9 unchanged sentences

Unrecognized prior service cost $ 32.5 $ 7.1

The decrease in the unrecognized prior service cost between years is due primarily to the amortization of unrecognized prior service cost related to prior plan amendments.

The decrease also reflects the 2021 plan amendment to the Company's

The increase in the unrecognized prior service cost between years is due primarily to the Company updating its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligations

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ENPP, as previously discussed.

The amortization of unrecognized prior service cost during 2020 also included the initial amortization impacts of an amendment to the Company’s ENPP during 2019.

The following table summarizes the unrecognized net actuarial (gains) losses included in the Company’s accumulated other comprehensive loss related to the Company’s U.S.

related to certain defined benefit plans resulting in a revision of its estimate of prior service cost of approximately $ 25.5 million.

The 2021 balance also reflects the 2021 plan amendment to the Company’s ENPP, as previously discussed.

The following table summarizes the unrecognized net actuarial gains included in the Company’s accumulated other comprehensive loss related to the Company’s U.S.

and Brazilian postretirement health care benefit plans as of December 31, 2022 and 2021 (in millions):

Unrecognized net actuarial (gains) losses (1)

Unrecognized net actuarial gains (1)

$ ( 2.0 ) $ ( 1.1 )

3 unchanged sentences

The unrecognized net actuarial gains related to the Company’s U.S.

and Brazilian postretirement benefit plans was primarily due to liability gain due to the experience of the plans and assumption changes as of December 31, 2021 as compared to December 31, 2020.

and Brazilian postretirement benefit plans is primarily due to liability gains due to the experience of the plans and assumption changes as of December 31, 2022 as compared to December 31, 2021 primarily resulting from higher discount rates at December 31, 2022.

The unrecognized net actuarial gains or losses will be impacted in future periods by discount rate changes, actual demographic experience, actual health care inflation and certain other factors.

These gains or losses, to the extent they exceed the gain/loss corridor, will be amortized on a straight-line basis over the average remaining service period of active employees expected to receive benefits, or the average remaining lives of inactive participants, covered under the postretirement benefit plans.

As of December 31, 2021, the average amortization period was 10 years for the Company’s U.S.

postretirement benefit plans.

As of December 31, 2022, the gains or losses did not exceed the corridor for the Company’s U.S.

postretirement benefit plan and therefore, there will be no amortization of unrecognized gains or losses during 2023.

As of December 31, 2022 and 2021, the net prior service cost related to the Company’s Brazilian postretirement health care benefit plans was as follows (in millions):

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(1) Primarily related to the Company’s U.K.

pension plan.

pension plan, excluding the GIMA joint venture.

(2) These amounts represented 50 % of GIMA’s unrecognized net actuarial losses and unrecognized prior service cost associated with its pension plan.

In addition, GIMA recognized a net actuarial loss due to settlements of approximately $ 0.1 million in 2020.

The Company’s defined benefit pension obligation has been reflected based on the manner in which its defined benefit plans are being administered.

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

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.

1 unchanged sentence

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 in the Company’s defined benefit pension obligation and the related amounts and timing of future contributions to be paid by the Company.

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.

As previously mentioned, during 2022, the Company updated its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligations related to certain defined benefit plans and recorded a revision of its estimate of prior service cost of approximately $ 25.5 million.

The weighted average assumptions used to determine the benefit obligation for the Company’s defined benefit pension plans and ENPP as of December 31, 2022 and 2021 are as follows:

6 unchanged sentences

5.00 % 5.00 %

____________________________________

(1) Applicable for U.S.

8 unchanged sentences

The Company uses a spot yield curve to determine the discount rate applicable in the United Kingdom to measure the U.K.

pension plan’s service cost and interest cost.

Under the settlement and yield curve approaches, the discount rate is set to equal the single discount rate that produces the same present value of all future payments.

pension plan’s service

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

cost and interest cost.

Under the settlement and yield curve approaches, the discount rate is set to equal the single discount rate that produces the same present value of all future payments.

For measuring the expected U.S.

80 unchanged sentences

7 % are in high-yield securities;

6 % are in other various fixed income securities and 3 % are in asset-backed and mortgage-backed securities.

and 1 % are in other various fixed income securities.

(2) 51 % of “alternative investments” are in relative value funds;

10 unchanged sentences

(a) Relating to assets still held at reporting date ( 0.9 ) ( 1.1 ) 0.2

(b) Relating to assets sold during period — — —

Purchases, sales and /or settlements ( 0.2 ) — ( 0.2 )

7 unchanged sentences

Global equities $ 102.5 $ 18.2 $ 84.3 $ —

equities 4.7 4.7 — —

equities 65.2 65.2 — —

large cap equities 5.6 5.6 — —

small cap equities 3.9 3.9 — —

Total equity securities 108.1 23.8 84.3 —

1 unchanged sentence

Aggregate fixed income 615.9 615.9 — —

International fixed income 249.5 249.5 — —

Total fixed income share (1)

9 unchanged sentences

______________________________________

(1) 44 % of “fixed income” securities are in investment-grade corporate bonds;

20 % are in government treasuries;

11 % are in high-yield securities;

(1) 50 % of “fixed income” securities are in government treasuries;

20 % are in foreign securities;

6 % are in asset-backed and mortgage-backed securities;

and 9 % are in other various fixed income securities.

13 % are in investment-grade corporate bonds;

8 % are in high-yield securities;

6 % are in other various fixed income securities and 3 % are in asset-backed and mortgage-backed securities.

(2) 42 % of “alternative investments” are in relative value funds;

1 unchanged sentence

14 % are in event-driven funds;

5 % are distributed in hedged and non-hedged funds;

and 14 % are in credit funds.

8 % are in credit funds;

and 8 % are distributed in hedged and non-hedged funds.

(3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland.

66 unchanged sentences

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 our Consolidated Balance Sheets.

During 2022, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of December 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.

3 unchanged sentences

____________________________________

(1) On April 28, 2022, the Company’s Board of Directors approved a quarterly dividend of $ 0.24 per common share outstanding commencing in the second quarter of 2022.

The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.24 per common share beginning in the second quarter of 2022, from $ 0.20 per common share in the first quarter of 2022.

On January 20, 2022, the Company's Board of Directors approved a quarterly dividend of $ 0.20 per common share outstanding commencing in the first quarter of 2022.

In addition, the Company's Board of Directors also declared and the Company paid a special cash dividend of $ 4.00 per common share during 2021 totaling approximately $ 301.5 million.

(2) The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.16 per common share beginning in the second quarter of 2019, from $ 0.15 per common share in the first quarter of 2019, through the first quarter of 2021.

In addition, the Company's Board of Directors also declared and the Company paid a special variable dividend of $ 4.50 per common share during 2022 totaling approximately $ 335.7 million.

(2) The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.20 per common share beginning in the second quarter of 2021, from $ 0.16 per common share in the first quarter of 2021.

In addition, the Company’s Board of Directors also declared and the Company paid a special variable dividend of $ 4.00 per common share during 2021 totaling approximately $ 301.5 million.

(3) The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.16 per common share, beginning in the second quarter of 2019 through the first quarter of 2021, from $ 0.15 per common share in the first quarter of 2019.

AGCO CORPORATION

2 unchanged sentences

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 years ended December 31, 2022 and 2021 (in millions):

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

Accumulated other comprehensive loss, December 31, 2019 $ ( 296.4 ) $ ( 1,297.5 ) $ ( 1.3 ) $ ( 1,595.2 )

Other comprehensive (loss) income before reclassifications ( 32.1 ) ( 197.5 ) 5.1 ( 224.5 )

Net losses (gains) reclassified from accumulated other comprehensive loss 15.2 — ( 6.3 ) 8.9

Other comprehensive loss, net of reclassification adjustments ( 16.9 ) ( 197.5 ) ( 1.2 ) ( 215.6 )

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

Accumulated other comprehensive loss, December 31, 2020 $ ( 313.3 ) $ ( 1,495 ) $ ( 2.5 ) $ ( 1,810.8 )

Other comprehensive income (loss) before reclassifications 70.0 ( 45.1 ) 5.1 30.0

Net losses (gains) reclassified from accumulated other comprehensive income (loss) 12.9 — ( 3.0 ) 9.9

Net losses (gains) reclassified from accumulated other comprehensive loss 12.9 — ( 3.0 ) 9.9

Other comprehensive income (loss), net of reclassification adjustments 82.9 ( 45.1 ) 2.1 39.9

Accumulated other comprehensive loss, December 31, 2021 ( 230.4 ) ( 1,540.1 ) ( 0.4 ) ( 1,770.9 )

Other comprehensive loss before reclassifications ( 7.2 ) ( 30.9 ) ( 14.6 ) ( 52.7 )

Net losses reclassified from accumulated other comprehensive loss 6.4 — 14.1 20.5

Other comprehensive loss, net of reclassification adjustments ( 0.8 ) ( 30.9 ) ( 0.5 ) ( 32.2 )

Accumulated other comprehensive loss, December 31, 2022 $ ( 231.2 ) $ ( 1,571.0 ) $ ( 0.9 ) $ ( 1,803.1 )

AGCO CORPORATION

5 unchanged sentences

Year ended December 31, 2021 (1)

Net losses (gains) on foreign currency contracts $ 11.4 $ ( 6.4 ) Cost of goods sold

Net gains on commodity contracts ( 17.2 ) — Cost of goods sold

Net losses on foreign currency contracts $ 14.5 $ 11.4 Cost of goods sold

Net losses (gains) on commodity contracts 4.7 ( 17.2 ) Cost of goods sold

Reclassification before tax 19.2 ( 5.8 )

9 unchanged sentences

____________________________________

(1) (Gains) losses included within the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020, respectively.

(1) Losses (gains) included within the Consolidated Statements of Operations for the years ended December 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.

6 unchanged sentences

The Company’s primary long-term incentive plan is a performance share plan that provides for awards of shares of the Company’s common stock based on achieving financial targets, such as targets for return on invested capital, operating margins, return on net assets and revenue growth, as determined by the Company’s Board of Directors.

The stock awards under the Plan are earned over a performance period, and the number of shares earned is determined based on annual cumulative or average results for the specified period, depending on the measurement.

Performance periods for the Company’s primary long-term incentive plan are consecutive and overlapping three-year cycles, and performance targets are set at the beginning of each cycle.

2 unchanged sentences

The percentage level achievement is determined annually or over the three-year cycle in aggregate, with the ultimate award that is earned determined based upon the average of the three annual percentages.

The 2021 grant of performance award shares is subject to a total

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

The compensation expense associated with these awards 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 and earned.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

shareholder return modifier.

During 2021, the Company granted 281,310 performance awards related to varying performance periods.

During 2022, the Company granted 320,120 performance awards if the Company were to achieve its maximum levels of performance related to varying performance periods.

Compensation expense recorded during 2022, 2021 and 2020 with respect to awards granted was based upon the fair value as of the grant date.

For the 2021 awards that included a market condition, the Company measured the fair value using a Monte Carlo simulation.

For the 2022 and 2021 awards that included a market condition, the Company measured the fair value using a Monte Carlo simulation.

The weighted average grant-date fair value of performance awards granted under the Plan during 2022, 2021 and 2020 was as follows:

3 unchanged sentences

Performance award transactions during 2022 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan:

Performance awards Weighted-Average Grant Date

Shares awarded but not earned at January 1 514,714 $ 97.72

1 unchanged sentence

Shares forfeited ( 34,324 ) 108.99

Shares earned ( 309,198 )

Shares vested or earned ( 256,606 ) 73.96

Shares awarded but not earned at December 31 543,904 $ 120.94

Based on the level of performance achieved as of December 31, 2021, 330,174 shares were earned under the related performance period, including 97,818 shares earned as of December 31, 2020 related to certain retirees and other individuals.

Based on the level of performance achieved as of December 31, 2022, 289,513 shares were earned under the related performance period, including 53,681 shares vested as of December 31, 2021 related to certain retirees and other individuals.

183,431 shares were issued in February 2023, net of 106,082 shares that were withheld for taxes related to the earned awards.

The Plan allows for the participant to have the option of forfeiting a portion of the shares awarded in lieu of a cash payment contributed to the participant’s tax withholding to satisfy the participant’s statutory minimum federal, state and employment taxes which would be payable at the time of grant.

I n addition, assuming the maximum target levels of performance achieved, there were 59,182 shares earned as of December 31, 2021 related to certain retirees and other individuals that will be issued at the end of the relevant performance periods based on the ultimate level of performance achieved with respect to those periods.

As of December 31, 2021, the total compensatio n 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 $ 20.6 million , and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

In addition, assuming the maximum target levels of performance achieved, there were 13,560 shares earned as of December 31, 2022 related to certain retirees and other individuals that will be issued at the end of the relevant performance periods based on the ultimate level of performance achieved with respect to those periods.

As of December 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 $ 30.9 million, and the weighted average period over which it is expected to be recognized is approximately two years .

This estimate is based on the current projected levels of performance of outstanding awards.

1 unchanged sentence

Restricted Stock Units

During the year ended December 31, 2021, the Company granted 92,848 restricted stock unit (“RSU”) awards.

Restricted stock unit (“RSU”) awards granted under Plan do not entitle recipients to vote or receive dividends during the vesting period and will be forfeited in the event of the recipient’s termination of employment, except for certain circumstances such as retirement, death or disability.

The fair value of restricted stock and restricted stock units is the closing market price per share of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period.

The weighted average grant-date fair value of the RSUs granted under the Plan during 2022, 2021 and 2020 was as follows:

Years Ended December 31,

2022 2021 2020

Weighted average grant-date fair value $ 109.09 $ 113.91 $ 70.83

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the year ended December 31, 2022, the Company granted 133,546 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 RSUs 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 2020 grant of RSUs to certain executives has a three-year cliff vesting requirement subject to adjustment based on a margin improvement metric relative to the Company’s defined peer group.

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

The weighted average grant-date fair value of the RSUs granted under the Plan during the years ended December 31, 2021, 2020 and 2019 were $ 113.91 , $ 70.83 and $ 61.01 , respectively.

RSU transactions during the year ended December 31, 2022 were as follows:

RSUs Weighted-Average

Shares awarded but not vested at January 1 159,228 $ 93.13

3 unchanged sentences

Shares awarded but not vested at December 31 213,198 $ 104.62

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A majority of the 70,256 shares vested with respect to RSU awards during 2022 were issued in January 2022.

3,830 shares earned during 2021 related to certain retirees.

4,380 shares vested during 2022 related to certain retirees.

During January 2023, 53,637 RSUs shares were issued, net of 31,458 shares that were withheld for taxes.

22,451 RSUs 2020 remain to be issued as they are subject to adjustment based on a total margin improvement metric relative to the Company’s defined peers.

As of December 31, 2022, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 13.0 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

On January 30, 2023, the Company granted 140,042 performance award shares (subject to the Company achieving future target levels of performance) and 100,955 RSUs under the Plan.

The 2023 grant of performance award shares is subject to a total shareholder return modifier.

Stock-settled Appreciation Rights

Certain executives and key managers were eligible to receive grants of SSARs through the year ended December 31, 2020.

The Company did not grant any SSARs during the year ended December 31, 2021.

The SSARs provide a participant with the right to receive the aggregate appreciation in stock price over the market price of the Company’s common stock at the date of grant, payable in shares of the Company’s common stock.

The participant may exercise his or her SSARs at any time after the grant is vested but no later than seven years after the date of grant.

The SSARs vest ratably over a four-year period from the date of grant.

SSAR awards made to certain executives and key managers under the Plan are made with the base price equal to the price of the Company’s common stock on the date of grant.

The Company did not grant any SSARs since the year ended December 31, 2020 and does not currently anticipate granting any SSARs in the future.

The Company recorded stock compensation expense of approximately $ 0.5 million, $ 0.8 million and $ 1.9 million associated with SSAR awards during 2022, 2021 and 2020, respectively.

1 unchanged sentence

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

The weighted average grant-date fair value of SSAR awards granted under the Plan and the weighted average assumptions under the Black-Scholes option model were as follows for the years ended December 31, 2020 and 2019:

Weighted average grant-date fair value $ 12.31 $ 11.34

Weighted average assumptions under Black-Scholes option model:

Expected life of awards (years) 3.0 3.0

Risk-free interest rate 1.5 % 2.6 %

Expected volatility 24.1 % 24.2 %

Expected dividend yield 0.9 % 1.0 %

SSAR transactions during the year ended December 31, 2021 were as follows:

SSARs outstanding at January 1 403,150

SSARs granted —

SSARs exercised ( 194,661 )

SSARs canceled or forfeited ( 13,878 )

SSARs outstanding at December 31 194,611

SSAR price ranges per share:

Exercised 43.88 - 73.14

Canceled or forfeited 46.58 - 73.14

Weighted average SSAR exercise prices per share:

Exercised 64.41

Canceled or forfeited 68.51

Outstanding at December 31 68.33

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At December 31, 2021, the weighted average remaining contractual life of SSARs outstanding was approximately four years .

As of December 31, 2021, the total compensation cost related to unvested SSARs not yet recognized was approximately $ 0.8 million and the weighted-average period over which it is expected to be recognized is approximately one and one-half years.

The following table sets forth the exercise price range, number of shares, weighted average exercise price, and remaining contractual lives by groups of similar price as of December 31, 2021:

SSARs Outstanding SSARs Exercisable

Range of Exercise Prices Number of

Shares Weighted Average

Contractual Life

(Years) Weighted Average

Exercise Price Exercisable as of December 31, 2021 Weighted Average

Exercise Price

$ 46.58 - $ 63.47

80,523 3.51 $ 61.91 38,923 $ 60.91

$ 72.74 - $ 73.14

114,088 4.41 $ 72.86 35,013 $ 72.99

194,611 73,936 $ 66.63

The total fair value of SSARs vested during 2022 was approximately $ 0.7 million.

There were 120,675 SSARs that were not vested as of December 31, 2021.

There were 57,300 SSARs that were not vested and 144,984 SSARs outstanding as of December 31, 2022.

The total intrinsic value of outstanding and exercisable SSARs as of December 31, 2022 was $ 10.1 million and $ 6.2 million, respectively.

The total intrinsic value of SSARs exercised during 2022 was approximately $ 2.8 million.

Excess Tax Benefit

The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs, vesting of RSU awards and vesting of performance awards under the Plan was approximately $ 1.9 million for the year ended December 31, 2022.

The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs and vesting of RSU awards and vesting of performance awards under the Plan was approximately $ 2.5 million for the year ended December 31, 2020.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ended December 31, 2020.

The Company realized an insignificant tax benefit from the exercise of SSARs, vesting of performance awards and vesting of RSU awards in certain foreign jurisdictions during the years ended December 31, 2022, 2021 and 2020.

On January 20, 2022, the Company granted 137,283 performance award shares (subject to the Company achieving future target levels of performance) and 91,583 RSUs under the Plan.

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

Director Restricted Stock Grants

8 unchanged sentences

Where naturally offsetting currency positions do not occur, the Company hedges certain, but not all, of its exposures through the use of foreign currency contracts.

The Company’s translation exposure resulting from translating the financial

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

statements of foreign subsidiaries into United States dollars may be partially hedged from time to time.

The Company’s translation exposure resulting from translating the financial statements of foreign subsidiaries into United States dollars may be partially hedged from time to time.

When practical, the translation impact is reduced by financing local operations with local borrowings.

The Company uses floating rate and fixed rate debt to finance its operations.

The floating rate debt obligations expose the Company to variability in interest payments due to changes in the EURIBOR, LIBOR or other applicable benchmark interest rates such as SOFR upon the discontinuation of LIBOR.

The floating rate debt obligations expose the Company to variability in interest payments due to changes in the EURIBOR, SOFR or other applicable benchmark interest rates.

The Company believes it is prudent to limit the variability of a portion of its interest payments, and to meet that objective, the Company periodically enters into interest rate swaps to manage the interest rate risk associated with the Company’s borrowings.

13 unchanged sentences

The Company’s valuation techniques are designed to maximize the use of observable inputs and minimize the use of unobservable inputs.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Counterparty Risk

9 unchanged sentences

These amounts offset the effect of the changes in foreign currency rates on the related sale and purchase transactions.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During 2022, 2021 and 2020, the Company designated certain foreign currency contracts as cash flow hedges of expected future sales and purchases.

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

The total notional value of derivatives that were designated as cash flow hedges was $ 364.8 million as of December 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

1 unchanged sentence

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 0.9 million and $ 31.9 million as of December 31, 2022 and 2021, respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes 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 2022, 2021 and 2020 (in millions):

3 unchanged sentences

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

Foreign currency contracts $ ( 7.4 ) Cost of goods sold $ ( 10.2 ) $ 8,566.0

Foreign currency contracts (1)

$ ( 11.1 ) Cost of goods sold $ ( 10.6 ) $ 9,650.1

Commodity contracts (2)

2 unchanged sentences

Foreign currency contracts $ ( 7.4 ) Cost of goods sold $ ( 10.2 ) $ 8,566.0

Commodity contracts (1)

0.5 Cost of goods sold — $ 7,092.2

Commodity contracts 12.5 Cost of goods sold 13.2 $ 8,566.0

Total $ 5.1 $ 3.0

Foreign currency contracts $ 4.6 Cost of goods sold $ 6.3 $ 7,092.2

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Commodity contracts 0.5 Cost of goods sold — 7,092.2

Total $ 5.1 $ 6.3

____________________________________

(1) The outstanding contracts as of December 31, 2022 range in maturity through December 2023.

(2) The outstanding contracts as of December 31, 2022 range in maturity through April 2023.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the years ended December 31, 2022, 2021 and 2020 (in millions):

1 unchanged sentence

Tax After-Tax

Accumulated derivative net gains as of December 31, 2018 $ 1.6 $ 0.2 $ 1.4

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

Net changes in fair value of derivatives 4.9 ( 0.2 ) 5.1

5 unchanged sentences

Net changes in fair value of derivatives ( 19.7 ) ( 5.1 ) ( 14.6 )

Net gains reclassified from accumulated other comprehensive loss into income ( 5.8 ) ( 2.8 ) ( 3.0 )

Net losses reclassified from accumulated other comprehensive loss into income 19.2 5.1 14.1

Accumulated derivative net losses as of December 31, 2022 (1)

$ ( 1.0 ) $ ( 0.1 ) $ ( 0.9 )

(1) As of December 31, 2021, approximately $ 0.2 million of derivative realized net losses and approximately $ 1.5 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.

____________________________________

(1) As of December 31, 2022, approximately $ 0.6 million and $ 0.4 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

The Company uses non-derivative and derivative instruments, to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates.

For instruments that are designated as hedges of net investments in foreign operations, changes in the fair value of the derivative instruments are recorded in foreign currency translation adjustments, a component of accumulated other comprehensive loss, to offset changes in the value of the net investments being hedged.

For instruments that are designated as hedges of net investments in

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

foreign operations, changes in the fair value of the derivative instruments are recorded in foreign currency translation adjustments, a component of accumulated other comprehensive loss, to offset changes in the value of the net investments being hedged.

When the net investment in foreign operations is sold or substantially liquidates, the amounts recorded in accumulated other comprehensive loss are reclassified to earnings.

12 unchanged sentences

Cross currency swap contract $ 300.0 $ 300.0

AGCO CORPORATION

NOTES TO 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 (in millions):

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

December 31, 2021 December 31, 2020 December 31, 2019

Foreign currency denominated debt:

Before-Tax Amount Income Tax After-Tax Amount

December 31, 2022 $ — $ — $ —

December 31, 2021 — — —

December 31, 2020 1.7 — 1.7

Cross currency swap contract:

December 31, 2022 20.5 5.3 15.2

December 31, 2021 11.0 3.2 7.8

December 31, 2020 ( 25.5 ) — ( 25.5 )

Derivative Transactions Not Designated as Hedging Instruments

3 unchanged sentences

As of December 31, 2022 and 2021, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,654.0 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):

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the results on net income of derivatives not designated as hedging instruments (in millions):

For the Years Ended

18 unchanged sentences

Total derivative instruments $ 40.9 $ 40.4

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

____________________________________

(1) The outstanding contracts as of December 31, 2022 range in maturity through March 2023.

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

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The future payments required under the Company’s significant commitments, excluding indebtedness, as of December 31, 2022 are as follows (in millions):

Interest payments on indebtedness – As of December 31, 2021, the Company had interest payments of approximately $ 15.1 million due during the year ended December 31, 2022.

Interest payments generally do not vary materially year to year.

Interest payments on indebtedness – The Company expects to make interest payments of approximately $ 35.4 million during the year ended December 31, 2023 related to indebtedness outstanding as of December 31, 2022.

Indebtedness amounts reflect the principal amount of the Company’s senior term loan, senior notes, credit facility and certain short-term borrowings, gross of any debt issuance costs.

The projected amount of interest payments includes assumptions regarding the future fluctuations in interest rates, as well as borrowings under the Company’s revolving credit facility and other variable debt instruments.

Refer to Note 7 of the Consolidated Financial Statements for additional information regarding indebtedness.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

addition, the Company expects to pay approximately $ 125.7 million of discounts on the sales of receivables related to the Company’s finance joint ventures.

The projected amount of discounts paid includes significant assumptions regarding future amounts of receivables sold to the Company’s finance joint ventures as well as future fluctuations in interest rates.

Unconditional purchase obligations – As of December 31, 2022, the Company had approximately $ 209.2 million of outstanding purchase obligations payable during the year ended December 31, 2023.

These obligations generally do not vary materially year to year.

Unconditional purchase obligations generally do not vary materially year to year.

Other short-term and long-term obligations – As of December 31, 2022, the Company had approximately $ 10.4 million of income tax liabilities related to uncertain income tax provisions connected with ongoing income tax audits in various jurisdictions that it expects to pay or settle within the next 12 months.

12 unchanged sentences

In addition, the Company generally would expect to be able to recover a significant portion of the amounts paid under such guarantees from the sale of the underlying financed farm equipment, as the fair value of such equipment is expected to be sufficient to offset a substantial portion of the amounts paid.

The Company also guarantees indebtedness owed to certain of its finance joint ventures if dealers

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

or end users default on loans.

The Company also guarantees indebtedness owed to certain of its finance joint ventures if dealers or end users default on loans.

Losses under such guarantees historically have been insignificant and the guarantees are not material.

3 unchanged sentences

At December 31, 2022, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 4,318.8 million.

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

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 31.9 million that range in maturity through July 2022 (see Note 11).

The outstanding contracts as of December 31, 2022 range in maturity through March 2023.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 0.9 million that range in maturity through April 2023 (see Note 11).

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

2 unchanged sentences

Contingencies

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

In 2008 and 2012, 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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

related transfer of certain assets to the Company’s Brazilian subsidiaries.

The amount of the tax disallowance through December 31, 2022, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $ 24.9 million).

3 unchanged sentences

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

On January 12, 2023, the Brazilian government issued a “Litigation Zero” tax amnesty program, whereby cases being disputed at the administrative court level of review for a period of more than ten years can be considered for amnesty.

If companies choose to enroll in the amnesty program, it would not be considered an admission of guilt with respect to outstanding cases.

The Company is considering whether or not to apply to enroll in the program by March 2023.

The ultimate outcome of the Company’s consideration with respect to its participation in the amnesty program cannot currently be determined.

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.

In 2018, Deere & Company (“Deere”) filed separate complaints in the U.S.

District Court of Delaware against the Company and Precision Planting alleging that certain products of those entities infringed 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.

1:18-cv-00827-CFC.

In July 2022, the case was tried before a jury, which determined that the Company and Precision Planting had not infringed the Deere patents.

The case currently is subject to customary post-trial procedures, including the right of the parties to appeal.

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.

14 unchanged sentences

See Note 8 for a discussion of the valuation methods used to measure the fair value of the Company’s pension plan assets.

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

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

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

24 unchanged sentences

Under the various joint venture agreements, Rabobank or its affiliates provide financing to the joint venture companies, primarily through lines of credit.

During 2021, the Company did not make additional investments in its finance joint ventures.

During 2022 and 2021, the Company did not make additional investments in its finance joint ventures.

During 2020, the Company made a total of approximately $ 1.9 million of additional investments in its finance joint venture in the Netherlands.

During 2019, the Company did not make additional investments in its finance joint ventures.

During 2022, the Company received approximately $ 27.0 million dividends from certain of its finance joint ventures.

During 2020, the Company did not receive dividends from its finance joint ventures.

During 2021, the Company received approximately $ 84.4 million dividends from certain of its finance joint ventures.

During 2020, the Company did not receive dividends from its finance joint ventures.

The Company’s finance joint ventures provide retail financing and wholesale financing to its dealers.

3 unchanged sentences

finance joint venture and has outstanding guarantees of minimum residual values that may be owed to its finance joint ventures in the U.S.

and Canada upon the expiration of certain eligible operating leases and has guarantees with its other finance joint ventures which were not material (see Note 12).

and Canada upon the expiration of certain eligible operating leases and also has guarantees with its other finance joint ventures which were not material (see Note 12).

In addition, as part of sales incentives provided to end users, the Company may from time to time subsidize interest rates of retail financing provided by its finance joint ventures.

30 unchanged sentences

Net sales $ 2,175.0 $ 873.8 $ 5,366.9 $ 734.0 $ 9,149.7

Income (loss) from operations 121.6 ( 39.4 ) 638.2 43.4 763.8

Income from operations 193.7 29.3 585.3 62.1 870.4

Depreciation 61.3 25.8 110.5 14.9 212.5

22 unchanged sentences

Germany 475.8 446.7

Finland 189.5 191.4

Brazil 206.0 144.9

Finland 192.6 189.5

France 125.8 133.2

27 unchanged sentences

Net sales for the year ended December 31, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

America Europe/

Middle East Asia/

7 unchanged sentences

Finland and Scandinavia — — 838.8 — 838.8

Italy — — 421.7 — 421.7

Other Europe — — 1,691.5 — 1,691.5

South America — 1,294.8 — — 1,294.8

Brazil — 1,748.8 — — 1,748.8

Other South America — 358.0 — — 358.0

Middle East and Algeria — — 216.2 — 216.2

10 unchanged sentences

$ 3,175.1 $ 2,121.6 $ 6,447.3 $ 907.4 $ 12,651.4

____________________________________

(1) Rounding may impact the summation of amounts.

AGCO CORPORATION

12 unchanged sentences

Finland and Scandinavia — — 836.3 — 836.3

Italy — — 451.6 — 451.6

Other Europe — — 1,653.0 — 1,653.0

South America — 865.4 — — 865.4

Brazil — 1,017.8 — — 1,017.8

Other South America — 277.0 — — 277.0

Middle East and Algeria — — 184.4 — 184.4

23 unchanged sentences

Finland and Scandinavia — — 698.5 — 698.5

Italy — — 322.6 — 322.6

Other Europe — — 1,290.5 — 1,290.5

South America — 789.7 — — 789.7

Brazil — 667.1 — — 667.1

Other South America — 198.3 — — 198.3

Middle East and Algeria — — 136.7 — 136.7

14 unchanged sentences

The Company accounts for these leases pursuant to ASU 2016-02, “Leases”.

Under the standard, lessees are required to record an asset (ROU asset or finance lease asset) and a lease liability.

Under the standard, lessees are required to record an asset (a right-of-use “ROU” asset or finance lease asset) and a lease liability.

ROU assets represent the Company’s right to use an underlying asset during the lease term while lease liabilities represent the Company’s obligation to make lease payments during the lease term.

58 unchanged sentences

____________________________________

(1) Calculated using the implicit interest rate for each lease.

(1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available

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

12 unchanged sentences

____________________________________

(1) Calculated using the implicit interest rate for each lease.

(1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available

AGCO CORPORATION

19 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-K

Item 8. Financial Statements and Supplementary Data