What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2022-11-09 · 154 added, 189 removed, 158 unchanged (68% of the section changed)

7 unchanged sentences

The COVID-19 pandemic and other economic and geopolitical factors, including inflation and the conflict in Ukraine, continue to create volatility in the global economy, including the potential for energy shortages, employment disruptions, supply chain constraints and delays in deliveries, as well as logistics interruptions.

These factors, along with increasing industrial demand, are negatively affecting production levels, particularly as a result of delays in the receipts of parts and components.

These factors, along with increasing industrial demand, can have an adverse effect on production levels, particularly as a result of delays in the receipts of parts and components.

Supply chain issues of particular concern include a wide range of parts and components, including semiconductors.

1 unchanged sentence

RESULTS OF OPERATIONS

For the three months ended September 30, 2022, we generated net income of approximately $237.9 million, or $3.18 per share, compared to approximately $181.3 million, or $2.40 per share, for the same period in 2021.

For the nine months ended September 30, 2022, we generated net income of approximately $567.4 million, or $7.58 per share, compared to approximately $614.9 million, or $8.11 per share, for the same period in 2021.

Net sales during the three and nine months ended September 30, 2022 were approximately $3,121.6 million and $8,752.5 million, respectively, which were approximately 14.5% and 9.6% higher than the same periods in 2021.

These increases were primarily the result of robust end-market demand and favorable pricing during the three and nine months ended September 30, 2022 compared to the same periods in 2021, which helped to offset the negative impacts of currency translation, supply chain constraints and inflationary pressures.

Regionally, net sales were higher in all regions for the three and nine months ended September 30, 2022 compared to 2021 excluding currency translation, as presented below.

Income from operations for the three months ended September 30, 2022 was approximately $332.1 million compared to approximately $251.9 million for the same period in 2021.

Income from operations for the nine months ended September 30, 2022 was approximately $799.6 million compared to approximately $737.4 million for the same period in 2021.

These increases were primarily the result of higher net sales and production volumes along with significant pricing to offset inflationary cost increases.

Income from operations for the nine months ended September 30, 2022 was also impacted by impairment charges recorded during the first quarter related to our joint ventures in Russia of approximately $36.0 million, as discussed below.

Regionally, income from operations in our Europe/Middle East region decreased for the three and nine months ended September 30, 2022 compared to the same periods in 2021 due to negative currency translation impacts, higher material cost inflation and operational inefficiencies due to supply chain challenges that offset favorable pricing.

In our North American region, income from operations increased for the three and nine months ended September 30, 2022 compared to the same periods in 2021.

The increase in operating income in the third quarter of 2022 was bolstered by elevated net sales and production volumes as well as a richer sales mix.

Third quarter pricing actions mitigated inflationary cost pressures.

For the nine months ended September 30, 2022, the third quarter improvement was mostly offset by weaker results in the first half of 2022 resulting primarily from a weaker sales mix as well as higher material and production costs.

In our South American region, income from operations increased in the three and nine months ended September 30, 2022 compared to the same periods in 2021.

These increases reflect the benefit of higher sales and production levels, pricing in excess of material cost inflation, and a favorable sales mix.

In our Asia/Pacific/Africa (“APA”) region, income from operations increased for the three and nine months ended September 30, 2022 compared to the same periods in 2021, primarily due to a positive sales mix and higher net sales.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the three months ended March 31, 2023, we generated net income of approximately $232.6 million, or $3.10 per share, compared to approximately $151.8 million, or $2.03 per share, for the same period in 2022.

Net sales during the three months ended March 31, 2023 were approximately $3,333.5 million, which was approximately 24.1% higher than the same periods in 2022.

This increase was primarily as a result of net sales growth in high horsepower tractors, combines, application equipment and Precision Ag products during the three months ended March 31, 2023 compared to the same period in 2022, inclusive of approximately 5.4% of unfavorable foreign currency translation.

In addition, favorable pricing more than offset significant material and freight cost inflation.

Regionally, net sales were higher in our Europe/Middle East, North America and South America for the three months ended March 31, 2023 compared to 2022, as discussed below.

Income from operations for the three months ended March 31, 2023 was approximately $387.3 million compared to approximately $204.0 million for the same period in 2022.

This increase was primarily the result of higher net sales and production volumes, along with a richer sales mix and positive net pricing compared to the same period in 2022.

Regionally, income from operations in our Europe/Middle East region increased for the three months ended March 31, 2023 compared to the same period in 2022 due to higher net sales and production volumes and a favorable sales mix.

In our North American region, income from operations increased for the three months ended March 31, 2023 compared to the same period in 2022 due to elevated net sales and production volumes, as well as positive net pricing and a richer sales mix.

In our South American region, income from operations increased in the three months ended March 31, 2023 compared to the same period in 2022 due to the benefit of elevated net sales, as well as significant pricing realization and a favorable sales mix, particularly of high horsepower, higher margin tractors.

In our Asia/Pacific/Africa (“APA”) region, income from operations decreased for the three months ended March 31, 2023 compared to the same period in 2022, primarily due to lower net sales and production volumes.

Industry Market Conditions

Agricultural commodity prices continue to support favorable farm fundamentals resulting in strong demand for machinery.

Despite favorable demand, supply chain constraints and limited global industry production have negatively impacted the level of retail sales in the first nine months of 2022.

Healthy farm income from elevated crop prices helped to offset higher fuel, fertilizer and other input costs.

Agricultural commodity prices continue to support favorable farm fundamentals resulting in strong demand for larger agricultural equipment as farmers continue to replace aging machines.

Farmer input costs have moderated from levels experienced during 2022, and easing supply chain constraints are enabling industry production to keep pace with strong market demand.

Future demand for agricultural equipment will be influenced by farm income, which is a function of commodity and protein prices, crop yields and government support.

In North America, industry unit retail sales of utility and high horsepower tractors for the first nine months of 2022 decreased approximately 6% compared to the same period in 2021.

Industry unit retail sales of combines for the first nine months of 2022 increased approximately 3% compared to the same period in 2021.

Lower sales of smaller tractors, which declined from record levels in 2021, were partially offset by increased sales of higher horsepower units.

In Western Europe, industry unit retail sales of tractors decreased approximately 10% for the first nine months of 2022 compared to the same period in 2021.

Industry unit retail sales of combines for the first nine months of 2022 decreased approximately 9% compared to the first nine months of 2021.

Industry retail tractors sales were restricted by supply chain challenges during the first nine months of 2022.

In addition, farmer sentiment in the region has been negatively impacted by weakening economic forecasts, the conflict in Ukraine, looming energy supply concerns, as well as input cost inflation.

In South America, industry unit retail sales of tractors increased approximately 9% for the first nine months of 2022 compared to the same period in 2021.

Industry unit retail sales of combines for the first nine months of 2022 decreased approximately 3% compared to the first nine months of 2021.

The improved demand in tractors was primarily in Brazil and Argentina.

Healthy farm income, supportive exchange rates and continued expansion in planted acreage are driving increased investments in equipment.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In North America, industry unit retail sales of utility and high horsepower tractors for the first three months of 2023 decreased approximately 3% compared to the same period in 2022.

The decrease was driven by lower sales of smaller tractors, partially offset by increased sales of higher horsepower units.

Industry unit retail sales of combines for the first three months of 2023 increased approximately 117% compared to the same period in 2022 due to supply chain constraints experienced in 2022.

In Western Europe, industry unit retail sales of tractors decreased approximately 3% for the first three months of 2023 compared to the same period in 2022.

Farmer sentiment in the region continues to be negatively impacted by the conflict in Ukraine and input cost inflation.

Industry unit retail sales of combines for the first three months of 2023 increased approximately 60% compared to the first three months of 2022 due to supply chain constraints experienced in 2022.

In South America, industry unit retail sales of tractors decreased approximately 3% for the first three months of 2023 compared to the same period in 2022.

Industry unit retail sales of combines for the first three months of 2023 increased approximately 18% compared to the first three months of 2022.

Healthy farm income, supportive exchange rates and continued expansion in planted acreage are driving increased investments in high tech farm equipment and resulting in an outlook of modest growth in the South American tractor industry in 2023 compared to elevated levels in the prior year.

STATEMENTS OF OPERATIONS

Net sales for the three months ended September 30, 2022 were approximately $3,121.6 million compared to approximately $2,725.1 million for the same period in 2021.

Net sales for the nine months ended September 30, 2022 were approximately $8,752.5 million compared to approximately $7,983.1 million for the same period in 2021.

The following tables set forth, for the three and nine months ended September 30, 2022, the impacts to net sales of currency translation by geographical segment (in millions, except percentages):

Three Months Ended September 30, Change Change Due to Currency Translation

2022 2021 $ % $ %

Europe/Middle East $ 1,390.1 $ 1,462.4 $ (72.3) (4.9) % $ (286.4) (19.6) %

North America 910.5 638.7 271.8 42.6 % (5.9) (0.9) %

South America 571.2 383.3 187.9 49.0 % (2.5) (0.7) %

Asia/Pacific/Africa 249.8 240.7 9.1 3.8 % (26.2) (10.9) %

$ 3,121.6 $ 2,725.1 $ 396.5 14.5 % $ (321.0) (11.8) %

Nine Months Ended September 30, Change Change Due to Currency Translation

Net sales for the three months ended March 31, 2023 were approximately $3,333.5 million compared to approximately $2,685.7 million for the same period in 2022.

The following tables set forth, for the three months ended March 31, 2023, the impacts to net sales of currency translation by geographical segment (in millions, except percentages):

Three Months Ended March 31, Change Change Due to Currency Translation

2023 2022 $ % $ %

4 unchanged sentences

$ 3,333.5 $ 2,685.7 $ 647.8 24.1 % $ (146.2) (5.4) %

Regionally, net sales in our EME region were lower during the three and nine months ended September 30, 2022 compared to the same periods in 2021.

These decreases were primarily due to negative foreign currency translation, offset by higher sales of tractors and replacement parts as well as positive pricing impacts.

Net sales in North America increased during the three and nine months ended September 30, 2022 compared to the same periods in 2021.

These increases were primarily

Management’s Discussion and Analysis of Financial Condition and Results of Operations

related to the impact of favorable pricing, as well as increased sales of tractors and precision planting equipment.

Net sales in South America increased during the three and nine months ended September 30, 2022 compared to the same periods in 2021.

Net sales increased across all South American markets, primarily as a result of robust industry demand and favorable pricing impacts.

In our APA region, net sales increased during the nine months ended September 30, 2022 compared to the same periods in 2021, primarily driven by net sales increases in Australia, Japan and Africa, partially offset by lower net sales in China.

We estimate our worldwide average price increases were approximately 13.2% and 10.0%, respectively, during the three and nine months ended September 30, 2022 compared to the same prior year periods.

Consolidated net sales of tractors and combines, which combined comprised approximately 61.3% and 60.0% of our net sales for the three and nine months ended September 30, 2022, respectively, increased approximately 14.5% and 11.9% compared to the same periods in 2021.

Unit sales of tractors and combines increased approximately 19.1% and 15.2%, respectively, for the three and nine months ended September 30, 2022 compared to the same periods in 2021.

Regionally, net sales in our EME region were higher during the three months ended March 31, 2023 compared to the same period in 2022 primarily due to higher net sales of high horsepower tractors, utility tractors and Fuse Precision Ag products, as well as positive pricing impacts, partially offset by negative foreign currency translation.

Net sales in North America increased during the three months ended March 31, 2023 compared to the same period in 2022 primarily related to higher net sales of high horsepower tractors, application equipment and combines, as well as positive pricing impacts to offset inflationary cost pressures.

Net sales in South America increased during the three months ended March 31, 2023 compared to the same period in 2022, primarily as a result of higher net sales of tractors, combines and application equipment, as well as favorable pricing impacts.

In our APA region, net sales decreased during the three months ended March 31, 2023 compared to the same period in 2022, primarily driven by delayed shipments from European factories partially offset by higher net sales in Australia and China.

We estimate our worldwide average price increase was approximately 11.7% during the three months ended March 31, 2023 compared to the same prior year period.

Consolidated net sales of tractors and combines, which combined comprised approximately 61.9% of our net sales for the three months ended March 31, 2023, increased approximately 29.8% compared to the same period in 2022.

Unit sales of tractors and combines increased approximately 3.5% for the three months ended March 31, 2023 compared to the same period in 2022.

The difference between the unit sales change and the change in net sales was primarily the result of foreign currency translation, pricing and sales mix changes.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following tables set forth, for the periods indicated, the percentage of net sales of certain items in our Condensed Consolidated Statements of Operations (in millions, except percentages):

Three Months Ended September 30,

Net Sales $ % of

Gross profit $ 738.9 23.7 % $ 626.7 23.0 %

Selling, general and administrative expenses 287.5 9.2 % 266.1 9.8 %

Engineering expenses 104.7 3.4 % 92.8 3.4 %

Amortization of intangibles 14.7 0.5 % 14.1 0.5 %

Restructuring expenses 1.0 — % 1.4 0.1 %

Bad debt expense (1.1) — % 0.4 — %

Income from operations $ 332.1 10.6 % $ 251.9 9.2 %

Nine Months Ended September 30,

Net Sales $ % of

Three Months Ended March 31,

Net Sales (1)

Gross profit $ 854.9 25.6 % $ 631.3 23.5 %

4 unchanged sentences

Restructuring expenses 1.4 — % 3.0 0.1 %

Bad debt (credit) expense 2.1 — % (0.3) — %

Bad debt expense 1.5 — % 1.6 0.1 %

Income from operations $ 387.3 11.6 % $ 204.0 7.6 %

Gross profit as a percentage of net sales increased for the three months ended September 30, 2022 compared to the same period in 2021.

This increase was primarily as a result of higher sales and production as well as favorable pricing which more than offset inflationary cost increases.

Gross profit as a percentage of net sales decreased for the nine months ended September 30, 2022 compared to the same period in 2021.

This decrease was primarily as a result of higher material and production costs as well as a weaker sales mix.

Global production hours increased approximately 12.1% and 5.6%, respectively, in the three and nine months ended September 30, 2022 compared to the same periods in 2021.

Our production facilities continue to face supply chain and logistics disruptions as well as material, labor and freight cost inflation.

These disruptions have impacted our ability to produce and ship units, which has also contributed to labor inefficiencies, and resulted in higher than anticipated raw material and work in

Management’s Discussion and Analysis of Financial Condition and Results of Operations

process inventory levels.

We expect these factors to continue, which may impact production levels and net sales and margins in future periods.

We recorded approximately $0.4 million and $1.0 million of stock compensation expense within cost of goods sold during the three and nine months ended September 30, 2022, respectively, compared to approximately $0.2 million and $0.8 million for the comparable periods in 2021.

____________________________________

(1) Rounding may impact the summation of amounts.

Gross profit as a percentage of net sales increased for the three months ended March 31, 2023 compared to the same period in 2022 primarily as a result of higher sales and production as well as favorable pricing that more than offset inflationary material and freight cost increases.

Global production hours increased approximately 8.2% in the three months ended March 31, 2023 compared to the same period in 2022.

The increase was primarily due to higher market demand during the three months ended March 31, 2023, as well as easing of supply chain and logistics disruptions experienced in 2022.

Some of our production facilities continue to face supply chain and logistics disruptions as well as material, labor and freight cost inflation.

These disruptions have impacted our ability to produce and ship units, which also has contributed to labor inefficiencies and resulted in higher than anticipated raw material and work in process inventory levels.

These factors may continue, which could impact production and inventory levels and net sales and margins in future periods.

We recorded approximately $0.5 million and $0.3 million of stock compensation expense within cost of goods sold during the three months ended March 31, 2023 and 2022, respectively.

See below and refer to Note 4 to our Condensed Consolidated Financial Statements for additional information on stock compensation expense.

Selling, general and administrative expenses (“SG&A expenses”) as a percentage of net sales were lower for the three and nine months ended September 30, 2022 compared to the same periods in 2021 primarily due to higher net sales and foreign currency translation impacts.

We recorded approximately $7.4 million and $24.4 million of stock compensation expense within SG&A expenses during the three and nine months ended September 30, 2022, respectively, compared to approximately $5.8 million and $20.5 million, respectively, during the same periods in 2021.

Selling, general and administrative expenses (“SG&A expenses”) as a percentage of net sales were lower for the three months ended March 31, 2023 compared to the same period in 2022 primarily due to higher net sales and foreign currency translation impacts.

We recorded approximately $13.5 million of stock compensation expense within SG&A expenses during the three months ended March 31, 2023, compared to approximately $6.7 million during the same period in 2022.

Refer to Note 4 to our Condensed Consolidated Financial Statements for additional information on stock compensation expense.

The restructuring expenses of approximately $1.0 million and $4.4 million, respectively, recorded during the three and nine months ended September 30, 2022 primarily related to severance and other related costs associated with the rationalization of certain South American and European manufacturing operations.

The restructuring expenses of approximately $1.4 million recorded during the three months ended March 31, 2023 primarily related to severance and other related costs associated with the rationalization of certain South American manufacturing operations.

Refer to Note 3 to our Condensed Consolidated Financial Statements for additional information.

Interest expense, net was approximately $2.3 million and $8.6 million, respectively, for the three and nine months ended September 30, 2022 compared to approximately $1.2 million and $6.8 million, respectively, for the comparable periods in 2021, resulting primarily from increased debt levels and interest rates in 2022 compared to 2021.

Interest expense, net was approximately $0.5 million for the three months ended March 31, 2023 compared to approximately $0.4 million for the comparable period in 2022, resulting primarily from increased interest rates and debt levels in 2023 compared to 2022.

See “Liquidity and Capital Resources” for further information.

Other expense, net was approximately $33.1 million and $72.3 million, respectively, for the three and nine months ended September 30, 2022 compared to approximately $14.1 million and $40.2 million, respectively, for the comparable periods in 2021.

Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in “Other expense, net,” were approximately $20.4 million and $38.5 million, respectively, for the three and nine months ended September 30, 2022 compared to approximately $7.4 million and $17.1 million, respectively, for the comparable periods in 2021.

This increase in losses for the nine months ended September 30, 2022 was primarily a result of higher interest rates as compared to 2021.

We recorded an income tax provision of approximately $74.2 million and $205.9 million, respectively, for the three and nine months ended September 30, 2022 compared to approximately $70.1 million and $121.4 million, respectively, for the comparable periods in 2021.

Other expense, net was approximately $50.4 million for the three months ended March 31, 2023 compared to approximately $17.5 million for the comparable period in 2022.

Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in “Other expense, net,” were approximately $28.5 million for the three months ended March 31, 2023 compared to approximately $7.9 million for the comparable period in 2022.

This increase in losses for the three months ended March 31, 2023 was primarily a result of higher interest rates as compared to 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We recorded an income tax provision of approximately $120.2 million for the three months ended March 31, 2023 compared to approximately $60.2 million for the comparable period in 2022.

Our effective tax rate varies from period to period due to the mix of taxable income and losses in the various tax jurisdictions in which we operate.

We maintain a valuation allowance to reserve against our net deferred tax assets in certain foreign jurisdictions.

During the nine months ended September 30, 2021, our income tax provision included the benefit of a reversal of approximately $67.8 million related to a valuation allowance previously established against our net deferred tax assets in the United States.

Improvements in income in the United States during 2021, along with updated future projected income levels, supported the reversal of the valuation allowance.

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was approximately $15.4 million and $39.7 million, respectively, for the three and nine months ended September 30, 2022 compared to approximately $15.9 million and $49.2 million, respectively, for the comparable periods in 2021.

The decrease for the nine months ended September 30, 2022 was primarily due to a write-down of our investment in our Russian finance joint venture of approximately $4.8 million recorded during the first quarter of 2022, as well as lower earnings in our European finance joint ventures.

In addition, we recorded approximately $29.5 million within our income tax provision during the three months ended March 31, 2023 associated with our enrollment in a Brazilian tax amnesty program as is more fully described in Notes 12 and 19 of our Condensed Consolidated Financial Statements.

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was approximately $16.4 million for the three months ended March 31, 2023 compared to approximately $11.1 million for the comparable period in 2022.

A write-down of our investment in our Russian finance joint venture of approximately $4.8 million was recorded during the three months ended March 31, 2022.

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

Refer to “Finance Joint Ventures” for further information regarding our finance joint ventures and their results of operations.

Net loss attributable to noncontrolling interests was approximately $14.9 million during the nine months ended September 30, 2022.

There was no loss or income attributable to noncontrolling interests during the three months ended September 30, 2022.

This compares to net income attributable to noncontrolling interests of approximately $1.1 million and $3.3 million, respectively, in the same periods in 2021.

There was no loss or income attributable to noncontrolling interests during the three months ended March 31, 2023 compared to approximately $14.8 million of losses in the same period in 2022.

The losses during 2022 related to our Russia joint venture.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

On May 5, 2022, we discovered that we had been subject to a ransomware cyberattack.

The attack resulted in the temporary closure of most of our production sites and parts operations.

A majority of the affected locations resumed operations within approximately two weeks after the attack was discovered.

There was some data exfiltration as a result of the attack, and a portion of the exfiltrated data subsequently was released publicly.

We do not have significant retail operations, and we do not believe that the exfiltrated data included privacy-protected consumer data or that the exfiltration was consequential.

We continue to review and improve our safeguards to minimize our exposure to future attacks.

We do not believe the cost of remediation to the impacted systems will be material.

To date, the cost of those efforts has not been consequential.

We have cyber insurance coverage, and we plan to file a claim associated with the attack.

Because we already were experiencing supply chain issues at the time of the attack, we cannot accurately estimate the amount of lost revenue or operating income attributable to the attack.

Through increasing production rates in the second half of 2022, we currently expect to mitigate a considerable portion of the effects of the attack by the end of the year.

Russian Joint Ventures

We previously invested in two joint ventures that operated in Russia primarily for the manufacture and distribution of equipment and parts.

Beginning in 2018, our Russian joint venture partner became subject to sanctions by the United States.

Subsequent to the commencement of these sanctions, we obtained time-limited general licenses from the Office of Foreign Assets Control (“OFAC”) of the U.S.

Department of Treasury that permitted us to continue our participation, which, following the most recent extension, expired on May 25, 2022.

Following that expiration, we “blocked” our interest in one of the joint ventures through a process acceptable to OFAC, which had the effect of suspending our role in that joint venture.

We have been and continue actively working to conclude our interests in the joint ventures in compliance with the law.

Subsequent to the commencement of these sanctions, we previously had time-limited general licenses from the Office of Foreign Assets Control (“OFAC”) of the U.S.

Department of Treasury that permitted us to continue our participation, which expired on May 25, 2022.

Following that expiration, we “blocked” our interest in our Russian manufacturing joint venture through a process acceptable to OFAC, which had the effect of suspending our role in that joint venture.

During the three months ended March 31, 2022, we assessed the fair value of our gross assets related to the joint ventures for potential impairments and recorded asset impairment charges of approximately $36.0 million.

Our sales in Russia and Ukraine were $153.2 million and $86.2 million, respectively, during the year ended December 31, 2021.

Our sales subsequent to that date also have not been material.

During the three months ended December 31, 2022, we sold our interest in the Russian distribution joint venture.

Refer to Note 3 of our Condensed Consolidated Financial Statements for additional information.

8 unchanged sentences

See “Commitments, Off-Balance Sheet Arrangements and Contingencies” and Note 19 for additional information.

As of September 30, 2022, our investment in the finance joint ventures, which is included in “Investment in affiliates” on our Condensed Consolidated Balance Sheets, was approximately $372.9 million compared to $359.2 million as of December 31, 2021.

The total finance portfolio in our finance joint ventures was approximately $10.5 billion and $10.9 billion as of September 30, 2022 and December 31, 2021, respectively.

The total finance portfolio as of September 30, 2022 included approximately $8.9 billion of retail receivables and $1.6 billion of wholesale receivables from our dealers.

As of March 31, 2023, our investment in the finance joint ventures, which is included in “Investment in affiliates” on our Condensed Consolidated Balance Sheets, was approximately $408.5 million compared to $390.2 million as of December 31, 2022.

The total finance portfolio in our finance joint ventures was approximately $12.1 billion and $11.8 billion as of March 31, 2023 and December 31, 2022, respectively.

The total finance portfolio as of March 31, 2023 included approximately $9.8 billion of retail receivables and $2.3 billion of wholesale receivables from our dealers.

The total finance portfolio as of December 31, 2022 included approximately $9.5 billion of retail receivables and $2.3 billion of wholesale receivables from our dealers.

The wholesale receivables either were sold directly to AGCO Finance without recourse from our operating companies or AGCO Finance provided the financing directly to the dealers.

During the nine months ended September 30, 2022, we made no additional investments in our finance joint ventures and there were no dividends paid from our finance joint ventures.

For the nine months ended September 30, 2022, our share in the earnings of the finance joint ventures, included in “Equity in net earnings of affiliates” within our Condensed Consolidated Statements of Operations, was approximately $40.4 million compared to approximately $49.1 million for the same period in 2021.

In addition, during the nine months ended September 30, 2022, we recorded a write-down of our investment in our Russian finance joint venture of approximately $4.8 million, reflected within “Equity in net earnings of affiliates” in our Condensed Consolidated Statements of Operations.

During the three months ended March 31, 2023, we made no additional investments in our finance joint ventures and there were no dividends paid from our finance joint ventures.

For the three months ended March 31, 2023, our share in the earnings of the finance joint ventures, included in “Equity in net earnings of affiliates” within our Condensed Consolidated Statements of Operations, was approximately $15.9 million compared to approximately $11.3 million for the same period in 2022.

In addition, during the three months ended March 31, 2022, we recorded a write-down of our investment in our Russian finance joint venture of approximately $4.8 million, reflected within “Equity in net earnings of affiliates” in our Condensed Consolidated Statements of Operations.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations

3 unchanged sentences

We believe that the following facilities and available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future (in millions):

September 30, 2022 (1)

March 31, 2023 (1)

Credit facility, expires 2027 $ 706.2

5 unchanged sentences

(1) The amounts above are gross of debt issuance costs of an aggregate amount of approximately $3.5 million.

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

In December 2022, we, certain of our subsidiaries and Rabobank, and other named lenders entered into an amendment to our credit facility providing for a $1.25 billion multi-currency unsecured revolving credit facility (“credit facility”), which replaced our 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 our 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 our 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 our 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 our credit rating.

As of March 31, 2023, we had approximately $706.2 million outstanding borrowings under the revolving credit facility and had the ability to borrow approximately $543.8 million.

In June 2022, we entered into an uncommitted revolving credit facility that allows us to borrow up to €100.0 million (or approximately $108.9 million as of March 31, 2023).

The credit facility expires on December 31, 2026.

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

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

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

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

Interest accrues on amounts outstanding under the credit facility, at our option, at either (1) the secured overnight financing rate (“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 contains covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends.

We also have to fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio.

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

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

On October 6, 2021, we issued €600.0 million (or approximately $586.4 million as of September 30, 2022) of senior notes at an issue price of 99.993%.

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

As of March 31, 2023, we had no outstanding borrowings under the revolving credit facility and had the ability to borrow €100.0 million (or approximately $108.9 million).

On October 6, 2021, we issued €600.0 million (or approximately $653.5 million as of March 31, 2023) of senior notes at an issue price of 99.993%.

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

1 unchanged sentence

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

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

The credit facility expires on October 17, 2023.

Interest accrues on amounts outstanding under the credit facility, at our option, at either (1) LIBOR plus a margin ranging from 0.875% to 1.875% based on our 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 our credit rating.

The revolving credit facility requires that we are in compliance with applicable sanctions at the time of each draw.

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

As described above, our credit facility allows us 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 already are not available for loans denominated in other currencies.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

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

On January 25, 2019, we borrowed €250.0 million (or approximately $272.3 million as of March 31, 2023) from the European Investment Bank.

The loan matures on January 24, 2025.

4 unchanged sentences

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

In October 2019, we repaid an aggregate amount of €56.0 million (or approximately $61.1 million) of two of the 2016 term loans.

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

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

In August 2021, we repaid two of our 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, we repaid €72.5 million (or approximately $81.7 million) of one of our 2018 senior term loans due August 2023 with existing cash on hand.

In aggregate, as of September 30, 2022 we have indebtedness of approximately €319.5 million (or approximately $312.2 million) under a total group of six term loan agreements with remaining maturities ranging from August 2023 to August 2028.

As of September 30, 2022, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.90% to 2.26% and maturity dates between August 2023 and August 2028.

Of the 2016 term loans, we repaid an aggregate amount of €249.0 million in October 2019, October 2021 and April 2022.

Of the 2018 senior term loans, we repaid an aggregate amount of €144.5 million in August 2021 and February 2022.

In aggregate, as of March 31, 2023, we have indebtedness of approximately €319.5 million (or approximately $348.0 million) through a group of six remaining term loan agreements.

Two of the term loan agreements in the aggregate amount of €173.0 million (or approximately $188.4 million net of debt issuance costs, as of March 31, 2023) will mature in August and October 2023.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

expect to pay the amounts that mature during 2023 either through refinancing them under a similar program or cash on hand or available to us through our revolving credit facility.

As of March 31, 2023, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 1.20% to 2.26% and maturity dates between August 2023 and August 2028.

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

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

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

As of March 31, 2023 and December 31, 2022, we had other short-term borrowings due within one year of approximately $4.9 million and $8.9 million, respectively.

We are in compliance with the financial covenants contained in these facilities and expect to continue to maintain such compliance.

4 unchanged sentences

These agreements are accounted for as off-balance sheet transactions and have the effect of reducing accounts receivable and short-term liabilities by the same amount.

As of September 30, 2022 and December 31, 2021, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $1.2 billion and $1.3 billion, respectively.

As of March 31, 2023 and December 31, 2022, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $1.7 billion and $1.8 billion, respectively.

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

As of September 30, 2022 and December 31, 2021, the cash received from these arrangements was approximately $170.8 million and $215.4 million, respectively.

As of March 31, 2023 and December 31, 2022, the cash received from these arrangements was approximately $233.3 million and $226.0 million, respectively.

Our finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to our dealers.

The receivables associated with these arrangements are also without recourse to us.

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

As of March 31, 2023 and December 31, 2022, these finance joint ventures had approximately $108.3 million and $69.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

These arrangements are accounted for as off-balance sheet transactions.

3 unchanged sentences

To enable vendors to obtain payment in advance of our payment due dates to them, we have established programs in certain markets with financial institutions under which the vendors have the option to be paid by the financial institutions earlier than the payment due dates.

When vendors receive early payments they receive discounted amounts and we then pay the financial institutions the face amounts of the invoices on the payment due dates.

We do not reimburse vendors for any costs they incur for participation

Management’s Discussion and Analysis of Financial Condition and Results of Operations

in the programs.

Amounts owed to the financial institutions are presented as “Accounts payable” in our Condensed Consolidated Balance Sheets.

Should we not be able to negotiate extended payment terms with our vendors, or should financial institutions no longer be willing to participate in early payment programs with us, we would expect to have sufficient liquidity to timely pay our vendors without any material impact on us or our financial position.

Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness and stockholders’ equity, was 38.5% and 29.7% at September 30, 2022 and December 31, 2021, respectively.

Cash flows used in operating activities were approximately $295.1 million for the first nine months of 2022 compared to cash flows provided by operating activities of $41.5 million for the same period in 2021.

The increase in cash flow used in operating activities during the nine months ended September 30, 2022 was primarily as a result of a larger increase in inventories and accounts receivable and a lower increase in accounts payable as compared to the same period in 2021.

Supply chain disruptions have resulted in significantly higher raw material and work-in-process inventory levels during the first nine months in 2022 as compared to the same period of prior year.

Refer to Note 10 of our Condensed Consolidated Financial Statements for further discussion.

Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness and stockholders’ equity, was 32.5% and 29.7% at March 31, 2023 and December 31, 2022, respectively.

Cash flows used in operating activities were approximately $557.1 million for the first three months of 2023 compared to cash flows used in operating activities of $576.5 million for the same period in 2022.

Supply chain disruptions continue to result in higher raw material and work-in-process inventory levels during the first three months in 2023.

Our working capital requirements are seasonal, with investments in working capital typically building in the first half of the year and then reducing in the second half of the year.

We had approximately $2,083.6 million in working capital at September 30, 2022 as compared to $1,559.5 million at December 31, 2021 and $1,258.7 million at September 30, 2021.

Accounts receivable and inventories, combined, as of September 30, 2022 were approximately $915.4 million and $705.7 million higher, respectively, than at December 31, 2021 and September 30, 2021.

Accounts receivable and inventories, combined, at September 30, 2022 were higher than at December 31, 2021 and September 30, 2021 primarily due to the impact of supply chain constraints.

Capital expenditures for the first nine months of 2022 were approximately $270.5 million compared to $198.7 million for the same period in 2021.

We had approximately $2,344.5 million in working capital at March 31, 2023 as compared to $1,651.3 million at December 31, 2022 and $2,201.8 million at March 31, 2022.

Accounts receivable and inventories, combined, as of March 31, 2023 were approximately $762.5 million and $805.6 million higher, respectively, than at December 31, 2022 and March 31, 2022.

Accounts receivable and inventories, combined, at March 31, 2023 were higher than at December 31, 2022 and March 31, 2022 primarily due to higher net sales and the lingering impact of supply chain constraints.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Capital expenditures for the first three months of 2023 were approximately $125.3 million compared to $66.3 million for the same period in 2022 primarily due to capital investments made in our smart farming and precision agriculture manufacturing capacity.

We anticipate capital expenditures for the full year of 2023 will be approximately $375.0 million and will be used primarily to upgrade our system capabilities, improve our factory productivity, and to support the development and enhancement of new and existing products, including investments in smart farming, precision agriculture and digital technologies.

Share Repurchase and Dividends

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

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

In addition, on April 28, 2022, our Board of Directors approved an increase to our quarterly dividend commencing in the second quarter of 2022 by 20% to $0.24 per common share and declared a special variable dividend of $4.50 per common share that was paid during the second quarter of 2022.

During the three months ended March 31, 2023, we did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of March 31, 2023, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $110.0 million, which has no expiration date.

In addition, on April 27, 2023, our Board of Directors approved an increase to our quarterly dividend commencing in the second quarter of 2023 by 21% to $0.29 per common share and declared a special variable dividend of $5.00 per common share that will be paid during the second quarter of 2023.

COMMITMENTS, OFF-BALANCE SHEET ARRANGEMENTS AND CONTINGENCIES

We are party to a number of commitments and other financial arrangements, which may include off-balance sheet arrangements.

At September 30, 2022, we guaranteed indebtedness owed to third parties of approximately $27.9 million, primarily related to dealer and end-user financing of equipment.

At March 31, 2023, we guaranteed indebtedness owed to third parties of approximately $30.3 million, primarily related to dealer and end-user financing of equipment.

In addition, we had accrued approximately $16.7 million of outstanding guarantees of residual values that may be owed to our finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

1 unchanged sentence

We also sell a majority of our wholesale receivables in North America, Europe and Brazil to our U.S., Canadian, European and Brazilian finance joint ventures.

At September 30, 2022, we had outstanding designated and non-designated foreign currency contracts with a gross notional amount of approximately $3.3 billion.

At March 31, 2023, we had outstanding designated and non-designated foreign currency contracts with a gross notional amount of approximately $4.2 billion.

Refer to “Liquidity and Capital Resources” and “Item 3.

Quantitative and Qualitative Disclosures about Market Risk-Foreign Currency Risk Management,” as well as to Notes 12, 14 and 18 to our Condensed Consolidated Financial Statements, for further discussion of these matters.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quantitative and Qualitative Disclosures about Market Risk-Foreign Currency Risk Management,” as well as to Notes 13, 15 and 19 of our Condensed Consolidated Financial Statements, for further discussion of these matters.

Contingencies

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 our Brazilian operations and the related transfer of certain assets to our Brazilian subsidiaries.

Refer to Note 18 to our Condensed Consolidated Financial Statements for further discussion of these matters.

Global industry demand for farm equipment generally is expected to remain strong throughout 2022 with improved demand in South America, relatively flat demand in North America and a decline in demand in Europe compared to 2021.

Our net sales are expected to increase in 2022 compared to 2021, resulting from an increase in forecasted industry demand, as well as positive pricing, partially offset by unfavorable currency translation.

Operating margins are expected to improve from 2021 levels, reflecting increased net sales and production volumes and favorable pricing, net of material and labor cost inflation.

The improved profitability is expected to fund increases in engineering expenses and other technology investments to support our product development plans as well as our precision agriculture and digital initiatives.

Refer to Notes 12 and 19 of our Condensed Consolidated Financial Statements for further discussion of this matter.

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

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

District Court of Delaware against us 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.

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

Following customary post-trial procedures, the Court entered a judgement in our favor, and in April 2023 Deere filed a Notice of Appeal.

We have 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 us for some or all of the damages in the event of an adverse outcome in the litigation.

Refer to Note 19 of our Condensed Consolidated Financial Statements for further discussion of this matter.

Global industry demand for farm equipment, driven by continued strong commodity prices and healthy farm economics, is expected to be flat to moderately higher during 2023 in most major markets.

Our net sales are expected to increase in 2023 compared to 2022, resulting from improved net sales volumes and pricing.

Gross and operating margins are expected to improve from 2022 levels, reflecting the impact of higher net sales and production volumes, expected improvements in factory productivity, as well as pricing initiatives to offset material cost inflation.

Engineering expenses and other technology investments are expected to increase during 2023 compared to 2022 to support our product development plans as well as our precision agriculture and digital initiatives.

Our outlook is also based on current estimates of supplier component deliveries.

9 unchanged sentences

A description of critical accounting policies and related judgments and estimates that affect the preparation of our Condensed Consolidated Financial Statements is set forth in our Annual Report on Form 10-K for the year ended December 31, 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

19 unchanged sentences

• farm income, land values, debt levels and access to credit;

Management’s Discussion and Analysis of Financial Condition and Results of Operations

• pervasive livestock diseases;

12 unchanged sentences

• the conflict in Ukraine.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products.

2 unchanged sentences

It is unclear when these supply chain disruptions will be restored or what the ultimate impact on production, and consequently sales, will be.

As previously discussed, we have joint ventures with a sanctioned entity that operate in Russia, and we participated in these joint ventures under time-limited general licenses from OFAC of the U.S.

Department of the Treasury that expired on May 25, 2022.

Following that expiration, we “blocked” our interest in one of the joint ventures through a process acceptable to OFAC, which had the effect of terminating our role in that joint venture.

We have been and continue actively working to conclude our interests in the joint ventures in compliance with the law.

Accordingly, there could be other consequences related to the conclusion of the joint ventures that we do not foresee.

International relations in the Pacific Rim remain in a state of flux, with, for instance, changes over the last few years in the international tariff regimes between the United States and China in response to various political issues and heightened uncertainty regarding China-Taiwan relations.

1 unchanged sentence

Should events in that region or between governments in that region and the countries in which we manufacture products deteriorate, it could significantly adversely impact the availability of parts and components to us, and, correspondingly, our ability to produce products at targeted levels.

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

dollars, has broadened

significantly.

We have a wholly-owned subsidiary in Argentina that assembles and distributes agricultural equipment and replacement parts within Argentina.

The net monetary assets of our operations in Argentina denominated in pesos at the official government rate were approximately 3.9 billion pesos (or approximately $18.5 million) as of March 31, 2023, inclusive of approximately 6.7 billion pesos (or approximately $32.0 million) in cash and cash equivalents.

In addition, we have an obligation to reimburse AGCO Capital Argentina S.A., one of our 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 5.2 billion (or approximately $24.8 million) as of March 31, 2023, of which a majority is cash and cash equivalents.

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

In May 2022, we discovered that we had been subject to a sophisticated cyberattack.

The attack resulted in the

temporary closure of most of our production sites and parts operations.

A majority of the affected locations resumed operations

within approximately two weeks after the attack was discovered.

There was some data exfiltration as a result of the attack, and a portion of the exfiltrated data subsequently was released publicly.

We do not have significant retail operations, and we do not believe that the exfiltrated data included privacy protected consumer data or that the exfiltration was consequential.

We have invested heavily in maturing our information technology and cybersecurity operations and continue to review and improve our safeguards to minimize our exposure to future

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We do not believe the cost of remediation to the impacted systems will be material.

To date, the cost of those efforts has not been consequential.

We have cyber insurance coverage, and we filed a claim associated with the attack.

Any forward-looking statement should be considered in light of such important factors.

3 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis