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Item 1. Financial Statements

2023-11-08 compared with 2023-08-08 · 297 added, 232 removed, 832 unchanged (39% of the section changed)

3 unchanged sentences

(unaudited and in millions, except share amounts)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current Assets:

32 unchanged sentences

Common stock;

$ 0.01 par value, 150,000,000 shares authorized, 74,876,364 and 74,600,815 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

$ 0.01 par value, 150,000,000 shares authorized, 74,879,816 and 74,600,815 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 46.0 30.2

9 unchanged sentences

(unaudited and in millions, except per share data)

Three Months Ended June 30,

Three Months Ended September 30,

Net sales $ 3,455.5 $ 3,121.6

26 unchanged sentences

(unaudited and in millions, except per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Net sales $ 10,611.7 $ 8,752.5

27 unchanged sentences

(unaudited and in millions)

Three Months Ended June 30,

Three Months Ended September 30,

Net income $ 280.5 $ 237.9

3 unchanged sentences

Deferred gains and losses on derivatives, net of tax 0.5 1.3

Other comprehensive income (loss), net of reclassification adjustments 71.6 ( 126.0 )

Other comprehensive loss, net of reclassification adjustments

( 52.1 ) ( 91.3 )

Comprehensive income 228.4 146.6

Comprehensive (income) loss attributable to noncontrolling interests — —

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 228.5 $ 146.6

Six Months Ended June 30,

Nine Months Ended September 30,

Net income $ 832.3 $ 552.5

3 unchanged sentences

Deferred gains and losses on derivatives, net of tax ( 3.5 ) ( 5.2 )

Other comprehensive income, net of reclassification adjustments 118.3 10.7

Other comprehensive income (loss), net of reclassification adjustments

66.2 ( 80.6 )

Comprehensive income 898.5 471.9

5 unchanged sentences

(unaudited and in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net income $ 832.3 $ 552.5

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

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

Depreciation 168.9 157.1

3 unchanged sentences

Equity in net earnings of affiliates, net of cash received ( 53.0 ) ( 39.1 )

Deferred income tax benefit ( 22.6 ) ( 0.6 )

Deferred income tax (benefit) provision

Other 17.1 2.3

7 unchanged sentences

Total adjustments ( 629.6 ) ( 847.6 )

Net cash used in operating activities ( 365.0 ) ( 566.2 )

Net cash provided by (used in) operating activities

202.7 ( 295.1 )

Cash flows from investing activities:

2 unchanged sentences

Investments in unconsolidated affiliates ( 21.3 ) ( 1.6 )

Purchase of businesses, net, and net of cash acquired ( 0.9 ) ( 111.3 )

Purchase of businesses, net of cash acquired

( 0.9 ) ( 111.3 )

Other ( 4.0 ) —

21 unchanged sentences

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

The Company has a wholly-owned subsidiary in Turkey that distributes agricultural equipment and replacement parts within Turkey.

The Company has a wholly-owned subsidiary in Turkey that distributes agricultural equipment and replacement parts.

On the basis of currently available data related to inflation indices and as a result of the devaluation of the Turkish lira relative to the United States dollar, the Turkish economy was determined to be highly inflationary.

A highly inflationary economy is one where the cumulative inflation rate for the three years preceding the beginning of the reporting period, including interim reporting periods, is in excess of 100 percent.

For the six months ended and as of June 30, 2023, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 221.7 million and total assets of approximately 3.7 billion Turkish lira (or approximately $ 141.4 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 3.0 billion Turkish lira (or approximately $ 117.0 million) and approximately 2.6 billion Turkish lira (or approximately $ 98.5 million), respectively, as of June 30, 2023.

The monetary assets and liabilities were remeasured based on current published exchange rates.

The Turkish lira significantly depreciated during the month of June 2023, and as a result, the Company experienced and recorded foreign exchange losses during the second quarter of 2023 associated with the devaluation.

For the nine months ended and as of September 30, 2023, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 292.9 million and total assets of approximately 3.5 billion Turkish lira (or approximately $ 126.5 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 3.0 billion Turkish lira (or approximately $ 109.4 million) and approximately 2.3 billion Turkish lira (or approximately $ 85.4 million), respectively, as of September 30, 2023.

The monetary assets and liabilities were remeasured into U.S.

dollar based on exchange rates as of September 30, 2023.

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.

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.

The Company has a wholly-owned subsidiary in Argentina that assembles and distributes agricultural equipment and replacement parts within Argentina.

The Company has a wholly-owned subsidiary in Argentina that assembles and distributes agricultural equipment and replacement parts.

The Company determined that the Argentina economy was highly inflationary during the third quarter of 2018.

For the six months ended and as of June 30, 2023, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 93.6 million and total assets of approximately 44.4 billion pesos (or approximately $ 173.2 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 14.9 billion pesos (or approximately $ 58.0 million), inclusive of approximately 7.5 billion pesos (or approximately $ 29.2 million) in cash and cash equivalents, as of June 30, 2023.

The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 6.7 billion pesos (or approximately $ 28.4 million) as of June 30, 2023.

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 24.0 billion (or approximately $ 6.2 million) as of June 30, 2023, of which a majority is cash and cash equivalents.

For the nine months ended and as of September 30, 2023, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 164.6 million and total assets of approximately 82.8 billion pesos (or approximately $ 240.0 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 25.6 billion pesos (or approximately $ 74.4 million), inclusive of approximately 14.1 billion pesos (or approximately $ 41.0 million) in cash and cash equivalents, as of September 30, 2023.

The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 9.0 billion pesos (or approximately $ 26.2 million) as of September 30, 2023.

The monetary assets and liabilities were remeasured into U.S.

dollar based on exchange rates as of September 30, 2023.

The Company's finance joint venture in Argentina, AGCO Capital Argentina S.A.

("AGCO Capital") has net monetary assets denominated in pesos at the official government rate of approximately 7.1 billion (or approximately $ 20.5 million) as of September 30, 2023, of which a majority is cash and cash equivalents.

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

4 unchanged sentences

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 were required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

This delay applies to the Company’s equity method finance joint ventures, which were 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.

For the adoption of the standard by the Company’s finance joint ventures on January 1, 2023 under the modified retrospective approach, the Company recognized the cumulative effect of ASU 2016-13 as an adjustment to the opening balance of

Notes to Condensed Consolidated Financial Statements - Continued

adoption of the standard by the Company’s finance joint ventures on January 1, 2023 under the modified retrospective approach, the Company recognized the cumulative effect of ASU 2016-13 as an adjustment to the opening balance of stockholders’ equity as of January 1, 2023 within “Retained earnings.” The cumulative effect was approximately $ 5.5 million.

stockholders’ equity as of January 1, 2023 within “Retained earnings.” The cumulative effect was a reduction of approximately $ 5.5 million.

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

6 unchanged sentences

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 may impact 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).

On September 28, 2023, the Company entered into a Sale and Contribution Agreement (the "Agreement") with Trimble Inc.

("Trimble") and its currently 100%-owned subsidiary Trimble Solutions, LLC (the "Joint Venture").

Among other things, the Agreement provides for (i) the contribution by Trimble to the Joint Venture of Trimble’s agricultural business, excluding certain Global Navigation Satellite System and guidance technologies, (ii) the contribution by the Company to the Joint Venture of the Company’s interest in JCA Industries, LLC d/b/a JCA Technologies ("JCA") in exchange for membership interests in the Joint Venture, and (iii) the purchase by the Company from Trimble of membership interests in exchange for the payment by the Company to Trimble of $ 2.0 billion in cash, subject to customary working capital and other adjustments.

Immediately following the closing and as a result of the transaction, the Company will own an 85 % interest in the Joint Venture.

The closing is expected in the first half of 2024 and is subject to customary conditions, including compliance with antitrust and similar laws.

In connection with the planned Joint Venture, also on September 28, 2023, the Company entered into a bridge facility commitment letter with Morgan Stanley Senior Funding Inc.

("Morgan Stanley") pursuant to which Morgan Stanley has committed to provide, subject to the terms and conditions set forth therein, a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility").

During the three and nine months ended September 30, 2023, the Company paid $ 9.5 million in fees related to the Bridge Facility commitment which were recorded as a deferred asset included within “Other current assets” in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2023 and will be amortized to interest expense over the life of the commitment.

On May 2, 2022, the Company acquired 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.

9 unchanged sentences

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

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

The Company allocated the purchase price to the assets acquired and liabilities

Notes to Condensed Consolidated Financial Statements - Continued

assumed based on preliminary estimates of their fair values as of the acquisition date.

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

3 unchanged sentences

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

Notes to Condensed Consolidated Financial Statements - Continued

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):

8 unchanged sentences

In recent years, the Company has announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the U.S., Europe, South America, Africa and China, as well as the rationalization of its grain and protein business, in order to reduce costs in response to fluctuating global market demand.

Restructuring expenses activity during the three and six months ended June 30, 2023 is summarized as follows (in millions):

Restructuring expenses activity during the three and nine months ended September 30, 2023 is summarized as follows (in millions):

Employee Severance Other Related

3 unchanged sentences

First quarter 2023 cash activity ( 1.0 ) — ( 1.0 )

Balance as of March 31, 2023 $ 7.2 $ — $ 7.2

Second quarter 2023 provision 4.1 2.0 6.1

Second quarter 2023 cash activity ( 1.7 ) — ( 1.7 )

Foreign currency translation ( 0.4 ) — ( 0.4 )

Balance as of June 30, 2023 $ 9.2 $ 2.0 $ 11.2

Third quarter 2023 provision 0.8 — 0.8

Third quarter 2023 cash activity ( 2.8 ) ( 2.0 ) ( 4.8 )

Foreign currency translation ( 0.7 ) — ( 0.7 )

Balance as of September 30, 2023 $ 6.5 $ — $ 6.5

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

Notes to Condensed Consolidated Financial Statements - Continued

Employee Severance Other Related Closure Costs Total

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

First quarter 2022 provision 3.0 — 3.0

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

Foreign currency translation ( 0.3 ) 0.1 ( 0.2 )

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

Second quarter 2022 provision 0.8 — 0.8

Second quarter 2022 provision reversal ( 0.4 ) — ( 0.4 )

Second quarter 2022 cash activity ( 3.3 ) — ( 3.3 )

1 unchanged sentence

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

Third quarter 2022 provision 1.0 — 1.0

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

Foreign currency translation ( 0.6 ) — ( 0.6 )

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

Impairment Charges

2 unchanged sentences

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

Notes to Condensed Consolidated Financial Statements - Continued

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the three and six months ended June 30, 2023 and 2022 (in millions):

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

The Company recorded stock compensation expense as follows for the three and nine months ended September 30, 2023 and 2022 (in millions):

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

2023 2022 2023 2022

4 unchanged sentences

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

As of June 30, 2023, of the 10,000,000 shares reserved for issuance under the Plan, 3,591,131 shares were available for grant, assuming the maximum performance level, or 200 %, and target, or 100 %, total shareholder return are achieved related to the performance award grants discussed below.

The Plan allows the Company, under the direction of the Board of Directors’ Talent and Compensation Committee, to make grants of performance shares, stock appreciation rights, restricted stock units (“RSUs”) and restricted stock awards to employees, officers and non-employee directors of the Company.

As of September 30, 2023, of the 10,000,000 shares reserved for issuance under the Plan, 3,581,555 shares were available for grant, assuming the maximum performance level, or 200 %, and target, or 100 %, total shareholder return are achieved related to the performance award grants discussed below.

Notes to Condensed Consolidated Financial Statements - Continued

Long-Term Incentive Plan and Related Performance Awards

As of June 30, 2023, the Company had 806,222 performance shares outstanding with a weighted-average grant price of $ 128.93 per share, assuming the Company were to achieve its maximum level of performance, or 200 %, and that the total shareholder return modifier related to the 2023, 2022 and 2021 performances awards are achieved at target, or 100 %.

As of September 30, 2023, the Company had 808,032 performance shares outstanding with a weighted-average grant price of $ 128.89 per share, assuming the Company were to achieve its maximum level of performance, or 200 %, and that the total shareholder return modifier related to the 2023, 2022 and 2021 performances awards are achieved at target, or 100 %.

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 $ 48.5 million, and the weighted average period over which it is expected to be recognized is approximately two years .

Restricted Stock Unit Awards

During the six months ended June 30, 2023, 16,191 shares were issued related to RSUs previously granted in 2020 to certain executives, net of 11,277 shares withheld for taxes.

Restricted Stock Unit Awards ("RSUs")

During the nine months ended September 30, 2023, 16,191 shares were issued related to RSUs previously granted in 2020 to certain executives, net of 11,277 shares withheld for taxes.

In addition, the shares issued included an adjustment of 25 % additional shares based on a total margin improvement metric relative to the Company’s defined peer group that was applicable to executive RSU grants made in 2020.

At June 30, 2023, 211,269 restricted stock units were outstanding with weighted-average grant price of $ 121.57 per share.

At September 30, 2023, 215,671 restricted stock units were outstanding with weighted-average grant price of $ 122.52 per share.

The total compensation cost related to unearned restricted stock units not yet recognized was approximately $ 18.8 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

1 unchanged sentence

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

There were 98,259 SSARs outstanding as of June 30, 2023.

As of June 30, 2023, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.1 million, and the weighted average period over which it is expected to be recognized is approximately six months .

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

There were 98,259 SSARs outstanding as of September 30, 2023.

As of September 30, 2023, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.1 million.

Director Restricted Stock Grants

1 unchanged sentence

The 2023 grant was made on April 27, 2023 and equated to 12,069 shares of common stock, of which 10,524 shares of common stock were issued after shares were withheld for taxes.

The Company recorded stock compensation expense of approximately $ 1.5 million during the six months ended June 30, 2023 associated with these grants.

Notes to Condensed Consolidated Financial Statements - Continued

The Company recorded stock compensation expense of approximately $ 1.5 million during the nine months ended September 30, 2023 associated with these grants.

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the six months ended June 30, 2023 are summarized as follows (in millions):

Changes in the carrying amount of goodwill during the nine months ended September 30, 2023 are summarized as follows (in millions):

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

1 unchanged sentence

Foreign currency translation 0.2 4.7 ( 3.7 ) ( 3.5 ) ( 2.3 )

Balance as of June 30, 2023 $ 668.2 $ 94.2 $ 453.1 $ 111.5 $ 1,327.0

Balance as of September 30, 2023 $ 667.5 $ 90.7 $ 440.6 $ 109.7 $ 1,308.5

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

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

Changes in the carrying amount of acquired intangible assets during the six months ended June 30, 2023 are summarized as follows (in millions):

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

Notes to Condensed Consolidated Financial Statements - Continued

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2023 are summarized as follows (in millions):

Gross carrying amounts:

2 unchanged sentences

Foreign currency translation ( 0.7 ) ( 0.9 ) ( 0.7 ) ( 0.4 ) ( 2.7 )

Balance as of June 30, 2023 $ 193.5 $ 578.8 $ 152.4 $ 6.2 $ 930.9

Balance as of September 30, 2023 $ 191.1 $ 573.6 $ 149.9 $ 6.1 $ 920.7

Accumulated amortization:

3 unchanged sentences

Foreign currency translation ( 0.3 ) ( 0.6 ) ( 0.9 ) ( 0.1 ) ( 1.9 )

Balance as of June 30, 2023 $ 109.1 $ 463.3 $ 108.0 $ 1.5 $ 681.9

Balance as of September 30, 2023 $ 110.5 $ 467.8 $ 108.7 $ 1.6 $ 688.6

Indefinite-lived intangible assets:

2 unchanged sentences

Foreign currency translation ( 0.4 )

Balance as of June 30, 2023 $ 85.4

Balance as of September 30, 2023 $ 84.4

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, net, developed by the Company and marketed externally, was approximately $ 6.6 million as of June 30, 2023 and classified within “Intangible assets, net.” Amortization costs of external-use software were approximately $ 1.1 million for the six months ended June 30, 2023 and were classified within “Cost of goods sold.”

Notes to Condensed Consolidated Financial Statements - Continued

Long-term debt consisted of the following at June 30, 2023 and December 31, 2022 (in millions):

June 30, 2023 December 31, 2022

Amortization expense related to identifiable intangible assets was $ 14.4 million and $ 43.3 million for the three and nine months ended September 30, 2023, respectively, and $ 14.7 million and $ 45.4 million for the same periods ended September 30, 2022.

External-use software, net, developed by the Company and marketed externally, was approximately $ 6.3 million as of September 30, 2023 and classified within “Intangible assets, net.” Amortization expense related to external-use software was approximately $ 0.3 million and $ 1.4 million for the three and nine months ended September 30, 2023, respectively, and was classified within “Cost of goods sold.”

Long-term debt consisted of the following at September 30, 2023 and December 31, 2022 (in millions):

September 30, 2023 December 31, 2022

Credit facility, expires 2027 $ 866.6 $ 200.0

8 unchanged sentences

Total long-term indebtedness, less current portion $ 1,919.7 $ 1,264.8

Notes to Condensed Consolidated Financial Statements - Continued

Credit Facility

9 unchanged sentences

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 June 30, 2023, the Company had $ 927.9 million outstanding borrowings under the revolving credit facility and had the ability to borrow $ 322.1 million.

As of September 30, 2023, the Company had $ 866.6 million outstanding borrowings under the revolving credit facility and had the ability to borrow $ 288.4 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 $ 109.2 million as of June 30, 2023).

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 $ 105.8 million as of September 30, 2023).

The credit facility expires on December 31, 2026.

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

As of June 30, 2023, the Company had no outstanding borrowings under the revolving credit facility.

As of September 30, 2023, the Company had no outstanding borrowings under the revolving credit facility.

0.800 % Senior Notes Due 2028

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 655.0 million as of June 30, 2023) of senior notes at an issue price of 99.993 %.

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 634.9 million as of September 30, 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 %.

2 unchanged sentences

1.002 % Senior Term Loan Due 2025

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 272.9 million as of June 30, 2023) from the European Investment Bank.

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 264.5 million as of September 30, 2023) from the European Investment Bank ("EIB").

The loan matures on January 24, 2025.

1 unchanged sentence

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

Notes to Condensed Consolidated Financial Statements - Continued

Senior Term Loans Due Between 2023 and 2028

1 unchanged sentence

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

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

In aggregate, as of June 30, 2023, the Company had indebtedness of € 319.5 million (or approximately $ 348.8 million as of June 30, 2023) 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 $ 188.8 million net of debt issuance costs, as of June 30, 2023) will mature in August and October 2023.

Of the 2018 senior term loans, the Company repaid an aggregate amount of € 144.5 million in August 2021 and February 2022, and on August 1, 2023, the Company repaid its 2018 senior term loan due August 2023 in the amount of € 99.5 million (or approximately $ 109.2 million).

Notes to Condensed Consolidated Financial Statements - Continued

In aggregate, as of September 30, 2023, the Company had indebtedness of € 220.0 million (or approximately $ 232.8 million as of September 30, 2023) through a group of five remaining related term loan agreements.

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

As of June 30, 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.

As of September 30, 2023, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 1.33 % to 2.26 % and maturity dates between October 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.

On August 1, 2023, the Company repaid its 2018 senior term loan due August 2023 of € 99.5 million (or approximately $ 109.2 million).

On October 19, 2023, the Company repaid its € 73.5 million (or approximately $ 77.7 million) 2016 senior term loan due October 2023.

European Investment Bank ("EIB") Senior Term Loan

On September 29, 2023, the Company entered into a multi-currency Finance Contract with the EIB permitting the Company to borrow up to € 250.0 million (or approximately $ 264.5 million as of September 30, 2023) to fund up to 50 % of certain investments in research, development and innovation primarily in Germany, France and Finland during the period from 2023 through 2026.

The loans will mature at a date established at the time of the relevant draw, which generally will be between four years and ten years for an amortizing draw and between three years and six years for a non-amortizing draw.

Loans generally can be prepaid at any time upon the election of the Company and must be prepaid upon the occurrence of certain events.

At the time of each draw, the Company will be entitled to elect whether the borrowing will bear a fixed rate of interest equal to the EIB’s then customary rate or a floating rate of interest equal to SOFR (in the case of Dollar denominated loans) or EURIBOR (in the case of non-Dollar denominated loans), in each case plus a margin based upon the Company’s credit rating.

The Company also has to fulfill financial covenants with respect to a net leverage ratio and an interest coverage ratio.

There were no amounts outstanding under the EIB Senior Term Loan as of September 30, 2023.

Subsequent to the end of the quarter, on October 26, 2023, the Company borrowed € 250.0 million (approximately $ 263.7 million) under the arrangement.

Bridge Facility

As discussed in Note 2, in connection with the planned Joint Venture with Trimble Inc., on September 28, 2023, the Company entered into a bridge facility commitment letter with Morgan Stanley pursuant to which Morgan Stanley has committed to provide a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility").

Amounts outstanding under the Bridge Facility will accrue interest at a rate equal to, at the Company’s election, at either (1) the SOFR plus 0.1 % plus a margin ranging from 0.875 % to 2.625 % 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 1.625 % based on the Company’s credit rating, together with a duration fee based on the closing date of the transaction.

There are no amounts outstanding under the Bridge Facility as of September 30, 2023.

Other Short-Term Borrowings

As of June 30, 2023 and December 31, 2022, the Company had short-term borrowings due within one year of approximately $ 56.0 million and $ 8.9 million, respectively.

As of September 30, 2023 and December 31, 2022, the Company had short-term borrowings due within one year of approximately $ 25.9 million and $ 8.9 million, respectively.

Standby Letters of Credit and Similar Instruments

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

At June 30, 2023 and December 31, 2022, outstanding letters of credit totaled approximately $ 14.7 million and $ 14.4 million, respectively.

At September 30, 2023 and December 31, 2022, outstanding letters of credit totaled approximately $ 14.7 million and $ 14.4 million, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

RECOVERABLE INDIRECT TAXES

3 unchanged sentences

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

The Company had recorded approximately $ 109.3 million and $ 94.6 million, respectively, of VAT tax credits, net of reserves, as of June 30, 2023 and December 31, 2022.

Inventories at June 30, 2023 and December 31, 2022 were as follows (in millions):

June 30, 2023 December 31, 2022

The Company had recorded approximately $ 97.3 million and $ 94.6 million, respectively, of VAT tax credits, net of reserves, as of September 30, 2023 and December 31, 2022.

Inventories at September 30, 2023 and December 31, 2022 were as follows (in millions):

September 30, 2023 December 31, 2022

Finished goods $ 1,464.0 $ 994.9

3 unchanged sentences

Inventories, net $ 3,726.0 $ 3,189.7

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

The warranty reserve activity for the three and six months ended June 30, 2023 and 2022, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

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

The warranty reserve activity for the three and nine months ended September 30, 2023 and 2022, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

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

2023 2022 2023 2022

3 unchanged sentences

Foreign currency translation ( 21.1 ) ( 31.9 ) ( 3.5 ) ( 72.4 )

Balance at June 30 $ 727.2 $ 589.5 $ 727.2 $ 589.5

Balance at September 30 $ 735.2 $ 561.9 $ 735.2 $ 561.9

The Company’s agricultural equipment products generally are warranted against defects in material and workmanship for a period of one to four years .

The Company accrues for future warranty costs at the time of sale based on historical warranty experience.

Approximately $ 613.6 million, $ 546.0 million and $ 499.8 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2023, December 31, 2022 and June 30, 2022, respectively.

Approximately $ 113.6 million, $ 94.0 million and $ 89.7 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of June 30, 2023, December 31, 2022, and June 30, 2022, respectively.

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

Approximately $ 625.6 million, $ 546.0 million and $ 482.1 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2023, December 31, 2022 and September 30, 2022, respectively.

Approximately $ 109.6 million, $ 94.0 million and $ 79.8 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2023, December 31, 2022, and September 30, 2022, respectively.

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

When specifics of the recovery have been agreed upon with the Company’s suppliers through the confirmation of liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net.” Estimates of the amount of warranty claim recoveries to be received from the Company’s suppliers based upon contractual supplier arrangements are recorded within “Other current assets.”

Notes to Condensed Consolidated Financial Statements - Continued

SUPPLIER FINANCE PROGRAMS

6 unchanged sentences

The Company has no economic interest in a supplier’s decision to participate in the programs, and the Company has no direct financial relationship with the banks or other intermediaries as it relates to the supplier finance programs.

As of June 30, 2023, payment terms with the majority of the Company’s suppliers are generally 30 to 180 days, which correspond to the contractual terms, with rates that are based on market rates (such as SOFR) plus a credit spread.

As of September 30, 2023, payment terms with the majority of the Company’s suppliers are generally 30 to 180 days, which correspond to the contractual terms, with rates that are based on market rates (such as SOFR) plus a credit spread.

There are no assets pledged as security under the programs.

As of June 30, 2023, and December 31, 2022, the amount outstanding that remains unpaid to the banks or other intermediaries totaled $ 93.8 million and $ 121.5 million, respectively, and is reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.

As of September 30, 2023, and December 31, 2022, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 90.7 million and $ 121.5 million, respectively, and are reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.

NET INCOME PER COMMON SHARE

1 unchanged sentence

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

Notes to Condensed Consolidated Financial Statements - Continued

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and six months ended June 30, 2023 and 2022 is as follows (in millions, except per share data):

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

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022 is as follows (in millions, except per share data):

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

2023 2022 2023 2022

9 unchanged sentences

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 3.74 $ 3.18 $ 11.10 $ 7.58

There were no SSARs outstanding for the three and six months ended June 30, 2023 and 2022 that had an antidilutive impact.

At June 30, 2023 and December 31, 2022, the Company had approximately $ 321.3 million and $ 281.7 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of June 30, 2023 and December 31, 2022 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 89.2 million and $ 74.0 million, respectively.

In addition, the gross unrecognized income tax benefits as of June 30, 2023 and December 31, 2022 exclude certain deposits made in a foreign jurisdiction of approximately $ 46.0 million and $ 45.1 million, respectively, associated with an ongoing audit.

At June 30, 2023 and December 31, 2022, the Company had approximately $ 25.6 million and $ 10.4 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

At June 30, 2023 and December 31, 2022, the Company had approximately $ 298.7 million and $ 274.1 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 3.0 million and $ 2.8 million, respectively, of deferred tax assets related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” in the Company’s Condensed Consolidated Balance Sheets.

There were no SSARs outstanding for the three and nine months ended September 30, 2023 and 2022 that had an antidilutive impact.

Notes to Condensed Consolidated Financial Statements - Continued

At September 30, 2023 and December 31, 2022, the Company had approximately $ 312.9 million and $ 281.7 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of September 30, 2023 and December 31, 2022 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 91.8 million and $ 74.0 million, respectively.

In addition, the gross unrecognized income tax benefits as of September 30, 2023 and December 31, 2022 exclude certain deposits made in a foreign jurisdiction of approximately $ 25.7 million, net of $ 19.0 million refunds received, and $ 45.1 million, respectively, associated with an ongoing audit.

At September 30, 2023 and December 31, 2022, the Company had approximately $ 10.8 million and $ 10.4 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

At September 30, 2023 and December 31, 2022, the Company had approximately $ 304.7 million and $ 274.1 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 2.6 million and $ 2.8 million, respectively, of deferred tax assets related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” in the Company’s Condensed Consolidated Balance Sheets.

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

At June 30, 2023 and December 31, 2022, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 27.8 million and $ 25.8 million, respectively.

At September 30, 2023 and December 31, 2022, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 25.5 million and $ 25.8 million, respectively.

Generally, tax years 2019 through 2022 remain open to examination by taxing authorities in the United States and certain other foreign tax jurisdictions.

The Company and its subsidiaries are routinely examined by tax authorities in the United States and in various state, local and foreign jurisdictions.

As of June 30, 2023, a number of income tax examinations in foreign jurisdictions are ongoing.

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

As of September 30, 2023, a number of income tax examinations in foreign jurisdictions are ongoing.

The Company maintains a valuation allowance to reserve against its net deferred tax assets in certain foreign jurisdictions.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

2 unchanged sentences

The Company believes it is more likely than not that the Company will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

Notes to Condensed Consolidated Financial Statements - Continued

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

The amount of the tax disallowance through June 30, 2023, not including interest and penalties, would have been approximately 131.5 million Brazilian reais (or approximately $ 27.3 million).

The amount of the tax disallowance through September 30, 2023, not including interest and penalties, would have been approximately 131.5 million Brazilian reais (or approximately $ 26.3 million).

The amount ultimately in dispute would have been significantly greater because of interest and penalties.

The Company has been historically and currently advised by its legal and tax advisors that its position with respect to the deductions is allowable under the tax laws of Brazil.

The Company has been contesting the disallowance and historically has maintained that it is not likely that the assessment, interest or penalties would be required to be paid.

The ultimate outcome of the case would not have been determined until the Brazilian tax appeal process was completed and the Company’s legal advisors have indicated that would likely take several years.

The Company historically had been advised by its legal and tax advisors that its position with respect to the deductions was allowable under the tax laws of Brazil.

The Company contested the disallowance and maintained that it was not likely that the assessment, interest or penalties would require payment.

The ultimate outcome of the case would not have been determined until the Brazilian tax appeal process was completed.

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 could be considered for amnesty.

1 unchanged sentence

The amnesty program allowed companies to settle outstanding contested cases at a significant monetary discount.

After weighing various impacts involved with enrollment, including the avoidance of potential interest, penalties and legal costs, the Company concluded that it would enroll in the program prior to the quarter ended March 31, 2023.

The Company recorded its best estimate of the ultimate settlement under the amnesty program of approximately 182.6 million Brazilian reais (or approximately $ 34.8 million) within “Income tax provision” for the six months ended June 30, 2023, net of associated U.S.

After weighing various impacts involved with enrollment, including the avoidance of potential interest, penalties and legal costs, the Company enrolled in the program in the quarter ended March 31, 2023.

The Company recorded its best estimate of the ultimate settlement under the amnesty program of approximately 182.6 million Brazilian reais (or approximately $ 34.8 million) within “Income tax provision” for the nine months ended September 30, 2023, net of associated U.S.

income tax credits of approximately $ 8.4 million.

The Company has paid installment payments of 102.7 million Brazilian reais (or approximately $ 20.3 million) during the six months ended June 30, 2023 related to the program and expects to pay the remaining balance totaling approximately $ 16.8 million, inclusive of approximately $ 2.3 million of positive currency translation, through October 2023.

The Company paid installment payments related to the program of 166.7 million Brazilian reais (or approximately $ 33.4 million) during the nine months ended September 30, 2023 and paid the final installment payment totaling approximately $ 4.4 million in October 2023.

The payments were inclusive of $ 1.2 million of interest on payments and approximately $ 1.8 million of negative currency translation.

Notes to Condensed Consolidated Financial Statements - Continued

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

5 unchanged sentences

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

During 2023 and 2022, the Company designated certain foreign currency contracts as cash flow hedges of expected future sales and purchases.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 392.9 million and $ 364.8 million as of June 30, 2023 and December 31, 2022, respectively.

The Company designates certain foreign currency contracts as cash flow hedges of expected future sales and purchases.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 247.0 million and $ 364.8 million as of September 30, 2023 and December 31, 2022, respectively.

Steel Commodity Contracts

During 2023 and 2022, the Company designated certain steel commodity contracts as cash flow hedges of expected future purchases of steel.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 2.6 million and $ 0.9 million as of June 30, 2023 and December 31, 2022, respectively.

The Company designates certain steel commodity contracts as cash flow hedges of expected future purchases of steel.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 0.4 million and $ 0.9 million as of September 30, 2023 and December 31, 2022, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and six months ended June 30, 2023 and 2022 (in millions):

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and nine months ended September 30, 2023 and 2022 (in millions):

Recognized in Net Income

Three Months Ended June 30, Loss Recognized in Accumulated

Other Comprehensive Loss Classification of Loss Loss Reclassified from Accumulated

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

Three Months Ended September 30, Loss Recognized in Accumulated

Other Comprehensive Loss Classification of Gain (Loss)

Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Losses

Foreign currency contracts (1)

7 unchanged sentences

Recognized in Net Income

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

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

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

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

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

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Losses

Foreign currency contracts (1)

7 unchanged sentences

____________________________________

(1) The outstanding contracts as of June 30, 2023 range in maturity through December 2023.

(2) The outstanding contracts as of June 30, 2023 range in maturity through October 2023.

(1) The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

(2) The outstanding contracts as of September 30, 2023 range in maturity through November 2023.

Notes to Condensed Consolidated Financial Statements - Continued

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended June 30, 2023 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated derivative net losses as of March 31, 2023 $ ( 0.6 ) $ ( 0.2 ) $ ( 0.4 )

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended September 30, 2023 (in millions):

Before-Tax Amount Income Tax

After-Tax Amount

Accumulated derivative net losses as of June 30, 2023 $ ( 6.7 ) $ ( 1.8 ) $ ( 4.9 )

Net changes in fair value of derivatives ( 2.0 ) ( 0.2 ) ( 1.8 )

Net losses reclassified from accumulated other comprehensive loss into income 2.8 0.5 2.3

Accumulated derivative net losses as of June 30, 2023 $ ( 6.7 ) $ ( 1.8 ) $ ( 4.9 )

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the six months ended June 30, 2023 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated derivative net losses as of September 30, 2023 $ ( 5.9 ) $ ( 1.5 ) $ ( 4.4 )

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the nine months ended September 30, 2023 (in millions):

Before-Tax Amount Income Tax

After-Tax Amount

Accumulated derivative net losses as of December 31, 2022 $ ( 1.0 ) $ ( 0.1 ) $ ( 0.9 )

1 unchanged sentence

Net losses reclassified from accumulated other comprehensive loss into income 6.4 1.4 5.0

Accumulated derivative net losses as of June 30, 2023 $ ( 6.7 ) $ ( 1.8 ) $ ( 4.9 )

As of June 30, 2023, approximately $ 1.3 million of derivative realized net losses and $ 0.4 million of derivative realized net gains, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that had not yet been sold.

Accumulated derivative net losses as of September 30, 2023 $ ( 5.9 ) $ ( 1.5 ) $ ( 4.4 )

As of September 30, 2023, approximately $ 2.2 million and $ 0.2 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

5 unchanged sentences

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

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 270.6 million as of June 30, 2023) and will receive $ 300.0 million from the counterparties.

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 262.3 million as of September 30, 2023) and will receive $ 300.0 million from the counterparties.

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

During the six months ended June 30, 2023, the Company designated € 150.0 million (or approximately $ 163.7 million as of June 30, 2023) of its multi-currency revolving credit facility maturing December 2027 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

During the nine months ended September 30, 2023, the Company designated € 150.0 million (or approximately $ 158.7 million as of September 30, 2023) of its multi-currency revolving credit facility maturing December 2027 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

Notes to Condensed Consolidated Financial Statements - Continued

1 unchanged sentence

Notional Amount as of

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cross currency swap contract $ 300.0 $ 300.0

Foreign currency denominated debt 158.7 —

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three and six months ended June 30, 2023 and 2022 (in millions):

Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Six Months Ended

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

June 30, 2023 $ ( 5.7 ) $ 1.5 $ ( 4.2 ) $ ( 6.7 ) $ 1.7 $ ( 5.0 )

June 30, 2022 16.6 ( 4.3 ) 12.3 20.8 ( 5.4 ) 15.4

The following table summarizes the changes in the fair value of foreign currency denominated debt designated as a net investment hedge during the three and six months ended June 30, 2023 and 2022 (in millions):

Gain Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended Gain Recognized in Accumulated Other Comprehensive Loss for the Six Months Ended

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

June 30, 2023 $ 0.4 $ ( 0.3 ) $ 0.1 $ 1.3 $ ( 0.3 ) $ 1.0

June 30, 2022 — — — — — —

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three and nine months ended September 30, 2023 and 2022 (in millions):

Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Nine Months Ended

Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount

September 30, 2023 $ 4.1 $ ( 1.0 ) $ 3.1 $ ( 2.6 ) $ 0.7 $ ( 1.9 )

September 30, 2022 13.7 ( 3.5 ) 10.2 34.5 ( 8.9 ) 25.6

The following table summarizes the changes in the fair value of foreign currency denominated debt designated as a net investment hedge during the three and nine months ended September 30, 2023 and 2022 (in millions):

Gain Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended

Gain Recognized in Accumulated Other Comprehensive Loss for the Nine Months Ended

Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount

September 30, 2023 $ 2.4 $ ( 0.7 ) $ 1.7 $ 3.7 $ ( 1.0 ) $ 2.7

September 30, 2022 — — — — — —

Derivative Transactions Not Designated as Hedging Instruments

During 2023 and 2022, the Company entered into foreign currency contracts to economically hedge receivables and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the functional currency.

These contracts were classified as non-designated derivative instruments.

The Company enters into foreign currency contracts to economically hedge a portion of its receivables and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the functional currency.

These contracts are classified as non-designated derivative instruments.

Gains and losses on such contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and are immediately recognized into earnings.

As of June 30, 2023 and December 31, 2022, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 4.1 billion and $ 3.7 billion, respectively.

As of September 30, 2023 and December 31, 2022, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 5.1 billion and $ 3.7 billion, respectively.

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

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

Loss Recognized in Net Income for the Three Months Ended

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

Classification of Gain (Loss)

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Foreign currency contracts Other expense, net $ ( 9.9 ) $ ( 6.1 ) $ 39.2 $ ( 19.5 )

Notes to Condensed Consolidated Financial Statements - Continued

The table below sets forth the fair value of derivative instruments as of June 30, 2023 (in millions):

The table below sets forth the fair value of derivative instruments as of September 30, 2023 (in millions):

Asset Derivatives as of

June 30, 2023 Liability Derivatives as of

June 30, 2023

September 30, 2023 Liability Derivatives as of

September 30, 2023

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

8 unchanged sentences

__________________________________

(1) The outstanding contracts as of June 30, 2023 range in maturity through September 2023.

(1) The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

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

15 unchanged sentences

CHANGES IN STOCKHOLDERS’ EQUITY

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and six months ended June 30, 2023 and 2022 (in millions):

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and nine months ended September 30, 2023 and 2022 (in millions):

Stock Additional

3 unchanged sentences

Interests Total Stockholders’

Balance, March 31, 2023 $ 0.7 $ 24.7 $ 5,863.7 $ ( 1,756.4 ) $ 0.2 $ 4,132.9

Balance, June 30, 2023 $ 0.7 $ 36.1 $ 5,786.8 $ ( 1,684.8 ) $ 0.2 $ 4,139.0

Stock compensation — 10.2 — — — 10.2

1 unchanged sentence

— ( 0.3 ) — — — ( 0.3 )

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

Comprehensive income:

Net income — — 319.2 — — 319.2

Net income (loss)

— — 280.6 — ( 0.1 ) 280.5

Other comprehensive income, net of reclassification adjustments:

5 unchanged sentences

Payment of dividends to stockholders — — ( 21.7 ) — — ( 21.7 )

Balance, June 30, 2023 $ 0.7 $ 36.1 $ 5,786.8 $ ( 1,684.8 ) $ 0.2 $ 4,139.0

Balance, September 30, 2023 $ 0.7 $ 46.0 $ 6,045.7 $ ( 1,736.9 ) $ 0.1 $ 4,355.6

Stock Additional

8 unchanged sentences

Comprehensive income:

Net income — — 551.8 — — 551.8

Net income (loss)

— — 832.4 — ( 0.1 ) 832.3

Other comprehensive income, net of reclassification adjustments:

4 unchanged sentences

Adoption of ASU 2016-13 by finance joint ventures — — ( 5.5 ) — — ( 5.5 )

Balance, June 30, 2023 $ 0.7 $ 36.1 $ 5,786.8 $ ( 1,684.8 ) $ 0.2 $ 4,139.0

Balance, September 30, 2023 $ 0.7 $ 46.0 $ 6,045.7 $ ( 1,736.9 ) $ 0.1 $ 4,355.6

Notes to Condensed Consolidated Financial Statements - Continued

4 unchanged sentences

Interests Total Stockholders’

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

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

Stock compensation — 7.8 — — — 7.8

2 unchanged sentences

Comprehensive income:

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

— — 237.9 — — 237.9

Other comprehensive loss, net of reclassification adjustments:

7 unchanged sentences

— — ( 17.9 ) — — ( 17.9 )

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

Change in noncontrolling interest — — — — 0.1 0.1

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

Stock Additional

20 unchanged sentences

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

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

Change in noncontrolling interest — — — — 0.1 0.1

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

Notes to Condensed Consolidated Financial Statements - Continued

Total comprehensive income (loss) attributable to noncontrolling interests for the three and six months ended June 30, 2023 and 2022 was as follows (in millions):

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

Total comprehensive loss attributable to noncontrolling interests for the three and nine months ended September 30, 2023 and 2022 was as follows (in millions):

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

2023 2022 2023 2022

Net income (loss) $ — $ ( 0.1 ) $ — $ ( 14.9 )

$ ( 0.1 ) $ — $ ( 0.1 ) $ ( 14.9 )

Other comprehensive income:

Foreign currency translation adjustments — — — 0.9

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

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the six months ended June 30, 2023 (in millions):

Total comprehensive loss

$ ( 0.1 ) $ — $ ( 0.1 ) $ ( 14.0 )

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the nine months ended September 30, 2023 (in millions):

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

4 unchanged sentences

Other comprehensive income (loss), net of reclassification adjustments 5.6 ( 3.5 ) 64.1 66.2

Accumulated other comprehensive loss, June 30, 2023

Accumulated other comprehensive loss, September 30, 2023

$ ( 225.6 ) $ ( 4.4 ) $ ( 1,506.9 ) $ ( 1,736.9 )

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three and six months ended June 30, 2023 and 2022 (in millions):

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three and nine months ended September 30, 2023 and 2022 (in millions):

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

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Three Months Ended June 30, 2023 (1)

Three Months Ended June 30, 2022 (1)

Details about Accumulated Other Comprehensive Loss Components Three Months Ended September 30, 2023 (1)

Three Months Ended September 30, 2022 (1)

Net losses on foreign currency contracts $ 3.0 $ 5.5 Cost of goods sold

Net losses on commodity contracts 0.5 2.8 Cost of goods sold

Net (gains) losses on commodity contracts

( 0.2 ) 1.1 Cost of goods sold

Reclassification before tax 2.8 6.6

Income tax benefit

( 0.5 ) ( 1.5 ) Income tax provision

4 unchanged sentences

Reclassification before tax 2.5 2.0

Income tax benefit

( 0.6 ) ( 0.6 ) Income tax provision

2 unchanged sentences

__________________________________

(1) Losses included within the Condensed Consolidated Statements of Operations for the three months ended June 30, 2023 and 2022, respectively.

(1) Losses included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2023 and 2022, respectively.

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

3 unchanged sentences

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Six Months Ended June 30, 2023 (1)

Six Months Ended June 30, 2022 (1)

Details about Accumulated Other Comprehensive Loss Components Nine Months Ended September 30, 2023 (1)

Nine Months Ended September 30, 2022 (1)

Net losses on foreign currency contracts $ 6.5 $ 8.2 Cost of goods sold

Net losses on commodity contracts 0.1 1.5 Cost of goods sold

Net (gains) losses on commodity contracts

( 0.1 ) 2.6 Cost of goods sold

Reclassification before tax 6.4 10.8

Income tax benefit

( 1.4 ) ( 2.6 ) Income tax provision

4 unchanged sentences

Reclassification before tax 7.5 6.6

Income tax benefit

( 1.9 ) ( 1.8 ) Income tax provision

2 unchanged sentences

__________________________________

(1) Losses included within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2023 and 2022, respectively.

(1) Losses included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022, respectively.

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

1 unchanged sentence

Share Repurchase Program

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

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

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

1 unchanged sentence

All shares received under the ASR agreement were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets.

During the three and six months ended June 30, 2023, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of June 30, 2023, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 110.0 million, which has no expiration date.

During the three and nine months ended September 30, 2023, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of September 30, 2023, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 110.0 million, which has no expiration date.

On April 27, 2023, the Company's Board of Directors approved an increase to its 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 was paid during the second quarter of 2023.

During the three months ended September 30, 2023 and September 30, 2022, the Company declared and paid cash dividends of $ 0.29 and $ 0.24 per common share, respectively.

During the nine months ended September 30, 2023 and September 30, 2022, the Company declared and paid cash dividends of $ 5.81 and $ 5.16 per common share, respectively.

On October 26, 2023, the Company approved the quarterly dividend of $ 0.29 per common share to be paid on December 15, 2023, to all stockholders of record as of the close of business November 15, 2023.

Notes to Condensed Consolidated Financial Statements - Continued

ACCOUNTS RECEIVABLE SALES AGREEMENTS

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

As of June 30, 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 $ 1.9 billion and $ 1.8 billion, respectively.

For the nine months ended September 30, 2023 and September 30, 2022, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 2.1 billion and $ 1.2 billion, respectively.

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays

an annual fee related to the servicing of the receivables sold.

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

Notes to Condensed Consolidated Financial Statements - Continued

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.

2 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, the cash received from these arrangements was approximately $ 227.4 million and $ 226.0 million, respectively.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 30.3 million and $ 58.8 million during the three and six months ended June 30, 2023, respectively.

Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 10.2 million and $ 18.1 million, respectively, during the three and six ended June 30, 2022, respectively.

For the nine months ended September 30, 2023 and September 30, 2022, the cash received from these arrangements was approximately $ 218.7 million and $ 170.8 million, respectively.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 40.5 million and $ 99.3 million during the three and nine months ended September 30, 2023, respectively.

Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 20.4 million and $ 38.5 million, respectively, during the three and nine ended September 30, 2022, respectively.

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

1 unchanged sentence

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

As of June 30, 2023 and December 31, 2022, these finance joint ventures had approximately $ 130.0 million and $ 69.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

As of September 30, 2023 and December 31, 2022, these finance joint ventures had approximately $ 139.4 million and $ 69.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

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

3 unchanged sentences

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.

Notes to Condensed Consolidated Financial Statements - Continued

PENSION AND POSTRETIREMENT BENEFIT PLANS

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and six months ended June 30, 2023 and 2022 are set forth below (in millions):

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

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and nine months ended September 30, 2023 and 2022 are set forth below (in millions):

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

Pension benefits 2023 2022 2023 2022

5 unchanged sentences

Net periodic pension cost $ 4.9 $ 4.7 $ 14.5 $ 14.6

Notes to Condensed Consolidated Financial Statements - Continued

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

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

Postretirement benefits 2023 2022 2023 2022

4 unchanged sentences

The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations.

The following table summarizes the activity in accumulated other comprehensive loss related to the Company's defined pension and postretirement benefit plans during the six months ended June 30, 2023 (in millions):

Before-Tax Amount Income Tax After-Tax Amount

Accumulated other comprehensive loss, December 31, 2022 $ ( 304.4 ) $ ( 73.2 ) $ ( 231.2 )

Amortization of prior service cost 0.8 0.2 0.6

Amortization of net actuarial losses 4.2 1.1 3.1

Accumulated other comprehensive loss as of June 30, 2023 $ ( 299.4 ) $ ( 71.9 ) $ ( 227.5 )

During the six months ended June 30, 2023, the Company made approximately $ 18.3 million of contributions to its defined pension benefit plans.

During the nine months ended September 30, 2023, the Company made approximately $ 26.7 million of contributions to its defined pension benefit plans.

The Company currently estimates its minimum contributions for 2023 to its defined pension benefit plans will aggregate approximately $ 34.6 million.

During the six months ended June 30, 2023, the Company made approximately $ 0.8 million of contributions to its postretirement health care and life insurance benefit plans.

During the nine months ended September 30, 2023, the Company made approximately $ 1.2 million of contributions to its postretirement health care and life insurance benefit plans.

The Company currently estimates that it will make approximately $ 1.7 million of contributions to its postretirement health care and life insurance benefit plans during 2023.

17 unchanged sentences

See Note 13 for additional information on the Company’s derivative instruments and hedging activities.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are summarized below (in millions):

As of June 30, 2023

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 are summarized below (in millions):

As of September 30, 2023

Level 1 Level 2 Level 3 Total

6 unchanged sentences

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

At June 30, 2023, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 500.6 million (or approximately $ 546.4 million as of June 30, 2023), compared to the carrying value of € 600.0 million (or approximately $ 655.0 million as of June 30, 2023).

At September 30, 2023, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 496.9 million (or approximately $ 525.8 million as of September 30, 2023), compared to the carrying value of € 600.0 million (or approximately $ 634.9 million as of September 30, 2023).

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

6 unchanged sentences

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

Segment results for the three and six months ended June 30, 2023 and 2022 and assets as of June 30, 2023 and December 31, 2022 based on the Company’s reportable segments are as follows (in millions):

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

Segment results for the three and nine months ended September 30, 2023 and 2022 and assets as of September 30, 2023 and December 31, 2022 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended September 30, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments

Net sales $ 941.1 $ 719.8 $ 1,586.9 $ 207.7 $ 3,455.5

6 unchanged sentences

Capital expenditures 57.8 15.7 51.4 6.4 131.3

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

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

Net sales $ 2,861.0 $ 1,822.2 $ 5,281.5 $ 647.0 $ 10,611.7

6 unchanged sentences

Capital expenditures 88.7 36.9 133.1 11.8 270.5

As of June 30, 2023 $ 1,990.5 $ 1,577.4 $ 3,039.6 $ 847.1 $ 7,454.6

As of September 30, 2023 $ 1,943.1 $ 1,551.4 $ 2,932.7 $ 875.1 $ 7,302.3

As of December 31, 2022 1,790.3 1,259.8 2,475.6 650.5 6,176.2

1 unchanged sentence

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

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

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

2023 2022 2023 2022

6 unchanged sentences

Consolidated income from operations $ 423.6 $ 332.1 $ 1,307.3 $ 799.6

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Segment assets $ 7,302.3 $ 6,176.2

7 unchanged sentences

COMMITMENTS AND CONTINGENCIES

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of June 30, 2023 and December 31, 2022 were as follows (in millions):

June 30, 2023 December 31, 2022

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2023 and December 31, 2022 were as follows (in millions):

September 30, 2023 December 31, 2022

Operating Leases (1)

18 unchanged sentences

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

At June 30, 2023, the Company had outstanding guarantees of indebtedness owed to related and third parties of approximately $ 33.1 million, primarily related to dealer and end-user financing of equipment.

Such guarantees generally obligate the Company to repay outstanding finance obligations owed to financial institutions if dealers or end users default on such loans through 2028.

Losses under such guarantees historically have been insignificant.

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.

At September 30, 2023, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A.

(“AGCO Capital”) of approximately $ 36.6 million.

Such guarantees generally obligate the Company to repay outstanding finance obligations owed to AGCO Capital if end users default on such loans to the extent that, due to non-Credit Risk, the end users are not able, or not required, to pay their loans, or are required to pay in a different currency than the one agreed in their loan.

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

1 unchanged sentence

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

In addition, at June 30, 2023, the Company had accrued approximately $ 15.4 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

In addition, at September 30, 2023, the Company had accrued approximately $ 14.7 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under these guarantees is approximately $ 185.0 million.

At June 30, 2023, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 4,474.4 million.

The outstanding contracts as of June 30, 2023 range in maturity through December 2023.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 2.6 million that range in maturity through October 2023.

At September 30, 2023, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 5,305.5 million.

The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 0.4 million that range in maturity through November 2023.

Notes to Condensed Consolidated Financial Statements - Continued

2 unchanged sentences

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

Refer to Note 15 for discussion of the Company’s accounts receivable sales agreements.

Contingencies

7 unchanged sentences

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

Following customary post-trial procedures, the Court entered a judgement in the Company’s favor, and in April 2023 Deere filed a Notice of Appeal with the U.S.

Following customary post-trial procedures, the Court entered a judgement in the Company’s favor, and Deere appealed the judgment to the U.S.

Court of Appeals for the Federal Circuit.

The parties currently are briefing of the appeal.

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

6 unchanged sentences

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

Significant changes in the balance of contract liabilities for the three and six months ended June 30, 2023 and 2022 were as follows (in millions):

Three Months Ended June 30,

Significant changes in the balance of contract liabilities for the three and nine months ended September 30, 2023 and 2022 were as follows (in millions):

Three Months Ended September 30,

Balance at beginning of period $ 274.6 $ 217.7

3 unchanged sentences

Foreign currency translation ( 5.8 ) ( 12.0 )

Balance at June 30 $ 274.6 $ 217.7

Six Months Ended June 30,

Balance at September 30 $ 284.6 $ 209.4

Nine Months Ended September 30,

Balance at beginning of period $ 239.0 $ 226.2

3 unchanged sentences

Foreign currency translation ( 1.1 ) ( 27.5 )

Balance at June 30 $ 274.6 $ 217.7

Balance at September 30 $ 284.6 $ 209.4

The contract liabilities are classified as either “Accrued expenses” or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets.

During the three and six months ended June 30, 2023, the Company recognized approximately $ 34.3 million and $ 70.0 million of revenue that was recorded as a contract liability at the beginning of 2023.

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

During the three and nine months ended September 30, 2023, the Company recognized approximately $ 26.9 million and $ 96.9 million of revenue that was recorded as a contract liability at the beginning of 2023.

During the three and nine months ended September 30, 2022, the Company recognized approximately $ 22.0 million and $ 74.2 million of revenue that was recorded as a contract liability at the beginning of 2022.

Remaining Performance Obligations

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2023 are $ 85.2 million for the remainder of 2023, $ 83.3 million in 2024, $ 51.9 million in 2025, $ 25.5 million in 2026 and $ 14.2 million thereafter, and relate primarily to extended warranty contracts.

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023 are $ 33.3 million for the remainder of 2023, $ 97.4 million in 2024, $ 71.5 million in 2025, $ 37.8 million in 2026 and $ 24.5 million thereafter, and relate primarily to extended warranty contracts.

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

1 unchanged sentence

Disaggregated Revenue

Net sales for the three months ended June 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the three months ended September 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America

23 unchanged sentences

$ 941.1 $ 719.8 $ 1,586.9 $ 207.7 $ 3,455.5

____________________________________

(1) Rounding may impact the summation of amounts.

Notes to Condensed Consolidated Financial Statements - Continued

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

North America South America Europe/Middle East (1)

Asia/Pacific/Africa Consolidated (1)

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

North America (1)

South America Europe/Middle East (1)

Asia/Pacific/Africa (1)

Consolidated (1)

Primary geographical markets:

24 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the six months ended June 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the nine months ended September 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

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

23 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

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

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

North America (1)

27 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements