What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-02-27 compared with 2023-03-01 · 272 added, 278 removed, 259 unchanged (68% of the section changed)

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Our common stock is listed on the New York Stock Exchange and trades under the symbol AGCO.

We have a history of paying quarterly cash dividends.

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.

While we currently expect a cash dividend to be paid in the future, future dividend payments will depend on our earnings, capital requirements, financial condition, and other factors considered relevant by the Company's Board of Directors.

As of the close of business on February 20, 2024, the closing stock price was $106.47, and there were 448 stockholders of record (this number does not include stockholders who hold their stock through brokers, banks and other nominees).

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Issuer Purchases of Equity Securities

There were no purchases of our common stock made by or on our behalf during the three months ended December 31, 2022.

The information required by Item 301 and Item 302 of Regulation S-K has been omitted as we have elected to adopt the changes to Item 301 and Item 302 of Regulation S-K contained in SEC Release No.

The table below sets forth information with respect to purchases of our common stock made by or on behalf of us during the three months ended December 31, 2023:

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (2)

October 1, 2023 through

October 31, 2023

— $ — — $ 110.0

November 1, 2023 through

November 30, 2023 (1)

371,669 $ 114.08 371,669 $ 57.0

December 1, 2023 through

December 31, 2023

— $ — — $ 57.0

Total 371,669 $ 114.08 371,669 $ 57.0

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(1) In November 2023, we entered into an ASR agreement with a third-party financial institution to repurchase $53.0 million of our common stock.

The ASR agreement resulted in the initial delivery of 371,669 shares of our common stock, representing approximately 80% of the shares to be purchased in connection with the transaction.

In January 2024, the remaining 82,883 shares under the ASR agreement were delivered.

The average price paid per share related to the ASR agreement reflected in the table above was derived using the fair market value of the shares on the date the initial 371,669 shares were delivered.

The amount that may yet be purchased under our share repurchase programs, as presented in the above table, was reduced by the entire $53.0 million payment related to the ASR agreement.

Refer to Note 16 of our Consolidated Financial Statements contained in Item 8, "Financial Statements and Supplementary Data," for further discussion of this matter.

(2) The remaining authorized amount to be repurchased is $57.0 million, which has no expiration date.

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

We are a leading manufacturer and distributor of agricultural equipment and related replacement parts throughout the world.

We sell a full range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage equipment, seeding and tillage equipment, implements, and grain storage and protein production systems.

We are a global leader in the design, manufacture and distribution of agricultural machinery and precision agriculture technology.

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

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In addition, we provide retail and wholesale financing through our finance joint ventures with Rabobank.

The COVID-19 pandemic and other economic factors continue to create volatility in the global economy, initially through government-mandated facility closures, higher absentee rates, and reduced production at both our factories and the factories that supply us with parts and components, and, more recently, through supply chain disruptions and logistical challenges.

In addition, we have had to incur various costs related to preventing the spread of COVID-19, including changes to our factories and other facilities and those related to enabling remote work.

We expect COVID-19 to continue to impact our business, although the manner and extent to which it impacts us will depend on future developments, including the duration of the pandemic, the timing, distribution and impact of vaccinations, and possible mutations of the virus that are more contagious or resistant to current vaccines.

Measures taken by governments around the world, as well as businesses, including us, and the general public in order to limit the spread of COVID-19 will impact our business as well.

These factors, along with increasing industrial demand, could negatively affect production levels, particularly caused by delays in the receipts of parts and components.

Supply chain issues of particular concern include a wide range of parts and components with a portion arising from the global semiconductor shortage.

We may continue to face supplier bottlenecks and delays in all regions as well as challenges with freight logistics, and we continue to work to mitigate the impact of these issues in order to meet increased end-market demand.

We sell our equipment and replacement parts to our independent dealers, distributors and other customers.

We sell our equipment, precision agriculture technology and replacement parts to our independent dealers, distributors and other customers.

A large majority of our sales are to independent dealers and distributors that sell our products to end users.

To the extent practicable, we attempt to sell products to our dealers and distributors on a level basis throughout the year to reduce the effect of seasonal demands on our manufacturing operations and to minimize our investment in inventories.

However, retail sales by dealers to farmers are highly seasonal and are a function of the timing the planting and harvesting seasons.

However, retail sales by dealers to farmers are highly seasonal and are a function of the timing of the planting and harvesting seasons.

In certain markets, particularly in North America, there is often a time lag, which varies based on the timing and level of retail demand, between our sale of the equipment to the dealer and the dealer’s sale to a retail customer.

Financial Highlights

The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items included in our Consolidated Statements of Operations:

The following table sets forth the percentage relationship to net sales of certain items included in our Consolidated Statements of Operations:

Years Ended December 31,

$ % of Net Sales (1)

Net sales $ 14,412.4 100.0 % $ 12,651.4 100.0 %

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Restructuring expenses 11.9 0.1 6.1 —

Bad debt expense — — 0.2

Income from operations 1,700.4 11.8 1,265.4 10.0

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Net income 1,171.3 8.1 874.7 6.9

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

Net loss attributable to noncontrolling interests

0.1 — 14.9 0.1

Net income attributable to AGCO Corporation and subsidiaries $ 1,171.4 8.1 % $ 889.6 7.0 %

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Net income attributable to AGCO Corporation and subsidiaries for 2023 was $1,171.4 million, or $15.63 per diluted share, compared to $889.6 million, or $11.87 per diluted share, for 2022.

Net sales for 2022 were approximately $12,651.4 million, or 13.6% higher than 2021, primarily due to robust high horsepower tractor end-market demand and favorable pricing, which helped to offset the negative impacts of currency translation, supply chain constraints and inflationary pressures.

Regionally, net sales were higher in all regions during 2022 compared to 2021, excluding currency translation.

Income from operations was approximately $1,265.4 million in 2022 compared to approximately $1,001.4 million in 2021.

The increase in income from operations during 2022 was primarily the result of higher net sales and production volumes along with significant pricing to offset inflationary cost increases.

Income from operations during 2022 was impacted by impairment charges recorded during the first quarter related to our joint ventures in Russia of approximately $36.0 million.

Net income per diluted share was impacted by these factors, as well as restructuring expenses.

Regionally, income from operations in Europe/Middle East (“EME”) increased by approximately $28.7 million in 2022 compared to 2021, driven primarily by higher net sales and increased production volumes as well as positive pricing realization, which offset higher material costs and engineering expenses.

In our North American region, income from operations increased by approximately $40.7 million compared to the prior year.

Higher net sales and production levels, as well as favorable net pricing impacts contributed to the improvement in the region and helped to offset higher engineering expenses and material cost inflation.

In South America, income from operations increased approximately $241.7 million in 2022 compared to 2021.

The increase reflects increased net sales and production volumes, a better sales mix and significant price realization, offsetting increasing material costs.

Income from operations in our Asia/Pacific/Africa (“APA”) region increased

approximately $3.0 million in 2022 compared to 2021, primarily due to higher net sales and an improved product mix which offset higher engineering expenses and material cost inflation.

Industry Market Conditions

Supportive farm economics are resulting in robust demand for larger agricultural equipment as farmers continue to replace aging machinery.

Supply chain constraints have limited global industry production and dealer inventory levels of new and used large agricultural equipment remain below normal levels across the industry.

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

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

In North America, industry unit retail sales of utility and high horsepower tractors decreased approximately 5.0% in 2022 compared to 2021.

Industry unit retail sales of combines increased approximately 14.6% in 2022 compared to 2021.

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

In Western Europe, industry unit retail sales of tractors for 2022 decreased approximately 8.5% compared to 2021.

Industry unit retail sales of combines for 2022 increased approximately 10.2% compared to 2021.

Industry retail tractors sales were restricted by supply chain challenges during 2022.

In addition, farmer sentiment in the region has been negatively impacted by the conflict in Ukraine, input cost inflation and while lessening, looming energy concerns.

In South America, industry unit retail sales of tractors for 2022 increased approximately 3.2% compared to 2021.

Industry unit retail sales of combines for 2022 decreased approximately 1.6% compared to 2021.

The improved demand in tractors was primarily in Argentina and smaller South American markets, offset by modestly lower sales in Brazil despite strong demand for large agricultural equipment.

Healthy crop production and continued expansion in planted acreage, as well as favorable margins, driven by supportive exchange rates, continue to support farm profitability and investments in equipment.

Net sales for 2023 were $14,412.4 million, or 13.9% higher than 2022, primarily due to favorable pricing impacts, favorable product mix related to high horsepower tractors, combines, hay tools and application tools and favorable currency impacts.

Income from operations was $1,700.4 million in 2023 compared to $1,265.4 million in 2022.

The increase in income from operations during 2023 was primarily the result of positive net pricing and favorable product mix, partially offset by higher selling, general and administrative expenses ("SG&A expenses") and engineering expenses.

We estimate that worldwide average price increases were approximately 10.0% and 11.6% in 2023 and 2022, respectively.

Consolidated net sales of tractors and combines, which comprised approximately 64.9% of our net sales in 2023, increased approximately 1.7% in 2023 compared to 2022.

Unit sales of tractors and combines decreased approximately 11.7% during 2023 compared to 2022.

The primary driver of the decrease in unit sales was lower sales of compact and mid-range tractors.

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

Overall, global production hours increased approximately 3.6% during 2023 compared to 2022.

The increase was primarily due to robust market demand as well as easing of supply chain and logistics disruptions experienced in 2022.

Results of Operations

Net sales for 2022 were $12,651.4 million compared to $11,138.3 million for 2021, primarily as a result of improved high horsepower tractor end-market demand, which resulted in a favorable sales mix, as well as favorable pricing impacts, partially offset by unfavorable foreign currency translation.

Gross profit as a percentage of net sales increased during 2023 compared to 2022, primarily due to positive net pricing impacts and favorable product mix.

SG&A expenses as a percentage of net sales, were higher during 2023 compared to 2022.

The absolute level of SG&A expenses increased during 2023 primarily due to higher compensation costs and Trimble Ag joint venture-related transaction costs.

We recorded stock compensation expense of $44.6 million and $32.7 million during 2023 and 2022, respectively, within SG&A expenses, as is more fully explained in Note 15 of our Consolidated Financial Statements.

Engineering expenses as a percentage of net sales, were higher during 2023 compared to 2022, primarily driven by an increase in product innovation and other technology investments.

We recorded impairment charges of $4.1 million and $36.0 million during 2023 and 2022, respectively.

During the fourth quarter of 2023, we recorded an impairment charge of $4.1 million related to the impairment of certain patents and technology amortizing intangible assets from a prior acquisition.

In 2022, as a consequence of the conflict between Russia and Ukraine, we recorded asset impairment charges of $36.0 million related to our Russian distribution joint venture.

Refer to Note 12 of our Consolidated Financial Statements for additional information.

We recorded restructuring expenses of $11.9 million and $6.1 million during 2023 and 2022, respectively.

The restructuring expenses primarily related to severance and other related costs associated with the rationalization of certain South American, North American, European, African and Asian manufacturing facilities and administrative offices .

See Note 12 of our Consolidated Financial Statements.

Interest expense, net was $4.6 million for 2023 compared to $13.0 million for 2022 resulting primarily from an increase in interest income, partially offset by an increase in interest expense from increased debt levels and interest rates in 2023 as compared to 2022.

See “Liquidity and Capital Resources” for further information on our available funding.

Other expense, net was $362.3 million in 2023 compared to $145.2 million in 2022.

The increase was primarily driven by foreign currency exchanges losses which where approximately $202.1 million and $64.1 million in 2023 and 2022, respectively.

These losses related primarily to the devaluation of the Argentine peso and the Turkish lira during 2023.

In December 2023, the central bank of Argentina adjusted the official foreign currency exchange rate for the Argentine peso from approximately 366.5 to approximately 800.0 pesos to United States dollar for substantially all goods, significantly devaluing the currency relative to the United States dollar.

The December 2023 impact of the devaluation and remeasurement of net monetary assets was approximately $79.9 million.

Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in "Other expense, net," were approximately $148.4 million and $71.1 million in 2023 and 2022, respectively.

The increase in losses was primarily the result of higher sales of accounts receivable and higher interest rates in 2023 as compared to 2022.

The increases in "Other expense, net" were partially offset by business interruption insurance recoveries of $20.0 million related to the cyber attack in 2022.

We recorded an income tax provision of $230.4 million in 2023 compared to $296.6 million in 2022.

Our tax provision and effective tax rate are impacted by the differing tax rates of the various tax jurisdictions in which we operate, permanent differences for items treated differently for financial accounting and income tax purposes, losses in jurisdictions where no income tax benefit is recorded, and provisions for unrecognized income tax benefits related to uncertain tax positions.

Our 2023 income tax provision includes a one-time benefit of $112.3 million related to the recognition of a deferred tax asset of $197.7 million, net of a valuation allowance of $85.4 million, related to the finalization of negotiations surrounding the application of Swiss Tax reform legislation enacted in 2020.

This benefit was partially offset by a provision of approximately $26.4 million that we recorded in 2023 associated with our enrollment in a Brazilian tax amnesty program as is more fully described in Note 19 of our Consolidated Financial Statements.

Refer to Note 19 of our Consolidated Financial Statements for further information.

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was $68.2 million in 2023 compared to $64.1 million in 2022.

The increase was primarily due to higher earnings in our finance joint ventures.

During the first quarter of 2022, we recorded a write-down of our investment in our Russian finance joint venture of approximately $4.8 million.

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

Refer to Note 9 of our Consolidated Financial Statements for further information.

Net loss attributable to noncontrolling interests was $0.1 million in 2023 compared to $14.9 million in 2022.

The loss during 2022 related to the sale of our Russian distribution joint venture.

Results of Operations - Segment Information

The Company has four operating segments which are also its reportable segments which consist of the Europe/Middle East ("EME"), North America, South America and Asia/Pacific/Africa ("APA") regions.

The Company’s reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology.

The Company evaluates segment performance primarily based on income from operations.

Sales for each segment are based on the location of the third-party customer.

The Company’s selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred.

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

The following table sets forth, for the year ended December 31, 2023, the impact to net sales of currency translation by geographical segment (in millions, except percentages):

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$ 14,412.4 $ 12,651.4 $ 1,761.0 13.9 % $ 13.0 0.1 %

Regionally, net sales in EME were higher during 2022 compared to 2021, primarily due to increased sales in most major markets in the region, with the largest increases contributed by net sales growth in both tractors and combines.

These positive impacts were partially offset by negative currency translation.

Net sales in North America increased in 2022 compared to 2021, as a result of strong pricing and growth in net sales of high horsepower tractors, combines and precision agricultural equipment.

Net sales increased in South America in 2022 compared to 2021, primarily due to significant pricing realization and higher net sales of high horsepower tractors, combines and planting equipment.

In the APA region, net sales decreased in 2022 compared to 2021, primarily due to unfavorable currency translation and delays in production and corresponding shipments from our European factories.

We estimate that worldwide average price increases were approximately 11.6% and 6.6% in 2022 and 2021, respectively.

Consolidated net sales of tractors and combines, which comprised approximately 63.2% of our net sales in 2022, increased approximately 17.3% in 2022 compared to 2021.

Unit sales of tractors and combines increased approximately 15.6% during 2022 compared to 2021.

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

The following table sets forth, for the years ended December 31, 2022 and 2021, the percentage relationship to net sales of certain items included in our Consolidated Statements of Operations (in millions, except percentages):

Net Sales $ % of

Net Sales (1)

Gross profit $ 3,001.3 23.7 % $ 2,572.3 23.1 %

Selling, general and administrative expenses 1,186.2 9.4 % 1,088.2 9.8 %

Engineering expenses 444.2 3.5 % 405.8 3.6 %

Amortization of intangibles 60.1 0.5 % 61.1 0.5 %

Impairment charge 36.0 0.3 % — — %

Restructuring expenses 6.1 — % 15.3 0.1 %

Bad debt expense 3.3 — % 0.5 — %

$ 7,540.5 $ 6,447.3 $ 1,093.2

Income from Operations

1,100.6 784.1 316.5

(1) Rounding may impact summation of amounts.

Gross profit as a percentage of net sales increased during 2022 compared to 2021 primarily due to the benefit of higher net sales and production levels, as well as positive pricing, which was partially offset by the impact of material cost inflation.

Overall, global production hours increased approximately 5.5% during 2022 compared to 2021, primarily as a result of stronger market demand during 2022.

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

These disruptions impact our ability to produce and ship units, as well as contribute to labor inefficiencies, and result in carrying higher raw material and work in process inventory levels.

We were able to meaningfully reduce work-in-process inventory levels during the fourth quarter of 2022 from higher levels during previous quarters.

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

Selling, general and administrative expenses (“SG&A expenses”) and engineering expenses, as a percentage of net sales, were lower during 2022 compared to 2021, primarily driven by the increase in net sales and the impact of foreign currency translation.

The absolute level of SG&A expenses increased during 2022 following prior actions to lower expenses in 2021 as a result of the pandemic, such as reduced field sales and marketing activities and lower travel expenses.

We recorded stock compensation expense of approximately $32.7 million and $26.6 million during 2022 and 2021, respectively, within SG&A expenses, as is more fully explained in Notes 1 and 10 of our Consolidated Financial Statements.

We recorded restructuring expenses of approximately $6.1 million and $15.3 million during 2022 and 2021, respectively.

The restructuring expenses primarily related to severance and other related costs associated with the rationalization of certain U.S., China, South American and European manufacturing operations.

See Note 3 of our Consolidated Financial Statements.

Also, see below for discussion of impairment and other charges associated with our Russian joint ventures.

Interest expense, net was $13.0 million for 2022 compared to $6.7 million for 2021 resulting primarily from increased debt levels and interest rates in 2022 as compared to 2021.

See “Liquidity and Capital Resources” for further information on our available funding.

Other expense, net was $145.2 million in 2022 compared to $50.4 million in 2021.

Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil, were approximately $71.1 million and $24.5 million in 2022 and 2021, respectively.

The increase in losses was primarily the result of higher interest rates in 2022 as compared to 2021.

Other expense, net also increased in 2022 as compared to 2021 due to higher foreign exchange losses.

See below for discussion of charges associated with the sale of our Russian joint venture.

We recorded an income tax provision of approximately $296.6 million in 2022 compared to $108.4 million in 2021.

At December 31, 2022 and 2021, we had gross deferred tax assets of $301.2 million and $291.8 million, respectively, including $45.9 million and $69.5 million, respectively, related to net operating loss carryforwards.

At December 31, 2022 and 2021, we had total valuation allowances as an offset to our gross deferred tax assets of approximately $47.3 million and $47.4 million, respectively.

These valuation allowances included allowances against deferred tax assets (including net operating loss carryforwards) in the U.S.

and certain foreign jurisdictions.

As of December 31, 2021, our income tax provision included the benefit of reversals of approximately $67.8 million and approximately $55.6 million related to valuation allowances previously established against the Company’s net deferred tax assets in the U.S.

and Brazil, respectively.

Improvements in income in the U.S and Brazil during 2020 and 2021, along with updated future projected income levels, supported the reversal of both of the valuation allowances.

Realization of the net deferred tax assets as of December 31, 2022 will depend on generating sufficient taxable income in future periods, net of reversing deferred tax liabilities.

We believe it is more likely than not that the remaining net deferred tax assets should be able to be realized.

Refer to Note 6 of our Consolidated Financial Statements for further information.

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was $64.1 million in 2022 compared to $65.6 million in 2021.

The decrease was primarily due to a write-down of our investment in our Russian finance joint venture of approximately $4.8 million recorded during the first quarter of 2022.

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

See “Finance Joint Ventures” for further information regarding our finance joint ventures and their results of operations and Note 5 of our Consolidated Financial Statements for further information.

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

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

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

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

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

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

During the three months ended December 31, 2022, we sold our interest in the Russian distribution joint venture and, as a result, approximately $11.4 million of foreign currency losses accumulated in the joint venture previously recognized within “Accumulated other comprehensive loss” were therefore recorded in “Other expense, net” associated with the divestiture.

Net sales in EME increased in 2023 compared to 2022, primarily due to positive pricing impacts, favorable product mix related to mid-range and high-horsepower tractors and higher replacement parts sales, partially offset by unfavorable foreign currency translation.

Income from operations increased by $316.5 million in 2023 compared to 2022, driven primarily by positive net pricing and favorable product mix related to mid-range and high-horsepower tractors, partially offset by higher SG&A expenses primarily related to higher compensation costs.

North America

$ 3,752.7 $ 3,175.1 $ 577.6

Income from Operations

459.3 278.8 180.5

Net sales in North America increased in 2023 compared to 2022, primarily due to positive pricing impacts and favorable product mix related to high-horsepower tractors, application equipment and combines.

The expansion of Fendt product sales in North America was a key driver of the favorable product mix.

Income from operations increased by $180.5 million compared to the prior year as a result of positive net pricing and favorable product mix related to significant growth in Fendt products as well as improved margins on our grain and protein product sales.

These increases were partially offset by higher warranty costs and higher SG&A expenses primarily related to higher compensation costs.

South America

$ 2,234.2 $ 2,121.6 $ 112.6

Income from Operations

386.4 373.9 12.5

Net sales increased in South America in 2023 compared to 2022, primarily due to positive pricing impacts, favorable product mix related to high-horsepower and mid-range tractors and favorable foreign currency translation.

These increases were partially offset by modest declines in sales related to grain and protein products.

Income from operations increased $12.5 million in 2023 compared to 2022 despite higher retail incentives in the fourth quarter as a result of positive net pricing and favorable product mix related to high-horsepower tractors and combines, partially offset by a decrease in sales of grain and protein products and higher SG&A expenses primarily related to higher dealer termination charges and higher compensation costs.

$ 885.0 $ 907.4 $ (22.4)

Income from Operations

77.3 116.9 (39.6)

Net sales decreased in APA in 2023 compared to 2022, primarily due to unfavorable currency translation, lower sales volumes of mid-range tractors and combines and lower sales of grain and protein products.

Higher sales in Australia were mostly offset by lower sales in Japan.

These decreases were partially offset by positive pricing impacts and increased sales of precision agriculture equipment.

Income from operations decreased $39.6 million in 2023 compared to 2022, primarily due to lower sales volumes of mid-range tractors and combines, higher warranty costs and higher SG&A expenses primarily related to higher compensation costs.

These decreases were partially offset by positive net pricing.

2022 Compared to 2021

A comparison of the results of operations for 2022 versus that of 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022.

AGCO Finance Joint Ventures

Our AGCO Finance joint ventures provide both retail financing and wholesale financing to our dealers in the United States, Canada, Europe, Brazil, Argentina and Australia.

The joint ventures are owned by AGCO and Rabobank.

The majority of the assets of the finance joint ventures consist of finance receivables.

The majority of the liabilities consist of notes payable and accrued interest.

Under the various joint venture agreements, Rabobank provides financing to the finance joint ventures, primarily through lines of credit.

We do not guarantee the debt obligations of the joint ventures.

In the United States and

Canada, we guarantee certain minimum residual values to those joint ventures upon expiration of certain eligible leases between the finance joint ventures and end users.

We also have other guarantees with our other finance joint ventures which are not material.

See “Commitments and Off-Balance Sheet Arrangements” and Note 12 to our Consolidated Financial Statements for additional information.

As of December 31, 2022, our capital investment in the finance joint ventures, which is included in “Investment in affiliates” on our Consolidated Balance Sheets, was approximately $390.2 million compared to approximately $359.2 million as of December 31, 2021.

The total finance portfolio in our finance joint ventures was approximately $11.8 billion and $10.9 billion as of December 31, 2022 and 2021, respectively.

The total finance portfolio as of December 31, 2022 and 2021 included approximately $9.5 billion and $9.2 billion, respectively, of retail receivables and $2.3 billion and $1.7 billion of wholesale receivables from AGCO dealers as of December 31, 2022 and 2021, respectively.

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

During 2022, we did not make additional investments in our finance joint ventures, and we received dividends of approximately $27.0 million from certain of our finance joint ventures.

During 2021, we did not make additional investments in our finance joint ventures, and we received dividends of approximately $84.4 million from certain of our finance joint ventures.

Our share in the earnings of the finance joint ventures, included in “Equity in net earnings of affiliates” within our Consolidated Statements of Operations, was approximately $63.0 million and $64.4 million for the years ended December 31, 2022 and 2021, respectively.

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

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

Our operations are subject to the cyclical nature of the agricultural industry.

Sales of our equipment are affected by, among other things, changes in net cash farm income, farm land values, weather conditions, the demand for agricultural commodities, commodity and protein prices and general economic conditions.

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

Our net sales are expected to increase in 2023 compared to 2022, resulting from improved sales volumes and pricing, partially offset by negative foreign currency translation.

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

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

Our outlook is also based on current estimates of supplier component deliveries, and the ability of the Company’s supply chain to deliver parts and components on schedule is currently difficult to predict.

If supply chain performance worsens, our results of operations will be adversely impacted.

Refer to “Risk Factors” for further discussion of the COVID-19 pandemic, supply chain and logistic disruptions and other factors.

Sales of our equipment are affected by, among other things, changes in farm income, farm land values and debt levels, financing costs, acreage planted, crop yields, weather conditions, the demand for agricultural commodities, commodity and protein prices, agricultural product demand and general economic conditions and government policies and subsidies.

Global industry demand for farm equipment, driven by farm income, is expected to be modestly lower during 2024 in most major markets compared to 2023.

Our net sales are expected to moderately decrease in 2024 compared to 2023, resulting from lower sales volumes, offset in part by modest positive pricing.

Gross and operating margins are expected to moderately decrease from 2023 levels, reflecting the impact of lower net sales and production volumes and relatively flat investments in engineering and other technology efforts to support our precision agriculture and digital initiatives.

Our outlook is based on current assumptions regarding a number of factors including demand, currency stability, pricing and market share gains.

If our assumptions are incorrect, or other issues arise or return, such as a worsening of our supply chain, our results of operations will be adversely impacted.

Refer to “Risk Factors” in Item 1A for further discussion.

Liquidity and Capital Resources

Our financing requirements are subject to variations due to seasonal changes in inventory and receivable levels.

In addition, unusual events such as the recent supply chain disruptions can result in increases in inventories and, consequentially, our financing requirements.

Internally generated funds are supplemented when necessary from external sources, primarily our credit facility and accounts receivable sales agreement facilities.

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

Internally generated funds are supplemented when necessary from external sources, primarily our credit facility and accounts receivable sales agreement facilities, subject to the discussion below with respect to financing of the Trimble Ag joint venture transaction.

Additional information regarding our indebtedness is contained in Note 11 to the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data." We believe that the following facilities listed below, together with available cash and internally generated funds, and assuming customary renewals and replacements, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future (in millions):

December 31, 2023 (1)

Credit facility, expires 2027 $ —

1.002% Senior term loan due 2025 (1)

1.002% EIB Senior term loan due 2025

EIB Senior Term Loan due 2029

Senior term loans due between 2025 and 2028

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(1) The amounts above are gross of debt issuance costs of an aggregate amount of approximately $3.1 million.

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

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

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

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

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

Dollars, Euros or other currencies to be agreed upon.

The credit facility matures on December 19, 2027.

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

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

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

As of December 31, 2022, we had $200.0 million outstanding borrowings under the revolving credit facility and had the ability to borrow $1,050.0 million.

In June 2022, we entered into an uncommitted revolving credit facility that allows us to borrow up to €100.0 million (or approximately $106.9 million as of December 31, 2022).

The Company has a credit facility providing for a $1.25 billion multi-currency unsecured revolving credit facility (“Credit Facility”) that matures on December 19, 2027.

As of December 31, 2023, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow $1,155.0 million.

In addition, the Company has an uncommitted revolving credit facility that allows the Company to borrow up to €100.0 million (or approximately $110.7 million as of December 31, 2023).

The credit facility expires on December 31, 2026.

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

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

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

We borrowed $240.0 million in U.S.

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

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

On October 6, 2021, we issued €600.0 million (or approximately $641.5 million as of December 31, 2022) of senior notes at an issue price of 99.993%.

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

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

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

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

The credit facility matures on October 17, 2023.

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

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

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

The term loans matured on April 8, 2022.

On January 25, 2019, we borrowed €250.0 million (or approximately $267.3 million as of December 31, 2022) from the European Investment Bank.

The loan matures on January 24, 2025.

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

In October 2016, we borrowed an aggregate amount of €375.0 million through a group of seven related term loan agreements.

These agreements had maturities ranging from October 2019 to October 2026.

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

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

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

In August 2018, we borrowed an additional aggregate amount of €338.0 million through a group of another seven related term loan agreements.

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

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

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

In aggregate, as of December 31, 2022, we had indebtedness of approximately €319.5 million (or approximately $341.6 million) under six remaining term loan agreements with remaining maturities ranging from August 2023 to August 2028.

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

As of December 31, 2022, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 0.90% to 2.26% and maturity dates between August 2023 and August 2028.

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

As of December 31, 2022 and 2021, we had short-term borrowings due within one year of approximately $8.9 million and $90.8 million, respectively.

As of December 31, 2023, the Company had no outstanding borrowings under the revolving credit facility.

On September 29, 2023, the Company entered into a multi-currency Finance Contract with the European Investment Bank ("EIB") permitting the Company to borrow up to €250.0 million, 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.

On October 26, 2023, the Company borrowed €250.0 million (approximately $263.7 million) under the arrangement.

The loan matures on October 26, 2029.

As of December 31, 2023, there was €250.0 million (approximately $276.7 million) outstanding under the EIB Senior Term Loan due 2029.

Subsequent to the end of the year, on January 25, 2024, the Company entered into an additional multi-currency Finance Contract with EIB permitting the Company to borrow up to €170.0 million, for which the proceeds will be used in a similar manner as described for the EIB Senior Term Loan due 2029 above.

On February 15, 2024, the Company borrowed €170.0 million (approximately $183.2 million) under the arrangement.

The loan matures on February 15, 2030.

In connection with the planned Trimble Ag joint venture, 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, subject to the terms and conditions set forth therein, a $2.0 billion senior unsecured 364-day bridge facility.

There were no amounts outstanding under the Bridge Facility as of December 31, 2023.

Subject to market conditions, the Company intends to finance the planned Joint Venture transaction through a combination of existing liquidity, ongoing cash flows from operations and the issuance of new debt and not to utilize funding pursuant to the commitment letter.

In December 2023, the Company amended the Credit Facility to allow for incremental borrowings in the form of a delayed draw term loan facility in an aggregate principal amount of $250.0 million ("Term Loan Facility").

Borrowings under the Term Loan Facility bear interest at the same rate and margin as the Credit Facility.

There are currently no amounts outstanding under the Term Loan Facility.

The Company expects to draw on the Term Loan Facility in conjunction with the close of the Trimble Ag joint venture.

The amount available under the Bridge Facility was reduced by $250.0 million upon the Company's entry into the Term Loan Facility in December 2023.

In January 2024, the Company and its lenders agreed to further reduce the Bridge Facility by $300.0 million as a result of cash flows generated in the quarter ended December 31,2023.

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

Should we ever encounter difficulties, our historical relationship with our lenders has been strong and we anticipate their continued long-term support of our business.

Should we ever encounter difficulties, our historical relationship with our lenders has been strong and we anticipate

their continued long-term support of our business.

Refer to Note 11 to the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our current facilities, including the financial covenants contained in each debt instrument.

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We do not service the receivables after the sales occur, and we do not maintain any direct retained interest in the receivables.

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

As of December 31, 2022 and 2021, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements for the years then ended was approximately $1.8 billion and $1.3 billion, respectively.

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

For the years ended December 31, 2023 and 2022, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $2.5 billion and $1.8 billion, respectively.

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

As of December 31, 2022 and 2020, the cash received from these arrangements for the years then ended was approximately $226.0 million and $215.4 million, respectively.

For the years ended December 31, 2023 and 2022, the cash received from these arrangements was approximately $254.1 million and $226.0 million, respectively.

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

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

As of December 31, 2023 and 2022, these finance joint ventures had approximately $211.3 million and $69.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

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

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

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

The total finance portfolio in our finance joint ventures was approximately $14.1 billion and $11.8 billion as of December 31, 2023 and 2022, respectively.

The total finance portfolio as of December 31, 2023 and 2022 included approximately $10.8 billion and $9.5 billion, respectively, of retail receivables and $3.3 billion and $2.3 billion of wholesale receivables from AGCO dealers as of December 31, 2023 and 2022, respectively.

In order to efficiently manage our liquidity, we generally pay vendors in accordance with negotiated terms.

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

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

We do not reimburse vendors for any costs they incur for participation in the programs.

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

Should we not be able to negotiate extended payment terms with our vendors, or should financial institutions no longer

be willing to participate in early payment programs with us, we would expect to have sufficient liquidity to timely pay our vendors without any material impact on us or our financial position.

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

As of December 31, 2023 and 2022, the amount outstanding that remains unpaid to the banks or other intermediaries associated with these programs totaled approximately $82.7 million and $121.5 million, respectively.

Refer to Note 10 to the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further discussion.

Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness and stockholders’ equity, was 23.0% at December 31, 2023 compared to 27.3% at December 31, 2022.

Cash flows provided by operating activities were approximately $1,103.1 million during 2023 compared to approximately $838.2 million during 2022.

The increase during 2022 primarily was due to increases in accounts payable and accrued expenses compared to 2021.

Supply chain disruptions resulted in higher raw material and work-in-process inventory levels during the course of 2022, although we were able to reduce work-in-process inventories during the fourth quarter of 2022 by approximately $277.6 million.

However, inventory levels as of December 31, 2022 were higher than at December 31, 2021.

Free cash flow, which is defined as “Net cash provided by operating activities” less “Purchases of property, plant and equipment”, was approximately $449.9 million during 2022, as compared to approximately $390.4 million during 2021, despite capital expenditures of approximately $388.3 million during 2022 compared to $269.8 million during 2021.

The increase during 2023 compared to 2022 was primarily due to higher net income in 2023.

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

We had $1,997.2 million in working capital at December 31, 2023, as compared with $1,651.3 million at December 31, 2022.

Accounts receivable and inventories, combined, at December 31, 2022 were approximately $825.8 million higher than at December 31, 2021, primarily due to higher net sales and production levels, as well as the significant impact of supply chain constraints during 2022.

Accounts receivable and inventories, combined, at December 31, 2023 were approximately $635.0 million higher than at December 31, 2022, primarily due to positive pricing, lower sales of accounts receivable under our factoring programs at the end of the year and higher finished goods inventory levels.

Capital expenditures were approximately $518.1 million compared to $388.3 million for the same period in 2022, primarily related to high capital investments related to capacity increases and precision agriculture initiatives.

Share Repurchase Program and Dividends

We did not purchase any shares directly or enter into any accelerated share repurchase agreements during 2022.

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

In August and November 2021, we entered into two accelerated share repurchase (“ASR”) agreements with financial institutions to repurchase an aggregate of $135.0 million of shares of our common stock.

We received approximately 952,204 shares in these transactions as of December 31, 2021.

On January 19, 2022, we received additional 113,824 shares upon final settlement of our November 2021 ASR agreement.

In November 2023, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase $53.0 million of shares of our common stock.

We received approximately 371,669 shares associated with this transaction as of December 31, 2023.

In January 2024, we received an additional 82,883 shares upon final settlement of our November 2023 ASR agreement.

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

We did not purchase any shares directly or enter into any

accelerated share repurchase agreements during 2022.

As of December 31, 2023, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $57.0 million, which has no expiration date.

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

During 2022, our Board of Directors declared and we paid a special variable dividend of $4.50 per common share.

On January 18, 2024, the Company approved the quarterly dividend of $0.29 per common share to be paid on March 15, 2024, to all stockholders of record as of the close of business February 15, 2024.

Contractual Obligations and Cash Requirements

Our material cash requirements include the following contractual and other obligations:

Indebtedness – As of December 31, 2022, we had approximately $194.5 million of payments due as of the year ended December 31, 2023, related to indebtedness and certain short-term obligations, in addition to approximately $35.4 million of interest payments associated with indebtedness we expect to pay during 2023.

Indebtedness – As of December 31, 2023, we had approximately $14.1 million of payments due within the year ending December 31, 2024, related to indebtedness and certain short-term obligations, in addition to approximately $56.1 million of interest payments associated with indebtedness we expect to pay during 2024.

This does not include interest payments related to future indebtedness expected to finance the planned Trimble Ag joint venture.

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

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

Indebtedness amounts reflect the principal amount of our EIB senior term loans, senior notes, credit facility and certain short-term borrowings, gross of any debt issuance costs.

Refer to the discussion above and Note 11 of the Consolidated Financial Statements for additional information regarding our indebtedness.

In addition, we expect to pay approximately $125.7 million of discounts on the sales of receivables related to our finance joint ventures.

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

Capital and operating lease obligations – As of December 31, 2022, we had approximately $0.8 million and $47.8 million of payments due during the year ended December 31, 2023, related to capital and operating lease obligations, respectively.

Finance and operating lease obligations – As of December 31, 2023, we had approximately $0.7 million and $52.8 million of payments due during the year ending December 31, 2024, related to finance and operating lease obligations, respectively.

Refer to Note 23 of the Consolidated Financial Statements for additional information regarding our lease obligations.

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

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

Unconditional purchase obligations – As of December 31, 2023, we had approximately $263.7 million of outstanding purchase obligations payable during the year ending December 31, 2024.

The Company's unconditional purchase obligations are primarily payable within 12 months.

Other short-term and long-term obligations – As of December 31, 2023, we had approximately $9.9 million of income tax liabilities related to uncertain income tax provisions connected with ongoing income tax audits in various jurisdictions that we expects to pay or settle within the next 12 months.

Additionally, we had approximately $16.7 million of estimated future minimum contribution requirements under our U.S.

defined benefit pension and postretirement plans due during the year ended December 31, 2023.

defined benefit pension and postretirement plans due during the year ending December 31, 2024.

Refer to Notes 19 and 20 of the Consolidated Financial Statements for additional information regarding our uncertain tax positions and pension and postretirement plans, respectively.

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Commitments and Off-Balance Sheet Arrangements

We maintain a remarketing agreement with our finance joint venture in the United States, whereby we are obligated to repurchase up to $6.0 million of repossessed equipment each calendar year.

We believe any losses that might be incurred on the resale of this equipment will not materially impact our financial position or results of operations, due to the fact that the repurchase obligations would be equivalent to the fair value of the underlying equipment.

At December 31, 2022, we guaranteed indebtedness owed to third parties of approximately $29.2 million, primarily related to dealer and end-user financing of equipment.

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

At December 31, 2023, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A.

(“AGCO Capital”) of approximately $42.2 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.

Losses under such guarantees historically have been insignificant.

In addition, we 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 offset a substantial portion of the amounts paid.

We also guarantee indebtedness owed to certain of our finance joint ventures if dealers or end users default on loans.

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

We believe the credit risk associated with all of these guarantees is not material to our financial position or results of operations.

In addition, at December 31, 2022, we had accrued approximately $18.6 million of outstanding guarantees of residual values that may be owed to our finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under the guarantee is approximately $191.3 million.

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

In addition, at December 31, 2023, the Company accrued approximately $13.8 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under the guarantees is approximately $182.1 million.

At December 31, 2023, we had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $3,387.3 million.

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

We also had outstanding designated steel commodity contracts with a gross notional amount of approximately $0.9 million that range in maturity through April 2023.

The outstanding contracts as of December 31, 2023 range in maturity

through December 2024.

We also had outstanding designated steel commodity contracts with a gross notional amount of approximately $2.5 million that range in maturity through June 2024.

See Note 14 of our Consolidated Financial Statements for additional information.

As discussed in “Liquidity and Capital Resources,” we sell a majority of our wholesale accounts receivable in North America, Europe and Brazil to our U.S., Canadian, European and Brazilian finance joint ventures.

As discussed above, we sell a majority of our wholesale accounts receivable in North America, Europe and Brazil to our U.S., Canadian, European and Brazilian finance joint ventures.

We also sell certain accounts receivable under factoring arrangements to financial institutions around the world.

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Contingencies

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

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

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

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

1:18-cv-00827-CFC.

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 Deere appealed the judgment to the U.S.

Court of Appeals for the Federal Circuit.

The appeal is fully briefed and is awaiting oral arguments before the court.

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

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

We are party to various claims and lawsuits arising in the normal course of business.

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See Note 22 of our Consolidated Financial Statements for further information.

Related Parties

Related Party Transactions

In the ordinary course of business, we engage in transactions with related parties.

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The majority of our net sales outside the United States are denominated in the currency of the customer location, with the exception of sales in Middle East, Africa, Asia and parts of South America, where net sales are primarily denominated in British pounds, Euros or the United States dollar.

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

On the basis of 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 during 2022.

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 subsidiaries operating in highly inflationary economies, the United States dollar is the functional currency.

Remeasurement adjustments for financial statements in highly inflationary economies and other transactional exchange gains and losses are reported in "Other expense, net" within our Consolidated Statements of Operations.

For the year ended December 31, 2023, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $394.6 million and total assets of approximately 4.5 billion Turkish lira (or approximately $152.4 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 4.2 billion Turkish lira (or approximately $142.7 million) and approximately 3.4 billion Turkish lira (or approximately $116.3 million), respectively, as of December 31, 2023.

The monetary assets and liabilities were remeasured into United States dollar based on exchange rates as of December 31, 2023.

We also are subject to the risk of the imposition of limitations by governments on international transfers of funds.

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

As a consequence of these limitations, the spread between the official government exchange rate and the exchange rates resulting implicitly from certain capital market operations, usually effected to obtain U.S.

dollars, has broadened significantly.

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

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

to transfer funds out of Argentina.

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

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

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

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 United States dollars, had broadened significantly.

Argentina's economy was determined to be highly inflationary during 2018.

In December 2023, the central bank of Argentina adjusted the official foreign currency exchange rate for the Argentine peso, significantly devaluing the currency relative to the United States dollar.

The December 2023 impact of the devaluation and remeasurement of net monetary assets was approximately $79.9 million.

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

For the year ended December 31, 2023, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $204.9 million and total assets of approximately 194.9 billion pesos (or approximately $233.9 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 68.3 billion pesos (or approximately $82.0 million), inclusive of approximately 27.7 billion pesos (or approximately $33.3 million) in cash and cash equivalents, as of December 31, 2023.

The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 12.4 billion pesos (or approximately $14.9 million) as of December 31, 2023.

The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of December 31, 2023.

The Company's finance joint venture in Argentina, AGCO Capital has net monetary assets denominated in pesos at the official government rate of approximately 11.0 billion (or approximately $13.2 million) as of December 31, 2023, of which a majority is cash and cash equivalents.

All gains and losses resulting from AGCO Capital's remeasurement of its monetary asset and liabilities are reported in “Equity in net earnings of affiliates” within our Consolidated Statements of Operations.

If limitations on transfer of funds remain, we may be subject to future losses on the net monetary assets described above.

We manage our transactional foreign currency exposure by hedging foreign currency cash flow forecasts and commitments arising from the anticipated settlement of receivables and payables and from future purchases and sales.

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Our hedging policy prohibits use of foreign currency contracts for speculative trading purposes.

The total notional value of our foreign currency instruments was $4,318.8 million and $3,981.9 million as of December 31, 2022 and 2021, respectively, inclusive of both those instruments that are designated and qualified for hedge accounting and non-designated derivative instruments.

The total notional value of our foreign currency instruments was $3,687.3 million and $4,318.8 million, including $300.0 million and $300.0 million related to net investment hedges, as of December 31, 2023 and 2022, respectively, inclusive of both those instruments that are designated and qualified for hedge accounting and non-designated derivative instruments.

We enter into cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, and we enter into foreign currency contracts to economically hedge receivables and payables on our balance sheets that are denominated in foreign currencies other than the functional currency.

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Due to the fact that these instruments are primarily entered into for hedging purposes, the gains or losses on the contracts would largely be offset by losses and gains on the underlying firm commitment or forecasted transaction.

The gains and losses on the Company’s net investment in the designated foreign operations driven by changes in foreign exchange rates would largely be offset by movements in the fair value of the cross currency swap contracts or foreign currency denominated debt.

Interest Rate Risk

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Deferred Income Taxes and Uncertain Income Tax Positions

We recorded an income tax provision of approximately $296.6 million in 2022 compared to $108.4 million in 2021 and $187.7 million in 2020.

Our tax provision and effective tax rate are impacted by the differing tax rates of the various tax jurisdictions in which we operate, permanent differences for items treated differently for financial accounting and income tax purposes, losses in jurisdictions where no income tax benefit is recorded and provisions for unrecognized income tax benefits related to uncertain tax positions.

Improvements in income in the U.S and Brazil during 2020 and 2021, along with updated future projected income levels, supported the reversal of both of the valuation allowances.

We recorded an income tax provision of $230.4 million in 2023 compared to $296.6 million in 2022 and $108.4 million in 2021.

benefits related to uncertain tax positions.

The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which we operate.

Future changes in applicable laws, projected levels of taxable income, and tax planning could change the effective tax rate and tax balances recorded by us.

In addition, tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which we operate.

A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return.

We believe that we have adequately provided for any reasonably foreseeable resolution of these matters.

At December 31, 2023 and 2022, we had gross deferred tax assets of $634.2 million and $301.2 million, respectively, including $42.1 million and $45.9 million, respectively, related to net operating loss carryforwards.

We maintain a valuation allowance to reserve a portion of our net deferred tax assets in the U.S.

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

We assessed the likelihood that our deferred tax assets should be recovered from estimated future taxable income and the current economic climate, as well as available tax planning strategies and determined that the adjustment to the valuation allowance was appropriate.

We believe it is more likely than not that we should be able to realize our remaining net deferred tax assets, net of the valuation allowance, in future years.

At December 31, 2023 and 2022, we had total valuation allowances as an offset to our gross deferred tax assets of $149.8 million and $47.3 million, respectively.

These valuation allowances are held against deferred tax assets (including net operating loss carryforwards) in the U.S and certain foreign jurisdictions.

These valuation allowances are held against deferred tax assets (including net operating loss carryforwards and certain other tax attributes) in the U.S and certain foreign jurisdictions.

Realization of the remaining deferred tax assets as of December 31, 2023 depends on generating sufficient taxable income in future periods, net of reversing deferred tax liabilities.

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As of December 31, 2023 and 2022, we had approximately $9.9 million and $10.4 million, respectively, of current accrued taxes related to uncertain income tax positions connected with ongoing tax audits in various jurisdictions that we expect to settle or pay in the next 12 months.

At December 31, 2022 and 2021, the Company had approximately $274.1 million and $196.7 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $2.8 million of deferred tax assets and $9.6 million of deferred tax liabilities, respectively, related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” and “Deferred tax liabilities,” respectively, in the Company’s Consolidated Balance Sheets.

At December 31, 2023 and 2022, the Company had approximately $344.2 million and $274.1 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $2.9 million and $2.8 million of deferred tax assets, respectively, related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” in the Company’s Consolidated Balance Sheets.

We recognize interest and penalties related to uncertain income tax positions in income tax expense.

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Both plans are closed to new entrants and frozen, and we fund at least the minimum contributions required under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code to both plans.

Additionally, as of December 31, 2023, we amended and merged the defined benefit plans for our hourly and salaried employees into one plan (the "Plan") and subsequently terminated the Plan effective December 31, 2023, subject to the approval by the Pension Benefit Guaranty Corporation (the “PBGC”).

Following the approval of the Plan’s termination by the PBGC, the benefits of all participants and beneficiaries will be satisfied in full through cash distributions to participants, payment to the PBGC, or the purchase of annuities under a group annuity contract.

In addition, we maintain an unfunded, nonqualified defined benefit pension plan for certain senior executives, which is our Executive Nonqualified Pension Plan (“ENPP”).

The ENPP also is closed to new entrants, and, during 2021, we amended the ENPP to freeze future salary benefit accruals as of December 31, 2024 and to eliminate a lifetime annuity feature for participants reaching age 65 subsequent to December 31, 2022.

The ENPP also is closed to new entrants, and, during 2021, we amended the ENPP to freeze future benefit accruals as of December 31, 2024 and to eliminate a lifetime annuity feature for participants reaching age 65 subsequent to December 31, 2022.

In the United Kingdom, we sponsor a funded defined benefit pension plan that provides an annuity benefit based on participants’ final average earnings and service.

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pension plans’ projected benefit payments.

Historically, the settlement approach was used for both the hourly and salaried plans and the ENPP.

As a result of the termination of the Plan in 2023, we changed the discount rate methodology to align with the expected termination liability of the Plan more closely.

The discount rate was derived using a "yield curve approach" as described below.

The settlement approach used for the ENPP has not changed.

In the United Kingdom and the Euro Zone, the discount rate is derived using a “yield curve approach,” in which an individual spot rate, or zero coupon bond yield, for each future annual period is developed to discount each future benefit payment and, thereby, determine the present value of all future payments.

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Unrecognized actuarial net losses related to our defined benefit pension plans and ENPP were $280.2 million as of December 31, 2023 compared to $270.0 million as of December 31, 2022.

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

The increase in unrecognized net actuarial losses between years primarily resulted from lower discount rates at December 31, 2023 compared to December 31, 2022.

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

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Unrecognized prior service cost related to our defined benefit pension plans was $31.4 million as of December 31, 2023 compared to $32.5 million as of December 31, 2022.

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

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

The 2021 amendment resulted in both a curtailment gain and a net prior service credit.

As of December 31, 2023, our unfunded or underfunded obligations related to our defined benefit pension plans and ENPP were approximately $75.0 million, primarily related to our defined benefit pension plans in Europe and the United States.

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Goodwill, Other Intangible Assets and Long-Lived Assets

We test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate that fair value of a reporting unit may be below its carrying value.

A reporting unit is an operating segment or one level below an

operating segment, for example, a component.

We have significant goodwill on our balance sheet related to historical acquisitions and will add significant additional goodwill in connection with the planned Trimble Ag joint venture.

We test goodwill for impairment, at the reporting unit level, annually as of October 1 st or more frequently when events or circumstances indicate that the fair value of a reporting unit is more likely than not less than its carrying value.

A reporting unit is an operating segment or one level below an operating

segment, for example, a component.

We combine and aggregate two or more components of an operating segment as a single reporting unit if the components have similar economic characteristics.

Our reportable segments are not our reporting units.

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

Goodwill is evaluated for impairment using a qualitative assessment or a quantitative assessment.

If we elect to perform a qualitative assessment and determine the fair value of our reporting units more likely than not exceeds their carrying value of net assets, no further evaluation is necessary.

For reporting units where we perform a one-step quantitative assessment, we compare the fair value of each reporting unit to its respective carrying value of net assets, including goodwill.

For reporting units where we perform a quantitative assessment, we compare the fair value of each reporting unit to its respective carrying value of net assets, including goodwill.

If the fair value of the reporting unit exceeds its carrying value of net assets, the goodwill is not considered impaired.

If the carrying value of net assets is higher than the fair value of the reporting unit, an impairment charge is recorded in the amount by which the carrying value exceeds the reporting unit’s fair value.

We utilize a combination of valuation techniques, including an income approach, whereby the present value of future expected operating net cash flows are calculated using a discount rate;

and a guideline public company method, whereby EBITDA and revenue multiples are derived from the market prices of stocks of companies that are engaged in the same or similar lines of business and that are actively traded on a free and open market.

Assumptions included in these approaches can positively and negatively impact the results of our assessments such as interest rates, sales and margin growth rates, tax rates, cost structures, market share, pricing, capital expenditures, working capital levels and the use of control premiums.

For all reporting units, a 10 percent decrease in the estimated fair value would have resulted in a $6.8 million impairment reducing the carrying value of goodwill.

For the quantitative impairment assessment, we utilize a combination of valuation techniques.

We use a discounted cash flow model (income approach) whereby the present value of future expected operating net cash flows are calculated using a discount rate;

and a guideline public company method (market approach), whereby EBITDA and/or revenue multiples are derived from the market prices of stocks of companies that are engaged in the same or similar lines of business and that are actively traded on a free and open market.

These valuation techniques are equally weighted in determining the fair value of the reporting unit.

We make various assumptions, including assumptions regarding future cash flows, growth rates, discount rates, and market multiples in our assessment of the impairment of goodwill.

The assumptions about future cash flows and growth rates are based on the current and long-term business plans of the reporting unit and country specific agricultural industry and economic growth projections.

Future cash flows and growth rates are dependent upon the agricultural industry and other factors that could adversely affect the agricultural industry, including but not limited to, declines in the general economy, increases in farm input costs, weather conditions, lower commodity and protein prices and changes in the availability of credit.

Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the reporting unit.

These assumptions require significant judgments on our part, and the conclusions that we reach could vary significantly based on these judgments.

Our annual impairment tests completed as of October 1, 2023 indicated the fair value of each reporting unit was substantially above its respective carrying value except the Grain & Protein production systems EME reporting unit (G&P EME) which is part of the EME segment, the Grain & Protein North America reporting unit (G&P North America) which is part of the North America segment and the Grain & Protein production systems APA reporting unit (G&P APA) which is part of the APA segment.

The results of these impairment tests indicated that the fair values in excess of the carrying value of our G&P EME, G&P North America and G&P APA reporting units were approximately 4%, 12% and 10%, respectively.

The most critical assumptions used in the calculation of the fair value of the G&P EME, North America and APA reporting units are projected revenue, projected gross margin, and discount rate used in the discounted cash flow model as well as the selection of peer companies and respective trading multiples used in the guideline public company method.

Demand for G&P products is highly cyclical and impacted by commodity prices.

Differences in our expectations of demand and commodity prices could have a negative impact on our valuation.

Additionally, inability to generate future improvement in revenues and / or operating margins could have a negative impact on our valuation.

If we had changed the assumptions used to estimate the fair value of our G&P EME, North America and APA reporting units, as of the 2023 annual impairment test for each of these reporting units, these isolated changes, which are reasonably possible to occur, would have resulted in changes in the fair value in excess of the carrying value of these reporting units.

The resulting "cushion levels" would have been as follows:

Amount (%) Fair Value exceeds carrying value assuming a

50-Basis-Point Decrease

2023 Goodwill Balance (in millions)

Revenue Growth

Discount Rate

$ 60.8 3 % 3 % 1 %

G&P North America

524.1 11 % 9 % 8 %

109.7 9 % 7 % 7 %

As of December 31, 2023, we had approximately $1,333.4 million of goodwill.

While our annual impairment testing in 2023 supported the carrying amount of this goodwill, we may be required to re-evaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

We are currently conducting a strategic review of our G&P business.

In future periods, we may test market the business and determine whether to pursue a potential sale.

In conjunction with this process, we may secure new information related to the value of the business or one or more reporting units of the business which would need to be considered in assessing potential impairment of goodwill for these G&P reporting units.

Long-lived assets

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences.

We also evaluate the amortization periods assigned to our intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives.

We also evaluate the amortization periods assigned to our long-lived assets to determine whether events or changes in circumstances warrant revised estimates of useful lives.

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

We make various assumptions, including assumptions regarding future cash flows, market multiples, growth rates and discount rates, in our assessments of the impairment of goodwill, other indefinite-lived intangible assets and long-lived assets.

The assumptions about future cash flows and growth rates are based on the current and long-term business plans of the reporting unit or related to the long-lived assets.

Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the reporting unit or long-lived assets.

These assumptions require significant judgments on our part, and the conclusions that we reach could vary significantly based upon these judgments.

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

Our goodwill impairment analysis conducted as of October 1, 2022 also indicated that the fair value in excess of the carrying value of our grain and protein production systems Europe/Middle East reporting unit was approximately 5.9%.

In response to weakening market conditions and resulting operating results, new management was put in place over the global grain and protein systems productions systems business in 2022, and from that time, full strategic reviews and operating decisions of the business have been conducted and launched, including several restructuring initiatives aimed at lowering operating costs, improving product portfolios and enhancing customer support, which management believes will result in improved long-term operating results.

If market conditions and our overall results do not improve, we may incur an impairment charge related to this reporting units in the future under the one-step process described above.

The goodwill associated with these reporting units as of December 31, 2022 was approximately $59.0 million.

Numerous facts and circumstances are considered when evaluating the carrying amount of our goodwill.

The fair value of a reporting unit is impacted by the reporting unit’s expected financial performance, which is dependent upon the agricultural industry and other factors that could adversely affect the agricultural industry, including but not limited to, declines in the general economy, increases in farm input costs, weather conditions, lower commodity and protein prices and changes in the availability of credit.

The estimated fair value of the individual reporting units is assessed for reasonableness by reviewing a variety of indicators evaluated over a reasonable period of time.

As of December 31, 2022, we had approximately $1,310.8 million of goodwill.

While our annual impairment testing in 2022 supported the carrying amount of this goodwill, we may be required to re-evaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

Recoverable Indirect Taxes

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Our assessment of realization of these tax assets involves significant judgments on our part, and the conclusions that we reach could vary significantly based upon these judgments.

We recorded approximately $94.6 million and $114.4 million, respectively, of VAT tax credits, net of reserves, as of December 31, 2022 and 2021.

We recorded approximately $139.2 million and $143.9 million, of VAT tax credits, net of reserves of approximately $45.7 million and $49.3 million, respectively, as of December 31, 2023 and 2022.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity