What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-03-01 · 1080 added, 1056 removed, 1123 unchanged (66% of the section changed)

12 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of AGCO Corporation and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement Schedule II — Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of AGCO Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

39 unchanged sentences

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

Assessment of goodwill impairment for a certain reporting unit

Assessment of goodwill impairment for certain reporting units

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

2 unchanged sentences

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

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

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

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

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

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

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

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

7 unchanged sentences

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

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

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

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

Atlanta, Georgia

March 1, 2023

February 27, 2024

AGCO CORPORATION

12 unchanged sentences

Restructuring expenses 11.9 6.1 15.3

Bad debt expense 3.3 0.5 14.5

Income from operations 1,700.4 1,265.4 1,001.4

22 unchanged sentences

Net income $ 1,171.3 $ 874.7 $ 901.5

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

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

Defined benefit pension plans, net of taxes:

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

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

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

Net loss recognized due to curtailment — — 6.3

Net actuarial gain (loss) arising during the year 12.3 53.6 ( 32.7 )

Net actuarial (loss) gain arising during the year ( 16.1 ) 12.3 53.6

Amortization of prior service cost included in net periodic pension cost 1.3 — 0.6

4 unchanged sentences

Foreign currency translation adjustments 102.3 ( 30.0 ) ( 45.5 )

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

Other comprehensive income (loss), net of reclassification adjustments 95.0 ( 31.3 ) 39.5

Comprehensive income 1,266.3 843.4 941.0

22 unchanged sentences

Current Liabilities:

Current portion of long-term debt $ 187.1 $ 2.1

Short term borrowings 8.9 90.8

Borrowings due within one year $ 15.0 $ 196.0

Accounts payable 1,207.3 1,385.3

44 unchanged sentences

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

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

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

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

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

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

Defined benefit pension plans, net of taxes:

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

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

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

Amortization of prior service cost included in net periodic pension cost — — — $ — 2.1 — — 2.1 — 2.1

Prior service (cost) credit arising during year — — — $ — 10.0 — — 10.0 — 10.0

Net (gain) loss recognized due to settlement — — — $ — 0.1 — — 0.1 — 0.1

Net gain recognized due to curtailment — — — $ — 6.3 — — 6.3 — 6.3

Net actuarial gain (loss) arising during year — — — $ — 53.6 — — 53.6 — 53.6

Amortization of prior service cost (credit) included in net periodic pension cost — — — $ — 0.6 — — 0.6 — 0.6

Amortization of net actuarial losses included in net periodic pension cost — — — $ — 12.3 — — 12.3 — 12.3

9 unchanged sentences

Distribution to noncontrolling interest — — — — — — — — ( 13.8 ) ( 13.8 )

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

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

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

Defined benefit pension plans, net of taxes:

Prior service credit arising during year — — — — 10.0 — — 10.0 — 10.0

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

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

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

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

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

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

Net actuarial gain (loss) arising during year — — — — 12.3 — — 12.3 — 12.3

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

3 unchanged sentences

Net income (loss) — — — 1,171.4 — — — — ( 0.1 ) 1,171.3

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

Payment of dividends to shareholders — — — ( 457.4 ) — — — — — ( 457.4 )

3 unchanged sentences

Stock compensation — — 44.9 — — — — — — 44.9

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

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

Purchases and retirement of common stock ( 371,669 ) — ( 49.9 ) ( 3.1 ) — — — — — ( 53.0 )

Defined benefit pension plans, net of taxes:

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

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

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

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

Net actuarial gain (loss) arising during year — — — — ( 16.1 ) — — ( 16.1 ) — ( 16.1 )

Amortization of prior service cost (credit) included in net periodic pension cost — — — — 1.3 — — 1.3 — 1.3

Amortization of net actuarial losses included in net periodic pension cost — — — — 7.0 — — 7.0 — 7.0

16 unchanged sentences

Equity in net earnings of affiliates, net of cash received ( 36.4 ) ( 40.8 ) ( 1.9 )

Deferred income tax (benefit) provision ( 58.0 ) ( 117.9 ) 3.4

Deferred income tax benefit ( 264.4 ) ( 58.0 ) ( 117.9 )

Other 6.7 16.2 20.5

Changes in operating assets and liabilities, net of effects from purchase of businesses:

Changes in operating assets and liabilities:

Accounts and notes receivable, net ( 443.8 ) ( 306.1 ) ( 207.7 )

21 unchanged sentences

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

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

Net cash used in financing activities ( 671.7 ) ( 407.0 ) ( 539.5 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 79.7 ) ( 34.0 ) ( 62.3 )

(Decrease) increase in cash, cash equivalents and restricted cash ( 99.6 ) ( 230.0 ) 686.3

Decrease in cash, cash equivalents and restricted cash ( 194.0 ) ( 99.6 ) ( 230.0 )

Cash, cash equivalents and restricted cash, beginning of year 789.5 889.1 1,119.1

4 unchanged sentences

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

AGCO Corporation and subsidiaries (“AGCO” or the “Company”) is a leading manufacturer and distributor of agricultural equipment and related replacement parts throughout the world.

AGCO Corporation and subsidiaries (“AGCO” or the “Company”) is a global leader in the design, manufacture and distribution of agricultural machinery and precision agriculture technology.

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

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

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

The Company distributes most of its products through a combination of approximately 3,100 independent dealers and distributors.

The Company also utilizes associates and licensees to provide a distribution channel for its products.

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

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

("Trimble") to form a joint venture ("Trimble Ag joint venture") (i) to which Trimble will contribute its agricultural business (other than certain Global Navigation Satellite System and guidance technologies) and AGCO will contribute JCA Technologies, and (ii) AGCO will acquire an 85 % interest in the joint venture for cash consideration of $ 2.0 billion.

The Trimble Ag joint venture will be the exclusive provider of Trimble’s comprehensive technology offering, supporting the future development and distribution of next-generation agriculture technologies.

The Company expects the transaction to close during the first half of 2024.

The closing is subject to customary conditions, including compliance with antitrust and similar laws.

See Note 2 for further information.

Basis of Presentation and Consolidation

6 unchanged sentences

All significant intercompany balances and transactions have been eliminated in the Consolidated Financial Statements.

Certain prior-period amounts have been reclassified in the accompanying Consolidated Financial Statements and Notes thereto in order to conform to the current period presentation.

Use of Estimates

3 unchanged sentences

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

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

Foreign Currency Translation

1 unchanged sentence

Income and expense items are translated at average rates of exchange prevailing during the period.

Translation adjustments are included in “Accumulated other comprehensive loss” in stockholders’ equity within the Company’s Consolidated Balance Sheets.

Gains and losses, which result from foreign currency transactions, are included in the accompanying Consolidated Statements of Operations.

The Company changed the functional currency of its wholly-owned subsidiary from the Argentinian peso to the U.S.

dollar effective July 1, 2018.

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

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

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

Translation adjustments are included in “Accumulated other comprehensive loss” in

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

dollars, has broadened significantly.

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

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

to transfer funds out of Argentina.

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

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

stockholders’ equity within the Company’s Consolidated Balance Sheets.

Gains and losses, which result from foreign currency transactions, are included in the accompanying Consolidated Statements of Operations.

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 the Company's 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.

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

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 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 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 Argentina S.A.

("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 assets and liabilities are reported in “Equity in net earnings of affiliates” within our Consolidated Statements of Operations.

Cash, Cash Equivalents and Restricted Cash

10 unchanged sentences

The Company considers all investments with an original maturity of three months or less to be cash equivalents.

(3) Consisted primarily of cash in escrow or held as guarantee to support specific requirements.

(3) Consisted primarily of cash in escrow or held as a guarantee.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accounts and Notes Receivable

Accounts and notes receivable arise from the sale of equipment and replacement parts to independent dealers, distributors or other customers.

In the United States and Canada, amounts due from sales to dealers are immediately due upon a retail sale of the underlying equipment by the dealer with the exception of sales of grain storage and protein production systems as discussed further below.

In the United States and Canada, receivables arising from sales to dealers are immediately due upon a retail sale of the underlying equipment by the dealer with the exception of sales of grain storage and protein production systems as discussed further below.

If not previously paid by the dealer in the United States and Canada, installment payments are required generally beginning after the interest-free period with the remaining outstanding equipment balance generally due within 12 months after shipment or delivery.

14 unchanged sentences

Payment terms for some highly seasonal products have a specified due date during the year regardless of the shipment or delivery date.

For sales in most markets outside of the United States and Canada, the Company generally does not charge

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

interest on outstanding receivables with its dealers and distributors.

For sales in most markets outside of the United States and Canada, the Company generally does not charge interest on outstanding receivables due from its dealers and distributors.

Sales of replacement parts generally are payable within 30 days to 90 days of shipment, with terms for some larger, seasonal stock orders generally payable within six months of shipment.

14 unchanged sentences

$ 3,752.7 $ 2,234.2 $ 7,540.5 $ 885.0 $ 14,412.4 100.0 %

The Company has an agreement to permit transferring, on an ongoing basis, a majority of its wholesale interest-bearing and non-interest bearing accounts receivable in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Brazilian finance joint ventures.

Qualified dealers may obtain additional financing through the Company’s U.S., Canadian, European and Brazilian finance joint ventures at the joint ventures’ discretion.

13 unchanged sentences

Globally, reserves for incentive programs that will be paid in cash or credit memos, as is the case with most of the Company’s volume discount programs, as well as sales with incentives associated with accounts receivable sold to its finance joint ventures, are recorded within “Accrued expenses” within the Company’s Consolidated Balance Sheets.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accounts and notes receivable are shown net of allowances for sales incentive discounts available to dealers and for doubtful accounts.

Accounts and notes receivable are shown net of allowances for sales incentive discounts available to dealers and for credit losses.

Cash flows related to the collection of receivables are reported within “Cash flows from operating activities” within the Company’s Consolidated Statements of Cash Flows.

1 unchanged sentence

Sales incentive discounts $ 54.7 $ 7.6

Doubtful accounts 31.3 32.6

Allowance for credit losses

$ 86.6 $ 38.9

The Company accounts for its provision for doubtful accounts in accordance with Accounting Standards Update (“ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”).

The Company maintains allowances for estimated credit losses, which are developed at a market, country, and region level based on risk of collection as well as current and forecasted economic conditions.

The Company calculates the allowance based on an assessment of the risk when the accounts receivable is recognized and records within "Selling, general and administrative expenses" in the Company's Statement of Operations.

Write-offs are recorded at the time a customer receivable is deemed uncollectible.

Description Balance at

of Period Acquired

Businesses Charged to

Expenses Write-offs

Translation Balance at

End of Period

Year ended December 31, 2023

Allowances for credit losses

$ 31.3 $ — $ 4.2 $ ( 4.6 ) $ 1.0 $ 31.9

Year ended December 31, 2022

Allowances for credit losses

$ 32.6 $ 0.1 $ 3.3 $ ( 3.2 ) $ ( 1.5 ) $ 31.3

Year ended December 31, 2021

Allowances for credit losses

$ 36.4 $ 0.2 $ 0.5 $ ( 2.8 ) $ ( 1.7 ) $ 32.6

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In the United States and Canada, sales incentives can be paid through future cash settlements of receivables and through credit memos to Company’s dealers or through reductions in retail financing rates paid to the Company’s finance joint ventures.

5 unchanged sentences

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

At December 31, 2022 and 2021, the Company had recorded $ 211.6 million and $ 202.6 million, respectively, as an adjustment for surplus and obsolete inventories.

These adjustments are reflected within “Inventories, net” within the Company’s Consolidated Balance Sheets.

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

Finished goods $ 994.9 $ 718.2

Repair and replacement parts 750.1 697.8

Work in process 369.8 282.8

Raw materials 1,074.9 894.9

Inventories, net $ 3,189.7 $ 2,593.7

Cash flows related to the sale of inventories are reported within “Cash flows from operating activities” within the Company’s Consolidated Statements of Cash Flows.

Recoverable Indirect Taxes

The Company’s Brazilian operations incur value added taxes (“VAT”) on certain purchases of raw materials, components and services.

These taxes are accumulated as tax credits and create assets that are reduced by the VAT collected from the Company’s sales in the Brazilian market.

The Company regularly assesses the recoverability of these tax credits, and establishes reserves when necessary against them, through analyses that include, amongst others, the history of realization, the transfer of tax credits to third parties as authorized by the government, anticipated changes in the supply chain and the future expectation of tax debits from the Company’s ongoing operations.

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment

2 unchanged sentences

Expenditures for maintenance and repairs are primarily charged to expense as incurred.

Property, plant and equipment, net at December 31, 2022 and 2021 consisted of the following (in millions):

Land $ 141.1 $ 141.0

Buildings and improvements 920.7 875.9

Machinery and equipment 2,789.8 2,702.3

Furniture and fixtures 182.8 171.1

Gross property, plant and equipment 4,034.4 3,890.3

Accumulated depreciation and amortization ( 2,443.2 ) ( 2,425.5 )

Property, plant and equipment, net $ 1,591.2 $ 1,464.8

Goodwill, Other Intangible Assets and Long-Lived Assets

The Company tests 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.

The Company tests 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.

1 unchanged sentence

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

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

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

For reporting units where the Company performs a one-step quantitative assessment, the Company compares the fair value of each reporting unit, which is determined based on a combination of a discounted cash flow valuation approach and a market multiple valuation approach, to its respective carrying value of net assets, including goodwill.

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

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

For reporting units where the Company performs a quantitative assessment, it compares 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 in accordance with ASU 2017-04.

For the quantitative impairment assessment, the Company utilizes a combination of valuation techniques.

A discounted cash flow model (income approach) is used 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) is used, 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.

The Company reviews its 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.

4 unchanged sentences

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

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

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

Based on macroeconomic conditions throughout 2020, the Company assessed its goodwill and other intangible assets for indications of impairment, and as of June 30, 2020, the Company concluded there were indicators of impairment during the three months ended June 30, 2020 related to one of its smaller reporting units, which was a 50 %-owned tillage and seeding equipment joint

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

The results of our goodwill impairment analyses conducted as of October 1, 2023, 2022 and 2021 indicated that no impairment existed and no reduction in the carrying amount of goodwill was required.

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

The Company’s grain storage and protein production systems Europe/Middle East reporting unit operates within the Europe/Middle East geographical reportable segment.

The Chinese harvesting business operates within the Asia/Pacific/Africa geographical reportable segment and the former sprayer reporting unit operates within the North American geographical reportable segment.

Changes in the carrying amount of goodwill during the years ended December 31, 2022, 2021 and 2020 are summarized as follows (in millions):

America South

America Europe/

Middle East Asia/

Pacific/Africa Consolidated

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

Acquisitions 7.2 — — — 7.2

Impairment charge ( 20.0 ) — — — ( 20.0 )

Foreign currency translation 0.2 ( 24.7 ) 38.0 7.5 21.0

Balance as of December 31, 2020 593.4 87.5 501.3 124.3 1,306.5

Acquisition 16.2 — 0.6 — 16.8

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

Balance as of December 31, 2021 609.6 81.7 469.5 120.0 1,280.8

Acquisitions 59.8 — — — 59.8

Foreign currency translation ( 2.1 ) 4.3 ( 25.2 ) ( 6.8 ) ( 29.8 )

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

The Chinese harvesting business operates within the Asia/Pacific/Africa geographical reportable segment and the former sprayer reporting unit operated within the North American geographical reportable segment.

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

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

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

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Land use rights 46 years

For the years ended December 31, 2022, 2021 and 2020, acquired intangible asset amortization was $ 60.1 million, $ 60.9 million and $ 59.5 million, respectively.

The Company estimates amortization of existing intangible assets will be $ 56.3 million in 2023, $ 55.1 million in 2024, $ 51.2 million in 2025, $ 22.8 million in 2026, and $ 18.7 million in 2027.

The Company has previously determined that two of its trademarks have an indefinite useful life.

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

Both the Massey

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

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

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

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

Gross Carrying Amounts Trademarks and

Trade Names Customer

Relationships Patents and

Technology Land Use

Gross carrying amounts:

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

Acquisitions 0.7 3.2 6.1 — 10.0

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

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

Balance as of December 31, 2021 189.0 568.6 139.9 7.0 904.5

Acquisitions 7.1 15.4 15.4 — 37.9

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

Balance as of December 31, 2022 $ 191.8 $ 574.5 $ 150.6 $ 6.5 $ 923.4

Accumulated Amortization Trademarks and

Trade Names Customer

Relationships Patents and

Technology Land Use

Accumulated amortization:

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

Amortization expense 10.8 37.4 12.5 0.2 60.9

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

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

Balance as of December 31, 2021 93.1 409.7 94.7 1.5 599.0

Amortization expense 11.7 37.9 10.4 0.1 60.1

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

Balance as of December 31, 2022 $ 103.3 $ 440.8 $ 101.5 $ 1.6 $ 647.2

Indefinite-Lived Intangible Assets Trademarks and

Balance as of December 31, 2020 $ 89.4

Foreign currency translation ( 2.7 )

Balance as of December 31, 2021 86.7

Foreign currency translation ( 1.9 )

Balance as of December 31, 2022 $ 84.8

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accrued Expenses

Accrued expenses at December 31, 2022 and 2021 consisted of the following (in millions):

Reserve for volume discounts and sales incentives $ 630.8 $ 602.3

Warranty reserves 546.0 492.7

Accrued employee compensation and benefits 390.2 322.3

Accrued taxes 344.8 282.5

Other 359.5 362.4

Balance at the end of the year $ 2,271.3 $ 2,062.2

Warranty Reserves

The warranty reserve activity for the years ended December 31, 2022, 2021 and 2020 consisted of the following (in millions):

2022 2021 2020

Balance at beginning of the year $ 592.5 $ 521.8 $ 392.8

Acquisitions — — 0.2

Accruals for warranties issued during the year 338.8 344.9 310.2

Settlements made (in cash or in kind) during the year ( 261.7 ) ( 241.8 ) ( 204.3 )

Foreign currency translation ( 29.6 ) ( 32.4 ) 22.9

Balance at the end of the year $ 640.0 $ 592.5 $ 521.8

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

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

Approximately $ 94.0 million and $ 99.8 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively.

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

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

Insurance Reserves

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The Company does not recognize revenue in cases where collectability is not probable, and defers the recognition until collection is probable or payment is received.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company generates revenue from the manufacture and distribution of agricultural equipment and replacement parts.

Sales of equipment and replacement parts, which represents a majority of the Company’s net sales, are recorded by the Company at the point in time when title and control have been transferred to an independent dealer, distributor or other customer.

Sales of equipment and replacement parts, which represent a majority of the Company’s net sales, are recorded by the Company at the point in time when title and control have been transferred to an independent dealer, distributor or other customer.

Title generally passes to the dealer or distributor upon shipment or specified delivery, and the risk of loss upon damage, theft or destruction of the equipment is the responsibility of the dealer, distributor or designated third-party carrier.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company believes control passes and the performance obligation is satisfied at the point of the stated shipping or delivery term with respect to such sales.

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Sales and other related taxes are excluded from the transaction price.

Shipping and handling costs associated with freight activities after the customer has obtained control are accounted for as fulfillment costs and are expensed and accrued at the time revenue is recognized in “Cost of goods sold” and “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Operations.

Shipping and handling costs associated with freight activities after the customer has obtained control are accounted for as fulfillment costs and are expensed at the time revenue is recognized in “Cost of goods sold” and “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Operations.

As afforded under the practical expedient in ASU 2014-09, the Company does not adjust the amount of revenue to be recognized under a contract with a dealer, distributor or other customer for the time value of money when the difference between the receipt of payment and the recognition of revenue is less than one year.

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Revenue is recognized for the extended warranty contract on a straight-line basis, which the Company believes approximates the costs expected to be incurred in satisfying the obligations, over the extended warranty period.

The extended warranty period ranges from one to five years .

Payment is received or revenue is deferred for free contracts at the inception of the extended warranty contract or maintenance contract, which is recognized as a contract liability for the amount in excess of the revenue recognized.

The revenue associated with the sale of extended warranty contracts is not significant.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The extended warranty period for the majority of products ranges from three to five years .

When payment is received in advance of the performance obligation being satisfied, or when a portion of the overall transaction price is allocated to the extended warranty offered at no cost, revenue is deferred at contract inception and a contract liability is recognized.

Precision Technology Services Revenue.

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Revenue is recognized for the hardware component when control is transferred to the dealer or distributor.

Payment is received or revenue is deferred for free subscriptions at inception of the precision technology subscription period, which is recognized as a contract liability for the amount in excess of the revenue recognized.

When payment is received in

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

advance of the performance obligation being satisfied, or when a portion of the overall transaction price is allocated to a free subscription, revenue is deferred at contract inception and a contract liability is recognized.

The revenue associated with the sale of precision technology services is not significant.

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See Note 24 for additional information regarding the Company’s sources of revenue and associated contract liabilities and performance obligations.

Stock Incentive Plans

Stock compensation expense was recorded as follows (in millions).

Refer to Note 10 for additional information regarding the Company’s stock incentive plans during 2022, 2021 and 2020:

Years Ended December 31,

2022 2021 2020

Cost of goods sold $ 1.3 $ 1.0 $ 1.1

Selling, general and administrative expenses 32.7 26.6 36.8

Total stock compensation expense $ 34.0 $ 27.6 $ 37.9

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

Research and Development Expenses

Research and development expenses are expensed as incurred and are included in “Engineering expenses” in the Company’s Consolidated Statements of Operations.

Research and development expenses for the years ended December 31, 2023, 2022 and 2021 totaled approximately $ 420.9 million, $ 315.4 million and $ 272.9 million, respectively.

Advertising Costs

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Shipping and handling costs are accounted for as fulfillment costs and are expensed and accrued at the time revenue is recognized within “Cost of goods sold,” with the exception of certain handling costs included in “Selling, general and administrative expenses” in the amount of $ 52.2 million, $ 48.4 million and $ 43.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Interest Expense, Net

6 unchanged sentences

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

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.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

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See Note 19 for additional information regarding the Company’s income taxes.

Net Income Per Common Share

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each period.

Diluted net income per common share assumes the exercise of outstanding stock-settled stock appreciation rights (“SSARs”) and the vesting of performance share awards and restricted stock units using the treasury stock method when the effects of such assumptions are dilutive.

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share during the years ended December 31, 2022, 2021 and 2020 is as follows (in millions, except per share data):

2022 2021 2020

Basic net income per share:

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

Weighted average number of common shares outstanding 74.6 75.2 75.0

Basic net income per share attributable to AGCO Corporation and subsidiaries $ 11.92 $ 11.93 $ 5.69

Diluted net income per share:

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

Weighted average number of common shares outstanding 74.6 75.2 75.0

Dilutive SSARs, performance share awards and restricted stock units

Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share

74.9 75.7 75.6

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

AGCO CORPORATION

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Defined benefit pension plans $ ( 10.0 ) $ 2.6 $ ( 7.4 ) $ —

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

Deferred gains and losses on derivatives ( 0.3 ) 0.4 0.1 —

Foreign currency translation adjustments 102.3 — 102.3 —

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

Net gain on derivatives 2.5 ( 0.4 ) 2.1 —

Deferred gains and losses on derivatives ( 0.5 ) — ( 0.5 ) —

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

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

Total components of other comprehensive loss

$ ( 33.4 ) $ 1.2 $ ( 32.2 ) $ 0.9

AGCO Corporation and Subsidiaries Noncontrolling Interests

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

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

Deferred gains and losses on derivatives 2.5 ( 0.4 ) 2.1 —

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

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

The Company uses foreign currency contracts to hedge the foreign currency exposure of certain receivables and payables.

The contracts are for periods consistent with the exposure being hedged and generally have maturities of one year or less.

These contracts are classified as non-designated derivative instruments.

The Company also enters into foreign currency contracts designated as cash flow hedges of expected sales.

The Company’s foreign currency contracts mitigate risk due to exchange rate fluctuations because gains and losses on these contracts generally offset losses and gains on the exposure being hedged.

The notional amounts of the foreign currency contracts do not represent amounts exchanged by the parties and, therefore, are not a measure of the Company’s risk.

The amounts exchanged are calculated on the basis of the notional amounts and other terms of the contracts.

The credit and market risks under these contracts are not considered to be significant.

The Company’s interest expense is, in part, sensitive to the general level of interest rates, and the Company manages its exposure to interest rate risk through the mix of floating rate and fixed rate debt.

From time to time, the Company enters into interest rate swap agreements in order to manage the Company’s exposure to interest rate fluctuations.

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

Total components of other comprehensive income

$ 67.5 $ ( 27.6 ) $ 39.9 $ ( 0.4 )

The Company uses derivative and non-derivative instruments to manage its exposure to market risks, such as changes in foreign currency exchange rates, commodity prices and interest rates.

The Company does not enter into derivative transactions for speculative purposes.

The Company's derivative instruments are recognized as either assets or liabilities on the Consolidated Balance Sheets and measured at fair value.

The accounting for changes in the fair value of each derivative financial instrument depends on whether it has been designated and qualifies as an accounting hedge, as well as the type of

hedging relationship identified.

See Note 14 for additional information regarding the Company’s derivative instruments and hedging activities.

The Company leases certain land, buildings, machinery, equipment, vehicles and office and computer equipment under finance and operating leases.

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

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

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

The standard allows for two types of leases for income

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s gross profit is sensitive to the cost of steel and other raw materials.

From time to time, the Company enters into derivative instruments to hedge a portion of its commodity purchases against adverse movements in commodity prices.

The Company’s hedging policy prohibits it from entering into any foreign currency contracts for speculative trading purposes.

See Note 11 for additional information regarding the Company’s derivative instruments and hedging activities.

statement recognition purposes:

operating leases and finance leases.

Operating leases result in the recognition of a single lease expense on a straight-line basis over the lease term whereas finance leases result in an accelerated expense.

ASU 2016-02 also contains guidance regarding the identification of embedded leases in service and supply contracts, as well as the identification of lease and nonlease components of an arrangement.

All leases greater than 12 months result in the recognition of an ROU asset and liability at the lease commencement date based on the present value of the lease payments over the lease term.

The present value of the lease payments is calculated using the applicable weighted-average discount rate.

The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate.

The incremental borrowing rate is estimated using the currency denomination of the lease, the contractual lease term and the Company’s applicable borrowing rate.

The Company does not recognize an ROU asset or lease liability with respect to operating leases with an initial term of 12 months or less and recognizes expense on such leases on a straight-line basis over the lease term.

The Company accounts for lease components separately from nonlease components other than for real estate and office equipment.

The Company evaluates its supplier agreements for the existence of leases and determined these leases comprised an insignificant portion of its supplier agreements.

As such, these leases were not material to the Company’s Consolidated Balance Sheets.

The Company has certain leases that contain one or more options to terminate or renew that can extend the lease term up to 13 years.

Options that the company is reasonably certain to exercise are included in the lease term.

The depreciable life of ROU assets and leasehold improvements are limited by the expected lease term.

The Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority.

Generally, the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

Recent Accounting Pronouncements

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

Disclosure by Business

Entities about Government Assistance,” which improves the transparency of government assistance received by most business

entities by requiring the disclosure of:

(1) the types of government assistance received;

(2) the accounting for such assistance;

and (3) the effect of the assistance on a business entity’s financial statements.

This guidance was effective for annual periods beginning after December 15, 2021.

Early adoption is permitted.

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

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

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

New Accounting Pronouncements to be Adopted

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326):

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments,” which requires measurement and recognition of expected versus incurred credit losses for financial assets.

1 unchanged sentence

Effective Dates,” which delays the effective date of ASU 2016-13 for smaller reporting companies and other non-SEC reporting entities.

This applies to the Company’s equity method finance joint ventures, which are now required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

This delay applies to the Company’s equity method finance joint ventures, which were required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

The standard, and its subsequent modification, impacts the results of operations and financial condition of the Company’s finance joint ventures.

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

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

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

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

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

Early adoption is permitted.

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

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

The adoption of ASU 2022-04 resulted in disclosure of the Company's supplier financing programs.

Refer to Note 10 for further details.

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

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

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

(“JCA”) for 63.0 million Canadian dollars (or approximately $ 49.2 million as of May 2, 2022).

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

New Accounting Pronouncements to be Adopted

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements and requires entities to disclose its significant segment expense categories and amounts for each reportable segment.

The ASU is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures".

The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The requirements will be effective for annual periods beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures.

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

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

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

Immediately following the closing and as a result of the transaction, the Company will own an 85 % interest in the Trimble Ag joint venture.

The closing is expected in the first half of 2024.

The closing is subject to customary conditions, including compliance with antitrust and similar laws.

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

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

The amount available under the the Bridge Facility was reduced by $ 250.0 million upon the Company's entry into a delayed term loan facility in December 2023.

As of December 31, 2023, the amount available under the Bridge Facility was $ 1.75 billion.

Refer to Note 11 for further information.

During the year ended December 31, 2023, the Company paid $ 9.5 million in fees related to the Bridge Facility commitment which were recorded as a deferred asset included within “Other current assets” in the Company’s Consolidated Balance Sheet and will be amortized to interest expense over the life of the commitment.

On May 2, 2022, the Company acquired JCA for 63.0 million Canadian dollars (or approximately $ 49.2 million as of May 2, 2022).

JCA is located in Winnipeg, Manitoba, Canada, and specializes in the design of electronic systems and software development to automate and control agricultural equipment.

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

The acquired net assets primarily consisted of accounts receivable, inventories, other current and noncurrent assets, accounts payable, accrued expenses, other current and noncurrent liabilities, property, plant and equipment, deferred tax liabilities as well as customer relationship, technology and trademark identifiable intangible assets.

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

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

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

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

On January 1, 2022 the Company acquired Appareo Systems, LLC (“Appareo”) for approximately $ 62.1 million, net of approximately $ 0.5 million of cash.

As a result of the acquisition of the remaining 50 % interest in IAS, the Company’s previous operating joint venture with Appareo, the Company recorded a gain of approximately $ 3.4 million on the remeasurement of the previously held equity interest within “Other expense, net” in the Company’s Consolidated Statements of

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The fair value of the previously held 50 % interest in the joint venture as of the acquisition date was approximately $ 11.2 million.

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

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

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

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

Intangible Asset

Amount Weighted-Average Useful Life

Customer relationships $ 15.4 10 years

Technology 15.4 8 years

Trademarks 5.7 10 years

Non-competition agreements 1.4 5 years

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

(“CSM”) for approximately $ 5.7 million.

CSM is headquartered in Bloomington, Illinois and creates and designs customized mobile-enabled technology applications and websites.

The acquired net assets were insignificant.

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

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

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

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

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

(“Faromatics”) for approximately € 4.6 million (or approximately $ 5.5 million) net of approximately € 0.1 million (or approximately $ 0.1 million) of cash and € 0.8 million (or approximately $ 0.9 million) of escrowed cash which could be payable by the Company within 18 months of the acquisition date.

Faromatics is headquartered in Barcelona, Spain, and manufactures and sells ChickenBoy®, the world’s first ceiling-suspended robot that monitors broiler chickens and helps farmers increase animal welfare and farm productivity.

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

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

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

Headsight is headquartered in Bremen, Indiana and manufactures header height sensors used in corn and grain harvesting operations.

The Company recorded approximately $ 4.8 million of customer relationship, technology and trademark identifiable intangible assets and approximately $ 8.9 million of goodwill associated with the acquisition.

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

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

The associated goodwill has been included in the

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Company’s North America geographical reportable segment.

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

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

Intangible Asset

3 unchanged sentences

Trademarks 5.7 10 years

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

for approximately $ 2.8 million.

151 Research develops intelligent security, remote monitoring and management and enhanced imaging solutions for grain storage operations.

The acquired net assets were insignificant.

The Company recorded goodwill of approximately $ 7.2 million associated with the acquisition.

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

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

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

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

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

Restructuring Expenses and Impairment Charges

Restructuring Expenses

The Company has announced and initiated actions over the course of several years to rationalize employee headcount at various manufacturing facilities and various administrative offices located in Europe, South America, Africa, China and the United States, as well as the rationalization of its grain storage and protein production system operations.

These rationalizations were taken to reduce costs in response to fluctuating global market demand.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Employee Severance Facility Closure Costs Write-down of Property, Plant

and Equipment Other Related

Closure Costs Loss on Sale of

Joint Venture Total

Balance as of December 31, 2019 $ 4.8 $ — $ — $ — $ — $ 4.8

2020 provision 11.3 4.5 2.5 1.8 — 20.1

Non-cash expense — — ( 2.5 ) — — ( 2.5 )

Cash expense 11.3 4.5 — 1.8 — 17.6

2020 provision reversal ( 0.4 ) — — — — ( 0.4 )

2020 cash activity ( 4.5 ) ( 0.6 ) — — — ( 5.1 )

Foreign currency translation ( 0.1 ) — — — — ( 0.1 )

Balance as of December 31, 2020 11.1 3.9 — 1.8 — 16.8

2021 provision 18.4 — 0.2 1.5 — 20.1

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

Cash expense 18.4 — — 1.5 — 19.9

2021 provision reversal ( 2.2 ) — — ( 0.1 ) ( 2.5 ) ( 4.8 )

2021 cash activity ( 12.3 ) ( 3.9 ) — ( 2.9 ) 2.5 ( 16.6 )

Foreign currency translation ( 0.5 ) — — ( 0.1 ) — ( 0.6 )

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

2022 provision 6.9 — — — — 6.9

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

2022 cash activity ( 12.6 ) — — ( 0.2 ) — ( 12.8 )

Foreign currency translation ( 1.2 ) — — — — ( 1.2 )

Balance as of December 31, 2022 $ 6.8 $ — $ — $ — $ — $ 6.8

During the three months ended December 31, 2019, the Company exited and sold its 50 % interest in its USC, LLC joint venture to its joint venture partner for approximately $ 5.1 million.

The operations of the joint venture were part of the Company ’ s grain storage and production system operations, and the decision to sell the joint venture was as a result of the overall rationalization of the business.

The Company recorded a loss of approximately $ 2.1 million associated with the sale, which was reflected within “Restructuring expenses” in the Company’s Consolidated Statements of Operations.

As a result of the final payments received from the former joint venture partner related to the sale during 2021 the Company recorded a gain of approximately $ 2.5 million, also reflected within “Restructuring expenses” in the Company’s Consolidated Statements of Operations.

Impairment Charges

In light of the conflict between Russia and Ukraine, during the three months ended March 31, 2022, the Company assessed the fair value of its gross assets related to the joint ventures operating in Russia for potential impairment and recorded asset impairment charges of approximately $ 36.0 million, reflected as “Impairment charges” in its Consolidated Statements of Operations, with an offsetting benefit of approximately $ 12.2 million included within “Net loss (income) attributable to noncontrolling interests.” The Company sold its interest in its Russian distribution joint venture during the three months ended December 31, 2022.

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

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

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

Non-competition agreements 1.4 5 years

PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment, net at December 31, 2023 and 2022 consisted of the following (in millions):

Land $ 154.0 $ 141.1

Buildings and improvements 1,042.5 920.7

Machinery and equipment 3,178.9 2,789.8

Furniture and fixtures 210.7 182.8

Gross property, plant and equipment 4,586.1 4,034.4

Accumulated depreciation and amortization ( 2,665.2 ) ( 2,443.2 )

Property, plant and equipment, net $ 1,920.9 $ 1,591.2

AGCO CORPORATION

2 unchanged sentences

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

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

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays an annual fee related to the servicing of the receivables sold.

For the years ended 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.

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays an annual fee to its finance joint ventures related to the servicing of the receivables sold.

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

3 unchanged sentences

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

As of December 31, 2022 and 2021, the cash received from these arrangements 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.

Under these arrangements, the Company is required to continue to service the sold receivables at market rates.

The Company does not maintain any direct retained interest in the receivables.

The Company reviewed its accounting for the accounts receivable sales agreements and determined that these facilities should be accounted for as off-balance sheet transactions.

Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Consolidated Statements of Operations, were approximately $ 148.4 million, $ 71.1 million and $ 24.5 million during 2023, 2022 and 2021, respectively.

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

The receivables associated with these arrangements are without recourse to the Company.

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

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.

4 unchanged sentences

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the years ended December 31, 2023, 2022 and 2021 are summarized as follows (in millions):

America South

America Europe/

Middle East Asia/

Pacific/Africa Consolidated

Balance as of December 31, 2020 $ 593.4 $ 87.5 $ 501.3 $ 124.3 $ 1,306.5

Acquisitions 16.2 — 0.6 — 16.8

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

Balance as of December 31, 2021 609.6 81.7 469.5 120.0 1,280.8

Acquisition 59.8 — — — 59.8

Foreign currency translation ( 2.1 ) 4.3 ( 25.2 ) ( 6.8 ) ( 29.8 )

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

Foreign currency translation 0.9 7.5 14.2 — 22.6

Balance as of December 31, 2023 $ 668.2 $ 93.5 $ 458.5 $ 113.2 $ 1,333.4

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the carrying amount of acquired intangible assets during 2023 and 2022 are summarized as follows (in millions):

Gross Carrying Amounts Trademarks and

Trade Names Customer

Relationships Patents and

Technology Land Use

Gross carrying amounts:

Balance as of December 31, 2021 $ 189.0 $ 568.6 $ 139.9 $ 7.0 $ 904.5

Acquisitions 7.1 15.4 15.4 — 37.9

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

Balance as of December 31, 2022 191.8 574.5 150.6 6.5 923.4

Impairment charge

— — ( 5.1 ) — ( 5.1 )

Foreign currency translation 2.5 6.2 2.7 ( 0.2 ) 11.2

Balance as of December 31, 2023 $ 194.3 $ 580.7 $ 148.2 $ 6.3 $ 929.5

Accumulated Amortization Trademarks and

Trade Names Customer

Relationships Patents and

Technology Land Use

Accumulated amortization:

Balance as of December 31, 2021 $ 93.1 $ 409.7 $ 94.7 $ 1.5 $ 599.0

Amortization expense 11.7 37.9 10.4 0.1 60.1

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

Balance as of December 31, 2022 103.3 440.8 101.5 1.6 647.2

Amortization expense 10.0 36.8 10.8 0.1 57.7

Impairment charge

— — ( 1.0 ) — ( 1.0 )

Foreign currency translation 1.2 5.8 2.0 — 9.0

Balance as of December 31, 2023 $ 114.5 $ 483.4 $ 113.3 $ 1.7 $ 712.9

Indefinite-Lived Intangible Assets Trademarks and

Balance as of December 31, 2021 $ 86.7

Foreign currency translation ( 1.9 )

Balance as of December 31, 2022 84.8

Foreign currency translation 1.1

Balance as of December 31, 2023 $ 85.9

For the years ended December 31, 2023, 2022 and 2021, amortization expense related to acquired intangible assets was $ 57.7 million, $ 60.1 million and $ 60.9 million, respectively.

The Company estimates amortization of existing intangible assets will be $ 57.5 million in 2024, $ 53.5 million in 2025, $ 24.9 million in 2026, $ 20.7 million in 2027, and $ 15.4 million in 2028.

The estimated amounts do not include amortization related to any acquired intangible assets that would be recorded related to the planned Trimble Ag joint venture.

External-use software, net, developed by the Company and marketed externally, was approximately $ 6.3 million and $ 3.4 million as of December 31, 2023 and 2022, respectively, and classified within “Intangible assets, net.” Amortization expense related to external-use software was approximately $ 1.8 million for the year ended December 31, 2023 and was classified within “Cost of goods sold.”

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ACCRUED EXPENSES

Accrued expenses at December 31, 2023 and 2022 consisted of the following (in millions):

Reserve for volume discounts and sales incentives $ 953.6 $ 630.8

Warranty reserves 679.9 546.0

Accrued employee compensation and benefits 454.8 390.2

Accrued taxes 401.2 344.8

Other 414.3 359.5

Balance at the end of the year $ 2,903.8 $ 2,271.3

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

Finished goods $ 1,460.7 $ 994.9

Repair and replacement parts 823.1 750.1

Work in process 255.2 369.8

Raw materials 901.7 1,074.9

Inventories, net $ 3,440.7 $ 3,189.7

At December 31, 2023 and 2022, the Company had recorded $ 238.9 million and $ 211.6 million, respectively, as a reserve for surplus and obsolete inventories.

These reserves are reflected within “Inventories, net” within the Company’s Consolidated Balance Sheets.

PRODUCT WARRANTY

The warranty reserve activity for the years ended December 31, 2023, 2022 and 2021, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

2023 2022 2021

Balance at beginning of the year $ 640.0 $ 592.5 $ 521.8

Accruals for warranties issued

464.9 338.8 344.9

Settlements made and deferred revenue recognized

( 328.7 ) ( 261.7 ) ( 241.8 )

Foreign currency translation 24.6 ( 29.6 ) ( 32.4 )

Balance at the end of the year $ 800.8 $ 640.0 $ 592.5

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

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

The Company's extended warranty period for the majority of products ranges from three to five years .

Approximately $ 679.9 million and $ 546.0 million of warranty reserves are included in “Accrued expenses” in the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively.

Approximately $ 120.9 million and $ 94.0 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

warranty claim recoveries to be received from the Company’s suppliers based upon contractual supplier arrangements are recorded within “Other current assets.”

INVESTMENTS IN AFFILIATES

5 unchanged sentences

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

The majority of the assets of the Company’s finance joint ventures represent finance receivables.

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

The majority of the assets of the Company’s finance joint ventures represents finance receivables.

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

Under the various joint venture agreements, Rabobank or its affiliates provide financing to the joint venture companies.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

AGCO has a 49 % interest in the Company’s finance joint ventures.

Refer to Note 18 for further discussion of the Company's relationship with Rabobank.

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

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

The Company concluded it has significant influence over its finance and manufacturing joint ventures and accounted for these investments using the equity method of accounting.

The Company records investments in affiliates at cost when it has concluded it does not have significant influence and has ownership interests below 20%.

The Company’s equity in net earnings of affiliates for the years ended December 31, 2023, 2022 and 2021 were as follows (in millions):

13 unchanged sentences

Income before income taxes $ 211.9 $ 179.7 $ 183.0

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At December 31, 2023 and 2022, the Company’s receivables from affiliates were approximately $ 146.9 million and $ 60.8 million, respectively.

2 unchanged sentences

The Company received dividends from certain finance joint ventures of approximately $ 28.9 million and $ 27.0 million during 2023 and 2022, respectively.

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

There were no returns on investment in excess of earnings in 2023.

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

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

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

SUPPLIER FINANCE PROGRAMS

The Company has supplier financing arrangements with certain banks or other intermediaries whereby a bank or intermediary purchases receivables held by the Company’s suppliers.

Under the program, suppliers have the option to be paid by the bank or intermediary earlier than the payment due date.

When the supplier receives an early payment, they receive discounted amounts, and the Company pays the bank or intermediary the face amount of the invoice on the payment due date.

The Company does not reimburse suppliers for any costs incurred for participation in the program.

The Company and its suppliers agree on the contractual terms, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the supplier finance programs.

The suppliers’ voluntary inclusion in the supplier financing programs has no bearing on the Company’s payment terms.

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

As of December 31, 2023, payment terms with the majority of the Company’s suppliers are generally 30 to 180 days, which correspond to the contractual terms, with rates that are based on market rates (such as SOFR) plus a credit spread.

There are no assets pledged as security under the programs.

As of December 31, 2023 and 2022, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 82.7 million and $ 121.5 million, respectively, and are reflected in “ Accounts payable ” in the Company’s Consolidated Balance Sheets.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

December 31, 2023 December 31, 2022

Credit facility, expires 2027 $ — $ 200.0

1.002 % EIB Senior term loan due 2025

EIB Senior Term Loan due 2029

Senior term loans due between 2023 and 2028 162.1 341.6

0.800 % Senior Notes Due 2028

Other long-term debt 3.1 5.1

Debt issuance costs ( 3.1 ) ( 3.6 )

1,379.5 1,451.9

Senior term loans due 2023, net of debt issuance costs — ( 184.9 )

Current portion of other long-term debt ( 2.3 ) ( 2.2 )

Total long-term indebtedness

$ 1,377.2 $ 1,264.8

At December 31, 2023, the aggregate scheduled maturities of long-term debt, excluding the current portion of long-term debt, are as follows (in millions):

Thereafter 274.1

Cash payments for interest were approximately $ 60.5 million, $ 45.1 million and $ 23.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Credit Facility and Term Loan Facility

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

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 matured on March 31, 2023.

The credit facility consists of a $ 325.0 million United States dollar tranche and a $ 925.0 million multi-currency tranche for loans denominated in United States 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 United States dollars, at the Company’s option, at either (1) the Secured Overnight Financing Rate (“SOFR”) plus 0.1 % plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating, or (2) the base rate, which is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5 %, and (iii) Term SOFR for a one-month tenor plus 1.0 %, plus a margin ranging from 0.000 % to 0.875 % based on the Company’s credit rating.

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the Term Loan Facility bears interest at the same rate and margin as the Credit Facility.

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

Uncommitted Credit Facility

In June 2022, the Company entered into an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 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, 2023 and December 31, 2022, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 110.7 million).

0.800 % Senior Notes Due 2028

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 664.0 million as of December 31, 2023) of senior notes at an issue price of 99.993 %.

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

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.

1.002 % European Investment Bank ("EIB") Senior Term Loan Due 2025

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 276.7 million as of December 31, 2023) from the EIB.

The loan matures on January 24, 2025.

The Company is permitted to prepay the term loan before its maturity date.

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

EIB Senior Term Loan due 2029

On September 29, 2023, the Company entered into a multi-currency Finance Contract with the EIB permitting the Company to borrow up to € 250.0 million (or approximately $ 276.7 million as of December 31, 2023) to fund up to 50 % of certain investments in research, development and innovation primarily in Germany, France and Finland during the period from 2023 through 2026.

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

The loan matures on October 26, 2029.

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

Interest is payable on the term loan at 3.980 % per annum, payable semi-annually in arrears.

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

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.

Senior Term Loans Due Between 2023 and 2028

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

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

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

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

In aggregate, as of December 31, 2023, the Company had indebtedness of € 146.5 million (or approximately $ 162.1 million) through a group of four remaining related term loan agreements.

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

As of December 31, 2023, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 1.67 % to 2.26 % and maturity dates between August 2025 and 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.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Bridge Facility

As discussed in Note 2, 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 a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility").

Amounts outstanding under the Bridge Facility will accrue interest at a rate equal to, at the Company's election, at either (1) the SOFR plus 0.1 % plus a margin ranging from 0.875 % to 2.625 % based on the Company's credit rating, or (2) the base rate, which is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5 %, and (iii) Term SOFR for a one-month tenor plus 1.0 %, plus a margin ranging from 0.000 % to 1.625 % based on the Company's credit rating, together with a duration fee based on the closing date of the transaction.

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

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

As of December 31, 2023, the amount available under the Bridge Facility was $ 1.75 billion.

Other Short-Term Borrowings

As of December 31, 2023 and 2022, the Company had short-term borrowings due within one year, excluding the current portion of long-term debt, of approximately $ 12.7 million and $ 8.9 million, respectively.

Standby Letters of Credit and Similar Instruments

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

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

RESTRUCTURING EXPENSES AND IMPAIRMENT CHARGES

Restructuring Expenses

In recent years, the Company has announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the U.S., Europe, South America, Africa and Asia, in order to reduce costs in response to response to fluctuating global market demand.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Employee Severance Facility Closure Costs Write-down of Property, Plant

and Equipment Other Related

Closure Costs Loss on Sale of

Joint Venture Total

Balance as of December 31, 2020 $ 11.1 $ 3.9 $ — $ 1.8 $ — $ 16.8

2021 provision 18.4 — 0.2 1.5 — 20.1

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

Cash expense 18.4 — — 1.5 — 19.9

2021 provision reversal ( 2.2 ) — — ( 0.1 ) ( 2.5 ) ( 4.8 )

2021 cash activity ( 12.3 ) ( 3.9 ) — ( 2.9 ) 2.5 ( 16.6 )

Foreign currency translation ( 0.5 ) — — ( 0.1 ) — ( 0.6 )

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

2022 provision 6.9 — — — — 6.9

Non-cash expense — — — — — —

Cash expense 6.9 — — — — 6.9

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

2022 cash activity ( 12.6 ) — — ( 0.2 ) — ( 12.8 )

Foreign currency translation ( 1.2 ) — — — — ( 1.2 )

Balance as of December 31, 2022 6.8 — — — — 6.8

2023 provision 9.9 — — 2.0 — 11.9

2023 cash activity ( 7.2 ) — — ( 2.0 ) — ( 9.2 )

Foreign currency translation ( 1.7 ) — — — — ( 1.7 )

Balance as of December 31, 2023 $ 7.8 $ — $ — $ — $ — $ 7.8

During the three months ended December 31, 2019, the Company exited and sold its 50 % interest in its USC, LLC joint venture to its joint venture partner for approximately $ 5.1 million.

The Company recorded a loss of approximately $ 2.1 million associated with the sale, which was reflected within “Restructuring expenses” in the Company’s Consolidated Statements of Operations.

In 2021, as a result of the final payments received from the former joint venture partner related to the sale, the Company recorded a gain of approximately $ 2.5 million, also reflected within “Restructuring expenses” in the Company’s Consolidated Statements of Operations.

Impairment Charges

As a consequence of the conflict between Russia and Ukraine, during the three months ended March 31, 2022, the Company assessed the fair value of its gross assets related to the joint ventures operating in Russia for potential impairment and recorded asset impairment charges of approximately $ 36.0 million, reflected as “Impairment charges” in its Consolidated Statements of Operations, with an offsetting benefit of approximately $ 12.2 million included within “Net loss (income) attributable to noncontrolling interests.” The Company sold its interest in its Russian distribution joint venture during the three months ended December 31, 2022.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

RECOVERABLE INDIRECT TAXES

The Company’s Brazilian operations incur value added taxes (“VAT”) on certain purchases of raw materials, components and services.

These taxes are accumulated as tax credits and create assets that are reduced by the VAT collected from the Company’s sales in the Brazilian market.

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

The Company had recorded approximately $ 93.5 million and $ 94.6 million, respectively, of VAT tax credits, net of reserves, as of December 31, 2023 and 2022.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company attempts to manage its transactional foreign exchange 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.

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

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

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

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

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

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

The Company designates interest rate contracts used to convert the interest rate exposure on a portion of the Company’s debt portfolio from a floating rate to a fixed rate as cash flow hedges, while those contracts converting the Company’s interest rate exposure from a fixed rate to a floating rate are designated as fair value hedges.

To protect the value of the Company’s investment in foreign operations against adverse changes in foreign currency exchange rates, the Company from time to time, may hedge a portion of the Company’s net investment in the foreign subsidiaries by using a cross currency swap or foreign currency denominated debt.

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

The Company is exposed to commodity risk from steel and other raw material purchases where a portion of the contractual purchase price is linked to a variable rate based on publicly available market data.

From time to time, the Company enters into cash flow hedges to mitigate its exposure to variability in commodity prices.

The Company’s senior management establishes the Company’s foreign currency and interest rate risk management policies.

These policies are reviewed periodically by the Finance Committee of the Company’s Board of Directors.

The policies allow for the use of derivative instruments to hedge exposures to movements in foreign currency and interest rates.

The Company’s policies prohibit the use of derivative instruments for speculative purposes.

All derivatives are recognized on the Company’s Consolidated Balance Sheets at fair value.

On the date the derivative contract is entered into, the Company designates the derivative as either (1) a cash flow hedge of a forecasted transaction, (2) a fair value hedge of a recognized liability, (3) a hedge of a net investment in a foreign operation, or (4) a non-designated derivative instrument.

The Company categorizes its derivative assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability.

See Note 21 for a discussion of the fair value hierarchy as per the guidance in ASC 820, “Fair Value Measurements”.

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

Counterparty Risk

The Company regularly monitors the counterparty risk and credit ratings of all the counterparties to the derivative instruments.

The Company believes that its exposures are appropriately diversified across counterparties and that these

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

counterparties are creditworthy financial institutions.

There have been no negative impacts to the Company from any non-performance of any counterparties.

Derivative Transactions Designated as Hedging Instruments

Cash Flow Hedges

Foreign Currency Contracts

The Company uses 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.

The changes in the fair values of these cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into “Cost of goods sold” during the period the sales and purchases are recognized.

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

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

The total notional value of derivatives that were designated as cash flow hedges was $ 262.2 million and $ 364.8 million as of December 31, 2023 and 2022.

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

Steel Commodity Contracts

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

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 2.5 million, $ 0.9 million and $ 31.9 million as of December 31, 2023, 2022 and 2021, respectively.

The following table summarizes the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during 2023, 2022 and 2021 (in millions):

Recognized in Net Income

Gain (Loss) Recognized in Accumulated

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

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

Foreign currency contracts (1)

$ ( 9.1 ) Cost of goods sold $ ( 8.9 ) $ 10,635.0

Commodity contracts (2)

0.2 Cost of goods sold ( 0.1 ) $ 10,635.0

Total $ ( 8.9 ) $ ( 9.0 )

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

Commodity contracts ( 3.5 ) Cost of goods sold ( 3.5 ) $ 9,650.1

Total $ ( 14.6 ) $ ( 14.1 )

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

Commodity contracts 12.5 Cost of goods sold 13.2 8,566.0

Total $ 5.1 $ 3.0

____________________________________

(1) The outstanding contracts as of December 31, 2023 range in maturity through December 2024.

(2) The outstanding contracts as of December 31, 2023 range in maturity through June 2024.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the years ended December 31, 2023, 2022 and 2021 (in millions):

Amount Income

Tax After-Tax

Accumulated derivative net losses as of December 31, 2020 $ ( 3.0 ) $ ( 0.5 ) $ ( 2.5 )

Net changes in fair value of derivatives 8.3 3.2 5.1

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

Accumulated derivative net losses as of December 31, 2021 $ ( 0.5 ) $ ( 0.1 ) $ ( 0.4 )

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

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

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

Net changes in fair value of derivatives ( 11.5 ) ( 2.6 ) ( 8.9 )

Net losses reclassified from accumulated other comprehensive loss into income 11.2 2.2 9.0

Accumulated derivative net losses as of December 31, 2023 (1)

$ ( 1.3 ) $ ( 0.5 ) $ ( 0.8 )

____________________________________

(1) As of December 31, 2023, approximately $ 1.4 million of derivative realized net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts associated with inventory that had not yet been sold.

Net Investment Hedges

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

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

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

To the extent foreign currency denominated debt is de-designated from a net investment hedge relationship, changes in the value of the foreign currency denominated debt are recorded in earnings through the maturity date.

In January 2018, the Company entered into a cross currency swap contract as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

The cross currency swap expired on January 19, 2021.

At maturity of the cross currency swap contract, the Company delivered the notional amount of approximately € 245.7 million (or approximately $ 297.1 million as of January 19, 2021) and received $ 300.0 million from the counterparties, resulting in a gain of approximately $ 2.9 million that was recognized in accumulated other comprehensive loss.

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

On January 29, 2021, the Company entered into a new cross currency swap contract as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

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

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 274.4 million as of December 31, 2023) and will receive $ 300.0 million from the counterparties.

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

During 2023, the Company designated € 150.0 million of its multi-currency revolving credit facility maturing in December 2027 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

This portion of the multi-currency revolving credit facility was repaid in December 2023.

The following table summarizes the notional values of the instrument designated as a net investment hedge (in millions):

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Notional Amount as of

December 31, 2023 December 31, 2022

Cross currency swap contract $ 300.0 $ 300.0

The following table summarizes the after-tax impact of changes in the fair value of the instruments designated as net investment hedges (in millions):

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

Foreign currency denominated debt:

Before-Tax Amount Income Tax After-Tax Amount

December 31, 2023 $ ( 4.2 ) $ ( 1.1 ) $ ( 3.1 )

December 31, 2022 — — —

December 31, 2021 — — —

Cross currency swap contract:

December 31, 2023 ( 12.7 ) ( 3.3 ) ( 9.4 )

December 31, 2022 20.5 5.3 15.2

December 31, 2021 11.0 3.2 7.8

Derivative Transactions Not Designated as Hedging Instruments

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

These contracts were classified as non-designated derivative instruments.

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

As of December 31, 2023 and 2022, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,125.1 million and $ 3,654.0 million, respectively.

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

Gain (Loss) Recognized in Net Income for the Years Ended

Classification of

Gain (Loss) December 31, 2023 December 31, 2022 December 31, 2021

Foreign currency contracts Other expense, net $ 29.9 $ ( 38.2 ) $ 54.8

The table below sets forth the fair value of derivative instruments as of December 31, 2023 (in millions):

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Asset Derivatives as of

December 31, 2023 Liability Derivatives as of

December 31, 2023

Balance Sheet

Location Fair

Value Balance Sheet

Location Fair

Derivative instruments designated as hedging instruments:

Foreign currency contracts Other current assets $ 1.3 Other current liabilities $ 1.2

Commodity contracts Other current assets — Other current liabilities —

Cross currency swap contract Other noncurrent assets 20.3 Other noncurrent liabilities —

Derivative instruments not designated as hedging instruments:

Foreign currency contracts (1)

Other current assets 17.1 Other current liabilities 12.8

Total derivative instruments $ 38.7 $ 14.0

____________________________________

(1) The outstanding contracts as of December 31, 2023 range in maturity through February 2024.

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

Asset Derivatives as of

December 31, 2022 Liability Derivatives as of

December 31, 2022

Balance Sheet

Location Fair

Value Balance Sheet

Location Fair

Derivative instruments designated as hedging instruments:

Foreign currency contracts Other current assets $ 1.3 Other current liabilities $ 1.3

Commodity contracts Other current assets — Other current liabilities —

Cross currency swap contract Other noncurrent assets 33.0 Other noncurrent liabilities —

Derivative instruments not designated as hedging instruments:

Foreign currency contracts Other current assets 6.6 Other current liabilities 39.1

Total derivative instruments $ 40.9 $ 40.4

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the years ended December 31, 2023, 2022 and 2021 (in millions):

Years Ended December 31,

2023 2022 2021

Cost of goods sold $ 1.8 $ 1.3 $ 1.0

Selling, general and administrative expenses 44.6 32.7 26.6

Total stock compensation expense $ 46.4 $ 34.0 $ 27.6

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

Stock Incentive Plan

Under the Company's 2006 Long-Term Incentive Plan ("the Plan"), up to 10,000,000 shares of AGCO’s common stock may be issued.

As of December 31, 2023, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,650,232 shares remained available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below.

The Plan allows the Company, under the direction of the Board of Directors’ Talent and

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Compensation Committee, to make grants of performance shares, stock appreciation rights, restricted stock units and restricted stock awards to employees, officers and non-employee directors of the Company.

Long-Term Incentive Plan and Related Performance Awards

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

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

The primary long-term incentive plan provides for participants to earn 16.5 % to 200 % of the target awards depending on the actual performance achieved, with no shares earned if performance is below the established minimum target.

Awards earned under the Plan are paid in shares of common stock at the end of each three-year performance period.

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

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

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

During 2023, the Company granted performance awards covering up to 289,742 shares, assuming the Company achieves maximum levels of performance related to varying performance periods.

Compensation expense recorded during 2023, 2022 and 2021 with respect to awards granted was based upon the fair value as of the grant date.

The award included a market condition and the Company measured the fair value using a Monte Carlo simulation.

The weighted average grant-date fair value of performance awards granted under the Plan during 2023, 2022 and 2021 was as follows:

Years Ended December 31,

2023 2022 2021

Weighted average grant-date fair value $ 143.63 $ 119.35 $ 123.33

Performance award transactions during 2023 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan:

Performance awards Weighted-Average Grant Date

Shares awarded but not earned at January 1 543,904 $ 120.94

Shares awarded 289,742 143.63

Shares forfeited ( 29,786 ) 127.77

Shares vested or earned ( 232,478 ) 123.28

Shares awarded but not earned at December 31 571,382 $ 131.14

Based on the level of performance achieved as of December 31, 2023, 210,269 shares were earned under the related performance period, including 9,080 shares vested as of December 31, 2022 related to certain retirees and other individuals.

133,569 shares were issued in February 2024, net of 76,700 shares that were withheld for taxes related to the earned awards.

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

As of December 31, 2023, the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $ 39.3 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

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

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

Restricted Stock Units ("RSUs")

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

RSU awards granted under Plan do not entitle recipients to vote or receive dividends during the vesting period and will be forfeited in the event of the recipient’s termination of employment, except for certain circumstances.

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

The weighted average grant-date fair value of the RSUs granted under the Plan during 2023, 2022 and 2021 was as follows:

Years Ended December 31,

2023 2022 2021

Weighted average grant-date fair value $ 134.63 $ 109.09 $ 113.91

During the year ended December 31, 2023, the Company granted 117,840 RSU awards.

These awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third per year over a three-year requisite service period.

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

RSU transactions during the year ended December 31, 2023 were as follows:

RSUs Weighted-Average

Shares awarded but not vested at January 1 213,198 $ 104.62

Shares awarded (1)

117,840 134.63

Shares forfeited ( 9,293 ) 120.39

Shares vested ( 107,798 ) 98.95

Shares awarded but not vested at December 31 213,947 $ 122.48

____________________________________

(1) RSUs shares awarded and shares vested include 5,017 shares related to the 25 % additional shares issued to certain executives based on a total margin improvement metric relative to the Company’s defined peer group that applied to grants made in 2020.

During January 2024, 51,239 RSUs shares were issued, net of 31,390 shares that were withheld for taxes.

As of December 31, 2023, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 15.7 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

On January 30, 2024, the Company granted 170,735 performance award shares (subject to the Company achieving future target levels of performance) and 123,520 RSUs under the Plan.

The 2024 grant of performance award shares is subject to a total shareholder return modifier.

Stock-settled Appreciation Rights ("SSARs")

Certain executives and key managers received grants of SSARs prior to December 31, 2020.

The Company did not subsequently grant any SSARs since the year ended December 31, 2020.

The Company recorded stock compensation expense of approximately $ 0.2 million, $ 0.5 million and $ 0.8 million associated with SSAR awards during 2023, 2022 and 2021, respectively.

The compensation expense associated with these awards is being amortized ratably over the vesting period.

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

The total fair value of SSARs vested during 2023 was approximately $ 0.4 million.

There were 16,900 SSARs that were not vested and 56,350 SSARs outstanding as of December 31, 2023.

The total intrinsic value of outstanding and

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

exercisable SSARs as of December 31, 2023 was $ 2.9 million and $ 2.1 million, respectively.

The total intrinsic value of SSARs exercised during 2023 was approximately $ 4.9 million.

Excess Tax Benefit

The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs, vesting of RSU awards and vesting of performance awards under the Plan was approximately $ 0.5 million for the year ended December 31, 2023.

The Company realized an insignificant tax benefit from the exercise of SSARs, vesting of performance awards and vesting of RSU awards in certain foreign jurisdictions during the years ended December 31, 2023, 2022 and 2021.

Director Restricted Stock Grants

Pursuant to the Plan, all non-employee directors receive annual restricted stock grants of the Company’s common stock.

All restricted stock grants made to the Company’s directors are restricted as to transferability for a period of one year .

In the event a director departs from the Company’s Board of Directors, the non-transferability period expires immediately.

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

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

The Company recorded stock compensation expense of approximately $ 1.5 million during 2023 associated with these grants.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

STOCKHOLDERS' EQUITY

At December 31, 2023, the Company had 150,000,000 authorized shares of common stock with a par value of $ 0.01 per share, with approximately 74,517,973 shares of common stock outstanding and approximately 3,650,232 shares reserved for issuance under the Company’s Plan (See Note 15).

Share Repurchase Program

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 its common stock.

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

In January 2024, the Company received an additional 82,883 shares upon final settlement of its November 2023 ASR agreement.

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

The Company received approximately 952,204 shares associated with these transactions as of December 31, 2021.

In January 2022, the Company received an additional 113,824 shares upon final settlement of its November 2021 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 our Consolidated Balance Sheets.

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.

The Company’s Board of Directors has declared and the Company has paid cash dividends per common share during the following years:

Dividends declared and paid per common share

$ 6.10 $ 5.40 $ 4.74

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.

__ __________________________________

(1) On April 27, 2023, the Company’s Board of Directors approved a quarterly dividend of $ 0.29 per common share outstanding commencing in the second quarter of 2023.

The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.29 per common share beginning in the second quarter of 2023, from $ 0.24 per common share in the first quarter of 2023.

In addition, the Company's Board of Directors also declared and the Company paid a special variable dividend of $ 5.00 per common share during 2023 totaling approximately $ 374.4 million.

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

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

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accumulated Other Comprehensive Loss

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the years ended December 31, 2023 and 2022 (in millions):

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

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

Other comprehensive loss before reclassifications

( 7.2 ) ( 30.9 ) ( 14.6 ) ( 52.7 )

Net losses reclassified from accumulated other comprehensive loss

6.4 — 14.1 20.5

Other comprehensive loss, net of reclassification adjustments

( 0.8 ) ( 30.9 ) ( 0.5 ) ( 32.2 )

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

Other comprehensive (loss) income before reclassifications

( 15.7 ) 102.3 ( 8.9 ) 77.7

Net losses reclassified from accumulated other comprehensive loss 8.3 — 9.0 17.3

Other comprehensive (loss) income, net of reclassification adjustments

( 7.4 ) 102.3 0.1 95.0

Accumulated other comprehensive loss, December 31, 2023 $ ( 238.6 ) $ ( 1,468.7 ) $ ( 0.8 ) $ ( 1,708.1 )

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the years ended December 31, 2023 and 2022 (in millions):

Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Consolidated

Statements of Operations

Year ended December 31, 2023 (1)

Year ended December 31, 2022 (1)

Net losses on foreign currency contracts $ 11.1 $ 14.5 Cost of goods sold

Net losses on commodity contracts

0.1 4.7 Cost of goods sold

Reclassification before tax 11.2 19.2

( 2.2 ) ( 5.1 ) Income tax provision

Reclassification net of tax $ 9.0 $ 14.1

Defined benefit pension plans:

Amortization of net actuarial losses $ 9.4 $ 8.7 Other expense, net (2)

Amortization of prior service cost 1.7 0.2 Other expense, net (2)

Reclassification before tax 11.1 8.9

( 2.8 ) ( 2.5 ) Income tax provision

Reclassification net of tax $ 8.3 $ 6.4

Net losses reclassified from accumulated other comprehensive loss $ 17.3 $ 20.5

____________________________________

(1) Losses included within the Consolidated Statements of Operations for the years ended December 31, 2023 and 2022, respectively.

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

See Note 20 to the Company’s Consolidated Financial Statements.

NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each period.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the years ended December 31, 2023, 2022 and 2021 is as follows (in millions, except per share data):

2023 2022 2021

Basic net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 1,171.4 $ 889.6 $ 897.0

Weighted average number of common shares outstanding 74.8 74.6 75.2

Basic net income per share attributable to AGCO Corporation and subsidiaries $ 15.66 $ 11.92 $ 11.93

Diluted net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 1,171.4 $ 889.6 $ 897.0

Weighted average number of common shares outstanding 74.8 74.6 75.2

Dilutive SSARs, performance share awards and RSUs

Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share

74.9 74.9 75.7

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 15.63 $ 11.87 $ 11.85

RELATED PARTY TRANSACTIONS

Rabobank, a financial institution based in the Netherlands, is a 51 % owner in the Company’s finance joint ventures, which are located in the United States, Canada, Europe, Brazil, Argentina and Australia.

Rabobank is also the principal agent and participant in the Company’s revolving credit facility (see Note 11).

The majority of the assets of the Company’s finance joint ventures represents finance receivables.

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

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

During 2023, the Company made a total of approximately $ 24.6 million of additional investments in its finance joint venture in Brazil.

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

During 2023, 2022, and 2021, the Company received approximately $ 28.9 million, $ 27.0 million and $ 84.4 million, respectively, of dividends from certain of its finance joint ventures.

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

The terms of the financing arrangements offered to the Company’s dealers are similar to arrangements the finance joint ventures provide to unaffiliated third parties.

In addition, the Company transfers, on an ongoing basis, a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures (see Note 4).

The Company maintains a remarketing agreement with its U.S.

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

and Canada upon the expiration of certain eligible operating leases and also has guarantees with its other finance joint ventures (see Note 22).

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

The cost of those programs is recognized at the time of sale to the Company’s dealers (see Note 1).

The Company has a minority equity interest in Tractors and Farm Equipment Limited (“TAFE”), which manufactures and sells Massey Ferguson-branded equipment primarily in India, and also supplies tractors and components to the Company for sale in other markets.

Mallika Srinivasan, who is the Chairman and Managing Director of TAFE, is currently a member of the Company’s Board of Directors.

As of December 31, 2023, TAFE beneficially owned 12,150,152 shares of the Company’s common stock, not including shares of the Company’s common stock received by Ms.

Srinivasan for service as a director.

The Company and TAFE are parties to an agreement pursuant to which, among other things, TAFE has agreed not to purchase in excess of 12,150,152 shares of the Company’s common stock, subject to certain adjustments, and the Company has agreed to annually nominate a TAFE representative to its Board of Directors.

During 2023, 2022 and 2021, the Company purchased approximately $ 171.6 million, $ 148.7 million and $ 137.6 million, respectively, of tractors and components from TAFE.

During 2023, 2022 and 2021, the Company sold approximately $ 3.6 million, $ 1.2 million and $ 1.4 million, respectively, of parts to TAFE.

The Company received dividends from TAFE of approximately $ 2.9 million, $ 2.1 million and $ 2.0 million during 2023, 2022 and 2021, respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The sources of income before income taxes and equity in net earnings of affiliates were as follows for the years ended December 31, 2023, 2022 and 2021 (in millions):

12 unchanged sentences

$ 230.4 $ 296.6 $ 108.4

The Company’s income tax provision as of December 31, 2021 includes the benefit of the reversals of approximately $ 67.8 million and $ 55.6 million related to valuation allowances previously established against the Company’s net deferred tax assets in the United States and Brazil, respectively.

The Company recorded the reversal of a portion of the United States valuation allowance during the three months ended June 30, 2021, and the reversal of a portion of its Brazilian valuation allowance during the three months ended December 31, 2021.

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

The Company's income tax provision as of December 31, 2023 includes a 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.

The provision also includes a charge of approximately $ 26.4 million associated with our enrollment in a Brazilian tax amnesty program, "Litigation Zero", discussed further below.

A reconciliation of income taxes computed at the United States federal statutory income tax rate (21% for 2023, 2022 and 2021) to the provision for income taxes reflected in the Company’s Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 is as follows (in millions):

5 unchanged sentences

Taxes on foreign income which differ from the United States statutory rate (1)

( 193.9 ) 43.6 16.2

Tax effect of permanent differences ( 20.5 ) ( 0.2 ) ( 6.4 )

Change in valuation allowance (1)

116.5 0.7 ( 130.8 )

Change in tax contingency reserves 33.2 25.5 36.6

Research and development tax credits ( 9.6 ) ( 6.9 ) ( 7.4 )

Brazil Amnesty Program, net of United States foreign tax credit

Other 1.3 4.3 ( 0.3 )

1 unchanged sentence

____________________________________

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

(1) In 2023, a gross deferred tax asset of $ 197.7 million less a valuation allowance of $ 85.4 million was recognized to reflect future Swiss tax incentives the Company anticipates it will be able to utilize by 2034 when the incentive expires.

AGCO CORPORATION

9 unchanged sentences

Foreign tax credits 33.4 4.7

Swiss tax basis adjustment

Other 22.7 15.6

17 unchanged sentences

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the valuation allowance during the years ended December 31, 2023, 2022 and 2021 are summarized as follows (in millions):

Description Balance at

of Period Acquired

Businesses Charged (Credited) to

Deductions (2)

Translation Balance at

End of Period

Year ended December 31, 2023

Deferred tax valuation allowance $ 47.3 $ — $ 116.5 $ ( 16.7 ) $ 2.7 $ 149.8

Year ended December 31, 2022

Deferred tax valuation allowance $ 47.4 $ — $ 0.7 $ — $ ( 0.8 ) $ 47.3

Year ended December 31, 2021

Deferred tax valuation allowance $ 181.0 $ 0.4 $ ( 130.8 ) $ — $ ( 3.2 ) $ 47.4

(1) The amounts recorded to expense in 2023 are primarily related to Switzerland and the U.S.

There were no amounts credited or charged through other comprehensive income during 2023, 2022 and 2021.

(2) The deductions are primarily related to reversal of valuation allowance from the effective utilization of certain tax losses in the Brazil amnesty program during 2023.

The Company had net operating loss carryforwards of $ 133.9 million as of December 31, 2023, with expiration dates as follows:

8 unchanged sentences

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

At December 31, 2022 and 2021, the Company had

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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.

The Company accrued approximately $ 0.3 million and $ 6.0 million of interest and penalties related to unrecognized tax benefits in its provision for income taxes during 2023 and 2022, respectively.

10 unchanged sentences

Gross unrecognized income tax benefits at the end of the year $ 351.2 $ 281.7

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At December 31, 2023 and 2022, the Company had $ 351.2 million and $ 281.7 million, respectively, of unrecognized income tax benefits, which would affect the Company’s effective tax rate if recognized.

2 unchanged sentences

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

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

In addition, the gross unrecognized income tax benefits as of December 31, 2023 and 2022 exclude certain deposits made in a foreign jurisdiction of approximately $ 26.9 million, net of $ 19.7 million refunds received, and $ 45.1 million, respectively, associated with an ongoing audit.

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

6 unchanged sentences

In the Company’s significant foreign jurisdictions, primarily the United Kingdom, France, Germany, Switzerland, Finland and Brazil, the 2019 through 2023 tax years generally remain subject to examination by their respective tax authorities.

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

In 2022, the U.S.

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

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

December 31, 2022 December 31, 2021

Credit facility, expires 2027 200.0 —

1.002 % Senior term loan due 2025

Senior term loans due between 2023 and 2028 341.6 445.9

0.800 % Senior Notes Due 2028

Other long-term debt 5.1 7.7

Debt issuance costs ( 3.6 ) ( 4.8 )

1,451.9 1,413.3

Senior term loans due 2023, net of debt issuance costs ( 184.9 ) —

Current portion of other long-term debt ( 2.2 ) ( 2.1 )

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

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

Thereafter 671.4

Cash payments for interest were approximately $ 45.1 million, $ 23.8 million and $ 23.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Current Indebtedness

Credit Facility

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

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

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

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

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

Dollars, Euros or other currencies to be agreed upon.

The credit facility matures on December 19, 2027.

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

Uncommitted Credit Facility

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

The credit facility expires on December 31, 2026.

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

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

0.800 % Senior Notes Due 2028

On October 6, 2021, the Company 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.

1.002 % Senior Term Loan Due 2025

On January 25, 2019, the Company 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.

The Company is permitted to prepay the term loan before its maturity date.

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

Senior Term Loans Due Between 2023 and 2028

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

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

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

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

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

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

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

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

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

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

Former Indebtedness

Short-term Credit Facility

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

The Company borrowed $ 240.0 million in U.S.

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

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

dollars or EURIBOR for borrowings denominated in Euros plus a margin of 0.75 %, or (2) the base rate, which is equal to the higher of (i) the administrative agent’s base lending rate for the applicable currency, (ii) the federal funds rate plus 0.5 %, or (iii) one-month Adjusted Term SOFR plus 1.0 %, plus a margin of 0.75 %.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

making of certain payments, including dividends.

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

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

Credit Facility Due 2023

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

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

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

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

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

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

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

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

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

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

The term loans matured on April 8, 2022.

Senior Term Loan Due 2022

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

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

Interest was payable on the term loan quarterly in arrears at an annual rate, equal to the EURIBOR plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating.

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

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

Short-Term Borrowings

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

Standby Letters of Credit and Similar Instruments

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

Employee Benefit Plans

In 2008 and 2012, as part of routine audits, the Brazilian taxing authorities disallowed deductions relating to the amortization of certain goodwill recognized in connection with a reorganization of the Company’s Brazilian operations and the related transfer of certain assets to the Company’s Brazilian subsidiaries.

The amount of the tax disallowance through December 31, 2023, not including interest and penalties, would have been approximately 131.5 million Brazilian reais (or approximately $ 27.1 million).

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

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

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

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

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

Enrollment in the amnesty program would not be considered an admission of guilt with respect to outstanding cases.

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

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

The Company recorded approximately 182.6 million Brazilian reais (or approximately $ 34.8 million) within “Income tax provision” for the year ended December 31, 2023, net of associated U.S.

income tax credits of approximately $ 8.4 million related to its enrollment in the program.

The Company paid installment payments related to the program of 188.5 million Brazilian reais (or approximately $ 37.8 million) during the year ended December 31, 2023, inclusive of $ 1.2 million of interest on payments and approximately $ 1.8 million of foreign currency translation impacts.

The final installment payment was made in October 2023.

PENSION AND POSTRETIREMENT BENEFIT PLANS

The Company sponsors defined benefit pension plans covering certain employees, principally in the United Kingdom, the United States, Germany, Switzerland, Finland, France, Norway and Argentina.

17 unchanged sentences

___________________________________

(1) During 2021, the Company amended its Executive Nonqualified Pension Plan (“ENPP”) to freeze the plan as of December 31, 2024 to future salary benefit accruals, and to eliminate a lifetime annuity feature for participants reaching age 65 subsequent to December 31, 2022.

(1) During 2021, the Company amended its Executive Nonqualified Pension Plan (“ENPP”) to freeze the plan as of December 31, 2024 to future benefit accruals, and to eliminate a lifetime annuity feature for participants working to age 65 subsequent to December 31, 2022.

This amendment resulted in a curtailment gain as well as a net prior service credit.

13 unchanged sentences

(1) Applicable for U.S.

funded, qualified plans.

funded, qualified plan.

(2) Applicable for U.S.

unfunded, nonqualified plan.

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

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

Net annual postretirement benefit costs, and the weighted average discount rate used to determine them, for the years ended December 31, 2023, 2022 and 2021 are set forth below (in millions, except percentages):

17 unchanged sentences

Amendments 0.1 25.5 — —

Curtailment — ( 9.7 ) — —

Settlements ( 4.9 ) ( 5.0 ) — —

13 unchanged sentences

Funded status $ ( 75.0 ) $ ( 82.9 ) $ ( 23.0 ) $ ( 21.2 )

Unrecognized net actuarial losses (gains) 270.0 291.7 ( 2.0 ) ( 1.1 )

Unrecognized prior service cost 32.5 7.1 3.1 3.2

Accumulated other comprehensive loss ( 302.5 ) ( 298.8 ) ( 1.1 ) ( 2.1 )

Net amount recognized $ ( 82.9 ) $ ( 89.2 ) $ ( 21.2 ) $ ( 22.6 )

Amounts recognized in Consolidated

11 unchanged sentences

Accumulated other comprehensive loss as of December 31, 2021 $ ( 302.4 ) $ ( 72.0 ) $ ( 230.4 )

Prior service credit arising during the year 13.1 3.1 10.0

Net loss recognized due to settlement 0.1 — 0.1

Net loss recognized due to curtailment 8.5 2.2 6.3

Net actuarial gain arising during the year 71.0 17.4 53.6

Prior service (cost) credit arising during the year

( 25.5 ) ( 6.4 ) ( 19.1 )

Net (gain) loss recognized due to settlement

( 0.4 ) — ( 0.4 )

Net actuarial gain (loss) arising during the year

15.0 2.7 12.3

Amortization of prior service cost 0.2 0.2 —

1 unchanged sentence

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

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

Prior service (cost) credit arising during the year

Net (gain) loss recognized due to settlement

Net actuarial gain arising during the year 15.0 2.7 12.3

Net actuarial gain (loss) arising during the year

( 21.5 ) ( 5.4 ) ( 16.1 )

Amortization of prior service cost 1.7 0.4 1.3

3 unchanged sentences

Unrecognized net actuarial losses $ 280.2 $ 270.0

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 is primarily due to liability losses due to the total net impact of the changes in the assumptions, specifically the reduction in the discount rates, as well as the losses due to plan experience 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.

9 unchanged sentences

Unrecognized prior service cost $ 31.4 $ 32.5

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

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

The unrecognized prior service cost as of December 31, 2022 included

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

a revision of approximately $ 25.5 million due to the Company updating its estimate of current assumptions, interpretations and approach affecting the Company’s defined benefit pension obligations related to certain defined benefit plans.

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

3 unchanged sentences

___________________________________

(1) Includes a gain of approximately $ 1.1 million and a loss of $ 0.2 million, respectively, related to the Company’s U.S.

(1) Includes a gain of approximately $ 1.2 million and $ 1.1 million, respectively, related to the Company’s U.S.

postretirement benefit plans.

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

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

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

and Brazilian postretirement benefit plans is primarily resulting from lower discount rates at December 31, 2023.

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

15 unchanged sentences

plan’s fair value of plan assets was in excess of the plan’s accumulated benefit obligation as of December 31, 2023 and 2022.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s accumulated comprehensive loss as of December 31, 2022 and 2021 reflects a reduction in equity related to the following items (in millions):

Reduction in equity, net of taxes of $ 72.9 and $ 71.5 at December 31, 2022 and 2021, respectively

$ 303.6 $ 300.9

GIMA joint venture:

Reduction in equity, net of taxes of $ 0.3 and $ 0.5 at December 31, 2022 and 2021, respectively

______________________________________

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

pension plan, excluding the GIMA joint venture.

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

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

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

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

In the event that any of these assumptions or the administration approach are proven to be

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

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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, the Company changed the discount rate methodology to align more closely with the expected termination liability of the Plan.

The discount rate was derived using a "yield curve approach" consistent with the approach for the United Kingdom and Euro Zone 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.

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

pension plan’s service

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

cost and interest cost.

pension plan’s service cost and interest cost.

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

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pension plan.

The Company currently estimates its benefit payments for 2023 to its U.S.-based postretirement health care and life insurance benefit plans will aggregate approximately $ 1.6 million and its benefit payments for 2023 to its Brazilian postretirement health care benefit plans will aggregate less than $ 0.1 million.

The Company currently estimates its benefit payments for 2024 to its U.S.-based postretirement health

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

care and life insurance benefit plans will aggregate approximately $ 1.6 million and its benefit payments for 2024 to its Brazilian postretirement health care benefit plans will aggregate less than $ 0.1 million.

During 2023, approximately $ 51.0 million of benefit payments were made related to the Company’s defined benefit pension plans and ENPP.

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Total 100 % 100 %

The weighted average asset allocation of the Company’s non-U.S.

The weighted average asset allocation of the Company’s U.K.

pension benefit plans as of December 31, 2023 and 2022 are as follows:

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Global equities $ 55.8 $ 55.8 $ —

large cap equities 2.9 2.9 — —

Total equity securities 55.8 — 55.8 —

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2 % are in high-yield securities.

and 1 % are in other various fixed income securities.

(2) 53 % of “alternative investments” are in relative value funds;

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14 % are in investment-grade corporate bonds;

8 % are in high-yield securities;

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

7 % are in high-yield securities and 1 % are in other various fixed income securities.

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

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

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

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

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Alternative investments 3.0 % 5.0 %

Cash and cash equivalents 5.0 % — %

Total 100.0 % 100.0 %

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In arriving at the choice of an expected return assumption of 5.75 % for its U.S.

plans for the year ended December 31, 2023, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans.

plans for the year ending December 31, 2024, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans.

The Company has noted that over very long periods, this mix of investments would achieve an average return on its non-U.S.

based pension plans of approximately 7.10 %.

In arriving at the choice of an expected return assumption of 5.75 % for its U.K.-based plans for the year ended December 31, 2023, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans.

In arriving at the choice of an expected return assumption of 5.75 % for its U.K.-based plans for the year ending December 31, 2024, the Company has tempered this historical indicator with lower expectations for returns and changes to investments in the future as well as the administrative costs of the plans.

Equity securities primarily include investments in large-cap and small-cap companies located across the globe.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Stockholders’ Equity

At December 31, 2022, the Company had 150,000,000 authorized shares of common stock with a par value of $ 0.01 per share, with approximately 74,600,815 shares of common stock outstanding and approximately 3,780,349 shares reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “Plan”) (See Note 10).

Share Repurchase Program

The Company received approximately 952,204 shares associated with these transactions as of December 31, 2021.

On January 19, 2022, the Company received additional 113,824 shares upon final settlement of its November 2021 ASR agreement.

In February and March 2020, the Company entered into two ASR agreements with financial institutions to repurchase an aggregate of $ 55.0 million of shares of its common stock.

The Company received approximately 970,141 shares in these transactions as of December 31, 2020.

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

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

The Company’s Board of Directors has declared and the Company has paid cash dividends per common share during the following years:

Dividends declared and paid per common share

$ 5.40 $ 4.74 $ 0.63

____________________________________

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

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

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accumulated Other Comprehensive Loss

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

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

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

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

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

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

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

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

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

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Consolidated

Statements of Operations

Year ended December 31, 2022 (1)

Year ended December 31, 2021 (1)

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

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

Reclassification before tax 19.2 ( 5.8 )

( 5.1 ) 2.8 Income tax provision

Reclassification net of tax $ 14.1 $ ( 3.0 )

Defined benefit pension plans:

Amortization of net actuarial losses $ 8.7 $ 16.6 Other expense, net (2)

Amortization of prior service cost 0.2 0.8 Other expense, net (2)

Reclassification before tax 8.9 17.4

( 2.5 ) ( 4.5 ) Income tax provision

Reclassification net of tax $ 6.4 $ 12.9

Net losses reclassified from accumulated other comprehensive loss $ 20.5 $ 9.9

____________________________________

(1) Losses (gains) included within the Consolidated Statements of Operations for the years ended December 31, 2022 and 2021, respectively.

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

See Note 8 to the Company’s Consolidated Financial Statements.

Stock Incentive Plan

Under the Plan, up to 10,000,000 shares of AGCO’s common stock may be issued.

As of December 31, 2022, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,780,349 shares remained available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below.

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

Long-Term Incentive Plan and Related Performance Awards

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

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

Awards earned under the Plan are paid in shares of common stock at the end of each three-year performance period.

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

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

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

Years Ended December 31,

2022 2021 2020

Weighted average grant-date fair value $ 119.35 $ 123.33 $ 70.84

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

Performance awards Weighted-Average Grant Date

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

Shares awarded 320,120 119.35

Shares forfeited ( 34,324 ) 108.99

Shares vested or earned ( 256,606 ) 73.96

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

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

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

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

As of December 31, 2022, the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $ 30.9 million, and the weighted average period over which it is expected to be recognized is approximately two years .

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

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

Restricted Stock Units

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

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

Years Ended December 31,

2022 2021 2020

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

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the year ended December 31, 2022, the Company granted 133,546 RSU awards.

These awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third per year over a three-year requisite service period.

The 2020 grant of RSUs to certain executives has a three-year cliff vesting requirement subject to adjustment based on a margin improvement metric relative to the Company’s defined peer group.

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

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

RSUs Weighted-Average

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

Shares awarded 133,546 109.09

Shares forfeited ( 9,320 ) 107.53

Shares vested ( 70,256 ) 86.71

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

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

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

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

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

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

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

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

Stock-settled Appreciation Rights

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

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

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

The compensation expense associated with these awards is being amortized ratably over the vesting period.

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

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

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

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

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

Excess Tax Benefit

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ended December 31, 2020.

Director Restricted Stock Grants

Pursuant to the Plan, all non-employee directors receive annual restricted stock grants of the Company’s common stock.

All restricted stock grants made to the Company’s directors are restricted as to transferability for a period of one year .

In the event a director departs from the Company’s Board of Directors, the non-transferability period expires immediately.

The 2022 grant was made on April 28, 2022 and equated to 11,664 shares of common stock, of which 10,301 shares of common stock were issued, after shares were withheld for taxes.

The Company recorded stock compensation expense of approximately $ 1.5 million during 2022 associated with these grants.

Derivative Instruments and Hedging Activities