AGCO CORP /DE 10-K

Item 8. Financial Statements and Supplementary Data The following Consolidated Financial Statements of AGCO Corporation for each of the years in the three-year period ended December 31, 2024 are included in this Item: Page Report of Independent Registered Public Accounting Firm (Firm ID: 185 ) 46 Consolidated Statements of Operations for the years ended December 31, 202 4 , 202 3 and 20 2 2 49 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202 4 , 202 3 and 20 2 2 50 Consolidated Balance Sheets as of December 31, 202 4 and 20 23 51 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 4 , 202 3 and 20 2 2 52 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 20 2 2 53 Notes to Consolidated Financial Statements 54 45 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors AGCO Corporation: 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, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, 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, 2024, 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 24, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Assessment of the reserve and allowance for volume discount and sales incentive programs in certain geographic regions As discussed in Note 1 to the consolidated financial statements, the Company provides various volume discount and sales incentive programs with respect to its products. As of December 31, 2024, the Company had accrued volume discounts and sales incentives of approximately $961.1 million and an allowance for sales incentive discounts of approximately $57.8 million. Sales incentive programs include reductions in invoice prices, reductions in retail financial rates, dealer commissions and dealer incentive allowances. Volume discounts and sales incentives are recorded at the time of sale as a reduction of revenue using the expected value method. We identified the assessment of the reserve and allowance for volume discount and sales incentive programs in certain geographic regions as a critical audit matter. Auditor judgment was required to evaluate certain assumptions which had a higher degree of measurement uncertainty. Significant assumptions included estimated incentive rates, which were the 46 Table of Contents estimated rates at which programs were applied to eligible products, and estimated achievement by dealers of specified cumulative targeted purchase levels. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s reserve and allowance for volume discount and sales incentive process, including controls related to the development of the significant assumptions. For certain volume discount and sales incentive programs, we compared the program details to dealer communications and the significant assumptions to historical results for similar programs. We assessed the Company’s historical ability to estimate significant assumptions by comparing the prior year estimated amounts to actual discounts and sales incentives realized by the customers. We evaluated the significant assumptions by comparing them to actual results, including the results of transactions occurring after year-end. Assessment of gross unrecognized income tax benefits in certain jurisdictions As discussed in Note 19 to the consolidated financial statements, the Company has recorded a liability for gross unrecognized income tax benefits of approximately $387.4 million as of December 31, 2024. The Company recognizes income tax benefits from uncertain tax positions only when there is a more than 50% likelihood that the tax positions will be sustained upon examination by the taxing authorities based on the technical merits of the positions. We identified the assessment of gross unrecognized income tax benefits in certain jurisdictions as a critical audit matter. Complex auditor judgment and specialized skills were required in evaluating the Company’s interpretation and application of tax laws and the estimate of the amount of tax benefits expected to be realized. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s gross unrecognized income tax benefit process. This included controls related to the Company’s consideration of information that could affect the recognition or measurement of income tax benefits from uncertain tax positions and the interpretation and application of tax laws. We involved tax professionals with specialized skills and knowledge, who assisted in: • inspecting correspondence and assessments from the taxing authorities • evaluating the Company’s interpretation and application of tax laws • developing an expectation of the Company’s tax positions and comparing the results to the Company’s assessment Assessment of goodwill impairment for a certain reporting unit As discussed in Note 1 to the consolidated financial statements, the Company evaluates goodwill for impairment annually as of October 1 and when events or circumstances indicate that fair value of a reporting unit may be below its carrying value. As of December 31, 2024, the Company has $1,820.4 million of goodwill. The Company performs its goodwill impairment analyses using either a qualitative or a quantitative assessment. 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 less than the carrying value and therefore recorded a goodwill impairment of $351.0 million for this reporting unit. We identified the assessment of the Company's goodwill impairment testing for a certain reporting unit as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the fair value of the reporting unit. Certain significant assumptions used to determine fair value of the reporting unit, including forecasted revenue growth and discount rate assumptions, had limited observable market information. The determined fair value was sensitive to changes in these significant assumptions. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment process, including controls over the significant assumptions. We compared the Company’s forecasted revenue growth assumptions used in the valuation model against underlying business strategies, growth plans, and industry data. We compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to forecast. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s discount rate by comparing it to a range of discount rates independently developed using publicly available market data of guideline companies 47 Table of Contents • performing sensitivity analyses over the forecasted revenue growth assumptions to assess the impact of changes 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 /s/ KPMG LLP We have served as the Company’s auditor since 2002. Atlanta, Georgia February 24, 2025 48 Table of Contents AGCO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Years Ended December 31, 2024 2023 2022 Net sales $ 11,661.9 $ 14,412.4 $ 12,651.4 Cost of goods sold 8,762.8 10,635.0 9,650.1 Gross profit 2,899.1 3,777.4 3,001.3 Operating expenses: Selling, general and administrative expenses 1,397.7 1,454.5 1,189.5 Engineering expenses 493.0 548.8 444.2 Amortization of intangibles 81.0 57.7 60.1 Impairment charges 369.5 4.1 36.0 Restructuring and business optimization expenses 172.7 11.9 6.1 Loss on sale of business 507.3 — — Income (loss) from operations ( 122.1 ) 1,700.4 1,265.4 Interest expense, net 93.0 4.6 13.0 Other expense, net 218.5 362.3 145.2 Income (loss) before income taxes and equity in net earnings of affiliates ( 433.6 ) 1,333.5 1,107.2 Income tax provision 98.4 230.4 296.6 Income (loss) before equity in net earnings of affiliates ( 532.0 ) 1,103.1 810.6 Equity in net earnings of affiliates 46.4 68.2 64.1 Net income (loss) ( 485.6 ) 1,171.3 874.7 Net loss attributable to noncontrolling interests 60.8 0.1 14.9 Net income (loss) attributable to AGCO Corporation $ ( 424.8 ) $ 1,171.4 $ 889.6 Net income (loss) per common share attributable to AGCO Corporation: Basic $ ( 5.69 ) $ 15.66 $ 11.92 Diluted $ ( 5.69 ) $ 15.63 $ 11.87 Cash dividends declared and paid per common share $ 3.66 $ 6.10 $ 5.40 Weighted average number of common and common equivalent shares outstanding: Basic 74.6 74.8 74.6 Diluted 74.7 74.9 74.9 See accompanying notes to Consolidated Financial Statements. 49 Table of Contents AGCO CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) Years Ended December 31, 2024 2023 2022 Net income (loss) $ ( 485.6 ) $ 1,171.3 $ 874.7 Other comprehensive income (loss): Defined pension and postretirement benefit plans, net of tax: Prior service cost arising during the year ( 0.9 ) — ( 19.1 ) Net loss (gain) recognized due to settlement 14.0 0.4 ( 0.4 ) Net actuarial (loss) gain arising during the year ( 2.2 ) ( 16.1 ) 12.3 Amortization of prior service cost 1.1 1.3 — Amortization of net actuarial losses 7.8 7.0 6.4 Deferred gains and losses on derivatives, net of tax: Net changes in fair value of derivatives 3.4 ( 8.9 ) ( 14.6 ) Net losses reclassified from accumulated other comprehensive loss into income 6.3 9.0 14.1 Foreign currency translation adjustments ( 226.6 ) 102.3 ( 30.0 ) Other comprehensive income (loss) ( 197.1 ) 95.0 ( 31.3 ) Comprehensive income (loss) ( 682.7 ) 1,266.3 843.4 Comprehensive loss attributable to noncontrolling interests 63.1 0.1 14.0 Comprehensive income (loss) attributable to AGCO Corporation $ ( 619.6 ) $ 1,266.4 $ 857.4 See accompanying notes to Consolidated Financial Statements. 50 Table of Contents AGCO CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share amounts) December 31, 2024 December 31, 2023 ASSETS Current Assets: Cash and cash equivalents $ 612.7 $ 595.5 Accounts and notes receivable, net 1,267.4 1,605.3 Inventories, net 2,731.3 3,440.7 Other current assets 526.6 699.3 Total current assets 5,138.0 6,340.8 Property, plant and equipment, net 1,818.6 1,920.9 Right-of-use lease assets 168.9 176.2 Investments in affiliates 519.6 512.7 Deferred tax assets 561.0 481.6 Other assets 435.2 346.8 Intangible assets, net 728.9 308.8 Goodwill 1,820.4 1,333.4 Total assets $ 11,190.6 $ 11,421.2 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY Current Liabilities: Borrowings due within one year $ 415.2 $ 15.0 Accounts payable 813.0 1,207.3 Accrued expenses 2,469.6 2,903.8 Other current liabilities 128.2 217.5 Total current liabilities 3,826.0 4,343.6 Long-term debt, less current portion and debt issuance costs 2,233.3 1,377.2 Operating lease liabilities 127.5 134.4 Pension and postretirement health care benefits 155.6 170.5 Deferred tax liabilities 125.0 122.6 Other noncurrent liabilities 680.3 616.1 Total liabilities 7,147.7 6,764.4 Commitments and contingencies (Note 22) Redeemable noncontrolling interests 300.1 — Stockholders’ Equity: AGCO Corporation stockholders’ equity: Preferred stock; $ 0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding in 2024 and 2023 — — Common stock; $ 0.01 par value, 150,000,000 shares authorized, 74,420,952 and 74,517,973 shares issued and outstanding at December 31, 2024 and 2023, respectively 0.7 0.7 Additional paid-in capital — 4.1 Retained earnings 5,645.0 6,360.0 Accumulated other comprehensive loss ( 1,902.9 ) ( 1,708.1 ) Total AGCO Corporation stockholders’ equity 3,742.8 4,656.7 Noncontrolling interests — 0.1 Total stockholders’ equity 3,742.8 4,656.8 Total liabilities, noncontrolling redeemable interests and stockholders’ equity $ 11,190.6 $ 11,421.2 See accompanying notes to Consolidated Financial Statements. 51 Table of Contents AGCO CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions, except share amounts) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interests Total Stockholders’ Equity Redeemable Noncontrolling Interests Shares Amount Balance, December 31, 2021 $ — 74,441,312 $ 0.7 $ 3.9 $ 5,182.2 $ ( 1,770.9 ) $ 27.9 $ 3,443.8 Net income (loss) — — — — 889.6 — ( 14.9 ) 874.7 Payment of dividends to stockholders — — — — ( 404.3 ) — — ( 404.3 ) Issuance of non-employee director restricted stock — 10,301 — 1.5 — — — 1.5 Issuance of stock awards — 250,719 — ( 6.5 ) ( 12.9 ) — — ( 19.4 ) SSARs exercised — 12,307 — ( 1.2 ) — — — ( 1.2 ) Stock compensation — — — 32.5 — — — 32.5 Distribution to noncontrolling interest — — — — — — ( 13.8 ) ( 13.8 ) Investment by noncontrolling interests — — — — — — 0.1 0.1 Purchases and retirement of common stock — ( 113,824 ) — — — — — — Defined benefit pension and postretirement plans, net of tax — — — — — ( 0.8 ) — ( 0.8 ) Deferred gains and losses on derivatives, net of tax — — — — — ( 0.5 ) — ( 0.5 ) Change in cumulative translation adjustment — — — — — ( 30.9 ) 0.9 ( 30.0 ) Balance, December 31, 2022 — 74,600,815 0.7 30.2 5,654.6 ( 1,803.1 ) 0.2 3,882.6 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 stockholders — — — — ( 457.4 ) — — ( 457.4 ) Issuance of non-employee director restricted stock — 10,524 — 1.5 — — — 1.5 Issuance of stock awards — 256,709 — ( 20.5 ) — — — ( 20.5 ) SSARs exercised — 21,594 — ( 2.1 ) — — — ( 2.1 ) Stock compensation — — — 44.9 — — — 44.9 Purchases and retirement of common stock — ( 371,669 ) — ( 49.9 ) ( 3.1 ) — — ( 53.0 ) Defined pension and postretirement benefit plans, net of tax — — — — — ( 7.4 ) — ( 7.4 ) Deferred gains and losses on derivatives, net of tax — — — — — 0.1 — 0.1 Change in cumulative translation adjustment — — — — — 102.3 — 102.3 Balance, December 31, 2023 — 74,517,973 0.7 4.1 6,360.0 ( 1,708.1 ) 0.1 4,656.8 Net income (loss) ( 60.8 ) — — — ( 424.8 ) — — ( 424.8 ) Payment of dividends to stockholders — — — — ( 273.1 ) — — ( 273.1 ) Issuance of non-employee director restricted stock — 12,842 — 1.7 — — — 1.7 Issuance of stock awards — 198,601 — ( 13.5 ) ( 0.5 ) — — ( 14.0 ) SSARs exercised — 3,388 — ( 0.2 ) — — — ( 0.2 ) Stock compensation — — — 10.2 — — — 10.2 Purchases and retirement of common stock — ( 311,852 ) — ( 5.4 ) ( 16.6 ) — — ( 22.0 ) Sale of minority interest — — — — — — ( 0.1 ) ( 0.1 ) Equity transaction associated with JCA noncontrolling interest — — — 3.1 — — — 3.1 Initial fair value of redeemable noncontrolling interests 355.1 — — — — — — — Investment by redeemable noncontrolling interest 8.1 — — — — — — — Defined pension and postretirement benefit plans, net of tax — — — — — 19.8 — 19.8 Deferred gains and losses on derivatives, net of tax — — — — — 9.7 — 9.7 Change in cumulative translation adjustment ( 2.3 ) — — — — ( 224.3 ) — ( 224.3 ) Balance, December 31, 2024 $ 300.1 74,420,952 $ 0.7 $ — $ 5,645.0 $ ( 1,902.9 ) $ — $ 3,742.8 See accompanying notes to Consolidated Financial Statements. 52 Table of Contents AGCO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Years Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income (loss) $ ( 485.6 ) $ 1,171.3 $ 874.7 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 251.2 230.4 209.5 Impairment charges 369.5 4.1 36.0 Amortization of intangibles 81.0 57.7 60.1 Stock compensation expense 18.4 46.4 34.0 Loss on sale of business 507.3 — — U.S. pension plan termination and settlement 18.5 — — Equity in net earnings of affiliates, net of cash received ( 29.4 ) ( 36.4 ) ( 40.8 ) Deferred income tax benefit ( 102.7 ) ( 264.4 ) ( 58.0 ) Other 32.2 6.7 16.2 Changes in operating assets and liabilities: Accounts and notes receivable, net 59.1 ( 443.8 ) ( 306.1 ) Inventories, net 308.8 ( 164.4 ) ( 668.3 ) Other current and noncurrent assets ( 36.7 ) ( 243.0 ) 20.1 Accounts payable ( 224.9 ) ( 191.6 ) 322.1 Accrued expenses ( 190.2 ) 566.5 282.7 Other current and noncurrent liabilities 113.4 363.6 56.0 Total adjustments 1,175.5 ( 68.2 ) ( 36.5 ) Net cash provided by operating activities 689.9 1,103.1 838.2 Cash flows from investing activities: Purchases of property, plant and equipment ( 393.3 ) ( 518.1 ) ( 388.3 ) Proceeds from sale of property, plant and equipment 2.1 11.8 2.6 Purchase of businesses, net of cash acquired ( 1,903.7 ) ( 9.8 ) ( 111.3 ) Proceeds from sale of business 630.7 — — Sale of, distributions from (investments in) unconsolidated affiliates, net ( 7.4 ) ( 21.6 ) 4.0 Proceeds from cross currency swap contract 22.6 — — Other ( 1.4 ) ( 8.0 ) ( 3.8 ) Net cash used in investing activities ( 1,650.4 ) ( 545.7 ) ( 496.8 ) Cash flows from financing activities: Proceeds from indebtedness 1,875.7 329.8 410.5 Repayments of indebtedness ( 513.4 ) ( 458.6 ) ( 377.5 ) Purchases and retirement of common stock ( 22.0 ) ( 53.0 ) — Payment of dividends to stockholders ( 273.1 ) ( 457.4 ) ( 404.3 ) Payment of minimum tax withholdings on stock compensation ( 14.1 ) ( 21.6 ) ( 20.6 ) Payment of debt issuance costs ( 15.7 ) ( 10.9 ) ( 3.6 ) Investments by (distributions to) noncontrolling interests, net 8.1 — ( 11.5 ) Net cash provided by (used in) financing activities 1,045.5 ( 671.7 ) ( 407.0 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 67.8 ) ( 79.7 ) ( 34.0 ) Increase (decrease) in cash, cash equivalents and restricted cash 17.2 ( 194.0 ) ( 99.6 ) Cash, cash equivalents and restricted cash, beginning of year 595.5 789.5 889.1 Cash, cash equivalents and restricted cash, end of year $ 612.7 $ 595.5 $ 789.5 See accompanying notes to Consolidated Financial Statements. 53 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business AGCO Corporation (“AGCO” or the “Company”) is a global leader in the design, manufacture and distribution of agricultural machinery and precision agriculture technology. The Company delivers value to farmers and Original Equipment Manufacturer (“OEM”) customers through our differentiated brand portfolio including leading brands Fendt ® , Massey Ferguson ® , PTx and Valtra ® . The Company's full line of equipment, smart farming solutions and services helps farmers sustainably feed our world. The Company distributes most of its products through a combination of approximately 2,700 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 and wholesale financing through its finance joint ventures with Coöperatieve Rabobank U.A., which together with its affiliates, the Company refers to as “Rabobank.” Basis of Presentation and Consolidation The Company’s Consolidated Financial Statements represent the consolidation of all wholly-owned companies, majority-owned companies and joint ventures in which the Company has been determined to be the primary beneficiary. The Company consolidates a variable interest entity (“VIE”) if the Company determines it is the primary beneficiary. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE. The Company also consolidates all entities that are not considered VIEs if it is determined that the Company has a controlling voting interest to direct the activities that most significantly impact the joint venture or entity. For consolidated entities where our ownership interest is less than 100%, noncontrolling ownership interests are reported in our Consolidated Balance Sheets. The noncontrolling ownership interest is reported in our net income (loss), net of taxes, and is classified as “Net loss attributable to noncontrolling interests” in our Consolidated Statements of Operations. The Company records investments in affiliate companies using the equity method of accounting when it has significant influence. 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 The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The estimates made by management primarily relate to accounts and notes receivable, inventories, deferred income tax valuation allowances, uncertain tax positions, goodwill and other identifiable intangible assets, certain accrued liabilities, principally relating to reserves for volume discounts and sales incentives, warranty obligations, product liability and pension and postretirement benefits. Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries are translated into United States currency in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters.” Assets and liabilities are translated to United States dollars at period-end exchange rates. 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 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 54 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Consolidated Statements of Operations. For the year ended December 31, 2024, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 412.1 million and total assets of approximately 6.5 billion Turkish lira (or approximately $ 185.2 million). The monetary assets and liabilities denominated in the Turkish lira were approximately 5.0 billion Turkish lira (or approximately $ 140.7 million) and approximately 3.1 billion Turkish lira (or approximately $ 86.6 million), respectively, as of December 31, 2024. The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of December 31, 2024. The Company has a wholly-owned subsidiary in Argentina that assembles and distributes agricultural equipment and replacement parts. 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, 2024, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 215.9 million and total assets of approximately 258.3 billion pesos (or approximately $ 250.6 million). The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 122.6 billion pesos (or approximately $ 118.9 million), inclusive of approximately 68.0 billion pesos (or approximately $ 65.9 million) in cash and cash equivalents, as of December 31, 2024. The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 16.8 billion pesos (or approximately $ 16.3 million) as of December 31, 2024. The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of December 31, 2024. 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 6.7 billion pesos (or approximately $ 6.5 million) as of December 31, 2024. 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 Cash and cash equivalents reported in the Consolidated Balance Sheets as of December 31, 2024, 2023 and 2022 and cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 are as follows (in millions): December 31, 2024 December 31, 2023 December 31, 2022 Cash (1) $ 342.5 $ 463.8 $ 656.7 Cash equivalents (2) 269.5 131.2 130.8 Restricted cash (3) 0.7 0.5 2.0 Total $ 612.7 $ 595.5 $ 789.5 ____________________________________ (1) Consisted primarily of cash on hand and bank deposits. (2) Consisted primarily of money market deposits, certificates of deposits and overnight investments. 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 a guarantee. Property, Plant and Equipment Property, plant and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of five to 40 years for buildings and improvements, three to 25 years for machinery and equipment and five to 10 years for furniture and fixtures. Expenditures for maintenance and repairs are primarily charged to expense as incurred. 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, 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 55 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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. These interest-free periods vary by product and generally range from one to 12 months. In limited circumstances, the Company provides sales terms, and in some cases, interest-free periods that are longer than 12 months for certain products. These are typically specified programs predominately in the United States and Canada, that allow for interest-free periods and due dates of up to 24 months for certain products depending on the year of the sale and the dealer or distributor’s ordering or sales volume during the preceding year. Interest generally is charged at or above prime lending rates on the outstanding receivable balances after shipment or delivery and after interest-free periods. Sales terms of some highly seasonal products provide for payment and due dates based on a specified date during the year regardless of the shipment date. Equipment sold to dealers in the United States and Canada is paid in full on average within 12 months of shipment. Sales of replacement parts generally are payable within 30 days of shipment, with terms for some larger, seasonal stock orders generally requiring payment within six months of shipment. Under normal circumstances, equipment may not be returned. Replacement parts are generally returnable if they meet certain criteria. The Company makes an estimate of product returns at the time of sale based on historical experience. In certain regions, with respect to most equipment sales, including the United States and Canada, the Company is obligated to repurchase equipment and replacement parts upon cancellation of a dealer or distributor contract. These obligations are required by national, state or provincial laws and require the Company to repurchase a dealer or distributor’s unsold inventory, including inventories for which the receivable already has been paid. Actual interest-free periods are shorter than described above because the equipment receivable from dealers or distributors in some countries, such as in the United States and Canada, is generally due immediately upon sale of the equipment to a retail customer as discussed above. Receivables can also be paid prior to terms specified in sales agreements. Under normal circumstances, interest is not forgiven and interest-free periods are not extended. In other international markets, equipment sales generally are payable in full within 30 days to 180 days of shipment or delivery. 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 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. In certain markets, there is a time lag, which varies based on the timing and level of retail demand, between the date the Company records a sale and when the dealer sells the equipment to a retail customer. Sales of grain storage and protein production systems both in the United States and in other countries generally are payable within 30 days of shipment. In certain countries, sales of such systems for which the Company is responsible for construction or installation may be contingent upon customer acceptance. Payment terms vary by market and product, with fixed payment schedules on all sales. When the Company is responsible for installation services, fixed payment schedules may include upfront deposits, progress payments and final payment upon customer acceptance. The following summarizes by geographic region, as a percentage of the Company’s consolidated net sales, amounts with maximum interest-free periods as presented below (in millions): Year Ended December 31, 2024 North America South America Europe/ Middle East Asia/ Pacific/Africa Consolidated 0 to 6 months $ 2,292.0 $ 1,315.9 $ 6,809.4 $ 682.8 $ 11,100.1 95.2 % 7 to 12 months 547.3 — 3.5 — 550.8 4.7 % 13 to 24 months 11.0 — — — 11.0 0.1 % $ 2,850.3 $ 1,315.9 $ 6,812.9 $ 682.8 $ 11,661.9 100.0 % The Company has accounts receivable sales agreements that 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. Qualified dealers may obtain additional financing through the Company’s U.S., Canadian, European and Brazilian finance joint ventures at the joint ventures’ discretion. The Company provides various volume bonus and sales incentive programs with respect to its products. These sales incentive programs include reductions in invoice prices, reductions in retail financing rates, dealer commissions and dealer 56 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) incentive allowances. In most cases, incentive programs are established and communicated to the Company’s dealers on a quarterly basis. The incentives are paid either at the time of the cash settlement of the receivable (which is generally at the time of retail sale), at the time of retail financing, at the time of warranty registration, or at a subsequent time based on dealer purchase volumes. The incentive programs are product-line specific and generally do not vary by dealer. The cost of sales incentives associated with dealer commissions and dealer incentive allowances is estimated based upon the terms of the programs and historical experience, is based on a percentage of the sales price, and estimates for sales incentives are made and recorded at the time of sale for expected incentive programs using the expected value method. These estimates are reassessed each reporting period and are revised in the event of subsequent modifications to incentive programs, as they are communicated to dealers. The related provisions and accruals are made on a product or product-line basis and are monitored for adequacy and revised at least quarterly in the event of subsequent modifications to the programs. Interest rate subsidy payments, which are a reduction in retail finance rates, are recorded in the same manner as dealer commissions and dealer incentive allowances. Volume discounts are estimated and recognized based on historical experience, and related reserves are monitored and adjusted based on actual dealer purchase volumes and the dealer’s progress towards achieving specified cumulative target levels. Estimates of these incentives are based on the terms of the programs and historical experience. All incentive programs are recorded and presented as a reduction of revenue, due to the fact that the Company does not receive a distinct good or service in exchange for the consideration provided. In the United States and Canada, reserves for incentive programs related to accounts receivable not sold to Company’s U.S. and Canadian finance joint ventures are recorded as “Accounts receivable allowances” within the Company’s Consolidated Balance Sheets due to the fact that the incentives are paid through a reduction of future cash settlement of the receivable. 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. 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. Accounts and notes receivable allowances at December 31, 2024 and 2023 were as follows (in millions): 2024 2023 Sales incentive discounts $ 57.8 $ 54.7 Allowance for credit losses 41.8 31.9 $ 99.6 $ 86.6 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 Consolidated Statement of Operations. Write-offs are recorded at the time a customer receivable is deemed uncollectible. Additions Description Balance at Beginning of Period Acquired Businesses Charged to Costs and Expenses Write-offs Deductions (1) Foreign Currency Translation Balance at End of Period Year ended December 31, 2024 Allowances for credit losses $ 31.9 $ — $ 22.0 $ ( 4.2 ) $ ( 5.5 ) $ ( 2.4 ) $ 41.8 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 ____________________________________ (1) Deductions are the result of the sale of the Company's Grain & Protein business. Refer to Note 3 for additional information. 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 57 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) ventures. Outside of the United States and Canada, sales incentives can be paid through cash or credit memos to the Company’s dealers or through reductions in retail financing rates paid to the Company’s finance joint ventures. The Company transfers certain accounts receivable under its accounts receivable sales agreements with its finance joint ventures and other financial institutions (see Note 5). The Company records such transfers as sales of accounts receivable when it is considered to have surrendered control of such receivables under the provisions of ASU 2009-16, “Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets.” Cash payments made to the Company’s finance joint ventures for sales incentive discounts provided to dealers related to outstanding accounts receivables sold are recorded within “Accrued expenses” within the Company's Consolidated Balance Sheets. Inventories Inventories are valued at the lower of cost or net realizable value, using the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Goodwill, Other Intangible Assets and Long-Lived Assets 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. The Company combines and aggregates two or more components of an operating segment as a single reporting unit if the components have similar economic characteristics. The Company's reportable segments are not its reporting units. 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 a reporting unit more likely than not exceeds the carrying value of the reporting unit's 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. For the quantitative impairment assessment, the Company may utilize one or 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. 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. The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group. If the Company determines that the carrying amount of an asset or asset group is not recoverable based on the expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated fair value of the long-lived assets. Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences. The Company also evaluates the amortization or depreciation periods assigned to its long-lived assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The annual impairment tests completed as of October 1, 2024 indicated the fair value of each of the Company's reporting units was above its respective carrying value except for the PTx Trimble North America reporting unit, which is part of the North America operating segment. Based on the results of the impairment test, the Company recorded an impairment charge of $ 351.0 million. The Company completed the PTx Trimble joint venture transaction on April 1, 2024. Since that date, the near-term outlook of the reporting unit has deteriorated, driven by weak industry demand and lower market penetration. These conditions led to downward revisions of the Company's forecasts of earnings which resulted in the impairment charge. We estimated the fair value of the reporting unit using an income approach. The most critical assumptions used in the calculation of the fair value of the reporting unit were the forecasted revenue growth and the discount rate. 58 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The results of our goodwill impairment analyses conducted as of October 1, 2023 and 2022 indicated that no impairment existed and no reduction in the carrying amount of goodwill was required. The Company’s accumulated goodwill impairment is approximately $ 708.2 million related to impairment charges the Company recorded during 2024 related to the PTx Trimble business in North America as noted above and in 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 former grain storage and protein production systems Europe/Middle East reporting unit operated 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 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. The acquired intangible assets have a weighted average useful life as follows: Intangible Assets Weighted-Average Useful Life Patents and technology 13 years Customer relationships 16 years Trademarks and trade names 22 years Other 13 years The Company has previously determined that two of its trademarks have an indefinite useful life. The Massey Ferguson trademark has been in existence since 1952 and was formed from the merger of Massey-Harris (established in the 1890’s) and Ferguson (established in the 1930’s). The Company also has identified the Valtra trademark as an indefinite-lived asset. The Valtra trademark has been in existence since the late 1990’s, but is a derivative of the Valmet trademark which has been in existence since 1951. The Valmet name transitioned to the Valtra name over a period of time in the marketplace. 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. There are no legal, regulatory, contractual, competitive, economic or other factors that the Company is aware of or that the Company believes would limit the useful lives of the trademarks. The Massey Ferguson and Valtra trademark registrations can be renewed at a nominal cost in the countries in which the Company operates. Revenue The Company accounts for revenue recognition pursuant to ASU 2014-09, “Revenue from Contracts with Customers.” Revenue is recognized when the Company satisfies the performance obligation by transferring control over goods or services to a dealer, distributor or other customer. The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those goods or services pursuant to a contract with the customer. A contract exists once the Company receives and accepts a purchase order under a dealer sales agreement, or once the Company enters into a contract with an end user. 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. The Company generates revenue from the manufacture and distribution of agricultural equipment and replacement parts. 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. 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. As previously discussed, the amount of consideration the Company receives and the revenue recognized varies with certain sales incentives the Company offers to dealers and distributors. Estimates for sales incentives are made at the time of sale for expected incentive programs using the expected value method. These estimates are revised in the event of subsequent modification to the incentive program. All incentive programs are recorded and presented as a reduction of revenue, due to the fact that the Company does not receive a distinct good or service in exchange for the consideration provided. 59 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Dealers or distributors may not return equipment or replacement parts while their contract with the Company is in force, except for under established promotional and annual replacement parts return programs. At the time of sale, the Company estimates the amount of returns based on the terms of promotional and annual return programs and anticipated returns in the future. 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 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. Although substantially all revenue is recognized at a point in time, a relatively insignificant amount of revenue is recognized on an “over time” basis as discussed below. The Company recognizes revenue “over time” with respect to extended warranty and maintenance contracts, certain precision technology services and subscriptions and certain installation revenue associated with the sale of grain storage and production systems. Extended warranty and maintenance services contracts and precision technology services and subscriptions generally have contract durations of more than 12 months. Generally, almost all of the grain storage and protein production systems contracts with customers that relate to “over time” revenue recognition have contract durations of less than 12 months. Extended Warranty Contracts. The Company sells separately priced extended warranty contracts and maintenance contracts, which extends coverage beyond the base warranty period, or covers maintenance over a specified period. 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 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. The Company sells precision technology products, services and subscriptions individually (standalone) or in bundled packages. When a bundled package of technology products (hardware), services and/or subscriptions is sold, the portion of the consideration received related to the services and subscription components is recognized over time as the Company satisfies the future performance obligations. Revenue is recognized for the hardware component when control is transferred to the dealer or distributor. When payment is received in advance of the performance obligation being satisfied, or when a portion of the overall transaction price is allocated to a subscription, revenue is deferred at contract inception and a contract liability is recognized. The revenue associated with the performance obligations related to precision technology services and subscriptions is not significant. The costs of the software directly associated with the installation and functionality of precision technology products and services, including amortization and hosting costs, are reflected within “Cost of goods sold” and “Engineering expenses” within the Company’s Consolidated Statements of Operations. Grain Storage and Protein Production Systems Installation Revenue. In certain countries, the Company sells grain storage and protein production systems where the Company is responsible for construction and installation, and the sale is contingent upon customer acceptance. Under these conditions, the revenues are recognized over the term of the contract when the Company can objectively determine control has been transferred to the customer in accordance with agreed-upon specifications in the contract. For these contracts, the Company may be entitled to receive an advance payment, which is recognized as a contract liability for the amount in excess of the revenue recognized. The Company uses the input method using costs incurred to date relative to total estimated costs at completion to measure the progress toward satisfaction of the performance obligation. Revenues are recorded proportionally as costs are incurred. Costs include labor, material and overhead. The estimation of the progress toward completion is subject to various assumptions. As part of the estimation process, the Company reviews the length of time to complete the performance obligation, the cost of materials and labor productivity. If a significant change in one of the assumptions occurs, then the Company will recognize an adjustment under the cumulative catch-up method and the impact of the adjustment on the revenue recorded to date is recognized in the period the adjustment is identified. 60 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Refer to Note 24 for additional information regarding the Company’s sources of revenue and associated contract liabilities and performance obligations. 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, 2024, 2023 and 2022 totaled approximately $ 381.3 million, $ 420.9 million and $ 315.4 million, respectively. Advertising Costs The Company expenses all advertising costs as incurred. Cooperative advertising costs normally are expensed at the time the revenue is earned. Advertising expenses for the years ended December 31, 2024, 2023 and 2022 totaled approximately $ 53.4 million, $ 56.4 million and $ 50.9 million, respectively. Shipping and Handling Expenses All shipping and handling fees charged to customers are included as a component of net sales, and are associated with freight activities after the customer has obtained control. Shipping and handling costs are accounted for as fulfillment costs and are expensed 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 $ 54.5 million, $ 52.2 million and $ 48.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. Interest Expense, Net Interest expense, net for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in millions): 2024 2023 2022 Interest expense $ 159.3 $ 68.8 $ 46.0 Interest income ( 66.3 ) ( 64.2 ) ( 33.0 ) $ 93.0 $ 4.6 $ 13.0 Income Taxes Income taxes are accounted for under the asset and liability method. 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. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date. See Note 19 for additional information regarding the Company’s income taxes. 61 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Comprehensive Income (Loss) The Company reports comprehensive income (loss), defined as the total of net income (loss) and all other non-owner changes in equity, and the components thereof in its Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Comprehensive Income (Loss). The components of other comprehensive income (loss) and the related tax effects for the years ended December 31, 2024, 2023 and 2022 are as follows (in millions): AGCO Corporation Redeemable and Nonredeemable Noncontrolling Interests 2024 2024 Before-tax Amount Income Taxes After-tax Amount After-tax Amount Defined pension and postretirement benefit plans $ 26.7 $ ( 6.9 ) $ 19.8 $ — Deferred gains and losses on derivatives 13.0 ( 3.3 ) 9.7 — Foreign currency translation adjustments ( 224.3 ) — ( 224.3 ) ( 2.3 ) Total components of other comprehensive loss $ ( 184.6 ) $ ( 10.2 ) $ ( 194.8 ) $ ( 2.3 ) AGCO Corporation Noncontrolling Interests 2023 2023 Before-tax Amount Income Taxes After-tax Amount After-tax Amount Defined pension and postretirement benefit plans $ ( 10.0 ) $ 2.6 $ ( 7.4 ) $ — Deferred gains and losses on derivatives ( 0.3 ) 0.4 0.1 — Foreign currency translation adjustments 102.3 — 102.3 — Total components of other comprehensive income $ 92.0 $ 3.0 $ 95.0 $ — AGCO Corporation Noncontrolling Interests 2022 2022 Before-tax Amount Income Taxes After-tax Amount After-tax Amount Defined pension and postretirement benefit plans $ ( 2.0 ) $ 1.2 $ ( 0.8 ) $ — 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 loss $ ( 33.4 ) $ 1.2 $ ( 32.2 ) $ 0.9 Derivatives 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. 62 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Leases 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 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 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. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” which delays the effective date of ASU 2016-13 for smaller reporting companies and other non-SEC reporting entities. This delay applies to the Company’s equity method finance joint ventures, which were required to adopt ASU 2016-13 for annual periods beginning after December 15, 2022 and interim periods within those annual periods. The standard, and its subsequent modification, impacts the results of operations and financial condition of the Company’s finance joint ventures. For the adoption of the standard by the Company’s finance joint ventures on January 1, 2023 under the modified retrospective approach, the Company recognized the cumulative effect of ASU 2016-13 as an adjustment to the opening balance of 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 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 11 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 may impact future acquisitions. 63 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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 adopted the new standard effective December 31, 2024. Refer to Note 25 for further details. New Accounting Pronouncements to be Adopted 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. In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the consolidated financial statements. In addition, the guidance requires disclosure of selling expenses and its definition. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The ASU will be applied prospectively with an option to simultaneously apply retrospectively. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures. 2. ACQUISITIONS On September 28, 2023, the Company entered into a Sale and Contribution Agreement among AGCO, Trimble Inc. (“Trimble”) and PTx Trimble, LLC (“PTx Trimble” or the "Joint Venture"), formerly known as Trimble Solutions, LLC, which was subsequently amended and restated on March 31, 2024. On April 1, 2024, pursuant to the terms of an Amended and Restated Sale and Contribution Agreement (the “Agreement”), AGCO and Trimble completed (i) the contribution by Trimble to the Joint Venture of Trimble’s OneAg business (“OneAg”), which is Trimble’s agricultural business, excluding certain Global Navigation Satellite System and guidance technologies, and $ 8.1 million of cash, (ii) the contribution by AGCO to the Joint Venture of its interest in JCA Industries, LLC d/b/a JCA Technologies and $ 46.0 million of cash, and (iii) the purchase by AGCO from Trimble of membership interests in the Joint Venture in exchange for the payment by AGCO to Trimble of $ 1,954.0 million in cash, subject to customary working capital and other adjustments. Immediately following the closing and as a result of the transaction, AGCO directly and indirectly owns an 85 % interest in the Joint Venture and Trimble owns a 15 % interest in the Joint Venture. The purchase price was funded using net proceeds from the issuance of Senior Notes due 2027 and 2034, a term loan facility and the remainder through other borrowings and cash on hand. Refer to Note 12 for further information. AGCO began consolidating PTx Trimble within its consolidated financial statements on April 1, 2024. The Company is accounting for the Joint Venture transaction as a business combination using the acquisition method of accounting which requires assets acquired and liabilities assumed to be recorded at their acquisition date fair value. The Company allocated the purchase price of the acquisition to identified assets acquired, liabilities assumed, and noncontrolling interests based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill. The Company calculated the fair value of the assets acquired using the income, market or cost approach (or a combination thereof). Fair values of certain assets were determined based on Level 3 inputs, including estimated future cash flows, discount rates, royalty rates, growth rates and sales projections, all of which require significant management judgment and are susceptible to change. Measurement period adjustments were made to the previously disclosed preliminary fair values of developed technologies, trade name, customer relationships, deferred taxes and redeemable noncontrolling interests as a result of updated valuations resulting in an increase of intangible assets of $ 174.5 million, deferred taxes of $ 14.0 million, redeemable noncontrolling interests of $ 22.9 million and decrease in goodwill of $ 139.1 million. The goodwill consists of expected future economic benefits that will arise from expected future product sales, operating efficiencies and sales channel synergies that may result from the Joint Venture. The Company expects that the portion of the goodwill balance allocated to the US business will be deductible for tax purposes, and the goodwill allocated to the Joint Venture’s investments in foreign subsidiaries, primarily in Germany and France, will not be deductible for tax purposes. The goodwill arising from the Joint Venture has been assigned to four new reporting units within our North America, South America, Europe/Middle East and 64 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Asia/Pacific/Africa operating segments. Refer to Note 6 for the carrying amounts of goodwill by segment as of December 31, 2024. The purchase consideration transferred consisted of the following (in millions): Purchase Consideration Total cash consideration for OneAg $ 1,954.0 Working capital and other adjustments ( 47.1 ) Equity transaction associated with JCA noncontrolling interest (a) 3.1 Total purchase consideration $ 1,910.0 (a) Equity transaction associated with JCA noncontrolling interest The transfer of the 15 % interest in AGCO's JCA business is accounted for as an equity transaction. The adjustment to additional paid-in-capital represents the excess of the fair value of the JCA business transferred over its historical carrying amount. The fair value of the JCA business was determined using a discounted cash flow model. The fair values of the assets acquired, liabilities assumed and noncontrolling interests as of the acquisition date are presented in the following table (in millions): As of April 1, 2024 Cash $ 6.3 Accounts receivable 12.3 Inventories 62.6 Other current assets 6.0 Property, plant and equipment 21.6 Deferred tax assets 0.1 Right-of-use lease assets 2.4 Other assets (non-current) 0.1 Intangible assets 624.6 Goodwill 1,592.2 Total assets acquired $ 2,328.2 Accounts payable $ 5.8 Accrued expenses 11.2 Other current liabilities 14.0 Operating lease liabilities 1.6 Deferred tax liabilities 18.0 Other noncurrent liabilities 12.5 Total liabilities assumed $ 63.1 Redeemable noncontrolling interests (b) $ 355.1 Net assets acquired $ 1,910.0 (b) Redeemable noncontrolling interests Trimble has a put option to sell its noncontrolling interests to the Company, and the Company has a call option to redeem Trimble's noncontrolling interests. The first exercisable date of both the put and call options is April 1, 2027. The put and call options prices are based on multiples of EBITDA, subject to the terms of the Agreement. We estimated the fair value of 65 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) the put and call options using a Monte Carlo simulation along with a Black Scholes model assuming an exercise date of three years from the close of the transaction, the first allowable exercise date. We evaluated the put and call options for the redeemable noncontrolling interests under ASC 480, Distinguishing Liabilities from Equity, and classified the redeemable noncontrolling interests as mezzanine equity based on its redemption features. The amount of the net income or loss attributable to the redeemable noncontrolling interests is recorded in “Net loss attributable to noncontrolling interests” within the Company's Consolidated Statements of Operations. To the extent the redemption value exceeds the initial fair value recorded, the Company will recognize the entire change in the redemption amount each reporting period in retained earnings. The acquired identifiable intangible assets of OneAg as of the date of the acquisition are summarized in the following table (in millions): Fair Value Useful Life (1) Developed Technology $ 526.0 7 - 15 years Customer Relationships 47.3 20 years Trade name 6.5 5 years Favorable contracts 44.8 2 - 7 years $ 624.6 ____________________________________ (1) Based on available information and certain assumptions that we believe are reasonable. The following unaudited pro forma financial information presents the consolidated results of operations as if the OneAg acquisition had occurred on January 1, 2023. OneAg's pre-acquisition results have been added to the Company's historical results. The pro forma results (in millions) contained in the table below include adjustments for (i) the elimination of sales between the Company and OneAg, (ii) amortization of acquired intangible assets (iii) interest expense and amortization of debt issuance costs related to borrowings under the Senior Notes due 2027 and 2034 and term loan facility and (iv) transaction-related costs as if these had been incurred on January 1, 2023 for the periods ending December 31, 2023 and 2024, respectively. Years Ended December 31, 2024 2023 Unaudited Consolidated Pro Forma Results Net sales $ 11,745.3 $ 14,895.7 Net income (loss) attributable to AGCO Corporation ( 423.8 ) 1,119.7 These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication of future operating results. The amounts of PTx Trimble's net sales and net loss attributable to AGCO Corporation consolidated by the Company since the acquisition date were $ 171.3 million and $ 350.9 million, respectively. During the years ended December 31, 2024 and 2023, transaction-related costs of approximately $ 23.1 million and $ 16.0 million were expensed as incurred to “Selling, general and administrative expenses” in the Company's Consolidated Statements of Operations, respectively. 66 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 3. BUSINESS DIVESTITURE On July 25, 2024, the Company entered into a Stock and Asset Purchase Agreement to sell the majority of its Grain & Protein (“G&P”) business, which includes the GSI®, Automated Production® (AP), Cumberland®, Cimbria® and Tecno® brands for a purchase price of $ 700.0 million, subject to customary working capital and other adjustments. On November 1, 2024, the Company completed the sale of the G&P business to A-AG Holdco Limited, an affiliate of American Industrial Partners. The Company previously classified the G&P business as held for sale as of June 30, 2024. The Company determined the sale of the G&P business did not represent a strategic shift that had or will have a major effect on the consolidated results of operations, and therefore results of this business were not classified as discontinued operations. The results of the G&P business through the date of the divestiture are included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments. The Company received net proceeds of $ 630.7 million and recognized a loss on the sale of business of $ 507.3 million, which is included within “Loss on sale of business” in the Company's Consolidated Statements of Operations. The loss on sale of business includes $ 93.6 million of cumulative translation adjustment losses representing amounts previously recorded in accumulated other comprehensive loss. The proceeds from the sale were used to repay the Term Loan Facility and reduce borrowings under the Credit Facility. Refer to Note 12 for further information. The major categories of divested assets and liabilities as of the date of the divestiture were as follows (in millions): Assets divested Cash and cash equivalents $ 25.0 Accounts and notes receivable, net 170.2 Inventories, net 171.6 Other current assets 21.6 Total current assets 388.4 Property, plant and equipment, net 101.8 Right-of-use lease assets 15.2 Other assets 16.5 Intangible assets, net 113.7 Goodwill 203.6 Total assets $ 839.2 Liabilities divested Accounts payable $ 90.4 Accrued expenses 98.4 Other current liabilities 54.7 Total current liabilities 243.5 Deferred tax liabilities 8.3 Operating lease liabilities 10.5 Other noncurrent liabilities 5.2 Total liabilities $ 267.5 Disposal group, net $ 571.7 67 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 4. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment, net at December 31, 2024 and 2023 consisted of the following (in millions): 2024 2023 Land $ 141.8 $ 154.0 Buildings and improvements 998.3 1,042.5 Machinery and equipment 2,916.4 3,178.9 Furniture and fixtures 206.6 210.7 Gross property, plant and equipment 4,263.1 4,586.1 Accumulated depreciation and amortization ( 2,444.5 ) ( 2,665.2 ) Property, plant and equipment, net $ 1,818.6 $ 1,920.9 5. ACCOUNTS RECEIVABLE SALES AGREEMENTS The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements that remain outstanding as of December 31, 2024 and 2023 was approximately $ 2.3 billion and $ 2.5 billion, respectively. Under the terms of the accounts receivable sales agreements in the U.S., Canada, 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. These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s Consolidated Statements of Operations. The Company does not service the receivables after the sale occurs and does not maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales agreements and determined that receivables sold under these agreements should be accounted for as off-balance sheet transactions. In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world. The cash received from trade receivables sold under factoring arrangements that remain outstanding as of December 31, 2024 and 2023 was approximately $ 220.5 million and $ 254.1 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 receivables sold under these agreements should be accounted for as off-balance sheet transactions. Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Consolidated Statements of Operations, were approximately $ 118.2 million , $ 148.4 million and $ 71.1 million during 2024, 2023 and 2022, respectively. The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers. As of December 31, 2024 and 2023, these finance joint ventures had approximately $ 139.2 million and $ 211.3 million, respectively, of outstanding accounts receivable associated with these arrangements. In certain foreign countries, the Company invoices its finance joint ventures directly and the finance joint ventures retain a form of title to the goods delivered to dealers until the dealer makes payment so that the finance joint ventures can recover the goods in the event of dealer or end customer default on payment. This occurs as the laws of some foreign countries do not provide for a seller’s retention of a security interest in goods in the same manner as established in the United States Uniform Commercial Code. The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment. The dealer or distributor may not return equipment or replacement parts to the Company while its contract with the finance joint venture is in force, and can only return the equipment to the retail finance joint venture with penalties that would generally not make it economically beneficial to do so. 68 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 6. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill during the years ended December 31, 2024, 2023 and 2022 are summarized as follows (in millions): North America South America Europe/ Middle East Asia/ Pacific/Africa Consolidated 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 Acquisitions 955.6 32.5 592.4 20.4 1,600.9 Divestiture (1) ( 523.9 ) ( 12.4 ) ( 61.4 ) ( 113.2 ) ( 710.9 ) Impairment charge ( 354.1 ) — — — ( 354.1 ) Foreign currency translation ( 3.0 ) ( 18.7 ) ( 27.2 ) — ( 48.9 ) Balance as of December 31, 2024 $ 742.8 $ 94.9 $ 962.3 $ 20.4 $ 1,820.4 _________________________________ (1) Divestiture resulting from the Company's sale of the majority of the G&P business, $ 507.3 million is included within “Loss on sale of business” in the Company’s Consolidated Statements of Operations and $ 203.6 million was divested. Refer to Note 3 for additional information. 69 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Changes in the carrying amount of acquired intangible assets during 2024 and 2023 are summarized as follows (in millions): Gross Carrying Amounts Trademarks and Trade Names Customer Relationships Patents and Technology Other Total 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 Acquisitions 6.5 47.3 526.0 44.8 624.6 Divestiture ( 122.7 ) ( 434.4 ) ( 59.2 ) — ( 616.3 ) Foreign currency translation ( 3.0 ) ( 14.5 ) ( 10.3 ) ( 0.2 ) ( 28.0 ) Balance as of December 31, 2024 $ 75.1 $ 179.1 $ 604.7 $ 50.9 $ 909.8 Accumulated Amortization Trademarks and Trade Names Customer Relationships Patents and Technology Other Total 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 Amortization expense 7.4 23.0 37.2 13.4 81.0 Divestiture ( 74.2 ) ( 383.7 ) ( 49.3 ) — ( 507.2 ) Foreign currency translation ( 2.1 ) ( 13.1 ) ( 6.2 ) ( 0.2 ) ( 21.6 ) Balance as of December 31, 2024 $ 45.6 $ 109.6 $ 95.0 $ 14.9 $ 265.1 Indefinite-Lived Intangible Assets Trademarks and Trade Names Balance as of December 31, 2022 $ 84.8 Foreign currency translation 1.1 Balance as of December 31, 2023 85.9 Foreign currency translation ( 2.1 ) Balance as of December 31, 2024 $ 83.8 For the years ended December 31, 2024, 2023 and 2022, amortization expense related to acquired intangible assets was $ 81.0 million, $ 57.7 million and $ 60.1 million, respectively. The Company estimates amortization of existing intangible assets will be $ 61.3 million in 2025, $ 61.0 million in 2026, $ 58.9 million in 2027, $ 57.0 million in 2028, and $ 54.3 million in 2029. External-use software, net, developed by the Company and marketed externally, was approximately $ 0.4 million and $ 6.3 million as of December 31, 2024 and 2023, respectively, and classified within “Intangible assets, net.” Additionally, $ 4.6 million of external-use software, net was divested as part of the sale of the majority of the Company's G&P business. 70 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 7. ACCRUED EXPENSES Accrued expenses at December 31, 2024 and 2023 consisted of the following (in millions): 2024 2023 Reserve for volume discounts and sales incentives $ 961.1 $ 953.6 Warranty reserves 598.7 679.9 Accrued employee compensation and benefits 245.0 454.8 Accrued taxes 239.5 401.2 Accrued restructuring expenses 125.2 6.4 Other 300.1 407.9 Balance at the end of the year $ 2,469.6 $ 2,903.8 8. INVENTORIES Inventories, net at December 31, 2024 and 2023 were as follows (in millions): 2024 2023 Finished goods $ 1,187.9 $ 1,460.7 Repair and replacement parts 754.6 823.1 Work in process 170.0 255.2 Raw materials 618.8 901.7 Inventories, net $ 2,731.3 $ 3,440.7 At December 31, 2024 and 2023, the Company had recorded $ 251.1 million and $ 238.9 million, respectively, as a reserve for surplus and obsolete inventories. These reserves are reflected within “Inventories, net” within the Company’s Consolidated Balance Sheets. 9. PRODUCT WARRANTY The warranty reserve activity for the years ended December 31, 2024, 2023 and 2022, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions): 2024 2023 2022 Balance at beginning of the year $ 800.8 $ 640.0 $ 592.5 Acquisitions 4.1 — — Accruals for warranties issued 396.3 464.9 338.8 Settlements made and deferred revenue recognized ( 401.0 ) ( 328.7 ) ( 261.7 ) Divestiture ( 6.2 ) — — Foreign currency translation ( 51.0 ) 24.6 ( 29.6 ) Balance at the end of the year $ 743.0 $ 800.8 $ 640.0 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 . Revenue is recognized for the extended warranty contracts 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. Approximately $ 598.7 million and $ 679.9 million of warranty reserves are included in “Accrued expenses” in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. Approximately $ 144.3 million and $ 120.9 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. 71 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company recognizes potential recoveries of the costs associated with warranties it provides when the collection is probable. When specifics of the recovery have been agreed upon with the Company’s suppliers through the confirmation of liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net” in the Company's Consolidated Balance Sheets. 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” in the Company's Consolidated Balance Sheets. 10. INVESTMENTS IN AFFILIATES Investments in affiliates as of December 31, 2024 and 2023 were as follows (in millions): 2024 2023 Finance joint ventures $ 471.4 $ 464.3 Manufacturing joint ventures 31.4 30.6 Other affiliates 16.8 17.8 $ 519.6 $ 512.7 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 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. 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’s equity in net earnings of affiliates for the years ended December 31, 2024, 2023 and 2022 were as follows (in millions): 2024 2023 2022 Finance joint ventures $ 45.2 $ 66.9 $ 63.0 Manufacturing and other joint ventures 1.2 1.3 1.1 $ 46.4 $ 68.2 $ 64.1 Summarized combined financial information of the Company’s finance joint ventures as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 were as follows (in millions): As of December 31, 2024 2023 Total assets $ 10,036.4 $ 10,035.8 Total liabilities 9,074.3 9,088.3 Partners’ equity 962.1 947.5 72 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) For the Years Ended December 31, 2024 2023 2022 Revenues $ 791.7 $ 680.5 $ 454.6 Costs 672.7 468.6 274.9 Income before income taxes $ 119.0 $ 211.9 $ 179.7 At December 31, 2024 and 2023, the Company’s receivables from affiliates were approximately $ 32.0 million and $ 146.9 million, respectively. The receivables from affiliates are reflected within “Accounts and notes receivable, net” within the Company’s Consolidated Balance Sheets. The portion of the Company’s retained earnings balance that represents undistributed retained earnings of equity method investees was approximately $ 461.2 million and $ 445.1 million as of December 31, 2024 and 2023, respectively. The Company received dividends from certain finance joint ventures of approximately $ 13.7 million and $ 28.9 million during 2024 and 2023, respectively. There were no returns on investment in excess of earnings in 2024 and 2023, respectively. 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. 11. 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, 2024, payment terms with the majority of the Company’s suppliers are 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, 2024 and 2023, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 50.6 million and $ 82.7 million, respectively, and are reflected in “ Accounts payable ” in the Company’s Consolidated Balance Sheets. The following table summarizes the activity of the Company’s supplier finance programs during the year ended December 31, 2024 (in millions): 2024 Balance at beginning of the year $ 82.7 Amounts added to the programs 282.5 Amounts settled under the programs ( 314.6 ) Balance at the end of the year $ 50.6 73 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 12. INDEBTEDNESS Long-term debt consisted of the following at December 31, 2024 and 2023 (in millions): December 31, 2024 December 31, 2023 Credit Facility, expires 2027 $ — $ — 5.450 % Senior notes due 2027 400.0 — 5.800 % Senior notes due 2034 700.0 — 0.800 % Senior notes due 2028 622.7 664.0 1.002 % EIB Senior term loan due 2025 259.5 276.7 EIB Senior term loan due 2029 259.5 276.7 EIB Senior term loan due 2030 176.4 — Senior term loans due between 2025 and 2028 152.0 162.1 Other long-term debt — 3.1 Debt issuance costs ( 12.0 ) ( 3.1 ) 2,558.1 1,379.5 Less: Current portion of other long-term debt — ( 2.3 ) 1.002 % EIB Senior term loan due 2025 ( 259.5 ) — Senior term loans due 2025 ( 65.3 ) — Total long-term indebtedness $ 2,233.3 $ 1,377.2 At December 31, 2024, the aggregate scheduled maturities of long-term debt, excluding the current portion of long-term debt, are as follows (in millions): 2026 $ 54.4 2027 396.5 2028 652.9 2029 259.2 Thereafter 870.3 $ 2,233.3 Cash payments for interest were approximately $ 125.5 million, $ 60.5 million and $ 45.1 million for the years ended December 31, 2024, 2023 and 2022, 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 74 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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, 2024, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow $ 1,249.9 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. In March 2024, the Company further amended the Credit Facility to increase this amount by $ 250.0 million, for an aggregate amount of $ 500.0 million (“Term Loan Facility”). The Company drew down the Term Loan Facility on March 28, 2024. Borrowings under the Term Loan Facility bear interest at the same rate and margin as the Credit Facility. The Term Loan Facility matures on December 19, 2027. On November 1, 2024, the Company repaid the $ 500.0 million outstanding under the Term Loan Facility utilizing proceeds from the sale of the majority of the Company’s G&P business. Refer to Note 3 for further information. 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 $ 103.8 million as of December 31, 2024). The credit facility expires on December 31, 2026. Any loans will bear interest at the EURIBOR plus a credit spread. As of December 31, 2024 and December 31, 2023, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 103.8 million). 5.450 % Senior Notes due 2027 and 5.800 % Senior Notes due 2034 On March 21, 2024, the Company issued (i) $ 400.0 million aggregate principal amount of 5.450 % Senior Notes due 2027 (the “2027 Notes”) and (ii) $ 700.0 million aggregate principal amount of 5.800 % Senior Notes due 2034 (the “2034 Notes”, and together with the 2027 Notes, the “Notes”). The Notes are unsecured and guaranteed on a senior unsecured basis by AGCO International Holdings B.V., AGCO International GmbH and Massey Ferguson Corp., direct and indirect subsidiaries of the Company (collectively, the “Guarantors”). The 2027 Notes mature on March 21, 2027, and interest is payable semi-annually, in arrears, at 5.450 %. The 2034 Notes mature on March 21, 2034, and interest is payable semi-annually, in arrears, at 5.800 %. The Notes contain covenants restricting among other things, the incurrence of certain secured indebtedness. Prior to February 21, 2027, in the case of the 2027 Notes, and December 21, 2033, in the case of the 2034 Notes, the Company may redeem the 2027 Notes and/or the 2034 Notes at its option, in whole or in part, at any time and from time to time, at the applicable “make-whole” redemption price (calculated as set forth in the Senior Note Indenture and First Supplemental Indenture and applicable series of the Notes). On or after February 21, 2027, in the case of the 2027 Notes, and December 21, 2033, in the case of the 2034 Notes, the Company may redeem the 2027 Notes or the 2034 Notes, as the case may be, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. 0.800 % Senior Notes Due 2028 On October 6, 2021, the Company issued € 600.0 million (or approximately $ 622.7 million as of December 31, 2024) 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 $ 259.5 million as of December 31, 2024) 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. Subsequent to December 31, 2024, on January 24, 2025, the Company repaid € 250.0 million (or approximately $ 262.3 million) upon maturity of the EIB Senior term loan due 2025. 75 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) EIB Senior Term Loans due 2029 and 2030 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 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 (or approximately $ 259.5 million as of December 31, 2024) 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. On January 25, 2024, the Company entered into an additional multi-currency Finance Contract with the 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 (or approximately $ 176.4 million as of December 31, 2024) under the arrangement. The loan matures on February 15, 2030. 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 3.416 % 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. Senior Term Loans Due Between 2025 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 € 322.5 million in October 2019, October 2021, April 2022 and October 2023. Of the 2018 senior loans, the Company repaid an aggregate amount of € 244.0 million in August 2021, February 2022, and August 2023. In aggregate, as of December 31, 2024, the Company had indebtedness of € 146.5 million (or approximately $ 152.0 million as of December 31, 2024) 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, 2024, 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 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. Bridge Facility On September 28, 2023, the Company entered into a bridge facility commitment letter with Morgan Stanley pursuant to which Morgan Stanley committed to provide a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility"). The availability under the Bridge Facility was reduced to zero by certain permanent financing transactions including the net proceeds from the issuance of the Notes, the Company's entry into the Term Loan Facility and by amounts based on the Company's cash flow, and the Company terminated the Bridge Facility on March 25, 2024. Other Short-Term Borrowings As of December 31, 2024 and 2023, the Company had short-term borrowings due within one year, excluding the current portion of long-term debt, of approximately $ 90.4 million and $ 12.7 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, 2024 and 2023, outstanding letters of credit totaled $ 13.2 million and $ 14.7 million, respectively. 76 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 13. RESTRUCTURING AND BUSINESS OPTIMIZATION EXPENSES AND ASSET IMPAIRMENT CHARGES Restructuring Expenses On June 24, 2024, the Company announced a restructuring program (the “Program”) in response to increased weakening demand in the agriculture industry. The initial phase of the Program is focused on further reducing structural costs, streamlining the Company’s workforce and enhancing global efficiencies related to changing the Company’s operating model for certain corporate and back-office functions and better leveraging technology and global centers of excellence. The Company estimates that it will incur charges for one-time termination benefits of approximately $ 150.0 million to $ 200.0 million in connection with this phase of the Program, primarily consisting of cash charges related to severance payments, employees benefits and related costs. The Company incurred the majority of charges in 2024 and expects to incur the remaining charges in 2025. Additionally, i n recent years, the Company 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 fluctuating global market demand. Restructuring expenses activity, which relates to severance and other related costs, during the years ended December 31, 2024, 2023 and 2022 is summarized as follows (in millions): Balance as of December 31, 2021 $ 14.7 2022 provision, net of reversals 6.1 2022 cash activity ( 12.8 ) Foreign currency translation ( 1.2 ) Balance as of December 31, 2022 6.8 2023 provision, net of reversals 11.9 2023 cash activity ( 9.2 ) Foreign currency translation ( 1.7 ) Balance as of December 31, 2023 7.8 2024 provision, net of reversals 157.8 2024 cash activity ( 27.2 ) Foreign currency translation ( 2.2 ) Balance as of December 31, 2024 $ 136.2 Approximately $ 125.2 million and $ 6.4 million of restructuring expenses are included in “Accrued expenses” in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. Approximately $ 11.0 million and $ 1.4 million of restructuring expenses are included in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. Business Optimization Expenses Business optimization expenses primarily relate to professional services costs incurred as part of the restructuring program aimed at reducing structural costs, enhancing global efficiencies by changing the Company’s operating model for certain corporate and back-office functions. During the year ended December 31, 2024, the Company recognized approximately $ 14.9 million of business optimization expenses. 77 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Asset 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 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. 14. 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. Refer to 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. 78 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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 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 $ 356.7 million, $ 262.2 million and $ 364.8 million as of December 31, 2024, 2023 and 2022, respectively. Steel Commodity Contracts The Company designates certain steel commodity contracts as cash flow hedges of expected future purchases of steel. The Company did not have any derivatives that were designated as cash flow hedges related to steel commodity contracts as of December 31, 2024. The total notional value of derivatives that were designated as cash flow hedges was approximately $ 2.5 million and $ 0.9 million as of December 31, 2023 and 2022, respectively. Interest Rate Risk The Company entered into treasury rate locks in early March 2024 to fix the interest rate for the 2034 Notes issued on March 21, 2024. The derivative position settled on March 28, 2024 with a cash settlement that offset changes in the benchmark treasury rate between the execution of the treasury rate lock and the debt pricing date for the 2034 Notes. This treasury rate lock was designated as a cash flow hedge and the gain at termination of $ 8.2 million was recognized in accumulated other comprehensive loss. The amount recognized in accumulated other comprehensive loss is reclassified to interest expense as interest payments are made on the 2034 Notes through the maturity date.accumulated other comprehensive loss is reclassified to interest expense as interest payments are made on the 2034 Notes through the maturity date. 79 Table of Contents 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, 2024, 2023 and 2022 (in millions): Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount Accumulated derivative net losses as of December 31, 2021 $ ( 0.5 ) $ ( 0.1 ) $ ( 0.4 ) Net changes in fair value of derivatives Foreign Currency Contracts: ( 15.0 ) ( 3.9 ) ( 11.1 ) Commodity Contracts ( 4.7 ) ( 1.2 ) ( 3.5 ) Total ( 19.7 ) ( 5.1 ) ( 14.6 ) Net losses reclassified from accumulated other comprehensive loss into income Foreign Currency Contracts: 14.5 3.9 10.6 Commodity Contracts 4.7 1.2 3.5 Total 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 Foreign Currency Contracts: ( 11.8 ) ( 2.7 ) ( 9.1 ) Commodity Contracts 0.3 0.1 0.2 Total ( 11.5 ) ( 2.6 ) ( 8.9 ) Net losses reclassified from accumulated other comprehensive loss into income Foreign Currency Contracts: 11.1 2.2 8.9 Commodity Contracts 0.1 — 0.1 Total 11.2 2.2 9.0 Accumulated derivative net losses as of December 31, 2023 $ ( 1.3 ) $ ( 0.5 ) $ ( 0.8 ) Net changes in fair value of derivatives Foreign currency contracts (1) ( 1.2 ) 1.2 ( 2.4 ) Commodity contracts (2) ( 0.3 ) — ( 0.3 ) Treasury Rate Locks 8.2 2.1 6.1 Total 6.7 3.3 3.4 Net losses reclassified from accumulated other comprehensive loss into income Foreign currency contracts (1) 6.7 0.3 6.4 Commodity contracts (2) 0.3 — 0.3 Treasury Rate Locks ( 0.7 ) ( 0.3 ) ( 0.4 ) Total 6.3 — 6.3 Accumulated derivative net gains as of December 31, 2024 $ 11.7 $ 2.8 $ 8.9 ____________________________________ (1) The outstanding contracts as of December 31, 2024 range in maturity through December 2025. (2) As of December 31, 2024, there were no outstanding contracts. As of December 31, 2024, approximately $ 2.0 million of realized derivative net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts associated with inventory that had not yet been sold. 80 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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. On January 29, 2021, 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 had an expiration date of January 29, 2028. At maturity of the cross currency swap contract, the Company was expected to deliver the notional amount of approximately € 247.9 million (or approximately $ 257.3 million as of December 31, 2024) and receive $ 300.0 million from the counterparties. The Company receives quarterly interest payments from the counterparties based on a fixed interest rate until maturity of the cross currency swap. On November 4, 2024, the Company's existing cross currency swap contract was terminated and the Company delivered the notional amount of approximately $ 277.4 million and received $ 300.0 million from the counterparties, resulting in a gain of approximately $ 22.6 million that was recognized in accumulated other comprehensive loss. On November 4, 2024, the Company entered into new $ 600.0 million cross currency swap contracts comprising of $ 200.0 million tranche for three years tenor, $ 200 million tranche for five years tenor and $ 200.0 million tranche for seven years tenor. 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 contracts have an expiration date of November 6, 2027, November 6, 2029 and November 6, 2031, respectively. At maturity of the cross currency swap contract, the Company is expected to deliver the notional amount of approximately € 385.5 million (or approximately $ 400.1 million as of December 31, 2024) and 155.5 million Swiss francs (or approximately $ 171.9 million as of December 31, 2024), respectively, and receive $ 600.0 million from the counterparties. The Company receives 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. The Company recognized the change in fair value of the foreign currency denominated debt designated as a net investment hedge, a loss of $ 3.1 million, net of tax, in accumulated other comprehensive loss during the year ended December 31, 2023. 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): Notional Amount as of December 31, 2024 December 31, 2023 Cross currency swap contract $ 600.0 $ 300.0 81 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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 Cross currency swap contracts: Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount December 31, 2024 ( 4.1 ) ( 1.1 ) ( 3.0 ) December 31, 2023 ( 12.7 ) ( 3.3 ) ( 9.4 ) December 31, 2022 20.5 5.3 15.2 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, 2024 and 2023, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 3,231.2 million and $ 3,125.1 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, 2024 December 31, 2023 December 31, 2022 Foreign currency contracts Other expense, net $ ( 49.3 ) $ 29.9 $ ( 38.2 ) The table below sets forth the fair value of derivative instruments as of December 31, 2024 (in millions): Asset Derivatives as of December 31, 2024 Liability Derivatives as of December 31, 2024 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivative instruments designated as hedging instruments: Foreign currency contracts Other current assets $ 3.7 Other current liabilities $ 1.6 Commodity contracts Other current assets — Other current liabilities — Cross currency swap contracts Other noncurrent assets 16.2 Other noncurrent liabilities — Derivative instruments not designated as hedging instruments: Foreign currency contracts (1) Other current assets 26.1 Other current liabilities 12.6 Total derivative instruments $ 46.0 $ 14.2 ____________________________________ (1) The outstanding contracts as of December 31, 2024 range in maturity through February 2025. 82 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The table below sets forth the fair value of derivative instruments as of December 31, 2023 (in millions): Asset Derivatives as of December 31, 2023 Liability Derivatives as of December 31, 2023 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivative instruments designated as hedging instruments: Foreign currency contracts Other current assets $ 1.3 Other current liabilities $ 1.2 Cross currency swap contract Other noncurrent assets 20.3 Other noncurrent liabilities — Derivative instruments not designated as hedging instruments: Foreign currency contracts Other current assets 17.1 Other current liabilities 12.8 Total derivative instruments $ 38.7 $ 14.0 15. STOCK COMPENSATION PLANS The Company recorded stock compensation expense as follows for the years ended December 31, 2024, 2023 and 2022 (in millions): Years Ended December 31, 2024 (1) 2023 2022 Cost of goods sold $ 0.5 $ 1.8 $ 1.3 Selling, general and administrative expenses 17.9 44.6 32.7 Total stock compensation expense $ 18.4 $ 46.4 $ 34.0 _________________________________ (1) Includes approximately $ 6.5 million of compensation expense related to PTx Trimble employees vesting in legacy Trimble awards. 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, 2024, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,441,051 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 Compensation Committee, to make grants of performance shares, stock appreciation rights (“SSARs”), 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 2024 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. 83 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) During 2024, the Company granted performance awards covering up to 344,592 shares, assuming the Company achieves maximum levels of performance related to varying performance periods. Compensation expense recorded during 2024, 2023 and 2022 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 2024, 2023 and 2022 was as follows: Years Ended December 31, 2024 2023 2022 Weighted average grant-date fair value $ 126.95 $ 143.63 $ 119.35 Performance award transactions during 2024 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 Fair Value Shares awarded but not earned at January 1 571,382 $ 131.14 Shares awarded 344,592 126.95 Shares forfeited ( 82,714 ) 132.03 Shares vested or earned ( 263,110 ) 118.60 Shares awarded but not earned at December 31 570,150 $ 134.26 Based on the level of performance achieved as of December 31, 2024, 167,875 shares were earned under the related performance period, including 1,997 shares vested as of December 31, 2023 related to certain retirees and other individuals. 105,053 shares were issued in February 2025, net of 62,822 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, 2024, 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 $ 8.3 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”) RSU awards granted under the 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 2024, 2023 and 2022 was as follows: Years Ended December 31, 2024 2023 2022 Weighted average grant-date fair value $ 114.07 $ 134.63 $ 109.09 84 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) During the year ended December 31, 2024, the Company granted 200,560 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, 2024 were as follows: RSUs Weighted-Average Grant Date Fair Value Shares awarded but not vested at January 1 213,947 $ 122.48 Shares awarded 200,560 114.07 Shares forfeited ( 37,305 ) 116.87 Shares vested ( 108,000 ) 119.25 Shares awarded but not vested at December 31 269,202 $ 118.29 During January 2025, 56,009 RSUs shares were issued, net of 34,605 shares that were withheld for taxes. 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, 2024, the total compensation cost related to the unvested RSUs not yet recognized was approximately $ 19.6 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years. 2025 Awards On January 29, 2025, the Company granted 215,621 performance award shares (subject to the Company achieving future target levels of performance) and 148,578 RSUs under the Plan. The 2025 grant of performance award shares is subject to a total shareholder return modifier. 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 2024 grant was made on April 25, 2024, and equated to 14,148 shares of common stock, of which 12,842 shares of common stock were issued, after shares were withheld for taxes. The Company recorded stock compensation expense of approximately $ 1.7 million during 2024 associated with these grants. 16. STOCKHOLDERS' EQUITY Common Stock At December 31, 2024, the Company had 150,000,000 authorized shares of common stock with a par value of $ 0.01 per share, with approximately 74,420,952 shares of common stock outstanding and approximately 3,441,051 shares reserved for issuance under the Company’s Plan (See Note 15). Share Repurchase Program In November 2024, the Company entered into an accelerated share repurchase ("ASR") agreement with a financial institution to repurchase $ 22.0 million of shares of its common stock. The Company received approximately 228,969 shares associated with the completion of this transaction as of December 31, 2024. In November 2023, the Company entered into an 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 85 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 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 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, 2024, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 35.0 million, which has no expiration date. Dividends The Company’s Board of Directors has declared and the Company has paid cash dividends per common share during the following years: 2024 (1) 2023 (2) 2022 (3) Dividends declared and paid per common share $ 3.66 $ 6.10 $ 5.40 On January 16, 2025, the Company's Board of Directors declared a regular quarterly dividend of $ 0.29 per common share to be paid on March 14, 2025, to all stockholders of record as of the close of business February 14, 2025. __ __________________________________ (1) The Company’s Board of Directors declared and the Company has paid quarterly cash dividends of $ 0.29 per common share during each quarter of 2024. In addition, the Company's Board of Directors declared and the Company paid a special variable dividend of $ 2.50 per common share during 2024 totaling approximately $ 186.6 million. (2) 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 declared and the Company paid a special variable dividend of $ 5.00 per common share during 2023 totaling approximately $ 374.4 million. (3) 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 declared and the Company paid a special variable dividend of $ 4.50 per common share during 2022 totaling approximately $ 335.7 million. 86 Table of Contents 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 for the years ended December 31, 2024, 2023 and 2022 (in millions): Defined Pension and Postretirement Benefit Plans Cumulative Translation Adjustment Deferred Gains and Losses 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 ( 0.8 ) ( 30.9 ) ( 0.5 ) ( 32.2 ) Accumulated other comprehensive loss, December 31, 2022 $ ( 231.2 ) $ ( 1,571 ) $ ( 0.9 ) $ ( 1,803.1 ) Other comprehensive income (loss) 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 income (loss) ( 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 ) Other comprehensive income (loss) before reclassifications ( 3.1 ) ( 224.3 ) 3.4 ( 224.0 ) Net losses reclassified from accumulated other comprehensive loss 22.9 — 6.3 29.2 Other comprehensive income (loss) 19.8 ( 224.3 ) 9.7 ( 194.8 ) Accumulated other comprehensive loss, December 31, 2024 $ ( 218.8 ) $ ( 1,693.0 ) $ 8.9 $ ( 1,902.9 ) 87 Table of Contents 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 for the years ended December 31, 2024, 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, 2024 (1) Year ended December 31, 2023 (1) Year ended December 31, 2022 (1) Derivatives: Net losses on foreign currency contracts $ 6.7 $ 11.1 $ 14.5 Cost of goods sold Net losses on commodity contracts 0.3 0.1 4.7 Cost of goods sold Net gains on treasury rate locks ( 0.7 ) — — Interest expense, net Reclassification before tax 6.3 11.2 19.2 Income tax benefit — ( 2.2 ) ( 5.1 ) Income tax provision Reclassification net of tax $ 6.3 $ 9.0 $ 14.1 Defined pension and postretirement benefit plans: Amortization of net actuarial losses $ 10.5 $ 9.4 $ 8.7 Other expense, net (2) Amortization of prior service cost 1.5 1.7 0.2 Other expense, net (2) Net loss recognized due to settlement 18.8 — — Other expense, net (2) Reclassification before tax 30.8 11.1 8.9 Income tax benefit ( 7.9 ) ( 2.8 ) ( 2.5 ) Income tax provision Reclassification net of tax $ 22.9 $ 8.3 $ 6.4 Net losses reclassified from accumulated other comprehensive loss $ 29.2 $ 17.3 $ 20.5 ____________________________________ (1) Losses (Gains) included within the Consolidated Statements of Operations for the years ended December 31, 2024 and 2023, respectively. (2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost. Refer to Note 20 of the Company’s Consolidated Financial Statements. 17. NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period. Diluted net income (loss) per common share assumes the exercise of outstanding stock-settled stock appreciation rights ("SSARs") and the vesting of restricted stock units ("RSUs") 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. 88 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) A reconciliation of net income (loss) attributable to AGCO Corporation and weighted average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share for the years ended December 31, 2024, 2023 and 2022 is as follows (in millions, except per share data): 2024 (1) 2023 2022 Basic net income (loss) per share: Net income (loss) attributable to AGCO Corporation $ ( 424.8 ) $ 1,171.4 $ 889.6 Weighted average number of common shares outstanding 74.6 74.8 74.6 Basic net income (loss) per share attributable to AGCO Corporation $ ( 5.69 ) $ 15.66 $ 11.92 Diluted net income (loss) per share: Net income (loss) attributable to AGCO Corporation $ ( 424.8 ) $ 1,171.4 $ 889.6 Weighted average number of common shares outstanding 74.6 74.8 74.6 Dilutive SSARs and RSUs 0.1 0.1 0.3 Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income (loss) per share 74.7 74.9 74.9 Diluted net income (loss) per share attributable to AGCO Corporation $ ( 5.69 ) $ 15.63 $ 11.87 ____________________________________ (1) As the Company has reported a loss for 2024, all potentially dilutive securities are antidilutive, and accordingly, basic net loss per share equals diluted net loss per share. 18. 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 12). 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 2024 and 2023, respectively, the Company made a total of approximately $ 12.0 million and $ 24.6 million of additional investments in its finance joint venture in Brazil. During 2022, the Company did not make additional investments in its finance joint ventures. During 2024, 2023, and 2022, the Company received approximately $ 13.7 million, $ 28.9 million and $ 27.0 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 5). The Company 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, 2024, 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 2024, 2023 and 2022, the Company purchased approximately $ 165.9 million, $ 171.6 million and $ 148.7 million, respectively, of tractors and components from TAFE. During 2024, 2023 and 2022, the Company sold approximately $ 5.0 million, $ 3.6 million and $ 1.2 million, respectively, of parts to TAFE. In April 2024, the Company terminated all of its commercial relationships with TAFE and does not expect to incur 89 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) material purchases. The Company received dividends from TAFE of approximately $ 3.3 million, $ 2.9 million and $ 2.1 million during 2024, 2023 and 2022, respectively. 19. INCOME TAXES The sources of income (loss) before income taxes and equity in net earnings of affiliates were as follows for the years ended December 31, 2024, 2023 and 2022 (in millions): 2024 2023 2022 United States $ ( 1,314.3 ) $ ( 63.5 ) $ ( 60.2 ) Foreign 880.7 1,397.0 1,167.4 Income (loss) before income taxes and equity in net earnings of affiliates $ ( 433.6 ) $ 1,333.5 $ 1,107.2 The provision (benefit) for income taxes by location of the taxing jurisdiction for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in millions): 2024 2023 2022 Current: United States $ ( 2.3 ) $ 61.2 $ 26.0 Foreign 203.3 433.6 328.6 201.0 494.8 354.6 Deferred: United States ( 126.6 ) ( 82.8 ) ( 55.3 ) Foreign 24.0 ( 181.6 ) ( 2.7 ) ( 102.6 ) ( 264.4 ) ( 58.0 ) $ 98.4 $ 230.4 $ 296.6 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 2024, 2023 and 2022) to the provision for income taxes reflected in the Company’s Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 is as follows (in millions): 2024 2023 2022 Provision for income taxes at United States federal statutory rate $ ( 91.1 ) $ 280.0 $ 232.5 Impairment charges 108.1 — — State and local income taxes, net of federal income tax effects ( 19.8 ) ( 3.0 ) ( 2.9 ) Taxes on foreign income which differ from the United States statutory rate (1) 23.7 ( 193.9 ) 43.6 Foreign inclusion, net of foreign tax credits 42.8 13.5 4.4 Tax effect of permanent differences 13.6 ( 34.0 ) ( 4.6 ) Change in valuation allowance (1) 13.1 116.5 0.7 Change in tax contingency reserves 30.1 33.2 25.5 Research and development tax credits ( 6.4 ) ( 9.6 ) ( 6.9 ) Brazil Amnesty Program, net of United States foreign tax credit — 26.4 — Other, net (2) ( 15.7 ) 1.3 4.3 $ 98.4 $ 230.4 $ 296.6 90 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) ____________________________________ (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. (2) In recent decisions, the Brazilian courts have confirmed a favorable tax ruling regarding the taxability of certain state value added tax incentive benefits, which allowed the Company to record a $ 29.6 million reduction in the provision for income taxes during the year ended December 31, 2024. Further, in 2024, “Other, net” also includes a provision of approximately $ 12.7 million related to a noncontrolling interest. The significant components of the deferred tax assets and liabilities at December 31, 2024 and 2023 were as follows (in millions): 2024 2023 Deferred Tax Assets: Net operating loss carryforwards $ 30.3 $ 42.1 Sales incentive discounts 117.8 102.5 Inventory valuation reserves 48.8 50.0 Pension and postretirement health care benefits 15.4 17.9 Warranty and other reserves 122.0 162.8 Research and development tax credits 0.3 5.1 Foreign tax credits 36.0 33.4 Swiss tax basis adjustment 182.8 197.7 Investment in affiliates 67.5 — Other 30.6 22.7 Total gross deferred tax assets 651.5 634.2 Valuation allowance ( 147.2 ) ( 149.8 ) Total deferred tax assets 504.3 484.4 Deferred Tax Liabilities: Tax over book depreciation and amortization 62.3 102.5 Investment in affiliates — 3.9 Other 6.0 19.0 Total deferred tax liabilities 68.3 125.4 Net deferred tax assets $ 436.0 $ 359.0 Amounts recognized in Consolidated Balance Sheets: Deferred tax assets - noncurrent $ 561.0 $ 481.6 Deferred tax liabilities - noncurrent ( 125.0 ) ( 122.6 ) $ 436.0 $ 359.0 As reflected in the preceding table, the Company recorded a net deferred tax asset of $ 436.0 million and $ 359.0 million as of December 31, 2024 and 2023, respectively, and had a valuation allowance against its gross deferred tax assets of approximately $ 147.2 million and $ 149.8 million as of December 31, 2024 and 2023, respectively. The Company maintains a valuation allowance to reserve a portion of its net deferred tax assets in the United States and certain foreign jurisdictions. 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. The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and the current economic climate, as well as available tax planning strategies, and determined that all adjustments to the valuation allowance were appropriate. 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. 91 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Changes in the valuation allowance during the years ended December 31, 2024, 2023 and 2022 are summarized as follows (in millions): Additions Description Balance at Beginning of Period Acquired Businesses Charged (Credited) to Costs and Expenses (1) Deductions (2) Foreign Currency Translation Balance at End of Period Year ended December 31, 2024 Deferred tax valuation allowance $ 149.8 $ — $ 13.1 $ ( 8.7 ) $ ( 7.0 ) $ 147.2 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 ____________________________________ (1) The amounts recorded to expense in 2024 are primarily related to China and 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 2024, 2023 and 2022. (2) The deductions in 2024 are primarily related to reversal of valuation allowance from the divestiture of the majority of the Company's G&P business. The deductions in 2023 are primarily related to reversal of valuation allowance from the effective utilization of certain tax losses in the Brazil amnesty program. The Company had net operating loss carryforwards of $ 93.9 million as of December 31, 2024, with expiration dates as follows: 2025 - $ 0.7 million; 2026 - $ 0.3 million; 2027 - $ 4.0 million; 2028 and thereafter - $ 42.3 million and unlimited - $ 46.6 million. The net operating loss carryforwards of $ 93.9 million are entirely in tax jurisdictions outside of the United States. The amount of the Company’s U.S. state net operating loss carryforwards is not material. The Company paid income taxes of $ 344.0 million, $ 463.6 million and $ 304.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company recognizes income tax benefits from uncertain tax positions only when there is a more than 50% likelihood that the tax positions will be sustained upon examination by the taxing authorities based on the technical merits of the positions. At December 31, 2024 and 2023, the Company had approximately $ 9.3 million and $ 9.9 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the Company’s Consolidated Balance Sheets. At December 31, 2024 and 2023, the Company had approximately $ 378.4 million and $ 344.2 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets. The Company accrued approximately $ 3.6 million and $ 0.3 million of interest and penalties related to unrecognized tax benefits in its provision for income taxes during 2024 and 2023, respectively. At December 31, 2024 and 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 30.9 million and $ 27.9 million, respectively. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits as of and during the years ended December 31, 2024 and 2023 is as follows (in millions): 2024 2023 Gross unrecognized income tax benefits at the beginning of the year $ 351.2 $ 281.7 Additions for tax positions of the current year 55.8 67.9 Additions for tax positions of prior years 7.4 5.5 Reductions for tax positions of prior years for: Changes in judgments ( 0.5 ) 2.8 Settlements during the year — ( 15.4 ) Lapses of applicable statute of limitations ( 2.4 ) ( 2.0 ) Foreign currency translation and other ( 24.1 ) 10.7 Gross unrecognized income tax benefits at the end of the year $ 387.4 $ 351.2 92 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) At December 31, 2024 and 2023, the Company had $ 387.4 million and $ 351.2 million, respectively, of unrecognized income tax benefits, which would affect the Company’s effective tax rate if recognized. The reconciliation of gross unrecognized income tax benefits above for 2024 and 2023 excludes certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 126.4 million and $ 103.9 million, respectively. The change in certain indirect favorable effects between 2024 and 2023 includes approximately $ 30.2 million and $ 26.7 million, respectively, related to additions and reductions for tax positions of current and prior years, changes in judgments and lapses of statutes of limitations. During 2022, the Company made the determination that it will be able to utilize approximately $ 15.7 million of indirect favorable benefits in the United States related to the settlement of a foreign audit examination. In addition, the gross unrecognized income tax benefits as of December 31, 2024 and 2023 exclude certain deposits made in a foreign jurisdiction of approximately $ 25.2 million, net of $ 18.5 million refunds received, and $ 26.9 million, net of $ 19.7 million refunds received, 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. The Company and its subsidiaries are routinely examined by tax authorities in these jurisdictions. As of December 31, 2024, a number of income tax examinations in foreign jurisdictions, as well as the United States, were ongoing. It is possible that certain of these ongoing examinations may be resolved within 12 months. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized income tax benefits balance may materially change within the next 12 months. In certain foreign jurisdictions, there are either statutory expirations or the Company’s settlement expectations such that approximately $ 9.3 million could be concluded within the next 12 months. Although there are ongoing examinations in various federal and state jurisdictions, the 2019 through 2024 tax years generally remain subject to examination in the United States by applicable authorities. In the Company’s significant foreign jurisdictions, primarily the United Kingdom, France, Germany, Switzerland, Finland and Brazil, the 2019 through 2024 tax years generally remain subject to examination by their respective tax authorities. 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 would have been approximately 131.5 million Brazilian reais (or approximately $ 27.1 million) and subject to significant interest and penalties. In the first quarter of 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 was not considered an admission of guilt and allowed for outstanding contested cases to be settled at a significant monetary discount. The Company contested the disallowance and had been historically advised by its legal and tax advisors that its position was allowable under the tax laws of Brazil. 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” net of associated U.S. income tax credits of approximately $ 8.4 million and completed its installment payments related to its enrollment in the program during the year ended December 31, 2023. 20. PENSION AND POSTRETIREMENT BENEFIT PLANS The Company sponsors defined benefit pension plans covering certain employees, principally in the United Kingdom, Germany, Switzerland, Finland, France, Norway and Argentina. The Company also provides certain postretirement health care and life insurance benefits for certain employees, principally in the United States and Brazil. The Company merged its U.S. qualified defined benefit pension plans for hourly and salaried employees into one plan (the "Plan") on December 31, 2023 and finalized the termination of the Plan in 2024. In connection with the termination process, the Company offered a lump sum benefit payout option to Plan participants, and the remaining assets of the Plan were used to purchase a group annuity contract that transferred the remaining plan liabilities to an insurance carrier. The termination process was finalized by December 31, 2024 and the settlement resulted in the recognition of approximately $ 18.5 million within “Other expense, net” within the Company's Consolidated Statements of Operations representing the amounts previously recognized in accumulated other comprehensive loss. As of December 31, 2024, there were no remaining balances on the balance sheet related to the Plan. The Company also maintains an Executive Nonqualified Pension Plan (“ENPP”) in the U.S. that provides certain senior executives with retirement income for a period of 15 years or up to a lifetime annuity, if certain requirements are met. Benefits under the ENPP vest if the participant has attained age 50 and has at least ten years of service (including five years 93 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) as a participant in the ENPP), but are not payable until the participant reaches age 65 . The lifetime annuity benefit generally is available only to vested participants who retire on or after reaching age 65 and was eliminated during 2021 for participants reaching age 65 subsequent to December 31, 2022. The ENPP is an unfunded, nonqualified defined benefit pension plan. The ENPP is frozen as of December 31, 2024 against future benefit accruals. Net annual pension costs for the years ended December 31, 2024, 2023 and 2022 for the Company’s defined benefit pension plans and ENPP are set forth below (in millions): Pension benefits 2024 2023 2022 Service cost $ 8.2 $ 9.6 $ 12.8 Interest cost 27.8 29.3 14.8 Expected return on plan assets ( 30.8 ) ( 30.4 ) ( 16.9 ) Amortization of net actuarial losses 1.4 9.4 8.7 Amortization of prior service cost 10.5 1.5 0.1 Net (gain) loss recognized due to settlement 18.8 0.4 ( 0.4 ) Curtailment (gain) loss ( 0.2 ) — — Net annual pension cost $ 35.7 $ 19.8 $ 19.1 The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Consolidated Statements of Operations. The weighted average assumptions used to determine the net annual pension costs for the Company’s defined benefit pension plans and ENPP for the years ended December 31, 2024, 2023 and 2022 are as follows: 2024 2023 2022 All plans: Weighted average discount rate 4.5 % 4.9 % 1.9 % Weighted average expected long-term rate of return on plan assets 5.5 % 5.5 % 2.3 % Rate of increase in future compensation 1.7 %- 5.0 % 1.8 %- 5.0 % 1.5 %- 5.0 % U.S.-based plans: Weighted average discount rate 5.3 % 5.7 % 3.1 % Weighted average expected long-term rate of return on plan assets (1) 5.8 % 5.8 % 4.3 % Rate of increase in future compensation (2) 5.0 % 5.0 % 5.0 % ___________________________________ (1) Applicable for U.S. funded, qualified plan. (2) Applicable for U.S. unfunded, nonqualified plan. Net annual postretirement benefit costs, and the weighted average discount rate used to determine them, for the years ended December 31, 2024, 2023 and 2022 are set forth below (in millions, except percentages): Postretirement benefits 2024 2023 2022 Service cost $ — $ 0.1 $ 0.1 Interest cost 1.5 1.3 0.9 Amortization of prior service cost 0.1 0.2 0.1 Net annual postretirement benefit cost $ 1.6 $ 1.6 $ 1.1 Weighted average discount rate 6.7 % 6.6 % 4.1 % 94 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following tables set forth reconciliations of the changes in benefit obligation, plan assets and funded status as of December 31, 2024 and 2023 (in millions): Pension and ENPP Benefits Postretirement Benefits Change in benefit obligation 2024 2023 2024 2023 Benefit obligation at beginning of year $ 647.0 $ 611.6 $ 23.0 $ 21.2 Service cost 8.2 9.6 — 0.1 Interest cost 27.8 29.3 1.5 1.3 Plan participants’ contributions 1.3 1.3 — — Actuarial losses (gains) ( 42.3 ) 21.6 ( 3.1 ) 1.7 Amendments ( 0.3 ) 0.1 1.6 — Settlements ( 34.0 ) ( 4.9 ) — — Benefits paid ( 44.4 ) ( 46.1 ) ( 1.9 ) ( 1.8 ) Foreign currency exchange rate changes ( 12.2 ) 24.5 ( 1.4 ) 0.5 Curtailment ( 1.0 ) — — — Benefit obligation at end of year $ 550.1 $ 647.0 $ 19.7 $ 23.0 Pension and ENPP Benefits Postretirement Benefits Change in plan assets 2024 2023 2024 2023 Fair value of plan assets at beginning of year $ 572.0 $ 528.7 $ — $ — Actual return on plan assets ( 18.2 ) 31.2 — — Employer contributions 26.9 35.1 1.8 1.8 Plan participants’ contributions 1.3 1.3 — — Benefits paid ( 44.4 ) ( 46.1 ) ( 1.9 ) ( 1.8 ) Settlements ( 33.9 ) ( 4.9 ) — — Foreign currency exchange rate changes ( 9.7 ) 26.7 0.1 — Fair value of plan assets at end of year $ 494.0 $ 572.0 $ — $ — Funded status $ ( 56.0 ) $ ( 75.0 ) $ ( 19.7 ) $ ( 23.0 ) Amounts recognized in Consolidated Balance Sheets: Other assets (noncurrent) $ 92.9 $ 85.0 $ — $ — Other current liabilities ( 7.5 ) ( 7.4 ) ( 1.6 ) ( 1.6 ) Accrued expenses ( 3.7 ) ( 4.1 ) — — Pension and postretirement health care benefits (noncurrent) ( 137.7 ) ( 148.5 ) ( 18.1 ) ( 21.4 ) Net amount recognized $ ( 56.0 ) $ ( 75.0 ) $ ( 19.7 ) $ ( 23.0 ) 95 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s ENPP and defined pension and postretirement benefit plans during the years ended December 31, 2024, 2023 and 2022 (in millions): Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount Accumulated other comprehensive loss as of December 31, 2021 $ ( 302.4 ) $ ( 72.0 ) $ ( 230.4 ) Prior service cost arising during the year ( 25.5 ) ( 6.4 ) ( 19.1 ) Net gain recognized due to settlement ( 0.4 ) — ( 0.4 ) Net actuarial gain arising during the year 15.0 2.7 12.3 Amortization of prior service cost 0.2 0.2 — Amortization of net actuarial losses 8.7 2.3 6.4 Accumulated other comprehensive loss as of December 31, 2022 $ ( 304.4 ) $ ( 73.2 ) $ ( 231.2 ) Net loss recognized due to settlement 0.4 — 0.4 Net actuarial loss arising during the year ( 21.5 ) ( 5.4 ) ( 16.1 ) Amortization of prior service cost 1.7 0.4 1.3 Amortization of net actuarial losses 9.4 2.4 7.0 Accumulated other comprehensive loss as of December 31, 2023 $ ( 314.4 ) $ ( 75.8 ) $ ( 238.6 ) Prior service cost arising during the year ( 1.4 ) ( 0.5 ) ( 0.9 ) Net loss recognized due to settlement 18.8 4.8 14.0 Net actuarial loss arising during the year ( 2.7 ) ( 0.5 ) ( 2.2 ) Amortization of prior service cost 1.5 0.4 1.1 Amortization of net actuarial losses 10.5 2.7 7.8 Accumulated other comprehensive loss as of December 31, 2024 $ ( 287.7 ) $ ( 68.9 ) $ ( 218.8 ) The unrecognized net actuarial losses included in accumulated other comprehensive loss related to the Company’s defined benefit pension plans and ENPP as of December 31, 2024 and 2023 are set forth below (in millions): 2024 2023 Unrecognized net actuarial losses $ 256.7 $ 280.2 The decrease in unrecognized net actuarial losses between years is primarily due to the termination of the U.S. qualified defined benefits plan, as well as the total net impact of the changes in the assumptions, specifically the increase in the discount rate. 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. For some of the Company’s defined benefit pension plans, these losses, to the extent they exceed 10% of the greater of the plan’s liabilities or the fair value of assets (“the gain/loss corridor”), will be amortized on a straight-line basis over the periods discussed as follows. For the Company’s U.K. defined benefit pension plan, the population covered is predominantly inactive participants, and losses related to those plans, to the extent they exceed the gain/loss corridor, will be amortized over the average remaining lives of those participants while covered by the respective plan. For the Company’s ENPP, the population is predominantly active participants, and losses related to the plan will be amortized over the average future working lifetime of the active participants expected to receive benefits. As of December 31, 2024, the average amortization periods were as follows: ENPP U.K. Plan Average amortization period of losses related to defined benefit pension plans 6 years 16 years 96 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following table summarizes the unrecognized prior service cost related to the Company’s defined benefit pension plans as of December 31, 2024 and 2023 (in millions): 2024 2023 Unrecognized prior service cost $ 29.8 $ 31.4 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 following table summarizes the unrecognized net actuarial gains included in the Company’s accumulated other comprehensive loss related to the Company’s U.S. and Brazilian postretirement health care benefit plans as of December 31, 2024 and 2023 (in millions): 2024 2023 Unrecognized net actuarial gains (1) $ ( 3.3 ) $ ( 0.2 ) ___________________________________ (1) Includes a gain of approximately $ 1.3 million and $ 1.2 million, respectively, related to the Company’s U.S. postretirement benefit plans. The change in unrecognized net actuarial gains related to the Company’s U.S. and Brazilian postretirement benefit plans is primarily resulting from the gain in relation to the change in the projected benefit obligation as a result of the favorable impact of the underlying assumptions as of December 31, 2024. The unrecognized net actuarial gains or losses will be impacted in future periods by discount rate changes, actual demographic experience, actual health care inflation and certain other factors. These gains or losses, to the extent they exceed the gain/loss corridor, will be amortized on a straight-line basis over the average remaining service period of active employees expected to receive benefits, or the average remaining lives of inactive participants, covered under the postretirement benefit plans. As of December 31, 2024, the gains or losses did not exceed the corridor for the Company’s U.S. postretirement benefit plan and therefore, there will be no amortization of unrecognized gains or losses during 2025. As of December 31, 2024 and 2023, the net prior service cost related to the Company’s Brazilian postretirement health care benefit plans was as follows (in millions): 2024 2023 Net prior service cost $ 4.5 $ 3.0 The following table summarizes the fair value of plan assets, aggregate projected benefit obligation and accumulated benefit obligation as of December 31, 2024 and 2023 for defined benefit pension plans, ENPP and other postretirement plans with accumulated benefit obligations in excess of plan assets (in millions): 2024 2023 All plans: Fair value of plan assets $ 30.7 $ 37.3 Projected benefit obligation 199.3 220.2 Accumulated benefit obligation 189.8 209.3 U.S.-based plans and ENPP: Fair value of plan assets $ — $ — Projected benefit obligation 102.5 104.9 Accumulated benefit obligation 102.5 104.1 The amounts for 2024 and 2023 disclosed above do not include the fair value of plan assets, the projected benefit obligation or the accumulated benefit obligation related to the Company’s U.K. plan. The Company’s U.K. plan’s fair value of plan assets was in excess of the plan’s accumulated benefit obligation as of December 31, 2024 and 2023. 97 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company’s defined benefit pension obligation has been reflected in the manner in which its defined benefit plans are being administered or expected to be administered in the future. The obligation and resulting liability or asset is calculated employing both actuarial and legal assumptions. These assumptions include, but are not limited to, future inflation, the return on pension assets, discount rates, life expectancy and potential salary increases. There are also assumptions related to the manner in which individual benefit plan benefits are calculated, some of which are legal in nature and include, but are not limited to, member eligibility, years of service, and the uniformity of both guaranteed minimum pension benefits and member normal retirement ages for men and women. 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. The weighted average assumptions used to determine the benefit obligation for the Company’s defined benefit pension plans and ENPP as of December 31, 2024 and 2023 are as follows: 2024 2023 All plans: Weighted average discount rate 5.1 % 4.5 % Rate of increase in future compensation 1.5 %- 5.0 % 1.7 %- 5.0 % U.S.-based plans: Weighted average discount rate 5.8 % 5.3 % Rate of increase in future compensation (1) 5.0 % 5.0 % ____________________________________ (1) Applicable for U.S. unfunded, nonqualified plan. The weighted average discount rate used to determine the benefit obligation for the Company’s postretirement benefit plans for the years ended December 31, 2024 and 2023 was 7.2 % and 6.7 %, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company used a globally consistent methodology to set the discount rate in the countries where its largest benefit obligations exist. In the United States, the United Kingdom and the Euro Zone, the Company constructed a hypothetical bond portfolio of high-quality corporate bonds and then applied the cash flows of the Company’s benefit plans to those bond yields to derive a discount rate. The bond portfolio and plan-specific cash flows vary by country, but the methodology in which the portfolio is constructed is consistent. For measuring the expected U.S. postretirement benefit obligation at December 31, 2024, the Company assumed a 7.5 % health care cost trend rate for 2025 decreasing to 5.0 % by 2035. For measuring the expected U.S. postretirement benefit obligation at December 31, 2023, the Company assumed a 7.8 % health care cost trend rate for 2024 decreasing to 5.0 % by 2035. For measuring the Brazilian postretirement benefit plan obligation at December 31, 2024, the Company assumed a 10.2 % health care cost trend rate for 2025, decreasing to 4.5 % by 2035. For measuring the Brazilian postretirement benefit plan obligation at December 31, 2023, the Company assumed a 10.2 % health care cost trend rate for 2024, decreasing to 4.5 % by 2034. The Company currently estimates its minimum contributions and benefit payments to its U.S.-based unfunded ENPP for 2025 will aggregate to approximately $ 5.6 million. The Company currently estimates its minimum contributions for underfunded plans and benefit payments for unfunded plans for 2025 to its non-U.S.-based defined benefit pension plans will aggregate to approximately $ 8.9 million, of which approximately $ 0.2 million relates to its U.K. pension plan. The Company currently estimates its benefit payments for 2025 to its U.S.-based postretirement health care and life insurance benefit plans will aggregate to approximately $ 1.6 million and its benefit payments for 2025 to its Brazilian postretirement health care benefit plans will aggregate to less than $ 0.1 million. 98 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) During 2024, approximately $ 78.3 million of benefit payments were made related to the Company’s defined benefit pension plans and ENPP. At December 31, 2024, the aggregate expected benefit payments for the Company’s defined benefit pension plans and ENPP are as follows (in millions): 2025 $ 42.2 2026 43.3 2027 44.4 2028 42.4 2029 43.6 2030 through 2034 240.2 $ 456.1 During 2024, approximately $ 1.9 million of benefit payments were made related to the Company’s U.S. and Brazilian postretirement benefit plans. At December 31, 2024, the aggregate expected benefit payments for the Company’s U.S. and Brazilian postretirement benefit plans are as follows (in millions): 2025 $ 1.7 2026 1.7 2027 1.8 2028 1.8 2029 1.8 2030 through 2034 8.7 $ 17.5 Investment Strategy and Concentration of Risk The weighted average asset allocation of the Company’s U.S. pension benefit plans as of December 31, 2024 and 2023 are as follows: Asset Category 2024 (1) 2023 Equity securities — % — % Fixed income securities — % 89 % Other investments — % 11 % Total — % 100 % ______________________________________ (1) The U.S. defined qualified pension plan was terminated and fully settled as of December 31, 2024. As such, there are no related pension plan assets. The weighted average asset allocation of the Company’s U.K. pension benefit plans as of December 31, 2024 and 2023 are as follows: Asset Category 2024 2023 Equity securities 5 % 11 % Fixed income securities 91 % 82 % Other investments 4 % 7 % Total 100 % 100 % 99 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company categorizes its pension plan assets into one of three levels based on the assumptions used in valuing the asset. See Note 21 for a discussion of the fair value hierarchy as per the guidance in ASC 820, “Fair Value measurements” (“ASC 820”). The Company’s valuation techniques are designed to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses the following valuation methodologies to measure the fair value of its pension plan assets: • Equity Securities : Equity securities are valued on the basis of the closing price per unit on each business day as reported on the applicable exchange. Equity funds are valued using the net asset value of the fund, which is based on the fair value of the underlying securities. • Fixed Income : Fixed income securities are valued using the closing prices in the active market in which the fixed income investment trades. Fixed income funds are valued using the net asset value of the fund, which is based on the fair value of the underlying securities. • Cash : These investments primarily consist of short-term investment funds which are valued using the net asset value. • Alternative Investments : These investments are reported at fair value as determined by the general partner of the alternative investment. The “market approach” valuation technique is used to value investments in these funds. The funds typically are open-end funds as they generally offer subscription and redemption options to investors. The frequency of such subscriptions or redemptions is dictated by each fund’s governing documents. The amount of liquidity provided to investors in a particular fund generally is consistent with the liquidity and risk associated with the underlying portfolio (i.e., the more liquid the investments in the portfolio, the greater the liquidity provided to investors). Liquidity of individual funds varies based on various factors and may include “gates,” “holdbacks” and “side pockets” imposed by the manager of the fund, as well as redemption fees that may also apply. Investments in these funds typically are valued utilizing the net asset valuations provided by their underlying investment managers, general partners or administrators. The funds consider subscription and redemption rights, including any restrictions on the disposition of the interest, in its determination of the fair value. • Insurance Contracts : Insurance contracts are valued using current prevailing interest rates. The fair value of the Company’s pension assets as of December 31, 2024 is as follows (in millions): Total Level 1 Level 2 Level 3 Equity securities: Global equities $ 21.3 $ — $ 21.3 $ — Total equity securities 21.3 — 21.3 — Fixed income: Aggregate fixed income 420.5 420.5 — — Total fixed income share (1) 420.5 420.5 — — Alternative investments: Private equity fund — — — Hedge funds measured at net asset value (4) 10.0 — — — Total alternative investments (2) 10.0 — — — Miscellaneous funds (3) 32.2 — — 32.2 Cash and equivalents measured at net asset value (4) 10.0 — — — Total assets $ 494.0 $ 420.5 $ 21.3 $ 32.2 ______________________________________ (1) 68 % of “fixed income” securities are in government treasuries; 22 % are in foreign securities; 7 % are in asset or mortgage backed securities; 2 % are in investment-grade corporate bonds and 1 % are in high-yield securities. (2) 49 % of “alternative investments” are in relative value funds; 30 % are in long-short equity funds; 14 % are in event-driven funds and 7 % are in credit funds. (3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. 100 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following is a reconciliation of Level 3 assets as of December 31, 2024 (in millions): Total Alternative Investments Miscellaneous Funds Beginning balance as of December 31, 2023 $ 41.0 $ 2.2 $ 38.8 Actual return on plan assets: (a) Relating to assets still held at reporting date ( 0.6 ) — ( 0.6 ) Purchases, sales and /or settlements ( 5.9 ) ( 2.2 ) ( 3.7 ) Foreign currency exchange rate changes ( 2.3 ) — ( 2.3 ) Ending balance as of December 31, 2024 $ 32.2 $ — $ 32.2 The fair value of the Company’s pension assets as of December 31, 2023 is as follows (in millions): Total Level 1 Level 2 Level 3 Equity securities: Global equities $ 55.8 $ — $ 55.8 $ — Total equity securities 55.8 — 55.8 — Fixed income: Aggregate fixed income 437.1 437.1 — — Total fixed income share (1) 437.1 437.1 — — Alternative investments: Private equity fund 2.2 — — 2.2 Hedge funds measured at net asset value (4) 33.2 — — — Total alternative investments (2) 35.4 — — 2.2 Miscellaneous funds (3) 38.8 — — 38.8 Cash and equivalents measured at net asset value (4) 4.9 — — — Total assets $ 572.0 $ 437.1 $ 55.8 $ 41.0 ______________________________________ (1) 67 % of “fixed income” securities are in government treasuries; 27 % are in foreign securities; 4 % are in investment-grade corporate bonds; 2 % are in high-yield securities. (2) 53 % of “alternative investments” are in relative value funds; 24 % are in long-short equity funds; 8 % are in event-driven funds; 9 % are in credit funds; and 6 % are distributed in hedged and non-hedged funds. (3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland. (4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The following is a reconciliation of Level 3 assets as of December 31, 2023 (in millions): Total Alternative Investments Miscellaneous Funds Beginning balance as of December 31, 2022 $ 40.2 $ 2.4 $ 37.8 Actual return on plan assets: (a) Relating to assets still held at reporting date 2.6 ( 0.2 ) 2.8 Purchases, sales and /or settlements ( 3.0 ) — ( 3.0 ) Foreign currency exchange rate changes 1.2 — 1.2 Ending balance as of December 31, 2023 $ 41.0 $ 2.2 $ 38.8 The Company’s global pension fund strategy is to diversify investments across broad categories of equity and fixed income securities with appropriate use of alternative investment categories to minimize risk and volatility. The primary investment objective of the Company’s pension plans is to secure participant retirement benefits. As such, the key objective in the pension plans’ financial management is to promote stability and, to the extent appropriate, growth in funded status. 101 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The investment strategy for the plans’ portfolio of assets balances the requirement to generate returns with the need to control risk. The asset mix is recognized as the primary mechanism to influence the reward and risk structure of the pension fund investments in an effort to accomplish the plans’ funding objectives. The overall investment strategies and target allocations of retirement fund investments for the Company’s non-U.S. based pension plans are as follows: Non-U.S. Pension Plans (1) Overall investment strategies: (2) Assets for the near-term benefit payments 10.0 % Assets for longer-term growth 90.0 % Total 100.0 % Target allocations: Equity securities 5.0 % Fixed income securities 95.0 % Total 100.0 % _______________________________________ (1) The majority of the Company’s non-U.S. pension fund investments are related to the Company’s pension plan in the United Kingdom. (2) The overall non-U.S. pension funds invest in a broad diversification of asset types. 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 6.00 %. In arriving at the choice of an expected return assumption of 5.50 % for its U.K.-based plans for the year ending December 31, 2025, 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. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, agency mortgages, asset-backed securities and government securities. Alternative and other assets include investments in hedge fund of funds that follow diversified investment strategies. To date, the Company has not invested pension funds in its own stock and has no intention of doing so in the future. Within each asset class, careful consideration is given to balancing the portfolio among industry sectors, geographies, interest rate sensitivity, dependence on economic growth, currency and other factors affecting investment returns. The assets are managed by professional investment firms, who are bound by precise mandates and are measured against specific benchmarks. Among asset managers, consideration is given, among others, to balancing security concentration, issuer concentration, investment style and reliance on particular active investment strategies. The Company participates in a small number of multiemployer plans in the Netherlands and Sweden. The Company has assessed and determined that none of the multiemployer plans which it participates in are individually, or in the aggregate, significant to the Company’s Consolidated Financial Statements. The Company does not expect to incur a withdrawal liability or expect to significantly increase its contributions over the remainder of the multiemployer plans’ contract periods. The Company maintains separate defined contribution plans covering certain employees and executives, primarily in the United States, the United Kingdom and Brazil. Under the plans, the Company contributes a specified percentage of each eligible employee’s compensation. The Company contributed approximately $ 23.1 million, $ 21.1 million and $ 17.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. 102 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 21. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability. Estimates of fair value for financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Model-derived valuations in which one or more significant inputs are unobservable. The Company categorizes its pension plan assets into one of the three levels of the fair value hierarchy, except for those measured using the net asset value per share (or its equivalent) practical expedient. Refer to Note 20 for a discussion of the valuation methods used to measure the fair value of the Company’s pension plan assets. The Company enters into foreign currency, commodity and interest rate swap contracts. The fair values of the Company’s derivative instruments are determined using discounted cash flow valuation models. The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2. Inputs used in these discounted cash flow valuation models for derivative instruments include the applicable exchange rates, forward rates or interest rates. Such models used for option contracts also use implied volatility. Refer to Note 14 for a discussion of the Company’s derivative instruments and hedging activities. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and 2023 are summarized below (in millions): As of December 31, 2024 Level 1 Level 2 Level 3 Total Derivative assets $ — $ 46.0 $ — $ 46.0 Derivative liabilities — 14.2 — 14.2 As of December 31, 2023 Level 1 Level 2 Level 3 Total Derivative assets $ — $ 38.7 $ — $ 38.7 Derivative liabilities — 14.0 — 14.0 The carrying amounts of long-term debt under the Company’s 1.002 % EIB Senior term loan due 2025, EIB Senior term loans due 2029 and 2030 and Senior term loans due between 2025 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities. At December 31, 2024, the estimated fair value of the Company’s 0.800 % Senior notes due 2028, based on listed market values, was approximately € 545.6 million (or approximately $ 566.2 million), compared to the carrying value of € 600.0 million (or approximately $ 622.7 million). At December 31, 2024, the estimated fair value of the Company's 5.450 % Senior notes due 2027, based on listed market values, was approximately $ 403.9 million compared to the carrying value of $ 400.0 million. At December 31, 2024, the estimated fair value of the Company's 5.800 % Senior notes due 2034, based on listed market values, was approximately $ 704.7 million, compared to the carrying value of $ 700.0 million. Refer to Note 12 for additional information on the Company’s long-term debt. 103 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 22. COMMITMENTS AND CONTINGENCIES The future payments required under the Company’s significant commitments, excluding indebtedness, as of December 31, 2024 are as follows (in millions): Interest payments on indebtedness – The Company expects to make interest payments of approximately $ 118.0 million during the year ending December 31, 2025 related to indebtedness outstanding as of December 31, 2024. Indebtedness amounts reflect the principal amount of the Company’s EIB senior term loans, senior notes, senior term loans, credit facility and certain short-term borrowings, gross of any debt issuance costs. The projected amount of interest payments includes assumptions regarding the future fluctuations in interest rates, as well as borrowings under the Company’s revolving credit facility and other variable debt instruments. The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. Refer to Note 12 of the Consolidated Financial Statements for additional information regarding indebtedness. Unconditional purchase obligations – As of December 31, 2024, the Company had approximately $ 114.5 million of outstanding purchase obligations payable during the year ending December 31, 2025. The Company's unconditional purchase obligations are primarily payable within 12 months. Other short-term and long-term obligations – As of December 31, 2024, the Company has approximately $ 9.3 million of income tax liabilities related to uncertain income tax provisions connected with ongoing income tax audits in various jurisdictions that it expects to pay or settle within the next 12 months. These liabilities and related income tax audits are subject to statutory expiration. Additionally, we currently expect that we will contribute $ 2.5 million to our non-U.S. defined benefit pension and postretirement plans due during the year ending December 31, 2025. The timing and amounts of future contributions are dependent upon the funding status of the plans, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors. Refer to Notes 19 and 20 of the Consolidated Financial Statements for additional information regarding the Company’s uncertain tax positions and pension and postretirement benefit plans, respectively. These obligations comprise a majority of the Company’s other short-term and long-term obligations. Off-Balance Sheet Arrangements Guarantees At December 31, 2024, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A. (“AGCO Capital”) of approximately $ 64.0 million . Such guarantees generally obligate the Company to repay outstanding finance obligations owed to AGCO Capital if end users default on such loans to the extent that, due to non-credit risk, the end users are not able, or not required, to pay their loans, or are required to pay in a different currency than the one agreed in their loan. The Company also has obligations to guarantee indebtedness owed to certain of its finance joint ventures if dealers or end users default on loans. Losses under such guarantees historically have been insignificant. The Company believes the credit risk associated with these guarantees is not material. In addition, at December 31, 2024, the Company accrued approximately $ 12.7 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada upon expiration of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future payments under the guarantees is approximately $ 203.2 million . Other The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The Company also sells certain accounts receivable under factoring arrangements to financial institutions around the world. The Company accounts for the sale of such receivables as off-balance sheet transactions. Refer to Note 5 for discussion of the Company’s accounts receivable sales agreements. Contingencies During 2017, the Company purchased Precision Planting, which provides precision agricultural technology solutions. In 2018, Deere & Company (“Deere”) filed separate complaints in the U.S. District Court of Delaware against the Company and Precision Planting alleging that certain products of those entities infringed certain patents of Deere. The two complaints 104 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) subsequently were consolidated into a single case, Case No. 1:18-cv-00827-CFC. In July 2022, the case was tried before a jury, which determined that the Company and Precision Planting had not infringed the Deere patents. Following customary post-trial procedures, the Court entered a judgement in the Company’s favor, and Deere appealed the judgment to the U.S. Court of Appeals for the Federal Circuit. On January 24, 2025, the Court ruled in favor of the Company and Precision Planting. The case remains subject to the right of Deere to file for a writ of certiorari from the U.S. Supreme Court. The Company has an indemnity right under the purchase agreement related to the acquisition of Precision Planting from its previous owner. Pursuant to that right, the previous owner of Precision Planting currently is responsible for the litigation costs associated with the complaint and is obligated to reimburse AGCO for some or all of the damages in the event of an adverse outcome in the litigation. The Company is a party to various other legal claims and actions incidental to its business. The Company believes that none of these claims or actions, either individually or in the aggregate, is material to its business or financial statements as a whole, including its results of operations and financial condition. 105 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 23. LEASES Total lease assets and liabilities at December 31, 2024 and 2023 were as follows (in millions): Lease Assets Classification As of December 31, 2024 As of December 31, 2023 Operating ROU assets Right-of-use lease assets $ 168.9 $ 176.2 Finance lease assets Property, plant and equipment, net (1) 6.1 6.5 Total lease assets $ 175.0 $ 182.7 Lease Liabilities Classification As of December 31, 2024 As of December 31, 2023 Current: Operating Accrued expenses $ 45.0 $ 45.4 Finance Other current liabilities 0.5 0.5 Noncurrent: Operating Operating lease liabilities 127.5 134.4 Finance Other noncurrent liabilities 5.1 5.4 Total lease liabilities $ 178.1 $ 185.7 ____________________________________ (1) Finance lease assets are recorded net of accumulated depreciation of $ 2.8 million and $ 3.1 million as of December 31, 2024 and 2023, respectively. Total lease costs for 2024 and 2023 are set forth below (in millions): Classification Year Ended December 31, 2024 Year Ended December 31, 2023 Operating lease cost Selling, general and administrative expenses $ 59.6 $ 57.2 Variable lease cost Selling, general and administrative expenses 4.8 2.3 Short-term lease cost Selling, general and administrative expenses 23.4 24.1 Finance lease cost: Amortization of lease assets Depreciation expense (1) 0.5 0.7 Interest on lease liabilities Interest expense, net 0.2 0.2 Total lease cost $ 88.5 $ 84.5 ____________________________________ (1) Depreciation expense was included in both “Cost of goods sold” and “Selling, general and administrative expenses” within the Company's Consolidated Statements of Operations. 106 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2024 were as follows (in millions): December 31, 2024 Operating Leases (1) Finance Leases 2025 $ 53.3 $ 0.7 2026 43.9 0.5 2027 29.7 0.4 2028 22.6 0.3 2029 15.2 0.2 Thereafter 42.2 5.5 Total lease payments 206.9 7.6 Less: imputed interest (2) ( 34.4 ) ( 2.0 ) Present value of lease liabilities $ 172.5 $ 5.6 ____________________________________ (1) Operating lease payments include options to extend or terminate at the Company's sole discretion, which are included in the determination of lease term when they are reasonably certain to be exercised. (2) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available. Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2023 were as follows (in millions): December 31, 2023 Operating Leases (1) Finance Leases 2024 $ 52.8 $ 0.7 2025 43.0 0.6 2026 32.6 0.4 2027 19.7 0.3 2028 14.7 0.1 Thereafter 46.5 5.8 Total lease payments 209.3 7.9 Less: imputed interest (2) ( 29.5 ) ( 2.0 ) Present value of lease liabilities $ 179.8 $ 5.9 ____________________________________ (1) Operating lease payments include options to extend or terminate at the Company's sole discretion, which are included in the determination of lease term when they are reasonably certain to be exercised. (2) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available. 107 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following table summarizes the weighted-average remaining lease term and weighted-average discount rate: As of December 31, 2024 As of December 31, 2023 Weighted-average remaining lease term: Operating leases 6 years 6 years Finance leases 16 years 17 years Weighted-average discount rate: Operating leases 6.4 % 5.5 % Finance leases 2.8 % 2.7 % The following table summarizes the supplemental cash flow information for 2024 and 2023 (in millions): Year Ended December 31, 2024 Year Ended December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 59.5 $ 57.0 Operating cash flows from finance leases 0.1 0.1 Financing cash flows from finance leases 1.0 0.9 Leased assets obtained in exchange for lease obligations: Operating leases $ 61.9 $ 54.8 Finance leases 0.2 1.1 108 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 24. REVENUE Contract Liabilities Contract liabilities relate to the following: (1) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to extended warranty and maintenance contracts and where the performance obligation is satisfied over time, (2) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to precision agriculture technology services and where the performance obligation is satisfied over time and (3) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to certain grain storage and protein production systems and where the performance obligation is satisfied over time. Significant changes in the balance of contract liabilities for the years ended December 31, 2024 and 2023 were as follows (in millions): Year Ended December 31, 2024 Year Ended December 31, 2023 Balance at beginning of period $ 310.7 $ 239.0 Acquisitions 21.0 — Advance consideration received 207.2 228.8 Revenue recognized during the period for extended warranty contracts, maintenance services and technology services ( 156.6 ) ( 110.6 ) Revenue recognized during the period related to grain storage and protein production systems ( 16.6 ) ( 53.7 ) Divestiture ( 10.9 ) — Foreign currency translation ( 13.3 ) 7.2 Balance as of December 31 $ 341.5 $ 310.7 The contract liabilities are classified as either "Accrued Expenses" or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets. In 2024, the Company recognized approximately $ 139.2 million of revenue that was recorded as a contract liability at the beginning of 2024. In 2023, the Company recognized approximately $ 132.2 million of revenue that was recorded as a contract liability at the beginning of 2023. Remaining Performance Obligations The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2024 are $ 133.3 million in 2025, $ 102.0 million in 2026, $ 58.9 million in 2027, $ 27.7 million in 2028 and $ 7.3 million thereafter, and relate primarily to extended warranty contracts. The Company applied the practical expedient in ASU 2014-09 and has not disclosed information about remaining performance obligations that have original expected durations of 12 months or less. 109 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Disaggregated Revenue Net sales for the year ended December 31, 2024 disaggregated by primary geographical markets and major products consisted of the following (in millions): North America South America Europe/ Middle East Asia/ Pacific/Africa Consolidated Primary geographical markets: United States $ 2,228.9 $ — $ — $ — $ 2,228.9 Canada 488.6 — — — 488.6 Germany — — 1,733.3 — 1,733.3 France — — 1,383.5 — 1,383.5 United Kingdom and Ireland — — 540.4 — 540.4 Finland and Scandinavia — — 778.8 — 778.8 Italy — — 386.6 — 386.6 Other Europe — — 1,557.1 — 1,557.1 Brazil — 963.7 — — 963.7 Other South America — 338.6 — — 338.6 Middle East and Algeria — — 433.2 — 433.2 Africa — — — 108.6 108.6 Asia — — — 258.9 258.9 Australia and New Zealand — — — 315.3 315.3 Mexico, Central America and Caribbean 132.8 13.6 — — 146.4 $ 2,850.3 $ 1,315.9 $ 6,812.9 $ 682.8 $ 11,661.9 Major products: Tractors $ 922.6 $ 781.2 $ 4,965.3 $ 390.2 $ 7,059.3 Replacement parts 409.5 159.4 1,156.5 102.4 1,827.8 Grain storage and protein production systems 552.0 107.4 100.6 72.5 832.5 Combines, application equipment and other machinery 966.2 267.9 590.5 117.7 1,942.3 $ 2,850.3 $ 1,315.9 $ 6,812.9 $ 682.8 $ 11,661.9 110 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net sales for the year ended December 31, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions): North America South America Europe/ Middle East Asia/ Pacific/Africa Consolidated Primary geographical markets: United States $ 2,961.5 $ — $ — $ — $ 2,961.5 Canada 637.9 — — — 637.9 Germany — — 1,749.5 — 1,749.5 France — — 1,494.3 — 1,494.3 United Kingdom and Ireland — — 703.1 — 703.1 Finland and Scandinavia — — 837.3 — 837.3 Italy — — 457.1 — 457.1 Other Europe — — 1,871.5 — 1,871.5 Brazil — 1,860.3 — — 1,860.3 Other South America — 358.1 — — 358.1 Middle East and Algeria — — 427.7 — 427.7 Africa — — — 144.3 144.3 Asia — — — 362.7 362.7 Australia and New Zealand — — — 378.0 378.0 Mexico, Central America and Caribbean 153.3 15.8 — — 169.1 $ 3,752.7 $ 2,234.2 $ 7,540.5 $ 885.0 $ 14,412.4 Major products: Tractors $ 1,402.3 $ 1,288.4 $ 5,532.9 $ 487.4 $ 8,711.0 Replacement parts 421.0 167.5 1,124.7 102.8 1,816.0 Grain storage and protein production systems 614.5 155.9 155.3 136.9 1,062.6 Combines, application equipment and other machinery 1,314.9 622.4 727.6 157.9 2,822.8 $ 3,752.7 $ 2,234.2 $ 7,540.5 $ 885.0 $ 14,412.4 111 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Net sales for the year ended December 31, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions): North America South America (1) Europe/ Middle East Asia/ Pacific/Africa Consolidated (1) Primary geographical markets: United States $ 2,546.9 $ — $ — $ — $ 2,546.9 Canada 490.2 — — — 490.2 Germany — — 1,394.9 — 1,394.9 France — — 1,220.1 — 1,220.1 United Kingdom and Ireland — — 664.1 — 664.1 Finland and Scandinavia — — 838.8 — 838.8 Italy — — 421.7 — 421.7 Other Europe — — 1,691.5 — 1,691.5 Brazil — 1,748.8 — — 1,748.8 Other South America — 358.0 — — 358.0 Middle East and Algeria — — 216.2 — 216.2 Africa — — — 157.0 157.0 Asia — — — 384.2 384.2 Australia and New Zealand — — — 366.2 366.2 Mexico, Central America and Caribbean 138.0 14.9 — — 152.9 $ 3,175.1 $ 2,121.6 $ 6,447.3 $ 907.4 $ 12,651.4 Major products: Tractors $ 1,191.1 $ 1,147.2 $ 4,607.2 $ 478.6 $ 7,424.1 Replacement parts 405.6 154.5 1,021.5 105.6 1,687.2 Grain storage and protein production systems 585.9 188.3 172.3 155.4 1,101.9 Combines, application equipment and other machinery 992.5 631.7 646.3 167.8 2,438.3 $ 3,175.1 $ 2,121.6 $ 6,447.3 $ 907.4 $ 12,651.4 ____________________________________ (1) Rounding may impact the summation of amounts. 112 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 25. SEGMENT REPORTING The Company has four operating segments which are also its reportable segments which consist of the North America, South America, Europe/Middle East and Asia/Pacific/Africa regions. The Company’s reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology. The Company’s Chief Operating Decision Maker (“CODM”), Eric P. Hansotia, Chairman of the Board, President and Chief Executive Officer, evaluates segment performance primarily based on income from operations. The CODM utilizes income from operations to evaluate each segment’s performance including the allocation of resources. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations for one segment may not be comparable to another segment. Segment results for the years ended December 31, 2024, 2023 and 2022 based on the Company’s reportable segments are as follows (in millions): Years Ended December 31, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments 2024 Net sales $ 2,850.3 $ 1,315.9 $ 6,812.9 $ 682.8 $ 11,661.9 Cost of goods sold 2,150.3 1,052.6 5,021.7 538.2 8,762.8 Selling, general and administrative expenses 378.7 111.5 578.4 98.9 1,167.5 Engineering expenses 145.5 47.4 287.1 13.0 493.0 Income from operations $ 175.8 $ 104.4 $ 925.7 $ 32.7 $ 1,238.6 Depreciation $ 63.1 $ 35.1 $ 137.9 $ 15.1 $ 251.2 Assets 1,527.9 946.9 2,841.4 697.7 6,013.9 Capital expenditures 66.2 44.7 278.8 3.6 393.3 2023 Net sales $ 3,752.7 $ 2,234.2 $ 7,540.5 $ 885.0 $ 14,412.4 Cost of goods sold 2,788.6 1,629.9 5,514.0 702.5 10,635.0 Selling, general and administrative expenses 353.5 162.6 598.0 90.9 1,205.0 Engineering expenses 151.3 55.3 327.9 14.3 548.8 Income from operations $ 459.3 $ 386.4 $ 1,100.6 $ 77.3 $ 2,023.6 Depreciation $ 62.3 $ 35.5 $ 115.6 $ 17.0 $ 230.4 Assets 1,883.2 1,394.9 3,017.4 875.2 7,170.7 Capital expenditures 122.6 75.8 315.4 4.3 518.1 2022 Net sales $ 3,175.1 $ 2,121.6 $ 6,447.3 $ 907.4 $ 12,651.4 Cost of goods sold 2,462.8 1,590.1 4,904.8 692.4 9,650.1 Selling, general and administrative expenses 305.3 121.9 492.4 83.8 1,003.4 Engineering expenses 128.2 35.7 266.0 14.3 444.2 Income from operations $ 278.8 $ 373.9 $ 784.1 $ 116.9 $ 1,553.7 Depreciation $ 60.5 $ 29.4 $ 104.7 $ 14.9 $ 209.5 Assets 1,790.3 1,259.8 2,475.6 650.5 6,176.2 Capital expenditures 119.6 54.4 207.4 6.9 388.3 113 Table of Contents AGCO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) A reconciliation from the segment information to the consolidated balances for income (loss) from operations and total assets is set forth below (in millions): 2024 2023 2022 Segment income from operations $ 1,238.6 $ 2,023.6 $ 1,553.7 Corporate expenses ( 212.3 ) ( 204.9 ) ( 153.4 ) Amortization of intangibles ( 81.0 ) ( 57.7 ) ( 60.1 ) Stock compensation expense ( 17.9 ) ( 44.6 ) ( 32.7 ) Impairment charges ( 369.5 ) ( 4.1 ) ( 36.0 ) Restructuring and business optimization expenses ( 172.7 ) ( 11.9 ) ( 6.1 ) Loss on sale of business ( 507.3 ) — — Consolidated income (loss) from operations $ ( 122.1 ) $ 1,700.4 $ 1,265.4 Segment assets $ 6,013.9 $ 7,170.7 $ 6,176.2 Cash and cash equivalents 612.7 595.5 789.5 Investments in affiliates 519.6 512.7 436.9 Deferred tax assets, other current and noncurrent assets 1,495.1 1,500.1 1,025.9 Intangible assets, net 728.9 308.8 364.4 Goodwill 1,820.4 1,333.4 1,310.8 Consolidated total assets $ 11,190.6 $ 11,421.2 $ 10,103.7 Property, plant and equipment, right-of-use lease assets and amortizable intangible assets by country as of December 31, 2024 and 2023 was as follows (in millions): 2024 2023 United States $ 945.8 $ 587.3 Germany 658.4 587.7 Brazil 200.6 271.2 Finland 282.2 232.3 France 163.8 143.2 Italy 86.0 109.4 China 59.1 68.8 Denmark 5.2 66.2 Other 231.5 253.9 $ 2,632.6 $ 2,320.0 114 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.