Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
AGCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions, except share amounts)
March 31, 2025 December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents $ 562.6 $ 612.7
Accounts and notes receivable, net 1,235.3 1,267.4
Inventories, net 2,958.0 2,731.3
Other current assets 533.3 526.6
Total current assets 5,289.2 5,138.0
Property, plant and equipment, net 1,868.7 1,818.6
Right-of-use lease assets 178.7 168.9
Investments in affiliates 550.5 519.6
Deferred tax assets 582.6 561.0
Other assets 449.4 435.2
Intangible assets, net 718.4 728.9
Goodwill 1,843.3 1,820.4
Total assets $ 11,480.8 $ 11,190.6
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Borrowings due within one year $ 182.1 $ 415.2
Accounts payable 1,008.7 813.0
Accrued expenses 2,147.8 2,469.6
Other current liabilities 122.3 128.2
Total current liabilities 3,460.9 3,826.0
Long-term debt, less current portion and debt issuance costs 2,757.5 2,233.3
Operating lease liabilities 134.1 127.5
Pension and postretirement health care benefits 157.9 155.6
Deferred tax liabilities 130.9 125.0
Other noncurrent liabilities 730.3 680.3
Total liabilities 7,371.6 7,147.7
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests 299.8 300.1
Stockholders’ Equity:
Preferred stock; $ 0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding in 2025 and 2024
— —
Common stock; $ 0.01 par value, 150,000,000 shares authorized, 74,581,953 and 74,420,952 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively
0.7 0.7
Additional paid-in capital 0.7 —
Retained earnings 5,629.6 5,645.0
Accumulated other comprehensive loss ( 1,821.6 ) ( 1,902.9 )
Total stockholders’ equity 3,809.4 3,742.8
Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 11,480.8 $ 11,190.6
See accompanying notes to condensed consolidated financial statements.
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AGCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
Three Months Ended March 31,
2025 2024
Net sales $ 2,050.5 $ 2,928.7
Cost of goods sold 1,529.9 2,158.9
Gross profit 520.6 769.8
Operating expenses:
Selling, general and administrative expenses 325.8 350.4
Engineering expenses
116.0 130.9
Amortization of intangibles
15.3 13.9
Impairment charges 1.1 —
Restructuring and business optimization expenses
13.0 1.0
Income from operations 49.4 273.6
Interest expense, net
18.5 1.9
Other expense, net
32.3 50.8
Income (loss) before income taxes and equity in net earnings of affiliates
( 1.4 ) 220.9
Income tax provision
2.0 69.1
Income (loss) before equity in net earnings of affiliates
( 3.4 ) 151.8
Equity in net earnings of affiliates
12.1 16.2
Net income 8.7 168.0
Net loss attributable to noncontrolling interests 1.8 —
Net income attributable to AGCO Corporation
$ 10.5 $ 168.0
Net income per common share attributable to AGCO Corporation:
Basic
$ 0.14 $ 2.25
Diluted
$ 0.14 $ 2.25
Cash dividends declared and paid per common share $ 0.29 $ 0.29
Weighted average number of common and common equivalent shares outstanding:
Basic
74.6 74.6
Diluted
74.7 74.7
See accompanying notes to condensed consolidated financial statements.
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AGCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited and in millions)
Three Months Ended March 31,
2025 2024
Net income
$ 8.7 $ 168.0
Other comprehensive income (loss):
Foreign currency translation adjustments 82.2 ( 52.0 )
Defined pension and postretirement benefit plans, net of tax
1.9 1.7
Deferred gains and losses on derivatives, net of tax ( 1.3 ) 6.9
Other comprehensive income (loss)
82.8 ( 43.4 )
Comprehensive income
91.5 124.6
Comprehensive loss attributable to noncontrolling interests
0.3 —
Comprehensive income attributable to AGCO Corporation
$ 91.8 $ 124.6
See accompanying notes to condensed consolidated financial statements.
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AGCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
Three Months Ended March 31,
2025 2024
Cash flows from operating activities:
Net income
$ 8.7 $ 168.0
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 60.5 63.3
Amortization of intangibles 15.3 13.9
Stock compensation expense 7.3 8.4
Impairment charges 1.1 —
Equity in net earnings of affiliates, net of cash received ( 12.1 ) ( 16.2 )
Deferred income tax benefit
( 27.3 ) ( 7.3 )
Other 6.6 17.7
Changes in operating assets and liabilities:
Accounts and notes receivable, net 44.7 24.1
Inventories, net ( 149.4 ) ( 420.1 )
Other current and noncurrent assets 2.5 16.8
Accounts payable 177.9 74.2
Accrued expenses ( 384.9 ) ( 358.2 )
Other current and noncurrent liabilities 36.9 45.4
Total adjustments ( 220.9 ) ( 538.0 )
Net cash used in operating activities
( 212.2 ) ( 370.0 )
Cash flows from investing activities:
Purchases of property, plant and equipment ( 48.2 ) ( 95.0 )
Proceeds from sale of property, plant and equipment 1.1 0.2
Investments in unconsolidated affiliates, net
( 0.1 ) —
Other ( 4.1 ) —
Net cash used in investing activities ( 51.3 ) ( 94.8 )
Cash flows from financing activities:
Proceeds from indebtedness 531.2 2,380.6
Repayments of indebtedness ( 297.0 ) ( 0.4 )
Payment of dividends to stockholders ( 21.6 ) ( 21.6 )
Payment of minimum tax withholdings on stock compensation ( 7.4 ) ( 9.7 )
Payment of debt issuance costs — ( 11.9 )
Net cash provided by financing activities 205.2 2,337.0
Effects of exchange rate changes on cash, cash equivalents and restricted cash 8.2 ( 11.9 )
Increase (decrease) in cash, cash equivalents and restricted cash
( 50.1 ) 1,860.3
Cash, cash equivalents and restricted cash, beginning of period 612.7 595.5
Cash, cash equivalents and restricted cash, end of period
$ 562.6 $ 2,455.8
See accompanying notes to condensed consolidated financial statements.
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AGCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements of AGCO Corporation and its subsidiaries (the “Company” or “AGCO”) included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the Company’s financial position, results of operations, comprehensive income and cash flows at the dates and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Results for interim periods are not necessarily indicative of the results for the year. Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation.
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 Condensed Consolidated Statements of Operations. For the three months ended and as of March 31, 2025, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 67.9 million and total assets of approximately 6.6 billion Turkish lira (or approximately $ 173.1 million). The monetary assets and liabilities denominated in the Turkish lira were approximately 4.7 billion Turkish lira (or approximately $ 125.2 million) and approximately 3.1 billion Turkish lira (or approximately $ 81.9 million), respectively, as of March 31, 2025. The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of March 31, 2025.
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 from certain capital market operations, usually effected to obtain United States dollars, has 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. For the three months ended and as of March 31, 2025, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 39.3 million and total assets of approximately 289.0 billion pesos (or approximately $ 268.8 million). The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 128.8 billion pesos (or approximately $ 119.8 million), inclusive of approximately 87.0 billion pesos (or approximately $ 80.9 million) in cash and cash equivalents, as of March 31, 2025. The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 29.1 billion pesos (or approximately $ 27.1 million) as of March 31, 2025. The monetary assets and liabilities were remeasured into United States dollar based on exchange rates as of March 31, 2025. The Company's finance joint venture in Argentina, AGCO Capital Argentina S.A. (“AGCO Capital”), had net monetary assets denominated in pesos at the official government rate of approximately 7.9 billion pesos (or approximately $ 7.3 million) as of March 31, 2025. All gains and losses resulting from AGCO Capital's remeasurement of its monetary assets and liabilities are reported as part of AGCO Capital's net income, our share of which is included in “Equity in net earnings of affiliates” within our Condensed Consolidated Statements of Operations.
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.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company plans to adopt this standard as of December 31, 2025 and 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 9 for further information. AGCO began consolidating PTx Trimble within its consolidated financial statements on April 1, 2024.
The Company accounted 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. 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 U.S. 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 Asia/Pacific/Africa operating segments.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 was 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 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
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 Condensed 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
Tradename 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 period ending March 31, 2024.
Three Months Ended March 31,
2024
Unaudited Consolidated Pro Forma Results
Net sales $ 3,012.1
Net income attributable to AGCO Corporation
156.4
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.
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 Company received net proceeds of $ 630.7 million on the transaction date, which is subject to the finalization of preliminary working capital and other adjustments, and recognized a loss on the sale of business of $ 507.3 million. 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 9 for further information.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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
4. 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 these accounts receivable sales agreements that remain outstanding as of March 31, 2025 and December 31, 2024 was approximately $ 2.1 billion and $ 2.3 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 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 Condensed 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 March 31, 2025 and December 31, 2024 was approximately $ 210.1 million and $ 220.5 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
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 Condensed Consolidated Statements of Operations, were approximately $ 18.9 million and $ 27.9 million during the three months ended March 31, 2025 and 2024, respectively.
The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers. As of March 31, 2025 and December 31, 2024, these finance joint ventures had approximately $ 115.8 million and $ 139.2 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.
5. GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill during the three months ended March 31, 2025 are summarized as follows (in millions):
North America South America Europe/Middle East Asia/Pacific/Africa Consolidated
Balance as of December 31, 2024 $ 742.8 $ 94.9 $ 962.3 $ 20.4 $ 1,820.4
Foreign currency translation — 4.6 18.3 — 22.9
Balance as of March 31, 2025 $ 742.8 $ 99.5 $ 980.6 $ 20.4 $ 1,843.3
Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist. The Company conducts its annual impairment analyses as of October 1 st each year.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
Changes in the carrying amount of acquired intangible assets during the three months ended March 31, 2025 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, 2024 $ 75.1 $ 179.1 $ 604.7 $ 50.9 $ 909.8
Foreign currency translation 0.4 4.5 5.3 — 10.2
Balance as of March 31, 2025 $ 75.5 $ 183.6 $ 610.0 $ 50.9 $ 920.0
Accumulated amortization: Trademarks and Trade Names Customer Relationships Patents and Technology Other
Total
Balance as of December 31, 2024 $ 45.6 $ 109.6 $ 95.0 $ 14.9 $ 265.1
Amortization expense 1.0 1.7 11.3 1.3 15.3
Foreign currency translation 0.4 3.9 2.1 0.1 6.5
Balance as of March 31, 2025 $ 47.0 $ 115.2 $ 108.4 $ 16.3 $ 286.9
Indefinite-lived intangible assets: Trademarks and Trade Names
Balance as of December 31, 2024 $ 83.8
Foreign currency translation 1.3
Balance as of March 31, 2025 $ 85.1
The Company amortizes certain acquired identifiable intangible assets primarily on a straight-line basis over their estimated useful lives, which range from four to 50 years. External-use software, net, developed by the Company and marketed externally, was approximately $ 0.2 million and $ 0.4 million as of March 31, 2025 and December 31, 2024, respectively, and classified within “Intangible assets, net.”
6. INVENTORIES
Inventories, net at March 31, 2025 and December 31, 2024, were as follows (in millions):
March 31, 2025 December 31, 2024
Finished goods $ 1,244.8 $ 1,187.9
Repair and replacement parts 781.9 754.6
Work in process 252.0 170.0
Raw materials 679.3 618.8
Inventories, net $ 2,958.0 $ 2,731.3
At March 31, 2025 and December 31, 2024, the Company had recorded $ 269.3 million and $ 251.1 million respectively, as a reserve for surplus and obsolete inventories. These reserves are reflected within “Inventories, net” within the Company's Condensed Consolidated Balance Sheets.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
7. PRODUCT WARRANTY
The warranty reserve activity for the three months ended March 31, 2025 and 2024, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):
Three Months Ended March 31,
2025 2024
Balance at beginning of period $ 743.0 $ 800.8
Accruals for warranties issued
66.4 92.1
Settlements made and deferred revenue recognized
( 89.1 ) ( 82.0 )
Foreign currency translation 26.3 ( 17.8 )
Balance at March 31 $ 746.6 $ 793.1
The Company’s agricultural equipment products generally are warranted against defects in material and workmanship for a period of one to four years . The Company accrues for future warranty costs at the time of sale based on historical warranty experience. 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 cost expected to be incurred in satisfying the obligations, over the extended warranty period. Approximately $ 589.4 million, $ 598.7 million and $ 661.9 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Approximately $ 157.2 million, $ 144.3 million and $ 131.2 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
The Company recognizes potential recoveries of the costs associated with warranties it provides when the collection is probable. When specifics of the recovery have been agreed upon with the Company’s suppliers through the confirmation of liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net” in the Company's Condensed 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 Condensed Consolidated Balance Sheets.
8. 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 March 31, 2025, 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 March 31, 2025 and December 31, 2024, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 37.0 million and $ 50.6 million, respectively, and are reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
9. INDEBTEDNESS
Long-term debt consisted of the following at March 31, 2025 and December 31, 2024 (in millions):
March 31, 2025 December 31, 2024
Credit Facility, expires 2027
$ 476.2 $ —
5.450 % Senior notes due 2027
400.0 400.0
5.800 % Senior notes due 2034
700.0 700.0
0.800 % Senior notes due 2028
648.5 622.7
1.002 % EIB Senior term loan due 2025
— 259.5
EIB Senior term loan due 2029
270.2 259.5
EIB Senior term loan due 2030
183.7 176.4
Senior term loans due between 2025 and 2028
158.3 152.0
Other long-term debt — —
Debt issuance costs ( 11.4 ) ( 12.0 )
2,825.5 2,558.1
Less:
Current portion of other long-term debt — —
1.002 % EIB Senior term loan due 2025
— ( 259.5 )
Senior term loans due 2025
( 68.0 ) ( 65.3 )
Total long-term indebtedness
$ 2,757.5 $ 2,233.3
Credit Facility
The Company has a credit facility providing for a $ 1.25 billion multi-currency unsecured revolving credit facility (“Credit Facility”) that matures on December 19, 2027. As of March 31, 2025, the Company had $ 476.2 million in outstanding borrowings under the revolving credit facility and had the ability to borrow $ 773.8 million.
Uncommitted Credit Facility
The Company has an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 108.1 million as of March 31, 2025). The credit facility expires on December 31, 2026. As of March 31, 2025 and December 31, 2024, the Company had no outstanding borrowings under the revolving credit facility.
1.002 % European Investment Bank ( “ EIB ” ) Senior Term Loan due 2025
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.
Other Short-Term Borrowings
As of March 31, 2025 and December 31, 2024, the Company had short-term borrowings due within one year, excluding the current portion of long-term debt, of approximately $ 114.1 million and $ 90.4 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 March 31, 2025 and December 31, 2024, outstanding letters of credit totaled approximately $ 14.0 million and $ 13.2 million, respectively.
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Table of Contents
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
10. RESTRUCTURING AND BUSINESS OPTIMIZATION EXPENSES
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.
Restructuring expenses activity, which relates to severance and other related costs, during the three months ended March 31, 2025, is summarized as follows (in millions):
Balance as of December 31, 2024 $ 136.2
First quarter 2025 provision, net of reversals ( 0.8 )
First quarter 2025 cash activity ( 30.3 )
Foreign currency translation 4.4
Balance as of March 31, 2025 $ 109.5
Approximately $ 98.4 million and $ 125.2 million of restructuring expenses are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively. Approximately $ 11.1 million and $ 11.0 million of restructuring expenses are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, 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 three months ended March 31, 2025, the Company recognized approximately $ 13.8 million of business optimization expenses.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
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 approximately $ 247.0 million and $ 356.7 million as of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, respectively.
Interest Rate Risk
The Company entered into treasury rate locks in early March 2024 to fix the interest rate for the 5.800 % Senior Notes due 2034 (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.
17
Table of Contents
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended March 31, 2025 (in millions):
Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount
Accumulated derivative net gains as of December 31, 2024
$ 11.7 $ 2.8 $ 8.9
Net changes in fair value of derivatives
Foreign currency contracts (1)
0.6 0.2 0.4
Total
0.6 0.2 0.4
Net gains reclassified from accumulated other comprehensive loss into income
Foreign currency contracts (1)
( 2.3 ) ( 0.7 ) ( 1.6 )
Treasury rate locks
( 0.2 ) ( 0.1 ) ( 0.1 )
Total ( 2.5 ) ( 0.8 ) ( 1.7 )
Accumulated derivative net gains as of March 31, 2025
$ 9.8 $ 2.2 $ 7.6
____________________________________
(1) The outstanding contracts as of March 31, 2025 range in maturity through December 2025.
As of March 31, 2025, approximately $ 0.2 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.
The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended March 31, 2024 (in millions):
Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount
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 ) 0.1 ( 1.2 )
Commodity contracts
( 0.3 ) — ( 0.3 )
Treasury rate locks
8.2 2.1 6.1
Total
6.8 2.2 4.6
Net losses reclassified from accumulated other comprehensive loss into income
Foreign currency contracts
2.6 0.3 2.3
Total 2.6 0.3 2.3
Accumulated derivative net gains as of March 31, 2024
$ 8.1 $ 2.0 $ 6.1
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.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 and receive $ 300.0 million from the counterparties. The Company received quarterly interest payments from the counterparties based on a fixed interest rate until the 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 a $ 200.0 million tranche for three years tenor, $ 200.0 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 contracts, the Company is expected to deliver the notional amount of approximately € 385.5 million (or approximately $ 416.7 million as of March 31, 2025) and 155.5 million Swiss francs (or approximately $ 176.2 million as of March 31, 2025), 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.
The following table summarizes the notional values of the instrument designated as a net investment hedge (in millions):
Notional Amount as of
March 31, 2025 December 31, 2024
Cross currency swap contracts
$ 600.0 $ 600.0
The following table summarizes the changes in the fair value of the cross currency swap contracts designated as a net investment hedge during the three months ended March 31, 2025 and 2024 (in millions):
Gain (Loss) Recognized in Other Comprehensive Income (Loss) for the
Three Months Ended
Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount
March 31, 2025 $ ( 10.0 ) $ ( 2.6 ) $ ( 7.4 )
March 31, 2024 4.7 1.2 3.5
Derivative Transactions Not Designated as Hedging Instruments
The Company enters into foreign currency contracts to economically hedge a portion of its receivables and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the functional currency. These contracts are classified as non-designated derivative instruments. Gains and losses on such contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and are immediately recognized into earnings. As of March 31, 2025 and December 31, 2024, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 2,122.1 million and $ 3,231.2 million, respectively.
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Table of Contents
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 Three Months Ended
Classification of Gain (Loss)
March 31, 2025 March 31, 2024
Foreign currency contracts Other expense, net $ 17.9 $ ( 8.3 )
The table below sets forth the fair value of derivative instruments as of March 31, 2025 (in millions):
Asset Derivatives as of
March 31, 2025
Liability Derivatives as of
March 31, 2025
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivative instruments designated as hedging instruments:
Foreign currency contracts Other current assets $ 4.2 Other current liabilities $ 1.9
Cross currency swap contracts
Other noncurrent assets 6.2 Other noncurrent liabilities —
Derivative instruments not designated as hedging instruments:
Foreign currency contracts (1)
Other current assets 5.6 Other current liabilities 1.2
Total derivative instruments $ 16.0 $ 3.1
____________________________________
(1) The outstanding contracts as of March 31, 2025 range in maturity through May 2025.
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
Other current assets 26.1 Other current liabilities 12.6
Total derivative instruments $ 46.0 $ 14.2
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
12. STOCKHOLDERS’ EQUITY
The following tables set forth changes in redeemable noncontrolling interests and stockholders’ equity attributed to AGCO Corporation and to noncontrolling interests for the three months ended March 31, 2025 and 2024 (in millions):
Redeemable Noncontrolling Interests
Common
Stock Additional
Paid-in Capital Retained
Earnings Accumulated Other
Comprehensive Loss Total Stockholders’
Equity
Balance, December 31, 2024 $ 300.1 $ 0.7 $ — $ 5,645.0 $ ( 1,902.9 ) $ 3,742.8
Stock compensation — — 6.2 — — 6.2
Issuance of stock awards
— — ( 5.5 ) ( 4.3 ) — ( 9.8 )
Comprehensive income (loss):
Net income (loss) ( 1.8 ) — — 10.5 — 10.5
Other comprehensive income (loss):
Foreign currency translation adjustments
1.5 — — — 80.7 80.7
Defined pension and postretirement benefit plans, net of tax
— — — — 1.9 1.9
Deferred gains and losses on derivatives, net of tax
— — — — ( 1.3 ) ( 1.3 )
Payment of dividends to stockholders — — — ( 21.6 ) — ( 21.6 )
Balance, March 31, 2025 $ 299.8 $ 0.7 $ 0.7 $ 5,629.6 $ ( 1,821.6 ) $ 3,809.4
Common
Stock Additional
Paid-in Capital Retained
Earnings Accumulated Other
Comprehensive Loss Noncontrolling
Interests Total Stockholders’
Equity
Balance, December 31, 2023 $ 0.7 $ 4.1 $ 6,360.0 $ ( 1,708.1 ) $ 0.1 $ 4,656.8
Stock compensation — 8.4 — — — 8.4
Issuance of stock awards
— ( 12.4 ) ( 0.5 ) — — ( 12.9 )
SSARs exercised — ( 0.1 ) — — — ( 0.1 )
Comprehensive income:
Net income
— — 168.0 — — 168.0
Other comprehensive income (loss):
Foreign currency translation adjustments
— — — ( 52.0 ) — ( 52.0 )
Defined pension and postretirement benefit plans, net of tax
— — — 1.7 — 1.7
Deferred gains and losses on derivatives, net of tax
— — — 6.9 — 6.9
Payment of dividends to stockholders
— — ( 21.6 ) — — ( 21.6 )
Balance, March 31, 2024 $ 0.7 $ — $ 6,505.9 $ ( 1,751.5 ) $ 0.1 $ 4,755.2
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation for the three months ended March 31, 2025 (in millions):
Defined Pension and Postretirement Benefit Plans
Deferred Gains and Losses on Derivatives
Cumulative Translation Adjustment Total
Accumulated other comprehensive loss,
December 31, 2024
$ ( 218.8 ) $ 8.9 $ ( 1,693.0 ) $ ( 1,902.9 )
Other comprehensive income before reclassifications
— 0.4 80.7 81.1
Net losses (gains) reclassified from accumulated other comprehensive loss
1.9 ( 1.7 ) — 0.2
Other comprehensive income (loss)
1.9 ( 1.3 ) 80.7 81.3
Accumulated other comprehensive loss,
March 31, 2025
$ ( 216.9 ) $ 7.6 $ ( 1,612.3 ) $ ( 1,821.6 )
The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation for the three months ended March 31, 2025 and 2024 (in millions):
Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Condensed Consolidated
Statements of Operations
Details about Accumulated Other Comprehensive Loss Components Three Months Ended March 31, 2025 (1)
Three Months Ended March 31, 2024 (1)
Derivatives:
Net losses (gains) on foreign currency contracts
$ ( 2.3 ) $ 2.6 Cost of goods sold
Net gains on treasury rate locks
( 0.2 ) — Interest expense, net
Reclassification before tax ( 2.5 ) 2.6
Income tax expense (benefit)
0.8 ( 0.3 ) Income tax provision
Reclassification net of tax $ ( 1.7 ) $ 2.3
Defined pension and postretirement benefit plans:
Amortization of net actuarial losses $ 2.1 $ 2.2 Other expense, net (2)
Amortization of prior service cost 0.5 0.4 Other expense, net (2)
Reclassification before tax 2.6 2.6
Income tax benefit
( 0.7 ) ( 0.9 ) Income tax provision
Reclassification net of tax $ 1.9 $ 1.7
Net losses reclassified from accumulated other comprehensive loss $ 0.2 $ 4.0
____________________________________
(1) Losses (Gains) included within the Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024, respectively.
(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost. Refer to Note 15 for additional information.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 received an additional 82,883 shares upon final settlement of its November 2023 ASR agreement. All shares received under the ASR agreement were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2025, the Company did no t purchase any shares directly or enter into any accelerated share repurchase agreements.
As of March 31, 2025, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 35.0 million, which has no expiration date.
Dividends
During the three months ended March 31, 2025 and 2024, the Company declared and paid cash dividends of $ 0.29 and $ 0.29 per common share, respectively. On April 24, 2025, the Company's Board of Directors declared a regular quarterly dividend of $ 0.29 per common share to be paid on June 16, 2025, to all stockholders of record as of the close of business on May 15, 2025.
13. NET INCOME PER COMMON SHARE
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per common share assumes the exercise of outstanding stock-settled stock appreciation rights (“SSARs”) and the vesting of restricted stock unit awards (“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.
A reconciliation of net income attributable to AGCO Corporation and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three months ended March 31, 2025 and 2024 is as follows (in millions, except per share data):
Three Months Ended March 31,
2025 2024
Basic net income per share:
Net income attributable to AGCO Corporation
$ 10.5 $ 168.0
Weighted average number of common shares outstanding 74.6 74.6
Basic net income per share attributable to AGCO Corporation
$ 0.14 $ 2.25
Diluted net income per share:
Net income attributable to AGCO Corporation
$ 10.5 $ 168.0
Weighted average number of common shares outstanding 74.6 74.6
Dilutive SSARs and RSUs
0.1 0.1
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share
74.7 74.7
Diluted net income per share attributable to AGCO Corporation
$ 0.14 $ 2.25
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
14. INCOME TAXES
At March 31, 2025 and December 31, 2024, the Company had approximately $ 421.5 million and $ 387.4 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized. Gross unrecognized income tax benefits as of March 31, 2025 and December 31, 2024 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 141.4 million and $ 126.4 million, respectively. In addition, the gross unrecognized income tax benefits as of March 31, 2025 and December 31, 2024 exclude certain deposits made in a foreign jurisdiction of approximately $ 26.2 million, net of $ 19.3 million refunds received, and $ 25.2 million, net of $ 18.5 million refunds received, respectively, associated with an ongoing audit.
At March 31, 2025 and December 31, 2024, the Company had approximately $ 9.9 million and $ 9.3 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets. At March 31, 2025 and December 31, 2024, the Company had approximately $ 411.8 million and $ 378.4 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. At March 31, 2025 and December 31, 2024, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 33.9 million and $ 30.9 million, respectively. Generally, tax years 2019 through 2024 remain open to examination by taxing authorities in the United States and certain other foreign tax jurisdictions. The Company and its subsidiaries are routinely examined by tax authorities in the United States and in various state, local and foreign jurisdictions. As of March 31, 2025, a number of income tax examinations in foreign jurisdictions are ongoing.
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 will not be realized. The Company regularly assesses the likelihood that its deferred tax assets will be recovered from estimated future taxable income and available tax planning strategies and has determined that all adjustments to the valuation allowances have been deemed appropriate. In making this assessment, all available evidence was considered including the current economic climate, as well as reasonable tax planning strategies. 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.
15. PENSION AND POSTRETIREMENT BENEFIT PLANS
Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three months ended March 31, 2025 and 2024 are set forth below (in millions):
Three Months Ended March 31,
Pension benefits 2025 2024
Service cost $ 1.8 $ 2.1
Interest cost 6.6 7.0
Expected return on plan assets ( 6.3 ) ( 7.7 )
Amortization of net actuarial losses 2.1 2.2
Amortization of prior service cost 0.4 0.3
Net periodic pension cost $ 4.6 $ 3.9
Three Months Ended March 31,
Postretirement benefits 2025 2024
Service cost $ — $ 0.1
Interest cost 0.4 0.4
Amortization of prior service cost 0.1 0.1
Net periodic postretirement benefit cost $ 0.5 $ 0.6
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations.
During the three months ended March 31, 2025, the Company made approximately $ 5.3 million of contributions to its defined pension benefit plans. The Company currently estimates its minimum contributions for 2025 to its defined pension benefit plans will aggregate to approximately $ 14.3 million.
During the three months ended March 31, 2025, the Company made approximately $ 0.4 million of contributions to its postretirement health care and life insurance benefit plans. The Company currently estimates that it will make approximately $ 1.7 million of contributions to its postretirement health care and life insurance benefit plans during 2025.
16. 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.
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 11 for additional information on the Company’s derivative instruments and hedging activities.
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 are summarized below (in millions):
As of March 31, 2025
Level 1 Level 2 Level 3 Total
Derivative assets $ — $ 16.0 $ — $ 16.0
Derivative liabilities — 3.1 — 3.1
As of December 31, 2024
Level 1 Level 2 Level 3 Total
Derivative assets $ — $ 46.0 $ — $ 46.0
Derivative liabilities — 14.2 — 14.2
The carrying amounts of long-term debt under the Company’s 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 March 31, 2025, the estimated fair value of the Company's 0.800 % Senior notes due 2028, based on listed market values, was approximately € 549.4 million (or approximately $ 593.8 million), compared to the carrying value of € 600.0 million (or approximately $ 648.5 million). At March 31, 2025, the estimated fair value of the Company's 5.450 % senior notes due 2027, based on listed market values, was approximately $ 405.4 million,
25
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
compared to the carrying value of $ 400.0 million. At March 31, 2025, the estimated fair value of the Company's 5.800 % senior notes due 2034, based on listed market values, was approximately $ 710.1 million, compared to the carrying value of $ 700.0 million. Refer to Note 9 for additional information on the Company’s long-term debt.
17. COMMITMENTS AND CONTINGENCIES
Leases
Lease payment amounts for operating and finance leases with remaining terms greater than one year as of March 31, 2025 and December 31, 2024 were as follows (in millions):
March 31, 2025 December 31, 2024
Operating Leases (1)
Finance Leases Operating Leases (1)
Finance Leases
2025
$ 42.6 $ 0.5 $ 53.3 $ 0.7
2026 48.5 0.5 43.9 0.5
2027 34.3 0.5 29.7 0.4
2028 27.0 0.3 22.6 0.3
2029 19.3 0.2 15.2 0.2
Thereafter 43.8 5.5 42.2 5.5
Total lease payments 215.5 7.5 206.9 7.6
Less: imputed interest (2)
( 33.5 ) ( 1.9 ) ( 34.4 ) ( 2.0 )
Present value of leased liabilities $ 182.0 $ 5.6 $ 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 for each lease using either the implicit interest rate or the incremental borrowing rate, when the implicit interest rate is not readily available.
Off-Balance Sheet Arrangements
Guarantees
At March 31, 2025, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A. (“AGCO Capital”), of approximately $ 64.2 million. Such guarantees generally obligate the Company to repay outstanding finance obligations owed to AGCO Capital if end users default on such loans to the extent that, due to non-credit risk, the end users are not able, or not required, to pay their loans, or are required to pay in a different currency than the one agreed in their loan. The Company also has obligations to guarantee indebtedness owed to certain of its finance joint ventures if dealers or end users default on loans. Losses under such guarantees historically have been insignificant. The Company believes the credit risk associated with these guarantees is not material.
In addition, at March 31, 2025, the Company had accrued approximately $ 12.4 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future payments under these guarantees is approximately $ 212.3 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 4 for discussion of the Company’s accounts receivable sales agreements.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
Contingencies
During 2017, the Company purchased Precision Planting, which provides precision agricultural technology solutions. In 2018, Deere & Company (“Deere”) filed separate complaints in the U.S. District Court of Delaware against the Company and Precision Planting alleging that certain products of those entities infringed certain patents of Deere. The two complaints subsequently were consolidated into a single case, Case No. 1:18-cv-00827-CFC. In July 2022, the case was tried before a jury, which determined that the Company and Precision Planting had not infringed the Deere patents. Following customary post-trial procedures, the Court entered a judgment 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. Deere did not file for a writ of certiorari from the U.S. Supreme Court within the required time period, and, as a result, the District Court judgement is final.
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, are material to its business or financial statements as a whole, including its results of operations and financial condition.
18. 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. The Company divested the majority of its Grain & Protein business on November 1, 2024.
Significant changes in the balance of contract liabilities for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Three Months Ended March 31,
2025 2024
Balance at beginning of period $ 341.5 $ 310.7
Advance consideration received 47.6 52.5
Revenue recognized during the period for extended warranty contracts, maintenance services and technology services ( 37.7 ) ( 32.2 )
Revenue recognized during the period related to grain storage and protein production systems ( 0.4 ) ( 4.7 )
Foreign currency translation 8.8 ( 4.8 )
Balance at March 31 $ 359.8 $ 321.5
The contract liabilities are classified as either “Accrued expenses” or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2025, the Company recognized approximately $ 35.5 million of revenue that was recorded as a contract liability at the beg inning of 2025. During the three months ended March 31, 2024, the Company recognized approximately $ 33.2 million of revenue that was recorded as a contract liability at the beginning of 2024.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
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 March 31, 2025 are $ 108.8 million for the remainder of 2025, $ 116.7 million in 2026, $ 71.9 million in 2027, $ 33.9 million in 2028 and $ 14.6 million ther eafter, 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.
Disaggregated Revenue
Net sales for the three months ended March 31, 2025 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 $ 292.8 $ — $ — $ — $ 292.8
Canada 76.7 — — — 76.7
Brazil — 169.3 — — 169.3
Other South America — 57.7 — — 57.7
Germany — — 293.9 — 293.9
France — — 270.7 — 270.7
United Kingdom and Ireland — — 108.0 — 108.0
Finland and Scandinavia — — 171.9 — 171.9
Italy — — 65.9 — 65.9
Other Europe — — 346.8 — 346.8
Middle East and Algeria — — 73.3 — 73.3
Africa — — — 15.3 15.3
Asia — — — 33.1 33.1
Australia and New Zealand — — — 46.1 46.1
Mexico, Central America and Caribbean 26.1 2.9 — — 29.0
$ 395.6 $ 229.9 $ 1,330.5 $ 94.5 $ 2,050.5
Major products:
Tractors $ 141.0 $ 148.8 $ 910.3 $ 54.0 $ 1,254.1
Replacement parts 88.4 37.2 284.3 22.7 432.6
Grain storage and protein production systems — — — 0.9 0.9
Combines, application equipment and other machinery 166.2 43.9 135.9 16.9 362.9
$ 395.6 $ 229.9 $ 1,330.5 $ 94.5 $ 2,050.5
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
Net sales for the three months ended March 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
Total Segments
Other (1)
Consolidated
Primary geographical markets:
United States $ 482.5 $ — $ — $ — $ 482.5 $ 116.3 $ 598.8
Canada 91.2 — — — 91.2 8.7 99.9
Brazil — 204.7 — — 204.7 24.9 229.6
Other South America — 66.4 — — 66.4 4.8 71.2
Germany — — 505.4 — 505.4 5.9 511.3
France — — 323.9 — 323.9 1.0 324.9
United Kingdom and Ireland — — 137.7 — 137.7 0.7 138.4
Finland and Scandinavia — — 162.0 — 162.0 1.1 163.1
Italy — — 64.6 — 64.6 4.7 69.3
Other Europe — — 352.7 — 352.7 7.9 360.6
Middle East and Algeria — — 160.6 — 160.6 0.8 161.4
Africa — — — 18.8 18.8 4.6 23.4
Asia — — — 60.4 60.4 14.2 74.6
Australia and New Zealand — — — 68.4 68.4 0.3 68.7
Mexico, Central America and Caribbean 27.4 1.9 — — 29.3 4.2 33.5
$ 601.1 $ 273.0 $ 1,706.9 $ 147.6 $ 2,728.6 $ 200.1 $ 2,928.7
Major products:
Tractors $ 252.7 $ 172.9 $ 1,260.7 $ 90.9 $ 1,777.2 $ — $ 1,777.2
Replacement parts 94.0 39.1 277.7 22.9 433.7 — 433.7
Grain storage and protein production systems — — — 5.1 5.1 200.1 205.2
Combines, application equipment and other machinery 254.4 61.0 168.5 28.7 512.6 — 512.6
$ 601.1 $ 273.0 $ 1,706.9 $ 147.6 $ 2,728.6 $ 200.1 $ 2,928.7
____________________________________
(1) “Other” represents the results for the three months ended March 31, 2024 for the majority of the Company’s Grain & Protein business which was divested on November 1, 2024. The results of the G&P business through the date of the divestiture were previously included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
19. 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 generally charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations (loss) for one segment may not be comparable to another segment. Segment results for the three months ended March 31, 2025 and 2024 and assets as of March 31, 2025 and December 31, 2024 based on the Company’s reportable segments are as follows (in millions):
Three Months Ended March 31, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments Other (1)
Total
2025
Net sales $ 395.6 $ 229.9 $ 1,330.5 $ 94.5 $ 2,050.5 $ — $ 2,050.5
Cost of goods sold
295.5 185.2 970.9 78.3 1,529.9 — 1,529.9
Selling, general and administrative expenses
86.6 32.4 135.2 16.4 270.6 — 270.6
Engineering expenses
33.3 10.2 70.0 2.5 116.0 — 116.0
Income (loss) from operations
$ ( 19.8 ) $ 2.1 $ 154.4 $ ( 2.7 ) $ 134.0 $ — $ 134.0
Depreciation $ 15.2 $ 7.9 $ 35.1 $ 2.3 $ 60.5 $ — $ 60.5
Capital expenditures 6.3 6.6 34.4 0.9 48.2 — 48.2
2024
Net sales (2)
$ 601.1 $ 273.0 $ 1,706.9 $ 147.6 $ 2,728.6 $ 200.1 $ 2,928.7
Cost of goods sold
458.2 224.1 1,199.8 117.9 2,000.0 158.9 2,158.9
Selling, general and administrative expenses
81.5 22.4 137.7 18.2 259.8 29.6 289.4
Engineering expenses
33.0 14.5 74.3 2.4 124.2 6.7 130.9
Income from operations (3)
$ 28.4 $ 12.0 $ 295.1 $ 9.1 $ 344.6 $ 4.9 $ 349.5
Depreciation $ 14.8 $ 8.9 $ 32.1 $ 4.0 59.8 $ 3.5 $ 63.3
Capital expenditures 16.3 15.1 60.9 0.6 92.9 2.1 95.0
Assets
As of March 31, 2025 $ 1,536.3 $ 985.2 $ 3,047.1 $ 688.2 $ 6,256.8 $ — $ 6,256.8
As of December 31, 2024 1,527.9 946.9 2,841.4 697.7 6,013.9 — 6,013.9
____________________________________
(1) “Other” represents the results for the three months ended March 31, 2024 for the majority of the Company’s Grain & Protein business which was divested on November 1, 2024. The results of the G&P business through the date of the divestiture were previously included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments.
(2) Of the $ 200.1 million of the net sales of the divested G&P business recast to “Other”, $ 128.5 million, $ 30.4 million, $ 22.1 million and $ 19.1 million were previously included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments, respectively.
(3) Of the $ 4.9 million of the income (loss) from operations of the divested G&P business recast to “Other”, $ 14.0 million, $ 4.2 million, $( 12.2 ) million and $( 1.1 ) million were previously included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments, respectively.
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Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
A reconciliation from the segment information to the consolidated balances for income from operations is set forth below (in millions):
Three Months Ended March 31,
2025 2024
Segment income from operations $ 134.0 $ 344.6
Other (1)
— 4.9
Impairment charges ( 1.1 ) —
Corporate expenses ( 48.1 ) ( 53.0 )
Amortization of intangibles ( 15.3 ) ( 13.9 )
Stock compensation expense ( 7.1 ) ( 8.0 )
Restructuring and business optimization expenses
( 13.0 ) ( 1.0 )
Consolidated income from operations
$ 49.4 $ 273.6
____________________________________
(1) “Other” represents the results for the three months ended March 31, 2024 for the majority of the Company’s Grain & Protein business which was divested on November 1, 2024. The results of the G&P business through the date of the divestiture were previously included within our North America, South America, Europe/Middle East and Asia/Pacific/Africa segments.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.