AGCO CORP /DE 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Our operations are subject to the cyclical and seasonal nature of the agricultural industry. Sales of our equipment are affected by, among other things, changes in farm income, farm land values and debt levels, financing costs, acreage planted, crop yields, weather conditions, the demand for agricultural commodities, commodity and protein prices, agricultural product demand and general economic conditions and government policies, tariffs and subsidies. We sell our equipment, precision agriculture technology and replacement parts to our independent dealers, distributors and other customers. A large majority of our sales are to independent dealers and distributors that sell our products to end users. To the extent practicable, we attempt to sell products to our dealers and distributors on a level basis throughout the year to reduce the effect of seasonal demands on our manufacturing operations and to minimize our investment in inventories. However, retail sales by dealers to farmers are highly seasonal and are a function of the timing of the planting and harvesting seasons. In certain markets, particularly in North America, there is often a time lag, which varies based on the timing and level of retail demand, between our sale of the equipment to the dealer and the dealer’s sale to a retail customer. The recent announcements of significant trade policy and tariff actions by the U.S. government, including but not limited to tariffs on imported steel and aluminum products, tariffs on certain imports from China, tariffs on certain imports from Canada and Mexico, announced trade deal between the United States and European Union of baseline tariffs on certain imports from the European Union, and baseline tariffs on most imports from most other countries, continue to create significant uncertainty and potential risks for our business. These announcements in some cases were followed by delays and changes in implementation, and the ultimate tariff structures are unclear at the current time. Depending on the countries affected, increases in tariffs have raised the costs of inputs used in manufacturing our products, which in turn has impacted our cost of goods sold. Additionally, higher tariffs may lead to increased after-tariff sales prices for the products we sell. The impacts of the tariffs may be partially mitigated as a majority of our sales and manufacturing takes place outside the United States. While we are actively exploring opportunities to mitigate these increased costs, there can be no guarantee that we will be able to fully offset the impact of these tariffs. Furthermore, the imposition of retaliatory tariffs from other countries on our exported products could negatively affect our sales and marketplace access in those countries. Moreover, the uncertainty of the tariff changes and any future trade policy changes has adversely impacted, and is expected to continue to adversely impact, our sales. 40 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) RESULTS OF OPERATIONS Financial Highlights The following tables set forth the percentage relationship to net sales of certain items included in our Condensed Consolidated Statements of Operations (in millions, except percentages): Three Months Ended September 30, 2025 2024 $ % of Net Sales (1) $ % of Net Sales (1) Net sales $ 2,476.3 100.0 % $ 2,599.3 100.0 % Cost of goods sold 1,829.8 73.9 1,996.2 76.8 Gross profit 646.5 26.1 603.1 23.2 Selling, general and administrative expenses 340.8 13.8 344.3 13.2 Engineering expenses 123.0 5.0 121.3 4.7 Amortization of intangibles 23.0 0.9 8.8 0.3 Impairment charges (0.6) — 0.2 — Restructuring and business optimization expenses 8.7 0.4 10.5 0.4 Loss on sale of business — — 3.2 0.1 Income from operations 151.6 6.1 114.8 4.4 Interest expense, net 15.5 0.6 33.9 1.3 Other expense (income), net (208.4) (8.4) 52.3 2.0 Income before income taxes and equity in net earnings of affiliates 344.5 13.9 28.6 1.1 Income tax provision 48.8 2.0 11.9 0.5 Income before equity in net earnings of affiliates 295.7 11.9 16.7 0.6 Equity in net earnings of affiliates 7.0 0.3 12.2 0.5 Net income 302.7 12.2 28.9 1.1 Net loss attributable to noncontrolling interests 3.0 0.1 1.1 — Net income attributable to AGCO Corporation $ 305.7 12.3 % $ 30.0 1.2 % ___________________________________ (1) Rounding may impact summation of amounts. 41 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Nine Months Ended September 30, 2025 2024 $ % of Net Sales (1) $ % of Net Sales (1) Net sales $ 7,161.8 100.0 % $ 8,774.6 100.0 % Cost of goods sold 5,336.1 74.5 6,564.2 74.8 Gross profit 1,825.7 25.5 2,210.4 25.2 Selling, general and administrative expenses 993.0 13.9 1,074.5 12.2 Engineering expenses 356.8 5.0 390.0 4.4 Amortization of intangibles 54.0 0.8 54.4 0.6 Impairment charges 7.3 0.1 5.3 0.1 Restructuring and business optimization expenses 37.3 0.5 41.7 0.5 Loss on sale of business 12.3 0.2 497.8 5.7 Income from operations 365.0 5.1 146.7 1.7 Interest expense, net 51.8 0.7 65.7 0.7 Other expense (income), net (127.2) (1.8) 168.4 1.9 Income (loss) before income taxes and equity in net earnings of affiliates 440.4 6.1 (87.4) (1.0) Income tax provision (benefit) (154.7) (2.2) 122.6 1.4 Income (loss) before equity in net earnings of affiliates 595.1 8.3 (210.0) (2.4) Equity in net earnings of affiliates 30.7 0.4 38.0 0.4 Net income (loss) 625.8 8.7 (172.0) (2.0) Net loss attributable to noncontrolling interests 5.2 0.1 2.9 — Net income (loss) attributable to AGCO Corporation $ 631.0 8.8 % $ (169.1) (1.9) % ___________________________________ (1) Rounding may impact summation of amounts. Net income attributable to AGCO Corporation for the three months ended September 30, 2025, was $305.7 million, or $4.09 per diluted share, compared to $30.0 million or $0.40 per diluted share, for the three months ended September 30, 2024. Net income (loss) attributable to AGCO Corporation for the nine months ended September 30, 2025, was $631.0 million, or $8.45 per diluted share, compared to $(169.1) million or $(2.27) per diluted share, for the nine months ended September 30, 2024. Net sales during the three months ended September 30, 2025 were approximately $2,476.3 million, or 4.7% lower than the three months ended September 30, 2024, primarily due to lower sales volumes resulting from softer industry sales reflecting lower end market demand in the North America, South America and Asia/Pacific/Africa regions and the divestiture of the majority of the Company's G&P business on November 1, 2024, partially offset by higher sales volumes in the Europe/Middle East region and favorable currency impacts. Income from operations was $151.6 million for the three months ended September 30, 2025 compared to $114.8 million in the three months ended September 30, 2024. The increase in income from operations during 2025 was primarily the result of higher sales and production volumes in the Europe/Middle East region, decreases in restructuring and business optimization expenses and selling, general and administrative expenses (“SG&A expenses”) primarily related to lower compensation and transaction costs, partially offset by higher amortization expense. Additionally, as of June 30, 2024, the Company classified its G&P business as held for sale and recorded a loss of $3.2 million during the three months ended September 30, 2024. Net sales during the nine months ended September 30, 2025 were approximately $7,161.8 million, or 18.4% lower than the nine months ended September 30, 2024, primarily due to lower sales volumes resulting from softer industry sales reflecting lower end market demand and the divestiture of the majority of the Company's G&P business on November 1, 2024, partially offset by favorable currency impacts. Income from operations was $365.0 million for the nine months ended 42 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) September 30, 2025 compared to $146.7 million in the nine months ended September 30, 2024. As of June 30, 2024, the Company classified its G&P business as held for sale and recorded a loss of $497.8 million during the nine months ended September 30, 2024. Additionally, the increase in income from operations during 2025 was the result of decreases in engineering expenses and SG&A expenses primarily related to lower compensation and transaction costs, partially offset by lower sales and production volumes reflecting weak industry conditions. We estimate that worldwide average price increases (decreases) were approximately 1.4% and (1.2)% for the three months ended September 30, 2025 and 2024, respectively, and 0.4% and (0.8)% for the nine months ended September 30, 2025 and 2024, respectively. Consolidated net sales of tractors and combines, which comprised approximately 68.6% and 67.0% of our net sales for the three and nine months ended September 30, 2025, increased (decreased) approximately 13.5% and (10.6)% compared to the same periods in 2024. Unit sales of tractors and combines increased (decreased) approximately 6.2% and (6.7)% during the three and nine months ended September 30, 2025 compared to the same periods in 2024. The primary driver of the change in unit sales was due to changes in end market demand. The difference between the unit sales change and the change in net sales was primarily the result of sales mix changes and foreign currency translation. Overall, global production hours, excluding hours related to the Company's G&P business which was divested on November 1, 2024, increased (decreased) approximately 5.9% and (16.6)% during the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, reflecting our response to end market demand and extended plant shutdowns in the Europe/Middle East region in the third quarter of 2024. Results of Operations Gross profit as a percentage of net sales increased during the three and nine months ended September 30, 2025 compared to the same periods in 2024, primarily due to lower manufacturing costs. SG&A expenses, as a percentage of net sales, were higher during the three and nine months ended September 30, 2025 compared to the same periods in 2024 as net sales decreased at a faster rate than SG&A expenses. The absolute level of SG&A expenses decreased during the three and nine months ended September 30, 2025 due to lower compensation costs and lower transaction costs related to the divestiture of the majority of the Company's G&P business and the PTx Trimble joint venture transaction. We recorded $6.9 million and $24.3 million of stock compensation expense within SG&A expenses during the three and nine months ended September 30, 2025, respectively, compared to $5.0 million and $20.4 million during the same periods in 2024. Engineering expenses, as a percentage of net sales, were higher during the three and nine months ended September 30, 2025 compared to the same periods in 2024 as net sales decreased at a faster rate than engineering expenses. The absolute value of engineering expenses were flat during the three months ended September 30, 2025. The absolute value of engineering expenses decreased during the nine months ended September 30, 2025 primarily due to lower investment, partially offset by increased engineering expenses related to the PTx Trimble joint venture. We recorded impairment charges of $(0.6) million and $7.3 million during the three and nine months ended September 30, 2025, respectively, compared to $0.2 million and $5.3 million recorded during the three and nine months ended September 30, 2024, related to the impairment of certain other assets. We recorded restructuring and business optimization expenses of $8.7 million and $37.3 million during the three and nine months ended September 30, 2025, respectively, compared to $10.5 million and $41.7 million during the same periods in 2024. On June 24, 2024, the Company announced a restructuring program (the “Program”) in response to increased weakening demand in the agriculture industry. 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 the initial 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. The restructuring expenses recorded during the three and nine months ended September 30, 2025 and 2024 primarily related to severance, business optimization and other related costs associated with the Company's Program. Refer to Note 10 of our Condensed Consolidated Financial Statements for further information. We recorded a loss on sale of business of $12.3 million during the nine months ended September 30, 2025 related to the finalization of the preliminary working capital and other adjustments related to the sale of the majority of the Company's G&P business. As of June 30, 2024, the Company classified its G&P business as held for sale and recorded a loss of 43 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) $3.2 million and $497.8 million during the three and nine months ended September 30, 2024, respectively. Refer to Note 3 of our Condensed Consolidated Financial Statements for further information. Interest expense, net was $15.5 million for the three months ended September 30, 2025, compared to $33.9 million for the comparable period in 2024, resulting primarily from a decrease in interest expense resulting from the Company's repayment of the Term Loan Facility on November 1, 2024. Interest expense, net was $51.8 million for the nine months ended September 30, 2025, compared to $65.7 million for the comparable period in 2024, resulting primarily from a decrease in interest expense resulting from the Company's repayment of the Term Loan Facility on November 1, 2024, partially offset by lower interest income. Refer to “Liquidity and Capital Resources” for further information on our available funding. Other expense (income), net was $(208.4) million and $(127.2) million for the three and nine months ended September 30, 2025, respectively, compared to $52.3 million and $168.4 million for the comparable periods in 2024. During the three and nine months ended September 30, 2025, the Company recorded a gain of $251.9 million on the sale of an investment in affiliate related to the sale of the Company’s ownership interest in Tractors and Farm Equipment Limited (“TAFE”) within “Other expense (income), net.” Refer to Note 20 of our Condensed Consolidated Financial Statements for further information. Foreign currency exchange losses were approximately $18.4 million and $60.6 million, respectively, for the three and nine months ended September 30, 2025, compared to $24.7 million and $74.3 million for the comparable periods in 2024. Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in “Other expense (income), net,” were approximately $21.9 million and $60.6 million, respectively, for the three and nine months ended September 30, 2025, compared to $28.4 million and $92.2 million for the comparable periods in 2024. During the nine months ended September 30, 2024, the Company recorded the final business interruption insurance recovery related to the 2022 cyber attack of $5.0 million. We recorded an income tax provision (benefit) of $48.8 million and $(154.7) million for the three and nine months ended September 30, 2025, respectively, compared to $11.9 million and $122.6 million for the three and nine months ended September 30, 2024. Our effective tax rate varies from period to period due to the mix of taxable income and losses in the various tax jurisdictions in which we operate. During the three and nine months ended September 30, 2025, the Company’s income tax provision included a net tax benefit of $4.7 million and $259.9 million, respectively, related to a legal entity reorganization. Based on a favorable tax ruling in Brazil regarding the taxability of certain state value added tax incentive benefits, the Company recorded a $31.7 million reduction in the provision for income taxes during the nine months ended September 30, 2024. Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was $7.0 million and $30.7 million for the three months and nine ended September 30, 2025, respectively, compared to $12.2 million and $38.0 million for the three and nine months ended September 30, 2024. The Company recorded a net loss attributable to noncontrolling interests of $3.0 million and $5.2 million during the three and nine months ended September 30, 2025, respectively, compared to $1.1 million and $2.9 million recorded during the three and nine months ended September 30, 2024. The net loss primarily relates to the noncontrolling interests of the PTx Trimble joint venture held by Trimble, which owns a 15% interest in the joint venture. 44 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Results of Operations - Segment Information The Company has four operating segments which are also its reportable segments which consist of the Europe/Middle East (“EME”), North America, South America and Asia/Pacific/Africa (“APA”) regions. The Company’s reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income (loss) from operations for one segment may not be comparable to another segment. The following tables set forth, for the three and nine months ended September 30, 2025, the impact to net sales of currency translation by geographical segment (in millions, except percentages): Three Months Ended September 30, Change Change Due to Currency Translation 2025 2024 $ % $ % Europe/Middle East $ 1,613.8 $ 1,266.0 $ 347.8 27.5 % $ 91.0 7.2 % North America 383.0 564.4 (181.4) (32.1) % (0.5) — % South America 322.4 350.8 (28.4) (8.1) % 5.0 1.4 % Asia/Pacific/Africa 157.1 166.9 (9.8) (5.9) % (1.2) (0.7) % Total Segments 2,476.3 2,348.1 128.2 5.5 % 94.3 4.1 % Other (1) — 251.2 (251.2) (100.0) % — — % $ 2,476.3 $ 2,599.3 $ (123.0) (4.7) % $ 94.3 3.7 % __________________________________ (1) “Other” represents the results for the three months ended September 30, 2024 for the majority of the Company’s Grain & Protein (“G&P”) 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. 45 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Nine Months Ended September 30, Change Change Due to Currency Translation 2025 2024 $ % $ % Europe/Middle East $ 4,719.2 $ 4,842.4 $ (123.2) (2.5) % $ 152.3 3.1 % North America 1,199.5 1,792.7 (593.2) (33.1) % (14.5) (0.8) % South America 855.7 939.7 (84.0) (8.9) % (45.6) (4.9) % Asia/Pacific/Africa 387.4 458.0 (70.6) (15.4) % (3.3) (0.7) % Total Segments 7,161.8 8,032.8 (871.0) (10.8) % 88.9 1.1 % Other (1) — 741.8 (741.8) (100.0) % — — % $ 7,161.8 $ 8,774.6 $ (1,612.8) (18.4) % $ 88.9 1.0 % __________________________________ (1) “Other” represents the results for the nine months ended September 30, 2024 for the majority of the Company’s G&P 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. EME Three Months Ended September 30, Change Nine Months Ended September 30, Change 2025 2024 $ 2025 2024 $ Net sales $ 1,613.8 $ 1,266.0 $ 347.8 $ 4,719.2 $ 4,842.4 $ (123.2) Income from operations 252.4 89.3 163.1 668.1 680.0 (11.9) Net sales in EME increased in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to sales volume increases, most significantly in high-horsepower tractors and mid-range tractors and favorable foreign currency translation. Income from operations increased by $163.1 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as a result of higher sales and production volumes. Net sales in EME decreased in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors and combines, partially offset by favorable foreign currency translation. Income from operations decreased by $11.9 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 as a result of lower sales and production volumes and higher warranty costs. North America Three Months Ended September 30, Change Nine Months Ended September 30, Change 2025 2024 $ 2025 2024 $ Net sales $ 383.0 $ 564.4 $ (181.4) $ 1,199.5 $ 1,792.7 $ (593.2) Income (loss) from operations (40.1) 16.3 (56.4) (82.0) 80.9 (162.9) Net sales in North America decreased in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors, sprayers and combines. Income (loss) from operations decreased by $56.4 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as a result of lower sales and production volumes. 46 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Net sales in North America decreased in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors, sprayers and hay tools. Income (loss) from operations decreased by $162.9 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 as a result of lower sales and production volumes. South America Three Months Ended September 30, Change Nine Months Ended September 30, Change 2025 2024 $ 2025 2024 $ Net sales $ 322.4 $ 350.8 $ (28.4) $ 855.7 $ 939.7 $ (84.0) Income from operations 18.5 41.1 (22.6) 44.4 59.5 (15.1) Net sales decreased in South America in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to sales declines, most significantly in tractors and implements, and negative pricing impacts. Income from operations decreased $22.6 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, as a result of lower sales and production volumes and negative pricing impacts. Net sales decreased in South America in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to sales declines, most significantly in tractors and implements, negative pricing impacts and unfavorable foreign currency translation. Income from operations decreased $15.1 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, as a result of lower sales and negative pricing impacts, partially offset by lower manufacturing costs. APA Three Months Ended September 30, Change Nine Months Ended September 30, Change 2025 2024 $ 2025 2024 $ Net sales $ 157.1 $ 166.9 $ (9.8) $ 387.4 $ 458.0 $ (70.6) Income from operations 7.7 6.8 0.9 14.4 26.3 (11.9) Net sales decreased in APA in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to sales volume declines, most significantly in hay tools. Income from operations increased $0.9 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower manufacturing costs, partially offset by lower sales volume. Net sales decreased in APA in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors, hay tools and sprayers. Income from operations decreased $11.9 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to lower sales and production volumes. 47 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) LIQUIDITY AND CAPITAL RESOURCES Our financing requirements generally are subject to variations due to seasonal changes in inventory and receivable levels. Internally generated funds are supplemented when necessary from external sources, primarily our credit facilities and accounts receivable sales agreement facilities. Additional information regarding our indebtedness is contained in Note 9 to the Condensed Consolidated Financial Statements. We believe that the borrowings and facilities listed below, together with available cash and internally generated funds, and assuming customary renewals and replacements, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future (in millions): September 30, 2025 (1) Credit facility, expires 2027 $ 350.0 5.450% Senior notes due 2027 400.0 5.800% Senior notes due 2034 700.0 0.800% Senior notes due 2028 704.0 EIB Senior term loan due 2029 293.3 EIB Senior term loan due 2030 199.5 Senior term loans due between 2025 and 2028 98.0 ____________________________________ (1) The amounts above are gross of debt issuance costs of an aggregate amount of approximately $10.4 million. 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. In May 2025, the Company amended the Credit Facility with respect to the net leverage ratio financial covenant requirements for the remainder of 2025 and in the event of a future material acquisition. As of September 30, 2025, the Company had $350.0 million in outstanding borrowings under the revolving credit facility and had the ability to borrow $900.0 million. In addition, the Company has an uncommitted revolving credit facility that allows the Company to borrow up to €200.0 million (or approximately $234.7 million as of September 30, 2025). The credit facility expires on December 31, 2026. As of September 30, 2025, the Company had no outstanding borrowings under the revolving credit facility. The Company had redeemable noncontrolling interests of $301.3 million as of September 30, 2025 resulting from the PTx Trimble joint venture transaction, which may require the use of cash in certain instances, beginning in 2027. Refer to Note 2 of our Condensed Consolidated Financial Statements for further information. The Company is in compliance with the financial covenants contained in these facilities and expects to continue to maintain such compliance. Should we ever encounter difficulties, our historical relationship with our lenders has been strong, and we anticipate their continued long-term support of our business. Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness, excluding short-term borrowings due within one year, and stockholders’ equity, was 37.8% and 40.6% at September 30, 2025 and December 31, 2024, respectively. Supplemental Guarantor Financial Information 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 2027 Notes and the 2034 Notes are unsecured and unsubordinated indebtedness of the Company and are guaranteed on a senior unsecured basis, jointly and severally, by AGCO International Holdings B.V., AGCO International GmbH and Massey Ferguson Corp., direct and indirect subsidiaries of the Company (collectively, the “Guarantors”). The following tables present summarized financial information of AGCO Corporation, as the issuer of the 2027 Notes and the 2034 Notes, and the Guarantors on a combined basis after elimination of intercompany transactions and balances within the Guarantors and equity in the earnings from and investments in any non-guarantor subsidiary. As used herein, “obligor 48 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) group” means AGCO Corporation, as the issuer of the debt securities, and the Guarantors on a combined basis. The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the obligor group and is not intended to present the financial position or results of operations of the obligor group in accordance with generally accepted accounting principles as such principles are in effect in the United States. Balance Sheet Information (in millions) As of September 30, 2025 As of December 31, 2024 Current assets (a) $ 4,661.9 $ 4,143.4 Noncurrent assets (b) 1,580.7 1,910.6 Current liabilities (c) 3,578.2 3,802.8 Noncurrent liabilities (d) 4,614.1 4,214.5 ____________________________________ (a) Includes amounts due from non-guarantor subsidiaries of $2,509.8 million and $2,189.6 million as of September 30, 2025 and December 31, 2024, respectively. (b) Includes amounts due from non-guarantor subsidiaries of $107.3 million and $729.0 million as of September 30, 2025 and December 31, 2024, respectively. (c) Includes amounts due to non-guarantor subsidiaries of $2,000.1 million and $1,972.8 million as of September 30, 2025 and December 31, 2024, respectively. (d) Includes amounts due to non-guarantor subsidiaries of $1,557.2 million and $1,706.5 million as of September 30, 2025 and December 31, 2024, respectively. Statement of Operations Information (in millions) Nine Months Ended September 30, 2025 Revenues (a) $ 5,167.4 Income from Operations 260.3 Net income 191.2 Net income attributable to obligor group 191.2 ____________________________________ (a) Includes intercompany revenues generated from non-guarantor subsidiaries of $3,554.3 million. 49 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) The following tables present summarized financial information of AGCO International GmbH, after elimination of intercompany transactions and balances within the Guarantors and equity in the earnings from and investments in any non-guarantor subsidiary. Balance Sheet Information (in millions) As of September 30, 2025 As of December 31, 2024 Current assets (a) $ 3,508.6 $ 3,136.1 Noncurrent assets (b) 379.6 991.0 Current liabilities (c) 2,701.6 2,650.4 Noncurrent liabilities (d) 1,682.3 1,815.9 ____________________________________ (a) Includes amounts due from non-guarantor subsidiaries of $2,127.5 million and $1,895.5 million as of September 30, 2025 and December 31, 2024, respectively. (b) Includes amounts due from non-guarantor subsidiaries of $102.7 million and $729.0 million as of September 30, 2025 and December 31, 2024, respectively. (c) Includes amounts due to non-guarantor subsidiaries of $1,848.6 million and $1,863.9 million as of September 30, 2025 and December 31, 2024, respectively. (d) Includes amounts due to non-guarantor subsidiaries of $1,557.2 million and $1,706.5 million as of September 30, 2025 and December 31, 2024, respectively. Statement of Operations Information (in millions) Nine Months Ended September 30, 2025 Revenues (a) $ 4,273.0 Income from Operations 538.2 Net income 205.0 Net income attributable to obligor group 205.0 ____________________________________ (a) Includes intercompany revenues generated from non-guarantor subsidiaries of $3,336.9 million. Our accounts receivable sales agreements in North America, Europe and Brazil permit the sale, on an ongoing basis, of a majority of our receivables to our U.S., Canadian, European and Brazilian finance joint ventures. The sales of all receivables are without recourse to us. We do not service the receivables after the sales occur, and we do not maintain any direct retained interest in the receivables. These agreements are accounted for as off-balance sheet transactions. The cash received from receivables sold under these accounts receivable sales agreements that remain outstanding as of September 30, 2025 and December 31, 2024 was approximately $2.0 billion and $2.3 billion, respectively. In addition, we sell 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 September 30, 2025 and December 31, 2024 was approximately $252.7 million and $220.5 million, respectively. In order to efficiently manage our liquidity, we generally pay vendors in accordance with negotiated terms. To enable vendors to obtain payment in advance of our payment due dates to them, we have established programs in certain markets with financial institutions under which the vendors have the option to be paid by the financial institutions earlier than the payment due dates. Should we not be able to negotiate extended payment terms with our vendors, or should financial institutions no longer be willing to participate in early payment programs with us, we would expect to have sufficient liquidity to timely pay our vendors without any material impact on us or our financial position. As of September 30, 2025 and December 31, 2024, the amount outstanding that remains unpaid to the banks or other intermediaries associated with these programs totaled $34.3 million and $50.6 million, respectively. Refer to Note 8 of our Condensed Consolidated Financial Statements for further discussion. 50 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Cash Flows Cash flows provided by operating activities were approximately $224.5 million for the first nine months of 2025 compared to cash flows used in operating activities of approximately $108.0 million for the same period in 2024. Cash provided by operating activities during the nine months ended September 30, 2025 was driven by changes in working capital. Our working capital requirements are seasonal, with investments in working capital typically building in the first half of the year and then reducing in the second half of the year. We had approximately $2,093.6 million in working capital at September 30, 2025 as compared to $1,312.0 million at December 31, 2024. Inventories as of September 30, 2025 were approximately $3,081.1 million as compared to $2,731.3 million at December 31, 2024. Accounts and notes receivable, net, as of September 30, 2025 were approximately $46.5 million lower than at December 31, 2024 primarily due to timing of sales of accounts receivable under our factoring arrangements. Accounts payable and Accrued expenses as of September 30, 2025 were approximately $114.3 million higher than at December 31, 2024. Capital expenditures for the first nine months of 2025 were approximately $159.3 million compared to $279.3 million for the same period in 2024. Share Repurchases and Dividends 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. On July 9, 2025, the Company's Board of Directors authorized a new share repurchase program authorizing the Company to repurchase up to $1.0 billion of the Company's common stock, which has no expiration date. As of September 30, 2025, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $1,035.0 million, which has no expiration date. We did not purchase any shares directly or enter into any accelerated share repurchase agreements during the three and nine months ended September 30, 2025. The Company plans to initiate $300 million in share repurchases in the fourth quarter of 2025, utilizing the $230 million of after-tax proceeds from the TAFE ownership sale, under the Company's share repurchase program. During the three months ended September 30, 2025 and 2024, the Company declared and paid cash dividends of $0.29 and $0.29 per common share, respectively. During the nine months ended September 30, 2025 and 2024, the Company declared and paid cash dividends of $0.87 and $3.37 per common share, respectively. The Company paid a special variable dividend of $2.50 per common share during the second quarter of 2024. On October 23, 2025, the Company's Board of Directors declared a regular quarterly dividend of $0.29 per common share to be paid on December 15, 2025, to all stockholders of record as of the close of business on November 14, 2025. 51 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) COMMITMENTS, OFF-BALANCE SHEET ARRANGEMENTS AND CONTINGENCIES We are party to a number of commitments and other financial arrangements, which may include off-balance sheet arrangements. At September 30, 2025, we had outstanding guarantees issued to our Argentine finance joint venture, AGCO Capital, of approximately $70.3 million. In addition, we had accrued approximately $13.3 million of outstanding guarantees of residual values that may be owed to our finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future payments under the guarantee is approximately $214.3 million. We sell certain accounts receivable under factoring arrangements to our finance joint ventures and to financial institutions around the world. We account for the sale of such receivables as off balance sheet transactions. Our finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to our dealers. As of September 30, 2025 and December 31, 2024, these finance joint ventures had approximately $87.1 million and $139.2 million, respectively, of outstanding accounts receivable associated with these arrangements. The total finance portfolio in our finance joint ventures was approximately $15.1 billion and $14.5 billion as of September 30, 2025 and December 31, 2024, respectively. The total finance portfolio as of September 30, 2025 and December 31, 2024 included approximately $12.7 billion and $11.3 billion, respectively, of retail receivables and $2.4 billion and $3.2 billion, respectively, of wholesale receivables from AGCO dealers. Contingencies We are party to various claims and lawsuits arising in the normal course of business. We closely monitor these claims and lawsuits and frequently consult with our legal counsel to determine whether they may, when resolved, have a material adverse effect on our financial position or results of operations and accrue and/or disclose loss contingencies as appropriate. Refer to Note 17 of our Condensed Consolidated Financial Statements for further information. OUTLOOK Global industry demand for farm equipment, driven by farm income, is expected to be moderately lower during 2025 in most major markets compared to 2024. Our net sales are expected to moderately decrease in 2025 compared to 2024, resulting from lower sales volumes partially offset by pricing, favorable currency translation and sales mix. Operating margins will reflect the impact of lower net sales, lower production volumes, partially offset by increased cost controls and flat engineering expenses. Our outlook is based on current assumptions regarding a number of factors including demand, currency stability, pricing and market share gains. If our assumptions are incorrect, or other issues arise or return, such as tariffs or a worsening of our supply chain, our results of operations will be adversely impacted. Refer to “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates estimates, including those related to discount and sales incentive allowances, deferred income taxes and uncertain income tax positions, pensions, goodwill, other intangible and long-lived assets. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. A description of critical accounting policies and related judgments and estimates that affect the preparation of our Condensed Consolidated Financial Statements is set forth in our Annual Report on Form 10-K for the year ended December 31, 2024. 52 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) FORWARD-LOOKING STATEMENTS Certain statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q are forward-looking, including certain statements set forth under the headings “Liquidity and Capital Resources” and “Outlook.” Forward-looking statements reflect assumptions, expectations, projections, intentions or beliefs about future events. These statements, which may relate to such matters as earnings, net sales, margins, industry conditions, market demand, commodity prices, farm incomes, weather conditions, foreign currency translation impacts, general economic outlook, dividends, share repurchases, availability of financing, product development and enhancement, factory productivity, production and sales volumes, benefits from cost reduction initiatives, material costs, pricing impacts, tax rates, compliance with loan covenants, capital expenditures and working capital and debt service requirements are “forward-looking statements” within the meaning of the federal securities laws. These statements do not relate strictly to historical or current facts, and you can identify certain of these statements, but not necessarily all, by the use of the words “anticipate,” “assumed,” “indicate,” “estimate,” “believe,” “predict,” “forecast,” “rely,” “expect,” “continue,” “grow” and other words of similar meaning. Although we believe that the expectations and assumptions reflected in these statements are reasonable in view of the information currently available to us, there can be no assurance that these expectations will prove to be correct. These forward-looking statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in or implied by the forward-looking statements. Adverse changes in any of the following factors could cause actual results to differ materially from the forward-looking statements: • general economic and capital market conditions; • availability of credit to our retail customers; • the worldwide demand for agricultural products; • grain stock levels and the levels of new and used field inventories; • cost of steel and other raw materials; • energy costs; • performance and collectability of the accounts receivable originated or owned by AGCO or our finance joint ventures; • government policies, tariffs and subsidies; • uncertainty regarding changes in the international tariff regimes (including implementation of new tariffs and retaliatory measures) and product embargoes and their impact on the cost of the products that we sell; • weather conditions; • interest and foreign currency exchange rates; • limitations on ability to repatriate funds; • inflation, including in individual countries that have been designated as highly inflationary; • pricing and product actions taken by competitors; • commodity prices, acreage planted and crop yields; • farm income, land values, debt levels and access to credit; • pervasive livestock diseases; • production disruptions, including due to component and raw material availability; • production levels and capacity constraints at our facilities, including those resulting from plant expansions and systems upgrades; • integration of recent and future acquisitions, including the completed acquisition on April 1, 2024 of the Trimble ag assets and formation of the joint venture, PTx Trimble, and the ability to obtain the expected results; • our expansion plans in emerging markets; • supply constraints, including energy shortages; • our cost reduction and control initiatives; • our research and development efforts; • dealer and distributor actions; • regulations affecting privacy and data protection; 53 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) • technological difficulties; • the impact of future pandemics on product demand and production; • the occurrence of future cyberattacks, including ransomware attacks; and • the conflict in Ukraine. The recent announcements of significant trade policy and tariff actions by the U.S. government, including but not limited to tariffs on imported steel and aluminum products, tariffs on certain imports from China, tariffs on certain imports from Canada and Mexico, announced trade deal between the United States and European Union of baseline tariffs on certain imports from the European Union, and baseline tariffs on most imports from most other countries, continue to create significant uncertainty and potential risks for our business. These announcements in some cases were followed by delays and changes in implementation, and the ultimate tariff structures are unclear at the current time. Depending on the countries affected, increases in tariffs have raised the costs of inputs used in manufacturing our products, which in turn has impacted our cost of goods sold. Additionally, higher tariffs may lead to increased after-tariff sales prices for the products we sell. The impacts of the tariffs may be partially mitigated as a majority of our sales and manufacturing takes place outside the United States. While we are actively exploring opportunities to mitigate these increased costs, there can be no guarantee that we will be able to fully offset the impact of these tariffs. Furthermore, the imposition of retaliatory tariffs from other countries on our exported products could negatively affect our sales and marketplace access in those countries. Moreover, the uncertainty of the tariff changes and any future trade policy changes has adversely impacted, and is expected to continue to adversely impact, our sales. We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products. In addition, the potential of future natural gas shortages in Europe, as well as predicted overall shortages in other energy sources, could also negatively impact our production and that of our supply chain in the future. There can be no assurance that there will not be future disruptions. We have a substantial amount of indebtedness, and, as a result, we are subject to certain restrictive covenants and payment obligations that may adversely affect our ability to operate and expand our business. Any forward-looking statement should be considered in light of such important factors. For additional factors and additional information regarding these factors, see “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024. New factors that could cause actual results to differ materially from those described above emerge from time to time, and it is not possible for us to predict all of such factors or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and we disclaim any obligation to update the information contained in such statement to reflect subsequent developments or information except as required by law. 54 Table of Contents