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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-24 · 119 added, 127 removed, 383 unchanged (39% of the section changed)

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

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

We deliver value to farmers and Original Equipment Manufacturer (“OEM”) customers through our differentiated brand portfolio including leading brands Fendt ® , Massey Ferguson ® , PTx and Valtra ® .

Our full line of equipment, smart farming solutions and services helps farmers sustainably feed our world.

AGCO is a global leader in agricultural machinery and precision agriculture technologies.

Driven by a Farmer-First strategy, AGCO delivers value through its differentiated leading brands, Fendt ™ , Massey Ferguson ™ , PTx ™ and Valtra ™ .

AGCO’s high-performance equipment and smart farming solutions, including brand-agnostic retrofit technologies and autonomous offerings, empower farmers to drive productivity while sustainably feeding the world.

We distribute most of our products through approximately 2,800 independent dealers and distributors in approximately 140 countries.

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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 enforceability of the tariffs, any changes to such tariffs and any future trade policy changes has adversely impacted, and is expected to continue to adversely impact, our sales.

Financial Highlights

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

The following table sets forth the percentage relationship to net sales of certain items included in our Consolidated Statements of Operations (in millions, except percentages):

Years Ended December 31,

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Interest expense, net 66.4 0.7 93.0 0.8

Other expense, net 218.5 1.9 362.3 2.5

Other expense (income), net (72.7) (0.7) 218.5 1.9

Income (loss) before income taxes and equity in net earnings of affiliates 602.0 6.0 (433.6) (3.7)

Income tax provision 98.4 0.8 230.4 1.6

Income tax provision (benefit) (77.4) (0.8) 98.4 0.8

Income (loss) before equity in net earnings of affiliates 679.4 6.7 (532.0) (4.6)

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Net income (loss) attributable to AGCO Corporation for 2025 was $726.5 million, or $9.75 per diluted share, compared to $(424.8) million, or $(5.69) per diluted share, for 2024.

Net sales for 2024 were $11,661.9 million, or 19.1% lower than 2023, primarily due to lower sales volumes resulting from softer industry sales reflecting lower end market demand and unfavorable currency impacts.

Net sales for 2025 were $10,082.0 million, or 13.5% lower than 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 (loss) from operations was $595.7 million in 2025 compared to $(122.1) million in 2024.

The decrease in income from operations during 2024 was primarily the result of lower sales and production volumes reflecting weak industry conditions, the recognition of the loss on sale of the majority of the Company's G&P business as well as impairment charges and restructuring and business optimization expenses.

During 2024, we recorded a loss on sale of business of $507.3 million related to the sale of the majority of the Company's G&P business and impairment charges of $369.5 million primarily related to the impairment of goodwill.

Additionally, the increase in income from operations during 2025 was the result of decreases in restructuring and business optimization expenses and selling, general and administrative expenses (“SG&A expenses”) primarily related to lower compensation costs 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 1.1% and (0.9)% in 2025 and 2024, respectively.

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Unit sales of tractors and combines decreased approximately 5.6% during 2025 compared to 2024.

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

The primary driver of the decrease 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.

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Results of Operations

Gross profit as a percentage of net sales decreased during 2024 compared to 2023, primarily due to lower production volumes and unfavorable net pricing impacts.

Gross profit as a percentage of net sales increased during 2025 compared to 2024, primarily due to lower manufacturing costs.

Selling, general and administrative expenses (“SG&A expenses”) as a percentage of net sales, were higher during 2025 compared to 2024 as net sales decreased at a faster rate than SG&A expenses.

The absolute level of SG&A expenses decreased during 2024 primarily due to lower compensation costs and decreases in stock compensation expense.

The absolute level of SG&A expenses decreased during 2025 primarily 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 stock compensation expense of $27.7 million and $17.9 million during 2025 and 2024, respectively, within SG&A expenses, as is more fully explained in Note 15 of our Consolidated Financial Statements.

These decreases were partially offset by PTx Trimble joint venture transaction-related costs and transaction costs related to the divestiture of the majority of the Company's G&P business.

Engineering expenses as a percentage of net sales, were higher during 2025 compared to 2024 as net sales decreased at a faster rate than engineering expenses.

The absolute level of engineering expenses decreased during 2024 primarily due to lower investment partially offset by increased engineering expenses related to the PTx Trimble joint venture.

We recorded impairment charges of $369.5 million and $4.1 million during 2024 and 2023, respectively.

During 2024, we recorded impairment charges of $369.5 million primarily related to the impairment of goodwill related to the Company’s PTx Trimble North America reporting unit, other assets and an investment in affiliate.

In 2023, we recorded an impairment charge related to the impairment of certain patents and technology amortizing intangible assets from a prior acquisition.

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

The absolute level of engineering expenses remained relatively consistent during 2025.

During 2025, we recorded impairment charges of $10.0 million, primarily related to the impairment of certain other assets.

During 2024, we recorded impairment charges of $369.5 million, primarily related to the impairment of goodwill related to the Company’s PTx Trimble North America reporting unit, certain other assets and an investment in affiliate.

We recorded restructuring and business optimization expenses of $82.2 million and $172.7 million during 2025 and 2024, respectively.

The Company is focused on operational efficiencies to build a more resilient business.

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.

The restructuring expenses recorded during 2024 and 2023 primarily related to severance, business optimization and other related costs associated with the Company's Program and rationalization of certain manufacturing facilities and administrative offices.

The Company estimated that it would 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 a substantial portion of the charges by the end of fiscal year 2025.

The restructuring expenses recorded during 2025 and 2024 primarily related to severance, business optimization and other related costs associated with the Company's Program.

Refer to Note 13 of our Consolidated Financial Statements for further information.

We recorded a loss on sale of business of $507.3 million during 2024 related to the sale of the majority of the Company's G&P business.

There was no loss recorded during 2023.

We recorded a loss on sale of business of $10.8 million during 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, partially offset by a gain related to an immaterial divestiture.

During 2024, we recorded a loss on sale of business of $507.3 million related to the sale of the majority of the Company's G&P business.

Refer to Note 3 of our Consolidated Financial Statements for further information.

Interest expense, net was $93.0 million for 2024 compared to $4.6 million for 2023 resulting primarily from an increase in interest expense resulting from the increased debt levels related to financing the PTx Trimble joint venture transaction.

Interest expense, net was $66.4 million for 2025 compared to $93.0 million for 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, net was $218.5 million in 2024 compared to $362.3 million in 2023.

The decrease was primarily driven by a decrease in foreign currency exchanges losses which were approximately $85.1 million and $202.1 million in 2024 and 2023, respectively.

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

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

Other expense (income), net was $(72.7) million in 2025 compared to $218.5 million in 2024.

During 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 18 of the Consolidated Financial Statements for further information.

In 2024, the Company terminated its U.S.

qualified defined benefit plan and the settlement resulted in the recognition of approximately $18.5 million in “Other expense, net” representing the amounts previously recognized in accumulated other comprehensive loss.

Losses on sales of receivables, primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and Brazil and included in "Other expense, net," were approximately $118.2 million and $148.4 million in 2024 and 2023, respectively.

The Company recorded business interruption insurance recoveries related to the 2022 cyber attack of $5.0 million and $20.0 million in 2024 and 2023, respectively.

We recorded an income tax provision of $98.4 million in 2024 compared to $230.4 million in 2023.

The decrease is a result of a decrease in our earnings compared to 2023.

qualified defined benefit plan and the settlement resulted in the recognition of approximately $18.5 million within “Other expense (income), net” representing the amounts previously recognized in “Accumulated other comprehensive loss.” Foreign currency exchange losses were approximately $81.9 million for 2025, compared to $85.1 million for 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 $90.3 million and $118.2 million, in 2025 and 2024, respectively.

During 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 $(77.4) million in 2025 compared to $98.4 million in 2024.

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

Our income tax provision as of December 31, 2025 includes a net federal tax benefit of $179.8 million related to a legal entity reorganization, which excludes approximately $82.0 million of additional benefits related to a change in the Company's permanent reinvestment assertion and state tax benefits associated with the reorganization.

Based on a favorable tax ruling in Brazil regarding the taxability of certain state value added tax incentive benefits, the Company recorded a $29.6 million reduction in the provision for income taxes during the year ended December 31, 2024.

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

This benefit was partially offset by a provision of approximately $26.4 million that we recorded in 2023 associated with our enrollment in a Brazilian tax amnesty program.

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

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures, was $39.6 million in 2025 compared to $46.4 million in 2024.

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

Refer to Note 10 of our Consolidated Financial Statements for further information.

Refer to Note 10 of the Consolidated Financial Statements for further information.

Net loss attributable to noncontrolling interests was $7.5 million in 2025 compared to $60.8 million in 2024.

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

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

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

The following table sets forth, for the year ended December 31, 2025, the impact to net sales of currency translation by geographical segment (in millions, except percentages):

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APA 564.2 626.3 (62.1) (9.9) % 0.6 0.1 %

Total Segments

10,082.0 10,845.4 (763.4) (7.0) % 273.6 2.5 %

— 816.5 (816.5) (100.0) % — — %

$ 10,082.0 $ 11,661.9 $ (1,579.9) (13.5) % $ 273.6 2.3 %

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(1) “Other” represents the results for the year ended December 31, 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, respectively.

$ 6,736.7 $ 6,712.3 $ 24.4

Income from operations

1,006.8 961.3 45.5

Net sales in EME decreased in 2024 compared to 2023, primarily due to sales volume declines, most significantly in mid-range and high-horsepower tractors and hay tools.

Income from operations decreased by $174.9 million in 2024 compared to 2023 as a result of lower sales and production volumes, partially offset by decreases in engineering expenses and SG&A expenses primarily related to lower variable compensation expenses and travel costs.

Net sales in EME increased in 2025 compared to 2024, primarily due to favorable foreign currency translation, partially offset by sales volume declines, most significantly in high-horsepower tractors and combines.

Income from operations increased by $45.5 million in 2025 compared to 2024 as a result of positive net pricing, partially offset by lower sales and production volumes and higher warranty costs.

North America

$ 1,665.5 $ 2,298.3 $ (632.8)

Income from Operations

Income (loss) from operations

(112.0) 84.0 (196.0)

Net sales in North America decreased in 2024 compared to 2023, primarily due to sales volume declines, most significantly in mid-range and high-horsepower tractors and hay tools.

Income from operations decreased by $283.5 million compared to 2023 as a result of lower sales and production volumes.

Net sales in North America decreased in 2025 compared to 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors, sprayers, hay tools and combines.

Income (loss) from operations decreased by $196.0 million compared to 2024 as a result of lower sales and production volumes.

South America

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51.4 87.0 (35.6)

Net sales decreased in South America in 2024 compared to 2023, primarily due to sales volume declines, most significantly in tractors, combines and implements and unfavorable foreign currency translation.

Income from operations decreased $282.0 million in 2024 compared to 2023 as a result of lower sales and production volumes and negative pricing impacts, partially offset by decreases in SG&A expenses primarily related to lower variable compensation expenses.

Net sales decreased in South America in 2025 compared to 2024, primarily due to sales volume declines, most significantly in tractors and implements, negative pricing impacts and unfavorable foreign currency translation.

operations decreased $35.6 million in 2025 compared to 2024, as a result of lower sales and negative pricing impacts, partially offset by lower manufacturing costs.

$ 564.2 $ 626.3 $ (62.1)

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27.8 31.2 (3.4)

Net sales decreased in APA in 2024 compared to 2023, primarily due to lower sales volumes of high horse power tractors and hay tools and lower sales of grain and protein products.

Net sales decreased in APA in 2025 compared to 2024, primarily due to sales volume declines, most significantly in high-horsepower tractors, hay tools and sprayers.

Income from operations decreased $3.4 million in 2025 compared to 2024, primarily due to lower sales and production volumes.

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A comparison of the results of operations for 2024 versus that of 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024.

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, relatively flat pricing as well as unfavorable foreign currency translation.

Operating margins will reflect the impact of lower net sales, lower production volumes, increased cost controls and moderately lower investments in engineering.

Our results will no longer reflect the results of operations for the majority of the Company's G&P business which was divested on November 1, 2024.

Global industry demand for farm equipment, driven by farm income, is expected to be relatively flat during 2026 in most major markets compared to 2025.

Our net sales are expected to modestly increase in 2026 compared to 2025, resulting from positive pricing, favorable currency translation and sales mix.

Operating margins will reflect the impact of higher net sales, positive pricing, relatively flat production volumes and continued cost controls, partially offset by tariff headwinds.

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

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Our financing requirements 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, subject to the discussion below with respect to financing of the PTx Trimble joint venture transaction.

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 12 to the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data.” We believe that the facilities and borrowings 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):

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EIB Senior term loan due 2030

Senior term loans due between 2025 and 2028

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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 December 31, 2025, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow $1,250.0 million.

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As of December 31, 2025, the Company had no outstanding borrowings under the revolving credit facility.

On January 25, 2024, the Company entered into an additional multi-currency Finance Contract with the European Investment Bank (“EIB”) permitting the Company to borrow up to €170.0 million, for which the proceeds will be used in a similar manner as the EIB Senior Term Loan due 2029.

On February 15, 2024, the Company borrowed €170.0 million under the arrangement.

The loan matures on February 15, 2030.

As of December 31, 2024, there was €170.0 million (or approximately $176.4 million) outstanding under the EIB Senior Term Loan due 2030.

On March 21, 2024, the Company issued (i) $400.0 million aggregate principal amount of the 2027 Notes and (ii)$700.0 million aggregate principal amount of the 2034 Notes.

The Notes are unsecured and unsubordinated indebtedness of the Company and are guaranteed on a senior unsecured basis, jointly and severally, by certain direct and indirect subsidiaries of the Company.

As of December 31, 2024, the Company had $400.0 million and $700.0 million of borrowings under the 2027 Notes and 2034 Notes, respectively.

The PTx Trimble joint venture transaction closed on April 1, 2024.

The Company financed the joint venture transaction through a combination of the Senior Notes due 2027 and 2034, the Term Loan Facility and the remainder through other borrowings and cash on hand.

The Company had redeemable noncontrolling interests of $299.2 million as of December 31, 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 the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further information.

On November 1, 2024, the Company completed the sale of the majority of the G&P business and received net proceeds of $630.7 million from the sale.

The proceeds from the sale were used to repay the Term Loan Facility and reduce borrowings under the Credit Facility.

Subsequent to December 31, 2024, on January 24, 2025, the Company repaid €250.0 million (or approximately $262.3 million) upon maturity of the EIB Senior term loan due 2025.

The Company is in compliance with the financial covenants contained in these facilities and expects to continue to maintain such compliance.

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Refer to Note 12 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our current facilities, including the financial covenants contained in each debt instrument.

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 40.6% at December 31, 2024 compared to 23.0% at December 31, 2023.

The increase largely reflects the indebtedness incurred to pay the purchase price attendant to the PTx Trimble joint venture transaction.

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 35.8% and 40.6% at December 31, 2025 and 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”).

Refer to Note 12 of our Consolidated Financial Statements for further discussion of these debt obligations.

Refer to Note 12 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further discussion of these debt obligations.

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.

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Income from operations

Net loss attributable to obligor group

Net income attributable to obligor group

____________________________________

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

The cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements that remains outstanding as of December 31, 2024 and 2023 was approximately $2.3 billion and $2.5 billion, respectively.

The cash received from receivables sold under these accounts receivable sales agreements that remains outstanding as of December 31, 2025 and 2024 was approximately $2.1 billion and $2.3 billion, respectively.

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

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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.

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

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

As of December 31, 2025 and 2024, the amount outstanding that remains unpaid to the banks or other intermediaries associated with these programs totaled approximately $31.7 million and $50.6 million, respectively.

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Cash flows provided by operating activities were approximately $988.1 million during 2025 compared to approximately $689.9 million during 2024.

The decrease during 2024 compared to 2023 was primarily driven by a decrease in net income in 2024 compared to 2023.

The increase during 2025 compared to 2024 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 $1,467.0 million in working capital at December 31, 2025, as compared with $1,312.0 million at December 31, 2024.

Inventories as of December 31, 2024 were approximately $2,731.3 million as compared to $3,440.7 million as of December 31, 2023 primarily due to lower production.

Inventories as of December 31, 2025 were approximately $2,709.3 million as compared to $2,731.3 million as of December 31, 2024.

Accounts and notes receivable, net at December 31, 2025 were approximately $188.0 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 December 31, 2024 were approximately $828.5 million lower than at December 31, 2023.

Accounts payable and Accrued expenses as of December 31, 2025 were approximately $207.1 million higher than at December 31, 2024.

Capital expenditures for 2025 were approximately $247.9 million compared to $393.3 million for the same period in 2024.

Share Repurchase Program 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.

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.

In November 2025, the Company entered into accelerated share repurchase (“ASR”) agreements with two financial institutions to repurchase an aggregate of $250.0 million of shares of its common stock.

The Company received approximately 1,997,204 shares associated with these transactions as of December 31, 2025.

In February 2026, the Company received an additional 333,755 shares upon final settlement of its November 2025 ASR agreements.

In November 2024, the Company entered into an 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.

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As of December 31, 2025, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $785.0 million, which has no expiration date.

On April 25, 2024, the Company's Board of Directors declared a special variable dividend of $2.50 per common share that was paid during the second quarter of 2024.

During the years ended December 31, 2025 and 2024, the Company declared and paid cash dividends of $1.16 and $3.66 per common share, respectively.

On January 16, 2025, the Company's Board of Directors declared a regular quarterly dividend of $0.29 per common share to be paid on March 14, 2025, to all stockholders of record as of the close of business February 14, 2025.

The Company paid a special variable dividend of $2.50 per common share that was paid during the second quarter of 2024.

On January 15, 2026, the Company's Board of Directors declared a regular quarterly dividend of $0.29 per common share to be paid on March 16, 2026, to all stockholders of record as of the close of business on February 13, 2026.

Contractual Obligations and Cash Requirements

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The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt.

Refer to the discussion above and Note 12 of the Consolidated Financial Statements for additional information regarding our indebtedness.

Refer to the discussion above and Note 12 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our indebtedness.

Finance and operating lease obligations – As of December 31, 2025, we had approximately $0.6 million and $55.5 million of payments due during the year ending December 31, 2026, related to finance and operating lease obligations, respectively.

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

Refer to Note 23 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our lease obligations.

Unconditional purchase obligations – As of December 31, 2025, we had approximately $161.6 million of outstanding purchase obligations payable during the year ending December 31, 2026.

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Uncertain tax positions – As of December 31, 2025, we had approximately $3.8 million of income tax liabilities related to uncertain income tax provisions connected with ongoing income tax audits in various jurisdictions that we expect to pay or settle within the next 12 months.

Refer to Note 19 of the Consolidated Financial Statements for additional information regarding our uncertain tax positions.

These liabilities and related income tax audits are subject to statutory expiration.

Refer to Note 19 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our uncertain tax positions.

Pensions - It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required.

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The timing and amounts of future contributions are dependent upon the funding status of the plans, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors.

Refer to Note 20 of the Consolidated Financial Statements for additional information regarding our pension and postretirement plans.

Refer to Note 20 of the Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our pension and postretirement plans.

These obligations comprise a majority of our other short-term and long-term obligations.

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1:18-cv-00827-CFC.

In July 2022, the case was tried before a jury, which determined that the Company and Precision Planting had not infringed the Deere patents.

Following customary post-trial procedures, the Court entered a judgement in the Company’s favor, and Deere appealed the judgment to the U.S.

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.

The case remains subject to the right of Deere to file for a writ of certiorari from the U.S.

Supreme Court.

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

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

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 judgment is final.

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 22 of our Consolidated Financial Statements for further information.

Refer to Note 22 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further information.

Related Party Transactions

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

See Note 18 of our Consolidated Financial Statements for information regarding related party transactions and their impact to our consolidated results of operations and financial position.

Refer to Note 18 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for information regarding related party transactions and their impact to our consolidated results of operations and financial position.

Foreign Currency Risk Management

We have significant manufacturing locations in the United States, France, Germany, Finland, Italy, China and Brazil, and we purchase a portion of our tractors, combines and components from third-party foreign suppliers, primarily in various European countries and in Japan.

We have significant manufacturing locations in the United States, France, Germany, Finland, Italy, China and Brazil, and we purchase a portion of our tractors, other machinery and components from third-party foreign suppliers, primarily in various European countries and in Japan.

We also sell products in approximately 140 countries throughout the world.

The majority of

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

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

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

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

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

For the year ended December 31, 2024, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $412.1 million and total assets of approximately 6.5 billion Turkish lira (or approximately $185.2 million).

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

For the year ended and as of December 31, 2025, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $262.9 million and total assets of approximately 6.0 billion Turkish lira (or approximately $139.6 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 4.9 billion Turkish lira (or approximately $114.5 million) and approximately 2.7 billion Turkish lira (or approximately $62.6 million), respectively, as of December 31, 2025.

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

As a consequence of these limitations, the spread between the official government exchange rate and the exchange rates resulting implicitly from certain capital market operations, usually effected to obtain United States dollars, had broadened significantly.

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

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

For the year ended December 31, 2024, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $215.9 million and total assets of approximately 258.3 billion pesos (or approximately $250.6 million).

For the year ended and as of December 31, 2025, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $188.4 million and total assets of approximately 313.3 billion pesos (or approximately $216.2 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 85.0 billion pesos (or approximately $58.7 million), inclusive of approximately 16.5 billion pesos (or approximately $11.4 million) in cash and cash equivalents, as of December 31, 2025.

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The Company's finance joint venture in Argentina, AGCO Capital, has net monetary assets denominated in pesos at the official government rate of approximately 4.3 billion pesos (or approximately $3.0 million) as of December 31, 2025.

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

All gains and losses resulting from AGCO Capital's remeasurement of its monetary asset and liabilities are reported in “Equity in net earnings of affiliates” within the Company's

Consolidated Statements of Operations.

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

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In addition, we use derivative and non-derivative instruments to hedge a portion of our net investment in foreign operations against adverse movements in exchange rates.

Refer to Note 14 of our Consolidated Financial Statements for further information about our hedging transactions and derivative instruments.

Refer to Note 14 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further information about our hedging transactions and derivative instruments.

Assuming a 10% change relative to the currency of the hedge contracts, the fair value of the foreign currency instruments could be negatively impacted by approximately $25.6 million as of December 31, 2025.

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From time to time, we enter into interest rate swap agreements to manage our exposure to interest rate fluctuations.

See Notes 12 and 14 of our Consolidated Financial Statements for additional information.

Based on our floating rate debt and our accounts receivable sales facilities outstanding at December 31, 2024, a 10% increase in interest rates would have increased collectively, “Interest expense, net” and “Other expense, net” for the year ended December 31, 2024, by approximately $12.8 million.

Refer to Note 12 and Note 14 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional information.

Based on our floating rate debt and our accounts receivable sales facilities outstanding at December 31, 2025, a 10% increase in interest rates would have increased collectively, “Interest expense, net” and “Other expense (income), net” for the year ended December 31, 2025, by approximately $7.8 million.

Recent Accounting Pronouncements

See Note 1 of our Consolidated Financial Statements for information regarding recent accounting pronouncements and their impact to our consolidated results of operations and financial position.

Refer to Note 1 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for information regarding recent accounting pronouncements and their impact to our consolidated results of operations and financial position.

Critical Accounting Estimates

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

At December 31, 2024, we had recorded an allowance for discounts and sales incentives of approximately $1,018.8 million that will be paid either through a reduction of future cash settlements of receivables and through credit memos to our dealers or through reductions in retail financing rates paid to our finance joint ventures.

At December 31, 2025 and 2024, we had recorded an allowance for discounts and sales incentives of approximately $951.8 million and $1,018.8 million, respectively, that will be paid either through a reduction of future cash settlements of receivables and through credit memos to our dealers or through reductions in retail financing rates paid to our finance joint ventures.

If we were to allow an additional 1% of sales incentives and discounts at the time of retail sale for those sales subject to such discount programs, our reserve would increase by approximately $33.1 million as of December 31, 2025.

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Deferred Income Taxes and Uncertain Income Tax Positions

We recorded an income tax provision of $98.4 million in 2024 compared to $230.4 million in 2023 and $296.6 million in 2022.

We recorded an income tax provision (benefit) of $(77.4) million in 2025 compared to $98.4 million in 2024 and $230.4 million in 2023.

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

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

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

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At December 31, 2025 and 2024, we had total valuation allowances as an offset to our gross deferred tax assets of $179.5 million and $147.2 million, respectively.

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

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

and certain foreign jurisdictions.

Realization of the remaining deferred tax assets as of December 31, 2025 depends on generating sufficient taxable income in future periods, net of reversing deferred tax liabilities.

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Refer to Note 19 of our Consolidated Financial Statements for further discussion of our uncertain income tax positions.

We sponsor defined qualified benefit pension plans covering certain employees, principally in the United Kingdom, Germany, Switzerland, Finland, France, Norway and Argentina.

We sponsor qualified defined benefit pension plans covering certain employees, principally in the United Kingdom, Germany, Switzerland, Finland, France, Norway and Argentina.

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

The ENPP is closed to new entrants and, as of December 31, 2024, future benefit accruals have been frozen.

The ENPP is closed to new entrants and, as of December 31, 2024, future benefit accruals were frozen.

The Company merged its U.S.

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In connection with the termination process, the Company offered a lump sum benefit payout option to Plan participants, and the remaining assets of the Plan were used to purchase a group annuity contract that transferred the remaining plan liabilities to an insurance carrier.

The termination process was finalized by December 31, 2024 and the settlement resulted in the recognition of approximately $18.5 million within “Other expense, net” within the Company's Consolidated Statements of Operations.

The termination process was finalized by December 31, 2024 and the settlement resulted in the recognition of approximately $18.5 million within “Other expense (income), net” within the Company's Consolidated Statements of Operations.

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

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Unrecognized actuarial net losses related to our defined benefit pension plans and ENPP were $260.4 million as of December 31, 2025 compared to $256.7 million as of December 31, 2024.

The decrease in unrecognized net actuarial losses between years is primarily due to the termination of the U.S.

qualified defined benefits plan, as well as the total net impact of the changes in the assumptions, specifically the increase in the discount rate.

The increase in unrecognized net actuarial losses between years is primarily due to the termination of the U.S.

qualified defined benefit plan in the prior year, as well as the total

net impact of the changes in the assumptions, specifically the decrease in the discount rate.

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

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We have significant goodwill on our balance sheet related to historical acquisitions and the PTx Trimble joint venture transaction in 2024, which we accounted for using the acquisition method of accounting.

We test goodwill for impairment, at

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

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

A reporting unit is an operating segment or one level below an operating segment, for example, a component.

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

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

farm input costs, weather conditions, lower commodity prices and changes in the availability of credit.

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

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

The annual impairment tests completed as of October 1, 2024 indicated the fair value of each of the Company's reporting units was above its respective carrying value except for the PTx Trimble North America reporting unit, which is part of the North America operating segment.

Based on the results of the impairment test, the Company recorded an impairment charge of $351.0 million.

The Company completed the PTx Trimble joint venture transaction on April 1, 2024.

Since that date, the near-term outlook of the reporting unit has deteriorated driven by weak industry demand and lower market penetration.

These conditions led to downward revisions of the Company's forecasts of earnings which resulted in the impairment charge.

We estimated the fair value of the PTx North America reporting unit using an income approach.

The most critical assumptions used in the calculation of the fair value of the reporting unit were the forecasted revenue growth and the discount rate.

If we increased the discount rate used to estimate the fair value of the PTx Trimble North America reporting unit by 1.0 percent, the impairment charge would increase by $130.0 million, and if we decreased the discount rate by 1.0 percent, the impairment charge would decrease by $159.0 million.

Additionally, the Company's PTx Trimble Europe/Middle East reporting unit impairment test resulted in headroom of approximately 21.0 percent.

An increase in the discount rate of 1.0 percent would decrease the headroom to 6.0 percent while a decrease in the discount rate of 1.0 percent would increase the headroom to 40.0 percent.

The annual impairment tests completed as of October 1, 2025 indicated the fair value of each of the Company's reporting units was substantially above its respective carrying value except for the PTx North America reporting unit, which is part of the North America operating segment.

The results of the impairment test indicated the fair value in excess of the carrying value of our PTx North America reporting unit was approximately 16%.

We estimated the fair value of the PTx North America reporting unit using a combination of an income and market approach.

The most critical assumptions used in the calculation of the fair value of the reporting unit were the forecasted revenue growth and the discount rate used in the discounted cash flow model as well as the selection of peer companies and respective revenue multiples used in the guideline public company method.

If we had changed the discount rate assumption used to estimate the fair value of our PTx North America reporting unit as of the annual impairment test under the income approach, in isolation, it would have resulted in a change in the fair value in excess of the carrying value of this reporting unit.

An increase in the discount rate of 1.0 percent would have decreased the headroom to approximately 3% while a decrease in the discount rate of 1.0 percent would have increased the headroom to approximately 32%.

As of December 31, 2025, we had approximately $1,898.8 million of goodwill.

While our annual impairment testing in 2024 now supports the carrying amount of this goodwill, we may be required to re-evaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

Additionally, as the carrying value of the PTx Trimble North America reporting unit approximates its fair value following the impairment charge, the PTx Trimble North America reporting unit is considered at risk of future impairment.

If our assumptions are not realized, or if there are future changes in any of the assumptions due to a change in economic conditions or otherwise, it is possible that a further impairment charge may need to be recorded in the future.

While our annual impairment testing in 2025 supports the carrying amount of this goodwill, we may be required to re-evaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

Long-lived assets

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

What changed 10-K

Item 7. Management’s Discussion and Analysis