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Item 1. Financial Statements

2024-05-03 compared with 2023-11-08 · 372 added, 662 removed, 467 unchanged (69% of the section changed)

FINANCIAL STATEMENTS

AGCO CORPORATION AND SUBSIDIARIES

AGCO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in millions, except share amounts)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current Assets:

Cash, cash equivalents and restricted cash $ 680.7 $ 789.5

Cash and cash equivalents $ 2,455.8 $ 595.5

Accounts and notes receivable, net 1,542.2 1,605.3

12 unchanged sentences

Current Liabilities:

Current portion of long-term debt $ 79.9 $ 187.1

Short-term borrowings 25.9 8.9

Borrowings due within one year $ 300.4 $ 15.0

Accounts payable 1,238.0 1,207.3

14 unchanged sentences

Common stock;

$ 0.01 par value, 150,000,000 shares authorized, 74,879,816 and 74,600,815 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

$ 0.01 par value, 150,000,000 shares authorized, 74,618,984 and 74,517,973 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital — 4.1

6 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in millions, except per share data)

Three Months Ended September 30,

Net sales $ 3,455.5 $ 3,121.6

Cost of goods sold 2,521.5 2,382.7

Gross profit 934.0 738.9

Operating expenses:

Selling, general and administrative expenses 353.6 287.5

Engineering expenses

Amortization of intangibles

Restructuring expenses

Bad debt expense 2.0 ( 1.1 )

Income from operations 423.6 332.1

Interest expense, net

Other expense, net

Income before income taxes and equity in net earnings of affiliates 333.9 296.7

Income tax provision

Income before equity in net earnings of affiliates 258.6 222.5

Equity in net earnings of affiliates

Net income 280.5 237.9

Net loss attributable to noncontrolling interests 0.1 —

Net income attributable to AGCO Corporation and subsidiaries $ 280.6 $ 237.9

Net income per common share attributable to AGCO Corporation and subsidiaries:

$ 3.75 $ 3.19

$ 3.74 $ 3.18

Cash dividends declared and paid per common share $ 0.29 $ 0.24

Weighted average number of common and common equivalent shares outstanding:

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

AGCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in millions, except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Net sales $ 2,928.7 $ 3,333.5

5 unchanged sentences

Amortization of intangibles

Impairment charges — 36.0

Restructuring expenses

Bad debt expense 4.5 2.1

Income from operations 273.6 387.3

14 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

AGCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in millions)

Three Months Ended September 30,

Net income $ 280.5 $ 237.9

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

Foreign currency translation adjustments ( 54.5 ) ( 75.7 )

Defined benefit pension plans, net of tax 1.9 ( 16.9 )

Deferred gains and losses on derivatives, net of tax 0.5 1.3

Other comprehensive loss, net of reclassification adjustments

( 52.1 ) ( 91.3 )

Comprehensive income 228.4 146.6

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to AGCO Corporation and subsidiaries $ 228.5 $ 146.6

Nine Months Ended September 30,

Three Months Ended March 31,

Net income $ 168.0 $ 232.6

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

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 52.0 ) 44.4

1 unchanged sentence

Deferred gains and losses on derivatives, net of tax 6.9 0.5

Other comprehensive income (loss), net of reclassification adjustments

Other comprehensive (loss) income

( 43.4 ) 46.7

3 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

AGCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 168.0 $ 232.6

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation 63.3 53.6

1 unchanged sentence

Stock compensation expense 8.4 14.0

Impairment charges — 36.0

Equity in net earnings of affiliates, net of cash received ( 16.2 ) ( 16.4 )

Deferred income tax (benefit) provision

Deferred income tax benefit

( 7.3 ) ( 3.9 )

Other 17.7 2.4

7 unchanged sentences

Total adjustments ( 538.0 ) ( 789.7 )

Net cash provided by (used in) operating activities

Net cash used in operating activities

( 370.0 ) ( 557.1 )

2 unchanged sentences

Proceeds from sale of property, plant and equipment 0.2 0.1

Investments in unconsolidated affiliates ( 21.3 ) ( 1.6 )

Purchase of businesses, net of cash acquired

( 0.9 ) ( 111.3 )

Investments in unconsolidated affiliates, net

Other — ( 2.6 )

5 unchanged sentences

Payment of minimum tax withholdings on stock compensation ( 9.7 ) ( 17.7 )

Distributions to noncontrolling interest — ( 11.5 )

Payment of debt issuance costs ( 11.9 ) —

1 unchanged sentence

Effects of exchange rate changes on cash, cash equivalents and restricted cash ( 11.9 ) ( 6.5 )

Decrease in cash, cash equivalents and restricted cash ( 108.8 ) ( 282.1 )

Increase (decrease) in cash, cash equivalents and restricted cash

1,860.3 ( 230.8 )

Cash, cash equivalents and restricted cash, beginning of period 595.5 789.5

1 unchanged sentence

See accompanying notes to condensed consolidated financial statements.

AGCO CORPORATION AND SUBSIDIARIES

AGCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5 unchanged sentences

Results for interim periods are not necessarily indicative of the results for the year.

Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation.

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

On the basis of currently available data related to inflation indices and as a result of the devaluation of the Turkish lira relative to the United States dollar, the Turkish economy was determined to be highly inflationary.

On the basis of available data related to inflation indices and as a result of the devaluation of the Turkish lira relative to the United States dollar, the Turkish economy was determined to be highly inflationary during 2022.

A highly inflationary economy is one where the cumulative inflation rate for the three years preceding the beginning of the reporting period, including interim reporting periods, is in excess of 100 percent.

For the nine months ended and as of September 30, 2023, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 292.9 million and total assets of approximately 3.5 billion Turkish lira (or approximately $ 126.5 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 3.0 billion Turkish lira (or approximately $ 109.4 million) and approximately 2.3 billion Turkish lira (or approximately $ 85.4 million), respectively, as of September 30, 2023.

The monetary assets and liabilities were remeasured into U.S.

dollar based on exchange rates as of September 30, 2023.

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

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

As a consequence of these limitations, the spread between the official government exchange rate and the exchange rates resulting implicitly from certain capital market operations, usually effected to obtain U.S.

dollars, has broadened significantly.

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

Remeasurement adjustments for financial statements in highly inflationary economies and other transactional exchange gains and losses are reported in "Other expense, net" within the Company's Condensed Consolidated Statements of Operations.

For the three months ended and as of March 31, 2024, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $ 156.3 million and total assets of approximately 7.3 billion Turkish lira (or approximately $ 225.7 million).

The monetary assets and liabilities denominated in the Turkish lira were approximately 6.5 billion Turkish lira (or approximately $ 201.5 million) and approximately 5.6 billion Turkish lira (or approximately $ 172.3 million), respectively, as of March 31, 2024.

The monetary assets and liabilities were remeasured into United States dollar based on exchange rates as of March 31, 2024.

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

The Company determined that the Argentina economy was highly inflationary during the third quarter of 2018.

For the nine months ended and as of September 30, 2023, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 164.6 million and total assets of approximately 82.8 billion pesos (or approximately $ 240.0 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 25.6 billion pesos (or approximately $ 74.4 million), inclusive of approximately 14.1 billion pesos (or approximately $ 41.0 million) in cash and cash equivalents, as of September 30, 2023.

The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 9.0 billion pesos (or approximately $ 26.2 million) as of September 30, 2023.

The monetary assets and liabilities were remeasured into U.S.

dollar based on exchange rates as of September 30, 2023.

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

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

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

In December 2023, the central bank of Argentina adjusted the official foreign currency exchange rate for the Argentine peso, significantly devaluing the currency relative to the United States dollar.

For the three months ended and as of March 31, 2024, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $ 44.2 million and total assets of approximately 220.8 billion pesos (or approximately $ 265.0 million).

The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 82.1 billion pesos (or approximately $ 98.5 million), inclusive of approximately 33.4 billion pesos (or approximately $ 40.1 million) in cash and cash equivalents, as of March 31, 2024.

The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 16.8 billion pesos (or approximately $ 20.2 million) as of March 31, 2024.

The monetary assets and liabilities were remeasured into United States dollar based on exchange rates as of March 31, 2024.

The Company's finance joint venture in Argentina, AGCO Capital Argentina S.A.

("AGCO Capital") has net monetary assets denominated in pesos at the official government rate of approximately 7.1 billion (or approximately $ 20.5 million) as of September 30, 2023, of which a majority is cash and cash equivalents.

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

Recent Accounting Pronouncements

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

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

In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

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

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

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

For the adoption of the standard by the Company’s finance joint ventures on January 1, 2023 under the modified retrospective approach, the Company recognized the cumulative effect of ASU 2016-13 as an adjustment to the opening balance of

Notes to Condensed Consolidated Financial Statements - Continued

stockholders’ equity as of January 1, 2023 within “Retained earnings.” The cumulative effect was a reduction of approximately $ 5.5 million.

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

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

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

Early adoption was permitted.

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

Refer to Note 10 for further details.

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

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

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

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

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

Immediately following the closing and as a result of the transaction, the Company will own an 85 % interest in the Joint Venture.

The closing is expected in the first half of 2024 and is subject to customary conditions, including compliance with antitrust and similar laws.

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

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

During the three and nine months ended September 30, 2023, the Company paid $ 9.5 million in fees related to the Bridge Facility commitment which were recorded as a deferred asset included within “Other current assets” in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2023 and will be amortized to interest expense over the life of the commitment.

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

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

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

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

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

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

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

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

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

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

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

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

The Company allocated the purchase price to the assets acquired and liabilities

Notes to Condensed Consolidated Financial Statements - Continued

assumed based on preliminary estimates of their fair values as of the acquisition date.

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

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

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

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

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

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

Intangible Asset

Amount Weighted-Average Useful Life

Customer relationships $ 15.4 10 years

Technology 15.4 8 years

Trademarks 5.7 10 years

Non-competition agreements 1.4 5 years

RESTRUCTURING EXPENSES AND IMPAIRMENT CHARGES

Restructuring Expenses

In recent years, the Company has announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the U.S., Europe, South America, Africa and China, as well as the rationalization of its grain and protein business, in order to reduce costs in response to fluctuating global market demand.

Restructuring expenses activity during the three and nine months ended September 30, 2023 is summarized as follows (in millions):

Employee Severance Other Related

Closure Costs Total

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

First quarter 2023 provision 1.4 — 1.4

First quarter 2023 cash activity ( 1.0 ) — ( 1.0 )

Balance as of March 31, 2023 $ 7.2 $ — $ 7.2

Second quarter 2023 provision 4.1 2.0 6.1

Second quarter 2023 cash activity ( 1.7 ) — ( 1.7 )

Foreign currency translation ( 0.4 ) — ( 0.4 )

Balance as of June 30, 2023 $ 9.2 $ 2.0 $ 11.2

Third quarter 2023 provision 0.8 — 0.8

Third quarter 2023 cash activity ( 2.8 ) ( 2.0 ) ( 4.8 )

Foreign currency translation ( 0.7 ) — ( 0.7 )

Balance as of September 30, 2023 $ 6.5 $ — $ 6.5

Restructuring expenses activity during the three and nine months ended September 30, 2022 is summarized as follows (in millions):

("AGCO Capital"), had net monetary assets denominated in pesos at the official government rate of approximately 11.8 billion (or approximately $ 14.1 million) as of March 31, 2024, of which a majority is cash and cash equivalents.

All gains and losses resulting from AGCO Capital's remeasurement of its monetary assets and liabilities are reported as part of AGCO Capital's net income, our share of which is included in “Equity in net earnings of affiliates” within our Condensed Consolidated Statements of Operations.

New Accounting Pronouncements to be Adopted

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

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

The ASU is effective for public entities for fiscal years

Notes to Condensed Consolidated Financial Statements - Continued

Employee Severance Other Related Closure Costs Total

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

First quarter 2022 provision 3.0 — 3.0

First quarter 2022 cash activity ( 3.4 ) — ( 3.4 )

Foreign currency translation ( 0.3 ) 0.1 ( 0.2 )

Balance as of March 31, 2022 $ 13.8 $ 0.3 $ 14.1

Second quarter 2022 provision 0.8 — 0.8

Second quarter 2022 provision reversal ( 0.4 ) — ( 0.4 )

Second quarter 2022 cash activity ( 3.3 ) — ( 3.3 )

Foreign currency translation ( 0.6 ) — ( 0.6 )

Balance as of June 30, 2022 $ 10.3 $ 0.3 $ 10.6

Third quarter 2022 provision 1.0 — 1.0

Third quarter 2022 cash activity ( 3.4 ) — ( 3.4 )

Foreign currency translation ( 0.6 ) — ( 0.6 )

Balance as of September 30, 2022 $ 7.3 $ 0.3 $ 7.6

Impairment Charges

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

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

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

STOCK COMPENSATION PLANS

The Company recorded stock compensation expense as follows for the three and nine months ended September 30, 2023 and 2022 (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Cost of goods sold $ 0.4 $ 0.4 $ 1.4 $ 1.0

Selling, general and administrative expenses 9.8 7.4 36.1 24.4

Total stock compensation expense $ 10.2 $ 7.8 $ 37.5 $ 25.4

Stock Incentive Plan

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

As of September 30, 2023, of the 10,000,000 shares reserved for issuance under the Plan, 3,581,555 shares were available for grant, assuming the maximum performance level, or 200 %, and target, or 100 %, total shareholder return are achieved related to the performance award grants discussed below.

beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted.

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

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

Improvements to Income Tax Disclosures".

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

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

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

Early adoption is permitted.

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

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

(“Trimble”) and PTx Trimble, LLC (“PTx Trimble” or the "Joint Venture"), formerly known as Trimble Solutions, LLC, which was subsequently amended and restated on March 31, 2024.

On April 1, 2024, pursuant to the terms of an Amended and Restated Sale and Contribution Agreement (the “Agreement”), AGCO and Trimble completed (i) the contribution by Trimble to the Joint Venture of Trimble’s OneAg business, which is Trimble’s agricultural business, excluding certain Global Navigation Satellite System and guidance technologies, and an amount of cash, (ii) the contribution by AGCO to the Joint Venture of its interest in JCA Industries, LLC d/b/a JCA Technologies and an amount of cash, and (iii) the purchase by AGCO from Trimble of membership interests in the Joint Venture in exchange for the payment by AGCO to Trimble of $ 1,954.0 million in cash, subject to customary working capital and other adjustments.

Immediately following the closing and as a result of the transaction, AGCO directly and indirectly owns an 85 % interest in the Joint Venture and Trimble owns a 15 % interest in the Joint Venture.

AGCO will consolidate PTx Trimble within its consolidated financial statements.

The Company has not presented a purchase price allocation related to the fair values of assets acquired, liabilities assumed and noncontrolling interests because the initial accounting for the acquisition was incomplete as of the issuance date of the financial statements.

The purchase price was funded using net proceeds from the issuance of Senior Notes due 2027 and 2034, a term loan facility and the remainder through other borrowings and cash on hand.

Refer to Note 8 for further information.

ACCOUNTS RECEIVABLE SALES AGREEMENTS

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

For the three months ended March 31, 2024 and 2023, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 2.4 billion and $ 1.7 billion, respectively.

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

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

These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations.

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

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

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

For the three months ended March 31, 2024 and 2023, the cash received from these arrangements was approximately $ 213.3 million and $ 233.3 million, respectively.

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

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

The Company reviewed its accounting for the accounts receivable sales agreements and determined that

receivables sold under these agreements should be accounted for as off-balance sheet transactions.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 27.9 million and $ 28.5 million during the three months ended March 31, 2024 and 2023, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

Long-Term Incentive Plan and Related Performance Awards

As of September 30, 2023, the Company had 808,032 performance shares outstanding with a weighted-average grant price of $ 128.89 per share, assuming the Company were to achieve its maximum level of performance, or 200 %, and that the total shareholder return modifier related to the 2023, 2022 and 2021 performances awards are achieved at target, or 100 %.

The total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $ 48.5 million, and the weighted average period over which it is expected to be recognized is approximately two years .

Restricted Stock Unit Awards ("RSUs")

During the nine months ended September 30, 2023, 16,191 shares were issued related to RSUs previously granted in 2020 to certain executives, net of 11,277 shares withheld for taxes.

In addition, the shares issued included an adjustment of 25 % additional shares based on a total margin improvement metric relative to the Company’s defined peer group that was applicable to executive RSU grants made in 2020.

At September 30, 2023, 215,671 restricted stock units were outstanding with weighted-average grant price of $ 122.52 per share.

The total compensation cost related to unearned restricted stock units not yet recognized was approximately $ 18.8 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.

Stock-Settled Appreciation Rights (“SSARs”)

Certain executives and key managers were eligible to receive grants of SSARs through the year ended December 31, 2020.

The Company has not granted any SSARs since the year ended December 31, 2020 and does not currently anticipate granting any SSARs in the future.

There were 98,259 SSARs outstanding as of September 30, 2023.

As of September 30, 2023, the total compensation cost related to the unvested SSARs not yet recognized was approximately $ 0.1 million.

Director Restricted Stock Grants

The Plan provides for annual restricted stock grants of the Company’s common stock to all non-employee directors.

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

The Company recorded stock compensation expense of approximately $ 1.5 million during the nine months ended September 30, 2023 associated with these grants.

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

As of March 31, 2024 and December 31, 2023, these finance joint ventures had approximately $ 218.6 million and $ 211.3 million, respectively, of outstanding accounts receivable associated with these arrangements.

In certain foreign countries, the Company invoices its finance joint ventures directly and the finance joint ventures retain a form of title to the goods delivered to dealers until the dealer makes payment so that the finance joint ventures can recover the goods in the event of dealer or end customer default on payment.

This occurs as the laws of some foreign countries do not provide for a seller’s retention of a security interest in goods in the same manner as established in the United States Uniform Commercial Code.

The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment.

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

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the nine months ended September 30, 2023 are summarized as follows (in millions):

Changes in the carrying amount of goodwill during the three months ended March 31, 2024 are summarized as follows (in millions):

North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

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

Acquisitions — — 8.7 — 8.7

Foreign currency translation ( 0.9 ) ( 3.0 ) ( 10.0 ) ( 2.4 ) ( 16.3 )

Balance as of September 30, 2023 $ 667.5 $ 90.7 $ 440.6 $ 109.7 $ 1,308.5

Balance as of March 31, 2024 $ 667.3 $ 90.5 $ 457.2 $ 110.8 $ 1,325.8

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist.

The Company conducts its annual impairment analyses as of October 1 each year.

The Company conducts its annual impairment analyses as of October 1 st each year.

Notes to Condensed Consolidated Financial Statements - Continued

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2023 are summarized as follows (in millions):

Changes in the carrying amount of acquired intangible assets during the three months ended March 31, 2024 are summarized as follows (in millions):

Gross carrying amounts:

Trademarks and Tradenames Customer Relationships Patents and Technology Land Use Rights Total

Trademarks and Trade Names Customer Relationships Patents and Technology Land Use Rights Total

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

Foreign currency translation ( 1.8 ) ( 4.5 ) ( 2.1 ) ( 0.1 ) ( 8.5 )

Balance as of September 30, 2023 $ 191.1 $ 573.6 $ 149.9 $ 6.1 $ 920.7

Balance as of March 31, 2024 $ 192.5 $ 576.2 $ 146.1 $ 6.2 $ 921.0

Accumulated amortization:

Trademarks and Tradenames Customer Relationships Patents and Technology Land Use Rights Total

Trademarks and Trade Names Customer Relationships Patents and Technology Land Use Rights Total

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

1 unchanged sentence

Foreign currency translation ( 0.9 ) ( 3.7 ) ( 1.9 ) ( 0.1 ) ( 6.6 )

Balance as of September 30, 2023 $ 110.5 $ 467.8 $ 108.7 $ 1.6 $ 688.6

Balance as of March 31, 2024 $ 116.1 $ 488.8 $ 113.7 $ 1.6 $ 720.2

Indefinite-lived intangible assets:

Trademarks and

Trademarks and Trade Names

Balance as of December 31, 2023 $ 85.9

Foreign currency translation ( 0.9 )

Balance as of September 30, 2023 $ 84.4

Balance as of March 31, 2024 $ 85.0

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

Amortization expense related to identifiable intangible assets was $ 14.4 million and $ 43.3 million for the three and nine months ended September 30, 2023, respectively, and $ 14.7 million and $ 45.4 million for the same periods ended September 30, 2022.

External-use software, net, developed by the Company and marketed externally, was approximately $ 6.3 million as of September 30, 2023 and classified within “Intangible assets, net.” Amortization expense related to external-use software was approximately $ 0.3 million and $ 1.4 million for the three and nine months ended September 30, 2023, respectively, and was classified within “Cost of goods sold.”

Long-term debt consisted of the following at September 30, 2023 and December 31, 2022 (in millions):

September 30, 2023 December 31, 2022

Amortization expense related to acquired intangible assets was $ 13.9 million and $ 14.8 million for the three months ended March 31, 2024 and 2023, respectively.

Inventories, net at March 31, 2024 and December 31, 2023 were as follows (in millions):

March 31, 2024 December 31, 2023

Finished goods $ 1,608.6 $ 1,460.7

Repair and replacement parts 831.9 823.1

Work in process 379.8 255.2

Raw materials 961.6 901.7

Inventories, net $ 3,781.9 $ 3,440.7

At March 31, 2024 and December 31, 2023, the Company had recorded $ 247.7 million and $ 238.9 million respectively, as a reserve for surplus and obsolete inventories.

These reserves are reflected within "Inventories, net" within the Company's Condensed Consolidated Balance Sheets.

Notes to Condensed Consolidated Financial Statements - Continued

PRODUCT WARRANTY

The warranty reserve activity for the three months ended March 31, 2024 and 2023, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 800.8 $ 640.0

Accruals for warranties issued

Settlements made and deferred revenue recognized

( 82.0 ) ( 64.5 )

Foreign currency translation ( 17.8 ) 11.8

Balance at March 31 $ 793.1 $ 677.0

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

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

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

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

Approximately $ 661.9 million, $ 679.9 million and $ 572.1 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Approximately $ 131.2 million, $ 120.9 million and $ 104.9 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2024, December 31, 2023, and March 31, 2023, respectively.

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

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

SUPPLIER FINANCE PROGRAMS

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

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

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

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

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

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

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

As of March 31, 2024, payment terms with the majority of the Company’s suppliers are generally 30 to 180 days, which correspond to the contractual terms, with rates that are based on market rates (such as SOFR) plus a credit spread.

There are no assets pledged as security under the programs.

As of March 31, 2024 and December 31, 2023, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 87.5 million and $ 82.7 million, respectively, and are reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.

Notes to Condensed Consolidated Financial Statements - Continued

Long-term debt consisted of the following at March 31, 2024 and December 31, 2023 (in millions):

March 31, 2024 December 31, 2023

Credit facility, expires 2027 $ 580.0 $ —

1.002 % Senior term loan due 2025

1.002 % EIB Senior term loan due 2025

EIB Senior Term Loan due 2029

EIB Senior Term Loan due 2030 183.4 —

Senior term loans due between 2025 and 2028

0.800 % Senior notes due 2028

5.450 % Senior notes due 2027

5.800 % Senior notes due 2034

Term Loan Facility borrowings

Other long-term debt 2.9 3.1

1 unchanged sentence

3,697.4 1,379.5

Senior term loans due 2023, net of debt issuance costs ( 77.7 ) ( 184.9 )

Current portion of other long-term debt ( 2.0 ) ( 2.3 )

Total long-term indebtedness, less current portion $ 1,919.7 $ 1,264.8

Notes to Condensed Consolidated Financial Statements - Continued

Credit Facility

1.002 % EIB Senior term loan due 2025

Total long-term indebtedness

$ 3,425.7 $ 1,377.2

Credit Facility and Term Loan Facility

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

1 unchanged sentence

An initial borrowing under the credit facility was used to repay and retire a $ 240.0 million short-term multi-currency revolving credit facility with Rabobank that matured on March 31, 2023.

The credit facility consists of a $ 325.0 million U.S.

dollar tranche and a $ 925.0 million multi-currency tranche for loans denominated in U.S.

Dollars, Euros or other currencies to be agreed upon.

The Credit Facility consists of a $ 325.0 million United States dollar tranche and a $ 925.0 million multi-currency tranche for loans denominated in United States dollars, Euros or other currencies to be agreed upon.

The Credit Facility matures on December 19, 2027.

Interest accrues on amounts outstanding for any borrowings denominated in U.S.

dollars, at the Company’s option, at either (1) the Secured Overnight Financing Rate (“SOFR”) plus 0.1 % plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating, or (2) the base rate, which is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5 %, and (iii) Term SOFR for a one-month tenor plus 1.0 %, plus a margin ranging from 0.000 % to 0.875 % based on the Company’s credit rating.

Interest accrues on amounts outstanding for any borrowings denominated in United States dollars, at the Company’s option, at either (1) the Secured Overnight Financing Rate (“SOFR”) plus 0.1 % plus a margin ranging from 0.875 % to 1.875 % based on the Company’s credit rating, or (2) the base rate, which is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5 %, and (iii) Term SOFR for a one-month tenor plus 1.0 %, plus a margin ranging from 0.000 % to 0.875 % based on the Company’s credit rating.

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

As of September 30, 2023, the Company had $ 866.6 million outstanding borrowings under the revolving credit facility and had the ability to borrow $ 288.4 million.

As of March 31, 2024, the Company had $ 580.0 million in outstanding borrowings under the revolving credit facility and had the ability to borrow $ 670.0 million.

In December 2023, the Company amended the Credit Facility to allow for incremental borrowings in the form of a delayed draw term loan facility in an aggregate principal amount of $ 250.0 million.

In March 2024, the Company further amended the Credit Facility to increase this amount by $ 250.0 million, for an aggregate amount of $ 500.0 million ("Term Loan Facility").

The Company drew down the facility on March 28, 2024.

Borrowings under the Term Loan Facility bear interest at the same rate and margin as the Credit Facility.

The Term Loan Facility matures on December 19, 2027.

As of March 31, 2024, the Company had $ 500.0 million outstanding under the Term Loan Facility.

Uncommitted Credit Facility

In June 2022, the Company entered into an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 105.8 million as of September 30, 2023).

In June 2022, the Company entered into an uncommitted revolving credit facility that allows the Company to borrow up to € 100.0 million (or approximately $ 107.9 million as of March 31, 2024).

The credit facility expires on December 31, 2026.

Notes to Condensed Consolidated Financial Statements - Continued

Any loans will bear interest at the EURIBOR plus a credit spread.

As of September 30, 2023, the Company had no outstanding borrowings under the revolving credit facility.

As of March 31, 2024 and December 31, 2023, the Company had no outstanding borrowings under the revolving credit facility and had the ability to borrow € 100.0 million (or approximately $ 107.9 million).

5.450 % Senior Notes due 2027 and 5.800 % Senior Notes due 2034

On March 21, 2024, the Company issued (i) $ 400.0 million aggregate principal amount of 5.450 % Senior Notes due 2027 (the “2027 Notes”) and (ii) $ 700.0 million aggregate principal amount of 5.800 % Senior Notes due 2034 (the “2034 Notes”, and together with the 2027 Notes, the “Notes”).

The Notes are unsecured and guaranteed on a senior unsecured basis by AGCO International Holdings B.V., AGCO International GmbH, Massey Ferguson Corp.

and The GSI Group, LLC, direct and indirect subsidiaries of the Company (collectively, the “Guarantors”).

The 2027 Notes mature on March 21, 2027, and interest is payable semi-annually, in arrears, at 5.450 %.

The 2034 Notes mature on March 21, 2034, and interest is payable semi-annually, in arrears, at 5.800 %.

The Notes contain covenants restricting among other things, the incurrence of certain secured indebtedness.

Prior to February 21, 2027, in the case of the 2027 Notes, and December 21, 2033, in the case of the 2034 Notes, the Company may redeem the 2027 Notes and/or the 2034 Notes at its option, in whole or in part, at any time and from time to time, at the applicable “make-whole” redemption price (calculated as set forth in the the Senior Note Indenture and First Supplemental Indenture and applicable series of the Notes).

On or after February 21, 2027, in the case of the 2027 Notes, and December 21, 2033, in the case of the 2034 Notes, the Company may redeem the 2027 Notes or the 2034 Notes, as the case may be, in whole or in part, at any time and from time to time, at a redemption price equal to 100 % of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

0.800 % Senior Notes due 2028

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 634.9 million as of September 30, 2023) of senior notes at an issue price of 99.993 %.

On October 6, 2021, the Company issued € 600.0 million (or approximately $ 647.2 million as of March 31, 2024) of senior notes at an issue price of 99.993 %.

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

1 unchanged sentence

The senior notes are subject to both optional and mandatory redemption in certain events.

1.002 % Senior Term Loan Due 2025

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 264.5 million as of September 30, 2023) from the European Investment Bank ("EIB").

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

On January 25, 2019, the Company borrowed € 250.0 million (or approximately $ 269.7 million as of March 31, 2024) from the EIB.

The loan matures on January 24, 2025.

1 unchanged sentence

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

EIB Senior Term Loans due 2029 and 2030

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

On October 26, 2023, the Company borrowed € 250.0 million (or approximately $ 269.7 million as of March 31, 2024) under the arrangement.

The loan matures on October 26, 2029.

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

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

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

Notes to Condensed Consolidated Financial Statements - Continued

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

On February 15, 2024, the Company borrowed € 170.0 million (or approximately $ 183.4 million as of March 31, 2024) under the arrangement.

The loan matures on February 15, 2030.

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

Interest is payable on the term loan at 3.416 % per annum, payable semi-annually in arrears.

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

Senior Term Loans Due Between 2025 and 2028

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

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

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

Notes to Condensed Consolidated Financial Statements - Continued

In aggregate, as of September 30, 2023, the Company had indebtedness of € 220.0 million (or approximately $ 232.8 million as of September 30, 2023) through a group of five remaining related term loan agreements.

Of the 2016 term loans, the Company repaid an aggregate amount of € 322.5 million in October 2019, October 2021, April 2022 and October 2023.

Of the 2018 senior term loans, the Company repaid an aggregate amount of € 244.0 million in August 2021, February 2022 and August 2023.

In aggregate, as of March 31, 2024, the Company had indebtedness of € 146.5 million (or approximately $ 158.0 million as of March 31, 2024) through a group of four remaining related term loan agreements.

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

As of September 30, 2023, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 1.33 % to 2.26 % and maturity dates between October 2023 and August 2028.

As of March 31, 2024, for the term loans with a fixed interest rate, interest is payable in arrears on an annual basis, with interest rates ranging from 1.67 % to 2.26 % and maturity dates between August 2025 and August 2028.

For the term loan with a floating interest rate, interest is payable in arrears on a semi-annual basis, with an interest rate based on the EURIBOR plus a margin of 1.10 % and a maturity date of August 2025.

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

European Investment Bank ("EIB") Senior Term Loan

On September 29, 2023, the Company entered into a multi-currency Finance Contract with the EIB permitting the Company to borrow up to € 250.0 million (or approximately $ 264.5 million as of September 30, 2023) to fund up to 50 % of certain investments in research, development and innovation primarily in Germany, France and Finland during the period from 2023 through 2026.

The loans will mature at a date established at the time of the relevant draw, which generally will be between four years and ten years for an amortizing draw and between three years and six years for a non-amortizing draw.

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

At the time of each draw, the Company will be entitled to elect whether the borrowing will bear a fixed rate of interest equal to the EIB’s then customary rate or a floating rate of interest equal to SOFR (in the case of Dollar denominated loans) or EURIBOR (in the case of non-Dollar denominated loans), in each case plus a margin based upon the Company’s credit rating.

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

There were no amounts outstanding under the EIB Senior Term Loan as of September 30, 2023.

Subsequent to the end of the quarter, on October 26, 2023, the Company borrowed € 250.0 million (approximately $ 263.7 million) under the arrangement.

Bridge Facility

As discussed in Note 2, in connection with the planned Joint Venture with Trimble Inc., on September 28, 2023, the Company entered into a bridge facility commitment letter with Morgan Stanley pursuant to which Morgan Stanley has committed to provide a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility").

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

There are no amounts outstanding under the Bridge Facility as of September 30, 2023.

As discussed in Note 2, on September 28, 2023, the Company entered into a bridge facility commitment letter with Morgan Stanley pursuant to which Morgan Stanley committed to provide a $ 2.0 billion senior unsecured 364-day bridge facility (the "Bridge Facility").

The availability under the Bridge Facility was reduced to zero by certain permanent financing transactions including the net proceeds from the issuance of the Notes, the Company's entry into the Term Loan Facility and by amounts based on the Company's cash flow, and the Company terminated the Bridge Facility on March 25, 2024.

Other Short-Term Borrowings

As of September 30, 2023 and December 31, 2022, the Company had short-term borrowings due within one year of approximately $ 25.9 million and $ 8.9 million, respectively.

As of March 31, 2024 and December 31, 2023, the Company had short-term borrowings due within one year, excluding the current portion of long-term debt, of approximately $ 28.7 million and $ 12.7 million, respectively.

Standby Letters of Credit and Similar Instruments

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

At September 30, 2023 and December 31, 2022, outstanding letters of credit totaled approximately $ 14.7 million and $ 14.4 million, respectively.

Notes to Condensed Consolidated Financial Statements - Continued

At March 31, 2024 and December 31, 2023, outstanding letters of credit totaled approximately $ 14.7 million and $ 14.7 million, respectively.

RECOVERABLE INDIRECT TAXES

3 unchanged sentences

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

The Company had recorded approximately $ 97.3 million and $ 94.6 million, respectively, of VAT tax credits, net of reserves, as of September 30, 2023 and December 31, 2022.

Inventories at September 30, 2023 and December 31, 2022 were as follows (in millions):

September 30, 2023 December 31, 2022

Finished goods $ 1,464.0 $ 994.9

Repair and replacement parts 807.9 750.1

Work in process 432.6 369.8

Raw materials 1,021.5 1,074.9

Inventories, net $ 3,726.0 $ 3,189.7

PRODUCT WARRANTY

The warranty reserve activity for the three and nine months ended September 30, 2023 and 2022, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Balance at beginning of period $ 727.2 $ 589.5 $ 640.0 $ 592.5

Accruals for warranties issued during the period 123.9 86.1 321.4 231.3

Settlements made (in cash or in kind) during the period ( 94.8 ) ( 81.8 ) ( 222.7 ) ( 189.5 )

Foreign currency translation ( 21.1 ) ( 31.9 ) ( 3.5 ) ( 72.4 )

Balance at September 30 $ 735.2 $ 561.9 $ 735.2 $ 561.9

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

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

Approximately $ 625.6 million, $ 546.0 million and $ 482.1 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2023, December 31, 2022 and September 30, 2022, respectively.

Approximately $ 109.6 million, $ 94.0 million and $ 79.8 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2023, December 31, 2022, and September 30, 2022, respectively.

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

Notes to Condensed Consolidated Financial Statements - Continued

SUPPLIER FINANCE PROGRAMS

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

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

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

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

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

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

There are no assets pledged as security under the programs.

As of September 30, 2023, and December 31, 2022, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $ 90.7 million and $ 121.5 million, respectively, and are reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.

NET INCOME PER COMMON SHARE

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

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

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022 is as follows (in millions, except per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Basic net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 280.6 $ 237.9 $ 832.4 $ 567.4

Weighted average number of common shares outstanding 74.9 74.6 74.9 74.6

Basic net income per share attributable to AGCO Corporation and subsidiaries $ 3.75 $ 3.19 $ 11.11 $ 7.60

Diluted net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 280.6 $ 237.9 $ 832.4 $ 567.4

Weighted average number of common shares outstanding 74.9 74.6 74.9 74.6

Dilutive SSARs, performance share awards and RSUs 0.1 0.3 0.1 0.3

Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share 75.0 74.9 75.0 74.9

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 3.74 $ 3.18 $ 11.10 $ 7.58

There were no SSARs outstanding for the three and nine months ended September 30, 2023 and 2022 that had an antidilutive impact.

Notes to Condensed Consolidated Financial Statements - Continued

At September 30, 2023 and December 31, 2022, the Company had approximately $ 312.9 million and $ 281.7 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of September 30, 2023 and December 31, 2022 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 91.8 million and $ 74.0 million, respectively.

In addition, the gross unrecognized income tax benefits as of September 30, 2023 and December 31, 2022 exclude certain deposits made in a foreign jurisdiction of approximately $ 25.7 million, net of $ 19.0 million refunds received, and $ 45.1 million, respectively, associated with an ongoing audit.

At September 30, 2023 and December 31, 2022, the Company had approximately $ 10.8 million and $ 10.4 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

At September 30, 2023 and December 31, 2022, the Company had approximately $ 304.7 million and $ 274.1 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 2.6 million and $ 2.8 million, respectively, of deferred tax assets related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” in the Company’s Condensed Consolidated Balance Sheets.

The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes.

At September 30, 2023 and December 31, 2022, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 25.5 million and $ 25.8 million, respectively.

Generally, tax years 2019 through 2022 remain open to examination by taxing authorities in the United States and certain other foreign tax jurisdictions.

The Company and its subsidiaries are routinely examined by tax authorities in the United States and in various state, local and foreign jurisdictions.

As of September 30, 2023, a number of income tax examinations in foreign jurisdictions are ongoing.

The Company maintains a valuation allowance to reserve against its net deferred tax assets in certain foreign jurisdictions.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company regularly assesses the likelihood that its deferred tax assets will be recovered from estimated future taxable income and available tax planning strategies and has determined that all adjustments to the valuation allowances have been appropriate.

In making this assessment, all available evidence was considered including the current economic climate, as well as reasonable tax planning strategies.

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

In 2008 and 2012, as part of routine audits, the Brazilian taxing authorities disallowed deductions relating to the amortization of certain goodwill recognized in connection with a reorganization of the Company’s Brazilian operations and the related transfer of certain assets to the Company’s Brazilian subsidiaries.

The amount of the tax disallowance through September 30, 2023, not including interest and penalties, would have been approximately 131.5 million Brazilian reais (or approximately $ 26.3 million).

The amount ultimately in dispute would have been significantly greater because of interest and penalties.

The Company historically had been advised by its legal and tax advisors that its position with respect to the deductions was allowable under the tax laws of Brazil.

The Company contested the disallowance and maintained that it was not likely that the assessment, interest or penalties would require payment.

The ultimate outcome of the case would not have been determined until the Brazilian tax appeal process was completed.

On January 12, 2023, the Brazilian government issued a “Litigation Zero” tax amnesty program, whereby cases being disputed at the administrative court level of review for a period of more than ten years could be considered for amnesty.

Enrollment in the amnesty program would not be considered an admission of guilt with respect to outstanding cases.

The amnesty program allowed companies to settle outstanding contested cases at a significant monetary discount.

After weighing various impacts involved with enrollment, including the avoidance of potential interest, penalties and legal costs, the Company enrolled in the program in the quarter ended March 31, 2023.

The Company recorded its best estimate of the ultimate settlement under the amnesty program of approximately 182.6 million Brazilian reais (or approximately $ 34.8 million) within “Income tax provision” for the nine months ended September 30, 2023, net of associated U.S.

income tax credits of approximately $ 8.4 million.

The Company paid installment payments related to the program of 166.7 million Brazilian reais (or approximately $ 33.4 million) during the nine months ended September 30, 2023 and paid the final installment payment totaling approximately $ 4.4 million in October 2023.

The payments were inclusive of $ 1.2 million of interest on payments and approximately $ 1.8 million of negative currency translation.

The Company had recorded approximately $ 93.9 million and $ 93.5 million, respectively, of VAT tax credits, net of reserves, as of March 31, 2024 and December 31, 2023.

Notes to Condensed Consolidated Financial Statements - Continued

7 unchanged sentences

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

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 247.0 million and $ 364.8 million as of September 30, 2023 and December 31, 2022, respectively.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 494.5 million and $ 262.2 million as of March 31, 2024 and December 31, 2023, respectively.

Steel Commodity Contracts

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

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 0.4 million and $ 0.9 million as of September 30, 2023 and December 31, 2022, respectively.

The total notional value of derivatives that were designated as cash flow hedges was approximately $ 1.6 million and $ 2.5 million as of March 31, 2024 and December 31, 2023, respectively.

Interest Rate Risk

The Company entered into treasury rate locks in early March 2024 to fix the interest rate for the 2034 Notes issued on March 21, 2024.

The derivative position settled on March 28, 2024 with a cash settlement that offset changes in the benchmark treasury rate between the execution of the treasury rate lock and the debt pricing date for the 2034 Notes.

This treasury rate lock was designated as a cash flow hedge and the gain at termination of $ 8.2 million was recognized in accumulated other comprehensive loss.

The amount recognized in accumulated other comprehensive loss is reclassified to interest expense as interest payments are made on the 2034 Notes through the maturity date.

Notes to Condensed Consolidated Financial Statements - Continued

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three and nine months ended September 30, 2023 and 2022 (in millions):

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three months ended March 31, 2024 and 2023 (in millions):

Recognized in Net Income

Three Months Ended September 30, Loss Recognized in Accumulated

Other Comprehensive Loss Classification of Gain (Loss)

Three Months Ended March 31, Gain (Loss) Recognized in Accumulated

Other Comprehensive Loss

Classification of Gain (Loss)

Gain (Loss) Reclassified from Accumulated

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Losses

Foreign currency contracts (1)

$ ( 1.7 ) Cost of goods sold $ ( 2.5 ) $ 2,521.5

Commodity contracts (2)

( 0.1 ) Cost of goods sold 0.2 $ 2,521.5

Total $ ( 1.8 ) $ ( 2.3 )

Foreign currency contracts $ ( 3.4 ) Cost of goods sold $ ( 4.3 ) $ 2,382.7

Commodity contracts ( 0.4 ) Cost of goods sold ( 0.8 ) $ 2,382.7

Total $ ( 3.8 ) $ ( 5.1 )

Recognized in Net Income

Nine Months Ended September 30, Gain (Loss) Recognized in Accumulated

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

Other Comprehensive Loss into Income

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Losses

Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)

Foreign currency contracts (1)

2 unchanged sentences

( 0.3 ) Cost of goods sold — $ 2,158.9

Treasury rate locks 6.1 Interest expense, net — $ 1.9

Total $ 4.6 $ ( 2.3 )

3 unchanged sentences

____________________________________

(1) The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

(2) The outstanding contracts as of September 30, 2023 range in maturity through November 2023.

Notes to Condensed Consolidated Financial Statements - Continued

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended September 30, 2023 (in millions):

Before-Tax Amount Income Tax

After-Tax Amount

Accumulated derivative net losses as of June 30, 2023 $ ( 6.7 ) $ ( 1.8 ) $ ( 4.9 )

Net changes in fair value of derivatives ( 2.0 ) ( 0.2 ) ( 1.8 )

Net losses reclassified from accumulated other comprehensive loss into income 2.8 0.5 2.3

Accumulated derivative net losses as of September 30, 2023 $ ( 5.9 ) $ ( 1.5 ) $ ( 4.4 )

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the nine months ended September 30, 2023 (in millions):

Before-Tax Amount Income Tax

After-Tax Amount

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

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

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended March 31, 2024 (in millions):

Before-Tax Amount Income Tax Expense (Benefit) After-Tax Amount

Accumulated derivative net losses as of December 31, 2023

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

Net changes in fair value of derivatives 6.8 2.2 4.6

Net losses reclassified from accumulated other comprehensive loss into income 2.6 0.3 2.3

Accumulated derivative net losses as of September 30, 2023 $ ( 5.9 ) $ ( 1.5 ) $ ( 4.4 )

As of September 30, 2023, approximately $ 2.2 million and $ 0.2 million of derivative realized net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that had not yet been sold.

Accumulated derivative net gains as of March 31, 2024

$ 8.1 $ 2.0 $ 6.1

As of March 31, 2024, approximately $ 0.6 million and $ 0.1 million of derivative realized net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that had not yet been sold.

Net Investment Hedges

3 unchanged sentences

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

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

Notes to Condensed Consolidated Financial Statements - Continued

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

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

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 262.3 million as of September 30, 2023) and will receive $ 300.0 million from the counterparties.

At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately € 247.9 million (or approximately $ 267.4 million as of March 31, 2024) and will receive $ 300.0 million from the counterparties.

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

During the nine months ended September 30, 2023, the Company designated € 150.0 million (or approximately $ 158.7 million as of September 30, 2023) of its multi-currency revolving credit facility maturing December 2027 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

Notes to Condensed Consolidated Financial Statements - Continued

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

During the three months ended March 31, 2023, the Company designated € 150.0 million of its multi-currency revolving credit facility maturing December 2027 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

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

The Company recognized the change in fair value of the foreign currency denominated debt designated as a net investment hedge, a gain of $ 0.9 million, net of tax, in accumulated other comprehensive loss during the three months ended March 31, 2023.

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

Notional Amount as of

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Cross currency swap contract $ 300.0 $ 300.0

Foreign currency denominated debt 158.7 —

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three and nine months ended September 30, 2023 and 2022 (in millions):

Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Nine Months Ended

Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount

September 30, 2023 $ 4.1 $ ( 1.0 ) $ 3.1 $ ( 2.6 ) $ 0.7 $ ( 1.9 )

September 30, 2022 13.7 ( 3.5 ) 10.2 34.5 ( 8.9 ) 25.6

The following table summarizes the changes in the fair value of foreign currency denominated debt designated as a net investment hedge during the three and nine months ended September 30, 2023 and 2022 (in millions):

Gain Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended

Gain Recognized in Accumulated Other Comprehensive Loss for the Nine Months Ended

Before-Tax Amount Income Tax Benefit (Expense)

After-Tax Amount Before-Tax Amount Income Tax Benefit (Expense)

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three months ended March 31, 2024 and 2023 (in millions):

Cross currency swap contract

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

Before-Tax Amount Income Tax Expense (Benefit)

After-Tax Amount

September 30, 2023 $ 2.4 $ ( 0.7 ) $ 1.7 $ 3.7 $ ( 1.0 ) $ 2.7

September 30, 2022 — — — — — —

March 31, 2024 $ 4.7 $ 1.2 $ 3.5

March 31, 2023 ( 1.0 ) ( 0.2 ) ( 0.8 )

Derivative Transactions Not Designated as Hedging Instruments

2 unchanged sentences

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

As of September 30, 2023 and December 31, 2022, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 5.1 billion and $ 3.7 billion, respectively.

The following table summarizes the impact that changes in the fair value of derivatives not designated as hedging instruments had on net income (in millions):

Loss Recognized in Net Income for the Three Months Ended

Gain (Loss) Recognized in Net Income for the Nine Months Ended

As of March 31, 2024 and December 31, 2023, the Company had outstanding foreign currency contracts with a notional amount of approximately $ 2,545.2 million and $ 3,125.1 million, respectively.

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

Gain (Loss) Recognized in Net Income for the Three Months Ended

Classification of Gain (Loss)

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

March 31, 2024 March 31, 2023

Foreign currency contracts Other expense, net $ ( 8.3 ) $ 11.2

Notes to Condensed Consolidated Financial Statements - Continued

The table below sets forth the fair value of derivative instruments as of September 30, 2023 (in millions):

The table below sets forth the fair value of derivative instruments as of March 31, 2024 (in millions):

Asset Derivatives as of

September 30, 2023 Liability Derivatives as of

September 30, 2023

March 31, 2024 Liability Derivatives as of

March 31, 2024

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

8 unchanged sentences

__________________________________

(1) The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

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

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

12 unchanged sentences

___________________________________

(1) The outstanding contracts as of December 31, 2022 range in maturity through March 2023.

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

Notes to Condensed Consolidated Financial Statements - Continued

CHANGES IN STOCKHOLDERS’ EQUITY

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three and nine months ended September 30, 2023 and 2022 (in millions):

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, June 30, 2023 $ 0.7 $ 36.1 $ 5,786.8 $ ( 1,684.8 ) $ 0.2 $ 4,139.0

Stock compensation — 10.2 — — — 10.2

Issuance of stock awards

— ( 0.3 ) — — — ( 0.3 )

Comprehensive income:

Net income (loss)

— — 280.6 — ( 0.1 ) 280.5

Other comprehensive income, net of reclassification adjustments:

Foreign currency translation adjustments

— — — ( 54.5 ) — ( 54.5 )

Defined benefit pension plans, net of tax — — — 1.9 — 1.9

Deferred gains and losses on derivatives, net of tax

— — — 0.5 — 0.5

Payment of dividends to stockholders — — ( 21.7 ) — — ( 21.7 )

Balance, September 30, 2023 $ 0.7 $ 46.0 $ 6,045.7 $ ( 1,736.9 ) $ 0.1 $ 4,355.6

STOCKHOLDERS’ EQUITY

The following tables set forth changes in stockholders’ equity attributed to AGCO Corporation and its subsidiaries and to noncontrolling interests for the three months ended March 31, 2024 and 2023 (in millions):

Stock Additional

6 unchanged sentences

Issuance of stock awards

SSARs exercised — ( 1.2 ) — — — ( 1.2 )

Comprehensive income:

Net income (loss)

— ( 12.4 ) ( 0.5 ) — — ( 12.9 )

Other comprehensive income, net of reclassification adjustments:

Foreign currency translation adjustments — — — 64.1 — 64.1

Defined benefit pension plans, net of tax — — — 5.6 — 5.6

Deferred gains and losses on derivatives, net of tax — — — ( 3.5 ) — ( 3.5 )

Payment of dividends to stockholders — — ( 435.8 ) — — ( 435.8 )

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

Balance, September 30, 2023 $ 0.7 $ 46.0 $ 6,045.7 $ ( 1,736.9 ) $ 0.1 $ 4,355.6

Notes to Condensed Consolidated Financial Statements - Continued

Stock Additional

Paid-in Capital Retained

Earnings Accumulated Other

Comprehensive Loss Noncontrolling

Interests Total Stockholders’

Balance, June 30, 2022 $ 0.7 $ 13.3 $ 5,130.3 $ ( 1,761.1 ) $ 0.1 $ 3,383.3

Stock compensation — 7.8 — — — 7.8

Issuance of stock awards

— 0.7 — — — 0.7

SSARs exercised — ( 0.1 ) — — — ( 0.1 )

Comprehensive income:

— — 168.0 — — 168.0

Other comprehensive loss, net of reclassification adjustments:

Other comprehensive (loss) income:

Foreign currency translation adjustments

1 unchanged sentence

Defined benefit pension plans, net of tax — — — 1.7 — 1.7

— — — ( 16.9 ) — ( 16.9 )

Deferred gains and losses on derivatives, net of tax

1 unchanged sentence

Payment of dividends to stockholders — — ( 21.6 ) — — ( 21.6 )

— — ( 17.9 ) — — ( 17.9 )

Change in noncontrolling interest — — — — 0.1 0.1

Balance, September 30, 2022 $ 0.7 $ 21.8 $ 5,350.3 $ ( 1,852.4 ) $ 0.2 $ 3,520.6

Balance, March 31, 2024 $ 0.7 $ — $ 6,505.9 $ ( 1,751.5 ) $ 0.1 $ 4,755.2

Stock Additional

9 unchanged sentences

Comprehensive income:

Net income (loss) — — 567.4 — ( 14.9 ) 552.5

Other comprehensive income, net of reclassification adjustments:

— — 232.6 — — 232.6

Other comprehensive income:

Foreign currency translation adjustments

6 unchanged sentences

— — ( 18.0 ) — — ( 18.0 )

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

Change in noncontrolling interest — — — — 0.1 0.1

Balance, September 30, 2022 $ 0.7 $ 21.8 $ 5,350.3 $ ( 1,852.4 ) $ 0.2 $ 3,520.6

Notes to Condensed Consolidated Financial Statements - Continued

Total comprehensive loss attributable to noncontrolling interests for the three and nine months ended September 30, 2023 and 2022 was as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

$ ( 0.1 ) $ — $ ( 0.1 ) $ ( 14.9 )

Other comprehensive income:

Foreign currency translation adjustments — — — 0.9

Total comprehensive loss

Adoption of ASU 2016-13 by finance joint ventures

— — ( 5.5 ) — — ( 5.5 )

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the nine months ended September 30, 2023 (in millions):

Balance, March 31, 2023 $ 0.7 $ 24.7 $ 5,863.7 $ ( 1,756.4 ) $ 0.2 $ 4,132.9

Notes to Condensed Consolidated Financial Statements - Continued

The Company had no comprehensive loss attributable to noncontrolling interests recorded for the three months ended March 31, 2024 and 2023.

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation and its subsidiaries for the three months ended March 31, 2024 (in millions):

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

1 unchanged sentence

$ ( 238.6 ) $ ( 0.8 ) $ ( 1,468.7 ) $ ( 1,708.1 )

Other comprehensive (loss) income before reclassifications — ( 8.5 ) 64.1 55.6

Net losses reclassified from accumulated other comprehensive loss 5.6 5.0 — 10.6

Other comprehensive income (loss), net of reclassification adjustments 5.6 ( 3.5 ) 64.1 66.2

Accumulated other comprehensive loss, September 30, 2023

Other comprehensive income (loss) before reclassifications

— 4.6 ( 52.0 ) ( 47.4 )

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three and nine months ended September 30, 2023 and 2022 (in millions):

Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Condensed Consolidated

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Three Months Ended September 30, 2023 (1)

Three Months Ended September 30, 2022 (1)

Net losses on foreign currency contracts $ 3.0 $ 5.5 Cost of goods sold

Net (gains) losses on commodity contracts

( 0.2 ) 1.1 Cost of goods sold

Reclassification before tax 2.8 6.6

Income tax benefit

( 0.5 ) ( 1.5 ) Income tax provision

Reclassification net of tax $ 2.3 $ 5.1

Defined benefit pension plans:

Amortization of net actuarial losses $ 2.2 $ 2.0 Other expense, net (2)

Amortization of prior service cost 0.3 — Other expense, net (2)

Reclassification before tax 2.5 2.0

Income tax benefit

( 0.6 ) ( 0.6 ) Income tax provision

Reclassification net of tax $ 1.9 $ 1.4

Net losses reclassified from accumulated other comprehensive loss 1.7 2.3 — 4.0

Other comprehensive income (loss)

1.7 6.9 ( 52.0 ) ( 43.4 )

(1) Losses included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2023 and 2022, respectively.

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

See Note 16 for additional information on the Company’s defined benefit pension plans.

Notes to Condensed Consolidated Financial Statements - Continued

Accumulated other comprehensive loss,

March 31, 2024

$ ( 236.9 ) $ 6.1 $ ( 1,520.7 ) $ ( 1,751.5 )

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation and its subsidiaries for the three months ended March 31, 2024 and 2023 (in millions):

Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item within the Condensed Consolidated

Statements of Operations

Details about Accumulated Other Comprehensive Loss Components Nine Months Ended September 30, 2023 (1)

Nine Months Ended September 30, 2022 (1)

Details about Accumulated Other Comprehensive Loss Components Three Months Ended March 31, 2024 (1)

Three Months Ended March 31, 2023 (1)

Net losses on foreign currency contracts $ 2.6 $ 2.2 Cost of goods sold

Net (gains) losses on commodity contracts

Net gains on commodity contracts

— ( 0.4 ) Cost of goods sold

12 unchanged sentences

__________________________________

(1) Losses included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022, respectively.

(1) Losses included within the Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, respectively.

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

See Note 16 for additional information on the Company’s defined benefit pension plans.

See Note 14 for additional information.

Share Repurchase Program

In November 2021, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase an aggregate of $ 60.0 million of shares of its common stock.

The Company received 393,733 shares in this transaction as of December 31, 2021.

On January 19, 2022, the Company received an additional 113,824 shares upon final settlement of its November 2021 ASR agreement.

In November 2023, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase $ 53.0 million of shares of its common stock.

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

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

All shares received under the ASR agreement were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2023, the Company did not purchase any shares directly or enter into any accelerated share repurchase agreements.

As of September 30, 2023, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 110.0 million, which has no expiration date.

On April 27, 2023, the Company's Board of Directors approved an increase to its quarterly dividend commencing in the second quarter of 2023 by 21 % to $ 0.29 per common share and declared a special variable dividend of $ 5.00 per common share that was paid during the second quarter of 2023.

During the three months ended September 30, 2023 and September 30, 2022, the Company declared and paid cash dividends of $ 0.29 and $ 0.24 per common share, respectively.

During the nine months ended September 30, 2023 and September 30, 2022, the Company declared and paid cash dividends of $ 5.81 and $ 5.16 per common share, respectively.

On October 26, 2023, the Company approved the quarterly dividend of $ 0.29 per common share to be paid on December 15, 2023, to all stockholders of record as of the close of business November 15, 2023.

During the three months

Notes to Condensed Consolidated Financial Statements - Continued

ACCOUNTS RECEIVABLE SALES AGREEMENTS

For the nine months ended September 30, 2023 and September 30, 2022, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $ 2.1 billion and $ 1.2 billion, respectively.

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays

an annual fee related to the servicing of the receivables sold.

These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s Consolidated Statements of Operations.

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

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

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

For the nine months ended September 30, 2023 and September 30, 2022, the cash received from these arrangements was approximately $ 218.7 million and $ 170.8 million, respectively.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 40.5 million and $ 99.3 million during the three and nine months ended September 30, 2023, respectively.

Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $ 20.4 million and $ 38.5 million, respectively, during the three and nine ended September 30, 2022, respectively.

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

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

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

As of September 30, 2023 and December 31, 2022, these finance joint ventures had approximately $ 139.4 million and $ 69.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

The Company accounts for these arrangements as off-balance sheet transactions.

The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment.

ended March 31, 2024, the Company did no t purchase any shares directly or enter into any accelerated share repurchase agreements.

As of March 31, 2024, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $ 57.0 million, which has no expiration date.

During the three months ended March 31, 2024 and March 31, 2023, the Company declared and paid cash dividends of $ 0.29 and $ 0.24 per common share, respectively.

On April 25, 2024, the Company's Board of Directors declared a regular quarterly dividend of $ 0.29 per common share to be paid on June 14, 2024, to all stockholders of record as of the close of business on May 15, 2024.

In addition, on April 25, 2024, the Company's Board of Directors declared a special variable dividend of $ 2.50 per common share that will be paid on June 20, 2024, to all stockholders of record as of the close of business on May 20, 2024.

NET INCOME PER COMMON SHARE

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

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

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three months ended March 31, 2024 and 2023 is as follows (in millions, except per share data):

Three Months Ended March 31,

Basic net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 168.0 $ 232.6

Weighted average number of common shares outstanding 74.6 74.9

Basic net income per share attributable to AGCO Corporation and subsidiaries $ 2.25 $ 3.11

Diluted net income per share:

Net income attributable to AGCO Corporation and subsidiaries $ 168.0 $ 232.6

Weighted average number of common shares outstanding 74.6 74.9

Dilutive SSARs and RSUs

Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share 74.7 75.0

Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 2.25 $ 3.10

At March 31, 2024 and December 31, 2023, the Company had approximately $ 369.7 million and $ 351.2 million, respectively, of gross unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

Gross unrecognized income tax benefits as of March 31, 2024 and December 31, 2023 exclude certain indirect favorable effects that relate to other tax jurisdictions of approximately $ 115.8 million and $ 103.9 million, respectively.

In addition, the gross unrecognized income tax benefits as of March 31, 2024 and December 31, 2023 exclude certain deposits made in a foreign jurisdiction of approximately $ 26.2 million, net of $ 19.3 million refunds received, and $ 26.9 million, net of $ 19.7 million refunds received, respectively, associated with an ongoing audit.

At March 31, 2024 and December 31, 2023, the Company had approximately $ 11.2 million and $ 9.9 million, respectively, of accrued or deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that it expects to settle or pay in the next 12 months, reflected in “Other current liabilities” in the

Notes to Condensed Consolidated Financial Statements - Continued

Company’s Condensed Consolidated Balance Sheets.

At March 31, 2024 and December 31, 2023, the Company had approximately $ 361.2 million and $ 344.2 million, respectively, of accrued taxes reflected in “Other noncurrent liabilities”, and approximately $ 2.7 million and $ 2.9 million, respectively, of deferred tax assets related to uncertain tax positions that it expects to settle or pay beyond 12 months, reflected in “Deferred tax assets” in the Company’s Condensed Consolidated Balance Sheets.

The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes.

At March 31, 2024 and December 31, 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of approximately $ 28.8 million and $ 27.9 million, respectively.

Generally, tax years 2019 through 2023 remain open to examination by taxing authorities in the United States and certain other foreign tax jurisdictions.

The Company and its subsidiaries are routinely examined by tax authorities in the United States and in various state, local and foreign jurisdictions.

As of March 31, 2024, a number of income tax examinations in foreign jurisdictions are ongoing.

The Company maintains a valuation allowance to reserve against its net deferred tax assets in certain foreign jurisdictions.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In making this assessment, all available evidence was considered including the current economic climate, as well as reasonable tax planning strategies.

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

The amount of the tax disallowance through December 31, 2023 would have been approximately 131.5 million Brazilian reais (or approximately $ 27.1 million) and subject to significant interest and penalties.

In the first quarter of 2023, the Brazilian government issued a “Litigation Zero” tax amnesty program, whereby cases being disputed at the administrative court level of review for a period of more than ten years could be considered for amnesty.

Enrollment in the amnesty program was not considered an admission of guilt and allowed for outstanding contested cases to be settled at a significant monetary discount.

The Company contested the disallowance and had been historically advised by its legal and tax advisors that its position was allowable under the tax laws of Brazil.

The Company recorded approximately 182.6 million Brazilian reais (or approximately $ 34.8 million) within “Income tax provision” net of associated U.S.

income tax credits of approximately $ 8.4 million and completed its installment payments related to its enrollment in the program during the year ended December 31, 2023.

PENSION AND POSTRETIREMENT BENEFIT PLANS

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and nine months ended September 30, 2023 and 2022 are set forth below (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three months ended March 31, 2024 and 2023 are set forth below (in millions):

Three Months Ended March 31,

Pension benefits 2024 2023

5 unchanged sentences

Net periodic pension cost $ 3.9 $ 4.7

Three Months Ended September 30, Nine Months Ended September 30,

Notes to Condensed Consolidated Financial Statements - Continued

Three Months Ended March 31,

Postretirement benefits 2024 2023

4 unchanged sentences

The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations.

During the nine months ended September 30, 2023, the Company made approximately $ 26.7 million of contributions to its defined pension benefit plans.

During the three months ended March 31, 2024, the Company made approximately $ 10.8 million of contributions to its defined pension benefit plans.

The Company currently estimates its minimum contributions for 2024 to its defined pension benefit plans will aggregate approximately $ 29.2 million.

During the nine months ended September 30, 2023, the Company made approximately $ 1.2 million of contributions to its postretirement health care and life insurance benefit plans.

During the three months ended March 31, 2024, the Company made approximately $ 0.4 million of contributions to its postretirement health care and life insurance benefit plans.

The Company currently estimates that it will make approximately $ 1.7 million of contributions to its postretirement health care and life insurance benefit plans during 2024.

17 unchanged sentences

See Note 10 for additional information on the Company’s derivative instruments and hedging activities.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 are summarized below (in millions):

As of September 30, 2023

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 are summarized below (in millions):

As of March 31, 2024

Level 1 Level 2 Level 3 Total

5 unchanged sentences

Derivative liabilities — 14.0 — 14.0

The carrying amounts of long-term debt under the Company’s 1.002 % senior term loan due 2025 and senior term loans due between 2023 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

At September 30, 2023, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 496.9 million (or approximately $ 525.8 million as of September 30, 2023), compared to the carrying value of € 600.0 million (or approximately $ 634.9 million as of September 30, 2023).

The carrying amounts of long-term debt under the Company’s 1.002 % EIB senior term loan due 2025, EIB senior term loans due 2029 and 2030 and senior term loans due between 2025 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

At March 31, 2024, the estimated fair value of the Company's 0.800 % senior notes due 2028, based on listed market values, was approximately € 529.1 million (or approximately $ 570.7 million), compared to the carrying value of € 600.0 million (or approximately $ 647.2 million).

At March 31, 2024, the estimated fair value of the Company's 5.450 % senior notes due 2027, based on listed market values, was approximately $ 402.0 million, compared to the carrying value of $ 400.0 million.

At March 31, 2024, the estimated fair value of the Company's 5.800 % senior notes due 2034, based on listed market values, was approximately $ 708.4 million, compared to the carrying value of $ 700.0 million.

See Note 8 for additional information on the Company’s long-term debt.

Notes to Condensed Consolidated Financial Statements - Continued

SEGMENT REPORTING

The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement parts.

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 generally charged to each segment based on the region and division where the expenses are incurred.

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

Segment results for the three and nine months ended September 30, 2023 and 2022 and assets as of September 30, 2023 and December 31, 2022 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended September 30, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments

Net sales $ 941.1 $ 719.8 $ 1,586.9 $ 207.7 $ 3,455.5

Income from operations 139.8 149.8 199.3 19.2 508.1

Depreciation 16.2 9.6 28.5 4.5 58.8

Capital expenditures 25.0 15.4 79.5 0.8 120.7

Net sales $ 910.5 $ 571.2 $ 1,390.1 $ 249.8 $ 3,121.6

Income from operations 112.7 107.5 142.1 33.0 395.3

Depreciation 15.4 7.1 24.5 3.6 50.6

Capital expenditures 57.8 15.7 51.4 6.4 131.3

Nine Months Ended September 30, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments

Net sales $ 2,861.0 $ 1,822.2 $ 5,281.5 $ 647.0 $ 10,611.7

Income from operations 378.8 370.7 733.9 58.2 1,541.6

Depreciation 46.3 26.3 83.0 13.3 168.9

Capital expenditures 96.7 49.2 209.3 2.5 357.7

Net sales $ 2,351.4 $ 1,446.8 $ 4,260.8 $ 693.5 $ 8,752.5

Income from operations 218.2 239.1 465.6 97.7 1,020.6

Depreciation 45.6 21.7 78.0 11.8 157.1

Capital expenditures 88.7 36.9 133.1 11.8 270.5

As of September 30, 2023 $ 1,943.1 $ 1,551.4 $ 2,932.7 $ 875.1 $ 7,302.3

As of December 31, 2022 1,790.3 1,259.8 2,475.6 650.5 6,176.2

Notes to Condensed Consolidated Financial Statements - Continued

A reconciliation from the segment information to the consolidated balances for income from operations and total assets is set forth below (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Segment income from operations $ 508.1 $ 395.3 $ 1,541.6 $ 1,020.6

Impairment charges — — — ( 36.0 )

Corporate expenses ( 59.5 ) ( 40.1 ) ( 146.6 ) ( 110.8 )

Amortization of intangibles ( 14.4 ) ( 14.7 ) ( 43.3 ) ( 45.4 )

Stock compensation expense ( 9.8 ) ( 7.4 ) ( 36.1 ) ( 24.4 )

Restructuring expenses ( 0.8 ) ( 1.0 ) ( 8.3 ) ( 4.4 )

Consolidated income from operations $ 423.6 $ 332.1 $ 1,307.3 $ 799.6

September 30, 2023 December 31, 2022

Segment assets $ 7,302.3 $ 6,176.2

Cash, cash equivalents and restricted cash 680.7 789.5

Investments in affiliates 512.2 436.9

Deferred tax assets, other current and noncurrent assets 1,224.6 1,025.9

Intangible assets, net 322.8 364.4

Goodwill 1,308.5 1,310.8

Consolidated total assets $ 11,351.1 $ 10,103.7

Notes to Condensed Consolidated Financial Statements - Continued

COMMITMENTS AND CONTINGENCIES

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2023 and December 31, 2022 were as follows (in millions):

September 30, 2023 December 31, 2022

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of March 31, 2024 and December 31, 2023 were as follows (in millions):

March 31, 2024 December 31, 2023

Operating Leases (1)

15 unchanged sentences

Off-Balance Sheet Arrangements

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

finance joint venture, AGCO Finance LLC, whereby the Company is obligated to repurchase up to $ 6.0 million of repossessed equipment each calendar year.

The Company believes that any losses that it might incur on the resale of this equipment will not be material, due to the fair value of the underlying equipment.

At September 30, 2023, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A.

At March 31, 2024, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A.

(“AGCO Capital”), of approximately $ 43.6 million.

3 unchanged sentences

The Company believes the credit risk associated with these guarantees is not material.

In addition, at September 30, 2023, the Company had accrued approximately $ 14.7 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

In addition, at March 31, 2024, the Company had accrued approximately $ 12.6 million of outstanding guarantees of residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users.

The maximum potential amount of future payments under these guarantees is approximately $ 180.1 million.

At September 30, 2023, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 5,305.5 million.

The outstanding contracts as of September 30, 2023 range in maturity through December 2023.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 0.4 million that range in maturity through November 2023.

Notes to Condensed Consolidated Financial Statements - Continued

At March 31, 2024, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $ 3,039.7 million.

The outstanding contracts as of March 31, 2024 range in maturity through December 2024.

The Company also had outstanding designated steel commodity contracts with a gross notional amount of approximately $ 1.6 million that range in maturity through June 2024.

The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures.

2 unchanged sentences

Refer to Note 3 for discussion of the Company’s accounts receivable sales agreements.

Notes to Condensed Consolidated Financial Statements - Continued

Contingencies

See Note 12 for the discussion of the Company's resolution of the disputed deductions under a tax amnesty program.

During 2017, the Company purchased Precision Planting, which provides precision agricultural technology solutions.

6 unchanged sentences

Court of Appeals for the Federal Circuit.

The parties currently are briefing of the appeal.

The appeal is fully briefed and is awaiting oral arguments before the court.

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

5 unchanged sentences

Contract liabilities relate to the following:

(1) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to extended warranty and maintenance contracts and where the performance obligation is satisfied over time, (2) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to certain grain storage and protein production systems and where the performance obligation is satisfied over time and (3) unrecognized revenues where advance payment of consideration precedes the Company’s performance with respect to technology services and where the performance obligation is satisfied over time.

Significant changes in the balance of contract liabilities for the three and nine months ended September 30, 2023 and 2022 were as follows (in millions):

Three Months Ended September 30,

Balance at beginning of period $ 274.6 $ 217.7

Advance consideration received 47.7 52.7

Revenue recognized during the period for extended warranty contracts, maintenance services and technology services ( 25.1 ) ( 19.4 )

Revenue recognized during the period related to grain storage and protein production systems ( 6.8 ) ( 29.6 )

Foreign currency translation ( 5.8 ) ( 12.0 )

Balance at September 30 $ 284.6 $ 209.4

Nine Months Ended September 30,

(1) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to extended warranty and maintenance contracts and where the performance obligation is satisfied over time, (2) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to certain grain storage and protein production systems and where the performance obligation is satisfied over time and (3) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to precision technology services and where the performance obligation is satisfied over time.

Significant changes in the balance of contract liabilities for the three months ended March 31, 2024 and 2023 were as follows (in millions):

Three Months Ended March 31,

Balance at beginning of period $ 310.7 $ 239.0

3 unchanged sentences

Foreign currency translation ( 4.8 ) 3.0

Balance at September 30 $ 284.6 $ 209.4

Balance at March 31 $ 321.5 $ 259.6

The contract liabilities are classified as either “Accrued expenses” or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2023, the Company recognized approximately $ 26.9 million and $ 96.9 million of revenue that was recorded as a contract liability at the beginning of 2023.

During the three and nine months ended September 30, 2022, the Company recognized approximately $ 22.0 million and $ 74.2 million of revenue that was recorded as a contract liability at the beginning of 2022.

During the three months ended March 31, 2024, the Company recognized approximately $ 33.2 million of revenue that was recorded as a contract liability at the beginning of 2024.

During the three months ended March 31, 2023, the Company recognized approximately $ 35.7 million of revenue that was recorded as a contract liability at the beginning of 2023.

Remaining Performance Obligations

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023 are $ 33.3 million for the remainder of 2023, $ 97.4 million in 2024, $ 71.5 million in 2025, $ 37.8 million in 2026 and $ 24.5 million thereafter, and relate primarily to extended warranty contracts.

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2024 are $ 91.3 million for the remainder of 2024, $ 101.9 million in 2025, $ 63.2 million in 2026, $ 32.6 million in 2027 and $ 14.7 million thereafter, and relate primarily to extended warranty contracts.

The Company applied the practical expedient in ASU 2014-09 and has not disclosed information about remaining performance obligations that have original expected durations of 12 months or less.

1 unchanged sentence

Disaggregated Revenue

Net sales for the three months ended September 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the three months ended March 31, 2024 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America

24 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the three months ended September 30, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the three months ended March 31, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America

South America Europe/Middle East (1)

South America (1)

Europe/Middle East (1)

Asia/Pacific/Africa

Consolidated (1)

Primary geographical markets:

24 unchanged sentences

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the nine months ended September 30, 2023 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America South America Europe/Middle East Asia/Pacific/Africa Consolidated

Primary geographical markets:

United States $ 2,276.4 $ — $ — $ — $ 2,276.4

Canada 469.9 — — — 469.9

Brazil — 1,537.8 — — 1,537.8

Other South America — 273.0 — — 273.0

Germany — — 1,190.9 — 1,190.9

France — — 1,014.3 — 1,014.3

United Kingdom and Ireland — — 482.1 — 482.1

Finland and Scandinavia — — 587.4 — 587.4

Italy — — 337.2 — 337.2

Other Europe — — 1,355.2 — 1,355.2

Middle East and Algeria — — 314.4 — 314.4

Africa — — — 106.4 106.4

Asia — — — 261.5 261.5

Australia and New Zealand — — — 279.1 279.1

Mexico, Central America and Caribbean 114.7 11.4 — — 126.1

$ 2,861.0 $ 1,822.2 $ 5,281.5 $ 647.0 $ 10,611.7

Major products:

Tractors $ 995.0 $ 1,072.9 $ 3,725.4 $ 356.0 $ 6,149.3

Replacement parts 339.1 124.1 874.9 76.8 1,414.9

Grain storage and protein production systems 506.1 112.6 116.7 94.7 830.1

Combines, application equipment and other machinery 1,020.8 512.6 564.5 119.5 2,217.4

$ 2,861.0 $ 1,822.2 $ 5,281.5 $ 647.0 $ 10,611.7

SEGMENT REPORTING

The Company has four operating segments that are also its reportable segments, which consist of the North America, South America, Europe/Middle East and Asia/Pacific/Africa regions.

The Company’s reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology.

The Company 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 generally charged to each segment based on the region and division where the expenses are incurred.

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

Segment results for the three months ended March 31, 2024 and 2023 and assets as of March 31, 2024 and December 31, 2023 based on the Company’s reportable segments are as follows (in millions):

Three Months Ended March 31, North America South America Europe/Middle East Asia/Pacific/Africa Total Segments

Net sales $ 729.6 $ 303.4 $ 1,729.0 $ 166.7 $ 2,928.7

Income from operations 42.4 16.2 282.9 8.0 349.5

Depreciation 17.2 9.4 32.6 4.1 63.3

Capital expenditures 17.6 15.3 61.4 0.7 95.0

Net sales $ 923.1 $ 503.8 $ 1,703.8 $ 202.8 $ 3,333.5

Income from operations 102.1 99.5 239.4 18.1 459.1

Depreciation 14.9 7.8 26.8 4.1 53.6

Capital expenditures 37.3 20.3 67.0 0.7 125.3

As of March 31, 2024 $ 1,946.7 $ 1,369.7 $ 3,214.7 $ 868.9 $ 7,400.0

As of December 31, 2023 1,883.2 1,394.9 3,017.4 875.2 7,170.7

A reconciliation from the segment information to the consolidated balances for income from operations and total assets is set forth below (in millions):

Three Months Ended March 31,

Segment income from operations $ 349.5 $ 459.1

Corporate expenses ( 53.0 ) ( 42.1 )

Amortization of intangibles ( 13.9 ) ( 14.8 )

Stock compensation expense ( 8.0 ) ( 13.5 )

Restructuring expenses ( 1.0 ) ( 1.4 )

Consolidated income from operations $ 273.6 $ 387.3

Notes to Condensed Consolidated Financial Statements - Continued

Net sales for the nine months ended September 30, 2022 disaggregated by primary geographical markets and major products consisted of the following (in millions):

North America (1)

South America Europe/Middle East (1)

Asia/Pacific/Africa Consolidated

Primary geographical markets:

United States $ 1,884.4 $ — $ — $ — $ 1,884.4

Canada 367.5 — — — 367.5

Brazil — 1,156.4 — — 1,156.4

Other South America — 280.1 — — 280.1

Germany — — 900.2 — 900.2

France — — 782.3 — 782.3

United Kingdom and Ireland — — 451.3 — 451.3

Finland and Scandinavia — — 569.5 — 569.5

Italy — — 270.3 — 270.3

Other Europe — — 1,152.4 — 1,152.4

Middle East and Algeria — — 134.8 — 134.8

Africa — — — 115.2 115.2

Asia — — — 295.9 295.9

Australia and New Zealand — — — 282.4 282.4

Mexico, Central America and Caribbean 99.5 10.3 — — 109.8

$ 2,351.4 $ 1,446.8 $ 4,260.8 $ 693.5 $ 8,752.5

Major products:

Tractors $ 843.5 $ 791.9 $ 2,868.8 $ 375.3 $ 4,879.5

Replacement parts 323.6 116.2 803.1 77.8 1,320.7

Grain storage and protein production systems 461.9 138.4 120.0 118.4 838.7

Combines, application equipment and other machinery 722.3 400.3 469.0 122.1 1,713.7

$ 2,351.4 $ 1,446.8 $ 4,260.8 $ 693.5 $ 8,752.5

March 31, 2024 December 31, 2023

Segment assets $ 7,400.0 $ 7,170.7

Cash and cash equivalents

2,455.8 595.5

(1) Rounding may impact the summation of amounts.

Investments in affiliates 520.5 512.7

Deferred tax assets, other current and noncurrent assets 1,466.2 1,500.1

Intangible assets, net 291.6 308.8

Goodwill 1,325.8 1,333.4

Consolidated total assets $ 13,459.9 $ 11,421.2

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-Q

Item 1. Financial Statements