AGCO (AGCO) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2024 Item 1. Financial Statements (unaudited) This section presents AGCO Corporation's unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive income, and cash flows for the periods ended March 31, 2024, and December 31, 2023 (for balance sheet) or March 31, 2023 (for income/cash flow statements). It also includes detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (millions) | Metric | March 31, 2024 (millions) | December 31, 2023 (millions) | Change (millions) | % Change | | :-------------------------- | :-------------------------- | :--------------------------- | :---------------- | :------- | | Total Assets | $13,459.9 | $11,421.2 | $2,038.7 | 17.85% | | Total Liabilities | $8,704.7 | $6,764.4 | $1,940.3 | 28.68% | | Total Stockholders' Equity | $4,755.2 | $4,656.8 | $98.4 | 2.11% | | Cash and cash equivalents | $2,455.8 | $595.5 | $1,860.3 | 312.39% | | Inventories, net | $3,781.9 | $3,440.7 | $341.2 | 9.92% | | Long-term debt | $3,425.7 | $1,377.2 | $2,048.5 | 148.74% | - The significant increase in cash and cash equivalents and long-term debt is primarily due to financing activities in anticipation of the PTx Trimble joint venture transaction, which closed on April 1, 2024[27][167][184] Condensed Consolidated Statements of Operations This section details the company's financial performance, including net sales, gross profit, operating income, and net income for the reporting periods Condensed Consolidated Statements of Operations (millions) | Metric (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (millions) | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :---------------- | :------- | | Net sales | $2,928.7 | $3,333.5 | $(404.8) | -12.14% | | Gross profit | $769.8 | $854.9 | $(85.1) | -9.95% | | Income from operations | $273.6 | $387.3 | $(113.7) | -29.36% | | Net income | $168.0 | $232.6 | $(64.6) | -27.77% | | Basic EPS | $2.25 | $3.11 | $(0.86) | -27.65% | | Diluted EPS | $2.25 | $3.10 | $(0.85) | -27.42% | | Cash dividends per share | $0.29 | $0.24 | $0.05 | 20.83% | - Net sales decreased by 12.1% primarily due to lower sales volumes driven by softer industry demand, partially offset by positive pricing[135][136] - Income from operations and net income also saw significant declines due to lower sales and production volumes, and higher SG&A expenses[135][136] Condensed Consolidated Statements of Comprehensive Income This section presents the company's comprehensive income, including net income and other comprehensive income components Condensed Consolidated Statements of Comprehensive Income (millions) | Metric (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (millions) | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :---------------- | :------- | | Net income | $168.0 | $232.6 | $(64.6) | -27.77% | | Other comprehensive (loss) income | $(43.4) | $46.7 | $(90.1) | -192.93% | | Comprehensive income | $124.6 | $279.3 | $(154.7) | -55.39% | - Other comprehensive income shifted from a gain of $46.7 million in Q1 2023 to a loss of $43.4 million in Q1 2024, primarily driven by negative foreign currency translation adjustments[14] Condensed Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (millions) | Metric (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (millions) | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :---------------- | :------- | | Net cash used in operating activities | $(370.0) | $(557.1) | $187.1 | -33.58% | | Net cash used in investing activities | $(94.8) | $(128.8) | $34.0 | -26.40% | | Net cash provided by financing activities | $2,337.0 | $461.6 | $1,875.4 | 406.29% | | Increase (decrease) in cash, cash equivalents and restricted cash | $1,860.3 | $(230.8) | $2,091.1 | -906.02% | | Cash, cash equivalents and restricted cash, end of period | $2,455.8 | $558.7 | $1,897.1 | 339.56% | - Net cash used in operating activities decreased by $187.1 million, primarily due to changes in working capital, despite a decrease in net income[17][183][184] - Financing activities saw a substantial increase in cash provided, mainly from proceeds from indebtedness to fund the PTx Trimble joint venture[17][183][184] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1. BASIS OF PRESENTATION This note outlines the accounting principles, functional currency determinations for inflationary economies, and the impact of new accounting pronouncements - The financial statements are prepared in accordance with U.S. GAAP for interim financial information[20] - The Turkish and Argentine economies were determined to be highly inflationary, leading to the U.S. dollar being the functional currency for subsidiaries in these regions and remeasurement adjustments reported in 'Other expense, net'[21][22] - New accounting pronouncements ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes) are effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively, and the Company is evaluating their potential effects[23][25][26] Note 2. ACQUISITIONS This note details the formation and financial impact of the PTx Trimble joint venture, where AGCO acquired an 85% interest - On April 1, 2024, AGCO and Trimble completed the formation of PTx Trimble, a joint venture where AGCO acquired an 85% interest for $1,954.0 million in cash, and AGCO will consolidate PTx Trimble in its financial statements[27] Note 3. ACCOUNTS RECEIVABLE SALES AGREEMENTS This note describes the company's off-balance sheet arrangements for selling wholesale and trade receivables to finance joint ventures and other financial institutions - The Company sells a majority of its wholesale receivables in North America, Europe, and Brazil to its finance joint ventures, and also sells certain trade receivables under factoring arrangements to other financial institutions, accounted for as off-balance sheet transactions[28][29][30] Accounts Receivable Sales Agreements (millions) | Metric (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------- | :-------------------------------- | :-------------------------------- | | Cash from receivables sold (JV) | $2,400.0 | $1,700.0 | | Cash from factoring arrangements | $213.3 | $233.3 | | Losses on sales of receivables | $27.9 | $28.5 | Note 4. GOODWILL AND OTHER INTANGIBLE ASSETS This note provides a breakdown of goodwill and other intangible assets, including changes due to foreign currency translation and amortization expense Goodwill and Other Intangible Assets (millions) | Metric (millions) | March 31, 2024 | December 31, 2023 | Change (millions) | | :---------------- | :------------- | :---------------- | :---------------- | | Goodwill | $1,325.8 | $1,333.4 | $(7.6) | | Intangible assets, net | $291.6 | $308.8 | $(17.2) | - Goodwill decreased by $7.6 million, primarily due to foreign currency translation adjustments[35][37] - Amortization expense for acquired intangible assets was $13.9 million for the three months ended March 31, 2024, down from $14.8 million in the prior year[35][37] Note 5. INVENTORIES This note details the composition and changes in the company's inventory, including finished goods, repair parts, work in process, and raw materials Inventories (millions) | Inventory Type (millions) | March 31, 2024 | December 31, 2023 | Change (millions) | | :------------------------ | :------------- | :---------------- | :---------------- | | Finished goods | $1,608.6 | $1,460.7 | $147.9 | | Repair and replacement parts | $831.9 | $823.1 | $8.8 | | Work in process | $379.8 | $255.2 | $124.6 | | Raw materials | $961.6 | $901.7 | $59.9 | | Total Inventories, net | $3,781.9 | $3,440.7 | $341.2 | - Net inventories increased by $341.2 million from December 31, 2023, to March 31, 2024, with significant increases in finished goods and work in process[38] Note 6. PRODUCT WARRANTY This note outlines the company's product warranty reserve activity, including accruals, settlements, and foreign currency translation adjustments Product Warranty Reserve Activity (millions) | Warranty Reserve Activity (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Balance at beginning of period | $800.8 | $640.0 | | Accruals for warranties issued | $92.1 | $89.7 | | 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 warranty reserve balance at March 31, 2024, was $793.1 million, an increase from $677.0 million in the prior year, reflecting higher accruals for warranties issued and settlements[40] Note 7. SUPPLIER FINANCE PROGRAMS This note explains the company's use of supplier financing arrangements and the outstanding amounts under these programs - The Company utilizes supplier financing arrangements where banks or intermediaries purchase receivables from suppliers, allowing early payment, with amounts outstanding under these programs totaling $87.5 million at March 31, 2024, up from $82.7 million at December 31, 2023[42] Note 8. INDEBTEDNESS This note details the company's debt structure, including new senior notes, term loan facilities, and the termination of bridge financing related to the PTx Trimble joint venture Indebtedness (millions) | Debt Type (millions) | March 31, 2024 | December 31, 2023 | Change (millions) | | :------------------- | :------------- | :---------------- | :---------------- | | Credit facility, expires 2027 | $580.0 | $0.0 | $580.0 | | 5.450% Senior notes due 2027 | $400.0 | $0.0 | $400.0 | | 5.800% Senior notes due 2034 | $700.0 | $0.0 | $700.0 | | Term Loan Facility borrowings | $500.0 | $0.0 | $500.0 | | Total long-term indebtedness | $3,425.7 | $1,377.2 | $2,048.5 | - The Company significantly increased its long-term debt by over $2 billion, primarily through new Senior Notes ($400 million due 2027, $700 million due 2034) and a $500 million Term Loan Facility, to fund the PTx Trimble joint venture transaction[27][43][167] - The $2.0 billion Bridge Facility entered into in September 2023 was terminated on March 25, 2024, as permanent financing was secured[58][166] Note 9. RECOVERABLE INDIRECT TAXES This note discusses the company's recoverable indirect tax credits, particularly VAT tax credits in Brazilian operations, and their assessment for recoverability - The Company's Brazilian operations had approximately $93.9 million in VAT tax credits, net of reserves, as of March 31, 2024, which are assessed for recoverability based on historical realization and future expectations[61] Note 10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES This note describes the company's use of derivative instruments for cash flow hedges and non-designated contracts to manage foreign currency and commodity risks - The Company uses cash flow hedges for foreign currency and steel commodity contracts to minimize cash flow variability, with notional values for foreign currency cash flow hedges increasing from $262.2 million to $494.5 million year-over-year[62][63][64] - A treasury rate lock designated as a cash flow hedge for the 2034 Notes resulted in a $6.1 million after-tax gain recognized in accumulated other comprehensive loss[65][68] - Non-designated foreign currency contracts, used to economically hedge receivables and payables, had a notional amount of $2,545.2 million at March 31, 2024, down from $3,125.1 million at December 31, 2023[74] Note 11. STOCKHOLDERS' EQUITY This note provides a breakdown of stockholders' equity, including common stock, retained earnings, and accumulated other comprehensive loss, and details dividend payments Stockholders' Equity (millions) | Equity Component (millions) | December 31, 2023 | March 31, 2024 | Change (millions) | | :-------------------------- | :---------------- | :------------- | :---------------- | | Common Stock | $0.7 | $0.7 | $0.0 | | Additional Paid-in Capital | $4.1 | $0.0 | $(4.1) | | Retained Earnings | $6,360.0 | $6,505.9 | $145.9 | | Accumulated Other Comprehensive Loss | $(1,708.1) | $(1,751.5) | $(43.4) | | Total Stockholders' Equity | $4,656.8 | $4,755.2 | $98.4 | - Total stockholders' equity increased by $98.4 million, driven by net income of $168.0 million, partially offset by an increase in accumulated other comprehensive loss due to foreign currency translation adjustments and dividend payments[79] - The Company declared and paid cash dividends of $0.29 per common share in Q1 2024, up from $0.24 in Q1 2023, and a special variable dividend of $2.50 per common share was declared on April 25, 2024[87] Note 12. NET INCOME PER COMMON SHARE This note presents the basic and diluted net income per common share, along with the weighted average shares outstanding for the reporting periods Net Income Per Common Share | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | :-------------------------------- | | Basic Net Income Per Share | $2.25 | $3.11 | | Diluted Net Income Per Share | $2.25 | $3.10 | | Weighted Average Basic Shares Outstanding (millions) | 74.6 | 74.9 | | Weighted Average Diluted Shares Outstanding (millions) | 74.7 | 75.0 | - Basic and diluted net income per common share decreased significantly year-over-year, reflecting the lower net income for the period[89] Note 13. INCOME TAXES This note discusses the company's unrecognized income tax benefits, valuation allowances, and significant income tax provisions related to specific tax programs - Gross unrecognized income tax benefits were approximately $369.7 million at March 31, 2024, and the Company maintains a valuation allowance against net deferred tax assets in certain foreign jurisdictions[90][94] - In Q1 2023, the Company recorded a $34.8 million income tax provision related to enrollment in a Brazilian tax amnesty program for goodwill amortization disallowances[95] Note 14. PENSION AND POSTRETIREMENT BENEFIT PLANS This note details the net periodic costs and contributions for the company's defined pension and postretirement benefit plans Pension and Postretirement Benefit Plans (millions) | Metric (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------- | :-------------------------------- | :-------------------------------- | | Net periodic pension cost | $3.9 | $4.7 | | Net periodic postretirement benefit cost | $0.6 | $0.4 | - The Company made $10.8 million in contributions to defined pension benefit plans and $0.4 million to postretirement health care plans during Q1 2024[99][100] Note 15. FAIR VALUE OF FINANCIAL INSTRUMENTS This note provides the fair values of derivative assets and liabilities, explaining the valuation methodologies and classification levels Fair Value of Financial Instruments (millions) | Derivative Type (millions) | March 31, 2024 Fair Value | December 31, 2023 Fair Value | | :------------------------- | :------------------------ | :--------------------------- | | Derivative assets | $31.0 | $38.7 | | Derivative liabilities | $7.8 | $14.0 | - The fair values of derivative instruments are determined using discounted cash flow valuation models, classified as Level 2 due to observable market inputs[103][104] Note 16. COMMITMENTS AND CONTINGENCIES This note outlines the company's lease commitments, guarantees, and significant legal proceedings, including a patent infringement lawsuit Lease Commitments (millions) | Lease Type (millions) | March 31, 2024 Present Value | December 31, 2023 Present Value | | :-------------------- | :--------------------------- | :------------------------------ | | Operating Leases | $178.9 | $179.8 | | Finance Leases | $5.8 | $5.9 | - The Company had outstanding guarantees of approximately $43.6 million to its Argentine finance joint venture and accrued $12.6 million for residual value guarantees, with a maximum potential payment of $180.1 million[107][108] - A patent infringement lawsuit filed by Deere & Company against Precision Planting (acquired by AGCO) was decided in AGCO's favor in July 2022, with Deere appealing, and the previous owner of Precision Planting is obligated to reimburse AGCO for litigation costs and damages in case of an adverse outcome[112] Note 17. REVENUE This note details contract liabilities and net sales by major product category, highlighting changes in revenue recognition and product performance Contract Liabilities (millions) | Contract Liabilities (millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------ | :-------------------------------- | :-------------------------------- | | Balance at beginning of period | $310.7 | $239.0 | | Advance consideration received | $52.5 | $58.5 | | Revenue recognized | $(36.9) | $(40.9) | | Balance at March 31 | $321.5 | $259.6 | Net Sales by Major Product (millions) | Net Sales by Major Product (millions) | Q1 2024 | Q1 2023 | Change (millions) | % Change | | :------------------------------------ | :------ | :------ | :---------------- | :------- | | Tractors | $1,777.2 | $1,908.0 | $(130.8) | -6.86% | | Replacement parts | $433.7 | $455.7 | $(22.0) | -4.83% | | Grain storage and protein production systems | $205.2 | $255.9 | $(50.7) | -19.81% | | Combines, application equipment and other machinery | $512.6 | $713.9 | $(201.3) | -28.20% | | Total | $2,928.7 | $3,333.5 | $(404.8) | -12.14% | - Total net sales decreased by 12.14% year-over-year, with significant declines across all major product categories, especially combines, application equipment, and other machinery (-28.20%)[121][123] Note 18. SEGMENT REPORTING This note provides a breakdown of net sales and income from operations by geographic segment, illustrating regional performance and trends Net Sales by Segment (millions) | Segment (millions) | Q1 2024 Net Sales | Q1 2023 Net Sales | Change (millions) | % Change | | :----------------- | :---------------- | :---------------- | :---------------- | :------- | | North America | $729.6 | $923.1 | $(193.5) | -21.0% | | South America | $303.4 | $503.8 | $(200.4) | -39.8% | | Europe/Middle East | $1,729.0 | $1,703.8 | $25.2 | 1.5% | | Asia/Pacific/Africa | $166.7 | $202.8 | $(36.1) | -17.8% | | Total Segments | $2,928.7 | $3,333.5 | $(404.8) | -12.1% | Income from Operations by Segment (millions) | Segment (millions) | Q1 2024 Income from Operations | Q1 2023 Income from Operations | Change (millions) | % Change | | :----------------- | :----------------------------- | :----------------------------- | :---------------- | :------- | | North America | $42.4 | $102.1 | $(59.7) | -58.5% | | South America | $16.2 | $99.5 | $(83.3) | -83.7% | | Europe/Middle East | $282.9 | $239.4 | $43.5 | 18.2% | | Asia/Pacific/Africa | $8.0 | $18.1 | $(10.1) | -55.8% | | Total Segments | $349.5 | $459.1 | $(109.6) | -23.9% | - North America and South America segments experienced significant declines in both net sales and income from operations, while Europe/Middle East saw a modest increase in net sales and a notable increase in income from operations[126][149][151][153][155] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2024, compared to the same period in 2023. It covers overall financial highlights, detailed segment performance, liquidity, capital resources, commitments, and the Company's outlook, emphasizing the impact of the PTx Trimble joint venture General This section provides an overview of AGCO's operational characteristics, including cyclicality, seasonality, and the strategic importance of the PTx Trimble joint venture - AGCO's operations are cyclical and seasonal, influenced by farm income, commodity prices, weather, and government policies, with sales to dealers preceding retail sales to end-users, creating a time lag[130] - The PTx Trimble joint venture, completed on April 1, 2024, with AGCO owning 85%, is expected to create a global-leading mixed-fleet precision agriculture platform, consolidating Trimble's OneAg business and AGCO's JCA Technologies[131] Results of Operations This section analyzes the company's overall financial performance, including net sales, gross profit, operating income, and net income, highlighting key drivers of change Results of Operations (millions) | Metric | Q1 2024 | Q1 2023 | Change | % of Net Sales (2024) | % of Net Sales (2023) | | :------------------------------------ | :------ | :------ | :----- | :-------------------- | :-------------------- | | Net sales (millions) | $2,928.7 | $3,333.5 | $(404.8) | 100.0% | 100.0% | | Gross profit (millions) | $769.8 | $854.9 | $(85.1) | 26.3% | 25.6% | | Income from operations (millions) | $273.6 | $387.3 | $(113.7) | 9.3% | 11.6% | | Net income attributable to AGCO (millions) | $168.0 | $232.6 | $(64.6) | 5.7% | 7.0% | | Diluted EPS | $2.25 | $3.10 | $(0.85) | N/A | N/A | - Net sales decreased by 12.1% year-over-year, primarily due to lower sales volumes, while gross profit margin improved from 25.6% to 26.3% due to positive net pricing impacts[135][138] - Income from operations declined by 29.4% due to lower sales and production volumes, and higher selling, general and administrative (SG&A) expenses, which increased as a percentage of net sales from 10.0% to 12.0%[135][139] - Engineering expenses increased as a percentage of net sales from 3.6% to 4.5%, driven by increased product innovation and technology investments[140] Results of Operations - Segment Information This section provides a detailed analysis of net sales and income from operations across the company's geographic segments, highlighting regional performance drivers Net Sales by Segment (millions) | Segment | Q1 2024 Net Sales (millions) | Q1 2023 Net Sales (millions) | % Change | | :----------------- | :----------------------------- | :----------------------------- | :------- | | Europe/Middle East | $1,729.0 | $1,703.8 | 1.5% | | North America | $729.6 | $923.1 | -21.0% | | South America | $303.4 | $503.8 | -39.8% | | Asia/Pacific/Africa | $166.7 | $202.8 | -17.8% | Income from Operations by Segment (millions) | Segment | Q1 2024 Income from Operations (millions) | Q1 2023 Income from Operations (millions) | % Change | | :----------------- | :---------------------------------------- | :---------------------------------------- | :------- | | Europe/Middle East | $282.9 | $239.4 | 18.2% | | North America | $42.4 | $102.1 | -58.5% | | South America | $16.2 | $99.5 | -83.7% | | Asia/Pacific/Africa | $8.0 | $18.1 | -55.8% | - EME net sales increased due to favorable foreign currency translation and positive pricing, leading to an 18.2% increase in income from operations[149][150] - North America and South America experienced significant declines in sales and operating income due to lower sales volumes across various product categories[151][152][153][154] Liquidity and Capital Resources This section discusses the company's financial flexibility, funding sources, debt levels, and cash flow performance, particularly in relation to the PTx Trimble joint venture - The Company's financing requirements are seasonal, and available funds from credit facilities, accounts receivable sales agreements, and internally generated cash are expected to be sufficient for working capital, capital expenditures, and debt service[158] - Total indebtedness increased significantly to $3,697.4 million at March 31, 2024, from $1,379.5 million at December 31, 2023, primarily due to new Senior Notes and a Term Loan Facility to finance the PTx Trimble joint venture[43][163][164][167] - The debt to capitalization ratio increased from 23.0% at December 31, 2023, to 43.9% at March 31, 2024, reflecting the increased indebtedness[169] - Cash flows used in operating activities decreased to $370.0 million in Q1 2024 from $557.1 million in Q1 2023, mainly due to changes in working capital[183][184] - Working capital increased to $4,160.9 million at March 31, 2024, from $1,997.2 million at December 31, 2023, largely due to increased cash from debt issuance[183][184] - Capital expenditures decreased to $95.0 million in Q1 2024 from $125.3 million in Q1 2023[185] Commitments, Off-Balance Sheet Arrangements and Contingencies This section details the company's financial commitments, off-balance sheet activities, and potential liabilities arising from guarantees and legal proceedings - Outstanding guarantees to the Argentine finance joint venture totaled $43.6 million, and accrued residual value guarantees were $12.6 million, with a maximum potential payment of $180.1 million[187] - The Company sells a majority of its wholesale receivables as off-balance sheet transactions, and outstanding foreign exchange contracts had a gross notional amount of $3,039.7 million[187] - The patent infringement lawsuit by Deere & Company against Precision Planting was decided in AGCO's favor, and Deere has appealed, with the previous owner of Precision Planting obligated to indemnify AGCO for litigation costs and damages[188] Outlook This section provides the company's forward-looking expectations for global industry demand, net sales, and operating margins, considering the impact of the PTx Trimble joint venture - Global industry demand for farm equipment is expected to decline in 2024, and AGCO's net sales, including PTx Trimble, are projected to moderately decrease due to lower sales volumes and adverse foreign currency translation, partially offset by modest positive pricing[191] - Operating margins are expected to moderately decrease from 2023 levels, reflecting lower net sales and production volumes, partially offset by cost controls and modestly lower investments in engineering and technology[191] Critical Accounting Policies and Estimates This section highlights the key accounting policies and estimates that require significant management judgment and can materially impact the financial statements - Management's discussion and analysis are based on financial statements prepared in accordance with U.S. GAAP, requiring estimates and judgments for items like discount and sales incentive allowances, deferred income taxes, pensions, goodwill, and recoverable indirect taxes[193][194] Forward-Looking Statements This section cautions readers about the inherent risks and uncertainties associated with forward-looking statements regarding future financial performance and market conditions - The report contains forward-looking statements regarding future events, earnings, sales, margins, and market conditions, which involve risks and uncertainties, and actual results may differ materially due to factors like economic conditions, credit availability, commodity prices, and supply chain disruptions[195][196] - Key risks include general economic and capital market conditions, availability of credit, worldwide demand for agricultural products, cost of raw materials, government policies, weather, interest and foreign currency exchange rates, inflation, and the integration of acquisitions like PTx Trimble[196] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section refers to the Company's Annual Report on Form 10-K for detailed quantitative and qualitative disclosures about market risks, specifically noting no material changes in exposure to market risks as of the first quarter of 2024 - There have been no material changes to the Company's exposure to market risks as of the first quarter of 2024, as detailed in the Annual Report on Form 10-K for the year ended December 31, 2023[202] Item 4. Controls and Procedures This section confirms the effectiveness of the Company's disclosure controls and procedures as of March 31, 2024, at a reasonable assurance level. It also states that no material changes in internal control over financial reporting occurred during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2024[203] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2024, that materially affected or are reasonably likely to materially affect internal control over financial reporting[205] PART II. OTHER INFORMATION This section provides additional information not covered in Part I, including legal proceedings, risk factors, equity security sales, other disclosures, and a list of exhibits Item 1. Legal Proceedings This section refers to Note 16 of the Condensed Consolidated Financial Statements for a discussion of legal claims and actions incidental to the Company's business - Legal claims and actions incidental to the business are discussed in Note 16 of the Condensed Consolidated Financial Statements[206] Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023, have occurred[207] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no purchases of the Company's common stock made by or on behalf of the Company during the three months ended March 31, 2024 - No purchases of common stock were made by or on behalf of the Company during the three months ended March 31, 2024[208] Item 5. Other Information This section confirms that no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[209] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including agreements related to the PTx Trimble joint venture, senior note indentures, credit agreement amendments, and certifications - Key exhibits include the Amended and Restated Sale and Contribution Agreement for PTx Trimble, Senior Note Indenture, First Supplemental Indenture for 2027 and 2034 Notes, and the Second Amendment to the 2022 Credit Agreement[211] SIGNATURES This section contains the required signatures for the Form 10-Q, certifying its submission on behalf of AGCO Corporation SIGNATURES This section contains the required signatures for the Form 10-Q, certifying its submission on behalf of AGCO Corporation - The report was signed by Damon Audia, Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) on May 3, 2024[213]