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x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from _________ to _________
|
Delaware
|
58-1960019
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
4205 River Green Parkway
Duluth, Georgia
|
30096
|
(Address of principal executive offices)
|
(Zip Code)
|
(770) 813-9200
|
|
|
|
x
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
Emerging growth company
|
Securities registered pursuant to Section 12(b) of the Act
|
||
Title of Class
|
Trading Symbol
|
Name of exchange on which registered
|
Common stock
|
AGCO
|
New York Stock Exchange (NYSE)
|
|
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Page
Numbers
|
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Item 1.
|
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Item 2.
|
|||
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Item 3.
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|||
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Item 4.
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|||
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Item 1.
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|||
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Item 2.
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|||
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Item 6.
|
|||
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PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
292.8
|
|
|
$
|
326.1
|
|
Accounts and notes receivable, net
|
928.5
|
|
|
880.3
|
|
||
Inventories, net
|
2,307.6
|
|
|
1,908.7
|
|
||
Other current assets
|
432.4
|
|
|
422.3
|
|
||
Total current assets
|
3,961.3
|
|
|
3,537.4
|
|
||
Property, plant and equipment, net
|
1,363.3
|
|
|
1,373.1
|
|
||
Right-of-use lease assets
|
193.8
|
|
|
—
|
|
||
Investment in affiliates
|
393.2
|
|
|
400.0
|
|
||
Deferred tax assets
|
119.7
|
|
|
104.9
|
|
||
Other assets
|
132.1
|
|
|
142.4
|
|
||
Intangible assets, net
|
555.3
|
|
|
573.1
|
|
||
Goodwill
|
1,485.6
|
|
|
1,495.5
|
|
||
Total assets
|
$
|
8,204.3
|
|
|
$
|
7,626.4
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
68.4
|
|
|
$
|
72.6
|
|
Short-term borrowings
|
181.5
|
|
|
138.0
|
|
||
Senior term loan
|
224.7
|
|
|
—
|
|
||
Accounts payable
|
964.3
|
|
|
865.9
|
|
||
Accrued expenses
|
1,441.0
|
|
|
1,522.4
|
|
||
Other current liabilities
|
174.8
|
|
|
167.8
|
|
||
Total current liabilities
|
3,054.7
|
|
|
2,766.7
|
|
||
Long-term debt, less current portion and debt issuance costs
|
1,404.3
|
|
|
1,275.3
|
|
||
Operating lease liabilities
|
150.8
|
|
|
—
|
|
||
Pensions and postretirement health care benefits
|
216.8
|
|
|
223.2
|
|
||
Deferred tax liabilities
|
106.8
|
|
|
116.3
|
|
||
Other noncurrent liabilities
|
251.9
|
|
|
251.4
|
|
||
Total liabilities
|
5,185.3
|
|
|
4,632.9
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
Stockholders’ Equity:
|
|
|
|
|
|
||
AGCO Corporation stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding in 2019 and 2018
|
—
|
|
|
—
|
|
||
Common stock; $0.01 par value, 150,000,000 shares authorized, 76,742,850 and 76,536,755 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
|
0.8
|
|
|
0.8
|
|
||
Additional paid-in capital
|
9.7
|
|
|
10.2
|
|
||
Retained earnings
|
4,491.0
|
|
|
4,477.3
|
|
||
Accumulated other comprehensive loss
|
(1,545.8
|
)
|
|
(1,555.4
|
)
|
||
Total AGCO Corporation stockholders’ equity
|
2,955.7
|
|
|
2,932.9
|
|
||
Noncontrolling interests
|
63.3
|
|
|
60.6
|
|
||
Total stockholders’ equity
|
3,019.0
|
|
|
2,993.5
|
|
||
Total liabilities and stockholders’ equity
|
$
|
8,204.3
|
|
|
$
|
7,626.4
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
1,995.8
|
|
|
$
|
2,007.5
|
|
Cost of goods sold
|
1,539.1
|
|
|
1,579.5
|
|
||
Gross profit
|
456.7
|
|
|
428.0
|
|
||
Selling, general and administrative expenses
|
262.2
|
|
|
264.6
|
|
||
Operating expenses:
|
|
|
|
||||
Engineering expenses
|
84.5
|
|
|
90.9
|
|
||
Restructuring expenses
|
1.7
|
|
|
5.9
|
|
||
Amortization of intangibles
|
15.3
|
|
|
15.7
|
|
||
Bad debt expense
|
0.6
|
|
|
0.4
|
|
||
Income from operations
|
92.4
|
|
|
50.5
|
|
||
Interest expense, net
|
3.5
|
|
|
10.3
|
|
||
Other expense, net
|
14.6
|
|
|
11.5
|
|
||
Income before income taxes and equity in net earnings of affiliates
|
74.3
|
|
|
28.7
|
|
||
Income tax provision
|
19.4
|
|
|
11.4
|
|
||
Income before equity in net earnings of affiliates
|
54.9
|
|
|
17.3
|
|
||
Equity in net earnings of affiliates
|
10.8
|
|
|
7.7
|
|
||
Net income
|
65.7
|
|
|
25.0
|
|
||
Net income attributable to noncontrolling interests
|
(0.6
|
)
|
|
(0.7
|
)
|
||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
65.1
|
|
|
$
|
24.3
|
|
Net income per common share attributable to AGCO Corporation and subsidiaries:
|
|
|
|
|
|
||
Basic
|
$
|
0.85
|
|
|
$
|
0.31
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
0.30
|
|
Cash dividends declared and paid per common share
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||
Basic
|
76.6
|
|
|
79.6
|
|
||
Diluted
|
77.5
|
|
|
80.5
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
65.7
|
|
|
$
|
25.0
|
|
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
12.2
|
|
|
9.7
|
|
||
Defined benefit pension plans, net of tax
|
3.0
|
|
|
3.1
|
|
||
Unrealized loss on derivatives, net of tax
|
(4.1
|
)
|
|
(0.9
|
)
|
||
Other comprehensive income, net of reclassification adjustments
|
11.1
|
|
|
11.9
|
|
||
Comprehensive income
|
76.8
|
|
|
36.9
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(2.1
|
)
|
|
(0.8
|
)
|
||
Comprehensive income attributable to AGCO Corporation and subsidiaries
|
$
|
74.7
|
|
|
$
|
36.1
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
65.7
|
|
|
$
|
25.0
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation
|
53.0
|
|
|
59.2
|
|
||
Amortization of intangibles
|
15.3
|
|
|
15.7
|
|
||
Stock compensation expense
|
12.5
|
|
|
9.2
|
|
||
Equity in net earnings of affiliates, net of cash received
|
(10.1
|
)
|
|
(4.3
|
)
|
||
Deferred income tax benefit
|
(8.6
|
)
|
|
(7.0
|
)
|
||
Other
|
0.8
|
|
|
0.1
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts and notes receivable, net
|
(65.7
|
)
|
|
6.2
|
|
||
Inventories, net
|
(418.6
|
)
|
|
(398.2
|
)
|
||
Other current and noncurrent assets
|
(4.9
|
)
|
|
(36.2
|
)
|
||
Accounts payable
|
127.5
|
|
|
66.4
|
|
||
Accrued expenses
|
(107.7
|
)
|
|
(108.4
|
)
|
||
Other current and noncurrent liabilities
|
10.9
|
|
|
11.0
|
|
||
Total adjustments
|
(395.6
|
)
|
|
(386.3
|
)
|
||
Net cash used in operating activities
|
(329.9
|
)
|
|
(361.3
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(60.9
|
)
|
|
(46.1
|
)
|
||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
1.5
|
|
||
Other
|
—
|
|
|
0.4
|
|
||
Net cash used in investing activities
|
(60.9
|
)
|
|
(44.2
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from indebtedness
|
1,139.8
|
|
|
1,329.6
|
|
||
Repayments of indebtedness
|
(716.7
|
)
|
|
(928.1
|
)
|
||
Purchases and retirement of common stock
|
(30.0
|
)
|
|
(7.1
|
)
|
||
Payment of dividends to stockholders
|
(11.5
|
)
|
|
(11.9
|
)
|
||
Payment of minimum tax withholdings on stock compensation
|
(23.0
|
)
|
|
(3.2
|
)
|
||
Payment of debt issuance costs
|
(0.5
|
)
|
|
—
|
|
||
Investment by noncontrolling interests
|
0.6
|
|
|
—
|
|
||
Net cash provided by financing activities
|
358.7
|
|
|
379.3
|
|
||
Effects of exchange rate changes on cash and cash equivalents
|
(1.2
|
)
|
|
6.7
|
|
||
Decrease in cash and cash equivalents
|
(33.3
|
)
|
|
(19.5
|
)
|
||
Cash and cash equivalents, beginning of period
|
326.1
|
|
|
367.7
|
|
||
Cash and cash equivalents, end of period
|
$
|
292.8
|
|
|
$
|
348.2
|
|
|
Write-down of Property, Plant and Equipment
|
|
Employee Severance
|
|
Total
|
||||||
Balance as of December 31, 2018
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
7.1
|
|
First quarter 2019 provision
|
0.3
|
|
|
1.4
|
|
|
1.7
|
|
|||
Less: Non-cash expense
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Cash expense
|
—
|
|
|
1.4
|
|
|
1.4
|
|
|||
First quarter 2019 cash activity
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
|||
Foreign currency translation
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Balance as of March 31, 2019
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
5.8
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Cost of goods sold
|
|
$
|
0.5
|
|
|
$
|
0.8
|
|
Selling, general and administrative expenses
|
|
12.0
|
|
|
8.4
|
|
||
Total stock compensation expense
|
|
$
|
12.5
|
|
|
$
|
9.2
|
|
Shares awarded but not earned at January 1
|
938,862
|
|
Shares awarded
|
542,180
|
|
Shares forfeited
|
(3,620
|
)
|
Shares earned
|
(11,200
|
)
|
Shares awarded but not earned at March 31
|
1,466,222
|
|
RSUs awarded but not vested at January 1
|
352,975
|
|
RSUs awarded
|
165,160
|
|
RSUs forfeited
|
(1,192
|
)
|
RSUs vested
|
(111,419
|
)
|
RSUs awarded but not vested at March 31
|
405,524
|
|
SSARs outstanding at January 1
|
1,099,592
|
|
SSARs granted
|
243,600
|
|
SSARs exercised
|
(56,738
|
)
|
SSARs canceled or forfeited
|
(1,862
|
)
|
SSARs outstanding at March 31
|
1,284,592
|
|
|
Trademarks and
Tradenames
|
|
Customer
Relationships
|
|
Patents and
Technology
|
|
Land Use Rights
|
|
Total
|
||||||||||
Gross carrying amounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of December 31, 2018
|
$
|
203.4
|
|
|
$
|
586.3
|
|
|
$
|
155.8
|
|
|
$
|
8.6
|
|
|
$
|
954.1
|
|
Foreign currency translation
|
(0.9
|
)
|
|
(1.2
|
)
|
|
(1.4
|
)
|
|
0.2
|
|
|
(3.3
|
)
|
|||||
Balance as of March 31, 2019
|
$
|
202.5
|
|
|
$
|
585.1
|
|
|
$
|
154.4
|
|
|
$
|
8.8
|
|
|
$
|
950.8
|
|
|
Trademarks and
Tradenames
|
|
Customer
Relationships
|
|
Patents and
Technology
|
|
Land Use Rights
|
|
Total
|
||||||||||
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of December 31, 2018
|
$
|
73.4
|
|
|
$
|
310.8
|
|
|
$
|
80.7
|
|
|
$
|
3.0
|
|
|
$
|
467.9
|
|
Amortization expense
|
2.8
|
|
|
10.0
|
|
|
2.5
|
|
|
—
|
|
|
15.3
|
|
|||||
Foreign currency translation
|
—
|
|
|
(0.5
|
)
|
|
(0.9
|
)
|
|
0.1
|
|
|
(1.3
|
)
|
|||||
Balance as of March 31, 2019
|
$
|
76.2
|
|
|
$
|
320.3
|
|
|
$
|
82.3
|
|
|
$
|
3.1
|
|
|
$
|
481.9
|
|
|
Trademarks and
Tradenames
|
||
Indefinite-lived intangible assets:
|
|
||
Balance as of December 31, 2018
|
$
|
86.9
|
|
Foreign currency translation
|
(0.5
|
)
|
|
Balance as of March 31, 2019
|
$
|
86.4
|
|
|
North
America
|
|
South
America
|
|
Europe/Middle East
|
|
Asia/Pacific/Africa
|
|
Consolidated
|
||||||||||
Balance as of December 31, 2018
|
$
|
611.1
|
|
|
$
|
116.7
|
|
|
$
|
649.6
|
|
|
$
|
118.1
|
|
|
$
|
1,495.5
|
|
Foreign currency translation
|
—
|
|
|
(0.5
|
)
|
|
(9.5
|
)
|
|
0.1
|
|
|
(9.9
|
)
|
|||||
Balance as of March 31, 2019
|
$
|
611.1
|
|
|
$
|
116.2
|
|
|
$
|
640.1
|
|
|
$
|
118.2
|
|
|
$
|
1,485.6
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
1.056% Senior term loan due 2020
|
$
|
224.7
|
|
|
$
|
228.7
|
|
Senior term loan due 2022
|
168.5
|
|
|
171.5
|
|
||
Credit facility, expires 2023
|
207.9
|
|
|
114.4
|
|
||
1.002% Senior term loan due 2025
|
280.9
|
|
|
—
|
|
||
Senior term loans due between 2019 and 2028
|
801.1
|
|
|
815.3
|
|
||
Other long-term debt
|
17.1
|
|
|
20.6
|
|
||
Debt issuance costs
|
(2.8
|
)
|
|
(2.6
|
)
|
||
|
1,697.4
|
|
|
1,347.9
|
|
||
Less: 1.056% Senior term loan due 2020
|
(224.7
|
)
|
|
—
|
|
||
Senior term loans due 2019
|
(62.9
|
)
|
|
(63.8
|
)
|
||
Current portion of other long-term debt
|
(5.5
|
)
|
|
(8.8
|
)
|
||
Total long-term indebtedness, less current portion
|
$
|
1,404.3
|
|
|
$
|
1,275.3
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
841.3
|
|
|
$
|
660.4
|
|
Repair and replacement parts
|
629.8
|
|
|
587.3
|
|
||
Work in process
|
289.6
|
|
|
217.5
|
|
||
Raw materials
|
546.9
|
|
|
443.5
|
|
||
Inventories, net
|
$
|
2,307.6
|
|
|
$
|
1,908.7
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
360.9
|
|
|
$
|
316.0
|
|
Accruals for warranties issued during the period
|
51.1
|
|
|
58.5
|
|
||
Settlements made (in cash or in kind) during the period
|
(47.4
|
)
|
|
(55.9
|
)
|
||
Foreign currency translation
|
(3.3
|
)
|
|
7.2
|
|
||
Balance at March 31
|
$
|
361.3
|
|
|
$
|
325.8
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Basic net income per share:
|
|
|
|
||||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
65.1
|
|
|
$
|
24.3
|
|
Weighted average number of common shares outstanding
|
76.6
|
|
|
79.6
|
|
||
Basic net income per share attributable to AGCO Corporation and subsidiaries
|
$
|
0.85
|
|
|
$
|
0.31
|
|
Diluted net income per share:
|
|
|
|
||||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
65.1
|
|
|
$
|
24.3
|
|
Weighted average number of common shares outstanding
|
76.6
|
|
|
79.6
|
|
||
Dilutive SSARs, performance share awards and RSUs
|
0.9
|
|
|
0.9
|
|
||
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share
|
77.5
|
|
|
80.5
|
|
||
Diluted net income per share attributable to AGCO Corporation and subsidiaries
|
$
|
0.84
|
|
|
$
|
0.30
|
|
|
|
|
Recognized in Net Income
|
|
|
||||||||
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 Gains (Losses)
|
||||||
2019
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts (1)
|
$
|
(4.7
|
)
|
|
Cost of goods sold
|
|
$
|
(0.6
|
)
|
|
$
|
1,539.1
|
|
2018
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
(1.4
|
)
|
|
Cost of goods sold
|
|
$
|
(0.6
|
)
|
|
$
|
1,579.5
|
|
Interest rate swap contract
|
(0.7
|
)
|
|
Interest expense, net
|
|
(0.6
|
)
|
|
10.3
|
|
|||
Total
|
$
|
(2.1
|
)
|
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Before-Tax Amount
|
|
Income Tax
|
|
After-Tax Amount
|
||||||
Accumulated derivative net gains as of December 31, 2018
|
|
$
|
1.6
|
|
|
$
|
0.2
|
|
|
$
|
1.4
|
|
Net changes in fair value of derivatives
|
|
(5.1
|
)
|
|
(0.4
|
)
|
|
(4.7
|
)
|
|||
Net losses reclassified from accumulated other comprehensive loss into income
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Accumulated derivative net losses as of March 31, 2019
|
|
$
|
(2.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(2.7
|
)
|
|
Notional Amount as of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Cross currency swap contract
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Foreign currency denominated debt
|
179.8
|
|
|
—
|
|
|
Gain (Loss) Recognized in Accumulated
Other Comprehensive Loss for the Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Cross currency swap contract
|
$
|
6.9
|
|
|
$
|
(4.6
|
)
|
Foreign currency denominated debt
|
1.7
|
|
|
(10.4
|
)
|
|
|
|
Gain Recognized in Earnings For the Three Months Ended
|
||||||
|
Classification of Gain
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
Foreign currency contracts
|
Other expense, net
|
|
$
|
8.8
|
|
|
$
|
6.1
|
|
|
Asset Derivatives as of March 31, 2019
|
|
Liability Derivatives as of March 31, 2019
|
||||||||
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||
Derivative instruments designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
0.8
|
|
|
Other current liabilities
|
|
$
|
3.8
|
|
Cross currency swap contract
|
Other noncurrent assets
|
|
24.6
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Derivative instruments not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
9.4
|
|
|
Other current liabilities
|
|
3.9
|
|
||
Total derivative instruments
|
|
|
$
|
34.8
|
|
|
|
|
$
|
7.7
|
|
|
Asset Derivatives as of December 31, 2018
|
|
Liability Derivatives as of December 31, 2018
|
||||||||
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Fair
Value
|
||||
Derivative instruments designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
1.9
|
|
|
Other current liabilities
|
|
$
|
0.4
|
|
Cross currency swap contract
|
Other noncurrent assets
|
|
17.7
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Derivative instruments not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
5.1
|
|
|
Other current liabilities
|
|
6.2
|
|
||
Total derivative instruments
|
|
|
$
|
24.7
|
|
|
|
|
$
|
6.6
|
|
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total Stockholders’
Equity |
||||||||||||
Balance, December 31, 2018
|
$
|
0.8
|
|
|
$
|
10.2
|
|
|
$
|
4,477.3
|
|
|
$
|
(1,555.4
|
)
|
|
$
|
60.6
|
|
|
$
|
2,993.5
|
|
Stock compensation
|
—
|
|
|
12.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.5
|
|
||||||
Issuance of stock awards
|
—
|
|
|
(13.0
|
)
|
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
(22.6
|
)
|
||||||
SSARs exercised
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
—
|
|
|
—
|
|
|
65.1
|
|
|
—
|
|
|
0.6
|
|
|
65.7
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|
1.5
|
|
|
12.2
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
||||||
Unrealized loss on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(11.5
|
)
|
|
—
|
|
|
—
|
|
|
(11.5
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
||||||
Investment by noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
||||||
Balance, March 31, 2019
|
$
|
0.8
|
|
|
$
|
9.7
|
|
|
$
|
4,491.0
|
|
|
$
|
(1,545.8
|
)
|
|
$
|
63.3
|
|
|
$
|
3,019.0
|
|
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total Stockholders’
Equity |
||||||||||||
Balance, December 31, 2017
|
$
|
0.8
|
|
|
$
|
136.6
|
|
|
$
|
4,253.8
|
|
|
$
|
(1,361.6
|
)
|
|
$
|
65.7
|
|
|
$
|
3,095.3
|
|
Stock compensation
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
||||||
Issuance of stock awards
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||||
SSARs exercised
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
—
|
|
|
—
|
|
|
24.3
|
|
|
—
|
|
|
0.7
|
|
|
25.0
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
|
0.1
|
|
|
9.7
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
||||||
Unrealized loss on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
||||||
Adjustment related to the adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||||
Balance, March 31, 2018
|
$
|
0.8
|
|
|
$
|
135.3
|
|
|
$
|
4,266.6
|
|
|
$
|
(1,349.8
|
)
|
|
$
|
66.5
|
|
|
$
|
3,119.4
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
0.6
|
|
|
$
|
0.7
|
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustments
|
1.5
|
|
|
0.1
|
|
||
Total comprehensive income
|
$
|
2.1
|
|
|
$
|
0.8
|
|
|
Defined Benefit Pension Plans
|
|
Deferred Net Gains (Losses) on Derivatives
|
|
Cumulative Translation Adjustment
|
|
Total
|
||||||||
Accumulated other comprehensive loss, December 31, 2018
|
$
|
(282.4
|
)
|
|
$
|
1.4
|
|
|
$
|
(1,274.4
|
)
|
|
$
|
(1,555.4
|
)
|
Other comprehensive (loss) income before reclassifications
|
—
|
|
|
(4.7
|
)
|
|
10.7
|
|
|
6.0
|
|
||||
Net losses reclassified from accumulated other comprehensive loss
|
3.0
|
|
|
0.6
|
|
|
—
|
|
|
3.6
|
|
||||
Other comprehensive income (loss), net of reclassification adjustments
|
3.0
|
|
|
(4.1
|
)
|
|
10.7
|
|
|
9.6
|
|
||||
Accumulated other comprehensive loss, March 31, 2019
|
$
|
(279.4
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(1,263.7
|
)
|
|
$
|
(1,545.8
|
)
|
|
|
Amount Reclassified from Accumulated Other Comprehensive Loss
|
Affected Line Item within the Condensed Consolidated
Statements of Operations
|
||||||
Details about Accumulated Other Comprehensive Loss Components
|
|
Three Months Ended March 31, 2019(1)
|
|
Three Months Ended March 31, 2018(1)
|
|||||
Derivatives:
|
|
|
|
|
|
||||
Net losses on foreign currency contracts
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
Cost of goods sold
|
Net losses on interest rate swap contract
|
|
—
|
|
|
0.6
|
|
Interest expense, net
|
||
Reclassification before tax
|
|
0.6
|
|
|
1.2
|
|
|
||
|
|
—
|
|
|
—
|
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
0.6
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
||||
Defined benefit pension plans:
|
|
|
|
|
|
||||
Amortization of net actuarial losses
|
|
$
|
3.1
|
|
|
$
|
3.1
|
|
Other expense, net(2)
|
Amortization of prior service cost
|
|
0.4
|
|
|
0.4
|
|
Other expense, net(2)
|
||
Reclassification before tax
|
|
3.5
|
|
|
3.5
|
|
|
||
|
|
(0.5
|
)
|
|
(0.4
|
)
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
3.0
|
|
|
$
|
3.1
|
|
|
|
|
|
|
|
|
||||
Net losses reclassified from accumulated other comprehensive loss
|
|
$
|
3.6
|
|
|
$
|
4.3
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Pension benefits
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
3.9
|
|
|
$
|
4.9
|
|
Interest cost
|
|
5.3
|
|
|
5.1
|
|
||
Expected return on plan assets
|
|
(7.2
|
)
|
|
(9.4
|
)
|
||
Amortization of net actuarial losses
|
|
3.1
|
|
|
3.1
|
|
||
Amortization of prior service cost
|
|
0.4
|
|
|
0.3
|
|
||
Net periodic pension cost
|
|
$
|
5.5
|
|
|
$
|
4.0
|
|
|
|
Three Months Ended March 31,
|
||||||
Postretirement benefits
|
|
2019
|
|
2018
|
||||
Interest cost
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Amortization of prior service cost
|
|
—
|
|
|
0.1
|
|
||
Net periodic postretirement benefit cost
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before-Tax Amount
|
|
Income Tax
|
|
After-Tax Amount
|
||||||
Accumulated other comprehensive loss as of December 31, 2018
|
|
$
|
(379.8
|
)
|
|
$
|
(97.4
|
)
|
|
$
|
(282.4
|
)
|
Amortization of net actuarial losses
|
|
3.1
|
|
|
0.5
|
|
|
2.6
|
|
|||
Amortization of prior service cost
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||
Accumulated other comprehensive loss as of March 31, 2019
|
|
$
|
(376.3
|
)
|
|
$
|
(96.9
|
)
|
|
$
|
(279.4
|
)
|
|
As of March 31, 2019
|
|||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Derivative assets
|
$
|
—
|
|
$
|
34.8
|
|
$
|
—
|
|
$
|
34.8
|
|
Derivative liabilities
|
$
|
—
|
|
$
|
7.7
|
|
$
|
—
|
|
$
|
7.7
|
|
|
As of December 31, 2018
|
|||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Derivative assets
|
$
|
—
|
|
$
|
24.7
|
|
$
|
—
|
|
$
|
24.7
|
|
Derivative liabilities
|
$
|
—
|
|
$
|
6.6
|
|
$
|
—
|
|
$
|
6.6
|
|
Three Months Ended March 31,
|
|
North
America |
|
South
America |
|
Europe/Middle East
|
|
Asia/Pacific/Africa
|
|
Consolidated
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
496.2
|
|
|
$
|
156.1
|
|
|
$
|
1,210.6
|
|
|
$
|
132.9
|
|
|
$
|
1,995.8
|
|
Income (loss) from operations
|
|
30.6
|
|
|
(8.5
|
)
|
|
127.7
|
|
|
3.4
|
|
|
153.2
|
|
|||||
Depreciation
|
|
15.6
|
|
|
8.5
|
|
|
26.0
|
|
|
2.9
|
|
|
53.0
|
|
|||||
Capital expenditures
|
|
18.3
|
|
|
12.1
|
|
|
29.5
|
|
|
1.0
|
|
|
60.9
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
502.9
|
|
|
$
|
182.1
|
|
|
$
|
1,163.7
|
|
|
$
|
158.8
|
|
|
$
|
2,007.5
|
|
Income (loss) from operations
|
|
26.8
|
|
|
(16.6
|
)
|
|
99.0
|
|
|
4.7
|
|
|
113.9
|
|
|||||
Depreciation
|
|
17.2
|
|
|
8.0
|
|
|
30.0
|
|
|
4.0
|
|
|
59.2
|
|
|||||
Capital expenditures
|
|
12.1
|
|
|
6.9
|
|
|
25.1
|
|
|
2.0
|
|
|
46.1
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of March 31, 2019
|
|
$
|
1,235.2
|
|
|
$
|
825.0
|
|
|
$
|
2,259.3
|
|
|
$
|
485.4
|
|
|
$
|
4,804.9
|
|
As of December 31, 2018
|
|
1,032.1
|
|
|
736.1
|
|
|
1,905.8
|
|
|
501.1
|
|
|
4,175.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Segment income from operations
|
$
|
153.2
|
|
|
$
|
113.9
|
|
Corporate expenses
|
(31.8
|
)
|
|
(33.4
|
)
|
||
Stock compensation expense
|
(12.0
|
)
|
|
(8.4
|
)
|
||
Restructuring expenses
|
(1.7
|
)
|
|
(5.9
|
)
|
||
Amortization of intangibles
|
(15.3
|
)
|
|
(15.7
|
)
|
||
Consolidated income from operations
|
$
|
92.4
|
|
|
$
|
50.5
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Segment assets
|
$
|
4,804.9
|
|
|
$
|
4,175.1
|
|
Cash and cash equivalents
|
292.8
|
|
|
326.1
|
|
||
Investments in affiliates
|
393.2
|
|
|
400.0
|
|
||
Deferred tax assets, other current and noncurrent assets
|
672.5
|
|
|
656.6
|
|
||
Intangible assets, net
|
555.3
|
|
|
573.1
|
|
||
Goodwill
|
1,485.6
|
|
|
1,495.5
|
|
||
Consolidated total assets
|
$
|
8,204.3
|
|
|
$
|
7,626.4
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
76.8
|
|
|
$
|
82.6
|
|
Advance consideration received
|
25.4
|
|
|
34.5
|
|
||
Revenue recognized during the period for extended warranty contracts, maintenance services and technology services
|
(6.1
|
)
|
|
(6.4
|
)
|
||
Revenue recognized during the period related to installation of grain storage and protein production systems
|
(11.4
|
)
|
|
(14.9
|
)
|
||
Foreign currency translation
|
(0.2
|
)
|
|
1.1
|
|
||
Balance at March 31
|
$
|
84.5
|
|
|
$
|
96.9
|
|
|
|
North America(1)
|
|
South America(1)
|
|
Europe/Middle East(1)
|
|
Asia/Pacific/Africa(1)
|
|
Consolidated(1)
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
412.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
412.6
|
|
Canada
|
|
61.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61.2
|
|
|||||
South America
|
|
—
|
|
|
152.9
|
|
|
—
|
|
|
—
|
|
|
152.9
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
270.3
|
|
|
—
|
|
|
270.3
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
238.1
|
|
|
—
|
|
|
238.1
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
154.3
|
|
|
—
|
|
|
154.3
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
169.6
|
|
|
—
|
|
|
169.6
|
|
|||||
Other Europe
|
|
—
|
|
|
|
|
364.2
|
|
|
—
|
|
|
364.2
|
|
||||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
14.1
|
|
|
—
|
|
|
14.1
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.3
|
|
|
20.3
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59.2
|
|
|
59.2
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.4
|
|
|
53.4
|
|
|||||
Mexico, Central America and Caribbean
|
|
22.4
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
25.7
|
|
|||||
|
|
$
|
496.2
|
|
|
$
|
156.1
|
|
|
$
|
1,210.6
|
|
|
$
|
132.9
|
|
|
$
|
1,995.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
140.2
|
|
|
$
|
84.3
|
|
|
$
|
829.7
|
|
|
$
|
65.0
|
|
|
$
|
1,119.2
|
|
Replacement parts
|
|
61.5
|
|
|
21.9
|
|
|
201.9
|
|
|
16.7
|
|
|
302.0
|
|
|||||
Grain storage and protein production systems
|
|
103.8
|
|
|
19.7
|
|
|
42.5
|
|
|
37.1
|
|
|
203.1
|
|
|||||
Combines, application equipment and other machinery
|
|
190.8
|
|
|
30.2
|
|
|
136.4
|
|
|
14.0
|
|
|
371.4
|
|
|||||
|
|
$
|
496.2
|
|
|
$
|
156.1
|
|
|
$
|
1,210.6
|
|
|
$
|
132.9
|
|
|
$
|
1,995.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
South America
|
|
Europe/Middle East
|
|
Asia/Pacific/Africa
|
|
Consolidated
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
399.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
399.1
|
|
Canada
|
|
73.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73.6
|
|
|||||
South America
|
|
—
|
|
|
179.2
|
|
|
—
|
|
|
—
|
|
|
179.2
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
287.9
|
|
|
—
|
|
|
287.9
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
196.6
|
|
|
—
|
|
|
196.6
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
140.3
|
|
|
—
|
|
|
140.3
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
177.1
|
|
|
—
|
|
|
177.1
|
|
|||||
Other Europe
|
|
—
|
|
|
—
|
|
|
334.8
|
|
|
—
|
|
|
334.8
|
|
|||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
27.0
|
|
|
—
|
|
|
27.0
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.2
|
|
|
22.2
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74.6
|
|
|
74.6
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62.0
|
|
|
62.0
|
|
|||||
Mexico, Central America and Caribbean
|
|
30.2
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
33.1
|
|
|||||
|
|
$
|
502.9
|
|
|
$
|
182.1
|
|
|
$
|
1,163.7
|
|
|
$
|
158.8
|
|
|
$
|
2,007.5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
154.6
|
|
|
$
|
106.8
|
|
|
$
|
778.4
|
|
|
$
|
73.5
|
|
|
$
|
1,113.3
|
|
Replacement parts
|
|
60.8
|
|
|
21.7
|
|
|
210.5
|
|
|
19.7
|
|
|
312.7
|
|
|||||
Grain storage and protein production systems
|
|
110.4
|
|
|
17.2
|
|
|
34.4
|
|
|
44.2
|
|
|
206.2
|
|
|||||
Combines, application equipment and other machinery
|
|
177.1
|
|
|
36.4
|
|
|
140.4
|
|
|
21.4
|
|
|
375.3
|
|
|||||
|
|
$
|
502.9
|
|
|
$
|
182.1
|
|
|
$
|
1,163.7
|
|
|
$
|
158.8
|
|
|
$
|
2,007.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Lease Assets
|
|
Classification
|
|
As of March 31, 2019
|
||
Operating ROU assets
|
|
Right-of-use lease assets
|
|
$
|
193.8
|
|
Finance lease assets
|
|
Property, plant and equipment, net(1)
|
|
15.9
|
|
|
Total leased assets
|
|
|
|
$
|
209.7
|
|
|
|
|
|
|
||
Lease Liabilities
|
|
Classification
|
|
As of March 31, 2019
|
||
Current:
|
|
|
|
|
||
Operating
|
|
Accrued expenses
|
|
$
|
45.4
|
|
Finance
|
|
Other current liabilities
|
|
4.1
|
|
|
|
|
|
|
|
||
Noncurrent:
|
|
|
|
|
||
Operating
|
|
Operating lease liabilities
|
|
150.8
|
|
|
Finance
|
|
Other noncurrent liabilities
|
|
10.0
|
|
|
Total leased liabilities
|
|
|
|
$
|
210.3
|
|
|
|
Classification
|
|
Three Months Ended March 31, 2019
|
||
Operating lease cost
|
|
Selling, general and administrative expenses
|
|
$
|
14.3
|
|
Variable lease cost
|
|
Selling, general and administrative expenses
|
|
0.1
|
|
|
Short-term lease cost
|
|
Selling, general and administrative expenses
|
|
2.2
|
|
|
Finance lease cost:
|
|
|
|
|
||
Amortization of leased assets
|
|
Depreciation expense(1)
|
|
1.3
|
|
|
Interest on leased liabilities
|
|
Interest expense, net
|
|
0.1
|
|
|
Total lease cost
|
|
|
|
$
|
18.0
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Operating Leases(1)(2)
|
|
Finance Leases
|
|
Operating Leases(5)
|
|
Finance Leases(5)
|
||||||||
2019
|
|
$
|
36.0
|
|
|
$
|
3.6
|
|
|
$
|
46.7
|
|
|
$
|
4.9
|
|
2020
|
|
41.5
|
|
|
3.4
|
|
|
39.5
|
|
|
3.5
|
|
||||
2021
|
|
34.2
|
|
|
2.8
|
|
|
32.6
|
|
|
2.8
|
|
||||
2022
|
|
26.1
|
|
|
0.9
|
|
|
26.0
|
|
|
0.9
|
|
||||
2023
|
|
20.6
|
|
|
0.7
|
|
|
21.7
|
|
|
0.7
|
|
||||
Thereafter
|
|
80.2
|
|
|
6.1
|
|
|
85.5
|
|
|
6.3
|
|
||||
Total lease payments
|
|
238.6
|
|
|
17.5
|
|
|
252.0
|
|
|
19.1
|
|
||||
Less: imputed interest(3)(4)
|
|
(42.4
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
(3.6
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Present value of leased liabilities
|
|
$
|
196.2
|
|
|
$
|
14.1
|
|
|
$
|
252.0
|
|
|
$
|
15.5
|
|
|
|
As of March 31, 2019
|
|
Weighted-average remaining lease term:
|
|
|
|
Operating leases
|
|
8.0 years
|
|
Finance leases
|
|
2.0 years
|
|
|
|
|
|
Weighted-average discount rate:
|
|
|
|
Operating leases
|
|
4.1
|
%
|
Finance leases
|
|
4.2
|
%
|
|
|
Three months ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
14.3
|
|
Operating cash flows from finance leases
|
|
0.1
|
|
|
Financing cash flows from finance leases
|
|
1.3
|
|
|
|
|
|
||
Leased assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
14.0
|
|
Finance leases
|
|
0.2
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended March 31,
|
|
Change
|
|
Change Due to Currency Translation
|
||||||||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
North America
|
$
|
496.2
|
|
|
$
|
502.9
|
|
|
$
|
(6.7
|
)
|
|
(1.3
|
)%
|
|
$
|
(3.8
|
)
|
|
(0.8
|
)%
|
South America
|
156.1
|
|
|
182.1
|
|
|
(26.0
|
)
|
|
(14.3
|
)%
|
|
(21.2
|
)
|
|
(11.6
|
)%
|
||||
Europe/Middle East
|
1,210.6
|
|
|
1,163.7
|
|
|
46.9
|
|
|
4.0
|
%
|
|
(106.3
|
)
|
|
(9.1
|
)%
|
||||
Asia/Pacific/Africa
|
132.9
|
|
|
158.8
|
|
|
(25.9
|
)
|
|
(16.3
|
)%
|
|
(10.6
|
)
|
|
(6.7
|
)%
|
||||
|
$
|
1,995.8
|
|
|
$
|
2,007.5
|
|
|
$
|
(11.7
|
)
|
|
(0.6
|
)%
|
|
$
|
(141.9
|
)
|
|
(7.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
% of
Net Sales(1)
|
|
$
|
|
% of
Net Sales
|
||||||
Gross profit
|
|
$
|
456.7
|
|
|
22.9
|
%
|
|
$
|
428.0
|
|
|
21.3
|
%
|
Selling, general and administrative expenses
|
|
262.2
|
|
|
13.1
|
%
|
|
264.6
|
|
|
13.2
|
%
|
||
Engineering expenses
|
|
84.5
|
|
|
4.2
|
%
|
|
90.9
|
|
|
4.5
|
%
|
||
Restructuring expenses
|
|
1.7
|
|
|
0.1
|
%
|
|
5.9
|
|
|
0.3
|
%
|
||
Amortization of intangibles
|
|
15.3
|
|
|
0.8
|
%
|
|
15.7
|
|
|
0.8
|
%
|
||
Bad debt expense
|
|
0.6
|
|
|
—
|
%
|
|
0.4
|
|
|
—
|
%
|
||
Income from operations
|
|
$
|
92.4
|
|
|
4.6
|
%
|
|
$
|
50.5
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
(1)
|
Rounding may impact summation of amounts.
|
|
March 31, 2019
|
||
1.056% Senior term loan due 2020
|
$
|
224.7
|
|
Senior term loan due 2022
|
168.5
|
|
|
Credit facility, expires 2023
|
207.9
|
|
|
1.002% Senior term loan due 2025
|
280.9
|
|
|
Senior term loans due between 2019 and 2028
|
801.1
|
|
|
Other long-term debt
|
17.1
|
|
|
Debt issuance costs
|
(2.8
|
)
|
|
|
$
|
1,697.4
|
|
•
|
general economic and capital market conditions;
|
•
|
availability of credit to our retail customers;
|
•
|
the worldwide demand for agricultural products;
|
•
|
grain stock levels and the levels of new and used field inventories;
|
•
|
government policies and subsidies;
|
•
|
uncertainty regarding changes in the international tariff regimes and their impact on the cost of the products that we sell;
|
•
|
weather conditions;
|
•
|
interest and foreign currency exchange rates;
|
•
|
pricing and product actions taken by competitors;
|
•
|
commodity prices, acreage planted and crop yields;
|
•
|
farm income, land values, debt levels and access to credit;
|
•
|
pervasive livestock diseases;
|
•
|
production disruptions;
|
•
|
production levels and capacity constraints at our facilities, including those resulting from plant expansions and systems upgrades;
|
•
|
integration of recent and future acquisitions;
|
•
|
our expansion plans in emerging markets;
|
•
|
supply constraints;
|
•
|
our cost reduction and control initiatives;
|
•
|
our research and development efforts;
|
•
|
dealer and distributor actions;
|
•
|
regulations affecting privacy and data protection;
|
•
|
technological difficulties; and
|
•
|
political and economic uncertainty in various areas of the world.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)(1)
|
||||||
January 1, 2019 through
January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
147.1
|
|
February 1, 2019 through
February 28, 2019(2)
|
|
379,927
|
|
|
$
|
63.17
|
|
|
379,927
|
|
|
$
|
117.1
|
|
March 1, 2019 through
March 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
117.1
|
|
Total
|
|
379,927
|
|
|
$
|
63.17
|
|
|
379,927
|
|
|
$
|
117.1
|
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description of Exhibit
|
|
The filings referenced for
incorporation by reference are
AGCO Corporation
|
|
|
|
|
|
|
|
April 26, 2019, Form 8-K, Exhibit 3.1
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
||
|
|
Filed herewith
|
||
|
|
|
||
|
|
Furnished herewith
|
||
|
|
|
||
|
XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL Tags are embedded within the Inline XBRL Document
|
|
Filed herewith
|
|
|
|
|
||
|
|
Filed herewith
|
||
|
|
|
||
|
|
Filed herewith
|
||
|
|
|
||
|
|
Filed herewith
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
||
|
|
Filed herewith
|
|
|
|
|
Date:
|
May 9, 2019
|
|
AGCO CORPORATION
Registrant
/s/ Andrew H. Beck
|
|
|
|
Andrew H. Beck
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Lara T. Long
|
|
|
|
Lara T. Long
Vice President, Chief Accounting Officer
(Principal Accounting Officer)
|
1.
|
OWNERSHIP OF AGCO SHARES
|
a)
|
At December 31, 2018, AGCO had outstanding 76,536,755 shares of common stock (the “Reference AGCO Common Stock Amount”). TAFE and TAFE Motors and Tractors Limited collectively beneficially own (as such term is defined under the Securities Exchange Act of 1934, as amended) approximately 12,150,152 shares of AGCO common stock, not including shares of AGCO common stock owned by Mallika Srinivasan for service as a director.
|
b)
|
TAFE agrees not to purchase or acquire beneficial ownership of, and to cause the TAFE Parties, not to purchase or acquire beneficial ownership of, additional shares of AGCO common stock if as a result of such purchase TAFE and the TAFE Parties collectively would own 12,150,153 or more shares of AGCO common stock (the “TAFE Cap”) provided that TAFE may close on the purchase of all of AGCO’s common stock on an offer permitted under Section 1(d), (e) or (f). If AGCO issues more shares of common stock for any purpose, including Acquisition Related Shares, the TAFE Cap will be increased by 15.9% of the amount of the shares issued. “Acquisition Related Shares” are shares of AGCO common stock issued either as consideration in an acquisition or as part of a Board-approved plan to finance an acquisition. If AGCO issues Acquisition Related Shares and repurchases shares of its common stock within a year of such issuance (and/or enters into an accelerated share repurchase agreement to repurchase shares within 3 months of the issuance and repurchases shares under such plan within a year of its adoption or such shorter period described by the last sentence of this clause) , and only in such case, will the TAFE Cap be reduced by the lesser of (i) the number of shares repurchased with in such year (or within a year of the adoption of such accelerated share repurchase agreement) and (ii) the number of Acquisition Related Shares issued within such year. In no event will the TAFE Cap at any time be less than the greater of (x) initial TAFE Cap and (y) 15.9% of the then outstanding shares of AGCO common stock. In the event that during the final month of the 3 month period referred to above, AGCO reasonably concludes that it is in possession of material, non-public information that prevents it from entering into an accelerated share repurchase agreement, such 3 month period shall be increased, but not beyond 6 months, until AGCO reasonably concludes it is able to enter into such agreement and, in such circumstance, the accelerated share repurchase plan shall not extend beyond 15 months after the issuance of the Acquisition Related Shares. TAFE further agrees not to (i) subject to its rights under Section 1(e), form or act as part of a group with respect to the ownership or voting of AGCO common stock or
|
c)
|
For the avoidance of doubt, TAFE’s ownership shall include any other right or instrument that is convertible into or exercisable for shares of AGCO common stock or that otherwise provides TAFE or any TAFE Party with any economic incidence of ownership; provided that, for such purposes, shares of AGCO common stock beneficially owned by Mallika Srinivasan for service as a director shall not be included.
|
d)
|
TAFE shall be permitted at any time to make a non-public offer to the AGCO Chairman and Board of Directors to acquire all or a part of AGCO or propose another similar strategic transaction that would result in a change of control of AGCO. TAFE shall also be permitted to include in such offer providers of debt and equity financing as long as (i) no equity provider owns during the time of the offer beneficial ownership of more than 5% of AGCO common stock (it being understood that such equity holder may hold more than 5% on completion of the offer), (ii)TAFE takes appropriate precautions to require providers of debt and equity to maintain confidentiality and does not share with them information known to TAFE only by virtue TAFE’s nominated member of the AGCO Board of Directors and (iii) no equity provider is a competitor or activist hedge fund or acting in that capacity. Any equity provider included in the offer from TAFE shall enter into a confidentiality and other agreements consistent with agreements required by AGCO of other potential bidders for AGCO prior to such equity provider having access to AGCO confidential information and AGCO will modify any such agreement to be consistent with any subsequently entered agreement if more favorable to the bidder than the agreements required of the equity providers. No equity provider who is a professional institutional investor (including sovereign wealth funds) and has not signed a standstill agreement for the prior three years shall be required to sign a standstill agreement.
|
e)
|
AGCO will promptly inform TAFE of (x) any offer to acquire all or substantially all of AGCO, or other similar strategic transaction that would result in a change of control of AGCO, submitted to the AGCO Board of Directors for formal consideration or for which the Board has requested management to evaluate before consideration, and (y) any commencement of a review of strategic alternatives which includes a possible sale of all or substantially all of AGCO, and permit TAFE the opportunity to make a private offer to acquire all or substantially all of AGCO, or other similar strategic transaction that would result in a change of control of AGCO, subject to the right of AGCO’s Board of Directors to control any process for all potential acquirers to the extent it is advised it is required to do so to comply with its fiduciary duties. In the event that the AGCO Board of Directors decides to sell the global businesses of Massey Ferguson and/ or Fendt, or receives an offer to acquire the global business of Massey Ferguson and/or Fendt submitted to the AGCO Board of Directors for formal consideration or for which the Board has requested management to evaluate before consideration, TAFE shall be afforded an opportunity to make an offer to purchase the global businesses of Massey Ferguson and/ or Fendt.
|
f)
|
The restrictions on TAFE and the TAFE Parties in Section 1 and Section 2 shall be released and of no further effect upon the first to occur of the following: (i) AGCO publicly announces a process to review strategic alternatives which includes a possible sale of all or substantially all of AGCO, (ii) any person commences a public tender offer by filing a Schedule TO (or any successor form) to acquire AGCO and such public tender offer represents a bona fide intent to acquire AGCO which is not subject to a financing condition, (iii) any person publicly announces
|
2.
|
VOTING OF AGCO SHARES
|
3.
|
DISPOSAL OF AGCO SHARES
|
a)
|
TAFE shall not dispose of shares of AGCO common stock to a direct competitor or an activist hedge fund. If TAFE elects to dispose of any AGCO common stock (other than to a TAFE Party), it will dispose of it in a public distribution or in a private sale, but in the case of a private sale not more than 5% to any person or “group” (as group is defined in the Securities Exchange Act of 1934, as amended).
|
b)
|
Should TAFE determine to dispose of any shares of AGCO common stock in a public distribution, AGCO will provide customary assistance to TAFE in selling its shares, including filing a registration statement with the U.S. Securities and Exchange Commission, cooperating with underwriters, providing auditor comfort letters, participating in road shows and similar activities.
|
4.
|
BOARD MATTERS
|
a)
|
As long as the collective beneficial ownership of TAFE and the TAFE Parties of common stock of AGCO is 5% or more of the then outstanding common stock of AGCO, AGCO will nominate for election to the Board at each annual meeting a candidate proposed by TAFE. If the candidate is not the Chairman or CEO of TAFE, then the Board shall have reasonable rights of approval over the individual.
|
b)
|
If the collective beneficial ownership of TAFE and the TAFE Parties of common stock of AGCO falls below 5% of the then outstanding common stock of AGCO (other than as a result of a sale of AGCO common stock by TAFE or a TAFE Party), AGCO will continue to nominate the TAFE candidate as described in Section 4(a) as long as TAFE’s ownership returns to 5% or more by the first anniversary of the date it fell below 5%.
|
5.
|
OTHER
|
a)
|
This Amended and Restated Letter Agreement will expire on the fifth anniversary of its signing.
|
b)
|
AGCO shall have the right to adopt a Stockholders’ Right Plan provided it does not prohibit TAFE from stock ownership up to the TAFE Cap.
|
c)
|
Given that AGCO is incorporated in, and governed by the laws of, the State of Delaware, USA, this Amended and Restated Letter Agreement shall be governed by the laws of the State of Delaware, USA.
|
d)
|
This Amended and Restated Letter Agreement replaces the Letter Agreement between AGCO and TAFE dated 29 August 2014, which former Letter Agreement shall be of no further force or effect.
|
TRACTORS AND FARM EQUIPMENT LIMITED
|
|
AGCO CORPORATION
|
||
By:
|
/s/ Mallika Srinivasan
|
|
By:
|
/s/ Martin Richenhagen
|
Its:
|
Chairman
|
|
Its:
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
By:
|
|
|
|
|
Its:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
April 24th, 2019
|
|
|
|
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
May 9, 2019
|
|
|
|
|
|
|
/s/ Martin Richenhagen
|
|
|
Martin Richenhagen
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
May 9, 2019
|
|
|
|
|
|
|
/s/ Andrew H. Beck
|
|
|
Andrew H. Beck
|
|
|
Senior Vice President and Chief Financial Officer
|
|
/s/ Martin Richenhagen
|
|
|
Martin Richenhagen
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
|
May 9, 2019
|
|
|
|
|
|
/s/Andrew H. Beck
|
|
|
Andrew H. Beck
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
May 9, 2019
|
|