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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________ to _________
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Delaware
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58-1960019
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4205 River Green Parkway
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30096
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Duluth,
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Georgia
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(Address of principal executive offices)
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(Zip Code)
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☒
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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Securities registered pursuant to Section 12(b) of the Act
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|||
Title of Class
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Trading Symbol
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Name of exchange on which registered
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Common stock
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AGCO
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New York Stock Exchange
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(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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Item 4.
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Item 1.
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Item 2.
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Item 6.
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PART I.
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FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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June 30, 2019
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December 31, 2018
|
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
|
|
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Cash and cash equivalents
|
$
|
279.9
|
|
|
$
|
326.1
|
|
Accounts and notes receivable, net
|
1,010.7
|
|
|
880.3
|
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||
Inventories, net
|
2,424.8
|
|
|
1,908.7
|
|
||
Other current assets
|
446.2
|
|
|
422.3
|
|
||
Total current assets
|
4,161.6
|
|
|
3,537.4
|
|
||
Property, plant and equipment, net
|
1,377.8
|
|
|
1,373.1
|
|
||
Right-of-use lease assets
|
203.3
|
|
|
—
|
|
||
Investment in affiliates
|
404.7
|
|
|
400.0
|
|
||
Deferred tax assets
|
97.5
|
|
|
104.9
|
|
||
Other assets
|
134.6
|
|
|
142.4
|
|
||
Intangible assets, net
|
541.6
|
|
|
573.1
|
|
||
Goodwill
|
1,494.0
|
|
|
1,495.5
|
|
||
Total assets
|
$
|
8,415.1
|
|
|
$
|
7,626.4
|
|
|
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|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
70.2
|
|
|
$
|
72.6
|
|
Short-term borrowings
|
238.7
|
|
|
138.0
|
|
||
Senior term loan
|
227.7
|
|
|
—
|
|
||
Accounts payable
|
931.4
|
|
|
865.9
|
|
||
Accrued expenses
|
1,557.2
|
|
|
1,522.4
|
|
||
Other current liabilities
|
203.7
|
|
|
167.8
|
|
||
Total current liabilities
|
3,228.9
|
|
|
2,766.7
|
|
||
Long-term debt, less current portion and debt issuance costs
|
1,308.1
|
|
|
1,275.3
|
|
||
Operating lease liabilities
|
163.3
|
|
|
—
|
|
||
Pensions and postretirement health care benefits
|
212.0
|
|
|
223.2
|
|
||
Deferred tax liabilities
|
107.8
|
|
|
116.3
|
|
||
Other noncurrent liabilities
|
266.3
|
|
|
251.4
|
|
||
Total liabilities
|
5,286.4
|
|
|
4,632.9
|
|
||
Commitments and contingencies (Note 17)
|
|
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|
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Stockholders’ Equity:
|
|
|
|
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|
||
AGCO Corporation stockholders’ equity:
|
|
|
|
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|
||
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, 76,313,655 and 76,536,755 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
0.8
|
|
|
0.8
|
|
||
Additional paid-in capital
|
7.1
|
|
|
10.2
|
|
||
Retained earnings
|
4,591.1
|
|
|
4,477.3
|
|
||
Accumulated other comprehensive loss
|
(1,534.3
|
)
|
|
(1,555.4
|
)
|
||
Total AGCO Corporation stockholders’ equity
|
3,064.7
|
|
|
2,932.9
|
|
||
Noncontrolling interests
|
64.0
|
|
|
60.6
|
|
||
Total stockholders’ equity
|
3,128.7
|
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|
2,993.5
|
|
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Total liabilities and stockholders’ equity
|
$
|
8,415.1
|
|
|
$
|
7,626.4
|
|
|
Three Months Ended June 30,
|
||||||
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2019
|
|
2018
|
||||
Net sales
|
$
|
2,422.6
|
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|
$
|
2,537.6
|
|
Cost of goods sold
|
1,858.7
|
|
|
1,981.3
|
|
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Gross profit
|
563.9
|
|
|
556.3
|
|
||
Selling, general and administrative expenses
|
260.7
|
|
|
271.8
|
|
||
Operating expenses:
|
|
|
|
||||
Engineering expenses
|
87.5
|
|
|
93.0
|
|
||
Restructuring expenses
|
—
|
|
|
2.7
|
|
||
Amortization of intangibles
|
15.4
|
|
|
18.2
|
|
||
Bad debt expense
|
0.7
|
|
|
2.5
|
|
||
Income from operations
|
199.6
|
|
|
168.1
|
|
||
Interest expense, net
|
6.0
|
|
|
21.2
|
|
||
Other expense, net
|
11.6
|
|
|
27.2
|
|
||
Income before income taxes and equity in net earnings of affiliates
|
182.0
|
|
|
119.7
|
|
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Income tax provision
|
53.2
|
|
|
38.5
|
|
||
Income before equity in net earnings of affiliates
|
128.8
|
|
|
81.2
|
|
||
Equity in net earnings of affiliates
|
11.6
|
|
|
9.2
|
|
||
Net income
|
140.4
|
|
|
90.4
|
|
||
Net loss attributable to noncontrolling interests
|
0.4
|
|
|
1.0
|
|
||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
140.8
|
|
|
$
|
91.4
|
|
Net income per common share attributable to AGCO Corporation and subsidiaries:
|
|
|
|
|
|
||
Basic
|
$
|
1.84
|
|
|
$
|
1.15
|
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Diluted
|
$
|
1.82
|
|
|
$
|
1.14
|
|
Cash dividends declared and paid per common share
|
$
|
0.16
|
|
|
$
|
0.15
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||
Basic
|
76.6
|
|
|
79.3
|
|
||
Diluted
|
77.2
|
|
|
80.2
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
4,418.4
|
|
|
$
|
4,545.1
|
|
Cost of goods sold
|
3,397.8
|
|
|
3,560.8
|
|
||
Gross profit
|
1,020.6
|
|
|
984.3
|
|
||
Selling, general and administrative expenses
|
522.9
|
|
|
536.4
|
|
||
Operating expenses:
|
|
|
|
||||
Engineering expenses
|
172.0
|
|
|
183.9
|
|
||
Restructuring expenses
|
1.7
|
|
|
8.6
|
|
||
Amortization of intangibles
|
30.7
|
|
|
33.9
|
|
||
Bad debt expense
|
1.3
|
|
|
2.9
|
|
||
Income from operations
|
292.0
|
|
|
218.6
|
|
||
Interest expense, net
|
9.5
|
|
|
31.5
|
|
||
Other expense, net
|
26.2
|
|
|
38.7
|
|
||
Income before income taxes and equity in net earnings of affiliates
|
256.3
|
|
|
148.4
|
|
||
Income tax provision
|
72.6
|
|
|
49.9
|
|
||
Income before equity in net earnings of affiliates
|
183.7
|
|
|
98.5
|
|
||
Equity in net earnings of affiliates
|
22.4
|
|
|
16.9
|
|
||
Net income
|
206.1
|
|
|
115.4
|
|
||
Net (income) loss attributable to noncontrolling interests
|
(0.2
|
)
|
|
0.3
|
|
||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
205.9
|
|
|
$
|
115.7
|
|
Net income per common share attributable to AGCO Corporation and subsidiaries:
|
|
|
|
|
|
||
Basic
|
$
|
2.69
|
|
|
$
|
1.46
|
|
Diluted
|
$
|
2.66
|
|
|
$
|
1.44
|
|
Cash dividends declared and paid per common share
|
$
|
0.31
|
|
|
$
|
0.30
|
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||
Basic
|
76.6
|
|
|
79.4
|
|
||
Diluted
|
77.3
|
|
|
80.3
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
140.4
|
|
|
$
|
90.4
|
|
Other comprehensive income (loss), net of reclassification adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
4.4
|
|
|
(190.4
|
)
|
||
Defined benefit pension plans, net of tax
|
3.0
|
|
|
3.0
|
|
||
Deferred gains and losses on derivatives, net of tax
|
4.8
|
|
|
1.5
|
|
||
Other comprehensive income (loss), net of reclassification adjustments
|
12.2
|
|
|
(185.9
|
)
|
||
Comprehensive income (loss)
|
152.6
|
|
|
(95.5
|
)
|
||
Comprehensive (income) loss attributable to noncontrolling interests
|
(0.3
|
)
|
|
3.2
|
|
||
Comprehensive income (loss) attributable to AGCO Corporation and subsidiaries
|
$
|
152.3
|
|
|
$
|
(92.3
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
206.1
|
|
|
$
|
115.4
|
|
Other comprehensive income (loss), net of reclassification adjustments:
|
|
|
|
||||
Foreign currency translation adjustments
|
16.6
|
|
|
(180.7
|
)
|
||
Defined benefit pension plans, net of tax
|
6.0
|
|
|
6.1
|
|
||
Deferred gains and losses on derivatives, net of tax
|
0.7
|
|
|
0.6
|
|
||
Other comprehensive income (loss), net of reclassification adjustments
|
23.3
|
|
|
(174.0
|
)
|
||
Comprehensive income (loss)
|
229.4
|
|
|
(58.6
|
)
|
||
Comprehensive (income) loss attributable to noncontrolling interests
|
(2.4
|
)
|
|
2.4
|
|
||
Comprehensive income (loss) attributable to AGCO Corporation and subsidiaries
|
$
|
227.0
|
|
|
$
|
(56.2
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
206.1
|
|
|
$
|
115.4
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation
|
107.1
|
|
|
115.1
|
|
||
Amortization of intangibles
|
30.7
|
|
|
33.9
|
|
||
Stock compensation expense
|
24.8
|
|
|
22.5
|
|
||
Equity in net earnings of affiliates, net of cash received
|
(16.8
|
)
|
|
(13.4
|
)
|
||
Deferred income tax benefit
|
13.2
|
|
|
(14.3
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
15.7
|
|
||
Other
|
3.0
|
|
|
1.3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts and notes receivable, net
|
(143.5
|
)
|
|
(83.0
|
)
|
||
Inventories, net
|
(513.7
|
)
|
|
(396.3
|
)
|
||
Other current and noncurrent assets
|
(18.2
|
)
|
|
(47.3
|
)
|
||
Accounts payable
|
83.1
|
|
|
7.9
|
|
||
Accrued expenses
|
1.6
|
|
|
6.7
|
|
||
Other current and noncurrent liabilities
|
9.7
|
|
|
47.2
|
|
||
Total adjustments
|
(419.0
|
)
|
|
(304.0
|
)
|
||
Net cash used in operating activities
|
(212.9
|
)
|
|
(188.6
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(114.9
|
)
|
|
(89.8
|
)
|
||
Proceeds from sale of property, plant and equipment
|
0.1
|
|
|
2.3
|
|
||
Investments in unconsolidated affiliates
|
—
|
|
|
(5.8
|
)
|
||
Other
|
—
|
|
|
0.4
|
|
||
Net cash used in investing activities
|
(114.8
|
)
|
|
(92.9
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from indebtedness
|
1,621.5
|
|
|
2,555.7
|
|
||
Repayments of indebtedness
|
(1,219.0
|
)
|
|
(2,289.3
|
)
|
||
Purchases and retirement of common stock
|
(70.0
|
)
|
|
(34.3
|
)
|
||
Payment of dividends to stockholders
|
(23.7
|
)
|
|
(23.8
|
)
|
||
Payment of minimum tax withholdings on stock compensation
|
(26.7
|
)
|
|
(3.5
|
)
|
||
Payment of debt issuance costs
|
(0.5
|
)
|
|
—
|
|
||
Investment by noncontrolling interests
|
1.0
|
|
|
—
|
|
||
Net cash provided by financing activities
|
282.6
|
|
|
204.8
|
|
||
Effects of exchange rate changes on cash and cash equivalents
|
(1.1
|
)
|
|
(10.4
|
)
|
||
Decrease in cash and cash equivalents
|
(46.2
|
)
|
|
(87.1
|
)
|
||
Cash and cash equivalents, beginning of period
|
326.1
|
|
|
367.7
|
|
||
Cash and cash equivalents, end of period
|
$
|
279.9
|
|
|
$
|
280.6
|
|
|
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
|
|
Second quarter 2019 provision
|
—
|
|
|
—
|
|
|
—
|
|
|||
Second quarter 2019 cash activity
|
—
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of June 30, 2019
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of goods sold
|
|
$
|
0.5
|
|
|
$
|
1.1
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
Selling, general and administrative expenses
|
|
12.2
|
|
|
12.5
|
|
|
24.2
|
|
|
20.9
|
|
||||
Total stock compensation expense
|
|
$
|
12.7
|
|
|
$
|
13.6
|
|
|
$
|
25.2
|
|
|
$
|
22.8
|
|
Shares awarded but not earned at January 1
|
938,862
|
|
Shares awarded
|
542,180
|
|
Shares forfeited
|
(43,076
|
)
|
Shares earned
|
(11,200
|
)
|
Shares awarded but not earned at June 30
|
1,426,766
|
|
RSUs awarded but not vested at January 1
|
352,975
|
|
RSUs awarded
|
165,160
|
|
RSUs forfeited
|
(7,338
|
)
|
RSUs vested
|
(111,419
|
)
|
RSUs awarded but not vested at June 30
|
399,378
|
|
SSARs outstanding at January 1
|
1,099,592
|
|
SSARs granted
|
243,600
|
|
SSARs exercised
|
(359,977
|
)
|
SSARs canceled or forfeited
|
(21,077
|
)
|
SSARs outstanding at June 30
|
962,138
|
|
|
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
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||||
Balance as of June 30, 2019
|
$
|
203.1
|
|
|
$
|
586.1
|
|
|
$
|
155.4
|
|
|
$
|
8.6
|
|
|
$
|
953.2
|
|
|
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
|
5.7
|
|
|
20.0
|
|
|
4.9
|
|
|
0.1
|
|
|
30.7
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Balance as of June 30, 2019
|
$
|
79.1
|
|
|
$
|
330.8
|
|
|
$
|
85.4
|
|
|
$
|
3.1
|
|
|
$
|
498.4
|
|
|
Trademarks and
Tradenames
|
||
Indefinite-lived intangible assets:
|
|
||
Balance as of December 31, 2018
|
$
|
86.9
|
|
Foreign currency translation
|
(0.1
|
)
|
|
Balance as of June 30, 2019
|
$
|
86.8
|
|
|
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
|
—
|
|
|
1.4
|
|
|
(2.7
|
)
|
|
(0.2
|
)
|
|
(1.5
|
)
|
|||||
Balance as of June 30, 2019
|
$
|
611.1
|
|
|
$
|
118.1
|
|
|
$
|
646.9
|
|
|
$
|
117.9
|
|
|
$
|
1,494.0
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
1.056% Senior term loan due 2020
|
$
|
227.7
|
|
|
$
|
228.7
|
|
Senior term loan due 2022
|
170.7
|
|
|
171.5
|
|
||
Credit facility, expires 2023
|
96.8
|
|
|
114.4
|
|
||
1.002% Senior term loan due 2025
|
284.6
|
|
|
—
|
|
||
Senior term loans due between 2019 and 2028
|
811.6
|
|
|
815.3
|
|
||
Other long-term debt
|
17.3
|
|
|
20.6
|
|
||
Debt issuance costs
|
(2.7
|
)
|
|
(2.6
|
)
|
||
|
1,606.0
|
|
|
1,347.9
|
|
||
Less: 1.056% Senior term loan due 2020
|
(227.7
|
)
|
|
—
|
|
||
Senior term loans due 2019
|
(63.7
|
)
|
|
(63.8
|
)
|
||
Current portion of other long-term debt
|
(6.5
|
)
|
|
(8.8
|
)
|
||
Total long-term indebtedness, less current portion
|
$
|
1,308.1
|
|
|
$
|
1,275.3
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
925.2
|
|
|
$
|
660.4
|
|
Repair and replacement parts
|
640.9
|
|
|
587.3
|
|
||
Work in process
|
311.4
|
|
|
217.5
|
|
||
Raw materials
|
547.3
|
|
|
443.5
|
|
||
Inventories, net
|
$
|
2,424.8
|
|
|
$
|
1,908.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Balance at beginning of period
|
$
|
361.3
|
|
|
$
|
325.8
|
|
|
$
|
360.9
|
|
|
$
|
316.0
|
|
Accruals for warranties issued during the period
|
48.0
|
|
|
50.2
|
|
|
99.1
|
|
|
108.7
|
|
||||
Settlements made (in cash or in kind) during the period
|
(40.2
|
)
|
|
(34.1
|
)
|
|
(87.6
|
)
|
|
(90.0
|
)
|
||||
Foreign currency translation
|
2.8
|
|
|
(17.1
|
)
|
|
(0.5
|
)
|
|
(9.9
|
)
|
||||
Balance at June 30
|
$
|
371.9
|
|
|
$
|
324.8
|
|
|
$
|
371.9
|
|
|
$
|
324.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic net income per share:
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
140.8
|
|
|
$
|
91.4
|
|
|
$
|
205.9
|
|
|
$
|
115.7
|
|
Weighted average number of common shares outstanding
|
76.6
|
|
|
79.3
|
|
|
76.6
|
|
|
79.4
|
|
||||
Basic net income per share attributable to AGCO Corporation and subsidiaries
|
$
|
1.84
|
|
|
$
|
1.15
|
|
|
$
|
2.69
|
|
|
$
|
1.46
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to AGCO Corporation and subsidiaries
|
$
|
140.8
|
|
|
$
|
91.4
|
|
|
$
|
205.9
|
|
|
$
|
115.7
|
|
Weighted average number of common shares outstanding
|
76.6
|
|
|
79.3
|
|
|
76.6
|
|
|
79.4
|
|
||||
Dilutive SSARs, performance share awards and RSUs
|
0.6
|
|
|
0.9
|
|
|
0.7
|
|
|
0.9
|
|
||||
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share
|
77.2
|
|
|
80.2
|
|
|
77.3
|
|
|
80.3
|
|
||||
Diluted net income per share attributable to AGCO Corporation and subsidiaries
|
$
|
1.82
|
|
|
$
|
1.14
|
|
|
$
|
2.66
|
|
|
$
|
1.44
|
|
|
|
|
Recognized in Net Income
|
|
|
||||||||
Three Months Ended June 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 Gains (Losses)
|
||||||
2019
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
4.3
|
|
|
Cost of goods sold
|
|
$
|
(0.5
|
)
|
|
$
|
1,858.7
|
|
2018
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
0.2
|
|
|
Cost of goods sold
|
|
$
|
(0.8
|
)
|
|
$
|
1,981.3
|
|
Interest rate swap contract
|
(0.2
|
)
|
|
Interest expense, net
|
|
(0.7
|
)
|
|
21.2
|
|
|||
Total
|
$
|
—
|
|
|
|
|
$
|
(1.5
|
)
|
|
|
|
|
|
Recognized in Net Income
|
|
|
||||||||
Six Months Ended June 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 Gains (Losses)
|
||||||
2019
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts(1)
|
$
|
(0.4
|
)
|
|
Cost of goods sold
|
|
$
|
(1.1
|
)
|
|
$
|
3,397.8
|
|
2018
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
(1.2
|
)
|
|
Cost of goods sold
|
|
$
|
(1.4
|
)
|
|
$
|
3,560.8
|
|
Interest rate swap contract
|
(0.9
|
)
|
|
Interest expense, net
|
|
(1.3
|
)
|
|
31.5
|
|
|||
Total
|
$
|
(2.1
|
)
|
|
|
|
$
|
(2.7
|
)
|
|
|
|
|
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
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Net losses reclassified from accumulated other comprehensive loss into income
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||
Accumulated derivative net gains as of June 30, 2019
|
|
$
|
2.3
|
|
|
$
|
0.2
|
|
|
$
|
2.1
|
|
|
Notional Amount as of
|
||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||
Cross currency swap contract
|
$
|
300.0
|
|
|
$
|
300.0
|
|
|
(Loss) Gain Recognized in Accumulated
Other Comprehensive Loss for the Three Months Ended
|
|
Gain Recognized in Accumulated
Other Comprehensive Loss for the Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Cross currency swap contract
|
$
|
(2.1
|
)
|
|
$
|
16.2
|
|
|
$
|
4.8
|
|
|
$
|
11.6
|
|
Foreign currency denominated debt
|
0.3
|
|
|
21.2
|
|
|
2.0
|
|
|
10.9
|
|
|
|
|
Loss Recognized in Net Income for the Three Months Ended
|
|
Gain Recognized in Net Income for the Six Months Ended
|
||||||||||||
|
Classification of Gain
|
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Foreign currency contracts
|
Other expense, net
|
|
$
|
(3.1
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
5.7
|
|
|
$
|
2.4
|
|
|
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, March 31, 2019
|
$
|
0.8
|
|
|
$
|
9.7
|
|
|
$
|
4,491.0
|
|
|
$
|
(1,545.8
|
)
|
|
$
|
63.3
|
|
|
$
|
3,019.0
|
|
Stock compensation
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
||||||
Issuance of stock awards
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||||
SSARs exercised
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
140.8
|
|
|
—
|
|
|
(0.4
|
)
|
|
140.4
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
0.7
|
|
|
4.4
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
||||||
Deferred gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
4.8
|
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
(11.6
|
)
|
|
(28.4
|
)
|
|
—
|
|
|
—
|
|
|
(40.0
|
)
|
||||||
Investment by noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
||||||
Balance, June 30, 2019
|
$
|
0.8
|
|
|
$
|
7.1
|
|
|
$
|
4,591.1
|
|
|
$
|
(1,534.3
|
)
|
|
$
|
64.0
|
|
|
$
|
3,128.7
|
|
|
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
|
—
|
|
|
24.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.8
|
|
||||||
Issuance of stock awards
|
—
|
|
|
(13.2
|
)
|
|
(9.7
|
)
|
|
—
|
|
|
—
|
|
|
(22.9
|
)
|
||||||
SSARs exercised
|
—
|
|
|
(3.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
—
|
|
|
—
|
|
|
205.9
|
|
|
—
|
|
|
0.2
|
|
|
206.1
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
14.4
|
|
|
2.2
|
|
|
16.6
|
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
||||||
Deferred gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(23.7
|
)
|
|
—
|
|
|
—
|
|
|
(23.7
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
(11.6
|
)
|
|
(58.4
|
)
|
|
—
|
|
|
—
|
|
|
(70.0
|
)
|
||||||
Investment by noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.0
|
|
||||||
Balance, June 30, 2019
|
$
|
0.8
|
|
|
$
|
7.1
|
|
|
$
|
4,591.1
|
|
|
$
|
(1,534.3
|
)
|
|
$
|
64.0
|
|
|
$
|
3,128.7
|
|
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total Stockholders’
Equity |
||||||||||||
Balance, March 31, 2018
|
$
|
0.8
|
|
|
$
|
135.3
|
|
|
$
|
4,266.6
|
|
|
$
|
(1,349.8
|
)
|
|
$
|
66.5
|
|
|
$
|
3,119.4
|
|
Stock compensation
|
—
|
|
|
13.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
||||||
Issuance of stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
SSARs exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
91.4
|
|
|
—
|
|
|
(1.0
|
)
|
|
90.4
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(188.2
|
)
|
|
(2.2
|
)
|
|
(190.4
|
)
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
||||||
Deferred gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
(27.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.2
|
)
|
||||||
Adjustment related to the adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance, June 30, 2018
|
$
|
0.8
|
|
|
$
|
121.4
|
|
|
$
|
4,346.1
|
|
|
$
|
(1,533.5
|
)
|
|
$
|
63.3
|
|
|
$
|
2,998.1
|
|
|
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
|
—
|
|
|
22.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
||||||
Issuance of stock awards
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||||
SSARs exercised
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
115.7
|
|
|
—
|
|
|
(0.3
|
)
|
|
115.4
|
|
||||||
Other comprehensive income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(178.6
|
)
|
|
(2.1
|
)
|
|
(180.7
|
)
|
||||||
Defined benefit pension plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
||||||
Deferred gains and losses on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||
Payment of dividends to stockholders
|
—
|
|
|
—
|
|
|
(23.8
|
)
|
|
—
|
|
|
—
|
|
|
(23.8
|
)
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
(34.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34.3
|
)
|
||||||
Adjustment related to the adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||||
Balance, June 30, 2018
|
$
|
0.8
|
|
|
$
|
121.4
|
|
|
$
|
4,346.1
|
|
|
$
|
(1,533.5
|
)
|
|
$
|
63.3
|
|
|
$
|
2,998.1
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net (loss) income
|
$
|
(0.4
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.3
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
0.7
|
|
|
(2.2
|
)
|
|
2.2
|
|
|
(2.1
|
)
|
||||
Total comprehensive income (loss)
|
$
|
0.3
|
|
|
$
|
(3.2
|
)
|
|
$
|
2.4
|
|
|
$
|
(2.4
|
)
|
|
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
|
—
|
|
|
(0.4
|
)
|
|
14.4
|
|
|
14.0
|
|
||||
Net losses reclassified from accumulated other comprehensive loss
|
6.0
|
|
|
1.1
|
|
|
—
|
|
|
7.1
|
|
||||
Other comprehensive income, net of reclassification adjustments
|
6.0
|
|
|
0.7
|
|
|
14.4
|
|
|
21.1
|
|
||||
Accumulated other comprehensive loss,
June 30, 2019
|
$
|
(276.4
|
)
|
|
$
|
2.1
|
|
|
$
|
(1,260.0
|
)
|
|
$
|
(1,534.3
|
)
|
|
|
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 June 30, 2019(1)
|
|
Three Months Ended June 30, 2018(1)
|
|
|||||
Derivatives:
|
|
|
|
|
|
|
||||
Net losses on foreign currency contracts
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
Cost of goods sold
|
Net losses on interest rate swap contract
|
|
—
|
|
|
0.7
|
|
|
Interest expense, net
|
||
Reclassification before tax
|
|
0.5
|
|
|
1.6
|
|
|
|
||
|
|
—
|
|
|
(0.1
|
)
|
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
0.5
|
|
|
$
|
1.5
|
|
|
|
|
|
|
|
|
|
|
||||
Defined benefit pension plans:
|
|
|
|
|
|
|
||||
Amortization of net actuarial losses
|
|
$
|
3.0
|
|
|
$
|
3.2
|
|
|
Other expense, net(2)
|
Amortization of prior service cost
|
|
0.5
|
|
|
0.3
|
|
|
Other expense, net(2)
|
||
Reclassification before tax
|
|
3.5
|
|
|
3.5
|
|
|
|
||
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
3.0
|
|
|
$
|
3.0
|
|
|
|
|
|
|
|
|
|
|
||||
Net losses reclassified from accumulated other comprehensive loss
|
|
$
|
3.5
|
|
|
$
|
4.5
|
|
|
|
|
|
Amount Reclassified from Accumulated Other Comprehensive Loss
|
|
Affected Line Item within the Condensed Consolidated
Statements of Operations |
||||||
Details about Accumulated Other Comprehensive Loss Components
|
|
Six Months Ended June 30, 2019(1)
|
|
Six Months Ended June 30, 2018(1)
|
|
|||||
Derivatives:
|
|
|
|
|
|
|
||||
Net losses on foreign currency contracts
|
|
$
|
1.1
|
|
|
$
|
1.5
|
|
|
Cost of goods sold
|
Net losses on interest rate swap contract
|
|
—
|
|
|
1.3
|
|
|
Interest expense, net
|
||
Reclassification before tax
|
|
1.1
|
|
|
2.8
|
|
|
|
||
|
|
—
|
|
|
(0.1
|
)
|
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
1.1
|
|
|
$
|
2.7
|
|
|
|
|
|
|
|
|
|
|
||||
Defined benefit pension plans:
|
|
|
|
|
|
|
||||
Amortization of net actuarial losses
|
|
$
|
6.1
|
|
|
$
|
6.3
|
|
|
Other expense, net(2)
|
Amortization of prior service cost
|
|
0.9
|
|
|
0.7
|
|
|
Other expense, net(2)
|
||
Reclassification before tax
|
|
7.0
|
|
|
7.0
|
|
|
|
||
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|
Income tax provision
|
||
Reclassification net of tax
|
|
$
|
6.0
|
|
|
$
|
6.1
|
|
|
|
|
|
|
|
|
|
|
||||
Net losses reclassified from accumulated other comprehensive loss
|
|
$
|
7.1
|
|
|
$
|
8.8
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||
Pension benefits
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
3.9
|
|
|
$
|
4.8
|
|
Interest cost
|
|
5.3
|
|
|
5.1
|
|
||
Expected return on plan assets
|
|
(7.1
|
)
|
|
(9.3
|
)
|
||
Amortization of net actuarial losses
|
|
3.0
|
|
|
3.1
|
|
||
Amortization of prior service cost
|
|
0.4
|
|
|
0.3
|
|
||
Net periodic pension cost
|
|
$
|
5.5
|
|
|
$
|
4.0
|
|
|
|
Three Months Ended June 30,
|
||||||
Postretirement benefits
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
|
0.3
|
|
|
0.3
|
|
||
Amortization of net actuarial losses
|
|
—
|
|
|
0.1
|
|
||
Amortization of prior service cost
|
|
0.1
|
|
|
—
|
|
||
Net periodic postretirement benefit cost
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
|
Six Months Ended June 30,
|
||||||
Pension benefits
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
7.8
|
|
|
$
|
9.7
|
|
Interest cost
|
|
10.6
|
|
|
10.2
|
|
||
Expected return on plan assets
|
|
(14.3
|
)
|
|
(18.7
|
)
|
||
Amortization of net actuarial losses
|
|
6.1
|
|
|
6.2
|
|
||
Amortization of prior service cost
|
|
0.8
|
|
|
0.6
|
|
||
Net periodic pension cost
|
|
$
|
11.0
|
|
|
$
|
8.0
|
|
|
|
Six Months Ended June 30,
|
||||||
Postretirement benefits
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
|
0.7
|
|
|
0.7
|
|
||
Amortization of net actuarial losses
|
|
—
|
|
|
0.1
|
|
||
Amortization of prior service cost
|
|
0.1
|
|
|
0.1
|
|
||
Net periodic postretirement benefit cost
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
|
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
|
|
6.1
|
|
|
0.9
|
|
|
5.2
|
|
|||
Amortization of prior service cost
|
|
0.9
|
|
|
0.1
|
|
|
0.8
|
|
|||
Accumulated other comprehensive loss as of June 30, 2019
|
|
$
|
(372.8
|
)
|
|
$
|
(96.4
|
)
|
|
$
|
(276.4
|
)
|
|
As of June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
31.5
|
|
|
$
|
—
|
|
|
$
|
31.5
|
|
Derivative liabilities
|
—
|
|
|
11.9
|
|
|
—
|
|
|
11.9
|
|
|
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 June 30,
|
|
North
America |
|
South
America |
|
Europe/Middle East
|
|
Asia/Pacific/Africa
|
|
Consolidated
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
618.9
|
|
|
$
|
185.8
|
|
|
$
|
1,457.2
|
|
|
$
|
160.7
|
|
|
$
|
2,422.6
|
|
Income (loss) from operations
|
|
51.4
|
|
|
(7.1
|
)
|
|
208.8
|
|
|
7.0
|
|
|
260.1
|
|
|||||
Depreciation
|
|
16.1
|
|
|
8.2
|
|
|
26.4
|
|
|
3.4
|
|
|
54.1
|
|
|||||
Capital expenditures
|
|
11.6
|
|
|
5.0
|
|
|
35.4
|
|
|
2.0
|
|
|
54.0
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
600.5
|
|
|
$
|
219.6
|
|
|
$
|
1,545.2
|
|
|
$
|
172.3
|
|
|
$
|
2,537.6
|
|
Income (loss) from operations
|
|
37.6
|
|
|
(16.7
|
)
|
|
208.5
|
|
|
4.6
|
|
|
234.0
|
|
|||||
Depreciation
|
|
16.8
|
|
|
7.3
|
|
|
28.4
|
|
|
3.4
|
|
|
55.9
|
|
|||||
Capital expenditures
|
|
10.1
|
|
|
7.3
|
|
|
24.3
|
|
|
2.0
|
|
|
43.7
|
|
Six Months Ended June 30,
|
|
North
America
|
|
South
America
|
|
Europe/
Middle East
|
|
Asia/
Pacific/Africa
|
|
Consolidated
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
|
$
|
1,115.1
|
|
|
$
|
341.9
|
|
|
$
|
2,667.8
|
|
|
$
|
293.6
|
|
|
$
|
4,418.4
|
|
Income (loss) from operations
|
|
82.0
|
|
|
(15.6
|
)
|
|
336.5
|
|
|
10.4
|
|
|
413.3
|
|
|||||
Depreciation
|
|
31.7
|
|
|
16.7
|
|
|
52.4
|
|
|
6.3
|
|
|
107.1
|
|
|||||
Capital expenditures
|
|
29.9
|
|
|
17.1
|
|
|
64.9
|
|
|
3.0
|
|
|
114.9
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
|
$
|
1,103.4
|
|
|
$
|
401.7
|
|
|
$
|
2,708.9
|
|
|
$
|
331.1
|
|
|
$
|
4,545.1
|
|
Income (loss) from operations
|
|
64.4
|
|
|
(33.3
|
)
|
|
307.5
|
|
|
9.3
|
|
|
347.9
|
|
|||||
Depreciation
|
|
34.0
|
|
|
15.3
|
|
|
58.4
|
|
|
7.4
|
|
|
115.1
|
|
|||||
Capital expenditures
|
|
22.2
|
|
|
14.2
|
|
|
49.4
|
|
|
4.0
|
|
|
89.8
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of June 30, 2019
|
|
$
|
1,244.6
|
|
|
$
|
873.4
|
|
|
$
|
2,392.4
|
|
|
$
|
519.9
|
|
|
$
|
5,030.3
|
|
As of December 31, 2018
|
|
1,032.1
|
|
|
736.1
|
|
|
1,905.8
|
|
|
501.1
|
|
|
4,175.1
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Segment income from operations
|
$
|
260.1
|
|
|
$
|
234.0
|
|
|
$
|
413.3
|
|
|
$
|
347.9
|
|
Corporate expenses
|
(32.9
|
)
|
|
(32.5
|
)
|
|
(64.7
|
)
|
|
(65.9
|
)
|
||||
Stock compensation expense
|
(12.2
|
)
|
|
(12.5
|
)
|
|
(24.2
|
)
|
|
(20.9
|
)
|
||||
Restructuring expenses
|
—
|
|
|
(2.7
|
)
|
|
(1.7
|
)
|
|
(8.6
|
)
|
||||
Amortization of intangibles
|
(15.4
|
)
|
|
(18.2
|
)
|
|
(30.7
|
)
|
|
(33.9
|
)
|
||||
Consolidated income from operations
|
$
|
199.6
|
|
|
$
|
168.1
|
|
|
$
|
292.0
|
|
|
$
|
218.6
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Segment assets
|
$
|
5,030.3
|
|
|
$
|
4,175.1
|
|
Cash and cash equivalents
|
279.9
|
|
|
326.1
|
|
||
Investments in affiliates
|
404.7
|
|
|
400.0
|
|
||
Deferred tax assets, other current and noncurrent assets
|
664.6
|
|
|
656.6
|
|
||
Intangible assets, net
|
541.6
|
|
|
573.1
|
|
||
Goodwill
|
1,494.0
|
|
|
1,495.5
|
|
||
Consolidated total assets
|
$
|
8,415.1
|
|
|
$
|
7,626.4
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
84.5
|
|
|
$
|
96.9
|
|
Advance consideration received
|
38.3
|
|
|
23.4
|
|
||
Revenue recognized during the period for extended warranty contracts, maintenance services and technology services
|
(7.9
|
)
|
|
(6.3
|
)
|
||
Revenue recognized during the period related to installation of grain storage and protein production systems
|
(27.2
|
)
|
|
(34.7
|
)
|
||
Foreign currency translation
|
0.3
|
|
|
(1.5
|
)
|
||
Balance at June 30
|
$
|
88.0
|
|
|
$
|
77.8
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
76.8
|
|
|
$
|
82.6
|
|
Advance consideration received
|
63.7
|
|
|
57.9
|
|
||
Revenue recognized during the period for extended warranty contracts, maintenance services and technology services
|
(14.0
|
)
|
|
(12.7
|
)
|
||
Revenue recognized during the period related to installation of grain storage and protein production systems
|
(38.6
|
)
|
|
(49.6
|
)
|
||
Foreign currency translation
|
0.1
|
|
|
(0.4
|
)
|
||
Balance at June 30
|
$
|
88.0
|
|
|
$
|
77.8
|
|
|
|
North America(1)
|
|
South America(1)
|
|
Europe/Middle East
|
|
Asia/Pacific/Africa
|
|
Consolidated(1)
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
500.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500.2
|
|
Canada
|
|
91.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91.9
|
|
|||||
South America
|
|
—
|
|
|
182.1
|
|
|
—
|
|
|
—
|
|
|
182.1
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
390.6
|
|
|
—
|
|
|
390.6
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
267.5
|
|
|
—
|
|
|
267.5
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
135.9
|
|
|
—
|
|
|
135.9
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
199.0
|
|
|
—
|
|
|
199.0
|
|
|||||
Other Europe
|
|
—
|
|
|
—
|
|
|
443.3
|
|
|
—
|
|
|
443.3
|
|
|||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
20.9
|
|
|
—
|
|
|
20.9
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.7
|
|
|
29.7
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77.6
|
|
|
77.6
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.4
|
|
|
53.4
|
|
|||||
Mexico, Central America and Caribbean
|
|
26.9
|
|
|
3.6
|
|
|
—
|
|
|
—
|
|
|
30.5
|
|
|||||
|
|
$
|
618.9
|
|
|
$
|
185.8
|
|
|
$
|
1,457.2
|
|
|
$
|
160.7
|
|
|
$
|
2,422.6
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
187.4
|
|
|
$
|
106.3
|
|
|
$
|
994.1
|
|
|
$
|
62.0
|
|
|
$
|
1,349.8
|
|
Replacement parts
|
|
98.7
|
|
|
21.4
|
|
|
246.4
|
|
|
17.2
|
|
|
383.7
|
|
|||||
Grain storage and protein production systems
|
|
166.4
|
|
|
17.7
|
|
|
61.6
|
|
|
61.2
|
|
|
306.9
|
|
|||||
Combines, application equipment and other machinery
|
|
166.5
|
|
|
40.4
|
|
|
155.1
|
|
|
20.3
|
|
|
382.3
|
|
|||||
|
|
$
|
618.9
|
|
|
$
|
185.8
|
|
|
$
|
1,457.2
|
|
|
$
|
160.7
|
|
|
$
|
2,422.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
South America
|
|
Europe/Middle East(1)
|
|
Asia/Pacific/Africa(1)
|
|
Consolidated
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
|
$
|
468.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
468.4
|
|
Canada
|
|
101.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.3
|
|
|||||
South America
|
|
—
|
|
|
213.7
|
|
|
—
|
|
|
—
|
|
|
213.7
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
389.7
|
|
|
—
|
|
|
389.7
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
250.2
|
|
|
—
|
|
|
250.2
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
172.8
|
|
|
—
|
|
|
172.8
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
231.7
|
|
|
—
|
|
|
231.7
|
|
|||||
Other Europe
|
|
—
|
|
|
—
|
|
|
466.3
|
|
|
—
|
|
|
466.3
|
|
|||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
34.5
|
|
|
—
|
|
|
34.5
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.0
|
|
|
22.0
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87.0
|
|
|
87.0
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63.3
|
|
|
63.3
|
|
|||||
Mexico, Central America and Caribbean
|
|
30.8
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
36.7
|
|
|||||
|
|
$
|
600.5
|
|
|
$
|
219.6
|
|
|
$
|
1,545.2
|
|
|
$
|
172.3
|
|
|
$
|
2,537.6
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
173.7
|
|
|
$
|
148.2
|
|
|
$
|
1,049.5
|
|
|
$
|
75.9
|
|
|
$
|
1,447.3
|
|
Replacement parts
|
|
97.7
|
|
|
21.9
|
|
|
252.7
|
|
|
15.9
|
|
|
388.2
|
|
|||||
Grain storage and protein production systems
|
|
171.5
|
|
|
12.2
|
|
|
58.4
|
|
|
59.9
|
|
|
302.0
|
|
|||||
Combines, application equipment and other machinery
|
|
157.6
|
|
|
37.3
|
|
|
184.5
|
|
|
20.7
|
|
|
400.1
|
|
|||||
|
|
$
|
600.5
|
|
|
$
|
219.6
|
|
|
$
|
1,545.2
|
|
|
$
|
172.3
|
|
|
$
|
2,537.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America(1)
|
|
South America
|
|
Europe/Middle East
|
|
Asia/Pacific/Africa(1)
|
|
Consolidated(1)
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
912.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
912.8
|
|
Canada
|
|
153.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153.1
|
|
|||||
South America
|
|
—
|
|
|
335.0
|
|
|
—
|
|
|
—
|
|
|
335.0
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
660.9
|
|
|
—
|
|
|
660.9
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
505.6
|
|
|
—
|
|
|
505.6
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
290.2
|
|
|
—
|
|
|
290.2
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
368.6
|
|
|
—
|
|
|
368.6
|
|
|||||
Other Europe
|
|
—
|
|
|
—
|
|
|
807.5
|
|
|
—
|
|
|
807.5
|
|
|||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
35.0
|
|
|
—
|
|
|
35.0
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.0
|
|
|
50.0
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136.8
|
|
|
136.8
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106.8
|
|
|
106.8
|
|
|||||
Mexico, Central America and Caribbean
|
|
49.3
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
56.2
|
|
|||||
|
|
$
|
1,115.1
|
|
|
$
|
341.9
|
|
|
$
|
2,667.8
|
|
|
$
|
293.6
|
|
|
$
|
4,418.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
327.6
|
|
|
$
|
190.6
|
|
|
$
|
1,823.8
|
|
|
$
|
127.0
|
|
|
$
|
2,469.0
|
|
Replacement parts
|
|
160.2
|
|
|
43.3
|
|
|
448.3
|
|
|
33.9
|
|
|
685.7
|
|
|||||
Grain storage and protein production systems
|
|
270.2
|
|
|
37.4
|
|
|
104.1
|
|
|
98.3
|
|
|
510.0
|
|
|||||
Combines, application equipment and other machinery
|
|
357.2
|
|
|
70.6
|
|
|
291.6
|
|
|
34.3
|
|
|
753.7
|
|
|||||
|
|
$
|
1,115.1
|
|
|
$
|
341.9
|
|
|
$
|
2,667.8
|
|
|
$
|
293.6
|
|
|
$
|
4,418.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
South America
|
|
Europe/Middle East(1)
|
|
Asia/Pacific/Africa(1)
|
|
Consolidated
|
||||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
867.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
867.5
|
|
Canada
|
|
174.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174.9
|
|
|||||
South America
|
|
—
|
|
|
394.2
|
|
|
—
|
|
|
—
|
|
|
394.2
|
|
|||||
Germany
|
|
—
|
|
|
—
|
|
|
677.6
|
|
|
—
|
|
|
677.6
|
|
|||||
France
|
|
—
|
|
|
—
|
|
|
446.8
|
|
|
—
|
|
|
446.8
|
|
|||||
United Kingdom and Ireland
|
|
—
|
|
|
—
|
|
|
313.1
|
|
|
—
|
|
|
313.1
|
|
|||||
Finland and Scandinavia
|
|
—
|
|
|
—
|
|
|
408.8
|
|
|
—
|
|
|
408.8
|
|
|||||
Other Europe
|
|
—
|
|
|
—
|
|
|
801.1
|
|
|
—
|
|
|
801.1
|
|
|||||
Middle East and Algeria
|
|
—
|
|
|
—
|
|
|
61.5
|
|
|
—
|
|
|
61.5
|
|
|||||
Africa
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.2
|
|
|
44.2
|
|
|||||
Asia
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161.6
|
|
|
161.6
|
|
|||||
Australia and New Zealand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125.3
|
|
|
125.3
|
|
|||||
Mexico, Central America and Caribbean
|
|
61.0
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
68.5
|
|
|||||
|
|
$
|
1,103.4
|
|
|
$
|
401.7
|
|
|
$
|
2,708.9
|
|
|
$
|
331.1
|
|
|
$
|
4,545.1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Major products:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tractors
|
|
$
|
328.3
|
|
|
$
|
255.0
|
|
|
$
|
1,827.9
|
|
|
$
|
149.4
|
|
|
$
|
2,560.6
|
|
Replacement parts
|
|
158.5
|
|
|
43.6
|
|
|
463.2
|
|
|
35.6
|
|
|
700.9
|
|
|||||
Grain storage and protein production systems
|
|
281.9
|
|
|
29.4
|
|
|
92.8
|
|
|
104.1
|
|
|
508.2
|
|
|||||
Combines, application equipment and other machinery
|
|
334.7
|
|
|
73.7
|
|
|
324.9
|
|
|
42.1
|
|
|
775.4
|
|
|||||
|
|
$
|
1,103.4
|
|
|
$
|
401.7
|
|
|
$
|
2,708.9
|
|
|
$
|
331.1
|
|
|
$
|
4,545.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Lease Assets
|
|
Classification
|
|
As of June 30, 2019
|
||
Operating ROU assets
|
|
Right-of-use lease assets
|
|
$
|
203.3
|
|
Finance lease assets
|
|
Property, plant and equipment, net(1)
|
|
16.1
|
|
|
Total leased assets
|
|
|
|
$
|
219.4
|
|
|
|
|
|
|
||
Lease Liabilities
|
|
Classification
|
|
As of June 30, 2019
|
||
Current:
|
|
|
|
|
||
Operating
|
|
Accrued expenses
|
|
$
|
42.5
|
|
Finance
|
|
Other current liabilities
|
|
3.9
|
|
|
|
|
|
|
|
||
Noncurrent:
|
|
|
|
|
||
Operating
|
|
Operating lease liabilities
|
|
163.3
|
|
|
Finance
|
|
Other noncurrent liabilities
|
|
9.6
|
|
|
Total leased liabilities
|
|
|
|
$
|
219.3
|
|
|
|
Classification
|
|
Three Months Ended
June 30, 2019
|
|
Six Months Ended
June 30, 2019
|
||||
Operating lease cost
|
|
Selling, general and administrative expenses
|
|
$
|
13.7
|
|
|
$
|
28.0
|
|
Variable lease cost
|
|
Selling, general and administrative expenses
|
|
—
|
|
|
0.1
|
|
||
Short-term lease cost
|
|
Selling, general and administrative expenses
|
|
2.2
|
|
|
4.4
|
|
||
Finance lease cost:
|
|
|
|
|
|
|
||||
Amortization of leased assets
|
|
Depreciation expense(1)
|
|
1.2
|
|
|
2.5
|
|
||
Interest on leased liabilities
|
|
Interest expense, net
|
|
0.3
|
|
|
0.4
|
|
||
Total lease cost
|
|
|
|
$
|
17.4
|
|
|
$
|
35.4
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Operating Leases(1)(2)
|
|
Finance Leases
|
|
Operating Leases(5)
|
|
Finance Leases(5)
|
||||||||
2019
|
|
$
|
25.1
|
|
|
$
|
2.8
|
|
|
$
|
46.7
|
|
|
$
|
4.9
|
|
2020
|
|
45.2
|
|
|
3.5
|
|
|
39.5
|
|
|
3.5
|
|
||||
2021
|
|
38.0
|
|
|
2.1
|
|
|
32.6
|
|
|
2.8
|
|
||||
2022
|
|
29.9
|
|
|
1.0
|
|
|
26.0
|
|
|
0.9
|
|
||||
2023
|
|
22.7
|
|
|
0.7
|
|
|
21.7
|
|
|
0.7
|
|
||||
Thereafter
|
|
81.9
|
|
|
4.3
|
|
|
85.5
|
|
|
3.7
|
|
||||
Total lease payments
|
|
242.8
|
|
|
14.4
|
|
|
252.0
|
|
|
16.5
|
|
||||
Less: imputed interest(3)(4)
|
|
(37.0
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(1.0
|
)
|
||||
Present value of leased liabilities
|
|
$
|
205.8
|
|
|
$
|
13.5
|
|
|
$
|
252.0
|
|
|
$
|
15.5
|
|
|
|
As of June 30, 2019
|
|
Weighted-average remaining lease term:
|
|
|
|
Operating leases
|
|
8.0 years
|
|
Finance leases
|
|
9.0 years
|
|
|
|
|
|
Weighted-average discount rate:
|
|
|
|
Operating leases
|
|
3.4
|
%
|
Finance leases
|
|
2.7
|
%
|
|
|
Six Months Ended June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
28.0
|
|
Operating cash flows from finance leases
|
|
2.5
|
|
|
Financing cash flows from finance leases
|
|
0.4
|
|
|
|
|
|
||
Leased assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
22.2
|
|
Finance leases
|
|
0.7
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended June 30,
|
|
Change
|
|
Change Due to Currency Translation
|
||||||||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
North America
|
$
|
618.9
|
|
|
$
|
600.5
|
|
|
$
|
18.4
|
|
|
3.1
|
%
|
|
$
|
(3.4
|
)
|
|
(0.6
|
)%
|
South America
|
185.8
|
|
|
219.6
|
|
|
(33.8
|
)
|
|
(15.4
|
)%
|
|
(12.6
|
)
|
|
(5.7
|
)%
|
||||
Europe/Middle East
|
1,457.2
|
|
|
1,545.2
|
|
|
(88.0
|
)
|
|
(5.7
|
)%
|
|
(91.0
|
)
|
|
(5.9
|
)%
|
||||
Asia/Pacific/Africa
|
160.7
|
|
|
172.3
|
|
|
(11.6
|
)
|
|
(6.7
|
)%
|
|
(10.2
|
)
|
|
(5.9
|
)%
|
||||
|
$
|
2,422.6
|
|
|
$
|
2,537.6
|
|
|
$
|
(115.0
|
)
|
|
(4.5
|
)%
|
|
$
|
(117.2
|
)
|
|
(4.6
|
)%
|
|
Six Months Ended June 30,
|
|
Change
|
|
Change Due to Currency Translation
|
||||||||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
North America
|
|
$1,115.1
|
|
|
|
$1,103.4
|
|
|
$
|
11.7
|
|
|
1.1
|
%
|
|
$
|
(7.2
|
)
|
|
(0.7
|
)%
|
South America
|
341.9
|
|
|
401.7
|
|
|
(59.8
|
)
|
|
(14.9
|
)%
|
|
(33.8
|
)
|
|
(8.4
|
)%
|
||||
Europe/Middle East
|
2,667.8
|
|
|
2,708.9
|
|
|
(41.1
|
)
|
|
(1.5
|
)%
|
|
(197.3
|
)
|
|
(7.3
|
)%
|
||||
Asia/Pacific/Africa
|
293.6
|
|
|
331.1
|
|
|
(37.5
|
)
|
|
(11.3
|
)%
|
|
(20.8
|
)
|
|
(6.3
|
)%
|
||||
|
$
|
4,418.4
|
|
|
$
|
4,545.1
|
|
|
$
|
(126.7
|
)
|
|
(2.8
|
)%
|
|
$
|
(259.1
|
)
|
|
(5.7
|
)%
|
|
|
Three Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
% of
Net Sales(1)
|
|
$
|
|
% of
Net Sales
|
||||||
Gross profit
|
|
$
|
563.9
|
|
|
23.3
|
%
|
|
$
|
556.3
|
|
|
21.9
|
%
|
Selling, general and administrative expenses
|
|
260.7
|
|
|
10.8
|
%
|
|
271.8
|
|
|
10.7
|
%
|
||
Engineering expenses
|
|
87.5
|
|
|
3.6
|
%
|
|
93.0
|
|
|
3.7
|
%
|
||
Restructuring expenses
|
|
—
|
|
|
—
|
%
|
|
2.7
|
|
|
0.1
|
%
|
||
Amortization of intangibles
|
|
15.4
|
|
|
0.6
|
%
|
|
18.2
|
|
|
0.7
|
%
|
||
Bad debt expense
|
|
0.7
|
|
|
—
|
%
|
|
2.5
|
|
|
0.1
|
%
|
||
Income from operations
|
|
$
|
199.6
|
|
|
8.2
|
%
|
|
$
|
168.1
|
|
|
6.6
|
%
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
$
|
|
% of
Net Sales(1)
|
|
$
|
|
% of
Net Sales(1)
|
||||||
Gross profit
|
|
$
|
1,020.6
|
|
|
23.1
|
%
|
|
$
|
984.3
|
|
|
21.7
|
%
|
Selling, general and administrative expenses
|
|
522.9
|
|
|
11.8
|
%
|
|
536.4
|
|
|
11.8
|
%
|
||
Engineering expenses
|
|
172.0
|
|
|
3.9
|
%
|
|
183.9
|
|
|
4.0
|
%
|
||
Restructuring expenses
|
|
1.7
|
|
|
—
|
%
|
|
8.6
|
|
|
0.2
|
%
|
||
Amortization of intangibles
|
|
30.7
|
|
|
0.7
|
%
|
|
33.9
|
|
|
0.7
|
%
|
||
Bad debt expense
|
|
1.3
|
|
|
—
|
%
|
|
2.9
|
|
|
0.1
|
%
|
||
Income from operations
|
|
$
|
292.0
|
|
|
6.6
|
%
|
|
$
|
218.6
|
|
|
4.8
|
%
|
|
June 30, 2019
|
||
1.056% Senior term loan due 2020
|
$
|
227.7
|
|
Senior term loan due 2022
|
170.7
|
|
|
Credit facility, expires 2023
|
96.8
|
|
|
1.002% Senior term loan due 2025
|
284.6
|
|
|
Senior term loans due between 2019 and 2028
|
811.6
|
|
|
Other long-term debt
|
17.3
|
|
•
|
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;
|
•
|
recent suspension of agricultural products into China and the impact to global agricultural equipment demand, if any;
|
•
|
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)
|
||||||
April 1, 2019 through
April 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
117.1
|
|
May 1, 2019 through
May 31, 2019(2)(3)
|
|
532,697
|
|
|
$
|
67.69
|
|
|
532,697
|
|
|
$
|
77.1
|
|
June 1, 2019 through
June 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
77.1
|
|
Total
|
|
532,697
|
|
|
$
|
67.69
|
|
|
532,697
|
|
|
$
|
77.1
|
|
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
|
||
|
|
|
|
|
|
|
March 31, 2019, Form 10-Q, Exhibit 10.1
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
||
|
|
Filed herewith
|
||
|
|
|
||
|
|
Furnished herewith
|
||
|
|
|
||
101
|
|
The following unaudited financial information from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, are formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.
|
|
Filed herewith
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File - the cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 is formatted in Inline XBRL
|
|
Filed herewith
|
|
|
|
|
Date:
|
August 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)
|
TABLE OF CONTENTS
Page
|
||
ARTICLE I
|
DEFINITIONS
|
1
|
1.1
|
Accrual Factor
|
1
|
1.2
|
Accrued Benefit
|
2
|
1.3
|
Actuarial Equivalent
|
2
|
1.4
|
Administrative Committee
|
2
|
1.5
|
Affiliate
|
2
|
1.6
|
Annuity Commencement Date
|
2
|
1.7
|
Base Salary
|
2
|
1.8
|
Benefit Commencement Date
|
3
|
1.9
|
Board
|
3
|
1.10
|
Change in Control
|
3
|
1.11
|
Code
|
3
|
1.12
|
Company
|
3
|
1.13
|
Death Benefit
|
4
|
1.14
|
Designated Beneficiary
|
4
|
1.15
|
Effective Date
|
4
|
1.16
|
Eligible Employee
|
4
|
1.17
|
Employment Commencement Date
|
4
|
1.18
|
ERISA
|
4
|
1.19
|
Final Earnings
|
4
|
1.20
|
Interest
|
4
|
1.21
|
Normal Retirement Age
|
4
|
1.22
|
Participant
|
4
|
1.23
|
Plan
|
4
|
1.24
|
Plan Year
|
5
|
1.25
|
Retirement Annuity
|
5
|
1.26
|
Savings Plan Benefit
|
5
|
1.27
|
Separation from Service
|
5
|
1.28
|
Social Security Benefit
|
6
|
1.29
|
Trust or Trust Agreement
|
6
|
1.30
|
Trustee
|
6
|
1.31
|
Trust Fund
|
6
|
1.32
|
Years of Credited Service
|
6
|
1.33
|
AGCO Finance LLC
|
6
|
ARTICLE II
|
ELIGIBILITY
|
6
|
2.1
|
Selection of Participants
|
6
|
2.2
|
Removal from Active Participation
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE OF CONTENTS
(continued)
Page
|
||
ARTICLE III
|
BENEFITS
|
7
|
3.1
|
Benefit Amount
|
7
|
3.2
|
Payment of Accrued Benefit
|
7
|
3.3
|
Change in Control
|
8
|
3.4
|
Death Benefit
|
8
|
3.5
|
Retirement Annuity
|
9
|
3.6
|
Special Rule
|
9
|
ARTICLE IV
|
CLAIMS
|
10
|
4.1
|
Claims Procedure
|
10
|
4.2
|
Claims Review Procedure
|
10
|
ARTICLE V
|
SOURCE OF FUNDS TRUST
|
11
|
5.1
|
Source of Funds
|
11
|
5.2
|
Trust
|
12
|
ARTICLE VI
|
ADMINISTRATIVE COMMITTEE
|
12
|
6.1
|
Action
|
12
|
6.2
|
Rights and Duties
|
12
|
6.3
|
Compensation, Indemnity and Liability
|
13
|
6.4
|
Taxes
|
13
|
ARTICLE VII
|
AMENDMENT AND TERMINATION
|
14
|
7.1
|
Amendments
|
14
|
7.2
|
Termination of Plan
|
14
|
ARTICLE VIII
|
MISCELLANEOUS
|
14
|
8.1
|
Taxation
|
14
|
8.2
|
No Employment Contract
|
14
|
8.3
|
Headings
|
15
|
8.4
|
Gender and Number
|
15
|
8.5
|
Assignment of Benefits
|
15
|
8.6
|
Legally Incompetent
|
15
|
8.7
|
Governing Law
|
15
|
8.8
|
Omnibus 409A Provision
|
15
|
(iii)
|
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and
|
(iv)
|
a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right, if any, to bring a civil action under section 502(a) of the ERISA, following an adverse benefit determination on review.
|
(i)
|
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and
|
(ii)
|
a statement describing any voluntary appeal procedures offered by the Plan, and a statement of the claimant’s right, if any, to bring an action under Section 502(a) of ERISA.
|
AGCO CORPORATION
|
||
|
|
|
By:
|
/s/ Roger Batkin
|
|
Title:
|
Senior Vice President, General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
I.
|
PURPOSE; EFFECTIVE DATE; PLAN YEAR
|
II.
|
ADMINISTRATION OF THE PLAN
|
•
|
To construe and interpret the Plan;
|
•
|
To establish, amend, change, add to, alter and/or and rescind rules, regulations and guidelines for administration of the Plan;
|
•
|
To make all designations and determinations specified in the Plan;
|
•
|
Except as noted herein, to determine the amount of awards and payments to be made under the Plan and the status and rights of any Participant to payments under the Plan; and
|
•
|
To decide all questions concerning the Plan and to make all other determinations and to take all other steps necessary or advisable for the administration of the Plan.
|
III.
|
PLAN FUNDING
|
IV.
|
ELIGIBILITY
|
V.
|
AWARD OPPORTUNITY
|
•
|
CEO: 140%
|
•
|
CFO, COO: 100%
|
•
|
GM, Europe/Middle East 100%
|
•
|
Other GMs: 90%
|
•
|
Other SVPs: 80%
|
•
|
Other Participants: Not more than 40%
|
VI.
|
PERFORMANCE CRITERIA AND GOALS
|
Global/Corporate
|
Regional Participants
|
• Corporate:
- Operating margin as a percentage of net sales
- Free Cash Flow
|
• Corporate:
- Operating margin as a percentage of net sales
- Free Cash Flow
• Regional:
- Regional equivalents of Corporate goals
|
•
|
earnings per share and/or growth in earnings per share in relation to target objectives;
|
•
|
operating or free cash flow and/or growth in operating or free cash flow in relation to target objectives;
|
•
|
cash available in relation to target objectives;
|
•
|
operating income and/or growth in operating income in relation to target objectives;
|
•
|
margin and/or growth in margins (gross, operating or otherwise) in relation to target objectives;
|
•
|
net income and/or growth in net income in relation to target objectives;
|
•
|
revenue and/or growth in revenue in relation to target objectives;
|
•
|
total stockholder return (measured as the total of the appreciation of and dividends declared on the common stock) in relation to target objectives;
|
•
|
return on invested capital in relation to target objectives;
|
•
|
productivity and/or improvement in productivity;
|
•
|
achievement of milestones on special projects;
|
•
|
return on stockholder equity in relation to target objectives;
|
•
|
return on assets in relation to target objectives;
|
•
|
return on common book equity in relation to target objectives; and
|
•
|
customer satisfaction and/or improvement in customer satisfaction.
|
•
|
EPS: Diluted and adjusted to exclude restructuring and certain other infrequent items.
|
•
|
Free Cash Flow: Cash flow from operations less capital expenditures. Excludes cash flow from financing such as increases in accounts receivables securitizations.
|
•
|
Customer Satisfaction: Overall customer satisfaction index that measures after-sales service, sales experience and product quality.
|
•
|
Functional/Regional: Must be approved by the appropriate Senior Vice President, CEO or CFO.
|
Global/Corporate
|
Regional Participants
|
• Corporate Performance
- Operating Margin as a percentage of sales: 70%
- Free Cash Flow: 30%
|
• Corporate Performance: 50%
- Operating Margin as a percentage of sales: 70%
- Free Cash Flow: 30%
• Regional Performance: 50%
- Regional equivalent of Corporate goals
|
VII.
|
PLAN TRIGGER; PAYMENT OF AWARDS; ADJUSTMENTS; DISCRETIONARY AWARDS
|
•
|
If a participant is transferred into another position that is also eligible for the Plan, the participant’s award will be pro-rated based on the number of months during a Plan Year in each position.
|
•
|
If a participant is promoted to a higher level position during a Plan Year, the participant’s award will be based on the number of months worked in each position and the base pay and target award for each position.
|
•
|
If a participant is hired during a Plan Year, the participant’s award will be based on the number of complete months/pay period the participant was employed during the year.
|
•
|
If a participant terminates employment prior to the end of a Plan Year due to death, approved retirement or disability, the participant (or the participant’s designated beneficiary) will receive a pro-rata share, based on gross base salary to the date of termination and actual performance, when awards are paid to all other participants.
|
•
|
If a participant terminates his or her employment before the completion of the last day of the Plan Year, for reasons other than death, approved retirement or disability, then the participant will forfeit any award.
|
•
|
If a participant is terminated without cause before the completion of the last day of the Plan Year, for reasons other than death, approved retirement or disability, then the participant will receive a pro-rata share based on gross base salary to the date of termination and actual performance, when awards are paid to other participants.
|
•
|
If a participant is terminated without cause or terminates his or her employment after the end of the Plan Year but before the award is paid, the participant will receive (based on performance) a complete award when paid to all other recipients.
|
•
|
If a participant is terminated for cause at any time before the award is paid, the participant will forfeit payment of the award.
|
•
|
Significant one-time unexpected restructuring expenses
|
•
|
Significant unplanned costs associated with a merger or acquisition
|
•
|
Significant unplanned net income adjustments for debt refinancing
|
•
|
Significant unplanned or unexpected taxes and/or legal charges associated with changes in legislation
|
•
|
Changes in generally accepted accounting principles (GAAP) or the impact of any extraordinary items as determined under GAAP
|
VIII.
|
MISCELLANEOUS PROVISIONS
|
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:
|
August 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:
|
August 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
|
|
|
August 9, 2019
|
|
|
|
|
|
/s/ Andrew H. Beck
|
|
|
Andrew H. Beck
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
August 9, 2019
|
|