We Know Agriculture
A n n uAl R e p oR t 2 0 1 0
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AGCO // Annual Report 2010
AGCO At A GlAnCe
As the world’s largest manufacturer focused purely on agricultural equipment, AGCO is uniquely positioned to
increase farm productivity through high-tech solutions for professional farmers feeding the world.
Key business figuRes
in million $ – except per share amounts
Net sales
Income from operations
Net income attributable to AGCO Corporation and subsidiaries
Total assets
Stockholders’ equity
Earnings per share(1)
Adjusted earnings per share(2)
(1) On a diluted basis.
(2) For a reconciliation of adjusted earnings per share, see footnote 2 on page 37.
sAles by pRoduct
in %
68%
15%
6%
4%
4%
3%
2010
2009
Change
6,896.6
6,516.4
324.2
220.5
5,436.9
2,659.2
2.29
2.32
218.7
135.7
4,998.9
2,394.4
1.44
1.55
5.8%
48.2%
62.5%
8.8%
11.1%
59.0%
49.7%
Tractors
Parts
Combines
Application equipment
Implements and other
Hay and forage
sAles by geogRAphic Region
in million $
Adjusted eARnings peR shARe
in $
22%
25%
NA(1)
SA(2)
EAME(3)
ROW(4)
4%
2010
2009
2008
49%
2.32
1.55
3.95
(1) North America
(3) Europe, Africa, Middle East
(2) South America
(4) Rest of World: Asia, Australia/New Zealand, Eastern Europe
on the coveR
In 2010, AGCO made solid progress toward meeting its long-term growth objectives. Among other things, it was a year
marked by numerous combine launches and the announcement of a strategic acquisition of a state-of-the-art combine
facility, proof of our accelerated commitment towards improving harvesting productivity.
3
tAble Of COntents
04 // chAiRmAn’s
messAge
07 // We KnoW
AgRicultuRe
08 // investing in
hARvesting
10 // cleAneR AiR
Without
compRomise
12 // vARio
innovAtion hits
milestone
14 // pAssionAte
About customeRs
15 // We suppoRt
youR fARm
16 // ouR bRAnds
24 // A full line of
pRoducts
26 // leveRAging
pRoductivity
27 // We help feed
the WoRld
31 // investing in
futuRe
technologies
32 // sustAinAbility
33 // meeting
hARvesting needs
AcRoss the globe
37// selected
finAnciAl
infoRmAtion
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AGCO // Annual Report 2010
AGCO // Annual Report 2010
chAiRmAn’s messAge
fellOw s tOCkhOlders
The year 2010 was a productive year for AGCO. We posted sales growth and substantial earnings improvement
compared to 2009. AGCO was able to generate significant cash flow, which enabled us to further strengthen our
balance sheet and at the same time make important investments in our business. We also made meaningful progress
on a number of strategic initiatives focused on operational improvement and market development. These initiatives
are aimed at positioning AGCO to take full advantage of positive long-term fundamentals forecasted for the
agricultural industry and to achieve ambitious performance goals.
2010 Results
AGCO generated sales of nearly $6.9 billion in 2010, representing a 6% increase compared to 2009. Adjusted
earnings per share was $2.32 in 2010 compared to $1.55 in 2009. Margin improvement contributed significantly to
the increase in earnings.
AGCO’s record performance in Brazil offset difficult market conditions in Western Europe, our largest market. Our
South America team generated strong order volumes, managed production efficiently and delivered record sales and
operating income. The year also was highlighted by further improvement in North American profitability, where
operating margins increased 180 basis points compared to 2009. Our North American results benefited from
profitable new products, a reorganized sales organization, lower logistics costs and improved factory efficiency. We
achieved these results while continuing our substantial investment in product development. For 2010, engineering
AGCO Corporation // Company //Chairman‘s Message
5
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Martin Richenhagen, Atacama Desert, Chile
expenses increased 14% and were focused on new products and new engine technology. We also announced three
acquisitions during 2010: Laverda – a European manufacturer of harvesting equipment (as discussed below); Sparex –
a global distributor of accessories and tractor replacement parts; and Amity – a joint venture interest in a North
American manufacturer of air-seeding and tillage equiment.
opeRAtionAl highlights
In 2010, AGCO made substantial changes to our harvesting equipment operations in Europe which should benefit our
future position in this sector. In July, we closed our combine assembly facility in Randers, Denmark and moved all of
our European combine production to Breganze, Italy. Breganze is the home of Laverda, AGCO’s 50% owned joint
venture partner. This move allows AGCO to leverage Laverda’s modern production facility, take advantage of scale
opportunities and benefit from Laverda’s experienced engineering team. In November, we took the next step in our
European harvesting strategy by agreeing to acquire the remaining 50% of Laverda, which will close in March 2011.
In addition, during 2010 we unveiled our new class 8 hybrid combine and the Fendt Katana forage harvester, which
significantly bolsters our harvesting product offering.
AGCO also initiated several margin improvement projects in 2010 aimed at lowering product cost and improving factory
efficiency. Our three large European tractor manufacturing sites in Beauvais, France; Suolahti, Finland; and
Marktoberdorf, Germany, all completed the first phases of a new plant layout and assembly flow. In addition, our
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AGCO // Annual Report 2010
purchasing organization was restructured to better capitalize on opportunities to reduce material costs through executing
best-cost country sourcing and establishing common components and suppliers. These projects, along with our future
product development plans, demonstrate our commitment to margin improvement throughout the Company.
The record results achieved in South America in 2010 were accomplished by leveraging our two leading brands and
distribution networks, Valtra and Massey Ferguson, both of which have been in Brazil for decades. During 2010, Valtra
celebrated its 50th anniversary in the Brazilian market. We will continue to invest in both of these brands and product lines
to build upon our brand heritage, loyal customer base and dominant market position in this important agricultural region.
positive industRy fundAmentAls
It is a good time to be in the agricultural equipment industry. Farm fundamentals are strong; farmer balance sheets are in
good condition and farm income is expected to improve. In addition, the long-term trends that have increased demand for
grains and lowered global grain inventories are still intact and are expected to intensify. The growing population,
increasing demand for food, changing diets, and rising demand for energy worldwide will continue to support healthy
long-term fundamentals for the agricultural industry. Increased grain demand is likely to stimulate efforts to boost farm
productivity globally which will center on improved fertilizer and seed technology and more efficient equipment.
Professional farm machinery will be one of the key factors in achieving increased crop yields in future years.
Agco’s futuRe pRioRities
It also is a good time for AGCO to invest for the future. Our strategic plan is built upon initiatives to grow sales as well
as increase margins. Our growth initiatives start with our investments in new product development to upgrade and
expand our product offerings in all markets. We intend to dedicate more resources to take advantage of future market
opportunities in Eastern Europe, Asia and Africa. We also plan to execute our growth plans in our recently acquired
businesses. Margin expansion is expected to be achieved through the continued implementation of our global
purchasing strategies aimed to reduce material costs and through the rollout of the AGCO Production System designed
to drive productivity improvements at the plant level. In addition, we are developing new platform solutions to simplify
our product lines and reduce product costs. We also are making further process and system upgrades aimed at
improving the way we introduce new products and services to the market. Our sound financial position will allow us to
make these significant investments and to execute our ambitious plans.
I am excited about the substantial opportunities that exist for AGCO and the work we have ahead of us. I thank all
our employees and dealers for their contributions to our 2010 results and for their continued efforts to drive AGCO
forward to the benefit our customers and stockholders. I also thank our fellow stockholders for your support. We will
work tirelessly to protect and grow the value of your investment in our Company.
Martin Richenhagen
Chairman, President and Chief Executive Officer
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we knOw AGriCulture
Agricultural innovation drives our company. From
impressive hybrid combines to advanced telemetry-based
tracking, AGCO supplies agribusiness with the tools and
technology needed to efficiently meet growing food, fuel
and fiber demands worldwide.
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AGCO // Annual Report 2010
inVestinG in h ArVestinG AdVAnCes
in june, Agco launched the world’s first combines to feature selective catalytic Reduction (scR)
emissions technology with our Agco sisu poWeR e3™ engine in a spectacular way that generated
overwhelmingly positive response. the company floated two combines into v enice down the grand
canal for a Western and central european dealer training event.
“Momentum” was the theme of the two-week event,
experts about the full range of Massey Ferguson and
chosen to reflect the significant progress AGCO has
Fendt harvesting products and witnessed field
made over the past four years in developing superior
demonstrations. This area of Italy was selected as the
harvesting products and services. AGCO successfully
venue because of its proximity to the Breganze combine
demonstrated its commitment to excellence in the
manufacturing facility, one of 15 AGCO engineering
harvesting machinery sector.
centers around the world.
The aim of the event was to introduce the brand new
hybrid combines and showcase some of AGCO’s new
product benefits, which are the result of significant
investments in research and development, engineering,
manufacturing and customer support. The hybrid Fendt®
9470 X Series and the Massey Ferguson® DELTA Series
combines take AGCO into the high-output segment of
the market, the fastest growing sector of the combine
business in Europe.
The Venice experience was followed by nine separate
events held back-to-back for distributors, dealers,
partners and customers. Guests traveled to a farm in the
Veneto region, where they learned from technical
A Fendt combine enters Venice on the Grand Canal.
(photo above).
The Massey Ferguson combine was a surprising sight
in the heart of Venice.
(photo on right).
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99
The new hybrid combines were demonstrated across Europe.
The new Massey Ferguson and Fendt hybrid combines
reflect intensive investment in the future of harvesting
The hybrid Fendt 9470 X and Massey Ferguson DELTA
and new prospects the potential of AGCO’s new
combines (shown on the cover) bring together
harvesting equipment. AGCO has already invested nearly
conventional threshing and twin-rotor separation for
$100 million in its focused development of harvesting
high output capacity with the gentlest grain and straw
equipment and continues to invest in this growth
handling. These combines are also the first to feature
strategy. AGCO’s harvesting commitment can also be
SCR emissions technology, providing fuel economy and
seen in its 2010 agreement to acquire the remaining
emission reduction benefits.
50% share in Laverda S.p.A; this will give AGCO full
ownership of the Laverda brand, a combine production
Following the launch event in Italy, 22 hybrid combines
facility in Breganze, Italy, and the Fella-Werke GmbH
traveled across the continent to show existing customers
grass and hay machinery business.
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AGCO // Annual Report 2010
CleAner Air with Out COMPrOMise
Agco sisu poWeR provides technology solutions to help the world’s farmers comply with cleaner-air
regulations without compromising their ability to deliver food to the table. in 2010 Agco was the first
engine manufacturer to receive u.s. environmental protection Agency approval for selective catalytic
reduction (scR) technology applied in off-road applications. We were also the first to introduce tier 4
interim engines. this demonstrates our leadership in delivering exactly what modern agriculture
demands: cleaner emissions, improved economics and powerful performance.
Introduced two years ago on
tractors in Europe and North
America, AGCO’s e3™ engine
technology provides powerful,
efficient performance while
meeting diesel emissions
regulations. In 2010, AGCO
SISU POWER affirmed its clear
commitment to using SCR
technology to comply with the
Tier 4 interim requirements in
both the United States and the
European Union. The increased
magazine about agricultural
technology that conducts
extensive independent tests and
evaluations of farm machinery.
In the magazine’s Powermix test
(February 2010), the Massey
Ferguson 8690 consumed “an
impressive 16.6% less fuel per
hour,” which translated into
saving 538 gallons (2,000 liters)
of fuel over 1,000 hours of
operation. Also in 2010, the
University of Nebraska Tractor
requirements, which went into effect for engines over
Test Laboratory confirmed the superior fuel efficiency
130 kW (175HP) at the beginning of 2011, will apply to
(horsepower hour per gallon) provided by the Challenger®
engines below 130 kW (175HP) starting in 2012.
MT600C and Massey Ferguson 8600 with e3™ technology.
These respected tests provide strong confirmation that
Emission regulation provides a challenge for all engine
AGCO is following the right strategy to provide sustainable
manufacturers around the world. For AGCO SISU
benefits for the environment and to improve farmers’
POWER, it provides an opportunity to differentiate from
operational costs around the world.
the competition while providing significant customer
benefits.
e3: hoW it Keeps engine exhAust emissions
in checK
Our engines with e3™ technology deliver all the energy
The technology is simple, robust and reliable, consisting
the customer expects – in the form of undiminished
of very few parts. SCR technology treats the downstream
horsepower and torque – along with better fuel
exhaust with diesel exhaust/emissions fluid (DEF), which
economy, cooler engine temperatures, and lower nitrous
breaks down the exhaust into harmless nitrogen and
oxide and particulate emissions.
water vapor.
As one of the first tractors with SCR technology, the
With SCR, the emissions cleaning process takes place in the
Massey Ferguson 8690 was tested against competitive
exhaust line – so as to not diminish engine performance or
tractors in practical tests by profi, a leading international
increase complexity of the engine design.
11
te chn i cAl bAcKgRo un d
Our AGCO SISU POWERTM diesel engines are optimized
for high performance, low particulate emissions and low
fuel consumption.
AGCO SISU POWER 7 cylinder engine
// in 2010, Agco sisu poWeR
was one of the first manufacturers
to achieve epA tier 4 interim approval
for off-road engines utilizing scR technology.
// since launching its new 7-cylinder model, Agco sisu poWeR
has the most complete engine range below 10 liters on the market.
// With the only 7-cylinder engine on the worldwide off-road market, Agco sisu poWeR has
once again demonstrated superior innovation.
// the extra cylinder in this e3 engine offers 20% more displacement and a corresponding
increase in power and torque.
Rated power
462 hp
boost power
492 hp
max. torque
1800 nm or 1328 ft lb
cleaner emissions, improved economics and reliable performance.„
e3 efficiently delivers exactly what modern agriculture demands –
“
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AGCO // Annual Report 2010
VAriO innOVAtiOn hits MilestOne
With the introduction of the 200 vario series, continuously variable transmissions (cvt) have been
implemented through fendt’s entire product line. to date, over 121,000 transmissions around the
world have employed this multiple-award-winning technology.
brainstorm and in 1995, the 926 Vario with 260 HP was
launched at the Agritechnica show. At first, the
introduction provoked fierce industry discussion because
some initially doubted the technology’s efficiency.
Today the Vario concept is still as simple and unique as
ever. Because it has no gear steps or interruptions in
pulling power, a Fendt Vario is always driving at optimal
speed and power. It delivers an average of 10% higher
performance and 10% lower fuel consumption – plus a
The 200 Vario Series specialty tractor in a vineyard application.
work-time savings of 10%, which means cutting two
weeks of work per year out of 1,000 operating hours.
The Vario success story started back in the 1970s, when
Hans Marshall, a Fendt development engineer, came up
“2010 marks the first time Fendt has offered 100%
with the first conceptual ideas for a stepless transmission
Vario continuously variable transmission technology
that functions like an automatic transmission in a car.
across all power classes,” says Roland Schmidt, Fendt
Eventually the decision was made to produce Marshall’s
marketing director.
The ingenious 900 Vario Series gearbox delivers efficient continuously variable speed adjustment.
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emp l oyee stoR y
Dr. Heribert Reiter is the driving force behind research
and development for the Fendt product line
Dr. Reiter has dedicated his career to making high-
performing machinery work even better. One of the most
successful product development leaders in the agricultural
machinery industry, he is responsible for accelerating
Fendt product development and introducing many
groundbreaking products to the international market.
In recent years, his technical expertise helped fuel a
previously unimagined new model rollout over the entire
power range, from 70 to 390 HP.
Today Dr. Reiter heads a force of dedicated and innovative
employees and leads a successful product strategy that is
based on cutting-edge technology and the highest quality.
His technical mastery ensures Fendt continues to maintain
Dr. Reiter is a renowned technical expert and leader.
its reputation as the technology leader. Most recently, he
motivated his team to take a completely new approach in
sharpness and cutting ability. With active support from all
the development of the Fendt Katana 65 forage harvester,
departments, the new forage harvester was launched to
named after a Japanese samurai sword renowned for its
the market in 2010.
info
dR. heRibeR t ReiteR
// vice president and managing director responsible for
fendt engineering in marktoberdorf, germany
// serves on the board of the vdmA Agricultural
machinery Association
// grew up on a crop and dairy farm in schönberg, germany
// Wrote his doctoral dissertation on “losses and
efficiency in tractor transmissions”
// joined fendt in 1990 as a mechanical engineer for
transmission development and played decisive role in
designing the 700 vario series
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AGCO // Annual Report 2010
emp l oyee st oR y
PAssiOnAte AbOut CustOMers
“I’ll never forget meeting Kevin Bien for the first time at a dealer field event years ago. A customer
asked how the new model worked and pretty soon both he and Kevin were lying on their backs in
the dirt under the combine.” – todd stucke, Agco director, marketing – hay & harvesting
knows virtually every AGCO dealer
in North America, plus a good many
retail customers. Dealers and farmers
alike respect Bien because he listens,
he knows the products and he gets
things done.
What he’s been getting done lately is
bringing a “supersized” Gleaner
combine to market. Bien began
working with a team of engineers on
the project several years ago,
culminating in 30 major improvements
to the Super Series in 30 months.
“We understand that time is money when harvesting,” says Kevin bien.
It’s not uncommon to see a line of people waiting to talk
Broadcasting live from the Farm Progress Show in
to Kevin Bien at farm shows and dealer events. Usually
September, Bien talked excitedly about benchmarking the
they want to tap into his wealth of industry knowledge
Super7 combine against the competition and exceeding
but sometimes they simply want to greet an old friend.
expectations for high capacity and low grain loss in real-life
The articulate and approachable marketing manager
harvest challenges.
info
Kevin bien
// Agco product marketing manager – combines,
north America
// launched gleaner super7 combine in 2010 with
cross-country and competitive harvesting tests
// host of numerous broadcast and youtube
harvesting productions
// helped introduce the fendt brand and its v ario
technology to north America
// 35 years of sales and marketing experience
serving dealers and farmers
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we suPPOrt YOur fArM
In 2010, AGCO made bold technology and service strides in our
steadfast quest to help producers succeed both at everyday
tasks and at conquering the most demanding challenges.
AGCO delivers equipment through a multi-branded strategy
to meet the broad range of individual requirements.
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AGCO // Annual Report 2010
AGCO // Annual Report 2010
Agc o b RAnds
ChAllenGer: sMArt MAChines
seriOus results
Challenger® – a premium choice for large-scale
and application equipment. Challenger tractors range
agricultural operations that demand best-in-class
up to 585 HP, making Challenger the most powerful
equipment solutions – continues to win new customers
brand of equipment offered by AGCO.
by demonstrating competitive performance, power,
durability and support. It is our fastest-growing
Using revolutionary designs and groundbreaking
equipment brand in North America and is quickly
technology, Challenger products have earned respect
building momentum in other regions.
for combining high specifications with superior
reliability. These smart machines deliver serious results
The Challenger track system utilizes tough rubber
and are sold through a selective dealer network that
tracks and an ingenious suspension system to give
is committed to providing an outstanding customer
professional agribusinessmen the traction and flotation
experience and building lasting partnerships.
of steel tracks, combined with the speed and ride of
rubber tires. The Challenger product family also
Continuous innovation from the Challenger brand
includes wheeled tractors and a full line of harvesting
enables independently-minded agribusinessmen
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across the globe to grow their profits, expand
and nonstop up-time support give professional
operations, improve productivity and lead the
producers a competitive edge.
industry. Powerful technology, monster capacity
since 2007, the mt875b tractor has held a record for cultivating
1,590 acres in 24 hours with a single operator pulling a 46-foot-wide
disc. challenger machines deliver smart power to help professional
producers tackle their biggest challenges and drive growth.
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AGCO // Annual Report 2010
AGCO // Annual Report 2010
Agc o b RAnds
fendt: effiCient teChnOlOGY
Fendt® provides high-tech solutions featuring the best
and outstanding efficiency, is offered throughout
in German engineering. A market leader in Europe, it
the entire product line. Today, more than 100,000
is also a premium choice for professional farmers and
Fendt Vario CVT-equipped tractors have been
contractors in other global markets. Fendt customers
delivered worldwide.
are able to achieve more with less fuel, resources,
time and operating materials, giving them a strong
Fendt has also led the way in improving front-axle
return on their investment.
suspension for tractors, developing advanced braking
systems, and re-thinking operator controls to provide
With its highly-engineered tractors and harvesting
exceptional comfort and greater driving pleasure.
equipment, and its exceptional dealer organization,
Well-regarded innovations, such as the Vario joystick
the brand continues to deliver on its commitment to
and the Fendt Tractor Management System, provide
increase farmer productivity. For example, the Fendt
more precise and flexible control of hydraulics, power
award-winning Vario CVT (continuously variable
take-off and headland management systems.
transmission), which offers low fuel consumption
Continuous improvement in technology and
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performance keep this established premium brand at
specific technology needs. Leveraging industry-
the forefront of innovations to enhance customer
leading technology enables Fendt to meet its goal
productivity and efficiency. The Fendt team’s
of providing customers with the lowest total cost
consultative approach also helps it meet customers’
of ownership and highest return on investment.
“fendt efficient technology” helps customers achieve more with fewer
resources. the new 900 vario series, with output ranging from 240 to
390 hp, unites scR technology with other productivity advances and
safety features such as the first anti-lock braking system in a standard
series production tractor.
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AGCO // Annual Report 2010
AGCO // Annual Report 2010
Agc o b RAnds
MAsseY ferGusOn: A w Orld Of
eXPerienCe - wOrkinG with YOu
Massey Ferguson® delivers ease-of-use and no-
vineyard and fruit, as well as providing compact
nonsense dependability to countless farms around
and utility machinery. Massey Ferguson continues
the world. Extending from the ruggedly simple to
to reinforce its product line by providing innovative
high-horsepower/high-specification models, Massey
answers that meet the challenges of modern
Ferguson has been one of the world’s leading tractor
agriculture.
brands for more than four decades. With a heritage
of over 160 years, the brand is a symbol of pride and
Massey Ferguson is also a solid force in the global
accomplishment.
harvesting business. Manufactured in Europe, North
America and South America, its combines and balers
Drawing on its extensive experience working with
are specifically tailored to meet local harvesting
farmers, Massey Ferguson offers a broad and
conditions. The Massey Ferguson MF 9280 DELTA
versatile farm machinery range that caters to all
combine won 2010 Machine of the Year at
producers, from the largest agribusinesses and
Agritechnica in Hanover, Germany. Massey Ferguson
custom operators to specialist growers including
is a truly global brand, recognized around the world
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not only for its heritage and committed dealer
experience gives the Massey Ferguson team unique
organization, but also for its comprehensive range
insights into the needs of today’s and tomorrow’s
of sector leading products. Its unrivaled global
farmers.
massey ferguson was first to introduce scR emissions technology on an
agricultural tractor – the mf 8690. together with its sister Agco brands,
massey ferguson was the first to introduce this same technology on a
combine harvester – the mf 9280 deltA hybrid combine.
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AGCO // Annual Report 2010
AGCO // Annual Report 2010
Agc o b RAnds
VAltrA: indiViduAllY YOurs
Valtra® is the agricultural machinery brand that
options and unique features, each machine can be
epitomizes customization, especially for the progressive
built to a farmer’s order and individual specifications.
farmer and contractor. Based in Finland, it has earned a
Customers work in close partnership with their sales
solid market position in the Nordic region and has built
representatives to determine the ideal specifications
a leading reputation in South America, thanks to its
for powering their operations, choosing from a wide
individualized machinery solutions, high levels of
array of colors, engines, transmissions, hydraulics,
customer service and consultative sales approach. In
cabs and other options.
2010 Valtra celebrated its 50th anniversary in Brazil
where it has a leading position in the sugarcane sector.
Renowned for their versatility and reliability, Valtra
tractors are engineered to withstand harsh climates
Valtra tractors are individualized for the way
and deliver high performance in demanding working
customers work and are custom-built to meet specific
conditions and on extreme terrains. Valtra’s value of
job needs. Thanks to the high modularity of a Valtra
reliability can also be seen in the professional
tractor’s basic construction plus a wide choice of
approach the team brings to every transaction,
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including sales, parts, service and ongoing support.
respect for nature. Customization, coupled with
True to the Nordic tradition, Valtra operations
Scandinavian functionality and reliability, make Valtra
and products emphasize functionality (including
the choice for ease of use, comfortable operation and
pioneering efforts in ergonomics and safety) and a
maximum job efficiency.
customers can visit the valtra factory in finland to observe their very
own tractors being built. in 2010, vladi peresson drove his new valtra
tractor from the factory in finland to his farm in italy, raising
donations for an orphanage and a day care center along the way.
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AGCO // Annual Report 2010
A full line Of PrOduCts
designed foR A RAnge of teRRAins And t AsKs.
As a leading global manufacturer of agricultural
brands keep AGCO at the forefront of agricultural
equipment, AGCO offers a comprehensive line of
technology. These ongoing commitments have also
tractors, combines, sprayers, implements and hay
contributed to the continued strengthening and
tools. Each of our trusted brands delivers its own
broadening of our harvesting product line.
diversity, from ruggedly simple utility machines for
part-time farmers, to ingeniously nimble solutions for
We build our equipment to the highest standards of
demanding specialized operations, to jaw-dropping
design and manufacturing, and our innovative
high-horsepower vehicles for today’s professional
products continuously receive awards at international
farm fleets.
exhibitions. Our most coveted recognition, however,
is the endorsement of our wide range of products by
Increased investment in research and development
progressive farmers and successful dealers around the
and a dedication to sharing knowledge among our
world.
New harvester capitalizes on tractor advances
the eagerly awaited fendt forage harvester was previewed for 50,000 visitors at the september
2010 Wadenbrunn field day near Würzburg, germany. from electronics to suspension to
selective catalytic Reduction technology, the fendt Katana 65 skillfully incorporates aspects
from recent tractor breakthroughs. prototypes developed by a team of engineers have already
demonstrated great success, delivering outstanding chopping quality and high output while
being extremely fuel efficient. production is expected to begin in late 2011.
25
Durable, dependable self-propelled
sprayers meet professional applicators’
demands year after year.
Tillage machines are built to efficiently
penetrate the soil and meet the need
for increased productivity.
Hay balers deliver time-saving
efficiencies, comfort and convenience.
Planters provide high performance, low
operating cost and solutions designed
for maximum yield.
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AGCO // Annual Report 2010
cus tomeR stoR y
leVerAGinG
PrOduCtiVitY
“The Challenger MT865B track tractor is the
best on the market. One Challenger replaces
five older Soviet tractors.”– emeliano Andrey
vyacheslavovich (director general of grand llp;
an Agco customer)
The Challenger brand is helping to significantly improve
efficiency – from planting to harvesting – for Grand LLP,
a successful farming and agricultural processing
operation in northern Kazakhstan. When the business
first started, it employed a large fleet of equipment from
the Soviet Union. “Times change, and we needed to
invest in more efficient machinery,” says Emeliano
Andrey Vyacheslavovich, Director General of Grand LLP.
challenger machines boost productivity.
“Our choice was based on quality and price, and
Challenger has satisfied those parameters.”
been increased using eight Challenger combine
Vyacheslavovich was pleased to replace 10 traditional
walker machines). With 200 pieces of older-model Soviet
wheeled tractors with just two Challenger MT865B
equipment still employed in the fleet, prospects look
tracked tractors, and streamline his fleet using powerful
promising for continued productivity improvements in
Challenger combines. Today, harvesting productivity has
the future.
harvesters (five 660 rotary models and three 643 straw-
info
gRAnd llp
// located in the fedorov district of the Kostanay
province
// farms more than 123,000 acres
// operates a large fleet led by challenger
equipment: two mt865b track tractors, five 660b
combines and three 643b combines
// served by Agco distributor borusan makina,
Kazakhstan
27
27
we helP feed the wOrld
At AGCO we think and act globally. We bring relevant
technology to locations around the world to maximize
yield and meet growing food demands. We look out for
our workers, stakeholders and communities. And we lead
the way with environmental advances.
28
AGCO // Annual Report 2010
PrOduCinG MOre fOOd On less lAnd
the big factors driving world demand for farm equipment – rapid population growth, improving
diets, shrinking acreage and increased renewable fuel production – have a major impact on Agco,
the world’s #1 “pure player” in agricultural equipment.
Every minute, 144 people are added to the world
In 2010 we invested nearly $170 million in capital
population.(1) There are almost 7 billion people on our
projects and over $200 million in research and
planet and that number will reach 10 billion soon, with
development that improved the efficiency of our
most of the growth coming in emerging nations. At the
factories, upgraded our system capabilities, supported
same time, countries such as China and India are starting
our production, developed new products and met
to eat more meat, which requires six times as much crop
emission requirements.
production as grain-based diets. In addition, the
expanding population is focused mainly in urban areas,
Already #1 in Brazil, AGCO is taking steps to secure its
where people tend to consume more calories.
future in China and other emerging regions such as
Unfortunately, the farmland available to meet these
the next decade. AGCO is also working to increase
massive food demands is limited. About 12.3-14.8 million
production capabilities in Russia over the next few years
acres are retired from agriculture every year due to
to further strengthen its position in these markets.
Africa, where the population is predicted to double over
infrastructure expansion, climate issues or other factors,
while biofuel production is increasingly competing for
limited acreage.
In the face of these factors, the AGCO global growth
strategy is four-pronged: develop new products, provide
advanced technology solutions, enhance our productivity
and grow in developing markets.
AGCO has a strong global presence and follows the
philosophy of manufacturing equipment where our
customers are located. With factories around the world
and 2,600 independent dealers and distributors in 140
countries, we are well positioned to help feed the world
by serving the leading and growing markets for farm
equipment.
2010 facts
// World population growth(1)
75.7 million people/year
// undernourished population(2)
915 million people
// biofuel consumption(3)
19.5 billion gallons/year
// global soil degradation(4)
12.3-14.8 million acres/year
food production will need to increase
70% to meet projected 2050 food
(1) Source: http://www.census.gov/ipc/www/popclockworld.html
demands.(2) global biofuel production is
(2) Source: Food and Agriculture Organisation of the UN (FAO)
projected to to reach 50.7 billion
(3) Source: http://www.afdc.energy.gov/afdc/data/fuels.html
(4) Source: http://www.wri.org/publication/content/8426
(5) Source: OECD, FAO Agricultural Outlook 2009-2018
gallons by 2018.(5)
29
32
6
4
3
8
2
1
5
7
9
10
22
23
27
20
19
18
17
21
25
24
26
29
30
31
28
“
12
11
14
13
15
16
78% of AGCO‘s business is done outside of North America.„
1. duluth, georgia, us
17. ennery, france
2. baltimore, maryland, us
18. beauvais, france
Our global manufacturing
corporate headquarters
3. batavia, illinois, us
19. desford, united Kingdom
4. jackson, minnesota, us
20. exeter, united Kingdom
light Assembly
manufacturing
5. fargo, north dakota, us
21. grubbenvorst, the netherlands
parts distribution
joint venture
licensee
6. tacoma, Washington, us
22. linnavuori, finland
7. beloit, Kansas, us
8. hesston, Kansas, us
9. houston, texas, us
10. Queretaro, mexico
11. jundiai, brazil
12. mogi das cruzes, brazil
13. santa Rosa, brazil
14. ibirubá, brazil
15. canoas, brazil
23. suolahti, finland
24. bäumenheim, germany
25. marktoberdorf, germany
26. breganze, italy
27. vladimir, Russia
28. chennai, india
29. daqing, china
30. changzhou, china
31. shanghai, china
16. haedo, Argentina
32. melbourne, Australia
30
AGCO // Annual Report 2010
COllAbOrAtinG
fOr suCCess
Agco Advanced technology solutions offers a
specialized automatic guidance system for the
sugarcane industry, developed in partnership with
the santa fé sugarcane mill in são paulo, brazil.
Through a unique collaboration with advanced
including providing technical support and operator
technology supplier Topcon we are delivering a robust
training. By late 2010, the mill was doing all of its
and reliable product to meet the sugarcane market’s
planning (previously done in the office) and planting
specific needs. The project began with the acquisition of
using the new solution. The system can also be
10 Valtra BH185 units, all
equipped with automatic
guidance, and focused on
developing a system to
reduce time, cost and labor
associated with the
production of sugarcane.
The resulting system
increases planting capacity
by optimizing rows and
“It is important to offer a
complete solution. Our
ability to act as a consultant
from planting through to
harvesting is what
differentiates us.”
transferred to other machines,
providing automatic guidance
for all operations (tillage,
planting, spraying and
harvesting). “It is important to
offer a complete solution. Our
ability to act as a consultant
from planting through to
harvesting is what
differentiates us,” explains
Torretta.
reducing fuel consumption. It also helps increase the
longevity of the sugarcane.
Partnering with a forward-thinking customer enabled
the team to work closely in an actual production
environment and make necessary adjustments to ensure
the new version of the System 150 automatic guidance
was a total success. “We wanted to offer a
comprehensive solution for mechanized production of
sugarcane and we found a good partner with interest in
investing in and adopting new technologies,” says Jak
Torretta, AGCO Products Director in South America.
“Santa Fé Sugarcane Mill became a strong ally in an
important step forward for agribusiness.”
AGCO, through its local Valtra dealer Comper Tratores,
actively participated in all stages of the introduction,
System 150 Automatic Guidance
31
inVestinG in future teChnOlOGies
Agco concentrates on devising practical, real-life solutions for improving farmer profitability.
three technologies have proven viable through testing on hundreds of acres.
Biogas engine
Revealed for the first time in Sweden in 2010, the Valtra N101 demonstration tractor uses
state-of-the-art technology that could provide environmental benefits and allow
renewable natural resources to be efficiently utilized. Without making any changes to the
original diesel engine, 70-80% of the power is generated by biogas.
The first test model of the 110 HP tractor has capacity for 170 liters of biogas, sufficient for
four to five hours of work. Both the diesel and gas injection systems have their own electronically
controlled common rails, allowing the ratio between diesel and biogas to be optimized.
Biomass harvesting
Our one-pass biomass harvesting system unites proven combine technology with AGCO’s
durable and reliable large square baler. The result is a timesaving system that requires just
one pass through the field for both grain and crop residue harvest.
This harvesting system efficiently harvests grain, while also collecting and packaging clean corn
cobs, husks and leaves. The result is a transportable, 3-foot-by-4-foot bale, up to eight feet
long, of cellulosic material used in the production of biomass energy. In addition, this technology
beats other collection options for delivering clean material in a dense, easy-to-transport form.
Electric wheel-drive
A prototype hybrid electric RoGator® 1386 high-clearance sprayer was unveiled at the AG
CONNECT Expo 2010. The first of its kind on this scale (330 kW), the experimental
concept sprayer attracted industry attention for achieving greater than 25% fuel savings,
superior torque and better all-around performance compared to a conventional model.
With its reduced carbon footprint, improved performance and anticipated lower downtime
and operating costs, the electric wheel-drive concept is proving AGCO’s commitment to
future technologies to improve agriculture efficiency and sustainability.
32
32
AGCO // Annual Report 2010
AGCO // Annual Report 2010
Martin Richenhagen on a recent trip in South America.
GrOwinG A better future
As corporate citizens of the world, we believe we can best
AGCO is driven to innovate and improve the performance
sustain the growth of our company through economic,
of our business through economic, environmental and
environmental and social programs linked to our business
social programs. Active 2010 initiatives included
values. We are committed to putting our best financial and
governance through accountability measures, risk and
non-financial resources together to make the most efficient
crisis readiness planning, and product innovation
and effective contribution to the global community. The
strategies including university research partnerships.
world population will be a third larger by 2050, so it is part
of AGCO’s long-term strategy to provide solutions to
We are living our vision of feeding the world while
sustainably grow and harvest enough food, fuel and fiber
building on our values of ethical standards, accountability,
for the expanding population.
integrity, respect and transparency.
Currently our sustainability efforts are focused in three
Our sustainability focus involves everyone connected to
primary areas: our operating communities, our employees,
AGCO, from our global executives to the individual
and the ecological impact of our processes and products.
farmers harvesting crops.
ouR com mi tment cAn b e se e n in n umeRous 2010 Activi ti es, in clu di ng :
Investment in biofuel alternatives for AGCO SISU POWER engines
Water conservation and energy efficiency improvements in our facilities
Emissions management tools
Employee development programs, including workplace health and safety
Giving of time, monies and products to our communities and areas in need
33
MeetinG h ArVestinG needs ACrOss
the GlObe
Agco delivers relevant technologies that fit farming conditions around the world. in china, a multi--
cultural, multi-functional Agco team is exploring adaptive harvesting solutions to address a wide
diversity of crops and geographies in this emerging market.
agricultural technology, including self-propelled combines.
The country produces an extremely wide variety of crops,
from flood-irrigated rice in the south to corn and wheat in
the north.
As it prepares for growth in the Chinese harvesting
market, AGCO organized equipment assessment
activities for combines and small balers at multiple
locations in 2010, including “voice of customer” reviews
with owners, operators and dealers at its Changzhou
facility. Two Class 4 Massey Ferguson combines were
In 2010, AGCO continued its tradition of helping improve
shipped to Heilongjiang for field operation tests and
global agriculture’s efficiency through the development
evaluation. In addition, a team of engineers and quality
and implementation of technologies that are relevant for
control specialists from Brazil and Italy traveled to China
different regions of the world. Since conventional farming
to share their expertise with the development team.
practices cannot produce
enough food to keep pace
with the world’s rapid
population growth,
technology improvements
that allow farmers to
produce higher yields while
minimizing input costs are
crucial. For example, many
AGCO advancements help
farming operations achieve
yield improvements using
modern, eco-friendly
fertilization and chemical
application practices.
China is one nation with
a growing need for new
Evaluation of existing global product platforms in strategic markets like China is key to AGCO’s role in
the rapid mechanization of developing countries.
34
34
AGCO // Annual Report 2010
AGCO // Annual Report 2010
bOArd Of direCtOrs And
seniOr MAnAGeMent
from left to right:
WolfgAng deml
former president and ceo
bayWa corporation
governance and succession
planning committees
heRmAn cAin
president and ceo
t.h.e. new voice inc.
compensation and succession
planning committees
luiz feRnAndo fuRlAn
co-chairman of the board
of bRf brasil foods, s. A.
Audit & governance committees
tom W. lAsoRdA
former vice chairman,
president and member of the
board of managers chrysler llc
Audit and compensation
committees
geRAld l. shAheen
former group president
caterpillar inc.
compensation executive and
succession planning committees
mARtin h. RichenhAgen
chairman, president and chief
executive officer, Agco
executive and succession
planning committees
p. geoRge benson
president, college of charleston
Audit, executive and governance
committees
geoRge e. minnich
former senior vice president
and cfo, itt corporation
Audit, compensation and
executive committees
hendRiKus visseR
chairman, Royal huisman
shipyards n.v.
Audit and governance
committees
cuRtis e. moll
chairman and ceo
mtd holdings, inc.
Audit and compensation
committees
geRAld b. johAnneson
former president and ceo
haworth, inc.
executive, governance and
succession planning
committees
35
35
from left to right:
AndRé m. cARiobA
senior vice president
general manager,
south America
AndReW h. becK
senior vice president
chief financial officer
gARy l. collAR
senior vice president
general manager,
europe/Africa/middle east;
Australia, new zealand
debRA e. KupeR
vice president
general counsel and
corporate secretary
RAndAll g. hoffmAn
senior vice president
global sales, marketing
and product management
hAns-beRnd veltmAAt
senior vice president
manufacturing and Quality
hubeRtus m. mühlhäuseR
senior vice president
strategy & integration
general manager,
eastern europe and Asia
dAvid l. cAplAn
senior vice president
materials management,
Worldwide
gARRy l. bAll
senior vice president
engineering
RobeRt b. cRAin
senior vice president
general manager,
north America
lucindA b. smith
senior vice president
human Resources
36
AGCO // Annual Report 2010
fOrwArd lOOkinG stAteMents
This annual report includes forward-looking statements,
The collectability of receivables that are created from our
including the statements in the Chairman’s Message and
sales, as well as from financing obtained by our customers
other statements herein regarding market demand, grain
through our retail financing joint ventures, is critical to our
inventories, crop yields, farm incomes and productivity,
business.
margin expansion, financial position, and the effects of
operational changes and strategic investments. These
We depend on suppliers for raw materials, components
statements are subject to risk that could cause actual
and parts for our products, and any failure by our suppliers
results to differ materially from those suggested by the
to provide products as needed, or by us to promptly
statements, including:
address supplier issues, will adversely impact our ability to
timely and efficiently manufacture and sell products.
Our financial results depend entirely upon the agricultural
industry, and factors that adversely affect the agricultural
A majority of our sales and manufacturing take place
industry generally, including declines in the general
outside of the United States, and, as a result, we are
economy, increases in farm input costs, lower commodity
exposed to risks related to foreign laws, taxes, economic
prices and changes in the availability of credit for our
conditions, labor supply and relations, political conditions
retail customers, will adversely affect us.
and governmental policies. These risks may delay or reduce
our realization of value from our international operations.
The poor performance of the general economy has
adversely impacted our sales and may continue to have an
Volatility with respect to currency exchange rates and
adverse impact on our sales in the future, the extent of
interest rates can adversely affect our reported results of
which we are unable to predict, and there can be no
operations and the competitiveness of our products.
assurance that our results will not continue to be affected
by the weakness in global economic conditions.
We are subject to extensive environmental laws and
regulations, and our compliance with, or our failure to
Our success depends on the introduction of new
comply with, existing or future laws and regulations could
products, which require substantial expenditures and may
delay production of our products or otherwise adversely
not be well received in the market place.
affect our business.
We face significant competition and, if we are unable to
We have significant pension obligations with respect to our
compete successfully against other agricultural equipment
employees, and our available cash flow may be adversely
manufacturers, we would lose customers and our
affected in the event that payments became due under any
revenues and profitability would decline.
pension plans that are unfunded or underfunded. Declines
Most of our sales depend on the retail customers’
obligations result in increased pension expense in future
in the market value of the securities used to fund these
obtaining financing, and any disruption in their ability to
periods.
obtain financing, whether due to the current economic
downturn or otherwise, will result in the sale of fewer
We are subject to raw material price fluctuations, which
products by us. A large portion of the retail sales of our
can adversely affect our manufacturing costs.
products are financed by our retail finance joint ventures
with Rabobank, and any difficulty on Rabobank’s part to
In connection with our outstanding indebtedness, we are
fund the venture would adversely impact sales if our
subject to certain restrictive covenants and payment
customers would be required to utilize other retail
obligations that may adversely affect our ability to operate
financing providers.
and expand our business.
37
se le ct ed finAn ciAl infoRmA tio n
(in millions, except percentages, per share amounts and employees)
Years Ended December 31,
2010
2009(1)
2008(1)
2007(1)
2006(1)
opeRAting Results
Net sales
Gross profit
Percent of net sales
Income from operations
Percent of net sales
$
6,896.6
$
6,516.4
$
8,273.1
$
6,715.9
$
5,335.4
1,258.7
18.3%
324.2
4.7%
1,071.9
16.4%
218.7
3.4%
1,498.4
18.1%
563.7
6.8%
1,189.7
17.7%
393.7
5.9%
927.2
17.4%
68.2
1.3%
Net income (loss) attributable to AGCO Corporation
and subsidiaries
220.5
135.7
385.9
232.9
(71.4)
Net income (loss) per common share – diluted(2)
$
2.29
$
1.44
$
3.95
$
2.41
$
(0.79)
Weighted average shares outstanding – diluted
96.4
94.1
97.7
96.6
90.8
bAlAnce sheet dA tA
Working capital
Total assets
Long-term debt, less current portion
Total liabilities
Stockholders’ equity
otheR dA tA
$
1,208.1
$
1,079.6
$
1,037.4
$
724.8
$
735.3
5,436.9
4,998.9
4,846.6
4,698.0
4,046.5
443.0
2,777.7
2,659.2
454.0
2,596.2
2,394.4
625.0
2,832.3
2,014.3
294.1
2,583.9
2,114.1
523.1
2,489.1
1,557.4
Number of employees
14,311
14,456
15,606
13,720
12,804
(1) Operating results and balance sheet data presented above have been retroactively restated for the years ended December 31, 2009,
2008, 2007 and 2006 to reflect the deconsolidation of our GIMA joint venture. Refer to our audited Consolidated Financial Statements
and the accompanying Notes to Consolidated Financial Statements, which are included in our Annual Report on Form 10-K.
(2) The Company makes reference to adjusted earnings per share, as reconciled below:
2010
2009(1)
2008(1)
2007(1)
2006(1)
Net income (loss) per common share – diluted
$
2.29
$
1.44
$
3.95
$
2.41
$
(0.79)
Restructuring and other infrequent expenses (income)(3)
Goodwill impairment charge(3)
Weighted average share impact
0.03
—
—
0.11
—
—
—
—
—
(0.03)
—
—
Net income per common share – adjusted
$
2.32
$
1.55
$
3.95
$
2.38
$
0.01
1.81
0.01
1.04
(3) After tax.
38
AGCO // Annual Report 2010
con s oli dA te d st Ate ments of opeRA tions
(in millions, except per share amounts)
Years Ended December 31,
2010
2009
2008
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Engineering expenses
Restructuring and other infrequent expenses
Amortization of intangibles
Income from operations
Interest expense, net
Other expense, net
Income before income taxes and equity in net earnings of affiliates
Income tax provision
Income before equity in net earnings of affiliates
Equity in net earnings of affiliates
Net income
Net loss attributable to noncontrolling interest
Net income attributable to AGCO Corporation and subsidiaries
Net income per common share attributable to AGCO Corporation and subsidiaries:
Basic
Diluted
Weighted average number of common and common equivalent shares outstanding:
Basic
Diluted
$
6,896.6
$
6,516.4
$
8,273.1
5,637.9
1,258.7
5,444.5
1,071.9
6,774.7
1,498.4
692.1
219.6
4.4
18.4
324.2
33.3
16.0
274.9
104.4
170.5
49.7
220.2
0.3
630.1
191.9
13.2
18.0
218.7
42.1
22.2
154.4
57.7
96.7
38.7
135.4
0.3
720.9
194.5
0.2
19.1
563.7
32.1
20.1
511.5
164.4
347.1
38.8
385.9
—
$
$
$
220.5
$
135.7
$
385.9
2.38
2.29
$
$
1.47
1.44
$
$
92.8
96.4
92.2
94.1
4.21
3.95
91.7
97.7
The Consolidated Statements of Operations should be read in conjunction with the Company’s Management’s Discussion and Analysis of
Financial Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes
to Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K.
co nso li dA ted b AlAnce sheets
(in millions, except share amounts)
December 31,
Assets
Current Assets:
Cash and cash equivalents
Accounts and notes receivable, net
Inventories, net
Deferred tax assets
Other current assets
Total current assets
Property, plant and equipment, net
Investment in affiliates
Deferred tax assets
Other assets
Intangible assets, net
Goodwill
Total assets
liAbilities And stocKholdeRs’ eQuity
Current Liabilities:
Current portion of long-term debt
Convertible senior subordinated notes
Securitization facilities
Accounts payable
Accrued expenses
Other current liabilities
Total current liabilities
Long-term debt, less current portion
Pensions and postretirement health care benefits
Deferred tax liabilities
Other noncurrent liabilities
Total liabilities
tempoRARy eQuity
39
2010
2009
$
719.9
$
908.5
1,233.5
52.6
206.5
651.4
725.2
1,156.7
63.6
151.6
3,121.0
2,748.5
924.8
398.0
58.0
130.8
171.6
632.7
910.0
353.9
70.0
115.7
166.8
634.0
$
5,436.9
$
4,998.9
$
0.1
$
161.0
113.9
682.6
883.1
72.2
0.1
193.0
—
621.6
808.7
45.5
1,912.9
1,668.9
443.0
226.5
103.9
91.4
454.0
276.6
118.7
78.0
2,777.7
2,596.2
Equity component of redeemable convertible senior subordinated notes
—
8.3
stocKholdeRs’ eQuity
AGCO Corporation stockholders’ equity:
Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding
in 2010 and 2009
Common stock; $0.01 par value, 150,000,000 shares authorized, 93,143,542 and 92,453,665 shares issued
and outstanding at December 31, 2010 and 2009, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total AGCO Corporation stockholders’ equity
Noncontrolling interest
Total stockholders’ equity
—
0.9
1,051.3
1,738.3
(132.1)
2,658.4
0.8
2,659.2
—
0.9
1,061.9
1,517.8
(187.4)
2,393.2
1.2
2,394.4
Total liabilities, temporary equity and stockholders’ equity
$
5,436.9
$
4,998.9
The Consolidated Balance Sheets should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial
Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to
Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K.
40
AGCO // Annual Report 2010
con s oli dA te d st Ate ments of stocKholdeRs’ eQuity
(in millions, except share amounts)
common stocK
AccumulAted otheR compRehensive income (loss)
Balance, December 31, 2007
Adjustment for GIMA deconsolidation
Adjusted balance, January 1, 2008
Net income
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Defined benefit pension plans, net of taxes:
Prior service cost arising during year
Net actuarial loss arising during year
Amortization of net actuarial losses included in net periodic pension cost
Effects of changing pension plan measurement date:
Service cost, interest cost and expected return on plan assets for October 1 – December 31, 2007
Amortization of net actuarial losses for October 1 – December 31, 2007
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Change in cumulative translation adjustment
Balance, December 31, 2008
Net income (loss)
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Investments by noncontrolling interest
Defined benefit pension plans, net of taxes:
Net actuarial loss arising during year
Amortization of net actuarial losses included in net periodic pension cost
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Reclassification to temporary equity –
Equity component of convertible senior subordinated notes
Change in cumulative translation adjustment
Balance, December 31, 2009
Net income (loss)
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Conversion of 1¾% convertible senior subordinated notes
Repurchase of 1¾% convertible senior subordinated notes
Defined benefit pension plans, net of taxes:
Prior service cost arising during year
Net actuarial gain arising during year
Amortization of prior service cost included in net periodic pension cost
Amortization of net actuarial losses included in net periodic pension cost
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Reclassification to temporary equity –
Equity component of convertible senior subordinated notes
Change in cumulative translation adjustment
Balance, December 31, 2010
shARes
Amount
91,609,895
$
—
91,609,895
—
136,457
62,387
35,454
—
—
—
—
—
—
—
—
—
0.9
—
0.9
—
—
—
—
—
—
—
—
—
—
—
—
—
AdditionAl
pAid-in cApitAl
$
1,036.9
—
1,036.9
—
1.6
(2.6)
(0.3)
31.8
—
—
—
—
—
—
—
—
91,844,193
0.9
1,067.4
—
26,388
581,393
1,691
—
—
—
—
—
—
—
—
92,453,665
—
17,303
555,262
56,326
—
60,986
—
—
—
—
—
—
—
—
—
93,143,542
$
—
—
—
—
—
—
—
—
—
—
—
—
0.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.9
—
0.6
(5.2)
—
7.4
—
—
—
—
—
(8.3)
—
1,061.9
—
0.7
(11.2)
—
12.7
—
(21.1)
—
—
—
—
—
—
8.3
—
$
1,051.3
$
1,738.3
$
(179.1)
$
$
(1.4)
$
(132.1)
$
0.8
$
2,659.2
$
275.8
$
The Consolidated Statements of Stockholders’ Equity should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial
Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial
Statements, which are included in the Company’s Annual Report on Form 10-K.
RetAined
eARnings
defined
benefit
pension plAns
cumulAtive
tRAnslAtion
Adjustment
defeRRed
gAins (losses)
on deRivAtives
compRehensive
noncontRolling
stocKholdeRs‘
coRpoRA tion
noncontRolling
income (loss)
inteRests
eQuity
And subsidiARies
inteRest
AccumulAted
otheR
compRehensive
(loss) income
AttRibutAble
compRehensive
loss
totAl
to Agco
AttRibutAble to
$
997.3
$
(86.8)
$
160.5
$
$
79.0
$
6.0
$
2,120.1
—
997.3
385.9
(86.8)
160.5
(6.0)
(6.0)
2,114.1
385.9
$
385.9
$
—
(0.2)
(0.9)
1,382.1
135.7
(138.1)
(418.4)
(257.9)
(208.3)
282.9
25.0
1,517.8
220.5
(0.2)
(57.6)
5.6
—
—
—
—
—
—
—
0.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(75.6)
5.4
—
—
(2.8)
23.5
1.8
6.7
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
23.4
48.4
(44.4)
(1.0)
(40.1)
35.4
0.6
(4.1)
5.3
—
5.3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2.5
0.2
—
—
—
79.0
—
—
—
—
—
(0.2)
(57.6)
5.6
—
0.9
(44.4)
(1.0)
(418.4)
(436.1)
(75.6)
5.4
35.4
0.6
282.9
(187.4)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2.8)
23.5
1.8
6.7
2.5
0.2
—
23.4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.3)
1.3
—
0.2
1.2
(0.3)
(0.1)
1.6
(2.6)
(0.3)
31.8
(0.2)
(57.6)
5.6
(0.2)
—
(44.4)
(1.0)
0.6
(5.2)
—
7.4
1.3
(75.6)
5.4
35.4
0.6
(418.4)
2,014.3
135.4
(8.3)
283.1
2,394.4
220.2
0.7
(11.2)
—
12.7
—
(21.1)
(2.8)
23.5
1.8
6.7
2.5
0.2
8.3
23.3
(0.2)
(57.6)
5.6
0.9
(44.4)
(1.0)
(418.4)
(129.2)
135.7
(75.6)
5.4
35.4
0.6
282.9
384.4
220.5
(2.8)
23.5
1.8
6.7
2.5
0.2
23.4
—
—
(0.3)
0.2
(0.1)
(0.3)
(0.1)
(0.4)
common stocK
AccumulAted otheR compRehensive income (loss)
RetAined
eARnings
defined
benefit
pension plAns
cumulAtive
tRAnslAtion
Adjustment
defeRRed
gAins (losses)
on deRivAtives
$
997.3
$
(86.8)
$
160.5
$
AccumulAted
otheR
compRehensive
income (loss)
noncontRolling
inteRests
totAl
stocKholdeRs‘
eQuity
$
79.0
$
6.0
$
2,120.1
—
(86.8)
—
160.5
(6.0)
2,114.1
385.9
$
385.9
$
—
41
compRehensive
(loss) income
AttRibutAble
to Agco
coRpoRA tion
And subsidiARies
compRehensive
loss
AttRibutAble to
noncontRolling
inteRest
Amortization of net actuarial losses included in net periodic pension cost
Effects of changing pension plan measurement date:
Service cost, interest cost and expected return on plan assets for October 1 – December 31, 2007
Amortization of net actuarial losses for October 1 – December 31, 2007
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Change in cumulative translation adjustment
91,844,193
0.9
1,067.4
Balance, December 31, 2007
Adjustment for GIMA deconsolidation
Adjusted balance, January 1, 2008
Net income
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Defined benefit pension plans, net of taxes:
Prior service cost arising during year
Net actuarial loss arising during year
Balance, December 31, 2008
Net income (loss)
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Investments by noncontrolling interest
Defined benefit pension plans, net of taxes:
Net actuarial loss arising during year
Amortization of net actuarial losses included in net periodic pension cost
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Reclassification to temporary equity –
Equity component of convertible senior subordinated notes
Change in cumulative translation adjustment
Balance, December 31, 2009
Net income (loss)
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Conversion of 1¾% convertible senior subordinated notes
Repurchase of 1¾% convertible senior subordinated notes
Defined benefit pension plans, net of taxes:
Prior service cost arising during year
Net actuarial gain arising during year
Amortization of prior service cost included in net periodic pension cost
Amortization of net actuarial losses included in net periodic pension cost
Deferred gains and losses on derivatives, net
Deferred gains and losses on derivatives held by affiliates, net
Reclassification to temporary equity –
Equity component of convertible senior subordinated notes
Change in cumulative translation adjustment
Balance, December 31, 2010
shARes
Amount
pAid-in cApitAl
91,609,895
$
$
1,036.9
AdditionAl
91,609,895
136,457
62,387
35,454
26,388
581,393
1,691
92,453,665
17,303
555,262
56,326
60,986
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.9
—
0.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.9
—
—
0.9
1,036.9
—
—
1.6
(2.6)
(0.3)
31.8
—
—
—
—
—
—
—
—
—
0.6
(5.2)
—
7.4
—
—
—
—
—
(8.3)
—
1,061.9
—
0.7
(11.2)
—
12.7
—
(21.1)
—
—
—
—
—
—
8.3
—
—
997.3
385.9
—
—
—
—
—
—
—
(0.2)
(0.9)
—
—
—
1,382.1
135.7
—
—
—
—
—
—
—
—
—
—
—
1,517.8
220.5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.2)
(57.6)
5.6
—
0.9
—
—
—
(138.1)
—
—
—
—
—
—
(75.6)
5.4
—
—
—
—
(208.3)
—
—
—
—
—
—
—
(2.8)
23.5
1.8
6.7
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(418.4)
(257.9)
—
—
—
—
—
—
—
—
—
—
—
282.9
25.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
23.4
48.4
5.3
—
5.3
—
—
—
—
—
—
—
—
—
—
(44.4)
(1.0)
—
(40.1)
—
—
—
—
—
—
—
—
35.4
0.6
—
—
(4.1)
—
—
—
—
—
—
—
—
—
—
—
2.5
0.2
—
—
—
79.0
—
—
—
—
—
(0.2)
(57.6)
5.6
—
0.9
(44.4)
(1.0)
(418.4)
(436.1)
—
—
—
—
—
—
(75.6)
5.4
35.4
0.6
—
282.9
(187.4)
—
—
—
—
—
—
—
(2.8)
23.5
1.8
6.7
2.5
0.2
—
23.4
(6.0)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.3)
—
—
—
—
1.3
—
—
—
—
—
0.2
1.2
(0.3)
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.1)
1.6
(2.6)
(0.3)
31.8
(0.2)
(57.6)
5.6
(0.2)
—
(44.4)
(1.0)
(418.4)
2,014.3
135.4
0.6
(5.2)
—
7.4
1.3
(75.6)
5.4
35.4
0.6
(8.3)
283.1
2,394.4
220.2
0.7
(11.2)
—
12.7
—
(21.1)
(2.8)
23.5
1.8
6.7
2.5
0.2
8.3
23.3
(0.2)
(57.6)
5.6
0.9
(44.4)
(1.0)
(418.4)
(129.2)
135.7
(75.6)
5.4
35.4
0.6
282.9
384.4
220.5
(2.8)
23.5
1.8
6.7
2.5
0.2
23.4
—
—
(0.3)
0.2
(0.1)
(0.3)
(0.1)
(0.4)
93,143,542
$
$
1,051.3
$
1,738.3
$
(179.1)
$
$
(1.4)
$
(132.1)
$
0.8
$
2,659.2
$
275.8
$
The Consolidated Statements of Stockholders’ Equity should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial
Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial
Statements, which are included in the Company’s Annual Report on Form 10-K.
42
AGCO // Annual Report 2010
con s oli dA te d st Ate ments of cAsh floWs
(in millions)
Years Ended December 31,
Cash flows from operating activities:
Net income
2010
2009
2008
$
220.2
$
135.4
$
385.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
Deferred debt issuance cost amortization
Amortization of intangibles
Amortization of debt discount
Stock compensation
Equity in net earnings of affiliates, net of cash received
Deferred income tax provision (benefit)
Loss (gain) on sale of property, plant and equipment
Changes in operating assets and liabilities, net of effects from purchase of businesses:
Accounts and notes receivable, net
Inventories, net
Other current and noncurrent assets
Accounts payable
Accrued expenses
Other current and noncurrent liabilities
Total adjustments
Net cash provided by operating activities
Cash flows from investing activities:
135.9
2.9
18.4
15.3
13.4
(14.8)
2.9
0.1
(21.2)
(60.6)
(92.8)
70.6
114.9
33.5
218.5
438.7
118.8
2.8
18.0
15.0
8.0
(21.0)
(21.9)
1.4
241.2
277.1
40.8
(380.3)
(68.1)
(19.3)
212.5
347.9
116.1
3.2
19.1
14.1
33.3
(11.0)
7.3
(0.1)
(194.5)
(366.4)
(81.6)
266.5
113.3
(26.9)
(107.6)
278.3
Purchases of property, plant and equipment
(167.1)
(206.6)
(236.8)
Proceeds from sale of property, plant and equipment
(Purchase) sale of businesses, net of cash acquired
Investments in unconsolidated affiliates, net
Restricted cash and other
Net cash used in investing activities
Cash flows from financing activities:
Repurchase or conversion of convertible senior subordinated notes
Proceeds from debt obligations
Repayments of debt obligations
Proceeds from issuance of common stock
Payment of minimum tax withholdings on stock compensation
Payment of debt issuance costs
Investments by noncontrolling interest
Net cash (used in) provided by financing activities
Effects of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
0.9
(81.5)
(25.4)
—
(273.1)
(60.8)
71.4
(109.2)
0.5
(11.3)
—
—
(109.4)
12.3
68.5
651.4
2.1
0.5
(17.6)
37.1
(184.5)
—
282.3
(343.2)
—
(5.2)
(0.1)
1.3
(64.9)
46.8
145.3
506.1
$
719.9
$
651.4
$
4.5
—
(0.6)
(32.5)
(265.4)
—
75.8
(37.2)
0.3
(3.2)
(1.4)
—
34.3
(115.9)
(68.7)
574.8
506.1
The Consolidated Statements of Cash Flows should be read in conjunction with the Company’s Management’s Discussion and Analysis of
Financial Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to
Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K.
43
corporate headquarters
form 10-K
4205 River Green Parkway
Duluth, Georgia 30096 US
770-813-9200
The Form 10-K annual report to the Securities and Exchange Commission is available
on our corporate web site (www.AGCOcorp.com), under “Investors,” or upon
request from the Investor Relations Department at corporate headquarters.
transfer Agent & Registrar
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021 US
stock exchange
AGCO Corporation common stock
(trading symbol is “AGCO”) is traded
on the New York Stock Exchange.
independent Registered
Printed on FSC certified paper
utilizing soy base inks.
Annual meeting
The annual meeting of the Company’s stockholders will be held at 9:00 a.m. ET,
on April 21, 2011 at the offices of AGCO Corporation, 4205 River Green Parkway,
Duluth, Georgia 30096 US.
public Accounting firm
credits
KPMG LLP
Atlanta, Georgia US
Upper photo on page 14 “Kevin Bien” by Willie Vogt, Farm Progress
© 2011 AGCO Corporation
All Rights Reserved. Incorporated in Delaware. An Equal Opportunity Employer.
AGCO®, Fendt®, Massey Ferguson®, Valtra® and their respective logos as well as corporate and product identity used herein
are trademarks of AGCO or its subsidiaries and may not be used without permission. Challenger® is a registered trademark of
Caterpillar, Inc. and may not be used without permission.
compARison of cumulAtive totAl RetuRn
US$
450
400
350
300
250
200
150
100
50
AGCO Corporation
Custom Peer Group
S&P MidCap Index
2005
2006
2007
2008
2009
2010
The graph shown (above) is a line graph presentation of the Company’s cumulative stockholder returns on an indexed basis as
compared to the S&P Mid-Cap 400 Index and a self-constructed peer group of the companies listed in footnote 1 to the
performance graph (“Peer Group”). Returns for the Company in the graph are not necessarily indicative of future performance.
Assumes $100 invested on January 1, 2006. Assumes dividend reinvested. Fiscal year ending December 31, 2010.
(1) Based on information for a self-constructed peer group of companies which includes the following: Caterpillar Inc., CNH Global NV, Cummins Inc., Deere & Company,
Eaton Corporation, Ingersoll-Rand Company, Navistar International Corporation, PACCAR Inc, Parker-Hannifin Corporation and Terex Corporation.
44
AGCO // Annual Report 2010
Corporate Headquarters
4205 River Green Parkway
Duluth, Georgia 30096 US