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Farmers have been
producing Food For
thousands oF years. With
rising populations expected
over the next Four decades,
they Face their biggest
challenge yet.
”
annual
annual
report
report
2011
2011
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investing in solutions
agco at a glance
SaleS by GeoGraphic reGion
North America
South America
EAME
Rest of World
20%
21%
54%
5%
SaleS by product
Tractors 66%
Parts 15%
Combines
7%
Application Equipment
5%
Implements and Other
4%
Hay and forage
3%
adjuSted earninGS per Share
2011 $4.48
2010 $2.32
2009 $1.55
agco’s global presence
Corporate Headquarters
Regional Headquarters
Manufacturing
Light Assembly
Parts Distribution
Joint Venture
Licensee
Sales
Administrative Office
aGco is a global leader in the design, manufacture
and distribution of agricultural machinery.
Through our core brands, Challenger®, Fendt®, Massey Ferguson®
and Valtra®, as well as the GSI family of brands, our products include
tractors, harvesting machinery, application machines, implements for
tillage, sowing and planting, grain storage and protein production
equipment. These products are manufactured worldwide and
supported by a network of over 3,100 dealers.
Led by innovative technology and underpinned by a huge breadth
of practical experience and know-how, our agricultural equipment
and support services are providing farmers with solutions to
tackle the enormous challenges of escalating global demand for
food, fuel and fiber.
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chairman’s message
Fellow Shareholders:
I am pleased to report that 2011 was a year of exceptional
performance for AGCO. The Company delivered record sales
and earnings, introduced significant innovations across our
product portfolio and made key investments that position
the Company for future growth. Looking into the future,
the opportunities that exist for the global agricultural
equipment industry and our Company are significant. The
growing population, increasing demand for food, improved
diets and rising requirements for energy worldwide will
continue to support healthy long-term fundamentals for
the agricultural industry. As farmers seek to meet growing
food demands and to offset higher production costs, the
rate of investment in farm equipment is increasing, offering
significant opportunities. We are working hard to ensure
that AGCO remains well-positioned to take advantage of
these global trends.
Financial results
AGCO’s sales reached $8.8 billion in 2011, growing over
27% compared to 2010. Adjusted earnings per share grew
more than 93% to $4.48. The strength of our end markets
continued to generate very positive results. Recovery in
Western Europe produced sales of nearly $4.7 billion
in our Europe/Africa/Middle East region, and operating
margins rebounded to 10.2%. Sales growth of 19% and
the positive impact of cost reduction initiatives helped our
North American segment improve operating margins by
nearly two percentage points. In South America, positive
farm fundamentals produced strong industry demand in
Brazil and generated record AGCO sales of nearly $1.9
billion. Overall, we achieved record earnings while making
significant investments in research and development and
other productivity initiatives.
delivering what farmers want
The innovation, quality and performance of our products
are instrumental to AGCO’s vision of providing high-tech
solutions to professional farmers. In 2011 we continued to
refresh our full line of equipment with a focus on the high
horsepower range as well as new products which expand
our current product offering. In Brazil, we are introducing
more technology and localizing complimentary products. A
good example is the introduction of localized sprayers for
our row crop customers. In Europe and North America, we
introduced a number of high technology tractor products
like the Fendt 700 Vario and the Challenger MT 600 both
equipped with SCR engine technology. These new tractor
models deliver better fuel economy for our customers and
cleaner exhaust for a healthier environment.
AGCO has consistently invested in its tractor products and
distribution and is a global leader in tractor sales. We have
a significant opportunity to leverage our strong brands
with new and improved harvesting products and improved
distribution capabilities. In 2011, we acquired the remaining
50% of the Laverda S.p.A combine harvester business based
in Breganze, Italy. Our new Massey Ferguson and Fendt high
performance Class 8 combines went into production at the
Breganze factory in 2011, and both have enjoyed market
success in their first season.
The latter part of 2011 also brought the introduction of
AGCO’s first self-propelled forage harvester, the Fendt
Katana. Aimed at professional farmers who are already loyal
to the Fendt brand, it is expected that the Katana will open
sales opportunities both in the feed and silage sector and in
harvesting biomass crops.
Numerous industry awards from around the globe served as
recognition that we are producing leading-edge machinery
to meet farmers’ needs. These awards included Gold and
Silver medals and the Machine of the Year 2012 Award for
Massey Ferguson and Fendt at the Agritechnica Farm Show
in Germany; a gold medal at the Polagra 2012 in Poland for
Fendt; 2012 Finovation awards from the American Society
of Agricultural and Biological Engineers for our windrowers,
planters, sprayers and combines; and the 2011 Fenabrave
“Most Desired Brand” award for Massey Ferguson in
Brazil. Our increased investment in research, design and
engineering will continue to ensure we stay at the forefront
of farm equipment development.
investing in our business
We are optimistic about the outlook for our industry and are
making investments to ensure AGCO is prepared to meet the
future demand for our products. Our $220 million multi-year
investment plan at the Marktoberdorf plant in Germany,
where we produce Fendt tractors and CVT transmissions,
will be completed in the summer of 2012. Production
capacity will increase and efficiency improvements will be
possible thanks to improved technology and production
flow at the facility. We are improving the performance of
our products and lowering their fuel consumption by
utilizing more AGCO produced engines in our equipment.
More than half of the tractors, combines, and sprayers we
manufactured in 2011 were equipped with AGCO engines,
twice the penetration rate compared to 2004.
extending aGco’s reach
In November, we completed the acquisition of GSI, a leading
global manufacturer of grain storage and protein production
systems. GSI is a strong, profitable, well-managed company
with great brands, global reach and technology leadership. It
manufactures complete grain storage and handling solutions
for both farmers and large-scale grain processors. GSI’s protein
production product line supports both swine and poultry growers,
including feeders, nesting, and climate control systems. With
global protein consumption on the rise due to changing diets in
emerging markets, demand for both grain storage and swine and
poultry production is set to increase substantially. As emerging
markets adopt more sophisticated levels of technology, the
requirement for GSI products should continue to grow.
“
We are optimistic about
the outlook For our
industry and are making
investments to ensure
agco is prepared to
meet the Future demand
For our products.
”
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chairman’s message
emerging markets
Russia and the CIS continue to have significant growth
prospects. There is an immense amount of farmland
in Russia, Ukraine and Kazakhstan being farmed with
inefficient machinery. The investment in farm equipment
dropped to very low levels over the last 15 years and
crop yields in this region have suffered. We are expanding
our distribution in the CIS region and establishing local
manufacturing capabilities to take advantage of the
growth opportunities in these markets.
China is one of the world’s largest markets for small and
mid-size low specification agricultural tractors. Economic
progress in the region is driving more mechanization
to farms. Over the next few years, we plan to invest in
production facilities in China. These will serve both domestic
and export markets with fully assembled tractors as well
as drivelines and engines for assembly in other locations.
Strategic investment throughout Africa will place AGCO’s key
brands at the heart of a continent on the cusp of the next
green revolution. The strengthening of dealer networks and
training facilities throughout the continent will enable AGCO
to further establish our products throughout the region.
a Strong and Sustainable outlook
Farmers have been producing food for thousands of years.
With rising populations expected over the next four decades,
they face their biggest challenge yet. The United Nations’
studies suggest that by 2050 global food production will
have to increase by 70%. To boost global food supply,
production efficiency is being improved thanks to more
accurate use of fertilizers, new seed technology and
advancing mechanization. Farm equipment will be one of
the key factors in increasing farm productivity in the years to
come. AGCO has a powerful global platform to capitalize on
a strengthening demand for agricultural equipment.
The achievement of long-term economic, social and
environmental sustainability goes hand-in-hand with
our mission to provide high-tech solutions for professional
farmers feeding the world. We aim to promote excellence
in our employees through engagement, training and
development. We strive to promote good citizenship
and strong ethics, while keeping our employees’
needs paramount.
Our customers remain central to what we do, with their
profitability the key driving force behind the demand for our
products. We would like to thank them for their continued brand
loyalty and wish them every success for 2012. I would also like
to extend my personal thanks to our employees and dealers for
their ongoing dedication and for the critically important role they
continue to play in accomplishing AGCO’s outstanding results.
Lastly, I thank my fellow shareholders for your continued
confidence and support. 2012 is expected to be another year
of strong performance and we will build on the successful
foundations put in place over the past several years. With healthy
farm economics, record results and strategic investments to
strengthen our long-term growth, it is truly an exciting time to
be part of AGCO.
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Martin richenhagen
chairman, president and chief executive officer
investing in solutions
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We know agricultureWe support your farmWe help feed the world
population growth
CHANGING DIETS IN ASIA
greater need for precision in agricultural production
increasing demand for biofuel
and alternative energies
MORE FOOD FROM LESS LAND
increased demand to provide traceability
increasing water consumption
agco’s role
in a challenging world
Population growth is set to be one of the
defining issues of the 21st century. From
today’s 7 billion, the global total is forecast
to soar to more than 9 billion people by 2050.
Over the next 40 years, agricultural production
and yields will need to increase substantially.
Food security is at the top of government
agendas around the world.
diets are shifting towards more protein and vegetable
consumption, while there is an increase in the use of
crops for fuel. constraints on land and water resources,
changes in weather patterns plus the all-important
need to develop strategies for more sustainable food
production all add to the challenges. at the same
time, concerns regarding the environment are driving
legislation in areas like exhaust emissions and the use
of agricultural inputs such as chemicals and fertilizer.
aGco’s strategy, utilizing leading multi-brand,
multi-cultural resources, places us in a strong position
to provide forward-looking solutions in every region
of the world.
Annual Report 2011
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08
limited landCHANGING CLIMATES
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investing in solutions
agco is a global leader
in enhancing the
efficiency of farmers
around the world.
WWW.agcocorp.com
We know agriculture.
as the world’s largest manufacturer purely focused on agriculture,
aGco is uniquely positioned to deliver high-tech solutions to
increase farm productivity.
We support your farm.
We meet individual farming needs – from the most demanding
challenges to everyday tasks – by leveraging our multiple brands
and customer-focused services.
We help feed the world.
around the world, we supply professional farmers with the tools
necessary to maximize crop yield and meet growing food demands.
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We know agricultureWe support your farmWe help feed the world
investing in
sustainability
Our approach to long-term economic, social and
environmental sustainability is aligned with our vision
to provide high-tech solutions for professional farmers
feeding the world. AGCO aims to promote sustainable
and profitable growth through superior customer
service, innovation, quality and commitment.
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As a pure-play agricultural solutions provider, AGCO
is uniquely positioned to facilitate sustainable practices
along two very different value chains.
Through the Manufacturing Value Chain process, we
strive to manage global resource requirements in
the design, production and supply of our products.
Downstream, we assist the Agricultural Product Value
Chain by enabling better management of land, water,
energy and labor resources.
AGCO’s Sustainability Strategy, developed in 2011
with the support of leading independent sustainability
consultants, provides a roadmap in four key areas:
OPerATiOnS
We will systematically and continuously improve
efficiency, reduce waste and build a healthy,
productive workforce.
CuSTOMerS
We will provide the products and solutions our
customers need to prosper over the long term.
SuPPlierS
We will foster high performance in quality, ethics
and environmental standards among suppliers.
COMMuniTieS
We will help create prosperous communities where
we and our customers operate.
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Farmers have a crucial job, and AGCO is supplying
the tools to help them do it. This includes all of the
support they require to keep operating no matter
what conditions they face.
providing
solutions
to our
customers
From small family farms to large-scale agribusinesses
harvesting many thousands of acres, we deliver on
our promise as “Your Agriculture Company”.
The AGCO full-service experience:
•
Innovative technology
• Reliable, high-output, high-productivity machines
• World-class parts supply
• Highly responsive technical service support
•
Financial solutions through AGCO Finance
• Knowledgeable, practical advice
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Smart Machinery, Serious Results
especially for large-scale agribusinesses
that thrive on competition and growth,
challenger is the high-capacity, rugged
and powerful agricultural machinery that
always delivers unmatched productivity
and efficiency. challenger delivers smart
technology and unsurpassed up-time
support critical to running an agribusiness.
Challenger in 2011
• Steady growth since 2002 within our global
challenger network
•
increased territory coverage across the ciS region
through new dealers and expanded distribution network
• challenger is the market leader for tractors over
380hp in europe
•
in north america, key cattM dealers have made significant
commitments to the challenger brand by adding new rural
locations and investing in dedicated agricultural sales and
service personnel
www.challenger-ag.com
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Fendt in 2011
•
investments in Fendt’s Marktoberdorf manufacturing facility
initiated to improve efficiency, increase productivity and
heighten production capacity for tractors and transmissions
• Fendt 936 Vario awarded world record for lowest fuel
use ever recorded in an independent dlG-powerMix
test: 240 g/kWh
• Gold Medal at Germany’s agritechnica Show for the Fendt
Guideconnect System which connects two tractors together
with one driver
• Silver medals for the Fendt cargo profi intelligent front
loader and load relief for front linkages
• Machine of the year 2012 award at agritechnica for the
Fendt 700 Vario in the medium to high-horsepower category
• First working season of the Fendt Katana, aGco’s first forage
harvester, manufactured in hohenmölsen
www.fendt.com
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Efficient Technology
Fendt is recognized as a technology
leader for the agricultural industry,
delivering highly efficient solutions for
professional farmers. Fendt leverages
sophisticated technology to provide
low total cost of ownership and high
return on investment. Fendt farmers
are able to achieve more from less.
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Annual Report 2011
For today’s farmers who care for the land,
massey Ferguson is the farm equipment manufacturer
that delivers ease-of-use and straightforward
dependability to farms around the world.
Few other brands have the experience of working with
more crops, in more conditions, in more places, for more
years, with more farmers than massey Ferguson.
A World of Experience – Working with You
Massey Ferguson in 2011
• Massey Ferguson is a clean energy pioneer in agriculture. Second
generation e3 Selective catalytic reduction technology is the engine
emissions solution now used in the award-winning high-horsepower
MF 7600 and MF 8600 ranges, as well as harvesting equipment
over 225hp
• Massey Ferguson’s Fast Forward initiatives have made significant
enhancements to production and business efficiencies
• MF 7600 high-horsepower range awarded with Machine of the year
title and the european Golden design award at agritechnica 2011
• Major manufacturing investments around the world including new
operations and developments in asia, north and South america and
Western europe
• MF 1004 tractor produced at aGco’s changzou, china facility,
awarded the new product prize at the 6th china (jiangsu)
international agricultural Machinery exhibition
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www.masseyferguson.com
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especially for the progressive,
individual farmer and contractor, valtra
offers reliable, uniquely customized
agricultural equipment that combines
versatility, ease-of-use and comfort for
maximum productivity in demanding
conditions. only valtra engineers its
products with scandinavian design
and functionality.
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Valtra in 2011
• 2011 marked 60 years of Valtra agricultural and
forestry equipment in Finland
• the n-Series, launched in november 2011, further
strengthens Valtra’s position as a key supplier for
the professional farming sector
• Valtra pushes technological boundaries – 2011 saw
the launch of the next generation biogas tractor
and antS future tractor unveiled and previewed
• Forestry solutions provide highly specialized
equipment for dedicated industries
• Strong position retained in South america with
new product lines introduced
www.valtra.com
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Annual Report 2011
gsi
In 2011, AGCO completed the purchase of GSI, a leading manufacturer
of grain storage equipment and protein control systems.
The grain storage and protein production markets are
poised for significant growth. Much of this increase will
come from developing markets, as diets adapt and the
adoption of production technology increases.
GSI has a strong customer profile, supporting
multinational corporations, large businesses and individual
farmers, offering AGCO significant opportunities for
long-term growth in expanding sectors.
Posting annual revenue of over $700 million in 2011,
GSI sells its products globally through more than 500
independent dealers. GSI extends AGCO’s reach in the
agricultural industry and places the company in a strong
position in new market sectors. At the same time, AGCO’s
global presence, along with manufacturing and purchasing
capabilities, will provide additional opportunities to GSI for
growth and operational efficiencies.
GSI is a market leader in the provision of grain bins,
material handling and conditioning machinery. Within
protein production, GSI provides a range of feed and
watering systems, climate control equipment and
confinement nesting, putting the company at the forefront
in the supply of complete customer solutions.
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We know agricultureWe support your farmWe help feed the world investing in
global harvesting
“
harvesting is the result oF months
oF hard Work, care and attention to
transForm tiny seeds into sustainable
and proFitable livelihoods.
”
2011 witnessed significant advances in aGco’s strategy
to become a world leader in harvesting technology.
We have invested in developing our harvesting machinery
line to produce a formidable force of combine and forage
harvesters, balers and green harvesting equipment focused
on setting new standards in output and efficiency.
in the united States and brazil, further key investments
programs were announced for the harvester plants in
hesston, Kansas and Santa rosa, rio Grande do Sul.
in north america, new equipment launches included
a high-capacity self-propelled windrower with
industry-leading high-speed guidance.
in South america, a new flex header family was unveiled
together with upgraded axial combines, a rice version of
the renowned conventional combine and a hydro version
of the popular class iV combine.
the completion of a joint venture partner buyout in
2011 saw the integration of the laverda Spa combine
harvester business based in breganze, italy and the
Fella-Werke Gmbh grass and hay machinery operation
located in Feucht, Germany.
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harvesting
aGco’s investment in new harvesting products, and extensions of distribution, are
opening up new markets and opportunities outside the company’s traditional areas
of operation. our distribution strategy centers on strengthening the retail power of
harvesting products at point of sale and focuses on market penetration, dealer area
coverage and enhancing the aGco harvesting customer experience.
Globally, aGco’s investment in harvesting products included new equipment in all categories
including conventional, rotary and hybrid combines. the Fendt Katana forage harvester
(pictured) signaled a new sector of business for the company and had a highly successful
debut season in 2011.
other developments include a new range of green harvest equipment plus an extra-density
baler aimed particularly at improving logistics for biomass crop producers. in 2011, aGco
benefited from greater presence in central european markets with significant growth in
poland and romania.
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investing in research,
design and
engineering
AGCO’s farmer-focused innovations
and practical application of technology
are helping growers to be more
productive, efficient and profitable.
The development of technology to meet the demands of food,
feed, fuel and fiber production is at the core of our research.
Our engineers and developers are continuing to push back
the boundaries of possibility with award-winning designs
and technological innovations in areas such as cleaner engine
emissions, improved fuel efficiency, controlled in-field traffic
guidance, data management and remote communications.
Since 2004, AGCO applications for engineering patents have
risen sevenfold.
In 2011, we invested $276 million globally in engineering
and new product development. This included the launch of
the pioneering Tier 4 Interim/Stage B engine, complying with
both US and EU regulations.
AGCO embraces multiple modes of university cooperation
- from graduate design projects to internships and
engineering scholarships.
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investing in technology
The spread of modern farming techniques and investment in
technological innovation is key to unlocking the full potential of
the world’s land assets. AGCO’s e3 strategy – Energy, Economy
and Ecology – fundamentally underlies the development of the
Company’s agricultural solutions.
Fendt Efficient Technology is a focused philosophy to achieve MORE
using LESS resources and inputs. This is achieved using a number of
innovations from Fendt to ensure that customers have a decisive edge
in profitability and cost-effectiveness, while protecting the environment
along the way.
in the quest for cleaner air and greater fuel economy,
aGco’s e3 engine technology, spearheaded by
aGco SiSu poWer, is a world leader in meeting
environmental regulations for lower emissions for
off-road vehicles.
targeting machine control, machine management and
precision farming, aGco atS and Global electronics
leads our work in advanced areas like the satellite-
based steering such as System 150 and VarioGuide,
field data collection, yield mapping and telemetry-
based fleet management systems
our Selective catalytic reduction engine and
proprietary electronic control system deliver high
power density, greater fuel efficiency, cleaner air
and optimal performance.
aGco advanced technology Solutions is the hub of the
company’s future thinking, offering farmers integrated
solutions to save fuel, boost production and manage
seed, chemical and fertilizer inputs.
these systems include aGcoMMand - a remote
telemetry-based solution that provides information such
as machine location, tracking and fleet performance
data which puts farm managers in control of maximizing
equipment efficiency and productivity. Variodoc is
the Fendt solution for efficient job management and
convenient data recording for farming businesses and
contractors by providing remote data management
solutions and interfaces with many commercial farm
management software packages.
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EnergyEcologyEconomy
investing in
manuFacturing
AGCO is building production facilities in China and expanding
manufacturing operations in the United States and Western Europe.
Increasing production capabilities in these strategic geographic
regions strongly positions AGCO to deliver relevant solutions to
meet our customers’ needs in the future.
We are aggressively implementing the AGCO Production
System (APS) initiative, across all our operations to drive
higher performance levels in efficiency and quality. This
has led to productivity increases at manufacturing sites in
addition to reductions in cycle times and lower inventory
levels, creating a manufacturing operation that is flexible and
responsive to changing market demands.
In a further boost to quality, in 2011 we commenced the
design and implementation of AGCO Quality System (AQS).
AQS is designed specifically to improve the delivered quality
to our customers.
With record levels of investment at manufacturing facilities
worldwide, AGCO has been able to improve production flow
and leverage global benefits.
We are investing in core manufacturing process including
welding, fabrication, paint, and test and inspection.
The installation of advanced robot welding cells is now
standardized across all operations.
We continue to refine the footprint at every manufacturing
site to optimize the flow of materials and drive increased
efficiencies. In addition, we are developing Manufacturing
Centers of Excellence in select locations to leverage leading
technologies across multiple sites.
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Annual Report 2011
investing in
our people
and their
development
The international team of men and
women who work for AGCO worldwide
are the driving force of the Company’s
success. By investing in employees and
developing their skills and knowledge,
AGCO is reinforcing its growth plans.
AGCO capitalizes on the unique skills and
multi-lingual abilities of individuals across
the regions and draws on their different
perspectives to add value to the business
through shared knowledge and best practices.
The provision of continuous, personal learning
and development is a core priority in AGCO’s
employee focus. This sustains a motivated and
high-performing workforce, helping individuals
achieve their full potential. Employees receive
professional development through AGCO
University – a global learning organization
growing a learning culture.
AGCO’s Global Human Resource function acts
as a strategic partner enabling business success
through human capital solutions. Its mission is
to foster a dynamic global environment, which
attracts and inspires excellence in AGCO’s
people through engagement, training and
development, and opportunities for long-term
career advancement.
Workforce and Succession Planning are
key activities. These address critical staffing
requirements aligned with strategic business
planning to ensure the Company has the right
people in the right place at the right time.
Talent acquisition and talent development are
two critical pillars of our Human Resources
strategy. To meet the needs of our growing
global business, in 2011, we implemented
a Global Talent Acquisition Process (GTAP)
across all regions. Talent acquisition and talent
development are two critical pillars of our
Human Resources strategy.
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“
35
great products and great services
do not happen Without great people.
”
OFFiCERS &
DiRECTORS:
From left
to right
luiz Fernando Furlan*
Member of the
Board of BRF Brasil
Foods, S.A.
andré M. carioba
Senior Vice President
and General Manager,
South America
randall G. hoffman
Senior Vice President
— Global Sales, Marketing
and Product Management
tom W. laSorda*
Co-Chairman and CEO
Fisker Automotive, Inc.
robert b . crain
Senior Vice President
and General Manager,
North America
Gerald l. Shaheen*
Former Group President
Caterpillar Inc.
david l. caplan
Senior Vice President
— Materials Projects
Martin h. richenhagen*
Chairman, President and
Chief Executive Officer, AGCO
lucinda b . Smith
Senior Vice President
— Human Resources
andrew h. beck
Senior Vice President
— Chief Financial Officer
hubertus M. Muehlhaeuser
Senior Vice President and General
Manager, Europe, Africa & Middle East
p. George benson*
President, College of Charleston
Wolfgang deml*
Former President and
CEO BayWa Corporation
Mallika Srinivasan*
Chairman and CEO of Tractors
and Farm Equipment Limited
daniel c . ustian*
President and CEO of
Navistar International
hendrikus Visser*
Chairman, Royal Huisman
Shipyards N.V.
Garry l. ball
Senior Vice President
— Engineering Projects
debra e. Kuper
Vice President, General Counsel
and Corporate Secretary
George e. Minnich*
Former Senior Vice President
and CFO, ITT Corporation
Gerald b. j ohanneson*
Former President and CEO
Haworth, Inc.
Gary l. collar
Senior Vice President and General
Manager, Asia Pacific
hans-bernd Veltmaat
Senior Vice President
— Chief Supply Chain Officer
* director
37
38
ForWard-looking statements
selected Financial inFormation
IN MILLIONS, ExCEPT PERCENTAGES, PER SHARE AMOUNTS AND EMPLOYEES
Years Ended December 31
2011
2010
2009
2008
2007
Operating Data:
Net sales
Gross profit
Percent of net sales
Income from operations
Percent of net sales
Net income
$
$
$
Net (income) loss attributable to noncontrolling interests
Net income attributable to AGCO Corporation and subsidiaries
Net income per common share — diluted(1)
Weighted average shares outstanding — diluted
Balance Sheet Data:
Cash and cash equivalents
Working capital
Total assets
Total long-term debt, excluding current portion
Stockholders’ equity
Other Data:
Number of employees
$
8,773.2
$
6,896.6
$
6,516.4
$
8,273.1
$
6,715.9
1,498.4
1,189.7
1,776.1
1,258.7
20.2%
610.3
7.0%
585.3
(2.0)
583.3
5.95
98.1
$
$
18.3%
324.2
4.7%
220.2
0.3
220.5
2.29
96.4
$
$
1,071.9
16.4%
218.7
3.4%
135.4
0.3
135.7
1.44
94.1
$
$
18.1%
563.7
6.8%
385.9
385.9
3.95
97.7
$
$
724.4
$
719.9
$
651.4
$
506.1
$
1,457.3
7,257.2
1,409.7
3,031.2
1,208.1
5,436.9
443.0
2,659.2
1,079.6
4,998.9
454.0
2,394.4
1,037.4
4,846.6
625.0
2,014.3
17.7%
393.7
5.9%
232.9
232.9
2.41
96.6
574.8
724.8
4,698.0
294.1
2,114.1
17,366
14,311
14,456
15,606
13,720
(1) The Company makes reference to adjusted earnings per share, as reconciled below:
2011
2010
2009
2008
2007
Net income per common share — diluted
Restructuring and other infrequent expenses (income)(2)
GSI acquisition(2) (3)
Net income per common share - adjusted
$
$
5.95
(1.47)
4.48
$
$
2.29
0.03
2.32
$
$
1.44
0.11
1.55
$
$
3.95
3.95
$
$
2.41
(0.03)
2.38
(2) After tax.
(3) During 2011, the Company recorded a tax benefit of $149.3 million and acquisition expenses of $5.8 million associated with the GSI acquisition as is more fully described in the
Company’s audited Consolidated Financial Statements and Notes to its Consolidated Financial Statements which are included in the Company’s annual report on Form 10-K.
This annual report includes forward-looking statements, including
the statements in the Chairman’s Message and other statements
herein regarding market demand, farmer productivity and crop
yields, production levels, strategic initiatives and their effects, and
general economic conditions. These statements are subject to
risk that could cause actual results to differ materially from those
suggested by the statements, including:
Our financial results depend entirely upon the agricultural industry,
and factors that adversely affect the agricultural industry generally,
including declines in the general economy, increases in farm input
costs, lower commodity prices and changes in the availability of
credit for our retail customers, will adversely affect us.
The poor performance of the general economy had adversely
impacted our sales and may continue to have an adverse impact on
our sales in the future, the extent of which we are unable to predict,
and there can be no assurance that our results will not continue to
be affected by the weakness in global economic conditions.
Our success depends on the introduction of new products, which
require substantial expenditures and may not be well received in
the market place.
We face significant competition and, if we are unable to complete
successfully against other agricultural equipment manufacturers,
we would lose customers and our revenues and profitability
would decline.
Most of our sales depend on the retail customers’ obtaining
financing, and any disruption in their ability to obtain financing,
whether due to the current economic downturn or otherwise, will
result in the sale of fewer products by us. A large portion of the
retail sales of our products are financed by our retail finance joint
ventures with Rabobank, and any difficulty on Rabobank’s part to
fund the venture would adversely impact sales if our customers
would be required to utilize other retail financing providers.
The collectability of receivables that are created from our sales,
as well as from financing obtained by our customers through our
retail financing joint ventures, is critical to our business.
We depend on suppliers for raw materials, components and
parts for our products, and any failure by our suppliers to provide
products as needed, or by us to promptly address supplier
issues, will adversely impact our ability to timely and efficiently
manufacture and sell products.
A majority of our sales and manufacturing take place outside
of the United States, and, as a result, we are exposed to risks
related to foreign laws, taxes, economic conditions, labor supply
and relations, political conditions and governmental policies.
These risks may delay or reduce our realization of vale from our
international operations.
Volatility with respect to currency exchange rates and interest
rates can adversely affect our reported results of operations and
the competitiveness of our products.
We are subject to extensive environmental laws and regulations,
and our compliance with, or our failure to comply with, existing
or future laws and regulations could delay production of our
products or otherwise adversely affect our business.
We have significant pension obligations with respect to our
employees, and our available cash flow may be adversely affected
in the event that payments became due under any pension plans
that are unfunded or underfunded. Declines in the market value
of the securities used to fund these obligations result in increased
pension expense in future periods.
We are subject to raw material price fluctuations, which can
adversely affect our manufacturing costs.
In connection with our outstanding indebtedness, we are subject
to certain restrictive covenants and payment obligations that may
adversely affect our ability to operate and expand our business.
We disclaim any obligation to update forward-looking statements
except as required by law
39
A
n
n
u
a
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R
e
p
o
r
t
2
0
1
1
40
consolidated statements oF operations
IN MILLIONS, ExCEPT PER SHARE DATA
consolidated balance sheets
IN MILLIONS, ExCEPT SHARE AMOUNTS
years ended december 31
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Engineering expenses
Restructuring and other infrequent (income) 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 (income) loss attributable to noncontrolling interests
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
2011
2010
2009
$
8,773.2
$
6,896.6
$
6,516.4
6,997.1
1,776.1
869.3
275.6
(0.7)
21.6
610.3
30.2
19.1
561.0
24.6
536.4
48.9
585.3
(2.0)
583.3
6.10
5.95
95.6
98.1
$
$
$
5,637.9
1,258.7
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
$220.5
2.38
2.29
92.8
96.4
$
$
$
5,444.5
1,071.9
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
135.7
1.47
1.44
92.2
94.1
$
$
$
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
Stockholders’ equity:
AGCO Corporation stockholders’ equity:
Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued or
outstanding in 2011 and 2010
Common stock; $0.01 par value, 150,000,000 shares authorized, 97,194,732 and
93,143,542 shares issued and outstanding at December 31, 2011 and 2010,
respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total AGCO Corporation stockholders’ equity
Noncontrolling interests
Total stockholders’ equity
Total liabilities and stockholders’ equity
2011
2010
$
$
$
724.4
994.2
1,559.6
142.7
241.9
3,662.8
1,222.6
346.3
37.6
126.9
666.5
1,194.5
7,257.2
60.1
937.0
1,080.6
127.8
2,205.5
1,409.7
298.6
192.3
119.9
4,226.0
719.9
908.5
1,233.5
52.6
206.5
3,121.0
924.8
398.0
58.0
130.8
171.6
632.7
5,436.9
0.1
161.0
113.9
682.6
883.1
72.2
1,912.9
443.0
226.5
103.9
91.4
2,777.7
1.0
0.9
1,073.2
2,321.6
(400.6)
2,995.2
36.0
3,031.2
7,257.2
$
1,051.3
1,738.3
(132.1)
2,658.4
0.8
2,659.2
5,436.9
$
$
$
$
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.
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.
41
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
1
42
consolidated statements oF stockholders’ equity
IN MILLIONS, ExCEPT SHARE AMOUNTS
common Stock
accumulated other comprehensive loss
Defined Benefit
Pension Plans
Cumulative
Translation
Adjustment
Deferred
Losses on
Derivatives
Accumulated Other
Comprehensive
Loss
Noncontrolling
Interests
$
(138.1)
$
(257.9)
(40.1)
$
(436.1)
$
$
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 13/4% convertible senior subordinated notes
Repurchase of 13/4% 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
Net income
Issuance of restricted stock
Issuance of performance award stock
Stock options and SSARs exercised
Stock compensation
Conversion of 13/4% convertible senior subordinated notes
Investments by noncontrolling interests
Distribution to noncontrolling interest
Change in fair value of noncontrolling interest
Defined benefit pension plans, net of taxes:
Prior service cost arising during year
Net actuarial loss 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
Change in cumulative translation adjustment
Shares
Amount
Additional
Paid-in Capital
Retained
Earnings
91,844,193
$
0.9
$
1,067.4 $
1,382.1
135.7
26,388
581,393
1,691
0.6
(5.2)
7.4
(8.3)
92,453,665
0.9
1,061.9
1,517.8
220.5
17,303
555,262
56,326
60,986
0.7
(11.2)
12.7
(21.1)
8.3
(75.6)
5.4
(208.3)
282.9
25.0
(2.8)
23.5
1.8
6.7
35.4
0.6
(4.1)
2.5
0.2
(1.4)
93,143,542
0.9
1,051.3
1,738.3
583.3
(179.1)
23.4
48.4
12,034
51,590
60,992
3,926,574
0.1
0.7
(1.5)
(0.7)
23.7
(0.1)
(0.2)
(5.0)
(61.8)
0.1
5.6
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
1
Comprehensive
Income
Attributable
to AGCO
Corporation
and subsidiaries
Comprehensive (Loss)
Income
Attributable to Non-
controlling
Interests
$
135.7
$
(0.3)
Total
Stockholders’
Equity
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
2,659.2
585.3
0.7
(1.5)
(0.7)
23.7
34.6
(1.5)
(5.0)
(61.8)
0.1
5.6
(5.4)
2.5
(204.6)
3,031.2
(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
275.8
583.3
0.2
(0.1)
(0.3)
(0.1)
(0.4)
2.0
(5.0)
(61.8)
0.1
5.6
(5.4)
2.5
(204.5)
314.8
$
(0.1)
1.9
$
(0.3)
1.3
0.2
1.2
(0.3)
(0.1)
0.8
2.0
34.6
(1.5)
0.2
(0.1)
36.0
$
$
(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
(132.1)
(5.0)
(61.8)
0.1
5.6
(5.4)
2.5
(204.5)
(400.6)
Balance, December 31, 2011
97,194,732
$
1.0
$
1,073.2 $
2,321.6
$
(240.2)
$
(5.4)
2.5
(4.3)
$
(204.5)
(156.1)
$
43
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.
44
consolidated statements oF cash FloWs
IN MILLIONS
years ended december 31
Cash flows from operating activities:
Net income
2011
2010
2009
$
585.3
$
220.2
$
135.4
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 (benefit) provision
Other
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:
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
(Purchase) sale of businesses, net of cash acquired
Investments in consolidated affiliates, 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
(Distribution to) investments by noncontrolling interest
Net cash provided by (used in) financing activities
Effects of exchange rate changes on cash and cash equivalents
Increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
151.9
2.9
21.6
8.2
24.4
(19.0)
(127.6)
(1.3)
(0.1)
(221.0)
(11.0)
162.3
183.5
(34.2)
140.6
725.9
(300.4)
1.5
(1,018.0)
(34.8)
(8.3)
(3.7)
(1,363.7)
(161.0)
1,676.9
(826.4)
0.3
(2.5)
(14.8)
(1.5)
671.0
(28.7)
4.5
719.9
724.4
$
$
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
(167.1)
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
719.9
$
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
(206.6)
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
651.4
corporate headquarters
4205 River Green Parkway
Duluth, Georgia 30096 US
770-813-9200
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 public accounting Firm
KPMG LLP
Atlanta, Georgia US
Form 10-k
The Form 10-K annual report to the Securities and Exchange Commission
is available in the “Investors” Section of our corporate web site (www.
agcocorp.com), under the heading “SEC Filings”, or upon request from
the Investor Relations Department at corporate headquarters.
annual meeting
The annual meeting of the Company’s stockholders will be held at 9:00
a.m. ET. on April 26, 2012 at the offices of AGCO Corporation,
4205 River Green Parkway, Duluth, Georgia 30096 US
© 2012 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 indentity 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$
250
200
150
100
50
0
2006
AGCO Corporation
Customer Peer Group
S&P Midcap 400 Index
2007
2008
2009
2010
2011
PERFORMANCE GRAPH
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
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.
Assumes $100 invested on January 1, 2007. Assumes dividend reinvested. Fiscal year ending Decembe 31, 2011.
(1) Based on information for a self-constructed peer group of companies which includes the following: Caterpillar Inc., CNH Global NV, Cummins Inc., Parker-Hannifin Corporation
and Terex Corporation.
45
46
“
1
1
0
2
Farmers have been
producing Food For
thousands oF years. With
rising populations expected
over the next Four decades,
they Face their biggest
challenge yet.
”
annual
annual
report
report
2011
2011