AGCO Annual Report 2019 | Quarterlytics

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FY2019 Annual Report · AGCO

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WH AT DOES IT TA K E TO FE E D A C H A NGING WORLD?

SMART SOLUTIONS FOR
SUSTAINABLE AGRICULTURE

2019 Annual Report

Chairman’s Letter and
2019 Highlights

Notice of Annual Meeting

Proxy Statement for the Annual
Meeting of Stockholders

Annual Report on Form 10-K

WHAT DOES
IT TAKE TO FEED
A CHANGING
WORLD?

Our business has always been about solving practical farming

challenges. As a provider of intelligent, transformative, farmer-centric

solutions, we are primed to meet the needs and demands of our ever-

changing world. All across the agricultural value chain, we collaborate

with forward-thinking producers who share our vital purpose: to help

feed the world with smart solutions for sustainable agriculture.

For a truly interactive
experience online,
visit our annual report:

A R 2019.AGCOCORP.COM

MARTIN H. RICHENHAGEN
Chairman, President and
Chief Executive Officer

CH A IR M A N’S MES S AGE

DEAR FELLOW SHAREHOLDERS, CUSTOMERS,
DEALERS AND EMPLOYEES:

Modern agriculture continues to evolve.

Enhanced with promising technology, farming

is becoming more innovative, more precise,

and more productive.

Watch the Chairman’s video

AR2019.AGCOCORP.COM

At AGCO, our farm-centric mindset is focused on delivering
smart, efficient, and sustainable agricultural equipment.
Through our digital solutions, we strive to ensure our customers’
operations are optimized, coordinated, and connected
throughout all stages of the crop cycle. Improvements start
with field preparation, then planting, and continue all the
way through harvesting, grain storage and handling, as well
as animal protein production.

2 0 19 P E R F O R M A N C E

Our farmer-first approach delivered strong results in 2019.
Despite difficult market conditions driven by low commodity
prices, unfavorable growing conditions, and a lingering trade
dispute, our results showed promising improvements in a
number of key areas. Our achievements are the direct result
of the relentless effort of our over 20,000 employees and our

dealer partners. We did it by focusing on our customers, striving
for excellence, and acting with integrity. We strengthened our
position in key global markets through the successful launch of
new products and a strong focus on customer service.

In the midst of challenging industry conditions, AGCO produced
solid financial results while making important investments to
position us for future success. AGCO reported 2019 net sales
of approximately $9.0 billion, a decrease of approximately 3.3%
compared to 2018. Reported net income per share was $1.63
and adjusted net income per share was $4.44,* an increase
of approximately 14% from the previous year. We generated
approximately $423 million in free cash flow* after funding
significant investments in new products and other long-term
profitability improvement initiatives. Our free cash flow largely
was used to support share repurchases and dividend payments
in 2019.

D E L I V E R I N G C U S T O M E R VA L U E

By focusing on delivering smart, efficient and sustainable
agricultural equipment, we believe that we can grow profitably
and improve our return on invested capital through margin
expansion. Our strategic initiatives have two major themes:
delivering greater value for our customers and improving
operating efficiency. Delivering customer value comes from our
smart-farming solutions, including Fendt globalization, moving
towards a full-line offering in all markets, and expanding our
high-margin parts business. Dealer development in both AGCO’s
established markets and emerging regions also will contribute to
our growth.

We are equally engaged in becoming more efficient. We’ve done
a lot of work over the years to make ourselves a leaner company
through investments in factory automation as well as improved
systems and processes throughout the company. A key ongoing
initiative addresses product complexity reduction and platform
consolidation, which supports efficient engineering and
increased purchasing scale.

D E S I G N I N G S U S TA I N A B L E

A G R I C U LT U R E S O L U T I O N S

AGCO is focusing our product development efforts on making
agriculture more efficient, more profitable, and, at the same
time, more sustainable. Our goal is to contribute to healthy

and affordable nutrition for all people, while caring for our
environment. Helping farmers grow crops more efficiently
with lower inputs and higher yields is core to our purpose.
Around the globe, we design smart solutions for real-world
production challenges.

As standards of living rise worldwide, driving demand for
animal protein, so do concerns about animal welfare. AGCO is
engineering solutions to help producers care for their animals
while also improving efficiency and profitability. AGCO’s
innovations include technology that makes it easier to maintain
a healthy and comfortable environment, equipment that ensures
proper nutrition, and tools to address bio-security concerns.
Our smart protein solutions of the future will use sensors to
monitor behavior, activities and physical characteristics,
so the producer can make better decisions based on their
animals’ individual needs.

E X PA N D I N G O U R C A PA B I L I T I E S

We are continuing to invest in AGCO’s digital capabilities so
that we can deliver more power to our customers. Last year, I
introduced you to AGCO’s Digital Customer Experience initiative.
Once complete, it will deliver customer and dealer portals that
provide engaging experiences for our customers and enhanced
analytic capabilities for dealers and for AGCO. The online tool
will enable our customers to configure, price and quote both new

FINANCIAL HIGHLIGHTS

(In millions, except for share amounts)

Net Sales*

Adjusted Operating Income*

Adjusted Earnings per Share*

Free Cash Flow*

$8,307

$9,352

$9,041

2017

2018

2019

$420

2017

$501

2018

$534

2019

$3.02

$3.89

$4.44

$374

$393

$423

2017

2018

2019

2017

2018

2019

AGCO is focusing our product
development efforts
on making agriculture
more efficient, more
profitable, and, at the same
time, more sustainable.

equipment and parts and to interact with us seamlessly. Our
customer relationship management tools will allow our dealers
to identify which customers are the best fit for our solutions and
help direct targeted marketing efforts towards those customers.

I also want to mention the role the Fendt brand has in our smart
machine effort. Fendt always has had a well-deserved reputation
as the premier tractor brand, and we have the awards to prove it.
Over the last few years we’ve been working on a two-dimensional
growth effort to make Fendt a full-line global brand. The first
dimension is expanding the Fendt portfolio to cover the entire
crop cycle, providing a full-line of solutions to our customers.
We’ve added hay equipment, sprayers, and harvesters, each of
which we believe matches Fendt’s long-standing reputation. This
expansion significantly increases Fendt’s growth opportunity in
its core market of Europe. The second dimension is taking the
Fendt products to the rest of the world. We’ve redesigned the
Fendt tractor range with the flexibility to adjust to the differing
farming practices across the globe, while continuing to be a
perfect fit for the European market. We are very excited about
Fendt’s future!

I N V E S T I N G I N O U R P E O P L E A N D

O U R C O M M U N I T I E S

I’d like to close this message with some thoughts on our most
important asset: our people. AGCO is investing in attracting
and retaining the best people in the business. At the heart of
our employee development efforts is a diversity and inclusion
initiative we call TRAIT. This initiative embraces AGCO’s core
values of Transparency, Respect, Accountability, Integrity,
and Team Spirit and is focused on enabling regional diversity
and inclusive strategies. The TRAIT program promotes a
collaborative culture that supports business success and
individual fulfillment.

We are also investing in our communities. Last year, we
established the AGCO Agriculture Foundation (AAF), a private
foundation committed to food security and sustainable
agricultural development. One of AAF’s first projects was
the AGCO Agribusiness Qualification Program at Strathmore

* See reconciliations of non-GAAP measures on page 4.

AGCO’s digital solutions optimize, coordinate and connect our

customers’ operations throughout all stages of the crop cycle.

University Business School in Nairobi, Kenya. I am pleased to
tell you that on December 5, 2019, the first class of 20 students
graduated from the inaugural two-year program. The students
rotated between working commercial farms, agricultural
machinery manufacturers and dealers, and more traditional
campus settings in Kenya, Zambia, South Africa, and the
United States, to obtain a wide variety of experiential and
classroom-learning opportunities. Helping to build the
agribusiness talent pool in Africa is a key part of AGCO’s
commitment to corporate social responsibility and sustainability
to assist in the achievement of food security on the continent.

As I reflect on the past year, I’m proud of our progress and
impact. And I’m even more optimistic about our opportunities
ahead. I would like to thank our customers, employees, dealers
and shareholders for their support and commitment. We are
well-positioned to leverage our considerable strengths and take
advantage of the favorable long-term industry fundamentals in
order to create meaningful shareholder value. Thank you for
your confidence in AGCO. We look forward to rewarding you
for your continued support in the years ahead.

Sincerely,

MARTIN RICHENHAGEN
Chairman, President and Chief Executive Officer

RECONCILIATION OF NON-GAAP MEASURES

(In millions, except per share amounts)

Years Ended December 31,

2019

Income
from
Operations

Net
Income(1),(2)

Net
Income per
Share(1),(2)

Income
from
Operations

2018

Net
Income(1)

Net
Income per
Share(1)

Income
from
Operations

2017

Net
Income(1)

Net
Income per
Share(1),(2)

As reported

$ 348.1

$ 125.2

1.63

$ 489.0

$ 285.5

3.58

$ 404.4

$ 186.4

2.32

Impairment charges

Restructuring expenses

Swiss tax reform

Non-cash expense related to
waived stock compensation

Extinguishment of debt

Deferred income tax adjustment

Tax (benefit) provision associated
with U.S. tax reform

176.6

9.0

—

176.6

8.3

(21.8)

—

2.29

0.11

(0.28)

—

53.7

0.70

—

12.0

—

8.7

—

24.5

—

0.11

—

0.31

—

(8.5)

(0.11)

—

11.2

—

4.8

—

8.8

—

4.8

—

0.11

—

0.06

—

42.0

0.52

As adjusted

$ 533.7

$ 341.9

4.44

$ 501.0

$ 310.2

3.89

$ 420.4

$ 242.0

3.02

(1) Net income and net income per share amounts are after tax.

(2) Rounding may impact summation of amounts.

2019

2018

2017

Net cash provided by
operating activities

Less:
Capital expenditures

$ 695.9

$ 595.9

$ 577.6

(273.4)

(203.3)

(203.9)

Free cash flow

$ 422.5

$ 392.6

$ 373.7

FORWARD-LOOKING STATEMENTS

This annual report includes forward-looking
statements, including the statements in
the Chairman’s Message and other statements
in this report regarding market demand,
strategic initiatives, commitments and their
effects, and general economic conditions.
These statements are subject to risks 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, adverse weather,
increases in farm input costs, and lower commodity
prices, will adversely affect us.

We face significant competition, and if we are

unable to compete successfully against other
agricultural equipment manufacturers, we would
lose our customers and our net sales would decline.

Our success depends on the introduction

of new products, which requires substantial
expenditures and may not be well received in
the marketplace.

Most of our sales depend on the retail

customers obtaining financing, and any disruption
in their ability to obtain financing, whether due
to economic downturns or otherwise, will result in
the sale of fewer products by us. A majority of
the retail sales of our products is financed by our
retail finance joint ventures with Rabobank,
and any interruption or decrease on Rabobank’s
part in funding the venture would adversely
impact net sales.

We depend on suppliers for raw materials,
components, and parts for our products, and
any failure by our suppliers to provide products
as needed, whether due to the coronavirus or
otherwise, 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 the United States, and many of
our sales involve products that are manufactured
in one country and sold in a different country,
and, as a result, we are exposed to risks related to
foreign laws, taxes and tariffs, trade restrictions,

economic conditions, labor supply and relations,
political conditions and governmental policies.
These risks may delay or reduce our realization of
value from our international operations. Among
these risks are the uncertain consequences of
Brexit, Russian sanctions and tariffs imposed on
exports to and imports from China.

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 are subject to raw material price
fluctuations, which can adversely affect our
manufacturing costs.

We disclaim any obligation to update forward-

looking statements except as required by law.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Time and Date:

9:00 a.m., Eastern Time, on Thursday, April 30, 2020

Place:

AGCO Corporation, 4205 River Green Parkway, Duluth, Georgia 30096

Items of Business:

1. To elect ten directors to the Board of Directors for terms expiring at the Annual Meeting
in 2021;

2. To consider a non-binding advisory resolution to approve the compensation of the
Company’s named executive officers;

3. To ratify the appointment of KPMG LLP as the Company’s independent registered public
accounting firm for 2020; and

4. To transact any other business that may properly be brought before the meeting.

Record Date:

Only stockholders of record as of the close of business on March 20, 2020 are entitled to
notice of and to vote at the Annual Meeting or any postponement or adjournment thereof.
Attendance at the Annual Meeting is limited to stockholders of record at the close of business
on March 20, 2020, and to any invitees of the Company.

Inspection of List of
Stockholders of Record:

A list of stockholders as of the close of business on March 20, 2020 will be available for
examination by any stockholder at the Annual Meeting itself as well as for a period of ten
days prior to the Annual Meeting at our offices at the above address during normal business
hours.

We urge you to mark and execute your proxy card and return it promptly in the enclosed envelope or vote by

telephone or electronically. In the event you are able to attend the meeting, you may revoke your proxy and vote your
shares in person.

We intend to hold our annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19);

we are sensitive to the public health and travel concerns our shareholders may have and the protocols that federal, state and
local governments may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will
announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely
by means of remote communication. Please monitor our annual meeting website at www.envisionreports.com/AGCO for
updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.
As always, we encourage you to vote your shares prior to the annual meeting.

Atlanta, Georgia

March 30, 2020

By Order of the Board of Directors

ROGER N. BATKIN

Corporate Secretary

This summary highlights information contained elsewhere in this proxy statement. Since this summary does not contain

all of that information, you are encouraged to read the entire proxy statement before voting.

SUMMARY

Annual Meeting of Stockholders

• Time and Date:

9:00 a.m., Eastern Time, on Thursday, April 30, 2020

• Place:

AGCO Corporation, 4205 River Green Parkway, Duluth, Georgia 30096

• Record Date:

March 20, 2020

• Voting:

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to
one vote for each director nominee and one vote for each of the proposals to be voted on.

Voting Recommendations

Proposal
Election of Directors
Advisory vote on executive compensation
Ratification of the selection of KPMG LLP

Board Vote Recommendation
FOR EACH NOMINEE
FOR
FOR

Director Nominees

The following table provides summary information about each nominee. Directors are elected annually. AGCO has

majority voting in uncontested elections of directors, such as this election. In the event that a nominee does not receive the
affirmative vote of a majority of the votes cast in person or by proxy, he or she is required to tender his or her resignation.

Name
Roy V. Armes

Michael C. Arnold

Sondra L. Barbour

Director
Since
2013

2013

2019

Age
67

P. George Benson

2004

Suzanne P. Clark

2017

Wolfgang Deml

1999

George E. Minnich

2008

Martin H. Richenhagen 67

Gerald L. Shaheen

2004

2005

Mallika Srinivasan

2011

Brief Biography
Former Executive Chairman, President and
CEO, Cooper Tire and Rubber Company

Former President and CEO, Ryerson Inc.

Former Executive Vice President, Lockheed
Martin Corporation

Professor of Decision Sciences and Former
President, College of Charleston

President of the U.S. Chamber of
Commerce

Former President and CEO, BayWa
Corporation (Germany)

Former Senior VP and CFO, ITT
Corporation

Chairman, President and CEO, AGCO

Lead Director of AGCO, Former Group
President, Caterpillar Inc.
Chairman and Managing Director, Tractors
and Farm Equipment Limited (India)

Committee Membership

Independent
X

EC AC CC FC GC SP
X

X X

X C

X C X X

C X

EC Executive Committee

FC Finance Committee

AC Audit Committee
CC Compensation
Committee

GC Governance Committee

SP Succession Planning Committee

C Chair

Executive Compensation Advisory Vote

We are asking stockholders to approve on an advisory basis our named executive officer compensation.

The Company’s compensation philosophy and program design is intended to pay for performance, support the

Company’s business strategy and align executives’ interests with those of stockholders and employees. A significant portion of
the Company’s executive compensation opportunity is related to factors that directly and indirectly influence stockholder value,
including stock performance, earnings per share, operating margin, free cash flow and return on invested capital. The Company
believes that as an executive’s responsibilities increase, so should the portion of his or her total pay comprised of annual
incentive cash bonuses and long-term incentive compensation, which supports and reinforces the Company’s pay for
performance philosophy.

For more information on the Company’s executive compensation programs, please see “Proposal Number 2 —

Non-Binding Advisory Resolution to Approve the Compensation of the Company’s NEOs” and “Compensation Discussion and
Analysis” in this proxy statement.

Independent Registered Public Accounting Firm

As a matter of good corporate governance, we are asking our stockholders to ratify the selection of KPMG LLP as our

independent registered public accounting firm for 2020. The Company’s Audit Committee considers a number of factors when
selecting a firm, including the qualifications, staffing considerations, and the independence and quality controls of the firms
considered. The Audit Committee has appointed KPMG LLP as the Company’s independent registered public accounting firm
for 2020. KPMG LLP served as the Company’s independent registered public accounting firm for 2019 and is considered to be
well-qualified.

Set forth below is summary information with respect to KPMG LLP’s fees for services provided in 2019 and 2018.

Type of Fees
Audit Fees

Audit-Related Fees

Tax Fees

Other Fees

Total

2019

2018

(in thousands)

7,302 $

7,328

188

—

7,580 $

7,402

NEW BLEED

PROXY STATEMENT
FOR THE ANNUAL MEETING
OF STOCKHOLDERS

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TABLE OF CONTENTS

INFORMATION REGARDING THE ANNUAL MEETING...................................................................................
PROPOSAL NUMBER 1 ELECTION OF DIRECTORS.........................................................................................
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE ..........................................................................
PROPOSAL NUMBER 2 NON-BINDING ADVISORY RESOLUTION TO APPROVE THE
COMPENSATION OF THE COMPANY’S NEOS...................................................................................................
PROPOSAL NUMBER 3 RATIFICATION OF COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2020 .............................................................................................................................
OTHER BUSINESS...................................................................................................................................................
PRINCIPAL HOLDERS OF COMMON STOCK.....................................................................................................
EXECUTIVE COMPENSATION..............................................................................................................................
COMPENSATION DISCUSSION AND ANALYSIS...............................................................................................
SUMMARY OF 2019 COMPENSATION.................................................................................................................
2019 SUMMARY COMPENSATION TABLE .........................................................................................................
2019 GRANTS OF PLAN-BASED AWARDS..........................................................................................................
OUTSTANDING EQUITY AWARDS AT YEAR-END 2019...................................................................................
SSAR EXERCISES AND STOCK VESTED IN 2019..............................................................................................
PENSION BENEFITS ...............................................................................................................................................
2019 PENSION BENEFITS TABLE.........................................................................................................................
OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS ..................................................................................
2019 CEO PAY RATIO ..............................................................................................................................................
COMPENSATION COMMITTEE REPORT ............................................................................................................
AUDIT COMMITTEE REPORT...............................................................................................................................
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS...........................................................
ANNUAL REPORT TO STOCKHOLDERS ............................................................................................................
ANNUAL REPORT ON FORM 10-K.......................................................................................................................
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..........................................................................
STOCKHOLDERS’ PROPOSALS............................................................................................................................

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AGCO CORPORATION

PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
April 30, 2020

INFORMATION REGARDING THE ANNUAL MEETING

INFORMATION REGARDING PROXIES

This proxy solicitation is made by the Board of Directors (the “Board”) of AGCO Corporation (“AGCO”, “we”, us”, or
the “Company”), which has its principal executive offices at 4205 River Green Parkway, Duluth, Georgia 30096. By signing
and returning the enclosed proxy card, you authorize the persons named as proxies on the proxy card to represent you at the
meeting and vote your shares.

If you attend the meeting, you may vote by ballot. If you are not present at the meeting, your shares can be voted only

when represented by a proxy either pursuant to the enclosed proxy card or otherwise. You may also vote over the telephone or
electronically via the internet as described on the proxy card provided to you. You may indicate a vote on the enclosed proxy
card in connection with any of the listed proposals, and your shares will be voted accordingly. If you indicate a preference to
abstain from voting, no vote will be cast. You may revoke your proxy card before balloting begins by notifying the Corporate
Secretary in writing at 4205 River Green Parkway, Duluth, Georgia 30096. In addition, you may revoke your proxy card before
it is voted by signing and duly delivering a proxy card bearing a later date or by attending the meeting and voting in person.
If you return a signed proxy card that does not indicate your voting preferences, the persons named as proxies on the proxy card
will vote your shares (i) in favor of all of the ten director nominees described below; (ii) in favor of the non-binding advisory
resolution to approve the compensation of the Company’s Named Executive Officers (“NEOs”); (iii) in favor of ratification of
the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2020; and (iv) in their best
judgment with respect to any other business brought before the Annual Meeting.

The enclosed proxy card is solicited by the Board, and the cost of solicitation of proxy cards will be borne by the
Company. The Company may retain an outside firm to aid in the solicitation of proxy cards, the cost of which the Company
expects would not exceed $25,000. Proxy solicitation also may be made personally or by telephone by officers or employees of
the Company, without added compensation. The Company will reimburse brokers, custodians and nominees for their customary
expenses in forwarding proxy material to beneficial owners.

This proxy statement and the enclosed proxy card are first being sent to stockholders on or about March 30, 2020.

The Company’s 2019 Annual Report on Form 10-K is also enclosed and should be read in conjunction with the matters set
forth herein.

INFORMATION REGARDING VOTING

Only stockholders of record as of the close of business on March 20, 2020, are entitled to notice of and to vote at the
Annual Meeting. On March 20, 2020, the Company had outstanding 75,054,096 shares of common stock, each of which is
entitled to one

Meeting will be

not applicable to the matters being proposed. For directions to the offices of the Company where the Annual
held, you may contact our corporate office at (770) 813-9200.

Quorum Requirement

A quorum of the Company’s stockholders is necessary to hold a valid meeting. The Company’s By-Laws provide that a
quorum is present if a majority of the outstanding shares of common stock of the Company entitled to vote at the meeting are
present in person or represented by proxy. Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
inspector of elections appointed for the meeting, who will also determine whether a quorum is present for the transaction of
business. Abstentions and “broker non-votes” will be treated as shares that are present and entitled to vote for purposes of
determining whether a quorum is present. A broker non-vote occurs on an item when a broker or other nominee is not permitted
to vote on that item without instruction from the beneficial owner of the shares and no instruction is given.

Vote Necessary for the Election of Directors

Directors are elected by a majority of the votes cast in person or by proxy at the Annual Meeting. See “Proposal

Number 1 — Election of Directors” in this proxy statement for a more detailed description of the majority voting procedures in
our By-Laws.

Under the New York Stock Exchange (“NYSE”) rules, if your broker holds your shares in its name, your broker is not
permitted to vote your shares with respect to the election of directors if your broker does not receive voting instructions from
you. Abstentions and broker non-votes will not affect the election outcome.

Vote Necessary to Adopt the Non-Binding Advisory Resolution to Approve the Compensation of the Company’s NEOs

Adoption of the non-binding advisory resolution to approve the compensation of the Company’s NEOs requires the
affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting. Because the stockholder vote on
this proposal is advisory only, it will not be binding on the Company or the Board. However, the Compensation Committee will
review the voting results and take them into consideration when making future decisions regarding executive compensation as
the Compensation Committee deems appropriate.

Under the NYSE rules, if your broker holds your shares in its name, your broker is not permitted to vote your shares with

respect to the non-binding advisory resolution to approve the compensation of the Company’s NEOs if your broker does not
receive voting instructions from you. Abstentions and broker non-votes will not affect the vote on this proposal.

Vote Necessary to Ratify the Appointment of Independent Registered Public Accounting Firm

Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2020

requires the affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting.

Under the NYSE rules, if your broker holds your shares in its name, your broker is permitted to vote your shares with

respect to the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm
for 2020 even if your broker does not receive voting instructions from you. Abstentions and broker non-votes will not affect the
vote on this proposal.

Other Matters

With respect to any other matter that may properly come before the Annual Meeting for stockholder consideration,

a matter generally will be approved by the affirmative vote of a majority of the votes cast in person or by proxy at the
Annual Meeting unless the question is one upon which a different vote is required by express provision of the laws of
Delaware, federal law, the Company’s Certificate of Incorporation or the Company’s By-Laws or, to the extent permitted by
the laws of Delaware, the Board has expressly provided that some other vote shall be required, in which case such express
provisions shall govern.

Important Notice Regarding the Availability of Proxy Materials

As required by rules adopted by the United Stated Securities and Exchange Commission (“SEC”), the Company is
making this proxy statement and its annual report available to stockholders electronically via the Internet. The proxy statement
and annual report to stockholders are available at www.agcocorp.com. The proxy statement is available under the heading
“SEC Filings” in our website’s “Investors” section located under “Company,” and the annual report to stockholders is available
under the heading “Annual Reports” in our “Investors” section.

We intend to hold our annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19);

PROPOSAL NUMBER 1

ELECTION OF DIRECTORS

The Company’s By-Laws provide for a majority voting standard for the election of directors in uncontested elections.

If an incumbent director does not receive the requisite majority vote, he or she would continue as a “carry over” director, but is
required to tender his or her resignation. In that event, the Governance Committee will determine whether to accept the
director’s resignation and will submit its recommendation to the Board. In deciding whether to accept a director’s resignation,
the Board and our Governance Committee may consider any factors that they deem relevant. Our By-Laws also provide that
the director whose resignation is under consideration will abstain from the deliberation process with respect to his or her
resignation.

In the event that a stockholder proposes a nominee to stand for election with nominees selected by the Board, and the

stockholder does not withdraw the nomination prior to the tenth day preceding our mailing the notice of the stockholders
meeting (i.e., a “contested election”), then our By-Laws provide that directors will be elected by a plurality vote.

For this year’s Annual Meeting, the Governance Committee has recommended, and the Board has nominated, the ten
individuals named below to serve as directors until the Annual Meeting in 2021 or until their successors have been duly elected
and qualified. The following is a brief description of the business experience, qualifications and skills of each of the ten
nominees for directorship:

Roy V. Armes, age 67, has been a director of the Company since October 2013.

•

Former Executive Chairman, President and CEO of Cooper Tire and Rubber Company from 2007 to 2016

• Various executive positions with Whirlpool Corporation from 1975 to 2006 including Senior Vice President,

Project Management Office; Corporate Vice President and General Director, Whirlpool Mexico; Corporate
Vice President, Global Procurement Operations; President/Managing Director, Whirlpool Greater China, Inc.
Hong Kong; Vice President, Manufacturing Technology, Whirlpool Asia (Singapore); and Vice President,
Manufacturing & Technology, Refrigeration Products, Whirlpool Europe (Comerio, Italy)

•

Former member of the Board of Directors of The Manitowoc Company, Inc.

Director Qualifications and Skills: Mr. Armes brings extensive leadership experience with manufacturing

companies and will provide an important perspective and contribution to the Board. The addition of his global manufacturing
experience to the collective knowledge of our Board better positions AGCO for the opportunities facing our industry.

Michael C. Arnold, age 63, has been a director of the Company since October 2013.

•

Former President and Chief Executive Officer of Ryerson Inc.

Former member of the Board of Directors of Gardner Denver, Inc.

• Various senior management positions with The Timken Company from 1979 to 2010 including Executive

Vice President; President, Bearings and Power Transmission Group; President, Industrial Group; Vice President,
Bearings and Business Process Advancement; Director, Bearings and Business Process Advancement; Director,
Manufacturing and Technology, Europe, Africa and West Asia (Europe)

Director Qualifications and Skills: Mr. Arnold brings extensive leadership experience with manufacturing

Sondra L. Barbour, age 57, has been a director of the Company since April 2019.

•

Former Executive Vice President, Leidos Holdings, Inc. from August 2016 to January 2017

Former Executive Vice President, Information Systems & Global Solutions, Lockheed Martin Corporation from
April 2013 to August 2016

• Various leadership positions at Lockheed Martin Corporation from 1986 to 2013, including Chief Information Officer,
Vice President of Corporate Internal Audit, Business Area Chief Information Officer and Vice President of Operations

• Member of the Board of Directors and Audit Committee of Perspecta Inc.

•

Former member of the Board of Directors of 3M Company

• Member of the Fox School of Business Management Information Systems Advisory Board

• Named one of Fortune magazine’s “50 Most Powerful Women in Business”

Director Qualifications and Skills: Ms. Barbour brings extensive leadership experience in business operations

and knowledge regarding information technology, financial, internal controls and audit matters to the Board. This knowledge,
along with her experience serving on boards of directors, provides an important perspective to the Board.

P. George Benson, Ph.D, age 73, has been a director of the Company since December 2004.

•

Professor of Decision Sciences at College of Charleston in Charleston, South Carolina from 2014 to present

Former President of College of Charleston in Charleston, South Carolina from 2007 to 2014

Former Member of the Board of Directors and Chairman of the Corporate Governance Committee of
Crawford & Company (Atlanta, Georgia)

• Lead Director, Chairman of the Corporate Governance Committee and member of the Audit Committee for

Primerica, Inc.

•

Judge for the Malcolm Baldrige National Quality Award from 1997 to 2000, was Chairman of the Board of Overseers
for the Baldrige Award from 2004 to 2007 and is currently a member of the Board of Directors for the Foundation for
the Baldrige Award

Former Dean of the Terry College of Business at the University of Georgia from 1998 to 2007

Former Dean of the Rutgers Business School at Rutgers University from 1993 to 1998

Former Faculty member of the Carlson School of Management at the University of Minnesota from 1977 to 1993,
where he served as Director of the Operations Management Center from 1992 to 1993 and head of the Decision
Sciences Area from 1983 to 1988

Director Qualifications and Skills: Mr. Benson has significant academic expertise in business, in particular with
strategic planning and organizational management systems, that adds a valuable perspective to the Board, especially in the area
of improving the delivery of products and services. His ties to the community provide the Board with regional representation
and a critical link to the academic and research sectors.

Suzanne P. Clark, age 52, has been a director of the Company since April 2017.

•

President of the U.S. Chamber of Commerce

Former Senior Executive Vice President and former Chief Operating Officer of the U.S. Chamber of Commerce

• Member of the Board of Directors and Audit Committee of TransUnion

• Led a prominent financial information boutique - Potomac Research Group (PRG)

•

Formerly with the Atlantic Media Company as President of the National Journal Group, a premier provider of
information, news and analysis for Washington’s policy and political communities

• Member of the Board of So Others Might Eat, a Washington, D.C. support system for the homeless

•

Former President of International Women’s Forum (Washington Chapter), a global group of leading women in
business, law, government, technology and the arts

• Named one of Washingtonian Magazine’s “100 Most Powerful Women in Washington”

Director Qualifications and Skills: Ms. Clark brings extensive leadership experience, entrepreneurial spirit, and

a wealth of political and regulatory knowledge which will provide an important perspective and contribution to the Board.

Wolfgang Deml, age 74, has been a director of the Company since February 1999.

•

Former President and Chief Executive Officer of BayWa Corporation, a trading and services company located in
Munich, Germany, from 1991 until his retirement in 2008

• Non-Executive Chairman of the Board of Directors and Audit Committee of Hauck & Aufhäuser Privatbankiers AG

Director Qualifications and Skills: Mr. Deml adds extensive experience to the Board given his service as the

Chief Executive Officer of an international corporation within our industry. His tenure on our Board provides consistent
leadership, and he serves as an ongoing source for industry-specific knowledge, especially in Europe, which is our largest
market.

George E. Minnich, age 70, has been a director of the Company since January 2008.

•

Former Senior Vice President and Chief Financial Officer of ITT Corporation from 2005 to 2007

Several senior finance positions at United Technologies Corporation, including Vice President and Chief Financial
Officer of Otis Elevator from 2001 to 2005 and Vice President and Chief Financial Officer of Carrier Corporation
from 1996 to 2001

• Various positions within Price Waterhouse (now PricewaterhouseCoopers LLP) from 1971 to 1993, serving as an audit

partner from 1984 to 1993

• Member of the Boards of Directors and Audit Committees of Belden Inc. and Kaman Corporation and the Chairman

of the Audit Committee for Belden Inc.

Director Qualifications and Skills: Mr. Minnich, through his background as a former Audit Partner of

Price Waterhouse and Chief Financial Officer of a publicly-traded company, provides the Board with substantial financial
expertise. He also brings to the Board a familiarity with the challenges facing large, international manufacturing companies.

Martin H. Richenhagen, age 67, has been Chairman of the Board of Directors since August 2006 and has served as President
and Chief Executive Officer of the Company since July 2004.

• Member of the Board of Directors, Chairman of Audit and member of the Officers & Directors Compensation

Committee for PPG Industries, Inc.

• Member of the Board of Directors, Compensation and Governance & Nominating Committees for Linde PLC.

Mr. Richenhagen also served as a director of Praxair, Inc. from 2015 until the business combination of Praxair, Inc.
and Linde AG.

• Member of the Board of Directors for American Institute for Contemporary German Studies

• Member of the Board of Directors for Metro Atlanta Chamber of Commerce

•

Former Member of President’s Advisory Council on Doing Business in Africa for the United States Department of
Commerce

Former Chairman of the German American Chambers of Commerce of the United States

Former Chairman of the Board and Lifetime Honorary Director of the Association of Equipment Manufacturers
(AEM)

Former Executive Vice President of Forbo International SA, a flooring material business based in Switzerland, from
2003 to 2004

Former Group President of Claas KGaA mbH, a global farm equipment manufacturer and distributor, from 1998 to
2002

Former Senior Executive Vice President for Schindler Deutschland Holdings GmbH, a worldwide manufacturer and
distributor of elevators and escalators, from 1995 to 1998

Director Qualifications and Skills: In addition to his fourteen years of experience as the Company’s Chief

Executive Officer, Mr. Richenhagen brings to the Board substantial experience in the agricultural equipment industry.
His business and leadership acumen as both a former Executive Vice President and current Chief Executive Officer provides
the Board with an informed resource for a wide range of disciplines, from sales and marketing to broad business strategies.

Gerald L. Shaheen, age 75, has been a director of the Company since October 2005.

• Member of the Board of Trustees and Audit Committee of the Colonial Williamsburg Foundation

• Chairman of the Advisory Board of the Illinois Neurological Institute

• Board member, Audit Committee Chairman and past Chairman of the U.S. Chamber of Commerce

• Numerous marketing and general management positions for Caterpillar Inc., both in the United States and Europe,

including Group President from 1998 until his retirement in January 2008

•

Former Chairman of the Board of Trustees of Bradley University

Former member of Board of Directors of the Ford Motor Company

Director Qualifications and Skills: Mr. Shaheen’s background in management of a global heavy equipment

manufacturer brings to the Board particular knowledge of the Company’s industry, as well as a necessary perspective of the

challenges facing large, publicly-traded companies. His work with the U.S. Chamber of Commerce also provides the Board
with a wealth of knowledge related to international commerce and trade issues.

Mallika Srinivasan, age 60, has been a director of the Company since July 2011.

• Chairman and Managing Director of Tractors and Farm Equipment Limited, the second largest agricultural tractor
manufacturer in India, since December 2019 and previously Chairman and Chief Executive Officer since 2011

• Various positions at Tractors and Farm Equipment Limited since 1981, including Director (1994 to 2011),

Vice President (1991 to 1994) and General Manager – Planning & Coordination (1986 to 1991)

• Chairman and member of the Board of Directors of Tata Steel Limited (India)

•

Former member of the Board of Directors of Tata Global Beverages Limited (India)

• Member of the Board of Medical Research Foundation

• Member of the Global Board of the U.S. Chamber of Commerce’s U.S. India Business Council

•

Former President of the Tractor Manufacturers Association of India, the Madras Management Association and the
Madras Chamber of Commerce & Industry

Former member of the Board of Governors of the Indian Institute of Technology, Madras and the Indian Institute of
Management, Tiruchirappalli

Director Qualifications and Skills: Ms. Srinivasan’s expertise in strategy, extensive leadership experience in the
farm equipment industry and knowledge of operations in India and other developing markets provide an important perspective
and contribution to the Board.

The Board recommends a vote “FOR” the nominees set forth above.

Director Independence

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

In accordance with the rules of the NYSE, the Board has adopted categorical standards to assist it in making

determinations of its directors’ independence. The Board has determined that in order to be considered independent, a director
must not:

•

be an employee of the Company or have an “immediate family member,” as that term is defined in the General
Commentary to Section 303A.02(b) of the NYSE rules, who is an executive officer of the Company at any time during
the preceding three years;

receive or have an immediate family member who receives or solely own any business that receives during any
twelve-month period within the preceding three years direct compensation from the Company or any subsidiary or
other affiliate in excess of $120,000, other than for director and committee fees and pension or other forms of deferred
compensation for prior service to the Company or, solely in the case of an immediate family member, compensation
for services to the Company as a non-executive employee;

be a current partner or current employee of a firm that is the internal or external auditor of the Company or any
subsidiary or other affiliate, or have an immediate family member that is a current partner or current employee of such
a firm who personally works on an audit of the Company or any subsidiary or other affiliate;

have been or have an immediate family member who was at any time during the preceding three years a partner or
employee of such an auditing firm who personally worked on an audit of the Company or any subsidiary or other
affiliate within that time;

be employed or have an immediate family member that is employed either currently or at any time within the
preceding three years as an executive officer of another company in which any present executive officers of the
Company or any subsidiary or other affiliate serve or served at the same time on the other company’s Compensation
Committee; or

be a current employee or have an immediate family member that is a current executive officer of a company that has
made payments to or received payments from the Company or any subsidiary or other affiliate for property or services
in an amount which, in any of the preceding three years of such other company, exceeds (or in the current year of such
other company is likely to exceed) the greater of $1.0 million or two percent of the other company’s consolidated
gross revenues for that respective year.

In addition, in order to be independent for purposes of serving on the Audit Committee, a director may not:

•

accept any consulting, advisory or other compensatory fee from the Company or any subsidiary; or

be an “affiliated person,” as that term is used in Section 10A(m)(3)(B)(ii) of the Securities Exchange Act of 1934
(the “Exchange Act”), of the Company or any of its subsidiaries.

Finally, in order to be independent for purposes of serving on the Compensation Committee, a director may not:

•

be a current or former employee or former officer of the Company or an affiliate or receive any compensation from the
Company other than for services as a director;

receive remuneration from the Company or an affiliate, either directly or indirectly, in any capacity other than as a
“director,” as that term is defined in Section 162(m) of the Internal Revenue Code (“IRC”); or

•

have an interest in a transaction required under SEC rules to be described in the Company’s proxy statement.

These standards are consistent with the standards set forth in the NYSE rules, the IRC and the Exchange Act. In applying

these standards, the Company takes into account the interpretations of, and the other guidance available from, the NYSE.
In affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board of
Directors considers all factors specifically relevant to determining whether such director has a relationship to the Company
which is material to that director’s ability to be independent from management in connection with the duties of the
Compensation Committee member, including the independence factors set forth in the NYSE rules.

Based upon the foregoing standards, the Board has determined that all of its directors are independent in accordance with

these standards except for Mr. Richenhagen and Ms. Srinivasan, and that none of the independent directors has any material
relationship with the Company, other than as a director or stockholder of the Company.

The Company and Tractors and Farm Equipment Limited (“TAFE”) are parties to a Letter Agreement, dated

April 24, 2019, that replaces the previous Letter Agreement, dated August 29, 2014 (the “Letter Agreement”), regarding the
current and future accumulation by TAFE of shares of the Company’s common stock and certain governance matters, including
the Company’s nomination of a director candidate selected by TAFE. TAFE’s proposed director candidate for 2020 is
Ms. Srinivasan, TAFE’s Chairman and Managing Director, and Ms. Srinivasan has been nominated for election by the
Company’s Board of Directors. See “Certain Relationships and Related Party Transactions” below for additional information.

Committees of the Board of Directors

The Board has delegated certain functions to six standing committees: an Executive Committee, an Audit Committee,
a Compensation Committee, a Finance Committee, a Governance Committee and a Succession Planning Committee. Each of
the committees has a written charter. The Board has determined that each member of the Audit, Compensation and Governance
Committees is an independent director under the applicable rules of the IRC, NYSE and SEC with respect to such committees.
The following is a summary of the principal responsibilities and other information regarding each of the committees:

Committee
Executive Committee

Audit Committee

Compensation Committee

Finance Committee

Governance Committee

Principal Responsibilities
• Is authorized, between meetings of the Board, to take such actions in the management of the
business and affairs of the Company which, in the opinion of the Executive Committee,
should not be postponed until the next scheduled meeting of the Board, except as limited by
the General Corporation Law of the State of Delaware, the rules of the NYSE, the
Company’s Certificate of Incorporation or By-Laws or other applicable laws or regulations.

• Assists the Board in its oversight of the integrity of the Company’s consolidated financial

statements, the Company’s compliance with legal and regulatory requirements, the
independent registered public accounting firm’s qualifications and independence and the
performance of the Company’s internal audit function and independent registered public
accounting firm.

• Reviews the Company’s internal accounting and financial controls, considers other matters
relating to the financial reporting process and safeguards of the Company’s assets and
produces an annual report of the Audit Committee for inclusion in the Company’s proxy
statement.

• The Board has determined that Mr. Minnich is an “audit committee financial expert,” as that

term is defined under regulations of the SEC.

• The report of the Audit Committee for 2019 is set forth under the caption “Audit Committee

Report.”

• Management periodically meets with the Company’s Audit Committee and reviews risks

and relevant strategies.

• Is charged with executing the Board’s overall responsibility for matters related to Chief
Executive Officer and other executive compensation, including assisting the Board in
administering the Company’s compensation programs and producing an annual report of the
Compensation Committee on executive compensation for inclusion in the Company’s proxy
statement.

• Has retained Willis Towers Watson to advise on current trends and best practices in
compensation.
• The report of the Compensation Committee for 2019 is set forth under the caption

“Compensation Committee Report.”

• Assists the Board in the oversight of the financial management of the Company including:

the capital structure of the Company;
the Company’s global financing strategies, objectives and plans;
the Company’s credit profile and ratings;
capital expenditure and investment programs of the Company;
the Company’s interests in finance joint ventures; and
the Company’s annual budget process and review.

• Assists the Board in fulfilling its responsibilities to stockholders by:

identifying and screening individuals qualified to become directors of the Company,
consistent with independence, diversity and other criteria approved by the Board,
and recommending candidates to the Board for all directorships and for service on
the committees of the Board;

developing and recommending to the Board a set of corporate governance principles

and guidelines applicable to the Company; and

overseeing the evaluation of the Board.

Succession Planning
Committee

• Assists the Board with respect to selecting, developing, evaluating and retaining the Chief

Executive Officer, executive officers and key talent; and

• Manages the succession planning process in the event the current Chief Executive Officer

cannot continue in the role.

Committee Composition and Meetings

The following table shows the current membership of each committee and the number of meetings held by each
committee during 2019. The Company will determine the composition and chair positions of the respective committees for
2020 following the Annual Meeting.

Director

Roy V. Armes
Michael C. Arnold(1)
Sondra L. Barbour

P. George Benson
Suzanne P. Clark(2)
Wolfgang Deml

George E. Minnich

Martin H. Richenhagen
Gerald L. Shaheen(3)
Mallika Srinivasan
Hendrikus Visser(4)
Total meetings in 2019

Executive

Audit

Compensation

Finance Governance

Chair

Succession
Planning

Chair

(1) Mr. Arnold will serve as the Chair of the Finance Committee effective April 30, 2020.
(2) Ms. Clark will serve as the Chair of the Compensation Committee effective April 30, 2020.
(3) Mr. Shaheen will no longer serve as the Chair or as a member of the Compensation Committee effective April 30, 2020.
(4) Mr. Visser will not stand for re-election as of April 30, 2020.

During 2019, the Board held eight meetings and each director attended at least 75% of the aggregate number of meetings

of the Board and respective committees on which he or she served while a member thereof.

Identification and Evaluation of Director Nominees

With respect to the Governance Committee’s evaluation of nominee candidates, including those recommended by

stockholders, the committee has no formal requirements or minimum standards for the individuals that are nominated.
Rather, the committee considers each candidate on his or her own merits. However, in evaluating candidates, there are a
number of factors that the committee generally views as relevant and is likely to consider to ensure the entire Board,
collectively, embraces a wide variety of characteristics, including:

•

career experience, particularly experience that is germane to the Company’s business, such as with agricultural
products and services, legal, human resources, finance and marketing experience;

experience serving on other boards of directors or in the senior management of companies that have faced issues
generally of the level of sophistication that the Company faces;

contribution to diversity of the Board;

integrity and reputation;

• whether the candidate has the characteristics of an independent director;

•

academic credentials;

other obligations and time commitments and the ability to attend meetings in person; and

current membership on the Company’s Board — our Board values continuity (but not entrenchment).

The Governance Committee does not assign a particular weight to these individual factors. Similarly, the committee does

not expect to see all (or even more than a few) of these factors in any individual candidate. Rather, the committee looks for a
mix of factors that, when considered along with the experience and credentials of the other candidates and existing directors,
will provide stockholders with a diverse and experienced Board. The committee strives to recommend candidates who each
bring a unique perspective to the Board in order to contribute to the collective diversity of the Board. Although the Company
has not adopted a specific diversity policy, the Board believes that a diversity of experience, gender, race, ethnicity and age
contributes to effective governance over the affairs of the Company for the benefit of its stockholders. With respect to the
identification of nominee candidates, the committee has not developed a single, formalized process. Instead, its members and
9

the Company’s senior management generally recommend candidates whom they are aware of personally or by reputation or
may utilize outside consultants to assist in the process.

The Governance Committee welcomes recommendations for nominations from the Company’s stockholders and
evaluates stockholder nominees in the same manner that it evaluates a candidate recommended by other means. In order to
make a recommendation, the committee requires that a stockholder send the committee:

•

a resume for the candidate detailing the candidate’s work experience and academic credentials;

• written confirmation from the candidate that he or she (i) would like to be considered as a candidate and would serve
if nominated and elected, (ii) consents to the disclosure of his or her name, (iii) has read the Company’s Global Code
of Conduct (the “Code”) and that during the prior three years has not engaged in any conduct that, had he or she been
a director, would have violated the Code or required a waiver, (iv) is, or is not, “independent” as that term is defined in
the committee’s charter, and (v) has no plans to change or influence the control of the Company;

•

the name of the recommending stockholder as it appears in the Company’s books, the number of shares of common
stock that are owned by the stockholder and written confirmation that the stockholder consents to the disclosure of his
or her name. (If the recommending person is not a stockholder of record, he or she should provide proof of share
ownership);

personal and professional references for the candidate, including contact information; and

any other information relating to the candidate required to be disclosed in solicitations of proxies for election of
directors or as otherwise required, in each case, pursuant to Regulation 14A of the Exchange Act.

The foregoing information should be sent to the Governance Committee, c/o Corporate Secretary, AGCO Corporation,

4205 River Green Parkway, Duluth, Georgia 30096, who will forward it to the chairperson of the committee. The advance
notice provisions of the Company’s By-Laws provide that for a proposal to be properly brought before a meeting by a
stockholder, such stockholder must disclose certain information and give the Company timely notice of such proposal in
written form meeting the requirements of the Company’s By-Laws no later than 60 days and no earlier than 90 days prior to the
anniversary date of the immediately preceding Annual Meeting of stockholders. The committee does not necessarily respond
directly to a submitting stockholder regarding recommendations.

Board Leadership Structure

Mr. Richenhagen, who is also the Chief Executive Officer of the Company, serves as Chairman of the Board, and
Mr. Shaheen serves as Lead Director of the Board. The Company holds executive sessions of its non-management directors at
each regular meeting of its Board. The Lead Director presides over executive sessions and at all meetings of the Board in the
absence of the Chairman, provides input to the Chairman on setting Board agendas, generally approves information sent to the
Board (including meeting schedules to assure sufficient discussion time for all agenda items), ensures that he is available for
consultation and direct communication at the request of major stockholders, leads the performance evaluation process of the
Chief Executive Officer and has the authority to call meetings of the independent directors.

The Board reviews the Company’s board leadership structure annually. As part of this process, the Board considered the
structures used by peer companies, alternative structures and the effectiveness of the Company’s current structure. The Board
believes that having the Chief Executive Officer serve as Chairman is important because it best reflects the Board’s intent that
the Chief Executive Officer function as the Company’s overall leader, while the Lead Director provides independent leadership
to the directors and serves as an intermediary between the independent directors and the Chairman. The resulting structure
sends a message to our employees, customers and stockholders that we believe in having strong, unifying leadership at the
highest levels of management. At the same time, having a Lead Director with a well-defined role provides an appropriate level
of independent oversight and an effective channel for communications when needed.

The Board of Directors has approved the waiver of the mandatory retirement age of 75 for Mr. Shaheen by one year.

He will continue to serve as Lead Director until April 22, 2021.

Risk Oversight

The Company’s management maintains a risk assessment process that identifies the risks that face the Company that
management considers the most significant. The risk assessment process also considers appropriate strategies to mitigate those
risks. Management periodically meets with the Company’s Audit Committee and reviews such risks and relevant strategies.

Corporate Governance Principles, Committee Charters and Global Code of Conduct

The Company provides various corporate governance and other information on its website. This information, which is

also available in printed form to any stockholder of the Company upon request to the Corporate Secretary, includes the
following:

•

our corporate governance principles and charters for the Audit, Compensation, Executive, Finance, Governance and
Succession Planning Committees of the Board, which are available under the headings “Governance Principles” and
“Charters of the Committees of the Board,” respectively, in the “Corporate Governance” section of our website located
under “Investors;” and

the Company’s Global Code of Conduct, which is available under the heading “Global Code of Conduct” in the
“Corporate Governance” section of our website located under “Investors.”

In addition, in the event of any waivers of the Global Code of Conduct with respect to certain executive officers, those

waivers will be available in the “Corporate Governance” section of our website.

Compensation Committee Interlocks and Insider Participation

During 2019, Messrs. Armes, Minnich and Shaheen (Chairman) and Mses. Barbour and Clark served as members of the
Compensation Committee. No member of the Compensation Committee was an officer or employee of the Company or any of
its subsidiaries during 2019. None of the Company’s executive officers serve on the board of directors of any company of
which any director of the Company serves as executive officer.

Director Compensation

The following table provides information concerning the compensation of the members of the Board for the most recently

completed year. As reflected in the table, each non-employee director received an annual base retainer of $120,000 plus
$150,000 in restricted shares of the Company’s common stock for Board service. Committee chairmen received an additional
annual retainer of $15,000 (or $25,000 for the chairman of the Audit Committee and $20,000 for the chairman of the
Compensation Committee). Mr. Shaheen, who was the Lead Director in 2019, also received an additional annual $30,000
Lead Director’s fee. Each non-employee director received an additional annual retainer of $6,000 if they served on three or
more board committees. The Company does not have any consulting arrangements with any of its directors.

Name
Roy V. Armes
Michael C. Arnold
Sondra L. Barbour
P. George Benson
Suzanne P. Clark
Wolfgang Deml
George E. Minnich
Gerald L. Shaheen
Mallika Srinivasan
Hendrikus Visser

Total

2019 DIRECTOR COMPENSATION

Fees Earned or
Paid in Cash
($)

Stock Awards(1)
($)

All Other
Compensation(2)
($)

Total
($)

120,000
121,125
82,088
135,000
120,000
135,000
151,000
176,000
120,000
141,000
1,301,213

150,000
150,000
—
150,000
150,000
150,000
150,000
150,000
150,000
150,000
1,350,000

—
655
—
1,302
—
4,216
809
—
—
5,997
12,979

270,000
271,780
82,088
286,302
270,000
289,216
301,809
326,000
270,000
296,997
2,664,192

(1) The Long-Term Incentive Plan provides for annual restricted stock grants of the Company’s common stock to all

non-employee directors. For 2019, each non-employee director was granted $150,000 in restricted stock. All restricted stock
grants are restricted as to transferability for a period of one year following the award. In the event a director departs from
the Board, the non-transferability period expires immediately. The 2019 annual grant occurred on April 25, 2019.
The total grant on April 25, 2019 was 19,386 shares, or 2,154 shares per director. The amounts above reflect the
aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting
Standards Codification Topic 718, “Compensation-Stock Compensation” (“ASC 718”).

After shares were withheld for income tax purposes, each director held the following shares as of December 31, 2019
related to this grant: Mr. Armes — 2,154 shares; Mr. Arnold — 1,615 shares; Mr. Benson — 1,292 shares;
Ms. Clark — 1,507 shares; Mr. Deml — 1,292 shares; Mr. Minnich — 1,292 shares; Mr. Shaheen — 1,292 shares;
Ms. Srinivasan — 2,154 shares; and Mr. Visser — 1,507 shares.

(2) Relates to travel expenses incurred by spouses to accompany board members to a business-related event.

Director Attendance at the Annual Meeting

The Board has adopted a policy that all directors on the Board are expected to attend Annual Meetings of the Company’s

stockholders. All of the directors on the Board, except for Messrs. Armes and Visser, attended the Company’s previous
Annual Meeting held in April 2019.

Stockholder Communication with the Board of Directors

The Company encourages stockholders and other interested persons to communicate with members of the Board.
Any person who wishes to communicate with a particular director or the Board as a whole, including the Lead Director or any
other independent director, may write to those directors in care of Corporate Secretary, AGCO Corporation, 4205 River Green
Parkway, Duluth, Georgia 30096. The correspondence should indicate the writer’s interest in the Company and clearly specify
whether it is intended to be forwarded to the entire Board or to one or more particular directors. The Corporate Secretary will
forward all correspondence satisfying these criteria.

PROPOSAL NUMBER 2

NON-BINDING ADVISORY RESOLUTION TO APPROVE THE
COMPENSATION OF THE COMPANY’S NEOS

The Board is submitting a “say-on-pay” proposal for stockholder consideration. While the vote on executive

compensation is non-binding and solely advisory in nature, the Board and the Compensation Committee will review the voting
results and seek to determine the causes of any negative voting result to better understand any issues and concerns that our
stockholders may have. We intend to hold annual say-on-pay votes. Stockholders who want to communicate with the Board or
management regarding compensation-related matters should refer to “Stockholder Communication with the Board of
Directors” in this proxy statement for additional information.

The Board recommends that stockholders vote to approve, on an advisory basis, the compensation paid to the Company’s

Named Executive Officers (“NEOs”), as described in this proxy statement.

Compensation Philosophy and Program Design

The Company’s compensation philosophy and program design is intended to support the Company’s business strategy
and align executives’ interests with those of stockholders and employees (i.e., pay for performance). A significant portion of the
Company’s executive compensation opportunity is related to factors that directly and indirectly influence stockholder value.
The Company believes that as an executive’s responsibilities increase, so should the proportion of his or her total pay
comprised of annual incentive cash bonuses and long-term incentive (“LTI”) compensation, which supports and reinforces the
Company’s pay for performance philosophy.

Best Practices in Executive Compensation

The Compensation Committee regularly reviews best practices related to executive compensation to ensure alignment

with the Company’s compensation philosophy, business strategy and stockholder focus. The Company’s executive
compensation programs consist of the following, several features of which were added in response to stockholder feedback:

• A formal compensation philosophy approved by the Compensation Committee that targets executive’s total

compensation levels (including NEOs) at the median (or 50th percentile) of the market and provides opportunity for
upside compensation levels for excellent performance;

• A well-defined peer group of similar and reasonably-sized industrial and manufacturing comparators to benchmark

NEO and other officer compensation;

• An annual incentive compensation plan (“IC Plan”) that includes a minimum net income threshold that must be met
before a payout is earned, a maximum payout level of 200% of target, and multiple performance measures that drive
stockholder value and improvement in operational results, which mitigate too heavy of a focus on any one
performance measure in particular;

• A balanced long-term incentive plan (“LTI Plan”) consisting of a performance share plan, which comprises

approximately 60% of an NEO’s target LTI award, restricted stock units (“RSUs”), which comprises approximately
20% of an NEO’s target LTI award, and a grant of stock-settled stock appreciation rights, which comprises
approximately 20% of an NEO’s target LTI award. Each LTI vehicle contains a strong performance or retention
orientation and aligns closely with stockholder interests;

• Beginning in 2020, a performance-based adjustment of RSU awards;

• Beginning with 2018, awards under the LTI Plan, a so-called “double trigger” equity vesting in the event of change of

control;

• A clawback policy, which allows the Company to take remedial action against an executive if the Board determines

that an executive’s misconduct contributed to the Company having to restate its financial statements;

•

Stock ownership requirements that encourage executives to own a specified level of stock, which emphasizes the
alignment of their interests with those of stockholders;

• Modest perquisites for executives (including NEOs);

• A plan design that mitigates the possibility of excessive risk that could harm long-term stockholder value;

•

For new executive employment agreements beginning in 2017, no gross-ups for excise taxes on severance payments
due to a change of control; and

• A conservative approach to share usage associated with our stock compensation plans.

When the Compensation Committee diverges from these practices - one variance is described below - it does so only

after careful consideration and input from its compensation consultant. Ultimately, the Compensation Committee has and will
continue to take action to structure the Company’s executive compensation practices in a manner that is consistent with its
compensation philosophy, business strategy and stockholder focus.

Company Performance

The agricultural equipment industry is cyclical, with sales largely dependent on the health of the overall farm economy,

which is influenced by commodity prices and farm income. Industry demand, which was projected to improve modestly in
2019, was lower than 2018. However, as a result of cost containment and other margin improvement programs implemented by
management, our adjusted operating margins improved in 2019 compared to 2018. This result compares favorably to the
decline in operating margins experienced by some of our key competitors. We also generated substantial cash flow from
operations in excess of our target in 2019.

Compensation actions taken for NEOs in 2019 include:

• Modest merit increases of base compensation, other than in connection with promotions;

•

IC Plan payouts for corporate goal achievement at 130% of target;

• LTI Plan payouts at 200% of target for the 2017-2019 three-year performance cycle (which targets were set during an

industry low point); and

• Modification of performance metrics to focus on margin improvement.

Over the past several years, the Company engaged in discussions with stockholders regarding the Company’s compensation
philosophy and programs, and it received comments and feedback on a number of matters. As part of these outreach efforts,
we held in-person or telephonic meetings with stockholders representing a significant portion of the Company’s outstanding
shares. Overall, the feedback was positive. Based upon that feedback, the Compensation Committee has made various changes.
For example, beginning in 2020, the adjustment of RSU awards will be based on our achievement of operating margin
improvement relative to an agricultural equipment and industrial company peer group in order to improve pay-for-performance
alignment by putting a portion of the RSU award at risk.

The “Compensation Discussion and Analysis” section of this proxy statement and the accompanying tables and narrative
provide a comprehensive review of the Company’s NEO compensation objectives, programs and rationale. We urge you to read
this disclosure before voting on this proposal.

We are asking our stockholders to indicate their support for the Company’s NEO compensation as described in this proxy

statement. This proposal gives our stockholders the opportunity to express their views on the Company’s NEO compensation.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s
NEOs and the philosophy, policies and practices thereof described in this proxy statement. Accordingly, we ask our
stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s
named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis, the 2019 Summary Compensation Table and the
other related tables and accompanying narrative set forth in this Proxy Statement.”

The Board recommends a vote “FOR”
the non-binding advisory resolution to approve the compensation of the Company’s NEOs.

PROPOSAL NUMBER 3

RATIFICATION OF COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 2020

The Company’s independent registered public accounting firm is appointed annually by the Audit Committee. The Audit

Committee examines a number of factors when selecting a firm, including the qualifications, staffing considerations, and the
independence and quality controls of the firms considered. The Audit Committee has appointed KPMG LLP as the Company’s
independent registered public accounting firm for 2020. KPMG LLP served as the Company’s independent registered public
accounting firm for 2019 and is considered to be well-qualified.

In view of the difficulty and expense involved in changing independent registered public accounting firms on short

notice, should the stockholders not ratify the selection of KPMG LLP as the Company’s independent registered public
accounting firm for 2020 under this proposal, it is contemplated that the appointment of KPMG LLP for 2020 will be
permitted to stand unless the Board finds other compelling reasons for making a change. Disapproval by the stockholders
will be considered a recommendation that the Board select another independent registered public accounting firm for the
following year.

A representative of KPMG LLP is expected to be present at the Annual Meeting and will be given the opportunity to

make a statement, if they desire, and to respond to appropriate questions.

The Board recommends a vote “FOR”
the ratification of the Company’s independent registered public accounting firm for 2020.

OTHER BUSINESS

The Board does not know of any matters to be presented for action at the Annual Meeting other than the election of
directors, the non-binding advisory resolution to approve the compensation of the Company’s NEOs, and the ratification of the
Company’s independent registered public accounting firm for 2020. If any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy card intend to vote thereon in accordance with their best
judgment.

PRINCIPAL HOLDERS OF COMMON STOCK

The following table sets forth certain information as of March 20, 2020 regarding persons or groups known to the
Company who are, or may be deemed to be, the beneficial owner of more than five percent of the Company’s common stock.
This information is based upon SEC filings by the individual and entities listed below, and the percentage given is based on
75,054,096

shares outstanding.

Name and Address of Beneficial Owner

Mallika Srinivasan
Old No. 35, New No. 77, Nungambakkam High Road
Chennai 600 034, India

Tractor and Farm Equipment Limited
Old No. 35, New No. 77, Nungambakkam High Road
Chennai 600 034, India

BlackRock, Inc.
55 East 52nd Street
New York, NY 10022

The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355

Shares of
Common Stock
12,167,373 (1)

Percent of
Class
16.2%

12,150,152

16.2%

6,226,657 (2)

8.3%

5,905,651 (3)

7.9%

(1) Includes shares held individually (17,221 shares) and through TAFE and TAFE Motors and Tractors

Limited (12,150,152 shares). Based upon SEC filings made by Ms. Srinivasan.

(2) BlackRock, Inc. has sole voting power with respect to 5,842,380 of its shares and sole dispositive

power with respect to all 6,226,657 of its shares.

(3) The Vanguard Group has sole voting power with respect to 32,182 of its shares, shared voting power
with respect to 9,544 of its shares, sole dispositive power with respect to 5,872,145 of its shares and
shared dispositive power with respect to 33,506 of its shares.

The following table sets forth information regarding beneficial ownership of the Company’s common stock by the
Company’s directors, the director nominees, the Chief Executive Officer of the Company, the Chief Financial Officer of the
Company, the other NEOs and all executive officers and directors as a group, all as of March 20, 2020. Except as otherwise
indicated, each such individual has sole voting and investment power with respect to the shares set forth in the table.

Name of Beneficial Owner
Roy V. Armes

Michael C. Arnold

Sondra L. Barbour

P. George Benson

Suzanne P. Clark

Wolfgang Deml

George E. Minnich

Gerald L. Shaheen
Mallika Srinivasan(2)
Hendrikus Visser

Andrew H. Beck
Eric P. Hansotia

Martin H. Richenhagen
(3)

Rob Smith

Hans-Bernd Veltmaat

All executive officers and directors
as a group (24 persons)

* Less than one percent

Shares of
Common
Stock(1)

Shares That
May be
Acquired
Within 60
Days

Percent of
Class

11,754

11,814

—

16,569

2,846

23,689

19,160

17,380

12,167,373

24,236

112,779

31,566

527,398

90,796
78,757

13,352,791

—

16.2%

17.8%

(1) Includes the following number of restricted shares of the Company’s common stock as a result of

restricted stock grants under the Company’s incentive plans by the following individuals:
Mr. Armes — 2,154; Mr. Arnold — 1,615; Mr. Benson — 1,292; Ms. Clark — 1,507;
Mr.Deml — 1,292; Mr. Minnich — 1,292; Mr. Shaheen — 1,292; Ms. Srinivasan — 2,154;
Mr. Visser — 1,507; All directors as a group — 14,105.

(2) Includes shares held individually (17,221 shares) and through TAFE and TAFE Motors and Tractors

Limited (12,150,152 shares). Ms. Srinivasan is the Chairman and Managing Director of TAFE and
the Company owns a 23.75% interest in TAFE.

(3) Mr. Smith resigned from the Company effective January 31, 2020. Mr Smith s beneficial ownership
of the Company s common stock is as of August 12, 2019, the date of his most recent Form 4 filing.

The following table sets forth information as of March 20, 2020, with respect to each person who is an executive of the

EXECUTIVE COMPENSATION

Company.

Name
Martin H. Richenhagen

Bradley C. Arnold

Roger N. Batkin

Andrew H. Beck

Stefan Caspari

Gary L. Collar

Robert B. Crain

Torsten R.W. Dehner

Helmut R. Endres

Luis F.S. Felli

Eric P. Hansotia

Lucinda B. Smith
Rob Smith

Josip T. Tomasevic

Hans-Bernd Veltmaat

Age

60
53

53
54
52

Chairman of the Board, President and Chief Executive Officer
Senior Vice President — Global Crop Cycle and Fuse Connected Services

Positions

Senior Vice President — General Counsel and Corporate Secretary

Senior Vice President — Chief Financial Officer
Senior Vice President and General Manager, Grain and Protein

Senior Vice President and General Manager, Asia/Pacific/Africa

Senior Vice President and General Manager, North America
Senior Vice President and General Manager, Europe/Middle East

Senior Vice President — Engineering
Senior Vice President and General Manager, South America

Senior Vice President — Chief Operating Officer

Senior Vice President — Global Business Services
Former Senior Vice President and General Manager, Europe/Middle East

Senior Vice President — Chief Procurement Officer

Senior Vice President — Chief Supply Chain Officer

Bradley C. Arnold has been Senior Vice President — Global Crop Cycle and Fuse Connected Services since
January 2020. Mr. Arnold was Vice President, Global Crop Cycle and Fuse from January 2019 to December 2019,
General Manager of Precision Planting LLC from 2014 to 2019, Commercial Services Director from 2012 to 2014 and
Director of International Business Development from 2009 to 2012. Prior to joining Precision Planting LLC, Mr. Arnold
held various leadership positions at Caterpillar Inc.

Roger N. Batkin has been Senior Vice President — General Counsel and Corporate Secretary since January 2018.
From 2013 to 2017, Mr. Batkin was Vice President, General Counsel and Corporate Secretary. Mr. Batkin was Vice President,
Legal Services and Chief Compliance Officer for Europe/Africa/Middle East and Asia/Pacific from 2010 to 2013. Mr. Batkin
was also Director of the Company’s U.K. Operations between 2009 and 2013. Prior to joining the Company, Mr. Batkin was
an attorney with an international law firm.

Andrew H. Beck has been Senior Vice President — Chief Financial Officer since June 2002. Mr. Beck was

Vice President, Chief Accounting Officer from January 2002 to June 2002, Vice President and Controller from 2000 to 2002,
Corporate Controller from 1996 to 2000, Assistant Treasurer from 1995 to 1996 and Controller, International Operations from
1994 to 1995.

Stefan Caspari has been Senior Vice President and General Manager, Grain and Protein since January 2020. Mr. Caspari

was Vice President and General Manager, Grain and Protein from April 2019 to December 2019, Vice President, Fuse
Connected Services and Technology from 2017 to April 2019, Vice President, Global Strategy and Integration from 2015 to
2017 and Director, Strategy and Integration for Europe/Middle East from 2014 to 2016. Prior to joining the Company,
Mr. Caspari held several leadership positions at Zurich Insurance Group Ltd. and Arthur D. Little consulting firm.

Gary L. Collar has been Senior Vice President and General Manager, Asia/Pacific/Africa since January 2017. Mr. Collar

was Senior Vice President and General Manager, Asia/Pacific from 2012 to 2016. Mr. Collar was Senior Vice President and
General Manager, Europe/Africa/Middle East and Australia/New Zealand from 2009 until 2011 and Senior Vice President and
General Manager Europe/Africa/Middle East and Asia/Pacific from 2004 to 2008. Mr. Collar was Vice President, Worldwide
Market Development for the Challenger Division from 2002 until 2004. Between 1994 and 2002, Mr. Collar held various
senior executive positions with ZF Friedrichshaven A.G., including Vice President Business Development, North America,
from 2001 until 2002, and President and Chief Executive Officer of ZF-Unisia Autoparts, Inc., from 1994 until 2001.
In addition, Mr. Collar is a member of the Board of Directors for Hillenbrand, Inc., a publicly traded company in the United
States that designs, develops and manufactures engineered industrial equipment and funeral service products.

Robert B. Crain has been Senior Vice President and General Manager, North America since January 2020. Mr. Crain was

Senior Vice President and General Manager, Americas from 2015 to December 2019, and Senior Vice President and General
Manager, North America from 2006 to 2014. Mr. Crain held several positions within CNH Global N.V. and its predecessors,

including Vice President of New Holland’s North America Agricultural Business, from 2004 to 2005, Vice President of CNH
Marketing North America Agricultural business, from 2003 to 2004 and Vice President and General Manager of Worldwide
Operations for the Crop Harvesting Division of CNH Global N.V. from 1999 to 2002. Mr. Crain is also an officer of the
Association of Equipment Manufacturers.

Torsten R.W. Dehner has been Senior Vice President and General Manager, Europe/Middle East since January 2020.

Mr. Dehner was Vice President, Global Parts and Europe/Middle East Parts and Services from 2018 to December 2019,
Vice President, Purchasing and Materials, Europe/Middle East - Commodity Director Powertrain & Perifery from 2015 to
2018, and Vice President, Purchasing and Materials, Europe/Middle East from 2010 to 2015. Prior to joining the Company,
Mr. Dehner held a number of leadership positions at Behr GmbH & Co. KG.

Helmut R. Endres has been Senior Vice President — Engineering since December 2011. Between 2006 and 2010,
Mr. Endres was Chief Technological Officer and Vice President, Engineering, International Trucks and Engines for Navistar
International Corporation. Between 1995 and 2006, Mr. Endres worked at Volkswagen (including the Audi division) in various
roles, including Executive Director, Group Powertrain and Director, Gasoline Engines. He was a member of the Audi Executive
Board’s product Strategy Committee and Chairman of the Volkswagen Group Powertrain Strategy Committee. Between 1982
and 1995, Mr. Endres was with FEV, Inc. in Germany serving in various gasoline and diesel engine engineering roles, including
head of the European Business Unit, and leading the Combustion Technologies Divisions.

Luis F.S. Felli has been Senior Vice President and General Manager, South America since January 2020. Mr. Felli joined
the Company in 2018 as President, AGCO, South America. Prior to joining AGCO, Mr. Felli held several leadership positions
including General Director of Unipar Indupa S.A.I.C. from February 2017 to November 2017, Commercial Operations Director
for Eldorado Brasil Celulose S.A. from 2013 to 2017, Operations Vice President for Atvos Agroindustrial Investimentos S.A.
from 2008 to 2013, and Executive Vice President for Braskem S.A. from 2006 to 2008. Mr. Felli began his career at FMC
Corporation.

Eric P. Hansotia has been Senior Vice President — Chief Operating Office since January 2019. He served as Senior
Vice President, Global Crop Cycle and Fuse Connected Services, from 2015 to January 2019 and as Senior Vice President,
Global Harvesting and Advanced Technology Solutions, from 2013 to 2015. Prior to joining AGCO, Mr. Hansotia held several
positions within John Deere including Senior Vice President, Global Harvesting, from 2012 to 2013 and Vice President, Global
Crop Care based in Mannheim, Germany from 2009 to 2012. Prior positions with John Deere include: from 2005 to 2009 —
General Manager, Harvester Works; from 2004 to 2005 — Vice President, Global Forestry; and from 1993 to 2004 — various
roles at John Deere.

Lucinda B. Smith has been Senior Vice President — Global Business Services since March 2013. She is responsible for

the functional management of all Human Resources and Information Technology organizations worldwide as well as for
AGCO’s Shared Services Center in Budapest, Hungary. Ms. Smith was Senior Vice President — Human Resources from
2009 to 2013; Vice President, Global Talent Management & Rewards from May 2008 to December 2008; and Director of
Organizational Development and Compensation from 2006 to 2008. From 2005 to 2006, Ms. Smith was Global Director of
Human Resources for AJC International, Inc. Ms. Smith also held various domestic and global human resource management
positions at Lend Lease Corporation, Cendian Corporation and Georgia-Pacific Corporation.

Rob Smith was Senior Vice President and General Manager, Europe/Middle East from 2017 to January 2020. Mr. Smith

was Senior Vice President and General Manager, Europe/Africa/Middle East from 2013 to 2016. Mr. Smith was the
Vice President & General Manager of the global Engine Components Division for TRW Automotive from 2007 to 2013.
He served as the Chairman of the Supervisory Board of TRW Automotive GmbH from 2009 to 2013. Prior to joining TRW,
Mr. Smith served as Vice President of the Global Automotive Division at Tyco Electronics from 2005 to 2006, and Vice
President & General Manager of Bombardier Transportation’s Aftermarket Parts and Material Repair and Overhaul business
from 2002 to 2005. From 1993 to 2001, he served in various operations and supply chain roles in the global automotive
industry with LucasVarity PLC, Lucas Industries PLC and BMW. Mr. Smith is a member of the Board of Directors and
Chairman of the Technology Committee of FLSmidth & Co A/S in Copenhagen, Denmark.

Josip T. Tomasevic has been Senior Vice President — Chief Procurement Officer since January 2019. From 2011 to 2018,
Mr. Tomasevic was Vice President — Global Purchasing Materials. Prior to joining the Company, Mr. Tomasevic was Head of
Corporate Purchasing at Claas KGaA mbH.

Hans-Bernd Veltmaat has been Senior Vice President — Chief Supply Chain Officer since January 2012. Mr. Veltmaat
serves on the Industry Executive Advisory Board for the Executive MBA in Supply Chain Management Program at the Swiss
Federal Institute of Technology Zurich. Mr. Veltmaat was Senior Vice President — Manufacturing & Quality from 2008 to
2011. Mr. Veltmaat was Group Executive Vice President of Recycling Plants at Alba AG from 2007 to 2008. From 1996 to
2007, Mr. Veltmaat held various positions with Claas KGaA mbH in Germany, including Group Executive Vice President,
a member of the Claas Group Executive Board and Chief Executive Officer of Claas Fertigungstechnik GmbH.

Introduction

COMPENSATION DISCUSSION AND ANALYSIS

The design and implementation of our compensation programs are intended to emphasize a strong pay-for-performance
alignment, provide appropriate rewards and incentives to our NEOs at a reasonable cost to the Company and, at the same
time, to do so in a manner consistent with the views expressed by our stockholders. We believe that our current programs, and
the actions taken over the last several years, are consistent with this intent. Highlights include:

• A continuation of compensation that is highly weighted - on average, approximately 75% - to variable or “at risk”

compensation;

• Targeting compensation at the median (50th percentile) of our peer group;

• A continued focus on aligning incentives with corporate strategy; and

• Extensive stockholder outreach and changes reflective of that process, including:

Beginning in 2018, the implementation of “double trigger” vesting in connection with future equity awards;

Elimination of excise tax gross-ups from future employment agreements; and

Commencing in 2020, the addition of an adjustment to restricted stock unit (“RSU”) awards based upon

operating margin improvement relative to an agricultural equipment and industrial company peer group and
the addition of three-year cliff vesting (rather than annual vesting).

Establishing appropriate executive compensation, particularly incentive compensation, is challenging due to the cyclical
nature of the agricultural equipment industry. Our objective has been to provide targets that are achievable within the expected
industry conditions during the performance period. We believe this approach maximizes our performance at all points in the
cycle and, critically, supports retention of executives. We aim to establish performance targets for a fiscal year near the financial
outlook communicated to investors at the start of that fiscal year. Over the past several years, agricultural equipment industry
sales have stabilized and this has impacted our incentive compensation plan goal-setting process. The goals established reflect
year-over-year increases, incorporating applicable rigor and stretch in incentive goal setting to ensure goals are aligned with
current competitive market conditions.

Below we describe our compensation philosophy, the compensation programs provided to our NEOs and the
decision-making process followed in setting compensation for our NEOs during 2019. This discussion should be read
in conjunction with the tables and related narratives that follow. Our NEOs for these purposes are:

• Andrew H. Beck, Senior Vice President — Chief Financial Officer

• Eric P. Hansotia, Senior Vice President — Chief Operating Officer

• Martin H. Richenhagen, Chairman of the Board, President and Chief Executive Officer

• Rob Smith, Former Senior Vice President and General Manager, Europe/Middle East

• Hans-Bernd Veltmaat, Senior Vice President — Chief Supply Chain Officer

At the 2019 Annual Meeting, our stockholders expressed disapproval of our executive compensation programs through

their non-binding advisory vote, in which only 33% of shares voted in favor of our executive compensation policies and
practices. Based upon our stockholder outreach and the recommendations of the major proxy advisory firms, we believe that
this low level of support largely is responsive to the one-time retention award in 2018 for Mr. Richenhagen.

During each of the last several years, we engaged in an outreach program with stockholders to discuss our compensation

philosophy and programs and to receive comments and feedback on a number of matters. We value and seriously consider
feedback from our stockholders. Our Compensation Committee Chairman participated in a number of stockholder meetings to
answer questions and to provide his perspective on our compensation plans. Many important topics were discussed, including
target-setting and maintaining a competitive pay structure during the industry down cycles. As part of these outreach efforts,
we held in-person or telephonic meetings with stockholders representing a significant portion of our outstanding shares.
The majority of stockholder feedback was positive and provided support for our overall compensation policy and decisions.
We did make several changes to our compensation policies based on stockholder feedback, such as eliminating from future
employment agreements the gross-up for excise taxes on severance payments due to a change in control, adopting a
“double trigger” equity vesting in connection with future equity awards, modifying our peer group to better align with our
current revenue size and, beginning in 2020, the adjustment of RSU awards based on our achievement of operating margin
improvement relative to an agricultural equipment and industrial company peer group in order to improve pay-for-performance
alignment by putting a portion of the RSU award at-risk.

Consistent with our commitment to executive compensation best practices, some of which are discussed in Proposal

Number 2 above, the following executive compensation practices are in place:

• The financial performance objectives in our annual and long-term incentive plans are reviewed and approved annually

by the Compensation Committee;

• Our annual and long-term incentive plans consist of multiple performance objectives, mitigating focus on any one

objective in particular;

• The vesting period for our NEOs’ stock-settled stock appreciation rights is 48 months, and the periods for performance

shares and RSUs generally are 36 months;

• Our NEOs (and directors) are subject to stock ownership requirements;

• Compensation levels for our executives (including NEOs) generally are targeted at median levels of market

competitiveness;

• Our compensation programs support a conservative approach to share usage associated with our stock compensation

plans;

• The design of our compensation programs attempts to mitigate the possibility of excessive risk-taking that could harm

the long-term value of AGCO;

•

For new executive employment agreements beginning in 2017, there is no gross-up for excise taxes on severance
payments due to a change in control;

• We adopted double-trigger equity vesting in the case of a change-in-control for equity awards made in 2018 and

subsequent periods; and

• We have a clawback provision in place that can require the return of any bonus or incentive compensation.

Compensation Philosophy and Governance

It is AGCO’s practice to compensate executive officers through a combination of cash and equity compensation,

retirement programs and other benefits. Our primary objectives are to provide compensation programs that:

• Are aligned with median market levels and competitive with companies of similar revenue size and complexity;

• Align with stockholder interests;

• Reward performance;

• Attract and retain quality management;

• Encourage executive stock ownership;

• Mitigate excessive risk-taking; and

• Are substantially consistent among our locations worldwide.

AGCO’s compensation philosophy is reviewed regularly and most recently was updated and approved by the
Compensation Committee in July 2019. The philosophy is intended to articulate our principles and strategy for total
compensation and specific pay program elements. It is closely aligned with our business strategy and reflects performance
attributes and, as such, ties executives’ interests to those of our stockholders and other employees.

We implement this compensation philosophy through five primary elements of compensation:

Component

Base Salary

Annual Management
Incentive Plan
(“IC Plan”)

Philosophy

• Establishes the foundation of total

compensation and supports attraction and
retention of qualified staff

• Facilitates alignment of management with

corporate objectives to achieve outstanding
performance and meet specific AGCO
financial goals

Strategy/Competitive Positioning
• Generally targeted at median levels of other
industrial companies of similar revenue and
complexity

• Target award opportunities competitive with
median levels of other industrial companies
of similar size and complexity, with minimum
and maximum award opportunities ranging
from 50% to 200% of target, respectively

Long-Term
Incentives
(“LTI Plan”)

• Engages management in achieving longer-

term performance goals and making
decisions in the best interests of stockholders

• Target award opportunities competitive with
median levels of other industrial companies
of similar size and complexity

Retirement Benefits

• Supports the attraction and retention of key

executives

• Competitive with general market practices;
consists of 401(k) and non-qualified benefits

• For executives who became eligible to

participate in the non-qualified benefits prior
to August 1, 2015, these benefits consist of the
Executive Nonqualified Pension Plan
(“ENPP”), which for vesting requires
executives to remain employed with the
Company until attaining at least age 50 with
ten years of service (five years of which must
include participation in the ENPP)

• For executives promoted or hired after

August 1, 2015, those benefits consist of a
nonqualified defined contribution plan

Perquisites

• Supports the attraction and retention of key

• Minimal use, as appropriate

executives

As discussed elsewhere, on occasion, we have concluded that varying or additional awards were appropriate in light of

special circumstances.

We believe that as an executive’s responsibilities increase, so should the proportion of his or her total pay comprised of
annual incentive cash bonuses and long-term incentive compensation. As illustrated below, on average over 75% of our NEO
compensation was variable or “at risk” and tied to AGCO’s performance with the greatest portion associated with long-term
incentives:

When establishing compensation and performance criteria, goals are set that we believe reflect key areas of performance
supporting our long-term success. We consider factors such as our current performance compared to industry peers, desired
levels of performance improvement, and industry trends and conditions when determining performance expectations within our
compensation plans.

Compensation Consultant Independence

The Compensation Committee approves all compensation for executive officers, including the structure and design of the
compensation programs. The Compensation Committee is responsible for retaining compensation consultants and determining
the terms and conditions of their engagement, including fees. Since 2005, the Compensation Committee has engaged Willis
Towers Watson, a globally recognized advisory, brokering and solutions company, to advise the Compensation Committee
(and at times management) with respect to our compensation programs and to perform various related studies and projects,
including market analysis and compensation program design. A Willis Towers Watson representative reports directly to the
Compensation Committee as its compensation advisor.

The Compensation Committee annually reviews the role of its compensation advisor and believes that the advisor is fully

independent for purposes of providing on-going recommendations regarding executive compensation. In addition, and in
conjunction with the SEC requirements that public companies formally review advisor independence, the Compensation
Committee concluded that the compensation advisor is independent and provides candid, direct and objective advice to the
Compensation Committee. To ensure independence:

• The Compensation Committee directly hired and has the authority to terminate the compensation advisor;

• The compensation advisor reports directly to the Compensation Committee and the chairperson;

• The compensation advisor meets regularly and as needed with the Compensation Committee in executive sessions that

are not attended by any of our officers;

• The compensation advisor and the team at Willis Towers Watson have direct access to all members of the

Compensation Committee during and between meetings;

• No regular member of the Willis Towers Watson executive compensation team owns any stock of AGCO, other than

possibly investments in mutual funds or other funds that are managed without the member’s input; and

• The executive compensation advisor and team at Willis Towers Watson do not have any personal or business

relationships with any member of the Compensation Committee or executive officer of AGCO.

Willis Towers Watson provides the Compensation Committee with an annual update on its services and related fees.
The Compensation Committee determines whether Willis Towers Watson’s services are performed objectively and free from the
influence of management. With the full knowledge of the Compensation Committee, AGCO has retained a distinct and separate
unit of Willis Towers Watson for other services, including broad-based employee retirement and benefit services, and specific
projects within multiple countries for various Company subsidiaries, consisting primarily of actuarial services for our defined
benefit plans and pension administration services.

The Compensation Committee also closely examines the safeguards and steps Willis Towers Watson takes to ensure that

its executive compensation consulting services are objective. For example:

• Willis Towers Watson has separated its executive compensation consulting services into a single, segregated business

unit within Willis Towers Watson;

• Willis Towers Watson associates are subject to a comprehensive Code of Conduct and Ethics, which addresses issues
including conflicts of interest and associates’ ownership and trading of client company stock, among other areas;

• The compensation advisor receives no direct incentives based on other services Willis Towers Watson provides to

AGCO;

• The compensation advisor is not the Willis Towers Watson client relationship manager for AGCO; and

• Neither the compensation advisor nor any member of the advisor’s team participates in any activities related to the

services provided to AGCO by other Willis Towers Watson business units.

For these reasons, the Compensation Committee does not believe that Willis Towers Watson’s services for AGCO’s

employee retirement and benefit plans, or its specific projects, compromise its compensation advisor’s ability to provide the
Compensation Committee with perspective and advice that is independent and objective.

The total amount of fees for consulting services provided to the Compensation Committee in 2019 by its compensation
advisor was approximately $300,000. The total amount of fees paid by AGCO to Willis Towers Watson in 2019 for all other
services, excluding Compensation Committee services, was approximately $1,300,000. These other services are mainly related
to actuarial services for our defined benefit plans and pension administration services and health and group benefits consulting.

Competitive Analyses

We perform competitive market analyses with respect to cash compensation, long-term equity incentives and executive

retirement programs. These analyses are conducted periodically and include a comparison to nationally recognized
compensation surveys, as well as a comparison to a peer group of other industrial companies. These competitive analyses
provide us with information regarding ranges and median compensation levels, as well as the types of compensation practices
followed at other companies. The analyses are used to review, monitor and establish appropriate and competitive compensation
guidelines, determine the appropriate mix of compensation programs and establish the specific compensation levels for our
executives.

The Compensation Committee performed an external market review in 2019 that examined the competitiveness of the

Company’s NEOs’ total compensation. The analysis reviewed the dollar value of the compensation, as well as the mix of
compensation between base salary, annual cash incentive bonus and LTI pay. The Compensation Committee’s goal is to provide
base salary, target total cash compensation (e.g., base salary plus target bonus opportunity) and target total direct compensation
(e.g., target total cash plus target LTI opportunity) for each NEO that is competitive with the market median, and the
competitive market rate is based on published survey data for companies of similar revenue size and information from peer
proxy statements, where applicable.

The Compensation Committee uses the external market review to help it make informed decisions regarding NEO

compensation. For the Chief Executive Officer, the Compensation Committee recognizes the critical nature of this role, his
higher level of responsibility within the Company and his more pervasive influence over our performance and, therefore,
provides market competitive levels of compensation that differ from levels of compensation paid to other NEOs, based on
median market information and benchmarking.

It is our philosophy to compensate Senior Vice Presidents (“SVPs”) relative to their particular function, scope and

industry comparator.

The Compensation Committee, in recognition of the collaborative efforts of the General Managers operating not only

their respective businesses, but also our worldwide business, sets the compensation of all General Managers at similar levels.
In Mr. Beck’s case, the Compensation Committee’s view is that the Chief Financial Officer should not be paid significantly
more than the General Managers, which is consistent with our compensation philosophy and reinforced by the internal grouping
of the Company’s executives. However, in recognition that external market data for Mr. Beck’s position is higher than external
market data for the General Managers, he received a slightly larger LTI award in 2019. In the case of Mr. Veltmaat, the pay
positioning of his role is targeted to approximate the upper end of the grade range due to the criticality of his role within the
organization.

As part of its regular process, the Compensation Committee reviewed our peer group in July 2019 to ensure that the
included companies are appropriate comparators for determining whether total compensation for NEOs aligns with market.
Industrial and other equipment manufacturers approximately one-half to two times AGCO’s revenue size are primarily
considered by the Compensation Committee. No changes were made to the peer group. The Compensation Committee believes
that the companies in the current peer group reflect AGCO’s size and align with our business and the markets in which we
serve and operate as well as recruit talent. The composition of the current peer group (17 companies) is shown below:

• BorgWarner Inc.

• Cummins, Inc.

• Dover Corporation

• Flowserve Corporation

• Illinois Tool Works Inc.

• Masco Corporation

• Rockwell Automation, Inc.

• Navistar International Corporation

• Stanley Black & Decker

• Oshkosh Corporation

• PACCAR Inc.

• Terex Corporation

• Trinity Industries, Inc.

• Parker Hannifin Corporation

• Textron Inc.

• Ingersoll-Rand Company Limited

• Pentair plc

The Compensation Committee will continue to regularly review the composition of the peer group and make updates as

needed.

Base Salary

In April 2019, the Compensation Committee provided market-aligned base salary increases to our NEOs. No base salary

increase was provided to Mr. Richenhagen, our Chief Executive Officer. His base salary remained at $1,385,942. Base salary
increases for Messrs. Beck, Hansotia, Smith and Veltmaat ranged from 3% to 10%.

Annual Cash Incentive Bonuses

Incentive compensation is based on AGCO’s performance, as well as the contribution of executive officers through the
leadership of their respective regional or functional areas. For 2019, incentive compensation awards for all NEO’s and senior
vice presidents were based 100% on corporate goals for global alignment purposes. Incentive compensation opportunities are
expressed as a percentage of the executive officer’s base salary. The annual award opportunities for the NEOs in 2019, all of
which relate to corporate goals, are shown in the chart below:

Name
Mr. Beck
Mr. Hansotia
Mr. Richenhagen
Mr. Smith
Mr. Veltmaat

Opportunity as a Percentage of Base Salary

Minimum Award
50%
50%
70%
50%
45%

Target Award Maximum Award

100%
100%
140%
100%
90%

200%
200%
280%
200%
180%

In connection with the IC Plan, the Compensation Committee establishes three levels of performance (goals or
objectives) at minimum, target and maximum levels, and final payout is based upon performance relative to these targets.
The corporate objectives are set at the beginning of each year and approved by the Compensation Committee based upon a
budget approved by the Finance Committee. However, unless a threshold adjusted earnings per share (“EPS”) goal is reached,
no awards are paid regardless of performance relative to the other target goals. For the year ended December 31, 2019,
the corporate objectives were based on targets for operating margin as a percentage of net sales and free cash flow.
The calculation of these measures and corporate weightings are as follows:

• Operating Margin as a Percentage of Net Sales: The percentage calculated when income from operations is divided
by net sales (70% weight). This measure also excludes restructuring expenses and certain other approved items.

• Free Cash Flow: Operating cash flow minus capital expenditures (30% weight).

For 2019, targets for each of the measures for a 100% payout and AGCO’s performance are summarized below:

Measure(1)
Adjusted Operating Margin as a Percentage of Net Sales

Free Cash Flow

Weight Bonus Objective Performance

70%

30%

6.0%

$270.0

6.0%

$422.5

Percent
Achieved

100%

156%

Earned
Award

100.0%

200.0%

(1) Dollar amounts stated in millions; performance amounts reflect adjustments made in accordance with the awards.

From 2018 to 2019, adjusted operating margin as a percentage of net sales increased from 5.4% to 6.0%. In establishing

performance goals each year, the Compensation Committee sets goals that are calibrated to company performance expectations,
incorporating rigor and stretch in these goals in order to drive outstanding performance. Industry demand was projected to
improve modestly in 2019 compared to 2018, and we set our 2019 target performance goals consistent with our forecast for
2019, which also projected improved performance. The agricultural equipment industry is cyclical, with sales largely dependent
on the health of the overall farm economy, which is influenced by commodity prices and farm income. Industry demand in
2019 ultimately was lower than 2018. Although industry demand decreased, cost containment and other margin improvement
programs implemented by management positively impacted our operating margins in 2019 compared to 2018.
The Compensation Committee believes that this reflects strong performance by the Company relative to our key competitors,
who experienced declines in their operating margins during 2019. For 2019, the Compensation Committee determined that we
performed at target with respect to our adjusted operating margin as a percentage of net sales and above target with respect to
free cash flow. As a result, the corporate portion of bonuses paid to NEOs reflects, overall, approximately 130% of the
established target. All SVPs are measured on corporate goals.

For 2020, the Compensation Committee approved the continued use of operating margin as a percentage of net sales and

free cash flow as the performance measures. The weighting of the operating margin metric reflects the importance the Company

has placed on margin improvement as a key to increasing Company performance and shareholder value. This approach is
consistent with the feedback that we received from stockholders.

The IC Plan also provides for payment of a pro rata portion of the participant’s bonus upon a change of control, as well as

additional bonus payments to certain participants terminated without cause within two years of a change of control. This is
further explained in “Severance Benefits and Change of Control.”

Long-term Incentives

We provide performance- and retention-based equity opportunities to the NEOs. LTI represents a significant component
of total compensation and weighs heavily in the overall pay mix for executives. The overarching principles of the LTI Plan are:

• LTI is performance-based and intended to engage executives in achieving longer-term goals and to make decisions in

the best interests of stockholders;

• Target award opportunities are generally competitive with median levels of other companies of similar size, industry

and complexity;

• Realizable gains with respect to each award are intended to vary with Company performance and stock price growth;

and

•

Performance goals are aligned with stockholder interests and support the long-term success of AGCO.

While awards under the LTI Plan generally are made annually, from time to time, the Compensation Committee may also

utilize special incentives to support strategic initiatives and to strengthen retention of management.

The following table summarizes the mix, performance measurements and general terms for each form of equity awarded

to our NEOs for 2019 under our LTI Plan:

LTI Mix
Description

Performance
Measurements

Vesting Period

Restrictions / Expiration

Competitive Positioning

Performance Share Plan
(“PSP”)
60%
• Performance shares that

are earned on the basis of
AGCO’s performance
versus pre-established
goals for a three-year
cycle

• 50% Operating Margin
• 50% Return on Invested

Capital (“ROIC”)
• The percentage level

achievement is
determined annually,
with the ultimate award
earned based upon the
results over the three-
year cycle

• Vest in full at the end of
the three-year cycle

• Number of shares earned
depends on performance

• Converted to AGCO
common stock upon
vesting

• Target award levels set at
median level of market
competitiveness

Stock-Settled Stock
Appreciation Rights
(“SSARs”)
20%
• SSARs provide the right

to receive share
appreciation over the
grant price, payable in
whole shares of AGCO
common stock

• Stock price appreciation

Restricted Stock Units
(“RSUs”)
20%

• RSUs are full share

equivalents, payable at
the end of the vesting
period

• Stock price appreciation,
as the total value of
RSUs is influenced by
stock price

• Vest in equal installments

over four years

over three years

• Expire seven years from

• N/A

the grant date

• Median level of market

competitiveness

In January 2019, the Compensation Committee approved long-term incentive awards for 2019 eligible plan participants.

Long-term incentive awards for the NEOs in 2019 are summarized in the table below under the caption “2019 Grants of
Plan-Based Awards.”

In part based upon input during our stockholder outreach and given the desire to improve the pay-for-performance
alignment of RSUs, beginning with awards in 2020, the number of RSUs received under each award will be further adjusted
within a range of -25% to +25% based upon the change in our operating margin relative to the changes in operating margins at
an 11-company agricultural equipment and industrial company peer group. In addition, rather than vesting ratable over a
three-year cycle, RSUs now will cliff vest at the end of the three-year cycle to facilitate an emphasis on longer-term operating
margin performance relative to peers.

For grants under the PSP, operating margin as a percentage of net sales and average ROIC were chosen as performance
measures because they are meaningful measures of our performance and have a strong correlation to generating stockholder
value over the long-term.

The Compensation Committee established three levels of performance for each measure: threshold, representing the

minimum level of performance that warrants a payout; target, representing a level of performance where median target
compensation levels are appropriate; and outstanding, representing a maximum realistic performance level where increased
compensation levels are appropriate. The operating margin as a percentage of net sales and average ROIC goals are linked
within a performance award matrix which is used to determine the number of shares earned in various combinations of
performance. The award opportunity levels are expressed as multiples of the executive’s “target” award opportunity.

The matrix of award opportunities is illustrated below:

Operating Margin as a percentage of Net Sales

ROIC

Outstanding
Target
Threshold
Below Threshold

Below Threshold
100.0%
50.0%
16.5%
—%

Threshold
116.5%
66.6%
33.3%
16.5%

Target
150.0%
100.0%
66.6%
50.0%

Outstanding
200.0%
150.0%
116.5%
100.0%

If the actual performance of the goal falls in between the established goals for threshold, target and outstanding
performance, the associated payout factor will be calculated using a straight-line interpolation between the two goals.
Unless the Compensation Committee determines otherwise, the Compensation Committee excludes restructuring and certain
other items from the calculation of operating margin as a percentage of net sales and ROIC in order to ensure the
calculations are equitable and appropriate decisions and actions are not discouraged by their projected impact on the awards.

For the awards granted in 2017 under the PSP, the Compensation Committee determined that, based on the Company’s

performance for the applicable three-year PSP performance cycle (2017-2019), we achieved above “target” on both the
cumulative EPS and ROIC goals, which were the measures at the time of the awards, thus producing a payout as shown in the
chart below. The information provided below includes adjustments made by the Compensation Committee in accordance with
the LTI Plan for certain items.

Measure(1)
EPS

ROIC

Year
2017
2018
2019

2017
2018
2019

Target
$2.50
$2.75
$3.03

5.5%
6.1%
6.7%

Actual
$3.02
$3.89
$4.44

5.9%
7.1%
7.7%

Earned Award
200%
200%
200%

200%
200%
200%

200%
200%
200%
200%

2017 Average
2018 Average
2019 Average
Cumulative

(1) Performance amounts reflect adjustments made in accordance with the awards.

The average yearly performance for the 2017-2019 three-year PSP performance cycle was 200% for each of the three
years. The goals were established during a low point in the global agricultural market, but we substantially outperformed the

Company’s “outstanding” level performance goals for EPS and ROIC as a result of significant net sales growth and margin
expansion driven by market recovery, new product introductions and cost reduction initiatives.

The target award and actual number of shares received by the NEOs for the three-year performance cycle covering

2017-2019 are shown below:

Name
Mr. Beck
Mr. Hansotia
Mr. Richenhagen
Mr. Smith
Mr. Veltmaat

Three-Year Performance Cycle (2017-2019)

Target Award
12,300 shares
4,600 shares
69,500 shares
9,900 shares
9,900 shares

Actual Award
24,600 shares
9,200 shares
139,000 shares
19,800 shares
19,800 shares

In 2019, the Compensation Committee established award opportunities for executives covering a new three-year PSP
performance cycle (2019-2021), as well as a new grant of SSARs and RSUs. The Compensation Committee’s strategy is to
regularly evaluate the size of award levels by taking into consideration market practices, the industry’s cyclicality and other
appropriate factors. Targets covering the 2019-2021 performance cycle were established for operating margin as a
percentage of sales, rather than the previously utilized earnings per share, and ROIC. This shift reflects the desire to reinforce
the importance of margin improvement, which is consistent with stockholder feedback, but at the same time retains an
appropriate link to earnings.

The targets for operating margin as a percentage of net sales and ROIC are formed by current and projected

industry conditions. The goals are challenging and reflective of stretch performance expectations. The applicable threshold and
outstanding levels of performance achievement are defined for each measure and incorporate shareholder expectations and a
strong pay-for-performance focus. Target percentage level achievement on the new three-year PSP performance cycle
(2019-2021) is based upon averaging the amounts earned during each year in the three-year performance cycle rather than on a
cumulative basis during the entire performance cycle.

We consider the target goals for PSP awards for uncompleted cycles to be confidential. The Compensation Committee

believes it is important to establish incentive goals that incorporate stretch performance expectations and reward for exceeding
defined performance and results.

The Compensation Committee approves all grants of stock-based compensation to the Chief Executive Officer and all

other executive officers. The Chief Executive Officer, with the assistance of the Senior Vice President — Global Business
Services, assists the Compensation Committee with recommendations for award levels for all other executive officers based on
external competitive analyses. Our policy is that SSARs are awarded with exercise prices at or above the fair market value of
the Company’s common stock on the date of the grant.

Retention Awards

In 2018, Mr. Richenhagen was granted a one-time, time-based award to encourage him to delay his retirement and,
in the interim, to oversee an orderly succession process, the integration of recent acquisitions, the launch of new products and
the execution of near-term strategic milestones. In the aggregate, he received 137,000 restricted stock units that vest in one
installment on December 31, 2020. Vesting of the restricted stock units generally is subject to Mr. Richenhagen’s continued
employment on the date of vesting, except under certain circumstances such as a change in control of the Company.

In 2019, Mr. Smith was granted a one-time, time-based award to encourage him to remain with the Company

following the Company’s promotion of Mr. Hansotia to Chief Operating Officer. In the aggregate, he received 35,837 restricted
stock units that vested 25% at the end of December 31, 2019, and were to vest 25% on December 31, 2020 and 50% on
December 31, 2021. Mr. Smith resigned from the Company effective January 31, 2020, and as a result only received 25% of the
restricted stock units.

As part of its stockholder outreach process, the Compensation Committee noted the feedback with respect to retention

awards, which it will consider in the future should the situation again arise.

Clawback of Incentive Compensation

We have a Compensation Adjustment and Recovery Policy. Pursuant to the policy, if the Board learns of any misconduct

by an officer of AGCO or one of its subsidiaries that contributed to our having to restate our published financial statements,
it shall take, or direct to take, such action as it deems reasonably necessary to remedy the misconduct, prevent its recurrence and,
if appropriate, based on all relevant facts and circumstances, take remedial action against the individual in violation of the

policy. In determining whether remedial action is appropriate, the Board shall take into account such factors as it deems
relevant, including whether the misconduct reflected negligence, recklessness or intentional wrongdoing. Remedial action may
include dismissal and initiating legal action against the officer.

In addition, the Board will, to the full extent permitted by governing law, in all appropriate cases, direct us to seek
reimbursement of any bonus or incentive compensation awarded to an officer, or effect the cancellation of unvested, restricted
or deferred equity awards previously granted to an officer, if: (i) the amount of the bonus or incentive compensation was
calculated based upon the achievement of financial results that were subsequently reduced as part of a restatement; (ii) the
officer engaged in intentional wrongdoing that contributed to the restatement; and (iii) the amount of the award would have
been lower had the financial results been properly reported.

In determining what action to take or to require to take, the Board may consider, among other things, penalties or
punishments imposed by third parties, such as law enforcement agencies, regulators or other authorities, the impact upon us in
any related proceeding or investigation of taking remedial action against an officer, and the cost and likely outcome of taking
remedial action. The Board’s power to determine the appropriate remedial action is in addition to, and not in replacement of,
remedies imposed by such authorities.

Without by implication limiting the foregoing, following a restatement of the Company’s financial statements, we also

shall be entitled to recover any compensation received by the Chief Executive Officer and Chief Financial Officer that is
required to be recovered by Section 304 of the Sarbanes-Oxley Act of 2002.

The policy further specifies that the authority vested in the Board under the policy may be exercised by any committee
thereof. In addition, this policy will be evaluated after the SEC issues final rules implementing the clawback provisions set forth
in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Share Ownership and Retention Requirements

Share ownership by directors and executive officers emphasizes the alignment of their interests with those of

stockholders. The Company’s stock ownership program requires (i) non-employee directors to own common stock, or other
equity equivalents, equal in value to four times the value of the annual retainer, (ii) the Chief Executive Officer to own common
stock, or other equity equivalents, equal in value to five times annual salary, and (iii) all other executive officers to own
common stock, or other equity equivalents, equal in value to three times their respective annual salaries. Once the minimum
ownership level is achieved, an individual will remain qualified if he or she continues to hold at least the number of shares that
is initially required regardless of the change in market value of the underlying stock. Any person becoming a director or
executive officer has four-years from his or her election to comply with the stock ownership requirements. Our directors and
executive officers all currently meet these requirements.

Hedging and Pledging Policy

We have a Hedging and Pledging Policy. Board members and officers are prohibited from, directly or indirectly,
(i) pledging a significant number of the Company’s equity securities, or (ii) hedging with respect to any of the Company’s
equity securities. For these purposes, (a) “pledging” includes the intentional creation of any form of pledge, security interest,
deposit, lien or other hypothecation, including the holding of shares in a margin account, that entitles a third-party to foreclose
against, or otherwise sell, any equity securities, whether with or without notice, consent, default or otherwise, but does not
include either the involuntary imposition of liens, such as tax liens or liens arising from legal proceedings, or customary
purchase and sale agreements, such as Rule 10b5-1 plans, and (b) “significant” means the lesser of 1% of the Company’s
outstanding equity securities and 50% of the equity securities of the Company owned by the board member or officer. Also for
these purposes, “hedging” includes any instrument or transaction, including put options and forward-sale contracts, through
which the board member or officer offsets or reduces exposure to the risk of price fluctuations in a corresponding equity
security. “Equity securities” include common stock, voting preferred stock and options and other securities exercisable for,
or convertible into, settled in, or measured by reference to, any other equity security determined on an as-exercised and as-
converted basis. The equity securities attributable to a board member or officer for these purposes shall include equity securities
attributable to the board member or officer under either Section 13 or Section 16 of the Exchange Act. In addition, equity
securities that are pledged shall not be counted toward board member and officer ownership requirements.

Compensation Risk Assessment

The Compensation Committee regularly reviews compensation plans and practices to ensure they are appropriately

structured and aligned with business objectives, and not designed to encourage executives to take unwarranted risks.
Specifically, the overall design of the compensation philosophy and plans mitigate risks because: (i) the financial performance
objectives of the short and long-term incentive plans are reviewed and approved annually by the Board; (ii) the plans consist of
multiple performance objectives, thus lessening the focus on any one in particular; (iii) short and long-term incentive payouts
are capped for all participants; and (iv) the Company has in place a clawback provision that can require the return of bonus and
other incentive compensation.

Tax Considerations

Section 162(m) of the IRC generally limits to $1 million the U.S. federal tax deductibility of compensation paid in one
year to any employee. Through the end of 2017, performance-based compensation was not subject to this limit on deductibility,
provided that such compensation met certain requirements, including stockholder approval of material terms of compensation.
The Company generally designed its compensation to meet the requirements for the exception to Section 162(m). Effective for
2018 and subsequent years, Section 162(m) was amended to eliminate the exception for performance-based compensation. As a
result, all compensation in excess of $1 million, regardless of how structured, no longer is deductible. The Company did not
modify its compensation programs in response to the amendment, but may do so in the future.

Retirement Benefits

We believe that offering competitive retirement benefits is important to attract and retain top executives. Our U.S.-based
executives participate in a non-qualified executive defined benefit plan in addition to a traditional defined contribution 401(k)
plan. For the Company’s 401(k) plan, we generally contributed approximately $12,600 to each eligible executive’s 401(k)
account during 2019, which was the maximum contribution match allowable under the Company’s 401(k) plan.

For executives, who generally became eligible to participate prior to August 1, 2015, we maintain an Executive

Nonqualified Pension Plan (“ENPP”), which is designed to provide competitive retirement benefits that will attract and retain
our executives. The ENPP provides eligible executive officers with retirement income for a period of 15 years - for the
remainder of their lives if they retire from the Company after age 65 - based on a percentage of the average of their highest
three non-consecutive years of base salary and bonus during their final 10 years of employment (referred to as their “three-year
average compensation”), reduced by the executive officer’s social security benefits and 401(k) employer-matching
contributions, as if the executive had made the maximum contribution. The benefit paid to the executive officers is 3% of their
three-year average compensation multiplied by credited years of service, with a maximum annual benefit of 60% of their three-
year average compensation. Benefits under the ENPP vest if the participant has attained age 50 and has at least ten years of
service (including five years as a participant in the ENPP), but are not payable until the participant reaches age 65. For
executives promoted or hired after August 1, 2015, those benefits consist of a nonqualified defined contribution plan.

Severance Benefits and Change of Control

Reasonable severance benefits are necessary to attract top executives. The levels of severance benefits provided to
executives are designed to take into account the difficulty executives may experience with seeking comparable employment.

Employment agreements with the executives provide severance benefits when the termination is without “cause” or for

termination with “good reason.” The severance benefit depends on whether the termination involved a change of control.
For terminations without “cause” or for “good reason” that do not involve a change of control, the severance benefit allows for
the executives to receive his or her base salary for a period of up to two years and a pro rata portion of the bonus to which the
executive would have been entitled for the year of termination had the executive remained employed for the entire year.
Specifically for the NEOs, Messrs. Hansotia, Smith and Veltmaat may receive their respective base salaries and bonus amounts
for one year upon termination. Mr. Beck may receive his base salary and bonus amount for two years upon termination.
Mr. Richenhagen will not receive cash severance because his employment agreement stipulates that no cash severance is paid
when he reaches the age of 65. A terminated executive also is entitled to receive any vested benefits under the ENPP payable
beginning at age 65.

We also believe it is important to provide certain additional benefits upon a change of control in order to protect the

executive’s retirement benefits and potential income that would be earned associated with our equity incentive plans.
In addition, it is our belief that the interests of stockholders will be best served if the interests of our senior management are
in alignment. By providing certain change of control benefits, we believe executives will not be reluctant to consider potential
change of control transactions that may be in the best interests of stockholders.

The Board has approved post-employment compensation to NEOs for terminations that occur within two years of a
change of control. In such case, the executive would receive a lump-sum payment equal to (i) two times his or her base salary in
effect at the time of termination, (ii) a pro-rata portion of his or her bonus or other incentive compensation earned for the year
of termination and (iii) a bonus equal to two times the three year average of his or her awards received during the prior two
completed years and the current year’s trend (except that for Mr. Richenhagen, the lump sum payment would equal (i) three
times his base salary in effect at the time of termination, (ii) a pro-rata portion of his bonus earned for the year of termination
and (iii) a bonus equal to three times the three year average of Mr. Richenhagen’s awards received during the prior two
completed years and the current year’s trend), and the executive would also be entitled to receive specific retirement benefits
and the acceleration of vesting of outstanding equity awards.

For awards under our equity incentive plan prior to 2018, the plan allows for all unearned awards to become fully vested

and exercisable, and all performance goals applicable to an award will be deemed automatically satisfied with respect to the
greater of the target level of compensation expected to be attained pursuant to such award or the level of performance dictated

by the trend of the Company’s actual performance, so that all of such compensation shall be immediately vested and
payable. Effective with equity awards in 2018, the “single trigger” provision, which stated that shares will vest upon a change
in control, was replaced with a “double-trigger” provision that states that vesting is contingent on a change in control and either
termination of employment or failure of the acquiring company to assume outstanding equity grants or provide participants with
the value equal to that of the unvested equity grants.

All benefits under the ENPP that have been earned based on years of service also become vested upon a change of control.

Executives with employment agreements prior to 2017 are entitled to receive a gross-up for excise taxes due on any of the

change of control payments described above, other than ordinary income taxes associated with payouts from a change of
control. Based upon discussions with stockholders, we have eliminated the gross-up for excise taxes on severance payments due
to a change in control for any executive receiving an initial employment agreement in 2017 and beyond.

For purposes of these benefits, a “change of control” occurs, in general, when either (i) one or more persons acquire
common stock of the Company that, together with other stock owned by the acquirers, amounts to more than 50% of the total
fair market value or total voting power of the stock, (ii) one or more persons acquire during a 12-month period stock of the
Company that amounts to 30% or more of the total voting power of the stock, (iii) a majority of the members of our Board of
Directors are replaced in any 12-month period by directors who are not endorsed by a majority of the directors then in office,
or (iv) with some exceptions, one or more persons acquire assets from the Company that have a total fair market value equal to
or greater than 40% of the aggregate fair market value of all of our assets.

Perquisites and Other Benefits

We believe that cash and incentive compensation should be the primary focus of compensation and that perquisites should

be modest. Perquisites are periodically reviewed for executives to ensure conformity with this policy. The primary perquisites
available to executives are the use of a leased automobile and the reimbursement of dues associated with a social or athletic
club. We do not allow executive officers the use of our leased aircraft for personal use. Supplemental life and disability
insurance is also provided for executives. The life insurance generally provides for a death benefit of six times the executive
officer’s base salary.

For executives on international assignments, additional expatriate benefits are designed to compensate the employee for

differences in costs of living and taxation between the executive’s home country and host country. In addition, financial
assistance is provided to the assignee for expenses such as relocation, children’s education, tax preparation and home leave
travel.

Executives also participate in our other benefit plans on the same general terms as other employees. These plans may

include medical, dental and disability insurance coverage.

Post-Employment Compensation

Each of the NEOs is covered by an employment agreement. These agreements provide post-employment compensation

and benefits in the event of certain types of termination of employment, including death, disability, involuntary termination
without cause, or termination for good reason by the executive. For further detail on the post-employment compensation and
benefits each NEO is entitled to in the event of certain types of termination, please refer to the tables below under the caption
“Other Potential Post-Employment Payments.”

Summary

Overall, we believe our executive compensation programs accomplish the objectives for which they have been designed

and are in concert with the compensation philosophy. We believe the competitive compensation that is provided to our
executives is reasonable based on competitive market practices and has enabled us to attract and retain a strong management
team generating strong results in a challenging industry environment. We further believe that our short-term and long-term
incentive programs appropriately reward our executives for their achievement of performance goals and that these programs
sufficiently align the interests of the executives with those of the stockholders.

SUMMARY OF 2019 COMPENSATION

The following table provides information concerning the compensation of the NEOs for the Company’s three most

recently completed years ended December 31, 2017, 2018 and 2019.

In the column “Salary,” we disclose the amount of base salary paid to the NEO during the year. In the columns
“Stock Awards” and “SSAR Awards,” we disclose the award of stock, SSARs or RSUs measured in dollars and calculated in
accordance with ASC 718. For SSARs, the ASC 718 aggregate grant date fair value per share is based on certain assumptions
that the Company explains in Note 10 to our Consolidated Financial Statements, which are included in our Annual Report on
Form 10-K for the year ended December 31, 2019. For awards of stock, the ASC 718 aggregate grant date fair value per share
is equal to the closing price of our common stock on the date of grant. The amounts disclosed as the aggregate grant date fair
value of the stock awards granted under the PSP are computed at the probable outcome of the performance conditions,
or “target” level. The actual amounts that will be earned are dependent upon the achievement of pre-established performance
goals. Please also refer to the table below under the caption “2019 Grants of Plan-Based Awards.”

In the column “Non-Equity Incentive Plan Compensation,” we disclose amounts earned under our IC Plan. The amounts

included with respect to any particular year are dependent on whether the achievement of the relevant performance measure
was satisfied during the year.

In the column “Change in Pension Value and Non-Qualified Earnings,” we disclose the aggregate change in the actuarial

present value of the NEO’s accumulated benefit under all defined benefit and actuarial benefit plans (including supplemental
plans) in 2019.

In the column “All Other Compensation,” we disclose the sum of the dollar value of all perquisites and other personal

benefits, or property, unless the aggregate amount of such compensation is less than $10,000.

The Company currently has employment agreements with Messrs. Beck, Hansotia, Richenhagen, Smith and Veltmaat.

The employment contracts provide for current base salaries at the following annualized rates per annum:
Mr. Beck — $660,539; Mr. Hansotia — $727,100; Mr. Richenhagen — $1,385,942; Mr. Smith — $692,147; and
Mr. Veltmaat — $616,177. Messrs. Beck, Hansotia, Richenhagen, Smith and Veltmaat’s employment contracts continue in
effect until terminated in accordance with their terms. Actual amounts paid in the year vary slightly due to timing of pay
periods. In addition to the specified base salary, the employment contracts provide that each executive officer shall be entitled
to participate in benefit plans and other arrangements generally available to senior executive officers of the Company.

2019 SUMMARY COMPENSATION TABLE

Salary
($)

Bonus
($)

Stock
Awards(1)
($)

SSAR
Awards(2)
($)

— 1,019,082
968,755
—

— 1,030,093
379,018
—

—

365,996

188,760
172,592

206,388
70,928

64,400

— 1,054,619

210,924

Non-Equity
Incentive
Plan
Compensation(3)
($)

954,901
872,714

852,448
535,566

511,451

923,747

Change in
Pension
Value and
Non-
Qualified
Earnings(4)
($)

1,046,532
312,013

2,073,667
267,350

263,406

667,792

All

Other

Compensation(5)
($)

51,759
42,304

42,098
56,773

Total
($)

3,830,784
2,995,103

4,860,423
1,766,135

51,280

1,746,253

47,840

3,615,497

93,116 14,724,596

90,231 20,648,619

— 5,747,717 1,063,920

3,157,257

3,317,011

— 13,437,972

985,320

2,682,220

2,077,025

— 5,855,740 1,179,360

2,522,415

4,226,060

118,215 15,287,732

—

820,237

767,836

— 3,014,199

151,008

137,816

165,564

—

820,237

151,008

767,836

137,816

827,784

165,564

874,271

753,478

884,929

880,340

746,056

715,678

203,755

130,322

211,124

950,747

754,663

1,540,452

112,843

2,741,715

86,875

97,449

2,477,546

5,043,327

52,843

3,438,800

60,952

3,062,621

49,895

3,911,063

Name and Principle Position

Andrew H. Beck,
Senior Vice President —
Chief Financial Officer

Eric P. Hansotia,
Senior
Chief

Vice President
—
Operating Officer

Martin H. Richenhagen,
Chairman, President and Chief
Executive Officer

Rob Smith,
Former Senior Vice
and General Manager,
Europe/Middle East

President

Hans-Bernd Veltmaat,
Senior Vice President —
Chief Supply Chain Officer

Year

2017
2018

2019
2017

2018

2019

2017

2018

2019

2017

2018

2019

2017

2018

2019

(1) Stock Awards for 2017

569,750
626,725

655,729
456,500

489,720

710,575

1,345,575

1,375,851

1,385,942

579,601

601,219

670,062

583,625

595,298

611,690

In 2017, awards were granted under a three-year performance cycle under the PSP where the awards earned are based on the
average of each year in the three-year performance cycle and RSUs that vest in equal installments over three years from the
date of grant. The amounts above reflect the aggregate grant date fair value computed in accordance with ASC 718 in relation
to the 2017 three-year performance cycle at the probable outcome of the performance conditions, or “target” level, at the date
of grant, as well as the grant date fair value of RSUs.

The actual amounts that were earned under the 2017-2019 three-year performance cycle differ as previously disclosed, and
were dependent upon the achievement of pre-established performance goals. The value of the awards on the date of grant at
the actual achieved level of performance, which is the maximum level of performance conditions, under the 2017-2019
three-year performance cycle for the PSP, is as follows: Mr. Beck — $1,521,018; Mr. Hansotia — $568,836;
Mr. Richenhagen — $8,594,370; Mr. Smith — $1,224,234; and Mr. Veltmaat — $1,224,234.

The following were the value of the RSUs on the date of grant: Mr. Beck — $258,573; Mr. Hansotia — $94,600;
Mr. Richenhagen — $1,450,532; Mr. Smith — $208,120; and Mr. Veltmaat —$208,120.

Stock Awards for 2018

In 2018, awards were granted under a three-year performance cycle under the PSP where the awards earned are based on the
average of each year in the three-year performance cycle and RSUs that vest in equal installments over three years from the
date of grant. The amounts above reflect the aggregate grant date fair value computed in accordance with ASC 718 in relation
to the 2018 three-year performance cycle at the probable outcome of the performance conditions, or “target” level, at the date
of grant, as well as the grant date fair value of RSUs.

The actual amounts that will be earned under the 2018-2020 three-year performance cycle differ as disclosed above, and are
dependent upon the achievement of pre-established performance goals. Assuming the maximum level of performance
conditions under the 2018-2020 three-year performance cycle for the PSP, the following would be the value of the award on
the date of grant: Mr. Beck — $1,442,280; Mr. Hansotia — $542,640; Mr. Richenhagen — $8,211,000;
Mr. Smith — $1,142,400; and Mr. Veltmaat — $1,142,400. The pre-established performance goals for the first and
second year of the three-year performance cycle under the PSP were achieved but are not yet vested.

The following were the value of the RSUs on the date of grant: Mr. Beck — $247,615; Mr. Hansotia — $94,676;
Mr. Richenhagen — $9,332,472, including a one-time, time-based award discussed below; Mr. Smith — $196,636; and
Mr. Veltmaat —$196,636.

installment on December 31, 2020. Vesting of the restricted stock units generally are subject to Mr. Richenhagen’s continued
employment on the date of vesting, except under certain circumstances such as a change in control of the Company.

Stock Awards for 2019

In 2019, awards were granted under a three-year performance cycle under the PSP where the awards earned are based on the
average of each year in the three-year performance cycle and RSUs that vest in equal installments over three years from the
date of grant. The amounts above reflect the aggregate grant date fair value computed in accordance with ASC 718 in relation
to the 2019 three-year performance cycle at the probable outcome of the performance conditions, or “target” level, at the date
of grant, as well as the grant date fair value of RSUs.

The actual amounts that will be earned under the 2019-2021 three-year performance cycle differ as disclosed above, and are
dependent upon the achievement of pre-established performance goals. Assuming the maximum level of performance
conditions under the 2019-2021 three-year performance cycle for the PSP, the following would be the value of the award on
the date of grant: Mr. Beck — $1,537,452; Mr. Hansotia — $1,574,058; Mr. Richenhagen — $8,724,430;
Mr. Smith — $1,232,402; and Mr. Veltmaat — $1,232,402. The pre-established performance goals for the first year of the
three-year performance cycle under the PSP were achieved but are not yet vested.

The following were the value of the RSUs on the date of grant: Mr. Beck — $261,367; Mr. Hansotia — $267,590;
Mr. Richenhagen — $1,493,525; Mr. Smith — $2,397,998, including a one-time, time-based award discussed below; and
Mr. Veltmaat —$211,583.

In 2019, Mr. Smith was granted a one-time, time-based award to encourage him to remain with the Company following the
Company’s promotion of Mr. Hansotia to Chief Operating Officer. In the aggregate, he received 35,837 restricted stock
units that vested 25% at the end of December 31, 2019, and were to vest 25% on December 31, 2020 and 50% on
December 31, 2021. Mr. Smith resigned from the Company effective January 31, 2020, and as a result only received 25%
of the restricted stock units.

(2) SSARs were awarded on January 24, 2017, January 23, 2018 and January 22, 2019. The SSARs vest over four years from
the date of grant, or 25% per year. The amounts above reflect the aggregate grant date fair value computed in accordance
with ASC 718.

(3) Non-Equity Incentive Plan Compensation for 2017. All annual incentive awards for 2017 were performance-based.

These payments were earned in 2017 and paid in January or February 2018 under the IC Plan.

Non-Equity Incentive Plan Compensation for 2018. All annual incentive awards for 2018 were performance-based.
These payments were earned in 2018 and paid in February 2019 under the IC Plan.

Non-Equity Incentive Plan Compensation for 2019. All annual incentive awards for 2019 were performance-based.
These payments were earned in 2019 and paid in February 2020 under the IC Plan.

(4) The change in each officer’s pension value is the change in the Company’s obligation to provide pension benefits (at a

future retirement date) from the beginning of the year to the end of the year. The obligation shown in the “2019 Pension
Benefits Table” presented below is the value today of a benefit that will be paid at the officer’s normal retirement age, based
on the benefit formula and his or her current salary and service. The values shown in the Summary Compensation Table
represent the change in the pension obligation since the prior year.

Change in pension values during the year may be due to various sources such as:

•

Service accruals: The benefits payable from the pension plans increase as participants earn additional years of
service. Therefore, as each executive officer earns an additional year of service during the year, the benefit payable at
retirement increases. Each of the NEOs who participate in a pension plan earned an additional year of benefit service
during 2019 except for Mr. Beck who has already earned the maximum benefit service allowed under the plan.

• Compensation increases/decreases since prior year: The benefits payable from the pension plans are related to salary.
As executive officers’ salaries increase (decrease), then the expected benefits payable from the pension plans will
increase (decrease) as well.

• Aging: The amounts shown above are changes in the present values of retirement benefits that will be paid in the

future. As the officers approach retirement, the present value of the liability increases due to the fact that the executive
officer is one year closer to retirement than he was at the prior measurement date.

• Changes in assumptions: The amounts shown above are changes in the present values of retirement benefits that will
be paid in the future. The discount rate used to determine the present value is updated each year based on current
economic conditions. This assumption does not impact the actual benefits paid to participants. The discount rate
decreased from 2018 to 2019, which resulted in a significant increase in the present value of the officers’ benefits.

The change in pension value is subject to many external variables discussed above, such as discount rates, that are not
related to Company performance.

• Plan amendments: The Company periodically amends the retirement programs in order to remain competitive locally

and/or align with our global benefits strategy. There were no such amendments during 2019.

The pension benefits and assumptions used to calculate these values are described in more detail under the caption
“Pension Benefits.”

(5) The amount shown as “All Other Compensation” includes the following perquisites and personal benefits for the year ended

December 31, 2019:

Name
Andrew H. Beck

Eric P. Hansotia

Martin H. Richenhagen

Rob Smith

Hans-Bernd Veltmaat

Club
Membership
($)

Defined
Contribution
Match
($)

Life
Insurance(a)
($)

Car Lease
and
Maintenance(b)
($)

9,400

13,125

7,824

—

7,974

12,600

—

12,600

5,883

3,956

46,911

—

11,486

13,478

17,712

39,647

25,288

17,835

Other(c)
($)

737

447

11,233

72,161

—

Total
($)

42,098

47,840

118,215

97,449

49,895

(a) These amounts represent the value of the benefit to the executive officer for life insurance policies funded by the

Company.

(b) These amounts represent car lease payments made by the Company for cars used by executives and/or their family

members, as well as payments for related gas and maintenance costs.

event — $737. The amount for Mr. Hansotia includes commercial airfare related to attendance by Mr. Hansotia’s wife
at a business-related event — $447. The amount for Mr. Richenhagen includes estate planning fees — $6,069 and
commercial airfare related to attendance by Mr. Richenhagen’s wife at a business-related event — $5,164.
Mr. Richenhagen’s wife accompanied Mr. Richenhagen when the Company’s corporate aircraft was used for attendance
at corporate functions at no incremental cost. The amount for Mr. Smith includes housing allowance — $48,302,
tax preparation fees — $18,101 and commercial airfare related to attendance by a guest of Mr. Smith at business-related
events — $5,758. Mr. Veltmaat’s wife accompanied Mr. Veltmaat when the Company’s corporate aircraft was used for
attendance at a corporate function at no incremental cost.

2019 GRANTS OF PLAN-BASED AWARDS

In this table, we provide information concerning each grant of an award made to an NEO in the most recently completed

year. This includes the awards under the Company’s IC Plan, as well as PSP awards, RSUs and SSARs under the LTI Plan, each
of which is discussed in greater detail under the caption “Compensation Discussion and Analysis.” The “Threshold,” “Target”
and “Maximum” columns reflect the range of estimated payouts under the IC Plan and the range of number of shares to be
awarded under the PSP. In the fourth-to-last column, we report the number of shares of common stock underlying RSUs
granted in the year. In the third- and second-to-last columns, we report the number of shares of common stock underlying
SSARs granted in the year and corresponding per share exercise price. In all cases, the exercise price was equal to the closing
market price of the Company’s common stock on the date of grant. In the last column, we report the aggregate ASC 718 grant
date fair value of all stock and SSAR awards made in 2019. Stock awards include the annual PSP award and the RSU award.

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)

Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)

Name

Andrew H. Beck

Award
Type

IC Plan

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

327,865

655,729

1,311,458

PSP 1/22/19

RSU 1/22/19

SSAR 1/22/19

Eric P. Hansotia

IC Plan

355,288

710,575

1,421,150

PSP 1/22/19

RSU 1/22/19

SSAR 1/22/19

Martin H. Richenhagen

IC Plan

970,160 1,940,319

3,880,638

PSP 1/22/19

RSU 1/22/19

SSAR 1/22/19

Rob Smith

IC Plan

335,031

670,062

1,340,124

PSP 1/22/19

RSU 1/22/19

SSAR 1/22/19

Hans-Bernd Veltmaat

IC Plan

275,261

550,521

1,101,042

PSP 1/22/19

RSU 1/22/19

SSAR 1/22/19

Threshold
(# of
shares)

Target
(# of
shares)

Maximum
(# of
shares)

4,200

12,600

25,200

4,300

12,900

25,800

23,833

71,500

143,000

3,367

10,100

20,200

3,367

10,100

20,200

All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)

4,284

4,386

24,480

39,305

3,468

Underlying
SSARs
Compensation
(#)

Exercise
Price
of SSAR
Awards
($/sh)

Grant
Date Fair
Value of
Stock
and
SSAR
Awards
($)

768,726

261,367

18,200

62.85

206,388

787,029

267,590

18,600

62.85

210,924

4,362,215

1,493,525

104,000

62.85 1,179,360

616,201

2,397,998

14,600

62.85

165,564

616,201

211,583

14,600

62.85

165,564

(1) Amounts included in the table above represent the potential payout levels related to corporate objectives for the fiscal year

2019 under the Company’s IC Plan. The payment for these awards already have been determined and were paid on
February 14, 2020 and February 25, 2020 to the NEOs. Refer to Note 3 of the 2019 Summary Compensation Table.

(2) The amounts shown represent the number of shares the executive would receive if the “Threshold,” “Target” and

“Maximum” levels of performance are reached.

OUTSTANDING EQUITY AWARDS AT YEAR-END 2019

The following table provides information concerning unexercised SSARs and stock (including RSUs) that has not been

earned or vested for each NEO outstanding as of the end of the Company’s most recently completed year. Each outstanding
award is represented by a separate row that indicates the number of securities underlying the award.

For SSAR awards, the table discloses the exercise price and the expiration date. For stock awards, the table provides the

total number of shares of stock that have not vested (or have not been earned) and the aggregate market value of shares of stock
that have not vested (or have not been earned).

SSAR Awards

Stock Awards

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested(5)
(#)

—

Equity
Incentive
Plan
Awards:
Value
Realized
on
Vesting(6)
($)

—

3,366

8,400

187,385

648,900

—

1,266

8,600

—

70,478

664,350

—

19,166

1,066,971

47,666

3,682,276

—

2,666

6,734

—

148,416

520,202

—

2,666

6,734

148,416

520,202

Name

Andrew H. Beck

Eric P. Hansotia

Martin H. Richenhagen

Rob Smith

Hans-Bernd Veltmaat

17,800

12,225

8,250

3,350

—

6,700

4,575

3,100

1,250

—

19,125

—

2,675

—

7,100

9,750

6,600

2,675

—

Number of
Securities
Underlying
Unexercised
SSARs
Exercisable
(#)

Number of
Securities
Underlying
Unexercised
SSARs
Unexercisable(1)
(#)

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
SSARs
(#)

SSAR
Exercise
Price
($)

SSAR
Expiration
Date

Number
of Shares
or Units
of Stock
That
Have
Not
Vested(2)(3)
(#)

—

1,394

15,780

10,332

—

510

5,952

10,578

—

Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested(4)
($)

—

99,573

878,473

798,147

—

36,429

331,348

817,151

—

— 43.88

1/21/2022

— 46.58

1/26/2023

— 63.47

1/24/2024

— 73.14

1/23/2025

— 62.85

1/22/2026

— 43.88

1/21/2022

— 46.58

1/26/2023

— 63.47

1/24/2024

— 73.14

1/23/2025

— 62.85

1/22/2026

— 46.58

1/26/2023

—

4,075

8,250

10,050

18,200

—

1,525

3,100

3,750

18,600

23,000

46,500

57,375

— 63.47

1/24/2024

7,820

558,583

— 73.14

1/23/2025

226,588 12,614,154

104,000

— 62.85

1/22/2026

58,801

4,542,300

3,250

6,600

8,025

14,600

—

3,250

6,600

8,025

14,600

— 46.58

1/26/2023

— 63.47

1/24/2024

— 73.14

1/23/2025

—

1,122

12,504

—

80,144

696,098

— 62.85

1/22/2026

35,193

2,718,662

— 43.88

1/21/2022

— 46.58

1/26/2023

— 63.47

1/24/2024

— 73.14

1/23/2025

— 62.85

1/22/2026

—

1,122

12,504

8,315

—

80,144

696,098

642,337

(1) SSAR awards vest ratably, or 25% annually, over four years beginning from the date of grant, which was January 26, 2016
for the 2016 grants, January 24, 2017 for the 2017 grants, January 23, 2018 for the 2018 grants and January 22, 2019 for
the 2019 grants.

(2) RSU awards vest in equal installments over three years beginning from the date of grant, which was January 24, 2017 for

the 2017 grants, January 23, 2018 for the 2018 grants and January 22, 2019 for the 2019 grants.

(3) The pre-established performance goals of certain one-year performance cycles under the PSP were achieved; however,

the award is subject to a further vesting period. The number of shares are at the actual level of performance achieved.

(4) The market value of RSU awards that have not vested is based on the closing price of the Company’s common stock on

December 31, 2019, December 31, 2018 and December 31, 2017, which was $77.25, $55.67 and $71.43, respectively.
The market value of the awards earned under the three one-year performance cycles under the PSP are based on the closing
price of the Company’s common stock on December 31, 2019 and December 31, 2018, which was $77.25 and $55.67,
respectively.

(5) The amounts shown represent the number of shares awarded but unearned under the PSP in January 2018 and

January 2019, respectively. The actual amounts that will be earned under the PSP are dependent upon the achievement
of pre-established performance goals during the respective performance cycles.

(6) Based on the closing price of the Company’s common stock on December 31, 2019 and December 31, 2018, which was

$77.25 and $55.67, respectively.

SSAR EXERCISES AND STOCK VESTED IN 2019

The following table provides information concerning exercises of SSARs and similar instruments, and vesting of stock

awards including restricted stock and similar instruments, during the most recently completed year for each of the NEOs.
The table reports the number of securities acquired upon exercise of SSARs; the aggregate dollar value realized upon exercise
of SSARs; the number of shares of stock that have vested; and the aggregate dollar value realized upon vesting.

Name
Andrew H. Beck

Eric P. Hansotia

Martin H. Richenhagen

Rob Smith

Hans-Bernd Veltmaat

SSAR Awards

Stock Awards

Number of Shares
Acquired on Exercise(1)
(#)

Value Realized on
Exercise(2)
($)

Number of Shares
Acquired on Vesting
(#)

Value Realized
on Vesting(3)
($)

7,949

4,665

78,564

6,198

2,698

581,831

372,130

5,783,010

453,314

174,513

28,850

10,832

162,630

32,159

23,200

1,912,238

717,845

10,780,562

2,136,086

1,537,804

(1) The number of shares acquired on exercise of SSARs is computed by dividing the value realized on exercise by the market
price of the underlying securities at exercise. The number of shares acquired upon exercise is inclusive of the following
shares withheld for income tax purposes: Mr. Beck — 3,607 shares, Mr. Hansotia — 1,837 shares,
Mr. Richenhagen — 35,435 shares, Mr. Smith — 351 shares and Mr. Veltmaat — 1,218 shares.

(2) The dollar amount realized upon exercise is computed by multiplying the number of shares times the difference between

the market price of the underlying securities at exercise and the exercise price of the SSARs.

(3) Shares withheld for income tax purposes related to stock vested were as follows: Mr. Beck — 13,011 shares,

Mr. Hansotia — 2,787 shares, Mr. Richenhagen — 73,348 shares, Mr. Smith — 15,572 shares and
Mr. Veltmaat — 7,445 shares.

PENSION BENEFITS

The “2019 Pension Benefits Table” provides further details regarding the executive officers’ defined benefit retirement

plan benefits. Because the pension amounts shown in the “2019 Summary Compensation Table” and the “2019 Pension
Benefits Table” are projections of future retirement benefits, numerous assumptions must be applied. In general, the
assumptions should be the same as those used to calculate the pension liabilities in accordance with ASC Topic 715,
“Compensation – Retirement Benefits,” on the measurement date, although the SEC specifies certain exceptions, as noted in
the table below.

Executive Nonqualified Pension Plan

The ENPP provides the Company’s eligible executives with retirement income for a period of 15 years based on a
percentage of their final average compensation, including base salary and annual incentive bonus, reduced by the executive’s
social security benefits and savings plan benefits attributable to employer matching contributions. In addition, executives who
remain with AGCO until age 65 will have their benefits continue as a lifetime annuity after the 15-year certain period ends
(i.e., at age 80).

The key provisions of the ENPP are as follows:

Monthly Benefit. Senior executives with a vested benefit will be eligible to receive the following retirement benefits

each month for 15 years beginning on their normal retirement date (age 65): 3% of final average monthly compensation times
years of service up to 20 years, reduced by each of (i) the senior executive’s U.S. social security benefit or similar government
retirement program to which the senior executive is eligible, (ii) the benefits payable from the AGCO Savings Plan (payable as
a life annuity) attributable to the Company’s matching contributions and earnings thereon (at the maximum level), and (iii) the
benefits payable from any retirement plan sponsored by the Company in any foreign country attributable to the Company’s
contributions.

Final Average Monthly Compensation. The final average monthly compensation is the average of the three years of
base salary and annual incentive payments under the IC Plan paid to the executive during the three years in which such sum
was the highest from among the ten years prior to his or her death, termination or retirement.

Vesting. Participants become vested after meeting all three of the following requirements: (i) turn age 50;

(ii) completing ten years of service with the Company; and (iii) achieving five years of participation in the ENPP. An executive
must remain with the Company until age 65 with at least ten years of service (five years must include tenure as an executive
officer) to vest in the life annuity portion of this benefit that begins at age 80. Alternatively, all participants will become vested
in the plan in the event of a change of control.

Early Retirement Benefits. Participants may not receive retirement benefits prior to normal retirement age.

Swiss Life Collective “BVG” Foundation

The Swiss Life Collective “BVG” Foundation (“BVG”) operates a pension fund in Switzerland, for which Mr. Smith is a
participant. The BVG ensures the plan meets at least the mandated requirements for minimum pension benefits. This plan is a
cash balance formula, with contributions made both by the Company and Mr. Smith. Mr. Smith’s total account balance
represents contributions and interest made by the Company, as well as from his prior employers. The amounts shown in the
tables throughout this proxy reflect the portion of account balance attributable to contributions made while employed by the
Company.

The key provisions of the BVG plan are as follows:

Retirement benefit. Upon retirement, participants will receive the value of their cash balance account. They may elect to
receive their benefit as a lump sum or as an annuity. The cash balance account grows each year with pay credits (payable by the
employee and the employer) and interest.

Pay credits. Each year, a participant’s cash balance account is credited with the following percentage of pensionable

pay (varies by age):

Age
25 - 34
35 - 44
45 - 54
55 - 65

Credit as a percentage of pay
(paid by the Company)
5.5%
7.5%
11.5%
13.5%

Credit (standard level) as a
percentage of pay
(paid by employee)
2.5%
3.5%
4.5%
5.5%

Pensionable pay. Payable at the annual rate of base pay.

Normal Retirement Age. Age 65 for males; age 64 for females (as in accordance with Swiss law).

Early Retirement Benefits. Participants may elect to retire from the age of 58. Annuity benefits are converted using

reduced actuarial equivalence conversion factors.

Swiss Life Additional Capital Plan

Effective January 1, 2012, the BVG also operates an enhanced pension fund for executives in Switzerland, for which

Mr. Smith is a participant. This plan is a cash balance formula, with contributions made only by the Company, and
contributions are made retroactive to date of hire.

The key provisions of the additional capital plan are as follows:

Retirement benefit. Upon retirement, participants will receive benefits equal to that of their cash balance account.

The cash balance account grows each year with pay credits (payable by the employee and the employer) and interest.

Pay credits. Each year, a participant’s cash balance account is credited with the following percentage of pensionable

pay (varies by age):

Age
35 - 44
45 - 54
55 - 65

Credit as a percentage of pay
(paid by the Company)
11.0%
16.0%
19.0%

Credit as a percentage of pay
(paid by employee)
0.0%
0.0%
0.0%

Pensionable pay. Bonus pay only.

Normal Retirement Age. Age 65 for males; age 64 for females (as in accordance with Swiss law).

Early Retirement Benefits. Participants may elect to retire from the age of 58.

Vesting. 100% vested.

2019 PENSION BENEFITS TABLE

Name

Plan Name

Andrew H. Beck
Eric P. Hansotia
Martin H. Richenhagen
Rob Smith
Hans-Bernd Veltmaat

AGCO Executive Nonqualified Pension Plan
AGCO Executive Nonqualified Pension Plan
AGCO Executive Nonqualified Pension Plan
Swiss Life Collective “BVG” Foundation
AGCO Executive Nonqualified Pension Plan

Number of
Years of
Credited
Service
(#)

20.00
6.50
15.75
6.33
11.50

Present
Value of
Accumulated
Benefit(1)
($)
8,736,934
1,317,079
27,994,749
1,061,743
6,634,188

Payments
During
Last Year
($)

—
—
—
—
—

(1) Based on plan provisions in effect as of December 31, 2019. The executive officers participate in pension plans that will

provide a monthly annuity benefit upon retirement. The values shown in this column are the estimated lump sum value
today of the monthly benefits they will receive in the future (based on their current salary and service, as well as the
assumptions and methods prescribed by the SEC). These values are not the monthly or annual benefits that they would
receive.

Pension values may fluctuate significantly from year to year depending on a number of factors, including age, years of
service, average annual earnings and the assumptions used to determine the present value, such as the discount rate.
For 2019, the discount rate assumption used to determine the actuarial present value of accumulated pension benefits was
lower than in 2018. The Company cautions that the values reported in the Change in Pension Value and Nonqualified
Deferred Compensation Earnings column in the Summary Compensation Table, as well as the amounts above in the
Present Value of Accumulated Benefit column, are theoretical as those amounts are calculated pursuant to SEC
requirements and are based on assumptions used in preparing the Company’s audited financial statements for the
applicable fiscal years. The Company’s retirement plans utilize a different method of calculating actuarial present value for
the purpose of determining a lump sum payment, if any. The change in pension value from year to year as reported in the
table is subject to market volatility and may not represent the value that a NEO will actually accrue or receive under the
Company’s retirement plans during any given year.

OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS

Each NEO’s employment agreement with the Company includes provisions for post-employment compensation related
to certain employment termination events. Pursuant to the LTI Plan, all outstanding equity awards prior to 2018 become fully
vested and exercisable upon a change of control. Beginning in 2018, all equity awards became subject to a “double trigger”
whereby accelerated vesting is contingent on a change in control and either termination of employment or failure of the
acquiring company to assume outstanding equity grants or provide participants with the value equal to that of the unvested
equity grants. The LTI Plan does not provide for accelerated vesting of equity under other employment termination events.
The table below and its accompanying footnotes provides specific detail on the post-employment compensation each NEO is
entitled to in the event of certain employment termination events assuming termination on the last day of the prior year
(December 31, 2019).

Executive /
Termination Scenario(1)

Andrew H. Beck
Change in Control(2)(3)(4)(5)

Voluntary Termination
Without Good Reason

(6)

Retirement
Death(7)
Disability(8)

Involuntary With Cause

Involuntary Without Cause or
Good Reason Resignation(9)

Eric P. Hansotia
Change in Control(2)(3)(4)(5)

Voluntary Termination
Without Good Reason
Retirement(6)
Death(7)
Disability(8)

Involuntary With Cause

Involuntary Without Cause or
Good Reason Resignation(9)

Martin H. Richenhagen
Change in Control(2)(3)(4)(5)

Voluntary Termination
Without Good Reason
Retirement(6)
Death(7)
Disability(8)

Involuntary With Cause

Involuntary Without Cause,
Good Reason, Resignation or
Company’s Non-Renewal of
Employment Agreement(9)

Rob Smith

Change in Control(2)(3)(4)(5)

Voluntary Termination
Without Good Reason

Retirement
Death(7)
Disability(8)

Involuntary With Cause

Involuntary Without Cause or
Good Reason Resignation(9)

Hans-Bernd Veltmaat

Change in Control(2)(3)(4)(5)

Voluntary Termination
Without Good Reason
Retirement(6)
Death(7)
Disability(8)

Involuntary With Cause

Involuntary Without Cause or
Good Reason Resignation(9)

Severance

Bonus

Accelerated
Vesting of
Equity

Benefits

Retirement
Benefits

Death
Benefit

Disability
Benefit

280G
Tax
Gross-
Up

Estimated
Total

3,107,787 $

852,448 $

4,121,352 $

117,078 $ 8,708,978 (10) $

— $

— $ — $ 16,907,643

— $

165,135 $

852,448 $

— $

852,448 $

— $

1,321,078 $

852,448 $

— $

789,486 (10) $

— $

—

— $

— $ — $

789,486

— $ — $

—

— $

789,486 (10) $3,963,234 $

— $ — $

5,770,303

— $

789,486 (10) $

— $ 916,200 $ — $

2,558,134

— $

789,486 (10) $

— $

— $ — $

789,486

— $

789,486 (10) $

— $

— $ — $

2,963,012

2,768,043 $

923,747 $

2,841,343 $

108,832 $ 1,267,800 (11) $

— $

— $ — $

7,909,765

— $

181,775 $

923,747 $

— $

923,747 $

— $

727,100 $

923,747 $

— $

—

— $

— $ — $

—

$4,362,600 $

— $ — $

5,468,122

— $ 749,400 $ — $

1,673,147

— $

— $ — $

—

— $

— $ — $

1,650,847

$ 12,519,718 $

2,522,415 $

33,993,496 $

659,132 $ 29,271,280 (12) $

— $

— $ — $ 78,966,041

— $

346,486 $

2,522,415 $

— $

2,522,415 $

— $

— $ 1,921,705 (12) $

— $

— $ — $

1,921,705

— $ — $

1,921,705

— $ 1,921,705 (12) $8,662,988 $

— $ — $ 13,453,594

— $ 1,921,705 (12) $

— $5,271,600

9,715,720

— $ 1,921,705 (12) $

— $

— $ — $

1,921,705

— $

2,522,415 $

— $

— $ 1,921,705 (12) $

— $

— $ — $

4,444,120

3,032,876 $

871,079 $

6,058,189 $

22,492 $

907,478 (13) $

— $

— $ — $ 10,892,114

— $

170,874 $

871,079 $

— $

871,079 $

— $

683,495 $

871,079 $

— $

907,478 (13) $

— $

—

— $ 2,019,853 (13) $

— $

415,289 (13) $

— $

907,478 (13) $

— $

— $ — $

907,478

— $ — $

—

— $ — $

3,061,806

— $ — $

1,286,368

— $ — $

907,478

— $

907,478 (13) $

— $

— $ — $

2,462,052

2,793,736 $

715,678 $

3,289,781 $

120,182 $ 6,905,785 (14) $

— $

— $ — $ 13,825,162

— $

154,044 $

715,678 $

— $

715,678 $

— $

616,177 $

715,678 $

— $

434,117 (14) $

— $

—

— $

— $ — $

434,117

— $ — $

—

— $

434,117 (14) $3,697,062 $

— $ — $

5,000,901

— $

434,117 (14) $

— $ 841,800 $ — $

1,991,595

— $

434,117 (14) $

— $

— $ — $

434,117

— $

434,117 (14) $

— $

— $ — $

1,765,972

(1) All termination scenarios assume termination occurs on December 31, 2019, and a stock price of $77.25, which was the
closing price of the Company’s common stock on the last trading day of the Company’s year ended December 31, 2019.

(2) Upon termination within two years following a change of control, the following provisions apply to each of the NEOs:

• Mr. Richenhagen receives a lump sum payment equal to (i) three times his base salary in effect at the time of

termination, (ii) a pro-rata portion of his bonus or other incentive compensation earned for the year of termination
and (iii) a bonus equal to three times the three-year average of Mr. Richenhagen’s awards received during the prior
two completed years and the current year’s trend. He continues to receive life insurance and health benefits during a
three-year period and disability benefits during a two-year period.

• Messrs. Beck, Hansotia, Smith and Veltmaat receive a lump sum payment equal to (i) two times base salary in effect
at the time of termination, (ii) a pro-rata portion of bonus or other incentive compensation earned for the year of
termination and (iii) a bonus equal to two times the three-year average of the NEO’s awards received during the
prior two completed years and the current year’s trend. Each of the NEOs continues to receive life insurance,
disability and healthcare benefits during a two-year period.

• Messrs. Beck, Hansotia, Richenhagen and Veltmaat will receive their ENPP retirement benefit payable as a lump

sum. This lump sum is calculated in a similar fashion as values disclosed in the Pension Benefits Table, except it is
determined based on the plan’s actuarial equivalence definition rather than the SEC prescribed assumptions. There is
no enhancement to their pension benefit amount in the event of a change in control other than immediate vesting of
the benefit.

(3) All outstanding equity awards prior to 2018 held by the NEOs at the time of a change of control become non-cancelable,

fully vested and exercisable, and all performance goals associated with any awards are deemed satisfied with respect to
the greater of target performance or the level dictated by the trend of the Company’s performance to date, so that all
compensation is immediately vested and payable.

(4)

In the case of a change of control, the retirement benefits are payable as a lump sum six months after termination of
employment or, if such termination occurs more than twenty-four months after the change in control, in accordance with
the terms of the ENPP. The difference between the “Retirement Benefits” values shown in the table above from the
ENPP and the value shown in the “2019 Pension Benefits Table” is due to the fact that the interest and mortality
assumptions prescribed by the plan in the event of a change of control are different from the assumptions used in the
actuarial valuation. There is no enhancement to the benefit amount under a change of control other than immediate
vesting of the benefit.

(5)

The change-in-control calculation has factored into it a value for the executive’s covenant not to compete.

(6) As of December 31, 2019, Mr. Richenhagen is eligible for retirement benefits. Messrs. Beck and Veltmaat are vested in
their ENPP benefit, but are not eligible to commence their benefits. Mr. Hansotia is not vested in his ENPP benefit.

(7) Upon death, the following provisions apply to each of the NEOs:

• The estate receives the executive’s base salary in effect at the time of death for a period of three months. The estate

is also entitled to all sums payable to the executive through the end of the month in which death occurs, including
the pro-rata portion of his bonus earned at this time. The “Death Benefit” amount represents the value of the
insurance proceeds payable upon death.

(8) Upon disability, the following provisions apply to each of the NEOs:

• Each of the NEOs receives all sums otherwise payable to them by the Company through the date of disability,

including the pro-rata portion of the bonus earned. The “Disability Benefit” amount represents the annual value of
the insurance proceeds payable to the executive on a monthly basis upon disability.

(9) Unless such termination occurs within two years following a change of control, if employment is terminated without

cause or if the executive voluntarily resigns with good reason, the following provisions apply to each of the NEOs:

•

For Mr. Richenhagen, he does not receive cash severance because he is over age 65. His employment agreement
stipulates that no cash severance is paid when he reaches the age of 65. Mr. Richenhagen does receives a pro-rata
portion of his bonus earned for the year of termination, which is payable at the time incentive compensation is
generally payable by the Company.

For Mr. Beck, he receives his base salary in effect at the time of termination for a two-year severance period, paid at
the same intervals as if he had remained employed with the Company. He also receives a pro-rata portion of his
bonus earned for the year of termination, which is payable at the time incentive compensation is generally payable
by the Company.

For Messrs. Hansotia, Smith and Veltmaat, each of the NEOs receive their base salary in effect at the time of
termination for a one-year severance period, paid at the same intervals as if they had remained employed with the
Company. Each NEO also receives a pro-rata portion of their bonus earned for the year of termination, which is
payable at the time incentive compensation is generally payable by the Company.

(10) Mr. Beck is currently vested in his ENPP retirement benefit. In the event of Mr. Beck’s termination due to a change of
control, he will receive a $8,708,978 lump sum payment. In the event of his termination due to any other cause, he will
receive a $789,486 annual annuity for 15 years beginning at age 65. The present value of this annuity (plus the value of
the life annuity beginning at age 80 if he were to remain employed by the Company until age 65) equals the benefit
disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC. In other words,
there is no enhancement that would be added to his pension benefit if he had been terminated on December 31, 2019.

(11) Mr. Hansotia is not currently vested in his ENPP retirement benefit. In the event of Mr. Hansotia’s termination due to a

change of control, he will receive a $1,267,800 lump sum payment. In the event of his termination due to any other cause
on December 31, 2019, he would not receive an ENPP retirement benefit.

(12) Mr. Richenhagen is currently vested in his ENPP retirement benefit. In the event of Mr. Richenhagen’s termination due
to a change of control, he will receive a $29,271,280 lump sum payment. In the event of Mr. Richenhagen’s termination
due to any other cause, he will receive $1,921,705 annually as a 15-year certain and life annuity beginning at
termination. The present value of this annuity plus the value of the life annuity beginning 15 years later equals the
benefit disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC. In other
words, there is no enhancement that would be added to his pension benefit if he had been terminated on
December 31, 2019.

(13)

In the event of Mr. Smith’s termination due to a change of control, he will receive a $907,478 lump sum payment from
his retirement plan. In the event of his termination due to death, he will receive a $2,019,853 lump sum payment. In the
event of his termination due to disability, he will receive a $415,289 annual annuity until age 65. In the event of his
termination due to any other cause, he will receive a lump sum payment of $907,478, which corresponds to his vested
benefits as per December 31, 2019.

(14) Mr. Veltmaat is currently vested in his ENPP retirement benefit. In the event of Mr. Veltmaat’s termination due to a
change of control, he will receive a $6,905,785 lump sum payment. In the event of his termination due to any other
cause, he will receive a $434,117 annual annuity for 15 years beginning at age 65. The present value of this annuity
(plus the value of the life annuity beginning at age 80 if he were to remain employed by the Company until age 65)
equals the benefits disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC.
In other words, there is no enhancement that would be added to his pension benefit if he had been terminated on
December 31, 2019.

Mr. Richenhagen’s employment agreement provides certain restrictive covenants that continue for a period of two years

after termination of employment, including a non-competition covenant, a non-solicitation of customers covenant and a
non-recruitment of employees covenant. If Mr. Richenhagen breaches his post-employment obligations under these covenants,
the Company may terminate the severance period and discontinue any further payments or benefits to Mr. Richenhagen.

2019 CEO PAY RATIO

Our analysis began by determining that we had approximately 21,625 employees as of a November 30, 2019

determination date. Although permitted by the SEC, we did not use the 5% de Minimis rule to exclude or eliminate any
employee group. Based on our consistently applied compensation measure of actual total cash compensation, we identified the
median employee. The median employee’s total 2019 compensation, as determined in a manner consistent with our Summary
Compensation Table, was $48,463.

Based on this methodology, we estimate the ratio of CEO pay to median employee pay is 315:1. In 2018, the CEO pay

to median employee pay ratio was 427:1, which reflected a one-time stock retention award to the CEO. Without this one-time
award, the ratio of CEO pay to median employee pay would have been 262:1.

THE FOLLOWING REPORTS OF THE COMPENSATION COMMITTEE AND THE AUDIT COMMITTEE
SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR TO BE INCORPORATED BY REFERENCE IN
ANY PREVIOUS OR FUTURE DOCUMENTS FILED BY THE COMPANY WITH THE SEC UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT
THE COMPANY EXPRESSLY INCORPORATES SAID REPORTS BY REFERENCE IN ANY SUCH DOCUMENT.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis

included in this Proxy Statement with management. Based on such review and discussion, the Compensation Committee has
recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with
the SEC.

The Company has engaged Willis Towers Watson to advise management and the Compensation Committee with respect
to our compensation programs and to perform various related studies and projects. The aggregate fees billed by Willis Towers
Watson for consulting services rendered to the Compensation Committee for 2019 in recommending the amount or form of
executive and director compensation were approximately $300,000. The total amount of fees paid by the Company to Willis
Towers Watson in 2019 for all other services, excluding Compensation Committee services, was approximately $1,300,000.
These other services primarily related to actuarial services in respect of our defined benefit plans, general employee
compensation consulting services, benefit plan design services and pension administration services. The Compensation
Committee recommended and approved the provision of these additional services to the Company by Willis Towers Watson.

The foregoing report is submitted by the Compensation Committee of the Board.

Gerald L. Shaheen, Chairman

Roy V. Armes

Sondra L. Barbour

Suzanne P. Clark

George E. Minnich

To the Board of Directors:

AUDIT COMMITTEE REPORT

The Audit Committee consists of the following members of the Board: Michael C. Arnold, Sondra L. Barbour,

P. George Benson, George E. Minnich (Chairman) and Hendrikus Visser. Each of the members is “independent” as defined by
the NYSE and SEC.

Management is responsible for the Company’s internal controls, financial reporting process and compliance with the laws
and regulations and ethical business standards. The independent registered public accounting firm is responsible for performing
an independent audit of the Company’s consolidated financial statements and an audit of the effectiveness of the Company’s
internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board
(United States) and to issue reports thereon. The Audit Committee’s responsibility is to monitor and oversee these processes
and to report its findings to the Board. The Audit Committee members are not professional accountants or auditors, and their
functions are not intended to duplicate or to certify the activities of management and the independent registered public
accounting firm, nor can the Audit Committee certify that the independent registered public accounting firm is “independent”
under applicable rules. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and
direction to management and the auditors on the basis of the information it receives, discussions with management and the
auditors and the experience of the Audit Committee’s members in business, financial and accounting matters.

We have reviewed and discussed with management the Company’s audited consolidated financial statements as of and for

the year ended December 31, 2019 and management’s assessment of the effectiveness of the Company’s internal control over
financial reporting and KPMG LLP’s audit of the Company’s internal control over financial reporting as of December 31, 2019.

We have discussed with KPMG LLP the matters required to be discussed by the applicable requirements of the

Public Company Accounting Oversight Board (United States) and the U.S. Securities and Exchange Commission.

We have received and reviewed the written disclosures and the letter from KPMG LLP required by NYSE listing
standards and the applicable requirements of the Public Company Accounting Oversight Board (United States) regarding the
independent registered public accounting firm’s communications with the audit committee and have discussed with the
independent registered public accounting firm the independent registered public accounting firm’s independence.

We also have considered whether the professional services provided by KPMG LLP, not related to the audit of the
consolidated financial statements and internal control over financial reporting referred to above or to the reviews of the
interim consolidated financial statements included in the Company’s Forms 10-Q for the quarters ended March 31, 2019,
June 30, 2019, and September 30, 2019, is compatible with maintaining KPMG LLP’s independence.

Based on the reviews and discussions referred to above, we recommended to the Board that the consolidated

financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019.

The foregoing report has been furnished by the Audit Committee of the Board.

George E. Minnich, Chairman

Michael C. Arnold

Sondra L. Barbour

P. George Benson

Hendrikus Visser

Audit Fees

The aggregate fees billed by KPMG LLP for professional services rendered for the audit of the Company’s annual
consolidated financial statements for 2019 and 2018, the audit of the Company’s internal control over financial reporting for
2019 and 2018, subsidiary statutory audits and the reviews of the financial statements included in the Company’s SEC filings
on Form 10-K, Form 10-Q and Form 8-K during such years were approximately $7,302,000 and $7,328,000, respectively.

Audit-Related Fees

The aggregate fees billed by KPMG LLP for professional services rendered for 2019 and 2018 for audit-related fees were

approximately $59,000 and $42,000, respectively. The amounts for 2019 and 2018 primarily represent fees for audits of
employee benefit plans and required auditor certifications for various matters required in certain foreign jurisdictions.

Tax Fees

The aggregate fees billed by KPMG LLP for professional services rendered for 2019 for tax services were approximately

$188,000. KPMG LLP did not provide any professional tax services during 2018.

Financial and Operational Information Systems Design and Implementation Fees

KPMG LLP did not provide any information technology services related to financial and operational information systems

design and implementation to the Company or its subsidiaries for 2019 or 2018.

All Other Fees of KPMG LLP

The aggregate of all other fees billed by KPMG LLP for 2019 and 2018 was $31,000 and $32,000, respectively, all of

which relate to advisory services in connection with the Company’s global procurement reorganization that were rendered by a
firm that KPMG LLP acquired in 2012.

A representative of KPMG LLP is expected to be present at the Annual Meeting with the opportunity to make a statement

and will be available to respond to appropriate questions.

All of KPMG’s services and fees for services, whether audit or non-audit, are preapproved by the Audit Committee.

In some instances services and fees initially are preapproved by the Chairman of the Audit Committee and then re-approved
subsequently by the Audit Committee. All services performed by KPMG LLP for 2019 were approved by the Chairman of the
Audit Committee or the Audit Committee. The Audit Committee has appointed KPMG LLP as the Company’s independent
registered public accounting firm for 2020, subject to stockholder ratification. KPMG LLP has served as the Company’s
independent registered public accounting firm since 2002.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company has a written related party transaction policy pursuant to which a majority of the independent directors of
an appropriate committee must approve transactions that exceed $120,000 in amount in which any director, executive officer,
significant stockholder or certain other persons has or have a material interest.

During 2019, the Company paid approximately $4.4 million to PPG Industries, Inc. for painting materials used in the

Company’s manufacturing processes. Mr. Richenhagen, who is the Company’s Chairman, President and Chief Executive
Officer, is currently a member of the board of directors, is the Chairman of the Audit Committee and serves as a member of the
Officers & Directors compensation committee of PPG Industries, Inc. In addition, the Company paid approximately

$6.2 million during the year ended December 31, 2019 to Linde PLC (the parent company of Praxair, Inc.) for propane, gas and
welding and laser consumables used in the Company’s manufacturing processes. Mr. Richenhagen served as a member of the
board of directors of Praxair, Inc. from 2015 until the business combination of Praxair, Inc. and Linde AG, and is currently a
member of the board of directors and serves on the Compensation and Governance & Nominating committees of Linde PLC,
the holding company for the combined business.

Mr. Richenhagen’s stepson is the Company’s Senior Vice-President, Grain and Protein and his daughter is the Company’s

Director, Corporate Social Responsibility. Their combined annual salaries, bonuses and all other compensation was $687,740
and combined grants of stock awards was $73,822 during 2019. The stock awards reflect the aggregate grant date fair value
computed in accordance with ASC 718 and the stock awards are based on the “target” level of performance at the date of grant.

Ms. Srinivasan, who is currently a member of the Company’s Board of Directors, is the Chairman and Managing Director

of TAFE, in which the Company holds a 23.75% interest. Through TAFE and TAFE Motors and Tractors Limited,
Ms. Srinivasan is the beneficial owner of 12,150,152 shares of the Company’s common stock, not including shares of the
Company’s common stock received by Ms. Srinivasan for service as a director. The Company received dividends of
approximately $2.0 million from TAFE during 2019. TAFE manufactures and sells Massey Ferguson branded equipment
primarily in India and also supplies tractors and components to AGCO for sale in other markets. During 2019, the Company
purchased approximately $92.7 million of tractors and components from TAFE and sold approximately $1.5 million of parts
to TAFE.

The Company and TAFE are parties to a Letter Agreement regarding the current and future accumulation by TAFE of

shares of our common stock and certain governance matters. The Letter Agreement expires on April 24, 2024. Pursuant to the
Letter Agreement, TAFE has agreed not to (i) purchase in excess of 12,150,152 shares of our common stock, subject to certain
adjustments; (ii) subject to its rights to make a non-public offer to acquire all or a part of the Company (or propose another
transaction that would result in a change of control of the Company), form or act as part of a group with respect to the
ownership or voting of our common stock or to otherwise grant a third-party a proxy or other voting rights with respect to our
common stock owned by TAFE or its affiliates (other than to or at the request of the Company), provided that TAFE and its
affiliates are expressly permitted to act as a group; or (iii) publicly announce its intention to commence, or commence, an offer
to acquire all or part of our common stock.

Pursuant to the Letter Agreement, the Company has agreed to: (i) nominate a candidate proposed by TAFE for election to

our Board of Directors at each annual meeting, as long as the collective beneficial ownership by TAFE and its affiliates is 5%
or more of the then outstanding common stock of the Company, subject to certain adjustments and restrictions; and (ii) provide
customary assistance to TAFE in selling its shares, including filing a registration statement with the SEC, if TAFE determines
to dispose of any shares of our common stock in a public distribution.

The foregoing description of the Letter Agreement is qualified in its entirety by reference to the Letter Agreement, a copy

of which was included as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 25, 2019.

ANNUAL REPORT TO STOCKHOLDERS

The Company’s 2019 Annual Report to its stockholders and Annual Report on Form 10-K for the year ended

December 31, 2019, including consolidated financial statements and schedule thereto, but excluding other exhibits, is being
furnished with this proxy statement to stockholders of record as of March 20, 2020.

ANNUAL REPORT ON FORM 10-K

We will provide without charge a copy of our Annual Report filed on Form 10-K for the year ended December 31, 2019,

including the consolidated financial statements and schedule thereto, on the written request of the beneficial owner of any
shares of our common stock on March 20, 2020. The written request should be directed to: Corporate Secretary, AGCO
Corporation, 4205 River Green Parkway, Duluth, Georgia 30096.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

A representative of KPMG LLP, our independent registered public accounting firm for 2019, is expected to attend the

Annual Meeting and will have the opportunity to make a statement if he or she desires to do so. The representative also will be
available to respond to appropriate questions from stockholders. The Audit Committee has appointed KPMG LLP as our
independent registered public accounting firm for 2020, subject to stockholder ratification.

STOCKHOLDERS’ PROPOSALS

Any stockholder of the Company who wishes to present a proposal at the 2021 Annual Meeting of stockholders of the

Company, and who wishes to have such proposal included in the Company’s proxy statement and form of proxy for that
meeting, must deliver a copy of such proposal to the Company at its principal executive offices at 4205 River Green Parkway,
Duluth, Georgia 30096, Attention: Corporate Secretary, no later than November 30, 2020; however, if next year’s Annual
Meeting of stockholders is held on a date more than 30 days before or after the corresponding date of the 2020 Annual Meeting,
any stockholder who wishes to have a proposal included in our proxy statement for that meeting must deliver a copy of the
proposal to the Company at a reasonable time before the proxy solicitation is made. We reserve the right to decline to include in
our proxy statement any stockholder’s proposal which does not comply with the advance notice provisions of our By-Laws or
the rules of the SEC for inclusion therein.

Any stockholder of the Company who wishes to present a proposal at the 2021 Annual Meeting of stockholders of the

Company, but not have such proposal included in our proxy statement and form of proxy for that meeting, must deliver a copy
of such proposal to the Company at its principal executive offices at 4205 River Green Parkway, Duluth, Georgia 30096,
Attention: Corporate Secretary no later than March 1, 2021 and otherwise in accordance with the advance notice provisions of
our By-Laws or the persons appointed as proxies may exercise their discretionary voting authority if the proposal is considered
at the meeting. The advance notice provisions of our By-Laws provide that for a proposal to be properly brought before a
meeting by a stockholder, such stockholder must disclose certain information and must have given the Company notice of such
proposal in written form meeting the requirements of our By-Laws no later than 60 days and no earlier than 90 days prior to the
anniversary date of the immediately preceding Annual Meeting of stockholders.

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ANNUAL REPORT
ON FORM 10-K

(cid:3)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-12930

AGCO CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
4205 River Green Parkway
Duluth, Georgia
(Address of principal executive offices)

58-1960019
(I.R.S. Employer Identification No.)

30096
(Zip Code)

(770) 813-9200
(Registrants telephone number, including area code)

Title of Class
Common stock

Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol
AGCO

Name of exchange on which registered
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting
company

Emerging growth
company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with

any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

The aggregate market value of AGCO Corporation’s Common Stock (based upon the closing sales price quoted on the New York Stock
Exchange) held by non-affiliates as of June 30, 2019 was approximately $4.9 billion. For this purpose, directors and officers and the entities that they
control have been assumed to be affiliates. As of February 24, 2020, 75,465,353 shares of AGCO Corporation’s Common Stock were outstanding.

Portions of AGCO Corporation's Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this

Form 10-K.

Documents Incorporated by Reference

Item 1.

Business

PART I

AGCO Corporation (“AGCO,” “we,” “us” or the “Company”) was incorporated in Delaware in 1991.

executive offices are located at 4205 River Green Parkway, Duluth, Georgia 30096, and our telephone number is
Our
(770) 813-9200. Unless otherwise indicated, all references in this Form 10-K to the Company include our subsidiaries.

General

We are a leading manufacturer and distributor of agricultural equipment and related replacement parts throughout the

world. We sell a full range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage
equipment, seeding and tillage equipment, implements, and grain storage and protein production systems. Our products are
widely recognized in the agricultural equipment industry and are marketed under a number of well-known brands, including
Challenger®, Fendt®, GSI®, Massey Ferguson® and Valtra®. We distribute most of our products through approximately
3,275 independent dealers and distributors in approximately 140 countries. We also provide retail and wholesale financing
through our finance joint ventures with Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., which we refer to as
“Rabobank.”

Products

The following table sets forth a description of the Company’s products and their percentage of net sales:

Product

Product Description

• High horsepower tractors (100 to 650 horsepower); typically used on large acreage farms,
primarily for row crop production, soil cultivation, planting, land leveling, seeding and
commercial hay operations.

Tractors

• Utility tractors (40 to 130 horsepower); typically used on small- and medium-sized farms and in

specialty agricultural industries, including dairy, livestock, orchards and vineyards

• Compact tractors (under 40 horsepower); typically used on small farms and specialty agricultural

industries, as well as for landscaping, equestrian and residential uses

Percentage of Net Sales

2019(1)
57%

2018(1)
57%

2017

57%

Replacement Parts

Grain Storage and
Protein Production
Systems

Hay Tools and Forage
Equipment,
Implements & Other
Equipment

• Replacement parts for all of the products we sell, including products no longer in production.

15%

14%

16%

Most of our products can be economically maintained with parts and service for a period of ten to
20 years. Our parts inventories are maintained and distributed through a network of master and
regional warehouses throughout North America, South America, Europe, Africa, China and
Australia in order to provide timely response to customer demand for replacement parts

• Grain storage bins and related drying and handling equipment systems; seed-processing systems;

11%

12%

13%

swine and poultry feed storage and delivery, ventilation and watering systems; and egg production
systems and broiler production equipment

• Round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc

10%

mowers, spreaders, rakes, tedders, and mower conditioners; used for the harvesting and packaging
of vegetative feeds used in the cattle, dairy, horse and renewable fuel industries

•

Implements, including disc harrows, which cut through crop residue, leveling seed beds and
mixing chemicals with the soils; heavy tillage, which break up soil and mix crop residue into
topsoil, with or without prior discing; field cultivators, which prepare a smooth seed bed and
destroy weeds; and drills, which are primarily used for small grain seeding

• Planters and other planting equipment; used to plant seeds and apply fertilizer in the field,

typically used for row crops, including planting technologies that cover the areas of monitoring
and measurement, liquid control and delivery, meter accuracy and seed delivery

• Other equipment, including loaders; used for a variety of tasks, including lifting and transporting

hay crops

Combines

• Combines, sold with a variety of threshing technologies and complemented by a variety of crop-
harvesting heads; typically used in harvesting grain crops such as corn, wheat, soybeans and rice

Application Equipment

• Self-propelled, three- and four-wheeled vehicles and related equipment; for use in the application
of liquid and dry fertilizers and crop protection chemicals both prior to planting crops (“pre-
emergence”) and after crops emerge from the ground (“post-emergence”)

____________________________________
(1) The summation of these individual percentages does not total due to rounding.

Smart Farming Technologies

We offer smart solutions to the farmer to optimize farming performance while improving ease of use. Our strategy is

based upon an open approach to data management leveraging existing solutions offered by partnering with industry leaders
while integrating AGCO products and innovation. These smart farming technologies are based on connectivity, automation
and digitalization and include satellite-based steering, field data collection, product self-adjustment, yield-mapping and
telemetry-based fleet management systems. Our Fuse® and other smart-farming technologies support our products, brands and
the aftermarket with a comprehensive and customizable suite of solutions, enabling farmers to make individual, data based
decisions in order to reduce costs and maximize efficiency, yields and profitability of their farms. A significant number of these
technologies are developed by third parties and are integrated into our products. We believe that these products and related
devices are highly valued by professional farmers globally and are integral to the current and future growth of our equipment
sales and revenues.

Marketing and Distribution

We distribute products primarily through a network of independent dealers and distributors. Our dealers are
responsible for retail sales of equipment to end users and after-sales service and support. Our distributors may sell our products
through networks of dealers supported by the distributors, and our distributors also may directly market our products and
provide customer service support. Our sales are not dependent on any specific dealer, distributor or group of dealers.

In some countries, we utilize associates and licensees to provide a distribution channel for our products and a source

of low-cost production for certain Massey Ferguson and Valtra products. Associates are entities in which we have an ownership
interest, most notably in India. Licensees are entities in which we have no ownership interest. An associate or licensee
generally has the exclusive right to produce and sell Massey Ferguson or Valtra equipment in its licensed territory under these
tradenames, but may not sell these products outside the licensed territory. We generally license certain technology to these
associates and licensees, and we may sell them certain components used in local manufacturing operations.

Geographical Region
Europe ..................................................................................................
North America......................................................................................
South America......................................................................................
Rest of World (2)....................................................................................
____________________________________
(1) The summation of these individual percentages does not total due to rounding.
(2) Consists of approximately 60 countries in Africa, the Middle East, Australia and Asia.

Dealer Support and Supervision

Independent Dealers
and Distributors

2019

770

1,875

250

380

2019

Percent of Net Sales
2018(1)
57%

58%

2017

53%

24%

23%

10%

23%

13%

11%

We believe that one of the most important criteria affecting a farmer’s decision to purchase a particular brand of

equipment is the quality of the dealer who sells and services the equipment. We support our dealers in order to improve the
quality of our dealer network. We monitor each dealer’s performance and profitability and establish programs that focus on
continuous dealer improvement. Our dealers generally have sales territories for which they are responsible.

We believe that our ability to offer our dealers a full product line of agricultural equipment and related replacement

parts, as well as our ongoing dealer training and support programs focusing on business and inventory management, sales,
marketing, warranty and servicing matters and products, helps ensure the vitality and increase the competitiveness of our dealer
network. We also maintain dealer advisory groups to obtain dealer feedback on our operations.

We provide our dealers with volume sales incentives, demonstration programs and other advertising support to assist

sales. We design our sales programs, including retail financing incentives, and our policies for maintaining parts and service
availability with extensive product warranties to enhance our dealers’ competitive position.

Manufacturing and Suppliers

Manufacturing and Assembly

We manufacture and assemble our products in 45 locations worldwide, including four locations where we operate joint

ventures. Our locations are intended to optimize capacity, technology or local costs. Furthermore, we continue to balance our
manufacturing resources with externally-sourced machinery, components and/or replacement parts to enable us to better control
costs, inventory levels and our supply of components. We believe that our manufacturing facilities are sufficient to meet our
needs for the foreseeable future. Refer to Item 2, “Properties,” where a listing of our principal manufacturing locations is
presented.

Our AGCO Power engines division produces diesel engines, gears and generating sets. The diesel engines are

manufactured for use in a portion of our tractors, combines and sprayers, and also are sold to third parties. AGCO Power
specializes in the manufacturing of off-road engines in the 75 to 600 horsepower range.

Third-Party Suppliers

We externally source some of our machinery, components and replacement parts from third-party suppliers.
Our production strategy is intended to optimize our research and development and capital investment requirements and to allow
us greater flexibility to respond to changes in market conditions.

We purchase some fully-manufactured tractors from Tractors and Farm Equipment Limited (“TAFE”), Carraro S.p.A.

and Iseki & Company, Limited. We also purchase other tractors, implements and hay and forage equipment from various
third-party suppliers. Refer to Note 14 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and
Supplementary Data,” for further discussion of our relationship with TAFE.

In addition to the purchase of machinery, third-party suppliers supply us with significant components used in our
manufacturing operations. We select third-party suppliers that we believe are low cost, high quality and possess the most
appropriate technology.

We also assist in the development of these products or component parts based upon our own design requirements.

Our past experience with outside suppliers generally has been favorable.

Seasonality

Generally, retail sales by dealers to farmers are highly seasonal and largely are a function of the timing of the planting

and harvesting seasons. To the extent possible, we attempt to ship products to our dealers and distributors on a level basis
throughout the year to reduce the effect of seasonal retail demands on our manufacturing operations and to minimize our
investment in inventory. Our financing requirements are subject to variations due to seasonal changes in working capital levels,
which typically increase in the first half of the year and then decrease in the second half of the year. The fourth quarter is also
typically a period for higher retail sales because of our customers’ year-end tax planning considerations, the increase in the
availability of funds from completed harvests and the timing of dealer incentives.

Competition

The agricultural industry is highly competitive. We compete with several large national and international full-line

suppliers, as well as numerous short-line and specialty manufacturers with differing manufacturing and marketing methods.
Our two principal competitors on a worldwide basis are Deere & Company and CNH Industrial N.V. We have regional
competitors around the world that have significant market share in a single country or a group of countries.

We believe several key factors influence a buyer’s choice of farm equipment, including the strength and quality of a

company’s dealers, the quality and pricing of products, dealer or brand loyalty, product availability, terms of financing and
customer service. See “Marketing and Distribution” for additional information.

Engineering and Research

We make significant expenditures for engineering and applied research to improve the quality and performance of our

products, to develop new products and to comply with government safety and engine emissions regulations.

Wholesale Financing

Primarily in the United States and Canada, we engage in the standard industry practice of providing dealers with floor

plan payment terms for their inventories of farm equipment for extended periods, generally through our AGCO Finance joint
ventures. The terms of our wholesale finance agreements with our dealers vary by region and product line, with fixed payment
schedules on all sales, generally ranging from one to 12 months. In the United States and Canada, dealers typically are not
required to make an initial down payment, and our terms allow for an interest-free period generally ranging from one to
12 months, depending on the product. Amounts due from sales to dealers in the United States and Canada are immediately due
upon a retail sale of the underlying equipment by the dealer, with the exception of sales of grain storage and protein production
systems, as discussed further below. If not previously paid by the dealer, installment payments generally are required beginning
after the interest-free period with the remaining outstanding equipment balance generally due within 12 months after shipment.
In limited circumstances, we provide sales terms, and in some cases, interest-free periods that are longer than 12 months for
certain products. These typically are specified programs, predominantly in the United States and Canada, where interest is
charged after a period of up to 24 months, depending on various factors including dealers' sales volumes during the preceding
year. We also provide financing to dealers on used equipment accepted in trade. We generally obtain a security interest in the
new and used equipment we finance.

Typically, sales terms outside the United States and Canada are of a shorter duration, generally ranging from
30 to 180 days. In many cases, we retain a security interest in the equipment sold on extended terms. In certain international
markets, our sales are generally backed by letters of credit or credit insurance.

Sales of grain storage and protein production systems both in the United States and in other countries generally are

payable within 30 days of shipment. In certain countries, sales of such systems for which the Company is responsible for
construction or installation may be contingent upon customer acceptance. Payment terms vary by market and product, with
fixed payment schedules on all sales.

We have accounts receivable sales agreements that permit transferring, on an ongoing basis, a majority of our
wholesale receivables in North America, Europe and Brazil to our AGCO Finance joint ventures in the United States, Canada,
Europe and Brazil. Upon transfer, the wholesale receivables maintain standard payment terms, including required regular
principal payments on amounts outstanding and interest charges at market rates. Qualified dealers may obtain additional
financing through our U.S., Canadian, European and Brazilian finance joint ventures at the joint ventures’ discretion. In
addition, our AGCO Finance joint ventures may provide wholesale financing directly to dealers in Europe, Brazil and Australia.

Retail Financing

Our AGCO Finance joint ventures offer financing to most of the end users of our products. Besides contributing to our

overall profitability, the AGCO Finance joint ventures enhance our sales efforts by tailoring retail finance programs to
prevailing market conditions. Our finance joint ventures are located in the United States, Canada, Europe, Brazil, Argentina and
Australia and are owned by AGCO and by a wholly-owned subsidiary of Rabobank. Refer to “Finance Joint Ventures” within
Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information.

In addition, Rabobank is the primary lender with respect to our credit facility and our senior term loan, as are more

fully described in “Liquidity and Capital Resources” within Item 7, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” Our historical relationship with Rabobank has been strong, and we anticipate its
continued long-term support of our business.

Intellectual Property

We own and have licenses to the rights under a number of domestic and foreign patents, trademarks, trade names and

brand names relating to our products and businesses. We defend our patent, trademark and trade and brand name rights
primarily by monitoring competitors’ machines and industry publications and conducting other investigative work. We consider
our intellectual property rights, including our right to use our trade and brand names, important in the operation of our
businesses. However, we do not believe we are dependent on any single patent, trademark, trade name, brand name or group of
patents or trademarks, trade names or brand names. We intend to maintain the separate strengths and identities of our core
brand names and product lines.

Environmental Matters and Regulation

We are subject to environmental laws and regulations concerning emissions to the air, discharges of processed or other

types of wastewater, and the generation, handling, storage, transportation, treatment and disposal of waste materials. These
laws and regulations are constantly changing, and the effects that they may have on us in the future are impossible to accurately
predict. It is our policy to comply with all applicable environmental, health and safety laws and regulations. We believe that any
expense or liability we may incur in connection with noncompliance with laws or regulations or the cleanup of any of our
properties will not have a materially adverse effect on us.

The engines manufactured by our AGCO Power engine division, which specializes in the manufacturing of non-road

engines in the 75 to 600 horsepower range, currently comply with emissions standards and related requirements set by
European, Brazilian and U.S. regulatory authorities, including both the United States Environmental Protection Agency and
various state authorities. We expect to meet future emissions requirements through the introduction of new technology to our
engines and exhaust after-treatment systems, as necessary. In some markets, such as the United States, we must obtain
governmental environmental approvals in order to import our products, and these approvals can be difficult or time-consuming
to obtain or may not be obtainable at all. For example, our AGCO Power engine division and our engine suppliers are subject to
air quality standards, and production at our facilities could be impaired if AGCO Power and these suppliers are unable to timely
respond to any changes in environmental laws and regulations affecting engine emissions, including the emissions of
greenhouse gases (“GHG”). Compliance with environmental and safety regulations has added, and will continue to add, to the
cost of our products and increase the capital-intensive nature of our business.

Climate change, as a result of emissions of GHG, is a significant topic of discussion and may generate U.S. and other

regulatory responses. It is impracticable to predict with any certainty the impact on our business of climate change or the
regulatory responses to it, although we recognize that they could be significant. The most direct impacts are likely to be an
increase in energy costs, which would increase our operating costs (through increased utility and transportation costs) and an
increase in the costs of the products we purchase from others. In addition, increased energy costs for our customers could
impact demand for our equipment. It is too soon for us to predict with any certainty the ultimate impact of additional
regulation, either directionally or quantitatively, on our overall business, results of operations or financial condition.

Regulation and Government Policy

Domestic and foreign political developments and government regulations and policies directly affect the agricultural

industry and indirectly affect the agricultural equipment business in the United States and abroad. The application, modification
or adoption of laws, regulations or policies could have an adverse effect on our business.

We have manufacturing facilities or other physical presence in approximately 33 countries and sell our products in

approximately 140 countries. This subjects us to a range of trade, product, foreign exchange, employment, tax and other laws
and regulations, in addition to the environmental regulations discussed previously, in a significant number of jurisdictions.
Many jurisdictions and a variety of laws regulate the contractual relationships with our dealers. These laws impose substantive
standards on the relationships between us and our dealers, including events of default, grounds for termination, non-renewal of
dealer contracts and equipment repurchase requirements. Such laws could adversely affect our ability to terminate our dealers.

In addition, each of the jurisdictions within which we operate or sell products has an important interest in the success

of its agricultural industry and the consistency of the availability of reasonably priced food sources. These interests result in
active political involvement in the agricultural industry, which, in turn, can impact our business in a variety of ways.

Corporate Social Responsibility

For AGCO, corporate social responsibility is a core business imperative that underlies our strategy to build a more

valuable enterprise through long-term economic, social and environmental sustainability in support of our key stakeholders and
AGCO communities. This aligns with our vision to provide high-tech solutions for farmers feeding the world. To achieve that
vision, we seek opportunities in every aspect of the AGCO agricultural value chain to address many of today’s most significant
challenges, including food security, farmer livelihood and resource efficiency. We see efficiency as key to sustainable
agriculture and achieving the United Nations Sustainable Development Goals related to minimizing the environmental impact
of farming and ending hunger.

Our products and processes address significant long-term issues, including (1) the reduction of fuel (carbon) usage and
related emissions in connection with the engines contained in the equipment that we manufacture, (2) the minimization of other
inputs used by farmers, e.g., seeds, fertilizer, pesticide, and water, through smart farming technology and equipment,

(3) improved crop storage and animal welfare, and (4) the reduction in our consumption of natural resources in the production
of the equipment that we manufacture. For example, for U.S. equipment, our engines now are Tier 4 compliant and, in Europe,
they now are Stage V compliant; in both cases representing meaningful reductions in fuel usage and greenhouse gases in our
two largest markets. In addition, our sprayer equipment is equipped with variable rate technology, nozzle controls and
positioning systems that allow farmers to precisely apply nutrients and chemicals which result in overall reduced chemical and
fertilizer usage.

Our efforts include the AGCO Future Farm and training center in Zambia, which teaches farmers how to farm more

sustainably, with focused efficiency, while preserving soil health and reducing post-harvest loss. Additionally, our AGCO
Agriculture Foundation, initiated by AGCO in 2018, is a private foundation with the vision to prevent and relief hunger.
foundation initiates impactful programs that support food security, foster sustainable agricultural development and build
The
needed agricultural infrastructure in marginalized farming communities. We launched the AGCO Agriculture Foundation to
focus our philanthropy on building needed agricultural infrastructure to help feed the world sustainably and equitably.

Employees

As of December 31, 2019, we employed approximately 21,000 employees, including approximately 4,650 employees
in the United States and Canada. A majority of our employees at our manufacturing facilities, both domestic and international,
are represented by collective bargaining agreements and union contracts with terms that expire on varying dates. We currently
do not expect any significant difficulties in renewing these agreements.

Available Information

Our Internet address is www.agcocorp.com. We make the following reports filed by us available, free of charge, on

our website under the heading “SEC Filings” in our website’s “Investors” section:

•

annual reports on Form 10-K;

quarterly reports on Form 10-Q;

current reports on Form 8-K;

proxy statements for the annual meetings of stockholders; and

reports on Form SD.

These reports are made available on our website as soon as practicable after they are filed with the Securities and

Exchange Commission (“SEC”). The SEC also maintains a website (www.sec.gov) that contains our reports and other
information filed with the SEC.

We also provide corporate governance and other information on our website. This information includes:

•

charters for the standing committees of our board of directors, which are available under the heading “Charters of
the Committees of the Board” in the “Governance, Committees, & Charters” section of the “Corporate
Governance” section of our website located under “Investors,” and

our Global Code of Conduct, which is available under the heading “Global Code of Conduct” in the “Corporate
Governance” section of our website located under “Investors.”

In addition, in the event of any waivers of our Global Code of Conduct, those waivers will be available under the

heading “Corporate Governance” of our website. None of these materials, including the other materials available on our
website, is incorporated by reference into this Form 10-K unless expressly provided.

Item 1A.

Risk Factors

We make forward-looking statements in this report, in other materials we file with the SEC, on our website,
or otherwise release to the public. In addition, our senior management makes forward-looking statements orally to analysts,
investors, the media and others. Statements, including the statements contained in Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” concerning our future operations, prospects, strategies, products,
manufacturing facilities, legal proceedings, financial condition, financial performance (including growth and earnings) and
demand for our products and services, and other statements of our plans, beliefs or expectations, net sales, industry conditions,
currency translation impacts, market demand, farm incomes, weather conditions, commodity prices, general economic
conditions, availability of financing, working capital, capital expenditures, debt service requirements, margins, production
volumes, cost reduction initiatives, investments in product development, compliance with financial covenants, support from
lenders, recovery of amounts under guarantee, uncertain income tax provisions, funding of our pension and postretirement
benefit plans, or realization of net deferred tax assets, are forward-looking statements. The forward-looking statements we
make are not guarantees of future performance and are subject to various assumptions, risks and other factors that could cause
actual results to differ materially from those suggested by the forward-looking statements. These factors include, among others,
those set forth below and in the other documents that we file with the SEC. There also are other factors that we may not
describe, generally because we currently do not perceive them to be material, or likely to become material, that could cause
actual results to differ materially from our expectations.

These risks could impact our business in a number of ways, including by negatively impacting our future results of

operations, cash flows and financial condition. For simplicity, below we collectively refer to these impacts as our
“performance.”

We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise, except as required by law.

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, weather conditions and lower
commodity prices, will adversely affect us.

Our success depends entirely on the vitality of the agricultural industry. Historically, the agricultural industry has been

cyclical and subject to a variety of economic and other factors. Sales of agricultural equipment, in turn, also are cyclical and
generally reflect the economic health of the agricultural industry. The economic health of the agricultural industry is affected by
numerous factors, including farm income, farm input costs, land values and debt levels, all of which are influenced by levels of
commodity prices, acreage planted, crop yields, agricultural product demand (including crops used as renewable energy
sources), government policies and government subsidies. The economic health also is influenced by general economic
conditions, interest rate and exchange rate levels, and the availability of financing for retail customers, including financing
subsidies to farmers, which can be significant in countries such as Brazil. Trends in the agricultural industry, such as farm
consolidations, may affect the agricultural equipment market. In addition, weather conditions, such as floods, heat waves or
droughts, and pervasive livestock or crop diseases affect farmers’ buying decisions. Downturns in the agricultural industry due
to these or other factors, which could vary by market, can result in decreases in demand for agricultural equipment, which
would adversely affect our performance. Moreover, the unpredictable nature of many of these factors and the resulting
volatility in demand make it difficult for us to accurately predict sales and optimize production. This, in turn, can result in
higher costs, including inventory carrying costs and underutilized manufacturing capacity. During previous downturns in the
agricultural industry, we experienced significant and prolonged declines in our performance, and we expect our business to
remain subject to similar market fluctuations in the future.

The agricultural equipment industry is highly seasonal, and seasonal fluctuations significantly impact our performance.

The agricultural equipment business is highly seasonal, which causes our quarterly results and our cash flow to

fluctuate during the year. Farmers generally purchase agricultural equipment in the Spring and Fall in conjunction with the
major planting and harvesting seasons. In addition, the fourth quarter typically is a significant period for retail sales because of
year-end tax planning considerations, the increase in availability of funds from completed harvests, and the timing of dealer
incentives. Our net sales and income from operations historically have been the lowest in the first quarter and have increased in
subsequent quarters as dealers anticipate increased retail sales in subsequent quarters.

Most of our sales depend on the availability of financing to retail customers, and any disruption in their ability to obtain
financing, whether due to economic downturns or otherwise, will result in the sale of fewer products by us. In addition, the
collectability of receivables that are created from our sales, as well as from such retail financing, is critical to our business.

Most retail sales of our products are financed, either by our AGCO Finance joint ventures or by a bank or other private

lender. The AGCO Finance joint ventures, which are controlled by Rabobank and are dependent upon Rabobank for financing
as well, finance approximately 40% to 50% of the retail sales of our tractors and combines in the markets where the joint
ventures operate. Any difficulty by Rabobank in continuing to provide that financing, or any business decision by Rabobank as
the controlling member not to fund the business or particular aspects of it (for example, a particular country or region), would
require the joint ventures to find other sources of financing (which may be difficult to obtain) or would require us to find other
sources of retail financing for our dealers and their retail customers, or our dealers and their retail customers would be required
to utilize other retail financing providers. In an economic downturn, we expect that financing for capital equipment purchases
generally would become more difficult or more expensive to obtain. To the extent that financing is not available, or available
only at unattractive prices, our sales would be negatively impacted.

Both AGCO and our AGCO Finance joint ventures have substantial accounts receivable from dealers and retail

customers, and we both are adversely impacted when the collectability of these receivables is not consistent with historical
experience. This collectability is dependent on the financial strength of the agricultural industry, which in turn is dependent
upon the factors discussed elsewhere in this “Risk Factors” section. In addition, the AGCO Finance joint ventures may project
estimated credit losses that exceed expectations and adversely affect their financial condition and results of operations.
The finance joint ventures lease equipment as well and also may experience residual value losses that exceed expectations
caused by lower pricing for used equipment and higher than expected returns at lease maturity. To the extent that defaults and
losses are higher than expected, our equity in the net earnings of the finance joint ventures would be less, or there could be
losses, which could materially impact our performance.

Our success depends on the introduction of new products, which requires substantial expenditures.

Our long-term results depend upon our ability to introduce and market new products successfully. The success of our

new products will depend on a number of factors, including:

•

innovation;

customer acceptance;

the efficiency of our suppliers in providing component parts and of our manufacturing facilities in producing final
products; and

the performance and quality of our products relative to those of our competitors.

As both we and our competitors continuously introduce new products or refine versions of existing products, we

cannot predict the level of market acceptance or the amount of market share our new products will achieve. We have
experienced delays in the introduction of new products in the past, and we may experience delays in the future. Any delays or
other problems with our new product launches will adversely affect our performance. In addition, introducing new products can
result in decreases in revenues from our existing products. Consistent with our strategy of offering new products and product
refinements, we expect to make substantial investments in product development and refinement. We may need more funding
for product development and refinement than is readily available, which could adversely affect our business.

Our expansion plans in emerging markets entail significant risks.

Our long-term strategy includes establishing a greater manufacturing and supply-chain and/or marketing presence in

emerging markets such as India, China and Africa. As we progress with these efforts, it will involve a significant investment of
capital and other resources and entail various risks. These include risks attendant to obtaining necessary governmental
approvals and the construction of facilities in a timely manner and within cost estimates, the establishment of supply channels,
the commencement of efficient manufacturing operations, and, ultimately, the acceptance of the products by retail customers.
While we expect the expansion to be successful, should we encounter difficulties involving these or similar factors, it may not
be as successful as we anticipate.

We face significant competition, and, if we are unable to compete successfully against other agricultural equipment
manufacturers, we will lose dealers and their retail customers and our net sales and profitability will decline.

The agricultural equipment business is highly competitive, particularly in our major markets. Our two key competitors,
Deere & Company and CNH Industrial N.V., are substantially larger than we are and have greater financial and other resources.
In addition, in some markets, we compete with smaller regional competitors with significant market share in a single country or
group of countries. Our competitors may substantially increase the resources devoted to the development and marketing,
including discounting, of products that compete with our products, which would necessitate our making similar expenditures.
In addition, competitive pressures in the agricultural equipment business may affect the market prices of new and used
equipment, which, in turn, may adversely affect our performance.

We maintain an independent dealer and distribution network in the markets where we sell products. The financial and

operational capabilities of our dealers and distributors are critical to our ability to compete in these markets. In addition, we
compete with other manufacturers of agricultural equipment for dealers. If we are unable to compete successfully against other
agricultural equipment manufacturers, we could lose dealers and their retail customers and performance may decline.

Rationalization or restructuring of manufacturing facilities, and plant expansions and system upgrades at our
manufacturing facilities, may cause production capacity constraints and inventory fluctuations.

The rationalization of our manufacturing facilities has at times resulted in, and similar rationalizations or restructurings

in the future may result in, temporary constraints upon our ability to produce the quantity of products necessary to fill orders
and thereby complete sales in a timely manner. In addition, system upgrades at our manufacturing facilities that impact
ordering, production scheduling, manufacturing and other related processes are complex, and could impact or delay production.
A prolonged delay in our ability to fill orders on a timely basis could affect customer demand for our products and increase the
size of our product inventories, causing future reductions in our manufacturing schedules and adversely affecting our
performance. Moreover, our continuous development and production of new products often involve the retooling of existing
manufacturing facilities. This retooling may limit our production capacity at certain times in the future, which could adversely
affect our performance. In addition, the expansion and reconfiguration of existing manufacturing facilities, as well as the
start-up of new manufacturing operations in emerging markets, such as China and Russia, could increase the risk of production
delays, as well as require significant investments.

Our business will be adversely impacted if the coronavirus outbreak spreads widely or otherwise impacts our manufacturing
and supply chain or demand for our products

The extent that the coronavirus outbreak will spread widely and its impact on our results will depend on future

developments, which are highly uncertain and unpredictable. We have factories and suppliers in China and Italy, where the
early outbreaks have been significant and where production of our products could be directly impacted by actions taken to
contain the virus. The virus could spread to areas in other countries where we have other factories and suppliers. In response to
intensifying efforts to contain the spread of this coronavirus, we have limited travel by our employees and stopped travel by our
employees to certain countries. In addition, our factories are dependent upon parts and components manufactured by others,
and to the extent that our suppliers are impacted by the virus it likely will reduce the availability, or result in delays, of parts
and components to us, which in turn could interrupt our ability to produce and sell completed products. Recently there have
been circumstances of freight channels being interrupted and increases in the freight prices, which also could impact our
business. While we do not anticipate a significant impact upon demand for our products, in the event that the virus spreads
widely, or there are negative impacts to economic conditions and resulting farmer confidence, there could be a reduction in
market demand or delays in sales.

We depend on suppliers for components, parts and raw materials 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. We also are subject to raw material price fluctuations, which can adversely affect
our manufacturing costs.

Our products include components and parts manufactured by others. As a result, our ability to timely and efficiently
manufacture existing products, to introduce new products and to shift manufacturing of products from one facility to another
depends on the quality of these components and parts and the timeliness of their delivery to our facilities. At any particular
time, we depend on numerous suppliers, and the failure by one or more of our suppliers to perform as needed will result in
fewer products being manufactured, shipped and sold. If the quality of the components or parts provided by our suppliers is less
than required and we do not recognize that failure prior to the shipment of our products, we will incur higher warranty costs.
The timely supply of component parts for our products also depends on our ability to manage our relationships with suppliers,
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to identify and replace suppliers that fail to meet our schedules or quality standards, and to monitor the flow of components and
accurately project our needs. The shift from our existing suppliers to new suppliers, including suppliers in emerging markets,
also may impact the quality and efficiency of our manufacturing capabilities, as well as warranty costs.

Changes in the availability and prices of certain raw materials, components and parts could result in production

disruptions or increased costs and lower profits on the sale of our products. Changes in the availability and price of these raw
materials, components and parts, which have fluctuated significantly in the past and are more likely to fluctuate during times of
economic volatility, as well as regulatory instability or change in tariffs, can significantly increase the costs of production. This,
in turn, could have a material negative effect on performance, particularly if, due to pricing considerations or other factors, we
are unable to recover the increased costs through pricing from our dealers.

A majority of our sales and manufacturing take place outside 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 as well as U.S. laws governing who we sell to and how we conduct business. These risks may delay or reduce our
realization of value from our international operations.

A majority of our sales are derived from sales outside the United States. The foreign countries in which our sales are

the greatest are Germany, France, Brazil, the United Kingdom, Finland and Canada. We have significant manufacturing
operations in France, Germany, Brazil, Italy and Finland, and we have established manufacturing operations in emerging
markets, such as China. Many of our sales involve products that are manufactured in one country and sold in a different
country, and, therefore, our performance can be adversely affected by adverse changes, in either the country of origin or the
country of destination, in the factors discussed elsewhere in this "Risk Factors" section, particularly the factors that impact the
delivered cost of our products. Our business practices in these foreign countries generally must comply with U.S. law,
including limitations on where and to whom we may sell products and the Foreign Corrupt Practices Act (“FCPA”). We have a
compliance program in place designed to reduce the likelihood of potential violations of these laws, but it is difficult to identify
and prevent violations. Significant violations could subject us to fines and other penalties as well as increased compliance
costs. Some of our international operations also are, or might become, subject to various risks that are not present in domestic
operations, including restrictions on dividends and the repatriation of funds. Foreign developing markets may present special
risks, such as unavailability of financing, inflation, slow economic growth, price controls and difficulties in complying with
U.S. regulations.

Domestic and foreign political developments and government regulations and policies directly affect the international
agricultural industry, which affects the demand for agricultural equipment. If demand for agricultural equipment declines, our
performance will be adversely affected. The application, modification or adoption of laws, regulations, trade agreements or
policies adversely affecting the agricultural industry, including the imposition of import and export duties and quotas,
expropriation and potentially burdensome taxation, could have an adverse effect on our business. Trade restrictions, including
potential withdrawal from or modification of existing trade agreements, negotiation of new trade agreements, and imposition of
new (and retaliatory) tariffs against certain countries or covering certain products, could limit our ability to capitalize on current
and future growth opportunities in the international markets in which we operate and impair our ability to expand our business
by offering new technologies, products and services. These changes also can impact the cost of the products we manufacture,
including the cost of steel. These trade restrictions and changes in, or uncertainty surrounding, global trade policy may affect
our competitive position.

The health of the agricultural industry and the ability of our international dealers and retail customers to operate their

businesses, in general, are affected by domestic and foreign government programs that provide economic support to farmers. As
a result, farm income levels and the ability of farmers to obtain advantageous financing and other protections would be reduced
to the extent that any such programs are curtailed or eliminated. Any such reductions likely would result in a decrease in
demand for agricultural equipment. For example, a decrease or elimination of current price protections for commodities or of
subsidy payments for farmers in the European Union, the United States, Brazil or elsewhere in South America would
negatively impact the operations of farmers in those regions, and, as a result, our sales may decline if these farmers delay,
reduce or cancel purchases of our products. In emerging markets, some of these (and other) risks can be greater than they might
be elsewhere. In addition, in some cases, the financing provided by the AGCO Finance joint ventures or by others is supported
by a government subsidy or guarantee. The programs under which those subsidies and guarantees are provided generally are of
limited duration and subject to renewal and contain various caps and other limitations. In some markets, for example Brazil,
this support is quite significant. In the event the governments that provide this support elect not to renew these programs, and
were financing not available on reasonable terms, whether through our joint ventures or otherwise, our performance would be
negatively impacted.

As a result of the multinational nature of our business and the acquisitions that we have made over time, our corporate
and tax structures are complex, with a significant portion of our operations being held through foreign holding companies. As a
result, it can be inefficient, from a tax perspective, for us to repatriate or otherwise transfer funds, and we may be subject to
taxation from multiple tax jurisdictions. In addition, we must comply with a greater level of tax-related regulation and reviews
by multiple governmental units than would companies with a more simplified structure. Our foreign and U.S. operations also
routinely sell products to, and license technology to other operations of ours. The pricing of these intra-company transactions is
subject to regulation and review as well. While we make every effort to comply with all applicable tax laws, audits and other
reviews by governmental units could result in our being required to pay additional taxes, interest and penalties.

Brexit and political uncertainty in the United Kingdom and the European Union could disrupt our operations and adversely
affect our performance.

We have significant operations in the United Kingdom. The United Kingdom withdrew from the European Union on

January 31, 2020 and is now in a period of transition which currently is stated to continue until the end of 2020.
The transitional period maintains all existing trading arrangements. The current rules on trade, travel, and business for the
United Kingdom and the European Union will continue to apply through the transitional period during which time the United
Kingdom and the European Union will negotiate future trading arrangements. Uncertainty related to the withdrawal of the
United Kingdom from the European Union, and the outcome of the negotiations related to future trade and other arrangements,
may reduce demand for our products and services and may increase the costs and difficulty of doing business in the United
Kingdom and the European Union.

Brexit also may result in significant changes in the British regulatory environment, which likely would increase our

compliance costs. We may find it more difficult to conduct business in the United Kingdom and the European Union, as Brexit
may result in increased regulatory complexity and increased restrictions on the movement of capital, goods and personnel.
Depending on the outcome of negotiations between the United Kingdom and the European Union regarding the terms of Brexit,
we may decide to relocate or otherwise alter certain of our European or United Kingdom operations to respond to the new
business, legal, regulatory, tax and trade environments. Brexit may adversely affect our relationships with our dealers and their
retail customers, suppliers and employees and our performance could be adversely affected.

We can experience substantial and sustained volatility with respect to currency exchange rates and interest rates, which can
adversely affect our reported results of operations and the competitiveness of our products.

We conduct operations in a variety of currencies. Our production costs, profit margins and competitive position are
affected by the strength of the currencies in countries where we manufacture or purchase goods relative to the strength of the
currencies in countries where our products are sold. We also are subject to currency exchange rate risk to the extent that our
costs are denominated in currencies other than those in which we denominate sales and to risks associated with translating the
financial statements of our foreign subsidiaries from local currencies into United States dollars. Similarly, changes in interest
rates affect us by increasing or decreasing borrowing costs and finance income. Our most significant transactional foreign
currency exposures are the Euro, the Brazilian real and the Canadian dollar in relation to the United States dollar, and the Euro
in relation to the British pound. Where naturally offsetting currency positions do not occur, we attempt to manage these risks by
economically hedging some, but not necessarily all, of our exposures through the use of foreign currency forward exchange or
option contracts. As with all hedging instruments, there are risks associated with the use of foreign currency forward exchange
or option contracts, interest rate swap agreements and other risk management contracts. While the use of such hedging
instruments provides us with protection for a finite period of time from certain fluctuations in currency exchange and interest
rates, when we hedge we forego part or all the benefits that might result from favorable fluctuations in currency exchange and
interest rates. In addition, any default by the counterparties to these transactions could adversely affect us. Despite our use of
economic hedging transactions, currency exchange rate or interest rate fluctuations may adversely affect our performance.

In July 2017, the Financial Conduct Authority in the UK, the governing body responsible for regulating the London

Interbank Offered Rate (“LIBOR”), announced that it no longer will compel or persuade financial institutions and panel banks
to make LIBOR submissions after 2021. This decision is expected to result in the end of the use of LIBOR as a reference rate
for commercial loans and other indebtedness. We have both LIBOR-denominated and EURIBOR-denominated indebtedness or
derivative instruments. The transition to alternatives to LIBOR could be modestly disruptive to the credit markets, and while
we do not believe that the impact would be material to us, we do not have insight into what the impacts might be. In the event
that LIBOR is no longer published, interest on our credit facility will be calculated based upon a base rate, as defined in the
facility agreement. Our credit facility also provides for an expedited amendment process once a replacement for LIBOR is
established.

We are subject to extensive environmental laws and regulations, including increasingly stringent engine emissions
standards, 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 are subject to increasingly stringent environmental laws and regulations in the countries in which we operate.

These regulations govern, among other things, emissions into the air, discharges into water, the use, handling and disposal of
hazardous substances, waste disposal and the prevention and remediation of soil and groundwater contamination. Our costs of
complying with these or any other current or future environmental regulations may be significant. For example, several
countries have adopted more stringent environmental regulations regarding emissions into the air, and it is possible that new
emissions-related legislation or regulations will be adopted in connection with concerns regarding GHG. The regulation of
GHG emissions from certain stationary or mobile sources could result in additional costs to us in the form of taxes or emission
allowances, facilities improvements and energy costs, which would increase our operating costs through higher utility and
transportation expenses and costs of materials. Increased input costs, such as fuel and fertilizer, and compliance-related costs
also could impact retail customer operations and demand for our equipment. Because the impact of any future GHG legislative,
regulatory or product standard requirements on our global businesses and products is dependent on the timing and design of
mandates or standards, we are unable to predict its potential impact at this time.

In addition, we may be subject to liability in connection with properties and businesses that we no longer own or

operate. We may be adversely impacted by costs, liabilities or claims with respect to our operations under existing laws or those
that may be adopted in the future that could apply to both future and prior conduct. If we fail to comply with existing or future
laws and regulations, we may be subject to governmental or judicial fines or sanctions, or we may not be able to sell our
products and, therefore, our performance could be adversely affected.

In addition, the products that we manufacture or sell, particularly engines, are subject to increasingly stringent

environmental regulations, including those that limit GHG emissions. As a result, on an ongoing basis we incur significant
engineering expenses and capital expenditures to modify our products to comply with these regulations. Further, we may
experience production delays if we or our suppliers are unable to design and manufacture components for our products that
comply with environmental standards. For instance, as we are required to meet more stringent engine emission reduction
standards that are applicable to engines we manufacture or incorporate into our products, we expect to meet these requirements
through the introduction of new technology to our products, engines and exhaust after-treatment systems, as necessary. Failure
to meet applicable requirements could materially affect our business and results of operations.

We are subject to SEC disclosure obligations relating to “conflict minerals” (columbite-tantalite, cassiterite (tin),

wolframite (tungsten) and gold) that are sourced from the Democratic Republic of Congo or adjacent countries. Complying
with these requirements has and will require us to incur additional costs, including the costs to determine the sources of any
conflict minerals used in our products and to modify our processes or products, if required. As a result, we may choose to
modify the sourcing, supply and pricing of materials in our products. In addition, we may face reputational and regulatory risks
if the information that we receive from our suppliers is inaccurate or inadequate, or our process for obtaining that information
does not fulfill the SEC’s requirements. We have a formal policy with respect to the use of conflict minerals in our products that
is intended to minimize, if not eliminate, conflict minerals sourced from the covered countries to the extent that we are unable
to document that they have been obtained from conflict-free sources.

Our labor force is heavily unionized, and our obligations under collective bargaining agreements and labor laws subject us
to the risks of work interruption or stoppage and could cause our costs to be higher.

Most of our employees, most notably at our manufacturing facilities, are subject to collective bargaining agreements

and union contracts with terms that expire on varying dates. Several of our collective bargaining agreements and union
contracts are of limited duration and, therefore, must be re-negotiated frequently. As a result, we are at greater risk of work
interruptions or stoppages than non-unionized companies, and any work interruption or stoppage could significantly impact the
volume of products we have available for sale. In addition, collective bargaining agreements, union contracts and labor laws
may impair our ability to streamline existing manufacturing facilities, restructure our business or otherwise reduce our labor
costs because of limitations on personnel and salary changes and similar restrictions.

We have significant pension and retiree healthcare obligations with respect to our employees, and our cash flow available
for other purposes 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 will result in
increased pension expense in future periods.

A portion of our active and retired employees participate in defined benefit pension and retiree healthcare plans under

which we are obligated to provide prescribed levels of benefits regardless of the value of the underlying assets, if any, of the
applicable plans. To the extent that our obligations are unfunded or underfunded, we will have to use cash flow from operations
and other sources to fulfill our obligations either as they become due or over some shorter funding period. In addition, since the
assets that we already have provided to fund these obligations are invested in debt instruments and other securities, the value of
these assets varies due to market factors. Historically, these fluctuations have been significant and sometimes adverse, and there
can be no assurances that they will not be significant or adverse in the future. Similarly the amount of our obligations varies
depending upon mortality assumptions, discount rates, salary growth, retirement rates and ages, inflation, changes in health
care costs and similar factors. We also are subject to laws and regulations governing the administration of our plans in certain
countries, and the specific provisions, benefit formulas and related interpretations of such laws, regulations and provisions can
be complex. Failure to properly administer the provisions of our plans and comply with applicable laws and regulations could
have an adverse impact to our results of operations. As of December 31, 2019, we had substantial unfunded or underfunded
obligations related to our pension and other postretirement health care benefits. See the notes to our Consolidated Financial
Statements contained in Item 8, “Financial Statements and Supplementary Data,” for more information regarding our unfunded
or underfunded obligations.

Our business routinely is subject to claims and legal actions, some of which could be material.

We routinely are a party to claims and legal actions incidental to our business. These include claims for personal

injuries by users of farm equipment, disputes with distributors, vendors and others with respect to commercial matters, and
disputes with taxing and other governmental authorities regarding the conduct of our business. While these matters generally
are not material, it is entirely possible that a matter will arise that is material to our business.

In addition, we use a broad range of technology in our products. We developed some of this technology, we license
some of this technology from others, and some of the technology is embedded in the components and parts that we purchase
from suppliers. From time-to-time, third parties make claims that the technology that we use violates their patent rights. While
to date none of these claims have been significant, we cannot provide any assurances that there will not be significant claims in
the future or that currently existing claims will not prove to be more significant than anticipated.

We have a substantial amount of indebtedness, and, as a result, we are subject to certain restrictive covenants and payment
obligations that may adversely affect our ability to operate and expand our business.

Our credit facility and certain other debt agreements have various financial and other covenants that require us to

maintain certain total debt to EBITDA and interest coverage ratios. In addition, the credit facility and certain other debt
agreements contain other restrictive covenants, such as ones that limit the incurrence of indebtedness and the making of certain
payments, including dividends, and are subject to acceleration in the event of default. If we fail to comply with these covenants
and are unable to obtain a waiver or amendment, an event of default would result.

If any event of default were to occur, our lenders could, among other things, declare outstanding amounts due and
payable, and our cash may become restricted. In addition, an event of default or declaration of acceleration under our credit
facility or certain other debt agreements also could result in an event of default under our other financing agreements.

Our substantial indebtedness could have other important adverse consequences such as:

•

requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness,
which would reduce the availability of our cash flow to fund future working capital, capital expenditures,
acquisitions and other general corporate purposes;

increasing our vulnerability to general adverse economic and industry conditions;

limiting our flexibility in planning for, or reacting to, changes in our business and the agricultural industry;

restricting us from being able to introduce new products or pursuing business opportunities;

placing us at a competitive disadvantage compared to our competitors that may have less indebtedness; and

•

limiting, along with the financial and other restrictive covenants in our indebtedness, among other things, our
ability to borrow additional funds, repurchase shares, pay cash dividends or engage in or enter into certain
transactions.

Our business increasingly is subject to regulations relating to privacy and data protection, and if we violate any of those
regulations we could be subject to significant claims, penalties and damages.

Increasingly, the United States, the European Union, Brazil and other governmental entities are imposing regulations

designed to protect the collection, maintenance and transfer of personal information. For example, the European Union adopted
the General Data Protection Regulation (the “GDPR”) that imposed stringent data protection requirements and greater penalties
for non-compliance beginning in May 2018. The GDPR also protects a broader set of personal information than traditionally
has been protected in the United States and provides for a right of “erasure.” Other regulations govern the collection and
transfer of financial data and data security generally. These regulations generally impose penalties in the event of violations.
While we attempt to comply with all applicable cybersecurity regulations, their implementation is complex, and, if we are not
successful, we may be subject to penalties and claims for damages from regulators and the impacted parties.

Cybersecurity breaches and other disruptions to our information technology infrastructure could interfere with our
operations and could compromise confidential information, exposing us to liability that could cause our business and
reputation to suffer.

We rely upon information technology networks and systems, some of which are managed by third parties, to process,

transmit and store electronic information, and to manage or support a variety of business processes and activities, including
supply chain, manufacturing, distribution, invoicing and collection of payments from dealers or other purchasers of our
equipment. We also use information technology systems to record, process and summarize financial information and results of
operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements.
Additionally, we collect and store sensitive data, including intellectual property and proprietary business information, in data
centers and on information technology networks. The secure operation of these information technology networks and the
processing and maintenance of this information is critical to our business operations and strategy. Despite security measures
and business continuity plans, our information technology networks and infrastructure may be vulnerable to damage,
disruptions or shutdowns due to attacks by cyber criminals or breaches due to employee error or malfeasance or other
disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses,
telecommunication or utility failures, terrorist acts or, natural disasters or other catastrophic events. The occurrence of any of
these events could compromise our networks, and the information stored there could be accessed, publicly disclosed, lost or
stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or
regulatory penalties under laws protecting the privacy of personal information, and could disrupt our operations and damage
our reputation, which could adversely affect our performance. In addition, as security threats continue to evolve and increase in
frequency and sophistication, we may need to invest additional resources to protect the security of our systems.

We may encounter difficulties in integrating businesses we acquire and may not fully achieve, or achieve within a
reasonable time frame, expected strategic objectives and other expected benefits of the acquisitions.

From time-to-time we seek to expand through acquisitions of other businesses. We expect to realize strategic and other

benefits as a result of our acquisitions, including, among other things, the opportunity to extend our reach in the agricultural
industry and provide our dealers and their retail customers with an even wider range of products and services. However, it is
impossible to predict with certainty whether, or to what extent, these benefits will be realized or whether we will be able to
integrate acquired businesses in a timely and effective manner. For example:

•

the costs of integrating acquired businesses and their operations may be higher than we expect and may require
significant attention from our management;

the businesses we acquire may have undisclosed liabilities, such as environmental liabilities or liabilities for
violations of laws, such as the FCPA, that we did not expect; and

our ability to successfully carry out our growth strategies for acquired businesses will be affected by, among other
things, our ability to maintain and enhance our relationships with their existing customers, our ability to provide
additional product distribution opportunities to them through our existing distribution channels, changes in the
spending patterns and preferences of customers and potential customers, fluctuating economic and competitive
conditions and our ability to retain their key personnel.

Our ability to address these issues will determine the extent to which we are able to successfully integrate, develop

and grow acquired businesses and to realize the expected benefits of these transactions. Our failure to do so could have a
material adverse effect on our performance following the transactions.

Changes to United States tax, tariff, trade and import/export regulations may have a negative effect on global economic
conditions, financial markets and our business.

There have been ongoing discussions and significant changes to United States trade policies, treaties, tariffs and

taxes. Although the levels change from period to period, we generally have substantial imports into the United States of
products and components that are either produced in our foreign locations or are purchased from foreign suppliers, and also
have substantial exports of products and components that we manufacture in the United States. The impact of any changes to
current trade, tariff or tax policies relating to imports and exports of goods is dependent on factors such as the treatment of
exports as a credit to imports, and the introduction of any tariffs or taxes relating to imports from specific countries. The most
significant changes have been the imposition of tariffs by the United States on imports from China and the imposition by China
of tariffs on imports from the United States. These trade restrictions include tariffs on the import of agricultural commodities
into China, which are critical to our customers. Policies impacting exchange rates and commodity prices or limiting the export
of commodities could have a material adverse impact on the international flow of agricultural and other commodities that may
result in a corresponding negative impact on the demand for agricultural equipment across the world. Our sales could be
negatively impacted by such policies because farm income strongly influences sales of such equipment globally.

In the past, we have had moderate amounts of imports into the U.S. from China. To date, the impact of U.S. import
tariffs on China sourced equipment has not been material to us because we have been able to redirect production and employ
sourcing alternatives for products previously imported into the U.S. from our China manufacturing facility. In addition, we do
not export significant amounts from the United States into China. It is unclear what other changes might be considered or
implemented and what response to any such changes may be by the governments of other countries. Any changes that increase
the cost of international trade or otherwise impact the global economy, including through the increase in domestic prices for
raw materials, could have a material adverse effect on our performance. For example, the United States, Canada and Mexico
have renegotiated the North America Free Trade Agreement, and the impacts of the changes brought about by the new
agreement, named the United States, Mexico, Canada Agreement (the “USMCA”), are not currently known. We continue to
monitor closely the status and implementation of the USMCA.

We have joint ventures in the Netherlands and Russia with an entity that currently is operating under a time-limited
general license from the U.S. Department of Treasury authorizing the maintenance or wind-down of operations and existing
contracts. In the event that the license expires without further relief being granted or without other authorization from the
U.S. Department of the Treasury, we may no longer be able to continue the joint ventures' commercial operations, and we
would be required to assess the fair value of certain assets related to the joint ventures for potential impairment. Our most
recent preliminary assessment indicated that impairment, if any, would not be material.

Item 1B.

Unresolved Staff Comments

Not applicable.

Item 2.

Properties

Our principal manufacturing locations and/or properties as of January 31, 2020, were as follows:

Location
United States:

Description of Property

Leased
(Sq. Ft.)

Owned
(Sq. Ft.)

Assumption, Illinois .......................................... Manufacturing/Sales and Administrative Office
Batavia, Illinois ................................................. Parts Distribution
Duluth, Georgia................................................. Corporate Headquarters
Hesston, Kansas ................................................ Manufacturing
Jackson, Minnesota ........................................... Manufacturing

International:

Beauvais, France(1) ................................................. Manufacturing
Breganze, Italy .................................................. Manufacturing
Ennery, France................................................... Parts Distribution
Linnavuori, Finland........................................... Manufacturing
Hohenmölsen, Germany.................................... Manufacturing
Marktoberdorf, Germany .................................. Manufacturing
Wolfenbüttel, Germany..................................... Manufacturing
Stockerau, Austria ............................................. Manufacturing
Biatorbagy, Hungary ......................................... Manufacturing
Thisted, Denmark.............................................. Manufacturing
Suolahti, Finland ............................................... Manufacturing/Parts Distribution
Canoas, Brazil ................................................... Regional Headquarters/Manufacturing
Mogi das Cruzes, Brazil.................................... Manufacturing
Santa Rosa, Brazil ............................................. Manufacturing
Changzhou, China ............................................. Manufacturing

_______________________________________
(1) Includes our joint venture, GIMA, in which we own a 50% interest.

310,200
159,000
6,300
51,400

14,300
11,800
839,600
245,400

231,600

287,300
133,200
97,500
12,900

186,800

933,900

1,469,100
986,400

2,231,300
1,562,000
360,300
396,300
437,000
1,504,600
546,700
160,700

295,300
561,400
1,120,000
737,400
508,900
767,000

We consider each of our facilities to be in good condition and adequate for its present use. We believe that we have

sufficient capacity to meet our current and anticipated manufacturing requirements.

Item 3.

Legal Proceedings

In August 2008, as part of a routine audit, the Brazilian taxing authorities disallowed deductions relating to the

amortization of certain goodwill recognized in connection with a reorganization of our Brazilian operations and the related
transfer of certain assets to our Brazilian subsidiaries. The amount of the tax disallowance through December 31, 2019, not
including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $32.6 million). The amount
ultimately in dispute will be significantly greater because of interest and penalties. We have been advised by our legal and tax
advisors that our position with respect to the deductions is allowable under the tax laws of Brazil. We are contesting the
disallowance and believe that it is not likely that the assessment, interest or penalties will be required to be paid. However, the
ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which could take several years.

We are a party to various other legal claims and actions incidental to our business. We believe that none of these

claims or actions, either individually or in the aggregate, is material to our business or financial statements as a whole,
including our results of operations and financial condition.

Item 4.

Mine Safety Disclosures

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Our common stock is listed on the New York Stock Exchange and trades under the symbol AGCO. As of the close

of business on February 24, 2020, the closing stock price was $67.51, and there were 349 stockholders of record (this number
does not include stockholders who hold their stock through brokers, banks and other nominees).

Performance Graph

The following presentation is a line graph of our cumulative total shareholder return on our common stock on an
indexed basis as compared to the cumulative total return of the S&P Mid-Cap 400 Index and a self-constructed peer group
(“Peer Group”) for the five years ended December 31, 2019. Our total returns in the graph are not necessarily indicative of
future performance.

COMPARISON OF CUMULATIVE TOTAL RETURN

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

2014

AGCO Corpora�on

S&P MidCap 400 Index

Custom Peer Group

2015

2016

2017

2018

2019

AGCO Corporation.....................................................
S&P Midcap 400 Index...............................................
Peer Group Index........................................................

Cumulative Total Return for the Years Ended December 31,

2014

2015

2016

2017

2018

2019

$ 100.00

$ 101.39

$ 130.61

$ 162.62

$ 127.97

$ 179.20

100.00

97.82

77.51

118.11

110.42

137.30

159.78

122.08

135.87

154.07

176.12

The total return assumes that dividends were reinvested and is based on a $100 investment on December 31, 2014.

The Peer Group Index is a self-constructed peer group of companies that includes: Caterpillar Inc., CNH Industrial NV,
Cummins Inc., Deere & Company, Eaton Corporation Plc., Ingersoll-Rand Plc., Navistar International Corporation,
PACCAR Inc., Parker-Hannifin Corporation and Terex Corporation.

Issuer Purchases of Equity Securities

The table below sets forth information with respect to purchases of our common stock made by or on behalf of us during

the three months ended December 31, 2019:

Total Number of
Shares Purchased

Average Price
Paid per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(in millions)(3)

84,570

308,880

72,291

465,741

71.39

78.70

74.87

84,570

308,880

72,291

465,741

47.1

17.1

300.0

Period

October 1, 2019 through
October 31, 2019(1) ...........................
November 1, 2019 through
November 30, 2019(2) .......................
December 1, 2019 through
December 31, 2019(2)........................
Total .....................................................

____________________________________
(1)

In August 2019, we entered into an ASR agreement with a third-party financial institution to repurchase $30.0 million of shares of our common stock.
The ASR agreement resulted in the initial delivery of our common stock, representing approximately 80% of the shares that was expected to be
repurchased in connection with the transaction. In October 2019, the remaining shares were delivered. As reflected in the table above, the average price
paid per share for the ASR agreement was the volume-weighted average stock price of our common stock over the term of the ASR agreement. Refer to
Note 9 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for a further discussion of this
matter.
In November 2019, we entered into an ASR agreement with a third-party financial institution to repurchase $30.0 million of shares of our common stock.
Refer to Note 9 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for a further discussion of
this matter.

(2)

(3) The remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $300.0 million, which has

no expiration date.

Item 6.

Selected Financial Data

The following tables present our selected consolidated financial data. The data set forth below should be read together

with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical
Consolidated Financial Statements and the related notes. The Consolidated Financial Statements as of December 31, 2019 and
2018 and for the years ended December 31, 2019, 2018 and 2017 and the reports thereon are included in Item 8, “Financial
Statements and Supplementary Data.” The historical financial data may not be indicative of our future performance.

Operating Data:
Net sales .......................................................................
Gross profit...................................................................
Income from operations ...............................................
Net income ...................................................................
Net loss (income) attributable to noncontrolling

interests .................................................................

Net income attributable to AGCO Corporation and

subsidiaries............................................................
Net income per common share — diluted....................
Cash dividends declared and paid per common share..
Weighted average shares outstanding — diluted .........

Years Ended December 31,

2019

2018

2017

2016

2015

(in millions, except per share data)

9,041.4

9,352.0

8,306.5

7,410.5

7,467.3

1,984.3

1,996.7

1,765.3

1,515.5

1,560.6

348.1

122.8

2.4

125.2

1.63

0.63

77.0

489.0

283.7

404.4

189.3

287.0

160.2

358.6

264.0

1.8

(2.9)

(0.1)

2.4

285.5

3.58

0.60

79.7

186.4

2.32

0.56

80.2

160.1

1.96

0.52

81.7

266.4

3.06

0.48

87.1

As of December 31,

2019

2018

2017

2016

2015

(in millions, except number of employees)

Balance Sheet Data:
Cash and cash equivalents............................................
Total assets ...................................................................
Total long-term debt, excluding current portion and

debt issuance costs ................................................
Stockholders’ equity.....................................................
Other Data:
Number of employees ..................................................

432.8

326.1

367.7

429.7

426.7

7,759.7

7,626.4

7,971.7

7,168.4

6,497.7

1,191.8

2,907.0

1,275.3

2,993.5

1,618.1

3,095.3

1,610.0

2,837.2

925.2

2,883.3

20,961

21,232

20,462

19,795

19,588

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a leading manufacturer and distributor of agricultural equipment and related replacement parts throughout the

world. We sell a full range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage
equipment, seeding and tillage equipment, implements, and grain storage and protein production systems. Our products are
widely recognized in the agricultural equipment industry and are marketed under a number of well-known brand names,
including: Challenger®, Fendt®, GSI®, Massey Ferguson® and Valtra®. We distribute most of our products through a
combination of approximately 3,275 dealers and distributors as well as associates and licensees. In addition, we provide retail
financing through our finance joint ventures with Rabobank.

Financial Highlights

We sell our equipment and replacement parts to our independent dealers, distributors and other customers. A large

majority of our sales are to independent dealers and distributors that sell our products to end users. To the extent practicable,
we attempt to sell products to our dealers and distributors on a level basis throughout the year to reduce the effect of seasonal
demands on our manufacturing operations and to minimize our investment in inventories. However, retail sales by dealers to
farmers are highly seasonal and are linked to the planting and harvesting seasons. In certain markets, particularly in
North America, there is often a time lag, which varies based on the timing and level of retail demand, between our sale of the
equipment to the dealer and the dealer’s sale to a retail customer.

The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items

included in our Consolidated Statements of Operations:

Net sales ..................................................................................................................................
Cost of goods sold...................................................................................................................
Gross profit .............................................................................................................................
Selling, general and administrative expenses .......................................................................
Engineering expenses ...........................................................................................................
Impairment charges ..............................................................................................................
Amortization of intangibles ..................................................................................................
Restructuring expenses .........................................................................................................
Bad debt expense ..................................................................................................................
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 (income) attributable to noncontrolling interests ......................................................
Net income attributable to AGCO Corporation and subsidiaries............................................

___________________________________
(1) Rounding may impact summation of amounts.

Years Ended December 31,
2017(1)
2018(1)
2019(1)
100.0%
100.0%
100.0%

78.1

21.9

11.5

3.8

2.0

0.7

0.1

3.9

0.2

0.7

2.9

2.0

0.9

0.5

1.4

—

78.6

21.4

11.4

3.8

—

0.7

0.1

5.3

0.6

0.8

3.9

1.2

2.7

0.4

3.0

—

78.7

21.3

11.6

3.9

—

0.7

0.1

4.9

0.5

0.9

3.4

1.6

1.8

0.5

2.3

—

1.4%

3.1%

2.2%

2019 Compared to 2018

Net income attributable to AGCO Corporation and subsidiaries for 2019 was $125.2 million, or $1.63 per diluted

share, compared to $285.5 million, or $3.58 per diluted share for 2018.

Net sales for 2019 were approximately $9,041.4 million, or 3.3% lower than 2018, primarily due to decreased sales

volumes in our South American and Asia/Pacific/African (“APA”) regions and the negative impact of currency translation.
Income from operations was $348.1 million in 2019 compared to $489.0 million in 2018. The decrease in income from
operations during 2019 was primarily the result of non-cash goodwill and other intangible asset impairment charges recorded
during the fourth quarter of 2019 related to our grain storage and protein production systems operations in our Europe/Middle
East (“EME”) region. Excluding the impact of $176.6 million of non-cash impairment charges, income from operations during
2019 increased compared to 2018 due to improved gross profit margins, which largely offset the adverse impact of foreign
currency translation.

Regionally, income from operations in EME increased by approximately $37.1 million in 2019 compared to 2018,
driven primarily by the benefit of higher sales and margin improvement resulting from the impacts of pricing, better factory
productivity and a favorable sales mix. In our North American region, income from operations improved by approximately
$18.5 million. Increased net sales levels and the benefit of favorable pricing impacts and expense control initiatives contributed
to the improvement in the region. In South America, operating losses increased approximately $29.3 million in 2019 compared
to 2018. The losses reflect low levels of industry demand and company production, as well as unfavorable cost impacts of
newer product technology into our Brazilian factories. Income from operations in our APA region decreased approximately
$6.2 million in 2019 compared to 2018, primarily due to lower net sales and production volumes.

Industry Market Conditions

Farm economics remain challenged across the major crop-producing regions, and low commodity prices and

international trade tensions continue to weigh on farmer sentiment, resulting in decreased global equipment demand during
2019. In North America, industry unit retail sales of utility and high horsepower tractors for 2019 decreased slightly compared
to 2018. Industry unit retail sales of combines for 2019 decreased approximately 6% compared to 2018. A difficult growing
season, as well as the uncertainty regarding the outcome of trade negotiations related to agricultural products and delayed
market facilitation aid payments in the U.S., all contributed to weak demand in the large farm sector during 2019. In
Western Europe, industry unit retail sales of tractors for 2019 declined approximately 2% compared to 2018. Industry unit retail
sales of combines for 2019 decreased approximately 18% compared to 2018. Industry demand trended progressively lower
throughout 2019 due to the impact of lower wheat and milk prices as well as higher input costs for dairy producers. During
2019, industry sales declines experienced in Italy, the United Kingdom and Germany were partially offset by industry sales
growth in France and Finland. In South America, industry unit retail sales of tractors for 2019 dropped approximately 16%
compared to 2018. Industry unit retail sales of combines for 2019 decreased approximately 5% compared to 2018. Despite
improved grain production in Brazil and Argentina, industry demand was negatively impacted by interruptions in the
government subsidized finance program in Brazil and weak economic conditions in Argentina.

Results of Operations

Net sales for 2019 were $9,041.4 million compared to $9,352.0 million for 2018, primarily as a result of sales declines

in our South American and APA regions, partially offset by sales growth in our North American and EME regions, on a
constant currency basis. The following table sets forth, for the year ended December 31, 2019, the impact to net sales of
currency translation by geographical segment (in millions, except percentages):

2019

2018

North America .................................................. $ 2,191.8
South America..................................................
802.2
EME .................................................................
APA ..................................................................

5,328.8

718.6

$ 2,180.1

959.0

5,385.1

827.8

$ 9,041.4

$ 9,352.0

Change

Change due to
Currency Translation

11.7
(156.8)
(56.3)
(109.2)
(310.6)

0.5 % $

(16.4)%

(1.0)%

(13.2)%

(3.3)% $

(8.5)
(49.9)
(295.0)
(35.8)
(389.2)

(0.4)%

(5.2)%

(5.5)%

(4.3)%

(4.2)%

Regionally, net sales in North America increased during 2019 compared to 2018, with sales growth driven by a

growth in net sales of low horsepower tractors, combines and parts, largely offset by a reduction in sales of protein production
equipment and utility tractors. In the EME region, net sales, excluding the negative impact of foreign currency translation,
increased during 2019 compared to 2018, primarily due to net sales growth in France, Germany and Italy, partially offset by
declines in the United Kingdom and Eastern Europe. Net sales decreased in South America in 2019 compared to 2018,
primarily due to weaker industry conditions resulting in sales declines in Brazil and other South American markets as well as
the negative impact of foreign currency translation. In the APA region, net sales decreased in 2019 compared to 2018, primarily
due to lower sales in China, Southeast Asia and Africa. We estimate that worldwide average price increases were approximately
1.9% and 1.4% in 2019 and 2018, respectively. Consolidated net sales of tractors and combines, which comprised
approximately 61% of our net sales in 2019, decreased approximately 3.7% in 2019 compared to 2018. Unit sales of tractors
and combines decreased approximately 9.5% during 2019 compared to 2018. The unit sales decrease and the decrease in net
sales can differ due to foreign currency translation, pricing and sales mix changes.

The following table sets forth, for the years ended December 31, 2019 and 2018, the percentage relationship to net

sales of certain items included in our Consolidated Statements of Operations (in millions, except percentages):

2019

2018

% of
Net
Sales(1)

% of
Net
Sales

Gross profit.......................................................................................................... $ 1,984.3
1,040.3

Selling, general and administrative expenses ...................................................
Engineering expenses........................................................................................
Impairment charges...........................................................................................
Amortization of intangibles ..............................................................................
Restructuring expenses .....................................................................................
Bad debt expense ..............................................................................................
Income from operations....................................................................................... $

343.4

176.6

61.1

9.0

5.8

21.9% $ 1,996.7

11.5% 1,069.4

3.8%

2.0%

0.7%

0.1%

355.2

—

64.7

12.0

6.4

21.4%

11.4%

3.8%

—%

0.7%

0.1%

5.3%

348.1

3.9% $

489.0

____________________________________
(1) Rounding may impact summation of amounts.

Gross profit as a percentage of net sales increased during 2019 compared to 2018, primarily due to the benefit of
pricing in excess of material cost increases, partially offset by the cost impact of lower production levels. Production hours
decreased in both North America and South America, while production hours increased in Europe during 2019. Overall,
production hours decreased approximately 2% on a global basis during 2019 compared to 2018. We recorded stock
compensation expense of approximately $1.7 million and $2.3 million during 2019 and 2018, respectively, within cost of goods
sold, as is more fully explained in Note 1 of our Consolidated Financial Statements contained in Item 8, “Financial Statements
and Supplementary Data.”

Selling, general and administrative expenses (“SG&A expenses”) and engineering expenses, as a percentage of net

sales, were relatively flat during 2019 compared to 2018. We recorded stock compensation expense of approximately
$40.0 million and $44.3 million during 2019 and 2018, respectively, within SG&A expenses, as is more fully explained in
Note 1 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data.”

We recorded restructuring expenses of approximately $9.0 million and $12.0 million during 2019 and 2018,
respectively. The restructuring expenses primarily related to severance and related costs associated with the rationalization of
employee headcount at various manufacturing facilities and administrative offices located in Europe, South America, China,
Africa and the United States during 2019, as well as the rationalization of our grain storage and protein production systems
operations initiated in the fourth quarter of 2019. In addition, we recorded a loss of approximately $2.1 million within
"Restructuring expenses" associated with the sale of our 50% interest in our USC, LLC joint venture. See Note 3 of our
Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for additional
information.

During the three months ended December 31, 2019, we recorded non-cash goodwill and other intangible asset
impairment charges of approximately $173.6 million associated with our grain storage and protein production systems
operations in Europe/Middle East, as well as the impairment of long-lived intangible assets of approximately $3.0 million
associated with brand and product rationalization within our grain storage and protein production systems operations in

North America. These impairment charges are more fully described in “Critical Accounting Estimates - Goodwill, Other
Intangible Assets and Long-Lived Assets” and Note 1 to our Consolidated Financial Statements contained in Item 8, “Financial
Statements and Supplementary Data.”

Interest expense, net was $19.9 million for 2019 compared to $53.8 million for 2018. The decline was primarily the

result of debt extinguishment costs incurred in 2018 associated with debt refinancings completed during 2018 that included the
replacement of higher interest-bearing debt with lower interest-bearing debt. During 2018, we repurchased approximately
$300.0 million of our outstanding 57/8% senior notes. The repurchase resulted in a loss on extinguishment of debt of
approximately $24.5 million, including associated fees, offset by approximately $4.7 million of accelerated amortization of a
deferred gain related to a terminated interest rate swap instrument associated with the senior notes. In addition, we repaid our
outstanding term loan under our former revolving credit and term loan facility. We recorded approximately $0.7 million
associated with the write-off of deferred debt issuance costs and a loss of approximately $3.9 million from a terminated interest
rate swap instrument related to the term loan.

Other expense, net was $67.1 million in 2019 compared to $74.9 million in 2018. Losses on sales of receivables,

primarily related to our accounts receivable sales agreements with our finance joint ventures in North America, Europe and
Brazil, were approximately $42.4 million and $36.0 million in 2019 and 2018, respectively. Other expense, net for 2018 also
included higher foreign exchanges losses, primarily associated with the significant devaluation of the Argentine peso.

We recorded an income tax provision of $180.8 million in 2019 compared to $110.9 million in 2018. Our tax provision

and effective tax rate are impacted by the differing tax rates of the various tax jurisdictions in which we operate, permanent
differences for items treated differently for financial accounting and income tax purposes and for losses in jurisdictions where
no income tax benefit is recorded. At December 31, 2019 and 2018, we had gross deferred tax assets of $396.0 million and
$350.2 million, respectively, including $72.0 million and $74.5 million, respectively, related to net operating loss
carryforwards. During 2019, we recognized a one-time income tax gain of approximately $21.8 million associated with the
changing of Swiss federal and cantonal tax rates, as well as recognition of a deferred tax asset associated with the estimated
value of a tax basis step-up of our Swiss subsidiary's assets. During 2019, we also recorded a non-cash adjustment to establish
a valuation allowance against our Brazilian net deferred income tax assets of approximately $53.7 million. At
December 31, 2019, we had total valuation allowances as an offset to our gross deferred tax assets of approximately
$169.1 million. This valuation allowance included allowances primarily against net operating loss carryforwards in Brazil,
China, Hungary, the United Kingdom and the Netherlands, as well as allowances against our net deferred taxes primarily in the
U.S. and Brazil. At December 31, 2018, we had total valuation allowances as an offset to the gross deferred tax assets of
approximately $83.9 million, primarily related to net operating loss carryforwards in Brazil, China, the United Kingdom and
the Netherlands, as well as allowances against our net deferred taxes in the U.S. Realization of the net deferred tax assets as of
December 31, 2019 will depend on generating sufficient taxable income in future periods, net of reversing deferred tax
liabilities. We believe it is more likely than not that the remaining net deferred tax assets will be realized. Refer to Note 6 of
our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further
information.

Equity in net earnings of affiliates, which is primarily comprised of income from our AGCO Finance joint ventures,
was $42.5 million in 2019 compared to $34.3 million in 2018, primarily due to higher net earnings from our AGCO Finance
joint ventures. See “Finance Joint Ventures” for further information regarding our finance joint ventures and their results of
operations and Note 5 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary
Data,” for further information.

2018 Compared to 2017

A comparison of the results of operations for 2018 versus that of 2017 was included in our Annual Report on

Form 10-K for the year ended December 31, 2018.

Quarterly Results

The following table presents unaudited interim operating results. We believe that the following information includes

all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our results of operations for the
periods presented.

2019:
Net sales............................................................................... $
Gross profit..........................................................................
Income (loss) from operations.............................................
Net income (loss).................................................................
Net (income) loss attributable to noncontrolling interests ..
Net income (loss) attributable to AGCO Corporation and

subsidiaries ...................................................................

Net income (loss) per common share attributable to

AGCO Corporation and subsidiaries — diluted ..........

2018:
Net sales............................................................................... $
Gross profit..........................................................................
Income from operations.......................................................
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 — diluted .....................

AGCO Finance Joint Ventures

Three Months Ended

March 31

June 30

September 30 December 31

(in millions, except per share data)

1,995.8

2,422.6

2,109.4

2,513.6

456.7

92.4

65.7
(0.6)

65.1

0.84

563.9

199.6

140.4

0.4

140.8

1.82

450.2

105.9

6.3

1.3

7.6

0.10

513.5
(49.8)
(89.6)
1.3

(88.3)

(1.17)

2,007.5

2,537.6

2,214.7

2,592.2

428.0

50.5

25.0
(0.7)

24.3

0.30

556.3

168.1

90.4

1.0

91.4

1.14

473.7

111.3

70.7

0.4

71.1

0.89

538.7

159.1

97.6

1.1

98.7

1.26

Our AGCO Finance joint ventures provide both retail financing and wholesale financing to our dealers in the

United States, Canada, Europe, Brazil, Argentina and Australia. The joint ventures are owned by AGCO and by a
wholly-owned subsidiary of Rabobank. The majority of the assets of the finance joint ventures consist of finance receivables.
The majority of the liabilities consist of notes payable and accrued interest. Under the various joint venture agreements,
Rabobank or its affiliates provide financing to the finance joint ventures, primarily through lines of credit. We do not guarantee
the debt obligations of the joint ventures. As of December 31, 2019, our capital investment in the finance joint ventures, which
is included in “Investment in affiliates” on our Consolidated Balance Sheets, was approximately $339.0 million compared to
$358.7 million as of December 31, 2018. The total finance portfolio in our finance joint ventures was approximately
$9.6 billion and $8.8 billion as of December 31, 2019 and 2018, respectively. The total finance portfolio as of
December 31, 2019 and 2018 included approximately $7.7 billion and $7.2 billion, respectively, of retail receivables and
$1.9 billion and $1.6 billion, respectively, of wholesale receivables from AGCO dealers. The wholesale receivables either were
sold directly to AGCO Finance without recourse from our operating companies or AGCO Finance provided the financing
directly to the dealers. During 2019 and 2018, we did not make additional investments in our finance joint ventures. During
2019 and 2018, we received dividends of approximately $40.5 million and $29.4 million, respectively, from certain of our
finance joint ventures. Our share in the earnings of the finance joint ventures, included in “Equity in net earnings of affiliates”
within our Consolidated Statements of Operations, was $41.5 million and $34.7 million for the years ended December 31, 2019
and 2018, respectively, with the increase in earnings primarily due to higher income in our European, Brazilian and U.S.
finance joint ventures during 2019 as compared to 2018.

Outlook

Our operations are subject to the cyclical nature of the agricultural industry. Sales of our equipment are affected by,

among other things, changes in net cash farm income, farm land values, weather conditions, the demand for agricultural
commodities, commodity prices and general economic conditions.

Our net sales are expected to increase in 2020 compared to 2019, resulting from relatively flat net sales volumes and

positive pricing impacts. Gross and operating margins are expected to improve from 2019 levels, reflecting the positive impact
of pricing and cost control initiatives. This assumes that the coronavirus outbreak does not significantly impact our business.
See, “Risk Factors.”

Liquidity and Capital Resources

Our financing requirements are subject to variations due to seasonal changes in inventory and receivable levels.

Internally generated funds are supplemented when necessary from external sources, primarily our credit facility and accounts
receivable sales agreement facilities. We believe that the following facilities, together with available cash and internally
generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the
foreseeable future (in millions):

1.002% Senior term loan due 2025(1) ........................................................................................................... $
Senior term loan due 2022(1) ........................................................................................................................
Credit facility, expires 2023 .........................................................................................................................
Senior term loans due between 2021 and 2028(1).........................................................................................
Other long-term debt ....................................................................................................................................

____________________________________
(1) The amounts above are gross of debt issuance costs of an aggregate amount of approximately $2.3 million.

280.2

168.1

—

736.2

12.5

December 31, 2019

Interest on U.S. dollar borrowings under our credit facility is calculated based upon LIBOR. In the event that LIBOR

is no longer published, interest will be calculated based upon a base rate. The credit facility also provides for an expedited
amendment process once a replacement for LIBOR is established.

In December 2018, we entered into a term loan agreement with the European Investment Bank (“EIB”), which
provided us with the ability to borrow up to €250.0 million. The €250.0 million (or approximately $280.2 million as of
December 31, 2019) of funding was received on January 25, 2019 with a maturity date of January 24, 2025. We have the ability
to prepay the term loan before its maturity date. Interest is payable on the term loan at 1.002% per annum, payable
semi-annually in arrears. We had an additional term loan with the EIB in the amount of €200.0 million that was entered into in
December 2014 and had a maturity date of January 15, 2020. We repaid this €200.0 million (or approximately $220.0 million)
term loan in December 2019.

In October 2018, we entered into a term loan agreement with Rabobank in the amount of €150.0 million
(or approximately $168.1 million as of December 31, 2019). We have the ability to prepay the term loan before its maturity
date on October 28, 2022. Interest is payable on the term loan quarterly in arrears at an annual rate, equal to the EURIBOR plus
a margin ranging from 0.875% to 1.875% based on our credit rating.

In October 2018, we entered into a multi-currency revolving credit facility of $800.0 million. The maturity date of the

credit facility is October 17, 2023. Interest accrues on amounts outstanding under the credit facility, at our option, at either
(1) LIBOR plus a margin ranging from 0.875% to 1.875% based on our credit rating, or (2) the base rate, which is equal to the
higher of (i) the administrative agent’s base lending rate for the applicable currency, (ii) the federal funds rate plus 0.5%, and
(iii) one-month LIBOR for loans denominated in U.S. dollars plus 1.0%, plus a margin ranging from 0.0% to 0.875% based on
our credit rating.

In October 2016, we borrowed an aggregate amount of €375.0 million through a group of seven related term loan
agreements. These agreements had maturities ranging from October 2019 to October 2026. In October 2019, we repaid an
aggregate amount of €56.0 million (or approximately $61.1 million) of these term loans. In August 2018, we borrowed an
additional aggregate amount of indebtedness of €338.0 million through a group of another seven related term loan agreements.
Proceeds from the borrowings were used to repay borrowings under our former revolving credit facility. The provisions of the
term loan agreements are identical in nature with the exception of interest rate terms and maturities. In aggregate, as of

December 31, 2019, we have indebtedness of approximately €657.0 million (or approximately $736.2 million) under a total
group of twelve term loan agreements with remaining maturities ranging from August 2021 to August 2028.

We are in compliance with the financial covenants contained in these facilities and expect to continue to maintain such

compliance. Should we ever encounter difficulties, our historical relationship with our lenders has been strong and we
anticipate their continued long-term support of our business. Refer to Note 7 to the Consolidated Financial Statements
contained in Item 8, “Financial Statements and Supplementary Data,” for additional information regarding our current
facilities, including the financial covenants contained in each debt instrument.

Our accounts receivable sales agreements in North America, Europe and Brazil permit the sale, on an ongoing basis,

of a majority of our receivables to our U.S., Canadian, European and Brazilian finance joint ventures. The sales of all
receivables are without recourse to us. We do not service the receivables after the sales occur, and we do not maintain any
direct retained interest in the receivables. These agreements are accounted for as off-balance sheet transactions and have the
effect of reducing accounts receivable and short-term liabilities by the same amount. As of December 31, 2019 and 2018, the
cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements
was approximately $1.6 billion and $1.4 billion, respectively.

Our finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to our dealers.

The receivables associated with these arrangements also are without recourse to us. As of December 31, 2019 and 2018, these
finance joint ventures had approximately $104.3 million and $82.5 million, respectively, of outstanding accounts receivable
associated with these arrangements. These arrangements are accounted for as off-balance sheet transactions. In addition, we sell
certain trade receivables under factoring arrangements to other financial institutions around the world. These arrangements also
are accounted for as off-balance sheet transactions.

Our debt to capitalization ratio, which is total indebtedness divided by the sum of total indebtedness and stockholders’

equity, was 30.4% at December 31, 2019 compared to 32.8% at December 31, 2018.

Cash Flows

Cash flows provided by operating activities were $695.9 million during 2019 compared to $595.9 million during 2018

and $577.6 million during 2017. The increase during 2019 was primarily due to a source of cash in operating assets and
liabilities in 2019 compared to a use of cash in 2018. In addition, we received an increased amount of dividends from our
finance joint ventures in 2019 as compared to 2018.

Our working capital requirements are seasonal, with investments in working capital typically building in the first half
of the year and then reducing in the second half of the year. We had $844.6 million in working capital at December 31, 2019, as
compared with $770.7 million at December 31, 2018. Accounts receivable and inventories, combined, at December 31, 2019
were $90.2 million higher than at December 31, 2018. Inventories as of December 31, 2019 included stock related to the
transition of production to products meeting new emissions standards in Europe. Weaker market conditions in many key
markets contributed to lower net sales and resulting higher finished goods inventories as compared to 2018.

Share Repurchase Program

During 2019 and 2018, we repurchased 1,794,256 and 3,120,184 shares of our common stock, respectively, for

approximately $130.0 million and $184.3 million, respectively, either through Accelerated Share Repurchase (“ASR”)
agreements with financial institutions or through open market transactions. All shares received were retired upon receipt, and
the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and
"Retained Earnings" within our Consolidated Balance Sheets.

In February 2020, we entered into an ASR agreement with a financial institution to repurchase an aggregate of

$25.0 million of shares of our common stock. We received approximately 297,000 shares to date in this transaction. Upon
settlement of the ASR, we may be entitled to receive additional shares of common stock or, under certain circumstances, be
required to remit a settlement amount. We expect that the additional shares will be received by us upon final settlement of our
current ASR agreement, which expires during the second quarter of 2020.

Contractual Obligations

The future payments required under our significant contractual obligations, excluding foreign currency option and

forward contracts, as of December 31, 2019 are as follows (in millions):

Total

Payments Due By Period
2021 to
2022

2023 to
2024

2020

2025 and
Beyond

Indebtedness(1).............................................................. $
Interest payments related to indebtedness(2) ................
Capital lease obligations ..............................................
Operating lease obligations..........................................
Unconditional purchase obligations.............................
Other short-term and long-term obligations(3) .............
Total contractual cash obligations................................ $

1,270.9

76.8

468.3

280.8

57.4
18.9
223.0
127.7
296.0
1,993.9

13.9
4.8
48.3
102.1
91.7
337.6

24.0
3.9
72.3
25.4
105.8
699.7

13.8
1.5
40.8
0.2
50.9
388.0

445.0

5.7
8.7
61.6
—
47.6
568.6

Amount of Commitment Expiration Per Period
2021 to
2022

2023 to
2024

2020

2025 and
Beyond

Total

Standby letters of credit and similar instruments......... $
Guarantees....................................................................
Total commercial commitments and letters of credit... $

14.8
66.6
81.4

14.8
44.7
59.5

— $

13.0
13.0

— $
8.4
8.4

—
0.5
0.5

_______________________________________
(1)
(2) Estimated interest payments are calculated assuming current interest rates over minimum maturity periods specified in debt agreements. Debt may be

Indebtedness amounts reflect the principal amount of our senior term loan, senior notes and credit facility.

repaid sooner or later than such minimum maturity periods.

(3) Other short-term and long-term obligations include estimates of future minimum contribution requirements under our U.S. and non-U.S. defined benefit

pension and postretirement plans. These estimates are based on current legislation in the countries we operate within and are subject to change. Other
short-term and long-term obligations also include income tax liabilities related to uncertain income tax positions connected with ongoing income tax
audits in various jurisdictions.

Commitments and Off-Balance Sheet Arrangements

Guarantees

We maintain a remarketing agreement with our finance joint venture in the United States, whereby we are obligated to
repurchase up to $6.0 million of repossessed equipment each calendar year. We believe any losses that might be incurred on the
resale of this equipment will not materially impact our financial position or results of operations, due to the fact that the
repurchase obligation would be equivalent to the fair value of the underlying equipment.

At December 31, 2019, we guaranteed indebtedness owed to third parties of approximately $47.6 million, primarily

related to dealer and end-user financing of equipment. Such guarantees generally obligate us to repay outstanding finance
obligations owed to financial institutions if dealers or end users default on such loans through 2025. Losses under such
guarantees historically have been insignificant. In addition, we generally would expect to be able to recover a significant
portion of the amounts paid under such guarantees from the sale of the underlying financed farm equipment, as the fair value of
such equipment is expected to offset a substantial portion of the amounts paid. We also have obligations to guarantee
indebtedness owed to certain of our finance joint ventures if dealers or end users default on loans. Losses under such guarantees
historically have been insignificant and the guarantees are not material. We believe the credit risk associated with all of these
guarantees is not material to our financial position or results of operations.

In addition, at December 31, 2019, we had accrued approximately $18.9 million of outstanding guarantees of
minimum residual values that may be owed to our finance joint ventures in the United States and Canada due upon expiration
of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future
payments under the guarantee is approximately $26.7 million.

Other

At December 31, 2019, we had outstanding designated and non-designated foreign exchange contracts with a gross

notional amount of approximately $3,133.0 million. The outstanding contracts as of December 31, 2019 range in maturity
through December 2020.

As discussed in “Liquidity and Capital Resources,” we sell a majority of our wholesale accounts receivable in North

America, Europe and Brazil to our U.S., Canadian, European and Brazilian finance joint ventures. We also sell certain accounts
receivable under factoring arrangements to financial institutions around the world. We have determined that these facilities
should be accounted for as off-balance sheet transactions.

Contingencies

We are party to various claims and lawsuits arising in the normal course of business. We closely monitor these claims

and lawsuits and frequently consult with our legal counsel to determine whether they may, when resolved, have a material
adverse effect on our financial position or results of operations and accrue and/or disclose loss contingencies as appropriate.
See Note 12 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,”
and Item 3, “Legal Proceedings,” for further information.

Related Parties

In the ordinary course of business, the Company engages in transactions with related parties. See Note 14 of our
Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for information
regarding related party transactions and their impact to our consolidated results of operations and financial position.

Foreign Currency Risk Management

We have significant manufacturing locations in the United States, France, Germany, Finland, Italy, China and Brazil,

and we purchase a portion of our tractors, combines and components from third-party foreign suppliers, primarily in various
European countries and in Japan. We also sell products in approximately 140 countries throughout the world. The majority of
our net sales outside the United States are denominated in the currency of the customer location, with the exception of sales in
Middle East, Africa, Asia and parts of South America, where net sales are primarily denominated in British pounds, Euros, or
the United States dollar.

We manage our transactional foreign currency exposure by hedging foreign currency cash flow forecasts and
commitments arising from the anticipated settlement of receivables and payables and from future purchases and sales. Where
naturally offsetting currency positions do not occur, we hedge certain, but not all, of our exposures through the use of foreign
currency contracts. Our translation exposure resulting from translating the financial statements of foreign subsidiaries into
United States dollars may be partially hedged from time to time. When practical, this translation impact is reduced by financing
local operations with local borrowings. Our hedging policy prohibits use of foreign currency contracts for speculative trading
purposes.

The total notional value of our foreign currency instruments was $3,133.0 million and $1,462.8 million as of

December 31, 2019 and 2018, respectively, inclusive of both those instruments that are designated and qualified for hedge
accounting and non-designated derivative instruments. We enter into cash flow hedges to minimize the variability in cash flows
of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, and we enter into
foreign currency contracts to economically hedge receivables and payables on our balance sheets that are denominated in
foreign currencies other than the functional currency. In addition, we use derivative and non-derivative instruments to hedge a
portion of our net investment in foreign operations against adverse movements in exchange rates. See Note 11 of our
Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” for further
information about our hedging transactions and derivative instruments.

Assuming a 10% change relative to the currency of the hedge contracts, the fair value of the foreign currency
instruments could be negatively impacted by approximately $22.3 million as of December 31, 2019. Due to the fact that these
instruments are primarily entered into for hedging purposes, the gains or losses on the contracts would largely be offset by
losses and gains on the underlying firm commitment or forecasted transaction.

Interest Rate Risk

Our interest expense is, in part, sensitive to the general level of interest rates. We manage our exposure to interest rate

risk through our mix of floating rate and fixed rate debt. From time to time, we enter into interest rate swap agreements to
manage our exposure to interest rate fluctuations. See Notes 7 and 11 of our Consolidated Financial Statements contained in
Item 8, “Financial Statements and Supplementary Data,” for additional information about our interest rate swap agreements.

Based on our floating rate debt and our accounts receivable sales facilities outstanding at December 31, 2019, a

10% increase in interest rates, would have increased, collectively, “Interest expense, net” and “Other expense, net” for the year
ended December 31, 2019 by approximately $5.6 million.

Recent Accounting Pronouncements

See Note 1 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary
Data,” for information regarding recent accounting pronouncements and their impact to our consolidated results of operations
and financial position.

Critical Accounting Estimates

We prepare our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles.

In the preparation of these financial statements, we make judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. The significant accounting policies followed in the
preparation of the financial statements are detailed in Note 1 of our Consolidated Financial Statements contained in
Item 8, “Financial Statements and Supplementary Data.” We believe that our application of the policies discussed below
involves significant levels of judgment, estimates and complexity.

Due to the levels of judgment, complexity and period of time over which many of these items are resolved, actual

results could differ from those estimated at the time of preparation of the financial statements. Adjustments to these estimates
would impact our financial position and future results of operations.

Discount and Sales Incentive Allowances

We provide various volume bonus and sales incentive programs with respect to our products. These sales incentive
programs include reductions in invoice prices, reductions in retail financing rates, dealer commissions and dealer incentive
allowances. In most cases, incentive programs are established and communicated to our dealers on a quarterly basis.
The incentives are paid either at the time of the cash settlement of the receivable (which is generally at the time of retail sale),
at the time of retail financing, at the time of warranty registration, or at a subsequent time based on dealer purchase volumes.
The incentive programs are product line specific and generally do not vary by dealer. The cost of sales incentives associated
with dealer commissions and dealer incentive allowances is estimated based upon the terms of the programs and historical
experience, is based on a percentage of the sales price, and estimates for sales incentives are made and recorded at the time of
sale for expected incentive programs using the expected value method. These estimates are reassessed each reporting period
and are revised in the event of subsequent modifications to incentive programs, as they are communicated to dealers.
The related provisions and accruals are made on a product or product-line basis and are monitored for adequacy and revised at
least quarterly in the event of subsequent modifications to the programs. Interest rate subsidy payments, which are a reduction
in retail financing rates, are recorded in the same manner as dealer commissions and dealer incentive allowances. Volume
discounts are estimated and recognized based on historical experience, and related reserves are monitored and adjusted based
on actual dealer purchase volumes and the dealers’ progress towards achieving specified cumulative target levels. Estimates of
these incentives are based on the terms of the programs and historical experience. All incentive programs are recorded and
presented as a reduction of revenue, due to the fact that we do not receive a distinct good or service in exchange for the
consideration provided. In the United States and Canada, reserves for incentive programs related to accounts receivable not
sold to our U.S. and Canadian finance joint ventures are recorded as “accounts receivable allowances” within our Consolidated
Balance Sheets due to the fact that the incentives are paid through a reduction of future cash settlement of the receivable.
Globally, reserves for incentive programs that will be paid in cash or credit memos, as is the case with most of our volume
discount programs, as well as sales incentives associated with accounts receivable sold to our finance joint ventures, are
recorded within “Accrued expenses” within our Consolidated Balance Sheets.

At December 31, 2019, we had recorded an allowance for discounts and sales incentives of approximately
$606.1 million that will be paid either through a reduction of future cash settlements of receivables and through credit memos
30

to our dealers or through reductions in retail financing rates paid to our finance joint ventures. If we were to allow an additional
1% of sales incentives and discounts at the time of retail sale for those sales subject to such discount programs, our reserve
would increase by approximately $21.0 million as of December 31, 2019. Conversely, if we were to decrease our sales
incentives and discounts by 1% at the time of retail sale, our reserve would decrease by approximately $21.0 million as of
December 31, 2019.

Deferred Income Taxes and Uncertain Income Tax Positions

We recorded an income tax provision of $180.8 million in 2019 compared to $110.9 million in 2018 and
$133.6 million in 2017. Our tax provision and effective tax rate are impacted by the differing tax rates of the various tax
jurisdictions in which we operate, permanent differences for items treated differently for financial accounting and income tax
purposes, and for losses in jurisdictions where no income tax benefit is recorded.

During the third quarter of 2019, we recorded a non-cash adjustment to establish a valuation allowance against our

Brazilian net deferred income tax assets of approximately $53.7 million. In addition, we maintain a valuation allowance to fully
reserve against our net deferred tax assets in the United States and certain other foreign jurisdictions. A valuation allowance is
established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. We assessed
the likelihood that our deferred tax assets would be recovered from estimated future taxable income and available tax planning
strategies and determined that the adjustment to the valuation allowance was appropriate. In making this assessment, all
available evidence was considered including the current economic climate, as well as reasonable tax planning strategies.
We
future years.

believe it is more likely than not that we will realize our remaining net deferred tax assets, net of the valuation allowance, in

Swiss tax reform was enacted during 2019 and eliminates certain preferential tax items as well as implements new tax

rates at both the federal and cantonal levels. During the three months ended December 31, 2019, the Company recognized a
one-time income tax gain of approximately $21.8 million associated with the changing of Swiss federal and cantonal tax rates
as well as recognition of a deferred tax asset associated with the estimated value of a tax basis step-up of our Swiss subsidiary's
assets.

On December 22, 2017, the Tax Cuts and Jobs Act (“the 2017 Tax Act”) was enacted in the United States. During the
three months ended December 31, 2017, we recorded a tax provision of approximately $42.0 million in accordance with Staff
Accounting Bulletin No. 118, which provided SEC Staff guidance for the application of Accounting Standards Codification
(“ASC”) 740 “Income Taxes,” in the reporting period in which the 2017 Tax Act was enacted. The $42.0 million tax provision
included a provisional income tax charge related to a one-time transition tax associated with the mandatory deemed repatriation
of unremitted foreign earnings. The tax provision also included a provisional income tax charge associated with the income tax
consequences related to the expected future repatriation of certain underlying foreign earnings, as historically, we have
considered them to be permanently reinvested. The remaining balance of the tax provision primarily related to the
remeasurement of certain net deferred tax assets using the lower enacted U.S. Corporate tax rate (from 35% to 21%), as well as
other miscellaneous related impacts. During the three months ended December 31, 2018, we finalized our calculations related
to the 2017 Tax Act and recorded an income tax benefit of approximately $8.4 million.

At December 31, 2019 and 2018, we had gross deferred tax assets of $396.0 million and $350.2 million, respectively,
including $72.0 million and $74.5 million, respectively, related to net operating loss carryforwards. At December 31, 2019 and
2018, we had total valuation allowances as an offset to our gross deferred tax assets of $169.1 million and $83.9 million,
respectively, which included allowances primarily against net operating loss carryforwards in Brazil, China, Hungary, the
United Kingdom and the Netherlands, as well as allowances against our net deferred taxes primarily in the U.S. and Brazil, as
previously discussed. Realization of the remaining deferred tax assets as of December 31, 2019 will depend on generating
sufficient taxable income in future periods, net of reversing deferred tax liabilities. We believe it is more likely than not that the
remaining net deferred tax assets will be realized.

We recognize income tax benefits from uncertain tax positions only when there is a more than 50% likelihood that the
tax positions will be sustained upon examination by the taxing authorities based on the technical merits of the positions. As of
December 31, 2019 and 2018, we had approximately $210.7 million and $166.1 million, respectively, of gross unrecognized
tax benefits, all of which would impact our effective tax rate if recognized. As of December 31, 2019 and 2018, we had
approximately $51.0 million and $58.5 million, respectively, of current accrued taxes related to uncertain income tax positions
connected with ongoing tax audits in various jurisdictions that we expect to settle or pay in the next 12 months. We recognize
interest and penalties related to uncertain income tax positions in income tax expense. As of December 31, 2019 and 2018,
had accrued interest and penalties related to unrecognized tax benefits of approximately $28.4 million and $27.2 million,
we
respectively. See Note 6 of our Consolidated Financial Statements for further discussion of our uncertain income tax positions.
31

Pensions

We sponsor defined benefit pension plans covering certain employees, principally in the United Kingdom, the

United States, Germany, Switzerland, Finland, France, Norway and Argentina. Our primary plans cover certain employees in
the United States and the United Kingdom.

In the United States, we sponsor a funded, qualified defined benefit pension plan for our salaried employees, as well as

a separate funded qualified defined benefit pension plan for our hourly employees. Both plans are closed to new entrants and
frozen, and we fund at least the minimum contributions required under the Employee Retirement Income Security Act of 1974
and the Internal Revenue Code to both plans. In addition, we maintain an unfunded, nonqualified defined benefit pension plan
for certain senior executives, which is our Executive Nonqualified Pension Plan (“ENPP”). The ENPP is also closed to new
entrants.

In the United Kingdom, we sponsor a funded defined benefit pension plan that provides an annuity benefit based on
participants’ final average earnings and service. Participation in this plan is limited to certain older, longer service employees
and existing retirees. This plan is closed to new participants.

See Note 8 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary

Data,” for additional information regarding costs and assumptions for employee retirement benefits.

Nature of Estimates Required. The measurement date for all of our benefit plans is December 31. The measurement of
our pension obligations, costs and liabilities is dependent on a variety of assumptions provided by management and used by our
actuaries. These assumptions include estimates of the present value of projected future pension payments to all plan
participants, taking into consideration the likelihood of potential future events such as salary increases and demographic
experience. These assumptions may have an effect on the amount and timing of future contributions.

Assumptions and Approach Used. The assumptions used in developing the required estimates include, but are not

limited to, the following key factors:

• Discount rates
• Salary growth
• Retirement rates and ages

• Inflation
• Expected return on plan assets
• Mortality rates

For the years ended December 31, 2019, 2018 and 2017, we used a globally consistent methodology to set the

discount rate in the countries where our largest benefit obligations exist. In the United States, the United Kingdom and the
Euro Zone, we constructed a hypothetical bond portfolio of high-quality corporate bonds and then applied the cash flows of our
benefit plans to those bond yields to derive a discount rate. The bond portfolio and plan-specific cash flows vary by country,
but the methodology in which the portfolio is constructed is consistent. In the United States, the bond portfolio is large enough
to result in taking a “settlement approach” to derive the discount rate, in which high-quality corporate bonds are assumed to be
purchased and the resulting coupon payments and maturities are used to satisfy our U.S. pension plans’ projected benefit
payments. In the United Kingdom and the Euro Zone, the discount rate is derived using a “yield curve approach,” in which an
individual spot rate, or zero coupon bond yield, for each future annual period is developed to discount each future benefit
payment and, thereby, determine the present value of all future payments. The Company uses a spot yield curve to determine
the discount rate applicable in the United Kingdom to measure the U.K. pension plan’s service cost and interest cost. Under the
settlement and yield curve approaches, the discount rate is set to equal the single discount rate that produces the same present
value of all future payments.

The other key assumptions and methods were set as follows:

• Our inflation assumption is based on an evaluation of external market indicators.

• The salary growth assumptions reflect our long-term actual experience, the near-term outlook and assumed inflation.

• The expected return on plan asset assumptions reflects asset allocations, investment strategy, historical experience and

the views of investment managers, and reflects a projection of the expected arithmetic returns over ten years.

• Determination of retirement rates and ages as well as termination rates, based on actual plan experience, actuarial

standards of practice and the manner in which our defined benefit plans are being administered.

• The mortality rates for the U.K. defined benefit pension plan was updated in 2019 to reflect the latest expected

improvements in the life expectancy of the plan participants. The mortality rates for the U.S. defined benefit pension
plans were updated in 2019 to reflect the Society of Actuaries’ most recent findings on the topic of mortality.

• The fair value of assets used to determine the expected return on assets does not reflect any delayed recognition of

asset gains and losses.

The effects of actual results differing from our assumptions are accumulated and amortized over future periods and,

therefore, generally affect our recognized expense in such periods.

Our U.S. and U.K. defined benefit pension plans, including our ENPP, comprised approximately 86% of our
consolidated projected benefit obligation as of December 31, 2019. If the discount rate used to determine the 2019 projected
benefit obligation for our U.S. qualified defined benefit pension plans and our ENPP was decreased by 25 basis points, our
projected benefit obligation would have increased by approximately $4.8 million at December 31, 2019, and our 2020 pension
expense would increase by approximately $0.5 million. If the discount rate used to determine the 2019 projected benefit
obligation for our U.S. qualified defined benefit pension plans and our ENPP was increased by 25 basis points, our projected
benefit obligation would have decreased by approximately $4.5 million at December 31, 2019, and our 2020 pension expense
would decrease by approximately $0.5 million. If the discount rate used to determine the projected benefit obligation for our
U.K. defined benefit pension plan was decreased by 25 basis points, our projected benefit obligation would have increased by
approximately $25.3 million at December 31, 2019, and our 2020 pension expense would increase by approximately
$0.2 million. If the discount rate used to determine the projected benefit obligation for our U.K. defined benefit pension plan
was increased by 25 basis points, our projected benefit obligation would have decreased by approximately $23.1 million at
December 31, 2019, and our 2020 pension expense would decrease by approximately $0.3 million. In addition, if the expected
long-term rate of return on plan assets related to our U.K. defined benefit pension plan was increased or decreased by 25 basis
points, our 2020 pension expense would decrease or increase by approximately $1.6 million each, respectively. The impact to
our U.S. defined benefit pension plans for a 25-basis-point change in our expected long-term rate of return would decrease or
increase our 2020 pension expense by approximately $0.1 million, respectively.

unrecognized net actuarial losses will be impacted in future periods by actual asset returns, discount rate changes, currency

Unrecognized actuarial net losses related to our defined benefit pension plans and ENPP were $362.2 million as of
December 31, 2019 compared to $356.7 million as of December 31, 2018. The increase in unrecognized net actuarial losses
between years primarily resulted from lower discount rates at December 31, 2019 compared to December 31, 2018.
The
exchange rate fluctuations, actual demographic experience and certain other factors. For some of our defined benefit pension
plans, these losses, to the extent they exceed 10% of the greater of the plan’s liabilities or the fair value of assets
(“the gain/loss corridor”), will be amortized on a straight-line basis over the periods discussed as follows. For our U.S. salaried,
U.S. hourly and U.K. defined benefit pension plans, the population covered is predominantly inactive participants, and losses
related to those plans, to the extent they exceed the gain/loss corridor, will be amortized over the average remaining lives of
those participants while covered by the respective plan. For our ENPP, the population is predominantly active participants, and
losses related to the plan will be amortized over the average future working lifetime of the active participants expected to
receive benefits. As of December 31, 2019, the average amortization periods were as follows:

Average amortization period of losses related to defined benefit pension plans........

7 years

15 years

19 years

ENPP

U.S. Plans

U.K. Plan

Unrecognized prior service cost related to our defined benefit pension plans was $22.5 million as of
December 31, 2019 compared to $19.5 million as of December 31, 2018. The increase in the unrecognized prior service cost
between years is due primarily to a plan amendment related to our ENPP.

As of December 31, 2019, our unfunded or underfunded obligations related to our defined benefit pension plans and

ENPP were approximately $206.3 million, primarily related to our defined benefit pension plans in Europe and the
United States. In 2019, we contributed approximately $30.6 million towards those obligations, and we expect to fund
approximately $33.6 million in 2020. Future funding is dependent upon compliance with local laws and regulations and
changes to those laws and regulations in the future, as well as the generation of operating cash flows in the future. We currently
have an agreement in place with the trustees of the U.K. defined benefit plan that obligates us to fund approximately
£15.3 million per year (or approximately $20.2 million) towards that obligation through December 2021. The funding
arrangement is based upon the current funded status and could change in the future as discount rates, local laws and
regulations, and other factors change.

See Note 8 of our Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary

Data,” for more information regarding the investment strategy and concentration of risk.

Goodwill, Other Intangible Assets and Long-Lived Assets

We test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate that
fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or one level below an
operating segment, for example, a component. We combine and aggregate two or more components of an operating segment as
a single reporting unit if the components have similar economic characteristics. Our reportable segments are not our reporting
units.

Goodwill is evaluated for impairment annually as of October 1 using a qualitative assessment or a quantitative
one-step assessment. If we elect to perform a qualitative assessment and determine the fair value of our reporting units more
likely than not exceeds their carrying value of net assets, no further evaluation is necessary. For reporting units where we
perform a one-step quantitative assessment, we compare the fair value of each reporting unit to its respective carrying value of
net assets, including goodwill. If the fair value of the reporting unit exceeds its carrying value of net assets, the goodwill is not
considered impaired. If the carrying value of net assets is higher than the fair value of the reporting unit, the impairment charge
is the amount by which the carrying value exceeds the reporting unit’s fair value.

We utilize a combination of valuation techniques, including a discounted cash flow approach and a market multiple

approach, when making quantitative goodwill assessments.

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The evaluation for
recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group. If we
determine that the carrying amount of an asset or asset group is not recoverable based on the expected undiscounted future cash
flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated
fair value of the long-lived assets. Estimates of future cash flows are based on many factors, including current operating results,
expected market trends and competitive influences. We also evaluate the amortization periods assigned to our intangible assets
to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by
sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

We make various assumptions, including assumptions regarding future cash flows, market multiples, growth rates and
discount rates, in our assessments of the impairment of goodwill, other indefinite-lived intangible assets and long-lived assets.
The assumptions about future cash flows and growth rates are based on the current and long-term business plans of the
reporting unit or related to the long-lived assets. Discount rate assumptions are based on an assessment of the risk inherent in
the future cash flows of the reporting unit or long-lived assets. These assumptions require significant judgments on our part,
and the conclusions that we reach could vary significantly based upon these judgments.

Our goodwill impairment analysis conducted as of October 1, 2019 indicated that the carrying value of the net assets

of our grain storage and protein production systems business in Europe/Middle East was in excess of the fair value of the
reporting unit, and therefore, we recorded a non-cash impairment charge of approximately $173.6 million within “Impairment
charges” in our Consolidated Statements of Operations. In response to weakening market conditions and resulting operating
results, new management was put in place over the grain storage and protein productions systems business, tasked with
conducting a full strategic review of the business, including that of the Europe/Middle East reporting unit. That full strategic
review was completed in the fourth quarter of 2019, along with revised forecasts to include updated market conditions and
strategic operating decisions. This impairment charge was a substantial portion of the reporting unit's goodwill balance as of
October 1, 2019.

During the three months ended December 31, 2019, we also recorded a non-cash impairment charge of approximately

$3.0 million within “Impairment charges” in our Consolidated Statements of Operations. The impairment charge related to
certain long-lived intangible assets associated with our grain storage and protein production systems operations within
North America due to the discontinuation of a certain brand name and related products and customers.

Finally, our goodwill impairment analysis conducted as of October 1, 2019 also indicated that the fair value in excess

of the carrying value of one of our smaller reporting units was less than 10%, due to deteriorating market conditions for the
products it sells. If market conditions and our overall results do not improve, we may incur an impairment charge related to this
reporting unit in the future under the one-step process described above. The goodwill associated with this reporting unit as of
December 31, 2019 was approximately $20.0 million.

The results of our goodwill and long-lived assets impairment analyses conducted as of October 1, 2018 and 2017

indicated that no reduction in the carrying amount of goodwill and long-lived assets was required.

Numerous facts and circumstances are considered when evaluating the carrying amount of our goodwill. The fair
value of a reporting unit is impacted by the reporting unit’s expected financial performance, which is dependent upon the
agricultural industry and other factors that could adversely affect the agricultural industry, including but not limited to, declines
in the general economy, increases in farm input costs, weather conditions, lower commodity prices and changes in the
availability of credit. The estimated fair value of the individual reporting units is assessed for reasonableness by reviewing a
variety of indicators evaluated over a reasonable period of time.

As of December 31, 2019, we had approximately $1,298.3 million of goodwill, after the goodwill impairment charge

we recorded during the three months ended December 31, 2019. While our annual impairment testing in 2019 supported the
carrying amount of this goodwill, we may be required to re-evaluate the carrying amount in future periods, thus utilizing
different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an
impairment has occurred.

Recoverable Indirect Taxes

Our Brazilian operations incur value added taxes (“VAT”) on certain purchases of raw materials, components and

services. These taxes are accumulated as tax credits and create assets that are reduced by the VAT collected from our sales in
the Brazilian market. We regularly assesses the recoverability of these tax credits, and establishes reserves when necessary
against them, through analyses that include, amongst others, the history of realization, the transfer of tax credits to third parties
as authorized by the government, anticipated changes in the supply chain and the future expectation of tax debits from our
ongoing operations. We believe that these tax credits, net of established reserves are realizable. Our assessment of realization of
these tax assets involves significant judgments on our part, and the conclusions that we reach could vary significantly based
upon these judgments. We recorded approximately $142.3 million and $156.0 million, respectively, of VAT tax credits, net of
reserves, as of December 31, 2019 and 2018.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

The Quantitative and Qualitative Disclosures about Market Risk information required by this Item set forth under the

captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Foreign Currency Risk
Management” and “Interest Rate Risk” under Item 7 of this Form 10-K are incorporated herein by reference.

Item 8.

Financial Statements and Supplementary Data

The following Consolidated Financial Statements of AGCO and its subsidiaries for each of the years in the three-year

period ended December 31, 2019 are included in this Item:

Report of Independent Registered Public Accounting Firm ............................................................................................

Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017..................................

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017..

Consolidated Balance Sheets as of December 31, 2019 and 2018...................................................................................

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017..................

Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 ................................

Notes to Consolidated Financial Statements....................................................................................................................

The information under the heading “Quarterly Results” of Item 7 of this Form 10-K is incorporated herein by

reference.

Page

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
AGCO Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of AGCO Corporation and subsidiaries

(the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive
income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and
the related notes and financial statement schedule II — Valuation and Qualifying Accounts (collectively, the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission, and our report dated February 28, 2020 expressed an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.

Changes in Accounting Principles

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting
for revenue recognition in 2018 due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with
Customers.

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting

for leases in 2019 due to the adoption of Accounting Standards Codification 842, Leases.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that
our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated

financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the reserve and allowance for volume discounts and sales incentive programs in certain geographic
regions

As discussed in Note 1 to the consolidated financial statements, the Company provides various volume discount
and sales incentive programs with respect to its products. Sales incentive programs include reductions in invoice prices,
reduction in retail financial rates, dealer commissions and dealer incentive allowances. Volume discounts and sales
incentives are recorded at the time of sale as a reduction of revenue using the expected value method. As of December
31, 2019, the Company had accrued volume discounts and sales incentives of approximately $580.4 million and an
allowance for sales incentive discounts of approximately $25.7 million.

We identified the assessment of the reserve and allowance for volume discounts and sales incentive programs in

certain geographic regions as a critical audit matter. Auditor judgment was required to evaluate certain assumptions
which had a higher degree of measurement uncertainty. Key assumptions included estimated incentive rates, which were
the estimated rates at which programs were applied to eligible products, and estimated achievement by dealers of
specified cumulative target levels.

The primary procedures we performed to address this critical audit matter included the following. We tested

certain internal controls over the Company’s reserve and allowance for volume discounts and sales incentive process,
including controls related to the development of the key assumptions. For certain volume discounts and sales incentive
programs, we compared the program details to dealer communications and the key assumptions to historical results for
similar programs. We assessed the Company’s historical ability to estimate key assumptions by comparing the prior year
estimated amounts to actual discounts and sales incentives realized by the customers. We evaluated the Company’s key
assumptions by comparing them to actual results, including results of transactions occurring after year-end.

Assessment of gross unrecognized income tax benefits in certain jurisdictions

As discussed in Note 6 to the consolidated financial statements, the Company has recorded a liability for gross

unrecognized income tax benefits of approximately $210.7 million as of December 31, 2019. The Company recognizes
income tax benefits from uncertain tax positions only when there is a more than 50% likelihood that the tax positions
will be sustained upon examination by the taxing authorities based on the technical merits of the positions.

We identified the assessment of gross unrecognized income tax benefits in certain jurisdictions as a critical audit
matter. Complex auditor judgment and specialized skills were required in evaluating the Company’s interpretation and
application of tax law and the estimate of the amount of tax benefits expected to be realized.

The primary procedures we performed to address this critical audit matter included the following. We tested
certain internal controls over the Company’s gross unrecognized income tax benefit process. This included controls
related to the Company’s consideration of information that could affect the recognition or measurement of income tax
benefits from uncertain tax positions and the interpretation and application of tax laws. We involved tax professionals
with specialized skills and knowledge, who assisted in:

•

inspecting correspondence and assessments from the taxing authorities;

evaluating the Company’s interpretation and application of tax laws; and

performing an independent assessment of the Company’s tax positions and comparing the results to the Company’s
assessment.

Assessment of goodwill impairment for the grain storage and protein production systems Europe/Middle East reporting
unit

As discussed in Note 1 to the consolidated financial statements, the Company evaluates goodwill for impairment
as of October 1 and when events or circumstances indicate that fair value of a reporting unit may be below its carrying
value. The Company performs its goodwill impairment analysis using either a qualitative or a quantitative assessment.
Based on the Company’s quantitative analysis of its grain storage and protein production systems Europe/Middle East
reporting unit, the Company determined that the carrying value of the reporting unit exceeded its fair value. As a result,
the Company recorded the excess as a goodwill impairment charge of approximately $173.6 million.

We identified the assessment of goodwill impairment for the grain storage and protein production systems
Europe/Middle East reporting unit as a critical audit matter because a high degree of subjective auditor judgment was
required to evaluate the fair value of the reporting unit. The fair value estimation methodology used the following key

assumptions for which there was limited observable market information: future cash flows, market multiples, revenue
growth rates and discount rate. The determined fair value, which directly impacted the goodwill impairment charge, was
sensitive to changes in these key assumptions.

The primary procedures we performed to address this critical audit matter included the following. We tested
certain internal controls over the Company’s goodwill impairment process, including controls over the key assumptions.
We performed sensitivity analyses over the key assumptions to assess their impact on the Company’s determination that
the carrying value of the grain storage and protein production systems Europe/Middle East reporting unit exceeded its
fair value. We compared the Company’s future cash flows and revenue growth rates used in the valuation model against
underlying business strategies and growth plans. We compared the Company’s historical revenue forecasts to actual
results to assess the Company’s ability to forecast. In addition, we involved valuation professionals with specialized
skills and knowledge who assisted in:

•

comparing the Company’s discount rate inputs and market multiples to market data and publicly available
information for comparable entities to test the selected discount rate and market multiples, and

testing the estimate of fair value for the grain storage and protein production systems Europe/Middle East reporting
unit using the Company’s cash flow forecast and discount rate, and comparing the results to the Company’s fair
value estimate.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Atlanta, Georgia
February 28, 2020

AGCO CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)

Net sales ...................................................................................................................... $
Cost of goods sold.......................................................................................................
Gross profit.................................................................................................................
Operating expenses:

Selling, general and administrative expenses..........................................................
Engineering expenses ..............................................................................................
Impairment charges .................................................................................................
Amortization of intangibles.....................................................................................
Restructuring expenses............................................................................................
Bad debt expense.....................................................................................................
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 (income) 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..................................................................................................................... $
Cash dividends declared and paid per common share ................................................ $
Weighted average number of common and common equivalent shares outstanding:
Basic........................................................................................................................
Diluted.....................................................................................................................

Years Ended December 31,

2019

2018

2017

9,041.4

9,352.0

8,306.5

7,057.1

1,984.3

1,040.3

343.4

176.6

61.1

9.0

5.8

348.1

19.9

67.1

261.1

180.8

80.3

42.5

122.8

2.4

125.2

1.64

1.63

0.63

76.2
77.0

7,355.3

1,996.7

1,069.4

355.2

—

64.7

12.0

6.4

489.0

53.8

74.9

360.3

110.9

249.4

34.3

283.7

1.8

285.5

3.62

3.58

0.60

78.8
79.7

6,541.2

1,765.3

964.7

323.4

—

57.0

11.2

4.6

404.4

45.1

75.5

283.8

133.6

150.2

39.1

189.3
(2.9)
186.4

2.34

2.32

0.56

79.5
80.2

See accompanying notes to Consolidated Financial Statements.

AGCO CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)

Net income .................................................................................................................. $
Other comprehensive (loss) income, net of reclassification adjustments:

Defined benefit pension plans, net of taxes:

Years Ended December 31,

2019

2018

2017

122.8

283.7

189.3

Prior service cost arising during the year .........................................................
Net loss recognized due to settlement ..............................................................
Net actuarial (loss) gain arising during the year ..............................................
Amortization of prior service cost included in net periodic pension cost........
Amortization of net actuarial losses included in net periodic pension cost .....

(4.7)
0.6
(23.3)
1.6

11.8

(7.0)
0.9
(4.2)
1.3

11.7

Derivative adjustments:

Net changes in fair value of derivatives ...........................................................
Net (gains) losses reclassified from accumulated other comprehensive loss

into income ...................................................................................................
Foreign currency translation adjustments..............................................................
Other comprehensive (loss) income, net of reclassification adjustments ...................
Comprehensive income...............................................................................................
Comprehensive (income) loss attributable to noncontrolling interests.......................
Comprehensive income attributable to AGCO Corporation and subsidiaries ............ $

(2.6)

(1.1)

(0.1)
(20.6)
(37.3)
85.5
(0.1)
85.4

7.2
(206.8)
(198.0)
85.7

6.0

91.7

—

0.2

6.6

1.3

11.3

2.0

57.8

81.2

270.5
(4.1)
266.4

See accompanying notes to Consolidated Financial Statements.

AGCO CORPORATION

CONSOLIDATED BALANCE SHEETS
(in millions, except share amounts)

December 31,
2019

December 31,
2018

ASSETS

Current Assets:

Cash and cash equivalents........................................................................................................ $
Accounts and notes receivable, net ..........................................................................................
Inventories, net .........................................................................................................................
Other current assets ..................................................................................................................
Total current assets ..............................................................................................................
Property, plant and equipment, net .............................................................................................
Right-of-use lease assets.............................................................................................................
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 ............................................................................................ $
Short-term borrowings .............................................................................................................
Accounts payable .....................................................................................................................
Accrued expenses .....................................................................................................................
Other current liabilities.............................................................................................................
Total current liabilities.........................................................................................................
Long-term debt, less current portion and debt issuance costs ....................................................
Operating lease liabilities ...........................................................................................................
Pensions and postretirement health care benefits .......................................................................
Deferred tax liabilities ................................................................................................................
Other noncurrent liabilities .........................................................................................................
Total liabilities .....................................................................................................................

Commitments and contingencies (Note 12)
Stockholders’ Equity:
AGCO Corporation stockholders’ equity:

432.8
800.5
2,078.7
417.1
3,729.1
1,416.3
187.3
380.2
93.8
153.0
501.7
1,298.3
7,759.7

2.9
150.5
914.8
1,654.2
162.1
2,884.5
1,191.8
148.6
232.1
107.0
288.7
4,852.7

326.1
880.3
1,908.7
422.3
3,537.4
1,373.1
—
400.0
104.9
142.4
573.1
1,495.5
7,626.4

72.6
138.0
865.9
1,522.4
167.8
2,766.7
1,275.3
—
223.2
116.3
251.4
4,632.9

Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued or

outstanding in 2019 and 2018...............................................................................................

Common stock; $0.01 par value, 150,000,000 shares authorized, 75,471,562 and

76,536,755 shares issued and outstanding at December 31, 2019 and 2018, 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........................................................................ $

—

0.8
4.7
4,443.5
(1,595.2)
2,853.8
53.2
2,907.0
7,759.7

0.8
10.2
4,477.3
(1,555.4)
2,932.9
60.6
2,993.5
7,626.4

See accompanying notes to Consolidated Financial Statements.

AGCO CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions, except share amounts)

Accumulated Other Comprehensive Loss

Retained
Earnings

4,113.6
186.4
(44.5)
—

Defined
Benefit
Pension
Plans
$ (304.5)
—
—
—

Cumulative
Translation
Adjustment

(1,128.4)
—
—
—

Deferred
(Losses)
Gains on
Derivatives
(8.7)
$
—
—
—

Common Stock

Amount

Additional
Paid-in
Capital

Balance, December 31, 2016................................................................................
Net income........................................................................................................
Payment of dividends to shareholders ..............................................................
Issuance of restricted stock...............................................................................

79,465,393
—
—
12,066

Issuance of stock awards ..................................................................................
SSARs exercised...............................................................................................
Stock compensation..........................................................................................

Investment by noncontrolling interest ..............................................................
Purchases and retirement of common stock .....................................................
Adjustment related to the adoption of ASU 2016-09 .......................................

Defined benefit pension plans, net of taxes:

Net loss recognized due to settlement ..........................................................
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...................................................

54,309
92,521
—

—
(70,464)
—

—
—

—

Change in cumulative translation adjustment...................................................
Balance, December 31, 2017................................................................................
Net income (loss)..............................................................................................

—
79,553,825
—

Payment of dividends to shareholders ..............................................................
Issuance of restricted stock...............................................................................
Issuance of stock awards ..................................................................................

SSARs exercised...............................................................................................
Stock compensation..........................................................................................
Investment by noncontrolling interests.............................................................
Distribution to noncontrolling interest .............................................................

—
12,629
75,604

14,881
—
—
—

Purchases and retirement of common stock .....................................................
Adjustment related to the adoption of ASU 2014-09 .......................................
Defined benefit pension plans, net of taxes:

(3,120,184)
—

Prior service cost arising during year ...........................................................
Net loss recognized due to settlement ..........................................................
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...................................................

—
—
—

Change in cumulative translation adjustment...................................................
Balance, December 31, 2018................................................................................
Net income (loss)..............................................................................................

—
76,536,755
—

Payment of dividends to shareholders ..............................................................

Issuance of restricted stock...............................................................................

Issuance of stock awards ..................................................................................

—

14,105

608,444

106,514
—
—
—

Changes in noncontrolling interest ...................................................................
Purchases and retirement of common stock .....................................................
Defined benefit pension plans, net of taxes:

—
(1,794,256)

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...................................................
Change in cumulative translation adjustment...................................................

—
—
—

—

—
—

0.8
—
—
—

—
—
—

—
—

—

—
0.8
—

—
—
—

—
—
—
—

—
—

—
—
—

—
0.8
—

—

—
—
—
—

—
—

—
—
—

—

—
—

103.3
—
—
0.8

(2.2)
(4.4)
39.1

—
—
—

—
—

—

—
136.6
—

—
0.8
(3.1)

(0.6)
45.5
—
—

(169.0)
—

—
—
—

—
10.2
—

—

1.0

(13.3)

(3.1)
40.3
—
—

—
(30.4)

—
—
—

—

—
—

—
—
—

—
—
(1.7)

—
—

—

—
4,253.8
285.5

(47.1)
—
—

—
—
—
—

(15.3)
0.4

—
—
—

—
4,477.3
125.2

(48.0)

—

(9.7)

(1.7)
—
—
—

—
(99.6)

—
—
—

—

—
—

—
—
—

0.2
6.6

1.3

11.3

—

—
—
—

—
—

—

—
(285.1)
—

56.6
(1,071.8)
—

—
—
—

—
—
—
—

—
—

(7.0)
0.9
(4.2)

1.3
11.7
—

—
(282.4)
—

—

—
—
—
—

—
—

(4.7)
0.6
(23.3)

1.6

11.8

—
—

—
—
—

—
—
—
—

—
—

—
—
—

(202.6)
(1,274.4)
—

—

—
—
—
—

—
—

—
—
—

—

—
(23.1)

Balance, December 31, 2019................................................................................

75,471,562

0.8

4.7

4,443.5

$ (296.4)

(1,297.5)

See accompanying notes to Consolidated Financial Statements.

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests

Total
Stockholders’
Equity

(1,441.6)
—
—
—

—
—
—

0.2
6.6

1.3

11.3

4.0

56.6
(1,361.6)
—

—
—
—

—
—
—
—

—
—

(7.0)
0.9
(4.2)

1.3
11.7
6.1

(202.6)
(1,555.4)
—

—

—
—
—
—

—
—

(4.7)
0.6
(23.3)

1.6

11.8

(2.7)
(23.1)

61.1
2.9
—
—

—
—
—

0.5
—
—

—
—

—

1.2
65.7
(1.8)

—
—
—

—
—
1.0
(0.1)

—
—

—
—
—

(4.2)
60.6
(2.4)

—

—
—
2.0
(0.4)

(9.1)
—

—
—
—

—

—
2.5

2,837.2
189.3
(44.5)
0.8

(2.2)
(4.4)
39.1

0.5
—
(1.7)

0.2
6.6

1.3

11.3

4.0

57.8
3,095.3
283.7

(47.1)
0.8
(3.1)

(0.6)
45.5
1.0
(0.1)

(184.3)
0.4

(7.0)
0.9
(4.2)

1.3
11.7
6.1

(206.8)
2,993.5
122.8

(48.0)

1.0

(23.0)

(4.8)
40.3
2.0
(0.4)

(9.1)
(130.0)

(4.7)
0.6
(23.3)

1.6

11.8

(2.7)
(20.6)

(1,595.2)

53.2

2,907.0

—
—
—

—
—

—

4.0

—
(4.7)
—

—
—
—

—
—
—
—

—
—

—
—
—

—
—
6.1

—
1.4
—

—

—
—
—
—

—
—

—
—
—

—

(2.7)
—

(1.3)

AGCO CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

Years Ended December 31,
2018

2017

2019

Cash flows from operating activities:

Net income................................................................................................................ $
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation.........................................................................................................
Impairment charges..............................................................................................
Amortization of intangibles .................................................................................
Stock compensation expense ...............................................................................
Equity in net earnings of affiliates, net of cash received .....................................
Deferred income tax provision (benefit)..............................................................
Loss on extinguishment of debt ...........................................................................
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 of businesses, net of cash acquired............................................................
Investments in unconsolidated affiliates...................................................................
Other .........................................................................................................................
Net cash used in investing activities.............................................................

Cash flows from financing activities:

122.8

283.7

189.3

210.9
176.6
61.1
41.3
—
15.1
—
6.9

63.8
(216.3)
(14.4)
35.7
114.5
77.9
573.1
695.9

(273.4)
4.9
—
(3.1)
—
(271.6)

225.2
—
64.7
46.3
(3.2)
(14.7)
24.5
2.6

63.3
(214.3)
(85.6)
(24.3)
161.3
66.4
312.2
595.9

(203.3)
3.2
—
(5.8)
0.4
(205.5)

222.8
—
57.0
38.2
41.2
(14.1)
—
3.0

(34.7)
(196.0)
(36.6)
123.5
149.0
35.0
388.3
577.6

(203.9)
4.1
(293.1)
(0.8)
—
(493.7)

Proceeds from indebtedness .....................................................................................
Repayments of indebtedness.....................................................................................
Purchases and retirement of common stock .............................................................
Payment of dividends to stockholders ......................................................................
Payment of minimum tax withholdings on stock compensation ..............................
Payment of debt issuance costs.................................................................................
Investments by noncontrolling interests, net ............................................................
Net cash used in financing activities ............................................................
Effect of exchange rate changes on cash, cash equivalents and restricted cash .........
Increase (decrease) in cash, cash equivalents and restricted cash...............................
Cash, cash equivalents and restricted cash, beginning of year ...................................
Cash, cash equivalents and restricted cash, end of year.............................................. $

2,082.7
(2,191.1)
(130.0)
(48.0)
(28.1)
(0.5)
1.6
(313.4)
(4.2)
106.7
326.1
432.8

5,257.5
(5,433.6)
(184.3)
(47.1)
(4.0)
(2.7)
0.9
(413.3)
(18.7)
(41.6)
367.7
326.1

3,513.9
(3,639.7)
—
(44.5)
(6.9)
—
0.5
(176.7)
30.8
(62.0)
429.7
367.7

See accompanying notes to Consolidated Financial Statements.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operations and Summary of Significant Accounting Policies

Business

AGCO Corporation and subsidiaries (“AGCO” or the “Company”) is a leading manufacturer and distributor of

agricultural equipment and related replacement parts throughout the world. The Company sells a full range of agricultural
equipment, including tractors, combines, hay tools, sprayers, forage equipment, seeding and tillage equipment, implements, and
grain storage and protein production systems. The Company’s products are widely recognized in the agricultural equipment
industry and are marketed under a number of well-known brand names including: Challenger®, Fendt®, GSI®, Massey
Ferguson® and Valtra®. The Company distributes most of its products through a combination of approximately 3,275
independent dealers and distributors as well as the Company utilizes associates and licensees to provide a distribution channel
for its products. In addition, the Company provides retail financing through its finance joint ventures with Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A., or “Rabobank.”

Basis of Presentation and Consolidation

The Company’s Consolidated Financial Statements represent the consolidation of all wholly-owned companies,
majority-owned companies and joint ventures in which the Company has been determined to be the primary beneficiary.
The Company consolidates a variable interest entity (“VIE”) if the Company determines it is the primary beneficiary.
The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the
entity’s economic performance and the obligation to absorb losses or the right to receive benefits that potentially could be
significant to the VIE. The Company also consolidates all entities that are not considered VIEs if it is determined that the
Company has a controlling voting interest to direct the activities that most significantly impact the joint venture or entity.
The Company records investments in all other affiliate companies using the equity method of accounting when it has
significant influence. Other investments, including those representing an ownership interest of less than 20%, are recorded at
cost. All significant intercompany balances and transactions have been eliminated in the Consolidated Financial Statements.
Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. The estimates made by management primarily
relate to accounts and notes receivable, inventories, deferred income tax valuation allowances, uncertain tax positions, goodwill
and other identifiable intangible assets, and certain accrued liabilities, principally relating to reserves for volume discounts and
sales incentives, warranty obligations, product liability and workers’ compensation obligations, and pensions and
postretirement benefits.

Foreign Currency Translation

The financial statements of the Company’s foreign subsidiaries are translated into United States currency in

accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters.” Assets and liabilities are
translated to United States dollars at period-end exchange rates. Income and expense items are translated at average rates of
exchange prevailing during the period. Translation adjustments are included in “Accumulated other comprehensive loss” in
stockholders’ equity within the Company’s Consolidated Balance Sheets. Gains and losses, which result from foreign currency
transactions, are included in the accompanying Consolidated Statements of Operations. The Company changed the functional
currency of its wholly-owned subsidiary from the Argentinian peso to the U.S. dollar effective July 1, 2018.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents reported in the Consolidated Balance Sheets as of December 31, 2019, 2018 and 2017 and

cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows for the years ended
December

31, 2019, 2018 and 2017 are as follows (in millions):

Cash(1) ................................................................................ $
Cash equivalents(2).............................................................
Restricted cash(3)................................................................
Total ................................................................................... $

December 31, 2019
412.3

December 31, 2018
290.5
$

December 31, 2017
317.0
$

17.3

3.2

35.6

—

432.8

326.1

50.7

—

367.7

____________________________________

(1) Consisted primarily of cash on hand and bank deposits.
(2) Consisted primarily of money market deposits, certificates of deposits and overnight investments. The Company considers all investments with an original
maturity of three months or less to be cash equivalents.
(3) Consisted primarily of cash in escrow or held as guarantee to support specific requirements.

Accounts and Notes Receivable

Accounts and notes receivable arise from the sale of equipment and replacement parts to independent dealers,
distributors or other customers. In the United States and Canada, amounts due from sales to dealers are immediately due upon a
retail sale of the underlying equipment by the dealer with the exception of sales of grain storage and protein production systems
as discussed further below. If not previously paid by the dealer in the United States and Canada, installment payments are
required generally beginning after the interest-free period with the remaining outstanding equipment balance generally due
within 12 months after shipment or delivery. These interest-free periods vary by product and generally range from one to
12 months. In limited circumstances, the Company provides sales terms, and in some cases, interest-free periods that are longer
than 12 months for certain products. These are typically specified programs predominately in the United States and Canada,
that allow for interest-free periods and due dates of up to 24 months for certain products depending on the year of the sale and
the dealer or distributor’s ordering or sales volume during the preceding year. Interest generally is charged at or above prime
lending rates on the outstanding receivable balances after shipment or delivery and after interest-free periods. Sales terms of
some highly seasonal products provide for payment and due dates based on a specified date during the year regardless of the
shipment date. Equipment sold to dealers in the United States and Canada is paid in full on average within 12 months of
shipment. Sales of replacement parts generally are payable within 30 days of shipment, with terms for some larger, seasonal
stock orders generally requiring payment within six months of shipment. Under normal circumstances, equipment may not be
returned. In certain regions, with respect to most equipment sales, including the United States and Canada, the Company is
obligated to repurchase equipment and replacement parts upon cancellation of a dealer or distributor contract. These obligations
are required by national, state or provincial laws and require the Company to repurchase a dealer or distributor’s unsold
inventory, including inventories for which the receivable already has been paid. Actual interest-free periods are shorter than
described above because the equipment receivable from dealers or distributors in some countries, such as in the United States
and Canada, is generally due immediately upon sale of the equipment to a retail customer as discussed above. Receivables can
also be paid prior to terms specified in sales agreements. Under normal circumstances, interest is not forgiven and interest-free
periods are not extended.

In other international markets, equipment sales generally are payable in full within 30 days to 180 days of shipment or
delivery. Payment terms for some highly seasonal products have a specified due date during the year regardless of the shipment
or delivery date. For sales in most markets outside of the United States and Canada, the Company generally does not charge
interest on outstanding receivables with its dealers and distributors. Sales of replacement parts generally are payable within
30 days to 90 days of shipment, with terms for some larger, seasonal stock orders generally payable within six months of
shipment.

In certain markets, there is a time lag, which varies based on the timing and level of retail demand, between the date

the Company records a sale and when the dealer sells the equipment to a retail customer.

Sales of grain storage and protein production systems generally are payable within 30 days of shipment. In certain

countries, sales of such systems in which the Company is responsible for construction or installation may be contingent upon
customer acceptance, payment terms vary by market and product, with fixed payment schedules on all sales.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following summarizes by geographic region, as a percentage of our consolidated net sales, amounts with

maximum interest-free periods as presented below (in millions):

North
Year Ended December 31, 2019
America
0 to 6 months........................................................$ 1,535.0
7 to 12 months......................................................
645.0
13 to 24 months....................................................

11.8

South
America

802.2

Europe/
Middle East
$ 5,317.8

Asia/
Pacific/Africa
$

718.5

Consolidated

$ 8,373.5

92.6%

—

11.1

—

656.1

11.8

7.3%

0.1%

$ 2,191.8

802.2

$ 5,328.9

718.5

$ 9,041.4

100.0%

The Company has an agreement to permit transferring, on an ongoing basis, a majority of its wholesale
interest-bearing and non-interest bearing accounts receivable in North America, Europe and Brazil to its U.S., Canadian,
European and Brazilian finance joint ventures. Qualified dealers may obtain additional financing through the Company’s U.S.,
Canadian, European and Brazilian finance joint ventures at the joint ventures’ discretion.

The Company provides various volume bonus and sales incentive programs with respect to its products. These sales

incentive programs include reductions in invoice prices, reductions in retail financing rates, dealer commissions and dealer
incentive allowances. In most cases, incentive programs are established and communicated to the Company’s dealers on a
quarterly basis. The incentives are paid either at the time of the cash settlement of the receivable (which is generally at the time
of retail sale), at the time of retail financing, at the time of warranty registration, or at a subsequent time based on dealer
purchase volumes. The incentive programs are product-line specific and generally do not vary by dealer. The cost of sales
incentives associated with dealer commissions and dealer incentive allowances is estimated based upon the terms of the
programs and historical experience, is based on a percentage of the sales price, and estimates for sales incentives are made and
recorded at the time of sale for expected incentive programs using the expected value method. These estimates are reassessed
each reporting period and are revised in the event of subsequent modifications to incentive programs, as they are communicated
to dealers. The related provisions and accruals are made on a product or product-line basis and are monitored for adequacy and
revised at least quarterly in the event of subsequent modifications to the programs. Interest rate subsidy payments, which are a
reduction in retail finance rates, are recorded in the same manner as dealer commissions and dealer incentive allowances.
Volume discounts are estimated and recognized based on historical experience, and related reserves are monitored and adjusted
based on actual dealer purchase volumes and the dealer’s progress towards achieving specified cumulative target levels. All
incentive programs are recorded and presented as a reduction of revenue, due to the fact that the Company does not receive a
distinct good or service in exchange for the consideration provided. In the United States and Canada, reserves for incentive
programs related to accounts receivable not sold to Company’s U.S. and Canadian finance joint ventures are recorded as
“accounts receivable allowances” within the Company’s Consolidated Balance Sheets due to the fact that the incentives are
paid through a reduction of future cash settlement of the receivable. Globally, reserves for incentive programs that will be paid
in cash or credit memos, as is the case with most of the Company’s volume discount programs, as well as sales with incentives
associated with accounts receivable sold to its finance joint ventures, are recorded within “Accrued expenses” within the
Company’s Consolidated Balance Sheets.

Accounts and notes receivable are shown net of allowances for sales incentive discounts available to dealers and for

doubtful accounts. Cash flows related to the collection of receivables are reported within “Cash flows from operating activities”
within the Company’s Consolidated Statements of Cash Flows. Accounts and notes receivable allowances at
December 31, 2019 and 2018 were as follows (in millions):

Sales incentive discounts ................................................................................................................ $
Doubtful accounts ...........................................................................................................................

2019

2018

25.7

28.8

54.5

24.2

31.7

55.9

In the United States and Canada, sales incentives can be paid through future cash settlements of receivables and

through credit memos to Company’s dealers or through reductions in retail financing rates paid to the Company’s finance joint
ventures. Outside of the United States and Canada, sales incentives can be paid through cash or credit memos to the Company’s
dealers or through reductions in retail financing rates paid to the Company’s finance joint ventures. The Company transfers
certain accounts receivable under its accounts receivable sales agreements with its finance joint ventures (see Note 4).
The Company records such transfers as sales of accounts receivable when it is considered to have surrendered control of such

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

receivables under the provisions of Accounting Standards Update (“ASU”) 2009-16, “Transfers and Servicing (Topic 860):
Accounting for Transfers of Financial Assets.” Cash payments made to the Company’s finance joint ventures for sales incentive
discounts provided to dealers related to outstanding accounts receivables sold are recorded within “Accrued expenses.”

Inventories

Inventories are valued at the lower of cost or net realizable value, using the first-in, first-out method. Net realizable

value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal
and transportation. At December 31, 2019 and 2018, the Company had recorded $178.6 million and $156.6 million,
respectively, as an adjustment for surplus and obsolete inventories. These adjustments are reflected within “Inventories, net”
within the Company’s Consolidated Balance Sheets.

Inventories, net at December 31, 2019 and 2018 were as follows (in millions):

Finished goods ............................................................................................................................ $
Repair and replacement parts......................................................................................................
Work in process ..........................................................................................................................
Raw materials .............................................................................................................................
Inventories, net ........................................................................................................................... $

2019

2018

780.1

611.5

213.4

473.7

660.4

587.3

217.5

443.5

2,078.7

1,908.7

Cash flows related to the sale of inventories are reported within “Cash flows from operating activities” within the

Company’s Consolidated Statements of Cash Flows.

Recoverable Indirect Taxes

The Company’s Brazilian operations incur value added taxes (“VAT”) on certain purchases of raw materials,

components and services. These taxes are accumulated as tax credits and create assets that are reduced by the VAT collected
from the Company’s sales in the Brazilian market. The Company regularly assesses the recoverability of these tax credits, and
establishes reserves when necessary against them, through analyses that include, amongst others, the history of realization, the
transfer of tax credits to third parties as authorized by the government, anticipated changes in the supply chain and the future
expectation of tax debits from the Company’s ongoing operations. The Company believes that these tax credits, net of
established reserves, are realizable. The Company had recorded approximately $142.3 million and $156.0 million,
respectively, of VAT tax credits, net of reserves, as of December 31, 2019 and 2018.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is
provided on a straight-line basis over the estimated useful lives of ten to 40 years for buildings and improvements, three to
15 years for machinery and equipment and three to ten years for furniture and fixtures. Expenditures for maintenance and
repairs are charged to expense as incurred.

Property, plant and equipment, net at December 31, 2019 and 2018 consisted of the following (in millions):

Land ................................................................................................................................................ $
Buildings and improvements ..........................................................................................................
Machinery and equipment ..............................................................................................................
Furniture and fixtures .....................................................................................................................
Gross property, plant and equipment..............................................................................................
Accumulated depreciation and amortization ..................................................................................
Property, plant and equipment, net ................................................................................................. $

142.5
808.1
2,522.0

153.4

3,626.0
(2,209.7)
1,416.3

125.3
769.1
2,391.8

148.6

3,434.8
(2,061.7)
1,373.1

2019

2018

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Goodwill, Other Intangible Assets and Long-Lived Assets

The Company tests goodwill for impairment, at the reporting unit level, annually and when events or circumstances

indicate that fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or one level
below an operating segment, for example, a component. The Company combines and aggregates two or more components of an
operating segment as a single reporting unit if the components have similar economic characteristics. The Company’s
reportable segments are not its reporting units.

Goodwill is evaluated annually as of October 1 for impairment using a qualitative assessment or a quantitative one-

step assessment. If the Company elects to perform a qualitative assessment and determines the fair value of its reporting units
more likely than not exceed the carrying value of their net assets, no further evaluation is necessary. For reporting units where
the Company performs a one-step quantitative assessment, the Company compares the fair value of each reporting unit, which
is determined based on a combination of a discounted cash flow valuation approach and a market multiple valuation approach,
to its respective carrying value of net assets, including goodwill. If the fair value of the reporting unit exceeds its carrying value
of net assets, the goodwill is not considered impaired. If the carrying value of net assets is higher than the fair value of the
reporting unit, the impairment charge is the amount by which the carrying value exceeds the reporting unit’s fair value in
accordance with ASU 2017-04.

The Company reviews its long-lived assets, which include intangible assets subject to amortization, for impairment

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or
asset group. If the Company determines that the carrying amount of an asset or asset group is not recoverable based on the
expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the
carrying amounts over the estimated fair value of the long-lived assets. Estimates of future cash flows are based on many
factors, including current operating results, expected market trends and competitive influences. The Company also evaluates
the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant
revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value,
less estimated costs to sell.

The Company’s goodwill impairment analysis conducted as of October 1, 2019 indicated that the carrying value of the

net assets of the Company’s grain storage and protein production systems operations in Europe/Middle East was in excess of
the fair value of the reporting unit, and therefore, the Company recorded a non-cash impairment charge of approximately
$173.6 million within “Impairment charges” in the Company’s Consolidated Statements of Operations. In response to
weakening market conditions and resulting operating results, new management was put in place over the grain storage and
protein productions systems business, tasked with conducting a full strategic review of the business, including that of the
Europe/Middle East reporting unit. That full strategic review was completed in the fourth quarter of 2019, along with revised
forecasts to include updated market conditions and strategic operating decisions.

During the three months ended December 31, 2019, the Company also recorded a non-cash impairment charge of

approximately $3.0 million within “Impairment charges” in the Company’s Consolidated Statements of Operations.
The impairment charge related to certain long-lived intangible assets associated with the Company’s grain storage and protein
production systems operations within North America, due to the discontinuation of a certain brand name and related product,
and customers.

The results of the Company’s goodwill and long-lived assets impairment analyses conducted as of October 1, 2018
and 2017 indicated that no reduction in the carrying amount of the Company’s goodwill and long-lived assets was required.

The Company’s accumulated goodwill impairment is approximately $354.1 million related to impairment charges the

Company recorded during 2019, 2012 and 2006 pertaining to its grain storage and protein production systems business in
Europe/Middle East, its Chinese harvesting reporting unit and its former sprayer reporting unit, respectively. The Company’s
grain storage and protein production systems Europe/Middle East reporting unit operates within the Europe/Middle East
geographical reportable segment. The Chinese harvesting business operates within the Asia/Pacific/Africa geographical
reportable segment and the former sprayer reporting unit operates within the North American geographical reportable segment.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the carrying amount of goodwill during the years ended December 31, 2019, 2018 and 2017 are

summarized as follows (in millions):

Balance as of December 31, 2016 .............. $
Acquisitions................................................
Foreign currency translation.......................
Balance as of December 31, 2017 ..............
Adjustments................................................
Foreign currency translation.......................
Balance as of December 31, 2018 ..............
Impairment charge......................................
Sale of a joint venture.................................
Foreign currency translation.......................
Balance as of December 31, 2019 .............. $

North
America

South
America

Europe/
Middle East

Asia/

Pacific/Africa Consolidated

543.9

138.8

581.9

111.8

1,376.4

67.2

—

611.1

—

611.1

—

(5.1)

—

606.0

—
(2.4)
136.4

—
(19.7)
116.7

—

—
(4.5)
112.2

17.4

71.7

671.0

8.4
(29.8)
649.6
(173.6)
—
(12.7)
463.3

—

11.1

122.9

—
(4.8)
118.1

—

—
(1.3)
116.8

84.6

80.4

1,541.4

8.4
(54.3)
1,495.5
(173.6)
(5.1)
(18.5)
1,298.3

The Company amortizes certain acquired identifiable intangible assets primarily on a straight-line basis over their

estimated useful lives, which range from five to 50 years. The acquired intangible assets have a weighted average useful life as
follows:

Intangible Assets
Patents and technology.................................................................................................................................
Customer relationships.................................................................................................................................
Trademarks and trade names........................................................................................................................
Land use rights .............................................................................................................................................

Weighted-Average
Useful Life

12 years
13 years
20 years
45 years

For the years ended December 31, 2019, 2018 and 2017, acquired intangible asset amortization was $61.1 million,

$64.7 million and $57.0 million, respectively. The Company estimates amortization of existing intangible assets will be
$59.6 million in 2020, $56.8 million in 2021, $56.3 million in 2022, $53.8 million in 2023, and $52.3 million in 2024.

The Company has previously determined that two of its trademarks have an indefinite useful life. The Massey

Ferguson trademark has been in existence since 1952 and was formed from the merger of Massey-Harris (established in the
1890’s) and Ferguson (established in the 1930’s). The Massey Ferguson brand is currently sold in approximately 110 countries
worldwide, making it one of the most widely sold tractor brands in the world. The Company also has identified the Valtra
trademark as an indefinite-lived asset. The Valtra trademark has been in existence since the late 1990’s, but is a derivative of the
Valmet trademark which has been in existence since 1951. The Valmet name transitioned to the Valtra name over a period of
time in the marketplace. The Valtra brand is currently sold in over 75 countries around the world. Both the Massey Ferguson
brand and the Valtra brand are primary product lines of the Company’s business, and the Company plans to use these
trademarks for an indefinite period of time. The Company plans to continue to make investments in product development to
enhance the value of these brands into the future. There are no legal, regulatory, contractual, competitive, economic or other
factors that the Company is aware of or that the Company believes would limit the useful lives of the trademarks. The Massey
Ferguson and Valtra trademark registrations can be renewed at a nominal cost in the countries in which the Company operates.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the carrying amount of acquired intangible assets during 2019 and 2018 are summarized as follows (in

millions):

Trademarks
and
Trade Names

Customer
Relationships

Patents and
Technology

Land Use
Rights

Total

Gross carrying amounts:
Balance as of December 31, 2017.............. $
Foreign currency translation ......................
Balance as of December 31, 2018..............
Sale of a joint venture ................................
Impairment charge .....................................
Foreign currency translation ......................
Balance as of December 31, 2019.............. $

208.4

(5.0)

203.4

(1.3)

(1.1)

(1.7)

199.3

600.4
(14.1)
586.3
(2.9)
(0.8)
(3.6)
579.0

160.0
(4.2)
155.8
(1.9)
(1.1)
(1.7)
151.1

9.1
(0.5)
8.6

—

—
(0.1)
8.5

977.9
(23.8)
954.1
(6.1)
(3.0)
(7.1)
937.9

Trademarks
and
Trade Names

Customer
Relationships

Patents and
Technology

Land Use
Rights

Total

Accumulated amortization:
Balance as of December 31, 2017 .............. $
Amortization expense .................................
Foreign currency translation .......................
Balance as of December 31, 2018 ..............
Amortization expense .................................
Sale of a joint venture .................................
Foreign currency translation .......................
Balance as of December 31, 2019 .............. $

61.4

13.7

(1.7)

73.4

11.0

(0.5)

(0.6)

83.3

279.7

73.4

3.0

40.7
(9.6)
310.8

40.1
(1.2)
(2.3)
347.4

10.1
(2.8)
80.7

9.9
(0.7)
(1.2)
88.7

0.2
(0.2)
3.0

0.1

—

3.1

417.5

64.7
(14.3)
467.9

61.1
(2.4)
(4.1)
522.5

Trademarks
and
Trade Names

Indefinite-lived intangible assets:
Balance as of December 31, 2017 ......................................................................................................................... $
Foreign currency translation..................................................................................................................................
Balance as of December 31, 2018 .........................................................................................................................
Foreign currency translation..................................................................................................................................
Balance as of December 31, 2019 ......................................................................................................................... $

88.6
(1.7)
86.9
(0.6)
86.3

Accrued Expenses

Accrued expenses at December 31, 2019 and 2018 consisted of the following (in millions):

Reserve for volume discounts and sales incentives ................................................................... $
Warranty reserves.......................................................................................................................
Accrued employee compensation and benefits..........................................................................
Accrued taxes.............................................................................................................................
Other ..........................................................................................................................................

2019

2018

580.4
331.9
290.8
170.3
280.8
1,654.2

537.7
308.6
286.2
137.8
252.1
1,522.4

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Warranty Reserves

The warranty reserve activity for the years ended December 31, 2019, 2018 and 2017 consisted of the following

(in millions):

Balance at beginning of the year....................................................................................... $
Acquisitions ......................................................................................................................
Accruals for warranties issued during the year .................................................................
Settlements made (in cash or in kind) during the year......................................................
Foreign currency translation .............................................................................................
Balance at the end of the year ........................................................................................... $

2019

2018

2017

360.9

316.0

255.6

—

234.1
(198.7)
(3.5)
392.8

—

230.5
(174.7)
(10.9)
360.9

5.1

215.9
(183.1)
22.5

316.0

The Company’s agricultural equipment products generally are under warranty against defects in materials and

workmanship for a period of one to four years. The Company accrues for future warranty costs at the time of sale based on
historical warranty experience. Approximately $60.9 million and $52.3 million of warranty reserves are included in
“Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively.

The Company recognizes recoveries of the costs associated with warranties it provides when the collection is

probable. When specifics of the recovery have been agreed upon with the Company’s suppliers through confirmation of
liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net.” Estimates of the
amount of warranty claim recoveries to be received from the Company’s suppliers based upon contractual supplier
arrangements are recorded within “Other current assets.”

Insurance Reserves

Under the Company’s insurance programs, coverage is obtained for significant liability limits as well as those risks

required to be insured by law or contract. It is the policy of the Company to self-insure a portion of certain expected losses
primarily related to workers’ compensation and comprehensive general liability, product and vehicle liability. Provisions for
losses expected under these programs are recorded based on the Company’s estimates of the aggregate liabilities for the claims
incurred.

Revenue

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers,” effective January 1, 2018 using the

modified retrospective approach.

Revenue is recognized when the Company satisfies the performance obligation by transferring control over goods or

services to a dealer, distributor or other customer. The amount of revenue recognized is measured as the consideration the
Company expects to receive in exchange for those goods or services pursuant to a contract with the customer. A contract exists
once the Company receives and accepts a purchase order under a dealer sales agreement, or once the Company enters into a
contract with an end user. The Company does not recognize revenue in cases where collectability is not probable, and defers the
recognition until collection is probable or payment is received.

The Company generates revenue from the manufacture and distribution of agricultural equipment and replacement
parts. Sales of equipment and replacement parts, which represents a majority of the Company’s net sales, are recorded by the
Company at the point in time when title and control have been transferred to an independent dealer, distributor or other
customer. Title generally passes to the dealer or distributor upon shipment or specified delivery, and the risk of loss upon
damage, theft or destruction of the equipment is the responsibility of the dealer, distributor or designated third-party carrier.
The Company believes control passes and the performance obligation is satisfied at the point of the stated shipping or delivery
term with respect to such sales.

As previously discussed, the amount of consideration the Company receives and the revenue recognized varies with
certain sales incentives the Company offers to dealers and distributors. Estimates for sales incentives are made at the time of
sale for expected incentive programs using the expected value method. These estimates are revised in the event of subsequent

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

modification to the incentive program. All incentive programs are recorded and presented as a reduction of revenue, due to the
fact that the Company does not receive a distinct good or service in exchange for the consideration provided.

Dealers or distributors may not return equipment or replacement parts while its contract with the Company is in force,

except for under established promotional and annual replacement parts return programs. At the time of sale, the Company
estimates the amount of returns based on the terms of promotional and annual return programs and anticipated returns in the
future.

Sales and other related taxes are excluded from the transaction price. Shipping and handling costs associated with

freight activities after the customer has obtained control are accounted for as fulfillment costs and are expensed and accrued at
the time revenue is recognized in “Cost of goods sold” and “Selling, general and administrative expenses” in the Company’s
Consolidated Statements of Operations.

The Company applied the practical expedient in ASU 2014-09 to not adjust the amount of revenue to be recognized

under a contract with a dealer, distributor or other customer for the time value of money when the difference between the
receipt of payment and the recognition of revenue is less than one year.

Although, substantially all revenue is recognized at a point in time, a relatively insignificant amount of installation

revenue associated with the sale of grain storage and protein production systems is recognized on an “over time” basis as
discussed below. The Company also recognizes revenue “over time” with respect to extended warranty or maintenance
contracts and certain technology services. Generally, all of the contracts with customers that relate to “over time” revenue
recognition have contract durations of less than 12 months.

Grain Storage and Protein Production Systems Installation Revenue. In certain countries, the Company sells grain

storage and protein production systems where the Company is responsible for construction and installation, and the sale is
contingent upon customer acceptance. Under these conditions, the revenues are recognized over the term of the contract when
the Company can objectively determine control has been transferred to the customer in accordance with agreed-upon
specifications in the contract. For these contracts, the Company may be entitled to receive an advance payment, which is
recognized as a contract liability for the amount in excess of the revenue recognized. The Company uses the input method
using costs incurred to date relative to total estimated costs at completion to measure the progress toward satisfaction of the
performance obligation. Revenues are recorded proportionally as costs are incurred. Costs include labor, material and overhead.
The estimation of the progress toward completion is subject to various assumptions. As part of the estimation process, the
Company reviews the length of time to complete the performance obligation, the cost of materials and labor productivity. If a
significant change in one of the assumptions occurs, then the Company will recognize an adjustment under the cumulative
catch-up method and the impact of the adjustment on the revenue recorded to date is recognized in the period the adjustment is
identified.

Extended Warranty Contracts. The Company sells separately priced extended warranty contracts, which extends

coverage beyond the base warranty period. Revenue is recognized for the extended warranty contract on a straight-line basis,
which the Company believes approximates the costs expected to be incurred in satisfying the obligations, over the extended
warranty period. The extended warranty period ranges from one to five years. Payment is received at the inception of the
extended warranty contract, which is recognized as a contract liability for the amount in excess of the revenue recognized.
The revenue associated with the sale of extended warranty contracts is insignificant.

Technology Services Revenue. The Company sells a combination of technology products and services. When the

bundled package of technology products and services is sold, the portion of the consideration received related to the services
component is recognized over time as the Company satisfies the future performance obligation. Revenue is recognized for the
hardware component when control is transferred to the dealer or distributor. The revenue associated with the sale of technology
services is insignificant.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Stock Incentive Plans

Stock compensation expense was recorded as follows (in millions). Refer to Note 10 for additional information

regarding the Company’s stock incentive plans during 2019, 2018 and 2017:

Years Ended December 31,

2019

2018

2017

Cost of goods sold ............................................................................................................. $
Selling, general and administrative expenses....................................................................
Total stock compensation expense .................................................................................... $

1.7

40.0

41.7

2.3

44.3

46.6

2.8

35.6

38.4

Research and Development Expenses

Research and development expenses are expensed as incurred and are included in engineering expenses in the

Company’s Consolidated Statements of Operations.

Advertising Costs

The Company expenses all advertising costs as incurred. Cooperative advertising costs normally are expensed at the

time the revenue is earned. Advertising expenses for the years ended December 31, 2019, 2018 and 2017 totaled approximately
$42.3 million, $42.4 million and $42.0 million, respectively.

Shipping and Handling Expenses

All shipping and handling fees charged to customers are included as a component of net sales, and are associated with
freight activities after the customer has obtained control. Shipping and handling costs are accounted for as fulfillment costs and
are expensed and accrued at the time revenue is recognized within “Cost of goods sold,” with the exception of certain handling
costs included in “Selling, general and administrative expenses” in the amount of $38.9 million, $37.9 million and
$35.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Interest Expense, Net

Interest expense, net for the years ended December 31, 2019, 2018 and 2017 consisted of the following (in millions):

Interest expense................................................................................................................. $
Interest income ..................................................................................................................

2019

2018

2017

28.8
(8.9)
19.9

61.9
(8.1)
53.8

54.5
(9.4)
45.1

During 2018, the Company repurchased its 57/8% senior notes due December 1, 2021, and as a result, recorded
approximately $24.5 million in a loss on extinguishment of debt reflected in “Interest expense, net.” This was offset by
approximately $4.7 million of accelerated amortization of a deferred gain related to a terminated interest rate swap agreement
associated with the senior notes. Refer to Note 7 for further information.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. See Note 6 for additional information regarding the Company’s income
taxes.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Net Income Per Common Share

Basic net income per common share is computed by dividing net income by the weighted average number of common
shares outstanding during each period. Diluted net income per common share assumes the exercise of outstanding stock-settled
stock appreciation rights (“SSARs”) and the vesting of performance share awards and restricted stock units using the treasury
stock method when the effects of such assumptions are dilutive.

A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common

shares outstanding for purposes of calculating basic and diluted net income per share during the years ended
December 31, 2019, 2018 and 2017 is as follows (in millions, except per share data):

Basic net income per share:
Net income attributable to AGCO Corporation and subsidiaries...................................... $
Weighted average number of common shares outstanding...............................................
Basic net income per share attributable to AGCO Corporation and subsidiaries ............. $
Diluted net income per share:

Net income attributable to AGCO Corporation and subsidiaries ................................... $
Weighted average number of common shares outstanding ............................................
Dilutive SSARs, performance share awards and restricted stock units..........................
Weighted average number of common shares and common share equivalents

outstanding for purposes of computing diluted net income per share ........................
Diluted net income per share attributable to AGCO Corporation and subsidiaries .......... $

2019

2018

2017

125.2

76.2

1.64

125.2

76.2

0.8

77.0

1.63

285.5

78.8

3.62

285.5

78.8

0.9

79.7

3.58

186.4

79.5

2.34

186.4

79.5

0.7

80.2

2.32

SSARs to purchase approximately 0.2 million shares, 0.5 million shares and 0.3 million shares of the Company’s

common stock for the years ended December 31, 2019, 2018 and 2017, respectively, were outstanding but not included in the
calculation of weighted average common and common equivalent shares outstanding because they had an antidilutive impact.

Comprehensive Income (Loss)

The Company reports comprehensive income (loss), defined as the total of net income (loss) and all other non-owner

changes in equity, and the components thereof in its Consolidated Statements of Stockholders’ Equity and Consolidated
Statements of Comprehensive Income (Loss). The components of other comprehensive (loss) income and the related tax effects
for the years ended December 31, 2019, 2018 and 2017 are as follows (in millions):

AGCO Corporation and
Subsidiaries
2019
Income
Taxes

Before-tax
Amount

After-tax
Amount

Noncontrolling
Interests
2019
After-tax
Amount

Defined benefit pension plans ......................................................... $
Net loss on derivatives.....................................................................
Foreign currency translation adjustments........................................
Total components of other comprehensive loss............................... $

(13.4) $
(3.1)
(23.1)
(39.6) $

(0.6) $
0.4

—
(0.2) $

(14.0) $
(2.7)
(23.1)
(39.8) $

—

2.5

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

AGCO Corporation and
Subsidiaries

Noncontrolling
Interests

Defined benefit pension plans ......................................................... $
Net gain on derivatives....................................................................
Foreign currency translation adjustments........................................
Total components of other comprehensive loss............................... $

0.8

7.6
(202.6)
(194.2) $

Before-tax
Amount

2018
Income
Taxes

After-tax
Amount

2.7

6.1
(202.6)
(193.8) $

1.9
(1.5)
—

0.4

2018
After-tax
Amount

—

—
(4.2)
(4.2)

AGCO Corporation and
Subsidiaries

Noncontrolling
Interests

Before-tax
Amount

2017
Income
Taxes

After-tax
Amount

2017
After-tax
Amount

24.2
4.1

56.6

84.9

(4.8) $
(0.1)
—
(4.9) $

19.4
4.0

56.6

80.0

—
—

1.2

Derivatives

The Company uses foreign currency contracts to hedge the foreign currency exposure of certain receivables and

payables. The contracts are for periods consistent with the exposure being hedged and generally have maturities of one year or
less. These contracts are classified as non-designated derivative instruments. The Company also enters into foreign currency
contracts designated as cash flow hedges of expected sales. The Company’s foreign currency contracts mitigate risk due to
exchange rate fluctuations because gains and losses on these contracts generally offset losses and gains on the exposure being
hedged. The notional amounts of the foreign currency contracts do not represent amounts exchanged by the parties and,
therefore, are not a measure of the Company’s risk. The amounts exchanged are calculated on the basis of the notional amounts
and other terms of the contracts. The credit and market risks under these contracts are not considered to be significant.

The Company’s interest expense is, in part, sensitive to the general level of interest rates, and the Company manages

its exposure to interest rate risk through the mix of floating rate and fixed rate debt. From time to time, the Company enters into
interest rate swap agreements in order to manage the Company’s exposure to interest rate fluctuations.

The Company uses non-derivative and, periodically, derivative instruments to hedge a portion of the Company’s net

investment in foreign operations against adverse movements in exchange rates.

The Company’s hedging policy prohibits it from entering into any foreign currency contracts for speculative trading

purposes. See Note 11 for additional information regarding the Company’s derivative instruments and hedging activities.

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”),

which eliminates Step 2 from the goodwill impairment test. Under the standard, an entity should perform its goodwill
impairment test by comparing the fair value of a reporting unit with its carrying amount, resulting in an impairment charge that
is the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge, however, should
not exceed the total amount of goodwill allocated to a reporting unit. The impairment assessment under ASU 2017-04 applies
to all reporting units, including those with a zero or negative carrying amount. ASU 2017-04 is effective for annual periods
beginning after December 15, 2019, and interim periods within those annual periods using a prospective approach. Early
adoption is permitted for any interim or annual goodwill impairment test performed on testing dates after January 1, 2017.
The Company adopted ASU 2017-04 during the fourth quarter of 2019 and applied the standard to its annual impairment test
performed as of October 1, 2019.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which superseded the existing lease

guidance under current U.S. GAAP. ASU 2016-02 is based on the principle that entities should recognize assets and liabilities
arising from leases. The new standard does not significantly change the lessees’ recognition, measurement and presentation of
expenses and cash flows from the previous accounting standard and leases continue to be classified as finance or operating.
The primary change under ASU 2016-02 is the requirement for entities to recognize a lease liability for payments and a
right-of-use (“ROU”) asset representing the right to use the leased asset during the term of an operating lease arrangement.
Lessees were permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of
12 months or less. Lessors’ accounting under the new standard was largely unchanged from the previous accounting standard.
In addition, ASU 2016-02 expanded the disclosure requirements of lease arrangements. Upon adoption, lessees and lessors
were required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective
approach. In July 2018, the FASB issued ASU 2018-11, “Targeted Improvements,” which allowed for a new, optional transition
method that provided the option to use the effective date as the date of initial application on transition. Under this option, the
comparative periods continued to apply the legacy guidance in ASC 840, including the disclosure requirements, and a
cumulative effect adjustment was recognized in the period of adoption rather than the earliest period presented. Under this
transition option, comparative reporting was not required and the provisions of the standard was applied prospectively to leases
in effect at the date of adoption.

The Company adopted the new guidance effective January 1, 2019 using a modified retrospective approach and no

cumulative effect adjustment was recorded upon adoption. Based on the Company’s current lease portfolio, the adoption of the
standard as of January 1, 2019 resulted in the recognition on that date of ROU assets and operating lease liabilities in the
amount of approximately $194.2 million and $196.4 million, respectively, in the Company’s Consolidated Balance Sheets.
The adoption of the new standard did not materially impact the Company’s Consolidated Statements of Operations or
Consolidated Statements of Cash Flows.

ASU 2016-02 provided a number of optional practical expedients in transition. The Company elected the “package of

practical expedients” which permitted the Company not to reassess its prior conclusions about lease identification, lease
classification and initial direct costs. The Company elected the short-term lease exemption for all leases with a term of
12 months or less for both existing and ongoing operating leases. The Company elected the practical expedient to separate lease
and non-lease components for a majority of its operating leases, other than real estate and office equipment leases.

In connection with the adoption of ASU 2016-02 on January 1, 2019, the Company completed the design of new

processes and internal controls, which included the implementation of a software solution and the cataloging of the Company’s
existing and ongoing population of leased assets. See Note 17 for additional information and related disclosures.

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”
(“ASU 2016-13”), which requires measurement and recognition of expected versus incurred credit losses for financial assets
held. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual
periods as the adoption of the standard relates to the Company. In April 2019, the FASB issued ASU 2019-04, “Codification
Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825,
Financial Instruments” (“ASU 2019-04”), which provides, among other things, targeted improvements to certain aspects of
accounting for credit losses addressed by ASU 2016-13. In November 2019, the FASB issued ASU 2019-11, “Codification
Improvements to Topic 326), Financial Instruments - Credit Losses,” which clarifies the treatment of expected recoveries for
amounts previously written-off on purchased receivables, provides transition relief for troubled debt restructurings and allows
for certain disclosure simplifications of accrued interest. The effective dates for both ASU 2019-04 and ASU 2019-11 are the
same as the effective dates for ASU 2016-13. The Company adopted this standard, and its subsequent modifications, as of
January 1, 2020. The adoption did not have a material impact to the Company’s results of operations, financial condition and
cash flows.

The Company also adopted the following pronouncements in 2019, none of which had a material effect on its results

of operations, financial condition and cash flows:

• ASU 2018-02 - “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”

• ASU 2018-13 - “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

New Accounting Pronouncements to be Adopted

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies
various aspects related to accounting for income taxes by removing certain exceptions for investments, intraperiod allocations
and interim calculations, and adding guidance to reduce complexity in accounting for income taxes. ASU 2019-12 is effective
for annual periods beginning after December 15, 2020, and interim periods within those annual periods using a prospective
approach. Early adoption is permitted. Depending on the amendment, adoption may be applied on the retrospective, modified
retrospective or prospective basis. The standard will not have a material impact on the Company's results of operations,
financial condition and cash flows.

As discussed above, in June 2016, the FASB issued ASU 2016-13, which requires measurement and recognition of

expected versus incurred credit losses for financial assets held. In November 2019, the FASB issued ASU 2019-10, “Financial
Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,”
which delays the effective date of ASU 2016-13 for smaller reporting companies and other non-SEC reporting entities. This
applies to the Company’s equity method finance joint ventures who are now required to adopt ASU 2016-13 for annual periods
beginning after December 15, 2022 and interim periods within those annual periods. The standard, and its subsequent
modification, will likely impact the results of operations and financial condition of the Company’s finance joint ventures.
Therefore, adoption of the standard by the Company’s finance joint ventures will likely impact the Company’s “Investment in
affiliates” and “Equity in net earnings of affiliates.” The Company’s finance joint ventures are currently evaluating the impact
of ASU 2016-13 to their results of operations and financial condition.

Acquisitions

On October 2, 2017, the Company acquired the hay and forage division of the Lely Group (“Lely”) for

approximately €80.2 million (or approximately $94.6 million), net of cash acquired of approximately €10.1 million
(or approximately $11.9 million). The Lely acquisition, with manufacturing locations in northern Germany, has allowed the
Company to expand its product offering of hay and forage equipment, including balers and loader wagons. The acquisition
was financed by the Company’s credit facility (see Note 7).

The fair values of the assets acquired and liabilities assumed as of the acquisition date are presented in the following

table (in millions):

Current assets ................................................................................................................................................. $
Property, plant and equipment........................................................................................................................
Intangible assets .............................................................................................................................................
Goodwill.........................................................................................................................................................
Total assets acquired ....................................................................................................................................

Current liabilities............................................................................................................................................
Long-term liabilities.......................................................................................................................................
Total liabilities assumed...............................................................................................................................

Net assets acquired .................................................................................................................................... $

87.0
17.8
7.6
25.8
138.2

23.5
8.2
31.7
106.5

The acquired identifiable intangible assets of Lely as of the date of the acquisition are summarized in the following

table (in millions):

Intangible Assets
Customer relationships................................................................................................
Technology..................................................................................................................
Trademarks..................................................................................................................

Amount

Weighted-Average
Useful Life

3.0

1.6

7.6

5 years

12 years

10 years

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The results of operations of Lely have been included in the Company’s Consolidated Financial Statements as of and
from the date of acquisition. The associated goodwill has been included in the Company’s Europe/Middle East geographical
reportable segment. Proforma results related to the acquisition were not material.

On September 1, 2017, the Company acquired Precision Planting LLC (“Precision Planting”) for approximately
$198.1 million, net of cash acquired of approximately $1.6 million. Precision Planting, headquartered in Tremont, Illinois,
is a leading manufacturer of high-tech planting equipment. The acquisition of Precision Planting provided the Company an
opportunity to expand its precision farming technology offerings on a global basis. The acquisition was financed by the
Company’s credit facility (see Note 7).

The fair values of the assets acquired and liabilities assumed as of the acquisition date are presented in the following

table (in millions):

Current assets ................................................................................................................................................ $
Property, plant and equipment.......................................................................................................................
Intangible assets ............................................................................................................................................
Goodwill........................................................................................................................................................
Total assets acquired...................................................................................................................................

Net assets acquired ................................................................................................................................... $

59.5
20.8
64.4
67.2
211.9

12.2
12.2
199.7

The acquired identifiable intangible assets of Precision Planting as of the date of the acquisition are summarized in the

following table (in millions):

Amount

Weighted-Average
Useful Life

21.4

25.1

17.9

64.4

14 years

10 years

20 years

The results of operations of Precision Planting have been included in the Company’s Consolidated Financial

Statements as of and from the date of acquisition. The associated tax deductible goodwill has been included in the
Company’s North America geographical reportable segment. Proforma results related to the acquisition were not material.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Restructuring Expenses

From 2014 through 2019, the Company announced and initiated several actions to rationalize employee headcount at

various manufacturing facilities and various administrative offices located in Europe, South America, Africa, China and the
United States to reduce costs in response to softening global market demand and lower production volumes. The aggregate
headcount reduction was approximately 3,890 employees between 2014 and 2018. In addition, during the three months ended
December 31, 2019, the Company initiated various restructuring activities in an effort to rationalize its grain storage and protein
production system operations. The Company recorded severance and related costs associated with these rationalizations in
connection with the termination of approximately 270 employee during 2019.

The components of the restructuring expenses are summarized as follows (in millions):

Loss on Sale
of Joint
Venture

Write-down
of Property,
Plant
and
Equipment

Employee
Severance

Facility
Closure
Costs

Total

Balance as of December 31, 2016 .................... $
2017 provision ..................................................
Less: Non-cash expense....................................
Cash expense ....................................................
2017 provision reversal.....................................
2017 cash activity .............................................
Foreign currency translation .............................
Balance as of December 31, 2017 ....................
2018 provision ..................................................
Less: Non-cash expense....................................
Cash expense ....................................................
2018 provision reversal.....................................
2018 cash activity .............................................
Foreign currency translation .............................
Balance as of December 31, 2018 ....................
2019 provision ..................................................
Less: Non-cash expense....................................
Cash expense ....................................................
2019 provision reversal.....................................
2019 cash activity .............................................
Foreign currency translation .............................
Balance as of December 31, 2019 .................... $

— $
—

—

2.1

(2.1)

—

— $
0.2
(0.2)
—

—

0.3
(0.3)
—

—

1.5
(1.5)
—

—

— $

14.5
12.4

—

12.4
(1.4)
(16.0)
1.4

10.9

13.8

—

13.8
(2.1)
(14.4)
(1.1)
7.1

5.6

—

5.6
(0.7)
(6.8)
(0.4)
4.8

0.8
—

—

—
(0.8)
—

—

0.5

—

0.5

—
(0.5)
—

— $

15.3
12.6
(0.2)
12.4
(1.4)
(16.8)
1.4

10.9

14.1
(0.3)
13.8
(2.1)
(14.4)
(1.1)
7.1

9.7
(3.6)
6.1
(0.7)
(7.3)
(0.4)
4.8

In addition, during the three months ended December 31, 2019, the Company exited and sold its 50% interest in its

USC, LLC joint venture to its joint venture partner for approximately $5.1 million. The Company recorded a loss of
approximately $2.1 million associated with the sale, which was reflected within “Restructuring expenses” in the Company’s
Consolidated Statements of Operations.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accounts Receivable Sales Agreements

The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its

wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint
ventures. As of December 31, 2019 and 2018, the cash received from receivables sold under the U.S., Canadian, European and
Brazilian accounts receivable sales agreements was approximately $1.6 billion and $1.4 billion, respectively.

Under the terms of the accounts receivable sales agreements in North America, Europe and Brazil, the Company pays

an annual fee related to the servicing of the receivables sold. The Company also pays the respective AGCO Finance entities a
subsidized interest payment with respect to the accounts receivable sales agreements, calculated based upon LIBOR plus a
margin on any non-interest bearing accounts receivable outstanding and sold under the accounts receivables sales agreements.
These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s
Consolidated Statements of Operations. The Company does not service the receivables after the sale occurs and does not
maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales
agreements and determined that these facilities should be accounted for as off-balance sheet transactions.

Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected

within “Other expense, net” in the Company’s Consolidated Statements of Operations, were approximately $42.4 million,
$36.0 million and $39.2 million during 2019, 2018 and 2017, respectively.

The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the

Company’s dealers. The receivables associated with these arrangements are without recourse to the Company. The Company
does not service the receivables after the sale occurs and does not maintain any direct retained interest in the receivables. As of
December 31, 2019 and 2018, these finance joint ventures had approximately $104.3 million and $82.5 million, respectively,
of
outstanding accounts receivable associated with these arrangements. The Company reviewed its accounting for these
arrangements and determined that these arrangements should be accounted for as off-balance sheet transactions.

In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions

around the world. The Company reviewed the sale of such receivables and determined that these arrangements should be
accounted for as off-balance sheet transactions.

Investments in Affiliates

Investments in affiliates as of December 31, 2019 and 2018 were as follows (in millions):

Finance joint ventures......................................................................................................... $
Manufacturing joint ventures..............................................................................................
Other affiliates ....................................................................................................................

339.0

26.8

14.4

380.2

358.7

26.3

15.0

400.0

2019

2018

The Company’s finance joint ventures are located in the United States, Canada, Europe, Brazil, Argentina and

Australia, and provide retail financing and wholesale financing to the Company’s retail customers and dealers, respectively.
See Note 14 for further information on the Company’s finance joint ventures. The Company’s manufacturing joint ventures
consist of Groupement International De Mecanique Agricole SA (“GIMA”) (a joint venture with a third-party manufacturer to
purchase, design and manufacture components for agricultural equipment in France) and a joint venture with a third-party
manufacturer to manufacture protein production equipment in China. The other joint ventures represent investments in farm
equipment manufacturers, an electronic and software system manufacturer, distributors and licensees.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s equity in net earnings of affiliates for the years ended December 31, 2019, 2018 and 2017 were as

follows (in millions):

Finance joint ventures ......................................................................... $
Manufacturing and other joint ventures ..............................................

2019

2018

2017

41.5

1.0

42.5

34.7
(0.4)
34.3

39.9
(0.8)
39.1

Summarized combined financial information of the Company’s finance joint ventures as of December 31, 2019 and

2018 and for the years ended December 31, 2019, 2018 and 2017 were as follows (in millions):

Total assets.......................................................................................................................... $
Total liabilities ....................................................................................................................
Partners’ equity ...................................................................................................................

7,773.2

7,082.4

690.8

7,649.2

6,917.2

732.0

As of December 31,

2019

2018

For the Years Ended December 31,
2018

2019

2017

Revenues ............................................................................................. $
Costs....................................................................................................
Income before income taxes ............................................................... $

417.6

299.9

117.7

390.8

286.7

104.1

366.0

243.3

122.7

The majority of the assets of the Company’s finance joint ventures represent finance receivables. The majority of the
liabilities represent notes payable and accrued interest. Under the various joint venture agreements, Rabobank or its affiliates
provide financing to the joint venture companies. AGCO has a 49% interest in the Company’s finance joint ventures (Note 14).

At December 31, 2019 and 2018, the Company’s receivables from affiliates were approximately $15.2 million and

$12.9 million, respectively. The receivables from affiliates are reflected within “Accounts and notes receivable, net” within the
Company’s Consolidated Balance Sheets.

The portion of the Company’s retained earnings balance that represents undistributed retained earnings of equity
method investees was approximately $310.8 million and $326.9 million as of December 31, 2019 and 2018, respectively.

Income Taxes

The sources of income before income taxes and equity in net earnings of affiliates were as follows for the years ended

December 31, 2019, 2018 and 2017 (in millions):

United States ................................................................................................... $
Foreign ............................................................................................................
Income before income taxes and equity in net earnings of affiliates .............. $

(53.1) $
314.2
261.1

(126.0) $
486.3
360.3

(141.6)
425.4
283.8

2019

2018

2017

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The provision for income taxes by location of the taxing jurisdiction for the years ended December 31, 2019, 2018 and

2017 consisted of the following (in millions):

Current:

United States:

Federal...................................................................................................... $
State..........................................................................................................
Foreign..........................................................................................................

Deferred:

United States:

Federal......................................................................................................
State..........................................................................................................
Foreign..........................................................................................................

2019

2018

2017

(6.5) $
2.1
170.1
165.7

1.3
—
13.8
15.1
180.8

(9.1) $
1.2
133.5
125.6

—
—
(14.7)
(14.7)
110.9

20.3
0.6
126.8
147.7

0.9
—
(15.0)
(14.1)
133.6

Swiss tax reform was enacted during 2019 and eliminates certain preferential tax items as well as implements new tax

On December 22, 2017, The Tax Cuts and Jobs Act (“the 2017 Tax Act”) was enacted in the United States. During the

three months ended December 31, 2017, the Company recorded a tax provision of approximately $42.0 million in accordance
with Staff Accounting Bulletin No. 118, which provided SEC Staff guidance for the application of ASC 740 “Income Taxes,”
in the reporting period in which the 2017 Tax Act was enacted. The $42.0 million tax provision included a provisional income
tax charge related to a one-time transition tax associated with the mandatory deemed repatriation of unremitted foreign
earnings. The tax provision also included a provisional income tax charge associated with the income tax consequences related
to the expected future repatriation of certain underlying foreign earnings, as historically, the Company had considered them to
be permanently reinvested. The remaining balance of the tax provision primarily related to the remeasurement of certain net
deferred tax assets using the lower enacted U.S. Corporate tax rate, as well as other miscellaneous related impacts. During the
three months ended December 31, 2018, the Company finalized its calculations related to the 2017 Tax Act and recorded an
income tax benefit of approximately $8.4 million.

A reconciliation of income taxes computed at the United States federal statutory income tax rate (21% for 2019,

21% for 2018 (from 35% to 21%), and 35% for 2017) to the provision for income taxes reflected in the Company’s
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 is as follows (in millions):

Provision for income taxes at United States federal statutory rate.................... $
State and local income taxes, net of federal income tax effects ........................
Taxes on foreign income which differ from the United States statutory rate....
Tax effect of permanent differences ..................................................................
Change in valuation allowance..........................................................................
Change in tax contingency reserves ..................................................................
Research and development tax credits ..............................................................
Impacts related to changes in tax laws ..............................................................
Other ..................................................................................................................

2019

2018

2017

54.8
(2.5)
6.7

63.9

84.6

3.2
(7.1)
(21.8)
(1.0)
180.8

75.7
(6.0)
(0.3)
26.7

24.6

8.5
(8.5)
(8.4)
(1.4)
110.9

99.3
(5.7)
(57.7)
60.6
(1.4)
3.8
(5.0)
42.0
(2.3)
133.6

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The significant components of the deferred tax assets and liabilities at December 31, 2019 and 2018 were as follows

(in millions):

Deferred Tax Assets:

2019

2018

Net operating loss carryforwards ............................................................................................. $
Sales incentive discounts..........................................................................................................
Inventory valuation reserves ....................................................................................................
Pensions and postretirement health care benefits.....................................................................
Warranty and other reserves.....................................................................................................
Research and development tax credits .....................................................................................
Foreign tax credits....................................................................................................................
Other.........................................................................................................................................
Total gross deferred tax assets ...............................................................................................
Valuation allowance ...............................................................................................................
Total deferred tax assets ......................................................................................................

Deferred Tax Liabilities:

Tax over book depreciation and amortization ..........................................................................
Investment in affiliates .............................................................................................................
Other.........................................................................................................................................
Total deferred tax liabilities.................................................................................................

Net deferred tax liabilities .............................................................................................. $

Amounts recognized in Consolidated Balance Sheets:

Deferred tax assets - noncurrent............................................................................................... $
Deferred tax liabilities - noncurrent .........................................................................................

72.0

61.9

41.1

51.6

128.5

17.3

6.4

17.2

396.0
(169.1)
226.9

164.3

50.3

25.5

240.1
(13.2) $

93.8
(107.0)
(13.2) $

74.5

58.8

36.3

47.6

98.6

3.1

9.7

21.6

350.2
(83.9)
266.3

214.3

42.8

20.6

277.7
(11.4)

104.9
(116.3)
(11.4)

As reflected in the preceding table, the Company recorded a net deferred tax liability of $13.2 million and
$11.4 million as of December 31, 2019 and December 31, 2018, respectively, and had a valuation allowance against its gross
deferred tax assets of approximately $169.1 million and $83.9 million as of December 31, 2019 and 2018, respectively.

During the three months ended September 30, 2019, the Company recorded a non-cash deferred income tax charge of
approximately $53.7 million to establish a valuation allowance against its Brazilian net deferred income tax assets. In addition,
the Company maintains a valuation allowance to fully reserve its net deferred tax assets in the United States and certain foreign
jurisdictions. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The Company assessed the likelihood that its deferred tax assets would be recovered from estimated
future taxable income and available tax planning strategies and determined that all adjustments to the valuation allowance were
appropriate. In making this assessment, all available evidence was considered including the current economic climate, as well
as reasonable tax planning strategies. The Company believes it is more likely than not that it will realize its remaining net
deferred tax assets, net of the valuation allowance, in future years.

The Company had net operating loss carryforwards of $236.4 million as of December 31, 2019, with expiration dates

as follows: 2020 - $24.4 million; 2021 - $21.3 million; 2022 - $14.3 million and thereafter or unlimited - $176.4 million.
The net operating loss carryforwards of $236.4 million are entirely in tax jurisdictions outside of the United States.
The Company does not have any material U.S. state net operating loss carryforwards.

The Company paid income taxes of $144.4 million, $101.6 million and $111.2 million for the years ended

December 31, 2019, 2018 and 2017, respectively.

The Company recognizes income tax benefits from uncertain tax positions only when there is a more than 50%

likelihood that the tax positions will be sustained upon examination by the taxing authorities based on the technical merits of
the positions. At December 31, 2019 and 2018, the Company had $210.7 million and $166.1 million, respectively, of

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized. At
December 31, 2019 and 2018, the Company had approximately $51.0 million and $58.5 million, respectively, of accrued or
deferred taxes related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions that
it expects to settle or pay in the next 12 months. The Company accrued approximately $1.8 million and $5.6 million of interest
and penalties related to unrecognized tax benefits in its provision for income taxes during 2019 and 2018, respectively. At
December 31, 2019 and 2018, the Company had accrued interest and penalties related to unrecognized tax benefits of
$28.4 million and $27.2 million, respectively.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits as of

and during the years ended December 31, 2019 and 2018 is as follows (in millions):

Gross unrecognized income tax benefits at the beginning of the year ....................................... $
Additions for tax positions of the current year ...........................................................................
Additions for tax positions of prior years ...................................................................................
Reductions for tax positions of prior years for:

Changes in judgments ..............................................................................................................
Settlements during the year ......................................................................................................
Lapses of applicable statute of limitations ...............................................................................
Foreign currency translation.....................................................................................................
Gross unrecognized income tax benefits at the end of the year ................................................. $

2019

2018

166.1

32.8

20.7

(4.6)
(0.7)
(0.8)
(2.8)
210.7

163.4

3.8

13.1

(1.6)
(0.7)
(4.4)
(7.5)
166.1

The reconciliation of gross unrecognized tax benefits above for 2019 excludes certain indirect favorable effects that

relate to other tax jurisdictions of approximately $44.9 million.

The Company and its subsidiaries file income tax returns in the United States and in various state, local and foreign

jurisdictions. The Company and its subsidiaries are routinely examined by tax authorities in these jurisdictions. As of
December 31, 2019, a number of income tax examinations in foreign jurisdictions were ongoing. It is possible that certain of
these ongoing examinations may be resolved within 12 months. Due to the potential for resolution of federal, state and foreign
examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross
unrecognized income tax benefits balance may materially change within the next 12 months. In certain foreign jurisdictions,
there is either statutory expirations or our settlement expectations such that approximately $51.0 million could be concluded
within the next 12 months. Although there are ongoing examinations in various federal and state jurisdictions, the 2016 through
2019 tax years generally remain subject to examination in the United States by applicable authorities. In the Company’s
significant foreign jurisdictions, primarily the United Kingdom, France, Germany, Switzerland, Finland and Brazil, the
2014 through 2019 tax years generally remain subject to examination by their respective tax authorities. In Brazil, the
Company is contesting disallowed deductions related to the amortization of certain goodwill amounts (see Note 12).

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Indebtedness

Long-term debt consisted of the following at December 31, 2019 and 2018 (in millions):

Senior term loan due 2022(1)............................................................................................... $
Credit facility, expires 2023(1).............................................................................................
1.002% Senior term loan due 2025.....................................................................................
Senior term loans due between 2021 and 2028(1) ...............................................................
1.056% Senior term loan due 2020(1)..................................................................................
Other long-term debt...........................................................................................................
Debt issuance costs .............................................................................................................

Less: Current portion of other long-term debt..................................................................
Senior term loans due 2019 ....................................................................................
Total indebtedness, less current portion.............................................................................. $

____________________________________
(1) Maturity dates are reflected as of December 31, 2019.

December 31,
2019

December 31,
2018

168.1
—

280.2

736.2

—

12.5
(2.3)
1,194.7
(2.9)
—
1,191.8

171.5
114.4

—

815.3

228.7

20.6
(2.6)
1,347.9
(8.8)
(63.8)
1,275.3

At December 31, 2019, the aggregate scheduled maturities of long-term debt, excluding the current portion of

long-term debt, are as follows (in millions):

2021.................................................................................................................................................................... $
2022....................................................................................................................................................................
2023....................................................................................................................................................................
2024....................................................................................................................................................................
Thereafter ...........................................................................................................................................................

297.4

170.2

277.7

2.3

444.2

1,191.8

Cash payments for interest were approximately $26.3 million, $35.2 million and $55.2 million for the years ended

December 31, 2019, 2018 and 2017, respectively.

Current Indebtedness

Senior Term Loan Due 2022

In October 2018, the Company entered in a term loan agreement with Rabobank in the amount of €150.0 million
(or approximately $168.1 million as of December 31, 2019). The Company is permitted to prepay the term loan before its
maturity date of October 28, 2022. Interest is payable on the term loan quarterly in arrears at an annual rate, equal to the
EURIBOR plus a margin ranging from 0.875% to 1.875% based on the Company’s credit rating. The Company also has to
fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio.

Credit Facility

In October 2018, the Company entered into a multi-currency revolving credit facility of $800.0 million. The maturity

date of the credit facility is October 17, 2023. Interest accrues on amounts outstanding under the credit facility, at the
Company’s option, at either (1) LIBOR plus a margin ranging from 0.875% to 1.875% based on the Company’s credit rating, or
(2) the base rate, which is equal to the higher of (i) the administrative agent’s base lending rate for the applicable currency,
(ii) the federal funds rate plus 0.5%, and (iii) one-month LIBOR for loans denominated in U.S. dollars plus 1.0%, plus a margin
ranging from 0.0% to 0.875% based on the Company’s credit rating. The credit facility contains covenants restricting, among
other things, the incurrence of indebtedness and the making of certain payments, including dividends. The Company also has to
fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio. As of December 31, 2019,
the Company had no outstanding borrowings under the credit facility and the ability to borrow approximately $800.0 million

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

under the facility. As of December 31, 2018, the Company had approximately $114.4 million of outstanding borrowings under
the credit facility and the ability to borrow approximately $685.6 million under the facility. Interest on U.S. dollar borrowings
under the Company's credit facility is calculated based upon LIBOR. In the event that LIBOR is no longer published, interest
will be calculated upon a base rate. The credit facility also provides for an expedited amendment process once a replacement
for LIBOR is established.

The Company’s former revolving credit and term loan facility consisted of an $800.0 million multi-currency revolving

credit facility and a €312.0 million term loan facility. The maturity date of the former credit facility was June 26, 2020. Under
the former credit facility agreement, interest accrued on amounts outstanding, at the Company’s option, depending on the
currency borrowed, at either (1) LIBOR or EURIBOR plus a margin ranging from 1.0% to 1.75% based on the Company’s
leverage ratio, or (2) the base rate, which is equal to the higher of (i) the administrative agent’s base lending rate for the
applicable currency, (ii) the federal funds rate plus 0.5%, and (iii) one-month LIBOR for loans denominated in U.S. dollars plus
1.0% plus a margin ranging from 0.0% to 0.25% based on the Company’s leverage ratio. The credit facility contained
covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including
dividends, and was subject to acceleration in the event of a default. The Company also had to fulfill financial covenants with
respect to a total debt to EBITDA ratio and an interest coverage ratio. As is more fully described in Note 11, the Company
entered into an interest rate swap in 2015 to convert the term loan facility’s floating interest rate to a fixed interest rate of 0.33%
plus the applicable margin over the remaining life of the term loan facility. In connection with the closing of new credit facility
in October 2018, the Company repaid its outstanding €312.0 million (or approximately $360.8 million) term loan under the
former revolving credit and term loan facility. The Company recorded approximately $0.9 million in “Interest expense, net,”
associated with the write-off of deferred debt issuance costs associated with the repayment. The Company also recorded a loss
of approximately $3.9 million which was recorded in “Interest expense, net” for the year ended December 31, 2018 associated
with the termination of the interest rate swap instrument.

1.002% Senior Term Loan

In December 2018, the Company entered into a term loan with the European Investment Bank (“EIB”), which
provided the Company with the ability to borrow up to €250.0 million. The €250.0 million (or approximately $280.2 million as
of December 31, 2019) of funding was received on January 25, 2019 with a maturity date of January 24, 2025. The Company is
permitted to prepay the term loan before its maturity date. Interest is payable on the term loan at 1.002% per annum, payable
semi-annually in arrears. The term loan contains covenants regarding, among other things, the incurrence of indebtedness and
the making of certain payments, as well as commitments regarding amounts of future research and development expenses in
Europe, and is subject to acceleration in the events of default. The Company also has to fulfill financial covenants with respect
to a net leverage ratio and interest coverage ratio.

Senior Term Loans Due Between 2021 and 2028

In October 2016, the Company borrowed an aggregate amount of €375.0 million through a group of seven related

term loan agreements, and in August 2018, the Company borrowed an additional aggregate amount of €338.0 million through a
group of another seven related term loan agreements. Of the 2016 term loans, an aggregate amount of €56.0 million
(or approximately $61.1 million) was repaid upon maturity in October 2019.

In aggregate, the Company has indebtedness of €657.0 million (or approximately $736.2 million as of

December 31, 2019) through a group of twelve related term loan agreements. The provisions of the term loan agreements are
substantially identical, with the exception of interest rate terms and maturities. The Company is permitted to prepay the term
loans before their maturity dates. For the term loans with a fixed interest rate, interest is payable in arrears on an annual basis,
with interest rates ranging from 0.70% to 2.26% and a maturity date between August 2021 and August 2028. For the term loans
with a floating interest rate, interest is payable in arrears on a semi-annual basis, with interest rates based on the EURIBOR plus
a margin ranging from 0.70% to 1.25% and a maturity date between August 2021 and August 2025. The term loans contain
covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including
dividends, and is subject to acceleration in the event of default.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Former Indebtedness

1.056% Senior Term Loan

In December 2014, the Company entered into a term loan with the EIB, which provided the Company with the ability

to borrow up to €200.0 million. The €200.0 million of funding was received on January 15, 2015 and had a maturity date of
January 15, 2020. The Company repaid the €200.0 million (or approximately $220.0 million) term loan in December 2019.
Interest was payable on the term loan at 1.056% per annum, payable quarterly in arrears. The term loan contained covenants
regarding, among other things, the incurrence of indebtedness and the making of certain payments, as well as commitments
regarding amounts of future research and development expenses in Europe, and was subject to acceleration in the events of
default. The Company also had to fulfill financial covenants with respect to a net leverage ratio and interest coverage ratio.

Senior Term Loans Due 2021

In April 2016, the Company entered into two term loan agreements with Rabobank, in the amount of €100.0 million

and €200.0 million, respectively. The provisions of the two term loans were identical in nature. In December 2017, the
Company repaid its €200.0 million (or approximately $239.8 million) term loan and in October 2018, in connection with the
term loan agreement due 2022 with Rabobank discussed above, the Company repaid its €100.0 million (or approximately
$113.2 million) term loan. The Company had the ability to prepay the term loans before their maturity date on April 26, 2021.
Interest was payable on the term loans per annum, paid quarterly in arrears, equal to the EURIBOR plus a margin ranging from
1.0% to 1.75% based on the Company’s net leverage ratio. The Company also had to fulfill financial covenants with respect to
a total debt to EBITDA ratio and an interest coverage ratio.

57/8% Senior Notes

The Company’s 57/8% senior notes due December 1, 2021 constituted senior unsecured indebtedness. Interest was

payable on the notes semi-annually in arrears. At any time prior to September 1, 2021, the Company could redeem the notes,
in whole or in part from time to time, at its option, at a redemption price equal to the greater of (i) 100% of the principal
amount plus accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date, or (ii) the
sum of the present values of the remaining scheduled payments of principal and interest (exclusive of interest accrued to the
date of redemption) discounted to the redemption date at the treasury rate plus 0.5%, plus accrued and unpaid interest,
including additional interest, if any. Beginning September 1, 2021, the Company could redeem the notes, in whole or in part
from time to time, at its option, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest,
including additional interest, if any.

In May 2018, the Company completed a cash tender offer to purchase any and all of its outstanding 57/8% senior notes

at a cash purchase price of $1,077.50 per $1,000.00 of senior notes. As a result of the tender offer, the Company repurchased
approximately $185.9 million of principal amount of the senior notes for approximately $200.3 million, plus accrued interest.
In October 2018, the Company repurchased the remaining principal amount of the senior notes of approximately $114.1 million
for approximately $122.5 million, plus accrued interest. Both repurchases resulted in total losses on extinguishment of debt of
approximately $24.5 million, including associated fees. As a result of the repurchase of the 57/8% senior notes, the Company
recorded a cumulative amount of approximately $4.7 million of accelerated amortization of a deferred gain related to a
terminated interest rate swap instrument associated with the senior notes. The losses on extinguishment as well as the
accelerated amortization were reflected in “Interest expense, net,” for the year ended December 31, 2018.

Short-Term Borrowings

As of December 31, 2019 and 2018, the Company had short-term borrowings due within one year of approximately

$150.5 million and $138.0 million, respectively.

Standby Letters of Credit and Similar Instruments

The Company has arrangements with various banks to issue standby letters of credit or similar instruments, which

guarantee the Company’s obligations for the purchase or sale of certain inventories and for potential claims exposure for
insurance coverage. At December 31, 2019 and 2018, outstanding letters of credit totaled $13.9 million and $14.1 million,
respectively.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Employee Benefit Plans

The Company sponsors defined benefit pension plans covering certain employees, principally in the United Kingdom,

the United States, Germany, Switzerland, Finland, France, Norway and Argentina. The Company also provides certain
postretirement health care and life insurance benefits for certain employees, principally in the United States and Brazil.

The Company also maintains an Executive Nonqualified Pension Plan (“ENPP”) that provides certain senior
executives with retirement income for a period of 15 years or up to a lifetime annuity, if certain requirements are met. Benefits
under the ENPP vest if the participant has attained age 50 and has at least ten years of service (including five years as a
participant in the ENPP), but are not payable until the participant reaches age 65. The lifetime annuity benefit generally is
available only to vested participants who retire on or after reaching age 65. The ENPP is an unfunded, nonqualified defined
benefit pension plan.

Net annual pension costs for the years ended December 31, 2019, 2018 and 2017 for the Company’s defined benefit

pension plans and ENPP are set forth below (in millions):

Pension benefits
Service cost..............................................................................................
Interest cost..............................................................................................
Expected return on plan assets ................................................................
Amortization of net actuarial losses ........................................................
Amortization of prior service cost...........................................................
Net loss recognized due to settlement .....................................................
Net annual pension cost...........................................................................

2019

2018

2017

15.5
20.7
(28.1)
14.3

1.6

0.5

16.6
19.9
(34.0)
13.8

1.2

0.9

24.5

18.4

17.1
20.6
(35.9)
13.4

1.2

0.2

16.6

The components of net periodic pension and postretirement benefits cost, other than the service cost component, are

included in “Other expense, net” in the Company’s Consolidated Statements of Operations.

The weighted average assumptions used to determine the net annual pension costs for the Company’s defined benefit

pension plans and ENPP for the years ended December 31, 2019, 2018 and 2017 are as follows:

2019

2018

2017

All plans:

Weighted average discount rate ..............................................................
Weighted average expected long-term rate of return on plan assets.......
Rate of increase in future compensation.................................................

2.8%

4.6%

2.5%

5.4%

2.7%

5.8%

1.8%-5.0%

1.5%-5.0%

U.S.-based plans:

Weighted average discount rate ..............................................................
Weighted average expected long-term rate of return on plan assets(1)....
Rate of increase in future compensation(2)..............................................

4.35%
5.5%

5.0%

3.70%
6.0%

5.0%

4.25%
6.0%

5.0%

___________________________________
(1) Applicable for U.S. funded, qualified plans.
(2) Applicable for U.S. unfunded, nonqualified plan.

For the Company’s Swiss cash balance plan, the interest crediting rate of 1.0% for both 2019 and 2018 was set equal
to the current annual minimum rate set by the government for the mandatory portion of the account balance. Amounts above
that have an interest crediting rate of 0.25%.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Net annual postretirement benefit costs, and the weighted average discount rate used to determine them, for the years

ended December 31, 2019, 2018 and 2017 are set forth below (in millions, except percentages):

Postretirement benefits
Service cost..............................................................................................
Interest cost..............................................................................................
Amortization of net actuarial losses ........................................................
Amortization of prior service cost...........................................................
Net annual postretirement benefit cost ....................................................

2019

2018

2017

0.1
1.3
—
0.1
1.5

0.1
1.4
0.1
0.2
1.8

Weighted average discount rate...............................................................

5.2%

4.9%

5.3%

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables set forth reconciliations of the changes in benefit obligation, plan assets and funded status as of

December 31, 2019 and 2018 (in millions):

Change in benefit obligation
Benefit obligation at beginning of year .....................
Service cost ................................................................
Interest cost ................................................................
Plan participants’ contributions..................................
Actuarial losses (gains) ..............................................
Amendments ..............................................................
Settlements.................................................................
Benefits paid ..............................................................
Other ..........................................................................
Foreign currency exchange rate changes ...................
Benefit obligation at end of year................................

Change in plan assets
Fair value of plan assets at beginning of year............
Actual return on plan assets .......................................
Employer contributions..............................................
Plan participants’ contributions..................................
Benefits paid ..............................................................
Settlements.................................................................
Foreign currency exchange rate changes ...................
Fair value of plan assets at end of year ......................
Funded status .............................................................
Unrecognized net actuarial losses (gains)..................
Unrecognized prior service cost.................................
Accumulated other comprehensive loss.....................
Net amount recognized ..............................................

Amounts recognized in Consolidated
Balance Sheets:
Other long-term asset.................................................
Other current liabilities ..............................................
Accrued expenses.......................................................
Pensions and postretirement health care benefits
(noncurrent)................................................................
Net amount recognized ..............................................

Pension and ENPP Benefits

2019

2018

Postretirement Benefits
2018
2019

823.1

916.7

25.3

15.5

20.7

1.2

83.3

4.7
(0.8)
(44.8)
—

14.4

917.3

16.6

19.9

1.2
(55.2)
8.5
(1.5)
(45.9)
1.9
(39.1)
823.1

Pension and ENPP Benefits

2019

2018

30.2

0.1

1.4

—
(4.2)
—

—
(1.4)
—
(0.8)
25.3

0.1

1.3

—

4.5

—

—
(1.5)
—
(0.3)
29.4

Postretirement Benefits
2018
2019

— $

—

1.5

—
(1.5)
—

—

— $
(29.4) $
3.9

3.0
(6.9)
(29.4) $

— $

(1.6)
—

(27.8)
(29.4) $

—

1.4

—
(1.4)
—

—

—
(25.3)
(0.6)
3.1
(2.5)
(25.3)

—
(1.5)
—

(23.8)
(25.3)

691.8
(32.4)
36.8

1.2
(45.9)
(1.5)
(32.9)
617.1
$
(206.0) $
356.7

19.5
(376.2)
(206.0) $

617.1

91.2

30.6

1.2
(44.8)
(0.8)
16.5

711.0
$
(206.3) $
362.2

22.5
(384.7)
(206.3) $

6.2
(4.9)
(3.3)

0.1
(3.8)
(2.9)

(204.3)
(206.3) $

(199.4)
(206.0) $

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the activity in accumulated other comprehensive loss related to the Company’s ENPP

and defined pension and postretirement benefit plans during the years ended December 31, 2019 and 2018 (in millions):

Before-Tax
Amount

Income
Tax

After-Tax
Amount

Accumulated other comprehensive loss as of December 31, 2017 .........
Prior service cost arising during the year ................................................
Net loss recognized due to settlement .....................................................
Net actuarial loss arising during the year ................................................
Amortization of prior service cost...........................................................
Amortization of net actuarial losses ........................................................
Accumulated other comprehensive loss as of December 31, 2018 .........
Prior service cost arising during the year ................................................
Net loss recognized due to settlement .....................................................
Net actuarial loss arising during the year ................................................
Amortization of prior service cost...........................................................
Amortization of net actuarial losses ........................................................
Accumulated other comprehensive loss as of December 31, 2019 .........

(380.6) $
(8.5)
1.0
(7.0)
1.4

13.9
(379.8) $
(4.7)
0.6
(25.3)
1.7
14.3
(393.2) $

(95.5) $
(1.5)
0.1
(2.8)
0.1

2.2
(97.4) $
—

—
(2.0)
0.1
2.5
(96.8) $

(285.1)
(7.0)
0.9
(4.2)
1.3

11.7
(282.4)
(4.7)
0.6
(23.3)
1.6
11.8
(296.4)

The unrecognized net actuarial losses included in accumulated other comprehensive loss related to the Company’s

defined benefit pension plans and ENPP as of December 31, 2019 and 2018 are set forth below (in millions):

Unrecognized net actuarial losses........................................................................................... $

362.2

356.7

2019

2018

The increase in unrecognized net actuarial losses between years primarily resulted from lower discount rates at

December 31, 2019 compared to December 31, 2018. The unrecognized net actuarial losses will be impacted in future periods
by actual asset returns, discount rate changes, currency exchange rate fluctuations, actual demographic experience and certain
other factors. For some of the Company’s defined benefit pension plans, these losses, to the extent they exceed 10% of the
greater of the plan’s liabilities or the fair value of assets (“the gain/loss corridor”), will be amortized on a straight-line basis
over the periods discussed as follows. For the Company’s U.S. salaried, U.S. hourly and U.K. defined benefit pension plans, the
population covered is predominantly inactive participants, and losses related to those plans, to the extent they exceed the
gain/loss corridor, will be amortized over the average remaining lives of those participants while covered by the respective
plan. For the Company’s ENPP, the population is predominantly active participants, and losses related to the plan will be
amortized over the average future working lifetime of the active participants expected to receive benefits. As of
December 31, 2019, the average amortization periods were as follows:

Average amortization period of losses related to defined benefit pension plans........

7 years

15 years

19 years

ENPP

U.S. Plans

U.K. Plan

The following table summarizes the unrecognized prior service cost related to the Company's defined benefit pension

plans as of December 31, 2019 and 2018 (in millions):

Unrecognized prior service cost ............................................................................................. $

22.5

19.5

2019

2018

The increase in the unrecognized prior service cost between years is due primarily to a plan amendment related to the

Company's ENPP.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the unrecognized net actuarial losses (gains) included in the Company's accumulated

other comprehensive loss related to the Company’s U.S. and Brazilian postretirement health care benefit plans as of
December 31, 2019 and 2018 (in millions):

2019

2018

Unrecognized net actuarial losses (gains)(1)............................................................................ $
___________________________________
(1) Includes a loss of approximately $1.6 million and $0.3 million, respectively, related to the Company’s U.S. postretirement benefit plans.

3.9

(0.6)

The increase in unrecognized net actuarial losses related to the Company’s U.S. and Brazilian postretirement benefit

unrecognized net actuarial gains or losses will be impacted in future periods by discount rate changes, actual demographic

plans was primarily due to lower discount rates as of December 31, 2019 as compared to December 31, 2018.
The
experience, actual health care inflation and certain other factors. These gains or losses, to the extent they exceed the gain/loss
corridor, will be amortized on a straight-line basis over the average remaining service period of active employees expected to
receive benefits, or the average remaining lives of inactive participants, covered under the postretirement benefit plans. As of
December 31, 2019, the average amortization period was 12 years for the Company’s U.S. postretirement benefit plans.

As of December 31, 2019 and 2018, the net prior service cost related to the Company’s U.S. and Brazilian

postretirement health care benefit plans was as follows (in millions):

Net prior service cost .............................................................................................................. $

3.0

3.1

2019

2018

The following table summarizes the fair value of plan assets, aggregate projected benefit obligation and accumulated
benefit obligation as of December 31, 2019 and 2018 for defined benefit pension plans, ENPP and other postretirement plans
with accumulated benefit obligations in excess of plan assets (in millions):

All plans:

Fair value of plan assets ....................................................................................................... $
Projected benefit obligation .................................................................................................
Accumulated benefit obligation ...........................................................................................

U.S.-based plans and ENPP:

2019

2018

67.8

309.3

275.2

38.3

172.5

151.9

616.0

847.3

798.5

36.8

145.6

128.7

The amounts for 2019 disclosed above do not include the fair value of plan assets, the projected benefit obligation or

the accumulated benefit obligation related to the Company's U.K. plan. The 2018 amounts disclosed above do include balances
related to the Company's U.K. plan. The Company’s U.K. plan's fair value of plan assets was in excess of the plan’s
accumulated benefit obligation as of December 31, 2019.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s accumulated comprehensive loss as of December 31, 2019 and 2018 reflects a reduction in equity

related to the following items (in millions):

2019

2018

All plans:(1)

Reduction in equity, net of taxes of $96.3 and $97.0 at December 31, 2019 and 2018, respectively.. $

391.6

378.7

GIMA joint venture:(2)

Reduction in equity, net of taxes of $0.5 and $0.4 at December 31, 2019 and 2018, respectively......

1.6

1.1

______________________________________
(1) Primarily related to the Company’s U.K. pension plan.
(2) These amounts represented 50% of GIMA’s unrecognized net actuarial losses and unrecognized prior service cost associated with its pension plan. In

addition, GIMA recognized a net actuarial loss due to settlements of approximately $0.1 million during both 2019 and 2018.

The Company’s defined benefit pension obligation has been reflected based on the manner in which its defined benefit

plans are being administered. The obligation and resulting liability is calculated employing both actuarial and legal
assumptions. These assumptions include, but are not limited to, future inflation, the return on pension assets, discount rates, life
expectancy and potential salary increases. There are also assumptions related to the manner in which individual benefit plan
benefits are calculated, some of which are legal in nature and include, but are not limited to, member eligibility, years of service
and the uniformity of both guaranteed minimum pension benefits and member normal retirement ages for men and women.
Some of these assumptions also are subject to the outcome of certain legal cases, which are currently unknown. In the event
that any of these assumptions or the administration approach are proven to be different from the Company’s current
interpretations and approach, there could be material increases in the Company’s defined benefit pension obligation and the
related amounts and timing of future contributions to be paid by the Company.

The weighted average assumptions used to determine the benefit obligation for the Company’s defined benefit pension

plans and ENPP as of December 31, 2019 and 2018 are as follows:

All plans:

Weighted average discount rate............................................................................................
Rate of increase in future compensation ..............................................................................

2.0%

2.8%

1.75%-5.0%

U.S.-based plans:

Weighted average discount rate............................................................................................
Rate of increase in future compensation(1) ...........................................................................

3.45%

5.0%

4.35%

5.0%

2019

2018

____________________________________
(1) Applicable for U.S. unfunded, nonqualified plan.

The weighted average discount rate used to determine the benefit obligation for the Company’s postretirement benefit

plans for the years ended December 31, 2019 and 2018 was 4.5% and 5.2%, respectively.

For the years ended December 31, 2019, 2018 and 2017, the Company used a globally consistent methodology to set
the discount rate in the countries where its largest benefit obligations exist. In the United States, the United Kingdom and the
Euro Zone, the Company constructed a hypothetical bond portfolio of high-quality corporate bonds and then applied the cash
flows of the Company’s benefit plans to those bond yields to derive a discount rate. The bond portfolio and plan-specific cash
flows vary by country, but the methodology in which the portfolio is constructed is consistent. In the United States, the bond
portfolio is large enough to result in taking a “settlement approach” to derive the discount rate, in which high-quality corporate
bonds are assumed to be purchased and the resulting coupon payments and maturities are used to satisfy the Company’s U.S.
pension plans’ projected benefit payments. In the United Kingdom and the Euro Zone, the discount rate is derived using a
“yield curve approach,” in which an individual spot rate, or zero coupon bond yield, for each future annual period is developed
to discount each future benefit payment and, thereby, determine the present value of all future payments. The Company uses a
spot yield curve to determine the discount rate applicable in the United Kingdom to measure the U.K. pension plan’s service
cost and interest cost. Under the settlement and yield curve approaches, the discount rate is set to equal the single discount rate
that produces the same present value of all future payments.

For measuring the expected U.S. postretirement benefit obligation at December 31, 2019, the Company assumed a

6.25% health care cost trend rate for 2020 decreasing to 5.0% by 2025. For measuring the expected U.S. postretirement benefit
74

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

obligation at December 31, 2018, the Company assumed a 6.50% health care cost trend rate for 2019 decreasing to 5.0% by
2025. For measuring the Brazilian postretirement benefit plan obligation at December 31, 2019, the Company assumed a
10.55% health care cost trend rate for 2020, decreasing to 4.8% by 2031. For measuring the Brazilian postretirement benefit
plan obligation at December 31, 2018, the Company assumed a 10.8% health care cost trend rate for 2019, decreasing to
5.0% by 2030.

The Company currently estimates its minimum contributions and benefit payments to its U.S.-based underfunded

defined benefit pension plans and unfunded ENPP for 2020 will aggregate approximately $3.6 million. The Company
currently estimates its minimum contributions for underfunded plans and benefit payments for unfunded plans for 2020 to its
non-U.S.-based defined benefit pension plans will aggregate approximately $30.0 million, of which approximately
$20.2 million relates to its U.K. pension plan. The Company currently estimates its benefit payments for 2020 to its U.S.-based
postretirement health care and life insurance benefit plans will aggregate approximately $1.6 million and its benefit payments
for 2020 to its Brazilian postretirement health care benefit plans will aggregate less than $0.1 million.

During 2019, approximately $45.6 million of benefit payments were made related to the Company’s defined benefit
pension plans and ENPP. At December 31, 2019, the aggregate expected benefit payments for the Company’s defined benefit
pension plans and ENPP are as follows (in millions):

2020...................................................................................................................................................................... $
2021......................................................................................................................................................................

2022......................................................................................................................................................................

2023......................................................................................................................................................................

2024......................................................................................................................................................................

2025 through 2029 ...............................................................................................................................................

47.0

49.7

50.3

51.0

278.3

526.6

During 2019, approximately $1.5 million of benefit payments were made related to the Company’s U.S. and Brazilian

postretirement benefit plans. At December 31, 2019, the aggregate expected benefit payments for the Company’s U.S. and
Brazilian postretirement benefit plans are as follows (in millions):

2022......................................................................................................................................................................

2023......................................................................................................................................................................

2024......................................................................................................................................................................

2025 through 2029 ...............................................................................................................................................

1.6

1.7

8.6
17.0

Investment Strategy and Concentration of Risk

The weighted average asset allocation of the Company’s U.S. pension benefit plans as of December 31, 2019 and 2018

are as follows:

Asset Category
Equity securities ....................................................................................................................
Fixed income securities.........................................................................................................
Other investments .................................................................................................................
Total.......................................................................................................................................

2019

2018

34%
59%
7%
100%

27%
57%
16%
100%

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The weighted average asset allocation of the Company’s non-U.S. pension benefit plans as of December 31, 2019 and

2018 are as follows:

2019

2018

39%
54%
7%
100%

The Company categorizes its pension plan assets into one of three levels based on the assumptions used in valuing the

asset. See Note 13 for a discussion of the fair value hierarchy as per the guidance in ASC 820, “Fair Value Measurements”
(“ASC 820”). The Company’s valuation techniques are designed to maximize the use of observable inputs and minimize the
use of unobservable inputs. The Company uses the following valuation methodologies to measure the fair value of its pension
plan assets:

• Equity Securities: Equity securities are valued on the basis of the closing price per unit on each business day as

reported on the applicable exchange. Equity funds are valued using the net asset value of the fund, which is based on
the fair value of the underlying securities.

• Fixed Income: Fixed income securities are valued using the closing prices in the active market in which the fixed

income investment trades. Fixed income funds are valued using the net asset value of the fund, which is based on the
fair value of the underlying securities.

• Cash: These investments primarily consist of short-term investment funds which are valued using the net asset value.

• Alternative Investments: These investments are reported at fair value as determined by the general partner of the

alternative investment. The “market approach” valuation technique is used to value investments in these funds.
The funds typically are open-end funds as they generally offer subscription and redemption options to investors.
The frequency of such subscriptions or redemptions is dictated by each fund’s governing documents. The amount of
liquidity provided to investors in a particular fund generally is consistent with the liquidity and risk associated with the
underlying portfolio (i.e., the more liquid the investments in the portfolio, the greater the liquidity provided to
investors). Liquidity of individual funds varies based on various factors and may include “gates,” “holdbacks” and
“side pockets” imposed by the manager of the fund, as well as redemption fees that may also apply. Investments in
these funds typically are valued utilizing the net asset valuations provided by their underlying investment managers,
general partners or administrators. The funds consider subscription and redemption rights, including any restrictions
on the disposition of the interest, in its determination of the fair value.

•

Insurance Contracts: Insurance contracts are valued using current prevailing interest rates.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The fair value of the Company’s pension assets as of December 31, 2019 is as follows (in millions):

Total

Level 1

Level 2

Level 3

Equity securities:

Global equities .......................................................... $
Non-U.S. equities ......................................................
U.K. equities .............................................................
U.S. large cap equities...............................................
U.S. small cap equities ..............................................
Total equity securities...........................................

Fixed income:

Aggregate fixed income ............................................
International fixed income ........................................
Total fixed income share(1) ..................................

Alternative investments:

Private equity fund ....................................................
Hedge funds measured at net asset value(4)...............
Total alternative investments(2).............................
Miscellaneous funds(3) .................................................
Cash and equivalents measured at net asset value(4)....

183.4

116.5

66.9

3.8

65.2

5.9

3.4

261.7

150.1

220.0

370.1

2.3
33.3

35.6

30.8

12.8

3.8

65.2

5.9

3.4

194.8

150.1

220.0

370.1

—
—

—

66.9

—

—
—

—

Total assets ........................................................... $

711.0

564.9

66.9

—

2.3
—

2.3

30.8

—

33.1

______________________________________
(1) 43% of “fixed income” securities are in investment-grade corporate bonds; 18% are in government treasuries; 14% are in high-yield securities; 10% are

in foreign securities; 9% are in asset-backed and mortgage-backed securities; and 6% are in other various fixed income securities.

(2) 42% of “alternative investments” are in relative value funds; 24% are in long-short equity funds; 21% are in event-driven funds; 7% are distributed in

hedged and non-hedged funds; and 6% are in credit funds.

(3) “Miscellaneous funds” is comprised of insurance contracts in Finland, Norway and Switzerland.
(4) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in

the fair value hierarchy.

The following is a reconciliation of Level 3 assets as of December 31, 2019 (in millions):

Beginning balance as of December 31, 2018............................................ $
Actual return on plan assets:

(a) Relating to assets still held at reporting date.....................................
(b) Relating to assets sold during period ................................................
Purchases, sales and /or settlements..........................................................
Foreign currency exchange rate changes ..................................................
Ending balance as of December 31, 2019................................................. $

Total

Alternative
Investments

Miscellaneous
Funds

30.5

2.3

28.2

1.9

—

1.3
(0.6)
33.1

(0.1)
—

0.1

—

2.3

2.0

—

1.2
(0.6)
30.8

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The fair value of the Company’s pension assets as of December 31, 2018 is as follows (in millions):

Total

Level 1

Level 2

Level 3

Equity securities:

Global equities .......................................................... $
Non-U.S. equities ......................................................
U.K. equities .............................................................
U.S. large cap equities...............................................
U.S. small cap equities ..............................................
Preferred securities....................................................
Total equity securities...........................................

Fixed income:

Aggregate fixed income ............................................
International fixed income ........................................
Total fixed income share(1) ..................................

Alternative investments:

104.4

— $

3.0

112.4

4.5

2.4

0.2

226.9

131.5

189.3

320.8

2.3
31.8

34.1

28.2

7.1

3.0

112.4

4.5

2.4

0.2

226.9

131.5

189.3

320.8

—
—

—

—
—

—

Total assets ........................................................... $

617.1

547.7

— $

—

2.3
—

2.3

28.2

—

30.5

_______________________________________
(1) 36% of “fixed income” securities are in investment-grade corporate bonds; 27% are in government treasuries; 17% are in foreign securities; 13% are in

high-yield securities; and 7% are in other various fixed income securities.

(2) 44% of “alternative investments” are in relative value funds; 22% are in long-short equity funds; 22% are in event-driven funds; 7% are distributed in

hedged and non-hedged funds; and 5% are in credit funds.

the fair value hierarchy.

The following is a reconciliation of Level 3 assets as of December 31, 2018 (in millions):

Beginning balance as of December 31, 2017............................................ $
Actual return on plan assets:

(a) Relating to assets still held at reporting date.....................................
(b) Relating to assets sold during period ................................................
Purchases, sales and /or settlements..........................................................
Foreign currency exchange rate changes ..................................................
Ending balance as of December 31, 2018................................................. $

Total

Alternative
Investments

Miscellaneous
Funds

27.8

2.4

25.4

0.8

—

3.2
(1.3)
30.5

(0.2)
—

0.1

—

2.3

1.0

—

3.1
(1.3)
28.2

All tax-qualified pension fund investments in the United States are held in the AGCO Corporation Master Pension

Trust. The Company’s global pension fund strategy is to diversify investments across broad categories of equity and fixed
income securities with appropriate use of alternative investment categories to minimize risk and volatility. The primary
investment objective of the Company’s pension plans is to secure participant retirement benefits. As such, the key objective in
the pension plans’ financial management is to promote stability and, to the extent appropriate, growth in funded status.

The investment strategy for the plans’ portfolio of assets balances the requirement to generate returns with the need to

control risk. The asset mix is recognized as the primary mechanism to influence the reward and risk structure of the pension
fund investments in an effort to accomplish the plans’ funding objectives. The overall investment strategies and target

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

allocations of retirement fund investments for the Company’s U.S.-based pension plans and the non-U.S. based pension plans
are as follow:

Overall investment strategies(2):

Assets for the near-term benefit payments ...........................................................................
Assets for longer-term growth..............................................................................................
Total ...................................................................................................................................

Target allocations:

Equity securities ...................................................................................................................
Fixed income securities........................................................................................................
Alternative investments........................................................................................................
Cash and cash equivalents....................................................................................................
Total ...................................................................................................................................

U.S. Pension
Plans

Non-U.S.
Pension
Plans(1)

60.0%

40.0%

100.0%

30.0%

55.0%

10.0%

5.0%
100.0%

55.0%

45.0%

100.0%

40.0%

55.0%

5.0%

—%
100.0%

_______________________________________
(1) The majority of the Company’s non-U.S. pension fund investments are related to the Company’s pension plan in the United Kingdom.
(2) The overall U.S. and non-U.S. pension funds invest in a broad diversification of assets types.

The Company has noted that over very long periods, this mix of investments would achieve an average return on its
U.S.-based pension plans of approximately 5.50%. In arriving at the choice of an expected return assumption of 5.0% for its
U.S. plans for the year ended December 31, 2020, the Company has tempered this historical indicator with lower expectations
for returns and changes to investments in the future as well as the administrative costs of the plans. The Company has noted
that over very long periods, this mix of investments would achieve an average return on its non-U.S. based pension plans of
approximately 4.75%. In arriving at the choice of an expected return assumption of 4.25% for its U.K.-based plans for the year
ended December 31, 2020, the Company has tempered this historical indicator with lower expectations for returns and changes
to investments in the future as well as the administrative costs of the plans.

Equity securities primarily include investments in large-cap and small-cap companies located across the globe. Fixed

income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, agency
mortgages, asset-backed securities and government securities. Alternative and other assets include investments in hedge fund of
funds that follow diversified investment strategies. To date, the Company has not invested pension funds in its own stock and
has no intention of doing so in the future.

Within each asset class, careful consideration is given to balancing the portfolio among industry sectors, geographies,

interest rate sensitivity, dependence on economic growth, currency and other factors affecting investment returns. The assets are
managed by professional investment firms, who are bound by precise mandates and are measured against specific benchmarks.
Among asset managers, consideration is given, among others, to balancing security concentration, issuer concentration,
investment style and reliance on particular active investment strategies.

The Company participates in a small number of multiemployer plans in the Netherlands and Sweden. The Company
has assessed and determined that none of the multiemployer plans which it participates in are individually, or in the aggregate,
significant to the Company’s Consolidated Financial Statements. The Company does not expect to incur a withdrawal liability
or expect to significantly increase its contributions over the remainder of the multiemployer plans’ contract periods.

The Company maintains separate defined contribution plans covering certain employees, primarily in the United
States, the United Kingdom and Brazil. Under the plans, the Company contributes a specified percentage of each eligible
employee’s compensation. The Company contributed approximately $15.8 million for both the years ended December 31, 2019
and 2018, and approximately $15.1 million for the year ended December 31, 2017.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Stockholders’ Equity

Common Stock

At December 31, 2019, the Company had 150,000,000 authorized shares of common stock with a par value of

$0.01 per share, with approximately 75,471,562 shares of common stock outstanding and approximately 3,581,614 shares
reserved for issuance under the Company’s 2006 Long-Term Incentive Plan (the “Plan”) (See Note 10).

Share Repurchase Program

During 2019 and 2018, the Company repurchased 1,794,256 and 3,120,184 shares of its common stock, respectively,

for approximately $130.0 million and $184.3 million, respectively, either through Accelerated Share Repurchase (“ASR”)
agreements with financial institutions or through open market transactions. All shares received were retired upon receipt, and
the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and
“Retained earnings” within the Company’s Consolidated Balance Sheets.

As of December 31, 2019, the remaining amount authorized to be repurchased under board-approved share repurchase

authorizations was approximately $300.0 million, which has no expiration date.

In February 2020, the Company entered into an ASR agreement with a financial institution to repurchase an aggregate

of $25.0 million of shares of its common stock. The Company received approximately 297,000 shares to date in this
transaction. Upon settlement of the ASR, the Company may be entitled to receive additional shares of common stock or, under
certain circumstances, be required to remit a settlement amount. The Company expects that the additional shares will be
received by the Company upon final settlement of its current ASR agreement, which expires during the second quarter of 2020.

Dividends

The Company’s Board of Directors has declared and the Company has paid quarterly cash dividends per common

share generally beginning in the first quarter of the following years:

Dividends declared and paid per common share................................................... $

0.15

0.14

____________________________________
(1) The Company's Board of Directors has declared and the Company has paid quarterly cash dividends of $0.16 per common share beginning in the second

quarter of 2019, from $0.15 per common share in the first quarter of 2019.

2019(1)

2018

2017

On January 23, 2020, the Company’s Board of Directors approved a quarterly dividend of $0.16 per common share

beginning in the first quarter of 2020.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accumulated Other Comprehensive Loss

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed

to AGCO Corporation and its subsidiaries for the years ended December 31, 2019 and 2018 (in millions):

Defined Benefit
Pension Plans

Cumulative
Translation
Adjustment

Deferred Net
Gains (Losses)
on Derivatives

Total

Accumulated other comprehensive loss,

December 31, 2017......................................... $

Other comprehensive loss before

reclassifications .......................................

Net losses reclassified from accumulated

other comprehensive loss ........................

Other comprehensive income (loss), net of

reclassification adjustments ............................

Accumulated other comprehensive loss,

December 31, 2018.........................................

Other comprehensive loss before

reclassifications .......................................

Net losses (gains) reclassified from

accumulated other comprehensive loss ...

Other comprehensive loss, net of

reclassification adjustments ............................

Accumulated other comprehensive loss,

December 31, 2019......................................... $

(285.1) $

(1,071.8) $

(4.7) $

(1,361.6)

(10.3)

(202.6)

(1.1)

(214.0)

13.0

2.7

—

(202.6)

(282.4)

(1,274.4)

(27.4)

13.4

(14.0)

(23.1)

—

(23.1)

7.2

6.1

1.4

(2.6)

(0.1)

(2.7)

20.2

(193.8)

(1,555.4)

(53.1)

13.3

(39.8)

(296.4) $

(1,297.5) $

(1.3) $

(1,595.2)

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table sets forth reclassification adjustments out of accumulated other comprehensive loss by component

attributed to AGCO Corporation and its subsidiaries for the years ended December 31, 2019 and 2018 (in millions):

Details about Accumulated Other
Comprehensive Loss Components

Year ended
December 31, 2019(1)

Year ended
December 31, 2018(1)

Amount Reclassified from Accumulated Other
Comprehensive Loss

Affected Line Item
within the
Consolidated
Statements of
Operations

Derivatives:
Net (gains) losses on foreign currency

contracts .........................................................
Net losses on interest rate swap contract.......
Reclassification before tax ................................

Reclassification net of tax .................................

Defined benefit pension plans:

Amortization of net actuarial losses...............
Amortization of prior service cost .................
Reclassification before tax ................................

Reclassification net of tax .................................

(0.1) $
—
(0.1)
—
(0.1) $

14.3

1.7

16.0
(2.6)
13.4

2.3 Cost of goods sold

6.3

Interest expense, net

8.6
(1.4)
7.2

Income tax provision

13.9 Other expense, net(2)
1.4 Other expense, net(2)
15.3
(2.3)
13.0

Income tax provision

Net losses reclassified from accumulated other
comprehensive loss ........................................

13.3

20.2

____________________________________
(1)
(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost. See

(Gains) losses included within the Consolidated Statements of Operations for the years ended December 31, 2019 and 2018, respectively.

Note 8 to the Company’s Consolidated Financial Statements.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

10.

Stock Incentive Plan

Under the Plan, up to 10,000,000 shares of AGCO common stock may be issued. As of December 31, 2019,
approximately 3,581,614 shares remained available for grant, assuming the maximum number of shares are earned related to
the performance award grants discussed below. The Plan allows the Company, under the direction of the Board of Directors’
Compensation Committee, to make grants of performance shares, stock appreciation rights, restricted stock units and restricted
stock awards to employees, officers and non-employee directors of the Company.

Long-Term Incentive Plan and Related Performance Awards

The Company’s primary long-term incentive plan is a performance share plan that provides for awards of shares of the
Company’s common stock based on achieving financial targets, such as targets for earnings per share, return on invested capital
and operating margins, as determined by the Company’s Board of Directors. The stock awards under the Plan are earned over a
performance period, and the number of shares earned is determined based on annual cumulative or average results for the
specified period, depending on the measurement. Performance periods for the Company’s primary long-term incentive plan are
consecutive and overlapping three-year cycles, and performance targets are set at the beginning of each cycle. The primary
long-term incentive plan provides for participants to earn 33% to 200% of the target awards depending on the actual
performance achieved, with no shares earned if performance is below the established minimum target. Awards earned under the
Plan are paid in shares of common stock at the end of each three-year performance period. The percentage level achievement is
determined annually, with the ultimate award that is earned determined based upon the average of the three annual percentages.
The compensation expense associated with these awards is amortized ratably over the vesting or performance period based on
the Company’s projected assessment of the level of performance that will be achieved and earned.

Compensation expense recorded during 2019, 2018 and 2017 with respect to awards granted was based upon the stock

price as of the grant date. The weighted average grant-date fair value of performance awards granted under the Plan during
2019, 2018 and 2017 was as follows:

Years Ended December 31,

2019

2018

2017

Weighted average grant-date fair value ............................................

61.01

71.40

61.94

During 2019, the Company granted 542,180 performance awards related to varying performance periods. The awards
granted assume the maximum target levels of performance are achieved. The compensation expense associated with all awards
granted under the Plan is amortized ratably over the vesting or performance period based on the Company’s projected
assessment of the level of performance that will be achieved.

Performance award transactions during 2019 were as follows and are presented as if the Company were to achieve its

maximum levels of performance under the plan:

Shares awarded but not earned at January 1......................................................................................................
Shares awarded..................................................................................................................................................
Shares forfeited..................................................................................................................................................
Shares earned.....................................................................................................................................................
Shares awarded but not earned at December 31................................................................................................

938,862

542,180
(45,346)
(503,514)
932,182

Based on the level of performance achieved as of December 31, 2019, 492,314 shares were earned under the related

performance period and 302,009 shares were issued in February 2020, net of 190,305 shares that were withheld for taxes
related to the earned awards. The Plan allows for the participant to have the option of forfeiting a portion of the shares awarded
in lieu of a cash payment contributed to the participant’s tax withholding to satisfy the participant’s statutory minimum federal,
state and employment taxes which would be payable at the time of grant.

During 2017, the Company recorded approximately $4.8 million of accelerated stock compensation expense

associated with a stock award declined by the Company’s Chief Executive Officer.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of December 31, 2019, the total compensation cost related to unearned performance awards not yet recognized,
assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately
$24.0 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half
years. This estimate is based on the current projected levels of performance of outstanding awards. The compensation cost not
yet recognized could be higher or lower based on actual achieved levels of performance.

Restricted Stock Units

During the year ended December 31, 2019, the Company granted 165,160 restricted stock unit (“RSU”) awards. These

awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third
per year over a three-year requisite service period, subject to adjustment in certain cases based on performance metric relative
to the Company's peer group, commencing in 2020. The compensation expense associated with these awards is being amortized
ratably over the requisite service period for the awards that are expected to vest. The weighted average grant-date fair value of
the RSUs granted under the Plan during the years ended December 31, 2019, 2018 and 2017 were $61.01, $63.99 and $61.99,
respectively. RSU transactions during the year ended December 31, 2019 were as follows:

Shares awarded but not vested at January 1 .......................................................................................................
Shares awarded...................................................................................................................................................
Shares forfeited ..................................................................................................................................................
Shares vested ......................................................................................................................................................
Shares awarded but not vested at December 31 .................................................................................................

352,975

165,160
(8,424)
(113,182)
396,529

As of December 31, 2019, the total compensation cost related to the unvested RSUs not yet recognized was
approximately $12.6 million, and the weighted average period over which it is expected to be recognized is approximately
one and one-half years.

Stock-settled Appreciation Rights

Certain executives and key managers are eligible to receive grants of SSARs. The SSARs provide a participant with

the right to receive the aggregate appreciation in stock price over the market price of the Company’s common stock at the date
of grant, payable in shares of the Company’s common stock. The participant may exercise his or her SSARs at any time after
the grant is vested but no later than seven years after the date of grant. The SSARs vest ratably over a four-year period from the
date of grant. SSAR awards made to certain executives and key managers under the Plan are made with the base price equal to
the price of the Company’s common stock on the date of grant. The Company recorded stock compensation expense of
approximately $2.4 million, $2.4 million and $3.0 million associated with SSAR awards during 2019, 2018 and 2017,
respectively. The compensation expense associated with these awards is being amortized ratably over the vesting period.
The Company estimated the fair value of the grants using the Black-Scholes option pricing model.

The weighted average grant-date fair value of SSAR awards granted under the Plan and the weighted average

assumptions under the Black-Scholes option model were as follows for the years ended December 31, 2019, 2018 and 2017:

Weighted average grant-date fair value............................................... $
Weighted average assumptions under Black-Scholes option model:
Expected life of awards (years)...........................................................
Risk-free interest rate ..........................................................................
Expected volatility ..............................................................................
Expected dividend yield......................................................................

Years Ended December 31,

2019

2018

2017

11.34

12.88

11.45

3.0

2.6%

24.2%

1.0%

3.0

2.2%

23.7%

0.8%

3.0

1.5%

25.9%

0.9%

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

SSAR transactions during the year ended December 31, 2019 were as follows:

SSARs outstanding at January 1 ........................................................................................................................
SSARs granted ...................................................................................................................................................
SSARs exercised ................................................................................................................................................
SSARs canceled or forfeited ..............................................................................................................................
SSARs outstanding at December 31 ..................................................................................................................
SSAR price ranges per share:

1,099,592
243,600
(562,030)
(21,487)
759,675

Granted............................................................................................................................................................. $
Exercised..........................................................................................................................................................
Canceled or forfeited........................................................................................................................................

62.85
43.88 - 73.14
43.88 - 73.14

Weighted average SSAR exercise prices per share:

62.85
50.73
62.56
61.30

At December 31, 2019, the weighted average remaining contractual life of SSARs outstanding was approximately

4.6 years. As of December 31, 2019, the total compensation cost related to unvested SSARs not yet recognized was
approximately $3.9 million and the weighted-average period over which it is expected to be recognized is approximately
two and one-half years.

The following table sets forth the exercise price range, number of shares, weighted average exercise price, and

remaining contractual lives by groups of similar price as of December 31, 2019:

Range of Exercise Prices

$43.88 - $55.23

$62.85 - $73.14

Number of
Shares

175,825

583,850

759,675

SSARs Outstanding

SSARs Exercisable

Weighted
Average
Remaining
Contractual Life
(Years)

Weighted
Average
Exercise Price

Exercisable as
of December
31, 2019

Weighted
Average
Exercise Price

2.6

5.1

46.52

65.75

111,100

98,525

209,625

46.45

67.09

56.15

The total fair value of SSARs vested during 2019 was approximately $3.1 million. There were 550,050 SSARs

that were not vested as of December 31, 2019. The total intrinsic value of outstanding and exercisable SSARs as of
December 31, 2019 was $8.1 million and $4.3 million, respectively. The total intrinsic value of SSARs exercised during
2019 was approximately $12.7 million.

The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs, vesting of

RSU awards and vesting of performance awards under the Plan was approximately $2.7 million for the year ended
December 31, 2019. The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs and
vesting of RSU awards and vesting of performance awards under the Plan was approximately $1.6 million for the year ended
December 31, 2018. The excess tax benefit realized for tax deductions in the United States related to the exercise of SSARs and
vesting of RSU awards under the Plan was less than $0.1 million for the year ended December 31, 2017. The Company realized
an insignificant tax benefit from the exercise of SSARs, vesting of performance awards and vesting of RSU awards in certain
foreign jurisdictions during the years ended December 31, 2019, 2018 and 2017.

On January 22, 2020, the Company granted 212,720 performance award shares (subject to the Company achieving

future target levels of performance), 187,100 SSARs and 95,820 RSUs under the Plan.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Director Restricted Stock Grants

Pursuant to the Plan, all non-employee directors receive annual restricted stock grants of the Company’s common

stock. All restricted stock grants made to the Company’s directors are restricted as to transferability for a period of one year.
In the event a director departs from the Company’s Board of Directors, the non-transferability period expires immediately.
The plan allows each director to have the option of forfeiting a portion of the shares awarded in lieu of a cash payment
contributed to the participant’s tax withholding to satisfy the statutory minimum federal, state and employment taxes that would
be payable at the time of grant. The 2019 grant was made on April 25, 2019 and equated to 19,386 shares of common stock, of
which 14,105 shares of common stock were issued, after shares were withheld for taxes. The Company recorded stock
compensation expense of approximately $1.4 million during 2019 associated with these grants.

11.

Derivative Instruments and Hedging Activities

The Company attempts to manage its transactional foreign exchange exposure by hedging foreign currency cash flow
forecasts and commitments arising from the anticipated settlement of receivables and payables and from future purchases and
sales. Where naturally offsetting currency positions do not occur, the Company hedges certain, but not all, of its exposures
through the use of foreign currency contracts. The Company’s translation exposure resulting from translating the financial
statements of foreign subsidiaries into United States dollars may be partially hedged from time to time. When practical, the
translation impact is reduced by financing local operations with local borrowings.

The Company uses floating rate and fixed rate debt to finance its operations. The floating rate debt obligations expose

the Company to variability in interest payments due to changes in the EURIBOR and LIBOR benchmark interest rates.
The Company believes it is prudent to limit the variability of a portion of its interest payments, and to meet that objective, the
Company periodically enters into interest rate swaps to manage the interest rate risk associated with the Company’s
borrowings. The Company designates interest rate contracts used to convert the interest rate exposure on a portion of the
Company’s debt portfolio from a floating rate to a fixed rate as cash flow hedges, while those contracts converting the
Company’s interest rate exposure from a fixed rate to a floating rate are designated as fair value hedges.

To protect the value of the Company’s investment in foreign operations against adverse changes in foreign currency

exchange rates, the Company from time to time, may hedge a portion of the Company’s net investment in the foreign
subsidiaries by using a cross currency swap. The component of the gains and losses on the Company’s net investment in the
designated foreign operations driven by changes in foreign exchange rates are economically offset by movements in the fair
value of the cross currency swap contracts.

The Company’s senior management establishes the Company’s foreign currency and interest rate risk management

policies. These policies are reviewed periodically by the Finance Committee of the Company’s Board of Directors. The policies
allow for the use of derivative instruments to hedge exposures to movements in foreign currency and interest rates.
The Company’s policies prohibit the use of derivative instruments for speculative purposes.

All derivatives are recognized on the Company’s Consolidated Balance Sheets at fair value. On the date the derivative

contract is entered into, the Company designates the derivative as either (1) a cash flow hedge of a forecasted transaction,
(2) a fair value hedge of a recognized liability, (3) a hedge of a net investment in a foreign operation, or (4) a non-designated
derivative instrument.

The Company categorizes its derivative assets and liabilities into one of three levels based on the assumptions used in

valuing the asset or liability. See Note 13 for a discussion of the fair value hierarchy as per the guidance in ASC 820.
The Company’s valuation techniques are designed to maximize the use of observable inputs and minimize the use of
unobservable inputs.

Counterparty Risk

The Company regularly monitors the counterparty risk and credit ratings of all the counterparties to the derivative

instruments. The Company believes that its exposures are appropriately diversified across counterparties and that these
counterparties are creditworthy financial institutions. If the Company perceives any risk with a counterparty, then the Company
would cease to do business with that counterparty. There have been no negative impacts to the Company from any non-
performance of any counterparties.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Derivative Transactions Designated as Hedging Instruments

Cash Flow Hedges

Foreign Currency Contracts

The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted

transactions caused by fluctuations in foreign currency exchange rates. The changes in the fair values of these cash flow hedges
are recorded in accumulated other comprehensive loss and are subsequently reclassified into “Cost of goods sold” during the
period the sales and purchases are recognized. These amounts offset the effect of the changes in foreign currency rates on the
related sale and purchase transactions.

During 2019, 2018 and 2017, the Company designated certain foreign currency contracts as cash flow hedges of
expected future sales and purchases. The total notional value of derivatives that were designated as cash flow hedges was
$332.7 million and $127.0 million as of December 31, 2019 and 2018, respectively.

The following table summarizes the after-tax impact that changes in the fair value of derivatives designated as cash

flow hedges had on accumulated other comprehensive loss and net income during 2019, 2018 and 2017 (in millions):

Recognized in Net Income

(Loss) Gain
Recognized in
Accumulated
Other
Comprehensive
Loss

Classification of
Gain (Loss)

Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Loss into
Income

Total Amount
of the Line
Item in the
Consolidated
Statements of
Operations
Containing
Hedge Gains
(Losses)

2019
Foreign currency contracts(1)........................... $
2018
Foreign currency contracts.............................. $
Interest rate swap contract...............................
Total................................................................. $
2017
Foreign currency contracts.............................. $
Interest rate swap contract...............................
Total................................................................. $

(2.6) Cost of goods sold

0.4 Cost of goods sold
(1.5)
(1.1)

Interest expense, net

2.7 Cost of goods sold
(0.7)
2.0

Interest expense, net

0.1

7,057.1

(2.2) $
(5.0)
(7.2)

0.4
(2.4)
(2.0)

7,355.3

53.8

6,541.2

45.1

(1) The outstanding contracts as of December 31, 2019 range in maturity through December 2020.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held

by the Company during the years ended December 31, 2019, 2018 and 2017 (in millions):

Before-Tax
Amount

Income
Tax

After-Tax
Amount

Accumulated derivative net losses as of December 31, 2016....................................
Net changes in fair value of derivatives.....................................................................
Net losses reclassified from accumulated other comprehensive loss into income ....
Accumulated derivative net losses as of December 31, 2017....................................
Net changes in fair value of derivatives.....................................................................
Net losses reclassified from accumulated other comprehensive loss into income ....
Accumulated derivative net gains as of December 31, 2018.....................................
Net changes in fair value of derivatives.....................................................................
Net gains reclassified from accumulated other comprehensive loss into income .....
Accumulated derivative net losses as of December 31, 2019....................................

(10.1) $
1.9

2.2
(6.0)
(1.0)
8.6

1.6
(3.0)
(0.1)
(1.5) $

(1.4) $
(0.1)
0.2
(1.3)
0.1

1.4

0.2
(0.4)
—
(0.2) $

(8.7)
2.0

2.0
(4.7)
(1.1)
7.2

1.4
(2.6)
(0.1)
(1.3)

Net Investment Hedges

The Company uses non-derivative and derivative instruments, to hedge a portion of its net investment in foreign

operations against adverse movements in exchange rates. For instruments that are designated as hedges of net investments in
foreign operations, changes in the fair value of the derivative instruments are recorded in foreign currency translation
adjustments, a component of accumulated other comprehensive loss, to offset changes in the value of the net investments being
hedged. When the net investment in foreign operations is sold or substantially liquidates, the amounts recorded in accumulated
other comprehensive loss are reclassified to earnings. To the extent foreign currency denominated debt is de-designated from a
net investment hedge relationship, changes in the value of the foreign currency denominated debt are recorded in earnings
through the maturity date.

In January 2018, the Company entered into a cross currency swap contract as a hedge of its net investment in foreign

operations to offset foreign currency translation gains or losses on the net investment. The cross currency swap has an
expiration date of January 19, 2021. At maturity of the cross currency swap contract, the Company will deliver the notional
amount of approximately €245.7 million (or approximately $275.3 million as of December 31, 2019) and will receive
$300.0 million from the counterparties. The Company will receive quarterly interest payments from the counterparties based on
a fixed interest rate until maturity of the cross currency swap.

In January 2019 and September 2019, the Company designated €160.0 million and €30.0 million, respectively, of its

multi-currency revolving credit facility with a maturity date of October 17, 2023 as a hedge of its net investment in foreign
operations to offset foreign currency translation gains or losses on the net investment. During September 2019, the Company
repaid the designated amount outstanding under its multi-currency revolving credit facility and the foreign currency
denominated debt was de-designated as a net investment hedge.

The following table summarizes the notional values of the instrument designated as a net investment hedge

(in millions):

Cross currency swap contract ................................................................................. $

300.0

Notional Amount as of

December 31, 2019 December 31, 2018

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the after-tax impact of changes in the fair value of the instrument designated as a net

investment hedge (in millions):

Gain (Loss) Recognized in Accumulated Other
Comprehensive Loss for the Years Ended

Foreign currency denominated debt .................................... $
Cross currency swap contract..............................................

December 31, 2019 December 31, 2018 December 31, 2017
(45.0)
—

(14.4) $
17.7

9.3

2.5

Derivative Transactions Not Designated as Hedging Instruments

During 2019, 2018 and 2017, the Company entered into foreign currency contracts to economically hedge receivables

and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the
functional currency. These contracts were classified as non-designated derivative instruments. Gains and losses on such
contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and
are immediately recognized into earnings. As of December 31, 2019 and 2018, the Company had outstanding foreign currency
contracts with a notional amount of approximately $2,800.3 million and $1,335.8 million, respectively.

The following table summarizes the impact that changes in the fair value of derivatives not designated as hedging

instruments had on net income (in millions):

Classification of
Gain (Loss)

December 31, 2019 December 31, 2018 December 31, 2017

For the Years Ended

Foreign currency contracts.........

Other expense, net

20.4

(1.4) $

38.3

The table below sets forth the fair value of derivative instruments as of December 31, 2019 (in millions):

Asset Derivatives as of
December 31, 2019

Liability Derivatives as of
December 31, 2019

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Derivative instruments designated as
hedging instruments:

Foreign currency contracts........................ Other current assets
Cross currency swap contract ................... Other noncurrent assets

0.6 Other current liabilities

27.0 Other noncurrent liabilities

1.9

—

Derivative instruments not designated as
hedging instruments:

Foreign currency contracts........................ Other current assets

11.7 Other current liabilities

Total derivative instruments .................

39.3

13.1

15.0

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The table below sets forth the fair value of derivative instruments as of December 31, 2018 (in millions):

Asset Derivatives as of
December 31, 2018

Liability Derivatives as of
December 31, 2018

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Derivative instruments designated as
hedging instruments:

Foreign currency contracts........................ Other current assets
Cross currency swap contract ................... Other noncurrent assets

1.9 Other current liabilities

17.7 Other noncurrent liabilities

Derivative instruments not designated as
hedging instruments:

Foreign currency contracts........................ Other current assets

5.1 Other current liabilities

Total derivative instruments .................

24.7

0.4

—

6.2

6.6

Former Interest Rate Swap Contract

The Company monitors the mix of short-term and long-term debt regularly. From time to time, the Company manages
the risk to interest rate fluctuations through the use of derivative financial instruments. During 2015, the Company entered into
an interest rate swap instrument with a notional amount of €312.0 million and an expiration date of June 26, 2020. The swap
was designated and accounted for as a cash flow hedge. Under the swap agreement, the Company paid a fixed interest rate of
0.33% plus the applicable margin, and the counterparty to the agreement paid a floating interest rate based on the three-month
EURIBOR. Changes in the fair value of the interest rate swap were recorded in accumulated other comprehensive loss and
were subsequently reclassified into “Interest expense, net” as a rate adjustment in the same period in which the related interest
on the Company’s floating rate term loan facility affected earnings. As a result of the Company’s new credit facility agreement
entered into in October 2018 and the repayment of the €312.0 million (or approximately $360.8 million) term loan under the
Company’s former revolving credit facility, as well as the change in the mix of the Company’s short-term and long-term debt,
the Company terminated the interest rate swap instrument and recorded a loss of approximately $3.9 million which was
recorded in “Interest expense, net” for the year ended December 31, 2018. Refer to Note 7 for further information.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

12.

Commitments and Contingencies

The future payments required under the Company’s significant commitments, excluding indebtedness, as of

December 31, 2019 are as follows (in millions):

2020

2021

2022

2023

2024

Thereafter

Total

Payments Due By Period

Interest payments related to indebtedness(1)(2) .. $
Unconditional purchase obligations(3) ..............
Other short-term and long-term obligations(4) ..

91.7
Total contractual cash obligations .................. $ 207.7

13.9

102.1

13.2

20.9

67.3

10.8

4.5

38.5

53.8

8.0

0.2

32.4

40.6

5.8

—

18.5

24.3

5.7

—

47.6

53.3

57.4

127.7

296.0

$ 481.1

$ 101.4

____________________________________
(1) Estimated interest payments are calculated assuming current interest rates over minimum maturity periods specified in debt agreements. Debt may be

repaid sooner or later than such minimum maturity periods (unaudited).

(2) Refer to Note 7 for more information on the Company's commitments with respect to indebtedness.
(3) Unconditional purchase obligations exclude routine purchase orders entered into in the normal course of business.
(4) Other short-term and long-term obligations include estimates of future minimum contribution requirements under the Company’s U.S. and non-U.S.

defined benefit pension and postretirement plans. These estimates are based on current legislation in the countries the Company operates within and are
subject to change. Other short-term and long-term obligations also include income tax liabilities related to uncertain income tax positions connected with
ongoing income tax audits in various jurisdictions (unaudited).

Guarantees ........................................................ $

44.7

6.1

6.9

5.2

3.2

0.5

66.6

Amount of Commitment Expiration Per Period

2020

2021

2022

2023

2024

Thereafter

Total

Off-Balance Sheet Arrangements

Guarantees

The Company maintains a remarketing agreement with its U.S. finance joint venture, AGCO Finance LLC, whereby

the Company is obligated to repurchase up to $6.0 million of repossessed equipment each calendar year. The Company believes
that any losses that might be incurred on the resale of this equipment will not materially impact the Company’s financial
position or results of operations, due to the fair value of the underlying equipment.

At December 31, 2019, the Company has outstanding guarantees of indebtedness owed to third parties of
approximately $47.6 million, primarily related to dealer and end-user financing of equipment. Such guarantees generally
obligate the Company to repay outstanding finance obligations owed to financial institutions if dealers or end users default on
such loans through 2025. Losses under such guarantees historically have been insignificant. In addition, the Company generally
would expect to be able to recover a significant portion of the amounts paid under such guarantees from the sale of the
underlying financed farm equipment, as the fair value of such equipment is expected to be sufficient to offset a substantial
portion of the amounts paid. The Company also has obligations to guarantee indebtedness owed to certain of its finance joint
ventures if dealers or end users default on loans. Losses under such guarantees historically have been insignificant and the
guarantees are not material. The Company believes the credit risk associated with all of these guarantees is not material to its
financial position or results of operations.

In addition, at December 31, 2019, the Company had accrued approximately $18.9 million of outstanding guarantees

of minimum residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration
of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future
payments under the guarantee is approximately $26.7 million.

Other

At December 31, 2019, the Company had outstanding designated and non-designated foreign exchange contracts with

a gross notional amount of approximately $3,133.0 million. The outstanding contracts as of December 31, 2019 range in
maturity through December 2020 (see Note 11).

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian,

European and Brazilian finance joint ventures. The Company also sells certain accounts receivable under factoring
arrangements to financial institutions around the world. The Company reviewed the sale of such receivables and determined
that these facilities should be accounted for as off-balance sheet transactions.

Contingencies

In August 2008, as part of routine audits, the Brazilian taxing authorities disallowed deductions relating to the
amortization of certain goodwill recognized in connection with a reorganization of the Company’s Brazilian operations and the
related transfer of certain assets to the Company’s Brazilian subsidiaries. The amount of the tax disallowance through
December 31, 2019, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately
$32.6 million). The amount ultimately in dispute will be significantly greater because of interest and penalties. The Company
has been advised by its legal and tax advisors that its position with respect to the deductions is allowable under the tax laws of
Brazil. The Company is contesting the disallowance and believes that it is not likely that the assessment, interest or penalties
will be required to be paid. However, the ultimate outcome will not be determined until the Brazilian tax appeal process is
complete, which could take several years.

The Company is a party to various other legal claims and actions incidental to its business. The Company believes that

none of these claims or actions, either individually or in the aggregate, is material to its business or financial statements as a
whole, including its results of operations and financial condition.

13.

Fair Value of Financial Instruments

The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the
asset or liability. Estimates of fair value for financial assets and liabilities are based on a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. Observable inputs (highest level) reflect market data obtained from
independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance
with this guidance, fair value measurements are classified under the following hierarchy:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

The Company categorizes its pension plan assets into one of the three levels of the fair value hierarchy. See Note 8 for

a discussion of the valuation methods used to measure the fair value of the Company’s pension plan assets.

The Company enters into foreign currency and interest rate swap contracts. The fair values of the Company’s
derivative instruments are determined using discounted cash flow valuation models. The significant inputs used in these models
are readily available in public markets, or can be derived from observable market transactions, and therefore have been
classified as Level 2. Inputs used in these discounted cash flow valuation models for derivative instruments include the
applicable exchange rates, forward rates or interest rates. Such models used for option contracts also use implied volatility.
See Note 11 for a discussion of the Company’s derivative instruments and hedging activities.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018 are summarized

below (in millions):

Derivative assets .................................................................................. $
Derivative liabilities.............................................................................

— $

—

39.3 $

15.0

— $

—

39.3

15.0

As of December 31, 2019

Level 1

Level 2

Level 3

Total

As of December 31, 2018

Level 1

Level 2

Level 3

Total

— $

—

24.7 $

6.6

— $

—

24.7

6.6

Cash and cash equivalents, accounts and notes receivable, net and accounts payable are valued at their carrying
amounts in the Company’s Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial
instruments.

The carrying amounts of long-term debt under the Company’s senior term loan due 2022, 1.002% senior term loan due
2025 and senior term loans due between 2021 and 2028 approximate fair value based on the borrowing rates currently available
to the Company for loans with similar terms and average maturities. See Note 7 for additional information on the Company’s
long-term debt.

14.

Related Party Transactions

Rabobank, a financial institution based in the Netherlands, is a 51% owner in the Company’s finance joint ventures,
which are located in the United States, Canada, Europe, Brazil, Argentina and Australia. Rabobank is also the principal agent
and participant in the Company’s revolving credit facility (see Note 7). The majority of the assets of the Company’s finance
joint ventures represents finance receivables. The majority of the liabilities represents notes payable and accrued interest.
Under the various joint venture agreements, Rabobank or its affiliates provide financing to the joint venture companies,
primarily through lines of credit. During 2019, 2018 and 2017, the Company did not make additional investments in its finance
joint ventures. During 2019 and 2018, the Company received dividends of approximately $40.5 million and $29.4 million,
respectively, from certain of the Company’s finance joint ventures.

The Company’s finance joint ventures provide retail financing and wholesale financing to its dealers. The terms of the

financing arrangements offered to the Company’s dealers are similar to arrangements the finance joint ventures provide to
unaffiliated third parties. In addition, the Company transfers, on an ongoing basis, a majority of its wholesale receivables in
North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures (see Note 4).
The Company maintains a remarketing agreement with its U.S. finance joint venture and has other guarantees with its other
finance joint ventures which were not material (see Note 12). In addition, as part of sales incentives provided to end users, the
Company may from time to time subsidize interest rates of retail financing provided by its finance joint ventures. The cost of
those programs is recognized at the time of sale to the Company’s dealers (See Note 1).

Tractors and Farm Equipment Limited (“TAFE”), in which the Company holds a 23.75% interest, manufactures and
sells Massey Ferguson-branded equipment primarily in India, and also supplies tractors and components to the Company for
sale in other markets. Mallika Srinivasan, who is the Chairman and Chief Executive Officer of TAFE, is currently a member of
the Company’s Board of Directors. As of December 31, 2019, TAFE beneficially owned 12,150,152 shares of the Company’s
common stock, not including shares of the Company's common stock received by Ms. Srinivasan for service as a director.
The Company and TAFE are parties to an agreement pursuant to which, among other things, TAFE has agreed not to purchase
in excess of 12,150,152 shares of the Company’s common stock, subject to certain adjustments, and the Company has agreed to
annually nominate a TAFE representative to its Board of Directors. During 2019, 2018 and 2017, the Company purchased
approximately $92.7 million, $109.6 million and $102.0 million, respectively, of tractors and components from TAFE. During
2019, 2018 and 2017, the Company sold approximately $1.5 million, $1.8 million and $1.2 million, respectively, of parts to
TAFE. The Company received dividends from TAFE of approximately $2.0 million during 2019 and $1.8 million during both
2018 and 2017.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During 2019, 2018 and 2017, the Company paid approximately $4.4 million, $3.5 million and $7.2 million,
respectively, to PPG Industries, Inc. for painting materials used in the Company’s manufacturing processes. The Company’s
Chairman, President and Chief Executive Officer is currently a member of the board of directors of PPG Industries, Inc.

During 2019, 2018 and 2017, the Company paid approximately $6.2 million, $1.6 million and $1.5 million,
respectively, to Linde PLC (the parent company of Praxair, Inc.) for propane, gas and welding, and laser consumables used in
the Company’s manufacturing processes. The Company’s Chairman, President and Chief Executive Officer served as a member
of the board of directors of Praxair, Inc. until the business combination of Praxair, Inc. and Linde AG, and is currently a
member of the board of directors of Linde PLC, the holding company for the combined business.

15.

Segment Reporting

The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement
parts. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are
based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering
expenses are generally charged to each segment based on the region and division where the expenses are incurred. As a result,
the components of income from operations for one segment may not be comparable to another segment. Segment results for the
years ended December 31, 2019, 2018 and 2017 based on the Company’s reportable segments are as follows (in millions):

Years Ended December 31,

2019
Net sales............................................................
Income (loss) from operations ..........................
Depreciation......................................................
Assets................................................................
Capital expenditures .........................................
2018
Net sales............................................................
Income (loss) from operations ..........................
Depreciation......................................................
Assets................................................................
Capital expenditures .........................................
2017
Net sales............................................................
Income from operations....................................
Depreciation......................................................
Assets................................................................
Capital expenditures .........................................

North
America

South
America

Europe/
Middle East

Asia/

Pacific/Africa Consolidated

$ 2,191.8

121.6

61.6

1,125.6

52.1

$ 2,180.1

103.1

67.6

1,032.1

43.3

802.2
(39.4)
32.4

758.0

32.9

959.0
(10.1)
30.5

736.1

30.4

5,328.8

718.6

9,041.4

638.2

102.7

2,187.7

173.5

43.4

14.2

430.2

14.9

763.8

210.9

4,501.5

273.4

5,385.1

827.8

9,352.0

601.1

111.3

1,905.8

120.3

49.6

15.8

501.1

9.3

743.7

225.2

4,175.1

203.3

$ 1,876.7

$ 1,063.5

4,614.3

752.0

8,306.5

66.9

61.5

1,064.1

59.1

15.4

30.5

752.1

43.0

493.3

113.0

2,074.4

92.9

48.8

17.8

499.4

8.9

624.4

222.8

4,390.0

203.9

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A reconciliation from the segment information to the consolidated balances for income from operations and total

assets is set forth below (in millions):

Segment income from operations ....................................................... $
Corporate expenses .............................................................................
Impairment charges.............................................................................
Amortization of intangibles ................................................................
Stock compensation expense ..............................................................
Restructuring expenses .......................................................................
Consolidated income from operations ................................................ $

Segment assets .................................................................................... $
Cash and cash equivalents...................................................................
Investments in affiliates ......................................................................
Deferred tax assets, other current and noncurrent assets ....................
Intangible assets, net ...........................................................................
Goodwill..............................................................................................
Consolidated total assets ..................................................................... $

2019

2018

2017

763.8
(129.0)
(176.6)
(61.1)
(40.0)
(9.0)
348.1

4,501.5

432.8

380.2

645.2
501.7

743.7
(133.7)
—
(64.7)
(44.3)
(12.0)
489.0

4,175.1

326.1

400.0

656.6
573.1

1,298.3

1,495.5

7,759.7

7,626.4

624.4
(116.2)
—
(57.0)
(35.6)
(11.2)
404.4

4,390.0

367.7

409.0

614.6
649.0

1,541.4

7,971.7

Property, plant and equipment and amortizable intangible assets by country as of December 31, 2019 and 2018 was as

follows (in millions):

United States....................................................................................................................... $
Germany .............................................................................................................................
Brazil...................................................................................................................................
Finland ................................................................................................................................
China...................................................................................................................................
Denmark .............................................................................................................................
Italy .....................................................................................................................................
France .................................................................................................................................
Other ...................................................................................................................................

2019

2018

550.2
384.5
184.3
142.5
98.1
97.2
109.7
92.5
172.8
1,831.8

593.6
371.5
187.7
130.0
109.4
108.7
115.1
75.6
167.7
1,859.3

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16. REVENUE

Contract Liabilities

Contract liabilities relate to the following: (1) unrecognized revenues where advance payment of consideration

precedes the Company’s performance with respect to extended warranty contracts and where the performance obligation is
satisfied over time, (2) unrecognized revenues where advance payment of consideration precedes the Company’s performance
with respect to certain grain storage and protein production systems and where the performance obligation is satisfied over time
and (3) unrecognized revenues where advance payment consideration precedes the Company’s performance with respect to
technology services and where the performance obligation is satisfied over time.

Significant changes in the balance of contract liabilities for the years ended December 31, 2019 and 2018 were as

follows (in millions):

Balance at beginning of period..........................................................................
Advance consideration received........................................................................
Revenue recognized during the period for extended warranty contracts ..........
Revenue recognized during the period related to installation of grain storage
and protein production systems .........................................................................
Foreign currency translation..............................................................................
Balance as of December 31, 2019 .....................................................................

____________________________________
(1) The beginning of the period is from the date of adoption of ASU 2014-09 or January 1, 2018.

Year Ended
December 31, 2019

Year Ended
December 31, 2018(1)
82.6
$

76.8

147.7
(33.8)

(87.4)
0.7

104.0

124.9
(29.0)

(100.9)
(0.8)
76.8

The contract liabilities are classified as either “Other current liabilities” and "Other noncurrent liabilities" or

“Accrued expenses” in the Company’s Consolidated Balance Sheets.

Remaining Performance Obligations

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied

(or partially unsatisfied) as of December 31, 2019 are $37.7 million in 2020, $27.4 million in 2021, $16.2 million in 2022,
$8.2 million in 2023 and $2.2 million thereafter, and relate primarily to extended warranty contracts. The Company applied the
practical expedient in ASU 2014-09 and has not disclosed information about remaining performance obligations that have
original expected durations of 12 months or less.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Disaggregated Revenue

Net sales for the year ended December 31, 2019 disaggregated by primary geographical markets and major products

consisted of the following (in millions):

North
America

South
America

Europe/
Middle East

Asia/

Pacific/Africa Consolidated

Primary geographical markets:

United States.......................................
Canada ................................................
Germany .............................................
France .................................................
United Kingdom and Ireland ..............
Finland and Scandinavia.....................
Other Europe.......................................
South America ....................................
Middle East and Algeria .....................
Africa ..................................................
Asia .....................................................
Australia and New Zealand ................
Mexico, Central America and
Caribbean............................................

Major products:

Tractors ...............................................
Replacement parts...............................
Grain storage and protein production
systems................................................
Other machinery .................................

1,799.7

— $

289.7

—

—
—

—

789.7
—

—

102.4

12.5

— $

—

1,194.3

1,097.6

561.9

772.8

1,629.0

—
73.2

—

— $

—

—
—

116.2

344.7

257.7

—

2,191.8

802.2

5,328.8

718.6

662.4

447.7

3,772.0

300.6

310.2

547.9

671.3

88.2

79.5

186.8

874.8

172.8

509.2

74.6

234.6

108.8

2,191.8

802.2

5,328.8

718.6

1,799.7

289.7

1,194.3

1,097.6

561.9

772.8

1,629.0

789.7
73.2

116.2

344.7

257.7

114.9

9,041.4

5,182.7

1,347.8

1,034.8

1,476.1

9,041.4

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Net sales for the year ended December 31, 2018 disaggregated by primary geographical markets and major products

consisted of the following (in millions):

North
America

South
America

Europe/
Middle East(1)

Asia/

Pacific/Africa Consolidated(1)

Primary geographical markets:

United States ....................................
Canada ..............................................
Germany ...........................................
France ...............................................
United Kingdom and Ireland............
Finland and Scandinavia ..................
Other Europe ....................................
South America..................................
Middle East and Algeria...................
Africa................................................
Asia...................................................
Australia and New Zealand ..............
Mexico, Central America and
Caribbean .........................................

Major products:

Tractors.............................................
Replacement parts ............................
Grain storage and protein
production systems...........................
Other machinery ...............................

1,723.6

— $

329.0

—

—
—

—

943.1

—

—
—

—

127.5

15.9

— $

—

1,213.6

1,002.9

614.4

826.5

1,627.8

—

100.0

—
—

—

— $

—

135.5
414.5

277.8

—

2,180.1

959.0

5,385.1

827.8

665.8

599.1

3,743.0

353.2

298.7

570.3

645.3

91.0

70.1

198.8

880.3

187.6

574.3

76.0

285.5

113.1

2,180.1

959.0

5,385.1

827.8

1,723.6

329.0

1,213.6

1,002.9

614.4

826.5

1,627.8

943.1

100.0

135.5
414.5

277.8

143.4

9,352.0

5,361.1

1,346.0

1,113.5

1,531.5

9,352.0

___________________________________
(1) Rounding may impact summation of amounts.

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Net sales for the year ended December 31, 2017 disaggregated by primary geographical markets and major products

consisted of the following (in millions):

Primary geographical markets:

United States.....................................
Canada ..............................................
Germany ...........................................
France ...............................................
United Kingdom and Ireland ............
Finland and Scandinavia...................
Other Europe.....................................
South America ..................................
Middle East and Algeria ...................
Africa ................................................
Asia ...................................................
Australia and New Zealand ..............
Mexico, Central America and
Caribbean..........................................

Major products:

Tractors .............................................
Replacement parts.............................
Grain storage and protein
production systems ...........................
Other machinery ...............................

North
America(1)

South
America

Europe/
Middle East

Asia/

Pacific/Africa(1) Consolidated

1,445.7

— $

1,445.7

296.9

—

—
—

—

1,039.2

—

—
—

—

134.2

24.3

—

997.4

815.7

512.6

721.3

1,396.0

—

171.3

—
—

—

138.1
366.4

247.4

—

1,876.7

1,063.5

4,614.3

752.0

624.8

673.5

3,149.7

337.2

287.0

537.2

427.7

108.4

72.9

208.7

835.3

182.9

446.4

74.3

256.6

83.9

296.9

997.4

815.7

512.6

721.3

1,396.0

1,039.2

171.3

138.1
366.4

247.4

158.5

8,306.5

4,785.2

1,305.0

1,049.6

1,166.7

8,306.5

___________________________________
(1) Rounding may impact summation of amounts.

1,876.7

1,063.5

4,614.3

752.0

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

17.

LEASES

The Company leases certain land, buildings, machinery, equipment, vehicles and office and computer equipment under
finance and operating leases. As previously discussed in Note 1, the Company adopted ASU 2016-02 effective January 1, 2019.
Under the new standard, lessees are required to record an asset (ROU asset or finance lease asset) and a lease liability. The new
standard continues to allow for two types of leases for income statement recognition purposes: operating leases and finance
leases. Operating leases result in the recognition of a single lease expense on a straight-line basis over the lease term, similar to
the treatment for operating leases under previous U.S. GAAP. Finance leases result in an accelerated expense also similar to
previous U.S. GAAP. ASU 2016-02 also contains amended guidance regarding the identification of embedded leases in service
and supply contracts, as well as the identification of lease and nonlease components of an arrangement. ROU assets represent
the Company’s right to use an underlying asset for the lease term while lease liabilities represent the Company’s obligation to
make lease payments for the lease term. All leases greater than 12 months result in the recognition of an ROU asset and liability
at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the
lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based
on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company
estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated using the currency
denomination of the lease, the contractual lease term and the Company’s applicable borrowing rate.

The Company does not recognize a ROU asset or lease liability with respect to operating leases with an initial term of
12 months or less and recognizes expense on such leases on a straight-line basis over the lease term. The Company accounts for
lease components separately from nonlease components other than for real estate and office equipment. The Company
evaluated its supplier agreements for the existence of leases and determined these leases comprised an insignificant portion of
its supplier agreements. As such, these leases were not material to the Company’s Consolidated Balance Sheets. The Company
has certain leases that include one or more options to renew, with renewal terms that can extend the lease term from six months
to 10 years. The exercise of the lease renewal options is at the Company’s discretion and are included in the determination of
the ROU asset and lease liability when the option is reasonably certain of being exercised. The depreciable life of ROU assets
and leasehold improvements are limited by the expected lease term. The Company has certain lease agreements that include
variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable
government authority. Generally, the Company’s lease agreements do not contain any residual value guarantees or restrictive
covenants.

Total lease assets and liabilities at December 31, 2019 were as follows (in millions):

Lease Assets
Operating ROU assets ........................................................ Right-of-use lease assets
Finance lease assets ............................................................ Property, plant and equipment, net(1)

Classification

Total leased assets .......................................................

As of December 31, 2019

187.3

19.1

206.4

Lease Liabilities

Current:

Classification

As of December 31, 2019

Operating.......................................................................... Accrued expenses
Finance............................................................................. Other current liabilities

Noncurrent:

Operating.......................................................................... Operating lease liabilities
Finance............................................................................. Other noncurrent liabilities

Total leased liabilities..................................................

____________________________________
(1) Finance lease assets are recorded net of accumulated depreciation of $15.2 million as of December 31, 2019.

42.3

4.5

148.6

12.0

207.4

100

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Total lease cost for 2019 is set forth below (in millions):

Operating lease cost .................................................................................

Variable lease cost ....................................................................................

Short-term lease cost ................................................................................
Finance lease cost:

Classification

Selling, general and
administrative expenses
Selling, general and
administrative expenses
Selling, general and
administrative expenses

Amortization of leased assets................................................................. Depreciation expense(1)
Interest on leased liabilities....................................................................
Total lease cost .........................................................................................

Interest expense, net

____________________________________

(1) Depreciation expense was included in both cost of sales and selling, general and administrative expenses.

Year Ended
December 31, 2019

55.0

0.6

8.1

4.7

0.7

69.1

The total lease expense under noncancelable operating leases was approximately $72.1 million for the year ended

December 31, 2018.

The aggregate future minimum lease payments under noncancelable operating and finance leases with remaining terms

greater than one year as of December 31, 2019 were as follows (in millions):

December 31, 2019

Operating
Leases(1)

Finance Leases

2020 ...................................................................................................................................
2021 ...................................................................................................................................
2022 ...................................................................................................................................
2023 ...................................................................................................................................
2024 ...................................................................................................................................
Thereafter ..........................................................................................................................
Total lease payments..........................................................................................................
Less: imputed interest(2) ..................................................................................................
Present value of leased liabilities ......................................................................................

48.3

40.8

31.5

24.1

16.7

61.6

223.0
(32.1)
190.9

____________________________________

(1) Operating lease payments include $11.4 million related to options to extend leases that are reasonably certain of being exercised.
(2) Calculated using the implicit interest rate for each lease.

4.8

2.7

1.2

0.9

0.6

8.7

18.9
(2.4)
16.5

101

AGCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The aggregate future minimum lease payments under noncancelable operating and finance leases with remaining terms

greater than one year as of December 31, 2018 were as follows (in millions):

December 31, 2018

Operating
Leases(2)

Finance
Leases(2)

2019 ...................................................................................................................................
2020 ...................................................................................................................................
2021 ...................................................................................................................................
2022 ...................................................................................................................................
2023 ...................................................................................................................................
Thereafter ..........................................................................................................................
Total lease payments..........................................................................................................
Less: imputed interest(1) ..................................................................................................
Present value of leased liabilities ......................................................................................

46.7

39.5

32.6

26.0

21.7

85.5

252.0

—

252.0

____________________________________

(1) Imputed interest for operating leases as of December 31, 2018 is not applicable as the Company adopted ASC 842 on January 1, 2019.
(2) As determined under ASC 840, “Leases.”

4.5

4.4

2.2

0.9

0.6

5.0

17.6
(2.1)
15.5

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate:

Weighted-average remaining lease term:

Operating leases..............................................................................................................................
Finance leases .................................................................................................................................

Weighted-average discount rate:

As of December 31, 2019

14 years

7 years

4.1%

2.9%

The following table summarizes the supplemental cash flow information for 2019 (in millions):

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases...................................................................................
Operating cash flows from finance leases ......................................................................................
Financing cash flows from finance leases ......................................................................................

Leased assets obtained in exchange for lease obligations:

Year Ended
December 31, 2019

51.9

0.6

5.3

34.8

1.5

102

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, does not expect
that the Company’s disclosure controls or the Company’s internal controls will prevent all errors and all fraud. However, our
principal executive officer and principal financial officer have concluded the Company’s disclosure controls and procedures are
effective at the reasonable assurance level. A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system
must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in a cost effective control
system, misstatements due to error or fraud may occur and not be detected. We will conduct periodic evaluations of our internal
controls to enhance, where necessary, our procedures and controls.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls

and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of
December 31, 2019, have concluded that, as of such date, our disclosure controls and procedures were effective at the
reasonable assurance level. Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining effective internal control over financial

reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over
financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors
regarding the preparation and fair presentation of published financial statements for external purposes in accordance with
generally accepted accounting principles. In assessing the effectiveness of the Company’s internal control over financial
reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in “Internal Control — Integrated Framework (2013).”

Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2019. Based on this assessment, management believes that, as of December 31, 2019, the Company’s internal
control over financial reporting is effective based on the criteria referred to above.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 has been

audited by KPMG LLP, an independent registered public accounting firm, which also audited the Company’s Consolidated
Financial Statements as of and for the year ended December 31, 2019. KPMG LLP’s report on internal control over financial
reporting is set forth below.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, as
a result of the Company’s processes to comply with the Sarbanes-Oxley Act of 2002, enhancements to the Company’s internal
control over financial reporting were implemented as management addressed and remediated deficiencies that had been
identified.

103

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
AGCO Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited AGCO Corporation and subsidiaries’ (the Company) internal control over financial reporting as of

December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control —
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated
statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-
year period ended December 31, 2019, and the related notes and financial statement schedule II — Valuation and Qualifying
Accounts (collectively, the consolidated financial statements), and our report dated February 28, 2020 expressed an unqualified
opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for

its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Atlanta, Georgia
February 28, 2020

104

Item 9B.

Other Information

None.

PART III

The information called for by Items 10, 11, 12, 13 and 14, if any, will be contained in our Proxy Statement for the

2020 Annual Meeting of Stockholders, which we intend to file in March 2020.

Item 10

Directors, Executive Officers and Corporate Governance

The information with respect to directors and committees required by this Item set forth in our Proxy Statement for the

2020 Annual Meeting of Stockholders in the sections entitled Proposal Number 1 “Election of Directors” and “Board of
Directors and Corporate Governance” is incorporated herein by reference. The information with respect to executive officers
required by this Item set forth in our Proxy Statement for the 2020 Annual Meeting of Stockholders in the section entitled
“Executive Compensation” is incorporated herein by reference.

See the information under the heading “Available Information” set forth in Part I of this Form 10-K. The code of

conduct referenced therein applies to our principal executive officer, principal financial officer, principal accounting officer and
controller and the persons performing similar functions.

Item 11.

Executive Compensation

The information with respect to executive compensation and its establishment required by this Item set forth in our

Proxy Statement for the 2020 Annual Meeting of Stockholders in the sections entitled “Board of Directors and Corporate
Governance,” “2019 CEO Pay Ratio,” “Executive Compensation” and “Compensation Committee Report” is incorporated
herein by reference.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a) Securities Authorized for Issuance Under Equity Compensation Plans

AGCO maintains its Plan pursuant to which we may grant equity awards to eligible persons. For additional
information, see Note 10, “Stock Incentive Plan,” in the Notes to Consolidated Financial Statements included in this filing.
The following table gives information about equity awards under our Plan.

Plan Category
Equity compensation plans approved by

security holders ......................................

Equity compensation plans not approved

by security holders

.................................
Total .............................................................

(a)

(b)

(c)

Number of Securities
to be Issued
upon Exercise
of Outstanding
Awards Under the
Plans

Weighted-Average
Exercise Price
of Outstanding
Awards Under
the Plans

Number of Securities
Remaining Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities Reflected
in Column (a)

2,088,386

—
2,088,386

63.29

—
63.29

3,581,614

—
3,581,614

(b) Security Ownership of Certain Beneficial Owners and Management

The information required by this Item set forth in our Proxy Statement for the 2020 Annual Meeting of Stockholders

in the section entitled “Principal Holders of Common Stock” is incorporated herein by reference.

Item 13.

Certain Relationships and Related Party Transactions, and Director Independence

The information required by this Item set forth in our Proxy Statement for the 2020 Annual Meeting of Stockholders

in the section entitled “Certain Relationships and Related Party Transactions” is incorporated herein by reference.

105

Item 14.

Principal Accounting Fees and Services

The information required by this Item set forth in our 2020 Proxy Statement for the Annual Meeting of Stockholders
in the sections entitled “Audit Committee Report” and “Board of Directors and Corporate Governance” is incorporated herein
by reference.

Item 15.

Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Form 10-K:

PART IV

(1) The Consolidated Financial Statements, Notes to Consolidated Financial Statements, Report of Independent Registered

Public Accounting Firm for AGCO Corporation and its subsidiaries are presented under Item 8 of this Form 10-K.

(2) Financial Statement Schedules:

The following Consolidated Financial Statement Schedule of AGCO Corporation and its subsidiaries is included

herein and follows this report.

Schedule
Schedule II

Description
Valuation and Qualifying Accounts

Schedules other than that listed above have been omitted because the required information is contained in Notes to the

Consolidated Financial Statements or because such schedules are not required or are not applicable.

(3) The following exhibits are filed or incorporated by reference as part of this report. Each management contract or

compensation plan required to be filed as an exhibit is identified by an asterisk (*). The exhibits below may not include all
instruments defining the rights of holders of long-term debt where the debt does not exceed 10% of the Company’s total assets.
The Company agrees to furnish copies of those instruments to the Commission upon request.

Exhibit
Number
3.1

3.2

4.1

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

Description of Exhibit

Certificate of Incorporation

Amended and Restated By-Laws

Description of Securities

2006 Long-Term Incentive Plan*

2006 Form of Non-Qualified Stock Option Award
Agreement*

2006 Form of Incentive Stock Option Award
Agreement*
2006 Form of Stock Appreciation Rights Agreement*

The Filings Referenced for
Incorporation by Reference are
AGCO Corporation

June 30, 2002, Form 10-Q, Exhibit 3.1

April 26, 2019, Form 8-K, Exhibit 3.1

Filed herewith
September 30, 2017, Form 10-Q, Exhibit 10.5

March 31, 2006, Form 10-Q, Exhibit 10.2

March 31, 2006, Form 10-Q, Exhibit 10.3

March 31, 2006, Form 10-Q, Exhibit 10.4

2019 Form of Stock Appreciation Rights Agreement*

January 22, 2019, Form 8-K, Exhibit 10.2

2016 Form of Restricted Stock Units Agreement*

January 27, 2016, Form 8-K, Exhibit 10.1

2018 Form of Restricted Stock Units Agreement*

June 30, 2018, Form 10-Q, Exhibit 10.1

2019 Form of Restricted Stock Units Agreement*

January 22, 2019, Form 8-K, Exhibit 10.1

2006 Form of Performance Share Award*

March 31, 2006, Form 10-Q, Exhibit 10.6

2019 Form of Performance Share Agreement*

January 22, 2019, Form 8-K, Exhibit 10.3

Amended and Restated Management Incentive
Program*

Amended and Restated Executive Nonqualified Pension
Plan*

June 30, 2019, Form 10-Q, Exhibit 10.3

June 30, 2019, Form 10-Q, Exhibit 10.2

Executive Nonqualified Defined Contribution Plan*

December 31, 2015, Form 10-K, Exhibit 10.9

Employment and Severance Agreement with Martin
Richenhagen*

December 31, 2009, Form 10-K, Exhibit 10.12

106

Exhibit
Number
10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30
21.1

23.1

24.1

31.1

31.2

32.1

Description of Exhibit
Employment and Severance Agreement with Andrew H.
Beck*

Employment and Severance Agreement with Eric P.
Hansotia*

Employment and Severance Agreement with Robert B.
Crain*
Employment and Severance Agreement with Rob
Smith*

Employment and Severance Agreement with Hans-
Bernd Veltmaat*

The Filings Referenced for
Incorporation by Reference are
AGCO Corporation

March 31, 2010, Form 10-Q, Exhibit 10.2

December 31, 2018, Form 10-K, Exhibit 10.16

December 31, 2017, Form 10-K, Exhibit 10.13

December 31, 2015, Form 10-K, Exhibit 10.13

December 31, 2009, Form 10-K, Exhibit 10.17

Debt Agreement dated December 18, 2014

December 31, 2014, Form 10-K, Exhibit 10.15

Credit Agreement dated as of October 17, 2018

September 30, 2018, Form 10-Q, Exhibit 10.1

Letter Agreement, dated November 5, 2015, between
AGCO International GmbH and TAFE International
LLC, Turkey and Tractors and Farm Equipment Limited

Amended and Restated Letter Agreement, dated April
24, 2019, between AGCO Corporation and Tractors and
Farm Equipment Limited

Farm and Machinery Distributor Agreement, dated
January 1, 2012, between AGCO International GmbH
and Tractors and Farm Equipment Limited

Letter Agreement, dated August 3, 2007, between AGCO
Corporation and Tractors and Farm Equipment Limited

Letter Agreement for Far East Markets, dated July 24,
2017, between AGCO International GmbH and Tractors
and Farm Equipment Limited

Letter Agreement for Mexico, dated July 24, 2017,
between AGCO International GmbH and Tractors and
Farm Equipment Limited

Letter Agreement for Australia/New Zealand, dated July
24, 2017, between AGCO International GmbH and
Tractors and Farm Equipment Limited

Amendment to the Letter Agreement for Africa, dated
July 24, 2017, between AGCO International GmbH and
Tractors and Farm Equipment Limited

Current Director Compensation*
Subsidiaries of the Registrant

Consent of KPMG LLP

Powers of Attorney

Certification of Martin Richenhagen

Certification of Andrew H. Beck

Certification of Martin Richenhagen and Andrew H.
Beck

September 30, 2015, Form 10-Q, Exhibit 10.1

March 31, 2019, Form 10-Q, Exhibit 10.1

September 4, 2014, Form 8-K, Exhibit 10.2

September 4, 2014, Form 8-K, Exhibit 10.3

July 27, 2017, Form 8-K, Exhibit 10.1

July 27, 2017, Form 8-K, Exhibit 10.2

July 27, 2017, Form 8-K, Exhibit 10.3

July 27, 2017, Form 8-K, Exhibit 10.4

Filed herewith
Filed herewith

Filed herewith

107

Exhibit
Number
101

Description of Exhibit

The following audited financial information from this
Annual Report on Form 10-K for the year ended
December 31, 2019, are formatted in Inline XBRL:
(i) Consolidated Statements of Operations,
(ii) Consolidated Statements of Comprehensive Income,
(iii) Consolidated Balance Sheets,
(iv) Consolidated Statements of Stockholders' Equity,
(v) Consolidated Statements of Cash Flows and
(vi) Notes to Consolidated Financial Statements.

The Filings Referenced for
Incorporation by Reference are
AGCO Corporation

Filed herewith

104

Cover Page Interactive Data File - the cover page from
this Annual Report on Form 10-K for the year ended
December 31, 2019 is formatted in Inline XBRL

Filed herewith

Item 16.

Form 10-K Summary

None.

108

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

AGCO Corporation

By:

/s/ MARTIN RICHENHAGEN
Martin Richenhagen
Chairman of the Board, President
and Chief Executive Officer

Dated: February 28, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant in the capacities and on the date indicated.

Signature

Title

Chairman of the Board, President and Chief
Executive Officer

Date
February 28, 2020

Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

February 28, 2020

Vice President, Chief Accounting Officer
(Principal Accounting Officer)

February 28, 2020

/s/ MARTIN RICHENHAGEN

Martin Richenhagen

/s/ ANDREW H. BECK

Andrew H. Beck

/s/ LARA T. LONG

Lara T. Long

/s/ ROY V. ARMES *

Roy V. Armes

/s/ MICHAEL C. ARNOLD *

Michael C. Arnold

/s/ SONDRA L. BARBOUR *

Sondra L. Barbour

/s/ P. GEORGE BENSON *

P. George Benson

/s/ SUZANNE P. CLARK *

Suzanne P. Clark

/s/ WOLFGANG DEML *

Wolfgang Deml

/s/ GEORGE E. MINNICH *

George E. Minnich

/s/ GERALD L. SHAHEEN *

Gerald L. Shaheen

/s/ MALLIKA SRINIVASAN *

Mallika Srinivasan

/s/ HENDRIKUS VISSER *

Hendrikus Visser

*By:

/s/ ANDREW H. BECK
Andrew H. Beck
Attorney-in-Fact

109

Director

February 28, 2020

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AGCO CORPORATION AND SUBSIDIARIES

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(in millions)

SCHEDULE II

Description
Year ended December 31, 2019

Additions

Balance at
Beginning
of Period

Acquired
Businesses

Charged to
Costs and
Expenses

Deductions

Foreign
Currency
Translation

Balance at
End of
Period

Allowances for doubtful accounts ..............

Year ended December 31, 2018

Allowances for doubtful accounts ..............

Year ended December 31, 2017

Allowances for doubtful accounts ..............

31.7

38.7

33.7

5.8

6.4

4.6

(8.3) $

(0.4) $

28.8

(11.4) $

(2.0) $

31.7

(3.8) $

2.0

38.7

— $

2.2

Additions

Description
Year ended December 31, 2019

Balance at
Beginning
of Period

Charged to
Costs and
Expenses

Reversal of
Accrual

Deductions

Foreign
Currency
Translation

Balance at
End of
Period

Accruals of severance, relocation and
other integration costs.................................

Year ended December 31, 2018

Accruals of severance, relocation and
other integration costs.................................

Year ended December 31, 2017

Accruals of severance, relocation and
other integration costs.................................

7.1

6.1

(0.7) $

(7.3) $

(0.4) $

4.8

10.9

13.8

(2.1) $

(14.4) $

(1.1) $

7.1

15.3

12.4

(1.4) $

(16.8) $

1.4

10.9

Additions

Balance at
Beginning
of Period

Acquired
Businesses

Charged
(Credited)
to
Costs and
Expenses(1)

Deductions

Foreign
Currency
Translation

Balance at
End of
Period

Description
Year ended December 31, 2019

Deferred tax valuation allowance ...............

Year ended December 31, 2018

Deferred tax valuation allowance ...............

Year ended December 31, 2017

Deferred tax valuation allowance ...............

83.9

81.9

116.0

— $

87.1

— $

6.3

— $

(1.9) $

169.1

— $

(4.3) $

83.9

— $

(38.4) $

— $

4.3

81.9

(1) Amounts (credited) charged through other comprehensive income during the years ended December 31, 2019 and 2018 were $(2.5) million
and $18.3 million, respectively.

II-1

[THIS PAGE INTENTIONALLY LEFT BLANK]

OUR LEADERSHIP

BOARD OF DIRECTORS

ROY V. ARMES
Former Executive Chairman,
President and CEO
Cooper Tire and Rubber Company

P. GEORGE BENSON
Professor of Decision Sciences
and former President
College of Charleston

GEORGE E. MINNICH
Former Senior
Vice President and CFO
ITT Corporation

MALLIKA SRINIVASAN
Chairman and Managing Director
Tractors and Farm
Equipment Limited (TAFE)

MICHAEL C. ARNOLD
Former President and CEO
Ryerson Inc.

SUZANNE P. CLARK
President
U.S. Chamber of Commerce

MARTIN H. RICHENHAGEN
Chairman, President and
Chief Executive Officer

HENDRIKUS VISSER
Former Chairman
Royal Huisman Shipyards N.V.

SONDRA L. BARBOUR
Former Executive Vice President
Lockheed Martin Corporation

WOLFGANG DEML
Former President and
Chief Executive Officer
BayWa Corporation

GERALD L. SHAHEEN
Former Group President
Caterpillar Inc.

SENIOR MANAGEMENT

BRADLEY C. ARNOLD
Senior Vice President,
Global Crop Cycle and
Fuse Connected Services

ROGER N. BATKIN
Senior Vice President,
General Counsel and
Corporate Secretary

ANDREW H. BECK
Senior Vice President,
Chief Financial Officer

STEFAN CASPARI
Senior Vice President,
General Manager,
Grain and Protein

GARY L. COLLAR
Senior Vice President,
General Manager,
Asia/Pacific/Africa

ROBERT B. CRAIN
Senior Vice President,
General Manager,
North America

TORSTEN R.W. DEHNER
Senior Vice President,
General Manager,
Europe/Middle East

HELMUT R. ENDRES
Senior Vice President,
Engineering

LUÍS F.S. FELLI
Senior Vice President,
General Manager,
South America

ERIC P. HANSOTIA
Senior Vice President,
Chief Operating Officer

MARTIN H. RICHENHAGEN
Chairman, President and
Chief Executive Officer

LUCINDA B. SMITH
Senior Vice President,
Global Business Services

JOSIP T. TOMASEVIC
Senior Vice President,
Chief Procurement Officer

HANS-BERND VELTMAAT
Senior Vice President,
Chief Supply Chain Officer

SHAREHOLDER INFORMATION

CORPORATE HEADQUARTERS
4205 River Green Parkway
Duluth, Georgia 30096 U.S.
+1-770-813-9200

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 U.S.

TRANSFER AGENT & REGISTRAR
You can contact Computershare
through the following methods:

Overnight Mail Delivery
462 South 4th Street, Suite 1600
Louisville, KY 40202 U.S.

Regular Mail Delivery
P.O. Box 505000
Louisville, KY 40233 U.S.

Telephone
+1-800-962-4284

FORM 10-K
The Form 10-K Annual Report filed
with the Securities and Exchange
Commission is available in the
“Investors” Section of our corporate
website (www.agcocorp.com), under
the heading “SEC Filings,” or upon
request from the Investor Relations
Department at our corporate
headquarters.

ANNUAL MEETING
The annual meeting of the Company’s
stockholders will be held at 9:00 a.m.
ET on April 30, 2020, at the offices of
AGCO Corporation, 4205 River Green
Parkway, Duluth, Georgia 30096 U.S.

© 2020 AGCO Corporation
All rights reserved. Incorporated in Delaware. An Equal Opportunity Employer. AGCO,® Fendt,® GSI,® 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.

4205 River Green Parkway, Duluth, Georgia 30096 U.S.

+1-770-813-9200 · www.agcocorp.com

A R 2019.AGCOCORP.COM

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