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AGCO Reports Third Quarter Results



  AGCO Reports Third Quarter Results

               Higher Sales and Margins Produce Record Earnings

Business Wire

DULUTH, Ga. -- October 29, 2013

AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide manufacturer and
distributor of agricultural equipment, reported net sales of approximately
$2.5 billion during the third quarter of 2013, an increase of approximately
7.9% compared to net sales of $2.3 billion for the third quarter of 2012. Net
income for the third quarter of 2013 was $1.27 per share. These results
compare to net income of $0.96 per share for the third quarter of 2012.
Excluding the unfavorable currency translation impact of approximately 1.8%,
net sales in the third quarter of 2013 increased approximately 9.7% compared
to the third quarter of 2012.

Net sales for the first nine months of 2013 were approximately $7.9 billion,
an increase of approximately 9.2% compared to the same period in 2012. For the
first nine months of 2013, net income was $4.61 per share. This result
compares to net income of $4.25 per share for the first nine months of 2012.
Excluding the unfavorable impact of currency translation of approximately
1.6%, net sales for the first nine months of 2013 increased approximately
10.8% compared to the same period in 2012.

Third Quarter Highlights

  * Strong sales growth in South America and Asia/Pacific. Regional sales
    results^(1): South America +35%; Asia/Pacific (“APAC”) +11%; North America
    +9%; Europe/Africa/ Middle East (“EAME”) (2)%;
  * Operating margins reached 8.0% in the third quarter of 2013, a 190 basis
    point improvement vs the third quarter of 2012. Regional operating margin
    performance: North America 11.4%, EAME 9.1%, South America 12.6%, APAC
    (2.0)%
  * Full-year Earning Per Share guidance remains at approximately $6.00 per
    share
  * Launched new Global Precision Farming Initiative: Fuse™ Technologies
    (announced in July,
    http://www.agcocorp.com/news/media_press_releases.aspx)
  * Announced joint venture with Russian Machines to manufacture and
    distribute agricultural equipment and replacement parts in Russia
    (announced in September,
    http://www.agcocorp.com/news/media_press_releases.aspx)

^(1)Excludes currency translation impact. See reconciliation of Non-GAAP
measures in appendix.

“Attractive farm economics are supporting global demand for agricultural
equipment, and our third quarter sales reflected this,” stated Martin
Richenhagen, Chairman, President and Chief Executive Officer. “AGCO’s focused
execution in the third quarter produced improved operating margins and record
earnings. Increased sales and production levels, modest material cost
inflation and our cost control initiatives all contributed to AGCO’s improved
results. Our profitability and our cash flow are growing while we are
aggressively investing in advanced technology and emerging markets. In the
third quarter, our strategic investments included the launch of Fuse™
Technologies and our new joint venture with Russian Machines.”

Market Update

Industry Unit Retail Sales

                                   Tractors                       Combines
                                   Change from                    Change from
Nine months                        Prior Year                     Prior Year
ended September                    Period                         Period
30, 2013
                                                                   
North America                      12%                            12%
South America                      22%                            50%
Western Europe                     (2)%                           (4)%

“Global demand for farm equipment remained elevated during the third quarter
as harvests were well underway in the Northern Hemisphere,” stated Mr.
Richenhagen. “Improved yields in North America and the expectation of near
record farm income supported strong industry sales. Healthy crop production
supported demand in France and Germany, while less favorable crop conditions
negatively impacted demand in the United Kingdom and parts of Northern Europe.
In Brazil, favorable soft commodity prices, improved crop production and
supportive government financing programs are all contributing to high levels
of demand for farm equipment. Our long-term industry outlook remains very
positive with an expected increase in global grain consumption driven by the
world’s growing population and a shift towards more protein heavy diets.
Higher grain consumption and lower inventory levels should support healthy
commodity prices and farm income, which are key factors influencing demand in
our industry.”

Regional Results

AGCO Regional Net Sales (in millions)

                                                                % change from
                                                                2012 due to
                                                     Change     currency
                                                     from
                           2013          2012        2012       translation^(1)
                                                                 
Three months ended
September 30
North America            $ 686.6       $ 632.2       8.6  %     (0.5      )%
South America              572.3         479.9       19.3 %     (15.6     )%
Europe/Africa/Middle       1,086.4       1,060.5     2.4  %     4.0       %
East
Asia/Pacific               130.6         122.4       6.7  %     (4.3      )%
Total                    $ 2,475.9     $ 2,295.0     7.9  %     (1.8      )%
Nine months ended
September 30
North America            $ 2,099.7     $ 1,932.1     8.7  %     (0.2      )%
South America              1,578.0       1,343.8     17.4 %     (12.5     )%
Europe/Africa/Middle       3,878.6       3,667.2     5.8  %     1.7       %
East
Asia/Pacific               370.9         315.7       17.5 %     (1.7      )%
Total                    $ 7,927.2     $ 7,258.8     9.2  %     (1.6      )%
^(1) See Footnotes for additional disclosure
 

North America

Net sales grew 8.9% in AGCO’s North American region during the first nine
months of 2013 compared to 2012, excluding the negative impact of currency
translation. Sales were strongest in the row crop segment, with the most
significant increases in high horsepower tractors, sprayers and implements.
Increased sales, a favorable product mix and margin improvement initiatives
contributed to growth in income from operations of $65.9 million for the first
nine months of 2013 compared to the same period in 2012.

South America

South American net sales grew 29.9% in the first nine months of 2013 compared
to the same period in 2012, excluding the negative impact of currency
translation. Sales were higher in both Brazil and Argentina, with growth
mainly in high horsepower tractors, combines and sprayers. Operating margins
improved to 11.4% for the first nine months of 2013 compared to 8.2% in the
same period last year due to higher sales, a richer mix of products and the
benefit of cost-reduction initiatives. Income from operations increased $69.3
million for the nine months of 2013 compared to 2012.

EAME

Net sales in AGCO’s EAME region improved by 4.1% in the first nine months of
2013 compared to the first nine months of 2012, on a constant currency basis,
despite weaker market conditions. Higher sales in France and Germany were
partially offset by declines in the United Kingdom and Central Europe. EAME’s
income from operations increased $15.5 million for the nine months of 2013
compared to 2012. The benefit of higher sales and improved efficiency at our
new Fendt tractor assembly facility was partially offset by increased
engineering expenses associated with new Tier 4 emission requirements.

Asia/Pacific

Excluding the negative impact of currency translation, net sales in the
Asia/Pacific region were 19.2% higher in the first nine months of 2013
compared to the same period in 2012. Growth in China, East Asia and Australia
produced most of the increase. Income from operations in the Asia/Pacific
region declined by $7.7 million in the first nine months of 2013 compared to
the same period in 2012. The benefit of higher sales was offset by increased
market development costs in China.

Outlook

Global industry demand is expected to be relatively flat in 2013 compared to
2012. Strong growth is projected in South America, modest growth is forecasted
in North America and modest declines are anticipated for Western Europe. AGCO
is targeting earnings per share of approximately $6.00 for the full year of
2013. Net sales are expected to range from $10.8 billion to $11.0 billion.
Gross margin improvement is expected to be partially offset by increased
market development expenses and higher engineering expenditures to meet Tier 4
final emission requirements.

“As we bring this year to a successful close, we remain focused on delivering
improved margins, earnings growth and strong free cash flow,” continued Mr.
Richenhagen. “The long-term outlook for the farming industry and for AGCO
remains compelling. We are positioning AGCO for profitable growth in the years
ahead by making strategic investments in our production facilities to improve
our efficiency and in higher technology products that will make farmers more
productive and more profitable.”

                                  * * * * *

AGCO will be hosting a conference call with respect to this earnings
announcement at 10:00 a.m. Eastern Time on Tuesday, October 29, 2013. The
Company will refer to slides on its conference call. Interested persons can
access the conference call and slide presentation via AGCO’s website at
www.agcocorp.com in the “Events” section on the “Company/Investors” page of
our website. A replay of the conference call will be available approximately
two hours after the conclusion of the conference call for twelve months
following the call. A copy of this press release will be available on AGCO’s
website for at least twelve months following the call.

                                  * * * * *

Safe Harbor Statement

Statements that are not historical facts, including the projections of
earnings per share, sales, market conditions, farm incomes and productivity,
global grain consumption, commodity prices, population levels, margin
improvements, investments in production facilities and product development,
industry demand, market development and engineering expenses, inventory
levels, cash flow levels and general economic conditions, are forward-looking
and subject to risks that could cause actual results to differ materially from
those suggested by the statements. The following are among the factors that
could cause actual results to differ materially from the results discussed in
or implied by the forward-looking statements.

  * Our financial results depend entirely upon the agricultural industry, and
    factors that adversely affect the agricultural industry generally,
    including declines in the general economy, increases in farm input costs,
    lower commodity prices, lower farm income and changes in the availability
    of credit for our retail customers, will adversely affect us.
  * 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. These risks may delay or reduce our
    realization of value from our international operations.
  * Most retail sales of the products that we manufacture are financed, either
    by our joint ventures with Rabobank or by a bank or other private lender.
    During 2013, our joint ventures with Rabobank, which are controlled by
    Rabobank and are dependent upon Rabobank for financing as well, financed
    approximately 50% of the retail sales of our tractors and combines in the
    markets where the joint ventures operate. Any difficulty by Rabobank to
    continue 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 us to find another source of retail financing for our
    customers, or our customers would be required to utilize other retail
    financing providers. As a result of the recent economic downturn,
    financing for capital equipment purchases generally has become more
    difficult in certain regions and in some cases, was 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 retail finance joint ventures have substantial account
    receivables from dealers and end customers, and we would be adversely
    impacted if the collectability of these receivables was not consistent
    with historical experience; this collectability is dependent upon the
    financial strength of the farm industry, which in turn is dependent upon
    the general economy and commodity prices, as well as several of the other
    factors listed in this section.
  * We have experienced substantial and sustained volatility with respect to
    currency exchange rate and interest rate changes, including uncertainty
    associated with the Euro, which can adversely affect our reported results
    of operations and the competitiveness of our products.
  * All acquisitions involve risks relating to retention of key employees and
    customers and fulfilling projections prepared by or at the direction of
    prior ownership. In addition, we may encounter difficulties in integrating
    recent and future acquisitions into our business and may not fully
    achieve, or achieve within a reasonable time frame, expected strategic
    objectives and other expected benefits of the acquisition.
  * Our success depends on the introduction of new products, particularly
    engines that comply with emission requirements, which requires substantial
    expenditures.
  * Our production levels and capacity constraints at our facilities,
    including those resulting from plant expansions and systems upgrades at
    our manufacturing facilities, could adversely affect our results.
  * Our expansion plans in emerging markets, including establishing a greater
    manufacturing and marketing presence and growing our use of component
    suppliers, could entail significant risks.
  * 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.
  * We face significant competition, and if we are unable to compete
    successfully against other agricultural equipment manufacturers, we would
    lose customers and our net sales and profitability would decline.
  * We have a substantial amount of indebtedness, and, as result, we are
    subject to certain restrictive covenants and payment obligations that may
    adversely affect our ability to operate and expand our business.

Further information concerning these and other factors is included in AGCO’s
filings with the Securities and Exchange Commission, including its Form 10-K
for the year ended December 31, 2012. AGCO disclaims any obligation to update
any forward-looking statements except as required by law.

                                  * * * * *

About AGCO

AGCO, Your Agriculture Company, (NYSE: AGCO), is a global leader focused on
the design, manufacture and distribution of agricultural machinery. AGCO
supports more productive farming through a full line of tractors, combines,
hay tools, sprayers, forage equipment, tillage, implements, grain storage and
protein production systems, as well as related replacement parts. AGCO
products are sold through five core machinery brands, Challenger®, Fendt®,
Massey Ferguson®, Valtra® and GSI®, and are distributed globally through 3,150
independent dealers and distributors in more than 140 countries worldwide.
Retail financing is available through AGCO Finance for qualified purchasers.
Founded in 1990, AGCO is headquartered in Duluth, Georgia, USA. In 2012, AGCO
had net sales of $10.0 billion. For more information, see
http://www.agcocorp.com.

                                  # # # # #

                Please visit our website at www.agcocorp.com.

 
 
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions)
                                                            
                                      September 30, 2013     December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents             $    620.5             $   781.3
Accounts and notes receivable,        1,182.3                924.6
net
Inventories, net                      2,181.8                1,703.1
Deferred tax assets                   209.3                  243.5
Other current assets                  310.0                  302.2          
Total current assets                  4,503.9                3,954.7
Property, plant and equipment,        1,491.4                1,406.1
net
Investment in affiliates              408.9                  390.3
Deferred tax assets                   43.3                   40.0
Other assets                          133.9                  131.2
Intangible assets, net                576.3                  607.1
Goodwill                              1,176.3                1,192.4        
Total assets                          $    8,334.0           $   7,721.8    
                                                              
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities:
Current portion of long-term debt     $    92.5              $   59.1
Convertible senior subordinated       199.0                  192.1
notes
Accounts payable                      968.5                  888.3
Accrued expenses                      1,314.5                1,226.5
Other current liabilities             167.5                  98.8           
Total current liabilities             2,742.0                2,464.8
Long-term debt, less current          1,000.6                1,035.6
portion
Pensions and postretirement           312.3                  331.6
health care benefits
Deferred tax liabilities              240.6                  242.7
Other noncurrent liabilities          168.5                  149.1          
Total liabilities                     4,464.0                4,223.8        
                                                              
Temporary Equity                      3.0                    16.5
                                                              
Stockholders’ Equity:
AGCO Corporation stockholders’
equity:
Common stock                          1.0                    1.0
Additional paid-in capital            1,105.9                1,082.9
Retained earnings                     3,272.5                2,843.7
Accumulated other comprehensive       (546.9         )       (479.4        )
loss
Total AGCO Corporation                3,832.5                3,448.2
stockholders’ equity
Noncontrolling interests              34.5                   33.3           
Total stockholders’ equity            3,867.0                3,481.5        
Total liabilities, temporary          $    8,334.0           $   7,721.8    
equity and stockholders’ equity
                                                                            
See accompanying notes to condensed consolidated financial statements.
 
 

AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
                                             
                                              Three Months Ended September 30,
                                              2013                 2012
                                                                    
Net sales                                     $  2,475.9           $  2,295.0
Cost of goods sold                            1,919.7              1,804.0
Gross profit                                  556.2                491.0
                                                                    
Selling, general and administrative           258.1                262.8
expenses
Engineering expenses                          87.3                 76.4
Amortization of intangibles                   11.8                 12.2
                                                                    
Income from operations                        199.0                139.6
                                                                    
Interest expense, net                         14.1                 15.8
Other expense, net                            11.3                 13.8
                                                                    
Income before income taxes and equity in      173.6                110.0
net earnings of affiliates
                                                                    
Income tax provision                          62.5                 30.5
                                                                    
Income before equity in net earnings of       111.1                79.5
affiliates
                                                                    
Equity in net earnings of affiliates          14.1                 12.6
                                                                    
Net income                                    125.2                92.1
                                                                    
Net loss attributable to noncontrolling       1.0                  2.4
interests
                                                                    
Net income attributable to AGCO               $  126.2             $  94.5
Corporation and subsidiaries
                                                                    
Net income per common share attributable
to AGCO Corporation and subsidiaries:
Basic                                         $  1.30              $  0.97
Diluted                                       $  1.27              $  0.96
Cash dividends declared and paid per          $  0.10              $  —
common share
                                                                    
Weighted average number of common and
common equivalent shares outstanding:
Basic                                         97.4                 97.0
Diluted                                       99.5                 98.4
                                                                    
See accompanying notes to condensed consolidated financial statements.
 
 

AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
                                              
                                               Nine Months Ended September 30,
                                               2013                 2012
                                                                     
Net sales                                      $  7,927.2           $  7,258.8
Cost of goods sold                             6,127.6              5,663.4
Gross profit                                   1,799.6              1,595.4
                                                                     
Selling, general and administrative            793.5                756.7
expenses
Engineering expenses                           266.7                227.5
Amortization of intangibles                    35.9                 36.9
                                                                     
Income from operations                         703.5                574.3
                                                                     
Interest expense, net                          40.2                 43.5
Other expense, net                             25.2                 24.3
                                                                     
Income before income taxes and equity in       638.1                506.5
net earnings of affiliates
                                                                     
Income tax provision                           219.8                131.0
                                                                     
Income before equity in net earnings of        418.3                375.5
affiliates
                                                                     
Equity in net earnings of affiliates           37.1                 39.9
                                                                     
Net income                                     455.4                415.4
                                                                     
Net loss attributable to noncontrolling        2.5                  4.2
interests
                                                                     
Net income attributable to AGCO                $  457.9             $  419.6
Corporation and subsidiaries
                                                                     
Net income per common share attributable
to AGCO Corporation and subsidiaries:
Basic                                          $  4.71              $  4.32
Diluted                                        $  4.61              $  4.25
Cash dividends declared and paid per           $  0.30              $  —
common share
                                                                     
Weighted average number of common and
common equivalent shares outstanding:
Basic                                          97.2                 97.1
Diluted                                        99.3                 98.6
                                                                     
See accompanying notes to condensed consolidated financial statements.
 
 

AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
                                              
                                               Nine Months Ended September 30,
                                               2013               2012
                                                                   
Cash flows from operating activities:
Net income                                     $  455.4           $  415.4
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation                                   153.8              125.4
Deferred debt issuance cost amortization       2.6                2.6
Amortization of intangibles                    35.9               36.9
Amortization of debt discount                  6.9                6.5
Stock compensation                             33.9               28.8
Equity in net earnings of affiliates, net      (22.5     )        (27.4     )
of cash received
Deferred income tax provision (benefit)        28.1               (1.4      )
Other                                          0.2                —
Changes in operating assets and
liabilities, net of effects from purchase
of businesses:
Accounts and notes receivable, net             (245.5    )        (132.2    )
Inventories, net                               (507.9    )        (481.5    )
Other current and noncurrent assets            (22.8     )        (38.1     )
Accounts payable                               95.3               (88.8     )
Accrued expenses                               98.0               95.6
Other current and noncurrent liabilities       57.6               25.0       
Total adjustments                              (286.4    )        (448.6    )
Net cash provided by (used in) operating       169.0              (33.2     )
activities
Cash flows from investing activities:
Purchases of property, plant and equipment     (263.8    )        (235.2    )
Proceeds from sale of property, plant and      2.9                0.6
equipment
Purchase of businesses, net of cash            (0.1      )        (2.4      )
acquired
Investments in consolidated affiliates,        —                  (20.1     )
net of cash acquired
Sale of (investments in) unconsolidated        0.1                (11.3     )
affiliates, net
Restricted cash and other                      —                  (1.0      )
Net cash used in investing activities          (260.9    )        (269.4    )
Cash flows from financing activities:
Proceeds from (payment of) debt                4.1                (89.5     )
obligations, net
Payment of debt issuance costs                 —                  (0.1      )
Purchases and retirement of common stock       (1.0      )        (9.5      )
Distribution to noncontrolling interests       (2.6      )        (0.6      )
Payment of minimum tax withholdings on         (16.3     )        (0.2      )
stock compensation
Payment of dividends to stockholders           (29.1     )        —          
Net cash used in financing activities          (44.9     )        (99.9     )
Effects of exchange rate changes on cash       (24.0     )        —          
and cash equivalents
Decrease in cash and cash equivalents          (160.8    )        (402.5    )
Cash and cash equivalents, beginning of        781.3              724.4      
period
Cash and cash equivalents, end of period       $  620.5           $  321.9   
                                                                             
See accompanying notes to condensed consolidated financial statements.
 
 

AGCO CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except per share data)

1. STOCK COMPENSATION EXPENSE

The Company recorded stock compensation expense as follows:

                       Three Months Ended              Nine Months Ended
                       September 30,                   September 30,
                       2013             2012           2013             2012
Cost of goods          $  0.4           $  0.7         $  2.3           $ 1.9
sold
Selling, general
and                    5.5              8.9            31.9             27.1
administrative
expenses
Total stock
compensation           $  5.9           $  9.6         $  34.2          $ 29.0
expense

2. INDEBTEDNESS

Indebtedness at September 30, 2013 and December 31, 2012 consisted of the
following:

                                      September 30, 2013     December 31, 2012
1¼% Convertible senior                $    199.0             $   192.1
subordinated notes due 2036
4½% Senior term loan due 2016         270.4                  264.2
5⅞% Senior notes due 2021             300.0                  300.0
Credit facility, expires 2016         426.8                  465.0
Other long-term debt                  95.9                   65.5           
                                      1,292.1                1,286.8
Less: Current portion of              (92.5          )       (59.1         )
long-term debt
1¼% Convertible senior                (199.0         )       (192.1        )
subordinated notes due 2036
Total indebtedness, less current      $    1,000.6           $   1,035.6    
portion

Holders of the Company’s 1¼% convertible senior subordinated notes may require
the Company to repurchase the notes at a repurchase price of 100% of their
principal amount, plus any interest, on December 15, 2013. In addition,
holders may convert the notes if, during any fiscal quarter, the closing sales
price of the Company’s common stock exceeds 120% of the conversion price of
$40.51 per share for at least 20 trading days in the 30 consecutive trading
days ending on the last trading day of the preceding fiscal quarter. As of
September 30, 2013, the closing sales price of the Company’s common stock had
exceeded 120% of the conversion price of the 1¼% convertible senior
subordinated notes for at least 20 trading days in the 30 consecutive trading
days ending September 30, 2013, and, therefore, the holders of the notes may
convert the notes during the three months ending December 31, 2013. As of
September 30, 2013, the Company classified the notes as a current liability
due to the redemption feature discussed above, as well as the ability of the
holders of the notes to convert the notes during the three months ending
December 31, 2013. As of December 31, 2012, the Company classified the notes
as a current liability due to the redemption feature of the notes. As of
September 30, 2013 and December 31, 2012, the Company also classified
approximately $2.3 million and $9.2 million, respectively, of the equity
component of the 1¼% convertible senior subordinated notes as “Temporary
equity.” The amount classified as “Temporary equity” was measured as the
excess of (i) the amount of cash that would be required to be paid upon
conversion over (ii) the current carrying amount of the liability-classified
component. Due to the redemption feature of the notes, unless converted prior
to such date, the notes will be required to be classified as a current
liability through at least December 15, 2013. Holders of the notes may convert
the notes earlier than December 15, 2013 dependent on the closing sales price
of the Company’s common stock during the quarters in 2013, as previously
discussed. Future classification of the notes between current liabilities and
long-term debt beyond December 15, 2013 will be dependent on the closing sales
price of the Company’s common stock during future quarters, until the fourth
quarter of 2015, unless the Company chooses to redeem the notes beginning
December 19, 2013.

3. INVENTORIES

Inventories at September 30, 2013 and December 31, 2012 were as follows:

                                 September 30, 2013     December 31, 2012
Finished goods                   $    858.9             $     598.5
Repair and replacement parts     573.3                  505.6
Work in process                  161.9                  137.5
Raw materials                    587.7                  461.5
Inventories, net                 $    2,181.8           $     1,703.1

4. ACCOUNTS RECEIVABLE SALES AGREEMENTS

At September 30, 2013 and December 31, 2012, the Company had accounts
receivable sales agreements that permit the sale, on an ongoing basis, of a
majority of its wholesale receivables in North America and Europe to its 49%
owned U.S., Canadian and European retail finance joint ventures. As of
September 30, 2013 and December 31, 2012, the cash received from receivables
sold under the U.S., Canadian and European accounts receivable sales
agreements was approximately $1.2 billion and $1.1 billion, respectively.

Losses on sales of receivables associated with the accounts receivable
financing facilities discussed above, reflected within “Other expense, net” in
the Company’s Condensed Consolidated Statements of Operations, were
approximately $6.7 million and $18.8 million during the three and nine months
ended September 30, 2013, respectively. Losses on sales of receivables
associated with the accounts receivable financing facilities discussed above,
reflected within “Other expense, net” in the Company’s Condensed Consolidated
Statements of Operations, were approximately $5.8 million and $16.4 million
during the three and nine months ended September 30, 2012, respectively.

The Company’s retail finance joint ventures in Brazil and Australia also
provide wholesale financing to the Company’s dealers. As of September 30, 2013
and December 31, 2012, these retail finance joint ventures had approximately
$97.7 million and $100.6 million, respectively, of outstanding accounts
receivable associated with these arrangements. In addition, the Company sells
certain trade receivables under factoring arrangements to other financial
institutions around the world.

5. NET INCOME PER SHARE

The Company’s convertible senior subordinated notes provide for (i) the
settlement upon conversion in cash up to the principal amount of the converted
notes with any excess conversion value settled in shares of the Company’s
common stock, and (ii) the conversion rate to be increased under certain
circumstances if the notes are converted in connection with certain change of
control transactions. Dilution of weighted shares outstanding will depend on
the Company’s stock price for the excess conversion value using the treasury
stock method. 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 for the three and nine
months ended September 30, 2013 and 2012 is as follows:

                              Three Months Ended         Nine Months Ended
                              September 30,              September 30,
                              2013          2012         2013          2012
                                                                        
Basic net income per
share:
Net income attributable
to AGCO Corporation and       $ 126.2       $ 94.5       $ 457.9       $ 419.6
subsidiaries
Weighted average number
of common shares              97.4          97.0         97.2          97.1
outstanding
                                                                        
Basic net income per
share attributable to         $ 1.30        $ 0.97       $ 4.71        $ 4.32
AGCO Corporation and
subsidiaries
                                                                        
Diluted net income per
share:
Net income attributable
to AGCO Corporation and       $ 126.2       $ 94.5       $ 457.9       $ 419.6
subsidiaries
                                                                        
Weighted average number
of common shares              97.4          97.0         97.2          97.1
outstanding
Dilutive stock-settled
appreciation rights,
performance share awards      0.7           1.0          0.9           1.0
and restricted stock
awards
Weighted average assumed
conversion of                 1.4           0.4          1.2           0.5
contingently convertible
senior subordinated notes
Weighted average number
of common shares and
common share equivalents      99.5          98.4         99.3          98.6
outstanding for purposes
of computing diluted net
income per share
                                                                        
Diluted net income per
share attributable to         $ 1.27        $ 0.96       $ 4.61        $ 4.25
AGCO Corporation and
subsidiaries

6. 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 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 three and nine
months ended September 30, 2013 and 2012 are as follows:

Three
Months         North        South        Europe/Africa/     Asia/        
Ended
September      America      America      Middle East        Pacific       Consolidated
30,
                                                                           
2013
Net sales      $ 686.6      $ 572.3      $    1,086.4       $ 130.6       $   2,475.9
Income
(loss)         78.1         71.9         98.4               (2.6    )     245.8
from
operations
                                                                           
2012
Net sales      $ 632.2      $ 479.9      $    1,060.5       $ 122.4       $   2,295.0
Income
from           60.0         45.0         81.7               3.8           190.5
operations

Nine
Months         North          South          Europe/Africa/     Asia/       
Ended
September      America        America        Middle East        Pacific      Consolidated
30,
                                                                              
2013
Net sales      $ 2,099.7      $ 1,578.0      $    3,878.6       $ 370.9      $   7,927.2
Income
from           271.8          179.9          403.0              2.1          856.8
operations
                                                                              
2012
Net sales      $ 1,932.1      $ 1,343.8      $    3,667.2       $ 315.7      $   7,258.8
Income
from           205.9          110.6          387.5              9.8          713.8
operations

A reconciliation from the segment information to the consolidated balances for
income from operations is set forth below:

                Three Months Ended September        Nine Months Ended
                30,                                 September 30,
                2013               2012             2013             2012
Segment
income from     $  245.8           $  190.5         $  856.8         $ 713.8
operations
Corporate       (29.5     )        (29.8     )      (85.5     )      (75.5   )
expenses
Stock
compensation    (5.5      )        (8.9      )      (31.9     )      (27.1   )
expense
Amortization
of              (11.8     )        (12.2     )      (35.9     )      (36.9   )
intangibles
Consolidated
income from     $  199.0           $  139.6         $  703.5         $ 574.3  
operations
                                                                              

                     RECONCILIATION OF NON-GAAP MEASURES

This earnings release discloses the percentage change in regional net sales
due to the impact of currency translation. The following table sets forth, for
the three and nine months ended September 30, 2013, the impact to net sales of
currency translation by geographical segment (in millions, except
percentages):

                         Three Months Ended                         Change due to currency
                         September 30,                              translation
                                                         %                       
                                                         change
                         2013            2012            from       $             %
                                                         2012
                                                                                   
North America            $ 686.6         $ 632.2         8.6  %     $ (3.3  )     (0.5  )%
South America            572.3           479.9           19.3 %       (74.7 )     (15.6 )%
Europe/Africa/Middle     1,086.4         1,060.5         2.4  %       42.2        4.0   %
East
Asia/Pacific             130.6           122.4           6.7  %       (5.3  )     (4.3  )%
                                                                                   
                         $ 2,475.9       $ 2,295.0       7.9  %     $ (41.1 )     (1.8  )%

                       Nine Months Ended                          Change due to currency
                       September 30,                              translation
                                                       %                        
                                                       change
                       2013            2012            from       $              %
                                                       2012
                                                                                  
North America          $ 2,099.7       $ 1,932.1       8.7  %     $ (3.7   )     (0.2  )%
South America          1,578.0         1,343.8         17.4 %     (167.5   )     (12.5 )%
Europe/Africa/Middle   3,878.6         3,667.2         5.8  %     62.1           1.7   %
East
Asia/Pacific           370.9           315.7           17.5 %     (5.4     )     (1.7  )%
                                                                                  
                       $ 7,927.2       $ 7,258.8       9.2  %     $ (114.5 )     (1.6  )%

Contact:

AGCO
Greg Peterson, 770-232-8229
Director of Investor Relations
greg.peterson@agcocorp.com
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