AGCO Reports Fourth Quarter Results

  AGCO Reports Fourth Quarter Results

 Sales and Margin Improvement Produce Record Full Year Earnings per Share of
                                    $6.01

Business Wire

DULUTH, Ga. -- February 4, 2014

AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide manufacturer and
distributor of agricultural equipment, reported net sales of approximately
$2.9 billion during the fourth quarter of 2013, an increase of approximately
5.8% compared to net sales of $2.7 billion for the fourth quarter of 2012.
Reported net income for the fourth quarter of 2013 was $1.40 per share. These
results compare to reported and adjusted net income of $1.04 and $0.99 per
share, respectively, for the fourth quarter of 2012. Adjusted net income for
the fourth quarter of 2012 excluded a non-cash intangible asset impairment
charge of approximately $22.4 million as well as a non-cash tax gain of
approximately $26.9 million from the recognition of U.S. deferred tax assets.
Excluding an unfavorable currency translation impact of approximately 0.3%,
net sales in the fourth quarter of 2013 increased approximately 6.1% compared
to the fourth quarter of 2012.

Net sales for the full year of 2013 were approximately $10.8 billion, an
increase of approximately 8.3% compared to the same period in 2012. For the
full year of 2013, reported net income was $6.01 per share. This result
compares to reported and adjusted net income of $5.30 and $5.25 per share,
respectively, for the full year of 2012. Excluding an unfavorable impact of
currency translation of approximately 1.2%, net sales for the full year of
2013 increased approximately 9.5% compared to 2012.

Fourth Quarter and Full Year Highlights

  *Fourth quarter regional sales results^(1): Europe/Africa/ Middle East
    (“EAME”) +10%; Asia/Pacific (“APAC”) +6%; North America +2%; South America
    +1%;
  *Adjusted operating margins in 2013 improved over 160 basis points in the
    fourth quarter and nearly 120 basis points for the full year vs.
    comparable 2012 periods
  *Full year regional operating margin performance: North America 11.8%,
    South America 10.4%, EAME 10.2%, APAC 0.1%
  *Announced $500 million share repurchase program in December
  *2014 earnings per share guidance remains at approximately $6.00 per share

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

“AGCO closed the year with a solid fourth quarter, making 2013 a record year
for both sales and earnings,” stated Martin Richenhagen, Chairman, President
and Chief Executive Officer. “We continue to take advantage of healthy market
conditions by leveraging our global footprint and our well-positioned brands.
Strong sales performance and steady progress with our profitability
improvement efforts produced margin expansion in 2013. We generated over $400
million of free cash flow in 2013 while making heavy investments in plant
productivity, new products and tier 4 emission requirements. Our strong cash
generation will allow us to continue making strategic investments in improved
technology and production capabilities while returning cash to our
shareholders. AGCO’s record earnings and consistent cash flow generation over
the last three years has strengthened our balance sheet and positioned the
Company for continued success.”

Market Update

Industry Unit Retail Sales
                                Tractors            Combines
Year ended December 31, 2013       Change from           Change from
                                   Prior Year Period     Prior Year Period
                                                         
North America                      9            %        8            %
South America                      17           %        35           %
Western Europe                     (1      )    %        (10     )    %
                                                                      

“Crop production improved to more normal levels and farm income remained
strong across most of the developed farm markets during 2013,” stated Mr.
Richenhagen. “Improved yields in North America and high levels of farm income
supported industry sales. In Western Europe, favorable farm economics in
France and Germany supported industry demand, while market conditions remained
soft in the weather-impacted regions of the United Kingdom and parts of
Northern Europe. Attractive soft commodity prices, improved harvests and
supportive government financing programs all contributed to market strength in
Brazil. In 2014, industry demand is expected to weaken due to lower commodity
prices and reduced farm income. Our long-term view remains positive as
increasing global demand for commodities driven by biofuel use, the growing
world population and increasing emerging market protein consumption are
expected to support elevated farm income and healthy conditions in our
industry.”

Regional Results

AGCO Regional Net Sales (in millions)
                                                           
                                                                    % change from
                                                       Change       2012 due to
                                                      from         currency
                           2013                         2012         translation^(1)
                                          2012
                                                                     
Three months ended
December 31
North America              $ 658.1        $ 652.3       0.9    %     (0.6     )  %
South America                461.7          511.9       (9.8 ) %     (10.3    )  %
Europe/Africa/Middle         1,602.9        1,406.5     14.0   %     3.8         %
East
Asia/Pacific                137.0         132.7       3.2    %     (3.1     )  %
Total                      $ 2,859.7      $ 2,703.4     5.8   %     (0.3     )  %
Year ended December
31
North America              $ 2,757.8      $ 2,584.4     6.7    %     (0.3     )  %
South America                2,039.7        1,855.7     9.9    %     (11.9    )  %
Europe/Africa/Middle         5,481.5        5,073.7     8.0    %     2.3         %
East
Asia/Pacific                507.9         448.4       13.3   %     (2.1     )  %
Total                      $ 10,786.9     $ 9,962.2     8.3   %     (1.2     )  %
^(1) See Footnotes for additional disclosure


North America

North American net sales grew 7.0% during the full year 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
sprayers, high horsepower tractors, grain storage products and implements.
Increased sales, a favorable product mix and margin improvement initiatives
all contributed to growth in income from operations of $66.0 million for the
full year of 2013 compared to the same period in 2012.

South America

AGCO’s South American net sales grew 21.8% in the full year 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, sprayers and grain storage products.
Operating margins improved approximately 170 basis points for the full year of
2013 compared to 2012 due to higher sales, a richer mix of products and the
benefit of cost-reduction initiatives. Income from operations increased $51.1
million for the full year of 2013 compared to 2012.

EAME

Net sales in AGCO’s EAME region improved by 5.7% in the full year of 2013
compared to the full year of 2012 on a constant currency basis. Improved
production capacity at the Fendt facility in Germany generated most of the
increase. Higher sales in France and Germany were partially offset by declines
in Central and Eastern Europe. EAME’s income from operations increased $83.3
million for the full year of 2013 compared to 2012. The benefit of higher
sales and improved production efficiency contributed to the increase.

Asia/Pacific

Net sales in the Asia/Pacific region were 15.4% higher in the full year of
2013 compared to the same period in 2012, excluding the negative impact of
currency translation. Growth in China, East Asia and Australia produced most
of the increase. Income from operations in the Asia/Pacific region declined by
$9.7 million in the full year of 2013 compared to the same period in 2012. The
benefit of higher sales was offset by increased market development costs in
China.

Outlook

Lower commodity prices relative to 2013 are expected to result in reduced farm
income and softer industry demand across the developed agricultural equipment
markets in 2014. AGCO is projecting net sales in a range from $10.8 billion to
$11.0 billion, with forecasted pricing benefits and market share improvements
offsetting the impact of the expected industry decline. Improved gross margins
compared to 2013 levels are expected to be offset by higher engineering and
market development costs. Based on these assumptions, AGCO is targeting
earnings per share of approximately $6.00 during 2014.

“2014 will be a challenging year for our industry,” stated Mr. Richenhagen.
“With modest declines in demand expected across most markets, we will focus on
managing working capital while we continue to execute on our strategic
initiatives. We expect to continue investing in new products and technology,
as well as devoting significant resources to enhance our presence in the CIS
region, China and Africa. Our plans in 2014 also include investing in our
production facilities to improve efficiency as well as 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, February 4, 2014. 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 December31,2012 and subsequent Form 10-Qs. 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 3,100
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 2013, AGCO
had net sales of $10.8 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)
                                                       
                                                             
                                       December 31, 2013     December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents              $   1,047.2           $   781.3
Accounts and notes receivable,         940.6                 924.6
net
Inventories, net                       2,016.1               1,703.1
Deferred tax assets                    241.2                 243.5
Other current assets                   272.0                302.2         
Total current assets                   4,517.1               3,954.7
Property, plant and equipment,         1,602.3               1,406.1
net
Investment in affiliates               416.1                 390.3
Deferred tax assets                    24.4                  40.0
Other assets                           134.6                 131.2
Intangible assets, net                 565.6                 607.1
Goodwill                               1,178.7              1,192.4       
Total assets                           $   8,438.8          $   7,721.8   
                                                             
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities:
Current portion of long-term           $   110.5             $   59.1
debt
Convertible senior subordinated        201.2                 192.1
notes
Accounts payable                       960.3                 888.3
Accrued expenses                       1,389.2               1,226.5
Other current liabilities              150.8                98.8          
Total current liabilities              2,812.0               2,464.8
Long-term debt, less current           938.5                 1,035.6
portion
Pensions and postretirement            246.4                 331.6
health care benefits
Deferred tax liabilities               251.2                 242.7
Other noncurrent liabilities           145.9                149.1         
Total liabilities                      4,394.0              4,223.8       
                                                             
Temporary equity                       —                     16.5
Stockholders’ equity:
AGCO Corporation stockholders’
equity:
Common stock                           1.0                   1.0
Additional paid-in capital             1,117.9               1,082.9
Retained earnings                      3,402.0               2,843.7
Accumulated other comprehensive        (510.7        )       (479.4        )
loss
Total AGCO Corporation                 4,010.2               3,448.2
stockholders’ equity
Noncontrolling interests               34.6                 33.3          
Total stockholders’ equity             4,044.8              3,481.5       
Total liabilities, temporary           $   8,438.8          $   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 December 31,
                                               2013               2012
                                                                    
Net sales                                      $  2,859.7           $  2,703.4
Cost of goods sold                             2,268.7             2,175.6
Gross profit                                   591.0                527.8
                                                                    
Selling, general and administrative            295.2                284.5
expenses
Engineering expenses                           86.7                 89.6
Impairment charge                              —                    22.4
Amortization of intangibles                    11.9                12.4
                                                                    
Income from operations                         197.2                118.9
                                                                    
Interest expense, net                          17.8                 14.1
Other expense, net                             14.9                10.5
                                                                    
Income before income taxes and equity in       164.5                94.3
net earnings of affiliates
                                                                    
Income tax provision                           38.7                6.9
                                                                    
Income before equity in net earnings of        125.8                87.4
affiliates
                                                                    
Equity in net earnings of affiliates           11.1                13.6
                                                                    
Net income                                     136.9                101.0
                                                                    
Net loss attributable to noncontrolling        2.4                 1.5
interests
                                                                    
Net income attributable to AGCO                $  139.3            $  102.5
Corporation and subsidiaries
                                                                    
Net income per common share attributable
to AGCO Corporation and subsidiaries:
Basic                                          $  1.43             $  1.06
Diluted                                        $  1.40             $  1.04
Cash dividends declared and paid per           $  0.10             $  —
common share
                                                                    
Weighted average number of common and
common equivalent shares outstanding:
Basic                                          97.4                96.9
Diluted                                        99.7                98.5
                                                                    
                                                                    
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)


                                                 Years Ended December 31,
                                                    2013           2012
                                                                     
Net sales                                           $ 10,786.9       $ 9,962.2
Cost of goods sold                                  8,396.3         7,839.0
Gross profit                                        2,390.6          2,123.2
                                                                     
Selling, general and administrative expenses        1,088.7          1,041.2
Engineering expenses                                353.4            317.1
Impairment charge                                   —                22.4
Amortization of intangibles                         47.8            49.3
                                                                     
Income from operations                              900.7            693.2
                                                                     
Interest expense, net                               58.0             57.6
Other expense, net                                  40.1            34.8
                                                                     
Income before income taxes and equity in net        802.6            600.8
earnings of affiliates
                                                                     
Income tax provision                                258.5           137.9
                                                                     
Income before equity in net earnings of             544.1            462.9
affiliates
                                                                     
Equity in net earnings of affiliates                48.2            53.5
                                                                     
Net income                                          592.3            516.4
                                                                     
Net loss attributable to noncontrolling             4.9             5.7
interests
                                                                     
Net income attributable to AGCO Corporation         $ 597.2         $ 522.1
and subsidiaries
                                                                     
Net income per common share attributable to
AGCO Corporation and subsidiaries:
Basic                                               $ 6.14          $ 5.38
Diluted                                             $ 6.01          $ 5.30
Cash dividends declared and paid per common         $ 0.40          $ —
share
                                                                     
Weighted average number of common and common
equivalent shares outstanding:
Basic                                               97.3            97.1
Diluted                                             99.4            98.6
                                                                     
See accompanying notes to condensed consolidated financial statements.
                                                                     


AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
                                                 
                                                     
                                                     Years Ended December 31,
                                                     2013          2012
                                                                     
Cash flows from operating activities:
Net income                                           $ 592.3         $ 516.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation                                         211.6           180.6
Deferred debt issuance cost amortization             3.5             3.5
Impairment charge                                    —               22.4
Amortization of intangibles                          47.8            49.3
Amortization of debt discount                        9.2             8.7
Stock compensation                                   34.6            36.8
Equity in net earnings of affiliates, net of         (19.0     )     (25.7   )
cash received
Deferred income tax provision (benefit)              21.7            (36.4   )
Other                                                0.3             0.6
Changes in operating assets and liabilities,
net of effects from purchase of businesses:
Accounts and notes receivable, net                   (36.2     )     40.6
Inventories, net                                     (356.9    )     (160.9  )
Other current and noncurrent assets                  7.0             (71.8   )
Accounts payable                                     54.7            (61.7   )
Accrued expenses                                     123.4           154.5
Other current and noncurrent liabilities             103.0          9.5     
Total adjustments                                    204.7          150.0   
Net cash provided by operating activities            797.0          666.4   
Cash flows from investing activities:
Purchases of property, plant and equipment           (391.8    )     (340.5  )
Proceeds from sale of property, plant and            2.6             0.9
equipment
Purchase of businesses, net of cash acquired         (9.5      )     (2.9    )
Investments in consolidated affiliates, net of       —               (20.1   )
cash acquired
(Sale of) investments in unconsolidated              (10.0     )     (15.8   )
affiliates, net
Restricted cash and other                            —              3.7     
Net cash used in investing activities                (408.7    )     (374.7  )
Cash flows from financing activities:
Payment of debt obligations, net                     (58.1     )     (222.5  )
Payment of debt issuance costs                       (0.1      )     (0.2    )
Payment of minimum tax withholdings on stock         (17.0     )     (0.3    )
compensation
Excess tax benefit related to stock                  11.4            —
compensation
Payment of dividends to stockholders                 (38.9     )     —
Purchases and retirement of common stock             (1.0      )     (17.6   )
(Distribution to) investments by                     (3.1      )     (1.0    )
noncontrolling interests, net
Net cash used in financing activities                (106.8    )     (241.6  )
Effects of exchange rate changes on cash and         (15.6     )     6.8     
cash equivalents
Increase in cash and cash equivalents                265.9           56.9
Cash and cash equivalents, beginning of year         781.3          724.4   
Cash and cash equivalents, end of year               $ 1,047.2      $ 781.3 
                                                                             
See accompanying notes to condensed consolidated financial statements.
                                                                             


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

1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows:
                                                  
                                                         
                       Three Months Ended December       Years Ended December
                       31,                               31,
                       2013           2012             2013         2012
Cost of goods          $  —             $  0.5           $  2.3         $ 2.4
sold
Selling, general
and                    0.7             7.5             32.6          34.6
administrative
expenses
Total stock
compensation           $  0.7          $  8.0          $  34.9       $ 37.0
expense
                                                                          


2. INDEBTEDNESS
Indebtedness at December 31, 2013 and 2012 consisted of the following:
                                                       
                                                             
                                       December 31, 2013     December 31, 2012
1¼% Convertible senior                 $    201.2            $   192.1
subordinated notes due 2036
4½% Senior term loan due 2016          275.0                 264.2
5⅞% Senior notes due 2021              300.0                 300.0
Credit facility, expires 2016          360.0                 465.0
Other long-term debt                   114.0                65.5          
                                       1,250.2               1,286.8
Less: Current portion of               (110.5        )       (59.1         )
long-term debt
1¼% Convertible senior                 (201.2        )       (192.1        )
subordinated notes due 2036
Total indebtedness, less current       $    938.5           $   1,035.6   
portion
                                                                           

Holders of the Company’s 1¼% convertible senior subordinated notes had the
right to require the Company to repurchase the notes at a repurchase price of
100% of their principal amount, plus any interest, on December 15, 2013. No
notes were tendered for repurchase. 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 $40.44 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 December31, 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 December31, 2013, and, therefore,
the holders of the notes may convert the notes during the three months ending
March31, 2014. Due to the ability of the holders of the notes to convert the
notes during the three months ending March 31, 2014, the Company classified
the notes as a current liability as of December 31, 2013. As of December31,
2012, the Company classified the notes as a current liability due to the
redemption feature of the notes. The Company classified approximately $9.2
million of the equity component of the 1¼% convertible senior subordinated
notes as “Temporary equity” as of December 31, 2012. 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. As of December 31, 2013, the
amount of principal cash required to be repaid upon conversion of the 1¼%
convertible senior subordinated notes was equivalent to the carrying amount of
the liability-classified component. Future classification of the notes between
current liabilities and long-term debt will be dependent on the closing sales
price of the Company’s common stock during future quarters, until the fourth
quarter of 2015.

In December 2013, holders of the Company's 1¼% convertible senior subordinated
notes converted less than $0.1 million of principal amount of the notes. The
Company issued 286 shares associated with the less than $0.1 million excess
conversion value of the notes.


3. INVENTORIES
Inventories at December 31, 2013 and 2012 were as follows:
                                                   
                                                         
                                   December 31, 2013    December 31, 2012
Finished goods                     $   775.7             $     598.5
Repair and replacement parts       550.2                 505.6
Work in process                    109.0                 137.5
Raw materials                      581.2                461.5
Inventories, net                   $   2,016.1          $     1,703.1
                                                               

4. ACCOUNTS RECEIVABLE SALES AGREEMENTS

At December31, 2013 and 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 December31, 2013
and 2012, the cash received from receivables sold under the U.S., Canadian and
European accounts receivable sales agreements was approximately $1.3 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 $6.8 million and $25.6 million during the three months and year
ended December31, 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 $5.4 million and $21.8 million
during the three months and year ended December31, 2012, respectively.

The Company’s retail finance joint ventures in Brazil and Australia also
provide wholesale financing to the Company’s dealers. As of December31, 2013
and 2012, these retail finance joint ventures had approximately $68.2 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 months and
years ended December31, 2013 and 2012 is as follows:

                                                
                          Three Months Ended          Years Ended December 31,
                          December 31,
                          2013        2012          2013           2012
                                                                       
Basic net income
per share:
Net income
attributable to           $ 139.3      $ 102.5      $  597.2        $ 522.1
AGCO Corporation
and subsidiaries
Weighted average
number of common          97.4         96.9         97.3            97.1
shares outstanding
                                                                       
Basic net income
per share
attributable to           $ 1.43       $ 1.06       $  6.14         $ 5.38
AGCO Corporation
and subsidiaries
                                                                       
Diluted net income
per share:
Net income
attributable to           $ 139.3      $ 102.5      $  597.2        $ 522.1
AGCO Corporation
and subsidiaries
                                                                       
Weighted average
number of common          97.4          96.9          97.3             97.1
shares outstanding
Dilutive
stock-settled
appreciation rights       0.7           1.0           0.8              1.0
and performance
share awards
Weighted average
assumed conversion
of contingently           1.6          0.6          1.3             0.5
convertible senior
subordinated notes
Weighted average
number of common
shares and common
share equivalents
outstanding for           99.7         98.5         99.4            98.6
purposes of
computing diluted
net income per
share
                                                                       
Diluted net income
per share
attributable to           $ 1.40       $ 1.04       $  6.01         $ 5.30
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 months and
years ended December31, 2013 and 2012 are as follows:

                                                                   
Three
Months           North        South        Europe/Africa/
Ended            America      America      Middle East        Asia/Pacific     Consolidated
December
31,
2013
Net sales        $ 658.1      $ 461.7      $    1,602.9       $  137.0         $   2,859.7
Income
(loss)           54.1         32.8         155.2              (1.6      )      240.5
from
operations
                                                                               
2012
Net sales        $ 652.3      $ 511.9      $    1,406.5       $  132.7         $   2,703.4
Income
from             54.0         51.0         87.4               0.4              192.8
operations
                                                                               

                                                                       
Years
Ended            North          South          Europe/Africa/     Asia/Pacific     Consolidated
December         America        America        Middle East
31,
                                                                                   
2013
Net sales        $ 2,757.8      $ 2,039.7      $    5,481.5       $    507.9       $  10,786.9
Income
from             325.9          212.7          558.2              0.5              1,097.3
operations
                                                                                   
2012
Net sales        $ 2,584.4      $ 1,855.7      $    5,073.7       $    448.4       $  9,962.2
Income
from             259.9          161.6          474.9              10.2             906.6
operations
                                                                                   

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

                                               
                    Three Months Ended December      Years Ended December 31,
                    31,
                    2013             2012          2013          2012
Segment
income from         $  240.5           $ 192.8       $ 1,097.3       $ 906.6
operations
Corporate           (30.7     )        (31.6   )     (116.2    )     (107.1  )
expenses
Stock
compensation        (0.7      )        (7.5    )     (32.6     )     (34.6   )
expense
Impairment          —                  (22.4   )     —               (22.4   )
charge
Amortization
of                  (11.9     )        (12.4   )     (47.8     )     (49.3   )
intangibles
Consolidated
income from         $  197.2          $ 118.9      $ 900.7        $ 693.2 
operations
                                                                             

                     RECONCILIATION OF NON-GAAP MEASURES

This earnings release discloses adjusted income from operations, net income
and net income per share, all of which exclude amounts that differ from the
most directly comparable measure calculated in accordance with U.S. generally
accepted accounting principles ("GAAP"). A reconciliation of each of these
financial measures to the most directly comparable GAAP measure is included
below.

The following is a reconciliation of adjusted income from operations, net
income and net income per share to reported income from operations, net income
and net income per share for the three months ended December31, 2013 and 2012
(in millions, except per share data):


                   Three months ended December 31,
                      2013                                      2012
                      Income                        Net           Income                        Net
                      From         Net          Income        From         Net          Income
                      Operations     Income^(1)     Per           Operations     Income^(1)     Per
                                                    Share^(1)                                   Share^(1)
                                                                                                
As adjusted           $  197.2       $  139.3       $  1.40       $  141.3       $  98.0        $  0.99
Tax                   —              —              —             —              (26.9    )     (0.27   )
adjustments^(2)
Impairment            —             —             —            22.4          22.4          0.22    
charge^(3)
                                                                                                
As reported           $  197.2      $  139.3      $  1.40      $  118.9      $  102.5      $  1.04 
                                                                                                        
                                                                                                        

^(1) Net income and net income per share amounts are after tax.
^(2) During the fourth quarter of 2012, the Company recorded a non-cash tax gain associated with the
recognition of certain U.S. deferred tax assets from the reversal of its U.S. deferred tax valuation
allowance and the recognition of certain U.S. research and development tax credits.
^(3) In accordance with ASC 350, "Intangibles- Goodwill and Other," the Company conducted an impairment
analysis of its Chinese harvesting business during the fourth quarter of 2012. As a result of its
analysis, the Company concluded that the goodwill and certain other intangible assets were impaired and
recorded an impairment charge of $22.4 million.


The following is a reconciliation of adjusted income from operations, net
income and net income per share to reported income from operations, net income
and net income per share for the years ended December31, 2013 and 2012 (in
millions, except per share data):

                  
                      Years ended December 31,
                      2013                                      2012
                      Income                        Net           Income                        Net
                      From         Net          Income        From         Net          Income
                      Operations     Income^(1)     Per           Operations     Income^(1)     Per
                                                    Share^(1)                                   Share^(1)
                                                                                                
As adjusted           $  900.7       $  597.2       $  6.01       $  715.6       $  517.6       $  5.25
Tax                   —              —              —             —              (26.9    )     (0.27   )
adjustments^(2)
Impairment            —             —             —            22.4          22.4          0.22    
charge^(3)
                                                                                                
As reported           $  900.7      $  597.2      $  6.01      $  693.2      $  522.1      $  5.30 
                                                                                                        
^(1) Net income and net income per share amounts are after tax.
^(2) During the fourth quarter of 2012, the Company recorded a non-cash tax gain associated with the
recognition of certain U.S. deferred tax assets from the reversal of its U.S. deferred tax valuation
allowance and the recognition of certain U.S. research and development tax credits.
^(3) In accordance with ASC 350, "Intangibles- Goodwill and Other," the Company conducted an impairment
analysis of its Chinese harvesting business during the fourth quarter of 2012. As a result of its
analysis, the Company concluded that the goodwill and certain other intangible assets were impaired and
recorded an impairment charge of $22.4 million.


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 months and year ended December31, 2013, the impact to net sales of
currency translation by geographical segment (in millions, except
percentages):

                                                                
                           Three Months Ended                           Change due to currency
                           December 31,                                 translation
                                                           % change
                           2013          2012            from         $          %
                                                           2012
                                                                                     
North America              $ 658.1         $ 652.3         0.9    %     $ (4.0 )     (0.6  ) %
South America              461.7           511.9           (9.8 ) %     (52.7  )     (10.3 ) %
Europe/Africa/Middle       1,602.9         1,406.5         14.0   %     53.8         3.8     %
East
Asia/Pacific               137.0          132.7          3.2    %     (4.1   )     (3.1  ) %
                           $ 2,859.7      $ 2,703.4      5.8   %     $ (7.0 )     (0.3  ) %
                                                                                             

                                                               
                           Years Ended December 31,                    Change due to currency
                                                                       translation
                                                            %
                           2013           2012            change     $            %
                                                            from
                                                            2012
                                                                                      
North America              $ 2,757.8        $ 2,584.4       6.7  %     $ (7.7   )     (0.3  ) %
South America              2,039.7          1,855.7         9.9  %     (220.2   )     (11.9 ) %
Europe/Africa/Middle       5,481.5          5,073.7         8.0  %     115.9          2.3     %
East
Asia/Pacific               507.9           448.4          13.3 %     (9.5     )     (2.1  ) %
                                                                                      
                           $ 10,786.9      $ 9,962.2      8.3  %     $ (121.5 )     (1.2  ) %
                                                                                              

The following is a reconciliation of free cash flow to net cash provided by
operating activities for the years ended December31, 2013 and 2012 (in
millions):

                                            
                                                Years Ended December 31,
                                                2013         2012
                                                               
Net cash provided by operating activities       $  797.0       $ 666.4
Less:
Capital expenditures                            (391.8   )     (340.5  )
Free cash flow                                  $  405.2      $ 325.9 
                                                                       

Contact:

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