AGCO CORP /DE

13. PENSION AND POSTRETIREMENT BENEFIT PLANS

Net periodic pension and postretirement benefit cost for the Company’s defined pension and postretirement benefit plans for the three and nine months ended September 30, 2026 and 2025 are set forth below (in millions):

The components of net periodic pension and postretirement benefits cost, other than the service cost component, are included in “Other expense (income), net” in the Company’s Condensed Consolidated Statements of Operations.

During the nine months ended September 30, 2026, the Company made approximately $12.1 million of contributions to its defined pension benefit plans. The Company currently estimates its minimum contributions for 2026 to its defined pension benefit plans will aggregate to approximately $15.8 million.

During the nine months ended September 30, 2026, the Company made approximately $1.6 million of contributions to its postretirement health care and life insurance benefit plans. The Company currently estimates that it will make approximately $2.1 million of contributions to its postretirement health care and life insurance benefit plans during 2026.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability. Estimates of fair value for financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

The Company categorizes its pension plan assets into one of the three levels of the fair value hierarchy, except for those measured using the net asset value per share (or its equivalent) practical expedient.

The Company enters into foreign currency and interest rate swap contracts. The fair values of the Company’s derivative instruments are determined using discounted cash flow valuation models. The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2. Inputs used in these discounted cash flow valuation models for derivative instruments include the applicable exchange rates, forward rates or interest rates. Such models used for option contracts also use implied volatility. Refer to Note 9 for additional information on the Company’s derivative instruments and hedging activities.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025 are summarized below (in millions):

The carrying amounts of long-term debt under the Company’s EIB Senior term loans due 2029 and 2030 and Senior term loans due between 2026 and 2028 approximate fair value based on the borrowing rates currently available to the Company for loans with similar terms and average maturities. At September 30, 2026, the estimated fair value of the Company's 0.800% Senior notes due 2028, based on listed market values, was approximately €563.1 million (or approximately $639.5 million), compared to the carrying value of €600.0 million (or approximately $681.4 million). At September 30, 2026, the estimated fair value of the Company's 5.450% senior notes due 2027, based on listed market values, was approximately $400.9 million, compared to the carrying value of $400.0 million. At September 30, 2026, the estimated fair value of the Company's 5.800% senior notes due 2034, based on listed market values, was approximately $679.7 million, compared to the carrying value of $700.0 million. Refer to Note 7 for additional information on the Company’s long-term debt.

15. COMMITMENTS AND CONTINGENCIES

Leases

Lease payment amounts for operating and finance leases with remaining terms greater than one year as of September 30, 2026 and December 31, 2025 were as follows (in millions):

(1) Operating lease payments include options to extend or terminate at the Company's sole discretion, which are included in the determination of lease term when they are reasonably certain to be exercised.

(2) Calculated for each lease using either the implicit interest rate or the incremental borrowing rate, when the implicit interest rate is not readily available.

Off-Balance Sheet Arrangements

Guarantees

At September 30, 2026, the Company had outstanding guarantees issued to its Argentine finance joint venture, AGCO Capital Argentina S.A. (“AGCO Capital”), of approximately $86.1 million. Such guarantees generally obligate the Company to repay outstanding finance obligations owed to AGCO Capital if end users default on such loans to the extent that, due to non-credit risk, the end users are not able, or not required, to pay their loans, or are required to pay in a different currency than the one agreed to in their loan. The Company also has obligations to guarantee indebtedness owed to certain of its finance joint ventures if dealers or end users default on loans. Losses under such guarantees historically have been insignificant. The Company believes the credit risk associated with these guarantees is not material.

In addition, the Company guarantees residual values that may be owed to its finance joint ventures, primarily in the United States and Canada, due upon expiration of certain eligible operating leases between the finance joint ventures and end users. At September 30, 2026, the Company had accrued approximately $12.9 million of outstanding guarantees of residual values related to the United States and Canada. The maximum potential amount of future payments under these guarantees is approximately $242.9 million.

Other

The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The Company also sells certain accounts receivable under factoring arrangements to financial institutions around the world. The Company accounts for the sale of such receivables as off-balance sheet transactions. Refer to Note 2 for discussion of the Company’s accounts receivable sales agreements.

Contingencies

The Company is a party to various other legal claims and actions incidental to its business. The Company believes that none of these claims or actions, either individually or in the aggregate, are material to its business or financial statements as a whole, including its results of operations and financial condition.

16. REVENUE

Contract Liabilities

Contract liabilities primarily relate to the following: (1) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to extended warranty and maintenance contracts and where the performance obligation is satisfied over time and (2) unrecognized revenues where payment of consideration precedes the Company’s performance with respect to precision agriculture technology services and where the performance obligation is satisfied over time.

The following table summarizes the balance of contract liabilities as of September 30, 2026 and December 31, 2025 (in millions):

The contract liabilities are classified as either “Accrued expenses” or “Other current liabilities” and “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2026, the Company recognized approximately $47.8 million and $142.2 million of revenue that was recorded as a contract liability at the beginning of 2026. During thethree and nine months ended September 30, 2025, the Company recognized approximately$38.0 million and $124.5 millionof revenue that was recorded as a contract liability at the beginning of 2025.

Remaining Performance Obligations

The estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2026 are$45.2 million for the remainder of 2026,$145.3 million in 2027,$97.5 million in 2028,$51.3 million in 2029 and$27.6 million ther eafter, and relate primarily to extended warranty contracts. The Company applied the practical expedient in ASC 606 and has not disclosed information about remaining performance obligations that have original expected durations of 12 months or less.

Disaggregated Revenue:

Net sales for the three months ended September 30, 2026 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the three months ended September 30, 2025 disaggregated by primary geographical markets and major products consisted of the following (in millions):

(1) Effective January 1, 2026, the Company realigned its organizational structure to support its Farmer‑First transformation initiatives in North America. As a result, the Company’s Mexico operations were transferred from the North America segment to the South America segment, which was renamed Latin America. Segment information for all prior periods presented has been retrospectively adjusted to reflect this change.

Net sales for the nine months ended September 30, 2026 disaggregated by primary geographical markets and major products consisted of the following (in millions):

Net sales for the nine months ended September 30, 2025 disaggregated by primary geographical markets and major products consisted of the following (in millions):

(1) Effective January 1, 2026, the Company realigned its organizational structure to support its Farmer‑First transformation initiatives in North America. As a result, the Company’s Mexico operations were transferred from the North America segment to the South America segment, which was renamed Latin America. Segment information for all prior periods presented has been retrospectively adjusted to reflect this change.

17. SEGMENT REPORTING

The Company hasfour operating segments which are also its reportable segments which consist of the North America, Latin America, Europe/Middle East and Asia/Pacific/Africa regions. Effective January 1, 2026, the Company realigned its organizational structure to support its Farmer‑First transformation initiatives in North America. As a result, the Company’s Mexico operations were transferred from the North America segment to the South America segment, which was renamed Latin America. Segment information for all prior periods presented has been retrospectively adjusted to reflect this change. The Company’s reportable segments are geography based and distribute a full range of agricultural machinery and precision agriculture technology. The Company’s Chief Operating Decision Maker (“CODM”), Eric P. Hansotia, Chairman of the Board, President and Chief Executive Officer, evaluates segment performance primarily based on income from operations. The CODM utilizes income from operations to evaluate each segment’s performance including the allocation of resources. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are generally charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income (loss) from operations for one segment may not be comparable to another segment. Segment results for the three and nine months ended September 30, 2026 and 2025 and assets as of September 30, 2026 and December 31, 2025 based on the Company’s reportable segments are as follows (in millions):

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