AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide
manufacturer and distributor of agricultural equipment, reported
net sales of $2.1 billion for the third quarter of 2011, an
increase of 26.7% compared to net sales of $1.7 billion for the
third quarter of 2010. Reported and adjusted net income were $0.87
per share for the third quarter of 2011. These results compare to
reported net income of $0.65 per share and adjusted net income,
excluding restructuring and other infrequent expenses, of $0.66 per
share for the third quarter of 2010. Excluding favorable currency
translation impacts of 7.3%, net sales in the third quarter of 2011
increased 19.4% compared to the same period in 2010.
Net sales for the first nine months of 2011 were $6.3 billion,
an increase of approximately 32.3% compared to the same period in
2010. Excluding the favorable impact of currency translation of
approximately 8.2%, net sales for the first nine months of 2011
increased approximately 24.1% compared to the same period in 2010.
For the first nine months of 2011, reported and adjusted net income
were $3.04 per share. These results compare to reported net income
of $1.41 per share and adjusted net income, excluding restructuring
and other infrequent expenses, of $1.43 per share for the first
nine months of 2010.
“AGCO’s third quarter sales growth exceeded 20% for the third
consecutive quarter, and our cost-focused initiatives produced
improved operating margins,” stated Martin Richenhagen, Chairman,
President and Chief Executive Officer. “Attractive farm economics
are supporting robust global demand for agricultural equipment, and
our third quarter sales were strong across all regions. AGCO’s
Europe/Africa/Middle East (EAME) business delivered exceptional
performance in the third quarter. With industry demand below peak
levels in Western Europe, our EAME region produced record third
quarter sales on a constant currency basis. Operating margins
improved by over 350 basis points compared to the third quarter of
2010. In addition, AGCO’s free cash flow for the first nine months
of 2011 improved over $150 million from the same period in 2010.
Our profitability and cash flow are improving, while at the same
time we are investing more in our products and plants.”
“Our strategic investments remain focused on improving our
margins and growing our business organically. We are also expanding
the range of products and services we provide to our farming
customers as evidenced by our announced agreement to purchase GSI
Holdings. This acquisition provides AGCO a leading position in the
grain storage and protein production segments and allows us to
further benefit from increases in global grain and food demand.
AGCO’s balance sheet also remains strong. Since the acquisition was
announced, AGCO’s corporate credit ratings have been re-affirmed by
the credit rating agencies. GSI’s track record of strong profitably
and cash generation improves AGCO’s capacity for investments to
support the long-term growth of our business.”
Improved industry conditions in Western Europe resulted in
AGCO’s EAME region reporting a sales increase of approximately
38.2% compared to the third quarter of 2010, excluding favorable
currency translation impacts. Sales in the North American region
improved 10.4% in the third quarter of 2011 compared to the third
quarter of 2010, excluding favorable currency translation impacts,
primarily due to growth in the professional producers segment.
Sales in AGCO’s South American region were relatively flat in the
third quarter of 2011 compared to the record third quarter of 2010,
excluding favorable currency translation impacts. Weaker sales in
Brazil and Argentina were partially offset by stronger industry
demand in the South American markets outside of Brazil.
Income from operations during the third quarter of 2011
increased over 50% compared to the third quarter of 2010 due to
higher sales and improved gross margins. The combination of
increased production levels in Europe and North America, pricing
and a richer product mix, partially offset by higher material
costs, resulted in improved gross margins. Investments in new
product development resulted in increased engineering expenses in
the third quarter of 2011 compared to the same period last year.
Income from operations for the first nine months of 2011 increased
approximately $242.8 million compared to the same period in 2010
also due to an increase in sales and margin improvement.
Market Update
Industry Unit Retail Sales
Nine months ended September 30, 2011
TractorsChange fromPrior Year
Period
CombinesChange fromPrior Year
Period
North America +1% -4% South America -4% +24% Western Europe
+12% +38%
North America
Despite uneven weather patterns in North America during the
growing season, projected record farm income levels have supported
industry demand in North America resulting in strong industry
retail sales of tractors and combines. Industry unit retail sales
of tractors were up slightly, while industry retail sales of
combines were down modestly in the first nine months of 2011
compared to relatively high levels during the same period in 2010.
Improvement in the dairy and livestock sector contributed to higher
industry unit retail sales of mid-range tractors and hay equipment,
both of which increased compared to 2010 levels.
South America
In the first nine months of 2011, South American industry unit
retail sales of tractors were down compared to record levels in the
same period in 2010. Declines in Argentina and Brazil were mostly
offset by strong growth in other South American markets compared to
the same period of 2010. Industry unit retail sales in Brazil
remained solid due to attractive farm economics and supportive
government financing rates that have been extended through the end
of 2012.
Western Europe
Despite a mixed harvest across Europe, higher commodity prices
and the prospect of improved farm income has significantly
strengthened the demand for farm equipment from very low levels in
2010. Industry unit retail sales of both tractors and combines
posted double-digit growth rates in the first nine months of 2011
compared to the same period in 2010. The tractor retail sales
growth was strongest in Germany, France, Scandinavia and
Finland.
“Elevated soft commodity prices, resulting from higher
consumption levels, are providing positive support for farm income
and for our industry,” stated Mr. Richenhagen. “In Western Europe,
harvests are improved from earlier estimates and higher commodity
prices have spurred increased industry demand above the weak levels
that existed in 2010. Healthy farm economics are driving strong
market demand in North America and South America, and our global
industry view remains positive for the remainder of 2011.”
Regional Results
AGCO Regional Net Sales (in millions)
Net sales
% changefrom 2010
% change from2010 due
tocurrencytranslation(1)
Three months ended September 30, 2011 North America $
417.7 11.9 % 1.5 % South America 515.7 5.7 % 6.2 %
Europe/Africa/Middle East 1,054.1 48.7 % 10.5 % Rest of World
111.6 27.4 % 12.3 %
Total $ 2,099.1 26.7 % 7.3 %
Nine months ended September 30,
2011
North America $ 1,171.9 14.2 % 1.6 % South America 1,423.0 8.4 %
8.3 % Europe/Africa/Middle East 3,334.4 53.0 % 10.8 % Rest of World
326.1 55.2 % 13.9 %
Total $ 6,255.4 32.3 % 8.2 %
(1) See Footnotes for additional disclosure
North America
Capitalizing on strong industry conditions, AGCO’s North
American sales increased approximately 12.6% in the first nine
months of 2011 compared to the first nine months of 2010, excluding
the impact of favorable currency translation. Combines, implements
and high horsepower tractors all contributed to the sales growth.
Higher sales, the benefit of increased production, and cost control
initiatives combined to produce growth in income from operations of
$33.7 million during the first nine months of 2011 compared to the
same period in 2010.
South America
AGCO’s sales in South America were relatively flat in the first
nine months of 2011 compared to the first nine months of 2010 on a
constant currency basis. Sales declines in Argentina and Brazil
were offset by growth in other South American markets. Income from
operations decreased $32.0 million in the first nine months of 2011
compared to the same period in 2010 due primarily to a less
favorable geographic sales mix, material and labor cost inflation,
and higher engineering and product introduction expenses.
EAME
Reflecting the improved market demand, sales in AGCO’s EAME
region increased 42.2% in the first nine months of 2011 compared to
the first nine months of 2010, excluding the impact of favorable
currency translation. The strongest growth was recorded in Germany,
France, Scandinavia and Central Europe. Income from operations
increased by $243.6 million in the first nine months of 2011
compared to the same period in 2010. Higher sales and production
levels, favorable pricing and a richer mix of products contributed
to the improvement.
Rest of World
Net sales in AGCO’s Rest of World segment increased by 41.3%
during the first nine months of 2011 compared to the prior year
period, excluding the impact of currency translation. Substantial
growth in Russia and Eastern Europe compared to depressed 2010
levels, along with growth in Australia, produced most of the
increase. Income from operations increased $12.4 million in the
first nine months of 2011 compared to the same period in 2010
despite an increase in market development expenses.
Outlook
Higher grain prices driven by globally tight supplies combined
with increasing demand from emerging markets and a limited supply
of arable land are expected to produce global growth in farm
equipment sales in 2011. Strong order backlogs support the
expectation that positive year-to-date trends will continue for the
balance of the year.
AGCO is targeting reported and adjusted earnings per share of
approximately $4.30 for the full year of 2011. Net sales are
expected to range from $8.7 billion to $8.8 billion. For the fourth
quarter and full year, 2011 operating margins are expected to
improve over 2010 levels.
AGCO will be hosting a conference call with respect to this
earnings announcement at 9:00 a.m., Eastern Time, on Tuesday,
October 25, 2011. 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 on
the “Investors/Events” page in the “Company” section 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, margin
improvements, farm economics, industry demand, general economic
conditions, the timing of the closing of the GSI acquisition and
its expected impact, grain prices and supply, and emerging markets
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. 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, 2010. AGCO disclaims
any obligation to update any forward-looking statements except as
required by law.
- Our financial results depend entirely
upon the agricultural industry, and factors that adversely affect
the agricultural industry generally, including declines in the
general economy, increases in farm input costs, lower commodity
prices, lower farm income and changes in the availability of credit
for our retail customers, will adversely affect us.
- The poor performance of the general
economy may result in a decline in demand for our products.
However, we are unable to predict with accuracy the amount or
duration of any decline, and our forward-looking statements reflect
merely our best estimates at the current time.
- A majority of our sales and
manufacturing take place outside of the United States, and, as a
result, we are exposed to risks related to foreign laws, taxes,
economic conditions, labor supply and relations, political
conditions and governmental policies. These risks may delay or
reduce our realization of value from our international
operations.
- Most retail sales of the products that
we manufacture are financed, either by our retail finance joint
ventures with Rabobank or by a bank or other private lender. During
2011, 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 ongoing economic downturn,
financing for capital equipment purchases generally has become more
difficult and 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 accounts 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 recently have experienced
substantial and sustained volatility with respect to currency
exchange rate and interest rate changes, which can adversely affect
our reported results of operations and the competitiveness of our
products.
- The closing of the acquisition of GSI
is dependent upon obtaining required approvals from competitive
authorities, the timing and issuance of which are outside our
control. In addition, all acquisitions, including the acquisition
of GSI, involve risk relating to retention of key employees and
customers, fulfilling projections prepared by or at the direction
of prior ownership and general challenges related to
integration.
- The agricultural equipment industry is
highly seasonal, and seasonal fluctuations significantly impact
results of operations and cash flows.
- Our success depends on the introduction
of new products, particularly engines that comply with emission
requirements, which requires substantial expenditures.
- We depend on suppliers for raw
materials, components and parts for our products, and any failure
by our suppliers to provide products as needed, or by us to
promptly address supplier issues, will adversely impact our ability
to timely and efficiently manufacture and sell products. 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.
About AGCO
AGCO, Your Agriculture Company, (NYSE:AGCO), a Fortune 500
company, was founded in 1990 and offers a full product line of
tractors, combines, hay tools, sprayers, forage equipment, tillage,
implements, and related replacement parts. AGCO agricultural
products are sold under the core brands of Challenger®, Fendt®,
Massey Ferguson® and Valtra® and are distributed globally through
2,600 independent dealers and distributors in more than 140
countries worldwide. Retail financing is available through AGCO
Finance for qualified purchasers. AGCO is headquartered in Duluth,
GA, USA. In 2010, AGCO had net sales of $6.9 billion.
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,
2011
December 31,
2010
ASSETS Current Assets: Cash and cash equivalents $ 455.2 $
719.9 Accounts and notes receivable, net 902.9 908.5 Inventories,
net 1,603.2 1,233.5 Deferred tax assets 60.0 52.6 Other current
assets 200.9 206.5 Total current assets
3,222.2 3,121.0 Property, plant and equipment, net 1,057.8 924.8
Investment in affiliates 344.9 398.0 Deferred tax assets 42.0 58.0
Other assets 110.0 130.8 Intangible assets, net 214.3 171.6
Goodwill 665.4 632.7 Total assets $
5,656.6 $ 5,436.9
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current Liabilities: Current portion of
long-term debt $ 1.0 $ 0.1 Convertible senior subordinated notes —
161.0 Securitization facilities 78.6 113.9 Accounts payable 773.5
682.6 Accrued expenses 957.0 883.1 Other current liabilities
89.1 72.2 Total current liabilities 1,899.2
1,912.9 Long-term debt, less current portion 456.2 443.0 Pensions
and postretirement health care benefits 221.9 226.5 Deferred tax
liabilities 113.3 103.9 Other noncurrent liabilities 113.9
91.4 Total liabilities 2,804.5
2,777.7 Stockholders’ Equity: AGCO Corporation
stockholders’ equity: Common stock 1.0 0.9 Additional paid-in
capital 1,066.8 1,051.3 Retained earnings 2,036.4 1,738.3
Accumulated other comprehensive loss (283.8 ) (132.1
) Total AGCO Corporation stockholders’ equity 2,820.4
2,658.4 Noncontrolling interests 31.7
0.8 Total stockholders’ equity 2,852.1
2,659.2 Total liabilities and stockholders’ equity $
5,656.6 $ 5,436.9
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,
2011 2010 Net sales $ 2,099.1 $ 1,657.4 Cost of goods
sold 1,691.3 1,353.6 Gross profit 407.8 303.8
Selling, general and administrative expenses 221.2 170.3
Engineering expenses 67.5 51.4 Restructuring and other infrequent
expenses — 1.2 Amortization of intangibles 4.8
5.0 Income from operations 114.3 75.9 Interest
expense, net 3.1 5.8 Other expense, net 7.1
4.9 Income before income taxes and equity in net earnings of
affiliates 104.1 65.2 Income tax provision 31.6
14.1 Income before equity in net earnings of
affiliates 72.5 51.1 Equity in net earnings of affiliates
12.0 11.1 Net income 84.5 62.2
Net (income) loss attributable to noncontrolling interests
(0.1 ) 0.1 Net income attributable to AGCO
Corporation and subsidiaries $ 84.4 $ 62.3 Net income
per common share attributable to AGCO Corporation and subsidiaries:
Basic $ 0.88 $ 0.67 Diluted $ 0.87 $ 0.65
Weighted average number of common and common equivalent
shares outstanding: Basic 96.4 92.9 Diluted
96.9 95.8
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,
2011 2010 Net sales $ 6,255.4 $ 4,728.6 Cost of goods
sold 5,003.4 3,879.1 Gross profit 1,252.0
849.5 Selling, general and administrative expenses 622.4
492.1 Engineering expenses 191.6 158.5 Restructuring and other
infrequent (income) expenses (0.7 ) 3.3 Amortization of intangibles
14.1 13.8 Income from operations 424.6
181.8 Interest expense, net 21.1 23.7 Other expense, net
17.3 9.7 Income before income taxes and
equity in net earnings of affiliates 386.2 148.4 Income tax
provision 123.4 49.8 Income before
equity in net earnings of affiliates 262.8 98.6 Equity in
net earnings of affiliates 37.2 36.4
Net income 300.0 135.0 Net (income) loss attributable to
noncontrolling interests (1.9 ) 0.3 Net income
attributable to AGCO Corporation and subsidiaries $ 298.1 $
135.3 Net income per common share attributable to AGCO
Corporation and subsidiaries: Basic $ 3.13 $ 1.46
Diluted $ 3.04 $ 1.41 Weighted average number of
common and common equivalent shares outstanding: Basic 95.1
92.7 Diluted 97.9 96.0
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,
2011 2010 Cash flows from operating activities: Net
income $ 300.0 $ 135.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 110.2 97.7 Deferred debt issuance cost amortization
2.3 2.1 Amortization of intangibles 14.1 13.8 Amortization of debt
discount 6.1 11.7 Stock compensation 17.9 8.5 Equity in net
earnings of affiliates, net of cash received (21.7 ) (25.3 )
Deferred income tax benefit (3.3 ) (14.0 )
Other
(1.4 ) (0.1 )
Changes in operating assets and
liabilities, net of effects from purchase of businesses:
Accounts and notes receivable, net 49.9 22.0 Inventories, net
(333.6 ) (277.2 ) Other current and noncurrent assets (15.5 ) (62.0
) Accounts payable 56.9 46.3 Accrued expenses 88.8 28.7 Other
current and noncurrent liabilities (0.2 ) 16.9
Total adjustments (29.5 ) (130.9 ) Net cash provided
by operating activities 270.5 4.1 Cash
flows from investing activities: Purchases of property, plant and
equipment (187.2 ) (82.8 ) Proceeds from sale of property, plant
and equipment 0.9 0.5 Purchase of businesses, net of cash acquired
(88.3 ) — Investments in consolidated affiliate, net of cash
acquired (25.0 ) — Investments in unconsolidated affiliates, net
(8.3 ) — Net cash used in investing activities
(307.9 ) (82.3 ) Cash flows from financing
activities: Repurchase or conversion of convertible senior
subordinated notes (161.0 ) (58.1 ) Repayment of debt obligations,
net (47.3 ) (76.0 ) Payment of minimum tax withholdings on stock
compensation (2.5 ) (11.1 ) Distribution to noncontrolling interest
(1.0 ) — Proceeds from issuance of common stock 0.2
0.2 Net cash used in financing activities
(211.6 ) (145.0 ) Effect of exchange rate changes on cash
and cash equivalents (15.7 ) 31.0 Decrease in
cash and cash equivalents (264.7 ) (192.2 ) Cash and cash
equivalents, beginning of period 719.9 651.4
Cash and cash equivalents, end of period $ 455.2 $
459.2
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
September 30,
Nine Months Ended
September 30,
2011 2010 2011 2010 Cost of goods sold
$ 0.4 $ 0.2 $ 1.1 $ 0.5 Selling, general and administrative
expenses 6.0 3.0 17.0 8.2 Total stock
compensation expense $ 6.4 $ 3.2 $ 18.1 $ 8.7
2. INDEBTEDNESS
Indebtedness at September 30, 2011 and December 31, 2010
consisted of the following:
September 30,
2011
December 31,
2010
6⅞% Senior subordinated notes due 2014 $ — $ 267.7 4½% Senior
unsecured term loan due 2016 269.0 — 1¾% Convertible senior
subordinated notes due 2033 — 161.0 1¼% Convertible senior
subordinated notes due 2036 181.4 175.2 Securitization facilities
78.6 113.9 Other long-term debt 6.8 0.2
535.8 718.0 Less: Current portion of long-term debt (1.0 ) (0.1 )
1¾% Convertible senior subordinated notes due 2033 — (161.0 )
Securitization facilities (78.6 ) (113.9 ) Total
indebtedness, less current portion $ 456.2 $ 443.0
Holders of the Company’s convertible senior subordinated notes
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 $22.36 per share for the 1¾% convertible senior
subordinated notes and $40.73 per share for the 1¼% convertible
senior subordinated notes 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 December 31, 2010, the closing
sales price of the Company’s common stock had exceeded 120% of the
conversion price of the 1¾% convertible senior subordinated notes
for at least 20 trading days in the 30 consecutive trading days
ending December 31, 2010, and, therefore, the Company classified
the notes as a current liability. Future classification of the 1¼%
convertible senior subordinated notes between current and long-term
debt is dependent on the closing sales price of the Company’s
common stock during future quarters.
During the nine months ended September 30, 2011, holders of the
Company’s 1¾% convertible senior subordinated notes converted
approximately $161.0 million of principal amount of the notes. The
Company issued 3,926,574 shares associated with the $195.9 million
excess conversion value of the notes. The Company reflected the
repayment of the principal of the notes totaling $161.0 million
within “Repurchase or conversion of convertible senior subordinated
notes” within the Company’s Condensed Consolidated Statements of
Cash Flows for the nine months ended September 30, 2011.
The Company’s €200.0 million of 6⅞% senior subordinated notes
due April 15, 2014, issued in April 2004, were redeemed at a price
of 101.146% of their principal amount on May 2, 2011, in accordance
with the redemption provisions of the indenture agreement. The
Company funded the redemption of the notes with a new €200.0
million senior unsecured term loan with Co�peratieve Centrale
Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland.” The new term
loan is due May 2, 2016 and bears interest at a fixed rate of
4½%.
3. INVENTORIES
Inventories at September 30, 2011 and December 31, 2010 were as
follows:
September 30,
2011
December 31,
2010
Finished goods $ 587.6 $ 422.6 Repair and replacement parts 453.4
432.4 Work in process 166.8 90.2 Raw materials 395.4
288.3 Inventories, net $ 1,603.2 $ 1,233.5
4. ACCOUNTS RECEIVABLE SALES AGREEMENTS AND
SECURITIZATION FACILITIES
At September 30, 2011, the Company’s accounts receivable
securitization facilities in Europe had outstanding funding of
approximately €58.4 million (or approximately $78.6 million). The
Company recognized approximately $78.6 million of accounts
receivable sold through its European securitization facilities
within the Company’s Condensed Consolidated Balance Sheets as of
September 30, 2011, with a corresponding liability equivalent to
the funded balance of the facility.
At September 30, 2011, the Company had accounts receivable sales
agreements that permit the sale, on an ongoing basis, of
substantially all of its wholesale receivables in North America to
AGCO Finance LLC and AGCO Finance Canada, Ltd., its 49% owned U.S.
and Canadian retail finance joint ventures. As of September 30,
2011, net cash received from receivables sold under the U.S. and
Canadian accounts receivable sales agreements was approximately
$414.8 million.
At September 30, 2011, the Company also had accounts receivable
sales agreements that permit the sale, on an ongoing basis, of a
majority of its wholesale receivables in France, Germany, Denmark,
Sweden and Austria to the relevant AGCO Finance entities in those
countries. As of September 30, 2011 and December 31, 2010, cash
received from receivables sold under these accounts receivable
sales agreements in Europe was approximately $216.9 million and
$169.2 million, respectively.
The Company’s AGCO Finance retail finance joint ventures in
Brazil and Australia also provide wholesale financing to the
Company’s dealers. The receivables associated with these
arrangements are without recourse to the Company. As of September
30, 2011 and December 31, 2010, these retail finance joint ventures
had approximately $55.9 million and $50.2 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.
Losses on sales of receivables associated with the accounts
receivable financing facilities discussed above, reflected within
“Other expense, net” and “Interest expense, net” in the Company’s
Condensed Consolidated Statements of Operations, were approximately
$6.9 million and $15.6 million during the three and nine months
ended September 30, 2011, respectively, compared to $3.9 million
and $11.5 million during the three and nine months ended September
30, 2010, respectively.
5. EARNINGS 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 earnings per share for the three and nine months ended
September 30, 2011 and 2010 is as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2011 2010 2011 2010 Basic net income per
share: Net income attributable to AGCO
Corporation and subsidiaries
$ 84.4 $ 62.3 $ 298.1 $ 135.3 Weighted average number of common
shares outstanding 96.4 92.9 95.1 92.7
Basic net income per share attributable to AGCO Corporation
and subsidiaries $ 0.88 $ 0.67 $ 3.13 $ 1.46 Diluted net
income per share: Net income attributable to AGCO Corporation and
subsidiaries for purposes of computing diluted net income per share
$ 84.4 $ 62.3 $ 298.1 $ 135.3 Weighted average number of
common shares outstanding 96.4 92.9 95.1 92.7 Dilutive stock
options, SSARs, performance share awards and restricted stock
awards 0.2 0.3 0.3 0.5 Weighted average assumed conversion
of contingently convertible senior
subordinated notes
0.3 2.6 2.5 2.8 Weighted average number
of common and common equivalent shares outstanding for purposes of
computing diluted earnings per share 96.9 95.8
97.9 96.0
Diluted net income per share attributable
to
AGCO Corporation and subsidiaries $ 0.87 $ 0.65 $ 3.04 $ 1.41
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, 2011 and
2010 are as follows:
Three Months Ended
September 30,
North
America
South
America
Europe/Africa/Middle East
Rest ofWorld
Consolidated
2011 Net sales $ 417.7 $ 515.7 $ 1,054.1 $ 111.6 $
2,099.1 Income from operations 15.6 35.4 87.2 8.9 147.1
2010 Net sales $ 373.4 $ 487.7 $ 708.7 $ 87.6 $ 1,657.4
Income from operations 11.9 54.1 33.3 3.0 102.3 Nine Months
Ended
September 30,
North
America
South
America
Europe/Africa/Middle East
Rest ofWorld
Consolidated
2011 Net sales $ 1,171.9 $ 1,423.0 $ 3,334.4 $ 326.1
$ 6,255.4 Income from operations 48.3 106.7 338.3 22.0 515.3
2010 Net sales $ 1,026.4 $ 1,313.2 $ 2,178.9 $ 210.1 $
4,728.6 Income from operations 14.6 138.7 94.7 9.6 257.6
A reconciliation from the segment information to the
consolidated balances for income from operations is set forth
below:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2011 2010 2011 2010 Segment income from
operations $ 147.1 $ 102.3 $ 515.3 $ 257.6 Corporate expenses (22.0
) (17.2 ) (60.3 ) (50.5 ) Stock compensation expense (6.0 ) (3.0 )
(17.0 ) (8.2 ) Restructuring and other infrequent (expenses) income
— (1.2 ) 0.7 (3.3 ) Amortization of intangibles (4.8 )
(5.0 ) (14.1 ) (13.8 ) Consolidated income
from operations $ 114.3 $ 75.9 $ 424.6 $ 181.8
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations,
net income and earnings 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 earnings per share to reported income
from operations, net income and earnings per share for the three
months ended September 30, 2011 and 2010 (in millions, except per
share data):
Three months ended September 30, 2011 2010
IncomeFromOperations
NetIncome(1)
EarningsPerShare(1)
IncomeFromOperations
NetIncome(1)
EarningsPer
Share(1)
As adjusted $ 114.3 $ 84.4 $ 0.87 $ 77.1 $ 63.1 $ 0.66
Restructuring and other infrequent expenses(2)
—
—
—
1.2
0.8
0.01
As reported $ 114.3 $ 84.4 $ 0.87 $ 75.9 $ 62.3 $ 0.65
(1) Net income and earnings per share amounts are after tax.
(2) The restructuring and other infrequent expenses recorded during
the third quarter of 2010 related primarily to severance costs
associated with the Company’s rationalization of its operations in
Denmark and France.
The following is a reconciliation of adjusted income from
operations, net income and earnings per share to reported income
from operations, net income and earnings per share for the nine
months ended September 30, 2011 and 2010 (in millions, except per
share data):
Nine months ended September 30, 2011 2010
Income
From
Operations
Net
Income(1)
Earnings
Per
Share(1)
Income
From
Operations
Net
Income(1)
EarningsPerShare(1)
As adjusted $ 423.9 $ 297.6 $ 3.04 $ 185.1 $ 137.7 $ 1.43
Restructuring and other infrequent (income) expenses(2)
(0.7
)
(0.5
)
—
3.3
2.4
0.02
As reported $ 424.6 $ 298.1 $ 3.04 $ 181.8 $
135.3 $ 1.41 (1) Net income and earnings per share amounts
are after tax. (2) The restructuring and other infrequent income
recorded during the first nine months of 2011 related primarily to
a reversal of approximately $0.9 million of previously accrued
legally required severance payments associated with the
rationalization of the Company’s French operations. The
restructuring and other infrequent expenses recorded during the
first nine months of 2010 related primarily to severance and other
related costs associated with the Company’s rationalization of its
operations in Denmark, Spain, Finland and France.
This earnings release discloses the percentage change in
regional net sales due to currency translation. The following is a
reconciliation of net sales for the three months ended September
30, 2011 at actual exchange rates compared to 2010 adjusted
exchange rates (in millions, except percentages):
Three Months Ended
September 30,
2011 at ActualExchange Rates
2011 at AdjustedExchange Rates (1)
% change from 2010due to
currencytranslation
North America $ 417.7 $ 412.2 1.5 % South America 515.7
485.6 6.2 % Europe/Africa/Middle East 1,054.1 979.6 10.5 % Rest of
World 111.6 100.8 12.3 %
Total $ 2,099.1 $
1,978.2 7.3 %
(1)Adjusted exchange rates are 2010
exchange rates.
The following is a reconciliation of net sales for the nine
months ended September 30, 2011 at actual exchange rates compared
to 2010 adjusted exchange rates (in millions, except
percentages):
Nine Months Ended
September 30,
2011 at ActualExchange Rates
2011 at AdjustedExchange Rates (1)
% change from 2010due to
currencytranslation
North America $ 1,171.9 $ 1,155.6 1.6 % South America
1,423.0 1,314.4 8.3 % Europe/Africa/Middle East 3,334.4 3,098.6
10.8 % Rest of World 326.1 296.8 13.9 %
Total
$ 6,255.4 $ 5,865.4 8.2 %
(1)Adjusted exchange rates are 2010
exchange rates.
The following is a reconciliation of free cash flow to net cash
provided by operating activities for the nine months ended
September 30, 2011 and 2010 (in millions):
2011
2010
Net cash provided by operating activities $ 270.5 $ 4.1
Less: Capital expenditures (187.2 ) (82.8 ) Free cash
flow $ 83.3 $ (78.7 )
Grafico Azioni AGCO (NYSE:AGCO)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni AGCO (NYSE:AGCO)
Storico
Da Ott 2023 a Ott 2024