AGCO Reports Third Quarter Results
Net sales for the first nine months of 2018 were approximately
Third Quarter Highlights
-
Reported regional sales results(1):
North America +12.8%,Europe /Middle East (“EME”) +14.4%,South America +2.8%,Asia/Pacific /Africa (“APA”) +5.7% -
Constant currency regional sales results(1)(2):
North America +13.8%, EME +16.5%,South America +33.1%, APA +9.9% -
Regional operating margin performance:
North America 6.0%, EME 9.3%,South America 4.5%, APA 7.9% - Share repurchase program reduced outstanding shares by approximately 1.2 million during the first nine months of 2018
|
(1) As compared to third quarter 2017 |
|
(2) Excludes currency translation impact. See reconciliation in appendix. |
“AGCO’s solid operational performance across our regional business units
and constructive market developments are driving sales and earnings
growth,” stated Martin Richenhagen, AGCO’s Chairman, President and Chief
Executive Officer. “We delivered sales and operating income improvement
across all regions, with the strongest growth in
Market Update
|
Industry Unit Retail Sales |
||||
| Nine months ended September 30, 2018 |
Tractors Change from Prior Year Period |
Combines Change from Prior Year Period |
||
| North America(1) | 3% | 13% | ||
| South America | (1)% | 7% | ||
| Western Europe(2) | 1% | 17% | ||
|
(1) Excludes compact tractors. |
|
(2) Based on Company estimates. |
“Global crop production for 2018 is expected to be up modestly from
healthy levels in 2017,” continued Mr. Richenhagen. “Robust harvests in
Regional Results
|
AGCO Regional Net Sales (in millions) |
||||||||||||||
| Three Months Ended September 30, | 2018 | 2017 |
% |
% change |
% change from |
|||||||||
| North America | $ | 545.5 | $ | 483.5 | 12.8% | (1.0)% | 3.2% | |||||||
| South America | 281.1 | 273.5 | 2.8% | (30.3)% | 1.7% | |||||||||
| Europe/Middle East | 1,164.5 | 1,017.7 | 14.4% | (2.1)% | 2.3% | |||||||||
| Asia/Pacific/Africa | 223.6 | 211.6 | 5.7% | (4.3)% | 2.9% | |||||||||
| Total | $ | 2,214.7 | $ | 1,986.3 | 11.5% | (5.9)% | 2.5% | |||||||
| Nine Months Ended September 30, | 2018 | 2017 |
% |
% change |
% change from |
|||||||||
| North America | $ | 1,648.9 | $ | 1,344.9 | 22.6% | 0.4% | 8.0% | |||||||
| South America | 682.8 | 747.6 | (8.7)% | (17.3)% | 1.7% | |||||||||
| Europe/Middle East | 3,873.4 | 3,179.7 | 21.8% | 6.8% | 3.3% | |||||||||
| Asia/Pacific/Africa | 554.7 | 506.9 | 9.4% | 2.3% | 2.5% | |||||||||
| Total | $ | 6,759.8 | $ | 5,779.1 | 17.0% | 1.8% | 4.1% | |||||||
|
(1) See appendix for additional disclosures |
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AGCO’s North American net sales increased 22.2% in the first nine months
of 2018 compared to the same period of 2017, excluding the positive
impact of currency translation. Precision Planting, which was acquired
in the fourth quarter of 2017, contributed sales of approximately
Net sales in the South American region increased 8.6% in the first nine
months of 2018 compared to the first nine months of 2017, excluding the
impact of unfavorable currency translation. Sales growth in
Net sales in AGCO’s
Outlook
AGCO’s net sales for 2018 are expected to reach
* * * * *
* * * * *
Safe Harbor Statement
Statements that are not historical facts, including the projections of earnings per share, sales, industry demand, market conditions, commodity prices, currency translation, farm income levels, margin levels, investments in product and technology development, new product introductions, restructuring and other cost reduction initiatives, production volumes, tax rates 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. Our joint ventures with Rabobank, which are controlled by Rabobank and are dependent upon Rabobank for financing as well, finance 40% to 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, can be 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 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, which can adversely affect our reported results of operations and the competitiveness of our products.
- 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.
- Our business increasingly is subject to regulations relating to privacy and data protection, and if we violate any of those regulations or otherwise are the victim of a cyber attack, we could incur significant losses and liability.
- 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 a 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
* * * * *
About
Please visit our website at www.agcocorp.com
| AGCO CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (unaudited and in millions) | ||||||||
|
September 30, |
December 31, |
|||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 292.7 | $ | 367.7 | ||||
| Accounts and notes receivable, net | 992.7 | 1,019.4 | ||||||
| Inventories, net | 2,101.8 | 1,872.9 | ||||||
| Other current assets | 401.8 | 367.7 | ||||||
| Total current assets | 3,789.0 | 3,627.7 | ||||||
| Property, plant and equipment, net | 1,367.8 | 1,485.3 | ||||||
| Investment in affiliates | 419.2 | 409.0 | ||||||
| Deferred tax assets | 108.7 | 112.2 | ||||||
| Other assets | 147.2 | 147.1 | ||||||
| Intangible assets, net | 590.8 | 649.0 | ||||||
| Goodwill | 1,494.4 | 1,541.4 | ||||||
| Total assets | $ | 7,917.1 | $ | 7,971.7 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Current portion of long-term debt | $ | 5.5 | $ | 24.8 | ||||
| Short-term borrowings | 181.3 | 90.8 | ||||||
| Accounts payable | 855.3 | 917.5 | ||||||
| Accrued expenses | 1,425.5 | 1,407.9 | ||||||
| Other current liabilities | 191.5 | 209.6 | ||||||
| Total current liabilities | 2,659.1 | 2,650.6 | ||||||
| Long-term debt, less current portion and debt issuance costs | 1,699.3 | 1,618.1 | ||||||
| Pensions and postretirement health care benefits | 223.7 | 247.3 | ||||||
| Deferred tax liabilities | 121.0 | 130.5 | ||||||
| Other noncurrent liabilities | 245.1 | 229.9 | ||||||
| Total liabilities | 4,948.2 | 4,876.4 | ||||||
| Stockholders’ Equity: | ||||||||
| AGCO Corporation stockholders’ equity: | ||||||||
| Common stock | 0.8 | 0.8 | ||||||
| Additional paid-in capital | 81.8 | 136.6 | ||||||
| Retained earnings | 4,405.4 | 4,253.8 | ||||||
| Accumulated other comprehensive loss | (1,581.9 | ) | (1,361.6 | ) | ||||
| Total AGCO Corporation stockholders’ equity | 2,906.1 | 3,029.6 | ||||||
| Noncontrolling interests | 62.8 | 65.7 | ||||||
| Total stockholders’ equity | 2,968.9 | 3,095.3 | ||||||
| Total liabilities and stockholders’ equity | $ | 7,917.1 | $ | 7,971.7 | ||||
|
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, | ||||||||
| 2018 | 2017 | |||||||
| Net sales | $ | 2,214.7 | $ | 1,986.3 | ||||
| Cost of goods sold | 1,741.0 | 1,557.7 | ||||||
| Gross profit | 473.7 | 428.6 | ||||||
| Selling, general and administrative expenses | 260.5 | 233.2 | ||||||
| Engineering expenses | 83.3 | 80.1 | ||||||
| Restructuring expenses | 1.5 | 3.0 | ||||||
| Amortization of intangibles | 15.3 | 14.3 | ||||||
| Bad debt expense | 1.8 | 0.9 | ||||||
| Income from operations | 111.3 | 97.1 | ||||||
| Interest expense, net | 7.0 | 11.6 | ||||||
| Other expense, net | 19.1 | 18.5 | ||||||
| Income before income taxes and equity in net earnings of affiliates | 85.2 | 67.0 | ||||||
| Income tax provision | 23.9 | 16.9 | ||||||
| Income before equity in net earnings of affiliates | 61.3 | 50.1 | ||||||
| Equity in net earnings of affiliates | 9.4 | 10.7 | ||||||
| Net income | 70.7 | 60.8 | ||||||
| Net loss (income) attributable to noncontrolling interests | 0.4 | (0.1 | ) | |||||
| Net income attributable to AGCO Corporation and subsidiaries | $ | 71.1 | $ | 60.7 | ||||
| Net income per common share attributable to AGCO Corporation and subsidiaries: | ||||||||
| Basic | $ | 0.90 | $ | 0.76 | ||||
| Diluted | $ | 0.89 | $ | 0.76 | ||||
| Cash dividends declared and paid per common share | $ | 0.15 | $ | 0.14 | ||||
| Weighted average number of common and common equivalent shares outstanding: | ||||||||
| Basic | 78.7 | 79.5 | ||||||
| Diluted | 79.7 | 80.2 | ||||||
|
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, | ||||||||
| 2018 | 2017 | |||||||
| Net sales | $ | 6,759.8 | $ | 5,779.1 | ||||
| Cost of goods sold | 5,301.8 | 4,544.8 | ||||||
| Gross profit | 1,458.0 | 1,234.3 | ||||||
| Selling, general and administrative expenses | 796.9 | 690.5 | ||||||
| Engineering expenses | 267.2 | 230.0 | ||||||
| Restructuring expenses | 10.1 | 8.5 | ||||||
| Amortization of intangibles | 49.2 | 41.5 | ||||||
| Bad debt expense | 4.7 | 2.7 | ||||||
| Income from operations | 329.9 | 261.1 | ||||||
| Interest expense, net | 38.5 | 33.6 | ||||||
| Other expense, net | 57.8 | 49.2 | ||||||
| Income before income taxes and equity in net earnings of affiliates | 233.6 | 178.3 | ||||||
| Income tax provision | 73.8 | 64.9 | ||||||
| Income before equity in net earnings of affiliates | 159.8 | 113.4 | ||||||
| Equity in net earnings of affiliates | 26.3 | 30.8 | ||||||
| Net income | 186.1 | 144.2 | ||||||
| Net loss (income) attributable to noncontrolling interests | 0.7 | (2.1 | ) | |||||
| Net income attributable to AGCO Corporation and subsidiaries | $ | 186.8 | $ | 142.1 | ||||
| Net income per common share attributable to AGCO Corporation and subsidiaries: | ||||||||
| Basic | $ | 2.36 | $ | 1.79 | ||||
| Diluted | $ | 2.33 | $ | 1.77 | ||||
| Cash dividends declared and paid per common share | $ | 0.45 | $ | 0.42 | ||||
| Weighted average number of common and common equivalent shares outstanding: | ||||||||
| Basic | 79.2 | 79.5 | ||||||
| Diluted | 80.1 | 80.1 | ||||||
|
See accompanying notes to condensed consolidated financial statements. |
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| AGCO CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (unaudited and in millions) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 186.1 | $ | 144.2 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation | 170.1 | 165.2 | ||||||
| Amortization of intangibles | 49.2 | 41.5 | ||||||
| Stock compensation expense | 33.0 | 31.3 | ||||||
| Equity in net earnings of affiliates, net of cash received | (21.8 | ) | (15.4 | ) | ||||
| Deferred income tax (benefit) provision | (17.7 | ) | 0.7 | |||||
| Other | (1.4 | ) | 2.3 | |||||
| Changes in operating assets and liabilities, net of effects from purchase of businesses: | ||||||||
| Accounts and notes receivable, net | (59.8 | ) | (81.2 | ) | ||||
| Inventories, net | (398.0 | ) | (424.9 | ) | ||||
| Other current and noncurrent assets | (67.3 | ) | (92.4 | ) | ||||
| Accounts payable | (18.4 | ) | 100.0 | |||||
| Accrued expenses | 55.9 | 67.9 | ||||||
| Other current and noncurrent liabilities | 71.2 | 31.6 | ||||||
| Total adjustments | (205.0 | ) | (173.4 | ) | ||||
| Net cash used in operating activities | (18.9 | ) | (29.2 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (138.5 | ) | (139.4 | ) | ||||
| Proceeds from sale of property, plant and equipment | 2.6 | 3.3 | ||||||
| Investment in unconsolidated affiliates | (5.8 | ) | (0.8 | ) | ||||
| Purchase of businesses, net of cash acquired | — | (188.4 | ) | |||||
| Other | 0.4 | — | ||||||
| Net cash used in investing activities | (141.3 | ) | (325.3 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from indebtedness, net | 231.3 | 250.4 | ||||||
| Purchases and retirement of common stock | (84.3 | ) | — | |||||
| Payment of dividends to stockholders | (35.6 | ) | (33.4 | ) | ||||
| Payment of minimum tax withholdings on stock compensation | (3.7 | ) | (6.7 | ) | ||||
| Payment of debt issuance costs | (1.6 | ) | — | |||||
| Investment by or distribution to noncontrolling interests, net | 0.8 | 0.5 | ||||||
| Net cash provided by financing activities | 106.9 | 210.8 | ||||||
| Effects of exchange rate changes on cash and cash equivalents | (21.7 | ) | 26.7 | |||||
| Decrease in cash and cash equivalents | (75.0 | ) | (117.0 | ) | ||||
| Cash and cash equivalents, beginning of period | 367.7 | 429.7 | ||||||
| Cash and cash equivalents, end of period | $ | 292.7 | $ | 312.7 | ||||
|
See accompanying notes to condensed consolidated financial statements. |
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| AGCO CORPORATION AND SUBSIDIARIES |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
| (unaudited, in millions, except share amounts, per share data and employees) |
1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows:
|
Three Months Ended |
Nine Months Ended |
||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Cost of goods sold | $ | 0.8 | $ | 0.8 | $ | 2.7 | $ | 2.4 | |||||||
| Selling, general and administrative expenses | 9.7 | 7.9 | 30.6 | 29.1 | |||||||||||
| Total stock compensation expense | $ | 10.5 | $ | 8.7 | $ | 33.3 | $ | 31.5 | |||||||
2. RESTRUCTURING EXPENSES
From 2014 through 2018, the Company announced and initiated several
actions to rationalize employee headcount at various manufacturing
facilities and administrative offices located in
3. INDEBTEDNESS
Long-term debt at
| September 30, 2018 | December 31, 2017 | |||||||
| 1.056% Senior term loan due 2020 | $ | 231.6 | $ | 239.8 | ||||
| Credit facility, expires 2020 | 390.3 | 471.2 | ||||||
| Senior term loan due 2021 | 115.8 | 119.9 | ||||||
| 5⅞% Senior notes due 2021 | 115.8 | 305.3 | ||||||
| Senior term loans due between 2019 and 2028 | 825.7 | 449.7 | ||||||
| Other long-term debt | 29.4 | 61.0 | ||||||
| Debt issuance costs | (3.8 | ) | (4.0 | ) | ||||
| 1,704.8 | 1,642.9 | |||||||
| Less: Current portion of other long-term debt | (5.5 | ) | (24.8 | ) | ||||
| Total long-debt, less current portion | $ | 1,699.3 | $ | 1,618.1 | ||||
As of
4. INVENTORIES
Inventories at
| September 30, 2018 | December 31, 2017 | ||||||
| Finished goods | $ | 773.4 | $ | 684.1 | |||
| Repair and replacement parts | 601.2 | 605.9 | |||||
| Work in process | 250.9 | 178.7 | |||||
| Raw materials | 476.3 | 404.2 | |||||
| Inventories, net | $ | 2,101.8 | $ | 1,872.9 | |||
5. ACCOUNTS RECEIVABLE SALES AGREEMENTS
The Company has accounts receivable sales agreements that permit the
sale, on an ongoing basis, of a majority of its wholesale receivables in
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
The Company’s finance joint ventures in
6. NET INCOME PER SHARE
A reconciliation of net income attributable to
|
Three Months Ended |
Nine Months Ended |
||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Basic net income per share: | |||||||||||||||
| Net income attributable to AGCO Corporation and subsidiaries | $ | 71.1 | $ | 60.7 | $ | 186.8 | $ | 142.1 | |||||||
| Weighted average number of common shares outstanding | 78.7 | 79.5 | 79.2 | 79.5 | |||||||||||
| Basic net income per share attributable to AGCO Corporation and subsidiaries | $ | 0.90 | $ | 0.76 | $ | 2.36 | $ | 1.79 | |||||||
| Diluted net income per share: | |||||||||||||||
| Net income attributable to AGCO Corporation and subsidiaries | $ | 71.1 | $ | 60.7 | $ | 186.8 | $ | 142.1 | |||||||
| Weighted average number of common shares outstanding | 78.7 | 79.5 | 79.2 | 79.5 | |||||||||||
| Dilutive stock-settled appreciation rights, performance share awards and restricted stock units | 1.0 | 0.7 | 0.9 | 0.6 | |||||||||||
| Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share | 79.7 | 80.2 | 80.1 | 80.1 | |||||||||||
| Diluted net income per share attributable to AGCO Corporation and subsidiaries | $ | 0.89 | $ | 0.76 | $ | 2.33 | $ | 1.77 | |||||||
7. 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
| Three Months Ended September 30, |
North
America |
South
America |
Europe/
Middle East |
Asia/
Pacific/Africa |
Consolidated |
||||||||||||||
| 2018 | |||||||||||||||||||
| Net sales | $ | 545.5 | $ | 281.1 | $ | 1,164.5 | $ | 223.6 | $ | 2,214.7 | |||||||||
| Income from operations | 32.5 | 12.6 | 108.6 | 17.6 | 171.3 | ||||||||||||||
| 2017 | |||||||||||||||||||
| Net sales | $ | 483.5 | $ | 273.5 | $ | 1,017.7 | $ | 211.6 | $ | 1,986.3 | |||||||||
| Income from operations | 27.8 | 9.3 | 96.9 | 15.4 | 149.4 | ||||||||||||||
| Nine Months Ended September 30, |
North
America |
South
America |
Europe/
Middle East |
Asia/
Pacific/Africa |
Consolidated |
||||||||||||||
| 2018 | |||||||||||||||||||
| Net sales | $ | 1,648.9 | $ | 682.8 | $ | 3,873.4 | $ | 554.7 | $ | 6,759.8 | |||||||||
| Income (loss) from operations | 96.9 | (20.7 | ) | 416.1 | 26.9 | 519.2 | |||||||||||||
| 2017 | |||||||||||||||||||
| Net sales | $ | 1,344.9 | $ | 747.6 | $ | 3,179.7 | $ | 506.9 | $ | 5,779.1 | |||||||||
| Income from operations | 54.4 | 14.5 | 330.7 | 23.2 | 422.8 | ||||||||||||||
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, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Segment income from operations | $ | 171.3 | $ | 149.4 | $ | 519.2 | $ | 422.8 | ||||||||
| Corporate expenses | (33.5 | ) | (27.1 | ) | (99.4 | ) | (82.6 | ) | ||||||||
| Stock compensation expense | (9.7 | ) | (7.9 | ) | (30.6 | ) | (29.1 | ) | ||||||||
| Restructuring expenses | (1.5 | ) | (3.0 | ) | (10.1 | ) | (8.5 | ) | ||||||||
| Amortization of intangibles | (15.3 | ) | (14.3 | ) | (49.2 | ) | (41.5 | ) | ||||||||
| Consolidated income from operations | $ | 111.3 | $ | 97.1 | $ | 329.9 | $ | 261.1 | ||||||||
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations, adjusted net income and adjusted net income per share, each of which exclude amounts that are typically included in the most directly comparable measure calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). A reconciliation of each of those measures to the most directly comparable GAAP measure is included below.
The following is a reconciliation of reported income from operations,
net income and net income per share to adjusted income from operations,
net income and net income per share for the three and nine months ended
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||
|
Income From |
Net Income(1) |
Net Income |
Income From |
Net Income(1) |
Net Income |
||||||||||||||||||
| As reported | $ | 111.3 | $ | 71.1 | $ | 0.89 | $ | 97.1 | $ | 60.7 | $ | 0.76 | |||||||||||
| Restructuring expenses(2) | 1.5 | 1.1 | 0.01 | 3.0 | 2.3 | 0.03 | |||||||||||||||||
| As adjusted | $ | 112.8 | $ | 72.2 | $ | 0.91 | $ | 100.1 | $ | 63.0 | $ | 0.79 | |||||||||||
| (1) | Net income and net income per share amounts are after tax. |
| (2) | The restructuring expenses recorded during the three months ended September 30, 2018 and 2017 related primarily to severance costs associated with the Company’s rationalization of certain U.S., European, Chinese and South American manufacturing operations and various administrative offices. |
| (3) | Rounding may impact summation of amounts. |
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||||
|
Income From |
Net Income(1) |
Net Income |
Income From |
Net Income(1) |
Net Income |
||||||||||||||||||
| As reported | $ | 329.9 | $ | 186.8 | $ | 2.33 | $ | 261.1 | $ | 142.1 | $ | 1.77 | |||||||||||
| Restructuring expenses(2) | 10.1 | 7.3 | 0.09 | 8.5 | 6.4 | 0.08 | |||||||||||||||||
| Extinguishment of debt(3) | — | 12.7 | 0.16 | — | — | — | |||||||||||||||||
| Non-cash expense related to waived stock compensation(4) | — | — | — | 4.8 | 4.8 | 0.06 | |||||||||||||||||
| As adjusted | $ | 340.0 | $ | 206.8 | $ | 2.58 | $ | 274.4 | $ | 153.3 | $ | 1.91 | |||||||||||
| (1) | Net income and net income per share amounts are after tax. |
| (2) | The restructuring expenses recorded during the nine months ended September 30, 2018 and 2017 related primarily to severance costs associated with the Company’s rationalization of certain U.S., European, Chinese and South American manufacturing operations and various administrative offices. |
| (3) |
The Company repurchased approximately $185.9 million of its outstanding 5 7/8% senior notes during the three months ended June 30, 2018. The repurchase resulted in a loss on extinguishment of debt of approximately $15.7 million, including associated fees, offset by approximately $3.0 million of accelerated amortization of the deferred gain related to a terminated interest rate swap instrument associated with the senior notes. |
| (4) | The Company recorded approximately $4.8 million of accelerated stock compensation expense during the three months ended March 31, 2017 associated with a waived award declined by the Company’s CEO. |
The following is a reconciliation of targeted net income per share to
adjusted targeted net income per share for the year ended
| Net Income Per Share(1) | |||
| As targeted | $ | 3.35 | |
| Restructuring expenses | 0.09 | ||
| Extinguishment of debt | 0.31 | ||
| As adjusted targeted(2) | $ | 3.75 | |
| (1) | Net income per share amount is after tax. |
| (2) |
The above reconciliation reflects adjustments to full year 2018 targeted net income per share based upon restructuring expenses and other adjustments incurred during the nine months ended September 30, 2018. Full year restructuring expenses could differ based on future restructuring activity. Full year extinguishment of debt includes the extinguishment of the remaining outstanding 5 7/8% senior notes, as well as further debt refinancing actions during the fourth quarter of 2018. |
The following tables set forth, for the three and nine months ended
|
Three Months Ended |
Change due to currency |
Change due to |
|||||||||||||||||||||||
| 2018 | 2017 |
% change |
$ |
% |
$ |
% |
|||||||||||||||||||
| North America | $ | 545.5 | $ | 483.5 | 12.8 | % | $ | (4.9 | ) | (1.0 | )% | $ | 15.4 | 3.2 | % | ||||||||||
| South America | 281.1 | 273.5 | 2.8 | % | (83.0 | ) | (30.3 | )% | 4.7 | 1.7 | % | ||||||||||||||
| Europe/Middle East | 1,164.5 | 1,017.7 | 14.4 | % | (21.1 | ) | (2.1 | )% | 23.2 | 2.3 | % | ||||||||||||||
| Asia/Pacific/Africa | 223.6 | 211.6 | 5.7 | % | (9.0 | ) | (4.3 | )% | 6.1 | 2.9 | % | ||||||||||||||
| $ | 2,214.7 | $ | 1,986.3 | 11.5 | % | $ | (118.0 | ) | (5.9 | )% | $ | 49.4 | 2.5 | % | |||||||||||
|
Nine Months Ended |
Change due to currency |
Change due to |
|||||||||||||||||||||||
| 2018 | 2017 |
% change |
$ |
% |
$ |
% |
|||||||||||||||||||
| North America | $ | 1,648.9 | $ | 1,344.9 | 22.6 | % | $ | 5.6 | 0.4 | % | $ | 107.7 | 8.0 | % | |||||||||||
| South America | 682.8 | 747.6 | (8.7 | )% | (129.3 | ) | (17.3 | )% | 12.6 | 1.7 | % | ||||||||||||||
| Europe/Middle East | 3,873.4 | 3,179.7 | 21.8 | % | 217.6 | 6.8 | % | 104.1 | 3.3 | % | |||||||||||||||
| Asia/Pacific/Africa | 554.7 | 506.9 | 9.4 | % | 11.7 | 2.3 | % | 12.6 | 2.5 | % | |||||||||||||||
| $ | 6,759.8 | $ | 5,779.1 | 17.0 | % | $ | 105.6 | 1.8 | % | $ | 237.0 | 4.1 | % | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181030005509/en/
Source:
AGCO
Greg Peterson, 770-232-8229
Vice President, Investor
Relations
greg.peterson@agcocorp.com
