Accounts Receivable Sales Agreements |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Transfers and Servicing [Abstract] | |
| Accounts Receivable Sales Agreements | ACCOUNTS RECEIVABLE SALES AGREEMENTS The Company’s finance joint ventures provide retail financing and wholesale financing to its dealers. The terms of the financing arrangements offered to the Company’s dealers are similar to arrangements the finance joint ventures provide to unaffiliated third parties. In addition, the Company transfers, on an ongoing basis, a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. Under the various joint venture agreements, Rabobank or its affiliates provide financing to the joint venture companies. AGCO has a 49% interest in those finance equity joint ventures. To better align with evolving market dynamics and increasing regulatory and compliance requirements, on April 30, 2026, the Company executed an Interests Purchase Agreement and Share Purchase Agreement (collectively the “Agreements”) with wholly owned subsidiaries of Rabobank to sell its 49% equity interests in the joint ventures in the U.S. and Canada, AGCO Finance LLC and AGCO Finance Canada, Ltd. (collectively the “North America AGCO Finance joint ventures”), respectively, for aggregate consideration of approximately $188.4 million. The consideration consisted of (i) approximately $168.4 million, representing the carrying value of the Company's equity interests in the North America AGCO Finance joint ventures, previously included in “Investments in affiliates” on the Company's Condensed Consolidated Balance Sheets, and (ii) approximately $20.0 million, representing the estimated future net earnings associated with the run-off of the North America AGCO Finance portfolios existing as of the transaction date, which was recognized in “Other expense, net” within the Company's Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2026. The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The cash received from receivables sold under these accounts receivable sales agreements that remain outstanding as of June 30, 2026 and December 31, 2025 was approximately $1.8 billion and $2.1 billion, respectively. Under the terms of the accounts receivable sales agreements in the U.S., Canada, Europe and Brazil, the Company pays the respective AGCO Finance entities a subsidized interest payment with respect to the accounts receivable sales agreements. These fees are reflected within losses on the sales of receivables included within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations. The Company does not service the receivables after the sale occurs and does not maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales agreements and determined that receivables sold under these agreements should be accounted for as off-balance sheet transactions. In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world. The cash received from trade receivables sold under factoring arrangements that remain outstanding as of June 30, 2026 and December 31, 2025 was approximately $257.2 million and $270.5 million, respectively. Under these arrangements, the Company is required to continue to service the sold receivables at market rates. The Company does not maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales agreements and determined that receivables sold under these agreements should be accounted for as off-balance sheet transactions. Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $21.1 million and $39.7 million during the three and the six months ended June 30, 2026, respectively. Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $19.8 million and $38.7 million during the three and the six months ended June 30, 2025, respectively. The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers. As of June 30, 2026 and December 31, 2025, these finance joint ventures had approximately $112.2 million and $107.5 million, respectively, of outstanding accounts receivable associated with these arrangements. In certain foreign countries, the Company invoices its finance joint ventures directly and the finance joint ventures retain a form of title to the goods delivered to dealers until the dealer makes payment so that the finance joint ventures can recover the goods in the event of dealer or end customer default on payment. This occurs as the laws of some foreign countries do not provide for a seller’s retention of a security interest in goods in the same manner as established in the United States Uniform Commercial Code. The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment. The dealer or distributor may not return equipment or replacement parts to the Company while its contract with the finance joint venture is in force, and can only return the equipment to the retail finance joint venture with penalties that would generally not make it economically beneficial to do so.
|