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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
{NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996}
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 {NO FEE REQUIRED}
FOR THE TRANSITION PERIOD FROM __________ TO ___________.
COMMISSION FILE NUMBER: 0-19898
AGCO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 58-1960019
(STATE OR OTHER JURISIDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
4830 RIVER GREEN PARKWAY, DULUTH, GEORGIA 30136
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 813-9200
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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COMMON STOCK, ($0.01 PAR VALUE) NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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The aggregate market value of common stock held by non-affiliates of
the Registrant as of the close of business on March 14, 1997 was
$1,701,484,000. As of such date, there were 62,458,886 shares of the
registrant's common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the AGCO Corporation Annual Report to Stockholders for the
year ended December 31, 1996 are incorporated by reference in Part II.
Portions of the definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on April 23, 1997 are incorporated by reference in Part
III.
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Item 1. BUSINESS
AGCO Corporation ("AGCO" or the "Company") was incorporated in Delaware
in April 1991. The Company's executive offices are located at 4830 River Green
Parkway, Duluth, Georgia 30136, and its telephone number is 770-813-9200. Unless
otherwise indicated, all references in this Form 10-K to the Company include the
Company's subsidiaries.
THE COMPANY
AGCO is a leading manufacturer and distributor of agricultural
equipment throughout the world. The Company sells a full range of agricultural
equipment and related replacement parts, including tractors, combines, hay tools
and forage equipment and implements. The Company's products are widely
recognized in the agricultural equipment industry and are marketed under the
following brand names: Massey Ferguson, AGCO Allis, GLEANER, Hesston, White,
SAME, Landini, White-New Idea, Black Machine, AGCOSTAR, Glencoe, Tye, Farmhand,
Maxion, IDEAL, Western Combine, PMI, Deutz (South America) and Fendt. The
Company distributes its products through a combination of over 7,500 independent
dealers, wholly-owned distribution companies, associates and licensees. In
addition, the Company provides retail financing in North America, the United
Kingdom, France and Germany through its finance joint ventures with Cooperative
Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland" ("Rabobank").
AGCO was organized in June 1990 by an investment group formed by
management to acquire the successor to the agricultural equipment business of
Allis-Chalmers, a company which began manufacturing and distributing
agricultural equipment in the early 1900s. Since its formation in June 1990,
AGCO has grown substantially through a series of 14 acquisitions for
consideration aggregating approximately $1,222.7 million. These acquisitions
have allowed the Company to broaden its product line, expand its dealer network
and establish strong market positions in several new markets throughout North
America, South America, Western Europe and the rest of the world. The Company
has achieved significant cost savings and efficiencies from its acquisitions by
eliminating duplicative administrative, sales and marketing functions,
rationalizing its dealer network, increasing manufacturing capacity utilization
and expanding its ability to source certain products and components from third
party manufacturers. In addition to acquisitions, the Company has increased its
sales in North America by entering into a substantial number of crossover
contracts with its dealers whereby a dealer carrying one of the Company's brands
also contracts to sell additional AGCO brands or products. The Company has also
grown through successful expansion of its product offerings, particularly
related to the sale of complementary non-tractor products through its
international distribution channel, and new product introductions.
ACQUISITION HISTORY
Hesston Acquisition. In March 1991, the Company acquired Hesston
Corporation ("Hesston"), a leading manufacturer and distributor of hay tools,
forage equipment and related replacement parts, together with over 500 dealer
contracts (the "Hesston Acquisition"). The assets acquired also included
Hesston's 50% interest in a joint venture, Hay and Forage Industries ("HFI"),
between Hesston and Case Corporation ("Case") which manufactures hay and forage
equipment for both parties. Hesston's net sales in its full fiscal year
preceding the acquisition were approximately $91.0 million. The Hesston
Acquisition enabled the Company to provide its dealers with a more complete line
of farm equipment and to expand its dealer network into territories in which the
Company had not previously been represented.
White Tractor Acquisition. In May 1991, the Company acquired the White
Tractor Division ("White") of Allied Products Corporation ("Allied"), together
with over 600 dealer contracts (the "White Acquisition"). White's net sales in
its full fiscal year preceding the acquisition were approximately $58.3 million.
As a result of the White Acquisition, the Company commenced the manufacture of
higher horsepower tractors at its Independence, Missouri facility, ensuring for
AGCO an uninterrupted supply of higher horsepower tractors and increasing
utilization at its Independence facility.
Massey Ferguson North American Acquisition. In January 1993, the
Company entered into an agreement with Varity Corporation ("Varity") to be the
exclusive distributor in the United States and Canada of the Massey Ferguson
line of farm equipment. Concurrently, the Company acquired the North American
distribution operation of Massey Ferguson Group Limited ("Massey") from Varity,
including approximately 1,100 dealer contracts (the "Massey North American
Acquisition"). Net sales attributable to Massey's North American distribution
operation in the full fiscal year preceding the acquisition were approximately
$215.0 million. The Massey North American Acquisition provided AGCO access to
another leading brand name in the agricultural
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equipment industry, and it enabled the Company to expand its dealer network by
entering into a substantial number of crossover contracts.
White-New Idea Acquisition. In December 1993, the Company acquired the
White-New Idea Farm Equipment Division ("White-New Idea") of Allied, together
with approximately 900 dealer contracts (the "White-New Idea Acquisition"). The
White-New Idea Acquisition enabled the Company to offer a more complete line of
planters and spreaders and a broader line of tillage equipment. Of White-New
Idea's net sales of approximately $83.1 million in 1993, approximately 46%
represented sales of products in categories in which the Company previously did
not compete.
Agricredit Acquisition. The Company acquired Agricredit from Varity in
two separate transactions (together, the "Agricredit Acquisition"). The Company
acquired a 50% joint venture interest in Agricredit in January 1993 and acquired
the remaining 50% interest in February 1994. The Agricredit Acquisition has
enabled the Company to provide more competitive and flexible financing
alternatives to end users.
Massey Acquisition. In June 1994, the Company acquired Massey from
Varity, together with Massey's independent dealers and associate and licensee
companies outside the United States and Canada. Massey, with fiscal 1993 net
sales of approximately $898.4 million (including net sales to AGCO of
approximately $124.6 million) (the "Massey Acquisition"), was one of the largest
manufacturers and distributors of tractors in the world. The Massey Acquisition
significantly expanded AGCO's sales and distribution outside North America.
AgEquipment Acquisition. In March 1995, the Company further expanded
its product offerings through its acquisition of AgEquipment Group, a
manufacturer and distributor of farm implements and tillage equipment (the
"AgEquipment Acquisition"). The AgEquipment Acquisition added three brands of
agricultural implements to the Company's product line, including no-till and
minimum tillage products, distributed under the Tye, Farmhand and Glencoe brand
names.
Maxion Acquisition. In June 1996, the Company acquired the agricultural
and industrial equipment business of Iochpe-Maxion S.A. (the "Maxion
Agricultural Equipment Business"), together with approximately 360 dealer
contracts (the "Maxion Acquisition"). The Maxion Agricultural Equipment
Business, with 1995 sales of approximately $265.0 million, was AGCO's Massey
Ferguson licensee in Brazil, manufacturing and distributing agricultural
tractors under the Massey Ferguson brand name, combines under the Massey
Ferguson and IDEAL brand names and industrial loader-backhoes under the Massey
Ferguson and Maxion brand names. The Maxion Acquisition establishes AGCO with
market leadership in the significant Brazilian agricultural equipment market.
Western Combine Acquisition. In July 1996, the Company acquired certain
assets of Western Combine Corporation and Portage Manufacturing, Inc., the
Company's suppliers of Massey Ferguson combines and certain other harvesting
equipment sold in North America (the "Western Combine Acquisition"). The Western
Combine Acquisition provided the Company with access to advanced technology and
will increase the Company's profit margin on certain combines and harvesting
equipment sold in North America.
Agricredit Joint Venture. In November 1996, the Company sold a 51%
interest in Agricredit to a wholly-owned subsidiary of Rabobank. The Company
received total consideration of approximately $44.3 million in the transaction.
The Company retained a 49% interest in Agricredit and now operates Agricredit
with Rabobank as a joint venture (the "Agricredit Joint Venture"). The
Agricredit Joint Venture has continued the business of Agricredit and seeks to
build a broader asset-based finance business through the addition of other lines
of business. The Company has similar joint venture arrangements with Rabobank
with respect to its retail finance companies located in the United Kingdom,
France and Germany.
Deutz Argentina Acquisition. In December 1996, the Company acquired the
operations of Deutz Argentina S.A. ("Deutz Argentina"), together with
approximately 225 dealer contracts (the "Deutz Argentina Acquisition"). Deutz
Argentina, with 1995 sales of approximately $109.0 million, supplies
agricultural equipment, engines and light duty trucks to Argentina and other
markets in South America. The Deutz Argentina Acquisition establishes AGCO as
the dominant supplier of agricultural equipment in Argentina.
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Fendt Acquisition. In January 1997, the Company acquired the operations
of Xaver Fendt GmbH & Co. KG ("Fendt") (the "Fendt Acquisition"). Fendt, which
had 1995 sales of approximately $580.0 million, manufactures and sells tractors
ranging from 45 to 260 horsepower through a network of independent agricultural
cooperatives and dealers in Germany and a network of dealers and distributors
throughout Europe. With this acquisition, AGCO has leading market shares in
Germany and France, two of Europe's largest agricultural equipment markets.
PRODUCTS
Tractors
Tractors are vehicles used to pull farm implements, hay tools, forage
equipment and other farm equipment. The Company participates in three segments
of the tractor market: the compact segment, which includes tractors in the less
than 40 horsepower range; the mid-range segment, which includes tractors in the
40 to 100 horsepower range; and the high horsepower segment, which includes
tractors in excess of 100 horsepower.
All compact tractors are sold under the Massey Ferguson brand name and
are typically used on small farms and in specialty agricultural industries such
as dairies, orchards and vineyards. The Company offers a full range of tractors
in the 40 to 100 horsepower category, including both two-wheel and all-wheel
drive versions. The Company sells mid-range tractors in this category under the
Massey Ferguson, AGCO Allis, White, SAME and Landini brand names. As a result of
recent acquisitions, the Company will also sell mid-range tractors under the
Deutz (South America) and Fendt brand names in 1997. The mid-range tractors are
typically used on small and medium-sized farms and in specialty agricultural
industries. The Company also offers a full range of tractors in the over-100
horsepower segment ranging primarily from 100 to 425 horsepower. High horsepower
tractors are typically used on larger farms and on cattle ranches for hay
production. The Company sells high horsepower tractors under the Massey
Ferguson, AGCO Allis, White, Landini and AGCOSTAR brand names. In 1997, the
Company will also sell high horsepower tractors under the Deutz (South America)
and Fendt brand names. Tractors accounted for approximately 60%, 61% and 51% of
the Company's net sales in 1996, 1995 and 1994, respectively.
Combines
Combines are large, self-propelled machines used for the harvesting of
crops, such as corn, wheat, soybeans and barley. The Company sells combines
under the GLEANER, Massey Ferguson and IDEAL brand names. As a result of the
Deutz Argentina Acquisition, the Company will also sell combines under the Deutz
Fahr brand name in 1997. GLEANER combines utilize a rotary grain handling
system, which provides superior harvesting in moist conditions and over adverse
terrain and ensures maximum yield and grain quality. Depending on the market,
Massey Ferguson combines are sold with conventional or rotary technology while
the IDEAL combines sold in South America utilize conventional technology. All
combines are complemented by a variety of crop-harvesting heads, available in
different sizes, which are designed to maximize harvesting speed and efficiency
while minimizing crop loss. Combines accounted for 11%, 10% and 11% of the
Company's net sales in 1996, 1995 and 1994, respectively.
Hay Tools and Forage Equipment, Implements and Other Products
Hay tools are used to harvest and process hay crops for livestock feed.
Hay tools perform a variety of functions, including mowing and conditioning,
raking, tedding, baling and harvesting. Hay tools include self-propelled
windrowers and tractor-powered mowers, which cut and condition hay crops for
faster drying before forage harvesting or baling; hay tedders and rakes, which
are designed to reduce drying time and place hay crops in windrows; round
balers, which harvest and roll windrowed hay into circular bales; square balers,
which harvest and compress the windrowed hay into solid bales; and forage
harvesters, which are used to cut standing corn crops or windrowed hay crops to
uniform length. The Company sells hay and forage equipment primarily under the
Hesston brand name and, to a lesser extent, the White-New Idea and Massey
Ferguson brand names.
The Company also distributes a wide range of implements, planters and
other equipment for its product lines. Tractor-pulled implements are used in
field preparation and crop management. Implements include disk harrows, which
improve field performance by cutting through crop residue, leveling seed beds
and mixing chemicals with the soil; min-tils, which break up soil and mix crop
residue into topsoil, with or without prior disking; and field cultivators,
which prepare a smooth seed bed and destroy weeds. Tractor-pulled planters apply
fertilizer and place seeds in the field. Other equipment includes tractor-pulled
manure
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spreaders, which fertilize fields with the controlled application of sludge or
solid manure, and loaders, which are used for a variety of tasks including
lifting and transporting hay crops. The Company sells implements, planters and
other products under the Hesston, White-New Idea, Black Machine, Massey
Ferguson, Tye, Farmhand, Glencoe and PMI brand names. As a result of the Deutz
Argentina Acquisition, the Company will also sell agricultural implements under
the Deutz (South America) brand name in 1997. Hay tools and forage equipment,
implements and other products accounted for 12%, 11% and 15% of the Company's
net sales in 1996, 1995 and 1994, respectively.
Replacement Parts
In addition to sales of new equipment, the replacement parts business
is an important source of revenue and profitability for both the Company and its
dealers. The Company sells replacement parts for products sold under all of its
brand names, many of which are proprietary. These parts help keep farm equipment
in use, including products no longer in production. Since most of the Company's
products can be economically maintained with parts and service for a period of
10 to 20 years, each product which enters the marketplace provides the Company
with a potential long-term revenue stream. In addition, sales of replacement
parts typically generate higher gross margins and historically have been less
cyclical than new product sales.
The Company expanded its replacement parts business with sales of a
line of "all makes" parts in North America that are generic to the industry and
are marketed under the Value Line brand name. These products also have
application to competitor's products, enhance the dealers' service capability
and supplement the Company's proprietary products. Replacement parts accounted
for approximately 17%, 18% and 23% of the Company's net sales in 1996, 1995 and
1994, respectively.
MARKETING AND DISTRIBUTION
The Company distributes its products primarily through a network of
independent dealers and distributors. The Company's dealers are responsible for
retail sales to the equipment's end user in addition to after-sales service and
support of the equipment. The Company's distributors may sell the Company
products through a network of dealers supported by the distributor. Through the
Company's acquisitions and dealer development activities, the Company has
broadened its product line, expanded its dealer network and strengthened its
geographic presence in Western Europe, North America, South America and the rest
of the world. The Company's sales are not dependent on any specific dealer,
distributor or group of dealers.
Western Europe
Fully assembled tractors and other Massey Ferguson-branded equipment
are marketed by wholly-owned distribution companies in the United Kingdom,
France, Germany, Norway, Spain, Denmark and Sweden. In addition, the Company
utilizes an associate company to distribute Massey Ferguson-branded products
in Italy. These distribution companies support a combined network of
approximately 1,500 independent dealers in Western Europe. In addition, the
Company sells through independent distributors in the remainder of Western
Europe, which distribute through approximately 500 Massey dealers. As a result
of the Fendt Acquisition, the Company also manufactures and sells Fendt branded
equipment through a network of independent agricultural cooperatives and dealers
in Germany and a network of dealers and distributors throughout Europe. In most
cases, dealers carry competing or complementary products from other
manufacturers. Sales in Western Europe accounted for 43%, 45% and 29% of the
Company's net sales in 1996, 1995 and 1994, respectively.
North America
The Company markets and distributes its farm machinery, equipment and
replacement parts to farmers in North America through a network of dealers
supporting approximately 7,000 dealer contracts. Each of the Company's
approximately 2,800 independent dealers represents one or more of the Company's
distribution lines or brand names. Dealers may also handle competitive and
dissimilar lines of products. The Company intends to maintain the separate
strengths and identities of its brand names and products lines. The Company has
been able to increase sales, as well as dealer focus on its products, by
establishing crossover contracts. Sales in North America accounted for 36%, 38%
and 57% of the Company's net sales in 1996, 1995 and 1994, respectively.
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South America
The Company markets and distributes its farm machinery, equipment and
replacement parts to farmers in South America through several different
networks. In Brazil and Argentina, the Company distributes products directly to
independent dealers supporting either the Massey Ferguson, IDEAL, Maxion or
Deutz (South America) brand names. Outside of Brazil and Argentina, the Company
sells its products in South America through independent distributors. In Brazil,
federal laws are extremely protective of the dealers and prohibit a manufacturer
from selling any of its products in Brazil except through its dealer network.
Additionally, each dealer has the exclusive right to sell its manufacturer's
product in its designated territory and as a result, no dealer may represent
more than one manufacturer. Sales in South America accounted for 4%, 1% and 1%
of the Company's net sales in 1996, 1995 and 1994, respectively.
Rest of the World
Outside Western Europe, North America and South America, the Company
operates primarily through a network of approximately 2,600 independent
distributors and dealers, as well as associates and licensees, marketing the
Company's products and providing customer service support in approximately 100
countries in Africa, the Middle East, Eastern Europe, Australia and Asia. With
the exception of Australia, where the Company directly supports its dealer
network, the Company utilizes independent distributors, associates and licensees
to sell its products. These arrangements allow AGCO to benefit from local market
expertise to establish strong market positions with limited investment. In some
cases, AGCO also sells agricultural equipment directly to governmental agencies.
The Company will also continue to actively support the local production and
distribution of Massey-licensed products by third party distributors, associates
and licensees. Sales outside Western Europe, North America, and South America
accounted for 17%, 16% and 13% of the Company's net sales in 1996, 1995 and
1994, respectively.
In Western Europe and the rest of the world, associates and licensees
provide a significant distribution channel for the Company's products and a
source of low cost production for certain Massey Ferguson products. Associates
are entities in which the Company has an ownership interest, most notably in
India, Morocco and Saudi Arabia. Licensees are entities in which the Company has
no direct ownership interest, most notably in Pakistan, Poland and Turkey. The
associate or licensee generally has the exclusive right to produce and sell
Massey Ferguson equipment in its home country, but may not sell these products
in other countries. The Company generally licenses to these associate companies
certain technology, as well as the right to use Massey Ferguson's trade names.
The Company sells products to associates and licensees in the form of components
used in local manufacturing operations, tractor sets supplied in completely
knocked down ("CKD") kits for local assembly and distribution and fully
assembled tractors for local distribution only. In certain countries, the
arrangements with licensees and associates have evolved to where the Company is
principally providing technology, technical assistance and quality control. In
these situations, licensee manufacturers sell certain tractor models under the
Massey Ferguson brand name in the licensed territory and may also become a
source of low cost production to the Company.
Parts Distribution
In Western Europe, the parts operation is supported by master
distribution facilities in Desford, England and Ennery, France and regional
parts facilities in Spain and Denmark. The Company supports its sales of
replacement parts in North America through its master parts warehouse in
Batavia, Illinois and regional warehouses throughout North America. In South
America, replacement parts are maintained and distributed primarily from its
manufacturing facilities.
Market Conditions and Outlook
The Company's operations are subject to the cyclical nature of the
agricultural industry. Sales of the Company's equipment have been and are
expected to continue to be affected by changes in net cash farm income, farm
land values, weather conditions, the demand for agricultural commodities and
general economic conditions.
The outlook for worldwide sales of agricultural equipment expenditures
remains positive. In North America, as a result of low worldwide grain stocks,
high commodity prices and government payments to farmers under the new U.S. Farm
Bill, net cash farm income has remained at high levels and farmer balance sheets
remain strong enabling farmers to make necessary purchases of
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equipment in 1997. These factors should increase farmers' confidence and result
in continued replacement demand for agricultural equipment.
The Western European agricultural market continues to benefit from
increased export demand and high commodity prices. These items should continue
to support the farmers' replacement demand. Over the longer term, demand for
farm equipment in some parts of Europe is expected to exhibit a slow, modest
decline due to a shift toward fewer but larger farms. This consolidation is
expected to be offset, to some extent, by increased sales of more expensive
higher horsepower equipment to support larger farms.
Beginning in the second half of 1995, the Brazilian agricultural
equipment market experienced a significant decline due to high farm debt levels
and the Brazilian Central Bank's suspension of all loans for agricultural
purposes under the FINAME loan program. Although the loan program has been
reinstated, the high farm debt levels have negatively impacted farm equipment
sales in 1996 and may impact results in 1997. In general, outside of North
America and Western Europe, continued general economic improvement, the
increasing affluence of the population in certain developing countries and the
increased availability of funding sources should positively support equipment
demand. As a result of these favorable market conditions, the Company's
production levels in 1997 are forecasted to be modestly higher than the prior
year.
Dealer Support and Supervision
The Company believes that one of the most important criteria affecting
a farmer's decision to purchase a particular brand of equipment is the quality
of the dealer who sells and services the equipment. The Company provides
significant support to its dealers in order to improve the quality and size of
its dealer network. The Company monitors each dealer's performance and
profitability as well as establishes programs which focuses on the continual
improvement of the dealer. In North America, the Company also identifies open
markets with the greatest potential for each brand and selects an existing AGCO
dealer, or a new dealer, who would best represent the brand in that territory.
AGCO protects each existing dealer's territory and will not place the same brand
within that protected area. Internationally, the Company also focuses on the
development of its dealers. The Company analyzes, on an ongoing basis, the
regions of each country where market share is not acceptable. Based on this
analysis, an additional dealer may be needed in that territory, or a
nonperforming dealer may need to be replaced or refocused on performance
standards.
The Company believes that its ability to offer its dealers a full
product line of agricultural equipment and related replacement parts as well as
its ongoing dealer training and support programs, which focus on business and
inventory management, sales, marketing, warranty and servicing matters and
products, help ensure the vitality and increase the competitiveness of its
dealer network. In addition, the Company maintains dealer advisory groups to
obtain dealer feedback on its operations. The Company believes all of these
programs contribute to the good relations the Company generally enjoys with its
dealers.
The Company agrees to provide dealers with competitive products, terms
and pricing. Dealers are also given volume sales incentives, demonstration
programs and other advertising to assist sales. The Company's competitive sales
programs, including retail financing incentives, and its policy for maintaining
parts and service availability with extensive product warranties are designed to
enhance its dealers' competitive position. Finally, a limited amount of
financial assistance is provided as part of developing new dealers in key market
locations. In general, dealer contracts are cancelable by either party within
certain notice periods.
WHOLESALE FINANCING
Primarily in the United States and Canada, the Company engages in the
standard industry practice of providing dealers with inventories of farm
equipment and replacement parts for extended periods. The terms of the Company's
finance agreements with its dealers vary by region and product line. In the
United States and Canada, dealers are typically not required to make a down
payment, and the Company effectively provides the dealer with the equipment
interest-free for a period of one to twelve months, depending on the product.
Thereafter, dealers are charged interest at varying spreads over the prime rate
until the product is sold. The Company also provides financing to dealers on
used equipment accepted in trade. The Company retains a security interest in all
new and used equipment it finances.
Typically, the sales terms outside the United States and Canada are of
a shorter duration. The sales terms range from 30 day terms to floorplan
financing similar to the arrangements provided to dealers in the United States
and Canada. In many cases, the Company retains a security interest in the
equipment sold on extended terms. In certain international markets, the
Company's
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sales are backed by letters of credit or credit insurance.
RETAIL FINANCING
Through the Agricredit Joint Venture in the United States and Canada
and its retail financing joint ventures located in the United Kingdom, France
and Germany, the Company provides a competitive and dedicated financing source
for AGCO dealers' sales of the Company's products as well as equipment produced
by other manufacturers. These retail finance companies are owned 49% by the
Company and 51% by a wholly-owned subsidiary of Rabobank. Finance programs can
be tailored to prevailing market conditions and can enhance the Company's sales
efforts.
MANUFACTURING AND SUPPLIERS
Manufacturing and Assembly
The Company has consolidated the manufacture of its products in
locations where capacity, technology, or local costs are optimized. Furthermore,
the Company continues to balance its manufacturing resources with externally
sourced machinery, components, and replacement parts to enable the Company to
better control inventory and supply of components. The Company believes that its
manufacturing facilities are sufficient to meet its needs for the foreseeable
future.
Western Europe
The Company's manufacturing operations in Western Europe are performed
in tractor manufacturing facilities located in Coventry, England and Beauvais,
France. The Coventry facility produces Massey Ferguson tractors ranging from 32
to 95 horsepower that are sold worldwide in fully-assembled form or as CKD kits
for final assembly by licensees and associates. The Beauvais facility produces
60 to 180 horsepower tractors sold in fully-assembled form. Consistent with the
Company's United States manufacturing operations, a significant number of
components, including engines and transaxles, are purchased from outside
suppliers. The Company formed a joint venture with Renault Agriculture S.A.
("Renault"), for the manufacture of driveline assemblies for high horsepower
AGCO and Renault tractors at the Company's facility in Beauvais (the "GIMA Joint
Venture"). By sharing overhead and engineering costs, the GIMA Joint Venture has
resulted in a decrease in the cost of these components. As a result of the Fendt
Acquisition, the Company acquired three facilities in Germany located in
Marktoberdorf, Baumenheim and Kempten where Fendt tractors and other products
are manufactured.
North America
The Company currently manufactures and assembles GLEANER combines,
combine heads and 125 to 215 horsepower AGCO Allis and White tractors at its
Independence, Missouri facility. A significant number of components for the
Company's AGCO Allis and White high horsepower tractors and GLEANER combine
products, including engines and transaxles, are manufactured by outside
suppliers. The Company currently leases a manufacturing facility in Coldwater,
Ohio, where it produces its White-New Idea line of hay tools and forage
equipment and implements, Black Machine planters, AGCOSTAR tractors, cultivating
and tillage equipment marketed under the Glencoe brand name and tillage
equipment and loaders marketed under the Farmhand brand name. The Company leases
a manufacturing facility in Lockney, Texas where it produces drill planters and
tillage equipment marketed under the Tye brand name. The Company's Hesston
product line of hay tools and forage equipment is manufactured in Hesston,
Kansas by HFI. The HFI partnership agreement provides for HFI to manufacture hay
tools and forage equipment for sale to the Company and Case at cost. By sharing
the facilities with Case, the Company is able to increase HFI's capacity
utilization and reduce the Company's product cost by sharing overhead and
product development costs. The Company also maintains a facility in Queretaro,
Mexico where tractors are assembled for distribution in the Mexican market.
South America
Through recent acquisitions, the Company has acquired manufacturing
facilities in Brazil and Argentina. In Brazil, the Company currently
manufactures and assembles Massey Ferguson tractors and industrial
loader-backhoes at its facility in Canoas, Rio Grande do Sul. The Company also
acquired a manufacturing facility in Santa Rosa, Rio Grande do Sul where it
produces conventional combines marketed under the Massey Ferguson and IDEAL
brand names. Additionally, the Company acquired three
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manufacturing facilities in Haedo, Araus and San Luis, Argentina. In 1997, the
Company began manufacturing tractors and engine components and assembling light
duty trucks in Haedo. The Company also manufactures combines in Araus and
assembles diesel engines and transaxles in San Luis.
Third-Party Suppliers
The Company believes that managing the level of its company and dealer
inventory is critical to maintaining favorable pricing for its products. Unlike
many of its competitors, the Company externally sources many of its products,
components and replacement parts. This strategy minimizes the Company's capital
investment requirements and allows greater flexibility to respond to changes in
market conditions. As a result of its limited vertical integration relative to
its competitors, the Company believes it is better able to manage company and
dealer inventory levels.
The Company purchases certain products it distributes from third party
suppliers. The Company purchases its AGCO Allis and White tractor lines ranging
from 40 to 130 horsepower and SAME tractors from S+L+H S.p.A., ("SLH"), an
Italian manufacturer. The Company also purchases standard and specialty tractors
from Landini S.p.A. ("Landini"). The Company distributes these tractors under
the Landini brand name in the United States and Canada and under the Massey
Ferguson brand name outside of North America. In addition, certain Massey
Ferguson tractor models are purchased from licensees in Poland and Turkey, and
Massey Ferguson compact tractors are purchased from Iseki & Company, Limited, a
Japanese manufacturer. The Massey Ferguson conventional combine, distributed in
Western Europe and the rest of the world, is manufactured by Dronningborg
Industries a/s, an associated company in which the Company has an ownership
interest, located in Randers, Denmark. The Company also purchases its Massey
Ferguson implements from various third-party suppliers.
In addition to the purchase of machinery, significant components used
in the Company's manufacturing operations, such as engines and axles, are
supplied by third-party companies. The Company selects third-party suppliers
which it believes have the lowest cost, highest quality and most appropriate
technology. The Company also assists in the development of these products or
component parts based upon its own design requirements. The Company's past
experience with outside suppliers has been favorable. Although the Company is
currently dependent upon outside suppliers for several of its products, the
Company believes that, if necessary, alternative sources of supply could be
found.
COMPETITION
The agricultural industry is highly competitive. During the 1980s, the
industry experienced significant consolidation and retrenchment. The Company
competes with several large national and international full-line suppliers, as
well as numerous short-line and specialty manufacturers with differing
manufacturing and marketing methods. The Company's principal competitors on a
worldwide basis are Deere & Company, Case and New Holland N.V. In certain
Western European and South American countries, regional competitors exist which
have significant market share in a single country or a group of countries.
The Company believes several key factors influence a buyer's choice of
farm equipment, including the strength and quality of a company's dealers, the
quality and pricing of products, dealer or brand loyalty, product availability,
the terms of financing and customer service. The Company has improved and
continually seeks to improve in each of these areas but focuses primarily on
increasing the farmers' loyalty to the Company's dealers and overall dealer
organizational quality in order to distinguish itself in the marketplace. See
"Marketing and Distribution."
ENGINEERING AND RESEARCH
The Company makes significant expenditures for engineering and applied
research to improve the quality and performance of its products and to develop
new products. The Company expended approximately $27.7 million (1.2% of net
sales), $24.1 million (1.2% of net sales) and $19.4 million (1.5% of net sales)
in 1996, 1995 and 1994, respectively, on engineering and research.
9
10
PATENTS AND TRADEMARKS, TRADE NAMES AND BRAND NAMES
The Company owns and has licenses to the rights under a number of
domestic and foreign patents, trademarks, trade names and brand names relating
to its products and businesses. The Company defends its patent, trademark and
trade and brand name rights primarily by monitoring competitors' machines,
industry publications and conducting other investigative work. The Company
considers its intellectual property rights, including its rights to use the
AGCO, AGCO Allis, Massey Ferguson, GLEANER, White, Hesston, New Idea, SAME,
Landini, Black Machine, AGCOSTAR, Tye, Farmhand, Glencoe, Maxion, IDEAL, Western
Combine, PMI, Deutz (South America) and Fendt trade and brand names, important
in the operation of its businesses; however, the Company does not believe it is
dependent on any single patent, trademark or trade name or group of patents or
trademarks, trade names or brand names. AGCO, GLEANER, Hesston, Massey Ferguson,
AGCOSTAR, New Idea, Tye, Farmhand and Glencoe are registered trademarks of the
Company.
EMPLOYEES
As of December 31, 1996, the Company employed approximately 7,800
employees, including approximately 2,300 employees in the United States and
Canada. Approximately 500 employees at the Company's Independence, Missouri
facility are covered by a collective bargaining agreement which expires in May
2000. Approximately 600 employees at the Company's Coldwater, Ohio facility are
covered by a collective bargaining agreement which expires in April 1998. In
Western Europe, the Company's manufacturing employees are generally represented
by unions. Approximately 1,300 employees are covered under a collective
bargaining agreement in the United Kingdom which expires in March 1998. In
addition, approximately 650 employees are covered under a collective bargaining
agreement in France which expired in December 1996. The Company is currently in
negotiation with the unions in France relating to the terms of new agreements.
In South America, the Company's manufacturing employees are also generally
represented by unions. As a result of the Fendt Acquisition, the Company's
manufacturing employees in Germany are also generally represented by unions.
ENVIRONMENTAL MATTERS AND OTHER GOVERNMENT REGULATION
The Company is subject to environmental laws and regulations concerning
emissions to the air, discharges of processed or other types of waste water and
the generation, handling, storage, transportation, treatment and disposal of
waste materials. These laws and regulations are constantly changing, and it is
impossible to predict with accuracy the effect they may have on the Company in
the future. The Company has been made aware of possible solvent contamination at
the HFI facility in Hesston, Kansas. The extent of any possible contamination is
being investigated in conjunction with the appropriate state authorities. It is
the Company's policy to comply with all applicable environmental, health and
safety laws and regulations, and the Company believes that any expense or
liability it may incur in connection with any noncompliance with any such law or
regulation or the cleanup of any of its properties will not have a material
adverse effect on the Company. The Company believes it is in compliance, in all
material respects, with all applicable laws and regulations.
The Environmental Protection Agency (the "EPA") has issued regulations
concerning permissible emissions from off-road engines. The Company does not
anticipate that the cost of compliance with the regulations will have a material
impact on the Company.
The Company is subject to various national, federal, state and local
laws affecting its business, as well as a variety of regulations relating to
such matters as working conditions and product safety. A variety of state laws
regulate the Company's contractual relationships with its dealers. These laws
impose substantive standards on the relationship between the Company and its
dealers, including events of default, grounds for termination, non-renewal of
dealer contracts and equipment repurchase requirements. Such state laws could
adversely affect the ability of the Company to rationalize its dealer network on
a timely basis.
The Company's international operations are also subject to
environmental laws, as well as various other national and local laws, in the
countries in which it manufactures and sells it products. The Company believes
that it is in compliance with such laws in all material respects, and the cost
of compliance with such laws in the future will not have a material adverse
effect on the Company.
10
11
REGULATION AND GOVERNMENT POLICY
Domestic and foreign political developments and government regulations
and policies directly affect the agricultural industry in the United States and
abroad and indirectly affect the agricultural equipment business. The
application or modification of existing laws, regulations or policies or the
adoption of new laws, regulations or policies could have an adverse effect on
the Company's business.
The North American Free Trade Agreement ("NAFTA") and the General
Agreement on Tariffs and Trade ("GATT"), in particular, may affect worldwide
agricultural markets. The United States, Canada and Mexico have implemented
NAFTA which reduces internal trade restrictions between the three countries.
Import duties were eliminated for some products on January 1, 1994, while duties
for other economically and politically sensitive commodities and products will
be gradually eliminated over a 15-year period. The Uruguay Round of GATT
concluded in 1994. This agreement promised to reduce agricultural export
subsidies over a period of years beginning in 1995 and grants access for many
products that were previously restricted. The next round of GATT negotiations
are scheduled to occur in 1999. The Company cannot predict with certainty the
effect which existing and future trade agreements may have on the Company's
operations.
FINANCIAL INFORMATION ON GEOGRAPHICAL AREAS
For financial information on geographic areas, see page 49 of the
Annual Report to Stockholders for the year ended December 31, 1996, which is
incorporated herein by reference.
11
12
Item 2. PROPERTIES
The principal properties of the Company as of December 31, 1996 are as
follows:
LEASED OWNED
LOCATION DESCRIPTION OF PROPERTY (SQ. FT.) (SQ. FT.)
- -------- ----------------------- --------- ---------
North America:
Duluth, Georgia ............................. Corporate Office 47,000
Coldwater, Ohio (A).......................... Manufacturing 1,490,000
Hesston, Kansas (B).......................... Manufacturing 1,115,000
Independence, Missouri ...................... Manufacturing 450,000
Lockney, Texas............................... Manufacturing 190,000
Queretaro, Mexico............................ Manufacturing 13,500
Batavia, Illinois............................ Parts Distribution 309,000
Des Moines, Iowa (C)......................... Retail Finance Office 23,850
Kansas City, Missouri ....................... Warehouse 425,000
International:
Coventry, United Kingdom..................... Corporate Office/Manufacturing 4,135,150
Stoneleigh, United Kingdom................... Training Facility/Office 56,400
Beauvais, France............................. Manufacturing 3,724,000
Haedo, Argentina............................. Manufacturing 500,170
Araus, Argentina............................. Manufacturing 156,170
San Luis, Argentina.......................... Manufacturing 57,860
Canoas, Rio Grande do Sul, Brazil............ Manufacturing 430,900
Santa Rosa, Rio Grande do Sul, Brazil........ Manufacturing 297,100
Athis, France................................ Warehouse 229,817
Ennery, France............................... Warehouse 269,100
Tottenham, Victoria Australia................ Warehouse/Parts Distribution 179,960
- --------------
(A) In conjunction with the White-New Idea Acquisition in December 1993,
the Company agreed to purchase the Coldwater, Ohio manufacturing
facility from Allied subject to satisfactory completion of an
environmental audit. During 1995, the Company entered into an agreement
with Allied to lease the Coldwater, Ohio facility for a period of up to
five years. During this time, Allied is responsible for the
environmental clean-up of the facility, including all costs associated
with the clean-up. Upon successful completion of the environmental
clean-up, the Company will acquire the Coldwater, Ohio facility for the
original agreed upon amount of $3.2 million.
(B) Owned by HFI, a joint venture in which the Company has a 50% interest.
(C) Owned by the Agricredit Joint Venture, in which the Company has a 49%
interest.
The Company considers each of its facilities to be in good condition and
adequate for its present use. The Company believes that it has sufficient
capacity to meet its current and anticipated manufacturing requirements.
12
13
Item 3. LEGAL PROCEEDINGS
The Company is a party to various legal claims and actions incidental
to its business. The Company believes that none of these claims or actions,
either individually or in the aggregate, is material to the business or
financial condition of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The dividend and market price information under the heading "Trading
and Dividend Information" on page 19 of the Annual Report to Stockholders for
the year ended December 31, 1996 is incorporated herein by reference.
Item. 6. SELECTED FINANCIAL DATA
The information under the heading "Selected Financial Data" for the
years ended December 31, 1992 through 1996 on page 19 of the Annual Report to
Stockholders for the year ended December 31, 1996 is incorporated herein by
reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 20 through 27 of the
Annual Report to Stockholders for the year ended December 31, 1996 is
incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements of the Registrant and its
subsidiaries included on pages 28 through 50 of the Annual Report to
Stockholders for the year ended December 31, 1996 are incorporated herein by
reference:
Consolidated Statements of Income for the years ended December 31,
1996, 1995 and 1994.
Consolidated Balance Sheets as of December 31, 1996 and 1995.
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
The information under the heading "Quarterly Results" on pages 24 and
25 of the Annual Report to Stockholders for the year ended December 31, 1996 is
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not Applicable.
13
14
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The information under the heading "Election of Directors" and the
information under the heading "Directors Continuing in Office" on page 2 and 3,
respectively, of the Proxy Statement for the Annual Meeting of Stockholders to
be held April 23, 1997 is incorporated herein by reference for information on
the directors of the Registrant. The information under the heading "Executive
Officers" on pages 26 through 28 of the Proxy Statement for the Annual Meeting
of Stockholders to be held April 23, 1997 is incorporated herein by reference
for information on the executive officers of the Registrant. The information
under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" on
pages 28 through 29 of the Proxy Statement for the Annual Meeting of
Stockholders to be held April 23, 1997 is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
The information under the heading "Board of Directors and Certain
Committees of the Board," the information under the heading "Compensation
Committee Interlocks and Insider Participation" and the information under the
heading "Executive Compensation" on pages 3 through 5, page 5 and pages 18
through 20, respectively, of the Proxy Statement for the Annual Meeting of
Stockholders to be held April 23, 1997 are incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the heading "Principal Holders of Common Stock"
on pages 16 through 18 of the Proxy Statement for the Annual Meeting of
Stockholders to be held April 23, 1997 is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the heading "Certain Relationships and Related
Transactions" on page 28 of the Proxy Statement for the Annual Meeting of
Stockholders to be held April 23, 1997 is incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. The following consolidated financial statements of AGCO
Corporation and its subsidiaries, included in the Annual Report of
the registrant to its stockholders for the year ended December 31,
1996, are incorporated by reference in Part II, Item 8:
Consolidated Statements of Income for the years ended December 31,
1996, 1995 and 1994.
Consolidated Balance Sheets at December 31, 1996 and 1995.
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows for the years ended December
31, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
14
15
(a) 2. The following Report of Independent Public Accountants and
the Consolidated Financial Statement Schedule of AGCO
Corporation and its subsidiaries are included herein on pages
F-1 through F-2.
Schedule Description
Report of Independent Public Accountants on Schedule
Schedule II Valuation and Qualifying Accounts
Schedules other than that listed above have been omitted
because the required information is contained in the Notes to
the Consolidated Financial Statements or because such
schedules are not required or are not applicable.
(a) 3. The following exhibits are filed or incorporated by reference as
part of this report.
Exhibit No. Description of Exhibit
----------- ----------------------
3.1 Certificate of Incorporation of the Registrant incorporated by
reference to the Company's Quarterly Report Form 10-Q for the
quarter ended March 31, 1996.
3.2 By-Laws of the Registrant.
4.1 Rights Agreement between and among AGCO Corporation and
Chemical Bank, as rights agent, dated as of April 27, 1994
incorporated by reference to the Company's quarterly report on
Form 10-Q for the quarter ended March 31, 1994.
4.2 Certificate of Designation of the Junior Cumulative Preferred
Stock of the Company incorporated by reference to the
Company's quarterly report on Form 10-Q for the quarter ended
March 31, 1994.
4.4 Indenture between AGCO Corporation and SunTrust Bank, as
Trustee, dated as of March 20, 1996, incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
10.1 HFI Partnership Agreement incorporated by reference to the
Company's Registration Statement on Form S-1 (No. 33-43437)
dated April 16, 1992.
10.2 Joint Venture Agreement between Massey Ferguson S.A., Renault
Agriculture S.A. and Massey Ferguson Group Limited dated July
20, 1994 incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
10.3 Massey Ferguson Finance France SNC Agreement among and between
Massey Ferguson S.A. and DeLage Landen Leasing S.A. dated
September 15, 1992 incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994.
10.4 Shareholders Agreement in respect of Massey Ferguson Finance
Limited among and between Massey Ferguson Limited, DeLage
Landen Financial Services Limited and DeLage Landen B.V. dated
June 19, 1990 incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994.
10.5 Shareholders Agreement dated February 15, 1995 between Massey
Ferguson GmbH and DeLage Landen Leasing GmbH.
10.6 S+L+H Agreement incorporated by reference to the Company's
Registration Statement on Form S-1 (No. 33- 43437) dated April
16, 1992.
10.7 S+L+H Distribution Agreement incorporated by reference to the
Company's Registration Statement on Form S-1 (No. 33-43437)
dated April 16, 1992.
10.8 Tractor Distributor Agreement by and between Landini S.p.A.
and AGCO Corporation dated February 1, 1995 incorporated by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994.
10.9 Deferred Compensation Plan incorporated by reference to the
Company's Registration Statement on Form S-1
15
16
(No. 33-43437) dated April 16, 1992.
10.10 Stock Option Plan incorporated to the Company's Registration
Statement on Form S-1 (No. 33-43437) dated April 16, 1992.
10.11 Form of Stock Option Agreements (Statutory and Nonstatutory)
incorporated by reference to the Company's Registration
Statement on Form S-1 (No. 33-43437) dated April 16, 1992.
10.12 Amendment to the 1991 Stock Option Plan incorporated by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992.
10.13 Amended and Restated Long-Term Incentive Plan incorporated by
reference to the Company's Proxy Statement relating to the
1996 Annual Meeting.
10.14 Nonemployee Director Stock Incentive Plan incorporated by
reference to the Company's Proxy Statement relating to the
1995 Annual Meeting.
10.15 Management Incentive Compensation Plan incorporated by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995.
10.16 Purchase and Sale Agreement between and among AGCO Corporation
and Varity Holdings Limited, Varity GmbH, Massey Ferguson
GmbH, Massey Ferguson Industries Limited, Massey Ferguson
(Delaware) Inc. and Varity Corporation dated as of April 26,
1994 incorporated by reference to the Company's quarterly
report on Form 10-Q for the quarter ended March 31, 1994.
10.17 Credit Agreement dated as of January 14, 1997 among AGCO
Corporation, AGCO Canada, Ltd., Massey Ferguson Manufacturing
Limited, Massey Ferguson Limited, AGCO Limited, Massey
Ferguson S.A., AGCO Holding B.V., and Massey Ferguson GmbH,
the lenders listed on the signatures pages thereof;
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch ("Rabobank"), SunTrust
Bank Atlanta, and Deutsche Bank AG, New York Branch, as
Co-Managers; Deutsche Bank Canada, as Canadian administrative
agent, and Rabobank, as administrative agent for the lenders,
as amended by the parties thereto on February 24, 1997.
10.18 Limited Liability Company Agreement of Agricredit Acceptance
LLC dated November 1, 1996.
10.19 Agreement dated June 27, 1996 by and between Iochpe-Maxion
S.A. and AGCO Corporation incorporated by reference to the
Company's current report on Form 8-K dated June 28, 1996.
10.20 Engine Supply Agreement dated June 27, 1996 by and between
Iochpe-Maxion S.A. and AGCO Corporation incorporated by
reference to the Company's current report on Form 8-K dated
June 28, 1996.
10.21 Employment and Severance Agreement by and between AGCO
Corporation and Robert J. Ratliff incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
10.22 Employment and Severance Agreement by and between AGCO
Corporation and J-P Richard.
10.23 Employment and Severance Agreement by and between AGCO
Corporation and John M. Shumejda incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
10.24 Employment and Severance Agreement by and between AGCO
Corporation and James M. Seaver incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
10.25 Employment and Severance Agreement by and between AGCO
Corporation and Daniel H. Hazelton incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
16
17
11.0 Statement re: Computation of Per Share Earnings.
12.0 Statement re: Computation of Earnings to Combined Fixed
Charges.
13.0 Portions of the AGCO Corporation Annual Report to
Stockholders for the year ended December 31, 1996 expressly
incorporated herein by reference.
21.0 Subsidiaries of the Registrant.
23.0 Consent of Arthur Andersen LLP, independent public
accountants.
27.1 Financial Data Schedule (filed for SEC reporting purposes
only)
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated November 1, 1996
disclosing the sale of a 51% interest in Agricredit Acceptance Company,
the Company's wholly-owned retail finance subsidiary in North America,
to a wholly-owned subsidiary of Cooperatieve Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland" (together, "Rabobank").
17
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AGCO Corporation
By: /s/ J-P Richard
------------------------------
J-P Richard
President and
Chief Executive Officer
and Director
Dated: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Robert J. Ratliff Chairman of the Board March 28, 1997
- -------------------------------
Robert J. Ratliff
/s/ J-P Richard President and Chief Executive Officer March 28,1997
- ------------------------------- and Director
J-P Richard (Principal Executive Officer)
/s/ Chris E. Perkins Vice President and Chief Financial March 28, 1997
- ------------------------------- Officer (Principal Financial Officer and
Chris E. Perkins Principal Accounting Officer)
/s/ Henry J. Claycamp Director March 28, 1997
- -------------------------------
Henry J. Claycamp
/s/ William H. Fike Director March 28, 1997
- -------------------------------
William H. Fike
/s/ Gerald B. Johanneson Director March 28, 1997
- -------------------------------
Gerald B. Johanneson
/s/ Richard P. Johnston Director March 28, 1997
- -------------------------------
Richard P. Johnston
/s/ J. Patrick Kaine Director March 28, 1997
- -------------------------------
J. Patrick Kaine
/s/ Alan S. McDowell Director March 28, 1997
- -------------------------------
Alan S. McDowell
Director March 28, 1997
- -------------------------------
Charles S. Mechem, Jr.
/s/ Hamilton Robinson, Jr. Director March 28, 1997
- -------------------------------
Hamilton Robinson, Jr.
18
19
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)(2)
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 1996
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and
Stockholders of AGCO Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated balance sheets of AGCO CORPORATION and SUBSIDIARIES as of December
31, 1996 and 1995 and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1996, and have issued our report thereon dated February 5,
1997. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The accompanying Schedule II-Valuation and
Qualifying Accounts is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 5, 1997
F-1
21
SCHEDULE II
AGCO CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
ADDITIONS
----------------------
CHARGED CHARGED
BALANCE AT TO COSTS (CREDITED) BALANCE
BEGINNING ACQUIRED AND TO OTHER AT END
DESCRIPTION OF PERIOD BUSINESSES EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
----------- ---------- ---------- -------- ---------- ---------- ---------
(IN THOUSANDS)
YEAR ENDED DECEMBER 31, 1996
Allowances for doubtful receivables:
Equipment Operations .......................... $ 62,547 $ 3,325 $ 91,459 $ -- $(81,505) $ 75,826
======== ======== ======== ====== ======== ========
YEAR ENDED DECEMBER 31, 1995
Allowances for doubtful receivables:
Equipment Operations .......................... $ 60,064 $ 2,244 $ 83,970 $ -- $(83,731) $ 62,547
-------- -------- -------- ------ -------- --------
Finance Company ............................... 10,042 -- 4,279 -- (1,507) 12,814
-------- -------- -------- ------ -------- --------
Consolidated receivable allowances .......... $ 70,106 $ 2,244 $ 88,249 $ -- $(85,238) $ 75,361
======== ======== ======== ====== ======== ========
YEAR ENDED DECEMBER 31, 1994
Allowances for doubtful receivables:
Equipment Operations .......................... $ 41,327 $ 18,102 $ 66,863 $ -- $(66,228) $ 60,064
-------- -------- -------- ------ -------- --------
Finance Company ............................... -- 8,709 4,691 -- (3,358) 10,042
-------- -------- -------- ------ -------- --------
Consolidated receivable allowances .......... $ 41,327 $ 26,811 $ 71,554 $ -- $(69,586) $ 70,106
======== ======== ======== ====== ======== ========
F-2
22
EXHIBIT INDEX
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
3.1 Certificate of Incorporation of Registrant. *
3.2 By-Laws of the Registrant. -
4.1 Rights Agreement between and among AGCO Corporation and Chemical Bank. *
4.2 Certificate of Designation of the Junior Cumulative Preferred Stock of the Company. *
4.4 Indenture between AGCO Corporation and SunTrust Bank, as Trustee. *
10.1 HFI Partnership Agreement. *
10.2 Joint Venture Agreement between Massey Ferguson S.A., Renault Agriculture S.A. *
and Massey Ferguson Group Limited.
10.3 Massey Ferguson Finance France SNC Agreement among and between Massey Ferguson S.A. *
and DeLage Landen Leasing S.A.
10.4 Shareholders Agreement in respect of Massey Ferguson Finance Limited among and between Massey *
Ferguson Limited, DeLage Landen Financial Services Limited and DeLage Landen B.V.
10.5 Shareholders Agreement between Massey Ferguson GmbH and DeLage Landen Leasing GmbH. -
10.6 S+L+H Agreement. *
10.7 S+L+H Distribution Agreement. *
10.8 Tractor Distributor Agreement by and between Landini S.p.A. and AGCO Corporation. *
10.9 Deferred Compensation Plan. *
10.10 Stock Option Plan. *
10.11 Form of Stock Option Agreements (Statutory and Nonstatutory). *
10.12 Amendment to the 1991 Stock Option Plan. *
10.13 Amended and Restated Long-Term Incentive Plan. *
10.14 Nonemployee Director Stock Incentive Plan *
10.15 Management Incentive Compensation Plan. *
10.16 Purchase and Sale Agreement between and among AGCO Corporation and Varity Holdings *
Limited, Varity GmbH, Massey Ferguson GmbH, Massey Ferguson Industries Limited, Massey
Ferguson (Delaware) Inc. and Varity Corporation.
10.17 Credit Agreement dated as of January 14, 1997, among AGCO Corporation, AGCO Canada, Ltd., -
Massey Ferguson Manufacturing Limited, Massey Ferguson Limited, AGCO Limited, Massey
Ferguson S.A., AGCO Holding B.V., Massey Ferguson GmbH and the lenders listed on the
signature pages thereof, Cooperatieve Centrale Raiffesen - Boerenleenbank B.A., "RABOBANK
NEDERLAND", New York Branch ("Rabobank"),SunTrust Bank, Atlanta, and Deutsche Bank AG,
New York Branch, as Co-Managers; Deutsche Bank Canada, as Canadian Administrative
Agent and Rabobank, as Administrative Agent for the lenders, as amended by the parties thereto
on February 24, 1997.
10.18 Limited Liability Company Agreement of Agricredit Acceptance LLC -
10.19 Agreement dated June 27, 1996 by and between Iochpe-Maxion S.A. and AGCO Corporation *
10.20 Engine Supply Agreement dated June 27, 1996 by and between Iochpe-Maxion S.A. and AGCO *
Corporation
10.21 Employment and Severance Agreement by and between AGCO Corporation and Robert J. Ratliff. *
10.22 Employment and Severance Agreement by and between AGCO Corporation and J-P Richard. -
10.23 Employment and Severance Agreement by and between AGCO Corporation and John M. Shumejda. *
10.24 Employment and Severance Agreement by and between AGCO Corporation and James M. Seaver. *
10.25 Employment and Severance Agreement by and between AGCO Corporation and Daniel H. Hazelton. *
11.0 Statement re: Computation of Per Share Earnings. -
12.0 Statement re: Computation of Earnings to Combined Fixed Charges. -
13.0 Portions of AGCO Corporation Annual Report to Stockholders for the year ended December 31, 1996. -
21.0 Subsidiaries of the Registrant. -
23.0 Consent of Arthur Andersen LLP, independent public accountants. -
27.1 Financial Data Schedule -
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* Incorporated herein by reference