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AGCO Reports Second Quarter Results

Stocks in this article: AGCO

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 $6.5 million and $12.1 million during the three and six months ended June 30, 2013, respectively. 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 $5.4 million and $10.6 million during the three and six months ended June 30, 2012, respectively.

The Company’s retail finance joint ventures in Brazil and Australia also provide wholesale financing to the Company’s dealers. As of June 30, 2013 and December 31, 2012, these retail finance joint ventures had approximately $95.1 million and $100.6 million, respectively, of outstanding accounts receivable associated with these arrangements. In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world.

5. NET INCOME PER SHARE

The Company’s convertible senior subordinated notes provide for (i) the settlement upon conversion in cash up to the principal amount of the converted notes with any excess conversion value settled in shares of the Company’s common stock, and (ii) the conversion rate to be increased under certain circumstances if the notes are converted in connection with certain change of control transactions. Dilution of weighted shares outstanding will depend on the Company’s stock price for the excess conversion value using the treasury stock method. A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and six months ended June 30, 2013 and 2012 is as follows:

    Three Months Ended June 30,     Six Months Ended June 30,
2013   2012 2013   2012
 
Basic net income per share:
Net income attributable to AGCO Corporation and subsidiaries $ 213.7   $ 204.9   $ 331.7   $ 325.1
Weighted average number of common shares outstanding 97.3   97.2   97.2   97.1
 
Basic net income per share attributable to AGCO Corporation and subsidiaries $ 2.20   $ 2.11   $ 3.41   $ 3.35
 
Diluted net income per share:
Net income attributable to AGCO Corporation and subsidiaries $ 213.7   $ 204.9   $ 331.7   $ 325.1
 
Weighted average number of common shares outstanding 97.3 97.2 97.2 97.1
Dilutive stock-settled appreciation rights, performance share awards and restricted stock awards 0.9 1.0 0.9 1.1
Weighted average assumed conversion of contingently convertible senior subordinated notes 1.1   0.2   1.1   0.6
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share 99.3   98.4   99.2   98.8
 
Diluted net income per share attributable to AGCO Corporation and subsidiaries $ 2.15   $ 2.08   $ 3.34   $ 3.29
 

6. SEGMENT REPORTING

The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement parts. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations for one segment may not be comparable to another segment. Segment results for the three and six months ended June 30, 2013 and 2012 are as follows:

Three Months Ended June 30,   North

America

  South

America

  Europe/Africa/

Middle East

  Asia/

Pacific

 

Consolidated

 
2013
Net sales $ 788.9 $ 540.0 $ 1,599.0 $ 120.3 $ 3,048.2
Income (loss) from operations 121.6 59.7 204.9 (0.8 ) 385.4
 
2012
Net sales $ 733.4 $ 448.5 $ 1,406.9 $ 101.3 $ 2,690.1
Income from operations 95.7 41.7 170.0 5.1 312.5
 
 
Six Months Ended June 30, North

America

South

America

Europe/Africa/

Middle East

Asia/

Pacific

Consolidated

 
2013
Net sales $ 1,413.1 $ 1,005.7 $ 2,792.2 $ 240.3 $ 5,451.3
Income from operations 193.7 108.0 304.6 4.7 611.0
 
2012
Net sales $ 1,299.9 $ 863.9 $ 2,606.7 $ 193.3 $ 4,963.8
Income from operations 145.9 65.6 305.8 6.0 523.3
 

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

    Three Months Ended June 30,     Six Months Ended June 30,
2013   2012 2013   2012
Segment income from operations $ 385.4 $ 312.5 $ 611.0 $ 523.3
Corporate expenses (27.7 ) (24.7 ) (56.0 ) (45.7 )
Stock compensation expense (18.5 ) (10.4 ) (26.4 ) (18.2 )
Amortization of intangibles (12.1 ) (12.5 ) (24.1 ) (24.7 )
Consolidated income from operations $ 327.1   $ 264.9   $ 504.5   $ 434.7  
 

RECONCILIATION OF NON-GAAP MEASURES

This earnings release discloses the percentage change in regional net sales due to the impact of currency translation. The following table sets forth, for the three and six months ended June 30, 2013, the impact to net sales of currency translation by geographical segment (in millions, except percentages):

    Three Months Ended June 30,    

Change due to currencytranslation

2013   2012

% change from2012

$

 

%

 
North America $ 788.9 $ 733.4 7.6 % $ %
South America 540.0 448.5 20.4 % (33.4 ) (7.4 )%
Europe/Africa/Middle East 1,599.0 1,406.9 13.7 % 20.6 1.5 %
Asia/Pacific 120.3   101.3   18.8 % 0.3   0.3 %
 
$ 3,048.2   $ 2,690.1   13.3 % $ (12.5 ) (0.5 )%
 
 
Six Months Ended June 30,

Change due to currencytranslation

2013 2012

% change from2012

$

%

 
North America $ 1,413.1 $ 1,299.9 8.7 % $ (0.4 ) %
South America 1,005.7 863.9 16.4 % (92.8 ) (10.7 )%
Europe/Africa/Middle East 2,792.2 2,606.7 7.1 % 19.9 0.8 %
Asia/Pacific 240.3   193.3   24.3 % (0.1 ) (0.1 )%
 
$ 5,451.3   $ 4,963.8   9.8 % $ (73.4 ) (1.5 )%




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