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WORKING True TO PLAN AGCO Corporation 2002 Annual Report Worldwide Locations Orinoco Negro Amazon a eir ad M a n a r a P Corporate Headquarters Regional Sales Offices Darling Duluth, Georgia, USA Parts Distribution Manufacturing Financial Highlights AGCO Corporation [ in millions, except per share data ] 2002 2001 2000 Net sales $2,922.7 $2,541.5 $2,336.1 Income from operations 104.0 96.7 65.8 Net (loss) income (84.4) 22.6 3.5 Total assets 2,349.0 2,173.3 2,104.2 Stockholders’ equity 717.6 799.4 789.9 Earnings per share(1) $ (1.14) $ 0.33 $ 0.06 Adjusted earnings per share(1)(2) $ 1.17(3) $ 0.52(4) $ 0.32 (1)On a diluted basis. (2)Excludes restructuring and other infrequent expenses and restricted stock compensation expense for all periods. (3)Excludes the cumulative effect of a change in accounting principle and a non-cash deferred tax adjustment. (4)Excludes an extraordinary loss. CONTENTS: Letter to Stockholders . pages 2-7 Business Description. pages 8-13 Financial Review . pages 14-20 Directors and Officers, Stockholder Information . page 21 Cover photo: Challenger MT 800 Series track tractor AGCO Corporation 2002 Annual Report A world of solutions At-a-Glance to meet your growing needs™ AGCO application tractors hay tools equipment combines The diverse selection of AGCO Nobody provides as much hay and Application equipment allows AGCO offers a broad line tractor brands meets specific forage technological leadership farmers to accurately apply of conventional and rotary customer needs around the globe and worldwide products than nutrients and pest/weed control combines to meet the wide and contributes to AGCO leader- AGCO. AGCO hay and forage chemicals thus assuring improved range of specialized crop ship in worldwide unit volume. products support diverse crop and crop production, cost savings, harvest requirements around Horsepowers range from 17 livestock enterprises worldwide. and environmentally controlled the world. to 500. application. Machines are available in various sizes, boom widths, and clearances. MASSEY FERGUSON HESSTON AG CHEM GLEANER • a brand representing reliability • extensive line of superior quality EQUIPMENT • new 5 Series rotaries introduced and quality for over 150 years hay tools and forage equipment • RoGator and TerraGator are in 2002 • models ranging from 17 to 225 • recognized leader in cutting edge industry leaders in pre- and post- • all-new Comfort Tech II cab horsepower offering superior hay tool technology emergent at spraying and fertilizing boosts, operator comfort and value application systems productivity • offers cost-effective solutions NEW IDEA • dry and liquid fertilizer application to today’s agricultural and systems MASSEY FERGUSON consumer needs • full product offering for cost- conscious farmers • Advanced Technology Rotor™ • rich tradition in both hay and LOR*AL provides the industry’s simplest FENDT manure handling • 25-year history of innovative, and most productive rotary combine technology • available from 60 to 310 • durable and efficient accurate, and high-performance engine horsepower application systems • offers rotary and conventional • more than 25,000 infinite-speed • liquid or dry application with models to meet worldwide Vario CVT Fendt tractors are in MASSEY FERGUSON patented Quad Lap spread harvesting needs use worldwide • reliable and durable line of hay pattern technology • a high-tech product for the balers for the European market FENDT professional farmer • sizes available to suit everyone SPRA-COUPE • European line of advanced • strong acceptance in European from small-scale operators to • energized spray process™ conventional combines market for 64 years contractors and industrial users provides better coverage both • horsepower ranges from on top and bottom of plant than 220 to 350 AGCO FENDT conventional sprayers • advanced technology big balers for • 40 years of self-propelled sprayer CHALLENGER • brand was created in 2001 from large growers and custom operators tradition combined AGCO Allis and White • offers 2 models of axial-rotor brands combines to meet global needs • available from 20 to 225 engine CHALLENGER WILLMAR • horsepower ratings of 300 horsepower • full line and efficient products for • material handling excellence and 335 users of all sizes • products for commercial AGCOSTAR applicators and large growers • outstanding features and super power - 360 to 425 horsepower • muscular frame and engine CHALLENGER • expanded product line crowned by world’s highest horsepower production tractor - the 500 horsepower MT865 • available exclusively through the Challenger dealer network Since 1990, AGCO has built a successful global business by providing innovative and reliable agricultural equipment and a growing portfolio of trusted brands. Today, we offer a wide range of products to meet changing customer needs and 22 brands – some of the most trusted names in the industry. implements parts technology AGCO offers implements that Supporting the AGCO family Precision agricultural systems put the power of all its tractors of brands is a worldwide parts are redefining farmers’ efficiency to work – from the smallest distribution system of 20 dedicated and productivity in surprising and subcompact to a 500 HP giant. parts facilities with more than powerful ways. Whether it’s AGCO markets implements 1,323,000 active part numbers. Vario TMS on Fendt tractors or under eight brand names. These quality replacement parts implement control via a Fieldstar are sold through AGCO dealers touch screen, AGCO is a leader. and distributors worldwide. WHITE PLANTERS OEM FIELDSTAR • mounted and pull-type row crop • Original Equipment Manufactured; • brings the science of agriculture to planters, both with rigid and specified by AGCO engineers for farm equipment flex frames design • provides critical field data that can • include proprietary cabs, drive- deliver increased productivity SUNFLOWER trains, rear axles, filters, bearings and track belts • industry’s most user-friendly • a leading producer of tillage, system and a leader in GPS (global seeding and specialty harvesting ® positioning system) technology tools HERITAGE applications • for equipment 10 years old or older MASSEY FERGUSON • with aftermarket suppliers SOILTEQ • extensive line of loaders, mowers, backhoes, rotary REMANUFACTURED • designs and markets customized, cutters and landscaping tools site-specific farming systems to • rebuilt parts for older equipment increase crop yield and farm • worn parts are replaced with new efficiency GLENCOE OEM-specified parts • applies GPS technology to farm • primary and secondary tillage management equipment LUBRICANTS & ACCESSORIES FARMHAND AUTOGUIDE • attract both competitive owners • Auto-GuideTM uses DGPS to automate • front-end loaders, rotary cutters, and loyal AGCO customers and estate groomers steering – reduces operator work • include oil, batteries and twine load – boosts farmers’ efficiency Sales By Product FENDT EPSILON™ SYSTEM • full line of loaders to fit tractors • Epsilon Electronic Parts and Service from 72 to 160 horsepower Information System 58% Tractors • integrates parts, workshop and 17% TYE service books Parts • conservation tillage, deep tillage • dealer updates via the internet 8% Application Equipment and seed drills rolls out worldwide in 2003 7% Combines AGCO 6% Hay & Forage • loaders, mowers, backhoes, rotary cutters and landscaping tools for 4% Implements & Other compact tractors CompanyProfile AGCO Corporation is a world leader in the design, development and production of agricultural equipment and related replacement parts. We market a full line of products under multiple brands through the largest global distribution network in the industry, including approximately 8,450 independent dealers and distributors in more than 140 countries. We provide retail financing through AGCO Finance in North America and through Agricredit in the United Kingdom, France, Germany, Ireland, Spain and Brazil. Since 1990, the company has grown from its initial revenue of $220 million to $2.9 billion in 2002. With shareholders worldwide, AGCO is traded on the New York Stock Exchange under the symbol “AG.” Visit us online at www.agcocorp.com To Our Stockholders Robert J. Ratliff Chairman, President and Chief Executive Officer March 18, 2003 As one of the world’s leading manufacturers of agricultural equipment, AGCO faced a variety of obstacles last year in a very challenging world economy. However, I am pleased to report that our proven business strategies and faithful execution allowed us to record impressive achievements and provide for continued growth in the future. WORKING TRUE TO PLAN Our overall success in 2002 is a testament to the hard work of AGCO personnel and management around the world. By working true to plan, we were able to deliver significant financial results. These include: • a 15% increase in sales worldwide • an increase in Earnings Per Share (EPS) from $0.52 in 2001 to $1.17 in 2002 (excluding special items) • continued gross margin improvement through cost reduction programs • positive cash flow above plan As we continue to make gains in the marketplace, we will ensure that our success translates into significant rewards for our shareholders. TRIBUTE TO LEADERSHIP The challenges for management in 2002 went beyond the normal issues of competitive combat and uncertain markets. Early on the company suffered the loss of two key executives and co-founders, John M. Shumejda, President & CEO and Edward R. Swingle, Senior Vice President of