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RE: DEFINING

2008 Annual Report

43341_Agco_AR_Cover.indd A1 2/23/09 10:49:55 AM RE: DEFINING AGRICULTURE

Agriculture around the world is changing. Those who adapt, will survive. Those who embrace, will prosper.

AGCO is embracing change. Agriculture is changing faster than ever before. Key drivers fueling the future development of our industry include population growth, changing diets, scarcity of land, emerging market expansion, increased mechanization and biofuel production. In these changing times, AGCO is helping farmers to meet these challenges head on. As a leading global manufacturer of agricultural equipment, AGCO offers a full-line of , combines, self-propelled sprayers, forage and tillage equipment, implements and hay tools. AGCO products are distributed through more than 2,800 independent dealers and distributors in more than 140 countries worldwide. Our products are sold through four core brands: Challenger®, ®, ® and ®, providing equipment to help farmers respond to today’s high demands. The breadth of our product line, our extensive global reach and our technological solutions help our customers not only survive today’s changing landscape, but to also prosper.

Financial highlights (In millions, except per share amounts) 2008 2007 Change Net sales...... $ 8,424.6 $ 6,828.1 23.4% Income from operations ...... 565.0 394.8 43.1% Net income ...... 400.0 246.3 62.4% Total assets ...... 4,954.8 4,787.6 3.5% Stockholders’ equity ...... 1,957.0 2,043.0 (4.2%) Earnings per share(1) ...... $ 4.09 $ 2.55 60.4% Adjusted earnings per share(2) ...... $ 4.09 $ 2.52 62.3%

(1) On a diluted basis. (2) For a reconciliation of adjusted earnings per share, see footnote 1 on page 20.

1 AGCO is a leading manufacturer Our brands offer a full-line of agricultural equipment. of products. AGCO provides high-tech solutions. Our customers farm in over 140 countries. Our brands are among the most Our equipment is built to the trusted in our industry. highest standards of design and .

6 7 Our products are helping farmers THIS IS AGCO feed the world. AGCO is the largest pure play, full-line equipment manufacturer focused exclusively on agriculture. Just as our logo implies, we understand agriculture. Our dedication and synergies across our family of brands result in a unique responsiveness to the many changes affecting our industry and our customers, today.

Our Vision Our Values High-tech solutions for professional • Exceed customer expectations. farmers feeding the world. • Be the preferred supplier for our dealers. Our Mission • Be the preferred employer Profi table growth through superior in our industry. customer service, innovation, quality • Deliver highest quality products and commitment. and services. • Maintain high ethics and act as a good corporate citizen. • Preserve the traditions and value of our brands. • Provide superior returns to our stockholders.

Contents Financial highlights 1 RE: Defi nition “Agriculture” This is AGCO 2 Chairman’s statement 3-4 noun Our Regions 5-6 Our Brands 7-8 The science, art or occupation concerned with cultivating land; farming. Our Support 9-10 Our People 11-12 Our Customers 13-14 Agriculture has evolved into a highly mechanized industry that leverages Our Strategy 15-16 technology to improve production and profi tability. Board of Directors & Senior Management 17-18 Forward-looking statements 19 Financial review 20-25 Company information 26

2 CHAIRMAN’S STATEMENT

ADJUSTED EARNINGS SALES BY SALES BY PER SHARE PRODUCT GEOGRAPHIC REGION

2008 $4.09 Tractors 67% EAME* 58% 2007 $2.52 Parts 12% 21% 2006 $1.12 Implements and other 7% 18% Combines 6% Asia Pacific 3% Application equipment 4% Hay and forage 4% * Europe, Africa, Middle East

Fellow Stockholders,

2008 was a successful year for AGCO. We 2008 performance Investing in new products and technology Improving our effi ciency and productivity The developing markets in the Commonwealth AGCO’s robust operational performance and delivered record sales and earnings, introduced For 2008, AGCO’s sales were $8.4 billion, up The quality and performance of our products Our production teams are focused on improved of Independent States provide a signifi cant the steps taken to reduce our debt over the signifi cant innovations across our product over 23 percent compared to 2007. Earnings are instrumental to AGCO’s vision of providing performance across the Company, reinforcing growth opportunity for AGCO. There is last few years have positioned AGCO to better portfolio and made key investments positioning per share grew more than 60 percent and high-tech solutions to professional farmers. quality as a core value by utilizing a program an immense amount of farmland in Russia, deal with the current turmoil in the fi nancial AGCO for future growth. The year began with exceeded $4.00 for the fi rst time in AGCO’s We have steadily increased our research and called AGCO Improvement Methods, or AIM. Ukraine and Kazakhstan being farmed with markets. AGCO Finance, our with a strong global economy, accessible credit, high history. The strength of our markets continued development spending over the last six years, This new program uses three proven approaches: ineffi cient machinery. Over the last several Rabobank, continues to be ready to support our commodity prices and plenty of optimism. By to produce very positive results. In our Europe/ and compared to 2002, we have tripled it to Six Sigma; lean manufacturing; and continuous years, renewed economic development has customers’ retail fi nancing needs. As we look to year-end, we were experiencing disruption in Africa/Middle East segment, sales exceeded nearly $200 million in 2008. We are focusing improvement. Many of our factories individually sparked increased demand for agricultural the future, our strong balance sheet will provide the fi nancial markets unlike any we have seen $4.9 billion and operating margins reached on new technology for our high-horsepower implemented these programs; however, technology. The current fi nancial situation a solid foundation for profi table growth. in decades. The global fi nancial crisis spread to ten percent for the second consecutive year. tractors, introducing new products that fi ll AIM marks the fi rst time AGCO has utilized a has severely limited the availability of credit the world economy and today we face a more Robust sales growth and the positive impact regional product niches, and building our consistent approach across all of our factories. in this region. When the credit markets recover, Our success is built on strong partnerships with challenging operating environment. of cost reduction initiatives helped our harvesting business. Our technology initiatives These initiatives are providing a solid range the key to our success in Russia and East customers, employees, investors and suppliers. North American business return to operating are focused on bringing customer-friendly of tools to employees, empowering them to and Central Europe will be the expansion In a world of increasing uncertainty, we believe Looking out beyond the current issues, profi tability in 2008. In South America, technologies to help farmers become more drive out excess waste, eliminate non-value- of our distribution. We are making signifi cant there is substantial growth still to come. We the opportunities for the global agricultural produced record industry sales productive, more effi cient, more environmentally added tasks, and streamline production and investments in this region to grow our footprint, look forward to delivering innovative products equipment industry and AGCO are signifi cant. and generated record AGCO sales of nearly responsible and, ultimately, more profi table. administrative processes – all focused on better increase our dealer training and upgrade our and services that create new opportunities The long-term trends that have increased $1.5 billion. All this was achieved in a year serving the customer. The fi nancial benefi ts parts and service support to improve the service for AGCO, our customers and our dealers. demand for grains and lowered grain inventories when we made signifi cant investments in The new Massey Ferguson 8690 is a great of lower inventories and reduced expenses experience of our customers. Your support enables us to pursue these are still intact. The growing population, the research and development and other example of our technology investment. The are expected to be realized through our opportunities, and I want to thank you for increasing need for food, improving diets productivity initiatives. most powerful and technologically advanced implementation of best practices, which are Today, China is one of the world’s largest your continued investment in our company. and rising demand for energy will continue tractor ever produced by Massey Ferguson, identifi ed as part of a rigorous performance markets for small, low technology agricultural to support healthy, long-term basics for the We have products and the right technology the 8690 made its public debut at the Innov- evaluation performed at each location. tractors. Economic progress in this region has agricultural industry. As farmers seek to meet to compete effectively in today’s dynamic Agri farm show in France last November. At driven more automation to farms. The sales growing food demands and to offset higher marketplace. To ensure AGCO continues 370hp, it is not only the world’s most powerful Improving our product costs through world of high-horsepower tractors, which are AGCO’s production costs, the rate of mechanization to improve its competitive position and its conventional four-wheel drive tractor, it also class procurement has been another major strength, are still relatively small. Over time, is increasing, offering signifi cant opportunities. performance, we have initiatives in place is the fi rst equipped with industry-leading focus. Operating with a global perspective farm consolidation in China is expected to We are working hard to ensure that AGCO aimed at growing sales, controlling costs e3 Selective Catalytic Reduction (SCR) exhaust is now allowing us to leverage the scale of provide an opportunity for larger, more remains well-positioned to take advantage and better utilizing capital. Our strategy is treatment, making it the cleanest emission our business with global purchasing initiatives. productive farm machinery. We are continuing of these global trends, while continuing to focused on three areas: tractor in its class, delivering unparalleled Our increased sourcing from Asia and Eastern to explore joint-venture opportunities in China Martin Richenhagen strengthen our market position in the coming fuel economy. The 8690 was named Tractor Europe is also gaining traction. In 2009, we that would give us access to distribution and Chairman, President and Chief Executive Offi cer years. The following pages tell the story of a • increase investments in research and of the Year 2009 at the EIMA Show in Bologna, expect to triple our purchases from low cost production capability for both the local market company delivering consistent performance development to provide new products Italy and also won the Golden Tractor Design locations. Our expectation is a signifi cant cost and for sourcing to other regions. – a company moving forward with a clear and leading-edge technology; Award. This is an excellent example of AGCO’s saving on resourced components and parts. strategic agenda. • enhance the effi ciency and productivity commitment to strengthen its leadership in We are fortunate to have over 15,000 dedicated of our manufacturing and purchasing technology, performance and environmental Emerging markets and opportunities employees committed to delivering products functions; and responsibility. Agriculture continues to be an important part and services to make our customers more • improve distribution to expand our reach of the Brazilian economy and an important effi cient and more productive. Our legacy of and upgrade our customer service to grow source of income growth. Unlike most of the service is built on a strong foundation of solid our business. developed agricultural markets, Brazil holds values and ethical management. By respecting signifi cant opportunity for farming expansion people and supporting its communities, AGCO and will benefi t from the world’s growing has positioned itself as a trusted neighbor and demand for both food and fuel. Brazil is already valued employer. one of the leading exporters of soybeans, sugar and coffee and is a leading producer of sugar cane-based ethanol. Mandates for bio-diesel usage increases are expected to drive more production in the coming years.

3 4 OUR REGIONS

AGCO is the largest pure play, full-line agricultural DRIVERS FOR GROWTH AGRICULTURAL ALTERNATIVE FARM AGRICULTURAL equipment manufacturer. Our brands are sold in more than COMMODITIES FUELS INCOME EQUIPMENT 140 countries through one of the largest distribution networks in the industry.

Global presence Europe, Africa and Middle East North America South America Asia Pacifi c Strength in our Our global activities are organized into four There are growing long-term opportunities We see our principal opportunities in the We have a varied and exciting set of operations During 2008, we saw improved market global markets geographic regions – the largest of which in Eastern Europe and particularly in Russia. development of our products to meet the in South America. Our strong market positions demand in Australia and New Zealand. We are is the Europe, Africa, and Middle East (EAME) This region is increasingly implementing needs of the smaller-scale and professional in and Brazil are helping us make focused on our goal of growing market share region. North America is our second largest Western-style agriculture practices, using farmer segments. We are committed to the most of the extensive opportunities in the while responding to the opportunities in the region, followed by South America and modern agricultural equipment to carry achieving this by responding to our customers’ South American markets. Far East and China. Established Asia Pacifi c, respectively. out effi cient, large-scale farming techniques requirements and continuing the We have a very strong presence in that result in greater returns from the land. implementation of performance improvement We are working to leverage the strong dealer Particularly in China, we are working to develop established markets. Our activities In 2008, we continued to develop our In particular, there is strong demand in these initiatives designed to increase our profi tability. networks that we have in place, by enhancing our distribution and sourcing arrangements and brand penetration in these markets presence and expand our activities in the markets for combines and balers. our product and service offerings and by and establish dealer networks and relationships are supported by the extent and effi ciency Asia Pacifi c region. We have factories and We also have a clearly defi ned approach participating in alternative fuel initiatives. with third-party distributors. Asia Pacifi c has of our dealer networks. Our objectives assembly facilities in North America, South As the rate of mechanical development and, to the various market segments and how the strong potential for market growth since are to continue to develop our distribution, America and Europe, and announced the consequently, the number of farmers with our products address their needs. We remain Farmers in South America are becoming it encompasses the largest populations and to remain responsive to changing customer formation of an engine assembly joint venture highly mechanized operations increases, there focused on providing clearly differentiated increasingly sophisticated and are looking for fastest-growing economies. needs and product demands, and to with Concern Tractor Plants (CTP), one of is growing demand for our technologically offerings to the specifi c customer segments higher levels of product technology and service. maintain our focus on helping farmers Russia’s leading manufacturers of industrial advanced products. This is especially true under our core brand strategy. Despite increasing competition, we are Growth in the region overall is expected to improve their profi tability and performance. machinery. In addition, we continue to source in Central and Eastern Europe, where the maintaining leadership in our category and be driven by a growing demand for food and tractors from , Japan and Italy and are need for high-horsepower tractors is rising. In 2008, these initiatives included the investing to ensure we continue to build on our changing diets, which in turn drive the trend Emerging exploring the possibility of sourcing materials, Our focus is on the development of full line creation of three new tractor assembly centers strong positions in the South American towards greater mechanization. Emerging markets present us with components and fi nished products from China. product ranges under each of our four core near commercial shipping ports in the United markets. opportunities for growth. The strength of our brands, marketed through our improving States, including Baltimore, Houston and brands, supported by our expanding dealer Global opportunities distribution channels. Seattle/Tacoma. The purpose of this initiative network, means that we are well aligned Our progress during 2008 has demonstrated was to reduce freight costs, move tractor to take advantage of these opportunities. that there are tremendous opportunities across customization closer to the customer and Increasing sophistication of farming methods, our regions. In particular, the drivers for these improve product quality. rates of mechanization growth and demand opportunities are based on: for agricultural products means there is • world population growth – estimated tremendous potential for our business to at 70 million per year – and the associated remain at the forefront of this expansion. demand for agricultural products; • accelerating trends towards renewable energies and alternative fuels; and • increasing mechanization of farming methods.

5 6 OUR BRANDS

Our comprehensive family of brands includes many of the most recognized and trusted names in agricultural equipment worldwide.

Challenger MT 865

Challenger Fendt Massey Ferguson Valtra Our brand Challenger is our brand for the Caterpillar Fendt, based in , is a market leader in Massey Ferguson, with more than 160 years Based in , and with a growing strategy dealer network’s agricultural equipment Europe with a strong reputation for superior of innovation and experience, is one of the reputation in South America, Valtra is business. We started in 2002 with the well- technology and engineering. Fendt is a leading world’s leading tractor brands, offering one of characterized by its customized performance. respected track tractors and built a full-line of brand for customers seeking innovative, the most complete lines of agricultural tractors Valtra has a dominant market position in the wheel tractors, combines and hay equipment high-tech solutions. Used worldwide, Fendt’s in the industry. Extending from the ruggedly Nordic region through its innovative machinery Over a period of several years, we have for the CAT dealers. equipment is widely considered to be a global simple to high-horsepower/high-specifi cation solutions and high levels of customer service. pioneered and refi ned a multiple brand technology leader for agricultural equipment. tractors, Massey Ferguson’s product line also strategy for the farm equipment business. Challenger unites high-specifi cations includes vineyard, fruit, utility and compact The cornerstone of Valtra’s success is its modular We offer many options to satisfy global with superior reliability, innovative designs, For example, Fendt is world-renowned for tractors for demanding specialty applications. system of tractor assembly that enables the customers’ needs and reward their brand and groundbreaking technology and stands successfully implementing its award-winning Massey Ferguson is also a force in the global production of tailor-made equipment to meet loyalty. It remained evident in 2008 that for professional-grade farm equipment and CVT (continuously variable transmission) harvesting business. specifi c customer needs. Valtra’s operations Valtra T202 this unique strategy is continuing to deliver quality in-fi eld service and parts support. technology to tractors, including the highest are unique to individual requirements, and very positive results for our customers, horsepower ranges. Today, Fendt has more Massey Ferguson is continually updating Valtra builds machines to a farmer’s order and dealers and employees. Its tractor product line includes both wheeled than 50,000 CVT-equipped tractors operating and refi ning its product range. Technology individual specifi cations. To meet these needs, and track-type designs, CAT engines, as well worldwide with remarkable reliability and enhancements are central to this development, the customer and sales person agree on the We are proud of the fact that farmers all as innovative suspension systems to meet the effi ciency, delivering increased farmer and examples of this include the recent tractor specifi cations, choosing from Valtra’s over the world can fi nd a comprehensive varying needs of professional farmers around productivity. introduction of specialty tractors with broad list of options. range of fl exible, reliable equipment the world. Challenger markets the world’s pressurized cabs and air-fi ltration systems and solutions which have been developed to largest production agricultural tractors at Fendt’s cutting-edge technology is also the Auto-Guide satellite-based steering system The ability to build against confi rmed customer help them grow their businesses – whatever 570hp, in both tracked and wheeled models. demonstrated by its industry-leading innovation on high-horsepower tractors. Manufactured orders represents signifi cant opportunities the nature and scope of their needs. in front-axle suspension for tractors. For in Europe, and North and South America, for the future, since it is highly effi cient and Its revolutionary track system utilizes tough example, the high-horsepower Fendt 900 Vario Massey Ferguson’s combines and balers are benefi ts both the customer and manufacturer. One of our key business initiatives is to rubber tracks and an innovative suspension with ranges up to 360hp, offers powerful, time- specifi cally tailored to meet local harvesting Valtra also offers customers the opportunity ensure that knowledge-sharing between our system, offering professional farmers the saving and cost-saving technological solutions conditions. to visit their Suolahti, Finland, factory and brands is carried out effi ciently, so that the traction and fl otation of steel tracks combined for fi eld and road applications. In addition, observe their own tractor being built. migration of different brands’ market-leading with the ride and speed of rubber tires – indeed Fendt offers the advanced braking systems, and Massey Ferguson is a truly global brand, technologies, experience and best practices the Challenger MT875B track tractor holds operator controls, such as the innovative Vario recognized around the world not only for are shared to the benefi t of all core brands a world record by cultivating 1,590 acres joystick and the Fendt Tractor Management its heritage and experience, but also for its and product lines. We are highly focused in 24 hours with a single operator pulling System, that provide more precise and technological leadership and comprehensive on leveraging these positive synergies to a 46-foot-wide disc. fl exible control of hydraulics, power take-off product range. enhance effi ciency, improve productivity and headland management systems. and capitalize on new opportunities for Challenger is our fastest-growing equipment growth worldwide. brand in North America and is growing in Europe and South America – continuing to win new customers by demonstrating superior performance, reliability, power and support.

Fendt 820 Massey Ferguson 8680

7 8 OUR SUPPORT

AGCO provides a variety of services and components that support our brands. This support provides peace of mind to farmers who invest in our agricultural equipment.

AGCO Advanced Technology Solutions AGCO Finance AGCO Parts AGCO Service AGCO SISU POWER Advanced Technology Solutions (ATS) AGCO Finance specializes in providing loan and An important part of every farmer’s decision- Delivering a positive experience to our customer With manufacturing facilities currently in is a dedicated team that delivers leading-edge, lease fi nancing to retail customers buying our making process when purchasing agricultural when a machine requires repair is the key focus Finland and Brazil, AGCO SISU POWER is our user-friendly and value-added technology farm equipment. In today’s global marketplace, equipment is the availability, cost and quality of our dedicated workforce of technical engine business specializing in the design and product solutions. ATS increases customer professional farmers’ consideration of fi nancing of parts. The AGCO Parts network currently has service support professionals around the globe. manufacture of durable, powerful engines with satisfaction and loyalty while delivering on the and leasing options can form as much a part of in excess of 1.4 million part numbers, available Whether our fi eld service staff is providing industry-leading environmental performance. AGCO vision of “Providing High-tech Solutions their buying criteria as mechanical features and for immediate dispatch from our distribution assistance at the farmstead or our technical It designs and builds a comprehensive sub-10 for Professional Farmers Feeding the World.” benefi ts when they acquire farm equipment. centers around the world. support staff is helping from our strategic liter, off-highway engine family. technical support offi ce locations around the Advanced Technology Solutions is focused on Our joint venture partner, Rabobank Group, AGCO Parts supports the parts, maintenance world, the men and women of AGCO Service AGCO SISU POWER is a single global business machine control, machine management and is widely regarded as one of the world’s safest and accessories needed across all of our work each day to provide quality, timely and unit with plans to expand our production precision farming in the professional farming banks and is rated AAA by the major credit brands. The importance of the effi ciency reliable technical service support to our dealers network into the emerging market sector of segment. The majority of products within rating agencies. It has been able to provide and responsiveness of our service is critical and customers. Eastern Europe and Asia. In particular, we are this segment are compatible with and utilize the necessary continuing liquidity to fund our as farmers depend on us to act quickly and setting up a joint-venture with Concern Tractor 7-cylinder AGCO SISU POWER engine ATS products. growing retail sales. Geographically diverse, accurately to keep their operations productive. In 2008, AGCO Service expanded its capabilities Plants (CTP) for engine assembly in Russia to AGCO Finance operates in 15 countries in All parts that we supply are made to exact and effectiveness by introducing new tools supply a full product range of engines. Customers of ATS technology tend to be large North America, South America, Europe and standards, are tested extensively and come to our dealers on a regional and global scale. operation farmers, fl eet owners and custom Australia/New Zealand. All regions achieved with a 12-month warranty. AGCO SOURCE, our web-based technical AGCO SISU POWER launched this year harvesters looking to maximize their effi ciency portfolio growth in 2008. knowledge database, was deployed with the the only 7-cylinder engine in the worldwide, and profi tability. They are using our proven In 2008, we successfully executed an aggressive purpose of providing technical information off-road market, again demonstrating our technology to save fuel, improve production, AGCO Finance offers comprehensive fi nancing global parts project by implementing new to our dealers 24 hours a day, 7 days a week, innovation and leadership in emission manage chemicals and fertilizer application, programs based on innovative fi nancial systems and processes in purchasing, forecasting, 365 days a year. This simple to use, multi-brand, technology. Our cutting edge approach increase crop yield and ensure compliance products to meet individual needs. We are planning and pricing, which resulted in the multi-lingual system provides dealership was further underlined by the introduction with environmental regulations. very aware that every customer’s fi nancial creation of a new organization. In addition, we technicians with critical technical advice aimed of AGCO SISU POWER e3 Selective Catalytic situation is different, and we therefore offer have launched a web-based parts catalog viewer at getting the customer’s machine repaired Reduction (SCR) Technology, an after-treatment By utilizing partnerships with leading technology fl exible options so that our fi nance programs in North America that is making it easier to do quickly and correctly the fi rst time. system providing an effective method for suppliers, AGCO delivers high performing and will enable customers to obtain agricultural business with AGCO. AGCOPartsBooks.com is emission control while signifi cantly improving industry-leading products that provide global equipment that has the power, effi ciency available 24 hours a day, 7 days a week, and is AGCO also launched the Electronic Diagnostic fuel economy. A key aim was to maintain our customers with the opportunity to be more and technology to help them operate their signifi cantly enhancing our state-of-the-art Tool (EDT) program, which provides our dealer competitive edge while focusing R&D e3 SCR Technology effective, effi cient, environmentally responsible businesses profi tably. catalog system. technicians a common platform diagnostic investment on fuel economy and and profi table. tool used to service all brands of AGCO. alternative fuels. With its touch-screen, simple-to-use interface and end-to-end diagnostic solution capability, EDT advances AGCO Service’s capability to deliver a positive repair experience to a customer’s machine.

Our team goal is to provide a value-added technical support foundation that our dealers and customers can rely on when they need it.

9 10 OUR PEOPLE OUR PEOPLE

The experience, expertise and dedication of our people Success stories... are key elements in our continuing objective of achieving profi table growth around the world.

AGCO improvement methods Comprehensive training improves Sharing knowledge across continents brings customer productivity growth opportunities in North America In order to increase profi t margins and customer satisfaction, AGCO works Dedication and hard work, along with several Wilfred Boyle, AGCO’s Director of Engineering continuously to improve and innovate new product introductions, are the key drivers Special Corporate Projects and Murli Krishnan, products and processes. behind the East Asia Pacifi c region’s strong Chief Engineer at our Indian licensee, Tractors growth in 2008. The sales and marketing team and Farm Equipment Ltd. (TAFE), have successfully AGCO Improvement Methods (AIM) uses a provided a program of training focused on new combined their teams’ knowledge and experience variety of improvement methods to manage models. Attended by a record number of dealers to deliver a range of economy tractors for projects that eliminate waste and reduce costs. and customers, this training resulted in strong markets in the U.S. and Canada. In addition, many projects are focused on appreciation by both audiences. improving product features most valued The new tractors were based on TAFE’s successful by our customers. In 2008, the region was particularly focused range of Massey Ferguson heritage models sold in on supporting customers with their harvest India. A range of technical, mechanical and design “The success of the AIM initiative is the equipment. The Service Support and Parts team features were added to create the MF 2600 Series. Investing in our people result of synergy, team work and is a sign spent many hours in the fi eld training customers. With over 15,000 employees around the world, of cultural change. Seeking out a ‘better This was time well-invested as sales for the “This fast-tracked project has been extremely AGCO develops human resources programs at way’ is starting to be a part of everybody’s next harvest increased. effective, and its success is due not only all levels designed to attract, recruit and retain job. It is important to understand that this to the tremendous heritage of experience talented people. initiative is not only focused on fi nancial “In Australia we set a new record for within Massey Ferguson, but also to the results but also investing in employee volume of parts sales and still maintained teamwork and determination demonstrated As a technical, knowledge-based business, development and process improvement. a high fi ll rate. As a result, customers by everyone involved. This was truly an we aim to maintain a culture of high We believe this is the foundation of a obtained the parts they needed on time. inspiring process, and the ongoing potential performance by providing our employees with real and sustainable business system.” There are still great opportunities to grow, for the 2600 Series is clear.” opportunities for personal and professional and we hope to achieve this by continuing development. Our organization supports a Anderson de Mendonca to offer training, thereby continuing to Wilfred Boyle global strategy of matrix management and Director of Quality and improve our customers’ productivity with Director of Engineering Special Corporate Projects teamwork in order to leverage success across Continuous Improvement AGCO products. North America regions and brands. South America Warwick McCormick Murli Krishnan In order to drive and support our strategy and Vice President and Managing Director Chief Engineer to maximize the skills and capabilities of our East Asia Pacifi c TAFE, India people, we have a well-established knowledge management system. The AGCO knowledge base is an ever-expanding training and Import tractor assembly centers New shift model increases effi ciency development model for our employees and cuts costs and network of independent dealers. In 2008, AGCO established three new tractor assembly centers near U.S. commercial shipping As part of ongoing effi ciency optimization AGCO Academy ports: Baltimore, Houston and Seattle/Tacoma. strategy, Dorothea Skupin, Production Manager Advances in technology and design require at Fendt’s component manufacturing center in ongoing training. The AGCO Academy These centers established more cost-effective Marktoberdorf, Germany, initiated a review provides coursework and education in sales import tractor distribution, improvement in of its shift organization. During early 2008, and service to our network of technicians product quality and the capability to perform the new system began testing, and within six and independent dealers. tractor customization at locations closer to the months, the benefi ts became clear. receiving dealer and retail customers. The team AGCO University met or exceeded all scheduling and operational Capacity improved by over 12 percent, requirements. and with the introduction of new machine In order to develop and promote our global technology, signifi cant cost savings have talent, we have developed AGCO University. “Working together as a single, cross- been achieved. This employee educational program is functional unit, the team selected the designed to strengthen skills in management three sites, added necessary assembly “The engineering and technical teams and leadership through AGCO University infrastructure and began operations less worked together on this project, and we classroom and e-learning courses. than six months after project start. It was are absolutely delighted with the results. clearly a great source of pride for the team, Not only have we increased production The purpose of AGCO University is to create and will provide many benefi ts to AGCO, capacity and reduced costs, but the new a structural conduit to provide our people with its dealers and North American farmers for model has proved easier for all the shift skills, education and continuing development. years to come.” workers – so there are benefi ts all around.”

Doug Rehor Dorothea Skupin Director of Cost Improvements Production Manager North America Fendt, Germany

11 12 OUR CUSTOMERS OUR CUSTOMERS

Customers are at the center of everything we Success stories... do and at the heart of our values and vision.

Fendt tractors serve double duty Norwegian mechanic keeps Valtra Taking part in fi eld trials in for Quebec family partnership customers loyal impresses farming brothers The Bousquet family runs a successful business Valtra’s mechanic, Eivind Sandvik, in Sunnfjord, Farming in Denmark, brothers Peter and Mogens in Quebec, which they founded in 1977. The Norway, is a great asset. With a customer Jensen took part in Massey Ferguson’s extensive operations are divided between farming and portfolio of more than 150 tractor owners in pre-production fi eld trials for the award-winning commercial snow removal. Of the ten tractors nine counties, there is a lot for him to do. In the new 370hp MF 8690. So impressed by the the family uses for farming and snow removal, village of Guddal – or “Valtravillage” as it’s now machine’s performance, they immediately ordered three are Fendt 900 Series models, while the known to locals because the majority of the two – one each – for permanent use on their rest are Massey Ferguson models. farmers own Valtra tractors – Eivind is a popular 1,920 acres enterprise near . character. Einar Moen, general manager for the “When you combine the service with the Valtra dealership is very forthcoming with praise In sowing winter wheat, use of the MF 8690 quality of the Fendt tractors, you can’t fi nd for him. increased their average speed of operation by a better machine, whether it’s used for 25 percent with no increase in fuel consumption, planting corn or moving snow.” “Eivind radiates calm and creates trust, thanks to the tractor’s AGCO SISU POWER e3 Strengthening our services which is very valuable. A good mechanic Selective Catalytic Reduction Emissions Providing product and service solutions that Pierre Bousquet is essential for a good sale.” Technology. exceed expectations are key measures of Ferme Grand Rang Inc. commitment to our customers. During 2008, Canada Einar Moen “Top features we look for in a tractor are we continued to drive a range of initiatives General Manager good suspension and renowned engine to strengthen our dealer network around the Valtra dealership and transmission technology – in fact we world. want a machine with the highest possible Terje Moller, the former personnel manager technology all around.” Our leading market share positions in key of Rolls-Royce and now a dairy farmer in the agricultural markets of the world have been village, owns a Valtra A95. Peter Jensen achieved by our strong focus on customer Farmer service, leading-edge technology and an “You have to understand that our faith in Denmark independent dealer network of more than Eivind as a mechanic is one reason we in 2,800 dealers. the village stick to the Valtra brand.”

Our commitment to our customers, and the Terje Moller pride that we have in their satisfaction, can Dairy farmer best be demonstrated by the experience Norway of individual farmers. Challenger tractors help UK farmer Challengers are twice the speed to cut costs and improve yields Hector Barruca and his family are Argentinean A shift to using just two Challenger track combine contractors. Their operation center tractors for all the crop establishment work is in La Carlota, south of Cordoba Province, on 4,700 acres has helped UK farmer, Andrew Argentina. Gloag, cut costs while improving timeliness and maintaining yield. Hector began his farming career working with his father on the small family-run farm and is “The main driver for change has always now a farmer and harvest contractor of more been timeliness,” stresses Andrew, who than 19,768 acres. The stars of his machinery runs a 570hp Challenger MT875B with fl eet are two 670 Challenger combines. These Auto-Guide and a 320hp MT765B. “Getting machines performed twice as fast as the other the job done with the right machinery at combines he owns. the right time is the most important defi ning factor in the success of farming “The Challenger 670 has an enormous operations today.” threshing capacity and it delivers the entire machine and crop information we need “The latest cost-effective technology and our clients demand. If we did not use allows us and our farming partners to this technology, we could not compete in benefi t from the economies of large-scale the contractors market.” farming while maintaining yields and improving effi ciency.” Hector Barruca Farmer and harvest contractor Andrew Gloag Argentina Farmer UK

13 14 OUR STRATEGY

We continue to realize our strategic objectives by implementing initiatives to build profi table growth: Strength, Performance and Simplicity.

OUR GLOBAL MANUFACTURING Corporate Headquarters Light Assembly Manufacturing Parts Distribution Joint Venture

Success Strength initiatives Performance initiatives Simplicity initiatives Strategic We have made signifi cant progress with our In 2008, we offered our customers the strongest To improve our performance, we have To increase simplicity and improve the utilization building blocks strategic initiatives and surpassed our fi nancial product line-up in our history. Our increased reviewed our manufacturing strategy and of our asset base, we have introduced a new targets over the last two years. Despite the focus on research and development introduced begun to implement initiatives aimed at Enterprise Resource Planning (ERP) system for worldwide fi nancial and economic challenges, more than 100 new products. We increased our improving the effi ciency of our production our aftermarket parts activities in Europe and we expect the fundamentals of our industry capabilities in this area by moving to a global footprint. Through our AGCO Production North America. The program’s goal is to increase Strength targets increasing sales and to remain positive. Demand drivers such as product management process. This process System, launched in 2008, we constantly the level of service to our dealers by simplifying market position by extending our global population growth, limited land for agricultural is being used to develop leading agriculture monitor our operations to optimize resources, our operating processes and reducing our parts reach and capitalizing on our established production and an accelerating trend towards equipment, differentiating products across our simplify processes and eliminate waste. inventory. Other functions and processes are brands and strong dealers. We are renewable energies are supporting commodity family of brands, and leveraging technology Our AGCO Improvement Methods initiative, planned to be added in the next phase of the continuously enhancing and expanding prices and higher levels of farm income. We are advantages by building synergies. fi rst launched in Brazil, engages our employees ERP system. our product portfolio. In addition, we are expecting increasing competition across the and provides tools and training required to focused on growing our core brands and entire industry and a movement towards high We continued to improve our capabilities in the implement Six Sigma, Lean Manufacturing We have programs in place to optimize our entering new markets. technology. Emerging markets and expanding area of harvesting and farming technologies. and Continuous Improvement Principles. The asset base, including our working capital opportunities are mainly in South America, During 2007, we acquired the Brazilian planters program continues to be leveraged globally, initiatives. During the last year, we have clearly Performance focuses on improving Eastern Europe and Asia. Our updated strategy company SFIL and made an investment in the allowing AGCO to improve every day using defi ned our core processes throughout our our processes, controlling our costs, will position us for continued success in this Italian combine producer . In 2008, the expertise of our employees. manufacturing operations. Our objective is optimizing our manufacturing capacities dynamic industry. we collaborated with Topcon and Sauer- to become world class at these core processes, and leveraging sourcing opportunities. Danfoss providing an industry-leading Through our purchasing initiatives, we continued and we are making investment and operational We are also continuously developing positioning and steering technology for our to shift sourcing volumes to best cost countries. decisions accordingly. our employees and enhancing the work equipment targeted at the professional We established a team of sourcing professionals environment to make AGCO a globally farming segment. in several Asian countries, including China and Our strong fi nancial performance and the preferred employer. India. The progress made in 2008 gives us progress made with our strategic initiatives We continued to deliver on our emerging confi dence that we have signifi cant opportunity demonstrates our commitment. Our entire Simplicity is about the streamlining of our market strategy by forming a joint venture with to positively impact our cost base. management team is focused on reaching production facilities and the management of one of Russia’s leading industrial equipment the next level. our working capital and assets. We focus on producers, CTP, to assemble engines. In our order-driven production, better management established markets, we continued our efforts of inventories and actively managing the to strengthen our dealer network. We set-up degree of vertical integration. three assembly centers in North America to reduce costs and streamline logistics for AGCO and our dealers.

15 16 BOARD OF DIRECTORS AND SENIOR MANAGEMENT

8 5

10 14 3 6 12 17 19 21 1 9 15

2 4 7 13 20 23

11 18 16 22 Board of Directors Senior Management 1. P. George Benson 4. Francisco R. Gros 7. Curtis E. Moll 10. Hendrikus Visser 12. Garry L. Ball 15. David L. Caplan 18. Randall G. Hoffman 21. Hubertus M. Mühlhäuser President of the College Former CEO of OGX Petróleo e Chairman and CEO Chairman of Royal Huisman Senior Vice President Senior Vice President Senior Vice President Senior Vice President of Charleston Gás Participacões, S.A. MTD Holdings, Inc. Shipyards N.V. Engineering Materials Management, Global Sales, Marketing Strategy & Integration Audit, Executive and Audit and Governance Audit and Compensation Audit and Governance Worldwide and Product Management General Manager, Governance Committees Committees Committees Committees 13. Andrew H. Beck Eastern Europe and Asia Senior Vice President 16. Andre M. Carioba 19. Gary L. Collar 2. Herman Cain 5. Gerald B. Johanneson 8. David E. Momot Chief Financial Offi cer Senior Vice President Senior Vice President 22. Lucinda B. Smith President and CEO Former President and CEO Former Vice President General Manager, General Manager, Europe/ Senior Vice President T.H.E. New Voice, Inc. Haworth, Inc. General Electric 14. Norman L. Boyd South America Africa/Middle East; Human Resources Compensation and Succession Executive, Governance Audit and Compensation Senior Vice President Australia, New Zealand Planning Committees and Succession Planning Committees Executive Development 17. Robert B. Crain 23. Hans-Bernd Veltmaat Committees Senior Vice President 20. Debra E. Kuper Senior Vice President 3. Wolfgang Deml 9. Gerald L. Shaheen 11. Martin H. Richenhagen General Manager, Vice President Manufacturing and Quality Former President and CEO 6. George E. Minnich Former Group President Chairman, President North America General Counsel and BayWa Corporation Former Senior Vice President Caterpillar Inc. and Chief Executive Offi cer Corporate Secretary Governance and Succession and CFO of ITT Corporation Executive and Succession AGCO Planning Committees Audit, Compensation and Planning Committees Executive and Succession Executive Committees Planning Committees

17 18 FORWARD-LOOKING STATEMENTS SELECTED FINANCIAL INFORMATION (in millions, except percentages, per share amounts and employees)

Years Ended December 31, 2008 2007 2006 2005 2004 Operating Results Net sales ...... $ 8,424.6 $ 6,828.1 $ 5,435.0 $ 5,449.7 $ 5,273.3 Gross profit ...... 1,499.7 1,191.0 927.8 933.6 952.9 Percent of net sales...... 17.8% 17.4% 17.1% 17.1% 18.1% Income from operations ...... 565.0 394.8 68.9 274.7 323.5 Percent of net sales...... 6.7% 5.8% 1.3% 5.0% 6.1% Net income (loss)...... 400.0 246.3 (64.9) 31.6 158.8 Net income (loss) per common share – diluted(1)...... $ 4.09 $ 2.55 $ (0.71) $ 0.35 $ 1.71 Weighted average shares outstanding – diluted ...... 97.7 96.6 90.8 90.7 95.6 Cash flows from operations...... $ 291.3 $ 504.3 $ 442.2 $ 246.3 $ 265.9 Balance Sheet Data Working capital...... $ 1,026.7 $ 638.4 $ 685.4 $ 825.8 $ 1,045.5 Total assets...... 4,954.8 4,787.6 4,114.5 3,861.2 4,297.3 Long-term debt, less current portion ...... 682.0 294.1 577.4 841.8 1,151.7 Total liabilities...... 2,997.8 2,744.6 2,620.9 2,445.2 2,874.9 Stockholders’ equity...... 1,957.0 2,043.0 1,493.6 1,416.0 1,422.4 Other Data Number of employees...... 15,606 13,720 12,804 13,023 14,313

(1) The Company makes reference to adjusted earnings per share, as reconciled below: 2008 2007 2006 2005 2004 This annual report includes forward-looking Most of our sales depend on the retail customers’ We recently have experienced substantial Net income (loss) per common share – diluted ...... $ 4.09 $ 2.55 $ (0.71) $ 0.35 $ 1.71 statements, including the statements in the obtaining fi nancing, and any disruption in their and sustained volatility with respect to currency Chairman’s Statement and other statements ability to obtain fi nancing, whether due to the exchange rate changes, which can adversely Restructuring and other infrequent expenses (income)(2) ...... — (0.03) 0.01 — 0.04 herein regarding growth, market conditions, current economic downturn or otherwise, will affect our reported results of operations and Goodwill impairment charge(2)...... — — 1.81 — — strategic initiatives and their effects, components result in the sale of fewer products by us. A large the competitiveness of our products. (2) and parts purchases, and general economic portion of the retail sales of our products are Bond redemption costs ...... — — — 0.15 — conditions. These statements are subject to risk fi nanced by our retail fi nance joint venture with We are subject to extensive environmental laws Deferred income tax valuation allowance adjustment ...... — — — 0.95 — and regulations, and our compliance with, or our that could cause actual results to differ materially Rabobank, and any diffi culty on Rabobank’s part Weighted average share impact...... — — 0.01 — — from those suggested by the statements, including: to fund the venture would adversely impact sales failure to comply with, existing or future laws and if our customers would be required to utilize regulations could delay production of our products Net income per common share – adjusted ...... $ 4.09 $ 2.52 $ 1.12 $ 1.46 $ 1.75 Our fi nancial results depend entirely upon the other retail fi nancing providers. or otherwise adversely affect our business. agricultural industry, and factors that adversely affect the agricultural industry generally, including The collectability of receivables that We have signifi cant pension obligations with (2) After tax. declines in the general economy, increases in farm are created from our sales, as well as from respect to our employees and our available cash fl ow may be adversely affected in the event that input costs, lower commodity prices and changes fi nancing obtained by our customers through Rounding may impact the summation of certain line items. in the availability of credit for our retail customers, our retail fi nancing joint ventures, is critical payments became due under any pension plans will adversely affect us. to our business. that are unfunded or underfunded. Declines in the market value of the securities used to fund The recent poor performance of the general We depend on suppliers for components these obligations result in increased pension economy may result in a decline in demand for and parts for our products, and any failure by expense in future periods. our products. However, we are unable to predict our suppliers to provide products as needed, with accuracy the amount or duration of this decline, or by us to promptly address supplier issues, We are subject to raw material price and our forward-looking statements refl ect merely will adversely impact our ability to timely and fl uctuations, which can adversely affect our best estimates at the current time. effi ciently manufacture and sell products. our manufacturing costs. Our success depends on the introduction A majority of our sales and manufacturing In connection with our outstanding indebtedness, of new products, which requires substantial takes place outside of the , and, we are subject to certain restrictive covenants and expenditures and may not be well received as a result, we are exposed to risks related to payment obligations that may adversely affect our in the market place. foreign laws, taxes, economic conditions, ability to operate and expand our business. labor supply and relations, political conditions We face signifi cant competition and, if we and governmental policies. These risks may are unable to compete successfully against delay or reduce our realization of value other agricultural equipment manufacturers, from our international operations. we would lose customers and our revenues and profi tability would decline.

19 20 CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED BALANCE SHEETS (in millions, except per share data) (in millions, except share amounts)

Years Ended December 31, 2008 2007 2006 December 31, 2008 2007 Net sales ...... $ 8,424.6 $ 6,828.1 $ 5,435.0 Assets Cost of goods sold ...... 6,924.9 5,637.1 4,507.2 Current Assets: Gross profit...... 1,499.7 1,191.0 927.8 Cash and cash equivalents ...... $ 512.2 $ 582.4 Restricted cash ...... 33.8 — Selling, general and administrative expenses...... 720.9 625.7 541.7 Accounts and notes receivable, net ...... 815.6 766.4 Engineering expenses...... 194.5 154.9 127.9 Inventories, net...... 1,389.9 1,134.2 Restructuring and other infrequent expenses (income)...... 0.2 (2.3) 1.0 Deferred tax assets...... 56.6 52.7 Goodwill impairment charge...... — — 171.4 Other current assets ...... 197.1 186.0 Amortization of intangibles...... 19.1 17.9 16.9 Total current assets ...... 3,005.2 2,721.7 Income from operations...... 565.0 394.8 68.9 Property, plant and equipment, net ...... 811.1 753.0 Interest expense, net...... 19.1 24.1 55.2 Investment in affi liates...... 275.1 284.6 Other expense, net...... 20.1 43.4 32.9 Deferred tax assets...... 29.9 89.1 Income (loss) before income taxes and equity in net earnings of affiliates ...... 525.8 327.3 (19.2) Other assets ...... 69.6 67.9 Income tax provision ...... 164.6 111.4 73.5 Intangible assets, net...... 176.9 205.7 Income (loss) before equity in net earnings of affiliates ...... 361.2 215.9 (92.7) Goodwill ...... 587.0 665.6 Equity in net earnings of affiliates ...... 38.8 30.4 27.8 Total assets ...... $ 4,954.8 $ 4,787.6 Net income (loss)...... $ 400.0 $ 246.3 $ (64.9) Liabilities and Stockholders’ Equity Net income (loss) per common share: Current Liabilities: Basic ...... $ 4.36 $ 2.69 $ (0.71) Current portion of long-term debt ...... $ 0.1 $ 0.2 Diluted ...... $ 4.09 $ 2.55 $ (0.71) Convertible senior subordinated notes ...... — 402.5 Weighted average number of common and common equivalent shares outstanding: Accounts payable...... 1,027.1 827.1 Basic ...... 91.7 91.5 90.8 Accrued expenses...... 799.8 773.2 Diluted ...... 97.7 96.6 90.8 Other current liabilities ...... 151.5 80.3 The Consolidated Statements of Operations should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Total current liabilities ...... 1,978.5 2,083.3 Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K. Long-term debt, less current portion ...... 682.0 294.1 Pensions and postretirement health care benefits ...... 173.6 150.3 Deferred tax liabilities ...... 108.1 163.6 Other noncurrent liabilities ...... 55.6 53.3 Total liabilities ...... 2,997.8 2,744.6

Stockholders’ Equity: Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding in 2008 and 2007 — — Common stock; $0.01 par value, 150,000,000 shares authorized, 91,844,193 and 91,609,895 shares issued and outstanding in 2008 and 2007, respectively...... 0.9 0.9 Additional paid-in capital ...... 973.2 942.7 Retained earnings...... 1,419.3 1,020.4 Accumulated other comprehensive (loss) income ...... (436.4) 79.0 Total stockholders’ equity...... 1,957.0 2,043.0 Total liabilities and stockholders’ equity ...... $ 4,954.8 $ 4,787.6

The Consolidated Balance Sheets should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K.

21 22 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions, except share amounts)

Accumulated Other Comprehensive Income (Loss) Accumulated Cumulative Deferred Other Total Common Stock Additional Retained Unearned Defined Benefit Translation Gains (Losses) Comprehensive Stockholders’ Comprehensive Shares Amount Paid-In Capital Earnings Compensation Pension Plans Adjustment on Derivatives Income (Loss) Equity Income (Loss) Balance, December 31, 2005 ...... 90,508,221 $ 0.9 $ 894.7 $ 825.4 $ (0.1) $ (150.1) $ (158.7) $ 3.9 $ (304.9) $ 1,416.0 Cumulative effect of adjustments from the adoption of SAB No. 108, net of taxes ...... — — — 13.6 — — — — — 13.6 Adjusted balance, January 1, 2006 ...... 90,508,221 0.9 894.7 839.0 (0.1) (150.1) (158.7) 3.9 (304.9) 1,429.6 Net loss ...... — — — (64.9) — — — — — (64.9) $ (64.9) Issuance of restricted stock ...... 8,832 — 0.2 — — — — — — 0.2 Stock options exercised ...... 660,850 — 10.8 — — — — — — 10.8 Stock compensation ...... — — 3.3 — — — — — — 3.3 Reclassification due to the adoption of SFAS No. 123R ...... — — (0.1) — 0.1 — — — — — Additional minimum pension liability, net of taxes ...... — — — — — 6.6 — — 6.6 6.6 6.6 Deferred gains and losses on derivatives, net ...... — — — — — — — 0.1 0.1 0.1 0.1 Deferred gains and losses on derivatives held by affiliates, net ...... — — — — — — — (2.0) (2.0) (2.0) (2.0) Adjustments related to the adoption of SFAS No. 158, net of taxes ...... — — — — — (26.8) — — (26.8) (26.8) Change in cumulative translation adjustment ...... — — — — — — 136.7 — 136.7 136.7 136.7 Balance, December 31, 2006 ...... 91,177,903 0.9 908.9 774.1 — (170.3) (22.0) 2.0 (190.3) 1,493.6 76.5 Net income ...... — — — 246.3 — — — — — 246.3 246.3 Issuance of restricted stock ...... 6,346 — 0.2 — — — — — — 0.2 Stock options and SSARs exercised ...... 425,646 — 8.0 — — — — — — 8.0 Stock compensation ...... — — 25.6 — — — — — — 25.6 Defined benefit pension plans, net of taxes: Prior service cost arising during year ...... — — — — — 1.4 — — 1.4 1.4 1.4 Net actuarial gain arising during year ...... — — — — — 71.1 — — 71.1 71.1 71.1 Amortization of prior service cost included in net periodic pension cost ...... — — — — — 0.1 — — 0.1 0.1 0.1 Amortization of net actuarial losses included in net periodic pension cost ...... — — — — — 10.6 — — 10.6 10.6 10.6 Deferred gains and losses on derivatives, net ...... — — — — — — — 7.7 7.7 7.7 7.7 Deferred gains and losses on derivatives held by affiliates, net ...... — — — — — — — (4.4) (4.4) (4.4) (4.4) Change in cumulative translation adjustment ...... — — — — — — 182.8 — 182.8 182.8 182.8 Balance, December 31, 2007 ...... 91,609,895 0.9 942.7 1,020.4 — (87.1) 160.8 5.3 79.0 2,043.0 515.6 Net income ...... — — — 400.0 — — — — — 400.0 400.0 Issuance of restricted stock ...... 136,457 — 1.6 — — — — — — 1.6 Issuance of performance award stock ...... 62,387 — (2.6) — — — — — — (2.6) Stock options and SSARs exercised ...... 35,454 — (0.3) — — — — — — (0.3) Stock compensation ...... — — 31.8 — — — — — — 31.8 Defined benefit pension plans, net of taxes: Prior service cost arising during year ...... — — — — — (0.2) — — (0.2) (0.2) (0.2) Net actuarial loss arising during year ...... — — — — — (57.6) — — (57.6) (57.6) (57.6) Amortization of net actuarial losses included in net periodic pension cost ...... — — — — — 5.6 — — 5.6 5.6 5.6 Effects of changing pension plan measurement date pursuant to SFAS No. 158: Service cost, interest cost and expected return on plan assets for October 1 – December 31, 2007...... — — — (0.2) — — — — — (0.2) Amortization of net actuarial losses for October 1 – December 31, 2007 ...... — — — (0.9) — 0.9 — — 0.9 — 0.9 Deferred gains and losses on derivatives, net ...... — — — — — — — (44.4) (44.4) (44.4) (44.4) Deferred gains and losses on derivatives held by affiliates, net ...... — — — — — — — (1.0) (1.0) (1.0) (1.0) Change in cumulative translation adjustment ...... — — — — — — (418.7) — (418.7) (418.7) (418.7) Balance, December 31, 2008 ...... 91,844,193 $ 0.9 $ 973.2 $ 1,419.3 $ — $ (138.4) $ (257.9) $ (40.1) $ (436.4) $ 1,957.0 $ (115.4)

The Consolidated Statements of Stockholders’ Equity should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K.

23 24 CONSOLIDATED STATEMENTS OF CASH FLOWS COMPANY INFORMATION (in millions)

Years Ended December 31, 2008 2007 2006 Corporate Headquarters Form 10-K Cash flows from operating activities: ...... 4205 River Green Parkway The Form 10-K annual report to the Securities Duluth, Georgia 30096 U.S.A. Net income (loss) ...... $ 400.0 $ 246.3 $ (64.9) and Exchange Commission is available on 770-813-9200 our corporate web site (www.agcocorp.com), Adjustments to reconcile net income (loss) to net cash provided by operating activities: under “Investors & Media,” or upon request Depreciation...... 127.4 115.6 98.6 Transfer Agent & Registrar from the Investor Relations Department at Computershare Investor Services, LLC Deferred debt issuance cost amortization...... 3.2 4.7 6.4 corporate headquarters. The most recent 250 Royall Street certifi cations by AGCO Corporation’s Chief Goodwill impairment charge...... — — 171.4 Canton, MA 02021 U.S.A. Executive Offi cer and Chief Financial Offi cer Amortization of intangibles...... 19.1 17.9 16.9 pursuant to Section 302 of the Sarbanes-Oxley Stock compensation...... 33.3 25.7 3.5 Stock Exchange Act of 2002 regarding the quality of the AGCO Corporation common stock Company’s public disclosures are included Equity in net earnings of affiliates, net of cash received...... (11.0) (3.5) (8.8) (trading symbol “AG”) is traded on the as exhibits to the Company’s Annual Report Deferred income tax provision...... 7.3 2.5 10.6 . on Form 10-K for fi scal year 2008 fi led with Gain on sale of property, plant and equipment...... (0.2) (2.9) (0.8) the Securities and Exchange Commission. Independent Registered In addition, AGCO’s Chief Executive Offi cer Write-down of property, plant and equipment ...... — — 0.3 Public Accounting Firm submitted to the New York Stock Exchange Changes in operating assets and liabilities, net of effects from purchase of businesses: KPMG LLP the Annual CEO Certifi cation for 2008 as Accounts and notes receivable, net...... (208.4) (3.0) 32.5 Atlanta, Georgia U.S.A. required by Section 303A.12(a) of the NYSE Listed Company Manual. Inventories, net ...... (374.2) 10.7 66.2 Annual Meeting Other current and noncurrent assets ...... (75.6) (41.4) (26.5) The annual meeting of the Company’s © 2009 AGCO Corporation Accounts payable ...... 284.4 54.1 55.1 stockholders will be held at 9:00 a.m. ET, All Rights Reserved. on April 23, 2009 at the offi ces of AGCO Incorporated in Delaware. Accrued expenses ...... 127.4 86.4 44.3 Corporation, 4205 River Green Parkway, An Equal Opportunity Employer. Other current and noncurrent liabilities...... (41.4) (8.8) 37.4 Duluth, Georgia 30096 U.S.A. AGCO®, Fendt®, Massey Ferguson®, Valtra® and Total adjustments...... (108.7) 258.0 507.1 their respective logos as well as corporate and product identity used herein are trademarks of Net cash provided by operating activities ...... 291.3 504.3 442.2 AGCO or its subsidiaries and may not be used Cash flows from investing activities: without permission. Challenger® is a registered Purchases of property, plant and equipment...... (251.3) (141.4) (129.1) trademark of Caterpillar, Inc. and may not be used without permission. Proceeds from sale of property, plant and equipment ...... 4.9 6.0 3.9 Purchase of businesses, net of cash acquired...... — (17.8) — Investments in unconsolidated affiliates, net...... (0.6) (68.0) (2.9) Comparison of 5-year cumulative Restricted cash and other...... (32.5) (2.7) — Total return among AGCO Corporation, S&P Midcap Index and Peer Group Index 400 AGCO Corporation Net cash used in investing activities...... (279.5) (223.9) (128.1) 350 Peer Group Index S&P Midcap Index Cash flows from financing activities: 300 Proceeds from debt obligations...... 76.5 208.8 538.2 250 Repayments of debt obligations...... (38.1) (329.5) (708.2) 200 Proceeds from issuance of common stock...... 0.3 8.2 10.8 Dollars 150 100 Payment of minimum tax withholdings on stock compensation ...... (3.2) — — 50 Payment of debt issuance costs...... (1.4) (0.3) (4.9) 0 Net cash provided by (used in) fi nancing activities ...... 34.1 (112.8) (164.1) 2003 2004 2005 2006 2007 2008 Effects of exchange rate changes on cash and cash equivalents ...... (116.1) 13.7 30.5 Performance graph The graph shown (above) is a line graph presentation of the Company’s cumulative stockholder (Decrease) increase in cash and cash equivalents ...... (70.2) 181.3 180.5 returns on an indexed basis as compared to the S&P Mid-Cap 400 Index and a self-constructed Cash and cash equivalents, beginning of year ...... 582.4 401.1 220.6 peer group of the companies listed in footnote 1 to the performance graph (“Peer Group”). Cash and cash equivalents, end of year ...... $ 512.2 $ 582.4 $ 401.1 Returns for the Company in the graph are not necessarily indicative of future performance.

The Consolidated Statements of Cash Flows should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial Condition and Results Assumes $100 invested on January 1, 2004. Assumes dividend reinvested. Fiscal year ending December 31, 2008. (1) Based on information for a self-constructed peer group of companies which includes the following: Caterpillar Inc., CNH Global NV, of Operations and the Company’s audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements, which are included in Inc., Deere & Company, , Ingersoll-Rand Company, Corporation, Inc, the Company’s Annual Report on Form 10-K. Parker-Hannifi n Corporation and Terex Corporation.

25 26 RE: DEFINING AGRICULTURE

2008 Annual Report

43341_Agco_AR_Cover.indd A1 2/23/09 10:49:55 AM