Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

The future payments required under the Company’s significant commitments, excluding indebtedness, as of December 31, 2019 are as follows (in millions):



	Payments Due By Period
	2020		2021		2022		2023		2024		Thereafter		Total
Interest payments related to indebtedness⁽¹⁾⁽²⁾	$	13.9	$	13.2	$	10.8	$	8.0	$	5.8	$	5.7	$	57.4
Unconditional purchase obligations⁽³⁾	102.1		20.9		4.5		0.2		—		—		127.7
Other short-term and long-term obligations⁽⁴⁾	91.7		67.3		38.5		32.4		18.5		47.6		296.0
Total contractual cash obligations	$	207.7	$	101.4	$	53.8	$	40.6	$	24.3	$	53.3	$	481.1

____________________________________


(1)	Estimated interest payments are calculated assuming current interest rates over minimum maturity periods specified in debt agreements. Debt may be repaid sooner or later than such minimum maturity periods (unaudited).


(2)	Refer to Note 7 for more information on the Company's commitments with respect to indebtedness.


(3)	Unconditional purchase obligations exclude routine purchase orders entered into in the normal course of business.

(4)

Other short-term and long-term obligations include estimates of future minimum contribution requirements under the Company’s U.S. and non-U.S. defined benefit pension and postretirement plans. These estimates are based on current legislation in the countries the Company operates within and are subject to change. Other short-term and long-term obligations also include income tax liabilities related to uncertain income tax positions connected with ongoing income tax audits in various jurisdictions (unaudited).



	Amount of Commitment Expiration Per Period
	2020		2021		2022		2023		2024		Thereafter		Total
Guarantees	$	44.7	$	6.1	$	6.9	$	5.2	$	3.2	$	0.5	$	66.6

Off-Balance Sheet Arrangements

Guarantees

The Company maintains a remarketing agreement with its U.S. finance joint venture, AGCO Finance LLC, whereby the Company is obligated to repurchase up to $6.0 million of repossessed equipment each calendar year. The Company believes that any losses that might be incurred on the resale of this equipment will not materially impact the Company’s financial position or results of operations, due to the fair value of the underlying equipment.

At December 31, 2019, the Company has outstanding guarantees of indebtedness owed to third parties of approximately $47.6 million, primarily related to dealer and end-user financing of equipment. Such guarantees generally obligate the Company to repay outstanding finance obligations owed to financial institutions if dealers or end users default on such loans through 2025. Losses under such guarantees historically have been insignificant. In addition, the Company generally would expect to be able to recover a significant portion of the amounts paid under such guarantees from the sale of the underlying financed farm equipment, as the fair value of such equipment is expected to be sufficient to offset a substantial portion of the amounts paid. The Company also has obligations to guarantee indebtedness owed to certain of its finance joint ventures if dealers or end users default on loans. Losses under such guarantees historically have been insignificant and the guarantees are not material. The Company believes the credit risk associated with all of these guarantees is not material to its financial position or results of operations.

In addition, at December 31, 2019, the Company had accrued approximately $18.9 million of outstanding guarantees of minimum residual values that may be owed to its finance joint ventures in the United States and Canada due upon expiration of certain eligible operating leases between the finance joint ventures and end users. The maximum potential amount of future payments under the guarantee is approximately $26.7 million.

Other

At December 31, 2019, the Company had outstanding designated and non-designated foreign exchange contracts with a gross notional amount of approximately $3,133.0 million. The outstanding contracts as of December 31, 2019 range in maturity through December 2020 (see Note 11).

The Company sells a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The Company also sells certain accounts receivable under factoring arrangements to financial institutions around the world. The Company reviewed the sale of such receivables and determined that these facilities should be accounted for as off-balance sheet transactions.

Contingencies

In August 2008, as part of routine audits, the Brazilian taxing authorities disallowed deductions relating to the amortization of certain goodwill recognized in connection with a reorganization of the Company’s Brazilian operations and the related transfer of certain assets to the Company’s Brazilian subsidiaries. The amount of the tax disallowance through December 31, 2019, not including interest and penalties, was approximately 131.5 million Brazilian reais (or approximately $32.6 million). The amount ultimately in dispute will be significantly greater because of interest and penalties. The Company has been advised by its legal and tax advisors that its position with respect to the deductions is allowable under the tax laws of Brazil. The Company is contesting the disallowance and believes that it is not likely that the assessment, interest or penalties will be required to be paid. However, the ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which could take several years.

The Company is a party to various other 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 its business or financial statements as a whole, including its results of operations and financial condition.