AGCO CORP /DE

1. BASIS OF PRESENTATION

The condensed consolidated financial statements of AGCO Corporation and its subsidiaries (the “Company” or “AGCO”) included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the Company’s financial position, results of operations, comprehensive income and cash flows at the dates and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Results for interim periods are not necessarily indicative of the results for the year. Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation.

The Company has a wholly-owned subsidiary in Turkey that distributes agricultural equipment and replacement parts. On the basis of available data related to inflation indices and as a result of the devaluation of the Turkish lira relative to the United States dollar, the Turkish economy was determined to be highly inflationary during 2022. A highly inflationary economy is one where the cumulative inflation rate for the three years preceding the beginning of the reporting period, including interim reporting periods, is in excess of 100 percent. For subsidiaries operating in highly inflationary economies, the United States dollar is the functional currency. Remeasurement adjustments for financial statements in highly inflationary economies and other transactional exchange gains and losses are reported in “Other expense (income), net” within the Company's Condensed Consolidated Statements of Operations. For the nine months ended and as of September 30, 2026, the Company's wholly-owned subsidiary in Turkey had net sales of approximately $104.9 million and total assets of approximately 5.3 billion Turkish lira (or approximately $108.3 million). The monetary assets and liabilities denominated in the Turkish lira were approximately 3.7 billion Turkish lira (or approximately $74.9 million) and approximately 1.6 billion Turkish lira (or approximately $32.5 million), respectively, as of September 30, 2026. The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of September 30, 2026.

The Company has a wholly-owned subsidiary in Argentina that assembles and distributes agricultural equipment and replacement parts. In recent years, the Argentine government has substantially limited the ability of companies to transfer funds out of Argentina. Argentina's economy was determined to be highly inflationary during 2018. For the nine months ended and as of September 30, 2026, the Company's wholly-owned subsidiary in Argentina had net sales of approximately $119.1 million and total assets of approximately 309.4 billion pesos (or approximately $204.2 million). The monetary assets of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 73.9 billion pesos (or approximately $48.8 million), inclusive of approximately 7.1 billion pesos (or approximately $4.7 million) in cash and cash equivalents, as of September 30, 2026. The monetary liabilities of the Company's operations in Argentina denominated in pesos at the official government rate were approximately 17.6 billion pesos (or approximately $11.6 million) as of September 30, 2026. The monetary assets and liabilities were remeasured into United States dollars based on exchange rates as of September 30, 2026. The Company's finance joint venture in Argentina, AGCO Capital Argentina S.A. (“AGCO Capital”), had net monetary assets denominated in pesos at the official government rate of approximately 9.7 billion pesos (or approximately $6.4 million) as of September 30, 2026. All gains and losses resulting from AGCO Capital's remeasurement of its monetary assets and liabilities are reported in “Equity in net earnings of affiliates” within the Company's Condensed Consolidated Statements of Operations.

New Accounting Pronouncements to be Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the consolidated financial statements. In addition, the guidance requires disclosure of selling expenses and its definition. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The ASU will be applied prospectively with an option to simultaneously apply retrospectively. The updated standard will impact only our disclosures, with no impact to our financial condition or results of operations.

2. ACCOUNTS RECEIVABLE SALES AGREEMENTS

The Company’s finance joint ventures provide retail financing and wholesale financing to its dealers. The terms of the financing arrangements offered to the Company’s dealers are similar to arrangements the finance joint ventures provide to unaffiliated third parties. In addition, the Company transfers, on an ongoing basis, a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. Under the various joint venture agreements, Rabobank or its affiliates provide financing to the joint venture companies. AGCO has a 49% interest in those finance equity joint ventures. To better align with evolving market dynamics and increasing regulatory and compliance requirements, on April 30, 2026, the Company executed an Interests Purchase Agreement and Share Purchase Agreement (collectively the “Agreements”) with wholly owned subsidiaries of Rabobank to sell its 49% equity interests in the joint ventures in the U.S. and Canada, AGCO Finance LLC and AGCO Finance Canada, Ltd. (collectively the “North America AGCO Finance joint ventures”), respectively, for aggregate consideration of approximately $188.4 million. The consideration consisted of (i) approximately $168.4 million, representing the carrying value of the Company's equity interests in the North America AGCO Finance joint ventures, previously included in “Investments in affiliates” on the Company's Condensed Consolidated Balance Sheets, and (ii) approximately $20.0 million, representing the estimated future net earnings associated with the run-off of the North America AGCO Finance portfolios existing as of the transaction date, which was recognized in “Other expense (income), net” within the Company's Condensed Consolidated Statements of Operations during the nine months ended September 30, 2026.

The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. The cash received from receivables sold under these accounts receivable sales agreements that remain outstanding as of September 30, 2026 and December 31, 2025 was approximately $1.7 billion and $2.1 billion, respectively.

Under the terms of the accounts receivable sales agreements in the U.S., Canada, Europe and Brazil, the Company pays the respective AGCO Finance entities a subsidized interest payment with respect to the accounts receivable sales agreements. These fees are reflected within losses on the sales of receivables included within “Other expense (income), net” in the Company’s Condensed Consolidated Statements of Operations. The Company does not service the receivables after the sale occurs and does not maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales agreements and determined that receivables sold under these agreements should be accounted for as off-balance sheet transactions.

In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world. The cash received from trade receivables sold under factoring arrangements that remain outstanding as of September 30, 2026 and December 31, 2025 was approximately $239.2 million and $270.5 million, respectively. Under these arrangements, the Company is required to continue to service the sold receivables at market rates. The Company does not maintain any direct retained interest in the receivables. The Company reviewed its accounting for the accounts receivable sales agreements and determined that receivables sold under these agreements should be accounted for as off-balance sheet transactions.

Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense (income), net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $20.5 million and $60.2 million during the three and the nine months ended September 30, 2026, respectively. Losses on sales of receivables associated with the accounts receivable sales agreements discussed above, reflected within “Other expense (income), net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $21.9 million and $60.6 million during the three and the nine months ended September 30, 2025, respectively.

The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers. As of September 30, 2026 and December 31, 2025, these finance joint ventures had approximately $139.4 million and $107.5 million, respectively, of outstanding accounts receivable associated with these arrangements.

In certain foreign countries, the Company invoices its finance joint ventures directly and the finance joint ventures retain a form of title to the goods delivered to dealers until the dealer makes payment so that the finance joint ventures can recover the goods in the event of dealer or end customer default on payment. This occurs as the laws of some foreign countries do not provide for a seller’s retention of a security interest in goods in the same manner as established in the United States Uniform Commercial Code. The only right the finance joint ventures retain with respect to the title are those enabling recovery of the goods in the event of customer default on payment. The dealer or distributor may not return equipment or replacement parts to the Company while its contract with the finance joint venture is in force, and can only return the equipment to the retail finance joint venture with penalties that would generally not make it economically beneficial to do so.

3. GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill during the nine months ended September 30, 2026 are summarized as follows (in millions):

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist. The Company conducts its annual impairment analyses as of October 1 st each year.

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2026 are summarized as follows (in millions):

The Company amortizes certain acquired identifiable intangible assets primarily on a straight-line basis over their estimated useful lives, which range from three to 50 years.

4. INVENTORIES

Inventories, net at September 30, 2026 and December 31, 2025, were as follows (in millions):

At September 30, 2026 and December 31, 2025, the Company had recorded $303.8 million and $271.9 million, respectively, as a reserve for surplus and obsolete inventories. These reserves are reflected within “Inventories, net” within the Company's Condensed Consolidated Balance Sheets.

5. PRODUCT WARRANTY

The warranty reserve activity for the three and nine months ended September 30, 2026 and 2025, including deferred revenue associated with the Company's extended warranties that have been sold, was as follows (in millions):

The Company’s agricultural equipment products generally are warranted against defects in material and workmanship for a period ofone tofour years. The Company accrues for future warranty costs at the time of sale based on historical warranty experience. The Company's extended warranty period for the majority of products ranges from three tofive years. Revenue is recognized for the extended warranty contracts on a straight-line basis, which the Company believes approximates the cost expected to be incurred in satisfying the obligations, over the extended warranty period. Approximately $596.4 million, $626.6 million and $623.8 million of warranty reserves are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2026, December 31, 2025 and September 30, 2025, respectively. Approximately $195.5 million, $187.7 million and $186.6 million of warranty reserves are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2026, December 31, 2025 and September 30, 2025, respectively.

The Company recognizes potential recoveries of the costs associated with warranties it provides when the collection is probable. When specifics of the recovery have been agreed upon with the Company’s suppliers through the confirmation of liability for the recovery, the Company records the recovery within “Accounts and notes receivable, net” in the Company's Condensed Consolidated Balance Sheets. Estimates of the amount of warranty claim recoveries to be received from the Company’s suppliers based upon contractual supplier arrangements are recorded within “Other current assets” in the Company's Condensed Consolidated Balance Sheets.

6. SUPPLIER FINANCE PROGRAMS

The Company has supplier financing arrangements with certain banks or other intermediaries whereby a bank or intermediary purchases receivables held by the Company’s suppliers. Under the program, suppliers have the option to be paid by the bank or intermediary earlier than the payment due date. When the supplier receives an early payment, they receive a discounted amount, and the Company pays the bank or intermediary the face amount of the invoice on the payment due date. The Company does not reimburse suppliers for any costs incurred for participation in the program. The Company and its suppliers agree on the contractual terms, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the supplier finance programs. The suppliers’ voluntary inclusion in the supplier financing programs has no bearing on the Company’s payment terms. The Company has no economic interest in a supplier’s decision to participate in the programs, and the Company has no direct financial relationship with the banks or other intermediaries as it relates to the supplier finance programs. As of September 30, 2026, payment terms with the majority of the Company’s suppliers are 30 to 180 days, which correspond to the contractual terms, with rates that are based on market rates (such as SOFR) plus a credit spread. There are no assets pledged as security under the programs. As of September 30, 2026 and December 31, 2025, the amounts outstanding that remain unpaid to the banks or other intermediaries totaled $52.1 million and $31.7 million, respectively, and are reflected in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheets.

7. INDEBTEDNESS

Long-term debt consisted of the following at September 30, 2026 and December 31, 2025 (in millions):

Credit Facility

The Company has a credit facility providing for a $1.25 billion multi-currency unsecured revolving credit facility (“Credit Facility”) that matures on December 19, 2027. As of September 30, 2026, the Company had $254.4 million in outstanding borrowings under the revolving credit facility and had the ability to borrow $995.6 million.

Uncommitted Credit Facility

The Company has an uncommitted revolving credit facility that allows the Company to borrow up to €200.0 million (or approximately $227.1 million as of September 30, 2026). The credit facility expires on December 31, 2026. As of September 30, 2026 and December 31, 2025, the Company hadno outstanding borrowings under the revolving credit facility.

Senior Term Loans due between 2026 and 2028

In October 2026, the Company repaid €52.5 million (or approximately $58.9 million) upon maturity of the Senior term loans due 2026.

Other Short-Term Borrowings

As of September 30, 2026 and December 31, 2025, the Company had short-term borrowings due within one year, excluding the current portion of long-term debt, of approximately $76.9 million and $56.1 million, respectively.

Standby Letters of Credit and Similar Instruments

The Company has arrangements with various banks to issue standby letters of credit or similar instruments, which guarantee the Company’s obligations for the purchase or sale of certain inventories and for potential claims exposure for insurance coverage. At September 30, 2026 and December 31, 2025, outstanding letters of credit totaled approximately $12.5 million and $14.0 million, respectively.

8. RESTRUCTURING AND BUSINESS OPTIMIZATION EXPENSES

Restructuring Expenses

The Company announced a restructuring program (the “Program”) in response to increased weakening demand in the agriculture industry in 2024. The Company incurred a substantial portion of the charges by the end of fiscal year 2025.

Restructuring expenses activity, which relates to severance and other related costs, during the three and nine months ended September 30, 2026, is summarized as follows (in millions):

Approximately $11.1 million and $56.9 million of restructuring expenses are included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025, respectively. Approximately $22.2 million and $25.9 million of restructuring expenses are included in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025, respectively.

Business Optimization Expenses

Business optimization expenses primarily relate to professional services costs incurred as part of the restructuring program aimed at reducing structural costs, enhancing global efficiencies by changing the Company’s operating model for certain corporate and back-office functions. During the three months ended September 30, 2026 and 2025, the Company recognized approximately $1.9 million and $4.5 million, respectively, of business optimization expenses. During the nine months ended September 30, 2026 and 2025, the Company recognized approximately $5.8 million and $31.4 million, respectively, of business optimization expenses.

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivative Transactions Designated as Hedging Instruments

Cash Flow Hedges

Foreign Currency Contracts

The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates. The changes in the fair values of these cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into “Cost of goods sold” during the period the sales and purchases are recognized. These amounts offset the effect of the changes in foreign currency rates on the related sale and purchase transactions.

The Company designates certain foreign currency contracts as cash flow hedges of expected future sales and purchases. The total notional value of derivatives that were designated as cash flow hedges was approximately $412.3 million and $210.8 million as of September 30, 2026 and December 31, 2025, respectively.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended September 30, 2026 (in millions):

(1) The outstanding contracts as of September 30, 2026 range in maturity through December 2027.

As of September 30, 2026, approximately $0.6 million of realized derivative net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts associated with inventory that had not yet been sold.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended September 30, 2025 (in millions):

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the nine months ended September 30, 2026 (in millions):

(1) The outstanding contracts as of September 30, 2026 range in maturity through December 2027.

The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the nine months ended September 30, 2025 (in millions):

Net Investment Hedges

The Company uses non-derivative and derivative instruments to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates. For instruments that are designated as hedges of net investments in foreign operations, changes in the fair value of the derivative instruments are recorded in foreign currency translation adjustments, a component of accumulated other comprehensive loss, to offset changes in the value of the net investments being hedged. When the net investment in foreign operations is sold or substantially liquidates, the amounts recorded in accumulated other comprehensive loss are reclassified to earnings. To the extent foreign currency denominated debt is de-designated from a net investment hedge relationship, changes in the value of the foreign currency denominated debt are recorded in earnings through the maturity date.

On November 4, 2024, the Company entered into $600.0 million cross currency swap contracts comprising a $200.0 million tranche with athree-year tenor, $200.0 million tranche with afive-year tenor and $200.0 million tranche with aseven-year tenor as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment. The cross currency swap contracts have expiration dates of November 6, 2027, November 6, 2029 and November 6, 2031, respectively. At maturity of the cross currency swap contracts, the Company is expected to deliver the notional amounts of approximately €385.5 million (or approximately $437.8 million as of September 30, 2026) and Fr.155.5 million (or approximately $186.4 million as of September 30, 2026) and receive $600.0 million from the counterparties. The Company receives quarterly interest payments from the counterparties based on a fixed interest rate until maturity of the cross currency swap contracts.

The following table summarizes the notional values of the instrument designated as a net investment hedge (in millions):

The following table summarizes the changes in the fair value of the cross currency swap contracts designated as a net investment hedge during the three and nine months ended September 30, 2026 and 2025 (in millions):

Derivative Transactions Not Designated as Hedging Instruments

The Company enters into foreign currency contracts to economically hedge a portion of its receivables and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the functional currency. These contracts are classified as non-designated derivative instruments. Gains and losses on such contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and are immediately recognized into earnings. As of September 30, 2026 and December 31, 2025, the Company had outstanding foreign currency contracts with a notional amount of approximately $1,958.0 million and $2,865.7 million, respectively.

The following table summarizes the results on net income of derivatives not designated as hedging instruments (in millions):

The table below sets forth the fair value of derivative instruments as of September 30, 2026 (in millions):

(1) The outstanding contracts as of September 30, 2026 range in maturity through November 2026.

The table below sets forth the fair value of derivative instruments as of December 31, 2025 (in millions):

10. STOCKHOLDERS’ EQUITY

The following tables set forth changes in redeemable noncontrolling interests and stockholders’ equity attributed to AGCO Corporation for the three and nine months ended September 30, 2026 and 2025 (in millions):

The following table sets forth changes in accumulated other comprehensive loss by component, net of tax, attributed to AGCO Corporation for the nine months ended September 30, 2026 (in millions):

The following tables set forth reclassification adjustments out of accumulated other comprehensive loss by component attributed to AGCO Corporation for the three and nine months ended September 30, 2026 and 2025 (in millions):

(1) Losses (Gains) included within the Condensed Consolidated Statements of Operations for the three months ended September 30, 2026 and 2025, respectively.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost. Refer to Note 13 for additional information.

(1) Losses (Gains) included within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026 and 2025, respectively.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost. Refer to Note 13 for additional information.

Share Repurchase Program

On July 9, 2025, the Company's Board of Directors authorized a new share repurchase program authorizing the Company to repurchase up to $1.0 billion of the Company's common stock, which has no expiration date. In May 2026, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase an aggregate of $293.0 million of shares of its common stock. The Company received approximately 1,997,613 shares associated with this transaction as of June 30, 2026. In July 2026, the Company received an additional 593,462 shares upon final settlement of its May 2026 ASR agreement. In November 2025, the Company entered into ASR agreements withtwo financial institutions to repurchase an aggregate of $250.0 million of shares of its common stock. The Company received approximately 1,997,204 shares associated with these transactions as of December 31, 2025. In February 2026, the Company received an additional 333,755 shares upon final settlement of its November 2025 ASR agreements. All shares received under the ASR agreements were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets. In conjunction with the Cooperation Agreement entered into with Tractors and Farm Equipment Limited (“TAFE”) in June 2025 (the “Cooperation Agreement”), TAFE agreed to participate on a pro-rata basis in the Company’s share repurchase programs as authorized by the Company’s Board of Directors from time to time. Under the Cooperation Agreement, TAFE also retains the right to maintain its existing percentage of beneficial ownership of the Company’s common stock. In February 2026, pursuant to the Cooperation Agreement, the Company committed to repurchase a pro-rata amount of shares from TAFE related to the Company's share repurchase program executed in the fourth quarter of 2025. The Company accounted for this arrangement as a forward share repurchase contract and, as of March 31, 2026, recorded a liability. Settlement occurred in May 2026, resulting in the repurchase of 422,590 shares for approximately $52.1 million. In August 2026, pursuant to the Cooperation Agreement, the Company committed to repurchase a pro-rata amount of shares from TAFE related to the Company's share repurchase program executed in the second quarter of 2026. The Company accounted for this arrangement as a forward share repurchase contract and settlement occurred in August 2026, resulting in the repurchase of 492,418 shares for approximately $56.8 million. All shares repurchased were retired upon receipt, and the excess of the purchase price over par value per share was recorded to a combination of “Additional paid-in capital” and “Retained earnings” within the Company’s Condensed Consolidated Balance Sheets.

As of September 30, 2026, the remaining amount authorized to be repurchased under board-approved share repurchase authorizations was approximately $383.1 million, which has no expiration date.

Dividends

During the three months ended September 30, 2026 and 2025, the Company declared and paid cash dividends of $0.30 and $0.29 per common share, respectively. During the nine months ended September 30, 2026 and 2025, the Company declared and paid cash dividends of $0.89 and $0.87 per common share, respectively. On April 23, 2026, the Company's Board of Directors approved an increase in the Company's regular quarterly dividend to $0.30 per share, from $0.29 per share. On October 22, 2026, the Company's Board of Directors declared a regular quarterly dividend of $0.30 per common share to be paid on December 15, 2026, to all stockholders of record as of the close of business on November 16, 2026.

11. NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per common share assumes the exercise of outstanding stock-settled stock appreciation rights (“SSARs”) and the vesting of restricted stock unit awards (“RSUs”) using the treasury stock method when there is no other circumstance other than the passage of time under which they would not be issued, and the effects of such assumptions are dilutive.

A reconciliation of net income attributable to AGCO Corporation and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three and nine months ended September 30, 2026 and 2025 is as follows (in millions, except per share data):

12. INCOME TAXES

The income tax provision (benefit) and effective tax rate for the three and nine months ended September 30, 2026 and 2025 are set forth below (in millions, except percentages):

Our effective tax rate varies from period to period due to the mix of taxable income and losses in the various tax jurisdictions in which we operate. Our effective tax rates for the three and nine months ended September 30, 2026, were higher than the comparable periods in 2025, primarily due to tax benefits recognized in 2025 associated with a legal entity reorganization. During the three and nine months ended September 30, 2025, the Company’s income tax provision included a net tax benefit of $4.7 million and $259.9 million, respectively, related to a legal entity reorganization.

The Company maintains a valuation allowance to reserve a portion of its net deferred tax assets in the United States and certain foreign jurisdictions. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company regularly assesses the likelihood that its deferred tax assets will be recovered from estimated future taxable income and available tax planning strategies and has determined that all adjustments to the valuation allowances have been deemed appropriate. In making this assessment, all available evidence was considered including the current economic climate, as well as reasonable tax planning strategies. The Company believes it is more likely than not that it will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.