DULUTH, Ga., Dec. 20 /PRNewswire-FirstCall/ -- AGCO (NYSE: AG), a worldwide designer, manufacturer, and distributor of agricultural equipment, reports on the status regarding the U.K. Pension Plan. As reported in October 2002, the Company applied to the High Court in London, England, for clarification of a rule of its U.K. pension plan which governs the circumstances in which full pensions are payable without reduction in the event that an employee retires or is terminated prior to his normal retirement date.
On December 20, 2002, the Court ruled that full pensions are payable, in certain circumstances, in the context of early retirements or terminations. Under the ruling, the previously announced closure of the Coventry facility would entitle certain terminated employees to receive a full pension. The Company and its advisors remain of the view that full pensions should not be payable and expect to appeal the ruling.
In the event that the Company's view is not ultimately upheld, the estimated impact for the pension plan would be an increase in plan liabilities of between $50 million and $60 million. This would require the Company to provide additional funding to the pension plan of, on average, approximately $10 million per annum for the first three years and approximately $5 million per annum for the next seven years. The Company is evaluating, with its advisors, whether or not it is appropriate to record a charge in the fourth quarter of 2002.
Safe Harbor Statement
AGCO's plans with respect to appealing the ruling, the amount of the additional plan liability and the amount of additional funding that may be required are forward looking statements. Actual results may differ materially from the results suggested by the forward looking statements due to a number of factors including the difficulties inherent in making estimates with respect to the pension fund liabilities (due to the need to estimate future performance of fund investments and interest rates among other matters), the complexity of the documents and law governing the fund and the preliminary nature of AGCO's analysis of the implications of the ruling, and the possibility that the ruling will be reversed upon appeal.
AGCO Corporation, headquartered in Duluth, Georgia, is a global designer, manufacturer and distributor of agricultural equipment and related replacement parts. AGCO products are distributed in 140 countries. AGCO offers a full product line including tractors, combines, hay tools, sprayers, forage equipment and implements through more than 7,350 independent dealers and distributors around the world. AGCO products are distributed under the brand names AGCO Tractors, Ag-Chem, Challenger, Farmhand, FENDT, Fieldstar, GLEANER, Glencoe, Hesston, LOR*AL, Massey Ferguson, New Idea, SOILTEQ, Spra-Coupe, Sunflower, Tye, White Planters and Willmar. AGCO provides retail financing through AGCO Finance in North America and through Agricredit in the United Kingdom, France, Germany, Ireland, Spain and Brazil. In 2001, AGCO had sales of $2.5 billion.
Please visit our website at www.agcocorp.com .
SOURCE AGCO Corporation