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Item 1A. Risk Factors

2023-02-17 compared with 2022-02-23 · 126 added, 95 removed, 351 unchanged (39% of the section changed)

RISKS AND UNCERTAINTIES

You should carefully consider the following risk factors, in addition to the other information contained in this Annual Report on Form 10-K and in any other documents to which we refer you in this Annual Report on Form 10-K, before purchasing our securities.

You should carefully consider the following risk factors, in addition to the other information contained in this report and in any other documents to which we refer you in this report, before purchasing our securities.

The risks and uncertainties described below are not the only ones we face.

Risks related to our business

Our financial condition and results of operations have been and may continue to be impacted by the COVID-19 pandemic

Our overall performance depends upon domestic and worldwide economic and political conditions.

The global spread of COVID-19 continues to create volatility, uncertainty, and economic disruption.

The pandemic caused a slowdown in worldwide economic activity and is currently causing disruptions to global supply chains.

The COVID-19 pandemic continues to have widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices.

Despite the efforts to contain the pandemic, new variants of the virus are causing additional outbreaks.

The COVID-19 pandemic has impacted and may continue to impact our business operations, including our employees, customers, partners, and communities, and there is substantial uncertainty in the nature and degree of its continued effects over time.

The extent to which COVID-19 impacts our business, operations, and financial results will depend on numerous evolving factors that we are not able to accurately predict, including:

• the continuing economic impacts of the pandemic;

• governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

• the effect on our customers and customer demand for and ability to pay for our products and services;

• restrictions or disruptions to transportation, including reduced availability of ground or air transport;

• continued disruption of the supply chain for our products;

• our ability to comply with financial covenants, including maintaining required leverage ratios, which could result in debt becoming due and payable prior to its stated maturity;

• changes in our effective tax rate due to effects of COVID-19 on our geographic mix of earnings.

We have experienced disruption in our supply chain as a result of the effects of COVID-19 and related events, and are subject to ongoing supply chain risks, which adversely affect our revenue and results of operations

We are dependent upon a limited number of contract manufacturers for the manufacture, testing, and assembly of certain products and specific suppliers for a number of our critical components.

Our current reliance on a limited group of contract manufacturers and suppliers involves risks, including the potential inability to obtain products or components to meet customers’ delivery requirements, reduced control over pricing and delivery schedules and discontinuation of or increased prices for certain components.

We have experienced disruption in our supply chain as a result of the effects of COVID-19 related events and their impact on our suppliers and on international trade in general, leading to shortfalls in available components we need to make products as well as increased costs to obtain components, to make products, and to transport components and products.

Some suppliers have prioritized the orders of larger customers and are focusing their investments in additional capacity on higher volume components.

We are experiencing extended delivery times for certain components of our hardware products and increased freight costs.

As a result, we are making binding commitments with longer lead times and procuring components at higher prices, which may impact our flexibility to adapt to changing market conditions and product demand.

These disruptions have had an adverse effect on our ability to meet customer demand and have resulted in delays in shipping products to customers and dealers.

T he severity of the disruptions is continuously changing so that the impact on our ability to meet demand for particular products varies over time, which creates substantial uncertainties in forecasting our financial results.

We expect these disruptions to impact our financial results.

Future disruptions could occur as a result of any number of events, including, but not limited to, the continuing impacts of the COVID-19 pandemic, increases in wages that drive up prices or labor, the imposition of new regulations, quotas or embargoes on components, a scarcity of, or significant increase in the price of, required components for our products, trade restrictions, tariffs or duties, fluctuations in currency exchange rates, transportation failures affecting the supply chain and shipment of materials and finished goods, third party interference in the integrity of the products sourced through the supply chain, the unavailability of raw materials, severe weather conditions, natural disasters, civil unrest, military conflicts, geopolitical developments, war or terrorism, and disruptions in utility and other services.

Any other circumstance that would require us to seek alternative sources of supply or to manufacture, assemble, and test such components internally could significantly delay our ability to ship our products, which could damage relationships with current and prospective customers and could harm our reputation and brand as well as our results of operations.

Lastly, due to supply chain issues, we may accumulate excess inventories if we inaccurately forecast demand for our products.

We operate globally and are subject to significant risks in many jurisdictions

We operate globally and are subject to significant risks in many jurisdictions, and our business, financial condition, and results of operations have been and may continue to be impacted by adverse global and regional economic conditions

We have operations in many countries, and a significant portion of our revenue is derived from countries outside of the United States.

As a result, our operations, and our financial results, including our ability to design, develop, or sell products, may be adversely affected by a number of factors outside of our control, including:

• global and local economic conditions;

As a result, our business, financial condition, and results of operations, including our ability to design, develop, or sell products, may be adversely affected by a number of factors outside of our control, including:

• global and local economic conditions, such as inflation and recession;

• the demand and cost of commodities, such as corn and oil;

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These factors or any combination of these factors could adversely affect our business, financial condition, and results of operations.

We have experienced disruption in our supply chain including the effects of COVID-19 and related events, and are subject to ongoing supply chain risks, which could adversely affect our revenue and results of operations

We are dependent upon a limited number of contract manufacturers for the manufacture, testing, and assembly of certain products and specific suppliers for a number of our critical components.

These arrangements can generally be terminated with a limited notice.

In the first half of 2022, we have

experienced disruption in our supply chain as a result of the effects of COVID-19 and the geopolitical conditions such as the ongoing military conflict between Russia and Ukraine and related events and their impact on our suppliers and on international trade in general, leading to shortfalls in available components we need to make products as well as increased costs to obtain components, to make products, and to transport components and products.

The disruptions include extended delivery times for certain components of our hardware products and increased freight costs.

These disruptions have had an adverse effect on our ability to meet customer demand and have resulted in delays in shipping products to customers and dealers.

Future disruptions could occur as a result of any number of events, including, but not limited to, inflationary cost increases, increases in wages that drive up prices or labor, the imposition of new regulations, quotas or embargoes on components, a scarcity of, or significant increase in the price of, required components for our products, trade restrictions, tariffs or duties, fluctuations in currency exchange rates, transportation failures affecting the supply chain and shipment of materials and finished goods, third party interference in the integrity of the products sourced through the supply chain, the unavailability of raw materials, severe weather conditions, natural disasters, civil unrest, military conflicts, geopolitical developments, war or terrorism, and disruptions in utility and other services.

Lastly, due to supply chain issues, we may accumulate excess inventories if we inaccurately forecast demand for our products.

If we are unable to effectively integrate, streamline and manage our increasingly diverse and complex businesses and operations, our ability to generate growth and revenue from new or existing customers may be adversely affected

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These factors or a combination of these factors could have an adverse impact on our business, financial condition, and results of operations.

Changes in our software and subscription businesses may adversely impact our operations and financial results

Changes in our software and subscription businesses may adversely impact our business, financial condition and results of operations

An increasing portion of our revenue is generated through software maintenance and subscription revenue, which includes Software as a Service (“SaaS”) and new subscription services for integrated solutions.

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Customer satisfaction with our services is affected by a variety of factors, including but not limited to security, reliability, performance, concerns about data privacy, current subscription terms, customer preference, and industry adoption.

If customers do not renew their contracts for our products, our maintenance and subscription revenue will decline, and our financial results will suffer.

do not renew their contracts for our products, our maintenance and subscription revenue will decline, and our financial results will suffer.

Our subscription models provide our customers the right to access certain of our software in a hosted environment or use downloaded software for a specified subscription period.

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We continually re-evaluate our software licensing programs and subscription programs, including specific license models, delivery methods, and terms and conditions.

Changes to our licensing programs and subscription programs, including the introduction of new subscription services for integrated solutions that include hardware, the timing of the release of enhancements, upgrades, maintenance releases, the term of the contract, discounts, and promotions, could impact the timing of the recognition of revenue for our products, and adversely affect our cash flow, operating results, and financial condition.

We may not be able to enter into or maintain important alliances and distribution relationships

We believe that in certain business opportunities, our success will depend on our ability to form and maintain alliances with industry participants, such as Caterpillar, Nikon, Hilti, and CNH Industrial.

We believe that in certain business opportunities, our success will depend on our ability to form and maintain alliances with industry participants.

Our failure to form and maintain such alliances, or the preemption or disruption of such alliances by actions of competitors, could adversely affect our ability to sell our products to customers.

Our relationships with substantial industry participants such as Caterpillar and CNH Industrial are complex and multifaceted and are likely to evolve over time based upon the changing business needs and objectives of the parties.

Evolution of our respective business strategies and diversification of product portfolios may lead to increased competition with our strategic allies, placing additional pressure on these relationships.

Since these strategic relationships contribute to significant ongoing business in certain of our important markets, changes in these relationships could adversely affect our sales.

In addition, we utilize dealer networks, including those affiliated with some of our strategic allies such as Caterpillar and CNH Industrial to market, sell, and service many of our products.

Our relationships with substantial industry participants such as Caterpillar, Nikon, and Hilti are complex and multifaceted and are likely to evolve over time based upon the changing business needs and objectives of the parties.

To develop and expand our distribution channels, we must continue to expand and improve our processes and procedures that support our distribution channels, including our investment in systems and training, and those processes and procedures may become increasingly complex and difficult to manage.

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Disruption of dealer coverage within specific geographic or end-user markets could cause difficulties in marketing, selling, or servicing our products and have an adverse effect on our business, financial condition, and results of operations.

Lastly, dealers who carry products that compete with our products may focus their inventory purchases and sales efforts on goods provided by competitors due to industry demand or profitability.

Such sourcing decisions can adversely impact our sales, financial condition, an d results of operations.

Investing in and integrating new acquisitions or divesting businesses could be costly, place a significant strain on our management systems and resources, or fail to deliver expected outcomes, which could adversely impact our results of operations

We typically acquire a number of businesses each year and intend to continue to acquire other businesses.

We utilize dealer networks, including those affiliated with Caterpillar and CNH to market, sell, and service many of our products.

Dealers who carry products that compete with our products may focus their inventory purchases and sales efforts on goods provided by competitors due to industry demand or profitability.

Such sourcing decisions can adversely impact our business, financial condition, an d results of operations.

A significant portion of our aftermarket sales have historically been generated through CNH, which resells our aftermarket products through its dealer network.

Moving forward, as part of our Connect and Scale strategy, we will directly manage, and further build out, our independent dealer network to ensure better access, service, and support for our customers.

Our aftermarket solutions address both new equipment as well as equipment already in the field, and we will reach customers through these independent dealer partners, who are focused on selling the full portfolio of Trimble-branded precision agriculture solutions.

Aligned with this strategy, in February 2023, we gave CNH a 12-month notification that we will no longer be supplying aftermarket precision agriculture products to CNH for resale through the CNH dealer network.

We will continue to supply hardware to CNH for their factory installations.

While we do not expect this action to have a material effect on our revenues in 2023, there c an be no assurance that our revenue from our independent dealer network will offset the reduction in revenue resulting from our discontinuance of sales of aftermarket products to CNH.

Evolution of our respective business strategies and diversification of product portfolios may lead to increased competition with our other strategic allies, placing additional pressure on these relationships.

Since these strategic relationships contribute to significant ongoing business in certain o f our important markets, changes in these relationships could adversely affect our sales.

We typically acquire a number of businesses each year and we intend to continue to acquire other businesses.

Acquisitions entail numerous risks, including:

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Companies that we acquire may operate with different cost and margin structures, which could further cause fluctuations in our operating results and adversely affect our business, financial condition, and results of operations.

In December 2022, we signed a definitive agreement to acquire Transporeon, a leading European cloud-based transportation management software platform.

The acquisition is expected to close in the first half of 2023.

We may not complete the acquisition of Transporeon within the time frame we anticipate or at all.

The completion of the acquisition of Transporeon is subject to certain closing conditions, including the receipt of merger control clearances in Austria, Germany, and Poland.

The failure to satisfy all the required conditions could delay or even prevent the acquisition from occurring at all.

If we consummate the acquisition of Transporeon, there is a risk that the desired benefits of the acquisition may not be fully realized or that we may fail to integrate the acquired assets as expected, which may negatively impact our business, financial condition, and results of operations.

From time to time we have divested businesses, and we expect to do so in the future.

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Divestitures may adversely impact our results if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested products or businesses, or mitigate overhead costs allocated to those businesses.

We could also experience higher than expected transaction costs and write-offs of significant amounts of goodwill.

We face substantial competition in our markets, which could decrease our revenue and growth rates or impair our financial condition and results of operations

We could also experience higher than expected transaction costs and business sale losses, which may adversely affect our business, financial condition, and results of operations .

We face substantial competition in our markets, which could decrease our revenue and growth rates or impair our business, financial condition, and results of operations

Our markets are highly competitive, and we expect that both direct and indirect competition will increase in the future.

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We may not be able to implement this strategy successfully, and our products may not be competitive with other technologies or products that may be developed by our competitors, many of whom have significantly greater financial, technical, manufacturing, marketing, sales, and other resources than we do.

If we are unable to attract and retain qualified personnel, our business, operating results, financial condition, and cash flows could be harmed

If we are unable to attract and retain qualified personnel, our business, financial condition, and results of operations could be harmed

Our continued success depends, in part, on our ability to hire and retain qualified personnel and to advance our corporate strategy, and preserve the key aspects of our corporate culture.

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The COVID-19 pandemic has also heavily impacted the environment for attracting and managing employees, and our failure to successfully manage these changes and navigate transitions such as return to office could harm our ability to attract and retain the best talent.

Our inability to hire and retain qualified management and skilled personnel, particularly engineers, salespeople, and key executive management, could disrupt our development efforts, sales results, business relationships, and our ability to execute our business plan and strategy on a timely basis and could materially and adversely affect our operating results, financial condition, and cash flows.

Our inability to hire and retain qualified management and skilled personnel, particularly engineers, salespeople, and key executive management, could disrupt our development efforts, sales results, business relationships, and our ability to execute our business plan and strategy on a timely basis and could materially and adversely affect our business, financial condition, and results of operations.

In addition, any future reductions in force or other restructuring intended to improve operational efficiencies and operating costs, may adversely affect our ability to attract and retain qualified personnel.

Equity grants are a critical component of our current compensation programs.

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Computer hackers, foreign governments, cybercriminals, or cyber terrorists may attempt to or succeed in penetrating our network security and our website.

The discovery of wide-scale cybersecurity intrusions into U.S.

government and private company computer networks by alleged Russian state actors and the mobilization of large-scale cybercrime actors using ransomware and other techniques underscore the ongoing threat posed by sophisticated private and foreign state-sponsored attacks.

Additionally, due to geopolitical tensions, such as the ongoing military conflict between Russia and Ukraine, we and our third-party vendors may be vulnerable to a heightened risk of cybersecurity attacks, phishing attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state actors or affiliated actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our products and services.

Unauthorized access to our proprietary business information or customer data may be obtained through break-ins, sabotage, breach of our secure network by an unauthorized party, computer viruses, computer denial-of-service attacks, employee theft or misuse, breach of the security of the networks of our third-party providers, or other misconduct.

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We have experienced security breaches in the past, and despite our efforts to maintain the security and integrity of our systems, it is impossible to eliminate this risk.

Because the techniques used by computer hackers who may attempt to penetrate and sabotage our network security or our website change frequently, they may take advantage of weaknesses in third party technology or standards of which we are unaware or that we do not control and may not be recognized until long after they have been launched against a target.

We may be unable to anticipate or counter these techniques.

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The timely availability and cost-effective production of these products in volume and their acceptance by customers are important to our future success.

This has been and may continue to be negatively impacted by the global supply chain shortage.

This has been and may

continue to be negatively impacted by the global supply chain shortage.

If we are unable to introduce new products and services, if other companies develop competing technology products and services, or if we do not develop compelling new products and services, our number of customers may not grow as anticipated, or may decline, which could harm our operating results.

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The software industry is characterized by rapidly changing customer preferences, which require us to address multiple delivery platforms, new mobile devices, and cloud computing.

Life cycles of software products can be short, and this can exacerbate the risks associated with developing new products.

Lifecycles of software products can be short, and this can exacerbate the risks associated with developing new products.

The introduction of third party solutions embodying new, disruptive technologies and the emergence of new industry standards could make our existing and future software solutions and other products obsolete or non-competitive.

If we are not able to develop software and other solutions that address the increasingly sophisticated needs of our customers, or if we are unable to adapt to new platforms, technologies, or new industry standards that impact our markets, our ability to retain or increase market share and results of operations could be adversely affected.

If we are not able to develop software and other solutions that address the increasingly sophisticated needs of our customers, or if we are unable to adapt to new platforms, technologies, or new industry standards that impact our markets, our ability to retain or increase market share, business, financial condition, and results of operations could be adversely affected.

Some of our products rely on third-party technologies including open-source software, which could result in product incompatibilities or harm availability of our products and services

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courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to market or sell our products or to develop new products.

In such event, we could be required to seek licenses from third parties in order to continue offering our products, to disclose and offer royalty-free licenses in connection with our own source code, to re-engineer our products, or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could adversely affect our business.

We are dependent on proprietary technology, which could result in litigation that could divert significant valuable resources

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For example, individuals and groups may purchase intellectual property assets for the purpose of asserting claims of infringement and attempting to extract settlements from us or our customers.

The number of these types of claims has increased in recent years.

As new patents are issued or are brought to our attention by the holders of such patents, it may be necessary for us to secure a license from such patent holders, redesign our products, or withdraw products from the market.

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International allocations of radio frequency are made by the International Telecommunications Union (“ITU”), a specialized technical agency of the United Nations.

These allocations are further governed by radio regulations that have treaty status and which may be subject to modification every two to three years by the World Radio Communication Conference.

These allocations are further governed by radio regulations that have treaty status and which

may be subject to modification every two to three years by the World Radio Communication Conference.

Each country also has regulatory authority over how each band is used in the country.

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Many of the GPS satellites currently in orbit were originally designed to have lives of 7.5 years and are subject to damage by the hostile space environment in which they operate.

However, of the current deployment of operational satellites in orbit, some have been in operation for 15 years or more.

However, of the current deployment of operational satellites in orbit, some have been in operation for much longer.

Repair of damaged or malfunctioning satellites is currently not economically feasible.

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government and rely on continued funding and maintenance of these systems.

Any curtailment of the operating capability of these systems or limitations on access to, or use of the signals, or discontinuance of service could result in degradation of our services or product performance, with an adverse effect on our business.

Many of our products use satellite signals from the Russian GLONASS, China’s BeiDou, and the European Galileo GNSS Systems.

Other countries, such as India, are in the process of creating their own GNSS systems, and we either have developed or will develop products that use GNSS signals from these systems.

Many of our products use satellite signals available globally from the Russian GLONASS, China’s BeiDou, and the European Galileo GNSS Systems.

Other countries have developed regional GNSS systems, such as India’s NavIC and Japan's QZSS, which we support in some products.

National or European authorities may provide preferential access to signals to companies associated with their markets, including our competitors, which could harm our competitive position.

Geopolitical tensions between the United States and Russia and China could also result in the restriction of our usage of such satellite signals.

Use of non-U.S.

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If we are unable to develop timely and competitive commercial products using these systems, or obtain timely and equal access to service signals, this could result in lost revenue.

These authorities may also adopt protectionist measures favoring national companies who make use of their GNSS systems, to the detriment of our products using the U.S.

GPS system, which could harm our business, financial condition, and results of operations.

Regulatory risks

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Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, and prohibitions or conditions on the conduct of our business.

Any such violations could include prohibitions or conditions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business, and our results of operations.

We operate in many parts of the world that have experienced significant governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.

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Our success depends, in part, on our ability to anticipate these risks and manage these difficulties.

We are subject to evolving privacy laws in the United States and other jurisdictions that are subject to potentially differing interpretations and which could adversely impact our business and require that we incur substantial costs

Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S.

We are subject to evolving and potentially conflicting privacy laws in the United States and other jurisdictions, which could adversely impact our business and require that we incur substantial costs

Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to unclear or potentially differing interpretations, and various U.S.

federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters.

New privacy laws have come into effect in Brazil and New Zealand in 2020 and in China in 2021, and revisions of privacy laws are currently pending in countries like Canada and India.

In Europe, conflicting privacy policies are being pursued by the Commission, legislators and enforcement agencies.

New privacy laws may lack clarity and depend on regulators implementing further rules and guidance, which are often significantly delayed, such as in Brazil, China and the European Union.

Some countries are considering or have passed legislation that requires local storage and processing of data, including geospatial data, which could impact our ability to deliver cloud-based solutions in an efficient manner.

and European Union have not yet managed to replace the EU-U.S.

Privacy Shield as a basis for data transfers from the EU to the U.S.

and European Union continue to pursue agreement on the governing basis for data transfers from the EU to the U.S.

but have not yet adopted the EU-U.S.

Data Privacy Framework.

International transfers of personal data present ongoing compliance challenges and complicate our business transactions and operations.

In addition, the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020, was amended by the California Privacy Rights Act (“the “CPRA”) and will take full effect in January 2023.

The CCPA and CPRA, among other things, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

In addition, the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020, was amended by the California Privacy Rights Act (“the “CPRA”) and took full effect in January 2023, with enforcement to begin on July 1, 2023.

The CCPA and CPRA, among other things, give California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

states and the U.S.

Congress have introduced, and some states like Virginia and Colorado have enacted in 2021, data privacy legislation, which may impact our business.

Data privacy legislation, amendments and revisions to existing data privacy legislation, and other developments impacting data privacy and data protection may require us to modify our data processing

practices and policies, increase the complexity of providing our products and services, and cause us to incur substantial costs in an effort to comply.

Congress have introduced, and some states like Virginia, Colorado, Connecticut and Utah have enacted, data privacy legislation, which may impact our business.

Such legislation, amendments and revisions to existing data privacy legislation, and other developments impacting data privacy and data protection may contain unclear and conflicting requirements, and may require us to modify our data processing practices and policies, increase the complexity of providing our products and services, and cause us to incur substantial costs in an effort to comply.

Failure to comply may lead to significant fines and business interruption.

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As we develop and enhance features which support automated and autonomous operation of our products, we are increasingly subject to functional safety regulation.

CE certification is required for GNSS receivers and data communications products, which must also conform to the European harmonized GNSS receiver requirements and the radio equipment directive to be sold in the European community.

Conformité Européenne (CE) certification is required for GNSS receivers and data communications products, which must also conform to the European harmonized GNSS receiver requirements and the radio equipment directive to be sold in the European community.

In the future, the U.S., European, or other governmental authorities may propose GPS receiver testing and certification for compliance with published GPS signal interface or other specifications.

Governmental authorities may also propose other forms of GPS receiver performance standards, which may limit design alternatives, hamper product innovation, or impose additional costs.

Some of our products that use integrated radio communication technology require product type certification and some products require an end user to obtain licensing from the FCC and other national authorities for frequency-band usage.

Some of our products that use integrated radio communication technology require product type certification and some products require an end user to obtain licensing from the

FCC and other national authorities for frequency-band usage.

Compliance with evolving product regulations in our major markets could require that we redesign our products, cease selling products in certain markets, and increase our costs of product development.

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Our debt could adversely affect our cash flow and prevent us from fulfilling our financial obligations

At the end of 2021, our total debt was comprised primarily of senior notes of approximately $1.3 billion.

At the end of 2022, our total debt was $1.5 billion, of which $1.3 billion was senior notes.

When our senior notes mature, we will have to utilize significant resources to repay these senior notes or seek to refinance them.

If we decide to refinance the senior notes, we may be required to do so on different or less favorable terms, or we may be unable to refinance the senior notes at all, both of which may adversely affect our financial condition.

Any downgrade by credit rating agencies could adversely affect our cost of borrowing, limit our access to the capital markets, or result in more restrictive covenants in future debt agreements.

Our outstanding indebtedness could have other important consequences, such as:

In December 2022, in connection with our pending acquisition of Transporeon, we arranged to incur substantial new debt obligations including those arising under the following:

• a term loan credit agreement providing for an unsecured delayed draw term loan facility in the aggregate principal amount of $1.0 billion, comprised of commitments for a 3-year tranche in the amount of $500.0 million and a 5-year tranche in the amount of $500.0 million, and

• an amendment to our 2022 Credit Facility that made $600.0 million of the existing commitments under the Facility available for the pending acquisition of Transporeon and that increases our maximum permitted leverage ratio following the closing of the acquisition.

Prior to arranging the above two transactions, we had entered into a 364-day bridge facility commitment letter (the “Bridge Facility”) that provided for up to €1.88 billion of commitments for term loans to fund our acquisition of Transporeon.

The Bridge Facility was subsequently reduced to €500 million by the term loan credit agreement and the amended 2022 Credit Facility.

Because of the additional outstanding indebtedness we have and expect to incur, we have temporarily discontinued share repurchases.

Our outstanding indebtedness, including the substantial indebtedness we plan to incur in connection with the pending acquisition of Transporeon, could have other important consequences, such as:

• decreasing our business flexibility, limiting access to capital, and/or increasing our borrowing costs;

• requiring us to dedicate a portion of our cash flow from operations and other capital resources to debt service, thereby reducing our ability to fund working capital, capital expenditures, general corporate purposes, and other cash requirements, particularly if the ratings assigned to our debt securities by rating organizations were revised downward;

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If interest rates increase, our interest expense will also increase as would the costs of refinancing existing indebtedness or obtaining new debt.

Our ability to incur additional indebtedness over time may be limited due to applicable financial covenants and restrictions, and due to the risk that significantly increasing our level of indebtedness could impact the ratings assigned to our debt securities by rating organizations, which in turn would increase the interest rates and fees that we pay in connection with our indebtedness.

Significant increases in our level of indebtedness could impact the ratings assigned to our debt securities by rating organizations, which in turn would increase the interest rates and fees that we pay in connection with our indebtedness.

Changes in our effective tax rate may reduce our net income in future periods

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Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive or negative for our earnings and cash flow, but such changes could impact our financial results.

In October 2021, the Organization of Economic Cooperation and Development (“OECD”) announced that many world leaders tentatively signed on to a framework that imposes a minimum tax of 15% to certain multinational enterprises.

We will continue to monitor and assess how this may impact our financial results if and when implemented.

The Organization of Economic Cooperation and Development (“OECD”) introduced and member countries agreed to a framework that imposes a minimum tax of 15% to certain multinational enterprises.

We will continue to monitor and assess how this may impact our financial results when implemented.

We are currently in various stages of multiple year examinations by state and foreign taxing authorities.

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We may be affected by fluctuations in currency exchange rates

Over half of our revenue is derived from sales to customers outside of the U.S.

We are potentially exposed to adverse as well as beneficial movements in currency exchange rates.

Although the majority of our sales are transacted in U.S.

dollars, expenses may be paid in local currencies.

Historically, the majority of our revenue contracts are denominated in U.S.

Dollars, with the most significant exception being Europe, where we invoice primarily in Euro.

Additionally, a portion of our expenses, primarily the cost to manufacture, cost of personnel to deliver technical support on our products and professional services, sales and sales support, and research and development, are denominated in foreign currencies, primarily the Euro.

An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the U.S.

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Our foreign exchange forward contracts reduce, but do not eliminate, the impact of currency exchange rate movements;

therefore, changes in exchange rates could harm our financial condition and results of operations.

therefore, changes in exchange rates could harm our business, financial condition, and results of operations.

Risks related to ownership of our stock

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• the imposition of tariffs or other trade barriers;

• political, economic, or social uncertainty;

• political, economic, or social uncertainty, such as the ongoing military conflict between Russia and Ukraine;

• global pandemics, like the COVID-19 pandemic;

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Any such fluctuations could adversely affect the market price of our common stock.

Our annual and quarterly performance may fluctuate, which could adversely impact our operations, financial results, and stock price

Our annual and quarterly performance may fluctuate, which could adversely impact our financial condition, results of operations, and stock price

Our operating results have fluctuated and can be expected to continue to fluctuate in the future on a quarterly and annual basis as a result of a number of factors, many of which are beyond our control.

3 unchanged sentences

• supply chain disruptions;

• the amount of inventory that our dealer networks carry;

• the timing of recognizing revenue;

11 unchanged sentences

Our agricultural equipment revenue has historically been the highest in the first quarter, followed by the second quarter, reflecting buying in anticipation of the spring planting season in the Northern hemisphere.

If we do not accurately forecast seasonal demand, we may be left with unsold inventory or have a shortage of inventory, which could adversely impact our results of operations.

If we do not accurately forecast seasonal demand, we may be left with unsold inventory or have a shortage of inventory, which could adversely impact our business, financial conditions, and results of operations.

Due in part to the buying patterns of our customers, a portion of our hardware revenue occurs from orders received and immediately shipped to customers in the last few weeks and days of each quarter, while our operating expense tends to remain fairly predictable.

7 unchanged sentences

Management may not adequately reserve for a contingent liability, or may suffer unforeseen liabilities, which could then impact the results of a financial period.

A material adverse impact on our consolidated financial statements could occur for the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable which, if not expected, could harm our financial condition and results of operations.

Catastrophic events or geopolitical conditions could disrupt our operations

1 unchanged sentence

The threat of terrorism and war and heightened security and military activity in response to this threat, or any future acts of terrorism or hostilities, may involve a redeployment of the satellites used in GNSS or interruptions of the system.

Civil unrest, local conflicts, or other political instability may adversely impact regional economies, cause work stoppages, or result in limitations on business transactions with the affected jurisdictions.

Civil unrest, local conflicts, or other

political instability may adversely impact regional economies, cause work stoppages, or result in limitations on business transactions with the affected jurisdictions.

To the extent that such interruptions result in delays or the cancellation of orders, disruption of the manufacturing or shipment of our products, or reduced demand for our products, these interruptions could have a material adverse effect on our business, financial condition, and results of operations.

Geopolitical risks, resulting from the Russia and Ukraine conflict, could result in increased market volatility and uncertainty, which could negatively impact our business, financial condition, and results of operations

The uncertain nature, magnitude, and duration of hostilities stemming from the ongoing military conflict between Russia and Ukraine, including effects of sanctions on the world economy and markets, possible retaliatory cyber-attacks, and supply chain disruptions, have contributed to increased market volatility and uncertainty, and could have an adverse impact on our business and could amplify the existing supply chain challenges we faced.

As a result of the ongoing military conflict in Ukraine, the United States, the United Kingdom, and the European Union governments, among others, implemented a series of sanctions packages against Russia.

The sanctions have contributed to supply chain disruptions, higher commodity prices, higher oil and natural gas price, and a slowdown in global economic growth.

It is not possible to predict the broader consequences of the conflict, which could include further sanctions;

regional instability;

geopolitical shifts and adverse effects on macroeconomic conditions;

the availability and cost of raw materials, supplies, freight, and labor;

currency exchange rates;

our suppliers, customers, and potential consumer demand for our products;

and financial markets, all of which could impact our business, financial condition, and results of operations.

In December 2022, we entered a definitive agreement to acquire Transporeon, a leading cloud-based transportation management software platform that is headquartered in Germany and has operations in Russia and Ukraine.

If the acquisition closes as expected, it is possible that the ongoing military conflict in Ukraine or related sanctions may limit the usage of Transporeon products, disrupt our employees (both within and outside of Ukraine, including nearby regions such as Poland), negatively impact the productivity of affected employees, or lead to claims against us for failure to fulfill our contractual obligations.

Future public health crises and epidemics could impact our international operations and sales

14 unchanged sentences

For example, we have elected to share publicly our commitments and ongoing efforts in our Sustainability Report, where we address the importance of ESG matters to our stakeholders and our Company.

Our business may face increased scrutiny related to these activities, including from the investment community, and our failure to achieve progress in these areas on a timely basis, or at all, could adversely affect our reputation, business, financial performance, and growth.

Climate change may have an impact on our business

1 unchanged sentence

Any of our primary locations may be vulnerable to the adverse effects of climate change.

The recent wildfires in Colorado occurred in close proximity to our offices in Westminster, Colorado.

Our California headquarters has historically experienced, and is projected to continue to experience, climate-related events at an increasing frequency including drought, water scarcity, heat waves, wildfires and resultant air quality impacts and power shutoffs associated with wildfire prevention.

Furthermore, it is more difficult to mitigate the impact of these events on our employees while they work from home as a result of the COVID-19 pandemic.

The 2021 wildfires in Colorado occurred in close proximity to our headquarters in Westminster, Colorado.

Our California office has historically experienced, and is projected to continue to experience, climate-related events at an increasing frequency including drought, heat waves, wildfires including resultant air quality impacts, flooding, and power shutoffs associated with wildfire prevention and flooding.

Furthermore, it is more difficult to mitigate the impact of these events on our employees while they work from home.

Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S.

and elsewhere have the potential to disrupt our business, the business of our third-party suppliers, and the business of our customers, and may cause us to experience higher attrition, losses, and additional costs to maintain or resume operations.

and elsewhere have the

potential to disrupt our business, the business of our third-party suppliers, and the business of our customers, and may cause us to experience higher attrition, losses, and additional costs to maintain or resume operations.

Environmental, social, and governance matters and related reporting obligations may cause us to incur additional expenses or adversely impact our business or reputation

and international regulators, investors, and other stakeholders are increasingly focused on ESG matters.

New domestic and international laws and regulations relating to ESG matters, including human capital, diversity, sustainability, climate change, and cybersecurity are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.

We communicate certain ESG-related initiatives, goals, and/or and other matters in our annual Sustainability Report, on our website, in our filings with the SEC, and elsewhere.

For example, in 2022, we established science-based targets for Scope 1, 2, and 3 greenhouse gas emissions, certain commitments on sourcing renewable energy, and certain commitments to partner with suppliers that have announced their own science-based targets.

Implementation of our goals and targets may require capital improvements.

Our ability to achieve any stated commitment, goal, target, or objective is subject to many factors and conditions, some of which are outside of our control, including the pace of changes in technology and the cooperation and/or availability of suppliers that can meet our sustainability standards.

If we fail to achieve, are perceived to have failed or been delayed in achieving, or improperly report our progress toward achieving our publicly stated goals and commitments or compliance with U.S.

and international ESG laws and regulations, our business reputation and our financial condition, and results of operations may be negatively impacted.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors