What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-17 compared with 2022-02-23 · 159 added, 135 removed, 765 unchanged (28% of the section changed)

42 unchanged sentences

Accumulated other comprehensive loss ( 234.9 ) ( 161.7 )

Total Trimble Inc.

stockholders’ equity 3,944.7 3,596.9

Noncontrolling interests — 1.7

Total stockholders' equity 4,050.2 3,944.7

23 unchanged sentences

Operating income 510.9 561.0 419.8

Non-operating expense, net:

Non-operating income (expense), net:

Divestitures gain, net 99.0 41.4 13.1

Interest expense, net ( 71.1 ) ( 65.4 ) ( 77.6 )

Income from equity method investments, net 31.1 37.7 39.4

Other income, net 41.3 13.4 15.5

Other income (expense), net ( 0.8 ) ( 0.1 ) 0.3

Total non-operating income (expense), net 58.2 13.6 ( 24.8 )

Income before taxes 569.1 574.6 395.0

Income tax provision (benefit) 81.8 4.4 ( 169.7 )

Income tax provision 119.4 81.8 4.4

Net income 449.7 492.8 390.6

Net gain attributable to noncontrolling interests 0.1 0.7 0.2

Net income attributable to noncontrolling interests — 0.1 0.7

Net income attributable to Trimble Inc.

11 unchanged sentences

Net income $ 449.7 $ 492.8 $ 390.6

Foreign currency translation adjustments, net of tax $ 1.0 in 2021, $ 0.5 in 2020, and $ 0.1 in 2019

( 64.0 ) 77.1 10.3

Net unrealized gain (loss), net of tax 0.8 1.2 ( 1.0 )

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments ( 81.6 ) ( 64.0 ) 77.1

Net change related to derivatives and other 8.4 0.8 1.2

Comprehensive income 376.5 429.6 468.9

8 unchanged sentences

Stockholders’

Equity Noncontrolling

Equity Noncontrolling Interest Total

Shares Amount Additional Paid-In Capital

23 unchanged sentences

Stock-based compensation — — 137.3 — — 137.3 — 137.3

Noncontrolling interest investments — — 0.6 — — 0.6 ( 1.8 ) ( 1.2 )

Balance at the end of 2022 246.9 $ 0.2 $ 2,054.9 $ 2,230.0 $ ( 234.9 ) $ 4,050.2 $ — $ 4,050.2

10 unchanged sentences

Stock-based compensation 120.4 122.6 83.0

Divestitures (gain) loss, net ( 43.9 ) ( 12.2 ) ( 12.4 )

Divestitures gain, net ( 99.0 ) ( 43.9 ) ( 12.2 )

Other, net 41.7 19.2 42.4

12 unchanged sentences

Purchases of property and equipment ( 43.2 ) ( 46.1 ) ( 56.8 )

Net proceeds from sale of businesses 67.3 27.5 0.5

Net proceeds from sale of property and equipment 20.8 0.4 0.4

Net proceeds from divestitures 215.4 67.3 27.5

Other, net ( 25.0 ) 11.4 ( 0.6 )

2 unchanged sentences

Issuance of common stock, net of tax withholdings ( 13.6 ) ( 15.1 ) 10.0

Repurchase of common stock ( 180.0 ) ( 81.6 ) ( 179.8 )

Repurchases of common stock ( 394.7 ) ( 180.0 ) ( 81.6 )

Proceeds from debt and revolving credit lines 814.8 198.9 1,173.8

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 20.6 ) ( 11.3 ) 8.6

Net increase in cash and cash equivalents 88.0 48.5 16.7

Net (decrease) increase in cash and cash equivalents ( 54.7 ) 88.0 48.5

Cash and cash equivalents - beginning of year 325.7 237.7 189.2

15 unchanged sentences

We use a 52–53 week fiscal year ending on the Friday nearest to December 31.

Fiscal 2021 and 2020 were both 52-week years ending on December 31, 2021 and January 1, 2021, respectively.

Fiscal 2019 was a 53-week year ended on January 3, 2020.

Fiscal 2022, 2021, and 2020 were all 52-week years ending on December 30, 2022, December 31, 2021, and January 1, 2021.

Unless otherwise stated, all dates refer to our fiscal year and fiscal periods.

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however, determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment.

Judgment is required to determine SSP for each distinct performance obligation.

Judgment is required to determine SSP for each performance obligation.

We use a range of amounts to estimate SSP when products and services are sold separately and determine whether there is a discount to be allocated based on the relative SSP of the various products and services.

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Revenue for distinct professional services is recognized over time, based on work performed.

In some contracts, products and professional services may be combined into a single performance obligation.

This generally arises when products or subscriptions are sold with significant customization, modification, or integration services.

Revenue for the combined performance is recognized over time as the work progresses because of the continuous transfer of control to the customer.

Subscription revenue includes Software as a Service (“SaaS”), data, and hosting services.

12 unchanged sentences

Each reporting period, we evaluate the collectability of our trade accounts receivable based on a number of factors such as age of the accounts receivable balances, credit quality, historical experience, and current and future economic conditions that may affect a customer’s ability to pay.

At the end of 2021 and 2020, our allowance for credit losses was $ 7.0 million.

At the end of 2022 and 2021, our allowance for credit losses was $ 5.9 million and $ 7.0 million.

The provision for credit losses for the years ended 2022, 2021, and 2020 were $ 7.7 million, $ 2.6 million, and $ 7.1 million.

5 unchanged sentences

These costs are included in Other non-current assets in the Consolidated Balance Sheets.

There was no impairment loss in relation to the costs capitalized for the periods presented.

Amortization expense related to deferred costs to obtain customer contracts was $ 32.0 million, $ 25.9 million, and $ 22.8 million, for 2022, 2021, and 2020.

2 unchanged sentences

Adjustments are also made to reduce the cost of inventory for estimated excess or obsolete balances.

Factors influencing these adjustments include declines in demand that impact inventory purchasing forecasts, technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues.

Factors influencing these adjustments include declines in demand that impact inventory purchasing forecasts, technological changes, product lifecycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues.

If our estimate used to reserve for excess and obsolete inventory differs from what is expected, we may be required to recognize additional reserves, which would negatively impact our gross margin.

12 unchanged sentences

Business Combinations

We account for business combinations using the acquisition method of accounting whereby certain identifiable assets and liabilities of the acquired business and any noncontrolling interest in the acquiree are recorded at their estimated fair values as of the acquisition date.

Any purchase consideration in excess of the estimated fair values of the net assets acquired is recorded as goodwill.

Acquisition-related expenses and related restructuring costs are expensed as incurred.

When determining the fair values of certain assets acquired, liabilities assumed, and noncontrolling interests in the acquiree, we make significant estimates and assumptions, especially concerning intangible assets.

We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and any noncontrolling interest based on their fair values at the acquisition date.

When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets.

Critical estimates when valuing intangible assets include expected future cash flows based on consideration of future growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates.

Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.

Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

Acquisition costs are expensed as incurred.

We evaluate goodwill on an annual basis or more frequently if indicators of potential impairment exist.

We utilize either a qualitative or quantitative approach to assess the likelihood of impairment as of the first day of the fourth quarter.

When performing the qualitative approach, we consider macroeconomic conditions, industry and market considerations, overall financial performance, and other relevant events and factors that may impact the reporting units.

When performing the quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit's fair value.

To determine whether goodwill is impaired, we first assess qualitative factors.

Qualitative factors include but are not limited to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, or other relevant company-specific events.

If it is determined more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount, we perform a quantitative analysis.

Alternatively, we may bypass the qualitative assessment and perform a quantitative impairment test.

When performing a quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit's fair value.

The estimation of a reporting unit's fair value involves using estimates and assumptions, including expected future operating performance using risk-adjusted discount rates.

Actual future results may differ from those estimates.

If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized.

If the reporting unit's carrying amount exceeds its fair value, an impairment loss is recognized.

Intangible Assets

Intangible assets acquired individually, with a group of other assets, or in a business combination are recorded at fair value.

Intangible assets acquired in a business combination are recorded at fair value.

Our intangible assets are amortized over the period of estimated benefit using the straight-line method over their estimated useful lives, which range from three years to ten years and have a weighted-average useful life of approximately seven years .

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The estimate of the forfeiture rate is based on historical experience.

Advertising and Promotional Costs

Advertising and promotional costs are expensed as incurred.

Advertising and promotional expense was approximately $ 31.6 million, $ 28.6 million, and $ 42.7 million, in 2021, 2020, and 2019.

Research and Development Costs

1 unchanged sentence

Development costs for software to be sold subsequent to reaching technical feasibility were not significant and were expensed as incurred.

We received third party funding of approximately $ 12.6 million, $ 16.3 million, and $ 16.5 million in 2021, 2020, and 2019.

We offset research and development expense with any unconditional third party funding earned and retain the rights to any technology developed under such arrangements.

29 unchanged sentences

T hese contracts reduce the exposure to fluctuations in foreign currency exchange rate movements, as the gains and losses associated with foreign currency balances are generally offset with the gains and losses on the forward contracts.

These instruments are marked-to-market through earnings every reporting period and generally range from one to two months in original maturity.

We occasionally enter into foreign currency forward co ntracts to hedge the purchase price of some of our larger business acquisitions.

We occasionally enter into foreign currency contracts to minimize the impact of foreign currency fluctuations on the purchase price of pending acquisitions, including the fourth quarter of 2022 foreign currency contract for the € 1.88 billion or $ 2.0 billion pending acquisition of Transporeon.

The above-mentioned foreign currency contracts are marked-to-market through earnings every reporting period and generally range in maturity from one to two months , or from four to six months for contracts related to acquisitions.

We do not enter into foreign currency forward contracts for trading purposes.

As of the years ended 2021 and 2020, there were no derivative financial instruments outstanding that were accounted for as hedges.

Recent Accounting Pronouncements

Income Taxes—Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued amendments to the accounting for Income Taxes to reduce complexity by removing certain exceptions and implementing targeted simplifications.

We adopted the new standard on a prospective basis at the beginning of 2021.

The adoption did not have a material impact on our Consolidated Financial Statements.

Business Combinations—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the FASB issued amendments to improve, simplify, and provide consistency for recognition and measurement of acquired contract assets and contract liabilities from revenue contracts in a business combination.

The amendments require that an acquirer recognize and measure contract assets and contract liabilities under Topic 606, Revenue from Contracts with Customers , as if it had originated the contracts.

The amendments also allow for election of certain practical expedients, which are applied on an acquisition-by-acquisition basis.

The new accounting amendments are effective for the Company beginning in 2023 with prospective application.

Early adoption is permitted, including in any interim period, and if elected, the amendments are applied retrospectively for any acquisitions that occurred in the year of interim adoption.

We early adopted the guidance in the fourth quarter of 2021 retrospectively to all business combinations completed since the beginning of 2021.

The adoption did not have a material impact on our Consolidated Financial Statements.

In the fourth quarter of 2022, in conjunction with the pending acquisition of Transporeon, we entered into a contract to offset the changes in the price of U.S.

Treasury Notes with an original maturity of 10 years (“Treasury Rate Lock”).

The purpose of the Treasury Rate Lock is to minimize the impact of interest rate fluctuations on new fixed-rate debt expected to be issued in connection with this acquisition.

This derivative contract is accounted for as a cash flow hedge and is marked-to-market each period with gains or losses recorded through other comprehensive income.

Upon issuance of the debt, the derivative is settled, and the other comprehensive income is amortized as interest expense over the 10-year debt term by use of the effective interest rate method.

At the end of 2021, there were no derivatives outstanding that were accounted for as hedges.

Recently issued Accounting Pronouncements not yet Adopted

There are no recently issued accounting pronouncements applicable or material to us not yet adopted.

Recent Adopted Accounting Pronouncements

There are no recently adopted accounting pronouncements.

EARNINGS PER SHARE

12 unchanged sentences

Diluted earnings per share $ 1.80 $ 1.94 $ 1.55

Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented.

BUSINESS COMBINATION, INTANGIBLE ASSETS, AND GOODWILL

On December 13, 2021, we acquired AgileAssets , with total purchase consideration of $ 237.5 million .

Antidilutive weighted-average shares (1)

(1) Antidilutive stock-based awards are excluded from the calculation of diluted shares and diluted earnings per share because their impact would increase diluted earnings per share.

ACQUISITIONS AND DIVESTITURES

In December 2022, we entered into a definitive agreement to acquire Transporeon in an all-cash transaction valued at approximately € 1.88 billion or $ 2.0 billion.

Transporeon, a Germany-based company, is a leading cloud-based transportation management software platform that connects key stakeholders across the industry lifecycle to positively impact the optimization of global supply chains, in alignment with our Connect and Scale strategy.

We believe the acquisition will advance our sustainability strategy by reducing under-utilized carrier capacity and “empty miles” and increase our international footprint and long-term Transportation opportunities.

The acquisition will be funded through a combination of cash on hand and new debt.

We expect this acquisition to close in the first half of 2023, subject to customary closing conditions including regulatory approvals in certain international countries.

Following the closing, we intend to integrate Transporeon into our Transportation segment for financial reporting purposes.

In 2022, we acquired two businesses, with total purchase consideration of $ 379.5 million.

The largest acquisition was Bid2Win Software, LLC, a leading provider of estimating and operations solutions for the heavy civil construction industry.

In the aggregate, the businesses acquired contributed less than 1 % of our total revenue during 2022.

The Condensed Consolidated Statements of Income include the operating results of the acquired businesses from the date of acquisitions.

During 2021, we acquired AgileAssets , with total purchase consideration of $ 237.5 million .

AgileAssets is a provider of SaaS solutions for transportation asset lifecycle management.

The financial results have been included in our consolidated financial statements since the date of the acquisition.

The acquisition contributed less than 1 % of our total revenue during 2021.

1 unchanged sentence

The acquisitions were not significant individually or in the aggregate.

The largest acquisition was Kuebix, a transportation management system provider.

In the aggregate, the businesses acquired contributed less than 1 % of our total revenue during 2020.

During 2019, we acquired four businesses, with total purchase consideration of $ 247.0 million.

The acquisitions were not significant individually or in the aggregate.

The largest acquisition was Cityworks, a company that provides enterprise asset management (EAM) software for utilities and local government.

In the aggregate, the businesses acquired contributed less than 1 % of our total revenue during 2019.

For the AgileAssets acquisition in 2021, the preliminary allocation of purchase price was based upon preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which could change within the measurement period as valuations are finalized.

The primary areas that remain preliminary relate to the fair values of intangible assets acquired and certain tangible assets and liabilities acquired.

We expect to finalize the valuation as soon as practicable, but no later than one year from the acquisition date.

Acquisition costs of $ 20.4 million , $ 13.6 million, and $ 20.3 million in 2022, 2021, and 2020, were expensed as incurred and are included in Cost of sales and General and administrative expenses in our Consolidated Statements of Income.

8 unchanged sentences

Goodwill $ 258.1 $ 175.5 $ 149.3

In 2022, we divested six businesses with total proceeds of $ 226.3 million.

The largest divestiture was the sale of Time and Frequency, LOADRITE, Spectra Precision Tools, and SECO accessories businesses to Precisional LLC, an affiliate of The Jordan Company (“TJC”), for $ 205.1 million in cash, which included a working capital adjustment.

In 2021 and 2020, divestitures were not material to the financial statements.

INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

14 unchanged sentences

The estimated future amortization expense of intangible assets at the end of 2022 was as follows:

(In millions)

Thereafter 61.4

1 unchanged sentence

The changes in the carrying amount of goodwill by segment were as follows:

(In millions) Buildings and Infrastructure Geospatial Resources and Utilities Transportation Total

Buildings and Infrastructure Geospatial Resources and Utilities Transportation Total

(In millions)

Balance as of year end 2021 $ 2,141.4 $ 403.6 $ 440.8 $ 995.7 $ 3,981.5

Additions due to acquisition 214.4 — 43.7 — 258.1

Decrease from the sale of businesses ( 14.7 ) — ( 3.3 ) — ( 18.0 )

Decrease from divestitures ( 23.9 ) ( 6.9 ) — ( 6.9 ) ( 37.7 )

Foreign currency translation and other adjustments ( 31.8 ) ( 14.6 ) ( 12.7 ) ( 4.9 ) ( 64.0 )

23 unchanged sentences

Accumulated foreign currency translation adjustments $ ( 241.6 ) $ ( 160.0 )

Net unrealized actuarial losses ( 1.7 ) ( 2.5 )

Gain on cash flow hedge 5.4 —

Net unrealized actuarial gains (losses) 1.3 ( 1.7 )

Total accumulated other comprehensive loss $ ( 234.9 ) $ ( 161.7 )

3 unchanged sentences

Our CODM regularly reviews our segment operating results to make decisions about resources to be allocated to each segment and assess performance.

In each of our segments, we sell many individual products.

In each of our

segments, we sell many individual products.

For this reason, it is impracticable to segregate and identify revenue for each of the individual products or group of products we sell.

14 unchanged sentences

(In millions)

Revenue $ 1,422.5 $ 828.9 $ 771.3 $ 636.4 $ 3,659.1

Purchase accounting adjustments (1)

0.2 — — 0.1 0.3

Segment revenue $ 1,494.0 $ 756.5 $ 821.6 $ 604.2 $ 3,676.3

Operating income $ 415.6 $ 244.1 $ 264.0 $ 43.6 $ 967.3

Purchase accounting adjustments (2)

( 3.9 ) — — ( 0.2 ) ( 4.1 )

Segment operating income 406.3 221.4 278.3 58.8 964.8

Depreciation expense $ 7.0 $ 7.0 $ 5.9 $ 4.1 $ 24.0

Revenue $ 1,230.7 $ 650.5 $ 627.3 $ 639.2 $ 3,147.7

Purchase accounting adjustments (1)

0.3 — 2.7 1.3 4.3

Segment revenue $ 1,422.7 $ 828.9 $ 771.3 $ 636.5 $ 3,659.4

Operating income $ 343.0 $ 184.4 $ 218.4 $ 49.0 $ 794.8

Purchase accounting adjustments (2)

( 4.9 ) — 2.6 1.1 ( 1.2 )

Segment operating income 411.7 244.1 264.0 43.4 963.2

Depreciation expense $ 8.1 $ 6.2 $ 5.6 $ 4.1 $ 24.0

Revenue $ 1,254.2 $ 649.4 $ 568.4 $ 792.3 $ 3,264.3

Purchase accounting adjustments (1)

4.0 — 3.0 — 7.0

Segment revenue $ 1,231.0 $ 650.5 $ 630.0 $ 640.5 $ 3,152.0

Operating income $ 322.1 $ 132.2 $ 166.2 $ 125.9 $ 746.4

Purchase accounting adjustments (2)

( 2.2 ) — 2.9 — 0.7

Segment operating income 338.1 184.4 221.0 50.1 793.6

Depreciation expense $ 8.1 $ 6.3 $ 4.4 $ 4.4 $ 23.2

(1) Includes acquired deferred revenue adjustments of certain acquired deferred revenue that was written down to fair value in purchase accounting.

(2) Includes acquired deferred revenue adjustments and amortization of acquired capitalized commissions.

Reporting Segments

19 unchanged sentences

Purchase accounting adjustments ( 131.6 ) ( 134.5 ) ( 156.6 )

( 134.5 ) ( 156.6 ) ( 168.5 )

Acquisition / divestiture items ( 32.8 ) ( 21.8 ) ( 21.4 )

4 unchanged sentences

Consolidated income before taxes $ 569.1 $ 574.6 $ 395.0

(1) Purchase accounting adjustments include acquired deferred revenue adjustments, amortization of acquired capitalized commissions, and amortization of purchased intangible assets.

The disaggregation of revenue by geography is summarized in the tables below.

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June 2018 4.36 % $ 300.0 $ 300.0

2028 Senior Notes, 4.90 %, due June 2028

June 2018 5.04 % 600.0 600.0

Senior Notes, 4.75 %, due December 2024

November 2014 4.95 % 400.0 400.0

Senior Notes, 4.90 %, due June 2028

June 2018 5.04 % 600.0 600.0

Credit Facilities:

Uncommitted facilities, floating rate — 255.8

Promissory notes and other debt — 0.1

2022 Revolving Credit Facility, due March 2027 September 2022 5.54 % 225.0 —

Unamortized discount and issuance costs ( 5.0 ) ( 6.8 )

2 unchanged sentences

Long-term debt $ 1,220.0 $ 1,293.2

Each of our debt agreements requires us to maintain compliance with certain debt covenants, all of which we complied with at the end of 2021.

Debt Maturities

7 unchanged sentences

Such indenture also contains covenants limiting our ability to create certain liens, enter into sale and lease-back transactions, and consolidate or merge with or into, or convey, transfer, or lease all or substantially all of our properties and assets, each subject to certain exceptions.

2018 Credit Facility

At the end of 2021, we had access to a $ 1.25 billion unsecured revolving credit facility maturing in May 2023, which may be used for working capital and general corporate purposes, including permitted acquisitions.

As part of the credit facility, we may request an additional term loan facility up to $ 500.0 million prior to the maturity of the credit facility and subject to approval.

Credit Facilities

Bridge Facility

On December 11, 2022, we entered into a bridge facility commitment letter (the “Bridge Facility”) in connection with the pending acquisition of Transporeon.

Under the Bridge Facility, the lender committed to provide a 364 -day senior unsecured term loan up to an aggregate amount of € 1.88 billion that may be drawn only upon the acquisition of Transporeon.

December 27, 2022, the Bridge Facility was automatically reduced to € 500 million upon entering into the 2022 Term Loan Agreement and the 2022 Credit Facility Amendment (as described below).

If not terminated sooner, the commitment under the Bridge Facility expires on July 10, 2023.

Borrowings under the Bridge Facility will bear interest at the following rates, in each case, plus an applicable margin:

(a) for Euro loans, EURIBOR and (b) for U.S dollar loans, the option of either (i) an adjusted Term SOFR or (ii) the alternate base rate (“ABR”).

The applicable margin varies based on the Company’s credit ratings and ranges from 1.250 % to 2.125 % for EURIBOR and Term SOFR loans, and from 0.250 % to 1.125 % for ABR loans.

The applicable margin will increase by 0.25 % on each of the 90th, 180th, and 270th day after the closing date of the Bridge Facility.

ABR is defined as the greater of the prime rate or the federal funds rate plus 0.50 %.

Term loans are prepayable without penalty.

In the fourth quarter of 2022, we incurred $ 7.3 million fees related to the Bridge Facility of which $ 5.9 million was recorded as Interest expense, net, and $ 1.4 million was deferred.

2022 Term Loan Credit Agreement

On December 27, 2022, we entered into a credit agreement (the “2022 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 for $ 500.0 million and a 5-year tranche for $ 500.0 million.

The 2022 Term Loan Credit Agreement was entered into in connection with, and the proceeds of any loans must be used for, the pending acquisition of Transporeon.

No amounts were drawn at the end of 2022.

The 3-year loan would be due and payable on the third anniversary of the funding date.

The Company would be required to repay the 5-year loan in quarterly installments equal to:

• 0 % of the principal amount for the first twelve calendar quarters following the funding date;

• 1.25 % of the principal amount for each of the next four calendar quarters;

• 2.5 % of the principal amount for each calendar quarter thereafter, with the remaining principal amount due and payable on the fifth anniversary of the funding date.

Borrowings under the 2022 Term Loan Credit Agreement will bear interest, at the Company’s option, at either:

(a) an adjusted Term SOFR or (b) the ABR, in each case, plus the applicable margin.

The applicable margin varies based on the Company’s credit ratings and ranges as follows:

(a) for the 3-year tranche, (i) from 1.125 % to 2.000 % for a Term SOFR loan, and (ii) from 0.125 % to 1.000 % for an ABR loan;

and (b) for the 5-year tranche, (i) from 1.250 % to 2.125 % for a Term SOFR loan, and (ii) from 0.250 % to 1.125 % for an ABR loan.

ABR is defined as the greatest of the prime rate, the federal funds rate plus 0.50 %, or the adjusted Term SOFR plus 1.00 %.

Term loans are prepayable without penalty.

2022 Credit Facility and Amendment

On March 24, 2022, we entered into a credit agreement that provides for an unsecured revolving loan facility in the aggregate principal amount of $ 1.25 billion (the “2022 Credit Facility”).

The proceeds of the revolving loans may be used by the Company for working capital and general corporate purposes, including the financing of acquisitions.

Under the terms of the credit agreement, our interest rate and commitment fees are based on our current long-term, senior unsecured debt ratings, our leverage ratio, and certain specified sustainability targets.

At the end of 2022, the interest rate charged on any outstanding borrowings was the prevailing Term SOFR for the applicable interest period plus 1.225 %, and the commitment fee was 0.125 % of the total undrawn commitment.

At the end of 2022, $ 225.0 million was outstanding under the 2022 Credit Facility.

The commitment fee and interest rates are subject to upward or downward adjustments if we achieve, or fail to achieve, certain specified sustainability targets concerning greenhouse gas emission reductions and gender diversity.

Such upward or downward adjustments may be up to 0.01 % per annum for the commitment fee and up to 0.05 % per annum for the interest rate.

On December 27, 2022, we entered into an amendment to the 2022 Credit Facility (the “2022 Credit Facility Amendment”) that made $ 600.0 million of the existing commitments under the Credit Facility available for the pending acquisition of Transporeon and increased our maximum permitted leverage ratio following the closing of the acquisition.

Uncommitted Facilities

At the end of 2021, we had one £ 55.0 million, two $ 75.0 million, and one € 100.0 million revolving credit facilities, which are uncommitted (the “Uncommitted Facilities”).

At the end of 2022, we had two $ 75.0 million, one € 100.0 million, and one £ 55.0 million revolving credit facilities, which are uncommitted (the “Uncommitted Facilities”).

Generally, these uncommitted facilities may be redeemed upon demand.

Borrowings under uncommitted facilities are classified as short-term debt in our Consolidated Balance Sheet.

The 2022 Term Loan Credit Agreement and 2022 Credit Facility, as amended, contain customary covenants including, among other requirements, limitations that restrict the Company’s and its subsidiaries’ ability to create liens and enter into sale and

leaseback transactions, and restrictions on the ability of the subsidiaries to incur indebtedness.

Further, both debt agreements contain financial covenants that require the maintenance of maximum leverage and minimum interest coverage ratios.

At the end of 2022, we were in compliance with the covenants for each of our debt agreements.

We have operating leases primarily for certain of our major facilities, including corporate offices, research and development facilities, and manufacturing facilities.

26 unchanged sentences

At the end of 2022, the maturities of lease liabilities were as follows:

(In millions)

Thereafter 35.8

4 unchanged sentences

At the end of 2022, we had unconditional purchase obligations of approximately $ 858.8 million as compared to $ 710.8 million at the end of 2021.

The increase was primarily related to investments in our platform associated with our Connect and Scale strategy and non-cancellable inventory commitments that increased due to extension of lead times and the growth of our hardware business.

These unconditional purchase obligations primarily represent open non-cancellable purchase orders for material purchases with our vendors and investments in our platform associated with our Connect and Scale strategy.

From time to time, we are involved in litigation arising in the ordinary course of our business.

9 unchanged sentences

— 18.0 — 18.0 — 0.1 — 0.1

Contingent consideration (3)

— — 3.1 3.1 — — — —

Total assets measured at fair value $ 31.5 $ 18.0 $ 3.1 $ 52.6 $ 44.7 $ 0.1 $ — $ 44.8

8 unchanged sentences

The plan is invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets.

(2) Represents forward currency exchange contracts that are included in Other current assets and Other current liabilities on our Consolidated Balance Sheets.

(3) Represents arrangements to pay the former owners of certain companies that we acquired that are included in Other current liabilities on our Condensed Consolidated Balance Sheets.

The fair values are estimated using scenario-based methods or option pricing methods based upon estimated future revenues, gross margins, or other milestones.

The undiscounted maximum payment under the arrangements is $ 14.8 million at the end of 2021.

(2) Represents forward currency exchange contracts and a Treasury Rate Lock contract that are included in Other current assets and Other current liabilities on our Consolidated Balance Sheets.

(3) Represents arrangements to receive payments from buyers of our divested companies or pay former owners of acquired companies that are included in Other current and non-current assets or Other current liabilities on our Consolidated Balance Sheets.

The fair values are estimated using scenario-based methods based upon estimated future milestones.

Derivative assets include a Treasury Rate Lock contract and a foreign currency exchange contract, both related to the pending acquisition of Transporeon.

The Treasury Rate Lock contract is a cash flow hedge with gains or losses reported as a component of other comprehensive income and subsequently amortized to interest expense over the term of the associated debt.

At the end of 2022, the notional amount of the interest rate-lock contract was $ 400.0 million, and the fair value of the contract was $ 7.2 million.

The foreign currency exchange contract is to economically hedge the euro-denominated purchase price of Transporeon.

The gains or losses are recognized in other income (expense), net.

The notional amount of the foreign currency exchange contract was $ 1,999.4 million, and the fair value of this contract was $ 10.4 million.

Additional Fair Value Information

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Beginning balance of the period $ 631.8 $ 613.8

Revenue recognized ( 533.8 ) ( 476.9 )

Billing and other net activities 551.8 548.8

Revenue recognized from prior year-end ( 511.5 ) ( 533.8 )

Billings net of revenue recognized from current year 617.3 551.8

Ending balance of the period $ 737.6 $ 631.8

Remaining Performance Obligations

At the end of 2021, approximately $ 1.8 billion of revenue is expected to be recognized from remaining performance obligations for which goods or services have not been delivered, primarily subscription, post-contract services and hardware, and to a lesser extent, professional services.

At the end of 2022, approximately $ 1.6 billion of revenue is expected to be recognized from remaining performance obligations for which goods or services have not been delivered, primarily subscription, software, and software maintenance, and to a lesser extent, hardware and professional services contracts.

We expect to recognize $ 1.2 billion or 72 % of our remaining performance obligations as revenue during the next 12 months and the remainder thereafter.

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111.1 74.5 18.6

Income tax provision (benefit) $ 81.8 $ 4.4 $ ( 169.7 )

Income tax provision $ 119.4 $ 81.8 $ 4.4

Effective tax rate 21.0 % 14.2 % 1.1 %

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Effective tax rate 21.0 % 14.2 % 1.1 %

In December 2021, due to a change in the Netherlands tax law, the statutory tax rate was further increased from 25.0 % to 25.8 % effective January 1, 2022.

Our effective income tax rates for 2022 and 2021 were 21.0 % and 14.2 %.

The effective income tax rate in 2022 increased compared to 2021 primarily due to a one-time tax benefit recorded in 2021 related to the revaluation of the Netherlands deferred tax assets mentioned below and lower stock-based compensation deductions during 2022.

In December 2021, due to a change in the Netherlands tax law, the statutory tax rate was increased from 25.0% to 25.8% effective January 1, 2022.

As a result, we recorded a one-time tax benefit of $ 14.4 million in 2021 due to the revaluation of the Netherlands deferred tax assets.

Previously in December 2020, also as a result of a Netherlands tax law change that increased Netherlands statutory tax rate from 21.7 % to 25.0 %, effective January 1, 2021, we recorded a one-time tax benefit of $ 64.0 million in 2020 due to the revaluation of the Netherlands deferred tax assets.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Depreciation and amortization 400.0 474.9

Capitalized research and development 67.5 6.9

Operating lease liabilities

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We have determined that it is more likely than not that we will not realize a portion of the foreign NOLs and, accordingly, a valuation allowance has been established for such amount.

We have California research and development credit carryforwards of approximatel y $ 33.0 million , which have an indefinite carryforward period.

We believe that it is more likely than not that we will not r ealize a significant portion of the California research and development credit carryforwards and, accordingly, a valuation allowance has been established for such amount.

We have California research and development credit carryforwards of approximately $ 33.6 million, which have an indefinite carryforward period.

We believe that it is more likely than not that we will not realize a significant portion of the California research and development credit carryforwards and, accordingly, a valuation allowance has been established for such amount.

As a result of the Tax Act, we can repatriate foreign earnings back to the U.S.

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income tax consequences.

We reinvested a large portion of our undistributed foreign earnings in acquisitions and other investments and inte nd to bring back a portion of foreign cash that was subject to the transition tax and the global intangible low-taxed income tax.

We reinvested a large portion of our undistributed foreign earnings in acquisitions and other investments and intend to bring back a portion of foreign cash that was subject to the transition tax and the global intangible low-taxed income tax.

During 2022, we repatriated $ 350.3 million of our foreign earnings to the U.S.

The total amount of the unrecognized tax benefits at the end of 2021 was $ 64.2 million .

A reconciliation of gross unrecognized tax benefit was as follows:

The total amount of unrecognized tax benefits at the end of 2022 was $ 76.5 million .

A reconciliation of gross unrecognized tax benefits was as follows:

2022 2021 2020

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income tax matters have been concluded for years through 2008.

We are currently in various stages of multiple year examinations state, and foreign (multiple jurisdictions) taxing authorities.

We are currently in various stages of multiple year examinations from state and foreign (multiple jurisdictions) taxing authorities.

While we generally believe it is more likely than not that our tax positions will be sustained, it is reasonably possible that future obligations related to these matters could arise.

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At the end of 2022 and 2021, we accrued $ 8.4 million and $ 9.2 million for interest and penalties.

On August 16, 2022, the U.S.

federal government enacted the Inflation Reduction Act (“IRA”) of 2022.

The IRA includes a 15% corporate alternative minimum tax effective in 2024 for certain large corporations, a 1% excise tax on net share repurchases after December 31, 2022, and several tax incentives to promote clean energy.

We do not expect the provisions of the IRA to have a material impact on our financial results.

EMPLOYEE STOCK BENEFIT PLANS

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In May 2020, our stockholders approved an amendment to the 2002 Stock Plan to increase the number of shares of common stock available for issuance by 18.0 million shares.

As such, our Amended and Restated 2002 Stock Plan provides for the granting of incentive and non-statutory stock options and RSUs for up to 92.6 million shares.

As such, our Amended and Restated 2002 Stock Plan provides for the granting of incentive and non-statutory stock options and Restricted Stock Units (“RSUs”) for up to 92.6 million shares.

At the end of 2022, the remaining number of shares available for grant under the 2002 stock plan was 17.6 million .

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Restricted Stock Units

We grant RSUs containing only service conditions and RSUs containing a combination of service, performance, and/or market conditions (“PSUs”).

We grant RSUs containing only service conditions and RSUs containing a combination of service, performance, and market conditions (“PSUs”).

RSUs containing only service conditions typically vest ratably over a three - to four-year service period.

PSUs are granted to executive officers and other senior employees and vest after a two - to three-year service period.

The fair value at the grant date is determined by (1) the closing pr ice of our common stock for awards containing only service or both service and performance conditions, or (2) the Monte Carlo valuation model for awards containing both service and market conditions.

For PSUs, the number of shares received at vesting will range from 0 % to 200 % of the target grant amount based on either (1) market conditions, (2) performance conditions, or (3) both.

The fair value at the grant date is determined by (a) the closing pr ice of our common stock for awards containing only service or both service and performance conditions, or (b) the Monte Carlo valuation model for awards containing both service and market conditions.

For PSUs, the number of shares received at vesting will range from 0 % to 200 % of the target grant amount based on either market conditions or performance conditions.

Market conditions consider our relative total stockholder return (“TSR”) of our common stock as compared to the TSR of the constituents of the S&P 500 over the vesting period.

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Outstanding at the end of year 4.0 $ 67.32

(1) Includes 0.2 million PSUs granted, 0.4 million PSUs vested, and 1.1 million PSUs outstanding at the end of the year.

(1) Includes 0.3 million PSUs granted, 0.5 million PSUs vested, 0.3 million PSUs cancelled and forfeited, and 0.6 million PSUs outstanding at the end of the year.

(2) Excludes approximately 0.1 million PSUs related to achievement above target levels at the vesting date.

The weighted-average grant date fair value of all RSUs granted during 2022, 2021, and 2020 was $ 73.32 , $ 78.44 , and $ 42.50 per share.

The fair value of all RSUs vested during 2021, 2020, and 2019 was $ 81.4 million, $ 78.0 million, and $ 75.7 million per share.

The fair value of all RSUs vested during 2022, 2021, and 2020 was $ 108.3 million, $ 81.4 million, and $ 78.0 million.

Employee Stock Purchase Plan

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In August 2021, our Board of Directors approved a new share repurchase program (“2021 Stock Repurchase Program”) authorizing up to $ 750.0 million in repurchases of our common stock.

Under the 2021 Stock Repurchase Program, the share repurchase authorization does not have an expiration date and supersedes and replaces the $ 600.0 million share repurchase authorization approved by our Board of Directors in November 2017 (“2017 Stock Repurchase Program”), of which $ 50.7 million was remaining and has been cancelled.

Under the 2021 Stock Repurchase Program, the share repurchase authorization does not have an expiration date and supersedes and replaces the $ 600.0 million share repurchase

authorization approved by our Board of Directors in November 2017 (“2017 Stock Repurchase Program”), of which $ 50.7 million was remaining and has been cancelled.

Under the 2021 Stock Repurchase Program, we may repurchase shares from time to time, subject to business and market conditions and other investment opportunities, through open market transactions, privately-negotiated transactions, accelerated stock repurchase plans, or by other means.

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Common stock repurchases under the program were recorded based upon the trade date for accounting purposes.

Because of the additional outstanding indebtedness we have and expect to incur in connection with the pending Transporeon acquisition, we have temporarily discontinued our share repurchases.

See Note 3 “Acquisition and Divestitures” of this report for future information regarding our intended acquisition of Transporeon.

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Trimble Inc.

(the Company) as of December 31, 2021 and January 1, 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and January 1, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

(the Company) as of December 30, 2022 and December 31, 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 30, 2022 and December 31, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2022, in conformity with U.S.

generally accepted accounting principles.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 30, 2022, based on the COSO criteria.

As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the current year acquisition, which is included in the 2021 consolidated financial statements of the Company and constituted less than 1% of tangible assets and net assets as of December 31, 2021, and less than 1% of revenues and net income for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the current year acquisition.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and January 1, 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 22, 2022 expressed an unqualified opinion thereon.

As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the businesses acquired in 2022, which are included in the 2022 consolidated financial statements of the Company and constituted less than 1% of tangible assets and net assets as of December 30, 2022, and less than 1% of revenues and net income for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the businesses acquired in 2022.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 30, 2022 and December 31, 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 30, 2022, and the related notes and our report dated February 17, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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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 8. Financial Statements and Supplementary Data