What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-26 compared with 2023-02-17 · 341 added, 197 removed, 727 unchanged (43% of the section changed)

2 unchanged sentences

At the End of Year 2023 2022

(In millions, except par values)

(In millions, except par value)

Current assets:

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Inventories 235.7 402.5

Prepaid expenses 89.8 73.7

Other current assets 147.8 127.7

Assets held for sale 421.2 —

Total current assets 1,830.9 1,518.2

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Deferred revenue 663.1 639.1

Income taxes payable 39.7 23.7

Other current liabilities 201.3 164.4

Liabilities held for sale 48.3 —

Total current liabilities 1,829.3 1,462.1

2 unchanged sentences

Deferred income tax liabilities 287.8 157.8

Income taxes payable 40.9 54.5

Operating lease liabilities 121.9 105.1

15 unchanged sentences

See accompanying Notes to the Consolidated Financial Statements.

Index to Financial Statements

CONSOLIDATED STATEMENTS OF INCOME

2022 2021 2020

(In millions, except per share data)

(In millions, except per share amounts) 2023 2022 2021

Product $ 1,771.7 $ 1,986.1 $ 2,135.2

Service 641.3 649.4 644.8

Subscription 883.0 762.2 674.9

Subscription and services 2,027.0 1,690.2 1,523.9

Total revenue 3,798.7 3,676.3 3,659.1

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Product 875.0 1,040.8 1,086.4

Service 235.7 229.9 234.5

Subscription 203.9 216.7 211.0

Subscription and services 482.2 444.9 450.3

Amortization of purchased intangible assets 108.7 85.0 87.7

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General and administrative 487.5 422.2 369.1

Restructuring charges 30.2 10.3 25.8

Restructuring 45.6 30.2 10.3

Amortization of purchased intangible assets 103.6 46.6 50.9

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$ 311.3 $ 449.7 492.7

Earnings per share attributable to Trimble Inc.:

Earnings per share:

Basic $ 1.26 $ 1.81 $ 1.96

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See accompanying Notes to the Consolidated Financial Statements.

Index to Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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See accompanying Notes to the Consolidated Financial Statements.

Index to Financial Statements

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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Earnings Accumulated

Comprehensive Loss Total

Comprehensive

Stockholders’

Equity Noncontrolling Interest Total

Equity Noncontrolling

Interest Total

Shares Amount Additional Paid-In Capital

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Net income — — — 492.7 — 492.7 0.1 492.8

Other comprehensive income — — — — 78.3 78.3 — 78.3

Other comprehensive loss

— — — — ( 63.2 ) ( 63.2 ) — ( 63.2 )

Comprehensive income 429.5 429.6

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Net income 449.7 449.7 — 449.7

Other comprehensive income — — — — ( 63.2 ) ( 63.2 ) — ( 63.2 )

Other comprehensive loss — — — — ( 73.2 ) ( 73.2 ) — ( 73.2 )

Comprehensive income 376.5 376.5

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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

Net income — — — 311.3 — 311.3 — 311.3

Other comprehensive loss — — — — ( 73.2 ) ( 73.2 ) — ( 73.2 )

Other comprehensive income — — — — 82.8 82.8 — 82.8

Comprehensive income 394.1 394.1

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See accompanying Notes to the Consolidated Financial Statements.

Index to Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

2022 2021 2020

(In millions) 2023 2022 2021

Cash flows from operating activities

Cash flow from operating activities:

Net income $ 311.3 $ 449.7 $ 492.8

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Deferred revenue 26.0 108.6 27.4

Income taxes payable ( 4.0 ) ( 38.3 ) ( 2.9 )

Other current and non-current liabilities ( 2.4 ) ( 29.5 ) ( 20.0 )

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Net cash used in investing activities ( 2,068.1 ) ( 226.3 ) ( 203.5 )

Cash flows from financing activities:

Cash flow from financing activities:

Issuance of common stock, net of tax withholdings 6.7 ( 13.6 ) ( 15.1 )

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Other, net ( 29.4 ) ( 15.3 ) ( 1.6 )

Net cash used in financing activities ( 199.0 ) ( 447.7 ) ( 400.3 )

Net cash provided by (used in) financing activities 1,431.5 ( 199.0 ) ( 447.7 )

Effect of exchange rate changes on cash and cash equivalents 7.4 ( 20.6 ) ( 11.3 )

Net (decrease) increase in cash and cash equivalents ( 32.1 ) ( 54.7 ) 88.0

Cash and cash equivalents - beginning of year 325.7 237.7 189.2

Cash and cash equivalents - end of year $ 271.0 $ 325.7 $ 237.7

Cash and cash equivalents - beginning of period 271.0 325.7 237.7

Cash and cash equivalents - end of period (1)

$ 238.9 $ 271.0 $ 325.7

Supplemental cash flow disclosure:

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Cash paid for interest $ 133.7 $ 73.1 $ 61.8

(1) Includes $ 9.1 million of cash and cash equivalents classified as held for sale as of December 29, 2023.

See accompanying Notes to the Consolidated Financial Statements.

Index to Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Fiscal 2023, 2022, and 2021 were all 52-week years ending on December 29, 2023, December 30, 2022, and December 31, 2021.

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

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The preparation of financial statements in accordance with U.S.

generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Estimates and assumptions are used for revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price (“SSP”) of performance obligations, provision for credit losses, sales returns reserve, inventory valuation, warranty costs, investments, acquired intangibles, goodwill and intangible asset impairment analysis, other long-lived asset impairment analysis, stock-based compensation, and income taxes.

GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Estimates and assumptions are used for (i) revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price (“SSP”) of performance obligations;

(ii) inventory valuation;

(iii) valuation of long-lived assets and their estimated useful lives;

(iv) goodwill and other long-lived asset impairment analyses;

(v) stock-based compensation;

and (vi) income taxes.

We base our estimates on historical experience and various other assumptions we believe to be reasonable .

Actual results that we experience may differ materially from our estimates.

Change in Presentation

During the first quarter of 2023, we changed the presentation of revenue and cost of sales in the Consolidated Statements of Income.

This change was made to better reflect our Connect and Scale strategy and business model evolution with a continued shift toward a more significant mix of recurring revenues, which includes subscription, maintenance and support, and term licenses.

As such, we revised our presentation, including (i) the combination of subscription and services into one line item, and (ii) moving term licenses from product to subscription and services.

The subscription and services line item is more aligned with our performance measures, how we manage our business, and is helpful to investors and others to better understand our results.

Previously, we presented revenue and cost of sales on three lines as follows:

• product, which included hardware and software licenses (both perpetual and term licenses);

• service, which included hardware and software maintenance and support and professional services;

• subscription, which included SaaS, data, and hosting services.

The revised categories are as follows:

• product, which includes hardware and perpetual software licenses;

• subscription and services, which includes SaaS, data, and hosting services, as well as term licenses, hardware and software maintenance and support, and professional services.

Prior period amounts have been revised to conform to the current period presentation.

This change in presentation did not affect the total revenue or total cost of sales.

The effect of the change on the Consolidated Statements of Income for 2022 and 2021 was as follows:

Index to Financial Statements

(In millions)

As Previously Reported Effect of Change in Presentation As Reported Herein As Previously Reported Effect of Change in Presentation As Reported Herein

Product $ 2,152.0 $ ( 165.9 ) $ 1,986.1 $ 2,247.5 $ ( 112.3 ) $ 2,135.2

Subscription and services — 1,690.2 1,690.2 — 1,523.9 1,523.9

Service 641.3 ( 641.3 ) — 649.4 ( 649.4 ) —

Subscription 883.0 ( 883.0 ) — 762.2 ( 762.2 ) —

Total revenue $ 3,676.3 $ — $ 3,676.3 $ 3,659.1 $ — $ 3,659.1

Cost of sales:

Product $ 1,046.1 $ ( 5.3 ) $ 1,040.8 $ 1,090.1 $ ( 3.7 ) $ 1,086.4

Subscription and services — 444.9 444.9 — 450.3 450.3

Service 235.7 ( 235.7 ) — 229.9 ( 229.9 ) —

Subscription 203.9 ( 203.9 ) — 216.7 ( 216.7 ) —

Amortization of purchased intangible assets 85.0 — 85.0 87.7 — 87.7

Total cost of sales $ 1,570.7 $ — $ 1,570.7 $ 1,624.4 $ — $ 1,624.4

Reportable Segments

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Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation.

Our Chief Executive Officer and Chief Operating Decision Maker views and evaluates operations based on the results of our reportable operating segments under our management reporting system.

Our Chief Executive Officer, who is our CODM, views and evaluates operations based on the results of our reportable operating segments under our management reporting system.

These results are not necessarily in conformance with U.S.

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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.

In instances where SSP is not directly observable, we determine SSP using information that may include market conditions and other observable inputs.

In instances where SSP is not directly observable, we estimate SSP considering multiple factors including but not limited to, our internal cost, pricing practices, sales channel, competitive positioning, and overall market and business environments.

As our offerings and markets change, we may be required to reassess our estimated SSP and, as a result, the timing and classification of our revenue could be affected.

Nature of Goods and Services

We generate revenue primarily from products, services, and subscriptions;

We generate revenue primarily from products and services and subscriptions;

each of which is a distinct performance obligation.

Descriptions are as follows:

Product revenue includes hardware and software licenses.

Product revenue includes hardware and perpetual software licenses.

Hardwar e is recognized when the control of the product transfers to the customer, which is generally when the product is shipped.

We recognize shipping fees reimbursed by customers as revenue and the cost for shipping as an expense in Cost of sales when control over products has transferred to the customer.

Software including perpetual and term licenses is recognized upon delivery and commencement of license term.

Software including perpetual licenses is recognized upon delivery and commencement of the license term.

In general, our contracts do not provide for customer specific acceptances.

Service revenue includes hardware and software maintenance and support and professional services.

Index to Financial Statements

Subscription and Services

Subscription and services revenue includes SaaS and hosting services, term licenses, hardware and software maintenance, and support and professional services.

SaaS may be sold with devices used to collect, generate, and transmit data.

SaaS is distinct from the related devices.

SaaS is provided on either a subscription or a consumption basis.

In addition, we may host the software that the customer has separately licensed.

Hosting services are distinct from the underlying software.

Subscription terms generally range from month-to-month to one to three years .

Subscription revenue is recognized monthly over the subscription term, commencing from activation.

Revenue related to SaaS on a consumption basis is recognized when the customer utilizes the service based on the quantity of the services consumed.

Term license subscriptions contain an on-premise term license component as well as maintenance and support.

Term licenses are distinct and recognized upon transfer and commencement of the subscription license term.

Maintenance and support are recognized ratably over the subscription term.

The subscription term generally ranges from one to three years .

Hardware maintenance and support, commonly called extended warranty, entitles the customer to receive replacement parts and repair services.

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

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

SaaS may be sold with devices used to collect, generate, and transmit data.

SaaS is distinct from the related devices.

In addition, we may host the software that the customer has separately licensed.

Hosting services are distinct from the underlying software.

Subscription terms generally range from month-to-month to one to three years .

Subscription revenue is recognized monthly over the subscription term, commencing from activation.

Accounts Receivable, Net

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Both billed and unbilled amounts due are stated at their net estimated realizable value.

The unbilled receivables were $ 33.6 million and $ 39.5 million at the end of 2022 and 2021.

We maintain an allowance for credit losses to provide for the estimated amount of receivables that will not be collected.

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 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.

Deferred Costs to Obtain Customer Contracts

Sales commissions incurred in obtaining contracts that include maintenance or subscription revenue are deferred if the contractual term is greater than a year or if renewals are expected, and the renewal commission is not commensurate with the initial commission.

These commission costs are deferred and amortized over the estimated benefit period, which is either the contract term or the shorter of customer life or product life that ranges from three to seven years .

Contracts with an amortization period of a year or less from this deferral requirement are expensed as incurred.

At the end of 2022 and 2021, deferred costs to obtain customer contracts were $ 74.7 million and $ 59.7 million.

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

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.

This expense is included in Sales and marketing expense in our Consolidated Statements of Income.

At the end of 2023 and 2022, the allowances for credit losses were immaterial.

Inventories are stated at the lower of cost or net realizable value.

Cost is computed using standard cost, which approximates actual cost.

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

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We determine if an arrangement is a lease at inception.

Operating leases with lease terms greater than one year are included in Operating lease right-of-use (“ROU”) assets, in both Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets.

Operating leases with lease terms greater than one year are included in Operating lease right-of-use (“ROU”) assets, Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets.

Index to Financial Statements

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Present value is determined by using our incremental borrowing rate based on the estimated rate of interest for collateralized borrowings over a similar term of the lease payments at commencement date.

The operating lease ROU asset includes adjustments made for uneven rents, lease incentives, and lease impairments.

The operating lease ROU assets include adjustments made for uneven rents, lease incentives, and lease impairments.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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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.

Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue 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.

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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 .

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 to ten years and have a weighted-average useful life of approximately seven years .

We write off fully amortized intangible assets when those assets are no longer used.

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The estimated future cash flows are primarily based upon assumptions about expected future operating performance.

We accrue for warranty costs as part of our cost of sales based on associated material product costs, technical support labor costs, and costs incurred by third parties performing work on our behalf.

Our expected future cost is primarily estimated based upon historical trends in the volume of product returns within the warranty period and the cost to repair or replace the equipment.

When products sold include warranty provisions, they are covered by a warranty for periods ranging from one year to two years .

Accrued warranty expenses o f $ 11.7 million and $ 17.1 million are included in Other current liabilities in the Consolidated Balance Sheets at the end of 2022 and 2021.

Foreign Currency Translation

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

Index to Financial Statements

Income taxes are accounted for under the liability method, whereby deferred tax assets or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income.

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Derivative Financial Instruments

We enter into foreign exchange forward contracts to minimize the short-term impact of foreign currency fluctuations on cash and certain trade and intercompany receivables and payables, primarily denominated in New Zealand Dollars, Brazil Real, Canadian Dollars, Norwegian Krone, and Euro.

We enter into foreign exchange forward contracts to minimize the short-term impact of foreign currency fluctuations on cash and certain trade and intercompany receivables and payables, primarily denominated in Euro, Canadian Dollars, New Zealand Dollars, British Pound, and Brazilian Real .

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.

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 occasionally enter into foreign currency contracts to minimize the impact of foreign currency fluctuations on the purchase price of pending acquisitions.

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

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.

At the end of 2023 and 2022, there were no derivatives outstanding that were accounted for as hedges.

Index to Financial Statements

Recently issued Accounting Pronouncements not yet Adopted

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

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU updates reportable segment disclosure requirements primarily through (i) enhanced disclosures about significant segment expenses, (ii) the composition of other segment items, and (iii) optional disclosure of more than one measure of segment profit or loss if the CODM uses those measures to assess segment performance and allocate resources.

The ASU is effective for our Annual Report on Form 10-K beginning in 2024 and, afterward, interim reports.

Early adoption is permitted.

The ASU should be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The ASU updates the annual income tax disclosures by requiring (i) specific categories and greater disaggregation of information in the rate reconciliation, (ii) income taxes paid disaggregated by taxing authority and jurisdiction, and (iii) disclosures of pretax income (or loss) and income tax expense (or benefit).

Additionally, certain existing disclosure requirements are removed.

The ASU is effective for our Annual Report on Form 10-K beginning in 2025 and is applied prospectively.

Early adoption and retrospective application are permitted.

We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

Recent Adopted Accounting Pronouncements

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Diluted earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period plus additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued.

Potentially dilutive common shares include outstanding stock options, RSUs, contingently issuable shares, and shares to be purchased under our ESPP.

Potentially dilutive common shares include outstanding stock options, restricted stock units (“RSUs”), contingently issuable shares, and shares to be purchased under our employee stock purchase plan.

The following table shows the computation of basic and diluted earnings per share:

2023 2022 2021

(In millions, except per share data)

(In millions, except per share amounts)

Net income attributable to Trimble Inc.

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(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.

On April 3, 2023, we acquired all of the issued and outstanding shares of TP Group Holding GmbH and Sixfold GmbH, which owned Transporeon, in an all-cash transaction.

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

Transporeon is reported as part of our Transportation segment.

The total purchase consideration was € 1.9 billion or $ 2.1 billion, which included the repayment of outstanding Transporeon debt of $ 339.6 million.

The acquisition was funded through a combination of cash on hand and debt.

See Note 8 “Debt” of this report for more information.

In addition to Transporeon, we acquired two businesses in 2023 with total purchase consideration of $ 47.0 million.

Index to Financial Statements

aggregate, the two businesses acquired contributed less than 1 % of our total revenue during 2023.

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

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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 .

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

During 2020, we acquired three businesses, with total purchase consideration of $ 205.1 million.

The acquisitions were not significant individually or in the aggregate.

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

Acquisition costs of $ 35.0 million , $ 20.4 million , and $ 13.6 million in 2023, 2022, and 2021 , were expensed as incurred and are included in Cost of sales and General and administrative expenses in our Consolidated Statements of Income.

The following table summarizes the business combinations completed during the periods indicated:

2022 2021 2020

Purchase Price Allocation

The fair value of identifiable assets acquired and liabilities assumed was determined under the acquisition method of accounting for business combinations.

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill.

The fair value of intangible assets acquired is generally determined based on a discounted cash flow analysis.

The following table summarizes the consideration transferred to acquire Transporeon and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed, as well as the estimated useful lives of the identifiable intangible assets as of the date of the acquisition.

The allocation of the purchase price is still preliminary as we finalize deferred income taxes.

Preliminary estimates will be finalized within one year of the acquisition date.

Fair Value as of the Acquisition Date Estimated Useful Life

(In millions)

Fair value of total purchase consideration $ 379.5 $ 237.5 $ 205.1

Less fair value of net assets acquired:

Total purchase consideration $ 2,082.6

Net tangible assets acquired:

Identified intangible assets 131.4 67.2 56.7

Deferred taxes ( 0.8 ) — 0.7

Cash and cash equivalents 12.9

Accounts receivable, net 41.8

Other current assets 28.0

Non-current assets 24.7

Accounts payable ( 4.1 )

Accrued compensation and benefits ( 9.7 )

Deferred revenue ( 16.5 )

Other current liabilities ( 47.2 )

Non-current liabilities ( 20.6 )

Total net tangible assets acquired 9.3

Intangible assets acquired:

Customer relationships 759.5 11 years

Developed product technology 168.4 7 years

Trade name 11.9 5 years

Total intangible assets acquired 939.8

Deferred tax liability ( 256.6 )

Fair value of all assets/liabilities acquired 692.5

Goodwill $ 1,390.1

Goodwill consists of growth potential, synergies, and economies of scale expected from combining Transporeon’s operations with ours, together with the highly skilled and valuable assembled workforce.

We do not expect the goodwill to be deductible for income tax purposes.

The Company corrected an error which resulted in an adjustment of $ 34 million between goodwill and developed technology intangibles, net of tax.

Index to Financial Statements

Financial Information

The following table presents the amounts of revenue and net loss included in the Consolidated Statements of Income resulting from Transporeon since the acquisition date, which includes the effects of purchase accounting, primarily amortization of intangible assets and other adjustments.

(In millions)

Total revenue $ 124.7

Pro Forma Financial Information

The unaudited pro forma financial information presented in the following table was computed by combining the historical financial information of Trimble and Transporeon along with the effects from business combination accounting and the associated debt resulting from this acquisition as if the companies were combined on January 1, 2022.

This information is presented for informational purposes only, and it is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of that date.

This information should not be used as a predictive measure of our future financial position, results of operations, or liquidity.

(In millions)

Total revenue $ 3,839.2 $ 3,831.2

Net income 273.0 308.6

Pending Divestiture

On September 28, 2023, we executed a definitive agreement with AGCO that provides for the formation of a JV with AGCO in the mixed fleet precision agriculture market.

Under the terms of the agreement, we will contribute the Trimble Ag business, excluding certain GNSS and guidance technologies, and AGCO will contribute its JCA Technologies business to the JV.

We will sell an interest in the JV to AGCO for $ 2.0 billion in pre-tax cash proceeds, subject to working capital adjustments.

Immediately following the closing of this proposed transaction, we will own 15 % of the JV and AGCO will own 85 % of the JV.

Additionally, we plan to enter into the following agreements with AGCO as part of the overall transaction:

• a seven-year , renewable Supply Agreement through which we will provide key GNSS and guidance technologies to the JV for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions;

• a Technology Transfer and License Agreement to govern the licensing of certain non-divested intellectual property and technology for use by the JV in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by the JV;

• a Trademark License Agreement to govern the licensing of certain Trimble trademarks for use by the JV in the agriculture field;

• a Positioning Services Agreement through which the JV will serve as our channel partner for the positioning services in the agriculture market;

• a Transition Services Agreement to provide contract manufacturing services for the divested products for two years following the closing of the proposed transaction.

The proposed transaction is expected to close in the first half of 2024 and is subject to customary closing conditions, including regulatory approvals.

Trimble Ag is reported as a part of our Resources and Utilities segment.

Following the closing of this proposed transaction, our 15 % ownership interest in the JV is expected to be reported as an equity method investment.

The assets and liabilities of Trimble Ag that are subject to the proposed transaction were classified as held for sale at the end of 2023.

The following table presents the carrying values of the major classes of assets and liabilities classified as held for sale in our Consolidated Balance Sheets at the end of 2023:

Index to Financial Statements

At the End of Year

(In millions) 2023

Cash and cash equivalents $ 9.1

Accounts receivable, net 12.1

Inventories, net

Other current assets 3.4

Property and equipment, net 20.7

Other purchased intangible assets, net 20.3

Other non-current assets 3.3

Total Assets Held for Sale

Accounts payable $ 1.8

Deferred revenue, current

Other current liabilities 16.0

Deferred revenue, non-current 8.3

Other non-current liabilities 7.9

Total Liabilities Held for Sale

Other Divestitures

In addition to the pending Trimble Ag JV Transaction, we divested five businesses in 2023 with total proceeds of $ 18.7 million.

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.

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

INTANGIBLE ASSETS AND GOODWILL

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Trade names and trademarks 6 43.8 ( 38.6 ) 5.2 39.5 ( 32.7 ) 6.8

Distribution rights and other intellectual properties 4 8.0 ( 7.0 ) 1.0 10.0 ( 9.0 ) 1.0

Distribution rights and other intellectual property 7 4.2 ( 4.2 ) — 8.0 ( 7.0 ) 1.0

$ 2,314.9 $ ( 1,071.4 ) $ 1,243.5 $ 1,706.4 $ ( 1,208.3 ) $ 498.1

As of the end of 2023 and 2022, $ 267.8 million and $ 79.9 million of fully amortized intangible assets were written off.

Index to Financial Statements

The estimated future amortization expense of intangible assets at the end of 2023 was as follows:

2 unchanged sentences

Total $ 1,243.5

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

The changes in the carrying amount of goodwill by segment for 2023 were as follows:

Buildings and Infrastructure Geospatial Resources and Utilities Transportation Total

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Balance as of year end 2022 $ 2,300.1 $ 382.1 $ 471.8 $ 983.9 $ 4,137.9

Additions due to acquisition 214.4 — 43.7 — 258.1

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

Additions due to acquisitions 27.7 — — 1,390.1 1,417.8

Assets held for sale — ( 1.9 ) ( 266.2 ) — ( 268.1 )

Foreign currency translation and other adjustments 19.5 4.9 10.8 27.8 63.0

19 unchanged sentences

Total property and equipment, net $ 202.5 $ 219.0

Index to Financial Statements

The components of accumulated other comprehensive loss, net of related tax were as follows:

3 unchanged sentences

Gain on cash flow hedge 4.7 5.4

Net unrealized actuarial gains (losses) 1.3 ( 1.7 )

Net unrealized actuarial gains

Total accumulated other comprehensive loss $ ( 152.1 ) $ ( 234.9 )

REPORTING SEGMENT AND GEOGRAPHIC INFORMATION

We determined our operating segments based on how our Chief Operating Decision Maker (“CODM”) views and evaluates operations.

We determined our operating segments based on how our CODM views and evaluates operations.

Various factors, including market separation and customer-specific applications, go-to-market channels, and products and services, were considered in determining these operating segments.

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.

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

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.

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Segment operating income 411.7 244.1 264.0 43.4 963.2

Index to Financial Statements

Reporting Segments

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Consolidated income before taxes $ 357.0 $ 569.1 $ 574.6

Index to Financial Statements

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

Revenue is defined as revenue from external customers attributed to countries based on the location of the customer and excludes the effects of certain acquired deferred revenue that was written down to fair value in purchase accounting, consistent with the Reporting Segment tables above.

Revenue is defined as revenue from external customers attributed to countries based on the location of the customer and excludes the effects of certain acquired deferred

revenue that was written down to fair value in purchase accounting, consistent with the Reporting Segment tables above.

Reporting Segments

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Total segment revenue $ 1,422.7 $ 828.9 $ 771.3 $ 636.5 $ 3,659.4

Total revenue in the United States as included in the Consolidated Statements of Income was $ 1,777.4 million, $ 1,687.4 million, and $ 1,502.3 million in 2022, 2021, and 2020.

Total revenue in the United States as included in the Consolidated Statements of Income wa s $ 1,855.2 million, $ 1,777.4 million, and $ 1,687.4 million in 2023, 2022, and 2021.

No single customer or country other than the United States accounted for 10% or more of our total revenue in 2023, 2022, and 2021 .

8 unchanged sentences

Total property and equipment, net $ 202.5 $ 219.0

Index to Financial Statements

Debt consisted of the following:

At the End of Year Effective interest rate

(In millions, except percentages) Date of Issuance for 2022

(In millions, except percentages) Date of Issuance End of 2023

Senior Notes:

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June 2018 5.04 % 600.0 600.0

Senior Notes, 6.10 %, due March 2033

March 2023 6.13 % 800.0 —

Credit Facilities:

2022 Revolving Credit Facility, due March 2027 September 2022 6.71 % 150.0 225.0

Term Loan, due April 2026 April 2023 6.99 % 500.0 —

Term Loan, due April 2028 April 2023 7.12 % 500.0 —

Uncommitted Credit Facilities, floating rate 5.06 % 130.4 —

Unamortized discount and issuance costs ( 13.8 ) ( 5.0 )

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Debt Maturities

At the end of 2022, our debt maturities based on outstanding principal were as follows:

At the end of 2023, our debt maturities based on outstanding principal were as follows (in millions):

Thereafter 800.0

Total $ 3,080.4

All series of senior notes in the above table bear interest that is payable semi-annually in June and December of each year.

All of our senior notes are unsecured obligations.

Interest on the senior notes is payable semi-annually in June and December of each year, except for the interest on the 2033 Senior Notes payable in March and September (as next described).

For the 2028 and 2033 senior notes, the interest rate is subject to adjustment from time to time if Moody’s or S&P (or, if applicable, a substitute rating agency) downgrades (or subsequently upgrades) its rating assigned to the notes.

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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.

2033 Senior Notes

In March 2023, we issued an aggregate principal amount of $ 800.0 million in senior notes (the “2033 Senior Notes”) that will mature in March 2033 and bear interest at a fixed rate of 6.1 % per annum.

The interest is payable semi-annually in March and September of each year, commencing in September 2023.

The interest rate is subject to adjustment from time to time upon a rating agency downgrade or upgrade of the credit rating assigned to the 2033 Senior Notes.

The 2033 Senior Notes were sold at 99.843 % of the aggregate principal amount.

The 2033 Senior Notes are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness.

Index to Financial Statements

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.

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

Under the Bridge Facility, the lender committed to provide a term loan up to an aggregate amount of € 1.88 billion.

On 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 next described).

On March 9, 2023, as a result of completing the issuance of the 2033 Senior Notes, the remaining € 500 million was automatically terminated with no amounts having been drawn.

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.

On December 27, 2022, we entered into a $ 1.0 billion unsecured, delayed draw term loan credit agreement comprised of commitments for a 3-year tranche for $ 500.0 million and a 5-year tranche for $ 500.0 million.

On April 3, 2023, both variable-rate term loans were drawn to fund the acquisition of Transporeon.

Prepayments are allowed without penalty and cannot be reborrowed.

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.

In March 2022, we entered into a credit agreement (the “2022 Credit Facility”) maturing in March 2027.

The 2022 Credit Facility provides for a five-year , unsecured revolving credit facility in the aggregate principal amount of $ 1.25 billion, and permits us, subject to the satisfaction of certain conditions, to increase the commitments for revolving loans by an aggregate principal amount of up to $ 500.0 million.

The variable interest rate and commitment fees are based on our current long-term, senior unsecured debt ratings, our leverage ratio, and certain specified sustainability targets.

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 acquisition of Transporeon and increased our maximum permitted leverage ratio following the closing of the acquisition.

On April 3, 2023, we borrowed $ 225.0 million as part of the proceeds to finance the acquisition.

For additional information related to the Transporeon acquisition, see Note 3 “Acquisitio ns ” of this report.

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.

At the end of 2023, we had two $ 75.0 million and one € 100.0 million revolving credit facilities, which are uncommitted (the “uncommitted facilities”).

Generally, these variable-rate uncommitted facilities may be redeemed upon demand.

Borrowings under uncommitted facilities are classified as short-term debt in the 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.

4 unchanged sentences

Operating lease expense consisted of:

At the End of Year 2022 2021

2023 2022 2021

(In millions)

2 unchanged sentences

Total lease expense $ 50.6 $ 51.1 $ 53.3

Index to Financial Statements

Supplemental cash flow information related to leases was as follows:

At the End of Year 2022 2021

2023 2022 2021

(In millions)

20 unchanged sentences

Total $ 151.0

We signed operating leases for real estate of approximately $ 21.5 million that have not yet commenced at the end of 2023, and as such, have not been recognized on our Consolidated Balance Sheets.

These operating leases are expected to commence in 2024 with lease terms ranging from 1 to 11 years.

COMMITMENTS AND CONTINGENCIES

At the end of 2023, we had unconditional purchase obligations of approximately $ 618.9 million as compared to $ 858.8 million at the end of 2022.

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.

These unconditional purchase obligations primarily represent (i) open non-cancellable purchase orders for material purchases with our inventory vendors, and (ii) various non-cancelable agreements with certain service providers with minimum or fixed commitments.

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

There are no material legal proceedings, other than ordinary routine litigation incidental to the business, to which we or any of our subsidiaries is a party or of which any of our or our subsidiaries' property is subject.

There are no material legal proceedings, other than ordinary routine litigation incidental to the business, that we or any of our subsidiaries is a party, or that any of our or our subsidiaries’ property is subject.

Index to Financial Statements

FAIR VALUE MEASUREMENTS

The following table summarizes the fair values of financial instruments at fair value on a recurring basis for the periods indicated and determined using the following inputs:

Fair Values as of the end of 2022 Fair Values as of the end of 2021

Fair Values at the end of 2023

Fair Values at the end of 2022

Quoted prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Quoted prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

11 unchanged sentences

— 0.3 — 0.3 — 0.2 — 0.2

Contingent consideration (3)

— — — — — — 12.8 12.8

Total liabilities measured at fair value $ 31.2 $ 0.3 $ — $ 31.5 $ 31.5 $ 0.2 $ — $ 31.7

1 unchanged sentence

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 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.

(2) Represents forward currency exchange contracts, and for 2022, a treasury rate lock contract, all 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 that are included in Other current assets 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.

At the end of 2022, derivative assets included foreign currency exchange contracts and a treasury rate lock contract, both related to the acquisition of Transporeon and associated debt and were settled in the first two quarters of 2023.

Additional Fair Value Information

1 unchanged sentence

The fair value of the senior notes was determined based on observable market prices in less active markets and is categorized accordingly as Level II.

The fair values do not indicate the amount we would currently have to pay to extinguish any of this debt.

The fair values do not indicate the amount we would currently have to pay to extinguish the debt.

Index to Financial Statements

DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

27 unchanged sentences

Effective tax rate 12.8 % 21.0 % 14.2 %

Index to Financial Statements

The difference between the tax provision (benefit) at the statutory federal income tax rate and the tax provision (benefit) as a percentage of income before taxes (“effective tax rate”) was as follows:

3 unchanged sentences

Foreign income taxed at different rates 0.8 % 4.4 % 0.5 %

Change in valuation allowance — % — % 2.0 %

State income taxes 1.0 % 1.0 % 1.1 %

Stock-based compensation 4.8 % 1.2 % ( 0.8 ) %

Excess tax benefit related to stock-based compensation ( 0.6 ) % ( 2.5 ) % ( 1.5 ) %

taxes on foreign operations ( 4.4 ) % ( 3.1 ) % ( 1.6 ) %

Foreign-derived intangible income

( 3.9 ) % ( 0.4 ) % — %

Federal research and development credits ( 5.4 ) % ( 2.2 ) % ( 2.1 ) %

4 unchanged sentences

Our effective income tax rates for 2023 and 2022 were 12.8 % and 21.0 %.

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.

The decrease was primarily due to increases in tax benefits from U.S.

federal R&D credits and FDII in 2023, and a change in the geographic mix of earnings, partially offset by lower stock-based compensation deductions in the current year.

Index to Financial Statements

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.

14 unchanged sentences

Expenses not currently deductible 26.5 30.9

Foreign net operating loss carryforwards 15.3 18.0

Stock-based compensation

Net operating loss carryforwards

Stock-based compensation

Intercompany prepayments

Other 60.8 36.6

11 unchanged sentences

Utilization of our U.S.

federal NOLs is subject to annual limitations in accordance wit h the applicable tax code.

federal NOLs is subject to annual limitations in accordance with the applicable tax code.

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.

6 unchanged sentences

During 2023, we repatriated $ 371.3 million of our foreign earnings to the U.S.

Index to Financial Statements

The total amount of unrecognized tax benefits at the end of 2023 was $ 88.3 million .

21 unchanged sentences

At the end of 2023 and 2022, we accrued $ 9.9 million and $ 8.4 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

11 unchanged sentences

Total stock-based compensation expense $ 145.4 $ 120.4 $ 122.6

Index to Financial Statements

Stock-based compensation expense was allocated as follows:

9 unchanged sentences

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.

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

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

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.

For PSUs, the number of shares received at vesting will range from 0 % to 220 % of the target grant amount based on either market conditions or performance conditions or, in some cases, both.

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.

Performance conditions consider the achievement of our financial results over the vesting period.

Performance conditions consider the achievement of our financial results or metrics over the vesting period.

2023 Restricted Stock Units Outstanding

9 unchanged sentences

(1) Includes 0.9 million PSUs granted, 0.1 million PSUs vested, 0.2 million PSUs cancelled and forfeited, and 1.2 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.

(2) Excludes approximately 0.1 million PSUs related to achievement above target levels at the vesting date and approximately 0.1 million PSUs related to shares cancelled due to achievement below target levels.

The weighted-average grant date fair value of all RSUs granted during 2023, 2022, and 2021 was $ 49.93 , $ 73.32 , and $ 78.44 per share.

8 unchanged sentences

At the end of 2023, the number of shares reserved for future purchases was 4.6 million.

Index to Financial Statements

COMMON STOCK REPURCHASE

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, 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.

The timing and actual number of any shares repurchased will depend on a variety of factors, including market conditions, our share price, other available uses of capital, applicable legal requirements, and other factors.

The 2021 Stock Repurchase Program may be suspended, modified, or discontinued at any time at the Company’s discretion without notice.

During 2022, 2021, and 2020, we repurchased approximately 6.0 million, 2.1 million, and 1.9 million shares of common stock in open market purchases under our 2017 and 2021 Stock Repurchase Programs, at an average price of $ 65.90 , $ 85.75 , and $ 43.40 per share, for a total of $ 394.7 million, $ 180.0 million, and $ 81.6 million.

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

At the end of 2023, the 2021 Stock Repurchase Program had remaining authorized funds of $ 115.3 million.

Stock repurchases are reflected as a decrease to common stock based on par value and additional-paid-in-capital, based on the average book value per share for all outstanding shares calculated at the time of each individual repurchase transaction.

On January 28, 2024, our Board of Directors approved a new stock repurchase program (“2024 Stock Repurchase Program”) authorizing up to $ 800.0 million in repurchases of our common stock.

The 2024 Stock Repurchase Program replaced the 2021 Stock Repurchase Program, which has been cancelled.

Under the 2024 Stock Repurchase Program, the stock repurchase authorization does not have an expiration date.

According to the 2024 Stock Repurchase Program, we may repurchase stock from time to time through accelerated share repurchase programs, open market transactions, privately negotiated transactions, block purchases, tender offers, or by other means.

The 2024 Stock Repurchase Program may be suspended, modified, or discontinued at any time without prior notice .

During 2023, 2022, and 2021 , we repurchased approximately 2.4 million, 6.0 million, and 2.1 million shares of common stock in open market purchases at an average price of $ 42.50 , $ 65.90 , and $ 85.75 per share for a total of $ 100.0 million, $ 394.7 million , and $ 180.0 million.

Stock repurchases are reflected as a decrease to common stock based on par value and additional-paid-in-capital, determined by the average book value per share of outstanding stock, calculated at the time of each individual repurchase transaction.

The excess of the purchase price over this average for each repurchase was charged to retained earnings.

As a result of the 2022 repurchases, retained earnings was reduced by $ 347.0 million in 2022.

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.

As a result of the 2023 repurchases under the 2021 Stock Repurchase Program, retained earnings was reduced by $ 79.0 million in 2023 .

SUBSEQUENT EVENT

Reporting Segment Change

Considering the pending AGCO JV transaction and our CODM’s revised organizational structure, effective in the first quarter of 2024, we reorganized our businesses under a new structure.

This structure brings similar businesses together, which is expected to enhance our ability to achieve scale and growth consistent with our strategy.

Beginning with the first quarter of 2024, our reporting segments, and the results of those segments, will be reorganized to reflect how our CODM assesses performance and allocates resources.

T he new reporting segments will be as follows :

• Architecture, Engineering, and Construction and Owner Software (“AECO Software”) .

This segment primarily provides software solutions, which sell through a direct channel to customers in the construction industry.

• Field Systems .

This segment primarily includes hardware-centric businesses, which sell through dealer partner channels.

• Transportation and Logistics (“T&L”) .

This segment will primarily maintain the historical businesses from the previous Transportation segment, which serves customers working in long haul trucking and freight shipper markets.

We will report the new segment information beginning in the first quarter of 2024.

As of and for the year of 2023, our CODM continued to review financial information at the current segment level;

therefore, these changes had no impact on our reporting structure for 2023.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2022, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 17, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 29, 2023, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2024 expressed an adverse opinion thereon.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Identification of Performance Obligations

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Auditing the Company's determination of distinct performance obligations was complex due to the effort involved in assessing whether the various product and service offerings promised within each contract are separate performance obligations or should be combined into a single performance obligation.

Index to Financial Statements

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company's internal controls over the evaluation of the relevant terms of its contracts, and the appropriate identification of distinct performance obligations.

This included testing relevant controls over the information systems that are important to the initiation, recording, and billing of revenue transactions.

Our audit procedures included evaluating management’s revenue recognition policy which included the application of management’s judgment in the identification of performance obligations.

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Finally, we assessed the appropriateness of the related disclosures in the consolidated financial statements.

Business Combination – Customer Relationships and Developed Technology

Description of the Matter During fiscal year 2023, the Company completed the acquisition of Transporeon for consideration of $2.1 billion, as disclosed in Note 3 to the consolidated financial statements.

The transaction was accounted for as a business combination.

Auditing the Company's accounting for its acquisition of Transporeon was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of identified intangible assets, which principally consisted of developed technology and customer relationships.

The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business.

The Company used a discounted cash flow model to measure the developed technology and customer relationship intangible assets.

The significant assumptions used to estimate the value of these intangible assets included certain assumptions that form the basis of the forecasted results, specifically, critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue, revenue growth rates, customer attrition rates, royalty rates, and discount rates.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit To test the estimated fair value of the developed technology and customer relationships intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

For example, we compared the significant assumptions to current industry, market and economic trends and to the Company's budgets and forecasts, and Transporeon’s historical operating results.

We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates.

Our valuation specialists’ procedures included, among others, developing a range of independent estimates for the discount rates used in the valuation models and comparing those to the discount rates selected by management.

/s/ Ernst & Young LLP

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February 26, 2024

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

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We have audited Trimble Inc.’s internal control over financial reporting as of December 29, 2023, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Trimble Inc.

(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 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.

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Trimble Inc.

(the Company) has not maintained effective internal control over financial reporting as of December 29, 2023, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to the accounting for the Company’s business combination of Transporeon, including lack of appropriate oversight of third-party valuation specialists and insufficient design and operating effectiveness of management review controls, including controls over the completeness and accuracy of certain assumptions used in the valuation of acquired intangible assets.

As indicated in the accompanying Management’s Annual 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 businesses acquired in 2023, which are included in the 2023 consolidated financial statements of the Company and constituted approximately 3% of both tangible assets and revenue as of and for the year ended December 29, 2023.

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 2023.

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.

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 29, 2023 and December 30, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 29, 2023, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated February 26, 2024, which expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Index to Financial Statements

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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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