Table of ContentsContents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________________ 
FORM 10-Q
______________________________________________________________________________________ 
(Mark One)
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 29, 2017April 2, 2021
OR
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO             
Commission file number: 001-14845
trmb-20210402_g1.jpg
TRIMBLE INC.
(Exact name of registrant as specified in its charter)
___________________________________ 
___________________________________________________ 
Delaware94-2802192
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
incorporation or organization)
935 Stewart Drive, Sunnyvale, CA 94085
(Address of principal executive offices) (Zip Code)
Telephone Number (408) 481-8000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated FilerýAccelerated Filer
¨

Non-accelerated Filer¨
Non-accelerated Filer
¨  (Do not check if a smaller reporting company)
Smaller Reporting Company¨☐
Emerging Growth Company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  ý

Securities registered pursuant to Section 12(b) of the Act:
Table of Contents
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareTRMBNASDAQ Global Select Market

As of November 3, 2017,May 5, 2021, there were 251,761,300 250,965,073 shares of Common Stock, par value $0.001 per share, outstanding.


Table of ContentsContents

TRIMBLE INC.
FORM 10-Q for the Quarter Ended September 29, 2017April 2, 2021
TABLE OF CONTENTS
 
Page
PART I.
PART I.ITEM 1.Page
ITEM 1.
Financial Statements (Unaudited):
43
54
65
6
7
8
ITEM 2.
2217
ITEM 3.
3629
ITEM 4.
3730
PART II.
ITEM 1.
3730
ITEM 1A.
3730
ITEM 2.
3731
ITEM 3.
31
ITEM 4.
3831
ITEM 6.5.
3831
ITEM 6.
32
3933

2
Table of Contents
PART I – FINANCIAL INFORMATION


ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TRIMBLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Third Quarter of Fiscal Year EndFirst Quarter ofFiscal Year End
As of2017 2016As of20212020
(In millions, except par value)   (In millions, except par value)  
ASSETS   ASSETS
Current assets:   Current assets:
Cash and cash equivalents$255.0
 $216.1
Cash and cash equivalents$264.6 $237.7 
Short-term investments154.2
 111.1
Accounts receivable, net407.2
 354.8
Accounts receivable, net576.6 620.5 
Other receivables35.4
 35.4
Inventories254.7
 218.8
Inventories298.7 301.7 
Other current assets55.4
 42.5
Other current assets120.1 121.5 
Total current assets1,161.9
 978.7
Total current assets1,260.0 1,281.4 
Property and equipment, net160.5
 144.2
Property and equipment, net251.6 251.8 
Operating lease right-of-use assetsOperating lease right-of-use assets121.1 128.9 
Goodwill2,289.3
 2,077.6
Goodwill3,848.0 3,876.5 
Other purchased intangible assets, net405.8
 333.3
Other purchased intangible assets, net543.0 580.1 
Deferred income tax assetsDeferred income tax assets502.7 510.2 
Other non-current assets163.2
 140.0
Other non-current assets254.1 248.0 
Total assets$4,180.7
 $3,673.8
Total assets$6,780.5 $6,876.9 
LIABILITIES AND STOCKHOLDERS' EQUITY   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:   Current liabilities:
Short-term debt$135.4
 $130.3
Short-term debt$97.5 $255.8 
Accounts payable146.2
 109.8
Accounts payable157.9 143.2 
Accrued compensation and benefits116.7
 97.5
Accrued compensation and benefits145.2 166.8 
Deferred revenue285.4
 246.5
Deferred revenue561.4 560.5 
Accrued warranty expense17.8
 17.2
Other current liabilities106.9
 86.9
Other current liabilities189.6 185.0 
Total current liabilities808.4
 688.2
Total current liabilities1,151.6 1,311.3 
Long-term debt560.4
 489.6
Long-term debt1,291.9 1,291.4 
Non-current deferred revenue41.3
 37.7
Deferred revenue, non-currentDeferred revenue, non-current57.5 53.3 
Deferred income tax liabilities45.2
 38.8
Deferred income tax liabilities292.2 300.3 
Income taxes payableIncome taxes payable61.8 62.2 
Operating lease liabilitiesOperating lease liabilities101.9 109.2 
Other non-current liabilities168.0
 113.8
Other non-current liabilities150.0 150.6 
Total liabilities1,623.3
 1,368.1
Total liabilities3,106.9 3,278.3 
Commitments and contingencies (Note 13)
 
Commitments and contingencies (Note 13)00
   
Stockholders' equity:   Stockholders' equity:
Preferred stock, $0.001 par value; 3.0 shares authorized; none issued and outstanding—
 —
Common stock, $0.001 par value; 360.0 shares authorized; 251.9 and 251.3 shares issued and outstanding as of the end of the third quarter of fiscal 2017 and fiscal year end 2016, respectively0.3
 0.3
Preferred stock, $0.001 par value; 3.0 shares authorized; NaN issued and outstandingPreferred stock, $0.001 par value; 3.0 shares authorized; NaN issued and outstanding0 0 
Common stock, $0.001 par value; 360.0 shares authorized; 250.9 and 250.8 shares issued and outstanding at the end of the first quarter of 2021 and fiscal year end 2020, respectivelyCommon stock, $0.001 par value; 360.0 shares authorized; 250.9 and 250.8 shares issued and outstanding at the end of the first quarter of 2021 and fiscal year end 2020, respectively0.3 0.3 
Additional paid-in-capital1,452.0
 1,348.3
Additional paid-in-capital1,841.5 1,801.7 
Retained earnings1,236.0
 1,177.1
Retained earnings1,961.8 1,893.4 
Accumulated other comprehensive loss(130.8) (219.9)Accumulated other comprehensive loss(130.0)(98.5)
Total Trimble Inc. stockholders' equity2,557.5
 2,305.8
Total Trimble Inc. stockholders' equity3,673.6 3,596.9 
Noncontrolling interests(0.1) (0.1)Noncontrolling interests0 1.7 
Total stockholders' equity2,557.4
 2,305.7
Total stockholders' equity3,673.6 3,598.6 
Total liabilities and stockholders' equity$4,180.7
 $3,673.8
Total liabilities and stockholders' equity$6,780.5 $6,876.9 
See accompanying Notes to the Condensed Consolidated Financial Statements.

3
Table of Contents
TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
Third Quarter of First Three Quarters of First Quarter of
(In millions, except per share amounts)2017 2016 2017 2016(In millions, except per share amounts)20212020
Revenue:       Revenue:
Product$446.1
 $384.9
 $1,297.1
 $1,185.5
Product$539.4 $463.8 
Service115.0
 105.6
 331.8
 316.9
Service162.3 162.4 
Subscription108.9
 93.6
 316.9
 274.3
Subscription184.8 166.1 
Total revenue670.0
 584.1
 1,945.8
 1,776.7
Total revenue886.5 792.3 
Cost of sales:       Cost of sales:
Product222.8
 186.6
 637.0
 576.0
Product255.7 210.1 
Service46.4
 40.7
 141.2
 126.3
Service59.6 63.6 
Subscription28.3
 26.0
 82.5
 79.3
Subscription55.8 54.1 
Amortization of purchased intangible assets23.0
 21.8
 62.5
 69.9
Amortization of purchased intangible assets22.1 23.5 
Total cost of sales320.5
 275.1
 923.2
 851.5
Total cost of sales393.2 351.3 
Gross margin349.5
 309.0
 1,022.6
 925.2
Gross margin493.3 441.0 
Operating expense:       Operating expense:
Research and development92.6
 86.9
 272.1
 266.6
Research and development129.4 118.2 
Sales and marketing100.6
 88.6
 295.8
 282.7
Sales and marketing122.4 131.7 
General and administrative74.0
 59.2
 218.4
 193.1
General and administrative85.4 73.0 
Restructuring charges1.3
 3.5
 6.5
 9.8
RestructuringRestructuring1.5 2.9 
Amortization of purchased intangible assets17.0
 15.5
 46.6
 47.3
Amortization of purchased intangible assets13.7 16.9 
Total operating expense285.5
 253.7
 839.4
 799.5
Total operating expense352.4 342.7 
Operating income64.0
 55.3
 183.2
 125.7
Operating income140.9 98.3 
Non-operating income (expense), net:       
Non-operating expense, net:Non-operating expense, net:
Interest expense, net(6.3) (6.6) (18.4) (19.8)Interest expense, net(16.9)(20.5)
Foreign currency transaction gain (loss), net1.6
 —
 3.0
 (1.6)
Income from equity method investments, net8.7
 5.2
 22.8
 13.9
Income from equity method investments, net11.8 9.4 
Other income (expense), net1.6
 (1.7) 12.2
 1.7
Other income (expense), net1.6 (7.8)
Total non-operating income (expense), net5.6
 (3.1) 19.6
 (5.8)
Total non-operating expense, netTotal non-operating expense, net(3.5)(18.9)
Income before taxes69.6
 52.2
 202.8
 119.9
Income before taxes137.4 79.4 
Income tax provision13.9
 13.0
 46.7
 25.4
Income tax provision22.8 17.5 
Net income55.7
 39.2
 156.1
 94.5
Net income114.6 61.9 
Less: Net loss attributable to noncontrolling interests—
 —
 —
 (0.2)
Net income attributable to noncontrolling interestsNet income attributable to noncontrolling interests0.1 0 
Net income attributable to Trimble Inc.$55.7
 $39.2
 $156.1
 $94.7
Net income attributable to Trimble Inc.$114.5 $61.9 
Basic earnings per share$0.22
 $0.16
 $0.62
 $0.38
Shares used in calculating basic earnings per share252.6
 249.7
 252.5
 250.5
Diluted earnings per share$0.22
 $0.15
 $0.61
 $0.37
Shares used in calculating diluted earnings per share257.9
 253.2
 257.0
 253.7
Earnings per share attributable to Trimble Inc.:Earnings per share attributable to Trimble Inc.:
BasicBasic$0.46 $0.25 
DilutedDiluted$0.45 $0.25 
Shares used in calculating earnings per share:Shares used in calculating earnings per share:
BasicBasic251.1 249.9 
DilutedDiluted254.3 251.7 
See accompanying Notes to the Condensed Consolidated Financial Statements.

4
Table of Contents
TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 
First Quarter of
Third Quarter of First Three Quarters of 20212020
2017 2016 2017 2016
(In millions)       (In millions)  
Net income$55.7
 $39.2
 $156.1
 $94.5
Net income$114.6 $61.9 
Foreign currency translation adjustments, net of tax29.3
 4.5
 89.5
 11.5
Foreign currency translation adjustments, net of tax(31.5)(54.3)
Net unrealized loss on short-term investments—
 —
 (0.1) —
Net unrealized actuarial gain (loss), net of tax(0.1) —
 (0.3) 0.1
Net unrealized gain, net of taxNet unrealized gain, net of tax0 0.2 
Comprehensive income84.9
 43.7
 245.2
 106.1
Comprehensive income83.1 7.8 
Less: Comprehensive loss attributable to noncontrolling interests—
 —
 —
 (0.2)
Comprehensive income attributable to noncontrolling interestsComprehensive income attributable to noncontrolling interests0.1 0 
Comprehensive income attributable to Trimble Inc.$84.9
 $43.7
 $245.2
 $106.3
Comprehensive income attributable to Trimble Inc.$83.0 $7.8 
See accompanying Notes to the Condensed Consolidated Financial Statements.

5
Table of Contents
TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
 Common stockRetained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity		Noncontrolling
Interest		Total
 SharesAmountAdditional Paid-In Capital
(In millions)       
Balance at the end of fiscal 2020250.8 $0.3 $1,801.7 $1,893.4 $(98.5)$3,596.9 $1.7 $3,598.6 
Net income— — — 114.5 — 114.5 0.1 114.6 
Other comprehensive income— — — — (31.5)(31.5)— (31.5)
Comprehensive income83.0 83.1 
Issuance of common stock under employee plans, net of tax withholdings0.7 — 18.2 (10.2)— 8.0 — 8.0 
Stock repurchases(0.6)— (4.1)(35.9)— (40.0)— (40.0)
Stock-based compensation— — 25.1 — — 25.1 — 25.1 
Noncontrolling interest investment— — 0.6 — — 0.6 (1.8)(1.2)
Balance at the end of the first quarter of fiscal 2021250.9 $0.3 $1,841.5 $1,961.8 $(130.0)$3,673.6 $0 $3,673.6 
 Common stockRetained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity		Noncontrolling
Interest		Total
 SharesAmountAdditional Paid-In Capital
(In millions)       
Balance at the end of fiscal 2019249.9 $0.2 $1,692.8 $1,602.8 $(176.8)$3,119.0 $1.4 $3,120.4 
Net income— — — 61.9 — 61.9 — 61.9 
Other comprehensive income— — — — (54.1)(54.1)— (54.1)
Comprehensive income7.8 7.8 
Issuance of common stock under employee plans, net of tax withholdings1.0 — 20.4 (7.7)— 12.7 — 12.7 
Stock repurchases(1.2)— (8.4)(41.6)— (50.0)— (50.0)
Stock-based compensation— — 11.8 — — 11.8 — 11.8 
Noncontrolling interest investment— — — — — — (0.4)(0.4)
Balance at the end of the first quarter of fiscal 2020249.7 $0.2 $1,716.6 $1,615.4 $(230.9)$3,101.3 $1.0 $3,102.3 
See accompanying Notes to the Condensed Consolidated Financial Statements.

6
Table of Contents
TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
First Three Quarters of First Quarter of
(In millions)2017 2016(In millions)20212020
Cash flow from operating activities:   Cash flow from operating activities:
Net Income$156.1
 $94.5
Net incomeNet income$114.6 $61.9 
Adjustments to reconcile net income to net cash provided by operating activities:   Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense26.4
 27.9
Depreciation expense10.3 9.8 
Amortization expense109.1
 117.2
Amortization expense35.8 40.4 
Provision for doubtful accounts1.2
 2.5
Provision for credit lossesProvision for credit losses(0.8)6.4 
Deferred income taxes(0.2) 1.2
Deferred income taxes0.4 4.8 
Stock-based compensation45.0
 40.0
Stock-based compensation27.2 10.7 
Income from equity method investments(22.8) (13.9)
Divestiture (gain) loss, net(8.0) 0.1
Provision for excess and obsolete inventories3.6
 12.0
Other non-cash items(1.5) 3.9
Decrease (increase) in assets:   
Accounts receivable(34.2) (9.9)
Other receivables0.7
 (2.7)
Income from equity method investments, net of dividendsIncome from equity method investments, net of dividends(3.8)(5.6)
Other, netOther, net0.8 8.5 
(Increase) decrease in assets:(Increase) decrease in assets:
Accounts receivable, netAccounts receivable, net40.0 47.9 
Inventories(19.4) 25.7
Inventories(0.9)(20.4)
Other current and non-current assets(21.9) (11.1)Other current and non-current assets2.8 16.8 
Increase (decrease) in liabilities:   Increase (decrease) in liabilities:
Accounts payable27.8
 2.7
Accounts payable14.5 (12.8)
Accrued compensation and benefits7.5
 (12.8)Accrued compensation and benefits(25.0)(12.6)
Deferred revenue29.6
 32.8
Deferred revenue9.2 15.6 
Accrued warranty0.1
 (0.5)
Other liabilities10.9
 (22.6)
Other current and non-current liabilitiesOther current and non-current liabilities3.1 (15.7)
Net cash provided by operating activities310.0
 287.0
Net cash provided by operating activities228.2 155.7 
Cash flow from investing activities:   Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired(286.7) (22.3)Acquisitions of businesses, net of cash acquired(1.2)(198.0)
Acquisitions of property and equipment(26.4) (19.7)
Purchases of equity method investments—
 (1.5)
Acquisitions of intangible assets—
 (0.3)
Purchases of short-term investments(220.0) (62.1)
Proceeds from maturities of short-term investments84.6
 —
Proceeds from sales of short-term investments92.1
 —
Net proceeds from sales of businesses20.1
 10.7
Dividends received from equity method investments12.9
 16.5
Other0.5
 0.1
Purchases of property and equipmentPurchases of property and equipment(10.6)(16.7)
Other, netOther, net2.6 0.3 
Net cash used in investing activities(322.9) (78.6)Net cash used in investing activities(9.2)(214.4)
Cash flow from financing activities:   Cash flow from financing activities:
Issuance of common stock, net of tax withholdings73.0
 50.0
Issuance of common stock, net of tax withholdings8.0 12.7 
Repurchases and retirement of common stock(111.5) (102.2)
Repurchases of common stockRepurchases of common stock(40.0)(50.0)
Proceeds from debt and revolving credit lines517.0
 291.0
Proceeds from debt and revolving credit lines180.8 657.5 
Payments on debt and revolving credit lines(444.3) (351.3)Payments on debt and revolving credit lines(335.7)(520.2)
Net cash provided by (used in) financing activities34.2
 (112.5)
Other, netOther, net0 (0.4)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(186.9)99.6 
Effect of exchange rate changes on cash and cash equivalents17.6
 1.6
Effect of exchange rate changes on cash and cash equivalents(5.2)(13.3)
Net increase in cash and cash equivalents38.9
 97.5
Net increase in cash and cash equivalents26.9 27.6 
Cash and cash equivalents - beginning of period216.1
 116.0
Cash and cash equivalents - beginning of period237.7 189.2 
Cash and cash equivalents - end of period$255.0
 $213.5
Cash and cash equivalents - end of period$264.6 $216.8 
See accompanying Notes to the Condensed Consolidated Financial Statements.

7
Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
NOTE 1. OVERVIEW AND BASIS OF PRESENTATIONACCOUNTING POLICIES
The Company began operations in 1978 and was originallyBackground
Trimble Inc., (“we” or “our” or “us”) is incorporated in California as Trimble Navigation Limited in 1981. On October 1, 2016, Trimble Navigation Limited changed its name to Trimble Inc. ("Trimble" or the "Company") and changed its state of incorporation from the State of California to the State of Delaware. Other than the change in corporate domicile, the reincorporation did not result in any change in the business, physical location, management, assets, liabilities or total stockholders' equity of the Company, nor did it result in any change in location of the Company's employees, including the Company's management.
Trimble is a provider of technology solutions that enable professionals and field mobile workers to optimize or transform their work processes. Trimble's solutions are used across a range of industries including agriculture, architecture, civil engineering, survey and land administration, construction, geospatial, government, natural resources, transportation and utilities. Representative Trimble customers include engineering and construction firms, surveying companies, farmers and agricultural companies, transportation and logistics companies, energy and utility companies, and state, federal and municipal governments.
Trimble focuses on integrating broad technological and application capabilities to create system-level solutions that transform how work is done within the industries the Company serves. Products are sold based on return on investment and provide benefits such as lower operational costs, higher productivity, improved quality, enhanced safety and regulatory compliance, and reduced environmental impact. Representative products include equipment that automates large industrial equipment such as tractors and bulldozers; integrated systems that track fleets of vehicles and workers and provide real-time information and powerful analytics to the back-office; data collection systems that enable the management of large amounts of geo-referenced information; software solutions that connect all aspects of a construction site or a farm; and building information modeling ("BIM") software that is used throughout the design, build, and operation of buildings.Delaware since October 2016.
Basis of Presentation
The Company hasWe use a 52-53 week52- to 53-week fiscal year ending on the Friday nearest to December 31, which for fiscal 2016 was December 30, 2016.31. The thirdfirst quarter of fiscal 20172021 and 20162020 ended on September 29, 2017April 2, 2021 and September 30, 2016,April 3, 2020, respectively. Both fiscal 20172021 and 20162020 are 52-week years. Unless otherwise stated, all dates refer to the Company’sour fiscal year and fiscal periods.
The Condensed Consolidated Financial Statements include theour results of the Company and itsour consolidated subsidiaries. Inter-companyIntercompany accounts and transactions have been eliminated. Noncontrolling interests represent the noncontrolling stockholders’ proportionate share of the net assets and results of operations of the Company’sour consolidated subsidiaries.
Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation, including certain line items within the Consolidated Statement of Cash Flows, due to the adoption of accounting for certain aspects of the share-based payments awards, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements.
Reportable Segments
In March 2017, the Company effected a change in the reporting of its segment financial results to better reflect the Company's customer base and end markets. Beginning with the first quarter of fiscal 2017, the Company reports its financial performance, including revenues and operating income, based on four new reportable segments: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation. Comparative period financial information by reportable segment has been recast to conform with the current presentation. See Note 6 of the Notes toThe unaudited interim Condensed Consolidated Financial Statements for further information.
Unaudited Interim Financial Information
Theand accompanying financial data as of the end of the third quarter of fiscal 2017 and for the third quarter and the first three quarters of fiscal 2017 and 2016 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements,notes are prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The(“GAAP”). In the opinion of management, the unaudited interim Condensed Consolidated Balance Sheet as of fiscal year end 2016 is derived from the audited Consolidated Financial Statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for the full year. The information included in the Company's Annual Report onthis Form 10-K for fiscal year 2016. The following discussion10-Q should be read in conjunction with information included in our Form 10-K filed with the Company’s 2016 Annual ReportU.S. Securities and Exchange Commission on February 26, 2021 (the “2020 Form 10-K.
In the opinion of management, all adjustments necessary have been made to present a fair statement of financial position and results for the interim periods presented. The results of operations for the third quarter and the first three quarters of fiscal 2017 are not necessarily indicative of the operating results for the full fiscal year or any future periods. Individual segment revenue may be affected by seasonal buying patterns and general economic conditions.

10-K”).
Use of Estimates
The preparation of financial statements in accordance with U.S. generally accepted accounting principlesGAAP requires managementus to make estimates and assumptions that affect the amounts reported in itsthe Condensed Consolidated Financial Statements and accompanying notes. Estimates are used for allowances for doubtful accounts, sales returns reserve, allowances for inventory valuation, warranty costs, investments, goodwill impairment, intangibles impairment, purchased intangibles, stock-based compensation, and income taxes among others. Management bases itsWe base our estimates on historical experience and various other assumptions believedwe believe to be reasonable. Although theseActual results that we experience may differ materially from our estimates. For a complete discussion of our estimates are based on management’s best knowledgeand assumptions, refer to Note 1 “Description of current eventsBusiness and actions that may impactAccounting Policies” of the Company in the future, actual results may be different from the estimates.2020 Form 10-K.
The Company has presented revenue and cost
Summary of sales separately for products, service, and subscriptions. Product revenue includes hardware, software licenses, parts and accessories; service revenue includes maintenance and support for hardware and software products, training, and professional services; subscription revenue includes software as a service ("SaaS").
NOTE 2. UPDATES TO SIGNIFICANT ACCOUNTING POLICIESSignificant Accounting Policies
There have been no material changes to the Company’sour significant accounting polices during the first three quartersquarter of fiscal 2017 from those disclosed in2021. For a complete discussion of our policies, refer to Note 1 “Description of Business and Accounting Policies” of the Company’s most recent2020 Form 10-K.
RecentRecently Adopted Accounting Pronouncements
In May 2014,Income Taxes - Simplifying the FASB issued a comprehensive new revenue recognition standard that replaces the current revenue recognition guidance under U.S. GAAP. The new standard requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchangeAccounting for those goods or services. The new standard may be applied either retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application. The Company plans to adopt this accounting standard update in the first quarter of fiscal 2018 using the full retrospective adoption method. The Company does not anticipate that its internal control framework will materially change, but rather existing internal controls will be modified and augmented as necessary to implement the new revenue standard. The new standard may impact, in some cases, the timing and amount of revenue recognized. Additionally, direct costs to obtain and fulfill customer contracts, in some cases, may be deferred and amortized under the new standard. The Company is currently evaluating the qualitative and quantitative impacts on the financial statements and related disclosures.

Income Taxes
In January 2016,December 2019, the FASBFinancial Accounting Standards Board (FASB) issued final guidance that will require entitiesamendments to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The amendments are effective for the Company beginning in fiscal 2018, although early adoption is permitted and should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with certain exceptions. The Company is currently evaluating the effect of the updated standard on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued new guidance that requires a lessee to recognize assets and liabilities arising from leases on the balance sheet. Current GAAP does not require lease assets and liabilities to be recognized for most leases. Additionally, companies are permitted to make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. For both finance leases and operating leases, the lease liability should be initially measured at the present value of the lease payments. This new guidance is effective for the Company beginning in fiscal 2019, although early adoption is permitted. The Company is currently evaluating the effect of this guidance on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued new guidance that requires credit losses on financial assets measured at amortized cost basis to be presented based on the net amount expected to be collected, not based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. The new standard is effective for the Company beginning in fiscal 2020. Early adoption for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 is permitted. The Company is currently evaluating the effect of the updated standard on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued new guidance related to the statement of cash flows. This guidance amended the existing accounting standards for the statement of cash flows and provided guidance on certain classification issues related to the statement of cash flows. The new standard is effective for the Company beginning in fiscal 2018 and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently evaluating the effect

of these amendments on its statement of cash flows, which will likely include a reclassification of contingent consideration payments for business combinations from cash flows from investing activities, to both cash flows from operating and financing activities.

In October 2016, the FASB issued new guidance related to income taxes. This standard requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The guidance will be effective for the Company in its first quarter of fiscal 2018. The Company is currently evaluating the effect of the updated standard on its consolidated financial statements and related disclosures.

In January 2017, the FASB issued new guidance that simplifies the accounting for goodwill impairmentIncome Taxes to reduce complexity by requiring impairment charges to be based onremoving certain exceptions and implementing targeted simplifications. We adopted the first step in current GAAP's two-step impairment test. The impairment test is performed by comparing the fair value of a reporting unit with its carrying amount and an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard is to be applied on a prospective basis and is effective for the Company beginning in fiscal 2020 and early adoption is permitted. The Company is currently evaluating the effect of the updated standard on its consolidated financial statements and related disclosures.

In February 2017, the FASB issued new guidance clarifying the scope and application of existing guidance related to the sale or transfer of non-financial assets to non-customers, including partial sales. The amendments are effective at the same time as the new revenue recognition guidance, which the Company expects to adopt in the first quarterbeginning of fiscal 2018.year 2021. The Company is currently evaluating the effectadoption did not have a material impact on our Condensed Consolidated Financial Statements.
Recently issued Accounting Pronouncements not yet adopted
There are no recently issued accounting pronouncements applicable to us not yet adopted.
8
Table of the updated standard on its consolidated financial statements and related disclosures.Contents

NOTE 3.2. STOCKHOLDERS’ EQUITY
Stock Repurchase Activities
In August 2015, the Company’sNovember 2017, our Board of Directors approved a stock repurchase program (2015(“2017 Stock Repurchase Program),Program”) authorizing the Company to repurchase up to $400.0$600.0 million of Trimble’s common stock.
Under the share repurchase program, the Company2017 Stock Repurchase Program, we may repurchase shares from time to time in open market transactions, privately negotiated transactions, accelerated share buyback programs, tender offers, or by other means. The timing and amount of repurchase transactions will beare determined by the Company’s management based on itsan evaluation of market conditions, share price, legal requirements, and other factors. The program2017 Stock Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.
During the first three quartersquarter of fiscal 2017, the Company2021, we repurchased approximately 3.10.6 million shares of common stock in open market purchases at an average price of $36.07$71.24 per share for a total of $111.5 million under$40.0 million. At the 2015end of the first quarter of fiscal 2021, the 2017 Stock Repurchase Program.Program had remaining authorized funds of $50.7 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. The excess of the purchase price over this average for each repurchase is charged to retained earnings. As a result of the 2017 repurchases, retained earnings was reduced by $94.1 million in the first three quarters of fiscal 2017. Common stock repurchases under the program wereare recorded based upon the trade date for accounting purposes. At the end
9
Table of the first three quarters of fiscal 2017, the 2015 Stock Repurchase Program had remaining authorized funds of $19.0 million.
Stock-Based Compensation Expense
Stock compensation expense is recognized based on the fair value of the portion of share-based payment awards that is expected to vest during the period and is net of estimated forfeitures.
The following table summarizes stock-based compensation expense for the third quarter and first three quarters of fiscal 2017 and 2016:

Contents
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Cost of sales$1.1
 $0.9
 $2.8
 $2.8
Research and development2.7
 2.2
 7.7
 6.9
Sales and marketing2.4
 2.1
 7.0
 6.3
General and administrative9.9
 8.1
 27.5
 24.0
Total operating expense15.0
 12.4
 42.2
 37.2
Total stock-based compensation expense$16.1
 $13.3
 $45.0
 $40.0
NOTE 4.3. BUSINESS COMBINATIONS
During the first three quarters of fiscal 2017, the Company acquired tenWe did not acquire any businesses with total cash consideration of $333.9 million. The Condensed Consolidated Statements of Income include the operating results of the businesses from the dates of acquisition. The acquisitions were not significant individually or in the aggregate. The largest acquisition was Müller-Elektronik, a privately-held German company specializing in implement control and precision farming solutions. In the aggregate, the businesses acquired during the first three quarters of fiscal 2017 contributed less than two percent to the Company's total revenue during the first three quarters of fiscal 2017.
The Company determined the total consideration paid for each of its acquisitions as well as the fair value of the assets acquired and liabilities assumed as of the date of acquisition. For certain acquisitions completed in the last quarter of fiscal 2016 and the first three quarters of fiscal 2017, the fair value of the assets acquired and liabilities assumed are preliminary and may be adjusted as the Company obtains additional information, primarily related to adjustments for the true up of acquired net working capital in accordance with certain purchase agreements, and estimated values of certain net tangible assets and liabilities including tax balances, pending the completion of final studies and analyses. If there are adjustments made for these items, the fair value of intangible assets and goodwill could be impacted. Thus, the provisional measurements of fair value are subject to change. Such changes could be significant. The Company expects to finalize the valuation of the net tangible and intangible assets as soon as practicable, but not later than one-year from the acquisition date.2021.
The fair value of identifiable assets acquired and liabilities assumed were 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.  Acquisition costs directly related to the acquisitions, including the changes in the fair value of the contingent consideration liabilities, a net benefit of $0.3 million and a net expense of $6.1 million for the third quarter and the first three quarters of fiscal 2017, respectively, and net expenses of $0.9 million and $3.4 million for the third quarter and the first three quarters of fiscal 2016, respectively, were recorded as incurred and were included in General and administrative expense in the Condensed Consolidated Statements of Income.Intangible Assets
The following table summarizes the Company’s business combinations completed during the first three quarterspresents a summary of fiscal 2017:
 First Three Quarters of 
 2017 
(In millions)  
Fair value of total purchase consideration$333.9
 
Less fair value of net assets acquired:  
Net tangible assets acquired29.7
 
Identifiable intangible assets166.6
 
     Deferred income taxes(5.8) 
Goodwill$143.4
 

Intangible Assets
The following table presents details of the Company’sour total intangible assets:

As ofFirst Quarter of Fiscal 2021Fiscal Year End 2020
 Gross  Gross  
CarryingAccumulatedNet CarryingCarryingAccumulatedNet Carrying
(In millions)AmountAmortizationAmountAmountAmortizationAmount
Developed product technology$1,093.8 $(813.1)$280.7 $1,118.2 $(811.1)$307.1 
Customer relationships671.1 (419.1)252.0 681.1 (419.3)261.8 
Trade names and trademarks56.2 (51.2)5.0 58.3 (51.9)6.4 
Distribution rights and other intellectual property42.5 (37.2)5.3 45.8 (41.0)4.8 
$1,863.6 $(1,320.6)$543.0 $1,903.4 $(1,323.3)$580.1 
As ofThird Quarter of Fiscal 2017 Fiscal Year End 2016
 Gross     Gross    
 Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying
(In millions)Amount Amortization Amount Amount Amortization Amount
Developed product technology$913.5
 $(704.9) $208.6
 $794.8
 $(620.6) $174.2
Trade names and trademarks58.6
 (47.4) 11.2
 50.9
 (42.9) 8.0
Customer relationships511.6
 (337.9) 173.7
 438.7
 (294.1) 144.6
Distribution rights and other intellectual properties72.2
 (59.9) 12.3
 64.3
 (57.8) 6.5
 $1,555.9
 $(1,150.1) $405.8
 $1,348.7
 $(1,015.4) $333.3
The estimated future amortization expense of purchased intangible assets as of the end of the third quarter of fiscal 2017 was as follows:
(In millions) 
2017 (Remaining)$39.6
2018133.3
201991.9
202063.0
202140.9
Thereafter37.1
Total$405.8
Goodwill
In March 2017, the information used to allocate resources and assess performance that is provided to the Company's chief operating decision maker, its Chief Executive Officer, changed to better reflect the Company's customer base and end markets. As further described in Note 6, the new reporting structure consists of four operating segments, each representing a single reporting unit: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation. Goodwill was reassigned to the new reporting units using the relative fair values and, as a result of this reassignment, an impairment assessment was performed immediately before and after the reorganization of the Company’s reporting structure. There was no goodwill impairment resulting from this assessment in the first quarter of fiscal 2017.2021 was as follows:
(In millions)
2021 (Remaining)$104.1 
2022118.1 
2023105.6 
202480.0 
202545.8 
Thereafter89.4 
Total$543.0 
Goodwill
The changes in the carrying amount of goodwill by segment for the first three quarters of fiscal 2017 were as follows:
 Buildings and Infrastructure Geospatial Resources and Utilities Transportation Total
(In millions)         
Balance as of fiscal year end 2016$663.7
 $405.1
 $217.7
 $791.1
 $2,077.6
Additions due to acquisitions2.5
 —
 89.1
 51.8
 143.4
Purchase price adjustments- prior years' acquisitions(0.1) —
 —
 —
 (0.1)
Foreign currency translation adjustments39.8
 17.5
 10.2
 7.8
 75.3
Divestiture (1)—
 (6.9) —
 —
 (6.9)
Balance as of the end of the third quarter of fiscal 2017$705.9
 $415.7
 $317.0
 $850.7
 $2,289.3
(1) In the first quarter of 2017, the Company sold its ThingMagic business, which was partfiscal 2021 were as follows:
Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
Balance as of fiscal year end 2020$1,997.4 $415.7 $453.8 $1,009.6 $3,876.5 
Foreign currency translation and other adjustments(5.0)(6.9)(4.6)(12.0)(28.5)
Balance as of the end of the first quarter of fiscal 2021$1,992.4 $408.8 $449.2 $997.6 $3,848.0 
10
Table of the Geospatial segment.Contents

NOTE 5.4. INVENTORIES
Inventories consisted of the following:
First Quarter ofFiscal Year End
As of20212020
(In millions)  
Raw materials$90.3 $95.6 
Work-in-process12.6 16.0 
Finished goods195.8 190.1 
Total inventories$298.7 $301.7 
 Third Quarter of Fiscal Year End
As of2017 2016
(In millions)   
Raw materials$83.3
 $77.9
Work-in-process13.5
 6.8
Finished goods157.9
 134.1
Total inventories$254.7
 $218.8
Finished goods includes $18.1 million and $14.4 million at the end of the third quarter of fiscal 2017 and fiscal year end 2016 for costs of sales that have been deferred in connection with deferred revenue arrangements.
NOTE 6.5. SEGMENT INFORMATION

OperatingOur operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and evaluated by the Company's Chief Executive Officer (ourdetermined based on how our chief operating decision maker or "CODM"(“CODM”) in deciding how to allocate resourcesviews and assess performance. The CODM evaluates each segment’s performance and allocates resources based on segment operating income before income taxes and corporate allocations. The Company and each of its segments employ consistent accounting policies. In each of its segments, the Company sells many individual products. For this reason it is impracticable to segregate and identify revenue for each of the individual products or group of products. Stock-based compensation is shown in the aggregate within unallocated corporate expense and is not reflected in the segment results, which is consistent with the way the CODM evaluates each segment's performance and allocates resources.

Prior to fiscal 2017, the Company operated its business in four reportable segments - Engineering and Construction, Field Solutions, Mobile Solutions, and Advanced Devices. In March 2017, the Company effected a change in the reporting of its segment financial results to better reflect the Company’s customer base and end markets. Over time, the Company has experienced significant growth both organically and through strategic business acquisitions, resulting in an increasingly diversified business model. As a result of the Company’s evolution, the CODM changed the information he regularly reviews to allocate resources and assess performance. Beginning with the first fiscal quarter of 2017, the Company reports its financial performance based on four new reportable segments - Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation.

The Company’soperations. Our reportable segments are described below:

•Buildings and Infrastructure: This segment primarily serves customers working in architecture, engineering, construction, and operations and maintenance.
•Geospatial: This segment primarily serves customers working in surveying, engineering, government, and land management.government.
•Resources and Utilities: This segment primarily serves customers working in agriculture, forestry, and utilities.
•Transportation: This segment primarily serves customers working in transportation, including transportationlong haul trucking and logistics, automotive, rail, and military aviation.

freight shipper markets.
The following Reporting Segment tables present revenue,reflect the results of our reportable operating income, depreciation expense and identifiable assets forsegments under our management reporting system. These results are not necessarily in conformity with U.S. GAAP. This is consistent with the four reportable segments. Operating income is revenue less cost of sales and operating expenses, excluding unallocated corporate expenses, restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition and divestiture items, and executive transition costs. The identifiable assets thatway the CODM views by segment are accounts receivable, inventoriesevaluates each of the segment's performance and goodwill.allocates resources.

 Reporting Segments
 Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
First Quarter of Fiscal 2021
Revenue$343.0 $181.7 $205.2 $156.6 $886.5 
Acquired deferred revenue adjustment0.1 0 0 0.1 0.2 
Segment revenue$343.1 $181.7 $205.2 $156.7 $886.7 
Operating income$97.4 $48.7 $80.1 $8.4 $234.6 
Acquired deferred revenue adjustment0.1 0 0 0.1 0.2 
Amortization of acquired capitalized commissions(1.1)0 0 (0.1)(1.2)
Segment operating income$96.4 $48.7 $80.1 $8.4 $233.6 
  Depreciation expense$1.8 $1.7 $1.5 $0.9 $5.9 
First Quarter of Fiscal 2020
Revenue$296.8 $146.2 $179.0 $170.3 $792.3 
Acquired deferred revenue adjustment0.1 0 1.3 0.3 1.7 
Segment revenue$296.9 $146.2 $180.3 $170.6 $794.0 
Operating income$62.1 $30.5 $65.6 $16.7 $174.9 
Acquired deferred revenue adjustment0.1 0 1.3 0.3 1.7 
Amortization of acquired capitalized commissions(1.4)0 0 (0.1)(1.5)
Segment operating income$60.8 $30.5 $66.9 $16.9 $175.1 
     Depreciation expense$2.1 $1.4 $1.3 $1.1 $5.9 
11
Table of Contents
 Reporting Segments
 Buildings and Infrastructure Geospatial Resources and Utilities Transportation Total
(In millions)         
Third Quarter of Fiscal 2017         
Revenue$214.5
 $169.7
 $114.4
 $171.4
 $670.0
Operating income52.2
 36.7
 26.5
 31.2
 146.6
       Depreciation expense1.4
 1.5
 0.9
 1.3
 5.1
Third Quarter of Fiscal 2016         
Revenue$189.3
 $159.9
 $87.5
 $147.4
 $584.1
Operating income40.9
 35.3
 25.2
 26.5
 127.9
       Depreciation expense1.7
 1.5
 0.5
 1.4
 5.1
First Three Quarters of Fiscal 2017         
Segment revenue$625.3
 $484.8
 $345.3
 $490.4
 $1,945.8
Operating income135.3
 94.8
 103.5
 82.2
 415.8
       Depreciation expense4.7
 4.3
 2.1
 4.1
 15.2
First Three Quarters of Fiscal 2016         
Segment revenue$565.8
 $476.0
 $300.3
 $434.6
 $1,776.7
Operating income102.2
 89.9
 90.0
 70.7
 352.8
       Depreciation expense5.4
 5.0
 1.5
 4.0
 15.9
As of the Third Quarter of Fiscal 2017         
Accounts receivable, net$117.1
 $122.4
 $69.7
 $98.0
 $407.2
Inventories57.8
 106.7
 41.5
 48.7
 254.7
Goodwill705.9
 415.7
 317.0
 850.7
 2,289.3
As of Fiscal Year End 2016         
Accounts receivable, net$104.7
 $108.3
 $65.5
 $76.3
 $354.8
Inventories51.3
 100.4
 31.0
 36.1
 218.8
Goodwill663.7
 405.1
 217.7
 791.1
 2,077.6
 Reporting Segments
 Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
As of the end of the First Quarter of Fiscal 2021
Accounts receivable, net$202.4 $110.2 $120.5 $143.5 $576.6 
Inventories57.1 127.1 51.7 62.8 298.7 
Goodwill1,992.4 408.8 449.2 997.6 3,848.0 
As of Fiscal Year End 2020
Accounts receivable, net$260.1 $117.5 $91.2 $151.7 $620.5 
Inventories59.1 120.1 49.0 73.5 301.7 
Goodwill1,997.4 415.7 453.8 1,009.6 3,876.5 
A reconciliation of the Company’sour condensed consolidated segment operating income to condensed consolidated income before income taxes iswas as follows:
 First Quarter of
 20212020
(In millions)  
Consolidated segment operating income$233.6 $175.1 
Unallocated general corporate expenses(24.4)(13.9)
Acquired deferred revenue adjustment(0.2)(1.7)
Amortization of acquired capitalized commissions1.2 1.5 
Amortization of purchased intangible assets(35.8)(40.4)
Acquisition / divestiture items(3.5)(10.8)
Stock-based compensation / deferred compensation(28.7)(4.5)
Restructuring and other exit costs(1.5)(3.2)
COVID-19 expenses0.2 (3.8)
Consolidated operating income140.9 98.3 
Total non-operating expense, net(3.5)(18.9)
Consolidated income before taxes$137.4 $79.4 
On a total Company basis, 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.
 Reporting Segments
 Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
First Quarter of Fiscal 2021
North America$199.8 $72.5 $53.6 $124.5 $450.4 
Europe94.3 60.4 105.8 19.7 280.2 
Asia Pacific43.6 37.5 21.0 7.7 109.8 
Rest of World5.4 11.3 24.8 4.8 46.3 
Total segment revenue$343.1 $181.7 $205.2 $156.7 $886.7 
First Quarter of Fiscal 2020
North America$172.1 $56.8 $53.7 $131.8 $414.4 
Europe81.6 50.7 90.4 19.1 241.8 
Asia Pacific37.1 28.7 17.5 10.5 93.8 
Rest of World6.1 10.0 18.7 9.2 44.0 
Total segment revenue$296.9 $146.2 $180.3 $170.6 $794.0 
Total revenue in the United States as included in the Condensed Consolidated Statements of Income was $406.8 million and $378.8 million for the first quarter of fiscal 2021 and 2020, respectively. No single customer or country other than the United States accounted for 10% or more of Trimble’s total revenue.
12
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Consolidated segment operating income$146.6
 $127.9
 $415.8
 $352.8
Unallocated corporate expense(23.0) (17.1) (61.8) (54.5)
Restructuring charges(1.6) (4.0) (7.8) (11.0)
Amortization of purchased intangible assets(40.0) (37.3) (109.1) (117.2)
Stock-based compensation(16.1) (13.3) (45.0) (40.0)
Amortization of acquisition-related inventory step-up(2.2) —
 (2.8) —
Acquisition and divestiture items0.3
 (0.9) (6.1) (3.4)
Executive transition costs—
 —
 —
 (1.0)
Consolidated operating income64.0
 55.3
 183.2
 125.7
Non-operating income (expense), net:5.6
 (3.1) 19.6
 (5.8)
Consolidated income before taxes$69.6
 $52.2
 $202.8
 $119.9

Table of Contents

NOTE 7.6. DEBT
Debt consisted of the following:
As ofFirst Quarter ofFiscal Year End
InstrumentDate of Issuance20212020
(In millions)Effective interest rate
Senior Notes:
   2023 Senior Notes, 4.15%, due June 2023June 20184.36%$300.0 $300.0 
   2028 Senior Notes, 4.90%, due June 2028June 20185.04%600.0 600.0 
   2024 Senior Notes, 4.75%, due December 2024November 20144.95%400.0 400.0 
Credit Facilities:
    Uncommitted facilities, floating rate1.14%97.5 255.8 
Promissory notes and other debt0.1 0.1 
Unamortized discount and issuance costs(8.2)(8.7)
Total debt1,389.4 1,547.2 
Less: Short-term debt97.5 255.8 
Long-term debt$1,291.9 $1,291.4 
 Third Quarter of Fiscal Year End
As of2017 2016
(In millions)   
Notes:   
Principal amount$400.0
 $400.0
Unamortized discount on Notes(2.3) (2.5)
Debt issuance costs(2.2) (2.4)
Credit Facilities:   
       2014 Credit Facility164.0
 94.0
       Uncommitted facilities135.0
 130.0
Promissory notes and other debt1.3
 0.8
Total debt695.8
 619.9
Less: Short-term debt135.4
 130.3
Long-term debt$560.4
 $489.6
Notes
In November 2014, the Company issued $400.0 millionEach of Senior Notes (the "Notes") in a public offering registeredour debt agreements requires us to maintain compliance with the Securities and Exchange Commission. The Notes mature on December 1, 2024 and accrue interest at a ratecertain debt covenants, all of 4.75% per annum, payable semiannually in arrears in cash on December 1 and June 1 of each year. The Notes are classified as long-term in the Condensed Consolidated Balance Sheet and are presented net of unamortized discount and debt issuance costs. The discount and debt issuance costs are being amortized to interest expense using the effective interest rate method over the term of the Notes.
In connectionwhich we complied with the Notes offering, Trimble entered into an Indenture with U.S. Bank National Association, as trustee. Trimble may redeem the Notes at its option at any time, in accordance with the terms and conditions set forth in the Indenture. The Indenture contains no financial covenants. Further details regarding the terms of the Notes, including the redemption rights, and the Indenture, are provided in the Company’s fiscal 2016 Annual Report on Form 10-K.
Credit Facilities
2014 Credit Facility
In November 2014, the Company entered into a five-year credit agreement with a group of lenders, which provides for an unsecured revolving loan facility of $1.0 billion (the "2014 Credit Facility"). Under the 2014 Credit Facility, the Company may borrow, repay and reborrow funds under the revolving loan facility until its maturity on November 24, 2019, at which time the revolving facility will terminate, and all outstanding loans, together with all accrued and unpaid interest, must be repaid. The interest rate on the non-current debt outstanding under the 2014 Credit Facility was 2.48% and 1.80% at the end of the thirdfirst quarter of fiscal 2017 and fiscal year end 2016, respectively, and is payable on a quarterly basis. Amounts not borrowed under the revolving facility will be subject to a commitment fee.2021.
The outstanding balance of $164.0 million as of the end of the third quarter of fiscal 2017 and $94.0 million at the end of fiscal 2016 are classified as long-term debt in the Condensed Consolidated Balance Sheet. Unamortized debt issuance costs associated with the 2014 Credit Facility are presented as assets in the Condensed Consolidated Balance sheet and are being amortized to interest expense using the effective interest rate method over the term of the 2014 Credit Facility.
In February 2016, the Company entered into an amendment to the 2014 Credit Facility to facilitate the Company's reincorporation from California to Delaware and to effect other non-financial terms. In August 2016, the Company entered into a second amendment to revise a definition used in determining when a change of control of the Company may occur.
The Company was in compliance with all covenants pertaining to the 2014 Credit Facility at the end of the third quarter of fiscal 2017.
Uncommitted Facilities
The Company also has two $75 million revolving credit facilities which are uncommitted (the "Uncommitted Facilities"). The Uncommitted Facilities may be called by the lenders at any time, have no covenants and no specified expiration date. The $135.0

million outstanding at the end of the third quarter of fiscal 2017 and the $130.0 million outstanding at the end of fiscal 2016 under the Uncommitted Facilities are classified as short-term debt in the Condensed Consolidated Balance Sheet. The weighted average interest rate on the Uncommitted Facilities was 2.11% at the end of the third quarter of fiscal 2017 and 1.65% at the end of fiscal 2016.
Promissory Notes and Other Debt Maturities
At the end of the thirdfirst quarter of fiscal 2017 and the year end of fiscal 2016, the Company had promissory notes and other debt totaling approximately $1.3 million and $0.8 million, respectively, of which $0.9 million and $0.5 million, respectively, was classified as long-term debt in the Condensed Consolidated Balance Sheet.
Debt Maturities
At the end of the third quarter of fiscal 2017, the Company's2021, our debt maturities based on outstanding principal were as follows (in millions):
Year Payable
2021 (Remaining)$97.5 
20220 
2023300.1 
2024400.0 
20250 
Thereafter600.0 
Total$1,397.6 
Year Payable 
2017 (Remaining)$135.4
20180.3
20190.3
2020164.3
2021—
Thereafter400.0
Total$700.3
Senior Notes

NOTE 8. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The Company started to invest in available-for-sale securitiesAll series of senior notes in the third quarterabove table bear interest that is payable semi-annually in June and December of fiscal 2016. The following table summarizeseach year. For the Company’s available-for-sale securities2023 and 2028 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.
Senior notes are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. We may redeem the notes of each series of senior notes at our option in whole or in part at any time. Such indenture also contains covenants limiting our ability to create certain liens, enter into sale and leaseback 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 Facilities
At the end of the thirdfirst quarter of fiscal 20172021, we had access to a $1.25 billion unsecured revolving credit facility maturing in May 2023, which may be used for working capital and atgeneral corporate purposes, including permitted acquisitions. As part of the endcredit facility, we may request an additional term loan facility up to $500.0 million prior to the maturity of fiscal 2016.the credit facility and subject to approval.
Uncommitted Facilities
 Third Quarter of Fiscal 2017 At the end of Fiscal 2016
(In millions)   
Available-for-sale securities:   
  U.S. Treasury securities$11.6
 $11.7
  Non-U.S. government securities2.1
 —
  Municipal debt securities—
 10.0
  Corporate debt securities72.1
 31.7
Time deposit—
 2.4
  Commercial paper93.5
 77.5
       Total available-for-sale securities$179.3
 $133.3
    
Reported as:   
Cash equivalents$25.1
 $22.2
Short-term investments154.2
 111.1
    Total$179.3
 $133.3

The Company realized $0.5 million and $1.5 million gains on its available-for-sale securities for the third quarter and the first three quarters of fiscal 2017, respectively. The net unrealized loss was $0.1 million which was included in Accumulated other comprehensive loss as ofAt the end of the third quarter of 2017.

The following table presents the contractual maturities of the Company's available-for-sale investments at the end of the thirdfirst quarter of fiscal 2017:

 Third Quarter of Fiscal 2017
(In millions)Amortized Cost
Due in less than 1 year$175.0
Due in 1 to 5 years4.3
Due in 5-10 years—
Due after 10 years—
     Total$179.3

The Company’s available-for-sale securities2021, we had 2 $75.0 million, 1 €100.0 million, and 1 £55.0 million revolving credit facilities, which are liquid anduncommitted (the “uncommitted facilities”). Generally, these uncommitted facilities may be soldredeemed upon demand. Borrowings under uncommitted facilities are classified as short-term debt in the futureCondensed Consolidated Balance Sheet.
13
Table of Contents
For further information, refer to fund future operating needs. As a result, the Company recorded all of its available-for-sale securities, not classified as Cash equivalents, in Short-term investments regardlessNote 6 “Debt” of the contractual maturity date of the securities.2020 Form 10-K.

NOTE 9.7. FAIR VALUE MEASUREMENTS
The Company determinesfollowing table summarizes the fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters. Where observable prices or inputs are not available, valuation models are applied. Hierarchical levels, defined by the guidance on fair value measurements, are directly related to the amountvalues of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows:
Level I—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities.
Level II—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level III—Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
Fair Value on a Recurring Basis

Assets and liabilities measuredfinancial 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 the First Quarter of Fiscal 2021Fair Values at the end of Fiscal 2020
Quoted prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable InputsQuoted prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
(In millions)(Level I)(Level II)(Level III)Total(Level I)(Level II)(Level III)Total
Assets
Deferred compensation plan (1)
$42.7 $0 $0 $42.7 $41.9 $0 $0 $41.9 
Derivatives (2)
0 0.2 — 0.2 0 0.9 0 0.9 
Total assets measured at fair value$42.7 $0.2 $0 $42.9 $41.9 $0.9 $0 $42.8 
Liabilities
Deferred compensation plan (1)
$42.7 $0 $0 $42.7 $41.9 $0 $0 $41.9 
Derivatives (2)
0 0.3 0 0.3 0 0.5 0 0.5 
Contingent consideration (3)
0 0 13.6 13.6 0 0 12.3 12.3 
Total liabilities measured at fair value$42.7 $0.3 $13.6 $56.6 $41.9 $0.5 $12.3 $54.7 
(1) Represents a self-directed, non-qualified deferred compensation plan for certain executives and other highly compensated employees that are categorizedincluded in Other non-current assets and Other non-current liabilities on our Condensed Consolidated Balance Sheets, respectively. The plan is invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets.
(2) Represents forward currency exchange contracts that are included in Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets, respectively.
(3) Represents arrangements to pay the tables belowformer owners of certain companies that we acquired that are included in Other current liabilities on our Condensed Consolidated Balance Sheets. The fair values are estimated using scenario-based methods or option pricing methods based upon the lowest level of significant input to the valuations.
estimated future revenues, gross margins, or other milestones.
 Fair Values as of the end of the Third Quarter of Fiscal 2017 Fair Values as of Fiscal Year End 2016
(In millions)Level I Level II Level III Total Level I Level II Level III Total
Assets               
  Available-for-sale securities:               
    U.S. Treasury securities (1)$—
 $11.6
 $—
 $11.6
 $—
 $11.7
 $—
 $11.7
  Non-U.S. government securities (1)—
 2.1
 —
 2.1
 —
 —
 —
 —
    Municipal debt securities (1)—
 —
 —
 —
 —
 10.0
 —
 10.0
    Corporate debt securities (1)—
 72.1
 —
 72.1
 —
 31.7
 —
 31.7
  Time deposit (1)—
 —
 —
 —
 —
 2.4
 —
 2.4
    Commercial paper (1)—
 93.5
 —
 93.5
 —
 77.5
 —
 77.5
       Total available-for-sale securities—
 179.3
 —
 179.3
 —
 133.3
 —
 133.3
Deferred compensation plan assets (2)25.9
 —
 —
 25.9
 22.6
 —
 —
 22.6
Derivative assets (3)—
 0.3
 —
 0.3
 —
 0.2
 —
 0.2
Contingent consideration assets (4)—
 —
 7.0
 7.0
 —
 —
 7.0
 7.0
Total assets measured at fair value$25.9
 $179.6
 $7.0
 $212.5
 $22.6
 $133.5
 $7.0
 $163.1
Liabilities               
Deferred compensation plan liabilities (2)$25.9
 $—
 $—
 $25.9
 $22.6
 $—
 $—
 $22.6
Derivative liabilities (3)—
 2.9
 —
 2.9
 —
 0.1
 —
 0.1
Contingent consideration liabilities (5)—
 —
 17.2
 17.2
 —
 —
 4.5
 4.5
Total liabilities measured at fair value$25.9
 $2.9
 $17.2
 $46.0
 $22.6
 $0.1
 $4.5
 $27.2
(1)The Company’s available-for sale securities are valued using readily available pricing sources for comparable instruments, or model-driven valuations using significant inputs derived from or corroborated by observable market data, including yield curves and credit ratings.
(2)The Company maintains a self-directed, non-qualified deferred compensation plan for certain executives and other highly compensated employees. The plan assets and liabilities are invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets. Deferred compensation plan assets and liabilities are included in Other non-current assets and Other non-current liabilities, respectively, on the Company's Condensed Consolidated Balance Sheets.
(3)Derivative assets and liabilities primarily represent forward currency exchange contracts. The Company typically enters into these contracts to minimize the short-term impact of foreign currency exchange rates on certain trade and inter-company receivables and payables. The fair values are determined using inputs based on observable quoted prices. Derivative assets and liabilities are included in Other current assets and Other current liabilities on the Company's Condensed Consolidated Balance Sheets.
(4)Contingent consideration assets represent arrangements for buyers to pay the Company for certain businesses that it has divested. The fair values are determined based on the Company's expectations of future receipts and the effects of the application of discount rates. The minimum amount to be received under these arrangements is $3.5 million. Contingent consideration assets are included in Other non-current assets on the Company's Condensed Consolidated Balance Sheets.
(5)Contingent consideration liabilities represent arrangements to pay the former owners of certain companies that Trimble acquired. The undiscounted maximum payments under the arrangements is $60.1 million at the end of the third quarter of fiscal 2017. The fair values are estimated using scenario-based methods or option pricing methods based upon estimated future revenues, gross margins or other milestones. Contingent consideration liabilities are included in Other current liabilities and Other non-current liabilities on the Company's Condensed Consolidated Balance Sheets.
Additional Fair Value Information
The following table provides additionaltotal estimated fair value information relating to the Company’sof all outstanding financial instruments:

 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
As ofThird Quarter of Fiscal 2017 Fiscal Year End 2016
(In millions)       
Liabilities:       
Notes$400.0
 $427.1
 $400.0
 $410.6
2014 Credit Facility164.0
 164.0
 94.0
 94.0
Uncommitted facilities135.0
 135.0
 130.0
 130.0
Promissory notes and other debt1.3
 1.3
 0.8
 0.8
instruments that are not recorded at fair value on a recurring basis (debt) was approximately $1.5 billion and $1.8 billion at the end of the first quarter of fiscal 2021 and at the end of fiscal 2020, respectively.
The fair value of the Notessenior notes was determined based on observable market prices in less active markets and is categorized accordingly as Level II in the fair value hierarchy.II. The fair value of the bank borrowings anduncommitted facilities, promissory notes, has been calculated using an estimate ofand other debt are all short-term in nature; therefore, the interest rate the Company would have had to pay on the issuance of notes with a similar maturity and discounting the cash flows at that rate, and is categorized as Level IIamounts reported in theour Condensed Balance Sheet approximate their fair value hierarchy.value. The fair values do not give an indication ofindicate the amount that the Companywe would currently have to pay to extinguish any of this debt.
NOTE 8. DEFERRED COSTS TO OBTAIN CUSTOMER CONTRACTS
Deferred costs to obtain customer contracts at the end of the first quarter of fiscal 2021 and fiscal year end 2020 were $52.8 million and $51.3 million, respectively. These costs are included in Other non-current assets in the Condensed Consolidated Balance Sheets.
Amortization expense related to deferred costs to obtain customer contracts for the first quarter of fiscal 2021 and 2020 was $6.1 million and $5.5 million, respectively. This expense is included in Sales and marketing expenses in the Condensed
14
Table of Contents
Consolidated Statements of Income. There was 0 impairment loss related to the deferred costs to obtain customer contracts for either period presented.
NOTE 10.9. PRODUCT WARRANTIES
The Company accruesWe accrue for warranty costs as part of itsour cost of sales based on associated material product costs, technical support, labor costs, and costs incurred by third parties performing work on the Company’sour behalf. The Company’sOur expected future costs are primarily estimated based upon historical trends in the volume of product returns within the warranty period and the costs to repair or replace the equipment. When products sold include warranty provisions, they are covered by a warranty for periods ranging generally from 1one year to 2two years.
WhileAccrued warranty expense at the Company engagesend of the first quarter of fiscal 2021 and fiscal year end 2020, was $15.0 million and $13.8 million, respectively, and is included in extensive product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, its warranty obligation is affected by product failure rates, material usage and service delivery costs incurredOther current liabilities in correcting a product failure. Should actual product failure rates, material usage, or service delivery costs differ from the estimates, revisionsour Condensed Consolidated Balance Sheet.
NOTE 10. DEFERRED REVENUE AND REMAININGPERFORMANCE OBLIGATIONS
Deferred Revenue
Changes to the estimated warranty accrual and related costs may be required.
Changes in the Company’s product warranty liabilityour deferred revenue during the first three quartersquarter of fiscal 2017 are2021 and 2020 were as follows:
  First Quarter of
(In millions)20212020
Beginning balance of the period$613.8 $541.9 
Revenue recognized(247.3)(201.8)
Net deferred revenue activity252.4 211.4 
Ending balance of the period$618.9 $551.5 
Remaining Performance Obligations
As of the end of the first quarter of fiscal 2021, approximately $1.5 billion of revenue is expected to be recognized from remaining performance obligations for which goods or services have not been delivered, primarily subscription and software maintenance, and to a lesser extent, hardware and professional services contracts. We expect to recognize $1.1 billion or 74% of our remaining performance obligations as revenue during the next 12 months, and the remainder thereafter.
15
(In millions) 
Balance as of fiscal year end 2016$17.2
Acquired warranties0.5
Accruals for warranties issued14.1
Changes in estimates(0.5)
Warranty settlements (in cash or in kind)(13.5)
Balance as of the end of the third quarter of fiscal 2017$17.8
Table of Contents
NOTE 11. EARNINGS PER SHARE
Basic earnings per share is computed by dividing Netnet income attributable to Trimble Inc. by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing Netnet income attributable to Trimble Inc.byInc. by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan, restricted stock units, and contingently issuable shares. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.
The following table shows the computation of basic and diluted earnings per share:

 First Quarter of
 20212020
(In millions, except per share amounts)  
Numerator:
Net income attributable to Trimble Inc.$114.5 $61.9 
Denominator:
Weighted average number of common shares used in basic earnings per share251.1 249.9 
Effect of dilutive securities3.2 1.8 
Weighted average number of common shares and dilutive potential common shares used in diluted earnings per share254.3 251.7 
Basic earnings per share$0.46 $0.25 
Diluted earnings per share$0.45 $0.25 
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions, except per share amounts)       
Numerator:       
Net income attributable to Trimble Inc.$55.7
 $39.2
 $156.1
 $94.7
Denominator:       
Weighted average number of common shares used in basic earnings per share252.6
 249.7
 252.5
 250.5
Effect of dilutive securities5.3
 3.5

4.5

3.2
Weighted average number of common shares and dilutive potential common shares used in diluted earnings per share257.9
 253.2
 257.0
 253.7
Basic earnings per share$0.22
 $0.16
 $0.62
 $0.38
Diluted earnings per share$0.22
 $0.15
 $0.61
 $0.37
For the thirdfirst quarter of fiscal 2017, the2021 and 2020, 0.1 million and 0.5 million, respectively, of shares of outstanding stock optionswas excluded were de minimis. For the third quarter of fiscal 2016, the Company excluded 4.0 million shares of outstanding stock options from the calculation of diluted earnings per share because their effect would have been antidilutive. For the first three quarters of fiscal 2017 and 2016, the Company excluded 0.5 million and 4.5 million shares of outstanding stock options, respectively, from the calculation of diluted earnings per share because their effect would have been antidilutive.
NOTE 12. INCOME TAXES
For the third quarter of fiscal 2017, the Company’sOur effective income tax rate for the first quarter of fiscal 2021 was 20%16.6%, as compared to 25%22.0% in the corresponding period in fiscal 2016,2020. The decrease was primarily due to a favorableone-time tax benefit from foreign income tax refunds and a change in the geographic mix of pre-tax incomeincome.
We and stock-based compensation tax benefits. For the first three quarters of fiscal 2017, the Company's effective income tax rate was 23% as compared to 21% in the corresponding period in fiscal 2016, primarily due to a one time discrete tax benefit from the divestiture of the Advance Public Safety business in the second quarter of 2016, partially offset by a favorable change in the geographic mix of pre-tax income in fiscal 2017.
Historically, the Company's effective tax rate has been lower than the U.S. federal statutory rate of 35% primarily due to the tax rates associated with certain earnings from operations in lower-tax jurisdictions. The Company has not provided for U.S. taxes on such earnings due to the indefinite reinvestment of such earnings outside the U.S.
The Company and itsour subsidiaries are subject to U.S. federal, and state, and foreign income tax. The Company is currentlytaxes. Currently, we are in different stages of multiple year examinations by the Internal Revenue Service (the "IRS") as well as various state and foreign taxing authorities.
In the first quarter of fiscal 2015, the Company received a Notice of Proposed Adjustment from the IRS for the fiscal years 2010 and 2011. The proposed adjustments primarily relate to the valuations of intercompany transfers of acquired intellectual property. The assessments of tax, interest and penalties for the years in question total $67.0 million. The Company does not agree with the IRS position and filed a protest with the IRS Appeals Office in April 2015. The IRS appeals process commenced in March 2016. Although the Company continues to While we believe in the merits of its positions, during the fourth quarter of fiscal 2016, the Company submitted a written proposal to the IRS to settle certain aspects of the assessments constituting $15.8 million of the total $67.0 million assessment. The Company intends to vigorously contest the IRS position on the remaining items, and believes that its existingour reserves are adequate.
Although timingmore likely than not to be adequate to cover final resolution of the resolution and/or closure of audits is not certain, the Company believesall open tax matters, it is reasonably possible that its gross unrecognized tax benefits could decrease (whether by payment, release or a combination of both) in the next 12 months by up to $6.2 million primarilyfuture obligations related to the IRS partial settlement discussed above.these matters could arise.
The unrecognizedUnrecognized tax benefits of $70.9$48.3 million and $60.5$47.8 million as of the end of the thirdfirst quarter of fiscal 20172021 and fiscal year end 2016,2020, respectively, if recognized, would favorably affect the effective income tax rate in future periods. Unrecognized tax benefits are recorded primarily in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.
The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense.  As of the end of the thirdfirst quarter of fiscal 20172021 and fiscal year end 2016, the Company had2020, we accrued interest and penalties of $10.6 million and $9.3$9.6 million, respectively, for interest and penalties, which are recorded in Other non-current liabilitiesrespectively. Although timing of the resolution and/or closure of audits is not certain, we do not believe that our gross unrecognized tax benefits would materially change in the accompanying Condensed Consolidated Balance Sheets.next twelve months.

NOTE 13. COMMITMENTS AND CONTINGENCIES
Operating Leases and Other Commitments
The estimated future minimum operating lease commitments as of the end of the third quarter of fiscal 2017 are as follows (in millions):
2017 (Remaining)$9.8
201835.1
201926.8
202020.2
202116.0
Thereafter42.0
Total$149.9
As of the end of the thirdfirst quarter of fiscal 2017, the Company2021, we had unconditional purchase obligations of approximately $192.6$286.4 million. These unconditional purchase obligations primarily represent open non-cancelablenon-cancellable purchase orders for material purchases with the Company’sour vendors. Purchase obligations exclude agreements that are cancelable without penalty.

Additionally, the Company has certain acquisitions which include additional earn-out cash payments based on estimated future revenues, gross margins or other milestones. As of the end of the third quarter of fiscal 2017, the Company had $17.2 million included in Other current liabilities and Other non-current liabilities related to these earn-outs, representing the fair value of the contingent consideration.
Litigation
On September 2, 2011, Recreational Data Services, LLC filed a lawsuit in the Superior Court for the State of Alaska in Anchorage against Trimble Navigation Limited, Cabela’s Incorporated, AT&T Mobility, and Alascom, Inc., alleging breach of contract, breach of fiduciary duty, interference with contract, promissory estoppel, fraud, and negligent misrepresentation. The case was tried in front of a jury in Alaska beginning on September 9, 2014. On September 26, 2014, the jury returned a verdict in favor of the plaintiff and awarded the plaintiff damages of $51.3 million. On January 29, 2015, the court granted our Motion for Judgment Notwithstanding the Verdict, and on March 18, 2015, the Court awarded the Company a portion of its incurred attorneys’ fees and costs, and entered Final Judgment in the Company’s favor in the amount of $0.6 million.  The Final Judgment also provides that the plaintiff take nothing on its claims.  On April 17, 2015, the plaintiff filed a Notice of Appeal to the Alaska Supreme Court. On March 24, 2017, the Alaska Supreme Court affirmed, in part, and reversed, in part, the trial court's decision.  The Alaska Supreme Court affirmed the trial court's determination that Plaintiff had not proven damages and was not entitled to recover any lost profits, but remanded the case to the trial court for an award of nominal damages to Plaintiff.  On April 17, 2017, Plaintiff filed a Motion for Rehearing with the Alaska Supreme Court. The Alaska Supreme Court has denied rehearing on the finding that Plaintiff had failed to prove damages, returning the case to the trial court to award nominal damages. 
From time to time, the Company is alsowe are involved in litigation arising out ofin the ordinary course of itsour business. There are no other material legal proceedings, other than ordinary routine litigation incidental to the business, to which the Companythat we or any of itsour subsidiaries is a party, or of whichthat any of the Company'sour or itsour subsidiaries' property is subject.

16

Table of Contents
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to the “safe harbor” created by those sections. These statements include, among other things:
•impact of the COVID-19 pandemic, including upon global or local macroeconomic conditions, our results of operations, and estimates or judgments;
•supply chain shortages and disruptions, resulting in increases in costs and reduced revenue;
•seasonal fluctuations in our hardware revenue, sales to U.S. governmental agencies, and expectations that we will experience less seasonality in the future;
•changes in global macroeconomic conditions;
•the portion of our revenue comingexpected to come from sales to customers located in countries outside of the U.S.;
seasonal fluctuations in our construction purchases, sales to U.S. governmental agencies, agricultural equipment business revenues, global macroeconomic conditions, and expectations that we may experience less seasonality in the future;
•our plans to continue to invest in research and development to actively develop and introduce new products and to deliver targeted solutions to the markets we serve;
•a continued shift in revenue towards a more significant mix of software and recurring revenue, including subscription, maintenance and support revenues, and services;
•our belief that increases in recurring revenue, including from our software and subscription solutions, will provide us with enhanced business visibility over time;
•our belief that our cash and cash equivalents, and short-term investments, together with borrowings under the commitments for our 2014 Credit Facility,credit facilities and senior notes, will be sufficient to meet our anticipated operating cash needs, debt service, and planned capital expenditures and stock repurchases under the stock repurchase program for at least the next twelve months;
•any anticipated benefits to us from our acquisitions and our ability to successfully integrate the acquired businesses;
•fluctuations in interest rates and foreign currency exchange rates; and
•our belief that our gross unrecognized tax benefits will not materially change in the next twelve months;
•our growth strategy, including our focus on historically underserved large markets, the relative importance of organic growth versus strategic acquisitions, and the reasons that we acquire businesses.businesses; and
•our ability to convert backlog to revenue.
The forward-looking statements regarding future events and the future results of Trimble Inc. ("Trimble"(“the Company” or "the Company"“we” or "we"“our” or "our" or "us"“us”) are based on current expectations, estimates, forecasts, and projections about the industries in which Trimble operateswe operate, our current tax structure, including where our assets are deemed to reside for tax purposes, and the beliefs and assumptions of the management of Trimble.our management. Discussions containing such forward-looking statements may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.section of this Form 10-Q. In some cases, forward-looking statements can be identified by terminology such as "may, " "will, " "should, " "could, " "predicts, " "potential, " "continue, " "expects, " "anticipates, " "future, " "intends, " "plans, " "believes, " "estimates, "“may,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These forward-looking statements involve certain risks and uncertainties that could cause actual results, levels of activity, performance, achievements, and events to differ materially from those implied by such forward-looking statements, including but not limited to those discussed in "Risk Factors" belowthis report under the section entitled “Risk Factors” and elsewhere, in this report, as well as in the Company’s Annual Report on Form 10-K for fiscal year 2016 and in other reports Trimble fileswe file with the Securities and Exchange Commission (“SEC”), specifically the most recent Form 10-K for fiscal 2020 (the “2020 Form 10-K”) and in other reports we file with the SEC, each as it may be amended from time to time. These forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q. We reserve the right to update these forward-looking statements for any reason, including the occurrence of material events, but assume no duty to update these statements to reflect subsequent events.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management'sThere have been no material changes to our critical accounting policies and estimates during the first quarter of fiscal 2021. For a complete discussion of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our Condensed Consolidated Financial Statements. The preparationOperations” section of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying Notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Management believes that there have been no significant changes during the third quarter of fiscal 2017 to the items that we disclosed as our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2016 Annual Report on2020 Form 10-K.

17
Table of Contents
RECENT ACCOUNTING PRONOUNCEMENTS
For a summary of recent accounting pronouncements applicable to our Consolidated Financial Statements, see Note 2 to our Condensed Consolidated Financial Statements, in Itemrefer to Note 1 which is incorporated herein by reference.“Overview and Accounting Policies” of this Form 10-Q.
EXECUTIVE LEVEL OVERVIEW
Trimble began operations in 1978 and was originally incorporated in California as Trimble Navigation Limited in 1981. On October 1, 2016, Trimble Navigation Limited changed its name to Trimble Inc. ("Trimble" or the "Company") and changed its state of incorporation from the State of California to the State of Delaware.

In March 2017, we changed the reporting of our segment financial results to better reflect our customer base and end markets. Beginning with the first quarter of fiscal 2017, weWe are reporting our financial performance, including revenues and operating income, based on four new reportable segments: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation. Comparative period financial information by reportable segment has been recast to conform with the current presentation.
The Buildings and Infrastructure segment primarily serves customers working in architecture, engineering, construction, and operations and maintenance. The Geospatial segment primarily serves customers working in surveying, engineering, government, and land management. The Resources and Utilities segment primarily serves customers working in agriculture, forestry, and utilities. The Transportation segment primarily serves customers working in transportation, including transportation and logistics, automotive, rail, and military aviation.

Trimble is a leading provider of technology solutions that optimize theenable professionals and field mobile workers to improve or transform their work processes of office and mobile field professionals around the world.processes. Our comprehensive work process solutions are used across a range of industries including agriculture, architecture, building construction, civil engineering, construction, government,geospatial, survey and mapping, agriculture, natural resources, utilities, transportation, and utilities. Representative Trimblegovernment. Our representative customers include construction owners, contractors, engineering and construction firms, contractors, surveying companies, farmers and agricultural companies, transportationenergy and logisticsutility companies, energy, mining and utilitytrucking companies, and state, federal, and municipal governments.

Trimble transforms the way the world works by delivering products and services that connect the physical and digital worlds. Core technologies in positioning, modeling, connectivity and data analytics enable customers to improve productivity, quality, safety and sustainability. The integration of sensors, software, connectivity, and information in our portfolio gives us the unique ability to provide an information model specific to the customer’s workflow. For example, in construction, our strategy is centered on the concept of a “constructible model” which is at the center of our “Connected Construction Site” solutions which provide real-time, connected, and cohesive information environments for the design, build, and operational phases of projects. In agriculture, we continue to develop “Connected Farm” solutions to optimize operations across the agriculture workflow. In transportation and logistics, our “Connected Supply Chain” solutions provide transportation companies with tools to enhance fuel efficiency, safety, and transparency through connected vehicles and fleets across the enterprise.
Our growth strategy is centered on multiple elements:
•Executing on our Connect and Scale 2025 strategy;
•Focus on attractive markets with significant growth and profitability potential - We focus on large markets historically underserved by technology that offer significant potential for long-term revenue growth, profitability, and market leadership. Our core industries such as construction, agriculture, and transportation markets are each multi-trillion dollar global industries, which operate in increasingly demanding environments, with technology adoption in the early phases relative to other industries. With the emergence of mobile computing capabilities, the increasing technological know-how of end users and the compelling return on investment to our customers, we believe many of our markets are ripe for substituting Trimble’s technology and solutions in place of traditional operating methods.
potential;
•Domain knowledge and technological innovation that benefit a diverse customer base - We have over time redefined our technological focus from hardware-driven point solutions to integrated work process solutions by developing domain expertise and heavily reinvesting in R&D and acquisitions. We have been spending approximately 14% to 15% of revenue over the past several years on R&D and currently have over 1,200 unique patents. We intend to continue to take advantage of our technology portfolio and deep domain knowledge to quickly and cost-effectively deliver specific, targeted solutions to each of the vertical markets we serve. We look for opportunities where the opportunity for technological change is high and which have a requirement for the integration of multiple technologies into complete vertical solutions.
base;
•Increasing focus on software and services - Software and services are increasingly important elements of our solutions and are core to our growth strategy. Trimble has an open application programming interface ("API") philosophy and open vendor environment which leads to increased adoption of our software offerings. We believe that increased recurring revenue from these solutions will provide us with enhanced business visibility over time. Professional services constitute an additional growth channel that helps our customers integrate and optimize the use of our offerings in their environment.
services;
•Geographic expansion with localization strategy - We view international expansion as an important element of our strategy and we continue to position ourselves in geographic markets that will serve as important sources of future growth. We currently have a physical presence in over 40 countries and distribution channels in over 100 countries. In third quarter of 2017, approximately 50% of our sales were to customers located in countries outside of the U.S.
strategy;
•Optimized go to marketgo-to-market strategies to best access our markets - We utilize vertically-focused distribution channels that leverage domain expertise to best serve the needs of individual markets domesticallymarkets; and abroad. These channels include independent dealers, joint ventures, original equipment manufacturers ("OEM") sales, and distribution alliances with key partners, such as CNH Global, Caterpillar, and Nikon, as well as direct sales to end-users, that provide us with broad market reach and localization capabilities to effectively serve our markets.
•Strategic acquisitions - Organic growth continues to be our primary focus, while acquisitions serve to enhance our market position. We acquire businesses that bring domain expertise, technology, products, or distribution capabilities that augment
acquisitions.

our portfolio and allow us to penetrate existing markets more effectively, or to establish a market beachhead. Our success in targeting and effectively integrating acquisitions is an important aspect of our growth strategy.
Trimble’s focus on these growth drivers has led over time to growth in revenue and profitability as well asand an increasingly diversified business model. SoftwareWe continue to experience a shift in revenue towards a more significant mix of software, recurring revenue, and services, growthwhich represented 56% of total revenue for the first quarter of fiscal 2021 and is driving increased recurring revenue, leading to improved visibility in someour businesses. Additionally, our success in driving annualized recurring revenue (“ARR”)(1) growth of 9% year-over-year for fiscal 2021 has positively impacted our businesses.revenue mix and growth over time. As our solutions have expanded, our go-to-market model has also evolved with a balanced mix between direct, distribution, and OEM customers andas well as an increasing number of enterprise level customer relationships.

ForWe continue to experience strong demand for our hardware and associated software offerings. However, due to global supply chain issues including part shortages, increased freight costs, and labor constraints caused by the third quarter of fiscal 2017, total revenue increased by $85.9 million compared to the third quarter of fiscal 2016. By geography, North America and Europe were significantly up and to a lesser extent, Asia-Pacific and the restlingering impacts of the world were up year over year as well. Revenue growth occurred across hardware, software, recurring revenue, and services, driven both by organic growth and acquisitions.
During the first three quarters of fiscal 2017,COVID-19 pandemic, we acquired ten businesses,are experiencing extended delivery times for total cash consideration of $333.9 million, in our Resources and Utilities, Transportation, and Building and Infrastructure segments. The largest acquisition was Müller-Elektronik, a privately-held German company specializing in implement control and precision farming solutions. Our Condensed Consolidated Statements of Income include the operating results of the businesses from the dates of acquisition.
In addition, in the first quarter of 2017, we sold our ThingMagic business. Our ThingMagic business provided ultra-high frequency radio frequency identification ("RFID") modules and finished RFID readers to OEMs in the medical and advanced industrial markets and was part of the Geospatial segment.
Seasonality of Business
Construction purchases, within our Buildings and Infrastructure segment, tend to occur in early spring, and U.S. governmental agencies tend to utilize funds available at the end of the government’s fiscal year for additional purchases at the endkey components of our third fiscal quarter in September of each year. Our agricultural equipment business revenues, within hardware products and increased costs. To the extent that these supply chain issues continue to exist, our Resourcescosts will increase, and Utilities segment, have historically been the highest in the first quarter, followed by the second quarter, reflecting buying in anticipation of the spring planting season in the Northern hemisphere. However, overall as a company, as a result of diversification of our business across segments and the increased impact of subscription revenues, we may experience less seasonalitydelays in shipping our products, which may reduce our revenue.
(1) Refer to “Supplemental Disclosure of Annualized Recurring Revenue and Non-GAAP Financial Measures” section of this Form 10-Q for definition.
COVID-19 UPDATE
For a discussion of the future. Changes in global macroeconomic conditions could also impactimpacts on and risks to our business from COVID-19, refer to “Risk Factors” section of the level2020 Form 10-K.
18
Table of seasonality we experience.Contents

RESULTS OF OPERATIONS
Overview
The following table is a summary ofshows revenue by category, gross margin and gross margin as a percentage of revenue, operating income and operating income as a percentage of revenue, diluted earnings per share, and annualized recurring revenue compared for the periods indicatedindicated:
 First Quarter of
 20212020Change
(In millions, except per share amounts)  
Revenue:
Product$539.4 $463.8 16%
Service162.3 162.4 —%
Subscription184.8 166.1 11%
Total revenue$886.5 $792.3 12%
Gross margin$493.3 $441.0 12%
Gross margin as a % of revenue55.6 %55.7 %
Operating income$140.9 $98.3 43%
Operating income as a % of revenue15.9 %12.4 %
Diluted earnings per share$0.45 $0.25 80%
Non-GAAP revenue (1)
$886.7 $794.0 12%
Non-GAAP operating income (1)
$209.2 $161.2 30%
Non-GAAP operating income as a % of Non-GAAP Revenue(1)
23.6 %20.3 %
Non-GAAP diluted earnings per share (1)
$0.66 $0.49 35%
Annualized Recurring Revenue (“ARR”) (1)
$1,319.2 $1,215.0 9%
(1) Refer to “Supplemental Disclosure of Annualized Recurring Revenue and should be read in conjunctionNon-GAAP Financial Measures” of this Form 10-Q for definitions.
First Quarter of Fiscal Year 2021 Compared with the narrative descriptions below:
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Revenue:       
Product$446.1
 $384.9
 $1,297.1
 $1,185.5
Service115.0
 105.6
 331.8
 316.9
Subscription108.9
 93.6
 316.9
 274.3
Total revenue$670.0
 $584.1
 $1,945.8
 $1,776.7
Gross margin$349.5
 $309.0
 $1,022.6
 $925.2
Gross margin %52.2% 52.9% 52.6% 52.1%
Operating income$64.0
 $55.3
 $183.2
 $125.7
Operating income %9.6% 9.5%
9.4%
7.1%
First Quarter of Fiscal Year 2020
Revenue
ForDuring the thirdfirst quarter of fiscal 2017,2021, total revenue increased $85.9$94.2 million or 15% compared to the third quarter of fiscal 2016. Product12%.
By revenue category, product revenue increased $61.2$75.6 million or 16%, service revenue increased $9.4decreased $0.1 million or 9%less than 1%, and subscription revenue increased $15.3$18.7 million or 16%11%. In the first three quarters of fiscal 2017, total revenue increased $169.1 million or 10% compared to the

first three quarters of fiscal 2016. Product revenue increased $111.6 million or 9%, service revenue increased $14.9 million or 5%, and subscription revenue increased $42.6 million or 16%.
For the third quarter and first three quarters of fiscal 2017, product, service and subscription revenue increased primarily due to organic growth across all segments. To a lesser extent, acquisitions contributed to growth, particularlystrong hardware and related software sales in product and service revenue.
For the third quarter of fiscal 2017, on a segment basis, Buildings and Infrastructure, revenue increased $25.2 million or 13%, Geospatial, revenue increased $9.8 million or 6%,and Resources and Utilities across many regions, partially offset by a decrease in Transportation sales. Service revenue increased $26.9 million or 31%, and Transportation revenue increased $24.0 million or 16%, compared to the third quarter of fiscal 2016. For the first three quarters of 2017, Buildings and Infrastructure revenue increased $59.5 million or 11%, Geospatial revenue increased $8.8 million or 2%, Resources and Utilities revenue increased $45.0 million or 15%, and Transportation revenue increased $55.8 million or 13%, compared to the first three quarters of fiscal 2016.
For the third quarter and first three quarters of fiscal 2017, Buildings and Infrastructurewas relatively flat. Subscription revenue increased primarily due to strong civil engineeringgrowth in Building and constructionInfrastructure and building construction organic growth. Geospatial revenue increased mainly due to strong geospatial and surveying organic growth.a lesser extent, Resources and Utilities, revenue increased due to acquisitions, including the impactpartially offset by a decrease in Transportation.
19
Table of the Müller-Elektronik acquisition, and continued organic growth in agriculture and correction services. Transportation revenue increased due to continued growth in the transportation and logistics business.Contents
Gross Margin
Gross margin varies due to a combination of factors including product mix, pricing, distribution channel, production volumes and foreign currency translations.
Gross margin increased by $40.5$52.3 million or 12% and, $97.4 million for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016. Gross margin as a percentage of total revenue, was 52.2% and 52.6% for the third quarter and the first three quarters of fiscal 2017, respectively,55.6% compared to 52.9% and 52.1% for the corresponding periods in fiscal 2016. For the third quarter of fiscal 2017, the decrease in gross55.7%. Gross margin percentage wasincreased due to higher intangiblesrevenue growth; however, as a percentage of revenue, it was relatively flat. Continuing product mix and inventory step-up costs due to amortization from new acquisitions during the quarter and product mix. For the first three quarters of fiscal 2017, the increasepricing pressure in gross margin percentageTransportation was due to lower intangibles amortization due to fully amortized intangibles from prior acquisitions, partiallylargely offset by intangibles from new acquisitions. Excluding the impact of intangibles amortization, grossBuildings and Infrastructure improved revenue mix, including increased higher margin percentage was relatively flat period over period.software and subscription sales.
Operating Income
Operating income increased by $8.7$42.6 million or 43% and, $57.5 million for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016. Operating income as a percentage of total revenue, was 9.6% and 9.4% for the third quarter and the first three quarters of fiscal 2017, respectively,15.9% compared to 9.5% and 7.1% for the corresponding periods in fiscal 2016.
For the third quarter of fiscal 2017, the12.4%. Both increases in operating income and operating income percentage were attributableprimarily due to revenue expansion in Buildings and Infrastructure, Geospatial, and Resources and Utilities, strong operating expense control across all segments, and operating expense control, partially offset by reduced sales and gross margin compression in Transportation.
Research and Development, Sales and Marketing, and General and Administrative Expense
The following table shows research and development (“R&D”), sales and marketing (“S&M”), and general and administrative (“G&A”) expense and expense as a percentage of revenue compared for the periods indicated:
 First Quarter of
 20212020Change
(In millions)  
Research and development$129.4 $118.2 9%
Percentage of revenue14.6 %14.9 %
Sales and marketing$122.4 $131.7 (7)%
Percentage of revenue13.8 %16.6 %
General and administrative$85.4 $73.0 17%
Percentage of revenue9.6 %9.2 %
Total$337.2 $322.9 4%
First Quarter of Fiscal Year 2021 Compared with First Quarter of Fiscal Year 2020
Overall R&D, S&M, and G&A expenses increased by $14.3 million or 4%.
R&D expense increased $11.2 million or 9% primarily due to higher compensation expense, including incentive compensation, and unfavorable impacts from foreign currency exchange.
We believe that the development and introduction of new solutions are critical to our future success, and we expect to continue the active development of new products.
S&M expense decreased $9.3 million or 7% primarily due to lower advertising costs and travel reductions, partially offset by higher compensation expense, including incentive compensation, and unfavorable impacts from foreign currency exchange.
G&A expense increased $12.4 million or 17% primarily due to higher compensation expense, including incentive compensation, partially offset by lower bad debt expense.
20
Table of Contents
Amortization of Purchased Intangible Assets
 First Quarter of
 20212020Change
(In millions)  
Cost of sales$22.1 $23.5 (6)%
Operating expenses13.7 16.9 (19)%
Total amortization expense of purchased intangibles$35.8 $40.4 (11)%
Total amortization expense of purchased intangibles as a percentage of revenue4 %5 %
Total amortization expense of purchased intangibles. Forintangibles decreased due to the first three quartersexpiration of fiscal 2017, the increasesprior year acquisitions' amortization.
Non-operating Expense, Net
The components of Non-operating expense, net, were as follows:
 First Quarter of
 20212020Change
(In millions)  
Interest expense, net$(16.9)$(20.5)(18)%
Income from equity method investments, net11.8 9.4 26%
Other income (expense), net1.6 (7.8)(121)%
Total non-operating expense, net$(3.5)$(18.9)(81)%
Non-operating expense, net decreased $15.4 million or 81% due to fluctuations in operatingour deferred compensation plan assets included in Other income (expense), net, lower interest costs associated with a decrease in our outstanding debt, and operatingincreased joint venture profitability.
Income Tax Provision
Our effective income percentage were attributable to revenue expansion, operating expense control and lower amortization of purchased intangible assets.
Results by Segment
In March 2017, we changed the reporting of our segment financial results to better reflect our customer base and end markets. Beginning withtax rate for the first quarter of fiscal 2017, we are reporting2021 was 16.6% as compared to 22.0% in the corresponding period in fiscal 2020. The decrease in our effective income tax rate was primarily due to a one-time tax benefit from foreign income tax refunds and a change in the geographic mix of income.
Results by Segment
We report our financial performance, including revenuesrevenue and operating income, based on four new reportable segments: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation. Comparative period financial information by
Our Chief Executive Officer (chief operating decision maker) views and evaluates operations based on the results of our reportable segment has been recastoperating segments under our management reporting system. For additional discussion of our segments, refer to conform with the current presentation.Note 5 “Segment Information” of this Form 10-Q.
Operating income is revenue less cost
21
Table of sales and operating expense, excluding unallocated corporate expenses, restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition and divestiture items and executive transition costs.Contents

The following table is a summary of revenue and operating income by segment:segment compared for the periods indicated:
 First Quarter of
 20212020Change
(In millions) 
Buildings and Infrastructure
Segment revenue$343.1 $296.9 16%
Segment revenue as a percent of total revenue39 %37 %
Segment operating income$96.4 $60.8 59%
Segment operating income as a percent of segment revenue28.1 %20.5 %
Geospatial
Segment revenue$181.7 $146.2 24%
Segment revenue as a percent of total revenue20 %18 %
Segment operating income$48.7 $30.5 60%
Segment operating income as a percent of segment revenue26.8 %20.9 %
Resources and Utilities
Segment revenue$205.2 $180.3 14%
Segment revenue as a percent of total revenue23 %23 %
Segment operating income$80.1 $66.9 20%
Segment operating income as a percent of segment revenue39.0 %37.1 %
Transportation
Segment revenue$156.7 $170.6 (8)%
Segment revenue as a percent of total revenue18 %21 %
Segment operating income$8.4 $16.9 (50)%
Segment operating income as a percent of segment revenue5.4 %9.9 %
22
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Buildings and Infrastructure       
Revenue$214.5
 $189.3
 $625.3
 $565.8
Segment revenue as a percent of total revenue32% 33% 32% 32%
Operating income$52.2
 $40.9
 $135.3
 $102.2
Operating income as a percent of segment revenue24% 22% 22% 18%
Geospatial       
Revenue$169.7
 $159.9
 $484.8
 $476.0
Segment revenue as a percent of total revenue25% 27% 25% 27%
Operating income$36.7
 $35.3
 $94.8
 $89.9
Operating income as a percent of segment revenue22% 22% 20% 19%
Resources and Utilities       
Revenue$114.4
 $87.5
 $345.3
 $300.3
Segment revenue as a percent of total revenue17% 15% 18% 17%
Operating income$26.5
 $25.2
 $103.5
 90.0
Operating income as a percent of segment revenue23% 29% 30% 30%
Transportation       
Revenue$171.4
 $147.4
 $490.4
 $434.6
Segment revenue as a percent of total revenue26% 25% 25% 24%
Operating income$31.2
 $26.5
 $82.2
 $70.7
Operating income as a percent of segment revenue18% 18% 17% 16%
AThe following table is a reconciliation of our consolidated segment operating income to consolidated income before taxes follows:taxes:
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Consolidated segment operating income$146.6
 $127.9
 $415.8
 $352.8
Unallocated corporate expense(23.0) (17.1) (61.8) (54.5)
Restructuring charges(1.6) (4.0) (7.8) (11.0)
Amortization of purchased intangible assets(40.0) (37.3) (109.1) (117.2)
Stock-based compensation(16.1) (13.3) (45.0) (40.0)
Amortization of acquisition-related inventory step-up(2.2) —
 (2.8) —
Acquisition and divestiture items0.3
 (0.9) (6.1) (3.4)
Executive transition costs—
 —
 —
 (1.0)
Consolidated operating income64.0
 55.3
 183.2
 125.7
Non-operating income (expense), net:5.6
 (3.1) 19.6
 (5.8)
Consolidated income before taxes$69.6
 $52.2
 $202.8
 $119.9
 First Quarter of
 20212020
(In millions)  
Consolidated segment operating income$233.6 $175.1 
Unallocated general corporate expenses(24.4)(13.9)
Acquired deferred revenue adjustment(0.2)(1.7)
Amortization of acquired capitalized commissions1.2 1.5 
Amortization of purchased intangible assets(35.8)(40.4)
Acquisition / divestiture items(3.5)(10.8)
Stock-based compensation / deferred compensation(28.7)(4.5)
Restructuring and other exit costs(1.5)(3.2)
COVID-19 expenses0.2 (3.8)
Consolidated operating income140.9 98.3 
Total non-operating expense, net(3.5)(18.9)
Consolidated income before taxes$137.4 $79.4 
Buildings and Infrastructure
Buildings and Infrastructure revenue increased by $25.2$46.2 million or 13% and $59.5 million or 11% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.16%. Segment operating income increased $11.3$35.6 million or 28%59%.
Revenue increased across many regions due in equal parts to hardware and $33.1 million or 32% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
The revenue increase for the third quarter and the first three quarters of fiscal 2017 was primarily due to organic growthrelated software sales in civil engineering and construction, products. Buildingresulting from strong residential construction includingspend and higher subscription revenue in our architecturesoftware businesses. The increase in subscription revenue resulted from the cumulative effect of conversions from perpetual licenses to subscription offerings for existing customers, as well as new sales to existing and design, structural engineering,new customers. Segment operating income and mechanical, electrical and plumbing products also contributed to growth. In the third quarter, Buildings and Infrastructure

experienced strong growth in markets suchoperating income as North America, Europe, and Asia Pacific, particularly in Japan and Australia. Operating incomea percentage of revenue increased for the third quarter and the first three quarters of fiscal 2017, primarily due to revenue and gross margin expansion, including a higher mix of software and subscription revenue, as well as operating expense control across the segment.control.
Geospatial
Geospatial revenue increased by $9.8$35.5 million or 6% and $8.8 million or 2% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.24%. Segment operating income increased by $1.4$18.2 million or 4%60%.
Revenue increased primarily driven by geospatial survey new product introductions and $4.9 million or 5% for the third quarterstrong markets across major regions. Segment operating income and the first three quarterssegment operating income as a percentage of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
The revenue increase for the third quarter and first three quarters of fiscal 2017 wasincreased primarily due to geospatial organic growth for optical and Global Navigation Satellite Systems (GNSS) products, including the new SX 10, our scanning total station, and end market diversification. In the third quarter, Geospatial experienced growth in most regions including North America and Europe. Operating income increased for the third quarter and the first three quarters of fiscal 2017 primarily due tostrong revenue expansion partially offset by higherand operating expense including trade show costs.control.
Resources and Utilities
Resources and Utilities revenue increased by $26.9$24.9 million or 31% and $45.0 million or 15% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016. Segment operating income increased $1.3 million or 5% and $13.5 million or 15% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscals 2016.
Resources and Utilities revenue increased for the third quarter and the first three quarters of fiscal 2017 primarily due to acquisitions, including the impact of the Müller-Elektronik acquisition, and continued organic growth in agriculture and correction services. Although the Müller-Elektronik acquisition contributed significant growth to segment revenue, it was less impactful to consolidated revenue. In the third quarter, Agriculture continued to experience growth in North America in our aftermarket and OEM sales. Europe, Russia and Brazil were also up and continued to reflect penetration-related growth opportunities. Growth in Europe was also impacted positively by the Müller-Elektronik acquisition. Operating income increased for the third quarter and the first three quarters of fiscal 2017 primarily due to revenue expansion in agriculture and correction services and operating expense control across the segments, offset by impacts of new acquisitions, including the Müller-Elektronik acquisition.
Transportation
Transportation revenue increased by $24.0 million or 16% and $55.8 million or 13% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.14%. Segment operating income increased by $4.7$13.2 million or 18%20%.
Revenue increased due to agriculture business strength in the reseller and $11.5 million or 16% for the third quarterOEM channels across major regions. Strong market fundamentals, including favorable commodity prices, government stimulus programs, and the first three quartersrobust new tractor sales, fueled growth. Segment operating income and segment operating income as a percentage of fiscal 2017, respectively, comparedrevenue increased primarily due to the corresponding periods in fiscal 2016.strong agriculture revenue and operating expense control.
Transportation
Transportation revenue increased for the third quarterdecreased $13.9 million or 8%. Segment operating income decreased $8.5 million or 50%.
Revenue decreased due in part to lower hardware and the first three quarterssubscription revenue in our mobility business resulting from competitive product performance challenges, which resulted in lower prices and a declining subscriber count. Additionally, a divestiture impacted year-over-year segment revenue trends. These declines were partially offset by subscription growth in our enterprise software business. Segment operating income and segment operating income as a percentage of fiscal 2017revenue decreased primarily due to continued organic growthrevenue and gross margin compression, partially offset by cost reductions.
23
LIQUIDITY AND CAPITAL RESOURCES
First Quarter ofFiscal Year End
As of20212020Change
(In millions, except percentages)  
Cash and cash equivalents$264.6 $237.7 $26.9 
As a percentage of total assets3.9 %3.5 %
Principal balance of outstanding debt$1,397.6 $1,555.9 $(158.3)
 First Quarter of
 20212020Change
(In millions)  
Cash provided by operating activities$228.2 $155.7 $72.5 
Cash used in investing activities(9.2)(214.4)$205.2 
Cash (used in) provided by financing activities(186.9)99.6 $(286.5)
Effect of exchange rate changes on cash and cash equivalents(5.2)(13.3)$8.1 
Net increase in cash and cash equivalents$26.9 $27.6 $(0.7)
Cash and Cash Equivalents
Our ability to continue to generate cash from operations will depend in large part on profitability, the rate of collections of accounts receivable, our inventory turns, and our ability to manage other areas of working capital. Our cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions considered to be of reputable credit and to present little credit risk.

We believe that our cash and cash equivalents and borrowings, as described below under the heading “Debt”, along with cash provided by operations will be sufficient to meet our anticipated operating cash needs, debt service, any stock repurchases under the stock repurchase program, and planned capital expenditures in the transportation and logistics business, particularly in North America due to the Electronic Logging Device (ELD) government mandate as well as complementary product sales such as video cameras. The continued technology deployment due to the ELD mandate. as well as routing and navigation management products, resulted in continued SaaS subscription revenue growth. next twelve months.
Operating income increased for the third quarter and the first three quarters of fiscal 2017 due to revenue expansion in the transportation and logistics business and operating expense control across the segments.Activities

Research and Development, Sales and Marketing and General and Administrative Expense
Research and development (R&D), sales and marketing (S&M) and general and administrative (G&A) expense are summarized in the following table:
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Research and development$92.6
 $86.9
 $272.1
 $266.6
Percentage of revenue14% 15% 14% 15%
Sales and marketing$100.6
 $88.6
 $295.8
 $282.7
Percentage of revenue15% 15% 15% 16%
General and administrative$74.0
 $59.2
 $218.4
 $193.1
Percentage of revenue11% 10% 11% 11%
Total$267.2
 $234.7
 $786.3
 $742.4
Percentage of revenue40% 40% 40% 42%
Overall, R&D, S&M and G&A expense increased by approximately $32.5 million and $43.9 million for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
Research and development expense increased by $5.7 million or 7% for the third quarter and 5.5 million or 2% for the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
As compared to the prior year, theThe increase in the third quartercash provided by operating activities of fiscal 2017$72.5 million was primarily driven by higher net income adjusted for non-cash items and positive working capital changes, including lower inventory, accounts payable, and accrued compensation and benefits requirements.
Investing Activities
The decrease of cash used in investing activities of $205.2 million was primarily due to $4.0 million in expense from acquisitions not applicablethe Kuebix acquisition included in the prior corresponding period, a $3.6 millionyear.
Financing Activities
The increase in compensation expense, andcash used in financing activities of $286.5 million was primarily driven by a $1.4 million increase due to unfavorable foreign exchange rates,decrease in debt proceeds, net of debt repayments, partially offset by a $1.9 million decrease in consulting expense, and a $1.4 million decrease in other expense.repurchases of common stock.
Compared to the prior year, the increase inDebt
During the first three quarters of fiscal 2017 was primarily due to an $8.5 million increase in compensation expense and $5.1 million in expense from acquisitions not applicable in the prior corresponding period, partially offset by a $4.9 million decrease in other expense, a $2.6 million decrease in consulting expense, and a $0.6 million decrease due to favorable foreign exchange rates.
Overall, research and development spending was 14% of revenue in both the third quarter and the first three quarters of fiscal 2017, compared to 15% in both the corresponding periods of fiscal 2016.
We believe that the development and introduction of new products are critical to our future success, and we expect to continue active development of new products.

Sales and marketing expense increased by $12.0 million or 14% and $13.1 million or 5% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.

Compared to the prior year, the increase in the third quarter of fiscal 2017 was primarily due2021, we repaid $154.9 million of debt, net of debt proceeds. Each of our debt agreements requires us to a $6.5 million increasemaintain compliance with certain debt covenants, all of which we were in compensation expense, $3.3 million in expense from acquisitions not applicable incompliance with at the prior corresponding period, a $1.4 million increase due to unfavorable foreign exchange rates, and a $0.8 million increase in other expense.

Compared toend of the prior year, the increase in the first three quarters of fiscal 2017 was primarily due to a $7.9 million increase in compensation expense, $5.3 million in expense from acquisitions not applicable in the prior corresponding period, and a $1.3 million increase in travel/marketing cost primarily due to global dealer meetings and trade shows, partially offset by a $0.8 million decrease due to favorable foreign exchange rates, and a $0.6 million decrease in other expense.

Overall, spending for sales and marketing was 15% of revenue in both the third quarter and the first three quarters of fiscal 2017, compared to approximately 15% and 16% in the corresponding periods of fiscal 2016, respectively.

General and administrative expense increased by $14.8 million or 25% and $25.3 million or 13% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.


Compared to the prior year, the increase in the third quarter of fiscal 2017 was primarily due2021. Refer to a $9.5 million increase in compensation expense, $4.0 million in expense from acquisitions not applicable in the prior corresponding period, a $0.8 million increase in other expense,Note 6 “Debt” of this Form 10-Q for more information regarding our debt.
Off Balance Sheet Financing and a $0.5 million increase due to unfavorable foreign exchange rates.Liabilities

Compared to the prior year, the increase in the first three quarters of fiscal 2017 was primarily due to a $20.2 million increase in compensation expense and $7.2 million in expense from acquisitions not applicable in the prior corresponding period, partially offset by a $1.5 million decrease in other expense and a $0.6 million decrease due to favorable foreign exchange rates.

Overall, general and administrative spending was 11% of revenue in both the third quarter and the first three quarters of fiscal 2017, compared to approximately 10% and 11% in the corresponding periods of 2016, respectively.
Restructuring charges
Restructuring charges primarily consist of severance and benefits, resulting from employee headcount reductions in connection with our restructuring programs related to decisions to streamline processes and reduce the cost structure. As of the end of the thirdfirst quarter of fiscal 2017, our restructuring liability was $1.1 million, which is expected to be substantially settled by the third quarter of fiscal 2018. Restructuring liabilities are reported within Other current liabilities on the Condensed Consolidated Balance Sheets. 
Amortization of Purchased Intangible Assets
Amortization of purchased intangible assets was $40.0 million in the third quarter of fiscal 2017, compared to $37.3 million in the third quarter of fiscal 2016. Of the total $40.0 million in the third quarter of fiscal 2017, $17.0 million is presented as a separate line within Operating expense2021, other than inventory purchases and $23.0 million is presented as a separate line within Cost of sales in our Condensed Consolidated Statements of Income. Of the total $37.3 million in the third quarter of fiscal 2016, $15.5 million is presented as a separate line within Operating expense and $21.8 million is presented as a separate line within Cost of sales in our Condensed Consolidated Statements of Income. Amortization in the third quarter of fiscal 2017 reflects acquisitions not included in the corresponding period of fiscal 2016 offset by the fully amortized intangibles from prior acquisitions. As of the end of the third quarter of fiscal 2017 future amortization of intangible assets is expected to be $39.6 million during the remainder of fiscal 2017, $133.3 million during 2018, $91.9 million during 2019, $63.0 million during 2020, $40.9 million during 2021 and $37.1 million thereafter.
Non-operating Income (Expense), Net
The components of Non-operating income (expense), net, were as follows:
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Interest expense, net$(6.3) $(6.6) $(18.4) $(19.8)
Foreign currency transaction gain (loss), net1.6
 —
 3.0
 (1.6)
Income from equity method investments, net8.7
 5.2
 22.8
 13.9
Other income (expense), net1.6
 (1.7) 12.2
 1.7
Total non-operating income (expense), net$5.6
 $(3.1) $19.6
 $(5.8)
Non-operating income (expense), net increased $8.7 million and $25.4 million for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016. The increase for the third quarter was primarily driven by an increase in joint venture profitability, an increase in Other income (expense), net due to the prior year's inclusion of divestiture losses, and to a lesser extent, the favorable impact from foreign currency exchange. The increase for the first three quarters was primarily due to an increase in Other income (expense), net due to divestiture gains, an increase in joint venture profitability and, to a lesser extent, the favorable impact from foreign currency exchange.
Income Tax Provision
Our effective income tax rate for the third quarter of fiscal 2017 was 20% as compared to 25% in the corresponding period in fiscal 2016, primarily due to a favorable change in the geographic mix of pre-tax income and stock-based compensation tax benefits. We expected the two favorable factors will impact on our fourth quarter effective tax rate. For the first three quarters of fiscal 2017, our effective income tax rate was 23% as compared to 21% in the corresponding period in fiscal 2016, primarily due

to a one time discrete tax benefit from the divestiture of the Advance Public Safety business in the second quarter of 2016, partially offset by a favorable change in the geographic mix of pre-tax income in fiscal 2017.
Historically, our effective tax rate has been lower than the U.S. federal statutory rate of 35% primarily due to the tax rates associated with certain earnings from operations in lower-tax jurisdictions. We have not provided for U.S. taxes on such earnings due to the indefinite reinvestment of such earnings outside the U.S.
OFF-BALANCE SHEET FINANCINGS AND LIABILITIES
Other than leaseother commitments incurred in the normal course of business, we dodid not have any off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any obligation arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not included in the Condensed Consolidated Financial Statements. Additionally, we do not have any interest in, or relationship with, any special purpose entities.liabilities.
In the normal course of business to facilitate sales of our products, we indemnify other parties, including customers, lessors and parties to other transactions with us, with respect to certain matters. We have agreedmay agree to hold the other party harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the
24
claim. From time to time, inIn connection with divesting some of our businesses or assets, we may also indemnify purchasers for certain matters in the normal course of business, such as breaches of representations, covenants, or excluded liabilities. In addition, we entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements were not material, and no liabilities have been recorded for these obligations on the Condensed Consolidated Balance Sheets as of the end of the third quarter of fiscal 2017 and fiscal year end 2016.
LIQUIDITY AND CAPITAL RESOURCES
 Third Quarter of Fiscal Year End
As of2017 2016
(In millions, except percentages)   
Cash and cash equivalents and short-term investments$409.2
 $327.2
As a percentage of total assets9.8% 8.9%
Principal balance of outstanding debt700.3
 624.8
    
 First Three Quarters of
 2017 2016
(In millions)   
Cash provided by operating activities$310.0
 $287.0
Cash used in investing activities(322.9) (78.6)
Cash provided by (used in) financing activities34.2
 (112.5)
Effect of exchange rate changes on cash and cash equivalents17.6
 1.6
Net increase in cash and cash equivalents$38.9
 $97.5

Cash and Cash Equivalents and Short-Term Investments
As of the end of the third quarter of fiscal 2017, cash, cash equivalents, and short-term investments totaled $409.2 million compared to $327.2 million as of fiscal year end 2016. We had a principal balance of outstanding debt of $700.3 million as of the end of the third quarter of fiscal 2017, compared to $624.8 million as of fiscal year end 2016.
Our ability to continue to generate cash from operations will depend in large part on profitability, the rate of collections of accounts receivable, our inventory turns and our ability to manage other areas of working capital.

Our cash, cash equivalents and short-term investments are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions considered to be of reputable credit and to present little credit risk. Our investment policy requires the portfolio to include only securities with high credit quality and a weighted average maturity not to exceed 6 months, with the main objective of preserving capital and maintaining liquidity. We maintain an investment portfolio of various holdings, types, and maturities. We classify our investments as short-term investments based on their nature and their availability for use in current operations. We believe that our cash and cash equivalents, short-term investments, and borrowings under our 2014 Credit Facility as described below under the heading "Debt", will be sufficient to meet our anticipated operating cash needs, debt service, planned capital expenditures, and stock repurchases under the stock repurchase program for at least the next twelve months.
Operating Activities
Cash provided by operating activities was $310.0 million for the first three quarters of fiscal 2017, compared to $287.0 million for the first three quarters of fiscal 2016. The increase of $23.0 million was primarily driven by an increase in revenue, partially offset by an increase in working capital requirements, primarily inventory and accounts receivable.
Investing Activities
Cash used in investing activities was $322.9 million for the first three quarters of fiscal 2017, compared to $78.6 million for the first three quarters of fiscal 2016. The increase of $244.3 million was primarily due to increased spending for business acquisitions and purchases of available-for-sale investments, partially offset by proceeds from maturities and sales of short-term investments and proceeds from sales of businesses.
Financing Activities
Cash provided by financing activities was $34.2 million for the first three quarters of fiscal 2017, compared to cash used in financing activities of $112.5 million for the first three quarters of fiscal 2016. The increase of cash provided by financing activities of $146.7 million was primarily driven by an increase in debt proceeds, net of repayments and an increase in issuance of common stock.
Accounts Receivable and Inventory Metrics
 Third Quarter of Fiscal Year End
As of2017 2016
Accounts receivable days sales outstanding55
 55
Inventory turns per year5.2
 4.8

Accounts receivable days sales outstanding were both 55 days as of the end of the third quarter of fiscal 2017 and as of the end of fiscal 2016. Our accounts receivable days sales outstanding are calculated based on ending accounts receivable, net, divided by revenue for the corresponding fiscal quarter, times a quarterly average of 91 days. Our inventory turns were 5.2 as of the end of the third quarter of fiscal 2017, compared to 4.8 as of the end of fiscal 2016. Our inventory turnover is calculated based on total cost of sales for the most recent twelve months divided by average ending inventory, net, for this same twelve month period. To the extent that customer demand continues to increase, inventory may be purchased in advance to reduce leads times. As a result, inventory turns may decrease.
Debt
Notes
In November 2014, we issued $400.0 million of Senior Notes (the "Notes") in a public offering registered with the Securities and Exchange Commission. The Notes mature on December 1, 2024 and accrue interest at a rate of 4.75% per annum, payable semiannually in arrears in cash on December 1 and June 1 of each year. In connection with the Notes offering, we entered into an Indenture with U.S. Bank National Association, as trustee. We may redeem the Notes at our option at any time, in accordance with the terms and conditions set forth in the Indenture. Further details regarding the terms of the Notes, including the redemption rights, and the Indenture, are provided in our fiscal 2016 Annual Report on Form 10-K.
2014 Credit Facility
In November 2014, we entered into a five-year credit agreement with a group of lenders, which provides for an unsecured revolving loan facility of $1.0 billion (the "2014 Credit Facility"). Under the 2014 Credit Facility, we may borrow, repay and reborrow funds under the revolving loan facility until its maturity on November 24, 2019, at which time the revolving facility will terminate, and all outstanding loans, together with all accrued and unpaid interest, must be repaid. The interest rate on the non-current debt outstanding

under the 2014 Credit Facility was 2.48% and 1.80%Sheets at the end of the thirdfirst quarter of fiscal 20172021 and fiscal year end 2016, respectively, and is payable on a quarterly basis. The outstanding balance of $164.0 million as of the end of the third quarter of fiscal 2017 and $94.0 million at the end of fiscal 2016 are classified as long-term debt. Amounts not borrowed under the revolving facility will be subject to a commitment fee. In February 2016, we entered into an amendment to the 2014 Credit Facility to facilitate our proposed reincorporation from California to Delaware and to effect other non-financial terms. In August 2016, we entered into a second amendment to revise a definition used in determining when a change of control of the Company may occur. We were in compliance with all covenants pertaining to the 2014 Credit Facility at the end of the third quarter of fiscal 2017.2020.
Uncommitted Facilities
We also have two $75 million revolving credit facilities which are uncommitted (the "Uncommitted Facilities"). The Uncommitted Facilities may be called by the lenders at any time, have no covenants and no specified expiration date. The $135.0 million outstanding at the end of the third quarter of fiscal 2017 and the $130.0 million outstanding at the end of fiscal 2016 under the Uncommitted Facilities are considered short-term debt. The weighted average interest rate on the Uncommitted Facilities was 2.11% at the end of the third quarter of fiscal 2017 and 1.65% at the end of fiscal 2016.
Promissory Notes and Other Debt
At the end of the third quarter of fiscal 2017 and the end of fiscal 2016, we had promissory notes and other notes payable totaling approximately $1.3 million and $0.8 million, respectively, of which $0.9 million and $0.5 million, respectively, was classified as long-term debt.
For additional discussion of our debt, see Note 7 of Notes to Condensed Consolidated Financial Statements.
Repatriation of Foreign Earnings and Income Taxes
As of the third quarter of fiscal 2017, $399.2 million of cash, cash equivalents and short-term investment was held by our foreign subsidiaries, of which $7.2 million was borrowed from the U.S. under intercompany financing arrangements. If these loaned funds are needed for our operations in the U.S., we would not be required to accrue and pay U.S. federal and state taxes to repatriate the loaned funds. To the extent of other repatriation of cash held by foreign entities, we generally would be required to pay U.S. federal and state taxes.  While a significant portion of our foreign earnings continue to be permanently reinvested in our foreign subsidiaries, it is anticipated this reinvestment will not impede cash needs at the parent company level. However, if we were to make significant acquisitions or stock repurchases, we may be required to increase our outstanding indebtedness, which could result in increased borrowing costs. In our determination of which foreign earnings are permanently reinvested, we consider numerous factors, including the financial requirements of the U.S. parent company, the financial requirements of the foreign subsidiaries, and the tax consequences of remitting the foreign earnings back to the U.S. There are no other material impediments to our ability to access sources of liquidity and our resulting ability to meet short and long-term liquidity needs, other than in the event we are not in compliance with the covenants under our 2014 Credit Facility or the potential tax costs of remitting foreign earnings back to the U.S.
RECONCILIATIONSUPPLEMENTAL DISCLOSURE OF GAAP TOANNUALIZED RECURRING REVENUE AND NON-GAAP FINANCIAL MEASURES
To supplement our condensed consolidated financial information, we believe that the following information is helpful to gain an overall understanding of our past financial performance and prospects for the future. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. The non-GAAP financial measures included in the following tables as well asand detailed explanations to the adjustments to comparable GAAP measures are set forth below:below.
 First Quarter of
  20212020
  Dollar% ofDollar% of
(In millions, except per share amounts) AmountRevenueAmountRevenue
REVENUE:
GAAP revenue:$886.5 $792.3 
Acquired deferred revenue adjustment(A)0.2 1.7 
Non-GAAP revenue:$886.7 $794.0 
GROSS MARGIN:
GAAP gross margin:$493.3 55.6 %$441.0 55.7 %
Acquired deferred revenue adjustment(A)0.2 1.7 
Amortization of purchased intangible assets(C)22.1 23.5 
Acquisition / divestiture items(D)— 1.7 
Stock-based compensation / deferred compensation(E)2.0 0.7 
Restructuring and other exit costs(F)— 0.3 
Non-GAAP gross margin:$517.6 58.4 %$468.9 59.1 %
OPERATING EXPENSES:
GAAP operating expenses:$352.4 39.8 %$342.7 43.3 %
Amortization of acquired capitalized commissions(B)1.2 1.5 
Amortization of purchased intangible assets(C)(13.7)(16.9)
Acquisition / divestiture items(D)(3.5)(9.1)
Stock-based compensation / deferred compensation(E)(26.7)(3.8)
Restructuring and other exit costs(F)(1.5)(2.9)
COVID-19 expenses(G)0.2 (3.8)
Non-GAAP operating expenses:$308.4 34.8 %$307.7 38.8 %
OPERATING INCOME:
GAAP operating income:$140.9 15.9 %$98.3 12.4 %
Acquired deferred revenue adjustment(A)0.2 1.7 
Amortization of acquired capitalized commissions(B)(1.2)(1.5)
Amortization of purchased intangible assets(C)35.8 40.4 
Acquisition / divestiture items(D)3.5 10.8 
Stock-based compensation / deferred compensation(E)28.7 4.5 
Restructuring and other exit costs(F)1.5 3.2 
COVID-19 expenses(G)(0.2)3.8 
Non-GAAP operating income:$209.2 23.6 %$161.2 20.3 %
NON-OPERATING EXPENSE, NET:
GAAP non-operating expense, net:$(3.5)$(18.9)
Acquisition / divestiture items(D)(2.1)— 
Deferred compensation(E)(1.5)6.2 
Non-GAAP non-operating expense, net:$(7.1)$(12.7)
25
   GAAP and Non-GAAP Tax Rate %GAAP and Non-GAAP Tax Rate %
(J)(J)
INCOME TAX PROVISION:
GAAP income tax provision:$22.8 16.6 %$17.5 22.0 %
Non-GAAP items tax effected(H)10.7 15.2 
Difference in GAAP and Non-GAAP tax rate(I)1.5 (6.7)
Non-GAAP income tax provision:$35.0 17.3 %$26.0 17.5 %
NET INCOME:
GAAP net income attributable to Trimble Inc.:$114.5 $61.9 
Acquired deferred revenue adjustment(A)0.2 1.7 
Amortization of acquired capitalized commissions(B)(1.2)(1.5)
Amortization of purchased intangible assets(C)35.8 40.4 
Acquisition / divestiture items(D)1.4 10.8 
Stock-based compensation / deferred compensation(E)27.2 10.7 
Restructuring and other exit costs(F)1.5 3.2 
COVID-19 expenses(G)(0.2)3.8 
Non-GAAP tax adjustments(H) - (I)(12.2)(8.5)
Non-GAAP net income attributable to Trimble Inc.:$167.0 $122.5 
DILUTED NET INCOME PER SHARE:
GAAP diluted net income per share attributable to Trimble Inc.:$0.45 $0.25 
Acquired deferred revenue adjustment(A)— 0.01 
Amortization of acquired capitalized commissions(B)— (0.01)
Amortization of purchased intangible assets(C)0.14 0.16 
Acquisition / divestiture items(D)— 0.04 
Stock-based compensation / deferred compensation(E)0.11 0.04 
Restructuring and other exit costs(F)0.01 0.01 
COVID-19 expenses(G)— 0.02 
Non-GAAP tax adjustments(H) - (I)(0.05)(0.03)
Non-GAAP diluted net income per share attributable to Trimble Inc.:$0.66 $0.49 
ADJUSTED EBITDA:
GAAP net income attributable to Trimble Inc.:$114.5 $61.9 
Non-operating expense, net, income tax provision, and net gain attributable to noncontrolling interests26.4 36.4 
GAAP operating income:140.9 98.3 
Acquired deferred revenue adjustment(A)0.2 1.7 
Amortization of acquired capitalized commissions(B)(1.2)(1.5)
Amortization of purchased intangible assets(C)35.8 40.4 
Acquisition / divestiture items(D)3.5 10.8 
Stock-based compensation / deferred compensation(E)28.7 4.5 
Restructuring and other exit costs(F)1.5 3.2 
COVID-19 expenses(G)(0.2)3.8 
Non-GAAP operating income:209.2 161.2 
Depreciation expense10.3 9.8 
Income from equity method investments, net11.8 9.4 
Adjusted EBITDA$231.3 $180.4 
26
Annualized Recurring Revenue Explanation
In addition to providing non-GAAP financial measures, we provide an annualized recurring revenue (“ARR”) performance measure in order to provide investors with a supplementary indicator of the value of the Company's current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue, including subscription, maintenance and software revenue, and term license contracts for the quarter. ARR is calculated by adding the portion of the contract value of all of our term licenses attributable to the current quarter to our non-GAAP recurring revenue for the current quarter and dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. ARR should be viewed independently of revenue and deferred revenue as it is a performance measure and is not intended to be combined with or to replace either of those items.
Non-GAAP Explanations
Non-GAAP revenue
We believe this measure helps investors understand the performance of our business, as non-GAAP revenue excludes the effects of certain acquired deferred revenue that was written down to fair value in purchase accounting. Management believes that excluding fair value purchase accounting adjustments more closely correlates with the ordinary and ongoing course of the acquired company’s operations and facilitates analysis of revenue growth and trends.
Non-GAAP gross margin
We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business. Non-GAAP gross margin excludes restructuring charges,the effects of certain acquired deferred revenue, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and amortization of acquisition-related inventory step-up from GAAP gross margin.restructuring and other exit costs. We believe that these exclusionsadjustments offer investors additional information that may be useful to view trends in our gross margin performance.

Non-GAAP operating expenses

We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue. Non-GAAP operating expenses exclude restructuring charges,the effects of certain acquired capitalized commissions that were eliminated in purchase accounting, amortization of purchased intangible assets, stock-based compensation, acquisition/divestiture items, associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration,stock-based compensation, deferred compensation, restructuring and other required closingexit costs, and executive transition costs from GAAP operatingCOVID-19 expenses. We believe that these exclusionsadjustments offer investors supplemental information to facilitate comparison of our operating expenses to our prior results.results and trends.
Non-GAAP operating income

We believe our investors benefit by understanding our non-GAAP operating income trends, which are driven by revenue, gross margin, and spending. Non-GAAP operating income excludes restructuring charges,the effects of purchase accounting adjustments to certain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture costs associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration,deferred compensation, restructuring and other required closingexit costs, and executive transition costs.COVID-19 expenses. We believe that these exclusionsadjustments offer an alternativea supplemental means for our investors to evaluate current operating performance compared to prior results of other periods.

and trends.
Non-GAAP non-operating income (expense),expense, net

We believe this measure helps investors evaluate our non-operating income trends. Non-GAAP non-operating income (expense),expense, net, excludes acquisition/divestiture gains/losses associated with unusual acquisition related items, such as intangible asset impairment charges and gains or losses related to the acquisition or sale of certain businesses and investments.deferred compensation. We believe that these exclusions provide investors with a supplemental view of our ongoing financial results.
Non-GAAP income tax provision
We believe that providingthis measure helps investors with the non-GAAP income tax provision is beneficial because it provides for consistent treatment of the excluded items in our non-GAAP presentation.presentation and a difference in the GAAP and non-GAAP tax rates. The non-GAAP tax rate excludes charges and benefits such as net deferred tax impacts results from the non-U.S. intercompany transfer of intellectual property, tax law changes, and significant one-time reserve releases upon statute of limitations expirations.
Non-GAAP net income
This measure provides a supplemental view of net income trends, which are driven by non-GAAP income before taxes and our non-GAAP tax rate. Non-GAAP net income excludes restructuring charges,the effects of purchase accounting adjustments to certain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transitionstock-based compensation, restructuring and other exit costs, COVID-19 expenses, and non-GAAP tax adjustments from GAAP net income.adjustments. We believe our investors benefit from understanding these exclusionsadjustments and from an alternative view of our net income performance as compared to our past net income performance.prior periods and trends.
27
Non-GAAP diluted net income per share
We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the company. Non-GAAP diluted net income per share excludes restructuring charges,the effects of purchase accounting adjustments to certain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transitionstock-based compensation, restructuring and other exit costs, COVID-19 expenses, and non-GAAP tax adjustments from GAAP diluted net income per share.adjustments. We believe that these exclusionsadjustments offer investors a useful view of our diluted net income per share as compared to our past dilutedprior periods and trends.
Adjusted EBITDA
Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business. We believe it is useful because it facilitates company-to-company operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense), income taxes, depreciation and amortization expenses. We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense and income from equity method investments, net. Other companies define Adjusted EBITDA differently and so our measure may not be directly comparable to similarly titled measures. Our investors should consider the limitations of using Adjusted EBITDA, including the fact that this measure does not provide a complete measure of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net income per share.or operating income as a measure of operating performance or to cash flow from operating activities as a measure of liquidity. In particular, Adjusted EBITDA is not intended to be a measure of cash flow available for our discretionary expenditures, as this measure does not consider certain cash requirements, such as restructuring and other exit costs, acquisition and divestiture items, interest payments, tax payments, and other debt service requirements.

These non-GAAP measures can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors. We believe some of our investors track our ""core"core operating performance"" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our operations. Core operating performance excludes items that are non-cash, not expected to recur, or not reflective of ongoing financial results. Management also believes that looking at our core operating performance provides a supplemental way to provide consistency in period to period comparisons. Accordingly, management excludes from non-GAAP those items relatingthe effects of purchase accounting adjustments to restructuring charges,certain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transitionstock-based compensation, deferred compensation, restructuring and other exit costs, COVID-19 expenses, and non-GAAP tax adjustments. For detailed explanations
(A).Acquired deferred revenue adjustment. Purchase accounting generally requires us to write-down acquired deferred revenue to fair value. Our GAAP revenue includes the fair value impact from purchase accounting for post-contract support and subscriptions contracts assumed in connection with our acquisitions. The non-GAAP adjustment to our revenue is intended to reflect the full amount of such revenue.  We believe this adjustment is useful to investors as a measure of the ongoing performance of our business and facilitates analysis of revenue growth and business trends.
(B).Amortization of acquired capitalized commissions. Purchase accounting generally requires us to eliminate capitalized sales commissions balances as of the acquisition date. Our GAAP sales and marketing expenses generally do not reflect the amortization of these capitalized sales commissions balances. The non-GAAP adjustment to increase our sales and marketing expenses is intended to reflect the full amount of amortization related to such balances as though the acquired companies operated independently in the periods presented.  We believe this adjustment to sales and marketing expenses is useful to investors as a measure of the ongoing performance of our business.
(C).Amortization of purchased intangible assets. Included in our GAAP presentation of cost of sales and operating expenses is amortization of purchased intangible assets. We believe that by excluding the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed, this provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies. However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult.
(D).Acquisition / divestiture items. Included in our GAAP presentation of cost of sales and operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, integration, and other closing costs including the acceleration of acquisition stock options and adjustments made to comparablethe fair value of earn-out liabilities. Included in our GAAP presentation of non-operating expense, net, acquisition/divestiture items includes unusual acquisition, investment, and/or divestiture gains/losses. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures see items ( A ) - ( I ) below.are costs specific
28
  Third Quarter of First Three Quarters of 
  2017 2016 2017 2016 
  Dollar % of Dollar % of Dollar % of Dollar % of 
(In millions, except per share amounts) Amount Revenue Amount Revenue Amount Revenue Amount Revenue 
GROSS MARGIN:                 
GAAP gross margin: $349.5
 52.2 % $309.0
 52.9 % $1,022.6
 52.6 % $925.2
 52.1 % 
Restructuring charges( A )0.3
 — % 0.5
 0.1 % 1.3
 0.1 % 1.2
 0.1 % 
Amortization of purchased intangible assets( B )23.0
 3.4 % 21.8
 3.7 % 62.5
 3.2 % 69.9
 3.9 % 
Stock-based compensation( C )1.1
 0.2 % 0.9
 0.2 % 2.8
 0.1 % 2.8
 0.1 % 
Amortization of acquisition-related inventory step-up( D )2.2
 0.3 % —
 — % 2.8
 0.1 % —
 — % 
Non-GAAP gross margin: $376.1

56.1 % $332.2
 56.9 % $1,092.0
 56.1 % $999.1
 56.2 % 
to particular acquisitions. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(E).Stock-based compensation / deferred compensation. Included in our GAAP presentation of cost of sales and operating expenses are stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. Additionally, included in our GAAP presentation of cost of sales and operating expenses are income or expense associated with movement in our non-qualified deferred compensation plan liabilities. Changes in non-qualified deferred compensation plan assets, included in non-operating expense, net, offset the income or expense in the plan liabilities. We exclude them from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as they are a non-cash item.
(F).Restructuring and other exit costs. Included in our GAAP presentation of cost of sales and operating expenses, restructuring and other exit costs are recorded for termination benefits related to reductions in employee headcount, including executive severance agreements, the closure or exit of facilities, and cancellation of certain contracts. We exclude restructuring and other exit costs from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparison to our past operating performance. Furthermore, these costs can vary significantly, thus exclusion from our non-GAAP results is useful to investors because it allows for period-over-period comparability.
OPERATING EXPENSES:                 
GAAP operating expenses: $285.5
 42.6 % $253.7
 43.4 % $839.4
 43.2 % $799.5
 45.0 % 
Restructuring charges( A )(1.3) (0.2)% (3.5) (0.6)% (6.5) (0.3)% (9.8) (0.5)% 
Amortization of purchased intangible assets( B )(17.0) (2.5)% (15.5) (2.7)% (46.6) (2.5)% (47.3) (2.7)% 
Stock-based compensation( C )(15.0) (2.2)% (12.4) (2.1)% (42.2) (2.2)% (37.2) (2.1)% 
Acquisition / divestiture items( E )0.3
 — % (0.9) (0.1)% (6.1) (0.3)% (3.4) (0.2)% 
Executive transition costs( F )—
 — % —
 — % —
 — % (1.0) (0.1)% 
Non-GAAP operating expenses: $252.5
 37.7 % $221.4
 37.9 % $738.0
 37.9 % $700.8
 39.4 % 
OPERATING INCOME:                 
GAAP operating income: $64.0
 9.6 % $55.3
 9.5 % $183.2
 9.4 % $125.7
 7.1 % 
Restructuring charges( A )1.6
 0.2 % 4.0
 0.7 % 7.8
 0.4 % 11.0
 0.6 % 
Amortization of purchased intangible assets( B )40.0
 5.9 % 37.3
 6.4 % 109.1
 5.7 % 117.2
 6.6 % 
Stock-based compensation( C )16.1
 2.4 % 13.3
 2.3 % 45.0
 2.3 % 40.0
 2.2 % 
Amortization of acquisition-related inventory step-up( D )2.2
 0.3 % —
 — % 2.8
 0.1 % —
 — % 
Acquisition / divestiture items( E )(0.3) — % 0.9
 0.1 % 6.1
 0.3 % 3.4
 0.2 % 
Executive transition costs( F )—
 — % —
 — % —
 — % 1.0
 0.1 % 
Non-GAAP operating income: $123.6
 18.4 % $110.8
 19.0 % $354.0
 18.2 % $298.3
 16.8 % 
NON-OPERATING INCOME (EXPENSE), NET:                
GAAP non-operating income (expense), net:$5.6
   $(3.1)   $19.6
   $(5.8)   
Acquisition / divestiture items( E )—
   2.8
   (8.9)   0.1
   
Non-GAAP non-operating income (expense), net:$5.6
   $(0.3)   $10.7
   $(5.7)   
                  
   
 GAAP and Non-GAAP Tax Rate % ( I ) GAAP and Non-GAAP Tax Rate % ( I ) GAAP and Non-GAAP Tax Rate % ( I ) GAAP and Non-GAAP Tax Rate %( I )
INCOME TAX PROVISION:                 
GAAP income tax provision: $13.9
 20 % $13.0
 25 % $46.7
 23 % $25.4
 21 % 
Non-GAAP items tax effected( G )11.9
   14.6
   37.1
   36.3
   
Difference in GAAP and Non-GAAP tax rate( H )3.8
   (1.1)   —
   8.5
   
Non-GAAP income tax provision: $29.6
 23 % $26.5
 24 % $83.8
 23 % $70.2
 24 % 
NET INCOME:                 
GAAP net income attributable to Trimble Inc. $55.7
   $39.2
   $156.1
   $94.7
   
Restructuring charges( A )1.6
   4.0
   7.8
   11.0
   
Amortization of purchased intangible assets( B )40.0
   37.3
   109.1
   117.2
   
Stock-based compensation( C )16.1
   13.3
   45.0
   40.0
   
Amortization of acquisition-related inventory step-up( D )2.2
   —
   2.8
   —
   
Acquisition / divestiture items( E )(0.3)   3.7
   (2.8)   3.5
   
Executive transition costs( F )—
   —
   —
   1.0
   
Non-GAAP tax adjustments( G ) + ( H )(15.7)   (13.5)   (37.1)   (44.8)   
Non-GAAP net income attributable to Trimble Inc. $99.6
   $84.0
   $280.9
   $222.6
   
                  
DILUTED NET INCOME PER SHARE:                 
GAAP diluted net income per share attributable to Trimble Inc. $0.22
   $0.15
   $0.61
   $0.37
   
Restructuring charges( A )0.01
   0.02
   0.03
   0.05
   
Amortization of purchased intangible assets( B )0.15
   0.15
   0.42
   0.46
   
Stock-based compensation( C )0.06
   0.05
   0.17
   0.16
   
Amortization of acquisition-related inventory step-up( D )0.01
   —
   0.01
   —
   
(G).COVID-19 expenses. Included in our GAAP presentation of operating expenses, COVID-19 expenses consist of costs incurred as a direct impact from the COVID-19 virus pandemic, such as cancellation fees of trade shows due to public safety issues, additional costs for disinfecting facilities, and personal protective equipment. We exclude COVID-19 expenses from our non-GAAP measures because we believe they are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(H).Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (G) on non-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation.
(I).Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP tax rates applied to the non-GAAP operating income plus the non-GAAP non-operating expense, net. The non-GAAP tax rate excludes charges and benefits such as net deferred tax impacts resulting from a non-U.S. intercompany transfer of intellectual property and significant one-time reserve releases upon statute of limitations expirations. We believe that investors benefit from excluding this amount from our non-GAAP income tax provision because it facilitates a comparison of the non-GAAP tax provision in the current and prior periods.
Acquisition / divestiture items( E )—
   0.01
   (0.01)   0.02
   
Executive transition costs( F )—
   —
   —
   —
   
Non-GAAP tax adjustments( G ) + ( H )(0.06)   (0.05)   (0.14)   (0.18)   
Non-GAAP diluted net income per share attributable to Trimble Inc. $0.39
   $0.33
   $1.09
   $0.88
   
A.
Restructuring charges. Included in our GAAP presentation of cost of sales and operating expenses, restructuring charges recorded are primarily for employee compensation resulting from reductions in employee headcount in connection with our company restructurings. We exclude restructuring charges from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparisons to our past operating performance. We have incurred restructuring expense in each of the periods presented. However the amount incurred can vary significantly based on whether a restructuring has occurred in the period and the timing of headcount reductions.

B.
Amortization of purchased intangible assets. Included in our GAAP presentation of gross margin and operating expenses is amortization of purchased intangible assets. U.S. GAAP accounting requires that intangible assets are recorded at fair value and amortized over their useful lives. Consequently, the timing and size of our acquisitions will cause our operating results to vary from period to period, making a comparison to past performance difficult for investors. This accounting treatment may cause differences when comparing our results to companies that grow internally because the fair value assigned to the intangible assets acquired through acquisition may significantly exceed the equivalent expenses that a company may incur for similar efforts when performed internally. Furthermore, the useful life that we use to amortize our intangible assets over may be substantially different from the time period that an internal growth company incurs and recognizes such expenses. We believe that by excluding the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed, it provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies. However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult.

C.
Stock-based compensation. Included in our GAAP presentation of cost of sales and operating expenses, stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. We exclude stock-based compensation expense from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as it is a non-cash expense. For the third quarter and the first three quarters of fiscal years 2017 and 2016, stock-based compensation was allocated as follows:
 Third Quarter of First Three Quarters of
(Dollars in millions)2017 2016 2017 2016
Cost of sales$1.1
 $0.9
 $2.8
 $2.8
Research and development2.7
 2.2
 7.7
 6.9
Sales and Marketing2.4
 2.1
 7.0
 6.3
General and administrative9.9
 8.1
 27.5
 24.0
 $16.1
 $13.3
 $45.0
 $40.0

D.
Amortization of acquisition-related inventory step-up. The purchase accounting entries associated with our business acquisitions require us to record inventory at its fair value, which is sometimes greater than the previous book value of the inventory. Included in our GAAP presentation of cost of sales, the increase in inventory value is amortized to cost of sales over the period that the related product is sold. We exclude inventory step-up amortization from our non-GAAP measures because it is a non-cash expense that we do not believe is indicative of our ongoing operating results. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.

E.
Acquisition / divestiture items. Included in our GAAP presentation of operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, integration, and other required closing costs, as well as adjustments to the fair value of earn-out liabilities. Included in our GAAP presentation of non-operating income (expense), net, acquisition/divestiture items includes unusual acquisition, investment, and/or divestiture gains/losses. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures are costs specific to particular acquisitions. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

F.
Executive transition costs. Included in our GAAP presentation of operating expenses are amounts paid to the Company's former CFO upon his departure under the terms of his executive severance agreement. We excluded these payments from our non-GAAP measures because they represent non-recurring expenses and are not indicative of our ongoing operating expenses. We further believe that excluding the executive transition costs from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.

G.
Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items ( A ) - ( F ) on non-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation.

H.
Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and Non-GAAP tax rates applied to the Non-GAAP operating income plus the Non-GAAP non-operating income (expense), net.

I.
GAAP and non-GAAP tax rate %.(J).GAAP and non-GAAP tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes. We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to non-GAAP tax rates in prior periods.
Non-GAAP Operating Income
Non-GAAP operating income increased by $12.8 million or 12% and $55.7 million or 19% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016. Non-GAAP operating income as a percentage of total revenue was 18.4%GAAP income before taxes and 18.2% for the third quarter and the first three quartersnon-GAAP income tax provision as a percentage of fiscal 2017, respectively, comparednon-GAAP income before taxes. We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to 19.0% and 16.8% for the corresponding periodsnon-GAAP tax rates in fiscal 2016.prior periods.
Non-GAAP operating income and Non-GAAP operating income percentage for the third quarter and first three quarters of fiscal 2017 increased primarily attributable to revenue expansion across all segments and operating expense control.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We use certain derivative financial instruments to manage these risks. We do not use derivative financial instruments for speculative purposes. All financial instruments are used in accordance with policies approved by our Board of Directors.
Market Interest Rate Risk
There have been no significant changes to our market interest rate risk assessment. Referassessment since January 1, 2021. For discussion of financial markets risks related to our 2016 Annual Report onchanges in interest rate, refer to “Quantitative and Qualitative Disclosure about Market Risk” section of the 2020 Form 10-K on page 49.10-K.
Foreign Currency Exchange Rate Risk
We operate in international markets, which expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S. Dollar and various foreign currencies, the most significant of which is the Euro. In addition, volatile market conditions could result in changes in exchange rates.
Historically, the majority of our revenue contracts are denominated in U.S. Dollars, with the most significant exception being Europe, where we invoice primarily in Euro. Additionally, a portion of our expenses, primarily the cost to manufacture, cost of
29
personnel to deliver technical support on our products and professional services, sales and sales support, and research and development are denominated in foreign currencies, primarily the Euro.
Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations, which can affect our operating income. As exchange rates vary, operating income may differ from expectations. In the thirdfirst quarter of fiscal 2017, 2021, revenue and operating income were positivelywas favorably impacted by foreign currency exchange rates by $6.6$20.6 million and $0.7 million, respectively. Currency translation added approximately 1% of revenue and 1% of operating income in the third quarter of fiscal 2017.was favorably impacted by $4.9 million.
We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on cash, anddebt, certain trade and inter-companyintercompany receivables and payables, primarily denominated in Euro, British pound andPound, New Zealand Dollars, Brazilian Real, Canadian Dollars, Norwegian Krone, and Canadian dollars.Euro. These 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 marketmarked-to-market through earnings every period and generally range from one to two months in maturity. We do not enter into foreign currency forward contracts for trading purposes. We occasionally enter into foreign currency forward contracts to hedge the purchase price of some of our larger business acquisitions. Foreign currency forward contracts outstanding as of the end of the thirdfirst quarter of fiscal 20172021 and fiscal year end 20162020 are summarized as follows (in millions):

 First Quarter of Fiscal 2021Fiscal Year End 2020
 Nominal  AmountFair ValueNominal  AmountFair Value
Forward contracts:
Purchased$(117.0)$0.2 $(99.4)$0.9 
Sold$94.5 $(0.3)$52.0 $(0.5)
 Third Quarter of Fiscal 2017 Fiscal Year End 2016
 Nominal Amount Fair Value Nominal Amount Fair Value
Forward contracts:       
Purchased$(54.3) $—
 $(99.2) $—
Sold$217.3
 $(2.6) $86.1
 $0.1

ITEM 4. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures.
The management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting.
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

On September 2, 2011, Recreational Data Services, LLC filed a lawsuit in the Superior Court for the State of Alaska in Anchorage against Trimble Navigation Limited, Cabela’s Incorporated, AT&T Mobility and Alascom, Inc., alleging breach of contract, breach of fiduciary duty, interference with contract, promissory estoppel, fraud, and negligent misrepresentation. The case was tried in front of a jury in Alaska beginning on September 9, 2014. On September 26, 2014, the jury returned a verdict in favor of the plaintiff and awarded the plaintiff damages of $51.3 million. On January 29, 2015, the court granted our Motion for Judgment Notwithstanding the Verdict, and on March 18, 2015, the court awarded us a portion of its incurred attorneys’ fees and costs, and entered judgment in our favor in the amount of $0.6 million.  The judgment also provides that the plaintiff take nothing on its claims.  On April 17, 2015, the plaintiff filed a Notice of Appeal to the Alaska Supreme Court. On March 24, 2017, the Alaska Supreme Court affirmed, in part, and reversed, in part, the trial court's decision.  The Alaska Supreme Court affirmed the trial court's determination that Plaintiff had not proven damages and was not entitled to recover any lost profits, but remanded the case to the trial court for an award of nominal damages to Plaintiff.  On April 17, 2017, Plaintiff filed a Motion for Rehearing with the Alaska Supreme Court. The Alaska Supreme Court has denied rehearing on the finding that Plaintiff had failed to prove damages, returning the case to the trial court to award nominal damages. 

From time to time, we are also involved in litigation arising out of the ordinary course of our business. There are no other 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.
ITEM 1A. RISK FACTORS
A description of factors that could materially affect our business, financial condition, or operating results is included under "Risk and Uncertainties" in Item 1A of Part I of our 2016 Annual Report on Form 10-K and is incorporated herein by reference.
There have been no material changes to the Company’s risk factor disclosurefactors since our 2016 Annual Report onthe 2020 Form 10-K.10K. The risk factors described in ourthe 2020 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial conditions and/condition, or operating results.
30
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) NoneNone.
(b) NoneNone.
(c) The following table provides information relating to our purchases of equity securities for the thirdfirst quarter of fiscal 2017.2021:

Total Number
of Shares
Purchased		Average
Price Paid
per Share		Total Number of Shares
Purchased as Part of
Publicly Announced
Program		Maximum Approximate Dollar Value of Shares that May Yet Be
Purchased Under the
Program
January 2, 2021 – February 5, 2021— $— — $90,728,167 
February 6, 2021 – March 5, 2021442,554 $71.42 442,554 $59,119,610 
March 6, 2021 – April 2, 2021118,890 $70.58 118,890 $50,728,199 
Total561,444 561,444 
  
Total Number
of Shares
Purchased
 
Average
Price Paid
per Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Program
 
Maximum Dollar Value of
Shares that May Yet Be
Purchased Under the
Program
 
          
July 1, 2017 – August 4, 2017 65,760 $35.76 65,760 $100,652,793(1)
August 5, 2017 – September 1, 2017 1,895,194 37.39 1,895,194 $29,798,214 
September 2, 2017 – September 29, 2017 281,958 $38.47 281,958 $18,951,847 
Total 2,242,912 
 2,242,912   

(1) In August 2015,November 2017, our Board of Directors approved a stock repurchase program (2015(“2017 Stock Repurchase Program)Program”), authorizing us to repurchase up to $400.0$600.0 million of the Company'sour common stock. The 2017 Stock Repurchase Program does not have an expiration date. The timing and amount of repurchase transactions will beis determined by the Company’sour management based on itsthe evaluation of market conditions, share price, legal requirements, and other factors. The program may be suspended, modified, or discontinued at any time without public notice.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
31
ITEM 6. EXHIBITS
We have filed, or incorporated into the Report by reference, the exhibits listed on the accompanying Index to Exhibits immediately followingpreceding the signature page of this Form 10-Q.

EXHIBIT INDEX
3.1
3.2
4.1
10.1
31.1
31.2
32.1
32.2
101The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2021, formatted in Inline XBRL.

(1)Incorporated by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 3, 2016.
(2)Incorporated by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed September 30, 2020.
(3)Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed October 3, 2016.
(4)Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 25, 2021.
(5)Furnished or filed herewith.
(+) Indicates management contract or compensatory plan or arrangement.

32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TRIMBLE INC.
(Registrant)
By:/s/    Robert G. Painter
Robert G. Painter
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
DATE: November 7, 2017


EXHIBIT INDEX
.
3.1By:
Certificate of Incorporation of the Company. (1)
/s/  David G. Barnes
David G. Barnes
3.2
Bylaws of the Company. (2)
4.1
Specimen copy of certificate for shares of Common Stock of the Company. (3)
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 7, 2017. (4)
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 7, 2017. (4)
(Authorized Officer and Principal
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 7, 2017. (4)
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 7, 2017. (4)
101.INSXBRL Instance Document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.Officer)
(1)Incorporated by reference to exhibit number 3.1 to the registrant’s Current Report on Form 8-K filed October 3, 2016.
(2)Incorporated by reference to exhibit number 3.2 to the registrant’s Current Report on Form 8-K filed October 3, 2016.
(3)Incorporated by reference to exhibit number 4.1 to the Company’s Current Report on Form 8-K, filed October 3, 2016.
(4)Furnished or filed herewith.


DATE: May 7, 2021
40
33