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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________ TrimbleR-Horiz-RGB-Blue.jpg
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
For the quarterly period ended September 29, 2017
2023
OR
or
¨☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO             
For the transition period from _____ to _____
Commission file number: 001-14845
TRIMBLE INC.
(Exact name of registrant as specified in its charter)
___________________________________ 
Delaware
94-2802192
Delaware
(State or other jurisdiction of incorporation or organization)
94-2802192
(I.R.S. Employer Identification Number)
incorporation or organization)
935 Stewart10368 Westmoor Drive, Sunnyvale, CA 94085Westminster, CO 80021
(Address of principal executive offices) (Zip Code)
Telephone Number (408) 481-8000(720) 887-6100
(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
¨  (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:
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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,October 30, 2023, there were 251,761,300were 248,767,565 shares of Common Stock, par value $0.001 per share, outstanding.


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SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This report 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:
•general U.S. and global macroeconomic outlook, including slowing growth, inflationary pressures, and increases in interest rates;
•economic disruptions caused by potential impact of volatility and conflict in the political and economic environment, including the conflicts in the Middle East and between Russian and Ukraine;
•our belief that inflationary cost pressures will diminish over time as supply chain conditions continue to normalize;
•fluctuations in foreign currency exchange rates;
•the cyclical nature of our hardware revenue and our expectation that our inventory levels will normalize over the first half of 2024;
•our expectations that we will experience less seasonality in the future;
•the portion of our revenue expected to come from sales to customers located in countries outside of the U.S.;
•our plans to continue to invest in research and development for the active development and introduction of new products and to deliver targeted solutions to the markets we serve;
•our shift towards a more significant mix of recurring revenue;
•our belief that increases in recurring revenue will provide us with enhanced business visibility over time;
•risks associated with our growth strategy, focusing on historically underserved large markets;
•any anticipated benefits or impact to our results of operations and financial conditions from our acquisitions and our ability to successfully integrate the acquired businesses;
•any anticipated benefits associated with the pending contribution of our precision agriculture business, excluding certain products and technologies, to a newly formed joint venture (the “JV”) and the sale of the majority interest in the JV to AGCO Corporation (“AGCO”);
•our belief that our cash and cash equivalents and borrowings, along with cash provided by operations, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, debt service, expenditures related to our Connect and Scale strategy, and any acquisitions;
•tax payments or refunds related to research and development (“R&D”) costs;
•our belief that our gross unrecognized tax benefits will not materially change in the next twelve months; and
•our commitments to environmental, social, and governance matters.
The forward-looking statements regarding future events and the future results of Trimble Inc. (“the Company” or “we” or “our” or “us”) are based on current expectations, estimates, forecasts, and projections about the industries in which we operate, and the beliefs and assumptions of our management. Discussions containing such forward-looking statements may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this report. 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,” 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 this report under the section entitled “Risk Factors” and elsewhere, and in other reports we file with the Securities and Exchange Commission (“SEC”), specifically the most recent Form 10-K for 2022 (the “2022 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 report. 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.

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TRIMBLE INC.
FORM 10-Q for the Quarter Ended September 29, 20172023
TABLE OF CONTENTS
Page
PART I.
PART I.ITEM 1.Page
ITEM 1.
Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets
4
Condensed Consolidated Statements of Income
5
Condensed Consolidated Statements of Comprehensive Income
6
Condensed Consolidated Statements of Cash Flows
7
ITEM 2.
8
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
ITEM 3.
3634
ITEM 4.
3735
PART II.
Other Information
PART II.
ITEM 1.
3735
ITEM 1A.
3736
ITEM 2.
3736
ITEM 3.
36
ITEM 4.
3836
ITEM 6.5.
3837
ITEM 6.
37
3938

3
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PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Index
Page
5
6
7
8
9
10
Note 1. Overview and Accounting Policies
10
Note 2. Common Stock Repurchase
11
Note 3. Acquisition
11
Note 4. Assets Held for Sale
13
Note 5. Intangible Assets and Goodwill
14
Note 6. Inventories
15
Note 7. Segment Information
15
Note 8. Debt
18
Note9. Fair Value Measurements
19
Note 10. Deferred Revenue and Remaining Performance Obligations
20
Note 11. Earnings per Share
20
Note 12. Income Taxes
21
Note 13. Commitments and Contingencies
21
4
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TRIMBLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As ofAs of
Third Quarter of Fiscal Year EndThird Quarter ofYear End
As of2017 2016
20232022
(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$216.8 $271.0 
Short-term investments154.2
 111.1
Accounts receivable, net407.2
 354.8
Accounts receivable, net641.4 643.3 
Other receivables35.4
 35.4
Inventories254.7
 218.8
Inventories257.2 402.5 
Other current assets55.4
 42.5
Other current assets196.4 201.4 
Assets held for saleAssets held for sale378.7 — 
Total current assets1,161.9
 978.7
Total current assets1,690.5 1,518.2 
Property and equipment, net160.5
 144.2
Property and equipment, net203.7 219.0 
Operating lease right-of-use assetsOperating lease right-of-use assets114.5 121.2 
Goodwill2,289.3
 2,077.6
Goodwill5,279.7 4,137.9 
Other purchased intangible assets, net405.8
 333.3
Other purchased intangible assets, net1,259.6 498.1 
Deferred income tax assetsDeferred income tax assets418.0 438.4 
Other non-current assets163.2
 140.0
Other non-current assets364.7 336.2 
Total assets$4,180.7
 $3,673.8
Total assets$9,330.7 $7,269.0 
LIABILITIES AND STOCKHOLDERS' EQUITY   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:   Current liabilities:
Short-term debt$135.4
 $130.3
Short-term debt$58.3 $300.0 
Accounts payable146.2
 109.8
Accounts payable179.5 175.5 
Accrued compensation and benefits116.7
 97.5
Accrued compensation and benefits169.9 159.4 
Deferred revenue285.4
 246.5
Deferred revenue594.2 639.1 
Accrued warranty expense17.8
 17.2
Income taxes payableIncome taxes payable104.923.7 
Other current liabilities106.9
 86.9
Other current liabilities184.3 164.4 
Liabilities held for saleLiabilities held for sale46.9 — 
Total current liabilities808.4
 688.2
Total current liabilities1,338.0 1,462.1 
Long-term debt560.4
 489.6
Long-term debt2,995.4 1,220.0 
Non-current deferred revenue41.3
 37.7
Deferred revenue, non-currentDeferred revenue, non-current98.4 98.5 
Deferred income tax liabilities45.2
 38.8
Deferred income tax liabilities283.6 157.8 
Operating lease liabilitiesOperating lease liabilities104.1 105.1 
Other non-current liabilities168.0
 113.8
Other non-current liabilities168.2 175.3 
Total liabilities1,623.3
 1,368.1
Total liabilities4,987.7 3,218.8 
Commitments and contingencies (Note 13)
 
Commitments and contingencies (Note 13)
   
Stockholders' equity:   Stockholders' equity:
Preferred stock, $0.001 par value; 3.0 shares authorized; none issued and outstanding—
 —
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
Common stock, $0.001 par value; 360.0 shares authorized; 248.8 and 246.9 shares issued and outstanding at the end of the third quarter of 2023 and year end 2022Common stock, $0.001 par value; 360.0 shares authorized; 248.8 and 246.9 shares issued and outstanding at the end of the third quarter of 2023 and year end 20220.2 0.2 
Additional paid-in-capital1,452.0
 1,348.3
Additional paid-in-capital2,201.5 2,054.9 
Retained earnings1,236.0
 1,177.1
Retained earnings2,455.4 2,230.0 
Accumulated other comprehensive loss(130.8) (219.9)Accumulated other comprehensive loss(314.1)(234.9)
Total Trimble Inc. stockholders' equity2,557.5
 2,305.8
Noncontrolling interests(0.1) (0.1)
Total stockholders' equity2,557.4
 2,305.7
Total stockholders' equity4,343.0 4,050.2 
Total liabilities and stockholders' equity$4,180.7
 $3,673.8
Total liabilities and stockholders' equity$9,330.7 $7,269.0 
See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
Third Quarter of First Three Quarters of Third Quarter ofFirst Three Quarters of
(In millions, except per share amounts)2017 2016 2017 2016(In millions, except per share amounts)2023202220232022
Revenue:       Revenue:
Product$446.1
 $384.9
 $1,297.1
 $1,185.5
Product$444.0 $472.5 $1,368.9 $1,570.3 
Service115.0
 105.6
 331.8
 316.9
Subscription108.9
 93.6
 316.9
 274.3
Subscription and servicesSubscription and services513.3 412.4 1,497.4 1,249.5 
Total revenue670.0
 584.1
 1,945.8
 1,776.7
Total revenue957.3 884.9 2,866.3 2,819.8 
Cost of sales:       Cost of sales:
Product222.8
 186.6
 637.0
 576.0
Product215.6 239.8 665.7 815.5 
Service46.4
 40.7
 141.2
 126.3
Subscription28.3
 26.0
 82.5
 79.3
Subscription and servicesSubscription and services123.8 109.8 364.2 338.4 
Amortization of purchased intangible assets23.0
 21.8
 62.5
 69.9
Amortization of purchased intangible assets27.7 19.9 80.9 63.4 
Total cost of sales320.5
 275.1
 923.2
 851.5
Total cost of sales367.1 369.5 1,110.8 1,217.3 
Gross margin349.5
 309.0
 1,022.6
 925.2
Gross margin590.2 515.4 1,755.5 1,602.5 
Operating expense:       Operating expense:
Research and development92.6
 86.9
 272.1
 266.6
Research and development162.5 127.0 496.6 407.4 
Sales and marketing100.6
 88.6
 295.8
 282.7
Sales and marketing146.2 137.1 436.9 407.9 
General and administrative74.0
 59.2
 218.4
 193.1
General and administrative117.2 109.6 369.2 318.0 
Restructuring charges1.3
 3.5
 6.5
 9.8
RestructuringRestructuring11.8 8.2 26.1 20.5 
Amortization of purchased intangible assets17.0
 15.5
 46.6
 47.3
Amortization of purchased intangible assets31.2 11.1 74.8 34.5 
Total operating expense285.5
 253.7
 839.4
 799.5
Total operating expense468.9 393.0 1,403.6 1,188.3 
Operating income64.0
 55.3
 183.2
 125.7
Operating income121.3 122.4 351.9 414.2 
Non-operating income (expense), net:       Non-operating income (expense), net:
Divestitures gain, netDivestitures gain, net5.5 6.0 10.6 103.1 
Interest expense, net(6.3) (6.6) (18.4) (19.8)Interest expense, net(46.8)(15.6)(113.2)(46.9)
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, net5.2 6.8 24.6 22.3 
Other income (expense), net1.6
 (1.7) 12.2
 1.7
Other income (expense), net(5.8)(1.7)23.6 (14.7)
Total non-operating income (expense), net5.6
 (3.1) 19.6
 (5.8)Total non-operating income (expense), net(41.9)(4.5)(54.4)63.8 
Income before taxes69.6
 52.2
 202.8
 119.9
Income before taxes79.4 117.9 297.5 478.0 
Income tax provision13.9
 13.0
 46.7
 25.4
Income tax provision4.5 32.1 49.2 113.9 
Net income55.7
 39.2
 156.1
 94.5
Net income$74.9 $85.8 $248.3 $364.1 
Less: Net loss attributable to noncontrolling interests—
 —
 —
 (0.2)
Net income attributable to Trimble Inc.$55.7
 $39.2
 $156.1
 $94.7
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:Earnings per share:
BasicBasic$0.30 $0.35 $1.00 $1.46 
DilutedDiluted$0.30 $0.34 $1.00 $1.45 
Shares used in calculating earnings per share:Shares used in calculating earnings per share:
BasicBasic248.6 247.5 248.0 249.1 
DilutedDiluted249.7 248.9 249.1 250.8 
See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
 
 Third Quarter of First Three Quarters of
 2017 2016 2017 2016
(In millions)       
Net income$55.7
 $39.2
 $156.1
 $94.5
Foreign currency translation adjustments, net of tax29.3
 4.5
 89.5
 11.5
Net unrealized loss on short-term investments—
 —
 (0.1) —
Net unrealized actuarial gain (loss), net of tax(0.1) —
 (0.3) 0.1
Comprehensive income84.9
 43.7
 245.2
 106.1
Less: Comprehensive loss attributable to noncontrolling interests—
 —
 —
 (0.2)
Comprehensive income attributable to Trimble Inc.$84.9
 $43.7
 $245.2
 $106.3
 Third Quarter ofFirst Three Quarters of
 2023202220232022
(In millions)    
Net income$74.9 $85.8 $248.3 $364.1 
Foreign currency translation adjustments, net of tax(119.7)(95.6)(75.6)(173.0)
Net change related to derivatives and other, net of tax(0.2)— (3.6)— 
Comprehensive (loss) income$(45.0)$(9.8)$169.1 $191.1 
See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
 Common stockRetained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
 SharesAmountAdditional Paid-In Capital
(In millions)     
Balance at the end of 2022246.9 $0.2 $2,054.9 $2,230.0 $(234.9)$4,050.2 
Net income— — — 128.8 — 128.8 
Other comprehensive income— — — — 16.5 16.5 
Issuance of common stock under employee plans, net of tax withholdings0.5 — 16.9 (2.9)— 14.0 
Stock-based compensation— — 35.7 — — 35.7 
Balance at the end of the first quarter of 2023247.4 $0.2 $2,107.5 $2,355.9 $(218.4)$4,245.2 
Net income— — — 44.6 — 44.6 
Other comprehensive income— — — — 24.2 24.2 
Issuance of common stock under employee plans, net of tax withholdings0.9 — (4.2)(19.4)— (23.6)
Stock-based compensation— — 40.9 — — 40.9 
Balance at the end of the second quarter of 2023248.3 $0.2 $2,144.2 $2,381.1 $(194.2)$4,331.3 
Net income— — — 74.9 — 74.9 
Other comprehensive loss— — — — (119.9)(119.9)
Issuance of common stock under employee plans, net of tax withholdings0.5 — 18.2 (0.6)— 17.6 
Stock-based compensation— — 39.1 — — 39.1 
Balance at the end of the third quarter of 2023248.8 $0.2 $2,201.5 $2,455.4 $(314.1)$4,343.0 
 Common stockRetained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
 SharesAmountAdditional Paid-In Capital
(In millions)     
Balance at the end of 2021250.9 $0.3 $1,935.6 $2,170.5 $(161.7)$3,944.7 
Net income— — — 110.3 — 110.3 
Other comprehensive loss— — — — (2.2)(2.2)
Issuance of common stock under employee plans, net of tax withholdings0.7 — 15.2 (17.6)— (2.4)
Stock repurchases(1.5)— (11.8)(92.9)— (104.7)
Stock-based compensation— — 42.2 — — 42.2 
Balance at the end of the first quarter of 2022250.1 $0.3 $1,981.2 $2,170.3 $(163.9)$3,987.9 
Net income— — — 168.0 — 168.0 
Other comprehensive loss— — — — (75.2)(75.2)
Issuance of common stock under employee plans, net of tax withholdings0.6 — (2.3)(17.1)— (19.4)
Stock repurchases(3.1)(0.1)(24.4)(175.5)— (200.0)
Stock-based compensation— — 33.2 — — 33.2 
Balance at the end of the second quarter of 2022247.6 $0.2 $1,987.7 $2,145.7 $(239.1)$3,894.5 
Net income— — — 85.8 — 85.8 
Other comprehensive loss— — — — (95.6)(95.6)
Issuance of common stock under employee plans, net of tax withholdings0.4 — 17.9 (0.9)— 17.0 
Stock repurchases(1.4)— (11.4)(78.6)— (90.0)
Stock-based compensation— — 33.1 — — 33.1 
Balance at the end of the third quarter of 2022246.6 $0.2 $2,027.3 $2,152.0 $(334.7)$3,844.8
See accompanying Notes to the Condensed Consolidated Financial Statements.
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TRIMBLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 First Three Quarters of
(In millions)20232022
Cash flow from operating activities:
Net income$248.3 $364.1 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense29.5 30.1 
Amortization expense155.7 97.9 
Deferred income taxes(104.0)(41.3)
Stock-based compensation112.5 93.2 
Divestitures gain, net(10.6)(103.1)
Other, net(5.9)22.7 
(Increase) decrease in assets:
Accounts receivable, net24.0 13.2 
Inventories46.3 (99.5)
Other current and non-current assets(35.5)(31.7)
Increase (decrease) in liabilities:
Accounts payable5.0 (3.8)
Accrued compensation and benefits12.3 (52.9)
Deferred revenue(39.7)14.3 
Income taxes payable62.5 (16.6)
Other current and non-current liabilities(2.2)(1.5)
Net cash provided by operating activities498.2 285.1 
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired(2,088.9)(318.1)
Purchases of property and equipment(32.2)(36.6)
Net proceeds from divestitures15.1 214.3 
Other, net41.6 (11.8)
Net cash used in investing activities(2,064.4)(152.2)
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings8.0 (4.8)
Repurchases of common stock— (394.7)
Proceeds from debt and revolving credit lines3,398.8 529.3 
Payments on debt and revolving credit lines(1,856.8)(235.9)
Other, net(29.3)(8.9)
Net cash provided by (used in) financing activities1,520.7 (115.0)
Effect of exchange rate changes on cash and cash equivalents(2.6)(34.9)
Net decrease in cash and cash equivalents(48.1)(17.0)
Cash and cash equivalents - beginning of period271.0 325.7 
Cash and cash equivalents - end of period (1)
$222.9 $308.7 
 First Three Quarters of
(In millions)2017 2016
Cash flow from operating activities:   
Net Income$156.1
 $94.5
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation expense26.4
 27.9
Amortization expense109.1
 117.2
Provision for doubtful accounts1.2
 2.5
Deferred income taxes(0.2) 1.2
Stock-based compensation45.0
 40.0
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)
Inventories(19.4) 25.7
Other current and non-current assets(21.9) (11.1)
Increase (decrease) in liabilities:   
Accounts payable27.8
 2.7
Accrued compensation and benefits7.5
 (12.8)
Deferred revenue29.6
 32.8
Accrued warranty0.1
 (0.5)
Other liabilities10.9
 (22.6)
Net cash provided by operating activities310.0
 287.0
Cash flow from investing activities:   
Acquisitions of businesses, net of cash acquired(286.7) (22.3)
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
Net cash used in investing activities(322.9) (78.6)
Cash flow from financing activities:   
Issuance of common stock, net of tax withholdings73.0
 50.0
Repurchases and retirement of common stock(111.5) (102.2)
Proceeds from debt and revolving credit lines517.0
 291.0
Payments on debt and revolving credit lines(444.3) (351.3)
Net 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 equivalents38.9
 97.5
Cash and cash equivalents - beginning of period216.1
 116.0
Cash and cash equivalents - end of period$255.0
 $213.5

(1) Includes $6.1 million of cash and cash equivalents classified as held for sale as of September 29, 2023.
See accompanying Notes to the Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED(UNAUDITED)
NOTE 1. OVERVIEW AND BASIS OF PRESENTATION
The Company 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. 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.ACCOUNTING POLICIES
Basis of Presentation
The Company hasCondensed Consolidated Financial Statements include our results of our consolidated subsidiaries. Intercompany accounts and transactions have been eliminated.
We use a 52-53 week fiscal52- to 53-week year ending on the Friday nearest to December 31, which for fiscal 2016 was December 30, 2016.31. Both 2023 and 2022 are 52-week years. The third quarter of fiscal 20172023 and 20162022 ended on September 29, 20172023 and September 30, 2016, respectively. Both fiscal 2017 and 2016 are 52-week years.2022. Unless otherwise stated, all dates refer to the Company’s fiscal year and fiscalthese periods.
TheUse of Estimates
We prepared our interim Condensed Consolidated Financial Statements include the results of the Company and its consolidated subsidiaries. Inter-company 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’s 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 changethat accompany these notes in the reporting of its segment financial results to better reflect the Company's customer base and end markets. Beginningconformity with U.S. GAAP, consistent in all material respects with those applied in our Form 10-K filed 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 to Condensed Consolidated Financial Statements for further information.
Unaudited Interim Financial Information
The 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 theU.S. Securities and Exchange Commission (SEC)on February 17, 2023 (the “2022 Form 10-K”). Certain
The interim financial information is unaudited, and footnote disclosures normally includedreflects all normal adjustments that are, in financial statements, prepared in accordance with U.S. generally accepted accounting principles, have been condensed or omitted pursuantour opinion, necessary to such rules and regulations. The Condensed Consolidated Balance Sheet asprovide a fair statement of fiscal year end 2016 is derived fromresults for the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for fiscal year 2016. The following discussioninterim periods presented. This report should be read in conjunction with the Company’s 2016 Annual Report onour 2022 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 quarter10-K that includes additional information about our significant accounting policies 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 patternsmethods and general economic conditions.

Use of Estimatesassumptions used in our estimates.
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires managementus to make estimates and assumptions that affect the amounts reported in its Condensed Consolidated Financial Statementsthe financial statements and accompanying notes. Estimates and assumptions are used for allowancesrevenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price (“SSP”) of performance obligations, provision for doubtful accounts,credit losses, sales returns reserve, allowances for inventory valuation, warranty costs, investments, acquired intangibles, goodwill and intangible asset impairment intangiblesanalysis, other long-lived asset impairment purchased intangibles,analysis, stock-based compensation, and income taxes among others. Management bases itstaxes. We base our estimates on historical experience and various other assumptions believedwe believe to be reasonable. Although these estimates are based on management’s best knowledgeActual results that we experience may differ materially from our estimates.
Change in Presentation
During the first quarter of current events2023, we changed the presentation of revenue and actions that may impact the Companycost of sales in the future, actual results may be differentCondensed Consolidated Statements of Income. This change was made to better reflect our Connect and Scale strategy and business model evolution with a continued shift toward a more significant mix of recurring revenue, which includes subscription, maintenance and support, recurring transactions, and term licenses. As such, we revised our presentation, including (a) the combination of subscription and services into one line item, and (b) moving term licenses from the estimates.product to subscription and services. The subscription and services line item is more aligned with our performance measures, how we manage our business, and is helpful to investors and others to better understand our results.
The Company hasPreviously, we presented revenue and cost of sales separately for products, service,on three lines as follows:
•product, which included hardware and subscriptions. Product revenue includes hardware, software licenses parts(both perpetual and accessories; term licenses);
•service, revenue includeswhich included hardware and software maintenance and support forand professional services;
•subscription, which included Software as a Service (“SaaS”), data, and hosting services.
The revised categories are as follows:
•product, which includes hardware and perpetual software licenses;
•subscription and services, which includes SaaS, data, and hosting services, as well as term licenses, hardware and software products, training,maintenance and support, and professional services; subscription revenue includes software as a service ("SaaS").services.
NOTE 2. UPDATES TO SIGNIFICANT ACCOUNTING POLICIES
TherePrior period amounts have been no material changesrevised to conform to the Company’s significant accounting polices duringcurrent period presentation. This change in presentation did not affect the total revenue or total cost of sales. The effect of the changes on the Condensed Consolidated Statements of Income for the third quarter and first three quarters of fiscal 2017 from those disclosed in the Company’s most recent Form 10-K.2022 were as follows:
Recent
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Third Quarter of 2022First Three Quarters of 2022
(In millions)
As Previously ReportedEffect of Change in PresentationAs Reported HereinAs Previously ReportedEffect of Change in PresentationAs Reported Herein
Revenue:
Product$503.9 $(31.4)$472.5 $1,690.0 $(119.7)$1,570.3 
Subscription and services— 412.4 412.4 — 1,249.5 1,249.5 
Service158.3 (158.3)— 477.4 (477.4)— 
Subscription222.7 (222.7)— 652.4 (652.4)— 
Total revenue$884.9 $— $884.9 $2,819.8 $— $2,819.8 
Cost of sales:
Product$240.7 $(0.9)$239.8 $819.0 $(3.5)$815.5 
Subscription and services— 109.8 109.8 — 338.4 338.4 
Service53.9 (53.9)— 180.6 (180.6)— 
Subscription55.0 (55.0)— 154.3 (154.3)— 
Amortization of purchased intangible assets19.9 — 19.9 63.4 — 63.4 
Total cost of sales$369.5 $— $369.5 $1,217.3 $— $1,217.3 
Recently issued Accounting Pronouncements not yet Adopted
There are no recently issued accounting pronouncements applicable to us not yet adopted.
Recently Adopted Accounting Pronouncements
In May 2014, 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 exchange 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 thisThere are no recently adopted 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.pronouncements.

In January 2016, the FASB issued final guidance that will require entities 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.

NOTE 2. COMMON STOCK REPURCHASE
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 impairment by requiring impairment charges to be based on 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 quarter of fiscal 2018. The Company is currently evaluating the effect of the updated standard on its consolidated financial statements and related disclosures.

NOTE 3. STOCKHOLDERS’ EQUITY
Stock Repurchase Activities
In August 2015, the Company’s2021, our Board of Directors approved a new stock repurchase program (2015(“2021 Stock Repurchase Program)Program”), authorizing the Company to repurchase up to $400.0$750.0 million in repurchases of Trimble’sour common stock. The 2021 Stock Repurchase Program’s authorization does not have an expiration date.
Under the share repurchase program, the Company2021 Stock Repurchase Program, we may repurchase sharesstock from time to time inthrough open market transactions, privately negotiatedprivately-negotiated transactions, accelerated share buyback programs, tender offers,stock repurchase plans, or by other means. The timing and amountactual number of repurchase transactionsany stock repurchased will be determined by the Company’s management baseddepend on its evaluationa variety of factors, including market conditions, shareour stock price, other available uses of capital, applicable legal requirements, and other factors. The program2021 Stock Repurchase Program may be suspended, modified, or discontinued at any time at the Company’s discretion without prior notice.At the end of the third quarter of 2023, the 2021 Stock Repurchase Program had remaining authorized funds of $215.3 million.
In the fourth quarter of 2023, we plan to reinstate share repurchases, which were temporarily discontinued in the fourth quarter of 2022.
During the third quarter and first three quarters of fiscal 2017, the Company2022, we repurchased approximately 3.11.4 million and 6.0 million shares of common stock in open market purchases at an average price of $36.07$64.23 and $65.90 per share for a total of $111.5$90.0 million and $394.7 million under the 20152021 Stock Repurchase Program.
Stock repurchases are reflected as a decrease to common stock based on par value and additional-paid-in-capital, based ondetermined by the average book value per share for allof outstanding sharesstock, calculated at the time of each individual repurchase transaction. The excess of the purchase price over this average for each repurchase iswas 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 were recorded based upon the trade date for accounting purposes. At the end
NOTE 3. ACQUISITION
On April 3, 2023, we acquired all of the first three quartersissued and outstanding shares of fiscal 2017,TP Group Holding GmbH and Sixfold GmbH, which owned Transporeon, in an all-cash transaction. Transporeon is a Germany-based company and leading cloud-based transportation management software platform that connects key stakeholders across the 2015 Stock Repurchase Program had remaining authorized fundsindustry lifecycle to positively impact the optimization of $19.0 million.
Stock-Based Compensation Expense
Stock compensation expenseglobal supply chains, which aligns with our Connect and Scale strategy. Transporeon is recognized based on the fair valuereported as part 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:

our Transportation segment.
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 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. BUSINESS COMBINATIONS
DuringThe total purchase consideration was €1.9 billion or $2.1 billion, which included the first three quartersrepayment of fiscal 2017, the Company acquired ten businesses, with total cash considerationoutstanding Transporeon debt of $333.9$339.6 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,funded through a privately-held German company specializing in implement controlcombination of cash on hand and precision farming solutions. In the aggregate, the businesses acquired during the first three quartersdebt. See Note 8 “Debt” of fiscal 2017 contributed less than two percent to the Company's total revenue during the first three quarters of fiscal 2017.this report for more information.
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.Purchase Price Allocation
The fair value of identifiable assets acquired and liabilities assumed werewas 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
The following table summarizes the consideration transferred to acquire Transporeon and the acquisitions, including the changes in the fair valuepreliminary allocation of the contingent considerationpurchase price among the assets acquired and liabilities a net benefitassumed, as well as the estimated useful lives of $0.3 millionthe identifiable intangible assets as of the date of the acquisition. The allocation of the purchase price is still preliminary as we finalize deferred income taxes, certain tangible assets and a net expenseliabilities acquired, and valuations of $6.1 millionintangible assets. Preliminary estimates will be finalized within one year of the acquisition date.
Fair Value as of the Acquisition DateEstimated Useful Life
(In millions)
Total purchase consideration$2,082.6
Net tangible assets acquired:
Cash and cash equivalents12.9 
Accounts receivable, net41.8 
Other current assets28.0 
Non-current assets24.7 
Accounts payable(4.1)
Accrued compensation and benefits(9.7)
Deferred revenue(16.5)
Other current liabilities(47.2)
Non-current liabilities(22.3)
Total net tangible assets acquired7.6
Intangible assets acquired:
Customer relationships759.5 11 years
Developed product technology168.4 7 years
Trade name11.9 1 year
Total intangible assets acquired939.8
Deferred tax liability(256.6)
Fair value of all assets/liabilities acquired690.8 
Goodwill$1,391.8
Goodwill consists of growth potential, synergies, and economies of scale expected from combining Transporeon’s operations with ours, together with the highly skilled and valuable assembled workforce. We do not expect the goodwill to be deductible for income tax purposes.
Financial Information
The following table presents the third quarter and the first three quartersamounts of fiscal 2017, respectively,revenue 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 wereloss included in General and administrative expense in the Condensed Consolidated Statements of Income.Income resulting from Transporeon since the acquisition date, which includes the effects of purchase accounting, primarily amortization of intangible assets and other adjustments.
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 Third Quarter ofFirst Three Quarters of
 20232023
(In millions)  
Total revenue$41.0 $81.5 
Net loss(12.4)(27.0)
Pro Forma Financial Information
The pro forma financial information presented in the following table was computed by combining the historical financial information of Trimble and Transporeon along with the effects from business combination accounting and the associated debt resulting from this acquisition as if the companies were combined on January 1, 2022. This information is presented for informational purposes only, and is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of that date. This information should not be used as a predictive measure of our future financial position, results of operations, or liquidity.
 Third Quarter ofFirst Three Quarters of
 2023202220232022
(In millions)    
Total revenue$957.3 $922.7 $2,906.8 $2,936.3 
Net income74.9 56.7 210.0 252.2 
NOTE 4. ASSETS HELD FOR SALE
On September 28, 2023, we executed a definitive agreement with AGCO that provides for the formation of a JV with AGCO in the mixed fleet precision agriculture market (the “Trimble Ag JV Transaction”). Under the terms of the agreement, we will contribute our precision agriculture business (“Trimble Ag”), excluding certain Global Navigation Satellite System (“GNSS”) and guidance technologies, and AGCO will contribute its JCA Technologies business to the JV. We will sell an interest in the JV to AGCO for $2.0 billion in pre-tax cash proceeds, subject to working capital adjustments. Immediately following the closing of the Trimble Ag JV Transaction, we will own 15% of the JV and AGCO will own 85% of the JV.
Additionally, we plan to enter into the following agreements with AGCO as part of the overall transaction:
•a seven-year, renewable Supply Agreement through which we will provide key GNSS and guidance technologies to the JV for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions;
•a Technology Transfer and License Agreement to govern the licensing of certain non-divested intellectual property and technology for use by the JV in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by the JV;
•a Trademark License Agreement to govern the licensing of certain Trimble trademarks for use by the JV in the agriculture field;
•a Positioning Services Agreement through which the JV will serve as our channel partner for the positioning services in the agriculture market; and
•a Transition Services Agreement to provide contract manufacturing services for the divested products for two years following the closing of the transaction.
The transaction is expected to close in the first half of 2024 and is subject to customary closing conditions, including regulatory approvals. Trimble Ag is reported as a part of our Resources and Utilities segment.
Following the closing of the Trimble Ag JV Transaction, our 15% ownership interest in the JV is expected to be reported as an equity method investment.
The assets and liabilities of Trimble Ag that are subject to the transaction were classified as held for sale in the third quarter of 2023. The following table presents the carrying values of the major classes of assets and liabilities classified as held for sale in our Condensed Consolidated Balance Sheets at the end of the third quarter of 2023:
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As of
Third Quarter of
(In millions)2023
Cash and cash equivalents$6.1 
Accounts receivable, net11.7 
Inventories, net85.8 
Other current assets3.0 
Property and equipment, net18.8 
Other purchased intangible assets, net19.3 
Goodwill231.1 
Other non-current assets2.9 
Total Assets Held for Sale$378.7
Accounts payable$3.7 
Deferred revenue, current13.3 
Other current liabilities14.8 
Deferred revenue, non-current8.3 
Long-term liabilities6.8 
Total Liabilities Held for Sale$46.9
NOTE 5. INTANGIBLE ASSETS AND GOODWILL
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’s totalour intangible assets:

Third Quarter of 2023Year End 2022
 Gross  Gross  
CarryingAccumulatedNet CarryingCarryingAccumulatedNet Carrying
(In millions)AmountAmortizationAmountAmountAmortizationAmount
Developed product technology$927.2 $(554.1)$373.1 $1,004.8 $(722.7)$282.1 
Customer relationships1,347.1 (469.8)877.3 654.1 (445.9)208.2 
Trade names and trademarks44.8 (36.6)8.2 39.5 (32.7)6.8 
Distribution rights and other intellectual property4.4 (3.4)1.0 8.0 (7.0)1.0 
$2,323.5 $(1,063.9)$1,259.6 $1,706.4 $(1,208.3)$498.1 
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 ofat the end of the third quarter of fiscal 20172023 was as follows:
(In millions)
2023 (Remaining)$57.5 
2024200.1 
2025162.8 
2026157.7 
2027144.0 
Thereafter537.5 
Total$1,259.6 
14
(In millions) 
2017 (Remaining)$39.6
2018133.3
201991.9
202063.0
202140.9
Thereafter37.1
Total$405.8
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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.
The changes in the carrying amount of goodwill by segment for the first three quarters of fiscal 20172023 were as follows:
Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
Balance as of year end 2022$2,300.1 $382.1 $471.8 $983.9 $4,137.9 
Additions due to acquisitions28.1 — — 1,391.8 1,419.9 
Assets held for sale— (1.7)(229.4)— (231.1)
Foreign currency translation and other adjustments(2.2)(3.6)2.0 (43.2)(47.0)
Balance as of the end of the third quarter of 2023$2,326.0 $376.8 $244.4 $2,332.5 $5,279.7 
 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 part of the Geospatial segment.

NOTE 5.6. INVENTORIES
Inventories consistedThe components of the following:inventory, net were as follows:
Third Quarter ofYear End
As of20232022
(In millions)  
Raw materials$92.0 $154.9 
Work-in-process9.8 13.1 
Finished goods155.4 234.5 
Total inventories$257.2 $402.5 
 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 6.7. SEGMENT INFORMATION

OperatingWe determined our 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 (our chief operating decision maker or "CODM") in deciding how to allocate resources and assess performance. The CODM evaluates each segment’s performance and allocates resources based on segment operating income before income taxeshow our Chief Operating Decision Maker (“CODM”) views 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:Infrastructure. This segment primarily serves customers working in architecture, engineering, construction, and operations and maintenance.
Geospatial:•Geospatial. This segment primarily serves customers working in surveying, engineering, government, and land management.government.
•Resources and Utilities:Utilities. This segment primarily serves customers working in agriculture, forestry, and utilities.
Transportation:•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.
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 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)     
Third Quarter of 2023
Segment revenue$395.1 $180.7 $184.9 $196.6 $957.3 
Segment operating income113.5 57.9 69.2 35.8 276.4 
Third Quarter of 2022
Segment revenue$363.6 $184.2 $191.7 $145.4 $884.9 
Segment operating income96.7 61.5 64.2 16.0 238.4 
First Three Quarters of 2023
Segment revenue$1,204.6 $526.0 $589.5 $546.2 $2,866.3 
Segment operating income332.6 162.3 209.6 90.0 794.5 
First Three Quarters of 2022
Segment revenue$1,143.8 $585.4 $636.4 $454.2 $2,819.8 
Segment operating income318.8 177.2 212.3 37.0 745.3 
 Reporting Segments
 Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
As of the end of the Third Quarter of 2023
Accounts receivable, net$255.9 $133.0 $78.8 $173.7 $641.4 
Inventories68.8 124.0 11.0 53.4 257.2 
Goodwill2,326.0 376.8 244.4 2,332.5 5,279.7 
As of Year End 2022
Accounts receivable, net$305.1 $137.2 $79.2 $121.8 $643.3 
Inventories93.2 146.1 100.3 62.9 402.5 
Goodwill2,300.1 382.1 471.8 983.9 4,137.9 
A reconciliation of the Company’sour condensed consolidated segment operating income to condensed consolidated income before income taxes iswas as follows:
 Third Quarter ofFirst Three Quarters of
 2023202220232022
(In millions)    
Consolidated segment operating income$276.4 $238.4 $794.5 $745.3 
Unallocated general corporate expenses(25.4)(28.5)(86.4)(91.6)
Amortization of purchased intangible assets(58.9)(31.0)(155.7)(97.9)
Acquisition / divestiture items(22.0)(9.1)(55.5)(20.3)
Stock-based compensation / deferred compensation(37.9)(31.7)(115.4)(82.9)
Restructuring and other costs(10.9)(15.7)(29.6)(38.4)
Consolidated operating income121.3 122.4 351.9 414.2 
Total non-operating income (expense), net(41.9)(4.5)(54.4)63.8 
Consolidated income before taxes$79.4 $117.9 $297.5 $478.0 
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 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
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 is consistent with the Reporting Segment tables above.

 Reporting Segments
 Buildings and InfrastructureGeospatialResources and UtilitiesTransportationTotal
(In millions)     
Third Quarter of 2023
North America$256.1 $85.8 $55.1 $121.4 $518.4 
Europe78.3 51.2 74.6 56.6 260.7 
Asia Pacific51.3 33.2 12.1 9.3 105.9 
Rest of World9.4 10.5 43.1 9.3 72.3 
Total segment revenue$395.1 $180.7 $184.9 $196.6 $957.3 
Third Quarter of 2022
North America$235.8 $84.1 $55.5 $113.0 $488.4 
Europe67.6 52.9 79.6 18.1 218.2 
Asia Pacific52.8 33.8 8.6 7.1 102.3 
Rest of World7.4 13.4 48.0 7.2 76.0 
Total segment revenue$363.6 $184.2 $191.7 $145.4 $884.9 
First Three Quarters of 2023
North America$773.9 $233.0 $159.8 $359.1 $1,525.8 
Europe259.4 158.8 254.9 138.1 811.2 
Asia Pacific148.4 104.7 42.6 23.9 319.6 
Rest of World22.9 29.5 132.2 25.1 209.7 
Total segment revenue$1,204.6 $526.0 $589.5 $546.2 $2,866.3 
First Three Quarters of 2022
North America$710.6 $255.4 $178.8 $354.9 $1,499.7 
Europe263.9 185.4 291.3 58.2 798.8 
Asia Pacific149.6 108.6 41.3 22.1 321.6 
Rest of World19.7 36.0 125.0 19.0 199.7 
Total segment revenue$1,143.8 $585.4 $636.4 $454.2 $2,819.8 

Total revenue in the United States as included in the Condensed Consolidated Statements of Income was $478.6 million and $444.5 million for the third quarter of 2023 and 2022, and $1,401.2 million and $1,358.9 million for the first three quarters of 2023 and 2022. No single customer or country other than the United States accounted for 10% or more of our total revenue.
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NOTE 7.8. DEBT
Debt consisted of the following:
Third Quarter ofYear End
InstrumentDate of Issuance20232022
(In millions)Effective interest rate
Senior Notes:
   Senior Notes, 4.15%, due June 2023June 2018$— $300.0 
   Senior Notes, 4.75%, due December 2024November 20144.95%400.0 400.0 
   Senior Notes, 4.90%, due June 2028June 20185.04%600.0 600.0 
   Senior Notes, 6.10%, due March 2033March 20236.13%800.0 — 
Credit Facilities:
2022 Revolving Credit Facility, due March 2027September 20226.68%210.0 225.0 
Term Loan, due April 2026April 20236.94%500.0 — 
Term Loan, due April 2028April 20237.03%500.0 — 
Uncommitted Credit Facilities, floating rate6.38%58.3 — 
Unamortized discount and issuance costs(14.6)(5.0)
Total debt$3,053.7 $1,520.0 
Less: Short-term debt58.3 300.0 
Long-term debt$2,995.4 $1,220.0 
 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 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. 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 connection 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 third 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.
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 third 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's2023, our debt maturities based on outstanding principal were as follows (in millions):
Year Payable
2023 (Remaining)$58.3 
2024400.0 
2025— 
2026518.8 
2027253.7 
Thereafter1,837.5 
Total$3,068.3 
Year Payable 
2017 (Remaining)$135.4
20180.3
20190.3
2020164.3
2021—
Thereafter400.0
Total$700.3
Senior Notes

All of our senior notes are unsecured obligations. Interest on the senior notes is payable semi-annually in June and December of each year, except for the interest on the 2033 senior notes payable in March and September. Additional details are unchanged from the information disclosed in Note 7 “Debt” of the 2022 Form 10-K.
NOTE 8. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The Company started to invest in available-for-sale securities inDuring the thirdsecond quarter of fiscal 2016.2023, the $300 million senior notes due June 2023 matured and were repaid in full.
2033 Senior Notes
In March 2023, we issued an aggregate principal amount of $800.0 million in senior notes that will mature in March 2033. The proceeds were partly used to finance our acquisition of Transporeon. The interest is payable semi-annually in March and September of each year, commencing in September 2023.
Credit Facilities
2022 Term Loan Credit Agreement
On December 27, 2022, we entered into a $1.0 billion unsecured, delayed draw term loan credit agreement comprised of commitments for a 3-year tranche of $500.0 million and a 5-year tranche of $500.0 million. On April 3, 2023, both variable-rate term loans were drawn to fund the acquisition of Transporeon.
Prepayments are allowed without penalty and cannot be reborrowed.
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Table of Contents
2022 Credit Facility and Amendment
In March 2022, we entered into a credit agreement maturing in March 2027. The 2022 credit facility provides for a five-year, unsecured revolving credit facility in an aggregate principal amount of $1.25 billion, and permits us, subject to the satisfaction of certain conditions, to increase the commitments for revolving loans by an aggregate principal amount of up to $500.0 million. The variable interest rate and commitment fees are based on our current long-term, senior unsecured debt ratings, our leverage ratio, and certain specified sustainability targets.
On December 27, 2022, we entered into an amendment to the 2022 credit facility that made available up to $600.0 million of the existing commitments for the acquisition of Transporeon and increased our maximum permitted leverage ratio following table summarizes the Company’s available-for-sale securities atclosing of the acquisition. On April 3, 2023, we borrowed $225.0 million as part of the proceeds to finance the acquisition. For additional information related to the Transporeon acquisition, see Note 3 “Acquisition” of this report.
Uncommitted Facilities
At the end of the third quarter of fiscal 20172023, we had two $75.0 million, one €100.0 million, and atone £55.0 million revolving credit facilities, which are uncommitted. Generally, these variable-rate uncommitted facilities may be redeemed upon demand. Borrowings under the end of fiscal 2016.uncommitted facilities are classified as short-term debt in the Condensed Consolidated Balance Sheet.
 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

Covenants
The Company realized $0.5 million2022 term loan credit agreement and $1.5 million gains2022 credit facility, as amended, contain customary covenants including, among other requirements, limitations that restrict the Company’s and its subsidiaries’ ability to create liens and enter into sale and leaseback transactions, and restrictions on its available-for-sale securities for the third quarterability of the subsidiaries to incur indebtedness. Further, both debt agreements contain financial covenants that require the maintenance of maximum leverage 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 ofminimum interest coverage ratios. At the end of the third quarter of 2017.2023, we were in compliance with the covenants for each of our debt agreements.

The following table presents the contractual maturities of the Company's available-for-sale investments at the end of the third 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 securities are liquid and may be sold in the future 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 regardless of the contractual maturity date of the securities.

NOTE 9. 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 at the end of the third quarter of 2023Fair Values at the end of 2022
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)
$29.2$—$—$29.2$31.5$—$—$31.5
Derivatives (2)
—0.1—0.1—18.0—18.0
Contingent consideration (3)
——1.01.0——3.13.1
Total assets measured at fair value$29.2$0.1$1.0$30.3$31.5$18.0$3.1$52.6
Liabilities
Deferred compensation plan (1)
$29.2$—$—$29.2$31.5$—$—$31.5
Derivatives (2)
—0.4—0.4—0.2—0.2
Total liabilities measured at fair value$29.2$0.4$—$29.6$31.5$0.2$—$31.7
(1)Represents a self-directed, non-qualified deferred compensation plan for certain executives and other highly compensated employees included in Other non-current assets and Other non-current liabilities on our Condensed Consolidated Balance Sheets. The plan is invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets.
(2)Represents forward currency exchange contracts, and for 2022, a treasury rate lock contract, all that are categorizedincluded in Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets.
(3)Represents arrangements to receive payments from buyers of our divested companies that are included in Other current assets on our Condensed Consolidated Balance Sheets. The fair values are estimated using scenario-based methods based upon estimated future milestones.
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At the end of 2022, derivative assets included foreign currency exchange contracts and a treasury rate lock contract, both related to the acquisition of Transporeon and associated debt and were settled in the tables below based uponfirst two quarters of 2023. See Note 10 “Fair Value Measurements” of the lowest level of significant input to the valuations.
2022 Form 10-K for additional details.
 Fair Values as of the end of the Third Quarter of Fiscal 2017 Fair Values as of Fiscal Year End 2016
(In millions)Level I Level II Level III Total Level I Level II Level III Total
Assets               
  Available-for-sale securities:               
    U.S. Treasury securities (1)$—
 $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 $3.0 billion and $1.5 billion at the end of the third quarter of 2023 and the end of 2022.
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. The fair value of the bank borrowings and promissory notes has been calculated using an estimate of 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 II in the fair value hierarchy.II. The fair values do not give an indication ofindicate the amount that the Companywe would currently have to pay to extinguish any of thisthe debt.
NOTE 10. PRODUCT WARRANTIESDEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS
The Company accruesDeferred Revenue
Changes in our deferred revenue during the third quarter of 2023 and 2022 were as follows:
  Third Quarter ofFirst Three Quarters of
(In millions)2023202220232022
Beginning balance of the period$745.6 $685.2 $737.6 $631.8 
Revenue recognized from prior year-end(107.8)(92.0)(543.0)(453.8)
Billings net of revenue recognized from current year and other54.8 43.6 498.0 458.8 
Ending balance of the period$692.6 $636.8 $692.6 $636.8 
Remaining Performance Obligations
At the end of the third quarter of 2023, approximately $1.5 billion of revenue is expected to be recognized from remaining performance obligations for warranty costswhich goods or services have not been delivered, primarily subscription, software, and software maintenance, and to a lesser extent, hardware and professional services contracts. We expect to recognize $1.1 billion or 70% of our remaining performance obligations as part of its cost of sales based on associated material product costs, technical support, labor costs, and costs incurred by third parties performing work onrevenue during the Company’s behalf. The Company’s expected future costs are primarily estimated based upon historical trends in the volume of product returns within the warranty periodnext 12 months 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 1 year to 2 years.
While the Company engages 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 incurred in correcting a product failure. Should actual product failure rates, material usage, or service delivery costs differ from the estimates, revisionsremainder thereafter. The remaining performance obligations exclude $43.5 million related to the estimated warranty accrual and related costs may be required.pending Trimble Ag JV Transaction.
Changes in the Company’s product warranty liability during the first three quarters of fiscal 2017 are as follows:
(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
NOTE 11. EARNINGS PER SHARE
Basic earnings per share is computed by dividing Net income attributable to Trimble Inc. bybased on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing Net income attributable to Trimble Inc.bybased on the weighted-average number of shares of common stock outstanding during the period increased to include the number ofplus 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, sharesrestricted stock units, contingently issuable stock, and stock to be purchased under the Company’sour 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.plan.
The following table shows the computation of basic and diluted earnings per share:

 Third Quarter ofFirst Three Quarters of
 2023202220232022
(In millions, except per share amounts)    
Numerator:
Net income$74.9 $85.8 $248.3 $364.1 
Denominator:
Weighted-average number of common shares used in basic earnings per share248.6 247.5 248.0 249.1 
Effect of dilutive securities1.1 1.4 1.1 1.7 
Weighted-average number of common shares and dilutive potential common shares used in diluted earnings per share249.7 248.9 249.1 250.8 
Basic earnings per share$0.30 $0.35 $1.00 $1.46 
Diluted earnings per share$0.30 $0.34 $1.00 $1.45 
Antidilutive weighted-average shares (1)
1.3 1.7 1.7 1.5 
 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 third quarter of fiscal 2017, the shares of outstanding stock options(1)    Antidilutive stock-based awards are 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 shares and diluted earnings per share because their effectimpact 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 ofincrease diluted earnings per share because their effect would have been antidilutive.share.
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NOTE 12. INCOME TAXES
For the third quarter, of fiscal 2017, the Company’sour effective income tax rate was 20%5.7%, as compared to 25%27.2% in the corresponding period in fiscal 2016,2022. The decrease was primarily due to aincreases in tax benefit from U.S. federal R&D credit and foreign-derived intangible income in 2023, favorable change in the geographic mix of pre-tax incomeearnings, and stock-based compensationa tax benefits.charge associated with prior year divestiture gains. For the first three quarters, of fiscal 2017, the Company'sour effective income tax rate was 23%16.5%, as compared to 21%23.8% 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%prior year. The decrease was 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 its subsidiaries are subject to U.S. federal and state, and foreign income tax. The Company is currently 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 believesame factors in the merits of its positions, during the fourththird 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 existing reserves are adequate.
Although timing of the resolution and/or closure of audits is not certain, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease (whetherpartially offset by payment, release or a combination of both)lower stock-based compensation deductions in the next 12 months by up to $6.2 million primarily related to the IRS partial settlement discussed above.current year.
The unrecognizedUnrecognized tax benefits of $70.9$62.0 million and $60.5$51.6 million as ofat the end of the third quarter of fiscal 20172023 and fiscal yearat the end 2016, respectively,of 2022, 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 ofAt the end of the third quarter of fiscal 20172023 and fiscal yearat the end 2016, the Company hadof 2022, we accrued $10.6 million and $9.3 million, respectively, for interest and penalties which are recorded in Other non-current liabilitiesof $10.9 million and $8.4 million. Although the 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 ofAt 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 third quarter of fiscal 2017, the Company2023, we had unconditional purchase obligations of approximately $192.6approximately $683.1 million. These unconditional purchase obligations primarily represent (i) open non-cancelablenon-cancellable purchase orders for material purchases with the Company’s vendors. Purchase obligations excludeour inventory vendors, and (ii) various non-cancelable agreements that are cancelable without penalty.

Additionally, the Company haswith certain acquisitions which include additional earn-out cash payments based on estimated future revenues, gross marginsservice providers with minimum 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.fixed commitments.
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 its subsidiaries'our subsidiaries’ property is subject.

21

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaningTable 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:Contents
the portion of our revenue coming 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, recurring revenue, and services;
our belief that increases in recurring revenue from our software and 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 our 2014 Credit Facility, 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;
fluctuations in interest rates and foreign currency exchange rates; and
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.
The forward-looking statements regarding future events and the future results of Trimble Inc. ("Trimble" or "the Company" or "we" or "our" or "us") are based on current expectations, estimates, forecasts, and projections about the industries in which Trimble operates and the beliefs and assumptions of the management of Trimble. Discussions containing such forward-looking statements may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. 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, " 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" below 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 files with the Securities and Exchange Commission, 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 three quarters of 2023. 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 on2022 Form 10-K.
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 report.
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 strategy;
•Increasing focus on software and services;
•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 benefitbenefits 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.
•Geographic expansion with a 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 domestically and abroad. These channels include independent dealers,markets;
•Strategic acquisitions, joint ventures, original equipment manufacturers ("OEM") sales, and distribution alliances with key partners, such as CNH Global, Caterpillar,investments; 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
•Sustainability.

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 toward a more significant mix of recurring revenue as demonstrated by our success in driving annualized recurring revenue (“ARR”) of $1,935.1 million, which represents growth of 25% year-over-year at the end of the third quarter of 2023. Excluding the impact of foreign currency, acquisitions, and servicesdivestitures, ARR organic growth is driving increasedwas 13%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profitability over time and is leading to improved visibility in some of our businesses. Additionally, we continue to maintain focus on new product introductions and transitions to recurring revenue as evidenced by the Transporeon acquisition.
As our solutions have expanded, our go-to-market model has also evolved with a balanced mix between direct, distribution, and OEM customers and an increasing number of enterprise levelas well as enterprise-level customer relationships.

Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, we refer to organic revenue growth, which is a non-GAAP measure. For a full definition of ARR, organic ARR, and organic revenue growth as used in this discussion and analysis, refer to the “Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” found later in this Item 2.
ForImpact of Recent Events on Our Business
Acquisitions and Divestitures
We acquire businesses that align with our long-term growth strategies including our strategic product roadmap and, conversely, we divest certain business that no longer fit those strategies.
On September 28, 2023, we executed a definitive agreement with AGCO that provides for the formation of a JV with AGCO in the mixed fleet precision agriculture market (the “Trimble Ag JV Transaction”). Under the terms of the agreement, we will contribute our precision agriculture business (“Trimble Ag”), excluding certain Global Navigation Satellite System (“GNSS”) and guidance technologies, and AGCO will contribute its JCA Technologies business to the JV. We will sell an interest in the JV to AGCO for $2.0 billion in pre-tax cash proceeds, subject to working capital adjustments. Immediately following the closing of the Trimble Ag JV Transaction, we will own 15% of the JV and AGCO will own 85% of the JV.
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Additionally, we plan to enter into the following agreements with AGCO as part of the overall transaction:
•a seven-year, renewable Supply Agreement through which we will provide key GNSS and guidance technologies to the JV for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions;
•a Technology Transfer and License Agreement to govern the licensing of certain non-divested intellectual property and technology for use by the JV in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by the JV;
•a Trademark License Agreement to govern the licensing of certain Trimble trademarks for use by the JV in the agriculture field;
•a Positioning Services Agreement through which the JV will serve as our channel partner for the positioning services in the agriculture market; and
•a Transition Services Agreement to provide contract manufacturing services for the divested products for two years following closing of the Transaction.
The formation of the JV is expected to better serve farmers with factory fit and aftermarket applications in the mixed fleet precision agriculture market to help farmers drive productivity, efficiency, and sustainability. Additionally, the transaction is expected to (i) simplify our Connect and Scale strategy, (ii) reduce risk of channel transition in the agriculture market, and (iii) enhance our financial profile and flexibility with a resulting higher mix of software, services, and recurring revenue, as well as repaying $1.1 billion of our debt and repurchasing our shares through use of the net proceeds.
The transaction is expected to close in the first half of 2024 and is subject to customary closing conditions, including regulatory approvals. Trimble Ag is reported as a part of our Resources and Utilities segment.
The assets and liabilities of Trimble Ag that are subject to the transaction were classified as held for sale at the end of the third quarter of fiscal 2017, total2023. See Note 4 “Assets Held for Sale” of this report.
On April 3, 2023, we acquired all of the outstanding shares of Transporeon in an all-cash transaction valued at €1.9 billion or $2.1 billion. Transporeon is a Germany-based company and leading cloud-based transportation management software platform that connects key stakeholders across the industry lifecycle to positively impact the optimization of global supply chains, which aligns with our Connect and Scale strategy. By combining Transporeon’s operations with ours, we expect economies of scale and meaningful synergies such as acceleration of recurring revenue, increased by $85.9 million compared toexpansion of the thirdaddressable market, cross-sell opportunities, and enhanced productivity and sustainability solutions for our customers. Transporeon is reported in our Transportation segment. We have included the financial results of Transporeon in our Condensed Consolidated Financial Statements starting in the second quarter of fiscal 2016. By geography, North America2023.
Macroeconomic Conditions
Macroeconomic conditions, including geopolitical tensions, such as the ongoing military conflicts in the Middle East and Europe were significantly upbetween Russia and Ukraine and related sanctions, exchange rate and interest rate volatility, and inflationary pressures, will continue to a lesser extent, Asia-Pacific and the rest 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.evolve globally.
DuringIn the first three quarters of fiscal 2017, we acquired ten businesses, for total cash consideration2023, as compared to the prior year, our organic hardware sales declined and bookings moderated as dealers moved toward lower levels of $333.9 million, in ourinventories due to improved product lead times and macroeconomic concerns. Geospatial, Buildings and Infrastructure, and Resources and Utilities Transportation,all had strong hardware sales in the prior year. Due to previously extended component lead times, we made binding commitments over a longer horizon for certain components. We expect that our inventory levels will normalize over the first half of 2024. However, as our inventory levels continue to normalize, macroeconomic conditions, including rising interest rates and Buildinginflation, could negatively impact the timing of inventory normalization.
Global inflation has risen sharply, and Infrastructure segments. The largest acquisition was Müller-Elektronik,interest rates are rising in an effort to curb inflation. These macroeconomic conditions have had and are expected to have a privately-held German company specializing in implement control and precision farming solutions. Our Condensed Consolidated Statements of Income include the operatingnegative impact on our results of the businesses from the dates of acquisition.
In addition, in the first quarter of 2017,operations. Additionally, 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 atmay experience higher borrowing costs on variable-rate debt. At the end of the government’s fiscal year for additional purchases at the endthird quarter of 2023, our third fiscal quarter in Septemberoutstanding balance of each year. Our agricultural equipment business revenues, within our Resources and Utilities segment, have historically been the highest in the first quarter, followed by the second quarter, reflecting buying in anticipationvariable-rate debt was $1.3 billion.
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Table 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 seasonality in the future. Changes in global macroeconomic conditions could also impact the level 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:
 Third Quarter ofFirst Three Quarters of
 20232022Dollar Change% Change20232022Dollar Change% Change
(In millions, except per share amounts)    
Revenue:
Product$444.0 $472.5 $(28.5)(6)%$1,368.9 $1,570.3 $(201.4)(13)%
Subscription and services513.3 412.4 100.9 24%1,497.4 1,249.5 247.9 20%
Total revenue$957.3 $884.9 $72.4 8%$2,866.3 $2,819.8 $46.5 2%
Gross margin$590.2 $515.4 $74.8 15%$1,755.5 $1,602.5 $153.0 10%
Gross margin as a % of revenue61.7 %58.2 %61.2 %56.8 %
Operating income$121.3 $122.4 $(1.1)(1)%$351.9 $414.2 $(62.3)(15)%
Operating income as a % of revenue12.7 %13.8 %12.3 %14.7 %
Diluted earnings per share$0.30 $0.34 $(0.04)(12)%$1.00 $1.45 $(0.45)(31)%
Non-GAAP operating income (1)
$251.0 $209.9 $41.1 20%$708.1 $653.7 $54.4 8%
Non-GAAP operating income as a % of revenue(1)
26.2 %23.7 %24.7 %23.2 %
Non-GAAP diluted earnings per share (1)
$0.68 $0.66 $0.02 3%$2.04 $2.04 $— NM
Annualized Recurring Revenue (“ARR”) (1)
$1,935.1 $1,546.8 $388.3 25%N/AN/AN/AN/A
(1)    Refer to“Supplemental Disclosure of Non-GAAP Financial Measures and should be read in conjunction with the narrative descriptions below:Annualized Recurring Revenue” of this report for definitions.
24
 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%
Table of Contents
Third Quarterand First Three Quartersof 2023 as Compared to 2022
Revenue
For the third quarter of fiscal 2017,
Change versus the corresponding period in 2022Third Quarter of 2023First Three Quarters of 2023
% Change% Change
 ProductSubscription and ServicesTotal RevenueProductSubscription and ServicesTotal Revenue
Change in Revenue(6)%24 %8 %(13)%20 %2 %
Acquisitions1 %11 %6 %1 %9 %4 %
Divestitures— %(1)%(1)%(4)%(1)%(3)%
Foreign currency exchange1 %1 %1 %— %(1)%— %
Organic growth(8)%13 %2 %(10)%13 %1 %
Organic total revenue increased $85.9 million or 15% compared to the third quarter of fiscal 2016. Product revenue increased $61.2 million or 16%, service revenue increased $9.4 million or 9%, and subscription revenue increased $15.3 million or 16%. 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%.
Forincreased for the third quarter and first three quarters, with strong growth coming from recurring revenue.
Organic product revenue decreased for the third quarter due to weakening end-user demand for our hardware products reflecting lower demand across markets, amid macroeconomic concerns. The first three quarters’ decline was also impacted by changes in dealer inventory levels due to improved product lead times. The decreases were in Buildings and Infrastructure, Resources and Utilities, and Geospatial.
Organic subscription and services revenue for the third quarter and first three quarters was up primarily due to strong growth across all segments, particularly for Buildings and Infrastructure. The recurring growth was driven by increased subscription and term license sales to new and existing customers, as evidenced by overall organic ARR growth of fiscal 2017, product, service13%.
Gross Margin
Gross margin and gross margin as a percentage of revenue increased for the third quarter and first three quarters due to strong growth of software and subscription revenue, increasedfavorable pricing and costs, as well as a higher margin mix within our product offerings.
Operating Income
Operating income and operating income as a percentage of revenue decreased for the third quarter and first three quarters primarily due to organic growth across all segments. To a lesser extent, acquisitions contributedincreased operating expense, partially offset by gross margin expansion. Operating expense increased primarily associated with the Transporeon acquisition, including higher amortization of purchased intangible assets and acquisition costs. In addition, we incurred higher research and development and general and administrative costs, including investments related to growth, particularly in productour Connect and service revenue.Scale strategy.
For the third quarter of fiscal 2017, on a segment basis, Buildings
Research and Infrastructure revenue increased $25.2 million or 13%Development, Sales and Marketing, and General and Administrative Expense
The following table shows research and development (“R&D”), Geospatial revenue increased $9.8 million or 6%, Resourcessales and Utilities revenue increased $26.9 million or 31%marketing (“S&M”), and Transportationgeneral and administrative (“G&A”) expense along with these expenses as a percentage of revenue for the periods indicated:
 Third Quarter ofFirst Three Quarters of
 20232022Dollar Change% Change20232022Dollar Change% Change
(In millions)    
Research and development$162.5 $127.0 $35.5 28%$496.6 $407.4 $89.2 22%
Percentage of revenue17.0 %14.4 %17.3 %14.4 %
Sales and marketing$146.2 $137.1 $9.1 7%$436.9 $407.9 $29.0 7%
Percentage of revenue15.3 %15.5 %15.2 %14.5 %
General and administrative$117.2 $109.6 $7.6 7%$369.2 $318.0 $51.2 16%
Percentage of revenue12.2 %12.4 %12.9 %11.3 %
Total$425.9 $373.7 $52.2 14%$1,302.7 $1,133.3 $169.4 15%
25
Table of Contents
R&D expense increased $24.0 million or 16%, compared tofor the third quarter and first three quarters primarily due to higher compensation expense and the impact of fiscal 2016.the Transporeon acquisition. For the first three quarters, the increase was partially offset by divestitures. We believe that the development and introduction of 2017, Buildingsnew solutions are critical to our future success, and Infrastructure revenuewe expect to continue the active development of new products.
S&M expense 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.
Forfor the third quarter and first three quarters of fiscal 2017, Buildings and Infrastructure revenue increased primarily due to strong civil engineering and construction and building construction organic growth. Geospatial revenue increased mainly due to strong geospatial and surveying organic growth. Resources and Utilities revenue increased due to acquisitions, including the impact 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.
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 million 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, compared to 52.9% and 52.1% for the corresponding periods in fiscal 2016. For the third quarter of fiscal 2017, the decrease in gross margin percentage was due to higher intangibles and inventory step-up costs due to amortization from new acquisitions during the quarter and product mix.Transporeon acquisition. For the first three quarters, of fiscal 2017, the increase in gross margin percentagealso was due to lower intangibles amortization due to fully amortized intangibles from prior acquisitions,driven by higher consulting, advertising, and trade show costs, partially offset by intangibles from new acquisitions. Excludingdivestitures.
G&A expense increased for the third quarter and first three quarters primarily due to the impact of the Transporeon acquisition and higher compensation expense.
Amortization of Purchased Intangible Assets
 Third Quarter ofFirst Three Quarters of
 20232022Dollar Change% Change20232022Dollar Change% Change
(In millions)    
Cost of sales$27.7 $19.9 $7.8 39%$80.9 $63.4 $17.5 28%
Operating expenses31.2 11.1 20.1 181%74.8 34.5 40.3 117%
Total amortization expense of purchased intangibles$58.9 $31.0 $27.9 90%$155.7 $97.9 $57.8 59%
Total amortization expense of purchased intangibles as a percentage of revenue6 %4 %5 %3 %
Total amortization expense of purchased intangibles increased for the third quarter and first three quarters primarily due to amortization gross margin percentage was relatively flat period over period.of intangibles acquired from the Transporeon acquisition, which were not applicable in the prior year.
OperatingNon-operating Income (Expense), Net
OperatingThe components of non-operating income increased by $8.7 million and $57.5 million(expense), net, were as follows:
 Third Quarter ofFirst Three Quarters of
 20232022Dollar Change% Change20232022Dollar Change% Change
(In millions)    
Divestitures gain, net$5.5 $6.0 $(0.5)(8)%$10.6 $103.1 $(92.5)(90)%
Interest expense, net(46.8)(15.6)(31.2)200%(113.2)(46.9)(66.3)141%
Income from equity method investments, net5.2 6.8 (1.6)(24)%24.6 22.3 2.3 10%
Other income (expense), net(5.8)(1.7)(4.1)241%23.6 (14.7)38.3 (261)%
Total non-operating income (expense), net$(41.9)$(4.5)$(37.4)831%$(54.4)$63.8 $(118.2)(185)%
Non-operating expense, net increased for the third quarter and the first three quarters of fiscal 2017, respectively, compared primarily due tolower net gains from divestitures and higher interest expense from the corresponding periods in fiscal 2016. Operating income as a percentage of total revenue was 9.6% and 9.4% fornew debt associated with the third quarter andTransporeon acquisition. For the first three quarters, of fiscal 2017, respectively, comparedthe increase was partially offset by a $27.6 million foreign currency exchange contract gain related to 9.5% and 7.1% for the corresponding periodsTransporeon acquisition as well as fluctuations in fiscal 2016.the deferred compensation plan assets included in Other income (expense), net.
Income Tax Provision
For the third quarter, of fiscal 2017,our effective income tax rate was 5.7%, as compared to 27.2% in the corresponding period in 2022. The decrease was primarily due to increases in operatingtax benefit from U.S. federal R&D credit and foreign-derived intangible income in 2023, favorable geographic mix of earnings, and operating income percentage were attributable to revenue expansion across all segments, and operating expense control, partially offset by increased amortization of purchased intangibles.a tax charge associated with prior year divestiture gains. For the first three quarters, of fiscal 2017,our effective income tax rate was 16.5%, as compared to 23.8% in the increasesprior year. The decrease was primarily due to the same factors in operating income and operating income percentage were attributable to revenue expansion, operating expense control andthe third quarter, partially offset by lower amortization of purchased intangible assets.stock-based compensation deductions in the current year.
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 with the first quarter of fiscal 2017, we are reportingWe 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 7 “Segment Information” of this report.
Operating income is revenue less cost
26
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:
 Third Quarter ofFirst Three Quarters of
 20232022Dollar Change% Change20232022Dollar Change% Change
(In millions)  
Buildings and Infrastructure
Segment revenue$395.1 $363.6 $31.5 9%$1,204.6 $1,143.8 $60.8 5%
Segment revenue as a % of total revenue41 %41 %42 %41 %
Segment operating income$113.5 $96.7 16.8 17%$332.6 $318.8 13.8 4%
Segment operating income as a % of segment revenue28.7 %26.6 %27.6 %27.9 %
Geospatial
Segment revenue$180.7 $184.2 (3.5)(2)%$526.0 $585.4 (59.4)(10)%
Segment revenue as a % of total revenue19 %21 %18 %21 %
Segment operating income$57.9 $61.5 (3.6)(6)%$162.3 $177.2 (14.9)(8)%
Segment operating income as a % of segment revenue32.0 %33.4 %30.9 %30.3 %
Resources and Utilities
Segment revenue$184.9 $191.7 (6.8)(4)%$589.5 $636.4 (46.9)(7)%
Segment revenue as a % of total revenue19 %22 %21 %22 %
Segment operating income$69.2 $64.2 5.0 8%$209.6 $212.3 (2.7)(1)%
Segment operating income as a % of segment revenue37.4 %33.5 %35.6 %33.4 %
Transportation
Segment revenue$196.6 $145.4 51.2 35%$546.2 $454.2 92.0 20%
Segment revenue as a % of total revenue21 %16 %19 %16 %
Segment operating income$35.8 $16.0 19.8 124%$90.0 $37.0 53.0 143%
Segment operating income as a % of segment revenue18.2 %11.0 %16.5 %8.1 %
 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 ofFirst Three Quarters of
 2023202220232022
(In millions)    
Consolidated segment operating income$276.4 $238.4 $794.5 $745.3 
Unallocated general corporate expenses(25.4)(28.5)(86.4)(91.6)
Amortization of purchased intangible assets(58.9)(31.0)(155.7)(97.9)
Acquisition / divestiture items(22.0)(9.1)(55.5)(20.3)
Stock-based compensation / deferred compensation(37.9)(31.7)(115.4)(82.9)
Restructuring and other costs(10.9)(15.7)(29.6)(38.4)
Consolidated operating income121.3 122.4 351.9 414.2 
Total non-operating income (expense), net(41.9)(4.5)(54.4)63.8 
Consolidated income before taxes$79.4 $117.9 $297.5 $478.0 
27
 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
Buildings and Infrastructure
Buildings and Infrastructure
 Third Quarter of 2023First Three Quarters of 2023
Change versus the corresponding period in 2022% Change% Change
Change in Revenue - Buildings and Infrastructure9 %5 %
Acquisitions2 %3 %
Divestitures— %(3)%
Foreign currency exchange1 %(1)%
Organic growth6 %6 %
Organic revenue increased by $25.2 million or 13% and $59.5 million or 11% for the third quarter and first three quarters due to strong demand for our subscription and term license software and good net retention. The increases resulted from higher sales to new and existing customers as well as conversions to recurring offerings. Perpetual software revenue increased due to civil construction software application sales. In the third quarter, the increase in organic revenue was offset by lower civil construction hardware sales due to weakening end-user demand. For the first three quarters, of fiscal 2017, respectively, compared to the corresponding periodsorganic revenue was also negatively impacted by changes in fiscal 2016. Segment operating income increased $11.3 million or 28% 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.dealer inventory levels.
The revenue increase for the third quarter and the first three quarters of fiscal 2017 was primarily due to organic growth in civil engineering and construction products. Building construction, including our architecture and design, structural engineering, and mechanical, electrical and plumbing products also contributed to growth. In the third quarter, Buildings and Infrastructure

experienced strong growth in markets such as North America, Europe, and Asia Pacific, particularly in Japan and Australia. Operating income increased for the third quarter and the first three quarters of fiscal 2017, primarily due to higher revenue and gross margin expansion, andoffset by increased operating expense control across the segment.
Geospatial
Geospatialassociated with revenue growth as well as investments, including our Connect and Scale strategy. Operating income as a percentage of revenue increased by $9.8 million or 6% and $8.8 million or 2% for the third quarter anddue to the same factors. Operating income as a percentage of revenue was relatively flat for the first three quarters.
Geospatial
 Third Quarter of 2023First Three Quarters of 2023
Change versus the corresponding period in 2022% Change% Change
Change in Revenue - Geospatial(2)%(10)%
Divestitures(1)%(5)%
Foreign currency exchange1 %— %
Organic growth(2)%(5)%
Organic revenue decreased for the third quarter due to weakening end-user demand, partially offset by higher U.S. Federal government sales. For the first three quarters, of fiscal 2017, respectively, compared to the corresponding periodshardware and related perpetual software sales were also negatively impacted by changes in fiscal 2016. Segment operatingdealer inventory levels.
Operating income increased by $1.4 million or 4% and $4.9 million or 5% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
The revenue increase decreased for the third quarter and first three quarters of fiscal 2017 was primarily due to geospatial organic growth for opticalreduced revenue, partially offset by gross margin expansion and Global Navigation Satellite Systems (GNSS) products, including the new SX 10, our scanning total station, and end market diversification. Inoperating expense control. Operating income as a percentage of revenue decreased for the third quarter Geospatial experienced growthdue to the same factors. Operating income as a percentage of revenue was relatively flat for the first three quarters.
Resources and Utilities
 Third Quarter of 2023First Three Quarters of 2023
Change versus the corresponding period in 2022% Change% Change
Change in Revenue - Resources and Utilities(4)%(7)%
Acquisitions— %1 %
Divestitures(1)%(1)%
Foreign currency exchange1 %— %
Organic growth(4)%(7)%
Organic revenue decreased for the third quarter and first three quarters from weaker dealer aftermarket sales due to robust market strength in most regions including North Americathe prior year and Europe. impacts related to changes in our distribution network. The declines were partially offset by an increase in subscription and services revenue, mainly from positioning services, forestry, and utilities businesses.
Operating income and operating income as a percentage of revenue increased for the third quarter and the first three quarters of fiscal 2017 primarily due to revenuegross margin expansion, partially offset by higher operating expense, including trade show costs.
Resources and Utilities
Resources and Utilities revenue increased by $26.9 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.expense. 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. Segment operating income increased by $4.7 million or 18% and $11.5 million or 16% for the third quarter and the first three quarters of fiscal 2017, respectively, compared to the corresponding periods in fiscal 2016.
Transportation revenue increased for the third quarter and the first three quarters of fiscal 2017 primarily due to continued organic growth 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. 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.

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, the increase in the third quarter of fiscal 2017 was primarily due to $4.0 million in expense from acquisitions not applicable in the prior corresponding period, a $3.6 million increase in compensation expense, and a $1.4 million increase due to unfavorable foreign exchange rates, partially offset by a $1.9 million decrease in consulting expense, and a $1.4 million decrease in other expense.
Compared to the prior year, the increase in 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 due to a $6.5 million increase in compensation expense, $3.3 million in expense from acquisitions not applicable in 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 to 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 due 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, and a $0.5 million increase due to unfavorable foreign exchange rates.

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 third 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 expense 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 primarilyrelatively flat, and operating income as a percentage of revenue was slightly up 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.gross margin expansion.
Income Tax Provision
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Our effective income tax rate Transportation
 Third Quarter of 2023First Three Quarters of 2023
Change versus the corresponding period in 2022% Change% Change
Change in Revenue - Transportation35 %20 %
Acquisitions28 %18 %
Divestitures(1)%(3)%
Foreign currency exchange1 %— %
Organic growth7 %5 %
Organic revenue increasedfor 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%primarily driven by enterprise and MAPS subscription revenue growth. Additionally, North American Mobility hardware sales increased in the corresponding period in fiscal 2016, primarily duethird quarter.

toOperating income and operating income as a one time discrete tax benefit frompercentage of revenue increased for the divestiture of the Advance Public Safety business in the secondthird 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% and first three quarters 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 lease commitments incurred in the normal course of business, we do 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.
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 agreed 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 amountimpact of the claim. From time to time, in connection with divesting some of our businesses or assets, we may also indemnify purchasers for certain matters in the normal course of business, suchTransporeon acquisition, as breaches of representations, covenants or excluded liabilities. In addition, we entered into indemnification agreements with our officerswell as organic revenue growth, gross margin expansion, and directors, and our bylaws contain similar indemnification obligations to our agents.targeted cost reductions.
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 ofYear End
As of20232022Dollar Change% Change
(In millions, except percentages)  
Cash and cash equivalents (1)
$222.9 $271.0 $(48.1)(18)%
As a percentage of total assets2.4 %3.7 %
Principal balance of outstanding debt$3,068.3 $1,525.0 $1,543.3 101 %
 First Three Quarters of
 20232022Dollar Change% Change
(In millions)  
Net cash provided by operating activities$498.2 $285.1 $213.1 75 %
Net cash used in investing activities(2,064.4)(152.2)(1,912.2)1256 %
Net cash provided by (used in) financing activities1,520.7 (115.0)1,635.7 (1422)%
Effect of exchange rate changes on cash and cash equivalents(2.6)(34.9)32.3 (93)%
Net decrease in cash and cash equivalents$(48.1)$(17.0)
(1) Includes $6.1 million of cash and cash equivalents classified as held for sale as of September 29, 2023.
 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
Operating Activities

The increase in cash provided by operating activities was primarily driven by a reduction in inventory purchases in the current year, and incentive compensation payouts and tax payments in the prior year. The increase was partially offset by a decrease in deferred revenue due to the timing of billings and higher interest payments.
Investing Activities
The increase in cash used in investing activities was primarily due to the Transporeon acquisition and higher divestiture proceeds in the prior year.
Financing Activities
The increase in cash provided by financing activities was driven by proceeds from our $800.0 million issuance of the 2033 senior notes, borrowings of $1.0 billion in term loans in the current year, and common stock repurchases occurring in the prior year. The increase was partially offset by the repayment of the 2023 senior notes.
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",along with cash provided by operations will be sufficient in the foreseeable future to meet our anticipated operating cash needs, debt service, planned capital expenditures related to our Connect and stock repurchasesScale strategy, and any acquisitions.
Our 2022 credit facility allows us to borrow up to $1.25 billion, with an option to increase the borrowings up to $1.75 billion with lender approval. As of September 29, 2023, $210.0 million was outstanding under the stock repurchase program for at least2022 credit facility.
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Our 2023 senior notes totaling $300.0 million matured and were paid in June 2023.
In the next twelve months.second quarter of 2023, we acquired Transporeon, which was funded through a combination of $1.0 billion of term loans, $225.0 million drawn on the 2022 credit facility, as amended, and the 2033 senior notes, see Note 3 “Acquisition” of this report.
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 ofIn the third quarter of fiscal 20172023, we executed a definitive agreement to contribute our Trimble Ag business to a newly formed JV with AGCO and assell 85% of the end stake in the JV to AGCO for $2.0 billion in pre-tax cash proceeds, subject to certain adjustments. See Note 4 “Assets Held for Sale”of fiscal 2016. Our accounts receivable days sales outstanding are calculated based on ending accounts receivable, net, divided by revenuethis report. Although we will continue to evaluate the optimal capital structure for our business following the corresponding fiscal quarter, times a quarterly average of 91 days. Our inventory turns were 5.2 ascompletion of the endpending sale, we expect to use the $1.5 billion of the third quarter of fiscal 2017, comparedestimated proceeds after tax 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 purchasedrepay approximately $1.1 billion in advance to reduce leads times. debt and repurchase shares.
As a result inventory turns may decrease.of R&D cost capitalization for tax purposes, our tax cash costs in 2022 were approximately $88.0 million higher than they would have been had R&D costs continued to be expensed upfront for tax purposes. In 2023, we are expecting to pay approximately $60.0 million relating to this provision. The majority relates to Federal tax liability and will be paid during the fourth quarter of 2023, as we qualified for payment postponement under the IRS relief initiative for California disaster area taxpayers.
Debt
Notes
In November 2014, we issued $400.0 million of Senior Notes (the "Notes") in a public offering registered withOur cash requirements have not otherwise materially changed since 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 on2022 Form 10-K.
2014 Credit Facility
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In November 2014, we entered into a five-year credit agreement with a group
Table 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 outstandingContents

under the 2014 Credit Facility was 2.48% and 1.80% at the end of the third quarter of fiscal 2017 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.
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 TO NON-GAAP FINANCIAL MEASURES AND ANNUALIZED RECURRING REVENUE
OurTo supplement our consolidated financial information, we included non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP measures. GAAP. We believe non-GAAP financial measures provide useful information to investors and others in understanding our “core operating performance”, which excludes (i) the effect of non-cash items and certain variable charges not expected to recur; and (ii) transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. Lastly, we believe that our core operating performance offers a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors.
Organic revenue growth is a non-GAAP measure that refers to revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures. We believe organic revenue growth provides useful information in evaluating the results of our business because it excludes items that are not indicative of ongoing performance or impact comparability with the prior year. We provide a reconciliation table showing the change in revenue growth to organic revenue growth in the “Results of Operations” section found earlier in this Item 2.
In addition to providing non-GAAP financial measures, we disclose Annualized Recurring Revenue (“ARR”) to give the investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue. ARR is calculated by taking our subscription, maintenance and support, and recurring transaction revenue for the current quarter and adding the portion of the contract value of all of our term licenses attributable to the current quarter, and dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. Organic ARR refers to annualized recurring revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures. ARR and organic ARR should be viewed independently of revenue and deferred revenue as they are performance measures and are not intended to be combined with or to replace either of those items.
The non-GAAP financial measures, included in the following tables as well as detaileddefinitions, and explanations to the adjustments to comparable GAAP measures are set forthincluded below:
 Third Quarter ofFirst Three Quarters of
  2023202220232022
  Dollar% ofDollar% ofDollar% ofDollar% of
(In millions, except per share amounts) AmountRevenueAmountRevenueAmountRevenueAmountRevenue
REVENUE:
GAAP revenue:$957.3 $884.9 $2,866.3 $2,819.8 
GROSS MARGIN:
GAAP gross margin:$590.2 61.7 %$515.4 58.2 %$1,755.5 61.2 %$1,602.5 56.8 %
Amortization of purchased intangible assets(A)27.7 19.9 80.9 63.4 
Acquisition / divestiture items(B)— — 0.4 — 
Stock-based compensation / deferred compensation(C)3.8 3.4 11.4 8.7 
Restructuring and other costs(D)0.1 (0.1)(0.6)1.0 
Non-GAAP gross margin:$621.8 65.0 %$538.6 60.9 %$1,847.6 64.5 %$1,675.6 59.4 %
OPERATING EXPENSES:
GAAP operating expenses:$468.9 49.0 %$393.0 44.4 %$1,403.6 49.0 %$1,188.3 42.1 %
Amortization of purchased intangible assets(A)(31.2)(11.1)(74.8)(34.5)
Acquisition / divestiture items(B)(22.0)(9.1)(55.1)(20.3)
Stock-based compensation / deferred compensation(C)(34.1)(28.3)(104.0)(74.2)
Restructuring and other costs(D)(10.8)(15.8)(30.2)(37.4)
Non-GAAP operating expenses:$370.8 38.7 %$328.7 37.1 %$1,139.5 39.8 %$1,021.9 36.2 %
OPERATING INCOME:
GAAP operating income:$121.3 12.7 %$122.4 13.8 %$351.9 12.3 %$414.2 14.7 %
Amortization of purchased intangible assets(A)58.9 31.0 155.7 97.9 
Acquisition / divestiture items(B)22.0 9.1 55.5 20.3 
Stock-based compensation / deferred compensation(C)37.9 31.7 115.4 82.9 
Restructuring and other costs(D)10.9 15.7 29.6 38.4 
Non-GAAP operating income:$251.0 26.2 %$209.9 23.7 %$708.1 24.7 %$653.7 23.2 %
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 Third Quarter ofFirst Three Quarters of
  2023202220232022
NON-OPERATING INCOME (EXPENSE), NET:
GAAP non-operating income (expense), net:$(41.9)$(4.5)$(54.4)$63.8 
Acquisition / divestiture items(B)(5.1)(5.6)(37.6)(103.0)
Deferred compensation(C)0.8 0.2 (2.9)10.5 
Restructuring and other costs(D)0.1 — 1.4 0.1 
Non-GAAP non-operating expense, net:$(46.1)$(9.9)$(93.5)$(28.6)
   GAAP and Non-GAAP Tax Rate %GAAP and Non-GAAP Tax Rate %GAAP and Non-GAAP Tax Rate %GAAP and Non-GAAP Tax Rate %
(G)(G)(G)(G)
INCOME TAX PROVISION:
GAAP income tax provision:$4.5 5.7 %$32.1 27.2 %$49.2 16.5 %$113.9 23.8 %
Non-GAAP items tax effected(E)7.2 22.3 48.6 34.7 
Difference in GAAP and Non-GAAP tax rate(F)23.0 (18.4)9.7 (33.9)
Non-GAAP income tax provision:$34.7 16.9 %$36.0 18.0 %$107.5 17.5 %$114.7 18.3 %
NET INCOME:
GAAP net income:$74.9 $85.8 $248.3 $364.1 
Amortization of purchased intangible assets(A)58.9 31.0 155.7 97.9 
Acquisition / divestiture items(B)16.9 3.5 17.9 (82.7)
Stock-based compensation / deferred compensation(C)38.7 31.9 112.5 93.4 
Restructuring and other costs(D)11.0 15.7 31.0 38.5 
Non-GAAP tax adjustments(E) - (F)(30.2)(3.9)(58.3)(0.8)
Non-GAAP net income:$170.2 $164.0 $507.1 $510.4 
DILUTED NET INCOME PER SHARE:
GAAP diluted net income per share:$0.30 $0.34 $1.00 $1.45 
Amortization of purchased intangible assets(A)0.24 0.13 0.63 0.39 
Acquisition / divestiture items(B)0.07 0.01 0.07 (0.33)
Stock-based compensation / deferred compensation(C)0.15 0.13 0.45 0.38 
Restructuring and other costs(D)0.04 0.06 0.12 0.15 
Non-GAAP tax adjustments(E) - (F)(0.12)(0.01)(0.23)— 
Non-GAAP diluted net income per share:$0.68 $0.66 $2.04 $2.04 
ADJUSTED EBITDA:
GAAP net income:$74.9 $85.8 $248.3 $364.1 
Non-operating income (expense), net and income tax provision46.4 36.6 103.6 50.1 
GAAP operating income:121.3 122.4 351.9 414.2 
Amortization of purchased intangible assets(A)58.9 31.0 155.7 97.9 
Acquisition / divestiture items(B)22.0 9.1 55.5 20.3 
Stock-based compensation / deferred compensation(C)37.9 31.7 115.4 82.9 
Restructuring and other costs(D)10.9 15.7 29.6 38.4 
Non-GAAP operating income:251.0 209.9 708.1 653.7 
Depreciation expense and cloud computing amortization12.0 11.4 35.8 32.9 
Income from equity method investments, net5.2 6.8 24.6 22.3 
Adjusted EBITDA$268.2 28.0 %$228.1 25.8 %$768.5 26.8 %$708.9 25.1 %
Non-GAAP Definitions
Non-GAAP gross margin
We define Non-GAAP gross margin as GAAP gross margin, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs.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.
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Non-GAAP gross margin excludes restructuring charges,operating expenses
We define Non-GAAP operating expenses as GAAP operating expenses, excluding the effects of 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. We believe that these exclusions offer investors additional information that may be useful to view trends in our gross margin performance.

Non-GAAP operating expenses

restructuring and other costs. We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue.
Non-GAAP operating expenses exclude restructuring charges,income
We define Non-GAAP operating income as GAAP operating income, excluding the effects of amortization of purchased intangible assets, stock-based compensation, acquisition/divestiture items, associated with externalstock-based compensation, deferred compensation, and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration,restructuring and other required closing costs, and executive transition costs from GAAP operating expenses. We believe that these exclusions offer investors supplemental information to facilitate comparison of our operating expenses to our prior results.
Non-GAAP operating income

costs.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, amortization of purchased intangible assets, 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, and other required closing costs, and executive transition costs. We believe that these exclusions offer an alternative means for our investors to evaluate current operating performance compared to results of other periods.

Non-GAAP non-operating expense, net
We define Non-GAAP non-operating expense, net as GAAP non-operating income (expense), net,

excluding acquisition/divestiture items, deferred compensation, and restructuring and other costs.We believe this measure helps investors evaluate our non-operating incomeexpense trends. Non-GAAP non-operating income (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. We believe that these exclusions provide investors with a supplemental view of our ongoing financial results.
Non-GAAP income tax provision
We believe that providing investors with the non-GAAPdefine Non-GAAP income tax provision is beneficialas GAAP income tax provision, excluding charges and benefits such as net deferred tax impacts resulting from the non-U.S. intercompany transfer of intellectual property, tax law changes, and significant one-time reserve releases upon the statute of limitations expirations. We believe this measure helps investors 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.
Non-GAAP net income
We define Non-GAAP net income as GAAP net income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments.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, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transition costs, and non-GAAP tax adjustments from GAAP net income. We believe our investors benefit from understanding these exclusions and from an alternative view of our net income performance compared to our past net income performance.
Non-GAAP diluted net income per share
We define Non-GAAP diluted net income per share as GAAP diluted net income per share, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments.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
Adjusted EBITDA
We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is not intended to purport to be an alternative to net income per share excludes restructuring charges,or operating income as a measure of operating performance or cash flow from operating activities as a measure of liquidity. Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business because it facilitates 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 of purchased intangibles and cloud computing costs.
Explanations of Non-GAAP adjustments
(A).Amortization of purchased intangible assets. Non-GAAP gross margin and operating expenses exclude the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed.
(B).Acquisition / divestiture items. Non-GAAP gross margin and operating expenses exclude costs consisting of external and incremental costs resulting directly from acquisitions, divestitures, and strategic investment activities such as legal, due diligence, integration, and other closing costs, including the acceleration of acquisition stock options and adjustments to the fair value of earn-out liabilities. Non-GAAP non-operating expense, net, excludes unusual one-time acquisition/divestiture charges, including foreign currency exchange rate gains/losses related to an acquisition, divestiture gains/losses, and strategic investment impairments. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.
(C).Stock-based compensation / deferred compensation. Non-GAAP gross margin and operating expenses exclude stock-based compensation amortizationand income or expense associated with movement in our non-qualified deferred compensation plan
33
Table of acquisition-related inventory step-up, acquisition/divestitureContents
liabilities. Changes in non-qualified deferred compensation plan assets, included in non-operating expense, net, offset the income or expense in the plan liabilities.
(D).Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring and other costs comprised of termination benefits related to reductions in employee headcount and closure or exit of facilities, executive severance agreements, business exit costs, as well as a $20 million commitment to donate to the Trimble Foundation that was paid over four quarters ending in the first quarter of 2023.
(E).Non-GAAP items executive transition costs,tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (D) on non-GAAP net income.
(F).Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP tax adjustmentsrates 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 GAAP diluted net income per share. We believe that these exclusions offer investors a useful viewnon-U.S. intercompany transfer of our diluted net income per share compared to our past diluted net income per share.intellectual property and significant one-time reserve releases upon statute of limitations expirations.
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 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 relating to restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transition costs,(G).GAAP and non-GAAP tax adjustments. For detailed explanations of the adjustments made to comparable GAAP measures, see items ( A ) - ( I ) below.
  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 % 

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
   —
   

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 %.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, compared to 19.0% and 16.8% for the corresponding periods in fiscal 2016.non-GAAP income before taxes.
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 DISCLOSUREDISCLOSURES 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 Boardboard of Directors.directors.
Market Interest Rate Risk
There have been no significant changesOur cash equivalents consisted primarily of interest and non-interest bearing bank deposits as well as bank time deposits. The main objective of these instruments is safety of principal and liquidity while maximizing return, without significantly increasing risk. Due to the nature of our cash equivalents that are readily convertible to cash, we do not anticipate any material effect on our portfolio due to fluctuations in interest rates.
In the second quarter of 2023, we borrowed $1.2 billion of variable-rate debt in conjunction with the Transporeon acquisition. At the end of the third quarter of 2023, our outstanding balance of variable-rate debt was $1.3 billion. We are exposed to market risk due to the possibility of changing interest rate risk assessment. Refer torates. While not predictive, a hypothetical 50 basis point increase in interest rates on our 2016 Annual Report on Form 10-K on page 49.variable-rate debt would result in an increase of approximately $6.4 million in annual interest expense.
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 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 fromfrom expectations. In the third quarter, of fiscal 2017, revenue and operating income were positively impacted byfavorable impacts from foreign currency exchange rates by $6.6were $9.6 million and $0.7 million, respectively. Currency translation added approximately 1% ofon revenue and 1%$0.5 million on operating income. In the first three quarters of 2023, unfavorable impacts from foreign currency exchange rates were $8.8 million on revenue and $5.8 million on operating income in the third quarter of fiscal 2017.income.
We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on cash, debt, and certain trade and inter-companyintercompany receivables and payables, primarily denominated in Euro, British pound andCanadian Dollars, New Zealand Dollars, British Pound, and Canadian dollars. Brazilian Real. 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 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 forwardexchange contracts to hedge the purchase price of some of our larger business acquisitions.
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Our foreign currency contracts are marked-to-market through earnings every period and generally range in maturity from one to two months, or from four to six months for acquisitions. We do not enter into foreign currency contracts for trading purposes. Foreign currency forward contracts outstanding as ofat the end of the third quarter of fiscal 20172023 and fiscal yearat the end 2016of 2022 are summarized as follows (in millions):

 Third Quarter of 2023Year End 2022
 Nominal  AmountFair ValueNominal  AmountFair Value
Forward contracts:
Purchased$(159.5)$(0.4)$(77.9)$— 
Sold61.8 0.1 130.6 0.2 
Foreign currency exchange contract related to acquisition— — 1,999.4 10.4 
 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.
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Table of Contents
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 theour risk factor disclosuredisclosures since our 2016 Annual Report on2022 Form 10-K.10-K except for the one listed below. The risk factors described in ourthe 2022 Form 10-K are not the only risks facing our Company.we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial conditions and/condition, or operating results.
The announced contribution of Trimble Ag to a newly formed JV and the sale of a majority interest in the JV are subject to various risks and uncertainties.
In September 2023, we signed a definitive agreement to contribute our Trimble Ag business, excluding certain GNSS and guidance technologies, to a joint venture (“JV”) with AGCO, of which we will retain a 15% stake. The transaction is expected to close in the first half of 2024. The pending transaction may not be completed in accordance with announced plans, on the currently expected timeline, or at all, and the pending sale may be disruptive to our business operations and adversely affect our profitability. In addition, the risks and uncertainties associated with the new JV include that (i)we may fail to realize the anticipated benefits of the formation of the JV, (ii) the closing of the transaction is subject to conditions that may not be satisfied or may take longer to be satisfied than expected, (iii) the benefits from the long-term Supply Agreement, the Technology Transfer and License Agreement, the Trademark License Agreement, and the Transition Services Agreement with the JV will be dependent upon the JV’s ability to successfully develop and market products, (iv) we may fail to realize the benefits of our noncontrolling stake in the JV, (v) unanticipated difficulties may arise in separating the precision agriculture business, (vi) unanticipated factors may arise affecting the cost of operating the JV as a standalone business, (vii) we may be unable to successfully integrate AGCO's JCA Technologies business into the JV, (viii) the use of proceeds may be affected by market conditions and alternative uses that become more attractive over time, (ix) the development of technology synergies will depend on the level of research and development spending and the success of future innovation, and (x) we may fail to obtain governmental or regulatory approval that may be required for the proposed transaction, or that, if such approval is obtained, the approval may be obtained subject to unexpected conditions.
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 third quarter of fiscal 2017.None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
  
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, our Board of Directors approved a stock repurchase program (2015 Stock Repurchase Program), authorizing us to repurchase up to $400.0 million of the Company's common stock. The timing and amount of repurchase transactions will be determined by the Company’s management based on its 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 4. MINE SAFETY DISCLOSURES
None.
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ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plan
During the third quarter of 2023, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangements or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408(a) of Regulation S-K under the Exchange Act).
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.report.

EXHIBIT INDEX
Exh. No.Description of Exhibit
Filed or furnished herewith or
incorporated by reference to:
2.1Exhibit 2.1 to Form 8-K/A filed Dec. 21, 2022
2.2Exhibit 10.1 to Form 8-K/A filed Sep. 29, 2023
3.1Exhibit 3.1 to Form 8-K filed Oct. 3, 2016
3.2Exhibit 3.1 to Form 8-K filed Jun. 6, 2023
10.1Filed herewith
31.1Filed herewith
31.2Filed herewith
32.1Furnished herewith
32.2Furnished herewith
101
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2023, formatted in Inline XBRL, tagged as blocks of text and including detailed tags:
(i) Condensed Consolidated Balance Sheets,
(ii) Condensed Consolidated Statements of Income,
(iii) Condensed Consolidated Statements of Comprehensive Income (Loss),
(iv) Condensed Consolidated Statements of Stockholders’ Equity,
(v) Condensed Consolidated Statements of Cash Flows, and
(vi) Notes to Condensed Consolidated Financial Statements.
104The cover page from this Report on Form 10-Q, formatted in Inline XBRL
37
Table of Contents
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)
(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
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 David G. Barnes
Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 7, 2017. (4)
32.1
Certification of Chief Executive
(Authorized 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 Chiefand Principal 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: November 3, 2023
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