Exhibit 99.1
Trimble Reports First Quarter 2018 Results
• | First Quarter 2018 Revenue $742.2 million |
• | GAAP Diluted Earnings Per Share $0.23;Non-GAAP Diluted Earnings Per Share $0.44 |
SUNNYVALE, Calif., May 7, 2018- Trimble Inc. (NASDAQ: TRMB) today announced financial results for the first quarter of 2018.
First Quarter 2018 Financial Summary
First quarter 2018 revenue of $742.2 million was up 22 percent as compared to the first quarter of 2017. Buildings and Infrastructure revenue was $224.7 million, up 20 percent. Geospatial revenue was $174.5 million, up 17 percent. Resources and Utilities revenue was $159.2 million, up 32 percent. Transportation revenue was $183.8 million, up 19 percent.
GAAP operating income was $64.2 million, up 17 percent as compared to the first quarter of 2017. GAAP operating margin was 8.6 percent of revenue as compared to 9.0 percent of revenue in the first quarter of 2017.
GAAP net income was $58.5 million, up 17 percent as compared to the first quarter of 2017. Diluted GAAP earnings per share were $0.23 as compared to diluted GAAP earnings per share of $0.19 in the first quarter of 2017.
Non-GAAP operating income of $139.5 million was up 30 percent as compared to the first quarter of 2017.Non-GAAP operating margin was 18.8 percent of revenue as compared to 17.6 percent of revenue in the first quarter of 2017.
Non-GAAP net income of $112.5 million was up 35 percent as compared to the first quarter of 2017. Dilutednon-GAAP earnings per share were $0.44 as compared to dilutednon-GAAP earnings per share of $0.33 in the first quarter of 2017.
The GAAP tax rate for the quarter was 12 percent as compared to 22 percent in the first quarter of 2017, and thenon-GAAP tax rate was 19 percent as compared to 23 percent in the first quarter of 2017.
Operating cash flow for the first quarter of 2018 was $82.9 million, down 20 percent as compared to the first quarter of 2017. Deferred revenue for the first quarter of 2018 was $360.4 million, up 19 percent as compared to the first quarter of 2017.
During the first quarter, Trimble repurchased approximately 1.3 million shares of its common stock for $50.0 million. Approximately $392 million remains under the current share repurchase authorization as of the end of the first quarter. As previously announced, Trimble has temporarily suspended its stock buyback program.
“The strength of the first quarter reflects our improving competitive position and strong execution in every segment,” said Steven W. Berglund, Trimble’s president and chief executive officer. “Our strategic evolution, which is expected to accelerate with the recently announced Viewpoint ande-Builder acquisitions, will lead to higher value added solutions and higher revenue growth. These acquisitions are expected to be accretive to operating margins and cash flow in 2019.”
Forward Looking Guidance
For the second quarter of 2018, Trimble expects revenue to be between $755 million and $785 million with GAAP earnings per share of $0.21 to $0.26 andnon-GAAP earnings per share of $0.42 to $0.46.Non-GAAP guidance excludes the amortization of intangibles of $42 million related to previous acquisitions, anticipated acquisition costs of $8 million, the anticipated impact of stock-based compensation expense of $15 million, and $2 million in anticipated restructuring charges. GAAP guidance assumes a tax rate of 15 percent andnon-GAAP guidance assumes a tax rate of 19 percent. Both GAAP andnon-GAAP earnings per share assume approximately 253 million shares outstanding.
New Accounting Standard
Trimble adopted a new accounting standard, ASC 606, starting with the first quarter of fiscal 2018, which primarily affects recognition of revenue and related costs of sales for software term licenses, custom professional services contracts, and contracts withnon-standard terms and conditions. Trimble is utilizing the full retrospective method of transition, and prior periods presented here have been restated to reflect adoption of this new standard.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on May 7 at 2:00 p.m. PT to review its first quarter 2018 results. An accompanying slide presentation will be made available on the “Investors” section of the Trimble Website,www.trimble.com, under the subheading “Events & Presentations”. The call will be broadcast live on the Web athttp://investor.trimble.com. Investors without Internet access may dial into the call at (800)528-9198 (U.S.) or (702)928-6633 (international). The passcode is 6279819. The replay will also be available on the Web at the address above.
Use ofNon-GAAP Financial Information
To help investors understand Trimble’s past financial performance and future results, as well as its performance relative to competitors, Trimble supplements the financial results that the company provides in accordance with generally accepted accounting principles, or GAAP, withnon-GAAP financial measures. Thesenon-GAAP measures can be used to evaluate Trimble’s historical and prospective financial performance, as well as its performance relative to competitors. The company’s management regularly uses supplementalnon-GAAP financial measures internally to understand, manage and evaluate the business, and to make operating decisions. Thesenon-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Trimble believes that thesenon-GAAP financial measures reflect an additional way of viewing aspects of the company’s operations that, when viewed with GAAP results, provide a more complete understanding of factors and trends affecting the business. Further, Trimble believes some of the company’s investors track “core operating performance” as a means of evaluating performance in the ordinary, ongoing, and customary course of the company’s operations. Core operating performance excludes items that arenon-cash, not expected to recur or not reflective of ongoing financial results. Management also believes that looking at Trimble’s core operating performance provides a supplemental way to provide consistency in period to period comparisons.
The specificnon-GAAP measures, which Trimble uses along with a reconciliation to the nearest comparable GAAP measures and the explanation for why thesenon-GAAP measures provide useful information to investors regarding the financial condition and results of operations and why management chose to exclude selected items can be found at the end of this release. The method the company uses to producenon-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Trimble’snon-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with Trimble’s consolidated financial statements prepared in accordance with GAAP. Investors are encouraged to review the reconciliation ofnon-GAAP financial measures to the comparable GAAP results, which is attached to this earnings release. Additional financial information about Trimble’s use ofnon-GAAP results can be found on the investor relations page of our website at:http://investor.trimble.com.
About Trimble
Trimble is transforming 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. From purpose built products to enterprise lifecycle solutions, Trimble software, hardware and services are transforming a broad range of industries such as agriculture, construction, geospatial and transportation and logistics. For more information about Trimble (NASDAQ:TRMB), visit:www.trimble.com.
Safe Harbor
Certain statements made in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations for future financial market and economic conditions, the potential for growth and margin expansion in 2018, the ability to deliver revenue, earnings per share and other financial projections that Trimble has guided for the second quarter of 2018, including the expected tax rate, anticipated impact of stock-based compensation expense, amortization of intangibles related to previous acquisitions, anticipated acquisition costs, restructuring charges, the anticipated number of diluted shares outstanding, the planned Viewpoint acquisition and financing thereof, and the impact of the Viewpoint ande-Builder acquisitions on Trimble’s financial results. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. These factors include, for example, Trimble’s expected tax rate and current expected income, which are based on current tax law, including current interpretations of the Tax Cuts and Jobs Act of 2017 (“TCJA”), and may be affected by evolving interpretations of TCJA; the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets; the ability to complete the Viewpoint acquisition on the anticipated schedule, or at all; the ability to obtain long-term financing for the Viewpoint acquisition on favorable terms, or at all; and synergies between Viewpoint and Trimble, and acquisition accounting for Viewpoint, including the impact of the reduction of deferred revenue, are estimated and may be materially different
from actual results. The Company’s results may be adversely affected if the Company is unable to market, manufacture and ship new products, obtain new customers, or integrate new acquisitions. The Company’s results would also be negatively adverse geopolitical developments, weakening in the macro environment, foreign exchange fluctuations, or the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the Company’s revenues, cash flow from operations, and other financial results. The Company’s financial results will also depend on a number of other factors and risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form10-Q and its annual report on Form10- K, such as changes in economic conditions, critical part supply chain shortages, and possible write-offs of goodwill. Undue reliance should not be placed on any forward-looking statement contained herein, especially in light of greater uncertainty than normal in the economy in general. These statements reflect the Company’s position as of the date of this release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company’s expectations or any change of events, conditions, or circumstances on which any such statement is based.
FTRMB
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
First Quarter of | ||||||||
2018 | 2017 * As Adjusted | |||||||
Revenue: | ||||||||
Product | $ | 497.8 | $ | 409.6 | ||||
Service | 128.8 | 106.6 | ||||||
Subscription | 115.6 | 94.4 | ||||||
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Total revenue | 742.2 | 610.6 | ||||||
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Cost of sales: | ||||||||
Product | 235.4 | 193.4 | ||||||
Service | 59.6 | 47.0 | ||||||
Subscription | 27.9 | 26.9 | ||||||
Amortization of purchased intangible assets | 23.1 | 19.0 | ||||||
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Total cost of sales | 346.0 | 286.3 | ||||||
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Gross margin | 396.2 | 324.3 | ||||||
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Gross margin (%) | 53.4 | % | 53.1 | % | ||||
Operating expense: | ||||||||
Research and development | 109.3 | 88.7 | ||||||
Sales and marketing | 122.1 | 94.4 | ||||||
General and administrative | 81.6 | 69.3 | ||||||
Restructuring charges | 1.6 | 2.9 | ||||||
Amortization of purchased intangible assets | 17.4 | 14.3 | ||||||
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Total operating expense | 332.0 | 269.6 | ||||||
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Operating income | 64.2 | 54.7 | ||||||
Non-operating income, net: | ||||||||
Interest expense, net | (9.5 | ) | (6.1 | ) | ||||
Foreign currency transaction gain, net | 3.7 | 1.4 | ||||||
Income from equity method investments, net | 4.9 | 4.2 | ||||||
Other income, net | 3.4 | 9.5 | ||||||
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Totalnon-operating income, net | 2.5 | 9.0 | ||||||
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Income before taxes | 66.7 | 63.7 | ||||||
Income tax provision | 8.0 | 13.9 | ||||||
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Net income | 58.7 | 49.8 | ||||||
Net gain attributable to noncontrolling interests | 0.2 | — | ||||||
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Net income attributable to Trimble Inc. | $ | 58.5 | $ | 49.8 | ||||
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Earnings per share attributable to Trimble Inc.: | ||||||||
Basic | $ | 0.24 | $ | 0.20 | ||||
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Diluted | $ | 0.23 | $ | 0.19 | ||||
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Shares used in calculating earnings per share: | ||||||||
Basic | 248.8 | 252.0 | ||||||
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Diluted | 253.2 | 255.9 | ||||||
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* | Prior-period information has been restated for the adoption of ASC 606, Revenue from Contracts with Customers. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
As of | First Quarter of 2018 | Fiscal Year End 2017 * As Adjusted | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 274.5 | $ | 358.5 | ||||
Short-term investments | — | 178.9 | ||||||
Accounts receivable, net | 475.7 | 427.7 | ||||||
Other receivables | 33.4 | 42.8 | ||||||
Inventories | 289.1 | 264.6 | ||||||
Other current assets | 51.9 | 39.2 | ||||||
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Total current assets | 1,124.6 | 1,311.7 | ||||||
Property and equipment, net | 184.3 | 174.0 | ||||||
Goodwill | 2,726.4 | 2,287.1 | ||||||
Other purchased intangible assets, net | 466.2 | 364.8 | ||||||
Deferred costs,non-current | 35.6 | 35.0 | ||||||
Othernon-current assets | 136.6 | 143.7 | ||||||
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Total assets | $ | 4,673.7 | $ | 4,316.3 | ||||
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Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 430.5 | $ | 128.4 | ||||
Accounts payable | 157.4 | 146.0 | ||||||
Accrued compensation and benefits | 105.8 | 143.9 | ||||||
Deferred revenue | 324.2 | 237.6 | ||||||
Accrued warranty expense | 18.9 | 18.3 | ||||||
Other current liabilities | 110.0 | 99.2 | ||||||
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Total current liabilities | 1,146.8 | 773.4 | ||||||
Long-term debt | 691.8 | 785.5 | ||||||
Non-current deferred revenue | 36.2 | 39.0 | ||||||
Deferred income tax liabilities | 49.8 | 47.8 | ||||||
Income taxes payable | 80.4 | 94.1 | ||||||
Othernon-current liabilities | 168.8 | 162.0 | ||||||
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Total liabilities | 2,173.8 | 1,901.8 | ||||||
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Stockholders’ equity: | ||||||||
Common stock | 0.2 | 0.2 | ||||||
Additionalpaid-in-capital | 1,497.0 | 1,461.1 | ||||||
Retained earnings | 1,103.6 | 1,084.6 | ||||||
Accumulated other comprehensive loss | (101.1 | ) | (131.4 | ) | ||||
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Total Trimble Inc. stockholders’ equity | 2,499.7 | 2,414.5 | ||||||
Noncontrolling interests | 0.2 | — | ||||||
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Total stockholders’ equity | 2,499.9 | 2,414.5 | ||||||
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Total liabilities and stockholders’ equity | $ | 4,673.7 | $ | 4,316.3 | ||||
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* | Prior-period information has been restated for the adoption of ASC 606, Revenue from Contracts with Customers. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
First Quarter of | ||||||||
2018 | 2017 * As Adjusted | |||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 58.7 | $ | 49.8 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation expense | 8.5 | 8.9 | ||||||
Amortization expense | 40.5 | 33.3 | ||||||
Stock-based compensation | 17.4 | 13.7 | ||||||
Income from equity method investments | (0.1 | ) | (2.7 | ) | ||||
Othernon-cash items | (7.4 | ) | (9.7 | ) | ||||
Decrease (increase) in assets: | ||||||||
Accounts receivable | (29.4 | ) | (34.0 | ) | ||||
Inventories | (21.7 | ) | (2.4 | ) | ||||
Other current andnon-current assets | (10.6 | ) | (4.7 | ) | ||||
Increase (decrease) in liabilities: | ||||||||
Accounts payable | 11.1 | 3.5 | ||||||
Accrued compensation and benefits | (41.6 | ) | (14.8 | ) | ||||
Deferred revenue | 69.6 | 53.3 | ||||||
Other liabilities | (12.1 | ) | 9.8 | |||||
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Net cash provided by operating activities | 82.9 | 104.0 | ||||||
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Cash flow from investing activities: | ||||||||
Acquisitions of businesses, net of cash acquired | (518.7 | ) | (78.5 | ) | ||||
Acquisitions of property and equipment | (18.2 | ) | (5.7 | ) | ||||
Purchases of short-term investments | (24.0 | ) | (59.0 | ) | ||||
Proceeds from maturities of short-term investments | 6.2 | 24.4 | ||||||
Proceeds from sales of short-term investments | 196.8 | 3.9 | ||||||
Other | 4.4 | 19.6 | ||||||
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Net cash used in investing activities | (353.5 | ) | (95.3 | ) | ||||
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Cash flow from financing activities: | ||||||||
Issuance of common stock, net of tax withholdings | 25.3 | 39.6 | ||||||
Repurchases of common stock | (53.0 | ) | (14.2 | ) | ||||
Proceeds from debt and revolving credit lines | 591.0 | 252.0 | ||||||
Payments on debt and revolving credit lines | (383.0 | ) | (226.1 | ) | ||||
Other | — | (0.3 | ) | |||||
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Net cash provided by financing activities | 180.3 | 51.0 | ||||||
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Effect of exchange rate changes on cash and cash equivalents | 6.3 | 5.0 | ||||||
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Net increase (decrease) in cash and cash equivalents | (84.0 | ) | 64.7 | |||||
Cash and cash equivalents—beginning of period | 358.5 | 216.1 | ||||||
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Cash and cash equivalents—end of period | $ | 274.5 | $ | 280.8 | ||||
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* | Prior period information has been restated for the adoption of ASC 606, Revenue from Contracts with Customers, and ASUNo. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. |
REPORTING SEGMENTS
(Dollars in millions)
(Unaudited)
Reporting Segments | ||||||||||||||||
Buildings and Infrastructure | Geospatial | Resources and Utilities | Transportation | |||||||||||||
FIRST QUARTER OF FISCAL 2018 : | ||||||||||||||||
Revenue | $ | 224.7 | $ | 174.5 | $ | 159.2 | $ | 183.8 | ||||||||
Operating income before corporate allocations | $ | 43.5 | $ | 37.3 | $ | 51.7 | $ | 30.4 | ||||||||
Operating margin (% of segment external net revenue) | 19.4 | % | 21.4 | % | 32.5 | % | 16.5 | % | ||||||||
FIRST QUARTER OF FISCAL 2017 as adjusted : | ||||||||||||||||
Revenue | $ | 186.5 | $ | 149.6 | $ | 120.2 | $ | 154.3 | ||||||||
Operating income before corporate allocations | $ | 31.7 | $ | 27.9 | $ | 42.6 | $ | 23.5 | ||||||||
Operating margin (% of segment external net revenue) | 17.0 | % | 18.6 | % | 35.4 | % | 15.2 | % |
Note: First quarter of fiscal 2017 information has been restated for the adoption of ASC 606, Revenue from Contracts with Customers.
GAAP TONON-GAAP RECONCILIATION
(Dollars in millions, except per share data)
(Unaudited)
First Quarter of | ||||||||||||||||||
2018 | 2017 * As Adjusted | |||||||||||||||||
Dollar | % of | Dollar | % of | |||||||||||||||
Amount | Revenue | Amount | Revenue | |||||||||||||||
GROSS MARGIN: | ||||||||||||||||||
GAAP gross margin: | $ | 396.2 | 53.4 | % | $ | 324.3 | 53.1 | % | ||||||||||
Restructuring charges | ( A ) | (0.2 | ) | — | % | 0.5 | 0.1 | % | ||||||||||
Amortization of purchased intangible assets | ( B ) | 23.1 | 3.1 | % | 19.0 | 3.1 | % | |||||||||||
Stock-based compensation | ( C ) | 1.1 | 0.1 | % | 0.8 | 0.2 | % | |||||||||||
Amortization of acquisition-related inventorystep-up | ( D ) | — | — | % | 0.1 | — | % | |||||||||||
Acquisition / divestiture items | ( E ) | 2.0 | 0.3 | % | — | — | % | |||||||||||
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Non-GAAP gross margin: | $ | 422.2 | 56.9 | % | $ | 344.7 | 56.5 | % | ||||||||||
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OPERATING EXPENSES: | ||||||||||||||||||
GAAP operating expenses: | $ | 332.0 | 44.8 | % | $ | 269.6 | 44.1 | % | ||||||||||
Restructuring charges | ( A ) | (1.6 | ) | (0.2 | )% | (2.9 | ) | (0.5 | )% | |||||||||
Amortization of purchased intangible assets | ( B ) | (17.4 | ) | (2.3 | )% | (14.3 | ) | (2.3 | )% | |||||||||
Stock-based compensation | ( C ) | (16.3 | ) | (2.3 | )% | (12.9 | ) | (2.1 | )% | |||||||||
Acquisition / divestiture items | ( E ) | (14.0 | ) | (1.9 | )% | (2.1 | ) | (0.3 | )% | |||||||||
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Non-GAAP operating expenses: | $ | 282.7 | 38.1 | % | $ | 237.4 | 38.9 | % | ||||||||||
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OPERATING INCOME: | ||||||||||||||||||
GAAP operating income: | $ | 64.2 | 8.6 | % | $ | 54.7 | 9.0 | % | ||||||||||
Restructuring charges | ( A ) | 1.4 | 0.2 | % | 3.4 | 0.6 | % | |||||||||||
Amortization of purchased intangible assets | ( B ) | 40.5 | 5.4 | % | 33.3 | 5.4 | % | |||||||||||
Stock-based compensation | ( C ) | 17.4 | 2.4 | % | 13.7 | 2.3 | % | |||||||||||
Amortization of acquisition-related inventorystep-up | ( D ) | — | — | % | 0.1 | — | % | |||||||||||
Acquisition / divestiture items | ( E ) | 16.0 | 2.2 | % | 2.1 | 0.3 | % | |||||||||||
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Non-GAAP operating income: | $ | 139.5 | 18.8 | % | $ | 107.3 | 17.6 | % | ||||||||||
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NON-OPERATING INCOME (EXPENSE), NET: | ||||||||||||||||||||||
GAAPnon-operating income, net: | $ | 2.5 | $ | 9.0 | ||||||||||||||||||
Acquisition / divestiture items | ( E ) | (2.8 | ) | (8.1 | ) | |||||||||||||||||
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Non-GAAPnon-operating income (expense), net: | $ | (0.3 | ) | $ | 0.9 | |||||||||||||||||
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GAAP and | GAAP and | |||||||||||||||||||||
Non-GAAP | Non-GAAP | |||||||||||||||||||||
Tax Rate % | ( H ) | Tax Rate % | ( H ) | |||||||||||||||||||
INCOME TAX PROVISION: | ||||||||||||||||||||||
GAAP income tax provision: | $ | 8.0 | 12 | % | $ | 13.9 | 22 | % | ||||||||||||||
Non-GAAP items tax effected | ( F ) | 8.7 | 9.8 | |||||||||||||||||||
Difference in GAAP andNon-GAAP tax rate | ( G ) | 9.8 | 1.2 | |||||||||||||||||||
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Non-GAAP income tax provision: | $ | 26.5 | 19 | % | $ | 24.9 | 23 | % | ||||||||||||||
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NET INCOME: | ||||||||||||||||||||||
GAAP net income attributable to Trimble Inc.: | $ | 58.5 | $ | 49.8 | ||||||||||||||||||
Restructuring charges | ( A ) | 1.4 | 3.4 | |||||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 40.5 | 33.3 | |||||||||||||||||||
Stock-based compensation | ( C ) | 17.4 | 13.7 | |||||||||||||||||||
Amortization of acquisition-related inventorystep-up | ( D ) | — | 0.1 | |||||||||||||||||||
Acquisition / divestiture items | ( E ) | 13.2 | (6.0 | ) | ||||||||||||||||||
Non-GAAP tax adjustments | (F) + (G) | (18.5 | ) | (11.0 | ) | |||||||||||||||||
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Non-GAAP net income attributable to Trimble Inc.: | $ | 112.5 | $ | 83.3 | ||||||||||||||||||
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DILUTED NET INCOME PER SHARE: | ||||||||||||||||||||||
GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.23 | $ | 0.19 | ||||||||||||||||||
Restructuring charges | ( A ) | — | 0.01 | |||||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 0.16 | 0.13 | |||||||||||||||||||
Stock-based compensation | ( C ) | 0.07 | 0.05 | |||||||||||||||||||
Amortization of acquisition-related inventorystep-up | ( D ) | — | — | |||||||||||||||||||
Acquisition / divestiture items | ( E ) | 0.05 | (0.02 | ) | ||||||||||||||||||
Non-GAAP tax adjustments | ( F ) + ( G ) | (0.07 | ) | (0.03 | ) | |||||||||||||||||
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Non-GAAP diluted net income per share attributable to Trimble Inc.: | $ | 0.44 | $ | 0.33 | ||||||||||||||||||
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* Prior-period information has been restated for the adoption of ASC 606, Revenue from Contracts with Customers.
FOOTNOTES TO GAAP TONON-GAAP RECONCILIATION
(Unaudited)
Ournon-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. Thenon-GAAP financial measures included in the previous table as well as detailed explanations to the adjustments to comparable GAAP measures, are set forth below:
Non-GAAP gross margin
We believe our investors benefit by understanding ournon-GAAP gross margin as a way of understanding how product mix, pricing decisions and manufacturing costs influence our business.Non-GAAP gross margin excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, and acquisition/divestiture items associated with the acceleration of acquisition stock options 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
We believe this measure is important to investors evaluating ournon-GAAP spending in relation to revenue.Non-GAAP operating expenses exclude restructuring charges, amortization of purchased intangible assets, stock-based compensation, acquisition/divestiture items associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration, and other required closing costs including the acceleration of acquisition stock options 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
We believe our investors benefit by understanding ournon-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 inventorystep-up, acquisition/divestiture items associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration, and other required closing costs including the acceleration of acquisition stock options. We believe that these exclusions offer an alternative means for our investors to evaluate current operating performance compared to results of other periods.
Non-GAAPnon-operating income (expense), net
We believe this measure helps investors evaluate ournon-operating income trends.Non-GAAPnon-operating income (expense), net excludes acquisition/divestiture gains/losses associated with unusual acquisition related items such as intangible asset impairment charges, gains or losses related to the acquisitions, 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 thenon-GAAP income tax provision is beneficial because it provides for consistent treatment of the excluded items in ournon-GAAP presentation.
Non-GAAP net income
This measure provides a supplemental view of net income trends which are driven bynon-GAAP income before taxes and ournon-GAAP tax rate.Non-GAAP net income excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, acquisition/divestiture items, andnon-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 as compared to our past net income performance.
Non-GAAP diluted net income per share
We believe our investors benefit by understanding ournon-GAAP operating performance as reflected in a per share calculation as a way of measuringnon-GAAP operating performance by ownership in the company.Non-GAAP diluted net income per share excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, acquisition/divestiture items, andnon-GAAP tax adjustments from GAAP diluted net income per share. We believe that these exclusions offer investors a useful view of our diluted net income per share as compared to our past diluted net income per share.
Thesenon-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 arenon-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 fromnon-GAAP those items relating to restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, acquisition/divestiture items, andnon-GAAP tax adjustments. For detailed explanations of the adjustments made to comparable GAAP measures, see items (A) - ( H ) below.
(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 ournon-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 operationspre-acquisition to those post-acquisitions 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 ournon-GAAP measures because some investors may view it as not reflective of our core operating performance as it is anon-cash expense. For the first quarter of fiscal years 2018 and 2017, stock-based compensation was allocated as follows: |
First Quarter of | ||||||||
(Dollars in millions) | 2018 | 2017 | ||||||
Cost of sales | $ | 1.1 | $ | 0.8 | ||||
Research and development | 3.1 | 2.4 | ||||||
Sales and marketing | 2.3 | 2.2 | ||||||
General and administrative | 10.9 | 8.3 | ||||||
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Total stock-based compensation | $ | 17.4 | $ | 13.7 | ||||
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(D) | Amortization of acquisition-related inventorystep-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, the increase in inventory value is amortized to cost of sales over the period that the related product is sold. We exclude inventorystep-up amortization from ournon-GAAP measures because it is anon-cash expense that we do not believe is indicative of our ongoing operating results. We further believe that excluding this item from ournon-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 cost of sales and operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, integration, and other closing costs, including the acceleration of acquisition stock options, as well as adjustments to the fair value ofearn-out liabilities. Included in our GAAP presentation ofnon-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 thenon-GAAP measures are costs specific to particular acquisitions. These areone-time costs that vary significantly in amount and timing and are not indicative of our core operating performance. |
(F) | Non-GAAP items tax effected.This amount adjusts the provision for income taxes to reflect the effect of thenon-GAAP items ( A ) - ( E ) onnon-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in thisnon-GAAP presentation. |
(G) | Difference in GAAP andNon-GAAP tax rate. This amount represents the difference between the GAAP andNon-GAAP tax rates applied to theNon-GAAP operating income plus theNon-GAAPnon-operating income (expense), net. We believe that investors benefit from excluding this amount from ournon-GAAP income tax provision because it facilitates a comparison of thenon-GAAP tax provision in the current and prior periods. |
(H) | GAAP andnon-GAAP tax rate %. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes andnon-GAAP income tax provision as a percentage ofnon-GAAP income before taxes. We believe that investors benefit from a presentation ofnon-GAAP tax rate percentage as a way of facilitating a comparison tonon-GAAP tax rates in prior periods. |
NEW ACCOUNTING STANDARDS ADOPTION IMPACT
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
As Reported | ASC 606 Adjustments | As Adjusted | ||||||||||||||||||||||
Fiscal Year End | Fiscal Year End | Fiscal Year End | Fiscal Year End | Fiscal Year End | Fiscal Year End | |||||||||||||||||||
As of | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 358.5 | $ | 216.1 | $ | — | $ | — | $ | 358.5 | $ | 216.1 | ||||||||||||
Short term investments | 178.9 | 111.1 | — | — | 178.9 | 111.1 | ||||||||||||||||||
Accounts receivable, net | 414.8 | 354.8 | 12.9 | 11.4 | 427.7 | 366.2 | ||||||||||||||||||
Other receivables | 42.8 | 35.4 | — | — | 42.8 | 35.4 | ||||||||||||||||||
Inventories | 271.8 | 218.8 | (7.2 | ) | (5.5 | ) | 264.6 | 213.3 | ||||||||||||||||
Other current assets | 50.3 | 42.5 | (11.1 | ) | (2.7 | ) | 39.2 | 39.8 | ||||||||||||||||
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Total current assets | 1,317.1 | 978.7 | (5.4 | ) | 3.2 | 1,311.7 | 981.9 | |||||||||||||||||
Property and equipment, net | 174.0 | 144.2 | — | — | 174.0 | 144.2 | ||||||||||||||||||
Goodwill | 2,287.1 | 2,077.6 | — | — | 2,287.1 | 2,077.6 | ||||||||||||||||||
Other purchased intangible assets, net | 364.8 | 333.3 | — | — | 364.8 | 333.3 | ||||||||||||||||||
Deferred costs,non-current | — | — | 35.0 | 30.3 | 35.0 | 30.3 | ||||||||||||||||||
Othernon-current assets | 155.2 | 140.0 | (11.5 | ) | (15.1 | ) | 143.7 | 124.9 | ||||||||||||||||
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Total assets | $ | 4,298.2 | $ | 3,673.8 | $ | 18.1 | $ | 18.4 | $ | 4,316.3 | $ | 3,692.2 | ||||||||||||
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Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Short-term debt | $ | 128.4 | $ | 130.3 | $ | — | $ | — | $ | 128.4 | $ | 130.3 | ||||||||||||
Accounts payable | 146.1 | 109.8 | (0.1 | ) | 0.1 | 146.0 | 109.9 | |||||||||||||||||
Accrued compensation and benefits | 143.0 | 97.5 | 0.9 | 0.6 | 143.9 | 98.1 | ||||||||||||||||||
Deferred revenue | 272.4 | 246.5 | (34.8 | ) | (34.7 | ) | 237.6 | 211.8 | ||||||||||||||||
Accrued warranty expense | 18.3 | 17.2 | — | — | 18.3 | 17.2 | ||||||||||||||||||
Other current liabilities | 101.0 | 86.9 | (1.8 | ) | (4.0 | ) | 99.2 | 82.9 | ||||||||||||||||
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Total current liabilities | 809.2 | 688.2 | (35.8 | ) | (38.0 | ) | 773.4 | 650.2 | ||||||||||||||||
Long-term debt | 785.5 | 489.6 | — | — | 785.5 | 489.6 | ||||||||||||||||||
Non-current deferred revenue | 41.0 | 37.7 | (2.0 | ) | (3.1 | ) | 39.0 | 34.6 | ||||||||||||||||
Deferred income tax liabilities | 40.4 | 38.8 | 7.4 | 10.0 | 47.8 | 48.8 | ||||||||||||||||||
Income taxes payable | 94.1 | — | — | — | 94.1 | — | ||||||||||||||||||
Othernon-current liabilities | 162.0 | 113.8 | — | — | 162.0 | 113.8 | ||||||||||||||||||
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Total liabilities | 1,932.2 | 1,368.1 | (30.4 | ) | (31.1 | ) | 1,901.8 | 1,337.0 | ||||||||||||||||
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Stockholders’ equity: | ||||||||||||||||||||||||
Common stock | 0.2 | 0.3 | — | — | 0.2 | 0.3 | ||||||||||||||||||
Additionalpaid-in capital | 1,461.1 | 1,348.3 | — | — | 1,461.1 | 1,348.3 | ||||||||||||||||||
Retained earnings | 1,035.9 | 1,177.1 | 48.7 | 51.4 | 1,084.6 | 1,228.5 | ||||||||||||||||||
Accumulated other comprehensive loss | (131.2 | ) | (219.9 | ) | (0.2 | ) | (1.9 | ) | (131.4 | ) | (221.8 | ) | ||||||||||||
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Total Trimble Inc. stockholders’ equity | 2,366.0 | 2,305.8 | 48.5 | 49.5 | 2,414.5 | 2,355.3 | ||||||||||||||||||
Noncontrolling interests | — | (0.1 | ) | — | — | — | (0.1 | ) | ||||||||||||||||
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Total stockholders’ equity | 2,366.0 | 2,305.7 | 48.5 | 49.5 | 2,414.5 | 2,355.2 | ||||||||||||||||||
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Total liabilities and stockholders’ equity | $ | 4,298.2 | $ | 3,673.8 | $ | 18.1 | $ | 18.4 | $ | 4,316.3 | $ | 3,692.2 | ||||||||||||
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NEW ACCOUNTING STANDARDS ADOPTION IMPACT
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
As Reported | ASC 606 & ASU 2017-07 Adjustments | As Adjusted | ||||||||||||||||||||||
Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Product | $ | 1,763.8 | $ | 1,562.0 | $ | — | $ | 8.6 | $ | 1,763.8 | $ | 1,570.6 | ||||||||||||
Service | 461.6 | 430.2 | 13.8 | 6.5 | 475.4 | 436.7 | ||||||||||||||||||
Subscription | 428.8 | 370.0 | (21.5 | ) | (15.2 | ) | 407.3 | 354.8 | ||||||||||||||||
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Total revenue | 2,654.2 | 2,362.2 | (7.7 | ) | (0.1 | ) | 2,646.5 | 2,362.1 | ||||||||||||||||
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Cost of sales: | ||||||||||||||||||||||||
Product | 866.5 | 760.8 | 9.1 | 3.2 | 875.6 | 764.0 | ||||||||||||||||||
Service | 196.3 | 169.9 | (1.9 | ) | 0.2 | 194.4 | 170.1 | |||||||||||||||||
Subscription | 113.0 | 104.9 | 0.1 | — | 113.1 | 104.9 | ||||||||||||||||||
Amortization of purchased intangible assets | 85.8 | 88.6 | — | — | 85.8 | 88.6 | ||||||||||||||||||
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Total cost of sales | 1,261.6 | 1,124.2 | 7.3 | 3.4 | 1,268.9 | 1,127.6 | ||||||||||||||||||
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Gross margin | 1,392.6 | 1,238.0 | (15.0 | ) | (3.5 | ) | 1,377.6 | 1,234.5 | ||||||||||||||||
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Gross margin (%) | 52.5 | % | 52.4 | % | 52.1 | % | 52.3 | % | ||||||||||||||||
Operating expense: | ||||||||||||||||||||||||
Research and development | 370.2 | 349.6 | — | — | 370.2 | 349.6 | ||||||||||||||||||
Sales and marketing | 404.2 | 377.6 | (4.1 | ) | (2.9 | ) | 400.1 | 374.7 | ||||||||||||||||
General and administrative | 302.3 | 256.0 | (0.6 | ) | — | 301.7 | 256.0 | |||||||||||||||||
Restructuring charges | 6.9 | 11.6 | — | — | 6.9 | 11.6 | ||||||||||||||||||
Amortization of purchased intangible assets | 63.0 | 62.2 | — | — | 63.0 | 62.2 | ||||||||||||||||||
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Total operating expense | 1,146.6 | 1,057.0 | (4.7 | ) | (2.9 | ) | 1,141.9 | 1,054.1 | ||||||||||||||||
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Operating income | 246.0 | 181.0 | (10.3 | ) | (0.6 | ) | 235.7 | 180.4 | ||||||||||||||||
Non-operating income (expense), net: | ||||||||||||||||||||||||
Interest expense, net | (25.0 | ) | (25.9 | ) | (0.2 | ) | — | (25.2 | ) | (25.9 | ) | |||||||||||||
Foreign currency transaction gain (loss), net | 3.3 | (1.9 | ) | — | — | 3.3 | (1.9 | ) | ||||||||||||||||
Income from equity method investments, net | 29.5 | 17.6 | — | — | 29.5 | 17.6 | ||||||||||||||||||
Other income, net | 5.3 | 5.9 | (0.4 | ) | — | 4.9 | 5.9 | |||||||||||||||||
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Totalnon-operating income (expense), net | 13.1 | (4.3 | ) | (0.6 | ) | — | 12.5 | (4.3 | ) | |||||||||||||||
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Income before taxes | 259.1 | 176.7 | (10.9 | ) | (0.6 | ) | 248.2 | 176.1 | ||||||||||||||||
Income tax provision | 137.9 | 44.5 | (8.2 | ) | (0.6 | ) | 129.7 | 43.9 | ||||||||||||||||
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Net income | 121.2 | 132.2 | (2.7 | ) | — | 118.5 | 132.2 | |||||||||||||||||
Net gain (loss) attributable to noncontrolling interests | 0.1 | (0.2 | ) | — | — | 0.1 | (0.2 | ) | ||||||||||||||||
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Net income attributable to Trimble Inc. | $ | 121.1 | $ | 132.4 | $ | (2.7 | ) | $ | — | $ | 118.4 | $ | 132.4 | |||||||||||
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Net income per share attributable to Trimble Inc. | ||||||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.53 | $ | (0.01 | ) | $ | — | $ | 0.47 | $ | 0.53 | |||||||||||
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Diluted | $ | 0.47 | $ | 0.52 | $ | (0.01 | ) | $ | — | $ | 0.46 | $ | 0.52 | |||||||||||
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Shares used in calculating net income per share: | ||||||||||||||||||||||||
Basic | 252.1 | 250.5 | — | — | 252.1 | 250.5 | ||||||||||||||||||
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Diluted | 256.7 | 253.9 | — | — | 256.7 | 253.9 | ||||||||||||||||||
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NEW ACCOUNTING STANDARDS ADOPTION IMPACT
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In millions, except per share data)
(Unaudited)
Q1’17 | ||||||||||||
As Reported | ASC 606 Adjustments | As Adjusted | ||||||||||
Revenue: | ||||||||||||
Product | $ | 405.4 | $ | 4.2 | $ | 409.6 | ||||||
Service | 106.8 | (0.2 | ) | 106.6 | ||||||||
Subscription | 101.7 | (7.3 | ) | 94.4 | ||||||||
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Total revenue | 613.9 | (3.3 | ) | 610.6 | ||||||||
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Cost of sales: | ||||||||||||
Product | 194.4 | (1.0 | ) | 193.4 | ||||||||
Service | 47.1 | (0.1 | ) | 47.0 | ||||||||
Subscription | 26.8 | 0.1 | 26.9 | |||||||||
Amortization of purchased intangible assets | 19.0 | — | 19.0 | |||||||||
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Total cost of sales | 287.3 | (1.0 | ) | 286.3 | ||||||||
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Gross margin | 326.6 | (2.3 | ) | 324.3 | ||||||||
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Gross margin (%) | 53.2 | % | 53.1 | % | ||||||||
Operating expense: | ||||||||||||
Research and development | 88.7 | — | 88.7 | |||||||||
Sales and marketing | 94.8 | (0.4 | ) | 94.4 | ||||||||
General and administrative | 69.3 | — | 69.3 | |||||||||
Restructuring charges | 2.9 | — | 2.9 | |||||||||
Amortization of purchased intangible assets | 14.3 | — | 14.3 | |||||||||
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Total operating expense | 270.0 | (0.4 | ) | 269.6 | ||||||||
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Operating income | 56.6 | (1.9 | ) | 54.7 | ||||||||
Non-operating income (expense), net: | ||||||||||||
Interest expense, net | (6.1 | ) | — | (6.1 | ) | |||||||
Foreign currency transaction gain, net | 1.4 | — | 1.4 | |||||||||
Income from equity method investments, net | 4.2 | — | 4.2 | |||||||||
Other income (loss), net | 9.5 | — | 9.5 | |||||||||
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Totalnon-operating income (expense), net | 9.0 | — | 9.0 | |||||||||
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Income before taxes | 65.6 | (1.9 | ) | 63.7 | ||||||||
Income tax provision | 15.1 | (1.2 | ) | 13.9 | ||||||||
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Net income (loss) | 50.5 | (0.7 | ) | 49.8 | ||||||||
Net gain attributable to noncontrolling interests | — | — | — | |||||||||
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Net income (loss) attributable to Trimble Inc. | $ | 50.5 | $ | (0.7 | ) | $ | 49.8 | |||||
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Net income (loss) per share attributable to Trimble Inc. | ||||||||||||
Basic | $ | 0.20 | $ | — | $ | 0.20 | ||||||
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Diluted | $ | 0.20 | $ | (0.01 | ) | $ | 0.19 | |||||
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Shares used in calculating net income (loss) per share: | ||||||||||||
Basic | 252.0 | — | 252.0 | |||||||||
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Diluted | 255.9 | — | 255.9 | |||||||||
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NEW ACCOUNTING STANDARDS ADOPTION IMPACT
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
As Reported | ASC 606 Adjustments *ASU 2016-15 Adjustments | As Adjusted | ||||||||||||||||||||||
Fiscal Years | Fiscal Years | Fiscal Years | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Cash flow from operating activities: | ||||||||||||||||||||||||
Net income | $ | 121.2 | $ | 132.2 | $ | (2.7 | ) | $ | — | $ | 118.5 | $ | 132.2 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation expense | 34.6 | 37.0 | — | — | 34.6 | 37.0 | ||||||||||||||||||
Amortization expense | 148.8 | 150.8 | — | — | 148.8 | 150.8 | ||||||||||||||||||
Stock-based compensation | 64.8 | 52.6 | — | — | 64.8 | 52.6 | ||||||||||||||||||
Income from equity method investments | (29.5 | ) | (17.6 | ) | 18.1 | * | 17.6 | * | (11.4 | ) | — | |||||||||||||
Othernon-cash items | 6.9 | 19.0 | (8.2 | ) | (0.6 | ) | (1.3 | ) | 18.4 | |||||||||||||||
Decrease (increase) in assets: | ||||||||||||||||||||||||
Accounts receivable | (41.6 | ) | 1.2 | (1.1 | ) | 2.6 | (42.7 | ) | 3.8 | |||||||||||||||
Inventories | (38.7 | ) | 24.0 | 1.4 | 2.2 | (37.3 | ) | 26.2 | ||||||||||||||||
Other current andnon-current assets | (15.5 | ) | 0.2 | 5.5 | 2.0 | (10.0 | ) | 2.2 | ||||||||||||||||
Increase (decrease) in liabilities: | ||||||||||||||||||||||||
Accounts payable | 25.9 | 10.9 | (0.2 | ) | (0.1 | ) | 25.7 | 10.8 | ||||||||||||||||
Accrued compensation and benefits | 33.7 | 0.6 | 0.3 | (0.3 | ) | 34.0 | 0.3 | |||||||||||||||||
Deferred revenue | 16.4 | 26.1 | 2.9 | (6.6 | ) | 19.3 | 19.5 | |||||||||||||||||
Income taxes payable | 88.2 | (16.1 | ) | — | — | 88.2 | (16.1 | ) | ||||||||||||||||
Accrued liabilities | (3.3 | ) | (7.3 | ) | 1.8 | * | 0.7 | * | (1.5 | ) | (6.6 | ) | ||||||||||||
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Net cash provided by operating activities | 411.9 | 413.6 | 17.8 | 17.5 | 429.7 | 431.1 | ||||||||||||||||||
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Cash flow from investing activities: | ||||||||||||||||||||||||
Acquisitions of businesses, net of cash acquired | (293.1 | ) | (38.8 | ) | 12.9 | * | 15.1 | * | (280.2 | ) | (23.7 | ) | ||||||||||||
Acquisitions of property and equipment | (43.7 | ) | (26.0 | ) | — | — | (43.7 | ) | (26.0 | ) | ||||||||||||||
Purchases of short-term investments | (288.0 | ) | (113.3 | ) | — | — | (288.0 | ) | (113.3 | ) | ||||||||||||||
Proceeds from maturities of short-term investments | 122.1 | 2.4 | — | — | 122.1 | 2.4 | ||||||||||||||||||
Proceeds from sales of short-term investments | 97.7 | — | — | — | 97.7 | — | ||||||||||||||||||
Dividends received from equity method investments | 18.1 | 17.6 | (18.1 | )* | (17.6 | )* | — | — | ||||||||||||||||
Other | 20.9 | 13.7 | — | — | 20.9 | 13.7 | ||||||||||||||||||
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Net cash used in investing activities | (366.0 | ) | (144.4 | ) | (5.2 | ) | (2.5 | ) | (371.2 | ) | (146.9 | ) | ||||||||||||
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Cash flow from financing activities: | ||||||||||||||||||||||||
Issuance of common stock, net of tax withholdings | 73.8 | 67.5 | — | — | 73.8 | 67.5 | ||||||||||||||||||
Repurchases and retirement of common stock | (285.3 | ) | (119.5 | ) | — | — | (285.3 | ) | (119.5 | ) | ||||||||||||||
Proceeds from debt and revolving credit lines | 786.0 | 355.0 | — | — | 786.0 | 355.0 | ||||||||||||||||||
Payments on debt and revolving credit lines | (495.4 | ) | (465.3 | ) | — | — | (495.4 | ) | (465.3 | ) | ||||||||||||||
Other | — | — | (12.6 | )* | (15.0 | )* | (12.6 | ) | (15.0 | ) | ||||||||||||||
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Net cash provided by (used in) financing activities | 79.1 | (162.3 | ) | (12.6 | ) | (15.0 | ) | 66.5 | (177.3 | ) | ||||||||||||||
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Effect of exchange rate changes on cash and cash equivalents | 17.4 | (6.8 | ) | — | — | 17.4 | (6.8 | ) | ||||||||||||||||
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Net increase in cash and cash equivalents | 142.4 | 100.1 | 0.0 | 0.0 | 142.4 | 100.1 | ||||||||||||||||||
Cash and cash equivalents - beginning of period | 216.1 | 116.0 | — | — | 216.1 | 116.0 | ||||||||||||||||||
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Cash and cash equivalents - end of period | $ | 358.5 | $ | 216.1 | $ | 0.0 | $ | 0.0 | $ | 358.5 | $ | 216.1 | ||||||||||||
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* | ASUNo. 2016-15, Statement of Cash Flows adoption reclassification adjustments were included in specified lines in fiscal 2017 and 2016. |
NEW ACCOUNTING STANDARDS ADOPTION IMPACT
REPORTING SEGMENTS
(Dollars in millions)
As Reported | Topic 606 Adjustments | As Adjusted | ||||||||||||||||||||||
Fiscal | Fiscal | Fiscal | Fiscal | Fiscal | Fiscal | |||||||||||||||||||
Year | Year | Year | Year | Year | Year | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
BUILDINGS AND INFRASTRUCTURE |
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Revenue | $ | 834.9 | $ | 743.5 | $ | (5.5 | ) | $ | (1.7 | ) | $ | 829.4 | $ | 741.8 | ||||||||||
Operating income | $ | 179.9 | $ | 133.9 | $ | (3.9 | ) | $ | (1.2 | ) | $ | 176.0 | $ | 132.7 | ||||||||||
Operating margin (% of segment external net revenues) | 21.5 | % | 18.0 | % | 21.2 | % | 17.9 | % | ||||||||||||||||
GEOSPATIAL |
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Revenue | $ | 661.2 | $ | 634.7 | $ | (2.7 | ) | $ | 1.0 | $ | 658.5 | $ | 635.7 | |||||||||||
Operating income | $ | 130.9 | $ | 120.8 | $ | (1.5 | ) | $ | (0.2 | ) | $ | 129.4 | $ | 120.6 | ||||||||||
Operating margin (% of segment external net revenues) | 19.8 | % | 19.0 | % | 19.7 | % | 19.0 | % | ||||||||||||||||
RESOURCES AND UTILITIES |
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Revenue | $ | 476.9 | $ | 395.7 | $ | 4.1 | $ | 1.7 | $ | 481.0 | $ | 397.4 | ||||||||||||
Operating income | $ | 136.3 | $ | 118.4 | $ | 0.7 | $ | 0.4 | $ | 137.0 | $ | 118.8 | ||||||||||||
Operating margin (% of segment external net revenues) | 28.6 | % | 29.9 | % | 28.5 | % | 29.9 | % | ||||||||||||||||
TRANSPORTATION |
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Revenue | $ | 681.2 | $ | 588.3 | $ | (3.6 | ) | $ | (1.1 | ) | $ | 677.6 | $ | 587.2 | ||||||||||
Operating income | $ | 120.6 | $ | 102.9 | $ | (6.2 | ) | $ | 0.4 | $ | 114.4 | $ | 103.3 | |||||||||||
Operating margin (% of segment external net revenues) | 17.7 | % | 17.5 | % | 16.9 | % | 17.6 | % |