Item 8. Financial Statements and Supplementary Data

TRIMBLE INC.

CONSOLIDATED BALANCE SHEETS

At the End of Year			2023						2022
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents			$	229.8					$	271.0
Accounts receivable, net			706.6						643.3
Inventories			235.7						402.5
Prepaid expenses			89.8						73.7
Other current assets			147.8						127.7
Assets held for sale			421.2						—
Total current assets			1,830.9						1,518.2
Property and equipment, net			202.5						219.0
Operating lease right-of-use assets			124.0						121.2
Goodwill			5,350.6						4,137.9
Other purchased intangible assets, net			1,243.5						498.1
Deferred income tax assets			412.3						438.4
Other non-current assets			375.5						336.2
Total assets			$	9,539.3					$	7,269.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt			$	530.4					$	300.0
Accounts payable			165.3						175.5
Accrued compensation and benefits			181.2						159.4
Deferred revenue			663.1						639.1
Income taxes payable			39.7						23.7
Other current liabilities			201.3						164.4
Liabilities held for sale			48.3						—
Total current liabilities			1,829.3						1,462.1
Long-term debt			2,536.2						1,220.0
Deferred revenue, non-current			98.3						98.5
Deferred income tax liabilities			287.8						157.8
Operating lease liabilities			121.9						105.1
Other non-current liabilities			165.7						175.3
Total liabilities			5,039.2						3,218.8
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.001 par value; 3.0 shares authorized; none issued and outstanding			—						—
Common stock, $0.001 par value; 360.0 shares authorized; 246.5 and 246.9 shares issued and outstanding at the end of 2023 and 2022			0.2						0.2
Additional paid-in-capital			2,214.6						2,054.9
Retained earnings			2,437.4						2,230.0
Accumulated other comprehensive loss			(152.1)						(234.9)
Total stockholders' equity			4,500.1						4,050.2
Total liabilities and stockholders' equity			$	9,539.3					$	7,269.0

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)			2023						2022						2021
Revenue:
Product			$	1,771.7					$	1,986.1					$	2,135.2
Subscription and services			2,027.0						1,690.2						1,523.9
Total revenue			3,798.7						3,676.3						3,659.1
Cost of sales:
Product			875.0						1,040.8						1,086.4
Subscription and services			482.2						444.9						450.3
Amortization of purchased intangible assets			108.7						85.0						87.7
Total cost of sales			1,465.9						1,570.7						1,624.4
Gross margin			2,332.8						2,105.6						2,034.7
Operating expense:
Research and development			664.3						542.1						536.6
Sales and marketing			583.0						553.6						506.8
General and administrative			487.5						422.2						369.1
Restructuring			45.6						30.2						10.3
Amortization of purchased intangible assets			103.6						46.6						50.9
Total operating expense			1,884.0						1,594.7						1,473.7
Operating income			448.8						510.9						561.0
Non-operating income (expense), net:
Divestitures gain, net			9.2						99.0						41.4
Interest expense, net			(161.0)						(71.1)						(65.4)
Income from equity method investments, net			28.1						31.1						37.7
Other income (expense), net			31.9						(0.8)						(0.1)
Total non-operating income (expense), net			(91.8)						58.2						13.6
Income before taxes			357.0						569.1						574.6
Income tax provision			45.7						119.4						81.8
Net income			311.3						449.7						$	492.8
Net income attributable to noncontrolling interests			—						—						0.1
Net income attributable to Trimble Inc.			$	311.3					$	449.7					492.7
Earnings per share:
Basic			$	1.26					$	1.81					$	1.96
Diluted			$	1.25					$	1.80					$	1.94
Shares used in calculating earnings per share:
Basic			247.9						248.6						251.4
Diluted			249.1						250.2						254.3

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			2023						2022						2021
(In millions)
Net income			$	311.3					$	449.7					$	492.8
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			86.4						(81.6)						(64.0)
Net change related to derivatives and other			(3.6)						8.4						0.8
Comprehensive income			394.1						376.5						429.6
Comprehensive income attributable to noncontrolling interests			—						—						0.1
Comprehensive income attributable to Trimble Inc.			$	394.1					$	376.5					$	429.5

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

			Common stock																		Retained Earnings						Accumulated Other Comprehensive Loss						Total Stockholders’ Equity						Noncontrolling Interest						Total
			Shares						Amount						Additional Paid-In Capital
(In millions)
Balance at the end of 2020			250.8						$	0.3					$	1,801.7					$	1,893.4					$	(98.5)					$	3,596.9					$	1.7					$	3,598.6
Net income			—						—						—						492.7						—						492.7						0.1						492.8
Other comprehensive loss			—						—						—						—						(63.2)						(63.2)						—						(63.2)
Comprehensive income																																	429.5												429.6
Issuance of common stock under employee plans, net of tax withholdings			2.2						—						36.2						(51.3)						—						(15.1)						—						(15.1)
Stock repurchases			(2.1)						—						(15.7)						(164.3)						—						(180.0)						—						(180.0)
Stock-based compensation			—						—						112.8						—						—						112.8						—						112.8
Noncontrolling interest investments			—						—						0.6						—						—						0.6						(1.8)						(1.2)
Balance at the end of 2021			250.9						$	0.3					$	1,935.6					$	2,170.5					$	(161.7)					$	3,944.7					$	—					$	3,944.7
Net income																					449.7												449.7						—						449.7
Other comprehensive loss			—						—						—						—						(73.2)						(73.2)						—						(73.2)
Comprehensive income																																	376.5												376.5
Issuance of common stock under employee plans, net of tax withholdings			2.0						—						29.6						(43.2)						—						(13.6)						—						(13.6)
Stock repurchases			(6.0)						(0.1)						(47.6)						(347.0)						—						(394.7)						—						(394.7)
Stock-based compensation			—						—						137.3						—						—						137.3						—						137.3
Balance at the end of 2022			246.9						$	0.2					$	2,054.9					$	2,230.0					$	(234.9)					$	4,050.2					$	—					$	4,050.2
Net income			—						—						—						311.3						—						311.3						—						311.3
Other comprehensive income			—						—						—						—						82.8						82.8						—						82.8
Comprehensive income																																	394.1												394.1
Issuance of common stock under employee plans, net of tax withholdings			2.0						—						31.6						(24.9)						—						6.7						—						6.7
Stock repurchases			(2.4)						—						(21.0)						(79.0)						—						(100.0)						—						(100.0)
Stock-based compensation			—						—						149.1						—						—						149.1						—						149.1
Balance at the end of 2023			246.5						$	0.2					$	2,214.6					$	2,437.4					$	(152.1)					$4,500.1						$	—					$	4,500.1

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)			2023						2022						2021
Cash flow from operating activities:
Net income			$	311.3					$	449.7					$	492.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			38.3						40.2						41.3
Amortization expense			212.3						131.6						138.6
Deferred income taxes			(104.6)						(40.0)						(26.9)
Stock-based compensation			145.4						120.4						122.6
Divestitures gain, net			(9.2)						(99.0)						(43.9)
Other, net			11.6						41.7						19.2
(Increase) decrease in assets:
Accounts receivable, net			(36.4)						(55.4)						(9.0)
Inventories			67.6						(113.5)						(72.9)
Other current and non-current assets			(67.2)						(46.3)						(30.2)
Increase (decrease) in liabilities:
Accounts payable			(12.4)						(24.8)						60.3
Accrued compensation and benefits			20.8						(54.2)						54.1
Deferred revenue			26.0						108.6						27.4
Income taxes payable			(4.0)						(38.3)						(2.9)
Other current and non-current liabilities			(2.4)						(29.5)						(20.0)
Net cash provided by operating activities			597.1						391.2						750.5
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired			(2,088.9)						(373.5)						(236.1)
Purchases of property and equipment			(42.0)						(43.2)						(46.1)
Net proceeds from divestitures			17.0						215.4						67.3
Other, net			45.8						(25.0)						11.4
Net cash used in investing activities			(2,068.1)						(226.3)						(203.5)
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings			6.7						(13.6)						(15.1)
Repurchases of common stock			(100.0)						(394.7)						(180.0)
Proceeds from debt and revolving credit lines			3,847.1						814.8						198.9
Payments on debt and revolving credit lines			(2,292.9)						(590.2)						(449.9)
Other, net			(29.4)						(15.3)						(1.6)
Net cash provided by (used in) financing activities			1,431.5						(199.0)						(447.7)
Effect of exchange rate changes on cash and cash equivalents			7.4						(20.6)						(11.3)
Net (decrease) increase in cash and cash equivalents			(32.1)						(54.7)						88.0
Cash and cash equivalents - beginning of period			271.0						325.7						237.7
Cash and cash equivalents - end of period (1)			$	238.9					$	271.0					$	325.7
Supplemental cash flow disclosure:
Cash paid for income taxes, net			$	168.0					$	197.3					$	98.3
Cash paid for interest			$	133.7					$	73.1					$	61.8

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

See accompanying Notes to the Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS AND ACCOUNTING POLICIES

Trimble Inc., (“we” or “our” or “us”) is incorporated in the State of Delaware since October 2016.

We are a leading provider of technology solutions that enable professionals and field mobile workers to improve or transform their work processes. We focus on transforming the way the world works by delivering products and services that connect the physical and digital worlds. We generate revenue primarily through the sale of our hardware, software, maintenance and support, professional services, and subscriptions.

Basis of Presentation

These Consolidated Financial Statements include our results of our consolidated subsidiaries. Intercompany accounts and transactions have been eliminated. Noncontrolling interests represent the noncontrolling stockholders’ proportionate share of the net assets and results of operations of our consolidated subsidiaries.

We use a 52–53 week fiscal year ending on the Friday nearest to December 31. Fiscal 2023, 2022, and 2021 were all 52-week years ending on December 29, 2023, December 30, 2022, and December 31, 2021. Unless otherwise stated, all dates refer to our fiscal year and fiscal periods.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates and assumptions are used for (i) revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price (“SSP”) of performance obligations; (ii) inventory valuation; (iii) valuation of long-lived assets and their estimated useful lives; (iv) goodwill and other long-lived asset impairment analyses; (v) stock-based compensation; and (vi) income taxes. We base our estimates on historical experience and various other assumptions we believe to be reasonable. Actual results that we experience may differ materially from our estimates.

Change in Presentation

During the first quarter of 2023, we changed the presentation of revenue and cost of sales in the Consolidated Statements of Income. This change was made to better reflect our Connect and Scale strategy and business model evolution with a continued shift toward a more significant mix of recurring revenues, which includes subscription, maintenance and support, and term licenses. As such, we revised our presentation, including (i) the combination of subscription and services into one line item, and (ii) moving term licenses from product to subscription and services. The subscription and services line item is more aligned with our performance measures, how we manage our business, and is helpful to investors and others to better understand our results.

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

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

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

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

The revised categories are as follows:

• product, which includes hardware and perpetual software licenses;

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

Prior period amounts have been revised to conform to the current period presentation. This change in presentation did not affect the total revenue or total cost of sales. The effect of the change on the Consolidated Statements of Income for 2022 and 2021 was as follows:

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			2022																		2021
(In millions)
			As Previously Reported						Effect of Change in Presentation						As Reported Herein						As Previously Reported						Effect of Change in Presentation						As Reported Herein
Revenue:
Product			$	2,152.0					$	(165.9)					$	1,986.1					$	2,247.5					$	(112.3)					$	2,135.2
Subscription and services			—						1,690.2						1,690.2						—						1,523.9						1,523.9
Service			641.3						(641.3)						—						649.4						(649.4)						—
Subscription			883.0						(883.0)						—						762.2						(762.2)						—
Total revenue			$	3,676.3					$	—					$	3,676.3					$	3,659.1					$	—					$	3,659.1
Cost of sales:
Product			$	1,046.1					$	(5.3)					$	1,040.8					$	1,090.1					$	(3.7)					$	1,086.4
Subscription and services			—						444.9						444.9						—						450.3						450.3
Service			235.7						(235.7)						—						229.9						(229.9)						—
Subscription			203.9						(203.9)						—						216.7						(216.7)						—
Amortization of purchased intangible assets			85.0						—						85.0						87.7						—						87.7
Total cost of sales			$	1,570.7					$	—					$	1,570.7					$	1,624.4					$	—					$	1,624.4

Reportable Segments

We report our financial performance, including revenue and operating income, based on four reportable segments: Buildings and Infrastructure, Geospatial, Resources and Utilities, and Transportation.

Our Chief Executive Officer, who is our CODM, views and evaluates operations based on the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformance with U.S. GAAP.

Revenue Recognition

Significant Judgments

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of allowance for returns and any taxes collected from customers. We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations; however, determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment.

Judgment is required to determine SSP for each performance obligation. We use a range of amounts to estimate SSP when products and services are sold separately and determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, we estimate SSP considering multiple factors including but not limited to, our internal cost, pricing practices, sales channel, competitive positioning, and overall market and business environments. As our offerings and markets change, we may be required to reassess our estimated SSP and, as a result, the timing and classification of our revenue could be affected.

Nature of Goods and Services

We generate revenue primarily from products and services and subscriptions; each of which is a distinct performance obligation. Descriptions are as follows:

Product

Product revenue includes hardware and perpetual software licenses.

Hardware is recognized when the control of the product transfers to the customer, which is generally when the product is shipped. We recognize shipping fees reimbursed by customers as revenue and the cost for shipping as an expense in Cost of sales when control over products has transferred to the customer.

Software including perpetual licenses is recognized upon delivery and commencement of the license term. In general, our contracts do not provide for customer specific acceptances.

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Subscription and Services

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

SaaS may be sold with devices used to collect, generate, and transmit data. SaaS is distinct from the related devices. SaaS is provided on either a subscription or a consumption basis. In addition, we may host the software that the customer has separately licensed. Hosting services are distinct from the underlying software. Subscription terms generally range from month-to-month to one to three years. Subscription revenue is recognized monthly over the subscription term, commencing from activation. Revenue related to SaaS on a consumption basis is recognized when the customer utilizes the service based on the quantity of the services consumed.

Term license subscriptions contain an on-premise term license component as well as maintenance and support. Term licenses are distinct and recognized upon transfer and commencement of the subscription license term. Maintenance and support are recognized ratably over the subscription term. The subscription term generally ranges from one to three years.

Hardware maintenance and support, commonly called extended warranty, entitles the customer to receive replacement parts and repair services. Extended warranty is separately priced and is recognized on a straight-line basis over the extended service period, which begins after the standard warranty period, ranging from one to two years depending on the product line.

Software maintenance and support entitles the customer to receive software product upgrades and enhancements on a when and if available basis and technical support. Software maintenance is recognized on a straight-line basis commencing upon product delivery over the post-contract support term, which ranges from one to three years, with one year being most common.

Professional services include installation, training, configuration, project management, system integrations, customization, data migration/conversion, and other implementation services. The majority of professional services are not complex, can be provided by other vendors, and are readily available and billed on a time-and-material basis. Revenue for distinct professional services is recognized over time, based on work performed.

Accounts Receivable, Net

Accounts receivable, net, includes billed and unbilled amounts due from customers. Unbilled receivables include revenue recognized that exceeds the amount billed to the customer, provided the billing is not contingent upon future performance, and we have the unconditional right to future payment with only the passage of time required. Both billed and unbilled amounts due are stated at their net estimated realizable value.

We maintain an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. Each reporting period, we evaluate the collectability of our trade accounts receivable based on a number of factors, such as age of the accounts receivable balances, credit quality, historical experience, and current and future economic conditions that may affect a customer’s ability to pay. At the end of 2023 and 2022, the allowances for credit losses were immaterial.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost. Adjustments are also made to reduce the cost of inventory for estimated excess or obsolete balances. Factors influencing these adjustments include declines in demand that impact inventory purchasing forecasts, technological changes, product lifecycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. If our estimate used to reserve for excess and obsolete inventory differs from what is expected, we may be required to recognize additional reserves, which would negatively impact our gross margin.

Property and Equipment, Net

Property and equipment are depreciated using the straight-line method over the shorter of the estimated useful lives or the lease terms when applicable. Useful lives generally range from four to six years for machinery and equipment, five to ten years for furniture and fixtures, two to five years for computer equipment and software, thirty-nine years for buildings, and the life of the lease for leasehold improvements. We capitalize eligible costs to acquire or develop certain internal-use software and amortize those assets using the straight-line method over the estimated useful lives of the assets, which range from two to five years.

Leases

We determine if an arrangement is a lease at inception. Operating leases with lease terms greater than one year are included in Operating lease right-of-use (“ROU”) assets, Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets.

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ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Present value is determined by using our incremental borrowing rate based on the estimated rate of interest for collateralized borrowings over a similar term of the lease payments at the commencement date. The operating lease ROU assets include adjustments made for uneven rents, lease incentives, and lease impairments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lease agreements that include both lease and non-lease components are accounted for as part of the overall lease arrangement.

Business Combinations

We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and any noncontrolling interest based on their fair values at the acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.

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

Acquisition costs are expensed as incurred.

Goodwill

We evaluate goodwill on an annual basis or more frequently if indicators of potential impairment exist. To determine whether goodwill is impaired, we first assess qualitative factors. Qualitative factors include but are not limited to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, or other relevant company-specific events. If it is determined more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount, we perform a quantitative analysis. Alternatively, we may bypass the qualitative assessment and perform a quantitative impairment test.

When performing a quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit's fair value. The estimation of a reporting unit's fair value involves using estimates and assumptions, including expected future operating performance using risk-adjusted discount rates. If the reporting unit's carrying amount exceeds its fair value, an impairment loss is recognized.

Intangible Assets

Intangible assets acquired in a business combination are recorded at fair value. Our intangible assets are amortized over the period of estimated benefit using the straight-line method over their estimated useful lives, which range from three to ten years and have a weighted-average useful life of approximately seven years. We write off fully amortized intangible assets when those assets are no longer used.

We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable based on their future cash flows. The estimated future cash flows are primarily based upon assumptions about expected future operating performance.

Foreign Currency Translation

Assets and liabilities recorded in foreign currency are translated to U.S. dollars at the exchange rates on the balance sheet date. Revenue and expense are translated at average monthly exchange rates during the year. Translation adjustments resulting from this process are recorded to other comprehensive income.

Stock-Based Compensation

Stock-based compensation expense is based on the measurement date fair value of the awards, net of expected forfeitures. Expense is generally recognized on a straight-line basis over the requisite service period of the stock awards. The estimate of the forfeiture rate is based on historical experience.

Research and Development Costs

Research and development costs are expensed as incurred. Development costs for software to be sold subsequent to reaching technical feasibility were not significant and were expensed as incurred. We offset research and development expense with any unconditional third party funding earned and retain the rights to any technology developed under such arrangements.

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Income Taxes

Income taxes are accounted for under the liability method, whereby deferred tax assets or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not such assets will not be realized. Our valuation allowance is primarily attributable to foreign net operating losses and state research and development credit carryforwards.

Relative to uncertain tax positions, we only recognize a tax benefit if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual tax audit outcomes. Changes in recognition or measurement of our uncertain tax positions would result in the recognition of a tax benefit or an additional charge to the tax provision. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

We are subject to income taxes in the U.S. and numerous other countries and are subject to routine corporate income tax audits in many of these jurisdictions. We generally believe that positions taken on our tax returns are more likely than not to be sustained upon audit, but tax authorities in some circumstance have, and may in the future, successfully challenge these positions. Accordingly, our income tax provision includes amounts intended to satisfy assessments that may result from these challenges. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our income tax provision, net income, and cash flows.

Concentrations of Risk

Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk.

We are also exposed to credit risk in our trade receivables, which are derived from sales to end-user customers in diversified industries as well as various resellers. We perform ongoing credit evaluations of our customers’ financial conditions and limit the amount of credit extended, when deemed necessary, but generally do not require collateral.

In addition, we rely on a limited number of suppliers for a number of our critical components.

Guarantees, Including Indirect Guarantees of Indebtedness of Others

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 may agree to hold the other party harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In connection with divesting some of our businesses or assets, we may also indemnify purchasers for certain matters in the normal course of business, such as breaches of representations, covenants, or excluded liabilities. In addition, we entered into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made under these agreements were not material, and no liabilities have been recorded for these obligations in the Consolidated Balance Sheets at the end of 2023 and 2022.

Derivative Financial Instruments

We enter into foreign exchange forward contracts to minimize the short-term impact of foreign currency fluctuations on cash and certain trade and intercompany receivables and payables, primarily denominated in Euro, Canadian Dollars, New Zealand Dollars, British Pound, and 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. We occasionally enter into foreign currency contracts to minimize the impact of foreign currency fluctuations on the purchase price of pending acquisitions. We do not enter into foreign currency forward contracts for trading purposes.

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

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Recently issued Accounting Pronouncements not yet Adopted

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU updates reportable segment disclosure requirements primarily through (i) enhanced disclosures about significant segment expenses, (ii) the composition of other segment items, and (iii) optional disclosure of more than one measure of segment profit or loss if the CODM uses those measures to assess segment performance and allocate resources. The ASU is effective for our Annual Report on Form 10-K beginning in 2024 and, afterward, interim reports. Early adoption is permitted. The ASU should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU updates the annual income tax disclosures by requiring (i) specific categories and greater disaggregation of information in the rate reconciliation, (ii) income taxes paid disaggregated by taxing authority and jurisdiction, and (iii) disclosures of pretax income (or loss) and income tax expense (or benefit). Additionally, certain existing disclosure requirements are removed. The ASU is effective for our Annual Report on Form 10-K beginning in 2025 and is applied prospectively. Early adoption and retrospective application are permitted. We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

Recent Adopted Accounting Pronouncements

There are no recently adopted accounting pronouncements.

NOTE 2: EARNINGS PER SHARE

Basic earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period plus additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive common shares include outstanding stock options, restricted stock units (“RSUs”), contingently issuable shares, and shares to be purchased under our employee stock purchase plan.

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

			2023						2022						2021
(In millions, except per share amounts)
Numerator:
Net income attributable to Trimble Inc.			$	311.3					$	449.7					$	492.7
Denominator:
Weighted-average number of common shares used in basic earnings per share			247.9						248.6						251.4
Effect of dilutive securities			1.2						1.6						2.9
Weighted-average number of common shares and dilutive potential common shares used in diluted earnings per share			249.1						250.2						254.3
Basic earnings per share			$	1.26					$	1.81					$	1.96
Diluted earnings per share			$	1.25					$	1.80					$	1.94
Antidilutive weighted-average shares (1)			1.9						1.3						0.1

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

NOTE 3: ACQUISITIONS

On April 3, 2023, we acquired all of the issued and outstanding shares of TP Group Holding GmbH and Sixfold GmbH, which owned Transporeon, in an all-cash transaction. Transporeon is a Germany-based company and leading cloud-based transportation management software platform that connects key stakeholders across the industry lifecycle to positively impact the optimization of global supply chains, which aligns with our Connect and Scale strategy. Transporeon is reported as part of our Transportation segment.

The total purchase consideration was €1.9 billion or $2.1 billion, which included the repayment of outstanding Transporeon debt of $339.6 million. The acquisition was funded through a combination of cash on hand and debt. See Note 8 “Debt” of this report for more information.

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

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

In 2022, we acquired two businesses, with total purchase consideration of $379.5 million. The largest acquisition was Bid2Win Software, LLC, a leading provider of estimating and operations solutions for the heavy civil construction industry. In the aggregate, the businesses acquired contributed less than 1% of our total revenue during 2022.

In 2021, we acquired AgileAssets, with total purchase consideration of $237.5 million. AgileAssets is a provider of SaaS solutions for transportation asset lifecycle management. The acquisition contributed less than 1% of our total revenue during 2021.

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

Purchase Price Allocation

The fair value of identifiable assets acquired and liabilities assumed was determined under the acquisition method of accounting for business combinations. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair value of intangible assets acquired is generally determined based on a discounted cash flow analysis.

The following table summarizes the consideration transferred to acquire Transporeon and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed, as well as the estimated useful lives of the identifiable intangible assets as of the date of the acquisition. The allocation of the purchase price is still preliminary as we finalize deferred income taxes. Preliminary estimates will be finalized within one year of the acquisition date.

			Fair Value as of the Acquisition Date			Estimated Useful Life
(In millions)
Total purchase consideration			$	2,082.6
Net tangible assets acquired:
Cash and cash equivalents			12.9
Accounts receivable, net			41.8
Other current assets			28.0
Non-current assets			24.7
Accounts payable			(4.1)
Accrued compensation and benefits			(9.7)
Deferred revenue			(16.5)
Other current liabilities			(47.2)
Non-current liabilities			(20.6)
Total net tangible assets acquired			9.3
Intangible assets acquired:
Customer relationships			759.5			11 years
Developed product technology			168.4			7 years
Trade name			11.9			5 years
Total intangible assets acquired			939.8
Deferred tax liability			(256.6)
Fair value of all assets/liabilities acquired			692.5
Goodwill			$	1,390.1

Goodwill consists of growth potential, synergies, and economies of scale expected from combining Transporeon’s operations with ours, together with the highly skilled and valuable assembled workforce. We do not expect the goodwill to be deductible for income tax purposes.

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

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Financial Information

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

			Year of
			2023
(In millions)
Total revenue			$	124.7
Net loss			(42.3)

Pro Forma Financial Information

The unaudited pro forma financial information presented in the following table was computed by combining the historical financial information of Trimble and Transporeon along with the effects from business combination accounting and the associated debt resulting from this acquisition as if the companies were combined on January 1, 2022. This information is presented for informational purposes only, and it is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of that date. This information should not be used as a predictive measure of our future financial position, results of operations, or liquidity.

			Year of
			2023						2022
(In millions)
Total revenue			$	3,839.2					$	3,831.2
Net income			273.0						308.6

NOTE 4: DIVESTITURES

Pending Divestiture

On September 28, 2023, we executed a definitive agreement with AGCO that provides for the formation of a JV with AGCO in the mixed fleet precision agriculture market. Under the terms of the agreement, we will contribute the Trimble Ag business, excluding certain GNSS and guidance technologies, and AGCO will contribute its JCA Technologies business to the JV. We will sell an interest in the JV to AGCO for $2.0 billion in pre-tax cash proceeds, subject to working capital adjustments. Immediately following the closing of this proposed transaction, we will own 15% of the JV and AGCO will own 85% of the JV.

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

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

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

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

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

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

The proposed transaction is expected to close in the first half of 2024 and is subject to customary closing conditions, including regulatory approvals. Trimble Ag is reported as a part of our Resources and Utilities segment.

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

The assets and liabilities of Trimble Ag that are subject to the proposed transaction were classified as held for sale at the end of 2023. The following table presents the carrying values of the major classes of assets and liabilities classified as held for sale in our Consolidated Balance Sheets at the end of 2023:

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			At the End of Year
(In millions)			2023
Cash and cash equivalents			$	9.1
Accounts receivable, net			12.1
Inventories, net			84.2
Other current assets			3.4
Property and equipment, net			20.7
Other purchased intangible assets, net			20.3
Goodwill			268.1
Other non-current assets			3.3
Total Assets Held for Sale			$	421.2
Accounts payable			$	1.8
Deferred revenue, current			14.3
Other current liabilities			16.0
Deferred revenue, non-current			8.3
Other non-current liabilities			7.9
Total Liabilities Held for Sale			$	48.3

Other Divestitures

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

In 2022, we divested six businesses with total proceeds of $226.3 million. The largest divestiture was the sale of Time and Frequency, LOADRITE, Spectra Precision Tools, and SECO accessories businesses to Precisional LLC, an affiliate of The Jordan Company (“TJC”), for $205.1 million in cash, which included a working capital adjustment.

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

NOTE 5: INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The following table presents a summary of our intangible assets:

			At the End of 2023																					At the End of 2022
(In millions)			Weighted-Average Useful Lives (in years)			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Developed product technology			6			$	908.5					$	(554.1)					$	354.4					$	1,004.8					$	(722.7)					$	282.1
Customer relationships			10			1,358.4						(474.5)						883.9						654.1						(445.9)						208.2
Trade names and trademarks			6			43.8						(38.6)						5.2						39.5						(32.7)						6.8
Distribution rights and other intellectual property			7			4.2						(4.2)						—						8.0						(7.0)						1.0
						$	2,314.9					$	(1,071.4)					$	1,243.5					$	1,706.4					$	(1,208.3)					$	498.1

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

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

(In millions)
2024			$	200.4
2025			168.6
2026			163.4
2027			149.7
2028			135.6
Thereafter			425.8
Total			$	1,243.5

Goodwill

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

			Buildings and Infrastructure						Geospatial						Resources and Utilities						Transportation						Total
(In millions)
Balance as of year end 2022			$	2,300.1					$	382.1					$	471.8					$	983.9					$	4,137.9
Additions due to acquisitions			27.7						—						—						1,390.1						1,417.8
Assets held for sale			—						(1.9)						(266.2)						—						(268.1)
Foreign currency translation and other adjustments			19.5						4.9						10.8						27.8						63.0
Balance as of year end 2023			$	2,347.3					$	385.1					$	216.4					$	2,401.8					$	5,350.6

NOTE 6: CERTAIN BALANCE SHEET COMPONENTS

The components of inventory, net were as follows:

At the End of Year			2023						2022
(In millions)
Inventories:
Raw materials			$	88.4					$	154.9
Work-in-process			3.0						13.1
Finished goods			144.3						234.5
Total inventories			$	235.7					$	402.5

Finished goods includes $11.3 million and $16.9 million at the end of 2023 and 2022 for costs of sales that have been deferred in connection with deferred revenue arrangements.

The components of property and equipment, net were as follows:

At the End of Year			2023						2022
(In millions)
Property and equipment, net:
Land, building, furniture, and leasehold improvements			$	237.4					$	244.4
Machinery and equipment			170.0						177.6
Software and licenses			131.6						146.4
Construction in progress			14.0						10.1
			553.0						578.5
Less: accumulated depreciation			(350.5)						(359.5)
Total property and equipment, net			$	202.5					$	219.0

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

At the End of Year			2023						2022
(In millions)
Accumulated foreign currency translation adjustments			$	(158.0)					$	(241.6)
Gain on cash flow hedge			4.7						5.4
Net unrealized actuarial gains			1.2						1.3
Total accumulated other comprehensive loss			$	(152.1)					$	(234.9)

NOTE 7: REPORTING SEGMENT AND GEOGRAPHIC INFORMATION

We determined our operating segments based on how our CODM views and evaluates operations. Various factors, including market separation and customer-specific applications, go-to-market channels, and products and services, were considered in determining these operating segments. Our CODM regularly reviews our segment operating results to make decisions about resources that are allocated to each segment and to assess performance. In each of our segments, we sell many individual products. For this reason, it is impracticable to segregate and identify revenue for each of the individual products or group of products we sell.

Our reportable segments are described below:

• Buildings and Infrastructure**. This segment primarily serves customers working in architecture, engineering, construction, and operations and maintenance.

• Geospatial**. This segment primarily serves customers working in surveying, engineering, and government.

• Resources and Utilities**. This segment primarily serves customers working in agriculture, forestry, and utilities.

• Transportation**. This segment primarily serves customers working in long haul trucking and freight shipper markets.

The following Reporting Segment tables reflect the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformity with U.S. GAAP. This is consistent with the way the CODM evaluates each of the segment's performance and allocates resources.

			Reporting Segments
			Buildings and Infrastructure						Geospatial						Resources and Utilities						Transportation						Total
(In millions)
2023
Segment revenue			$	1,593.1					$	695.5					$	769.1					$	741.0					$	3,798.7
Segment operating income			440.8						209.1						270.6						130.2						$	1,050.7
2022
Segment revenue			$	1,494.0					$	756.5					$	821.6					$	604.2					$	3,676.3
Segment operating income			406.3						221.4						278.3						58.8						964.8
2021
Segment revenue			$	1,422.7					$	828.9					$	771.3					$	636.5					$	3,659.4
Segment operating income			411.7						244.1						264.0						43.4						963.2

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			Reporting Segments
			Buildings and Infrastructure						Geospatial						Resources and Utilities						Transportation						Total
(In millions)
As of Year End 2023
Accounts receivable, net			$	314.1					$	125.0					$	92.5					$	175.0					$	706.6
Inventories			65.0						115.8						11.1						43.8						235.7
Goodwill			2,347.3						385.1						216.4						2,401.8						5,350.6
As of Year End 2022
Accounts receivable, net			$	305.1					$	137.2					$	79.2					$	121.8					$	643.3
Inventories			93.2						146.1						100.3						62.9						402.5
Goodwill			2,300.1						382.1						471.8						983.9						4,137.9
As of Year End 2021
Accounts receivable, net			$	246.8					$	134.0					$	112.9					$	131.1					$	624.8
Inventories			79.3						136.4						67.4						80.2						363.3
Goodwill			2,141.4						403.6						440.8						995.7						3,981.5

A reconciliation of our consolidated segment operating income to consolidated income before income taxes was as follows:

			2023						2022						2021
(In millions)
Consolidated segment operating income			$	1,050.7					$	964.8					$	963.2
Unallocated general corporate expenses			(116.0)						(123.3)						(106.2)
Purchase accounting adjustments			(212.3)						(131.6)						(134.5)
Acquisition / divestiture items			(72.4)						(32.8)						(21.8)
Stock-based compensation / deferred compensation			(151.1)						(112.0)						(128.6)
Restructuring and other costs			(50.1)						(54.2)						(11.1)
Consolidated operating income			448.8						510.9						561.0
Total non-operating income (expense), net			(91.8)						58.2						13.6
Consolidated income before taxes			$	357.0					$	569.1					$	574.6

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The disaggregation of revenue by geography is summarized in the tables below. Revenue is defined as revenue from external customers attributed to countries based on the location of the customer and excludes the effects of certain acquired deferred

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

			Reporting Segments
			Buildings and Infrastructure						Geospatial						Resources and Utilities						Transportation						Total
(In millions)
2023
North America			$	1,026.0					$	300.2					$	217.5					$	474.8					$	2,018.5
Europe			338.1						213.3						328.9						195.9						1,076.2
Asia Pacific			196.6						141.9						56.9						33.5						428.9
Rest of World			32.4						40.1						165.8						36.8						275.1
Total segment revenue			$	1,593.1					$	695.5					$	769.1					$	741.0					$	3,798.7
2022
North America			$	938.1					$	320.7					$	227.0					$	469.4					$	1,955.2
Europe			337.1						247.8						374.3						78.7						1,037.9
Asia Pacific			192.8						140.3						51.7						30.3						415.1
Rest of World			26.0						47.7						168.6						25.8						268.1
Total segment revenue			$	1,494.0					$	756.5					$	821.6					$	604.2					$	3,676.3
2021
North America			$	823.5					$	337.3					$	212.2					$	493.1					$	1,866.1
Europe			386.6						282.3						368.4						87.3						1,124.6
Asia Pacific			188.4						161.4						67.3						30.2						447.3
Rest of World			24.2						47.9						123.4						25.9						221.4
Total segment revenue			$	1,422.7					$	828.9					$	771.3					$	636.5					$	3,659.4

Total revenue in the United States as included in the Consolidated Statements of Income was $1,855.2 million, $1,777.4 million, and $1,687.4 million in 2023, 2022, and 2021. No single customer or country other than the United States accounted for 10% or more of our total revenue in 2023, 2022, and 2021. No single customer accounted for 10% or more of our accounts receivable at the end of 2023 and 2022.

Property and equipment, net by geographic area were as follows:

At the End of Year			2023						2022
(In millions)
Property and equipment, net:
United States			$	153.8					$	157.7
Europe			28.0						40.3
Asia Pacific and Rest of World			20.7						21.0
Total property and equipment, net			$	202.5					$	219.0

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NOTE 8: DEBT

Debt consisted of the following:

At the End of Year												Effective interest rate
(In millions, except percentages)						Date of Issuance						End of 2023						2023						2022
Senior Notes:
Senior Notes, 4.15%, due June 2023						June 2018												$	—					$	300.0
Senior Notes, 4.75%, due December 2024						November 2014						4.95%						400.0						400.0
Senior Notes, 4.90%, due June 2028						June 2018						5.04%						600.0						600.0
Senior Notes, 6.10%, due March 2033						March 2023						6.13%						800.0						—
Credit Facilities:
2022 Revolving Credit Facility, due March 2027						September 2022						6.71%						150.0						225.0
Term Loan, due April 2026						April 2023						6.99%						500.0						—
Term Loan, due April 2028						April 2023						7.12%						500.0						—
Uncommitted Credit Facilities, floating rate												5.06%						130.4						—
Unamortized discount and issuance costs																		(13.8)						(5.0)
Total debt																		$	3,066.6					$	1,520.0
Less: Short-term debt																		530.4						300.0
Long-term debt																		$	2,536.2					$	1,220.0

Debt Maturities

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

Year Payable
2024			$	530.4
2025			—
2026			518.8
2027			193.7
2028			1,037.5
Thereafter			800.0
Total			$	3,080.4

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

Senior Notes are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. We may redeem the notes of each series of senior notes at our option in whole or in part at any time. Such indenture also contains covenants limiting our ability to create certain liens, enter into sale and lease-back transactions, and consolidate or merge with or into, or convey, transfer, or lease all or substantially all of our properties and assets, each subject to certain exceptions.

2033 Senior Notes

In March 2023, we issued an aggregate principal amount of $800.0 million in senior notes (the “2033 Senior Notes”) that will mature in March 2033 and bear interest at a fixed rate of 6.1% per annum. The interest is payable semi-annually in March and September of each year, commencing in September 2023. The interest rate is subject to adjustment from time to time upon a rating agency downgrade or upgrade of the credit rating assigned to the 2033 Senior Notes. The 2033 Senior Notes were sold at 99.843% of the aggregate principal amount. The 2033 Senior Notes are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness.

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Credit Facilities

Bridge Facility

On December 11, 2022, we entered into a bridge facility commitment letter (the “Bridge Facility”) in connection with the acquisition of Transporeon. Under the Bridge Facility, the lender committed to provide a term loan up to an aggregate amount of €1.88 billion. On December 27, 2022, the Bridge Facility was automatically reduced to €500 million upon entering into the 2022 Term Loan Agreement and the 2022 Credit Facility Amendment (as next described). On March 9, 2023, as a result of completing the issuance of the 2033 Senior Notes, the remaining €500 million was automatically terminated with no amounts having been drawn.

2022 Term Loan Credit Agreement

On December 27, 2022, we entered into a $1.0 billion unsecured, delayed draw term loan credit agreement comprised of commitments for a 3-year tranche for $500.0 million and a 5-year tranche for $500.0 million. On April 3, 2023, both variable-rate term loans were drawn to fund the acquisition of Transporeon.

Prepayments are allowed without penalty and cannot be reborrowed.

2022 Credit Facility and Amendment

In March 2022, we entered into a credit agreement (the “2022 Credit Facility”) maturing in March 2027. The 2022 Credit Facility provides for a five-year, unsecured revolving credit facility in the aggregate principal amount of $1.25 billion, and permits us, subject to the satisfaction of certain conditions, to increase the commitments for revolving loans by an aggregate principal amount of up to $500.0 million. The variable interest rate and commitment fees are based on our current long-term, senior unsecured debt ratings, our leverage ratio, and certain specified sustainability targets.

On December 27, 2022, we entered into an amendment to the 2022 Credit Facility (the “2022 Credit Facility Amendment”) that made $600.0 million of the existing commitments under the Credit Facility available for the acquisition of Transporeon and increased our maximum permitted leverage ratio following the closing of the acquisition. On April 3, 2023, we borrowed $225.0 million as part of the proceeds to finance the acquisition. For additional information related to the Transporeon acquisition, see Note 3 “Acquisitions” of this report.

Uncommitted Facilities

At the end of 2023, we had two $75.0 million and one €100.0 million revolving credit facilities, which are uncommitted (the “uncommitted facilities”). Generally, these variable-rate uncommitted facilities may be redeemed upon demand. Borrowings under uncommitted facilities are classified as short-term debt in the Consolidated Balance Sheet.

Covenants

The 2022 term loan credit agreement and 2022 credit facility, as amended, contain customary covenants including, among other requirements, limitations that restrict the Company’s and its subsidiaries’ ability to create liens and enter into sale and leaseback transactions, and restrictions on the ability of the subsidiaries to incur indebtedness. Further, both debt agreements contain financial covenants that require the maintenance of maximum leverage and minimum interest coverage ratios. At the end of 2023, we were in compliance with the covenants for each of our debt agreements.

NOTE 9: LEASES

We have operating leases primarily for certain of our major facilities, including corporate offices, research and development facilities, and manufacturing facilities. Lease terms range from 1 to 12 years, and certain leases include options to extend the lease for up to 10 years. We consider options to extend the lease in determining the lease term.

Operating lease expense consisted of:

			2023						2022						2021
(In millions)
Operating lease expense			$	33.5					$	36.3					$	35.5
Short-term lease expense and other			17.1						14.8						17.8
Total lease expense			$	50.6					$	51.1					$	53.3

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Supplemental cash flow information related to leases was as follows:

			2023						2022						2021
(In millions)
Cash paid for liabilities included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)			$	31.0					$	35.0					$	35.9
Right-of-use assets obtained in exchange for Operating lease liabilities:			$	47.0					$	26.3					$	49.5

(1)Excludes cash payments for short-term leases, which are not capitalized.

Supplemental balance sheet information related to leases was as follows:

At the End of Year			2023						2022
(In millions)
Operating lease right-of-use assets			$	124.0					$	121.2
Other current liabilities			$	29.1					$	35.0
Operating lease liabilities			121.9						105.1
Total operating lease liabilities			$	151.0					$	140.1
Weighted-average discount rate			4.27		%				3.30		%
Weighted-average remaining lease term			7 years						6 years

At the end of 2023, the maturities of lease liabilities were as follows:

(In millions)
2024			$	34.6
2025			29.3
2026			25.0
2027			20.3
2028			16.4
Thereafter			47.9
Total lease payments			$	173.5
Less: imputed interest			22.5
Total			$	151.0

We signed operating leases for real estate of approximately $21.5 million that have not yet commenced at the end of 2023, and as such, have not been recognized on our Consolidated Balance Sheets. These operating leases are expected to commence in 2024 with lease terms ranging from 1 to 11 years.

NOTE 10: COMMITMENTS AND CONTINGENCIES

Commitments

At the end of 2023, we had unconditional purchase obligations of approximately $618.9 million as compared to $858.8 million at the end of 2022. These unconditional purchase obligations primarily represent (i) open non-cancellable purchase orders for material purchases with our inventory vendors, and (ii) various non-cancelable agreements with certain service providers with minimum or fixed commitments.

Litigation

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

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NOTE 11: FAIR VALUE MEASUREMENTS

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

			Fair Values at the end of 2023																								Fair Values at the end of 2022
			Quoted prices in Active Markets for Identical Assets						Significant Other Observable Inputs						Significant Unobservable Inputs												Quoted prices in Active Markets for Identical Assets						Significant Other Observable Inputs						Significant Unobservable Inputs
(In millions)			(Level I)						(Level II)						(Level III)						Total						(Level I)						(Level II)						(Level III)						Total
Assets
Deferred compensation plan (1)			$	31.2					$	—					$	—					$	31.2					$	31.5					$	—					$	—					$	31.5
Derivatives (2)			—						0.3						—						0.3						—						18.0						—						18.0
Contingent consideration (3)			—						—						0.3						0.3						—						—						3.1						3.1
Total assets measured at fair value			$	31.2					$	0.3					$	0.3					$	31.8					$	31.5					$	18.0					$	3.1					$	52.6
Liabilities
Deferred compensation plan (1)			$	31.2					$	—					$	—					$	31.2					$	31.5					$	—					$	—					$	31.5
Derivatives (2)			—						0.3						—						0.3						—						0.2						—						0.2
Total liabilities measured at fair value			$	31.2					$	0.3					$	—					$	31.5					$	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 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 included in Other current assets and Other current liabilities on our Consolidated Balance Sheets.

(3)Represents arrangements to receive payments from buyers of our divested companies that are included in Other current assets on our Consolidated Balance Sheets. The fair values are estimated using scenario-based methods based upon estimated future milestones.

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

Additional Fair Value Information

The total estimated fair value of all outstanding financial instruments that are not recorded at fair value on a recurring basis (debt) was approximately $3.1 billion and $1.5 billion at the end of 2023 and 2022.

The fair value of the senior notes was determined based on observable market prices in less active markets and is categorized accordingly as Level II. The fair values do not indicate the amount we would currently have to pay to extinguish the debt.

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NOTE 12: DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

Deferred Revenue

Changes in our deferred revenue during 2023 and 2022 were as follows:

(In millions)			2023						2022
Beginning balance of the period			$	737.6					$	631.8
Revenue recognized from prior year-end			(607.8)						(511.5)
Billings net of revenue recognized from current year			631.6						617.3
Ending balance of the period			$	761.4					$	737.6

Remaining Performance Obligations

At the end of 2023, approximately $1.8 billion of revenue is expected to be recognized from remaining performance obligations for which goods or services have not been delivered, primarily subscription, software, and software maintenance, and to a lesser extent, hardware and professional services contracts. We expect to recognize $1.2 billion or 70% of our remaining performance obligations as revenue during the next 12 months and the remainder thereafter.

NOTE 13: INCOME TAXES

Income before taxes and the provision (benefit) for taxes consisted of the following:

			2023						2022						2021
(In millions)
Income before taxes:
United States			$	26.9					$	117.7					$	144.0
Foreign			330.1						451.4						430.6
Total			$	357.0					$	569.1					$	574.6
Provision (benefit) for taxes:
U.S. Federal:
Current			$	57.1					$	98.4					$	27.1
Deferred			(92.5)						(97.7)						(22.9)
			(35.4)						0.7						4.2
U.S. State:
Current			12.8						12.6						5.6
Deferred			(6.6)						(5.0)						(2.5)
			6.2						7.6						3.1
Foreign:
Current			80.4						48.4						76.0
Deferred			(5.5)						62.7						(1.5)
			74.9						111.1						74.5
Income tax provision			$	45.7					$	119.4					$	81.8
Effective tax rate			12.8		%				21.0		%				14.2		%

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

			2023						2022						2021
Statutory federal income tax rate			21.0		%				21.0		%				21.0		%
Increase (reduction) in tax rate resulting from:
Foreign income taxed at different rates			0.8		%				4.4		%				0.5		%
U.S. State income taxes			1.0		%				1.0		%				1.1		%
Stock-based compensation			4.8		%				1.2		%				(0.8)		%
Other U.S. taxes on foreign operations			(4.4)		%				(3.1)		%				(1.6)		%
Foreign-derived intangible income			(3.9)		%				(0.4)		%				—		%
U.S. Federal research and development credits			(5.4)		%				(2.2)		%				(2.1)		%
Tax reserve releases			(2.5)		%				(1.8)		%				(2.1)		%
Intellectual property restructuring and tax law changes			—		%				—		%				(2.5)		%
Other			1.4		%				0.9		%				0.7		%
Effective tax rate			12.8		%				21.0		%				14.2		%

Our effective income tax rates for 2023 and 2022 were 12.8% and 21.0%. The decrease was primarily due to increases in tax benefits from U.S. federal R&D credits and FDII in 2023, and a change in the geographic mix of earnings, partially offset by lower stock-based compensation deductions in the current year.

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Index to Financial Statements

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred tax assets and liabilities were as follows:

At the End of Year			2023						2022
(In millions)
Deferred tax liabilities:
Global intangible low-taxed income			$	105.8					$	137.8
Purchased intangibles			373.6						121.1
Operating lease right-of-use assets			30.2						29.0
Other			19.7						16.1
Total deferred tax liabilities			529.3						304.0
Deferred tax assets:
Depreciation and amortization			368.2						400.0
Capitalized research and development			98.4						67.5
Operating lease liabilities			36.2						32.8
U.S. tax credit carryforwards			23.5						25.6
Expenses not currently deductible			26.5						30.9
Net operating loss carryforwards			17.9						20.0
Stock-based compensation			16.7						13.8
Intercompany prepayments			36.6						—
Other			60.8						36.6
Total deferred tax assets			684.8						627.2
Valuation allowance			(31.0)						(42.6)
Total deferred tax assets			653.8						584.6
Total net deferred tax assets			$	124.5					$	280.6
Reported as:
Non-current deferred income tax assets			$	412.3					$	438.4
Non-current deferred income tax liabilities			(287.8)						(157.8)
Net deferred tax assets			$	124.5					$	280.6

At the end of 2023, we have U.S. federal and foreign net operating loss carryforwards, or NOLs, of approximately $19.1 million and $86.3 million, respectively. The U.S. federal NOLs will begin to expire in 2026. There is generally no expiration for the foreign NOLs. Utilization of our U.S. federal NOLs is subject to annual limitations in accordance with the applicable tax code. We have determined that it is more likely than not that we will not realize a portion of the foreign NOLs and, accordingly, a valuation allowance has been established for such amount.

We have California research and development credit carryforwards of approximately $35.3 million, which have an indefinite carryforward period. We believe that it is more likely than not that we will not realize a significant portion of the California research and development credit carryforwards and, accordingly, a valuation allowance has been established for such amount.

As a result of the Tax Act, we can repatriate foreign earnings back to the U.S. when needed with minimal U.S. income tax consequences. We reinvested a large portion of our undistributed foreign earnings in acquisitions and other investments and intend to bring back a portion of foreign cash that was subject to the transition tax and the global intangible low-taxed income tax. During 2023, we repatriated $371.3 million of our foreign earnings to the U.S.

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The total amount of unrecognized tax benefits at the end of 2023 was $88.3 million. A reconciliation of gross unrecognized tax benefits was as follows:

			2023						2022						2021
(In millions)
Beginning balance			$	76.5					$	64.2					$	64.1
Increase related to current year tax positions			12.4						23.0						9.6
(Decrease) increase related to prior years' tax positions			7.6						(0.7)						1.3
Settlement with taxing authorities			—						—						(1.3)
Lapse of statute of limitations			(8.2)						(10.0)						(9.5)
Ending balance			$	88.3					$	76.5					$	64.2

Total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $59.5 million and $51.6 million at the end of 2023 and 2022.

We and our subsidiaries are subject to U.S. federal, state, and foreign income taxes. Our tax years are substantially closed for all U.S. federal and state income taxes for audit purposes through 2015. Non-U.S. income tax matters have been concluded for years through 2008. We are currently in various stages of multiple year examinations from state and foreign (multiple jurisdictions) taxing authorities. While we generally believe it is more likely than not that our tax positions will be sustained, it is reasonably possible that future obligations related to these matters could arise. We believe that our reserves are adequate to cover any potential assessments that may result from the examinations and negotiations.

Although timing of the resolution and/or closure of audits is not certain, we do not believe that our gross unrecognized tax benefits would materially change in the next twelve months.

Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Our liability for unrecognized tax benefits including interest and penalties was recorded in Other non-current liabilities on our Consolidated Balance Sheets. At the end of 2023 and 2022, we accrued $9.9 million and $8.4 million for interest and penalties.

NOTE 14: EMPLOYEE STOCK BENEFIT PLANS

Amended and Restated 2002 Stock Plan

In May 2020, our stockholders approved an amendment to the 2002 Stock Plan to increase the number of shares of common stock available for issuance by 18.0 million shares. As such, our Amended and Restated 2002 Stock Plan provides for the granting of incentive and non-statutory stock options and Restricted Stock Units (“RSUs”) for up to 92.6 million shares. At the end of 2023, the remaining number of shares available for grant under the 2002 stock plan was 11.5 million.

Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense recognized in our Consolidated Statements of Income for the periods indicated:

			2023						2022						2021
(In millions)
Restricted stock units			$	132.8					$	108.7					$	110.5
Stock options			1.8						1.1						1.3
ESPP			10.8						10.6						10.8
Total stock-based compensation expense			$	145.4					$	120.4					$	122.6

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Stock-based compensation expense was allocated as follows:

			2023						2022						2021
(In millions)
Cost of sales			$	14.6					$	12.6					$	9.5
Research and development			40.7						28.0						29.5
Sales and marketing			27.1						24.6						21.5
General and administrative			63.0						55.2						62.1
Total stock-based compensation expense			$	145.4					$	120.4					$	122.6

At the end of 2023, total unamortized stock-based compensation expense was $214.9 million, with a weighted-average recognition period of 1.8 years.

Restricted Stock Units

We grant RSUs containing only service conditions and RSUs containing a combination of service, performance, and market conditions (“PSUs”). RSUs containing only service conditions typically vest ratably over a two- to three-year service period. PSUs are granted to executive officers and other senior employees and vest after a three-year service period.

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

For PSUs, the number of shares received at vesting will range from 0% to 220% of the target grant amount based on either market conditions or performance conditions or, in some cases, both. Market conditions consider our relative total stockholder return (“TSR”) of our common stock as compared to the TSR of the constituents of the S&P 500 over the vesting period. Performance conditions consider the achievement of our financial results or metrics over the vesting period.

			2023 Restricted Stock Units Outstanding
			Number of Units (1)						Weighted Average Grant-Date Fair Value per Share
(In millions, except for per share data)
Outstanding at the beginning of year			4.0						$	67.32
Granted (2)			3.9						49.93
Shares vested, net (2)			(1.7)						61.44
Canceled and forfeited			(0.7)						56.39
Outstanding at the end of year			5.5						$	58.23

(1) Includes 0.9 million PSUs granted, 0.1 million PSUs vested, 0.2 million PSUs cancelled and forfeited, and 1.2 million PSUs outstanding at the end of the year.

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

The weighted-average grant date fair value of all RSUs granted during 2023, 2022, and 2021 was $49.93, $73.32, and $78.44 per share. The fair value of all RSUs vested during 2023, 2022, and 2021 was $110.1 million, $108.3 million, and $81.4 million.

Employee Stock Purchase Plan

We have an ESPP under which our stockholders have approved an aggregate of 39.0 million shares of common stock for issuance to eligible employees. The fair value at the grant date is based on the Black-Scholes valuation model. The plan permits eligible employees to purchase common stock through payroll deductions at 85% of the lower of the fair market value of the common stock at the beginning or at the end of each offering period, which is six months. Rights to purchase shares are granted during the first and third quarter of each year. The ESPP terminates on March 15, 2027. In 2023, 2022, and 2021, 0.8 million, 0.6 million, and 0.6 million shares were issued, representing $35.7 million, $34.7 million, and $33.4 million in cash received for the issuance of stock under the ESPP. At the end of 2023, the number of shares reserved for future purchases was 4.6 million.

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NOTE 15: COMMON STOCK REPURCHASE

In August 2021, our Board of Directors approved a stock repurchase program (“2021 Stock Repurchase Program”) authorizing up to $750.0 million in repurchases of our common stock. At the end of 2023, the 2021 Stock Repurchase Program had remaining authorized funds of $115.3 million.

On January 28, 2024, our Board of Directors approved a new stock repurchase program (“2024 Stock Repurchase Program”) authorizing up to $800.0 million in repurchases of our common stock. The 2024 Stock Repurchase Program replaced the 2021 Stock Repurchase Program, which has been cancelled. Under the 2024 Stock Repurchase Program, the stock repurchase authorization does not have an expiration date.

According to the 2024 Stock Repurchase Program, we may repurchase stock from time to time through accelerated share repurchase programs, open market transactions, privately negotiated transactions, block purchases, tender offers, or by other means. The timing and actual number of any shares repurchased will depend on a variety of factors, including market conditions, our share price, other available uses of capital, applicable legal requirements, and other factors. The 2024 Stock Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.

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

Stock repurchases are reflected as a decrease to common stock based on par value and additional-paid-in-capital, determined by the average book value per share of outstanding stock, calculated at the time of each individual repurchase transaction. The excess of the purchase price over this average for each repurchase was charged to retained earnings. Common stock repurchases under the program were recorded based upon the trade date for accounting purposes. As a result of the 2023 repurchases under the 2021 Stock Repurchase Program, retained earnings was reduced by $79.0 million in 2023.

NOTE 16: SUBSEQUENT EVENT

Reporting Segment Change

Considering the pending AGCO JV transaction and our CODM’s revised organizational structure, effective in the first quarter of 2024, we reorganized our businesses under a new structure. This structure brings similar businesses together, which is expected to enhance our ability to achieve scale and growth consistent with our strategy. Beginning with the first quarter of 2024, our reporting segments, and the results of those segments, will be reorganized to reflect how our CODM assesses performance and allocates resources. The new reporting segments will be as follows:

• Architecture, Engineering, and Construction and Owner Software (“AECO Software”)**. This segment primarily provides software solutions, which sell through a direct channel to customers in the construction industry.

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

• Transportation and Logistics (“T&L”)**. This segment will primarily maintain the historical businesses from the previous Transportation segment, which serves customers working in long haul trucking and freight shipper markets.

We will report the new segment information beginning in the first quarter of 2024. As of and for the year of 2023, our CODM continued to review financial information at the current segment level; therefore, these changes had no impact on our reporting structure for 2023.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Trimble Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Trimble Inc. (the Company) as of December 29, 2023 and December 30, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 29, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 29, 2023 and December 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2023, in conformity with U.S. generally accepted accounting principles.

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

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

			Revenue Recognition – Identification of Performance Obligations
Description of the Matter			As described in Note 1 to the consolidated financial statements, the Company enters into contracts that can include various combinations of products and services. Determining whether products or services are considered distinct performance obligations that should be recognized separately or combined into a single performance obligation may sometimes require significant judgment. Auditing the Company's determination of distinct performance obligations was complex due to the effort involved in assessing whether the various product and service offerings promised within each contract are separate performance obligations or should be combined into a single performance obligation.

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How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company's internal controls over the evaluation of the relevant terms of its contracts, and the appropriate identification of distinct performance obligations. Our audit procedures included evaluating management’s revenue recognition policy which included the application of management’s judgment in the identification of performance obligations. Among other procedures to evaluate management’s identification and determination of the distinct performance obligations, we read executed contracts for a sample of sales transactions to understand the terms in the customer agreement and evaluated the appropriateness of management’s application of the Company’s accounting policy. We evaluated the accuracy of the Company’s contract summary documentation, specifically related to the identification and determination of distinct performance obligations, and the related revenue recognition. Finally, we assessed the appropriateness of the related disclosures in the consolidated financial statements.
			Business Combination – Customer Relationships and Developed Technology
Description of the Matter			During fiscal year 2023, the Company completed the acquisition of Transporeon for consideration of $2.1 billion, as disclosed in Note 3 to the consolidated financial statements. The transaction was accounted for as a business combination. Auditing the Company's accounting for its acquisition of Transporeon was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of identified intangible assets, which principally consisted of developed technology and customer relationships. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business. The Company used a discounted cash flow model to measure the developed technology and customer relationship intangible assets. The significant assumptions used to estimate the value of these intangible assets included certain assumptions that form the basis of the forecasted results, specifically, critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue, revenue growth rates, customer attrition rates, royalty rates, and discount rates. These significant assumptions are forward looking and could be affected by future economic and market conditions.
How We Addressed the Matter in Our Audit			To test the estimated fair value of the developed technology and customer relationships intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions to current industry, market and economic trends and to the Company's budgets and forecasts, and Transporeon’s historical operating results. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. Our valuation specialists’ procedures included, among others, developing a range of independent estimates for the discount rates used in the valuation models and comparing those to the discount rates selected by management.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1986.

San Jose, California February 26, 2024

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Index to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Trimble Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Trimble Inc.’s internal control over financial reporting as of December 29, 2023, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Trimble Inc. (the Company) has not maintained effective internal control over financial reporting as of December 29, 2023, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment. Management has identified a material weakness related to the accounting for the Company’s business combination of Transporeon, including lack of appropriate oversight of third-party valuation specialists and insufficient design and operating effectiveness of management review controls, including controls over the completeness and accuracy of certain assumptions used in the valuation of acquired intangible assets.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of businesses acquired in 2023, which are included in the 2023 consolidated financial statements of the Company and constituted approximately 3% of both tangible assets and revenue as of and for the year ended December 29, 2023. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the businesses acquired in 2023.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 29, 2023 and December 30, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 29, 2023, and the related notes. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated February 26, 2024, which expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Index to Financial Statements

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

San Jose, California February 26, 2024

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