Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Index
			Page
Condensed Consolidated Balance Sheets			5
Condensed Consolidated Statements of Income			6
Condensed Consolidated Statements of Comprehensive Income (Loss)			7
Condensed Consolidated Statements of Stockholders’ Equity			8
Condensed Consolidated Statements of Cash Flows			9
Notes to Condensed Consolidated Financial Statements (Unaudited):			10
Note 1. Overview and Accounting Policies			10
Note 2. Common Stock Repurchase			11
Note 3. Acquisition			11
Note 4. Assets Held for Sale			11
Note 5. Intangible Assets and Goodwill			12
Note 6. Inventories			13
Note 7. Segment Information			13
Note 8. Debt			15
Note 9. Fair Value Measurements			16
Note 10. Deferred Revenue and Remaining Performance Obligations			16
Note 11. Earnings per Share			16
Note 12. Income Taxes			17
Note 13. Commitments and Contingencies			17
Note 14. Subsequent Events			17

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TRIMBLE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

			As of
			First Quarter of						Year End
			2024						2023
(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents			$	255.1					$	229.8
Accounts receivable, net			633.0						706.6
Inventories			230.0						235.7
Prepaid expenses			104.1						89.8
Other current assets			112.1						147.8
Assets held for sale			505.8						421.2
Total current assets			1,840.1						1,830.9
Property and equipment, net			197.9						202.5
Operating lease right-of-use assets			116.8						124.0
Goodwill			5,195.7						5,350.6
Other purchased intangible assets, net			1,168.3						1,243.5
Deferred income tax assets			407.5						412.3
Equity investments			136.4						127.7
Other non-current assets			258.5						247.8
Total assets			$	9,321.2					$	9,539.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt			$	543.4					$	530.4
Accounts payable			190.9						165.3
Accrued compensation and benefits			137.2						181.2
Deferred revenue			720.1						663.1
Income taxes payable			21.5						39.7
Other current liabilities			181.9						201.3
Liabilities held for sale			40.6						48.3
Total current liabilities			1,835.6						1,829.3
Long-term debt			2,486.9						2,536.2
Deferred revenue, non-current			98.5						98.3
Deferred income tax liabilities			265.4						287.8
Operating lease liabilities			115.4						121.9
Other non-current liabilities			170.3						165.7
Total liabilities			4,972.1						5,039.2
Commitments and contingencies (Note 13)
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; 244.2 and 246.5 shares issued and outstanding at the end of the first quarter of 2024 and year end 2023			0.2						0.2
Additional paid-in-capital			2,240.7						2,214.6
Retained earnings			2,340.8						2,437.4
Accumulated other comprehensive loss			(232.6)						(152.1)
Total stockholders’ equity			4,349.1						4,500.1
Total liabilities and stockholders’ equity			$	9,321.2					$	9,539.3

See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

			First Quarter of
(In millions, except per share amounts)			2024						2023
Revenue:
Product			$	367.1					$	434.4
Subscription and services			586.2						481.0
Total revenue			953.3						915.4
Cost of sales:
Product			207.5						216.2
Subscription and services			124.4						115.4
Amortization of purchased intangible assets			27.8						23.0
Total cost of sales			359.7						354.6
Gross margin			593.6						560.8
Operating expense:
Research and development			170.2						159.3
Sales and marketing			146.8						135.4
General and administrative			134.1						110.7
Restructuring			6.6						6.7
Amortization of purchased intangible assets			26.7						11.7
Total operating expense			484.4						423.8
Operating income			109.2						137.0
Non-operating income (expense), net:
Divestitures gain, net			3.5						4.0
Interest expense, net			(45.2)						(19.7)
Income from equity method investments, net			5.6						11.4
Other (expense) income, net			(0.1)						27.9
Total non-operating (expense) income, net			(36.2)						23.6
Income before taxes			73.0						160.6
Income tax provision			15.8						31.8
Net income			$	57.2					$	128.8
Earnings per share:
Basic			$	0.23					$	0.52
Diluted			$	0.23					$	0.52
Shares used in calculating earnings per share:
Basic			245.5						247.2
Diluted			247.4						248.7

See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

			First Quarter of
			2024						2023
(In millions)
Net income			$	57.2					$	128.8
Foreign currency translation adjustments, net of tax			(80.3)						19.7
Net change related to derivatives and other, net of tax			(0.2)						(3.2)
Comprehensive (loss) income			$	(23.3)					$	145.3

See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

			Common stock																		Retained Earnings						Accumulated Other Comprehensive Loss						Total Stockholders’ Equity
			Shares						Amount						Additional Paid-In Capital
(In millions)
Balance at the end of 2023			246.5						$	0.2					$	2,214.6					$	2,437.4					$	(152.1)					$	4,500.1
Net income			—						—						—						57.2						—						57.2
Other comprehensive loss			—						—						—						—						(80.5)						(80.5)
Issuance of common stock under employee plans, net of tax withholdings			0.6						—						16.7						(4.7)						—						12.0
Stock repurchases			(2.9)						—						(27.4)						(149.1)						—						(176.5)
Stock-based compensation			—						—						36.8						—						—						36.8
Balance at the end of the first quarter of 2024			244.2						$	0.2					$	2,240.7					$	2,340.8					$	(232.6)					$	4,349.1

			Common stock																		Retained Earnings						Accumulated Other Comprehensive Loss						Total Stockholders’ Equity
			Shares						Amount						Additional Paid-In Capital
(In millions)
Balance at the end of 2022			246.9						$	0.2					$	2,054.9					$	2,230.0					$	(234.9)					$	4,050.2
Net income			—						—						—						128.8						—						128.8
Other comprehensive income			—						—						—						—						16.5						16.5
Issuance of common stock under employee plans, net of tax withholdings			0.5						—						16.9						(2.9)						—						14.0
Stock-based compensation			—						—						35.7						—						—						35.7
Balance at the end of the first quarter of 2023			247.4						$	0.2					$	2,107.5					$	2,355.9					$	(218.4)					$	4,245.2

See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			First Quarter of
(In millions)			2024						2023
Cash flow from operating activities:
Net income			$	57.2					$	128.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			62.9						44.5
Deferred income taxes			(13.8)						(33.8)
Stock-based compensation			36.4						33.5
Other, net			(2.3)						(27.8)
(Increase) decrease in assets:
Accounts receivable, net			63.9						62.1
Inventories			8.8						(11.1)
Other current and non-current assets			8.1						(6.2)
Increase (decrease) in liabilities:
Accounts payable			26.5						(9.1)
Accrued compensation and benefits			(46.3)						(26.5)
Deferred revenue			60.8						19.5
Income taxes payable			(18.1)						31.6
Other current and non-current liabilities			(10.3)						3.2
Net cash provided by operating activities			233.8						208.7
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired			—						(33.3)
Purchases of property and equipment			(6.8)						(6.4)
Other, net			3.3						12.0
Net cash used in investing activities			(3.5)						(27.7)
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings			12.0						14.0
Repurchases of common stock			(175.0)						—
Proceeds from debt and revolving credit lines			521.2						1,097.1
Payments on debt and revolving credit lines			(555.8)						(523.4)
Other, net			(4.6)						(4.3)
Net cash (used in) provided by financing activities			(202.2)						583.4
Effect of exchange rate changes on cash and cash equivalents			(5.4)						2.7
Net increase in cash and cash equivalents			22.7						767.1
Cash and cash equivalents - beginning of period (1)			238.9						271.0
Cash and cash equivalents - end of period (1)			$	261.6					$	1,038.1
(1) Include $6.5 million and $9.1 million of cash and cash equivalents classified as held for sale as of March 29, 2024 and December 29, 2023.

See accompanying Notes to the Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. OVERVIEW AND ACCOUNTING POLICIES

Basis of Presentation

The Condensed Consolidated Financial Statements include our results of our consolidated subsidiaries. Intercompany accounts and transactions have been eliminated.

We use a 52- to 53-week year ending on the Friday nearest to December 31. 2024 is a 53-week year and 2023 was a 52-week year. The first quarter of 2024 and 2023 ended on March 29, 2024 and March 31, 2023. Unless otherwise stated, all dates refer to these periods.

Use of Estimates

We prepared our interim Condensed Consolidated Financial Statements that accompany these notes in conformity with U.S. GAAP, consistent in all material respects with those applied in our 2023 Form 10-K.

The interim financial information is unaudited, and reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This report should be read in conjunction with our 2023 Form 10-K that includes additional information about our significant accounting policies and the methods and assumptions used in our estimates.

The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates and assumptions are used for (i) revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price of performance obligations; (ii) inventory valuation; (iii) valuation of investments; (iv) valuation of long-lived assets and their estimated useful lives; (v) goodwill and other long-lived asset impairment analyses; (vi) stock-based compensation; and (vii) 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.

New Segment Structure

As a result of the Ag divestiture and our Chief Operating Decision Maker’s (“CODM”) revised organizational structure, effective in the first quarter of 2024, we reorganized our businesses under a new segment structure. This structure brings similar businesses together, which is expected to enhance our ability to achieve scale and growth consistent with our strategy. The updated segment structure is comprised of (i) Architects, Engineers, Construction and Owners (“AECO”), (ii) Field Systems, and (iii) Transportation and Logistics (“T&L”). Prior-year information has been adjusted to reflect the change in segment reporting.

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 disclosures 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 subsequent interim reports. Early adoption is permitted. The ASU should be applied retrospectively to all prior periods presented in the financial statements. Adoption of this ASU will result in additional disclosures related to the reportable segments.

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.

Recently Adopted Accounting Pronouncements

There are no recently adopted accounting pronouncements.

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NOTE 2. COMMON STOCK REPURCHASE

On January 28, 2024, our Board of Directors approved a new stock repurchase program (the “2024 Stock Repurchase Program”) authorizing up to $800.0 million in repurchases of our common stock. The 2024 Stock Repurchase Program replaced the prior stock repurchase program, which was approved in August 2021 and has been cancelled.

Under 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 stock repurchased will depend on a variety of factors, including market conditions, our stock 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. At the end of the first quarter of 2024, there were remaining authorized funds of $625.0 million. The stock repurchase authorization does not have an expiration date.

During the first quarter of 2024, we repurchased approximately 2.9 million shares of common stock in open market purchases at an average price of $60.97 per share for a total of $175.0 million. There were no stock repurchases during the first quarter of 2023.

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.

NOTE 3. ACQUISITION

On April 3, 2023, we acquired Transporeon GmbH 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 T&L 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. In allocating the purchase price, we recorded $1,390.1 million of goodwill, $939.8 million of identifiable intangible assets, $9.3 million of net tangible assets, and $256.6 million of deferred tax liability. See Note 3 “Acquisitions” of the 2023 Form 10-K for additional information.

Pro Forma Financial Information

The unaudited pro forma financial information presented in the following table was determined 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 beginning in the first quarter of 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.

			First Quarter of
			2023
(In millions)
Total revenue			$	955.5
Net income			73.1

NOTE 4. ASSETS HELD FOR SALE

On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed in the second quarter of 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, to PTx Trimble, an LLC. Following the closing of the transaction, we own 15% and AGCO owns 85% of PTx Trimble. See Note 14. “Subsequent Events” of this report for more information.

In the first quarter of 2024, Ag was reported as a part of our Field Systems segment. Following the closing of this transaction, our 15% ownership interest in PTx Trimble will be reported as an equity method investment.

The assets and liabilities of Ag business that are subject to the transaction were classified as held for sale beginning in the third quarter of 2023. The following table presents the carrying values of the major classes of assets and liabilities classified as held for sale in our Condensed Consolidated Balance Sheets:

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			As of
			First Quarter of 2024						Year End 2023
(In millions)
Cash and cash equivalents			$	6.5					$	9.1
Accounts receivable, net			12.3						12.1
Inventories, net			73.9						84.2
Other current assets			5.2						3.4
Property and equipment, net			20.7						20.7
Other purchased intangible assets, net			19.8						20.3
Goodwill			364.8						268.1
Other non-current assets			2.6						3.3
Total Assets Held for Sale			$	505.8					$	421.2
Accounts payable			$	2.1					$	1.8
Deferred revenue, current			13.5						14.3
Other current liabilities			12.2						16.0
Deferred revenue, non-current			7.6						8.3
Other non-current liabilities			5.2						7.9
Total Liabilities Held for Sale			$	40.6					$	48.3

NOTE 5. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The following table presents a summary of our intangible assets:

			As of
			First Quarter of 2024																		Year End 2023
			Gross																		Gross
			Carrying						Accumulated						Net Carrying						Carrying						Accumulated						Net Carrying
(In millions)			Amount						Amortization						Amount						Amount						Amortization						Amount
Developed product technology			$	895.2					$	(572.6)					$	322.6					$	908.5					$	(554.1)					$	354.4
Customer relationships			1,331.9						(490.2)						841.7						1,358.4						(474.5)						883.9
Trade names and other intellectual properties			47.4						(43.4)						4.0						48.0						(42.8)						5.2
			$	2,274.5					$	(1,106.2)					$	1,168.3					$	2,314.9					$	(1,071.4)					$	1,243.5

The estimated future amortization expense of intangible assets at the end of the first quarter of 2024 was as follows:

(In millions)
2024 (Remaining)			$	143.6
2025			166.2
2026			161.0
2027			147.3
2028			133.3
Thereafter			416.9
Total			$	1,168.3

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Goodwill

The changes in the carrying amount of goodwill by segment for the first quarter of 2024 were as follows:

			AECO						Field Systems						T&L						Total
(In millions)
Balance as of year end 2023			$	1,996.9					$	1,063.5					$	2,290.2					$	5,350.6
Assets held for sale adjustment			—						(96.7)						—						(96.7)
Foreign currency translation and other adjustments			(12.9)						(9.6)						(35.7)						(58.2)
Balance as of the end of the first quarter of 2024			$	1,984.0					$	957.2					$	2,254.5					$	5,195.7

NOTE 6. INVENTORIES

The components of inventory, net were as follows:

			As of
			First Quarter of						Year End
			2024						2023
(In millions)
Raw materials			$	86.5					$	88.4
Work-in-process			4.4						3.0
Finished goods			139.1						144.3
Total inventories			$	230.0					$	235.7

NOTE 7. SEGMENT INFORMATION

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.

Our reportable segments are described below:

• Architects, Engineers, Construction and Owners (“AECO”)**. This segment primarily provides software solutions that sell primarily through a direct channel to customers in the construction industry.

• Field Systems**. This segment primarily provides hardware and associated software solutions that sell primarily through dealer partner channels.

• Transportation and Logistics (“T&L”)**. This segment primarily provides solutions for 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. This is consistent with the way the CODM evaluates each of the segment’s performance and allocates resources.

			Reporting Segments
			AECO						Field Systems						T&L						Total
(In millions)
First Quarter of 2024
Segment revenue			$	339.1					$	419.2					$	195.0					$	953.3
Segment operating income			126.7						98.3						36.3						261.3
First Quarter of 2023
Segment revenue			$	288.1					$	479.9					$	147.4					$	915.4
Segment operating income			95.4						137.4						20.3						253.1

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			Reporting Segments
			AECO						Field Systems						T&L						Total
(In millions)
As of the end of the First Quarter of 2024
Accounts receivable, net			$	163.3					$	295.2					$	174.5					$	633.0
Inventories			1.2						200.5						28.3						230.0
Goodwill			1,984.0						957.2						2,254.5						5,195.7
As of Year End 2023
Accounts receivable, net			$	222.5					$	309.8					$	174.3					$	706.6
Inventories			3.2						202.7						29.8						235.7
Goodwill			1,996.9						1,063.5						2,290.2						5,350.6

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

			First Quarter of
			2024						2023
(In millions)
Consolidated segment operating income			$	261.3					$	253.1
Unallocated general corporate expenses			(26.9)						(27.0)
Amortization of purchased intangible assets			(54.5)						(34.7)
Acquisition / divestiture items			(23.9)						(7.0)
Stock-based compensation / deferred compensation			(38.8)						(35.4)
Restructuring and other costs			(8.0)						(12.0)
Consolidated operating income			109.2						137.0
Total non-operating (expense) income, net			(36.2)						23.6
Consolidated income before taxes			$	73.0					$	160.6

The disaggregation of revenue by geography is summarized in the tables below. Revenue is defined as revenue from external customers attributed to countries based on the location of the customer and is consistent with the Reporting Segment tables above.

			Reporting Segments
			AECO						Field Systems						T&L						Total
(In millions)
First Quarter of 2024
North America			$	193.1					$	182.0					$	119.7					$	494.8
Europe			100.0						140.5						56.7						297.2
Asia Pacific			35.0						65.0						5.7						105.7
Rest of World			11.0						31.7						12.9						55.6
Total segment revenue			$	339.1					$	419.2					$	195.0					$	953.3
First Quarter of 2023
North America			$	167.9					$	198.5					$	115.4					$	481.8
Europe			84.0						160.2						23.6						267.8
Asia Pacific			25.5						76.1						1.5						103.1
Rest of World			10.7						45.1						6.9						62.7
Total segment revenue			$	288.1					$	479.9					$	147.4					$	915.4

Total revenue in the United States as included in the Condensed Consolidated Statements of Income was $456.9 million and $437.5 million for the first quarter of 2024 and 2023. No single customer or country other than the United States accounted for 10% or more of our total revenue.

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NOTE 8. DEBT

Debt consisted of the following:

												As of
												First Quarter of												Year End
Instrument						Date of Issuance						2024									2023
(In millions)												Effective interest rate
Senior Notes:
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									800.0
Credit Facilities:
2022 Revolving Credit Facility, due March 2027						September 2022						6.68%			100.0									150.0
Term Loan, due April 2026						April 2023						6.93%			500.0									500.0
Term Loan, due April 2028						April 2023						7.06%			500.0									500.0
Uncommitted Credit Facilities, floating rate												5.38%			143.4									130.4
Unamortized discount and issuance costs															(13.1)									(13.8)
Total debt															$	3,030.3								$	3,066.6
Less: Short-term debt															543.4									530.4
Long-term debt															$	2,486.9								$	2,536.2

Debt Maturities

At the end of the first quarter of 2024, our debt maturities based on outstanding principal were as follows (in millions):

Year Payable
2024 (Remaining)			$	543.4
2025			—
2026			518.8
2027			143.7
2028			1,037.5
Thereafter			800.0
Total			$	3,043.4

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. Additional details are unchanged from the information disclosed in Note 8 “Debt” of the 2023 Form 10-K.

Credit Facilities

2023 Term Loans

In 2023, we entered into two unsecured, variable-rate term loans comprised of a 3-year tranche for $500.0 million and a 5-year tranche for $500.0 million. In the second quarter of 2024, we repaid the term loans in full. See Note 14 “Subsequent Events” of this report for additional information.

2022 Credit Facility

In 2022, we entered into a five-year, unsecured, revolving credit facility in the aggregate principal amount of $1.25 billion. Subject to approval, we may 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.

Uncommitted Facilities

At the end of the first quarter of 2024, we had two $75.0 million and one €100.0 million revolving credit facilities, which are uncommitted. Generally, these variable-rate, uncommitted facilities may be redeemed upon demand. Borrowings under uncommitted facilities are classified as short-term debt in the Condensed Consolidated Balance Sheet.

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Covenants

The 2023 term loans and 2022 credit facility contain customary covenants, including, among other requirements, limitations that restrict our and our subsidiaries’ ability to create liens and enter into sale and leaseback transactions, and restrictions on the ability of the subsidiaries to incur indebtedness. The facilities contain financial covenants that require the maintenance of maximum leverage and minimum interest coverage ratios, as well as the timely delivery of quarterly financial reports and compliance certificates. At the end of the first quarter of 2024, we were in compliance with our covenants for each of our debt agreements.

NOTE 9. FAIR VALUE MEASUREMENTS

Fair value is measured by using observable or, to the extent necessary, unobservable inputs.

Financial instruments recorded at fair value include our deferred compensation plan. The fair value was $32.0 million and $31.2 million at the end of the first quarter of 2024 and the end of 2023, and is included in Other non-current assets and Other non-current liabilities on our Condensed Consolidated Balance Sheets. The fair value was measured by using quoted prices in active markets.

Financial instruments not recorded at fair value on a recurring basis (debt) had an estimated fair value of $3.1 billion at both the end of the first quarter of 2024 and the end of 2023. The fair value of the debt was determined based on observable market prices in less active markets. The fair values do not indicate the amount we would currently have to pay to extinguish the debt.

NOTE 10. DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

Deferred Revenue

Changes in our deferred revenue during the first quarter of 2024 and 2023 were as follows:

			First Quarter of
(In millions)			2024						2023
Beginning balance of the period			$	761.4					$	737.6
Revenue recognized from prior year-end			(299.2)						(293.5)
Billings net of revenue recognized from current year and other			356.4						316.7
Ending balance of the period			$	818.6					$	760.8

Remaining Performance Obligations

At the end of the first quarter of 2024, approximately $1.7 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 11. 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 shares of common stock include outstanding stock options, restricted stock units, 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:

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			First Quarter of
			2024						2023
(In millions, except per share amounts)
Numerator:
Net income			$	57.2					$	128.8
Denominator:
Weighted-average shares of common stock outstanding - basic			245.5						247.2
Effect of dilutive securities			1.9						1.5
Weighted-average shares of common stock outstanding - diluted			247.4						248.7
Basic earnings per share			$	0.23					$	0.52
Diluted earnings per share			$	0.23					$	0.52
Antidilutive weighted-average shares (1)			0.8						1.6

(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 12. INCOME TAXES

For the first quarter, our effective income tax rate was 21.6%, as compared to 19.8% in the corresponding period in 2023. The increase was primarily due to a decreased tax benefit from foreign-derived intangible income.

Unrecognized tax benefits of $60.4 million and $59.5 million at the end of the first quarter of 2024 and at the end of 2023, if recognized, would favorably affect the effective income tax rate in future periods. At the end of the first quarter of 2024 and at the end of 2023, we accrued interest and penalties of $11.3 million and $9.9 million.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Commitments

At the end of the first quarter of 2024, we had unconditional purchase obligations of approximately $638.0 million. 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, to which we or any of our subsidiaries are a party, or to which any of our or our subsidiaries’ property is subject.

NOTE 14. SUBSEQUENT EVENTS

Closing of the Ag Divestiture

On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, in exchange for $1.9 billion in cash proceeds, subject to working capital adjustments. Following the closing of this transaction, we own 15% and AGCO owns 85% of PTx Trimble, an LLC. In addition to forming PTx Trimble, the parties concurrently entered into agreements that include the following: (i) long-term supply agreement for key GNSS and guidance technologies, (ii) technology transfer and license agreement, (iii) trademark license agreement, (iv) master sale and distribution agreement for the positioning services, and (v) transition services agreement. The agreement provides AGCO with a call option and Trimble with a put option with respect to our interest in PTx Trimble.

In the second quarter of 2024, we derecognized the assets and liabilities that were transferred, recognized the fair value of our equity method investment, and recorded a pre-tax gain of $1.7 billion. See Note 4 “Assets Held for Sale” of this report for more information.

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Repayment of Term Loans

On April 1, 2024, we repaid in full $1.0 billion aggregate principal amount of term loans. The funds used for the repayment were a portion of the funds received in connection with the Ag divestiture. See Note 8 “Debt” of this report for more information about our debt.

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