SEC Filing | Trimble, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023
			or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____

Commission file number: 001-14845

TRIMBLE INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)						94-2802192 (I.R.S. Employer Identification Number)

10368 Westmoor Drive, Westminster, CO 80021

(Address of principal executive offices) (Zip Code)

(720) 887-6100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer	ý	Accelerated Filer	¨
Non-accelerated Filer	¨	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	TRMB	NASDAQ Global Select Market

As of April 28, 2023, there were 247,746,800 shares of Common Stock, par value $0.001 per share, outstanding.

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SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to the “safe harbor” created by those sections. These statements include, among other things:

•potential weakness and uncertainties in the US and global macroeconomic outlook, including slowing growth, inflationary pressures, and increases in interest rates, which may affect demand for our products and services and adversely affect our results of operations;

•potential impact of volatility and conflict in the political and economic environment, including the ongoing military conflict between Russia and Ukraine and related sanctions and the direct and indirect impact on our business;

•the pace at which our dealers work through their inventories;

•our expectation that inventory levels will normalize as the impact of dealer inventories moving towards lower levels due to improved product lead times and macroeconomic concerns stabilize;

•our belief that inflationary cost pressures will diminish over time as supply chain conditions continue to normalize;

•fluctuations in foreign currency exchange rates;

•seasonal fluctuations in our hardware revenue, sales to U.S. governmental agencies, longer ordering, lead times and less flexibility to adapt to changes in product mix demand, and expectations that we will experience less seasonality in the future;

•the portion of our revenue expected to come from sales to customers located in countries outside of the U.S.;

•our plans to continue to invest in research and development to actively develop and introduce new products and to deliver targeted solutions to the markets we serve;

•a continued shift in revenue towards a more significant mix of software and recurring revenue, including subscription, maintenance and support, and services revenue;

•our belief that increases in recurring revenue, including from our software and subscription solutions, will provide us with enhanced business visibility over time;

•our growth strategy, including our focus on historically underserved large markets, the relative importance of organic growth versus strategic acquisitions, and the reasons that we acquire businesses;

•any anticipated benefits to us from our acquisitions, including the Transporeon acquisition, and our ability to successfully integrate the acquired businesses;

•the impact of indebtedness we incurred in connection with the acquisition of Transporeon on our results of operations and financial condition;

•our belief that our cash and cash equivalents, together with borrowings under the commitments for our credit facilities and senior notes, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, debt service, and planned capital expenditures;

•our belief that our gross unrecognized tax benefits will not materially change in the next twelve months;

•our discretion to conduct, suspend, or discontinue our stock repurchase program subject to the discretion of our management; and

•our commitments to environmental, social, and governance matters.

The forward-looking statements regarding future events and the future results of Trimble Inc. (“the Company” or “we” or “our” or “us”) are based on current expectations, estimates, forecasts, and projections about the industries in which we operate, and the beliefs and assumptions of our management. Discussions containing such forward-looking statements may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this report. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These forward-looking statements involve certain risks and uncertainties that could cause actual results, levels of activity, performance, achievements, and events to differ materially from those implied by such forward-looking statements, including but not limited to those discussed in this report under the section entitled “Risk Factors” and elsewhere, and in other reports we file with the Securities and Exchange Commission (“SEC”), specifically the most recent Form 10-K for 2022 (the “2022 Form 10-K”) and in other reports we file with the SEC, each as it may be amended from time to time. These forward-looking statements are made as of the date of this report. We reserve the right to update these forward-looking statements for any reason, including the occurrence of material events, but assume no duty to update these statements to reflect subsequent events.

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TRIMBLE INC.

FORM 10-Q for the Quarter Ended March 31, 2023

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFO RMATION

ITEM 1.	Financial Statements (Unaudited)	4







ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	30

ITEM 4.	Controls and Procedures	31


PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	31

ITEM 1A.	Risk Factors	31

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

ITEM 3.	Defaults Upon Senior Securities	31

ITEM 4.	Mine Safety Disclosures	31

ITEM 5.	Other Information	31

ITEM 6.	Exhibits	32


SIGNATURES		33

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PART I – FINANCIAL INFORMATION

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			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. C ommon Stock Repurchase			11

Note 3 . Intangible Assets and Goodwill			12
Note 4 . Inventories			12
Note 5 . Segment Information			12
Note 6 . Debt			14
Note 7 . Fair Value Measurements			16
Note 8 . Deferred Revenue and Remaining Performance Obligations			17
Note 9 . Earnings per Share			17
Note 1 0 . Income Taxes			17
Note 1 1 . Commitments and Contingencies			18
Note 1 2 . Subsequent Events			18

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TRIMBLE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	As of		As of
	First Quarter of		Year End
	2023		2022

(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	1,038.1	$	271.0

Accounts receivable, net	578.8		643.3

Inventories	409.4		402.5
Other current assets	212.6		201.4
Total current assets	2,238.9		1,518.2
Property and equipment, net	215.1		219.0
Operating lease right-of-use assets	113.2		121.2
Goodwill	4,176.6		4,137.9
Other purchased intangible assets, net	484.3		498.1
Deferred income tax assets	432.4		438.4
Other non-current assets	352.4		336.2
Total assets	$	8,012.9	$	7,269.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	300.0	$	300.0
Accounts payable	166.5		175.5
Accrued compensation and benefits	130.8		159.4
Deferred revenue	659.3		639.1

Other current liabilities	224.3		188.1
Total current liabilities	1,480.9		1,462.1
Long-term debt	1,786.9		1,220.0
Deferred revenue, non-current	101.5		98.5
Deferred income tax liabilities	119.9		157.8
Income taxes payable	40.9		40.9
Operating lease liabilities	99.6		105.1
Other non-current liabilities	138.0		134.4
Total liabilities	3,767.7		3,218.8
Commitments and contingencies (Note 11)
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; 247.4 and 246.9 shares issued and outstanding at the end of the first quarter of 2023 and year end 2022	0.2		0.2
Additional paid-in-capital	2,107.5		2,054.9
Retained earnings	2,355.9		2,230.0
Accumulated other comprehensive loss	(218.4)		(234.9)


Total stockholders' equity	4,245.2		4,050.2
Total liabilities and stockholders' equity	$	8,012.9	$	7,269.0

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)	2023		2022

Revenue:
Product	$	434.4	$	566.8
Subscription and services	481.0		426.9
Total revenue	915.4		993.7
Cost of sales:
Product	216.2		306.9
Subscription and services	115.4		114.7
Amortization of purchased intangible assets	23.0		22.5
Total cost of sales	354.6		444.1
Gross margin	560.8		549.6
Operating expense:
Research and development	159.3		140.3
Sales and marketing	135.4		131.9
General and administrative	110.7		101.5
Restructuring	6.7		6.9
Amortization of purchased intangible assets	11.7		12.1
Total operating expense	423.8		392.7
Operating income	137.0		156.9
Non-operating income (expense), net:

Interest expense, net	(19.7)		(16.0)

Income from equity method investments, net	11.4		9.7
Other income (expense), net	31.9		(12.1)
Total non-operating income (expense), net	23.6		(18.4)
Income before taxes	160.6		138.5
Income tax provision	31.8		28.2
Net income	$	128.8	$	110.3


Earnings per share:
Basic	$	0.52	$	0.44
Diluted	$	0.52	$	0.44
Shares used in calculating earnings per share:
Basic	247.2		250.8
Diluted	248.7		252.8

See accompanying Notes to the Condensed Consolidated Financial Statements.

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TRIMBLE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	First Quarter of
	2023		2022

(In millions)
Net income	$	128.8	$	110.3
Foreign currency translation adjustments, net of tax	19.7		(2.2)
Net change related to derivatives and other, net of tax	(3.2)		—
Comprehensive income	$	145.3	$	108.1

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 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


	Common stock					Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital
(In millions)
Balance at the end of 2021	250.9	$	0.3	$	1,935.6	$	2,170.5	$	(161.7)	$	3,944.7
Net income	—	—		—		110.3		—		110.3
Other comprehensive loss	—	—		—		—		(2.2)		(2.2)

Issuance of common stock under employee plans, net of tax withholdings	0.7	—		15.2		(17.6)		—		(2.4)
Stock repurchases	(1.5)	—		(11.8)		(92.9)		—		(104.7)
Stock-based compensation	—	—		42.2		—		—		42.2

Balance at the end of the first quarter of 2022	250.1	$	0.3	$	1,981.2	$	2,170.3	$	(163.9)	$	3,987.9

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)	2023		2022
Cash flow from operating activities:
Net income	$	128.8	$	110.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	9.8		10.0
Amortization expense	34.7		34.6
Deferred income taxes	(33.8)		(16.8)
Stock-based compensation	33.5		28.3
Change in fair value of derivatives	(26.9)		(0.1)

Other, net	(0.9)		16.8
(Increase) decrease in assets:
Accounts receivable, net	62.1		(34.6)

Inventories	(11.1)		(42.7)
Other current and non-current assets	(6.2)		(14.6)
Increase (decrease) in liabilities:
Accounts payable	(9.1)		7.8
Accrued compensation and benefits	(26.5)		(75.6)
Deferred revenue	19.5		73.3

Other current and non-current liabilities	34.8		56.3
Net cash provided by operating activities	208.7		153.0
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired	(33.3)		—
Purchases of property and equipment	(6.4)		(14.5)







Other, net	12.0		1.1
Net cash used in investing activities	(27.7)		(13.4)
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings	14.0		(2.4)
Repurchases of common stock	—		(104.7)
Proceeds from debt and revolving credit lines	1,097.1		118.8
Payments on debt and revolving credit lines	(523.4)		(118.8)
Other, net	(4.3)		(2.6)
Net cash provided by (used in) financing activities	583.4		(109.7)
Effect of exchange rate changes on cash and cash equivalents	2.7		1.6
Net increase in cash and cash equivalents	767.1		31.5
Cash and cash equivalents - beginning of period	271.0		325.7
Cash and cash equivalents - end of period	$	1,038.1	$	357.2

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. Both 2023 and 2022 are 52-week years. The first quarter of 2023 and 2022 ended on March 31, 2023 and April 1, 2022. 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 Form 10-K filed with the U.S. Securities and Exchange Commission on February 17, 2023 (the “2022 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 2022 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 revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price (“SSP”) of performance obligations, provision for credit losses, sales returns reserve, inventory valuation, warranty costs, investments, acquired intangibles, goodwill and intangible asset impairment analysis, other long-lived asset impairment analysis, stock-based compensation, and 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 Condensed 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 (a) the combination of subscription and services into one line item, and (b) 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 Software as a Service (“SaaS”), data, and hosting services.

The revised categories are as follows:

•product, which includes hardware and perpetual software licenses;

•subscription and services, which includes SaaS, data, and hosting services, as well as term licenses, hardware and software 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 Condensed Consolidated Statements of Income for the first quarter of 2022 was as follows:

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	First Quarter of 2022
(In millions)
	As Previously Reported		Effect of Change in Presentation		As Reported Herein
Revenue:
Product	$	621.6	$	(54.8)	$	566.8
Subscription and services	—		426.9		426.9
Service	161.1		(161.1)		—
Subscription	211.0		(211.0)		—

Total revenue	$	993.7	$	—	$	993.7

Cost of sales:
Product	$	308.4	$	(1.5)	$	306.9
Subscription and services	—		114.7		114.7
Service	63.3		(63.3)		—
Subscription	49.9		(49.9)		—
Amortization of purchased intangible assets	22.5		—		22.5
Total cost of sales	$	444.1	$	—	$	444.1

Recently issued Accounting Pronouncements not yet Adopted

There are no recently issued accounting pronouncements applicable to us not yet adopted.

Recently Adopted Accounting Pronouncements

There are no recently adopted accounting pronouncements.

NOTE 2. COMMON STOCK REPURCHASE

In August 2021, our Board of Directors approved a new stock repurchase program (“2021 Stock Repurchase Program”), authorizing up to $750.0 million in repurchases of our common stock. The 2021 Stock Repurchase Program’s authorization does not have an expiration date.

Under the 2021 Stock Repurchase Program, we may repurchase stock from time to time through open market transactions, privately-negotiated transactions, accelerated stock repurchase plans, 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 2021 Stock Repurchase Program may be suspended, modified, or discontinued at any time at the Company’s discretion without notice. At the end of the first quarter of 2023, the 2021 Stock Repurchase Program had remaining authorized funds of $215.3 million.

During the first quarter of 2022, we repurchased approximately 1.5 million shares of common stock in open market purchases at an average price of $68.49 per share for a total of $104.7 million under the 2021 Stock Repurchase Program.

Because of the additional outstanding indebtedness we incurred in connection with the Transporeon acquisition, beginning in the fourth quarter of 2022, we have temporarily discontinued our stock repurchases. See Note 1 2 “Subsequent Ev e nt s ” of this report for information regarding our acquisition of Transporeon.

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.

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NOTE 3. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The following table presents a summary of our intangible assets:


	First Quarter of 2023						Year End 2022
	Gross						Gross
	Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
(In millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Developed product technology	$	1,024.0	$	(745.4)	$	278.6	$	1,004.8	$	(722.7)	$	282.1
Customer relationships	638.8		(439.8)		199.0		654.1		(445.9)		208.2
Trade names and trademarks	39.0		(33.6)		5.4		39.5		(32.7)		6.8
Distribution rights and other intellectual property	6.4		(5.1)		1.3		8.0		(7.0)		1.0
	$	1,708.2	$	(1,223.9)	$	484.3	$	1,706.4	$	(1,208.3)	$	498.1

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


(In millions)
2023 (Remaining)	$	101.7
2024	111.8
2025	76.2
2026	70.0
2027	56.3
Thereafter	68.3
Total	$	484.3

Goodwill

The changes in the carrying amount of goodwill by segment for the first quarter of 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	22.5		—		—		—		22.5

Foreign currency translation and other adjustments	6.6		2.2		6.2		1.2		16.2

Balance as of the end of the first quarter of 2023	$	2,329.2	$	384.3	$	478.0	$	985.1	$	4,176.6

NOTE 4. INVENTORIES

The components of inventory, net were as follows:


	First Quarter of		Year End
As of	2023		2022
(In millions)
Raw materials	$	149.0	$	154.9
Work-in-process	16.1		13.1
Finished goods	244.3		234.5
Total inventories	$	409.4	$	402.5

NOTE 5. SEGMENT INFORMATION

We determined our operating segments based on how our Chief Operating Decision Maker (“CODM”) views and evaluates operations. 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.

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•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)
First Quarter of 2023
Segment revenue	$	399.5	$	152.4	$	208.6	$	154.9	$	915.4

Segment operating income	$	113.3	$	37.3	$	79.1	$	23.4	$	253.1

First Quarter of 2022
Segment revenue	$	397.6	$	207.5	$	229.9	$	158.7	$	993.7

Segment operating income	$	120.7	$	57.9	$	75.1	$	9.2	$	262.9


	Reporting Segments
	Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation		Total
(In millions)
As of the end of the First Quarter of 2023
Accounts receivable, net	$	231.9	$	126.8	$	89.7	$	130.4	$	578.8
Inventories	94.0		149.7		106.0		59.7		409.4
Goodwill	2,329.2		384.3		478.0		985.1		4,176.6
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

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


	First Quarter of
	2023		2022
(In millions)
Consolidated segment operating income	$	253.1	$	262.9
Unallocated general corporate expenses	(27.0)		(29.8)
Amortization of purchased intangible assets	(34.7)		(34.6)
Acquisition / divestiture items	(7.0)		(3.9)
Stock-based compensation / deferred compensation	(35.4)		(25.0)
Restructuring and other costs	(12.0)		(12.7)
Consolidated operating income	137.0		156.9
Total non-operating income (expense), net	23.6		(18.4)
Consolidated income before taxes	$	160.6	$	138.5

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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 is consistent with the Reporting Segment tables above.


	Reporting Segments
	Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation		Total
(In millions)
First Quarter of 2023
North America	$	249.8	$	57.7	$	54.9	$	119.4	$	481.8
Europe	94.2		52.2		99.1		22.3		267.8
Asia Pacific	48.1		32.4		16.0		6.6		103.1
Rest of World	7.4		10.1		38.6		6.6		62.7
Total segment revenue	$	399.5	$	152.4	$	208.6	$	154.9	$	915.4
First Quarter of 2022
North America	$	231.9	$	83.4	$	59.0	$	124.1	$	498.4
Europe	112.3		71.2		114.0		21.7		319.2
Asia Pacific	46.9		42.0		19.2		7.4		115.5
Rest of World	6.5		10.9		37.7		5.5		60.6
Total segment revenue	$	397.6	$	207.5	$	229.9	$	158.7	$	993.7

Total revenue in the United States as included in the Condensed Consolidated Statements of Income was $437.5 million and $447.0 million for the first quarter of 2023 and 2022. No single customer or country other than the United States accounted for 10% or more of our total revenue.

NOTE 6. DEBT

Debt consisted of the following:


		First Quarter of				Year End
Instrument	Date of Issuance	2023			2022
(In millions)		Effective interest rate
Senior Notes:
Senior Notes, 4.15%, due June 2023	June 2018	4.36%	$	300.0		$	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	5.54%	—			225.0


Unamortized discount and issuance costs			(13.1)			(5.0)
Total debt			$	2,086.9		$	1,520.0
Less: Short-term debt			300.0			300.0
Long-term debt			$	1,786.9		$	1,220.0

Debt Maturities

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


Year Payable
2023 (Remaining)	$	300.0
2024	400.0
2025	—
2026	—
2027	—
Thereafter	1,400.0
Total	$	2,100.0

Senior Notes

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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). Additional details are unchanged from the information disclosed in Note 7, “Debt” of the 2022 Form 10-K.

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.

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 credit agreement (the “2022 Term Loan Credit Agreement”) providing for an unsecured delayed draw term loan facility in the aggregate principal amount of $1.0 billion, comprised of commitments for a 3-year tranche for $500.0 million and a 5-year tranche for $500.0 million.

The 2022 Term Loan Credit Agreement was entered into in connection with the acquisition of Transporeon. No amounts were drawn at the end of the first quarter of 2023. Additional details are unchanged from the information disclosed in Note 7, “Debt” of the 2022 Form 10-K.

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 interest rate and commitment fees are based on our current long-term, senior unsecured debt ratings, our leverage ratio, and certain specified sustainability targets. As of March 31, 2023, no amount was outstanding under the 2022 Credit Facility.

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.

For additional information related to debt issued in connection with the Transporeon acquisition on April 3, 2023, see N ote 1 2 “Subsequent Events ” of this report.

Uncommitted Facilities

At the end of the first quarter of 2023, we had two $75.0 million, one €100.0 million, and one £55.0 million revolving credit facilities, which are uncommitted (the “uncommitted facilities”). Generally, these uncommitted facilities may be redeemed upon demand. Borrowings under uncommitted facilities are classified as short-term debt in the Condensed Consolidated Balance Sheet. As of March 31, 2023, no amounts were outstanding under the uncommitted facilities.

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 the first quarter of 2023, we were in compliance with the covenants for each of our debt agreements.

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NOTE 7. 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 as of the end of the First Quarter 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)	$	32.3	$	—	$	—	$	32.3	$	31.5	$	—	$	—	$	31.5
Derivatives (2)	—		38.3		—		38.3		—		18.0		—		18.0
Contingent consideration (3)	—		—		1.9		1.9		—		—		3.1		3.1
Total assets measured at fair value	$	32.3	$	38.3	$	1.9	$	72.5	$	31.5	$	18.0	$	3.1	$	52.6

Liabilities
Deferred compensation plan (1)	$	32.3	$	—	$	—	$	32.3	$	31.5	$	—	$	—