CONNECTING THE PHYSICAL AND DIGITAL WORLDS T R O P E R L A U N N A 7 1 0 2 To Our Shareholders Trimble plays a central role in the digitization of mature industries by enabling transformative improvements in performance. We are positioned to benefit as digitization continues to accelerate as a result of increased bandwidth availability, cloud ubiquity, and sensor proliferation. We expect to deliver superior long- term growth and returns through a focus on those markets where we can have a disproportionate impact by providing unique value through aggressive innovation. 2017 marked a record year for Trimble. We exited the year In the “vertical” construction market, Trimble continues to having delivered seven consecutive quarters of accelerating be at the forefront of building information modeling (BIM) organic revenue growth, with growth in every segment and solutions and improved project management capabilities, region, and improved operating margins. It was also a year which are enabling the disintermediation and revamp of of significant strategic development, with major product traditional work processes. These technology enabled trends announcements, eight announced acquisitions, and significant are allowing the construction site to increasingly take on the go-to-market initiatives. We enter 2018 with the most positive characteristics of a factory floor and achieve new levels of cost platform for growth we have had in over 10 years. reduction and productivity improvement. Trimble’s revenue increased 12 percent for the year, with In agriculture, precise positioning has enabled transformative significantly higher growth in the second half of the year. innovation, just as in construction. Machine guidance was Each of our reporting segments grew in the year, with the earliest application, and has enabled lower input costs, particular strength in the Buildings and Infrastructure, higher machine and labor utilization, and improved yields. Transportation, and Resources and Utilities segments. This foundation enables the next waves of innovation, Every segment also demonstrated growth in every major geographical region, further underscoring the breadth which lead to two paths—one in the direction of machine autonomy and the other towards variable rate applications. and depth of the growth achieved during 2017. Trimble is positioned to play a future leading role in both—each of which requires sophisticated solutions that incorporate data Non-GAAP operating margins grew from 17.2 percent in 2016 to collection, analytics, decision-making software intelligence 18.1 percent in 2017, demonstrating strong operating leverage and hardware performance. During 2017 we acquired Müller in spite of costs associated with requirements such as the implementation of ACS606 as well as the impact of recent Elektronik, which will be a central element in our variable rate application strategy. We believe variable rate is the next acquisitions. Trimble also continues to see significant growth in evolutionary step in using the combination of position and its software, services, and recurring revenue streams providing agricultural data to provide tangible benefits in the field. a foundation for increased predictability and additional margin expansion. Margins are expected to show continued Transportation has two points of focus. One centers on progression during 2018. managing a mobile asset, which is the truck, and the other is the enterprise, which incorporates the business In construction, Trimble participates in both the “horizontal,” processes of the trucking company. Trimble is unique in the infrastructure-centric construction market as well as the transportation industry by offering solutions in both areas. “vertical” construction market, which is more focused on Since the acquisitions of PeopleNet and TMW, a key focus has buildings and structures. In 2017 Trimble released the latest been to align the solution sets with the objective to provide generation of machine control automation, which represents transportation companies with the choice of complete another step towards complete machine autonomy. workflow functionality. 2 0 1 7 H I G H L I G H T S +12% Revenue +16% Subscription Revenue +26% Non-GAAP Net Income Our strategic focus in transportation is to continue to build Trimble also has a history of philanthropy through out the functionality of the comprehensive solution, expand environmental and social stewardship, in addition to internationally, play a first mover role in the implementation policies and initiatives that ensure ethical behavior, of both blockchain and the cloud, and to solve the remaining supply chain compliance, safe working conditions, and break-out operational challenges in the industry. One of the inclusive work environments for our employees. In 2017 we remaining core break-out challenges in transportation is that codified these activities with the launch of our Responsible of relatively low-capacity utilization. We are addressing that Corporate Citizenship (RCC) program. Trimble’s RCC program by providing improved transparency into shipments with the is crucial to ensuring we remain true to our mission while intention of better aligning demand and capacity. fulfilling our commitments as a company, an employer, In our Geospatial business, we create digital models of the physical earth that integrate end-users into downstream and a contributor to society, and is illustrated in more detail in the following pages of this report. workflow applications such as construction, cadastral Entering 2018, our fundamental goals remain unchanged: surveying, high-definition maps for autonomous vehicle programs, oil and gas exploration and development, and geographic information systems. In 2017 we continued to innovate and introduce new products that drive growth in this business segment, including a new series of mechanical total stations and new inertial technologies for autonomy and mobile mapping. Trimble maintains a strong financial position. We continue to draw from strong operating cash flow to support and grow our businesses organically, while selectively drawing on our balance sheet to strategically expand our capabilities and solution offerings through acquisition. Operating cash flow in the year was approximately $412 million. We repurchased shares worth approximately $285 million and invested $293 million in strategic acquisitions. u Breakout market leadership—achieved by leading transformations in our markets. u Top-tier financial performance—focused on revenue growth, incremental margin performance, and return on equity. u A new standard of excellence that transcends best current practices—focused on following a unique path emphasizing “always better.” Our employees have unique talents and deliver the domain knowledge and the innovation that has been the foundation for our success. Once again, I thank them for their contributions. In the area of Responsible Corporate Citizenship, our views are rooted in the impact our solutions deliver to our customers and markets. Trimble has a rich history of developing and commercializing industry-specific solutions that enable Steven W. Berglund customers to increase productivity, enhance safety, President and Chief Executive Officer maintain compliance, and reduce environmental impact. Responsible Corporate Citizenship In 2017, Trimble launched a Responsible Corporate Citizenship (RCC) program. AGRICULTURE Trimble’s precision agriculture portfolio has revolutionized traditional farming practices by enabling farmers to increase efficiencies, enhance productivity, and improve crop performance, all while reducing costs This program is crucial to and optimizing inputs. ensuring that we remain true to our mission, Transforming the Way the World Works, while fulfilling our commitments as a company, an employer, a steward of capital, and a contributor to society. Trimble Products Driving Sustainable Impact Trimble’s industry-specific solutions are put to work every day, enabling customers to achieve economic breakthroughs around the globe. Our robust portfolio of solutions u Up to 20% reduced water use u Up to 30% increased yield u Lower environmental impact u Reduced carbon emissions CONSTRUCTION Trimble continues to transform the construction of buildings and infrastructure across the entire planning, design, build, and operate lifecycle through the deployment of 3D software, precision machine control, site positioning, mobile technologies, and real-time connectivity. u Increased productivity & efficiency u Up to 50% less rework u Up to 30% machine productivity & u Increased waste reduction fuel savings GEOSPATIAL contribute toward enhancing safety, Trimble geospatial technologies are transforming the work of professionals boosting compliance, and reducing environmental impact. Trimble solutions help society to confront important challenges, ranging from feeding the growing global population and moving the goods of commerce, to development of next-generation buildings and infrastructure. Ultimately, by embracing RCC as part of our corporate fabric, Trimble is better equipped to deploy innovations and technology that serve a rapidly changing world. engaged in surveying, mapping, GIS, 3D modeling, land administration, and the environment. u 25-50% efficiency gains over u Land & water management traditional solutions u Optimizing the buildout of u Enabling property rights, the basis of cadastral systems economic development TRANSPORTATION In a world of fluctuating fuel costs and just-in-time delivery, Trimble transportation and logistics solutions enable fleet operators to drive cleaner, greener, safer, and more profitable operations. u Up to 20% fuel efficiency u Reduced carbon emissions u Increased fleet utilization up to 30% u Driver safety Ethics in Practice At Trimble, we value a culture of high ethical standards and business integrity. As a global company, we expect every employee, regardless of location, to understand and practice Trimble’s Business Ethics and Conduct Policy. We establish relationships with third-party partners who share our commitment to conducting business fairly, legally, ethically, and transparently. Trimble implements and monitors policies that ensure all operations—including chain suppliers, vendors, and contract manufacturers—fully comply with local and national laws wherever we conduct business. You can learn more about our compliance policies at: www.trimble.com. Disaster Relief in Nepal Minimizing our Environmental Impact Making a Positive Impact An important aspect of our RCC commitment involves Trimble is committed to providing every employee with the environmental stewardship. We are continually exploring opportunity to learn, grow, and excel in a respectful, diverse, ways to minimize Trimble’s environmental impact by and collaborative workplace. With over 9,500 employees in increasing energy efficiency, reducing waste, and complying more than 35 countries, our people are a powerful catalyst for with environmental policies and regulations around the world. making a positive impact in the lives of colleagues, customers, At our corporate headquarters, we use software to measure families, and communities. Diversity of gender, race, and our carbon footprint and we are expanding this program nationality is highly valued. Trimble also offers a number of across Trimble’s operations. In Westminster, CO we built programs developed to support an inclusive, rewarding, and a 125,000 square foot office that is LEED Certified Gold. purposeful work experience through outreach and action, such As a member of the Electronic Industry Citizenship as the Trimble Women’s Network, a company-wide program Coalition (EICC), we understand how our operations dedicated to connecting, supporting, and mentoring women in affect the environment, and continue to expand the use the workplace to increase their impact at Trimble. of sustainable materials in our products, in addition to providing recycling programs for our products. More information about our environmental compliance programs can be found at: www.trimble.com. When major natural disasters such as earthquakes, tsunamis, wildfires, and floods occur, Trimble has a long history of donating money, time, and equipment to assist communities in the recovery effort. Trimble has contributed to providing technologies and data used to combat public health emergencies, improve quality of life, and create more responsive systems. Here are just a few of the countries where Trimble’s people and technologies have been deployed: • • • • • • China (Earthquake Recovery) Indonesia (Earthquake Recovery) Nepal (Earthquake Reconstruction) Pakistan (Water Scarcity) Peru (Clean Water Access) Portugal (Fire Prevention) Trimble Women’s Network Investing in the Future: The Trimble Foundation The Trimble Foundation has been established to support Trimble’s RCC and philanthropic efforts, including corporate donations and volunteer activities on a global scale. The Trimble Foundation is instrumental in determining time and resource allocation to support causes important to customers and employees. Initially, Trimble is concentrating its focus in two main areas—disaster relief and female education and empowerment. To learn more about Trimble’s RCC efforts, visit: investor.trimble.com. Financial Information Revenue (in U.S. $ Millions) Non-GAAP Operating Income (in U.S. $ Millions) Cash Flow from Operations (in U.S. $ Millions) 6 9 3 , 2 $ 8 8 2 , 2 $ 0 9 2 , 2 $ 2 6 3 , 2 $ 4 5 6 2 $ , 4 7 4 $ 0 8 4 $ 0 8 4 $ 5 1 4 $ 7 0 4 $ 4 1 4 $ 2 1 4 $ 7 5 3 $ 0 9 3 $ 6 0 4 $ 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Diverse Business Mix Revenue by Segment Global Opportunity Revenue by Region Growing Software Mix Revenue by Offering 26% 31% 18% 25% 12% 14% 26% 48% ≈47% ≈53% Buildings & Infrastructure Geospatial United States Asia Hardware Resources & Utilities Transportation Europe Rest of World Software/Services/Recurring Comparison of Cumulative Five-Year Total Return* Among Trimble Inc., the NASDAQ Composite Index®, and the S&P® Information Technology Index. 300 250 200 150 100 50 2012 2013 2014 2015 2016 2017 Trimble NASDAQ Composite Index® S&P® Information Technology Index The graph compares the cumulative five-year total return provided shareholders on Trimble Inc. common stock relative to the cumulative total returns of the NASDAQ Composite Index and the S&P Information Technology Index. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each of the indexes on 12/31/2012, and its relative performance is tracked through 12/31/2017. The company has never paid dividends on its common stock and has no present plans to do so. *The company adopted a 52-53-week fiscal year effective upon the end of fiscal year 1997, and the actual date of the company’s 2017 fiscal year end was December 29, 2017. Any variations due to any differences between the actual date of a particular fiscal year end and the calendar year end for such year are not expected to be material. Management Information BOARD OF DIRECTORS EXECUTIVE MANAGEMENT Ulf J. Johansson, Ph.D Chairman Business Consultant Nickolas W. Vande Steeg Vice Chairman Chairman, I am Gifted Chairman, Los Angeles Pacific University Director, Gardner Denver Inc. Director, Wabtec Corporation Director, Pacific Design Technologies Director, Pure Safety Corporation Steven W. Berglund President and Chief Executive Officer Ronald S. Nersesian President and Chief Executive Officer, Keysight Technologies Merit E. Janow Dean, School of International and Public Affairs, and Professor of Practice Columbia University Mark S. Peek Managing Director & Co-Head, Workday Ventures Dr. Kaigham J. Gabriel President and Chief Executive Officer, Draper Meaghan Lloyd Partner, Gehry Partners, LLP Johan Wibergh Group Chief Technology Officer, Vodafone Steven W. Berglund President and Chief Executive Officer Robert G. Painter Senior Vice President Chief Financial Officer BUSINESS OPERATIONS Bryn A. Fosburgh Senior Vice President Christopher W. Gibson Senior Vice President Darryl R. Matthews Senior Vice President Sachin J. Sankpal Senior Vice President STAFF OPERATIONS Douglas R. Brent Senior Vice President Technology Innovation Prakash Iyer Senior Vice President Software Architecture and Strategy James A. Kirkland Senior Vice President General Counsel Leah K. Lambertson Senior Vice President Operations and Chief Information Officer Mike Bank Vice President Ron Bisio Vice President Roz D. Buick, PhD Vice President Thomas Fansler Vice President David Wangler Vice President Michael Lesyna Senior Vice President Strategy and Corporate Development E. Michael Scarpa Senior Vice President Chief Human Resources Officer Julie A. Shepard Vice President Finance and Chief Accounting Officer CORPORATE HEADQUARTERS TRIMBLE INVESTOR INFORMATION Trimble Inc. 935 Stewart Drive Sunnyvale, California 94085 +1 (408) 481-8000 www.trimble.com Traded: The NASDAQ Stock Exchange Symbol: TRMB LOCATIONS SHAREHOLDER INFORMATION Australia Austria Belgium Brazil Bulgaria Canada China Denmark Finland France Germany Ghana Hungary India Indonesia Ireland Italy Japan Korea Lithuania Malaysia Mexico Poland Qatar Russia Saudi Arabia Singapore South Africa Spain Sweden Switzerland Thailand Independent Auditor Ernst & Young LLP San Jose, California Transfer Agent & Registrar American Stock Transfer & Trust Company 6201 15th Avenue Brooklyn, New York 11219 +1 (800) 937-5449 www.amstock.com info@amstock.com Investor Relations Contact +1 (408) 481-7838 Netherlands United Arab Emirates investor_relations@trimble.com New Zealand United Kingdom Hong Kong Norway United States of America The company’s annual report on Form 10-K, as filed with the Securities Exchange Commission, accompanies this annual report to shareholders and is also available on the Investor Relations section of the Company’s website at: www.trimble.com. © 2018, Trimble Inc. All rights reserved. Trimble, the Globe and Triangle Logo, are trademarks of Trimble Inc. and/or its affiliates, registered in the United States Patent and Trademark Office and/or in other countries. All other trademarks are the property of their respective owners. T r i m b l e I n c . 2 0 1 7 A N N U A L R E P O R T t r i m b l e . c o m