GAAP TO NON-GAAP RECONCILIATION

(Dollars in thousands, except per share data)

(Unaudited)

Third Quarter of

First Three Quarters of

2014

2013

2014

2013

Dollar

% of

Dollar

% of

Dollar

% of

Dollar

% of

Amount

Revenue

Amount

Revenue

Amount

Revenue

Amount

Revenue

GROSS MARGIN:

GAAP gross margin:

$ 316,773

54.2%

$ 295,053

53.0%

$   998,236

54.5%

$ 884,368

52.4%

Restructuring

( A )

108

0.0%

8

0.0%

325

0.0%

829

0.0%

Amortization of purchased intangible assets

( B )

20,057

3.4%

20,402

3.7%

60,963

3.3%

59,938

3.6%

Stock-based compensation

( C )

776

0.1%

609

0.1%

2,286

0.1%

1,816

0.1%

Amortization of acquisition-related inventory step-up

( D )

586

0.1%

378

0.1%

662

0.1%

1,505

0.1%

Non-GAAP gross margin: 

$ 338,300

57.8%

$ 316,450

56.9%

$1,062,472

58.0%

$ 948,456

56.2%

OPERATING EXPENSES:

GAAP operating expenses:

$ 305,684

52.3%

$ 232,024

41.7%

$   814,302

44.5%

$ 699,977

41.4%

Restructuring

( A )

(219)

0.0%

(31)

0.0%

(1,345)

-0.1%

(4,602)

-0.3%

Amortization of purchased intangible assets

( B )

(19,269)

-3.3%

(21,216)

-3.9%

(56,806)

-3.1%

(60,775)

-3.6%

Stock-based compensation

( C )

(10,262)

-1.8%

(8,296)

-1.5%

(29,839)

-1.6%

(24,342)

-1.4%

Acquisition / divestiture items

( E )

(4,056)

-0.7%

(2,891)

-0.5%

(7,416)

-0.4%

(9,285)

-0.5%

Litigation

( G )

(52,011)

-8.9%

(1,335)

-0.2%

(52,011)

-2.9%

(1,335)

-0.1%

Non-GAAP operating expenses:

$ 219,867

37.6%

$ 198,255

35.6%

$   666,885

36.4%

$ 599,638

35.5%

OPERATING INCOME:

GAAP operating income:

$   11,089

1.9%

$   63,029

11.3%

$   183,934

10.0%

$ 184,391

10.9%

Restructuring

( A )

327

0.1%

39

0.0%

1,670

0.1%

5,431

0.3%

Amortization of purchased intangible assets

( B )

39,326

6.7%

41,618

7.5%

117,769

6.4%

120,713

7.2%

Stock-based compensation

( C )

11,038

1.9%

8,905

1.6%

32,125

1.8%

26,158

1.5%

Amortization of acquisition-related inventory step-up

( D )

586

0.1%

378

0.1%

662

0.0%

1,505

0.1%

Acquisition / divestiture items

( E )

4,056

0.7%

2,891

0.5%

7,416

0.4%

9,285

0.6%

Litigation

( G )

52,011

8.9%

1,335

0.2%

52,011

2.9%

1,335

0.1%

Non-GAAP operating income: 

$ 118,433

20.3%

$ 118,195

21.2%

$   395,587

21.6%

$ 348,818

20.7%

NON-OPERATING INCOME (LOSS), NET:

GAAP non-operating income (loss), net:

$    (3,934)

$       483

$     10,464

$     2,181

Acquisition / divestiture items

( E )

1,699

14

6,004

(846)

Gain on an equity sale

( F )

-

-

(15,091)

-

Non-GAAP non-operating income, net: 

$    (2,235)

$       497

$       1,377

$     1,335

GAAP and 

GAAP and 

GAAP and 

GAAP and 

Non-GAAP

Non-GAAP

Non-GAAP

Non-GAAP

Tax Rate %

( K )

Tax Rate %

( K )

Tax Rate %

( K )

Tax Rate %

( K )

INCOME TAX PROVISION (BENEFIT):

GAAP income tax provision (benefit):

$    (4,720)

-66%

$     8,892

14%

$     36,371

19%

$   28,067

15%

Non-GAAP items tax effected

( H )

13,930

7,725

36,360

24,062

Tax on gain on an equity sale

( I )

-

-

(5,836)

-

Tax on RDS litigation

( J )

19,840

-

19,840

-

Non-GAAP income tax provision: 

$   29,049

25%

$   16,617

14%

$     86,735

22%

$   52,129

15%

NET INCOME:  

GAAP net income attributable to Trimble Navigation Ltd.

$   11,832

$   54,469

$   158,290

$ 158,858

Restructuring

( A )

327

39

1,670

5,431

Amortization of purchased intangible assets

( B )

39,326

41,618

117,769

120,713

Stock-based compensation

( C )

11,038

8,905

32,125

26,158

Amortization of acquisition-related inventory step-up

( D )

586

378

662

1,505

Acquisition / divestiture items

( E )

5,755

2,905

13,420

8,439

Gain on an equity sale

( F )

-

-

(15,091)

-

Litigation

( G )

52,011

1,335

52,011

1,335

Non-GAAP tax adjustments

(H ), (I), (J)

(33,770)

(7,725)

(50,364)

(24,062)

Non-GAAP net income attributable to Trimble Navigation Ltd.

$   87,105

$ 101,924

$   310,492

$ 298,377

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share attributable to Trimble Navigation Ltd.

$      0.04

$      0.21

$        0.60

$      0.61

Restructuring

( A )

-

-

0.01

0.02

Amortization of purchased intangible assets

( B )

0.15

0.16

0.44

0.45

Stock-based compensation

( C )

0.04

0.03

0.12

0.10

Amortization of acquisition-related inventory step-up

( D )

-

-

-

0.01

Acquisition / divestiture items

( E )

0.02

0.01

0.05

0.03

Gain on an equity sale

( F )

-

-

(0.06)

-

Litigation

( G )

0.20

0.01

0.20

0.01

Non-GAAP tax adjustments

(H ), (I), (J)

(0.12)

(0.03)

(0.19)

(0.09)

Non-GAAP diluted net income per share attributable to Trimble Navigation Ltd.

$      0.33

$      0.39

$        1.17

$      1.14

OPERATING LEVERAGE:

Increase in non-GAAP operating income

$       238

$   12,889

$     46,769

$   36,541

Increase in revenue

$  28,294

$   51,739

$   142,810

$ 164,316

Operating leverage (increase in non-GAAP operating 

income as a % of increase in revenue)

0.8%

24.9%

32.7%

22.2%