GAAP TO NON-GAAP RECONCILIATION

(Dollars in thousands, except per share data)

(Unaudited)

Second Quarter of

First Two 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:

$ 354,571

55.2%

$ 302,401

52.5%

$ 681,463

54.7%

$ 589,315

52.0%

Restructuring

( A )

170

0.0%

766

0.1%

217

0.0%

821

0.1%

Amortization of purchased intangible assets

( B )

20,018

3.1%

19,855

3.4%

40,906

3.3%

39,536

3.5%

Stock-based compensation

( C )

763

0.2%

607

0.1%

1,510

0.1%

1,207

0.1%

Amortization of acquisition-related inventory step-up

( D )

25

0.0%

524

0.1%

76

0.0%

1,127

0.1%

Non-GAAP gross margin: 

$ 375,547

58.5%

$ 324,153

56.2%

$ 724,172

58.1%

$ 632,006

55.8%

OPERATING EXPENSES:

GAAP operating expenses:

$ 257,437

40.1%

$ 237,496

41.2%

$ 508,618

40.8%

$ 467,953

41.3%

Restructuring

( A )

(789)

-0.1%

(2,966)

-0.5%

(1,126)

-0.1%

(4,571)

-0.4%

Amortization of purchased intangible assets

( B )

(17,856)

-2.8%

(19,908)

-3.5%

(37,537)

-3.0%

(39,559)

-3.5%

Stock-based compensation

( C )

(10,212)

-1.6%

(7,828)

-1.4%

(19,577)

-1.6%

(16,046)

-1.4%

Acquisition / divestiture items

( E )

(1,964)

-0.3%

(2,976)

-0.4%

(3,360)

-0.3%

(6,394)

-0.6%

Non-GAAP operating expenses:

$ 226,616

35.3%

$ 203,818

35.4%

$ 447,018

35.8%

$ 401,383

35.4%

OPERATING INCOME:

GAAP operating income:

$   97,134

15.1%

$   64,905

11.3%

$ 172,845

13.9%

$ 121,362

10.7%

Restructuring

( A )

959

0.1%

3,732

0.6%

1,343

0.1%

5,392

0.5%

Amortization of purchased intangible assets

( B )

37,874

6.0%

39,763

6.9%

78,443

6.3%

79,095

7.0%

Stock-based compensation

( C )

10,975

1.7%

8,435

1.5%

21,087

1.6%

17,253

1.5%

Amortization of acquisition-related inventory step-up

( D )

25

0.0%

524

0.1%

76

0.0%

1,127

0.1%

Acquisition / divestiture items

( E )

1,964

0.3%

2,976

0.5%

3,360

0.3%

6,394

0.6%

Non-GAAP operating income: 

$ 148,931

23.2%

$ 120,335

20.9%

$ 277,154

22.2%

$ 230,623

20.4%

NON-OPERATING INCOME, NET:

GAAP non-operating income, net:

$     1,634

$     3,786

$   14,398

$     1,698

Acquisition / divestiture items

( E )

2,612

(459)

4,305

(860)

Gain on an equity sale

( F )

-

-

(15,091)

-

Non-GAAP non-operating income, net: 

$     4,246

$     3,327

$     3,612

$       838

GAAP and 

GAAP and 

GAAP and 

GAAP and 

Non-GAAP

Non-GAAP

Non-GAAP

Non-GAAP

Tax Rate %

( I )

Tax Rate %

( I )

Tax Rate %

( I )

Tax Rate %

( I )

INCOME TAX PROVISION:

GAAP income tax provision:

$   20,741

21%

$   13,738

20%

$   41,091

22%

$   19,175

16%

Non-GAAP items tax effected

( G )

11,426

10,994

22,430

16,337

Tax on gain on an equity sale

( H )

-

-

(5,836)

-

Non-GAAP income tax provision: 

$   32,167

21%

$   24,732

20%

$   57,685

21%

$   35,512

16%

NET INCOME:  

GAAP net income attributable to Trimble Navigation Ltd.

$   77,834

$   54,581

$ 146,458

$ 104,389

Restructuring

( A )

959

3,732

1,343

5,392

Amortization of purchased intangible assets

( B )

37,874

39,763

78,443

79,095

Stock-based compensation

( C )

10,975

8,435

21,087

17,253

Amortization of acquisition-related inventory step-up

( D )

25

524

76

1,127

Acquisition / divestiture items

( E )

4,576

2,517

7,665

5,534

Gain on an equity sale

( F )

-

-

(15,091)

-

Non-GAAP tax adjustments

( G ), ( H )

(11,426)

(10,994)

(16,594)

(16,337)

Non-GAAP net income attributable to Trimble Navigation Ltd.

$ 120,817

$   98,558

$ 223,387

$ 196,453

DILUTED NET INCOME PER SHARE:

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

$      0.29

$      0.21

$      0.55

$      0.40

Restructuring

( A )

-

0.01

0.01

0.02

Amortization of purchased intangible assets

( B )

0.14

0.15

0.30

0.30

Stock-based compensation

( C )

0.04

0.04

0.08

0.07

Amortization of acquisition-related inventory step-up

( D )

-

-

-

-

Acquisition / divestiture items

( E )

0.02

0.01

0.03

0.02

Gain on an equity sale

( F )

-

-

(0.06)

-

Non-GAAP tax adjustments

( G ), ( H )

(0.04)

(0.04)

(0.07)

(0.06)

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

$      0.45

$      0.38

$      0.84

$      0.75

OPERATING LEVERAGE:

Increase in non-GAAP operating income

$   28,596

$   15,098

$   46,531

$   23,652

Increase in revenue

$   65,906

$   58,733

$ 114,516

$ 112,577

Operating leverage (increase in non-GAAP operating 

income as a % of increase in revenue)

43.4%

25.7%

40.6%

21.0%