GAAP TO NON-GAAP RECONCILIATION

(Dollars in thousands, except per share data)

(Unaudited)

First Quarter of

2014

2013

Dollar

% of

Dollar

% of

Amount

Revenue

Amount

Revenue

GROSS MARGIN:

GAAP gross margin:

$ 326,892

54.1%

$ 286,914

51.6%

Restructuring

( A )

47

0.0%

55

0.0%

Amortization of purchased intangible assets

( B )

20,888

3.5%

19,681

3.6%

Stock-based compensation

( C )

747

0.1%

600

0.1%

Amortization of acquisition-related inventory step-up

( D )

51

0.0%

603

0.1%

Non-GAAP gross margin: 

$ 348,625

57.7%

$ 307,853

55.4%

OPERATING EXPENSES:

GAAP operating expenses:

$ 251,181

41.5%

$ 230,457

41.4%

Restructuring

( A )

(337)

-0.1%

(1,605)

-0.3%

Amortization of purchased intangible assets

( B )

(19,681)

-3.3%

(19,651)

-3.5%

Stock-based compensation

( C )

(9,365)

-1.5%

(8,218)

-1.5%

Acquisition / divestiture items

( E )

(1,396)

-0.2%

(3,418)

-0.6%

Non-GAAP operating expenses:

$ 220,402

36.4%

$ 197,565

35.5%

OPERATING INCOME:

GAAP operating income:

$  75,711

12.5%

$  56,457

10.2%

Restructuring

( A )

384

0.1%

1,660

0.3%

Amortization of purchased intangible assets

( B )

40,569

6.7%

39,332

7.0%

Stock-based compensation

( C )

10,112

1.7%

8,818

1.6%

Amortization of acquisition-related inventory step-up

( D )

51

0.0%

603

0.1%

Acquisition / divestiture items

( E )

1,396

0.2%

3,418

0.6%

Non-GAAP operating income: 

$ 128,223

21.2%

$ 110,288

19.8%

NON-OPERATING INCOME (LOSS), NET:

GAAP non-operating income (loss), net:

$  12,764

$   (2,088)

Acquisition / divestiture items

( E )

1,693

(401)

Gain on an equity sale

( F )

(15,091)

-

Non-GAAP non-operating loss, net: 

$      (634)

$   (2,489)

GAAP and 

GAAP and 

Non-GAAP

Non-GAAP

Tax Rate %

( I )

Tax Rate %

( I )

INCOME TAX PROVISION:

GAAP income tax provision:

$  20,350

23%

$    5,437

10%

Non-GAAP items tax effected

( G )

11,004

5,343

Tax on gain on an equity sale

( H )

(5,836)

-

Non-GAAP income tax provision: 

$  25,518

20%

$  10,780

10%

NET INCOME:  

GAAP net income attributable to Trimble Navigation Ltd.

$  68,624

$  49,808

Restructuring

( A )

384

1,660

Amortization of purchased intangible assets

( B )

40,569

39,332

Stock-based compensation

( C )

10,112

8,818

Amortization of acquisition-related inventory step-up

( D )

51

603

Acquisition / divestiture items

( E )

3,089

3,017

Gain on an equity sale

( F )

(15,091)

-

Non-GAAP tax adjustments

( G ), ( H )

(5,168)

(5,343)

Non-GAAP net income attributable to Trimble Navigation Ltd.

$ 102,570

$  97,895

DILUTED NET INCOME PER SHARE:

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

$      0.26

$      0.19

Restructuring

( A )

-

0.01

Amortization of purchased intangible assets

( B )

0.16

0.15

Stock-based compensation

( C )

0.04

0.04

Amortization of acquisition-related inventory step-up

( D )

-

-

Acquisition / divestiture items

( E )

0.01

0.01

Gain on an equity sale

( F )

(0.06)

-

Non-GAAP tax adjustments

( G ), ( H )

(0.02)

(0.02)

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

$      0.39

$      0.38

OPERATING LEVERAGE:

Increase in non-GAAP operating income

$  17,935

$    8,554

Increase in revenue

$  48,610

$  53,844

Operating leverage (increase in non-GAAP operating  income as a % of increase in revenue)

36.9%

15.9%