Trimble Reports Fourth Quarter and Full Year 2017 Results

SUNNYVALE, Calif., Feb. 8, 2018 /PRNewswire/ -- Trimble Inc. (NASDAQ: TRMB) today announced financial results for the fourth quarter and fiscal year end 2017 results.

Fourth Quarter 2017 Financial Summary

Fourth quarter 2017 revenue of $708.4 million was up 21 percent as compared to the fourth quarter of 2016. Buildings and Infrastructure revenue was $209.6 million, up 18 percent. Geospatial revenue was $176.4 million, up 11 percent. Resources and Utilities revenue was $131.6 million, up 38 percent. Transportation revenue was $190.8 million, up 24 percent.

GAAP operating income was $62.8 million, up 14 percent as compared to the fourth quarter of 2016. GAAP operating margin was 8.9 percent of revenue as compared to 9.4 percent of revenue in the fourth quarter of 2016.

The U.S. Tax Cuts and Jobs Act was enacted on December 22, 2017 and resulted in a provisional tax expense impact of $85 million in the fourth quarter of 2017 primarily due to the one-time transition tax on accumulated foreign subsidiary earnings and deferred tax impacts.

GAAP net loss was $35.0 million, down 193 percent as compared to the fourth quarter of 2016. Diluted GAAP loss per share was $(0.14) as compared to diluted GAAP earnings per share of $0.15 in the fourth quarter of 2016.

Non-GAAP operating income of $126.3 million was up 18 percent as compared to the fourth quarter of 2016. Non-GAAP operating margin was 17.8 percent of revenue as compared to 18.3 percent of revenue in the fourth quarter of 2016.

Non-GAAP net income of $98.7 million was up 24 percent as compared to the fourth quarter of 2016. Diluted non-GAAP earnings per share were $0.39 as compared to diluted non-GAAP earnings per share of $0.31 in the fourth quarter of 2016.

The GAAP tax rate for the quarter was 162 percent as compared to 34 percent in the fourth quarter of 2016, and the non-GAAP tax rate was 23 percent as compared to 24 percent in the fourth quarter of 2016.

During the fourth quarter, Trimble repurchased approximately 4.3 million shares of its common stock for $177 million.

"The quarter's strong results capped a year of significant improvement in which every segment and every region grew," said Steven W. Berglund, Trimble's president and chief executive officer. "We enter 2018 with continuing momentum and anticipate further growth and improved operating margins."

Fiscal 2017 Financial Summary

Fiscal 2017 revenue of $2.7 billion was up 12 percent as compared to fiscal 2016. Buildings and Infrastructure revenue was $834.9 million, up 12 percent. Geospatial revenue was $661.2 million, up 4 percent. Resources and Utilities revenue was $476.9 million, up 21 percent. Transportation revenue was $681.2 million, up 16 percent.

GAAP operating income was $246.0 million, up 36 percent as compared to fiscal 2016. GAAP operating margin was 9.3 percent of revenue as compared to 7.7 percent of revenue in fiscal 2016.

GAAP net income was $121.1 million, down 9 percent as compared to fiscal 2016. Diluted GAAP earnings per share were $0.47 as compared to diluted GAAP earnings per share of $0.52 in fiscal 2016.

Non-GAAP operating income of $480.3 million was up 18 percent as compared to fiscal 2016. Non-GAAP operating margin was 18.1 percent of revenue as compared to 17.2 percent of revenue in fiscal 2016.

Non-GAAP net income of $379.6 million was up 26 percent as compared to fiscal 2016. Diluted non-GAAP earnings per share were $1.48 as compared to diluted non-GAAP earnings per share of $1.19 in fiscal 2016.

The GAAP tax rate for the year was 53 percent as compared to 25 percent in fiscal 2016, and the non-GAAP tax rate was 23 percent as compared to 24 percent in fiscal 2016.

Operating cash flow for fiscal 2017 was $411.9 million, flat as compared to fiscal 2016. Deferred revenue for fiscal 2017 was $313.4 million, up 10 percent as compared to fiscal 2016.

In November 2017, the Board of Directors approved a stock repurchase program authorizing Trimble to repurchase up to $600 million of Trimble's common stock. During fiscal 2017, Trimble repurchased approximately 7.4 million shares for $288 million. Approximately $442 million remains under the current share repurchase authorization as of the end of the fourth quarter.

Forward Looking Guidance

For the first quarter of 2018, Trimble expects revenue to be between $700 million and $730 million, representing year-over-year growth of 14 percent and 19 percent respectively, with GAAP earnings per share of $0.16 to $0.20 and non-GAAP earnings per share of $0.36 to $0.40. Non-GAAP guidance excludes the amortization of intangibles of $43 million related to previous acquisitions, anticipated acquisition costs of $3 million, the anticipated impact of stock-based compensation expense of $16 million, and $3 million in anticipated restructuring charges. GAAP guidance assumes a tax rate of 19 percent and non-GAAP guidance assumes a tax rate of 20 percent. Both GAAP and non-GAAP earnings per share assume approximately 254 million shares outstanding.

Guidance for the first quarter of 2018 reflects prior ASC 605 revenue recognition and is therefore consistent with previously reported results. Actual reported results for the first quarter of 2018 will reflect adoption of ASC 606 revenue recognition.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on February 8 at 2:00 p.m. PT to review its fourth quarter and full year 2017 results. An accompanying slide presentation will be made available on the "Investors" section of the Trimble website, www.trimble.com, under the subheading "Events & Presentations." The call will be broadcast live on the web at http://investor.trimble.com. Investors without Internet access may dial into the call at (800) 528-9198 (U.S.) or (702) 928-6633 (international). The passcode is 1779498. The replay will also be available on the web at the address above.

Use of Non-GAAP Financial Information

To help investors understand Trimble's past financial performance and future results, as well as its performance relative to competitors, Trimble supplements the financial results that the company provides in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. These non-GAAP measures can be used to evaluate Trimble's historical and prospective financial performance, as well as its performance relative to competitors. The company's management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate the business, and to make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Trimble believes that these non-GAAP financial measures reflect an additional way of viewing aspects of the company's operations that, when viewed with the GAAP results, provide a more complete understanding of factors and trends affecting the business. Further, Trimble believes some of company's investors track "core operating performance" as a means of evaluating performance in the ordinary, ongoing, and customary course of the company's operations. Core operating performance excludes items that are non-cash, not expected to recur or not reflective of ongoing financial results. Management also believes that looking at Trimble's core operating performance provides a supplemental way to provide consistency in period to period comparisons.

The specific non-GAAP measures, which Trimble uses along with a reconciliation to the nearest comparable GAAP measures and the explanation for why these non-GAAP measures provide useful information to investors regarding the financial condition and results of operations and why management chose to exclude selected items can be found at the end of this release. The method the company uses to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Trimble's non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with Trimble's consolidated financial statements prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures to the comparable GAAP results, which is attached to this earnings release. Additional financial information about Trimble's use of non-GAAP results can be found on the Investor Relations page of the Trimble website at: http://investor.trimble.com.

About Trimble

Trimble is transforming the way the world works by delivering products and services that connect the physical and digital worlds. Core technologies in positioning, modeling, connectivity and data analytics enable customers to improve productivity, quality, safety and sustainability. From purpose built products to enterprise lifecycle solutions, Trimble software, hardware and services are transforming a broad range of industries such as agriculture, construction, geospatial and transportation and logistics. For more information about Trimble (NASDAQ:TRMB), visit: www.trimble.com.

Safe Harbor

Certain statements made in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations for future financial market and economic conditions, whether the positive trend in financial results will continue in 2018, the impact of acquisitions, the ability to deliver revenue, earnings per share and other financial projections that Trimble has guided for the first quarter of 2018, including the expected tax rate, anticipated impact of stock-based compensation expense, amortization of intangibles related to previous acquisitions, anticipated acquisition costs, restructuring charges, and the anticipated number of diluted shares outstanding, as well as the full year for 2018 and for 2019. These forward-looking statements are subject to change, and actual results may materially differ from those set forth in this press release due to certain risks and uncertainties. For example, Trimble's expected tax rate is based on current tax law, including current interpretations of the Tax Cuts and Jobs Act of 2017 ("TCJA"), and current expected income and may be affected by evolving interpretations of TCJA; the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets. The company's results may be adversely affected if the company is unable to market, manufacture and ship new products, obtain new customers, or integrate new acquisitions. The company's results would also be negatively impacted by adverse geopolitical developments, weakening in the macro environment, foreign exchange fluctuations, critical part supply chain shortages, or the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the company's revenues, cash flow from operations, and other financial results. The company's financial results will also depend on a number of other factors and risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10- K. Undue reliance should not be placed on any forward-looking statement contained herein, especially in light of greater uncertainty than normal in the economy in general. These statements reflect the company's position as of the date of this release. The company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the company's expectations or any change of events, conditions, or circumstances on which any such statement is based.

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                                                                               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

                                                                                      (In millions, except per share data)

                                                                                                  (Unaudited)


                                                             Fourth Quarter of                            Fiscal Years
                                                             -----------------                            ------------


                                                                               2017                                       2016          2017        2016
                                                                               ----                                       ----          ----        ----


    Revenue:

                            Product                                          $466.7                                     $376.5      $1,763.8    $1,562.0

                            Service                                           129.8                                      113.3         461.6       430.2

                            Subscription                                      111.9                                       95.7         428.8       370.0

    Total revenue                                                           708.4                                      585.5       2,654.2     2,362.2
                                                                            -----                                      -----       -------     -------


    Cost of sales:

                            Product                                           229.5                                      184.8         866.5       760.8

                            Service                                            55.1                                       43.6         196.3       169.9

                            Subscription                                       30.5                                       25.6         113.0       104.9

                             Amortization of purchased
                             intangible assets                                 23.3                                       18.7          85.8        88.6

    Total cost of sales                                                     338.4                                      272.7       1,261.6     1,124.2
                                                                            -----                                      -----       -------     -------


    Gross margin                                                            370.0                                      312.8       1,392.6     1,238.0
                                                                            -----                                      -----       -------     -------

    Gross margin (%)                                                       52.2 %                                    53.4 %       52.5 %     52.4 %


    Operating expense:

                             Research and
                             development                                       98.1                                       83.0         370.2       349.6

                             Sales and
                             marketing                                        108.4                                       94.9         404.2       377.6

                             General and
                             administrative                                    83.9                                       62.9         302.3       256.0

                             Restructuring
                             charges                                            0.4                                        1.8           6.9        11.6

                             Amortization of
                             purchased
                             intangible
                             assets                                            16.4                                       14.9          63.0        62.2

                            Total operating expense                           307.2                                      257.5       1,146.6     1,057.0
                                                                              -----                                      -----       -------     -------



    Operating income                                                         62.8                                       55.3         246.0       181.0


    Non-operating income (expense), net:

                             Interest
                             expense, net                                     (6.6)                                     (6.1)       (25.0)     (25.9)

                             Foreign currency
                             transaction
                             gain (loss),
                             net                                                0.3                                      (0.3)          3.3       (1.9)

                             Income from
                             equity method
                             investments,
                             net                                                6.7                                        3.7          29.5        17.6

                             Other income
                             (loss), net                                      (6.9)                                       4.2           5.3         5.9

                             Total non-operating income
                             (expense), net                                   (6.5)                                       1.5          13.1       (4.3)
                                                                               ----                                        ---          ----        ----


    Income before taxes                                                      56.3                                       56.8         259.1       176.7


    Income tax provision                                                     91.2                                       19.1         137.9        44.5

    Net income (loss)                                                      (34.9)                                      37.7         121.2       132.2

                            Less: Net gain
                             (loss)
                             attributable to
                             noncontrolling
                             interests                                          0.1                                          -          0.1       (0.2)

    Net income (loss) attributable to
     Trimble Inc.                                                         $(35.0)                                     $37.7        $121.1      $132.4
                                                                           ======                                      =====        ======      ======


    Net income (loss) per share attributable to Trimble Inc.

                            Basic                                           $(0.14)                                     $0.15         $0.48       $0.53
                            -----

                            Diluted                                         $(0.14)                                     $0.15         $0.47       $0.52
                            -------


    Shares used in calculating net income (loss) per share:

                            Basic                                             250.9                                      250.7         252.1       250.5
                            -----

                            Diluted                                           250.9                                      254.4         256.7       253.9
                            -------

                                                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                              (In millions)

                                                               (Unaudited)



                                                                     Fiscal Year End             Fiscal Year End

    As of                                                                                2017                       2016
    -----                                                                                ----                       ----

    Assets


    Current assets:

                        Cash and cash
                        equivalents                                                       $358.5                     $216.1

                        Short term
                        investments                                                        178.9                      111.1

                        Accounts
                        receivable, net                                                    414.8                      354.8

                        Other
                        receivables                                                         42.8                       35.4

                       Inventories                                                         271.8                      218.8

                        Other current
                        assets                                                              50.3                       42.5


                       Total current assets                                              1,317.1                      978.7


    Property and equipment, net                                                         174.0                      144.2

    Goodwill                                                                          2,287.1                    2,077.6

    Other purchased intangible assets, net                                              364.8                      333.3

    Other non-current assets                                                            155.2                      140.0
                                                                                        -----                      -----


                       Total assets                                                     $4,298.2                   $3,673.8
                                                                                        ========                   ========


    Liabilities and Stockholders' Equity


    Current liabilities:

                       Short-term debt                                                    $128.4                     $130.3

                       Accounts payable                                                    146.1                      109.8

                        Accrued
                        compensation
                        and benefits                                                       143.0                       97.5

                       Deferred revenue                                                    272.4                      246.5

                        Accrued warranty
                        expense                                                             18.3                       17.2

                        Other current
                        liabilities                                                        101.0                       86.9


                       Total current liabilities                                           809.2                      688.2


    Long-term debt                                                                      785.5                      489.6

    Non-current deferred revenue                                                         41.0                       37.7

    Deferred income tax liabilities                                                      40.4                       38.8

    Income taxes payable                                                                 94.1                          -

    Other non-current liabilities                                                       162.0                      113.8

                       Total liabilities                                                 1,932.2                    1,368.1
                                                                                         -------                    -------



    Stockholders' equity:

                       Common stock                                                          0.2                        0.3

                        Additional paid-
                        in capital                                                       1,461.1                    1,348.3

                        Retained
                        earnings                                                         1,035.9                    1,177.1

                        Accumulated
                        other
                        comprehensive
                        loss                                                             (131.2)                   (219.9)


    Total Trimble Inc. stockholders' equity                                           2,366.0                    2,305.8

    Noncontrolling interests                                                                -                     (0.1)

                       Total stockholders' equity                                        2,366.0                    2,305.7
                                                                                         -------                    -------


                        Total liabilities and
                        stockholders' equity                                            $4,298.2                   $3,673.8
                                                                                        ========                   ========

                                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                              (In millions)

                                                               (Unaudited)

                                                                                                                           Fiscal Years
                                                                                                                           ------------

                                                                                                                           2017                     2016
                                                                                                                           ----                     ----


    Cash flow from operating activities:

                                                 Net Income                                                            $121.2                   $132.2


                                                  Adjustments to
                                                  reconcile net
                                                  income to net cash
                                                  provided by

                                                  operating
                                                  activities:

                                                                         Depreciation expense                              34.6                     37.0

                                                                         Amortization expense                             148.8                    150.8

                                                                         Provision for doubtful accounts                    1.2                      3.0

                                                                         Deferred income taxes                              1.4                      0.4

                                                                         Stock-based compensation                          64.8                     52.6

                                                                          Income from equity method
                                                                          investments                                    (29.5)                  (17.6)

                                                                         Divestitures gain, net                           (6.4)                   (3.5)

                                                                          Provision for excess and obsolete
                                                                          inventories                                       5.5                     15.8

                                                                         Other non-cash items                               5.2                      3.3


                                                  Decrease (increase)
                                                  in assets:

                                                                         Accounts receivable                             (41.6)                     1.2

                                                                         Other receivables                                  3.6                      1.4

                                                                         Inventories                                     (38.7)                    24.0

                                                                          Other current and non-current
                                                                          assets                                         (19.1)                   (1.2)


                                                  Increase (decrease)
                                                  in liabilities:

                                                                         Accounts payable                                  25.9                     10.9

                                                                         Accrued compensation and benefits                 33.7                      0.6

                                                                         Deferred revenue                                  16.4                     26.1

                                                                         Accrued warranty expense                           0.6                    (1.1)

                                                                         Income taxes payable                              88.2                   (16.1)

                                                                         Accrued liabilities                              (3.9)                   (6.2)
                                                                                                                           ----

    Net cash provided by operating activities                                                                         411.9                    413.6
                                                                                                                      -----                    -----


    Cash flow from investing activities:

                                                  Acquisitions of
                                                  businesses, net of
                                                  cash acquired                                             (293.1)                   (38.8)

                                                  Acquisitions of
                                                  property and
                                                  equipment                                                  (43.7)                  (26.0)

                                                  Purchases of equity
                                                  method investments                                                        -                   (1.5)

                                                  Purchases of short-
                                                  term investments                                          (288.0)                  (113.3)

                                                  Proceeds from
                                                  maturities of
                                                  short-term
                                                  investments                                                 122.1                      2.4

                                                  Net proceeds from
                                                  sales of businesses                                          20.1                     14.4

                                                  Proceeds from sales
                                                  of short-term
                                                  investments                                                  97.7                        -

                                                  Dividends received
                                                  from equity method
                                                  investments                                                  18.1                     17.6

                                                 Other                                                          0.8                      0.8

    Net cash used in investing activities                                                                           (366.0)                 (144.4)
                                                                                                                     ------                   ------


    Cash flow from financing activities:

                                                  Issuance of common
                                                  stock, net of tax
                                                  withholdings                                                 73.8                     67.5

                                                  Repurchases of
                                                  common stock                                              (285.3)                  (119.5)

                                                  Proceeds from debt
                                                  and revolving
                                                  credit lines                                                786.0                    355.0

                                                  Payments on debt and
                                                  revolving credit
                                                  lines                                                     (495.4)                  (465.3)


    Net cash provided by (used in) financing activities                                                                79.1                  (162.3)
                                                                                                                       ----                   ------


    Effect of exchange rate changes on cash and cash
     equivalents                                                                                                       17.4                    (6.8)
                                                                                                                       ----                     ----


    Net increase in cash and cash equivalents                                                                         142.4                    100.1

    Cash and cash equivalents - beginning of period                                                                   216.1                    116.0
                                                                                                                      -----                    -----


    Cash and cash equivalents - end of period                   $358.5                                        $216.1
                                                                ======                                        ======

                                                                                      REPORTING SEGMENTS

                                                                                     (Dollars in millions)

                                                                                          (Unaudited)



                                                                  Reporting Segments
                                                                  ------------------

                                                               Buildings                                                      Resources

                                                                  and                                                            and

                                                             Infrastructure                                Geospatial         Utilities                 Transportation
                                                             --------------                                ----------         ---------                 --------------


    FOURTH QUARTER OF FISCAL 2017 :

                              Revenue                                         $209.6                            $176.4                    $131.6                   $190.8


                               Operating
                               income before
                               corporate
                               allocations             $44.6                           $36.1                            $32.8                     $38.4

                                               21.3 %                         20.5 %                           24.9 %                   20.1 %

                                Operating
                                  margin (% of
                                  segment
                                  external net
                                  revenue)


    FOURTH QUARTER OF FISCAL 2016 :

                              Revenue                                         $177.7                            $158.7                     $95.4                   $153.7


                               Operating
                               income before
                               corporate
                               allocations             $31.7                           $30.9                            $28.4                     $32.2

                                               17.8 %                         19.5 %                           29.8 %                   20.9 %

                                Operating
                                  margin (% of
                                  segment
                                  external net
                                  revenue)


    FISCAL YEAR 2017 :

                              Revenue                                         $834.9                            $661.2                    $476.9                   $681.2


                               Operating
                               income before
                               corporate
                               allocations            $179.9                          $130.9                           $136.3                    $120.6

                                               21.5 %                         19.8 %                           28.6 %                   17.7 %

                                Operating
                                  margin (% of
                                  segment
                                  external net
                                  revenue)


    FISCAL YEAR 2016 :

                              Revenue                                         $743.5                            $634.7                    $395.7                   $588.3


                               Operating
                               income before
                               corporate
                               allocations            $133.9                          $120.8                           $118.4                    $102.9

                                               18.0 %                         19.0 %                           29.9 %                   17.5 %

                                Operating
                                  margin (% of
                                  segment
                                  external net
                                  revenue)

                                                                                                                                         GAAP TO NON-GAAP RECONCILIATION

                                                                                                                                   (Dollars in millions, except per share data)

                                                                                                                                                   (Unaudited)


                                                                           Fourth Quarter of                                      Fiscal Years
                                                                           -----------------                                      ------------

                                                                                             2017                            2016                                                           2017                   2016
                                                                                             ----                            ----                                                           ----                   ----

                                                                                 Dollar             % of                                     Dollar                          % of                      Dollar             % of                       Dollar               % of

                                                                                 Amount            Revenue                                   Amount                         Revenue                    Amount            Revenue                     Amount              Revenue
                                                                                 ------            -------                                   ------                         -------                    ------            -------                     ------              -------

    GROSS MARGIN:

                            GAAP gross margin:                                             $370.0               52.2 %                                  $312.8                            53.4 %              $1,392.6                  52.5 %                 $1,238.0                  52.4 %

                            Restructuring charges                ( A )                        2.3                0.3 %                                     0.5                             0.1 %                   3.6                   0.1 %                      1.7                   0.1 %

                             Amortization of purchased
                             intangible assets                   ( B )                       23.3                3.3 %                                    18.7                             3.2 %                  85.8                   3.2 %                     88.6                   3.8 %

                            Stock-based compensation             ( C )                        1.1                0.2 %                                     1.0                             0.2 %                   3.9                   0.2 %                      3.8                   0.1 %

                             Amortization of acquisition-
                             related inventory step-up           ( D )                          -                  -%                                      -                               -%                  2.8                   0.1 %                        -                     -%
                                                                                                                                                                                           ---

                             Non-GAAP gross
                             margin:                                                       $396.7               56.0 %                                  $333.0                            56.9 %              $1,488.7                  56.1 %                 $1,332.1                  56.4 %
                                                                                           ------                                                       ------                                                --------                                         --------


    OPERATING EXPENSES:

                             GAAP operating
                             expenses:                                                     $307.2               43.3 %                                  $257.5                            44.0 %              $1,146.6                  43.2 %                 $1,057.0                  44.7 %

                            Restructuring charges                ( A )                      (0.4)              (0.1)%                                   (1.8)                           (0.3)%                 (6.9)                 (0.2)%                   (11.6)                 (0.5)%

                             Amortization of purchased
                             intangible assets                   ( B )                     (16.4)              (2.2)%                                  (14.9)                           (2.5)%                (63.0)                 (2.4)%                   (62.2)                 (2.6)%

                            Stock-based compensation             ( C )                     (18.7)              (2.6)%                                  (11.6)                           (2.0)%                (60.9)                 (2.3)%                   (48.8)                 (2.1)%

                            Acquisition / divestiture items      ( E )                      (1.3)              (0.2)%                                   (3.4)                           (0.6)%                 (7.4)                 (0.3)%                    (6.8)                 (0.3)%

                            Executive transition costs           ( F )                          -                  -%                                      -                               -%                    -                     -%                   (1.0)                     -%

                             Non-GAAP
                             operating
                             expenses:                                                     $270.4               38.2 %                                  $225.8                            38.6 %              $1,008.4                  38.0 %                   $926.6                  39.2 %
                                                                                           ------                                                       ------                                                --------                                           ------


    OPERATING INCOME:

                             GAAP operating
                             income:                                                        $62.8                8.9 %                                   $55.3                             9.4 %                $246.0                   9.3 %                   $181.0                   7.7 %

                            Restructuring charges                ( A )                        2.7                0.4 %                                     2.3                             0.4 %                  10.5                   0.3 %                     13.3                   0.6 %

                             Amortization of purchased
                             intangible assets                   ( B )                       39.7                5.5 %                                    33.6                             5.7 %                 148.8                   5.6 %                    150.8                   6.4 %

                            Stock-based compensation             ( C )                       19.8                2.8 %                                    12.6                             2.2 %                  64.8                   2.5 %                     52.6                   2.2 %

                             Amortization of acquisition-
                             related inventory step-up           ( D )                          -                  -%                                      -                               -%                  2.8                   0.1 %                        -                     -%

                            Acquisition / divestiture items      ( E )                        1.3                0.2 %                                     3.4                             0.6 %                   7.4                   0.3 %                      6.8                   0.3 %

                            Executive transition costs           ( F )                          -                  -%                                      -                               -%                    -                     -%                     1.0                      -%

                             Non-GAAP
                             operating income:                                             $126.3               17.8 %                                  $107.2                            18.3 %                $480.3                  18.1 %                   $405.5                  17.2 %
                                                                                           ------                                                       ------                                                  ------                                           ------


    NON-OPERATING INCOME (EXPENSE), NET:

                             GAAP non-
                             operating income
                             (expense), net:                                               $(6.5)                                                        $1.5                                                   $13.1                                           $(4.3)

                            Acquisition / divestiture items      ( E )                        8.6                                                        (3.6)                                                  (0.3)                                           (3.5)
                                                                                              ---                                                                                                                ----

                             Non-GAAP non-
                             operating income
                             (expense), net:                                                 $2.1                                                       $(2.1)                                                  $12.8                                           $(7.8)



                                                                                                  GAAP and                                                                 GAAP and                                     GAAP and                                        GAAP and

                                                                                                  Non-GAAP                                                                 Non-GAAP                                     Non-GAAP                                        Non-GAAP

                                                                                                           Tax Rate %  ( J )                                                       Tax Rate %    ( J )                         Tax Rate %      ( J )                          Tax Rate %       ( J )
                                                                                                            ---------                                                                ---------                                    ---------                                       ---------

    INCOME TAX PROVISION:

                             GAAP income tax
                             provision:                                                     $91.2                162 %                                   $19.1                              34 %                $137.9                    53 %                    $44.5                    25 %

                            Non-GAAP items tax effected          ( G )                        7.9                                                         16.4                                                    45.0                                             55.3

                             Difference in GAAP and Non-GAAP
                             tax rate                            ( H )                       15.5                                                       (10.2)                                                   15.5                                            (4.3)

                            Tax reform impacts                   ( I )                     (85.0)                                                           -                                                 (85.0)                                               -
                                                                                            -----                                                                                                               -----

                             Non-GAAP income
                             tax provision:                                                 $29.6                 23 %                                   $25.3                              24 %                $113.4                    23 %                    $95.5                    24 %
                                                                                            -----                                                        -----                                                  ------                                            -----


    NET INCOME (LOSS):

                             GAAP net income
                             (loss)
                             attributable to
                             Trimble Inc.                                                 $(35.0)                                                       $37.7                                                  $121.1                                           $132.4

                            Restructuring charges                ( A )                        2.7                                                          2.3                                                    10.5                                             13.3

                             Amortization of purchased
                             intangible assets                   ( B )                       39.7                                                         33.6                                                   148.8                                            150.8

                            Stock-based compensation             ( C )                       19.8                                                         12.6                                                    64.8                                             52.6

                             Amortization of acquisition-
                             related inventory step-up           ( D )                          -                                                           -                                                    2.8                                                -

                            Acquisition / divestiture items      ( E )                        9.9                                                        (0.2)                                                    7.1                                              3.3

                            Executive transition costs           ( F )                          -                                                           -                                                      -                                             1.0

                            Non-GAAP tax adjustments         ( G ) - ( I )                   61.6                                                        (6.2)                                                   24.5                                           (51.0)

                             Non-GAAP net
                             income
                             attributable to
                             Trimble Inc.                                                   $98.7                                                        $79.8                                                  $379.6                                           $302.4



    DILUTED NET INCOME (LOSS) PER SHARE:

                            GAAP diluted net
                             income (loss) per
                             share
                             attributable to
                             Trimble Inc.                                                 $(0.14)                                                       $0.15                                                   $0.47                                            $0.52

                            Restructuring charges                ( A )                       0.01                                                         0.01                                                    0.04                                             0.06

                             Amortization of purchased
                             intangible assets                   ( B )                       0.16                                                         0.13                                                    0.58                                             0.59

                            Stock-based compensation             ( C )                       0.08                                                         0.04                                                    0.25                                             0.20

                             Amortization of acquisition-
                             related inventory step-up           ( D )                          -                                                           -                                                   0.01                                                -

                            Acquisition / divestiture items      ( E )                       0.04                                                            -                                                   0.03                                             0.01

                            Executive transition costs           ( F )                          -                                                           -                                                      -                                               -

                            Non-GAAP tax adjustments         ( G ) - ( I )                   0.24                                                       (0.02)                                                   0.10                                           (0.19)

                            Non-GAAP diluted
                             net income per
                             share
                             attributable to
                             Trimble Inc.                                                   $0.39                                                        $0.31                                                   $1.48                                            $1.19

                                                                                 FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION


                                                                                                  (Unaudited)


    Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. The non-GAAP financial measures included in the
     previous table as well as detailed explanations to the adjustments to comparable GAAP measures, are set forth below:


    Non-GAAP gross margin

    We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions and manufacturing costs
     influence our business.  Non-GAAP gross margin excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation and
     amortization of acquisition-related inventory step-up from GAAP gross margin. We believe that these exclusions offer investors additional information that may be
     useful to view trends in our gross margin performance.


    Non-GAAP operating expenses

    We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue. Non-GAAP operating expenses exclude restructuring charges,
     amortization of purchased intangible assets, stock-based compensation, acquisition/divestiture items associated with external and incremental costs resulting
     directly from merger and acquisition activities such as legal, due diligence, integration, and other required closing costs, and executive transition costs from GAAP
     operating expenses. We believe that these exclusions offer investors supplemental information to facilitate comparison of our operating expenses to our prior results.


    Non-GAAP operating income

    We believe our investors benefit by understanding our non-GAAP operating income trends which are driven by revenue, gross margin, and spending. Non-GAAP operating
     income excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-
     up, acquisition/divestiture items associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due
     diligence, integration, and other required closing costs, and executive transition costs. We believe that these exclusions offer an alternative means for our
     investors to evaluate current operating performance compared to results of other periods.


    Non-GAAP non-operating income (expense), net

    We believe this measure helps investors evaluate our non-operating income trends. Non-GAAP non-operating income (expense), net excludes acquisition/divestiture
     gains/losses associated with unusual acquisition related items such as intangible asset impairment charges, gains or losses related to the acquisitions, or sale of
     certain businesses and investments. We believe that these exclusions provide investors with a supplemental view of our ongoing financial results.


    Non-GAAP income tax provision

    We believe that providing investors with the non-GAAP income tax provision is beneficial because it provides for consistent treatment of the excluded items in our
     non-GAAP presentation.


    Non-GAAP net income

    This measure provides a supplemental view of net income trends which are driven by non-GAAP income before taxes and our non-GAAP tax rate. Non-GAAP net income
     excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up,
     acquisition/divestiture items, executive transition costs, and non-GAAP tax adjustments from GAAP net income (loss). We believe our investors benefit from
     understanding these exclusions and from an alternative view of our net income performance as compared to our past net income performance.


    Non-GAAP diluted net income per share

    We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating
     performance by ownership in the company. Non-GAAP diluted net income per share excludes restructuring charges, amortization of purchased intangible assets, stock-
     based compensation, amortization of acquisition-related inventory step-up, acquisition/divestiture items, executive transition costs, and non-GAAP tax adjustments
     from GAAP diluted net income (loss) per share. We believe that these exclusions offer investors a useful view of our diluted net income (loss) per share as compared
     to our past diluted net income (loss) per share.


    These non-GAAP measures can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors. We believe
     some of our investors track our "core operating performance" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our
     operations. Core operating performance excludes items that are non-cash, not expected to recur or not reflective of ongoing financial results.  Management also
     believes that looking at our core operating performance provides a supplemental way to provide consistency in period to period comparisons.  Accordingly, management
     excludes from non-GAAP those items relating to restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of
     acquisition-related inventory step-up, acquisition/divestiture items, executive transition costs, and non-GAAP tax adjustments.  For detailed explanations of the
     adjustments made to comparable GAAP measures, see items (A) - ( J ) below.


    ( A )                      Restructuring charges. Included in our GAAP presentation of cost
                               of sales and operating expenses, restructuring charges recorded
                               are primarily for employee compensation resulting from
                               reductions in employee headcount in connection with our company
                               restructurings.  We exclude restructuring charges from our non-
                               GAAP measures because we believe they do not reflect expected
                               future operating expenses, they are not indicative of our core
                               operating performance, and they are not meaningful in
                               comparisons to our past operating performance.  We have
                               incurred restructuring expense in each of the periods
                               presented.  However the amount incurred can vary significantly
                               based on whether a restructuring has occurred in the period and
                               the timing of headcount reductions.


    ( B )                      Amortization of purchased intangible assets.Included in our GAAP
                               presentation of gross margin and operating expenses is
                               amortization of purchased intangible assets. U.S. GAAP
                               accounting requires that intangible assets are recorded at fair
                               value and amortized over their useful lives. Consequently, the
                               timing and size of our acquisitions will cause our operating
                               results to vary from period to period, making a comparison to
                               past performance difficult for investors. This accounting
                               treatment may cause differences when comparing our results to
                               companies that grow internally because the fair value assigned
                               to the intangible assets acquired through acquisition may
                               significantly exceed the equivalent expenses that a company may
                               incur for similar efforts when performed internally.
                               Furthermore, the useful life that we use to amortize our
                               intangible assets over may be substantially different from the
                               time period that an internal growth company incurs and
                               recognizes such expenses. We believe that by excluding the
                               amortization of purchased intangible assets, which primarily
                               represents technology and/or customer relationships already
                               developed, it provides an alternative way for investors to
                               compare our operations pre-acquisition to those post-
                               acquisitions and to those of our competitors that have pursued
                               internal growth strategies. However, we note that companies
                               that grow internally will incur costs to develop intangible
                               assets that will be expensed in the period incurred, which may
                               make a direct comparison more difficult.


    ( C )                      Stock-based compensation.Included in our GAAP presentation of
                               cost of sales and operating expenses, stock-based compensation
                               consists of expenses for employee stock options and awards and
                               purchase rights under our employee stock purchase plan. We
                               exclude stock-based compensation expense from our non-GAAP
                               measures because some investors may view it as not reflective
                               of our core operating performance as it is a non-cash expense.
                                 For the fourth quarter and fiscal years 2017 and 2016, stock-
                                 based compensation was allocated as follows:


                                                                                       Fourth Quarter of                  Fiscal Years
                                                                                       -----------------                  ------------

                              (Dollars in millions)                                                  2017                              2016                             2017  2016
                                                                                                     ----                              ----                             ----  ----

                              Cost of sales                                                          $1.1                              $1.0                             $3.9  $3.8

                              Research and development                                                2.7                               2.2                             10.4   9.1

                              Sales and Marketing                                                     2.3                               2.0                              9.3   8.3

                              General and administrative                                             13.7                               7.4                             41.2  31.4
                                                                                                     ----                                                              ----

                                                                                                    $19.8                             $12.6                            $64.8 $52.6
                                                                                                    -----                             -----                            ----- -----


    ( D )                      Amortization of acquisition-related inventory step-up.  The
                               purchase accounting entries associated with our business
                               acquisitions require us to record inventory at its fair value,
                               which is sometimes greater than the previous book value of the
                               inventory. Included in our GAAP presentation of cost of sales,
                               the increase in inventory value is amortized to cost of sales
                               over the period that the related product is sold. We exclude
                               inventory step-up amortization from our non-GAAP measures
                               because it is a non-cash expense that we do not believe is
                               indicative of our ongoing operating results. We further believe
                               that excluding this item from our non-GAAP results is useful
                               to investors in that it allows for period-over-period
                               comparability.


    ( E )                      Acquisition / divestiture items.  Included in our GAAP
                               presentation of operating expenses, acquisition costs consist
                               of external and incremental costs resulting directly from
                               merger and acquisition and strategic investment activities such
                               as legal, due diligence, integration, and other required
                               closing costs, as well as adjustments to the fair value of
                               earn-out liabilities.  Included in our GAAP presentation of
                               non-operating income (expense), net, acquisition/divestiture
                               items includes unusual acquisition, investment, and/or
                               divestiture gains/losses. Although we do numerous
                               acquisitions, the costs that have been excluded from the non-
                               GAAP measures are costs specific to particular acquisitions.
                               These are one-time costs that vary significantly in amount and
                               timing and are not indicative of our core operating
                               performance.


    ( F )                      Executive transition costs.  Included in our GAAP presentation
                               of operating expenses are amounts paid to the Company's former
                               CFO upon his departure under the terms of his executive
                               severance agreement. We excluded these payments from our non-
                               GAAP measures because they represent non-recurring expenses
                               and are not indicative of our ongoing operating expenses. We
                               further believe that excluding the executive transition costs
                               from our non-GAAP results is useful to investors in that it
                               allows for period-over-period comparability.


    ( G )                      Non-GAAP items tax effected.   This amount adjusts the
                               provision for income taxes to reflect the effect of the non-
                               GAAP items ( A ) - ( F ) on non-GAAP net income.   We believe
                               this information is useful to investors because it provides for
                               consistent treatment of the excluded items in this non-GAAP
                               presentation.


    ( H )                      Difference in GAAP and Non-GAAP tax rate.   This amount
                               represents the difference between the GAAP and Non-GAAP tax
                               rates applied to the Non-GAAP operating income plus the Non-
                               GAAP non-operating income (expense), net.


    ( I )                      Tax reform impacts.  This amount represents the provision for
                               income taxes recorded as a result of the Tax Cuts and Jobs Act
                               enacted in December 2017. The provision primarily includes a
                               one-time transition tax on accumulated foreign earnings and
                               related adjustments, and revaluation of deferred taxes due to
                               the reduction of US income tax rate. We are required to
                               recognize the effect of the tax law changes in the period of
                               enactment. We excluded this item as it is a non-recurring
                               expense. We believe that investors benefit from excluding this
                               item from our non-GAAP income tax provision because it allows
                               for period-over-period comparability.


    ( J )                      GAAP and non-GAAP tax rate %.  These percentages are defined as
                               GAAP income tax provision as a percentage of GAAP income (loss)
                               before taxes and non-GAAP income tax provision as a percentage
                               of non-GAAP income before taxes.   We believe that investors
                               benefit from a presentation of non-GAAP tax rate percentage as
                               a way of facilitating a comparison to non-GAAP tax rates in
                               prior periods.

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SOURCE Trimble