Trimble
Annual Report 2006

Plain-text annual report

T R I M B L E A N N U A L R E P O R T 2 0 0 6 International Sales Centers Europe Trimble Benelux Meerheide 45 5521DZ Eersel Netherlands Trimble France 32, rue de la Fontaine du Vaisseau 94120 Fontenay-sous-Bois France Trimble Germany Am Prime Parc 11 65479 Raunheim Germany Trimble Italy Cento Torri Bianche Palazzo Larice, 3 20059 Vimercate (MI) Italy Trimble Russia 23, 1st Tverskaya-Yamskaya Moscow, 125047 Russia Trimble Spain Via de las Dos Castillas No. 33 Atica, Edificio 6 Despacho B-2 28224 Pozuelo de Alarcon Madrid Spain Trimble Nordic Box 64, Rinkebyvägen 17 182 11, Danderyd Sweden Trimble UK Trimble House Meridian Office Park Osborn Way, Hook Hampshire RG27 9HX United Kingdom International Sales Centers Middle East Trimble Dubai LOB 14 Office 322 PO Box 17760 Jebel Ali Free Zone, Dubai United Arab Emirates International Sales Centers Asia and Pacific Rim Trimble Australia Level 1/120 Wickham Street Fortitude Valley QLD 4006 Australia Trimble China Beijing Representative Office Room 2602-05, Tengda Plaza No. 168 Xiwai Street Haidian District Beijing 100044 China Suite 7-B, Jinlinghaixin Building 666 Fuzhou Road Shanghai 200001 China 311 Fute (M) Road, 3/F Wai Gaoqiao Free Trade Zone Pudong, Shanghai 200131 China Trimble India SF – 04, JMD Regent Plaza M.G. Road Gurgaon 122001 New Delhi India Trimble Korea 10F, Dongsung Bldg., 158-24 Samsung-Dong Gangnam-Gu, Seoul 135-090 Korea Trimble Singapore 80 Marine Parade Road 22-06, Parkway Parade Singapore 449269 International Sales Centers The Americas Trimble Canada 208 Evans Avenue, #104 & 204 Toronto, Ontario M8Z 1J7 Canada Joint Ventures Caterpillar Trimble Control Technologies LLC 5475 Kellenburger Road Dayton, Ohio 45424 Nikon-Trimble Co., Ltd. Technoport Mitsuiseimei Building 16-2, Minamikamata 2-chome Ota-ku Tokyo 144-0035 Japan Corporate Headquarters Trimble Navigation Limited 935 Stewart Drive Sunnyvale, California 94085 United States Operations Trimble Tempe 7850 South Hardy Drive, Suite 122 Tempe, Arizona 85284 Trimble Rockies 10355 Westmoor Drive Westmoor Technology Park Building 4 Westminster, Colorado 80021 Trimble Dayton 5475 Kellenburger Road Dayton, Ohio 45424 Trimble Chantilly 3650 Concorde Parkway, Suite 150 Chantilly, Virginia 20151 @Road, Inc. 47071 Bayside Parkway Fremont, California 94538 Advanced Public Safety, Inc. 500 Fairway Drive, Suite 204 Deerfield Beach, Florida 33441 Apache Technologies, Inc. 8261 State Route 235 Huber Heights Dayton, Ohio 45424 Eleven Technology, Inc. 119 Mount Auburn Street 4th Floor One Mifflin Place Cambridge, Massachusetts 02138 Meridian Project Systems, Inc. 8775 Folsom Corners Folsom, California 95630 MobileTech Solutions, Inc. 19111 N Dallas Parkway Suite 350 Dallas, Texas 75287 Pacific Crest Corporation 990 Richard Avenue, Suite 110 Santa Clara, California 95050 Tripod Data Systems, Inc. 345 SW Avery Avenue Corvallis, Oregon 97333 XYZ Solutions, Inc. 2500 Northwinds Parkway Suite 625 Northwinds Business Center Alpharetta, Georgia 30004 Americas Regional Fulfillment Center 5475 Kellenburger Road Dayton, Ohio 45424 International Operations Trimble TerraSat Haringstrasse 19 D-85635 Höhenkirchen- Siegertsbrunn Germany Trimble Jena Carl-Zeiss Promenade 10 D-07740 Jena Germany Trimble Kaiserslautern Am Sportplatz 5 D-67661 Kaiserslautern Germany Trimble New Zealand 11 Birmingham Drive P.O. Box 8729 Riccarton, Christchurch New Zealand Trimble Sweden Box 64, Rinkebyvägen 17 182 11, Danderyd Sweden @Road, Ltd. Level 8, 15 Talavera Road North Ryde NSW 2113 Australia @Road, Ltd. 901 (A1) & 902 (A2), Tidel Park No. 4 Canal Bank Road Taramani, Chennai 600 113 India @Road, Ltd. North Felaw Maltings Ipswich IP2 8HE United Kingdom Applanix Corporation 85 Leek Crescent Richmond Hill, Ontario L4B 3B3 Canada Inpho GmbH Smaragdweg 1 70174 Stuttgart Germany Trimble GeoNav An der Feldmark 16 D-31515 Wunstorf Germany Meridian Project Systems, Inc. 221 West Esplanade 3rd Floor, Suite 300 B.C. Rail Centre, North Vancouver British Columbia V6E 3V7 Canada Quantm, Ltd. Level 4, 333 Flinders Lane Melbourne VIC 3000 Australia Visual Statement, Inc. 1055 Dunsmuir Street, Suite 2300 PO Box 49122 Four Bental Centre, Vancouver British Columbia V7X 7J1 Canada European Regional Fulfillment Center Meerheide 45 5521DZ Eersel Netherlands T R I M B L E A N N U A L R E P O R T 2006 J U S T T H E F A C T S FOR S HARE HO LDE RS F I N A N C I A L & C O M P A N Y H I G H L I G H T S TRIMBLE APPLIES TECHNOLOGY TO MAKE FIELD AND MOBILE WORKERS IN BUSINESSES AND GOVERNMENT SIGNIFICANTLY MORE PRODUCTIVE. SOLUTIONS ARE FOCUSED ON APPLICATIONS REQUIRING POSITION OR LOCATION—INCLUDING SURVEYING, CONSTRUCTION, AGRICULTURE, FLEET AND ASSET MANAGEMENT, PUBLIC SAFETY AND MAPPING. IN ADDITION TO UTILIZING POSITIONING TECHNOLOGIES, SUCH AS GPS, LASERS AND OPTICS, TRIMBLE SOLUTIONS MAY INCLUDE SOFTWARE CONTENT SPECIFIC TO THE NEEDS OF THE USER. WIRE- LESS TECHNOLOGIES ARE UTILIZED TO DELIVER THE SOLUTION TO THE USER AND TO ENSURE A TIGHT COUPLING OF THE FIELD AND THE BACK OFFICE. NASDAQ: TRMB REVENUE In $ millions CASH FLOW FROM OPERATIONS In $ millions EBITDA In $ millions 1,000 900 800 700 600 500 400 300 200 100 0 140 120 100 80 60 40 20 0 180 160 140 120 100 80 60 40 20 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 C O N S I S T E N T G R O W T H SINCE 2002 Executive Management Steven W. Berglund President and Chief Executive Officer Rajat Bahri Chief Financial Officer Richard A. Beyer Vice President Mobile Solutions Bryn Fosburgh Vice President Engineering and Construction Alan R. Townsend Vice President Field Solutions Dennis L. Workman Vice President and Chief Technology Officer Advanced Devices Ann Ciganer Vice President Strategic Policy Joseph F. Denniston, Jr. Vice President Operations Mark A. Harrington Vice President Strategy and Business Development Debra Hirshlag Vice President Human Resources Irwin L. Kwatek Vice President and General Counsel Michael W. Lesyna Vice President Business Transformation Bruce E. Peetz Vice President Advanced Technology and Systems Julie Shepard Vice President of Finance John E. Huey Treasurer Board Of Directors Robert S. Cooper, Ph.D Chairman Aerospace Business Consultant Steven W. Berglund President and Chief Executive Officer Shareholder Information Corporate Headquarters Trimble Navigation Limited 935 Stewart Drive Sunnyvale, California 94085 Phone: (408) 481-8000 www.trimble.com John B. Goodrich Secretary Chief Executive Officer MaxSP Corporation William Hart Venture Capital Investor and Business Consultant Ulf J. Johansson, Ph.D Director Telefon AB LM Ericsson Bradford W. Parkinson, Ph.D Professor (Emeritus) Stanford University Nickolas W. Vande Steeg Chief Operating Officer Parker Hannifin Corporation Independent Auditors Ernst & Young LLP Palo Alto, California Transfer Agent & Registrar American Stock Transfer & Trust Company 59 Maiden Lane Plaza Level New York, New York 10038 1 (800) 937-5449 Investor Relations Contact (408) 481-7838 investor_relations@trimble.com Additional Information 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 Trimble Investor Information Traded: The NASDAQ Stock Exchange Symbol: TRMB ©2007, Trimble Navigation Limited. All rights reserved. Trimble, the Globe and Triangle logo, AgGPS, EZ-Guide and TrimTrac are trademarks of Trimble Navigation Limited regis- tered in the United States Patent and Trademark Office. Autopilot, TrimView, Trimble Outdoors and VRS are trademarks of Trimble Navigation Limited. All others trademarks are property of their respective owners. P/N: 022540-026 l e t t e r t o o u r s h a r e h o l d e r s To our shareholders TO OUR SHAREHOLDERS, EMPLOYEES AND PARTNERS: 2006 was another strong year for Trimble. Total revenues concepts. At Dimensions 2006 we educated over 2,000 grew 21 percent for the year, baseline adjusted operating contractors, surveyors and engineers on the potential of income grew 36 percent and adjusted earnings per share using technology to transform the nature of the work on grew 48 percent. Our baseline operating leverage (the ratio the construction site. of non-GAAP incremental operating profits to incremental revenues), which is key to continued margin expansion, was 29 percent for the year. Beyond financials, our strategic trajectory during the year strengthened and we enter 2007 with good momentum. Revenue in Field Solutions grew by 9 percent and adjusted earnings by 21 percent, with stronger revenue growth occurring in the second half of the year. Revenue from Geographical Information Systems (GIS) was comparatively strong relative to the prior year based on an improved Looking at our results by reporting segment: product portfolio and a more capable distribution channel. The business trends in Engineering and Construction (E&C) continue to be positive with over 21 percent revenue growth for the year and adjusted earnings up more than Our agricultural business reflected specific conditions which resulted in a cosmetically weak first half followed by a stronger second half. 33 percent year over year. Aside from the residential construc- Precision Agriculture has been a significant contributor to tion slowdown in the U.S.— which has not had a material Trimble’s growth for several years. Our product focus has impact on our results — external conditions remained rela- been on providing GPS guidance solutions which enable tively constant during the year. This steady environment, more precise operation of farm equipment in the field. coupled with focused marketing, new products, and new During 2006, we extended our agricultural product portfolio product categories, continued to drive segment results. by creating a new, flow controls product line to leverage the The Connected Construction Site initiative continues to prog- ress as we extend the concept of digitizing the information infrastructure for the engineering and construction process through both internal development and acquisition. Eight acquisitions during 2006—including Meridian Systems, XYZ GPS and computing capabilities now resident on farm equip- ment as a result of our guidance products. These actions are taking place against what appears to be more favorable trends in the agricultural market as a result of investments in ethanol, strengthening prices, and lower fuel costs. Solutions, and Quantm International—filled in many of the Our GIS business has been a steady profit generator for remaining technology gaps on the Connected Construc- Trimble for many years, albeit with growth rates typically tion Site continuum. Our annual user’s conference, Trimble lower than the Trimble average. To extend our capabilities Dimensions, continues to provide us with a unique venue in GIS and to provide a new source of growth, we acquired in which to establish industry leadership in the emerging Spacient Technologies late in 2006 which extends our soft- ware presence in the utilities market. l e t t e r t o o u r s h a r e h o l d e r s P E R F O R M A N C E delIVered The Mobile Solutions segment had a dynamic 2006 and is and we are seeing more top-line buoyancy than we have poised to have an even more dynamic 2007. Reported revenues for some time. The component business reflected record grew 93 percent for the year as a result of the combined unit shipments, in spite of the continuing decline in sales to effects of organic growth and acquisitions. Reported operating the automotive industry. Although the rest of this report profits swung by over $5.6 million during the year—from a is focused on our end-user markets, the Advanced Devices loss in 2005 to a profit in 2006. segment remains a key element in our overall technology This segment remains a promising emerging arena for Trimble and a point of strategic emphasis. Our focus remains picture and provides unique insight into potential tech- nologies and markets. on providing solutions for commercial vehicles carrying Our fundamental corporate mission is to transform the way valuable loads, and mobile workers performing complex work is done in our targeted markets through the innova- tasks. The advantages we provide to the user include the tive application of technology. Our two overriding goals are ability to more efficiently perform tasks in the field and, as to achieve compelling leadership in those markets while importantly, to more effectively tie the back office and the delivering financial performance well within the top quartile field together into a more productive whole. of the relevant universe of comparable companies. The key In February 2007 we closed the acquisition of @Road. In dollar terms this is the most significant acquisition in Trimble’s history. The transaction is a consistent extension of the strategic course Trimble has been on since 2001 in this segment and reflects our belief in the significant potential of this market and the expectation that the development of the market will accelerate in the next two to three years. In elements of our strategy to achieve these goals, which we established a number of years ago, remain relevant as we enter 2007. We are fortunate that these fundamental, longer- term strategies, although constantly being refined and inter- nally challenged, remain relevant and consistent. We have therefore been able to focus on the key points of executing that strategy. addition to our underlying views of the market, we believe As Trimble approaches a billion dollar revenue rate, we will @Road has built a strong product portfolio, has estab- encounter new opportunities as well as new challenges that lished a world-class scalable software infrastructure and result from our growth. On the one hand, increasing size pro- pioneered new channels. With this transaction, Trimble vides us with the advantages of scale and additional degrees achieves a leadership position in terms of capabilities and of freedom. On the other hand, we face the accompanying products and can use that position to accelerate the further potential for increased complexity, less transparency, and penetration of the market. From that leadership position, less control if we do not respond effectively to changing we believe we can make this combination highly successful circumstances. Our first order response is to intensify our financially with returns well above our cost of capital. commitment to the core organizational values that have The Advanced Devices segment grew 13 percent for the year but had lower profitability. Although we are not sat- isfied with the profit picture for the segment, the internal dynamics of this business are showing improved potential served us well—including disciplined entrepreneurship, focus and flexibility in responding to our markets, and tight coupling across the company to enable faster innova- tion. In addition, we are expanding the investment in our employees’ development which will enable them to perform 21%effectively on a larger stage. Beyond that, we are continually • Rapidly develop the Connected Construction Site concept, challenging ourselves to improve the basic “plumbing” with the expectation it will begin to beneficially contribute of the company from a process and systems perspective. to E&C results in 2008, without losing focus on our existing For example, during 2006 we launched “Trimble Delivers,” product categories. our program to create a step function improvement in our execution. As part of that initiative we are training Trimble employees to utilize conceptual tools to better analyze and • Constructively combine @Road and Trimble in a manner that puts us on the path to accretive performance in 2008. solve complex problems, including Lean and Six Sigma tech- • Aggressively enter new vertical and enterprise segments of niques, which we used to successfully implement a number the mobile resource management market where Trimble of projects in 2006. can provide significant value. We believe we have a grasp of what we need to do to achieve • Continue to penetrate the agricultural market through our strategic future. Our first step towards that future is to aggressive product innovation and extension, channel effectively address the priorities of today. Some of the specific refinement, and improvement in the cost-benefit equation priorities of the next year include the following: for the farmer. • Ensure the E&C acquisitions of the last 18 months contri- • Address additional growth segments in the GIS market, bute with revenue growth and convergence on the Trimble with particular emphasis on the utilities market, while financial model while fulfilling their strategic role. We continuing to accelerate the rate of our international expect this contribution to become more meaningful in development and expansion. the second half of 2007 and accelerate into 2008. Ultimately our future success is dependent upon building an organization that is continually striving to do better and is capable of doing so. Our more than 3,400 global employees understand the fundamentals that lie behind our future success and have the requisite work ethic, smarts, and com- mitment to improvement necessary to achieve it. The efforts of our employees in undertaking the difficult challenges inherent in realizing our potential is, as always, appreciated. STEVEN W. BERGLUND President and Chief Executive Officer revenue CAGR since 2002t r I M B l e a t W o r K Trimble and the Connected Construction Site G P S Was J us t the BeGINNI NG 20%more productivityTRIMBLE HAS BEEN COLLABORATING WITH ENGINEERING AND CONSTRUCTION PROFESSIONALS SINCE ITS BEGINNING, ENABLING THEM TO USE POSITIONING TECHNOLOGY IN EACH STAGE OF THE CONSTRUCTION PROCESS TO DRAMATICALLY IMPROVE PRODUCTIVITY AND ACCURACY. TRIMBLE’S TECHNOLOGY PROVIDES USERS THE CAPABILITY TO PERFORM VIRTUAL FEASIBILITY AND PLANNING, ADVANCED SURVEY, 3D MODELING AND DESIGN, AND MACHINE CONTROL-BASED EARTHWORK. TRIMBLE IS EXTENDING ITS SCOPE THROUGH ITS FOCUS ON THE SEAMLESS CONNECTION OF ENGINEERING, SURVEYING AND CONSTRUCTION PROCESSES BY TYING TOGETHER SPATIAL, PRODUCT AND BUSINESS DATA ACROSS THE ENTIRE CONSTRUCTION PROCESS. • Bechtel is the primary contractor building two new 615-megawatt generating units, a coal storage facility, a water intake and cooling system, and a 550-foot (168 meter) chimney for the Oak Creek coal-generating power plant in southeastern Wisconsin. The US$2.2 billion project is the largest lump-sum private construc- tion project ever for both Wisconsin and Bechtel, creating significant engineering challenges. Bechtel is using Trimble’s Connected Construction Site approach to seamlessly integrate data from its robotic and GPS survey systems through one controller, greatly enhancing workflow and site processes. Trimble’s GPS- based grade control systems have been used for site prep and connected with the survey work through electronically shared design and survey files. A Trimble RTK GPS base station provides a unified coordinate system for all project contractors. Trimble’s technology is integral to the Oak Creek project, which will become a power plant capable of generating electricity for more than one million customers. Trimble is the leader in the application of positioning technologies for the engineering and construction market. Coupled together with this focus on maintaining technology leadership is an emphasis on the continual improvement of our customer support capabilities. Trimble’s goal is to assist our customers in determining the best technological solutions and the optimal manner in which to implement and fold these solutions onto the daily workflow of the job site. Trimble’s Connected Construction Site approach ensures a more productive and efficient information workflow throughout the entire construction process, as demon- strated in these actual projects: • The largest expressway reconstruction project in Chicago history is currently underway on the Dan Ryan Expressway. The project will cost the Illinois Depart- ment of Transportation US$975 million and must be completed in just three years. Trimble solutions are being used throughout the project. Trimble VRS™ (Virtual Reference Station) technology is used to cover 5,000 square miles (12,950 square kilometers) and provide 24-hour, real-time kinematic (RTK) GPS data, allowing surveyors to use Trimble rovers without setting up separate base stations. For earthmoving and grading which require absolute precision —the road model is downloaded in real-time into Trimble GPS-based grade control equipment, and calibrated to within 3/8 of an inch (~one centimeter) tolerance. By job’s end, Trimble technology will help to set over 300,000 linear feet (91,440 meters) of construction survey layout on the site, as well as move almost a million cubic yards (765,000 cubic meters) of dirt. t r I M B l e a t W o r K Trimble and Managing Mobile Resources C O N V E R G I N G MoBIle WorK, WorKForCe, aNd Fleet managementEnabling best practices inmobileTRIMBLE PROVIDES THE INDUSTRY’S MOST COMPREHENSIVE SET OF MOBILE RESOURCE MANAGEMENT SOLUTIONS— BRINGING TOGETHER THE TOOLS TO MANAGE THE ASSETS, THE MOBILE WORKER AND THE UNDERLYING WORK PROCESS THROUGHOUT THE MOBILE ENTERPRISE. TRIMBLE’S HANDHELD AND IN-VEHICLE SOLUTIONS COMBINE MOBILE WORKFORCE PRODUCTIVIT Y WITH FLEET MANAGEMENT ON AN INTEGRATED, COMMON PLATFORM. COMPANIES IN THE CONSUMER PACKAGED GOODS (CPG), TRANSPORTATION, DISTRIBUTION, CONSTRUCTION AND FIELD SERVICE INDUSTRIES USE TRIMBLE PRODUCTS AND SERVICES TO MAXIMIZE OPERATIONAL PRODUCTIVITY AND EFFICIENCY OF THEIR MOBILE WORK- FORCE AND MINIMIZE FLEET OPERATING EXPENSES. Trimble’s solutions are transforming industries that traditionally relied on the clipboard and radio for communication and record keeping in the field. For example: • A global building solutions company which produces 91.5 million cubic yards (70 million cubic meters) of ready-mix concrete a year employs a team of dispatchers who must constantly check incoming customer orders against concrete production and delivery capacities. Historically, drivers provided status updates manually, but dispatchers often received incomplete or inaccurate information from the field. Trimble’s TrimView™ RM fleet management solution automates this process by integrating GPS technology with sensors on the truck. This solution provides the dispatcher with real-time vehicle location and status of all key operational steps including the loading process, arrival, concrete pour start and end, exit, and finally arrival back at the plant to complete the delivery cycle. Beyond this dispatch capability the solution provides the fleet manager with extensive data on the fleet’s operation that enables significant insight that, in turn, facilitates major improvements in operational efficiencies. As a result, the system paid for itself in only a few months. • A worldwide consumer packaged goods (CPG) company uses Trimble’s solutions to ensure the right mix of prod- ucts are placed in the right stores, in the right quantities, at the right time, and that they are appropriately mer- chandized to maximize sales. The Trimble solution suite for CPG combines handheld applications for direct store delivery and retail execution enabling organizations to better manage the battle for consumer attention at the shelf where buying decisions are made. Combined with in-vehicle fleet management solutions, Trimble provides the CPG mobile worker with the tools they need to work efficiently while on the road. • A leading global bottler with a fleet of 200 vehicles is deploying Trimble’s solutions to electronically transmit service calls with customer contact, service history, and equipment data, to their field service representatives. The service reps will be able to more efficiently execute their work with less administration and improved reporting of time, mileage, parts usage and service call disposition. In addition to wirelessly reporting the status and metrics of completed service calls, the reps will be able to track the location and status of company- owned assets such as coolers and vending machines, and conduct equipment and retail outlet-based surveys for more accurate and timely demographic and com- petitive data. t r I M B l e a t W o r K Trimble and Precision Agriculture T R A N S F O R M I N G FarMers’ WorK onePayback inseasonTRIMBLE’S TECHNOLOGY MAKES IT POSSIBLE FOR FARMERS TO IMPROVE THEIR OPERATIONS IN EVERY SEASON. TRIMBLE’S GPS AUTOMATED STEERING SOLUTIONS ENABLE THE FARMER TO WORK HANDS FREE EVEN ON SLOPES AND ROUGH TERRAIN. TRIMBLE’S ASSISTED GUIDANCE SYSTEMS LEAVE THE OPERATOR IN CONTROL BUT PROVIDE SIGNIFICANTLY IMPROVED EFFICIENCY AND PRECISION. ALL OF TRIMBLE’S AGRICULTURAL SYSTEMS GIVE THE FARMER EARLY PAYBACK, MEASURABLE IN TERMS OF HOURS OF TIME, YIELD PER ACRE AND LOWER INPUT COSTS. TRIMBLE SOLUTIONS ENABLE THE PRECISION AUTOMATION OF THE AGRICULTURAL VEHICLE AND IMPLEMENT AND PROVIDE A KEY ELEMENT OF FUTURE BEST PRACTICE ON THE FARM. Trimble GPS-enabled systems provide guidance capa- bilities for farming operations, such as tillage, planting, cultivation and irrigation. These capabilities were aug- mented in 2006 with the introduction of flow controls products that provide increased control of spraying. Trimble also offers laser-based products for land-leveling and sub-surface drainage. Trimble’s agricultural systems allow farmers to better manage their agricultural operations—from planting to harvesting, and land leveling— to work their land by the acre. Trimble’s agricultural solutions are used by both small and large farmers for applications like these: • A father and son farming team uses the EZ-Guide® Plus lightbar guidance system on their 4,000-acre (1,619 hectare) farm. They attach it to a self-propelled sprayer enabling them to finish spraying a 160-acre field in just 45 minutes. The EZ-Guide Plus system reduces overlap and skip, making it easy to spray 28 rows at a time, with a 90-foot boom. They also use the AgGPS® Autopilot™ system for planting twelve 38-inch rows and spraying 28 rows per pass to within an inch of accuracy. Together, the two applications save the team about US$10.00 per acre (~.5 hectare) by reducing the over application of chemicals. Hence, they were able to recoup the cost of the Trimble system two fold in less than six months. • Grimmway Farms, a large carrot producer based in Cali- fornia, uses eight AgGPS Autopilot systems to prepare its crop beds on the 35,000 acres (14,164 hectares) of land which it farms. Grimmway’s tractors use the AgGPS Autopilot steering systems to automatically steer in consistently straight rows ensuring minimum overlap. The AgGPS Autopilot systems significantly increase pro- ductivity, efficiency and quality by improving accuracy, decreasing guess rows and reducing down time due to fog or nightfall. • A cotton grower who lost 6,200 acres (2,509 hectares) of cotton due to heavy rain and hail was able to use his Autopilot RTK system around the clock to replant most of his acreage. In less than four days he replanted 4,800 acres (1,942 hectares) of cotton and planted 1,400 acres (566 hectares) of sunflowers. The Trimble equip- ment allowed him to rapidly plant the acreage with pre- cise row widths and accurate seed placement, resulting in a good yield for what otherwise would have been a completely unproductive season. Markets Served Product Examples Representative Customer eNGINeerING aNd CoNstruCtIoN 68% of total revenue surVey Integrated surveying solutions: GNSS/GPS systems Robotic, servo and mechanical total stations Digital levels and theodolites Spatial imaging: 3D laser scanners Spatial stations Enabling products: Data collectors/field computers Field and office application software CoNstruCtIoN Machine guidance systems Laser and optical positioning and alignment tools Field and office application software INFrastruCture GPS reference networks and software FIeld solutIoNs 15% of total revenue aGrICulture Manual and automated steering systems for farm vehicles and implements Flow controls and boom switching for chemical application Grade control systems for irrigation and drainage MappING aNd GIs Handheld GPS field data collectors Field and office application software adVaNCed deVICes 11% of total revenue eMBedded Gps produCts Chipsets and boards Embedded silicon and firmware tIMING CDMA and WiMax base station clocks Time and frequency boards and instruments INteGrated produCts TrimTrac® Locator Surveyors Civil engineers Construction contractors Transportation agencies Utility companies Plant engineers Earthmoving contractors General construction contractors Utility contractors Wall and ceiling contractors Transportation agencies Government and scientific agencies General construction contractors Surveyors Farmers Agricultural contractors Utility companies Natural resource agencies Government agencies Electronics OEMs Portable appliance manufacturers Wireless infrastructure providers Wireless location solution providers Automatic vehicle location Asset tracking/logistics management applaNIx Integrated inertial/GPS positioning and orientation systems Land, marine and aerial surveying and mapping contractors deFeNse GPS receivers for aircraft Military time and frequency boards trIMBle outdoors™ serVICe Mapping software on GPS-enabled mobile phones Web-based mapping application Fleet MaNaGeMeNt GPS-enabled mobile devices and software seCurIty GPS-enabled mobile devices MoBIle WorKer produCtIVIty tools GPS-enabled mobile devices and software U.S. Department of Defense Allied defense ministries Defense contractors Outdoor enthusiasts Local fleet operators Municipal fleet operators Commercial vehicles Construction supply Direct store delivery Public safety MoBIle solutIoNs 6% of total revenue F O R M 1 0 K trIMBle NaVIGatIoN lIM Ited P E R F O R M A N C E G R A P H The following graph shows a five-year comparison of the cumulative total return for the Company’s Common Stock, the Nasdaq Composite Total Return Index (U.S.), and the Standard & Poor’s Information Technology Sector Index: (1) CoMparIsoN oF FIVe-year CuMulatIVe total returN* among trimble Navigation limited, the NasdaQ Composite Index and the s & p Information technology Index $ 500 450 400 350 300 250 200 150 100 50 $ 0 12 /01 12 /02 12 /03 12 /04 12 /05 12 /06 trIMBle NaVIGatIoN lIMIted NasdaQ CoMposIte s & p INForMatIoN teChNoloGy (1) The data in the above graph is presented on a calendar year basis through December 31, 2006 which is the most currently available data from the indicated sources. 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 2006 fiscal year end was December 29, 2006. 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. * Assumes an investment of $100 on December 31, 2001 in the Company’s Common Stock, the Nasdaq Composite Total Return Index (U.S.), and the Standard & Poor’s Information Technology Sector Index including reinvestment of dividends. Total returns assume the reinvestment of dividends for the indexes. The Company has never paid dividends on its Common Stock and has no present plans to do so. Copyright © 2007, Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. All rights reserved. F I N A N C I A L & C O M P A N Y H I G H L I G H T S TRIMBLE APPLIES TECHNOLOGY TO MAKE FIELD AND MOBILE WORKERS IN BUSINESSES AND GOVERNMENT SIGNIFICANTLY MORE PRODUCTIVE. SOLUTIONS ARE FOCUSED ON APPLICATIONS REQUIRING POSITION OR LOCATION—INCLUDING SURVEYING, CONSTRUCTION, AGRICULTURE, FLEET AND ASSET MANAGEMENT, PUBLIC SAFETY AND MAPPING. IN ADDITION TO UTILIZING POSITIONING TECHNOLOGIES, SUCH AS GPS, LASERS AND OPTICS, TRIMBLE SOLUTIONS MAY INCLUDE SOFTWARE CONTENT SPECIFIC TO THE NEEDS OF THE USER. WIRE- LESS TECHNOLOGIES ARE UTILIZED TO DELIVER THE SOLUTION TO THE USER AND TO ENSURE A TIGHT COUPLING OF THE FIELD AND THE BACK OFFICE. NASDAQ: TRMB REVENUE In $ millions CASH FLOW FROM OPERATIONS In $ millions EBITDA In $ millions 1,000 900 800 700 600 500 400 300 200 100 0 140 120 100 80 60 40 20 0 180 160 140 120 100 80 60 40 20 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 C O N S I S T E N T G R O W T H SINCE 2002 Executive Management Steven W. Berglund President and Chief Executive Officer Rajat Bahri Chief Financial Officer Richard A. Beyer Vice President Mobile Solutions Bryn Fosburgh Vice President Engineering and Construction Alan R. Townsend Vice President Field Solutions Dennis L. Workman Vice President and Chief Technology Officer Advanced Devices Ann Ciganer Vice President Strategic Policy Joseph F. Denniston, Jr. Vice President Operations Mark A. Harrington Vice President Strategy and Business Development Debra Hirshlag Vice President Human Resources Irwin L. Kwatek Vice President and General Counsel Michael W. Lesyna Vice President Business Transformation Bruce E. Peetz Vice President Advanced Technology and Systems Julie Shepard Vice President of Finance John E. Huey Treasurer Board Of Directors Robert S. Cooper, Ph.D Chairman Aerospace Business Consultant Steven W. Berglund President and Chief Executive Officer Shareholder Information Corporate Headquarters Trimble Navigation Limited 935 Stewart Drive Sunnyvale, California 94085 Phone: (408) 481-8000 www.trimble.com John B. Goodrich Secretary Chief Executive Officer MaxSP Corporation William Hart Venture Capital Investor and Business Consultant Ulf J. Johansson, Ph.D Director Telefon AB LM Ericsson Bradford W. Parkinson, Ph.D Professor (Emeritus) Stanford University Nickolas W. Vande Steeg Chief Operating Officer Parker Hannifin Corporation Independent Auditors Ernst & Young LLP Palo Alto, California Transfer Agent & Registrar American Stock Transfer & Trust Company 59 Maiden Lane Plaza Level New York, New York 10038 1 (800) 937-5449 Investor Relations Contact (408) 481-7838 investor_relations@trimble.com Additional Information 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 Trimble Investor Information Traded: The NASDAQ Stock Exchange Symbol: TRMB ©2007, Trimble Navigation Limited. All rights reserved. Trimble, the Globe and Triangle logo, AgGPS, EZ-Guide and TrimTrac are trademarks of Trimble Navigation Limited regis- tered in the United States Patent and Trademark Office. Autopilot, TrimView, Trimble Outdoors and VRS are trademarks of Trimble Navigation Limited. All others trademarks are property of their respective owners. P/N: 022540-026 T R I M B L E A N N U A L R E P O R T 2 0 0 6 International Sales Centers Europe Trimble Benelux Meerheide 45 5521DZ Eersel Netherlands Trimble France 32, rue de la Fontaine du Vaisseau 94120 Fontenay-sous-Bois France Trimble Germany Am Prime Parc 11 65479 Raunheim Germany Trimble Italy Cento Torri Bianche Palazzo Larice, 3 20059 Vimercate (MI) Italy Trimble Russia 23, 1st Tverskaya-Yamskaya Moscow, 125047 Russia Trimble Spain Via de las Dos Castillas No. 33 Atica, Edificio 6 Despacho B-2 28224 Pozuelo de Alarcon Madrid Spain Trimble Nordic Box 64, Rinkebyvägen 17 182 11, Danderyd Sweden Trimble UK Trimble House Meridian Office Park Osborn Way, Hook Hampshire RG27 9HX United Kingdom International Sales Centers Middle East Trimble Dubai LOB 14 Office 322 PO Box 17760 Jebel Ali Free Zone, Dubai United Arab Emirates International Sales Centers Asia and Pacific Rim Trimble Australia Level 1/120 Wickham Street Fortitude Valley QLD 4006 Australia Trimble China Beijing Representative Office Room 2602-05, Tengda Plaza No. 168 Xiwai Street Haidian District Beijing 100044 China Suite 7-B, Jinlinghaixin Building 666 Fuzhou Road Shanghai 200001 China 311 Fute (M) Road, 3/F Wai Gaoqiao Free Trade Zone Pudong, Shanghai 200131 China Trimble India SF – 04, JMD Regent Plaza M.G. Road Gurgaon 122001 New Delhi India Trimble Korea 10F, Dongsung Bldg., 158-24 Samsung-Dong Gangnam-Gu, Seoul 135-090 Korea Trimble Singapore 80 Marine Parade Road 22-06, Parkway Parade Singapore 449269 International Sales Centers The Americas Trimble Canada 208 Evans Avenue, #104 & 204 Toronto, Ontario M8Z 1J7 Canada Joint Ventures Caterpillar Trimble Control Technologies LLC 5475 Kellenburger Road Dayton, Ohio 45424 Nikon-Trimble Co., Ltd. Technoport Mitsuiseimei Building 16-2, Minamikamata 2-chome Ota-ku Tokyo 144-0035 Japan Corporate Headquarters Trimble Navigation Limited 935 Stewart Drive Sunnyvale, California 94085 United States Operations Trimble Tempe 7850 South Hardy Drive, Suite 122 Tempe, Arizona 85284 Trimble Rockies 10355 Westmoor Drive Westmoor Technology Park Building 4 Westminster, Colorado 80021 Trimble Dayton 5475 Kellenburger Road Dayton, Ohio 45424 Trimble Chantilly 3650 Concorde Parkway, Suite 150 Chantilly, Virginia 20151 @Road, Inc. 47071 Bayside Parkway Fremont, California 94538 Advanced Public Safety, Inc. 500 Fairway Drive, Suite 204 Deerfield Beach, Florida 33441 Apache Technologies, Inc. 8261 State Route 235 Huber Heights Dayton, Ohio 45424 Eleven Technology, Inc. 119 Mount Auburn Street 4th Floor One Mifflin Place Cambridge, Massachusetts 02138 Meridian Project Systems, Inc. 8775 Folsom Corners Folsom, California 95630 MobileTech Solutions, Inc. 19111 N Dallas Parkway Suite 350 Dallas, Texas 75287 Pacific Crest Corporation 990 Richard Avenue, Suite 110 Santa Clara, California 95050 Tripod Data Systems, Inc. 345 SW Avery Avenue Corvallis, Oregon 97333 XYZ Solutions, Inc. 2500 Northwinds Parkway Suite 625 Northwinds Business Center Alpharetta, Georgia 30004 Americas Regional Fulfillment Center 5475 Kellenburger Road Dayton, Ohio 45424 International Operations Trimble TerraSat Haringstrasse 19 D-85635 Höhenkirchen- Siegertsbrunn Germany Trimble Jena Carl-Zeiss Promenade 10 D-07740 Jena Germany Trimble Kaiserslautern Am Sportplatz 5 D-67661 Kaiserslautern Germany Trimble New Zealand 11 Birmingham Drive P.O. Box 8729 Riccarton, Christchurch New Zealand Trimble Sweden Box 64, Rinkebyvägen 17 182 11, Danderyd Sweden @Road, Ltd. Level 8, 15 Talavera Road North Ryde NSW 2113 Australia @Road, Ltd. 901 (A1) & 902 (A2), Tidel Park No. 4 Canal Bank Road Taramani, Chennai 600 113 India @Road, Ltd. North Felaw Maltings Ipswich IP2 8HE United Kingdom Applanix Corporation 85 Leek Crescent Richmond Hill, Ontario L4B 3B3 Canada Inpho GmbH Smaragdweg 1 70174 Stuttgart Germany Trimble GeoNav An der Feldmark 16 D-31515 Wunstorf Germany Meridian Project Systems, Inc. 221 West Esplanade 3rd Floor, Suite 300 B.C. Rail Centre, North Vancouver British Columbia V6E 3V7 Canada Quantm, Ltd. Level 4, 333 Flinders Lane Melbourne VIC 3000 Australia Visual Statement, Inc. 1055 Dunsmuir Street, Suite 2300 PO Box 49122 Four Bental Centre, Vancouver British Columbia V7X 7J1 Canada European Regional Fulfillment Center Meerheide 45 5521DZ Eersel Netherlands T R I M B L E A N N U A L R E P O R T 2006 J U S T T H E F A C T S FOR S HARE HO LDE RS 

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