Good afternoon. My name is Molly and I will be your conference operator today. At this time, I would like to welcome everyone to the financial results for Q3 2009 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Ms. McManmon, you may begin your conference.

Good afternoon. I am here today with Steve Berglund, our President and CEO; and Raj Bahri, our CFO. Before we begin, I'd like to remind you that the forward-looking statements made in today's call in the subsequent Q&A period are subject to risks and uncertainties. Trimble's actual results may differ materially from those currently anticipated due to a number of factors including the competitive nature of the marketplace, the condition of the worldwide economy and other factors detailed in the company's Form 10-Ks and 10-Qs or other documents filed with the Securities and Exchange Commission. During this call, we will refer to a press release. The press release and additional financial statements are posted on our website at www.trimble.com. The non-GAAP measures discussed in the call are reconciled to GAAP measures in the tables on a press release. Let me now turn the call over to Steve.

Good afternoon. The third quarter, while not yet compelling from a financial perspective, provided us with the first unambiguous signs of recovery in some of our markets. Although, we were modestly below our overall revenue target, we saw a marked revival of some of our core E&C markets in U.S. from the levels we encountered earlier in the year. While the remaining U.S. and European economic uncertainties make precise forecasts difficult, these sources of recovery enable us to anticipate double-digit company revenue growth in 2010 with the disproportionately positive affect on earnings. The Engineering and Construction segment continues to reflect ongoing and widespread difficulties, but is also demonstrating improved willingness by some of our users to invest in technology. In the U.S., we are seeing increased resiliency in our heavy and highway markets as well as our surveying instruments business. This improvement is occurring without much identifiable impact from the stimulus package. The commercial building and residential markets remained sidelined at this point, although we are hopeful that the improvement and survey instrument sales are leading indicators to some improvement in these areas as well. The European and international markets remained mixed with the exception of China, which continues to be a source of strength. While recognizing the still weekend and volatile state of the economy, we now believe the E&C segment can grow in reasonable double digits in 2010. Any revenue increase coupled with the cost-cutting already taken will allow earnings to grow significantly faster than revenue. The Field Solution segment reflected a decline in agricultural revenue year-to-year and offset the improvements we saw in E&C. The slower agriculture market has resulted from the tighter credit conditions in markets such as Brazil, weather conditions in some countries and a reaction of farmers to the general economic uncertainties. Despite the…

Good afternoon. Today, we announced third quarter revenue of $269.7 million, down approximately 18% from revenue of $328.1 million in the third quarter of 2008. GAAP operating income for the third quarter of 2009 was $20.2 million, down approximately 63% from the third quarter of 2008. The operating margin in the third quarter of 2009 was 7.5%, as compared to an operating margin of 16.5% in the third quarter of 2008. Please note that we have provided a detailed table of the items included in the GAAP to non-GAAP reconciliation in our press release issued this afternoon. Non-GAAP operating of $40 million was down 43% compared to the third quarter of 2008. Non-GAAP operating margin was 14.8% in the third quarter of 2009 compared to 21.3% in the third quarter of 2009. The margin decline was primarily driven by revenue decline, partially offset by operating expense reduction. Third quarter 2009 GAAP net income was $15.6 million, down 60% compared to the third quarter of 2008. Diluted GAAP earnings per share for the third quarter of 2009 were $0.13 compared to GAAP diluted earnings per share of $0.31 in the third quarter of 2008. Non-GAAP net income of $30.2 million for the third quarter of 2009 was down 40% compared to the third quarter of 2008. Non-GAAP diluted earnings per share for the third quarter of 2009 were $0.25 compared to non-GAAP diluted earnings per share of $0.40 in the third quarter of 2008. The tax rate in the third quarter was 27%. Cash flow from operations continues to be strong at $30 million for the quarter. By geography in the third quarter, 57% of our revenue came from North America, 21% from Europe, 16% from Asia-Pacific, and 6% from rest of the world. Revenue declined 15% in North America, 26%…

(Operator Instructions). Your first question comes from the line of Michael Cox with Piper Jaffray.

My first question is on the E&C side of your business. Looking at the prospects of double-digit revenue growth, I was wondering if you could comment on the incremental margin contribution of revenue growth given some of the cost-containment efforts you've taken this year.

Yeah. So, I think convert again into amount of fairly straight forward arithmetic without a whole lot of necessarily deep insight, but we've got a 50% gross margin. And so if we just use that as the actual incremental gross margin might be a bit higher. The question is how much of that do we drop to the bottomline on any sort of revenue recovery. So, I think the topside will be 50%. I think if you look at us historically in strong operating leverage quarters, we intended to do 32% to 35%. So, I would say depending on exact circumstances, the exact nature of it coming out of this in the early stages, I would expect to see between 30% and 50% marginal operating leverage coming out of it. So out of every dollar revenue that we'd be dropping somewhere between $0.30 and $0.50 to the bottomline, again, depending on the precise circumstances.

Within the Mobile Solutions segment now that the churn seems to be well under control and you're filling the pipeline with your own contract wins here recently. Could you talk maybe a little bit about what perhaps even a longer term margin profile of that Mobile Solutions business could look like as these contracts are converted?

So I think from the very beginning, we've been slow to execute. But from the very beginning, I think we've always viewed this market as being, let's call, somewhere in the range of a 20% to 30% operating margin business, but certainly in the 20%, we'll see if we can get it above 25%. Again, much the same sort of argument that once you get the recurring streams to be a substantial part of the business, they carry with them very substantial gross margins often times in excess of 60%. If you can control your costs below that, again, it can be quite a profitable business. Today is the revenue still has a fairly heavy hardware component associated with it, which tends to bring down the incremental margins. So, again, I think as steady state, I would expect to see an operating margin in and a fairly broad range, but somewhere between 20% and 30%, I guess where we'll find that when we get it to 20%.

My last question is on the build of cash. I understand that you have very low-cost debt on the balance sheet, no need to move that off. But just be curious that how you are prioritizing the use of cash given the position you are in now?

Again, I think our priority is to productively use the cash within the business. So, I think that we now have a nine or 10-year tradition of making relatively small fill-in acquisitions. I would expect that to continue to be our style, unless circumstances change, but generally, I would expect us to have a fairly small but fill-in acquisitions. Beyond that, I think that our management's view is that cash is not necessarily a productive asset. We wouldn't necessarily want it to build up as a low return asset. So, I think that as circumstances change and that we do build up additional cash, I think we'd at least reconsider going back to a buyback as a secondary use of cash beyond and acquisitions.

Your next question comes from the line of Jeff Evanson with Dougherty & Company. Jeff Evanson - Dougherty & Company: Raj, could you talk a little bit about why the TMS operating margins were down sequentially? There were just some ramp-up costs there of your recent deals or what?

Initially, we are installing hardware which gives us the hardware margin which is tends to be not as great as the recording revenue margin. So, it was slightly down, but it was primarily, Jeff, driven by mix. As a trend line, I would expect it to increase sequentially now starting in Q4. Jeff Evanson - Dougherty & Company: Okay, so mix shift towards hardware in the quarter.

A little bit mix shift towards hardware. Yeah, but I expect it to sequentially go up now every quarter. Jeff Evanson - Dougherty & Company: Can you tell us how many BT units you deployed in the quarter?

No. I think we just assume to keep that to ourselves. Thank you. Jeff Evanson - Dougherty & Company: Raj, what was the impact of acquisitions in the quarter to revenue growth?

Revenue, around two points of growth. Jeff Evanson - Dougherty & Company: Two on a basis points?

Yes. Jeff Evanson - Dougherty & Company: Mostly in E&C?

No. I had some acquisitions we bought. Since last year we bought around three to four companies in Ag. Jeff Evanson - Dougherty & Company: Okay. So...

Ag was the big impact in acquisitions and E&C is secondary. Jeff Evanson - Dougherty & Company: Okay. You talked about the $0.02 for SITECH...

Yeah, Jeff Evanson - Dougherty & Company: Is that expense included in your guidance?

It is included in our guidance. That's why without that, we would have expected our guidance to be $0.02 higher. Jeff Evanson - Dougherty & Company: $0.02 higher good, very good. Then Steve, two questions for you. I'd be curious to know if you think it would be possible for E&C to actually even post some growth in the Q4 on a year-over-year basis. If you could give us an update on how the SITECH and the joint venture agreements are coming together?

So, I think E&C probably will post growth in the fourth quarter. I think the relative paradigm for the fourth quarter versus the fourth quarter last year is E&C growth and I think a certain amount of caution in agriculture. But I think at this point in time, we've kind of left the year here and we're now dealing with kind of the disaster of last year. So, I think we're back in a mode where we're anticipating over a year growth in E&C. As far as SITECH and the virtual site activities, without a doubt SITECH, I guess the comparison point of a year ago when we launched it, they are still rolling out. We have greater than 10 SITECHs in place at this point in time. We've got two or three times that number in play at this point. So, there is lots of activity but I think that the mind share gap that was created a year ago with kind of the meltdown has slowed us down. But I think that we're now getting back on track and I think that over the next six months, we should be landing a fair number of these. So, I think that we're on track, but we're certainly behind where we thought we would be a year ago. But everybody has been dealing with the aftermath of the economic meltdown. Generally, I would say in terms of product development of putting the joint venture together, it was really to take the software from Caterpillar called equipment manager and combined it with Trimble construction manager and come out with an entirely new suite of software. I would say we are on track there, and I would say that during 2010, in fact, in the first half of 2010, there will be substantial progress shown in terms of the new product there. So, I would say product wise, we're more or less on the timescale that we had laid out a year ago. On the distribution side, we're moving slower, but largely because everybody took six months to just deal with the aftermath of this economic meltdown. Jeff Evanson - Dougherty & Company: Just drill down very quickly on that just for a second, can you give us some sense of when we might see data recording devices deployed on OEM machinery? Could that be the first half of 2010 or back half of 2010?

Well, I'd qualify that by saying, in terms of data devices able to deal with the new software, I would say is in general and this is actually a complicated question and a simple answer. I would say is that you should be seeing outcomes from that in the first half of 2010.

Your next question comes from the line of Yair Reiner with Oppenheimer & Company. Yair Reiner - Oppenheimer & Company: Steve, you mentioned that you've started beginning to see unambiguous signs of recovery in the U.S. I was wondering if you might be able to share some anecdotes that give you comfort with that thesis?

First of all, let me qualify, better is not necessarily good. So, if things are better, I wouldn't necessarily call them good out there. But against the standards that was set in the fourth quarter, particularly in fourth quarter and first quarter last year and early this year, we've definitely seen a bounce in the U.S. from the levels that were established there. The second quarter was more confused. But I think in the third quarter, we can properly characterize what we see was a bounce from the level that we saw earlier in the year. It does not have the same kind of convincing feel that, say, the fourth that we encountered later in this last half of 2002. So I think this one is going to be a more drawn-out affair than what we saw coming out of the recession, 2001-2002. But again, I think that we saw a pretty convincing bounce in the U.S. on survey instruments, which we're a having a difficult year anyway in 2008 even before September 15th. So, we saw a fairly significant bounce in revenue in the U.S. The other places I said, that we saw it was in heavy and highway, again, were nowhere as close to the peak levels we saw in 2007. But against the levels of, now a year ago and early 2009, we are definitely seeing recovery there. I think kind of the products that are more related to commercial building and housing, I think that's yet to come. Yair Reiner - Oppenheimer & Company: In terms of China, that's obviously been a source of strength for you for a while now. When you look at the projects that are in the pipeline and around a corner, do you think that China and maybe Asia generally can continue to provide some tailwind in 2010?

Yeah. I think we're counting heavily on that. I think the plan in China is really two-fold kind of two dimensional. One is for the places where we've always had a product position in China, particularly, survey instruments in some aspects of China. Construction, I think yeah there is still a lot of market lift a lot of building, a lot of infrastructure build still to go in 2010. But I think the thing that's as interesting if not in a longer term more interesting is we're starting to get leverage in those product areas where we've really never had much of a participation in China, so, for example, Mobile Resource Management, GIS utilities as a category. So, we're both broadening our base as well as having success in our traditional products in China. So, I think that we are building, what I would call, a long-term platform in China, not risk-free, but we are building a platform in China that I think leads to long-term success not just something that's related to a momentary construction boom. Yair Reiner - Oppenheimer & Company: Just one more question for Raj and then I'll see the floor. Raj, the $0.02 impact next quarter from the JV, where would that appear in the income statement?

I mean we consolidate this JV. So, it will be part of our operating income. It will show up in operating expenses. Yair Reiner - Oppenheimer & Company: In the operating…

Just to make sure, you know, so Q1 we expect that it will not repeat in Q1. So, Q1 we will actually see a reverse, that $0.02 somewhat come back. Yair Reiner - Oppenheimer & Company: So, essentially, there is going to be $0.02 worth of a step-up, one-time step-up in SG&A.

Yeah, that's right. That's right.

Your next question comes from Ajit Pai with Thomas Weisel.

This is actually Andy Young standing in for Ajit. Just a couple of quick questions. The first one is your international effort. Can you give some colors in term of what other things you are doing outside of China?

You mean international in general outside of China?

Right.

There are actually a number of things. So, first of all, our effort in India is also taking a substantial step-up in terms of scale and scope is. A couple weeks ago, we had a road show in China where every Trimble Business travel China, sorry, India. Every Trimble business traveled around India and presented the company just to raise our collective company brand in India. We are stepping up the number of sales resources we have in India. We now have over 200 employees in India. So, we already have presence in India. So I think India, which will be a longer term developing process than maybe China, but with substantial opportunity. So, I think India is one place where we are significantly increasing our presence from a point that wasn't all that impressive a few years ago, we're highly engage with the market at this point in time. But then even in places like Africa and North and South Africa, we have a growing presence. We see Africa as being of interest, because there is a substantial emphasis on infrastructure build taking place in Africa and hence survey instruments to establish property lines, reference systems to enable that survey and to take place ultimately, construction both for building and road construction but also for mining. So, there is a great deal of activity in Africa and we believe that can be a growth market for us. So, in the last few months, we've actually opened a sales office in Nairobi. I suspect we, maybe, the only Silicon Valley company with an office in Nairobi, Kenya. So Africa as a place is of interest to us. Then Russia is a place where we recently named the country manager there. We're upgrading our infrastructure, organizational infrastructure Russia for the long-term and there'll probably be more news on that in the next six to nine months, again, a long-term play. Obviously, Russia is fairly volatile depending on the price of oil, but viewing that as a long-term developmental effort on our part. So, those are what I would call a cross-selection of geographies, but in reality, I think that we're viewing the growth potential of the next five to 10 years to be more heavily weighted outside of our traditional comfort zone of Western Europe and North America. So, we are actively redeploying resources out of Western Europe and North America to these places, in some sense taking advantage of the slowdown to reconsider just where our resources are. So, substantial increases in resources in all those places.

As you look for to 2010, you mentioned that you expect double-digit growth. So do you still expect Asia and other emerging markets leading the growth and then followed by United States, North America and then Europe is still lagging behind?

Well, yeah. I think in terms of the last statement, I think Europe is definitely going to trail the U.S. out of this. Europe is a collection of anecdotes, some positive, some negative but in general Europe is still I thinking lagging the U.S. in terms of the recovery profile. I think probably statistically when it comes specifically to 2010 maybe the U.S. will be the larger part of the story just in terms of putting numbers on the board. As the U.S. starts to recover, it will probably do more on the short-term to boost us. But, I will say longer term is a statement, but the rest of the world is still meaningful which is over the next five years, I think the non-traditional markets will lead the way in terms of growth. But in 2010, maybe the U.S. will probably feature more in the story just as it recovers and gives us back some of the numbers we lost in 2009.

One final question about foreign exchange. What do you see a the impact of foreign exchange on your sales, sales growth, and also in terms of margins?

Sure. Actually if you look at last year versus last year at the same time, dollar was a bit stronger than last year and slightly so that hurt our sales by a little bit, by a point-and-a-half. So pretty much what we gained in the acquisitions we lost in foreign exchange on our sales and we've clearly closed the naturally hedged on the cost of goods sold because we have lot of R&D and expenses in Europe, so it didn't have an impact on the operating income line.

Going forward, you expect the same type of sensitivity to...

I think the dollar has weakened in October or somewhat. So, that may sequentially help us somewhat in this revenue side, but again on the operating income side, we don't expect it to move the needle.

Your next question comes from the line of Alex Blanton with Ingalls & Snyder. Alex Blanton - Ingalls & Snyder: If you've already answered this, because I had to step away for a few minutes, but in looking at next year 2010, how much are your expectations, which gave us in pretty good detail, depending upon a recovery in the underlying equipment business out there, such as Caterpillar and elsewhere. How much is simply additional applications? In other words, could your forecast be affected if, let's say, there were a renewed recession and that there was no to recovery in the heavy equipment business in 2010?

What we're talking about here is to a large extent not terribly tied to the equipment cycle. Again, our fundamental value propositions that we sell productivity we don't sell capacity. So it was called a recessionary environment. I would hope to establish a break between us and the equipment manufacturers or at least there has always been the correlation. This year has been kind of stunning from the fact that it was so bad that everyone went to the sidelines and just order cash and we're not willing to make any kind of investment even in productivity. So, I would say is that our relative optimism in terms of talking about double-digit growth is to a large extent not really tied to the equipment cycle. In fact, I would believe that we should be a leading indicator. There is a lot of capacity out there still to be used up before there is going to be a vigorous recovery in equipment sales, but I think that we go out and we can sell productivity. So, with any kind of return of business confidence in some low level of optimism about the future, I think we can sell into that. And so, I would say, our numbers are not particularly tied to the equipment cycle, the sales of new equipment. Alex Blanton - Ingalls & Snyder: So, you're retrofitting a lot of older equipment is what you are saying?

Yes. Alex Blanton - Ingalls & Snyder: The productivity improvement in 2009, people just weren't spending on Asia. So you expect them to have some improvement in that situation in 2010 regardless of what happens.

Right, right. I think the paradigm we're pursuing is we can walk into either onto the contractor's yard or a fleet manager's yard, walk into the office to the purchasing manager or the person making the procurement decision and say, well, we're really sorry about the fact that 50% of your fleet is parked outside, but let's talk about the 50% you're still using. Let us help you make that 25% or 30% more productive, and I suppose parking additional 10% or 15% of your fleet as a result. But again, in this kind of environment which is for a contractor, for example, construction contractor, the level of competitive intensity in this environment is just orders of magnitude worse than it was two years ago. The survival of that contract is partially going to be dependent upon squeezing out every drop of productivity. So, I think that productivity will sell in this environment short of kind of the knocked down that we've seen for the last So I think we can break the link between sales and us and so on to the existing fleets.

Your next question comes from one of Paul Coster with JPMorgan.

Hi, it's actually Mark Strouse on behalf of Paul. We just want to get your latest thoughts on the potential impacts from the U.S. stimulus plan and how much of the double-digit growth in E&C next year is dependent upon that.

I think, basically, we're not counting on the stimulus as any part of that kind of talk by double digits. I think in reality, and this can be argued maybe successfully both ways. But I think in reality given that in many cases there is a permitting cycle and a regulatory cycle here in the U.S. that can be as long as two years. So, with the launch of the stimulus program in early 2009, it could very well be that much of that stimulus that's might be flowing in our direction will actually show up as a net change element in the later part of 2010. So, I think that we're not basing a whole lot of our view on 2010 on U.S. stimulus showing up. Now, the Chinese stimulus started flowing soon after it was announced. So I think that if the stimulus actually does start to lift things that will be what I would call additional good news beyond anything that we've forecasted at this point.

Your next question comes from the line of [Corey Tobin].

Hi, good afternoon. Let me, if I could, just expand on the last question. Obviously, we are happy to hear about the unambiguous signs of recovery in the U.S. Is Steve and everyone else as you're talking to customers, what are they attributing sort of their increased buying trends too. I mean if its not necessarily stimulus spending taken in, is it just heavy and highway spending by the states or are there are end markets that are starting to see better signs of recovery?

There is project flow of there. Again, it's nothing like what we would have seen two years ago or even a year-and-a-half ago. So this is slimmer pickings than anything we've seen in a while. So, it's better, it's certainly not good. But I think that there is project flow out there. I think a significant difference that of the last six months is that, okay, let's just call a beginnings of the return of business confidence. So, I think six months ago, certainly a year ago, even six months ago, maybe even more recently than that, it was to a large extent is people that in rationally should have been buying. Back to these contractors or fleet managers that I was talking about or even surveyors out there, they were so uncertain about the environment that they just went to the sidelines. And so I think the effect we're seeing a much as anything as that people are actually starting to plan and prepare for the future after taking a hiatus of six or nine months after last September 15. So it's hard to point the finger at any one thing, but I think that it's more a return to a business confidence and our ability and, again, our premises that we can sell into a recession. On September 12th last year, we were selling into a recession with some degree of success. I think with that we can return to that. And as long as there is some project flow, and there is some project flow out there that I think we can stitch together an improving trend. But I think the big lift from the economy is still to come and frankly, we're not really planning on that in 2010. If it comes, it will be kind of very good news to what we've got already have planned.

Got it. And shifting gears for just a second. In the Mobile Segment, we're happy to hear about the sings of the pipeline increasing in Asia, as I think you mentioned earlier. When would you expect to see a material contract coming out of the Asia-Pacific region for Mobile Services?

Well, in reality, the Linfox announcement was an Asian deal. So Linfox operates all over Asia. They have got source strength in Australia. So, Linfox is I think, let's call it the first of the Asian deals and Linfox operates in between five and 10 Asian countries anyway. And so I think that ultimately the expectation is that we'll deploy throughout Asia there so is what I would call the first off hopefully many.

How about specifically in China?

In China, let's just say, we've got dedicated resources on the ground in terms of the MRM space and I guess we'll have to wait to see what happens in China. For the last 12 months, maybe longer than 12 months, we have had dedicated resources in China on MRM. Obviously, it's a different market, and we're doing some learning there but I would hope to have some level of success in a relatively short period of time.

(Operator Instructions). Your next question comes from the line of David Delleo with Canaccord Adams.

Just a couple quick questions with regards to the Field Solutions segments. Looking at Q4, obviously, seasonality is a factor. Is there a potential here that Q4 could be better seasonally due to a late harvest and we could maybe see some of a pickup of what we might have lost in Q3? How are you thinking about margins for the segment in Q4 based on what was reported this quarter?

Yeah. There weather is a constant source of uncertainty. But I am not going to go so far as to try to project what the outcome would be of that uncertainty, but I think, yeah, statistically, I wouldn't necessarily be expecting any late harvest in the U.S. might be compensated by a poor spring in Brazil or something like that. So, I think that there is a little bit of a statistical argument here of weather affects in one country with the offset of weather affects in another country. So I wouldn't necessarily be counting on any one thing to move it. On the margin issue, I'll let Raj maybe add more color, but affectively, I think the cost structure is relatively fixed. So, what you do see as these seasonal affects roll through is the effect of gross margins. I would say as that operating the margins will track seasonally but in a fairly predictable way.

Then as far as year-over-year decline, I mean, are we able to say here that we might have seen the worst of the year-over-year declines here in September in the Q3 quarter or is it kind of too early to tell? I mean how has the Q4 tracked so far?

Overall or in Ag or…

I'm sorry, in Ag.

In Ag. I'd say that we're being cautious about ag at this point in time. Is that again there are an awful lot of moving parts in ag. So I think the way we would characterize -- well, in the script is I tried to kind of paint a picture of a little bit of caution in the fourth quarter and first quarter as it comes to the Field Solutions. I think that in terms of year-to-year comps is definitely get better in the second quarter. So I think, second through the fourth quarter next year, we're feeling pretty confident on. I think we're waiting to see just what the effects are in the fourth and first quarter. So, I think there is a wide range of possibilities here. Partly because the equipment guys can paint one story in ag, but the sales technology hasn't always been consistent with that, consistent with kind of the equipment sales for the picture painted by the equipment guys. Certainly, earlier this year as we broke with the kind of the underlying trends of the equipment guys. That's caught up to us a little bit here in the third quarter. But I think that, certainly, the feel is relatively positive relative to the quarter, but I think we're putting a fair amount of cautionary note on it. So I think what we're counting on here in the fourth quarter is generally rising trend on the construction side and a fair amount of caution being applied to ag until we actually see what the effects are. But certainly over the next year, we remain pretty positive on that.

There are no further questions at this time.

Okay, in that case, thank you for attending. We will talk to you next quarter. Thanks.

Thank you. This does conclude today's conference call. You may now disconnect.