Good afternoon. My name is Christine, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Trimble Third Quarter 2015 Earnings 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. Thank you. James Todd, Director of Investor Relations, you may begin your conference.

Good afternoon. I'm here today with Steve Berglund, our CEO; and Francois Delepine, our CFO. Before we begin, I'd like to remind you that the forward-looking statements made in today's call and 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 detailed in the company's Form 10-Ks and Form 10-Qs or other documents filed with the Securities and Exchange Commission. During this call, we will refer to a press release, which is available along with additional financial information on our website at www.trimble.com. The non-GAAP measures discussed in the call are reconciled to GAAP measures in the tables to our press release. Now let me turn the call over to Steve. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Good afternoon. The third quarter result was encouraging in that it reaffirmed our forecast methodology, conformed to traditional seasonal patterns and supported the scenario for 2016. Although the conditions that have affected us during 2015 will continue to constrain fourth quarter and first quarter results, we continue to anticipate 2016 to be an improved story. The particular points of emphasis for 2016 remain the restoration of growth and the strengthening of operating margins. The most significant effects on 2015 revenue growth have been agriculture, foreign exchange and the effects of oil prices on Geospatial. If we define 2015 baseline revenue as the roughly 70% of Trimble's revenue, that excludes agriculture and Geospatial, that baseline has grown approximately 4% year-to-date on a constant exchange rate basis, excluding acquisition effects. Incurring this baseline into 2016, we currently anticipate both foreign exchange and Geospatial as being part of the year-to-year dialogue after the first quarter as we lap the effects. Although conditions in…

Your first question comes from Jonathan Ho from William Blair. Your line is open. Jonathan F. Ho - William Blair & Co. LLC: Hi, this is Jonathan Ho. Just wanted to start out. You guys talked about 70% of the business, I guess everything excluding agriculture and Geospatial growing by about 4% organically this year despite, as we know, a very challenging environment. I just wanted to understand what some of the drivers were that allowed the business to grow and what your expectations are in a more normalized environment for what these non-Geospatial and agriculture segments should be growing on an annual basis? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah. So, I think that – I think what, in those business excluding Geospatial and agriculture and then compensating for exchange rates, I think I would generally say what we've seen in the first nine months of this year is kind of our baseline for projecting into 2016 in terms of regionally and otherwise. So, I would say is it – kind of that 4% number provides our foundation for starting to consider net changes into 2016. So, I think, again the relatively strong points in that were building construction and transportation and logistics, okay. Within E&C, we've got some headwinds on Heavy Civil, but by and large, I think that that – looking into 2016, we're not anticipating kind of any net change other than we expect kind of at the regional level and in terms of new products and such, probably more contribution from Heavy Civil during 2016, more contribution or less of a drag, more contribution from Field Services. And so, I think that that's why we're relatively comfortable talking about growth into 2016 and then just kind of doing the…

Your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is open. Jerry David Revich - Goldman Sachs & Co.: Good afternoon. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Good afternoon. Francois Delepine - Chief Financial Officer & Executive Committee Member: Hi, Jerry. Jerry David Revich - Goldman Sachs & Co.: I'm wondering if you could talk about the timing of the leaning out of the organization structure, Steve, that you laid out. Some of it sounds like it will be sooner benefit than other pieces. Can you just calibrate us and the ultimate opportunity once you're through those efforts? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah. Well, I think we talked about, let's call it, the more tactical cost adjustments in – after both the first quarter and second quarter. I would say substantially most of the work in those has been done. Some will occur in fourth quarter, just some natural legs built in. I think in terms of this use of the word leaning out, I think that some of this is to portray that over time that the process will continue. So, in terms of organizational realignments, some of those will take more than a year to implement. And so, I think that – there is no endpoint per se in terms of what we're doing. The $30 million that we talked about in the first quarter and second quarter, I think will – is substantially done, will be fully complete by year-end. But then in parallel, I think there are these more strategic elements that will continue through time. I don't want to get overly precise about how much of the magnitude they will be. But certainly would like…

Your next question comes from the line of Andrew Spinola from Wells Fargo. Your line is open.

Thank you. I wanted to ask a question about the business construction sub-segment. That sub-segment has sort of evolved over the last couple of years as you've made some acquisitions. And I was wondering if we could just step back and maybe talk about that sub-segment and maybe give us a sense of how – what's in there other than Tekla at this point? What are the growth drivers there? Is it low penetration? Is it sort of a cyclical bounce in commercial construction right now? And maybe just from a higher level, what part of that business is software as a percentage and what's the – how much of E&C is business and construction these days? Thank you. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Sure. Probably not going to be terribly helpful in terms of exact percentages at the segment level, but let me try to give you a sense. What we call building construction is actually an attempt to capture kind of a whole work process, from design through build through operate. So, at the front end of that would be SketchUp, which was acquired from Google a number of years ago, to capture the design or pre-design, for that matter, but more the architect, and taking that information that is developed during the design process into the build with the user being the contractor, whether it be the general contractor or the individual trade. So within that category, for example, you see we have a mechanical electrical plumbing-focused business. We have a business focus – business element focused on general contractors. In there, we have more – in between is Tekla, which is really focused on steel and concrete BIM design and then ultimately to enable us to take the data…

Fair enough. And just one other for me, switching gears a little to ag. With all the commentary around ag, I think you'd made the comment previously that you – you thought 30% for the – that segment was going to be the base for the margin profile. And I'm just wondering is, I know this is weaker this quarter obviously on lower revenue, but can you help us understand what's driving that, at least in that quarter? Is there any issues around pricing and is 30% still a good baseline for the ag segment? Thanks. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah. So I think that – yeah, certainly margin has been under pressure just because of the scale effect. I would say the core of that segment is agriculture. I think we remain comfortable with 30% operating margins for agriculture, GIS and the other components in that – in that segment are maybe putting some pressure on the segment level. But I think overall for agriculture, kind of the core of the segment, we still kind of see 30% – our commitment is to 30%. But as far as pricing pressures, no real – no real pricing pressures, no new pricing pressures. Pricing really isn't the dynamic in that market at this point in time. So, pricing is pretty stable. So, I think it's mostly – margin management here is mostly kind of on the cost side, not necessarily on the pricing side, other than foreign exchange, of course.

Got it. Thank you.

Your next question comes from the line of Ian Ing from MKM Partners. Your line is open.

Yes, thanks, Steve. My first question is on this organizational realignment that you detailed today. You do have this history of tuck-in acquisitions, quite a few. The argument is, these targets have access to more scale and more resources that Trimble has to offer. But given the challenging environment, do any of these acquisitions stand out, either more on the – a more disappointing side or more surprisingly positive side? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: I think it certainly is a range value of – on a continuum, I would say that we've been pretty public about talking about the challenges of Manhattan Software, which is a relatively sizeable acquisition on our scale, roughly a year ago, and kind of converting deferred revenue into recognized revenue has been the central challenge at Manhattan Software. So, I would say if I were to kind of construct a continuum here, Manhattan Software, I would not describe it as a disappointment. I would describe it as a challenge. And so, I think it's a strategically sound investment that will pay off, again, in terms of its design, build, operate spectrum. In terms of – at the other end of the continuum, just to create a range value here, I would point back a few years, I think PeopleNet and TMW have turned out to be a significant combination, acquired separately, but we're integrating the two. And I would point back to the PACCAR win that we talked about last quarter, as probably not having been possible without that particular combination. So, I think that would be a strong plus. Tekla has been a strong plus both in terms – from a financial standpoint and in terms of kind of strategic significance about positioning us in a…

Thanks for that. And then for my follow-up, what are the different scenarios in the near term for this federal highway bill to progress? It looks like the House completed the markup of their version. It looks like all political parties want to get some version passed, but there's a lot of uncertainty on how to fund it, how do you see the different scenarios play out and what it means to Trimble? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Well, I guess, I – for the moment, will more or less defer to the pundits on the issue. I think probably, the actions this morning in Washington were net-net positive to the probability of something happening. But I think that I – here is the case where I – as far as I can detect, everyone in Congress wants to pass a highway bill. And they are getting hung up primarily over how to fund it and that is looking reasonably etiological at the moment. And so, I'm not in a position to make – make the call in terms of what the probabilities are. But I would say – I would be more hopeful today than I was two days ago relative to the prospects, but I don't know how to put a weighting on it. And again, I think that if Congress did pass multi-year funding for the highway bill, it would have a relatively instant impact on Trimble because it would – it would change the investment climate for those contractors who are engaged in highway work. Right now, they are limping from quarter-to-quarter basically, not seeing a kind of a strong funding path. If they saw in a multi-year funding, there would be something to compete for. The way that they would compete would be through technology. I think our phones would start ringing within 24 hours or 48 hours of Congress passed the bill and the President signed it.

Thank you.

Your next question comes from the line of Richard Eastman from Robert W. Baird. Your line is open. Richard C. Eastman - Robert W. Baird & Co., Inc. (Broker): Yes, good afternoon. Steve, could you just kind of talk for a minute or two about the oil and gas exposure and your ability to track that exposure through your Geospatial business, and I guess to a lesser extent the Heavy Civil? But do you – first of all, is there – there's not really a direct number that you can track to the downturn in oil and gas, in terms of where those products go. But do you feel like you've got a good – your arms around, the secondary impact? And the fact that you commented about calendar 2016 being up kind of low single-digits in Geospatial and Heavy Civil, I mean, do you sense that secondary impact is bottoming here at year-end? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah, if you heard low-single-digit, I think I said single-digit. So, if you heard low, either I misspoke or you misheard. But I think single-digit and I'm not necessarily characterizing as low-single-digit at the moment, by the way. But, yeah, so there are two – I think, there are two numbers associated with oil price. And okay, we're seeing it in Geospatial primarily. One is a number we can identify with some relative certainty. And so, in the fourth quarter call last year, you heard us, I think, talking about 1% of revenue or $25 million, maybe $30 million. That is fairly directly tied with the oil industry, which is the use of our stuff in oil exploration. And so, during the fourth quarter last year, we saw that kind of evaporate in a…

Your next question comes from the line of Brett Wong from Piper Jaffray. Your line is open. Brett W. S. Wong - Piper Jaffray & Co (Broker): Hi, guys, thanks for taking my questions here at the end. Just wondering, Steve, I know you've talked a bit about this already on the call. But as you look at the kind of mid-single-digit expectation for growth next year within the Heavy Civil and Geospatial, can you just talk to your conviction or why you expect that kind of growth given some of the other people in the industry, including your partner in that industry, are expecting kind of a flat to down year next year? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Okay, well, not sure which partner, but I'll pick two partners, Caterpillar and C&H. And one – so it starts from the premises that we're not an OEM. We sell – we sell ROI, we sell productivity, we sell yield incrementally. So, in effect just saying, okay, what the OEMs are doing is indicative, but not necessarily the total definition of what we do. And in particular, the two areas we're pointing at most strongly for sources of growth, T&L and building construction are basically OEM-independent, by and large. The PACCAR deal is nice, but we're largely OEM dependent in those two areas where we're expecting to grow. I think just kind of dissecting numbers, I think Cat has a major exposure to mining, and we don't. So, I think in terms of comparing Caterpillar to us, there needs to be – you need to do some conversions to get apples-to-apples. And I'd say the mining element is one major reconciling item. I'm not sure what they're saying about their engines business, but that…

Your next question comes from the line of Eli Lustgarten from Longbow. Your line is open.

Good afternoon, everyone. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Hi, Eli.

Actually, Caterpillar is very complimentary of you guys in talking about growth opportunities and getting business as opposed to (1:00:49) as a partner? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: We noticed that.

Yeah. And that – can we talk – I mean, you've gone through a lot of material, market conditions, restructuring and stuff, can you talk about new products development spending and what's going on? In particular, you think about, with a lot of problem to the ag business, the competitive landscape has changed (1:01:15) and you are in the other one. And you have a lot of new products, you talk about a bunch of new products. Same thing is happening in Mobile – in Mobile Solutions, I guess you had deals with PACCAR. So, obviously, the whole host of suites in the E&C business. If you can talk about, with all the cutback that's going on, what's your new product spending is doing, development as we look at this year and next year? And are we really – is there a chance that we're looking at maybe some heavier investments next year as market begins to hopefully stabilize or further growth? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah. So I think the starting from Trimble at the 30,000 foot level is, I think the Trimble model with the composition business as we have in this company at this point in time, I think our general model is that, R&D spending is 13% to 14% of revenue is appropriate now. Okay. We've got to produce growth rates that are consistent with that number, obviously. But that would be our view at the moment, it's 13% to 14%. And so, I think we're taking the long view. We're taking the long pull on the ore and not kind of – we have thinned out R&D, but mostly with the idea of improving the relative leverage out of R&D. But the cost cutting we're talking about…

Just a quick follow-up. I think during the presentation, you started talking about software subscription and the percent of the business and, I don't know whether I heard 45% or not. With software subscription, what percent of the sales and business is now and, if you looked out three years, what do you expect that to be for the company? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Yeah, fair question and, but I don't have a, let's call it, an overly precise answer. I think it will tend to go up, but we're not targeting a number. I think we're really talking about what's necessary to kind of meet the needs of the user as the first priority. And so, I don't think we're targeting a number. Could I see that number being 20 points higher in a few years? Yeah, I could see that. But I don't think – we're not targeting a number, so I really don't have a number to share with you.

Where is it now, what percentage? Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Well, what we said was the combination of software services and recurring is over 45%.

Okay. Thank you very much guys. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: You bet.

We will now turn the call back to the presenters. Steven W. Berglund - President & Chief Executive Officer, Executive Committee Member: Okay. Thanks for attending, talk to you next quarter. Thanks.