Good afternoon. My name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to the Trimble Fourth Quarter and Fiscal 2008 Conference Call and webcast. 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.

Thank you. And thank you for joining us today. I would like to remind you that during the course of this call we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. The words intend, expect, plan or similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual events or results to differ materially. Important factors relating to our business including factors that could cause actual results to differ from our forward-looking statements are described in our Form 10-Q, 10-K and other filings with the SEC. The company assumes no obligation to update these forward-looking statements to reflect actual results or changes and assumptions or other factors. With that, I will turn the call over to Steve.

Good afternoon. In today's call, we will continue to use the word unprecedented to describe our environment. As a company, we have never seen a change abrupt as the one that has occurred in our E&C market since early September. The first break came in mid-September when demand dropped as a result of the meltdown in the financial markets. While, we believe we had built that change into our fourth quarter guidance, the market further retreated in November, and we did not see the typical E&C surge in December. Total year 2008 really consisted of two distinct periods. The first nine-months were recession conditions and difficult. But even under those conditions, we were able to generate a year-to-year revenue growth of 17%. Non-GAAP operating income growth of 22% and non-GAAP EPS growth of 34%. The short break in the fourth quarter represented a major loss of confidence by businesses, which constitute our primary customer base. This resulted in businesses across the US and Europe cutting back dramatically on investments. In practical terms, the E&C market has shutdown rationale decision making, while awaiting events. At this point we do not have a template to apply and it is not possible for us to reliably forecast the E&C market. Whatever the market conditions, our approach as a company during this period of uncertainty will be based on five tough time tasks. The first task is to strive to maintain our operating margin as a percentage of revenue. Our model was pounded in the fourth quarter and we have taken actions to recover. The primary negative impacts in the fourth quarter were the obvious effect of the revenue decline, product mix and some one-time write-offs. Fortunately, we are not seeing systemic pricing declines although some markets have become more fierce on a case-by-case…

Good afternoon. In the fourth quarter of 2008 revenue was $268.1 million down approximately 14% versus revenue of $312.8 million in the fourth quarter of 2007. For the full-year revenue was $1.3 billion up approximately 9% from revenue of $1.2 billion in 2007. Operating income for the fourth quarter of 2008 was $10.4 million down approximately 73% from the fourth quarter of 2007. Operating margins in the fourth quarter of 2008 were 3.9% compared to 12.6% in the fourth quarter of 2007. Full-year operating income of $185.5 million was up approximately 4% from 2007 and operating income margins were 14% compared to 14.6% in 2007. Excluding amortization of intangibles, stock based compensation expense, restructuring expense and inventory step-up charges related to acquisitions, non-GAAP operating income of $28.7 million was down 46% compared to the fourth quarter of 2008. Non-GAAP operating margins were 10.7% in the fourth quarter of 2008 down from 17.1% in the fourth quarter of 2007. The reduction in margins was primarily due to loss of leverage in manufacturing overhead and operating expenses as a result of decline in revenue versus prior year. In the first quarter we are taking additional cost cutting actions to reduce expenses and improve the financial model. For 2008, non-GAAP operating income was $252.6 million up approximately 7% compared to 2007. Non-GAAP operating margins were 19% flat when compared to 2007. Net income for the fourth quarter of 2008 was $13.7 million, down 48% compared to the fourth quarter of 2007. Diluted earnings per share for the fourth quarter of 2008 were $0.11 compared to $0.21 in the fourth quarter of 2007. Full-year net income was $141.5 million up 21% compared to 2007. Diluted earnings per share for 2008 were $1.40 up $0.20 when compared to 2007. The tax rate for 2008 was…

(Operator Instructions). Your first question is from the line of Rich Valera with Needham & Company. Rich Valera - Needham & Company: Thank you. Good afternoon gentlemen. Raj with respect to the cost cuts that sounds like that will be fully faced in the second quarter. Can you give us an estimated non-GAAP operating expense number that you expect to see, can you give us that kind of granularity?

Well, it gets driven by because this is excluding acquisitions and we did quite a few acquisitions in Q4. So net-net what I can tell you is, we can expect to see for 2009 savings of around $25 million from these costs cutting efforts versus 2008. Rich Valera - Needham & Company: And that’s not linear obviously because you wouldn’t really see the impact fully in the first quarter?

One and half month impact in Q1 and then we will see the full quarter impact starting in Q2. Rich Valera - Needham & Company: Okay. And those predominately effect operating expense as opposed to gross margin, is that correct?

One of the things that got us in Q4 was that we have some manufacturing costs that are fixed in nature, and we did take some actions to reduce that as well. So part of it, it will be reflected in gross margin. Rich Valera - Needham & Company: Great. And then Steve just one question on sort of the bigger picture, on Caterpillars call there was a discussion about sort of almost [idle] capacity that creeps into the system as you have [idle] used equipment, that sort of ends up taking up some of the capacity once the demand returns, so there is kind of delay in the purchase of new equipment as demand returns. Do you think that concept applies to any parts of your business, and if so where?

Actually, maybe there are probabilities in some corner case, some cornered cases would apply, but in general, I would say is the scenario that we are looking at given that the market is still very much un-penetrated. Pretty much across all of our businesses whether it would be E&C, machine control, or certainly the new connect-to-site stuff, but agriculture, as well as the Mobile Solution stuff. I think the scenario that we contemplate is walking onto a contractors yard and walking into the contractors office and basically saying , yes on the way end we observed that 50% of your fleet is parked outside, which represents idle capacity. Now the qualification there is that machines maybe parked for three day, but because of special used machines, it may not be parked permanently. But aside from that is we can walk into a contractors office, say, yes, we observed that 50% of your fleet or whatever the number is, hopefully it is not 50%, but 50% of your fleet is parked outside not necessarily delivering value at this point in time. But lets talk about the 50% of the fleet that is being used and the productivity we can bring we can make it more productive, and I guess, conceivably allow you to park another 10% of your fleet outside and get the same amount of work out of the 40%. So, I think given that the market is un-penetrated and large elements of the fleet, in terms of construction machine control, for example, it would be well more than 80% of the fleet, capacity out there still doesn’t have machine control, our machine control on it. As we have the ability to basically sell into the part of the fleet that isn’t excess. So I think that the paradigm here should play out differently than it looks like from our machine manufacturers’ perspective. Rich Valera - Needham & Company: Okay, that’s helpful. Thank you.

You bet.

Your next question is from the line of Corey Toben with William Blair & Company. Corey Toben - William Blair & Company : Hi good afternoon. Steve let me ask if I could, some clarification on some of the prepared remarks. I will stay outside of E&C for now? Can you just give a little bit of clarification on what you mean by Ag and I think you said there is early evidence this year provide some reason for cautious optimism. Can you give us a few examples of what you were referring to on that point?

Okay, so we are caught a third of the way through the first quarter at this point in time, so this is the heavy seasonal quarter for Ag. Clearly at the end of the fourth quarter everybody I think was, including the farmers, including the distribution channel was kind of viewing the world with extreme caution and not prepared to spend cash. So, I think that based on both what we are seeing in terms of orders as well as anecdotes. We had an agricultural dealer meeting week before last that I attended and from an anecdotal level there is actually quite a bit of confidence out there. So, I think that based on what we have seen through the first month of the quarter based on orders in-take as well as let’s call the anecdotes that are running around out there. What we are not seeing is the same level of doom and gloom that you will see in the construction ramp. So I think, it will be whether we can produce the numbers or not but I think at this point in time we are again kind of what I say guardedly optimistic just based on what we have seen through the first month. There are two months left in the quarter, those are going to be pivotal, but at this point in time we are not feeling badly about what we are seeing let me put it that way. Corey Toben - William Blair & Company : And then shifting gears a little bit, outside of domestic E&C market, I think it fits along the lines of most markets outside of the United States and Europe. The decision making is slow but there are still being decision made there. Did I hear that correctly? Can you just give little more color on that around?

Yes. So when we look at around the world, again I don’t want to overplay this because the economic facts that we are seeing are global. There are waves wondering crashing through the world at one point or another. So I think that I am not necessarily projecting a strong sense of optimism here but trying to just portray the market as we see it today. So if you look at Africa, if you look at the Middle East, if you look at India, if you look at China, if you look at Russia, kind of different scenarios in each case but not swayed on their back, not kind of dealing with the same level of fear, uncertainty and doubt that the US and Europe are displaying at this point time. So I think, yes there are some projects that maybe in doubt particularly in the Middle East as oil revenues come down. But at the same time we are still talking about some upside scenarios around that part of the world and particularly in China. I think the Chinese government made the assessment that as their export businesses slowdown because of world wide economic conditions they have compensated to maintain employment by pushing a lot of money in infrastructure and that money is being spent now. So, I think that we are still comparatively bullish on China expecting actually a good year in 2009 a strong growth year in 2009 out of China and then in the other places again to continue or more still looking for growth out of most of those geographies. Corey Toben - William Blair & Company : Got it. And last one I will jump back in queue. On the stock buyback plan at this point what’s the current thought given the cash and debt positions with respect to stock buyback. Is your plan to slowdown a little bit or do you accelerate given the current stock price, thanks?

I will jump in and just saying until we get a hand along things, I think our view is that we got better alternative uses for cash at this point in time then to engage in any additional repurchasing of stock. Corey Toben - William Blair & Company : Great. Thank you.

Your next question is from the line of Jonathan Goldberg with Deutsche Bank.

Hi, none of our economist, we don’t really know what’s going to happen with the economy, but I just want to get your thoughts on what happens, how would you approach business, we get sort of the average of the year and it doesn’t look like recoveries are coming, what do you think you will be doing then?

Okay, well, I can refer to that or try to refer to that scenario in the script, I think what we are trying to figure out at this point in time is not being economist ourselves and not relying on economist at this point in time then anybody much good. But I think we are trying to figure out the scenario. So, clearly if we saw a probability of relatively early recovery, and whether it is the stimulus package or the credit markets coming back or whatever, but if we saw what we would call the inflection point occurring say in early 2010, I think our whole view as a company would be, okay, we take deliberate steps to reduce our costs at this point in time. But we keep in mind that what we are looking for is that inflection point and if we actually believe the inflection point will be relatively early. I think we take one approach on cost, which is to make sure we preserve capability. Now, yes, we get deeper into the year and this looks like a three year or four year sort of malaise situation. Again then I think our view would be, okay, to be responsible stewards we have to look at fundamentally restructuring ourselves differently for the long-term and I think we would be taking a different perspective on what our portfolio of businesses is and how we would run them. And they would probably be the judgment that we couldn’t afford to some of the things we would otherwise wanted to do. So, I think again our view is one way or the other we will react and we will react in responsible fashion, but I think at this point in time, we don’t have a clear view as to whether this is a 2009 in and out scenario or whether this lingers on in some fashion but I think either way, we are prepared to flex appropriately.

Do you think you would be seeing opportunities at some point in the cycle to start consolidating gains against your competitors, maybe pick up some of the smaller ones?

Yes. And I think, the unnecessarily buying of competitors, but I think more along the lines of consolidating market space and you saw us doing that in the fourth quarter to some extent. We extended our agricultural line in the fourth quarter by buying a true count in Ross and expanding farther into the agricultural ground. And I think you would see us doing that more than anything else which is kind of solidifying market territory that we already occupy or maybe extending our reach, because again if you look at the competitive mix out there with a couple of exceptions is we are relative to balance sheet, relative to market position, we believe we have advantage in a number of cases and I think that we can to be honest is the slowdown is maybe a major opportunity for us on a strategic scale. And I think that while being responsible in terms of financial storage shift is we believe we can take advantage of this opportunity to kind of both solidify and expand our market position.

Alright that is a little more accurate. Thank you.

Yeah.

Your next question is from the line of Yair Reiner with Oppenheimer.

Yes, thank you, and good afternoon. I just want to ask you a question about the new JV with Caterpillar as I recall that really hinged on getting the Caterpillar franchise to invest more in your independent channel. Given some of the challenges that I imagine they too are facing, how is that shaping up and how do now view the kind of investment you will need to make in that channel over the course of 2009?

So without a doubt we announced the deal in early October and the world fundamentally looks a bit different than it did in early October. And certainly a number of Caterpillar dealers are certainly more challenged now than they were at that point in time. But I think the practical issues here are more a matter of timing than necessarily of intent or ultimate conclusion. So I think the efforts continue. We are planning to create a number of new SITECH distribution outlets during the next quarter and certainly a lot much larger number during the course of the year. I think the confusion interest the market place has caused everyone to become a bit more, well this is what’s matter of cautious than let's say they are preoccupied. So our time table may be slipped a little bit, but the over one to two year period the result will end up being the same. So the optimism and the expectations remains absolutely the same. In terms of investment, the expectation in terms of creating the new channel per se it remains the same which is if the new channel will effectively involve zero investment by Trimble. So, the Caterpillar dealer, or the Caterpillar dealer principles there would be actually the participants are well capitalized and they have the capability of doing this without any Trimble involvement. So, in terms of the distribution channel we don’t expect any net investment from Trimble. Now when it comes to the new joint venture itself and the supporting operations of Trimble, here’s probably the one case in the company, I believe this was the only case in the company when I talked about kind of cutting to size and being proportional in our response to revenues. Here is the case where I think that we will continue to invest as we originally expected because we think the opportunities is at longer term justifies it. But again that remains fundamentally unchanged. And so I would say net-net in terms outlook both strategically lets call with 12 to 18 month contracts nothing has really changed since the early October. But I believe the first six months may be a bit slower than we had expected.

Okay, thank you. In terms of debt, so you added another $100 million or so debt in the quarter, if you could just give us some insights about the terms of the debt when it's due? And there something you want to think about paying down in the coming quarters or do you feel comfortable with this level of debt moving forward for the next few quarters?

Sure, Yair this is Raj. We have around $155 million debt and we have around $150 million of cash. So, from our net position we don’t have that much debt on our balance sheet. And the terms on this debt are very payable. It's basically LIBOR plus 65 basis points. So, I am paying around 1%, 1.5% interest on this. It's under a revolver agreement where we can take out $300 million and that agreement is in place for another three year. So, we took cash in just because what was happening in Q4 around the financial conditions and we did have an acquisition pipeline. So, it was little bit of safety kind of thing because knowing we didn’t want to slowdown in acquisitions we pulled some cash in, but net-net we don’t have any debt and whatever we have we don’t pay too much interest on it.

Got it. One final financial question and then I will get back into queue. I saw inventories were up a bit in a quarter both in absolute terms and in terms of days, should we expect that two weigh on margins again next quarter and US can write-off there and just let us know how we should think about that?

Sure. Our inventories basically even if you look versus last year, our inventories went up by $17 million. Of that $11 million of that was acquisitions, so buy companies and they inventories and the remaining of $5 million or so was as we deferred revenue we have to differ cogs. So as deferred revenue built up we had to defer the cost. So those are the two things that rolled the absolute dollars up. On the underlying basis their inventories were relatively flat.

Got it. Thank you very much.

And for me this is an aside and I am not foreshadowing anything per se, but just putting a marker in for the next quarter or two. What relative inventory is certainly in this time of financial uncertainty, everybody looks for accounts receivable sorts of risks, but I think there is also the need to look to the supply chain as a source of risk in terms of unexpected difficulties in the supply chain. So, it would be perfectly logical and perfectly comprehensible on our part maybe to build some safety stock against those places where we thought there was some potential risk. So, in fact our operations people have been encouraged by me to at least consider the idea of buffering ourselves against a handful of long lead time items were there is a relatively sole source provider.

And is the risk there on the component level or contract manufacturer.

I wouldn’t dare to speak about the contract manufacturers. So, I would say more on the component side. But for any high-tech manufacturer they will always have a relatively extensive list of unique suppliers to provide a result source for a component. And so I think and then where the replacement cycle might be three months or six months or something like that. So I think we are going through the exercise looking for alternative sources of supply, but then also looking to buy ourselves little insurance. But I would not see any kind of write-down risk out of that activity at all.

Fair enough. Thank you very much.

Thank you.

Your next question is from the line of Jeff Evanson with Dougherty & Company. Jeff Evanson - Dougherty & Company: Good afternoon. Thanks for taking my questions. We know its tough environment for everybody so that’s really not news but I guess what I would like to know Steve, is where do you think you are executing ahead of the competition in this tough environment? Where are you taking share? What incremental tactical things are working? And what are some things that are not moving along as fast as you would like outside of the economy?

Sure. Well let’s start with probably maybe the easiest case to identify within the company which is in the Mobile Solution's segment, because this has been true for really since we bought @Road but I think is becoming more and more evident in this environment which is if you look at the relative competitive side is the Fleet Manager of some size running a fleet of 1000 or 2000 or potentially 10,000 brings in the competition to consider the who would be the best technology solution for that fleet. Okay, again the current picture of that environment is that okay there are five invited in, Trimble will be larger than the others by a factor potentially in terms of revenue size, 10 to 1, 100 to 1 but it orders a magnitude larger. Jeff Evanson - Dougherty & Company: Just in the GMS business.

Pardon me. Yes in the GMS business. Yes, that would be the typical scenario, so there are competition usually runs from $5 million, $10 million maybe up to $40 million a year in revenue. So apparently manager find basically talking about installing a solution on a fleet of 5,000 my job is on the line. I am going to start to wonder who is going to be there in five years to support me and here is the case where both Trimble’s brand and the Trimble brand is worth more than we ever dreamed of in this market, but I look at Trimble company with both a history with the balance sheet with a reputation of supporting it's customers and in that environment from my perspective it's ours to loose. The only way we should loose in an environment like that within limits of course. Yes if we screw it up, but we should be the class act in that marketplace and that’s our expectation and we have got established best standards and we have to live up to it. When it comes to Ag I think it plays out, I am not sure that there are any step function changes in competitive alignment there. I think the trend that we have seen for the last two-three years will continue but this is the trend that favors us. So at the low end, again we are the largest company at the low end. We have had a history here of innovating and so I think get the low end, the easy guide level product I think we are doing well. At the higher end largely the competition is John Deere. And the question is what is John Deere's focus at this time. And their competitive focus maybe more selling heavy…

Yes. I think I'm not talking about significant delays. But I'm saying people were trying to figure out life both, us and everyone else was trying to figure out what's the meaning of life a little bit in the fourth quarter. And so, I think there was a natural. Maybe I mischaracterized it by saying it delay, maybe it was a pause in the fourth quarter. So, I think that we got a fairly extensive group of people doing nothing but focusing on working the SITECH arrangements around the world. So, I think they were in comparatively good shape. We're not announcing each and everyone of them. So, there maybe a little deceptive, because there is not a great deal that's visible but at this point in time, I would not know the exact number at the top of my head. But let's say they are between 20 and 30. If you will deals being processed at one level or another at this point of time. So, its not certainly not at a standstill. But we did take a pause in the fourth quarter. Jeff Evanson - Dougherty & Company: With respect to TMS, I guess what you are leading me to conclude is you should be taking share there. But I thought we kind of expected there might be a deal coming up here, a major win. Whilst the status of some of your element pipeline?

Yeah so obviously we announced one yesterday which is probably indicative. It was a 2100, at least initial 2100 units from our Windstream. So I think it's less a matter of any blockbuster single deal although there are some significant deals out there, other than the fact that we have, let's take, characterize it as dozens of deals currently in the pipeline that are being worked either in field task or being negotiated over one thing or the other. Now, depending on who the other party this may never be press released if the purchaser does not want a press release we're certainly not going to put one out. So again some of this maybe invisible but the one that came out yesterday relative to Windstream is obviously public now. But I think again there have been a couple to be honest that where the worst came back is we've just gone through a cut back. We've cut back our staff. We're deferring consideration of the deal for six months or until 2010 but there have not been many of those. So essentially we still have a significantly more robust pipeline than we have ever had before in this business. Jeff Evanson - Dougherty & Company: How much is attrition running ahead of your model in that business?

In terms of churn? Jeff Evanson - Dougherty & Company: Yes.

Okay as we have kind of talked about over time churn out of the @Road business. So first of all relative to the traditional TMS pre-@Road business churn has run pretty close to zero. Now, okay with construction being down, some of the ready neck, we are seeing trucks part in a few cases. So there is some level of churn but effectively the churn has not been a consideration historically in the traditional TMS business. Now @Road brought with it what's called a higher level of churn than we were anticipating the CDPD conversion of roughly three years ago is causing a spike at this point of time. So we are running at a higher churn level than our model we would call for at this point in time. I suppose the implicit question there is how much of that is economy related and how much is not. And at this point of time. The significant majority of it we would regard is being kind of a still a fixed program in terms of restoring a level of, first of all making sure we are selling to the right people that they can get the right value out of the system and there may have been cases in the past where, may be where we are reselling something where the value could not be fully realized. The second is a matter of customer service. So we over last six to nine months have been continually upping the relative level of customer support starting with kind of a one month call and six month call. So to think then also monitoring performance and making sure that we intervene early if we see a user not using the system. So the churn is higher than we would like it's higher than the model. But it has not taken step up in the last four to six months. So it appears that the economy is not having a dramatic effect on churn at this point. Jeff Evanson - Dougherty & Company: Okay and my last question on field solutions. You have been investing in the area of application control. How far long that process, are you, do you still have more acquisitions to do. Or are you have you pretty much made the acquisitions you need to make there?

With unnecessary telegraphing anything particularly significant, I would not say that we are done yet. I think there are number of problems still to be solved in the agriculture around. We believe we have ideas and how to solve them. And I would say is that again along our typical profile of comparatively small beach heads sorts of acquisitions I would in general say we are probably not done. Jeff Evanson - Dougherty & Company: Okay. Thank you.

You bet.

Your next question is from the line of Scott Sutherland with Wedbush Morgan Securities.

Hi, great. Thank you, good afternoon. Obviously the macro environment is just creating a big headwinds here. But as you guys look internally what are maybe key lean indicators or things that you are watching that might point to stabilization or turn around in the end markets for E&C?

Again I don't think looking at aggregated data or kind of externally available data necessarily does us whole lot of good. So, I would say that for example machine sales and things like that, are not good indicators of what we are seeing. But I think that the issues that are facing us in E&C are okay the primary one is the financing one which is I think there was an absolute and precipitous drop in confidence. You can pick the day in September and then it got worse in November. So I think when we start to hear, when we start to talk to contractors, when we start to talk to surveyors and they start to express a level of, business is lousy. It's x percent lower than it was last year. But okay I understand what my next six months are going to be I can anticipate what my next 12 months are. When we start to detect this all psychological because I don’t think this is a, I don't think this is a matter of data. I think this is matter of confidence more than anything else. Once we start to detect kind of the willingness of our business is to kind of engage constructively with us at that point in time. I think that we start to anticipate an inflection point. We saw at a lesser extent but we saw exactly the same phenomenon after 9/11. Decision making stopped on the afternoon at 9/11 2001 and really didn't restart for nine months. So we have seen this kind of breakdown in confidence before, and once it starts to come back at that point in time we can walk on to that contractor site and we can start to, we have got something worth selling.

How much of you mentioned financing, how much of it is, these guys can get financed in a construction loans. And if that starts to open up and you have a few of your guys coming and say hey we are getting loans. That might be helping change the confidence. Would you see that as an indicator or?

Yeah I think again you know there a what I would call a micro level where key individual projects can get financing. So therefore they never get built. But I think may be there is a larger issue here. Its just a pure headline factor which is I am scared and therefore I am not making a decision until I find a reason not to be scared any longer. So I think yeah, the relative flow of financing into the construction romp will certainly be helpful. And again this plays out on international basis too this is not just the US phenomenon. But I think some of it is, for a contractor that has work, may be it's of lower level than any level that, that contractor see. If that contractor has work we have got the ability to go sell that contract. But I think its kind of confidence about the future and the fact that for the last four months is nobody has had any real concept to what that feature is.

Okay, in your Field Solutions you are still having some positive growth there. Can you break down in a little more detail you much of it is Ag and versus GIS and is it really Ag driving that and how’s GIS doing?

Yeah so I think by and large I think you can attribute virtually all of the growth to agriculture at the moment but having said that I think GIS maybe a quite performer for us in 2009. We have done some re-organization. We increased relative focus on vertical markets and I think we are getting some traction in GIS at this point in time. How that works out quantitatively I do not know but qualitatively I would tell you that GIS is not one of the businesses I’m worried about for 2009 at this point.

And lastly about three main segments, a question on TMS I think you mentioned in the past quarter some new initiatives and some poor performance in the software and drug store deliveries some reinvestment there? Can you talk about these other solutions in TMS and whether you are in full with them you kind of reducing investments and how that can help your margin structure?

Yeah again I think that a lot of this before we kind of whack out or take a whack at businesses that are not performing at this point in time and certainly there is a field service ROM is not producing international results at this point in time. I think again we need to come to a view in terms of just what the environment is going to be like in the next six months and the next five months. So that we can be again somewhat balanced and proportional in our response. But I think the way we have described it. I may not give the numbers precisely what I recorded in the past, but this is can be largely the true. Is that in the TMS in the Mobile Solution segment roughly 80 plus percent of the revenue base is producing operating margins in the vicinity of 20%. So in other words vast significant majority of that segment is healthy, let's call it in the neighborhood of 20%. Operating margins was for the moment was defined us the healthy indicator and what we got our things like field services and some other geographic plays that are pulling down that performance. So, obviously we could make in instant decision to improve financial results by making up a portfolio decision. But at that point of time we are kind of turning our back on market that has got 20 million to 30 million unit potential out there and where we believe we are actually have a superior product. So, again we are not going to make decisions like that casually and not necessarily just for short term considerations. I think this is again achieving right balance between short term and long term. But, so at any point of time we are making a number of, we got a number of businesses in anticipation that is what we do as a company and we can obviously improve financials instantly by making a series of portfolio decisions, but again we are not going to make those decisions likely.

Okay. Great. Thank you.

You bet.

Our next question is from the line of Jeff Rath with Canaccord Adams.

Hi, guys. Just a couple follow on questions if I could. Of the eight acquisitions you announced here, two of them were in the Field Solutions business, are you able to tell us how much they might have contributed in revenues in the fourth quarter?

I will take a crack out but typically like the once we in field solutions that we talked about we will be integrating it with our best products and selling at fall back. So with acquisition and what not gets pretty difficult to track. But I'll give you round number, we probably added, these are question lot of when they done in November and December time period, probably one to two points.

Is that, $1 million to $2 million or, 1% to 2% in year-over-year?

Growth year-over-year.

Okay, plus, okay perfect, the second question I have is, and I understand visibility in macro you explained, your position well enough, I just from an external standpoint, there is lots of moving parts obviously, do you expect the E&C business for instance to be in the first quarter flat up or down, I know its not much but, it might help us. Any color there, I am talking compared to the fourth quarter from a revenue standpoint.

Yeah, again just as matter of analytical precision we can never talk about sequential effects. We always compared to the prior year same period just because those kinds of so seasonal. So compared to the prior year at the moment we would expect E&C to be down. Again we are kind of saying as that we expect the conditions in the fourth quarter to continue into the first quarter and therefore, is what the number Raj came out with here assume E&C will be down compared to the same quarter prior year. Now having said that I mean looking forward is we are in search of the right template to use is, well we've got three templates of comparatively recent history available to us there is first half of 2008 which was difficult. But in a case where we showed fair progression. The third quarter which began to fall apart in the middle of September, so it's definitely difficult, but a quarter which we could work with and then there was this strange event in the fourth quarter which was kind of unprecedented than anything we have ever seen. And so, that looking forward its not clear by the time we get into the second quarter, what the template is that we're going be looking at that point. But what we're basically saying that first quarter is going to look a lot like the fourth quarter.

Okay. All right. And then maybe, differently phrasing the question for the field solutions, I understand it's a book-and-build business, and it seems like you are seeing obviously some of different but similar macros creep in to that end market if you want to say for now.

Well, actually that’s not what we said. Okay, there is reason to be let's call it careful but we're not saying at this point in time is what we're seeing in construction has yet appeared in agriculture. Financing seems to be okay and Ag is more kind of a psychology of the market that will determine things than anything else at this point of time. So, we are seeing is a different environment in Ag than we are seeing in construction.

So, you're pretty confident that still is a growth business year-over-year for you at this point without characterizing too much?

Yes, at this point in time, I would not declare myself to be pretty confident on anything. I'm just telling you like we see it today, but as you say there are a whole lot of moving parts out there and as a CEO, I'm not going to be pretty confident on anything, I'm just telling you what we are seeing today and if the headlines turn ugly tomorrow, this situation can turn on us.

Perfect. And just a last couple of accounting questions, Raj. You said based on your guidance 14 I just want to clarify; $14.2 million in amortization expenses for Q1 is that?

Yeah. What I said was $14.2 million of amortization expenses, $4.2 million of stock-based compensation expense and $5.5 million of restructuring charges.

Great, thank you very much.

Your next question is from the line of the Ajit Pai with Thomas Weisel Partners.

Yeah, good afternoon. A couple of quick questions. The first one is about the tax rate. I think you talked about certain factors some one-time and than more, the others to do with your global supply chain, so getting there some indication as over the next couple of years, how that tax rate is likely to change. And than the second question is just looking at the federal governments's economic stimulus package, and just looking at the size of the package whether that's sufficient based on your judgment to actually use that for slack in the capacity utilization and your customers for your E&C segment and actually drive some demand, or do you think that is insufficient right now to actually do that. And if you do expect it to have a positive impact, what the potential timing of that could be just given where you play in the cycle?

Well, let me do with the tax question and then I will hand it over to Steve for the stimulus question. On the tax question, we had a full year tax rate of 26%. In 2007, the tax rate was around 36%. So the improvement was driven by the fact that we put a global supply chain project in place, and we have international profits are now taxed at pretty much at a very low tax rate. So structurally, we have a very good structure in place. What can impact us going into the future is just a mix of where their profits are. And this year is 26, it could be, 26 had built a little conservatism into next year number and call it at 28 for next year. But if the mix remains the same this year, we could have slight benefit.

And by this year, next year you mean 2008 and 2009 or 2009 and 2010.

Next year if the forecast is 28 at this point.

Okay.

And 2008 is close to 26%.

Got it

Okay. So as far as the stimulus package, I think we are sitting back and waiting. If we talking about the US stimulus package, and I assume we are, I think we are sitting back and waiting for some natural detail to emerge here, because again there are many moving parts here. So I think there is what is being called the straight infrastructure portion of it, which I think is typically being characterized as roughly a $100 billion at this point of time. But then there are other aspects which are of interest to us. So anything in the electrical grid involves at least second or third order set of possibilities for us, so they are across at whole 800 odd billion dollars stimulus package. There are a number of points of interest to us. But I think the $100 billion, if we characterize the $100 billion infrastructure spend, as being the level we are talking about here, I think there are a number of questions that remain to be answered, so there's a early portion of that will be largely directed towards me, and since I understand it which is to get people employed sooner than letter. So I think that's considered to be the zero to six month sort of stimulus there. And then the project portion of it probably, I think people are hopeful for the second half of the year to start some of that flow, but I would question whether there is any real effect in 2009, or whatever effects there are in 2010. And so it think that certainly, we are not at the moment and we may change our attitude on this. At the moment in terms of dollars flowing through, I am not sure that were expecting a great deal of…

Got it. Thank you.

Thank you.

Your next question is from the line of Bennett Notman with Davenport & Company. Bennett Notman - Davenport & Company: Actually my questions have been asked and answered, thank you.

Thank you.

And your next question is from the line of Sunil [Dapshadar] with Sentinel Investment.

Yeah, thanks. You mentioned, you talked about the dealers basically, they face problems with the financing portion. Have you seen any kind of restocking phenomena or change coming back into that area, or you still think that it's too early to comment on?

Maybe I interpreted your questions properly if didn't re-ask it, but just talking about the comparative health of the dealer channel and effects that we are seeing. So first of all, we believe that there was just a meaningful reduction in dealer inventories in the fourth quarter. Now any individual dealer doesn't necessarily hold a whole lot of inventory for a large dealer it might be $1 million to $2 million at Trimble staff. For a medium size dealer, it might be more in the range of a million dollars. So per say each individual dealer doesn't carry a whole lot of inventory. But if you take, let's call 50 to a 100 dealers across the world that are of some significant size, if each of them brought down their inventory by a meaningful percentage. It does add up to a fair number, so we believe we did see a meaningful inventory effect on our revenue in the fourth quarter, but what we would have expected at the end of the fourth quarter given that we were going into the Ag seasonal high quarter and that we were at least in the early stages of moving into the construction, seasonally high quarter. We would have expected inventories to rise in the fourth quarter instead we saw them fall in the deals now it was more than that. Our people reading headlines and being concerned and just conserving cash. Now it's also in effect a good thing, because it does represent the improvement Trimble has made over the last three to five years on delivery performance that dealers can now count on more reliable delivery functionable and therefore can actually reduce their inventory. So I think at some point here, I am not calling for this quarter certainly. But at some point in time, I think we see some natural rebuild of inventories occurring, but I couldn't call the time at this point in time. But whether it was a part of your question or not, but let me.

Yeah, that’s essentially to what I wanted. But now since you have improved your supply to the dealers probably it means that dealers I think forward permanently meet or your level of inventory in that case? Is that the way we should read and you'll answer right now or is it that the restarting may just happen, because dealers are in the near-term carrying extremely low inventories?

Well, again what I am saying is that in terms of looking at the company, I would say is that it would be not be probably, conservatively smart thing to do is to assume that we get a step function either in the first quarter or the second quarter of an inventory rebuild factor. It may happen and may start to happen, but I think that in the greater order of things it's not going to be a meaningful effect for us in the first and second quarter, so I would say is the inventories are down. What we're going to see now is that what I would expect would be the true underlying demand in the marketplace, because I don't think we saw the true underlying demand totally in the fourth quarter as result of the inventory effect. But I think we will see that from now on. And along the way, there may be over the next two to four quarters there maybe, let's call a gradual rebuild of inventory in the dealers, but I think it going to be very hard to detect.

Okay. On China, you mentioned that. Okay, China's infrastructure stimulus package is going to be spent, it's being spent now currently, and how much is China as a percentage of your revenues?

We don't break it out as a separate entity. Let's just say it's getting to be a.

It's top five market for us.

Well, okay. Let's characterize it that way. In terms of the national market it's now firmly in the top five national market for us as a company.

Okay. And if you had a very high margin degradation in the E&C segment, if the market improves okay, maybe three quarters down the road. Do you think that your margins can get back to the levels where they 18% to 20% of revenues, or in that E&C segment, or you think that those margins compressions, there might be some kind of a margin compression overall going into probably 2010 period, or is that the way one should look at or?

No. Actually I don't think that's way to look at it. So, okay call this aspiration on my part in the call aspiration on the part of the management group. Again, we have to produce numbers to say that we are worthy of that aspiration. But I don't think we are conceding. Okay, so we view let's call E&C segment. And before I start, let me kind of breakout as side category that we will talk about, we will have a tendency to talk about separately as an item, because it will be an investment and we will talk about discreetly, which is this virtual side activity the new joint-venture with Caterpillar and the associated activity around Trimble. So on that one, I am saying okay that me affect results, but it's not part of the base line at this point in time. But if we are talking about the baseline E&C business, we are not conceding in the short-term, we are not conceding those margins even in the short-term. Again, we started taking actions in April, but been cumulative set of actions since last April. They were stepped up in January, but the actions being taken are really intended to let's call restore a margin in the vicinity of 20% that has just taken the ground internal for this company. We'll see how we do against it. Obviously depends to certain extent on the external environment, but we are not backing away from kind of those near 20% operating margins as our stake in the ground even in the short-term. Now the effect that we could see that I talk to in the script, is that if it does turn, if we see the inflection point, is what we are likely to see as we did back in 2002 is what we are likely to see even if we restore to those near 20% operating margins, what we are likely to see is a early on in the recovery is a significant acceleration of improvement on those margins. So I don’t think the right attitude for us, and again you could sit back and watch us and we will see if we deliver, but I don't think the right view on us is that there has been even let's call the medium-term impairment on those margins as that we expect to recover those margins at this point.

Okay, if I may ask a last question on the market share, probably. You had talked about the competition is particularly from John Deere and not on the low end. Did you see that in the fourth quarter that you may probably, or I don't know may have lost any kind of market share, or you think that you have pretty much held your market share and you expect that thing to continue and probably might be more competitive in the future?

Yes. So, certainly I've learned to spell the word humble in the last three to four months more so than I would have historically. So it's hard given the market confusion, I'm not going to be overly categorical here. But I would say it's certainly my belief, and I've got in most cases date of the supported is across the board. I don't believe the loss in the market share, and I can believe that pretty much in most of our market, I can make the case that we gained in market share in the fourth quarter.

Great. Thanks Steve, thanks.

Thank you.

There are no further questions at this time. I would like to turn the call back over to Mr. Steve Berglund for any closing remarks.

No closing remarks. I look forward to talking to you in three months, hopefully in a clearer environment. Thanks.

Thank you all for participating in today's Trimble fourth quarter and fiscal 2008 conference call and webcast. You may now disconnect.