Ladies and gentlemen, thank you for standing by and welcome to the Trimble Fourth Quarter and Full Year 2019 Results. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s call is being recorded. I would now like to hand the conference over to Mr. Michael Leyba, Director of Investor Relations. Please go ahead, sir.

Thanks. Good afternoon, everyone and thanks for joining us on the call. I’m here today with Rob Painter, our CEO and David Barnes, our CFO. I would like to point out that our earnings release and the slide presentation supplementing today’s call are available on our website at www.trimble.com as well as within the webcast, and we will be referring to the presentation today. In addition, we will also be posting our prepared remarks on our Investor Relations website at investor.trimble.com shortly after the completion of this call. Turning to Slide 2 of the presentation, I would like to remind you that the forward-looking statements made in today’s call and the subsequent question-and-answer 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-K and 10-Q or other documents filed with the Securities and Exchange Commission. The non-GAAP measures that we discuss in today’s call are fully reconciled to GAAP measures in the tables from our press release. First, Rob will start with an overview of the quarter and the year. After that, David will take us through the remainder of the slides, including an in-depth review of the quarter and the year, our guidance and then we will go to Q&A. I would also like to briefly mention that, we will be attending the Morgan Stanley Technology Media and Telecom Conference on March 2nd in San Francisco. With that, please turn to Slide 3, and will I will turn the call over to Rob.

Good afternoon, everyone. The focus of my comments today will be on Trimble’s direction going forward. For baseline context, our fourth quarter revenue came in well ahead of expectations as that EPS. More importantly, ARR was $1.13 billion, up 6% and free cash flow was $516 million on a trailing 12-month basis, up 23%. Revenue and EPS were record levels for 2019. This represents my first call as CEO. Steve Berglund is now our Executive Chairman and Borje Ekholm, CEO of Ericsson has joined our Board of Directors. In addition, David Barnes is in place as our new CFO. David is off to a strong start and is focused on helping us both transformer business models and put in place the enabling mechanisms to efficiently and effectively scale on a global basis. As I take over as CEO, I have the benefit of having been with the company for 14 years, in both operating and executive leadership roles. I continue to believe with great conviction and the strength of the Trimble business model. I’m also mindful that as an important to refine strategy when macro or competitive dynamic shift in meaningful ways. From an investor lens, our objective is to allocate capital and resources with an owner/operator mindset. That looks like one, executing a compelling strategy that drives unique customer value, thereby creating and sustaining competitive advantage. Two, pursuing business models that create lifetime customer value, and three, putting shareholder capital and management bandwidth to work in the highest return areas that is ultimately measured by free cash flow. Would have stayed the same since we put our business model for the Investor Day in May of 2018 is threefold. One, our end markets are fundamentally attractive at a secular level. They’re large global markets that are undergoing digital transformation.…

Thanks, Rob. Good afternoon. In my commentary, I will review the results for both the fourth quarter and the full year of 2019, before closing with guidance. Starting on Slide 8, fourth quarter total revenue was $827 million on a non-GAAP basis, up 4.3% year-over-year and above our guidance range. To break that down, currency translation subtracted 1% and acquisitions net of divestitures added 1%. Organic growth was 4% with approximately 3% growth from the impact of the 14th week. ARR or annualized recurring revenue grew to $1.13 billion in the quarter up 6% year-over-year and was up 5% on an organic basis. Adjusted EBITDA, which includes income from our joint ventures and equity investments, was $193 million, with a margin of 23.4%. Operating income dollars increased 4% to $178 million with operating margins of 21.6% essentially flat versus prior year. Our non-GAAP tax rate was 19% also flat on a year-over-year basis. Net income was up close to 10% and non-GAAP earnings per share in the fourth quarter were $0.53, up 5% or over 10% year-over-year. Fourth quarter cash flow from operations was $122 million, up 20% year-over-year, while cash flow from operations for the full year was $585 million, also up 20% year-over-year. Free cash flow which we define as cash flow from operations minus capital expenditures was $108 million for the quarter and $516 million for the year, each measure up 23% year-over-year. Consistent with changes in tax laws and to align with our international business operations, a non-US intercompany transfer of intellectual property completed in the fourth quarter resulted in a one-time GAAP tax benefit for the fourth quarter of 2019. Our fourth quarter 2019 non-GAAP rate remained consistent with the prior year, and we expect that our 2020 non-GAAP rate will be 17% to 18%.…

Thanks, everyone for taking the time to be with us today. I want to close by acknowledging the efforts of our 11,500 global Trimble colleagues for delivering a solid 2019. 2020 will be an important year as we lay the foundation for our connect and scale 2025 strategy. My message to investors is the same as our employees, we’ve got this. We appreciate your support. Operator, let’s please open up the line for questions.

Sure, sir. [Operator Instructions] Your first question comes from the line of Ann Duignan with J.P. Morgan. Your line is now open.

Yeah. Hi, good evening. My first question is around ELD and the cost there, the actual dollar cost that you incurred in Q4 on the back of that. And what do you have the actual dollar or the EPS impact however you want to give it to us, the actual impact that you’re contemplating in 2021 Q1 and beyond?

Hi, Ann. So if we look at the fourth quarter results in the transportation segment, and if I look at it on a year-over-year basis, that’s probably the best way to look at it at am op margin level and so at the operating margin level, we were, and I’d say 5 points to 6 points of degradation in the transportation segment from ELD, which is primarily threefold. First being hardware margins compressing towards the end of the second phase of the mandate going into effect. The second one were just some discrete one-time cost associated with the things like over the air updates which drive cellular bills up, and then the third impact was a bit of churn in the business that hit the fourth quarter. As we look to 2020 in the business, what I would set for expectations is a margin profile that’s roughly in line with the performance of 2019. So just think of revenue and profitability roughly the same and so we have some aspects of the business and transportation that will be improving and growing next year with somewhat of an offset in the ELD side which neutralizes that. So I would expect in 2020 revenue and op margins to be about the same as 2019. And that’s all in service of getting the 2021 results in line and protecting the long tail subscriber base that we have.

Okay, that’s helpful. And when you talk about sales in line, you talking organic like-for-like or are you talking including the Kuebix sales?

It’s mostly organic, but there some revenue that’s associated with Kuebix, so on an organic basis, I would expect it to be slightly down, and transportation in 2020 that part of the down that we’ll also have in 2020 relates to our back office enterprise business – which is a transportation management system and we’re beginning the conversion to a subscription business model, which will be you know, a negative at the at the top and bottom line, but obviously virtuous to the business model as we grow the ARR in that business.

Okay. And just one final clarification on Kuebix. When I looked up that business on its website, the first thing that popped up was free software. So can you just talk a little bit about the profitability of that business and you did say it will be a drag, but is that just on an accounting – purchase accounting or is it lower margins on a go forward basis?

So it will be lower margin in 2020, and there’s a, I’ll call it a freemium business model. So there’s over 21,000 shipper participants currently using the Kuebix shipping community. So a subset of those are paying participants in the model. So we’re driving shipper volume to the community and the platform to map to on the Trimble side, our carrier platform. So we think this is a – well these are very exciting space in ability, we think we have to uniquely connect the supply and the capacity side of transportation. So in the short-term, it will be a drag to EPS and we think this accelerates our ability to go after this strategy. There’s certainly a lot of transformation – digital transformation happening in all of our markets, we think are at the front and centre of that digital transformation. This is the next logical place and our interview in transportation is this connectivity between the shipper and the carrier. So if we would have done it organic – inorganically, it would have been an area where we wanted to put incremental investment. This is with the community of 21 21,000 carriers and growing - 21,000 shippers and growing this is – this to us was the best and quickest move.

Your next question comes from the line of Andrew DeGasperi with Berenberg. Your line is now open.

Thanks for taking my question. I guess first, could you quantify what the exact dilutive effect to EPS is Kuebix? And then maybe secondly, the 3% I guess headwinds from the coronavirus, can you maybe expand into how you came up with that number?

Sure, on the Kuebix side in 2020 would be a kind of a few pennies of EPS. So low to mid single-digit EPS hits from that acquisition and the investments we’re making in the business and to grow that business. On the coronavirus so the, hey, here’s the way we looked at it, we have Business that we do in China, so called, domestic China business and then we have a supply chain that comes out of China and it’s less about the finished goods supply chain, it’s really more about the components that come out of China. So for the business that we have in China, you know, again, take the 2% of revenue. Look at a mid guidance and close to $800, $700 call it, $795 will take 2% of that, cut that in half and you’ve got what we would estimate to be a hit, potential hit their impacting Q1, that doesn’t bridge the whole number. The rest of it is really supply chain dynamic and answer first there would be about one to one and a half weeks of relevant loss sales as a result of that. So the way we would come up with that calculation is as follows. We see about a three week and so this is what’s baked into our numbers. We see a three - about a three week I call it, delay. The first is Chinese New Year was extended one week. The second is that, you know, we’re midway through the second week where factories are coming back online, ours included but most of these factories are running at about a third capacity due within – due to the nature of how the officials are allowing people back into work. And then the third week of potential delay we see is relative to the freight. So freight is moving slow out of China, commercial carriers aren’t flying to China right now. So there’s additional freight time, a lot of which is going to Hong Kong to then get out of the region. So if you take, if you add those week, a week, a week up, you get three weeks, we figure we have – we estimate we have about two weeks I’ll say a buffer and supply and inventory. So 3 minus 2 equals 1, we apply that to the relevant revenue streams, because remember, it’s not all the revenue streams would be relevant in this analysis and you get the 3% we talked about. The ARR. If I look at the ARR specifically, we would not expect an impact on that an annualized recurring revenue coming out of the quarter. So this really is, you know, mostly centric to the hardware businesses.

That’s a lot of detail. Thank you.

Your next question comes from the line of Rick Eastman with Baird. Your line is now open.

Yes, thank you and thanks for the questions. Rob could you just speak to the balance. If we’re looking in 2020 corporates, 0% to 3%? Maybe just some thoughts around the B&I business, is that to kind of maintain a single-digit growth rate with maybe, you know, a point headwind on the deferred revenue side or just – maybe just go through the other three segments here, R&U and Geospatial and B&I relative to the 0% to 3%?

Sure, Rick. So I would think about first half of the year, second half of the year, we see a second half of the year and an accelerated growth rate as compared to the first, as opposed to the first half of the year. If we look at it at a segment, more of the segment level, I’ll give you a kind of a high level view of that. Building & Infrastructure would, you know for us be on an, I’d say on an apple-to-apple basis, the strongest segment coming into 2020. What we’ll see in addition in Buildings & Infrastructure this year is the subscription conversion, which does create a headwind, top and bottom. So you’ve heard me talk on the last calls about the success that the Viewpoint business and the e-Builder business have had as part of the Trimble portfolio, and they continue to outperform well at the end of last year. The SketchUp product, which is an architecture and design business initiated the conversion and 20,000 – I’m sorry, 2019 and 2020, we would hit the bottom of that trough. So we would hit a decrement there and then really come out starting in 2021. And then we expect to start to see a couple of our other businesses with software businesses within construction begin the transition, you know maybe really towards the back end – the back end of the year. So those are the dynamics happening within Buildings & Infrastructure. If we look at the Geospatial business, I’d say the assertion we have on the year is, we start out on the rough patch because the coronavirus impact is quite centric to Geospatial of the four reporting segments. And as we come through the year, we get some of the lapping effects as we start to lap the OEM, you know, challenges we had last year. I look at the Resources & Utilities business bit of a tale of two halves of the year some of that’s a lapping effect, but to standout performer actually is our Utilities business has been performing nicely in the second half of 2019. And we expect to see that performing and driving growth in the business and some of that is acquisition, the three acquisitions, we talked about role and Resources & Utilities that we had announced in the fourth quarter. And then transportation you know, the way I answered Dan’s question, I would answer it, same when I think about the first half and second half of the year is revenue growth like really pretty even throughout the year, low and throughout the year and even.

Okay. And then just maybe one last question on the BIN business itself. Any – how did it perform in the quarter? And then has there been any, you know, negative impact that you could see from, you know from the Brexit, I mean there were some questions about that but anything kind of materialize or visible there?

By the time it rolls up at the segment or the company level, it doesn’t become material. Certainly there appears to be some well I’ll say more clarity, I guess it’s not perfect clarity of where the clarity of where it ends, but maybe not clarity of how it ends. But that increased clarity okay can provide some stabilization in the market. What I would want to say is the segment had a – or that subsegment of Buildings & Infrastructure, the BIN businesses had a really nice fourth quarter, some of which would have been the 53rd week we had. But really, if I look at the fundamentals that our standout performer was that architecture and design business, the SketchUp transition to subscription, we saw 50% year-over-year unit growth every single quarter last year, and really just a tremendous performance from that team and showing the possibilities of expanding the addressable market through the model conversion.

Excellent. Okay, thank you much.

Your next question comes from the line of Jerry Revich with Goldman Sachs. Your line is now open.

Yes, hi good afternoon and good evening.

Hi, Jerry.

Your subscription growth really performed nicely in the quarter accelerating from 13% to 18% despite the headwinds that you spoke about in transportation. Can you just talk about what parts of the business performed well and how big of a headwind was the churn in transport and appreciate 4 points from extra week? But still, the underlying performance looks like it accelerated?

If I started at the top level, we would have expected to see another 3 points of ARR growth from the transportation business, were not for some of the churn. And then if I look at the segments that underlying the Buildings & Infrastructure businesses were really the standout performer in terms of growing the recurring revenue in the quarter. Secondarily, in our Resources & Utilities business that positioning services and I know you’ve written the reports on their RTK networks, or whether it’s our RTK or RTX networks, where we provide ubiquitous [technical difficulty] accuracy to customers on a global basis. They had another outstanding quarter and outstanding year.

And in terms of the subscription momentum, you mentioned a moment ago, the strong performance of SketchUp. It sounds like the pipeline at B&I and RTK is pretty strong as well based on your comments on the call. So is this level of double-digit subscription growth sustainable into the early part of ’20 based on the pipeline that you folks see for each of those segments?

In aggregate, what I would expect to see is mid to high single-digits in the first half of the year and then the possibility for the double in the second half of the year and the delta on that is the transportation business we see getting back to where we want it or towards where we want it, I should say in the second half of the year and that would be our opportunity to get that back in the double-digit on an organic basis.

And lastly, Rob you early on the call, you spoke about essentially fewer reporting business segments and more central Trimble initiatives. Can you give us an update on your plan transitions to subscription for the other businesses based on the success you’ve had on SketchUp? Any change in plan, I think in the past, you had outlined $500 million worth of potential transition code subscription. And I’m wondering if you could care to update that and give us a sense of timing and cadence as you work through the plans?

Yeah. So what I’ve talked about before, we’ve been closer to about $450 million of perpetual revenue that we have, that we would look at and analyze an ability to convert to subscription, not all of it will make sense to do. The plan we have is to accelerate the path that we were on for that. A good amount of that we’ll take this year 2020 to do the underlying planning and infrastructure building to start delivering upon it in 2021. And I would say in some cases, it’s a multi-year acceleration of the plans to move towards subscription. Two places where I would expect to see it the most on the software side would be in the BIN software and the construction side, and secondarily, and transportation and the back office software that we have, those are the – follow the 80/20 rule and those are the two big opportunities represented two big opportunities, we have to accelerate transition. I’m committed to you know, making the investments we need to in the underlying systems and plumbing of Trimble in order to help us execute upon the conversion strategy. It’s the right thing to do for the business. And I think the – and the potential is, I think, you know, outstanding for the company when we do this. And it’s more than just converting to a subscription business model for the sake of changing a business model, you know our strategy, when we talk about connect and scale 2025 is connect the lifecycles that we serve. If we’re going to connect the lifecycles that we serve, we need to be able to deliver integrated and bundled offerings of the hardware and the software. So – think about configurable packages or collections of the solutions that we have. So we think on many fronts that this enables additional opportunities down the line and ultimately, I think this can enable a data strategy for Trimble. The other place to look out for this year for us is on the hardware side. And we’ll have you know dropped that a couple – in a couple of the calls that we’ll investigate and experiment with some hardware as a service type business model. And those may show up as a term license in the end and then you know we’ll have to bridge for the Street when we’re trying that. One thing to know about the term license offer by the way, as it sits about $75 million. And that’s not picked up in ARR which, although right in the old accounting and 605 accounting that would have been considered recurring revenue. So that’s missing when we talk about that 1.3 – $1.13 billion of ARR that excludes the term license software as well, which is an attractive revenue stream, in addition then to converting additional businesses to subscription and software meets starting to make some experimentation on the hardware side.

Your next question comes from the line of Jonathan Ho with William Blair. Your line is now open.

Hi, good afternoon. I just wanted to start with the strategic realignment and sort of the business unit sharper focus that you talked about, you know, what does this maybe allow you to do, that you couldn't do in the past and, you know, sort of, you know, what's the impact on visibility, you know, having that maybe tighter span of control?

I think about clarity when I think about reducing the number of segments. So if you take the construction business as an example and we’re pursuing a strategy of connected construction and agriculture, we talk about a connected farm and transportation, we talk about a connected supply chain. So this connectivity is central to the strategies that we’re pursuing. I’m a believer in single points of accountability. So in the construction business, we have a single point of accountability for effecting – positively affecting the strategy to connect construction. So the extent to which we need to make capital allocation decisions and priorities and tradeoffs. We’re doing so now within construction under one leader as opposed to what would have been multiple leaders reporting, I guess, gives the old construct multiple leaders reporting to me, it consolidates that effort within construction. So I think we can be faster and I think we can be better as a result of the structural reorganization that we made. So that clarity into direction of clarity and the priorities speed at which we can make decisions, I think these are all really important things. In terms of visibility, let’s say and if you mean visibility into the financials in the pipeline, you know, the visibility increase is going to come as we get more and more recurring revenue in the business you know as David mentioned now I think it’s 34% of our revenue is recurring, that keeps going north and there’s businesses and that’ll be a good thing for the visibility.

Got it and you referenced, you know, maybe some impacts from I guess, you know, private investment and M&A activity in the industry. Can you talk about maybe where that’s most pronounced and you know whether that’s actually changed some of the competitive dynamics as well? Thank you.

Sure, Jonathan, I think it’s most pronounced in construction and transportation. And if I back up at a secular level, to me the secular context is a digitization of industrial markets. And so from a good news perspective, it’s validating that I think we’re playing in the right field. You know, we’ve been doing this for 20 plus years at Trimble. And you know, at some point, right as the thesis played out that these markets are going to and are going under a digital transformation that ultimately is going to attract capital. Then you had an event like ELD as a government mandate in North America, okay, that’s going to attract capital on its own discrete basis based on the company’s having to have the technology and either have it or you don’t you have to have it. So that certainly created a level of disruption in the market. And I’d say disruption on a number of levels, because you know, a good amount of the competitors that came in have already gone out of already gone out of business. Just because capital comes into a market doesn’t mean its smart money that comes into the market. So that’s been a bit of what we’ve seen in transportation and in construction to an extent as well. You know, construction is such a large and fragmented business really on a global basis that I would say that’s been less disruptive. But those are the two places, Jonathan, where we’ve seen capital come in?

Thank you.

Your next question comes from the line of Jason Celino with KeyBanc. Your line is now open

Hey, guys. Thanks for taking my question. Really just one for me. When you talk about your operational focus and some of the changes you’re making? How should we think about the pace that’s changed? And is this going to be a multi quarter kind of an initiative or an ongoing kind of just focus?

Well, that’s thematic level I’d say it’s an ongoing focus. So and we’ve defined our strategy as we call it, connect and scale 2025. We work backwards from what we see as the 2025 opportunity in our business to get to that 2025 strategy, we were installing an operating system that simultaneously looks at strategy, people and execution. And we talk about renewing the culture at Trimble, the Foundation which is built upon inspire, engage and achieve, we inspire purpose, we engage to get the best out of one another and we orient to achieve outcomes, that I would say is an ongoing thing for us and don’t intend to change that in the coming months, quarters, years I’d call that the constant as we move forward. To get to your question about let’s say, what would change and what you should expect? Certainly, we will be talking – continue to be talking about the subscription business models and that’s something you know, we’ll continue to update investors on. That’s why we think it’s the right thing to do in the second half of the year is to have another Investor Day, you know, David and myself being new into the respective roles, and we’re talking about model conversions. It just sets up a logical timing to do that in the second half a year to get more specific about what that means on a mid to long-term basis. So that would be probably the thing I would point out in terms of to, you know, watch for the ongoing commentary around. Otherwise, the rest of what I talked about, I would say is ongoing.

Okay, great. You know that’s really helpful. Thank you.

You bet.

Your next question comes from the line of James Faucette with Morgan Stanley. Your line is now open.

Hi, team this is Erik on for James. Thanks for taking our question. Maybe just touching on the 2025 strategy and kind of how you’re thinking about the portfolio as you’re reviewing it? Are you contemplating or thinking about other potential small exits first as part of the strategy? Is there kind of still general – acquisitive kind of motions that you’re planning and maybe just how we should think about that part of things?

Sure. So when we think about the connect and scale 2025 strategy, when we’re in the, I’ll say the strategy pillar, we’re looking at the nature of the markets that we serve. So we need to be serving markets that have attractive fundamentals, two, we need to have the right solution set just delivering customer value and three, we need to optimize the go-to-market model. Those are the three things we think about within the strategy. So when I look at and we look at the market attractiveness and map that to say, the portfolio of businesses at Trimble and I’d say that axis, the X and Y axis to think about are the 2 by 2 is going to be a financial performance on one axis and strategic fit/slash importance on the other. And great low and low in that matrix is, you know, not the place to be. And so when we think about what makes strategic fit, okay that can have a, you know, its own set of dimensions to it. In aggregate, when we look at the portfolio now there’s maybe 5% of the revenue that we think is relevant to take a harder look at. So 5%, not 10%, not 20% but 5% that does represent potentially a number of businesses and an aggregate and to the extent that I mean we believe that we can be more focused as a team and that really kind of becomes more focused with the management bandwidth [technical difficulty] more focused with capital, but more focused with our bandwidth. You know, we want to put that bandwidth we have to impacting the strategies in those five businesses that we talked about. So that’d be the – let’s say the potential exit side of an analysis in the portfolio from an additive side to the portfolio, I would expect us to be acquiring on an ongoing basis within you know say, constraints of the, you know, the liquidity in the debt structure and right deal, right time. Look at our long baseline, we’ve been an acquisitive company over time, we don’t acquire for the sake of acquiring and to positively impact and affect the strategy as we look to these to define the transformation – digital transformation of the markets we’re serving. Kuebix is of course, an example of that. We had announced there’s three deals in the fourth quarter. So I would expect you know us to be open to the right opportunities over time.

Thanks, that’s really helpful for rightsizing kind of our expectations on that. And then maybe just changing gears a bit, I know that you touched on like the phase one China-US trade deal of not having much of an impact to improvement and kind of conditions that your customers are seeing. What do you think needs to change to actually have an impact there? Maybe how you’re thinking about that?

I think it’s relatively simple. We move from the phase one signed piece of paper to purchases happening – purchases happen, inventory goes down, money comes in that is, farm income goes up, capital is outlaid. That’d be the chain I would draw on that. Now in between now and then, what we would see it say, on a positive side or positive side for Trimble is that equipment in the field is ageing. And the nature of the technology we have can make that equipment more productive. So we do look to upgrade technology that’s in the field and we’re not just dependent on new machines coming off the line certainly helps when your machines come out into the market, but the majority of our business – the strong majority of our business is an aftermarket business. And I should add for context, as you think about you know, modeling us. Our agriculture business in North America is now a minority of our business in Ag you know, we did used to be two-thirds, North American business it’s now inverse of that of the bulk you know, Europe’s now our largest market. So we’ve diversified geographically over these last few years in the agriculture business, that’s how we think about the trade deal. So I’ll be – it’s clearly a good thing that we have the deal and, you know, now let’s, it needs to play out.

Got it, that makes sense. Thank you.

Your next question comes from the line of Colin Rusch with Oppenheimer. Your line is now open.

Thanks so much. You know with these comments around a fifth franchise and autonomy, can provide some additional detail on what that franchise looks like? Should we expect it to become a separate business line at some point and how are the capabilities can be separated out from the existing businesses?

Hi, Colin. So if we think about that – let me work backwards from the market opportunity that we see and we see a set of markets and capabilities we can serve on highway and then off highway. If you think about off highway, what we do in agriculture and construction, we call machine control and guidance. So that’s a level between level one and two autonomy already today. We just never called it on autonomy. So the nature of the guidance is already on a spectrum of autonomy. And we’ll continue to work our way up that spec – autonomous spectrum towards the level five. And we think the way to get there is to extend automation into workflows and you know, both in agriculture and in construction. And we also think when you bring together the whole portfolio of Trimble and we talk about connected construction or connected farm and if you really extend that analogy all the way out and we got level five autonomy at some point in time, those machines need to know what to do. They need a work order, they need a plan, they need to fit inside some other system. And guess what, we have those systems by virtue of the connection on the physical and digital field, the office, the hardware and the software that we do today. We think we’re really well positioned to do that. And so we’re bullish on the opportunity we have there. When we look at the on highway world, you know we’ve been arguably a contiguity, a supplier of high definition mapping systems. We sell a positioning stack of technologies you can trace back the 41 year history of Trimble and our routes and positioning technologies. So whether it’s RTK or RTX providing correction services…

Thanks so much. And then just looking at the cash conversion that continues to be strong. And you know, in an environment where you’ve got persistently low cost to capital and the debt markets, you know, how does that impact your acquisition strategy and the potential to acquire some significant capabilities as you work towards this connected scale target over the next five years? I mean, are there transformational, you know, acquisitions that you’ve done and built into an infrastructure that can be replicated in other segments, particularly on the transportation side?

Well, we’re certainly open to it if it’s the number is clearly if it’s consistent with the strategy. We’ve been in an – investment grade and so we’d like to maintain the investment grade status, that right sort of bounce that leverage to the parameters. Of course, you can go above that and work your way down there and in due course. You know, we think we are strategically positioned and very attractive place in all of – really in all the end markets that we serve, and we want to continue to lead those end markets that we serve. And so to the extent the transformative deals present themselves, we would certainly be open to it again if it fits the strategy and that fits the right team and the right culture fit and if our businesses are going to place to, you know, to be ready to absorb the work to do that. And I will say by way of context or backdrop on the markets we’re in, really not a lot of deals that are more companies out there that actually kind of hit the threshold of that size. And we talked about that more in construction, we have in transportation, but say in the construction market, you know, within about a 18 month – 12-month to 18-month time span of when we did the Viewpoint and e-Builder deals that small set of companies that we’re operating at scale where largely are acquired in pretty short order. We look at markets like agriculture, there’s really, you know, if you’re looking at Ag software company and there’s not Ag software companies of scale, and then you get to transportation, which is where you are and there’s a few, but many.

Perfect, thanks so much guys.

This concludes our Q&A session. I will now turn the call over back to Mr. Michael Leyba.

Thank you, everyone for joining us on the call. We’ll look forward to speaking to you again next quarter.

Ladies and gentlemen, this concludes today’s conference call. Thank you for the streaming. You may now disconnect.