UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

      (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the fiscal year ended December 29, 2000

                                       OR

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
           For the transition period from _____________ to ___________

                         Commission File Number: 0-18645

                           TRIMBLE NAVIGATION LIMITED
             (Exact name of Registrant as specified in its charter)

            California                                  94-2802192
--------------------------------           ------------------------------------
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization) 

 645 North Mary Avenue, Sunnyvale, CA                       94088
---------------------------------------    ------------------------------------
(Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (408) 481-8000

        Securities registered pursuant to Section 12(b) of the Act: NONE

                 Securities registered pursuant to Section 12(g)
                                  of the Act:

                                  Common Stock
                         Preferred Share Purchase Rights
                                (Title of Class)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The  aggregate  market  value  of the  registrant's  Common  Stock  held by
non-affiliates of the registrant was  approximately  $480,406,000 as of March 9,
2001,  based on the closing  sale price of the common  stock on the NASDAQ Stock
Market for that date.

     There were 24,247,608  shares of the  registrant's  Common Stock issued and
outstanding as of March 9, 2001.

                       DOCUMENTS INCORPORATED BY REFERENCE


     Items 10, 11, 12 and 13 of Part III  incorporate  information  by reference
from  the   registrant's   Proxy  Statement  for  its  2001  Annual  Meeting  of
Shareholders  to be held on May 10,  2001.  Except with  respect to  information
specifically  incorporated by reference into this Form 10-K, the Proxy Statement
is not deemed to be filed as a part hereof.



<PAGE>

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act of  1934.  Actual  results  could  differ  materially  from  those
indicated in the forward-looking  statements as a result of the risk factors set
forth in, or  incorporated  by reference into, this report and other reports and
documents that the Company files with the  Securities  and Exchange  Commission.
The Company has attempted to identify forward-looking  statements in this report
by placing an asterisk (*) before paragraphs containing such material.

                                     PART I


Item 1.           Business

General

     Trimble  Navigation  Limited, a California  corporation  ("Trimble" or "the
Company"),  develops,  manufactures, and distributes innovative products enabled
by  Global   Positioning   System   ("GPS"),   optical,   laser,   and  wireless
communications   technology.   We  provide  end-users  and  Original   Equipment
Manufacturers   (OEM's)  with  solutions  for  diverse  applications   including
agriculture,  engineering and construction,  fleet and asset management, timing,
automobile  navigation,  and  military.  Our principal  products,  which utilize
substantial amounts of proprietary software and firmware, are integrated systems
for  collecting,  analyzing and utilizing  position data in forms  optimized for
specific end-user applications.

     In July 2000,  Trimble  completed the acquisition of Spectra  Precision,  a
wholly owned business (the "Spectra  Precision Group" or "SPG"),  formerly owned
by a  subsidiary  of Thermo  Electron  Corporation.  This  acquisition  provides
Trimble with optical and laser based  positioning  solutions  for two of our key
strategic   markets,   and  enhances  the  Company's   sales  and   distribution
capabilities.

Background

     Trimble   provides   positioning   solutions   through  three   fundamental
technologies:  GPS, optical, and laser. Precise  determination of locations both
on  and  above  the  earth's  surface  is  a  fundamental  requirement  in  many
applications and industries.  For example,  position data is used for navigation
on land,  sea and air,  and to  conduct  surveys,  draw  maps,  and guide  heavy
machinery.   Position   solutions   are  used  in  many   industries   including
construction,   engineering,   agriculture,   trucking,  maritime,   automotive,
aviation,  fleet and asset management,  consumer,  mobile appliances,  military,
in-vehicle  navigation,  timing, and recreation.  Previous position technologies
limited users to the simultaneous determination of only two dimensions--latitude
and  longitude--while  altitude and time  required  separate  measurements  with
different  equipment.  Global Positioning Systems can complement or replace many
other forms of electronic  navigation and positioning  data systems.  GPS offers
major advantages over prior technologies in terms of ease of use, precision, and
accuracy, with worldwide coverage in three dimensions,  in addition to providing
time and velocity measurement  capabilities.  GPS technology provides users with
latitude, longitude, altitude and time measurements using a single solution.

     GPS is a system of 27 orbiting Navstar satellites established and funded by
the U.S.  government,  which have been fully  operational  since March 1995. GPS
positioning  is based  on a  trilateration  technique  that  precisely  measures
distances from three or more Navstar  satellites.  The  satellites  continuously
transmit precisely timed radio signals using extremely accurate atomic clocks. A
GPS receiver calculates distances from the satellites in view by determining the
travel time of a signal from the  satellite to the  receiver.  The receiver then
trilaterates its position using its known distance from various satellites,  and
calculates  latitude,  longitude and  altitude.  Under normal  circumstances,  a
current  stand-alone GPS receiver is able to calculate its position at any point
on earth, in the earth's  atmosphere,  or in lower earth orbit, to approximately
10 meters,  24 hours a day.  When a GPS  receiver  is coupled  with a  reference
receiver with known precise  position,  accuracy of less than ten centimeters is
possible. In addition, GPS provides highly accurate time measurement.

     * The usefulness of GPS is dependent upon the locations of the receiver and
the GPS  satellites  that are above the horizon at any given  time.  The current
deployment  of 27 satellites  permits  three-dimensional  worldwide  coverage 24
hours a day. However, reception of GPS signals requires line-of-sight visibility
between  the  Navstar  satellites  and the  receiver,  which can be  blocked  by
buildings,  hills and dense  foliage.  For the  receiver to collect a sufficient
signal,  the receiver must have a line of sight to at least three  satellites in
order to determine its location in two  dimensions--latitude  and longitude--and
at least four  satellites  to  determine  its  location  in three  dimensions  -
latitude,  longitude,  and altitude.  The accuracy of GPS may also be limited by
distortion of GPS signals from ionospheric and other atmospheric conditions, and
intentional or inadvertent signal  interference or Selective  

                                       2

<PAGE>


Availability (SA).Selective Availability, which was the largest component of GPS
distortion,  is controlled by the U.S.  Department of Defense and on May 1, 2000
was  deactivated.  Selective  Availability may be implemented at any time by the
U.S.  Department of Defense in order to deny hostile forces the highly  accurate
position,  time and velocity  information  supplied by GPS. In certain  military
applications,  classified  devices are utilized to decode the SA  component  and
compute an undegraded solution.

     By using a technique  called  "differential  GPS" involving two or more GPS
receivers, position accuracies can currently be improved to approximately one to
three meters for navigation,  sub-meter for precision positioning, and less than
ten  centimeters  for survey and machine  guidance  applications,  even if SA is
activated.  This  technique  compensates  for a number of potential  measurement
distortions,  including  distortions caused by ionospheric and other atmospheric
conditions,  as well as distortions  intentionally introduced into the satellite
data itself,  such as SA.  Differential  GPS involves  placing one receiver at a
known location and continuously comparing its calculated location with its known
location to measure  distortions  in the signal  transmission  and errors in the
satellite  data. At any one time,  most  distortions  and errors are  reasonably
constant  over large  areas,  so that one or more remote GPS  receivers  can use
these  measurements  to correct  their own  position  calculations.  Measurement
corrections can be transmitted either in real-time over a suitable communication
link such as radio or telephone,  or integrated later with accumulated  data, as
is in some highly precise scientific applications.

     * Each of  Trimble's  GPS  products is based on  proprietary  GPS  receiver
technology.  Trimble's GPS  receivers are capable of tracking all  satellites in
view and automatically selecting the optimum combination of satellites necessary
to provide the most accurate set of measurements  possible. GPS positioning data
is most useful when  presented,  communicated,  and managed in an efficient  and
functional  manner.  The  recent   technological   convergence  of  positioning,
wireless,  and information  technologies enables significant new capabilities in
positioning  systems.  GPS data  coupled  with  value-added  functionality  from
wireless   communications,    information   technology,    non-GPS   positioning
technologies  and customized  user  interfaces  can provide a complete  position
solution.   In  addition,   recent   developments  in  wireless  technology  and
deployments of wireless  networks have enabled more efficient and less expensive
wireless  communications.  Such  developments  allow for the rapid and efficient
transfer of GPS data to locations away from the GPS field device, improving data
usefulness  and  functionality  by making the data  accessible  to an  increased
number of users.  Accessing,  delivering and using position-centric  information
efficiently  can result in significant  productivity  increases to the end-user.
With  the  convergence  of  GPS  and  advanced   information  and  communication
technologies,  Trimble is focused on  creating  integrated  application-specific
systems that solve end-user  problems in targeted markets by optimizing  product
features and functionality and increasing end-user productivity,  thus providing
a complete value-added positioning solution.

     *  Navstar   satellites  and  their  ground  support  systems  are  complex
electronic  systems  subject to electronic and mechanical  failures and possible
sabotage. The satellites were originally designed to have lives of 7.5 years and
are subject to damage by the hostile  space  environment  in which they operate.
However,  of the current deployment of 27 satellites in place, some have already
been in place for 12 years and they have an  average  age of 6 years.  To repair
damaged or malfunctioning  satellites is currently not economically feasible. If
a significant number of satellites were to become  inoperable,  there could be a
substantial  delay before they are replaced with new satellites.  A reduction in
the number of operating  satellites  would impair the current utility of the GPS
system  and the  growth of  current  and  additional  market  opportunities.  In
addition,  there  can be no  assurance  that the  U.S.  government  will  remain
committed to the operation and maintenance of GPS satellites over a long period,
or that the policies of the U.S.  Government  for the use of GPS without  charge
will remain unchanged. However, a 1996 Presidential Decision Directive marks the
first time in the  evolution  of GPS that  access for  civilian  use has a solid
foundation in law. Because of  ever-increasing  commercial  applications of GPS,
other U.S.  Government agencies may become involved in the administration or the
regulation of the use of GPS signals.  Any of the foregoing factors could affect
the willingness of buyers of the Company's  products to select GPS-based systems
instead of products  based on competing  technologies.  Any resulting  change in
market demand for GPS products could have a material adverse effect on Trimble's
financial results. In 1995, certain European government  organizations expressed
concern  regarding  the  susceptibility  of  GPS  equipment  to  intentional  or
inadvertent  signal  interference.  Such concern  could  translate  into reduced
demand for GPS products in certain geographic regions in the future.

     Laser and optical products measure  distances very accurately by means of a
light beam.  Trimble generally uses laser diodes to create laser light beams for
its  applications.  The light  emitted by lasers is more  concentrated  around a
single  frequency  than  conventional  light  sources,  allowing a more accurate
distance measurement.

                                       3

<PAGE>


Business Strategy

     Trimble's  strategy is to leverage our expertise in GPS and other  position
solutions,  coupled with information and communication technologies to provide a
comprehensive product offering to our customers. Our primary objectives are:

     * Focus on growth  markets.  We target  markets  which  offer the  greatest
potential for growth,  profitability,  and a leadership position.  Currently, we
focus on four market segments: Engineering and Construction,  Agriculture, Fleet
and Asset  Management and Component  Technologies.  In addition,  we serve other
smaller  markets and manage  these as the  Portfolio  Technologies  segment.  We
believe  these  market  segments  can be  characterized  by a need for  improved
productivity,  lower cost,  and better  information.  We intend to  continuously
evaluate and identify new market segments as well as numerous  specific vertical
markets  within  each of  these  segments  as  driven  by new  applications  and
development of our technology.

     * Continue to provide  innovative,  differentiated  product solutions.  Our
objective  is  to  continuously   provide  innovative   solutions  that  deliver
significant  value to our  end-users.  We intend to maintain our leading  market
position  through  research  and  development  spending  which  provides us with
products  differentiated  through software,  hardware,  and application specific
features.   Trimble  intends  to  pioneer  advances  in  positioning   component
technology,  continuing  to  improve  the state of the art in size,  power,  and
sensitivity.   In  addition,   we  will  target   solutions  aimed  at  specific
applications.  Also, we intend to leverage the intellectual  property  resulting
from these efforts through licensing to third parties.

     * Develop  products  that  integrate   communications   technologies.   In
developing  our  products  we  intend  to  integrate   within  our  markets  the
functionality  brought about by the  convergence of positioning,  wireless,  and
information  technologies.  We seek to  combine  these  technologies  to  create
products that provide end-users with comprehensive positioning solutions,  which
enable the real-time  management of  information  and enhance  productivity  and
efficiency.

     * Leverage extensive  distribution network across vertical markets. We have
established  an  extensive  distribution  network  across  our  targeted  market
segments  with strong  customer  relationships.  Our recent  acquisition  of the
Spectra Precision Group served to extend our reach into new market segments both
domestically and internationally. We intend to further leverage our distribution
channels  vertically and across market segments in order to access  customers in
different business areas and geographic regions.

     * Continue pursuing strategic  alliances.  Strategic alliances have been an
essential  component of our success thus far. We have established such alliances
with companies including  Caterpillar,  Inc.; CNH Global N.V.; Honeywell,  Inc.;
Mannesmann   Telecommunications   (formerly   Phillips  Car   System);   Siemens
Corporation;  Nortel  Networks  Limited;  Blaupunkt-Werke  GmbH,  a wholly owned
subsidiary of Robert Bosch GmbH (Bosch);  and Brience Inc.  These  relationships
have  enhanced  our  ability to enter new  markets,  develop  new  products  and
strengthen our distribution  network.  As a result,  we have gained  substantial
market share and penetration and secured our position within target markets.  As
our markets develop and new markets  emerge,  we believe it will be critical for
us to continue to forge and maintain strategic alliances. As our industry grows,
we may take advantage of acquisition opportunities, which complement our product
portfolio,  expand our technology,  enable us to enter new markets,  or solidify
our current market position.  Additionally,  we may use acquisitions to increase
our customer base and facilitate  our entry into new markets.  In each case, our
focus  will  be  to  leverage  existing  technologies,   distribution  networks,
marketing resources, and to identify and achieve synergies.

INDUSTRY SEGMENTS

     Trimble  operates in five primary  industry  segments that are increasingly
deploying a variety of positioning-based  solutions,  including: (i) Engineering
and  Construction,  (ii)  Agriculture,  (iii) Fleet and Asset  Management,  (iv)
Component Technologies, and (v) Portfolio Technologies.

     We  design,   market,  and  distribute   products  that  determine  precise
geographic location combined with data communications and applications software.
We sell our  products  through a  network  of  direct  salespeople,  independent
dealers,  distributors and authorized sales  representatives  supported by sales
offices throughout the world.

     Research and development  activities are conducted at Trimble's  facilities
in Sunnyvale,  California;  Dayton, Ohio; Atlanta, Georgia;  Corvallis,  Oregon;
Westminster,  Colorado; Danderyd, Sweden; Christchurch, New Zealand

                                       4

<PAGE>


and in Jena,  Munich and  Kaiserslautern in Germany.  Solectron  Corporation and
Solectron   Federal  Systems,   Inc.   (collectively,   "Solectron")   currently
manufactures most of Trimble's GPS products.  We also have production facilities
in Danderyd, Sweden, Jena and Kaiserslautern in Germany and Dayton, Ohio for the
manufacture of our optical and laser products.

     To achieve distribution,  marketing,  production, and technology advantages
for  our  targeted  markets,   we  manage  our  five  industry  segments  within
corresponding  divisions.  To focus on market needs, we manage our five industry
segments  through a  divisional  structure.  Each  division is  responsible  for
strategy,  sales and marketing,  product development and financial  performance.
Each division is headed by a General Manager.

     Although we believe that these divisions have growth potential for sales of
our products,  there can be no assurance  that such  divisions  will continue to
grow,  particularly  given that GPS-based systems are still in an early stage of
adoption in some of these markets.  Our future growth will depend on our ability
to develop  the  industry  markets  in which we  currently  compete,  and on our
ability to continue to identify and exploit new markets for our products.

Engineering and Construction

     We continue to focus on the large market  opportunities  in the Engineering
and Construction  market segment.  In addressing this market segment,  we employ
all of our key technologies to develop and introduce  position-based  solutions,
including  GPS,  optical,   laser,  wireless  communication  and  software-based
information  technologies.  We currently  offer a range of hardware and software
products that are used by survey and construction professionals in the field for
determining  position data  collection,  field computing,  data management,  and
automated  machine guidance and control.  These products  provide  solutions for
numerous construction applications,  including: surveying; general construction;
site preparation and excavation;  road and runway construction;  and underground
construction.

     Our  engineering  and  construction  products  reduce  the need for  manual
calculations  and operations in the field,  thereby  improving  productivity and
providing  significant potential cost savings that can be achieved by decreasing
project  completion  times and reducing the need for rework resulting from human
error.  Building on our leadership  position in the construction arena, our goal
is  to  provide  comprehensive   "field-to-office"  solutions  that  enable  our
end-users to tightly integrate field  construction  operations with their office
information systems through the use of our positioning,  wireless  communication
and   software   technologies.   We  believe  that   considerable   productivity
improvements  and cost  savings  can be  achieved  by such  solutions  that will
effectively   streamline  the  use  of  information  in  the   engineering   and
construction  process,  from project concept to completion.  For example, if the
field and the office are tightly  integrated,  data collected and created in the
project  feasibility  phase can be used and modified in the design  phase.  Data
resulting  from  the  design  phase  can be used to  automate  processes  in the
construction  phase.  Finally,  data collected from the construction site can be
used not only for important  monitoring  purposes,  but also to effect  required
design  changes back at the office,  which can then be implemented in the field.
By  providing  complete  solutions  that  link the field to the  office  through
positioning,  wireless and software technologies, we believe that we will enable
the end-users of our products to achieve  significant cost savings from reducing
rework costs,  shortening  project  schedules and improving  project  monitoring
capabilities.

Products

The  following  is a  table  of some of the  key  Engineering  and  Construction
products.

--------------------------------------------------------------------------------
        Product                           Description
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 GPS Total Station 5700   Provides surveyors and civil engineers with innovative
                          features that bring a new level of confidence, speed 
                          and efficiency to the construction cycle.  With the 
                          intuitive, easy-to-use Trimble Survey Controller(TM)
                          field software and Trimble Geomatics Office Software,
                          survey and design tasks are unified in one powerful 
                          system.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
  5600DR 200+             A powerful reflectorless optical surveying instrument.
                          Surveyors can survey previously unreachable objects of
                          over 200 meters away without a reflector.  The
                          instrument can, in its robotic version, be operated
                          remotely which enables one operator to execute all
                          applications without assistance.
 -------------------------------------------------------------------------------

                                       5

<PAGE>

--------------------------------------------------------------------------------
        Product                           Description
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 SiteVision(TM)           A grade control system for the construction market 
                          that combines a ruggedized on-board computer, a high 
                          precision dual frequency receiver, two duel frequency
                          GPS antennas, three light bars and a radio that
                          provides a complete solution to help bulldozer 
                          operators increase productivity in a stakeless
                          environment.
 -------------------------------------------------------------------------------

Agriculture

     In today's competitive  agriculture market, where low cost producers have a
significant  advantage,  efficient  field  operation and data  management can be
critical to success.  We provide high  accuracy,  real-time  positioning,  water
management,  machine  guidance  and field  management  solutions  to enhance the
productivity  of  agricultural  assets,  both land and  equipment.  Our products
provide key  advantages in a variety of agriculture  applications,  primarily in
the areas of precise land  leveling,  machine  guidance,  yield  monitoring  and
variable-rate applications of fertilizers and chemicals. By improving monitoring
capabilities  and  reducing  the  margin  for  human  error,  our  products  can
significantly  improve  productivity and enhance crop yields.  For example,  our
GPS-based  machinery  guidance  systems  and  field  monitoring  systems  enable
machinery  operators to achieve  improved  accuracy  when planting row crops and
applying  fertilizers  and chemicals.  In addition,  machine  utilization can be
significantly improved.

     * We believe that there is considerable  growth opportunity in this market,
which is in the early  stages of adopting  position-based  solutions.  Given the
recent introduction of the technology, the market is relatively unpenetrated. To
date,  machine  guidance  systems have  primarily been sold and installed in the
aftermarket. Original equipment manufacturers are increasingly integrating these
capabilities  into new  machines.  We  believe  that we are well  positioned  to
address  the  opportunities  in the new  equipment  market as the  result of our
strategic alliance with CNH Global (formerly Case Corporation), a leading global
manufacturer and distributor of agricultural  equipment.  Since 1997, CNH Global
has utilized our GPS receivers for advanced  farming  systems.  Our customers in
the agriculture market segment include family farmers,  commercial growers, crop
consultants, equipment manufacturers, farm centers and service providers.

Products

The following is a table of some of the key Agriculture products.

 -------------------------------------------------------------------------------
        Product                           Description
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 AgGPS(R)132              Farmers use the AgGPS 132 to tag soil type, insect 
                          infestation, or crop yield information with precise,
                          sub-meter location data. Mapping this data highlights
                          problem areas and helps farmers target their use of 
                          agricultural products, saving money and increasing 
                          productivity.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 AgGPS(R)Parallel         Provides farm equipment operators with precision 
 Swathing Option          guidance information for driving straight rows during
                          field preparation, planting, and agricultural product
                          applications.  The system works under any condition -
                          day or night, dust or fog, wind or rain - allowing
                          farmers to extend hours for chemical spraying, lime 
                          and fertilizer application, tilling, and seedbed 
                          preparation.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 AgGPS(R)Autopilot        A system that automatically steers tractors to within
                          inches for row-crop applications. The driver, with 
                          hands-free operation, can now concentrate on working
                          the implements for listing, bed preparation, planting
                          and cultivating.  This technology breakthrough 
                          translates into increased productivity for the farmer
                          through more efficient utilization of tractors and 
                          extended working hours.
 -------------------------------------------------------------------------------

                                       6

<PAGE>

 -------------------------------------------------------------------------------
        Product                           Description
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Laser-based Water        Laser-based water management allows the agricultural 
 Management Systems       industry to make topographical maps of their fields,
                          design solutions for drainage or irrigation, and 
                          control the machines that grade the land using a 
                          rotating plane of laser light. Growers almost always
                          have either too much water or too little  water to
                          grow a crop.  Landleveling and farm tile drainage is a
                          high productivity long-term investment for a grower to
                          guarantee consistent crops at high yields.
 -------------------------------------------------------------------------------

Fleet and Asset Management

     Our Fleet and Asset Management  segment includes the mapping and GIS market
and the mobile  positioning and communications  market.  These markets have been
aggregated,  as the products have similar  technologies and address a converging
customer base.

     We integrate  our wireless,  GPS and  information  technologies  to provide
solutions for a variety of applications in fleet  management and asset tracking.
Our products enable end-users to efficiently monitor and manage their mobile and
fixed assets by communicating  location-relevant and time-sensitive  information
from the  field to the  office.  The key to these  applications  is not just the
ability to accurately locate assets, but also the ability to rapidly collect and
transfer  a wide  range of  asset-related  data from the field to the office for
monitoring  and  verification,  and  for use in  business  decisions  and  other
analysis.   Depending  on  the  application,   our  solutions  provide  numerous
advantages  to  the  end-user,   including  enhanced   productivity,   increased
efficiency,  reduced costs, and improved safety and security. We currently offer
a range of products  that address a number of sectors of this market:  long-haul
trucking; public safety vehicles;  municipal fleet management;  marine shipping;
and fixed asset data collection for a wide variety of  governmental  and private
entities.

     Our mobile  asset  management  products  offer a range of asset  management
solutions,  including  a turnkey  satellite-based  solution  for  vehicle  fleet
management  that  provides all the  functionality  necessary to actively  manage
vehicles  in the field,  including  position  and event  reporting  and  two-way
messaging  capabilities.  Using our mobile asset management products,  end-users
can effectively track the movement of their vehicles,  employees,  and goods and
services.  This enables them to make  real-time,  informed  decisions  regarding
asset  utilization,  which  can  enhance  productivity  and  profitability.  For
example,  positioning  data enables  end-users to route  vehicles in their fleet
more  efficiently,  reducing vehicle  downtime,  and potentially  increasing the
number of deliveries or trips per vehicle.  In addition,  these  improvements to
vehicle management can result in more efficient vehicle  maintenance and reduced
misuse of vehicles. Finally, end-users can be more responsive to their customers
by  more  effectively  managing  their  mobile  resources  and  providing  their
customers  with more  detailed  information  on the  location  of  products  and
services.

     With respect to fixed asset  tracking,  the combined forces of the Internet
and deregulation of  telecommunications  are providing asset-rich  organizations
such as utilities,  natural  resource-based  entities and local governments with
access to timely and accurate  data on their field  assets.  Our  customers  are
discovering  improvements to their customer  service and operating  efficiencies
resulting  from the provision of their spatial asset data,  both internal to the
organization  and via the  Internet.  One key to this market is the creation and
maintenance  of GIS  databases.  Our range of GPS based GIS data  collection and
maintenance  products enable these organizations to cost effectively capture and
maintain the features and attributes of their field assets.

     As with our other  targeted  market  segments,  we  believe  that  there is
considerable growth opportunity in this market,  which is in the early stages of
adopting  positioning-based  solutions.  Currently,  mobile  resources are often
tracked using inefficient and incomplete systems such as wireless telephones and
pagers.  We believe that  penetration of GPS-based  positioning  systems in this
market  segment  will  accelerate  as the  cost of such  systems  decreases  and
functionality increases.

                                       7

<PAGE>

Products

The following is a table of some of the key Fleet and Asset Management products.

 -------------------------------------------------------------------------------
        Product                           Description
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Pathfinder Pro Family    The GPS Pathfinder(R)Pro XR and Pro XRS Systems are
                          easy-to-use GIS data collection and maintenance
                          systems that provide real-time submeter accuracy. 
                          These powerful systems are used in a wide range of
                          applications, including utility asset management, 
                          environmental monitoring, scientific research, 
                          hazardous waste clean-up, municipal asset management,
                          and natural resource management.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 CrossCheck(R)Product     A cellular mobile unit - the first device to combine
 Family                   GPS, cellular, and computing technologies onto a 
                          single module - provides a more efficient, cost-
                          effective asset and route management tool for fleet
                          management.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 GeoExplorer(R)3          A data collection and maintenance system that provides
                          the industry's most rugged and technologically 
                          advanced handheld GPS solution available for creating
                          and maintaining GIS databases for management of
                          utility, urban, and natural resources.
 -------------------------------------------------------------------------------

Component Technologies

     As a leading provider of GPS components,  we currently market our component
products  through an  extensive  network of OEM  relationships.  These  products
include proprietary  chipsets,  modules and a variety of intellectual  property.
The  applications  into which  end-users  currently  incorporate  our  component
products include:  timing  applications for synchronizing  wireless and computer
systems;   in-vehicle  navigation  and  telematics  systems;  fleet  management;
security  systems;  data  collection  systems;  and wireless  handheld  consumer
products.  Our timing products are used in applications  such as wireless clocks
and   network   synchronization.   We   provide   timing   products   to   major
telecommunications infrastructure suppliers such as Nortel Networks and Glenayre
Technologies.

     * We believe that technological advances in component technology, including
reduced  size,  cost and power  consumption  and increased  functionality,  will
continue  to drive GPS into a  variety  of new,  high  volume  applications.  In
particular,  as GPS-based timing and location  information  becomes available at
reduced  cost, it will migrate from current  commercial  uses to the high volume
consumer markets.  The following is a selected list of some of the products that
we believe will incorporate GPS functionality: wireless handheld products (smart
phones,  pagers,  E911/SOS  phones,  child and  personal  locators);  automobile
products  (in-car  navigation  systems,  car security  systems,  auto  emergency
response  systems,   telematics  systems);   PC-based  products   (autoPC/in-car
computers,  portable PCs, PDAs and other wireless devices); and general consumer
and marine products  (recreational  and  entertainment  products,  wristwatches,
portable navigation systems, marine handheld systems, pet locators).

     * Our in-vehicle  navigation and telematics  technologies  are sold to OEMs
that sell  directly  to  automobile  manufacturers,  including  Pioneer,  Bosch,
Blaupunkt,  Siemens AT,  Mannesmann  Group  (formerly  Philips Car System),  and
Magneti  Marelli.  Automobile  manufacturers  that currently  purchase  products
incorporating  our  GPS  technology  include:  Alfa  Romeo,  BMW,  Fiat,  Honda,
Mercedes,  Opel, Porsche,  Renault,  Toyota, and VW/Audi. Japan is currently the
world's  largest GPS automobile  navigation  system  market,  with Eurpoe as the
second largest market. To date, GPS automobile  navigation system penetration in
the U.S.  market  has been  relatively  low due to high  prices  and the lack of
digital maps. In 1998,  however, a number of automobile OEMs in the U.S. started
making  navigation  and  emergency  response  systems  standard in some high-end
vehicles,  such as the GM OnStar  system for  Cadillac.  We believe  that in-car
navigation  systems will eventually become commonplace as system prices continue
to decline.

     * The largest  domestic  consumer  market for GPS components is expected to
become the  wireless  handset  market.  The FCC has  mandated  that all cellular
phones  must  identify  their  location  to within 125 meters for 911  emergency
calls.  This  Enhanced  911 (E911)  mandate  takes effect in October 2001 and is
creating the need for the wireless  carriers and handset  manufacturers  to find
ways to meet the mandate's  requirements.  GPS technology provides an attractive
solution to meet or exceed the  requirements  of the E911  mandate.  This market
will require very small, low-cost GPS components that consume very little power.
We believe that we are well positioned to 

                                       8

<PAGE>

address these requirements and other high volume consumer applications.  We were
the first GPS company that provided  components  used in a GPS-enabled  consumer
Personal  Digital  Assistant  (PDA)  product,  known  as the  Locatio,  which is
manufactured and marketed by Seiko Epson in Japan.

Products

The following is a table of some of the key Component Technologies products.

 -------------------------------------------------------------------------------
        Product                           Description
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 FirstGPS(TM)             Specifically developed for power-sensitive mobile
                          information devices such as laptops, PDAs, digital
                          cameras, smart phones, pagers and automobile 
                          navigation systems.  The architecture allows high-
                          volume manufacturers of consumer products to add GPS
                          location with minimal impact on the device's size or 
                          battery life.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Thunderbolt(TM)          A GPS clock designed specifically for precision timing
 GPS-disciplined Clock    and synchronization of wireless networks. Wireless
                          systems need precise timing to optimize use of their 
                          assigned radio spectrums across wide geographic areas.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 GPSTM CDMA Clock         A GPS clock supplied to Nortel Networks for CDMA base
                          station synchronization.  Nortel Networks is expanding
                          the use of GPS clocks to other air interfaces besides
                          CDMA.
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Lassen(TM) LP GPS        A miniature, low-power GPS receiver module for 
                          battery-powered applications.  It is ideal for
                          embedding GPS in portable devices such as PDAs,
                          personal communication systems, data terminals, 
                          recorders and instrumentation units.
 -------------------------------------------------------------------------------

Portfolio Technologies

     This segment is comprised  of several  markets that use accurate  position,
velocity,  and timing  information.  The products in this segment are navigation
modules and embedded  sensors that are used in  avionics,  flight,  and military
applications.  This segment is an  aggregation of various  operations  that each
equal less than ten percent of the  Company's  total  operating  revenue.  Also,
included  in  this  segment  are  the  operations  of our  Tripod  Data  Systems
subsidiary for the period November 14, 2000 through December 29, 2000.

     On March 6, 2001, the Company sold its Air Transport Systems (ATS) business
to Honeywell. The ATS business was a part of our Portfolio Technologies segment.
The sale to Honeywell  consisted of the Trimble 8100,  the HT 9100 and two other
product lines, which were included in the ATS business.

Products

The following is a table of some of the key Portfolio Technologies products.

--------------------------------------------------------------------------------
TA-12(TM)                 A high-performance, all-in-view, PPS GPS receiver for
                          military aircraft operating within the US National
                          Airspace System.  The TA-12 receiver is FAA TSO-C129A
                          certified and designed for integration with Flight
                          Management Systems that require Instrument Flight 
                          Rules certified operations.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Force 5 GRAM-S(TM)        An all-in-view, dual frequency PPS embedded GPS
                          receiver card designed for integration with military
                          inertial navigation systems for use on high
                          performance aircraft and missiles.
--------------------------------------------------------------------------------

Sales and Marketing

     Trimble  currently  has a number of  regional  sales  offices in the United
States and Europe, as well as offices in Australia, Canada, China, Dubai, Japan,
Manila,  Mexico, New Zealand,  Singapore and others. The Company has substantial
variation  in the  needs of its  sales  and  distribution  channels  across  its
markets.

                                       9

<PAGE>

     Domestic. Trimble sells its products in the United States primarily through
dealers,   distributors,   and  authorized  representatives,   supplemented  and
supported  by our direct sales force.  We have also  pursued  alliances  and OEM
relationships  with established  foreign and domestic  companies to assist us in
penetrating selected markets.

     International.  Trimble  markets  to  end-users  through a network  of many
dealers and  distributors in more than 85 countries.  Distributors  carry one or
more product lines and are generally limited to selling either in one country or
in a portion of a  country.  Trimble  occasionally  grants  exclusive  rights to
market certain products within specified countries.

     Sales  to   unaffiliated   customers  in  foreign   locations   represented
approximately 52%, 52%, and 46% of Trimble's total revenue in fiscal years 2000,
1999  and  1998,  respectively.   Sales  to  unaffiliated  customers  in  Europe
represented  28%,  25%,  and 25% of net  revenue in such  periods,  and sales to
unaffiliated  customers in the Far East  represented  12%, 14%, and 13% of total
revenue in such periods, respectively.

     Support.  Trimble generally provides a one year warranty on the sale of its
products.  Certain  programs  may require  extended  warranty  periods.  General
warranty  terms for software  sold by our Tripod Data Systems  subsidiary  is 90
days. We support our GPS products on a board replacement level from locations in
the United Kingdom,  Germany, Japan, and Sunnyvale,  California.  The repair and
calibration  of our line of  Optical/Electronic  Surveying,  Laser  and  Machine
Control  equipment  is  available  from  company-owned  or  -funded  facilities.
Additionally over 200 service providers  globally perform warranty  servicing of
our products.  We reimburse dealers and distributors for all authorized warranty
repairs  they  perform.  Trimble  does not derive a  significant  portion of its
revenues from support activities.

Competition

     Within each of our five market segments,  we encounter  direct  competition
from other GPS, optical and laser suppliers.

     In the  Engineering  and  Construction  segment,  the Company faces ongoing
competition  primarily from other GPS and optical vendors,  such as Leica AG and
Topcon  Corporation.  Other competitors  include Magellan  Corporation;  NovAtel
Inc., Sokkia Company, Ltd.; and Nikon Geosystems.

     In the  Agriculture  segment  we face  competition  from  John  Deere,  CSI
Wireless, Starlink, AgSystems, and Topcon Corporation.

     In the  Component  Technologies  segment  high  volume  markets the primary
competitors are Motorola,  Conexant,  and Japan Radio Corporation  (JRC). In the
timing markets, the primary competitor is Symmetricom.

     In the Fleet and Asset  management  segment  we face  competition  from CSI
Wireless, AirIQ, Leica AG; Garmin Corporation; and Magellan Corporation.

     In the Portfolio  Technologies  segment,  we face ongoing  competition from
Rockwell Collins,  Universal Navigation  Corporation,  Canadian Marconi Company,
IIMorrow, Inc. (a division of United Parcel Service of America, Inc.), Honeywell
Incorporated, Smiths Industries, L3 Communications,  Raytheon, Litton Industries
and Alliant TechSystems.

     The  principal  competitive  factors  vary widely from  segment to segment.
Typical   competitive   factors  include  ease  of  use,  size,  weight,   power
consumption,  features,  performance,  reliability  and price. In the commercial
solution   applications,   ease  of  use  and  user  functionality   become  the
differentiating   factors.  We  believe  that  our  products  currently  compare
favorably  with respect to these  factors.  We intend to maintain our leadership
position through:

     o Systems, products and services that have significantly differentiated 
       features with improved benefits to end-users.
     o A strong commitment to new product development.  Trimble currently offers
       more than 100 products and continues to improve and expand the line.
     o Our technology leadership with approximately 490 patents issued.

                                       10

<PAGE>

     o Extensive worldwide distribution.

     * We believe that our ability to compete successfully in the future against
existing  and  additional  competitors  will  depend  largely on our  ability to
provide more  complete  solutions,  as well as products  and services  that have
significantly  differentiated  features with improved cost/benefit ratios to our
end-users.  There can be no  assurances  that we will be able to implement  this
strategy successfully,  or that our competitors, many of whom have substantially
greater  resources,  will not apply  those  resources  to  compete  successfully
against us.

Research and Development

     Our leadership  position in our targeted market segments is the result,  in
large part, of our strong  commitment to research and development.  We invest in
developing positioning and information technologies and wireless communications,
including the design of proprietary  software,  optics,  laser systems,  control
systems,  integrated  circuits,  network  radios,  GPS receivers,  and real time
kinematic  (RTK)  technology.  Trimble  has an  advanced  technology  laboratory
located in  Sunnyvale,  California  where we devote a portion  of our  corporate
research and development expenditures to advancing core positioning technologies
and  integrating  them with  synergistic  technologies  such as  communications,
sensors, and information technologies.

     Significant  portions  of our  research  and  development  are  targeted at
developing  the  products  for a variety  of  applications  that  utilize  these
technologies. Recent examples include:

     o  3-D passive positioning through the use of rotating lasers for the
        construction  market o 5600DR 200+  reflectorless  robotic total station
        for the surveying and construction market 
     o  Crosscheck GSM, integrating cellular and GPS technology for fleet 
        management 
     o  Introduction of an autosteer tractor utilizing GPS and control system
        technology for the agricultural  market. 
     o  The GPS Total Station 5700  incorporating  Trimble's latest RTK 
        technology for surveying and stake  out 
     o  The  FirstGPS  technology,  offering  small,  low-power  GPS  for 
        automotive and other embedded applications.

     Below is a table of Trimble's expenditures on research and development over
the last three fiscal years.

                                             Fiscal Years ended
                           -----------------------------------------------------
                              December 29,        December 31,       January 1,
                                  2000               1999               1999
--------------------------------------------------------------------------------
(In thousands)

Research and development       $ 46,520             $ 36,493            $ 45,763



     * Trimble  expects that a  significant  portion of future  revenues will be
derived  from  sales of newly  introduced  products.  Consequently,  our  future
success  depends in part on our ability to  continue to develop and  manufacture
new competitive products with timely market  introductions.  Advances in product
technology  will require  continued  investment in research and  development  in
order to maintain and enhance our market position.

Manufacturing

     In  August  of 1999,  Trimble  began  outsourcing  the  manufacture  of our
GPS-based  products,  reducing  our need to make costly  investments.  Solectron
Corporation   (Solectron)  currently   manufactures  our  GPS  products  and  is
responsible for nearly all material procurement,  assembly and testing.  Product
design through pilot production remains in the hands of Trimble. While Solectron
is responsible  for most facets of the  manufacturing  process,  we are directly
involved in qualifying vendors and the key components used in our products.

     We manufacture our optical and laser-based  products at four  manufacturing
facilities  located in Dayton,  Ohio;  Danderyd,  Sweden; and Kaiserslautern and
Jena, Germany.  Some of these products and subassemblies are also assembled on a
contract basis.

                                       11

<PAGE>

     In addition, as of December 2000 Trimble maintains a manufacturing facility
in Austin,  Texas,  primarily  focused on FAA certified  products for commercial
aviation and military systems.  As discussed in the industry segment section, as
of March 6,  2001,  we have  sold our Air  Transport  Systems  business  that is
located in Austin, and it is our intent to close our Austin operations in August
of 2001.  At that time,  we will  transfer the FAA  certified  military  systems
business  to  our  manufacturing  facility  in  Sunnyvale,  California.  We  are
currently in the process of transferring our FAA certifications to our Sunnyvale
manufacturing facility.

     While most of the  components  used in our products are standard and can be
obtained from multiple  qualified  manufactures,  some of our key components are
proprietary or sole sourced and require extended lead times. If we were required
to find new vendors for these sole or limited sourced components,  we would have
to qualify replacement  components and possibly  reconfigure our products.  This
qualification  or  reconfiguration  process  could  result in  product  shipment
delays.  Our supply management team works closely with  strategically  important
suppliers who provide sole or limited sourced products.

     We will continue to provide  state-of-the art computer aided design service
capabilities  to our  development  community  relating to printed  circuit board
(PCB) layout,  assembly drawing and schematic  development.  We intend to remain
self-sufficient  in this field to ensure that the development  entities can have
the  maximum  benefit  from the  utilization  of  their  time,  while  including
automatic  test  capability  on the  board,  contributing  to  faster  and  more
effective product release cycles.

Backlog

     Trimble  believes that due to the volume of products  delivered  from shelf
inventories and the shortening of product delivery  schedules,  backlog is not a
meaningful  indicator of future business prospects.  Therefore,  we believe that
backlog information is not material to an understanding of our business.

Patents, Trademarks, and Licenses

     Our success  depends to a significant  extent on technical  innovation.  We
pursue  an  active   program   of  filing   patent   applications   to   protect
technologically   sensitive   features  of  our  products.   We  currently  hold
approximately  370 U.S.  GPS related  patents and  approximately  20 foreign GPS
related  patents that expire at various dates no earlier than 2005. We also have
approximately  100 laser or optical  related  patents  worldwide.  We  currently
license certain peripheral  aspects of our technology from Spectrum  Information
Technologies  and  GeoResearch.  Trimble  may enter  into  additional  licensing
arrangements in the future relating to its technologies.

     At  present  there  are  87  trademarks   registered  to  Trimble  and  its
subsidiaries.   Specifically,   "Trimble"   with  the  sextant  logo,   "Trimble
Navigation,"  "GeoExplorer,"  and "GPS Total Station," are trademarks of Trimble
Navigation  Limited,  registered  in the  United  States  and  other  countries.
"Trimble" with the globe and triangle logo and additional trademarks are pending
registration.  Trimble Navigation  Limited  acknowledges the trademarks of other
organizations  for their  respective  products  or  services  mentioned  in this
document.

     Although we believe that our patents and trademarks  have value,  there can
be no assurance that those patents and trademarks, or any additional patents and
trademarks  that  may  be  obtained  in  the  future,  will  provide  meaningful
protection from  competition.  We actively  develop and protect our intellectual
property through a program of patenting, enforcement, and licensing.

     We do not  believe  that  any of our  products  infringe  patent  or  other
proprietary  rights of third parties,  but we cannot be certain that they do not
do so. (See Note 21 to  Consolidated  Financial  Statements.) If infringement is
alleged,  legal defense  costs could be material,  and there can be no assurance
that the necessary  licenses could be obtained on terms or conditions that would
not have a material adverse effect on our profitability.

Employees

     As of December 29, 2000, Trimble employed 2,306 people: 536 in research and
development,  926 in  sales  and  marketing,  619 in  manufacturing,  and 225 in
general  administration.  Of these, 596 were located in Europe (of which 75 were
in Germany and 236 were in Sweden),  207 in New Zealand,  53 in the Asia and the
Pacific region and 1,450 in the United States, Canada and Mexico. We also employ
temporary and contract personnel, not included in the above headcount numbers.

                                       12

<PAGE>

     Trimble's  success  depends  in  part  on the  continued  contribution  and
long-term  effectiveness of our employees.  Competition in recruiting  personnel
can be  significant  in some labor markets and our continued  ability to attract
and retain  highly  skilled  employees  is  essential  to our future  growth and
success.  Our employees are not  represented by labor unions,  except in certain
European  countries  where union  membership  is almost  universal.  We have not
experienced work stoppages.

                                       13

<PAGE>

Executive Officers of the Company

     The names,  ages, and positions of the Company's  executive  officers as of
March 29, 2001 are as follows:

Name                       Age             Position
--------------------------------------------------------------------------------
Steven W. Berglund........  49        President, Chief Executive Officer
Mary Ellen P. Genovese....  41        Chief Financial Officer
William C. Burgess........  54        Vice President, Human Resources
David M. Hall.............  52        Senior Vice President, Marketing 
                                      and Business Development
John E. Huey..............  51        Treasurer
Ronald C. Hyatt...........  61        Senior Vice President and General 
                                      Manager, Agriculture Division
Irwin L. Kwatek...........  62        Vice President and General Counsel
Bonnie L. Lemon...........  41        Corporate Controller
Michael W. Lesyna.........  40        Vice President and General Manager, Mobile
                                      Positioning and Communications Division
Bruce E. Peetz............  49        Vice President, Advance Technology and 
                                      Systems
Karl G. Ramstrom..........  57        Senior Vice President and General Manager,
                                      Engineering and Construction Division
Alan R. Townsend..........  52        Vice President and General Manager, 
                                      Mapping and GIS Division
Dennis L. Workman.........  55        Vice President and General Manager, 
                                      Component Technologies Division

     All officers serve at the  discretion of the Board of Directors.  There are
no family  relationships  between any of the directors or executive  officers of
the Company.

     Steven W. Berglund joined Trimble as President and Chief Executive  Officer
in March  1999.  Mr.  Berglund  has a  diverse  background  with  experience  in
engineering,  manufacturing,  finance  and global  operations.  Prior to joining
Trimble, Mr. Berglund was President of Spectra Precision,  Inc. which had global
revenue of approximately  $200 million and developed and manufactured  surveying
instruments,  laser based construction alignment  instruments,  and construction
machine  control  systems.   Spectra   Precision,   Inc.  was  a  subsidiary  of
Spectra-Physics AB. During his fourteen years within Spectra-Physics,  which was
an early  Silicon  Valley  pioneer  in the  development  of laser  systems,  Mr.
Berglund held a variety of management  positions  that included four years based
in Europe.  Prior to  Spectra-Physics,  Mr.  Berglund spent a number of years at
Varian  Associates  in  Palo  Alto  where  he  held a  number  of  planning  and
manufacturing  roles.  Varian is a technology company  specializing in microwave
communications,  semiconductor manufacturing equipment,  analytical instruments,
and medical  diagnostic  equipment.  Mr.  Berglund began his career as a process
engineer at Eastman  Kodak in Rochester,  New York.  Mr.  Berglund  attended the
University  of Oslo and  University  of  Minnesota  where he  received a B.S. in
Chemical  Engineering  in 1974  and  received  his MBA from  the  University  of
Rochester in 1977.

     Mary Ellen P.  Genovese  joined  Trimble  as  Controller  of  Manufacturing
Operations  in  December  1992.  From 1994 to 1997 she served as  Business  Unit
Controller  for Software and  Component  Technologies,  and for the tracking and
communications business units. She was appointed Corporate Controller in October
1997 and Vice President of Finance and Corporate Controller in February 1998. In
September  2000 she was  appointed  Chief  Financial  Officer.  Prior to joining
Trimble, Mrs. Genovese was Chief Financial Officer and President for Minton Co.,
a distributing  company to the commercial building market, from 1991 to 1992. In
her position as Chief Financial  Officer she was responsible for the accounting,
management  reporting and bank and investor financing for the company.  In March
of 1992,  the board of  directors  asked her to assume the role of  President to
reorganize  the  company,   including  the  divestiture  of  the   manufacturing
operations.  Prior  to  1991,  she  worked  for 10  years  with  General  Signal
Corporation. She was appointed European Financial Controller in July 1990, where
she was responsible for the company's three European operations, Germany, France
and the United Kingdom.  From 1988 to 1990 she served as Unit Financial Officer,
for General  Signal's  Semiconductor  Systems  Division.  She held several other
management  positions including  Materials Manager,  Controller of Manufacturing
Operation and International  Projects  Controller for General Signal's Ultratech
Stepper  Division  from  1984 to  1988.  Mrs.  Genovese  is a  Certified  Public
Accountant  and received her B.S. in  accounting  from  Fairfield  University in
Connecticut in 1981.

                                       14

<PAGE>

     William C. Burgess joined Trimble in August 2000 as Vice President of Human
Resources.  From August 1998 to July 2000,  Mr.  Burgess was Vice  President  of
Human  Resources and  Management  Information  Systems for Sonoma West Holdings,
Inc. Mr. Burgess also served as Vice President of Human  Resources from May 1995
through July 1998 for Optical Coating Laboratory, a large high-tech manufacturer
of fiber optic  products.  Mr.  Burgess'  experience  also  includes  Telenekron
Communications  Systems, a developer of  telecommunications  software;  and Asea
Brown Boveri (ABB), a global technology  company.  Mr. Burgess received his B.S.
from  the  University  of  Nebraska  in  1973  and  an  M.S.  in  organizational
development from Pepperdine University in 1978.

     David M. Hall joined  Trimble in February  1994 as Managing  Director,  OEM
products.  In November 1996 he was appointed Vice President and General  Manager
of  the  Software  and  Component   Technologies   business  unit,  focusing  on
application and operating  system  software,  component board level, and chipset
volume aspects of the GPS business. In November 1998 he was appointed Group Vice
President of the Mobile and Timing  Technologies  business unit, managing mobile
positioning and communications,  timing,  automotive,  military,  and commercial
aviation  businesses.  In  August  2000,  Mr.  Hall was  appointed  Senior  Vice
President  of  Marketing  and Business  Development.  Previously,  he worked for
Raychem  Corporation  for  twenty-one  years  in  a  variety  of  positions  and
divisions.  He served as  Director  of Sales and  Marketing  for the  Automotive
Division, National Distribution Manager for the Electronics Sector, and Director
of Marketing and Product  Management for the Interconnect  Systems Division,  as
well as District Sales Manager,  Area Sales Manager, and Operations Manager. Mr.
Hall received his B.S.  degree in  Industrial  Technology in 1971 and his MBA in
Marketing and Finance in 1973 from the California  Polytechnic  State University
in San Luis Obispo, California.

     John E. Huey  joined  Trimble  in 1993 as  Director  Corporate  Credit  and
Collections,  and was promoted to Assistant  Treasurer in 1995 and  Treasurer in
1996. Past experience includes two years with ENTEX Information  Services,  five
years  with  National  Refractories  &  Minerals  Corporation  (formerly  Kaiser
Refractories), and thirteen years with Kaiser Aluminum & Chemical Sales, Inc. He
has held positions in Credit  Management,  Market Research,  Inventory  Control,
Sales and as an  Assistant  Controller.  Mr. Huey  received  his B.A.  degree in
Business  Administration in 1971 from Thiel College in Greenville,  Pennsylvania
and an MBA in 1972 from West Virginia University in Morgantown, West Virginia.

     Ronald  C.  Hyatt   joined   Trimble  in  August   1983  as   Director   of
Instrumentation Products. In 1985, he was appointed Vice President for Surveying
and  Mapping   Products,   managing  the  marketing  and  application   software
development  aspects of the business  until  February  1993.  In January 1997 he
returned to the Company as Senior Vice  President of Trimble  Labs,  focusing on
next-generation  ASIC developments.  In November 1998, Mr. Hyatt was promoted to
Group Vice President of Precision  Positioning.  He was responsible for managing
land survey, marine, marine survey, mapping/GIS, and mining,  construction,  and
agricultural  applications.  In August 2000, Mr. Hyatt was appointed Senior Vice
President  and General  Manager of the  Agriculture  Division.  Prior to joining
Trimble,  Mr.  Hyatt  worked  for  Hewlett-Packard  from 1964 to 1983 in various
engineering and management  positions,  focusing on precision frequency and time
instrumentation.  Mr. Hyatt received his B.S.  degree in electrical  engineering
from Texas Tech University in 1962 and his M.S. degree in electrical engineering
from Stanford University in 1963.

     Irwin L. Kwatek joined  Trimble as Vice  President  and General  Counsel in
November 2000. Mr. Kwatek was Vice President and General Counsel of Tickets.com,
Inc., a ticketing  services  provider,  from May 1999 to November 2000. Prior to
that he was engaged in the private  practice of law for more than six years.  In
his career,  Mr.  Kwatek has served as Vice  President  and  General  Counsel to
several publicly-held high-tech companies, including Emulex Corporation, Western
Digital Corporation and General Automation,  Inc. Mr. Kwatek received his B.B.A.
from Adelphi College in Garden City, New York and an M.B.A.  from the University
of Michigan in Ann Arbor.  He received his J.D.  from Fordham  University in New
York City in 1968.

     Bonnie L.  Lemon  joined  Trimble in April of 1998 as  Assistant  Corporate
Controller where she was responsible for the financial  reporting and accounting
transaction  systems.  She was appointed Corporate  Controller in November 2000.
Prior to joining  Trimble,  Ms. Lemon worked for 5 years for Dexter  Corporation
where she held the position of Business  Controller in the  Aerospace  Materials
Division.  Ms. Lemon worked at Hexcel from 1989 to 1993, where she served as the
Group  Accounting  Manager  for  the  Advanced   Composites  Division  and  also
Accounting  Supervisor for the company's  Advanced Products  Division.  Prior to
joining  Hexcel,  she worked at  Motorola,  Inc. as a Financial  Analyst for the
Government  Electronics  Group and  Supervising  Senior Auditor at the company's
corporate  headquarters.  Ms. Lemon also served as the Corporate  Controller for
Quinton  Hazell,  Inc.  and as a Senior  Auditor  for Ernst & Young.  Ms.  Lemon
received her B.B.A.  in accounting  from the University of Michigan in 1981. She
is also a certified public accountant.

                                       15

<PAGE>

     Michael W. Lesyna joined Trimble as Vice  President of Strategic  Marketing
in September  1999.  In September  2000,  he was  appointed  Vice  President and
General  Manager of the Mobile  Positioning  and  Communications  Division.  Mr.
Lesyna brings broad experience in developing  business and marketing  strategies
for high tech  companies.  Prior to Trimble,  Mr. Lesyna worked for Booz Allen &
Hamilton,  where he spent six years, most recently serving as a principal in the
operations  management group. While at Booz Allen & Hamilton, he was responsible
for advising companies on a wide range of strategic issues.  Prior to Booz Allen
& Hamilton,  Mr. Lesyna held a variety of engineering positions at Allied Signal
Aerospace.  He  served  as a  Project  Engineer  for  Allied  Signal's  European
consortium  in Germany,  was a  Development  and Test  Engineer for the altitude
chamber,  and was a Design  Engineer for the company's  first jet fighter engine
afterburner.  Mr. Lesyna  received an MBA from  Stanford  University in 1994. He
also received an M.S. in mechanical engineering in 1983 and a B.S. in mechanical
engineering in 1982, both from Stanford University.

     Bruce E.  Peetz  joined  Trimble in June 1988 as  Program  Manager  for GPS
Systems.  From January 1990 to January 1993 he served as Development Manager for
commercial  dual-frequency  products,  and from January 1993 to December 1995 he
served as Engineering Manager for Surveying and Core Engineering. In January1996
he was appointed  General  Manager of the Land Surveying unit, and from February
1998 started the Advanced Systems  division as General Manager.  In October 1998
he was named Vice President of Advanced  Technology  and Systems,  consolidating
Systems and Trimble Laboratories.  Prior to joining Trimble, Mr. Peetz served in
a variety of engineering and management positions during eleven years at Hewlett
Packard.  Mr.  Peetz  received  his BSEE  from the  Massachusetts  Institute  of
Technology in 1973, and did graduate work at UCLA.

     Karl G. Ramstrom joined Trimble in August 2000 as Senior Vice President and
General Manager of the Engineering and Construction  Division.  Prior to joining
Trimble,  Mr. Ramstrom served as President of the Spectra Precision Group, which
was  acquired  by  Trimble in July 2000.  During his  31-year  tenure at Spectra
Precision  and its  predecessor  companies,  he  held a  variety  of  positions,
including marketing, sales management, general management, and finally executive
responsibilities.  Before his  appointment  as President,  Mr.  Ramstrom  headed
Spectra  Precision's  Survey business unit  headquartered  in Danderyd,  Sweden.
After  completing  his education in his native  Sweden,  Mr.  Ramstrom began his
career as a surveyor with the Swedish Road Administration before joining Spectra
Precision in 1969.

     Alan  R.  Townsend  joined  Trimble  in  1991  as the  Manager  of  Trimble
Navigation  New  Zealand  Ltd.,  a product  development  subsidiary  of  Trimble
Navigation Ltd. In 1995, he was appointed General Manager of the Mapping and GIS
systems  group.  In January 2001, he was promoted to Vice  President and General
Manager of the  Mapping and GIS  Division.  He is also  serving as the  Managing
Director of Trimble  Navigation New Zealand Ltd. Prior to Trimble,  Mr. Townsend
served in a variety  of roles  within  the  Datacom  group of  companies  in New
Zealand including  Managing Director of Datacom Software Research Ltd. from 1986
to 1991.  Trimble acquired Datacom Software  Research Ltd. in 1991. In addition,
Mr.  Townsend is a Director of IT Capital Ltd., a venture  capital company based
in Auckland,  New  Zealand;  and a Director of Pulse Data Ltd.,  an  electronics
company  that  produces  aids for the  visually  impaired in  Christchurch,  New
Zealand.  He is also a fellow of the New Zealand  Institute of Management  and a
past president of the New Zealand Software Exporters  Association.  Mr. Townsend
received a B.Sc. in economics from the University of Canterbury in 1970.

     Dennis L. Workman  joined  Trimble in 1995 as Director of Timing,  where he
led the  development  of GPS-based  precision  timing  products for the wireless
telecom market. In 1997, he was promoted to Director of Engineering for Software
and Component  Technologies.  In 1998, Mr. Workman was appointed Senior Director
and Chief Technical  Officer of the newly formed Mobile and Timing  Technologies
(MTT) business  group.  Mr. Workman also served as General  Manager of Trimble's
Automotive  and Timing group,  as well as Chief  Technology  Officer for MTT. In
September  1999, he was appointed to serve as Vice President and General Manager
of the  Component  Technologies  Division.  Prior to Trimble,  Mr.  Workman held
various senior-level  technical positions at Datum Inc. During his 9-year tenure
at Datum, he spearheaded  technology  development for GPS products.  Mr. Workman
also led the  development of board-level  products  unrelated to GPS for Datum's
Bancomm division.  In 1978, Mr. Workman co-founded  Bancomm,  which manufactures
board-level and  instrumentation  products for precision timing and data logging
applications.  In 1984, he was appointed President of Bancomm. Prior to Bancomm,
Mr. Workman  co-founded  Compression  Labs in 1977 and served as Chief Technical
Officer.  Mr.  Workman  began his career at Chicago  Aerial  Industries  as lead
engineer. He then joined Goodyear Aerospace,  now Loral, as program manager. Mr.
Workman  received a B.S. in  mathematics  from St. Marys  College in 1967 and an
M.S. in electrical engineering from the Massachusetts Institute of Technology in
1969.

                                       16

<PAGE>


I
tem 2.           Properties

     Trimble  currently  leases an aggregate of 309,480  square feet in fourteen
buildings in Sunnyvale,  California.  Trimble uses approximately  200,480 square
feet, with approximately 30,000 square feet used for final assembly and shipping
of GPS-based  products  and the balance is  subleased to others.  The leases and
subleases  on these  buildings  expire at various  dates  through  2005.  We are
leasing two buildings in  Westminster,  Colorado  totaling 73,000 square feet of
which the 28,000  square  foot  facility  will be used by Trimble and the 45,000
square  foot  building  will be  subleased.  The leases and  sublease  expire at
various dates through  2006.  In addition,  we lease three  buildings in Austin,
Texas,  totaling  approximately  50,600 square feet.  Trimble uses approximately
12,000 square feet to manufacture GPS-based aviation products and the balance is
subleased. The leases and subleases expire at various dates through 2004, with a
lease for two buildings totaling approximately 47,000 square feet (including the
12,000  square feet used by Trimble)  terminating  on August 31,  2001.  Trimble
leases  65,000 square feet in two buildings in  Christchurch,  New Zealand,  for
software development. The leases expire in 2005 and 2010. We also lease a 57,200
square foot building in Huber Heights,  Ohio (our Dayton,  Ohio facility)  where
22,300  square  feet are used in the  manufacturing  of optical  and laser based
products, and the balance is used for sales,  marketing and administration.  The
lease expires July 16, 2011. The Company owns an additional  150,000 square feet
in Huber  Heights,  Ohio of which  approximately  96,500 square feet is used for
manufacturing  and  warehousing  and the  remainder  is used for  administration
activities.  We also lease a 21,600  square foot  building  in Atlanta,  Georgia
where approximately 2,100 square feet is used in  manufacturing/warehouse  space
and 19,500 square feet is used for sales, marketing and administration.  Trimble
leases a 93,900  square foot  building in Danderyd,  Sweden and a 26,000  square
foot building in Kaiserslautern,  Germany. Both buildings are primarily used for
manufacturing.  Trimble's  largest  international  sales office is leased in the
United Kingdom (9,542 square feet). In addition, our sales offices in Australia,
China, France, Germany, Hungary, Italy, Japan, Mexico, Spain, Singapore, Russia,
and in various  cities  throughout  the  United  States  are  leased.  Trimble's
international office leases expire at various dates through 2010. Certain of the
leases  have  renewal  options.  Trimble  owns a two story,  20,000  square foot
building in Corvallis,  Oregon, used by our Tripod Data Systems  subsidiary,  of
which a $1.9 million dollar loan is  encumbered.  We believe that our facilities
are adequate to support our current and anticipated near-term future operations.


Item 3.           Legal Proceedings

     The information with respect to legal proceedings  required by this item is
included in Part II, Item 8, Note 21 to the Consolidated  Financial  Statements,
hereof.


Item 4.           Submission of Matters to a Vote of Security Holders

     Not applicable.

                                       17

<PAGE>


                                     PART II


 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

     Trimble's  Common  Stock is traded on the  Nasdaq  Stock  Market  under the
symbol TRMB. The following  table sets forth,  for the quarters  indicated,  the
range of high and low closing  sales  prices for  Trimble's  Common Stock on the
Nasdaq Stock Market:

                                     High              Low
           2000:
                    Fourth           28 3/16           18
                    Third            62 13/16          20 7/16
                    Second           50 3/4            18 7/16
                    First            30 1/4            19

           1999:
                    Fourth           23 1/8            10 1/2
                    Third            13 1/4            9
                    Second           13 3/4            9 3/8
                    First            10 1/2            7 1/4

     Trimble had 1,146 registered shareholders of record as of March 9, 2001.

     Trimble's stock price is subject to significant volatility.  If revenues or
earnings fail to meet the expectations of the investment community,  there could
be an immediate  and  significant  impact on the trading  price of the Company's
stock.  Due to stock  market  forces that are beyond our control and due also to
the nature of our business, such short falls can be sudden.

     The Company has never paid cash dividends on its Common Stock.  The Company
presently intends to retain earnings to finance the development of the Company's
business,  and does not  presently  intend to declare any cash  dividends in the
foreseeable future.  Under the Company's  $200,000,000 senior credit facilities,
the Company is restricted from paying  dividends and is limited as to the amount
of its  common  stock  it can  repurchase.  Under  the  provisions  of the  bank
agreement,  the Company is allowed to repurchase shares of its common stock only
up to 25% of net  income  for  the  previous  year.  See  Notes  2 and 10 to the
Consolidated Financial Statements contained in Item 8.

                                       18

<PAGE>


 Item 6.  Selected Financial Data

 HISTORICAL FINANCIAL REVIEW

 Summary Consolidated Statements of Operations Data                             


<TABLE>
<CAPTION>
                                                                December 29,  December 31,  January 1,   January 2,    December 31,
 Fiscal Years ended                                               2000 (2)      1999          1999         1998          1996
---------------------------------------------------------------------------------------------------------------------------------
 (In thousands, except per share data)

<S>                                                             <C>           <C>           <C>          <C>           <C>      
 Revenue                                                        $ 369,798     $ 271,364     $ 268,323    $ 266,442     $ 226,784
                                                              -------------------------------------------------------------------

 Operating expenses
     Cost of sales                                                173,237       127,117       141,075      124,411       107,744
     Research and development                                      46,520        36,493        45,763       38,242        27,833
     Sales and marketing                                           79,901        53,543        61,874       57,661        61,112
     General and administrative                                    30,514        33,750        33,245       27,424        35,136
     Restructuring charges                                              -             -        10,280            -         2,134
     Amortization of goodwill & other purchased intangibles        13,407             -             -            -             -
                                                              -------------------------------------------------------------------

 Total operating expenses                                         343,579       250,903       292,237      247,738       233,959
                                                              -------------------------------------------------------------------

 Operating income (loss) from continuing operations                26,219        20,461       (23,914)      18,704        (7,175)
 Nonoperating income (expense), net                               (10,459)          274        (2,041)       1,172           706
                                                              -------------------------------------------------------------------

 Income (loss) before income taxes from continuing operations      15,760        20,735       (25,955)      19,876        (6,469)
 Income tax provision (benefit)                                     1,575         2,073         1,400        2,496          (300)
                                                              -------------------------------------------------------------------
                                                              -------------------------------------------------------------------
 Net income (loss) from continuing operations                    $ 14,185      $ 18,662     $ (27,355)    $ 17,380      $ (6,169)
                                                              -------------------------------------------------------------------

Loss from discontinued operations (net of tax)                          -             -        (5,760)      (8,101)       (5,134)
Estimated gain (loss) on disposal of discontinued operations
  (net of tax)                                                          -         2,931       (20,279)           -             -
                                                              -------------------------------------------------------------------
Net income (loss)                                                $ 14,185      $ 21,593     $ (53,394)     $ 9,279     $ (11,303)
                                                              ===================================================================

Basic net income(loss) per share from continuing operations        $ 0.60        $ 0.83       $ (1.22)      $ 0.78       $ (0.28)
Basic net income(loss) per share from discontinued operations         $ -        $ 0.13       $ (1.16)     $ (0.36)      $ (0.23)
                                                              -------------------------------------------------------------------
Basic net income(loss) per share                                   $ 0.60        $ 0.96       $ (2.38)      $ 0.42       $ (0.51)
                                                              ===================================================================
       Shares used in calculating basic
               earnings per share                                  23,601        22,424        22,470       22,293        22,005
                                                              ===================================================================

Diluted net income(loss) per share from continuing operations      $ 0.55        $ 0.82       $ (1.22)      $ 0.75       $ (0.28)
Diluted net income(loss) per share from discontinued operations       $ -        $ 0.13       $ (1.16)     $ (0.35)      $ (0.23)
                                                              -------------------------------------------------------------------
Diluted net income(loss) per share                                 $ 0.55        $ 0.95       $ (2.38)      $ 0.40       $ (0.51)
                                                              ===================================================================
       Shares used in calculating diluted
               earnings per share                                  25,976        22,852        22,470       22,947        22,005
                                                              ===================================================================

 Cash dividends per share                                             $ -           $ -           $ -          $ -           $ -
                                                              ===================================================================

 Other Operating Data:                                          December 29,  December 31,  January 1,   January 2,    December 31,
Fiscal Years ended                                                2000 (2)      1999          1999         1998          1996
----------------------------------------------------------------------------------------------------------------------------------
 (In thousands, except percentages)     

 Gross margin percentage                                              53%           53%           47%          53%           52%
 Operating income (loss) percentage                                    7%            8%           (9%)          7%           (3%)
 EBITDA (1)                                                        49,695        29,534       (11,404)      30,911         2,965
 Depreciation and amortization                                     23,476         9,073        12,510       12,207        10,140
 EBITDA percentage (1)                                                13%           11%           (4%)         12%            1%


 Selected Consolidated Balance Sheet:                           December 29,  December 31,  January 1,   January 2,    December 31,
As of                                                             2000 (2)      1999          1999         1998          1996
------------------------------------------------------------------------------------------------------------------------------------
 (In thousands)

 Working capital (deficit)                                      $ (10,439)    $ 111,808      $ 81,956    $ 133,434     $ 122,409
 Total assets                                                     490,504       181,751       156,279      207,663       189,841
 Noncurrent portion of long-term debt                             143,553        33,821        31,640       30,697        30,938
 Shareholders' equity                                             134,943       100,796        74,691      139,483       124,045

----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) EBITDA  consists of earnings  from  continuing  operations  before  interest income, interest expense, other nonoperating income
and expense,  income taxes, depreciation and amortization and a $4.6 million inventory  purchase  accounting adjustment.  EBITDA is 
not a measure of financial  performance  under  generally accepted  accounting  principles and should not be considered in isolation
or as an  alternative  to net income as an indicator of a company's  performance or to cash flows from operating activities as a 
measure of liquidity.
(2) Includes  financial  informaiton of the Spectra  Precision Group,  which was acquired  on July 14,  2000 and of Tripod Data  
Systems,  which was  acquired on November  14,  2000.  (See  Footnote  2  and  3 to  the  Consolidated  Financial Statements 
included in Part II, Item 8.)
</FN>
</TABLE>


                                       19

<PAGE>



Item 7.         Management's Discussion and Analysis of Financial Condition
                and Results of Operations

RECENT BUSINESS DEVELOPMENTS

     Effective as of July 14, 2000,  Trimble  completed the  acquisition  of the
Spectra  Precision  wholly owned  businesses  formerly owned by Thermo  Electron
Corporation  ("Thermo  Electron"),  collectively known as the "Spectra Precision
Group" for an aggregate purchase price of approximately $294 million, subject to
a final  adjustment  in the purchase  price as provided  for in the  acquisition
agreements.  The  acquisition  included  100% of the stock of Spectra  Precision
Inc., a Delaware  corporation,  Spectra  Precision SRL, an Italian  corporation,
Spectra Physics Holdings GmbH, a German corporation, and Spectra Precision BV, a
Netherlands  corporation.  The acquisition  also consisted of certain assets and
liabilities of Spectra  Precision AB, a Swedish  corporation,  including 100% of
the shares of Spectra  Precision  SA, a French  corporation,  Spectra  Precision
Scandinavia  AB, a Swedish  corporation,  Spectra  Precision  of Canada  Ltd., a
Canadian  corporation,   and  Spectra  Precision  Handelsges  mbH,  an  Austrian
corporation.  The acquisition was accounted for as a purchase transaction.  (See
"Liquidity and Capital  Resources" for a description of how this acquisition was
financed.)

     The Spectra  Precision Group develops  instruments and systems that provide
positioning  solutions for two market  segments,  Engineering & Construction and
Agriculture.  Within  those  segments  are  four  major  customer  applications:
surveying, construction site positioning,  construction and agricultural machine
control, and software.

     Spectra   Precision  Group  products   generally   measure  distances  very
accurately by means of a light beam. In addition,  they have  capabilities  that
provide  the  capability  to uniquely  solve  positioning  problems  such as the
determination of angles with high accuracy.

     * The Company expects that the  acquisition of the Spectra  Precision Group
will  strengthen  Trimble's  position  as  a  leading  provider  of  positioning
solutions  worldwide.  The  acquisition  also  gives  Trimble  one of  the  most
comprehensive  product portfolios in the industry,  strengthens its distribution
network,  and serves as a platform for future growth. The complementary  product
lines and technologies of Trimble and the Spectra  Precision Group,  should help
the combined  Company to become a leader in the  Engineering  and  Construction,
Agriculture,  and Fleet and Asset Management market segments.  In addition,  the
Spectra Precision Group's  well-established  and extensive  distribution network
should extend  Trimble's  reach into new segments of its target market  segments
both  domestically and  internationally.  Although there was very little overlap
between  each of the  companies'  product  offerings,  two areas of overlap were
identified  and the Company has  announced  plans to  discontinue  Trimble's TTS
Optical Survey Family and the Spectra  Precision  Group's Elta and Geotracer GPS
receivers.

     * As part of the acquisition of the Spectra  Precision  Group,  Trimble has
identified  approximately  $20  million of annual cost  synergies.  We expect to
realize $8 to $10 million of these  benefits in fiscal 2001 and realize the full
benefit in fiscal  2002 and beyond.  However,  the Company is still in the early
stages of combining  Trimble and the Spectra  Precision  Group and this involves
certain  inherent  risks,  including:  the potential  inability to  successfully
integrate  acquired   operations  and  businesses  or  to  realize   anticipated
synergies,  economies  of  scale  or  other  value;  diversion  of  management's
attention;  difficulties  in  coordinating  the  management of operations at new
sites;  and the  possible  loss of key  employees  of acquired  operations.  The
Company's  profitability  may suffer if we are unable to successfully  integrate
and manage this  acquisition,  or if we do not  generate  sufficient  revenue to
offset the increased expenses associated with this acquisition.

     Trimble's  current  strategy  for the on-going  integration  of the Spectra
Precision Group is to focus on leveraging existing  technologies,  distribution,
and  marketing  resources  and  identifying  and taking  advantage  of synergies
between  the  companies.  The  Company's  initial  priorities  for the  combined
entities are centered on the following:

     o  The  reconciliation  and  alignment  of  distribution  channels  and the
        achievement of our market targets and cost synergies. The largest 
        portion of the cost synergies result from the consolidation of redundant
        facilities.

     o  Defining the basic corporate organization, reporting and structure. This
        included  the  announcement  by Trimble in August  2000 of its new 
        segment  and management  organization.   As  part  of  the  August  2000
        announcement, the Engineering  and  Construction  division of Trimble is
        headquartered  from our 

                                       20

<PAGE>

        Dayton, Ohio facility. Trimble's  Agriculture and Component Technologies
        divisions continue to operate from our Sunnyvale,  California facility. 
        The Mobile  Positioning  and  Communications  market  of the  Fleet  and
        Asset Management  division  is  headquartered  from  our  Sunnyvale, 
        California facility.  The GIS  market of the Fleet and Asset  Management
        division  is headquartered in New Zealand.

     o  Coordinating  manufacturing  facilities.  The  manufacturing  facilities
        acquired, as a result of the acquisition of the Spectra Precision Group,
        support the  Engineering  and  Construction  divisions  and report 
        through that segment management.

     As part of integrating the two companies,  Trimble  reorganized  management
responsibilities  in the third  quarter of fiscal  year 2000 by  realigning  its
reportable market segments from the previous two segments: Precision Positioning
Group (PPG) and Mobile Timing and Technologies Group (MTT) to five segments: (i)
Engineering  and  Construction,   (ii)   Agriculture,   (iii)  Fleet  and  Asset
Management,  (iv) Component Technologies,  and (v) Portfolio  Technologies.  The
Engineering  and  Construction  segment  includes  the Spectra  Precision  Group
surveying and construction  markets and the land survey,  marine survey,  mining
and  construction  markets  that had  been  under  Trimble's  PPG  segment.  The
Agriculture  segment includes the Spectra Precision Group agriculture market and
the agriculture market that had been under Trimble's PPG segment.  The Fleet and
Asset Management segment includes the mapping and GIS market that had been under
Trimble's PPG segment,  as well as, the mobile  positioning market that had been
under Trimble's MTT segment.  The Component  Technologies  segment  includes the
embedded,  IVN and timing markets that had been under Trimble's MTT segment. The
Portfolio  Technologies  segment  includes air transport,  military,  commercial
marine and advance technology markets that had been under Trimble's MTT segment.

     * In the  Engineering  and  Construction  segment,  we focus on  centimeter
positioning,  data collection management,  wireless  communication,  and machine
guidance and control.  In the  Agriculture  segment we focus on precise  machine
guidance,  yield  monitoring,   variable  rate  application  of  fertilizer  and
chemicals,  and water management.  In the Fleet and Asset Management  segment we
focus on asset tracking, fleet management,  intelligent  transportation systems,
and  public  safety  through   integration  of  our  technologies,   information
technology and wireless communication.  In the Component Technologies segment we
provide our GPS technology to various applications  (automotive navigation,  and
timing  systems)  for OEMs.  We intend to establish  and sustain our  leadership
position  in each of  these  market  segments  by  offering  products  that  are
differentiated  by  unique  product  capabilities  provided  by our  positioning
technology,  complemented  by the additional  value provided by our software and
finally by the value  provided by our  distribution  channels in providing  high
quality service and support.  In many cases,  we emphasize  application-specific
systems that solve end-user problems in its targeted market segments.

     Effective as of November 14, 2000,  Trimble  completed the  acquisition  of
Tripod Data Systems, Inc., an Oregon corporation for an aggregate purchase price
of  approximately  $15 million,  which is subject to a final  adjustment  in the
purchase price as provided for in the acquisition agreements. The purchase price
was in the form of shares of the common stock of Trimble.  The  acquisition  was
accounted  for as a purchase  transaction.  Tripod  Data  Systems  operates as a
wholly owned subsidiary of Trimble.

     Tripod Data Systems is a leading developer of data collection  software for
the land survey,  construction  and GIS  markets.  Tripod Data Systems has three
core business  components.  The company  develops  software for data  collection
applications, manufactures rugged Windows CE-based handheld data collectors such
as their TDS Ranger, and develops software for pen computer applications.

     * The Company  expects  that the  acquisition  of Tripod Data  Systems will
strengthen  Trimble's  ability  to  aggressively  address a number  of  targeted
markets including land survey, construction and GIS.

     On March 6, 2001, the Company sold its Air Transport Systems (ATS) business
to Honeywell. The ATS business was a part of our Portfolio Technologies segment.
The sale to Honeywell  consisted of the Trimble 8100,  the HT 9100 and two other
product lines, which were included in the ATS business.

                                       21

<PAGE>

RESULTS EXCLUDING ONE-TIME, ACQUISITION, AND DISCONTINUED OPERATION ADJUSTMENTS

     The income from  operations  measurement  utilized by  management  excludes
certain  one-time and acquisition  related charges and  discontinued  operations
adjustments that management believes are not reflective of on-going  operations.
The  following  table  reflects  results of  operations  adjusted to exclude the
effects of such items as follows (in thousands):


<TABLE>
<CAPTION>
                                                                           Twelve Months Ended
                                                                       Dec. 29,            Dec. 31,
                                                                         2000                1999
                                                                     --------------      -------------

<S>                                                                       <C>      <C>       <C>     
Net income                                                                $ 14,185 (2)       $ 21,593
One time and acquisition related charges                                    16,950 (1)              -
Estimated Loss on disposal of Discontinued Operations (net of tax)               -             (2,931)

                                                                     --------------      -------------
Adjusted net income from Continuing Operations                            $ 31,135           $ 18,662
                                                                     ==============      =============

Adjusted net income per share                                               $ 1.20             $ 0.82
                                                                     ==============      =============

<FN>
(1)  Reflects  after  tax  acquisition  charges  of $16.3  million  or $0.62 per
     diluted share for amortization of goodwill and other purchased intangibles,
     as well as an inventory purchase  accounting  adjustment.  Also includes an
     after tax debt  extinguishment  charge of $1.1 million or $0.04 per diluted
     share and a one time after tax charge of $0.8  million or $0.03 per diluted
     share for  relocation  costs  related to  opening a new office in  Boulder,
     Colorado.  In  addition,  there was a one time  after tax gain on sale of a
     minority investment of $1.2 million or $0.04 per diluted share.

(2)  Net income for the twelve months ended December 29, 2000 includes income of
     the Spectra  Precision Group for the period July 14, 2000 through  December
     29,  2000 and of Tripod  Data  Systems  for the period  November  14,  2000
     through December 29, 2000.
</FN>
</TABLE>


RESULTS OF CONTINUING OPERATIONS

     In fiscal 2000, the Company's  annual revenues from  continuing  operations
increased to $369.8  million from $271.4 million in fiscal 1999. In fiscal 2000,
the Company had net income from continuing operations of $14.2 million, or $0.55
diluted income per share, compared to a net income from continuing operations of
$18.7 million,  or $0.82 diluted  earnings per share,  in fiscal 1999. The total
net  income for  fiscal  2000,  including  discontinued  operations,  was $ 14.2
million,  or $0.55 diluted income per share,  compared to a total net income for
fiscal 1999,  including  discontinued  operations,  of $21.6  million,  or $0.95
diluted income per share.

                                       22

<PAGE>

The following table sets forth,  for the periods  indicated,  certain  financial
data as a percentage of total revenue:


<TABLE>
<CAPTION>
                                                                              December 29,         December 31,         January 1,
Fiscal Years ended                                                                2000                 1999                1999
------------------------------------------------------------------------------------------------------------------------------------



<S>                                                                                  <C>                  <C>               <C> 
 Revenue                                                                             100%                 100%              100%
                                                                         -----------------    -----------------     -------------

Operating expenses:
    Cost of sales                                                                     47%                  47%               53%
    Research and development                                                          13%                  13%               17%
    Sales and marketing                                                               22%                  20%               23%
    General and administrative                                                         8%                  12%               12%
    Restructuring charges                                                              0%                   0%                4%
    Amortization of goodwill & other purchased intangibles                             4%                   0%                0%
                                                                         -----------------    -----------------     -------------

          Total operating expenses                                                    93%                  92%              109%
                                                                         -----------------    -----------------     -------------

 Operating income (loss) from Continuing Operations                                    7%                   8%               (9%)

Nonoperating income (expense), net                                                    (3%)                  0%               (1%)
                                                                         -----------------    -----------------     -------------
 Income (loss) before income taxes from Continuing Operations                          4%                   8%              (10%)

Income tax provision                                                                   0%                   1%                1%

                                                                         -----------------    -----------------     -------------
 Net income (loss) from Continuing Operations                                          4%                   7%              (10%)
                                                                         -----------------    -----------------     -------------

Loss from Discontinued Operations (net of tax)                                         0%                   0%               (2%)
Estimated gain (loss) on disposal of Discontiued Operations (net of tax)               0%                   1%               (8%)
                                                                         -----------------    -----------------     -------------
Net Income (loss)                                                                      4%                   8%              (20%)
                                                                         =================    =================     =============
</TABLE>



     Revenue.  In fiscal 2000,  total revenue  increased to $369.8  million from
$271.4 million in fiscal 1999, which represents a percentage  increase of 36.3%.
Total revenue  increased in fiscal 1999 to $271.4 million from $268.3 million in
fiscal 1998, which  represents a percentage  increase of 1%. The following table
breaks out the Company's revenues by industry segment:


<TABLE>
<CAPTION>

                               --------------------------------------------------------------------------------------
                                   December 29,      % Total      December 31,     % Total     January 1,     % Total
                                     2000            Revenue        1999           Revenue       1999         Revenue
---------------------------------------------------------------------------------------------------------------------
(In thousands)

<S>                                  <C>                 <C>         <C>                <C>     <C>               <C>
 Engineering and Construction        $ 195,150           53%         $ 108,536          40%     $ 123,491         46%
 Agriculture                          $ 26,024            7%          $ 12,837           5%           $ -          0%
 Fleet and Asset Management           $ 65,099           18%          $ 67,271          25%      $ 64,515         24%
 Component Technologies               $ 60,230           16%          $ 58,660          21%      $ 36,296         14%
 Portfolio Technologies               $ 23,295            6%          $ 24,060           9%      $ 44,021         16%
                               ----------------   -----------  ----------------  ----------- ------------- -----------
          Total revenue              $ 369,798          100%         $ 271,364        100%     $ 268,323        100%
                               ----------------   -----------  ----------------  ----------- ------------- -----------
</TABLE>



Engineering and Construction

     Engineering and Construction  revenues increased by 80% in fiscal 2000 over
fiscal  1999.  The  increase  in  2000  revenue  compared  to 1999 is due to the
following:  
     o  Revenues generated since the purchase of the Spectra  Precision Group in
        July 2000, which accounted for approximately $87.0 million for the 
        period July 14, 2000 through December 29, 2000.
     o  Strong demand for GPS machine  guidance  equipment for  construction
        applications.
     o  These  increases  were  partially  offset due to continued  delivery
        problems related to critical part shortages in our supply chain.

                                       23

<PAGE>

     Engineering  and  Construction  revenues  decreased 12% in fiscal 1999 from
fiscal 1998.  The 1999 decrease is due to the  following:  
     o  Sales were impacted from the change in commission structure for some of 
        our products from commission dealers to buy/sell dealers in fiscal 1999.
        Under the buy/sell arrangement, the product is discounted to the dealer,
        as opposed to  end-user  pricing  with commissions  recorded under sales
        and marketing expense. 
     o  In the fourth quarter of 1999,  delivery  problems due to critical part
        shortages in our supply chain, and  transitional issues with outsourcing
        our manufacturing, had a negative impact on revenue for the fiscal year
        ended 1999.

Agriculture

     Agriculture revenues increased by 103% in fiscal 2000 over fiscal 1999. The
2000 increase in revenue  compared to 1999 is due to the  following:  
     o  Revenues generated since the purchase of the Spectra  Precision Group in
        July 2000, which accounted  for  approximately  $6.9 million for the 
        period July 14, 2000 through December 29, 2000. 
     o  Introduction of new products, including the AgGPS 170 Field Computer,
        the AgGPS 114, and the PSO Plus  Parallel  Swathing  Option with Data
        Logging.  
     o  Strong growth in demand for GPS Agriculture  products in general.  
     o  These increases were partially offset due to continued delivery problems
        related to critical part shortages in our supply chain.

     Agriculture  revenues were not broken out  separately  for fiscal year 1998
because it is  impracticable  to do so.  Therefore there is no comparison of the
increase in revenue in the Agriculture  segment from fiscal 1998 to fiscal 1999.
The results of this division were included in the Engineering  and  Construction
segment for fiscal 1998.

Fleet and Asset Management

     Fleet and Asset  Management  revenues  decreased  by 3% in fiscal 2000 over
fiscal 1999. The 2000 revenue change compared to 1999 is due to the following: 
     o  Asset  management  and  tracking  product  revenues  were down due to  
        continued delivery  problems  related to critical part  shortages in our
        supply  chain.  
     o  These  decreases  were  partially  offset by  increased  demand  in our
        Mapping products, especially our new GeoExplorer 3 used for GIS data 
        collection and data maintenance.  In  addition,  unit sales for our  
        Crosscheck  family of  products increased by 30% over prior year.

     Fleet and Asset  Management  revenues  increased  by 4% in fiscal 1999 from
fiscal 1998.  The 1999 increase is due primarily to the growth of revenue in our
pathfinder ProXR and Pathfinder ProXRS products, based on volume growth.

Component Technologies

     Component  Technologies revenues increased by 3% in fiscal 2000 over fiscal
1999. The 2000 revenue change compared to 1999 is due to the following: 
     o  Strong demand for GPS  embedded  applications  such as vehicle  tracking
        and safety and security.  
     o  The above  increases  were partially  offset by continued  delivery 
        problems related to critical part shortages in our supply chain.

     Component Technologies revenues increased by 62% in fiscal 1999 from fiscal
1998.  The 1999 increase is due primarily to strong growth in our automotive and
timing markets.

Portfolio Technologies

     Portfolio  Technologies revenues decreased by 3% in fiscal 2000 over fiscal
1999.  The 2000 revenue  decrease  compared to 1999 is due to the  following:  
     o  Decreases  in revenues  for Military  and air  transport  products.  
     o  Trimble's decision to exit the  commercial  marine  business in the 
        fourth quarter of 1998 and the sale of the last of such products in the
        second quarter of 1999.

                                       24

<PAGE>

     Portfolio Technologies revenues decreased by 45% in fiscal 1999 from fiscal
1998. The 1999 decrease is due to the following:  
     o  Trimble  decided to exit the commercial  marine  business in the fourth
        quarter of 1998 and sold the last of such  products in the second  
        quarter of 1999. 
     o  Commercial  air  transport  was down,  due to  decreases  in market 
        demand  and the  successful  conclusion  of shipments in fiscal 1998 to 
        American  Airlines and Continental  Airlines through our  Honeywell 
        alliance,  which were not  repeated in fiscal  1999.  
     o  Military systems declined due to the completion of our CUGR contract in
        the first quarter of 1998 which sales were not repeated in 1999.

     * Export Sales. Export sales from domestic  operations,  as a percentage of
total  revenue,  were  34% in  2000,  38% in  1999,  and 34% in  1998.  Sales to
unaffiliated  customers in foreign locations,  as a percentage of total revenue,
were 52% in 2000, 52% in 1999, and 46% in 1998. Trimble  anticipates that export
revenue and sales made by its  subsidiaries  in locations  outside the U.S. will
continue to account for a significant  portion of its revenue.  For this reason,
Trimble is subject to the risks  inherent in these sales,  including  unexpected
changes in regulatory requirements,  exchange rates,  governmental approval, and
tariffs or other barriers.  Even though the U.S.  government  announced on March
29, 1996, that it would support and maintain the GPS system,  and on May 1, 2000
eliminated the use of Selective  Availability (S/A) -- a method of degrading GPS
accuracy -- there may be a  reluctance  in certain  foreign  markets to purchase
products  based  on GPS  technology,  given  the  control  of  GPS  by the  U.S.
Government.  Trimble's results of operations could be adversely  affected if the
Company  were  unable to continue to  generate  significant  sales in  locations
outside the U.S.

     No  single  customer,  including  the  U.S.  Government  and its  agencies,
accounted for 10% or more of the Company's  total revenues in 2000, 1999 or1998.
It is possible; however, that in future periods the failure of one or more large
customers  to purchase  products in  quantities  anticipated  by the Company may
adversely affect the results of operations.

     * Gross Margin.  Gross margin varies due to a number of factors,  including
product mix, domestic versus international sales,  customer type, the effects of
production volumes and fixed  manufacturing costs on unit product costs, and new
product  start-up  costs.  The gross margin  percentage  on product  sales,  not
including a $4.6 million charge for inventory  purchase  accounting  adjustments
for the acquisition of the Spectra  Precision group, was 54% in 2000 and 53% for
1999,  compared with 47% in fiscal 1998. The fiscal 2000 gross margin percentage
increased over fiscal year 1999 due to the favorable  product mix of Engineering
and  Construction and Agriculture  products,  which yield higher margins through
the  integration of software and wireless  communications.  In addition,  it was
favorably  impacted by the cost benefits of  outsourcing  our  manufacturing  to
Solectron.  These  increases  were  partially  offset by higher costs to acquire
components  due to the  worldwide  component  shortages.  The  increase in gross
margin  percentage in fiscal 1999 as compared to fiscal 1998  primarily  reflect
improved  manufacturing  cost controls achieved through the consolidation of the
manufacturing  organization,  resulting  in  improved  efficiencies  and reduced
inventory.  In  addition  gross  margins in the second  half of fiscal 1999 were
favorably  impacted by the cost benefits of  outsourcing  our  manufacturing  to
Solectron. Because of product mix changes within and among the industry markets,
market  pressures on unit selling  prices,  fluctuations  in unit  manufacturing
costs, including increases in component prices and other factors,  current level
gross margins cannot be assured.

     * Trimble  expects that in the future a higher  percentage  of its business
will be conducted  through  alliances  with strategic  partners.  As a result of
volume  pricing and the  assumption of certain  operating  costs by the partner,
margins  on this  business  are  likely  to be  lower  than  sales  directly  to
end-users.

                                       25

<PAGE>

     Operating  Expenses.  The following table shows operating  expenses for the
periods  indicated.  It  should  be  read  in  conjunction  with  the  narrative
descriptions of those operating expenses below:


<TABLE>
<CAPTION>
                                                                             Fiscal Years Ended
                                                        -------------------------------------------------------------
                                                           December 29,             December 31,        January 1,
                                                               2000                  1999                  1999
---------------------------------------------------------------------------------------------------------------------
(In thousands)

<S>                                                                <C>                 <C>                  <C>     
Research and development                                           $ 46,520            $ 36,493             $ 45,763
Sales and marketing                                                  79,901              53,543               61,874
General and administrative                                           30,514              33,750               33,245
Restructuring charges                                                     -                   -               10,280
Amortization of goodwill & other purchased intangibles               13,407                   -                    -
                                                        --------------------    ----------------      ---------------
 Total                                                            $ 170,342           $ 123,786            $ 151,162
                                                        --------------------    ----------------      ---------------
</TABLE>



     Research and Development.  Research and development  spending  increased in
absolute dollars during fiscal 2000, representing 13% of revenue,  compared with
13% in 1999 and 17% in 1998.  The  increase in absolute  dollars in research and
development  expenses in 2000 are due  primarily  to the purchase of the Spectra
Precision Group in July 2000, which accounted for approximately  $9.9 million of
the increase.  The increase was also due to  approximately  $2.2 million less of
cost reimbursement funds received for projects. There were also increases in our
facilities costs of approximately $1 million. The increases are partially offset
by decreases in our expense of approximately  $3.4 million related to personnel,
temporary help and consulting.

     The  dollar  decrease  from  1998  to 1999  is due to  Trimble's  receiving
approximately $4.2 million more funds from cost  reimbursement  projects in 1999
as compared to 1998. Also, there were decreases in our expenses of approximately
$5.0 million related to electronics parts, depreciation,  travel, personnel, and
other  supplies  as  part  of  the  Company's  restructuring  plans  which  were
implemented in the last half of fiscal 1998.

     Sales and Marketing.  Sales and marketing  expenses increased during fiscal
2000,  representing  22% of  revenues,  as compared  with 20% in 1999 and 23% in
1998. The primary reason for the dollar and percentage increase in expenses from
1999 to 2000 is the purchase of the Spectra  Precision Group in July 2000, which
had approximately  $26.6 million in sales and marketing expenses recorded in the
period subsequent to Trimble's acquisition.

     The primary reason for the dollar and  percentage  decline in expenses from
1998  to  1999  is  decreases  of  approximately   $7.7  million  in  personnel,
consultants,  travel,  advertising,  trade shows,  expensed demo equipment,  and
other office  supplies as part of the Company's  restructuring  plan,  which was
implemented in the last half of fiscal 1998. In addition, sales commissions were
lower as a percentage of sales,  due to the change in dealer  structure for some
of our product lines from commission dealers to buy/sell arrangements.

     * Trimble's future growth will depend in part on the timely development and
continued  viability  of the markets in which we currently  compete,  and on our
ability to  continue to identify  and exploit new markets for our  products.  In
addition, we have encountered  significant  competition in selected markets, and
we expect  such  competition  to  intensify  as the market for GPS  applications
receives  acceptance.  Several of Trimble's  competitors are major  corporations
with  substantially  greater  financial,  technical,  and  marketing  resources.
Increased competition may result in reduced market share and is likely to result
in  price  reductions  of  GPS-based  products,  which  could  adversely  affect
Trimble's revenues and profitability.

     General and Administrative.  General and administrative  expenses decreased
during fiscal 2000, representing 8% of revenues,  compared with 12% in both 1999
and 1998.  The  decrease  in fiscal 2000 as compared to fiscal 1999 is due to an
allowance  for  doubtful  accounts  charge in fiscal  1999  related  to  certain
customers in South  America  which was not repeated in fiscal 2000.  We also had
decreases  of  approximately  $6.1  million in expenses  related for  personnel,
legal,  facilities,  equipment and other office  supplies.  The  decreases  were
partially offset by approximately  $3.0 million of the Spectra Precision Group's
expenses included since its purchase in July 2000.

     The increase in absolute dollars from 1998 to 1999 is due to an increase in
the  allowance  for  doubtful  accounts  related to certain  customers  in South
America for 1999; and an increase in building rental costs due to the renewal of
many of our  building  leases.  This  increase  was  partially  offset  by space
consolidations  as part of our  restructuring  efforts in the fourth  quarter of
1998.

                                       26

<PAGE>

     Restructuring Reserves.

     2000  Acquisition  Restructuring  Reserves.  As  noted  in  Note  9 to  the
Consolidated Financial Statements, as a result of the acquisition of the Spectra
Precision  Group,  the Company accrued  approximately  $9.0 million for costs to
close certain  duplicative office facilities and combine operations and relocate
certain  employees.  These  costs  were  accrued  as  part  of  the  preliminary
allocation  of the  purchase  price.  The  facility  consolidation  and employee
relocations will result from primarily  combining  certain office facilities and
duplicative functions,  including management functions, of the Spectra Precision
Group. The Company has not yet finalized its plans to consolidate facilities and
to relocate  employees,  nor has it finalized a determination of the total costs
to be incurred upon the  termination  of certain office  facility  leases or its
ability to sublease vacated office space.  Accordingly,  unresolved issues could
result in an increase or decrease in the liabilities for facility consolidation,
the  discontinuance  of overlapping  product  lines,  employee  relocation,  and
related tax and legal expenses.  These adjustments,  if any, will be reported as
an increase or decrease in goodwill.  Through December 29, 2000, the Company had
charged $ 809,000  (which  consisted  of  inventory  write-offs  related  to the
discontinuance  of  overlapping  product  lines)  against the  reserve,  and the
accrual for future  costs to be incurred  was $8.2 million at December 29, 2000.
The Company anticipates on utilizing this reserve by the end of fiscal 2001.

     The  elements of the  reserve at fiscal year end 2000 on the balance  sheet
are as follows (in thousands):


Employee Relocation Expense                            $ 390
Inventory Obsolescence                                 1,876
Legal and Tax Expense                                  1,175
Restructuring Expenses                                 4,750
                                              ---------------
     Subtotal                                        $ 8,191
                                              ===============

     1998  Restructuring  Charges.  As  noted  in  Note  9 to  the  Consolidated
Financial Statements during the year ended January 1, 1999, the Company recorded
a restructuring charge of $10.3 million classified as operating expenses.  These
charges  were a result  of the  Company's  reorganization  to  improve  business
processes and to decrease  organizational  redundancies,  to improve  management
accountability and to improve the Company's focus on profitable operations. As a
result of the  reorganization,  the Company downsized its operations,  including
reducing  headcount and facilities space usage, and canceled its enterprise wide
information  system project and certain research and development  projects.  The
impact of these  decisions was that  significant  amounts of the Company's fixed
assets,  prepaid  expenses,  and purchased  technology were impaired and certain
liabilities  incurred.  The Company  wrote down the related  assets to their net
realizable values and made provisions for the estimated liabilities.

     The  elements of the charges in fiscal  1998 and the amounts  remaining  at
December 29, 2000, on the balance sheet are as follows (in thousands):


<TABLE>
<CAPTION>
                                        Total
                                      charged to      Amounts paid/    Amounts paid/   Amounts paid/          Remaining in
                                      expense in       written off      written off     written off        accrued liabilites
                                     fiscal 1998     in fiscal 1998    in fiscal 1999  in fiscal 2000   as of December 29, 2000
                                    --------------- -----------------  -------------- ----------------  -----------------------
<S>                                       <C>               <C>           <C>               <C>                        <C>   
Employee termination benefits              $ 2,864          $ (1,200)     $   (371)         $ (1,293)                  $    -
Facility space reductions                    1,061                 -      $ (1,053)             $ (8)                       -
ERP system abandonment                       6,360            (4,895)     $ (1,465)              $ -                        -
                                    --------------- -----------------  -------------- ----------------  -----------------------
     Subtotal                             $ 10,285          $ (6,095)     $ (2,889)         $ (1,301)                  $    -
                                    =============== =================  ============== ================  =======================
</TABLE>


     Goodwill and Other Purchased Intangibles.  Amortization expense of goodwill
and  other  intangibles  increased  for the  year  ended  December  29,  2000 by
approximately $13.4 million related to the purchase of Spectra Precision Group.

     Nonoperating  income (expense), net. Nonoperating  income  (expense),  net,
includes  interest  income and  expense,  as well as gains and losses on foreign
currency transactions.

                                       27

<PAGE>

     Foreign  exchange losses were $376,000 in fiscal 2000,  compared with gains
of $28,000 in 1999 and gains of $234,000 in 1998.  Trimble's  policy is to hedge
its exposure to foreign currency transactions in order to minimize the effect of
changes  in  foreign  currency   exchange  rates  on  consolidated   results  of
operations.  Gains and losses arising from foreign  currency  forward  contracts
offset gains and losses resulting from the underlying hedged transactions.

     Interest  income  increased in 2000 from 1999 as well as in 1999 from 1998.
The higher  interest  income in 2000 and 1999 is due  primarily to the increased
interest  income received on cash and short-term  investments  because of higher
average balances.

     Interest expense increased in fiscal 2000 due to financing obtained for the
acquisition of the Spectra  Precision Group.  Interest expense includes interest
on a $200.0 million credit  facility and an $80.0 million  subordinated  sellers
note  both  issued in July  2000.  (See  Note 11 to the  Consolidated  Financial
Statements for details of long-term debt.)

     Income Tax Provision.  Trimble's effective income tax rates from continuing
operations  for  fiscal  years  2000,  1999  and 1998  are  10%,  10% and  (6%),
respectively.  The 2000 and 1999  income  tax rates  are less  than the  federal
statutory  rate of 35%, due  primarily to the  realization  of the benefits from
prior net operating losses and previously reserved deferred tax assets. The 1998
income tax rate  differs  from the federal  statutory  rate,  due  primarily  to
foreign taxes and the inability to realize the benefit of net operating losses.

     Inflation. The effects of inflation on Trimble's financial results have not
been significant to date.

LITIGATION

     * Trimble is involved in a number of legal  matters as discussed in Note 21
to the  Consolidated  Financial  Statements.  While  Trimble  does not expect to
suffer  significant  adverse  effects  from  these  litigation  matters  or from
unasserted claims, the nature of litigation is unpredictable and there can be no
assurance that it will not do so.

LIQUIDITY AND CAPITAL RESOURCES

     * At December  29,  2000,  Trimble had cash and cash  equivalents  of $40.9
million and had no short-term  investments.  Trimble's cash and cash equivalents
and short-term investments decreased from the prior year, due to the purchase of
the Spectra Precision Group in July 2000.  Trimble's  long-term debt consists of
$162 million  outstanding  under senior  secured  credit  facilities,  and a $80
million subordinated  promissory note. In the past, Trimble has relied primarily
on cash  provided  by  operating  and  financing  activities  and net  sales  of
short-term  investments  to fund capital  expenditures,  the  repurchase  of the
Company's common stock, and other investing activities. Management believes that
its cash, and cash equivalents balances,  together with its new credit facility,
will be sufficient to meet its anticipated operating cash needs for at least the
next twelve months.

     * In fiscal  2000,  the cash  provided by  operating  activities  was $21.9
million,  as compared to cash  provided  of $23.6  million in the  corresponding
period in fiscal  1999.  Cash  provided by operating  activities  in fiscal 2000
arose from the Company's net income,  plus  depreciation  and  amortization  and
increase in accounts  payable and offset  partially by increases in  inventories
and increases in accounts receivable.  Trimble's ability to continue to generate
cash from  operations  will  depend  in a large  part on  revenues,  the rate of
collections  of  accounts  receivable,  and  the  successful  management  of the
Company's manufacturing relationship with Solectron Corporation.

     Cash provided by sales of common stock in fiscal year 2000  represents  the
proceeds from  purchases  made by employees  pursuant to Trimble's  stock option
plan and employee  stock  purchase plan and totaled $12.0 million for the fiscal
year ended December 29, 2000.

     Effective as of July 14, 2000,  Trimble  completed the  acquisition  of the
Spectra  Precision Group for an aggregate  purchase price of approximately  $294
million.  The acquisition  was financed with $80 million in seller  subordinated
debt,  $140  million of debt  provided  through a  syndicate  of banks,  and $74
million of the Company's  then  available cash on hand. The Company also expects
to incur up to $8 million of total  costs and  expenses in  connection  with the
acquisition of which approximately $7 million has already been incurred to date.

     In order to finance the acquisition of the Spectra  Precision  Group,  fund
the Company's  on-going working capital  requirements,  and pay related fees and
expenses of the  acquisition,  Trimble (i) obtained a new senior  secured

                                       28

<PAGE>

credit facility, (ii) issued an $80 million subordinated seller promissory note,
(iii)  terminated its existing $50 million  unsecured  revolving credit facility
and (iv) prepaid its existing $30 million  outstanding  subordinated  promissory
notes.  (See Note 2 to the Condensed  Consolidated  Financial  Statements  under
Acquisition Financing.)

     In 1996 and 1998, Trimble approved a discretionary  program whereby up to a
total of 2.2 million shares of its common stock could be repurchased on the open
market by the Company to offset the potential  dilutive  effects to earnings per
share from the  issuance  of  additional  stock  options.  During 1997 and 1998,
Trimble  purchased a total of 1.22  million  shares at a cost of $17.9  million.
During  fiscal  1999 and  fiscal  2000,  no shares  were  repurchased  under the
discretionary  program.  Trimble's  current credit facility limits the amount of
its common stock it can repurchase.  The Company is allowed to repurchase shares
of its common stock only up to 25% of net income in the previous fiscal year.

     * The Company  presently  expects  fiscal 2001 capital  expenditures  to be
approximately  $12.0 million,  primarily for computer equipment,  software,  and
leasehold improvements associated with business expansion.

     * Trimble has evaluated the issues raised by the introduction of the Single
European  Currency (Euro) for initial  implementation as of January 1, 1999, and
during the transition period through January 1, 2002. Trimble does not currently
believe  that the  introduction  of the Euro will have a material  effect on its
foreign exchange and hedging activities. Trimble has also assessed the potential
impact  the  Euro  conversion  will  have  in  regard  to its  internal  systems
accommodating Euro-denominated  transactions.  Trimble will continue to evaluate
the impact of the Euro  introduction  over time,  based on  currently  available
information.  Trimble does not currently  anticipate  any adverse  impact of the
Euro conversion on the Company.

CERTAIN OTHER RISK FACTORS

Difficulties in Integrating New Acquisitions Could Adversely Affect Our 
Business.

     Critical  to  the  success  of  our  growth  is the  effective  and  timely
integration of acquired  businesses  into our  organization.  If our integration
efforts are unsuccessful,  our businesses will suffer. We have recently acquired
the Spectra Precision Group. The acquisition presents unique product, marketing,
research and development, facilities, information systems, accounting, personnel
and other integration  challenges.  This transition is still in its early stages
and involves certain risks,  including:  the potential inability to successfully
integrate  acquired   operations  and  businesses;   the  inability  to  realize
anticipated   synergies  or  cost  reductions  or  other  value;   diversion  of
management's  attention;  difficulties in scaling up production at new sites and
coordinating management of operations at new sites; and loss of key employees of
acquired operations. Also, our information systems and those of the companies we
acquire are often  incompatible,  requiring  substantial  upgrades to one or the
other.  Further,  our current senior combined management is a combination of the
prior senior management teams of Trimble and the Spectra Precision Group several
of whom have not  previously  worked  with  other  members  of  management.  The
benefits to us of the acquisition and our success, as a whole,  depends upon our
succeeding in each of these and other integration challenges.  Nevertheless, the
integration of our business with another may result in unanticipated  operations
problems, expenses and liabilities and the diversion of management attention

     Our sales  force is and will be in the  future a  combination  of our sales
force  and  the  sales  forces  of the  businesses  we  acquire,  which  must be
effectively  integrated  for us to remain  successful.  Our  acquisition  of the
Spectra Precision Group has resulted in sales forces differing in products sold,
marketing channels used and sales cycles and models applied. Accordingly, we may
experience  disruption in sales and marketing in connection  with our efforts to
integrate  our  various  sales  and  marketing  forces,  and we may be unable to
efficiently or effectively correct any such disruptions or achieve our sales and
marketing  objectives  if we  fail  in  these  efforts.  Furthermore,  it may be
difficult to retain key sales personnel.  As a result,  we may fail to take full
advantage  of the  combined  sales  forces'  efforts,  and one  company's  sales
approaches and  distribution  channels may be  ineffective in promoting  another
entity's  products,  all of which may  materially  harm our business,  financial
condition or operating results.

Risks Associated with Sole Suppliers and Limited Sources.

     With the selection of Solectron  Corporation in August 1999 as an exclusive
manufacturing  partner for many of our GPS products previously  manufactured out
of our Sunnyvale  facilities,  Trimble is  substantially  dependent  upon a sole
supplier  for  the  manufacture  of  its  products.  Under  the  agreement  with
Solectron,  Trimble  provides to Solectron a twelve-month  product  forecast and
places  purchase  orders with  Solectron  sixty  calendar days in advance of the
scheduled delivery of products to Trimble  customers.  Although Trimble purchase
orders placed

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<PAGE>

with Solectron are cancelable,  the terms of the agreement would require Trimble
to purchase from  Solectron all material  inventory not  returnable or usable by
other Solectron customers. Accordingly, if Trimble inaccurately forecasts demand
for its  products,  Trimble  may be  unable  to  obtain  adequate  manufacturing
capacity from Solectron to meet customers' delivery  requirements or Trimble may
accumulate  excess  inventories.  In addition,  we rely on sole  suppliers for a
number of our critical ASICS. We have experienced  shortages of such supplies in
the past. Our reliance on sole or a limited group of suppliers  involves several
risks,  including a potential inability to obtain an adequate supply of required
components  and reduced  control over pricing.  The disruption or termination of
any of these  sources  could have a  material  adverse  effect on our  business,
operating  results and financial  condition.  Any  inability to obtain  adequate
deliveries or any other  circumstance  that would require us to seek alternative
sources  of  supply  or  to  manufacture   such  components   internally   could
significantly  delay  our  ability  to ship our  products,  which  could  damage
relationships  with current and prospective  customers and could have a material
adverse effect on our business, operating results and financial condition.

Fluctuations in Annual and Quarterly Performance.

     Our operating  results have  fluctuated  and can be expected to continue to
fluctuate in the future on a quarterly  and annual basis as a result of a number
of factors, many of which are beyond our control. Results in any period could be
affected by changes in market  demand,  competitive  market  conditions,  market
acceptance  of  new or  existing  products,  fluctuations  in  foreign  currency
exchange  rates,  the  cost and  availability  of  components,  our  ability  to
manufacture and ship products,  the mix of our customer base and sales channels,
the mix of  products  sold,  our  ability  to expand  our  sales  and  marketing
organization  effectively,  our ability to attract and retain key  technical and
managerial  employees  and general  economic  conditions.  Due to the  foregoing
factors,  our operating results in one or more future periods are expected to be
subject to significant  fluctuations.  In the event such fluctuations  result in
our financial performance being below the expectations of public market analysts
and investors, the price of our common stock could decline substantially.

     Our revenues have historically tended to fluctuate on a quarterly basis due
to the timing of shipments of products under contracts and the sale of licensing
rights. A significant portion of Trimble's quarterly revenues occurs from orders
received and immediately  shipped to customers in the last few weeks and days of
a quarter. If orders are not received,  or if shipments were to be delayed a few
days at the end of a quarter,  the operating  results and reported  earnings per
share for that quarter  could be  significantly  impacted.  Future  revenues are
difficult to predict,  and projections are based primarily on historical models,
which are not necessarily accurate representations of the future.

     Despite the  fluctuations in its quarterly  sales  patterns,  the Company's
operating expenses are incurred on an approximately  ratable basis. As a result,
if expected sales are deferred for any reason, the Company's business, operating
results and financial condition could be materially adversely affected.

     Trimble's  gross  margin  is  affected  by a number of  factors,  including
product mix, product  pricing,  cost of components,  foreign  currency  exchange
rates and manufacturing costs. For example, since Engineering & Construction and
Agriculture   products  generally  have  higher  gross  margins  than  Component
Technologies products, absent other factors, a shift in sales toward Engineering
& Construction and Agriculture products would lead to a gross margin improvement
for Trimble.  On the other hand, if market conditions in the highly  competitive
Engineering & Construction  and  Agriculture  market segments forced us to lower
unit prices,  we would  suffer a decline in gross margin  unless we were able to
timely offset the price reduction by a reduction in production costs or by sales
of other products with higher gross margins. Either of these events could have a
material effect on our business, operating results and financial condition.

Risks of Managing Future Growth.

     Any  significant  growth in our sales or any  significant  expansion in the
scope of our operations  could strain our management,  financial,  manufacturing
and other  resources  and may require us to  implement  and improve a variety of
operating,  financial and other systems,  procedures and controls. While Trimble
plans significant expansion of its sales, accounting,  manufacturing,  and other
information  systems to meet these  challenges,  there can be no assurance  that
these efforts will succeed,  or that any existing or new systems,  procedures or
controls  will be  adequate  to  support  our  operations  or that our  systems,
procedures  and  controls  will be designed,  implemented  or improved in a cost
effective and timely manner.  Any failure to implement,  improve and expand such
systems,  procedures and controls in a timely and efficient  manner could have a
material  adverse  effect  on our  business,  operating  results  and  financial
condition.

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<PAGE>

Competition.

     Trimble's markets are highly competitive.  Our overall competitive position
depends on a number of factors  including the price,  quality and performance of
our products,  the level of customer service,  the development of new technology
and our ability to participate in emerging markets.  Within each of our markets,
we encounter direct  competition from other GPS, optical and laser suppliers and
competition  may  intensify  from  various  larger  domestic  and  international
competitors  and new  market  entrants,  some of which  may be  current  Trimble
customers.  The competition in the future,  may, in some cases,  result in price
reductions,  reduced  margins  or loss  of  market  share,  any of  which  could
materially and adversely  affect our business,  operating  results and financial
condition.  We believe  that our ability to compete  successfully  in the future
against  existing and additional  competitors will depend largely on our ability
to execute our  strategy  to provide  systems and  products  with  significantly
differentiated  features compared to currently available products.  There can be
no assurance  that we will be able to implement this strategy  successfully,  or
that any such products will be competitive  with other  technologies or products
that  may be  developed  by our  competitors,  many of whom  have  significantly
greater  financial,  technical,   manufacturing,   marketing,  sales  and  other
resources  than we do. There can be no assurance that we will be able to compete
successfully against current or future competitors or that competitive pressures
faced by us will not have a material  adverse effect on our business,  operating
results  and  financial  condition.  We expect  that both  direct  and  indirect
competition will increase in the future.  Additional competition could adversely
affect our business,  operating  results and financial  condition  through price
reductions or loss of market share.

Risks Associated With International Operations and Sales.

     Our  customers  are located  throughout  the world.  In  addition,  we have
significant  offshore  operations,  including  manufacturing  facilities,  sales
personnel  and customer  support  operations.  Our offshore  operations  include
facilities in Australia,  Canada, China, France,  Germany, Great Britain, Japan,
Mexico,  New Zealand,  Sweden,  Russia,  Singapore and others. Our international
presence   exposes  us  to  risks  not  faced  by   wholly-domestic   companies.
Specifically,  we face the following risks, among others,  unexpected changes in
regulatory requirements;  tariffs and other trade barriers; political, legal and
economic instability in foreign markets,  particularly in those markets in which
we maintain manufacturing and research facilities;  difficulties in staffing and
management;  language and cultural  barriers;  seasonal  reductions  in business
activities in the summer months in Europe and some other countries;  integration
of foreign  operations;  longer payment cycles;  greater  difficulty in accounts
receivable  collection;  currency  fluctuations;  and  potentially  adverse  tax
consequences. Although we implemented a program to manage foreign exchange risks
through  hedging  and  other  strategies,  there can be no  assurance  that this
program will be successful and that currency exchange rate fluctuations will not
have a material  adverse  effect on our results of operations.  In addition,  in
certain foreign markets,  there may be reluctance to purchase  products based on
GPS technology, given the control of GPS by the U.S. Government.

Volatility of Stock Price.

     Our  common  stock  has  experienced  and  can be  expected  to  experience
substantial  price  volatility  in response to actual or  anticipated  quarterly
variations in results of operations,  announcements of technological innovations
or new  products by us or our  competitors,  developments  related to patents or
other  intellectual  property  rights,  developments  in our  relationship  with
customers,  suppliers,  or strategic  partners  and other events or factors.  In
addition,  any short fall or changes in revenue,  gross  margins,  earnings,  or
other financial results from analysts' expectations could cause the price of our
common stock to fluctuate  significantly.  Additionally,  certain macro-economic
factors  such as changes in  interest  rates as well as market  climate  for the
high-technology  sector  could also have an impact on the  trading  price of our
stock.

Dependence on Proprietary Technology; Risk of Patent Infringement Claims.

     Trimble's  future  success and  competitive  position is dependent upon its
proprietary  technology,  and we rely on patent,  trade  secret,  trademark  and
copyright law to protect our  intellectual  property.  There can be no assurance
that the patents owned or licensed by us will not be invalidated,  circumvented,
challenged  or  licensed  to others,  that the rights  granted  thereunder  will
provide competitive advantages to us or that any of our pending or future patent
applications will be issued within the scope of the claims sought by Trimble, if
at all.  Furthermore,  there can be no  assurance  that  others will not develop
technologies  that are  similar or  superior to our  technology,  duplicate  our
technology or design around the patents owned by Trimble. In addition, effective
copyright, patent and trade secret protection may be unavailable, limited or not
applied for in certain  foreign  countries.  There can be no assurance  that the
steps   taken  by  Trimble  to  protect   its   technology   will   prevent  the
misappropriation of such technology.

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<PAGE>

     The value of our products relies  substantially on our technical innovation
in fields in which there are many current  patent  filings.  Trimble  recognizes
that as new patents are issued or are brought to our attention by the holders of
such patents,  it may be necessary for us to withdraw  products from the market,
take a license from such patent  holders,  or redesign our  products.  We do not
believe any of our  products  currently  infringe  patents or other  proprietary
rights  of  third  parties,  but we  cannot  be  certain  they do not do so.  In
addition,   the  legal  costs  and   engineering   time  required  to  safeguard
intellectual property or to defend against litigation could become a significant
expense of operations.  Such events could have a material  adverse effect on our
revenues  or  profitability.  (See  also Note 21 to the  Consolidated  Financial
Statements.)

Dependence on New Products.

     Trimble's future revenue stream depends to a large degree on our ability to
bring new  products  to  market  on a timely  basis.  We must  continue  to make
significant  investments  in research  and  development  in order to continue to
develop new products, enhance existing products and achieve market acceptance of
such  products.  However,  there  can be no  assurance  that  development  stage
products  will  be  successfully  completed  or,  if  developed,   will  achieve
significant  customer  acceptance.  If we were  unable to  successfully  define,
develop and introduce  competitive new products,  and enhance existing products,
our future results of operations  would be adversely  affected.  Development and
manufacturing  schedules for technology  products are difficult to predict,  and
there can be no assurance that we will achieve timely initial customer shipments
of new products.  The timely  availability of these products in volume and their
acceptance by customers are important to the future success of Trimble.  In some
of our markets -- for example,  Engineering  &  Construction  where we currently
have a market leadership  position,  a delay in new product  introductions could
have a  significant  impact on our results of  operations.  No assurance  can be
given  that  we  will  not  incur  problems  in the  future  in  innovating  and
introducing  new  products.  In  addition,  some of our  products are subject to
governmental and similar certifications before they can be sold. For example, CE
certification for radiated  emissions is required for most GPS receiver and data
communications  products sold in the European Union. An inability to obtain such
certifications  in a timely manner could have an adverse effect on our operating
results.

Strategic Alliances and External Investments.

     We are  continuously  evaluating  alliances  and  external  investments  in
technologies  related to our  business,  and have  entered  into many  strategic
alliances  including making  relatively small strategic equity  investments in a
number of GPS related technology companies. Acquisitions of companies, divisions
of  companies,  or products  and  alliances  and  strategic  investments  entail
numerous risks,  including (i) the potential inability to successfully integrate
acquired operations and products or to realize anticipated synergies,  economies
of scale, or other value; (ii) diversion of management's  attention;  (iii) loss
of key employees of acquired operations; and (iv) inability to recover strategic
investments  in  development  stage  entities.  Any such  problems  could have a
material  adverse effect on our business,  financial  condition,  and results of
operations.

     We also believe that in certain emerging markets our success will depend on
our ability to form and maintain  strategic  alliances with  established  system
providers and industry leaders. Our failure to form and maintain such alliances,
or the preemption of such  alliances by actions of other  competitors or us will
adversely affect our ability to penetrate emerging markets. No assurances can be
given  that we will  not  incur  problems  from  current  or  future  alliances,
acquisitions,  or  investments.  Furthermore,  there can be no assurance that we
will  realize  value  from  any  such  strategic  alliances,   acquisitions,  or
investments.

Dependence on Key Customers.

     We currently enjoy strong  relationships with key customers.  An increasing
amount of our revenue is generated from large OEMs such as Philips VDO,  Nortel,
Caterpillar,  CNH Global  (formerly  Case  Corporation),  Bosch,  and others.  A
reduction or loss of business with these customers could have a material adverse
effect on our  financial  condition and results of  operations.  There can be no
assurance  that we  will  be  able to  continue  to  realize  value  from  these
relationships in the future.

Dependence on Key Markets and Successful Identification of New Markets.

     Trimble's  current  products  serve  many  applications  in  Engineering  &
Construction, Agriculture, Fleet & Asset Management, Component Technologies, and
Portfolio  Technologies  market segments.  No assurances can be given that these
market segments will continue to generate  significant or consistent  demand for
our products.  

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<PAGE>

Existing market segments could be  significantly  diminished by new technologies
or products  that replace or render  obsolete  our  technologies  and  products.
Trimble is dependent on  successfully  identifying new markets for its products.
There can be no assurance that the Company will be able to successfully identify
new high-growth markets in the future.  Moreover, there can be no assurance that
new markets will  develop for Trimble or its  customers'  products,  or that our
technology or pricing will enable such markets to develop.

Dependence on Retaining and Attracting Highly Skilled Development and Managerial
Personnel.

     The ability of Trimble to maintain its competitive  technological  position
will depend,  in a large part, on its ability to attract,  motivate,  and retain
highly qualified development and managerial personnel. Competition for qualified
employees in our industry and location is intense, and there can be no assurance
that we will be able to attract,  motivate and retain enough qualified employees
necessary for the future continued development of our business and products.

Potential Adverse Impact of Governmental and Other Similar Certifications.

     Trimble has certain  products that are subject to governmental  and similar
certifications  before  they can be sold.  For  example,  FAA  certification  is
required for all aviation products. Also, our products that use integrated radio
communication  technology  require  an  end-user  to obtain  licensing  from the
Federal  Communications  Commission (FCC) for frequency-band  usage.  During the
fourth quarter of 1998, the FCC  temporarily  suspended the issuance of licenses
for certain of our real-time  kinematic  products  because of interference  with
certain  other users of similar  radio  frequencies.  An  inability  or delay in
obtaining such  certifications or delays of the FCC could have an adverse effect
on our operating results.

Dependence on Radio Frequency Spectrum.

     Trimble's  GPS   technology  is  dependent  on  the  use  of  the  Standard
Positioning  Service (SPS) provided by the U.S.  Government's Global Positioning
System (GPS).  The GPS SPS operates in radio  frequency  bands that are globally
allocated for radio navigation satellite services.  International allocations of
radio frequency are made by the International  Telecommunications Union (ITU), a
specialized  technical  agency of the  United  Nations.  These  allocations  are
further governed by Radio  Regulations which have treaty status and which may be
subject to modification  every two-three years by the World Radio  communication
Conference.  Any ITU reallocation of radio frequency bands,  including frequency
band  segmentation or sharing of spectrum,  may materially and adversely  affect
the utility and  reliability  of our  products,  which would,  in turn,  cause a
material  adverse  effect  on  our  operating  results.  In  addition,  unwanted
emissions  from mobile  satellite  services  and other  equipment  operating  in
adjacent  frequency  bands or inband from  licensed and  unlicensed  devices may
materially  and adversely  affect the utility and  reliability  of our products,
which could result in a material  adverse effect on our operating  results.  The
Federal Communications Commission (FCC) continually receives proposals for novel
technologies  and  services  which may seek to operate in, or across,  the radio
frequency bands currently used by the GPS SPS and other public safety  services.
Adverse decisions by the FCC that result in harmful interference to the delivery
of the GPS SPS may materially and adversely  affect the utility and  reliability
of our  products,  which  could  result  in a  material  adverse  effect  on our
operating results.

Reliance on GPS Satellite Network.

     NAVSTAR  satellites and their ground support systems are complex electronic
systems subject to electronic and mechanical failures and possible sabotage. The
satellites were  originally  designed to have lives of 7.5 years and are subject
to damage by the hostile space  environment in which they operate.  However,  of
the current  deployment  of 27  satellites  in place,  some have already been in
place for 12 years and have an  average  age of 6 years.  To repair  damaged  or
malfunctioning   satellites  is  currently  not  economically   feasible.  If  a
significant  number of satellites  were to become  inoperable,  there could be a
substantial  delay before they are replaced with new satellites.  A reduction in
the number of operating  satellites  would impair the current utility of the GPS
system  and the  growth of  current  and  additional  market  opportunities.  In
addition,  there  can be no  assurance  that the  U.S.  government  will  remain
committed to the operation and maintenance of GPS satellites over a long period,
or that the policies of the U.S.  Government  for the use of GPS without  charge
will remain unchanged. However, a 1996 Presidential Decision Directive marks the
first time in the  evolution  of GPS that access for civilian use free of direct
user fees is specifically  recognized and supported by Presidential  policy.  In
addition,   Presidential   policy  has  been   complemented   by   corresponding
legislation, signed into law. Because of ever-increasing commercial applications
of GPS, other U.S. Government agencies may become involved in the administration
or the regulation of the use of GPS signals.  Any of the foregoing factors could
affect the willingness of buyers of the Company's  products to select  

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GPS-based  systems  instead of products  based on  competing  technologies.  Any
resulting change in market demand for GPS products could have a material adverse
effect on Trimble's financial results.  For example,  European  governments have
expressed interest in building an independent satellite navigation system, known
as Galileo.  Depending on the as yet  undetermined  design and operation of this
system,  there  may be  interference  to the  delivery  of the  GPS  SPS and may
materially  and adversely  affect the utility and  reliability  of our products,
which could result in a material adverse effect on our operating results.

Reliance on a continuous power supply.

     *  California  is in the midst of an energy  crisis that could  disrupt our
operations and increase our expenses.  In the event of an acute power  shortage,
that is, when power  reserves  for the State of  California  fall below  certain
critical levels,  California has on some occasions  implemented,  and may in the
future  continue to  implement,  rolling  blackouts  throughout  California.  We
currently do not have backup  generators  or  alternate  sources of power in the
event of a blackout, and our current insurance does not provide coverage for any
damages we or our  customers may suffer as a result of any  interruption  in our
power  supply.  If blackouts  interrupt  our power supply or  Solectron's  power
supply, we would be temporarily unable to continue  operations at our California
facilities.  Any such interruption in our ability to continue  operations at our
facilities or Solectron to manufacture  product at its  facilities  could damage
our reputation,  harm our ability to retain existing customers and to obtain new
customers,  and could result in lost revenue,  any of which could  substantially
harm our business and results of operations.

NEW ACCOUNTING STANDARDS

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 133, (SFAS 133)  "Accounting for Derivative
Instruments and Hedging  Activities",  as amended by SFAS No. 138. SFAS 133 will
require  Trimble to record all  derivatives  held on the  balance  sheet at fair
value.  Derivatives  that are not hedges must be adjusted to fair value  through
income. With respect to derivatives which are hedges, depending on the nature of
the  hedge,  changes  in the fair  value of  derivatives  either  will be offset
against  the  change in fair value of the hedged  assets,  liabilities,  or firm
commitments  through  earnings,  or will be  recognized  in other  comprehensive
income until the hedged item is recognized in earnings.  The ineffective portion
of a  derivative's  change  in fair  value  will be  immediately  recognized  in
earnings.  In June of 1999 the Financial  Accounting Standards Board delayed the
effective date of implementation for one year; therefore,  SFAS 133 is effective
for fiscal years beginning  after June 15, 2000.  Trimble will adopt SFAS 133 as
of the  beginning  of its fiscal year 2001.  The effect of adopting the SFAS 133
has been  evaluated,  and does not have a material  adverse  effect on Trimble's
financial position or results of operations.

     In December 1999, the  Securities  and Exchange  Commission  ("SEC") issued
Staff  Accounting   Bulletin  ("SAB")  101,  Revenue  Recognition  in  Financial
Statements  which  provides  guidance  related to revenue  recognition  based on
interpretations  and  practices  followed by the SEC. SAB 101 was  effective the
first  fiscal  quarter of fiscal  years  beginning  after  December 15, 1999 and
requires  companies to report any changes in revenue  recognition  as cumulative
change in accounting  principle at the time of implementation in accordance with
Accounting Principles Board Opinion No. 20, "Accounting Changes." In March 2000,
the  SEC  issued  SAB  101A   "Amendment:   Revenue   Recognition  in  Financial
Statements,"  which delayed  implementation of SAB 101 until the Company's first
fiscal quarter of 2000. In June 2000, the SEC issued SAB 101B "Second Amendment:
Revenue  Recognition in Financial  Statements," which delayed the implementation
of SAB 101  until the  Company's  fourth  fiscal  quarter  of 2000.  SAB 101 was
adopted by the Company in the fourth fiscal  quarter of 2000 and it did not have
any  material  effect  on  the  Company's   financial  position  or  results  of
operations.


I
tem 7A. Quantitative and Qualitative Disclosure about Market Risk

     The following is a discussion of Trimble's  exposure to market risk related
to changes in interest rates and foreign currency  exchange rates.  Trimble uses
certain derivative financial instruments to manage these risks. Trimble does not
use derivative  financial  instruments for speculative or trading purposes.  All
financial  instruments are used in accordance with polices approved by Trimble's
board of directors.

Market Interest Rate Risk

     Short-term  Investments  Owned by the  Company.  As of December  29,  2000,
Trimble had no short-term investments.

                                       34

<PAGE>

     As of December  31,  1999,  Trimble  had  short-term  investments  of $52.7
million.  These  short-term  investments  consisted  of $50.2  million of highly
liquid  investments,  with original  maturities at the date of purchase  between
three and twelve months and a $2.5 million  liquid  investment  with an original
maturity at the date of purchase of 15 months,  (See Note 4 to the  Consolidated
Financial  Statements.) These investments were subject to interest rate risk and
decreased in value if market interest rates increased. A hypothetical 10 percent
increase in market interest rates from levels at December 31, 1999,  would cause
the fair value of these  short-term  investments  to  decline  by an  immaterial
amount.  Because  Trimble  had the  ability  to  hold  these  investments  until
maturity, we did not expect the value of these investments to be affected to any
significant  degree by the effect of a sudden change in market  interest  rates.
Declines in interest rates over time will, however, reduce our interest income.

     Outstanding Debt of the Company.  The Company is exposed to market risk due
to the  possibility  of changing  interest  rates  under the new senior  secured
credit facilities. The Company's new credit facilities are comprised of a 3-year
US dollar-only  revolver, a 3-year  Multi-Currency  revolver,  and a 5-year term
loan. (See Note 2 to the Consolidated  Financial  Statements  under  Acquisition
Financing.) The entire credit facility has interest payments based on a floating
rate of LIBOR plus 275 basis points for the first 6 months and  thereafter  tied
to a formula  based on the  Company's  leverage  ratio.  The US  dollar  and the
Multi-Currency  revolvers run through July 2003 and have  outstanding  principle
balances at December 29, 2000 of $50,000,000 and $12,000,000,  respectively.  As
of December 29, 2000 the Company has borrowed from the  Multi-Currency  revolver
in US currency only. The term loan runs through July 2005 and has an outstanding
principle  balance of  $100,000,000  at December  29,  2000.  The 3-month  LIBOR
effective rate at December 29, 2000 was 6.438%.  A 10% increase in 3-month LIBOR
rates could result in  approximately  $1.0 million  annual  increase in interest
expense on the existing principal balances.

     The Company also has $7.1 million of Euro-denominated debt. At December 29,
2000 $3.7 million was current.  The interest rate on the current portion of this
instrument is fixed at 6%. A  hypothetical  10% decrease in interest rates would
not have a material impact on the Company as related to this debt.

     In  addition,  the Company has a $1.9  million  promissory  note,  of which
$67,000  was  current  at  December  29,  2000.  The note is  payable in monthly
installments,  bearing an 8.940%  variable  interest  rate. A  hypothetical  10%
increase in interest rates would not have a material impact on the Company.

     As of  December  31,  1999,  Trimble  had  outstanding  long-term  debt  of
approximately $30.0 million of subordinated promissory notes at a fixed interest
rate of 10%. The interest rate of this instrument was fixed. A hypothetical  10%
decrease  in the  interest  rates  would not have a material  impact on Trimble.
Increases in interest rates could, however, increase interest expense associated
with future borrowings of Trimble, if any.

     The Company may consider  utilizing  interest rate swap agreements to alter
interest rate exposures. There were no interest rate swap agreements outstanding
as of December 29, 2000 or December 30, 1999.

Foreign Currency Exchange Rate Risk

     Trimble hedges risks associated with foreign currency transactions in order
to  minimize  the  impact of  changes  in  foreign  currency  exchange  rates on
earnings.  Trimble  utilizes  forward  contracts to hedge trade and intercompany
receivables and payables. These contracts reduce the exposure to fluctuations in
exchange  rate  movements,  as the  gains and  losses  associated  with  foreign
currency  balances are  generally  offset with the gains and losses on the hedge
contracts.  All hedge  instruments  are marked to market through  earnings every
period.

     *  Trimble  does  not  anticipate  any  material   adverse  effect  on  its
consolidated financial position utilizing our current hedging strategy.

     All  contracts  have a maturity of less than one year,  and we do not defer
any gains and  losses,  as they are all  accounted  for through  earnings  every
period.

                                       35

<PAGE>

     The  following  table  provides  information  about the  Company's  foreign
exchange forward contracts outstanding as of December 29, 2000:


<TABLE>
<CAPTION>
                                               Foreign                Contract Value              Fair Value
                            Buy/           Currency Amount                  USD                     in USD
       Currency             Sell           (in thousands)             (in thousands)            (in thousands)
-----------------------  -----------   ------------------------   ------------------------    --------------------
<S>                                                    <C>                        <C>                     <C>    
YEN                         Sell                       125,600                    $ 1,136                 $ 1,106
NZD                         Buy                          4,619                    $ 1,934                 $ 2,045
NZD                         Sell                           200                       $ 80                    $ 89
EURO                        Sell                         4,109                    $ 3,569                 $ 3,863
Sterling                    Buy                          1,665                    $ 2,416                 $ 2,489

</TABLE>


     The following table provides  information  about Trimble's foreign exchange
forward contracts outstanding as of December 31, 1999:


<TABLE>
<CAPTION>
                                               Foreign                Contract Value              Fair Value
                            Buy/           Currency Amount                  USD                     in USD
       Currency             Sell           (in thousands)             (in thousands)            (in thousands)
-----------------------  -----------   ------------------------   ------------------------    --------------------
<S>                                                    <C>                        <C>                     <C>    
YEN                         Buy                         67,000                      $ 657                   $ 656
YEN                         Sell                       261,000                    $ 2,517                 $ 2,568
NZD                         Buy                          4,400                    $ 2,257                 $ 2,289
EURO                        Sell                         2,955                    $ 3,097                 $ 3,014
Sterling                    Buy                          1,230                    $ 2,002                 $ 1,996

</TABLE>



     * The  hypothetical  changes and  assumptions  made above will be different
from what actually occurs in the future.  Furthermore,  the  computations do not
anticipate  actions  that may be  taken  by  Trimble's  management,  should  the
hypothetical  market  changes  actually  occur  over time.  As a result,  actual
earnings effects in the future will differ from those quantified above.

                                       36

<PAGE>


Item 8.     Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS                                           

<TABLE>
<CAPTION>
                                                                        December 29,           December 31,
                                                                            2000                   1999
--------------------------------------------------------------------------------------------------------------------
(In thousands)

ASSETS

Current assets:
<S>                                                                           <C>                    <C>      
      Cash and cash equivalents                                                $ 40,876               $ 49,264
      Short-term investments                                                          -                 52,728
      Accounts receivable, less allowance for doubtful
         accounts of $6,538 and $2,949, respectively                             83,600                 36,005
      Inventories                                                                60,846                 16,435
      Other current assets                                                        8,017                  4,510
                                                                      ------------------     ------------------
         Total current assets                                                   193,339                158,942

Property and equipment, at cost less accumulated
   depreciation                                                                  34,059                 12,333
Intangible assets, less accumulated amortization of
      $16,998 and $5,127, respectively                                          249,832                  1,238
Deferred income taxes                                                               531                    387
Other assets                                                                     12,743                  8,851
                                                                      ------------------     ------------------
         Total long-term assets                                                 297,165                 22,809

                                                                      ------------------     ------------------
         Total assets                                                         $ 490,504              $ 181,751
                                                                      ==================     ==================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Bank & other short-term borrowings                                       $ 62,000                    $ -
      Current portion of long-term debt                                          51,721                  1,388
      Accounts payable                                                           26,448                 11,710
      Accrued compensation and benefits                                          16,771                  7,011
      Accrued liabilities                                                        31,626                 14,091
      Accrued liabilities related to disposal of General Aviation                   867                  2,212
      Accrued warranty expense                                                    7,749                  5,786
      Income taxes payable                                                        5,005                  2,983
      Deferred gain on sale of assets                                             1,591                  1,953
                                                                      ------------------     ------------------
         Total current liabilities                                              203,778                 47,134

Noncurrent portion of long-term debt and other liabilities                      137,341                 30,566
Deferred tax liability                                                            8,230                      -
Other noncurrent liabilities                                                      6,212                  3,255
                                                                      ------------------     ------------------
         Total liabilities                                                      355,561                 80,955
                                                                      ------------------     ------------------

Commitments and contingencies

Shareholders' equity:
      Preferred stock, no par value; 3,000 shares
         authorized; none outstanding                                                 -                      -
      Common stock, no par value; 40,000 shares
         authorized; 24,162 and 22,742 shares outstanding, respectively         153,853                125,969
      Common stock warrants                                                         993                    993
      Accumulated deficit                                                       (10,940)               (25,125)
      Accumulated other comprehensive loss                                       (8,963)                (1,041)
                                                                      ------------------     ------------------
         Total shareholders' equity                                             134,943                100,796

                                                                      ------------------     ------------------
         Total liabilities and shareholders' equity                           $ 490,504              $ 181,751
                                                                      ==================     ==================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       37

<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                     December 29,            December 31,          Janaury 1,
Fiscal Years ended                                                       2000                    1999                 1999
------------------------------------------------------------------------------------------------------------------------------------
 (In thousands, except per share data)


<S>                                                                         <C>                   <C>                   <C>      
Revenue                                                                     $ 369,798             $ 271,364             $ 268,323
                                                                 ---------------------     -----------------    ------------------


Operating expenses:
     Cost of sales                                                            173,237               127,117               141,075
     Research and development                                                  46,520                36,493                45,763
     Sales and marketing                                                       79,901                53,543                61,874
     General and administrative                                                30,514                33,750                33,245
     Restructuring charges                                                          -                     -                10,280
     Amortization of goodwill & other purchased intangibles                    13,407                     -                     -
                                                                 ---------------------     -----------------    ------------------
        Total operating expenses                                              343,579               250,903               292,237
                                                                 ---------------------     -----------------    ------------------
Operating income (loss) from continuing operations                             26,219                20,461               (23,914)

Nonoperating income (expense):
     Interest and investment income                                             4,478                 3,857                 3,588
     Interest  and other expense                                              (14,561)               (3,611)               (5,863)
     Foreign exchange gain (loss)                                                (376)                   28                   234
                                                                 ---------------------     -----------------    ------------------
        Total nonoperating income (expense)                                   (10,459)                  274                (2,041)
                                                                 ---------------------     -----------------    ------------------
Income (loss) before income taxes from continuing operations                   15,760                20,735               (25,955)
Income tax provision                                                            1,575                 2,073                 1,400
                                                                 ---------------------     -----------------    ------------------
Net income (loss) from continuing operations                                 $ 14,185              $ 18,662             $ (27,355)
                                                                 ---------------------     -----------------    ------------------

Discontinued Operations:
     Loss from discontinued operations (net of income tax
          benefit of $0)                                                          $ -                   $ -              $ (5,760)
     Estimated gain (loss) on disposal of discontinued operations
          (net of tax)                                                            $ -               $ 2,931             $ (20,279)
                                                                 ---------------------     -----------------    ------------------
              Gain (loss) on discontinued operations                              $ -               $ 2,931             $ (26,039)
                                                                 ---------------------     -----------------    ------------------
Net income (loss)                                                            $ 14,185              $ 21,593             $ (53,394)
                                                                 =====================     =================    ==================


Basic net income (loss) per share from continuing operations                   $ 0.60                $ 0.83               $ (1.22)
Basic net income (loss) per share from discontinued operations                    $ -                $ 0.13               $ (1.16)
                                                                 ---------------------     -----------------    ------------------
Basic net income (loss) per share                                              $ 0.60                $ 0.96               $ (2.38)
                                                                 =====================     =================    ==================

Shares used in calculating basic
      net income (loss) per share                                              23,601                22,424                22,470
                                                                 =====================     =================    ==================


Diluted net income (loss) per share from continuing operations                 $ 0.55                $ 0.82               $ (1.22)
Diluted net income (loss) per share from discontinued operations                  $ -                $ 0.13               $ (1.16)
                                                                 ---------------------     -----------------    ------------------
Diluted net income (loss) per share                                            $ 0.55                $ 0.95               $ (2.38)
                                                                 =====================     =================    ==================

Shares used in calculating diluted
      net income (loss) per share                                              25,976                22,852                22,470
                                                                 =====================     =================    ==================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       38

<PAGE>

 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                               Accumulative
                                                            Common stock          Retained         other               Total
                                                            and warrants          earnings     comprehensive       shareholders'
                                                         Shares      Amount       (deficit)    income/(loss)          equity
----------------------------------------------------------------------------------------------------------------------------------
 (In thousands)

<S>                                                      <C>        <C>             <C>              <C>             <C>      
 Balance at January 2, 1998                              22,813     $ 133,355       $ 6,676          $ (548)         $ 139,483
 Components of comprehensive income:
        Net loss                                                                    (53,394)                           (53,394)
        Unrealized gain on short-term investments                                                        11                 11
        Currency translation adjustments                                                               (255)              (255)
                                                                                                               ----------------
                Total comprehensive income                                                                             (53,638)
                                                                                                               ----------------
 Subtotal                                                                                                               85,845
                                                                                                               ----------------
 Issuances of stock under employee plans                    514         4,977             -               -              4,977
 Repurchases of common stock                             (1,080)      (16,131)            -               -            (16,131)
                                                  -----------------------------------------------------------------------------
 Balance at January 1, 1999                              22,247       122,201       (46,718)           (792)            74,691
 Components of comprehensive income:
        Net income                                                                   21,593                             21,593
        Unrealized loss on short-term investments                                                      (142)              (142)
        Currency translation adjustments                                                               (107)              (107)
                                                                                                             ------------------
                Total comprehensive income                                                                              21,344
                                                                                                             ------------------
 Subtotal                                                                                                               96,035
                                                                                                             ------------------
 Issuances of stock under employee plans                    495         4,468             -               -              4,468
 Issuance of warrants                                         -           293             -               -                293
                                                  -----------------------------------------------------------------------------
 Balance at December 31, 1999                            22,742       126,962       (25,125)         (1,041)           100,796
 Components of comprehensive income:
        Net income                                                                   14,185                             14,185
        Unrealized gain on short-term investments                                                       123                123
        Currency translation adjustments                                                             (8,045)            (8,045)
                                                                                                             ------------------
                Total comprehensive income                                                                               6,263
                                                                                                             ------------------
 Subtotal                                                                                                              107,059
                                                                                                             ------------------
 Issuances of stock under employee plans
        and exercise of warrants                            843        12,043             -               -             12,043
 Issuances of stock for acquisition                         577        14,995                                           14,995
 Issuance of warrants                                         -           846             -               -                846
                                                  -----------------------------------------------------------------------------
 Balance at December 29, 2000                            24,162     $ 154,846     $ (10,940)       $ (8,963)         $ 134,943
                                                  =============================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       39

<PAGE>

 CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                             December 29,         December 31,         January 1,
 Fiscal Years ended                                                              2000                 1999                1999
----------------------------------------------------------------------------------------------------------------------------------
 (In thousands)

 Cash flow from operating activities of continuing operations:
<S>                                                                            <C>               <C>              <C>          
       Net income (loss) from continuing operations                            $     14,185      $     18,662     $    (27,355)
       Adjustments to reconcile net income (loss) from continuing
            operations to cash flows provided by operating activities 
            of continuing operations:
          Depreciation and amortization expense                                      23,476             9,073           12,510
          Writedown of fixed assets due to restructure                                    -                 -            5,343
          Amortization of deferred gain                                              (2,555)             (651)               -
          Other                                                                      (3,621)              (51)            (835)
       Decrease (increase) in assets:
          Accounts receivable, net                                                   (6,091)           (2,574)          15,475
          Inventories                                                                (4,118)            6,653            5,219
          Other current and noncurrent assets                                        (3,303)             (354)           1,622
          Deferred income taxes                                                        (144)               18              (49)
       Increase (decrease) in liabilities:
          Accounts payable                                                            7,554            (1,290)          (5,724)
          Accrued compensation and benefits                                          (6,362)            2,315           (1,134)
          Customer advances                                                               -              (808)             (22)
          Accrued liabilities                                                         2,955            (8,193)          10,482
          Income taxes payable                                                       (2,141)              825             (506)
                                                                           -----------------   ---------------  ---------------
 Net cash provided  by operating activities of continuing operations                 19,835            23,625           15,026
 Net cash used by operating activities of discontinued operations                         -                 -           (8,058)
                                                                           -----------------   ---------------  ---------------
 Net cash provided (used) by operating activities                                    19,835            23,625            6,968
                                                                           -----------------   ---------------  ---------------

 Cash flow from investing activities:
       Equity investments                                                                35              (748)          (1,548)
       Acquisition of property and equipment                                         (7,555)           (6,411)         (11,539)
       Proceeds from sale of assets                                                       -            26,863                -
       Acquisitions, net of cash acquired                                          (211,488)                -                -
       Costs of capitalized patents                                                    (900)           (1,127)            (992)
       Purchase of short-term investments                                            (6,458)          (54,809)         (53,854)
       Maturities/Sales of short-term investments                                    59,186            18,350           90,756
                                                                           -----------------   ---------------  ---------------
 Net cash provided (used) by investing activities of continuing operations         (167,180)          (17,882)          22,823
 Net cash used by investing activities of discontinued operations                         -                 -             (339)
                                                                           -----------------   ---------------  ---------------
 Net cash provided (used) by investing activities                                  (167,180)          (17,882)          22,484
                                                                           -----------------   ---------------  ---------------

 Cash flow from financing activities:
       Issuance of common stock                                                      12,043             4,468            4,977
       Repurchase of common stock                                                         -                 -          (16,131)
       (Payment)/collection of notes receivable                                         196              (540)            (219)
       Proceeds from long-term debt and revolving credit lines                      162,000                 -            2,835
       (Payments) on long-term debt and revolving credit lines                      (35,282)           (1,272)               -
                                                                           -----------------   ---------------  ---------------
 Net cash provided (used) by financing activities of continuing operations          138,957             2,656           (8,538)
 Net cash provided by financing activities of discontinued operations                     -                 -                -
                                                                           -----------------   ---------------  ---------------
 Net cash provided (used) by financing activities                                   138,957             2,656           (8,538)
                                                                           -----------------   ---------------  ---------------

 Increase (decrease) in cash and cash equivalents                                    (8,388)            8,399           20,914
 Cash and cash equivalents, beginning of period                                      49,264            40,865           19,951
                                                                           -----------------   ---------------  ---------------
 Cash and cash equivalents, end of period                                          $ 40,876          $ 49,264         $ 40,865
                                                                           =================   ===============  ===============
</TABLE>


See accompanying notes to consolidated financial statements

                                       40

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of significant accounting policies:

     Use of estimates.  The  preparation  of financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Due  to  the  inherent  nature  of  those
estimates, actual results could differ from expectations.

     Basis  of  presentation.  Trimble  Navigation  Limited  ("Trimble"  or  the
"Company")  fiscal year is an annual  period that varies from 52 to 53 weeks and
always  ends on the Friday  nearest to  December  31,  which for fiscal 2000 was
December 29, 2000.

     Trimble's  fiscal year will normally  consist of four equal  quarters of 13
weeks each, or 52 weeks;  however, due to the fact that there are not exactly 52
weeks in a calendar year and that there is slightly more than one additional day
per year (not  including  the  effects  of leap year) in each  calendar  year as
compared to a 52-week fiscal year, Trimble will have a fiscal year comprising 53
weeks in certain  fiscal  years,  as  determined by when Friday falls closest to
December 31 in consecutive calendar years.

     In those resulting fiscal years that have 53 weeks,  Trimble will record an
extra week of revenues,  costs and related financial  activity.  Therefore,  the
financial results of those fiscal years, and the associated quarter,  having the
extra week, will not be exactly  comparable to the prior and subsequent  52-week
fiscal years, and the associated quarters having only 13 weeks. Thus, due to the
inherent  nature of  adopting  a 52-53  week  fiscal  year,  Trimble,  analysts,
shareholders,  investors and others will have to make appropriate adjustments to
any analysis  performed when  comparing the Company's  activities and results in
fiscal years that contain 53 weeks, to those that contain the standard 52 weeks.
Fiscal years 2000, 1999, and 1998 were all comprised of 52 weeks.

     The  consolidated  financial  statements  of Trimble  include the operating
results of the Spectra  Precision  Group since the effective date of acquisition
of July 14, 2000 and also include the  operating  results of Tripod Data Systems
since the effective date of acquisition of November 14, 2000.

     Principles of consolidation.  The consolidated financial statements include
the accounts of Trimble and its wholly owned  subsidiaries  after elimination of
all material intercompany balances and transactions.

     Foreign currency  translation.  Assets and liabilities of Trimble's foreign
subsidiaries  are translated into U.S.  dollars at year-end  exchange rates, and
revenues and expenses are  translated  at average  rates  prevailing  during the
year.  Local  currencies are considered to be the functional  currencies for the
Company's  non-U.S.  subsidiaries.  Translation  adjustments  are  deferred in a
separate component of shareholders'  equity.  Foreign currency transaction gains
and losses are included in results of operations as incurred.

     Forward foreign currency exchange  contracts.  Trimble's policy is to hedge
its known exposure to foreign  currency  transactions  to minimize the effect of
changes  in  foreign  currency   exchange  rates  on  consolidated   results  of
operations.  Trimble's  policy is to enter into simple forward foreign  exchange
contracts to either buy or sell currency if the net position  exceeds  $400,000.
The  forward   foreign   exchange   contract   obligates   Trimble  to  exchange
predetermined  amounts of specified  foreign  currencies  at specified  exchange
rates on specified  dates, or to make an equivalent U.S. dollar payment equal to
the value of such  exchange.  For contracts that are designated and effective as
hedges,  discounts,  or premiums (the difference  between the spot exchange rate
and the forward  exchange  rate at  inception of the  contract)  are accreted or
amortized  to other  operating  expenses  over the  contract  lives,  using  the
straight-line  method,  while realized and unrealized gains and losses resulting
from changes in the spot exchange rate (including those from open, matured,  and
terminated contracts) are included in results of operations. The related amounts
due to or from counterparties are included in other assets or other liabilities.
Contract amounts are marked to market,  with changes in market value recorded in
earnings as foreign exchange gains or losses. To date,  Trimble has entered into
simple  forward  foreign  currency  exchange  contracts to offset the effects of
changes in exchange rates on foreign-denominated  intercompany  receivables.  At
December 29, 2000,  Trimble had forward foreign currency  exchange  contracts to
sell 125,600,000  Japanese yen,  4,109,000  European Currency units, and 200,000
New Zealand  dollars and to buy  4,619,000  New  Zealand  dollars and  1,665,000
British  pounds  sterling  at  contracted  rates that  mature  over the next six
months.

                                       41

<PAGE>

     Cash and cash  equivalents.Cash  and cash equivalents  include all cash and
highly liquid investments with original  maturities of three months or less. The
carrying amount of cash and cash equivalents  approximates fair value because of
the short maturity of those instruments.

     Short   term/Marketable   securities.   Trimble  has   classified  all  its
short-term/marketable    investments   as    "available-for-sale"    securities.
Available-for-sale  securities  are carried at fair value,  with the  unrealized
holding gains and losses,  net of tax effects,  reported as a separate component
of shareholders'  equity.  Fair value is based on quoted market prices. The cost
of debt  securities  in this  classification  is adjusted  for  amortization  of
premiums and accretion of discounts to maturity.  Such amortization,  as well as
interest,  dividends, and realized gains and losses, is included in interest and
investment  income.  The  cost of  securities  sold  is  based  on the  specific
identification  method.  Trimble has classified  all  investments as short-term.
(See Note 4 to the Consolidated Financial Statements.)

     Concentration  of credit risk.  In entering into forward  foreign  exchange
contracts,  Trimble  has  assumed  the risk that might  arise from the  possible
inability  of  counterparties  to  meet  the  terms  of  their  contracts.   The
counterparties to these contracts are major multinational  commercial banks, and
Trimble does not expect any losses as a result of counterparty defaults. Trimble
is also exposed to credit risk in its accounts  receivable and performs  ongoing
credit  evaluations of its customers and generally does not require  collateral.
The expenses recorded for doubtful accounts receivable were $1,198,000 in fiscal
2000, $1,875,000 in fiscal 1999, and $195,000 in fiscal 1998.

     Inventories.  Inventories  are  stated  at the  lower of  standard  cost or
market. Standard costs approximate average actual costs.

     Revenue recognition. Trimble recognizes revenue from product sales when the
products are shipped to the customer, title has transferred,  and no significant
obligations  remain.  Trimble also  requires the  following:  (i) execution of a
written  customer  order,  (ii) delivery of the product,  (iii) fee is fixed and
determinable,   and  (iv)  collectibility  of  the  proceeds  is  probable.   In
circumstances where the customer has delayed their acceptance of our product, we
defer recognition of revenue until acceptance.  Revenues from purchased extended
warranty and support  agreements  are deferred and  recognized  ratably over the
term of the warranty/support  period.  Substantially all technology licenses and
research  revenue have consisted of initial  license fees and  royalties,  which
were recognized when earned, when Trimble had no remaining obligations.

     Sales to distributors are recognized upon shipment  providing that there is
evidence of the arrangement through a distribution  agreement or purchase order,
and the Company has no remaining performance obligations, the price and terms of
the  sale  are  fixed  and  collection  is  probable.   As  a  normal  practice,
distributors do not have a right of return.

     In fiscal 1999,  Trimble  adopted  Statement of Position 97-2 (SOP 97-2) as
set forth by FASB,  "Software Revenue  Recognition," which requires that revenue
recognized  from  software  arrangements  be  allocated  to each  element of the
arrangement based on the relative fair values of the elements,  such as software
products, upgrades, enhancements,  post-contract customer support, installation,
or training.  Revenue from  post-contract  customer  support (PCS) is recognized
ratably over the period of the PCS agreement. The implementation of SOP 97-2 did
not have a material impact on the recognized revenue of the Company.

     Trimble accounts for long-term  development  contracts on the percentage of
completion method, and income is recognized as work on contracts  progress,  but
estimated losses on contracts in progress are immediately charged to operations.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting  Bulletin No. 101 (SAB 101). SAB 101 summarizes  certain areas of the
staff's views in applying  generally accepted  accounting  principles to revenue
recognition  in financial  statements.  In the fourth quarter of the fiscal year
ended December 29, 2000, Trimble adopted SAB 101 and reviewed the recognition of
revenue for qualifying  contracts.  The result did not have a material effect on
Trimble's financial position or results of operations.

     Product warranty. Trimble provides for estimated warranty costs at the time
of sale.  The warranty  period is generally  for one year from date of shipment,
except for air  transport  products,  for which the period is  generally a basic
three-year  warranty period with an additional  two-year warranty sold with some
units. The Company's optic and laser products  generally carry one to three year
warranties.  In addition, select military 

                                       42

<PAGE>

programs may require extended  warranty periods and certain products sold by our
Tripod Data Systems subsidiary have a 90 day warranty period.

     Advertising  costs.   Trimble  expenses   advertising  costs  as  incurred.
Advertising expenses were $7,879,000, $4,229,000, and $6,490,000 in fiscal 2000,
1999, and 1998, respectively.

     Research and Development and Engineering Costs.  Research,  development and
engineering  costs are charged to expense  when  incurred.  Trimble has received
third party  funding of $4.8  million,  $7.1  million and $2.9  million in 2000,
1999,  and 1998,  respectively.  Trimble has offset  research,  development  and
engineering  expenses by the third party funding.  Trimble retains the rights to
any technology that is developed.

     Stock  compensation.  In  accordance  with the  provisions  of Statement of
Financial  Accounting  Standards  (SFAS) No. 123,  "Accounting  for  Stock-Based
Compensation,"  Trimble  applies  Accounting  Principles  Board  Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related  interpretations
in accounting for its stock option plans and stock  purchase plan.  Accordingly,
it does not recognize  compensation  cost for stock options  granted at or above
market.  Note 15 to the Consolidated  Financial  Statements  describes the plans
operated by Trimble, and contains a summary of the pro forma effects to reported
net income (loss) and earnings (loss) per share for fiscal 2000,  1999, and 1998
as if Trimble had elected to recognize compensation cost based on the fair value
of the options granted at grant date, as prescribed by SFAS No. 123.

     Depreciation.  Depreciation  of  property  and  equipment  owned  or  under
capitalized  leases is computed using the straight-line  method over the shorter
of the estimated  useful lives or the lease terms.  Useful lives include a range
from three to eight years for machinery and equipment and four to five years for
furniture and fixtures.

     Intangible and Long-lived  Assets.  Intangible  assets include goodwill and
other  intangible  assets  such  as  assembled  workforce,   patents,  licenses,
technology and  trademarks,  which are  capitalized at cost and amortized on the
straight-line basis over their estimated useful lives. Useful lives range from 3
to 10 years, with the exception of goodwill, which is amortized over 20 years.

     If facts and  circumstances  indicate that the goodwill,  other  intangible
assets or property and  equipment  may be impaired,  an evaluation of continuing
value would be performed.  If an evaluation  is required,  the estimated  future
undiscounted  cash flows associated with these assets would be compared to their
carrying  amount to determine if a write down to fair market value or discounted
cash flow value is required.

     Interest.  All  interest  costs  incurred  have been  charged  to  interest
expense.

     Earnings (loss) per share. Basic earnings per share represents the weighted
average  common shares  outstanding  during the period and excludes any dilutive
effects of options,  warrants, and convertible securities.  The dilutive effects
of  options,  warrants,  and  convertible  securities  are  included  in diluted
earnings per share.

     New accounting standards.  In June 1998, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 133, (SFAS 133), as
amended by SFAS No. 138  "Accounting  for  Derivative  Instruments  and  Hedging
Activities." SFAS 133 will require Trimble to record all derivatives held on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value  through  income.  With  respect  to  derivatives  which are  hedges,
depending on the nature of the hedge,  changes in the fair value of  derivatives
either  will be offset  against  the change in fair value of the hedged  assets,
liabilities,  or firm  commitments  through  earnings,  or will be recognized in
other comprehensive income until the hedged item is recognized in earnings.  The
ineffective  portion of a derivative's  change in fair value will be immediately
recognized in earnings. In June of 1999 the Financial Accounting Standards Board
delayed the effective date of implementation for one year;  therefore,  SFAS 133
is effective for fiscal years beginning after June 15, 2000.  Trimble will adopt
SFAS 133 as of the beginning of its fiscal year 2001. The effect of adopting the
SFAS 133 has been  evaluated,  and will not have a  material  adverse  effect on
Trimble's financial position or results of operations.

     In December 1999, the  Securities  and Exchange  Commission  ("SEC") issued
Staff  Accounting   Bulletin  ("SAB")  101,  Revenue  Recognition  in  Financial
Statements  which  provides  guidance  related to revenue  recognition  based on
interpretations  and  practices  followed by the SEC. SAB 101 was  effective the
first  fiscal  quarter of fiscal  years  beginning  after  December 15, 1999 and
requires  companies to report any changes in revenue  recognition  as cumulative
change in accounting  principle at the time of implementation in accordance with
Accounting Principles 

                                       43

<PAGE>

Board Opinion No. 20,  "Accounting  Changes." In March 2000,  the SEC issued SAB
101A "Amendment:  Revenue  Recognition in Financial  Statements,"  which delayed
implementation  of SAB 101 until the Company's  first fiscal quarter of 2000. In
June 2000,  the SEC issued SAB 101B "Second  Amendment:  Revenue  Recognition in
Financial  Statements,"  which delayed the  implementation  of SAB 101 until the
Company's  fourth fiscal  quarter of 2000. SAB 101 was adopted by the Company in
the fourth fiscal quarter of 2000 and it did not have any material effect on the
Company's financial position or results of operations.

Note 2 - Acquisitions:

SPECTRA PRECISION GROUP ACQUISTION

     Effective as of July 14, 2000,  Trimble  completed the  acquisition  of the
Spectra  Precision  wholly owned  businesses  formerly owned by Thermo  Electron
Corporation  ("Thermo  Electron"),  collectively known as the "Spectra Precision
Group" for an aggregate  purchase  price of  approximately  $294  million.  This
purchase  price  is  subject  to a  final  adjustment  as  provided  for  in the
acquisition agreements. This final adjustment is not expected to be material.

     The  acquisition  included 100% of the stock of Spectra  Precision  Inc., a
Delaware  corporation,  Spectra Precision SRL, an Italian  corporation,  Spectra
Physics  Holdings  GmbH,  a German  corporation,  and  Spectra  Precision  BV, a
Netherlands  corporation.  The  acquisition  also  included  certain  assets and
liabilities of Spectra  Precision AB, a Swedish  corporation,  including 100% of
the shares of Spectra  Precision  SA, a French  corporation,  Spectra  Precision
Scandinavia  AB, a Swedish  corporation,  Spectra  Precision  of Canada  Ltd., a
Canadian  corporation,   and  Spectra  Precision  Handelsges  mbH,  an  Austrian
corporation. The acquisition has been accounted for as a purchase for accounting
purposes; accordingly,  Trimble's consolidated results of operations include the
operating results of the Spectra Precision Group since the effective date of the
acquisition.   The   acquisition   was  financed  with  $80  million  in  seller
subordinated  debt, $140 million of debt provided  through a syndicate of banks,
and  $74  million  of  the  Company's  available  cash  on  hand.  (See  further
discussions   below  under   "Acquisition   Financing".)  The  Company  acquired
approximately  $133  million of  identifiable  intangible  assets as part of the
acquisition  which the Company is amortizing  over various time periods  ranging
from 5 to 10  years.  The  preliminary  allocation  of  purchase  price has also
resulted in the recording of  approximately  $133 million of goodwill due to the
acquisition,  which will be amortized over 20 years.  Acquisition costs relating
to the purchase of the Spectra Precision Group approximated $7 million.

     In connection  with the  acquisition of the Spectra  Precision  Group,  the
Company  accrued   approximately   $9.0  million  for  costs  to  close  certain
duplicative  office  facilities  and combine  operations  and  relocate  certain
employees. These costs were accrued for as part of the preliminary allocation of
the purchase price.  The facility  consolidation  and employee  relocations will
result from  primarily  combining  certain  office  facilities  and  duplicative
functions,  including management functions,  of the Spectra Precision Group. The
Company  has not yet  finalized  its  plans  to  consolidate  facilities  and to
relocate  employees,  nor has it finalized a determination of the total costs to
be  incurred  upon the  termination  of certain  office  facility  leases or its
ability to sublease vacated office space.  Accordingly,  unresolved issues could
result in an increase or decrease in the liabilities for facility consolidation,
the  discontinuance  of overlapping  product  lines,  employee  relocation,  and
related tax and legal expenses.  These adjustments,  if any, will be reported as
an increase or decrease in goodwill.  Through December 29, 2000, the Company had
charged  $809,000  (which  consisted  of  inventory  write-offs  related  to the
discontinuance  of  overlapping  product  lines)  against the  reserve,  and the
accrual for future costs to be incurred was $8.2 million at December 29, 2000.

     The  elements of the  reserve at fiscal year end 2000 on the balance  sheet
are as follows (in thousands):


Employee Relocation Expense                            $ 390
Inventory Obsolescence                                 1,876
Legal and Tax Expense                                  1,175
Restructuring Expenses                                 4,750
                                              ---------------
     Subtotal                                        $ 8,191
                                              ===============

                                       44

<PAGE>

Acquisition Financing:

     In order to finance the acquisition of the Spectra  Precision  Group,  fund
the Company's  on-going working capital  requirements,  and pay related fees and
expenses of the  acquisition,  Trimble (i) obtained a new senior  secured credit
facility,  (ii) issued an $80 million subordinated seller promissory note, (iii)
terminated its then existing $50 million unsecured revolving credit facility and
(iv) prepaid its then existing $30 million outstanding  subordinated  promissory
notes, as briefly summarized below.

     New Credit Facilities: In July 2000, ABN AMRO Bank, N.V. led a syndicate of
banks which underwrote $200 million of new senior, secured credit facilities for
the Company  (the "New Credit  Facilities")  to support the  acquisition  of the
Spectra Precision Group and the Company's  ongoing working capital  requirements
and to  refinance  certain  existing  debt.  (See  Note  10 to the  Consolidated
Financial Statements for the specific terms of the New Credit Facilities.)

     New Seller  Promissory  Note: The Company issued an $80 million  promissory
note to the seller,  which is  subordinated to the New Credit  Facilities.  (See
Note 11 to the Consolidated  Financial  Statements for the specific terms of the
New Seller Promissory Note.)

     Prepayment  of  Existing  $30  million  Subordinated  Notes:  In June 1994,
Trimble  issued $30 million of  subordinated  promissory  notes to John  Hancock
bearing  interest at an annual rate of 10%,  with  principal and interest due on
June 15, 2001. In order to effect the acquisition of the Spectra Precision Group
and as part of obtaining  the New Credit  Facilities,  Trimble  prepaid all such
outstanding   long-term  note  obligations  to  John  Hancock  for  a  total  of
$31,069,108,  which  consisted of $30 million in principal,  $183,333 in accrued
interest  and $885,775 as a  prepayment  penalty.  Pursuant to the terms of such
original  notes,  any  prepayment  of any portion of the  outstanding  principal
required  Trimble to pay additional  amounts if U.S.  Treasury  obligations of a
similar maturity exceed a specified yield. The prepayment penalty is included in
interest expense.

     Termination of Existing $50 million Unsecured Revolving Credit Facility: In
August 1997, Trimble entered into a three-year,  $50,000,000 unsecured revolving
credit facility with four banks (the "Credit Agreement").  This Credit Agreement
enabled Trimble to borrow up to $50,000,000, provided that certain financial and
other  covenants  were  met.  Trimble  never  made  any  borrowings  under  such
$50,000,00  unsecured revolving portion of the Credit Agreement,  but had issued
certain letters of credit amounting to approximately $1.2 million as of June 30,
2000. In order to effect the acquisition of the Spectra Precision Group, in July
2000 Trimble  completely  terminated this Credit Agreement in favor of obtaining
the New Credit Facilities described above.

TRIPOD DATA SYSTEMS ACQUISITION

     Effective as of November 14, 2000,  Trimble  completed the  acquisition  of
Tripod Data Systems, Inc., an Oregon corporation for an aggregate purchase price
of less than $15  million.  The  purchase  price was paid in the form of 576,726
shares of the common stock of Trimble.

     The  acquisition  has  been  accounted  for as a  purchase  for  accounting
purposes; accordingly,  Trimble's consolidated results of operations include the
operating  results  of  Tripod  Data  Systems  since the  effective  date of the
acquisition.  The allocation of the purchase price has resulted in the recording
of approximately $10.7 million of goodwill due to the acquisition, which will be
amortized  over 20 years.  Acquisition  costs relating to the purchase of Tripod
Data Systems approximated $194,000.

                                       45

<PAGE>

Note 3 - Unaudited pro forma information:

     The accompanying  consolidated  statements of operations of Trimble include
the accounts of the Spectra Precision Group for the period July 14, 2000 through
December  29, 2000 and of Tripod Data  Systems for the period  November 14, 2000
through  December 29, 2000. The following pro forma  information  for the twelve
months ended December 29, 2000 and December 31, 1999 presents net sales,  income
(loss) before  extraordinary items, and net loss for each of these periods as if
the transaction  with the Spectra  Precision Group was consummated on January 2,
1999.  This unaudited pro forma data does not purport to represent the Company's
actual  results  of  operations  had the  Spectra  Precision  Group  acquisition
occurred on January 2, 1999 and should not serve as a forecast of the  Company's
operating results for any future periods.

(in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                   ------------------------------------------
                                                                              Twelve Months Ended
                                                                       December 29,          December 31,
                                                                           2000                  1999
                                                                    -----------------------------------------
<S>                                                                          <C>                   <C>      
Net revenue                                                                  $ 491,436             $ 488,728
Net loss from continuing operations                                             (1,920)              (17,661)
Net loss                                                                        (1,920)              (14,730)

Basic net loss per share from continuing operations                            $ (0.08)              $ (0.79)
Basic net income (loss) per share from discontinued operations                       -                $ 0.13
                                                                    -------------------    ------------------
Basic net loss per share                                                       $ (0.08)              $ (0.66)

Diluted net loss per share from continuing operations                          $ (0.08)              $ (0.79)
Diluted net income (loss) per share from discontinued operations                     -                $ 0.13
                                                                    -------------------    ------------------
Diluted net loss per share                                                     $ (0.08)              $ (0.66)
</TABLE>



Note 4 - Short term investments:

     All  marketable  securities  are intended by management to be available for
sale and are reported at fair value with net unrealized gains or losses reported
within shareholders' equity. Realized gains and losses are recorded based on the
specific identification method.

     At December  29, 2000,  Trimble had no  short-term  investments.  The table
below shows the carrying amount of Trimble's investments at December 31, 1999.


<TABLE>
<CAPTION>
                                                       Fiscal Year ended
                                                       December 31, 1999
                              -------------------------------------------------------------------
                                                    Gross             Gross
                                Amortized         Unamortized       Unamortized      Estimated
                                  Cost              Gains             Losses         Fair Value
-------------------------------------------------------------------------------------------------
(In thousands)

Investments:
<S>                                <C>                    <C>            <C>            <C>     
  U.S. government
      obligations                  $ 32,631               $ -             $ (99)        $ 32,532
  State and municipal                                                                          -
      securities                      7,658                 -                (1)           7,657
  Certificates of deposit             2,500                 -                (2)           2,498
  Corporate debt securities           7,462                 -               (20)           7,442
  Other                               2,600                 -                (1)           2,599
-------------------------------------------------------------------------------------------------
Total                              $ 52,851               $ -            $ (123)        $ 52,728
                              ===================================================================
</TABLE>


     At December 31, 1999, investments with scheduled maturities within one year
were $50.2  million  and for  maturities  between  one to three  years were $2.5
million.

                                       46

<PAGE>

Note 5 - Balance sheet components:

<TABLE>
<CAPTION>

                                                 December 29,           December 31,
                                                    2000                    1999
------------------------------------------------------------------------------------------
 (In thousands)

<S>                                                    <C>                     <C>     
 Inventories
         Raw materials                                 $ 27,878                 $ 2,582
         Work-in-process                                  6,940                   2,232
         Finished goods                                  26,028                  11,621
                                              ------------------     -------------------
                                                       $ 60,846                $ 16,435
                                              ==================     ===================

 Property and equipment
         Machinery and equipment                       $ 67,245                $ 50,831
         Furniture and fixtures                           6,994                   5,930
         Leasehold improvements                           5,633                   5,387
         Buildings                                        7,948                       -
         Land                                             1,905                       -
                                              ------------------     -------------------
                                                         89,725                  62,148
         Less accumulated depreciation                  (55,666)                (49,815)
                                              ------------------     -------------------
                                                       $ 34,059                $ 12,333
                                              ==================     ===================
</TABLE>


     Increases in inventory  from  December 31, 1999 are due to the purchases of
the Spectra  Precision  Group in July 2000 and Tripod  Data  Systems in November
2000,  which  accounted  for an  aggregate  of $30.3  million of the  balance at
December  29, 2000 and  additional  purchases  to help  mitigate  the  continued
delivery problems related to critical part shortages in our supply chain

     Increases in property and  equipment  from December 31, 1999 are due to the
purchases of the Spectra Precision Group in July 2000 and Tripod Data Systems in
November  2000,  which  accounted  for an  aggregate  of  $18.3  million  of net
property, plant and equipment at December 29, 2000.

Note 6 - Disposition of assets:

     On August  10,  1999,  Trimble  signed  an Asset  Purchase  Agreement  with
Solectron  Corporation  and  Solectron  Federal  Systems,  Inc.   (collectively,
"Solectron"). The closing of the transaction occurred on August 13, 1999. At the
closing  of the Asset  Purchase  Agreement,  Trimble  transferred  to  Solectron
substantially  all  of  Trimble's  tangible   manufacturing  assets  located  at
Trimble's Sunnyvale,  California campus, including but not limited to equipment,
fixtures and work in progress,  and certain contract and other intangible assets
and rights, together with certain related obligations, including but not limited
to real property  subleases covering  Trimble's  manufacturing  floor space, and
outstanding  purchase  order  commitments.   In  addition,  the  Asset  Purchase
Agreement also provided for Solectron's subsequent purchase, on August 30, 1999,
of Trimble's entire component inventory, on hand as of August 13, 1999.

     The final  purchase  price for these assets was $26.9  million.  As part of
this agreement Trimble incurred some employee and facility related  liabilities,
which have been  accrued  for and offset  against  the gain on the sale of these
assets.  The net gain on the  transaction  to Trimble of $5.9  million  has been
deferred  and is being  recognized  over the  three-year  exclusive  life of the
Supply Agreement  described below. In the fourth quarter of fiscal 2000, certain
contingencies were finalized, and the deferred gain was reduced by $695,000. The
remaining  gain  will be  amortized  over the  remaining  period  of the  supply
agreement.

     Concurrently with the closing of the Asset Purchase Agreement,  Trimble and
Solectron also entered into a Supply  Agreement.  The Supply Agreement  provides
for the exclusive  manufacture by Solectron of almost all Trimble products for a
period of three years. Solectron offered employment to approximately 230 Trimble
manufacturing,   engineering   and  related  support   personnel,   and  Trimble
understands that  substantially all such employees accepted such employment with
Solectron.

                                       47

<PAGE>

Note 7 - Discontinued operations:

     On October 2,  1998,  Trimble  adopted a plan to  discontinue  its  General
Aviation division.  Accordingly, the General Aviation division is being reported
as a  discontinued  operation  for all  periods  presented  in  these  financial
statements.  Net assets of the  discontinued  operation  at October 2, 1998 were
written off and consisted primarily of inventory,  property, plant and equipment
and intangible assets.

     The original  estimated loss on the disposal of the discontinued  operation
in fiscal  1998 was $19.9  million,  but was  adjusted in March 1999 for certain
product lines that were subsequently  retained.  The adjusted  estimated loss on
the disposal is $20.3  million.  The original  fiscal 1998  estimate  included a
write-off  of net assets of $12.7  million and a provision  of $7.2  million for
costs of  disposal,  including  severance  costs,  facility  and  certain  other
contractual  costs, and anticipated  operating losses through the estimated date
of disposal.  The adjusted  fiscal 1999  estimate  included the write-off of net
assets of $12.7  million and a provision  of $7.6 million for costs of disposal,
including  severance costs,  facility and certain other  contractual  costs, and
anticipated operating losses through the estimated date of disposal.

     During the fourth  fiscal  quarter of 1999,  the  Company  had  revised its
accrual for the remaining  costs  expected to be incurred based on the status of
the related liabilities associated with the disposal of the discontinued General
Aviation division.  This resulted in a reversal of approximately $2.9 million of
prior amounts accrued related to the discontinued operations.

     As of December  29,  2000,  Trimble has a remaining  provision  of $870,000
associated with the disposal of the General  Aviation  Division,  which includes
$300,000 for the estimated  remaining  operating losses for service and warranty
support and  remaining  severance  costs,  and $570,000 for facility and certain
other contractual costs.

Note 8 - The Company, industry segment, geographic, and customer information:

     Trimble is a leading  worldwide  designer  and  distributor  of  innovative
positioning  products  and  applications  enabled by GPS,  optical,  laser,  and
wireless communications technology. We design and market products, which deliver
integrated information solutions, such as, collecting, analyzing, and displaying
position data to our end-users.  We offer an integrated product line for diverse
applications in our targeted markets.

     Effective in the third quarter of fiscal year 2000,  management changed the
number of its reportable  segments from two to five segments.  The five segments
are now the following: (i) Engineering and Construction, (ii) Agriculture, (iii)
Fleet and Asset  management,  (iv)  Component  Technologies,  and (v)  Portfolio
Technologies.  This change resulted  primarily from a reorganization  of overall
management  responsibility  announced  in  August  2000 in  connection  with the
completion of the purchase of the Spectra  Precision Group. (See Note 2 of Notes
to the Consolidated Financial Statements.)

     To achieve distribution,  marketing,  production, and technology advantages
in our targeted markets, we manage ourselves within five segments:

     o  Engineering  and  Construction  - Consists  of products  currently  used
        by construction  professionals  in the field for positioning  data 
        collection, field  computing, data  management, and  automated  machine
        guidance and control. These  products  provide  solutions  for  numerous
        construction applications,  including: surveying; general construction;
        site preparation and excavation; road and runway construction; and
        underground construction.

     o  Agriculture - Consists of products that provide key advantages in a 
        variety of  agriculture  applications,  primarily  in the  areas  of  
        precise  land leveling, machine guidance, yield monitoring and variable-
        rate applications of fertilizers and chemicals.

     o  Fleet and Asset  Management - Consists of products that enable end-users
        to efficiently  monitor and manage   their   mobile  and  fixed  assets
        by transmitting location-relevant and  time-sensitive  information  from
        the field to the office.  We currently  offer a range of products  that
        address the following:  long-haul trucking;  municipal fleet management;
        shipping; and fixed asset data  collection  for a wide  variety of  
        governmental and private entities.  This segment is an  aggregation  of
        our Mapping and GIS operation and our Mobile  Positioning and 
        Communications  operation.  These operations  have  been  aggregated
        based  on the fact  that the products mentioned above are  complimentary
        in our asset  management  solutions and there  is a strong  similarity 
        in the  production  process,  the  types of customers, and distribution
        methods.

                                       48

<PAGE>

     o  Component Technologies - Currently,  we market  our  component  products
        through an extensive network of OEM  relationships.  These products 
        include proprietary chipsets,  modules and a variety of intellectual  
        property. The applications into which  end-users  currently  incorporate
        our component products include: timing applications  for  synchronizing
        wireless  and computer systems;  in-vehicle navigation and telematics 
        (tracking) systems; fleet management; security systems;  data collection
        systems; and wireless handheld consumer products.

     o  Portfolio  Technologies - This segment is comprised of various markets 
        that use accurate position,  velocity,  and timing information.  The
        products in this segment are used in airborne navigation, flight 
        management, commercial marine  navigation,  and  military  applications.
        Also,  included in this segment are the  operations  of our Tripod  Data
        Systems subsidiary.  The various  operations that comprise this segment 
        were aggregated on the basis that no single  operation  accounted for 
        more than 10% of the total revenue of the Company.

     Trimble  evaluates  each  of  these  segment's  performance  and  allocates
resources based on profit and loss from operations before income taxes.

     The  accounting  policies  applied by each of the  segments are the same as
those used by Trimble in general.

     The  following  table  presents  revenues,  operating  income  (loss),  and
identifiable  assets for Trimble's five segments.  The information  includes the
operations  of the  Spectra  Precision  Group after July 14,  2000,  Tripod Data
Systems after November 14, 2000, and the  information for 1999 and 1998 has been
reclassified in order to conform to the new basis of  presentation.  There is no
recognition of inter-segment sales or transfers.  Operating income (loss) is net
sales less operating expenses,  excluding general corporate  expenses,  interest
income (expense), and income taxes. The identifiable assets that Trimble's Chief
Operating  Decision  Maker (CODM) views by segment are accounts  receivable  and
inventory,  except  for  the  accounts  receivable  and  inventory  for  Spectra
Precision  Group and Tripod Data Systems  which are not  currently  allocated to
business  segments.  Trimble does not report  depreciation  and  amortization or
capital expenditures by segment to the CODM.

                                       49

<PAGE>


<TABLE>
<CAPTION>

                                                     -------------------------------------------------------------------------------
                                                                                   Twelve Months Ended
                                                                                    December 29, 2000
                                                     -------------------------------------------------------------------------------
                                                                                     (in thousands)
                                                     -------------------------------------------------------------------------------
                                                                                   Fleet and 
                                                       Engineering &                 Asset       Component    Portfolio   
                                                       Construction  Agriculture   Management   Technologies Technologies  Total
                                                     -------------------------------------------------------------------------------
<S>                                                     <C>           <C>          <C>           <C>          <C>        <C>      
External net revenue                                    $ 195,150     $ 26,024     $ 65,099      $ 60,230     $ 23,295   $ 369,798
Operating profit (loss) before corporate allocations       43,937        4,254       15,211        14,850       (1,540)     76,712
Corporate allocations (1)                                 (15,120)      (2,724)      (8,232)       (4,788)      (2,687)    (33,551)
                                                     ------------------------------------------------------------------------------
Operating profit (loss)                                  $ 28,817      $ 1,530      $ 6,979      $ 10,062     $ (4,227)   $ 43,161
Assets:
   Accounts recievable (2)                               $ 23,685      $ 4,649     $ 12,164      $ 11,892      $ 6,469    $ 58,859
    Inventory (3)                                          10,046        1,774        5,775         2,360        6,774      26,729

                                                     -------------------------------------------------------------------------------
                                                                                   Twelve Months Ended
                                                                                    December 31, 1999
                                                     -------------------------------------------------------------------------------
                                                                                     (in thousands)
                                                     -------------------------------------------------------------------------------
                                                                                   Fleet and 
                                                       Engineering &                 Asset       Component    Portfolio   
                                                       Construction  Agriculture   Management   Technologies Technologies  Total
                                                     -------------------------------------------------------------------------------
External net revenue                                    $ 108,536     $ 12,837     $ 67,271      $ 58,660     $ 24,060   $ 271,364
Operating profit (loss) before corporate allocations       37,223        2,407       14,677        15,055       (2,598)     66,764
Corporate allocations (1)                                 (16,067)      (2,204)      (8,108)       (5,261)      (3,422)    (35,062)
                                                     ------------------------------------------------------------------------------
Operating profit (loss)                                  $ 21,156        $ 203      $ 6,569       $ 9,794     $ (6,020)   $ 31,702
Assets:
   Accounts recievable (4)                               $ 22,304      $ 1,510     $ 11,009       $ 9,273      $ 5,313    $ 49,409
    Inventory                                             $ 6,653          $ 2      $ 2,180       $ 2,392      $ 5,208      16,435


                                                     -------------------------------------------------------------------------------
                                                                                   Twelve Months Ended
                                                                                    January 1, 1999
                                                     -------------------------------------------------------------------------------
                                                                                     (in thousands)
                                                     -------------------------------------------------------------------------------
                                                                                   Fleet and 
                                                       Engineering &                 Asset       Component    Portfolio   
                                                       Construction  Agriculture   Management   Technologies Technologies  Total
                                                     -------------------------------------------------------------------------------
External net revenue                                    $ 123,491           $ -    $ 64,515      $ 36,296     $ 44,021   $ 268,323
Operating profit (loss) before corporate allocations       13,708             -       6,305         5,367       (5,920)     19,460
Corporate allocations (1)                                 (11,437)            -      (4,982)       (3,068)          88     (19,399)
                                                     -------------------------------------------------------------------------------
Operating profit (loss)                                   $ 2,271           $ -     $ 1,323       $ 2,299     $ (5,832)      $ 61
Assets:
   Accounts recievable (4)                               $ 20,957           $ -    $ 10,790       $ 7,936      $ 7,392    $ 47,075
    Inventory                                               8,396             -       5,820         4,379        7,729      26,324


------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) For the fiscal years ended  December  29, 2000 and  December  31, 1999,  the
Company  determined the amount of corporate  allocations  charged to each of its
segments based on a percentage of the segments'  monthly revenue,  gross profit,
and controllable spending (research and development,  marketing, and general and
adminstrative). For the Fiscal year ended January 1, 1999 the Company determined
the amount of corporate allocations charged to each of its segments,  based on a
percentage  of  the  segments  monthly   inventory  balance  and  gross  profit.
Allocation  percentages  were  determined  at  the  beginning  of  each  of  the
respective fiscal years.

(2) As presented,  the accounts  receivable  number excludes cash in advance and
reserves,  and the Spectra  Precision  Group's and Tripod Data System's accounts
recievable as of December 29, 2000, which are not allocated between segments.

(3) As presented,  the inventory number excludes the Spectra  Precision  Group's
and Tripod  Data  System's  inventory  as of  December  29,  2000,  which is not
allocated between segments.

(4) As presented,  the accounts  receivable  number excludes cash in advance and
reserves, which are not allocated between segments.

(5)  The  company  determined  that it is  impracticable  to  obtain  all of the
applicable information for the twelve months ended January 1, 1999 to report its
Agriculture  operating  segment  for  that  period  in  accordance  with the new
internal  reporting  structure.  The  Company  does not  believe the amounts are
significant  for  fiscal  1998 and have  included  them in the  Engineering  and
Construction division.
</FN>
</TABLE>


                                       50

<PAGE>

         The  following  are  reconciliations  corresponding  to  totals  in the
accompanying consolidated financial statements (in thousands):

<TABLE>
<CAPTION>

                                                                         Fiscal Years Ended
                                                  --------------------------------------------------------------
                                                     December 29,           December 31,            January 1,
Revenues:                                                2000                   1999                   1999
-------------------------------------------------  ------------------   -------------------   ------------------

<S>                                                      <C>                   <C>                  <C>      
Total for reportable divisions                           $ 369,798             $ 271,364            $ 268,323
                                                    =================   ===================   ==================

Operating profit:
--------------------------------------------------
Total for reportable divisions                            $ 43,161              $ 31,702                 $ 61
Unallocated corporate expenses                             (16,942)              (11,241)             (23,975)(3)
                                                    -----------------   -------------------   ------------------
     Income before income taxes                           $ 26,219              $ 20,461            $ (23,914)
                                                    =================   ===================   ==================



Assets:
--------------------------------------------------
Accounts receivable total for reportable divisions        $ 58,859              $ 49,409             $ 47,075
Unallocated (1)                                             24,741               (13,404)             (13,644)
                                                    -----------------   -------------------   ------------------
   Total                                                  $ 83,600              $ 36,005             $ 33,431
                                                    =================   ===================   ==================

Inventory total for reportable divisions                  $ 26,729              $ 16,435             $ 26,324
Common inventory (2)                                        34,117                     -               10,842
                                                    -----------------   -------------------   ------------------
   Net inventory                                          $ 60,846              $ 16,435             $ 37,166
                                                    =================   ===================   ==================


<FN>

--------------------------------------------------------------------------------
(1)  Includes  cash in advance and reserves  that are not  allocated by segment.
Also for December 29, 2000  accounts  receivable  includes the Spectra  Precison
Group and Tripod Data System as their  accounts  receivable are not allocated by
segment.

(2) Consists of inventory that is common between the segments. Parts can be used
by either  segment.  Also for  December  29,  2000  inventory  consists of $29.1
million and $1.3  million of Spectra  Precision  Group and Tripod Data  Systems,
respectively as their inventory is not allocated by segment.

(3) Includes approximately $10.3 million of restructuring charges.
</FN>
</TABLE>



         The  geographic  distribution  of Trimble's  revenues and  identifiable
assets by fiscal year-end is summarized in the table below in thousands.

<TABLE>
<CAPTION>
                                                                  Geographic Area
                                            ---------------------------------------------------------
                                                            Europe/                     Other                          
                                                U.S.      Middle East       Asia   Foreign Countries  Eliminations     Total
                                            ---------------------------------------------------------------------------------------

2000
<S>                                   <C>   <C>            <C>            <C>          <C>                           <C>      
     Sales to unaffiliated customers  (1)   $ 175,993      $103,455       $ 43,922     $ 46,428                      $ 369,798
     Intergeographic transfers                 65,117        12,108          8,320                       (85,545)            -
                                         --------------------------------------------------------------------------------------
     Total revenue                          $ 241,110      $115,563       $ 52,242     $ 46,428         $(85,545)    $ 369,798
                                         --------------------------------------------------------------------------------------

     Identifiable assets                    $ 146,821      $ 84,358       $ 12,016      $ 4,588          $(6,274)    $ 241,509

1999
     Sales to unaffiliated customers  (1)   $ 131,395      $ 68,301       $ 37,707     $ 33,961              $ -     $ 271,364
     Intergeographic transfers                 56,024             -          1,480            -          (57,504)            -
                                         --------------------------------------------------------------------------------------
     Total revenue                          $ 187,419      $ 68,301       $ 39,187     $ 33,961         $(57,504)    $ 271,364
                                         --------------------------------------------------------------------------------------

     Identifiable assets                    $ 155,163      $ 16,119       $ 10,550         $ 92           $ (173)    $ 181,751

1998
     Sales to unaffiliated customers  (1)   $ 143,828      $ 66,446       $ 34,712     $ 23,337              $ -     $ 268,323
     Intergeographic transfers                 79,416             -          1,153            -          (80,569)            -
                                         --------------------------------------------------------------------------------------
     Total revenue                          $ 223,244      $ 66,446       $ 35,865     $ 23,337         $(80,569)    $ 268,323
                                         --------------------------------------------------------------------------------------

     Identifiable assets                    $ 134,170      $ 13,384        $ 9,460         $ 28           $ (763)    $ 156,279

------------------------------------------------------------------------------------------------------
<FN>
(1) Sales attributed to countries based on the location of the customer.
</FN>
</TABLE>


                                       51

<PAGE>

     Transfers  between  U.S.  and foreign  geographic  areas are made at prices
based on total costs and  contributions  of the supplying  geographic  area. The
Company's  subsidiaries  in the Pacific Rim and Asia have  derived  revenue from
commissions  from domestic  operations in each of the periods  presented.  These
commission  revenues and expenses are excluded  from total revenue and operating
income (loss) in the preceding table. Sales to unaffiliated customers in Europe,
Japan,  Australia,  and Mexico are made by the Company's  subsidiaries  in those
countries.

     No single customer accounted for 10% or more of Trimble's total revenues in
fiscal years 2000, 1999, or 1998.

Note 9 - Restructuring reserves:

1998 Restructuring Charges:

     In fiscal 1998,  Trimble  recorded  restructuring  charges  totaling  $10.3
million  in  operating  expenses.  These  charges  were a  result  of  Trimble's
reorganization  activities,  through which the Company downsized its operations,
including  reducing  headcount  and  facilities  space  usage,  and canceled its
enterprise-wide  information system project and certain research and development
projects.  The  impact  of these  decisions  was  that  significant  amounts  of
Trimble's  fixed assets,  prepaid  expenses,  and purchased  technology had been
impaired and certain liabilities incurred. Trimble wrote down the related assets
to  their  net  realizable   values  and  made   provisions  for  the  estimated
liabilities.

     The  activity in fiscal 2000,  1999 and 1998  related to the  restructuring
charges and the amounts  remaining at December 29, 2000 on the balance sheet are
as follows (in thousands):

<TABLE>
<CAPTION>

                                   Total
                                 charged to     Amounts paid/   Amounts paid/   Amounts paid/          Remaining in
                                 expense in      written off     written off     written off        accrued liabilites
                                fiscal 1998    in fiscal 1998   in fiscal 1999  in fiscal 2000   as of December 29, 2000
                               --------------- --------------  ---------------  --------------  ------------------------
<S>                                  <C>            <C>              <C>             <C>                          <C>
Employee termination benefits         $ 2,864       $ (1,200)          $ (371)       $ (1,293)                    $ -
Facility space reductions               1,061              -         $ (1,053)           $ (8)                      -
ERP system abandonment                  6,360         (4,895)        $ (1,465)            $ -                     $ -
                               --------------- --------------  ---------------  --------------  ------------------------
     Subtotal                        $ 10,285       $ (6,095)        $ (2,889)       $ (1,301)                    $ -
                               =============== ==============  ===============  ==============  ========================
</TABLE>


     Also  see  Note  2  to  the  Consolidated   Financial  Statements  for  the
restructuring  reserve  recorded  as  part  of the  acquisition  of the  Spectra
Precision Group.

Note 10 - Bank line of credit:

     In July 2000, ABN AMRO Bank, N.V. led a syndicate of banks which underwrote
$200 million of new senior,  secured credit facilities for the Company (the "New
Credit  Facilities") to support the  acquisition of the Spectra  Precision Group
and the Company's ongoing working capital  requirements and to refinance certain
existing debt.  The New Credit  Facilities are comprised of a $50 million 3-year
U.S. dollar only revolver; a $50 million 3-year multi-currency  revolver;  and a
$100 million 5-year term loan.  Pricing for any borrowings  under the New Credit
Facilities is fixed for the first 6 months at LIBOR plus 275 basis points and is
thereafter  tied to a formula,  based on the Company's  leverage ratio (which is
defined as all outstanding  debt (excluding the seller  subordinated  note) over
EBITDA). Trimble immediately used approximately $170 million available under the
New Credit  Facilities to fund the acquisition of the Spectra  Precision  Group.
$30  million was used to pay off the  principal  portion of  Company's  existing
subordinated  notes to John Hancock (as described in Note 2 to the  Consolidated
Financial Statements under "Acquisition Financing") and $140 million was paid in
cash to the  seller.  The New Credit  Facilities  are  secured  by all  material
tangible  and  intangible  assets  of  the  Company,   subject  to  foreign  tax
considerations.  If  Trimble is able to achieve  and  maintain a leverage  ratio
(Debt/EBITDA)  of 2.0x or less for four consecutive  quarters,  the security for
the New Credit  Facilities  will be  released.  Financial  covenants  of the New
Credit Facilities  include leverage,  fixed charge, and minimum net worth tests.
The Company was in compliance with these covenants at December 29, 2000. The two
$50 million  revolvers are paid as the loans mature and the loan commitment fees
are paid on a quarterly basis. The 5-year term loan is payable  commencing March
31, 2001 in quarterly  installments  (excluding interest) of $4 million over the
first year, $5 million over the second year, $6 million over the next year and a
half and $7 million for the  remaining  quarters  until the debt is paid off. In
addition,  Trimble is restricted from paying  dividends and is limited as to the
amount of its common stock it can  repurchase  under the terms of the New Credit
Facilities. 

                                       52

<PAGE>

The Company is allowed to  repurchase  shares of its common stock only up to 25%
of net income in the previous fiscal year.

Note 11 - Long-term debt:

 Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                     December 29,          December 31,
                                                        2000                  1999
--------------------------------------------------------------------------------------------------
 (In thousands)

<S>                                                       <C>                   <C>     
 New Credit Facilities                                    $ 162,000                  $ -
 Subordinated note                                           80,000                    -
 Subordinated notes repaid in 2000 (See Note 2)                   -               29,819
 Promissory note and Long-term commitment                     9,037                    -
 Installment loan obligations                                     -                1,388
 Other                                                           25                  747
                                                  ------------------     ----------------
                                                            251,062               31,954
 Less current portion                                       113,721                1,388
                                                  ------------------     ----------------
 Noncurrent portion                                       $ 137,341             $ 30,566
                                                  ==================     ================
</TABLE>


     Trimble's  long-term  debt primarily  consists of $162 million  outstanding
under  the New  Credit  Facilities  (See Note 10 to the  Consolidated  Financial
Statements),  and an $80 million  subordinated  promissory note (see below). The
Company's  current  portion of long-term debt consists of amounts payable within
one year on the term loan  portion of the New Credit  Facilities,  the  revolver
portion of the New Credit Facilities and $40 million of the subordinated note.

     The $80  million  subordinated  note to the  seller  carries a 10%  coupon,
payable  in cash  or  additional  seller  paper  at the  Company's  option.  The
subordinated  seller  note has a stated two year  maturity  ($40  million due in
fiscal  2001 and $40  million  due in fiscal  2002),  but  carries an  automatic
maturity deferral provision which effectively  extends the maturity date to that
date on which Trimble is allowed to repay the note without  triggering a default
under the New Credit  Facilities.  The New Credit  Facilities  allow  Trimble to
repay  the  seller  note at any time (in part or in  whole),  provided  that (a)
Trimble's leverage ratio (Debt (excluding the seller note)/EBITDA) prior to such
repayment  is less  than  1.0x and (b) after  giving  effect  to such  repayment
Trimble would have (i) a leverage ratio (Debt  (excluding any remaining  portion
of the  seller  note)/EBITDA)  of less  than  2.0x  and  (ii)  cash  and  unused
availability  under the  revolvers of the New Credit  Facilities of at least $35
million.  Although  the  subordinated  seller  note will carry  certain  limited
covenants and  defaults,  the seller will be barred in the event of default from
pursuing  such  rights and  remedies  for the stated  maturity of the New Credit
Facilities  (i.e.,  a  five-year  standstill).  The New Credit  Facilities  also
prohibit cash payments of interest or principal on the subordinated  seller note
during a period of default.

     The  promissory  note and  long-term  commitment  includes  a $7.1  million
obligation  to former  owners of ZSP Geodetic  Systems GmbH, a subsidiary of the
Company which was purchased by the Spectra Precision Group in 1999 (prior to the
Company's  purchase of the Spectra Precision  Group).  Of this obligation,  $3.7
million is payable  equally on a quarterly  basis  through the end of  September
2001,  and bears  interest at 6.0%. The remaining $3.4 million of the obligation
has a stated maturity of September 2002.

     Outstanding  promissory  note and long-term  commitment also include a $1.9
million  promissory  note from the  purchase  of a building  for our  Corvallis,
Oregon  site.  The note is payable in monthly  installments  through  April 2015
bearing a variable interest rate (8.94% at December 29, 2000).

     The $1.4 million installment loan at December 31, 1999 related to loans for
capitalized software and was repaid in 2000.

                                       53

<PAGE>

Note 12 - Lease obligations and commitments:

     Trimble's  principal  facilities  in the United  States  are  leased  under
noncancelable  operating  leases that expire at various  dates from 2000 through
2011.  Trimble has options to renew  certain of these  leases for an  additional
five years.  The Company also leases  facilities  under operating  leases in the
United Kingdom, Sweden and Germany that expire in 2005.

 Future minimum payments  required under  noncancelable  operating leases are as
 follows:
                                                          Operating
                                                       Lease Payments
----------------------------------------------------------------------------
 (In thousands)

 2001                                                              $ 13,793
 2002                                                                12,327
 2003                                                                10,700
 2004                                                                 5,777
 2005                                                                 5,241
 Thereafter                                                           2,627
                                                 ---------------------------
 Total                                                             $ 50,466
                                                 ===========================

 Rent expense under operating  leases was $10.6 million in 2000, $8.1 million in
 fiscal 1999, and $6.3 million in 1998.


Note 13 - Fair value of financial instruments:

     Statement of Financial Accounting Standard No. 107, "Disclosures about Fair
Value of Financial Instruments" requires disclosure of the following information
about the fair value of certain financial  instruments for which it is currently
practicable to estimate such value. None of the Company's financial  instruments
are held or issued for trading purposes. The carrying amounts and fair values of
Trimble's financial instruments are as follows:


<TABLE>
<CAPTION>
                                                             Carrying                         Fair
                                                              Amount                          Value
                                                         -----------------              -----------------
                                                                        December 29, 2000
-------------------------------------------------------------------------------------------------------------
 (In thousands)
<S>                                                              <C>                            <C>     
 Assets:
 Cash and cash equivalents (See Note 1)                          $ 40,876                       $ 40,876
 Forward foreign exchange contracts (See Note 1)                       50                             50
 Accounts Receivable                                               90,138                         90,138

 Liabilities:
 Subordinated  notes (See Note 11)                               $ 80,000                       $ 89,044
  Bank Borrowing (See Note 11)                                    162,000                        162,000
  Promissory note and Long-term commitment                          9,037                          7,876
 Accounts Payable                                                  26,448                         26,448
</TABLE>


     The fair value of the subordinated notes, bank borrowings,  promissory note
and the  long-term  commitment  have been  estimated  using an  estimate  of the
interest  rate  Trimble  would have had to pay on the  issuance  of notes with a
similar  maturity,  and discounting the cash flows at that rate. The fair values
do not give an indication of the amount that Trimble would currently have to pay
to extinguish any of this debt.

     The fair value of forward foreign exchange contracts is estimated, based on
quoted market prices of comparable  contracts,  and these contracts are restated
to the fair value at the end of every month.

                                       54

<PAGE>

Note 14 - Income taxes:

     Trimble's income tax provision consists of the following (in thousands):

                                     Fiscal Years ended
                    ---------------------------------------------------------
                    ---------------------------------------------------------
                        December 29,        December 31,         January 1,
                            2000                1999                1999
Federal:
         Current            $ 1,408            $ 1,089                $ 233
         Deferred                 -                  -                    -
                    ---------------------------------------------------------
                              1,408              1,089                  233
                    ---------------------------------------------------------

State:
         Current                144                196                   20
         Deferred                 -                  -                    -
                    ---------------------------------------------------------
                                144                196                   20
                    ---------------------------------------------------------

Foreign:
         Current                931                770                1,195
         Deferred              (908)                18                  (48)
                    ---------------------------------------------------------
                                 23                788                1,147
                    ---------------------------------------------------------
Income tax provision        $ 1,575            $ 2,073              $ 1,400
                    =========================================================

     The domestic income (loss) from continuing  operations  before income taxes
(including   royalty   income   subject  to  foreign   withholding   taxes)  was
approximately $14,380,000,  $19,700,000, and ($26,220,000) in fiscal years 2000,
1999 and 1998.

     The income tax provision  differs from the amount  computed by applying the
statutory  federal  income tax rate to income before taxes.  The sources and tax
effects of the differences are as follows (in thousands):


<TABLE>
<CAPTION>
                                                                       Fiscal Years ended
                                                 ----------------------------------------------------------
                                                       December 29,        December 31,         January 1,
                                                             2000                1999                1999

<S>                                                        <C>                <C>                  <C>    
Expected tax from continuing operations at 35%
          in all years                                     $ 5,516            $ 7,258              $(8,827)

Operating loss not utilized (utilized)                      (5,115)            (6,176)               9,178

Foreign withholding taxes                                      141                299                  467

Foreign tax rate differential                                  307                109                  329

Other                                                          726                583                  253
                                                 ----------------------------------------------------------
Income tax provision                                       $ 1,575            $ 2,073              $ 1,400
                                                 ==========================================================
         Effective tax rate                                    10%                10%                  (6%)
                                                 ==========================================================
</TABLE>


                                       55

<PAGE>

     The components of deferred taxes consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                             December 29,        December 31,
                                                                  2000                1999

<S>                                                               <C>                <C>     
Deferred tax liabilities:
         Purchased intangibles                                    $ 8,230                $ -
         Other individually immaterial items                          288                246
                                                      ---------------------------------------
                  Total deferred tax liabilities                    8,518                246
                                                      ---------------------------------------

Deferred tax assets:
         Inventory valuation differences                            8,836              9,437
         Expenses not currently deductible                          5,656              7,461
         Federal credit carryforwards                               8,686              6,108
         Deferred revenue                                           2,674              3,243
         State credit carryforwards                                 4,725              3,786
         Warranty                                                   2,455              2,352
         Depreciation                                               1,724              1,770
         Federal net operating loss (NOL) carryforward              1,028                  -
         Other individually immaterial items                        2,751              1,763
                                                      ---------------------------------------
                  Total deferred tax assets                        38,535             35,920

Valuation allowance                                               (37,861)           (35,287)
                                                      ---------------------------------------
Total deferred tax assets                                             674                633
                                                      ---------------------------------------
Total net deferred tax assets (liabilities)                       $(7,844)             $ 387
                                                      =======================================
</TABLE>



     The NOL and credit carryforwards listed above expire in 2001 through 2020.

     The valuation  allowance increased by $2.6 million in 2000 and decreased by
$6.0 million in 1999.  Approximately $11.3 million of the valuation allowance at
December 29, 2000 relates to the tax benefits of stock option deductions,  which
will be credited to equity when realized.

Note 15 - Shareholder's Equity:

     1993 Stock Option Plan. In 1992,  Trimble's Board of Directors  adopted the
1993 Stock  Option Plan  ("1993  Plan").  The 1993 Plan,  as amended to date and
approved  by   shareholders,   provides  for  the  granting  of  incentive   and
nonstatutory  stock  options  for up to  5,925,000  shares  of  Common  Stock to
employees,  consultants  and  directors  of Trimble.  At  Trimble's  2001 annual
meeting of shareholders to be held on May 10, 2001, the  shareholders  are being
asked to approve an increase of 450,000  shares  under the 1993 Plan.  Incentive
stock  options may be granted at exercise  prices that are not less than 100% of
the fair  market  value of  Common  Stock on the date of grant.  Employee  stock
options granted under the 1993 Plan have 120-month  terms, and vest at a rate of
20% at the first anniversary of grant, and monthly  thereafter at an annual rate
of 20%,  with full vesting  occurring  at the fifth  anniversary  of grant.  The
exercise price of nonstatutory  stock options issued under the 1993 Plan must be
at least 85% of the fair market value of Common  Stock on the date of grant.  As
of December 29, 2000,  options to purchase 3,961,581 shares were outstanding and
610,454 shares were available for future grant under the 1993 Plan.

     1990  Director  Stock  Option Plan.  In December  1990,  Trimble  adopted a
Director  Stock Option Plan under which an aggregate of 380,000 shares of Common
Stock have been reserved for issuance to  non-employee  directors as approved by
the  shareholders  to date.  At December 29, 2000,  options to purchase  173,333
shares were outstanding and 85,416 shares were available for future grants under
the Director Stock Option Plan.

                                       56

<PAGE>

     1992  Management  Discount Stock Option Plan. In 1992,  Trimble's  Board of
Directors  approved the 1992  Management  Discount Stock Option Plan  ("Discount
Plan").  Under the  Discount  Plan,  300,000  nonstatutory  stock  options  were
reserved  for grant to  management  employees  at  exercise  prices  that may be
significantly discounted from the fair market value of Common Stock on the dates
of grant.  Options are generally  exercisable six months from the date of grant.
As of December 29, 2000,  there were 4,974 shares  available for future  grants.
For accounting  purposes,  compensation  cost on these grants is measured by the
excess over the  discounted  exercise  prices of the fair market value of Common
Stock on the dates of option grant.  There were no discounted options granted in
the plan in fiscal 2000 1999,  and 1998.  As of December  29,  2000,  options to
purchase  125,000 shares were  outstanding  under the 1992  Management  Discount
Stock Option Plan.

     1988 Employee Stock Purchase Plan. In 1988, Trimble established an employee
stock purchase plan under which an aggregate of 3,150,000 shares of Common Stock
have  been  reserved  for  sale  to  eligible   employees  as  approved  by  the
shareholders  to date. The plan permits  full-time  employees to purchase Common
Stock through payroll deductions at 85% of the lower of the fair market value of
the  Common  Stock at the  beginning  or at the end of each  six-month  offering
period.   In  fiscal  2000  and  1999,   131,657  shares  and  317,210   shares,
respectively,  were issued under the plan for aggregate  proceeds to the Company
of $1.2 million and $2.5 million, respectively. At December 29, 2000, the number
of shares reserved for future purchases by eligible employees was 831,216.

     As stated in Note 1 to the Consolidated  Financial Statements,  Trimble has
elected to follow  APB 25 and  related  interpretations  in  accounting  for its
employee  stock options and stock purchase  plans.  The  alternative  fair value
accounting  provided for under SFAS 123 requires  use of option  pricing  models
that were not developed for use in valuing employee stock options. Under APB 25,
because the exercise price of Trimble's employee stock options equals the market
price of the  underlying  stock on date of grant,  no  compensation  expense  is
recognized.

     Pro forma  information  regarding  net  income  and  earnings  per share is
required by SFAS 123 and has been determined as if Trimble had accounted for its
employee  stock options and  purchases  under the employee  stock  purchase plan
using the fair value  method of SFAS 123.  The fair value for these  options was
estimated at the date of grant using a Black-Scholes  option-pricing  model with
the following weighted-average assumptions for fiscal 2000, 1999, and 1998:


<TABLE>
<CAPTION>
                                               December 29,                December 31,                January 1,
                                                   2000                        1999                       1999
                                           ----------------------     -----------------------     ----------------------
<S>                                                       <C>                         <C>                        <C>   
Expected dividend yield                                        -                           -                          -
Expected stock price volatility                           66.41%                      59.58%                     55.65%
Risk-free interest rate                                    6.21%                       6.34%                      5.76%
Expected life of options after vesting                      1.22                        1.21                       1.20
</TABLE>


     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options that have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions,  including  the  expected  stock price
volatility.  Because  Trimble's  employee  stock  options  have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized  to expense  over the  options'  vesting  period,  and the
estimated  fair value of purchases  under the employee  stock  purchase  plan is
expensed  in the year of  purchase.  The  effects  on pro  forma  disclosure  of
applying  SFAS 123 are not  likely to be  representative  of the  effects on pro
forma disclosure of future years.  Trimble's pro forma information (in thousands
except for per share data) is as follows:

                                       57

<PAGE>


<TABLE>
<CAPTION>
                                                     December 29,                December 31,                January 1,
                                                         2000                        1999                       1999
                                                 ----------------------     -----------------------     ----------------------

<S>                                                           <C>                         <C>                       <C>       
Net income (loss) - as reported                               $ 14,185                    $ 21,593                  $ (53,394)

Net income (loss) - pro forma                                  $ 5,898                    $ 16,377                  $ (58,661)

Basic income (loss) per share - as reported                     $ 0.60                      $ 0.96                    $ (2.38)

Basic income (loss) per share - pro forma                       $ 0.25                      $ 0.73                    $ (2.61)

Diluted income (loss) per share - as reported                   $ 0.55                      $ 0.95                    $ (2.38)

Diluted income (loss) per share - pro forma                     $ 0.23                      $ 0.72                    $ (2.61)

</TABLE>


     Exercise  prices for options  outstanding  as of December 29, 2000,  ranged
from $8.00 to $51.69.  The weighted average remaining  contractual life of those
options is 7.88  years.  In view of the wide range of exercise  prices,  Trimble
considers it  appropriate  to provide the following  additional  information  in
respect of options outstanding:

<TABLE>
<CAPTION>
                                             Total                                            Currently exercisable
                            Number      Weighted-average       Weighted-average            Number        Weighted-average
      Range             (in thousands)   exercise price    remaining contractul life   (in thousands)     exercise price
----------------------  -------------  ------------------  -------------------------   --------------   -------------------
<S>                        <C>                    <C>                          <C>         <C>                      <C>   
$8.0000 - $8.2500            451,532               $8.01                       8.07          163,159                 $8.02
$8.3125 - $9.9375            637,445               $9.21                       6.61          291,965                 $9.21
$10.0000 - $11.5625          306,145              $10.99                       6.82          146,566                $10.69
$11.9375 - $11.9375          474,591              $11.94                       8.59          121,336                $11.94
$12.0000 - $15.3750          593,321              $14.27                       6.12          400,464                $14.31
$16.8750 - $19.2500          427,143              $17.90                       6.92          244,364                $17.90
$19.3125 - $23.0000          433,689              $20.24                       9.11           54,337                $21.49
$23.2500 - $34.1250          121,500              $31.95                       9.29            6,388                $31.49
$41.1250 - $41.1250          772,250              $41.13                       9.65                -                 $0.00
$51.6875 - $51.6875           42,500              $51.69                       9.55                -                 $0.00
----------------------  -------------  ------------------  -------------------------   --------------   -------------------
$8.0000 - $51.6875         4,260,116              $19.07                       7.88        1,428,579                $12.94
</TABLE>


     Activity  during fiscal 2000, 1999 and 1998 under the combined plans was as
follows:

<TABLE>
<CAPTION>

IN THOUSANDS, EXCEPT FOR PER SHARE DATA
                                            December 29,                  December 31,                 January 1,
                                               2000                          1999                        1999
                                      ----------------------------  --------------------------  ----------------------------
                                                  Weighted average            Weighted average             Weighted average
                                        Options    exercise price    Options   exercise price     Options   exercise price
                                      ----------  ----------------  --------  ----------------  ---------  -----------------
                                                                               

<S>                                       <C>              <C>        <C>             <C>         <C>               <C>   
Outstanding at beginning of year          4,009            $12.36     3,026           $13.64      2,696             $15.10
     Granted                              1,379             34.39     1,813            10.22      1,117              11.40
     Exercised                             (706)            13.08      (135)           11.64       (132)             11.41
     Canceled                              (422)            15.51      (695)           14.03       (655)             16.30
                                      ----------                    --------                    --------

Outstanding at end of year                4,260            $19.07     4,009           $12.36      3,026             $13.64

Exercisable at end of year                1,429            $12.94     1,334           $13.68      1,110             $13.91

Weighted-average fair value of options
    granted during year                                    $19.04                      $5.51                         $5.21
</TABLE>



     Non-statutory  options.  On May 25, 2000, Trimble entered into an agreement
to grant a non-statutory  option to purchase up to 40,000 shares of common stock
at an exercise  price of $13.44 per share,  which expire no later than  December
15,  2001.  On May 3,  1999,  Trimble  entered  into  an  agreement  to  grant a
non-statutory  option  to  purchase  up to 30,000  shares of common  stock at an
exercise  price of $9.75  per  share,  which  expire on March  29,  2004.  As of
December 29, 2000, none of these non-statutory options had been exercised.

     Common  shares  reserved  for future  issuances.  As of December  29, 2000,
Trimble had  reserved  5,791,974  common  shares for issuance  upon  exercise of
options outstanding and options available for grant under the 1993 Stock Option,
1990 Director Stock Option, and 1992 Management Discount Stock Option plans, and
available for issuance under the 1988 Employee Stock Purchase plan.

                                       58

<PAGE>

Note 16 - Benefit plans:

401(k) Plans:

     Under Trimble's  401(k) Plan,  U.S.  employee  participants  may direct the
investment of contributions to their accounts among certain mutual funds and the
Trimble  Navigation Limited Common Stock Fund. The Trimble Fund purchased 15,700
shares of Common  Stock for an aggregate  of $434,000 in 2000.  Trimble,  at its
discretion, matches individual employee 401(k) Plan contributions up to $100 per
month.  Trimble's  matching  contributions  to the 401(k) Plan were  $798,000 in
fiscal 2000,  $1.0 million in fiscal 1999, and $1.2 million in 1998.  Certain of
the Company's  subsidiaries  acquired as part of the  acquisition of the Spectra
Precision  Group  participate  in a 401(k) Plan where the Company  matches fifty
cents of every  dollar  the  employee  contributes  to the plan up to 5 % of the
employees annual contribution. For the period July 14, 2000 to December 29, 2000
the Company contributed  $236,000 to the plan. The Company's Tripod Data Systems
subsidiary matches one dollar for every three dollars the employee puts into the
plan up to 8% of their  annual  salary.  From  November 14, 2000 to December 29,
2000 the Company contributed $11,000 to this plan.

Profit-Sharing Plan:

     In 1995,  Trimble introduced an employee  profit-sharing  plan in which all
employees,  excluding executives and certain levels of management,  participate.
The plan  distributes to employees  approximately  5% of quarterly income before
taxes.  Payments  under the plan during  fiscal 2000,  1999,  and 1998 were $2.1
million, $1.2 million, and $138,000, respectively.

Defined Contribution Pension Plans:

     Certain of the Company's  subsidiaries  acquired in the  acquisition of the
Spectra  Precision Group  participate in European state sponsored pension plans.
Contributions are based on specified percentages of employee salaries. For these
plans,  the Company  contributed  and charged to expense  $275,000 from July 14,
2000 through December 29, 2000.

Defined Benefit Pension Plan

     The Company's Swedish subsidiary acquired in the acquisition of the Spectra
Precision  Group has an  unfunded  defined  benefit  pension  plan that  covered
substantially all of its full-time employees through 1993. Benefits are based on
a percentage of eligible earnings. The employee must have had a projected period
of  pensionable  service  of at least 30 years  as of 1993.  If the  period  was
shorter, the pension benefits were reduced accordingly.  Active employees do not
accrue any future benefits, therefore there is no service cost and the liability
will only increase for interest cost.

     Net periodic benefit costs for the period July 14, 2000 though December 29,
2000 was not material.

                                       59

<PAGE>

     The Company's defined benefit plan activity was as follows:

                                  December 29,
                                      2000
--------------------------------------------------------------------------------
(In Thousands)

Change in Benefit Obligation:
  Benefit obligation at acquisition date                                 $ 3,927
  Interest Cost                                                              233
  Actuarial (gain) loss                                                       15

                                                      --------------------------
 Benefit obligation at end of year                                         4,175

Unrecognized Prior Service Cost                                                -
Unrecognized Net Actuarial Gain                                                -

                                                      --------------------------
Accrued Pension Costs                                                    $ 4,175
                                                      ==========================

     Actuarial  assumptions used to determine the net periodic pension costs for
the year ended December 29, 2000 were as follows:

Discount Rate                                                                 4%
Rate of Compensation Increase                                                 3%


Note 17 - Earning Per Share:

     The following data show the amounts used in computing  earnings  (loss) per
share and the  effect  on the  weighted-average  number  of  shares of  dilutive
potential Common Stock.



<TABLE>
<CAPTION>
                                                                    December 29,        December 31,           January 1,
                                                                      2000                  1999                  1999
---------------------------------------------------------------------------------------------------------------------------------
(In thousands except per share amounts)

<S>                                                                     <C>                    <C>                   <C>       
Numerator:
     Income available to common shareholders:
        Used in basic and diluted income (loss) per share from 
                continuing operations                                   $ 14,185               $ 18,662              $ (27,355)
        Used in basic and diluted income (loss) per share from 
                discontinued operations                                       -                  2,931                (26,039)
                                                                -----------------    -------------------   --------------------
        Used in basic and diluted income (loss) per share               $ 14,185               $ 21,593              $ (53,394)
                                                                =================    ===================   ====================

Denominator:
      Weighted-average number of common
         shares used in basic income (loss) per share                     23,601                 22,424                 22,470

      Effect of dilutive securities:
           Common stock options                                            2,098                    382                      -
           Common stock warrants                                             277                     46                      -
                                                                -----------------    -------------------   --------------------

      Weighted-average number of common
          shares and dilutive potential common shares
          used in diluted income (loss) per share                         25,976                 22,852                 22,470
                                                                =================    ===================   ====================


 Basic income (loss) per share from continuing operations                 $ 0.60                 $ 0.83                $ (1.22)
 Basic loss per share from discontinued operations                             -                   0.13                  (1.16)
                                                                -----------------    -------------------   --------------------
 Basic income (loss) per share                                            $ 0.60                 $ 0.96                $ (2.38)
                                                                =================    ===================   ====================

 Diluted income (loss) per share from continuing operations               $ 0.55                 $ 0.82                $ (1.22)
 Diluted loss per share from discontinued operations                           -                   0.13                  (1.16)
                                                                -----------------    -------------------   --------------------
 Diluted income (loss) per share                                          $ 0.55                 $ 0.95                $ (2.38)
                                                                =================    ===================   ====================
</TABLE>


                                       60

<PAGE>

     If  Trimble  had  reported  net  income  in  1998,  additional  387  common
equivalent  shares related to  outstanding  options and warrants would have been
included in the calculation of diluted loss per share.

Note 18 - Comprehensive income (loss):

     The components of other  comprehensive  income  (loss),  net of related tax
include:


<TABLE>
<CAPTION>
                                                          December 29,       December 31,      Janaury 1,
Fiscal Years ended                                          2000               1999               1999
------------------------------------------------------------------------------------------------------------
(In thousands)

<S>                                                           <C>                  <C>               <C>    
 Cumulative foreign currency translation adjustments          $ (8,045)            $ (107)           $ (255)
 Net unrealized gain (loss) on short-term investments              123               (142)               11
                                                       ----------------   ----------------   ---------------
     Other comprehensive income (loss)                        $ (7,922)            $ (249)           $ (244)
                                                       ================   ================   ===============
</TABLE>



     Accumulated other comprehensive income (loss) on the condensed consolidated
balance sheets  consists of unrealized  gains on available for sale  investments
and foreign  currency  translation  adjustments.  The  components of accumulated
other comprehensive income (loss), net of related tax include:


<TABLE>
<CAPTION>
                                                             December 29,       December 31,
Fiscal Years ended                                             2000               1999
------------------------------------------------------------------------------------------------
(In thousands)

<S>                                                              <C>                <C>      
 Cumulative foreign currency translation adjustments             $ (8,963)            $ (918)
 Net unrealized gain (loss) on short-term investments                   -               (123)
                                                          ----------------   ----------------
     Accumulated other comprehensive income (loss)               $ (8,963)          $ (1,041)
                                                          ================   ================
</TABLE>


Note 19 - Related-Party transactions:

     Related-Party Lease

     The Company  currently  leases office space in Ohio from an  association of
three  individuals,  two of whom  are  employees  of one of the  Company's  U.S.
operating units, under a noncancelable  operating lease arrangement  expiring in
2011 entered into in connection  with the  acquisition of the Spectra  Precision
Group.  The annual rent is $345,000,  and is subject to adjustment  based on the
terms of the lease. The condensed consolidated  statements of operations include
expenses from this  operating  lease of $172,702 for the year ended December 29,
2000.

Note 20 - Statement of cash flow data:


<TABLE>
<CAPTION>
                                                        December 29,            December 31,          January 1,
Fiscal Years ended                                          2000                    1999                 1999
-------------------------------------------------------------------------------------------------------------------------
 (In thousands)

 Supplemental disclosure of cash flow information:

<S>                                                             <C>                     <C>                <C>    
 Interest paid                                                  $ 9,037                 $ 3,391            $ 3,377
                                                     -------------------     -------------------     --------------
 Income taxes paid                                              $ 3,835                   $ 866            $ 1,585
                                                     -------------------     -------------------     --------------
</TABLE>


     The  purchase  of Tripod Data  Systems in 2000,  a non-cash  financing  and
investing activity,  was made with shares of stock with a value of less than $15
million.

     The purchase of the Spectra Precision Group in 2000 included $80 million of
a seller-financed note, which is a non-cash financing and investing activity.

                                       61

<PAGE>

Note 21 - Litigation:

     In January  2001 Philip M. Clegg filed suit in the United  States  District
Court  for the  District  of Utah,  Central  Division,  against  Spectra-Physics
Laserplane,  Inc.,  Spectra  Precision AB and Trimble  Navigation  Limited.  The
complaint alleges claims of infringement of U.S. Patent No. 4,807,131, breach of
contract and unjust  enrichment.  The suit seeks damages and an  accounting  for
moneys alleged to be owed under a license agreement,  plus interest and attorney
fees. The suit is in its very early stages.  Management  believes the case to be
without  merit and intends to defend the lawsuit  vigorously.  In the opinion of
management,  resolution  of this  litigation  is not expected to have a material
adverse effect on the financial position of the Company.  However,  depending on
the amount and timing, an unfavorable resolution of this matter could materially
affect the Company's future operations or cash flows in a particular period.

     The Company believes that the ultimate liability of the Company as a result
of all  disputes,  if  any,  would  not be  material  to its  overall  financial
position, results of operations, liquidity.

Note 22 - Selected quarterly financial data (unaudited):


<TABLE>
<CAPTION>
                                                                         First          Second         Third          Fourth
                                                                        Quarter        Quarter        Quarter         Quarter
------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)

2000
<S>                                                                     <C>            <C>            <C>             <C>      
          Total revenue                                                 $ 65,140       $ 71,264       $ 109,227       $ 124,167
          Gross margin                                                    37,045         41,885          55,932          61,699
          Operating income                                                 9,222         12,023           1,506           3,468
          Net income from continuing operations                            8,712         12,357          (4,268)         (2,616)
          Net income from discontinued operations                              -              -               -               -
          Net income                                                       8,712         12,357          (4,268)         (2,616)

          Basic net income per share from continuing operations             0.38           0.53           (0.18)          (0.11)
          Basic net income per share from discontinued operations              -              -               -               -
                                                                    -------------  -------------  --------------  --------------
          Basic net income                                                $ 0.38         $ 0.53         $ (0.18)        $ (0.11)
                                                                    =============  =============  ==============  ==============


          Diluted net income per share from continuing operations           0.35           0.48           (0.18)          (0.11)
          Diluted net income per share from discontinued operations            -              -               -               -
                                                                    -------------  -------------  --------------  --------------
          Diluted net income                                              $ 0.35         $ 0.48         $ (0.18)        $ (0.11)
                                                                    =============  =============  ==============  ==============

1999
          Total revenue                                                 $ 68,770       $ 70,839        $ 69,636        $ 62,119
          Gross margin                                                    35,567         37,611          36,979          34,090
          Operating income                                                 3,733          5,565           5,812           5,351
          Net income from continuing operations                            3,014          4,656           5,124           5,868
          Net income from discontinued operations                              -              -           2,931               -
          Net income                                                       3,014          4,656           8,055           5,868

          Basic net income per share from continuing operations             0.14           0.21            0.23            0.26
          Basic net income per share from discontinued operations              -              -            0.13               -
                                                                    -------------  -------------  --------------  --------------
          Basic net income                                                $ 0.14         $ 0.21          $ 0.36          $ 0.26
                                                                    =============  =============  ==============  ==============


          Diluted net income per share from continuing operations           0.14           0.20            0.22            0.25
          Diluted net income per share from discontinued operations            -              -            0.13               -
                                                                    -------------  -------------  --------------  --------------
          Diluted net income                                              $ 0.14         $ 0.20          $ 0.35          $ 0.25
                                                                    =============  =============  ==============  ==============
</TABLE>


     Significant quarterly items include the following: (i) in the third quarter
of 2000, net income includes an $8.8 million charge, or $0.38 per diluted share,
for  amortization  of goodwill and other  purchased  intangibles,  as well as an
inventory purchase  accounting  adjustment;  a $1.1 million charge, or $0.05 per
diluted share relating to a debt extinguishment; a $0.7 million charge, or $0.03
per  diluted  share for  relocation  costs  related  to  opening a new office 

                                       62

<PAGE>

in Boulder,  Colorado;  and $1.0 million in income,  or $0.04 per diluted  share
relating  to a gain on the sale of a  minority  investment;  (ii) in the  fourth
quarter of 2000, net income includes a $9.2 million charge, or $0.36 per diluted
share, for amortization of goodwill and other purchased intangibles,  as well as
an inventory purchase accounting adjustment;  $0.3 million, or $0.01 per diluted
share,  of a gain  on the  sale of a  minority  investment;  and a $0.2  million
charge, or $0.01 per diluted share, of relocation costs related to opening a new
office in boulder, Colorado.

Note 23 - Subsequent Event:

     On March 6, 2001,  the Company  sold its Air  Transport  Systems  business,
which is primarily located in Austin, Texas, to Honeywell for approximately $4.5
million  in cash,  resulting  in a loss to be  recorded  of  approximately  $2.5
million.  As part of this sale the  Company  also  intends  to  discontinue  its
manufacturing  operations in Austin,  Texas. The Austin facility,  which employs
fewer than 65 people, is scheduled to close in August of 2001.

     Under the  agreement,  Honeywell has  purchased our Air Transport  Systems'
product  lines which  include the HT 1000,  HT 9000,  HT 9100 and  Trimble's TNL
8100. As part of a strategic  alliance that began in 1995, Trimble and Honeywell
jointly developed,  manufactured,  marketed, and sold the HT product line. These
products are installed in many commercial aircraft and major airlines around the
world for Global Positioning System (GPS)-based navigation.

                                       63

<PAGE>


                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Shareholders, Trimble Navigation Limited

     We have audited the  accompanying  consolidated  balance  sheets of Trimble
Navigation  Limited as of  December  29, 2000 and  December  31,  1999,  and the
related consolidated  statements of operations,  shareholders'  equity, and cash
flows for each of the three years in the period ended  December  29,  2000.  Our
audits also included the  financial  statement  schedule  listed in the index at

I
tem 14(a)(2). These financial statements and schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule, based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial  statements  and schedule  referred to above
present fairly, in all material respects, the consolidated financial position of
Trimble  Navigation  Limited at December 29, 2000 and December 31, 1999, and the
consolidated  results of its operations and its cash flows for each of the three
years in the period ended  December  29, 2000,  in  conformity  with  accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.





                                                       /s/ ERNST & YOUNG LLP

Palo Alto, California
January 26, 2001


                                       64

<PAGE>



Item 9.  Changes in and Disagreements with Accountants on Accounting Financial 
         Disclosure

         Not applicable.


                                    PART III


Item 10. Directors and Executive Officers of the Registrant

     The  section  titled  "Nominees"  and the  section  titled  "Section  16(a)
Beneficial Ownership Reporting  Compliance" in the Company's Proxy Statement for
its 2001  annual  meeting of  shareholders  to be held on May 10,  2001  ("Proxy
Statement"),  with  respect to directors  of the Company and  compliance  of the
directors  and  executive  officers of the  Company  with  Section  16(a) of the
Exchange Act required by this item are incorporated herein by reference.

     The  information  with  respect to the  executive  officers  of the Company
required by this item is included in Part I hereof under the caption  "Executive
Officers of the Company."


Item 11. Executive Compensation

     The following  sections of the Proxy Statement are  incorporated  herein by
reference:  "Compensation of Executive  Officers,"  "Compensation of Directors,"
"Compensation Committee Interlocks and Insider Participation," and "Compensation
Committee Report" and "Company Performance."


Item 12. Security Ownership of Certain Beneficial Owners and Management

     The section titled  "Security  Ownership of Certain  Beneficial  Owners and
Management" of the Proxy Statement is incorporated herein by reference.


Item 13. Certain Relationships and Related Transactions

     The section titled "Certain  Relationships and Related Transactions" of the
Proxy Statement is incorporated herein by reference.

                                       65

<PAGE>


                                     PART IV


Item 14. Exhibits, Financial Statement Schedules, and Reports on form 8-K

(a)  1.   Financial Statements

     The following  consolidated  financial statements required by this item are
included in Part II Item 8 hereof under the caption  "Financial  Statements  and
Supplementary Data."

                                                                  Page In This
                                                                  Annual Report
                                                                  On Form 10-K

Consolidated Balance Sheets at December 29, 2000 and December 31, 1999        37

Consolidated Statements of Operations for each of the three fiscal years
in the period ended December 29, 2000                                         38

Consolidated Statement of Shareholders' Equity for the three fiscal years
in the period ended December 29, 2000                                         39

Consolidated Statements of Cash Flows for each of the three fiscal years
in the period ended December 29, 2000                                         40

Notes to Consolidated Financial Statements                                 41-63

     2.  Financial Statement Schedules

     The following financial statement schedule is filed as part of this report:

                                                                   Page In This
                                                                   Annual Report
                                                                   On Form 10-K

     Schedule II - Valuation and Qualifying Accounts                    S-1

     All other  schedules  have been  omitted as they are either not required or
not  applicable,  or the required  information  is included in the  consolidated
financial statements or the notes thereto.

     3.  Exhibits

Exhibit
Number

3.1      Restated Articles of Incorporation of the Company filed June 25, 1986. 
         (17)

3.2      Certificate of Amendment of Articles of Incorporation of the Company 
         filed October 6, 1988. (17)

3.3      Certificate of Amendment of Articles of Incorporation of the Company 
         filed July 18, 1990. (17)

3.4      Certificate of Determination of the Company filed February 19, 1999. 
         (17)

3.8      Amended and Restated Bylaws of the Company. (21)

4.1      Specimen copy of certificate for shares of Common Stock of the Company.
         (1)

4.2      Preferred Shares Rights Agreement dated as of February 18, 1999. (16)

                                       66

<PAGE>

10.4+    Form of Indemnification Agreement between the Company and its officers 
         and directors. (1)

10.5     Loan Agreement dated December 21, 1984, between the Company and certain
         lenders. (1)

10.6     Note Purchase Agreement dated July 7, 1986, between the Company and 
         certain purchasers. (1)

10.7     Form of Common Stock Purchase Agreement dated March 1989 between the 
         Company and certain investors. (1)

10.8*    Memorandum of Understanding dated March 11, 1988, and License Agreement
         dated September 5,1988, between the Company and AEG Aktiengesellschaft,
         with Amendments No. 1, No. 2, and No. 3 thereto, and Letter Agreement 
         dated December 22, 1989, between Trimble and Telefunken Systemtechnik 
         GmbH. (1)

10.9     Note Purchase Agreement dated December 6, 1988, between the Company and
         AEG Aktiengesellschaft. (1)

10.10    Master Equipment Lease Agreement dated April 26, 1990, between the 
         Company and MATSCO Financial  Corporation, and schedule of lease 
         extensions. (1)

10.11*   Agreement dated February 6, 1989, between the Company and Pioneer 
         Electronic Corporation. (1)

10.15    International OEM Agreement dated May 30, 1989, between the Company and
         Geotronics AB. (1)

10.16    Patent License Agreement dated January 18, 1990, between the Company 
         and the United States Navy. (1)

10.18    Asset Purchase Agreement dated April 19, 1990, between the Company;  
         TR Navigation  Corporation,  a subsidiary of the Company; and Tracor 
         Aerospace, Inc. (1)

10.19    Promissory  Note dated April 20,  1990,  for the  principal  amount of
         $400,000  issued by TR  Navigation  Corporation  to DAC International, 
         Inc. (1)

10.20    Guarantee dated April 20, 1990, between the Company and DAC 
         International, Inc. (1)

10.21    Indemnification  Agreement dated April 20, 1990, between the Company; 
         TR Navigation Corporation,  a subsidiary of the Company; DAC 
         International, Inc.; and Banner Industries, Inc. (1)

10.22    Distributor  Agreement  dated April 20,  1990,  between TR  Navigation
         Corporation,  a  subsidiary  of the  Company,  and DAC International, 
         Inc. (1)

10.23    Distributor Agreement dated December 6, 1989, between the Company and 
         DAC International, Inc. (1)

10.24    Lease  Agreement  dated April 26, 1990,  between the Company and NCNB 
         Texas National Bank,  Trustee for the Company's  offices located at 
         2105 Donley Drive, Austin, Texas. (1)

10.32+   1990 Director Stock Option Plan, as amended, and form of Outside 
         Director Non-statutory Stock Option Agreement. (8)

10.35    Sublease Agreement dated January 2, 1991, between the Company,  Aetna 
         Insurance  Company,  and Poqet Computer  Corporation for property 
         located at 650 North Mary Avenue, Sunnyvale, California. (2)

10.36    Lease Agreement dated February 20, 1991,  between the Company,  John 
         Arrillaga  Separate  Property Trust, and Richard T. Peery Separate 
         Property Trust for property located at 880 West Maude, Sunnyvale, 
         California. (2)

10.37    Share and Asset Purchase  Agreement dated February 22, 1991, among the
         Company and Datacom Group Limited and Datacom Software Research 
         Limited. (3)

10.38    License Agreement dated June 29, 1991, between the Company and Avion 
         Systems, Inc. (3)

                                       67

<PAGE>

10.40    Industrial Lease Agreement dated December 3, 1991,  between the Company
         and Aetna Life Insurance  Company for property located at 585 North 
         Mary Avenue, Sunnyvale, California. (5)

10.41    Industrial Lease Agreement dated December 3, 1991, between the Company
         and Aetna Life Insurance  Company for property located at 570 Maude 
         Court, Sunnyvale, California. (5)

10.42    Industrial Lease Agreement dated December 3, 1991, between the Company
         and Aetna Life Insurance  Company for property located at 580 Maude
         Court, Sunnyvale, California. (5)

10.43    Industrial Lease Agreement dated December 3, 1991, between the Company
         and Aetna Life Insurance  Company for property located at 490 Potrero
         Avenue, Sunnyvale, California. (5)

10.44    Master Lease Agreement dated September 18, 1991, between the Company 
         and United States Leasing Corporation. (5)

10.45    Equipment Financing Agreement dated May 15, 1991, between the Company 
         and Corestates Bank, N.A. (5)

10.46+   1992 Management Discount Stock Option and form of Nonstatutory Stock 
         Option Agreement (5).

10.48    Equipment Financing Agreement dated April 27, 1992, with AT&T Systems 
         Leasing Corporation. (7)

10.49**  Memorandum of Understanding dated December 24, 1992, between the 
         Company and Pioneer Electronics Corporation. (7)

10.51    Revolving Credit Agreement for $15,000,000 dated January 27, 1993, with
         Barclays Business Credit, Inc. (7)

10.52    $30,000,000 Note and Warrant Purchase Agreement dated June 13, 1994, 
         with John Hancock Life Insurance Company. (9)

10.53    Revolving Credit  Agreement for $20,000,000 and $10,000,000,  dated
         August 4, 1995, with the First National Bank of Boston and Mellon Bank
         N.A., respectively. (1)

10.54    Revolving Credit Agreement - First Amendment. (12)

10.55    Revolving Credit Agreement - Second Amendment. (12)

10.56    Revolving Credit Agreement - Third Amendment. (13)

10.58    Revolving  Credit  Agreement for $50,000,000  dated August 27, 1997, 
         with Fleet National Bank, Bank of Boston N.A., Sanwa Bankof California,
         and ABN Amro Bank N.V., respectively. (15)

10.59+   1993 Stock Option Plan, as amended May 11, 2000. (21)

10.60+   1988 Employee Stock Purchase Plan, as amended May 11, 2000. (21)

10.61    Revolving Credit Agreement - Loan - Third Amendment. (17)

10.62+   Employment Agreement between the Company and Bradford W. Parkinson 
         dated September 1, 1998. (17)

10.63+   Employment Agreement between the Company and Robert S. Cooper dated 
         September 1, 1998. (17)

10.64+   Consulting Agreement between the Company and Bradford W. Parkinson 
         dated September 1, 1998. (17)

10.65+   Standby Consulting Agreement between the Company and Bradford W. 
         Parkinson dated September 1, 1998. (17)

10.66+   Consulting Agreement between the Company and Robert S. Cooper dated 
         September 1, 1998. (17)

                                       68

<PAGE>

10.67+   Employment Agreement between the Company and Steven W. Berglund dated 
         March 17, 1999. (17)

10.68+   Nonqualified deferred Compensation Plan of the Company effective 
         February 10, 1994. (17)

10.69*** Asset  Purchase  Agreement  dated  August 10, 1999 by and among Trimble
         Navigation  Limited  and  Solectron  Corporation  and Solectron Federal
         Systems, Inc. (19)

10.70*** Supply  Agreement  dated August 10, 1999 by and among  Trimble  
         Navigation  Limited and  Solectron  Corporation  and  Solectron Federal
         Systems, Inc. (19)

10.71    Revolving Credit Agreement - Loan - Fourth Amendment. (20)

10.72    Stock and Asset  Purchase  Agreement,  dated as of May 11,  2000, 
         between  Trimble  Acquisition  Corp.,  and Spectra  Physics Holdings
         USA, INC., Spectra Precision AB, and Spectra Precision Europe Holdings,
         BV. (22)

10.73    Asset Purchase Agreement dated May 11, 2000 between Trimble Acquisition
         Corp. and Spectra Precision AB. (22)
                                    .
10.74    $200.0  million  Credit  Agreement  dated July 14, 2000  between  
         Trimble Navigation Limited and ABN AMRO Bank N.V., Fleet National Bank,
         and The Bank of Nova Scotia. (22)

10.75    Subordinated  Seller Note dated July 14, 2000, for the principal amount
         of $80,000,000  issued by Trimble  Navigation  Limited to Spectra 
         Precision Holdings, Inc. (22)

10.76+   Spectra Precision Supplement to the Trimble Navigation 1988 Employee 
         Stock Purchase Plan. (23)

10.77+   Australian Addendum to the Trimble Navigation 1988 Employee Stock 
         Purchase Plan. (24)

21.1     Subsidiaries of the Company. (24)

23.1     Consent of Ernst & Young LLP, independent auditors (see page 78).

24.1     Power of Attorney (included on page 72).


*        Confidential treatment has been previously granted for certain portions
         of this exhibit pursuant to an order dated July 11, 1990.

**       Confidential treatment has been previously granted for certain portions
         of this exhibit pursuant to an order dated March 2, 1995.

***      Confidential  treatment  has been granted for certain  portions of this
         exhibit pursuant to an order dated effective October 5, 1999.

+        Management contract or compensatory plan or arrangement  required to be
         filed as an exhibit to this Annual Report on Form 10-K pursuant to Item
         14(c) thereof.

(1)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 16(a),  "Exhibits," of the  registrant's  Registration
         Statement  on Form S-1, as amended  (File No.  33-35333),  which became
         effective July 19, 1990.

(2)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended December 31, 1990.

(3)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response  to Item 16,  "Exhibits  and Forms  8-K," of the  registrant's
         Report on 10-Q for the quarter ended  September 30, 1991, as amended on
         Form 8, filed February 11, 1992.

                                       69

<PAGE>

(4)      Incorporated  by  reference  to Exhibit No. 4.1 filed in  response to 

         Item 8,  "Exhibits,"  of the  registrant's  Registration Statement on 
         Form S-8 (File No. 33-45167), which became effective January 21, 1992.

(5)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 16(a)  "Exhibits,"  of the  registrant's  Registration
         Statement on Form S-1 (File No. 33-45990), which was filed February 18,
         1992.

(6)      Incorporated  by  reference  to  Exhibits  4.1,  4.2 and 4.3  filed  in
         response  to  Item  8,  "Exhibits,"  of the  registrant's  Registration
         Statement on Form S-8 (File No.  33-57522),  which was filed on January
         28, 1993.

(7)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended December 31, 1992.

(8)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended December 31, 1993.

(9)      Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended June 30, 1994.

(10)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended December 31, 1994.

(11)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended December 31, 1995.

(12)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended June 30, 1996.

(13)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended September 30, 1996.

(14)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended June 30, 1997.

(15)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended September 30, 1997.

(16)     Incorporated  by  reference  to Exhibit  No. 1 to the  registrant's 
         Registration  Statement  on Form 8-A,  which was filed on February 18,
         1999.

(17)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 14(a),  "Exhibits," of the registrant's  Annual Report
         on Form 10-K for the fiscal year ended January 1, 1999.

(18)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended July 2, 1999.

(19)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 7(c),  "Exhibits," of the registrant's  Report on Form
         8-K, which was filed on August 25, 1999.

(20)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended October 1, 1999.

(21)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response  to  Item  8,  "Exhibits,"  of the  registrant's  registration
         statement on Form S-8 filed on June 1, 2000.

(22)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 7(c),  "Exhibits," of the registrant's  Current Report
         on Form 8-K filed on July 28, 2000.

(23)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended September 29, 2000.

                                       70

<PAGE>

(24)     Filed herewith.

(b)      Reports on Form 8-K.

         No reports on Form 8-K were filed by the  registrant  during the fourth
quarter ended December 29, 2000.

                                       71

<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                   TRIMBLE NAVIGATION LIMITED


                                    By: /s/ Steven W. Berglund
                                        ----------------------
                                         Steven W. Berglund,
                                         President and Chief Executive Officer


                                          March 28, 2001


                                POWER OF ATTORNEY

         Know all persons by these  presents,  that each person whose  signature
appears   below   constitutes   and   appoints   Steven  W.   Berglund   as  his
attorney-in-fact,  with  the  power  of  substitution,  for  him in any  and all
capacities,  to sign any amendments to this Report on Form 10-K, and to file the
same, with exhibits  thereto and other documents in connection  therewith,  with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact,  or his substitute or substitutes,  may do or cause to be
done by virtue hereof.

                                       72

<PAGE>

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the  following  persons
on behalf of the registrant and in the capacities and on the dates indicated:

Signature                     Capacity in which Signed         Date
---------------------------   ------------------------------   ----------------



/s/ Steven W. Berglund        President, Chief Executive       March 28, 2001
---------------------------   Officer, Director
Steven W. Berglund         




/s/ Mary Ellen Genovese       Chief Financial Officer and      March 28, 2001
---------------------------   Assistant Secretary (principal
Mary Ellen Genovese           financial officer)




/s/ Robert S. Cooper          Director                         March 13, 2001
---------------------------
Robert S. Cooper




/s/ John B. Goodrich          Director                         March 19, 2001
---------------------------
John B. Goodrich




/s/ William Hart              Director                         March 12, 2001
---------------------------
William Hart




/s/ Ulf J. Johansson          Director                         March 16, 2001
---------------------------
Ulf J. Johansson




/s/ Bradford W. Parkinson     Director                         March 13, 2001
---------------------------
Bradford W. Parkinson

                                       73

<PAGE>


                                                                    SCHEDULE II



                                                 TRIMBLE NAVIGATION LIMITED
                                             VALUATION AND QUALIFIYING ACCOUNTS
                                                 (IN THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>
                                                     Balance at                                                Balance at
                                                    beginning of        (Reductions)                             end of
Allowance for doubtful accounts:                       period            Additions       Write-offs **           period
                                                 -------------------  -----------------  ----------------    ----------------
<S>                                                         <C>                 <C>               <C>                <C>   
   Year ended January 1, 1999                                 2,464                458               702               2,220
   Year ended December 31, 1999                               2,220              1,901             1,172               2,949
   Year ended December 29, 2000 (1)                           2,949              5,008             1,419               6,538



                                                     Balance at                                                Balance at
                                                    beginning of        (Reductions)                             end of
Inventory Reserves:                                    period            Additions       Write-offs **           period
                                                 -------------------  -----------------  ----------------    ----------------
   Year ended January 1, 1999                                 9,409              7,057             2,347              14,119
   Year ended December 31, 1999                              14,119              1,607             1,617              14,109
   Year ended December 29, 2000 (2)                          14,109              5,984             2,684              17,409
</TABLE>


-------------------------------------------------

** Net of recoveries


(1)  Additions  include  $4,419,000  acquired  at July  14,  2000 as part of the
     acquisition of the Spectra Precision Group and $26,000 acquired at November
     14, 2000 as part of the acquisition of Tripod Data Systems.

(2)  Additions  include  $7,659,000  acquired  at July  14,  2000 as part of the
     acquisition of the Spectra Precision Group and $13,000 acquired at November
     14, 2000 as part of the acquisition of Tripod Data Systems.

















                                       S-1

                                       74

<PAGE>



                                INDEX TO EXHIBITS


                                                              SEQUENTIALLY
EXHIBIT                                                          NUMBERED
NUMBER            EXHIBIT                                          PAGE

10.77    Australian Addendum to the Trimble Navigation 1988
         Employee Stock Purchase Plan                             76-78

21.1     Subsidiaries of the Company                              79-80

23.1     Consent of Ernst & Young LLP, Independent Auditors          81


                                       75

<PAGE>





                                  EXHIBIT 10.77
                                                      
                               Australian Addendum
                           Trimble Navigation Limited
                        1988 Employee Stock Purchase Plan


1.  Purpose

     This Addendum (the "Australian Addendum") to the Trimble Navigation Limited
     1988  Employee  Stock  Purchase Plan ("Plan") is adopted to set out certain
     rules which,  together  with the  provisions of the U.S. Plan which are not
     modified  hereby,  govern  the  operation  of  the  Plan  with  respect  to
     Australian-resident  employees of the Company or an Australian  Subsidiary.
     The Plan is intended to comply with the provisions of the Corporations Law,
     ASIC Policy  Statement 49 and specific ASIC relief issued  pursuant to that
     Policy Statement.

2.  Definitions

     Except as set out below,  words  beginning  with a capital  letter have the
     meaning  given  to them in the U.S.  Plan.  In the  event  of any  conflict
     between these provisions and the U.S. Plan, these provisions prevail.

     For the purposes of these provisions:

     "ASIC" means the Australian Securities & Investments Commission;

     "Australian  Subsidiaries" means Trimble Navigation Australia Pty. Ltd. and
     Spectra Precision Pty. Ltd.;

     "Company" means Trimble Navigation Limited;

     "Plan" means collectively the U.S. Plan and this Australian Addendum;

     "U.S. Plan" means the 1988 Employee Stock Purchase Plan.


3.  Employees

     The offer under the Plan must be extended  only to offerees who at the time
     of the offer are full or part-time employees or directors of the Company or
     an Australian Subsidiary.

4.  Offer

     The offer must be in writing  (Offer  Document)  and must include a copy of
     the rules of the Plan.

                                       76

<PAGE>

5.  Purchase Price

     The Offer  Document must specify the  Australian  dollar  equivalent of the
     purchase price were the purchase  price formula  applied at the date of the
     offer.  For the purpose of  calculating  the purchase  price in  Australian
     dollars, the Australian/U.S. exchange rate shall be calculated by reference
     to the  relevant  exchange  rate  published  by an  Australian  bank on the
     previous business day.

6.  Purchase Price Information

     The Company must,  within a reasonable period of an employee so requesting,
     make  available to the employee the  Australian  dollar  equivalent  of the
     current market price of shares in the same class as the Shares to which the
     offer relates,  and the Australian  dollar equivalent of the purchase price
     as if the purchase price formula were applied at the date of the employee's
     request.

     The current  market price of a Share shall be taken as the price  published
     by the  principal  exchange on which the Share is quoted as the final price
     for the  previous  day on which the Share was traded on the stock market of
     that exchange.

7.  Aggregate number of Shares offered

     The number of shares  available  under the Plan,  together  with all shares
     issued under all other  employee share plans during the previous 5 years in
     Australia  (excluding  shares  issued  which  did not  need  disclosure  to
     investors  under s 708 of the  Corporations  Law or by way of an  "excluded
     offer" (as defined in the Corporations Law before 13 March 2000)), does not
     exceed  more than 5% of the total  shares in the Company at the time of the
     offer.

8.  Lodgment of Offer Document

     A copy of the Offer Document  (which need not contain  details of the offer
     particular  to the  offeree  such as the  identity  or  entitlement  of the
     offeree) and each accompanying  document must be provided to ASIC not later
     than 7 days after the provision of that material to the offeree.

9.  Compliance with undertakings

     The Company or an Australian  Subsidiary  must comply with any  undertaking
     required  to be made in the  Offer  Document,  such as the  undertaking  to
     provide pricing information on request.

10. No loan or financial assistance

     Neither the  Company  nor any  associated  body  corporate  of it may offer
     employees any loan or other financial  assistance for the purpose of, or in
     connection with, the acquisition of the Shares to which the offer relates.

11. Contribution plan

     All   contributions   from  wages  or  salary  made  in   connection   with
     participation  in the Plan must be  authorised  by the  offeree on the same
     form of  application  which is used in respect  of the offer,  or on a form
     which is included in or accompanies the Offer Document.

     Any  contributions  made by an  offeree as part of the Plan must be held by
     the Company in trust for the offeree in a non-interest bearing bank account
     which is  established  and kept by the  Company  solely for the  purpose of
     depositing  contribution  moneys and other money paid by employees  for the
     Shares on offer under the Plan.

     The offeree may elect to discontinue their participation in the Plan at any
     time and as soon as  practicable  after  that  election  is made all  money
     deposited  with the bank in relation to that offeree must be repaid to that
     offeree.

                                    * * * * *

                                       77

<PAGE>





                                  EXHIBIT 21.1
                           TRIMBLE NAVIGATION LIMITED
                       LIST OF SUBSIDIARIES OF REGISTRANT

Name of Subsidiary                                 Jurisdiction of Incorporation

Trimble Navigation International Foreign Sales Corporation       Barbados

TR Navigation Corporation                                        California

Trimble Export Limited                                           California

Tripod Data Systems                                              Oregon

TNL Flight Services, Inc                                         Texas

Trimble Navigation France S.A.                                   France

Trimble Navigation Australia Pty Limited                         Australia

Trimble Mexico S. de R.L                                         Mexico

Trimble Navigation Europe Limited                                United Kingdom

Trimble Navigation Deutschland GmbH                              Germany

Trimble Navigation New Zealand Limited                           New Zealand

Trimble Navigation Iberica S.L.                                  Spain

Trimble Navigation Singapore PTE Limited                         Singapore

Datacom Software Limited                                         California

Trimble Japan K.K.                                               Japan

Trimble Navigation Italia s.r.l                                  Italy

Trimble Navigation International Limited                         California

Trimble International Holdings S.L.                              Spain

Trimble Holdings GmbH                                            Germany

Trimble AB                                                       Sweden

Spectra Precision Inc.                                           Delaware

Spectra Precision USA, Inc.                                      Delaware

Spectra Precision Software, Inc.                                 Georgia

Spectra Precision BVBA                                           Belgium

Spectra Precision K.K.                                           Japan

Spectra Precision Pty Ltd.                                       Australia

Spectra Precision Ltd.                                           United Kingdom

                                       78

<PAGE>

                            EXHIBIT
 21.1 (continued)
                           TRIMBLE NAVIGATION LIMITED
                       LIST OF SUBSIDIARIES OF REGISTRANT

Name of Subsidiary                                 Jurisdiction of Incorporation
SPHM Inc.                                                        Delaware

SPSE Inc.                                                        Delaware

Spectra Precision Credit Corp.                                   Delaware

Spectra Precision B.V.                                           Netherlands

Spectra Precision s.r.l                                          Italy

Spectra Precision of Canada Ltd.                                 Canada

Spectra Precision S.A.                                           France

Spectra Precision GesmbH                                         Austria

Spectra Precision Mexicana, SA de CV                             Mexico

Spectra Precision Servicios, SA de CV                            Mexico

Spectra Precision Mexico, SA de CV                               Mexico

Spectra Precision GmbH                                           Germany

Spectra Precision Kaiserslautern GmbH                            Germany

ZSP Geodetic Systems GmbH                                        Germany


                                       79

<PAGE>







                                  EXHIBIT 23.1
                           TRIMBLE NAVIGATION LIMITED

               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

         We consent to the use of our report  dated  January 26,  2001,  in this
Annual  Report  (Form  10-K) of Trimble  Navigation  Limited  for the year ended
December 29, 2000.

         We also consent to the  incorporation  by reference in the Registration
Statements (Form S-8 Nos.  33-37384,  33-39647,  33-45167,  33-45604,  33-46719,
33-50944,  33-57522,   33-62078,   33-78502,   33-84362,  33-91858,   333-04670,
333-28429,  333-53703,  333-84949  and  333-38264)  pertaining to the 1983 Stock
Option  Plan,  the Trimble  Navigation  Savings and  Retirement  Plan,  the 1990
Director  Stock Option Plan,  the "Position  for Us for Progress"  1992 Employee
Stock Bonus Plan, the 1992  Management  Discount Stock Option Plan, and the 1993
Stock Option Plan, and the related Prospectuses, of our report dated January 26,
2001 with  respect to the  consolidated  financial  statements  and  schedule of
Trimble  Navigation  Limited  included in the Annual  Report (Form 10-K) for the
year ended December 29, 2000.



                                                  /s/ ERNST & YOUNG LLP


Palo Alto, California
March 27, 2001


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