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 31, 2004

                                       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)

         749 North Mary Avenue, Sunnyvale, CA           94085
         ------------------------------------           -----
       (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]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).
Yes X   No

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant,  based upon the last sale price of the Common Stock  reported on the
NASDAQ National Market on July 2, 2004 was approximately $1.3 billion.

There  were  52,581,679  shares of the  registrant's  Common  Stock  issued  and
outstanding as of March 9, 2005.



<PAGE>



                       DOCUMENTS INCORPORATED BY REFERENCE

Certain parts of Trimble  Navigation  Limited's Proxy Statement  relating to the
annual  meeting  of  stockholders  to be  held  on  May  19,  2005  (the  "Proxy
Statement") are incorporated by reference into Part III of this Annual Report on
Form 10-K.




<PAGE>


                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K 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, which are subject to the "safe harbor" created
by those sections.  The forward-looking  statements  regarding future events and
the future results of Trimble  Navigation Limited ("Trimble" or "The Company" or
"We" or "Our" or "Us") are based on current expectations,  estimates, forecasts,
and projections  about the industries in which Trimble  operates and the beliefs
and  assumptions  of the  management  of Trimble.  Discussions  containing  such
forward-looking statements may be found in "Management's Discussion and Analysis
of   Financial   Condition   and   Results  of   Operations."   In  some  cases,
forward-looking  statements  can be  identified  by  terminology  such as "may,"
"will,"  "should,"  "could,"  "predicts,"  "potential,"  "continue,"  "expects,"
"anticipates,"   "future,"  "intends,"  "plans,"  "believes,"  "estimates,"  and
similar expressions.  These forward-looking statements involve certain risks and
uncertainties that could cause actual results, levels of activity,  performance,
achievements  and  events  to  differ  materially  from  those  implied  by such
forward-looking  statements,  but are not  limited  to those  discussed  in this
Report under the section  entitled  "Other Risk Factors" and  elsewhere,  and in
other reports Trimble files with the Securities and Exchange Commission ("SEC"),
specifically  the most recent reports on Form 8-K and Form 10-Q,  each as it may
be amended from time to time.  These  forward-looking  statements are made as of
the date of this  Annual  Report on Form 10-K.  We  reserve  the right to update
these  statements for any reason,  including the occurrence of material  events.
The risks and  uncertainties  under the  caption  "Management's  Discussion  and
Analysis  of   Financial   Condition   and  Results  of   Operations-Risks   and
Uncertainties"  contained  herein,  among other things,  should be considered in
evaluating our prospects and future financial performance.  We have attempted to
identify  forward-looking  statements  in this report by placing an asterisk (*)
before paragraphs containing such material.




<PAGE>




                           TRIMBLE NAVIGATION LIMITED

                          2004 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS


           PART I

Item 1     Business Overview...................................................5

Item 2     Properties.........................................................17

Item 3     Legal Proceedings..................................................17

Item 4     Submission of Matters to a Vote of Security Holders................17


           PART II

Item 5     Market for Registrant's Common Equity and Related
              Stockholder Matters.............................................18

Item 6     Selected Financial Data............................................19

Item 7     Management's Discussion and Analysis of Financial Condition
              and Results of Operations.......................................20

Item 7A    Quantitative and Qualitative Disclosures about Market Risk.........42

Item 8     Financial Statements and Supplementary Data........................44

Item 9     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure........................................75

Item 9a    Controls and Procedures............................................75


           PART III

Item 10    Directors and Executive Officers of the Registrant.................75

Item 11    Executive Compensation.............................................76

Item 12    Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters.................................76

Item 13    Certain Relationships and Related Transactions.....................76

Item 14    Principal Accountant Fees and Services.............................76


           PART IV

Item 15    Exhibits, Financial Statement Schedules and Reports on
              Form 8-K.....................................................76-91





                                   TRADEMARKS

Trimble, the globe and triangle logo, EZ-Guide,  Telvisant,  Lassen, SiteVision,
GeoExplorer, AgGPS, Thunderbolt,  FirstGPS, Spectra Precision and CrossCheck are
trademarks of Trimble Navigation Limited and its subsidiaries  registered in the
United States Patent and Trademark  Office and other countries.  Force,  Ranger,
Recon  and  TrimTrac  are  trademarks  of  Trimble  Navigation  Limited  and its
subsidiaries. All other trademarks are the property of their respective owners.





<PAGE>



                                     PART I



Item 1   Business Overview

Trimble Navigation Limited, a California corporation ("Trimble" or "the Company"
or "we" or "our" or "us"), provides advanced positioning product solutions, most
typically to commercial and government users. The principle  applications served
include  surveying,  construction,   agriculture,  urban  and  natural  resource
management,  and fleet and asset  management.  Our  products  typically  provide
benefits  that can include lower  operational  costs,  and higher  productivity.
Examples of products  include systems that guide  agricultural  and construction
equipment,  surveying  instruments,  systems that track fleets of vehicles,  and
data  collection  systems  that  enable  the  management  of  large  amounts  of
geo-referenced  information.  In addition, we also manufacture components for in
vehicle  navigation  and  telematics  systems,  and timing  modules  used in the
synchronization of wireless networks.

Trimble products often combine  knowledge of location or position  together with
applications  software  and a wireless  link to provide a solution to a specific
application.  Position is provided through a number of alternative  technologies
including  the Global  Positioning  System  (GPS) and systems  that use laser or
optical technologies to establish position.  Wireless  communication  techniques
include both public networks,  such as cellular,  and private networks,  such as
business band radio. A significant amount of the differentiation in our products
is provided through  software;  this includes embedded firmware that enables the
positioning solution and applications  software that allows the customer to make
use of the positioning information.

We design and market our own products.  Our  manufacturing  strategy  includes a
combination   of  in  house   assembly  as  well  as  the  use  of  third  party
subcontractors.  Our global operations include major development,  manufacturing
or logistics  operations in the United  States,  Sweden,  Germany,  New Zealand,
France,  Canada,  and  the  Netherlands.  Products  are  sold  through  dealers,
representatives,  joint ventures, and other channels throughout the world. These
channels are supported by our sales offices located in more than 20 countries.

We began  operations in 1978 and  incorporated in California in 1981. Our common
stock has been publicly traded on NASDAQ since 1990 under the symbol TRMB.

Technology Overview

A  majority  of  our  revenue  is  derived  from  applying  GPS  to  terrestrial
applications.  GPS is a system of 24 orbiting  satellites and associated  ground
control that is funded and  maintained by the U. S.  Government and is available
worldwide free of charge. GPS positioning is based on a technique that precisely
measures  distances from four or more  satellites.  The satellites  continuously
transmit precisely timed radio signals using extremely accurate atomic clocks. A
GPS receiver  measures  distances from the satellites in view by determining the
travel time of a signal from the satellite to the receiver,  and then uses those
distances to compute its position. Under normal circumstances, a 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.
Much better  accuracies are possible  through a technique  called  "differential
GPS." In addition to providing  position,  GPS provides  extremely accurate time
measurement.

GPS accuracy is dependent  upon the  locations of the receiver and the number of
GPS  satellites  that are above the horizon at any given time.  Reception of GPS
signals  requires  line-of-sight  visibility  between  the  satellites  and  the
receiver,  which can be blocked by  buildings,  hills,  and dense  foliage.  The
receiver must have a line of sight to at least four  satellites to determine its
latitude, longitude,  attitude (angular orientation),  and time. The accuracy of
GPS may also be limited by distortion of GPS signals from  ionospheric and other
atmospheric conditions.

Our GPS products are based on proprietary  receiver  technology.  Over time, the
advances in positioning,  wireless communication,  and information  technologies
have enabled us to add more  capability to our products and thereby deliver more
value to our users. For example,  the recent developments in wireless technology
and deployments of next generation wireless networks have enabled less expensive
wireless communications.  These developments allow for the efficient transfer of
position data to locations away from the positioning field device,  allowing the
data to be accessed by more users and thereby increasing productivity.  This has
allowed us to include a wireless link in many of our products and connect remote
field operations to a central location.

<page>

Our laser and optical products either measure  distances and angles to provide a
position  in three  dimensional  space or they  provide  highly  accurate  laser
references  from which  position can be  established.  The key elements of these
products  are  typically a laser,  which is generally a  commercially  available
laser diode and a complex mechanical  assembly.  These elements are augmented by
software algorithms.


Business Strategy


Our business strategy is developed around an analysis of several key elements:

     o    Attractive  markets - We focus on  markets  that offer  potential  for
          revenue growth, profitability, and market leadership.

     o    Innovative   solutions  that  provide  significant   benefits  to  our
          customers - We seek to apply our technology to applications  for which
          position data is important  and where we can create  unique value.  We
          look for  opportunities in which the rate of  technological  change is
          high and which have a  requirement  for the  integration  of  multiple
          technologies into a solution.

     o    Distribution   channels  to  best  access  our  markets  -  We  select
          distribution channels that best serve the needs of individual markets.
          These channels can include  independent  dealers,  direct sales, joint
          ventures,  OEM sales, and distribution alliances with key partners. We
          view  international  expansion as an important element of our strategy
          and seek to develop international channels.

Business Segments and Markets

We are organized  into four main  operating  segments  encompassing  our various
applications and product lines:  Engineering and Construction,  Field Solutions,
Component Technologies, and Mobile Solutions. Our Portfolio Technologies segment
aggregates smaller businesses,  primarily focused on defense and the integration
of GPS and inertial technologies.  Our segments are distinguished by the markets
they serve.  Each  segment  consists of  businesses  which are  responsible  for
product development, marketing, sales, strategy, and financial performance.

Engineering and Construction

Products in the Engineering and  Construction  segment improve  productivity and
accuracy  throughout  the entire  construction  process  including  the  initial
survey,  planning,  design, site preparation,  and building phases. Our products
are  intended  to  both  improve  the  productivity  of each  phase,  as well as
facilitate the entire process by improving information flow from one step to the
next.

The product solutions typically include multiple  technologies.  The elements of
these  solutions  may  incorporate  GPS,  optical,   laser,  radio  or  cellular
communications, and software.

An example  of the  customer  benefits  provided  by our  product is our GPS and
robotic  optical  surveying  instruments  which  enable the  surveyor to perform
operations  in  the  field  faster,  more  reliably  and  with a  smaller  crew.
Similarly,  our  construction  machine  guidance  products allow the operator to
achieve the desired landform by eliminating  stakeout and reducing rework. These
steps in the  construction  process  can be readily  linked  together  with data
collection  modules and  software to  minimize  the time and effort  required to
maintain data accuracy throughout the entire construction process.

We sell and distribute our products in this segment  through a global network of
independent  dealers that are  supported by Trimble  personnel.  This channel is
supplemented by relationships  that create additional  channel breadth including
our joint ventures with  Caterpillar,  Nikon, and private branding  arrangements
with other companies.

We also design and market handheld data collectors and data collection  software
for field use by surveyors, contractors, and other professionals. These products
are sold directly, through dealers, and other survey manufacturers.  Competitors
in this portion of the business are small and geographically diverse.

Competitors in this segment are typically companies that provide optical, laser,
or GPS positioning  products.  Our principal  competitors are Topcon Corporation
and Leica  Geosystems.  Price points in this segment range from less than $1,000

<page>

for  certain  laser  systems to  approximately  $125,000  for a high  precision,
three-dimensional, machine control system.

Representative products sold in this segment include:

Trimble(R) S6 Total Station - The Trimble S6 Total Station is a  technologically
advanced optical surveying system. Its advanced servo motors make the Trimble S6
fast, silent, and precise, allowing surveyors to measure points and collect data
in the field  efficiently  and  productively.  The Trimble S6 offers  unique new
Trimble technologies that enable cable-free operation,  longer battery life, and
accuracy  assurance,  among  many  other  features.  Its  detachable  Trimble CU
controller runs powerful Trimble field software for collecting,  displaying, and
managing field data.

Trimble(R)  R8 GPS System - The Trimble R8 GPS System  combines a GPS  receiver,
radio,  and battery in one compact unit to produce a lightweight  and versatile,
cable-free  GPS surveying  solution.  Surveyors can use the Trimble R8 system to
achieve  centimeter-level  accuracy  in their  measurements  in real  time.  The
Trimble  R8  system  offers  R-Track  technology,  which  is  a  unique  Trimble
technology  developed  to support new GPS signals for  civilian  use.  These new
signals  will be  transmitted  from  modernized  GPS  satellites  that  the U.S.
Department of Defense has scheduled for launch in 2005.

Trimble(R)  Recon(TM)  Controller  - The Trimble  Recon  Controller  is a rugged
handheld  controller  used by surveyors and engineers in the field.  Running the
Microsoft Pocket PC operating system, the Trimble Recon controller enables users
to run the Trimble software of their choice,  plus other applications to support
their business needs. The Trimble Recon  controller  features a touch screen for
quick and easy data  entry and a color  graphic  display.  It  tackles  multiple
surveying   applications,    including   topographic   surveying,   engineering,
construction, and mapping.

GCS family of Grade Control Systems - Grade control  systems meets  construction
contractors' needs with productivity-enhancing  solutions for earthmoving,  site
prep and roadwork.  The  Trimble(R)  GCS family  provides  upgrade  options that
deliver  earthmoving  contractors  with the  flexibility to select a system that
meets their daily needs today,  and later add on to meet their  changing  needs.
For example, a single control system such as the GCS300 can provide for low-cost
point of entry into grade  control,  and over time can be upgraded to the GCS400
dual sensor system, or to the full 3D GCS900 Grade Control System.

Spectra  Precision(R)  Laser  portable  tools  -  Our  Spectra  Precision  Laser
portfolio includes a broad range of laser based tools for the interior, drywalls
and ceilings,  HVAC, and mechanical contractor.  Designed to replace traditional
methods of  measurement  and leveling for a wide range of interior  construction
applications,  our laser tools are easy to learn and use. Our Spectra  Precision
Laser product  portfolio  includes  rotating lasers for horizontal  leveling and
vertical  alignment,  as well as  laser  pointers  and a  laser  based  distance
measuring  device.   They  are  available   through   independent  and  national
construction supply houses both in the US and in Europe.

Field Solutions

Our Field Solutions segment addresses the agriculture and geographic information
system (GIS) markets.

Our agriculture products consist of manual and automated navigation guidance for
tractors and other farm equipment used in spraying,  planting,  cultivation, and
harvesting  applications.  The  benefits to the farmer  include  faster  machine
operation,  higher yields,  and lower consumption of chemicals.  We also provide
positioning   solutions   for  leveling   agricultural   fields  in   irrigation
applications  and  aligning  drainage  systems  to better  manage  water flow in
fields.

We use  multiple  distribution  channels  to  access  the  agricultural  market,
including  independent  dealers and partners such as CNH Global.  Competitors in
this market are either vertically  integrated  implement  companies such as John
Deere,  or  agricultural  instrumentation  suppliers  such as  Raven,  RHS,  CSI
Wireless, Beeline and Novariant.

Our GIS  product  line is  centered  on  handheld  data  collectors  that gather
information in the field to be incorporated  into GIS databases.  Typically this
information includes features, attributes, and positions of fixed infrastructure
and  natural  resource  assets.  An example  would be that of a utility  company
performing a survey of its transmission poles including the age and condition of
each  telephone  pole.  Our handheld  unit enables this data to be collected and
automatically  stored while  confirming the location of the asset.  The data can
then be downloaded into a GIS database.  This stored data could later be used to

<page>

navigate back to any  individual  asset or item for  maintenance or data update.
Our mobile GIS initiative goes one step further by allowing this  information to
be communicated  from the field worker to the  back-office GIS database  through
the combination of wireless technologies, as well as giving the field worker the
ability to download  information  from the database.  This  capability  provides
significant  advantages to users including improved  productivity,  accuracy and
access to the information in the field.

Distribution  for GIS  products is  primarily  through a network of  independent
dealers and business partners,  supported by Trimble personnel.  Primary markets
for our GIS products and  solutions  include both  governmental  and  commercial
users.  Government  users  are most  often  municipal  governments  and  natural
resource agencies.  Commercial users include utility  companies.  Competitors in
this market are typically survey instrument  companies utilizing GPS technology.
Two examples are Leica Geosystems and Thales.

Approximate  price points in this  segment  range from $3,000 for a GIS handheld
unit to $35,000 for a fully automated, farm equipment control system.

Representative products sold within this segment include:

GeoExplorer(R)  CE Series - Combines a GPS  receiver in a rugged  handheld  unit
running  Microsoft's  Windows CE operating  system that makes it easy to collect
and maintain data about objects in the field.

AgGPS(R)  Autopilot(TM) System - A GPS-enabled,  agricultural  navigation system
that  connects  to a  tractor's  steering  system and  automatically  steers the
tractor along a precise path to within three  centimeters or less.  This enables
both  higher  machine  productivity  and more  precise  application  of seed and
chemicals, thereby reducing costs to the farmer.

AgGPS(R)  EZ-Guide(R)  System  - A  GPS-enabled,  manual  guidance  system  that
provides the tractor operator with steering visual corrections  required to stay
on course to within 25  centimeters.  This system  reduces the overlap or gap in
spraying, fertilizing, and other field applications.

Component Technologies

Our  Component   Technologies   segment   provides   GPS-based   components  for
applications  that require embedded position or time. Our largest markets are in
the  telecommunications  and  automotive  industries  where we  supply  modules,
boards,  custom  integrated  circuits and  software,  or single  application  IP
licenses to the customer  according to the needs of the  application.  Sales are
made directly to original equipment  manufacturers (OEMs) and system integrators
who  incorporate  our  component  into a sub-system  or a complete  system-level
product.

In the telecommunications  infrastructure market, we provide timing modules that
keep wireless networks synchronized and on frequency. For example, CDMA cellular
telephone  networks  require  a high  level  of both  short-term  and  long-term
frequency stability for proper operation  (synchronization of  information/voice
flow to avoid  dropped  calls).  Our timing  modules  meet these needs at a much
lower cost than the atomic standards or other specially prepared components that
would otherwise be required. Customers include wireless infrastructure companies
such as Nortel, Samsung, and Andrew.

In the  automotive  and  embedded  market,  we provide a GPS  component  that is
embedded into in-vehicle  navigation (IVN), fleet management,  vehicle security,
asset  management and telematics  applications.  For the automotive  market,  in
addition  to core GPS  technology,  we  provide a  location  engine for IVN that
blends GPS with advanced dead reckoning (DR)  technology to provide  exceptional
position density in the most challenging  navigation  environments.  The primary
selling  attributes  in this  market  are  quality,  technology,  logistics  and
customer  support.  Trimble supplies several Tier-1 IVN system  manufacturers in
Europe and Asia.

* The requirements  for smaller size and lower power of GPS components,  coupled
with improving  capabilities  allow GPS to potentially be used in a new class of
wireless  devices.  Indicative of this trend, in 2004 we announced a new product
category, the TrimTrac, which combines a cellular phone in the same package as a
GPS  receiver.  We  expect  our  strength  in GPS  technology  will  expand  our
participation in this market.

* Component  Technologies  has developed GPS software  technologies  which it is
making  available for license.  This software can run on certain  digital signal
processors (DSP) or microprocessors removing the need for dedicated GPS baseband

<page>

signal  processor  chips.  Component  Technologies  has a partnership with u-Nav
Microelectronics  to  license  Trimble  GPS  software  technology  for u-Nav GPS
chipsets.

* Component  Technologies  continues to explore other  positioning  solutions in
addition to GPS. An example of such a solution is the  television  triangulation
technology  developed  by Rosum.  With  Rosum,  we intend to develop a family of
devices  which will greatly  extend the ability to locate both people and assets
in environments that would be difficult or impossible for GPS only solutions.

The  major  competitor  in  the   telecommunication   infrastructure  market  is
Symmetricom.  Competitors in the  automotive and embedded  markets are typically
component  companies with GPS  capability,  including  Japan Radio  Corporation,
Motorola, and SiRF.

Representative products sold by this segment include:

Thunderbolt(R)  GPS Disciplined  Clock - The Thunderbolt clock is used as a time
source for the synchronization of wireless networks. By combining a GPS receiver
with a high-quality quartz oscillator,  the Thunderbolt achieves the performance
of an atomic standard with higher reliability and lower price.

FirstGPS(R)  Technology  -  We  license  our  FirstGPS  technology,  which  is a
host-based,  GPS system  available as two  integrated  circuits  and  associated
software.  The software  runs on a  customer's  existing  microprocessor  system
complementing  the work done by the  integrated  circuit to  generate  position,
velocity,  and time.  This  low-power  technology is  particularly  suitable for
small, mobile, battery-operated applications.

Lassen(R) iQ Module - The Lassen iQ module adds complete GPS  functionality to a
mobile  product  in  a  postage  stamp-sized   footprint  with  ultra-low  power
consumption,  consuming  less than 100mW at 3.3V.  This module is  designed  for
portable  handheld,  battery-powered  applications such as cell phones,  pagers,
PDAs, digital cameras, and many others.

TrimTrac(TM)  Locator - Our new  TrimTrac  product is a complete end user device
that  combines  GPS  functionality   with  tri-band  global  system  for  mobile
communications  (GSM)  wireless  communications.  It is intended for high volume
personal  vehicle and commercial  asset  management  applications  that demand a
low-cost locator device.

Mobile Solutions

Our Mobile Solutions segment addresses the market for fleet management  services
by providing a Trimble-hosted  platform  solution that bundles both the hardware
and software needed to run the application.  The software  solution is typically
provided to the user through  Internet-enabled access to our hosted platform for
a monthly service fee. This solution enables the fleet owner to dispatch, track,
and monitor the  conditions  of  vehicles in the fleet on a real-time  basis.  A
vehicle-mounted  unit  consists of a single  module  including  a GPS  receiver,
sensor interface,  and a cellular modem. Our solution includes the communication
service  from the vehicle to our data center and access over the Internet to the
application  software,  relieving  the  user of the need to  maintain  extensive
computer operations.

We market our fleet management  services in three primary areas,  leveraging the
core platform.  Our market strategy targets  opportunities in specific  vertical
markets  where we  believe  we can  provide  a  unique  value to the end user by
customizing the hardware and software  solution for a particular  industry.  For
example,  the first vertical we are  addressing is ready mix concrete.  Here, we
combine a suite of sensors into a solution that can automatically  determine the
status of a vehicle without driver intervention.  Our agreement with McNeilus, a
major  manufacturer  of trucks for the ready mix concrete  and waste  management
industries,  facilitates  factory  installations  of our management  solution to
ready mix concrete fleet operators. McNeilus', along with a Trimble sales force,
markets our  solution  as a retrofit  for trucks  already in the field,  or as a
factory-installed  option.  We plan on leveraging our  technology,  partners and
customers into other verticals,  such as other  construction  material  delivery
vehicles and waste management  trucks,  where a customized  solution can provide
similar benefits as in ready mix.

We also have a horizontal  market  strategy  that  focuses on providing  turnkey
solutions  to a broad  range of service  fleets and mobile  workers  that span a
large number of market segments. Here, we leverage the same general applications
that are used in our vertical  markets without the same level of  customization.
These  products  are  distributed   through   individual   dealers  as  well  as
after-market automotive electronics suppliers.

<page>

Our enterprise strategy focuses on sales to large, enterprise accounts. Here, in
addition  to a  Trimble-hosted  solution,  we can also  integrate  our  software
directly  into the  customer's  IT  infrastructure,  giving them  control of the
information.  In this market we sell directly to end users and sales cycles tend
to be long due to field trials followed by an extensive decision-making process.

Approximate  prices for the hardware fall in the range of $400 to $3,000,  while
the monthly software service fees range from  approximately $20 to approximately
$55,  depending on the customer  service level.  Competition  comes largely from
service-oriented businesses such as @Road.

Representative products sold by this segment include:

TrimWeb(TM) and TrimFleet(TM)  Systems - Our fleet management  service offerings
are comprised of the TrimWeb  system and TrimFleet  system.  The TrimWeb  system
provides  different  levels of service that run from snapshots of fleet activity
to  real-time  fleet  dispatch  capability  via access to the  TrimWeb  platform
network through a secure internet connection.  The TrimWeb system includes truck
communication  service  and  computer  backbone  support  of the  software.  The
TrimFleet  system offers many of the same features,  though the software resides
on the end users  servers  and is  accessed by the  customer  through  their own
internal  networks,  not via the internet.  Variations of the TrimWeb system and
TrimFleet system are tailored for specific industry applications.

CrossCheck(R) Module - This hardware,  mounted on the vehicle, provides location
and  information  through  its  built-in  cellular  interface.  This module also
includes GPS positioning, sensor interfaces for vehicle conditions, and built-in
intelligence for distributed decision-making.

Portfolio Technologies

Our Portfolio Technologies segment includes various operations that aggregate to
less than 10 percent of our total  revenue.  The  operations in this segment are
Applanix, Military and Advanced Systems (MAS), and Trimble Outdoors.

Applanix  develops,  manufactures,  sells  and  supports  high-value,  precision
products that combine GPS with inertial sensors for accurate  measurement of the
position and attitude of moving  vehicles.  Sales are made directly by our sales
force to the end users or to systems integrators. Competitors include IGI in the
airborne survey market, and iXsea and VT TSS in the marine survey market.

Our MAS  business  supplies  GPS  receivers  and  embedded  modules that use the
military's  GPS  advanced  capabilities.  The  modules are  principally  used in
aircraft navigation and timing application.  Military products are sold directly
to either  the US  Government  or  defense  contractors.  Sales are also made to
authorized  foreign  end users.  Competitors  in this  market  include  Rockwell
Collins, L3, and Raytheon.

During fiscal 2004, we announced our newest business,  Trimble Outdoors. Trimble
Outdoors is a consumer  business  utilizing  GPS enabled  cell phones to provide
information for outdoor recreational activities.

Representative products sold by this segment include:

Applanix  POS/AV(TM) - An integrated  GPS/inertial system for airborne surveying
that measures aircraft position to an accuracy of a few centimeters and aircraft
attitude (angular  orientation) to an accuracy of 30 arc seconds or better. This
system is typically  interfaced to large format cameras and scanning  lasers for
producing geo-referenced topographic maps of the terrain.

Force(TM) 5 GS (GRAM-SAASM) Module - A dual frequency,  embedded GPS module that
is used in a variety of military airborne applications.

Acquisitions and Joint Ventures

Our growth  strategy is centered on  developing  and  marketing  innovative  and
complete value-added  solutions to our existing customers,  while also marketing
them to new customers and  geographic  regions.  In some cases,  this has led to
partnering  with or acquiring  companies  that bring  technologies,  products or
distribution capabilities that will allow us to enter or penetrate a market more

<page>

effectively than if we had done so solely through internal development. Over the
past five years, this has led us to form two joint ventures and acquire multiple
companies.  No assurance  can be given that our previous or future  acquisitions
will be  successful  or will  not  materially  adversely  affect  our  financial
condition or operating results.

GeoNav

* On July 5, 2004 we acquired GeoNav GmbH, a small provider of customized  field
data collection  solutions for the cadastral survey market in Europe.  We expect
the  acquisition to augment our capability for  localization  of our products in
Europe.  GeoNav's performance is reported under our Engineering and Construction
segment.

TracerNET Corporation

* On March 5, 2004 we acquired TracerNET  Corporation of Virginia, a provider of
wireless  fleet  management  solutions.  We expect the TracerNET  acquisition to
offer  more  diverse  and  complete  fleet  management  solutions.   TracerNET's
performance has been integrated into our Mobile Solutions segment.

MENSI S.A.

On December 9, 2003, we acquired  MENSI S.A., a French  developer of terrestrial
3D laser  scanning  technology.  The MENSI  acquisition  enhanced our technology
portfolio and expanded our product  offerings.  MENSI's  performance is reported
under our Engineering and Construction segment.

Applanix Corporation

On July 7, 2003,  we acquired  Applanix  Corporation,  a Canadian  developer  of
systems that integrate  inertial  navigation  system and GPS  technologies.  The
Applanix  acquisition  extended our  technology  portfolio and offers  increased
robustness  and  capabilities  in our future  positioning  products.  Applanix's
performance is reported under our Portfolio Technologies segment.

Nikon-Trimble Co., Ltd.

On March 28, 2003,  Trimble and Nikon Corporation agreed to form a joint venture
in Japan, Nikon-Trimble Co., Ltd., which assumed the operations of Nikon Geotecs
Co., Ltd., a Japanese  subsidiary of Nikon Corporation and Trimble Japan KK, our
Japanese subsidiary. Nikon-Trimble began operations in July of 2003.

Nikon-Trimble  is 50%  owned by us and 50%  owned by Nikon,  with  equal  voting
rights.  It is focusing on the design and  manufacture of surveying  instruments
including  mechanical total stations and related products.  In Japan, this joint
venture distributes Nikon's survey products as well as our survey,  agriculture,
construction  and  GIS  products.   Outside  of  Japan,  we  are  the  exclusive
distributor of Nikon survey and construction products.

* We  expect  the  joint  venture  to  enhance  our  market  position  in survey
instruments  through  geographic  expansion  and market  penetration.  The Nikon
products will broaden our survey and construction  product  portfolio and enable
us to better access emerging  markets such as Russia,  China, and India. It will
also  provide us with the  ability  to sell our GPS and  robotic  technology  to
existing Nikon customers. Additionally, Nikon-Trimble is expected to improve our
market position in Japan.

Caterpillar Trimble Control Technologies, LLC

On April 1, 2002, we  established  and began  operations of a joint venture with
Caterpillar called Caterpillar Trimble Control Technologies,  LLC, in which each
company  has a 50%  ownership  stake and have equal  voting  rights.  This joint
venture is  developing  new  generations  of machine  control  products  for the
construction  and mining markets for  installation in the factory or as a dealer
option.

* Today, we sell  construction  machine control products to contractors  through
our dealer channel, for installation on bulldozers, motorgraders, and excavators
that are  already in the field (the  "after-market").  However,  both  companies
believe the  adoption  of the  technology  will spur  future  demand for machine
control  products  that can be  integrated  into the  design of new  Caterpillar
machines, while also available for "after-market" installation.

<page>

Patents, Licenses and Intellectual Property

We hold  approximately  600 US patents and 108 non-US  patents,  the majority of
which cover GPS technology and applications,  and over 93 of which cover optical
and laser technology and applications.

We prefer to own the intellectual property used in our products, either directly
or though  subsidiaries.  From time to time we  license  technology  from  third
parties.

There are approximately 60 trademarks registered to Trimble and its subsidiaries
including  "Trimble," the globe and triangle logo,  "AgGPS,"  "GeoExplorer," and
"Telvisant,"  among others that are registered to Trimble  Navigation Limited in
the  United  States  and other  countries.  Additional  trademarks  are  pending
registration.

Sales and Marketing

We tailor the  distribution  channel to the needs of our  products  and regional
markets through a number of forms of sales channel  solutions  around the world.
We sell our products  worldwide  primarily  through dealers,  distributors,  and
authorized  representatives,  occasionally  granting  exclusive rights to market
certain  products  within  specific  countries.  This channel is  supported  and
supplemented  (where third party  distribution is not available) by our regional
sales offices in North America,  Europe,  Australia,  China, Korea, New Zealand,
Singapore, and United Arab Emirates. We also utilize distribution alliances, OEM
relationships  and  joint  ventures  with  other  companies  as a means to serve
selected markets.

Sales  to   unaffiliated   customers   outside  the  United   States   comprised
approximately  50% in 2004, 51% in 2003, and 49% in 2002. During the 2004 fiscal
year,  North and South  America  represented  57%,  Europe,  the Middle East and
Africa represented 30%, and Asia represented 13% of our total revenues.

Support and Warranty

The warranty periods for our products are generally between one and three years.
Selected  military  programs  may require  extended  warranty  periods up to 5.5
years,  certain TDS products have a 90-day  warranty  period,  and certain Nikon
products have a five-year warranty period. We support our GPS products through a
circuit board replacement program from locations in the United Kingdom, Germany,
Japan, and the United States. The repair and calibration of our non-GPS products
are available from company-owned or authorized facilities.  We reimburse dealers
and distributors for all authorized warranty repairs they perform.

While we engage in extensive  product quality programs and processes,  including
actively  monitoring  and  evaluating  the quality of component  suppliers,  our
warranty  obligation is affected by product failure rates,  material usage,  and
service delivery costs incurred in correcting a product  failure.  Should actual
product failure rates, material usage, or service delivery costs differ from the
estimates,  revisions to the estimated warranty accrual and related costs may be
required.

Seasonality of Business

* Our  revenues  are  affected  by  seasonal  buying  patterns  in  some  of our
businesses.  Over half of our  total  revenue  comes  from our  Engineering  and
Construction  business,  which  has the  biggest  seasonal  impact  on our total
revenue. This business, and therefore our total revenue, is seasonally strongest
during the second quarter due to the start of the construction  buying season in
the northern  hemisphere  in spring.  Typically,  we expect the first and fourth
quarters  to be the  seasonal  lows due to the lack of  construction  during the
winter months.  The second quarter has averaged to 26.2% of total revenue in the
last two fiscal years versus a straight line of 25% per quarter.

Backlog

In most of our markets,  the time between order placement and shipment is short.
Therefore,  we believe  that  backlog is not a reliable  indicator of present or
future business conditions.




<PAGE>


Manufacturing

Manufacturing  of  substantially  all  our  GPS  products  is  subcontracted  to
Solectron  Corporation.  During  fiscal  2004  we  utilized  Solectron's  Suzhou
facilities in China for all of our Component Technologies products.  During 2004
we expanded our use of Solectron in Mexico for our Field Solutions  products and
handhelds.  We continue to utilize  Solectron  California  for our  high-end GPS
products and new product  introduction  services.  Solectron is responsible  for
substantially all material  procurement,  assembly,  and testing. We continue to
manage product design through pilot production for the  subcontracted  products,
and we are directly involved in qualifying  suppliers and key components used in
all our products.  Our current contract with Solectron continues in effect until
either party gives the other ninety days written notice.

We manufacture  laser and optics-based  products at our plants in Dayton,  Ohio;
Danderyd, Sweden; Jena and Kaiserslautern,  Germany; Paris, France; and Toronto,
Canada.  Some  of  these  products  or  portions  of  these  products  are  also
subcontracted to third parties for assembly.

Our  manufacturing   sites  in  Dayton,   Ohio;   Danderyd,   Sweden;  Jena  and
Kaiserslautern,  Germany are  registered to  ISO9001:2000,  covering the design,
production,  distribution,  and  servicing of all our  products.  The  Component
Technologies segment is registered to QS9000 for its automotive products. QS9000
is the automotive  version of ISO9000  covering  specific  requirements  for the
market.

Research and Development

We believe that our competitive  position is maintained  through the development
and  introduction of new products that  incorporate  improved  features,  better
performance,  smaller size and weight,  lower cost, or some combination of these
factors.  We invest  substantially  in the development of new products.  We also
make significant investment in the positioning,  communication,  and information
technologies  that  underlie our products  and will likely  provide  competitive
advantages.

Our research and development expenditures,  net of reimbursed amounts were $77.6
million for fiscal 2004,  $67.6  million for fiscal 2003,  and $61.2 million for
fiscal 2002.

* We expect to continue  investing in research and development  with the goal of
maintaining  or  improving  our  competitive  position,  as well as the  goal of
entering new markets.

Employees

As of December 31, 2004, we employed  approximately  2,160 employees,  including
31% in sales and marketing, 27% in manufacturing, 28% in engineering, and 14% in
general and  administrative  positions.  Approximately  44% of employees  are in
locations outside the United States.

Our employees are not  represented by unions except for those in Sweden and some
in  Germany.  We also  employ  temporary  and  contract  personnel  that are not
included in the above headcount numbers.  We have not experienced work stoppages
or similar labor actions.

Available Information

The  Company's  annual  reports  on Form 10-K,  quarterly  reports on Form 10-Q,
current  reports on Form 8-K, and all  amendments to those reports are available
free of charge on the Company's web site through www.trimble.com/investors.html,
as soon as reasonably  practicable after such material is  electronically  filed
with  or  furnished  to the  Securities  and  Exchange  Commission.  Information
contained on our web site is not part of this annual report on Form 10-K.

In addition,  you may request a copy of these filings (excluding exhibits) at no
cost by writing or  telephoning  us at our  principal  executive  offices at the
following address or telephone number:

Trimble Navigation Limited
749 North Mary Avenue, Sunnyvale, CA 94085
Attention: Investor Relations
Telephone: 408-481-8000

<page>

Executive Officers

The names,  ages, and positions of the Company's  executive officers as of March
1, 2005 are as follows:

Name                      Age    Position
----                      ---    --------
Steven W. Berglund        53     President and Chief Executive Officer
Rajat Bahri               40     Chief Financial Officer
William C. Burgess        58     Vice President, Human Resources
Joseph F. Denniston, Jr.  44     Vice President, Operations
Bryn A. Fosburgh          42     Vice President and General Manager, 
                                      Engineering and Construction
Mark A. Harrington        49     Vice President, Strategy and Business 
                                      Development
John E. Huey              55     Treasurer
Irwin L. Kwatek           65     Vice President and General Counsel
Michael W. Lesyna         44     Vice President, Business Transformation
Bruce E. Peetz            53     Vice President, Advanced Technology and 
                                      Systems
Anup V. Singh             34     Vice President and Corporate Controller
Alan R. Townsend          56     Vice President and General Manager, 
                                      Field Solutions
Dennis L. Workman         60     Vice President and General Manager, 
                                      Component Technologies

Steven W. Berglund - Steven Berglund has served as president and chief executive
officer of Trimble since March 1999. Prior to joining Trimble,  Mr. Berglund was
president of Spectra Precision, a group within Spectra Physics AB, and a pioneer
in the  development of laser systems.  He spent 14 years at Spectra Physics in a
variety of senior leadership positions. In the early 1980s, Mr. Berglund spent a
number of years at Varian  Associates  in Palo Alto,  where he held a variety of
planning and  manufacturing  roles.  Mr.  Berglund began his career as a process
engineer at Eastman Kodak in Rochester,  New York. He attended the University of
Oslo and the  University  of  Minnesota  where he  received a B.S.  in  chemical
engineering  in 1974.  He later  received  his  M.B.A.  from the  University  of
Rochester in New York in 1977.

Rajat Bahri - Rajat Bahri joined Trimble as Chief  Financial  Officer in January
2005.  Prior to  joining  Trimble,  Mr.  Bahri  served for more than 15 years in
various capacities within the financial  organization of several subsidiaries of
Kraft Foods, Inc. and General Foods Corporation. Most recently, he served as the
chief  financial  officer for Kraft Canada,  Inc. From June 2000 to June 2001 he
served as chief financial officer of Kraft Pizza Company. From 1997 to 2000, Mr.
Bahri was Operations Controller for Kraft Jacobs Suchard Europe. Mr. Bahri holds
a Bachelor of Commerce from the  University of Delhi in 1985 and an M.B.A.  from
Duke University in 1987.

William C. Burgess - William  Burgess  joined  Trimble in August of 2000 as vice
president of Human  Resources.  Prior to joining  Trimble,  Mr. Burgess was vice
president of Human Resources and Management  Information Systems for Sonoma West
Holdings, Inc. From 1993 to 1997, he served as vice president of Human Resources
for Optical  Coating  Laboratory,  from 1990 to 1993, he established and managed
the human resources function at Teknekron  Communications Systems, and from 1985
to  1990  he  was  vice  president  of  Human   Resources  for  a  $25  billion,
35,000-employee segment of Asea Brown Boveri (ABB), a global technology company.
Mr.  Burgess  received a B.S.  from the  University  of Nebraska  and an M.S. in
organizational development from Pepperdine University.

Joseph F. Denniston,  Jr. - Joseph Denniston joined Trimble as vice president of
operations in April 2001, responsible for worldwide manufacturing,  distribution
and logistics.  Prior to Trimble,  Mr.  Denniston  worked for 3Com  Corporation.
During  his  14-year  tenure,  he  served  as vice  president  of  supply  chain
management  for the  Americas and held  several  positions in test  engineering,
manufacturing engineering and operations.  Previously at Sentry Schlumberger for
seven  years,  he  held  several  positions  including  production  engineering,
production  management  and test  engineering  over  six  years.  Mr.  Denniston
received a B.S. in electrical engineering technology from the Missouri Institute
of Technology  in 1981 and an M.S. in computer  science  engineering  from Santa
Clara University in 1990.

<page>

Bryn A. Fosburgh - Bryn Fosburgh  joined Trimble in 1994 as a technical  service
manager for surveying,  mining,  and  construction.  In 1997,  Mr.  Fosburgh was
appointed  director of development  for the Company's land survey  business unit
where he oversaw the  development of field and office  software that enabled the
interoperability of Trimble survey products.  From October 1999 to July 2002, he
served as division  vice  president of survey and  infrastructure.  From 2002 to
2005, Mr.  Fosburgh  served as vice  president and general  manager of Trimble's
Geomatics and Engineering (G&E) business area, with  responsibility  for all the
division-level   activities   associated   with   survey,   construction,    and
infrastructure  solutions.  In January 2005, he was appointed vice president and
general manager of the Engineering and Construction Division.  Prior to Trimble,
he  was a  civil  engineer  with  the  Wisconsin  Department  of  Transportation
responsible for coordinating the planning,  data acquisition,  and data analysis
for statewide GPS surveying  projects in support of  transportation  improvement
projects.  He has  also  held  various  engineering,  research  and  operational
positions for the U.S. Army Corps of Engineers and Defense Mapping  Agency.  Mr.
Fosburgh  received a B.S. in geology from the  University  of Wisconsin in Green
Bay in 1985 and an M.S. in civil engineering from Purdue University in 1989.

Mark A.  Harrington  - Mark  Harrington  joined  Trimble in January 2004 as vice
president of strategy and business  development.  Prior to joining Trimble,  Mr.
Harrington served as vice president of finance at Finisar  Corporation and chief
financial officer for both Cielo Communications, Inc. and Vixel Corporation. His
experience  also  includes  11 years at  Spectra-Physics  where he  served  in a
variety of roles including vice president of finance for Spectra-Physics Lasers,
Inc. and vice  president  of finance for  Spectra-Physics  Analytical,  Inc. Mr.
Harrington began his career at Varian  Associates,  Inc. where he held a variety
of  management  and  individual  positions  in finance,  operations  and IT. Mr.
Harrington  received his B.S. in Business  Administration from the University of
Nebraska-Lincoln.

John E. Huey - John 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  and Minerals  Corporation  (formerly  Kaiser
Refractories),  and thirteen years with Kaiser Aluminum and 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.

Irwin L. Kwatek - Irwin Kwatek has served as vice president and general  counsel
of Trimble since November 2000.  Prior to joining  Trimble,  Mr. Kwatek was vice
president and general counsel of Tickets.com, a ticketing service provider, from
May 1999 to November 2000.  Prior to Tickets.com,  he was engaged in the private
practice  of law for more than six years.  During his  career,  he 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.

Michael W. Lesyna  -Michael  Lesyna  joined  Trimble in  September  1999 as vice
president of strategic  marketing.  In September  2000,  he was  appointed  vice
president and general manager of the Mobile  Solutions  Division.  In July 2004,
Lesyna  was  appointed  vice  president  of  Business  Transformation.  In  this
cross-divisional  role he focuses on driving  operational  improvements based on
the marketing,  sales and distribution  channel strategies of Trimble's business
segments.  The scope of his work includes  tailored  business  prioritization as
well as lean manufacturing and lean overhead  principles.  Prior to Trimble, Mr.
Lesyna spent six years at Booz Allen & Hamilton where he most recently served as
a principal in the operations  management group. Prior to Booz Allen & Hamilton,
Mr. Lesyna held a variety of engineering  positions at Allied Signal  Aerospace.
Mr.  Lesyna  received  his M.B.A.,  as well as an M.S.  and B.S.  in  mechanical
engineering from Stanford University.

Bruce E. Peetz - Bruce Peetz has served as vice president of Advanced Technology
and  Systems  since 1998 and has been with  Trimble  for 15 years.  From 1996 to
1998,  Mr.  Peetz  served as general  manager of the Survey  Business.  Prior to
joining  Trimble,   Mr.  Peetz  was  a  research  and  development   manager  at
Hewlett-Packard  for 10  years.  Mr.  Peetz  received  his  B.S.  in  electrical
engineering   from   Massachusetts   Institute  of   Technology   in  Cambridge,
Massachusetts in 1973.

Anup V.  Singh  - Anup  Singh  joined  Trimble  in  December  2001 as  corporate
controller.  In  August  2004 he was  appointed  vice  president  and  corporate
controller.  Prior to joining Trimble,  Mr. Singh was with Excite@Home from July
1999 to December 2001.  During his tenure at Excite@Home,  he held the positions
of  senior  director  of  Corporate   Financial   Planning  and  Analysis,   and
international  controller.  Before  Excite@Home,  Mr. Singh also worked for 3Com

<page>

Corporation  from December 1997 to July 1999, and Ernst & Young LLP in San Jose,
California and London,  England. Mr. Singh received his B.A. in 1991 and M.A. in
1995 in economics and management  science from Cambridge  University in England.
He is also a chartered  accountant and was admitted as a member of the Institute
of Chartered Accountants in England and Wales in 1994.

Alan R.  Townsend - Alan  Townsend  has  served as vice  president  and  general
manager of the Field  Solutions  business area since November 2001. From 1995 to
2001, Mr.  Townsend was general  manager of Mapping and GIS. Mr. Townsend joined
Trimble in 1991 as the manager of Trimble  Navigation  New Zealand Ltd. Prior to
Trimble,  Mr. Townsend held a variety of technical and senior  management  roles
within the Datacom Group of companies in New Zealand including managing director
of Datacom Software  Research Ltd. from 1986 to 1991. In addition,  Mr. Townsend
is a director of IT Capital Ltd., a venture  capital  company based in Auckland,
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.S.c in economics from the University of Canterbury in 1970.

Dennis L.  Workman - Dennis  Workman  has served as vice  president  and general
manager of Trimble's Component  Technologies  segment since September 1999. From
1998 to 1999, Mr. Workman was senior director and chief technical officer of the
newly formed Mobile and Timing  Technologies  (MTT) business group, also serving
as general  manager of Trimble's  Automotive  and Timing group.  In 1997, he was
director of  engineering  for  Software & Component  Technologies.  Mr.  Workman
joined Trimble in 1995 as director of the newly created Timing vertical  market.
Prior to Trimble, Mr. Workman held various  senior-level  technical positions at
Datum Inc.  During his nine year tenure at Datum,  he held the  position of CTO.
Mr. Workman  received a B.S. in mathematics  and physics from St. Mary's College
in 1967 and an M.S. in electrical  engineering from the Massachusetts  Institute
of Technology in 1969.



<PAGE>



I
tem 2            Properties

The  following  table sets forth the  significant  real  property that we own or
lease:


<table>
<caption>
                                                              Size in
Location                      Segment(s) served               sq. feet     Commitment
--------                      -----------------               --------     ----------
<s>                           <c>                             <c>         <c>            
Sunnyvale, California          All                             150,000     Leased, expiring 2005
                                                                           4 buildings
Huber Heights (Dayton), Ohio   Engineering & Construction,     150,000     Owned, no encumbrances
                               Field Solutions
                                                               57,200      Leased, expiring in 2011
                               Distribution                    35,600      Leased, month to month

Westminster, Colorado          Engineering & Construction,     73,000      Leased, expiring 2006
                               Field Solutions                             2 buildings

Corvallis, Oregon              Engineering & Construction      20,000      Owned, no encumbrances
                                                               21,000      Leased, expiring 2006

Richmond Hill, Canada          Portfolio Technologies          50,200      Leased, expiring 2007

Danderyd, Sweden               Engineering & Construction      93,900      Leased, expiring 2005

Christchurch, New Zealand      Engineering & Construction,     65,000      Leased, expiring 2010
                               Mobile Solutions, Field                     2 buildings
                               Solutions                                   

Jena, Germany                  Engineering & Construction      28,700      Leased, no expiration date
                                                                           12 months notice

Kaiserslautern, Germany        Engineering & Construction      26,000      Leased, expiring 2005

Raunheim, Germany              Sales                           28,700      Leased, expiring 2011

</table>


In addition, we lease a number of smaller offices around the world primarily for
sales functions.  For financial  information regarding obligations under leases,
see Note 10 of the Notes to the Consolidated Financial Statements.

* We believe that our facilities  are adequate to support  current and near-term
operations.



Item 3            Legal Proceedings

* We are from time to time a party to disputes or  litigation  incidental to our
business.  We believe that our ultimate  liability as a result of such disputes,
if any,  would not be  material to our overall  financial  position,  results of
operations, or liquidity.



Item 4            Submission of Matters to a Vote of Security Holders

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of 2004.



<PAGE>



                                     PART II


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


On January 22,  2004,  our Board of  Directors  approved a 3-for-2  split of all
outstanding shares of our common stock, payable March 4, 2004 to stockholders of
record on February 17, 2004. All shares and per share information  presented has
been adjusted to reflect the stock split on a retroactive  basis for all periods
presented.

Our  common  stock is traded on the  NASDAQ  National  Market  under the  symbol
"TRMB." The table below sets forth,  during the periods indicated,  the high and
low per share  sale  prices  for our  common  stock as  reported  on the  NASDAQ
National Market.

                                            2004                 2003
                                        Sales Price           Sales Price
                 Quarter Ended         High      Low         High      Low
                 -------------         ----      ---         ----      ---
                 First quarter         $28.78    $20.15    $14.17     $8.68
                 Second quarter         29.50     22.43     18.50     12.43
                 Third quarter          32.16     21.55     19.57     14.97
                 Fourth quarter         34.45     24.56     25.60     13.49

As of December 31, 2004, there were approximately 1,075 holders of record of our
common stock.

Dividend Policy

We have not  declared or paid any cash  dividends on our common stock during any
period for which financial information is provided in this Annual Report on Form
10-K.  At this time, we intend to retain  future  earnings,  if any, to fund the
development  and growth of our  business and do not  anticipate  paying any cash
dividends on our common stock in the foreseeable future.

We are allowed to pay dividends and repurchase  shares of our common stock up to
25% of net income in the previous  fiscal year,  under the existing terms of our
credit facilities.

Equity Compensation Plan Information

The  following  table sets forth,  as of December 31, 2004,  the total number of
securities  outstanding  under our stock  option  plans,  the  weighted  average
exercise  price of such options,  and the number of options  available for grant
under  such  plans.  See  Note 15 of the  Notes  to the  Consolidated  Financial
Statements for a summary of our plans.


<table>
<caption>

Plan Category               Number of securities to   Weighted average exercise    Number of securities remaining
                            be issued upon exercise      price of outstanding       available for future issuance
                            of outstanding options,     options, warrants and      under equity compensation plans
                              warrants and rights               rights             (excluding securities reflected
                               (a) (b) (c)                                                   in column (a))
                                      
<s>                            <c>                          <c>                           <c>
Equity compensation plans
approved by security
holders:

Stock Option Plans ....         6,720,631                    $16.10                        2,275,485

Equity compensation plans
   not approved by
   security holders...

Total  .....................    6,720,631                    $16.10                        2,275,485
</table>




<PAGE>



Item 6.  Selected Financial Data

The following selected consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations"  and  our  consolidated   financial  statements  and  related  notes
appearing   elsewhere  in  this  annual  report.   Historical  results  are  not
necessarily indicative of future results. In particular,  because the results of
operations and financial  condition  related to our acquisitions are included in
our  Consolidated  Statements  of Income and  Consolidated  Balance  Sheets data
commencing on those respective acquisition dates,  comparisons of our results of
operations and financial  condition for periods prior to and subsequent to those
acquisitions are not indicative of future results.



<table>
<caption>
                                        
                                              December 31,   January 2,     January 3,  December 28,    December 29,
Fiscal Years Ended                                2004          2004         2003          2001            2000
------------------                                ----          ----         ----          ----            ----
(Dollar in thousands, except per share data)

<s>                                         <c>            <c>           <c>            <c>           <c>      
Revenue                                      $     668,808  $    540,903  $     466,602  $    475,292  $     369,798

Gross margin                                 $     324,810  $    268,030  $     234,432  $    237,235  $     196,561
Gross margin percentage                                49%           50%            50%           50%            53%

Income (loss) from continuing operations (1) $      67,680  $     38,485  $      10,324  $   (23,492)  $      14,185
Gain on disposal of discontinued operations
   (net of tax)                              $           -  $          -  $           -  $        613  $           -

Net income (loss)                            $      67,680  $     38,485  $      10,324  $   (22,879)  $      14,185
Per common share:
Income (loss) from continuing operations

  - Basic                                    $        1.32  $       0.81  $        0.24  $     (0.63)  $        0.40

  - Diluted                                  $        1.23  $       0.77  $        0.24  $     (0.63)  $        0.37
Gain on disposal of discontinued operations
   (net of tax)

  - Basic                                    $           -  $          -  $           -  $       0.01  $           -

  - Diluted                                  $           -  $          -  $           -  $       0.01  $           -
Net income (loss)

  - Basic                                    $        1.32  $       0.81  $        0.24  $     (0.62)  $        0.40

  - Diluted                                  $        1.23  $       0.77  $        0.24  $     (0.62)  $        0.37
Shares used in calculating basic earnings
   per share                                        51,163        47,505         42,860        37,091         35,402
Shares used in calculating diluted earnings
   per share                                        54,948        50,012         43,578        37,091         38,964
Cash dividends per share                     $           -  $          -  $           -  $          -  $           -

Total assets                                 $     653,978  $    552,602  $     447,704  $    425,475  $     498,506
Non-current portion of long term debt and
   other liabilities                         $      38,226  $     85,880  $     114,051  $    131,759  $     143,553
</table>



(1)  We have significant  intangible  assets on our Consolidated  Balance Sheets
     that  include   goodwill  and  other  purchased   intangibles   related  to
     acquisitions.  At the  beginning  of fiscal 2002,  we adopted  Statement of
     Financial Accounting Standards No. 141 ("SFAS 141"), Business Combinations,
     and No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). Application
     of the  non-amortization  provisions  of  SFAS  142  significantly  reduced
     amortization expense of purchased intangibles and goodwill to approximately
     $8.3  million  for the fiscal  year 2002 from $29.4  million in fiscal year
     2001.

(2)  We have  reclassified  deferred  revenues  previously  included in accounts
     receivable,  net to the  liabilities  section in the  Consolidated  Balance
     Sheets in fiscal year 2004.  All prior periods have been changed to reflect
     this reclassification.





<PAGE>



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

The following  discussion  should be read in conjunction  with the  consolidated
financial  statements and the related notes. The following  discussion  contains
forward-looking  statements that reflect our plans,  estimates and beliefs.  Our
actual   results   could  differ   materially   from  those   discussed  in  the
forward-looking  statements.  Factors  that could cause or  contribute  to these
differences  include,  but are not limited to, those  discussed  below and those
listed under "Risks and Uncertainties."


EXECUTIVE LEVEL OVERVIEW

Trimble's  foundation  remains  positioning  technology.  We have augmented this
technology  with wireless  communication  and software  capabilities in order to
enable us to participate in a wider number of markets and to play a more central
role in those markets. Our efforts to market these technologies can generally be
characterized  as falling  into the  categories  of either  end user  markets or
component markets. The Engineering and Construction, Field Solutions, and Mobile
Solutions  segments  can be  broadly  described  as end  user  markets  and  the
Component  Technologies and Portfolio  Technologies segments can be described as
components markets. In the end user markets we provide a value added solution to
the end user.  Typically  this  requires  a  solution  that  includes a hardware
platform,  significant applications software, and substantial levels of customer
support. In the components businesses, we typically sell to another company that
adds significant value and brings the solution to the end user.

The segments constituting the end user, solutions  activities,  make up over 80%
of our revenue.  The critical success factors in these businesses  center around
attaining a significant  understanding  of the end users'  needs,  applying that
knowledge to create highly innovative products,  integrating those products into
an  effective  system,  and  establishing  a  proficient   global,   third-party
distribution.

The components  businesses  require different  characteristics to be successful.
The customer is typically an OEM, system  integrator,  or other third party that
integrates our components  into a system.  To satisfy this customer  group,  our
focus is on price,  product  functionality,  and  quality.  With recent  product
introductions  we have begun to add higher  functionality  into our  products in
order to provide  greater value and  potentially  capture higher average selling
prices for our offerings.  For example,  our TrimTrac product integrates GPS and
GSM  cellular   technologies  into  a  fully  functional   location  device.  It
establishes a new asset tracking or security  capability at an aggressive  price
point  and  opens up a new  class  of  customers  and  applications  which  were
previously not available to us.

During 2004 we continued  to execute our strategy  with a series of actions that
can be summarized in four categories.

Reinforcing our position in existing markets

Generally,  we believe that our markets provide us with additional,  substantial
potential for  substituting our technology for traditional  methods.  In 2004 we
continued to develop new products and to strengthen our distribution channels to
realize these  opportunities.  The acquisitions of GeoNav and TracerNET provided
us with additional software capability and applications  knowledge.  A number of
new products, such as the Easy Guide Plus, strengthened our competitive position
and  created  new value for the user.  The first full year of  operation  of our
joint  venture  with Nikon  proved  successful  in  extending  our  position  in
surveying instruments.

Extend our position in existing markets through new product categories

We are  utilizing the strength of the Trimble brand in our markets to expand our
revenues by bringing  new  products to existing  users.  A 2004  example was the
introduction  of  asset  and  fleet  management  services  to  the  construction
industry.

Bring existing technology to new markets

We continue to  reinforce  our  position in  existing  markets,  and  positioned
ourselves  in newer  markets  that will  serve as  important  sources  of future
growth.  Our  efforts in China,  India,  Russia,  Korea and  Eastern  Europe all
reflected improving financial results, with the promise of more in the future.

<page>

Pioneer completely new markets

In 2004 we introduced the TrimTrac product and Trimble  Outdoors.  Both products
embed new feature  sets and are  intended to address  markets not  traditionally
served by Trimble.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our accounting  policies are more fully  described in Note 2 of the Notes to the
Consolidated  Financial Statements.  The preparation of financial statements and
related disclosures in conformity with accounting  principles generally accepted
in the United States requires us to make judgments,  assumptions,  and estimates
that affect the amounts  reported in the Consolidated  Financial  Statements and
accompanying  Notes to the Consolidated  Financial  Statements.  We consider the
accounting polices described below to be our critical accounting polices.  These
critical   accounting   policies  are  impacted   significantly   by  judgments,
assumptions, and estimates used in the preparation of the Consolidated Financial
Statements, and actual results could differ materially from the amounts reported
based on these policies.

Revenue Recognition

We recognize product revenue when persuasive  evidence of an arrangement exists,
delivery has occurred,  the fee is fixed or determinable,  and collectibility is
reasonably  assured.  In  instances  where  final  acceptance  of the product is
specified  by the  customer  or is  uncertain,  revenue  is  deferred  until all
acceptance  criteria have been met. Revenue is reduced by a sales return reserve
as described under "Allowance for Doubtful Accounts and Sales Returns."

Revenue from purchased  extended warranty and support agreements is 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,  provided  we had no
remaining obligations.

Contracts  and customer  purchase  orders are  generally  used to determine  the
existence of an arrangement.  Shipping documents and customer  acceptance,  when
applicable,  are used to verify delivery.  We assess whether the fee is fixed or
determinable  based on the payment terms  associated  with the  transaction  and
whether  the  sales  price  is  subject  to  refund  or  adjustment.  We  assess
collectibility  based  primarily  on the  creditworthiness  of the  customer  as
determined  by credit  checks and analysis,  as well as the  customer's  payment
history.

Our shipment terms for US orders,  and  international  orders fulfilled from our
European  distribution  center are typically FCA (Free Carrier)  shipping point,
except   certain  sales  to  US  government   agencies  which  are  shipped  FOB
destination.  FCA shipping point means that we fulfill the obligation to deliver
when the goods are handed over,  cleared for export,  and into the charge of the
carrier  named by the buyer at the named place or point.  If no precise point is
indicated by the buyer, we may choose within the place or range stipulated where
the carrier will take the goods into carrier's charge.

Other  international  orders are  shipped  FOB  destination,  which  means these
international  orders  are not  recognized  as  revenue  until  the  product  is
delivered  and title has  transferred  to the buyer or FCA shipping  point.  FOB
destination  means  that we bear all  costs  and  risks of loss or damage to the
goods up to that point.

Revenue to distributors and resellers is recognized upon delivery,  assuming all
other criteria for revenue recognition have been met. Distributors and resellers
do not have a right of return.

When a sale involves multiple  elements,  the entire fee from the arrangement is
allocated  to each  respective  element  based on its  relative  fair  value and
recognized  when  revenue  recognition  criteria  for each  element are met. The
amount of product revenue  allocated to an individual  element is limited to the
lesser of its relative  fair value or the amount not  contingent on our delivery
of other elements under the  arrangement,  regardless of the  probability of our
performance.

Our software  arrangements  generally consist of a license fee and post-contract
customer support (PCS). We have established  vendor-specific  objective evidence
(VSOE) of fair  value  for our PCS  contracts  based on the  renewal  rate.  The
remaining  value of the  software  arrangement  is  allocated to the license fee
using the residual method, and revenue is primarily recognized when the software
has been delivered and there are no remaining  obligations.  Revenue from PCS is
recognized ratably over the term of the PCS agreement.

<page>

Allowance for Doubtful Accounts and Sales Returns

Our accounts  receivable  balance,  net of allowance for doubtful accounts,  was
$123.9  million as of December  31,  2004,  compared  with $104.6  million as of
January 2, 2004. The allowance for doubtful accounts as of December 31, 2004 was
$9.0 million, compared with $10.0 million as of January 2, 2004. We evaluate the
collectibility  of our trade  accounts  receivable  based on a number of factors
such as age of the accounts  receivable  balances,  credit  quality,  historical
experience, and current economic conditions that may affect a customer's ability
to pay. In circumstances where we are aware of a specific  customer's  inability
to meet its financial  obligations to us, a specific  allowance for bad debts is
estimated and recorded which reduces the recognized  receivable to the estimated
amount we believe will ultimately be collected. In addition to specific customer
identification  of potential bad debts,  bad debt charges are recorded  based on
our  recent  past  loss  history  and an  overall  assessment  of past due trade
accounts receivable amounts outstanding.

A reserve for sales returns is established based on historical trends in product
return rates  experienced  in the ordinary  course of business.  The reserve for
sales  returns as of December 31, 2004 and January 2, 2004 included $2.2 million
and $3.3 million,  respectively, for estimated future returns that were recorded
as a reduction of our accounts  receivable  and  revenue.  If the actual  future
returns were to deviate from the  historical  data on which the reserve had been
established, our revenue could be adversely affected.

Inventory Valuation

Our inventories, net balance was $87.7 million as of December 31, 2004, compared
with  $70.8  million  as of January 2,  2004.  Our  inventory  allowances  as of
December 31, 2004 were $26.2 million,  compared with $25.9 million as of January
2, 2004.  Our inventory is recorded at the lower of standard cost or market (net
realizable  value).  We generally use a standard cost accounting system to value
inventory and these standards are reviewed a minimum of once a year and multiple
times a year in our most active  manufacturing  plants.  We adjust the inventory
value based on estimated excess and obsolete inventories determined primarily by
future demand  forecasts.  If actual future demand or market conditions are less
favorable than those projected by us,  additional  inventory  write-downs may be
required.

Income Taxes

Income taxes are accounted for under the liability  method whereby  deferred tax
asset or liability  account  balances are  calculated  at the balance sheet date
using current tax laws and rates in effect for the year in which the differences
are  expected to affect  taxable  income.  A valuation  allowance is recorded to
reduce the carrying amounts of deferred tax assets if it is more likely than not
that such assets will not be realized.

The  valuation  allowance  decreased  by $21.8  million in fiscal 2004 and $13.1
million in fiscal 2003.  Approximately $8 million of the valuation  allowance at
December  31,  2004 and $14.1  million  at  January  2, 2004  relates to the tax
benefit of stock option deductions, which will be credited to equity if and when
realized.  In evaluating the need for a valuation allowance,  we consider future
taxable  income,  resolution of tax  uncertainties  and prudent and feasible tax
planning strategies.

Goodwill Impairment

Goodwill  as of  December  31,  2004 was $259.5  million,  compared  with $241.4
million as of January 2, 2004. We performed goodwill impairment tests at the end
of the fiscal third quarter of 2004 and 2003 for each  reporting  unit and found
there was no  impairment  of our  goodwill.  We will  continue to  evaluate  our
goodwill  for  impairment  on an annual  basis at the end of each  fiscal  third
quarter  and  whenever  events and  changes in  circumstances  suggest  that the
carrying amount may not be recoverable.

For  goodwill,  the annual  impairment  evaluation  includes a comparison of the
carrying  value of the reporting  unit  (including  goodwill) to that  reporting
unit's fair value.  If the  reporting  unit's  estimated  fair value exceeds the
reporting unit's carrying value, no impairment of goodwill  exists.  If the fair
value of the reporting unit does not exceed the unit's carrying  value,  then an
additional  analysis is performed  to allocate  the fair value of the  reporting
unit to all of the assets and  liabilities of that unit as if that unit had been
acquired  in a  business  combination  and the  fair  value  of the unit was the
purchase  price.  If the excess of the fair value of the reporting unit over the

<page>

fair value of the identifiable  assets and liabilities is less than the carrying
value  of the  unit's  goodwill,  an  impairment  charge  is  recorded  for  the
difference.

We cannot predict the  occurrence of certain future events that might  adversely
affect the reported value of goodwill.  Such events include, but are not limited
to, strategic decisions made in response to economic and competitive conditions,
the impact of the  economic  environment  on our  customer  base,  or a material
negative change in our relationships with significant customers.

Accounting for Long-Lived Assets Including Intangibles Subject to Amortization

Depreciation  and  amortization  of our  long-lived  assets  is  provided  using
straight-line   methods  over  their   estimated   useful   lives.   Changes  in
circumstances  such as the  passage  of new  laws  or  changes  in  regulations,
technological advances, changes to our business model, or changes in the capital
strategy  could  result  in the  actual  useful  lives  differing  from  initial
estimates.  In  those  cases  where  we  determine  that  the  useful  life of a
long-lived  asset should be revised,  we will  depreciate  the net book value in
excess of the estimated  residual value over its revised  remaining useful life.
Factors  such as changes in the planned use of  equipment,  customer  attrition,
contractual  amendments,  or mandated  regulatory  requirements  could result in
shortened useful lives.

Long-lived assets and asset groups are evaluated for impairment  whenever events
or changes in circumstances indicate that the carrying amount of such assets may
not be recoverable.  The estimated future cash flows are based upon, among other
things,  assumptions about expected future operating  performance and may differ
from actual cash flows.  Long-lived  assets evaluated for impairment are grouped
with other  assets to the  lowest  level for which  identifiable  cash flows are
largely independent of the cash flows of other groups of assets and liabilities.
If the sum of the projected undiscounted cash flows (excluding interest) is less
than the  carrying  value of the assets,  the assets will be written down to the
estimated fair value in the period in which the determination is made.

Warranty Costs

The liability for product  warranties  was $6.4 million as of December 31, 2004,
compared  with $5.1  million as of January 2, 2004.  (See Note 2 of the Notes to
the  Consolidated  Financial  Statements for further  information  regarding our
warranty liability.) The warranty periods for our products are generally between
one and three years.  Selected  military  programs may require extended warranty
periods  up to 5.5  years,  certain  TDS  products  have a five  year or  90-day
warranty period, and certain Nikon products have a five year warranty period. We
accrue  for  warranty  costs as part of our cost of  sales  based on  associated
material  costs,  technical  support  labor costs,  and costs  incurred by third
parties  performing  warranty  work on our behalf.  Our expected  future cost is
primarily  estimated  based  upon  historical  trends in the  volume of  product
returns  within  the  warranty  period  and the cost to  repair or  replace  the
equipment.

While we engage in extensive  product quality programs and processes,  including
actively monitoring and evaluating the quality of our component  suppliers,  our
warranty  obligation is affected by product failure rates,  material usage,  and
service delivery costs incurred in correcting a product  failure.  Should actual
product failure rates, material usage, or service delivery costs differ from our
estimates,  revisions to the estimated warranty accrual and related costs may be
required.

Stock Compensation

We apply  Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock
Issued to Employees" (APB 25) and related  interpretations in accounting for our
stock option plans and stock  purchase  plan.  Accordingly,  we do not recognize
compensation  cost for stock  options  granted at a price  equal to fair  market
value. Note 15 of the Notes to the Consolidated  Financial  Statements describes
the  plans we  operate,  and Note 2 of the Notes to the  Consolidated  Financial
Statements  contains a summary of the pro forma  effects to reported  net income
and earnings per share for fiscal 2004,  2003,  and 2002 as if we had elected to
recognize  compensation  cost based on the fair value of the options  granted at
grant date.



<PAGE>


Investment in Joint Ventures

We have  adopted the equity  method of  accounting  for our  investments  in the
Caterpillar and Nikon joint ventures.  This requires that we record our share of
the joint  ventures'  profits or losses in a given fiscal period.  See Note 5 of
the Notes to the Consolidated Financial Statements for joint venture accounting.

Upon the formation of our Caterpillar joint venture in April 2002, we received a
cash  distribution  of  $11.0  million.  We  have  elected  to  treat  the  cash
distribution  as a deferred gain,  being amortized to the extent that losses are
attributable  from  the  Caterpillar  joint  venture  under  the  equity  method
described  above.  When and if the joint  venture is profitable on a sustainable
basis and future operating losses are not anticipated, then we will recognize as
a gain, the portion of the $11.0 million,  which is  unamortized.  To the extent
that it is possible that we will have any future-funding  obligation relating to
the  Caterpillar  joint venture,  then the relevant  amount of the $11.0 million
will be deferred  until such time that the funding  obligation no longer exists.
As of December 31, 2004, the balance of the  unamortized  deferred gain was $9.2
million.

RECENT BUSINESS DEVELOPMENTS

Trimble Outdoors

During the fourth  quarter of fiscal  2004,  we announced  our newest  business,
Trimble Outdoors.  Trimble Outdoors is a consumer business utilizing GPS enabled
cell phones to provide information for outdoor recreational activities.  Trimble
Outdoors performance is reported under our Portfolio segment.

GeoNav

* On July 5, 2004 we acquired GeoNav GmbH, a small provider of customized  field
data collection  solutions for the cadastral survey market in Europe.  We expect
the  acquisition to augment our capability for  localization  of our products in
Europe.  GeoNav's performance is reported under our Engineering and Construction
segment.

TracerNET Corporation

* On March 5, 2004 we acquired TracerNET  Corporation of Virginia, a provider of
wireless  fleet  management  solutions.  We expect the TracerNET  acquisition to
offer  more  diverse  and  complete  fleet  management  solutions.   TracerNET's
performance is reported under our Mobile Solutions segment.

Pacific Crest Corporation

* On January 10, 2005 we acquired  Pacific Crest  Corporation  of Santa Clara, a
supplier  of  wireless   data   communication   systems  for   positioning   and
environmental monitoring  applications.  We expect the Pacific Crest acquisition
to  further  enhance  our  wireless  data  communications  capabilities  in  the
Engineering and Construction business segment.

RESULTS OF OPERATIONS

Overview

The  following  table is a  breakdown  of revenue and  operating  income for the
periods  indicated  and  should  be  read  in  conjunction  with  the  narrative
descriptions below.

                                       December 31,    January 2,    January 3,
Fiscal Years Ended                        2004           2004          2003
------------------                        ----           ----          ----
(Dollars in thousands)

Total consolidated revenue             $ 668,808      $ 540,903     $ 466,602
Gross Margin                           $ 324,810      $ 268,030     $ 234,432
Total consolidated operating income    $ 117,405      $  83,586     $  62,320

<page>

Basis of Presentation

We have a 52-53 week fiscal year,  ending on the Friday  nearest to December 31,
which for fiscal 2004 was December  31,  2004.  Fiscal 2004 and fiscal 2003 were
52-week  years and fiscal 2002 a 53-week  year. As a result of the extra week in
fiscal 2002, year-over-year results are not exactly comparable. Thus, due to the
inherent  nature of adopting a 52-53 week fiscal year,  the  Company,  analysts,
shareholders, investors, and others will have to make appropriate adjustments to
any analysis performed when comparing our activities and results in fiscal years
that contain 53 weeks to those that contain the standard 52 weeks.

Impact of Weaker US Dollar on Operating Results in Fiscal 2004

The  depreciation of the US dollar versus major European  currencies  positively
impacted  revenues by  approximately  $12.6 million in fiscal 2004 when compared
with  rates  used  throughout  fiscal  2003.  As a  result  of  our  significant
manufacturing,  distribution,  research and  development,  and selling  expenses
incurred  outside  of the US,  the  weaker US  dollar  negatively  impacted  our
operating income by approximately $3.0 million in fiscal 2004 when compared with
rates used throughout fiscal 2003.

Revenue

In fiscal 2004,  total  revenue  increased by $127.9  million or 23.6% to $668.8
million  from $540.9  million in fiscal  2003.  The  increase in fiscal 2004 was
primarily due to stronger  performances in most of our operating segments driven
by the new product  offerings and increased  penetration in the markets we serve
(primarily   Engineering  and  Construction  and  Field   Solutions),   expanded
distribution  and  selective   acquisitions   (primarily  Mobile  Solutions  and
Portfolio Technologies),  as well the positive impact of the weaker US dollar on
revenues generated in foreign  currencies,  primarily the Euro. Total revenue in
fiscal 2003  increased by $74.3  million or 15.9% to $540.9  million from $466.6
million in fiscal  2002.  This  increase was  primarily  due to the same factors
outlined  above  as  all  of  our  operating  segments   demonstrated   stronger
performances versus prior periods.

* Total revenue outside the United States comprised  approximately  50% in 2004,
51% in 2003,  and 49% in 2002.  During  the 2004  fiscal  year,  North and South
America represented 57%, Europe, the Middle East and Africa represented 30%, and
Asia  represented  13% of total  revenues.  In fiscal  2004,  the United  States
comprised  approximately  50% of total  revenues.  We  anticipate  that sales to
international  customers  will continue to account for a significant  portion of
our revenue.

* No single  customer  accounted for 10% or more of our total revenues in fiscal
2004,  2003,  and 2002.  It is  possible,  however,  that in future  periods the
failure  of one or more large  customers  to  purchase  products  in  quantities
anticipated by us may adversely affect the results of operations.

Gross Margin

Our gross  margin  varies  due to a number of  factors  including  product  mix,
pricing,  distribution  channel  used,  the effects of production  volumes,  new
product  start-up costs, and foreign  currency  translations.  Gross margin as a
percentage of total revenues was 48.6 % in fiscal 2004 and 49.6% in fiscal 2003.
The decrease in gross margin  percentage  for fiscal 2004,  compared with fiscal
2003,  was due to changes in the mix of products  sold,  principally  related to
increased sales of lower margin Nikon-branded survey and construction  products,
our  agriculture  products,  pricing  pressure  in  our  Component  Technologies
business  (which  typically  demonstrates  increased  unit volumes  coupled with
declining  unit  prices),  the  impact  of the  weaker  US  dollar on our non US
manufacturing, and distribution costs.

Gross  margin as a  percentage  of total  revenues  was 49.6% in fiscal 2003 and
50.2% in fiscal 2002. The slight decrease in gross margin  percentage for fiscal
2003,  compared with fiscal 2002, was due primarily to the  introduction  of the
Nikon products in the third quarter,  which was responsible for a margin decline
of  approximately  0.8%. This was partially offset by stronger sales of handheld
survey products,  GIS, wireless  infrastructure,  survey products as well as our
ongoing focus on product cost reductions.

* Because  of  potential  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,

<page>

current level gross margins  cannot be assured.  In addition,  should the global
economic  conditions  deteriorate,  gross  margin  could  be  further  adversely
impacted.

Operating Income

Operating  income as a  percentage  of total  revenue  was 12.8% in fiscal  2004
compared to 10% in fiscal 2003 and 7.2% in fiscal  2002.  The increase is driven
by  disciplined  management  of operating  expenses and greater  leverage due to
revenue growth.  The operating  expenses  represented  35.8% of total revenue in
fiscal 2004 as compared to 39.6% in fiscal 2003.

Results by Segment

To achieve distribution, marketing, production, and technology advantages in our
targeted  markets,  we manage our  operations  in the following  five  segments:
Engineering and Construction,  Field Solutions,  Component Technologies,  Mobile
Solutions,  and Portfolio  Technologies.  Operating income (loss) is net revenue
less operating expenses,  excluding general corporate expenses,  amortization of
purchased intangibles,  restructuring  charges,  non-operating income (expense),
and income taxes.

The following  table is a breakdown of revenue and  operating  income by segment
for the periods  indicated and should be read in conjunction  with the narrative
descriptions below.


<table>
<caption>
                                                                December 31,   January 2,       January 3,
Fiscal Years Ended                                                 2004           2004            2003
------------------                                                 ----           ----            ----
(Dollars in thousands)
<s>                                                            <c>            <c>              <c>    
Engineering and Construction
   Revenue                                                      $   440,478    $  367,058       $  319,615
   Segment revenue as a percent of total revenue                        66%           68%              68%
   Operating income                                                  79,505        60,664           53,453
   Operating income as a percent of segment revenue                     18%           17%              17%
Field Solutions
   Revenue                                                          105,591        79,879           67,259
   Segment revenue as a percent of total revenue                        16%           15%              14%
   Operating income                                                  25,151        14,500            9,676
   Operating income as a percent of segment revenue                     24%           18%              14%
Component Technologies
   Revenue                                                           65,522        64,193           59,755
   Segment revenue as a percent of total revenue                         9%           12%              13%
   Operating income                                                  13,880        16,560           10,673
   Operating income as a percent of segment revenue                     21%           26%              18%
Mobile Solutions
   Revenue                                                           23,531        12,981            8,486
   Revenue as a percent of total consolidated revenue                    4%            2%               2%
   Operating loss                                                   (5,997)       (6,452)         (12,039)
   Operating loss as a percent of segment revenue                     (25%)         (50%)           (142%)
Portfolio Technologies
   Revenue                                                           33,686        16,792           11,487
   Segment revenue as a percent of total revenue                         5%            3%               2%
   Operating income (loss)                                            4,866       (1,686)              557
   Operating income (loss) as a percent of segment revenue              14%         (10%)               5%
</table>




<PAGE>


A reconciliation  of our consolidated  segment  operating income to consolidated
income before income taxes follows:


<table>
<caption>
                                              January 31,     January 2,     January 3,
Fiscal Years Ended                               2004            2004           2003
------------------                               ----            ----           ----
(In thousands)
<s>                                           <c>           <c>             <c>      
Consolidated segment operating income          $ 117,405     $   83,586      $  62,320
Unallocated corporate expense                    (22,901)       (20,320)       (19,098)
Amortization of purchased intangible assets       (8,327)        (7,312)        (8,300)
Restructuring charges                               (552)        (2,019)        (1,099)
Non-operating expense, net                       (10,701)       (18,350)       (19,999)
                                                 -------        -------        ------- 
Consolidated income before income taxes        $  74,924     $   35,585      $  13,824
                                               =========     ==========      =========
</table>


Engineering and Construction

Engineering and  Construction  revenues  increased by $73.4 million or 20% while
segment  operating income increased by $18.8 million or 31.1% for fiscal 2004 as
compared  to fiscal  2003.  The  relatively  strong  environment  of fiscal 2003
continued  into fiscal 2004,  resulting in continued  robust  demand for survey,
machine  control,  and laser  products.  In addition,  the full year effects for
Nikon-branded products contributed to the year over year increase.  Targeted new
product introductions,  such as the 5500 Servo Driven Station, provided improved
market penetration.  The weaker US dollar also contributed to increased revenues
in this  operating  segment.  Operating  income  increased at a higher rate than
revenue growth due to greater operating leverage on expenses.

Engineering and Construction revenues increased by $47.4 million or 14.8% during
fiscal  2003 as  compared  to fiscal  2002.  Approximately  half of the  revenue
increase was driven by new product  introductions  and our  increased  marketing
efforts.  The remaining increase was split evenly between geographic  expansion,
especially in Asia and Russia,  and the impact of the weaker US dollar.  Segment
operating  income increased due to higher revenues that were partially offset by
increased  operating  expenses  outside the United States (largely driven by the
weaker US  dollar),  increased  research  and  development  spending  on certain
programs as we continue to invest in developing next generation technology,  and
lower margins earned on the sale of Nikon products.  Overall,  segment operating
income remained consistent at 17% of revenues.

Field Solutions

Field Solutions revenues increased by approximately $25.7 million or 32.2% while
segment  operating  income  increased by $10.7  million or 73.5% for fiscal year
2004 as compared to fiscal  2003.  Revenues  increased  primarily as a result of
higher  demand  for  both  automated  and  manual   guidance   products  in  the
agricultural  market. In particular,  revenues were enhanced by the introduction
of EZ-Guide(R) Plus.  We saw increases in our GIS product lines due to increases
in our dealer and  distributor  business.  Additionally,  programs  designed  to
expand our distribution channel by supplementing  adding value-added,  solutions
focused business partners to our traditional dealer profile were successful.  In
addition,  we saw  improved  results in Europe and  increased  opportunities  in
China.  Increases  in segment  operating  income  were  primarily  due to higher
revenues.

Field Solutions revenues increased by approximately $12.6 million or 18.8% while
segment operating income increased by $4.8 million or 49.9% for fiscal year 2003
as compared to fiscal  2002.  Revenues  were up year over year due to  continued
strong sales of the  GeoExplorer(R)  CE series handhelds  released at the end of
fiscal 2002,  and due to the expansion of our automatic  guidance  products onto
new agricultural vehicles.

Segment  operating  income increased in 2003 from the fiscal year 2002 primarily
due to higher revenues. This increase was partially offset by fractionally lower
gross  margins  and more  investment  in  research  and  development  and  sales
functions. This enabled the segment operating income to increase from 14% to 18%
of revenues.

<page>

Component Technologies

Component Technologies revenues increased by $1.3 million or 2.1%, while segment
operating  income decreased by $2.7 million or 16.2% for the fiscal year 2004 as
compared to fiscal 2003.  Revenues increased primarily due to higher demand from
vehicle  navigation and tracking  customers,  partially offset by the decline in
demand from wireless  infrastructure  customers.  The segment  operating  income
decrease was primarily due to pricing pressures from the embedded and in-vehicle
navigation  product lines, a less favorable product mix, and increased  spending
for development of new categories of products.

Component Technologies revenues increased by $4.4 million or 7.4%, while segment
operating  income increased by $5.9 million or 55.2% for the fiscal year 2003 as
compared to fiscal 2002. The increase in revenues was primarily due to increased
demand from our existing wireless  infrastructure  customers.  Segment operating
income increased from 18% to 26% of revenues.  The increase was primarily due to
a reduction in costs of goods sold due to the transfer of the  manufacturing  of
our products to China,  reduced costs of raw materials,  increased  revenues and
higher margins aided by favorable product mix.

Mobile Solutions

Mobile  Solutions  revenues  increased by $10.6  million or 81.3% in fiscal 2004
over  fiscal  2003 due  primarily  to  increases  sales  into  the  construction
materials market, higher dealer sales and a significant  enterprise sale. During
the first quarter of fiscal 2004, we completed the  acquisition  of TracerNET to
strengthen our presence in this segment.  The benefits of the  integration  were
not fully  reflected  until the fourth  quarter of fiscal 2004 and the full year
impact of these  activities  will not be realized  until  fiscal  2005.  Segment
operating loss decreased by $0.5 million or 7.1% in fiscal 2004 over fiscal 2003
due to increased revenues which was largely offset by increased expenses related
to the integration of the TracerNET acquisition.

Mobile Solutions  revenues  increased by $4.5 million or 53% in fiscal 2003 over
fiscal 2002 due  primarily to an increase in our  CrossCheck  product  sales and
higher fleet management  services  revenues as a result of an expanded  customer
base.  Segment  operating loss decreased by $5.6 million or 46.4% in fiscal 2003
over  fiscal  2002 due to  increased  revenues  and  lower  operating  expenses.
Operating  expenses  decreased by approximately  $3.0 million primarily due to a
reduction in outside services and our personnel related to the completion of our
Telvisant system.

Portfolio Technologies

Portfolio  Technologies  revenues  increased  by $16.9  million or 100.6%  while
segment  operating income increased by $6.6 million or 388.6% for fiscal 2004 as
compared to fiscal 2003.  The  increases in revenues and  operating  income were
primarily  due to the  inclusion of full year  results of Applanix,  acquired in
July 2003, and higher sales of our military and advanced systems products.

Portfolio  Technologies  revenues  increased  by $5.3  million  or 46.2% for the
fiscal year 2003 as compared to fiscal 2002. The increase in revenues was mostly
driven by the inclusion of revenue from Applanix  acquired in 2003, while offset
by  lower  revenue  of  military-related   products.  Segment  operating  income
decreased  by $2.2  million or 402.7% for fiscal 2003 as compared to fiscal 2002
due to weaker operating results from military products.

Research and Development,  Sales and Marketing,  and General and  Administrative
Expenses

The following table shows research and development ("R&D"), sales and marketing,
and general and  administrative  ("G&A")  expenses in absolute  dollars and as a
percentage of total net revenues for the fiscal years ended 2004,  2003 and 2002
and  should be read in  conjunction  with the  narrative  descriptions  of those
operating expenses below.


<table>
<caption>
                                    December 31,            January 2,             January 3,
Fiscal Years Ended                     2004                   2004                    2003
------------------                     ----                   ----                    ----
(In thousands)
<s>                              <c>                   <c>                     <c>  
Research and development          $  77,558    11%      $  67,641    13%        $  61,232     13%
Sales and marketing                 108,054    16%         97,870    18%           89,344     19%
General and administrative           44,694     7%         39,253     7%           40,634      9%
                                     ------     -          ------     -            ------      - 
                                  $ 230,306    34%      $ 204,764    38%        $ 191,210     41%
                                  ---------    --       ---------    --         ---------     -- 
</table>

<page>

Overall,  R&D, sales and  marketing,  and G&A increased by  approximately  $25.5
million in fiscal 2004  compared to fiscal 2003.  Incremental  expenses  arising
from acquisitions were approximately  $13.7 million and the impact of the weaker
US dollar on non US operating expenses were approximately $7.6 million.

Research  and  development  expenses  increased  by $9.9  million in fiscal 2004
compared to fiscal 2003  primarily  due to sustaining  engineering  expenses and
costs incurred related to new product development,  continued investment in next
generation technologies, and the effect of foreign currency fluctuations.

Research  and  development  expenses  increased  by $6.4  million in fiscal 2003
compared  to  fiscal  2002  due  to  continued  investment  in  next  generation
technology  primarily in the Engineering and Construction  segment, the weakness
of the US dollar versus major European and New Zealand currencies,  and also the
inclusion of the research  and  development  expenses  from  Applanix  after its
acquisition in July 2003.

*  Overall  spending  remained  relatively  constant  at  approximately  13%  of
revenues.  We expect to continue to devote  resources to the  development of new
products and the enhancement of existing products.  We believe that research and
development is critical to our strategic product development objectives and that
to leverage our leading  technology  and meet the changing  requirements  of our
customers,  we will need to fund investments in several development  projects in
parallel.

Sales and marketing  expenses increased by $10.2 million in fiscal 2004 compared
to fiscal 2003,  but decreased as a percent of total  revenues.  The majority of
the increase was due to the increase in revenue, promotional programs associated
with new  products,  and the foreign  exchange  impact on expenses in our non US
operations.

Sales and marketing  expenses  increased by $8.5 million in fiscal 2003 compared
to fiscal 2002 primarily due to higher  revenue,  increased sales efforts mostly
in emerging  geographic areas such as China and Russia, the impact of the weaker
US dollar in Europe,  and the inclusion of Applanix sales and marketing expenses
not applicable in the prior fiscal year.

* We intend to  continue  to focus and  expand our sales and  marketing  efforts
across all the  geographies  and  markets we serve in order to  increase  market
awareness  of  our  products  and  to  better  support  our  existing  customers
worldwide.  Our future growth will depend in part on the timely  development and
continued  viability of the markets in which we currently compete as well as our
ability to continue to identify and exploit new markets for our products.

General and  administrative  expenses  increased  by $5.4 million in fiscal 2004
compared to fiscal 2003  primarily  due to the  inclusion of G&A  expenses  from
acquisitions,  compliance  with  Sarbanes-Oxley,  and bad debt  expenses of $1.2
million.  Spending overall remained  relatively  constant at approximately 7% of
revenues.

General and administrative expenses in fiscal 2003 decreased by $1.4 million and
represented 7.3% of revenues  compared with 8.7% in fiscal 2002. In fiscal 2002,
we experienced  higher bad debt  expenses,  primarily due to the bankruptcy of a
large Japanese distributor. In addition, in fiscal 2003 we incurred $3.0 million
less in information  systems  expenses.  These  reductions were offset in fiscal
2003 by lower  sublease  income  received,  expenses  from  Applanix  after  the
acquisition in July 2003, and higher compensation costs.

Other Operating Expenses

Restructuring Charges

Restructuring  charges of $0.6  million,  $2.0  million,  and $1.1  million were
recorded  in fiscal  years  2004,  2003 and 2002,  respectively.  The charges in
fiscal 2004 were primarily  related to severance costs due to the realignment of
Trimble  Mobile  Solutions,  Inc.,  while charges in fiscal 2003 were  primarily
related to our Japanese office relocation due to the Nikon-Trimble joint venture
formation As a result of these actions, the headcount of the affected operations
decreased by 36, 77 and 49 in fiscal 2004, 2003, and 2002,  respectively.  As of
December 31, 2004,  the remaining  accrual  balance of $0.4 million is primarily
related to severance expected to be paid in fiscal 2005.



<PAGE>


Amortization of Purchased and Other Intangible Assets


<table>
<caption>
                                                   December 31,       January 2,       January 3,
Fiscal Years Ended                                     2004              2004             2003
------------------                                     ----              ----             ----
(in thousands)
<s>                                               <c>               <c>              <c>   
Amortization of purchased intangibles              $   8,327         $   7,312        $   8,300
Amortization of other intangible assets                  183               604              868
                                                         ---               ---              ---
Amortization of purchased and other intangible
   assets                                          $   8,510         $   7,916        $   9,168
                                                   ---------         ---------        ---------
</table>


Amortization  expense of purchased  and other  intangibles  represented  1.3% of
revenue in fiscal 2004,  having  increased $0.6 million from fiscal 2003 when it
represented 1.5% of revenue.

Amortization  expense of purchased  and other  intangibles  represented  1.5% of
revenue in fiscal  2003,  having  decreased by  approximately  $1.3 million from
fiscal 2002 when it represented  2% of revenue.  The decrease was due to certain
Spectra intangibles being fully amortized during fiscal 2003.

Non-operating Expense, Net

The following table shows non-operating  expense,  net for the periods indicated
and  should be read in  conjunction  with the  narrative  descriptions  of those
expenses below:


<table>
<caption>
                                             December 31,      January 2,     January 3,
Fiscal Years Ended                               2004             2004           2003
------------------                               ----             ----           ----
(in thousands)
<s>                                         <c>             <c>              <c>        
Interest income                              $      436      $      465       $     659
Interest expense                                 (3,888)        (11,938)        (14,710)
Foreign exchange loss                              (859)           (592)           (823)
Expenses for affiliated operations, net          (7,590)         (6,403)         (3,954)
Other income (expense)                            1,200             118          (1,171)
                                                  -----             ---          ------ 
Total non-operating expense, net             $  (10,701)      $ (18,350)      $ (19,999)
                                             ===========      ==========      ==========
</table>



Non-operating  expense,  net decreased by $7.6 million or 42% during fiscal 2004
as compared with fiscal 2003 primarily due to lower  interest  expense after the
repayment of the  principal  balance of a  subordinated  note in June 2003,  the
write  off of $2.3  million  of debt  issuance  costs  as a  result  of our debt
refinancing  in June  2003 and $1.3  million  related  to the  write  off of the
remaining  unamortized  portion  of  the  warrants  issued  to  Spectra  Physics
Holdings, Inc. The increases in expense for affiliated operations were primarily
due to our higher  construction  machine control revenues which led to increased
impact from the pricing effects of  transactions  between us and the Caterpillar
joint venture. (See Note 5 of the Notes to the Consolidated Financial Statements
for financial information  regarding joint ventures).  This was partially offset
by $1.1  million  related  to our share of profits  in the  Nikon-Trimble  joint
venture.  The increase in other income (expense) was primarily due to a net gain
related to the sale of an investment.

Non-operating expense, net decreased by $1.6 million or 8% during fiscal 2003 as
compared with fiscal 2002  primarily  due to a reduction in interest  expense of
$2.8 million  offset by an increase in expenses for affiliated  operations.  The
increase in expenses for affiliated operations is primarily due to the full year
impact  of  transfer  pricing  effects  on  transactions   between  us  and  our
Caterpillar  joint  venture,  which  commenced  operations  in  April  2002.  In
addition,  we recorded  approximately  $0.3 million relating to our share of the
losses in our Nikon joint venture established in 2003.

In fiscal 2003,  interest expense decreased by approximately $2.8 million due to
continued  debt  repayment  during  the  year of  approximately  $51.8  million,
combined  with the effect of lower  interest  rates.  Offsetting  the lower debt
interest,  during the year, we recorded  approximately  $3.6 million of interest
expense due to the write off of $2.3 million of unamortized  debt issuance costs
as a result  of our  debt  refinancing  in June  2003,  as well as $1.3  million
related to the  unamortized  portion of warrants  associated  with the principal
balance of a subordinated note.

<page>

Income Tax Provision

Our  effective  income tax rates for fiscal years 2004,  2003 and 2002 were 10%,
(8%) and 25%, respectively.  The fiscal 2002 income tax rate differs from the US
federal statutory rate of 35% due primarily to non-US taxes and the inability to
realize the benefit of net operating losses.  The 2004 and 2003 income tax rates
are less than the US federal statutory rate, primarily due to the realization of
benefits from net operating  losses and other previously  reserved  deferred tax
assets.

* We expect our  effective  income tax rate to go up in fiscal year 2005 because
of the significant  realization of the valuation allowance for deferred taxes in
fiscal  year  2004.  The  Company  expects  its  effective  income  tax  rate to
approximate 35%.

* In October  2004,  The American  Jobs Creation Act of 2004 was signed into law
providing   changes  in  the  tax  law  including  an  incentive  to  repatriate
undistributed earnings of foreign subsidiaries.  We are currently evaluating the
potential  impact of these  provisions,  including  assessing the details of the
Act, analyzing the funds available for repatriation,  the economic cost of doing
so and assessing the qualified uses of  repatriated  funds.  However,  given the
preliminary stage of our evaluation,  it is not possible to determine the impact
to our fiscal year 2005 income tax  provision.  The Company  expects to complete
its evaluation by September 30, 2005.

Litigation Matters

* From time to time, we are involved in  litigation  arising out of the ordinary
course of our business. There are no known claims or pending litigation that are
expected to have a material effect on our overall financial position, results of
operations, or liquidity.

OFF-BALANCE SHEET ARRANGEMENTS

Other than lease  commitments  incurred in the normal course of business,  we do
not have any off-balance sheet financing arrangements or liabilities,  guarantee
contracts,  retained or  contingent  interests  in  transferred  assets,  or any
obligation  arising out of a material  variable  interest  in an  unconsolidated
entity. We do not have any majority-owned  subsidiaries that are not included in
the consolidated financial statements. Additionally, we do not have any interest
in, or relationship with, any special purpose entities.

LIQUIDITY AND CAPITAL RESOURCES


<table>
<caption>
                                                         December 31,        January 2,         January 3,
As of and for the Fiscal Year Ended                          2004               2004               2003
-----------------------------------                          ----               ----               ----
(dollars in thousands)
<s>                                                     <c>                 <c>                 <c>     
Cash and cash equivalents                                $    71,872         $   45,416          $  28,679
As a percentage of total assets                                11.1%               8.3%               6.5%
Accounts receivable days sales outstanding (DSO) (1)              61                 65                 64
Inventory turns per year                                           4                  4                  5
Total debt                                               $    38,996         $   90,486          $ 138,525
Cash provided by operating activities                    $    73,115         $   36,460          $  32,316
Cash used in investing activities                        $   (25,133)        $  (22,653)         $  (5,766)
Cash provided (used) by financing activities             $   (24,159)        $       54          $ (31,729)
Net increase/(decrease) in cash and cash equivalents     $    26,456         $   16,737          $  (2,399)
</table>


(1)  We have  reclassified  deferred  revenues  previously  included in accounts
     receivable,  net to the  liabilities  section in the  Consolidated  Balance
     Sheets in fiscal year 2004 and for all periods presented.  As such, the DSO
     calculation for all fiscal periods has been restated.

Cash and Cash Equivalents

In fiscal 2004,  our cash and cash  equivalents  increased by $26.5 million from
fiscal  2003.  The  increase was  primarily  due to cash  generated by operating
activities,   partially  offset  by  cash  used  in  investing   activities  for
acquisitions and cash used in financing activities for debt repayment.

<page>

In fiscal 2004,  cash provided by operating  activities  was $73.1  million,  as
compared to $36.5  million in fiscal  2003.  The  increase of $36.7  million was
primarily  driven by the $29.2 million increase in net income during fiscal 2004
compared to fiscal 2003 and better management of working capital. Our ability to
continue  to  generate  cash  from  operations  will  depend  in  large  part on
profitability,  the rate of  collections of accounts  receivable,  our inventory
turns,  and our ability to manage other areas of working  capital.  Our accounts
receivable  days  for  sales  outstanding  decreased  from 65 days at the end of
fiscal  2003 to 61 days at the end of  fiscal  2004.  Our  inventory  turns  was
unchanged at four at the end of fiscal 2004 and 2003.

Cash used in investing  activities  was $25.1 million in fiscal 2004 as compared
to $22.7  million  in  fiscal  2003.  The  increase  was  primarily  due to cash
acquisitions and investment in capital  equipment.  During fiscal 2004, we spent
approximately $12.8 million on capital expenditures.

Cash used in financing  activities  was $24.2 million in fiscal 2004 as compared
to $54,000 in fiscal 2003. However,  during fiscal 2004, we repaid approximately
$65.2  million  of debt  related to our  previous  Credit  Facility.  These debt
payments were funded by cash provided by operating activities,  and the issuance
of common  stock to  employees  pursuant to our stock  option plan and  employee
stock purchase plan of approximately $26.8 million.

* We  believe  that  our cash and cash  equivalents,  together  with our  credit
facilities,  will be sufficient to meet our anticipated operating cash needs for
at least the next twelve  months.  At December 31, 2004, we had $71.9 million of
cash and cash  equivalents  as well as access to $118  million of cash under the
terms of our revolver loans.

* We expect fiscal 2005 capital  expenditures to be approximately $14 million to
$15 million, primarily for computer equipment, software, manufacturing tools and
test equipment,  and leasehold improvements  associated with business expansion.
Decisions  related to how much cash is used for investing are  influenced by the
expected amount of cash to be provided by operations.

Debt

At the end of fiscal  2004,  our total  debt was  approximately  $39  million as
compared  with  approximately  $90.5  million  at the end of fiscal  2003.  This
balance primarily consists of $31.3 million outstanding under a term loan and $7
million  outstanding under a senior secured  revolving credit facility.  On June
25,  2003,  we  obtained a new Credit  Facility  (comprising  of a term loan and
revolver)  in the  amount  of  $109  million  that  enabled  us to pay  off  our
indebtedness  under our previous credit facility and a subordinated note used to
finance the Spectra Physics acquisition.

The new Credit Facility is secured by all material assets of our Company, except
for a portion of assets that are not pledged due to foreign tax  considerations.
Financial  covenants of the Credit Facility include leverage,  fixed charge, and
minimum net worth tests. At December 31, 2004 and as of the date of this report,
we are in compliance with all debt covenants. The amortized principal, interest,
and commitment fees due under the Credit Facility are paid quarterly.  Under the
four-year term loan portion of the Credit Facility,  we are due to make payments
(excluding  interest)  of  approximately  $12.5  million in each of the next two
fiscal years (2005 and 2006), and $6.3 million in fiscal 2007.

Under the terms of the Credit  Facility,  we are  allowed to pay  dividends  and
repurchase  shares of our common  stock up to 25% of net income in the  previous
fiscal year. For  additional  discussion of our debt, see Note 9 of Notes to the
Consolidated Financial Statements.




<PAGE>


CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations at December 31, 2004:


<table>
<caption>
                                                                Payments Due By Period
                                                                ----------------------
                                                               Less         1-3           3-5         More
                                                               than                                   than
                                                 Total        1 year       Years         years          5
                                                 -----        ------       -----         -----          -
                                                                                                      years
(in thousands)
<s>                                          <c>          <c>           <c>           <c>          <c>       
Total debt including interest                 $   39,693   $   20,483    $   19,210    $       -    $       -
Operating leases                                  23,957       11,412         6,591        4,018        1,936
Other purchase obligations and commitments        49,862       45,703         4,159            -            -
                                                  ------       ------         -----        -----        -----              
Total (1)                                     $  113,512   $   77,598    $   29,960    $   4,018    $   1,936
                                              ==========   ==========    ==========    =========    =========
</table>


(1) Total excludes contractual obligations already recorded on our balance sheet
as current liabilities, or certain obligations as discussed below.

* As of  December  31,  2004,  $22.6  million of our total  debt was  subject to
variable quarterly interest rates. Per our loan agreement,  we pay a three-month
LIBOR rate plus a certain spread that depends on our leverage ratio.  Our spread
is expected to be 1.5% over the  remaining  life of the debt.  We have assumed a
three-month  LIBOR rate of 2.56% for the first  quarter of fiscal  2005 and have
forecasted  an increase of 25 basis point  quarter  over quarter to a maximum of
4.81%.  (See Note 9 of the Notes to the  Consolidated  Financial  Statements for
further financial information regarding long-term debt)

Other purchase  obligations and  commitments  represent open purchase orders for
material  purchases  with  our  customers  and a  forecasted  commitment  with a
supplier  for  outsourced  services as  described in Note 10 of the Notes to the
Consolidated Financial Statements.  Our pension obligation which is not included
in the table above,  and is included in "Other  non-current  liabilities" on our
Consolidated  Balance  Sheets,  is  disclosed  at  Note 16 of the  Notes  to the
Consolidated Financial Statements.

NEW ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment." SFAS No.
123R requires  employee stock options and rights to purchase  shares under stock
participation  plans to be  accounted  for  under  the fair  value  method,  and
eliminates  the ability to account  for these  instruments  under the  intrinsic
value method  prescribed  by APB Opinion No. 25, and allowed  under the original
provisions of SFAS No. 123. SFAS No. 123R requires the use of an option  pricing
model for estimating fair value,  which is amortized to expense over the service
periods.  The  requirements  of SFAS No. 123R are effective  for fiscal  periods
beginning after June 15, 2005. If we had applied the provisions of SFAS No. 123R
to the financial  statements for the period ending  December 31, 2004,  assuming
that  adoption  would  result  in  amounts  similar  to the  current  pro  forma
disclosures under SFAS 123R, net income would have been reduced by approximately
$8.6  million.  SFAS No.  123R  allows for  either  prospective  recognition  of
compensation  expense  or  retrospective  recognition,  which may be back to the
original  issuance  of SFAS No.  123 or only to  interim  periods in the year of
adoption. We are currently evaluating these transition methods.

RISKS AND UNCERTAINTIES

You should  carefully  consider the following  risk factors,  in addition to the
other  information  contained  in this Form 10-K and in any other  documents  to
which we refer you in this Form 10-K,  before  purchasing  our  securities.  The
risks and uncertainties described below are not the only ones we face.

Our Inability to Accurately Predict Orders and Shipments May Affect Our Revenue,
Expenses and Earnings per Share.

We have not been able in the past to  consistently  predict  when our  customers
will place orders and request shipments so that we cannot always accurately plan
our manufacturing requirements. As a result, if orders and shipments differ from

<page>

what we predict,  we may incur additional  expenses and build excess  inventory,
which may require additional reserves and allowances.  Any significant change in
our customers'  purchasing  patterns could have a material adverse effect on our
operating results and reported earnings per share for a particular quarter.

Our  Operating  Results in Each  Quarter May Be Affected by Special  Conditions,
Such As  Seasonality,  Late  Quarter  Purchases,  Weather,  and Other  Potential
Issues.

Due in part to the buying  patterns of our customers,  a significant  portion of
our quarterly  revenues occurs from orders  received and immediately  shipped to
customers in the last few weeks and days of each quarter, although our operating
expenses  tend  to  remain  fairly  predictable.  Engineering  and  construction
purchases  tend to occur in early  spring,  and  governmental  agencies  tend to
utilize  funds  available  at the  end  of  the  government's  fiscal  year  for
additional purchases at the end of our third fiscal quarter in September of each
year.  Concentrations of orders sometimes also occur at the end of our other two
fiscal quarters.  Additionally,  a majority of our sales force earns commissions
on a quarterly basis which may cause  concentrations of orders at the end of any
fiscal quarter.  If for any reason  expected sales are deferred,  orders are not
received,  or  shipments  are  delayed a few days at the end of a  quarter,  our
operating  results and reported  earnings  per share for that  quarter  could be
significantly impacted.

We Are  Dependent  on a  Specific  Manufacturer  and  Assembler  for Many of Our
Products and on Specific Suppliers of Critical Parts for Our Products.

We are substantially  dependent upon Solectron Corporation in California,  China
and Mexico as our preferred  manufacturing  partner for many of our GPS products
previously  manufactured  out of our Sunnyvale  facilities.  Under the agreement
with  Solectron,  we provide to Solectron a  twelve-month  product  forecast and
place purchase orders with Solectron at least thirty calendar days in advance of
the scheduled delivery of products to our customers depending on production lead
time.  Although purchase orders placed with Solectron are cancelable,  the terms
of the agreement  would require us to purchase from  Solectron all inventory not
returnable  or  usable  by  other  Solectron  customers.   Accordingly,   if  we
inaccurately  forecast  demand  for our  products,  we may be  unable  to obtain
adequate  manufacturing  capacity  from  Solectron to meet  customers'  delivery
requirements or we may accumulate  excess  inventories,  if such inventories are
not usable by other Solectron customers.

Our current contract with Solectron continues in effect until either party gives
the other ninety days written notice.

In  addition,  we  rely on  specific  suppliers  for a  number  of our  critical
components. We have experienced shortages of components in the past. Our current
reliance on specific 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.  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  harm  our
reputation and brand, and could have a material adverse effect on our business.

Our Annual and Quarterly Performance May Fluctuate.

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:

o    changes in market demand,
o    competitive market conditions,
o    market acceptance of existing or new products,
o    fluctuations in foreign currency exchange rates,
o    the cost and availability of components,
o    our ability to manufacture and ship products,
o    the mix of our customer base and sales channels,
o    the mix of products sold,
o    our ability to expand our sales and marketing organization effectively,
o    our ability to attract and retain key technical and managerial employees,
o    the timing of shipments of products under contracts and
o    general global economic conditions.

<page>

In addition,  demand for our products in any quarter or year may vary due to the
seasonal  buying patterns of our customers in the  agricultural  and engineering
and construction industries. Due to the foregoing factors, our operating results
in one or  more  future  periods  are  expected  to be  subject  to  significant
fluctuations.  The price of our common stock could decline  substantially in the
event such  fluctuations  result in our  financial  performance  being below the
expectations of public market analysts and investors,  which are based primarily
on historical models that are not necessarily  accurate  representations  of the
future.

Our Gross Margin Is Subject to Fluctuation.

Our 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, sales of Nikon-branded products generally have
lower  gross  margins as  compared  to our GPS  survey  products.  Absent  other
factors,  a shift  in  sales  towards  Nikon-branded  products  would  lead to a
reduction  in our  overall  gross  margins.  A  decline  in gross  margin  could
potentially negatively impact our earnings per share.

Failure to maintain  effective  internal controls in compliance with Section 404
of the Sarbanes-Oxley Act could have an adverse effect on our business and stock
price.

Section 404 of the Sarbanes-Oxley Act requires us to include an internal control
report of  management  in our  Annual  Report on Form 10-K.  For fiscal  2004 we
satisfied the  requirements  of Section 404,  which requires  annual  management
assessments  of  the  effectiveness  of our  internal  controls  over  financial
reporting and a report by our independent auditors addressing these assessments.

A system of  controls,  however  well  designed  and  operated,  cannot  provide
absolute  assurance  that the objectives of the system will be met. In addition,
the design of a control system is based in part upon certain  assumptions  about
the likelihood of future events.  Because of the inherent limitations of control
systems,  there is only  reasonable  assurance that our controls will succeed in
achieving their stated goals under all potential future conditions.

We Are Dependent on New Products.

Our 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.  We may incur problems in the future in innovating and introducing new
products.  Our development stage products may not be successfully  completed or,
if developed, may not 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 we might not achieve timely initial customer shipments
of new products.  The timely  availability of these products in volume and their
acceptance  by customers  are  important to our future  success.  A delay in new
product  introductions  could  have  a  significant  impact  on our  results  of
operations.

Our products may contain errors or defects,  which could result in damage to our
reputation,  lost revenues, diverted development resources and increased service
costs, warranty claims and litigation.

Our devices are complex and must meet  stringent  requirements.  We warrant that
our products  will be free of defect for various  periods of time,  depending on
the product.  In addition,  certain of our contracts  include  epidemic  failure
clauses. If invoked,  these clauses may entitle the customer to return or obtain
credits for products and inventory,  or to cancel  outstanding  purchase  orders
even if the products themselves are not defective.

We must  develop our  products  quickly to keep pace with the  rapidly  changing
market, and we have a history of frequently  introducing new products.  Products
and  services  as  sophisticated  as ours  could  contain  undetected  errors or
defects,  especially  when first  introduced  or when new models or versions are
released.  In general, our products may not be free from errors or defects after
commercial shipments have begun, which could result in damage to our reputation,
lost revenues,  diverted development  resources,  increased customer service and
support costs and warranty claims and litigation  which could harm our business,
results of operations and financial condition.

<page>

We May Not Be Able to Enter Into or Maintain Important Alliances.

We believe that in certain business opportunities our success will depend on our
ability to form and  maintain  alliances  with  industry  participants,  such as
Caterpillar,  Nikon,  McNeilus, and CNH Global. Our failure to form and maintain
such  alliances,  or the  pre-emption  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  experience  problems from
current  or  future  alliances  or that we will  realize  value  from  any  such
strategic alliances.

We Are  Dependent  on the  Availability  of  Allocated  Bands  Within  the Radio
Frequency Spectrum.

Our GPS technology is dependent on the use of the Standard  Positioning  Service
("SPS")  provided  by the US  Government's  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  that have  treaty  status and which may be subject to  modification
every two to 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.  Many of our products use other radio
frequency  bands,  together  with  the  GPS  signal,  to  provide  enhanced  GPS
capabilities, such as real-time kinematic precision. The continuing availability
of these non-GPS radio frequencies is essential to provide enhanced GPS products
to  our  precision  survey  and  construction   machine  controls  markets.  Any
regulatory changes in spectrum allocation or in allowable  operating  conditions
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 in-band 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  FCC  continually  receives  proposals  for  novel
technologies and services, such as ultra-wideband  technologies,  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 and other radio frequency
spectrum  also used in our  products may  materially  and  adversely  affect the
utility  and  reliability  of our  products,  which  could  result in a material
adverse effect on our business and financial condition.

We Are Subject to the Adverse Impact of Radio Frequency Congestion.

We have certain  products,  such as GPS RTK systems,  and  surveying and mapping
systems that use integrated radio communication  technology  requiring access to
available  radio  frequencies  allocated  by the FCC (or the NTIA in the case of
federal  government  users of this equipment) for which the end user is required
to obtain a license in order to operate their equipment. In addition,  access to
these  frequencies  by  state  agencies  is  under  management  by  state  radio
communications  coordinators.   Some  bands  are  experiencing  congestion  that
excludes  their  availability  for access by state  agencies in some states.  To
reduce  congestion,  the FCC announced  that it will require  migration of radio
technology  from wideband to narrowband  operations in these bands.  In December
2003,  the FCC  stayed  the  effectiveness  of its new  rules  until  it acts on
petitions  requesting a  reconsideration  of this new  requirement.  The stay is
indefinite  at this point and the outcome of this  proceeding is unknown at this
time. An inability to obtain access to these radio frequencies by end users, and
for new products to comply with FCC  requirements,  could have an adverse effect
on our operating results.

Many of Our Products Rely on the GPS Satellite System.

The GPS  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 29  satellites  in place,  some have already been in
operation  for 12 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

<page>

may 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 US  Government  will  remain
committed to the operation and maintenance of GPS satellites over a long period,
or that the policies of the US 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
reaffirmed in 2004. In addition,  Presidential  policy has been  complemented by
corresponding   legislation,   signed  into  law.  Because  of   ever-increasing
commercial applications of GPS, other US 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 our products to
select GPS-based systems instead of products based on competing technologies.

Many of our products also use signals from systems that augment GPS, such as the
Wide Area  Augmentation  System  (WAAS)  and  National  Differential  GPS System
(NDGPS).  Many  of  these  augmentation  systems  are  operated  by the  federal
government and rely on continued  funding and maintenance of these systems.  Any
curtailment  of the  operating  capability  of these  systems  could  result  in
decreased user capability thereby impacting our markets.

The European  governments  have begun  development of an  independent  satellite
navigation  system,  known as  Galileo.  We believe  we will have  access to the
signal design to develop compatible receivers.  However, if access to the signal
structure is delayed it may have a materially adverse effect on our business and
operating results.

Our  Business  is  Subject to  Disruptions  and  Uncertainties  Caused by War or
Terrorism.

Acts of war or acts of  terrorism  could have a material  adverse  impact on our
business,  operating results, and financial  condition.  The threat of terrorism
and war and  heightened  security and military  response to this threat,  or any
future acts of terrorism, may cause further disruption to our economy and create
further  uncertainties.  To the extent that such  disruptions  or  uncertainties
result in delays or cancellations  of orders,  or the manufacture or shipment of
our products, our business,  operating results, and financial condition could be
materially and adversely affected.

Our Credit Agreement Contains Financial Covenants.

On June 25, 2003, we executed a Credit Agreement with Scotia Capital and certain
other  banks  which  provides  for  financial  commitments  totaling  up to $175
million.  This credit facility contains  financial  covenants  regarding minimum
fixed charge coverage and maximum  leverage ratio which are extremely  sensitive
to changes in earnings before interest, taxes, depreciation and amortization, or
EBITDA.  In turn,  EBITDA is highly  correlated  to  revenues  and costs.  If we
default  on one or more  covenants,  we will  have to obtain  either  negotiated
waivers or amendments to the Credit Agreement.  If we were unable to obtain such
waivers or amendments,  the banks would have the right to accelerate the payment
of our  outstanding  obligations  under the Credit  Agreement which would have a
material adverse effect on our financial condition and viability as an operating
company. An event of default under any debt instrument,  if not cured or waived,
could have a material adverse effect on us.

We Face Risks in Investing in and Integrating New Acquisitions.

Acquisitions of companies,  divisions of companies,  or products entail numerous
risks, including:

o    potential  inability to  successfully  integrate  acquired  operations  and
     products or to realize  cost  savings or other  anticipated  benefits  from
     integration;
o    diversion of management's attention;
o    loss of key employees of acquired operations;
o    the  difficulty of  assimilating  geographically  dispersed  operations and
     personnel of the acquired companies;
o    the potential disruption of our ongoing business; 
o    unanticipated expenses related to such integration;

<page>

o    the correct assessment of the relative  percentages of in-process  research
     and development  expense that can be immediately written off as compared to
     the amount which must be amortized over the appropriate life of the asset;
o    the impairment of  relationships  with employees and customers of either an
     acquired company or our own business;
o    the potential unknown liabilities associated with acquired business; and
o    inability to recover strategic investments in development stage entities.

As a result  of such  acquisitions,  we have  significant  assets  that  include
goodwill and other purchased intangibles. The testing of these intangibles under
established  accounting  guidelines for impairment  requires  significant use of
judgment  and  assumptions.   Changes  in  business   conditions  could  require
adjustments to the valuation of these assets. In addition,  losses incurred by a
company in which we have an investment may have a direct impact on our financial
statements  or could  result  in our  having  to  write-down  the  value of such
investment.  Any such problems in integration or adjustments to the value of the
assets  acquired  could harm our  growth  strategy  and have a material  adverse
effect on our business, financial condition and compliance with debt covenants.

We Face Competition in Our Markets.

Our markets are highly  competitive  and we expect that both direct and indirect
competition  will  increase in the  future.  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 US and non-US  competitors and new
market entrants, some of which may be our current 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.  We may not be able to implement this strategy
successfully, and our products may not 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.

We Are Dependent on Proprietary Technology.

Our future success and  competitive  position is dependent upon our  proprietary
technology,  and we rely on patent, trade secret, trademark and copyright law to
protect our  intellectual  property.  The patents owned or licensed by us may be
invalidated,  circumvented,  and  challenged.  The rights  granted  under  these
patents  may not  provide  competitive  advantages  to us. Any of our pending or
future  patent  applications  may not be issued  within  the scope of the claims
sought by us, if at all.

Others may develop  technologies that are similar or superior to our technology,
duplicate our  technology or design around the patents owned by us. In addition,
effective  copyright,  patent and trade secret  protection  may be  unavailable,
limited  or not  applied  for in  certain  countries.  The steps  taken by us to
protect  our  technology  might  not  prevent  the   misappropriation   of  such
technology.

The value of our products relies  substantially  on our technical  innovation in
fields in which there are many current patent filings.  We recognize 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.

We Must Carefully Manage Our Future Growth.

Growth in our sales or continued  expansion in the scope of our operations could
strain our current 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. Specifically we have experienced strain

<page>

in our  financial  and order  management  system.  We are  expanding  our sales,
accounting,   manufacturing,   and  other  information  systems  to  meet  these
challenges.  Problems  associated  with any  improvement  or  expansion of these
systems,  procedures or controls may adversely  affect our  operations and these
systems, procedures or controls may not 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
harm our growth  strategy  and  adversely  affect our  financial  condition  and
ability to achieve our business objectives.

We Are Dependent on Retaining and  Attracting  Highly  Skilled  Development  and
Managerial Personnel.

Our ability to maintain our competitive technological position will depend, in a
large part, on our ability to attract,  motivate,  and retain  highly  qualified
development and managerial personnel. Competition for qualified employees in our
industry and locations 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.

We May Encounter Problems Associated With International Operations and Sales.

Our customers are located throughout the world. Sales to unaffiliated  customers
in non-US locations represented  approximately 50% of our revenues in our fiscal
year 2004,  51% of our  revenues in our fiscal year 2003,  and 49% in our fiscal
year  2002,  respectively.   In  addition,  we  have  significant  international
operations, including a joint venture, manufacturing facilities, sales personnel
and  customer  support  operations.  We have sales  offices  outside the US. Our
non-US manufacturing  facilities are in Sweden, Canada, France, and Germany, and
we have a regional  fulfillment  center in the Netherlands.  Our non-US presence
exposes us to risks not faced by wholly US companies.

Specifically,  we have  experienced  issues  relating to  integration  of non-US
operations, greater difficulty in accounts receivable collection, longer payment
cycles, and currency  fluctuations.  Additionally,  we face the following risks,
among others:

o    unexpected changes in regulatory requirements;
o    tariffs and other trade barriers;
o    political,  legal and economic instability in non-US markets,  particularly
     in  those  markets  in  which  we  maintain   manufacturing   and  research
     facilities;
o    difficulties in staffing and management;
o    language and cultural barriers;
o    seasonal  reductions in business  activities in the summer months in Europe
     and some other countries; o war and acts of terrorism; and
o    potentially adverse tax consequences.

In certain non-US markets, there may be reluctance to purchase products based on
GPS technology, given the control of GPS by the US Government.

We Are Exposed to Fluctuations in Currency Exchange Rates.

A significant  portion of our business is conducted  outside the United  States,
and as such, we face exposure to movements in non-US  currency  exchange  rates.
These exposures may change over time as business practices evolve and could have
a material  adverse  impact on our financial  results and cash flows.  In fiscal
2004,  the US dollar  continued to weaken  against  several major  currencies in
which we do business,  adversely impacting our financial results.  The weaker US
dollar negatively impacts our operating income due to significant manufacturing,
distribution, research and development, and selling expenses incurred outside of
the US, while the weaker US dollar positively  impacts our revenues generated in
foreign currencies, primarily the Euro.

Currently, we hedge only those currency exposures associated with certain assets
and liabilities denominated in non-functional currencies. The hedging activities
undertaken by us are intended to offset the impact of currency  fluctuations  on
certain  non-functional  currency assets and liabilities.  Our attempts to hedge
against these risks may not be successful  resulting in an adverse impact on our
net income.



<PAGE>


We Are Subject to the Impact of Governmental and Other Similar Certifications.

We  market  certain  products  that 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.  Also,
some of 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.  These are  secondary  licenses  that are subject to
certain  restrictions.  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 changes
to the rules by the FCC could adversely affect our ability to bring our products
to market  which  could  harm our  customer  relationships  and have a  material
adverse effect on our business.

The Volatility of Our Stock Price Could Adversely  Affect Your Investment in Our
Common Stock.

The market  price of our common stock has been,  and may continue to be,  highly
volatile.  During fiscal 2004, our stock price ranged from $20.15 to $34.45.  We
believe  that a variety of factors  could cause the price of our common stock to
fluctuate, perhaps substantially, including:

o    announcements  and rumors of  developments  related to our  business or the
     industry in which we compete;
o    quarterly  fluctuations in our actual or anticipated  operating results and
     order levels;
o    general  conditions in the worldwide  economy,  including  fluctuations  in
     interest rates;
o    announcements of technological innovations;
o    new products or product enhancements by us or our competitors;
o    developments  in  patents  or  other   intellectual   property  rights  and
     litigation;
o    developments in our relationships with our customers and suppliers; and
o    any significant acts of terrorism against the United States.

In  addition,  in recent  years the stock  market in general and the markets for
shares of "high-tech"  companies in particular,  have experienced  extreme price
fluctuations  which have often been  unrelated to the operating  performance  of
affected  companies.  Any such fluctuations in the future could adversely affect
the market price of our common  stock,  and the market price of our common stock
may decline.

We may be Materially Affected by New Regulatory Requirements.

We face increasing  complexity in our product design and procurement  operations
as we  adjust  to new  and  upcoming  requirements  relating  to  the  materials
composition  of many of our products.  The European Union ("EU") has adopted two
directives to facilitate the recycling of electrical  and  electronic  equipment
sold in the EU.  The  first of  these is the  Waste  Electrical  and  Electronic
Equipment  (WEEE)  directive,  which  directs  EU member  states to enact  laws,
regulations,   and  administrative   provisions  to  ensure  that  producers  of
electrical and electronic  equipment are  financially  responsible for specified
collection,  recycling, treatment and environmentally sound disposal of products
placed on the market  after  August 13,  2005 and from  products in use prior to
that date that are being  replaced.  The EU has also adopted the  Restriction on
the Use of Certain Hazardous  Substances in Electrical and Electronic  Equipment
("RoHS")  directive.  The RoHS directive  restricts the use of lead, mercury and
certain other  substances in electrical  and electronic  products  placed on the
market in the European Union after July 1, 2006.

Similar  laws and  regulations  have been or may be  enacted  in other  regions,
including in the United States, China and Japan. Other environmental regulations
may require us to reengineer our products to utilize  components  which are more
environmentally compatible and such reengineering and component substitution may
result in additional  costs to us.  Although we do not  anticipate  any material
adverse  effects  based on the nature of our  operations  and the effect of such
laws, there is no assurance that such existing laws or future laws will not have
a material adverse effect on our business.

We are Subject to  Environmental  Laws and Potential  Exposure to  Environmental
Liabilities.

We are  subject  to  various  federal,  state and local  environmental  laws and
regulations  that govern our operations,  including the handling and disposal of
non-hazardous  and  hazardous  wastes,  and emissions  and  discharges  into the

<page>

environment.  Failure to comply with such laws and  regulations  could result in
costs for corrective action,  penalties, or the imposition of other liabilities.
We also are subject to laws and regulations  that impose  liability and clean-up
responsibility for releases of hazardous substances into the environment.  Under
certain of these laws and  regulations,  a current or previous owner or operator
of property may be liable for the costs of remediating  hazardous  substances or
petroleum products on or from its property,  without regard to whether the owner
or operator knew of, or caused, the contamination, as well as incur liability to
third  parties  impacted by such  contamination.  The presence of, or failure to
remediate  properly,  such substances  could adversely  affect the value and the
ability to transfer or encumber  such  property.  Based on  currently  available
information,   although  there  can  be  no  assurance,  we  believe  that  such
liabilities will not have a material impact on our business.

Provisions in Our Charter  Documents and Under  California  Law Could Prevent or
Delay a Change of  Control,  which Could  Reduce the Market  Price of Our Common
Stock.

Certain  provisions of our articles of  incorporation,  as amended and restated,
our bylaws, as amended and restated,  and the California General Corporation Law
may be deemed to have an anti-takeover effect and could discourage a third party
from acquiring, or make it more difficult for a third party to acquire,  control
of us without  approval of our board of directors.  These  provisions could also
limit the price that certain investors might be willing to pay in the future for
shares of our common stock.  Certain  provisions allow the board of directors to
authorize the issuance of preferred  stock with rights  superior to those of the
common stock.

We have adopted a Preferred Shares Rights Agreement, commonly known as a "poison
pill." The  provisions  described  above,  our poison pill and provisions of the
California  General  Corporation  Law may  discourage,  delay or prevent a third
party from acquiring us.



<PAGE>



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

We are exposed to market risk  related to changes in interest  rates and foreign
currency  exchange rates.  We use certain  derivative  financial  instruments to
manage  these  risks.  We  do  not  use  derivative  financial  instruments  for
speculative  or  trading  purposes.   All  financial  instruments  are  used  in
accordance with policies approved by our board of directors.

Market Interest Rate Risk

We are exposed to market risk due to the possibility of changing  interest rates
under our  secured  Credit  Facility.  Our Credit  Facility  is  comprised  of a
three-year,  US  dollar-only  revolver  that  expires  on June 25,  2006,  and a
four-year term loan that expires on June 25, 2007.  Borrowings  under the Credit
Facility have interest  payments based on a floating rate of LIBOR plus a number
of basis  points tied to a formula  based on our  Leverage  Ratio.  The revolver
matures on June 25, 2006 and has an outstanding principal balance of $7 million,
while the term loan  matures on June 25, 2007 and has an  outstanding  principal
balance of $31.25  million,  as of December 31, 2004 (all in US currency  only).
The  three-month  LIBOR  effective  rate at  December  31,  2004  was  2.56%.  A
hypothetical   10%  increase  in   three-month   LIBOR  rates  could  result  in
approximately  $98,000  annual  increase  in  interest  expense on the  existing
principal balances. We have hedged the market risk with an interest rate swap on
50% of our term loan. The rate on that interest rate swap is 2.517%.

* 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 our 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.

Foreign Currency Exchange Rate Risk

We enter into foreign  exchange  forward  contracts  to minimize the  short-term
impact of  foreign  currency  fluctuations  on certain  trade and  inter-company
receivables and payables,  primarily  denominated in Australian,  Canadian,  New
Zealand,  and  Swedish  currencies,  the  Euro,  and the  British  pound.  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 forward contracts. These instruments are marked
to market through  earnings  every period and generally  range from one to three
months in  original  maturity.  We do not enter into  foreign  exchange  forward
contract for trading purposes.

Foreign  exchange  forward  contracts  outstanding  as of December  31, 2004 and
January 2, 2004 are summarized as follows (in thousands):


<table>
<caption>
                                December 31, 2004                   January 2, 2004
                                -----------------                   ---------------
                         Nominal Amount      Fair Value        Nominal Amount        Fair Value
                         --------------      ----------        --------------        ----------
<s>                     <c>                 <c>               <c>                   <c>  
Forward contracts:
     Purchased           $   (15,875)        $     431         $    15,767           $  (1,666)
     Sold                $    22,750         $    (970)        $    44,236           $   2,994
</table>


* We do not anticipate any material adverse effect on our consolidated financial
position utilizing our current hedging strategy.




<PAGE>


                           TRIMBLE NAVIGATION LIMITED
                          INDEX TO FINANCIAL STATEMENTS



Consolidated Balance Sheets at December 31, 2004 and January 2, 2004..........44

Consolidated Statements of Income for each of the three fiscal years
   in the period ended December 31, 2004......................................45

Consolidated Statement of Shareholders' Equity for each of the three
   fiscal years in the period ended December 31, 2004.........................46

Consolidated Statements of Cash Flows for each of the three fiscal years
   in the period ended December 31, 2004......................................47

Notes to Consolidated Financial Statements....................................48

Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm...72




<PAGE>



Item 8.           Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS
                                                                             


<table>
<caption>
                                                                          December 31,        January 2,
As at                                                                         2004              2004
-----                                                                         ----              ----
(in thousands)
<s>                                                                    <c>                 <c>      
ASSETS
Current assets:
        Cash and cash equivalents                                       $     71,872        $    45,416
        Accounts receivable, less allowance for doubtful
         accounts of $8,952 and $9,953, respectively                         123,938            104,634
        Other receivables                                                      4,182              6,415
        Inventories, net                                                      87,745             70,826
        Deferred income taxes                                                 21,852              4,380
        Other current assets                                                   7,878              8,847
                                                                               -----              -----
              Total current assets                                           317,467            240,518
Property and equipment, net                                                   30,991             27,379
Goodwill                                                                     259,522            241,425
Other purchased intangible assets, net                                        13,835             19,741
Deferred income taxes                                                          8,019              4,173
Other assets                                                                  24,144             19,366
                                                                              ------             ------
              Total non-current assets                                       336,511            312,084
                                                                             -------            -------
              Total assets                                              $    653,978        $   552,602
                                                                        ============        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
        Current portion of long-term debt                               $     12,500        $    12,885
        Accounts payable                                                      43,551             26,019
        Accrued compensation and benefits                                     31,202             25,950
        Accrued liabilities                                                   11,510             15,599
        Deferred revenues                                                      9,317              7,699
        Accrued warranty expense                                               6,425              5,147
        Deferred income taxes                                                  2,521              1,136
        Income taxes payable                                                  11,951              9,969
                                                                              ------              -----
              Total current liabilities                                      128,977            104,404
Non-current portion of long-term debt                                         26,496             77,601
Deferred gain on joint venture                                                 9,179              9,845
Deferred income tax                                                            5,435              4,229
Other non-current liabilities                                                 11,730              8,279
                                                                              ------              -----
              Total liabilities                                              181,817            204,358
                                                                             -------            -------
Commitments and contingencies
Shareholders' equity:
        Preferred stock no par value; 3,000 shares authorized;
         none outstanding                                                       --                 --
        Common stock, no par value; 90,000 shares authorized;
         52,213 and 49,988 shares issued and outstanding at 
         December 31, 2004 and January 2, 2004, respectively                 345,127            303,015
        Retained earnings                                                     82,670             14,990
        Accumulated other comprehensive income                                44,364             30,239
                                                                              ------             ------
              Total shareholders' equity                                     472,161            348,244
                                                                             -------            -------
              Total liabilities and shareholders' equity                $    653,978        $   552,602
                                                                        ============        ===========
</table>


See accompanying Note to the Consolidated Financial Statements.


<page>


CONSOLIDATED STATEMENTS OF INCOME

<table>
<caption>

                                                          December 31,        January 2,        January 3,
Fiscal Years Ended                                            2004               2004              2003
------------------                                            ----               ----              ----
(in thousands, except per share amounts)
<s>                                                     <c>                 <c>               <c>      
Revenue  (1)                                             $    668,808        $   540,903       $   466,602
Cost of sales (1)                                             343,998            272,873           232,170
                                                              -------            -------           -------
Gross margin                                                  324,810            268,030           234,432

Operating expenses
        Research and development                               77,558             67,641            61,232
        Sales and marketing                                   108,054             97,870            89,344
        General and administrative                             44,694             39,253            40,634
        Restructuring charges                                     552              2,019             1,099
        Amortization of purchased intangible assets             8,327              7,312             8,300
                                                                -----              -----             -----
              Total operating expenses                        239,185            214,095           200,609
                                                              -------            -------           -------
Operating income                                               85,625             53,935            33,823
Non-operating income (expense), net
        Interest income                                           436                465               659
        Interest expense                                       (3,888)           (11,938)          (14,710)
        Foreign currency transaction loss, net                   (859)              (592)             (823)
        Expenses for affiliated operations, net                (7,590)            (6,403)           (3,954)
        Other income (expense), net                             1,200                118            (1,171)
                                                                -----                ---            ------ 
             Total non-operating expense, net                 (10,701)           (18,350)          (19,999)
                                                              -------            -------           ------- 
Income before taxes                                            74,924             35,585            13,824
Income tax provision (benefit)                                  7,244             (2,900)            3,500
                                                                -----             ------             -----
Net income                                               $     67,680        $    38,485       $    10,324
                                                         ============        ===========       ===========

Basic earnings per share                                 $       1.32        $      0.81       $      0.24
Shares used in calculating basic earnings per share            51,163             47,505            42,860

Diluted earnings per share                               $       1.23        $      0.77       $      0.24
Shares used in calculating diluted earnings per share          54,948             50,012            43,578
</table>



(1) Sales to related parties were $7.6 million,  $4.0 million,  and $0 in fiscal
2004, 2003 and 2002, respectively,  while cost of sales to those related parties
were  $3.8  million,  $1.9  million,  and $0 in  fiscal  2004,  2003  and  2002,
respectively.  See  Note 5 to  these  Consolidated  Financial  Statements  for a
discussion of related parties.

See accompanying Notes to the Consolidated Financial Statements.



<PAGE>


CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY


<table>
<caption>

                                                    Common stock                       Accumulative
                                                                           Retained       Other          Total
                                                                           Earnings   Comprehensive  Shareholders'
                                                 Shares        Amount     (Deficit)   Income/(Loss)      Equity
                                                 ------        ------     ---------   -------------      ------
(in thousands)
<s>                                              <c>         <c>         <c>            <c>             <c>   
Balance at December 28, 2001                      40,294      $191,224    $ (33,819)     $ (18,916)      $138,489
  Components of comprehensive income:
    Net income                                                               10,324                        10,234
    Gain on interest rate swap                                                                 210            210
    Unrealized loss on investments                                                             (17)           (17)
    Foreign currency translation adjustments                                                17,697         17,697
                                                                                            ------         ------
          Total comprehensive income                                                                       28,214
                                                                                                           ------
  Issuance of common stock in connection           1,190        12,033                                     12,033
      with acquisitions, net
  Issuance of common stock under employee
      plans and exercise of warrants                 561         4,091                                      4,091
  Issuance of warrants                                           1,528                                      1,528
  Issuance of common stock in private
  placement                                        1,920        16,996                                     16,996
                                                   -----        ------      ------         ------          ------
Balance at January 3, 2003                        43,965       225,872      (23,495)        (1,026)       201,351
   Components of comprehensive income:
    Net income                                                               38,485                        38,485
    Loss on interest rate swap                                                                  (7)            (7)
    Unrealized gain on investments                                                              74             74
    Foreign currency translation adjustments                                                31,198         31,198
                                                                                            ------         ------
          Total comprehensive income                                                                       69,750
                                                                                                           ------
  Issuance of common stock in connection           1,282        25,795                                     25,795
      with acquisitions and joint venture,
      net
  Issuance of common stock under employee
      plans and exercise of warrants               1,593        13,929                                     13,929
  Issuance of warrants                                             836                                        836
  Issuance of common stock in private
  placement                                        3,148        36,583                                     36,583
                                                   -----        ------       ------         ------         ------
Balance at January 2, 2004                        49,988       303,015       14,990         30,239        348,244
   Components of comprehensive income:
    Net income                                                               67,680                        67,680
    Gain on interest rate swap                                                                 106            106
    Unrealized loss on investments                                                              (6)            (6)
    Foreign currency translation
       adjustments, net of tax                                                              14,025         14,025
                                                                                            ------         ------
          Total comprehensive income                                                                       81,805
                                                                                                           ------
  Issuance of common stock in connection             294           899                                        899
      with acquisitions, net
  Issuance of common stock under employee
      plans, exercise of warrants                  1,930        26,805                                     26,805
  Tax benefit from stock option exercises                       14,408                                     14,408
                                                  ------      --------    ---------      ---------       --------
Balance at December 31, 2004                      52,213      $345,127    $  82,670      $  44,364       $472,161
                                                  ------      --------    ---------      ---------       --------
</table>


See accompanying Notes to the Consolidated Financial Statements.



<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS


<table>
<caption>
                                                                   December 31,          January 2,         January 3,
Fiscal Years Ended                                                     2004                 2004               2003
------------------                                                     ----                 ----               ----
(In thousands)
<s>                                                              <c>                  <c>                <c>  
Cash flows from operating activities:
         Net income                                               $     67,680         $    38,485        $    10,324
Adjustments to reconcile net income to net cash
   provided by operating activities:
         Depreciation                                                    8,874               8,864              9,850
         Amortization                                                    8,510               7,916              9,168
         Provision for doubtful accounts                                 1,210                 (32)             5,443
         Net loss on sale of fixed assets                                  202                   -                423
         Amortization of deferred gain                                       -                   -             (1,061)
         Amortization of debt issuance cost                                487               3,515              1,197
         Deferred income taxes                                          (1,482)             (6,532)             1,464
         Other                                                            (223)              2,533                193
         Decrease (increase) in assets and liabilities:
                 Accounts receivable, net                              (17,245)            (13,944)           (11,043)
                 Deferred revenues                                       1,619               1,650                (32)
                 Other receivables                                       2,231              (4,389)               460
                 Inventories, net                                      (15,529)             (4,862)            (7,649)
                 Other current and non-current assets                      (69)               (792)            (3,920)
                 Effect of foreign currency translation
                 adjustment                                             (1,461)              6,895                438
                 Accounts payable                                       14,668              (6,387)             8,593
                 Accrued compensation and benefits                       4,847               6,723              3,452
                 Deferred gain on joint venture                           (665)               (947)            10,792
                 Accrued liabilities                                    (1,757)             (6,437)            (4,823)
                 Income taxes payable                                    1,218               4,201               (953)
                                                                         -----               -----               ---- 
Net cash provided by operating activities                               73,115              36,460             32,316
                                                                        ------              ------             ------

Cash flows from investing activities:
         Acquisition of property and equipment                         (12,750)            (10,901)            (7,157)
         Proceeds from sale of assets                                      546                 334              1,407
         Cost of acquisitions, net of cash acquired                    (11,388)             (6,606)             1,718
         Cost of joint venture and equity investments                   (1,500)             (4,810)                 -
         Costs of capitalized patents                                      (41)               (670)            (1,734)
                                                                           ---                ----             ------ 
Net cash used in investing activities                                  (25,133)            (22,653)            (5,766)
                                                                       -------             -------             ------ 

Cash flows from financing activities:
         Issuance of common stock and warrants                          26,805              50,514             21,393
         (Payment) collection of notes receivable                          271               1,326             (1,082)
         Proceeds from long-term debt and revolving credit
         lines                                                          14,000             138,288             18,000
         Payments on long-term debt and revolving credit lines         (65,235)           (190,074)           (70,040)
                                                                       -------            --------            ------- 
Net cash provided by (used in) financing activities                    (24,159)                 54            (31,729)
                                                                       -------            ---------           ------- 

Effect of exchange rate changes on cash and cash equivalents             2,633               2,876              2,780

Net increase (decrease) in cash and cash equivalents                    26,456              16,737             (2,399)
Cash and cash equivalents, beginning of period                          45,416              28,679             31,078
                                                                        ------              ------             ------
Cash and cash equivalents, end of period                          $     71,872         $    45,416        $    28,679
                                                                  ============         ===========        ===========
</table>


See accompanying Notes to the Consolidated Financial Statements.

<page>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS

Trimble  Navigation  Limited  began  operations  in  1978  and  incorporated  in
California in 1981.  Trimble provides advanced  positioning  product  solutions,
most typically to commercial and government  users.  The principal  applications
served include surveying, construction,  agriculture, urban and natural resource
management,  defense,  and fleet and asset  management.  The Company's  products
typically  provide its  customers  benefits  that can include  lower costs,  and
higher   productivity.   Examples  of  products   include   systems  that  guide
agricultural and construction  equipment,  surveying  instruments,  systems that
track fleets of vehicles, and data collection systems that enable the management
of large amounts of geo referenced  information.  In addition,  the Company also
manufactures  components for in vehicle navigation and telematics  systems,  and
timing modules used in the synchronization of wireless networks.

NOTE 2: 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.
Estimates are used for revenue  recognition,  allowances for doubtful  accounts,
sales returns  reserve,  allowances  for inventory  valuation,  warranty  costs,
investments,  goodwill  impairments,  and income taxes among others.  The actual
results  experienced  by the Company  may differ  materially  from  management's
estimates.

Basis of Presentation

Trimble has a fiscal year that ends on the Friday nearest to December 31. Fiscal
2004, a 52-week year, ended on December 31, 2004 and fiscal 2003, also a 52-week
year,  ended on January 2, 2004.  Fiscal year 2002 was a 53-week year that ended
on January  2, 2003.  The  financial  results of fiscal  year 2002 have an extra
week, and therefore  will not be exactly  comparable to the prior and subsequent
52-week fiscal years.

These Consolidated  Financial  Statements include the results of Trimble and its
subsidiaries. Inter-company accounts and transactions have been eliminated.

Certain  amounts  from  prior  years  have been  reclassified  to conform to the
current  year  presentation.  The Company  has  reclassified  deferred  revenues
previously  included in accounts  receivable,  net to the liabilities section in
the  Consolidated  Balance  Sheets  in  fiscal  year  2004  and for all  periods
presented.

Foreign Currency Translation

Assets and liabilities of non-U.S. subsidiaries that operate in local currencies
are translated to U.S.  dollars at exchange rates in effect at the balance sheet
date, with the resulting translation adjustments directly recorded to a separate
component of accumulated other comprehensive income. Income and expense accounts
are translated at average  exchange rates during the year. Where the U.S. dollar
is the  functional  currency,  translation  adjustments  are recorded in foreign
currency transaction loss, net.

Cash and Cash Equivalents

Cash and cash  equivalents  include all cash and highly liquid  investments with
insignificant  interest rate risk and  maturities of three months or less at the
date of purchase. The carrying amount of cash and cash equivalents  approximates
fair value because of the short maturity of those instruments.

<page>

Fair Value of Financial Instruments

The fair value of certain of the Company's financial instruments, including cash
and cash equivalents,  and other accrued liabilities approximate cost because of
their short maturities. The fair value of investments is determined using quoted
market prices for those securities or similar financial instruments.

Concentration of Risk

Cash and cash  equivalents are maintained with several  financial  institutions.
Deposits  held with banks may exceed the amount of  insurance  provided  on such
deposits.  Generally,  these  deposits  may be  redeemed  upon  demand  and  are
maintained with financial  institutions  of reputable  credit and therefore bear
minimal credit risk.

The Company is also exposed to credit risk in the Company's  trade  receivables,
which are derived from sales to end user customers in diversified  industries as
well as various  resellers.  Trimble performs ongoing credit  evaluations of its
customers'  financial  condition  and limits the amount of credit  extended when
deemed necessary but generally does not require collateral.

With the  selection  of  Solectron  Corporation  in August 1999 as an  exclusive
manufacturing partner for many of its GPS products, Trimble became substantially
dependent upon a sole supplier for the  manufacture of many of its products.  In
addition,  the Company  relies on sole  suppliers  for a number of its  critical
components.

Allowance for Doubtful Accounts

Trimble  maintains   allowances  for  doubtful  accounts  for  estimated  losses
resulting from the inability of its customers to make required payments.

Trimble evaluates the collectibility of its trade accounts receivable based on a
number  of  factors  such as age of the  accounts  receivable  balances,  credit
quality,  historical experience, and current economic conditions that may affect
a customer's  ability to pay. In  circumstances  where the Company is aware of a
specific customer's inability to meet its financial  obligations to the Company,
a specific  allowance for bad debts is estimated and recorded  which reduces the
recognized  receivable to the estimated  amount Trimble believes will ultimately
be collected.  In addition to specific customer  identification of potential bad
debts,  bad debt charges are recorded  based on the  Company's  recent past loss
history and an overall assessment of past due trade accounts  receivable amounts
outstanding.

Inventories

Inventories  are stated at the lower of standard cost or market (net  realizable
value).  Standard  costs  approximate  actual  costs,  which are  generally on a
first-in, first out basis. The Company uses a standard cost accounting system to
value inventory and these standards are reviewed at a minimum of once a year and
multiple  times a year in the most  active  manufacturing  plants.  The  Company
provides  inventory   allowances  based  on  excess  and  obsolete   inventories
determined  primarily by future  demand  forecasts.  If actual  future demand or
market  conditions  are less  favorable  than  those  projected  by  management,
additional inventory write-downs may be required.

Software Development Costs

Software  development costs for internal use required to be capitalized pursuant
to  Statement  of  Position  No.  98-1,  "Accounting  for the Costs of  Computer
Software  Developed  or Obtained for  Internal  Use," have not been  material to
date.

Goodwill, Purchased Intangible Assets and Long-Lived Assets

Intangible assets include goodwill, assembled workforce,  distribution channels,
patents,  licenses,  technology,  acquired  backlog  and  trademarks  which  are
capitalized at cost.  Intangible assets with definite lives are amortized on the
straight-line  basis. Useful lives generally range from five to seven years with
weighted average useful life of 5.7 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

<page>

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.  Trimble  performed an annual  impairment  test of
goodwill  at the end of the  third  fiscal  quarter  of  2004,  2003  and  2002,
respectively,  and found  there was no  impairment  of  goodwill.  Trimble  will
continue to evaluate its goodwill for  impairment  on an annual basis at the end
of each fiscal third  quarter and whenever  events and changes in  circumstances
suggest that the carrying amount may not be recoverable.

Revenue Recognition

Trimble's  revenues are recorded in accordance  with the Securities and Exchange
Commission's   (SEC)  Staff   Accounting   Bulletin  (SAB)  No.  104,   "Revenue
Recognition." The Company recognizes product revenue when persuasive evidence of
an arrangement exists,  delivery has occurred, the fee is fixed or determinable,
and collectibility is reasonably assured. In instances where final acceptance of
the product is specified by the  customer or is  uncertain,  revenue is deferred
until all acceptance criteria have been met.

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, provided
we had no remaining obligations.

Contracts  and customer  purchase  orders are  typically  used to determine  the
existence of an arrangement.  Shipping documents and customer  acceptance,  when
applicable, are used to verify delivery. The Company assesses whether the fee is
fixed or determinable based on the payment terms associated with the transaction
and  whether  the sales  price is subject to refund or  adjustment.  The Company
assesses  collectibility based primarily on the creditworthiness of the customer
as determined by credit checks and analysis,  as well as the customer's  payment
history.

Trimble's shipment terms for US orders, and international  orders fulfilled from
its European  distribution  center are  typically  FCA (Free  Carrier)  shipping
point,  except  certain  sales to US government  agencies  which are shipped FOB
destination.  FCA shipping  point means that Trimble  fulfills the obligation to
deliver when the goods are handed over,  cleared for export, and into the charge
of the  carrier  named by the buyer at the named  place or point.  If no precise
point is  indicated by the buyer,  Trimble may choose  within the place or range
stipulated where the carrier will take the goods into carrier's charge. Shipping
and handling costs are included in the cost of goods sold.

Other  international  orders are  shipped  FOB  destination,  which  means these
international  orders  are not  recognized  as  revenue  until  the  product  is
delivered  and title has  transferred  to the buyer or FCA shipping  point.  FOB
destination  means that  Trimble  bears all costs and risks of loss or damage to
the goods up to that point.

Revenue to distributors and resellers is recognized upon delivery,  assuming all
other criteria for revenue recognition have been met. Distributors and resellers
do not have a right of return.

When a sale involves  multiple  elements the entire fee from the  arrangement is
allocated  to each  respective  element  based on its  relative  fair  value and
recognized  when  revenue  recognition  criteria  for each  element are met. The
amount of product revenue  allocated to an individual  element is limited to the
lesser of its relative fair value or the amount not  contingent on the Company's
delivery of other elements under the arrangement,  regardless of the probability
of the Company's performance.

Trimble's  software  arrangements  generally  consist of a license  fee and post
contract  customer  support  (PCS).  Trimble  has  established   vendor-specific
objective  evidence  (VSOE)  of fair  value for its PCS  contracts  based on the
renewal rate.  The remaining  value of the software  arrangement is allocated to
the license fee using the residual method, which revenue is primarily recognized
when the software  has been  delivered  and there are no remaining  obligations.
Revenue from PCS is recognized ratably over the term of the PCS agreement.

A reserve for sales returns is established based on historical trends in product
return rates  experienced  in the ordinary  course of business.  The reserve for
estimated  future returns is recorded as a reduction of our accounts  receivable
and revenue.  If the actual returns were to deviate from the historical  data on
which the sales reserve had been  established,  the  Company's  revenue could be
adversely affected.



<PAGE>


Support and Warranty

The  Company  accrues for  warranty  costs as part of its cost of sales based on
associated  material  product costs,  technical  support labor costs,  and costs
incurred by third parties performing work on Trimble's behalf. The products sold
are  generally  covered by a warranty for periods  ranging from 90 days to three
years, and in some instances up to 5.5 years.

While the Company engages in extensive  product quality  programs and processes,
including actively monitoring and evaluating the quality of component suppliers,
its warranty  obligation is affected by product  failure rates,  material usage,
and service  delivery  costs  incurred in correcting a product  failure.  Should
actual product failure rates,  material usage, or service  delivery costs differ
from the  estimates,  revisions to the  estimated  warranty  accrual and related
costs may be required.

Changes in the Company's  product warranty  liability during the 12 months ended
December 31, 2004 and January 2, 2004, are as follows:

                                     December 31,       January 2,
Fiscal Years Ended                       2004              2004
------------------                       ----              ----
(In thousands)

Beginning balance                  $      5,147        $    6,394
Warranties accrued                        7,333             4,417
Warranty claims                         (6,055)           (5,664)
                                        -------           -------
Ending Balance                     $      6,425        $    5,147
                                   ============        ==========

Guarantees, Including Indirect Guarantees of Indebtedness of Others

In the normal  course of  business  to  facilitate  sales of its  products,  the
Company indemnifies other parties, including customers,  lessors, and parties to
other  transactions  with the  Company,  with  respect to certain  matters.  The
Company has agreed to hold the other party harmless  against losses arising from
a breach  of  representations  or  covenants,  or out of  intellectual  property
infringement or other claims made against certain parties.  These agreements may
limit the time within which an indemnification  claim can be made and the amount
of the  claim.  In  addition,  the  Company  has  entered  into  indemnification
agreements  with its officers and  directors,  and the Company's  bylaws contain
similar indemnification obligations to the Company's agents.

It is not  possible  to  determine  the  maximum  potential  amount  under these
indemnification  agreements due to the limited history of prior  indemnification
claims  and the  unique  facts and  circumstances  involved  in each  particular
agreement.  Historically,  payments made by the Company  under these  agreements
were not material and no liabilities have been recorded for these obligations on
the Consolidated Balance Sheets as of December 31, 2004 and January 2, 2004.

Advertising Costs

The Company  expenses all advertising  costs as incurred.  Advertising  expenses
were approximately $9.5 million,  $9.2 million, and $6.3 million in fiscal 2004,
2003, and 2002, respectively.

Research and Development Costs

Research and development  costs are charged to expense as incurred.  The Company
received third party funding of approximately  $7.7 million,  $4.9 million,  and
$5.3 million in fiscal 2004, 2003, and 2002,  respectively.  The Company offsets
research and  development  expenses with any third party funding  received.  The
Company retains the rights to any technology developed under such arrangements.




<PAGE>


Stock Compensation

In accordance with the provisions of Statement of Financial Accounting Standards
No. 123 ("SFAS 123"),  "Accounting for Stock-Based  Compensation" and "Statement
of  Financial  Accounting  Standards  No. 148"  ("SFAS  148"),  "Accounting  for
Stock-Based   Compensation  -  Transition  and   Disclosure,"   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,  the  Company  does not
recognize compensation cost for stock options granted at fair market value. Note
15 of the  Consolidated  Financial  Statements  describe  the plans  operated by
Trimble.

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 as well as the stock-based  employee  compensation cost, net of
related tax effects,  that would have been included in the  determination of net
income if the fair value  based  method  had been  applied  to all  awards.  The
effects on pro forma  disclosure  of applying  SFAS No. 123 are not likely to be
representative of the effects on pro forma disclosure of future years.

Pro forma information regarding net income and earnings per share is required by
SFAS  No.  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 No.123.

Under the  Black-Scholes  option pricing model, the  weighted-average  estimated
values of employee  stock options  granted  during fiscal years 2004,  2003, and
2002 were  $13.85,  $10.03,  and $5.64,  respectively.  The value of each option
grant is estimated on the date of grant using the  Black-Scholes  option pricing
model with the following weighted-average assumptions:



<table>
<caption>
                                                  December 31,    January 2,     January 3,
Fiscal Years Ended                                   2004            2004            2003
------------------                                   ----            ----            ----
<s>                                              <c>             <c>            <c>   
Expected dividend yield                                -               -              -
Expected stock price volatility                     45.98%          59.87%         52.70%
Risk free interest rate                              3.66%           3.34%          3.13%
Expected life of options after vesting            1.74 years      1.56 years     1.18 years
</table>


An  analysis  of  historical  information  is used to  determine  the  Company's
assumptions, to the extent that historical information is relevant, based on the
terms of the grants being  issued in any given  period.  The  expected  life for
options granted  reflects  options granted to existing  employees that generally
vest ratably over five years from the date of grant.

Under the Employee Stock Purchase  Plan,  rights to purchase  shares are granted
during  the second and fourth  quarter  of each  year.  The  estimated  weighted
average value of rights  granted under the Employee  Stock  Purchase Plan during
fiscal years 2004, 2003, and 2002 were $7.31, $3.57, and $3.06 respectively. The
fair value of rights  granted  during 2004,  2003 and 2002 was  estimated at the
date of grant using the following weighted average assumptions:


<table>
<caption>
                                                  December 31,    January 2,     January 3,
Fiscal years ended                                   2004           2004           2003
------------------                                   ----           ----           ----
<s>                                              <c>             <c>            <c>     
Expected dividend yield                               -               -              -
Expected stock price volatility                    45.98%          59.87%         52.70%
Risk free interest rate                             3.66%           3.34%          3.13%
Expected life of options after vesting            0.5 years       0.5 years      0.5 years

</table>



<PAGE>


Trimble's pro forma information is as follows:

<table>
<caption>
                                                  December 31,         January 2,          January 3,
(in thousands, except per share amounts)              2004                2004                2003
----------------------------------------              ----                ----                ----
<s>                                             <c>                 <c>                <c>         
Net income, as reported                          $     67,680        $    38,485        $    10,324
Compensation expense, net of tax                        8,617              9,817              9,895
                                                        -----              -----              -----
Pro-forma net income                             $     59,063        $    28,668        $       429

Reported basic earnings per share                $       1.32        $      0.81        $      0.24
                                                 ------------        -----------        -----------
Pro-forma basic earnings per share               $       1.15        $      0.60        $      0.01
                                                 ------------        -----------        -----------

Reported diluted earnings per share              $       1.23        $      0.77        $      0.24
                                                 ------------        -----------        -----------
Pro-forma diluted earnings per share             $       1.07        $      0.57        $      0.01
                                                 ------------        -----------        -----------
</table>


 SFAS No. 123 requires the use of option  pricing models that were not developed
for use in valuing  employee stock  options.  The  Black-Scholes  option pricing
model  was  developed  for use in  estimating  the  fair  value  of  short-lived
exchange-traded  options  that  have  no  vesting  restrictions  and  are  fully
transferable.  In addition,  option  pricing  models require the input of highly
subjective  assumptions,  including  the  option's  expected  life and the price
volatility of the underlying stock. Because the Company'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 the opinion of management,  the existing models do not
necessarily  provide a reliable  single  measure  of the fair value of  employee
stock options.

Depreciation and Amortization

Depreciation of property and equipment owned 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 two to six years for machinery  and  equipment,  five
years for furniture and fixtures,  two to five years for computer  equipment and
software, and the life of the lease for leasehold improvements.

Income Taxes

Income taxes are accounted for under the liability  method whereby  deferred tax
asset or liability  account  balances are  calculated  at the balance sheet date
using current tax laws and rates in effect for the year in which the differences
are  expected to affect  taxable  income.  A valuation  allowance is recorded to
reduce the carrying amounts of deferred tax assets if it is more likely than not
that such assets will not be realized.

Computation of Earnings Per Share

Number of shares used in calculation of 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 January 2003, the Financial Accounting Standards Board issued  Interpretation
No. 46,  "Consolidation  of  Variable  Interest  Entities"  (FIN 46),  which was
amended by FIN 46R issued in December 2003.  This  interpretation  of Accounting
Research  Bulletin  No.  51,  "Consolidated   Financial  Statements,"  addresses
consolidation by business  enterprises of variable interest entities (VIEs) that
either:  (1) do not have  sufficient  equity  investment  at risk to permit  the
entity to finance  its  activities  without  additional  subordinated  financial
support, or (2) for which the equity investors lack an essential  characteristic
of a controlling financial interest.  This Interpretation applies immediately to
VIEs created after January 31, 2003. It also applies in the first fiscal year or
interim period ending after March 15, 2004, to VIEs created  before  February 1,
2003  in  which  an  enterprise  holds  a  variable  interest.  FIN 46  requires
disclosure of VIEs in financial  statements issued after January 31, 2003, if it
is reasonably  possible that as of the transition  date: (1) the company will be
the primary  beneficiary of an existing VIE that will require  consolidation or,
(2)  the  company  will  hold  a  significant  variable  interest  in,  or  have

<page>

significant  involvement  with, an existing VIE. Trimble completed its review of
the  requirements  of FIN 46 and as a result of that  review,  no entities  were
identified requiring disclosure or consolidation under FIN 46.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment." SFAS No.
123R requires  employee stock options and rights to purchase  shares under stock
participation  plans to be  accounted  for  under  the fair  value  method,  and
eliminates  the ability to account  for these  instruments  under the  intrinsic
value method  prescribed  by APB Opinion No. 25, and allowed  under the original
provisions of SFAS No. 123. SFAS No. 123R requires the use of an option  pricing
model for estimating fair value,  which is amortized to expense over the service
periods.  The  requirements  of SFAS No. 123R are effective  for fiscal  periods
beginning after June 15, 2005. If the Company had applied the provisions of SFAS
No. 123R to the financial  statements  for the period ending  December 31, 2004,
assuming that adoption would result in amounts  similar to the current pro forma
disclosures under SFAS 123R, net income would have been reduced by approximately
$8.6  million.  SFAS No.  123R  allows for  either  prospective  recognition  of
compensation  expense  or  retrospective  recognition,  which may be back to the
original  issuance  of SFAS No.  123 or only to  interim  periods in the year of
adoption. The Company is currently evaluating these transition methods.

NOTE 3: EARNINGS PER SHARE

The following data show the amounts used in computing earnings per share and the
effect on the  weighted-average  number of shares of potentially dilutive common
stock.


<table>
<caption>
                                                   December 31,        January 2,        January 3,
Fiscal Years Ended                                     2004               2004              2003
------------------                                     ----               ----              ----
(In thousands, except per share data)
<s>                                              <c>                <c>               <c>
Numerator:
  Income available to common shareholders:
    Used in basic and diluted earnings per
         share                                    $   67,680         $   38,485        $   10,324

Denominator:
  Weighted average number of common shares
         used in basic earnings per share             51,278             47,505            42,860
  Effect of dilutive securities (using
         treasury stock method):
        Common stock options                           2,947              2,058               705
        Common stock warrants                            723                449                13
  Weighted average number of common shares            54,948             50,012            43,578
         and dilutive potential common
         shares used in diluted earnings
         per share

Basic earnings per share                          $     1.32         $     0.81        $     0.24
Diluted earnings per share                        $     1.23         $     0.77        $     0.24
</table>



NOTE 4: BUSINESS COMBINATIONS

Acquisitions

The following is a summary of  acquisitions  made by Trimble during fiscal 2004,
2003 and 2002 all of which were accounted for as purchases:


<table>
<caption>

Acquisition           Primary Service or Product                  Operating Segment               Acquisition Date
-----------           --------------------------                  -----------------               ----------------
<s>                  <c>                                         <c>                             <c>   
LeveLite              Low-end construction instrument products    Engineering & Construction      August 15, 2002
Applanix              Inertial navigation systems and GPS         Portfolio Technologies          July 7, 2003
MENSI S.A.            3D laser scanning technology                Engineering & Construction      December 9, 2003
TracerNET Corp.       Wireless fleet management solutions         Mobile Solutions                March 5, 2004
GeoNav GmbH           Customized field data collection solutions  Engineering and Construction    July 5, 2004
</table>


<page>

The  Consolidated  Financial  Statements  include the operating  results of each
business from the date of acquisition.  Pro forma results of operations have not
been presented  because the effects of these  acquisitions  were not material to
the Company's results.

The  total  purchase  consideration  for  each  of the  above  acquisitions  was
allocated  to the  assets  acquired  and  liabilities  assumed  based  on  their
estimated  fair  values  as of the  date of  acquisition.  The  following  table
summarizes the Company's  business  combinations  completed  during fiscal years
2004, 2003 and 2002 (in thousands):


<table>
<caption>
                                            December 31,       January 2,        January 3,
Fiscal Years Ended                              2004              2004              2003
------------------                              ----              ----              ----
<s>                                       <c>                 <c>               <c>      
Purchase price                             $   12,246          $   22,352        $  8,880
Acquisition costs                                 279                 810             144
Restructuring costs                                 -                   -             555
                                           ----------          ----------        --------
        Total purchase price               $   12,525          $   23,162        $  9,579

Purchase price allocation:
    Fair value of tangible net assets
    acquired                               $      194          $    5,176        $  6,115
    Deferred tax                                2,455              (1,153)              -
    Identified intangible assets                2,117               3,440               -
    Goodwill                                    7,759              15,699           3,464
                                                -----              ------           -----
        Total                              $   12,525          $   23,162        $  9,579
                                           ==========          ==========        ========
</table>



Purchase  consideration  for the  acquisition  in fiscal 2002  included  655,626
shares of common  stock and  additional  earn-out  payments  not to exceed  $3.9
million (in common stock and cash payment) based on future revenues derived from
existing  product  sales  to a  certain  customer  and a share  of the  payments
received from the settlement of potential  litigation.  As of December 31, 2004,
the total earn-out amount was approximately $3.2 million resulting in additional
goodwill and a purchase price of approximately $8.9 million.

The purchase consideration for Applanix consisted of 1,154,240 shares of Trimble
common stock, of which 1,083,294 are issued.  Former Applanix  shareholders have
the  right to  receive  the  17,214  shares of  Trimble  common  stock  upon the
surrender of  exchangeable  shares of a Trimble  subsidiary  and another  53,732
pursuant to meeting performance criteria under the terms of the agreement.

The MENSI S.A.  acquisition  agreement  provides for Trimble to make  additional
earn-out  cash  payments  not to  exceed  Euro 3 million  (approximately  US$3.7
million on December  9, 2003)  based on future  revenue  derived  from  existing
product  sales.  As  of  December  31,  2004,  the  total  earn-out  amount  was
approximately $0.7 million resulting in additional goodwill and a purchase price
of approximately $5.0 million.

Intangible Assets

The following tables present details of the Company's total intangible assets:
<page>


<table>
<caption>
                                                                            December 31,          January 2,
As of                                                                           2004                 2004
-----                                                                           ----                 ----
(In thousands)
<s>                                                                       <c>                   <c>     
Intangible assets:
  Intangible assets with definite life:
     Existing technology                                                   $    35,037           $   32,389
     Trade names, trademarks, patents, backlog and other intellectual
         properties                                                             22,111               20,911
                                                                                ------               ------
Total intangible assets with definite life                                      57,148               53,300
Less accumulated amortization                                                  (43,313)             (33,559)
                                                                               -------              ------- 
Total net intangible assets                                                $    13,835           $   19,741
                                                                           ===========           ==========
</table>


The following table presents  details of the  amortization  expense of purchased
and other  intangible  assets as  reported  in the  Consolidated  Statements  of
Income:

                           December 31,      January 2,       January 3,
Fiscal Years Ended            2004              2004             2003
------------------            ----              ----             ----
(In thousands)

Reported as:
   Cost of sales           $    183           $    604         $     868
   Operating expenses         8,327              7,312             8,300
                              -----              -----             -----
         Total             $  8,510           $  7,916         $   9,168


The estimated future  amortization  expense of intangible  assets as of December
31, 2004, is as follows (in thousands):

                                  Amortization
                                     Expense
                                     -------

2005                              $   6,581
2006                                  2,784
2007                                  1,980
2008                                  1,080
2009                                    967
Thereafter                              443
                                  ---------
Total                             $  13,835
                                  =========

Goodwill

Goodwill consisted of the following:

                                                  December 31,        January 2,
As of                                                 2004               2004
-----                                                 ----               ----
(In thousands)

    Goodwill, Spectra Precision acquisition    $    212,915        $   205,562
    Goodwill, other acquisitions                     46,607             35,863
                                                     ------             ------
Goodwill                                       $    259,522        $   241,425


The increase in goodwill of  approximately  $18.1 million during fiscal 2004 was
primarily due to the acquisition of TracerNET and GeoNav of  approximately  $7.8
million and the foreign  exchange rate impact of  approximately  $9.2 million on
non-US  currency  denominated  goodwill  assets.  See Note 7 of the Notes to the
Consolidated Financial Statements for additional information regarding Trimble's
goodwill by operating segment.




<PAGE>


NOTE 5: JOINT VENTURE

Caterpillar Trimble Control Technologies Joint Venture

On April 1, 2002, Caterpillar Trimble Control Technologies LLC ("CTCT"), a joint
venture  formed by Trimble and  Caterpillar  began  operations.  CTCT,  based in
Dayton,  Ohio, is 50% owned by Trimble and 50% owned by Caterpillar,  with equal
voting  rights.  It develops and markets  next  generation  advanced  electronic
guidance and control  products  for  earthmoving  machines in the  construction,
mining,  and waste industries.  Under the terms of the joint venture  agreement,
Caterpillar contributed $11.0 million cash plus selected technology, for a total
contributed value of $14.5 million,  and Trimble  contributed  selected existing
machine control product technologies valued at $25.5 million. Additionally, both
companies  have  licensed  patents and other  intellectual  property  from their
portfolios to CTCT. During the first fiscal quarter of 2002,  Trimble received a
special cash distribution of $11.0 million from CTCT.

Trimble has recorded the cash  distribution of $11.0 million as a deferred gain,
being amortized to the extent that losses are  attributable  from CTCT under the
equity  method of  accounting.  When and if CTCT is  profitable on a sustainable
basis and future operating  losses are not  anticipated,  Trimble will recognize
the  un-amortized  portion of the $11.0 million as a gain. To the extent that it
is possible that the Company will have any future-funding obligation relating to
CTCT,  then the relevant amount of the $11.0 million will be deferred until such
a time, as the funding obligation no longer exists. This un-amortized portion of
the deferred gain was  approximately  $9.2 million at December 31, 2004 and $9.8
million at January 2, 2004. Both Trimble's  share of profits  (losses) under the
equity  method  and the  amortization  of the $11.0  million  deferred  gain are
included  in  expense  for  affiliated  operations,   net  in  the  Consolidated
Statements of Income.

The expenses for affiliated  operations at CTCT also includes  incremental costs
as a result of purchasing  products  from CTCT at a higher price than  Trimble's
original  manufacturing costs,  partially offset by contract  manufacturing fees
charged to CTCT. In addition, Trimble received reimbursement of employee-related
costs from CTCT for Trimble employees devoted to CTCT.  Reimbursed costs totaled
$9.7 million,  $7.9 million,  and $3.9 million in fiscal 2004,  2003,  and 2002,
respectively. The reimbursements were offset against operating expenses.


<table>
<caption>


                                                       December 31,      January 2,       January 3,
Fiscal Years Ended                                         2004             2004             2003
------------------                                         ----             ----             ----
(In millions)
<s>                                                    <c>               <c>              <c>  
CTCT incremental pricing effects, net                   $   8.8           $   5.9          $   4.0
Trimble's 50% share of CTCT's reported (gain) loss          0.5               0.9              0.2
Amortization of deferred gain                              (0.7)             (0.9)            (0.2)
                                                           ----              ----             -----
Total CTCT expense for affiliated operations, net       $   8.6           $   5.9          $   4.0
                                                        =======           =======          ========
</table>


The net outstanding  balance due from CTCT was $0.7 million at December 31, 2004
and $0.8 million at January 2, 2004 and is included in account receivables,  net
on the Consolidated Balance Sheets.

Nikon-Trimble Joint Venture

On March 28, 2003,  Trimble and Nikon  Corporation  entered into an agreement to
form a joint  venture in Japan,  Nikon-Trimble  Co.,  Ltd.,  which  assumed  the
operations  of  Nikon  Geotecs  Co.,  Ltd.,  a  Japanese   subsidiary  of  Nikon
Corporation   and  Trimble   Japan  KK,  a  Japanese   subsidiary   of  Trimble.
Nikon-Trimble  began  operations  in July  2003.  It  focuses  on the design and
manufacture of surveying  instruments  including  mechanical  total stations and
related  products.  In Japan,  this joint  venture  distributes  Nikon's  survey
products as well as Trimble's products.  Outside Japan, Trimble is the exclusive
distributor of Nikon survey and construction products.

Under the terms of the Nikon-Trimble agreement,  Nikon contributed approximately
$10 million in cash,  while Trimble  contributed  approximately  $4.1 million in
cash and 349,251 common stock shares valued at approximately  $5.9 million.  The
Nikon-Trimble  joint venture  purchased  certain tangible and intangible  assets
from Nikon Geotecs Co.,  Ltd. and Trimble  Japan KK. The carrying  amount of the
investment  was  approximately  $13.5  million at  December  31,  2004 and $10.7
million at January 2, 2004.

<page>

Nikon-Trimble is 50% owned by Trimble and 50% owned by Nikon,  with equal voting
rights.  Trimble has adopted the equity method of accounting  for its investment
in  Nikon-Trimble,  with its share of profit  or loss  from this  joint  venture
included  in  expenses  for  affiliated  operations,  net  in  the  Consolidated
Statements  of  Income.  During  fiscal  2004,  Trimble  recorded  a  profit  of
approximately $1.1 million as its proportionate share of the net income.  During
fiscal 2003,  and the first year of the joint  venture's  operations,  Trimble's
proportionate share of the net loss was $0.3 million.

At December 31, 2004, the net payable by Trimble to Nikon-Trimble related to the
purchase and sale of products from and to  Nikon-Trimble  is $2.5 million and is
included in accounts payable on the Consolidated  Balance Sheets.  At January 2,
2004,  the   outstanding   balance  from   Nikon-Trimble   due  to  Trimble  was
approximately  $1.4  million  related to the  transfer of certain  tangible  and
intangible  assets  from  Trimble  Japan  KK,  included  in  accounts  and other
receivables,  net and $2.0  million  net  payable by  Trimble  to  Nikon-Trimble
related to the purchase and sale of products from and to Nikon-Trimble  included
in accrued liabilities on the Consolidated Balance Sheets.

NOTE 6: CERTAIN BALANCE SHEET COMPONENTS

The  following  tables  provide  details of  selected  balance  sheet  items (in
thousands):

                                         December 31,        January 2,
As of                                        2004               2004
-----                                        ----               ----
Inventories:
     Raw materials                        $    26,062        $  20,927
     Work-in-process                            3,989            3,876
     Finished goods                            57,694           46,023
                                               ------           ------
          Total                           $    87,745        $  70,826
                                          ===========        =========
Property and equipment, net:
     Machinery and equipment              $    71,882       $  66,634
     Furniture and fixtures                    10,521           9,085
     Leasehold improvements                     5,861           4,502
     Buildings                                  5,297           5,396
     Land                                       1,231           1,231
                                                -----           -----
                                               94,792          86,848
     Less accumulated depreciation            (63,801)        (59,469)
                                             -------          ------- 
          Total                           $    30,991       $  27,379
                                          ===========       =========
Other current assets:
     Prepaid expenses                     $     5,775       $   5,122
     Other                                      2,103           3,725
                                                -----           -----
          Total                           $     7,878       $   8,847
                                          ===========       =========


NOTE 7: OPERATING SEGMENT AND GEOGRAPHIC INFORMATION

To achieve  distribution,  marketing,  production,  and technology advantages in
Trimble's targeted markets,  the Company manages its operations in the following
five segments:

o    Engineering  and  Construction  -- Consists of products  currently  used by
     survey and  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.  During the third quarter of fiscal 2004 the Company acquired
     GeoNav GmbH and its performance is reported in this business segment

o    Field Solutions -- Consists of products that provide solutions in a variety
     of  agriculture  and fixed asset  applications,  primarily  in the areas of
     precise land leveling,  machine guidance,  yield monitoring,  variable-rate
     applications of fertilizers and chemicals,  and fixed asset data collection

<page>

     for a variety of  governmental  and private  entities.  This  segment is an
     aggregation  of the mapping and  geographic  information  systems (GIS) and
     agriculture  businesses.  Trimble has aggregated these business  operations
     under a single  general  manager  in  order to  continue  to  leverage  its
     research and  development  activities due to the  similarities  of products
     across the segment.

o    Component  Technologies  --  Consists  of  products  including  proprietary
     chipsets,  printed  circuit boards,  modules,  and licenses of intellectual
     property.  The applications into which end users currently  incorporate the
     component products include timing  applications for synchronizing  wireless
     networks,  in-vehicle navigation and telematics systems,  fleet management,
     security systems, data collection networks,  and wireless handheld consumer
     products.

o    Mobile  Solutions -- Consists of products  that enable end users to monitor
     and   manage   their   mobile   assets  by   communicating   location   and
     activity-relevant  information from the field to the office. Trimble offers
     a range of  products  that  address  a number  of  sectors  of this  market
     including truck fleets, security,  telematics,  and public safety vehicles.
     During the first quarter of fiscal 2004 the Company acquired  TracerNET and
     its performance is reported in this business segment.

o    Portfolio Technologies -- The various operations that comprise this segment
     were  aggregated on the basis that no single  operation  accounted for more
     than 10% of Trimble's  total revenue.  During the first two fiscal quarters
     of 2003,  this  segment was  comprised  solely of the Military and Advanced
     Systems  business.  During  the third  quarter of fiscal  2003 the  Company
     completed the  acquisition  of Applanix and its  performance is reported in
     this business segment. During the fourth quarter of fiscal 2004 the Company
     introduced  Trimble  Outdoors  and  its  performance  is  reported  in this
     business segment.

Trimble  evaluates  each of its segment's  performance  and allocates  resources
based on profit and loss from operations before income taxes, and some corporate
allocations.  Trimble  and  each of its  segments  employ  the  same  accounting
policies.

The following table presents revenues, operating income (loss), and identifiable
assets  for the five  segments.  Operating  income  (loss) is net  revenue  less
operating  expenses,   excluding  general  corporate   expenses,   amortization,
restructuring  charges,  non-operating  income (expense),  and income taxes. The
identifiable  assets that  Trimble's  chief  operating  decision  maker views by
segment are accounts receivable and inventory.


<table>
<caption>
                                                        December 31,         January 2,       January 3,
Fiscal Years Ended                                          2004                2004             2003
------------------                                          ----                ----             ----
(in thousands)
<s>                                                    <c>                  <c>               <c>       
Engineering & Construction
Revenue                                                 $  440,478           $  367,058        $  319,615
Operating income before corporate allocations               79,505               60,664            53,453
Accounts receivable                                         90,743               84,897            73,474
Inventories                                                 65,116               56,008            46,332
Goodwill                                                   238,801              229,287           205,933

Field Solutions
Revenue                                                    105,591               79,879            67,259
Operating income before corporate allocations               25,151               14,500             9,676
Accounts receivable                                         19,141               16,589            11,598
Inventories                                                  7,016                3,398             7,337

Component Technologies
Revenue                                                     65,522               64,193            59,755
Operating income before corporate allocations               13,880               16,560            10,673
Accounts receivable                                          9,377               10,003            11,276
<page>                                                                               
Inventories                                                  5,271                2,021             2,853

Mobile Solutions
Revenue                                                     23,531               12,981             8,486
Operating loss before corporate allocations                 (5,997)              (6,452)          (12,039)
Accounts receivable                                          9,073                4,103             1,960
Inventories                                                  5,735                3,038             1,986
Goodwill                                                     7,660                    -                 -
                                                                            
Portfolio Technologies
Revenue                                                     33,686               16,792            11,487
Operating income (loss) before corporate allocations         4,866               (1,686)              557
Accounts receivable                                          8,283                7,321             1,966
Inventories                                                  4,607                6,361             2,636
Goodwill                                                    13,061               12,138                 -
Total
Revenue                                                 $  668,808           $  540,903        $  466,602
Operating income before corporate allocations              117,405               83,586            62,320
Accounts receivable (1)                                    136,617              122,913           100,274
Inventories                                                 87,745               70,826            61,144
Goodwill                                                   259,522              241,425           205,933
</table>



(1) As presented, accounts receivable represents trade receivables, gross, which
are specified between segments.

The following are  reconciliations  corresponding  to totals in the accompanying
Consolidated Financial Statements:

                                   December 31,     January 2,      January 3,
Fiscal Years Ended                    2004            2004            2003
------------------                    ----            ----            ----
(in thousands)
Operating income:
Total for reportable divisions     $  117,405       $   83,586      $  62,320
Unallocated corporate expenses        (31,780)         (29,651)       (28,497)
                                      -------          -------        ------- 
   Operating income                $   85,625       $   53,935      $  33,823
                                   ==========       ==========      =========


                                                      December 31,   January 2,
As of                                                    2004           2004
-----                                                    ----           ----
(in thousands)
Assets:
Accounts receivable total for reportable segments     $  136,617     $  122,913
Unallocated (1)                                          (12,679)       (18,279)
                                                         -------        ------- 
   Accounts receivable, net                           $  123,938     $  104,634
                                                      ==========     ==========

(1) Includes  trade-related  accruals and cash  received in advance that are not
allocated by segment.

The geographic  distribution of Trimble's  revenues and  identifiable  assets is
summarized  in the table  below.  Other  foreign  countries  include  Canada and
countries within South and Central America. Identifiable assets indicated in the
table below exclude  inter-company  receivables,  investments  in  subsidiaries,
goodwill, and intangibles assets.


<table>
<caption>
                                                                     Geographic Area
                                                                     ---------------
                                                         Europe                      Other
                                                       Middle East                   Non-US
Fiscal Years Ended                           US          Africa          Asia       Countries      Eliminations       Total
------------------                           --          ------          ----       ---------      ------------       -----
(In thousands)
<s>                                    <c>             <c>            <c>           <c>             <c>            <c>       
December 31, 2004
   Sales to unaffiliated customers (1)  $   331,607     $  196,737     $  86,118     $   54,346      $        -     $  668,808
   Inter-geographic transfers               140,057        143,094        10,626              -        (293,777)             -
                                            -------        -------        ------                       --------               
   Total revenue                        $   471,664     $  339,831     $  96,744     $   54,346      $ (293,777)    $  668,808
   Identifiable assets                  $   234,328     $  117,319     $   6,959     $   12,697      $        -     $  371,303

January 2, 2004
   Sales to unaffiliated customers (1)  $   265,846     $  166,153     $  70,257     $   38,648      $        -     $  540,903

<page>

   Inter-geographic transfers               112,623        116,185             -          3,755        (232,563)             -
                                            -------        -------                        -----        --------               
   Total revenue                        $   378,469     $  282,338     $  70,257     $   42,403      $ (232,563)    $  540,903
   Identifiable assets                  $   172,850     $   91,008     $   7,549     $   12,330               -     $  283,737

January 3, 2003
   Sales to unaffiliated customers (1)  $   235,716     $  136,551     $  60,878     $   33,457      $        -     $  466,602
   Inter-geographic transfers                62,843         73,625             -          4,121        (140,589)             -
                                             ------         ------                        -----        --------               
   Total revenue                        $   298,559     $  210,176     $  60,878     $   37,578      $ (140,589)    $  466,602
   Identifiable assets                  $   127,594     $   70,057     $   9,955     $    5,743      $     (864)    $  212,485
</table>


(1) Sales attributed to countries based on the location of the customer.

Transfers  between US and non-US  geographic  areas are made at prices  based on
total costs and  contributions  of the supplying  geographic area. The Company's
subsidiaries in Asia have derived revenue from commissions from US 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.
In fiscal 2002,  Germany  comprised  approximately  16% of sales to unaffiliated
customers.  Other than the United States,  no other country  comprised more than
10% of sales to  unaffiliated  customers  for any periods  presented,  except as
disclosed above.

Revenues by product  groups are not  practicable to obtain and therefore are not
presented.

No single  customer  accounted  for 10% or more of Trimble's  total  revenues in
fiscal years 2004, 2003, and 2002.

NOTE 8: RESTRUCTURING CHARGES

Restructuring  charges of $0.6  million,  $2.0  million,  and $1.1  million were
recorded in fiscal  years 2004,  2003 and 2002.  The charges in fiscal 2004 were
primarily  related to severance  costs due to the  realignment of Trimble Mobile
Solutions,  Inc.,  while  charges  in fiscal  2003  were  primarily  related  to
Trimble's  Japanese  office  relocation due to the  Nikon-Trimble  joint venture
formation.  As a  result  of  these  actions,  the  headcount  of  the  affected
operations  decreased  by  36,  77  and  49 in  fiscal  2004,  2003,  and  2002,
respectively.

As of December  31,  2004,  the  remaining  accrual  balance of $0.4  million is
primarily related to severance expected to be paid in fiscal 2005. As of January
2, 2004, the restructuring  accrual balance was approximately $0.4 million.  The
liability for  restructuring  costs is recorded in other accrued  liabilities in
the Consolidated Balance Sheets.

NOTE 9: LONG-TERM DEBT

Long-term debt consisted of the following:

                                            December 31,     January 2,
As of                                           2004            2004
-----                                           ----            ----
(In thousands)

 Credit Facilities:
    Term loan                             $      31,250   $     43,750
    Revolving credit facility                     7,000         44,000
Promissory notes and other                          746          2,736
                                                    ---          -----
                                                 38,996         90,486

Less current portion of long-term debt           12,500         12,885
                                                 ------         ------
    Non-current portion                   $      26,496   $     77,601
                                          =============   ============




<PAGE>


The  following  summarizes  the  future  cash  payment  obligations   (excluding
interest) as of December 31, 2004:

<table>
<caption>
                                                                                                         2010 and
                                        Total       2005        2006       2007       2008      2009      Beyond
                                        -----       ----        ----       ----       ----      ----      ------
(in thousands)
<s>                                  <c>        <c>         <c>        <c>        <c>        <c>       <c>       
 Credit Facilities:
    Term loan                         $  31,250  $   12,500  $  12,500  $   6,250  $       -  $      -  $        -
    Revolving credit facility             7,000       7,000          -          -          -         -           -
 Promissory note and other                  746          60        189          -        119       378           -
                                            ---          --        ---                   ---       ---            
Total contractual cash obligations    $  38,996  $   19,560  $  12,689  $   6,250  $     119  $    378  $        -
                                      =========  ==========  =========  =========  =========  ========  ==========
</table>


Credit Facilities

On June 25, 2003, Trimble obtained a $175 million secured Credit Facility ("2003
Credit  Facility")  from a syndicate of nine banks to repay a Subordinated  Note
and refinance $200 million of senior, secured credit facilities obtained in July
of 2000. The 2003 Credit  Facility is also used for ongoing  working capital and
general corporate needs.

At December 31, 2004,  Trimble had  approximately  $38.3  million of  borrowings
under the 2003 Credit Facility,  comprised of a $31.3 million term loan and $7.0
million of a $125 million revolver. The Company has access to an additional $118
million of cash under the terms of the revolving  credit  facility.  The Company
has  commitment  fees on the unused portion of 0.5% if the Leverage Ratio (which
is  defined  as  total   indebtedness  to  Earnings  before   Interest,   Taxes,
Depreciation and Amortization  (EBITDA), as defined in the related agreement) is
2.0 or greater and 0.375% if the Leverage Ratio is less than 2.0.

Pricing of interest for borrowings under the 2003 Credit Facility as of December
31,  2004 is at LIBOR  plus a spread of 1.50%.  The  spread is tied to a formula
based on the Leverage Ratio.

The Credit Facility is secured by all of the Company's  material assets,  except
for assets that are subject to foreign tax  considerations.  Financial covenants
of the 2003 Credit  Facility  include  leverage,  fixed charge,  and minimum net
worth tests. At December 31, 2004,  Trimble was in compliance with all financial
debt  covenants.  The  amount  due under the  revolver  loan is paid as the loan
matures on June 25, 2006, and the loan  commitment  fees are paid on a quarterly
basis.

Under the terms of the 2003  Credit  Facility,  the  Company  is  allowed to pay
dividends and  repurchase  shares of common stock up to 25% of net income in the
previous fiscal year.

Due to the full  repayment of the  subordinated  note which financed the Spectra
Precision Group acquisition and the refinancing of the 2000 Credit Facility, the
Company wrote off approximately  $3.6 million of unamortized debt issuance costs
and  warrants  issued in  connection  with the  subordinated  note,  as interest
expense in fiscal 2003.

Promissory Note and Others

As  of  December  31,  2004,  the  Company  had  other  notes  payable  totaling
approximately   $0.8  million   consisting  of   government   loans  to  foreign
subsidiaries.

NOTE 10: COMMITMENTS AND CONTINGENCIES

Operating Leases

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

Future minimum payments  required under  non-cancelable  operating leases are as
follows:

<page>

                            Operating
                          Lease Payments
                          --------------
(In thousands)

2005                         $ 11,412
2006                            3,652
2007                            2,939
2008                            2,078
2009                            1,940
Thereafter                      1,936
                                -----
Total                        $ 23,957
                             --------

Net rent expense under operating  leases was $10.9 million in fiscal 2004, $13.2
million in fiscal 2003,  and $5.9 million in fiscal  2002.  Sublease  income was
$38,000, $1.7 million, and $4.7 million, respectively.

Purchase Commitments with a Supplier

Trimble  entered into a  significant  supply  agreement in fiscal 2004 that sets
forth minimum  purchase  commitments  for outsourced  services.  The term of the
supply  agreement  is the  earlier of four years from the initial  product  ship
date, or when Trimble has paid for a cumulative  total of 200,000 billable hours
(approximately  $10.4 million).  Should Trimble not purchase and pay for 200,000
hours,  then Trimble  will  compensate  the  supplier for 20% of the  shortfall.
Thereafter,  the contract  continues in effect until  terminated by either party
with 30 days prior written  notice to the other party.  As of December 31, 2004,
based on current  hours earned to date the future  obligation  is  approximately
$7.7 million which is expected to be paid over the next two years.  Trimble does
not expect a shortfall based on current hours earned to date.

NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of financial instruments outstanding are as follows:


<table>
<caption>
                                                Carrying            Fair       Carrying          Fair
                                                 Amount            Value        Amount          Values
                                                 ------            -----        ------          ------
                                                    December 31, 2004               January 2, 2004
                                                    -----------------               ---------------
As of
(In thousands)
<S>                                             <c>            <c>            <c>              <c>   
Assets:
   Cash and cash equivalents                     $ 71,872       $ 71,872       $ 45,416         $ 45,416
   Forward foreign currency exchange contracts        639            539          1,412            1,328
   Accounts and other receivable, net             123,938        123,938        104,634          104,634

Liabilities:
   Credit facilities                             $ 38,250       $ 38,250       $ 87,750         $ 87,750
   Promissory note and other                          746            737          2,736            2,335
   Accounts payable                                43,551         43,551         26,019           26,019

</table>


The fair value of the bank borrowings,  and promissory notes 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 the
difference  between  the  market  price and the  carrying  amount of  comparable
contracts. These contracts are adjusted to fair value at the end of every month.

NOTE 12: INCOME TAXES

Trimble's income tax provision (benefit) consisted of the following:
<page>
                                    December 31,    January 2,      January 3,
Fiscal Years Ended                      2004           2004            2003
------------------                      ----           ----            ----
(In thousands)

US Federal:
      Current                      $    18,196     $       513     $        -
      Deferred                         (17,995)         (7,000)             -
                                       -------           ------               
                                           201          (6,487)             -
                                           ---          ------               
US State:
      Current                            2,895             250            142
      Deferred                            (897)           (600)             -
                                          ----            ----               
                                         1,998            (350)           142
                                         -----            ----            ---
Non-US:
       Current                           3,137           1,594          2,052
       Deferred                          1,908           2,343          1,306
                                         -----           -----          -----
                                         5,045           3,937          3,358
                                         -----           -----          -----
Income tax provision (benefit)     $     7,244     $    (2,900)    $    3,500
                                   ===========     ===========     ==========

The pre-tax US income was  approximately  $70.0 million,  $39.5 million and $3.3
million in fiscal years 2004, 2003 and 2002, respectively.

The fiscal year 2004 tax provision  reflected above was reduced by $14.4 million
of tax benefits  attributable to stock option  deductions which were credited to
equity.

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


<table>
<caption>
                                                December 31,     January 2,       January 3,
Fiscal Years Ended                                  2004            2004             2003
------------------                                  ----            ----             ----
(In thousands)
<s>                                           <c>              <c>              <c>        
Expected tax from continuing operations at
   35% in all years                            $     26,223     $   12,455       $   4,839
Change in valuation allowance                       (24,004)       (15,028)         (1,156)
US State income taxes                                 1,299              -               -
Export sales incentives                              (1,176)             -               -
Non-US tax rate differential and
    unbenefitted losses                               5,134              -            (137)
US Federal research and development credit             (508)             -               -
Other                                                   276           (327)            (46)
                                                        ---           ----             --- 
Income tax provision (benefit)                 $      7,244     $   (2,900)      $   3,500
                                               ============     ==========       =========
Effective tax rate                                      10%            (8%)            25%
                                               ============     ==========       =========
</table>


The components of deferred taxes consist of the following:

                                                     December 31,    January 2,
As of                                                    2004           2004
-----                                                    ----           ----
(In thousands)

Deferred tax liabilities:
     Purchased intangibles                         $      3,247     $    1,338
     Depreciation and amortization                       10,901          3,776
     Other individually immaterial items                    229            251
                                                            ---            ---
<page>
           Total deferred tax liabilities                14,377          5,365
                                                         ------          -----
Deferred tax assets:
   Inventory valuation differences                        8,782          9,001
   Expenses not currently deductible                      8,034          5,528
   US Federal credit carryforwards                        5,619          9,150
   Deferred revenue                                       3,857          4,280
   US State credit carryforwards                          6,722          6,999
   Warranty                                               2,216          2,374
   Depreciation and amortization                            718          2,871
   US Federal net operating loss carryforward             2,998              -
   US residual tax on foreign earnings                    2,682              -
   Other individually immaterial items                    7,655          3,106
                                                          -----          -----
Total deferred tax assets                                49,283         43,309
Valuation allowance                                     (12,989)       (34,756)
                                                        -------        ------- 
Total deferred tax assets                                36,294          8,553

Total net deferred tax assets (liabilities)        $     21,917     $    3,188
                                                   ============     ==========

The Company has $3.0  million of tax  effected  US federal  net  operating  loss
carryforwards from a recent acquisition, which is subject to certain limitations
under  IRC  Section  382.  The  total  US  federal   credit   carryforwards   of
approximately  $5.6  million  expire  beginning  in 2005.  The Company has state
research and development  credit  carryforwards of approximately  $10.3 million,
which do not expire.

The  valuation  allowance  decreased  by $21.8  million in fiscal 2004 and $13.1
million in fiscal 2003.  Approximately $8 million of the valuation  allowance at
December  31,  2004 and $14.1  million  at  January  2, 2004  relates to the tax
benefit of stock option deductions, which will be credited to equity if and when
realized.

In October  2004,  The  American  Jobs  Creation Act of 2004 was signed into law
providing   changes  in  the  tax  law  including  an  incentive  to  repatriate
undistributed earnings of foreign subsidiaries.  Trimble is currently evaluating
the potential impact of these provisions, including assessing the details of the
Act, analyzing the funds available for repatriation,  the economic cost of doing
so and assessing the qualified uses of  repatriated  funds.  However,  given the
preliminary stage of the Company's  evaluation,  it is not possible to determine
the impact to its fiscal year 2005 income tax provision.  The Company expects to
complete its evaluation by September 30, 2005.

NOTE 13: SHAREHOLDER'S EQUITY

3-for-2 Stock Split

Trimble's Board of Directors  approved a 3-for-2 split of all outstanding shares
of the Company's  Common Stock,  payable March 4, 2004 to stockholders of record
on February 17, 2004. Cash was paid in lieu of fractional  shares. All share and
per  share  information  has been  adjusted  to  reflect  the  stock  split on a
retroactive basis for all periods presented.

Common Stock

On April 14, 2003,  Trimble sold  3,148,000  shares of its Common Stock,  no par
value per share,  to an  investor  at a price of $12.17 per share in an offering
pursuant  to its shelf  registration  statement.  The  offering  resulted in net
proceeds to Trimble of approximately $36.6 million, approximately $31 million of
which was used to pay down the  principal  balance and $5.6  million was used to
pay down the accrued interest due on the subordinated note.

On December 21, 2001,  Trimble completed a private placement of 2,675,006 shares
of its  Common  Stock at a price  of  $10.00  per  share  to  certain  qualified
investors,  resulting in gross  proceeds of  approximately  $26.8 million to the
Company.  On January  15,  2002,  Trimble  had a second  closing of the  private
placement issuing 1,920,006 shares of Common Stock at $10.00 per share resulting
in gross proceeds of an additional $19.2 million.

<page>

NOTE 14: COMPREHENSIVE INCOME

The components of comprehensive income and related tax effects were as follows:

<table>
<caption>
                                                            December 31,        January 2,         January 3,
Fiscal Years Ended                                              2004               2004               2003
------------------                                              ----               ----               ----
(in thousands)
<s>                                                        <c>               <c>                <c>
Net income                                                  $   67,680        $    38,485        $    10,324
Foreign currency translation adjustments, net of tax of
    $(912) in 2004                                              14,025             31,198             17,697
Net gain (loss) on hedging transactions                            106                 (7)               210
Net unrealized gain (loss) on investments                           (6)                74                (17)
                                                                    --                 --                --- 
     Total comprehensive income                             $   81,805        $    69,750        $    28,214
                                                            ==========        ===========        ===========
</table>


The components of accumulated  other  comprehensive,  net of related tax were as
follows:

<table>
<caption>
                                                        December 31,      January 2,
Fiscal Years Ended                                          2004             2004
------------------                                          ----             ----
(in thousands)
<s>                                                     <c>              <c>
Accumulated foreign currency translation adjustments     $   44,191       $  30,166
Accumulated net gain on hedging transactions                    106               -
Accumulated net unrealized gain on foreign currency              67              73
                                                                 --              --
     Total accumulated other comprehensive income        $   44,364       $  30,239
                                                         ==========       =========
</table>


NOTE 15: EMPLOYEE STOCK BENEFIT PLANS

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan ("Purchase Plan") under which an
aggregate  of 5,325,000  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.  The Purchase  Plan  terminates on
December 31, 2008. In fiscal 2004 and 2003, the shares issued under the Purchase
Plan were 183,214 and 328,044  shares,  respectively.  At December 31, 2004, the
number of shares  reserved  for  future  purchases  by  eligible  employees  was
547,834.

2002 Stock Plan

In 2002, Trimble's Board of Directors adopted the 2002 Stock Plan ("2002 Plan").
The  2002  Plan  approved  by the  shareholders  provides  for the  granting  of
incentive and  non-statutory  stock options for up to 4,500,000  shares plus any
shares currently reserved but un-issued to employees, consultants, and directors
of Trimble.  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 2002 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 the grant.  The exercise  price of  non-statutory  stock options
issued  under the 2002 Plan  must be at least  85% of the fair  market  value of
Common Stock on the date of grant. As of December 31, 2004,  options to purchase
3,074,987  shares were outstanding and 2,271,021 were available for future grant
under the 2002 Plan.

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, provided
for  the  granting  of  incentive  and  non-statutory  stock  options  for up to
9,562,500  shares of Common Stock to  employees,  consultants,  and directors of
Trimble.  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  non-statutory  stock options issued under the

<page>

1993 Plan must be at least 85% of the fair market  value of Common  Stock on the
date of grant. As of December 31, 2004 options to purchase 3,223,144 shares were
outstanding and no shares were available for future grant.

1990 Director Stock Option Plan

In December  1990,  Trimble  adopted a Director Stock Option Plan under which an
aggregate of 570,000  shares of Common Stock have been  reserved for issuance to
non-employee  directors as approved by the shareholders to date. At December 31,
2004,  options to purchase 235,000 shares were  outstanding,  and no shares were
available for future grants under the Director Stock Option Plan.

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,  450,000
non-statutory  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  31,  2004,  there were no 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  grants.  There  were no
discounted  options  granted in the plan in fiscal 2004,  2003,  and 2002. As of
December 31, 2004, options to purchase 187,500 shares were outstanding under the
1992 Management Discount Stock Option Plan.

SFAS 123 Disclosures

As  stated  in Note 2 of the  Notes 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.

Exercise  prices for options  outstanding  as of December 31, 2004,  ranged from
$5.33 to  $34.46.  The  weighted  average  remaining  contractual  life of those
options is 6.73  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 at December 31, 2004:


<table>
<caption>

                                      Options Outstanding                          Options Exercisable
                                      -------------------                          -------------------
                                       Weighted-          Weighted-                           Weighted-
                                       Average            Average                             Average
                        Number       Exercise Price       Remaining           Number       Exercise Price
Range                Outstanding       per Share       Contractual Life     Exercisable       per Share
-----                -----------       ---------       ----------------     -----------       ---------
<s>                   <c>               <c>                <c>              <c>                <c> 
$  5.33 - 7.13           789,503         $ 5.85             4.34               764,653          $   5.82
   7.67 - 8.53           474,717           8.12             5.11               394,988              8.04
   8.79 - 10.23          734,867          10.12             7.39               302,543             10.07
   10.25 - 11.65       1,109,575          11.15             5.81               750,693             11.06
   11.67 - 16.04         637,137          13.16             4.90               529,281             12.99
   17.00                 961,017          17.00             8.54               249,430             17.00
   17.55 - 25.33         369,501          21.77             8.65                75,893             21.17
   27.42                 729,709          27.42             5.65               621,939             27.42
   27.56                   4,500          27.56             9.06                     0                 0
   29.06 - 34.46         910,105          29.72             9.66                31,820             34.46
                         -------          -----             ----                ------             -----
Total                  6,720,631         $ 16.10            6.73             3,721,240          $  13.40
                       =========         =======            ====             =========          ========

</table>



Activity  during fiscal 2004,  2003,  and 2002,  under the combined plans was as
follows:
<page>

<table>
<caption>

                                            December 31, 2004         January 2, 2004            January 3, 2003
                                            -----------------         ---------------            ---------------
                                                      Weighted                   Weighted                  Weighted
                                                      average                    average                    average
                                                      exercise                   exercise                   exercise
Fiscal Years Ended                      Options        price         Options      price         Options      price
------------------                      -------        -----         -------      -----         -------      -----
(In thousands, except for per
   share data)
<s>                                     <c>         <c>              <c>         <c>             <c>      <c>
Outstanding at beginning of year          7,601         13.62          7,691      $  12.35        6,932    $  12.69
     Granted                              1,119         28.20          1,298         16.87        1,275        9.88
     Exercised                           (1,710)        12.92         (1,263)         8.90         (199)       6.67
     Cancelled                             (289)        16.55           (125)        15.51         (317)      13.46
Outstanding at end of year                6,721         16.10          7,601      $  13.62        7,691    $  12.35

Exercisable at end of year                3,721         13.40          4,136      $  12.76        4,005    $  11.69
Available for grant                       2,275                        1,605                      2,790
Weighted-average fair value of
   options granted during year                       $  13.85                     $  10.03                 $   5.64
</table>


Non-statutory Options

On May 3, 1999,  Trimble  entered  into an  agreement  to grant a  non-statutory
option to purchase up to 45,000  shares of common stock at an exercise  price of
$6.50 per share, with an expiration date of March 29, 2004. These  non-statutory
options were exercised January 15, 2004.

Warrants

On April 12, 2002, the Company issued to  Spectra-Physics  Holdings USA, Inc., a
warrant to purchase up to 564,350 shares of Trimble's  Common Stock over a fixed
period of time.  Initially,  Spectra-Physics'  warrant  entitled  it to purchase
300,000  shares of Common Stock over a five-year  period at an exercise price of
$10.07 per share. On a quarterly basis beginning July 14, 2002, Spectra-Physics'
warrant  became  exercisable  for an  additional  375 shares of Common Stock for
every $1 million of principal and interest outstanding to Spectra-Physics  until
the  obligation  was paid off in full.  These shares are  purchasable at a price
equal to the average of Trimble's  closing  price for the five days  immediately
proceeding the last trading day of each quarter.  On July 14, 2002 an additional
26,046 shares became  exercisable  at an exercise  price of $9.64 per share.  On
October 14, 2002 an additional  26,736 shares became  exercisable at an exercise
price of $6.12.  On  January  14,  2003,  an  additional  27,426  shares  became
exercisable  at an exercise  price of $9.03.  On April 14, 2003,  an  additional
14,312 shares became  exercisable at an exercise price of $13.37. The additional
shares are  exercisable  over a 5-year  period.  No  additional  shares  will be
issuable under the warrant to Spectra-Physics  as the underlying  obligation has
been paid off in full.

The approximate  fair value of the warrants of $2.4 million was determined using
the Black-Scholes pricing model with the following assumptions: contractual life
of 5-year  period,  risk-free  interest  rate of 4%;  volatility  of 65%; and no
dividends  during the  contractual  term.  The value of the  warrants  was being
amortized  to interest  expense over the term of the  Subordinated  Note and the
unamortized  balance  was  written  off to  interest  expense  on June 2003 upon
repayment of the note.

On December  21, 2001 and January 15,  2002,  in  connection  with the first and
second closing of the private  placement of the Company's Common Stock,  Trimble
granted  five-year  warrants to purchase an additional  919,008 shares of Common
Stock, subject to certain adjustments, at an exercise price of $12.97 per share.

Common Stock Reserved for Future Issuances

As of December  31,  2004,  Trimble had reserved  10,940,975  common  shares for
issuance upon exercise of options and warrants outstanding and options available
for grant under the various employee stock benefit plans.




<PAGE>


NOTE 16: BENEFIT PLANS

401(k) Plan

Under Trimble's 401(k) Plan, US employee  participants  (including  employees of
certain  subsidiaries)  may  direct the  investment  of  contributions  to their
accounts  among certain mutual funds and the Trimble  Navigation  Limited Common
Stock  Fund.  The  Trimble  Fund sold net 89,806  shares of Common  Stock for an
aggregate of $0.7 million in fiscal 2004.  Trimble,  at its discretion,  matches
individual  employee 401(k) Plan contributions at a rate of fifty cents of every
dollar  that  the  employee  contributes  to  the  401(k)  Plan  up to 5% of the
employee's  annual  salary to an annual  maximum of $2,500.  Trimble's  matching
contributions  to the 401(k) Plan were $1.9 million in fiscal 2004, $1.8 million
in fiscal 2003 and $1.8 million in fiscal 2002.

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 adjusted pre-tax
income.  Payments  under the plan during  fiscal  2004,  2003 and 2002 were $4.4
million, $2.5 million, and $1.1 million, respectively.

Defined Contribution Pension Plans

Certain of the Company's  European  subsidiaries  participate in state sponsored
pension  plans.  Contributions  are based on specified  percentages  of employee
salaries.   For  these  plans,   Trimble  contributed  and  charged  to  expense
approximately  $0.6 million for fiscal 2004,  $2.0 million for fiscal 2003,  and
$1.4 million for fiscal 2002.

Defined Benefit Pension Plan

Trimble provides defined benefit pension plans in certain  countries outside the
United  States,  including  Sweden and  Germany.  The  largest of these plans is
provided by the Swedish subsidiary which 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 in fiscal 2004, 2003, and 2002 were not material.

The changes in the benefit obligations and plan assets of the significant non-US
defined benefit pension plans for fiscal 2004 and 2003 were as follows:


<table>
<caption>

Fiscal Years Ended                                       December 31, 2004      January 2, 2004
------------------                                       -----------------      ---------------
(in thousands)
<s>                                                         <c>                    <c>    
Change in benefit obligation:
Benefit obligation at beginning of year                      $  6,204               $ 4,972
        Service cost                                               74                     -
        Interest cost                                             388                   328
        Benefits paid                                            (196)                 (256)
        Foreign exchange impact                                   699                 1,102
        Actuarial (gains) losses                                   39                    58
                                                                   --                    --
Benefit obligation at end of year                               7,208                 6,204
                                                                -----                 -----
 Change in plan assets:
 Fair value of plan assets at beginning of year                   872                   787
         Actual return on plan assets                              64                    29
         Employer contribution                                    238                   150
         Plan participants' contributions                           -                     -
         Benefits paid                                           (196)                 (256)
         Foreign exchange impact                                  110                   162
                                                                  ---                   ---
 Fair value of plan assets at end of year                       1,088                   872
                                                                -----                   ---
Benefit obligation in excess of plan assets                     6,120                 5,332
                                                                -----                 -----
Unrecognized prior service cost                                     -                     -
Unrecognized net actuarial gain                                   127                    35
                                                                  ---                    --
Accrued pension costs (included in accrued liabilities)      $  5,993               $ 5,297
                                                             --------               -------
</table>

<page>

Actuarial  assumptions  used to determine the net periodic pension costs for the
year ended December 31, 2004 were as follows:

                                    Swedish Subsidiary      German Subsidiaries
                                    ------------------      -------------------
Discount rate                                5.5%                     5.25%
Rate of compensation increase                2.5%                     2.0%

NOTE 17: RELATED-PARTY TRANSACTIONS

Related-Party Lease

Trimble  currently  leases  office  space in Ohio from an  association  of three
individuals,  one of whom is an employee of the Company,  under a non-cancelable
operating  lease  arrangement  expiring  in 2011.  The annual rent is subject to
adjustment  based on the terms of the  lease.  The  Consolidated  Statements  of
Income include  expenses from this  operating  lease of $0.35 million for fiscal
years 2004, 2003, and 2002.

Related-Party Notes Receivable

Trimble has notes receivable from officers and employees of  approximately  $0.4
million as of  December  31,  2004 and $0.8  million as of January 2, 2004.  The
notes bear  interest from 4.49% to 6.62% and have an average  remaining  life of
0.8 years as of December 31, 2004.

See Note 5 to the Notes to the Consolidated  Financial Statements for additional
information  regarding  Trimble's related party  transactions with joint venture
partners.

NOTE 18: STATEMENT OF CASH FLOW DATA

<table>
<caption>
                                                            December 31,       January 2,       January 3,
Fiscal Years Ended                                              2004              2004             2003
------------------                                              ----              ----             ----
(in thousands)
<s>                                                         <c>                <c>              <c>    
Supplemental disclosure of cash flow information:
   Interest paid                                             $    3,142         $  10,208        $   12,215
   Income taxes paid                                         $    6,694         $     688        $    2,635

Significant non-cash investing activities:
   Issuance of shares related to invest in joint venture     $        -         $   5,922        $        -
   Issuance of shares related to acquisition related
   earn-out payments                                         $      899         $   1,349        $      336
</table>


NOTE 19: LITIGATION

From time to time,  the  Company is involved  in  litigation  arising out of the
ordinary course of its business. There are no known claims or pending litigation
expected to have a material effect on the Company's overall financial  position,
results of operations, or liquidity.




<PAGE>


NOTE 20: SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)


<table>
<caption>
                                                 First         Second           Third           Fourth
                                                Quarter        Quarter         Quarter          Quarter
                                                -------        -------         -------          -------
(in thousands, except per share data)
<s>                                         <c>             <c>              <c>              <c>       
Fiscal 2004
    Revenue                                  $   156,510     $   179,451      $  170,164       $  162,683
    Gross margin                                  75,760          88,319          83,372           77,359
    Net income                                    12,840          20,518          17,917           16,405

    Basic net income per share                      0.25            0.40            0.35             0.32
    Diluted net income per share                    0.24            0.38            0.33             0.29

Fiscal 2003
    Revenue                                  $   127,325     $   138,132      $  139,569       $  135,877
    Gross margin                                  61,755          71,095          69,112           66,068
    Net income                                     5,353           8,105           9,936           15,091

    Basic net income per share                      0.12            0.17            0.20             0.30
    Diluted net income per share                    0.12            0.16            0.19             0.28
</table>



Significant  quarterly  items for fiscal 2004 include the following:  (i) in the
second  quarter  of 2004 a $1.2  million  income,  or $0.03  per  diluted  share
relating to valuation of  investment;  (ii) in the third  quarter of 2004 a $0.2
million income,  or less than $0.01 per diluted share relating to revaluation of
investment;  (iii) in the fourth quarter of 2004 a $0.4 million charge,  or less
than $0.01 per diluted share relating to revaluation of investment.

Significant  quarterly  items for fiscal 2003 include the following:  (i) in the
first quarter of 2003 a $0.4 million  charge or $0.01 per diluted share relating
to  workforce  reduction;  (ii) in the  second  quarter  of 2003 a $0.7  million
charge,  or $0.01 per diluted  share  relating to work force  reduction and $3.6
million  of  interest  expenses,  or $0.07 per  diluted  share  relating  to the
Company's  debt  refinancing;  (iii) in the third quarter of 2003 a $0.6 million
charge, or $0.01 per diluted share relating to work force reduction; (iv) in the
fourth  quarter of 2003 a $0.3  million  charge,  or less than $0.01 per diluted
share relating to work force reduction.





<PAGE>



R
eport of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Trimble Navigation Limited

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Trimble
Navigation  Limited as of December 31, 2004 and January 2, 2004, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three  years in the period  ended  December  31,  2004.  Our audits  also
included the financial  statement schedule listed in the index at Item 15(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 based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (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  referred to above present fairly, in
all material respects, the consolidated financial position of Trimble Navigation
Limited at December 31, 2004 and January 2, 2004, and the  consolidated  results
of its  operations  and its cash flows for each of the three years in the period
ended December 31, 2004, in conformity with U.S. generally  accepted  accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole,  presents  fairly in all  material  respects  the  information  set forth
therein.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States),  the  effectiveness  of  Trimble
Navigation  Limited's  internal control over financial  reporting as of December
31,  2004,  based  on  criteria  established  in  Internal   Control--Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission and our report dated March 11, 2005 expressed an unqualified  opinion
thereon.

/s/ Ernst & Young LLP


Palo Alto, California
March 11, 2005




<PAGE>



Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Trimble Navigation Limited

We have audited  management's  assessment,  included in  Management's  Report on
Internal  Control Over Financial  Reporting at Item 9a, that Trimble  Navigation
Limited  maintained  effective  internal control over financial  reporting as of
December 31, 2004, based on criteria established in Internal Control--Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission  (the COSO  criteria).  Trimble  Navigation  Limited's  management is
responsible for maintaining  effective internal control over financial reporting
and for its assessment of the  effectiveness  of internal control over financial
reporting.   Our  responsibility  is  to  express  an  opinion  on  management's
assessment and an opinion on the effectiveness of the company's internal control
over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In  our  opinion,   management's  assessment  that  Trimble  Navigation  Limited
maintained  effective  internal control over financial  reporting as of December
31,  2004,  is  fairly  stated,  in all  material  respects,  based  on the COSO
criteria.  Also, in our opinion,  Trimble Navigation Limited maintained,  in all
material  respects,  effective  internal control over financial  reporting as of
December 31, 2004, based on the COSO criteria.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
Trimble  Navigation Limited as of December 31, 2004 and January 2, 2004, and the
related consolidated statements of income,  shareholders' equity, and cash flows
for each of the three  years in the period  ended  December  31, 2004 of Trimble
Navigation  Limited and our report dated March 11, 2005 expressed an unqualified
opinion thereon.

/s/ Ernst & Young LLP


Palo Alto, California
March 11, 2005






<PAGE>



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

None


Item 9a.  Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Trimble's Chief Executive  Officer ("CEO") and Chief Financial  Officer ("CFO"),
after  evaluating the  effectiveness of the company's  "disclosure  controls and
procedures"  (as defined in Rules  13a-15(e) and 15d-15(e)  under the Securities
Exchange  Act of 1934 (the  "Exchange  Act")),  as of December  31,  2004,  have
concluded  that as of December 31, 2004, the company's  disclosure  controls and
procedures  were  effective and designed to provide  reasonable  assurance  that
material information  relating to the company and its consolidated  subsidiaries
required to be included in the company's periodic filings under the Exchange Act
would be made known to them by others within those entities.

Inherent Limitations on Effectiveness of Controls

The  company's  management,  including the CEO and CFO, does not expect that our
internal  control over financial  reporting will prevent or detect all error and
all fraud.  A control  system,  no matter how well  designed and  operated,  can
provide only  reasonable,  not  absolute,  assurance  that the control  system's
objectives will be met. The design of any system of controls is based in part on
certain  assumptions about the likelihood of future events,  and there can be no
assurance  that any design will succeed in achieving  its stated goals under all
potential future conditions.

(b) Management's Report on Internal Control over Financial Reporting

The  company's  management  is  responsible  for  establishing  and  maintaining
adequate internal control over financial  reporting,  as such term is defined in
Exchange Act Rule  13a-15(f).  The company's  management,  including the CEO and
CFO,  conducted an evaluation of the  effectiveness of its internal control over
financial reporting based on the Internal Control - Integrated  Framework issued
by the Committee of Sponsoring  Organizations of the Treadway Commission.  Based
on the results of this evaluation,  the company's  management concluded that its
internal control over financial reporting was effective as of December 31, 2004.

Management's  assessment  of the  effectiveness  of our  internal  control  over
financial  reporting  as of December  31, 2004 has been audited by Ernst & Young
LLP, an independent registered public accounting firm, as stated in their report
which is included elsewhere herein.

(c) Changes in Internal Control over Financial Reporting

During  the  quarter  ended  December  31,  2004,  there  were no changes in the
company's  internal  control  over  financial  reporting  that  have  materially
affected,  or are reasonably likely to materially affect, the company's internal
control over financial reporting.
                                    

                                    PART III



Item 10 Directors and Executive Officers of the Registrant

The  information  required  by this item,  insofar  as it  relates to  Trimble's
directors,  will be contained  under the captions  "Election of  Directors"  and
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement
and is incorporated herein by reference.  The information  required by this item
relating to executive officers is set forth above in Item 1 Business Overview
under the caption "Executive Officers."

Code of Ethics

The Company's  Business Ethics and Conduct Policy that applies to, among others,
to the Company's Chief Executive  Officer,  Chief Financial  Officer,  Corporate
Controller,  and other finance organization employees.  The Business Ethics and
Conduct Policy is available on the Company's  website at  www.trimble.com  under
the heading "Corporate Governance and Policies" on the Investor Information page
of our website. A copy will be provided,  without charge, to any shareholder who

<page>

requests one by written request addressed to General Counsel, Trimble Navigation
Limited, 749 N. Mary Avenue, Sunnyvale, CA 94085.

If any substantive amendments to the Business Ethics and Conduct Policy are made
or any waivers are granted,  including any implicit waiver,  from a provision of
the Business Ethics and Conduct Policy,  to its Chief Executive  Officer,  Chief
Financial Officer or Corporate Controller,  the Company will disclose the nature
of such amendment or waiver on the Company's website at  www.trimble.com or in a
report on Form 8-K.



Item 11 Executive Compensation

The  information  required by this item will be contained in the Proxy Statement
under  the  caption  "Executive  Compensation"  and is  incorporated  herein  by
reference.



Item 12 Security  Ownership  of Certain  Beneficial  Owners and  Management  and
Related Stockholder Matters

The  information  required by this item will be contained in the Proxy Statement
under  the  caption  "Security   Ownership  of  Certain  Beneficial  Owners  and
Management Related Stockholder Matters" and is incorporated herein by reference.



Item 13 Certain Relationships and Related Transactions

The  information  required by this item will be contained in the Proxy Statement
under the  caption  "Certain  Relationships  and  Related  Transactions"  and is
incorporated herein by reference.


Item 14 Principal Accountant Fees and Services

The  information  required by this item will be contained in the Proxy Statement
under the caption  "Principal  Accountant Fees and Services" and is incorporated
herein by reference.



                                     PART IV


Item 15.  Exhibits, Financial Statement Schedules.

(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 January 31, 2004 and January 2, 2004........44

Consolidated Statements of Income for each of the three fiscal years
in the period ended January 31, 2004.......................................45

Consolidated Statement of Shareholders' Equity for each of the 
three fiscal years in the period ended January 31, 2004....................46

Consolidated Statements of Cash Flows for each of the three 
fiscal years in the period ended January 31, 2004..........................47

<page>

Notes to Consolidated Financial Statements ................................48

Reports of Independent Registered Public Accounting Firm...................72

     (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. (5)

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

3.3  Certificate of Amendment of Articles of  Incorporation of the Company filed
     July 18, 1990. (7)

3.4  Certificate of Determination of the Company filed February 19, 1999. (8)

3.5  Certificate of Amendment of Articles of  Incorporation of the Company filed
     May 29, 2003. (20)

3.6  Certificate of Amendment of Articles of  Incorporation of the Company filed
     March 4, 2004. (24)

3.8  Amended and Restated Bylaws of the Company. (23)

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. (4)

4.3  Agreement  of  Substitution   and  Amendment  of  Preferred  Shares  Rights
     Agreement dated September 10, 2004. (25)

4.4  First Amended and Restated Stock and Warrant Purchase Agreement between and
     among the Company and the investors thereto dated January 14, 2002. (15)

4.5  Form of Warrant to Purchase  Shares of Common Stock dated January 14, 2002.
     (16)

4.6  Form of Warrant dated April 12, 2002. (17)

10.1+Form of Indemnification  Agreement between the Company and its officers and
     directors. (25)

10.2+1990  Director  Stock  Option  Plan,  as  amended,  and form of  Outside
     Director Non-statutory Stock Option Agreement. (3)

10.3+1992  Management  Discount  Stock  Option and form of  Non-statutory  Stock
     Option Agreement. (2)

10.4+ 1993 Stock Option Plan, as amended May 11, 2000. (12)

10.5+ 1988 Employee Stock Purchase Plan, as amended May 11, 2000. (13)

10.6+Employment  Agreement  between  the Company  and Steven W.  Berglund  dated
     March 17, 1999. (9)

<page>

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

10.8***Supply  Agreement  dated August 10, 1999 by and among Trimble  Navigation
     Limited and Solectron Corporation and Solectron Federal Systems, Inc. (11)

10.9+Australian  Addendum to the Trimble Navigation 1988 Employee Stock Purchase
     Plan. (14)

10.10+ Amended and  Restated  2002 Stock Plan (as of July 22,  2004),  including
     forms of option agreements. (22)

10.11 Credit Agreement dated June 25, 2003. (19)

10.12Letter dated May 8, 2002 exercising  renewal option of the Supply Agreement
     dated August 10, 1999 by and among Trimble Navigation Limited and Solectron
     Corporation and Solectron Federal Systems, Inc. (18)

10.13+ Employment  Agreement  between the Company and Rajat Bahri dated December
     7, 2004. (25)

10.14+ Board of Directors annual  compensation policy effective January 1, 2004.
     (25)

10.15+ Form of Change in Control  agreement  between  the  Company  and  certain
     Company officers. (21)

10.16+ Letter of Assignment between the Company and Alan Townsend dated November
     12, 2003. (25)

10.17+  Supplemental  agreement to Letter of Assignment  between the Company and
     Alan Townsend dated January 19, 2004. (25)

21.1 Subsidiaries of the Company. (25)

23.1 Consent  of Ernst & Young LLP,  independent  registered  public  accounting
     firm. (25)

24.1 Power of Attorney included on signature page herein.

31.1 Certification of CEO pursuant to Section 302 of the  Sarbanes-Oxley  Act of
     2002. (25)

31.2 Certification of CFO pursuant to Section 302 of the  Sarbanes-Oxley  Act of
     2002. (25)

32.1 Certification of CEO pursuant to Section 906 of the  Sarbanes-Oxley  Act of
     2002. (25)

32.2 Certification of CFO pursuant to Section 906 of the  Sarbanes-Oxley  Act of
     2002. (25)

***  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  exhibit  number  4.1 to  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   exhibit  number  10.46  to  the  registrant's
     Registration  Statement  on Form S-1 (File No.  33-45990),  which was filed
     February 25, 1992.

(3)  Incorporated  by  reference  to exhibit  number  10.32 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended December 31, 1993.


(4)  Incorporated  by  reference  to  exhibit  number  1  to  the   registrant's
     Registration Statement on Form 8-A, which was filed on February 18, 1999.
<page>

(5)  Incorporated by reference to exhibit number 3.1 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(6)  Incorporated by reference to exhibit number 3.2 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(7)  Incorporated by reference to exhibit number 3.3 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(8)  Incorporated by reference to exhibit number 3.4 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(9)  Incorporated  by  reference  to exhibit  number  10.67 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended January 1, 1999.

(10) Incorporated  by  reference  to exhibit  number  10.68 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended January 1, 1999.

(11) Incorporated  by  reference  to exhibit  number  10.69 to the  registrant's
     Report on Form 8-K, which was filed on August 25, 1999.

(12) Incorporated  by  reference  to exhibit  number  10.59 to the  registrant's
     registration statement on Form S-8 filed on June 1, 2000.

(13) Incorporated  by  reference  to exhibit  number  10.60 to the  registrant's
     registration statement on Form S-8 filed on June 1, 2000.

(14) Incorporated  by  reference  to exhibit  number  10.77 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended December 29, 2000.

(15) Incorporated by reference to exhibit number 4.1 to the registrant's Current
     Report on Form 8-K filed on January 16, 2002.

(16) Incorporated by reference to exhibit number 4.2 to the registrant's Current
     Report on Form 8-K filed on January 16, 2002.

(17) Incorporated  by  reference  to  exhibit  number  4.1 to  the  registrant's
     Registration Statement on Form S-3 filed on April 19, 2002.

(18) Incorporated  by  reference  to exhibit  number  10.83 to the  registrant's
     Annual Report on Form 10-K for the year ended January 3, 2003.

(19) Incorporated  by  reference  to  exhibit  number  10.2 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended July 4, 2003.

(20) Incorporated  by  reference  to  exhibit  number  3.5 to  the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended July 4, 2003.

(21) Incorporated  by  reference  to  exhibit  number  10.1 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended October 1, 2004.

(22) Incorporated  by  reference  to  exhibit  number  10.2 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended October 1, 2004.

(23) Incorporated by reference to exhibit number 3.8 to the registrant's  Annual
     Report on Form 10-K for the year ended January 2, 2004.
<page>

(24) Incorporated  by  reference  to  exhibit  number  3.6 to  the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended April 2, 2004.

(25) Filed herewith.




<PAGE>


                                  EXHIBIT LIST

Exhibit

Number

3.1  Restated Articles of Incorporation of the Company filed June 25, 1986. (5)

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

3.3  Certificate of Amendment of Articles of  Incorporation of the Company filed
     July 18, 1990. (7)

3.4  Certificate of Determination of the Company filed February 19, 1999. (8)

3.5  Certificate of Amendment of Articles of  Incorporation of the Company filed
     May 29, 2003. (20)

3.6  Certificate of Amendment of Articles of  Incorporation of the Company filed
     March 4, 2004. (24)

3.8  Amended and Restated Bylaws of the Company. (23)

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. (4)

4.3  Agreement  of  Substitution   and  Amendment  of  Preferred  Shares  Rights
     Agreement dated September 10, 2004. (25)

4.4  First Amended and Restated Stock and Warrant Purchase Agreement between and
     among the Company and the investors thereto dated January 14, 2002. (15)

4.5  Form of Warrant to Purchase  Shares of Common Stock dated January 14, 2002.
     (16)

4.6  Form of Warrant dated April 12, 2002. (17)

10.1+Form of Indemnification  Agreement between the Company and its officers and
     directors. (25)

10.2+1990 Director Stock Option Plan, as amended,  and form of Outside  Director
     Non-statutory Stock Option Agreement. (3)

10.3+1992  Management  Discount  Stock  Option and form of  Non-statutory  Stock
     Option Agreement. (2)

10.4+ 1993 Stock Option Plan, as amended May 11, 2000. (12)

10.5+ 1988 Employee Stock Purchase Plan, as amended May 11, 2000. (13)

10.6+Employment  Agreement  between  the Company  and Steven W.  Berglund  dated
     March 17, 1999. (9)

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

10.8 ***Supply  Agreement dated August 10, 1999 by and among Trimble  Navigation
     Limited and Solectron Corporation and Solectron Federal Systems, Inc. (11)

10.9+Australian  Addendum to the Trimble Navigation 1988 Employee Stock Purchase
     Plan. (14)

10.10+ Amended and  Restated  2002 Stock Plan (as of July 22,  2004),  including
     forms of option agreements. (22)

10.11 Credit Agreement dated June 25, 2003. (19)

10.12Letter dated May 8, 2002 exercising  renewal option of the Supply Agreement
     dated August 10, 1999 by and among Trimble Navigation Limited and Solectron
     Corporation and Solectron Federal Systems, Inc. (18)
<page>

10.13+ Employment  Agreement  between the Company and Rajat Bahri dated December
     7, 2004. (25)

10.14+ Board of Directors annual  compensation policy effective January 1, 2004.
     (25)

10.15+ Form of Change in Control  agreement  between  the  Company  and  certain
     Company officers. (21)

10.16+ Letter of Assignment between the Company and Alan Townsend dated November
     12, 2003. (25)

10.17+  Supplemental  agreement to Letter of Assignment  between the Company and
     Alan Townsend dated January 19, 2004. (25)

21.1 Subsidiaries of the Company. (25)

23.1 Consent  of Ernst & Young LLP,  independent  registered  public  accounting
     firm. (25)

24.2 Power of Attorney included on signature page herein.

31.1 Certification of CEO pursuant to Section 302 of the  Sarbanes-Oxley  Act of
     2002. (25)

31.2 Certification of CFO pursuant to Section 302 of the  Sarbanes-Oxley  Act of
     2002. (25)

32.1 Certification of CEO pursuant to Section 906 of the  Sarbanes-Oxley  Act of
     2002. (25)

32.2 Certification of CFO pursuant to Section 906 of the  Sarbanes-Oxley  Act of
     2002. (25)

***  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  exhibit  number  4.1 to  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   exhibit  number  10.46  to  the  registrant's
     Registration  Statement  on Form S-1 (File No.  33-45990),  which was filed
     February 25, 1992.

(3)  Incorporated  by  reference  to exhibit  number  10.32 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended December 31, 1993.


(4)  Incorporated  by  reference  to  exhibit  number  1  to  the   registrant's
     Registration Statement on Form 8-A, which was filed on February 18, 1999.

(5)  Incorporated by reference to exhibit number 3.1 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(6)  Incorporated by reference to exhibit number 3.2 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(7)  Incorporated by reference to exhibit number 3.3 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(8)  Incorporated by reference to exhibit number 3.4 to the registrant's  Annual
     Report on Form 10-K for the fiscal year ended January 1, 1999.

(9)  Incorporated  by  reference  to exhibit  number  10.67 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended January 1, 1999.

(10) Incorporated  by  reference  to exhibit  number  10.68 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended January 1, 1999.
<page>

(11) Incorporated  by  reference  to exhibit  number  10.69 to the  registrant's
     Report on Form 8-K, which was filed on August 25, 1999.

(12) Incorporated  by  reference  to exhibit  number  10.59 to the  registrant's
     registration statement on Form S-8 filed on June 1, 2000.

(13) Incorporated  by  reference  to exhibit  number  10.60 to the  registrant's
     registration statement on Form S-8 filed on June 1, 2000.

(14) Incorporated  by  reference  to exhibit  number  10.77 to the  registrant's
     Annual Report on Form 10-K for the fiscal year ended December 29, 2000.

(15) Incorporated by reference to exhibit number 4.1 to the registrant's Current
     Report on Form 8-K filed on January 16, 2002.

(16) Incorporated by reference to exhibit number 4.2 to the registrant's Current
     Report on Form 8-K filed on January 16, 2002.

(17) Incorporated  by  reference  to  exhibit  number  4.1 to  the  registrant's
     Registration Statement on Form S-3 filed on April 19, 2002.

(18) Incorporated  by  reference  to exhibit  number  10.83 to the  registrant's
     Annual Report on Form 10-K for the year ended January 3, 2003.

(19) Incorporated  by  reference  to  exhibit  number  10.2 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended July 4, 2003.

(20) Incorporated  by  reference  to  exhibit  number  3.5 to  the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended July 4, 2003.

(21) Incorporated  by  reference  to  exhibit  number  10.1 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended October 1, 2004.

(22) Incorporated  by  reference  to  exhibit  number  10.2 to the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended October 1, 2004.

(23) Incorporated by reference to exhibit number 3.8 to the registrant's  Annual
     Report on Form 10-K for the year ended January 2, 2004.

(24) Incorporated  by  reference  to  exhibit  number  3.6 to  the  registrant's
     Quarterly Report on Form 10-Q for the quarter ended April 2, 2004.

(25) Filed herewith.



<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 14, 2005


                                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.


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:



<PAGE>



Signature                    Capacity in which Signed          Date



/s/ Steven W. Berglund       President, Chief Executive        March 14, 2005
----------------------       Officer, Director                
Steven W. Berglund        



/s/ Rajat Bahri              Chief Financial Officer and       March 14, 2005
---------------              Assistant Secretary  
Rajat Bahri                  (Principal Financial Officer)




/s/ Anup Singh               Corporate Controller              March 14, 2005
--------------               (Principal Accounting Officer)     
Anup V. Singh             



/s/ Robert S. Cooper         Director                          March 10, 2005
--------------------                                        
Robert S. Cooper


_________________            Director                          March __, 2005
John B. Goodrich



/s/ William Hart             Director                          March 14, 2005
----------------                                       
William Hart



/s/ Ulf J. Johansson         Director                          March 10, 2005
--------------------                                       
Ulf J. Johansson



/s/ Bradford W. Parkinson    Director                          March 12, 2005
-------------------------                                    
Bradford W. Parkinson



/s/ Nickolas W. Vande Steeg  Director                          March 11, 2005
---------------------------                           
Nickolas W. Vande Steeg




<PAGE>


                                  

                                   SCHEDULE II

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


<table>
<caption>
                                     December 31,       January 2,       January 3,
Allowance for doubtful accounts:         2004              2004             2003
--------------------------------         ----              ----             ----
<s>                                 <c>                <c>              <c>   
Balance at beginning of period       $    9,953         $   9,900        $  8,540
  Acquired allowance                        116               752               -
  Bad debt expense                        1,210               (32)          5,443
  Write-offs, net of recoveries          (2,327)             (667)         (4,083)
                                         ------              ----          ------ 
Balance at end of period             $    8,952         $   9,953        $  9,900
                                     ----------         ---------        --------
Inventory allowance:
Balance at beginning of period       $   25,885         $  25,150        $ 23,274
  Acquired allowance                        591             1,292               -
  Additions to allowance                  3,765             5,762           3,901
  Write-offs, net of recoveries          (4,024)           (6,319)         (2,025)
                                         ------            ------          ------ 
Balance at end of period             $   26,217         $  25,885        $ 25,150
                                     ----------         ---------        --------
</table>




<PAGE>



                                  EXHIBIT 4.3

                   AGREEMENT OF SUBSTITUTION AND AMENDMENT OF
                        PREFERRED SHARES RIGHTS AGREEMENT


         This  Agreement  of  Substitution  and  Amendment is entered into as of
September  10, 2004, by and between  Trimble  Navigation  Limited,  a California
corporation  (the "Company") and American Stock Transfer & Trust Company,  a New
York banking corporation ("AST").

                                    RECITALS

A.       On or about  February  18, 1999,  the Company  entered into a Preferred
         Shares Rights  Agreements  (the "Rights  Agreement")  with  ChaseMellon
         Shareholder Services, L.L.C. (the "Predecessor Agent") as rights agent.

B.       The Company wishes to remove the  Predecessor  Agent and substitute AST
         as  rights  agent  pursuant  to  Section  21 of the  Rights  Agreement,
         effective October 1, 2004 (the "Effective Date").

C.       The Company has given the  Predecessor  Agent  notice of removal of the
         Predecessor Agent as rights agent.


                                    AGREEMENT

         NOW  THEREFORE,   in  consideration  of  the  foregoing  and  of  other
consideration,  the  sufficiency  of which is hereby  acknowledged,  the parties
agree as follows:

1.            Section 21 of the Rights  Agreement  is hereby  amended to provide
              that  any  successor  rights  agent  shall,  at  the  time  of its
              appointment as rights agent,  have a combined  capital and surplus
              of at least $ 10 million, rather
 than $50 million.

2.            The  Company  hereby  appoints  AST as rights  agent  pursuant  to
              Section 21 of the Rights  Agreement,  from and after the Effective
              Date, to serve in that capacity for the  consideration and subject
              to all of the terms and conditions of the Rights Agreement.

3.            AST hereby  accepts the  appointment  as rights agent  pursuant to
              Section  21 of the  Rights  Agreement  and agrees to serve in that
              capacity for the consideration and subject to all of the terms and
              conditions of the Rights Agreement.

<page>

4.            From and after the Effective Date, each and every reference in the
              Rights  Agreement  to a  "Rights  Agent"  shall be  deemed to be a
              reference to AST.

5.            Section 26 of the  Rights  Agreement  is  amended to provide  that
              notices or demands  shall be addressed as follows ( until  another
              address is filed):


If to the Company:         Trimble Navigation Limited
                           749 N. Mary Avenue
                           Sunnyvale, California 94085
                           Attention: Vice President & General Counsel


If to AST:                 American Stock Transfer & Trust Company
                           59 Maiden Lane
                           New York, NY 10038
                           Attention: Corporate Trust Department

6.            Except as expressly  modified  herein,  the Rights Agreement shall
              remain in full force and effect.

7.            This  Agreement of  Substitution  and Amendment may be executed in
              one or more counterparts,  each of which shall together constitute
              one and the same document.


              IN WITNESS  WHEREOF,  the parties have caused this Agreement to be
              duly executed as of the date indicated above.

                                      TRIMBLE NAVIGATION LIMITED


                                      By: /s/ Irwin Kwatek
                                          ----------------
                                      Name: Irwin Kwatek, Vice President



                                      AMERICAN STOCK TRANSFER  & TRUST COMPANY


                                      By: /s/ Herb Lemmer
                                          ---------------
                                      Name:  


                                 EXHIBIT 10.13+



December 6, 2004


Mr. Rajat Bahri
224 Forest Hill Road
Toronto, Ontario M5P 2N5

Subject: Offer of employment

Dear Raj,

I am  pleased  to  extend  to you  this  offer of  employment  to serve as Chief
Financial Officer of Trimble Navigation Limited.  Your position becomes official
upon your election as an officer by the Board of  Directors.  We believe you are
well  suited to be a  primary  factor in  taking  Trimble  to the next  level or
performance. We anticipate your start date to be January 17, 2005.

Your base salary  compensation will be $275,000 per year. In addition,  you will
participate in the Trimble  Management  Incentive  Plan with a potential  payout
level, at target, of 50%.

You will be awarded options to purchase  100,000 shares of stock upon commencing
employment.  In addition, you will be granted an additional 50,000 stock options
upon the one year anniversary of your employment. In both cases the options will
vest at the first anniversary of the grant and monthly thereafter for five years
from the day of the grant.

You will be  granted a special  bonus to  defray  some of the costs of  northern
California  housing.  For each of the first three years of your  employment  you
will be granted a $55,000  per year  bonus at the  completion
  of each  calendar
year. For the fourth and fifth year, the bonus will be $40,000 per year.

In the event of a change of control of the  company,  you will be  provided  the
coverage as specified in the change in control  agreement  approved by the Board
of Directors. The agreement,  under defined circumstances,  generally allows for
the  payment  of one year's  base  salary  and bonus  upon your  termination  of
employment  resulting from a change in control. In addition,  it accelerates the
vesting of stock options.

You  will  be  eligible  for  the  Trimble  Executive   Non-qualified   Deferred
Compensation  Plan.  Under this plan,  you may defer up to 100% of future salary
and up to 100% of any future  bonus.  Details  can be  provided  under  separate
cover.  

<page>

Trimble will assist you in your relocation to Sunnyvale. This will include:

o    Up to 6 months interim housing;

o    Car rental (for up to 30 days) until your car arrives;

o    Movement of household goods from primary location to Sunnyvale  (Trimble to
     determine the carrier)

o    Storage of household goods for a maximum of 90 days;

o    A relocation allowance of $15,000 provided to offset miscellaneous expenses
     related to the relocation;

o    The reasonable  costs of two  house-hunting  trips (five days each) for you
     and your family including transportation, lodging and meals;

o    Closing costs on the purchase of your home.

The reimbursable  cost elements of the non-tax  deductible  elements of the move
are as follows.  The maximum  extended costs are to include all "grossed up" tax
elements.

                              Maximum base cost         Maximum extended cost
Temporary living                 $ 13,200                     $ 18,500
Realtor and other
reasonable closing
cost on purchase of home         $ 10,000                     $ 14,000
Realtor and other
reasonable closing cost on
sale of home                     $ 70,000                     $100,000
Other house hunting
costs                            $  1,000                     $  1,400

If you  voluntarily  terminate  your  employment  within 18 months of hire date,
Trimble will seek pro-rated reimbursement of relocation costs.

Trimble has an  attractive  benefits  package for employees  including  medical,
dental,  life,  short and  long-term  disability  insurance,  and a Savings  and
Retirement  Plan (401k) with a company match,  and Employee Stock Purchase Plan.
Details  of these,  and  other  benefits,  will be given  during  your  employee
orientation.  You will be  entitled  to 18 days of paid  time  off each  year in
addition to the 10 standard U.S. holidays. In addition, you will be eligible for
company-paid membership at a fitness club.

Trimble is an  "at-will"  employer,  meaning  that an employer  or employee  can
terminate the employment relationship at any time, with or without cause.

<page>

Raj, Trimble's success is derived from the people who work here. Your acceptance
of this offer will be  enthusiastically  received and we feel confident that you
will make a significant contribution to our continued success.

Please  call  me if you  have  any  questions  of if I can be of  assistance  at
408-481-7200.

Sincerely,

/s/ Steven W. Berglund

Steven W. Berglund
President and CEO



I accept the above offer of employment

/s/ Rajat Bahri,  Dec 7, 04

Rajat Bahri





                                 EXHIBIT 10.14+
                           Trimble Navigation Limited

                     Board of Directors Compensation Policy

     The  following  is a schedule of the elements of  compensation  and expense
reimbursement for nonemployee members of the board of directors.  This policy is
effective January 1, 2004.

o    A stock option  grant of 15,000  shares under the Trimble 2002 Stock Option
     Plan upon the initial appointment or election to the board.

o    An  additional  annual grant of 7,500 shares to be granted to each director
     upon  re-election by the  shareholders  at Trimble's  Annual  Shareholders'
     Meeting.

o    Options  granted to directors are at fair market value on the date of grant
     and will have a term of ten years,  vesting monthly,  on a pro-rated basis,
     over three years.  The options will  terminate 90 days after the individual
     ceases to be a member of the board.

o    An annual retainer of $20,000 paid on a quarterly basis.

o    A payment of $2,000 for each day in attendance at a board meeting.

o    A  payment  of $2,000  for each day  devoted  to  specific  board  matters,
     provided  that such  activity  has been  requested  by either  the board of
     directors or the chairman in consultation with the CEO.

o    A payment of $500 for participation in a telephonic board meeting.

o    A payment of $1,000 for each board committee
 meeting attended,  that is not
     held on the same day as a board meeting.

o    A  payment  of $500  for  participation  in a  telephonic  board  committee
     meeting.

o    A director will be paid a travel and transportation  allowance,  in lieu of
     reimbursement for expenses, in accordance with the following schedule:

     $4,000 for travel to a meeting  held  between  1,000  miles and 3,000 miles
     from the director's place of residence.

     $8,000  for  travel  to a  meeting  held more  than  3,000  miles  from the
     director's place of residence.

     Note: Miles are one-way and will be measured by air miles between airports.

o    Reimbursement of travel expenses  consistent with Trimble policy for travel
     to a meeting  held less  than  1,000  miles  from the  director's  place of
     residence  and all  necessary  travel on  Trimble  business,  other than to
     attend a board meeting.



                                 EXHIBIT 10.15+

                           TRIMBLE NAVIGATION LIMITED
                      CHANGE IN CONTROL SEVERANCE AGREEMENT
 
     THIS  AGREEMENT  is entered into as of the ___ day of _____,  20__,  by and
between Trimble  Navigation  Limited (the  "Company") and  _____________________
(the "Executive").
 
                               W I T N E S S E T H
 
     WHEREAS, the Company considers the establishment and maintenance of a sound
and vital  management  to be  essential to  protecting  and  enhancing  the best
interests of the Company and its shareholders; and

     WHEREAS,  the Company  recognizes  that,  as is the case with many publicly
held  corporations,  the  possibility  of a change in control may arise and that
such  possibility  may result in the  departure  or  distraction  of  management
personnel to the detriment of the Company and its shareholders; and

     WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company and its shareholders to secure the Executive's
continued  services  and to  ensure  the  Executive's  continued  and  undivided
dedication to his duties in the event of any threat or occurrence of a change in
control of the Company; and
 
     WHEREAS,  the Board of Directors of the Company has  authorized the Company
to enter into this Agreement.

     NOW,  THEREFORE,  for and in  consideration  of the premises and the
 mutual
covenants and agreements herein contained,  the Company and the Executive hereby
agree as follows:
 
     1. Definitions.  As used in this Agreement,  the following terms shall have
the respective meanings set forth below:

          (a) "Board" means the Board of Directors of the Company.

          (b) "Bonus" means the annual or quarterly  bonuses payable pursuant to
     the Company's  Management  Incentive  Plan or such other plan that provides
     for the  payment  of  incentive  bonuses  as may  be,  from  time to  time,
     authorized by the Board.
 
          (c)  "Cause"  means  (i)  the   Executive's   engagement  in  acts  of
     embezzlement,  dishonesty or moral  turpitude;  (ii) the  conviction of the
     Executive for having committed a felony; (iii) a breach by the Executive of
     the Executive's fiduciary duties and responsibilities to the Company having
     the  potential  to result in a  material  adverse  effect on the  Company's
     business, operations, prospects or reputation; or (iv) the repeated failure
     of the Executive to perform duties and  responsibilities  as an employee of
     the Company to the reasonable satisfaction of the Board (except in the case
     of death or  disability)  that has not been cured  within  thirty (30) days
     after a written demand for  substantial  performance  has been delivered to
     the Executive by the Board. The determination of Cause shall be made by the
     Board.

<page>

          (d) "Change in Control"  means the  occurrence of any of the following
     events:

               (i) any  "person"  (as such  term is used in  Sections  13(d) and
          14(d) of the Exchange Act) becomes the "beneficial  owner" (as defined
          in Rule  13d-3  of the  Exchange  Act),  directly  or  indirectly,  of
          securities of the Company  representing fifty percent (50%) or more of
          the total voting power  represented by the Company's then  outstanding
          voting securities; or

               (ii) the  consummation  of the sale or disposition by the Company
          of all or substantially all of the Company's assets; or

               (iii)  the  consummation  of a  merger  or  consolidation  of the
          Company   with  any  other   corporation,   other  than  a  merger  or
          consolidation  which  would  result in the  voting  securities  of the
          Company outstanding  immediately prior thereto continuing to represent
          (either by remaining  outstanding  or by being  converted  into voting
          securities  of the  surviving  entity or its  parent)  at least  sixty
          percent  (60%) of the total  voting  power  represented  by the voting
          securities  of the  Company  or such  surviving  entity or its  parent
          outstanding immediately after such merger or consolidation.

               (iv) a change in the  composition  of the  Board,  as a result of
          which fewer than a majority of the directors are Incumbent  Directors.
          "Incumbent   Directors"  shall  mean  directors  who  either  (A)  are
          directors of the Company as of the date hereof, or (B) are elected, or
          nominated for election,  to the Board with the affirmative votes of at
          least a majority of those  directors  whose election or nomination was
          not in connection with any transaction  described in subsections  (i),
          (ii) or (iii) or in  connection  with an  actual or  threatened  proxy
          contest relating to the election of directors of the Company.

     Notwithstanding  anything  in  this  Agreement  to  the  contrary,  if  the
Executive's  employment  is  terminated  prior to a Change in  Control,  and the
Executive reasonably  demonstrates that such termination was at the request of a
third party who has indicated an intention or taken steps reasonably  calculated
to effect a Change in Control, then for all purposes of this Agreement, the date
immediately  prior to the date of such termination of employment shall be deemed
to be the date of a Change in Control.
 
          (e)  "Company"  means  Trimble   Navigation   Limited,   a  California
     corporation.  

          (f) "Date of  Termination"  means  the date on which  the  Executive's
     employment by the Company terminates.

          (g) "Good  Reason"  means,  without the  Executive's  express  written
     consent,  the  occurrence of any of the following  events after a Change in
     Control:
 
               (i) the  assignment to the  Executive of any duties  (including a
          diminution  of duties)  inconsistent  in any adverse  respect with the
          Executive's position(s),  duties,  responsibilities or status with the
          Company  immediately prior to such Change in Control;  (ii) an adverse
          change  in  the  Executive's  reporting  responsibilities,  titles  or
          offices with the Company as in effect immediately prior to such Change
          in  Control;  (iii) any  removal  or  involuntary  termination  of the
          Executive from the Company  otherwise  than as expressly  permitted by

<page>

          this  Agreement  or any  failure  to  re-elect  the  Executive  to any
          position with the Company held by the Executive  immediately  prior to
          such  Change  in  Control;  (iv) a  reduction  by the  Company  in the
          Executive's rate of annual base salary as in effect  immediately prior
          to such Change in Control or as the same may be increased from time to
          time thereafter; (v) any requirement of the Company that the Executive
          (A) be based  anywhere  more  than  twenty-five  (25)  miles  from the
          facility  where the  Executive is located at the time of the Change in
          Control or (B) travel on Company  business to an extent  substantially
          more  burdensome   than  the  travel   obligations  of  the  Executive
          immediately  prior to such Change in Control;  (vi) the failure of the
          Company to (A) continue in effect any  compensation  plan in which the
          Executive  is  participating  immediately  prior  to  such  Change  in
          Control,  or the  taking of any  action  by the  Company  which  would
          adversely  affect  the  Executive's  participation  in or  reduce  the
          Executive's  benefits  under any such plan  (including  the failure to
          provide the Executive with a level of  discretionary  incentive  award
          grants  consistent  with the past  practice of the Company in granting
          such awards to the Executive during the three-Year period  immediately
          preceding  the Change in Control),  (B) provide the  Executive and the
          Executive's  dependents  with  welfare  benefits  (including,  without
          limitation,   medical,   prescription,   dental,  disability,   salary
          continuance,  employee life,  group life,  accidental death and travel
          accident  insurance  plans and programs) in  accordance  with the most
          favorable plans,  practices,  programs and policies of the Company and
          its affiliated companies in effect for the Executive immediately prior
          to such Change in Control,  (C) provide fringe  benefits in accordance
          with the most favorable plans, practices, programs and policies of the
          Company  and its  affiliated  companies  in effect  for the  Executive
          immediately  prior to such  Change  in  Control,  or (D)  provide  the
          Executive  with paid  vacation in accordance  with the most  favorable
          plans,  policies,  programs  and  practices  of the  Company  and  its
          affiliated companies as in effect for the Executive  immediately prior
          to such Change in Control, unless in the case of any violation of (A),
          (B) or (C) above,  the Executive is permitted to  participate in other
          plans,  programs or arrangements  which provide the Executive (and, if
          applicable,   the  Executive's  dependents)  with  no  less  favorable
          benefits at no greater cost to the Executive;  or (vii) the failure of
          the Company to obtain the  assumption  agreement from any successor as
          contemplated in Section 10(b) hereof.
 
     Any event or  condition  described in Sections  1(g)(i)  through (vi) which
occurs prior to a Change in Control, but was at the request of a third party who
has  indicated  an intention or taken steps  reasonably  calculated  to effect a
Change in Control,  shall  constitute Good Reason  following a Change in Control
for  purposes  of  this  Agreement  (as if a  Change  in  Control  had  occurred
immediately prior to the occurrence of such event or condition)  notwithstanding
that it occurred prior to the Change in Control.

      For  purposes  of this  Agreement,  any good faith  determination  of Good
Reason made by the Executive  shall be conclusive;  provided,  however,  that an
isolated,  insubstantial and inadvertent action taken in good faith and which is
remedied by the Company  promptly  after  receipt of notice  thereof given by an
Executive shall not constitute Good Reason. The Executive's continued employment
shall not constitute  consent to or a waiver of rights with respect to any event
or condition  constituting  Good Reason.  The Executive  must provide  notice of
termination  within  ninety (90) days of his  knowledge of an event or condition
constituting  Good  Reason  hereunder  or such event shall not  constitute  Good
Reason  hereunder.  A transaction which results in the Company no longer being a

<page>

publicly  traded  entity  shall not in and of itself be treated  as Good  Reason
unless and until one of the events or conditions  set forth in Sections  1(g)(i)
through (vii) occurs.
 
          (h) "Nonqualifying Termination" means a termination of the Executive's
     employment  (i) by the Company  for Cause,  (ii) by the  Executive  for any
     reason other than Good Reason,  (iii) as a result of the Executive's death,
     or (iv) by the Company due to the Executive's  absence from his duties with
     the Company on a  full-time  basis for at least one  hundred  eighty  (180)
     consecutive days as a result of the Executive's  incapacity due to physical
     or mental illness.
 
          (i)  "Projected  Bonus Amount"  means,  with respect to any Year,  the
     greater of (i) the  Executive's  Target Bonus Amount for such Year; or (ii)
     to the extent  calculable  after at least one calendar quarter of the Year,
     the  Bonus  the  Executive  would  have  earned  in the Year in  which  the
     Executive's  Date  of  Termination  occurs  had  the  Company's   financial
     performance through the end of the fiscal quarter immediately preceding the
     Date of  Termination  continued  throughout  said Year (the  "Earned  Bonus
     Amount").
 
          (l)  "Subsidiary"  means any  corporation or other entity in which the
     Company has a direct or indirect  ownership  interest of 50% or more of the
     total  combined  voting power of the then  outstanding  securities  of such
     corporation or other entity.
 
          (m)  "Target  Bonus  Amount"  means,  with  respect  to any Year,  the
     Participant's   target  Bonus  for  such  Year  based  upon  the  Company's
     forecasted operational plan.
 
          (n)  "Termination  Period" means the period of time  beginning  with a
     Change in Control and ending one (1) year following such Change in Control.
 
          (o) "Year" means the fiscal year of the Company.


     2. Acceleration of Options Upon Change in Control. Upon a Change in Control
each of the  Executive's  outstanding  stock  options  granted  under any of the
Company's stock option or incentive plans shall accelerate and become vested and
exercisable  with  respect  to the total  number of shares  covered  by all such
outstanding stock options.

     3. Termination of Employment.

          (a) If during the  Termination  Period the employment of the Executive
     shall terminate, other than by reason of a Nonqualifying Termination,  then
     the  Company  shall pay to the  Executive,  within five (5)  business  days
     following the Date of Termination, as compensation for services rendered to
     the Company:
 
               (i)  a  lump-sum  cash  amount  equal  to  the  sum  of  (A)  the
          Executive's base salary from the Company and its Subsidiaries  through
          the Date of Termination and any outstanding Bonus for which payment is
          due and owing at such time,  (B) any accrued  vacation pay, and (C) to
          the extent not provided  under the Company's  Bonus plans,  a pro-rata
          portion  of the  Executive's  Projected  Bonus  Amount for the Year in

<page>

          which the Executive's Date of Termination  occurs, in each case to the
          extent not theretofore paid; plus
 
               (ii) a lump-sum  cash amount  equal to the sum of (A) twelve (12)
          months of base salary calculated using the Executive's highest monthly
          rate of base salary during the 12-month period  immediately  preceding
          the Date of  Termination,  or if greater,  immediately  preceding  the
          Change in Control and (B) the highest of (x) the  Executive's  average
          Bonus  (annualized for any partial Years of employment)  earned during
          the 3-Year period immediately  preceding the Year in which the Date of
          Termination  occurs (or shorter annualized period if the Executive had
          not been employed for the full three-Year period), (y) the Executive's
          Target Bonus Amount for the Year in which the Change in Control occurs
          and (z) the Executive's  Target Bonus Amount for the Year in which the
          Date of Termination occurs; provided, that any amount paid pursuant to
          this Section  3(a)(ii)  shall offset an equal amount of any  severance
          relating  to  salary  or  bonus  continuation  to be  received  by the
          Executive upon  termination  of employment of the Executive  under any
          severance plan, policy, or arrangement of the Company.
 
          (b) If during the Termination  Period, the employment of the Executive
     shall terminate, other than by reason of a Nonqualifying Termination, for a
     period of one (1) year commencing on the Date of  Termination,  the Company
     shall continue to keep in full force and effect (or otherwise  provide) all
     policies of medical, dental,  accident,  disability and life insurance with
     respect  to the  Executive  and his  dependents  with  the  same  level  of
     coverage,  upon the same terms and otherwise to the same extent (and on the
     same  after-tax  basis),  as  such  policies  shall  have  been  in  effect
     immediately  prior to the Date of Termination (or, if more favorable to the
     Executive, immediately prior to the Change in Control), and the Company and
     the Executive  shall share the costs of the  continuation of such insurance
     coverage in the same proportion as such costs were shared immediately prior
     to the Date of Termination.

          (c) If during the Termination  Period, the employment of the Executive
     shall terminate, other than by reason of a Nonqualifying Termination,  each
     of the  Executive's  outstanding  stock  options  granted  under any of the
     Company's  stock  option or  incentive  plans shall be  exercisable  by the
     Executive until the earlier of (A) the expiration of the term of the option
     or (B) one (1) year following the Date of Termination.
 
          (d) If during the  Termination  Period the employment of the Executive
     shall terminate by reason of a Nonqualifying Termination,  then the Company
     shall pay to the Executive (or the Executive's  beneficiary or estate) such
     payments and provide to the Executive such benefits, if any, as the Company
     customarily  pays or provides to executives of the Company upon termination
     of employment.
 
     4. Golden  Parachute.  In the event that the benefits  provided for in this
Agreement  (together  with any other benefits or amounts)  otherwise  constitute
"parachute  payments"  within the meaning of Section 280G of the Code and would,
but for this  Section 4 be subject to the excise tax imposed by Section  4999 of
the Code (the "Excise Tax"), then the Executive's  benefits under this Agreement
shall be either:  (i)  delivered  in full,  or (ii)  delivered as to such lesser
extent as would  result in no  portion  of such  benefits  being  subject to the

<page>

Excise  Tax,  whichever  of the  foregoing  amounts,  taking  into  account  the
applicable federal,  state and local income taxes and the Excise Tax, results in
the receipt by the Executive on an after-tax  basis,  of the greatest  amount of
benefits,  notwithstanding  that all or some  portion  of such  benefits  may be
taxable  under  Section 4999 of the Code.  Unless the Company and the  Executive
otherwise agree in writing,  all  determinations  required to be made under this
Section 4,  including the manner and amount of any reduction in the  Executive's
benefits under this Agreement, and the assumptions to be utilized in arriving at
such determinations, shall be made in writing in good faith by Ernst & Young LLP
(the "Consulting Firm"). In the event that the Consulting Firm (or any affiliate
thereof) is unable or unwilling to act, the  Executive  may appoint a nationally
recognized public accounting firm to make the determinations  required hereunder
(which  accounting  firm  shall  then  be  referred  to as the  Consulting  Firm
hereunder).  All fees and expenses of the Consulting  Firm shall be borne solely
by the Company and the Company shall enter into any  agreement  requested by the
Consulting Firm in connection  with the  performance of the services  hereunder.
For  purposes  of  making  the  calculations  required  by this  Section  4, the
Consulting Firm may make reasonable  assumptions and  approximations  concerning
the  application  of  Sections  280G and 4999 of the Code.  The  Company and the
Executive shall furnish to the Consulting Firm such information and documents as
the Consulting Firm may reasonably  request to make a  determination  under this
Section 4.

     5. Withholding Taxes. The Company may withhold from all payments due to the
Executive  (or  his  beneficiary  or  estate)  hereunder  all  taxes  which,  by
applicable  federal,  state,  local or other law,  the  Company is  required  to
withhold therefrom.
 
     6.  Reimbursement of Expenses.  If any contest or dispute shall arise under
this Agreement  involving  termination of the  Executive's  employment  with the
Company or involving  the failure or refusal of the Company to perform  fully in
accordance with the terms hereof, the Company shall reimburse the Executive,  on
a current  basis,  for all legal  fees and  expenses,  if any,  incurred  by the
Executive in connection  with such contest or dispute  (regardless of the result
thereof), together with interest in an amount equal to the prime rate of Bank of
America  from time to time in effect,  but in no event  higher  than the maximum
legal rate  permissible  under  applicable law, such interest to accrue from the
date the Company  receives the Executive's  statement for such fees and expenses
through the date of payment thereof.
 
     7. Termination of Agreement.  This Agreement shall be effective on the date
hereof and shall continue until the first to occur of (i) the termination of the
Executive's  employment with the Company prior to a Change in Control (except as
otherwise provided hereunder),  (ii) a Nonqualifying  Termination,  or (iii) the
termination of the Executive's employment following the Termination Period.
 
     8. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle
the Executive to continued employment with the Company or its Subsidiaries,  and
if the Executive's employment with the Company shall terminate prior to a Change
in Control,  the  Executive  shall have no further  rights under this  Agreement
(except   as   otherwise   provided   hereunder);    provided,   however,   that
notwithstanding  anything  herein  to  the  contrary,  any  termination  of  the
Executive's  employment following a Change in Control shall be subject to all of
the benefit and payment provisions of this Agreement.

<page>

     9.  Obligations of the Executive.  The Executive agrees that if a Change in
Control shall occur, the Executive shall not voluntarily leave the employ of the
Company  without Good Reason  during the 90-day period  immediately  following a
Change in Control.
 
     10. Successors' Binding Obligation.

          (a)  This   Agreement   shall  not  be   terminated   by  any  merger,
     consolidation  or  corporate  reorganization  of the  Company  (a  "Company
     Change")  or  transfer  of assets.  In the event of any  Company  Change or
     transfer of assets,  the provisions of this Agreement shall be binding upon
     the surviving or resulting corporation or any person or entity to which the
     assets of the Company are transferred.
 
          (b) The Company  agrees that  concurrently  with any Company Change or
     transfer   of  assets,   it  will  cause  any   successor   or   transferee
     unconditionally to assume by written instrument  delivered to the Executive
     (or his  beneficiary  or  estate)  all of the  obligations  of the  Company
     hereunder.  Failure of the Company to obtain such  assumption  prior to the
     effectiveness of any such Company Change or transfer of assets that results
     in a Change in Control  shall  constitute  Good Reason  hereunder and shall
     entitle the Executive to  compensation  and other benefits from the Company
     in the same amount and on the same terms as the Executive would be entitled
     hereunder if the Executive's  employment were terminated following a Change
     in  Control  other  than by  reason  of a  Nonqualifying  Termination.  For
     purposes of implementing the foregoing,  the date on which any such Company
     Change or transfer  of assets  becomes  effective  shall be deemed the date
     Good Reason  occurs,  and the Executive may terminate  employment  for Good
     Reason on or following such date.
 
          (c) This Agreement shall inure to the benefit of and be enforceable by
     the   Executive's   personal   or   legal    representatives,    executors,
     administrators,  successors, heirs, distributees, devisees and legatees. If
     the Executive shall die while any amounts would be payable to the Executive
     hereunder had the  Executive  continued to live,  all such amounts,  unless
     otherwise  provided  herein,  shall be paid in accordance with the terms of
     this  Agreement  to such  person or  persons  appointed  in  writing by the
     Executive to receive such amounts or, if no person is so appointed,  to the
     Executive's estate.
 
     11. Notice.

          (a)  For   purposes   of  this   Agreement,   all  notices  and  other
     communications  required  or  permitted  hereunder  shall be in writing and
     shall be deemed to have been duly  given  when  delivered  or five (5) days
     after  deposit in the United  States  mail,  certified  and return  receipt
     requested, postage prepaid, addressed as follows:
 
            If to the Executive:
            ___________________
            ___________________
<page>


            If to the Company:
 
            Trimble Navigation Limited
            749 N. Mary Avenue
            Sunnyvale, California 94085
            Attention: General Counsel
 
      or to such other  address as either party may have  furnished to the other
      in  writing  in  accordance  herewith,  except  that  notices of change of
      address shall be effective only upon receipt. Alternatively, notice may be
      deemed  to have  been  delivered  when  sent by  facsimile  to a  location
      provided by the other party hereto.
 
          (b) A written  notice of the  Executive's  Date of  Termination by the
     Company  or the  Executive,  as the case may be,  to the  other,  shall (i)
     indicate the specific termination  provision in this Agreement relied upon,
     (ii) to the extent applicable, set forth in reasonable detail the facts and
     circumstances  claimed to provide a basis for  termination  of  Executive's
     employment   under  the  provision  so  indicated  and  (iii)  specify  the
     termination  date (which date shall not be less than  fifteen (15) nor more
     than sixty (60) days after the giving of such  notice).  The failure by the
     Executive  or the  Company  to  set  forth  in  such  notice  any  fact  or
     circumstance  which  contributes to a showing of Good Reason or Cause shall
     not waive any right of the  Executive or the Company  hereunder or preclude
     the Executive or the Company from  asserting such fact or  circumstance  in
     enforcing the Executive's or the Company's rights hereunder.
 
     12. Full Settlement;  No Mitigation.  The Company's  obligation to make any
payments  provided  for by this  Agreement  to the  Executive  and  otherwise to
perform  its  obligations  hereunder  shall  not be  affected  by  any  set-off,
counterclaim,  recoupment,  defense or other  claim,  right or action  which the
Company  may have  against  the  Executive  or  others.  In no event  shall  the
Executive be obligated to seek other  employment  or take other action by way of
mitigation of the amounts  payable to the Executive  under any of the provisions
of this  Agreement  and such  amounts  shall not be  reduced  whether or not the
Executive obtains other employment.
 
     13. Employment with Subsidiaries.  Employment with the Company for purposes
of this Agreement shall include employment with any Subsidiary.
 
     14.  Governing  Law;  Validity.   The   interpretation,   construction  and
performance of this Agreement shall be governed by and construed and enforced in
accordance  with the internal laws of the State of California  without regard to
the principle of conflicts of laws.  The invalidity or  unenforceability  of any
provision of this Agreement shall not affect the validity or  enforceability  of
any other provision of this Agreement,  which other  provisions  shall remain in
full force and effect.
 
     15. Counterparts.  This Agreement may be executed in counterparts,  each of
which  shall  be  deemed  to be an  original  and all of  which  together  shall
constitute one and the same instrument.
 
     16. Miscellaneous. No provision of this Agreement may be modified or waived
unless  such  modification  or waiver is agreed to in writing  and signed by the
Executive and by a duly authorized  officer of the Company.  No waiver by either

<page>

party  hereto  at any time of any  breach  by the  other  party  hereto  of,  or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions  at the  same or at any  prior or  subsequent  time.  Failure  by the
Executive or the Company to insist upon strict  compliance with any provision of
this  Agreement  or to assert any right the  Executive  or the  Company may have
hereunder, including without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.  Except as otherwise
specifically  provided  herein,  the  rights of, and  benefits  payable  to, the
Executive,  his estate or his  beneficiaries  pursuant to this  Agreement are in
addition to any rights of, or benefits payable to, the Executive,  his estate or
his beneficiaries under any other employee benefit plan or compensation  program
of the Company.
 
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
a duly  authorized  officer of the Company and the  Executive  has executed this
Agreement as of the day and year first above written.
 

 
Trimble Navigation Limited

By: ________________________________

Name: ______________________________

Title: _____________________________



Executive

____________________________________

Name: ______________________________

Title: _____________________________



                                 EXHIBIT 10.16+
                              Letter of Assignment



November 12, 2003


Mr. Alan Townsend
44B Glandovey Road
Christchurch 8005
New Zealand


Dear Alan:

This  letter  confirms  our  mutual  understanding  of the terms and  conditions
applying to your  international  assignment.  Such employment is subject to your
acceptance of the terms and conditions outlined in this letter. If the terms are
acceptable to you, please sign and return the attached copy of this letter.

The effective date of your  international  assignment  will be February 20, 2004
for purposes of benefits and compensation.

Your  assignment  location will be Westminster,  Colorado,  United States (U.S.)
with your point of origin designated as Christchurch, New Zealand (NZ). Your job
title and general duties will remain unchanged.


Compensation

Your base salary will be $215,000 USD annually. In addition you will be eligible
to receive a potential bonus with a target of 35% of your base salary.  You will
be paid through the standard U.S. payroll system. Salary reviews and performance
evaluations  will be conducted in  accordance  with Trimble  Navigation  Limited
policies.

Duration of Assignment
This assignment has no defined interval  although,  based on our discussions,  a
period of roughly
  five years seems to be  consistent  with your plans.  This is
dependent on proper  approval and  extensions to an L1a visa. An L1a visa can be
issued for a period of 3 years with two 2 year extensions possible.

Termination

While  employed  by  Trimble  in the  United  State you will be  subject  to all
personnel  policies  that  normally  apply to  Trimble  employees  in the United
States.  These policies include "employment at will" which means that either you
or the company may terminate the employment relationship at any time and for any
reason,  with or without notice. If you are terminate by Trimble for any reason,
other than gross negligence or gross  misconduct,  you will be offered severance

<page>

consistent with standard Trimble  severance  policy,  providing you with service
credit from your start date at Datacom in 1971.  In addition,  should either you
or Trimble  terminate the employment  relationship you will have sixty (60) days
from the effective date of the  termination to request and receive  approval for
repatriating yourself,  your family and your household effects back to your home
country.  Repatriation  benefits  are  detailed on  attachment  "A."  Failure to
repatriate  within sixty (60) days after the effective date of termination  will
result in the forfeiture of repatriation benefits.  Prior to and in exchange for
these severance benefits,  you will be asked to sign a full and final release of
the company from any further obligations.


Voluntary Separation

If you resign prior to having  completed  one full calendar year or 330 days out
of a 12 consecutive  month period  overseas,  you will reimburse the Company for
your total relocation expenses according to the following formula:

         (12 minus the number of months worked) times (total expense  divided by
12) equals amount of reimbursement to Trimble.

Transition

In lieu of a house hunting trip, Trimble will pay for up to 6 weeks of a rental.
The estimated cost is expected to be approximately $2,500.

Entrance/Work Permits/Visas

You can  coordinate  with the  appropriate  immigration  attorney  to obtain the
necessary  documentation  required  for your  relocation  to  Westminster  (i.e.
passports,  visa, work permits,  etc.). The Company will pay for these and other
costs  incurred in obtaining  permits for the employee to work in the assignment
location and for the family to live in the location.

Benefits

You will participate in the Trimble  Navigation  Limited U.S.  benefits program.
Summaries of the available plans are attached.

Vacations

You will accrue vacation (PTO) time as is standard in the United States.

Holiday/Work Schedule

You will follow the hours,  work days and public holidays  observed in the U.S.,
even if they are  substantially  different  from  those  observed  in your  home
country.

Relocation Provisions and Allowances

Relocation Allowance

<page>

You will receive a relocation allowance  equivalent to reasonable  miscellaneous
costs  related to your  relocation.  This  allowance  is provided to help defray
costs that will incurred during the relocation  process.  Any costs  anticipated
should be  discussed  before being  incurred and approved by me. The  relocation
allowance will be grossed up to cover taxes.

Home Sale and Purchase Expenses

Trimble will reimburse you for standard real estate commissions  involved in the
sale of your primary residence in New Zealand. Standard Home sale commissions in
New Zealand are defined for our purpose as 3.95% on the first  NZ$300,000 and 2%
on amounts exceeding NZ$300,000 + 12.5% GST (tax).

If you  purchase a home in the U.S.  within 12 months of the  effective  date of
your U.S.  assignment,  Trimble will reimburse you up to 1% of the mortgage loan
for loan origination fees and up to 1% of the purchase price for closing costs.

Sale of Home in U.S.

Upon a possible  future  sale of your U.S.  home it is our intent to protect you
against a purchase  prices that is lower than the one you paid for the house.  A
side  agreement  will be  developed  in the next three  weeks to cover the exact
details of the arrangement.

Temporary Living Expense

At the departure location (NZ),  Trimble will provide temporary lodging,  rental
car if  necessary  and a meal and  miscellaneous  per diem for the  employee and
spouse  for a period  not to exceed 5 days.  Costs for such  temporary  lodging,
rental car and per diem is not to exceed $1,345 USD.

Moving of Household Goods

Shipment of household  goods will be provided for you,  according to the maximum
weigh guidelines provided below, to the Westminster,  Colorado,  U.S. and at the
completion of the assignment back to Christchurch, New Zealand.

Shipment of Household Goods

A Trimble  approved  carrier handles the movement of household goods from/to the
point of origin. You are authorized to ship, at the company's expense, a maximum
weight of goods according to the following schedule:

         Air Shipment:     up to 125 Cubic Feet
         Surface Shipment: 13,000 pounds

Covered expenses  including  packing,  unpacking,  insurance,  surface shipping,
storage-in-transit, and delivery or normal household goods and personal effects.
Weight allowances on the surface shipment  excludes  interior  cartons,  packing

<page>

materials,  and exterior containers.  The cost of any items shipped in excess of
the weight  allowances  listed  above will be  assumed by the  employee.  Weight
allowances on the surface shipment exclude interior cartons,  packing materials,
and exterior  containers.  The cost of any items shipped in excess of the weight
allowances listed above and all import duties will be assumed by the employee.

This  shipment  of large  items  (such as cars,  boats,  planes,  trailers)  and
hazardous items will not be the responsibility of, nor will the shipment be paid
for by the Company.  However,  you have identified the need to ship 5-6 antiques
items.  Although we would generally expect the costs to the within the limits of
the policy, you and I will resolve any special requirements which are beyond the
scope of the policy.

There are established  maximums on the insurance of personal  effects shipped at
Company  expense.  These  are  based on the  replacement  value as stated by the
assignee on the  inventory  list  provided  at the time of move.  Coverage is in
effect from the time the goods are picked up at the home country residence until
they are delivered to the host country  residence.  Since coverage ends when the
goods  are   delivered,   insurance  at  the  host   country   location  is  the
responsibility of the assignee.

Repatriation Guidelines for Shipment of Household Goods

These  guidelines  also apply on  repatriation  or  relocation at the end of the
assignment, with additional weight limits of 20% more than those established for
expatriation.

Tax Services

Due  to  increased   financial   complexities   associated  with   international
assignments,  the  Company  has made  arrangements  for the  first  year of your
assignment  to  provide   professional  tax  services  through  the  offices  of
Pricewaterhouse Coopers (PxC). Those services will include:

o    N.Z. exit interview to discuss the tax ramifications of your assignment
o    Entrance interview with PwC representatives in the U.S.
o    Preparation  of  all  required  U.S.  and  New  Zealand  tax  returns  with
     confidential client relationship.
o    Representation  with  respect  to any tax  notices  or  audits  of  returns
     prepared by PwC if related to your assignment.

All costs  associated  with these  services  will be borne by the Company,  and,
therefore,   tax  consultation  will  be  limited  to  that  necessary  for  the
preparation of income tax returns representing the first year of assignment.  In
the event you wish to engage PwC for non-company related  consultation,  related
fees will be at your expense.  While the company is paying for tax services, the
actual payment of any taxes are the responsibility of the employee.

Travel Arrangements

Travel  arrangements  are  to  be  made  through  a  Trimble  designated  travel
coordinator.

While  it is  anticipated  that the  terms of this  Letter  of  Assignment  will
continue throughout your international assignment, Trimble reserves the right to

<page>

change  any of the terms of this  letter,  including,  but not  limited  to, the
duration  of  your  international  assignment  and the  Company's  international
policies and procedures.  However,  if a significant  change is made in your job
duties or place of employment and you choose to resign as a result,  Trimble pay
for your relocation back to New Zealand.

Please  sign and  return one copy of this  letter,  as your  acknowledgement  of
receipt, understanding and acceptance of the conditions outlined in this letter.

SIGNED AND AGREED:

Employee                             /s/ Alan R. Townsend
                                     --------------------

Date                                 12 Nov 2003
                                     -----------

Steven W. Berglund,                  /s/ Steven W. Berglund
President & CEO                      ----------------------

Date                                 12 Nov 2003
                                     -----------


                 After all signatures have been affixed, please
                            return this agreement to:
                               Trimble Navigation
                                C/O Bill Burgess
                                645 N. Mary Ave.
                               Sunnyvale, CA 94088





<PAGE>


                                  ATTACHMENT A


Repatriation Estimate
Airfare - Coach $1500 x 2                                        $ 3,000.00
Household Goods Sea Shipment (lbs) - Estimate                    $18,488.00
Household Goods Air Shipment (lbs) - Estimate                     $4,274.00
Household Goods Storage (30 days) plus warehouse handling         $1,000.00
Repatriation Departure: Hotel 5 days                                $753.00
Repatriation Departure: Rental Car (5 days)                         $606.00
Repatriation Departure: Per Diem                                    $250.00
Repatriation Destination: Temporary Living (30 days)              $2,112.84
Repatriation Destination: Per Diem                                $1,500.00
Repatriation Destination: Rental Car                              $1,386.00
Repatriation Tax Consultation, USA                                  $610.00
Home Sale in U.S.                                                $51,000.00
Repatriation Tax Consultation, New Zealand                        $1,096.00
                                                  Sub-Total      $86,075.84
Tax Gross-ups                                                     $9,000.00

                                               Total in USD      $95,075.84



                                 Exhibit 10.17+




January 19, 2004

Mr. Alan Townsend
44B Glandovey Road
Christchurch 8005 New Zealand

Dear Alan,

This letter  supplements  the Letter of Assignment  with you, dated November 12,
2003. That letter provides for certain  benefits in connection with your move to
Colorado and the purchase of a home there (your "US Home").

In the event that (i) you are  returning  to New  Zealand on a date that is more
than four (4) years  after your  employment  start date in  Colorado  or you are
terminated  by Trimble  for any  reason,  other than gross  negligence  or gross
misconduct, and (ii) you sell your US Home, within six (6) months following your
last day of employment by Trimble in the US, for a Net Sales Price that is lower
than the Purchase  Price you paid for it,  Trimble  will pay you the  difference
between  the Net  Sales  Price  and the  Purchase  Price  of your US  Home.  The
"Purchase Price" means the price paid plus all usual and customary closing costs
paid by you less any amounts for closing  costs that were  reimbursed  to you by
Trimble.  The "Net Sales  Price"  means the amount you receive  from the sale of
your US Home after  deduction of all usual and  customary  closing costs paid by
you plus any  amounts  for these  closing  costs to be paid to you by Trimble as

repatriation  benefits  pursuant to the Letter of Assignment,  or otherwise.  No
payment  will be made  to you if your US Home is sold  for a price  that is more
than 5% below a recent appraisal of the US Home.

In the event that (i) you are returning to New Zealand or you are  terminated by
Trimble for any reason,  other than gross  negligence or gross  misconduct,  and
(ii) you sell  your US Home  for a Net  Sales  Price  that is  greater  than the
Purchase Price you paid for it, Trimble will reduce the amount to be paid to you
as repatriation  benefits pursuant to the Letter of Assignment for closing costs
by an amount  equal to the  difference  between the  Purchase  Price and the Net
Sales Price,  less any exchange  rate  (determined  by reference to the exchange
rate  published in the Wall Street Journal on the date of transfer of the funds)
loss, in New Zealand Dollar terms, on the down payment for your  residence.  For
example,  if you put down a  US$100,000  down  payment  and the NZD  exchange is
NZ$150,000 and you later sell your house when the NZD exchange for NZ$150,000 is
US$92,000,  and you have a gain of US$40,000 on the sale of your house,  we will
consider that gain to be US$32,000 for the purpose of calculating a reduction in
the repatriation benefits payable to you.

This  letter  supplements  and is in  addition  to the  terms of the  Letter  of
Assignment, which remains in effect.

Very truly yours,

/s/ Steven W. Berglund
----------------------
Steven W. Berglund
President & CEO

ACCEPTED AND AGREED:

/s/ Alan R. Townsend
--------------------
Alan Townsend


                                  EXHIBIT 21.1
                           SUBSIDIARIES OF THE COMPANY


Name of Subsidiary                                 Jurisdiction of Incorporation
------------------                                 -----------------------------

Trimble Navigation Australia Pty Limited                 Australia

Spectra Precision Pty Ltd.                               Australia

Trimble Austria Ges.mbH                                  Austria

Trimble Belgium BVBA                                     Belgium

Trimble Brasil Limitada                                  Brazil

Jamestown Manufacturing Corporation                      California

Pacific Crest Corporation                                California

Trimble Export Limited                                   California

Trimble Navigation International Limited                 California

Trimble Specialty Products, Inc.                         California

TR Navigation Corporation                                California

Applanix Corporation                                     Canada

Trimble Canada Ltd.                                      Canada

Trimble Exchangeco Ltd.                                  Canada

Trimble Holdings Co.                                     Canada

Trimble Electronic Products (Shanghai) Co. Ltd.          China

Trimble Navigation Technology (Shanghai) Co. Ltd.        China

Mensi, Inc.                                              Delaware

SPHM Inc.                                                Delaware

Trimble Middle East WLL                                  Egypt

Mensi, S.A.                                              France

Trimble France S.A.S.                                    France

GeoNav GmbH                                              Germany

Trimble GmbH                                             Germany

Trimble Holdings GmbH                                    Germany

Trimble Jena                                             Germany

Trimble Kaiserslautern GmbH                              Germany

Trimble terraSat GmbH                                    Germany

Trimble Italia SRL                                       Italy

Trimble Navigation Italia s.r.l                          Italy

Mensi, KK                                                Japan

Trimble Japan K.K.                                       Japan

Spectra Precision de Mexico, SA de CV                    Mexico

Trimble Mexico S
 de RL                                   Mexico

Trimble Europe B.V.                                      Netherlands

Trimble Navigation New Zealand Limited                   New Zealand

Tripod Data Systems                                      Oregon

Trimble Navigation Singapore PTE Limited                 Singapore

Trimble International Holdings S.L.                      Spain

Trimble Navigation Iberica S.L.                          Spain

Spectra Precision Scandinavia AB                         Sweden

Trimble AB                                               Sweden

TNL Flight Services, Inc                                 Texas

Applanix LLC                                             Texas

Trimble Navigation Europe Limited                        United Kingdom

Trimble Pty Ltd.                                         United Kingdom

Trimble Mobile Solutions, Inc.                           Virginia

                                  EXHIBIT 23.1
                           TRIMBLE NAVIGATION LIMITED

Consent of Independent Registered Public Accounting Firm

We consent to the  incorporation by reference in the Registration  Statements on
Forms 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,  333-38264, 333-65758, 333-65760, 333-97979,  333-118212),
pertaining  to the 1983 Stock Option Plan,  the Trimble  Navigation  Savings and
Retirement  Plan,  the 1990  Director  Stock Option Plan,  the  "Position Us for
Progress"  1992 Employee Stock Bonus Plan,  the 1992  Management  Discount Stock
Option Plan, the 1993 Stock Option Plan, Trimble  Non-statutory Option Plan, the
2002 Stock Option Plan, and the 1988 Employee Stock Purchase Plan, and Forms S-3
Nos. 333-76986, 333-86656, 333-103676, 333-106893, and the related Prospectuses,
of our reports dated March 11, 2005, with respect to the consolidated  financial
statements  and  schedule  of Trimble  Navigation  Limited,  Trimble  Navigation
Limited  management's  assessment of the  effectiveness of internal control over
financial  reporting,  and the  effectiveness of internal control over financial
reporting of Trimble  Navigation  Limited,  included in this
 Annual Report (Form
10-K) for the year ended December 31, 2004.

                                                   /s/ Ernst & Young LLP


Palo Alto, California
March 11, 2005

                                  EXHIBIT 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER


I, Steven W. Berglund, certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of  Trimble  Navigation
     Limited;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;
 
3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;
 
4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:
 
     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure
  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;
 
     b)   Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;
 
     c)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and
 
     d)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and
 
5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):
 
     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and
 
     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date:      March 14, 2005                            /s/ Steven W. Berglund
                                                     ----------------------
                                                     Steven W. Berglund
                                                     Chief Executive Officer





                                  EXHIBIT 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Rajat Bahri, certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of  Trimble  Navigation
     Limited;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;
 
3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;
 
4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:
 
     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that
  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;
 
     b)   Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;
 
     c)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and
 
     d)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and
 
5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):
 
     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and
 
     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date:  March 14, 2005                                /s/ Rajat Bahri
                                                     ---------------
                                                     Rajat Bahri
                                                     Chief Financial Officer


                                  EXHIBIT 32.1


            CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. SECTION 1350,
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Trimble  Navigation Limited
(the  "Company")  for the  period  ended  December  31,  2004 as filed  with the
Securities and Exchange Commission on the date hereof (the "Report"),  Steven W.
Berglund, as Chief Executive Officer of the Company, hereby certifies,  pursuant
to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

         (1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, and

         (2) the  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

/s/  Steven W. Berglund
     ------------------
     Steven W. Berglund
     Chief Executive Officer

     March 14, 2005


This  certification  accompanies  this  Report  pursuant  to Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002,  be deemed  filed by the  Company  for  purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.



                                  EXHIBIT 32.2


            CERTIFICATION OF CFO PURSUANT TO 18 U.S.C. SECTION 1350,
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Trimble  Navigation Limited
(the  "Company")  for the  period  ended  December  31,  2004 as filed  with the
Securities  and Exchange  Commission  on the date hereof (the  "Report"),  Rajat
Bahri, as Chief Financial Officer of the Company, hereby certifies,  pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, to the best of his knowledge, that:

         (1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, and

         (2) the  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

/s/ Rajat Bahri
    -----------
    Rajat Bahri
    Chief Financial Officer

    March 14, 2005


This  certification  accompanies  this  Report  pursuant  to Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002,  be deemed  filed by the  Company  for  purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.