CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Second Quarter of

First Two Quarters of

2013

2012

2013

2012

Revenues:

        Product

$ 425,880

$ 402,198

$ 838,667

$ 800,736

        Service

84,511

63,595

166,107

121,025

        Subscription

65,902

51,767

127,630

98,066

Total revenues

576,293

517,560

1,132,404

1,019,827

Cost of sales:

        Product

200,493

199,135

399,194

392,179

        Service

32,549

21,455

63,392

43,976

        Subscription

20,995

15,978

40,967

30,409

        Amortization of purchased intangible assets

19,855

13,296

39,536

26,417

Total cost of sales

273,892

249,864

543,089

492,981

Gross margin

302,401

267,696

589,315

526,846

Gross margin (%)

52.5%

51.7%

52.0%

51.7%

Operating expenses

    Research and development

76,555

64,305

150,163

124,540

    Sales and marketing

85,307

77,589

168,930

153,613

    General and administrative

52,760

49,987

104,730

96,873

    Restructuring

2,966

1,112

4,571

1,593

    Amortization of purchased intangible assets

19,908

15,782

39,559

31,458

       Total operating expenses

237,496

208,775

467,953

408,077

Operating income 

64,905

58,921

121,362

118,769

Non-operating income, net

    Interest expense, net

(4,255)

(3,773)

(9,326)

(7,636)

    Foreign currency transaction gain (loss), net

600

196

(969)

(2,017)

    Income from equity method investments, net

7,157

7,063

11,414

13,255

    Other income, net

284

884

579

1,247

       Total non-operating income, net

3,786

4,370

1,698

4,849

Income before taxes

68,691

63,291

123,060

123,618

Income tax provision

13,738

10,126

19,175

20,381

Net income

54,953

53,165

103,885

103,237

Less: Net gain (loss) attributable to noncontrolling interests 

372

(527)

(504)

(1,273)

Net income attributable to Trimble Navigation Ltd.

$   54,581

$  53,692

$ 104,389

$ 104,510

Earnings per share attributable to Trimble Navigation Ltd.

     Basic

$      0.21

$      0.21

$      0.41

$      0.42

     Diluted

$      0.21

$      0.21

$      0.40

$      0.41

Shares used in calculating earnings per share:

    Basic

256,186

250,732

255,683

249,736

    Diluted

260,533

256,586

260,416

256,052

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

Second Quarter

Fiscal Year End

2013

2012

Assets

Current assets:

   Cash and cash equivalents

$         129,072

$         157,771

   Accounts receivables, net

356,264

323,477

   Other receivables

20,162

17,327

   Inventories, net

258,709

240,529

   Deferred income taxes

41,865

43,473

   Other current assets

40,568

33,396

      Total current assets

846,640

815,973

Property and equipment, net

123,795

96,890

Goodwill

1,911,578

1,815,699

Other purchased intangible assets, net

648,610

644,419

Other non-current assets

103,137

96,123

      Total assets

$      3,633,760

$      3,469,104

Liabilities 

Current liabilities:

   Current portion of long-term debt

$         109,561

$           38,092

   Accounts payable

108,864

124,532

   Accrued compensation and benefits

81,938

86,064

   Deferred revenue

189,915

138,920

   Accrued warranty expense

16,921

17,066

   Other accrued liabilities

74,554

63,996

      Total current liabilities

581,753

468,670

Non-current portion of long-term debt

789,626

873,066

Non-current deferred revenue

13,207

7,262

Deferred income taxes

141,057

148,260

Other non-current liabilities

66,828

58,322

      Total liabilities

1,592,471

1,555,580

Commitments and contingencies

Equity

Shareholders' equity:

   Common stock

1,057,927

1,006,818

   Retained earnings

970,657

868,026

   Accumulated other comprehensive income (loss)

(4,711)

22,611

Total Trimble Navigation Ltd. shareholders' equity

2,023,873

1,897,455

Noncontrolling interests 

17,416

16,069

      Total equity

2,041,289

1,913,524

      Total liabilities and equity

$      3,633,760

$      3,469,104

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands)

(Unaudited)

First Two Quarters of

2013

2012

Cash flow from operating activities:

    Net Income

$         103,885

$ 103,237

    Adjustments to reconcile net income to net cash provided by

       operating activities:

         Depreciation expense

12,854

11,300

         Amortization expense

79,095

57,875

         Provision for doubtful accounts

261

1,486

         Deferred income taxes

(13,732)

381

         Stock-based compensation

17,253

15,944

         Income from equity method investments

(11,414)

(13,255)

         Excess tax benefit for stock-based compensation

(7,616)

(15,254)

         Provision for excess and obsolete inventories

569

4,993

         Other non-cash items

(494)

(1,851)

    Add decrease (increase) in assets:

         Accounts receivables

(24,071)

(38,589)

         Other receivables

(1,558)

(6,638)

         Inventories

(14,725)

594

         Other current and non-current assets

(12,165)

(8,904)

    Add increase (decrease) in liabilities:

         Accounts payable

(18,936)

4,148

         Accrued compensation and benefits

(7,166)

2,270

         Deferred revenue

55,994

32,117

         Accrued warranty expense

(154)

(1,814)

         Other current and non-current liabilities

14,163

7,054

 Net cash provided by operating activities 

172,043

155,094

 Cash flow from investing activities: 

      Acquisitions of businesses, net of cash acquired 

(178,953)

(337,676)

      Acquisitions of property and equipment 

(39,431)

(21,308)

      Dividends received from equity method investments 

2,526

221

      Other 

730

(706)

 Net cash used in investing activities 

(215,128)

(359,469)

 Cash flow from financing activities: 

      Issuance of common stock, net 

23,954

27,162

      Excess tax benefit for stock-based compensation 

7,616

15,254

      Proceeds from long-term debt and revolving credit lines 

239,613

436,500

      Payments on short-term and long-term debt  

(252,780)

(304,013)

 Net cash provided by financing activities 

18,403

174,903

 Effect of exchange rate changes on cash and cash equivalents 

(4,017)

(3,212)

 Net decrease in cash and cash equivalents 

(28,699)

(32,684)

 Cash and cash equivalents - beginning of period 

157,771

154,621

 Cash and cash equivalents - end of period 

$         129,072

$ 121,937

REPORTING SEGMENTS

(Dollars in thousands)

(Unaudited)

Reporting Segments

and

Field

Mobile

Advanced

Construction

Solutions

Solutions

Devices

SECOND QUARTER OF FISCAL 2013 :

Revenues

$    313,446

$  115,864

$  115,524

$   31,459

Operating income before corporate allocations:

$      66,840

$    43,372

$    15,435

$    6,514

Operating margin (% of segment external net revenues)

21.3%

37.4%

13.4%

20.7%

SECOND QUARTER OF FISCAL 2012 :

Revenues

$    284,175

$  123,371

$    81,402

$   28,612

Operating income before corporate allocations:

$      59,473

$    46,623

$     5,624

$    3,913

Operating margin (% of segment external net revenues)

20.9%

37.8%

6.9%

13.7%

FIRST TWO QUARTERS OF FISCAL 2013 :

Revenue

$    580,317

$  263,345

$  225,688

$   63,054

Operating income before corporate allocations:

$    109,813

$  102,898

$    27,008

$   12,999

Operating margin (% of segment external net revenues)

18.9%

39.1%

12.0%

20.6%

FIRST TWO QUARTERS OF FISCAL 2012 :

Revenue

$    533,060

$  270,870

$  159,785

$   56,112

Operating income before corporate allocations:

$      99,550

$  108,984

$    12,982

$    7,252

Operating margin (% of segment external net revenues)

18.7%

40.2%

8.1%

12.9%

GAAP TO NON-GAAP RECONCILIATION

(Dollars in thousands, except per share data)

(Unaudited)

Second Quarter of

First Two Quarters of

2013

2012

2013

2012

Dollar

% of

Dollar

% of

Dollar

% of

Dollar

% of

Amount

Revenue

Amount

Revenue

Amount

Revenue

Amount

Revenue

GROSS MARGIN:

GAAP gross margin:

$   302,401

52.5%

$   267,696

51.7%

$   589,315

52.0%

$   526,846

51.7%

Restructuring

( A )

766

0.1%

34

0.0%

821

0.1%

79

0.0%

Amortization of purchased intangible assets

( B )

19,855

3.4%

13,296

2.6%

39,536

3.5%

26,417

2.6%

Stock-based compensation

( C )

607

0.1%

458

0.1%

1,207

0.1%

978

0.1%

Amortization of acquisition-related inventory step-up

( D )

524

0.1%

122

0.0%

1,127

0.1%

130

0.0%

Non-GAAP gross margin: 

$   324,153

56.2%

$   281,606

54.4%

$   632,006

55.8%

$   554,450

54.4%

OPERATING EXPENSES:

GAAP operating expenses:

$   237,496

41.2%

$   208,775

40.3%

$   467,953

41.3%

$   408,077

40.0%

Restructuring

( A )

(2,966)

-0.5%

(1,112)

-0.2%

(4,571)

-0.4%

(1,593)

-0.2%

Amortization of purchased intangible assets

( B )

(19,908)

-3.5%

(15,782)

-3.0%

(39,559)

-3.5%

(31,458)

-3.1%

Stock-based compensation

( C )

(7,828)

-1.4%

(7,697)

-1.5%

(16,046)

-1.4%

(14,966)

-1.4%

Acquisition costs

( E )

(2,976)

-0.4%

(7,815)

-1.5%

(6,394)

-0.6%

(12,581)

-1.2%

Non-GAAP operating expenses:

$   203,818

35.4%

$   176,369

34.1%

$   401,383

35.4%

$   347,479

34.1%

OPERATING INCOME:

GAAP operating income:

$     64,905

11.3%

$     58,921

11.4%

$   121,362

10.7%

$   118,769

11.6%

Restructuring

( A )

3,732

0.6%

1,146

0.2%

5,392

0.5%

1,672

0.2%

Amortization of purchased intangible assets

( B )

39,763

6.9%

29,078

5.6%

79,095

7.0%

57,875

5.7%

Stock-based compensation

( C )

8,435

1.5%

8,155

1.6%

17,253

1.5%

15,944

1.6%

Amortization of acquisition-related inventory step-up

( D )

524

0.1%

122

0.0%

1,127

0.1%

130

0.0%

Acquisition costs

( E )

2,976

0.5%

7,815

1.5%

6,394

0.6%

12,581

1.2%

Non-GAAP operating income: 

$   120,335

20.9%

$   105,237

20.3%

$   230,623

20.4%

$   206,971

20.3%

NON-OPERATING INCOME, NET:

GAAP non-operating income, net:

$      3,786

$      4,370

$       1,698

$      4,849

Acquisition / divestiture gain

( E )

(459)

(557)

(860)

(113)

Foreign exchange loss associated with acquisitions

( F )

-

-

-

1,578

Non-GAAP non-operating income, net: 

$      3,327

$      3,813

$          838

$      6,314

GAAP and 

GAAP and 

GAAP and 

GAAP and 

Non-GAAP

Non-GAAP

Non-GAAP

Non-GAAP

Tax Rate %

( H )

Tax Rate %

( H )

Tax Rate %

( H )

Tax Rate %

( H )

INCOME TAX PROVISION:

GAAP income tax provision:

$     13,738

20%

$     10,126

16%

$     19,175

16%

$     20,381

16%

Non-GAAP items tax effected

( G )

10,994

7,321

16,337

14,785

Non-GAAP income tax provision: 

$     24,732

20%

$     17,447

16%

$     35,512

16%

$     35,166

16%

NET INCOME:  

GAAP net income attributable to Trimble Navigation Ltd.

$     54,581

$     53,692

$   104,389

$   104,510

Restructuring

( A )

3,732

1,146

5,392

1,672

Amortization of purchased intangible assets

( B )

39,763

29,078

79,095

57,875

Stock-based compensation

( C )

8,435

8,155

17,253

15,944

Amortization of acquisition-related inventory step-up

( D )

524

122

1,127

130

Acquisition / divestiture costs, net

( E )

2,517

7,258

5,534

12,468

Foreign exchange loss associated with acquisitions

( F )

-

-

-

1,578

Non-GAAP items tax affected

( G )

(10,994)

(7,321)

(16,337)

(14,785)

Non-GAAP net income attributable to Trimble Navigation Ltd.

$     98,558

$     92,130

$   196,453

$   179,392

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share attributable to Trimble Navigation Ltd.

$        0.21

$        0.21

$         0.40

$        0.41

Restructuring

( A )

0.01

-

0.02

0.01

Amortization of purchased intangible assets

( B )

0.15

0.11

0.30

0.23

Stock-based compensation

( C )

0.04

0.04

0.07

0.06

Amortization of acquisition-related inventory step-up

( D )

-

-

-

-

Acquisition / divestiture costs, net

( E )

0.01

0.03

0.02

0.05

Foreign exchange loss associated with acquisitions

( F )

-

-

-

0.01

Non-GAAP items tax affected

( G )

(0.04)

(0.03)

(0.06)

(0.07)

Non-GAAP diluted net income per share attributable to Trimble Navigation Ltd.

$        0.38

$        0.36

$         0.75

$        0.70

OPERATING LEVERAGE:

Increase in non-GAAP operating income

$     15,098

$     24,910

$     23,652

$     56,542

Increase in revenue

$     58,733

$   110,391

$   112,577

$   228,365

Operating leverage (increase in non-GAAP operating 

income as a % of increase in revenue)

25.7%

22.6%

21.0%

24.8%

GAAP TO NON-GAAP RECONCILIATION (CONTINUED)

(Dollars in thousands, except per share data)

(Unaudited)

Second Quarter of

First Two Quarters of

2013

2012

2013

2012

% of Segment

Revenue

% of Segment Revenue

% of Segment

Revenue

% of Segment

Revenue

SEGMENT OPERATING INCOME:

Engineering and Construction

GAAP operating income before corporate allocations:

$ 66,840

21.3%

$ 59,473

20.9%

$ 109,813

18.9%

$  99,550

18.7%

Stock-based compensation

( I )

2,890

0.9%

3,299

1.2%

5,752

1.0%

6,055

1.1%

Non-GAAP operating income before corporate allocations:

$ 69,730

22.2%

$ 62,772

22.1%

$ 115,565

19.9%

$ 105,605

19.8%

Field Solutions

GAAP operating income before corporate allocations:

$ 43,372

37.4%

$ 46,623

37.8%

$ 102,898

39.1%

$ 108,984

40.2%

Stock-based compensation

( I )

827

0.7%

681

0.5%

1,544

0.6%

1,324

0.5%

Non-GAAP operating income before corporate allocations:

$ 44,199

38.1%

$ 47,304

38.3%

$ 104,442

39.7%

$ 110,308

40.7%

Mobile Solutions

GAAP operating income before corporate allocations:

$ 15,435

13.4%

$   5,624

6.9%

$  27,008

12.0%

$  12,982

8.1%

Stock-based compensation

( I )

948

0.8%

235

0.3%

1,860

0.8%

1,028

0.7%

Non-GAAP operating income before corporate allocations:

$ 16,383

14.2%

$   5,859

7.2%

$  28,868

12.8%

$  14,010

8.8%

Advanced Devices

GAAP operating income before corporate allocations:

$   6,514

20.7%

$   3,913

13.7%

$  12,999

20.6%

$    7,252

12.9%

Stock-based compensation

( I )

901

2.9%

540

1.9%

1,750

2.8%

1,172

2.1%

Non-GAAP operating income before corporate allocations:

$   7,415

23.6%

$   4,453

15.6%

$  14,749

23.4%

$    8,424

15.0%

FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION

(Unaudited)

Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. The non-GAAP financial measures included in the previous table as well as detailed explanations to the adjustments to comparable GAAP measures, are set forth below:

Non-GAAP gross margin

We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions and manufacturing costs influence our business.  Non-GAAP gross margin excludes restructuring costs, amortization of purchased intangible assets, stock-based compensation and amortization of acquisition-related inventory step-up from GAAP gross margin. We believe that these exclusions offer investors additional information that may be useful to view trends in our gross margin performance.

Non-GAAP operating expenses

We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue. Non-GAAP operating expenses exclude restructuring costs, amortization of purchased intangible assets, stock-based compensation and acquisition costs associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration costs, and acquisition bonus payments from GAAP operating expenses. We believe that these exclusions offer investors supplemental information to facilitate comparison of our operating expenses to our prior results. 

Non-GAAP operating income

We believe our investors benefit by understanding our non-GAAP operating income trends which are driven by revenue, gross margin, and spending. Non-GAAP operating income excludes restructuring costs, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up and acquisition costs associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration costs, and acquisition bonus payments. We believe that these exclusions offer an alternative means for our investors to evaluate current operating performance compared to results of other periods. 

Non-GAAP non-operating income, net

We believe this measure helps investors evaluate our non-operating income trends. Non-GAAP non-operating income, net excludes acquisition and divestiture gains associated with unusual acquisition related items such as adjustments to the fair value of earn-out liabilities and gains or losses related to the acquisition or sale of certain businesses and investments. These gains are specific to particular acquisitions and divestitures and vary significantly in amount and timing. Non-GAAP non-operating income, net also excludes foreign exchange loss specifically associated with a hedge for one of our acquisitions. We believe that these exclusions provide investors with a supplemental view of our ongoing financial results.

Non-GAAP income tax provision

Non-GAAP items tax effected adjusts the provision for income taxes to reflect the effect of certain non-GAAP items on non-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in our non-GAAP presentation.

Non-GAAP net income

This measure provides a supplemental view of net income trends which are driven by non-GAAP income before taxes and our non-GAAP tax rate. Non-GAAP net income excludes restructuring costs, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition and divestiture costs, a foreign exchange loss from a hedge associated with one of our acquisitions, and non-GAAP tax adjustments from GAAP net income. We believe our investors benefit from understanding these exclusions and from an alternative view of our net income performance as compared to our past net income performance.

Non-GAAP diluted net income per share

We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the company. Non-GAAP diluted net income per share excludes restructuring costs, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventory step-up, acquisition and divestiture costs, a foreign exchange loss from a hedge associated with one of our acquisitions, and non-GAAP tax adjustments from GAAP diluted net income per share. We believe that these exclusions offer investors a useful view of our diluted net income per share as compared to our past diluted net income per share. 

Non-GAAP operating leverage

We believe this information is beneficial to investors as a measure of how much incremental revenue is contributed to our operating income. Non-GAAP operating leverage is the increase in non-GAAP operating income as a percentage of the increase in revenue. We believe that this information offers investors supplemental information to evaluate our current performance and to compare to our past non-GAAP operating leverage. 

Non-GAAP segment operating income

Non-GAAP segment operating income excludes stock-based compensation from GAAP segment operating income. We believe this information is useful to investors because some may exclude stock-based compensation as an alternative view when assessing trends in the operating income of our segments. 

These non-GAAP measures can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors. We believe some of our investors track our "core operating performance" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our operations. Core operating performance excludes items that are non-cash, not expected to recur or not reflective of ongoing financial results.  Management also believes that looking at our core operating performance provides a supplemental way to provide consistency in period to period comparisons.  Accordingly, management excludes from non-GAAP those items relating to restructuring, amortization of purchased intangible assets, stock based compensation, amortization of acquisition-related inventory step-up, acquisition and divestiture costs, a foreign exchange loss from a hedge associated with one of our acquisitions, and non-GAAP tax adjustments.  For detailed explanations of the adjustments made to comparable GAAP measures, see items (A) - ( I ) below,

( A )

Restructuring costs. Included in our GAAP presentation of cost of sales and operating expenses, restructuring costs recorded are primarily for employee compensation resulting from reductions in employee headcount in connection with our company restructurings.  We exclude restructuring costs from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparisons to our past operating performance.  We have incurred  restructuring expense in each of the last three years however the amount incurred can vary significantly based on whether a restructuring has occurred in the period and the timing of headcount reductions. 

( B )

Amortization of purchased intangible assets. Included in our GAAP presentation of gross margin and operating expenses is amortization of purchased intangible assets. US GAAP accounting requires that intangible assets are recorded at fair value and amortized over their useful lives. Consequently, the timing and size of our acquisitions will cause our operating results to vary from period to period, making a comparison to past performance difficult for investors. This accounting treatment may cause differences when comparing our results to companies that grow internally because the fair value assigned to the intangible assets acquired through acquisition may significantly exceed the equivalent expenses that a company may incur for similar efforts when performed internally. Furthermore, the useful life that we expense our intangible assets over may be substantially different from the time period that an internal growth company incurs and recognizes such expenses. We believe that by excluding the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed, it provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisitions and to those of our competitors that have pursued internal growth strategies. However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult.     

( C )

Stock-based compensation. Included in our GAAP presentation of cost of sales and operating expenses, stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. We exclude stock-based compensation expense from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as it is a non-cash expense.   For the second quarter and the first two quarters of fiscal 2013 and 2012, stock-based compensation was allocated as follows: 

Second Quarter of

First Two Quarters of

(Dollars in thousands)

2013

2012

2013

2012

Cost of sales

$                 607

$                 458

$              1,207

$                 978

Research and development

1,232

1,477

2,379

2,706

Sales and Marketing

1,761

1,837

3,525

3,628

General and administrative

4,835

4,383

10,142

8,632

$              8,435

$              8,155

$            17,253

$             15,944

( D )

Amortization of acquisition-related inventory step-up.  The purchase accounting entries associated with our business acquisitions require us to record inventory at its fair value, which is sometimes greater than the previous book value of the inventory.  Included in our GAAP presentation of cost of sales, the increase in inventory value is amortized to cost of sales over the period that the related product is sold.  We exclude inventory step-up amortization from our non-GAAP measures because it is a non-cash expense that we do not believe is indicative of our ongoing operating results.  We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.

( E )

Acquisition / divestiture items.  Included in our GAAP presentation of operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration costs and acquisition bonus payments.  Included in our GAAP presentation of non-operating income, net, acquisition / divestiture gain includes unusual acquisition or divestiture related items such as adjustments to the fair value of earn-out liabilities and gains on divestitures of certain businesses and investments. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures are costs specific to particular acquisitions. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

( F )

Foreign exchange loss associated with acquisitions.  This amount represents a loss on a foreign exchange hedge associated with one of our acquisitions.  We excluded the foreign exchange loss from our non-GAAP measures because we believe that the exclusion of this item provides investors an enhanced view of the cost structure of our operations and facilitates comparisons with the results of other periods.                     

( G )

Non-GAAP items tax effected.  This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items ( A ) - ( F ) on non-GAAP net income.   We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation. 

( H )

GAAP and non-GAAP tax rate %.  These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes.   We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to non-GAAP tax rates in prior periods.