Exhibit 99.02
INDEX TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Page
Unaudited Pro Forma Condensed
Combined Financial Statements 26
Unaudited Pro Forma Condensed Combined
Balance Sheet as of December 29, 2006 26
Unaudited Pro Forma Condensed Combined
Statement of Income for the year ended December 29, 2006 28
Notes to Unaudited Pro Forma
Condensed Combined Financial Statements 30
23
On December 10, 2006, Trimble Navigation Limited ("Trimble") and @Road,
Inc. ("@Road") (together the "Companies") entered into a definitive merger
agreement.
Under the terms of the agreement, Trimble acquired all of the outstanding
shares of @Road common stock for a total merger consideration of $7.50 per
share. Trimble elected to issue $2.50 per share of the total merger
consideration in the form of Trimble common stock ("Common Stock") to be based
upon the 5-day average closing price of Trimble shares six trading days prior
to the closing of the transaction. Further, each share of Series A-1
Redeemable Preferred Stock, par value $0.001 per share, of @Road and each
share of Series A-2 Redeemable Preferred Stock, par value $0.001 per share, of
@Road was entitled to receive an amount in cash equal to $100.00 plus all
declared or accumulated but unpaid dividends with respect to such shares as of
immediately prior to the effective time of the merger and each share of Series
B-1 Redeemable Preferred Stock, par value $0.001 per share, of @Road and each
share of Series B-2 Redeemable Preferred Stock, par value $0.001 per share, of
@Road was entitled to receive an amount in cash equal to $831.39 plus all
declared or accumulated but unpaid dividends with respect to such shares as of
immediately prior to the effective time of the merger. In addition, all @Road
vested stock options were terminated and the holders of each such option were
entitled to receive the excess, if any, of the aggregate consideration over
the exercise price. At the effective time of the merger, all unvested @Road
stock options with an exercise price in excess of $7.50 were terminated and
all unvested stock options that had exercise prices of $7.50 or less were
exchanged for options to acquire Common Stock of Trimble.
@Road's historical consolidated financial statements as of December 31,
2006 and December 31, 2005, and for each of the three years in the period
ended December 31, 2006 are included as Exhibit 99.01 to this Form 8-K/A. The
unaudited pro forma condensed combined financial statements should be read in
conjunction with, and are qualified in their entirety by, the notes thereto
and the historical combined financial statements of both Trimble and @Road,
including the respective notes thereto, which are incorporated by reference in
this document or included elsewhere herein.
Trimble's 2006 fiscal year ended on December 29, 2006, while @Road's 2006
fiscal year ended on December 31, 2006. The selected unaudited pro forma
condensed combined balance sheet as of December 29, 2006 is based on the
historical balance sheet of Trimble as of December 29, 2006 and of @Road as of
December 31, 2006 and has been prepared to reflect the merger and the
additional borrowings under the term loan and the amended credit facility as
if they had been consummated on December 29, 2006. The selected unaudited pro
forma condensed combined statements of income for the fiscal year ended
December 29, 2006 combines the results of operations of Trimble for the fiscal
year ended December 29, 2006 and of @Road for the fiscal year ended December
31, 2006 as though the merger and the additional borrowings under the amended
credit facility and new term loan had been consummated on January 1, 2006.
24
The pro forma adjustments and the purchase price allocation, as
presented, are based on estimates and certain information that is currently
available to Trimble's management. A final determination of these estimated
fair values will be based on the actual net tangible and intangible assets of
@Road that exist as of February 16, 2007.
The pro forma condensed combined financial statements are unaudited and
are not necessarily indicative of the combined results that would have
occurred if the transaction and adjustments reflected therein had been
consummated in the period or on the date presented, or on any particular date
in the future, nor do they purport to represent the financial position,
results of operations or cash flows for future periods.
The unaudited pro forma condensed combined financial statements do not
give effect to any transactions other than those described above, nor the
results of operations of Trimble or @Road subsequent to December 29, 2006 and
December 31, 2006, respectively.
The total purchase price is estimated as follows (in thousands, except
per share data):
Cash consideration $ 327,371
Common stock consideration (1) 161,947
Merger costs (2) 5,099
---------------
Total purchase price $ 494,417
===============
(1) Trimble issued approximately 5.9 million shares of Trimble common
stock based on an exchange ratio of 0.045 shares of one Trimble common stock
for each outstanding share of @Road common stock as of February 16, 2007. The
common stock issued had a fair value of $161.9 million and was valued using
the average closing price of Trimble common stock of $27.69 over a range of
trading days (February 14, 2007 through February 15, 2007) around the close
date (February 16, 2007) of the transaction which is also the date which the
amount of Trimble shares to be issued in accordance with the merger agreement
was settled.
(2) Merger costs consist of legal, advisory, accounting and
administrative fees.
25
TRIMBLE NAVIGATION LIMITED AND @ROAD INCORPORATED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of December 29, 2006
(Unaudited)
(In thousands)
Trimble @Road Pro Forma Trimble
Historical Historical Merger Pro Forma
----------- ---------- ---------- ------------
Assets:
Current assets:
Cash and cash equivalents $ 129,621 $ 39,874 $ (98,855) A,G,&L $ 70,640
Short-term investments - 53,682 - 53,682
Accounts receivable, net 172,008 15,644 (1,508) B 186,144
Other receivables 6,014 - - 6,014
Inventories, net 112,552 14,282 - 126,834
Deferred product costs - 18,324 (18,324) F -
Deferred income taxes 25,905 1,108 - 27,013
Other current assets 13,026 2,807 8,209 F & G 24,042
----------- ---------- ---------- -------------
Total current assets 459,126 145,721 (110,478) 494,369
Property and equipment, net 47,998 8,333 (2,471) C 53,860
Deferred product costs - 27,443 (27,443) F -
Goodwill 374,510 13,341 241,346 E 629,197
Intangible assets, net 67,172 23,292 123,808 D 214,272
Deferred income taxes 399 42,471 (42,109) M 761
Other assets 29,226 853 7,868 F&G 37,947
----------- ---------- ---------- ------------
Total non-current assets 519,305 115,733 300,999 936,037
Total assets $ 978,431 $ 261,454 $ 190,521 $ 1,430,406
=========== ========== ========== ============
Liabilities, Redeemable Preferred
Stock & Stockholders' Equity:
Current liabilities:
Current portion of long-term debt $ - $ - $ 7,500 A $ 7,500
26
Accounts payable 44,148 4,555 - 48,703
Accrued liabilities 80,586 11,429 3,645 H 95,660
Income taxes payable 23,814 - - 23,814
Deferred income taxes 4,525 - - 4,525
Derivative instrument & Redeemable
Preferred Stock - 10,129 (10,129) L -
Deferred revenue 28,060 21,942 (16,323) F 33,679
----------- ---------- ---------- ------------
Total current liabilities 181,133 48,055 (15,307) 213,881
Non-current portion of long-term debt 481 - 242,500 A 242,981
Deferred income taxes 21,633 - 14,746 M 36,379
Deferred revenue - 25,893 (24,147) F 1,746
Other non-current liabilities 27,519 388 - 27,907
----------- ---------- ---------- ------------
Total liabilities
230,766 74,336 217,792 522,894
----------- ---------- ---------- ------------
Redeemable Preferred stock - 5,553 (5,553) L -
Shareholders' equity:
Common stock and additional
paid-in-capital 435,371 272,888 (110,941) J 597,318
Retained earnings (Accumulated
deficit) 271,183 (91,304) 89,204 J 269,083
Accumulated other comprehensive
income 41,111 (19) 19 J 41,111
Total shareholders' equity 747,665 181,565 (21,718) 907,512
Total liabilities, redeemable
preferred stock and
shareholders'equity $ 978,431 $ 261,454 $ 190,521 $ 1,430,406
The accompanying notes are an integral part of this unaudited pro forma condensed combined balance sheet.
TRIMBLE NAVIGATION LIMITED AND @ROAD INCORPORATED
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 29, 2006
(Unaudited)
(In thousands, except per share data)
Trimble @Road Pro Forma Trimble
Historical Historical Merger Pro Forma
----------- ---------- ---------- ------------
Revenue $ 940,150 $ 99,683 $ (21,981) F $ 1,017,852
Cost of sales 479,069 54,688 (12,903) C,D,F&K 520,854
----------- ---------- ---------- ------------
Gross margin 461,081 44,995 (9,078) 496,998
----------- ---------- ---------- ------------
Operating expenses
Research and development 103,840 15,942 100 C&K 119,882
Sales and marketing 143,623 22,565 188 C&K 166,376
General and administrative 68,416 21,506 (388) C&K 89,534
In-process research and development 1,930 - - 1,930
Amortization of purchased
intangible assets 7,906 - 11,921 D 19,827
----------- ---------- ---------- ------------
Total operating expenses 325,715 60,013 11,821 397,549
----------- ---------- ---------- ------------
Operating income (loss) 135,366 (15,018) (20,899) 99,449
Non-operating income (expense), net
Interest income (expense), net 3,241 4,499 (15,690) G&I (7,950)
Change in derivative instrument
liability - (4,110) 4,110 L -
Foreign currency transaction gain, net 1,719 - - 1,719
Income (Expense) for affiliated
operations, net 6,989 - - 6,989
Other income, net 777 161 - 938
----------- ---------- ---------- ------------
Total non-operating income
(expense), net 12,726 550 (11,580) 1,696
----------- ---------- ---------- ------------
Income (loss) before taxes 148,092 (14,468) (32,479) 101,145
Income tax provision (benefit) 44,434 (2,254) (11,693) M 30,487
----------- ---------- ---------- ------------
Net income (loss) 103,658 (12,214) (20,786) 70,658
28
Redeemed preferred stock dividends - (503) 503 L -
----------- ---------- ---------- ------------
Net income (loss) attributable
to common stockholders $ 103,658 $ (12,717) $ (20,283) $ 70,657
=========== ========== ========== ============
Earnings per share :
Basic $ 0.94 $ (0.21) $ 0.61
----------- ---------- ---------- ------------
Diluted $ 0.89 $ (0.21) $ 0.57
----------- ---------- ---------- ------------
Shares used in calculating earnings
per share :
Basic 110,044 61,629 116,151
----------- ---------- ---------- ------------
Diluted 116,072 61,629 122,974
----------- ---------- ---------- ------------
The accompanying notes are an integral part of this unaudited pro forma condensed combined statement of income.
29
TRIMBLE NAVIGATION LIMITED AND @ROAD INCORPORATED
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited, dollar amounts in thousands)
1. Preliminary Purchase Price Allocation
The allocation of the total estimated purchase price may differ from the
actual purchase price allocation upon realization of any accrued costs and
final fair value determination of certain tangible assets, intangible assets
and liabilities assumed. The aggregate purchase price of approximately $494.4
million has been allocated to net tangible assets, intangible assets and
in-process research and development. For purposes of determining the number of
Trimble shares issued in the merger, Trimble used the average of the closing
prices of Trimble common stock for a range of trading days from February 14,
2007 to February 16, 2007, the date the merger was approved by @Road
shareholders.
Under the purchase method of accounting, the total estimated purchase price
will be allocated to @Road's tangible and intangible assets acquired,
liabilities assumed as well as in-process research and development based on
their estimated fair values as of February 16, 2007. The excess of the
purchase price over the net tangible and intangible assets will be recorded as
goodwill. The preliminary allocation of the purchase price used in the
unaudited pro forma condensed combined financial statements is based on
estimates and currently available information. Additional adjustments may be
required as additional information becomes available during the allocation
period.
The total purchase price has been allocated as follows (in thousands):
Value to be allocated to assets, based upon merger consideration $ 494,417
Less: value of @Road's assets acquired:
Net tangible assets acquired 90,530
Amortizable intangible assets:
Developed product technology 66,600
Customer relationships 75,300
Trademarks and tradenames 5,200
--------
Subtotal 147,100
In-process research and development 2,100
--------
Goodwill 254,687
30
Net Tangible Assets
Trimble has valued @Road's net tangible assets at their respective carrying
amounts as of December 29, 2006, except fixed assets, deferred revenue,
deferred product costs, accounts receivable and deferred tax assets and
liabilities as Trimble believes these amounts approximate their current fair
value or the fair values.
Trimble has decreased @Road's accounts receivable, net by $1.5 million in the
pro forma condensed combined balance sheet to adjust for certain
reclassifications to conform with Trimble's balance sheet presentation and
conform to Trimble's allowance for bad debt methodology.
Trimble has decreased @Road's historical value of fixed assets by $2.5 million
in the pro forma condensed combined balance sheet to adjust fixed assets to an
amount equivalent to fair market value. This resulted in a $1.2 million
decrease in depreciation expense in the unaudited pro forma condensed combined
statements of income of which $0.5 million related to cost of sales and $0.7
million related to operating expense.
Trimble reduced @Road's historical value of deferred revenue by $40.5 million
in the pro forma condensed combined balance sheet to adjust deferred revenue
to the fair value of the direct cost associated with servicing the underlying
obligation plus a reasonable margin. Trimble reduced @Road's historical value
of deferred product cost by $45.8 million in the pro forma condensed combined
balance sheet to adjust deferred product cost to the asset's underlying fair
value. The majority of the deferred product costs relate to deferral of cost
of sales of hardware that have shipped, resulting in no fair value relating to
the associated deferred product costs. These adjustments have been included in
the unaudited pro forma condensed combined statements of income through lower
revenue and cost of sales over the estimated service period of three years.
Trimble recognized $56.9 million in net deferred tax liabilities and income
tax payable for the tax effects of differences between assigned values in the
purchase price and the tax bases of assets acquired and liabilities assumed. A
significant portion of the net deferred tax liability in the purchase price
allocation is attributable to the tax effect of the difference between the
assigned value of identified intangible assets and their tax bases.
Intangible Assets
Developed product technology, which is comprised of products that have reached
technological feasibility, includes products in @Road's current product
offerings. @Road's technology includes hardware, software and services that
serve the mobile resource management market internationally. Trimble expects
to amortize the developed and core technology over an average estimated life
of 5-7 years.
31
Customer relationships represent distribution channels and end users. Trimble
expects to amortize the fair value of these assets over an average estimated
life of 5-7 years.
Trademarks and tradenames represent the value placed on the @Road brand and
recognition in the mobile resource management market. Trimble expects to
amortize the fair value of these assets over an average estimated life of 9
years.
In-process Research and Development
In-process research and development represents incomplete @Road research and
development projects that had not reached technological feasibility and had no
alternative future use as of the consummation of the merger. @Road is
currently developing new products that qualify as in-process research and
development. Due to its non-recurring nature, the in-process research and
development expense has been excluded from the unaudited pro forma condensed
combined statements of income but will be expensed in Trimble's consolidated
financial statements as a charge in the period in which the acquisition
closes.
Goodwill
Goodwill represents the excess of the purchase price of an acquired business
over the fair value of the underlying net tangible and intangible assets and
in-process research and development. Goodwill will not be amortized but
instead will be tested for impairment at least annually (more frequently if
certain indicators are present). If goodwill is impaired, Trimble will incur
an accounting charge for the amount of impairment in the fiscal quarter which
the impairment occurs.
Restructuring
The unaudited pro forma condensed combined balance sheet includes the effects
of preliminary estimates of restructuring activities of @Road operations for
approximately $3.6 million. Trimble is in the process of finalizing the total
restructuring liability related to the @Road acquisition which change this
preliminary estimate.
Liabilities related to restructuring @Road's operations that meet the
requirement of EITF 95-3, Recognition of Liabilities in Connection with a
Purchase Business Combination, will be recorded as an adjustment to the
purchase price and an increase in goodwill. Liabilities related to
restructuring Trimble's operations will be recorded as expenses in Trimble's
statement of operations in the period that the costs are incurred. Trimble
expects to be able to quantify estimated restructuring expenses upon
completion of the restructuring. Finalizing the restructuring expenses is
pending management's analysis of certain operational areas which may have no
future value to the combined company and is beneficial to the company's future
operations if discontinued.
32
There is no impact on the unaudited pro forma condensed income statement as
the costs relate to @Road operations and are recorded as an adjustment to the
purchase price and an increase in goodwill in accordance with EITF 95-3.
Trimble will incur certain restructuring costs relating to the fair value of
equity compensation for @Road employees with change in control provisions that
include acceleration of stock options upon termination. This restructuring
cost will be included in Trimble's statement of operations in the period that
the costs are incurred. As the restructuring cost relating to equity
compensation will be incurred within 12 months following the acquisition
closing date, the impact was not included in the unaudited pro forma condensed
income statement.
2. Pro Forma Adjustments
(A) Concurrently with the merger, Trimble amended its existing unsecured
revolving credit agreement executed on July 28, 2005 to increase the
credit line from $200 million to $300 million and obtained an additional
term loan of $100 million. Trimble's initial borrowing rate was
approximately 6.1% for the amended credit facility and new term loan. For
purposes of the pro forma presentation, Trimble has used this rate to
determine interest expense. For purposes of the pro forma condensed
combined financial information presented, Trimble has assumed that $250
million of the merger consideration were funded using the credit facility
and the full amount of the term loan and $77.4 million was funded using
Trimble's existing cash. In addition, we used approximately $5.1 million
for merger cost which was funded by Trimble's existing cash.
Net increase in short term debt:
Existing short term debt for Trimble and @Road $ -
Additional borrowings for merger consideration 7,500
-----------
Total Adjusted Short-Term Debt $ 7,500
===========
Historical Amount $ -
===========
-----------
Increase $ 7,500
===========
Net increase in long term debt:
Existing long term debt for Trimble and @Road $ 481
Additional borrowings for merger consideration 242,500
-----------
Total Adjusted Long-Term Debt $ 242,981
===========
Historical Amount $ 481
===========
33
-----------
Increase $ 242,500
===========
(B) Adjustment to decrease accounts receivable, net by $1.5 million for
certain reclassifications to conform with Trimble's balance sheet
presentation and conform to Trimble's allowance for bad debt methodology.
as follows:
Historical Preliminary Increase
Amount Fair Value (Decrese)
---------- ---------- ----------
Accounts receivable, net as of
December 29, 2006 $ 15,644 $ 14,136 $ (1,508)
(C) Adjustment to decrease the historical value of fixed assets by $2.5
million to adjust fixed assets to an amount equivalent to fair value as
follows:
Historical Preliminary Increase
Amount Fair Value (Decrese)
---------- ---------- ----------
Fixed Assets, net as of
December 29, 2006 $ 8,333 $ 5,862 $ (2,471)
Historical Preliminary Increase
Amount Fair Value (Decrese)
---------- ---------- ----------
Year Ended Year Ended Year Ended
December 29, December 29, December 29,
2006 2006 2006
---------- ---------- ----------
Expense Line:
Cost of revenues $ 1,399 $ 890 $ (509)
Research and development 170 108 (62)
Sales and marketing 55 35 (20)
General and administrative 1,684 1,071 (613)
---------- ---------- ----------
Total depreciation expense $ 3,308 $ 2,104 $ (1,204)
---------- ---------- ----------
This resulted in a $1.2 million decrease in depreciation expense in the
unaudited pro forma condensed combined statements of income for fiscal
year ended December 29, 2006. $0.5 million related to cost of sales and
$0.7 million related to operating expense.
(D) Adjustments to reflect the preliminary estimate of fair value of
amortizable intangible assets and
34
the resulting increase in amortization expense are as follows (in
thousands):
ProForma Historical Increase in Remaining
Historical Preliminary Annual Annual Annual Useful Life
Amount Fair Value Increase Amortization Amortization Amortization (Years)
---------- ---------- ---------- ------------ ------------ ------------- -----------
Cost of net revenues:
Developed technology $ 14,980 $ 66,600 $ 51,620 $ 10,386 $ 4,040 $ 6,346 5-7 years
Operating expenses:
Developed technology, 8,312 80,500 72,188 11,921 11,921 - 5-9 years
patents, trademarks,
customer relationships,
etc.
---------- ---------- ---------- ------------ ------------ ------------- -----------
Total $ 23,292 $ 147,100 $ 123,808 $ 22,308 $ 4,040 $ 18,267
---------- ---------- ---------- ------------ ------------ ------------- -----------
(E) Adjustments to reflect the preliminary estimate of goodwill are as
follows (in thousands):
Historical Preliminary
Amount Fair Value Increase
---------- ---------- ----------
Goodwill $ 13,341 $ 254,687 $ 241,346
(F) Adjustments to reduce the historical value of deferred revenue and
deferred product cost are as follows (in thousands). In addition, other
assets were adjusted to include future cash collections from customer
contracts assumed for products delivered.
Historical Preliminary
Amount Fair Value Adjustment
---------- ---------- ----------
Short-term deferred revenue, net $ 21,942 $ 5,619 $ (16,323)
Long-term deferred revenue, net 25,893 1,746 (24,147)
---------- ---------- ----------
Total $ 47,835 $ 7,365 $ (40,470)
---------- ---------- ----------
Historical Preliminary
35
Amount Fair Value Adjustment
---------- ---------- ----------
Short-term deferred product cost $ 18,324 $ $ (18,324)
Long-term deferred product cost 27,443 (27,443)
---------- ---------- ----------
Total $ 45,767 $ $ (45,767)
Historical Preliminary
Amount Fair Value Adjustment
---------- ---------- ----------
Short-term other assets $ - $ 8,069 $ 8,069
Long-term other assets - 7,305 7,305
---------- ---------- ----------
Total $ $ 15,374 $ 15,374
The adjustment to fair value of deferred revenue reduces pro forma
revenue by $14.2 million in the twelve months ending December 29, 2006.
The adjustment to fair value of deferred product cost reduces pro forma
cost of sales by $18.8 million in the twelve months ending December 29,
2006. In addition, pro forma revenue was reduced by $7.7 million in the
twelve months ending December 29, 2006 for revenue that is not included
in @Road's deferred revenue and will not be recorded as revenue on
Trimble's statement of operations.
(G) As a result of amendments to Trimble's existing unsecured revolving
credit agreement as discussed in Note (A), increase to debt issuance
costs are as follows (in thousands):
Historical Preliminary
Amount Fair Value Adjustment
---------- ---------- ----------
Current portion of long term
debt issuance costs, net $ $ 140 $ 140
Long Term Debt issuance costs, net $ $ 562 $ 562
The increase in debt issuance costs increases expense by $140,000 in the
twelve months ending December 29, 2006. In addition, the total debt
issuance cost of $702,000 is assumed to paid from Trimble's cash.
36
(H) As a result of preliminary estimates to the cost of certain @Road
activities, Trimble's preliminary estimates results in an increase of
approximately $3.6 million in restructuring reserve. The increase in
restructuring reserve is included in "Accrued liabilities" on the
unaudited condensed combined balance sheet as follows (in thousands):
Historical Preliminary
Amount Fair Value Adjustment
---------- ---------- ----------
Accrued Liabilities $ 11,429 $ 15,074 $ 3,645
(I) Adjustment to reflect an increase in interest expense due to the increase
in long-term debt is as follows:
Increase
(Decrease)
in Annual
Annual Interest
Borrowings Interest Rate Expense
---------- ------------- ----------
Revolving credit facilities
and term loan $ 250,000 6.1 % $ 15,550
Impact of a 1/8% increase
in interest rate $ 313
Impact of a 1/8% decrease
in interest rate $ (313)
If market rates of interest on the variable debt changed by a 1/8 of
1% variance, then the increase or decrease in interest expense on the
variable debt would be approximately $313,000 for the year ended December
29, 2006.
(J) Adjustments to stockholders' equity (dollar values in thousands) are as
follows:
37
Common stock and additional paid-in capital:
To record the preliminary estimate of fair
value of 6.1 million Trimble shares to be issued. $ 161,947
To eliminate @Road's historical common stock
and additional paid in capital (272,888)
----------------
Total $ (110,941)
Accumulated retained earnings (deficit):
To eliminate @Road's historical retained deficit $ 91304
To record preliminary estimate of the fair
value of in-process research and development (2,100)
----------------
Total $ 89,204
Other comprehensive income:
To eliminate @Road's historical other
comprehensive income $ 19
----------------
$ 19
----------------
(K) Adjustment to record the difference between the preliminary estimate of
the share-based compensation expense resulting from the assumption of all
@Road unvested stock options that have exercise prices of $7.50 or less
and the historical amount of @Road's share-based compensation expense is
as follows (in thousands):
Historical Pro Forma Increase
------------------- ------------------- --------------------
Year Ended December Year Ended December Year Ended December
29, 2006 29, 2006 29, 2006
------------------- ------------------- --------------------
Expense Line:
Cost of revenues $ 664 $ 771 $ 107
Research and development 1,003 1,165 162
Sales and marketing 1,288 1,496 208
General and administrative 1,394 1,619 225
38
------------------- ------------------- --------------------
Total amortization $ 4,349 $ 5,052 $ 703
------------------- ------------------- --------------------
(L) Adjustment to reflect the cash payment upon closing of the merger for the
redemption of @Road's outstanding redeemable preferred shares and the
derivative instrument relating to @Road's redeemable preferred shares as
follows (in thousands):
Historical Adjusted Increase
Amount Amount (Decrese)
---------- ---------- ----------
Derivative instrument and
Redeemed preferred stock $ 10,129 $ - $ (10,129)
Preferred stock 5,553 - (5,553)
The assumed payment of such obligation as of January 1, 2006 increases
net income by $4.1 million and decreases redeemable preferred stock
dividends by $503,000 in the twelve months ended December 29, 2006.
(M) Adjustment to the tax provision is based on Trimble's effective tax rate
before discreet adjustments for each respective period is as follows (in
thousands):
o
Historical Increase Adjusted
Amount (Decrese) Amount
---------- ---------- ----------
Tax Provision Year ended
December 29, 2006 $ 42,180 $ (11,693) $ 30,487
Adjustments were made to arrive at the pro forma combined U.S. provision
for income taxes that would have resulted had Trimble and @Road filed
consolidated income tax returns during the periods presented.
Adjustments to deferred income taxes are recorded to reflect the
difference between the estimated book basis and tax basis for intangible
assets is as follows (in thousands):
39
Historical Preliminary
Amount Fair Value Adjustment
---------- ---------- ----------
Long-term deferred income
taxes assets $ 42,471 $ 362 $ (42,109)
Long-term deferred income
taxes liabilities $ - $ 14,746 $ 14,746
3. Pro Forma Net Income Per Common Share
The pro forma combined basic and diluted net income (loss) from
continuing operations per common share are based on the weighted average
number of shares of Trimble common stock outstanding and are adjusted for the
additional common stock issued to @Road shareholders as part of the
acquisition and the estimated common stock dilution under the treasury method
for @Road share options assumed.
Weighted Average Shares
----------------------------
Year Ended
29-Dec-06
----------------------------
Basic, as reported by Trimble 110,044
Estimated stock issued in connection
with @Road acquisition 6,107
----------------------------
Basic, pro forma 116,151
----------------------------
Diluted, as reported by Trimble 116,072
Estimated stock issued in connection
with @Road acquisition 6,107
Estimated diluted effect of stock options
assumed in the @Road acquisition 795
----------------------------
Diluted, pro forma 122,974
----------------------------
40