Garmin 2002 Annual Report Download - page 56

Note 9. Interest Rate Risk Management (continued)
At December 28, 2002, the Company expects to reclassify $748 of loss on the interest rate swaps from accumulated other
comprehensive loss to earnings during the next 12 months related to the payment of variable interest on floating rate debt,
assuming market interest rates remain consistent with rates at that date.
Note 10. Fair Value of Financial Instruments
In accordance with SFAS No. 107, Disclosures about Fair Value of Financial Instruments, the following summarizes required
information about the fair value of certain financial instruments for which it is currently practicable to estimate such value. None
of the financial instruments are held or issued for trading purposes. The carrying amounts and fair values of the Company’s
financial instruments are as follows:
December 28, 2002 December 29, 2001
Carrying Amount Fair Value Carrying Amount Fair Value
Cash and cash equivalents $216,768 $216,768 $192,842 $192,842
Restricted cash
1,598 1,598 1,600 1,600
Marketable securities
245,708 245,708 131,584 131,584
Interest rate swap agreements (liability)
1,046 1,046 1,479 1,479
Long-term debt:
Term loan - - 2,843 2,843
Series 1995 Bonds - - 9,345 9,345
Series 2000 Bonds
20,000 20,000 20,000 20,000
The carrying value of cash and cash equivalents, restricted cash, marketable securities, and interest rate swap agreements
approximates their fair value. The fair values of the Company’s floating-rate long-term debt have been estimated to be the par
value of the debt due to the variable interest rate nature of the instruments. The fair values of long-term debt as reported are
not necessarily the amounts the Company would currently have to pay to extinguish any of this debt.
Note 11. Segment Information
The Company operates within its targeted markets through two reportable segments, those being related to products sold into
the consumer and aviation markets. Both of the Company’s reportable segments offer products through the Company’s network
of independent dealers and distributors. However, the nature of products and types of customers for the two segments vary
significantly. As such, the segments are managed separately. The Company’s consumer segment includes portable global
positioning system (GPS) receivers and accessories for marine, recreation, land, and automotive use sold primarily to retail
outlets. The Company’s aviation products are portable and panel mount avionics for Visual Flight Rules and Instrument Flight
Rules navigation and are sold primarily to aviation dealers and certain aircraft manufacturers.
The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (CODM). The CODM evaluates
performance and allocates resources based on income before income taxes of each segment. Income before income taxes
represents net sales less operating expenses including certain allocated general and administrative costs, interest income and
expense, foreign currency adjustments, and other non-operating corporate expenses. The accounting policies of the reportable
segments are the same as those described in the summary of significant accounting policies. There are no inter-segment sales or
transfers.
The identifiable assets associated with each reportable segment reviewed by CODM include accounts receivable and inventories.
The Company does not report property and equipment, depreciation and amortization, or capital expenditures by segment to
the CODM.
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