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2005 ANNUAL REPORT
INNOVATION AND DEDICATION

Table of contents

  • Page 1
    2 0 0 5 A N N U A L R E P O R T I N N O V A T I O N A N D D E D I C A T I O N

  • Page 2
    ... but blue sky Life in the fast lane Loving the great outdoors Promoting a world-class brand Resources to meet Garmin's plan for growth Growth initiatives for 2006 Adventures in GPS Financial summary Annual Report on Form 10-K Board of directors 2 3 6 7 9 14 17 19 21 25 29 30 inside back cover

  • Page 3
    ... of $311.2M, up 51% Introduced navigation devices with industry-leading user interface Garmin became Tier-One supplier for Honda Gold Wing motorcycles Received first certification for GFC 700 autopilot product Acquired MotionBased Technologies, developer of Web-based applications for GPS devices 2

  • Page 4
    ... traffic features, handset navigation offerings, weather services on automotive products, certified autopilots for airplanes, radar for boats and improved cartography. I want to take this opportunity to thank our customers, dealers, suppliers, employees and investors for your continued support...

  • Page 5
    4

  • Page 6
    S T R E E T P I L O T c 3 3 0 5

  • Page 7
    ... customers. Garmin designs, manufactures and markets navigation, communication and information devices, many of which are enabled by GPS (Global Positioning System) technology. GPS uses satellites to locate a user's position, display it on an electronic map and provide guidance to other locations...

  • Page 8
    ... color GPS terrain mapping, Jeppesen® database and obstacle alerting with Palm® PDA applications. The 3600a features a unique yoke-mounted cradle and dedicated aviation function keys. The existing GNS™ 430 and 530 panel mount systems are also evolving with the addition of capabilities such as XM...

  • Page 9
    G P S M A P 3 9 6 8

  • Page 10
    ..., our top-selling automotive navigator for 2005, offers preloaded maps with 3-D map graphics and a simple touch screen interface at a moderate price point. The c340 adds traffic alert options and text-to-speech technology, which enables the unit to announce streets by name. Featuring easy, ATM-like...

  • Page 11
    ...more. Users can further enhance their experience with add-on capabilities such as language translation, detailed travel guide data and retailer discount programs, which are available with a separate SD card purchase. The nüvi 350 also has options for traffic and offers text-to-speech for navigation...

  • Page 12
    ... our easy-going navigation systems when they rent a car for business or vacation travel. Dollar Thrifty Automotive Group is currently offering our StreetPilot c330 as an option for their rental customers at an affordable daily rate. The units include a database of Dollar and Thrifty rental locations...

  • Page 13
    12

  • Page 14
    13

  • Page 15
    ...-way radios. Rino's patented location reporting feature allows users to send and receive location data and even poll another user's location, which can be important in emergency situations. New additions to the Rino lineup for 2005 were the 520 and 530, which offer color displays, automatic routing...

  • Page 16
    ... and fishing enthusiasts, and now they can have this information and more from a portable plotter. The GPSMAP 376C offers XM WX Satellite Weather data such as NEXRAD radar, wave direction and height, surface temps and more overlaid on the unit's sunlightreadable color display. Weather information is...

  • Page 17
    G P S M A P 3 0 1 0 C 16

  • Page 18
    ... football broadcasts as well as radio traffic reports across the country. We continue to market our products through a variety of online promotions and print advertising. With our growing emphasis on the general consumer market, particularly for automotive products, we are increasing our advertising...

  • Page 19
    ... displays and oversized product boxes to draw attention and reinforce brand awareness. Garmin has gained exposure to new customer groups as more and more companies and organizations offer Garmin products as promotional items. For example, in the fall of 2005, Segway® announced the "Find Your Way...

  • Page 20
    ...Taiwan's manufacturing resources consisted of 14 SMT (surface mount technology) lines and 10 assembly lines. Garmin will add additional SMT and assembly lines at the new facility to meet the anticipated increased demands for our consumer products. At our North America headquarters in Olathe, Kansas...

  • Page 21
    20

  • Page 22
    ... of applications. Other Garmin product announcements at CES ranged from automotive to mobile electronics to outdoor and fitness devices. The GVNâ„¢ 52 is a customer-configurable, "black-box" GPS system designed for integration F O R E R U N N E R 3 0 5 & 2 0 5 with mobile audio/video entertainment...

  • Page 23
    ... interest in these large display (7-inch diagonal) units, which we are currently marketing to the recreational vehicle (RV) market and others. In addition to their premium navigation functions, the units offer traffic and weather services, audible book player, MP3 player, XM radio and video options...

  • Page 24
    ... GPS designer and manufacturer to announce direct support for Mac OS X. The response to this announcement at the January MacWorld Expo was very positive. It will allow current Mac users to have the benefit of our navigation devices while inviting future Apple customers to experience our products...

  • Page 25
    ... opportunity while still serving our traditional market segments. Our recently announced decision to align our engineering, marketing and production teams within our four new business segments of aviation, marine, outdoor/fitness and automotive/mobile will allow Garmin to better serve each of these...

  • Page 26
    ..., guiding residents who had to evacuate and later assisting crews' restoration efforts. Emergency responders - many using GPS systems donated by Garmin - were dispatched to areas where street signs, businesses and normal landmarks were missing, plus, many roads were blocked or unusable. We received...

  • Page 27
    ...helicopter as it followed the water line across New Orleans and to mark sites for repair. I bought my 60C for work and play, a vacation, a hiking trip, and logging tracks of my video shoots around the country. But this time, it helped to restore a telephone network in a desperate situation. J.P. 26

  • Page 28
    ... when it is time to head in or to wait out a storm; whether to go north to get behind a passing thunderstorm or go south. I truly do not know how I ever got along without this technology. Capt. Bob "Marines depend on Garmin GPS units in Iraq" Here is my team photo on our last day of operations in...

  • Page 29
    ... the distance with the 301" I purchased a Forerunner 301 two weeks ago to assist me in my training for triathlon and distance running. Two of my friends who had different versions of Garmin GPS products first introduced me to your products. I am thankful that I bought the Forerunner 301 because it...

  • Page 30
    29

  • Page 31
    ... 2005, the last business day of the Company's most recently completed second fiscal quarter, based on the closing price of the Company's common shares on the Nasdaq Stock Market for that date: Common Shares, $.01 par value - $ 2,745,495,660 Number of shares outstanding of the Company's common shares...

  • Page 32
    ...document are incorporated herein by reference into Part III of the Form 10-K as indicated: Document Company's Definitive Proxy Statement for the 2006 Annual Meeting of Shareholders which will be filed no later than 120 days after December 31, 2005 Part of Form 10-K into which Incorporated Part III

  • Page 33
    ...29 Executive Officers and Significant Employees of the Company ...29 Part II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Market for the Company's Common Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities ...31 Selected Financial Data...32 Management...

  • Page 34
    ...Form 10-K. Company Overview Garmin is a leading, worldwide provider of navigation, communications and information devices, most of which are enabled by GPS technology. Garmin designs, develops, manufactures and markets a diverse family of hand-held, portable and fixed-mount GPS-enabled products and...

  • Page 35
    ...® line of portable automotive navigators in 2005. The c-Series™ (c310, c320, c330, and c340) features Garmin's easy-to-use touch-screen interface combined with turn-by-turn voice directions. The c340 adds text-to-speech (voice directions that speak street names) and utilizes realtime traffic...

  • Page 36
    ...designed for cyclists. New models with 5 watts of transmit power were also introduced to expand Garmin's Rino® line of two-way radio/integrated GPS products. In the marine segment, Garmin introduced the GPSMAP® 376C - a portable GPS navigator capable of displaying graphical XM WX Satellite Weather...

  • Page 37
    ... of panel mount and portable products for use in general aviation aircraft. Consumer Garmin currently offers a wide range of consumer products, including automotive navigation devices, handheld GPS receivers, two-way radios with integrated GPS receivers, GPS-enabled portable digital assistants, GPS...

  • Page 38
    ... speak street names and also to utilize real-time traffic information in select major metro areas through Garmin's separate GTM 10 receiver. Features of the 2610 and 2650 models include "turn by turn" automatic route guidance and voice prompting, high resolution color display, remote control, touch...

  • Page 39
    ... a powerful and precise GPS sensor designed specifically for OEM applications. Pocket-sized, portable, GPS unit with high-end navigation features, including 256-color, bright, sunlight-readable display, automatic routing with turn-by-turn directions and voice guidance, and 115 MB of internal memory...

  • Page 40
    ... is designed to support the connection of multiple sensors and the GPSMAP 3000 and 3200 series MFDs to the Garmin Marine Network. The GMS 10 allows users to gain the benefit of ethernet-like data transfer speeds. GMR 20 & 40 GSD 20, 21, and 22 GMS 10 Marine fixed-mount GPS/Chartplotter products...

  • Page 41
    ... compatibility for street-level mapping. The Rino 130 has 24 MB of internal memory, built-in electronic compass, barometric sensor, and NOAA weather radio receiver. The Rino 520 has 5 watts of transmit power, color display, mini-USB interface, and a turn-by turn automatic route calculation for...

  • Page 42
    ... databases, "Terrain" mode, detailed Sectional chart-style overview, and a patent-pending aviation cradle mount. Also features a suite of personal information management (PIM) applications, voice recorder, MP3 player and Secure Digital card slot for memory expansion. Optional MapSource CD downloads...

  • Page 43
    ... which can be displayed on one of several panel-mounted devices, such as the GNS 430, GNS 530, MX20, and G1000 systems. The GDL 69 and GDL 69A receive real-time weather information broadcast by the XM WX Satellite radio system. In addition, the GDL 69A expands the utility of the system by providing...

  • Page 44
    ..., 2005. Garmin intends to selectively grow its dealer network geographically and by product lines. Marketing support is provided geographically from Garmin's offices in Olathe, Kansas (North, South and Central America), Romsey, U.K. (Europe, Middle East and Africa) and Shijr, Taiwan (Asia, Australia...

  • Page 45
    ...Systems for panel-mount GPS and display units. For Garmin's Family Radio Service and General Mobile Radio Service product line, Garmin believes that its principal competitors are Motorola, Inc. ("Motorola"), Cobra and Audiovox Corporation. For Garmin's personal digital assistant product line, Garmin...

  • Page 46
    ... manufacturing capability at its Shijr, Taiwan facility, its Olathe, Kansas facility, and its Salem, Oregon facility. Garmin believes that its vertically integrated approach has provided it the following benefits: Reduced time-to-market. Utilizing concurrent engineering techniques, Garmin's products...

  • Page 47
    ... quarter, due to increased demand during the spring and summer marine season, and in the fourth quarter, due to increased demand during the holiday buying season. Sales of consumer products are also influenced by the timing of the release of new products. Our aviation products do not experience much...

  • Page 48
    ...delay in receiving required certifications for new products or enhancements to Garmin's products or losing certification for Garmin's existing products could adversely affect our business. Because Garmin Corporation, one of the Company's principal subsidiaries, is located in Taiwan, foreign exchange...

  • Page 49
    ... and operated by the United States Department of Defense. The Department of Defense does not currently charge users for access to the satellite signals. These satellites and their ground support systems are complex electronic systems subject to electronic and mechanical failures and possible...

  • Page 50
    ... reduced sales of our general aviation products and delays in the shipment of our products manufactured in our Taiwan manufacturing facility to our distribution facility in Olathe, Kansas, thereby adversely affecting our ability to supply new and existing products to our dealers and distributors...

  • Page 51
    ... and electroluminescent panels, liquid crystal displays, memory chips and microprocessors. The cost, quality and availability of components are essential to the successful production and sale of our products. Some components we use are from sole source suppliers. Certain application-specific...

  • Page 52
    ... of revenue for our consumer product segment. Our sales and gross margins for our products may fluctuate from period to period due to a number of factors, including product mix, competition and unit volumes. In particular, the average selling prices of a specific product tend to decrease over that...

  • Page 53
    ..., promotion and sale of their products. Increased competition could result in price reductions, fewer customer orders, reduced margins and loss of market share. Our failure to compete successfully against current or future competitors could seriously harm our business, financial condition and...

  • Page 54
    ... our business, financial condition and results of operations and the market price and the liquidity of our shares. Our principal manufacturing facilities where we manufacture all of our products, except our panel-mounted aviation products, are located in Taiwan. Taiwan has a unique international...

  • Page 55
    ... liabilities in the Cayman Islands and Taiwan. We are a Cayman Islands company and a substantial portion of our assets are located outside the United States, particularly in Taiwan. As a result, it may be difficult to effect service of process within the United States upon us. In addition, there...

  • Page 56
    ... related to our business or the industry in which we compete; quarterly fluctuations in our actual or anticipated operating results; the availability, pricing and timeliness of delivery of components, such as flash memory and liquid crystal displays, used in our products general conditions...

  • Page 57
    ... former members of our Board of Directors and our executive officers, together with members of their families and entities that may be deemed affiliates of or related to such persons or entities, beneficially own approximately 44% of our outstanding common shares. Accordingly, these shareholders may...

  • Page 58
    ... on 42 acres in Olathe, Kansas, where the majority of product design and development work is conducted, the majority of aviation panel-mount products are manufactured and products are warehoused, distributed, and supported for North, Central and South America. Garmin's subsidiary, Garmin Realty, LLC...

  • Page 59
    ... condition and results of operations. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of shareholders of Garmin during the fourth fiscal quarter of 2005. Executive Officers and Significant Employees of the Company Pursuant to General Instruction...

  • Page 60
    ...BS degree in Business Management and a MBA from the University of Nebraska - Lincoln and holds the professional certification of CPIM (Certified in Production and Inventory Management). All executive officers are elected by and serve at the discretion of the Company's Board of Directors. None of the...

  • Page 61
    ... was paid on December 15, 2005. The Board of Directors approved a share repurchase program on April 21, 2004, authorizing the Company to purchase up to 3,000,000 shares of the Company as market and business conditions warrant. The share repurchase authorization expires on April 30, 2006. Through...

  • Page 62
    ...years ended December 31, 2005, December 25, 2004, and December 27, 2003 were derived from the Company's audited consolidated financial statements and the related notes thereto which are included in Item 8 of this annual report on Form 10-K. The selected consolidated balance sheet data as of December...

  • Page 63
    ...25, Dec. 27, Dec. 28, 2004 2003 2002 (in thousands, except per share data) Dec. 31, 2005 Consolidated Statements of Income Data: Net sales Cost of goods sold Gross profit Operating expenses: Selling, general and administrative Research and development Total operating expenses Operating income Other...

  • Page 64
    ... portable GPS receivers and accessories for marine, recreation, land and automotive applications sold primarily to retail outlets. Our aviation products are portable and panel-mount avionics for Visual Flight Rules and Instrument Flight Rules navigation and are sold primarily to retail outlets...

  • Page 65
    ... of sales basis and reviewed periodically. If market conditions were to decline, the Company may take actions to increase customer incentive offerings possibly resulting in an incremental reduction of revenue at the time the incentive is offered. Warranties The Company's products sold are generally...

  • Page 66
    ... Statements. Accounting Terms and Characteristics Net Sales Our net sales are primarily generated through sales to our global dealer and distributor network and to original equipment manufacturers. We recognize sales when products are shipped. Our sales are largely of a consumer nature; therefore...

  • Page 67
    ... highest volume products. Our manufacturing labor costs historically have been lower in Taiwan than in Olathe and Salem. Sales price variability has had and can be expected to have an effect on our gross profit. In the past, prices of some of our devices sold into the consumer market have declined...

  • Page 68
    ...of customer accounts receivable days due to changes in product mix and longer payment terms, and anticipate maintaining approximately the current level of accounts receivable days going forward. Income Taxes We have experienced a relatively low effective tax rate in Taiwan due to lower marginal tax...

  • Page 69
    ...capabilities and applications of GPS, particularly as those capabilities pertain to automobile navigation. The increase in aviation sales for fiscal 2005 was primarily due to increased sales from panel mount products sold into the OEM (original equipment manufacturers) and retrofit markets. Sales of...

  • Page 70
    ...increased information technology staffing and support costs, increased staffing in our sales and marketing group to increase focus on specific target markets, and additional staffing in our customer call center. Management expects that in spite of strong demand for our products, selling, general and...

  • Page 71
    ...rates and larger cash and marketable securities balances during the year, increasing the returns on the Company's cash and cash equivalents. During fiscal 2005, the Company experienced foreign currency exchange gains of $15.3 million, as the U.S. Dollar strengthened versus the New Taiwan Dollar ($32...

  • Page 72
    ...general, and overall increased consumer awareness of the capabilities and applications of GPS. The increase in aviation sales for fiscal 2004 was primarily due to increased sales from panel mount products sold into the OEM (original equipment manufacturers) and retrofit markets and sales from Garmin...

  • Page 73
    ... of over 400 non-engineering employees), significantly increased advertising costs (up 33%) associated primarily with consumer products, ORACLE software implementation costs, and additional staffing in our customer call center. In the past, selling, general and administrative expenses increased...

  • Page 74
    ...related to the purchase of fixed income securities associated with the investment of our on-hand cash balances and approximately $1.8 million of intangible assets. It is management's goal to invest the on-hand cash consistent with the Company's investment policy, which has been approved by the Board...

  • Page 75
    ... Disclosures About Market Risk Market Sensitivity We have market risk primarily in connection with the pricing of our products and services and the purchase of raw materials. Product pricing and raw materials costs are both significantly influenced by semiconductor market conditions. Historically...

  • Page 76
    offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations. Foreign Currency Exchange Rate Risk The operation of the Company's subsidiaries in international markets results in exposure to ...

  • Page 77
    ... Data CONSOLIDATED FINANCIAL STATEMENTS Garmin Ltd. and Subsidiaries Years Ended December 31, 2005, December 25, 2004, and December 27, 2003 Contents Report of Ernst & Young, LLP, Independent Registered Public Accounting Firm...48 Consolidated Balance Sheets at December 31, 2005 and December 25...

  • Page 78
    Report of Ernst & Young, LLP Independent Registered Public Accounting Firm The Board of Directors and Shareholders Garmin Ltd. We have audited the accompanying consolidated balance sheets of Garmin Ltd. and Subsidiaries (the Company) as of December 31, 2005 and December 25, 2004, and the related ...

  • Page 79
    ... Land and improvements Building and improvements Office furniture and equipment Manufacturing equipment Engineering equipment Vehicles Accumulated depreciation 31,075 106,470 33,863 37,747 28,859 8,494 246,508 67,335 179,173 Restricted cash (Note 4) Marketable securities (Note 3) License agreements...

  • Page 80
    ... Per Share Information) Fiscal Year Ended December 31, 2005 Net sales Cost of goods sold Gross profit Selling, general and...Income before income taxes Income tax provision (benefit): Current Deferred Net income Basic net income per share (Note 10) Diluted net income per share (Note 10) 52,548 8,833 61...

  • Page 81
    ...Per Share Information) Balance at December 28, 2002 Net income Translation adjustment Adjustment related to effective portion of cash flow hedges less reclassification adjustment, net of income tax effects of $408 Adjustment related to unrealized gains (losses) on available-for-sale securities, net...

  • Page 82
    ... Investing activities: Purchases of property and equipment Proceeds from sale of property and equipment Purchase of marketable securities Sales of marketable securities Purchase of MotionBased Technologies / UPS Aviation Technologies, Inc. Change in restricted cash Other Net cash used in investing...

  • Page 83
    ... activities Change in liability recognized in accrued expenses related to cash flow hedges and charged to accumulated other comprehensive loss Change in marketable securities related to unrealized appreciation (depreciation) Fair value of assets acquired (MotionBased Technologies/ UPS Aviation...

  • Page 84
    ... outstanding shares of GARMIN. Garmin Ltd. completed an initial public offering of its common stock in December 2000. History of Business Garmin Ltd. and subsidiaries (together, the "Company") manufacture, market, and distribute Global Positioning System-enabled products and other related products...

  • Page 85
    ... number of shares which could have been purchased from the proceeds of the exercise at the average market price of the Company's stock during the period the options were outstanding. See Note 12. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash...

  • Page 86
    ...useful lives: Buildings and improvements Office furniture and equipment Manufacturing and engineering equipment Vehicles 39 years 5 years 5 years 5 years Long-Lived Assets In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews long-lived...

  • Page 87
    .... Marketable Securities Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company's marketable securities are considered available-for-sale at December 31, 2005. See...

  • Page 88
    ... as either relating to seasonal sales variations or to the timing of new product releases by the Company and the impact those releases may have on the cash flow requirements of our customers. Revenue Recognition The Company recognizes revenue from product sales when the product is shipped to the...

  • Page 89
    .... Customer service and technical support costs include costs associated with performing order processing, answering customer inquiries by telephone and through Web sites, e-mail and other electronic means, and providing free technical support assistance to customers. In connection with the sale of...

  • Page 90
    ... No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based...

  • Page 91
    ... political subdivisions U.S. corporate bonds Other Total Amortized Cost $278,932 33,425 45,718 23,450 $381,525 Gross Unrealized Gains/Losses ($4,611) (456) (731) 996 ($4,802) The following is a summary of the Company's marketable securities classified as available-for-sale securities at December...

  • Page 92
    ... 410 2,255 At December 31, 2005, the Company expects future costs of approximately $10,000 for the purchase of an additional manufacturing facility in Chung-Li, Taiwan. Certain cash balances of GEL are held as collateral by a bank securing payment of the United Kingdom value-added tax requirements...

  • Page 93
    ... per weighted-average common share outstanding for the years ended December 31, 2005, December 25, 2004, and December 27, 2003, respectively. The Company currently expects to benefit from the incentives and credits being offered by Taiwan through 2010, at which time these tax benefits expire. As of...

  • Page 94
    ... by the Company's subsidiary in Taiwan. 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...

  • Page 95
    ... assets for each of the Company's reportable segments are presented below: Fiscal Year Ended December 31, 2005 Consumer Aviation Total Net sales to external customers Allocated interest income Allocated interest expense Income before income taxes Assets: Accounts receivable Inventories $798,615 15...

  • Page 96
    North America December 31, 2005 Net sales to external customers Long-lived assets Net assets December 25, 2004 Net sales to external customers Long-lived assets Net assets December 27, 2003 Net sales to external customers Long-lived assets Net assets Asia Europe Total $661,085 135,875 377,684 $...

  • Page 97
    ... 2003, options to purchase 5,500, 6,621, and 3,648 shares were granted under this plan. A summary of the Company's stock-based compensation activity and related information under the 2005 Equity Incentive Plan, the 2000 Equity Incentive Plan and the 2000 Non-employee Directors' Option Plan for the...

  • Page 98
    ... 85% of the fair market value on the enrollment date. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. During 2005, 2004, and 2003, 56,399, 58,950, and 70,857 shares were purchased under the plan for a total purchase price of $2,824...

  • Page 99
    ... the outstanding capital stock of UPS Aviation Technologies, Inc. for $38 million in cash. UPS Aviation Technologies, headquartered in Salem, Oregon, designs and manufactures multiple lines of communications, navigation and surveillance products for general aviation and air transport customers. 69

  • Page 100
    ... The Company's products sold are generally covered by a warranty for periods ranging from one to two years. The Company's estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet...

  • Page 101
    ... covered by this report. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. (b) Management's Report on Internal Control over Financial Reporting Management of the Company is responsible for...

  • Page 102
    ... respects, effective internal control over financial reporting as of December 31, 2005, 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 Garmin Ltd. and Subsidiaries...

  • Page 103
    ...Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting Item 9B. Other Information Not applicable...

  • Page 104
    ... for Directors, Officers and Employees of Garmin Ltd. and Subsidiaries (the "Code"). The Code is applicable to all Garmin employees including the Chief Executive Officer, the Chief Financial Officer, the Controller and other officers. A copy of the Code was filed as Exhibit 14.1 of the Annual Report...

  • Page 105
    ...-Employee Directors' Option Plan and the Garmin Ltd. Employee Stock Purchase Plan. The Company has no knowledge of any arrangement, the operation of which may at a subsequent date result in a change in control of the Company. Item 13. Certain Relationships and Related Transactions The information...

  • Page 106
    ... for Employees of Garmin International, Inc. (incorporated by reference to Exhibit 10.1of the Registrant's Current Report on Form 8-K filed on September 7, 2004). Form of Stock Option Agreement pursuant to the Garmin Ltd. 2000 Equity Incentive Plan for Employees of Garmin Corporation (incorporated...

  • Page 107
    ...'s Current Report on Form 8-K filed on June 7, 2005). Code of Business Conduct and Ethics for Directors, Officers and Employees of Garmin Ltd. and Subsidiaries (incorporated by reference to Exhibit 14.1 of the Registrant's Annual Report on Form 10-K filed on March 10, 2004). List of subsidiaries...

  • Page 108
    ...-Oxley Act of 2002. Chief Financial Officer's Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) Exhibits. The exhibits listed on the accompanying Exhibit Index in Item 15(a)(3) are filed as part of, or are incorporated by reference into, this Annual Report on Form 10...

  • Page 109
    GARMIN LTD. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENT SCHEDULE Garmin Ltd. Financial Statement Schedule for the years ended December 31, 2005, December 25, 2004, and December 27, 2003 Schedule II - Valuation and qualifying accounts...80 79

  • Page 110
    ... II - VALUATION AND QUALIFYING ACCOUNTS Garmin Ltd. and Subsidiaries (In thousands)...2005: Deducted from asset accounts Allowance for doubtful accounts Inventory reserve Total Balance at Beginning of Period Additions Charged to Charged to Costs and Other Expenses Accounts Deductions Balance...

  • Page 111
    ... Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GARMIN LTD. By /s/ Min H. Kao Min H. Kao Chief Executive Officer Dated: March 7, 2006 POWER OF ATTORNEY Know all persons by...

  • Page 112
    .... 2005 Form 10-K Annual Report Exhibit Index The following exhibits are attached hereto. See Part IV of this Annual Report on Form 10-K for a complete list of exhibits. Exhibit Number 21.1 23.1 31.1 31.2 32.1 32.2 Document List of subsidiaries Consent of Ernst & Young LLP Chief Executive Officer...

  • Page 113
    EXHIBIT 21.1 GARMIN LTD. List of Subsidiaries of Company Name of Subsidiary Garmin Corporation Garmin International, Inc. Garmin USA, Inc. Garmin Realty, LLC Garmin AT, Inc. Garmin (Europe) Ltd. Garmin N.V. Garmin B.V. Jurisdiction of Incorporation Taiwan Kansas Kansas Kansas Oregon England ...

  • Page 114
    ... to the Garmin Ltd. Employee Stock Purchase Plan, Garmin Ltd. 2000 Equity Incentive Plan, Garmin Ltd. Non-Employee Director's Option Plan, and Registration Statement (Form S-8 No. 333-52766) pertaining to the Garmin International, Inc. Savings and Profit Sharing Plan; of our reports dated March...

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    ...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 7, 2006 By __/s/ Min H. Kao_____ Min H. Kao Chairman and Chief Executive Officer

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    ... 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 7, 2006 By /s/ Kevin Rauckman Kevin Rauckman Chief Financial Officer

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    ... 1350, Chapter 63 of Title 18, United States Code), I, Min H. Kao, Chairman and Chief Executive Officer of Garmin Ltd. (the "Company") hereby certify that: (1) The Annual Report on Form 10-K for the year ended December 31, 2005 (the "Form 10-K") of the Company fully complies with the requirements of...

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    ... 1350, Chapter 63 of Title 18, United States Code), I, Kevin Rauckman, Chief Financial Officer of Garmin Ltd. (the "Company") hereby certify that: (1) The Annual Report on Form 10-K for the year ended December 31 2005 (the "Form 10-K") of the Company fully complies with the requirements of Section...

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    ..., Cayman Islands Garmin International, Inc. 1200 East 151st Street Olathe, Kansas 66062, U.S.A. Garmin AT, Inc. 2345 Turner Road SE Salem, OR 97302, U.S.A. Garmin Corporation No. 68, Jangshu 2nd Rd. Shijr, Taipei County, Taiwan Garmin (Europe) Ltd. Unit 5, The Quadrangle Abbey Park Industrial Estate...

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    ©2006 Garmin Ltd. Garmin Ltd. P.O. Box 30464 SMB 5th Floor, Harbour Place 103 South Church Street Grand Cayman, Cayman Islands (345) 946-5203 www.garmin.com M00-60169-00