Garmin 2005 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2005 Garmin annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

18
Regulations
Garmin’s aviation products that are intended for installation in “type certificated aircraft” are required to be
certified by the FAA, its European counterpart, the European Aviation Safety Agency, and other comparable
organizations before they can be used in an aircraft. The telecommunications industry is highly regulated, and the
regulatory environment in which Garmin operates is subject to change. In accordance with Federal Communication
Commission (“FCC”) rules and regulations, wireless transceiver and cellular handset products are required to be
certified by the FCC and comparable authorities in foreign countries where they are sold. Garmin’s products sold in
Europe are required to comply with relevant directives of the European Commission. A 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 control laws and regulations of Taiwan with respect to remittances into and out of Taiwan may have an
impact on Garmin’s operations. The Taiwan Foreign Exchange Control Statute, and regulations thereunder, provide
that all foreign exchange transactions must be executed by banks designated to handle such business by the Ministry
of Finance of Taiwan and by the Central Bank of China, also referred to as the CBC. Current regulations favor
trade-related foreign exchange transactions. Consequently, foreign currency earned from exports of merchandise and
services may now be retained and used freely by exporters, while all foreign currency needed for the import of
merchandise and services may be purchased freely from the designated foreign exchange banks. Aside from trade-
related foreign exchange transactions, Taiwan companies and residents may, without foreign exchange approval,
remit outside and into Taiwan foreign currencies of up to $50 million and $5 million respectively, or their
equivalent, each calendar year. Currency conversions within the limits are processed by the designated banks and
do not have to be reviewed and approved by the CBC. The above limits apply to remittances involving a conversion
between New Taiwan Dollars and U.S. Dollars or other foreign currencies. The CBC typically approves foreign
exchange in excess of the limits if a party applies with the CBC for review and presents legitimate business reasons
justifying the currency conversion. A requirement is also imposed on all enterprises to register all medium and
long-term foreign debt with the CBC.
Environmental Matters
The European Union (“EU”) has enacted the Restriction of the Use of Certain Hazardous Substances in
Electrical and Electronic Equipment Directive ("RoHS Directive") and the Waste Electrical and Electronic
Equipment Directive (“WEEE Directive”). The RoHS Directive requires EU member states to enact laws
prohibiting the use of certain substances, including lead, mercury, cadmium and chromium, in certain electronic
products put on the market after July 1, 2006. The WEEE Directive requires EU member states to enact laws that
come into effect by August 13, 2005 regulating the collection, recovery and recycling of waste from certain
electronic products. We have established a program in order to comply with such laws and regulations as they are
enacted by the EU member states. We are modifying the design of our products and/or modifying our manufacturing
processes and/or using different components in our products in order to comply with such laws and regulations.
In addition, the State of California has enacted legislation similar to the RoHS Directive that comes into
effect on January 1, 2007 and other states and countries, including the People’s Republic of China, have proposed
legislation similar to the RoHS Directive and the WEEE Directive. The cost of compliance with such legislation
cannot yet be determined but may be substantial.
Employees
As of December 31, 2005, Garmin had 3,034 full-time employees worldwide, of whom 1,322 were in the
United States, 1,628 were in Taiwan and 84 were in the United Kingdom. None of Garmin’s employees are
represented by a labor union or covered by a collective bargaining agreement. Garmin considers its employee
relations to be good.