Garmin 2005 Annual Report Download - page 75

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45
options and the employee stock purchase plan ($6.1 million). Cash flow used in financing activities during 2003
related primarily to the payment of a dividend ($54.0 million), and reduction of our debt ($20.0 million). The
Company retired approximately $20.0 million of long-term debt during fiscal 2003, which represented the remainder
of an outstanding issue of industrial revenue bonds. The employee stock option exercises and employee stock
purchase plan purchases generated a $4.3 million source of cash in 2003.
We currently use cash flow from operations to fund our capital expenditures and to support our working
capital requirements. We expect that future cash requirements will principally be for capital expenditures and
working capital requirements.
Cash dividends paid to shareholders were $54.0 million, $54.1 million, and $54.0 million during fiscal
years 2005, 2004, and 2003, respectively.
We believe that our existing cash balances and cash flow from operations will be sufficient to meet our
projected capital expenditures, working capital and other cash requirements at least through the end of fiscal 2008.
Contractual Obligations and Commercial Commitments
Future payments due from the Company, as of December 31, 2005, aggregated by type of contractual
obligation, are:
Payments due by period
Less than More than
Contractual Obligations Total 1 year 1-3 years 3-5 years 5 years
Operating Leases $5,111 $474 $996 $821 $2,820
Purchase Obligations $158,874 $158,874 $0 $0 $0
Total $163,985 $159,348 $996 $821 $2,820
Operating leases describes a lease obligation associated with the Garmin Europe facility in the United
Kingdom and a lease obligation associated with Garmin AT. Purchase obligations are the aggregate of those
purchase orders that were outstanding on December 31, 2005; these obligations are created and then paid off within
3 months during the normal course of our manufacturing business.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Item 7A. Quantitative and Qualitative 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, during cyclical industry downturns, we have been able to offset pricing declines for our
products through a combination of improved product mix and success in obtaining price reductions in raw materials
costs.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of
operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully