Garmin 2005 Annual Report Download - page 92

Download and view the complete annual report

Please find page 92 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

62
4. Commitments and Contingencies
Rental expense related to office, warehouse space and real estate amounted to $690, $608, and $324 for the
years ended December 31, 2005, December 25, 2004, and December 27, 2003, respectively.
Future minimum lease payments are as follows:
Year Amount
2006 $735
2007 308
2008 339
2009 373
2010 410
Thereafter 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. These amounted to $1,356 and $1,457 at December 31, 2005 and December 25,
2004, respectively, and are reported as restricted cash.
In the normal course of business, the Company and its subsidiaries are parties to various legal claims,
actions, and complaints, including matters involving patent infringement and other intellectual property claims and
various other risks. It is not possible to predict with certainty whether or not the Company and its subsidiaries will
ultimately be successful in any of these legal matters, or if not, what the impact might be. However, the Company’s
management does not expect that the results in any of these legal proceedings will have a material adverse effect on
the Company’s results of operations, financial position or cash flows.
5. Employee Benefit Plans
GII sponsors an employee retirement plan under which its employees may contribute up to 50% of their
annual compensation subject to Internal Revenue Code maximum limitations and to which GII contributes a
specified percentage of each participant’s annual compensation up to certain limits as defined in the Plan.
Additionally, GEL has a defined contribution plan under which its employees may contribute up to 7.5% of their
annual compensation. Both GII and GEL contribute an amount determined annually at the discretion of the Board of
Directors. During the years ended December 31, 2005, December 25, 2004 and December 27, 2003, expense related
to these plans of $6,378, $5,183, and $4,197, was charged to operations.
Certain of the Company’s foreign subsidiaries participate in local defined benefit pension plans.
Contributions are calculated by formulas that consider final pensionable salaries. Neither obligations nor
contributions for the years ended December 31, 2005, December 25, 2004, and December 27, 2003, were
significant.