Garmin 2008 Annual Report Download - page 72

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50
In addition to capital expenditures, 2008 cash flow used in investing related to the purchase of European
distributors for a total of $60.1 million, the net sale of $130.7 million of fixed income securities associated with the
investment of our on-hand cash balances and the purchase of $7.0 million of intangible assets. The net sale of fixed
income securities was primarily related to $239.3 million of cash generated from the tender of our shares of Tele
Atlas N.V. Garmin’s average return on its investments during fiscal 2008 was approximately 3.4%. In addition to
capital expenditures, 2007 cash flow used in investing related to the purchase of Digital Cyclone, Inc., Garmin
France SAS, Garmin Deutschland GmbH, Garmin Iberia S.A., Garmin Italia S.p.A., and the assets of Nautamatic
Marine Systems, Inc. for a total of $128.8 million, the net sale of $112.8 million of fixed income securities
associated with the investment of our on-hand cash balances and the purchase of $2.9 million of intangible assets.
The $112.8 million net sale of fixed income securities includes the purchase of $188.2 million of Tele Atlas N.V.
outstanding shares in connection with our announced intent to make a cash offer for all outstanding shares which
was subsequently abandoned. Garmin’s average return on its investments during fiscal 2007 was approximately
4.3%. In addition to capital expenditures, in 2006 cash flow used in investing related to the purchase of
Dynastream Innovations, Inc. for $36.5 million, the net purchase of $93.8 million of fixed income securities
associated with the investment of our on-hand cash balances and the purchase of $3.1 million of intangible assets.
Garmin’s average return on its investments during fiscal 2006 was approximately 4.7%. It is management’s goal to
invest the on-hand cash consistent with Garmin’s investment policy, which has been approved by the Board of
Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of
liquidity, and maximize yield within the constraint of low credit risk.
Net cash used by financing activities during 2008 was $808.1 million resulting from the use of $671.8
million for the stock repurchases and $150.3 million for the payment of a dividend offset by $14.0 million from the
issuance of common shares related to the exercise of employee stock options and stock appreciation rights and the
related tax benefit. The $671.8 million of share repurchases represents 17.1 million common shares. Refer to “Item
5. Market for the Company’s Common Shares, Related Shareholder Matters and Issuer Purchases of Equity
Securities” for additional discussion regarding the 2008 share repurchase programs. Cash flow related to financing
activities resulted in a net use of cash in 2007 of $136.1 million. During 2007, Garmin repurchased 57,235 of its
common shares under the 3,000,000-share stock repurchase program that was approved by the Board of Directors on
August 3, 2006 and expired on December 31, 2007. Sources and uses in financing activities during 2007 related
primarily to a use for the payment of a dividend ($162.5 million) and the purchase of stock ($7.8 million), and a
source of cash from the issuance of common shares related to the exercise of employee stock options and stock
appreciation rights the related tax benefit, and the employee stock purchase plan ($34.4 million). Cash flow related
to financing activities resulted in a net use of cash in 2006 of $132.7 million. During 2006, Garmin repurchased
1,155,300 shares of its common shares under the 3,000,000-share stock repurchase program that was approved by
the Board of Directors on August 3, 2006 and expired on December 31, 2007. Sources and uses in financing
activities during 2006 related primarily to uses for the payment of a dividend ($107.9 million) and stock repurchase
($50.5 million), and a source of cash from the issuance of common shares related to the exercise of employee stock
options and stock appreciation rights and the related tax benefit, and the employee stock purchase plan ($25.7
million).
Cash dividends paid to shareholders were $150.3 million, $162.5 million, and $107.9 million during fiscal
years 2008, 2007, and 2006, respectively.
We currently use cash flow from operations to fund our capital expenditures, to support our working capital
requirements and to repurchase shares. We expect that future cash requirements will principally be for capital
expenditures, working capital, repurchase of shares, and payment of dividends declared.
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 2009.