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60
GARMIN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Share and Per Share Information)
December 27, 2008 and December 29, 2007
1. Description of the Business
Garmin Ltd. and subsidiaries (together, the “Company”) manufacture, market, and distribute Global
Positioning System-enabled products and other related products. Garmin Corporation (GC), wholly-owned by
Garmin Ltd., is primarily responsible for the manufacturing and distribution of the Company’s products to Garmin
International, Inc. (GII), a wholly-owned subsidiary of GC, and Garmin (Europe) Limited (GEL), a wholly-owned
subsidiary of Garmin Ltd., and, to a lesser extent, new product development and sales and marketing of the
Company’s products in Asia and the Far East. GII is primarily responsible for sales and marketing of the
Company’s products in many international markets and in the United States as well as research and new product
development. GII also manufactures certain products for the Company’s aviation segment. GEL is responsible for
sales and marketing of the Company’s products, principally within the European market. In addition, the Company
acquired ten European distributors in 2007 and 2008 which distribute Garmin product throughout Europe.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The accompanying consolidated financial statements reflect the
accounts of Garmin Ltd. and its wholly owned subsidiaries. All significant inter-company balances and transactions
have been eliminated.
Fiscal Year
The Company has adopted a 52–53-week period ending on the last Saturday of the calendar year. Due to
the fact that there are not exactly 52 weeks in a calendar year and there is slightly more than one additional day per
year (not including the effects of leap year) in each calendar year as compared to a 52-week fiscal year, the
Company will have a fiscal year comprising 53 weeks in certain fiscal years, as determined by when the last
Saturday of the calendar year occurs.
In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs,
and related financial activity. Therefore, the financial results of those fiscal years, and the associated 14-week fourth
quarter, will not be entirely comparable to the prior and subsequent 52-week fiscal years and the associated quarters
having only 13 weeks. Fiscal 2008, 2007 and 2006 included 52 weeks.
Foreign Currency Translation
GC utilizes the Taiwan Dollar as its functional currency. In accordance with Statement of Financial
Accounting Standards (SFAS) No. 52, Foreign Currency Translation, the financial statements of GC for all periods
presented have been translated into United States Dollars (USD), the functional currency of Garmin Ltd. and GII,
and the reporting currency herein, for purposes of consolidation at rates prevailing during the year for sales, costs,
and expenses and at end-of-year rates for all assets and liabilities. The effect of this translation is recorded in a
separate component of stockholders’ equity. Cumulative translation adjustments of ($15,306) and ($315) as of
December 27, 2008 and December 29, 2007, respectively, net of related taxes, have been included in accumulated
other comprehensive gain/(loss) in the accompanying consolidated balance sheets.
Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date.
Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance
sheet date. All differences are recorded in results of operations and amounted to exchange gains/(losses) of