Garmin 2008 Annual Report Download - page 83

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61
($35,286), $22,964, and $596 for the years ended December 27, 2008, December 29, 2007, and December 30, 2006,
respectively. The loss in fiscal 2008 was the result of the strengthening of the USD offset by a gain associated with
the sale and tender of our Tele Atlas N.V. shares. The gain in fiscal 2007 was the result of the strengthening of the
Euro and British Pound Sterling relative to the United States dollar experienced by our European companies. The
gain in fiscal 2006 was the result of nearly off-setting currency moves in the Taiwan Dollar and the Euro and British
Pound Sterling.
Earnings Per Share
Basic earnings per share amounts are computed based on the weighted-average number of common shares
outstanding. For purposes of diluted earnings per share, the number of shares that would be issued from the exercise
of dilutive stock options has been reduced by the number of shares which could have been purchased from the
proceeds of the exercise at the average market price of the Company’s stock during the period the options were
outstanding. See Note 10.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, operating accounts,
money market funds, and securities with maturities of three months or less when purchased. The carrying amount of
cash and cash equivalents approximates fair value, given the short maturity of those instruments.
Trade Accounts Receivable
We sell our products to retailers, wholesalers, and other customers and extend credit based on our
evaluation of the customer’s financial condition. Potential losses on receivables are dependent on each individual
customer’s financial condition. We carry our trade accounts receivable at net realizable value. Typically, our
accounts receivable are collected within 60 days and do not bear interest. We monitor our exposure to losses on
receivables and maintain allowances for potential losses or adjustments. We determine these allowances by (1)
evaluating the aging of our receivables; and (2) reviewing our high-risk customers. Past due receivable balances are
written off when our internal collection efforts have been unsuccessful in collecting the amount due.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined using the weighted-average method
(which approximates the first-in, first-out (FIFO) method) by GC and the FIFO method by GII, GAT and GEL.
Inventories consisted of the following:
December 27, December 29, December 30,
2008 2007 2006
Raw materials $151,132 $130,056 $85,040
Work-in-process 28,759 57,622 42,450
Finished goods 268,625 348,975 163,286
Inventory reserves (23,204) (31,186) (19,768)
$425,312 $505,467 $271,008
Property and Equipment
Property and equipment are recorded at cost and depreciated using the straight-line method over the
following estimated useful lives: