Garmin 2008 Annual Report Download - page 85

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December 27, 2008, December 29, 2007, and December 30, 2006, respectively. In the next five years, the
amortization expense is estimated to be $22,859, $22,285, $20,408, $10,465, and $3,965, respectively.
Marketable Securities
Management determines the appropriate classification of marketable securities at the time of purchase and
reevaluates such designation as of each balance sheet date.
All of the Company’s marketable securities are considered available-for-sale at December 27, 2008. See
Note 3. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported
in other comprehensive gain/(loss). At December 27, 2008 and December 29, 2007, cumulative unrealized
gains/(losses) of ($22,345) and $46,445, respectively, were reported accumulated in other comprehensive
gain/(loss), net of related taxes.
The amortized cost of debt securities classified as available-for-sale is adjusted for amortization of
premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated
life of the security. Such amortization is included in interest income from investments. Realized gains and losses,
and declines in value judged to be other-than-temporary are included in other income. The cost of securities sold is
based on the specific identification method.
Income Taxes
The Company accounts for income taxes using the liability method in accordance with SFAS No. 109,
Accounting for Income Taxes. The liability method provides that deferred tax assets and liabilities are recorded
based on the difference between the tax bases of assets and liabilities and their carrying amount for financial
reporting purposes as measured by the enacted tax rates and laws that will be in effect when the differences are
expected to reverse. Income taxes of $153,170 and $149,071 at December 27, 2008 and December 29, 2007,
respectively, have not been accrued by the Company for the unremitted earnings of several of its subsidiaries
because such earnings are intended to be reinvested in the subsidiaries indefinitely.
The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxes (FIN 48), on December 31, 2006, the beginning of fiscal year 2007. As a result of the
implementation of FIN 48, the Company has not recognized a material increase or decrease in the liability for
unrecognized tax benefits. The total amount of unrecognized tax benefits as of December 27, 2008 was $214.4
million including interest of $11.1 million. A reconciliation of the beginning and ending amount of unrecognized
tax benefits for years ending December 27, 2008 and December 29, 2007 is as follows (in $millions):
December 27, December 29,
2008 2007
Balance at beginning of year $126.6 $70.5
Additions based on tax positions related to prior years 14.2 10.0
Reductions based on tax positions related to prior years (4.6) (8.0)
Additions based on tax positions related to current period 83.8 73.0
Reductions based on tax positions related to current period - -
Reductions related to settelements with tax authorities - (7.6)
Expiration of statute of limitations (5.6) (11.3)
Balance at December 27, 2008 $214.4 $126.6
The December 27, 2008 balance of $214.4 million of unrecognized tax benefits, if recognized, would
reduce the effective tax rate. None of the unrecognized tax benefits are due to uncertainty in the timing of
deductibility.
FIN 48 requires unrecognized tax benefits to be classified as non-current liabilities, except for the portion
that is expected to be paid within one year of the balance sheet date. Prior to FIN 48 adoption, unrecognized tax