Garmin 2009 Annual Report Download - page 76

58
ResearchandDevelopmentExpense
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Research & Research &
Development % of Revenues Development % of Revenues $ Change % Change
Outdoor/Fitness $25,419 5.9% $23,302 6.9% $2,117 9.1%
Marine 19,374 9.5% 16,879 8.3% 2,495 14.8%
Automotive/Mobile 85,610 3.4% 59,390 2.5% 26,220 44.1%
Aviation 75,706 23.4% 59,835 20.3% 15,871 26.5%
Total $206,109 5.9% $159,406 5.0% $46,703 29.3%
52-weeks ended December 27, 2008 52-weeks ended December 29, 2007
Year over Year
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Theincreaseinresearchanddevelopmentexpensedollarswasduetoongoingdevelopmentactivitiesfor
newproducts,theadditionof350newengineeringpersonneltoourstaffduringtheperiod,andanincreasein
engineeringprogramcostsin2008asaresultofourcontinuedemphasisonproductinnovation.
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OtherIncome(Expense)
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52-weeks ended 52-weeks ended
December 27, 2008 December 29, 2007
Interest Income $35,535 $41,995
Foreign Currency Exchange (35,286) 22,964
Gain on sale of equity securities 50,884 5,101
Other 1,216 862
Total $52,349 $70,922
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Otherincome(expense)principallyconsistsofinterestincomeandforeigncurrencyexchangegainsand
losses.Otherincome(expense)waslowerinfiscal2008relativetofiscal2007,withthemajorityofthisdifference
causedbyalargeforeigncurrencylossin2008.Interestincomeforfiscal2008decreasedduetolowerinterest
ratesandadeclineinourcashandmarketablesecuritiesbalancesduringtheyear.
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ForeigncurrencygainsandlossesfortheCompanyareprimarilytiedtomovementsbytheTaiwanDollar,
theEuro,andtheBritishPoundSterling.TheU.S.DollarremainsthefunctionalcurrencyofGarmin(Europe)Ltd.
TheEuroisthefunctionalcurrencyofallotherEuropeansubsidiariesexcludingGarminDanmarkandGarmin
Sweden.Astheseentitieshavegrown,Eurocurrencymovesgeneratedmaterialgainsandlosses.Additionally,
Euro‐basedinter‐companytransactionsinGarminLtd.canalsogeneratecurrencygainsandlosses.TheCanadian
dollar,DanishKrone,SwedishKronaandAustralianDollararethefunctionalcurrencyofDynastreamInnovations,
Inc.,GarminDanmark,GarminSweden,andGarminAustralasiarespectively;duetotheseentities’relativesize,
currencymovesarenotexpectedtohaveamaterialimpactontheCompany’sfinancialstatements.
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The$35.3millioncurrencylossin2008wasrelatedtothestrengtheningoftheU.S.Dollaroffsetbyagain
associatedwiththesalesandtenderofourTeleAtlasN.V.shares.During2008,theTaiwanDollarweakened1.6%
incomparisontotheU.S.Dollar,resultingina$20.8milliongain.TheEuroweakened4.1%andtheBritishPound
Sterlingweakened26.1%relativetotheU.S.Dollarin2008whichresultedina$77.3millionloss.Offsettingthis
netlosswasarealizedgainof$21.5millionduetothestrengtheningoftheEurobetweenthedateofpurchaseof
theTeleAtlasN.V.sharesinOctober2007tothedatesoftenderinFebruary,March,andJune2008.Othernet
currencylossesandthetimingoftransactionscreatedtheremaininglossof$0.3million.
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Themajorityofthe$23.0millioncurrencygaininfiscal2007wasduetotheweakeningoftheU.S.Dollar
comparedtotheEuroandtheBritishPoundSterling.Duringfiscal2007,theTaiwanDollarstrengthenedrelative
totheU.S.Dollar,resultingina$2.5millionloss.TheBritishPoundSterlingandtheEurostrengthened2%and
11.4%respectively,relativetotheU.S.Dollarduringfiscal2007,whichresultedina$25.6milliongain.Othernet
currencygainsandthetimingoftransactionscreatedtheremaininglossof$0.1million.
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