Garmin 2008 Annual Report Download - page 70

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48
Selling, General and Administrative Expenses
Selling, General & Selling, General &
Admin. Expenses % of Revenues Admin. Expenses % of Revenues $ Change % Change
Outdoor/Fitness $41,119 12.1% $30,176 10.6% $10,943 36.3%
Marine 25,914 12.7% 19,307 11.6% 6,607 34.2%
Automotive/Mobile 305,065 13.0% 145,113 13.3% 159,952 110.2%
Aviation 24,400 8.3% 19,917 8.6% 4,483 22.5%
Total $396,498 12.5% $214,513 12.1% $181,985 84.8%
Fiscal year ended December 30, 2006
Year over Year
Fiscal year ended December 29, 2007
The increase in expense was primarily attributable to increases in employment generally across the
organization, significantly increased advertising costs (up 80%) associated primarily with mass-market advertising
to increase brand awareness and promote our automotive products, increased information technology staffing and
support costs, increased staffing in our sales and marketing group to increase focus on specific target markets, and
additional staffing in our customer call center.
Research and Development Expenses
Research & Research &
Development % of Revenues Development % of Revenues $ Change % Change
Outdoor/Fitness $23,302 6.9% $16,697 5.9% $6,605 39.6%
Marine 16,879 8.3% 13,121 7.9% 3,758 28.6%
Automotive/Mobile 59,390 2.5% 37,125 3.4% 22,265 60.0%
Aviation 59,835 20.3% 46,371 19.9% 13,464 29.0%
Total $159,406 5.0% $113,314 6.4% $46,092 40.7%
Fiscal year ended December 30, 2006
Year over Year
Fiscal year ended December 29, 2007
The increase in research and development expense was primarily attributable to the addition of over 400
associates to our research and development team during fiscal 2007. A key strategic initiative for future growth and
success of Garmin is continuous innovation, development and introduction of new products, which was facilitated
by these additions to research and development staff.
Other Income (Expense)
Fiscal year ended Fiscal year ended
December 29, 2007 December 30, 2006
Interest income $41,995 $35,897
Interest expense (207) (41)
Foreign currency gain 22,964 596
Gain on sale of equity securities 5,101 3,852
Other 1,069 (309)
Total $70,922 $39,995
Other income (expense) principally consists of interest income, interest expense and foreign currency
exchange gains and losses. Other income (expense) was higher in fiscal 2007 relative to fiscal 2006, with the
majority of this difference caused by increased interest income and a large foreign currency gain in 2007. Interest
income for fiscal 2007 increased due to higher interest rates and larger cash and marketable securities balances
during the year, increasing the returns on the Company’s cash and cash equivalents.
Foreign currency gains and losses for the Company in 2007 were 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 Dollar is the functional currency of Garmin France, Garmin Deutschland, Garmin
Iberia, and Garmin Italia. As these entities grow, Euro currency moves will generate material gains and losses.
Additionally, Euro-based inter-company transactions between Garmin Ltd. and its subsidiaries can also generate
currency gains and losses. The Canadian dollar is the functional currency of Dynastream Innovations, Inc.; due to
this entity’s relative size, its currency moves do not have a material impact on the Company’s financial statements.