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Document and Entity Information
v2.2.0.7
Document and Entity Information
9 Months Ended
Sep. 25, 2010
Oct. 29, 2010
Document and Entity Information
Document Type 10-Q
Amendment Flag false
Document Period End Date 2010-09-25
Document Fiscal Period Focus Q3
Document Fiscal Year Focus 2010
Entity Registrant Name GARMIN LTD
Entity Central Index Key 0001121788
Current Fiscal Year End Date --12-25
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 193,429,075

Condensed Consolidated Balance Sheets
v2.2.0.7
Condensed Consolidated Balance Sheets (USD $)
In Thousands
Sep. 25, 2010
Dec. 26, 2009
Assets
Cash and cash equivalents $ 1,235,965 $ 1,091,581
Marketable securities 21,920 19,583
Accounts receivable, net 524,924 874,110
Inventories, net 494,354 309,938
Deferred income taxes 58,428 59,189
Prepaid expenses and other current assets 35,807 39,470
Total current assets 2,371,398 2,393,871
Property and equipment, net 427,856 441,338
Marketable securities 639,118 746,464
Restricted cash 956 2,047
Licensing agreements, net 2,059 15,400
Noncurrent deferred income tax 20,499 20,498
Other intangible assets, net 196,132 206,256
Total assets 3,658,018 3,825,874
Liabilities and Stockholders' Equity
Accounts payable 194,894 203,388
Salaries and benefits payable 37,299 45,236
Accrued warranty costs 44,023 87,424
Accrued sales program costs 57,557 119,150
Deferred revenue 61,731 27,910
Accrued advertising expense 19,505 34,146
Other accrued expenses 111,559 143,568
Income taxes payable 42,959 22,846
Total current liabilities 569,527 683,668
Deferred income taxes 11,255 10,170
Non-current income taxes 154,853 255,748
Non-current deferred revenue 70,716 38,574
Other liabilities 1,418 1,267
Stockholders' equity:
Shares, CHF 10.00 par value, 2,080,744,180 shares authorized, 207,563,000 shares issued and 193,371,000 shares outstanding at September 25, 2010; Common stock, $.005 par value, 1,000,000,000 shares authorized, 200,274,000 shares issued and outstanding at December 25, 2009 1,792,768 1,001
Additional paid-in capital 11,673 32,221
Treasury stock (4,192,000 shares at cost) (123,563)
Retained earnings 1,136,374 2,816,607
Accumulated other comprehensive income/(loss) 32,997 (13,382)
Total stockholders' equity 2,850,249 2,836,447
Total liabilities and stockholders' equity $ 3,658,018 $ 3,825,874

Condensed Consolidated Balance Sheets (Parenthetical)
v2.2.0.7
Condensed Consolidated Balance Sheets (Parenthetical)
Sep. 25, 2010
CHF
Sep. 25, 2010
Dec. 25, 2009
USD ($)
Condensed Consolidated Balance Sheets
Common stock, par value 10 $ 0.005
Common stock, shares authorized 2,080,744,180 1,000,000,000
Common stock, shares issued 207,563,000 200,274,000
Common stock, shares outstanding 193,371,000 200,274,000
Treasury stock, shares 4,192,000 0

Condensed Consolidated Statements of Income
v2.2.0.7
Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data
3 Months Ended 9 Months Ended
Sep. 25, 2010
Sep. 26, 2009
Sep. 25, 2010
Sep. 26, 2009
Condensed Consolidated Statements of Income
Net sales $ 692,364 $ 781,254 $ 1,852,196 $ 1,887,057
Cost of goods sold 348,344 371,512 885,615 929,706
Gross profit 344,020 409,742 966,581 957,351
Advertising expense 41,002 45,853 100,843 103,101
Selling, general and administrative expense 66,869 71,499 208,379 193,461
Research and development expense 69,512 55,507 205,332 166,795
Total operating expense 177,383 172,859 514,554 463,357
Operating income 166,637 236,883 452,027 493,994
Interest income 5,695 6,360 18,364 16,646
Foreign currency gains (losses) 35,527 11,752 (54,614) 4,478
Other 3,057 1,684 5,071 1,325
Total other income (expense) 44,279 19,796 (31,179) 22,449
Income before income taxes 210,916 256,679 420,848 516,443
Income tax provision (benefit) (68,636) 41,546 (30,848) 90,901
Net income $ 279,552 $ 215,133 $ 451,696 $ 425,542
Net income per share:
Basic $ 1.44 $ 1.07 $ 2.28 $ 2.12
Diluted $ 1.43 $ 1.07 $ 2.27 $ 2.12
Weighted average common shares outstanding:
Basic 194,482 200,546 197,785 200,398
Diluted 195,305 201,599 198,891 201,038
Cash dividends declared per common share $ 0.75 $ 1.50 $ 0.75

Condensed Consolidated Statements of Cash Flows
v2.2.0.7
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands
9 Months Ended
Sep. 25, 2010
Sep. 26, 2009
Operating Activities:
Net income $ 451,696 $ 425,542
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 39,755 39,945
Amortization 32,471 25,945
Loss/(Gain) on sale of property and equipment 34 (6)
Provision for doubtful accounts (3,104) 3,191
Deferred income taxes 260 (1,083)
Foreign currency transaction losses/(gains) 38,635 (26,936)
Provision for obsolete and slow moving inventories 14,406 17,309
Stock compensation expense 29,412 31,502
Realized losses/(gains) on marketable securities 1,022 110
Changes in operating assets and liabilities:
Accounts receivable 351,225 178,281
Inventories (196,270) 43,340
Other current assets 13,964 (22,827)
Accounts payable (13,051) 22,618
Other current and non-current liabilities (261,132) 87,216
Deferred revenue 65,552  
Income taxes payable 24,383 28,198
Purchase of licenses (3,043) (3,790)
Net cash provided by operating activities 586,215 848,555
Investing activities:
Purchases of property and equipment (22,983) (35,441)
Proceeds from sale of property and equipment   (7)
Purchase of intangible assets (7,891) (7,461)
Purchase of marketable securities (413,312) (626,155)
Redemption of marketable securities 534,500 110,751
Change in restricted cash 1,091 (103)
Net cash provided by/(used in) investing activities 91,405 (558,416)
Financing activities:
Proceeds from issuance of common stock from exercise of stock options 6,369 1,688
Proceeds from issuance of common stock from stock purchase plan   3,712
Stock repurchase (223,378) (1,908)
Dividends paid (299,103)  
Tax benefit related to stock option exercise 2,377 455
Net cash provided by/(used in) financing activities (513,735) 3,947
Effect of exchange rate changes on cash and cash equivalents (19,501) 21,342
Net increase in cash and cash equivalents 144,384 315,428
Cash and cash equivalents at beginning of period 1,091,581 696,335
Cash and cash equivalents at end of period $ 1,235,965 $ 1,011,763

Basis of Presentation
v2.2.0.7
Basis of Presentation
9 Months Ended
Sep. 25, 2010
Basis of Presentation
Basis of Presentation
1.
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the 13-week and 39-week periods ended September 25, 2010 are not necessarily indicative of the results that may be expected for the year ending December 25, 2010.

The condensed consolidated balance sheet at December 26, 2009 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 26, 2009.

The Company's fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year.  Therefore the financial results of certain fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13-weeks.  The quarters and year-to-date period ended September 25, 2010 and September 26, 2009 both contain operating results for 13-weeks and 39-weeks for both year-to-date periods, respectively.

Inventories
v2.2.0.7
Inventories
9 Months Ended
Sep. 25, 2010
Inventories
Inventories
2.
Inventories

The components of inventories consist of the following:

   
September 25, 2010
   
December 26, 2009
 
             
Raw Materials
  $ 128,175     $ 80,963  
Work-in-process
    43,366       32,587  
Finished goods
    352,399       235,286  
Inventory Reserves
    (29,586 )     (38,898 )
Inventory, net of reserves
  $ 494,354     $ 309,938  


Share Repurchase Plan
v2.2.0.7
Share Repurchase Plan
9 Months Ended
Sep. 25, 2010
Share Repurchase Plan
Share Repurchase Plan
3.
Share Repurchase Plan

The Board of Directors approved a share repurchase program on February 12, 2010, authorizing the Company to purchase up to $300,000 of its common shares as market and business conditions warrant on the open market or in negotiated transactions in compliance with the SEC's Rule 10b-18.   The share repurchase authorization expires on December 31, 2011.   As of September 25, 2010, the Company had repurchased 7,366,646 shares using cash of $223,149.  There remains approximately $76,851 available for repurchase under this authorization.

Earnings Per Share
v2.2.0.7
Earnings Per Share
9 Months Ended
Sep. 25, 2010
Earnings Per Share
Earnings Per Share
4.
Earnings Per Share

The following table sets forth the computation of basic and diluted net income per share:
 
   
13-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
Numerator:
           
Numerator for basic and diluted net income per share - net income
  $ 279,552     $ 215,133  
                 
Denominator:
               
Denominator for basic net income per share – weighted-average common shares
    194,482       200,546  
                 
Effect of dilutive securities – employee stock options
    823       1,053  
                 
Denominator for diluted net income per share – adjusted weighted-average common shares
    195,305       201,599  
                 
Basic net income per share
  $ 1.44     $ 1.07  
                 
Diluted net income per share
  $ 1.43     $ 1.07  
 
   
39-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
Numerator:
           
Numerator for basic and diluted net income per share - net income
  $ 451,696     $ 425,542  
                 
Denominator:
               
Denominator for basic net income per share – weighted-average common shares
    197,785       200,398  
                 
Effect of dilutive securities – employee stock options
    1,106       640  
                 
Denominator for diluted net income per share – adjusted weighted-average common shares
    198,891       201,038  
                 
Basic net income per share
  $ 2.28     $ 2.12  
                 
Diluted net income per share
  $ 2.27     $ 2.12  
 
There were 6,851,107 anti-dilutive options for the 13-week period ended September 25, 2010.   There were 7,097,790 anti-dilutive options for the 13-week period ended September 26, 2009.

There were 6,225,969 anti-dilutive options for the 39-week period ended September 25, 2010.   There were 7,853,062 anti-dilutive options for the 39-week period ended September 26, 2009.

There were 97,369 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended September 25, 2010 with 78,619 issued from treasury stock.  There were 91,501 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended September 26, 2009.

There were 462,657 shares issued as a result of exercises of stock appreciation rights and stock options for the 39-week period ended September 25, 2010 with 78,619 issued from treasury stock.  There were 116,221 shares issued as a result of exercises of stock appreciation rights and stock options for the 39-week period ended September 26, 2009.

Comprehensive Income
v2.2.0.7
Comprehensive Income
9 Months Ended
Sep. 25, 2010
Comprehensive Income
Comprehensive Income
5.
Comprehensive Income

Comprehensive income is comprised of the following:

   
13-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
Net income
  $ 279,552     $ 215,133  
Translation adjustment
    26,020       12,135  
Change in fair value of available-for-sale marketable securities, net of deferred taxes
    4,938       4,255  
Comprehensive income
  $ 310,510     $ 231,523  
 
   
39-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
Net income
  $ 451,696     $ 425,542  
Translation adjustment
    26,213       19,608  
Change in fair value of available-for-sale marketable securities, net of deferred taxes
    20,140       (587 )
Comprehensive income
  $ 498,049     $ 444,563  


Segment Information
v2.2.0.7
Segment Information
9 Months Ended
Sep. 25, 2010
Segment Information
Segment Information
6.
Segment Information

Net sales, operating income, and income before taxes for each of the Company's reportable segments are presented below:

   
Reportable Segments
 
   
Outdoor/
Fitness
   
Marine
   
Auto/
Mobile
   
Aviation
   
Total
 
13-Weeks Ended September 25, 2010
                             
                               
Net sales
  $ 143,985     $ 46,086     $ 441,891     $ 60,402     $ 692,364  
Operating income
  $ 68,158     $ 15,618     $ 66,588     $ 16,273     $ 166,637  
Income before taxes
  $ 76,395     $ 17,991     $ 97,770     $ 18,760     $ 210,916  
                                         
13-Weeks Ended September 26, 2009
                                       
                                         
Net sales
  $ 132,174     $ 45,426     $ 545,707     $ 57,947     $ 781,254  
Operating income
  $ 53,430     $ 11,783     $ 160,053     $ 11,617     $ 236,883  
Income before taxes
  $ 48,527     $ 13,206     $ 183,324     $ 11,622     $ 256,679  
                                         
39-Weeks Ended September 25, 2010
                                       
                                         
Net sales
  $ 389,037     $ 161,710     $ 1,110,040     $ 191,409     $ 1,852,196  
Operating income
  $ 169,485     $ 56,694     $ 172,117     $ 53,731     $ 452,027  
Income before taxes
  $ 163,211     $ 53,235     $ 149,932     $ 54,470     $ 420,848  
                                         
39-Weeks Ended September 26, 2009
                                       
                                         
Net sales
  $ 320,187     $ 143,641     $ 1,242,011     $ 181,218     $ 1,887,057  
Operating income
  $ 132,351     $ 43,696     $ 271,370     $ 46,577     $ 493,994  
Income before taxes
  $ 127,443     $ 44,649     $ 297,955     $ 46,396     $ 516,443  

Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis.

Net sales and property and equipment, net by geographic area are as follows as of and for the 39-week periods ended September 25, 2010 and September 26, 2009:

   
Americas
   
Asia
   
Europe
   
Total
 
September 25, 2010
                       
Net sales to external customers
  $ 1,109,376     $ 154,594     $ 588,226     $ 1,852,196  
Property and equipment, net
  $ 232,546     $ 145,129     $ 50,181     $ 427,856  
                                 
September 26, 2009
                               
Net sales to external customers
  $ 1,204,755     $ 104,846     $ 577,456     $ 1,887,057  
Property and equipment, net
  $ 232,859     $ 157,487     $ 53,826     $ 444,172  


Warranty Reserves
v2.2.0.7
Warranty Reserves
9 Months Ended
Sep. 25, 2010
Warranty Reserves
Warranty Reserves
7.
Warranty Reserves
 
The Company's products sold are generally covered by a warranty for periods ranging from one to two years.   The Company's estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet.   The following reconciliation provides an illustration of changes in the aggregate warranty reserve.

 
13-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
             
Balance - beginning of the period
  $ 41,445     $ 79,968  
Change in accrual for products sold in prior periods
    -       -  
Accrual for products sold during the period
    23,183       49,981  
Expenditures
    (20,605 )     (46,868 )
Balance - end of the period
  $ 44,023     $ 83,081  
 
   
39-Weeks Ended
 
   
Sept 25,
2010
   
Sept 26,
2009
 
                 
Balance - beginning of the period
  $ 87,424     $ 87,408  
Change in accrual for products sold in prior periods
    (42,776 )      -  
Accrual for products sold during the period
    53,801       104,671  
Expenditures
    (54,426 )     (108,998 )
Balance - end of the period
  $ 44,023     $ 83,081  
 
The 39-weeks ended September 25, 2010 include the effect of a refinement in the estimated warranty reserve which decreased the accrual for the period by $42,776.


Commitments
v2.2.0.7
Commitments
9 Months Ended
Sep. 25, 2010
Commitments
Commitments
8.
Commitments

We are a party to certain commitments, which includes raw materials, advertising and other indirect purchases in connection with conducting our business.  Pursuant to these agreements, the Company is contractually committed to make purchases of approximately $42,021 over the next 5 years.

Income Taxes
v2.2.0.7
Income Taxes
9 Months Ended
Sep. 25, 2010
Income Taxes
Income Taxes
9.
Income Taxes

Our earnings before taxes decreased 18% when compared to the same quarter in 2009, and our income tax expense decreased by $110,182, to ($68,636) for the 13-week period ended September 25, 2010, from $41,546 for the 13-week period ended September 26, 2009.  The significant decline was due to the impact of one-time items booked in the current quarter.  The one-time adjustment of ($114,605) includes the release of uncertain tax position reserves from 2006 to 2008 offset by a settlement for the 2007 tax year in the US and Taiwan surtax expense due to the release of reserves.  Without one-time items, we would have reported an effective tax rate of 22% and 20% for the 13-weeks and the 39-weeks weeks ended September 25, 2010, respectively, compared to 16% and 18% for the 13-weeks and 39-weeks ended September 26, 2009, respectively.  The increase in the adjusted effective tax rate as compared to the same period in 2009 is largely due to an unfavorable mix of income among taxing jurisdictions.

Fair Value Measurements
v2.2.0.7
Fair Value Measurements
9 Months Ended
Sep. 25, 2010
Fair Value Measurements
Fair Value Measurements
10.
Fair Value Measurements
 
The Accounting Standards Codification (ASC) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).  The ASC classifies the inputs used to measure fair value into the following hierarchy:
 
Level 1
Unadjusted quoted prices in active markets for identical assets or liability
   
Level 2
Unadjusted quoted prices in active markets for similar assets or liabilities
   
Level 3
Unobservable inputs for the asset or liability
 
The Company endeavors to utilize the best available information in measuring fair value.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
 
For fair value measurements using significant unobservable inputs, an independent third party provided the valuation.  The collateral composition was used to estimate weighted average life based on historical and projected payment information.  Cash flows were projected for the issuing trusts, taking into account underlying loan principal, bonds outstanding, and payout formulas.  Taking this information into account, assumptions were made as to the yields likely to be required, based upon then current market conditions for comparable or similar term asset based securities as well as other fixed income securities.
 
Assets and liabilities measured at estimated fair value on a recurring basis are summarized below:
 
Fair Value Measurmennts as of September 25, 2010
 
Total
   
Level 1
   
Level 2
   
Level 3
 
$ 613,988     $ 613,988    
-
      -  
  47,050       -        -       47,050  
$ 661,038     $ 613,988     $ -     $ 47,050  
 
Fair Value Measurements as of December 26, 2009
 
Total
   
Level 1
   
Level 2
   
Level 3
 
$ 695,795     $ 695,795       -       -  
  70,252       -       -       70,252  
$ 766,047     $ 695,795     $ -     $ 70,252  
 
All Level 3 investments have been in a continuous unrealized loss position for 12 months or longer.  However, it is the Company's intent to hold these securities until they recover their value.  For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, the ASC requires a reconciliation of the beginning and ending balances, separately for each major category of assets.  The reconciliation is as follows:
 
   
Fair Value
Measurements
Using Significant
Unobservable
Inputs (Level 3)
   
Fair Value
Measurements
Using Significant
Unobservable
Inputs (Level 3)
 
   
13 weeks Ended
September 25,
   
39 weeks Ended
September 25,
 
   
2010
   
2010
 
Beginning balance of auction rate securities
  $ 64,546     $ 70,252  
Sales in and/or out of Level 3
  $ (21,650 )   $ (32,200 )
Total unrealized gains/(losses) included in other comprehensive income
  $ 4,154     $ 8,998  
Transfers in and/or out of Level 3
  $ -     $ -  
Ending balance of auction rate securities
  $ 47,050     $ 47,050  
 
The following is a summary of the company's marketable securities classified as available-for-sale securities at September 25, 2010:
 
   
Amortized Cost
   
Gross Unrealized
Gains
   
Gross Unrealized
Losses
   
Other Than
Temporary
Impairment
   
Estimated Fair Value
(Net Carrying
Amount)
 
Mortgage-backed securities
  $ 411,812     $ 11,304     $ (261 )   $ -     $ 422,855  
Auction Rate Securities
    59,499       -       (12,449 )     -       47,050  
Obligations of states and political subdivisions
    98,939       1,611       (116 )     -       100,434  
U.S. corporate bonds
    50,581       1,944       (138 )     (1,274 )     51,113  
Other
    38,559       1,027       -       -       39,586  
Total
  $ 659,390     $ 15,886     $ (12,964 )   $ (1,274 )   $ 661,038  
 
The following is a summary of the company's marketable securities classified as available-for-sale securities at December 26, 2009:
 
   
Amortized Cost
   
Gross Unrealized
Gains
   
Gross Unrealized
Losses
   
Other Than
Temporary
Impairment
   
Estimated Fair Value
(Net Carrying
Amount)
 
Mortgage-backed securities
  $ 515,200     $ 2,682     $ (4,674 )   $ -     $ 513,208  
Auction Rate Securities
    91,700       -       (21,448 )      -       70,252  
Obligations of states and political subdivisions
    112,419       908       (181 )      -       113,146  
U.S. corporate bonds
    35,883       768       (701 )     (1,274 )     34,676  
Other
    33,903       1,070       (208 )     -       34,765  
Total
  $ 789,105     $ 5,428     $ (27,212 )   $ (1,274 )   $ 766,047  
 
The cost of securities sold is based on the specific identification method.
 
The amortized cost and estimated fair value of marketable securities at September 25, 2010, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
 
   
Cost
   
Estimated
Fair Value
 
             
Due in one year or less
  $ 21,804     $ 21,920  
Due after one year through five years
    157,757       161,759  
Due after five years through ten years
    151,573       153,852  
Due after ten years
    296,913       291,295  
Other (No contractual maturity dates)
    31,343       32,212  
    $ 659,390     $ 661,038  
 

Recently Issued Accounting Pronouncements
v2.2.0.7
Recently Issued Accounting Pronouncements
9 Months Ended
Sep. 25, 2010
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
11.
Recently Issued Accounting Pronouncements
 
In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, "Improving Disclosures about Fair Value Measurements" ("ASU 2010-06"), which is included in the ASC Topic 820 (Fair Value Measurements and Disclosures). ASU 2010-06 requires new disclosures on the amount and reason for transfers in and out of Level 1 and 2 fair value measurements.  ASU 2010-06 also requires disclosure of activities, including purchases, sales, issuances, and settlements within the Level 3 fair value measurements and clarifies existing disclosure requirements on levels of disaggregation and disclosures about inputs and valuation techniques.  Except for otherwise provided, ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of this standard did not have a material effect on the Company's financial statements.

In February 2010, the FASB issued ASU No. 2010-09, "Amendments to Certain Recognition and Disclosure Requirements" ("ASU 2010-09"), which is included in ASC Topic 855 (Subsequent Events).  ASU 2010-09 clarifies that an SEC filer is required to evaluate subsequent events through the date that the financial statements are issued.  ASU 2010-09 was effective upon the issuance of the final update and did not have a significant impact on the Company's financial statements.


Redomestication
v2.2.0.7
Redomestication
9 Months Ended
Sep. 25, 2010
Redomestication
Redomestication
12.
Redomestication

The redomestication effectively changed the place of incorporation of the ultimate parent holding company of Garmin from the Cayman Islands to Switzerland.

The redomestication involved several steps. On February 9, 2010, Garmin Ltd. (Cayman) formed Garmin Ltd. (Switzerland) as a direct subsidiary. On April 6, 2010, Garmin Ltd. (Cayman) petitioned the Cayman Court to order, among other things, the calling of a meeting of Garmin Ltd. (Cayman) common shareholders to approve a scheme of arrangement. On April 7, 2010, the Cayman Court ordered us to seek shareholder approval of the scheme of arrangement. On May 20, 2010 we obtained the necessary shareholder approval.  On June 4, 2010, a hearing was held by the Cayman Court and at which hearing the Cayman Court was asked to and did approve the scheme of arrangement.  The scheme of arrangement became effective at 3:00 a.m., Cayman Islands time, on Sunday, June 27, 2010 (the "Transaction Time").

At and shortly following the Transaction Time, the following steps occurred:
 
 
1.
all issued and outstanding Garmin Ltd. (Cayman) common shares were transferred to Garmin Ltd. (Switzerland); and
 
 
2.
in consideration, Garmin Ltd. (Switzerland) (a) issued registered shares (on a one-for-one basis) to the holders of the Garmin Ltd. (Cayman) common shares that were transferred to Garmin Ltd. (Switzerland), and (b) increased the par value of the 10,000,000 shares of Garmin Ltd. (Switzerland) issued to Garmin Ltd. (Cayman) in connection with the formation of Garmin Ltd. (Switzerland) (the "Formation Shares") to the same par value as the shares of Garmin Ltd. (Switzerland) issued to the Garmin Ltd. (Cayman) shareholders. The Formation Shares were subsequently transferred by Garmin Ltd. (Cayman) to its subsidiary, Garmin Luxembourg S.à r.l. for future use to satisfy our obligations to deliver shares in connection with awards granted under our equity incentive plans for employees and other general corporate purposes.

As a result of the redomestication, the shareholders of Garmin Ltd. (Cayman) became shareholders of Garmin Ltd. (Switzerland), and Garmin Ltd. (Cayman) became a subsidiary of Garmin Ltd. (Switzerland). In addition, Garmin Ltd. (Switzerland) assumed, on a one-for-one basis, Garmin Ltd. (Cayman)'s existing obligations in connection with awards granted under Garmin Ltd. (Cayman)'s equity incentive plans and other similar equity awards. Any stock options, stock appreciation rights, restricted stock units or performance shares issued by Garmin Ltd. (Cayman) that are convertible, exchangeable or exercisable into common shares of Garmin Ltd. (Cayman) became convertible, exchangeable or exercisable, as the case may be, into registered shares of Garmin Ltd. (Switzerland).

Subsequently on July 26, 2010, Garmin Ltd. (Cayman) relocated its registered office to Switzerland and changed its name to Garmin Switzerland GmbH.  The reported capitalization of the Company also changed to that of Garmin Ltd. (Switzerland).  Accordingly, common stock was increased by $1,791,780 to $1,792,768, and retained earnings was reduced by the same amount.  

The general terms of Garmin Ltd. (Switzerland)'s capitalization (rights of shareholders, limitations on dividends, etc.) may be found in the proxy statement and Form 8-A/A registration statement filed with the SEC on April 9, 2010 and June 28, 2010, respectively.


Acquisition
v2.2.0.7
Acquisition
9 Months Ended
Sep. 25, 2010
Acquisition
Acquisition
13.
Acquisition

In the third quarter of 2010, Garmin Ltd. acquired MetriGear, Inc., the creator of a pedal-based power solution for cycling.  The acquisition is not considered to be material; therefore supplemental pro forma information is not presented.


Subsequent Event
v2.2.0.7
Subsequent Event
9 Months Ended
Sep. 25, 2010
Subsequent Event
Subsequent Event
14.
Subsequent Event

On October 22, 2010, Garmin Ltd. announced it had acquired Belanor AS, the distributor of Garmin's consumer products in Norway.  Belanor AS has been renamed Garmin Norge AS.  The acquisition is not considered to be material; therefore supplemental pro forma information will not be presented.