Document and Entity Information

Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 27, 2010	May. 01, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-27
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,010
Entity Registrant Name	Garmin Ltd.
Entity Central Index Key	0001121788
Current Fiscal Year End Date	--12-26
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		199,171,926

Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets (USD $) In Thousands	Mar. 27, 2010	Dec. 26, 2009
Assets
Cash and cash equivalents	$ 1,291,343	$ 1,091,581
Marketable securities	19,635	19,583
Accounts receivable, net	418,520	874,110
Inventories, net	356,073	309,938
Deferred income taxes	60,361	59,189
Prepaid expenses and other current assets	63,427	39,470
Total current assets	2,209,359	2,393,871
Property and equipment, net	432,606	441,338
Marketable securities	681,049	746,464
Restricted cash	941	2,047
Licensing agreements, net	6,573	15,400
Noncurrent deferred income tax	20,499	20,498
Other intangible assets, net	200,501	206,256
Total assets	3,551,528	3,825,874
Liabilities and Stockholders' Equity
Accounts payable	109,904	203,388
Salaries and benefits payable	34,017	45,236
Accrued warranty costs	58,814	87,424
Accrued sales program costs	41,201	119,150
Deferred revenue	35,835	27,910
Accrued advertising expense	10,135	34,146
Other accrued expenses	63,877	143,568
Income taxes payable	25,816	22,846
Dividend payable	299,957	0
Total current liabilities	679,556	683,668
Deferred income taxes	10,558	10,170
Non-current income taxes	259,751	255,748
Non-current deferred revenue	45,470	38,574
Other liabilities	1,258	1,267
Stockholders' equity:
Common stock, $0.005 par value, 1,000,000,000 shares authorized: Issued and outstanding shares -199,128,000 as of March 27, 2010 and 200,274,000 as of December 26, 2009	994	1,001
Additional paid-in capital	0	32,221
Retained earnings	2,552,920	2,816,607
Accumulated other comprehensive gain/ (loss)	1,021	(13,382)
Total stockholders' equity	2,554,935	2,836,447
Total liabilities and stockholders' equity	$ 3,551,528	$ 3,825,874

Condensed Consolidated Balance Sheets [Parenthetical]

Condensed Consolidated Balance Sheets [Parenthetical] (USD $)	Mar. 27, 2010	Dec. 26, 2009
Common Stock, Par Value	$ 0.005	$ 0.005
Common Stock, Shares Authorized	1,000,000,000	1,000,000,000
Common Stock, Shares, Issued	199,128,000	200,274,000
Common Stock, Shares, Outstanding	199,128,000	200,274,000

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data	3 Months Ended
	Mar. 27, 2010	Mar. 28, 2009
Net sales	$ 431,067	$ 436,699
Cost of goods sold	200,158	240,704
Gross profit	230,909	195,995
Advertising expense	17,400	23,225
Selling, general and administrative expense	67,678	59,777
Research and development expense	62,483	55,034
Total operating expense	147,561	138,036
Operating income	83,348	57,959
Interest income	6,879	5,097
Foreign currency	(46,537)	(2,438)
Other	1,833	(694)
Total other income (expense)	(37,825)	1,965
Income before income taxes	45,523	59,924
Income tax provision	8,194	11,386
Net income	$ 37,329	$ 48,538
Net income per share:
Basic	$ 0.19	$ 0.24
Diluted	$ 0.19	$ 0.24
Weighted average common shares outstanding:
Basic	199,926	200,352
Diluted	201,091	200,725

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	3 Months Ended
	Mar. 27, 2010	Mar. 28, 2009
Operating Activities:
Net income	$ 37,329	$ 48,538
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	13,543	13,574
Amortization	8,334	8,088
Gain on sale of property and equipment	(6)	(3)
Provision for doubtful accounts	(1,260)	(1,101)
Deferred income taxes	(1,546)	(3,200)
Foreign currency transaction gains/losses	47,773	(420)
Provision for obsolete and slow-moving inventories	3,140	7,709
Stock compensation expense	9,700	10,587
Realized losses/(gains) on marketable securities	(805)	1,274
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	436,446	318,095
Inventories	(50,168)	58,876
Other current assets	(606)	(1,128)
Accounts payable	(94,717)	(77,595)
Other current and non-current liabilities	(216,868)	(88,727)
Deferred revenue	14,286
Income taxes payable	(4,048)	3,993
Purchase of licenses	(396)	856
Net cash provided by operating activities	200,131	299,416
Investing activities:
Purchases of property and equipment	(3,935)	(13,136)
Purchase of intangible assets	(5,029)	(872)
Purchase of marketable securities	(74,303)	(68,662)
Redemption of marketable securities	146,073	16,638
Change in restricted cash	1,106	43
Net cash provided by/(used in) investing activities	63,912	(65,989)
Financing activities:
Proceeds from issuance of common stock from stock purchase plan	2,725	119
Stock repurchase	(47,206)	(1,849)
Tax benefit related to stock option exercise	1,408	26
Net cash used in financing activities	(43,073)	(1,704)
Effect of exchange rate changes on cash and cash equivalents	(21,208)	(5,729)
Net increase/(decrease) in cash and cash equivalents	199,762	225,994
Cash and cash equivalents at beginning of period	1,091,581	696,335
Cash and cash equivalents at end of period	$ 1,291,343	$ 922,329

Basis of Presentation

3 Months Ended

Mar. 27, 2010

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 period ended March 27, 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 ended March 27, 2010 and March 28, 2009 both contain operating results for 13-weeks for both year-to-date periods.

Inventories

3 Months Ended

Mar. 27, 2010

Inventories

2.	Inventories

The components of inventories consist of the following:

	March 27, 2010			December 26, 2009

Raw Materials	$	89,124		$	80,963
Work-in-process		38,671			32,587
Finished goods		265,582			235,286
Inventory Reserves		(37,304	)		(38,898	)
Inventory, net of reserves	$	356,073		$	309,938

Share Repurchase Plan

3 Months Ended

Mar. 27, 2010

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, 2010. In the quarter ended March 27, 2010, the Company repurchased 1,437,801 shares using cash of $47,092. There remains approximately $252,908 available for repurchase under this authorization.

Earnings Per Share

3 Months Ended

Mar. 27, 2010

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
	March 27,		March 28,
	2010		2009
Numerator:
Numerator for basic and diluted net income per share - net income	$	37,329	$	48,538

Denominator:
Denominator for basic net income per share � weighted-average common shares		199,926		200,352

Effect of dilutive securities � employee stock options		1,165		373

Denominator for diluted net income per share � adjusted weighted-average common shares		201,091		200,725

Basic net income per share	$	0.19	$	0.24

Diluted net income per share	$	0.19	$	0.24

There were 1,165,620 anti-dilutive options for the 13-week period ended March 27, 2010. There were 9,488,615 anti-dilutive options for the 13-week period ended March 28, 2009.

There were 291,714 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended March 27, 2010. There were 12,098 shares issued as a result of exercises of stock appreciation rights and stock options for the 13-week period ended March 28, 2009.

Comprehensive Income

3 Months Ended

Mar. 27, 2010

Comprehensive Income

5.	Comprehensive Income

Comprehensive income is comprised of the following:

	13-Weeks Ended
	March 27,		March 28,
	2010		2009
Net income	$	37,329	$	48,538
Translation adjustment		8,039		(18,763	)
Change in fair value of available-for-sale marketable securities, net of deferred taxes		6,364		(6,042	)
Comprehensive income	$	51,732	$	23,733

Segment Information

3 Months Ended

Mar. 27, 2010

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/				Auto/
	Fitness		Marine		Mobile			Aviation		Total
13-Weeks Ended March 27, 2010

Net sales	$	102,736	$	41,314	$	220,924		$	66,093	$	431,067
Operating income	$	38,569	$	8,929	$	16,982		$	18,868	$	83,348
Income before taxes	$	31,166	$	6,628	$	(10,256	)	$	17,985	$	45,523

13-Weeks Ended March 28, 2009

Net sales	$	80,004	$	38,017	$	259,586		$	59,092	$	436,699
Operating income	$	28,504	$	10,572	$	4,605		$	14,278	$	57,959
Income before taxes	$	27,660	$	9,723	$	9,158		$	13,383	$	59,924

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 long-lived assets (property and equipment) by geographic area are as follows as of and for the 13-week periods ended March 27, 2010 and March 28, 2009:

	North
	America		Asia		Europe		Total
March 27, 2010
Net sales to external customers	$	243,407	$	42,683	$	144,977	$	431,067
Long lived assets	$	230,072	$	150,682	$	51,852	$	432,606

March 28, 2009
Net sales to external customers	$	264,777	$	28,140	$	143,782	$	436,699
Long lived assets	$	226,384	$	160,087	$	54,140	$	440,611

Warranty Reserves

3 Months Ended

Mar. 27, 2010

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
	March 27,			March 28,
	2010			2009

Balance - beginning of the period	$	87,424		$	87,408
Change in accrual for products sold in prior periods		(21,776	)		-
Accrual for products sold during the period		14,914			23,993
Expenditures		(21,748	)		(42,554	)
Balance - end of the period	$	58,814		$	68,847

The 13-weeks ended March 27, 2010 include the effect of a change in estimate in the warranty reserves which decreased the accrual for the period by $21,776.

Commitments

3 Months Ended

Mar. 27, 2010

Commitments

8.	Commitments

Pursuant to certain supply agreements, the Company is contractually committed to make purchases of approximately $68,415 over the next 5 years.

Income Taxes

3 Months Ended

Mar. 27, 2010

Income Taxes

9. Income Taxes

Our earnings before taxes decreased 24% when compared to the same quarter in 2009, and our income tax expense decreased by $3,192, to $8,194 for the 13-week period ended March 27, 2010, from $11,386 for the 13-week period ended March 28, 2009. The effective tax rate was 18.0% in the first quarter of 2010 and 19.0% in the first quarter of 2009. The slight decrease is due to the mix of income by tax jurisdiction.

Fair Value Measurements

3 Months Ended

Mar. 27, 2010

Fair Value Measurements

10. Fair Value Measurements

The Accounting Standards Code (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 Measurements as of March 27, 2010
Description	Total		Level 1		Level 2		Level 3

Available for-sale securities	$	630,126	$	630,126	$	-	$	-
Failed Auction rate securities	$	70,558					$	70,558

Total	$	700,684	$	630,126	$	-	$	70,558

	Fair Value Measurements as of December 26, 2009
Description	Total		Level 1		Level 2		Level 3

Available for-sale securities	$	695,795	$	695,795	$	-	$	-
Failed Auction rate securities	$	70,252					$	70,252

Total	$	766,047	$	695,795	$	-	$	70,252

All Level 3 investments have been in a continuous unrealized loss position for 12 months or longer. 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)
	13-Weeks Ended
	March 27, 2010

Beginning balance of auction rate securities	$	70,252
Total unrealized gains included in other comprehensive income		856
Purchases in and/or out of Level 3		(550	)
Transfers in and/or out of Level 3		-
Ending balance of auction rate securities	$	70,558

The following is a summary of the company's marketable securities classified as available-for-sale securities at March 27, 2010:

			Gross		Gross			Other Than			Estimated Fair
			Unrealized		Unrealized			Temporary			Value (Net
	Amortized Cost		Gains		Losses			Impairment			Carrying Amount)
Mortgage-backed securities	$	454,639	$	4,072	$	(1,602	) $		-		$	457,109
Auction Rate Securities		91,150		-		(20,592	)		-		$	70,558
Obligations of states and political subdivisions		110,785		1,144		(43	)		-		$	111,886
U.S. corporate bonds		36,623		948		(349	)		(1,274	)	$	35,948
Other		24,053		1,282		(152	)		-		$	25,183
Total	$	717,250	$	7,446	$	(22,738	)	$	(1,274	)	$	700,684

The following is a summary of the company's marketable securities classified as available-for-sale securities at December 26, 2009:

			Gross		Gross			Other Than			Estimated Fair
			Unrealized		Unrealized			Temporary			Value (Net
	Amortized Cost		Gains		Losses			Impairment			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 March 27, 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.

			Estimated
	Cost		Fair Value

Due in one year or less (2010)	$	19,526	$	19,635
Due after one year through five years (2011-2015)		228,883		229,448
Due after five years through ten years (2016-2020)		200,174		200,513
Due after ten years (2021 and thereafter)		252,885		234,031
Other (No contractual maturity dates)		15,782		17,057
	$	717,250	$	700,684

Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 27, 2010

Recently Issued Accounting Pronouncements

11. Recently Issued Accounting Pronouncements

In January 2010, the FASB issued 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. 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 our 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 the FASB Accounting Standards Codification (the "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 is effective upon the issuance of the final update and did not have a significant impact on the Company's financial statements.

Subsequent Events

3 Months Ended

Mar. 27, 2010

Subsequent Events

12. Subsequent Events

On April 28, 2010, Garmin announced a cash offer of 15 pence per share to acquire all the shares of Raymarine plc. This offer provides total consideration to Raymarine shareholders of approximately �12.5 million and implies an enterprise value of approximately �107.4 million when considering Raymarine's most recently reported net debt of �94.9 million. This offer remains subject to shareholder acceptance and regulatory approvals, but Garmin expects to obtain the necessary merger control approvals.