GARMIN LTD (GRMN) Form 10-K for Period Ending 12/29/2012
Xcelerate Version: 6.20.1
 
Document and Entity Information (USD $)
12 Months Ended
Dec. 29, 2012
Feb. 25, 2013
Jun. 30, 2012
Document Information [Line Items]
     
Document Type
10-K 
   
Amendment Flag
false 
   
Document Period End Date
Dec. 29, 2012 
   
Document Fiscal Year Focus
2012 
   
Document Fiscal Period Focus
FY 
   
Trading Symbol
GRMN 
   
Entity Registrant Name
GARMIN LTD 
   
Entity Central Index Key
0001121788 
   
Current Fiscal Year End Date
--12-29 
   
Entity Well-known Seasoned Issuer
Yes 
   
Entity Current Reporting Status
Yes 
   
Entity Voluntary Filers
No 
   
Entity Filer Category
Large Accelerated Filer 
   
Entity Common Stock, Shares Outstanding
 
208,077,418 
 
Entity Public Float
   
$ 4,625,690,840 
Consolidated Balance Sheets (USD $)
Dec. 29, 2012
Dec. 31, 2011
Current assets:
   
Cash and cash equivalents
$ 1,231,180,000 
$ 1,287,160,000 
Marketable securities (Note 3)
153,083,000 
111,153,000 
Accounts receivable, less allowance for doubtful accounts of $30,596 in 2012 and $30,224 in 2011
603,673,000 
607,450,000 
Inventories, net
389,931,000 
397,741,000 
Deferred income taxes (Note 6)
68,785,000 
53,670,000 
Deferred costs
53,948,000 
40,033,000 
Prepaid expenses and other current assets
35,520,000 
77,630,000 
Total current assets
2,536,120,000 
2,574,837,000 
Property and equipment, net
   
Land and improvements
97,427,000 
95,570,000 
Building and improvements
284,534,000 
277,624,000 
Office furniture and equipment
135,246,000 
112,345,000 
Vehicles
20,695,000 
19,001,000 
Property and equipment, Gross
759,738,000 
711,368,000 
Accumulated depreciation
(349,987,000)
(294,263,000)
Property and equipment, Net
409,751,000 
417,105,000 
Restricted cash (Note 4)
836,000 
771,000 
Marketable securities (Note 3)
1,488,312,000 
1,097,002,000 
Noncurrent deferred income tax (Note 6)
93,920,000 
88,637,000 
Noncurrent deferred costs
42,359,000 
40,823,000 
Intangible assets
232,597,000 
246,646,000 
Other assets
15,229,000 
5,517,000 
Total assets
4,819,124,000 
4,471,338,000 
Current liabilities:
   
Accounts payable
131,263,000 
164,010,000 
Salaries and benefits payable
55,969,000 
45,964,000 
Accrued warranty costs
37,301,000 
46,773,000 
Accrued sales program costs
57,080,000 
52,262,000 
Deferred revenue
252,375,000 
188,987,000 
Accrued license fees
71,745,000 
99,025,000 
Accrued advertising expense
25,192,000 
31,915,000 
Other accrued expenses
69,806,000 
67,912,000 
Deferred income taxes (Note 6)
332,000 
5,782,000 
Income taxes payable
32,031,000 
77,784,000 
Dividend payable
175,932,000 
77,865,000 
Total current liabilities
909,026,000 
858,279,000 
Deferred income taxes (Note 6)
2,467,000 
4,951,000 
Non-current income taxes
181,754,000 
161,904,000 
Non-current deferred revenue
193,047,000 
188,132,000 
Other liabilities
1,034,000 
1,491,000 
Stockholders' equity:
   
Shares, CHF 10 par value, 208,077,418 shares authorized and issued; 195,591,854 shares outstanding at December 29, 2012; and 194,662,617 shares outstanding at December 31, 2011; (Notes 9, 10, 11, and 12):
1,797,435,000 
1,797,435,000 
Additional paid-in capital
72,462,000 
61,869,000 
Treasury stock
(81,280,000)
(103,498,000)
Retained earnings
1,604,625,000 
1,413,582,000 
Accumulated other comprehensive income
138,554,000 
87,193,000 
Total stockholders' equity
3,531,796,000 
3,256,581,000 
Total liabilities and stockholders' equity
4,819,124,000 
4,471,338,000 
Manufacturing
   
Property and equipment, net
   
Equipment
131,019,000 
125,820,000 
Engineering
   
Property and equipment, net
   
Equipment
$ 90,817,000 
$ 81,008,000 
Consolidated Balance Sheets (Parenthetical)(USD ($))
In Thousands, except Share data, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Accounts receivable, allowance for doubtful accounts
$ 30,596 
$ 30,224 
Shares, par value
$ 9.0744 
$ 9.0744 
Shares, shares authorized
208,077,418 
208,077,418 
Shares, shares issued
208,077,418  1  2 3
208,077,418  1  2 3
Shares, shares outstanding
195,591,854 
194,662,617 
Consolidated Statements of Income (USD $)
12 Months Ended
In Thousands, except Per Share data, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Net sales
$ 2,715,675 
$ 2,758,569 
$ 2,689,911 
Cost of goods sold
1,277,195 
1,419,977 
1,343,537 
Gross profit
1,438,480 
1,338,592 
1,346,374 
Advertising expense
138,757 
145,024 
144,613 
Selling, general and administrative expenses
369,790 
341,217 
287,824 
Research and development expense
325,773 
298,584 
277,261 
Total operating expense
834,320 
784,825 
709,698 
Operating income
604,160 
553,767 
636,676 
Other income (expense):
     
Interest income
35,108 
32,812 
24,979 
Interest expense
   
(1,246)
Foreign currency losses
(20,022)
(12,100)
(88,377)
Other
5,282 
9,682 
5,240 
Total other income (expense)
20,368 
30,394 
(59,404)
Income before income taxes
624,528 
584,161 
577,272 
Income tax provision (benefit): (Note 6)
     
Current
114,013 
110,755 
(11,636)
Deferred
(31,888)
(47,490)
4,305 
Income tax expense
82,125 
63,265 
(7,331)
Net income
$ 542,403 
$ 520,896 
$ 584,603 
Basic net income per share (Note 10)
$ 2.78 
$ 2.68 
$ 2.97 
Diluted net income per share (Note 10)
$ 2.76 
$ 2.67 
$ 2.95 
Consolidated Statements of Comprehensive Income (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Net income
$ 542,403 
$ 520,896 
$ 584,603 
Foreign currency translation adjustment
52,516 
14,716 
52,509 
Change in fair value of available-for-sale marketable securities, net of deferred taxes
(1,155)
16,473 
16,877 
Comprehensive income
$ 593,764 
$ 552,085 
$ 653,989 
Consolidated Statements of Stockholders' Equity (USD $)
In Thousands
Total
Common Stock
Additional Paid-In Capital
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Gain/(Loss)
Beginning Balance at Dec. 26, 2009
$ 2,836,447 
$ 1,001 
$ 32,221 
$ 0 
$ 2,816,607 
$ (13,382)
Net income
584,603 
     
584,603 
 
Translation adjustment
52,509 
       
52,509 
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $46 in 2012, ($369) in 2011 and $348 in 2010
16,877 
       
16,877 
Comprehensive income
653,989 
         
Dividends declared
(298,853)
     
(298,853)
 
Tax benefit from exercise of employee stock options
4,495 
 
4,495 
     
Issuance of common/treasury stock from exercise of stock options
9,465 
(867)
10,330 
   
Stock compensation
40,332 
 
40,332 
     
Purchase and retirement of common stock (prior to June 27, 2010)
(108,840)
(16)
(67,528)
 
(41,296)
 
Purchase of treasury stock
(117,088)
   
(117,088)
   
Impact of redomestication on par value of common shares
 
1,796,448 
   
(1,796,448)
 
Deferred tax impact of redomestication
29,615 
 
29,615 
     
Ending Balance at Dec. 25, 2010
3,049,562 
1,797,435 
38,268 
(106,758)
1,264,613 
56,004 
Net income
520,896 
     
520,896 
 
Translation adjustment
14,716 
       
14,716 
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $46 in 2012, ($369) in 2011 and $348 in 2010
16,473 
       
16,473 
Comprehensive income
552,085 
         
Dividends declared
(388,628)
     
(388,628)
 
Tax benefit from exercise of employee stock options
3,313 
 
3,313 
     
Issuance of treasury stock related to equity awards
22,337 
 
(19,924)
42,261 
   
Stock compensation
40,212 
 
40,212 
     
Purchase of treasury stock
(22,300)
   
(22,300)
   
Reclassification of retired shares to treasury shares
     
(16,701)
16,701 
 
Ending Balance at Dec. 31, 2011
3,256,581 
1,797,435 
61,869 
(103,498)
1,413,582 
87,193 
Net income
542,403 
     
542,403 
 
Translation adjustment
52,516 
       
52,516 
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $46 in 2012, ($369) in 2011 and $348 in 2010
(1,155)
       
(1,155)
Comprehensive income
593,764 
         
Dividends declared
(351,360)
     
(351,360)
 
Tax benefit from exercise of employee stock options
(516)
 
(516)
     
Issuance of treasury stock related to equity awards
22,798 
 
(18,165)
40,963 
   
Stock compensation
29,274 
 
29,274 
     
Purchase of treasury stock
(18,745)
   
(18,745)
   
Ending Balance at Dec. 29, 2012
$ 3,531,796 
$ 1,797,435 
$ 72,462 
$ (81,280)
$ 1,604,625 
$ 138,554 
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Adjustment related to unrealized gains (losses) on available-for-sale securities, income tax
$ 46 
$ (369)
$ 348 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Operating Activities:
     
Net income
$ 542,403 
$ 520,896 
$ 584,603 
Adjustments to reconcile net income to net cash provided by operating activities:
     
Depreciation
52,632 
54,610 
53,487 
Amortization
37,835 
39,925 
41,164 
Gain on sale of property and equipment
(367)
(2,192)
(306)
Provision for doubtful accounts
4,678 
2,317 
(4,476)
Provision for obsolete and slow-moving inventories
11,003 
16,047 
5,753 
Unrealized foreign currency losses
40,042 
18,583 
62,770 
Deferred income taxes
(32,080)
(42,475)
(471)
Stock compensation
29,274 
40,212 
40,332 
Realized loss/(gains) on marketable securities
(2,980)
(4,322)
2,382 
Changes in operating assets and liabilities, net of acquisitions:
     
Accounts receivable
9,077 
169,543 
129,698 
Inventories
3,997 
(6,385)
(77,122)
Other current and non-current assets
39,717 
(60,996)
6,557 
Accounts payable
(38,929)
(26,329)
(81,354)
Other current and non-current liabilities
(33,235)
(61,103)
(144,476)
Deferred revenue
67,931 
179,439 
131,303 
Deferred costs
(15,441)
(36,120)
(31,445)
Income taxes payable
(30,812)
20,684 
52,238 
Net cash provided by operating activities
684,745 
822,334 
770,637 
Investing activities:
     
Purchases of property and equipment
(38,445)
(38,366)
(32,232)
Proceeds from sale of property and equipment
757 
4,127 
139 
Purchase of intangible assets
(6,783)
(6,933)
(3,883)
Purchase of marketable securities
(1,429,593)
(1,172,555)
(694,038)
Redemption of marketable securities
985,598 
779,213 
668,495 
Acquisitions, net of cash acquired
(7,697)
(54,190)
(12,120)
Change in restricted cash
(65)
506 
770 
Net cash used in investing activities
(496,228)
(488,198)
(72,869)
Financing activities:
     
Dividends
(253,386)
(310,763)
(298,853)
Issuance of treasury/common stock related to equity awards
22,798 
22,337 
9,465 
Tax benefit from issuance of equity awards
(516)
3,313 
4,495 
Purchase of treasury/common stock
(18,745)
(22,300)
(225,928)
Net cash used in financing activities
(249,849)
(307,413)
(510,821)
Effect of exchange rate changes on cash and cash equivalents
5,352 
(499)
(17,592)
Net (decrease)/increase in cash and cash equivalents
(55,980)
26,224 
169,355 
Cash and cash equivalents at beginning of year
1,287,160 
1,260,936 
1,091,581 
Cash and cash equivalents at end of year
1,231,180 
1,287,160 
1,260,936 
Supplemental disclosures of cash flow information
     
Cash paid during the year for income taxes
127,509 
85,231 
43,940 
Cash received during the year from income tax refunds
5,237 
350 
4,526 
Cash paid during the year for interest
   
1,246 
Supplemental disclosure of non-cash investing and financing activities
     
Change in marketable securities related to unrealized appreciation (depreciation)
(1,109)
16,104 
17,225 
Fair value of assets acquired
11,156 
162,572 
21,918 
Liabilities assumed
(2,740)
(93,014)
(5,547)
Less: cash acquired
(719)
(15,368)
(4,251)
Net cash paid
$ 7,697 
$ 54,190 
$ 12,120 
Description of the Business
12 Months Ended
Dec. 29, 2012
Description of the Business

1. Description of the Business

 

Garmin Ltd. and subsidiaries (together, the “Company”) design, develop, manufacture, market, and distribute Global Positioning System-enabled products and other related products. Garmin Corporation (GC) is primarily responsible for the manufacturing and distribution of the Company’s products to the Company’s subsidiaries and, to a lesser extent, new product development and sales and marketing of the Company’s products in Asia and the Far East. Garmin International, Inc. (GII) is primarily responsible for sales and marketing of the Company’s products in the Americas region and for most of the Company’s research and new product development. GII also manufactures most of the Company’s products in the aviation segment. Garmin (Europe) Limited (GEL) is responsible for sales and marketing of the Company’s products in Europe, the Middle East and Africa (EMEA). Many of GEL’s sales are to other Company-owned distributors in the EMEA region.

Summary of Significant Accounting Policies
12 Months Ended
Dec. 29, 2012
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The accompanying consolidated financial statements reflect the accounts of Garmin Ltd. and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated.

 

Fiscal Year

 

The Company has adopted a 52–53-week period ending on the last Saturday of the calendar year. Due to the fact that there are not exactly 52 weeks in a calendar year and there is slightly more than one additional day per year (not including the effects of leap year) in each calendar year as compared to a 52-week fiscal year, the Company will have a fiscal year comprising 53 weeks in certain fiscal years, as determined by when the last Saturday of the calendar year occurs.

 

In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs, and related financial activity. Therefore, the financial results of those fiscal years, and the associated 14-week fourth quarter, will not be entirely comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13 weeks. Fiscal years 2012 and 2010 included 52 weeks while fiscal year 2011 included 53 weeks.

 

Foreign Currency

 

Many Garmin Ltd. subsidiaries utilize currencies other than the United States Dollar (USD) as their functional currency. As required by the Foreign Currency Matters topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the financial statements of these subsidiaries for all periods presented have been translated into USD, the functional currency of Garmin Ltd., and the reporting currency herein, for purposes of consolidation at rates prevailing during the year for sales, costs, and expenses and at end-of-year rates for all assets and liabilities. The effect of this translation is recorded in a separate component of stockholders’ equity. Cumulative translation adjustments of $128,972 and $76,456 as of December 29, 2012 and December 31, 2011, respectively, have been included in accumulated other comprehensive income in the accompanying consolidated balance sheets.

  

 

Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date. Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date. All differences are recorded in results of operations and amounted to exchange losses of $20,022, $12,100, and $88,377 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. The loss in fiscal 2012 was due primarily to the weakening of the USD against the Taiwan Dollar and was partially offset by the USD weakening against the Euro and the British Pound Sterling. The loss in fiscal 2011 was primarily the result of the slight strengthening of the USD against the Euro and the slight weakening of the USD against the Taiwan Dollar. The loss in fiscal 2010 was primarily the result of the strengthening of the USD against the Euro and the British Pound Sterling and the weakening of the USD against the Taiwan Dollar.

 

Earnings Per Share

 

Basic earnings per share amounts are computed based on the weighted-average number of common shares outstanding. For purposes of diluted earnings per share, the number of shares that would be issued from the exercise of dilutive stock options has been reduced by the number of shares which could have been purchased from the proceeds of the exercise at the average market price of the Company’s stock during the period the options were outstanding. See Note 10.

 

Cash and Cash Equivalents

 

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, operating accounts, money market funds, and securities with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates fair value, given the short maturity of those instruments.

 

Trade Accounts Receivable

 

The Company sells its products to retailers, wholesalers, and other customers and extends credit based on its evaluation of the customer’s financial condition.  Potential losses on receivables are dependent on each individual customer’s financial condition. The Company carries its trade accounts receivable at net realizable value. Typically, its accounts receivable are collected within 80 days and do not bear interest. The Company monitors its exposure to losses on receivables and maintains allowances for potential losses or adjustments. The Company determines these allowances by (1) evaluating the aging of its receivables and (2) reviewing its high-risk customers. Past due receivable balances are written off when its internal collection efforts have been unsuccessful in collecting the amount due. In 2011, Garmin purchased credit insurance to provide security against large losses.

 

Inventories

 

Inventories are stated at the lower of cost or market with cost being determined on a first-in, first-out (FIFO) basis. Inventories consisted of the following:

 

    December 29, 2012     December 31, 2011  
             
Raw Materials   $ 119,142     $ 129,211  
Work-in-process     53,656       52,176  
Finished goods     243,238       245,724  
Inventory Reserves     (26,105 )     (29,370 )
Inventory, net of reserves   $ 389,931     $ 397,741  

 

 

Property and Equipment

 

Property and equipment are recorded at cost and depreciated using the straight-line method over the following estimated useful lives:

 

Buildings and improvements     39  
Office furniture and equipment     3-5  
Manufacturing and engineering equipment     5  
Vehicles     5  

 

Long-Lived Assets

 

As required by the Property, Plant and Equipment topic of the FASB ASC, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That assessment is based on the carrying amount of the asset at the date it is tested for recoverability. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

 

The Intangibles – Goodwill and Other topic of the FASB ASC requires that goodwill and intangible assets with indefinite useful lives should not be amortized but rather be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired. The Company did not recognize any goodwill or intangible asset impairment charges in 2012, 2011, or 2010.  The accounting guidance also requires that intangible assets with finite lives be amortized over their estimated useful lives and reviewed for impairment. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from 3 to 10 years.

 

Dividends

 

On June 27, 2010, the Company completed the redomestication of the place of its incorporation from the Cayman Islands to Switzerland. Under Swiss corporate law, dividends must be approved by shareholders at the general meeting of our shareholders.

 

On June 1, 2012, the shareholders approved a dividend of $1.80 per share (of which, $0.90 was paid in the Company's 2012 fiscal year) payable in four installments as follows: $0.45 on June 29, 2012 to shareholders of record on June 15, 2012, $0.45 on September 28, 2012 to shareholders of record on September 14, 2012, $0.45 on December 31, 2012 to shareholders of record on December 14, 2012 and $0.45 on March 29, 2013 to shareholders of record on March 15, 2013. The Company paid dividends in 2012 in the amount of $253,386. Both the dividend paid and the remaining dividend payable have been reported as a reduction of retained earnings.

 

On June 3, 2011, the shareholders approved a dividend of $2.00 per share (of which, $1.60 was paid in the Company's 2011 fiscal year) payable in four installments as follows: $0.80 on June 30, 2011 to shareholders of record on June 15, 2011, $0.40 on September 30, 2011 to shareholders of record on September 15, 2011, $0.40 on December 30, 2011 to shareholders of record on December 15, 2011 and $0.40 on March 30, 2012 to shareholders of record on March 15, 2012. The Company paid dividends in 2011 in the amount of $310,763. The dividends were reported as a reduction of retained earnings.

 

On March 16, 2010 the Board of Directors declared a dividend of $1.50 per share to be paid on April 30, 2010 to shareholders of record on April 15, 2010. The Company paid out a dividend in the amount of $298,853. The dividend was reported as a reduction of retained earnings.

  

Approximately $254,986 and $239,470 of retained earnings are indefinitely restricted from distribution to stockholders pursuant to the laws of Taiwan at December 29, 2012 and December 31, 2011, respectively.

 

 

Intangible Assets

 

At December 29, 2012 and December 31, 2011, the Company had patents, customer related intangibles and other identifiable finite-lived intangible assets recorded at a cost of $181,918 and $173,819, respectively. Identifiable, finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis over three to ten years. Accumulated amortization was $125,380 and $106,648 at December 29, 2012 and December 31, 2011 respectively. Amortization expense on these intangible assets was $21,437, $24,831, and $28,734 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. In the next five years, the amortization expense is estimated to be $21,239, $10,960, $8,311, $6,269, and $2,754, respectively.

 

The Company’s excess purchase cost over fair value of net assets acquired (goodwill) was $176,059 at December 29, 2012 and $179,475 at December 31, 2011.

 

    December 29,     December 31,  
    2012     2011  
Goodwill balance at beginning of year   $ 179,475     $ 136,548  
Acquisitions     3,470       46,481  
Finalization of purchase price allocations and effect of foreign currency translation     (6,886 )     (3,554 )
Goodwill balance at end of year   $ 176,059     $ 179,475  

 

The decrease in net identifiable intangible assets is principally related to amortization, partially offset by acquisitions completed in 2012 and other purchases of intangible assets.

 

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 were considered available-for-sale at December 29, 2012. 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 29, 2012 and December 31, 2011, cumulative unrealized gains/(losses) of $9,582 and $10,737, respectively, were reported in accumulated other comprehensive income, 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 the FASB ASC topic 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 based on the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income taxes of $295,446, $277,724, and $257,727 at December 29, 2012, December 31, 2011, and December 25, 2010, respectively, have not been accrued by the Company for the unremitted earnings of several of its foreign subsidiaries because such earnings are intended to be reinvested in the subsidiaries indefinitely.

 

 

The Company adopted the applicable guidance included in the FASB ASC topic Income Taxes related to accounting for uncertainty in income taxes on December 31, 2006, the beginning of fiscal year 2007.   The total amount of unrecognized tax benefits as of December 29, 2012 was $181,754 including interest of $7,680.  A reconciliation of the beginning and ending amount of unrecognized tax benefits for years ended December 29, 2012, December 31, 2011, and December 25, 2010 is as follows:

 

    December 29,     December 31,     December 25,  
    2012     2011     2010  
Balance at beginning of year   $ 161,904     $ 153,621     $ 255,748  
Additions based on tax positions related to prior years     2,232       5,568       11,443  
Reductions based on tax positions related to prior years     (3,719 )     (6,885 )     (10,392 )
Additions based on tax positions related to current period     31,351       29,210       43,202  
Reductions related to settlements with tax authorities     (665 )     -       (122,314 )
Expiration of statute of limitations     (9,349 )     (19,610 )     (24,066 )
Balance at end of year   $ 181,754     $ 161,904     $ 153,621  

 

The December 29, 2012 balance of $181,754 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. 

 

Accounting guidance 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.  The entire $181,754, $161,904, and $153,621 are required to be classified as non-current at December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

 

Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense.  At December 29, 2012, December 31, 2011, and December 25, 2010, the Company had accrued approximately $7,680, $10,850, and $9,580, respectively, for interest.  The interest component of the reserve increased (decreased) income tax expense for the years ending December 29, 2012, December 31, 2011, and December 25, 2010 by ($3,719), $5,568, and ($10,580), respectively. The Company had no amounts accrued for penalties as the nature of the unrecognized tax benefits, if recognized, would not warrant the imposition of penalties.

 

The Company files income tax returns in Switzerland and U.S. federal jurisdictions, as well as various state, local and foreign jurisdictions.  The Company is no longer subject to U.S. federal, state, or local tax examinations by tax authorities for years 2008 and prior.  The Company is no longer subject to Taiwan income tax examinations by tax authorities for years 2006 and prior.  The Company is no longer subject to United Kingdom tax examinations by tax authorities for years 2009 and prior.

 

The Company recognized a reduction of income tax expense of $9,349, $19,610, and $24,066 in fiscal years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively, to reflect the expiration of statutes of limitations in various jurisdictions.

 

The Company believes that it is reasonably possible that approximately $78,372 of its reserves for certain unrecognized tax benefits will decrease within the next 12 months as the result of the expiration of statutes of limitations. This potential decrease in unrecognized tax benefits would impact the Company’s effective tax rate within the next 12 months.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

  

 

Concentration of Credit Risk

 

The Company grants credit to certain customers who meet the Company’s pre-established credit requirements. Generally, the Company does not require security when trade credit is granted to customers. Credit losses are provided for in the Company’s consolidated financial statements and typically have been within management’s expectations. Certain customers are allowed extended terms consistent with normal industry practice. Most of these extended terms can be classified as either relating to seasonal sales variations or to the timing of new product releases by the Company.

 

The Company’s top ten customers have contributed between 26% and 34% of net sales since 2010. None of the Company’s customers accounted for more than 10% of consolidated net sales in the years ended December 29, 2012, December 31, 2011, and December 25, 2010. Beginning in 2011, the Company has maintained trade credit insurance to provide security against large losses.

 

Revenue Recognition

 

Garmin recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable.  For the large majority of Garmin’s sales, these criteria are met once product has shipped and title and risk of loss have transferred to the customer.  The Company recognizes revenue from the sale of hardware products and software bundled with hardware that is essential to the functionality of the hardware in accordance with general revenue recognition accounting guidance. The Company recognizes revenue in accordance with industry specific software accounting guidance for standalone sales of software products and sales of software bundled with hardware not essential to the functionality of the hardware.  The Company generally does not offer specified or unspecified upgrade rights to its customers in connection with software sales.

 

Garmin introduced nüMaps Lifetime™ in January 2009, which is a single fee program that, subject to the program’s terms and conditions, enables customers to download the latest map and point of interest information every quarter for the useful life of their PND.  The revenue and associated cost of royalties for sales of nüMaps Lifetime™ products are deferred at the time of sale and recognized ratably on a straight-line basis over the estimated 36-month life of the products. With the acquisition of Navigon AG in 2011, products marketed under the Navigon brand have a FreshMaps program that enables customers to download the latest map and point of interest information for two years. The revenue and associated cost of royalties for sales of FreshMaps products are deferred at the time of sale and recognized ratably on a straight-line basis over the two year period.

 

For multiple element arrangements that include tangible products that contain software that is essential to the tangible product’s functionality and undelivered software elements that relate to the tangible product’s essential software, the Company allocates revenue to all deliverables based on their relative selling prices. In such circumstances, the accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“ESP”).  VSOE generally exists only when the Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. In addition to the products listed below, the Company has offered certain other products including mobile applications, aviation subscriptions and extended warranties that involve multiple-element arrangements that are immaterial.

  

In 2010, Garmin began offering PNDs with lifetime map updates (LMUs) bundled in the original purchase price. Similar to nüMaps Lifetime™, LMUs enable customers to download the latest map and point of interest information every quarter for the useful life of their PND. In addition, Garmin offers PNDs with premium traffic service bundled in the original purchase price in the European market. The Company has identified two deliverables contained in arrangements involving the sale of PNDs which include either the LMU or premium traffic service. The first deliverable is the hardware along with the software essential to the functionality of the hardware device delivered at the time of sale. The second deliverable is either the LMU or premium traffic service. The Company has allocated revenue between these two deliverables using the relative selling price method. Amounts allocated to the delivered hardware and the related essential software are recognized at the time of sale provided the other conditions for revenue recognition have been met.  The revenue and associated cost of royalties allocated to the LMU or the subscription for premium traffic service are deferred and recognized on a straight-line basis over the estimated 36-month life of the products.

 

 

Prior to the third quarter of fiscal 2011, Garmin determined its estimate of selling price using the dealer/distributor price for nüMaps Lifetime or premium traffic subscriptions sold separately, and the prices for products bundled with and without the LMU and premium traffic service when comparable models were available, as inputs to the relative selling price method in a manner similar to VSOE. The estimated selling price determined in this manner was used to defer revenues for all products bundled with the LMU and premium traffic service, as the number of bundled units sold as a percentage of total units sold was less significant and other indicators of selling price were not readily available.

 

During 2011, sales of products bundled with LMUs and premium traffic service increased significantly as a percentage of total product sales. Concurrently, market conditions caused decreases in the ASP and margins of comparable models year over year, new bundled products were introduced at lower ASPs, and the difference in pricing of bundled units and comparable unbundled models decreased considerably. Due to these changes, the Company determined it was appropriate to change its estimate of the per unit revenue and cost deferrals during the third quarter of 2011.

 

As the sales of nüMaps Lifetime and premium traffic subscriptions as a percentage of total unit sales or in the aggregate decreased significantly in mid-2011, the Company determined that the previous estimate of selling price based on more limited stand-alone sales of nüMaps Lifetime or premium traffic was no longer a sole determinant of its value as determined under VSOE, and that third party evidence of selling price was not available. Management determined that the price differential between bundled and unbundled products and the royalty cost of the LMU or premium traffic subscription plus an approximate margin were both additional indicators of estimated selling price. These estimates are also reflective of how the Company establishes product pricing based in part on customer perception of value of the added LMU or premium traffic service capability. As such, beginning in the third quarter of 2011, the Company changed its estimate of selling price of the undelivered element to be based on the relative selling price method using a weighted average of the stand-alone sales price, the price differential between bundled and unbundled units, and the royalty or subscription cost plus a normal margin.

 

The impact in 2011 of the change in estimate for lifetime map updates and premium traffic service, as described above, was an increase in revenue, gross profit, net income, basic net income per share, and diluted net income per share of $77.8 million, $66.5 million, $59.3 million, $0.31, and $0.30, respectively.

 

Garmin records estimated reductions to revenue for customer sales programs, returns and incentive offerings including rebates, price protection (product discounts offered to retailers to assist in clearing older products from their inventories in advance of new product releases), promotions and other volume-based incentives. The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions. Changes in these estimates could negatively affect Garmin’s operating results. These incentives are reviewed periodically and, with the exceptions of price protection and certain other promotions, are accrued for on a percentage of sales basis. If market conditions were to decline, Garmin may take actions to increase customer incentive offerings possibly resulting in an incremental reduction of revenue at the time the incentive is offered.

 

The Company records revenue net of sales tax, trade discounts and customer returns. The reductions to revenue for expected future product returns are based on the Company’s historical experience.

 

 

Deferred Revenues and Costs

 

At December 29, 2012 and December 31, 2011, the Company had deferred revenues totaling $445,422 and $377,119, respectively, and related deferred costs totaling $96,307 and $80,856, respectively.

 

The deferred revenues and costs are recognized over their estimated economic lives of two to three years on a straight-line basis. In the next three years, the gross margin recognition of deferred revenue and cost for the currently deferred amounts is estimated to be $198,427, $113,528, and $37,160, respectively.

 

Shipping and Handling Costs

 

Shipping and handling costs are included in cost of goods sold in the accompanying consolidated financial statements.

 

Product Warranty

 

The Company provides for estimated warranty costs at the time of sale. The warranty period for most products is one year to two years from date of shipment while certain aviation products have a warranty period of two years from the date of installation.

 

Sales Programs

 

The Company provides certain monthly and quarterly incentives for its dealers and distributors based on various factors including dealer purchasing volume and growth. Additionally, from time to time, the Company provides rebates to end users on certain products. Estimated rebates and incentives payable to dealers and distributors are regularly reviewed and recorded as accrued expenses on a monthly basis. In addition, the Company provides dealers and distributors with product discounts to assist these customers in clearing older products from their inventories in advance of new product releases. Each discount is tied to a specific product and can be applied to all customers who have purchased the product or a special discount may be agreed to on an individual customer basis. These rebates, incentives, and discounts are recorded as reductions to net sales in the accompanying consolidated statements of income in the period the Company has sold the product.

 

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising expense amounted to approximately $138,757, $145,024, and $144,613 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

 

Research and Development

 

A majority of the Company’s research and development is performed in the United States. Research and development costs, which are expensed as incurred, amounted to approximately $325,773, $298,584, and $277,261 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

 

Customer Service and Technical Support

 

Customer service and technical support costs are included as selling, general and administrative expenses in the accompanying consolidated statements of income. Customer service and technical support costs include costs associated with performing order processing, answering customer inquiries by telephone and through Web sites, e-mail and other electronic means, and providing free technical support assistance to customers. The technical support is provided within one year after the associated revenue is recognized. The related cost of providing this free support is not material.

  

 

Software Development Costs

 

The FASB ASC topic entitled Software requires companies to expense software development costs as they incur them until technological feasibility has been established, at which time those costs are capitalized until the product is available for general release to customers. Capitalized software development costs are not significant as the time elapsed from working model to release is typically short. As required by the Research and Development topic of the FASB ASC, costs incurred to enhance our existing products or after the general release of the service using the product are expensed in the period they are incurred and included in research and development costs in the accompanying consolidated statements of income.

 

Accounting for Stock-Based Compensation

 

      The Company currently sponsors four stock based employee compensation plans. The FASB ASC topic entitled Compensation – Stock Compensation requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors including employee stock options and restricted stock based on estimated fair values. See Note 9.

 

       Accounting guidance requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as stock-based compensation expense on a straight-line basis over the requisite service period in the Company’s consolidated financial statements.

 

      As stock-based compensation expenses recognized in the accompanying consolidated statements of income are based on awards ultimately expected to vest, they have been reduced for estimated forfeitures. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience and management’s estimates.

 

Reclassification

 

The consolidated balance sheet for the year ended December 31, 2011 reflects a reclassification decreasing noncurrent deferred income tax assets by $18.5 million with increases of $10.7 million to current deferred income tax assets and $7.8 million to prepaid expenses and other current assets, to conform to the current year presentation. This reclassification had no effect on net income.

 

Recently Issued Accounting Pronouncements

 

In May 2011, the FASB issued an amendment to the accounting standards related to fair value measurements and disclosure requirements that result in a consistent definition of fair value and common requirements for the measurement and disclosure of fair value between U.S. GAAP and International Financial Reporting Standards. This standard provides certain amendments to the existing guidance on the use and application of fair value measurements and maintains a definition of fair value that is based on the notion of exit price. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. The Company adopted this guidance in the current year with no material impact on the financial statements.

 

In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. The guidance allows two presentation alternatives; present items in net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of accounting standards. The Company adopted this guidance in the current year and has chosen to present two separate, but consecutive, statements of net income and other comprehensive income.

 

 

In September 2011, the FASB issued an amendment to ASC 350, Intangibles—Goodwill and Other, which simplifies how entities test goodwill for impairment. Under the amendment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads the entity to determine that it is more likely than not that its fair value is less than its carrying amount. If after assessing the totality of events or circumstances, an entity determines that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then the two-step impairment test for goodwill is unnecessary. If the entity concludes otherwise, then it is required to test goodwill for impairment under the two-step process as described under paragraphs 350-20-35-4 of the ASC. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any, as described in paragraph 350-20-35-9 of the ASC. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company adopted this guidance in the current year with no material impact on the financial statements.

 

In July 2012, the FASB issued Accounting Standards Update (ASU) No. 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment” (ASU 2012-02), which is included in ASC Topic 350 (Intangibles—Goodwill and Other). ASU 2012-02 provides an option for companies to use a qualitative approach to test indefinite-lived intangible assets for impairment if certain conditions are met. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 (early adoption is permitted). The implementation of the amended accounting guidance is not expected to have a material impact on the Company’s financial statements.

Marketable Securities
12 Months Ended
Dec. 29, 2012
Marketable Securities

3. Marketable Securities

 

The FASB ASC topic entitled Fair Value Measurements and Disclosures 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 accounting guidance 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 Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
   
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. The valuation methods used by the Company for each significant class of investments are summarized below.

 

Mortgage-backed securities, corporate bonds and obligations of states and political subdivisions – Valued based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads.

 

Common stocks – Valued at the closing price reported on the active market on which the individual securities are traded.

 

 

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

Available for sale securities measured at estimated fair value on a recurring basis are summarized below:

 

    Fair Value Measurements as  
    of December 29, 2012  
                         
Description   Total     Level 1     Level 2     Level 3  
                         
Mortgage-backed securities   $ 650,895     $ -     $ 650,895     $ -  
Obligations of states and political subdivisions     499,857       -       499,857       -  
Corporate bonds     399,941       -       399,941       -  
Common stocks     22,982       22,982       -       -  
Other     67,720       -       67,720       -  
Total   $ 1,641,395     $ 22,982     $ 1,618,413     $ -  

  

    Fair Value Measurements as  
    of December 31, 2011  
                         
Description   Total     Level 1     Level 2     Level 3  
                         
Mortgage-backed securities   $ 638,626     $ -     $ 638,626     $ -  
Obligations of states and political subdivisions     359,563       -       359,563       -  
Corporate bonds     132,044       -       132,044       -  
Common stocks     21,104       21,104       -       -  
Other     56,818       34,090       22,728       -  
Total   $ 1,208,155     $ 55,194     $ 1,152,961     $ -  

 

During 2012, the Company determined the inputs used to value its investments in corporate bonds, mortgage-backed securities, and obligations of state and political subdivisions were based on observable market information consistent with Level 2 of the fair value hierarchy, rather than Level 1 as reported in the 2011 financial statements. Accordingly, the amounts shown in the 2011 table above have been revised to reflect the correct presentation.

  

For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, a reconciliation of the beginning and ending balances, separately for each major category of assets, is required. There were no such assets or liabilities held during 2012. A reconciliation for 2011 is as follows:

 

    Fair Value Measurements  
    Using Significant Unobservable  
    Inputs (Level 3)  
    Year Ended  
    December 31, 2011  
       
Beginning balance of auction rate securities   $ 20,562  
Total unrealized gains included in other comprehensive income     5,038  
Sales out of Level 3     (25,600 )
Ending balance of auction rate securities   $ -  

 

 

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at December 29, 2012:

 

    Amortized Cost     Gross
Unrealized Gains
    Gross
Unrealized
Losses
    Other Than
Temporary
Impairment
    Estimated Fair
Value (Net Carrying
Amount)
 
Mortgage-backed securities   $ 644,388     $ 8,894     $ (2,387 )   $ -     $ 650,895  
Obligations of states and political subdivisions     499,241       2,345       (1,729 )     -       499,857  
U.S. corporate bonds     400,310       3,138       (2,233 )     (1,274 )     399,941  
Common stocks     21,113       2,392       (523 )     -       22,982  
Other     67,181       551       (12 )     -       67,720  
Total   $ 1,632,233     $ 17,320     $ (6,884 )   $ (1,274 )   $ 1,641,395  

 

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at December 31, 2011:

 

                Gross     Other Than     Estimated Fair  
          Gross     Unrealized     Temporary     Value (Net Carrying  
    Amortized Cost     Unrealized Gains     Losses     Impairment     Amount)  
Mortgage-backed securities   $ 628,747     $ 10,965     $ (1,086 )   $ -     $ 638,626  
Obligations of states and political subdivisions     358,314       2,339       (1,090 )     -       359,563  
U.S. corporate bonds     134,763       815       (2,260 )     (1,274 )     132,044  
Common stocks     19,846       1,463       (205 )             21,104  
Other     56,214       621       (17 )     -       56,818  
Total   $ 1,197,884     $ 16,203     $ (4,658 )   $ (1,274 )   $ 1,208,155  

  

The cost of securities sold is based on the specific identification method.

 

The unrealized losses and unrealized gains on the Company’s investments in 2012 and 2011 were caused primarily by changes in interest rates and credit spreads. The Company’s investment policy requires investments to be rated A or better with the objective of minimizing the potential risk of principal loss. The Company does not intend to sell the securities that have an unrealized loss shown in the table above and it is not more likely than not that the Company will be required to sell the investment before recovery of their amortized costs bases, which may be maturity. Therefore, the Company considers the declines to be temporary in nature. Fair values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time, which may be sufficient for anticipated recovery in market value. During 2012 and 2011, the Company did not record any material impairment charges on its outstanding securities.

 

The amortized cost and estimated fair value of marketable securities at December 29, 2012, 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 (2013)   $ 153,420     $ 153,083  
Due after one year through five years (2014-2018)     616,236       617,389  
Due after five years through ten years (2019-2023)     231,016       231,883  
Due after ten years (2024 and thereafter)     575,360       580,493  
Other (No contractual maturity dates)     56,201       58,547  
    $ 1,632,233     $ 1,641,395  
Commitments and Contingencies
12 Months Ended
Dec. 29, 2012
Commitments and Contingencies

4. Commitments and Contingencies

 

Rental expense related to office, equipment, warehouse space and real estate amounted to $17,470, $14,277, and $11,768 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. The Company recognizes rental expense on a straight-line basis over the lease term.

 

Future minimum lease payments are as follows:

 

Year   Amount  
       
2013   $ 14,340  
2014     12,090  
2015     9,029  
2016     6,659  
2017     3,337  
Thereafter     4,292  
Total   $ 49,747  

 

Certain cash balances of GEL are held as collateral by a bank, securing payment of the United Kingdom value-added tax requirements. The total amount of restricted cash balances were $836 and $771 at December 29, 2012 and December 31, 2011, respectively.

 

The Company is 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 $186,883 over the next five years.

 

In the normal course of business, the Company and its subsidiaries are parties to various legal claims, actions, and complaints, including matters involving patent infringement and other intellectual property claims and various other risks. It is not possible to predict with certainty whether or not the Company and its subsidiaries will ultimately be successful in any of these legal matters, or if not, what the impact might be. However, the Company’s management does not expect that the results in any of these legal proceedings will have a material adverse effect on the Company’s results of operations, financial position or cash flows.

Employee Benefit Plans
12 Months Ended
Dec. 29, 2012
Employee Benefit Plans

5. Employee Benefit Plans

 

GII and the Company’s other U.S.-based subsidiaries sponsor a defined contribution employee retirement plan under which their employees may contribute up to 50% of their annual compensation subject to Internal Revenue Code maximum limitations and to which the subsidiaries contribute a specified percentage of each participant’s annual compensation up to certain limits as defined in the retirement plan. Additionally, GEL has a defined contribution plan under which its employees may contribute up to 7.5% of their annual compensation. In both the plans described above, the subsidiaries contribute an amount determined annually at the discretion of the Board of Directors. During the years ended December 29, 2012, December 31, 2011, and December 25, 2010, expense related to these plans of $22,159, $20,647, and $17,952, respectively, was charged to operations.

 

Certain of the Company’s foreign subsidiaries participate in local defined benefit pension plans. Contributions are calculated by formulas that consider final pensionable salaries. Neither obligations nor contributions for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, were significant.

Income Taxes
12 Months Ended
Dec. 29, 2012
Income Taxes

6. Income Taxes

 

The Company’s income tax provision (benefit) consists of the following:

 

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
Federal:                        
Current   $ 83,185     $ 79,305     $ (46,674 )
Deferred     (22,988 )     (25,763 )     284  
      60,197       53,542       (46,390 )
State:                        
Current     8,532       9,087       3,929  
Deferred     (5,327 )     (4,490 )     (257 )
      3,205       4,597       3,672  
Foreign:                        
Current     22,296       22,363       31,109  
Deferred     (3,573 )     (17,237 )     4,278  
      18,723       5,126       35,387  
Total   $ 82,125     $ 63,265     $ (7,331 )

 

The income tax provision differs from the amount computed by applying the U.S. statutory federal income tax rate to income before taxes. The sources and tax effects of the differences, including the impact of establishing tax contingency accruals, are as follows:

 

    December 29,     December 31,     December 25,  
    2012     2011     2010  
Federal income tax expense at U.S. statutory rate   $ 218,585     $ 204,456     $ 202,045  
State income tax expense, net of federal tax effect     2,083       2,988       2,482  
Foreign tax rate differential     (141,456 )     (148,058 )     (115,633 )
Taiwan tax holiday benefit     (6,418 )     (13,127 )     (13,536 )
Net change in uncertain tax postions     19,850       8,283       (102,100 )
Other foreign taxes less incentives and credits     (2,287 )     9,658       26,707  
U.S. federal domestic production activities deduction     (6,276 )     (2,415 )     (1,691 )
U.S. federal research and development credit     -       (6,111 )     (5,757 )
Other, net     (1,956 )     7,591       152  
Income tax expense   $ 82,125     $ 63,265     $ (7,331 )

 

The holding company statutory federal income tax rate in Switzerland, the Company's place of incorporation since the redomestication effective June 27, 2010 (see Note 12), is 7.83%.  If the Company reconciled taxes at the Swiss holding company federal statutory tax rate to the reported income tax for 2012, as presented above, the amounts related to tax at the statutory rate would be approximately $170,000 lower, or $49,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $31,000. For 2011, the amounts related to tax at the statutory rate would be approximately $159,000 lower, or $45,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $11,000. For 2010, the amounts related to tax at the U.S. statutory rate of 35% prior to the redomestication and the Swiss statutory rate of 7.83%, subsequent to the redomestication, would be approximately $96,000 lower, or $106,000, and the foreign tax differential would be reduced by a similar amount to approximately ($20,000). All other amounts would remain substantially unchanged.

 

 

The Company’s income before income taxes attributable to non-U.S. operations was $495,908, $473,994, and $413,550, for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. The Taiwan tax holiday benefits included in the table above reflect $0.03, $0.07, and $0.07 per weighted-average common share outstanding for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. The Company currently expects to benefit from these Taiwan tax holidays through 2016, at which time these tax benefits might expire.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

 

    December 29,     December 31,  
    2012     2011  
Deferred tax assets:                
Product warranty accruals   $ 2,522     $ 2,094  
Allowance for doubtful accounts     11,026       12,282  
Inventory reserves     6,162       6,755  
Sales program allowances     5,680       5,591  
Reserve for sales returns     3,442       2,240  
Other accruals     8,774       5,359  
Stock option compensation     51,241       48,104  
Tax credit carryforwards, net     46,577       33,379  
Amortization     25,841       26,913  
Deferred revenue     56,293       36,041  
Net operating losses of subsidiaries     15,771       17,780  
Unrealized investment gain     2,459       -  
Other     1,334       4,164  
Valuation allowance related to loss carryforward and tax credits     (51,393 )     (37,173 )
      185,729       163,529  
Deferred tax liabilities:                
Depreciation     16,286       17,600  
Prepaid expenses     2,886       3,328  
Book basis in excess of tax basis for acquired entities     4,907       8,915  
Unrealized investment loss     -       910  
Other     1,744       1,202  
      25,823       31,955  
Net deferred tax assets   $ 159,906     $ 131,574  

 

The Company recognized a $29,615 deferred tax asset during 2010 for the future tax benefit of the fair market value step-up in basis of intangible assets related to the redomestication to Switzerland and local statutory tax reporting requirements. The deferred tax asset was recognized as an increase to Additional Paid-In Capital in 2010 and will reverse as the intangible assets are amortized for Swiss statutory and tax reporting purposes.

 

At December 29, 2012, the Company had $46,577 of tax credit carryover which includes $41,553 of Taiwan surtax credit with no expiration. There is a full valuation allowance for the Taiwan surtax credits. The valuation allowance reflects a net increase of $14,220 during 2012 including $10,314 related to Taiwan surtax credits. The valuation allowance decreased in 2011 by $14,179 of which $14,994 related to surtax credits in Taiwan.

 

At December 29, 2012, the Company had a deferred tax asset of $15,771 related to the future tax benefit on net operating loss (NOL) carryforwards of $73,298.  Included in the NOL carryforwards is $11,990 that relates to Spain and expires in varying amounts between 2022 and 2025, $24,604 that relates to Switzerland and expires in 2018, $2,218 related to China that expires in 2017 and $34,486 that relates to various other jurisdictions and has no expiration date. The Company has recorded a valuation allowance for a portion of its deferred tax asset relating to various tax attributes that it does not believe are more likely than not to be realized. In the future, if the Company determines, based on existence of sufficient evidence, that it should realize more or less of its deferred tax assets, an adjustment to the valuation allowance will be made in the period such a determination is made.

Fair Value of Financial Instruments
12 Months Ended
Dec. 29, 2012
Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

 

As required by the Financial Instruments topic of the FASB ASC, the following summarizes required information about the fair value of certain financial instruments for which it is currently practicable to estimate such value. None of the financial instruments are held or issued for trading purposes. The carrying amounts and fair values of the Company’s financial instruments are as follows:

 

    December 29, 2012     December 31, 2011  
    Carrying     Fair     Carrying     Fair  
    Amount     Value     Amount     Value  
                         
Cash and cash equivalents   $ 1,231,180     $ 1,231,180     $ 1,287,160     $ 1,287,160  
Restricted cash     836       836       771       771  
Marketable securities     1,641,395       1,641,395       1,208,155       1,208,155  

 

For certain of the Company’s financial instruments, including accounts receivable, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities.

Segment Information
12 Months Ended
Dec. 29, 2012
Segment Information

8. Segment Information

 

Beginning in 2011, for external reporting purposes, the Company identified five operating segments – auto/mobile, aviation, marine, outdoor and fitness. Each operating segment is individually reviewed and evaluated by our Chief Operating Decision Maker (CODM), who allocates resources and assesses performance of each segment individually. Prior to 2011, the Outdoor and Fitness operating segments were combined into a single reportable segment due to the similar nature of those products, their production processes, the types of customers served, their distribution processes, and similar economic conditions. Management re-evaluated the combination of these operating segments and determined that based on the growth characteristics of these segments they should now be reported as two distinct reportable segments.

 

All of the Company’s reportable segments offer products through the Company’s network of independent dealers and distributors as well as through OEM’s. However, the nature of products and types of customers for the five reportable segments vary. The Company’s marine, auto/mobile, outdoor, and fitness segments include portable global positioning system (GPS) receivers and accessories sold primarily to retail outlets. These products are produced primarily by the Company’s subsidiary in Taiwan. The Company’s aviation products are portable and panel mount avionics for Visual Flight Rules and Instrument Flight Rules navigation and are sold primarily to aviation dealers and certain aircraft manufacturers.

 

The Company’s Chief Executive Officer has been identified as the CODM. The CODM evaluates performance and allocates resources based on income before income taxes of each segment. Income before income taxes represents net sales less operating expenses including certain allocated general and administrative costs, interest income and expense, foreign currency adjustments, and other non-operating corporate expenses. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. There are no inter-segment sales or transfers.

 

The Company’s reportable segments share many common resources, infrastructures and assets in the normal course of business. Thus, the Company does not report accounts receivable, inventories, property and equipment, intangible assets, or capital expenditures by segment to the CODM.

 

 

Revenues, interest income and interest expense, and income before income taxes for each of the Company’s reportable segments are presented below:

 

    Fiscal Year Ended December 29, 2012  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 291,564     $ 401,747     $ 321,788     $ 208,136     $ 1,492,440     $ 2,715,675  
Allocated interest income     1,546       3,951       3,799       2,838       22,974       35,108  
Allocated interest expense     -       -       -       -       -       -  
Income before income taxes     75,177       167,734       114,274       35,725       231,618       624,528  

 

    Fiscal Year Ended December 31, 2011  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 284,855     $ 363,223     $ 298,163     $ 221,730     $ 1,590,598     $ 2,758,569  
Allocated interest income     1,250       4,496       4,342       2,934       19,790       32,812  
Allocated interest expense     -       -       -       -       -       -  
Income before income taxes     73,226       171,245       107,881       60,092       171,717       584,161  

 

    Fiscal Year Ended December 25, 2010  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 262,520     $ 319,119     $ 240,473     $ 198,860     $ 1,668,939     $ 2,689,911  
Allocated interest income     1,251       2,347       1,532       1,624       18,225       24,979  
Allocated interest expense     (122 )     (148 )     (111 )     (92 )     (773 )     (1,246 )
Income before income taxes     71,482       150,973       86,499       62,431       205,887       577,272  

 

Net sales, long-lived assets (property and equipment), and net assets by geographic area are as shown below for the years ended December 29, 2012, December 31, 2011, and December 25, 2010. Note that APAC refers to the Asia Pacific region, and EMEA includes Europe, the Middle East and Africa.

 

    Americas     APAC     EMEA     Total  
December 29, 2012                                
Net sales to external customers   $ 1,513,457     $ 256,882     $ 945,336     $ 2,715,675  
Long lived assets     222,310       134,257       53,184       409,751  
Net assets (1)     1,262,498       2,028,984       240,314       3,531,796  
                                 
December 31, 2011                                
Net sales to external customers   $ 1,527,508     $ 248,057     $ 983,004     $ 2,758,569  
Long lived assets     225,505       143,913       47,687       417,105  
Net assets (1)     1,155,653       1,915,284       185,644       3,256,581  
                                 
December 25, 2010                                
Net sales to external customers   $ 1,646,590     $ 220,478     $ 822,843     $ 2,689,911  
Long lived assets     231,569       146,859       49,377       427,805  
Net assets (1)     1,149,826       1,719,769       179,967       3,049,562  

 

(1) Americas and APAC net assets are primarily held in the United States and Taiwan, respectively.

Stock Compensation Plans
12 Months Ended
Dec. 29, 2012
Stock Compensation Plans

9. Stock Compensation Plans

 

Accounting for Stock-Based Compensation

 

The various Company stock compensation plans are summarized below. For all stock compensation plans, the company’s policy is to issue treasury shares for exercises of options and stock appreciation rights (“SARs”), releases of restricted stock units (“RSUs”), and issues of shares under the employee stock purchase plan (“ESPP”).

 

2011 Non-employee Directors’ Equity Incentive Plan

 

In June 2011, the stockholders adopted an equity incentive plan for non-employee directors (the 2011 Directors Plan) providing for grants of stock options, SARs, RSUs and/or performance shares, pursuant to which up to 122,592 shares were available for issuance. The term of each award cannot exceed ten years. Awards may vest over a minimum two-year period. During 2012 and 2011, 9,616 and 11,996 restricted stock units were granted under this plan.

 

2005 Equity Incentive Plan

 

In June 2005, the shareholders adopted an equity incentive plan (the “2005 Plan”) providing for grants of incentive and nonqualified stock options, SARs, RSUs and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 10,000,000 common shares were available for issuance. The various grants vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. Beginning December 10, 2012, restricted stock unit grants will vest evenly over a period of three years. During 2012, 2011, and 2010, 495,814, 410,197, and 494,995 restricted stock units were granted under the 2005 Plan. In addition, in 2012 and 2011, 61,235 and 42,330 stock options were granted under the 2005 Plan. In 2010, 20,000 performance shares were granted under the 2005 Plan. No performance shares were granted under the 2005 Plan in 2012 and 2011.

 

2000 Equity Incentive Plan

 

In October 2000, the shareholders adopted an equity incentive plan (the “2000 Plan”) providing for grants of incentive and nonqualified stock options, SARs, RSUs and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 7,000,000 common shares were available for issuance. The stock options and stock appreciation rights vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. The Company did not grant any stock awards from the 2000 Plan in 2012, 2011 or 2010.

 

2000 Non-employee Directors’ Option Plan

 

Also in October 2000, the stockholders adopted a stock option plan for non-employee directors (the 2000 Directors Plan) providing for grants of options for up to 100,000 common shares. The term of each award is ten years. All awards vest evenly over a three-year period. In 2009, the stockholders approved an additional 150,000 shares to the plan, making the total shares authorized under the plan 250,000. During 2010, options to purchase 23,924 shares, respectively, were granted under this plan. Following the June 2011 approval of the 2011 Directors Plan, the Company will no longer issue options to purchase shares under this plan.

 

 

Stock-Based Compensation Activity

 

A summary of the Company’s stock-based compensation activity and related information under the 2011 Directors Plan, the 2005 Plan, the 2000 Plan and the 2000 Directors Plan for the years ended December 29, 2012, December 31, 2011, and December 25, 2010 is provided below:

  

    Stock Options and SARs  
    Weighted-Average        
    Exercise Price     Number of Shares  
          (In Thousands)  
             
Outstanding at December 26, 2009   $ 48.28       10,109  
Granted   $ 33.44       24  
Exercised   $ 15.52       (826 )
Forfeited/Expired   $ 62.57       (221 )
Outstanding at December 25, 2010   $ 50.87       9,086  
Granted   $ 39.71       42  
Exercised   $ 21.02       (764 )
Forfeited/Expired   $ 64.63       (291 )
Outstanding at December 31, 2011   $ 53.14       8,073  
Granted   $ 42.16       61  
Exercised   $ 24.20       (794 )
Forfeited/Expired   $ 66.45       (208 )
Outstanding at December 29, 2012   $ 55.88       7,132  
Exercisable at December 29, 2012   $ 56.29       6,786  
Expected to vest after December 29, 2012   $ 48.04       337  

 

Stock Options and SARs as of December 29, 2012  
Exercise     Awards     Remaining     Awards  
Price     Outstanding     Life (Years)     Exercisable  
      (In Thousands)           (In Thousands)  
                     
  $8.00 -$20.00       437       1.73       437  
  $20.01 - $40.00       1,155       2.69       1,113  
  $40.01 - $60.00       3,177       4.47       2,873  
  $60.01 - $80.00       1,150       4.39       1,150  
  $80.01 - $100.00       2       4.95       2  
  $100.01 - $120.00       1,208       4.88       1,208  
  $120.01 - $140.00       3       4.75       3  
          7,132       4.05       6,786  

 

    Restricted Stock Units  
    Weighted-Average        
    Grant Date Fair Value     Number of Shares  
          (In Thousands)  
             
Outstanding at December 26, 2009   $ 23.47       1,316  
Granted   $ 30.29       515  
Released/Vested   $ 23.02       (291 )
Cancelled   $ 23.32       (37 )
Outstanding at December 25, 2010   $ 25.90       1,503  
Granted   $ 37.28       422  
Released/Vested   $ 37.73       (366 )
Cancelled   $ 25.89       (81 )
Outstanding at December 31, 2011   $ 29.40       1,478  
Granted   $ 39.41       506  
Released/Vested   $ 41.59       (435 )
Cancelled   $ 26.11       (89 )
Outstanding at December 29, 2012   $ 30.06       1,460  

 

 

The weighted-average remaining contract life for stock options and SARs outstanding and exercisable at December 29, 2012 is 4.05 and 3.92 years, respectively. The weighted-average remaining contract life of restricted stock units at December 29, 2012 was 1.85 years.

 

The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2012, 2011, and 2010:

 

    2012     2011     2010  
Weighted average grant date fair value of options granted   $ 9.98     $ 10.53     $ 8.99  
Expected volatility     0.3906       0.4078       0.4178  
Dividend yield     4.50 %     4.02 %     4.94 %
Expected life of options in years     6.6       6.5       6.3  
Risk-free interest rate     1.0 %     1.2 %     2.5 %

 

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options and SARs which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

 

The total fair value of awards vested during 2012, 2011, and 2010 was $32,612, $49,006, and $41,249, respectively. The aggregate intrinsic values of options and SARs outstanding and exercisable at December 29, 2012 were $23,159 and $23,086, respectively. The aggregate intrinsic values of options and SARs exercised during 2012, 2011, and 2010 were $12,548, $14,367, and $12,259, respectively. The aggregate intrinsic value of RSUs outstanding at December 29, 2012 was $58,394. The aggregate intrinsic values of RSUs released during 2012, 2011, and 2010 were $17,390, $14,592, and $8,828, respectively. Aggregate intrinsic value represents the positive difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $40.00 on December 29, 2012, and the exercise price multiplied by the number of options exercised. As of December 29, 2012, there was $45,265 of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under the stock compensation plans. That cost is expected to be recognized over the weighted average remaining vesting period.

 

Employee Stock Purchase Plan

 

The shareholders also adopted an employee stock purchase plan (ESPP). Up to 4,000,000 shares of common stock have been reserved for the ESPP with shareholders approving an additional 2,000,000 shares in May 2010. Shares will be offered to employees at a price equal to the lesser of 85% of the fair market value of the stock on the date of purchase or 85% of the fair market value on the first day of the ESPP period. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2012, 2011, and 2010, 326,483, 514,218, and 349,173 shares, respectively, were purchased under the plan for a total purchase price of $10,629, $13,746, and $8,134, respectively. During 2012, 2011 and 2010, the purchases were issued from treasury shares. At December 29, 2012, approximately 1,234,583 shares were available for future issuance.

Earnings Per Share
12 Months Ended
Dec. 29, 2012
Earnings Per Share

10. Earnings Per Share

 

The following table sets forth the computation of basic and diluted net income per share:

  

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
Numerator (in thousands):                        
Numerator for basic and diluted net income per share - net income   $ 542,403     $ 520,896     $ 584,603  
                         
Denominator (in thousands):                        
Denominator for basic net income per share - weighted-average common shares     194,909       194,105       196,979  
Effect of dilutive securities - employee stock-based awards     1,304       789       1,030  
Denominator for diluted net income per share - weighted-average common shares     196,213       194,894       198,009  
                         
Basic net income per share   $ 2.78     $ 2.68     $ 2.97  
                         
Diluted net income per share   $ 2.76     $ 2.67     $ 2.95  

 

Options to purchase 5,640,615, 5,920,076, and 6,192,043 common shares were outstanding during 2012, 2011, and 2010, respectively, but were not included in the computation of diluted earnings per share because the effect was antidilutive.

Share Repurchase Program
12 Months Ended
Dec. 29, 2012
Share Repurchase Program

11. Share Repurchase Program

 

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 expired on December 31, 2011. Under the plan, the Company had repurchased 7,366,646 shares using cash of $223,149 in fiscal 2010.

 

In addition, 522,856 shares repurchased for $16,701 prior to the Company’s redomestication to Switzerland on June 27, 2010, but for which transactions settled after that date, were treated as retired when such shares were still in treasury. These shares were reflected as additional treasury shares during the 13-weeks ended March 26, 2011 with a corresponding increase to retained earnings.

Redomestication
12 Months Ended
Dec. 29, 2012
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 $1,796,448 to $1,797,435 (198,077,418 shares * CHF 10/ USD 9.0744),and retained earnings was reduced by the same amount.  

 

The summary of the components of authorized shares at December 29, 2012, December 31, 2011, December 25, 2010 and changes during 2012 and 2011 are as follows:

 

    Outstanding     Treasury     Issued     Conditional     Authorized  
    Shares     Shares     Shares1     Capital     Capital  
Changes in components of authorized shares                                        
December 25, 2010     194,358,038       13,719,380 2     208,077,418 2,3     104,038,709 4     104,038,709 4
Treasury shares purchased/reclassified     (1,149,645 )     1,149,645 5     -       -       -  
Treasury shares issued for stock based compensation     1,454,224       (1,454,224 )     -       -       -  
December 31, 2011     194,662,617       13,414,801 2     208,077,418 2,3     104,038,709 4     104,038,709 4
Treasury shares purchased     (465,020 )     465,020       -       -       -  
Treasury shares issued for stock based compensation     1,394,257       (1,394,257 )     -       -       -  

Expiration of authorized capital

    -       -       -       -      

(104,038,709

)
December 29, 2012     195,591,854       12,485,564 2     208,077,418 2,3     104,038,709 4     - 4

 

1 Shares at CHF 10 par value (USD 9.0744)
2 Includes 10,000,000 formation shares at USD 0 historical cost
3 The par value of the share capital presented on the face of the balance sheet and in the consolidated statements of stockholders equity excludes the par value of the 10,000,000 formation shares.
4 Up to 104,038,709 conditional shares may be issued through the exercise of option rights which are granted to Garmin employees and/or members of its Board of Directors. In addition, the Board of Directors is authorized to issue up to 104,038,709 additional shares no later than June 27, 2012.
5 The increase in treasury shares in 2011 includes 522,856 shares repurchased in the prior year that were originally treated as retired when such shares were still in treasury. These shares are reflected as additional treasury shares in 2011 with a corresponding increase to retained earnings. See Note 11.

 

 

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.

Warranty Reserves
12 Months Ended
Dec. 29, 2012
Warranty Reserves

13. 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 expectations 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:

 

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
                   
Balance - beginning of period   $ 46,773     $ 49,885     $ 87,424  
Change in accrual for products sold in prior periods     -       -       (42,776 )
Accrual for products sold     38,421       52,305       93,172  
Expenditures     (47,893 )     (55,417 )     (87,935 )
Balance - end of period   $ 37,301     $ 46,773     $ 49,885  
Selected Quarterly Information (Unaudited)
12 Months Ended
Dec. 29, 2012
Selected Quarterly Information (Unaudited)

14. Selected Quarterly Information (Unaudited)

 

    Fiscal Year Ended December 29, 2012  
    Quarter Ending  
    March 31     June 30     September 29     December 29  
                         
Net sales   $ 556,597     $ 718,154     $ 672,376     $ 768,548  
Gross profit     283,759       421,813       359,055       373,853  
Net income     86,858       185,904       140,348       129,293  
Basic net income per share   $ 0.45     $ 0.95     $ 0.72     $ 0.66  

 

    Fiscal Year Ended December 31, 2011  
    Quarter Ending  
    March 26     June 25     September 24 (1)     December 31 (1)  
                         
Net sales   $ 507,834     $ 674,099     $ 666,993     $ 909,643  
Gross profit     238,374       322,100       344,331       433,787  
Net income     95,482       109,477       150,381       165,556  
Basic net income per share   $ 0.49     $ 0.56     $ 0.77     $ 0.86  

 

(1) Amounts shown for quarters ending September 24, 2011 and December 31, 2011 include a change in estimate for the Company's per unit revenue and cost deferrals. The impact to net sales, gross profit, net income, and basic net income per share for the quarter ending September 24, 2011 was $21.4 million, $17.8 million, $15.3 million and $0.07, respectively. The impact to net sales, gross profit, net income, and basic net income per share for the quarter ending December 31, 2011 was $56.4 million, $48.7 million, $44.0 million, and $0.24, respectively.

 

 

The above quarterly financial data is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these interim periods presented have been included. These results are not necessarily indicative of future quarterly results.

Acquisitions
12 Months Ended
Dec. 29, 2012
Acquisitions

15. Acquisitions

 

During 2011, subsidiaries of Garmin Ltd. completed the following acquisitions:

 

· Navigon AG (“Navigon”), a privately-held navigation provider based in Germany, since renamed as Garmin Würzburg GmbH

 

· Tri-Tronics Inc., the leading designer and manufacturer of electronic dog training equipment

 

· Garmin Distribution Africa (Pty) Ltd., the distributor of Garmin’s consumer products in Southern Africa, since renamed as Garmin Southern Africa (Pty) Ltd

 

· Garmap (Pty) Ltd., a South African mapping and mobile applications provider

 

· Centro GPS, the Chilean distributor of Garmin’s consumer products, since renamed as Garmin Chile Lda

 

These companies were acquired for an aggregate amount of $69,558 in cash less $15,368 cash acquired. The purchase price allocation for these acquisitions included goodwill and intangible assets of $76,452. Garmin also recognized $3,923 of restructuring costs in the third quarter of 2011 related specifically to the Navigon acquisition. Individually and in the aggregate, these acquisitions are not considered material; therefore, supplemental pro forma information is not presented. The allocation of purchase price to assets acquired and liabilities assumed in these acquisitions is based upon certain valuations and other analyses. Purchase price allocations for certain 2011 acquisitions were finalized in 2012 with no material adjustments.

 

In 2012, acquisitions of 3 companies were completed for net cash paid of $7,697. In 2010, acquisitions of 2 companies were completed for net cash paid of $12,120.

Subsequent Events
12 Months Ended
Dec. 29, 2012
Subsequent Events

16.  Subsequent Events

 

On February 15, 2013, the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $300 million of the common shares of Garmin Ltd.  The repurchases may be made from time to time as market and business conditions warrant on the open market or in negotiated transactions in compliance with the SEC’s Rule 10b-18.  The timing and amounts of any repurchases will be determined by the Company’s management depending on market conditions and other factors including price, regulatory requirements and capital availability.  The program does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. The share repurchase authorization expires on December 31, 2014.

 

The Company evaluated subsequent events through the time of filing this Annual Report on Form 10-K on February 27, 2013.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
12 Months Ended
Dec. 29, 2012
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Garmin Ltd. and Subsidiaries

(In thousands)

 

          Additions              
    Balance at     Charged to     Charged to           Balance at  
    Beginning of     Costs and     Other           End of  
Description   Period     Expenses     Accounts     Deductions     Period  
Year Ended December 29, 2012:                                        
Deducted from asset accounts                                        
Allowance for doubtful accounts   $ 30,224     $ 4,678       -     $ (4,306 )   $ 30,596  
Inventory reserve     29,370       11,003       -       (14,268 )     26,105  
Deferred tax asset valuation allowance     37,173       14,595       -       (375 )     51,393  
Total   $ 96,767     $ 30,276       -     $ (18,949 )   $ 108,094  
                                         
Year Ended December 31, 2011:                                        
Deducted from asset accounts                                        
Allowance for doubtful accounts   $ 31,822     $ 2,317       -     $ (3,915 )   $ 30,224  
Inventory reserve     37,720       16,047       -       (24,397 )     29,370  
Deferred tax asset valuation allowance (1)     51,352       7,902       -       (22,081 )     37,173  
Total   $ 120,894     $ 26,266       -     $ (50,393 )   $ 96,767  
                                         
Year Ended December 25, 2010:                                        
Deducted from asset accounts                                        
Allowance for doubtful accounts   $ 36,673     $ (4,476 )     -     $ (375 )   $ 31,822  
Inventory reserve     38,898       5,753       -       (6,931 )     37,720  
Deferred tax asset valuation allowance     35,617       15,735       -       0       51,352  
Total   $ 111,188     $ 17,012       -     $ (7,306 )   $ 120,894  

 

(1) Note that $14,994 of the decrease in the deferred tax asset valuation is due to reducing the amount of Taiwan surtax credits to the correct amount available for use in future years, all such credits of which are and have been fully reserved.
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 29, 2012
Basis of Presentation and Principles of Consolidation
Fiscal Year
Foreign Currency
Earnings Per Share
Cash and Cash Equivalents
Trade Accounts Receivable
Inventories
Property and Equipment
Long-Lived Assets
Dividends
Intangible Assets
Marketable Securities
Income Taxes
Use of Estimates
Concentration of Credit Risk
Revenue Recognition
Deferred Revenues and Costs
Shipping and Handling Costs
Product Warranty
Sales Programs
Advertising Costs
Research and Development
Customer Service and Technical Support
Software Development Costs
Accounting for Stock-Based Compensation
Reclassification
Recently Issued Accounting Pronouncements

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The accompanying consolidated financial statements reflect the accounts of Garmin Ltd. and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated.

Fiscal Year

 

The Company has adopted a 52–53-week period ending on the last Saturday of the calendar year. Due to the fact that there are not exactly 52 weeks in a calendar year and there is slightly more than one additional day per year (not including the effects of leap year) in each calendar year as compared to a 52-week fiscal year, the Company will have a fiscal year comprising 53 weeks in certain fiscal years, as determined by when the last Saturday of the calendar year occurs.

 

In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs, and related financial activity. Therefore, the financial results of those fiscal years, and the associated 14-week fourth quarter, will not be entirely comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13 weeks. Fiscal years 2012 and 2010 included 52 weeks while fiscal year 2011 included 53 weeks.

Foreign Currency

 

Many Garmin Ltd. subsidiaries utilize currencies other than the United States Dollar (USD) as their functional currency. As required by the Foreign Currency Matters topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the financial statements of these subsidiaries for all periods presented have been translated into USD, the functional currency of Garmin Ltd., and the reporting currency herein, for purposes of consolidation at rates prevailing during the year for sales, costs, and expenses and at end-of-year rates for all assets and liabilities. The effect of this translation is recorded in a separate component of stockholders’ equity. Cumulative translation adjustments of $128,972 and $76,456 as of December 29, 2012 and December 31, 2011, respectively, have been included in accumulated other comprehensive income in the accompanying consolidated balance sheets.

  

 

Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date. Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date. All differences are recorded in results of operations and amounted to exchange losses of $20,022, $12,100, and $88,377 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. The loss in fiscal 2012 was due primarily to the weakening of the USD against the Taiwan Dollar and was partially offset by the USD weakening against the Euro and the British Pound Sterling. The loss in fiscal 2011 was primarily the result of the slight strengthening of the USD against the Euro and the slight weakening of the USD against the Taiwan Dollar. The loss in fiscal 2010 was primarily the result of the strengthening of the USD against the Euro and the British Pound Sterling and the weakening of the USD against the Taiwan Dollar.

Earnings Per Share

 

Basic earnings per share amounts are computed based on the weighted-average number of common shares outstanding. For purposes of diluted earnings per share, the number of shares that would be issued from the exercise of dilutive stock options has been reduced by the number of shares which could have been purchased from the proceeds of the exercise at the average market price of the Company’s stock during the period the options were outstanding. See Note 10.

Cash and Cash Equivalents

 

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, operating accounts, money market funds, and securities with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates fair value, given the short maturity of those instruments.

Trade Accounts Receivable

 

The Company sells its products to retailers, wholesalers, and other customers and extends credit based on its evaluation of the customer’s financial condition.  Potential losses on receivables are dependent on each individual customer’s financial condition. The Company carries its trade accounts receivable at net realizable value. Typically, its accounts receivable are collected within 80 days and do not bear interest. The Company monitors its exposure to losses on receivables and maintains allowances for potential losses or adjustments. The Company determines these allowances by (1) evaluating the aging of its receivables and (2) reviewing its high-risk customers. Past due receivable balances are written off when its internal collection efforts have been unsuccessful in collecting the amount due. In 2011, Garmin purchased credit insurance to provide security against large losses.

Inventories

 

Inventories are stated at the lower of cost or market with cost being determined on a first-in, first-out (FIFO) basis. Inventories consisted of the following:

 

    December 29, 2012     December 31, 2011  
             
Raw Materials   $ 119,142     $ 129,211  
Work-in-process     53,656       52,176  
Finished goods     243,238       245,724  
Inventory Reserves     (26,105 )     (29,370 )
Inventory, net of reserves   $ 389,931     $ 397,741  

Property and Equipment

 

Property and equipment are recorded at cost and depreciated using the straight-line method over the following estimated useful lives:

 

Buildings and improvements     39  
Office furniture and equipment     3-5  
Manufacturing and engineering equipment     5  
Vehicles     5  

Long-Lived Assets

 

As required by the Property, Plant and Equipment topic of the FASB ASC, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That assessment is based on the carrying amount of the asset at the date it is tested for recoverability. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

 

The Intangibles – Goodwill and Other topic of the FASB ASC requires that goodwill and intangible assets with indefinite useful lives should not be amortized but rather be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired. The Company did not recognize any goodwill or intangible asset impairment charges in 2012, 2011, or 2010.  The accounting guidance also requires that intangible assets with finite lives be amortized over their estimated useful lives and reviewed for impairment. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from 3 to 10 years.

Dividends

 

On June 27, 2010, the Company completed the redomestication of the place of its incorporation from the Cayman Islands to Switzerland. Under Swiss corporate law, dividends must be approved by shareholders at the general meeting of our shareholders.

 

On June 1, 2012, the shareholders approved a dividend of $1.80 per share (of which, $0.90 was paid in the Company's 2012 fiscal year) payable in four installments as follows: $0.45 on June 29, 2012 to shareholders of record on June 15, 2012, $0.45 on September 28, 2012 to shareholders of record on September 14, 2012, $0.45 on December 31, 2012 to shareholders of record on December 14, 2012 and $0.45 on March 29, 2013 to shareholders of record on March 15, 2013. The Company paid dividends in 2012 in the amount of $253,386. Both the dividend paid and the remaining dividend payable have been reported as a reduction of retained earnings.

 

On June 3, 2011, the shareholders approved a dividend of $2.00 per share (of which, $1.60 was paid in the Company's 2011 fiscal year) payable in four installments as follows: $0.80 on June 30, 2011 to shareholders of record on June 15, 2011, $0.40 on September 30, 2011 to shareholders of record on September 15, 2011, $0.40 on December 30, 2011 to shareholders of record on December 15, 2011 and $0.40 on March 30, 2012 to shareholders of record on March 15, 2012. The Company paid dividends in 2011 in the amount of $310,763. The dividends were reported as a reduction of retained earnings.

 

On March 16, 2010 the Board of Directors declared a dividend of $1.50 per share to be paid on April 30, 2010 to shareholders of record on April 15, 2010. The Company paid out a dividend in the amount of $298,853. The dividend was reported as a reduction of retained earnings.

  

Approximately $254,986 and $239,470 of retained earnings are indefinitely restricted from distribution to stockholders pursuant to the laws of Taiwan at December 29, 2012 and December 31, 2011, respectively.

Intangible Assets

 

At December 29, 2012 and December 31, 2011, the Company had patents, customer related intangibles and other identifiable finite-lived intangible assets recorded at a cost of $181,918 and $173,819, respectively. Identifiable, finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis over three to ten years. Accumulated amortization was $125,380 and $106,648 at December 29, 2012 and December 31, 2011 respectively. Amortization expense on these intangible assets was $21,437, $24,831, and $28,734 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively. In the next five years, the amortization expense is estimated to be $21,239, $10,960, $8,311, $6,269, and $2,754, respectively.

 

The Company’s excess purchase cost over fair value of net assets acquired (goodwill) was $176,059 at December 29, 2012 and $179,475 at December 31, 2011.

 

    December 29,     December 31,  
    2012     2011  
Goodwill balance at beginning of year   $ 179,475     $ 136,548  
Acquisitions     3,470       46,481  
Finalization of purchase price allocations and effect of foreign currency translation     (6,886 )     (3,554 )
Goodwill balance at end of year   $ 176,059     $ 179,475  

 

The decrease in net identifiable intangible assets is principally related to amortization, partially offset by acquisitions completed in 2012 and other purchases of intangible assets.

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 were considered available-for-sale at December 29, 2012. 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 29, 2012 and December 31, 2011, cumulative unrealized gains/(losses) of $9,582 and $10,737, respectively, were reported in accumulated other comprehensive income, 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 the FASB ASC topic 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 based on the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income taxes of $295,446, $277,724, and $257,727 at December 29, 2012, December 31, 2011, and December 25, 2010, respectively, have not been accrued by the Company for the unremitted earnings of several of its foreign subsidiaries because such earnings are intended to be reinvested in the subsidiaries indefinitely.

 

 

The Company adopted the applicable guidance included in the FASB ASC topic Income Taxes related to accounting for uncertainty in income taxes on December 31, 2006, the beginning of fiscal year 2007.   The total amount of unrecognized tax benefits as of December 29, 2012 was $181,754 including interest of $7,680.  A reconciliation of the beginning and ending amount of unrecognized tax benefits for years ended December 29, 2012, December 31, 2011, and December 25, 2010 is as follows:

 

    December 29,     December 31,     December 25,  
    2012     2011     2010  
Balance at beginning of year   $ 161,904     $ 153,621     $ 255,748  
Additions based on tax positions related to prior years     2,232       5,568       11,443  
Reductions based on tax positions related to prior years     (3,719 )     (6,885 )     (10,392 )
Additions based on tax positions related to current period     31,351       29,210       43,202  
Reductions related to settlements with tax authorities     (665 )     -       (122,314 )
Expiration of statute of limitations     (9,349 )     (19,610 )     (24,066 )
Balance at end of year   $ 181,754     $ 161,904     $ 153,621  

 

The December 29, 2012 balance of $181,754 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. 

 

Accounting guidance 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.  The entire $181,754, $161,904, and $153,621 are required to be classified as non-current at December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

 

Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense.  At December 29, 2012, December 31, 2011, and December 25, 2010, the Company had accrued approximately $7,680, $10,850, and $9,580, respectively, for interest.  The interest component of the reserve increased (decreased) income tax expense for the years ending December 29, 2012, December 31, 2011, and December 25, 2010 by ($3,719), $5,568, and ($10,580), respectively. The Company had no amounts accrued for penalties as the nature of the unrecognized tax benefits, if recognized, would not warrant the imposition of penalties.

 

The Company files income tax returns in Switzerland and U.S. federal jurisdictions, as well as various state, local and foreign jurisdictions.  The Company is no longer subject to U.S. federal, state, or local tax examinations by tax authorities for years 2008 and prior.  The Company is no longer subject to Taiwan income tax examinations by tax authorities for years 2006 and prior.  The Company is no longer subject to United Kingdom tax examinations by tax authorities for years 2009 and prior.

 

The Company recognized a reduction of income tax expense of $9,349, $19,610, and $24,066 in fiscal years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively, to reflect the expiration of statutes of limitations in various jurisdictions.

 

The Company believes that it is reasonably possible that approximately $78,372 of its reserves for certain unrecognized tax benefits will decrease within the next 12 months as the result of the expiration of statutes of limitations. This potential decrease in unrecognized tax benefits would impact the Company’s effective tax rate within the next 12 months.

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Concentration of Credit Risk

 

The Company grants credit to certain customers who meet the Company’s pre-established credit requirements. Generally, the Company does not require security when trade credit is granted to customers. Credit losses are provided for in the Company’s consolidated financial statements and typically have been within management’s expectations. Certain customers are allowed extended terms consistent with normal industry practice. Most of these extended terms can be classified as either relating to seasonal sales variations or to the timing of new product releases by the Company.

 

The Company’s top ten customers have contributed between 26% and 34% of net sales since 2010. None of the Company’s customers accounted for more than 10% of consolidated net sales in the years ended December 29, 2012, December 31, 2011, and December 25, 2010. Beginning in 2011, the Company has maintained trade credit insurance to provide security against large losses.

Revenue Recognition

 

Garmin recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable.  For the large majority of Garmin’s sales, these criteria are met once product has shipped and title and risk of loss have transferred to the customer.  The Company recognizes revenue from the sale of hardware products and software bundled with hardware that is essential to the functionality of the hardware in accordance with general revenue recognition accounting guidance. The Company recognizes revenue in accordance with industry specific software accounting guidance for standalone sales of software products and sales of software bundled with hardware not essential to the functionality of the hardware.  The Company generally does not offer specified or unspecified upgrade rights to its customers in connection with software sales.

 

Garmin introduced nüMaps Lifetime™ in January 2009, which is a single fee program that, subject to the program’s terms and conditions, enables customers to download the latest map and point of interest information every quarter for the useful life of their PND.  The revenue and associated cost of royalties for sales of nüMaps Lifetime™ products are deferred at the time of sale and recognized ratably on a straight-line basis over the estimated 36-month life of the products. With the acquisition of Navigon AG in 2011, products marketed under the Navigon brand have a FreshMaps program that enables customers to download the latest map and point of interest information for two years. The revenue and associated cost of royalties for sales of FreshMaps products are deferred at the time of sale and recognized ratably on a straight-line basis over the two year period.

 

For multiple element arrangements that include tangible products that contain software that is essential to the tangible product’s functionality and undelivered software elements that relate to the tangible product’s essential software, the Company allocates revenue to all deliverables based on their relative selling prices. In such circumstances, the accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“ESP”).  VSOE generally exists only when the Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. In addition to the products listed below, the Company has offered certain other products including mobile applications, aviation subscriptions and extended warranties that involve multiple-element arrangements that are immaterial.

  

In 2010, Garmin began offering PNDs with lifetime map updates (LMUs) bundled in the original purchase price. Similar to nüMaps Lifetime™, LMUs enable customers to download the latest map and point of interest information every quarter for the useful life of their PND. In addition, Garmin offers PNDs with premium traffic service bundled in the original purchase price in the European market. The Company has identified two deliverables contained in arrangements involving the sale of PNDs which include either the LMU or premium traffic service. The first deliverable is the hardware along with the software essential to the functionality of the hardware device delivered at the time of sale. The second deliverable is either the LMU or premium traffic service. The Company has allocated revenue between these two deliverables using the relative selling price method. Amounts allocated to the delivered hardware and the related essential software are recognized at the time of sale provided the other conditions for revenue recognition have been met.  The revenue and associated cost of royalties allocated to the LMU or the subscription for premium traffic service are deferred and recognized on a straight-line basis over the estimated 36-month life of the products.

 

 

Prior to the third quarter of fiscal 2011, Garmin determined its estimate of selling price using the dealer/distributor price for nüMaps Lifetime or premium traffic subscriptions sold separately, and the prices for products bundled with and without the LMU and premium traffic service when comparable models were available, as inputs to the relative selling price method in a manner similar to VSOE. The estimated selling price determined in this manner was used to defer revenues for all products bundled with the LMU and premium traffic service, as the number of bundled units sold as a percentage of total units sold was less significant and other indicators of selling price were not readily available.

 

During 2011, sales of products bundled with LMUs and premium traffic service increased significantly as a percentage of total product sales. Concurrently, market conditions caused decreases in the ASP and margins of comparable models year over year, new bundled products were introduced at lower ASPs, and the difference in pricing of bundled units and comparable unbundled models decreased considerably. Due to these changes, the Company determined it was appropriate to change its estimate of the per unit revenue and cost deferrals during the third quarter of 2011.

 

As the sales of nüMaps Lifetime and premium traffic subscriptions as a percentage of total unit sales or in the aggregate decreased significantly in mid-2011, the Company determined that the previous estimate of selling price based on more limited stand-alone sales of nüMaps Lifetime or premium traffic was no longer a sole determinant of its value as determined under VSOE, and that third party evidence of selling price was not available. Management determined that the price differential between bundled and unbundled products and the royalty cost of the LMU or premium traffic subscription plus an approximate margin were both additional indicators of estimated selling price. These estimates are also reflective of how the Company establishes product pricing based in part on customer perception of value of the added LMU or premium traffic service capability. As such, beginning in the third quarter of 2011, the Company changed its estimate of selling price of the undelivered element to be based on the relative selling price method using a weighted average of the stand-alone sales price, the price differential between bundled and unbundled units, and the royalty or subscription cost plus a normal margin.

 

The impact in 2011 of the change in estimate for lifetime map updates and premium traffic service, as described above, was an increase in revenue, gross profit, net income, basic net income per share, and diluted net income per share of $77.8 million, $66.5 million, $59.3 million, $0.31, and $0.30, respectively.

 

Garmin records estimated reductions to revenue for customer sales programs, returns and incentive offerings including rebates, price protection (product discounts offered to retailers to assist in clearing older products from their inventories in advance of new product releases), promotions and other volume-based incentives. The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions. Changes in these estimates could negatively affect Garmin’s operating results. These incentives are reviewed periodically and, with the exceptions of price protection and certain other promotions, are accrued for on a percentage of sales basis. If market conditions were to decline, Garmin may take actions to increase customer incentive offerings possibly resulting in an incremental reduction of revenue at the time the incentive is offered.

 

The Company records revenue net of sales tax, trade discounts and customer returns. The reductions to revenue for expected future product returns are based on the Company’s historical experience.

Deferred Revenues and Costs

 

At December 29, 2012 and December 31, 2011, the Company had deferred revenues totaling $445,422 and $377,119, respectively, and related deferred costs totaling $96,307 and $80,856, respectively.

 

The deferred revenues and costs are recognized over their estimated economic lives of two to three years on a straight-line basis. In the next three years, the gross margin recognition of deferred revenue and cost for the currently deferred amounts is estimated to be $198,427, $113,528, and $37,160, respectively.

Shipping and Handling Costs

 

Shipping and handling costs are included in cost of goods sold in the accompanying consolidated financial statements.

Product Warranty

 

The Company provides for estimated warranty costs at the time of sale. The warranty period for most products is one year to two years from date of shipment while certain aviation products have a warranty period of two years from the date of installation.

Sales Programs

 

The Company provides certain monthly and quarterly incentives for its dealers and distributors based on various factors including dealer purchasing volume and growth. Additionally, from time to time, the Company provides rebates to end users on certain products. Estimated rebates and incentives payable to dealers and distributors are regularly reviewed and recorded as accrued expenses on a monthly basis. In addition, the Company provides dealers and distributors with product discounts to assist these customers in clearing older products from their inventories in advance of new product releases. Each discount is tied to a specific product and can be applied to all customers who have purchased the product or a special discount may be agreed to on an individual customer basis. These rebates, incentives, and discounts are recorded as reductions to net sales in the accompanying consolidated statements of income in the period the Company has sold the product.

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising expense amounted to approximately $138,757, $145,024, and $144,613 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

Research and Development

 

A majority of the Company’s research and development is performed in the United States. Research and development costs, which are expensed as incurred, amounted to approximately $325,773, $298,584, and $277,261 for the years ended December 29, 2012, December 31, 2011, and December 25, 2010, respectively.

Customer Service and Technical Support

 

Customer service and technical support costs are included as selling, general and administrative expenses in the accompanying consolidated statements of income. Customer service and technical support costs include costs associated with performing order processing, answering customer inquiries by telephone and through Web sites, e-mail and other electronic means, and providing free technical support assistance to customers. The technical support is provided within one year after the associated revenue is recognized. The related cost of providing this free support is not material.

Software Development Costs

 

The FASB ASC topic entitled Software requires companies to expense software development costs as they incur them until technological feasibility has been established, at which time those costs are capitalized until the product is available for general release to customers. Capitalized software development costs are not significant as the time elapsed from working model to release is typically short. As required by the Research and Development topic of the FASB ASC, costs incurred to enhance our existing products or after the general release of the service using the product are expensed in the period they are incurred and included in research and development costs in the accompanying consolidated statements of income.

Accounting for Stock-Based Compensation

 

      The Company currently sponsors four stock based employee compensation plans. The FASB ASC topic entitled Compensation – Stock Compensation requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors including employee stock options and restricted stock based on estimated fair values. See Note 9.

 

       Accounting guidance requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as stock-based compensation expense on a straight-line basis over the requisite service period in the Company’s consolidated financial statements.

 

      As stock-based compensation expenses recognized in the accompanying consolidated statements of income are based on awards ultimately expected to vest, they have been reduced for estimated forfeitures. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience and management’s estimates.

Reclassification

 

The consolidated balance sheet for the year ended December 31, 2011 reflects a reclassification decreasing noncurrent deferred income tax assets by $18.5 million with increases of $10.7 million to current deferred income tax assets and $7.8 million to prepaid expenses and other current assets, to conform to the current year presentation. This reclassification had no effect on net income.

Recently Issued Accounting Pronouncements

 

In May 2011, the FASB issued an amendment to the accounting standards related to fair value measurements and disclosure requirements that result in a consistent definition of fair value and common requirements for the measurement and disclosure of fair value between U.S. GAAP and International Financial Reporting Standards. This standard provides certain amendments to the existing guidance on the use and application of fair value measurements and maintains a definition of fair value that is based on the notion of exit price. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. The Company adopted this guidance in the current year with no material impact on the financial statements.

 

In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. The guidance allows two presentation alternatives; present items in net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of accounting standards. The Company adopted this guidance in the current year and has chosen to present two separate, but consecutive, statements of net income and other comprehensive income.

 

 

In September 2011, the FASB issued an amendment to ASC 350, Intangibles—Goodwill and Other, which simplifies how entities test goodwill for impairment. Under the amendment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads the entity to determine that it is more likely than not that its fair value is less than its carrying amount. If after assessing the totality of events or circumstances, an entity determines that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then the two-step impairment test for goodwill is unnecessary. If the entity concludes otherwise, then it is required to test goodwill for impairment under the two-step process as described under paragraphs 350-20-35-4 of the ASC. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any, as described in paragraph 350-20-35-9 of the ASC. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company adopted this guidance in the current year with no material impact on the financial statements.

 

In July 2012, the FASB issued Accounting Standards Update (ASU) No. 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment” (ASU 2012-02), which is included in ASC Topic 350 (Intangibles—Goodwill and Other). ASU 2012-02 provides an option for companies to use a qualitative approach to test indefinite-lived intangible assets for impairment if certain conditions are met. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 (early adoption is permitted). The implementation of the amended accounting guidance is not expected to have a material impact on the Company’s financial statements.

Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 29, 2012
Components of Inventories
Property, Plant and Equipment
Change in Carrying Amount of Goodwill
Summary of Income Tax Contingencies

Inventories consisted of the following:

 

    December 29, 2012     December 31, 2011  
             
Raw Materials   $ 119,142     $ 129,211  
Work-in-process     53,656       52,176  
Finished goods     243,238       245,724  
Inventory Reserves     (26,105 )     (29,370 )
Inventory, net of reserves   $ 389,931     $ 397,741  

Property and equipment are recorded at cost and depreciated using the straight-line method over the following estimated useful lives:

 

Buildings and improvements     39  
Office furniture and equipment     3-5  
Manufacturing and engineering equipment     5  
Vehicles     5  
    December 29,     December 31,  
    2012     2011  
Goodwill balance at beginning of year   $ 179,475     $ 136,548  
Acquisitions     3,470       46,481  
Finalization of purchase price allocations and effect of foreign currency translation     (6,886 )     (3,554 )
Goodwill balance at end of year   $ 176,059     $ 179,475  

A reconciliation of the beginning and ending amount of unrecognized tax benefits for years ended December 29, 2012, December 31, 2011, and December 25, 2010 is as follows:

 

    December 29,     December 31,     December 25,  
    2012     2011     2010  
Balance at beginning of year   $ 161,904     $ 153,621     $ 255,748  
Additions based on tax positions related to prior years     2,232       5,568       11,443  
Reductions based on tax positions related to prior years     (3,719 )     (6,885 )     (10,392 )
Additions based on tax positions related to current period     31,351       29,210       43,202  
Reductions related to settlements with tax authorities     (665 )     -       (122,314 )
Expiration of statute of limitations     (9,349 )     (19,610 )     (24,066 )
Balance at end of year   $ 181,754     $ 161,904     $ 153,621  
Marketable Securities (Tables)
12 Months Ended
Dec. 29, 2012
Available For Sale Securities Measured At Estimated Fair Value On Recurring Basis
Reconciliation of Beginning and Ending Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs
Marketable Securities Classified as Available-For-Sale Securities
Amortized Cost and Estimated Fair Value of Marketable Securities, by Contractual Maturity

Available for sale securities measured at estimated fair value on a recurring basis are summarized below:

 

    Fair Value Measurements as  
    of December 29, 2012  
                         
Description   Total     Level 1     Level 2     Level 3  
                         
Mortgage-backed securities   $ 650,895     $ -     $ 650,895     $ -  
Obligations of states and political subdivisions     499,857       -       499,857       -  
Corporate bonds     399,941       -       399,941       -  
Common stocks     22,982       22,982       -       -  
Other     67,720       -       67,720       -  
Total   $ 1,641,395     $ 22,982     $ 1,618,413     $ -  

  

    Fair Value Measurements as  
    of December 31, 2011  
                         
Description   Total     Level 1     Level 2     Level 3  
                         
Mortgage-backed securities   $ 638,626     $ -     $ 638,626     $ -  
Obligations of states and political subdivisions     359,563       -       359,563       -  
Corporate bonds     132,044       -       132,044       -  
Common stocks     21,104       21,104       -       -  
Other     56,818       34,090       22,728       -  
Total   $ 1,208,155     $ 55,194     $ 1,152,961     $ -  

For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, a reconciliation of the beginning and ending balances, separately for each major category of assets, is required. There were no such assets or liabilities held during 2012. A reconciliation for 2011 is as follows:

 

    Fair Value Measurements  
    Using Significant Unobservable  
    Inputs (Level 3)  
    Year Ended  
    December 31, 2011  
       
Beginning balance of auction rate securities   $ 20,562  
Total unrealized gains included in other comprehensive income     5,038  
Sales out of Level 3     (25,600 )
Ending balance of auction rate securities   $ -  

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at December 29, 2012:

 

    Amortized Cost     Gross
Unrealized Gains
    Gross
Unrealized
Losses
    Other Than
Temporary
Impairment
    Estimated Fair
Value (Net Carrying
Amount)
 
Mortgage-backed securities   $ 644,388     $ 8,894     $ (2,387 )   $ -     $ 650,895  
Obligations of states and political subdivisions     499,241       2,345       (1,729 )     -       499,857  
U.S. corporate bonds     400,310       3,138       (2,233 )     (1,274 )     399,941  
Common stocks     21,113       2,392       (523 )     -       22,982  
Other     67,181       551       (12 )     -       67,720  
Total   $ 1,632,233     $ 17,320     $ (6,884 )   $ (1,274 )   $ 1,641,395  

 

The following is a summary of the Company’s marketable securities classified as available-for-sale securities at December 31, 2011:

 

                Gross     Other Than     Estimated Fair  
          Gross     Unrealized     Temporary     Value (Net Carrying  
    Amortized Cost     Unrealized Gains     Losses     Impairment     Amount)  
Mortgage-backed securities   $ 628,747     $ 10,965     $ (1,086 )   $ -     $ 638,626  
Obligations of states and political subdivisions     358,314       2,339       (1,090 )     -       359,563  
U.S. corporate bonds     134,763       815       (2,260 )     (1,274 )     132,044  
Common stocks     19,846       1,463       (205 )             21,104  
Other     56,214       621       (17 )     -       56,818  
Total   $ 1,197,884     $ 16,203     $ (4,658 )   $ (1,274 )   $ 1,208,155  

The amortized cost and estimated fair value of marketable securities at December 29, 2012, 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 (2013)   $ 153,420     $ 153,083  
Due after one year through five years (2014-2018)     616,236       617,389  
Due after five years through ten years (2019-2023)     231,016       231,883  
Due after ten years (2024 and thereafter)     575,360       580,493  
Other (No contractual maturity dates)     56,201       58,547  
    $ 1,632,233     $ 1,641,395  
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 29, 2012
Schedule of Future Minimum Rental Payments for Operating Leases
Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments are as follows:

 

Year   Amount  
       
2013   $ 14,340  
2014     12,090  
2015     9,029  
2016     6,659  
2017     3,337  
Thereafter     4,292  
Total   $ 49,747  
Income Taxes (Tables)
12 Months Ended
Dec. 29, 2012
Schedule of Components of Income Tax Expense (Benefit)
Schedule of Effective Income Tax Rate Reconciliation
Schedule of Deferred Tax Assets and Liabilities

The Company’s income tax provision (benefit) consists of the following:

 

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
Federal:                        
Current   $ 83,185     $ 79,305     $ (46,674 )
Deferred     (22,988 )     (25,763 )     284  
      60,197       53,542       (46,390 )
State:                        
Current     8,532       9,087       3,929  
Deferred     (5,327 )     (4,490 )     (257 )
      3,205       4,597       3,672  
Foreign:                        
Current     22,296       22,363       31,109  
Deferred     (3,573 )     (17,237 )     4,278  
      18,723       5,126       35,387  
Total   $ 82,125     $ 63,265     $ (7,331 )

The sources and tax effects of the differences, including the impact of establishing tax contingency accruals, are as follows:

 

    December 29,     December 31,     December 25,  
    2012     2011     2010  
Federal income tax expense at U.S. statutory rate   $ 218,585     $ 204,456     $ 202,045  
State income tax expense, net of federal tax effect     2,083       2,988       2,482  
Foreign tax rate differential     (141,456 )     (148,058 )     (115,633 )
Taiwan tax holiday benefit     (6,418 )     (13,127 )     (13,536 )
Net change in uncertain tax postions     19,850       8,283       (102,100 )
Other foreign taxes less incentives and credits     (2,287 )     9,658       26,707  
U.S. federal domestic production activities deduction     (6,276 )     (2,415 )     (1,691 )
U.S. federal research and development credit     -       (6,111 )     (5,757 )
Other, net     (1,956 )     7,591       152  
Income tax expense   $ 82,125     $ 63,265     $ (7,331 )

Significant components of the Company’s deferred tax assets and liabilities are as follows:

 

    December 29,     December 31,  
    2012     2011  
Deferred tax assets:                
Product warranty accruals   $ 2,522     $ 2,094  
Allowance for doubtful accounts     11,026       12,282  
Inventory reserves     6,162       6,755  
Sales program allowances     5,680       5,591  
Reserve for sales returns     3,442       2,240  
Other accruals     8,774       5,359  
Stock option compensation     51,241       48,104  
Tax credit carryforwards, net     46,577       33,379  
Amortization     25,841       26,913  
Deferred revenue     56,293       36,041  
Net operating losses of subsidiaries     15,771       17,780  
Unrealized investment gain     2,459       -  
Other     1,334       4,164  
Valuation allowance related to loss carryforward and tax credits     (51,393 )     (37,173 )
      185,729       163,529  
Deferred tax liabilities:                
Depreciation     16,286       17,600  
Prepaid expenses     2,886       3,328  
Book basis in excess of tax basis for acquired entities     4,907       8,915  
Unrealized investment loss     -       910  
Other     1,744       1,202  
      25,823       31,955  
Net deferred tax assets   $ 159,906     $ 131,574  
Fair Value of Financial Instruments (Tables)
12 Months Ended
Dec. 29, 2012
Fair Value, by Balance Sheet Grouping
Fair Value, by Balance Sheet Grouping

The carrying amounts and fair values of the Company’s financial instruments are as follows:

 

    December 29, 2012     December 31, 2011  
    Carrying     Fair     Carrying     Fair  
    Amount     Value     Amount     Value  
                         
Cash and cash equivalents   $ 1,231,180     $ 1,231,180     $ 1,287,160     $ 1,287,160  
Restricted cash     836       836       771       771  
Marketable securities     1,641,395       1,641,395       1,208,155       1,208,155  
Segment Information (Tables)
12 Months Ended
Dec. 29, 2012
Revenues, Interest Income and Interest Expense, and Income before Income Taxes for Reportable Segments
Net Sales, Long-Lived Assets (Property and Equipment), and Net Assets by Geographic Area

Revenues, interest income and interest expense, and income before income taxes for each of the Company’s reportable segments are presented below:

 

    Fiscal Year Ended December 29, 2012  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 291,564     $ 401,747     $ 321,788     $ 208,136     $ 1,492,440     $ 2,715,675  
Allocated interest income     1,546       3,951       3,799       2,838       22,974       35,108  
Allocated interest expense     -       -       -       -       -       -  
Income before income taxes     75,177       167,734       114,274       35,725       231,618       624,528  

 

    Fiscal Year Ended December 31, 2011  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 284,855     $ 363,223     $ 298,163     $ 221,730     $ 1,590,598     $ 2,758,569  
Allocated interest income     1,250       4,496       4,342       2,934       19,790       32,812  
Allocated interest expense     -       -       -       -       -       -  
Income before income taxes     73,226       171,245       107,881       60,092       171,717       584,161  

 

    Fiscal Year Ended December 25, 2010  
                            Auto/        
    Aviation     Outdoor     Fitness     Marine     Mobile     Total  
                                     
Net sales to external customers   $ 262,520     $ 319,119     $ 240,473     $ 198,860     $ 1,668,939     $ 2,689,911  
Allocated interest income     1,251       2,347       1,532       1,624       18,225       24,979  
Allocated interest expense     (122 )     (148 )     (111 )     (92 )     (773 )     (1,246 )
Income before income taxes     71,482       150,973       86,499       62,431       205,887       577,272  

Net sales, long-lived assets (property and equipment), and net assets by geographic area are as shown below for the years ended December 29, 2012, December 31, 2011, and December 25, 2010. Note that APAC refers to the Asia Pacific region, and EMEA includes Europe, the Middle East and Africa.

 

    Americas     APAC     EMEA     Total  
December 29, 2012                                
Net sales to external customers   $ 1,513,457     $ 256,882     $ 945,336     $ 2,715,675  
Long lived assets     222,310       134,257       53,184       409,751  
Net assets (1)     1,262,498       2,028,984       240,314       3,531,796  
                                 
December 31, 2011                                
Net sales to external customers   $ 1,527,508     $ 248,057     $ 983,004     $ 2,758,569  
Long lived assets     225,505       143,913       47,687       417,105  
Net assets (1)     1,155,653       1,915,284       185,644       3,256,581  
                                 
December 25, 2010                                
Net sales to external customers   $ 1,646,590     $ 220,478     $ 822,843     $ 2,689,911  
Long lived assets     231,569       146,859       49,377       427,805  
Net assets (1)     1,149,826       1,719,769       179,967       3,049,562  

 

(1) Americas and APAC net assets are primarily held in the United States and Taiwan, respectively.

Stock Compensation Plans (Tables)
12 Months Ended
Dec. 29, 2012
Stock-based Compensation Activity, Stock Options and SARs
Stock-based Compensation related information, Stock Options and SARs
Stock-based Compensation Activity, Restricted Stock Units
Weighted-Average Assumptions Used for Fair Value of Options Estimated Using Black-Scholes Option Pricing Model

A summary of the Company’s stock-based compensation activity and related information under the 2011 Directors Plan, the 2005 Plan, the 2000 Plan and the 2000 Directors Plan for the years ended December 29, 2012, December 31, 2011, and December 25, 2010 is provided below:

  

    Stock Options and SARs  
    Weighted-Average        
    Exercise Price     Number of Shares  
          (In Thousands)  
             
Outstanding at December 26, 2009   $ 48.28       10,109  
Granted   $ 33.44       24  
Exercised   $ 15.52       (826 )
Forfeited/Expired   $ 62.57       (221 )
Outstanding at December 25, 2010   $ 50.87       9,086  
Granted   $ 39.71       42  
Exercised   $ 21.02       (764 )
Forfeited/Expired   $ 64.63       (291 )
Outstanding at December 31, 2011   $ 53.14       8,073  
Granted   $ 42.16       61  
Exercised   $ 24.20       (794 )
Forfeited/Expired   $ 66.45       (208 )
Outstanding at December 29, 2012   $ 55.88       7,132  
Exercisable at December 29, 2012   $ 56.29       6,786  
Expected to vest after December 29, 2012   $ 48.04       337  
Stock Options and SARs as of December 29, 2012  
Exercise     Awards     Remaining     Awards  
Price     Outstanding     Life (Years)     Exercisable  
      (In Thousands)           (In Thousands)  
                     
  $8.00 -$20.00       437       1.73       437  
  $20.01 - $40.00       1,155       2.69       1,113  
  $40.01 - $60.00       3,177       4.47       2,873  
  $60.01 - $80.00       1,150       4.39       1,150  
  $80.01 - $100.00       2       4.95       2  
  $100.01 - $120.00       1,208       4.88       1,208  
  $120.01 - $140.00       3       4.75       3  
          7,132       4.05       6,786  
    Restricted Stock Units  
    Weighted-Average        
    Grant Date Fair Value     Number of Shares  
          (In Thousands)  
             
Outstanding at December 26, 2009   $ 23.47       1,316  
Granted   $ 30.29       515  
Released/Vested   $ 23.02       (291 )
Cancelled   $ 23.32       (37 )
Outstanding at December 25, 2010   $ 25.90       1,503  
Granted   $ 37.28       422  
Released/Vested   $ 37.73       (366 )
Cancelled   $ 25.89       (81 )
Outstanding at December 31, 2011   $ 29.40       1,478  
Granted   $ 39.41       506  
Released/Vested   $ 41.59       (435 )
Cancelled   $ 26.11       (89 )
Outstanding at December 29, 2012   $ 30.06       1,460  

The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2012, 2011, and 2010:

 

    2012     2011     2010  
Weighted average grant date fair value of options granted   $ 9.98     $ 10.53     $ 8.99  
Expected volatility     0.3906       0.4078       0.4178  
Dividend yield     4.50 %     4.02 %     4.94 %
Expected life of options in years     6.6       6.5       6.3  
Risk-free interest rate     1.0 %     1.2 %     2.5 %
Earnings Per Share (Tables)
12 Months Ended
Dec. 29, 2012
Computation of Basic and Diluted Net Income Per Share
Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

  

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
Numerator (in thousands):                        
Numerator for basic and diluted net income per share - net income   $ 542,403     $ 520,896     $ 584,603  
                         
Denominator (in thousands):                        
Denominator for basic net income per share - weighted-average common shares     194,909       194,105       196,979  
Effect of dilutive securities - employee stock-based awards     1,304       789       1,030  
Denominator for diluted net income per share - weighted-average common shares     196,213       194,894       198,009  
                         
Basic net income per share   $ 2.78     $ 2.68     $ 2.97  
                         
Diluted net income per share   $ 2.76     $ 2.67     $ 2.95  
Redomestication (Tables)
12 Months Ended
Dec. 29, 2012
Summary of The Components of Authorized Shares
Summary of The Components of Authorized Shares

The summary of the components of authorized shares at December 29, 2012, December 31, 2011, December 25, 2010 and changes during 2012 and 2011 are as follows:

 

    Outstanding     Treasury     Issued     Conditional     Authorized  
    Shares     Shares     Shares1     Capital     Capital  
Changes in components of authorized shares                                        
December 25, 2010     194,358,038       13,719,380 2     208,077,418 2,3     104,038,709 4     104,038,709 4
Treasury shares purchased/reclassified     (1,149,645 )     1,149,645 5     -       -       -  
Treasury shares issued for stock based compensation     1,454,224       (1,454,224 )     -       -       -  
December 31, 2011     194,662,617       13,414,801 2     208,077,418 2,3     104,038,709 4     104,038,709 4
Treasury shares purchased     (465,020 )     465,020       -       -       -  
Treasury shares issued for stock based compensation     1,394,257       (1,394,257 )     -       -       -  

Expiration of authorized capital

    -       -       -       -      

(104,038,709

)
December 29, 2012     195,591,854       12,485,564 2     208,077,418 2,3     104,038,709 4     - 4

 

1 Shares at CHF 10 par value (USD 9.0744)
2 Includes 10,000,000 formation shares at USD 0 historical cost
3 The par value of the share capital presented on the face of the balance sheet and in the consolidated statements of stockholders equity excludes the par value of the 10,000,000 formation shares.
4 Up to 104,038,709 conditional shares may be issued through the exercise of option rights which are granted to Garmin employees and/or members of its Board of Directors. In addition, the Board of Directors is authorized to issue up to 104,038,709 additional shares no later than June 27, 2012.
5 The increase in treasury shares in 2011 includes 522,856 shares repurchased in the prior year that were originally treated as retired when such shares were still in treasury. These shares are reflected as additional treasury shares in 2011 with a corresponding increase to retained earnings. See Note 11.
Warranty Reserves (Tables)
12 Months Ended
Dec. 29, 2012
Changes in Aggregate Warranty Reserve
Changes in Aggregate Warranty Reserve

The following reconciliation provides an illustration of changes in the aggregate warranty reserve:

 

    Fiscal Year Ended  
    December 29,     December 31,     December 25,  
    2012     2011     2010  
                   
Balance - beginning of period   $ 46,773     $ 49,885     $ 87,424  
Change in accrual for products sold in prior periods     -       -       (42,776 )
Accrual for products sold     38,421       52,305       93,172  
Expenditures     (47,893 )     (55,417 )     (87,935 )
Balance - end of period   $ 37,301     $ 46,773     $ 49,885  
Selected Quarterly Information (Unaudited) (Tables)
12 Months Ended
Dec. 29, 2012
Quarterly Information
Quarterly Information
    Fiscal Year Ended December 29, 2012  
    Quarter Ending  
    March 31     June 30     September 29     December 29  
                         
Net sales   $ 556,597     $ 718,154     $ 672,376     $ 768,548  
Gross profit     283,759       421,813       359,055       373,853  
Net income     86,858       185,904       140,348       129,293  
Basic net income per share   $ 0.45     $ 0.95     $ 0.72     $ 0.66  

 

    Fiscal Year Ended December 31, 2011  
    Quarter Ending  
    March 26     June 25     September 24 (1)     December 31 (1)  
                         
Net sales   $ 507,834     $ 674,099     $ 666,993     $ 909,643  
Gross profit     238,374       322,100       344,331       433,787  
Net income     95,482       109,477       150,381       165,556  
Basic net income per share   $ 0.49     $ 0.56     $ 0.77     $ 0.86  

 

(1) Amounts shown for quarters ending September 24, 2011 and December 31, 2011 include a change in estimate for the Company's per unit revenue and cost deferrals. The impact to net sales, gross profit, net income, and basic net income per share for the quarter ending September 24, 2011 was $21.4 million, $17.8 million, $15.3 million and $0.07, respectively. The impact to net sales, gross profit, net income, and basic net income per share for the quarter ending December 31, 2011 was $56.4 million, $48.7 million, $44.0 million, and $0.24, respectively.

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
1 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jun. 30, 2012
Jun. 25, 2011
Mar. 16, 2011
Mar. 16, 2010
Dec. 31, 2011
Sep. 24, 2011
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Dec. 26, 2009
Dec. 31, 2011
Deferred Tax Assets Noncurrent
Dec. 31, 2011
Deferred Tax Assets Current
Dec. 31, 2011
Prepaid Expenses and Other Current Assets
Dec. 31, 2011
Product 1
Dec. 29, 2012
Aviation
Dec. 29, 2012
Product 2
Dec. 29, 2012
Minimum
Dec. 29, 2012
Minimum
Other products
Dec. 29, 2012
Minimum
Top Ten Customers
Dec. 29, 2012
Maximum
Dec. 29, 2012
Maximum
Other products
Dec. 29, 2012
Maximum
Top Ten Customers
Dec. 29, 2012
Maximum
Best Buy
Dec. 31, 2011
Maximum
Best Buy
Dec. 25, 2010
Maximum
Best Buy
Dec. 29, 2012
Dividend Payment 1st
Dec. 31, 2011
Dividend Payment 1st
Jun. 1, 2012
Dividend Payment 1st
Jun. 3, 2011
Dividend Payment 1st
Dec. 29, 2012
Dividend Payment Second
Dec. 31, 2011
Dividend Payment Second
Jun. 1, 2012
Dividend Payment Second
Jun. 3, 2011
Dividend Payment Second
Dec. 29, 2012
Dividend Payment Third
Dec. 31, 2011
Dividend Payment Third
Jun. 1, 2012
Dividend Payment Third
Jun. 3, 2011
Dividend Payment Third
Dec. 29, 2012
Dividend Payment 4th
Dec. 31, 2011
Dividend Payment 4th
Jun. 1, 2012
Dividend Payment 4th
Jun. 3, 2011
Dividend Payment 4th
Dec. 29, 2012
Acquired Finite Lived Intangible Assets
Minimum
Dec. 29, 2012
Acquired Finite Lived Intangible Assets
Maximum
Significant Accounting Policies [Line Items]
                                                                                     
Cumulative translation adjustments
       
$ 76,456,000 
 
$ 128,972,000 
$ 76,456,000 
                                                                     
Exchange gains/(losses)
           
(20,022,000)
(12,100,000)
(88,377,000)
                                                                   
Accounts receivable typical collection days
           
80 days 
                                                                       
Intangible assets, amortization period
                                                                                 
3 years 
10 years 
Dividend declared, per share
$ 1.80 
$ 2.00 
$ 1.50 
$ 1.50 
                                                                             
Dividend declared, date declared
           
Jun. 01, 2012 
Jun. 03, 2011 
Mar. 16, 2010 
                                                                   
Dividend Paid, per share
   
$ 1.50 
     
$ 0.90 
$ 1.60 
                                                                     
Dividends payable, per share
                                                     
$ 0.45 
$ 0.80 
   
$ 0.45 
$ 0.40 
   
$ 0.45 
$ 0.40 
   
$ 0.45 
$ 0.40 
   
Dividends payable, date to be paid
               
Apr. 30, 2010 
                               
Jun. 29, 2012 
Jun. 30, 2011 
   
Sep. 28, 2012 
Sep. 30, 2011 
   
Dec. 31, 2012 
Dec. 30, 2011 
   
Mar. 29, 2013 
Mar. 30, 2012 
       
Dividends payable, date of record
               
Apr. 15, 2010 
                               
Jun. 15, 2012 
Jun. 15, 2011 
   
Sep. 14, 2012 
Sep. 15, 2011 
   
Dec. 14, 2012 
Dec. 15, 2011 
   
Mar. 15, 2013 
Mar. 15, 2012 
       
Dividend Paid
           
253,386,000 
310,763,000 
298,853,000 
                                                                   
Retained earnings indefinitely restricted from distribution to stockholders
       
239,470,000 
 
254,986,000 
239,470,000 
                                                                     
Intangible assets at cost
       
173,819,000 
 
181,918,000 
173,819,000 
                                                                     
Excess purchase cost over fair value of net assets acquired (goodwill)
       
179,475,000 
 
176,059,000 
179,475,000 
                                                                     
Intangible assets, accumulated amortization
       
106,648,000 
 
125,380,000 
106,648,000 
                                                                     
Intangible assets, amortization expense
           
21,437,000 
24,831,000 
28,734,000 
                                                                   
Intangible assets, estimated amortization expense in year one
           
21,239,000 
                                                                       
Intangible assets, estimated amortization expense in year two
           
10,960,000 
                                                                       
Intangible assets, estimated amortization expense in year three
           
8,311,000 
                                                                       
Intangible assets, estimated amortization expense in year four
           
6,269,000 
                                                                       
Intangible assets, estimated amortization expense in year five
           
2,754,000 
                                                                       
Available-for-sale securities cumulative unrealized gains/(losses)
       
10,737,000 
 
9,582,000 
10,737,000 
                                                                     
Income taxes that have not been accrued on unremitted earnings of subsidiaries because such earnings are intended to be reinvested indefinitely
       
277,724,000 
 
295,446,000 
277,724,000 
257,727,000 
                                                                   
Unrecognized tax benefits
       
161,904,000 
 
181,754,000 
161,904,000 
153,621,000 
255,748,000 
                                                                 
Unrecognized tax benefits, accrued interest
       
10,850,000 
 
7,680,000 
10,850,000 
9,580,000 
                                                                   
Unrecognized tax benefits, if recognized, that would reduce the effective tax rate
           
181,754,000 
                                                                       
Unrecognized tax benefits, non-current
       
161,904,000 
 
181,754,000 
161,904,000 
153,621,000 
                                                                   
Income Tax expense, interest expense (income)
           
(3,719,000)
5,568,000 
(10,580,000)
                                                                   
Reduction of income tax expense due to expiration of statute of limitations
           
9,349,000 
19,610,000 
24,066,000 
                                                                   
Unrecognized tax benefits, amount reasonably possible that it will decrease within next 12 months
           
78,372,000 
                                                                       
Percentage of net sales by customer
                                   
26.00% 
   
34.00% 
10.00% 
10.00% 
10.00% 
                                   
Deferred revenue, recognition period
                         
36 months 
 
36 months 
2 years 
   
3 years 
                                             
Impact of the change in estimate, revenue
       
56,400,000 
21,400,000 
 
77,800,000 
                                                                     
Impact of the change in estimate, gross profit
       
48,700,000 
17,800,000 
 
66,500,000 
                                                                     
Impact of the change in estimate, net income
       
44,000,000 
15,300,000 
 
59,300,000 
                                                                     
Impact of the change in estimate, basic net income per share
       
$ 0.24 
$ 0.07 
 
$ 0.31 
                                                                     
Impact of the change in estimate, diluted net income per share
             
$ 0.30 
                                                                     
Deferred Revenues
       
377,119,000 
 
445,422,000 
377,119,000 
                                                                     
Total deferred Costs
       
80,856,000 
 
96,307,000 
80,856,000 
                                                                     
Deferred costs, recognition period
                               
2 years 
   
3 years 
                                             
Deferred Revenues net of deferred costs, estimated amount recognized in year one
           
198,427,000 
                                                                       
Deferred Revenues net of deferred costs, estimated amount recognized in year two
           
113,528,000 
                                                                       
Deferred Revenues net of deferred costs, estimated amount recognized in year three
           
37,160,000 
                                                                       
Product warranty period
                           
2 years 
   
1 year 
   
2 years 
                                           
Advertising expenses
           
138,757,000 
145,024,000 
144,613,000 
                                                                   
Research and development costs
           
325,773,000 
298,584,000 
277,261,000 
                                                                   
Reclassification
                   
$ 18,500,000 
$ 10,700,000 
$ 7,800,000 
                                                           
Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Schedule of Inventory [Line Items]
   
Raw Materials
$ 119,142 
$ 129,211 
Work-in-process
53,656 
52,176 
Finished goods
243,238 
245,724 
Inventory Reserves
(26,105)
(29,370)
Inventory, net of reserves
$ 389,931 
$ 397,741 
Property and Equipment Estimated Useful Lives (Detail)
12 Months Ended
Dec. 29, 2012
Building and Building Improvements
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives
39 years 
Furniture and Fixtures |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives
3 years 
Furniture and Fixtures |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives
5 years 
Machinery and Equipment
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives
5 years 
Vehicles
 
Property, Plant and Equipment [Line Items]
 
Estimated useful lives
5 years 
Change in Carrying Amount of Goodwill (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Goodwill [Line Items]
   
Goodwill balance at beginning of year
$ 179,475 
$ 136,548 
Acquisitions
3,470 
46,481 
Finalization of purchase price allocations and effect of foreign currency translation
(6,886)
(3,554)
Goodwill balance at end of year
$ 176,059 
$ 179,475 
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Income Tax Contingency [Line Items]
     
Balance at beginning of year
$ 161,904 
$ 153,621 
$ 255,748 
Additions based on tax positions related to prior years
2,232 
5,568 
11,443 
Reductions based on tax positions related to prior years
(3,719)
(6,885)
(10,392)
Additions based on tax positions related to current period
31,351 
29,210 
43,202 
Reductions related to settlements with tax authorities
(665)
 
(122,314)
Expiration of statute of limitations
(9,349)
(19,610)
(24,066)
Balance at end of year
$ 181,754 
$ 161,904 
$ 153,621 
Available for Sale Securities Measured at Estimated Fair Value on Recurring Basis (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
$ 1,641,395 
$ 1,208,155 
Fair Value, Measurements, Recurring
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
1,641,395 
1,208,155 
Fair Value, Measurements, Recurring |
Mortgage-Backed Securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
650,895 
638,626 
Fair Value, Measurements, Recurring |
Obligations of states and political subdivisions
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
499,857 
359,563 
Fair Value, Measurements, Recurring |
Corporate Bond Securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
399,941 
132,044 
Fair Value, Measurements, Recurring |
Common Stock
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
22,982 
21,104 
Fair Value, Measurements, Recurring |
Other securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
67,720 
56,818 
Fair Value, Measurements, Recurring |
Level 1
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
22,982 
55,194 
Fair Value, Measurements, Recurring |
Level 1 |
Common Stock
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
22,982 
21,104 
Fair Value, Measurements, Recurring |
Level 1 |
Other securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
 
34,090 
Fair Value, Measurements, Recurring |
Level 2
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
1,618,413 
1,152,961 
Fair Value, Measurements, Recurring |
Level 2 |
Mortgage-Backed Securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
650,895 
638,626 
Fair Value, Measurements, Recurring |
Level 2 |
Obligations of states and political subdivisions
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
499,857 
359,563 
Fair Value, Measurements, Recurring |
Level 2 |
Corporate Bond Securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
399,941 
132,044 
Fair Value, Measurements, Recurring |
Level 2 |
Other securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Available for sale securities
$ 67,720 
$ 22,728 
Reconciliation of Beginning and Ending Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Detail) (Auction rate securities, USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 31, 2011
Auction rate securities
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
Beginning balance
$ 20,562 
Total unrealized gains included in other comprehensive income
5,038 
Sales out of Level 3
$ (25,600)
Marketable Securities Classified as Available-For-Sale Securities (Detail) (USD $)
Dec. 29, 2012
Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
$ 1,632,233,000 
$ 1,197,884,000 
Gross Unrealized Gains
17,320,000 
16,203,000 
Gross Unrealized Losses
(6,884,000)
(4,658,000)
Other Than Temporary Impairment
(1,274,000)
(1,274,000)
Estimated Fair Value (Net Carrying Amount)
1,641,395,000 
1,208,155,000 
Mortgage-Backed Securities
   
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
644,388,000 
628,747,000 
Gross Unrealized Gains
8,894,000 
10,965,000 
Gross Unrealized Losses
(2,387,000)
(1,086,000)
Estimated Fair Value (Net Carrying Amount)
650,895,000 
638,626,000 
Obligations of states and political subdivisions
   
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
499,241,000 
358,314,000 
Gross Unrealized Gains
2,345,000 
2,339,000 
Gross Unrealized Losses
(1,729,000)
(1,090,000)
Estimated Fair Value (Net Carrying Amount)
499,857,000 
359,563,000 
U.S. corporate bonds
   
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
400,310,000 
134,763,000 
Gross Unrealized Gains
3,138,000 
815,000 
Gross Unrealized Losses
(2,233,000)
(2,260,000)
Other Than Temporary Impairment
(1,274,000)
(1,274,000)
Estimated Fair Value (Net Carrying Amount)
399,941,000 
132,044,000 
Common Stock
   
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
21,113,000 
19,846,000 
Gross Unrealized Gains
2,392,000 
1,463,000 
Gross Unrealized Losses
(523,000)
(205,000)
Estimated Fair Value (Net Carrying Amount)
22,982,000 
21,104,000 
Other
   
Schedule of Available-for-sale Securities [Line Items]
   
Amortized Cost
67,181,000 
56,214,000 
Gross Unrealized Gains
551,000 
621,000 
Gross Unrealized Losses
(12,000)
(17,000)
Estimated Fair Value (Net Carrying Amount)
$ 67,720,000 
$ 56,818,000 
Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Cost
   
Due in one year or less (2013)
$ 153,420 
 
Due after one year through five years (2014-2018)
616,236 
 
Due after five years through ten years (2019-2023)
231,016 
 
Due after ten years (2024 and thereafter)
575,360 
 
Other (No contractual maturity dates)
56,201 
 
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Total
1,632,233 
 
Estimated Fair Value
   
Due in one year or less (2013)
153,083 
 
Due after one year through five years (2014-2018)
617,389 
 
Due after five years through ten years (2019-2023)
231,883 
 
Due after ten years (2024 and thereafter)
580,493 
 
Other (No contractual maturity dates)
58,547 
 
Estimated Fair Value (Net Carrying Amount)
$ 1,641,395 
$ 1,208,155 
Commitments and Contingencies - Additional Information (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2012
Dec. 31, 2011
Dec. 25, 2010
Commitments and Contingencies Disclosure [Line Items]
       
Rental expense
$ 17,470 
 
$ 14,277 
$ 11,768 
Restricted cash balances
836 
 
771 
 
Commitments to make purchases, amount committed
$ 186,883 
     
Commitments to make purchases, time period
 
5 years 
   
Future Minimum Lease Payments (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Schedule of Operating Leases [Line Items]
 
2013
$ 14,340 
2014
12,090 
2015
9,029 
2016
6,659 
2017
3,337 
Thereafter
4,292 
Total
$ 49,747 
Employee Benefit Plans - Additional Information (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Employee Benefits Disclosure [Line Items]
     
Defined contribution plan, expenses
$ 22,159 
$ 20,647 
$ 17,952 
Defined Contribution Retirement Plan
     
Employee Benefits Disclosure [Line Items]
     
Defined contribution plan, employees contribute percentage
50.00% 
   
Employee Defined Contribution Plans
     
Employee Benefits Disclosure [Line Items]
     
Defined contribution plan, employees contribute percentage
7.50% 
   
Income Tax Provision Benefit (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Federal:
     
Current
$ 83,185 
$ 79,305 
$ (46,674)
Deferred
(22,988)
(25,763)
284 
Federal Income Tax Expense (Benefit), Continuing Operations, Total
60,197 
53,542 
(46,390)
State:
     
Current
8,532 
9,087 
3,929 
Deferred
(5,327)
(4,490)
(257)
State and Local Income Tax Expense (Benefit), Continuing Operations, Total
3,205 
4,597 
3,672 
Foreign:
     
Current
22,296 
22,363 
31,109 
Deferred
(3,573)
(17,237)
4,278 
Foreign Income Tax Expense (Benefit), Continuing Operations, Total
18,723 
5,126 
35,387 
Income tax expense
$ 82,125 
$ 63,265 
$ (7,331)
Sources and Tax Effects of Differences of Income Tax Provision from Amount Computed by Applying Statutory Federal Income Tax Rate to Income Before Taxes, Including Impact of Establishing Tax Contingency Accruals (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Reconciliation of Effective Income Tax Rate [Line Items]
     
Federal income tax expense at U.S. statutory rate
$ 218,585 
$ 204,456 
$ 202,045 
State income tax expense, net of federal tax effect
2,083 
2,988 
2,482 
Foreign tax rate differential
(141,456)
(148,058)
(115,633)
Taiwan tax holiday benefit
(6,418)
(13,127)
(13,536)
Net change in uncertain tax postions
19,850 
8,283 
(102,100)
Other foreign taxes less incentives and credits
(2,287)
9,658 
26,707 
U.S. federal domestic production activities deduction
(6,276)
(2,415)
(1,691)
U.S. federal research and development credit
 
(6,111)
(5,757)
Other, net
(1,956)
7,591 
152 
Income tax expense
$ 82,125 
$ 63,265 
$ (7,331)
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
In Thousands, except Per Share data, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Income Taxes [Line Items]
     
Impact on amount related to tax at the statutory rate, if the Company reconciled taxes at the Swiss statutory tax rate to the reported income tax
$ (170,000)
$ (159,000)
$ (96,000)
Income tax at statutory income tax rate
218,585 
204,456 
202,045 
Impact on amount related to foreign tax rate differential, if the Company reconciled taxes at the Swiss statutory tax rate to the reported income tax
(170,000)
(159,000)
(96,000)
Foreign income tax rate differential
(141,456)
(148,058)
(115,633)
Income before income taxes
624,528 
584,161 
577,272 
Deferred tax asset
   
29,615 
Tax credit carryover
46,577 
   
Change in valuation allowance
14,220 
(14,179)
 
Deferred tax assets related to future tax benefit on net operating loss carryforward
15,771 
   
Net operating loss (NOL) carryforwards
73,298 
   
SWITZERLAND
     
Income Taxes [Line Items]
     
Statutory income tax rate
7.83% 
7.83% 
7.83% 
Income tax at statutory income tax rate
49,000 
45,000 
106,000 
Foreign income tax rate differential
31,000 
11,000 
(20,000)
Net operating loss (NOL) carryforwards
24,604 
   
Net operating loss (NOL) carryforwards, expiration date
2018 
   
UNITED STATES
     
Income Taxes [Line Items]
     
U.S statutory income tax Rate
   
35.00% 
SPAIN
     
Income Taxes [Line Items]
     
Net operating loss (NOL) carryforwards
11,990 
   
SPAIN |
Minimum
     
Income Taxes [Line Items]
     
Net operating loss (NOL) carryforwards, expiration date
2022 
   
SPAIN |
Maximum
     
Income Taxes [Line Items]
     
Net operating loss (NOL) carryforwards, expiration date
2025 
   
Other Major Jurisdiction
     
Income Taxes [Line Items]
     
Net operating loss (NOL) carryforwards
34,486 
   
CHINA
     
Income Taxes [Line Items]
     
Net operating loss (NOL) carryforwards
2,218 
   
Net operating loss (NOL) carryforwards, expiration date
2017 
   
Outside United States
     
Income Taxes [Line Items]
     
Income before income taxes
495,908 
473,994 
413,550 
TAIWAN, PROVINCE OF CHINA
     
Income Taxes [Line Items]
     
Tax holiday benefits per weighted-average common share outstanding
$ 0.03 
$ 0.07 
$ 0.07 
Tax holidays, expiration date
2016 
   
TAIWAN, PROVINCE OF CHINA |
Surtax Credit
     
Income Taxes [Line Items]
     
Tax credit carryover
41,553 
   
Change in valuation allowance
$ 10,314 
$ (14,994)
 
Significant Components of Deferred Tax Assets and Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Deferred tax assets:
   
Product warranty accruals
$ 2,522 
$ 2,094 
Allowance for doubtful accounts
11,026 
12,282 
Inventory reserves
6,162 
6,755 
Sales program allowances
5,680 
5,591 
Reserve for sales returns
3,442 
2,240 
Other accruals
8,774 
5,359 
Stock option compensation
51,241 
48,104 
Tax credit carryforwards, net
46,577 
33,379 
Amortization
25,841 
26,913 
Deferred revenue
56,293 
36,041 
Net operating losses of subsidiaries
15,771 
17,780 
Unrealized investment gain
2,459 
 
Other
1,334 
4,164 
Valuation allowance related to loss carryforward and tax credits
(51,393)
(37,173)
Deferred Tax Assets, Net of Valuation Allowance, Total
185,729 
163,529 
Deferred tax liabilities:
   
Depreciation
16,286 
17,600 
Prepaid expenses
2,886 
3,328 
Book basis in excess of tax basis for acquired entities
4,907 
8,915 
Unrealized investment loss
 
910 
Other
1,744 
1,202 
Deferred Tax Liabilities, Net, Total
25,823 
31,955 
Net deferred tax assets
$ 159,906 
$ 131,574 
Carrying Amounts and Fair Values of Financial Instruments (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
   
Marketable securities
$ 1,641,395 
$ 1,208,155 
Carrying Amount
   
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
   
Cash and cash equivalents
1,231,180 
1,287,160 
Restricted cash
836 
771 
Marketable securities
1,641,395 
1,208,155 
Fair Value
   
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
   
Cash and cash equivalents
1,231,180 
1,287,160 
Restricted cash
836 
771 
Marketable securities
$ 1,641,395 
$ 1,208,155 
Segment Information - Additional Information (Detail)
12 Months Ended
Dec. 29, 2012
Entity
Segment Reporting Disclosure [Line Items]
 
Number of operating segments
Net Sales Operating Income and Income Before Taxes for Reportable Segments (Detail) (USD $)
3 Months Ended 12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Sep. 29, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 24, 2011
Jun. 25, 2011
Mar. 26, 2011
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Segment Reporting Information [Line Items]
                     
Net sales to external customers
$ 768,548 
$ 672,376 
$ 718,154 
$ 556,597 
$ 909,643  1
$ 666,993  1
$ 674,099 
$ 507,834 
$ 2,715,675 
$ 2,758,569 
$ 2,689,911 
Allocated interest income
               
35,108 
32,812 
24,979 
Allocated interest expense
                   
(1,246)
Income before income taxes
               
624,528 
584,161 
577,272 
Aviation
                     
Segment Reporting Information [Line Items]
                     
Net sales to external customers
               
291,564 
284,855 
262,520 
Allocated interest income
               
1,546 
1,250 
1,251 
Allocated interest expense
                   
(122)
Income before income taxes
               
75,177 
73,226 
71,482 
Outdoor
                     
Segment Reporting Information [Line Items]
                     
Net sales to external customers
               
401,747 
363,223 
319,119 
Allocated interest income
               
3,951 
4,496 
2,347 
Allocated interest expense
                   
(148)
Income before income taxes
               
167,734 
171,245 
150,973 
Fitness
                     
Segment Reporting Information [Line Items]
                     
Net sales to external customers
               
321,788 
298,163 
240,473 
Allocated interest income
               
3,799 
4,342 
1,532 
Allocated interest expense
                   
(111)
Income before income taxes
               
114,274 
107,881 
86,499 
Marine
                     
Segment Reporting Information [Line Items]
                     
Net sales to external customers
               
208,136 
221,730 
198,860 
Allocated interest income
               
2,838 
2,934 
1,624 
Allocated interest expense
                   
(92)
Income before income taxes
               
35,725 
60,092 
62,431 
Auto/Mobile
                     
Segment Reporting Information [Line Items]
                     
Net sales to external customers
               
1,492,440 
1,590,598 
1,668,939 
Allocated interest income
               
22,974 
19,790 
18,225 
Allocated interest expense
                   
(773)
Income before income taxes
               
$ 231,618 
$ 171,717 
$ 205,887 
Net Sales and Property and Equipment Net by Geographic Area (Detail) (USD $)
3 Months Ended 12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Sep. 29, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 24, 2011
Jun. 25, 2011
Mar. 26, 2011
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Revenues from External Customers and Long-Lived Assets [Line Items]
                     
Net sales to external customers
$ 768,548 
$ 672,376 
$ 718,154 
$ 556,597 
$ 909,643  1
$ 666,993  1
$ 674,099 
$ 507,834 
$ 2,715,675 
$ 2,758,569 
$ 2,689,911 
Long lived assets
409,751 
     
417,105 
     
409,751 
417,105 
427,805 
Net assets
3,531,796  2
     
3,256,581  2
     
3,531,796  2
3,256,581  2
3,049,562  2
Americas
                     
Revenues from External Customers and Long-Lived Assets [Line Items]
                     
Net sales to external customers
               
1,513,457 
1,527,508 
1,646,590 
Long lived assets
222,310 
     
225,505 
     
222,310 
225,505 
231,569 
Net assets
1,262,498  2
     
1,155,653  2
     
1,262,498  2
1,155,653  2
1,149,826  2
Asia Pacific
                     
Revenues from External Customers and Long-Lived Assets [Line Items]
                     
Net sales to external customers
               
256,882 
248,057 
220,478 
Long lived assets
134,257 
     
143,913 
     
134,257 
143,913 
146,859 
Net assets
2,028,984  2
     
1,915,284  2
     
2,028,984  2
1,915,284  2
1,719,769  2
Europe, Middle East and Africa
                     
Revenues from External Customers and Long-Lived Assets [Line Items]
                     
Net sales to external customers
               
945,336 
983,004 
822,843 
Long lived assets
53,184 
     
47,687 
     
53,184 
47,687 
49,377 
Net assets
$ 240,314  2
     
$ 185,644  2
     
$ 240,314  2
$ 185,644  2
$ 179,967  2
Stock Compensation Plans - Additional Information (Detail) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
In Thousands, except Share data, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
May 31, 2010
Employee Stock Purchase Plan
Dec. 29, 2012
Employee Stock Purchase Plan
Dec. 31, 2011
Employee Stock Purchase Plan
Dec. 25, 2010
Employee Stock Purchase Plan
Apr. 30, 2010
Employee Stock Purchase Plan
Dec. 29, 2012
Restricted Stock Units (RSUs)
Dec. 31, 2011
Restricted Stock Units (RSUs)
Dec. 25, 2010
Restricted Stock Units (RSUs)
Dec. 29, 2012
Directors Equity Incentive Plan Twenty Eleven
Dec. 29, 2012
Directors Equity Incentive Plan Twenty Eleven
Maximum
Dec. 29, 2012
Directors Equity Incentive Plan Twenty Eleven
Minimum
Dec. 29, 2012
Directors Equity Incentive Plan Twenty Eleven
Restricted Stock Units (RSUs)
Dec. 31, 2011
Directors Equity Incentive Plan Twenty Eleven
Restricted Stock Units (RSUs)
Dec. 29, 2012
2005 Stock Incentive Plan
Dec. 31, 2011
2005 Stock Incentive Plan
Dec. 29, 2012
2005 Stock Incentive Plan
Restricted Stock Units (RSUs)
Dec. 31, 2011
2005 Stock Incentive Plan
Restricted Stock Units (RSUs)
Dec. 25, 2010
2005 Stock Incentive Plan
Restricted Stock Units (RSUs)
Dec. 25, 2010
2005 Stock Incentive Plan
Performance Awards
Dec. 29, 2012
Stock Incentive Plan 2000
Dec. 29, 2012
Stock Option Plan 2000
Non Employee Directors, Plan
Dec. 25, 2010
Stock Option Plan 2000
Non Employee Directors, Plan
Dec. 26, 2009
Stock Option Plan 2000
Non Employee Directors, Plan
Oct. 31, 2000
Stock Option Plan 2000
Non Employee Directors, Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
                                                     
Stock-based compensation, maximum number of common shares authorized
                     
122,592 
       
10,000,000 
         
7,000,000 
250,000 
   
100,000 
Stock-based compensation, award expiration terms
                       
10 years 
     
10 years 
         
10 years 
10 years 
     
Stock-based compensation, award vesting Period
                         
2 years 
   
5 years 
 
3 years 
     
5 years 
3 years 
     
Stock-based compensation, award granted
                           
9,616 
11,996 
   
495,814 
410,197 
494,995 
20,000 
         
Stock-based compensation, options granted
61,000 
42,000 
24,000 
                         
61,235 
42,330 
           
23,924 
   
Stock-based compensation, additional common shares authorized
     
2,000,000 
                                         
150,000 
 
Stock-based compensation, stock options and SARs outstanding weighted average remaining contractual life (in years)
4 years 18 days 
                                                   
Stock-based compensation, stock options and SARs exercisable weighted average remaining contractual life (in years)
3 years 11 months 1 day 
                                                   
Stock-based compensation, restricted stock units weighted average remaining contractual life (in years)
               
1 year 10 months 6 days 
                                   
Stock-based compensation, total fair value of awards vested
$ 32,612 
$ 49,006 
$ 41,249 
                                               
Stock-based compensation, stock options and SARs outstanding aggregate intrinsic values
23,159 
                                                   
Stock-based compensation, stock options and SARs exercisable aggregate intrinsic values
23,086 
                                                   
Stock-based compensation, stock options and SARs exercised aggregate intrinsic values
12,548 
14,367 
12,259 
                                               
Stock-based compensation, RSUs outstanding aggregate intrinsic values
               
58,394 
                                   
Stock-based compensation, RSUs released aggregate intrinsic values
               
17,390 
14,592 
8,828 
                               
Closing stock price
$ 40.00 
                                                   
Total unrecognized compensation cost related to unvested share-based compensation awards
45,265 
                                                   
Stock-based compensation, shares of common stock reserved for the ESPP
             
4,000,000 
                                     
Stock-based compensation, discount on fair market value of the stock on the date of purchase at which price shares offered to employee under ESPP
       
85.00% 
                                           
Stock-based compensation, discount on fair market value of the stock on the enrollment date at which price shares offered to employee under ESPP
       
85.00% 
                                           
Stock-based compensation, shares purchased
       
326,483 
514,218 
349,173 
                                       
Stock-based compensation, value of shares purchased
       
$ 10,629 
$ 13,746 
$ 8,134 
                                       
Stock-based compensation, shares available for future issuance
       
1,234,583 
                                           
Stock-Based Compensation Activity Stock Options and SARs (Detail) (USD $)
12 Months Ended
In Thousands, except Per Share data, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Weighted-Average Exercise Price
     
Outstanding beginning balance
$ 53.14 
$ 50.87 
$ 48.28 
Granted
$ 42.16 
$ 39.71 
$ 33.44 
Exercised
$ 24.20 
$ 21.02 
$ 15.52 
Forfeited/Expired
$ 66.45 
$ 64.63 
$ 62.57 
Outstanding ending balance
$ 55.88 
$ 53.14 
$ 50.87 
Exercisable at December 29, 2012
$ 56.29 
   
Expected to vest after December 29, 2012
$ 48.04 
   
Number of Shares
     
Outstanding beginning balance
8,073 
9,086 
10,109 
Granted
61 
42 
24 
Exercised
(794)
(764)
(826)
Forfeited/Expired
(208)
(291)
(221)
Outstanding ending balance
7,132 
8,073 
9,086 
Exercisable at December 29, 2012
6,786 
   
Expected to vest after December 29, 2012
337 
   
Stock-Based Compensation Activity Restricted Stock Units (Detail) (Restricted Stock Units (RSUs), USD $)
12 Months Ended
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Restricted Stock Units (RSUs)
     
Weighted-Average Grant Date Fair Value
     
Beginning Balance
$ 29.40 
$ 25.90 
$ 23.47 
Granted
$ 39.41 
$ 37.28 
$ 30.29 
Released/Vested
$ 41.59 
$ 37.73 
$ 23.02 
Cancelled
$ 26.11 
$ 25.89 
$ 23.32 
Ending Balance
$ 30.06 
$ 29.40 
$ 25.90 
Number of Shares
     
Beginning Balance
1,478,000 
1,503,000 
1,316,000 
Granted
506,000 
422,000 
515,000 
Released/Vested
(435,000)
(366,000)
(291,000)
Cancelled
(89,000)
(81,000)
(37,000)
Ending Balance
1,460,000 
1,478,000 
1,503,000 
Weighted-Average Assumptions Used for Fair Value of Options Estimated Using Black-Scholes Option Pricing Model (Detail)
12 Months Ended
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
     
Weighted average grant date fair value of options granted
$ 9.98 
$ 10.53 
$ 8.99 
Expected volatility
39.06% 
40.78% 
41.78% 
Dividend yield
4.50% 
4.02% 
4.94% 
Expected life of options in years
6 years 7 months 6 days 
6 years 6 months 
6 years 3 months 18 days 
Risk-free interest rate
1.00% 
1.20% 
2.50% 
Computation of Basic and Diluted Net Income Per Share (Detail) (USD $)
3 Months Ended 12 Months Ended
In Thousands, except Per Share data, unless otherwise specified
Dec. 29, 2012
Sep. 29, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 24, 2011
Jun. 25, 2011
Mar. 26, 2011
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Numerator:
                     
Numerator for basic and diluted net income per share - net income
$ 129,293 
$ 140,348 
$ 185,904 
$ 86,858 
$ 165,556  1
$ 150,381  1
$ 109,477 
$ 95,482 
$ 542,403 
$ 520,896 
$ 584,603 
Denominator:
                     
Denominator for basic net income per share - weighted-average common shares
               
194,909 
194,105 
196,979 
Effect of dilutive securities -employee stock-based awards
               
1,304 
789 
1,030 
Denominator for diluted net income per share - weighted-average common shares
               
196,213 
194,894 
198,009 
Basic net income per share
$ 0.66 
$ 0.72 
$ 0.95 
$ 0.45 
$ 0.86  1
$ 0.77  1
$ 0.56 
$ 0.49 
$ 2.78 
$ 2.68 
$ 2.97 
Diluted net income per share
               
$ 2.76 
$ 2.67 
$ 2.95 
Earnings Per Share - Additional Information (Detail)
12 Months Ended
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
     
Options outstanding but not included in the computation of diluted earnings per share
5,640,615 
5,920,076 
6,192,043 
Share Repurchase Program - Additional Information (Detail) (USD $)
12 Months Ended 34 Months Ended
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2011
Dec. 25, 2010
Dec. 31, 2011
Share Repurchase Program, February Twenty Ten
Dec. 29, 2012
Share Repurchase Program, February Twenty Ten
Accelerated Share Repurchases [Line Items]
       
Share repurchase program, authorization date
     
Feb. 12, 2010 
Share repurchase program, authorized amount
     
$ 300,000 
Share repurchase program, shares repurchased
     
7,366,646 
Share repurchase program, shares repurchased value
     
223,149 
Share repurchase program, shares repurchased and retired
522,856 
 
522,856 
 
Share repurchase program, shares repurchased and retired value
 
$ 108,840 
 
$ 16,701 
Redomestication - Additional Information (Detail)
12 Months Ended
In Thousands, except Share data, unless otherwise specified
Dec. 29, 2012
USD ($)
Dec. 29, 2012
CHF
Dec. 31, 2011
USD ($)
Dec. 31, 2011
CHF
Dec. 25, 2010
USD ($)
Dec. 25, 2010
CHF
Jul. 26, 2010
CHF
Dec. 26, 2009
USD ($)
Dec. 29, 2012
Formation Shares
Dec. 31, 2011
Formation Shares
Dec. 25, 2010
Common Stock
USD ($)
Dec. 29, 2012
Common Stock
USD ($)
Dec. 31, 2011
Common Stock
USD ($)
Dec. 26, 2009
Common Stock
USD ($)
Stockholders Equity Note [Line Items]
                           
Treasury shares, shares
12,485,564  1
12,485,564  1
13,414,801  1
13,414,801  1
13,719,380  1
13,719,380  1
   
10,000,000 
10,000,000 
       
Impact of redomestication on par value of common shares
                   
$ 1,796,448 
     
Ending Balance
$ 3,531,796 
 
$ 3,256,581 
 
$ 3,049,562 
   
$ 2,836,447 
   
$ 1,797,435 
$ 1,797,435 
$ 1,797,435 
$ 1,001 
Impact of redomestication on shares of common shares
                   
198,077,418 
     
Shares, par value
$ 9.0744 
10 
$ 9.0744 
10 
$ 9.0744 
10.0000 
10.0000 
             
Summary of Components of Authorized Shares (Detail)
12 Months Ended
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Dec. 29, 2012
Common Stock
Dec. 31, 2011
Common Stock
Dec. 29, 2012
Treasury Stock
Dec. 31, 2011
Treasury Stock
Dec. 29, 2012
Conditional Capital
Dec. 31, 2011
Conditional Capital
Dec. 25, 2010
Conditional Capital
Dec. 31, 2011
Authorized Capital
Dec. 25, 2010
Authorized Capital
Dec. 29, 2012
Authorized Capital
Expiration
Class of Stock [Line Items]
                         
Treasury shares purchased
     
(465,020)
(1,149,645)
465,020 
1,149,645  1
           
Treasury shares issued for stock based compensation
     
1,394,257 
1,454,224 
(1,394,257)
(1,454,224)
           
Outstanding Shares
195,591,854 
194,662,617 
194,358,038 
                   
Treasury Shares
12,485,564  2
13,414,801  2
13,719,380  2
                   
Issued Shares
208,077,418  2  3 4
208,077,418  2  3 4
208,077,418  2  3 4
                   
Capital
208,077,418 
208,077,418 
         
104,038,709  5
104,038,709  5
104,038,709  5
104,038,709  5
104,038,709  5
(104,038,709)
Summary of Components of Authorized Shares (Parenthetical) (Detail)
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2011
CHF
Dec. 29, 2012
USD ($)
Dec. 29, 2012
CHF
Dec. 25, 2010
USD ($)
Dec. 25, 2010
CHF
Jul. 26, 2010
CHF
Dec. 29, 2012
Formation Shares
Dec. 31, 2011
Formation Shares
USD ($)
Dec. 29, 2012
Conditional Shares
Class of Stock [Line Items]
                   
Shares, par value
$ 9.0744 
10 
$ 9.0744 
10 
$ 9.0744 
10.0000 
10.0000 
     
Treasury shares, shares
13,414,801  1
13,414,801  1
12,485,564  1
12,485,564  1
13,719,380  1
13,719,380  1
 
10,000,000 
10,000,000 
 
Treasury shares, value of shares
$ 103,498,000 
 
$ 81,280,000 
         
$ 0 
 
Shares, shares authorized
208,077,418 
208,077,418 
208,077,418 
208,077,418 
         
104,038,709 
Share repurchase program, shares repurchased and retired
522,856 
522,856 
               
Warranty Reserves - Additional Information (Detail)
12 Months Ended
Dec. 29, 2012
Product Liability Contingency [Line Items]
 
Standard warranty, term
From one to two years 
Minimum
 
Product Liability Contingency [Line Items]
 
Standard warranty (in years)
1 year 
Maximum
 
Product Liability Contingency [Line Items]
 
Standard warranty (in years)
2 years 
Changes in Aggregate Warranty Reserve (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Product Liability Contingency [Line Items]
     
Beginning Balance
$ 46,773 
$ 49,885 
$ 87,424 
Change in accrual for products sold in prior periods
   
(42,776)
Accrual for products sold
38,421 
52,305 
93,172 
Expenditures
(47,893)
(55,417)
(87,935)
Ending Balance
$ 37,301 
$ 46,773 
$ 49,885 
Quarterly Information (Detail) (USD $)
3 Months Ended 12 Months Ended
In Thousands, except Per Share data, unless otherwise specified
Dec. 29, 2012
Sep. 29, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 24, 2011
Jun. 25, 2011
Mar. 26, 2011
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Effect of Fourth Quarter Events [Line Items]
                     
Net sales
$ 768,548 
$ 672,376 
$ 718,154 
$ 556,597 
$ 909,643  1
$ 666,993  1
$ 674,099 
$ 507,834 
$ 2,715,675 
$ 2,758,569 
$ 2,689,911 
Gross profit
373,853 
359,055 
421,813 
283,759 
433,787  1
344,331  1
322,100 
238,374 
1,438,480 
1,338,592 
1,346,374 
Net income
$ 129,293 
$ 140,348 
$ 185,904 
$ 86,858 
$ 165,556  1
$ 150,381  1
$ 109,477 
$ 95,482 
$ 542,403 
$ 520,896 
$ 584,603 
Basic net income per share
$ 0.66 
$ 0.72 
$ 0.95 
$ 0.45 
$ 0.86  1
$ 0.77  1
$ 0.56 
$ 0.49 
$ 2.78 
$ 2.68 
$ 2.97 
Quarterly Information (Parenthetical) (Detail) (USD $)
3 Months Ended 12 Months Ended
In Millions, except Per Share data, unless otherwise specified
Dec. 31, 2011
Sep. 24, 2011
Dec. 31, 2011
Effect of Fourth Quarter Events [Line Items]
     
Impact of the change in estimate, revenue
$ 56.4 
$ 21.4 
$ 77.8 
Impact of the change in estimate, gross profit
48.7 
17.8 
66.5 
Impact of the change in estimate, net income
$ 44.0 
$ 15.3 
$ 59.3 
Impact of the change in estimate, basic net income per share
$ 0.24 
$ 0.07 
$ 0.31 
Acquisitions - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended
In Thousands, unless otherwise specified
Sep. 24, 2011
Dec. 29, 2012
Entity
Dec. 31, 2011
Dec. 25, 2010
Entity
Business Acquisition [Line Items]
       
Business acquisitions, aggregate amount in cash
 
$ 69,558 
   
Business acquisitions, cash acquired
 
15,368 
   
Business acquisitions, purchase price allocation, goodwill and intangible assets
 
76,452 
   
Business acquisition, recognized restructuring costs
3,923 
     
Business acquisitions, cash paid
 
$ 7,697 
$ 54,190 
$ 12,120 
Number of companies acquired
 
 
Subsequent Events - Additional Information (Detail) (Subsequent Event, USD $)
1 Months Ended
In Thousands, unless otherwise specified
Feb. 15, 2013
Subsequent Event [Line Items]
 
Common share repurchase, expiration date
Dec. 31, 2014 
Maximum
 
Subsequent Event [Line Items]
 
Common share repurchase, authorized amount
$ 300,000 
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Dec. 25, 2010
Valuation and Qualifying Accounts Disclosure [Line Items]
     
Beginning of Period
$ 96,767 
$ 120,894 
$ 111,188 
Charged to Costs and Expenses
30,276 
26,266 
17,012 
Charged to Other Accounts
   
   
   
Deductions
(18,949)
(50,393)
(7,306)
Balance at End of Period
108,094 
96,767 
120,894 
Allowance for doubtful accounts
     
Valuation and Qualifying Accounts Disclosure [Line Items]
     
Beginning of Period
30,224 
31,822 
36,673 
Charged to Costs and Expenses
4,678 
2,317 
(4,476)
Charged to Other Accounts
   
   
   
Deductions
(4,306)
(3,915)
(375)
Balance at End of Period
30,596 
30,224 
31,822 
Inventory Reserves
     
Valuation and Qualifying Accounts Disclosure [Line Items]
     
Beginning of Period
29,370 
37,720 
38,898 
Charged to Costs and Expenses
11,003 
16,047 
5,753 
Charged to Other Accounts
   
   
   
Deductions
(14,268)
(24,397)
(6,931)
Balance at End of Period
26,105 
29,370 
37,720 
Deferred tax asset valuation allowance
     
Valuation and Qualifying Accounts Disclosure [Line Items]
     
Beginning of Period
37,173  1
51,352  1
35,617 
Charged to Costs and Expenses
14,595 
7,902  1
15,735 
Charged to Other Accounts
   
    1
   
Deductions
(375)
(22,081) 1
Balance at End of Period
$ 51,393 
$ 37,173  1
$ 51,352  1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Parenthetical) (Detail) (USD $)
12 Months Ended
In Thousands, unless otherwise specified
Dec. 29, 2012
Dec. 31, 2011
Valuation and Qualifying Accounts Disclosure [Line Items]
   
Change in valuation allowance
$ 14,220 
$ (14,179)
Taiwan
   
Valuation and Qualifying Accounts Disclosure [Line Items]
   
Change in valuation allowance
 
$ (14,994)