Garmin (GRMN) 10-K risk factor changes: FY2019 vs FY2018

[removed: _The] [added: The] risks described below are not the only ones facing our company.

If any of the following risks occur, our business, financial condition or operating results could be materially adversely [removed: affected._][added: affected.]

[removed: _Risks] [added: Risks] Related to the [removed: Company_][added: Company]

[removed: If] [added: If] we are not successful in the continued development, timely manufacture, and introduction of new products or product categories, demand for our products could decrease to the extent that lost sales and profits from declining segments or product categories are not entirely [removed: offset.][added: offset.]

[removed: If] [added: If] we are unable to compete effectively with existing or new competitors, our resulting loss of competitive position could result in price reductions, fewer customer orders, reduced margins and loss of market [removed: share.][added: share.]

[removed: Our] [added: Our] annual and quarterly financial statements will reflect fluctuations in foreign currency [removed: translation.][added: translation.]

The operation of our subsidiaries in [removed: international] [added: global] markets results in exposure to movements in currency exchange rates.

We have not historically [removed: hedged] [added: used financial instruments to hedge] our foreign currency exchange rate risks.

[removed: Changes] [added: Changes] in applicable tax laws or resolutions of tax disputes could result in adverse tax consequences to the [removed: Company.][added: Company.]

Our tax [removed: position] [added: positions] could be adversely impacted by changes to tax laws, tax treaties, or tax regulations or the interpretation or enforcement thereof by any tax authority in which we file income tax [removed: returns.][added: returns, particularly in the US, Switzerland, Taiwan, and UK.]

[removed: Moreover, international] [added: Global] taxing standards continue to evolve as a result of the Organization for Economic Co-Operation and Development (OECD) recommendations aimed at preventing perceived base erosion and profit shifting [added: (BEPS)] by multinational corporations.

While these recommendations [removed: are] [added: do] not [removed: changes to] [added: change] tax law, the countries where we operate may implement legislation or take unilateral actions which may result in adverse effects to our income tax provision and financial statements.

In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is [removed: uncertain.][added: uncertain, most notably in the area of transfer pricing.]

The results of an audit or litigation could have a material effect on our income tax provision, net [removed: income] [added: income,] or cash flows in the period or periods for which that determination is made.

The imposition of additional [removed: U.S. or foreign] governmental [removed: controls,] [added: controls or] regulations that create new or enhanced restrictions on free trade, trade sanctions, or tariffs, particularly those applicable to [added: materials or] goods [removed: imported] from [removed: Taiwan or] the People’s Republic of China, could have [added: a] substantial adverse [removed: effects] [added: effect] on our business, results of operations, and financial condition.

[removed: Economic,] [added: Economic,] regulatory, and political conditions and uncertainty could adversely affect our revenue and [removed: profits.][added: profits.]

We have [removed: international] [added: global] operations which make up a significant portion of our total revenue, which can present challenges depending on economic and geopolitical conditions on both a global and regional scale.

Economic weakness or constrained consumer and business spending has resulted in periods of decreased revenue [removed: and] in the [removed: future,] [added: past, and] could [added: in the future] result in decreased revenue and problems with our ability to manage inventory levels and collect customer receivables.

We experienced substantial growth through 2008 in [removed: the] [added: our] auto segment [removed: of our business] as PNDs became mass-market consumer electronics in both Europe and North America.

This [added: auto PND] market is declining as competing technologies emerged and market saturation occurred.

[removed: GPS/navigation] [added: Navigation] technologies have been incorporated into [added: and become more prevalent in] competing devices such as mobile handsets, tablets, and new automobiles through factory-installed systems.

The acceptance [removed: of this technology] by consumers [added: of these alternative solutions] has [removed: reduced] [added: negatively impacted] sales [removed: in the auto segment] and [removed: has reduced] profits in [removed: some periods.][added: the auto segment.]

[removed: The] [added: The] United Kingdom (UK) [removed: is scheduled to] formally [removed: leave] [added: left] the European Union (EU) on [removed: March 29, 2019.][added: January 31, 2020.]

The effects of the [removed: UK’s] [added: United Kingdom’s] withdrawal from the [removed: EU] [added: European Union (“Brexit”), including trade agreements,] are not yet known and the uncertainty creates challenges and risks which could have a material effect on our business and results of [removed: operations.][added: operations.]

[removed: The UK and EU have had ongoing negotiations with respect to the UK's withdrawal terms, however,] [added: However,] there is continued uncertainty surrounding the future relationship between the UK and [added: EU, including trade agreements between the UK and] EU.

[removed: The] [added: Additionally,] long-term risks of Brexit include economic recessions in the UK [removed: and in] [added: or] other European [removed: markets, raising concerns over] [added: markets and] currency [removed: stability] [added: instability] for both the British Pound Sterling and the Euro.

We have operations in the UK, including offices and a distribution facility, and several EU member [removed: states] [added: states,] and therefore Brexit will impact our operations.

We have certain measures in place to reduce the impact to our business [removed: operations,] [added: operations;] however, risks such as slow or inefficient border clearance, prolonged economic recession, and currency fluctuations could have material adverse effects on our business operations, results of operations, and financial condition.

[removed: If] [added: Depending on finalization of] a [removed: deal is reached] [added: trade agreement] between the UK and the [removed: EU,] [added: EU during] the [added: transition period, the] impacts of Brexit [removed: would] [added: may] have a lesser impact to our financial condition and business operations.

Given the number of different outcomes still possible, [removed: including delaying] the [removed: exit or holding a second referendum, the] impacts of Brexit are difficult to determine until specific terms of the withdrawal are reached.

[removed: If] [added: If] we do not correctly anticipate demand for our products, we may not be able to secure sufficient quantities or cost-effective production of our products or we could have costly excess production or [removed: inventories.][added: inventories.]

| | [removed: ●] [added: •] | If demand increases beyond what we forecast, we would have to rapidly increase production. We would depend on suppliers to provide additional volumes of components and those suppliers might not be able to increase production rapidly enough to meet unexpected demand. |

| | [removed: ●] [added: •] | Rapid increases in production levels to meet unanticipated demand could result in higher costs for manufacturing and supply of components and other expenses. These higher costs could lower our profit margins. Further, if production is increased rapidly, manufacturing quality could decline, which may also lower our margins and reduce customer satisfaction. |

| | [removed: ●] [added: •] | If forecasted demand does not develop, we could have excess inventories of finished products and components, which would use cash and could lead to write-offs of some or all of the excess inventories. Lower than forecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies at our facilities, which could result in lower margins. |

[removed: Although we do not foresee difficulty in continuing to license data from HERE at reasonable pricing due to a long term license agreement with an option to extend through 2028, if] [added: If] we are unable to continue licensing such mapping data from [removed: HERE and other primary] [added: our] suppliers and are unable to obtain an alternative source, or if [removed: the nature of] our relationships with [removed: primary] [added: our] suppliers [removed: changes] [added: change] detrimentally, our ability to supply mapping data for use in our products would be seriously harmed.

[removed: Our] [added: Our] intellectual property rights are important to our operations, and we could suffer loss if they infringe upon [removed: other’s] [added: others’] rights or are infringed upon by [removed: others.][added: others.]

[removed: We] [added: We] may become subject to significant product liability [removed: costs.][added: costs.]

If we are unable to maintain sufficient insurance to cover product liability costs or if our insurance coverage does not cover the award, this could have a [removed: materially] [added: material] adverse impact on our business, financial condition and results of operations.

[removed: We] [added: We] have claims and lawsuits against us that may result in adverse [removed: outcomes.][added: outcomes.]

Our products may contain undetected security vulnerabilities, which could result in damage to our reputation, lost revenue, diverted development resources and increased warranty claims, and [removed: litigation][added: litigation.]

| --- | --- |

Partially to respond to recent and continuing changes to global tax standards, we initiated an intercompany transaction which migrates ownership of certain consumer products intellectual property from Switzerland to the United States, which is the primary location of research, development and executive management.

Due to the subjectivity inherent in transfer pricing associated with this intercompany transaction, we are pursuing an advanced pricing agreement with relevant jurisdictions to provide certainty regarding the pricing.

However, we are unable to predict the outcome of the final advanced pricing agreement and related negotiations, which could materially and/or adversely impact our income tax provision, net income or cash flows for periods during negotiation and upon finalization.

We manufacture goods in the People’s Republic of China and import certain materials from the People’s Republic of China that are used to manufacture goods in the United States.

A transition period through December 31, 2020 has been established to allow the UK and EU to negotiate the terms of the UK’s withdrawal.

Continued declines in auto PND revenue and significant investments in auto OEM could negatively impact total Company profits and shareholder value.

There is no assurance that the decline in sales will end, and thus no assurance that we can continue to generate profits from the auto segment.

We have recently been awarded several tier-one and tier-two auto OEM supplier contracts.

To fulfill the associated program commitments, we are investing significantly in facilities, research and development, and other operating expenses and we will continue to do so in the coming years.

Gross margins associated with these auto OEM programs are expected to be lower than the gross margins realized in the auto segment and the Company as a whole in recent periods.

If we are not successful in winning additional contract awards or substantially leveraging our investments, periods of lower operating income or operating losses in the auto segment could negatively impact total Company profits and shareholder value.

On January 1, 2020, the California Consumer Privacy Act (CCPA) went into effect, and other States in the United States are considering adopting data privacy laws.

Noncompliance with GDPR.

CCPA, or other data protection laws in other States in the United States or in other countries, could result in significant fines and penalties.

These events could also have an impact on our suppliers and affect our supply chain.

Such measures could influence mobility and transportation trends, which could decrease the demand for certain of our products.

As of December 28, 2019, we had CHF 5,650 million of unappropriated capital contribution reserves available from which the Company may make dividend payments or utilize to repurchase shares for which no withholding tax applies.

At the time this reserve balance has been returned to shareholders through dividends or share repurchases, a Swiss federal withholding tax of 35% will generally be applicable to any dividends paid to shareholders.

A holder that qualifies for benefits under a double tax treaty may be able to recover partial withholding tax.

After we have exhausted our remaining capital contribution reserves by appropriating them for dividends or share repurchases, any dividends paid by the Company will generally be subject to a Swiss federal withholding tax at 35%.

Legislative proposals are being considered in Switzerland that could make significant changes in the corporate tax regime and increase the taxes applicable to us in Switzerland.

Switzerland has agreed with the European Union (EU) to execute tax reform by 2019 in exchange for the EU’s waiver of counter-measures.

A failure to accomplish tax reform in the agreed timeframe may result in the EU member states reasserting counter-measure provisions which could result in additional tax for the Company.

A significant portion of our global and U.S. sales are comprised of goods assembled and manufactured in our facilities in Taiwan and the People’s Republic of China, and components for a number of our goods are sourced from suppliers in the People’s Republic of China.

Uncertainty in the geopolitical climate could create trade disputes or increased tariffs which could adversely affect our results of operations.

The auto segment, which represents approximately 19% of our revenue, is expected to continue to decline in 2019.

The demand for personal navigation devices (PNDs) has been and continues to be reduced by replacement technologies becoming available on mobile devices and factory-installed systems in new autos, as well as by market saturation.

Many companies are now offering navigation software for these mobile devices.

Navigation systems are also becoming more prevalent as standard and/or optional equipment on new automobiles.

Increased navigation penetration on mobile handsets and in new automobiles is expected to cause further declines in sales of our portable navigation devices and could further reduce profits.

The United Kingdom (UK) held a referendum in June 2016 where a majority vote was reached supporting the UK withdrawal from the European Union (EU), commonly referred to as "Brexit".

Brexit is currently scheduled to occur on March 29, 2019.

Barring an approved agreement by Parliament, the UK will exit the EU on March 29, 2019 without a transition plan.

If the UK withdraws from the EU without a transition plan, the UK would lose its tariff-free trade status with other EU members and create customs border issues.

Increased tariffs would apply to both goods imported to and exported from the UK.

There is risk that other current EU member states may also consider withdrawal from the EU depending on the EU economy following Brexit, which would increase the long-term risk of economic recessions in European markets and could result in further currency instability for the Euro.

The largest digital map supplier for our auto products is HERE (formerly known as NAVTEQ), which is majority-owned by a consortium of Daimler AG, BMW AG, and Audi AG.

Noncompliance with GDPR could result in significant fines and penalties.

In addition, we attempt to time our new product releases to coincide with relatively higher consumer spending in the second and fourth fiscal quarters, which contributes to these seasonal variations.

If we are unable to make distributions, if any, through a reduction of par value or to pay dividends, if any, out of qualifying capital contribution reserves, then any dividends paid by us will generally be subject to a Swiss federal withholding tax at a rate of 35%.

Over the long term, the amount of par value and qualifying capital contribution reserves available for us to use for par value reductions or dividends will be limited.

We may follow a share repurchase process for future share repurchases, if any, similar to a “second trading line” on the SIX Swiss Exchange in which Swiss institutional investors buy shares on the open market and sell these shares to us and are generally able to receive a refund of the Swiss withholding tax.

However, if we are unable to use this process successfully, we may not be able to repurchase shares for the purposes of capital reduction without subjecting our shareholders to Swiss withholding taxes if and to the extent that the repurchase of shares is made out of retained earnings or other taxable reserves.

No withholding tax would be applicable if and to the extent that qualifying capital contribution reserves are attributable to the share repurchase.

Fiscal years [added: 2019,] 2018 and 2017 contained 52 [removed: weeks compared to 53 weeks for 2016.][added: weeks.]

[removed: Overview][added: Overview]

We operate in five [removed: business] [added: reportable] segments, which serve the [removed: marine, outdoor, fitness,] auto, [added: aviation, fitness, marine,] and [removed: aviation] [added: outdoor] markets.

[removed: Our segments offer] [added: Each operating segment offers] products through our network of subsidiary distributors and independent dealers and [removed: distributors.][added: distributors, as well as through OEMs.]

[removed: As such,] [added: Each of] the [added: operating] segments [removed: are] [added: is] managed separately.

[removed: Critical] [added: Critical] Accounting Policies and [removed: Estimates][added: Estimates]

[removed: _General_][added: General]

[removed: Garmin’s] [added: Our] discussion and analysis of [removed: its] financial condition and results of operations are based upon [removed: Garmin’s consolidated financial statements,] [added: the Company’s Consolidated Financial Statements,] which have been prepared in accordance with accounting principles generally accepted in the United States.

The presentation of these financial statements requires [removed: Garmin] [added: management] to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, [removed: Garmin evaluates its] [added: we evaluate our] estimates, including those related to customer sales programs and incentives, product returns, bad debts, inventories, investments, intangible assets, income taxes, warranty obligations, and contingencies and litigation.

[removed: Garmin bases its] [added: We base our] estimates on historical experience and [removed: on] various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

For [added: further] information on [removed: each of] the [removed: following] [added: Company’s] critical accounting [removed: policies and/or estimates,] [added: policies,] refer to the discussion in the Notes to the Consolidated Financial Statements as indicated in the table below:

[removed: Accounting] [added: Accounting] Terms and [removed: Characteristics][added: Characteristics]

[removed: _Net Sales_][added: Net Sales]

Our net sales are primarily generated through sales to our retail partners, dealer and distributor network and to original equipment [removed: manufacturers.][added: manufacturers (OEMs).]

Typically, sales of our consumer products are highest in the fourth [removed: quarter,] [added: quarter] due to increased demand during the holiday buying season, and in the second quarter, due to increased demand during the spring and summer season.

Our [removed: aviation and] auto OEM [added: and aviation] products do not experience much seasonal variation, but are more influenced by the timing of [added: auto program manufacturing,] aircraft [removed: certifications] [added: certifications, regulatory mandates,] and the release of new products when the initial demand is typically the strongest.

[removed: _Cost] [added: Cost] of Sales/Gross [removed: Profit_][added: Profit]

We believe that our flexible production model allows our Xizhi, Jhongli, and LinKou manufacturing plants in Taiwan; Yangzhou manufacturing plant in China; [added: our Wassenaar manufacturing plant in the Netherlands;] and our Olathe, Kansas, and Salem, Oregon manufacturing plants in the U.S. to experience relatively low costs of manufacturing.

[removed: _Advertising Expense_][added: Advertising Expense]

Our advertising expenses consist [added: primarily] of costs for media advertising, cooperative advertising with our retail partners, point of sale displays, and sponsorships.

[removed: _Selling,] [added: Selling,] General and Administrative [removed: Expenses_][added: Expenses]

| | [removed: ●] [added: •] | salaries for sales, marketing and product support personnel; |

| | [removed: ●] [added: •] | salaries and related costs for executives and administrative personnel; |

| | [removed: ●] [added: •] | marketing, and other brand building costs; |

| | [removed: ●] [added: •] | [removed: accounting] [added: finance] and legal costs; |

| | [removed: ●] [added: •] | information systems and infrastructure costs; |

| | [removed: ●] [added: •] | travel and related costs; and |

| | [removed: ●] [added: •] | occupancy and other overhead costs. |

[removed: _Research] [added: Research] and [removed: Development_][added: Development]

[removed: _Income Taxes_][added: Income Taxes]

We have experienced a relatively low effective [removed: corporate] [added: income] tax rate due to the proportion of our [removed: revenue] [added: income] generated by entities in tax jurisdictions with low statutory rates.

| | | 52-Weeks Ended | | | | 52-Weeks Ended | | | | [removed: 53-Weeks] [added: 52-Weeks] Ended | | |

| | | [removed: 2018] [added: December 28, 2019] | | | | [removed: 2017] [added: December 29, 2018] | | | | [removed: 2016] [added: December 30, 2017] | | |

| Cost of goods sold | | | 41 | % | | | [removed: 42] [added: 41] | % | | | [removed: 45] [added: 42] | % |

| Gross profit | | | 59 | % | | | [removed: 58] [added: 59] | % | | | [removed: 55] [added: 58] | % |

| Advertising | | | [removed: 5] [added: 4] | % | | | 5 | % | | | [removed: 6] [added: 5] | % |

| Selling, general and administrative | | | 14 | % | | | 14 | % | | | [removed: 13] [added: 14] | % |

| Research and development | | | [removed: 17] [added: 16] | % | | | [removed: 16] [added: 17] | % | | | [removed: 15] [added: 16] | % |

| Total operating expenses | | | [removed: 36] [added: 34] | % | | | 36 | % | | | [removed: 35] [added: 36] | % |

This section provides discussion and a year-to-year comparison for the fiscal years ended December 28, 2019 and December 29, 2018.

Discussion regarding our results of operations for the fiscal year ended December 30, 2017 and a year-to-year comparison between the fiscal years ended December 29, 2018 and December 30, 2017 can be found in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2018.

Our auto reportable segment is comprised of two operating segments; auto PND and auto OEM.

Goodwill

We allocate goodwill to reporting units in proportion to the expected benefit from each business combination.

Each of the Company’s operating segments (auto PND, auto OEM, aviation, fitness, marine, and outdoor) represents a distinct reporting unit.

Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

These events or circumstances could include a significant change in the operating performance indicators, competition, or expectations about future market or economic conditions.

Application of the goodwill impairment test requires significant judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit.

The fair value of each reporting unit is estimated through the use of a discounted cash flow methodology.

This analysis requires significant assumptions, including discount rate, projected future revenues, projected future operating margins, and terminal growth rates.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors.

Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

We recognize liabilities associated with uncertain income tax positions, including those related to transfer pricing, based on our estimate of whether, and the extent to which, additional taxes will be due.

We recognize the tax benefits from an uncertain tax position only if payment of these amounts ultimately proves to be not required or it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such positions are measured based on the largest amount of benefit that is more likely than not to be realized upon ultimate settlement.

Assessing uncertain tax positions requires significant judgment, including the evaluation of unique facts and circumstances and the interpretation of laws and regulations, especially the assessment of pricing analyses that may produce various ranges of outcomes.

Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements.

Other

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| | • | human resource costs; |

As indicated in Note 8 to the Consolidated Financial Statements, the methodology used to allocate certain selling, general, and administrative expenses was refined at the beginning of the 2019 fiscal year.

The amounts presented below for the 52-weeks ended December 29, 2018 and December 30, 2017 are presented here as they were originally reported.

For comparative purposes, we estimate operating income for the 52-weeks ended December 29, 2018 would have been approximately $18 million less for the aviation segment, approximately $11 million more for the marine segment, approximately $7 million more for the outdoor segment, and not significantly different for the auto and fitness segments.

We estimate operating income for the 52-weeks ended December 30, 2017 would have been approximately $14 million less for the aviation segment, approximately $8 million less for the fitness segment, approximately $8 million more for the marine segment, and approximately $7 million more for each of the outdoor and auto segments.

| Net sales | | $ | 1,047,527 | | | $ | 917,567 | | | $ | 735,458 | | | $ | 548,103 | | | $ | 508,850 | |

| Cost of goods sold | | | 514,923 | | | | 319,124 | | | | 192,073 | | | | 291,508 | | | | 205,901 | |

| Gross profit | | | 532,604 | | | | 598,443 | | | | 543,385 | | | | 256,595 | | | | 302,949 | |

| Advertising expense | | | 71,772 | | | | 52,171 | | | | 5,667 | | | | 14,435 | | | | 20,411 | |

| Research and development expense | | | 109,181 | | | | 87,581 | | | | 219,112 | | | | 107,182 | | | | 82,310 | |

| Total operating expenses | | | 340,746 | | | | 264,402 | | | | 290,442 | | | | 199,727 | | | | 193,073 | |

| Operating income | | $ | 191,858 | | | $ | 334,041 | | | $ | 252,943 | | | $ | 56,868 | | | $ | 109,876 | |

| Percentage of Total Net Sales | | | 24 | % | | | | | | | 24 | % | | | | | | | 22 | % |

| Percentage of Total Net Sales | | | 20 | % | | | | | | | 18 | % | | | | | | | 16 | % |

| Percentage of Total Net Sales | | | 15 | % | | | | | | | 19 | % | | | | | | | 25 | % |

| Percentage of Total Net Sales | | | 13 | % | | | | | | | 13 | % | | | | | | | 12 | % |

The fitness segment revenue increase was primarily driven by strong sales in wearables and sales from Tacx, a newly acquired group of subsidiaries that designs and manufactures indoor bike trainers.

The outdoor segment revenue increase was driven by sales growth in multiple product categories, primarily led by adventure watches.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Percentage of Segment Net Sales | | | 51 | % | | | | | | | 55 | % | | | | | | | 55 | % |

However, the nature of products and types of customers for the five segments can vary significantly.

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In particular, the profit entitlement afforded our Swiss-based companies based on their intellectual property rights ownership of our consumer products have contributed to our relatively low effective corporate tax rate.

| | | December 29, | | | | December 30, | | | | December 31, | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Net sales | | $ | 546,326 | | | $ | 818,486 | | | $ | 331,947 | | | $ | 909,690 | | | $ | 439,348 | |

| Cost of goods sold | | | 205,822 | | | | 381,281 | | | | 148,238 | | | | 511,988 | | | | 109,943 | |

| Gross profit | | | 340,504 | | | | 437,205 | | | | 183,709 | | | | 397,702 | | | | 329,405 | |

| Advertising expense | | | 31,005 | | | | 90,871 | | | | 15,516 | | | | 33,122 | | | | 6,629 | |

| Research and development expense | | | 48,448 | | | | 66,985 | | | | 55,965 | | | | 125,660 | | | | 170,902 | |

| Total operating expenses | | | 156,469 | | | | 276,609 | | | | 131,542 | | | | 286,400 | | | | 204,641 | |

| Operating income | | $ | 184,035 | | | $ | 160,596 | | | $ | 52,167 | | | $ | 111,302 | | | $ | 124,764 | |

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| | | Net Sales | | | | % of Revenue | | | | Net Sales | | | | % of Revenue | | | | $ Change | | | | % Change | |

The outdoor and fitness segment revenue increases were primarily driven by growth in wearables.

_Cost of Goods Sold_

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Cost of Goods | | | | % of Revenue | | | | Cost of Goods | | | | % of Revenue | | | | $ Change | | | | % Change | |

| Outdoor | | $ | 281,629 | | | 35 | % | | | $ | 250,457 | | | 36 | % | | | $ | 31,172 | | | 12 | % |

| Fitness | | | 386,565 | | | 45 | % | | | | 339,558 | | | 45 | % | | | | 47,007 | | | 14 | % |

| Marine | | | 182,804 | | | 41 | % | | | | 161,409 | | | 43 | % | | | | 21,395 | | | 13 | % |

| Auto | | | 363,420 | | | 57 | % | | | | 442,441 | | | 56 | % | | | | (79,021 | ) | | (18 | %) |

| Aviation | | | 153,307 | | | 25 | % | | | | 129,754 | | | 26 | % | | | | 23,553 | | | 18 | % |

| Total | | $ | 1,367,725 | | | 41 | % | | | $ | 1,323,619 | | | 42 | % | | | $ | 44,106 | | | 3 | % |

Cost of goods sold increased 3% in absolute dollars for fiscal year 2018 when compared to fiscal year 2017.

The increase in revenue outpaced the increase in cost of goods sold, which resulted in a 150 basis point decrease in cost of goods sold as a percent of revenue compared to the prior fiscal year.

The marine segment decrease in cost of goods sold, as a percent of revenue, primarily resulted from the favorable impact of higher margin cartography sales on product mix.

The outdoor segment decrease in cost of goods sold, as a percent of revenue, was primarily due to shifts in product mix.

The auto segment cost of goods decline was largely consistent with the segment revenue decline.

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| | | Gross Profit | | | | % of Revenue | | | | Gross Profit | | | | % of Revenue | | | | $ Change | | | | % Change | |

Gross profit dollars in 2018 increased 10% while gross margin increased 150 basis points when compared to the prior year.

Gross margin increased in the outdoor and marine segments as a result of the reasons discussed above.

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[removed: Market Sensitivity][added: Market Sensitivity]

[removed: Inflation][added: Inflation]

[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]

The Company has not historically [removed: hedged] [added: used financial instruments to hedge] its foreign currency exchange rate risks.

Garmin Corporation, headquartered in [removed: Xizhi,] Taiwan, uses the local currency as the functional currency.

However, the functional currency of our largest European subsidiary, Garmin (Europe) Ltd., is the U.S. Dollar, and as some transactions have occurred [added: and balances reside] in British Pounds Sterling or Euros, foreign currency gains or losses have been realized historically related to the movements of those currencies relative to the U.S. Dollar.

[removed: The Company believes that gains] [added: Gains] and losses [removed: will] [added: may] become more material in the future as our European presence grows.

During fiscal year [removed: 2018,] [added: 2019,] the Company incurred a net foreign currency loss of [removed: $7.6] [added: $16.8] million.

The [removed: strengthening of the] U.S. Dollar [added: strengthening] against the Euro and [added: weakening against] the [removed: British Pound Sterling] [added: Taiwan Dollar] was [added: partially] offset by the U.S. Dollar [removed: strengthening] [added: weakening] against the [removed: Taiwan Dollar.][added: British Pound Sterling.]

During fiscal [removed: 2018,] [added: 2019,] the U.S. Dollar strengthened [removed: 4.7%] [added: 2.3%] against the Euro and [removed: 6.0%] [added: weakened 1.5%] against the [removed: British Pound Sterling,] [added: Taiwan Dollar,] resulting in losses of [removed: $10.0] [added: $9.3] million and [removed: $1.7] [added: $7.1] million, respectively, while the U.S. Dollar [removed: strengthened 3.0%] [added: weakened 2.9%] against the [removed: Taiwan Dollar,] [added: British Pound Sterling,] resulting in a gain of [removed: $15.1] [added: $2.8] million.

The remaining net currency loss of [removed: $11.0] [added: $3.2] million was related to [added: the] timing of transactions and impacts of other currencies, each of which was individually immaterial.

These and other currency moves during fiscal year [removed: 2018] [added: 2019] also resulted in a currency translation adjustment of [removed: $32.0] [added: $8.0] million within [removed: accumulated] [added: Accumulated] other comprehensive [removed: income.][added: income on the Company’s Consolidated Balance Sheets.]

Based on monetary assets and liabilities denominated in currencies other than respective functional currencies as of December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] hypothetical and reasonably possible adverse changes of 10% for the Taiwan Dollar, Euro, and British Pound Sterling would have resulted in an adverse impact on [removed: income] [added: Income] before income taxes [added: on the Company’s Consolidated Statements] of [added: Income of] approximately [removed: $109 million] [added: $90] and [removed: $96] [added: $109] million at December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] respectively.

During [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the Company did not record any material impairment charges on its outstanding securities.

Based on balance sheet positions as of December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] the hypothetical and reasonably possible 100 basis point increases in interest rates across all securities would have resulted in declines in portfolio fair market value of approximately [removed: $38] [added: $35] million and [removed: $42] [added: $38] million at December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] respectively.

| --- | --- |

The Company translates all assets and liabilities at the rate of exchange in effect at the balance sheet date and income and expense activity at the approximate rate of exchange at the transaction date.

The Company translates all assets and liabilities at year-end exchange rates and income and expense accounts at average rates during the year.

| --- | --- |

This discussion of the business of Garmin Ltd. ("Garmin" or the "Company") should be read in conjunction with, and is qualified by reference to, “Management's Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 herein and the information set forth in response to Item 101 of Regulation S-K in such Item 7 is incorporated herein by reference in partial response to this Item 1.

Garmin has identified five reportable segments for external reporting purposes: auto, aviation, fitness, marine, and outdoor.

There are two operating segments (auto PND and auto OEM) that are not reported separately but are aggregated within the auto reportable segment.

The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker (CODM), allocates resources and assesses performance of each operating segment individually.

Garmin was incorporated in Switzerland on February 9, 2010 as successor to Garmin Ltd., a Cayman Islands company (“Garmin Cayman”).

Garmin Cayman was incorporated on July 24, 2000 as a holding company for Garmin Corporation, a Taiwan corporation, in order to facilitate a public offering of Garmin Cayman shares in the United States.

On June 27, 2010, Garmin became the ultimate parent holding company of the Garmin group of companies pursuant to a share exchange transaction effected for the purpose of changing the place of incorporation of the ultimate parent holding company of the Garmin group from the Cayman Islands to Switzerland (the “Redomestication”).

Pursuant to the Redomestication, all issued and outstanding Garmin Cayman common shares were transferred to Garmin and each common share, par value U.S. $0.005 per share, of Garmin Cayman was exchanged for one registered share, par value 10 Swiss francs (CHF) per share, of Garmin.

At the Company’s Annual General Meeting on June 10, 2016, the Company’s shareholders approved the cancellation of 10,000,000 registered shares of the Company held by the Company (the “Formation Shares”) and the reduction in par value of each share of the Company from CHF 10 to CHF 0.10 and the amendment of the Company’s Articles of Association to effect a corresponding share capital reduction.

This share cancellation has reduced authorized shares from 208,077,418 shares to 198,077,418 shares, with an incremental 99,038,709 conditional shares that may be issued through the exercise of option rights, which are granted to Garmin employees or members of its Board of Directors.

Garmin owns, directly or indirectly, all of the operating companies in the Garmin group.

Garmin’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statement and Forms 3, 4 and 5 filed by Garmin’s directors and executive officers and all amendments to those reports will be made available free of charge through the Investor Relations section of Garmin’s website (http://www.garmin.com) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The reference to Garmin’s website address does not constitute incorporation by reference of the information contained on this website, and such information should not be considered part of this report on Form 10-K.

Company Overview

For more than 30 years, Garmin Ltd. and subsidiaries (together, the “Company”) has pioneered new wireless devices and applications that are designed for people who live an active lifestyle, many of which feature Global Positioning System (GPS) navigation.

Garmin serves five primary business units, including auto, aviation, fitness, marine, and outdoor.

We believe it is through these business units that Garmin is able to achieve synergies in raw material purchases, manufacturing, distribution, research and development, and marketing efforts making for a stronger, more effective company.

Garmin designs, develops, manufactures, markets, and distributes a diverse family of hand-held, wearable, portable, and fixed-mount GPS-enabled products and other navigation, communications, sensor-based and information products.

Since the inception of its business, Garmin has delivered over 220 million products, which included more than 15 million products delivered during fiscal 2019.

Products

Garmin offers a broad range of solutions across its reportable segments as outlined below.

In general, Garmin believes that its products are known for their value, high performance, ease of use, innovation, and ergonomics.

Many of the Company’s products utilize Global Positioning System (GPS) and other global navigation satellite systems (GNSS) receivers as a product feature that can be utilized in a variety of applications, including navigation, global positioning and tracking.

GPS is a United States owned satellite network constellation that supports global positioning and navigation, providing precise geographic location and related data to both commercial and government GPS receivers.

Commercial access to GPS is provided free of charge.

In addition to GPS, other global navigation satellite systems (GNSS) utilized by Garmin products include Japan’s MTSAT-based Satellite Augmentation System (MSAS), the European Geostationary Navigation Overlay Service (EGNOS) aviation Safety of Life (SoL) service, the Russian Global Navigation Satellite System (GLONASS), the European Union Galileo system, and the Chinese BeiDou Navigation Satellite System (BDS).

Some of Garmin’s products utilize a combination of global navigation satellite systems to improve navigational fix, which results in improved accuracy.

On a subscription basis, certain Garmin products offer access to the Iridium satellite network, a synchronized constellation of 66 low Earth orbit (LEO) satellites offering global data communication coverage.

Iridium’s use of a LEO constellation network with 66 satellites gives it the ability to span the entire globe, offering 100 percent coverage worldwide to enable satellite-based communication.

Fitness

Garmin offers a broad range of products designed for use in fitness and lifestyle activities.

Garmin currently offers the following product categories within the Fitness segment to consumers around the world:

| | • | *Running and Multi-sport Watches:* Garmin running and multi-sport watches are offered under the Forerunner® product series. The Forerunner series offers GPS-enabled watches with features unique to each model. Depending on model, features include wrist-based heart rate monitoring, wrist-based pulse oximeter, music storage capabilities, and Garmin Pay™ contactless payment. |

| --- | --- | --- |

| | • | *Cycling Products:* Garmin cycling products include cycling computers, power meters, and safety and awareness equipment. Additionally, Garmin offers Tacx® indoor training equipment, including smart and basic trainers. |

| --- | --- | --- |

| | • | *Activity Tracking and Smartwatch Devices:* Garmin offers a wide range of activity tracking device and smartwatch devices. The Garmin product offerings include basic activity trackers, activity tracking fitness bands, GPS-enabled smartwatches, and fashion-forward hybrid smartwatches with analog style displays. The activity tracking and smartwatch devices offered by Garmin are the vívomove® series, vívoactive® series, vívosmart® series, vívofit® series, vívosport® series, and the Venu™. Each series of activity tracking and smartwatch devices offered has unique features, all to enhance and promote healthy and active lifestyles. Features of the activity tracking and smartwatch devices, depending on the series and model, include Garmin Pay, music storage capabilities, and 24/7 health monitoring. |

| --- | --- | --- |

The Company settled or resolved certain [removed: other] matters during the fiscal year ended December [removed: 29, 2018] [added: 28, 2019] that did not individually or in the aggregate have a material impact on the Company’s financial condition or results of operations.

| --- | --- |

_PulseOn Oy v.

Garmin (Europe) Ltd._

On November 11, 2016, PulseOn Oy filed suit in the Patents Court in London, England, against Garmin (Europe) Ltd. alleging infringement of alleged UK unregistered design rights and Registered European Community Design No. 002473769-0004 (the “0004 Design”) and Registered European Community Design No. 002473769-005 (the “0005 Design”) by certain Garmin products with wrist-worn heart rate monitors.

A trial was held in November 2017.

During the trial PulseOn abandoned its claim of infringement of alleged UK unregistered design rights.

On January 18, 2018 the court issued a judgment holding that no accused Garmin products infringed either the 0004 Design or the 0005 Design.

On February 21, 2018, PulseOn Oy filed an application with the Court of Appeal in England seeking leave to appeal the judgment of the Patent Court issued on January 18, 2018, holding that no accused Garmin products infringed either of the Registered Community Designs asserted by PulseOn Oy.

Leave to appeal was granted and the hearing of PulseOn’s appeal before the Court of Appeal took place on January 30 and 31, 2019.

On February 13, 2019, the Court of Appeal issued its judgment dismissing PulseOn’s appeal.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: FORM 10-K][added: FORM 10-K]

| [removed: | ☒] [added: \[☒\]] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

For the fiscal year ended December [removed: 29, 2018][added: 28, 2019]

| [removed: | ☐] [added: \[☐\]] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

For the transition period from [removed: _______] to [removed: _______]

[removed: GARMIN LTD.][added: GARMIN LTD.]

[removed: ][added: ]

| [removed: Switzerland] [added: Switzerland] (State or other jurisdiction of incorporation or organization) | [removed: 98-0229227] [added: 98-0229227] (I.R.S. Employer Identification No.) |

| [removed: Mühlentalstrasse 2 8200 Schaffhausen Switzerland] [added: Mühlentalstrasse 2 8200 Schaffhausen Switzerland] (Address of principal executive offices) | N/A (Zip Code) |

| [removed: Registered] [added: Registered] Shares, CHF 0.10 Per Share Par [removed: Value] [added: Value] | [removed: The] [added: | GRMN | | The] Nasdaq Stock Market, [removed: LLC] [added: LLC] |

| (Title of each class) | [added: | (Trading Symbol) | |] (Name of each exchange on which registered) |

[removed: YES ☑] [added: Yes \[☑\]] NO [removed: ☐][added: \[☐\]]

YES [removed: ☐ NO ☑][added: \[☐\] No \[☑\]]

[removed: YES ☑] [added: Yes \[☑\]] NO [removed: ☐][added: \[☐\]]

[removed: YES ☑] [added: Yes \[☑\]] NO [removed: ☐][added: \[☐\]]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company, or [added: an] emerging growth company.

| Large Accelerated Filer [removed: ☑] | [added: \[☑\]] | Accelerated Filer [removed: ☐] | [added: \[☐\] |]

| Non-accelerated Filer [removed: ☐] | [added: \[☐\]] | Smaller reporting company [removed: ☐] | [added: \[☐\] |]

| Emerging growth company [removed: ☐] | [added: \[☐\]] | | [added: |]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange [removed: Act.][added: Act.☐]

YES [removed: ☐] [added: \[☐\]] NO [removed: ☑][added: \[☑\]]

Aggregate market value of the common shares held by non-affiliates of the registrant as of June [removed: 30, 2018] [added: 29, 2019] (based on the closing price of the [removed: registrant’s] [added: registrant's] common shares on the Nasdaq Stock Market for June [removed: 29, 2018)] [added: 28, 2019)] was [removed: $7,753,502,173.][added: approximately $11,181,000,000.]

Number of shares outstanding of the registrant’s common shares as of February [removed: 15, 2019:][added: 14, 2020:]

Registered Shares, CHF 0.10 par value – [removed: 198,077,418 (including] [added: 190,687,357 (excluding] treasury shares)

[removed: Documents] [added: Documents] incorporated by [removed: reference:][added: reference:]

| [removed: Document |] [added: Document] | [removed: Part] [added: Part] of Form [removed: 10-K into which Incorporated] [added: 10‑K into which Incorporated] |

| [removed: Company’s] [added: Company's] Definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders which will be filed no later than 120 days after December [removed: 29, 2018. |] [added: 28, 2019.] | Part III |

[removed: 2018] [added: 2019] Form 10-K Annual [removed: Report][added: Report]

[removed: Table] [added: Table] of [removed: Contents][added: Contents]

[removed: | [Cautionary Statement With Respect To Forward-Looking Comments](#a001_v1) | | 4 |][added: CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING COMMENTS]

| [removed: [Part I](#a002_v1)] [added: [Part I](#PART_I)] | | |

| [removed: [Item 1.](#a003_v1)] [added: Item 1.] | [removed: [Business](#a003_v1)] [added: [Business](#ITEM_1_BUSINESS)] | 4 |

| [removed: [Item 1A.](#a004_v1)] [added: Item 1A.] | [Risk [removed: Factors](#a004_v1)] [added: Factors](#ITEM_1A_RISK_FACTORS)] | [removed: 22] [added: 17] |

| [removed: [Item 1B.](#a005_v1)] [added: Item 1B.] | [Unresolved Staff [removed: Comments](#a005_v1)] [added: Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS)] | [removed: 36] [added: 30] |

| [removed: [Item 2.](#a006_v1)] [added: Item 2.] | [removed: [Properties](#a006_v1)] [added: [Properties](#ITEM_2_PROPERTIES)] | [removed: 36] [added: 30] |

| [removed: [Item 3.](#a007_v1)] [added: Item 3.] | [Legal [removed: Proceedings](#a007_v1)] [added: Proceedings](#ITEM_3_LEGAL_PROCEEDINGS)] | [removed: 37] [added: 31] |

| [removed: [Item 4.](#a008_v1)] [added: Item 4.] | [Mine Safety [removed: Disclosures](#a008_v1)] [added: Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURE)] | [removed: 37] [added: 31] |

| [removed: [Part II](#a010_v1)] [added: [Part II](#PART_II)] | | |

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| --- | --- |

| | |

| [Information about our Executive Officers](#EXECUTIVE_FICERS__REGISTRANT) | | 31 |

| | [Signatures](#SIGNATURES) | 100 |

10-K 1 s116041_10k.htm FORM 10K

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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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| | | |

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| [Executive Officers of the Registrant](#a009_v1) | | 37 |

| | [Signatures](#a028_v1) | 107 |

| | Item 1. | Business |

| --- | --- | --- |

This discussion of the business of Garmin Ltd. (“Garmin” or the “Company”) should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 herein and the information set forth in response to Item 101 of Regulation S-K in such Item 7 is incorporated herein by reference in partial response to this Item 1.

Garmin has identified five reportable segments for external reporting purposes: auto, aviation, marine, outdoor and fitness.

There are two operating segments (auto PND and auto OEM) that are not reported separately but are aggregated within the auto reportable segment.

The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (CODM), who allocates resources and assesses performance of each segment individually.

Garmin was incorporated in Switzerland on February 9, 2010 as successor to Garmin Ltd., a Cayman Islands company (“Garmin Cayman”).

Garmin Cayman was incorporated on July 24, 2000 as a holding company for Garmin Corporation, a Taiwan corporation, in order to facilitate a public offering of Garmin Cayman shares in the United States.

On June 27, 2010, Garmin became the ultimate parent holding company of the Garmin group of companies pursuant to a share exchange transaction effected for the purpose of changing the place of incorporation of the ultimate parent holding company of the Garmin group from the Cayman Islands to Switzerland (the “Redomestication”).

Pursuant to the Redomestication, all issued and outstanding Garmin Cayman common shares were transferred to Garmin and each common share, par value U.S. $0.005 per share, of Garmin Cayman was exchanged for one registered share, par value 10 Swiss francs (CHF) per share, of Garmin.

At the Company’s Annual General Meeting on June 10, 2016, the Company’s shareholders approved the cancellation of 10,000,000 registered shares of the Company held by the Company (the “Formation Shares”) and the reduction in par value of each share of the Company from CHF 10 to CHF 0.10 and the amendment of the Company’s Articles of Association to effect a corresponding share capital reduction.

This share cancellation has reduced authorized shares from 208,077,418 shares to 198,077,418 shares, with an incremental 99,038,709 conditional shares that may be issued through the exercise of option rights, which are granted to Garmin employees or members of its Board of Directors.

Garmin owns, directly or indirectly, all of the operating companies in the Garmin group.

Garmin’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statement and Forms 3, 4 and 5 filed by Garmin’s directors and executive officers and all amendments to those reports will be made available free of charge through the Investor Relations section of Garmin’s website (http://www.garmin.com) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The reference to Garmin’s website address does not constitute incorporation by reference of the information contained on this website, and such information should not be considered part of this report on Form 10-K.

Company Overview

For nearly 30 years, Garmin Ltd. and subsidiaries (together, the “Company”) has pioneered new Global Positioning System (GPS) navigation and wireless devices and applications that are designed for people who live an active lifestyle.

Garmin serves five primary business units, including auto, aviation, fitness, marine, and outdoor.

We believe it is through these business units that Garmin is able to achieve synergies in raw material purchases, manufacturing, distribution, research and development and marketing efforts making for a stronger, more effective company.

Garmin designs, develops, manufactures, markets and distributes a diverse family of hand-held, wearable, portable and fixed-mount GPS-enabled products and other navigation, communications, sensor-based and information products.

In 2018, Garmin celebrated a milestone in delivering its 200 millionth product since the inception of the business and delivered more than 14.9 million products during the year.

Overview of the Global Positioning System

The Global Positioning System (GPS) is a global navigation satellite system that is able to provide precise geographic location and data to GPS receivers.

The system consists of a constellation of orbiting satellites and provides global coverage.

Access to GPS is provided free of charge.

GPS satellites and their ground control and monitoring stations are maintained and operated by the United States Department of Defense, which maintains an ongoing satellite replenishment program to ensure continuous global system coverage.

Garmin utilizes a variety of other global navigation satellite systems (GNSS) including, but not limited to:

| | ● | Japan’s MTSAT-based Satellite Augmentation System (MSAS) which achieved initial operating capability for enroute, terminal and approach navigation for aviation on September 27, 2007. |

| --- | --- | --- |

| --- | --- |

Depending on location, the properties could be used for manufacturing, warehousing, research and development, office space, or a [removed: combination.][added: combination of activities.]

The [removed: second phase of the expansion will include renovation of the existing warehouse and] [added: previous] manufacturing [removed: center] [added: and distribution space is currently being renovated] into a research and development facility and supporting office space.

In connection with the bond financings for the facility in Olathe and the expansions of that facility, the City of Olathe holds the legal title to the Olathe [removed: facility,] [added: facilities,] which [removed: is] [added: are] leased to Garmin’s subsidiaries by the City.

Garmin AT, Inc. owns and occupies a 115,000 square foot facility for office, development and manufacturing use and a 33,000 square foot aircraft [removed: hangar,] [added: hangar that serves as a] flight test and certification facility on this land.

These facilities are [added: also] used for [removed: the manufacturing and warehousing of most of Garmin’s consumer and portable aviation products, as well as] some research and development activities and the marketing and support of products for Asia Pacific countries.

Garmin China YangZhou Co., Ltd. [removed: also] leases a 204,000 square foot manufacturing facility in Yangzhou, Jiangsu, People’s Republic of China.

| --- | --- |

The 1,990,000 square feet includes a newly constructed 775,000 square foot manufacturing and distribution center.

These facilities are used for the manufacturing and warehousing of most of Garmin’s auto, fitness, marine, and outdoor products, as well as portable aviation products.

In October 2018, Garmin International, Inc. completed the construction of a new 775,000 square foot manufacturing and distribution center in Olathe, Kansas, which concluded the first phase of an expansion project that began in 2016.

Pursuant to General Instruction G(3) of Form 10-K and instruction 3 to paragraph (b) of Item 401 of Regulation S-K, the following list is included as an unnumbered Item in Part I of this Annual Report on Form 10-K in lieu of being included in the Company’s Definitive Proxy Statement in connection with its annual meeting of shareholders scheduled for June [removed: 7, 2019.][added: 5, 2020.]

[removed: Kao,] [added: Kao,] age [removed: 70,] [added: 71,] has served as Executive Chairman of Garmin Ltd. since January 2013 and was previously Chairman of Garmin Ltd. from August 2004 to December 2012 and Co-Chairman of Garmin Ltd. from August 2000 to August 2004.

[removed: Clifton] [added: Clifton] A.

[removed: Pemble,] [added: Pemble,] age [removed: 53,] [added: 54,] has served as a director of Garmin Ltd. since August 2004.

Previously, he served as President and Chief Operating Officer of Garmin Ltd. from October 2007 to December [removed: 2012, and is currently maintaining the role of principal operating officer.][added: 2012.]

Previously, he was Vice President, Engineering of Garmin International, Inc. from 2005 to October 2007, Director of Engineering of Garmin International, Inc. from 2003 to 2005, [removed: and] Software Engineering Manager of Garmin International, Inc. from 1995 to [removed: 2002] [added: 2002,] and a Software Engineer with Garmin International, Inc. from 1989 to 1995.

Boessen, age [removed: 56,] [added: 57,] has served as Chief Financial Officer and Treasurer of Garmin Ltd. since July 2014.

[removed: Andrew] [added: Andrew] R.

[removed: Etkind,] [added: Etkind,] age [removed: 63,] [added: 64,] has served as Vice President, General Counsel and Secretary of Garmin Ltd. since June 2009.

| --- | --- |

Information about our Executive Officers

Executive Officers of the Registrant

Dr. Min H.

Kao is the brother of Ruey-Jeng Kao, who is a supervisor of Garmin Corporation, Garmin’s Taiwan subsidiary, who serves as an ex-officio member of Garmin Corporation’s Board of Directors.

As of February [removed: 15, 2019,] [added: 14, 2020,] there were [removed: 180] [added: 199] shareholders of record.

The Company made no repurchases of shares during the [removed: year] [added: years] ended December 29, [removed: 2018.][added: 2018 and December 28, 2019.]

See Note 11 [added: in the Notes to the Consolidated Financial Statements] for additional information regarding the share repurchase plan.

[removed: Stock] [added: Stock] Performance [removed: Graph][added: Graph]

[removed: _This] [added: This] performance graph shall not be deemed [removed: ’‘filed’’] [added: ‘‘filed’’] with the SEC or subject to Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act of 1933, as [removed: amended._][added: amended.]

The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from [removed: 12/31/2013] [added: December 31, 2014 (“12/14”)] to [removed: 12/31/2018.][added: December 31, 2019 (“12/19”).]

[removed: |  | | |][added: ]

[removed: _The] [added: The] stock price performance included in this graph is not necessarily indicative of future stock price [removed: performance._][added: performance.]

| --- | --- |

| | | 12/14 | | | | 12/15 | | | | 12/16 | | 12/17 | | 12/18 | | 12/19 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Garmin Ltd. | | | 100.00 | | | | 73.93 | | | 100.99 | | 128.85 | | 141.51 | | 223.77 | | |

| NASDAQ Composite | | | 100.00 | | | 106.96 | | | | 116.45 | | 150.96 | | 146.67 | | 200.49 | | |

| NASDAQ 100 | | | 100.00 | | | 109.75 | | | | 117.73 | | 156.58 | | 156.63 | | | 218.44 | |

| COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Garmin Ltd., the NASDAQ Composite Index and the NASDAQ 100 Index | | |

| --- | --- | --- |

| | | |

| | | |

| | *$100 invested on 12/31/13 in stock or index, including reinvestment of dividends. | |

| | Fiscal year ending December 31. | |

| | | | 12/13 | | | | 12/14 | | | | 12/15 | | | | 12/16 | | | | 12/17 | | | | 12/18 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| Garmin Ltd. | | | 100.00 | | | | 118.40 | | | | 87.53 | | | | 119.57 | | | | 152.55 | | | | 167.55 | |

| NASDAQ Composite | | | 100.00 | | | | 114.62 | | | | 122.81 | | | | 133.19 | | | | 172.11 | | | | 165.84 | |

| NASDAQ 100 | | | 100.00 | | | | 120.99 | | | | 136.23 | | | | 148.44 | | | | 198.95 | | | | 198.30 | |

The selected consolidated balance sheet data as of December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017] [added: 29, 2018] and the selected consolidated [removed: statement] [added: statements] of income data for the years ended December [added: 28, 2019, December] 29, 2018, [removed: December 30, 2017,] and December [removed: 31, 2016] [added: 30, 2017] were derived from the Company’s audited [removed: consolidated financial statements] [added: Consolidated Financial Statements] and the related notes thereto which are included in Item 8 of this annual report on Form 10-K.

The selected consolidated balance sheet data as of December [added: 30, 2017, December] 31, 2016, [removed: December 26, 2015,] and December [removed: 27, 2014] [added: 26, 2015] and the selected consolidated [removed: statement] [added: statements] of income data for the years ended December [removed: 26, 2015] [added: 31, 2016] and December [removed: 27, 2014] [added: 26, 2015] were derived from the Company’s audited [removed: consolidated financial statements,] [added: Consolidated Financial Statements,] not included herein.

In the table presented below, the [added: selected] consolidated statements of income and [added: selected] balance sheet data for the years ended December 30, 2017 and December 31, 2016 and the [added: selected] balance sheet data for the year ended December 26, 2015 have been restated in accordance with the Company’s adoption of the new revenue recognition standard.

| | | Dec. [added: 28, 2019 | | | | Dec.] 29, 2018 | | | | Dec. 30, 2017 | | | | Dec. 31, 2016 | | | | Dec. 26, 2015 | | | [removed: | Dec. 27, 2014 | | |]

| Net sales | | $ | [removed: 3,347,444] [added: 3,757,505] | | | $ | [removed: 3,121,560] [added: 3,347,444] | | | $ | [removed: 3,045,797] [added: 3,121,560] | | | $ | [removed: 2,820,270] [added: 3,045,797] | | | $ | [removed: 2,870,658] [added: 2,820,270] | |

| Gross profit | | | [removed: 1,979,719] [added: 2,233,976] | | | | [removed: 1,797,941] [added: 1,979,719] | | | | [removed: 1,688,525] [added: 1,797,941] | | | | [removed: 1,538,704] [added: 1,688,525] | | | | [removed: 1,604,412] [added: 1,538,704] | |

| Operating income | | | [removed: 778,343] [added: 945,586] | | | | [removed: 683,637] [added: 778,343] | | | | [removed: 632,864] [added: 683,637] | | | | [removed: 549,581] [added: 632,864] | | | | [removed: 690,626] [added: 549,581] | |

| Net income [added: (2)] | | [removed: $] | [removed: 694,080] [added: 952,486] | | | [removed: $] | [removed: 709,007] [added: 694,080] | | | [removed: $] | [removed: 517,724] [added: 709,007] | | | [removed: $] | [removed: 456,227] [added: 517,724] | | | [removed: $] | [removed: 364,211] [added: 456,227] | |

| Diluted | | $ | [removed: 3.66] [added: 4.99] | | | $ | [removed: 3.76] [added: 3.66] | | | $ | [removed: 2.73] [added: 3.76] | | | $ | [removed: 2.39] [added: 2.73] | | | $ | [removed: 1.88] [added: 2.39] | |

| Diluted | | | [removed: 189,734] [added: 190,899] | | | | [removed: 188,732] [added: 189,734] | | | | [removed: 189,343] [added: 188,732] | | | | [removed: 191,107] [added: 189,343] | | | | [removed: 194,165] [added: 191,107] | |

| Dividends declared per share [added: (3)] | | $ | [removed: 2.12] [added: 2.28] | | | $ | [removed: 2.04] [added: 2.12] | | | $ | 2.04 | | | $ | 2.04 | | | $ | [removed: 1.92] [added: 2.04] | |

| Total assets | | | [removed: 5,382,858] [added: 6,166,799] | | | | [removed: 4,948,289] [added: 5,382,858] | | | | [removed: 4,484,549] [added: 4,948,289] | | | | [removed: 4,478,529] [added: 4,484,549] | | | | [removed: 4,693,303] [added: 4,478,529] | |

| Total stockholders’ equity | | | [removed: 4,162,974] [added: 4,793,496] | | | | [removed: 3,852,419] [added: 4,162,974] | | | | [removed: 3,453,259] [added: 3,852,419] | | | | [removed: 3,373,734] [added: 3,453,259] | | | | [removed: 3,403,367] [added: 3,373,734] | |

| [removed: |] (1) [removed: |] Our fiscal year-end is the last Saturday of the calendar year and does not always fall on December 31. All years presented contain 52 weeks excluding [removed: Fiscal] [added: fiscal] 2016 which includes 53 weeks. | [added: | | | | | | | | | | | | | | | | | | | |]

| [removed: | (4) | 2017 – includes] [added: (2) The following significant items are included in the Net income line that may affect comparability: In 2019, a $118.0 million income tax benefit was recognized resulting from the revaluation and step-up of certain Switzerland tax assets as a result of the enactment of Switzerland federal and Schaffhausen cantonal tax reform and related transitional measures; In 2017, a] $180.0 million income tax benefit [added: was recognized,] primarily related to the revaluation of certain Switzerland deferred tax assets resulting from the [removed: Company’s] [added: Company's] election to align Switzerland [removed: corproate] [added: corporate] tax positions with [removed: international] [added: global] tax initiatives, partially offset by $22.6 million of income tax expense due to the expiration of certain share-based [removed: awards;] [added: awards.] | [added: | | | | | | | | | | | | | | | | | | | |]

| --- | --- |

| Cash, cash equivalents, and marketable securities | | $ | 2,609,505 | | | $ | 2,714,844 | | | $ | 2,313,208 | | | $ | 2,327,120 | | | $ | 2,391,618 | |

| (3) Dividends declared per share refers to the cash dividend per share that has been approved by shareholders in the given fiscal year. See Note 2 - Summary of Significant Accounting Policies, Dividends for additional detail. | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Cost of goods sold | | | 1,367,725 | | | | 1,323,619 | | | | 1,357,272 | | | | 1,281,566 | | | | 1,266,246 | |

| Operating expenses: | | | | | | | | | | | | | | | | | | | | |

| Advertising expense | | | 155,394 | | | | 164,693 | | | | 177,143 | | | | 167,166 | | | | 146,633 | |

| Selling, general and administrative | | | 478,177 | | | | 437,977 | | | | 410,558 | | | | 394,914 | | | | 372,032 | |

| Research and development | | | 567,805 | | | | 511,634 | | | | 467,960 | | | | 427,043 | | | | 395,121 | |

| Total operating expenses | | | 1,201,376 | | | | 1,114,304 | | | | 1,055,661 | | | | 989,123 | | | | 913,786 | |

| Other income, net (2)(3) | | | 44,904 | | | | 13,434 | | | | 5,761 | | | | 17,606 | | | | 33,119 | |

| Income before income taxes | | | 823,247 | | | | 697,071 | | | | 638,625 | | | | 567,187 | | | | 723,745 | |

| Income tax provision (benefit) (4) | | | 129,167 | | | | (11,936 | ) | | | 120,901 | | | | 110,960 | | | | 359,534 | |

| Basic | | $ | 3.68 | | | $ | 3.77 | | | $ | 2.74 | | | $ | 2.39 | | | $ | 1.89 | |

| Basic | | | 188,635 | | | | 187,828 | | | | 188,818 | | | | 190,631 | | | | 193,106 | |

| Cash and cash equivalents | | $ | 1,201,732 | | | $ | 891,488 | | | $ | 846,883 | | | $ | 833,070 | | | $ | 1,196,268 | |

| Marketable securities | | | 1,513,112 | | | | 1,421,720 | | | | 1,480,237 | | | | 1,558,548 | | | | 1,575,333 | |

| --- | --- | --- |

| | (2) | Other income, net mainly consists of gain (loss) on sale of marketable securities, interest income, and foreign currency gain (loss). |

| --- | --- | --- |

| | (3) | Includes $7.6 million, $22.6 million, $31.7 million, $23.5 million, and $4.3 million of foreign currency losses in 2018, 2017, 2016, 2015, and 2014, respectively. |

| --- | --- | --- |

| --- | --- | --- |

2014 – includes $307.6 million income tax expense associated with our inter-company restructuring partially offset by $72.9 million income tax reserve release due to expiration of certain statutes of limitations or completion of tax audits

Years Ended December [added: 28, 2019, December] 29, 2018, [removed: December 30, 2017,] and December [removed: 31, 2016][added: 30, 2017]

[removed: Contents][added: Contents]

| [Report of Ernst & Young LLP, Independent Registered Public Accounting [removed: Firm](#b001_v1)] [added: Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC)] | [removed: 58] [added: 50] |

| [Consolidated Balance Sheets at December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017](#b002_v1)] [added: 29, 2018](#CONSOLIDATED_STATEMENTS_BALANCE)] | [removed: 59] [added: 53] |

| [Consolidated Statements of Income for the Years Ended December [added: 28, 2019, December] 29, 2018, [added: and] December 30, [removed: 2017, And December 31, 2016](#b003_v1)] [added: 2017](#CONSOLIDATED_STATEMENTS_INCOME)] | [removed: 60] [added: 54] |

| [Consolidated Statements of Comprehensive Income for the Years Ended December [removed: 29, 2018,] [added: 28, 2019,] December [removed: 30, 2017] [added: 29, 2018] and December [removed: 31, 2016](#b004_v1)] [added: 30, 2017](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] | [removed: 61] [added: 55] |

| [Consolidated Statements of Stockholders’ Equity for the Years Ended December [added: 28, 2019, December] 29, 2018, [removed: December 30, 2017,] and December [removed: 31, 2016](#b005_v1)] [added: 30, 2017](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] | [removed: 62] [added: 56] |

| [Consolidated Statements of Cash Flows for the Years Ended December [added: 28, 2019, December] 29, 2018, [removed: December 30, 2017,] and December [removed: 31, 2016](#b006_v1)] [added: 30, 2017](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] | [removed: 63] [added: 57] |

[removed: | [Notes to Consolidated Financial Statements](#b007_v1) | 65 |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of Garmin Ltd. and Subsidiaries (the Company) as of December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December [removed: 29, 2018] [added: 28, 2019,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December [removed: 29, 2018,] [added: 28, 2019,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December [removed: 29, 2018,] [added: 28, 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 20, 2019,] [added: 19, 2020,] expressed an unqualified opinion thereon.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or [removed: fraud] [added: fraud,] and performing procedures that respond to those risks.

[removed: Garmin] [added: | Garmin] Ltd. And [removed: Subsidiaries][added: Subsidiaries | | | | | | | | |]

[removed: Consolidated] [added: | Consolidated] Balance [removed: Sheets][added: Sheets | | | | | | | | |]

[removed: _(In] [added: | (In] thousands, except per share [removed: information)_][added: information) | | | | | | | | |]

| | | December [added: 28, 2019 | | | | December] 29, 2018 | | | | December 30, 2017 | | |

| Cash and cash equivalents | | $ | [removed: 1,201,732] [added: 1,027,567] | | | $ | [removed: 891,488] [added: 1,201,732] | |

| Marketable securities [removed: _(Note 3)_] [added: (*Note 3)*] | | | [removed: 182,989] [added: 376,463] | | | | [removed: 161,687] [added: 182,989] | |

| Accounts receivable, less allowance for doubtful accounts of [removed: $5,487] [added: $6,754] in [removed: 2018] [added: 2019] and [removed: $4,168] [added: $5,487] in [removed: 2017] [added: 2018] | | | [removed: 569,833] [added: 706,763] | | | | [removed: 590,882] [added: 569,833] | |

| Inventories | | | [removed: 561,840] [added: 752,908] | | | | [removed: 517,644] [added: 561,840] | |

| Deferred costs | | | [removed: 28,462] [added: 25,105] | | | | [removed: 30,525] [added: 28,462] | |

| Prepaid expenses and other current assets | | | [removed: 120,512] [added: 169,044] | | | | [removed: 153,912] [added: 120,512] | |

| Total current assets | | | [removed: 2,665,368] [added: 3,057,850] | | | | [removed: 2,346,138] [added: 2,665,368] | |

| Land and improvements | | | [removed: 131,689] [added: 132,951] | | | | [removed: 114,701] [added: 131,689] | |

| Building and improvements | | | [removed: 539,177] [added: 576,703] | | | | [removed: 482,794] [added: 539,177] | |

| Office furniture and equipment | | | [removed: 264,818] [added: 306,694] | | | | [removed: 246,107] [added: 264,818] | |

| Manufacturing equipment | | | [removed: 162,077] [added: 192,741] | | | | [removed: 156,119] [added: 162,077] | |

| Engineering equipment | | | [removed: 154,742] [added: 170,021] | | | | [removed: 141,321] [added: 154,742] | |

| Vehicles | | | [removed: 20,991] [added: 26,887] | | | | [removed: 21,115] [added: 20,991] | |

| Accumulated depreciation | | | [removed: (609,967] [added: (677,076] | ) | | | [removed: (566,473] [added: (609,967] | ) |

| Restricted cash [removed: _(Note 4)_] [added: (*Note 4)*] | | | [removed: 73] [added: 71] | | | | [removed: 271] [added: 73] | |

| Marketable securities [removed: _(Note 3)_] [added: (*Note 3)*] | | | [removed: 1,330,123] [added: 1,205,475] | | | | [removed: 1,260,033] [added: 1,330,123] | |

| Deferred income taxes [removed: _(Note 6)_] [added: (*Note 6)*] | | | [removed: 176,959] [added: 268,518] | | | | [removed: 195,981] [added: 176,959] | |

| Noncurrent deferred costs | | | [removed: 29,473] [added: 23,493] | | | | [removed: 33,029] [added: 29,473] | |

| Intangible assets, net | | | [removed: 417,080] [added: 659,629] | | | | [removed: 409,801] [added: 417,080] | |

| Other assets | | | [removed: 100,255] [added: 159,253] | | | | [removed: 107,352] [added: 100,255] | |

| | |

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill

Description of the Matter

The Company assigns goodwill acquired in business combinations to its reporting units as of each acquisition date.

At December 28, 2019, the Company’s goodwill balance related to the auto personal navigation device (“auto PND”) reporting unit was approximately $80 million.

As discussed in Note 2 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level.

Considering the uncertainty of future operating results and/or market conditions deteriorating faster or more drastically than the forecasts utilized in management’s estimation of fair value, the Company disclosed some or all of the approximately $80 million of goodwill associated with the auto PND reporting unit is at risk of future impairment.

Auditing management’s annual goodwill impairment test for the auto PND reporting unit was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting unit.

In particular, the fair value estimate was sensitive to significant assumptions such as the discount rate, projected future revenues, projected future operating margins, and terminal growth rates which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s auto PND goodwill impairment review process.

For example, we tested controls over management's review of the significant assumptions (e.g., discount rate, projected revenue growth rates, projected operating margins, terminal growth rates) used to develop the prospective financial information (PFI) for the quantitative analysis.

We also tested management's controls to validate that the data used in the valuation was complete and accurate.

To test the estimated fair value of the Company’s auto PND reporting unit, we performed audit procedures that included, among others, assessing the methodology and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We included valuation specialists on our team to review the Company’s model, method, and the more sensitive assumptions such as the discount rate and terminal growth assumptions.

We compared the significant assumptions used by management to current industry and economic trends, changes to the Company’s business model, forecasts used in the Company’s annual operating plans and other relevant factors.

We assessed the historical accuracy of management’s forecast estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the auto PND reporting unit that would result from changes in the assumptions.

We reconciled the fair value of the reporting unit to its carrying amount, testing the Company’s determination of the assets and liabilities used within the reporting unit that are the basis for the carrying amount.

In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.

Measurement of Reserve for Unrecognized Income Tax Benefits

Description of the Matter

The Company accounts for uncertainty in income taxes in accordance with the FASB ASC 740 topic, Income Taxes.

The Company operates in a multinational tax environment and is subject to tax laws, regulations and guidelines for intercompany transactions that have transfer pricing subjectivity.

For those uncertain tax positions that qualify for recognition, the Company uses significant judgment to measure the largest amount of benefit that is more likely than not to be realized upon ultimate settlement.

As discussed in Note 6 to the consolidated financial statements, the Company’s balance of gross unrecognized income tax benefits was $101 million at December 28, 2019, primarily related to transfer pricing positions.

Auditing management’s measurement of these material tax positions is complex and involved especially subjective and complex judgements.

The assessment process involves both significant judgment and estimation because the pricing of the intercompany transactions is based on pricing analyses that may produce a number of different outcomes or ranges of outcomes (e.g., the price that would be charged in an arm’s-length transaction).

Each transfer pricing tax position carries unique facts and circumstances that must be evaluated, and ultimate resolution will be dependent on uncontrollable factors, such as the interpretation of laws and regulations; new case law; the willingness of the income tax authority to settle the issue, including the timing thereof; and other factors.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the measurement and valuation of the uncertain tax position reserves related to transfer pricing from intercompany transactions.

For example, we tested controls over management’s review of inputs and calculations of these uncertain tax positions, which included management’s evaluation of the ranges of outcomes and pricing conclusions reached within the transfer pricing studies.

Our audit procedures included, among others, involving our tax professionals to test the Company’s measurement of tax positions related to transfer pricing used in intercompany transactions to assess the appropriateness of the ranges of outcomes utilized and the pricing conclusions reached within the transfer pricing studies conducted by the Company.

For example, we compared the transfer pricing methodology utilized by management to alternative methodologies and industry benchmarks.

We also verified our understanding of the relevant facts by reading the Company’s correspondence with the relevant tax authorities and any third-party advice obtained by the Company.

In addition, we used our knowledge of international and local income tax laws, as well as historical settlement activity from income tax authorities, to evaluate the appropriateness of the Company’s measurement of uncertain tax positions related to transfer pricing used in these intercompany transactions.

February 19, 2020

| | | | 1,405,997 | | | | 1,273,494 | |

Adoption of New Accounting Standard

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue in 2018 due to the adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the related amendments.

February 20, 2019

| | | | 1,273,494 | | | | 1,162,157 | |

| | | | 663,527 | | | | 595,684 | |

| Balance at December 26, 2015 | | $ | 1,797,435 | | | $ | 62,239 | | | $ | (414,637 | ) | | $ | 1,959,125 | | | $ | (30,428 | ) | | $ | 3,373,734 | |

| Net income | | | — | | | | — | | | | — | | | | 517,724 | | | | — | | | | 517,724 | |

| Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | 511,129 | |

| Dividends declared | | | — | | | | — | | | | — | | | | (384,629 | ) | | | — | | | | (384,629 | ) |

| Tax benefit from issuance of equity awards | | | — | | | | (6,309 | ) | | | — | | | | — | | | | — | | | | (6,309 | ) |

| Reduction in par value of Common Stock | | | (1,779,456 | ) | | | 1,779,456 | | | | — | | | | — | | | | — | | | | — | |

| Provision for doubtful accounts | | | 2,123 | | | | 1,021 | | | | 4,136 | |

| Provision for obsolete and slow-moving inventories | | | 24,579 | | | | 31,071 | | | | 26,458 | |

| Accounts receivable | | | 5,167 | | | | (40,088 | ) | | | 9,000 | |

| Inventories | | | (82,316 | ) | | | (38,575 | ) | | | (2,455 | ) |

| Tax benefit from issuance of equity awards | | | — | | | | — | | | | 1,692 | |

| Purchase of treasury stock under share repurchase plan | | | — | | | | (74,523 | ) | | | (93,233 | ) |

1.

2.

See Note 10.

In the next five years, the amortization expense is estimated to be $17,107, $15,125, $11,674, $9,390, and $8,452, respectively.

Management concluded that no other reporting units are currently at risk of impairment.

| June 30, 2016 | | June 16, 2016 | | $ | 0.51 | |

| September 30, 2016 | | September 15, 2016 | | $ | 0.51 | |

| December 30, 2016 | | December 14, 2016 | | $ | 0.51 | |

| March 31, 2017 | | March 15, 2017 | | $ | 0.51 | |

If investments are determined to be impaired, a loss is recognized at the date of determination.

Such amortization is included in interest income from investments.

Realized gains and losses, and credit declines in value judged to be other-than-temporary are included in other income.

| --- | --- | --- |

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which is intended to simplify the accounting for share-based payment awards.

The Company adopted ASU 2016-09 on a prospective basis during the quarter ended April 1, 2017.

ASU 2016-09 requires excess tax benefits or deficiencies from stock-based compensation to be recognized in the income tax provision.

The Company previously recorded these amounts to additional paid-in capital.

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | (1) | The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements of our fiscal 2017 Annual Report on Form 10-K filed with the SEC on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. |

| --- | --- | --- |

3.

| --- | --- | --- |

| --- | --- |

[removed: _(a)] [added: | | (a) |] Conclusion Regarding the Effectiveness of Disclosure Controls and [removed: Procedures_][added: Procedures |]

[removed: _(b)] [added: | | (b) |] Management’s Report on Internal Control over Financial [removed: Reporting_][added: Reporting |]

Management of the Company assessed the effectiveness of the Company’s internal control over financial reporting as of December [removed: 29, 2018.][added: 28, 2019.]

Based on such assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December [removed: 29, 2018.][added: 28, 2019.]

[removed: Ernst] [added: Total assets, excluding the net identifiable intangible assets and goodwill, and Net sales of Tacx represent 1.3% and 1.7%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 28, 2019.Ernst] & Young LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements, issued an attestation report on management’s effectiveness of the Company’s internal control over financial reporting as of December [removed: 29, 2018,] [added: 28, 2019,] as stated in their report which is included herein.

[removed: _(c) Attestation] [added: | | (c) | Attestation] Report of the Independent Registered Public Accounting [removed: Firm_][added: Firm |]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited Garmin Ltd. and Subsidiaries’ internal control over financial reporting as of December [removed: 29, 2018,] [added: 28, 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).

In our opinion, Garmin Ltd. and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December [removed: 29, 2018,] [added: 28, 2019,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the consolidated balance sheets of [removed: Garmin Ltd. and Subsidiaries] [added: the Company] as of December [removed: 29, 2018] [added: 28, 2019] and December [removed: 30, 2017,] [added: 29, 2018,] the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December [removed: 29, 2018,] [added: 28, 2019,] and the related notes and financial statement schedule listed in the Index at Item 15(a) [removed: (collectively referred to as the “consolidated financial statements”) of the Company] and our report dated February [removed: 20, 2019] [added: 19, 2020] expressed an unqualified opinion thereon.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Definition] [added: Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting]

[removed: _(d)] [added: | | (d) |] Changes in Internal Control over Financial [removed: Reporting_][added: Reporting |]

There were no changes in our internal control over financial reporting during the quarter ended December [removed: 29, 2018] [added: 28, 2019] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

| --- | --- |

| --- | --- | --- |

| --- | --- | --- |

We acquired Tacx on April 1, 2019, and excluded it from our assessment of the effectiveness of internal control over financial reporting as of December 28, 2019.

| --- | --- | --- |

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Tacx, which was acquired on April 1, 2019 and is included in the 2019 consolidated financial statements of the Company and constituted 1.3% of total assets, excluding net identifiable intangible assets and goodwill, as of December 28, 2019 and 1.7% of revenues, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Tacx.

February 19, 2020

| --- | --- | --- |

February 20, 2019

[removed: PART III][added: PART III]

| --- | --- |

Garmin’s definitive proxy statement in connection with its annual meeting of shareholders scheduled for June [removed: 7, 2019] [added: 5, 2020] (the “Proxy Statement”) will be filed with the Securities and Exchange Commission no later than 120 days after December [removed: 29, 2018.][added: 28, 2019.]

| | (a) | [removed: Directors] [added: Directors] of the [removed: Company] [added: Company] |

The information set forth in response to Item 401 of Regulation S-K under the headings “Proposal 5 – Re-election of [removed: five directors and election of one new director”] [added: six directors”] in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 10.

| | (b) | [removed: Executive] [added: Executive] Officers of the [removed: Company] [added: Company] |

The information set forth in response to Item 401 of Regulation S-K under the heading [removed: “Executive Officers of the Registrant”] [added: “Information about our Executive Officers”] in Part I of this Form 10-K is incorporated herein by reference in partial response to this Item 10.

The information set forth in response to Item 405 of Regulation S-K under the heading [removed: “Section] [added: “Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance”] [added: Reports”] in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 10.

| | [removed: (d)] [added: (d)] | Audit Committee and Audit Committee Financial Expert |

Peffer and [removed: Rebecca R.][added: Catherine A.]

Garmin’s Board of Directors has determined that Mr. [removed: Hartnett] [added: Hartnett, Ms. Lewis,] and Mr. Peffer are “audit committee financial experts” as defined by the SEC regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002.

| | [removed: (e)] [added: (e)] | Code of Ethics |

| --- | --- |

| | (c) | Delinquent Section 16(a) Reports |

Lewis.

| | (c) | Compliance with Section 16(a) of the Exchange Act |

Tilden.

The information set forth in response to Item 402 of Regulation S-K under the headings “Executive Compensation Matters” and “Proposal 5 - Re-election of [removed: five] [added: six] directors [removed: and election of one new director] – Non-Management Director Compensation” in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 11.

The information set forth in response to Item 407(e)(4) of Regulation S-K under the heading “Proposal 5 -Re-election of [removed: five] [added: six] directors [removed: and election of one new director] – Compensation Committee Interlocks and Insider Participation; Certain Relationships” in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 11.

| --- | --- |

[removed: Equity] [added: Equity] Compensation Plan [removed: Information][added: Information]

The following table gives information as of December [removed: 29, 2018] [added: 28, 2019] about the Garmin common shares that may be issued under all of the Company’s existing equity compensation plans, as adjusted for stock splits.

| --- | --- |

| | | A | | | | B | | | | C | | |

| Plan Category | | Number of securities to be issued upon outstanding options, exercise of warrants and rights | | | | Weighted- average exercise price of outstanding options, warrants and rights | | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) | | |

| Equity compensation plans approved by shareholders | | | 1,845,357 | | | $ | 51.46 | | | | 5,644,343 | |

| Total | | | 1,845,357 | | | $ | 51.46 | | | | 5,644,343 | |

| | | | | | | | | | | | | |

| | | A | | | | B | | | | C | | |

| | | | | | | | | | | Number of securities | | |

| | | | | | | | | | | remaining available for | | |

| | | | | | | | | | | future issuance under | | |

| | | Number of securities to be | | | | Weighted-average | | | | equity compensation | | |

| | | issued upon exercise of | | | | exercise price of | | | | plans (excluding | | |

| | | outstanding options, | | | | outstanding options, | | | | securities reflected in | | |

| Plan Category | | warrants and rights | | | | warrants and rights | | | | column A) | | |

| Equity compensation plans approved by shareholders | | | 2,184,857 | | | $ | 50.92 | | | | 4,875,785 | |

| Total | | | 2,184,857 | | | $ | 50.92 | | | | 4,875,785 | |

The information set forth in response to Item 404 of Regulation S-K under the heading “Proposal 5 – Re-election of [removed: five] [added: six] directors [removed: and election of one new director] - Compensation Committee Interlocks and Insider Participation; Certain Relationships” in the Proxy Statement is incorporated herein by reference in partial response to this Item 13.

The information set forth in response to Item 407(a) of Regulation S-K under the headings “Proposal 5 – Re-election of [removed: five directors and election of one new director”] [added: six directors”] in the Proxy Statement is hereby incorporated herein by reference in partial response to this Item 13.

| --- | --- |

[removed: PART IV][added: PART IV]

| --- | --- |

[removed: | | (a) | List] [added: (a)List] of Documents filed as part of this [removed: Report |][added: Report]

| [added: EXHIBIT] NUMBER | | DESCRIPTION |

| [removed: [3.1](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex3-1.htm)] [added: [3.1](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex3-1.htm)] | | [Articles of Association of Garmin Ltd., as amended and restated on June 8, [removed: 2018.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex3-1.htm)] [added: 2018. (incorporated by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K filed on February 20, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex3-1.htm)] |

| [removed: [3.2](http://www.sec.gov/Archives/edgar/data/1121788/000114420414010483/v367065_ex3-2.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/1121788/000121390019024259/f8k103019a1ex3-2_garmin.htm)] | | [Organizational Regulations of Garmin Ltd., as amended on [removed: February 14, 2014] [added: October 25, 2019] (incorporated by reference to Exhibit 3.2 of the Registrant’s [removed: Annual] [added: Amendment No.1 to Current] Report on Form [removed: 10-K] [added: 8-K/A] filed on [removed: February 19, 2014).](http://www.sec.gov/Archives/edgar/data/1121788/000114420414010483/v367065_ex3-2.htm)] [added: November 21, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000121390019024259/f8k103019a1ex3-2_garmin.htm)] |

| [10.18](http://www.sec.gov/Archives/edgar/data/1121788/000114420409010751/v140434_ex10-18.htm) | | [Garmin Ltd. 2009 Cash Incentive Bonus Plan (incorporated by reference to Exhibit 10.18 of the Registrant’s Annual Report on Form 10-K filed on February 25, [removed: 2009](http://www.sec.gov/Archives/edgar/data/1121788/000114420409010751/v140434_ex10-18.htm)] [added: 2009](http://www.sec.gov/Archives/edgar/data/1121788/000114420409010751/v140434_ex10-18.htm)).] |

| [10.60](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-60.htm) | | [Form of Restricted Stock Unit Award Agreement pursuant to the Garmin Ltd. 2005 Equity Incentive Plan, for non-Swiss and non-Canadian [removed: grantees.](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-60.htm)] [added: grantees (incorporated by reference to Exhibit 10.60 of the Registrant’s Annual Report on Form 10-K filed on February 21, 2018).](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-60.htm)] |

| [10.61](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-61.htm) | | [Form of Restricted Stock Unit Award Agreement pursuant to the Garmin Ltd. 2005 Equity Incentive Plan, for awards of performance-based and time-based vesting restricted stock unit awards to non-Swiss and non-Canadian grantees who are executive [removed: officers.](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-61.htm)] [added: officers (incorporated by reference to Exhibit 10.61 of the Registrant’s Annual Report on Form 10-K filed on February 21, 2018).](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-61.htm)] |

| [10.62](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-62.htm) | | [Form of Restricted Stock Unit Award Agreement pursuant to the Garmin Ltd. 2005 Equity Incentive Plan, for awards of performance-based and time-based vesting restricted stock unit awards to non-Swiss and non-Canadian grantee grantees who are not executive [removed: officers.](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-62.htm)] [added: officers (incorporated by reference to Exhibit 10.62 of the Registrant’s Annual Report on Form 10-K filed on February 21, 2018).](http://www.sec.gov/Archives/edgar/data/1121788/000161577418001344/s109029_ex10-62.htm)] |

| [removed: [10.63](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-63.htm)] [added: [10.63](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-63.htm)] | | [Garmin Ltd. 2011 Non-Employee Directors’ Equity Incentive Plan, as amended and restated on February 15, [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-63.htm)] [added: 2019 (incorporated by reference to Exhibit 10.63 of the Registrant’s Annual Report on Form 10-K filed on February 20, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-63.htm)] |

| [removed: [10.64](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-64.htm)] [added: [10.64](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-64.htm)] | | [Form of Restricted Stock Unit Award Agreement pursuant to the Garmin Ltd. 2011 Non-Employee Directors’ Equity Incentive Plan, as amended and restated on February 15, [removed: 2019.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-64.htm)] [added: 2019 (incorporated by reference to Exhibit 10.64 of the Registrant’s Annual Report on Form 10-K filed on February 20, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex10-64.htm)] |

| [removed: [21.1](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex21-1.htm)] [added: [21.1](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex211_11.htm)] | | [List of [removed: subsidiaries](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex21-1.htm)] [added: subsidiaries](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex211_11.htm)] |

| [removed: [23.1](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex23-1.htm)] [added: [23.1](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex231_10.htm)] | | [Consent of Ernst & Young [removed: LLP](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex23-1.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex231_10.htm)] |

| [removed: [24.1](#poa_v1)] [added: [24.1](#POWER_ATTORNEY)] | | [Power of Attorney (included in signature [removed: page)](#poa_v1)] [added: page)](#POWER_ATTORNEY)] |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex31-1.htm)] [added: [31.1](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex311_9.htm)] | | [Chief Executive Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex31-1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex311_9.htm)] |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex31-2.htm)] [added: [31.2](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex312_8.htm)] | | [Chief Financial Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex31-2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex312_8.htm)] |

| [removed: [32.1](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex32-1.htm)] [added: [32.1](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex321_6.htm)] | | [Chief Executive Officer’s Certification pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex32-1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex321_6.htm)] |

| [removed: [32.2](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex32-2.htm)] [added: [32.2](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex322_7.htm)] | | [Chief Financial Officer’s Certification pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000161577419002739/s116041_ex32-2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex322_7.htm)] |

| Exhibit 101.SCH | | [added: Inline] XBRL Taxonomy Extension Schema |

| Exhibit 101.CAL | | [added: Inline] XBRL Taxonomy Extension Calculation Linkbase |

| Exhibit 101.LAB | | [added: Inline] XBRL Taxonomy Extension Label Linkbase |

| Exhibit 101.PRE | | [added: Inline] XBRL Taxonomy Extension Presentation Linkbase |

| Exhibit 101.DEF | | [added: Inline] XBRL Taxonomy Extension Definition Linkbase |

[removed: | | (b) | Exhibits. |][added: (b)Exhibits]

[removed: | | (c) | Financial] [added: (c)Financial] Statement [removed: Schedules. |][added: Schedules]

| --- | --- |

| [4.1](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex41_584.htm) | | [Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934](https://www.sec.gov/Archives/edgar/data/1121788/000156459020005133/grmn-ex41_584.htm) |

| [10.65](http://www.sec.gov/Archives/edgar/data/1121788/000121390019010354/f8k060719ex10-1_garmin.htm) | | [Garmin Ltd. 2005 Equity Incentive Plan, as amended and restated on June 7, 2019 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on June 10, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000121390019010354/f8k060719ex10-1_garmin.htm) |

| [10.66](http://www.sec.gov/Archives/edgar/data/1121788/000121390019010354/f8k060719ex10-2_garmin.htm) | | [Garmin Ltd. Employee Stock Purchase Plan, as amended and restated on June 7, 2019 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on June 10, 2019).](http://www.sec.gov/Archives/edgar/data/1121788/000121390019010354/f8k060719ex10-2_garmin.htm) |

| | | |

| | | |

| Exhibit 101.INS | | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| Exhibit 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| EXHIBIT | | |

| --- | --- | --- |

| Exhibit 101.INS | | XBRL Instance Document |

[removed: SCHEDULE] [added: SCHEDULE] II - VALUATION AND QUALIFYING [removed: ACCOUNTS][added: ACCOUNTS]

[removed: Garmin] [added: Garmin] Ltd. and [removed: Subsidiaries][added: Subsidiaries]

[removed: (_In thousands_)][added: (*In thousands*)]

| [added: Description] | | [added: Balance at Beginning of Period] | [removed: Beginning of] | | | [added: Charged to Costs and Expenses] | [removed: Costs and] | | | [added: Charged to Other Accounts] | [removed: Other] | | | [added: Deductions] | | | | [added: Balance at End of Period] | [removed: End of] | |

| Year Ended December [removed: 31,] [added: 30,] 2017: | | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful [removed: accounts(1)] [added: accounts (1)] | | $ | 14,669 | | | $ | 1,021 | | | $ | — | | | $ | (11,522 | ) | | $ | 4,168 | |

| Year Ended December [removed: 31, 2016:] [added: 28, 2019:] | | | | | | | | | | | | | | | | | | | | |

| Valuation allowance - Deferred Tax Asset | | | [removed: 2,781] [added: 4,568] | | | | [removed: 1,966] [added: 1,556] | | | | — | | | | [removed: (125] [added: (1,562] | ) | | | [removed: 4,622] [added: 4,562] | |

| [removed: |] (1) [removed: |] The $11.5 million deduction from the allowance for doubtful accounts during the fiscal year ended December 30, 2017 was a result of the write-off of uncollectable accounts that had previously been fully reserved. | [added: | | | | | | | | | | | | | | | | | | | |]

[removed: SIGNATURES][added: SIGNATURES]

Dated: February [removed: 20, 2019][added: 19, 2020]

[removed: POWER] [added: POWER] OF [removed: ATTORNEY][added: ATTORNEY]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February [removed: 20, 2019.][added: 19, 2020.]

| [removed: _/s/_] [added: /s/] Clifton A. Pemble | | |

| [removed: _Director,] [added: Director,] President and Chief Executive [removed: Officer_] [added: Officer] | | |

| [removed: _(Principal] [added: (Principal] Executive [removed: Officer)_] [added: Officer)] | | |

| [removed: _/s/_] [added: /s/] Douglas G. Boessen | | |

| [removed: _Chief] [added: Chief] Financial Officer and [removed: Treasurer_] [added: Treasurer] | | |

| [removed: _(Principal] [added: (Principal] Financial Officer and Principal Accounting [removed: Officer)_] [added: Officer)] | | |