Unassociated Document
United
States
Securities
and Exchange Commission
Washington,
D.C. 20549
FORM
11-K
x |
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the
year ended December 31, 2007
or
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the
transition period from ________ to _________
Commission
File Number: 0-31983
A. Full
title of the plan and the address of the plan, if different from that of the
issuer named below:
Garmin
International, Inc. 401(k) and Pension Plan
c/o
Garmin International, Inc.
1200
East
151st
Street
Olathe,
KS 66062
B. Name
of
issuer of the securities held pursuant to the plan and the address of its
principal executive office:
Garmin
Ltd.
P.O.
Box
10670
45
Market
Street, Suite 3206B
Gardenia
Court, Camana Bay
Grand
Cayman KY1-1006
Cayman
Islands
Garmin
International, Inc.
401(k)
and Pension Plan
Financial
Statements and
Supplemental
Schedule
December
31, 2007 and 2006, and the
Year
Ended December 31, 2007
Contents
|
1
|
|
|
Financial
Statements
|
|
|
|
Statements
of Net Assets Available for Benefits
|
2
|
Statement
of Changes in Net Assets Available for Benefits
|
3
|
Notes
to Financial Statements
|
4
|
|
|
Supplemental
Schedule
|
9
|
|
|
Schedule
H, Line 4i - Schedule of Assets (Held at End of Year)
|
10
|
A
schedule of party-in-interest transactions has not been presented because there
were no party-in-interest transactions, which are prohibited by ERISA Section
406 and for which there is no statutory or administrative exemption. Schedules
of loans, fixed income obligations, and leases in default or uncollectible
are
not presented, since such loans, fixed income obligations, or leases that are
required to be listed in the respective schedule are not
present.
Report
of
Independent Registered Public Accounting Firm
The
Plan
Administrator
Garmin
International, Inc.
401(k)
and Pension Plan
We
have
audited the accompanying statements of net assets available for benefits of
the
Garmin International, Inc. 401(k) and Pension Plan (the Plan) as of December
31,
2007 and 2006, and the related statement of changes in net assets available
for
benefits for the year ended December 31, 2007. These financial statements are
the responsibility of the Plan’s management. Our responsi-bility is to express
an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform
an
audit of the Plan’s internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan’s
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at December
31, 2007 and 2006, and the changes in its net assets available for benefits
for
the year ended December 31, 2007, in conformity with U.S. generally accepted
accounting principles.
Our
audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2007, is presented for purposes of
additional analysis and is not a required part of the financial statements,
but
is supplementary information required by the Department of Labor’s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan’s management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to
the
financial statements taken as a whole.
/s/
Earnst & Young LLP
Kansas
City, Missouri
June
26,
2008
Garmin
International, Inc.
401(k)
and Pension Plan
Statements
of Net Assets
Available
for Benefits
|
|
December
31
|
|
|
|
2007
|
|
2006
|
|
Assets
|
|
|
|
|
|
|
|
Investments,
at fair value
|
|
$
|
149,515,501
|
|
$
|
105,920,487
|
|
|
|
|
|
|
|
|
|
Receivables:
|
|
|
|
|
|
|
|
Employer
contributions
|
|
|
1,209,287
|
|
|
969,872
|
|
Employee
contributions
|
|
|
976,151
|
|
|
738,550
|
|
Total
receivables
|
|
|
2,185,438
|
|
|
1,708,422
|
|
Net
assets available for benefits at fair value
|
|
|
151,700,939
|
|
|
107,628,909
|
|
|
|
|
|
|
|
|
|
Adjustment
from fair value to contract value for interest
|
|
|
|
|
|
|
|
in
fully benefit responsive investment contracts in
|
|
|
|
|
|
|
|
common
collective trust
|
|
|
(18,919
|
)
|
|
22,807
|
|
Net
assets available for benefits
|
|
$
|
151,682,020
|
|
$
|
107,651,716
|
|
See
accompanying notes.
Garmin
International, Inc.
401(k)
and Pension Plan
Statement
of Changes in Net Assets
Available
for Benefits
Year
Ended December 31, 2007
Additions
|
|
|
|
|
Dividends
and interest income
|
|
$
|
7,953,660
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
Employee
contributions
|
|
|
9,634,502
|
|
Employer
contributions
|
|
|
11,046,402
|
|
Rollover
contributions
|
|
|
3,767,825
|
|
|
|
|
24,448,729
|
|
|
|
|
|
|
Total
additions
|
|
|
32,402,389
|
|
|
|
|
|
|
Deductions
|
|
|
|
|
Distributions
to participants
|
|
|
(3,094,851
|
)
|
Administrative
expenses
|
|
|
(59,751
|
)
|
|
|
|
(3,154,602
|
)
|
|
|
|
|
|
Net
appreciation in fair value of investments (Note
3)
|
|
|
14,782,517
|
|
Net
increase
|
|
|
44,030,304
|
|
|
|
|
|
|
Net
assets available for benefits at beginning of year
|
|
|
107,651,716
|
|
Net
assets available for benefits at end of year
|
|
$
|
151,682,020
|
|
See
accompanying notes.
Garmin
International, Inc.
401(k)
and Pension Plan
Notes
to
Financial Statements
December
31, 2007
1.
Description of the Plan
The
Garmin International, Inc. 401(k) and Pension Plan (the Plan) is a contributory
defined contribution plan available to full-time employees who are at least
21
years of age and have completed three months of service with Garmin
International, Inc. (the Company), a wholly owned subsidiary of Garmin Ltd.
Participants are permitted to enter the Plan after meeting eligibility
requirements on either January 1 or July 1. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Eligible employees may contribute up to 50% of their annual compensation subject
to Internal Revenue Code (the Code) maximum limitations. The Company matches
75%
of an employee’s contributions up to 10% of the employee’s compensation. Certain
other discretionary employer contributions to the Plan are at the sole
discretion of the Company’s Board of Directors.
Under
provisions of the Plan, participants direct the investment of their
contributions into one or more of the investment accounts
available.
Participants
become fully vested in employer matching contributions to the Plan after five
years of continuous service. The vesting percentages are as follows: 0% through
one year of service, 20% after one year, 40% after two years, 60% after three
years, 80% after four years, and 100% after five years of continuous service.
Participants become fully vested in discretionary profit-sharing contributions
after seven years of continuous service. The vesting percentages are as follows:
0% through two years of service, 10% after two years, 20% after three years,
40%
after four years, 60% after five years, 80% after six years, and 100% after
seven years. The nonvested portions of terminated participants’ account balances
are forfeited, and such forfeitures serve to reduce future employer
contributions. The Plan retained $178,006 in forfeitures at December 31, 2007,
and $215,139 at December 31, 2006. Upon termination of employment or at
retirement age, a participant may receive either a lump-sum amount equal to
the
value of the participant’s vested account balance, or the Plan will purchase an
annuity with the lump-sum amount.
Participants
may borrow from the Plan in the form of a loan. The loan is limited to the
amount the participant may borrow without the loan being treated as a taxable
distribution. The loan and any outstanding loan balance may not be more than
50%
of the participant’s vested account balance, not including discretionary
profit-sharing contributions or merged Garmin International, Inc. Money Purchase
Pension Plan (the MPP) contribution balances, or $50,000, whichever is less.
The
vested account provides the security for the loan, and the participant’s account
may not
Garmin
International, Inc.
401(k)
and Pension Plan
Notes
to
Financial Statements (continued)
1.
Description of the Plan (continued)
be
used
as security for a loan outside of the Plan. Additionally, loans must be repaid
with interest within five years from the date of the loan unless the loan is
used to buy the participant’s principal residence. The loan may be repaid before
it is due.
Although
the Company has not expressed any intent to do so, it has the right under the
plan provisions to terminate the Plan subject to the provisions of ERISA. In
the
event of plan termination, participants will become fully vested in their
benefits. Additional information about
the
Plan and its vesting and withdrawal provisions is contained in the Summary
Plan
Description, Garmin
International, Inc. 401(k) and Pension Plan. Copies
of
the Summary Plan
Description are available from the plan administrator.
2.
Summary of Significant Accounting Policies
The
following is a summary of significant accounting policies of the
Plan.
Investment
Valuation and Income Recognition
The
Plan’s investments are stated at fair value. Shares of mutual funds are valued
based on quoted market prices which represent the net asset value of shares
held
by the Plan at year-end. The fair value of the participation units in common
collective trusts (other than the T. Rowe Price Stable Value Fund) is based
on
quoted redemption values on the last business day of the Plan’s year-end.
Participant loans are valued at their outstanding balances, which approximate
fair value.
As
described in Financial Accounting Standards Board Staff Position (FSP) AAG
INV-1
and SOP 94-4-1, Reporting
of Fully Benefit Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and Defined Contribution
Health and Welfare and Pension Plans
(the
FSP), investment contracts held by a defined contribution plan are required
to
be reported at fair value. However, contract value is the relevant measurement
attribute for that portion of the net assets available for benefits of a defined
contribution plan attributable to fully benefit responsive investment contracts
because contract value is the amount participants would receive if they were
to
initiate permitted transactions under the terms of the Plan. The Plan invests
in
investment contracts through a common collective trust (T. Rowe Price Stable
Value Fund). As required by the FSP, the statement of net assets available
for
benefits presents the fair value of the investment in the
Garmin
International, Inc.
401(k)
and Pension Plan
Notes
to
Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
common
collective trust as well as the adjustment from fair value to contract value
for
fully benefit responsive investment contracts. The fair value of the Plan’s
interest in the T. Rowe Price Stable Value Fund is based on information reported
by the issuer of the common collective trust at year-end. The contract value
of
the T. Rowe Price Stable Value Fund represents contributions plus earnings,
less
participant withdrawals and administrative expenses.
Purchases
and sales of securities are recorded on a trade-date basis. Dividends are
recorded on the ex-dividend date.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Recently
Issued Accounting Pronouncements
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 157, Fair
Value Measurement.
This
standard clarifies the definition of fair value for financial reporting,
establishes a framework for measuring fair value, and requires additional
disclosures about the use of fair value measurements. SFAS No. 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007. Plan management is currently evaluating the effect that the provisions
of
SFAS No. 157 will have on the Plan’s financial statements.
3.
Investments
All
investment information disclosed in the accompanying financial statements and
schedules including investments held at December 31, 2007 and 2006, the
adjustment from fair value to contract value for fully benefit responsive
investment contracts at December 31, 2007 and 2006, and net appreciation in
fair
value of investments and investment income for the year ended December 31,
2007,
was obtained or derived from information supplied to the plan administrator
and
certified as complete and accurate by T. Rowe Price Trust Company, the trustee
of the Plan.
Garmin
International, Inc.
401(k)
and Pension Plan
Notes
to
Financial Statements (continued)
3.
Investments (continued)
The
Plan’s investments were held by T. Rowe Price Trust Company at December 31, 2007
and 2006. During 2007, the Plan’s investments (including investments bought and
sold, as well as held, during the year) increased in fair value by $14,782,517
as presented in the following table:
Garmin
Ltd. common stock
|
|
$
|
13,756,144
|
|
Mutual
funds
|
|
|
1,026,373
|
|
|
|
$
|
14,782,517
|
|
The
fair
value of individual investments that represent 5% or more of the Plan’s net
assets is as follows:
|
|
December
31
|
|
|
|
2007
|
|
2006
|
|
Fair
value as determined by quoted market price:
|
|
|
|
|
|
|
|
Oakmark
Equity and Income Fund
|
|
$
|
10,198,687
|
|
$
|
8,742,197
|
|
T.
Rowe Price Equity Index Trust
|
|
|
–
|
|
|
8,125,218
|
|
Garmin
Ltd. common stock
|
|
|
39,373,762
|
|
|
22,602,180
|
|
T.
Rowe Price Equity Income Fund
|
|
|
10,468,370
|
|
|
7,283,640
|
|
T.
Rowe Price Growth Stock Fund
|
|
|
8,233,372
|
|
|
|
|
Vanguard
Institutional Index Fund
|
|
|
9,147,665
|
|
|
|
|
4.
Income Tax Status
The
underlying nonstandardized prototype plan has received an opinion letter from
the Internal Revenue Service (IRS) dated February 27, 2002, stating that the
form of the Plan is qualified under Section 401 of the Code, and therefore,
the
related trust is tax-exempt. In accordance with Revenue Procedure 2006-6 and
Announcement 2001-77, the plan sponsor has determined that
it
is
eligible to and has chosen to rely on the current IRS prototype plan opinion
letter. Once qualified, the Plan is required to operate in conformity with
the
Code to maintain its qualification. The plan administrator believes the Plan
is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the
related trust is tax-exempt.
Garmin
International, Inc.
401(k)
and Pension Plan
Notes
to
Financial Statements (continued)
5.
Transactions With Parties in Interest
The
Company pays certain administrative costs and provides certain accounting and
adminis-trative services to the Plan for which no fees are charged.
6.
Risks and Uncertainties
The
Plan
invests in various investment securities. Investment securities are exposed
to
various risks such as interest rate, market, and credit risks. Due to the level
of risk associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in
the
near term and that such changes could materially affect participants’ account
balances and the amounts reported in the statements of net assets available
for
benefits.
7.
Subsequent Events
The
Plan
held approximately 26% of its assets in Garmin Ltd. stock at year-end. As of
May
30, 2008, the stock price for the Garmin Ltd. stock decreased approximately
50%
from its market price at December 31, 2007.
Supplemental
Schedule
Garmin
International, Inc.
401(k)
and Pension Plan
EIN
#48-1088407 Plan #001
Schedule
H, Line 4i - Schedule of Assets
(Held
at
End of Year)
December
31, 2007
|
|
Number
|
|
|
|
|
|
of
Shares
|
|
Fair
|
|
Identity
of Issuer
|
|
or
Units
|
|
Value
|
|
|
|
|
|
|
|
Columbia
Acorn Fund
|
|
|
179,621
|
|
$
|
5,318,577
|
|
Old
Mutual Real Estate Fund
|
|
|
166,715
|
|
|
1,508,773
|
|
Oakmark
Equity and Income Fund
|
|
|
379,413
|
|
|
10,198,687
|
|
Oakmark
International Fund
|
|
|
175,416
|
|
|
3,674,977
|
|
Oppenheimer
International Growth Fund
|
|
|
147,936
|
|
|
4,597,839
|
|
Lord
Abbett Mid-Cap Value Fund
|
|
|
83,508
|
|
|
1,550,737
|
|
Garmin
Ltd. common stock*
|
|
|
405,915
|
|
|
39,373,762
|
|
PIMCO
Total Return Fund
|
|
|
162,053
|
|
|
1,732,346
|
|
T.
Rowe Price Stable Value Fund*
|
|
|
3,182,117
|
|
|
3,201,037
|
|
T.
Rowe Price Mid-Cap Value Fund*
|
|
|
150,208
|
|
|
3,373,681
|
|
T.
Rowe Price New Income Fund*
|
|
|
340,804
|
|
|
3,080,869
|
|
T.
Rowe Price Prime Reserve Fund*
|
|
|
4,623,788
|
|
|
4,623,788
|
|
T.
Rowe Price Small-Cap Value Fund*
|
|
|
83,340
|
|
|
2,993,559
|
|
T.
Rowe Price Mid-Cap Growth Fund*
|
|
|
116,444
|
|
|
6,715,346
|
|
T.
Rowe Price Small-Cap Stock Fund*
|
|
|
77,889
|
|
|
2,367,047
|
|
T.
Rowe Price Equity Income Fund*
|
|
|
372,540
|
|
|
10,468,370
|
|
T.
Rowe Price Growth Stock Fund*
|
|
|
244,604
|
|
|
8,233,372
|
|
T.
Rowe Price Retirement Income Fund*
|
|
|
5,329
|
|
|
70,880
|
|
T.
Rowe Price Retirement 2010 Fund*
|
|
|
75,732
|
|
|
1,227,608
|
|
T.
Rowe Price Retirement 2020 Fund*
|
|
|
338,692
|
|
|
6,008,404
|
|
T.
Rowe Price Retirement 2030 Fund*
|
|
|
341,737
|
|
|
6,510,094
|
|
T.
Rowe Price Retirement 2040 Fund*
|
|
|
371,043
|
|
|
7,124,034
|
|
Vanguard
Institutional Index Fund
|
|
|
68,195
|
|
|
9,147,665
|
|
Vanguard
Small Cap Index Fund
|
|
|
12,436
|
|
|
405,160
|
|
Vanguard
Mid Cap Ind-Signal
|
|
|
54,163
|
|
|
1,606,464
|
|
Lazard
Emerging Markets Portfolio
|
|
|
130,259
|
|
|
3,110,578
|
|
Loans
to participants, interest rates from 4.5% to
|
|
|
|
|
|
|
|
8.75%,
maturities through September 26, 2037
|
|
|
–
|
|
|
1,291,847
|
|
|
|
|
|
|
$
|
149,515,501
|
|
*Indicates
party in interest to the Plan.