Follow the leader. 2007 ANNUAL REPORT 2007 HIGHLIGHTS 2007 Highlights 1 Letter to shareholders 2 Follow the leader — Garmin 4 Aviation 6 Automotive and mobile 8 Marine 12 Outdoor and fitness 14 Leading the market with a world-class brand 16 Building for the future 18 Growth initiatives for 2008 20 Testimonials 22 Financial summary 24 Board of directors inside back cover TABLE OF CONTENTS > Revenue of $3.18 billion, up 79% > Net income of $855 million, up 66% > Sold more personal navigation devices than any other company worldwide > Acquired distributors in Germany, France, Italy and Spain and increased European market share > Acquired Digital Cyclone, Inc., a leader in providing personalized weather intelligence for wireless devices > Acquired the assets of Nautamatic Marine Systems, Inc., makers of marine autopilot technology 1 TO OUR SHAREHOLDERS As I reflect on 2007, I am proud to note that the efforts of our I will continue to serve as Chairman and CEO of Garmin Ltd. and associates, distributors and suppliers have resulted in a year of Garmin International, Inc., and will partner with Cliff to provide unprecedented growth. In 2007 we saw double- or triple-digit revenue corporate leadership. Handing off leadership duties to Cliff will growth in all four business segments: automotive and mobile, outdoor allow me to devote more of my time to business development, and fitness, aviation, and marine. We also reached a milestone of strategic planning and the development of our Asia-Pacific business 31 million units shipped since our company’s inception. The Garmin initiatives. family is expanding, too. In 2007 we welcomed our distributors in These developments give me great personal satisfaction as well as France, Germany, Spain and Italy to the company. That, along with confidence that our company is poised for continued growth. increased hiring at our existing facilities, brings our total employment as of December 31, 2007, to nearly 8,500 associates worldwide. Finally, I’d like to extend my appreciation to our associates, distributors, shareholders and customers around the globe whose enthusiasm for, In 2007 we also signed a six-year extension to our agreement with and belief in, our products is responsible for Garmin’s continued success. NAVTEQ, our digital map data supplier. This extension ensures the availability of quality mapping data for our customers and provides a basis for collaboration in developing enhanced mapping capabilities. Yet even with so much growth and change, Garmin has never wavered from our mission: to enrich the lives of our customers, suppliers, distributors, associates and stockholders by designing, manufacturing and selling navigation and communication products that provide Dr. Min H. Kao, Chairman and CEO superior quality, safety and operational features, lower cost of manufacturing and ownership, and sufficient profits to support desired company growth. Garmin’s customers know that they can depend on us for innovation, quality, reliability and support. This gives us a strong, enthusiastic following in each of our market segments. We have operations on three continents: North America, Europe and Asia. As consumer demand for GPS technology increases, especially in the automotive market, Garmin has opportunities to deliver new, innovative products to consumers. Our growing company requires strong, dedicated leadership to direct our future endeavors. Accordingly, I am delighted that Cliff Pemble has taken on the role of President and Chief Operating Officer of Garmin Ltd. Cliff has also succeeded me as President of Garmin International, Inc. and assumed direct supervision of all North American Garmin subsidiaries. Cliff has been an instrumental part of this company since its inception and has the ability to lead and to serve in all markets. I am confident that his past experiences and his vision for the future will promote our company’s success for many years to come. 2 3 FOLLOW THE LEADER—GARMIN Garmin, a pioneer in the field of GPS technology in 1989, still leads Automotive and mobile revenues were up an impressive 115% the way today. The insight and dedication that led our founders to from 2006. Aviation increased by 27% and marine by 22%. The bring GPS to the consumer market remain an integral part of our outdoor and fitness market increased 19%. company. We continually challenge ourselves to find new ways of The most successful leaders do not rest on past accomplishments, bringing our innovative technology to everyday applications. This and neither will Garmin. In the coming year, we look forward to spirit of leadership has led Garmin to repeated success in a market the challenge of increasing our PND market share in the emerging that barely existed 18 years ago. markets of Asia and Australia. And, as always, our innovative Garmin designs, manufactures and markets navigation, communication research and development teams will continue to create new, more and information devices, many of which are enabled by GPS (global useful and affordable ways to bring GPS technology to consumers positioning system) technology. GPS uses satellites to locate a user’s in every market. position, display it on an electronic map and provide guidance Leadership— it’s what Garmin has been doing from the beginning, to other locations on Earth. We manage our operations through and we plan to continue the adventure. facilities in North America, Europe and Asia. Garmin is a leader in the general aviation and consumer markets with products serving aviation, marine, outdoor, fitness, automotive, mobile electronics and wireless applications. Garmin achieved the worldwide number one spot for mobile navigation devices in 2007. CANALYS, INDEPENDENT TECHNOLOGY MARKET ANALYST FIRM While expanding our markets to serve our customers, Garmin has seen great success. We introduced many new products in 2007 and generated $3.18 billion in revenue. This represents Garmin’s 17th consecutive year of revenue growth since we delivered our first products in 1991. Since inception, Garmin has shipped more than 31 million units, with more than 12.3 million units sold in 2007 alone. Garmin is the world leader in PND (personal navigation device) sales. This year we solidified our European presence by acquiring our distributors in Italy, Spain, France and Germany. These acquisitions, along with increased marketing and growing demand, led to an increase of 63% in European revenue. Asian revenue was up 66%, and North American revenue led the way with an 89% increase. Each individual market segment also increased. 4 5 AVIATION Aviation is Garmin’s most mature market, and it also has a loyal, images that are brighter and more vivid in all lighting conditions. A enthusiastic following. Pilots depend on Garmin avionics and unique split screen function allows the pilot to simultaneously view portable systems to add safety and improved situational awareness two charting options along with the vertical profile for the elevation to every flight. of the terrain along the route of flight. Since inception, Garmin has delivered more than 5,000 integrated The GTX 328 Mode S transponder was introduced in Europe to satisfy flight deck systems to OEMs (original equipment manufacturers). the European requirements for a Mode S solution that meets the Piper’s new PiperJet, available in 2010, will feature the latest Garmin reduced certification requirements for the VFR Mode S mandate. avionics when it is released. Socata will be using the G1000® in the Garmin also introduced an all-glass panel avionics suite, the G900x™, designed for kitplane builders of the popular Lancair and Van’s The cockpit was underwater for RV-series aircraft. Pilot My-Cast™ is a subscription-based mobile phone application with innovative new-in-2007 features that let pilots wirelessly file a almost four hours and the Garmin flight plan, view graphical winds aloft and PIREPS, and check FA. These new services join other features such as NEXRAD, METARs and TAFs displayed in text and graphic formats, moving weather 496 was still functioning. maps, lightning data, SIGMETs,AIRMETs, PIREPs, visible and infrared P.R., TESTIMONIALS PAGE 22 satellite loops, textual winds aloft and more. Garmin also completed more than 18,000 WAAS upgrades for TBM 850 with deliveries beginning in January 2008; and Diamond’s customers and saw continued growth in WAAS-enabled panel upcoming single, the DA50, will sport the G1000, too. Piper selected mount upgrades. A WAAS-capable receiver delivers position accuracy the G1000 all-glass cockpit as an option on its Saratoga II TC and of better than three meters 95% of the time, enabling pilots to Piper 6X. A trio of exciting announcements came from September’s determine their precise locations. National Business Aviation Association (NBAA) meeting and convention. The G1000 will be available as a retrofit option on the The full-featured GPSMAP® 496 remains one of Garmin’s strongest King Air 200 and B200. Cessna also selected the G1000 integrated portable aviation units. Though the aviation portable market is avionics suite for the Caravan series of turboprops. mature, Garmin continues to increase revenue and units sold by introducing new and innovative products in the market. Portable Garmin’s successful G1000 is the only general aviation cockpit system aviation unit revenue increased 5% in 2007. that can provide all essential cockpit technologies in a single, highly integrated system, including all primary flight, navigation, autopilot, Commitment to our loyal aviation customers doesn’t end in product terrain avoidance, communication, and engine and aircraft sensor development. We back up those products with dedicated support data on the dual 10-inch, XGA-resolution displays. The physical teams. In September, Aviation International News delivered the architecture of the system lends itself to easy installation and service, news that Garmin’s aviation product support team had been ranked which lowers ownership costs. The system is also expandable, making number one for the fourth year in a row.