2017 Annual Report.Pdf

DEAR SHAREHOLDER, Investors are increasingly interested in the purpose a company serves, the values it embraces, and the strategies it employs. We welcome the focus on these essential qualities, as Garmin has always been a company of strong purpose, built on a foundation of time-honored values, and guided by proven strategies. Our purpose, embodied in our mission, is to be an enduring company by creating superior products for automotive, aviation, marine, outdoor, and sports that are an essential part of our customers’ lives. The culture of our company reflects the values we embrace. The foundation of our culture is honesty, integrity, and respect for our associates, customers, and business partners. Our associates are fully committed to serving customers and their fellow associates through outstanding performance and accomplishing what we say we will do. We employ five key strategies to create sustainable long-term value for our shareholders: We hire talented associates and provide them with competitive compensation, generous benefits, career growth opportunities and a fun and engaging work environment that encourages long-term contributions; We offer products with essential utility, leading-edge technologies, compelling features, and exceptional ease-of-use to create clear differentiators our customers appreciate and desire; We embrace a vertically integrated business model with strategic design, manufacturing, distribution, sales, and support centers around the world to maximize our value to customers; We relentlessly pursue innovation to create new products and markets that lead to growth opportunities; and We continuously reinvest in people, facilities, and equipment to focus on long-term success and stability. Our focus on our mission, values, and strategies is unmistakably evident. Revenue grew 2% for the full year and operating income grew 7%, ahead of revenue due to strong margin performance. Outdoor, aviation, marine, and fitness grew 9% on a combined basis, generated 76% of our revenue, and 90% of our operating income for the year. We believe that we are well positioned for long-term success and value creation. With this in mind, our Board of Directors is proposing to increase our dividend, which is one of several items we are asking shareholders to approve at our 2018 annual meeting. In addition to strong financial performance, I am very pleased to report that we have also been recognized as a solid corporate citizen. Last year, Garmin was named one of the Global 2000 World’s Best Employers, placing 430 out of the 360,000 companies that were evaluated. We were also named as one of Forbes Magazine’s Just 100, America’s Best Corporate Citizens. This ranking took into consideration companies’ focus on seven metrics: producing quality goods, treating customers well, minimizing environmental impact, supporting the communities we operate in, committing to ethical and diverse leadership, and above all, treating workers well. For the last 14 consecutive years, Garmin was ranked #1 in avionics support by Professional Pilot Magazine and by Aviation International News, and we were named manufacturer of the year by the National Marine Electronics Association for the third consecutive year. Our global team of associates delivered strong financial performance and so much more in 2017, and I am proud of all that they accomplished. I want to thank our shareholders for your interest in Garmin, as we look forward to another successful year together in 2018. CLIFF PEMBLE PRESIDENT AND CEO UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 30, 2017 or [ ] 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 GARMIN LTD. (Exact name of registrant as specified in its charter) Switzerland 98-0229227 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) Mühlentalstrasse 2 8200 Schaffhausen N/A Switzerland (Zip Code) (Address of principal executive offices) Registrant’s telephone number, including area code: +41 52 630 1600 Securities registered pursuant to Section 12(b) of the Act: Registered Shares, CHF 0.10 Per Share Par Value The Nasdaq Stock Market, LLC (Title of each class) (Name of each exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [√] NO [ ] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES [ ] NO [√ ] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [√] NO [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [√ ] NO [ ] 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. [√ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer [√ ] Accelerated Filer [ ] Non-accelerated Filer [ ] Smaller reporting company [ ] (Do not check if a smaller reporting company) Emerging growth company [ ] 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 Act.[ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [√ ] Aggregate market value of the common shares held by non-affiliates of the registrant as of July 1, 2017 (based on the closing price of the registrant's common shares on the Nasdaq Stock Market for that date) was $6,129,443,292. Number of shares outstanding of the registrant’s common shares as of February 16, 2018: Registered Shares, CHF 0.10 par value – 198,077,418 (including treasury shares) Documents incorporated by reference: Portions of the following document are incorporated herein by reference into Part III of the Form 10-K as indicated: Part of Form 10-K into Document which Incorporated Company's Definitive Proxy Statement for the 2018 Annual Meeting of Shareholders which will Part III be filed no later than 120 days after December 30, 2017. Garmin Ltd. 2017 Form 10-K Annual Report Table of Contents Cautionary Statement With Respect To Forward-Looking Comments ....................................................... 4 Part I Item 1. Business ................................................................................................................................................. 4 Item 1A. Risk Factors........................................................................................................................................... 21 Item 1B. Unresolved Staff Comments ................................................................................................ 34 Item 2. Properties ............................................................................................................................................. 34 Item 3. Legal Proceedings ................................................................................................................................ 35 Item 4. Mine Safety Disclosures ....................................................................................................................... 36 Executive Officers of the Registrant..................................................................................................... 36 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ................................................................................................................................... 38 Item 6. Selected Financial Data ........................................................................................................................ 40 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ........................................................................................................................................... 42 Item 7A. Quantitative and Qualitative Disclosures About Market Risk .............................................................

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