☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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.

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.YES ☐ NO ☐NO☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Number of shares outstanding of the registrant’s common shares as of October ~~28, 2019~~23, 2020

Registered Shares, CHF 0.10 par value: ~~198,077,418~~ ~~(including~~191,237,445 (excluding treasury shares)

Garmin Ltd. ~~And~~and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share information)


	13-Weeks Ended						39-Weeks Ended
	September 28,			September 29,			September 28,			September 29,			13-Weeks Ended					39-Weeks Ended
	2019			2018			2019			2018			September 26, 2020		September 28, 2019			September 26, 2020			September 28, 2019
Net sales	$	934,383		$	810,011		$	2,655,273		$	2,415,336		$	1,109,194	$	934,383		$	2,835,168		$	2,655,273

Cost of goods sold		366,925			329,264			1,060,752			984,783			441,211		366,925			1,144,816			1,060,752

Gross profit		567,458			480,747			1,594,521			1,430,553			667,983		567,458			1,690,352			1,594,521

Advertising expense		32,668			31,140			101,808			100,000			33,866		32,668			90,031			101,808
Selling, general and administrative expense		124,769			114,669			380,289			352,234
Selling, general and administrative expenses														142,134		124,769			411,335			380,289
Research and development expense		148,561			138,979			443,361			422,649			174,882		148,561			506,013			443,361
Total operating expense		305,998			284,788			925,458			874,883			350,882		305,998			1,007,379			925,458

Operating income		261,460			195,959			669,063			555,670			317,101		261,460			682,973			669,063

Other income (expense):
Interest income		12,309			11,089			39,748			32,310			7,777		12,309			30,258			39,748
Foreign currency losses		(16,296	)		(6,868	)		(12,568	)		(3,405	)
Other income		294			1,147			3,567			6,800
Foreign currency gains (losses)														10,113		(16,296	)		(9,802	)		(12,568	)
Other income (expense)														1,726		294			8,515			3,567
Total other income (expense)		(3,693	)		5,368			30,747			35,705			19,616		(3,693	)		28,971			30,747

Income before income taxes		257,767			201,327			699,810			591,375			336,717		257,767			711,944			699,810

Income tax provision		29,901			17,113			108,115			87,445			23,300		29,901			53,168			108,115

Net income	$	227,866		$	184,214		$	591,695		$	503,930		$	313,417	$	227,866		$	658,776		$	591,695

Net income per share:
Basic	$	1.20		$	0.98		$	3.12		$	2.67		$	1.64	$	1.20		$	3.45		$	3.12
Diluted	$	1.19		$	0.97		$	3.10		$	2.66		$	1.63	$	1.19		$	3.44		$	3.10

Weighted average common shares outstanding:
Basic		190,102			188,799			189,853			188,554			191,234		190,102			191,021			189,853
Diluted		190,962			190,005			190,790			189,586			191,998		190,962			191,760			190,790

See accompanying notes.

Garmin Ltd. ~~And~~and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)


	13-Weeks Ended						39-Weeks Ended
	September 28,			September 29,			September 28,			September 29,			13-Weeks Ended					39-Weeks Ended
	2019			2018			2019			2018			September 26, 2020		September 28, 2019			September 26, 2020		September 28, 2019
Net income	$	227,866		$	184,214		$	591,695		$	503,930		$	313,417	$	227,866		$	658,776	$	591,695
Foreign currency translation adjustment		(18,885	)		(3,940	)		(27,805	)		(30,308	)		26,721		(18,885	)		45,358		(27,805	)
Change in fair value of available-for-sale marketable securities, net of deferred taxes		4,794			(1,168	)		39,965			(21,044	)		2,528		4,794			17,746		39,965
Comprehensive income	$	213,775		$	179,106		$	603,855		$	452,578		$	342,666	$	213,775		$	721,880	$	603,855

See accompanying notes.

Garmin Ltd. ~~And~~and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 13-Weeks Ended September ~~28, 2019~~26, 2020 and September ~~29, 2018~~28, 2019

(In thousands, except per share information)

~~Common Stock~~

~~Additional Paid-In Capital~~

~~Treasury Stock~~

~~Retained Earnings~~

~~Accumulated Other Comprehensive Income (Loss)~~

											Accumulated						Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
			Additional								Other
	Common		Paid-In			Treasury			Retained		Comprehensive
	Stock		Capital			Stock			Earnings		Income (Loss)			Total
Balance at June 30, 2018	$	17,979	$	1,828,515		$	(433,959	)	$	2,336,614	$	9,732		$	3,758,881
Balance at June 29, 2019																	$	17,979	$	1,825,135		$	(368,200	)	$	2,641,371		$	34,681		$	4,150,966
Net income		–		–			–			184,214		–			184,214			—		—			—			227,866			—			227,866
Translation adjustment		–		–			–			–		(3,940	)		(3,940	)		—		—			—			—			(18,885	)		(18,885	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $107		–		–			–			–		(1,168	)		(1,168	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $657																		—		—			—			—			4,794			4,794
Comprehensive income															179,106																	213,775
Dividends declared		–		–			–			–		–			–			—		—			—			(421	)		—			(421	)
Issuance of treasury stock related to equity awards		–		(311	)		693			–		–			382			—		(30	)		30			—			—			—
Stock compensation		–		14,347			–			–		–			14,347			—		16,591			—			—			—			16,591
Purchase of treasury stock related to equity awards		–		–			(8	)		–		–			(8	)		—		—			(17	)		—			—			(17	)
Reclassification under ASU 2016-06
Reclassification under ASU 2018-02
Balance at September 29, 2018	$	17,979	$	1,842,551		$	(433,274	)	$	2,520,828	$	4,624		$	3,952,708
Balance at September 28, 2019																	$	17,979	$	1,841,696		$	(368,187	)	$	2,868,816		$	20,590		$	4,380,894

																	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at June 27, 2020																	$	17,979	$	1,851,695		$	(326,310	)	$	3,107,768		$	89,729		$	4,740,861
Net income																		—		—			—			313,417			—			313,417
Translation adjustment																		—		—			—			—			26,721			26,721
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $31																		—		—			—			—			2,528			2,528
Comprehensive income																																342,666
Dividends declared																		—		—			—			(26	)		—			(26	)
Issuance of treasury stock related to equity awards																		—		(1,207	)		1,207			—			—			—
Stock compensation																		—		22,031			—			—			—			22,031
Purchase of treasury stock related to equity awards																		—		—			(1,191	)		—			—			(1,191	)
Balance at September 26, 2020																	$	17,979	$	1,872,519		$	(326,294	)	$	3,421,159		$	118,978		$	5,104,341

Accumulated
Additional Other
Common Paid-In Treasury Retained Comprehensive
Stock Capital Stock Earnings Income (Loss) Total
Balance at June 29, 2019 $ 17,979 $ 1,825,135 $ (368,200 ) $ 2,641,371 $ 34,681 $ 4,150,966
Net income – – – 227,866 – 227,866
Translation adjustment – – – – (18,885 ) (18,885 )
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $657 – – – – 4,794 4,794
Comprehensive income 213,775
Dividends declared – – – (421 ) – (421 )
Issuance of treasury stock related to equity awards – (30 ) 30 – – –
Stock compensation – 16,591 – – – 16,591
Purchase of treasury stock related to equity awards – – (17 ) – – (17 )
Balance at September 28, 2019 $ 17,979 $ 1,841,696 $ (368,187 ) $ 2,868,816 $ 20,590 $ 4,380,894

See accompanying notes.

Garmin Ltd. ~~And~~and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the 39-Weeks Ended September ~~28, 2019~~26, 2020 and September ~~29, 2018~~28, 2019

(In thousands, except per share information)

Accumulated
Additional Other
Common Paid-In Treasury Retained Comprehensive
Stock Capital Stock Earnings Income (Loss) Total
Balance at December 30, 2017 $ 17,979 $ 1,828,386 $ (468,818 ) $ 2,418,444 $ 56,428 $ 3,852,419
Net income – – – 503,930 – 503,930
Translation adjustment – – – – (30,308 ) (30,308 )
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $3,014 – – – – (21,044 ) (21,044 )
Comprehensive income 452,578
Dividends declared ($2.12 per share) – – – (400,298 ) – (400,298 )
Issuance of treasury stock related to equity awards – (27,929 ) 42,453 – – 14,524
Stock compensation – 42,094 – – – 42,094
Purchase of treasury stock related to equity awards – – (6,909 ) – – (6,909 )
Reclassification under ASU 2016-06 – – – (1,700 ) – (1,700 )
Reclassification under ASU 2018-02 – – – 452 (452 ) -
Balance at September 29, 2018 $ 17,979 $ 1,842,551 $ (433,274 ) $ 2,520,828 $ 4,624 $ 3,952,708

												Accumulated
			Additional									Other
	Common		Paid-In			Treasury			Retained			Comprehensive
	Stock		Capital			Stock			Earnings			Income (Loss)			Total			Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 29, 2018	$	17,979	$	1,823,638		$	(397,692	)	$	2,710,619		$	8,430		$	4,162,974		$	17,979	$	1,823,638		$	(397,692	)	$	2,710,619		$	8,430		$	4,162,974
Net income		–		–			–			591,695			–			591,695			—		—			—			591,695			—			591,695
Translation adjustment		–		–			–			–			(27,805	)		(27,805	)		—		—			—			—			(27,805	)		(27,805	)
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $5,968		–		–			–			–			39,965			39,965
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $5,968																			—		—			—			—			39,965			39,965
Comprehensive income																603,855																	603,855
Dividends declared ($2.28 per share)		–		–			–			(433,498	)		–			(433,498	)
Dividends declared ($2.28 per share)																			—		—			—			(433,498	)		—			(433,498	)
Issuance of treasury stock related to equity awards		–		(29,495	)		42,477			–			–			12,982			—		(29,495	)		42,477			—			—			12,982
Stock compensation		–		47,553			–			–			–			47,553			—		47,553			—			—			—			47,553
Purchase of treasury stock related to equity awards		–		–			(12,972	)		–			–			(12,972	)		—		—			(12,972	)		—			—			(12,972	)
Balance at September 28, 2019	$	17,979	$	1,841,696		$	(368,187	)	$	2,868,816		$	20,590		$	4,380,894		$	17,979	$	1,841,696		$	(368,187	)	$	2,868,816		$	20,590		$	4,380,894

																		Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 28, 2019																		$	17,979	$	1,835,622		$	(345,040	)	$	3,229,061		$	55,874		$	4,793,496
Net income																			—		—			—			658,776			—			658,776
Translation adjustment																			—		—			—			—			45,358			45,358
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $2,903																			—		—			—			—			17,746		��	17,746
Comprehensive income																																	721,880
Dividends declared ($2.44 per share)																			—		—			—			(466,678	)		—			(466,678	)
Issuance of treasury stock related to equity awards																			—		(16,618	)		31,820			—			—			15,202
Stock compensation																			—		53,515			—			—			—			53,515
Purchase of treasury stock related to equity awards																			—		—			(13,074	)		—			—			(13,074	)
Balance at September 26, 2020																		$	17,979	$	1,872,519		$	(326,294	)	$	3,421,159		$	118,978		$	5,104,341

See accompanying notes.

Garmin Ltd. ~~And~~and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

							39-Weeks Ended
	39-Weeks Ended						September 26, 2020			September 28, 2019
	September 28,			September 29,
	2019			2018
Operating activities:
Operating Activities:
Net income	$	591,695		$	503,930		$	658,776		$	591,695
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		52,503			47,902			57,141			52,503
Amortization		25,112			23,574			32,969			25,112
Gain on sale or disposal of property and equipment		(5	)		(491	)
Provision for doubtful accounts		933			1,265
Provision for obsolete and slow moving inventories		32,501			17,719
Unrealized foreign currency loss		14,653			4,158
Gain on sale of property and equipment								(1,815	)		(5	)
Unrealized foreign currency losses								4,384			14,653
Deferred income taxes		18,012			20,177			14,353			18,012
Stock compensation expense		47,553			42,094			53,515			47,553
Realized (gains) losses on marketable securities		(213	)		481
Realized gain on marketable securities								(1,316	)		(213	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		14,311			111,955
Accounts receivable, net of allowance for doubtful accounts								59,474			15,244
Inventories		(210,622	)		(69,139	)		(56,063	)		(178,121	)
Other current and non-current assets		(86,538	)		5,102			(27,019	)		(86,538	)
Accounts payable		27,523			32,601			(11,939	)		27,523
Other current and non-current liabilities		(54,401	)		(57,245	)		(18,299	)		(54,401	)
Deferred revenue		(7,750	)		(14,923	)		(21,148	)		(7,750	)
Deferred costs		6,326			5,581			9,855			6,326
Income taxes payable		(7,423	)		27,041			(53,419	)		(7,423	)
Net cash provided by operating activities		464,170			701,782			699,449			464,170

Investing activities:
Purchases of property and equipment		(91,469	)		(122,846	)		(137,072	)		(91,469	)
Proceeds from sale of property and equipment		370			1,296			1,965			370
Purchase of intangible assets		(1,862	)		(2,982	)		(1,643	)		(1,862	)
Purchase of marketable securities		(333,320	)		(314,179	)		(702,487	)		(333,320	)
Redemption of marketable securities		333,783			229,066			808,554			333,783
Acquisitions, net of cash acquired		(275,310	)		(29,170	)		(148,648	)		(275,310	)
Net cash used in investing activities		(367,808	)		(238,815	)		(179,331	)		(367,808	)

Financing activities:
Dividends		(308,905	)		(296,149	)		(333,975	)		(308,905	)
Proceeds from issuance of treasury stock related to equity awards		12,982			14,524			15,202			12,982
Purchase of treasury stock related to equity awards		(12,972	)		(6,909	)		(13,074	)		(12,972	)
Net cash used in financing activities		(308,895	)		(288,534	)		(331,847	)		(308,895	)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(11,834	)		(9,650	)
Effect of exchange rate changes on cash and cash equivalents								7,900			(11,834	)

Net (decrease) increase in cash, cash equivalents, and restricted cash		(224,367	)		164,783
Net increase (decrease) in cash, cash equivalents, and restricted cash								196,171			(224,367	)
Cash, cash equivalents, and restricted cash at beginning of period		1,201,805			891,759			1,027,638			1,201,805
Cash, cash equivalents, and restricted cash at end of period	$	977,438		$	1,056,542		$	1,223,809		$	977,438

See accompanying notes.

Garmin Ltd. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

September ~~28, 2019~~26, 2020

(In thousands, except per share information)

Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Additionally, the Condensed Consolidated Financial Statements should be read in conjunction with Item 2 of Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q. Operating results for the 13-week and 39-week periods endedSeptember ~~28, 2019~~26, 2020 are not necessarily indicative of the results that may be expected for the year ending December ~~28, 2019.~~26, 2020.

The Condensed Consolidated Balance Sheet at December ~~29, 2018~~28, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2018.~~28, 2019.

The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore, the financial results of certain 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. The quarters ended September ~~28, 2019~~26, 2020 and September ~~29, 2018~~28, 2019 both contain operating results for 13 weeks.

~~Recently Adopted Accounting Standards~~

~~Leases~~

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The FASB subsequently issued Accounting Standards Update No. 2018-10 and Accounting Standards Update No. 2018-11 in July 2018, which provide clarifications and improvements to ASU 2016-02 (collectively, the “new lease standard”). Accounting Standards Update No. 2018-11 also provides the optional transition method which allows companies to apply the new lease standard at the adoption date instead of at the earliest comparative period presented. The new lease standard requires lessees to present a right-of-use asset and a corresponding lease liability on the balance sheet.

The Company adopted the new lease standard as of the beginning of the 2019 fiscal year using the optional transition method. The Company did not have a cumulative effect adjustment to retained earnings as a result of adopting the new lease standard and does not expect the new lease standard to have a material impact on the Company’s Consolidated Statements of Income or Consolidated Statements of Cash Flows in future periods. The Company elected the package of transitional practical expedients upon adoption which, among other provisions, allowed the Company to carry forward historical lease classification. See Note 11 – Leases for additional information regarding leases.

Significant Accounting Policies

For a description of the significant accounting policies and methods used in the preparation of the Company’s Condensed Consolidated Financial Statements, refer to Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019. Other than the policy discussed below, there were no material changes to the Company’s significant accounting policies during the 39-week period ended September 26, 2020.

Marketable Securities

Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company’s marketable securities were considered available-for-sale as of September 26, 2020 and December 28, 2019. Available-for-sale securities are stated at fair value.

~~Preproduction Costs Related~~The Company recognizes impairments relating to ~~Long-Term Supply Arrangements~~

~~Preproduction design~~credit losses of available-for-sale securities through an allowance for credit losses and ~~development costs related~~Other income (expense) on the Company’s Condensed Consolidated Statements of Income. Impairment not relating to ~~long-term supply arrangements are expensed as incurred, and classified as Research and development, unless~~credit losses is recorded in Other comprehensive income (loss) on the ~~customer has provided a contractual guarantee for reimbursement of such costs. Contractually reimbursable costs are capitalized as incurred in the~~Company’s Condensed Consolidated Balance ~~Sheets within Prepaid expenses~~Sheets.

Testing for impairment of investments requires significant management judgment. The identification of potentially impaired investments, the determination of their fair value, and the assessment of whether any decline in value is relating to credit losses are the key judgment elements. The discovery of new information and the passage of time can significantly change these judgments. Revisions of impairment judgments are made when new information becomes known, and any resulting impairment adjustments are made at that time. The economic environment and volatility of securities markets increase the difficulty of determining fair value and assessing investment impairment.

In making this assessment we evaluate the extent to which the fair value is less than the amortized cost basis, any change in credit rating of the security, adverse conditions specifically related to the security, failure of the issuer to make scheduled payments, and other ~~current assets if reimbursement~~relevant factors affecting the security. If it is determined that a credit loss exists, the amount of the credit loss is determined by comparing the present value of the expected future cash flows for the security to the amortized cost basis of the security, limited by the amount that the fair value is less than the amortized cost basis.

The amortized cost of debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization and realized gains/losses are recorded within Interest income and Other income (expense), respectively, on the Company’s Consolidated Statements of Income. The cost of securities sold is based on the specific identification method.

Recently Adopted Accounting Standards

Financial Instruments – Credit Losses

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes how entities assess and measure credit losses of certain financial instruments, including available-for-sale securities and accounts receivable. The Company adopted the new standard as of the beginning of the 2020 fiscal year. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Receivables – Nonrefundable Fees and Other Costs

In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”), which shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be ~~received within one year, or within Other assets if expected~~amortized to ~~be received beyond one year. Such capitalized costs were approximately $~~22 ~~million~~the earliest call date. The Company adopted the new standard as of ~~September 28, 2019, and there were~~the beginning of the 2020 fiscal year. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

0 ~~such capitalized costs as of December 29, 2018.~~

Recently Issued Accounting Pronouncements Not Yet Adopted

We do not expect any recently issued accounting pronouncements not yet adopted to have a material impact on the Company’s consolidated financial statements, accounting policies, processes, or systems upon adoption.

Inventories

The components of inventories consist of the following:

Schedule of inventories
September 28, December 29,
2019 2018

Raw materials $ 267,718 $ 205,696
Work-in-process 133,290 96,564
Finished goods 348,817 259,580
Inventories $ 749,825 $ 561,840

	September 26, 2020		December 28, 2019
Raw materials	$	291,111	$	260,070
Work-in-process		137,587		133,157
Finished goods		392,679		359,681
Inventories	$	821,377	$	752,908

Earnings Per Share

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

Schedule of computation of basic and diluted net income per share
13-Weeks Ended
September 28, September 29,
2019 2018
Numerator:
Numerator for basic and diluted net income per share - net income $ 227,866 $ 184,214

Denominator:
Denominator for basic net income per share – weighted-average common shares 190,102 188,799

Effect of dilutive securities – stock options, stock appreciation rights and restricted stock units 860 1,206

Denominator for diluted net income per share – adjusted weighted-average common shares 190,962 190,005

Basic net income per share $ 1.20 $ 0.98

Diluted net income per share $ 1.19 $ 0.97

	13-Weeks Ended
	September 26, 2020		September 28, 2019
Numerator:
Numerator for basic and diluted net income per share - net income	$	313,417	$	227,866

Denominator:
Denominator for basic net income per share – weighted-average common shares		191,234		190,102

Effect of dilutive equity awards		764		860

Denominator for diluted net income per share – adjusted weighted-average common shares		191,998		190,962

Basic net income per share	$	1.64	$	1.20

Diluted net income per share	$	1.63	$	1.19

	39-Weeks Ended
	September 26, 2020		September 28, 2019
Numerator:
Numerator for basic and diluted net income per share - net income	$	658,776	$	591,695

Denominator:
Denominator for basic net income per share – weighted-average common shares		191,021		189,853

Effect of dilutive equity awards		739		937

Denominator for diluted net income per share – adjusted weighted-average common shares		191,760		190,790

Basic net income per share	$	3.45	$	3.12

Diluted net income per share	$	3.44	$	3.10

39-Weeks Ended
September 28, September 29,
2019 2018
Numerator:
Numerator for basic and diluted net income per share - net income $ 591,695 $ 503,930

Denominator:
Denominator for basic net income per share – weighted-average common shares 189,853 188,554

Effect of dilutive securities – stock options, stock appreciation rights and restricted stock units 937 1,032

Denominator for diluted net income per share – adjusted weighted-average common shares 190,790 189,586

Basic net income per share $ 3.12 $ 2.67

Diluted net income per share $ 3.10 $ 2.66

There were ~~398~~409 and ~~266~~410 anti-dilutive stock options, stock appreciation rights and restricted stock units (collectively “equity awards”) ~~outstanding during~~excluded from the computations of diluted net income per share for the 13-week and 39-week periods ended September 26, 2020, respectively, and 398 and 266 anti-dilutive equity awards excluded from the computations of diluted net income per share for the 13-week and 39-week periods ended September 28, 2019, ~~respectively, and~~ 0 ~~anti-dilutive equity awards outstanding during the 13-week and 39-week periods ended September 29, 2018.~~respectively.

There were ~~less than~~ 115 net shares issued as a result of exercises and releases of equity awards for the 13-week period ended September ~~28, 2019,~~26, 2020, and there were 12less than 1 net shares issued as a result of exercises and releases of equity awards for the 13-week period ended ~~September 29, 2018.~~

September 28, 2019.

There were ~~396~~355 and ~~390~~396 net shares issued as a result of exercises and releases of equity awards for the 39-week periods ended September 26, 2020 and September 28, 2019, ~~and September 29, 2018,~~ respectively.

There were ~~245~~196 employee stock purchase plan (ESPP) shares issued from outstanding Treasury stock during the 39-week period ended September ~~28, 2019.~~26, 2020.

There were ~~230~~245 ESPP shares issued from outstanding Treasury stock during the 39-week period ended September ~~29, 2018.~~28, 2019.

Segment Information

The Company has identified 5 reportable segments – auto, aviation, fitness, marine, and outdoor. There are 2 operating segments, auto personal navigation devices (“auto PND”) and auto original equipment manufacturer solutions (“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), uses operating income as the measure of profit or loss, combined with other measures, to assess segment performance and allocate resources. Operating income represents net sales less costs of goods sold and operating expenses. Net sales are directly attributed to each segment. Most costs of goods sold and the majority of operating expenses are also directly attributed to each segment, while certain other costs of goods sold and operating expenses are allocated to the segments in a manner appropriate to the specific facts and circumstances of the expenses being allocated.

In the first quarter of fiscal 2019, the methodology used to allocate certain selling, general, and administrative expenses to the segments was refined, endeavoring to provide the Company’s CODM with a more meaningful representation of segment profit or loss in light of the evolution of its segments. The Company’s composition of operating segments and reportable segments did not change. Prior year amounts are presented here as they were originally reported, as it is not practicable to accurately restate prior period activity in accordance with the refined allocation methodology. For comparative purposes, we estimate operating income for the 13-weeks ended September 29, 2018 would have been approximately $4 ~~million less for the aviation segment, approximately $~~2 ~~million more for the marine segment, approximately $~~2 million more for the outdoor segment, and not significantly different for the auto and fitness segments. We estimate operating income for the 39-weeks ended September 29, 2018 would have been approximately $13 ~~million less for the aviation segment, approximately $~~10 ~~million more for the marine segment, approximately $~~3 ~~million more for the outdoor segment, and not significantly different for the auto and fitness segments.~~

Net sales (“revenue”), gross profit, and operating income for each of the Company’s reportable segments are presented below.

Net sales (“revenue”), gross profit, and operating income			Outdoor [Member]		Fitness [Member]		Marine [Member]		Auto [Member]		Aviation [Member]
		Reportable Segments													Reportable Segments
		Outdoor		Fitness		Marine		Auto		Aviation		Total			Fitness		Outdoor		Aviation		Auto			Marine		Total

13-Weeks Ended September 28, 2019

13-Weeks Ended September 26, 2020														13-Weeks Ended September 26, 2020
Net sales		$	258,294	$	243,099	$	107,694	$	137,722	$	187,574	$	934,383		$	328,446	$	334,844	$	151,112	$	129,355		$	165,437	$	1,109,194
Gross profit			170,846		126,835		64,275		65,814		139,688		567,458			177,794		223,704		107,927		58,135			100,423		667,983
Operating income			105,051		49,831		20,008		20,857		65,713		261,460			87,083		147,477		28,597		3,462			50,482		317,101

13-Weeks Ended September 29, 2018
13-Weeks Ended September 28, 2019														13-Weeks Ended September 28, 2019
Net sales															$	243,099	$	258,294	$	187,574	$	137,722		$	107,694	$	934,383
Gross profit																126,835		170,846		139,688		65,814			64,275		567,458
Operating income																49,831		105,051		65,713		20,857			20,008		261,460

39-Weeks Ended September 26, 2020														39-Weeks Ended September 26, 2020
Net sales		$	209,415	$	190,185	$	98,770	$	165,214	$	146,427	$	810,011		$	846,688	$	716,146	$	465,850	$	320,215		$	486,269	$	2,835,168
Gross profit			136,671		103,441		58,508		70,925		111,202		480,747			446,936		469,150		338,770		147,393			288,103		1,690,352
Operating income			78,972		37,378		13,908		15,032		50,669		195,959			190,075		262,057		103,483		(6,837	)		134,195		682,973

39-Weeks Ended September 28, 2019	39-Weeks Ended September 28, 2019													39-Weeks Ended September 28, 2019

Net sales		$	622,748	$	675,007	$	393,070	$	422,132	$	542,316	$	2,655,273		$	675,007	$	622,748	$	542,316	$	422,132		$	393,070	$	2,655,273
Gross profit			403,842		352,805		234,014		198,012		405,848		1,594,521			352,805		403,842		405,848		198,012			234,014		1,594,521
Operating income			218,340		118,369		88,212		53,978		190,164		669,063			118,369		218,340		190,164		53,978			88,212		669,063

39 -Weeks Ended September 29, 2018

Net sales		$	555,314	$	581,315	$	346,908	$	486,653	$	445,146	$	2,415,336
Gross profit			358,829		326,473		203,976		207,389		333,886		1,430,553
Operating income			194,711		123,299		54,806		31,113		151,741		555,670

Net sales to external customers by geographic region were as follows for the 13-week and 39-week periods ended September ~~28, 2019~~26, 2020 and September ~~29, 2018.~~28, 2019. Note that APAC includes Asia Pacific and Australian Continent and EMEA includes Europe, the Middle East and Africa:

~~Americas [Member]~~

~~EMEA [Member]~~

~~APAC [Member]~~

Schedule of net sales and property and equipment, net by geographic area

13-Weeks Ended 39-Weeks Ended
September 28, September 29, September 28, September 29,
2019 2018 2019 2018
Americas $ 439,113 $ 370,239 $ 1,289,409 $ 1,153,330
EMEA 344,010 307,087 942,625 862,116
APAC 151,260 132,685 423,239 399,890
Net sales to external customers $ 934,383 $ 810,011 $ 2,655,273 $ 2,415,336

	13-Weeks Ended				39-Weeks Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Americas	$	521,869	$	439,113	$	1,372,360	$	1,289,409
EMEA		407,859		344,010		1,042,928		942,625
APAC		179,466		151,260		419,880		423,239
Net sales to external customers	$	1,109,194	$	934,383	$	2,835,168	$	2,655,273

Net property and equipment by geographic region as of September ~~28, 2019~~26, 2020 and September ~~29, 2018~~28, 2019 are presented below.

									Americas		APAC		EMEA		Total
September 26, 2020
Property and equipment, net									$	465,575	$	255,656	$	92,330	$	813,561
	Americas		APAC		EMEA		Total
September 28, 2019
Property and equipment, net	$	431,062	$	217,184	$	62,345	$	710,591	$	431,062	$	217,184	$	62,345	$	710,591

September 29, 2018
Property and equipment, net	$	403,556	$	202,790	$	44,459	$	650,805

Warranty Reserves

~~Warranty Reserves Textual~~

The Company’s ~~products sold are generally covered by a~~ standard warranty obligation to its end-users provides for ~~periods ranging~~a period of one to two years from ~~one~~ to ~~three~~the date of shipment, while certain aviation, marine, and auto OEM products have a warranty period of two years. or more from the date of installation. The Company’s estimates of costs to service its warranty obligations are based on historical experience and management’s expectations and judgments of future conditions, and are recorded as a liability on the balance sheet. The following reconciliation provides an illustration of changes in the aggregate warranty reserve.

Schedule of changes in the aggregate warranty reserve
	13-Weeks Ended
	September 28,			September 29,
	2019			2018			13-Weeks Ended
							September 26, 2020			September 28, 2019
Balance - beginning of period	$	39,330		$	38,429		$	39,293		$	39,330
Accrual for products sold during the period⁽¹⁾		12,981			13,558
Accrual for products sold ⁽¹⁾								15,613			12,981
Expenditures		(14,313	)		(16,027	)		(14,904	)		(14,313	)
Balance - end of period	$	37,998		$	35,960		$	40,002		$	37,998


	39-Weeks Ended
	September 28,			September 29,
	2019			2018			39-Weeks Ended
							September 26, 2020			September 28, 2019
Balance - beginning of period	$	38,276		$	36,827		$	39,758		$	38,276
Accrual for products sold during the period⁽¹⁾		41,196			40,682
Accrual for products sold ⁽¹⁾								47,140			41,196
Expenditures		(41,474	)		(41,549	)		(46,896	)		(41,474	)
Balance - end of period	$	37,998		$	35,960		$	40,002		$	37,998

(1)

⁽¹⁾

Changes in cost estimates related to pre-existing warranties ~~are~~were not material and aggregated with accruals for new warranty contracts in the ~~‘accrual~~‘Accrual for products ~~sold during the period’~~sold’ line.

Commitments and Contingencies

Commitments

The Company is party to certain commitments, which include purchases of raw materials, capital expenditures, advertising, ~~expenditures,~~ and other indirect purchases in connection with conducting our business. The aggregate amount of purchase orders and other commitments open as of September ~~28, 2019~~26, 2020 was approximately $~~467,300~~.$646,000. We cannot determine the aggregate amount of such purchase orders that represent contractual obligations because purchase orders may represent authorizations to purchase rather than binding agreements. Our purchase orders are based on our current needs and ~~are~~ typically fulfilled by our suppliers, contract manufacturers, and logistic providers within short periods of time.

Contingencies

In the normal course of business, the Company and its subsidiaries are parties to various legal claims, investigations and complaints, including matters alleging patent infringement and other intellectual property claims. The Company evaluates, on a quarterly and annual basis, developments in legal proceedings, investigations, claims, and other loss contingencies that could affect any required accrual or disclosure or estimate of reasonably possible loss or range of loss. An estimated loss from a loss contingency is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, the Company accrues the minimum amount in the range.

If an outcome unfavorable to the Company is determined to be probable, but the amount of loss cannot be reasonably estimated or is determined to be reasonably possible, but not probable, we disclose the nature of the contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company’s aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a loss is believed to be reasonably possible, but not probable, and a liability therefore has not been accrued. This aggregate range only represents the Company’s estimate of reasonably possible losses and does not represent the Company’s maximum loss exposure. The assessment regarding whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. In assessing the probability of an outcome in a lawsuit, claim or assessment that could be unfavorable to the Company, we consider the following factors, among others: a) the nature of the litigation, claim, or assessment; b) the progress of the case; c) the opinions or views of legal counsel and other advisers; d) our experience in similar cases; e) the experience of other entities in similar cases; and f) how we intend to respond to the lawsuit, claim, or assessment. Costs incurred in defending lawsuits, claims or assessments are expensed as incurred.

Management of the Company currently does not believe it is reasonably possible that the Company may have incurred a material loss, or a material loss in excess of recorded accruals, with respect to loss contingencies in the aggregate, for the fiscal quarter ended September ~~28, 2019.~~26, 2020. The results of legal proceedings, investigations and claims, however, cannot be predicted with certainty. An adverse resolution of one or more of such matters in excess of management’s expectations could have a material adverse effect in the particular quarter or fiscal year in which a loss is recorded, but based on information currently known, the Company does not believe it is likely that losses from such matters would have a material adverse effect on the Company’s business or its consolidated financial position, results of operations or cash flows.

The Company settled or resolved certain matters during the 13-week and 39-week periods ended September ~~28, 2019~~26, 2020 that did not individually or in the aggregate have a material impact on the Company’s business or its consolidated financial position, results of operations or cash flows.

Income Taxes

The Company recorded income tax expense of $~~29,901~~$23,300 in the 13-week period ended September 26, 2020, compared to income tax expense of $29,901 in the 13-week period ended September 28, ~~2019, compared to income tax expense of $17,113~~ ~~in the 13-week period ended September 29, 2018.~~2019. The effective tax rate was ~~11.6%~~6.9% in the third quarter of ~~2019,~~2020, compared to ~~8.5%~~11.6% in the third quarter of ~~2018.~~2019. The ~~310 basis points increase to the third quarter of 2019~~ effective tax rate ~~compared to the prior year quarter is primarily due to a decrease in uncertain tax position reserves released due to expiring statutes of limitations~~ in the third quarter of ~~2019~~2020 decreased 470 basis points compared to the ~~third~~effective tax rate in the prior year quarter. The decrease was primarily due to a favorable shift in income mix by jurisdiction related to the transaction to migrate intellectual property ownership from Switzerland to the United States, which began in the first quarter of ~~2018.~~2020.

The Company recorded income tax expense of $~~108,115~~$53,168 in the first three quarters of ~~2019,~~2020, compared to income tax expense of $~~87,445~~$108,115 in the first three quarters of ~~2018.~~2019. The effective tax rate was ~~15.4%~~7.5% in the first three quarters of ~~2019,~~2020, compared to ~~14.8%~~15.4% in the first three quarters of ~~2018.~~2019. Excluding a $14,308 income tax benefit recognized by the Company in the second quarter of 2020 due to the release of uncertain tax position reserves associated with a 2014 intercompany restructuring, the effective tax rate in the first three quarters of 2020 decreased 600 basis points compared to the effective tax rate in the first three quarters of the prior year. The decrease was primarily due to a favorable shift in income mix by jurisdiction related to the transaction to migrate intellectual property ownership from Switzerland to the United States, which began in the first quarter of 2020.

8.Marketable Securities

~~Marketable Securities~~

The ~~Financial Accounting Standards Board (“FASB”)~~FASB ASC topic entitled Fair Value Measurements and Disclosures defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance classifies the inputs used to measure fair value into the following hierarchy:


	Level 1	Unadjusted quoted prices in active markets for the identical asset or liability


	Level 2	Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability


	Level 3	Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Valuation is based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads.

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

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

~~U.S.Treasury Securities [Member]~~

~~Agency Securities [Member]~~

~~Mortgage-Backed Securities [Member]~~

~~Corporate Securities [Member]~~

~~Municipal Securities [Member]~~

~~Other [Member]~~

~~Recurring Basis [Member]~~

Schedule of available-for-sale securities
Fair Value Measurements as
of September 28, 2019
Total Level 1 Level 2 Level 3
U.S. Treasury securities $ 16,557 $ - $ 16,557 $ -
Agency securities 67,926 - 67,926 -
Mortgage-backed securities 129,564 - 129,564 -
Corporate securities 1,066,438 - 1,066,438 -
Municipal securities 158,530 - 158,530 -
Other 113,746 - 113,746 -
Total $ 1,552,761 $ - $ 1,552,761 $ -

Fair Value Measurements as
of December 29, 2018
Total Level 1 Level 2 Level 3
U.S. Treasury securities $ 22,128 $ - $ 22,128 $ -
Agency securities 59,116 - 59,116 -
Mortgage-backed securities 135,865 - 135,865 -
Corporate securities 980,524 - 980,524 -
Municipal securities 173,137 - 173,137 -
Other 142,342 - 142,342 -
Total $ 1,513,112 $ - $ 1,513,112 $ -

Marketable securities classified as available-for-sale securities are summarized below:

Schedule of marketable securities classified as available-for-sale securities
	Available-For-Sale Securities as of September 28, 2019									Available-For-Sale Securities as of September 26, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Fair Value Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	16,633	$	3	$	(79	)	$	16,557	Level 2	$	11,728	$	27	$	0		$	11,755
Agency securities		67,875		130		(79	)		67,926	Level 2		7,564		95		0			7,659
Mortgage-backed securities		131,507		174		(2,117	)		129,564	Level 2		269,354		1,170		(2,934	)		267,590
Corporate securities		1,061,714		8,965		(4,241	)		1,066,438	Level 2		940,340		26,025		(2,671	)		963,694
Municipal securities		157,456		1,173		(99	)		158,530	Level 2		188,276		3,617		(224	)		191,669
Other		114,106		129		(489	)		113,746	Level 2		47,556		166		(1,822	)		45,900
Total	$	1,549,291	$	10,574	$	(7,104	)	$	1,552,761		$	1,464,818	$	31,100	$	(7,651	)	$	1,488,267

	Available-For-Sale Securities as of December 29, 2018									Available-For-Sale Securities as of December 28, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Fair Value Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	22,485	$	-	$	(357	)	$	22,128	Level 2	$	15,204	$	5	$	(30	)	$	15,179
Agency securities		60,088		28		(1,000	)		59,116	Level 2		64,582		120		(27	)		64,675
Mortgage-backed securities		142,176		1		(6,312	)		135,865	Level 2		256,417		90		(2,485	)		254,022
Corporate securities		1,010,590		33		(30,099	)		980,524	Level 2		980,590		8,806		(3,746	)		985,650
Municipal securities		175,630		73		(2,566	)		173,137	Level 2		163,898		1,092		(235	)		164,755
Other		144,606		0		(2,264	)		142,342	Level 2		98,246		111		(700	)		97,657
Total	$	1,555,575	$	135	$	(42,598	)	$	1,513,112		$	1,578,937	$	10,224	$	(7,223	)	$	1,581,938

The Company’s investment policy targets low risk investments with the objective of minimizing the potential risk of principal loss. The fair value of ~~our~~ securities varies from period to period due to changes in interest rates, in the performance of the underlying collateral, and in the credit performance of the underlying issuer, among other factors.

Accrued interest receivable, which totaled $9,701 as of September 26, 2020, is excluded from both the fair value and amortized cost basis of available-for-sale securities and is included within Prepaid expenses and other current assets on the Company’s Condensed Consolidated Balance Sheets. The Company ~~does not intend to sell~~writes off impaired accrued interest on a timely basis, generally within 30 days of the ~~securities that have an unrealized loss shown in~~due date, by reversing interest income. NaN accrued interest was written off during the ~~table above, and it is not more likely than not that the Company will be required to sell a security before recovery of its amortized costs basis, which may be maturity.~~39-week period ended September 26, 2020.

The Company recognizes ~~the credit component of other-than-temporary~~ impairments ~~of debt securities in “Other Income” and the noncredit component in “Other comprehensive income (loss)” for those securities that we do not intend~~relating to sell and for which it is not more likely than not that we will be required to sell before recovery. During 2018 and the 39-week period ended September 28, 2019, the Company did not record any material impairment charges on its outstanding securities.

~~The amortized cost and fair value of the securities at an unrealized loss position as of September 28, 2019 were $626,766~~ ~~and $619,662, respectively. Approximately~~ 44% of securities in our portfolio were at an unrealized loss position as of September 28, 2019. We have the ability to hold these securities until maturity or their value is recovered. We do not consider these unrealized losses to be other than temporary credit losses ~~because there has been no material deterioration in~~of available-for-sale securities through an allowance for credit ~~quality~~losses and ~~no change in~~Other income (expense) on the cash flows of the underlying securities. We do not intend to sell the securities and it is not more likely than not that we will be required to sell the securities; therefore, no material impairment has been recorded in the accompanyingCompany’s Condensed Consolidated Statements of Income.

Impairment not relating to credit losses is recorded in Other comprehensive income (loss) on the Company’s Condensed Consolidated Balance Sheets. The cost of securities sold is based on the specific identification method. Approximately 22% of securities in the Company’s portfolio were at an unrealized loss position as of September 26, 2020.

The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of September ~~28, 2019~~26, 2020 and December ~~29, 2018.~~28, 2019.

Schedule of gross unrealized losses and fair value by major security type
	As of September 28, 2019										As of September 26, 2020
	Less than 12 Consecutive Months					12 Consecutive Months or Longer					Less than 12 Consecutive Months					12 Consecutive Months or Longer					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	(0	)	$	1,690	$	(79	)	$	14,464	$	—		$	—	$	—		$	—	$	—		$	—
Agency securities		(10	)		5,988		(69	)		30,753		—			—		—			—		—			—
Mortgage-backed securities		(149	)		17,478		(1,968	)		93,550		(2,836	)		140,783		(98	)		2,620		(2,934	)		143,403
Corporate securities		(672	)		163,205		(3,569	)		191,739		(2,013	)		182,555		(658	)		13,540		(2,671	)		196,095
Municipal securities		(59	)		24,305		(40	)		15,022		(224	)		34,921		—			—		(224	)		34,921
Other		(141	)		27,181		(348	)		34,287		(1,249	)		20,874		(573	)		3,254		(1,822	)		24,128
Total	$	(1,031	)	$	239,847	$	(6,073	)	$	379,815	$	(6,322	)	$	379,133	$	(1,329	)	$	19,414	$	(7,651	)	$	398,547

	As of December 29, 2018										As of December 28, 2019
	Less than 12 Consecutive Months					12 Consecutive Months or Longer					Less than 12 Consecutive Months					12 Consecutive Months or Longer					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	(3	)	$	3,975	$	(354	)	$	18,153	$	—		$	—	$	(30	)	$	13,087	$	(30	)	$	13,087
Agency securities		(5	)		4,656		(995	)		40,508		(16	)		20,808		(11	)		20,812		(27	)		41,620
Mortgage-backed securities		(1	)		361		(6,311	)		135,323		(745	)		79,007		(1,740	)		86,392		(2,485	)		165,399
Corporate securities		(4,028	)		323,633		(26,071	)		640,439		(1,585	)		183,691		(2,161	)		100,926		(3,746	)		284,617
Municipal securities		(454	)		38,371		(2,112	)		118,362		(218	)		34,165		(17	)		9,522		(235	)		43,687
Other		(102	)		8,015		(2,162	)		114,120		(410	)		34,540		(290	)		21,559		(700	)		56,099
Total	$	(4,593	)	$	379,011	$	(38,005	)	$	1,066,905	$	(2,974	)	$	352,211	$	(4,249	)	$	252,298	$	(7,223	)	$	604,509

As of September 26, 2020 and December 28,2019, the Company had 0t recognized an allowance for credit losses on any securities in an unrealized loss position.

The Company has 0t recorded an allowance for credit losses and charge to Other income for the unrealized losses on mortgage-backed, corporate, municipal, and other securities presented above because we do not consider the declines in fair value to have resulted from credit losses. We have not observed a significant deterioration in credit quality of these securities, which are rated as investment grade with moderate to low credit risk. The declines in value are largely attributable to current global economic conditions. The securities continue to make timely principal and interest payments, and the fair values are expected to recover as they approach maturity. The Company does not intend to sell the securities, and it is not more likely than not that the Company will be required to sell the securities, before the respective recoveries of their amortized cost bases, which may be maturity.

The amortized cost and fair value of marketable securities at September ~~28, 2019,~~26, 2020, by maturity, are shown below.

Schedule of amortized cost and estimated fair value of marketable securities by contractual maturity
Amortized Cost Fair Value
Due in one year or less $ 300,566 $ 300,542
Due after one year through five years 1,061,239 1,066,607
Due after five years through ten years 174,371 172,546
Due after ten years 13,115 13,066
$ 1,549,291 $ 1,552,761

	Amortized Cost		Fair Value
Due in one year or less	$	429,519	$	430,164
Due after one year through five years		970,913		993,068
Due after five years through ten years		59,972		60,946
Due after ten years		4,414		4,089
	$	1,464,818	$	1,488,267

Accumulated Other Comprehensive Income

The following provides required disclosure of changes in accumulated other comprehensive income (AOCI) balances by component for the 13-week and 39-week periods ended September ~~28, 2019:~~26, 2020:

Schedule of changes in accumulated other comprehensive income (AOCI)
13-Weeks Ended September 28, 2019
Foreign Currency Translation Adjustment Net unrealized gains (losses) on available-for-sale securities Total
Beginning Balance $ 38,407 $ (3,726 ) $ 34,681
Other comprehensive income before reclassification, net of income tax expense of $657 (18,885 ) 4,933 (13,952 )
Amounts reclassified from accumulated other comprehensive income - (139 ) (139 )
Net current-period other comprehensive income (18,885 ) 4,794 (14,091 )
Ending Balance $ 19,522 $ 1,068 $ 20,590

39-Weeks Ended September 28, 2019
Foreign Currency Translation Adjustment Net unrealized gains (losses) on available-for-sale securities Total
Beginning Balance $ 47,327 $ (38,897 ) $ 8,430
Other comprehensive income before reclassification, net of income tax expense of $5,968 (27,805 ) 40,180 12,375
Amounts reclassified from accumulated other comprehensive income - (215 ) (215 )
Net current-period other comprehensive income (27,805 ) 39,965 12,160
Ending Balance $ 19,522 $ 1,068 $ 20,590

~~The following provides required disclosure of reporting reclassifications out of AOCI for the 13-week and 39-week periods ended September 28, 2019:~~

~~Accumulated Net Investment Gain (Loss) Attributable to Parent Reclassification from Accumulated Other Comprehensive Income [Member]~~

Schedule of of reporting reclassifications out of AOCI
13-Weeks Ended September 28, 2019
Details About Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale securities $ 153 Other income (expense)
(14 ) Income tax benefit (provision)
$ 139 Net of tax

39-Weeks Ended September 28, 2019
Details About Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale securities $ 213 Other income (expense)
2 Income tax benefit (provision)
$ 215 Net of tax

	13-Weeks Ended September 26, 2020
	Foreign currency translation adjustment		Net gains (losses) on available-for-sale securities			Total
Balance - beginning of period	$	73,926	$	15,803		$	89,729
Other comprehensive income before reclassification, net of income tax expense of $31		26,721		3,358			30,079
Amounts reclassified from Accumulated other comprehensive income to Other income (expense), net of income tax expense of $155 included in Income tax provision		—		(830	)		(830	)
Net current-period other comprehensive income		26,721		2,528			29,249
Balance - end of period	$	100,647	$	18,331		$	118,978

	39-Weeks Ended September 26, 2020
	Foreign currency translation adjustment		Net gains (losses) on available-for-sale securities			Total
Balance - beginning of period	$	55,289	$	585		$	55,874
Other comprehensive income before reclassification, net of income tax expense of $2,903		45,358		18,861			64,219
Amounts reclassified from Accumulated other comprehensive income to Other income (expense), net of income tax expense of $201 included in Income tax provision		—		(1,115	)		(1,115	)
Net current-period other comprehensive income		45,358		17,746			63,104
Balance - end of period	$	100,647	$	18,331		$	118,978

10.

Revenue

~~10.~~

~~Revenue~~

In order to further depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors, we disaggregate revenue (or “net sales”) by geographic region, major product category, and pattern of recognition.

Disaggregated revenue by geographic region (Americas, APAC, and EMEA) is presented in Note 4 – Segment Information. The Company has identified six major product categories – auto PND, auto OEM, aviation, fitness, marine, and outdoor. Note 4 also contains disaggregated revenue information of the aviation, fitness, marine, and outdoor major product categories. Auto segment revenue presented in Note 4 is comprised of the auto PND and auto OEM major product categories, as depicted below.

	Auto Revenue by Major Product Category
	13-Weeks Ended						39-Weeks Ended
	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
Auto PND		64	%		69	%		62	%		66	%
Auto OEM		36	%		31	%		38	%		34	%

~~Auto PND [Member]~~

~~Auto OEM [Member]~~

Schedule of disaggregated revenue by geographic region
Auto Revenue by Major Product Category
13-Weeks Ended 39-Weeks Ended
September 28, September 29, September 28, September 29,
2019 2018 2019 2018
Auto PND 69 % 64 % 66 % 66 %
Auto OEM 31 % 36 % 34 % 34 %

A large majority of the Company’s sales are recognized on a point in time basis, usually once the product is shipped and title and risk of loss have transferred to the customer. Sales recognized over a period of time are primarily within the auto segment and relate to performance obligations that are satisfied over the life of the product or contractual service period. Revenue disaggregated by the timing of transfer of the goods or services is presented in the table below:

~~Point in time [Member]~~

~~Over time [Member]~~

Schedule of revenue disaggregated
	13-Weeks Ended				39-Weeks Ended
	September 28,		September 29,		September 28,		September 29,		13-Weeks Ended				39-Weeks Ended
	2019		2018		2019		2018		September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Point in time	$	886,954	$	761,216	$	2,522,229	$	2,286,740	$	1,060,718	$	886,954	$	2,696,593	$	2,522,229
Over time		47,429		48,795		133,044		128,596		48,476		47,429		138,575		133,044
Net sales	$	934,383	$	810,011	$	2,655,273	$	2,415,336	$	1,109,194	$	934,383	$	2,835,168	$	2,655,273

Transaction price and costs associated with the Company’s unsatisfied performance obligations are reflected as deferred revenue and deferred costs, respectively, on the Company’s Condensed Consolidated Balance Sheets. Such amounts are recognized ratably over the applicable service period or estimated useful life. Changes in deferred revenue and costs during the 39-week period ~~ending~~ended September ~~28, 2019~~26, 2020 are presented below:

Schedule of deferred revenue and costs Deferred Revenue⁽¹⁾ Deferred Costs⁽²⁾
39-Weeks Ended
September 28,
2019
Deferred Revenue⁽¹⁾ Deferred Costs⁽²⁾
Balance, beginning of period $ 172,938 $ 57,935
Deferrals in period 125,278 20,284
Recognition of deferrals in period (133,044 ) (26,613 )
Balance, end of period $ 165,172 $ 51,606

	39-Weeks Ended
	September 26, 2020
	Deferred Revenue ⁽¹⁾			Deferred Costs ⁽²⁾
Balance, beginning of period	$	161,891		$	48,598
Deferrals in period		117,441			13,445
Recognition of deferrals in period		(138,575	)		(23,300	)
Balance, end of period	$	140,757		$	38,743

(1)

⁽¹⁾

Deferred revenue is comprised of both Deferred revenue and Noncurrent deferred revenue per the Condensed Consolidated Balance Sheets

(2)

⁽²⁾

Deferred costs are comprised of both Deferred costs and Noncurrent deferred costs per the Condensed Consolidated Balance Sheets

Of the $~~133,044~~$138,575 of deferred revenue recognized in the ~~39-weeks~~39-week period ended September ~~28, 2019,~~ $~~78,092~~26, 2020, $77,511 was deferred as of the beginning of the period.

Approximately two-thirds of the $~~165,172~~$140,757 of deferred revenue at the end of the period,, September ~~28, 2019,~~26, 2020, is recognized ratably over a period of three years or less.

~~11.~~

~~Leases~~

~~Leases Textual~~

The Company leases certain real estate properties, vehicles, and equipment in various countries around the world. Leased properties are typically used for office space, distribution, and retail. The Company’s leases are classified as operating leases with remaining terms of 1 to 34 years, some of which include an option to extend or renew. If the exercise of an option to extend or renew is determined to be reasonably certain, the associated right-of-use asset and lease liability reflects the extended period and payments. For all real estate leases, any non-lease components, including common area maintenance, have been separated from lease components and excluded from the associated right-of-use asset and lease liability calculations. For all equipment and vehicle leases, an accounting policy election has been made to not separate lease and non-lease components.

~~Leases with an initial term of 12 months or less (“short-term leases”) are not recognized on the Company’s Condensed Consolidated Balance Sheets as a right-of-use asset or lease liability.~~

The following table represents lease costs recognized in the Company’s Condensed Consolidated Statements of Income for the 13-weeks and 39-weeks ended September 28, 2019. Lease costs are included in Selling, general and administrative expense and Research and development expense on the Company’s Condensed Consolidated Statements of Income.

Schedule of operating lease cost
13-Weeks Ended 39-Weeks Ended

September 28,

September 28,

2019 2019
Operating lease cost⁽¹⁾ $ 6,023 $ 17,683

⁽¹⁾

~~Operating lease cost includes short-term lease costs and variable lease costs, which were not material in the periods presented.~~

~~The following table represents the components of leases that are recognized on the Company’s Condensed Consolidated Balance Sheets as of September 28, 2019.~~

~~Schedule of amounts recognized in balance sheet~~
	~~September 28,~~
	~~2019~~
~~Operating lease right-of-use assets~~	$	~~55,399~~

~~Other accrued expenses~~	$	~~13,438~~
~~Noncurrent operating lease liabilities~~		~~42,855~~
~~Total lease liabilities~~	$	~~56,293~~

~~Weighted average remaining lease term~~		~~5.6 years~~
~~Weighted average discount rate~~		~~4.0~~	%

~~The following table represents the maturity of lease liabilities.~~

Schedule of maturity of lease liabilities
Fiscal Year Lease payments
2019, excluding the 39-weeks ended September 28, 2019 $ 4,347
2020 15,447
2021 12,259
2022 8,736
2023 7,955
Thereafter 15,389
Total $ 64,133
Less: imputed interest (7,840 )
Present value of lease liabilities $ 56,293

~~The following table presents supplemental cash flow and noncash information related to leases.~~

Schedule of cash flow supplemental
39-Weeks Ended
September 28,
2019
Cash paid for amounts included in the measurement of operating lease liabilities⁽²⁾ $ 13,528
Right-of-use assets obtained in exchange for new operating lease liabilities $ 7,853

⁽²⁾

~~Included in Net cash provided by operating activities on the Company’s Condensed Consolidated Statements of Cash Flows.~~

~~12.~~

~~Recently Issued Accounting Pronouncements Not Yet Adopted~~

~~Financial Instruments – Credit Losses~~

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 provides new guidance on assessment of expected credit losses of certain financial instruments. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new standard on its Consolidated Financial Statements.

~~Receivables – Nonrefundable Fees and Other Costs~~

In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”), which shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. Callable debt securities held at a discount continue to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new standard on its Consolidated Financial Statements.

~~13.~~ ~~Subsequent Events~~

~~Switzerland corporate tax reform was approved by public referendum in May 2019 and enacted in October 2019. Accordingly, the Company expects to record an income tax benefit of approximately $~~20 ~~to $220~~ million in the fourth quarter of 2019 due to an increase in certain Switzerland deferred tax assets resulting from enactment of Switzerland Federal and Schaffhausen cantonal tax reform. The Company is evaluating transitional measures in Switzerland tax law that may affect the overall increase in deferred tax assets as well as the impact of tax reform to its ongoing effective tax rate, the materiality of which is not yet known.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The discussion set forth below, as well as other portions of this Quarterly Report, ~~contains~~contain statements concerning potential future events. Such forward-looking statements are based upon assumptions by management, as of the date of this Quarterly Report, including assumptions about risks and uncertainties faced by the Company. Readers can identify these forward-looking statements by their use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. If any of the Company’s assumptions prove incorrect or should unanticipated circumstances arise, actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in Part II, Item 1A of this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2018.~~28, 2019. This report has been filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) in Washington, D.C. and can be obtained by contacting the SEC’s public reference operations or obtaining it through the SEC’s website at http://www.sec.gov. Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company. The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2018.~~28, 2019.

The Company is a leading worldwide provider of ~~navigation, communications~~wireless devices and ~~information devices, most~~applications that are designed for people who live an active lifestyle, many of which ~~are enabled by~~feature Global Positioning System ~~or GPS, technology.~~(GPS) navigation. We operate in five reportable segments, which serve the ~~outdoor,~~auto, aviation, fitness, marine, ~~auto~~ and ~~aviation~~outdoor markets. The Company’s segments offer ~~consumer~~ products through its network of subsidiary distributors and independent dealers and distributors and some also maintain relationships with original equipment manufacturers (OEMs). However, the nature of products and types of customers for the five segments may vary significantly. As such, the segments are managed separately.

20Impacts of COVID-19

The novel coronavirus (COVID-19) pandemic has created disruption and uncertainty in the global economy and has affected our business, suppliers, and customers, as described below. The impact to the Company’s financial results was not significant in the first quarter of 2020. Consolidated net sales and operating income were adversely impacted during the second quarter of 2020 due to limitations on economic activity caused by governmental restrictions and as some of our customers faced economic hardships, although demand for certain of our products and net sales for all of our segments improved throughout the quarter. The positive trend of improved results at the end of second quarter continued in the third quarter of 2020 for most of our products and all of our segments. As described below in the Results of Operations, our operating segments were not all impacted equally, and the diversity of our business and product offerings helped mitigate the impacts to our consolidated net sales and operating income during the third quarter of 2020.

With pre-existing fundamentals such as trade credit insurance, direct online sales through our webshops, direct fulfillment arrangements with certain retailers, our strong cash and marketable securities position, market and product diversity, a vertically integrated business model, and ample inventory on hand, we were well-positioned to mitigate the initial impacts of COVID-19. While COVID-19 continues to further evolve into a complicated and prolonged global pandemic, we continue to implement further mitigation measures, such as initiating additional direct fulfillment arrangements with retailers, mitigating single source supplier dependencies, enhancing cleaning and sanitation within our facilities to maintain a healthy and safe environment for essential on-site functions, boosting functionality and security of technology for employees who are working from home, and planning the safe reintegration of our on-site workforce as the pandemic evolves, governmental restrictions are gradually lifted and public health guidance changes. These mitigation efforts complement our top priorities of ensuring the health and safety of our employees and continuing to serve our customers. Additional benefits have been provided to many of our employees, including increased flexible work arrangements, remote work access, and flexible paid leave policies. We are also focused on mitigating impacts to operating income and liquidity by monitoring our expense structure and balance sheet, reducing and prioritizing certain discretionary operating expenses and capital expenditures, and slowing the number of new employees hired.

Sustained adverse impacts to us, our suppliers or our customers may affect the future valuation of certain assets and therefore may increase the likelihood of an impairment charge, write-off, write-down, reserve, or accelerated expense associated with such assets, including marketable securities, accounts receivable, inventories, prepaid expenses,

property and equipment, tax assets, goodwill, indefinite and finite-lived intangible assets, capitalized preproduction design and development costs, and other assets.

Although we believe we have taken appropriate actions to help mitigate risks associated with COVID-19 as described above, the duration and magnitude of COVID-19 impacts to our business operations and financial results may be affected by a number of factors including the uncertainty around the evolution of the pandemic, the imposition or relaxation of government restrictions on business and social gathering activities, voluntary behavior changes associated with public health guidance, and those presented below in Item 1A. Risk Factors of this Quarterly Report.

Recent Systems Outage

The Company was the victim of a cyber attack that encrypted some of our systems on July 23, 2020. As a result, many of our online services were interrupted including website functions, customer support, customer facing applications, and company communications. We immediately began to assess the nature of the attack and started remediation. Based on our due diligence and independent forensic analysis, we have no indication that any customer data was accessed, lost or stolen. Additionally, the functionality of Garmin products was not affected, other than the ability to access online services. Affected systems have been restored. We have implemented a variety of measures to enhance our IT infrastructure and security in light of the rapidly evolving threat landscape. The impact of this outage to our operations and financial results was not material during the third quarter of 2020, and we do not expect it to have material impacts on future periods.

Results of Operations

The following table sets forth the Company’s results of operations as a percent of net sales during the periods shown (the table may not foot due to rounding):

	13-Weeks Ended						13-Weeks Ended
	September 28, 2019			September 29, 2018			September 26, 2020			September 28, 2019
Net sales		100	%		100	%		100	%		100	%
Cost of goods sold		39	%		41	%		40	%		39	%
Gross profit		61	%		59	%		60	%		61	%
Advertising expense		3	%		4	%
Selling, general and administrative expense		13	%		14	%
Research and development expense		16	%		17	%
Total operating expense		33	%		35	%
Advertising								3	%		3	%
Selling, general and administrative								13	%		13	%
Research and development								16	%		16	%
Total operating expenses								32	%		33	%
Operating income		28	%		24	%		29	%		28	%
Other income (expense)		(0	)%		1	%		2	%		(0	)%
Income before income taxes		28	%		25	%		30	%		28	%
Income tax provision		3	%		2	%		2	%		3	%
Net income		24	%		23	%		28	%		24	%

	39-Weeks Ended						39-Weeks Ended
	September 28, 2019			September 29, 2018			September 26, 2020			September 28, 2019
Net sales		100	%		100	%		100	%		100	%
Cost of goods sold		40	%		41	%		40	%		40	%
Gross profit		60	%		59	%		60	%		60	%
Advertising expense		4	%		4	%
Selling, general and administrative expense		14	%		15	%
Research and development expense		17	%		17	%
Total operating expense		35	%		36	%
Advertising								3	%		4	%
Selling, general and administrative								15	%		14	%
Research and development								18	%		17	%
Total operating expenses								36	%		35	%
Operating income		25	%		23	%		24	%		25	%
Other income (expense)		1	%		1	%		1	%		1	%
Income before income taxes		26	%		24	%		25	%		26	%
Income tax provision		4	%		4	%		2	%		4	%
Net income		22	%		21	%		23	%		22	%

The segment table located in Note 4 to the Condensed Consolidated Financial Statements sets forth the Company’s results of operations (in thousands) including net sales, gross profit, and operating income for each of the

Company’s five reportable segments during the periods shown. For each line item in the table, the total of the fitness, outdoor, ~~fitness, marine,~~aviation, auto, and ~~aviation~~marine segments’ amounts equals the amount in the Condensed Consolidated Statements of Income included in Item 1.

As indicated in Note 4 to the Condensed Consolidated Financial Statements, the methodology used to allocate certain selling, general, and administrative expenses was refined in the first quarter of 2019. The amounts presented below for the 13-weeks and 39-weeks ended September 29, 2018 are presented here as they were originally reported.

Comparison of 13-Weeks ended September ~~28, 2019~~26, 2020 and September ~~29, 2018~~28, 2019

(Amounts included in the following discussion are stated in thousands unless otherwise indicated)

Net Sales

	13-Weeks Ended September 28, 2019					13-Weeks Ended September 29, 2018					Year over Year
	Net Sales		% of Total			Net Sales		% of Total			$ Change			% Change
Net Sales																	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness																	$	328,446			35	%	$	243,099
Percentage of Total Net Sales																		29	%					26	%
Outdoor	$	258,294		28	%	$	209,415		26	%	$	48,879			23	%		334,844			30	%		258,294
Fitness		243,099		26	%		190,185		24	%		52,914			28	%
Percentage of Total Net Sales																		30	%					28	%
Aviation																		151,112			(19	%)		187,574
Percentage of Total Net Sales																		14	%					20	%
Auto																		129,355			(6	%)		137,722
Percentage of Total Net Sales																		12	%					15	%
Marine		107,694		11	%		98,770		12	%		8,924			9	%		165,437			54	%		107,694
Auto		137,722		15	%		165,214		20	%		(27,492	)		(17	)%
Aviation		187,574		20	%		146,427		18	%		41,147			28	%
Percentage of Total Net Sales																		15	%					11	%
Total	$	934,383		100	%	$	810,011		100	%	$	124,372			15	%	$	1,109,194			19	%	$	934,383

Net sales increased ~~15%~~19% for the 13-week period ended September ~~28, 2019~~26, 2020 when compared to the year-ago quarter. ~~The outdoor, fitness, marine, and aviation segments collectively increased by 24%, contributing 85% of total revenue.~~ Outdoor was the largest portion of our revenue mix at 30% in the third quarter of 2020 compared to 28% in the third quarter of ~~2019 compared to 26% in the third quarter of 2018.~~

2019. Total unit sales in the third quarter of ~~2019~~2020 increased to ~~3,659~~4,041 when compared to total unit sales of ~~3,527~~3,659 in the third quarter of ~~2018.~~2019, which was a smaller increase than that of revenue primarily due to shifts in segment and product mix.

~~Outdoor, fitness, marine, and aviation~~Fitness segment revenue increased ~~23%, 28%, 9%, and 28%, respectively,~~35% when compared to the year-ago ~~quarter. The outdoor segment revenue increase was~~quarter, primarily driven by sales growth in ~~multiple product~~advanced wearables and cycling products. Outdoor segment revenue increased 30% when compared to the year-ago quarter,driven by sales growthacross all categories led ~~primarily~~ by strong demand for our adventure watches. ~~The fitness~~Marine 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 current~~increased 54% when compared to the year-ago quarter, ~~marine segment revenue increase was~~ driven by sales growth in multiple product categories, led primarily by chartplotters. ~~The aviation~~Aviation segment revenue ~~increase was driven by sales growth in both OEM and aftermarket categories. Auto segment revenue decreased 17%~~declined 19% from the year-ago quarter, primarily due to ~~lower~~fewer shipments to OEM ~~sales~~customers and reduced contributions from ADS-B products. Auto segment revenue declined 6% from the year-ago quarter as declines in ~~the current quarter~~personal navigation devices were partially offset by growth in niche categories and ~~the ongoing PND market contraction.~~new auto OEM programs.

Gross Profit

	13-Weeks Ended September 28, 2019					13-Weeks Ended September 29, 2018					Year over Year
	Gross Profit		% of Revenue			Gross Profit		% of Revenue			$ Change			% Change
Gross Profit																	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness																	$	177,794			40	%	$	126,835
Percentage of Segment Net Sales																		54	%					52	%
Outdoor	$	170,846		66	%	$	136,671		65	%	$	34,175			25	%		223,704			31	%		170,846
Fitness		126,835		52	%		103,441		54	%		23,394			23	%
Percentage of Segment Net Sales																		67	%					66	%
Aviation																		107,927			(23	%)		139,688
Percentage of Segment Net Sales																		71	%					74	%
Auto																		58,135			(12	%)		65,814
Percentage of Segment Net Sales																		45	%					48	%
Marine		64,275		60	%		58,508		59	%		5,767			10	%		100,423			56	%		64,275
Auto		65,814		48	%		70,925		43	%		(5,111	)		(7	)%
Aviation		139,688		74	%		111,202		76	%		28,486			26	%
Percentage of Segment Net Sales																		61	%					60	%
Total	$	567,458		61	%	$	480,747		59	%	$	86,711			18	%	$	667,983			18	%	$	567,458
Percentage of Total Net Sales																		60	%					61	%

Gross profit dollars in the third quarter of ~~2019~~2020 increased 18%, primarily due to ~~growth~~the increase in net sales ~~along with a~~compared to the year-ago quarter, as described above. Consolidated gross margin ~~increase of 140 basis points~~was relatively flat when compared to the year-ago quarter. Gross margin ~~increased in the auto segment,~~ was relatively flat in the outdoor segment, increased in the fitness and marine segments, and decreased in the ~~fitness~~aviation and ~~aviation~~auto segments when compared to the year-ago quarter.

The ~~auto~~fitness and marine segments gross margin increases of 190 basis points and 100 basis points, respectively, were primarily attributable to product mix. The aviation segment gross margin ~~increase~~decrease of ~~490~~300 basis points was primarily attributable to ~~lower license expense. A portion of license expense favorability in the auto segment is~~product mix and higher per-unit manufacturing overhead costs. These trends are generally expected to continue ~~for~~in the ~~remainder~~fourth quarter of ~~the year. Gross margin remained relatively flat within the outdoor and marine segments.~~2020. The ~~fitness and aviation~~auto segment gross margin ~~decreases were~~decrease of 280 basis points was primarily

attributable to product ~~mix.~~mix associated with growth in new auto OEM programs. This product mix and associated gross margin trend is generally expected to continue in the fourth quarter of 2020 and beyond.

Advertising Expense

Advertising	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness	$	13,444			0	%	$	13,403
Percentage of Segment Net Sales		4	%					6	%
Outdoor		12,607			11	%		11,327
Percentage of Segment Net Sales		4	%					4	%
Aviation		511			(57	%)		1,189
Percentage of Segment Net Sales		0	%					1	%
Auto		3,183			11	%		2,874
Percentage of Segment Net Sales		2	%					2	%
Marine		4,121			6	%		3,875
Percentage of Segment Net Sales		2	%					4	%
Total	$	33,866			4	%	$	32,668
Percentage of Total Net Sales		3	%					3	%

~~Advertising Expense~~

13-Weeks Ended
September 28, 2019 13-Weeks Ended
September 29, 2018 Year over Year
Advertising % of Advertising % of
Expense Revenue Expense Revenue $ Change % Change
Outdoor $ 11,327 4 % $ 9,455 5 % $ 1,872 20 %
Fitness 13,403 6 % 12,296 6 % 1,107 9 %
Marine 3,875 4 % 3,594 4 % 281 8 %
Auto 2,874 2 % 4,180 3 % (1,306 ) (31 )%
Aviation 1,189 1 % 1,615 1 % (426 ) (26 )%
Total $ 32,668 3 % $ 31,140 4 % $ 1,528 5 %

Advertising expense as a percent of revenue was relatively flat when compared to the year-ago quarter and increased 5%4% in absolute dollars. The total absolute dollar increase was primarily attributable to increased ~~cooperative~~media advertising in the outdoor ~~fitness, and marine segments, partially offset by decreased cooperative advertising in the auto and aviation segments.~~segment.

Selling, General and Administrative Expense

	13-Weeks Ended September 28, 2019					13-Weeks Ended September 29, 2018					Year over Year
	Selling, General &		% of			Selling, General &		% of
	Admin. Expenses		Revenue			Admin. Expenses		Revenue			$ Change			% Change
Selling, General & Admin. Expenses																	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness																	$	46,239			25	%	$	37,119
Percentage of Segment Net Sales																		14	%					15	%
Outdoor	$	32,679		13	%	$	31,240		15	%	$	1,439			5	%		37,160			14	%		32,679
Fitness		37,119		15	%		31,370		16	%		5,749			18	%
Percentage of Segment Net Sales																		11	%					13	%
Aviation																		20,225			20	%		16,921
Percentage of Segment Net Sales																		13	%					9	%
Auto																		16,105			(10	%)		17,818
Percentage of Segment Net Sales																		12	%					13	%
Marine		20,232		19	%		21,704		22	%		(1,472	)		(7	)%		22,405			11	%		20,232
Auto		17,818		13	%		21,418		13	%		(3,600	)		(17	)%
Aviation		16,921		9	%		8,937		6	%		7,984			89	%
Percentage of Segment Net Sales																		14	%					19	%
Total	$	124,769		13	%	$	114,669		14	%	$	10,100			9	%	$	142,134			14	%	$	124,769
Percentage of Total Net Sales																		13	%					13	%

Selling, general and administrative expense increased 9%14% in absolute dollars and was relatively flat as a percent of revenue compared to the year-ago quarter. The absolute dollar increase in the third quarter of ~~2019~~2020 was primarily attributable to increased information technology and personnel ~~costs and expenses from recent acquisitions. The fitness segment decrease as a percent of revenue was primarily due to greater leverage of operating~~related costs.

As noted above and in Note 4 to the Condensed Consolidated Financial Statements, the Company refined its methodology to allocate certain selling, general and administrative expenses in the beginning of the 2019 fiscal year. The prior year amounts are presented here as originally reported. For comparative purposes, we estimate selling, general and administrative expenses for the third quarter of 2018 would have been approximately $4 million more for the aviation segment, approximately $2 million less for the marine segment, approximately $2 million less for the outdoor segment, and not significantly different for the fitness and auto segments. Selling, general and administrative expense as a percent of revenue also decreased in the outdoor and marine segments due to greater leverage of operating costs.

Considering the refined allocation methodology noted above, we estimate selling, general and administrative expenses for the 52-weeks ended December 29, 2018 would have been approximately $18 million more for the aviation segment, approximately $11 million less for the marine segment, approximately $7 million less for the outdoor segment, and not significantly different for the fitness and auto segments.

Research and Development Expense

13-Weeks Ended
September 28, 2019 13-Weeks Ended
September 29, 2018 Year over Year
Research & % of Research & % of
Development Revenue Development Revenue $ Change % Change
Outdoor $ 21,789 8 % $ 17,004 8 % $ 4,785 28 %
Fitness 26,482 11 % 22,397 12 % 4,085 18 %
Marine 20,160 19 % 19,302 20 % 858 4 %
Auto 24,265 18 % 30,295 18 % (6,030 ) (20 )%
Aviation 55,865 30 % 49,981 34 % 5,884 12 %
Total $ 148,561 16 % $ 138,979 17 % $ 9,582 7 %

Research & Development	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness	$	31,028			17	%	$	26,482
Percentage of Segment Net Sales		9	%					11	%
Outdoor		26,460			21	%		21,789
Percentage of Segment Net Sales		8	%					8	%
Aviation		58,594			5	%		55,865
Percentage of Segment Net Sales		39	%					30	%
Auto		35,385			46	%		24,265
Percentage of Segment Net Sales		27	%					18	%
Marine		23,415			16	%		20,160
Percentage of Segment Net Sales		14	%					19	%
Total	$	174,882			18	%	$	148,561
Percentage of Total Net Sales		16	%					16	%

Research and development expense as a percent of revenue ~~decreased 130 basis points~~was relatively flat when compared to the year-ago quarter and increased 7%18% in absolute dollars. The absolute dollar increase was primarily due to higher engineering personnel costs ~~related to wearable and~~across several categories. The aviation product offerings and expenses resulting from recent acquisitions, partially offset by the capitalization of certain contractually reimbursable preproduction design and development personnel costs within the auto segment. Our research and development spending is focused on product development, improving existing software capabilities, and exploring new categories.

~~Operating Income~~

13-Weeks Ended
September 28, 2019 13-Weeks Ended
September 29, 2018 Year over Year
Operating Income % of Revenue Operating Income % of Revenue $ Change % Change
Outdoor $ 105,051 41 % $ 78,972 38 % $ 26,079 33 %
Fitness 49,831 20 % 37,378 20 % 12,453 33 %
Marine 20,008 19 % 13,908 14 % 6,100 44 %
Auto 20,857 15 % 15,032 9 % 5,825 39 %
Aviation 65,713 35 % 50,669 35 % 15,044 30 %
Total $ 261,460 28 % $ 195,959 24 % $ 65,501 33 %

~~Operating income increased 33% in absolute dollars and 380 basis points~~segment increase as a percent of revenue ~~when compared~~was primarily due to the ~~year-ago quarter. In the current quarter, the operating income growth~~decline in sales, as described above. The auto segment increase in absolute dollars and as a percent of revenue was primarily attributable to higher engineering personnel costs associated with auto OEM product development and a lower proportion of such costs being capitalized. This trend is generally expected to continue in the fourth quarter of 2020 and

beyond, although the proportion of preproduction design and development costs capitalized can fluctuate from period to period based on timing of customer agreements and underlying contractual terms.

Operating Income

Operating Income	13-Weeks Ended September 26, 2020			Year-over-Year Change			13-Weeks Ended September 28, 2019
Fitness	$	87,083			75	%	$	49,831
Percentage of Segment Net Sales		27	%					20	%
Outdoor		147,477			40	%		105,051
Percentage of Segment Net Sales		44	%					41	%
Aviation		28,597			(56	%)		65,713
Percentage of Segment Net Sales		19	%					35	%
Auto		3,462			(83	%)		20,857
Percentage of Segment Net Sales		3	%					15	%
Marine		50,482			152	%		20,008
Percentage of Segment Net Sales		31	%					19	%
Total	$	317,101			21	%	$	261,460
Percentage of Total Net Sales		29	%					28	%

Operating income increased 21% in absolute dollars and was relatively flat as a percent of revenue when compared to the year-ago quarter. The increase in operating income in the current quarter was due to revenue growth ~~improved~~and relatively consistent gross margin, and ~~greater leverage of~~slightly offset by higher operating expenses, as ~~discussed~~described above. Operating income, in absolute dollars and as a percent of revenue, decreased in the aviation segment primarily due to sales declines in the current quarter, when compared to the year-ago quarter. Auto segment operating income decreased in absolute dollars and as a percent of revenue in the current quarter, primarily due to investments in auto OEM product development and lower sales, as described above.

We anticipate that COVID-19 will have a continued unfavorable impact on net sales and profitability of the aviation segment for the remainder of fiscal 2020.

Other Income (Expense)

	13-Weeks Ended			13-Weeks Ended
	September 28, 2019			September 29, 2018
Other Income (Expense)							13-Weeks Ended September 26, 2020		13-Weeks Ended September 28, 2019
Interest income	$	12,309		$	11,089		$	7,777	$	12,309
Foreign currency losses		(16,296	)		(6,868	)
Other		294			1,147
Foreign currency gains (losses)								10,113		(16,296	)
Other income								1,726		294
Total	$	(3,693	)	$	5,368		$	19,616	$	(3,693	)

The average return on cash and investments, including interest and capital gains/losses, during the third quarter of ~~2019~~2020 was ~~2.0%~~1.3% compared to ~~1.8%~~2.0% during the same quarter of ~~2018.~~2019. Interest income ~~increased~~decreased primarily due to ~~slightly higher~~lower yields on fixed-income securities.

Foreign currency gains and losses for the Company are ~~typically~~ driven by movements ~~in the Taiwan Dollar, Euro, and British Pound Sterling~~of a number of currencies in relation to the U.S. Dollar. The Taiwan Dollar is the functional currency of Garmin Corporation, the Euro is the functional currency of several subsidiaries, and the U.S. Dollar is the functional currency of Garmin (Europe) Ltd., ~~and the Euro is the functional currency of most of our other European subsidiaries,~~ although some transactions and balances are denominated in British Pounds. Other notable currency exposures include the Australian Dollar, Chinese Yuan, and Japanese Yen. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash and marketable securities, receivables and payables held in a currency other than the functional currency at a given legal entity. ~~Due~~

The $10.1 million currency gain recognized in the third quarter of 2020 was primarily due to the ~~relative size of~~U.S. Dollar weakening against the ~~entities using a functional currency other than the Taiwan Dollar,~~ Euro and British Pound Sterling, partially offset by the U.S. Dollar weakening against the Taiwan Dollar, within the 13-week period ended September 26, 2020. During this period, the U.S. Dollar weakened 3.7% against the Euro, and 3.3% against the British Pound Sterling, resulting in gains of $11 million, and $1.8 million, respectively, while the U.S. Dollar weakened 0.8% against the Taiwan Dollar, resulting in a loss of $4.3 million. The remaining net currency ~~fluctuations~~gain of $1.6 million was related to ~~these entities are not expected to have a material impact on~~ the ~~Company’s financial statements.~~timing of transactions and impacts of other currencies, each of which was individually immaterial.

The $16.3 million currency loss recognized in the third quarter of 2019 was primarily due to the U.S. Dollar strengthening against the Euro and British Pound Sterling, partially offset by the U.S. Dollar strengthening against the Taiwan Dollar, within the ~~13-weeks~~13-week period ended September 28, 2019. During this period, the U.S. Dollar strengthened

3.8% against the Euro and strengthened 3.2% against the British Pound Sterling, resulting in losses of $9.8 million and $1.5 million, respectively, while the U.S. Dollar strengthened 0.3% against the Taiwan Dollar, resulting in a gain of $1.2 million. The remaining net currency loss of $6.2 million was related to the timing of transactions and impacts of other currencies, each of which was individually immaterial.

Income Tax Provision

The ~~$6.9~~Company recorded income tax expense of $23.3 million in the 13-week period ended September 26, 2020, compared to income tax expense of $29.9 million in the 13-week period ended September 28, 2019. The effective tax rate was 6.9% in the third quarter of 2020, compared to 11.6% in the third quarter of 2019. The effective tax rate in the third quarter of 2020 decreased 470 basis points compared to the effective tax rate in the prior year quarter. The decrease was primarily due toa favorable shift in income mix by jurisdiction related to the transaction to migrate intellectual property ownership from Switzerland to the United States, which began in the first quarter of 2020.

Net Income

As a result of the above, net income for the 13-week period ended September 26, 2020 was $313.4 million compared to $227.9 million for the 13-week period ended September 28, 2019, an increase of $85.5 million.

Comparison of 39-Weeks ended September 26, 2020 and September 28, 2019

Net Sales

Net Sales	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	846,688			25	%	$	675,007
Percentage of Total Net Sales		30	%					25	%
Outdoor		716,146			15	%		622,748
Percentage of Total Net Sales		25	%					24	%
Aviation		465,850			(14	%)		542,316
Percentage of Total Net Sales		17	%					20	%
Auto		320,215			(24	%)		422,132
Percentage of Total Net Sales		11	%					16	%
Marine		486,269			24	%		393,070
Percentage of Total Net Sales		17	%					15	%
Total	$	2,835,168			7	%	$	2,655,273

Net sales increased 7% for the 39-week period ended September 26, 2020 compared to the year-ago period. Fitness was the largest portion of our revenue mix at 30% in the first three quarters of 2020 compared to 25% in the first three quarters of 2019. Total unit sales in the first three quarters of 2020 decreased to 10,066 when compared to total unit sales of 10,678 in the first three quarters of 2019, primarily due to shifts in segment and product mix.

Fitness segment revenue increased 25% when compared to the year-ago period, primarily driven by sales growth in advanced wearables and cycling products. Outdoor segment revenue increased 15% when compared to the year-ago period, primarily driven by sales growth in adventure watches. Marine segment revenue increased 24% when compared to the year-ago period, driven by sales growth in multiple product categories, led primarily by chartplotters and advanced sonars. Aviation segment revenue decreased 14% from the year-ago period, primarily due to fewer shipments to OEM customers and reduced contributions from ADS-B products. Auto segment revenue decreased 24% from the year-ago period, primarily due to the ongoing PND market contraction and lower auto OEM sales, factors which were compounded by COVID-19 and its associated impact on consumers, retailers, and the automotive manufacturers for part of the current year period.

Gross Profit

Gross Profit	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	446,936			27	%	$	352,805
Percentage of Segment Net Sales		53	%					52	%
Outdoor		469,150			16	%		403,842
Percentage of Segment Net Sales		66	%					65	%
Aviation		338,770			(17	%)		405,848
Percentage of Segment Net Sales		73	%					75	%
Auto		147,393			(26	%)		198,012
Percentage of Segment Net Sales		46	%					47	%
Marine		288,103			23	%		234,014
Percentage of Segment Net Sales		59	%					60	%
Total	$	1,690,352			6	%	$	1,594,521
Percentage of Total Net Sales		60	%					60	%

Gross profit dollars in the first three quarters of 2020 increased 6%, primarily due to the increase in net sales compared to the year-ago period, as described above. Consolidated gross margin was relatively flat when compared to the year-ago period. Gross margin was relatively flat in the fitness, outdoor, auto, and marine segments, and decreased in the aviation segment when compared to the year-ago period. The aviation segment gross margin decrease of 200 basis points was primarily attributable to product mix.

Advertising Expense

Advertising	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	36,802			(11	%)	$	41,319
Percentage of Segment Net Sales		4	%					6	%
Outdoor		28,006			(8	%)		30,464
Percentage of Segment Net Sales		4	%					5	%
Aviation		2,313			(43	%)		4,054
Percentage of Segment Net Sales		0	%					1	%
Auto		7,177			(29	%)		10,180
Percentage of Segment Net Sales		2	%					2	%
Marine		15,733			0	%		15,791
Percentage of Segment Net Sales		3	%					4	%
Total	$	90,031			(12	%)	$	101,808
Percentage of Total Net Sales		3	%					4	%

Advertising expense as a percent of revenue was relatively flat when compared to the year-ago period and decreased 12% in absolute dollars. The total absolute dollar decrease was primarily attributable to lower media spend in the fitness and outdoor segments and reduced cooperative advertising in the auto segment.

Selling, General and Administrative Expense

Selling, General & Admin. Expenses	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	131,540			15	%	$	114,657
Percentage of Segment Net Sales		16	%					17	%
Outdoor		102,232			12	%		91,390
Percentage of Segment Net Sales		14	%					15	%
Aviation		57,871			20	%		48,232
Percentage of Segment Net Sales		12	%					9	%
Auto		49,255			(13	%)		56,486
Percentage of Segment Net Sales		15	%					13	%
Marine		70,437			1	%		69,524
Percentage of Segment Net Sales		14	%					18	%
Total	$	411,335			8	%	$	380,289
Percentage of Total Net Sales		15	%					14	%

Selling, general and administrative expense increased 8% in absolute dollars and was relatively flat as a percent of revenue compared to the year-ago period. The absolute dollar increase in the first three quarters of 2020 was primarily attributable to expenses from recent acquisitions and increased information technology and personnel costs, partially offset by lower legal related costs.

Research and Development Expense

Research & Development	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	88,519			13	%	$	78,460
Percentage of Segment Net Sales		10	%					12	%
Outdoor		76,855			21	%		63,648
Percentage of Segment Net Sales		11	%					10	%
Aviation		175,103			7	%		163,398
Percentage of Segment Net Sales		38	%					30	%
Auto		97,798			26	%		77,368
Percentage of Segment Net Sales		31	%					18	%
Marine		67,738			12	%		60,487
Percentage of Segment Net Sales		14	%					15	%
Total	$	506,013			14	%	$	443,361
Percentage of Total Net Sales		18	%					17	%

Research and development expense as a percent of revenue increased 110 basis points when compared to the year-ago period and increased 14% in absolute dollars. The absolute dollar increase was primarily due to higher engineering personnel costs across several categories. The aviation segment increase as a percent of revenue was primarily due to the decline in sales, as described above. The auto segment increase in absolute dollars and as a percent of revenue was primarily attributable to auto OEM product development, in addition to the decline in sales, as described above. The fitness segment decrease as a percent of revenue was primarily due to the increase in sales, as described above.

Operating Income

Operating Income	39-Weeks Ended September 26, 2020			Year-over-Year Change			39-Weeks Ended September 28, 2019
Fitness	$	190,075			61	%	$	118,369
Percentage of Segment Net Sales		22	%					18	%
Outdoor		262,057			20	%		218,340
Percentage of Segment Net Sales		37	%					35	%
Aviation		103,483			(46	%)		190,164
Percentage of Segment Net Sales		22	%					35	%
Auto		(6,837	)		(113	%)		53,978
Percentage of Segment Net Sales		(2	%)					13	%
Marine		134,195			52	%		88,212
Percentage of Segment Net Sales		28	%					22	%
Total	$	682,973			2	%	$	669,063
Percentage of Total Net Sales		24	%					25	%

Operating income increased 2% in absolute dollars and decreased 110 basis points as a percent of revenue when compared to the year-ago period. The increase in operating income was due to improved gross profit dollars, partially offset by higher operating expenses, as described above. The decrease in operating margin was due to higher operating expenses as a percent of total net sales as described above. Operating income, in absolute dollars and as a percent of revenue, decreased in the aviation segment primarily due to a sales decline in the first three quarters of 2020 compared to the year-ago period. The auto segment experienced an operating loss in the 39-week period ended September 26, 2020, primarily due to investments in auto OEM product development and lower sales, as described above.

We anticipate that COVID-19 will have a continued unfavorable impact on net sales and profitability of the aviation segment for the remainder of fiscal 2020.

Other Income (Expense)

Other Income (Expense)	39-Weeks Ended September 26, 2020			39-Weeks Ended September 28, 2019
Interest income	$	30,258		$	39,748
Foreign currency losses		(9,802	)		(12,568	)
Other Income		8,515			3,567
Total	$	28,971		$	30,747

The average returns on cash and investments, including interest and capital gains/losses, during the 39-week period ended September 26, 2020 and the 39-week period ended September 28, 2019 were 1.6% and 2.0%, respectively. Interest income decreased primarily due to lower yields on fixed-income securities.

Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar. The Taiwan Dollar is the functional currency of Garmin Corporation, the Euro is the functional currency of several subsidiaries, and the U.S. Dollar is the functional currency of Garmin (Europe) Ltd., although some transactions and balances are denominated in British Pounds. Other notable currency exposures include the Australian Dollar, Chinese Yuan, and Japanese Yen. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash and marketable securities, receivables and payables held in a currency other than the functional currency at a given legal entity.

The $9.8 million currency loss recognized in the ~~third quarter of 2018~~39-week period ended September 26, 2020 was primarily due to the ~~strengthening of~~U.S. Dollar weakening against the Taiwan Dollar, partially offset by the U.S. Dollar weakening against the Euro, ~~and British Pound Sterling~~ within the ~~13-weeks~~39-week period ended September ~~29, 2018.~~26, 2020. During this period, the U.S. Dollar ~~strengthened 0.7%~~weakened 2.9% against the ~~Euro and 1.3% against the British Pound Sterling,~~Taiwan Dollar, resulting in ~~losses~~a loss of ~~$2.7~~$13.0 million, ~~and $0.6 million, respectively,~~ while the U.S. Dollar ~~remained relatively flat~~weakened 4.1% against the ~~Taiwan Dollar.~~Euro, resulting in a gain of $9.0 million. The remaining net currency loss of ~~$3.6~~$5.8 million was related to the timing of transactions and impacts of other currencies, each of which was individually immaterial.

~~Income Tax Provision~~

The Company recorded income tax expense of $29.9 million in the 13-week period ended September 28, 2019, compared to income tax expense of $17.1 million in the 13-week period ended September 29, 2018. The effective tax rate was 11.6% in the third quarter of 2019, compared to 8.5% in the third quarter of 2018. The 310 basis points increase to the third quarter of 2019 effective tax rate compared to the prior year quarter is primarily due to a decrease in uncertain tax position reserves released due to expiring statutes of limitations in the third quarter of 2019 compared to the third quarter of 2018.

As discussed in Note 13 to the Condensed Consolidated Financial Statements, Switzerland corporate tax reform was approved by public referendum in May 2019 and enacted in October 2019. Accordingly, the Company expects to record an income tax benefit of approximately $20 to $220 million in the fourth quarter of 2019 due to an increase in certain Switzerland deferred tax assets resulting from enactment of Switzerland Federal and Schaffhausen cantonal tax reform. The Company is evaluating transitional measures in Switzerland tax law that may affect the overall increase in deferred tax assets as well as the impact of tax reform to its ongoing effective tax rate, the materiality of which is not yet known.

~~Net Income~~

As a result of the above, net income for the 13-weeks ended September 28, 2019 was $227.9 million compared to $184.2 million for the 13-week period ended September 28, 2018, an increase of $43.7 million.

~~Comparison of 39-Weeks Ended September 28, 2019 and 39-Weeks Ended September 29, 2018~~

~~Net Sales~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Net Sales % of Total Net Sales % of Total $ Change % Change
Outdoor $ 622,748 24 % $ 555,314 23 % $ 67,434 12 %
Fitness 675,007 25 % 581,315 24 % 93,692 16 %
Marine 393,070 15 % 346,908 14 % 46,162 13 %
Auto 422,132 16 % 486,653 20 % (64,521 ) (13 )%
Aviation 542,316 20 % 445,146 19 % 97,170 22 %
Total $ 2,655,273 100 % $ 2,415,336 100 % $ 239,937 10 %

Net sales increased 10% for the 39-week period ended September 28, 2019 when compared to the year-ago period. The outdoor, fitness, marine, and aviation segments collectively increased by 16%, contributing 84% of total revenue. Fitness was the largest portion of our revenue mix at 25% in the first three quarters of 2019 compared to 24% in the first three quarters of 2018.

~~Total unit sales in the first three quarters of 2019 increased to 10,678 when compared to the total unit sales of 10,266 in the first three quarters of 2018.~~

Outdoor, fitness, marine, and aviation segment revenues increased 12%, 16%, 13%, and 22%, respectively, when compared to the year-ago period. The outdoor segment revenue increase was primarily driven by strong sales in adventure watches, golf and inReach product lines. Fitness segment revenue increases were primarily driven by strong sales in wearables and sales from newly acquired Tacx. Marine segment revenue increases were driven by sales growth in multiple product categories, led primarily by chartplotters and sonar products. The aviation segment revenue increase was driven by sales growth in both OEM and aftermarket categories. Auto segment revenue decreased 13% from the year-ago period, primarily due to the ongoing PND market contraction.

~~Gross Profit~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Gross Profit % of Revenue Gross Profit % of Revenue $ Change % Change
Outdoor $ 403,842 65 % $ 358,829 65 % $ 45,013 13 %
Fitness 352,805 52 % 326,473 56 % 26,332 8 %
Marine 234,014 60 % 203,976 59 % 30,038 15 %
Auto 198,012 47 % 207,389 43 % (9,377 ) (5 )%
Aviation 405,848 75 % 333,886 75 % 71,962 22 %
Total $ 1,594,521 60 % $ 1,430,553 59 % $ 163,968 11 %

Gross profit dollars in the 39-week period ended September 28, 2019 increased 11% while gross margin remained relatively flat compared to the year-ago period. Gross margin increased 430 basis points in the auto segment when compared to the year-ago period, primarily attributable to lower license expense and product mix. A portion of license expense favorability in the auto segment is expected to continue for the remainder of the year. Gross margin remained relatively flat within the outdoor, marine, and aviation segments. Gross margin decreased in the fitness segment primarily due to lower average selling prices and product mix.

~~Advertising Expense~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Advertising % of Advertising % of
Expense Revenue Expense Revenue $ Change % Change
Outdoor $ 30,464 5 % $ 25,955 5 % $ 4,509 17 %
Fitness 41,319 6 % 40,515 7 % 804 2 %
Marine 15,791 4 % 14,022 4 % 1,769 13 %
Auto 10,180 2 % 14,100 3 % (3,920 ) (28 )%
Aviation 4,054 1 % 5,408 1 % (1,354 ) (25 )%
Total $ 101,808 4 % $ 100,000 4 % $ 1,808 2 %

Advertising expense increased 2% in absolute dollars and was relatively flat as a percent of revenue when compared to the year-ago period. Increased cooperative advertising in the outdoor, fitness, and marine segments and increased media advertising in the outdoor segment was partially offset by decreased cooperative advertising in the auto and aviation segments.

~~Selling, General and Administrative Expense~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Selling, General & Admin. % of Selling, General & Admin. % of
Expenses Revenue Expenses Revenue $ Change % Change
Outdoor $ 91,390 15 % $ 85,887 15 % $ 5,503 6 %
Fitness 114,657 17 % 95,462 16 % 19,195 20 %
Marine 69,524 18 % 75,841 22 % (6,317 ) (8 )%
Auto 56,486 13 % 68,465 14 % (11,979 ) (17 )%
Aviation 48,232 9 % 26,579 6 % 21,653 81 %
Total $ 380,289 14 % $ 352,234 15 % $ 28,055 8 %

Selling, general and administrative expense increased 8% in absolute dollars and was relatively flat as a percent of revenue when compared to the year-ago period. The absolute dollar increase was primarily attributable to personnel costs, legal related costs, and expenses from recent acquisitions. The fitness segment increase as a percent of revenue was primarily due to expenses from newly acquired Tacx.

As noted above and in Note 4 to the Condensed Consolidated Financial Statements, the Company refined its methodology to allocate certain selling, general and administrative expenses in the beginning of the 2019 fiscal year. The prior year amounts are presented here as originally reported. For comparative purposes, we estimate selling, general and administrative expenses for the first three quarters of 2018 would have been approximately $13 million more for the aviation segment, approximately $10 million less for the marine segment, approximately $3 million less for the outdoor segment, and not significantly different for the fitness and auto segments. Selling, general and administrative expense as a percent of revenue also decreased in marine due to greater leverage of operating costs.

~~Research and Development Expense~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Research & % of Research & % of
Development Revenue Development Revenue $ Change % Change
Outdoor $ 63,648 10 % $ 52,276 9 % $ 11,372 22 %
Fitness 78,460 12 % 67,197 12 % 11,263 17 %
Marine 60,487 15 % 59,307 17 % 1,180 2 %
Auto 77,368 18 % 93,711 19 % (16,343 ) (17 )%
Aviation 163,398 30 % 150,158 34 % 13,240 9 %
Total $ 443,361 17 % $ 422,649 17 % $ 20,712 5 %

Research and development expense as a percent of revenue was relatively flat when compared to the year-ago period and increased 5% in absolute dollars. The absolute dollar increase in research and development expenses when compared with the year-ago period was primarily due to engineering personnel costs related to our wearable and aviation product offerings and expenses resulting from recent acquisitions, partially offset by the capitalization of certain contractually reimbursable preproduction design and development personnel costs within the auto segment. Our research and development spending is focused on product development, improving existing software capabilities, and exploring new categories.

~~Operating Income~~

39-Weeks Ended
September 28, 2019 39-Weeks Ended
September 29, 2018 Year over Year
Operating % of Operating % of
Income Revenue Income Revenue $ Change % Change
Outdoor $ 218,340 35 % $ 194,711 35 % $ 23,629 12 %
Fitness 118,369 18 % 123,299 21 % (4,930 ) (4 )%
Marine 88,212 22 % 54,806 16 % 33,406 61 %
Auto 53,978 13 % 31,113 6 % 22,865 73 %
Aviation 190,164 35 % 151,741 34 % 38,423 25 %
Total $ 669,063 25 % $ 555,670 23 % $ 113,393 20 %

Operating income increased 20% in absolute dollars and increased 220 basis points as a percent of revenue when compared to the year-ago period. The growth in operating income on an absolute dollar basis and as a percent of revenue was the result of revenue growth, improved gross margin, and greater leverage of operating expenses, as discussed above.

~~Other Income (Expense)~~

39-Weeks Ended 39-Weeks Ended
September 28,
2019 September 29,
2018
Interest income $ 39,748 $ 32,310
Foreign currency losses (12,568 ) (3,405 )
Other 3,567 6,800
Total $ 30,747 $ 35,705

The average returns on cash and investments, including interest and capital gains/losses, during the 39-weeks ended September 28, 2019 and the 39-weeks ended September 29, 2018 were 2.0% and 1.8%, respectively. Interest income increased primarily due to slightly higher yields on fixed-income securities.

The $12.6 million currency loss recognized in the ~~first three quarters of~~39-week period ended September 28, 2019 was primarily due to the strengthening of the U.S. Dollar against most other currencies, partially offset by the U.S. Dollar strengthening against the Taiwan Dollar, within the ~~39-weeks~~39-week period ended September 28, 2019. During this period, the U.S. Dollar strengthened 1.5% against the Taiwan Dollar, resulting in a gain of $8.6 million. This was more than offset by the U.S. Dollar strengthening 4.4% against the Euro and 3.3% against the British Pound Sterling, resulting in losses of $13.9 million, and $0.9 million, respectively, and additional net currency losses of $6.4 million related to the timing of transactions and impacts of other currencies, each of which was individually immaterial.

Income Tax Provision

The ~~$3.4~~Company recorded income tax expense of $53.2 million ~~currency loss recognized~~ in the first three quarters of ~~2018 was primarily due~~2020 compared to the strengthening of the U.S. Dollar against most other currencies, partially offset by the U.S. Dollar strengthening against the Taiwan Dollar within the 39-weeks ended September 29, 2018. During this period, the U.S. Dollar strengthened 2.7% against the Taiwan Dollar, resulting in a gain of $13.6 million. This was more than offset by the U.S. Dollar strengthening 3.2% against the Euro and 3.6% against the British Pound Sterling, resulting in losses of $7.7 million and $0.6 million, respectively, and additional net currency losses of $8.7 million related to the timing of transactions and impacts of other currencies, each of which was individually immaterial.

~~Income Tax Provision~~

~~The Company recorded~~ income tax expense of $108.1 million in the first three quarters of ~~2019, compared to income~~2019. The effective tax ~~expense of $87.4 million~~rate was 7.5% in the first three quarters of ~~2018. The effective tax rate was~~2020, compared to 15.4% in the first three quarters of ~~2019, compared~~2019. Excluding a $14.3 million income tax benefit recognized by the Company in the second quarter of 2020 due to ~~14.8%~~the release of uncertain tax position reserves associated with a 2014 intercompany restructuring, the effective tax rate in the first three quarters of ~~2018.~~

~~As discussed in Note 13~~2020 decreased 600 basis points compared to the Condensed Consolidated Financial Statements, Switzerland corporate tax reform was approved by public referendum in May 2019 and enacted in October 2019. Accordingly, the Company expects to record an income tax benefit of approximately $20 to $220 million in the fourth quarter of 2019 due to an increase in certain Switzerland deferred tax assets resulting from enactment of Switzerland Federal and Schaffhausen cantonal tax reform. The Company is evaluating transitional measures in Switzerland tax law that may affect the overall increase in deferred tax assets as well as the impact of tax reform to its ongoing effective tax rate in the ~~materiality~~first three quarters of 2019. The decrease was primarily due to a favorable shift in income mix by jurisdiction related to the transaction to migrate intellectual property ownership from Switzerland to the United States, which ~~is not yet known.~~began in the first quarter of 2020.

Net Income

As a result of the above, net income for the 39-week period ended September ~~28, 2019~~26, 2020 was ~~$591.7~~$658.8 million compared to ~~$503.9~~$591.7 million for the 39-week period ended September ~~29, 2018,~~28, 2019, an increase of ~~$87.8~~$67.1 million.

Liquidity and Capital Resources

As of September ~~28, 2019,~~26, 2020, we had approximately ~~$2.5~~$2.7 billion of cash and cash equivalents and marketable securities. We primarily use cash flow from operations, and expect that future cash requirements may be used, to fund our capital expenditures, support our working capital requirements, pay dividends, and fund strategic acquisitions. We believe that our existing cash balances and cash flow from operations will be sufficient to meet our short- and long-term projected working capital needs, capital expenditures, ~~working capital~~ and other cash requirements.

It is management’s goal to invest the on-hand cash in accordance with the investment policy, which has been approved by the Company’s Board of Directors. The investment policy’s primary purpose is to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. Garmin’s average interest rate returns on cash and investments during the first three quarters of ~~2019~~2020 and ~~2018~~2019 were approximately ~~2.0%~~1.5% and ~~1.8%~~2.0%, respectively. The fair value of our securities varies from period to period due to changes in interest rates, in the performance of the underlying collateral, and in the credit performance of the underlying issuer, among other factors. See Note 8 for additional information regarding marketable securities.

Operating Activities

39-Weeks Ended
September 28, September 29,
(In thousands) 2019 2018
Net cash provided by operating activities $ 464,170 $ 701,782

	39-Weeks Ended		39-Weeks Ended
	September 26, 2020		September 28, 2019
Net cash provided by operating activities	$	699,449	$	464,170

The ~~$237.6~~$235.3 million ~~decrease~~increase in cash provided by operating activities during the first three quarters of ~~2019~~2020 compared to the first three quarters of ~~2018~~2019 was ~~primarily~~ due to ~~the increase~~a decrease in cash used in working capital of ~~$310.6~~$212.6 million (which included ~~a decrease~~an increase of ~~$98.0~~$44.2 million in net receipts of accounts receivable, a ~~net increase~~decrease of ~~$126.7~~$122.1 million in cash paid for inventory, ~~associated primarily with the Company’s effort to~~an increase ~~days~~ of ~~supply to support our increasingly diversified product lines,~~$39.5 million net cash used in accounts payable, and a ~~net increase~~decrease of ~~$85.9~~$85.8 million innet cash used in other activities primarily driven by prior year payments associated with an amendment to a license agreement) ~~and income taxes payable of $34.5 million. These decreases were partially~~ offset by an increase of $46.0 million net cash used for income taxes. Additional changes were due to the ~~year over year~~year-over-year increase in net income of $67.1 million and a decrease in other non-cash adjustments to net income of ~~$107.5~~$1.6 million.

28Investing Activities

	39-Weeks Ended			39-Weeks Ended
	September 26, 2020			September 28, 2019
Net cash used in investing activities	$	(179,331	)	$	(367,808	)

~~Investing Activities~~

39-Weeks Ended
September 28, September 29,
(In thousands) 2019 2018
Net cash used in investing activities $ (367,808 ) $ (238,815 )

The ~~$129.0~~$188.5 million ~~increase~~decrease in cash used in investing activities during the first three quarters of ~~2019~~2020 compared to the first three quarters of ~~2018~~2019 was primarily due to ~~increased~~an increase in net redemptions of marketable securities of $105.6 million, a decrease in cash payments for acquisitions of ~~$246.1~~$126.7 million, and partially offset by ~~decreased net purchases of marketable securities of $85.6 million and cash payments for~~increased net purchases of property and equipment of ~~$30.4~~$44.0 million.

Financing Activities

39-Weeks Ended
September 28, September 29,
(In thousands) 2019 2018
Net cash used in financing activities $ (308,895 ) $ (288,534 )

	39-Weeks Ended			39-Weeks Ended
	September 26, 2020			September 28, 2019
Net cash used in financing activities	$	(331,847	)	$	(308,895	)

The ~~$20.4~~$23.0 million increase in cash used in financing activities during the first three quarters of ~~2019~~2020 compared to the first three quarters of ~~2018~~2019 was primarily due to an increase in dividend payments of ~~$12.8 million and $7.6 million increase in treasury stock net purchases related to equity awards.~~$25.1 million.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

General

Garmin’s discussion and analysis of its financial condition and results of operations are based upon Garmin’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 Garmin to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, Garmin evaluates its estimates, including those related to bad debts, inventories, investments, intangible assets, income taxes, warranty obligations, contingencies, customer sales programs and incentives, product returns, relative standalone selling prices, and progress toward completion of performance obligations in certain contracts with customers. Garmin bases its estimates on historical experience and 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. Actual results may differ from these estimates under different assumptions or conditions.

For a description of the significant accounting policies and methods used in the preparation of the Company’s Condensed Consolidated Financial Statements, refer to Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in Part II, Item 8 and “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019. There were no ~~material~~ significant

changes to the Company’s critical accounting policies and estimates in the 13-week and 39-week periods ended September ~~28, 2019, other than those discussed in Note 1, “Accounting Policies”.~~26, 2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There are numerous market risks that can affect our future business, financial condition and results of operations. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part II, “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019. There have been no material changes during the 13-week and 39-week periods ended September ~~28, 2019~~26, 2020 in the risks described in our Annual Report on Form 10-K related to market sensitivity, inflation, foreign currency exchange rate risk and interest rate risk.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of September ~~28, 2019,~~26, 2020, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of September ~~28, 2019~~26, 2020 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended September ~~28, 2019~~26, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

In the normal course of business, the Company and its subsidiaries are parties to various legal claims, actions, and complaints, including matters involving patent infringement, other intellectual property, product liability, customer claims and various other risks. It is not possible to predict with certainty whether or not the Company and its subsidiaries will ultimately be successful in any of these legal matters, or if not, what the impact might be. However, the Company’s management does not expect that the results in any of these legal proceedings will have a material adverse effect on the Company’s results of operations, financial position or cash flows. For additional information, see Note 6 – Commitments and Contingencies in the above Condensed Consolidated Financial Statements and Part I, “Item 3. Legal Proceedings” in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018.~~28, 2019.

Item 1A. Risk Factors

There are many risks and uncertainties that can affect our future business, financial performance or share price. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December ~~29, 2018. There have been no material changes during the 13-week and 39-week periods ended September~~ 28, 2019, inas supplemented by the ~~risks described in our Annual Report on Form 10-K.~~ risk factors set forth below.These risks, however, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The following is an amended and restated version of a risk factor included in “Item 1A. Risk Factors” of our Quarterly Reports on Form 10-Q for the periods ended March 28, 2020 and June 27, 2020, and supplemental to the risk factors included in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 28, 2019:

The novel coronavirus (COVID-19) pandemic has had and will continue to have significant impacts on our business.

The COVID-19 pandemic continues to rapidly evolve, creating disruption and uncertainty around the world, which thus far in fiscal 2020 has resulted in, and we expect will continue to result in, reduced overall demand for certain of our products and other operational impacts. There are unknown factors, such as the duration and severity of the pandemic, the nature and length of actions taken by governments, businesses and individuals to contain or mitigate its impact, the severity and duration of the economic impact caused by the pandemic, the uncertainty surrounding possible treatments or vaccines, along with the effectiveness of our response, that may affect the magnitude of effects to our business operations, results of operations, and its ultimate impact on our financial condition.

Demand for certain of our products has been, and is expected to continue to be, adversely affected in several ways. Consumers have been and may continue to be less able or less likely to purchase certain of our products due to economic hardships, governmental restrictions affecting them and the retail outlets that sell our products, voluntary behavior changes associated with public health guidance, the prioritization of other goods and services by online retailers that sell our products, restrictions on the ability of online retailers to ship products to certain areas, the cancellation of trade shows and other events that are otherwise important in the marketing and sale of our products, and the potential failure and closure of retail outlets and online retailers that sell our products. Certain of our sales and distribution offices have experienced and may again experience temporary closure due to governmental restrictions. Additional or prolonged closures of certain sales and distribution offices could affect our ability to market and distribute products to meet customer demand. The adverse impacts of the pandemic have created economic stress in the global marketplace, high levels of unemployment, loss of income and/or wealth for some individuals, and general economic uncertainty. These conditions have affected and are expected to continue to affect the willingness or ability of customers to purchase certain of our products or those of original equipment manufacturers in which our products are installed.

Our supply chain may also be adversely impacted by COVID-19. We may be unable to procure, or experience delays in procuring, certain components from our suppliers, and the cost of procuring components could increase. Reduced demand for our products has resulted in, and may continue to result in, reduced utilization of certain of our manufacturing facilities and higher per-unit costs for certain products. Certain of our manufacturing facilities may also experience inopportune temporary closures or reduced hours, which could adversely affect the costs incurred to produce our products and our ability to meet demand.

COVID-19 has had and will continue to have several other operational impacts on our business, which will or may include employees working remotely, temporarily ceasing operations in some offices due to government restrictions, business travel restrictions, and the cancellation of events that are otherwise important in the development of our products. These changes in our business operations may result in reduced efficiency and lower productivity. We have incurred and are expected to continue to incur increased costs as we provide additional benefits to assist our employees during the COVID-19 pandemic and provide a safe and healthy workplace for employees who continue to work in our facilities. Similar operational and financial hardships on our business partners may result in aged or uncollectable receivables, and the reduced demand for certain of our products could result in obsolescence of certain inventory. If the economy experiences a sustained downturn of significant proportion that impacts portions of our business, we may also need to incur the costs and organizational impacts of personnel restructuring.

The risks and impacts associated with COVID-19 described above are not the only ones that affect our Company. Other risks presented in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 28, 2019, such as gross margin fluctuation, foreign currency fluctuations, successful continued product development, impacts to our key personnel, and dependencies on third party suppliers, may be heightened as a result of the COVID-19 pandemic. Additionally, there are unknown risks and impacts due to the uncertainty and rapidly evolving nature of the pandemic including, but not limited to uncertainty around the evolution of the pandemic, the unprecedented imposition of preventative measures by governments that impact the economy and normal operations of a business and the timing and manner of relaxation of those measures. If we are unable to manage these risks and uncertainties, our business, financial condition, and results of operations could be materially impacted.

The following is an amended and restated version of a risk factor included in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 28, 2019 and our Quarterly Report on Form 10-Q for the period ended June 27, 2020:

We rely on information technology systems for our business operations. Failures or disruptions, including security breaches or cyber attacks, to our information technology systems may harm our reputation and adversely affect our business and result of operations.

Our information technology systems allow for our daily business operations to operate efficiently and effectively. These systems assist in our business processes, including, but not limited to, communications, financial management, supply chain management, manufacturing, order processing, shipping and billing, and providing services and support to our customers. Additionally, we electronically maintain sensitive data, including intellectual property, our proprietary business information and that of our customers and suppliers, and some personally identifiable information of our customers and employees, in our facilities and on our networks. The secure processing, maintenance and transmission of this information is important to our operations. A disruption to any of these processes can adversely affect our business and results of operations. Furthermore, a breach of our security systems and procedures or those of our vendors could result in significant data losses or theft of our intellectual property as well as our customers' or our employees' intellectual property, proprietary business information or personally identifiable information. A cybersecurity breach could negatively affect our competitive position and operating results as a result of theft of our intellectual property and could negatively affect our reputation as a trusted product and service provider by adversely affecting the market's perception of the security or reliability of our products or services.

We have technology and processes in place to detect and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. In addition, hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties have also attempted, and may in the future attempt, to gain access to our systems or facilities through fraud, trickery or other forms of deceiving our customers and employees. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, or if such measures are implemented, and even with appropriate training conducted in support of such measures, human errors may still occur. It is virtually impossible for us to entirely mitigate this risk. A party, whether internal or external, who is able to circumvent our security measures could misappropriate information.

Actual or anticipated attacks and risks have caused and are expected to continue to cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, to conduct additional employee training, and to engage third party security experts and consultants. Our cyber insurance may not protect against all of the costs, liabilities, and other adverse effects arising from a security breach or system failure. If we fail to reasonably maintain the

security of confidential information, we may suffer significant reputational and financial losses and our results of operations, cash flows, financial condition, and liquidity may be adversely affected. In addition, a system breach could result in other negative consequences, including disruption of internal operationsand loss of functionality of critical systems and online services, and may subject us to private litigation, government investigations, enforcement actions, and cause us to incur potentially significant liability, damages, or remediation costs.

The Company was the victim of a cyber attack that encrypted some of our systems on July 23, 2020. As a result, many of our online services were interrupted including website functions, customer support, customer facing applications, and company communications. We immediately began to assess the nature of the attack and started remediation. Based on our due diligence and independent forensic analysis, we have no indication that any customer data was accessed, lost or stolen. Additionally, the functionality of Garmin products was not affected, other than the ability to access online services. The impact of this outage to our operations and financial results was not material during the third quarter of 2020, and we do not expect it to have material impacts on future periods. However, we may still suffer negative consequences, including certain of those described in the paragraphs above, beyond our current expectations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

Exhibit 3.1		Articles of Association of Garmin Ltd., as amended and restated on June 5, 2020 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on June 5, 2020).

Exhibit 31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

Exhibit 31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

Exhibit 32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101.INS		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 101.SCH		Inline XBRL Taxonomy Extension Schema

Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

Exhibit 101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GARMIN LTD.

	By	/s/ Douglas G. Boessen
		Douglas G. Boessen
		Chief Financial Officer
		(Principal Financial Officer and
		Principal Accounting Officer)

Dated: October ~~30, 2019~~28, 2020

INDEX TO EXHIBITS

~~INDEX TO EXHIBITS~~

Exhibit No.		Description

Exhibit 3.1		Articles of Association of Garmin Ltd., as amended and restated on June 5, 2020 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on June 5, 2020).

Exhibit 31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

Exhibit 31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a).

Exhibit 32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101.INS		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 101.SCH		Inline XBRL Taxonomy Extension Schema

Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

Exhibit 101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

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

3433

Switzerland		98-0229227
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		identification no.)

Mühlentalstrasse 2
8200 Schaffhausen
Switzerland		N/A
(Address of principal executive offices)		(Zip Code)

Registered Shares, CHF 0.10 Per Share Par Value		GRMN		The Nasdaq Stock Market, LLC
(Title of each class)		(Trading Symbol)		(Name of each exchange on which registered)

Large Accelerated Filer	þ ☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	September 28,			December 29,
	2019			2018			September 26, 2020			December 28, 2019
Assets
Current assets:
Cash and cash equivalents	$	976,402		$	1,201,732		$	1,223,516		$	1,027,567
Marketable securities		300,542			182,989			430,164			376,463
Accounts receivable, net		558,299			569,833			658,000			706,763
Inventories		749,825			561,840			821,377			752,908
Deferred costs		26,450			28,462			21,067			25,105
Prepaid expenses and other current assets		146,325			120,512			187,746			169,044
Total current assets		2,757,843			2,665,368			3,341,870			3,057,850

Property and equipment, net		710,591			663,527			813,561			728,921
Operating lease right-of-use assets		55,399			-			74,949			63,589

Restricted cash		1,036			73			293			71
Marketable securities		1,252,219			1,330,123			1,058,103			1,205,475
Deferred income taxes		158,963			176,959			247,502			268,518
Noncurrent deferred costs		25,156			29,473			17,676			23,493
Intangible assets, net		637,716			417,080			818,781			659,629
Other assets		156,182			100,255			177,934			159,253
Total assets	$	5,755,105		$	5,382,858		$	6,550,669		$	6,166,799

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	235,548		$	204,985		$	235,467		$	240,831
Salaries and benefits payable		109,323			113,087			137,859			128,426
Accrued warranty costs		37,998			38,276			40,002			39,758
Accrued sales program costs		58,459			90,388			76,255			112,578
Deferred revenue		95,572			96,372			88,042			94,562
Accrued royalty costs		11,673			24,646			15,389			15,401
Accrued advertising expense		21,246			31,657			25,905			35,142
Other accrued expenses		87,333			69,777			105,731			95,060
Income taxes payable		60,728			51,642			48,342			56,913
Dividend payable		325,075			200,483			349,964			217,262
Total current liabilities		1,042,955			921,313			1,122,956			1,035,933

Deferred income taxes		113,225			92,944			124,746			114,754
Noncurrent income taxes		105,309			127,211			75,186			105,771
Noncurrent deferred revenue		69,600			76,566			52,715			67,329
Noncurrent operating lease liabilities		42,855			-			58,416			49,238
Other liabilities		267			1,850			12,309			278

Stockholders’ equity:
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 190,103 shares outstanding at September 28, 2019; and 189,461 shares outstanding at December 29, 2018;		17,979			17,979
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 191,237 shares outstanding at September 26, 2020 and 190,686 shares outstanding at December 28, 2019								17,979			17,979
Additional paid-in capital		1,841,696			1,823,638			1,872,519			1,835,622
Treasury stock		(368,187	)		(397,692	)		(326,294	)		(345,040	)
Retained earnings		2,868,816			2,710,619			3,421,159			3,229,061
Accumulated other comprehensive income		20,590			8,430			118,978			55,874
Total stockholders’ equity		4,380,894			4,162,974			5,104,341			4,793,496
Total liabilities and stockholders’ equity	$	5,755,105		$	5,382,858		$	6,550,669		$	6,166,799

		Page

Part I - Financial Information		1

Item 1.	Condensed Consolidated Financial Statements	1

	Condensed Consolidated Balance Sheets at September 26, 2020 and December 28, 2019 ~~and December 29, 2018~~ (Unaudited)	1

	Condensed Consolidated Statements of Income for the 13-Weeks and 39-Weeks ended September 26, 2020 and September 28, 2019 ~~and September 29, 2018~~ (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income for the 13-Weeks and 39-Weeks ended September 26, 2020 and September 28, 2019 ~~and September 29, 2018~~ (Unaudited)	3

	Condensed Consolidated Statements of Stockholders’ Equity for the 13-Weeks and 39-Weeks ended September 26, 2020 and September 28, 2019 ~~and September 29, 2018~~ (Unaudited)	4 ~~- 5~~

	Condensed Consolidated Statements of Cash Flows for the 39-Weeks ended September 26, 2020 and September 28, 2019 ~~and September 29, 2018~~ (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20 17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30 27

Item 4.	Controls and Procedures	30 27

Part II - Other Information		28

Item 1.	Legal Proceedings	31 28

Item 1A.	Risk Factors	31 28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31 30

Item 3.	Defaults Upon Senior Securities	31 30

Item 4.	Mine Safety Disclosures	31 30

Item 5.	Other Information	31 30

Item 6.	Exhibits	32 31

Signature Page		33 32

Index to Exhibits		34 33

Schedule of inventories
	September 28,		December 29,
	2019		2018

Raw materials	$	267,718	$	205,696
Work-in-process		133,290		96,564
Finished goods		348,817		259,580
Inventories	$	749,825	$	561,840

Schedule of available-for-sale securities
	Fair Value Measurements as of September 28, 2019
	Total		Level 1		Level 2		Level 3
U.S. Treasury securities	$	16,557	$	-	$	16,557	$	-
Agency securities		67,926		-		67,926		-
Mortgage-backed securities		129,564		-		129,564		-
Corporate securities		1,066,438		-		1,066,438		-
Municipal securities		158,530		-		158,530		-
Other		113,746		-		113,746		-
Total	$	1,552,761	$	-	$	1,552,761	$	-

	39-Weeks Ended September 28, 2019
	Foreign Currency Translation Adjustment			Net unrealized gains (losses) on available-for-sale securities			Total
Beginning Balance	$	47,327		$	(38,897	)	$	8,430
Other comprehensive income before reclassification, net of income tax expense of $5,968		(27,805	)		40,180			12,375
Amounts reclassified from accumulated other comprehensive income		-			(215	)		(215	)
Net current-period other comprehensive income		(27,805	)		39,965			12,160
Ending Balance	$	19,522		$	1,068		$	20,590

Schedule of of reporting reclassifications out of AOCI
13-Weeks Ended September 28, 2019
Details About Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income is Presented
Unrealized gains (losses) on available-for-sale securities	$	153		Other income (expense)
		(14	)	Income tax benefit (provision)
	$	139		Net of tax

Schedule of deferred revenue and costs		Deferred Revenue⁽¹⁾			Deferred Costs⁽²⁾
	39-Weeks Ended
	September 28,
	2019
	Deferred Revenue⁽¹⁾			Deferred Costs⁽²⁾
Balance, beginning of period	$	172,938		$	57,935
Deferrals in period		125,278			20,284
Recognition of deferrals in period		(133,044	)		(26,613	)
Balance, end of period	$	165,172		$	51,606

Schedule of operating lease cost
	13-Weeks Ended		39-Weeks Ended
	September 28,		September 28,
	2019		2019
Operating lease cost⁽¹⁾	$	6,023	$	17,683

Schedule of maturity of lease liabilities
Fiscal Year	Lease payments
2019, excluding the 39-weeks ended September 28, 2019	$	4,347
2020		15,447
2021		12,259
2022		8,736
2023		7,955
Thereafter		15,389
Total	$	64,133
Less: imputed interest		(7,840	)
Present value of lease liabilities	$	56,293

Schedule of cash flow supplemental
	39-Weeks Ended
	September 28,
	2019
Cash paid for amounts included in the measurement of operating lease liabilities⁽²⁾	$	13,528
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,853

	39-Weeks Ended September 28, 2019					39-Weeks Ended September 29, 2018					Year over Year
	Net Sales		% of Total			Net Sales		% of Total			$ Change			% Change
Outdoor	$	622,748		24	%	$	555,314		23	%	$	67,434			12	%
Fitness		675,007		25	%		581,315		24	%		93,692			16	%
Marine		393,070		15	%		346,908		14	%		46,162			13	%
Auto		422,132		16	%		486,653		20	%		(64,521	)		(13	)%
Aviation		542,316		20	%		445,146		19	%		97,170			22	%
Total	$	2,655,273		100	%	$	2,415,336		100	%	$	239,937			10	%