United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K
       [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 27, 2003
                                       or
      [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from_____ to ________
                         Commission file number 0-31983

                                ----------------
                                   GARMIN LTD.
               (Exact name of Company as specified in its charter)

               Cayman Islands                                  98-0229227
   (State or other jurisdiction            (I.R.S. Employer identification no.)
    of incorporation or organization)
   5th Floor, Harbour Place, P.O. Box 30464 SMB,                  N/A
              103 South Church Street                           (Zip Code)
   George Town, Grand Cayman, Cayman Islands
     (Address of principal executive offices)

         Company's telephone number, including area code: (345) 946-5203

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                    Common Shares, $0.01 Per Share Par Value
                                (Title of Class)

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. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Company's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

     Aggregate  market value of the voting and non-voting  common shares held by
non-affiliates  of the Company as of June 27, 2003, the last business day of the
Company's most recently  completed  second fiscal quarter,  based on the closing
price of the Company's common shares on the Nasdaq Stock Market for that date

                   Common Shares, $.01 par value - $2,532,348,456
Number of shares outstanding of the Company's common shares as of March 1, 2004:
                   Common Shares, $.01 par value - 108,201,576

Documents incorporated by reference:
Portions of the following document are incorporated herein by reference into
Part III of the Form 10-K as indicated:

                                                        Part of Form 10-K into
Document                                                  which Incorporated
- --------                                                ----------------------
Company's Definitive Proxy Statement for the 2004            Part III
Annual Meeting of Shareholders which will be
filed no later than 120 days after December 27, 2003







                                   Garmin Ltd.

                          2003 Form 10-K Annual Report

                                Table of Contents

          Cautionary Statement With Respect To Forward-Looking Comments........1

                                     Part I

Item 1.   Business.............................................................1
Item 2.   Properties..........................................................11
Item 3.   Legal Proceedings...................................................12
Item 4.   Submission of Matters to a Vote of Security Holders........... .....12
          Executive Officers and Significant Employees of the Company.........12

                                     Part II

Item 5.   Market for the Company's Common Shares and Related
               Shareholder Matters............................................14
Item 6.   Selected Financial Data.............................................14
Item 7.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................16
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk..........37

Item 8.   Financial Statements and Supplementary Data.........................39
Item 9.   Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure.......................................64
Item 9A.  Controls and Procedures.............................................64

                                    Part III

Item 10.  Directors and Executive Officers of the Company; Audit Committee
             Financial Expert; Code of Ethics.................................64
Item 11.  Executive Compensation..............................................65
Item 12.  Security Ownership of Certain Beneficial Owners and Management
             and Rekated Shareholder Matters..................................65
Item 13.  Certain Relationships and Related Transactions......................66
Item 14.  Principal Accountant Fees and Services..............................66

                                     Part IV

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K....66
          Signatures..........................................................70


GARMIN,  the GARMIN logo, the GARMIN globe design,  the GARMIN "swoosh" design,
APOLLO,  BLUECHART,  CITY SELECT,  DCG, ETREX,  ETREX CAMO, ETREX LEGEND,  ETREX
SUMMIT,  ETREX  VENTURE,  ETREX  VISTA,  GNC,  GPS II, GPS III,  GPS V,  GPSMAP,
GUIDANCE BY GARMIN, IQUE, MAPSOURCE,  METROGUIDE,  NAVTALK,  PERSONAL NAVIGATOR,
RINO,  SEE-THRU,  STREETPILOT,  and TRACBACK are included  among the  registered
trademarks of Garmin, and FORERUNNER,  FORETREX, G1000, GEKO, ION, QUE, and WAAS
ENABLED are included  among the  trademarks of Garmin Ltd. or its  subsidiaries.
All other  trademarks  and  trade  names  referred  to in this Form 10-K are the
property of their respective owners.





             CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING COMMENTS

     The  discussions  set forth in this  Annual  Report  on Form  10-K  contain
statements  concerning potential future events. Such forward-looking  statements
are based upon assumptions by the Company's  management,  as of the date of this
Annual Report,  including assumptions about risks and uncertainties faced by the
Company. In addition,  management may make forward-looking  statements orally or
in other  writings,  including,  but not limited to, in press  releases,  in the
annual  report to  shareholders  and in the  Company's  other  filings  with the
Securities and Exchange Commission.  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.  Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of their
date. If any of management's assumptions prove incorrect or should unanticipated
circumstances  arise, the Company's 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 Item 7,  "Management's  Discussion  and
Analysis of Financial  Condition and Results of  Operations",  of this Form 10-K
under the  heading  "Company-Specific  Trends and Risks".  Readers are  strongly
encouraged  to  consider  those  factors  when  evaluating  any  forward-looking
statements  concerning the Company. The Company does not undertake to update any
forward-looking  statements  in this Annual  Report to reflect  future events or
developments.

                                     Part I

Item 1.  Business

     This discussion of the business of Garmin Ltd.  ("Garmin" or the "Company")
should  be  read  in  conjunction  with,  and  is  qualified  by  reference  to,
"Management's  Discussion and Analysis of the Company's  Financial Condition and
Results of  Operations"  ("MD&A")  under Item 7 herein and the  information  set
forth in response to Item 101 of Regulation  S-K in such Item 7 is  incorporated
herein by reference in partial  response to this Item 1. Garmin has two business
segments - Consumer and Aviation.  Pursuant to Rule 12b-23 under the  Securities
Exchange  Act of 1934,  as  amended,  the  segment  and  geographic  information
included in Item 8, "Financial  Statements and  Supplementary  Data", Note 10 is
incorporated herein by reference in partial response to this Item 1.

     Garmin was incorporated in the Cayman Islands on July 24, 2000 as a holding
company for Garmin Corporation,  a Taiwan corporation,  in order to facilitate a
public offering of Garmin shares in the United States.  Garmin owns, directly or
indirectly, all of the operating companies in the Garmin group.

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

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


Recent Developments in the Company's Business

         Acquisition of UPS Aviation Technologies, Inc.

     On  August  22,  2003,  Garmin's  subsidiary,  Garmin  International,  Inc.
completed  the  acquisition  of  all  the  outstanding  stock  of  UPS  Aviation
Technologies,  Inc., a  subsidiary  of United  Parcel  Services,  Inc.,  for $38
million in cash.  The name of the  acquired  company  has since been  changed to
Garmin AT, Inc.

     Garmin AT, Inc.  is located in Salem,  Oregon and had 145  employees  as of
December 31, 2003. The acquisition is expected to provide Garmin with additional
resources for developing and manufacturing products for the aviation market. The
acquisition also provided Garmin with a range of additional  aviation  products,
including the CNX80 Global Positioning System ("GPS") navigation receiver, which
is the  first  fully-integrated  panel-mounted  GPS  receiver  certified  by the
Federal Aviation  Administration  ("FAA") for primary means navigation using the
FAA's Wide Area Augmentation System ("WAAS").

                                       1


         New Consumer Product Introductions

     Garmin began  shipping the iQue(R) 3600 in July 2003.  The iQue 3600 is the
Company's first personal  digital  assistant  (PDA) product.  The iQue 3600 is a
Palm(R)  operating  system  based  PDA  with   fully-integrated  GPS  navigation
technology,  including color maps,  automatic route calculation and turn-by-turn
navigation with voice prompts.

     In August  2003,  Garmin  began  shipping  the  StreetPilot(R)  2610 and in
September  2003 Garmin began shipping the  StreetPilot  2650, two new models for
portable  automotive  applications.  Both models feature a high resolution color
display with  touchscreen,  fast map drawing and route  calculation and a remote
control.

     In  November  2003,  Garmin  began  shipping  the  Forerunner(tm)  201,  an
integrated personal training product for running and other athletic applications
which uses a GPS sensor to provide data on speed,  training time, distance,  lap
time and other information.

         New Aviation Product Introductions

     In 2003,  Garmin announced that Cessna Aircraft  Company selected  Garmin's
G-1000(tm)  integrated  avionics  system as standard  equipment for Cessna's new
Citation  Mustang  business  jet and as optional  equipment  for certain  Cessna
single-engine  piston  aircraft.  Cessna  expects the Citation  Mustang to be in
production  in 2006.  Also in  2003,  Garmin  announced  that  Diamond  Aircraft
selected  the  G-1000  system  as  standard  equipment  for  its  DA42  TwinStar
twin-engine  piston aircraft and as optional equipment for its DA40 Diamond Star
single-engine piston aircraft.  The G-1000 system is expected to be available in
the second quarter of 2004.

         NASDAQ-100 Index

     In  December  2003,  Garmin  was  added  to the  NASDAQ-100  Index(R).  The
NASDAQ-100  Index is  composed of the 100  largest  non-financial  stocks on the
NASDAQ Stock Market based on market capitalization.

         Debt Retirement

     On June 2, 2003, Garmin's subsidiary, Garmin International,  Inc. purchased
all $20 million of its outstanding industrial revenue bonds issued in 2000 (City
of Olathe, Kansas Taxable Industrial Revenue Bonds, Garmin  International,  Inc.
Project,  Series 2000).  This action retired all of the long-term debt of Garmin
Ltd. and its subsidiaries.


Company Overview

     Garmin is a leading,  worldwide provider of navigation,  communications and
information  devices,  most of  which  are  enabled  by GPS  technology.  Garmin
designs,  develops,  manufactures  and markets  under the GARMIN brand a diverse
family of  hand-held,  portable and fixed mount  GPS-enabled  products and other
navigation, communications and information products for the general aviation and
consumer  markets.  Each of  Garmin's  GPS  products  utilizes  its  proprietary
integrated  circuit  and  receiver  designs to  collect,  calculate  and display
location, direction, speed and other information in forms optimized for specific
uses.



Overview of the Global Positioning System

     The  Global  Positioning  System is a  worldwide  navigation  system  which
enables the precise  determination  of  geographic  location  using  established
satellite  technology.  The  system  consists  of a  constellation  of  orbiting
satellites.  The satellites and their ground control and monitoring stations are
maintained  and  operated by the United  States  Department  of  Defense,  which
maintains an ongoing satellite replenishment program to ensure continuous global
system  coverage.  Access to the system is  provided  free of charge by the U.S.
government.

                                       2


     Reception  of  GPS  signals  from  the  satellites  requires  line-of-sight
visibility between the satellites and the receiver.  GPS receivers  generally do
not work  indoors  and when a receiver is  outside,  buildings,  hills and dense
foliage can attenuate or block reception. GPS receivers can be very compact, and
it is not necessary to have a large dish antenna to receive GPS signals.

     Prior to May 2000, the U.S.  Department of Defense  intentionally  degraded
the  accuracy  of  civilian  GPS  signals  in  a  process   known  as  Selective
Availability  ("SA") for national  security  purposes.  SA variably degraded GPS
position accuracy to a radius of 100 meters. On May 2, 2000, the U.S. Department
of Defense  discontinued  SA. With SA removed,  a GPS receiver can calculate its
position  to an  accuracy  of  approximately  10 meters or less,  enhancing  the
utility of GPS for most applications.

     The  accuracy  and  utility of GPS can be  enhanced  even  further  through
augmentation  techniques  which compute any  remaining  errors in the signal and
broadcast these corrections to a GPS device. The Federal Aviation Administration
("FAA") is developing a Wide Area Augmentation System ("WAAS") comprising ground
reference stations and additional  satellites which will improve the accuracy of
GPS positioning available in the United States and portions of Canada and Mexico
to  approximately  3 meters.  WAAS is  intended to support the use of GPS as the
primary means of enroute,  terminal and approach  navigation for aviation in the
United  States.  The  increased  accuracy  offered by WAAS is  expected  also to
enhance the utility of WAAS-enabled GPS receivers for consumer applications. The
FAA  announced  on July 11,  2003  that the WAAS  system  had  achieved  initial
operating capability and that the system was available for instrument flight use
with appropriately certified avionics equipment.

Products

     Garmin has  achieved a leading  market  position  and a record of growth in
revenues and profits by offering ergonomically  designed, user friendly products
with innovative  features and designs covering a broad range of applications and
price points.

     Garmin's target markets currently  consist of the consumer  segment,  which
primarily  includes  marine,  recreational  and  automotive  products,  and  the
aviation segment, which consists of panel mount and portable products for use in
general aviation aircraft.

     While the marine, recreational,  automotive and aviation product lines will
continue to be the core of Garmin's business in the near-term,  GPS capabilities
are  becoming  increasingly  commercially  viable  in a wide  range of  consumer
products  and  services,  including  wireless  consumer  and mobile  information
devices (such as Family Radio Service and General  Mobile Radio Service  two-way
radios and personal digital  assistants).  Garmin's goal is to take advantage of
its brand name and its product development experience to expand its product line
in these markets.


Consumer

     Garmin  currently  offers a wide  range  of  consumer  products,  including
handheld  GPS  receivers,   two-way   radios  with   integrated  GPS  receivers,
GPS-enabled portable digital assistants,  portable automotive navigation devices
and fixed-mount GPS/Sounder products. Garmin believes that its consumer products
are  known  for  their  value  leadership,  high  performance,   innovation  and
ergonomics.  Garmin's iQue 3600 portable  digital  assistant with integrated GPS
won the 2003 Consumer  Electronics  Association Best of Innovations award in the
mobile office category.

     Garmin  also  offers  a broad  set of  accessories  for its  products.  For
instance,  Garmin's  MapSource(R)  CDs,  which can be loaded into  selected  GPS
products through a personal computer,  provide detailed mapping  information for
the United States and Canada,  Australia,  South Africa and a number of European
and Asian  countries.  With this  information,  many of  Garmin's  products  can
provide the customer with detailed information  concerning business listings and

                                       3



points of interest.  A user can choose a business  listing  (e.g.,  restaurants,
hotels,  and shops) and the unit will display the location of the destination on
a map along with the user's location and the distance from the user's  location.
Some of Garmin's  products offer  automatic route  calculation and  turn-by-turn
route guidance.  Garmin's BlueChart(R) CD's and data cards, which are compatible
with selected GPS chartplotter and handheld products,  provide detailed nautical
chart data for boaters.

     The table  below  includes a sampling of some of the  products  that Garmin
currently offers to consumers.

Handheld and portable consumer products:

Geko
(3 models)                 Miniature size low-cost GPS receivers with colorful
                           design and easy operation.

Forerunner 201             Affordable, compact lightweight training assistant
                           for athletes with an easy-to-read display, ergonomic
                           wristband, and integrated GPS sensor that provides
                           precise speed, distance, and pace data.

eTrex
(6 models)                 Ultra compact full feature handheld GPS design for
                           outdoor  enthusiasts.  All models are waterproof and
                           have rugged  designs.  The eTrex Summit and eTrex
                           Vista have  electronic compass and barometric
                           altimeter  functions.  eTrex Venture has a worldwide
                           database of cities.  eTrex Legend and eTrex Vista
                           have  internal  basemaps of either North and South
                           America or Europe.  eTrex Camo features a camouflaged
                           design and a hunting and fishing almanac.  In fiscal
                           years 2003, 2002 and 2001, the eTrex class of
                           products  represented approximately 19%, 20% and 20%,
                           respectively,   of  Garmin's  total  consolidated
                           revenues.

StreetPilot
(3 models)                 Portable automotive navigation systems  with basemap
                           and  MapSource  compatibility allowing street level
                           mapping,  points of interest and address  location
                           functionality.  Features  of the  StreetPilot  2610
                           and 2650  include  "turn  by turn"  automatic  route
                           guidance and voice  prompting,  high resolution color
                           display,  remote  control,  touch screen and
                           PC/USB  connection   capabilities.   The  StreetPilot
                           2650  additionally features "dead  reckoning"
                           capabilities  allowing for continued navigation even
                           in the event of lost GPS reception.

GPS60C
(commenced shipping
in January 2004)           Lightweight, rugged and waterproof handheld with 256-
                           color transreflective TFT color displays.  Contain
                           56MB of internal memory for uploading mapping data
                           from MapSource CD-ROMs and automatic route
                           calculation with turn-by-turn directions.

GPS 72                     Rugged handheld for land or marine navigation.
                           Features include 1 MB internal memory for loading
                           MapSource points of interest and high contrast
                           4-level gray scale display.

GPS 76
(3 models)                 Handheld GPS with large display and a waterproof case
                           which floats in water.  Preloaded with U.S. tidal
                           data.  GPSMAP 76 has internal basemap and MapSource
                           compatibility for street level mapping and detailed
                           marine charts.  GPSMAP 76S additionally features a
                           barometric altimeter and an electronic compass.

GPS V                      Portable GPS with "turn by turn" automatic route
                           guidance, MapSource compatibility for street level
                           mapping and selectable vertical or horizontal
                           displays.

iQue 3600                  Portable  Digital  Assistant (PDA) with  integrated
                           GPS and mapping.  Features  include Palm OS 5
                           platform  with  all  standard  Palm  applications,
                           voice  recorder,  flip-up integrated  GPS antenna,
                           3.8" diagonal  320x480 pixel color  display,
                           automatic  route calculation,  turn-by-turn  voice
                           route  guidance  and  patent-pending  contact-locator
                           feature  that  connects  the address  book and
                           calendar  to the GPS  mapping  features.  Includes
                           internal   basemap,   32MB  of  internal  memory,  SD
                           card  expansion  slot.  Compatible with MapSource and
                           BlueChart  products for street-level  mapping and
                           detailed marine charts.

                                       4



Marine fixed-mount units:

GPS126, 128 and 152        Low cost  fixed-mount  GPS  units for  boating  with
                           either a  built-in  antenna  or an external  antenna
                           for  exposed  installations.  GPS 152 has  internal
                           database of U.S. cities and navigation  aids and has
                           the  compatibility  of uploading  points of interest
                           data from a personal computer with MapSource
                           CD-ROMs.

GPSMAP
(10 models)                Marine  GPS/plotter  combinations  for  boating  and
                           fishing  enthusiasts  of  different levels.  Features
                           available  on  different  models  include a variety
                           of display  sizes (ranging in size from 3.8" to 10"),
                           high-contrast LCD graphics,  monochrome 16-color or
                           256-color displays  and the capability  of uploading
                           mapping and nautical  chart data from a personal
                           computer with MapSource and BlueChart CD-ROMs.

Sounder products:

FishFinders
(7 models)                 Fishfinders feature DCG(R)and See-Thru(R)technology,
                           which aid fishermen in defining the ocean/lake bottom
                           and spotting fish in hidden or obscured areas.
                           Features  available on different models include color
                           displays and dual frequency  transducers  for optimal
                           performance in deep water.

GPSMAP/Sounder
(4 models)                 "All-in-one"  product lines with GPS, chartplotter
                           and sonar  functionality.  These
                           units come with  different display sizes (ranging in
                           size from 4.2" to 7.25") and the capability of
                           uploading  mapping and nautical  chart data.  Certain
                           models feature dual frequency  transducers  for
                           optimal  sonar  performance  in  deep  water.  GPSMAP
                           188C features a color display.

Consumer communications products:

Rino
(3 models)                 Handheld  two-way  Family Radio  Service (FRS) and
                           General  Mobile Radio Service  (GMRS) radios  that
                           integrate  two-way  voice  communications  with GPS
                           navigation.  Features include patented "peer-to-peer
                           position reporting" so you can transmit your location
                           to  another  Rino  radio.   The  Rino  120  has  an
                           internal   basemap  and   MapSource compatibility for
                           street-level  mapping.  The Rino 130 (which commenced
                           shipping in the first  quarter  of 2004) has 24 MB of
                           internal  memory,  built-in  electronic  compass,
                           barometric sensor, and NOAA weather radio receiver.

NavTalk                    GSM A handheld unit that combines a 900 MHz/1800 MHz
                           GSM digital cellular telephone and a full-featured
                           GPS receiver with mapping display, "turn by turn"
                           automatic route guidance and voice prompting.
                           Features the ability to transmit location from one
                           unit to another unit and to location-based service
                           companies.

VHF 720 & 725              Waterproof,  portable  handheld marine two-way radios
                           with either 3-watt or 5-watt power output  provide
                           clear Very High  Frequency  (VHF)  communication
                           capabilities for all types of boaters.

                                       5


Aviation

     Garmin's panel mounted product line includes  GPS-enabled  navigation,  VHF
communications transmitters/receivers,  multi-function displays, traditional VHF
navigation  receivers,   instrument  landing  system  (ILS)  receivers,  digital
transponders  (which  transmit  either  an  aircraft's  altitude  or its  flight
identification  number in response to requests  transmitted by ground-based  air
traffic  control  radar  systems  or air  traffic  avoidance  devices  on  other
aircraft), marker beacon receivers and audio panels.

     Garmin's  aviation  products have won  prestigious  awards  throughout  the
industry for their  innovative  features  and ease of use.  Garmin was the first
company to offer a GPS receiver, the GPS 155/165, which met the Federal Aviation
Administration's requirements for certain kinds of instrument approaches and did
so a full year ahead of its  competitors.  The GPS 155/165  with its  instrument
approach  capability won Flying  Magazine's  outstanding  achievement  award for
1994. The GNS 430/530 offers multiple features and capabilities  integrated into
a single product.  This high level of integration  minimizes the use of precious
space in the cockpit,  enhances the quality and safety of flight through the use
of modern  designs and  components and reduces the cost of equipping an aircraft
with modern  electronics.  The GNS 430 was also recognized by Flying Magazine as
the  Editor's  Choice  Product of the Year for 1998.  In 1994 and again in 2000,
Garmin  earned  recognition  from  the  Aircraft  Electronics   Association  for
outstanding  contribution  to the general  aviation  electronics  industry.  The
GPSMAP  295 won  Aviation  Consumer  Magazine's  Gear of the Year award for best
aviation  portable product in 2000 and again in 2001. Garmin won first place for
avionics product support in Professional  Pilot magazine's survey of its readers
published  in its  January  2003  issue.  Also,  Garmin  was  ranked No. 1 among
avionics  manufacturers  for  operation,  presentation,  technical  advancement,
information,   construction   and   satisfaction  in  a  survey  of  readers  of
Professional Pilot magazine published in its January 2004 issue.

     Garmin's panel mounted  aviation  products are sold in the retrofit  market
where older aircraft are fitted with the latest  electronics from Garmin's broad
product  line.  Garmin  believes  this  market  continues  to have  good  growth
potential as aircraft owners elect to upgrade their existing  aircraft at a cost
that is lower than purchasing a new aircraft.

     Garmin  has also  expanded  its range of  aviation  electronics  (avionics)
offerings to leading General Aviation aircraft  manufacturers such as the Cessna
Aircraft Company, Cirrus Design Corporation,  Diamond Aircraft Industries,  EADS
Socata,  Eurocopter,  Mooney Aircraft  Corporation,  New Piper Aircraft Company,
Raytheon Aircraft Company,  Pilatus Business Aircraft,  and Robinson Helicopter.
Garmin  anticipates  further  growth  in its  sales  to the  original  equipment
manufacturers  market as its product  offerings expand to include flight control
systems and primary flight and multi-function display  instrumentation that uses
the latest display technologies.

     The table  below  includes  a  sampling  of some of the  aviation  products
currently offered by Garmin:

Handheld and portable aviation products:

GPS III Pilot              Aviation style portable GPS receiver, with built-in
                           maps and Jeppesen database.


GPSMAP 196                 Portable GPS receiver with 3.8" diagonal moving map
                           and Horizontal  Situation  Indicator (HSI) display
                           with  internal  basemap and automatic logbook
                           functions.  Also features automatic turn-by-turn
                           automotive routing and MapSource  compatibility for
                           street level mapping.

GPSMAP 295                 A  high-end  portable  GPS  receiver  designed
                           specifically  for the  serious  aviator.  Features
                           include a 16-color  display and built-in  aviation
                           database;  it can download MapSource CD-ROM
                           information through a personal computer for street
                           level map details.

Panel-mount aviation products:

GNC 300XL TSO              Instrument Flight Rules ("IFR") certified
                           product that combines a GPS receiver with VHF radio
                           and features moving map graphics.

                                       6


400 Series
(3 models)                 The  GNS  430  was  the  world's  first  "all-in-one"
                           IFR  certified  GPS  navigation receiver/traditional
                           VHF navigation  receiver/instrument  landing systems
                           receiver and VHF communication  transmitter/receiver.
                           Features  available in  different  400 series models
                           include 4-color map graphics, GPS, communication and
                           navigation capabilities.

500 Series
(2 models)                 These  units combine the features of the 400  series
                           along  with a larger 5" color display.

GI-102A & 106A             Course deviation indicators (CDIs). The
                           GI-106A features an instrument landing system
                           receiver to aid in landing.

GMA 340                    A   feature-rich   audio  panel  with   six-place
                           stereo   intercom  and   independent
                           pilot/co-pilot communications capabilities.

GTX 320A & 327             FAA-certified transponders which transmit altitude or
                           flight identification  to air traffic control radar
                           systems or other  aircraft's  air traffic  avoidance
                           devices and feature  solid-state  construction  for
                           longer  life.  The GTX  327  offers  a  digital
                           display with timing functions.

GTX 330 & 330D             FAA-certified  Mode S  transponders  with data  link
                           capability,  including local air traffic information
                           at FAA radar sites equipped with Traffic Information
                           Service (TIS).

Apollo CNX 80              Integrated avionics unit with GPS navigation receiver
                           certified for primary means Wide Area Augmentation
                           System (WAAS)/GPS navigation and VHF navigation
                           receiver/instrument landing systems receiver and VHF
                           communication transmitter/receiver.

Apollo MX 20               Multi-function display unit featuring high resolution
                           6-inch active-matrix color LCD display and
                           customizable map function.

Apollo SL 30 and SL 40     Compact  UHF  navigation  and  communications  units
                           that  combine  a  760-channel  VHF communications
                           radio with  200-channel  glideslope  and localizer
                           receivers.  The SL30 features  8 watts  carrier
                           transmit  power  and the  SL40  features  10  watts
                           carrier transmit power.

G1000
(expected to be
available in second
quarter of 2004)           Integrated avionics suite that presents navigation,
                           communication, attitude,  weather, terrain,  traffic,
                           surveillance and engine information on large  high-
                           resolution  color displays.

Sales and Marketing

     Garmin's  consumer  products  are  sold  through  a  worldwide  network  of
approximately  3,000  independent  dealers and distributors in approximately 100
countries  who meet our sales and  customer  service  qualifications.  No single
customer represented 10% or more of Garmin's  consolidated  revenues in the year
ended December 27, 2003.  Garmin intends to selectively  grow its dealer network
geographically   and  by  product   lines.   Marketing   support   is   provided
geographically from Garmin's offices in Olathe, Kansas (North, South and Central
America),  Romsey, U.K. (Europe, Middle East and Africa) and Shijr, Taiwan (Asia
and Australia).  Garmin's distribution strategy is intended to increase Garmin's
global  penetration  and presence while  maintaining  high quality  standards to
ensure end-user satisfaction.

     Garmin's U.S. consumer segment marketing is handled through its dealers who
are  serviced  by  a  staff  of  regional  sales  managers  and  in-house  sales
associates. Some of Garmin's largest consumer products dealers include:

                                       7


         o Bass Pro Shops--a freshwater sports specialist with a sophisticated
           catalog sales effort and "super store" locations;

         o Best Buy--one of the largest U.S. electronics retailers;

         o Boaters World--a leading off-shore marine retailer with multiple
           locations;

         o Cabela's--a major hunting and fishing catalog retailer for the
           outdoor marine market with super store and destination store
           locations;

         o Circuit City--a leading U.S. electronics retailer;

         o Target--a leading mass merchandise chain of retail stores;

         o Wal-Mart--one of the world's largest mass retailers; and

         o West Marine--the largest U.S. marine retailer specializing in
           offshore boating equipment.

     Garmin's  Europe,  Middle East and Africa  consumer  segment  marketing  is
handled through in-country  distributors who resell to dealers.  Working closely
with  Garmin's  in-house  sales  and  marketing  staff in  Romsey,  U.K.,  these
distributors   are   responsible   for  inventory   levels  and  staff  training
requirements  at each retail  location.  Garmin's  Taiwan-based  marketing  team
handles its Asia marketing effort.

     Instrument  Flight Rules  ("IFR")  products  are sold through  distributors
around the world.  Garmin's largest aviation  distributors  include  Sportsman's
Market,  Tropic Aero and JA Air Center.  These  distributors  have the training,
equipment and certified  staff required for at-airport  installation of Garmin's
most  sophisticated  IFR  avionics   equipment.   Visual  Flight  Rules  ("VFR")
equipment,  including handheld GPS receivers, are also sold through distributors
and through catalogs.

     In addition to the  traditional  distribution  channels  mentioned,  Garmin
enjoys significant market penetration with original equipment manufacturers.  In
the  consumer  market,   Garmin's  products  are  standard  equipment  on  boats
manufactured by Allison Boats,  Cigarette Racing Team,  Inc.,  Cobalt Boats, Pro
Sports Boats and Ranger Boats.  In the aviation  market,  Garmin's  avionics are
standard  equipment on aircraft built by Cessna Aircraft Company,  Cirrus Design
Corporation,  Diamond Aircraft Industries,  EADS SOCATA, Eurocopter, The Lancair
Company,  Pilatus  Business  Aircraft,  Mooney  Aircraft  Corporation,  Raytheon
Aircraft Company,  Robinson  Helicopter,  Tiger Aircraft,  LLC and The New Piper
Aircraft Company.  Other aircraft and boat manufacturers offer Garmin's products
as optional equipment.

Competition

     The market for  navigation,  communications  and  information  products  is
highly competitive.  Garmin believes the principal competitive factors impacting
the market for its products are design, functionality,  quality and reliability,
customer service, brand, price, time-to-market and availability. Garmin believes
that it generally competes favorably in these areas.

     Garmin  believes that its principal  competitors  for consumer  GPS-enabled
product lines are Thales Navigation, Inc. ("Thales"),  Lowrance Electronics Inc.
("Lowrance"),   Cobra   Electronics   Corporation   ("Cobra"),   Raymarine  Ltd.
("Raymarine"),  Furuno Electronic Company, the Standard Vertex Division of Yaesu
Co. Ltd. ("Standard"), the Northstar Technologies unit of Brunswick Corporation,
Navman NZ Ltd. ("Navman"), a subsidiary of Brunswick Corporation,  and Simrad AS
("Simrad"). For Garmin's fishfinder/depth sounder product lines, Garmin believes
that its principal competitors are Lowrance, Furuno, Raymarine,  Simrad, Navman,
and the  Humminbird  division of  Techsonic  Industries,  Inc..  ("Humminbird").
Garmin  believes  that its  principal  competitors  for marine  VHF  transceiver
product  lines are Standard,  Shakespeare  Corporation,  Humminbird,  Raymarine,
Uniden Corporation,  Simrad and Icom, Inc. For Garmin's general aviation product
lines, Garmin considers its principal  competitors to be Lowrance,  for portable
GPS units,  and Honeywell,  Inc.,  Avidyne  Corporation,  L-3 Avionics  Systems,
Meggitt PLC, Rockwell Collins,  Inc.,  Universal  Avionics Systems  Corporation,
Chelton Flight Systems and Free Flight Systems for  panel-mount  GPS and display
units.  For Garmin's  Family  Radio  Service and General  Mobile  Radio  Service
product line, Garmin believes that its principal competitors are Motorola,  Inc.
("Motorola"),  Cobra and Audiovox  Corporation.  For Garmin's  cellular  product
line, Garmin believes that its principal competitors are Nokia Oy, Telefon AB LM

                                       8


Ericsson,  Motorola,  Benefon  Oy,  Siemens  AG  ("Siemens"),  Sony  Corporation
("Sony") and  Samsung.  For Garmin's  GPS sensor  board  product  lines,  Garmin
believes its principal competitors are Furuno, Koden, Trimble Navigation,  Ltd.,
Thales,  Motorola,  Philips  N.V.  ("Philips")  and SiRF  Technology,  Inc.  For
Garmin's automotive product lines, Garmin considers its principal competitors to
be Thales,  Alpine  Electronics,  Inc.,  Cobra,  Denso KK, Visteon,  the On-Star
Division of General Motors Corporation,  Navman, Xanavi Informatics Corporation,
Robert Bosch GmbH, and Siemens.  For Garmin's personal digital assistant product
line,  Garmin  considers its principal  competitors to be PalmOne,  Inc.,  Sony,
Hewlett-Packard Company, Dell Computer Corporation and Toshiba Corporation.

Research and Development

     Garmin's product  innovations are driven by its strong emphasis on research
and  development  and the close  partnership  between  Garmin's  engineering and
manufacturing teams. Garmin's products are created by its engineering and design
staff,  which  numbered  approximately  515 people  worldwide as of December 31,
2003. Garmin's  manufacturing staff includes manufacturing process engineers who
work closely with  Garmin's  design  engineers to ensure  manufacturability  and
manufacturing  cost control for its  products.  Garmin's  design staff  includes
industrial  designers,  as well as software engineers,  electrical engineers and
mechanical engineers.  Garmin believes the industrial design of its products has
played an important  role in Garmin's  success.  Once a  development  project is
initiated  and  approved,  a  multi-disciplinary  team is  created to design the
product and transition it into manufacturing.

     Below is a table of Garmin's  expenditures on research and development over
the last three fiscal years.





                                                                Fiscal Years Ended
                                  -------------------------------------------------------------------------------
                                        December 27,               December 28,               December 29,
                                            2003                       2002                       2001
                                  -------------------------  -------------------------  -------------------------
                                                                                       
(In thousands)
Research and development                  $43,706                    $32,163                    $28,164



Manufacturing and Operations

     Garmin  believes  that one of its core  competencies  is its  manufacturing
capability at both its Shijr,  Taiwan facility and its Olathe,  Kansas facility.
Garmin  believes  that its  vertically  integrated  approach has provided it the
following benefits:

     Reduced   time-to-market.   Utilizing  concurrent  engineering  techniques,
Garmin's products are introduced to production at an early development stage and
the feedback  provided by manufacturing  is incorporated  into the design before
mass  production  begins.  In this  manner,  Garmin  attempts to reduce the time
required to move a product from its design phase to mass production  deliveries,
with improved quality and yields.  Reducing time to market has enabled Garmin to
offer  several  industry  firsts,  such as the  Rino  GPS-enabled  Family  Radio
Service/General  Mobile Radio  Service  two-way  radio,  the iQue 3600  portable
digital  assistant  with  integrated  GPS and  mapping  and the GNS  430,  which
integrates  traditional aviation navigation and communications  systems with GPS
in a single package.

     Design and process optimization. Garmin uses its manufacturing resources to
rapidly  prototype design  concepts,  products and processes in order to achieve
higher efficiency,  lower cost and better value for customers.  Garmin's ability
to fully explore product design and  manufacturing  process concepts has enabled
it to optimize  its designs to minimize  size and weight in GPS devices that are
functional, waterproof, and rugged.

     Logistical agility. Operating its own manufacturing facilities helps Garmin
minimize  problems,  such as component  shortages and long  component lead times
which are common in the electronics industry. Many products can be re-engineered
to bypass  component  shortages  or reduce  cost and the new designs can quickly
fill the  distribution  pipeline.  Garmin  reacts  rapidly  to changes in market
demand by maintaining a safety stock of long-lead components and by rescheduling
components from one product line to another.

     Garmin's design and manufacturing processes are certified to ISO 9001-2000,
international quality standards developed by the International  Organization for
Standardization.  Garmin's  Taiwan  manufacturing  facility has also achieved QS
9000 quality  certification,  a quality  standard for automotive  suppliers.  In
addition  Garmin's aviation  panel-mount  products are designed and manufactured
according to processes which are approved and monitored by the FAA.

                                       9


Materials

     Garmin  purchases  components  for its products  from a number of suppliers
around  the  world.  For  certain  components,  Garmin  relies  on  sole  source
suppliers.  The failure of our  suppliers to deliver  components  in  sufficient
quantities and in a timely manner could adversely affect our business.

Seasonality

     Our sales are subject to some seasonal fluctuation. Typically, sales of our
consumer  products are highest in the second  quarter,  due to increased  demand
during the spring and summer marine season,  and in the fourth  quarter,  due to
increased  demand during the holiday buying season.  Sales of consumer  products
are also  influenced by the timing of the release of new products.  Our aviation
products do not experience much seasonal  variation,  but are more influenced by
the timing of the release of new products  when the initial  demand is typically
the strongest.

Backlog

     Our sales are  generally  of a consumer  nature  and there is a  relatively
short cycle  between  order and  shipment.  Therefore,  we believe  that backlog
information is not material to the  understanding of our business.  We typically
ship most orders within 72 hours of receipt.


Intellectual Property

     Garmin's  success  and  ability  to  compete  is  dependent  in part on its
proprietary  technology.  Garmin relies on a combination  of patent,  copyright,
trademark  and trade  secret laws,  as well as  confidentiality  agreements,  to
establish and protect our proprietary  rights.  As of March 1, 2004, Garmin held
141 U.S.  patents that expire at various dates no earlier than 2006. As of March
1, 2004, Garmin had 153 U.S. patent  applications  pending.  Our U.S. patents do
not create any patent rights in foreign countries and we do not hold any foreign
patents. In addition,  Garmin often relies on licenses of intellectual  property
for use in its  business.  For  example,  Garmin  obtains  licenses  for digital
cartography  technology for use in our products from various  sources.  Garmin's
registered U.S.  trademarks  include:  GARMIN; the GARMIN logo; the GARMIN globe
design; the GARMIN "swoosh" design; APOLLO;  BLUECHART; CITY SELECT; DCG; ETREX;
ETREX CAMO; ETREX LEGEND; ETREX SUMMIT; ETREX VISTA; ETREX VENTURE; GNC; GPS II;
GPS III;  GPS V;  GPSMAP;  GUIDANCE  BY  GARMIN;  IQUE;  MAPSOURCE;  METROGUIDE;
NAVTALK; PERSONAL NAVIGATOR; RINO; SEE-THRU;  STREETPILOT and TRACBACK. Our mark
GARMIN and  certain  other  trademarks  have also been  registered  in  selected
foreign countries.  Garmin's  trademarks include  FORERUNNER;  FORETREX;  G1000;
GEKO;  ION; QUE and WAAS ENABLED.  Some of Garmin's  patents and its  registered
trademarks   and  trademarks   are  owned  by  Garmin's   subsidiaries,   Garmin
Corporation, Garmin International, Inc. and Garmin AT, Inc.

     Garmin  believes that its  continued  success  depends on the  intellectual
skills of its employees  and their ability to continue to innovate.  Garmin will
continue to file and prosecute patent  applications  when appropriate to attempt
to protect Garmin's rights in its proprietary technologies.

     It is possible that Garmin's current patents, or patents which it may later
acquire,  may be successfully  challenged or invalidated in whole or in part. It
is also  possible that Garmin may not obtain  issued  patents for  inventions it
seeks to protect.  It is also possible  that Garmin may not develop  proprietary
products or technologies  in the future that are patentable,  or that any patent
issued to Garmin may not provide it with any competitive advantages, or that the
patents of others will preclude Garmin from  manufacturing and marketing certain
products.   Legal  protections  afford  only  limited  protection  for  Garmin's
technology.   Despite  Garmin's  efforts  to  protect  its  proprietary  rights,
unauthorized  parties  may attempt to copy  aspects of  Garmin's  products or to
obtain and use information that Garmin regards as proprietary. Litigation may be

                                       10


necessary in the future to enforce Garmin's  intellectual  property  rights,  to
protect  its  trade  secrets,  to  determine  the  validity  and  scope  of  the
proprietary  rights of others or to defend  against  claims of  infringement  or
invalidity.  Any  resulting  litigation  could result in  substantial  costs and
diversion of Garmin's  resources.  Garmin's means of protecting its  proprietary
rights may not be adequate and Garmin's  competitors may  independently  develop
similar technology.


Regulations

     Garmin's  aviation  products  that are  intended for  installation  in type
certificated  aircraft  are  required to be  certified  by the FAA, its European
counterpart,  the Joint Aviation Authorities, and other comparable organizations
before  they can be used in an  aircraft.  The  telecommunications  industry  is
highly  regulated,  and the regulatory  environment in which Garmin  operates is
subject to change. In accordance with Federal  Communication  Commission ("FCC")
rules and  regulations,  wireless  transceiver and cellular handset products are
required  to be  certified  by the FCC and  comparable  authorities  in  foreign
countries where they are sold.  Garmin's products sold in Europe are required to
comply with relevant directives of the European Commission. A delay in receiving
required certifications for new products or enhancements to Garmin's products or
losing  certification  for Garmin's existing products could adversely affect its
business.

     Because Garmin Corporation, one of the Company's principal subsidiaries, is
located in Taiwan,  foreign exchange control laws and regulations of Taiwan with
respect to  remittances  into and out of Taiwan  may have an impact on  Garmin's
operations.  The  Taiwan  Foreign  Exchange  Control  Statute,  and  regulations
thereunder,  provide that all foreign exchange  transactions must be executed by
banks  designated  to handle such  business by the Ministry of Finance of Taiwan
and by the  Central  Bank  of  China,  also  referred  to as  the  CBC.  Current
regulations favor  trade-related  foreign exchange  transactions.  Consequently,
foreign  currency  earned from  exports of  merchandise  and services may now be
retained and used freely by exporters, while all foreign currency needed for the
import of merchandise  and services may be purchased  freely from the designated
foreign exchange banks. Aside from trade-related foreign exchange  transactions,
Taiwan  companies and residents may, without foreign  exchange  approval,  remit
outside and into Taiwan  foreign  currencies of up to $50 million and $5 million
respectively,  or their  equivalent,  each calendar year.  Currency  conversions
within the limits are  processed by the  designated  banks and do not have to be
reviewed  and  approved  by the CBC.  The  above  limits  apply  to  remittances
involving  a  conversion  between New Taiwan  Dollars and U.S.  Dollars or other
foreign currencies. The CBC typically approves foreign exchange in excess of the
limits  if a party  applies  with the CBC for  review  and  presents  legitimate
business  reasons  justifying  the currency  conversion.  A requirement  is also
imposed on all  enterprises  to register all medium and  long-term  foreign debt
with the CBC.


Environmental Matters

     Capital expenditures,  earnings and the competitive position of Garmin have
not been  materially  affected  by  compliance  with  federal,  state  and local
environmental laws and regulations.


Employees

     As of December 31, 2003, Garmin had 2,021 full-time employees worldwide, of
whom 997 were in the United States, 975 were in Taiwan and 49 were in the United
Kingdom.  None of Garmin's employees are represented by a labor union or covered
by a collective bargaining agreement. Garmin considers its employee relations to
be good.


Item 2.  Properties

     Garmin  International,  Inc. and Garmin USA, Inc.,  occupy a 240,000 square
foot  facility on 41 acres in Olathe,  Kansas,  where all  aviation  panel-mount
products are manufactured and Garmin products are warehoused,  distributed,  and
supported for North,  Central and South  America.  Garmin's  subsidiary,  Garmin
Realty,  LLC also owns an  additional  46 acres of land on the  Olathe  site for

                                       11


future  expansion.  In connection  with the bond  financings for the facility in
Olathe and the  expansion of that  facility,  the City of Olathe holds the legal
title to this  property  which is leased to Garmin's  subsidiaries  by the City.
Upon  the  payment  in full of the  outstanding  bonds,  the City of  Olathe  is
obligated to transfer  title to Garmin's  subsidiaries  for the aggregate sum of
$200.  Garmin  International,  Inc. has purchased all the outstanding  bonds and
continues to hold the bonds until maturity in order to benefit from property tax
abatement.

     Garmin AT, Inc. leases approximately 15 acres of land in Salem, Oregon with
a ground  lease.  This ground lease expires in 2030 but Garmin AT has the option
to extend the ground  lease until  2050.  Garmin AT,  Inc.  owns and  occupies a
52,000  square foot  facility  and a 6,000 square foot  aircraft  hangar on this
land.  Garmin AT, Inc.  plans to construct a 15,000 square foot expansion to its
aircraft hangar in 2004.

     Garmin International,  Inc. is constructing a 575,000 square foot expansion
to its  Olathe,  Kansas  facility.  This  building  expansion  is expected to be
completed in 2004.

     Garmin  International,  Inc.  leases  148,320  square  feet  of land at New
Century  Airport in Gardner,  Kansas under a ground lease which expires in 2026.
Garmin  International,  Inc.  owns and  occupies a 25,034  square foot  aircraft
hangar,  flight  test  and  certification  facility  on  this  land  for  use in
development and certification of aviation products.

     Garmin's  subsidiary,  Garmin  Corporation,  owns  a  249,326  square  foot
facility in Shijr,  Taipei County,  Taiwan where it manufactures all of Garmin's
consumer and portable  aviation  products and  warehouses,  markets and supports
products for the Pacific Rim  countries.  Garmin  Corporation  occupies  218,662
square feet at this  facility  and leases the  remaining  30,664  square feet to
third parties.

     Garmin's  subsidiary,  Garmin (Europe) Ltd.,  leases an aggregate of 28,358
square feet under three leases in Romsey, England for warehousing, marketing and
supporting  Garmin  products  in  Europe,  Africa and the  Middle  East.  Garmin
(Europe)  Ltd.  also  repairs  products at this  facility.  One of these  leases
expires in 2010 and two of these leases  expire in 2015.  Garmin  International,
Inc.  also leases an  aggregate  of 3,233  square feet of office space in Tempe,
Arizona for software development,  and Wichita,  Kansas for support for Garmin's
aviation original equipment manufacturer operations.


Item 3.  Legal Proceedings

     From time to time, Garmin may be involved in litigation  relating to claims
arising out of our  operations.  As of March 1, 2004,  Garmin was not a party to
any material legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

     No matters were  submitted to a vote of  shareholders  of Garmin during the
fourth fiscal quarter of 2003.

Executive Officers and Significant Employees of the Company

     Pursuant  to General  Instruction  G(3) of Form 10-K and  instruction  3 to
paragraph (b) of Item 401 of Regulation  S-K, the following  list is included as
an unnumbered Item in Part I of this Annual Report on Form 10-K in lieu of being
included in the Company's  Definitive  Proxy  Statement in  connection  with its
annual meeting of shareholders scheduled for June 4, 2004.

     Gary L. Burrell,  age 66, has served as  Co-Chairman  of Garmin Ltd.  since
August 2000.  He also served as Co-Chief  Executive  Officer of Garmin Ltd. from
August 2000 to August 2002. He has been a director of Garmin  Corporation  since
January 1990. He served as President of Garmin  Corporation from January 1990 to
December 1998. Mr. Burrell has also been Chairman of Garmin International,  Inc.
since March 2002, a director of Garmin International, Inc. since August 1990 and
he served as President of Garmin  International,  Inc. from August 1990 to March
2002.  Mr.  Burrell has been Chairman of Garmin USA, Inc. since March 2002 and a
director of Garmin USA,  Inc.  since  December  2001.  He served as President of
Garmin  USA,  Inc.  from  December  2001 to March 2002.  Mr.  Burrell has been a
director and Chairman of Garmin  (Europe)  Ltd.  since 1992.  Mr.  Burrell was a
director of Garmin Foreign Sales  Corporation from May 1998 to December 2001 and

                                       12


President  from July 1998 to December  2001.  Mr.  Burrell  holds a BS degree in
Electrical  Engineering  from  Wichita  State  University  and  a MS  degree  in
Electrical Engineering from Rensselaer Polytechnic Institute.

     Dr. Min H. Kao,  age 55, has served as  Co-Chairman  of Garmin  Ltd.  since
August  2000.  He has served as Chief  Executive  Officer of Garmin  Ltd.  since
August 2002 and previously served as Co-Chief Executive Officer from August 2000
to August 2002. He has been President of Garmin  Corporation since January 1999.
He has also been  Chairman and a director of Garmin  Corporation  since  January
1990. Dr. Kao has been President of Garmin International,  Inc. since March 2002
and a director of Garmin  International,  Inc.  since August 1990.  He served as
Vice President of Garmin International,  Inc. from April 1991 to March 2002. Dr.
Kao has been  President of Garmin USA,  Inc.  since March 2002 and a director of
Garmin USA, Inc.  since  December 2001. Dr. Kao has been President of Garmin AT,
Inc.  and a director of Garmin AT, Inc.  since  August  2003.  He served as Vice
President of Garmin USA,  Inc.  from  December 2001 to March 2002. He has been a
director of Garmin  (Europe) Ltd.  since 1992.  Dr. Kao was a director of Garmin
Foreign Sales Corporation from May 1998 to December 2001 and Vice President from
July 1998 to December  2001.  Dr. Kao holds Ph.D.  and MS degrees in  Electrical
Engineering  from the  University  of  Tennessee  and a BS degree in  Electrical
Engineering from National Taiwan University.

     Kevin S.  Rauckman,  age 41,  has  served as Chief  Financial  Officer  and
Treasurer of Garmin Ltd.  since August 2000. He has been Director of Finance and
Treasurer of Garmin  International,  Inc.  since  January 1999 and a director of
Garmin  International,  Inc.  since  April  2001.  He has been  Treasurer  and a
director of Garmin USA, Inc. since  December  2001. Mr.  Rauckman has been Chief
Financial  Officer and Treasurer and a director of Garmin AT, Inc.  since August
2003.  Mr.  Rauckman  was a  director  and  Treasurer  of Garmin  Foreign  Sales
Corporation from January 1999 to December 2001. Previously,  Mr. Rauckman served
as  Director  of  Finance  and in other  finance  capacities  for one of  Allied
Signal's (now known as Honeywell  International,  Inc.) Aerospace units from May
1996 to January 1999 and served as Finance  Manager with Unisys  Corporation,  a
technology  hardware and consulting  services  company,  from June 1993 to April
1996.  Mr.  Rauckman holds BS and MBA degrees in Business from the University of
Kansas.

     Andrew R. Etkind,  age 48, has served as General  Counsel and  Secretary of
Garmin  Ltd.  since  August  2000.  He  has  been  General   Counsel  of  Garmin
International, Inc. since February 1998 and Secretary since October 1998. He has
been General  Counsel and Secretary of Garmin USA, Inc. since December 2001. Mr.
Etkind has been General  Counsel and  Secretary of Garmin AT, Inc.  since August
2003.  He  has  been  Secretary  of  Garmin  (Europe)  Ltd.  since  March  2001.
Previously, Mr. Etkind served as Senior Attorney for Alumax Inc., a manufacturer
of aluminum and aluminum products,  from March 1996 to January 1998 and was Vice
President,  General Counsel and Secretary of Information  Management  Resources,
Inc., a software systems development and consulting  company,  from July 1993 to
February  1996.  Mr.  Etkind  holds  BA,  MA  and  LLM  degrees  from  Cambridge
University, England and a JD degree from the University of Michigan Law School.

     Clifton A.  Pemble,  age 38, has been  Director  of  Engineering  of Garmin
International,  Inc. since 2002. Previously, he was Software Engineering Manager
of Garmin  International,  Inc.  from 1995 to 2002 and a Software  Engineer with
Garmin International,  Inc. from 1989 to 1995. Mr. Pemble has been a director of
Garmin AT, Inc.  since August 2003.  Prior to joining  Garmin,  Mr. Pemble was a
Software Engineer at Allied Signal (now known as Honeywell International, Inc.).
Mr. Pemble holds BA degrees in Mathematics and Computer  Science from MidAmerica
Nazarene University.

     Gary  V.  Kelley,  age  57,  has  been  Director  of  Marketing  of  Garmin
International,  Inc. since 1992 and has been a director of Garmin  (Europe) Ltd.
since 1993.  He has also been  Director of Marketing of Garmin USA,  Inc.  since
January 2002. Mr. Kelley holds a BBA degree from Baker University. He also holds
a commercial pilot license with instrument and flight instructor ratings.

     All  executive  officers are elected by and serve at the  discretion of the
Company's Board of Directors.  None of the executive  officers has an employment
agreement with the Company.  There are no arrangements or understandings between
the executive  officers and any other person  pursuant to which he or she was or
is to be selected as an officer.  There is no family  relationship  among any of
the executive officers. Dr. Min H. Kao is the brother of Ruey-Jeng Kao, who is a
supervisor  of Garmin  Corporation,  Garmin's  Taiwan  subsidiary.  A supervisor
serves as an ex-officio member of Garmin Corporation's Board of Directors.


                                       13


                                     PART II


Item 5.  Market for the Company's Common Shares and Related Shareholder Matters

     The Company's common shares have traded on the Nasdaq National Market under
the symbol  "GRMN"  since its initial  public  offering on December 8, 2000 (the
"IPO"). As of March 1, 2004 there were 174 shareholders of record.

     The range of high and low  closing  sales  prices of the  Company's  common
shares as reported on the Nasdaq Stock Market for each fiscal  quarter of fiscal
years 2003 and 2002 was as follows:


                                           Year Ended
                         December 27, 2003      December 28, 2002
                         -----------------------------------------------
                             High        Low        High         Low
                         -----------------------------------------------
First Quarter              $36.89     $28.08      $22.92      $18.76
Second Quarter             $50.26     $35.05      $24.19      $21.80
Third Quarter              $46.61     $36.25      $21.90      $18.10
Fourth Quarter             $56.01     $41.68      $30.33      $18.00


     One dividend has been paid since the IPO. The Board of Directors declared a
cash dividend of $0.50 per common share to shareholders of record on December 1,
2003 which was paid on  December  15,  2003.  The Board of  Directors  currently
anticipates declaring and paying annual cash dividends in similar amounts in the
future  subject to  continuation  of  favorable  tax  treatment  for  dividends,
evaluation  of the  Company's  level of  earnings,  balance  sheet  position and
availability of cash.



Item 6.  Selected Financial Data

     The following table sets forth selected consolidated  financial data of the
Company.  The selected  consolidated  balance sheet data as of December 27, 2003
and December 28, 2002 and the selected consolidated statement of income data for
the years ended December 27, 2003,  December 28, 2002 and December 29, 2001 were
derived from the Company's  audited  consolidated  financial  statements and the
related notes thereto which are included in Item 8 of this annual report on Form
10-K.  The  selected  consolidated  balance  sheet data as of December 29, 2001,
December 30, 2000, and December 25, 1999 and the selected consolidated statement
of income data for the years ended  December 30, 2000 and December 25, 1999 were
derived  from the  Company's  audited  consolidated  financial  statements,  not
included herein.

                                       14


     The  information  set  forth  below is not  necessarily  indicative  of the
results of future  operations  and should be read  together  with  "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
the consolidated  financial statements and notes to those statements included in
Items 7 and 8 in Part II of this Form 10-K.



                                                   Years ended (1)
                                             ----------------------------------------------------------------------------------
                                              Dec. 27, 2003   Dec. 28, 2002   Dec. 29, 2001    Dec. 30, 2000      Dec. 25, 1999
                                             ----------------------------------------------------------------------------------
                                                                (in thousands, except per share data)
                                                                                                 
Consolidated Statements of
Income Data:
    Net sales                                  $572,989         $465,144        $369,119        $345,741        $232,586
    Cost of goods sold                          242,448          210,088         170,960         162,015         105,654
                                             -----------     ------------    ------------     -----------     -----------
        Gross profit                            330,541          255,056         198,159         183,726         126,932

    Operating expenses:
        Selling, general and
              administrative                     59,835           45,453          38,709          32,669          27,063
        Research and development                 43,706           32,163          28,164          21,764          17,339
                                             -----------     ------------    ------------     -----------     -----------
    Total operating expenses                    103,541           77,616          66,873          54,433          44,402
                                             -----------     ------------    ------------     -----------     -----------

    Operating income                            227,000          177,440         131,286         129,293          82,530
    Other income, net (2), (3)                   (1,057)           5,294          20,749          11,629           1,602
                                             -----------     ------------    ------------     -----------     -----------
    Income before income taxes                  225,943          182,734         152,035         140,922          84,132

    Income tax provision                         47,309           39,937          38,587          35,259          19,965
                                             -----------     ------------    ------------     -----------     -----------
                      Net income               $178,634         $142,797        $113,448        $105,663         $64,167
                                             ===========     ============    ============     ===========     ===========

    Net income per share: (6)
                   Basic                          $1.65            $1.32           $1.05           $1.05           $0.64
                   Diluted                        $1.64            $1.32           $1.05           $1.05           $0.64
    Weighted average common
        shares outstanding:
                   Basic                        108,011          107,774         108,097         100,489         100,000
                   Diluted                      108,902          108,201         108,447         100,506         100,000

    Cash dividends per share (4)                  $0.50            $0.00           $0.00           $0.29           $0.13

Balance Sheet Data (at end of
Period):
    Cash and cash equivalents                  $274,329         $216,768        $192,842        $251,731        $104,079
    Marketable securities                       221,447          245,708         131,584               0               0
    Total assets                                856,945          705,888         538,984         463,347         250,090
    Total debt (5)                                    0           20,000          32,188          46,946          27,720
    Total stockholders' equity                  749,690          602,499         453,969         365,239         194,599

- -------------------------------------------------------------------------------------------------------------------------



(1)  Our fiscal year-end is the last Saturday of the calendar year and does not
     always fall on December 31.
(2)  Other income, net mainly consists of interest income, interest expense and
     foreign currency gain (loss).
(3)  Includes $6.7 million of foreign currency losses in 2003,  $0.0 million,
     $11.6 million, and $7.0 million of foreign currency gains in 2002, 2001,
     and 2000 respectively, and $1.5 million of foreign currency losses in 1999.
(4)  A cash dividend of $0.50 per share was paid on December 15, 2003 to share-
     holders of record on December 1, 2003.  There were no cash dividends issued
     during 2002 or 2001.   Dividends paid in 2000 and 1999 are adjusted for
     the 1.12379256 for 1 stock split of our common shares, effected through a
     stock dividend on November 6, 2000.
(5)  Total debt consists of notes payable and long-term debt.
(6)  Net income per share in 2000 and 1999 are adjusted for the 1.12379256 for 1
     stock split of our common shares, effected through a stock dividend on
     November 6, 2000.



                                       15


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

     The  following  discussion  and  analysis of our  financial  condition  and
results of  operations  focuses on and is intended to clarify the results of our
operations,  certain  changes  in our  financial  position,  liquidity,  capital
structure and business  developments for the periods covered by the consolidated
financial  statements included in this Form 10-K. This discussion should be read
in  conjunction  with,  and is  qualified  by  reference  to, the other  related
information  including,  but not limited to, the audited consolidated  financial
statements  (including the notes thereto and the  independent  auditor's  report
thereon),  the description of our business,  all as set forth in this Form 10-K,
as well as the risk factors  discussed below (the  "Company-Specific  Trends and
Risks").

     As  previously  noted,  the  discussion  set forth below,  as well as other
portions of this Form 10-K,  contains  statements  concerning  potential  future
events.  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 our  assumptions  on which the statements are based prove
incorrect or should unanticipated  circumstances arise, our 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, the  Company-Specific  Trends and Risks. Readers
are strongly  encouraged  to consider  those  factors when  evaluating  any such
forward-looking  statement.  We do not  undertake to update any  forward-looking
statements in this Form 10-K.

     The  Company's  fiscal  year is a 52-53  week  period  ending  on the  last
Saturday of the calendar  year.  Fiscal year 2000 contained 53 weeks compared to
52 weeks for fiscal years 2003,  2002 and 2001.  Unless  otherwise  stated,  all
years and dates refer to the Company's  fiscal year and fiscal  periods.  Unless
the context otherwise requires, references in this document to "we," "us," "our"
and similar terms refer to Garmin Ltd. and its subsidiaries.

     Unless otherwise indicated, dollars are in thousands.


Overview

     We are a leading  worldwide  provider  of  navigation,  communications  and
information devices,  most of which are enabled by Global Positioning System, or
GPS, technology.  We operate in two business segments, the consumer and aviation
markets.  Both of our segments offer products through our network of independent
dealers and distributors. However, the nature of products and types of customers
for the two  segments  vary  significantly.  As such,  the  segments are managed
separately. Our consumer segment includes portable GPS receivers and accessories
for marine,  recreation,  land and  automotive  applications  sold  primarily to
retail outlets.  Our aviation products are portable and panel-mount avionics for
Visual  Flight  Rules  and  Instrument  Flight  Rules  navigation  and are  sold
primarily to retail outlets and certain aircraft manufacturers.

     Since our first products were delivered in 1991, we have generated positive
income from  operations each year and have funded our growth from these profits.
Our sales have  increased at a compounded  annual  growth rate of 23% since 1996
and our net income has increased at a compounded annual growth rate of 34% since
1996.  The vast  majority  of this  growth has been  organic;  only a very small
amount of new revenue  occurred as a result of the  acquisition  of UPS Aviation
Technologies  in 2003, and this  acquisition  had no  significant  impact on net
income for that year.

     Since our  principal  locations  are in the United  States,  Taiwan and the
U.K., we experience some foreign currency fluctuations in our operating results.
The functional currency of our European operations is the U.S. dollar (effective
in 2001) and the functional  currency of our Asian  operations is the New Taiwan
Dollar.  Minimal  transactions of our European operations are now denominated in
British  Pounds  Sterling  or the Euro.  We  experienced  $(6.7)  million,  $0.0
million,  $11.6 million,  $7.0 million,  and $(1.5) million in foreign  currency
gains  (losses)  during  fiscal  years  2003,   2002,   2001,  2000,  and  1999,
respectively.  To date, we have not entered into hedging  transactions  with the
European Dollar,  the British Pound Sterling or the New Taiwan Dollar,  although
we may utilize hedging transactions in the future.

                                       16


Critical Accounting Policies and Estimates


General

     The  Company's  discussion  and  analysis of its  financial  condition  and
results  of  operations  are based  upon the  Company's  consolidated  financial
statements,  which have been prepared in accordance with  accounting  principles
generally  accepted in the United States.  The  presentation  of these financial
statements requires the Company to make estimates and judgements that affect the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure of  contingent  assets and  liabilities.  On an on-going  basis,  the
Company  evaluates its  estimates,  including  those  related to customer  sales
programs and incentives,  product returns, bad debts, inventories,  investments,
intangible assets,  income taxes,  warranty  obligations,  and contingencies and
litigation.  The Company  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  judgements 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.


Revenue Recognition

     The Company  records  estimated  reductions  to revenue for customer  sales
programs returns and incentive  offerings  including rebates,  price protection,
promotions  and other  volume-based  incentives.  The  reductions to revenue are
based on estimates and judgements using historical experience and expectation of
future  conditions.  Changes  in these  estimates  could  negatively  affect the
Company's operating results. These incentives are accrued for on a percentage of
sales basis and reviewed periodically. If market conditions were to decline, the
Company  may take  actions to increase  customer  incentive  offerings  possibly
resulting in an  incremental  reduction of revenue at the time the  incentive is
offered.


Warranties

     The Company's products sold are generally covered by a warranty for periods
ranging  from one to two  years.  The  Company  accrues a warranty  reserve  for
estimated costs to provide warranty services. The Company's estimate of costs to
service  its  warranty  obligations  is  based  on  historical   experience  and
expectation  of  future  conditions.  To  the  extent  the  Company  experiences
increased  warranty claim activity or increased costs  associated with servicing
those claims,  its warranty  accrual will increase  resulting in decreased gross
profit.


Inventory

     The  Company  writes  down its  inventory  for  estimated  obsolescence  or
unmarketable inventory equal to the difference between the cost of inventory and
the estimated market value based upon assumptions about future demand and market
conditions.  If actual market conditions are less favorable than those projected
by management, additional inventory write-downs may be required.

Investments

     Investments  are  classified  as  available  for sale and  recorded at fair
value, and unrealized investment gains and losses are reflected in stockholders'
equity.  Investment income is recorded when earned, and capital gains and losses
are recognized when investments are sold.  Investments are reviewed periodically
to determine if they have  suffered an  impairment  of value that is  considered
other than temporary.  If investments  are determined to be impaired,  a capital
loss is recognized at the date of determination.

     Testing for impairment of investments also requires significant  management
judgement.   The  identification  of  potentially  impaired   investments,   the
determination  of their fair value and the  assessment of whether any decline in
value is other than temporary are the key judgement  elements.  The discovery of
new  information  and  the  passage  of  time  can  significantly  change  these
judgements.  Revisions of impairment  judgements  are made when new  information

                                       17


becomes known, and any resulting  impairment  adjustments are made at that time.
The current  economic  environment and recent  volatility of securities  markets
increase the  difficulty  of  determining  fair value and  assessing  investment
impairment.


Income Taxes

     While no valuation allowance has been recorded,  it is the Company's policy
to record a valuation  allowance  to reduce its deferred tax assets to an amount
that it believes is more likely than not to be  realized.  While the Company has
considered  future taxable income and ongoing  prudent and feasible tax planning
strategies in assessing the need for the valuation  allowance,  in the event the
Company  were to  determine  that it would not be able to realize all or part of
its net deferred  tax assets in the future,  an  adjustment  to the deferred tax
assets  would be charged to income in the period  such  determination  was made.
Likewise,  should the  Company  determine  that it would be able to realize  its
deferred  tax  assets in the  future in excess of its net  recorded  amount,  an
adjustment to the deferred tax assets would  increase  income in the period such
determination was made.

     In addition,  the calculation of our tax liabilities  involves dealing with
uncertainties  in the  application  of complex  tax  regulations.  We  recognize
liabilities for tax audit issues in the U.S. and other tax  jurisdictions  based
on our estimate of whether,  and the extent to which,  additional  taxes will be
due.  If payment  of these  amounts  ultimately  proves to be  unnecessary,  the
reversal of the liabilities would result in tax benefits being recognized in the
period  when we  determine  the  liabilities  are no  longer  necessary.  If our
estimate of tax liabilities  proves to be less than the ultimate  assessment,  a
further charge to expense would result.

Stock Based Compensation

     The Company  distributes  a small number of stock options each year as part
of the Company's  compensation  package for  employees.  Employees  with certain
levels of  responsibility  within the  Company  are  eligible  for stock  option
grants,  but the granting of options is at the  discretion  of the  Compensation
Committee of the Board of Directors and is not a contractual  obligation.  Stock
compensation  plans  are  discussed  in  detail  in  Note  11 of  the  Notes  to
Consolidated Financial Statements.


Accounting Terms and Characteristics


Net Sales

     Our net sales are  primarily  generated  through sales to our global dealer
and distributor  network and to original equipment  manufacturers.  We recognize
sales when  products  are shipped.  Our sales are largely of a consumer  nature;
therefore  backlog  levels are not  necessarily  indicative  of our future sales
results.  We aim to  achieve a quick  turnaround  on orders we  receive,  and we
typically ship most orders within 72 hours.

     Net sales are subject to some seasonal fluctuation. Typically, sales of our
consumer  products are highest in the second  quarter,  due to increased  demand
during the spring and summer marine season,  and in the fourth  quarter,  due to
increased demand during the holiday buying season.  Our aviation products do not
experience much seasonal variation, but are more influenced by the timing of the
release of new products when the initial demand is typically the strongest.


Gross Profit

     The  most  significant  components  of our  cost  of  goods  sold  are  raw
materials,  labor  and  depreciation.  Raw  material  costs,  which are our most
significant  cost item,  have come down  slightly  as a  percentage  of sales in
recent  years,  as we have  negotiated  lower raw  material  costs  with our key
suppliers.  As a result,  gross profit has improved  somewhat as a percentage of
sales when compared with prior years.


                                       18


     In 2000, we  experienced  upward pricing  pressures on our high  technology
components,  but  had  offset  those  with  efficiencies  in  our  manufacturing
processes. We did not experience significant pricing pressure on high technology
components  in fiscal  2001 and  fiscal  2002.  We  experienced  upward  pricing
pressures on our high  technology  components  in late 2003,  but offset much of
those with efficiencies in our manufacturing processes. Our existing practice of
performing the design and manufacture of our products in-house has enabled us to
utilize  alternative  lower cost components from different  suppliers and, where
possible,  to  redesign  our  products  to  permit us to use  these  lower  cost
components.  We believe that because of our practice of  performing  the design,
manufacture and marketing of our products in-house,  both our Shijr,  Taiwan and
Olathe,  Kansas  manufacturing  plants have experienced  relatively low costs of
manufacturing, compared to our competition. In general, products manufactured in
Taiwan have been our highest  volume  products.  Our  manufacturing  labor costs
historically have been lower in Taiwan than in Olathe.

     Sales  price  variability  has had and can be expected to have an effect on
our gross profit.  In the past, prices of some of our handheld devices sold into
the consumer  market have declined due to market  pressures and  introduction of
new  products  sold at lower price  points.  The average  selling  prices of our
aviation  products  have  decreased  due to  product  mix and  market  pressures
partially  offset by the  introduction of more advanced  products sold at higher
prices.  In  conjunction  with the effects of lower labor costs  experienced  on
Taiwan production, the effect of the sales price variability inherent within the
mix of  GPS-enabled  products sold could have a significant  impact on our gross
profit.


Selling, General and Administrative Expenses

         Our selling, general and administrative expenses consist primarily of:

         o    salaries for sales and marketing personnel;

         o    salaries and related costs for executives and administrative
              personnel;

         o    advertising, marketing, and other brand building costs;

         o    accounting and legal costs;

         o    information systems and infrastructure costs;

         o    travel and related costs; and

         o    occupancy and other overhead costs.

     Since we plan to  increase  market  penetration  in the  future,  we expect
selling,  general and  administrative  expenses to continue to increase  for the
foreseeable future. We intend to increase  advertising and marketing expenses in
order to build increased brand awareness in the consumer marketplace, especially
as we continue to develop new markets,  such as automotive and personal  digital
assistants (PDA). We also intend to increase our customer call center support as
our consumer  segment  continues to grow.  Another  cause of increased  selling,
general, and administrative  costs is the continued  implementation of an ORACLE
Enterprise  Resource  Planning  (ERP) system during  fiscal 2004 and  associated
information  system staffing needed to support ORACLE.  We anticipate that these
increased  expenses  could  impact  our  financial  results  in fiscal  2004 and
subsequent periods, although it is unclear at this point what the extent of this
impact may be.

Research and Development

     The majority of our research and development  costs represent  salaries for
our  engineers,  costs  for  high  technology  components  used in  product  and
prototype  development,  and  costs  of test  equipment  needed  during  product
development.

     We have continued to grow our research and development  capabilities  since
our inception. Substantially all of the research and development of our products
is performed in the United States.

                                       19


     We  are  committed  to  increasing  the  level  of  innovative  design  and
development  of new  products  as we strive  for  expanded  ability to serve our
existing  consumer and aviation  markets as well as new markets for  GPS-enabled
devices.  We continue to grow our  research and  development  budget on absolute
terms.  Research  and  development  expenses may also grow at a faster rate when
compared to our projected revenue growth for fiscal year 2003.


Customers

     No customer  accounted  for greater than 10% of our sales in the year ended
December 27, 2003. Our top ten customers  accounted for approximately 25% of net
sales.  We  have  experienced  average  sales  days  in  our  customer  accounts
receivable  between 35 and 51 days since  1999.  The  average  sales days in our
customer accounts receivable was 51 days as of December 27, 2004.


Income Taxes

     We have  experienced  a relatively  low effective tax rate in Taiwan due to
lower marginal tax rates and substantial tax incentives offered by the Taiwanese
government on certain  high-technology capital investments.  Therefore,  profits
earned in Taiwan have been taxed at a lower rate than those in the United States
and Europe. As a result,  our consolidated  effective tax rate was approximately
21% during 2003. We have taken advantage of this tax benefit in Taiwan since our
inception and we expect to continue to benefit from lower effective tax rates at
least  through  2008.  The current  Taiwan tax  incentives  for which Garmin has
received  approval  will  end in  2008.  We  plan  on  applying  for  additional
incentives for years beyond 2008 based on capital  investments we expect to make
in the future.  However, there can be no assurance that such tax incentives will
be available indefinitely.


Results of Operations

     The following table sets forth our results of operations as a percentage of
net sales during the periods shown:


                                              Fiscal Years Ended
                                           -------------------------------------
                                              Dec. 27,     Dec. 28,    Dec. 29,
                                                  2003         2002        2001
                                           -------------------------------------

Net sales                                       100.0%       100.0%      100.0%
Cost of goods sold                               42.3%        45.2%       46.3%
Gross profit                                     57.7%        54.8%       53.7%
Operating expenses:
     Selling, general and administrative         10.4%         9.8%       10.5%
     Research and development                     7.6%         6.9%        7.6%
Total operating expenses                         18.0%        16.7%       18.1%
Operating income                                 39.7%        38.1%       35.6%
Other income / (loss) , net                      (0.2%)        1.2%        5.6%
Income before income taxes                       39.5%        39.3%       41.2%
Provision for income taxes                        8.3%         8.6%       10.5%
Net income                                       31.2%        30.7%       30.7%

- --------------------------------------------------------------------------------



                                       20


     The following  table sets forth our results of  operations  for each of our
two segments  through income before taxes during the period shown. For each line
item in the table the  total of the  consumer  and  aviation  segments'  amounts
equals the amount in the consolidated statements of income data included in Item
6.




                                                                      Fiscal Years Ended
                                           --------------------------------------------------------------------------
                                           December 27, 2003        December 28, 2002       December 29, 2001
                                            Consumer     Aviation    Consumer    Aviation     Consumer    Aviation

                                                                                          
Net sales                                     $452,437     $120,552    $350,674    $114,470     $263,358    $105,761
Cost of goods sold                             199,284       43,164     166,130      43,958      130,836      40,124
                                           --------------------------------------------------------------------------

Gross profit                                   253,153       77,388     184,544      70,512      132,522      65,637
Operating expenses:
     Selling, general and administrative        47,113       12,722      35,114      10,339       29,018       9,691
     Research and development                   22,195       21,511      18,863      13,300       18,197       9,967
                                           --------------------------------------------------------------------------

Total operating expenses                        69,308       34,233      53,977      23,639       47,215      19,658
                                           --------------------------------------------------------------------------

Operating income                               183,845       43,155     130,567      46,873       85,307      45,979
Other income / (loss), net                      (1,144)          87       4,292       1,002       17,204       3,545
                                           --------------------------------------------------------------------------

Income before income taxes                    $182,701      $43,242    $134,859     $47,875     $102,511     $49,524

- ---------------------------------------------------------------------------------------------------------------------





Comparison of Fiscal Years Ended December 27, 2003 and December 28, 2002

Net Sales



                      ------------------------------------------------------------------------------------------------------
                                      2003                               2002                         Year over Year
                      ------------------------------------------------------------------------------------------------------
                                              % of                                % of
                          Net Sales         Net Sales         Net Sales        Net Sales        $ change        % change
                      -------------------------------------------------------------------------------------------------------

                                                                                                
Consumer                       $452,437             79.0%          $350,674            75.4%        $101,763      29.0%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                        120,552             21.0%           114,470            24.6%           6,082      5.3%
- -----------------------------------------------------------------------------------------------------------------------------
Total                          $572,989            100.0%          $465,144           100.0%        $107,845      23.2%
- -----------------------------------------------------------------------------------------------------------------------------



     The increase in total net sales during fiscal 2003 was primarily due to the
introduction  of 16 new products and overall  demand for our consumer  products.
Total consumer and aviation units sold increased 33.0% to 2,066,000 in 2003 from
1,557,000 in 2002. In general,  management  believes that continuous  innovation
and the introduction of new products are essential for future revenue growth.

     The  Company's  revenues are  seasonal,  with the fiscal  second and fourth
quarter revenues  meaningfully  higher than the first and third fiscal quarters.
The revenue increase in second quarter is primarily attributable to the onset of
the marine  selling  season and  secondarily  Father's  Day  purchases,  and the
revenue  increase  in  the  fourth  quarter  is  primarily  attributable  to the
traditional  holiday selling season.  Revenues can also be impacted in any given
quarter by the timing of new product introductions.

     The  increase  in  net  sales  to  consumers   was  primarily  due  to  the
introduction  of 16 new consumer  products  and overall  demand for our consumer
products  as total units sold were up 33%.  It is  management's  belief that the
continued demand for the Company's  consumer products is due to the emergence of
the GPS market in  general,  and overall  increased  consumer  awareness  of the
capabilities and applications of GPS.

     The  increase  in  aviation  sales for  fiscal  2003 was  primarily  due to
increased  sales from panel mount  products  sold into the  retrofit  market and
sales from UPS Aviation  Technologies (now Garmin AT, Inc.),  which was acquired
during the third quarter of 2003.  While Temporary Flight  Restrictions  (TFR's)
continue to impact general  aviation,  the flying community is adapting to these
changes  and  returning  to the skies in greater  numbers.  Should  the  Federal
Aviation  Administration  (FAA) impose more  restrictions,  or elect to shutdown
U.S. airspace in the future,  these factors could have a material adverse effect
on our business.

                                       21


Gross Profit



                      ------------------------------------------------------------------------------------------------------
                                      2003                                2002                         Year over Year
                      -------------------------------------------------------------------------------------------------------
                            Gross             % of              Gross             % of
                           Profit           Net Sales          Profit          Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------

                                                                                                
Consumer                       $253,153             56.0%          $184,544            52.6%         $68,609      37.2%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         77,388             64.2%            70,512            61.6%           6,876      9.8%
- -----------------------------------------------------------------------------------------------------------------------------
Total                          $330,541             57.7%          $255,056            54.8%         $75,485      29.6%
- -----------------------------------------------------------------------------------------------------------------------------



     The increase in gross profit is primarily attributed to the introduction of
16 new products and overall demand for our consumer products. The improvement in
gross  margin  was  primarily  due to the  introduction  of  new  higher  margin
products,  improved  manufacturing  efficiencies  on many  of the  new  products
introduced  throughout the year, and reductions of certain  material costs early
in the fiscal year. The Company  experienced  upward pricing pressure on certain
raw materials components in the latter part of 2003. It is unclear at this point
if this pricing pressure will abate or continue in 2004.

     The  increase in  consumer  gross  margin is  primarily  attributed  to the
introduction  of 16 new consumer  products  and overall  demand for our consumer
products.

     The increase in aviation gross profit is primarily due to improved  product
mix within our OEM and retrofit products partially offset by certain lower gross
profit  margin  products  as  a  result  of  the  acquisition  of  UPS  Aviation
Technologies.


Selling, General and Administrative Expenses




                      ------------------------------------------------------------------------------------------------------
                                     2003                                2002                        Year over Year
                      ------------------------------------------------------------------------------------------------------
                                                Selling,            % of            Selling,            % of
                        Gen. & Admin.       Net Sales       Gen. & Admin.      Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------

                                                                                                
Consumer                        $47,113             10.4%           $35,114            10.0%         $11,999      34.2%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         12,722             10.6%            10,339             9.0%           2,383      23.0%
- -----------------------------------------------------------------------------------------------------------------------------
Total                           $59,835             10.4%           $45,453             9.8%         $14,382      31.6%
- -----------------------------------------------------------------------------------------------------------------------------


     The  increase  in  expense  was  primarily  attributable  to  increases  in
employment  generally across the organization (net increase of approximately 300
non-engineering  employees),  significantly increased advertising costs (up 32%)
associated  primarily with consumer  products,  ORACLE  software  implementation
costs,  and  additional  staffing  in our  customer  call  center.  In the past,
selling,  general and  administrative  expenses  increased  at a lower rate than
revenues  due to  strong  demand  for newly  introduced  and  existing  consumer
products.  Management  expects that in spite of strong  demand for our products,
selling,  general  and  administrative  expenses  will  remain  flat or increase
slightly as a percentage of sales during fiscal 2004.


Research and Development Expenses



                      -----------------------------------------------------------------------------------------------------
                                      2003                                2002                        Year over Year
                      -----------------------------------------------------------------------------------------------------
                          Research            % of            Research            % of
                        & Development       Net Sales       & Development      Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------

                                                                                                
Consumer                        $22,195              4.9%           $18,863             5.4%          $3,332      17.7%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         21,511             17.8%            13,300            11.6%           8,211      61.7%
- -----------------------------------------------------------------------------------------------------------------------------
Total                           $43,706              7.6%           $32,163             6.9%         $11,543      35.9%
- -----------------------------------------------------------------------------------------------------------------------------


     The increase in research and development expense was primarily attributable
to the addition of 50 UPS Aviation  Technologies  engineering  associates to our
aviation  research and development team and the addition of 100 new engineers to
our research and development teams during fiscal 2003.  Management believes that
one of the key  strategic  initiatives  for  future  growth  and  success of the
Company is continuous innovation, development, and introduction of new products.

                                       22


Management  expects that its research and  development  expenses  will  increase
approximately  20% to 25% during fiscal 2004 on an absolute  dollar basis due to
the anticipated  introduction of  approximately 45 new products for fiscal 2004.
Management  expects to continue to invest in the research and development of new
products and technology in order to maintain the Company's competitive advantage
in the markets in which it competes.


Other Income (Expense)

                                        ------------------------------------
                                              2003              2002
- ----------------------------------------------------------------------------
Interest Income                                    $7,473            $6,466
- ----------------------------------------------------------------------------
Interest Expense                                     (534)           (1,329)
- ----------------------------------------------------------------------------
Foreign Currency Exhange                           (6,699)               11
- ----------------------------------------------------------------------------
Other                                              (1,297)              146
- ----------------------------------------------------------------------------
Total                                             ($1,057)           $5,294
- ----------------------------------------------------------------------------


     Other income (expense)  principally  consists of interest income,  interest
expense  and  foreign  currency  exchange  gains and  losses.  Other  income was
significantly  lower in fiscal  2003,  relative  to fiscal  year 2002,  with the
majority of this difference caused by foreign currency losses in 2003.  Interest
income for fiscal 2003  increased due to larger cash and  marketable  securities
balances during the year,  increasing the returns on the Company's cash and cash
equivalents.  Interest expense  decreased 60% for fiscal 2003 relative to fiscal
2002, due primarily to the  retirement of $20 million of  outstanding  long-term
debt during fiscal 2003.

     During fiscal 2003 the Company experienced foreign currency exchange losses
of $6.7 million, as the U.S. Dollar weakened versus the New Taiwan Dollar (34.05
NTD/USD) relative to the end of fiscal 2002 (34.90 NTD/USD).  During fiscal 2002
the  Company's  position  was neutral with regard to foreign  currency  exchange
gains and losses, and the U.S. Dollar was at approximately the same level at the
beginning of 2002 relative to the New Taiwan Dollar  ($35.17  NTD/USD) as it was
at the end of fiscal 2002 ($34.90 NTD/USD).


Income Tax Provision

     Income tax expense increased by $7.4 million, to $47.3 million,  for fiscal
year 2003 from  $39.9  million  for fiscal  year 2002 due to our higher  taxable
income. The effective tax rate was 20.9% for fiscal 2003 versus 21.9% for fiscal
2002.  The  decrease in tax rate is due  primarily  to  additional  tax benefits
received  from Taiwan as a result of our  continued  capital  investment  in our
manufacturing  facilities there. Management believes that the effective tax rate
for fiscal 2004 will be comparable to fiscal 2003. The actual effective tax rate
will be dependent upon the production volume and additional capital  investments
made during fiscal 2004.


Net Income

     As a result of the various factors noted above,  net income increased 25.1%
to $178.6  million  for fiscal year 2003  compared to $142.8  million for fiscal
year 2002.

                                       23


Comparison of Fiscal Years Ended December 28, 2002 and December 29, 2001

Net Sales



                      -------------------------------------------------------------------------------------------------------
                            2002                                2001                                 Year over Year
                      -------------------------------------------------------------------------------------------------------
                                              % of                                % of
                          Net Sales         Net Sales         Net Sales        Net Sales        $ change        % change
                      -------------------------------------------------------------------------------------------------------

                                                                                                
Consumer                       $350,674             75.4%          $263,358            71.3%         $87,316      33.2%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                        114,470             24.6%           105,761            28.7%           8,709      8.2%
- -----------------------------------------------------------------------------------------------------------------------------
Total                          $465,144            100.0%          $369,119           100.0%         $96,025      26.0%
- -----------------------------------------------------------------------------------------------------------------------------



     The  increase  in net sales  during  fiscal 2002 was  primarily  due to the
introduction  of 22 new products and overall  demand for our consumer  products.
Total consumer and aviation units sold increased 17.0% to 1,557,000 in 2002 from
1,331,000 in 2001. In general,  management  believes that continuous  innovation
and the introduction of new products are essential for future revenue growth.

     The increase in consumer net sales was primarily due to the introduction of
18 new consumer  products and overall demand for our consumer  products as total
units sold were up 17.1%.  It is management's  belief that the continued  demand
for the Company's consumer products is due to the emergence of the GPS market in
general,  and overall  increased  consumer  awareness  of the  capabilities  and
applications of GPS.

     The increase in aviation net sales for fiscal 2002 was primarily due to the
introduction of four new products,  increased  penetration  into the OEM market,
and  significant  reductions  of the  restrictions  placed on  general  aviation
following the events of September 11, 2001. While Temporary Flight  Restrictions
(TFR's) continue to impact general aviation, the flying community is adapting to
these changes and returning to the skies in greater numbers.  Should the Federal
Aviation  Administration  (FAA) impose more  restrictions,  or elect to shutdown
U.S. airspace in the future,  these factors could have a material adverse effect
on our business.


Gross Profit



                      -------------------------------------------------------------------------------------------------------
                            2002                                2001                                 Year over Year
                      -------------------------------------------------------------------------------------------------------
                            Gross             % of              Gross             % of
                           Profit           Net Sales          Profit          Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                                
Consumer                       $184,544             52.6%          $132,522            50.3%         $52,022      39.3%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         70,512             61.6%            65,637            62.1%           4,875      7.4%
- -----------------------------------------------------------------------------------------------------------------------------
Total                          $255,056             54.8%          $198,159            53.7%         $56,897      28.7%
- -----------------------------------------------------------------------------------------------------------------------------


     The increase in gross profit is primarily attributed to the introduction of
22 new products and overall demand for our consumer products. The improvement in
gross  margin  was  primarily  due to the  introduction  of  new  higher  margin
products,  improved  manufacturing  efficiencies  on many  of the  new  products
introduced throughout the year, and a reduction of material costs.

     The increase in the consumer  segment gross profit is primarily  attributed
to the  introduction  of 18 new  consumer  products  and overall  demand for our
consumer products.

     The increase in the aviation  segment  gross profit is primarily due to the
increase in  revenues  associated  with the  introduction  of four new  aviation
products,  increased  penetration  into the OEM  market,  and a  return  to less
restricted airspace for general aviation aircraft.  The decrease in gross margin
as a percentage of net revenues for the aviation segment is primarily attributed
to product mix as we  experienced  a 19.4%  increase in lower margin panel mount
unit sales during 2002 when compared to 2001.

                                       24


Selling, General and Administrative Expenses




                      -------------------------------------------------------------------------------------------------------
                            2002                                2001                                 Year over Year
                      -------------------------------------------------------------------------------------------------------
                          Selling,            % of            Selling,            % of
                        Gen. & Admin.       Net Sales       Gen. & Admin.      Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                                
Consumer                        $35,114             10.0%           $29,018            11.0%          $6,096      21.0%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         10,339              9.0%             9,691             9.2%             648      6.7%
- -----------------------------------------------------------------------------------------------------------------------------
Total                           $45,453              9.8%           $38,709            10.5%          $6,744      17.4%
- -----------------------------------------------------------------------------------------------------------------------------




     The increase in selling,  general, and administrative expense was primarily
attributable to increases in employment  generally across the organization  (net
increase of 146 employees),  increased  advertising  costs (up 13.3%) associated
primarily with new product  releases,  additional  staffing in the customer call
center,  and  increases in insurance  premiums.  Overall,  selling,  general and
administrative  expenses  increased at a lower rate than  revenues due to strong
demand for newly introduced and existing consumer products.


Research and Development Expenses




                     --------------------------------------------------------------------------------------------------------
                            2002                                2001                                 Year over Year
                     --------------------------------------------------------------------------------------------------------
                          Research            % of            Research            % of
                        & Development       Net Sales       & Development      Net Sales        $ change        % change
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                                
Consumer                        $18,863              5.4%           $18,197             6.9%            $666      3.7%
- -----------------------------------------------------------------------------------------------------------------------------
Aviation                         13,300             11.6%             9,967             9.4%           3,333      33.4%
- -----------------------------------------------------------------------------------------------------------------------------
Total                           $32,163              6.9%           $28,164             7.6%          $3,999      14.2%
- -----------------------------------------------------------------------------------------------------------------------------


     The increase in research and  development  expense  during  fiscal 2002 was
primarily  attributable to the development and  introduction of 22 new products,
and the addition of 67 new engineers to our staff.  Management believes that one
of the key strategic initiatives for future growth and success of the Company is
continuous innovation, development, and introduction of new products.


Other Income (Expense)

                                        ------------------------------------
                                              2002              2001
- ----------------------------------------------------------------------------
Interest Income                                    $6,466           $11,164
- ----------------------------------------------------------------------------
Interest Expense                                   (1,329)           (2,174)
- ----------------------------------------------------------------------------
Foreign Currency Exhange                               11            11,573
- ----------------------------------------------------------------------------
Other                                                 146               186
- ----------------------------------------------------------------------------
Total                                              $5,294           $20,749
- ----------------------------------------------------------------------------

     The majority of the difference  between 2001 and 2002 was caused by foreign
currency gains in 2001.  Interest  income for fiscal 2002 decreased  relative to
fiscal  2001 due to the fall in  interest  rates,  reducing  the  returns on the
Company's cash and cash equivalents. Interest expense decreased from fiscal 2001
to fiscal 2002 due primarily to the reduction of debt and a lower  interest rate
environment during fiscal 2002.

     During  fiscal  2002 the  Company's  position  was  neutral  with regard to
foreign  currency  exchange  gains  and  losses,  as  the  U.S.  Dollar  was  at
approximately the same level at the beginning of 2002 relative to the New Taiwan
Dollar (35.17 NTD/USD) as it was at the end of fiscal 2002 (34.90  NTD/USD).  In
fiscal 2001 there was an $11.6 million gain due to the  significantly  increased
strength of the U.S.  Dollar compared to the New Taiwan Dollar during 2001, when
the exchange  rate  increased  to 35.17  NTD/USD at December 29, 2001 from 33.01
NTD/USD at December 30, 2000.


                                       25


Income Tax Provision

     Income tax expense increased by $1.3 million, to $39.9 million,  for fiscal
year 2002 from  $38.6  million  for fiscal  year 2001 due to our higher  taxable
income. The effective tax rate was 21.9% for fiscal 2002 versus 25.4% for fiscal
2001.  The  decrease in tax rate is due  primarily  to  additional  tax benefits
received  from Taiwan as a result of our  continued  capital  investment  in our
manufacturing facilities there.


Net Income

     As a result of the above,  net income increased 25.9% to $142.8 million for
fiscal year 2002 compared to $113.4 million for fiscal year 2001.


Liquidity and Capital Resources

     Net cash generated by operations was $175.2 million,  $175.4  million,  and
$130.0 for fiscal years 2003,  2002, and 2001,  respectively.  We operate with a
customer  oriented  approach and seek to maintain  sufficient  inventory to meet
customer  demand.  Because we desire to respond  quickly  to our  customers  and
minimize order fulfillment time, our inventory levels are generally  substantial
enough to meet most demand. We also attempt to carry sufficient inventory levels
of key components so that potential supplier shortages have as minimal an impact
as possible on our ability to deliver our finished  products.  We  significantly
increased  our raw  material  inventories  in late 2003 in  anticipation  of new
product  releases  in the  first  half of 2004  and  also as a  response  to the
significant  increase in the lead-time of high dollar  components  such as LCD's
and flash memory.  In addition,  we prefer to have sufficient  finished goods on
hand to meet  anticipated  demand for our  products.  Finished  goods  inventory
levels also continued to grow  gradually as a function of our growing sales.  We
were able to reduce  inventory  levels  during  fiscal year 2002 by $3.6 million
when  compared to fiscal year end 2001,  without  impairing  our ability to meet
customer  demand,  by effectively  managing the  introduction of 22 new products
during the year. We expect that inventory  levels may decrease during the latter
half of  fiscal  2004 as raw  materials  inventories  are  consumed  during  the
manufacture and delivery of new products in the first half of 2004.

     Capital  expenditures  in 2003 totaled $32.8 million,  an increase of $20.4
million over fiscal 2002.  This increase in 2003 was primarily  attributable  to
the  initiation  of expansion of our Olathe,  Kansas  facility ($17 million) and
maintenance capital expenditures ($3.4 million). During fiscal 2002, our capital
expenditures  totaled  $12.4  million.  The  expenditures  in  fiscal  2002 were
primarily related to general corporate  purposes ($9.8 million) and the addition
of  surface-mount  production  equipment  in both the Olathe,  Kansas and Shijr,
Taiwan facilities ($2.6 million).

     We have budgeted  approximately $60 million of capital  expenditures during
fiscal  2004 to include  construction  costs  related to the  completion  of our
facilities expansion in Olathe, Kansas and purchases of production machinery and
equipment to expand capacity in the Shijr, Taiwan facility.

     In addition to capital  expenditures,  in 2003 cash flow used in  investing
relates to the $38.2 million acquisition of UPS Aviation  Technologies  (renamed
Garmin  AT),  the  purchase  of  fixed  income  securities  associated  with the
investment  of our on-hand  cash  balances  and  approximately  $2.3  million of
intangible assets. The Company's average return on its investments during fiscal
2003 was  approximately  1.5%. In 2002, cash flow used in investing  principally
related  to  the  purchase  of  fixed  income  securities  associated  with  the
investment of our on-hand cash balances and approximately  $13.5 million related
to the  purchase  of  licenses,  of which  $11.5  million  consists  of  prepaid
royalties  under  our  license  agreement  with  PalmSource,  Inc.  for the Palm
Operating  System. It is management's goal to invest the on-hand cash consistent
with the Company's  investment  policy,  which has been approved by the 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 maximum  safety.  The Company's  average return on its investments
during fiscal year 2002 was approximately 1.6%.

     Cash flow used in financing activities during 2003 relates primarily to the
payment  of a  dividend  ($54.0  million),  and  reduction  of our  debt  ($20.0
million).  The Company  retired  approximately  $20.0 million of long-term  debt
during fiscal 2003, which  represented the remainder of an outstanding  issue of


                                       26


industrial revenue bonds. The employee stock option exercises and employee stock
purchase plan purchases  generated a $4.3 million  source of cash in 2003.  Cash
flow used in financing activities during 2002 relates primarily to the reduction
of our debt. The Company  retired  approximately  $12.2 million of its long-term
debt during  fiscal 2002,  consisting  in good part of an  outstanding  issue of
industrial  revenue  bonds.  The employee  stock  purchase plan and stock option
exercises were a $2.1 million  source of cash in 2002.  During 2001, the Company
repurchased  595,200  shares of its  common  shares  under its stock  repurchase
program that was  approved by the Board of  Directors on September  24, 2001 and
expired on December 31, 2002.

     We currently use cash flow from operations to fund our capital expenditures
and to support  our  working  capital  requirements.  We expect that future cash
requirements  will  principally be for capital  expenditures and working capital
requirements.

     Cash dividends paid to shareholders were $54.0 million,  $0.0 million, $0.0
million,  and $29.0  million  during  fiscal  years 2003,  2002,  2001 and 2000,
respectively.  Included in cash dividends for fiscal 2000 was a special one-time
dividend  of  $17.4  million  that  was  paid  in  order  to  provide  funds  to
shareholders  to pay  withholding  taxes and stock transfer taxes related to the
reorganization of Garmin Corporation.

     We believe that our existing  cash  balances and cash flow from  operations
will be sufficient to meet our projected capital  expenditures,  working capital
and other cash requirements at least through the end of fiscal 2004.


Contractual Obligations and Commercial Commitments

     On March 23, 2000,  Garmin  International,  Inc.  completed a $20.0 million
20-year  Taxable  Industrial  Revenue Bond  issuance  (the "2000 Bonds") for the
expansion  of its Olathe,  Kansas  facility.  During May of fiscal  2003,  these
outstanding  bonds were  retired by Garmin  International,  Inc.  for a total of
$20.0 million.

     On January 1, 1995,  Garmin  International,  Inc.  completed a $9.5 million
30-year Tax-Exempt  Industrial Revenue Bond issuance for the construction of its
new corporate  headquarters  located in Olathe,  Kansas.  Upon completion of the
project in 1996,  Garmin  International  retired  bonds  totaling  $0.1 million.
During May of fiscal 2002, the remainder of the  outstanding  bonds were retired
by Garmin International, Inc. for a total of $9.4 million.

     We  utilize  interest  rate  swap  agreements  from  time to time to manage
interest rate exposure.  The principal  objective of such  financial  derivative
contracts is to moderate the effect of fluctuations in interest rates.  We, as a
matter of policy,  do not  speculate in financial  markets and  therefore do not
hold these contracts for trading purposes.

     Future payments due from the Company,  as of December 27, 2003,  aggregated
by type of contractual obligation, are:




                                                   Payments due by period
                                 -----------------------------------------------------------
                                              Less than                          More than
Contractual Obligations             Total      1 year     1-3 years  3-5 years    5 years
- --------------------------------------------------------------------------------------------
                                                                   
Long-Term Debt                        -           -           -          -           -
Capital Lease Obligations             -           -           -          -           -
Operating Leases                   $15,189      $107        $602        $602      $13,878
Purchase Obligations               $60,013     $60,013       $0          $0         $0
Other Long-Term Liabilities           -           -           -          -           -
                                 -----------------------------------------------------------
         Total                     $75,202     $60,120      $602        $602      $13,878




     Operating Leases  describes a lease  obligation  associated with the Garmin
Europe  facility in the United Kingdom and a lease  obligation  associated  with
Garmin AT. Purchase  obligations are the aggregate of those purchase orders that
were  outstanding on December 27, 2003;  these  obligations are created and then
paid off within 3 months during the normal course of our manufacturing business.


                                       27


Off-Balance Sheet Arrangements

     We do not have any off-balance sheet arrangements.


Recent Accounting Pronouncements

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure." This statement requires all entities
with  stock-based  employee  compensation  arrangements  to  provide  additional
disclosures in their summary of significant  accounting policies note. Since the
Company uses the intrinsic value method of Accounting  Principles  Board ("APB")
Opinion No. 25,  "Accounting  for Stock  Issued to  Employees",  the  accounting
policies  note  includes  a tabular  presentation  of pro forma net  income  and
earnings  per share  using the fair value  method  prescribed  by SFAS No.  123,
"Accounting for Stock-Based  Compensation".  Also, SFAS No. 148 permits entities
changing to the fair value method of accounting for employee stock  compensation
to choose from one of three transition  methods -- the prospective  method,  the
modified  prospective method, or the retroactive  restatement  method.  Finally,
SFAS No. 148 requires the Company to make  interim-period  pro forma disclosures
if stock-based compensation is accounted for under the intrinsic value method in
any period  presented.  The  expanded  annual  disclosure  requirements  and the
transition provisions were effective for the Company's fiscal year 2002. The new
interim period disclosures were required in the Company's  financial  statements
for  interim  periods  beginning  in the  first  quarter  of fiscal  2003.  This
statement did not have a material impact on the Company's  results of operations
or financial condition.

     In July  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement   Obligations."  The  objective  of  this  statement  is  to  provide
accounting  guidance for legal  obligations  associated  with the  retirement of
long-lived  assets by  requiring  the fair  value of a  liability  for the asset
retirement  obligation  to be  recognized in the period in which it is incurred.
When the liability is initially  recognized,  the asset  retirement costs should
also be capitalized by increasing the carrying amount of the related  long-lived
asset.  The  liability is then accreted to its present value each period and the
capitalized  costs are depreciated over the useful life of the associated asset.
This statement is effective for fiscal years  beginning after June 15, 2002, and
did not have a material impact on our financial statements.

     At its November 2002  meeting,  the EITF reached a consensus on Issue 00-21
"Accounting for Revenue Arrangements with Multiple Deliverable",  which provides
a  model  to  be  used,  in  the  context  of  a  multiple-deliverable   revenue
arrangement,  in determining  (a) how the  arrangement  consideration  should be
measured,  (b) whether the arrangement  should be divided into separate units of
accounting,  and,  if so,  (c)  how  the  arrangement  consideration  should  be
allocated  to the separate  units of  accounting.  Issue 00-21 is effective  for
revenue  arrangements  entered  into  in  fiscal  periods  (annual  or  interim)
beginning after June 15, 2003, with earlier adoption  permitted.  Companies also
are  permitted to adopt Issue 00-21 by reporting  the change in  accounting as a
cumulative effect adjustment in accordance with APB Opinion No. 20,  "Accounting
Changes",  and FASB Statement No. 3,  "Reporting  Accounting  Changes in Interim
Financial  Statements".  The  adoption of this  standard did not have a material
impact on the Company's results of operations or financial condition.

     In January 2003,  the Financial  Accounting  Standards  Board (FASB) issued
Interpretation   No.  46,   "Consolidation  of  Variable   Interest   Entities."
Interpretation  No. 46 requires that the assets,  liabilities and results of the
activity  of  variable  interest  entities be  consolidated  into the  financial
statements  of  the  Company  that  has  the  controlling   financial  interest.
Interpretation  No. 46 also  provides the framework  for  determining  whether a
variable  interest  entity should be consolidated  based on voting  interests or
significant  financial support provided to it. Interpretation No. 46 will become
effective  for the  Company on March 31,  2004 for  variable  interest  entities
created  prior  to  December  31,  2003.  We  do  not  expect  the  adoption  of
Interpretation  No. 46 to have a material impact on our results of operations or
financial condition.


Company-Specific Trends and Risks

     You should  carefully  consider  the risks  described  below  regarding  an
investment in our common shares. The risks described below are not the only ones

                                       28


facing our company. Additional risks and uncertainties not presently known to us
or that we  currently  believe to be  immaterial  may also  impair our  business
operations.  If  any of the  following  risks  occur,  our  business,  financial
condition or operating results could be materially adversely affected.


Risks Related to the Company

Our Global Positioning System products depend upon satellites  maintained by the
United States Department of Defense. If a significant number of these satellites
become  inoperable,  unavailable  or are not  replaced or if the policies of the
United States  government for the use of the Global  Positioning  System without
charge are changed or if there is interference  with Global  Positioning  System
signals, our business will suffer.

     The  Global  Positioning   System  is  a  satellite-based   navigation  and
positioning  system  consisting of a constellation of orbiting  satellites.  The
satellites and their ground  control and monitoring  stations are maintained and
operated by the United States  Department of Defense.  The Department of Defense
does not  currently  charge  users for access to the  satellite  signals.  These
satellites  and their  ground  support  systems are complex  electronic  systems
subject to  electronic  and  mechanical  failures  and  possible  sabotage.  The
satellites were  originally  designed to have lives of 7.5 years and are subject
to damage by the hostile space  environment in which they operate.  However,  of
the current deployment of satellites in place, some have been operating for more
than 13 years.

     If  a  significant   number  of  satellites  were  to  become   inoperable,
unavailable  or are not  replaced,  it would  impair the current  utility of our
Global  Positioning  System  products  and the growth of current and  additional
market  opportunities.  In  addition,  there can be no  assurance  that the U.S.
government  will remain  committed to the  operation and  maintenance  of Global
Positioning  System  satellites over a long period,  or that the policies of the
U.S.  government  that  provide  for the use of the  Global  Positioning  System
without charge and without accuracy  degradation will remain unchanged.  Because
of the increasing  commercial  applications  of the Global  Positioning  System,
other U.S.  government agencies may become involved in the administration or the
regulation of the use of Global Positioning System signals.

     European  governments  have  expressed  interest in building an independent
satellite  navigation  system  known  as  Galileo.   Depending  on  the  as  yet
undetermined  design and operation of this system,  it is possible that it could
cause interference with Global Positioning System signals.

     Any of the foregoing  factors could affect the willingness of buyers of our
products to select Global Positioning  System-based products instead of products
based on competing technologies.


A shut down of U.S. airspace would harm our business.

     On September  11,  2001,  terrorists  hijacked  and crashed four  passenger
aircraft  operated by commercial  air carriers,  resulting in major loss of life
and   property.   Following  the  terrorist   attacks,   the  Federal   Aviation
Administration ("FAA") ordered all aircraft operating in the U.S. to be grounded
for several  days. In addition to this shut down of U.S.  airspace,  the general
aviation   industry  was  further   impacted  by  the  additional   restrictions
implemented  by the FAA on those flights that fly utilizing  Visual Flight Rules
(VFR).  The FAA  restricted  VFR flight inside 30 enhanced Class B (a 20-25 mile
radius around the 30 largest  metropolitan areas in the USA) airspace areas. The
Aircraft Owners and Pilots  Association (AOPA) estimated that these restrictions
affected  approximately  41,800 general aviation  aircraft based at 282 airports
inside  the 30  enhanced  Class  B  airspace  areas.  The  AOPA  estimates  that
approximately  90% of all general  aviation  flights are conducted VFR, and that
only 15% of general  aviation  pilots are  current to fly  utilizing  Instrument
Flight Rules (IFR).

     The shut down of U.S. airspace following  September 11, 2001 caused reduced
sales of our  general  aviation  products  and  delays  in the  shipment  of our
products  manufactured in our Taiwan manufacturing  facility to our distribution
facility in Olathe,  Kansas,  thereby adversely  affecting our ability to supply
new and existing products to our dealers and distributors.

     Any future shut down of U.S.  airspace or  imposition  of  restrictions  on
general  aviation  could  have a material  adverse  effect on our  business  and
financial results.

                                       29



Any reallocation of radio frequency  spectrum could cause  interference with the
reception of Global Positioning System signals. This interference could harm our
business.

     Our Global  Positioning  System  technology  is dependent on the use of the
Standard  Positioning  Service (SPS)  provided by the U.S.  Government's  Global
Positioning System  satellites.  The Global Positioning System operates in radio
frequency  bands that are  globally  allocated  for radio  navigation  satellite
services.   The  assignment  of  spectrum  is  controlled  by  an  international
organization known as the International  Telecommunications  Union ("ITU").  The
Federal  Communications  Commission ("FCC") is responsible for the assignment of
spectrum for  non-government  use in the United  States in  accordance  with ITU
regulations.  Any ITU or FCC reallocation of radio frequency spectrum, including
frequency band  segmentation  or sharing of spectrum,  could cause  interference
with the reception of Global  Positioning  System signals and may materially and
adversely  affect the utility and  reliability of our products,  which would, in
turn,  have a material  adverse  effect on our operating  results.  In addition,
emissions  from  mobile  satellite  service  and other  equipment  operating  in
adjacent  frequency  bands or inband may  materially  and  adversely  affect the
utility  and  reliability  of our  products,  which  could  result in a material
adverse effect on our operating results.


Ultra-Wideband  radio  devices  could cause  interference  with the reception of
Global  Positioning  System  signals if the FCC were to change  its rules.  This
interference could harm our business.

     On February 13, 2003,  the FCC adopted a Memorandum  Opinion and Order (the
"Order")  that  allows a limited  number of  Ultra-Wideband  ("UWB")  devices to
operate on a licensed basis in the frequency band used by the Global Positioning
System. The Order limits these devices to use by qualified  emergency  officials
at emission  limits  that  protect the Global  Positioning  System.  The FCC has
stated  that it plans to review the rules of  operation  for UWB  devices  again
within a twelve to eighteen  month period  following the date of adoption of the
Order.  If the FCC were to issue a further  rule  authorizing  operation  of UWB
devices in the frequency  band used by the Global  Positioning  System at higher
power  levels  than  those  set  out  in  the  Order  or  otherwise  change  the
definitional  or  operational  characteristics  of permitted  UWB devices,  such
devices might cause interference with the reception of Global Positioning System
signals.  Such interference  could reduce demand for Global  Positioning  System
products  in the  future.  Any  resulting  change in market  demand  for  Global
Positioning  System  products  could  have  a  material  adverse  effect  on our
financial results.


If we are not successful in the continued  development,  introduction  or timely
manufacture of new products, demand for our products could decrease.

     We expect that a significant portion of our future revenue will continue to
be derived from sales of newly introduced products.  The market for our products
is characterized by rapidly changing technology, evolving industry standards and
changes in  customer  needs.  If we fail to modify or improve  our  products  in
response to changes in technology,  industry  standards or customer  needs,  our
products could rapidly become less competitive or obsolete.  We must continue to
make significant investments in research and development in order to continue to
develop new products,  enhance existing  products and achieve market  acceptance
for such products.  However,  there can be no assurance that  development  stage
products  will  be  successfully  completed  or,  if  developed,   will  achieve
significant customer acceptance.

     If we are unable to  successfully  develop and  introduce  competitive  new
products,  and enhance our existing  products,  our future results of operations
would be adversely  affected.  Our pursuit of necessary  technology  may require
substantial time and expense. We may need to license new technologies to respond
to technological change. These licenses may not be available to us on terms that
we can accept or may  materially  change the gross  profits  that we are able to
obtain on our  products.  We may not  succeed in  adapting  our  products to new
technologies  as  they  emerge.  Development  and  manufacturing  schedules  for
technology products are difficult to predict, and there can be no assurance that
we will achieve timely initial  customer  shipments of new products.  The timely
availability  of these products in volume and their  acceptance by customers are
important  to our  future  success.  We have  previously  experienced  delays in
shipping  certain of our products and any future delays,  whether due to product

                                       30


development delays,  manufacturing delays, lack of market acceptance,  delays in
regulatory approval,  or otherwise,  could have a material adverse effect on our
results of operations.


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

     Historically,  we have  experienced  steady  increases  in  demand  for our
products  (although  we did  experience  a decline  in demand  for our  aviation
products in 2001 due to declining economic  conditions and the shut down of U.S.
airspace as a result of the  terrorist  attacks that  occurred on September  11,
2001)  and we have  generally  been  able to  increase  production  to meet that
demand. However, the demand for our products depends on many factors and will be
difficult to forecast.  We expect that it will become more difficult to forecast
demand as we introduce and support  multiple  products and as competition in the
market for our products intensifies.  Significant unanticipated  fluctuations in
demand could cause the following problems in our operations:

         o If demand increases beyond what we forecast, we would have to rapidly
           increase production. We would depend on suppliers to provide
           additional volumes of components and those suppliers might not be
           able to increase production rapidly enough to meet unexpected demand.

         o Rapid increases in production levels to meet unanticipated demand
           could result in higher costs for manufacturing and supply of
           components and other expenses. These higher costs could lower our
           profit margins. Further, if production is increased rapidly,
           manufacturing quality could decline, which may also lower our
           margins.

         o If forecasted demand does not develop, we could have excess
           production resulting in higher inventories of finished products and
           components, which would use cash and could lead to write-offs of some
           or all of the excess inventories. Lower than forecasted demand could
           also result in excess manufacturing capacity at our facilities, which
           could result in lower margins.


We may become subject to significant product liability costs.

     If our aviation products malfunction or contain errors or defects, airplane
collisions or crashes could occur resulting in property damage,  personal injury
or death.  Malfunctions or errors or defects in our marine navigational products
could cause boats to run aground or cause  other  wreckage,  personal  injury or
death.  If any of  these  events  occurs,  we could be  subject  to  significant
liability for personal injury and property damage. We maintain insurance against
accident-related  risks  involving  our  products.  However,  there  can  be  no
assurance that such  insurance  would be sufficient to cover the cost of damages
to others or that such insurance  will continue to be available at  commercially
reasonable  rates.  If we are unable to maintain  sufficient  insurance to cover
product liability costs, our business could be harmed.


We  depend on our  suppliers,  some of which are the sole  source  for  specific
components,  and our production would be seriously harmed if these suppliers are
not able to meet our demand and alternative sources are not available, or if the
costs of components rise.

     We are dependent on third party  suppliers for various  components  used in
our current  products.  Some of the components  that we procure from third party
suppliers include semiconductors and  electroluminescent  panels, liquid crystal
displays,  memory chips and microprocessors.  The cost, quality and availability
of  components  are  essential  to the  successful  production  and  sale of our
products.  Some  components  we use are  from  sole  source  suppliers.  Certain
application-specific  integrated circuits  incorporating our proprietary designs
are manufactured for us by sole source suppliers. Alternative sources may not be
currently available for these sole source components.

     In  the  past,  we  have  experienced  shortages,   particularly  involving
components  that are also used in cellular  phones.  In  addition,  if there are
shortages in supply of  components,  the costs of such  components  may rise. If
suppliers are unable to meet our demand for  components on a timely basis and if

                                       31


we are unable to obtain an alternative source or if the price of the alternative
source is  prohibitive,  or if the costs of  components  rise,  our  ability  to
maintain timely and cost-effective production of our products would be seriously
harmed.

     We license mapping data for use in our products from various sources. There
are only a limited  number of suppliers  of mapping  data for each  geographical
region. If we are unable to continue  licensing such mapping data and are unable
to obtain an alternative  source,  or if the price of the alternative  source is
prohibitive, our ability to supply mapping data for use in our products would be
seriously harmed.


We rely on  independent  dealers  and  distributors  to sell our  products,  and
disruption to these channels would harm our business.

     Because we sell a majority  of our  products  to  independent  dealers  and
distributors,  we are subject to many risks,  including  risks  related to their
inventory  levels and support for our products.  In particular,  our dealers and
distributors  maintain  significant levels of our products in their inventories.
If dealers and  distributors  attempt to reduce  their levels of inventory or if
they do not maintain  sufficient levels to meet customer demand, our sales could
be negatively impacted.

     Our dealers and distributors also sell products offered by our competitors.
If our  competitors  offer our dealers and  distributors  more favorable  terms,
those  dealers  and  distributors  may  de-emphasize  or  decline  to carry  our
products.  In the future,  we may not be able to retain or attract a  sufficient
number of  qualified  dealers  and  distributors.  If we are unable to  maintain
successful  relationships  with  dealers  and  distributors  or  to  expand  our
distribution channels, our business will suffer.


Failure to manage our growth and expansion  effectively  could adversely  impact
our business.

     Our ability to  successfully  offer our products and implement our business
plan in a rapidly evolving market requires an effective  planning and management
process.  We continue to increase the scope of our operations  domestically  and
internationally and have grown our shipments and headcount  substantially.  This
growth has placed, and our anticipated growth in future operations will continue
to place, a significant strain on our management systems and resources.


Our  business  may  suffer  if we are not  able to hire  and  retain  sufficient
qualified personnel or if we lose our key personnel.

     Our future success depends partly on the continued  contribution of our key
executive,  engineering,  sales,  marketing,  manufacturing  and  administrative
personnel.  We currently do not have  employment  agreements with any of our key
executive  officers.  We do not have key man  life  insurance  on any of our key
executive  officers and do not currently  intend to obtain such  insurance.  The
loss of the  services  of any of our  senior  level  management,  or  other  key
employees,  could  harm our  business.  Recruiting  and  retaining  the  skilled
personnel  we require to maintain  our market  position  may be  difficult.  For
example,  in some recent years there has been a nationwide shortage of qualified
electrical  engineers and software  engineers who are necessary for us to design
and develop new products and  therefore,  it has sometimes  been  challenging to
recruit such personnel.  If we fail to hire and retain qualified  employees,  we
may not be able to maintain and expand our business.


Our sales and gross margins for our products may fluctuate or erode.

     Our sales and gross margins for our products may  fluctuate  from period to
period due to a number of factors,  including product mix,  competition and unit
volumes. In particular, the average selling prices of a specific product tend to
decrease over that product's life. To offset such  decreases,  we intend to rely
primarily on obtaining yield  improvements and corresponding  cost reductions in
the  manufacture  of existing  products and on  introducing  new  products  that
incorporate  advanced  features  and  therefore  can be sold at  higher  average
selling  prices.  However,  there  can be no  assurance  that we will be able to
obtain any such yield  improvements or cost reductions or introduce any such new
products in the future.  To the extent that such cost reductions and new product

                                       32


introductions do not occur in a timely manner or our customers'  products do not
achieve  market  acceptance,  our business,  financial  condition and results of
operations could be materially  adversely affected.  As we introduce new product
lines that serve personal  digital  assistant  ("PDA"),  and original  equipment
manufacturer  automotive  and sensor  board  applications,  we may  experience a
decline in our overall gross margins from sales of these potentially high volume
but low margin product lines.


Our quarterly operating results are subject to fluctuations and seasonality.

     Our  operating  results  are  difficult  to predict.  Our future  quarterly
operating results may fluctuate significantly.  If this occurs, the price of our
stock would likely decline. As we expand our operations, our operating expenses,
particularly  our sales,  marketing  and research  and  development  costs,  may
increase as a percentage of our sales. If revenues decrease and we are unable to
reduce those costs rapidly, our operating results would be negatively affected.

     Historically,  our revenues have usually been weaker in the first and third
quarters of each fiscal  year and have,  from time to time,  been lower than the
preceding quarter. Our devices are highly consumer-oriented, and consumer buying
is  traditionally  lower in these  quarters.  Sales of certain  of our  consumer
products  tend to be  higher  in our  second  fiscal  quarter  due to  increased
consumer  spending for such products during the recreational  marine and fishing
season.  Sales of certain of our consumer products also tend to be higher in our
fourth fiscal quarter due to increased  consumer spending patterns on electronic
devices  during the  holiday  season.  In  addition,  we attempt to time our new
product  releases to coincide with relatively  higher  consumer  spending in the
second  and  fourth  fiscal  quarters,   which  contributes  to  these  seasonal
variations.


Our quarterly financial statements will reflect fluctuations in foreign currency
translation.

     Our  Taiwan  subsidiary  holds,  and  is  expected  to  continue  to  hold,
significant cash, cash equivalents, and marketable securities.  Because the U.S.
Dollar is the primary  currency for our  business and in order to  substantially
reduce the economic  consequence  of any  variation in the exchange rate for the
U.S. Dollar and the New Taiwan Dollar on these assets,  management  expects that
the Taiwan subsidiary will continue to hold the majority of these assets in U.S.
Dollar or U.S. Dollar denominated instruments.  Nonetheless,  U.S. GAAP requires
the Company at the end of each  accounting  period to translate  into New Taiwan
dollars all such U.S. dollar  denominated  assets held by our Taiwan subsidiary.
This  translation  is required  because the New Taiwan Dollar is the  functional
currency of the subsidiary. This U.S. GAAP-mandated translation will cause us to
recognize gain or loss on our financial statements as the New Taiwan dollar/U.S.
dollar  exchange  rate varies.  Such gain or loss will create  variations in our
earnings per share. Because there is minimal cash impact caused by such exchange
rate  variations,  management will continue to focus on the Company's  operating
performance before the impact of the foreign currency translation.


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

     The  markets  for  our  products  are  highly  competitive  and  we  expect
competition  to  increase  in  the  future.   Many  of  our   competitors   have
significantly  greater financial,  technical and marketing resources than we do.
These  competitors  may be able  to  respond  more  rapidly  to new or  emerging
technologies  or  changes  in  customer  requirements.  They may also be able to
devote  greater  resources  to the  development,  promotion  and  sale of  their
products. Increased competition could result in price reductions, fewer customer
orders,  reduced  margins  and loss of market  share.  Our  failure  to  compete
successfully  against  current or future  competitors  could  seriously harm our
business, financial condition and results of operations.


Our intellectual property rights are important to our operations, and we could
suffer loss if they infringe upon other's rights or are infringed upon by
others.

     We rely on a  combination  of  patents,  copyrights,  trademarks  and trade
secrets,  confidentiality provisions and licensing arrangements to establish and
protect  our  proprietary  rights.  To this end,  we hold  rights to a number of

                                       33


patents and registered  trademarks and regularly file applications to attempt to
protect  our  rights in new  technology  and  trademarks.  However,  there is no
guarantee that our patent  applications will become issued patents,  or that our
trademark  applications will become  registered  trademarks.  Moreover,  even if
approved, our patents or trademarks may thereafter be successfully challenged by
others or otherwise  become  invalidated for a variety of reasons.  In addition,
the only  patents  we have  obtained  are U.S.  patents.  Thus,  any  patents or
trademarks  we  currently  have  or may  later  acquire  may  not  provide  us a
significant competitive advantage.

     Third parties may claim that we are infringing their intellectual  property
rights.  Such claims  could have a serious  adverse  effect on our  business and
financial condition.  From time to time we receive letters alleging infringement
of patents.  Litigation  concerning  patents or other  intellectual  property is
costly and time  consuming.  We may seek licenses  from such  parties,  but they
could refuse to grant us a license or demand commercially unreasonable terms. We
might not have sufficient  resources to pay for the licenses.  Such infringement
claims could also cause us to incur  substantial  liabilities  and to suspend or
permanently  cease  the  use  of  critical  technologies  or  processes  or  the
production or sale of major products.


Failure to obtain  required  certifications  of our  products on a timely  basis
could harm our business.

     We have certain  products,  especially  in our aviation  segment,  that are
subject to governmental and similar  certifications before they can be sold. For
example,  Federal Aviation  Administration ("FAA") certification is required for
all of our  aviation  products  that  are  intended  for  installation  in  type
certificated aircraft. To the extent required, certification is an expensive and
time  consuming  process  that  requires  significant  focus and  resources.  An
inability to obtain, or excessive delay in obtaining,  such certifications could
have an adverse effect on our ability to introduce new products and,  therefore,
our  operating  results.  In addition,  we cannot  assure you that our certified
products will not be decertified. Any such decertification could have an adverse
effect on our operating results.


Our business is subject to economic,  political and other risks  associated with
international sales and operations.

     Our  business  is  subject  to  risks   associated   with  doing   business
internationally.  We  estimate  that  approximately  29% of our net sales in the
fiscal  year  ended   December  27,  2003   represented   products   shipped  to
international destinations. Accordingly, our future results could be harmed by a
variety of international factors, including:

        o changes in foreign currency exchange rates;


        o changes in a specific country's or region's political or economic
          conditions, particularly in emerging markets;

        o trade protection measures and import or export licensing requirements;

        o potentially negative consequences from changes in tax laws;

        o difficulty in managing widespread sales and manufacturing operations;
          and

        o less effective protection of intellectual property.


We may experience  unique economic and political risks associated with companies
that operate in Taiwan.

     Relations  between Taiwan and the People's Republic of China, also referred
to as the PRC, and other factors affecting the political or economic  conditions
of Taiwan in the future  could  affect our business and the market price and the
liquidity  of our  shares.  Our  principal  manufacturing  facilities  where  we
manufacture all of our products, except our panel-mounted aviation products, are
located in Taiwan.

                                       34


     Taiwan  has a  unique  international  political  status.  The  PRC  asserts
sovereignty over all of China,  including Taiwan,  certain other islands and all
of mainland  China.  The PRC government does not recognize the legitimacy of the
Taiwan  government.  Although  significant  economic and cultural relations have
been  established  during  recent  years  between  Taiwan  and the PRC,  the PRC
government  has  indicated  that it may use military  force to gain control over
Taiwan in certain  circumstances,  such as the  declaration of  independence  by
Taiwan. Relations between Taiwan and the PRC have on occasion adversely affected
the  market  value of  Taiwanese  companies  and  could  negatively  affect  our
operations in Taiwan in the future.


There is uncertainty as to our shareholders'  ability to enforce certain foreign
civil liabilities in the Cayman Islands and Taiwan.

     We are a Cayman Islands company and a substantial portion of our assets are
located outside the United States,  particularly in Taiwan.  As a result, it may
be difficult for you to effect  service of process within the United States upon
us. In  addition,  there is  uncertainty  as to whether the courts of the Cayman
Islands or Taiwan would  recognize or enforce  judgments of United States courts
obtained  against  us  predicated  upon the civil  liability  provisions  of the
securities  laws of the United States or any state  thereof,  or be competent to
hear  original  actions  brought  in the  Cayman  Islands  or Taiwan  against us
predicated upon the securities laws of the United States or any state thereof.


Our shareholders may face difficulties in protecting their interests because we
are incorporated under Cayman Islands law.

     Our  corporate  affairs are  governed  by our  Memorandum  and  Articles of
Association  and by the Companies Law (2003  Revision) and the common law of the
Cayman   Islands.   The   rights   of  our   shareholders   and  the   fiduciary
responsibilities  of our directors  under Cayman  Islands law are not as clearly
established   as  under   statutes  or  judicial   precedent   in  existence  in
jurisdictions in the United States.  Therefore, our public shareholders may have
more  difficulty  in  protecting  their  interests in the face of actions by the
management, directors or our controlling shareholders than would shareholders of
a corporation  incorporated in a jurisdiction  in the United States,  due to the
comparatively less developed nature of Cayman Islands law in this area.


We may pursue strategic  acquisitions,  investments,  strategic  partnerships or
other  ventures,  and our  business  could be  materially  harmed  if we fail to
successfully identify, complete and integrate such transactions.

     We intend to evaluate  acquisition  opportunities and opportunities to make
investments in complementary businesses,  technologies, services or products, or
to enter into any strategic  partnerships with parties who can provide access to
those assets,  additional product or services  offerings or additional  industry
expertise.  In August  2003,  we acquired  UPS  Aviation  Technologies,  Inc. We
currently have no commitments to make any material  investments or acquisitions,
or to enter into strategic partnerships. We may not be able to identify suitable
acquisition,  investment  or  strategic  partnership  candidates,  or  if  we do
identify suitable candidates in the future, we may not be able to complete those
transactions on commercially favorable terms, or at all.

     Any future acquisition could result in difficulties  assimilating  acquired
operations and products and diversion of capital and management's attention away
from other business issues and opportunities.  Integration of acquired companies
may result in problems  related to integration  of technology and  inexperienced
management  teams.  In addition,  the key personnel of the acquired  company may
decide  not to work  for  us.  Our  management  has had  limited  experience  in
assimilating acquired organizations and products into our operations. We may not
successfully integrate any operations, personnel or products that we may acquire
in the future.  If we fail to  successfully  integrate  such  transactions,  our
business could be materially harmed.


                                       35


We have benefited in the past from Taiwan  government tax incentives  offered on
certain high technology capital investments that may not always be available.

     Our  effective  tax rate is lower  than the U.S.  Federal  statutory  rate,
because we have  benefited  from lower tax rates  since our  inception  and from
incentives  offered in Taiwan  related  to our high  technology  investments  in
Taiwan.  The loss of these tax benefits  could have a significant  effect on our
financial results in the future.


Changes in our United States federal income tax  classification or in applicable
tax law could result in adverse tax consequences to our shareholders.

     We do not believe that we (or any of our  non-United  States  subsidiaries)
are  currently  a  "foreign   personal  holding  company"  or  "passive  foreign
investment  company" for United States  federal  income tax  purposes.  We would
constitute a foreign personal holding company in any taxable year if (1) 60% (or
50% in any year  following the year in which we first became a foreign  personal
holding  company) or more of our gross  income  were  foreign  personal  holding
company income (which is generally income of a passive nature such as dividends,
interest and royalties)  (the "income test") and (2) more than 50% of the voting
power or value of our equity were  owned,  directly  or  indirectly,  by five or
fewer U.S. holders that are individuals (the "shareholder  test"). If we (or any
of our non-United  States  subsidiaries)  are  classified as a foreign  personal
holding  company in any taxable  year,  then each  shareholder  that is a United
States  person  would  be  required  to pay tax on its  pro  rata  share  of the
undistributed  foreign  personal holding income of such foreign personal holding
company.  We currently  satisfy the shareholder test for qualifying as a foreign
personal  holding  company  but intend to manage our affairs so as to attempt to
avoid  satisfaction  of the income  test for  qualifying  as a foreign  personal
holding  company,  or minimize the impact to our  shareholders if we satisfy the
income test,  to the extent this  management  of our affairs would be consistent
with our business goals, although we cannot assure you in this regard.

     We do not expect to become a passive foreign investment  company.  However,
because the passive foreign investment company determination is made annually on
the basis of facts and circumstances  that may be beyond our control and because
the principles for applying the passive foreign investment company tests are not
entirely  clear,  we cannot assure you that we will not become a passive foreign
investment  company. If we are a passive foreign investment company in any year,
then any of our  shareholders  that is a United States person could be liable to
pay  tax at  ordinary  income  tax  rates  plus an  interest  charge  upon  some
distributions by us or when that shareholder  sells our common shares at a gain.
Further,  if we are classified as a passive  foreign  investment  company in any
year in which a  United  States  person  is a  shareholder,  we  generally  will
continue to be treated as a passive foreign  investment  company with respect to
such shareholder in all succeeding  years,  regardless of whether we continue to
satisfy the income or asset tests described above. Additional tax considerations
would  apply  if we or  any  of  our  subsidiaries  were  a  controlled  foreign
corporation or a personal holding company.


Risks Relating to Our Shares

The markets for high technology stocks have experienced  extreme  volatility and
our share price may be subject to significant fluctuations and volatility.

     The markets for high technology stocks have experienced  extreme volatility
that has often been  unrelated to the operating  performance  of the  particular
companies.  These broad market  fluctuations  may  adversely  affect the trading
price of our common shares.

                                       36


Our officers and directors exert substantial influence over us.

     As of March 1, 2004  members of our Board of  Directors  and our  executive
officers,  together  with members of their  families  and  entities  that may be
deemed  affiliates of or related to such persons or entities,  beneficially  own
approximately  45%  of  our  outstanding  common  shares.   Accordingly,   these
shareholders may be able to determine the outcome of corporate actions requiring
shareholder approval, such as mergers and acquisitions.  This level of ownership
may have a significant  effect in delaying,  deferring or preventing a change in
control of Garmin and may adversely  affect the voting and other rights of other
holders of our common shares.


Prior  to  2006,   without  the  approval  of  a  majority  of  certain  of  our
shareholders,  we may not  dispose  of our shares of Garmin  Corporation  or its
assets, even if it would benefit all of our shareholders.

     In connection  with the  reorganization  whereby  Garmin became the holding
company for Garmin Corporation,  shareholders of Garmin Corporation entered into
a shareholders' agreement whereby each shareholder party to the agreement agreed
to take all reasonable  actions required to prevent the disposition by Garmin of
any shares of Garmin Corporation or of substantially all of the assets of Garmin
Corporation  until after December 31, 2005 except upon approval of a majority in
interest of such shareholders who are U.S. citizens or residents. Certain of our
officers and directors own a substantial portion of these shares.


Provisions in our charter documents might deter,  delay or prevent a third party
from acquiring us, which could decrease the value of our shares.

     Our Board of Directors has the authority to issue up to 1,000,000 preferred
shares  and  to  determine  the  price,  rights,  preferences,   privileges  and
restrictions,  including voting rights, of those shares without any further vote
or action by the  shareholders.  This could have an adverse impact on the market
price of our  common  shares.  We have no present  plans to issue any  preferred
shares,  but we may do so.  The rights of the  holders  of common  shares may be
subject  to,  and  adversely  affected  by,  the  rights of the  holders  of any
preferred shares that may be issued in the future. In addition,  we have adopted
a  classified  board of  directors.  Our  shareholders  are unable to remove any
director or the entire  board of directors  without a super  majority  vote.  In
addition,  a super  majority  vote is  required  to  approve  transactions  with
interested  shareholders.   Shareholders  do  not  have  the  right  to  call  a
shareholders  meeting.  We have adopted a shareholders'  rights plan which under
certain circumstances would significantly impair the ability of third parties to
acquire  control of us without prior  approval of our Board of  Directors.  This
shareholders' rights plan and the provisions in our charter documents could make
it more  difficult  for a third  party  to  acquire  us,  even if doing so would
benefit our shareholders.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         Market Sensitivity

     We have  market  risk  primarily  in  connection  with the  pricing  of our
products and services and the purchase of raw materials. Product pricing and raw
materials  costs  are both  significantly  influenced  by  semiconductor  market
conditions.  Historically, during cyclical industry downturns, we have been able
to offset  pricing  declines for our products  through a combination of improved
product mix and success in obtaining price reductions in raw materials costs.

         Inflation

     We do not believe that inflation has had a material effect on our business,
financial  condition  or  results  of  operations.  If our costs  were to become
subject  to  significant  inflationary  pressures,  we may not be able to  fully
offset such higher costs through price increases. Our inability or failure to do
so could  adversely  affect our  business,  financial  condition  and results of
operations.

                                       37


         Foreign Currency Exchange Rate Risk

     The  operation  of the  Company's  subsidiaries  in  international  markets
results in exposure to movements in currency  exchange  rates. We generally have
not been significantly  affected by foreign exchange fluctuations because, until
recently,  the  Taiwan  Dollar  has  proven to be  relatively  stable.  However,
periodically we have experienced  significant  foreign currency gains and losses
due to the  strengthening  and  weakening of the U.S.  dollar.  The potential of
volatile  foreign  exchange  rate  fluctuations  in  the  future  could  have  a
significant effect on our results of operations.

     The  principal   currency  involved  is  the  New  Taiwan  Dollar.   Garmin
Corporation,  located in Shijr, Taiwan uses the local currency as the functional
currency. The Company translates all assets and liabilities at year-end exchange
rates and income and expense accounts at average rates during the year. In order
to minimize the effect of the currency exchange  fluctuations on our net assets,
we have elected to retain most of our Taiwan  subsidiary's cash in U.S. dollars.
As discussed above, the Taiwan dollar/U.S. dollar exchange rate can be volatile.
The exchange rate decreased 3.0% during 2003 and resulted in a foreign  currency
loss of $6.7 million.  While the net effect of foreign  currency moves in fiscal
2002 was neutral,  there were significant shifts in the exchange rate throughout
2002.  The exchange  rate  increased  6.5% during 2001 and resulted in a foreign
currency  gain of $11.6  million.  If the exchange  rate  decreased by a similar
percentage,  a  comparable  foreign  currency  loss would be  recognized.  A 10%
positive or negative change in the US dollar exchange rate versus the New Taiwan
Dollar would have resulted in a foreign currency gain of $22.1 million (positive
10% change) or a foreign  currency loss of $22.1  million  (negative 10% change)
during 2003.


         Interest Rate Risk

     As of  December  27,  2003,  we have no  outstanding  long-term  debt,  and
therefore no  debt-related  interest  rate risk.  Upon  retiring the  industrial
revenue bond issue during 2003 as described above,  Garmin  International,  Inc.
also  terminated  two interest  rate swap  agreements,  one with a $10.0 million
notional  amount and another  with a $5.0 million  notional  amount at a cost of
$0.6 million.  The  Company's  average  outstanding  debt during fiscal 2003 was
approximately $10 million.  The average interest rate on debt during fiscal 2003
was 3.5%.

     At December  27,  2003,  the  Company is exposed to  interest  rate risk in
connection  with its  investments  in marketable  securities.  As interest rates
change,  the unrealized  gains and losses  associated with those securities will
fluctuate accordingly.  A hypothetical change of 10% in interest rates would not
have a material effect on such unrealized gains or losses. At December 27, 2003,
unrealized gains on those securities were $2.8 million.


                                       38




Item 8.  Financial Statements and Supplementary Data



                        CONSOLIDATED FINANCIAL STATEMENTS

                          Garmin Ltd. and Subsidiaries
     Years Ended December 27, 2003, December 28, 2002, and December 29, 2001




                                    Contents

Report of Independent Auditors................................................40

Consolidated Balance Sheets at December 27, 2003 and December 28, 2002........41
Consolidated Statements of Income for the Years Ended December 27, 2003,
   December 28, 2002, and December 29, 2001...................................42
Consolidated Statements of Stockholders' Equity for the Years Ended
   December 27, 2003, December 28, 2002, and December 29, 2001................43
Consolidated Statements of Cash Flows for the Years Ended December 27, 2003,
   December 28, 2002, and December 29, 2001...................................44
Notes to Consolidated Financial Statements....................................46




                                       39




                         Report of Independent Auditors



The Board of Directors and Stockholders
Garmin Ltd.


     We have audited the accompanying consolidated balance sheets of Garmin Ltd.
and  subsidiaries  (the  Company) as of December 27, 2003 and December 28, 2002,
and the related  consolidated  statements of income,  stockholders'  equity, and
cash flows for each of the three years in the period  ended  December  27, 2003.
Our audits also included the financial statement schedule listed in the index at
Item 15(a)(2). These financial statements and schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Garmin
Ltd. and subsidiaries at December 27, 2003 and December 28, 2002, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 27, 2003, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.



                                                         /s/ Ernst & Young LLP


Kansas City, Missouri
January 30, 2004


                                       40



                      Garmin Ltd. And Subsidiaries

                       Consolidated Balance Sheets
                (In thousands, except share information)






                                                                           December 27,          December 28,
                                                                               2003                  2002
                                                                          -------------------------------------
                                                                                                
Assets
Current assets:
     Cash and cash equivalents                                                  $274,329              $216,768
     Marketable securities (Note 3)                                               53,127               113,336
     Accounts receivable, less allowance for doubtful accounts of
        $3,576 in 2003 and $3,153 in 2002                                         82,718                58,278
     Inventories, net                                                             96,794                57,507
     Deferred income taxes (Note 7)                                               26,812                22,620
     Prepaid expenses and other current assets                                     6,148                 4,490
                                                                          ---------------       ---------------
Total current assets                                                             539,928               472,999

Property and equipment (Note 5)
     Land and improvements                                                        21,168                20,517
     Building and improvements                                                    59,044                33,952
     Office furniture and equipment                                               22,437                15,086
     Manufacturing equipment                                                      21,146                18,920
     Engineering equipment                                                        19,880                15,730
     Vehicles                                                                      2,424                 2,286
                                                                          ---------------       ---------------
                                                                                 146,099               106,491
     Accumulated depreciation                                                     41,315                32,051
                                                                          ---------------       ---------------
                                                                                 104,784                74,440

Restricted cash (Note 5)                                                           1,602                 1,598
Marketable securities (Note 3)                                                   168,320               132,372
License agreements, net                                                           14,966                19,370
Other intangible assets                                                           27,345                 5,109
                                                                          ---------------       ---------------
Total assets                                                                    $856,945              $705,888
                                                                          ===============       ===============

Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable                                                            $40,671               $32,446
     Salaries and benefits payable                                                 4,792                 4,178
     Accrued warranty costs                                                        8,399                 5,949
     Accrued sales program costs                                                   4,461                 4,752
     Other accrued expenses (Note 8)                                               7,165                 8,000
     Income taxes payable                                                         38,946                25,853
                                                                          ---------------       ---------------
Total current liabilities                                                        104,434                81,178

Long-term debt (Note 4)                                                                -                20,000
Deferred income taxes (Note 7)                                                     2,821                 2,211

Stockholders' equity:
     Preferred stock, $1.00 par value, 1,000,000 shares authorized,
        none issued
     Common stock, $0.01 par value, 500,000,000 shares authorized
        (Notes 12 and 13):
          Issued and outstanding shares - 108,166,000 in 2003, and
                   107,919,766 in 2002                                             1,082                 1,080
     Additional paid-in capital                                                  104,022               129,431
     Retained earnings (Note 2)                                                  663,604               507,884
     Accumulated other comprehensive loss                                        (19,018)              (35,896)
                                                                          ---------------       ---------------
Total stockholders' equity                                                       749,690               602,499
                                                                          ---------------       ---------------
Total liabilities and stockholders' equity                                      $856,945              $705,888
                                                                          ===============       ===============



See accompanying notes.


                                       41



                                            Garmin Ltd. And Subsidiaries

                                          Consolidated Statements of Income
                                    (In Thousands, Except Per Share Information)





                                                                                 Fiscal Year Ended
                                                    ------------------------------------------------------------------
                                                     December 27,             December 28,              December 29,
                                                         2003                     2002                      2001
                                                    ------------------------------------------------------------------

                                                                                                    
Net sales                                                 $572,989                  $465,144                 $369,119
Cost  of goods sold                                        242,448                   210,088                  170,960
                                                    ---------------          ----------------          ---------------
Gross profit                                               330,541                   255,056                  198,159

Selling, general and administrative expenses                59,835                    45,453                   38,709
Research and development expense                            43,706                    32,163                   28,164
                                                    ---------------          ----------------          ---------------
                                                           103,541                    77,616                   66,873
                                                    ---------------          ----------------          ---------------
Operating income                                           227,000                   177,440                  131,286

Other income (expense):
     Interest income                                         7,473                     6,466                   11,164
     Interest expense                                         (534)                   (1,329)                  (2,174)
     Foreign currency                                       (6,699)                       11                   11,573
     Other                                                  (1,297)                      146                      186
                                                    ---------------          ----------------
                                                            (1,057)                    5,294                   20,749
                                                    ---------------          ----------------          ---------------
Income before income taxes                                 225,943                   182,734                  152,035

Income tax provision (benefit):
     Current                                                51,514                    40,510                   40,610
     Deferred                                               (4,205)                     (573)                  (2,023)
                                                    ---------------          ----------------          ---------------
                                                            47,309                    39,937                   38,587
                                                    ---------------          ----------------          ---------------
Net income                                                $178,634                  $142,797                 $113,448
                                                    ===============          ================          ===============

Basic net income per share (Note 12)                         $1.65                     $1.32                    $1.05
                                                    ===============          ================          ===============
Diluted net income per share (Note 12)                       $1.64                     $1.32                    $1.05
                                                    ===============          ================          ===============





See accompanying notes.


                                       42



                                       Garmin Ltd. And Subsidiaries

                             Consolidated Statements of Stockholders' Equity
                               (In Thousands, Except Per Share Information)




                                                                                   Accumulated
                                                           Additional                 Other
                                         Common Stock       Paid-In    Retained   Comprehensive
                                    -----------------------
                                      Shares     Dollars    Capital    Earnings       Loss           Total
                                    -----------------------------------------------------------------------

                                                                          
Balance at December 30, 2000           108,242      $1,082   $133,925    $253,140      ($22,908)  $365,239
   Net income                                -           -          -     113,448             -    113,448
   Translation adjustment                    -           -          -           -       (15,519)   (15,519)
   Adjustment related to effective
      portion of cash flow hedges,
      net of income tax effects of
      $579                                   -           -          -           -          (900)      (900)
                                                                                                -----------
            Comprehensive income                                                                    97,029
   Issuance of common stock
       from exercise of stock options        5           1         70           -             -         71
   Issuance of common stock
      through stock purchase plan          123           1      1,463           -             -      1,464
   Purchase and retirement of
      common stock                        (595)         (6)    (8,327)     (1,501)            -     (9,834)
                                    -----------------------------------------------------------------------
Balance at December 29, 2001           107,775       1,078    127,131     365,087       (39,327)   453,969
   Net income                                -           -          -     142,797             -    142,797
   Translation adjustment                    -           -          -           -         2,456      2,456
   Adjustment related to effective
      portion of cash flow hedges,
      net of income tax effects of
      $170                                   -           -          -           -           263        263
   Adjustment related to
      unrealized gains on
      available-for-sale securities,
      net of income tax effects of
      $455                                    -           -          -           -           712        712
                                                                                                -----------
          Comprehensive income                                                                     146,228
   Issuance of common stock from
      exercise of stock options             74           1      1,252           -             -      1,253
   Issuance of common stock through
      stock purchase plan                   70           1      1,048           -             -      1,049
                                    -----------------------------------------------------------------------
Balance at December 28, 2002           107,919       1,080    129,431     507,884       (35,896)   602,499
   Net income                                -           -          -     178,634             -    178,634
   Translation adjustment                    -           -          -           -        15,006     15,006
   Adjustment related to effective
      portion of cash flow hedges
      less reclassification
      adjustment, net of income tax
      effects of $408                        -           -          -           -           638        638
   Adjustment related to unrealized
      gains (losses) on available-
      for-sale securities, net of
      income tax effects of $357             -           -          -           -         1,234      1,234
                                                                                                -----------
            Comprehensive income                                                                   195,512
   Dividends paid ($0.50 per share)          -           -    (31,126)    (22,914)            -    (54,040)
   Tax benefit from exercise of employee
       stock options                         -           -      1,458           -             -      1,458
   Issuance of common stock from
       exercise of stock options           176           2      2,454           -             -      2,456
   Issuance of common stock through
       stock purchase plan                  71           -      1,805           -             -      1,805
                                    -----------------------------------------------------------------------
Balance at December 27, 2003           108,166      $1,082   $104,022    $663,604      ($19,018)  $749,690
                                    =======================================================================


See accompanying notes.


                                       43



                          Garmin Ltd. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                 (In Thousands)




                                                                                       Fiscal Year Ended
                                                                    --------------------------------------------------------
                                                                     December 27,         December 28,        December 29,
                                                                         2003                 2002                2001
                                                                    --------------------------------------------------------
                                                                                                          
Operating Activities:
Net income                                                                $178,634             $142,797            $113,448
Adjustments to reconcile net income to net cash provided
   by operating activities:
       Depreciation                                                         10,216                8,279               7,341
       Amortization                                                          9,888                7,852               3,527
       (Gain) Loss on sale of property and equipment                            61                   (7)                 23
       Provision for doubtful accounts                                         600                  941               1,137
       Provision for obsolete and slow-moving inventories                    6,574                  688               4,000
       Foreign currency translation gains/losses                            10,015                  600              (5,593)
       Deferred income taxes                                                (4,205)                (573)             (2,023)
       Changes in operating assets and liabilities, net of acquisition:
             Accounts receivable                                           (21,982)             (10,854)            (17,894)
             Inventories                                                   (36,102)               3,173              22,958
             Prepaid expenses and other current assets                      (1,590)              (1,568)               (447)
             Accounts payable                                                6,324               13,604              (2,657)
             Accrued expenses                                                  735                9,716              (1,016)
             Income taxes payable                                           15,912                  760               7,187
             Other assets                                                      100                    -                   -
                                                                    ---------------      ---------------     ---------------
Net cash provided by operating activities                                  175,180              175,408             129,991

Investing activities:
Purchases of property and equipment                                        (32,770)             (12,424)            (14,883)
Proceeds from sale of property and equipment                                    14                   18                 239
Purchase of marketable securities                                           22,870             (869,112)         (1,684,985)
Sales of marketable securities                                                   -              753,998           1,553,401
Purchase of Sequoia Instruments, Inc.                                            -                    -              (3,625)
Purchase of UPS Aviation Technologies, Inc.                                (38,177)                   -                   -
Purchase of licenses                                                        (1,724)             (13,525)            (12,028)
Change in restricted cash                                                        4                    2               4,239
Other                                                                         (649)                 (29)               (748)
                                                                    ---------------      ---------------     ---------------
Net cash used in investing activities                                      (50,432)            (141,072)           (158,390)

Financing activities:
Dividends                                                                  (54,040)                   -                   -
Proceeds from issuance of common stock through
   stock purchase plan                                                       1,805                1,049               1,464
Proceeds from issuance of common stock from
   exercise of stock options                                                 2,456                1,026                  71
Principal payments on long-term debt                                       (20,000)             (12,236)            (14,189)
Purchase of common stock                                                         -                    -              (9,834)
                                                                    ---------------      ---------------     ---------------
Net cash used in financing activities                                      (69,779)             (10,161)            (22,488)

Effect of exchange rate changes on cash and cash equivalents                 2,592                 (249)             (8,002)
                                                                    ---------------      ---------------     ---------------

Net increase / (decrease) in cash and cash equivalents                      57,561               23,926             (58,889)
Cash and cash equivalents at beginning of year                             216,768              192,842             251,731
                                                                    ---------------      ---------------     ---------------
Cash and cash equivalents at end of year                                  $274,329             $216,768            $192,842
                                                                    ===============      ===============     ===============




                                       44




                          Garmin Ltd. And Subsidiaries

                Consolidated Statements of Cash Flows (continued)
                                 (In Thousands)





                                                                                       Fiscal Year Ended
                                                                    --------------------------------------------------------
                                                                     December 27,         December 28,        December 29,
                                                                         2003                 2002                2001
                                                                    --------------------------------------------------------
                                                                                                           
Supplemental disclosures of cash flow information

Cash paid during the year for income taxes                                 $38,266              $39,992             $38,844
                                                                    ========================================================

Cash received during the year from income tax refunds                         $512                    -                   -
                                                                    ========================================================

Cash paid during the year for interest                                        $534               $1,325              $2,011
                                                                    ========================================================

Supplemental disclosure of non-cash investing and
   financing activities
Change in liability recognized in accrued expenses
   related to cash flow hedges and charge to
   accumulated other comprehensive loss                                    ($1,046)                ($433)            $1,479
                                                                    ========================================================

Change in marketable securities related to unrealized
   appreciation                                                             $1,591               $1,167                   -
                                                                    ========================================================

Fair value of assets acquired (UPS Aviation Technologies)                  $41,558                    -                   -
Liabilities assumed                                                         (3,320)                   -                   -
   Less:  cash acquired                                                        (61)                   -                   -
                                                                    --------------------------------------------------------
Net cash paid                                                              $38,177                    -                   -
                                                                    ========================================================



See accompanying notes.



                                       45


                          GARMIN LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             (In Thousands, Except Share and Per Share Information)
                     December 27, 2003 and December 28, 2002


1. Organization


     On  July  24,  2000,  the  stockholders  of  Garmin  Corporation   (GARMIN)
incorporated  Garmin Ltd.  (the Company)  under the laws of the Cayman  Islands.
Subsequently,  the  stockholders of GARMIN executed a Shareholders  Agreement to
transfer to Garmin Ltd. their  investments in 88,988,394  common shares of stock
of GARMIN. These shares, which represented  approximately 100% of the issued and
outstanding  common  stock of  GARMIN  as of July  24,  2000,  were  used by the
stockholders  to pay for their  subscriptions  to  100,000,000  common shares of
Garmin Ltd. at a par value of $0.01 or an  aggregate  value of $1,000.  As such,
the  exchange  of shares in this  reorganization  between  GARMIN  and the newly
formed holding company,  Garmin Ltd.,  completed on September 22, 2000, has been
accounted  for at  historical  cost  similar  to  that  in  pooling-of-interests
accounting.  Until April 15, 2002, one share of GARMIN stock was held by each of
six  shareholders  as  nominees  under  nominee  trusts in order to comply  with
Article 2 of the  Company  Law of Taiwan  which  required  that,  as a  "company
limited by stock", GARMIN have at least seven shareholders,  and 4,000 shares of
GARMIN were held by two  shareholders who did not convert their GARMIN shares to
common  shares of the  Company.  These 4,006  shares  represented  approximately
0.004% of the outstanding shares of GARMIN.  Taiwan company law was subsequently
changed to remove the requirement  that a Taiwan company have a minimum of seven
shareholders and to permit single shareholder  companies.  As of April 15, 2002,
the  Company  acquired  the 4,000  shares  of  GARMIN  that were held by the two
shareholders and the six nominee  shareholders  each transferred their own share
of GARMIN  stock to the  Company.  As a result,  the Company now owns all of the
outstanding  shares of GARMIN.  Garmin Ltd. completed an initial public offering
of its common stock in December 2000.


2. Summary of Significant Accounting Policies


Basis of Presentation and Principles of Consolidation

     The accompanying  consolidated  financial  statements have been prepared in
accordance with accounting  principles  generally accepted in the United States.
The  accompanying  consolidated  financial  statements  reflect the  accounts of
Garmin Ltd. and its wholly owned  subsidiaries.  All  significant  inter-company
balances and transactions have been eliminated.

Nature of Business

     Garmin Ltd. and subsidiaries (together,  the Company) manufacture,  market,
and  distribute  Global  Positioning  System-enabled  products and other related
products.  GARMIN was  incorporated in Taiwan,  Republic of China on January 16,
1990. GARMIN is primarily  responsible for the manufacturing and distribution of
the Company's products to Garmin  International,  Inc. (GII) and Garmin (Europe)
Limited (GEL) and, to a lesser  extent,  new product  development  and sales and
marketing of the  Company's  products in Asia and the Far East. In April 1990, a
100%-owned  subsidiary,  Garmin  International,  Inc., was  incorporated  in the
United  States.  GII is  primarily  responsible  for sales and  marketing of the
Company's  products in many  international  markets and in the United  States as
well as research  and new product  development.  GII also  manufactures  certain
products for the Company's aviation segment. During June 1992, GII formed Garmin
(Europe) Limited,  a wholly owned subsidiary in the United Kingdom,  to sell its
products  principally  within the European  market.  During  2000,  GII sold its
interest in GEL to Garmin Ltd. As a result,  GEL is now a direct  subsidiary  of
Garmin  Ltd.  Also  during  2000,  Garmin  Realty  LLC was formed by GII to hold
certain  real  estate.  In  December  2001,  GII  formed  Garmin  USA as a sales
organization. During August 2003, GII acquired all the outstanding capital stock
of UPS  Aviation  Technologies,  Inc.  for $38  million in cash and  renamed the
company Garmin AT, Inc (GAT). See Note 16.


                                       46


                          GARMIN LTD. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
             (In Thousands, Except Share and Per Share Information)


Fiscal Year

     The Company has adopted a 52-53-week  period ending on the last Saturday of
the  calendar  year.  Due to the fact that  there are not  exactly 52 weeks in a
calendar year and there is slightly more than one  additional  day per year (not
including  the  effects of leap year) in each  calendar  year as  compared  to a
52-week fiscal year, the Company will have a fiscal year  comprising 53 weeks in
certain  fiscal  years,  as determined by when the last Saturday of the calendar
year occurs.

     In those resulting fiscal years that have 53 weeks, the Company will record
an extra week of sales,  costs, and related financial activity.  Therefore,  the
financial  results of those fiscal years,  and the associated  14-week  quarter,
will not be exactly  comparable to the prior and subsequent 52-week fiscal years
and the associated  quarters  having only 13 weeks.  Fiscal 2003,  2002 and 2001
included 52 weeks.

Foreign Currency Translation

     GARMIN  utilizes  the New  Taiwan  Dollar as its  functional  currency.  In
accordance  with  Statement of  Financial  Accounting  Standards  (SFAS) No. 52,
Foreign Currency Translation, the financial statements of GARMIN for all periods
presented  have been  translated  into United  States  dollars,  the  functional
currency of Garmin Ltd. and GII, and the reporting currency herein, for purposes
of  consolidation  at rates  prevailing  during the year for sales,  costs,  and
expenses and at end-of-year rates for all assets and liabilities.  The effect of
this translation is recorded in a separate  component of  stockholders'  equity.
Cumulative  translation  adjustments  of $20,965 and $35,971 as of December  27,
2003 and December  28, 2002,  respectively,  have been  included in  accumulated
other comprehensive loss in the accompanying consolidated balance sheets.

     Transactions in foreign  currencies are recorded at the approximate rate of
exchange at the transaction  date.  Assets and liabilities  resulting from these
transactions  are  translated  at the rate of  exchange in effect at the balance
sheet date. All  differences  are recorded in results of operations and amounted
to an exchange  loss of  approximately  $6,699,  and  exchange  gains of $11 and
$11,573 for the years ended  December 27, 2003,  December 28, 2002, and December
29,  2001,  respectively.  The loss in fiscal  2003 is due to  weakening  of the
United States dollar compared to the New Taiwan Dollar  throughout the year. The
gain in fiscal  2001 is the result of the  strengthening  of the  United  States
dollar  compared to the New Taiwan  Dollar in the second and fourth  quarters of
fiscal  2001.  This loss and these  gains are  included  in other  income in the
accompanying consolidated statements of income.

Earnings Per Share

     Basic earnings per share amounts are computed based on the weighted-average
number of common shares outstanding. For purposes of diluted earnings per share,
the number of shares  that would be issued from the  exercise of dilutive  stock
options has been reduced by the number of shares which could have been purchased
from the proceeds of the exercise at the average  market price of the  Company's
stock during the period the options were outstanding. See Note 12.


Cash and Cash Equivalents

     For purposes of reporting  cash flows,  cash and cash  equivalents  include
cash on hand,  operating  accounts,  money market  funds,  and  securities  with
maturities of three months or less when  purchased.  The carrying amount of cash
and cash equivalents  approximates fair value, given the short maturity of those
instruments.

                                       47


Inventories

     Inventories  are stated at the lower of cost or market.  Cost is determined
using the  weighted-average  method (which approximates the first-in,  first-out
(FIFO)  method) by GARMIN and the FIFO method by GII,  GAT and GEL.  Inventories
consisted of the following:



                                   December 27,    December 28,
                                    2003               2002
                                ---------------------------------

Raw Materials                         $45,388            $24,177
Work-in-process                        12,551             10,936
Finished goods                         50,340             31,818
Inventory reserves                    (11,485)            (9,424)
                                ---------------------------------
                                      $96,794            $57,507
                                =================================



Property and Equipment

     Property and equipment are recorded at cost and depreciated using the
straight-line method over the following estimated useful lives:


Buildings and improvements                            8-55 years
Office furniture and equipment                         3-8 years
Manufacturing and engineering equipment                3-8 years
Vehicles                                               3-8 years


Long-Lived Assets

     In accordance with SFAS No. 144,  Accounting for the Impairment or Disposal
of Long-Lived  Assets,  the Company  reviews  long-lived  assets for  impairment
whenever events or changes in  circumstances  indicate the carrying amount of an
asset may not be fully recoverable. The carrying amount of a long-lived asset is
not recoverable if it exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. That assessment shall
be based on the  carrying  amount  of the  asset  at the date it is  tested  for
recoverability.  An impairment loss shall be measured as the amount by which the
carrying amount of a long-lived asset exceeds its fair value.


Dividends

     On July 23,  2003 the Board of  Directors  declared a dividend of $0.50 per
share to be paid on December 15, 2003 to  shareholders  of record on December 1,
2003. The Company paid out a dividend in the amount of $54,040. The dividend has
been  reported  as a  reduction  of  retained  earnings  to  the  extent  of the
stand-alone  retained  earnings of Garmin Ltd. The excess has been reported as a
reduction of additional paid-in-capital.

     Approximately  $67,882  and  $50,669  of  GARMIN's  retained  earnings  are
indefinitely restricted from distribution to stockholders pursuant to the law of
Taiwan at December 27, 2003 and December 28, 2002, respectively.


Intangible Assets

     On December 30, 2001, the Company adopted SFAS No. 142,  Goodwill and Other
Intangible  Assets.  The statement  addresses how goodwill and other  intangible
assets should be accounted for and tested for impairment.  The standard requires
intangibles  to be  identified  as  either  finite-lived  or  indefinite  lived.
Indefinite-lived  intangible  assets are no longer subject to amortization,  yet
are to be tested for  impairment  annually and on an interim  basis if events or

                                       48


changes in  circumstances  between annual tests indicate that the asset might be
impaired.  The impairment  test requires the  determination  of the value of the
intangible asset. If the value of the intangible asset is less than its carrying
value,  an  impairment  loss  should be  recognized  in an  amount  equal to the
difference.  The asset  will then be  carried  at its new  value.  Finite  lived
intangible  assets  are still  subject  to  amortization  and are  reviewed  for
impairment in accordance  with SFAS No. 144. The adoption of this  statement did
not have a material impact on the Company.

     At December  27,  2003 and  December  28,  2002,  the Company had  patents,
license  agreements,  customer related intangibles and other identifiable finite
lived intangible assets recorded at a cost of $48,703 and $35,403, respectively.
The  Company's  excess  purchase  cost over fair  value of net  assets  acquired
(goodwill)  was $11,418 and zero at December  27, 2003 and  December  28,  2002,
respectively.

     Identifiable,  finite  lived  intangible  assets are  amortized  over their
estimated  useful  lives on a  straight-line  basis  over  three  to ten  years.
Accumulated  amortization  was  $17,810  and  $10,924 at  December  27, 2003 and
December 28, 2002,  respectively.  Amortization  expense was $6,886,  $5,277 and
$2,800 for the years ended  December 27, 2003,  December 28, 2002,  and December
29, 2001,  respectively.  In the next five years,  the  amortization  expense is
estimated to be $12,945, $7,145, $2,363, $1,889, and $1,535, respectively.

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    are    considered
available-for-sale  at  December  27,  2003.  See  Note  3.   Available-for-sale
securities are stated at fair value,  with the unrealized gains and losses,  net
of tax, reported in other comprehensive  loss. During 2003,  unrealized gains of
$1,234 were reported in other comprehensive loss, net of related taxes.

     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 is included in interest  income from  investments.
Realized   gains   and   losses,   and   declines   in   value   judged   to  be
other-than-temporary  are included in net securities gains (losses). The cost of
securities sold is based on the specific  identification method.  Realized gains
and losses on available-for-sale securities were not material.

Income Taxes

     The  Company  accounts  for  income  taxes  using the  liability  method in
accordance with SFAS No. 109,  Accounting for Income Taxes. The liability method
provides  that  deferred tax assets and  liabilities  are recorded  based on the
difference  between the tax bases of assets and  liabilities  and their carrying
amount for financial reporting purposes as measured by the enacted tax rates and
laws that will be in effect when the differences are expected to reverse. Income
taxes have not been accrued by Garmin Corporation for the unremitted earnings of
GII  totaling  approximately  $112,567  and  $122,315 at  December  27, 2003 and
December  28,  2002,  respectively,  because  such  earnings  are intended to be
reinvested  in this  subsidiary  indefinitely.  Income  taxes have also not been
accrued by the Company for the unremitted  earnings of Garmin Corporation or GEL
because such earnings are also  intended to be reinvested in these  subsidiaries
indefinitely.

Use of Estimates

     The  preparation of  consolidated  financial  statements in conformity with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated  financial  statements and accompanying  notes.  Actual results
could differ from those estimates.


                                       49


Concentration of Credit Risk

     The  Company  grants  credit to certain  customers  who meet the  Company's
pre-established  credit  requirements.  Generally,  the Company does not require
security when trade credit is granted to  customers.  Credit losses are provided
for in the Company's  consolidated  financial  statements and consistently  have
been within management's expectations.

Revenue Recognition

     The  Company  recognizes  revenue  from  product  sales when the product is
shipped  to the  customer  and title has  transferred.  The  Company  assumes no
remaining  significant  obligations  associated with the product sale other than
that related to its warranty programs discussed below.

Shipping and Handling Costs

     Shipping  and  handling  costs are  included  in cost of goods  sold in the
accompanying consolidated financial statements.

Product Warranty

     The Company provides for estimated  warranty costs at the time of sale. The
warranty  period  is  generally  for one year  from  date of  shipment  with the
exception of certain  aviation  products  for which the  warranty  period is two
years from the date of installation.

Sales Programs

     The Company  provides  certain  monthly and  quarterly  incentives  for its
dealers based on various factors  including dealer purchasing volume and growth.
Additionally,  from time to time, the Company  provides  rebates to end users on
certain products.  Estimated rebates and incentives  payable to distributors are
regularly  reviewed and recorded as accrued  expenses on a monthly basis.  These
rebates  and  incentives  are  recorded  as  reductions  to  net  sales  in  the
accompanying consolidated statements of income.

Advertising Costs

     The Company expenses  advertising  costs as incurred.  Advertising  expense
charged to operations amounted to approximately  $22,071,  $16,670,  and $14,714
for the years ended December 27, 2003, December 28, 2002, and December 29, 2001,
respectively.

Research and Development

     Substantially  all  research  and  development  is  performed by GII in the
United States.  Research and development  costs, which are expensed as incurred,
amounted  to  approximately  $43,706,  $32,163,  and $28,164 for the years ended
December 27, 2003, December 28, 2002, and December 29, 2001, respectively.

Accounting for Stock-Based Compensation

     At December 27, 2003, the Company has two stock-based employee compensation
plans, which are described more fully in Note 11. The Company accounts for those
plans under the recognition  and  measurement  principles of APB Opinion No. 25,
Accounting  for Stock  Issued to  Employees,  and  related  Interpretations.  No
stock-based  employee  compensation  cost is  reflected  in net  income,  as all
options  granted  under those  plans had an  exercise  price equal to the market
value of the underlying  common stock on the date of grant.  The following table
illustrates  the effect on net income and  earnings per share if the Company had
applied the fair value  recognition  provisions of SFAS No. 123,  Accounting for
Stock-Based Compensation, to stock-based employee compensation.


                                       50





                                                       December 27,        December 28,     December 29,
                                                         2003               2002                2001
                                                    ------------------------------------------------------
                                                                                        
Net income as reported                                    $178,634           $142,797            $113,448
Deduct:  Total stock-based employee compensation
        expense determined under fair-value based
        method for all awards, net of tax effects           (3,046)            (1,949)             (1,298)
                                                    ------------------------------------------------------
Pro forma net income                                      $175,588           $140,848            $112,150
                                                    ======================================================
Pro forma net income per share:
        Basic                                                $1.63              $1.31               $1.04
        Diluted                                              $1.61              $1.30               $1.03




Derivative Investments and Hedging Activities

     The Company applies SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities,  to its derivative instruments and hedging activities.  This
statement requires the Company to recognize all derivatives on the balance sheet
at fair value.  Derivatives not considered hedges must be adjusted to fair value
through income.

     If a derivative is a hedge,  depending on the nature of the hedge,  changes
in the fair value of the derivative  will either be offset against the change in
fair value of the hedged asset, liability or firm commitment through earnings or
recognized in other comprehensive  income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings.

     GII has  historically  entered into interest rate swap agreements to modify
the interest  characteristics of portions of its outstanding long-term debt from
a floating rate to a fixed rate basis. These agreements  involved the receipt of
floating rate amounts in exchange for fixed rate interest payments over the life
of the agreements  without an exchange of the underlying  principal amount.  The
differential  to be paid or  received is accrued as  interest  rates  change and
recognized as an adjustment to interest expense related to the debt. The related
amount  payable to or  receivable  from the  counterparty  is  included in other
liabilities or assets.  The Company's  agreements have previously  qualified for
hedge  accounting  as  permitted in SFAS No. 133,  resulting in the  agreement's
being marked to market at each balance  sheet date through  other  comprehensive
income.  Management  assessed the  effectiveness of the hedge  relationship on a
periodic basis during the year. See Note 8.

Recent Accounting Pronouncements

     At its November 2002  meeting,  the EITF reached a consensus on Issue 00-21
"Accounting for Revenue Arrangements with Multiple Deliverable",  which provides
a  model  to  be  used,  in  the  context  of  a  multiple-deliverable   revenue
arrangement,  in determining  (a) how the  arrangement  consideration  should be
measured,  (b) whether the arrangement  should be divided into separate units of
accounting,  and,  if so,  (c)  how  the  arrangement  consideration  should  be
allocated  to the separate  units of  accounting.  Issue 00-21 is effective  for
revenue  arrangements  entered  into  in  fiscal  periods  (annual  or  interim)
beginning after June 15, 2003, with earlier adoption  permitted.  Companies also
are  permitted to adopt Issue 00-21 by reporting  the change in  accounting as a
cumulative  effect  adjustment in accordance with APB Opinion No. 20, Accounting
Changes,  and SFAS No. 3,  Reporting  Accounting  Changes in  Interim  Financial
Statements.  The adoption of this standard did not have a material impact on the
Company's results of operations or financial condition.

     In January 2003,  the Financial  Accounting  Standards  Board (FASB) issued
Interpretation   No.  46,   "Consolidation  of  Variable   Interest   Entities."
Interpretation  No. 46 requires that the assets,  liabilities and results of the
activity  of  variable  interest  entities be  consolidated  into the  financial
statements  of  the  Company  that  has  the  controlling   financial  interest.
Interpretation  No. 46 also  provides the framework  for  determining  whether a
variable  interest  entity should be consolidated  based on voting  interests or
significant  financial support provided to it. Interpretation No. 46 will become
effective  on March 31, 2004 for variable  interest  entities  created  prior to
December 31, 2003.  We do not expect the  adoption of  Interpretation  No. 46 to
have a material impact on our results and operations or financial condition.


                                       51


Reclassification

     Certain amounts in the fiscal 2002 consolidated  financial  statements have
been reclassified to conform to fiscal 2003 presentation.


3. Marketable Securities

     The  following  is  a  summary  of  the  Company's  marketable   securities
classified as available-for-sale securities at December 27, 2003:




                                                                                         Estimated Fair
                                                                 Gross Unrealized          Value (Net
                                           Amortized Cost          Gains/Losses         Carrying Amount)
                                         ------------------------------------------------------------------
                                                                                          
Mortgage-backed securities                          $61,354                  $1,097                $62,451
Obligations of states and political
    subdivisions                                     95,544                   1,313                 96,857
U.S. corporate bonds                                 34,591                     349                 34,940
Other                                                27,200                      (1)                27,199
                                         ------------------------------------------------------------------
Total                                              $218,689                  $2,758               $221,447
                                         ------------------------------------------------------------------




     The  following  is  a  summary  of  the  Company's  marketable   securities
classified as available-for-sale securities at December 28, 2002:




                                                                                         Estimated Fair
                                                                 Gross Unrealized          Value (Net
                                           Amortized Cost          Gains/Losses         Carrying Amount)
                                         ------------------------------------------------------------------
                                                                                          
Mortgage-backed securities                          $58,038                    $386                $58,424
Obligations of states and political
    subdivisions                                     86,006                     595                 86,601
U.S. corporate bonds                                 79,572                     185                 79,757
Other                                                20,925                       1                 20,926
                                         ------------------------------------------------------------------
Total                                              $244,541                  $1,167               $245,708
                                         ------------------------------------------------------------------



     The  amortized  cost and estimated  fair value of marketable  securities at
December 27, 2003, by contractual maturity, are shown below. Expected maturities
will differ from  contractual  maturities  because the issuers of the securities
may have the right to prepay obligations without prepayment penalties.





                                                                                            Estimated
                                                                       Cost                Fair Value
                                                                -------------------------------------------

                                                                                           
Due in one year or less (2004)                                              $52,836                $53,127
Due after one year through five years (2005-2009)                           102,844                104,866
Due after five years through ten years (2010-2014)                           38,105                 38,493
Due after ten years (2015 and thereafter)                                    24,904                 24,961
                                                                -------------------------------------------
                                                                           $218,689               $221,447
                                                                -------------------------------------------



     The Company invests in auction rate  securities  which  effectively  mature
every 28 days. Upon maturity, the proceeds are reinvested in the same security.


                                       52


4.  Long-Term Debt


     During 1995, GII entered into an agreement with the City of Olathe,  Kansas
for the  construction  of a new corporate  headquarters  (the project) which was
financed  through  issuance of Series 1995 Industrial  Revenue Bonds (the Bonds)
totaling  $9,500.  Upon  completion  of the project in 1996,  GII retired  bonds
totaling $155. During 2002, GII retired the remaining Bonds totaling $9,345.

     During 1999,  GARMIN borrowed $18,040 to finance the purchase of land and a
new manufacturing  facility in Taiwan.  The balance was due in 60 equal payments
of principal plus interest  beginning in November 2001.  Through  November 2001,
interest  was payable at a fixed rate of 6.155%.  Subsequent  to November  2001,
interest was adjustable based on the Republic of China's government preferential
rate on term  deposits  plus 0.18%.  The Company  opted to prepay a  significant
portion of the outstanding  principal  during 2001. The  outstanding  balance of
$2,891 at December 29, 2001 was paid in full in January 2002.

     During 2000,  GII entered into another  agreement  with the City of Olathe,
Kansas to  finance  the  Company's  expansion  of its  manufacturing  facilities
through the issuance of Series 2000  Industrial  Revenue  Bonds (the 2000 Bonds)
totaling  $20,000.  The proceeds from the issuance of the 2000 Bonds were placed
in an interest-bearing restricted cash account controlled by a trustee appointed
by the issuer.  Disbursements  from the account were  restricted to purchases of
equipment and construction  related to the project and amounted to $0 and $5,696
for years ended  December 28, 2002 and December  29, 2001,  respectively.  There
were no unexpended bond proceeds in this restricted cash account at December 28,
2002.  During the second quarter of 2003, GII instructed the trustee of the 2000
Bonds to call them at par,  leaving an  outstanding  principal of $0 at December
27, 2003.

     At December 28, 2002,  outstanding  principal  under the 2000 Bonds totaled
$20,000.  Interest on the 2000 Bonds was payable monthly at a variable  interest
rate (1.51% at December  28,  2002),  which was  adjusted  weekly to the current
market rate as determined by the remarketing agent of the 2000 Bonds.



5. Commitments and Contingencies


     Rental expense related to office,  warehouse space and real estate amounted
to $324,  $281,  and $232 for the years ended  December 27,  2003,  December 28,
2002, and December 29, 2001, respectively.

     Future minimum lease payments are as follows:

       Year                 Amount
       ----------------------------

       2004                   $107
       2005                    301
       2006                    301
       2007                    301
       2008                    301
       Thereafter           13,276




     At December  27, 2003 and  December  28,  2002,  standby  letters of credit
amounting  to $0 and $509,  respectively,  were issued by banks on behalf of the
Company. At December 27, 2003, the Company expects future costs of approximately
$45,000 for the completion of its facility expansion in Olathe, Kansas.

     Certain  cash  balances of GEL are held as  collateral  by a bank  securing
payment of the United Kingdom  value-added tax  requirements.  These amounted to
$1,602 and $1,598 at December 27, 2003 and December 28, 2002, respectively,  and
are reported as restricted cash.

     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 and other intellectual property claims and various

                                       53


other risks.  It is not possible to predict  with  certainly  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.


6.  Employee Benefit Plans


     GII  sponsors an employee  retirement  plan under which its  employees  may
contribute up to 50% of their annual  compensation  subject to Internal  Revenue
Code maximum limitations and to which GII contributes a specified  percentage of
each  participants  annual  compensation  up to certain limits as defined in the
plan.  Additionally,  GEL  has a  defined  contribution  plan  under  which  its
employees may contribute up to 5% of their annual compensation. Both GII and GEL
contribute  an amount  determined  annually  at the  discretion  of the Board of
Directors.  During the years ended  December  27, 2003,  December 28, 2002,  and
December 29, 2001, expense related to these plans of $4,197, $2,728, and $2,356,
respectively, was charged to operations.

     Certain of the Company's foreign subsidiaries  participate in local defined
benefit  pension plans.  Contributions  are calculated by formulas that consider
final pensionable salaries.  Neither obligations nor contributions for the years
ended  December  27,  2003,  December  28,  2002,  and  December  29,  2001 were
significant.




7. Income Taxes

     The Company's income tax provision (benefit) consists of the following:





                                                            Fiscal Year Ended
                                    -------------------------------------------------------------
                                      December 27,          December 28,          December 29,
                                          2003                  2002                  2001
                                    -------------------------------------------------------------
                                                                                
Federal:
    Current                                  $17,066               $18,576               $10,208
    Deferred                                  (2,486)               (1,639)                 (338)
                                    -------------------------------------------------------------
                                              14,580                16,937                 9,870
State:
    Current                                      849                (1,035)                2,237
    Deferred                                  (1,379)                 (328)                  (74)
                                    -------------------------------------------------------------
                                                (530)               (1,363)                2,163
Foreign:
    Current                                   33,599                22,969                28,165
    Deferred                                    (340)                1,394                (1,611)
                                    -------------------------------------------------------------
                                              33,259                24,363                26,554
                                    -------------------------------------------------------------
Total                                        $47,309               $39,937               $38,587
                                    =============================================================





                                       54


     The income tax provision  differs from the amount  computed by applying the
statutory  federal  income tax rate to income before taxes.  The sources and tax
effects of the differences are as follows:




                                                            Fiscal Year Ended
                                    -------------------------------------------------------------
                                      December 27,          December 28,          December 29,
                                          2003                  2002                  2001
                                    -------------------------------------------------------------
                                                                                
Federal income tax expense at
   U.S. statutory rate                       $79,080               $63,957               $53,212
State income tax expense, net of
   federal tax effect                            626                   886                 1,406
Foreign tax rate differential                (21,038)              (16,759)              (13,640)
Taiwan surtax, tax incentives
    and credits                              (21,161)              (10,757)               (3,260)
Other, net                                     9,802                 2,610                   869
                                    -------------------------------------------------------------
Income tax expense                           $47,309               $39,937               $38,587
                                    =============================================================




     The  Company's   income  before  income  taxes   attributable  to  non-U.S.
operations was $202,390,  $146,804,  and $120,550,  for the years ended December
27,  2003,  December 28, 2002,  and  December  29, 2001,  respectively.  The tax
incentives and credits  received from Taiwan included in the table above reflect
$0.38,  $0.10, and $0.03 per  weighted-average  common share outstanding for the
years ended  December  27,  2003,  December  28,  2002,  and  December 29, 2001,
respectively.  The Company  currently expects to benefit from the incentives and
credits being  offered by Taiwan  through 2008, at which time these tax benefits
expire.

     Deferred income taxes reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:




                                                            December 27,          December 28,
                                                                2003                  2002
                                                          ---------------------------------------
                                                                                    
Deferred tax assets:
   Product warranty accruals                                        $2,529                $1,707
   Allowance for doubtful accounts                                   1,214                 1,088
   Inventory carrying value                                          2,045                 2,777
   Sales program allowances                                          2,183                 3,249
   Vacation accrual                                                    740                   507
   Interest rate swaps                                                   -                   408
   Unrealized intercompany profit in inventory                      15,498                12,767
   Other                                                             2,603                   117
                                                          ---------------------------------------
                                                                    26,812                22,620
Deferred tax liabilities:
   Unrealized investment gain                                          812                   455
   Unrealized foreign currency gains                                    86                   623
   Depreciation                                                      1,923                 1,133
                                                          ---------------------------------------
                                                                     2,821                 2,211
Net deferred tax assets                                            $23,991               $20,409
                                                          =======================================






                                       55


8. Interest Rate Risk Management

     During  1996,   GII  entered  into  an  interest  rate  swap  agreement  to
effectively  convert a portion of its floating rate  long-term  debt  associated
with the Bonds to a fixed rate basis, thus, reducing the impact of interest rate
changes on future  income.  The agreement was renewed in 2001.  Pursuant to this
"pay-fixed" swap agreement,  GII agreed to exchange, at specified intervals, the
difference between the fixed and the floating interest amounts calculated on the
notional  amount of the swap  agreement  totaling  $5,000 at December  28, 2002.
GII's fixed interest rate under the swap agreement was 5.1%. The  counterparty's
floating rate was based on the  nontaxable PSA Municipal Swap Index and amounted
to 1.18% at December 28, 2002.

     During 2000,  GII entered into an additional  swap agreement to effectively
convert a portion of additional floating rate long-term debt associated with the
2000 Bonds to a fixed rate basis. Pursuant to this pay-fixed swap agreement, GII
agreed to exchange, at specified intervals, the difference between the fixed and
the floating  interest  amounts  calculated  on the notional  amount of the swap
agreement totaling $10,000 at December 28, 2002. GII's fixed interest rate under
the swap  agreement was 7.26%  compared to the  counterparty's  floating rate of
1.51% at December 28, 2002.  The  counterparty's  floating rate was based on the
bank's Taxable Low Floater Rate.

     The fair value of the  interest  rate swap  agreements  was  recorded  as a
component of other accrued expenses and amounted to $1,046 at December 28, 2002.
During the  second  quarter  of 2003,  GII  liquidated  its  interest  rate swap
positions  and  realized  the loss  previously  recorded as a component of other
comprehensive  loss.  None  of  the  Company's  cash  flow  hedges  were  deemed
ineffective.



9.  Fair Value of Financial Instruments


     In accordance with SFAS No. 107,  Disclosures about Fair Value of Financial
Instruments,  the following summarizes required information about the fair value
of  certain  financial  instruments  for which it is  currently  practicable  to
estimate such value.  None of the financial  instruments  are held or issued for
trading  purposes.  The  carrying  amounts  and  fair  values  of the  Company's
financial instruments are as follows:





                                        December 27, 2003               December 28, 2002
                                ---------------------------------------------------------------
                                   Carrying          Fair          Carrying          Fair
                                    Amount           Value          Amount          Value
                                ---------------------------------------------------------------

                                                                          
Cash and cash equivalents              $274,329        $274,329        $216,768       $216,768
Restricted cash                           1,602           1,602           1,598          1,598
Marketable securities                   221,447         221,447         245,708        245,708
Interest rate swap agreements
   (liability)                                -               -           1,046          1,046
Long-term debt:
   Series 2000 Bonds                          -               -          20,000         20,000




     The  carrying  value  of  cash  and  cash  equivalents,   restricted  cash,
marketable securities, and interest rate swap agreements approximates their fair
value.  The  fair  value  of the  Company's  floating-rate  long-term  debt  was
estimated  to be the par  value of the debt due to the  variable  interest  rate
nature of the instruments.


                                       56


10.  Segment Information

     The Company  operates  within its targeted  markets  through two reportable
segments,  those being  related to products  sold into the consumer and aviation
markets.  Both of the Company's  reportable  segments offer products through the
Company's network of independent dealers and distributors.  However,  the nature
of products and types of customers for the two segments vary  significantly.  As
such,  the segments  are managed  separately.  The  Company's  consumer  segment
includes portable global  positioning system (GPS) receivers and accessories for
marine,  recreation,  land, and automotive use sold primarily to retail outlets.
These products are produced primarily by the Company's subsidiary in Taiwan. The
Company's  aviation  products are  portable and panel mount  avionics for Visual
Flight Rules and  Instrument  Flight Rules  navigation and are sold primarily to
aviation dealers and certain aircraft manufacturers.

     The  Company's  Chief  Executive  Officer has been  identified as the Chief
Operating  Decision Maker (CODM).  The CODM evaluates  performance and allocates
resources  based on income before  income taxes of each  segment.  Income before
income taxes  represents net sales less  operating  expenses  including  certain
allocated general and administrative costs, interest income and expense, foreign
currency adjustments, and other non-operating corporate expenses. The accounting
policies  of the  reportable  segments  are the same as those  described  in the
summary of significant accounting policies.  There are no inter-segment sales or
transfers.

     The identifiable assets associated with each reportable segment reviewed by
the CODM  include  accounts  receivable  and  inventories.  The Company does not
report property and equipment, intangible assets, depreciation and amortization,
or capital expenditures by segment to the CODM.



                                       57


     Revenues, interest income and interest expense, income before income taxes,
and  identifiable  assets  for each of the  Company's  reportable  segments  are
presented below:





                                                  Fiscal Year Ended December 27, 2003
                                          -----------------------------------------------------
                                            Consumer           Aviation              Total
                                          -----------------------------------------------------

                                                                             
Net sales to external customers               $452,437            $120,552            $572,989
Allocated interest income                        5,901               1,572               7,473
Allocated interest expense                         422                 112                 534
Income before income taxes                     182,701              43,242             225,943
Assets:
   Accounts receivable                          65,315              17,403              82,718
   Inventories                                  76,429              20,365              96,794








                                                  Fiscal Year Ended December 28, 2002
                                          -----------------------------------------------------
                                            Consumer           Aviation              Total
                                          -----------------------------------------------------

                                                                             
Net sales to external customers               $350,674            $114,470            $465,144
Allocated interest income                        4,875               1,591               6,466
Allocated interest expense                       1,002                 327               1,329
Income before income taxes                     134,859              47,875             182,734
Assets:
   Accounts receivable                          43,942              14,336              58,278
   Inventories                                  43,360              14,147              57,507







                                                  Fiscal Year Ended December 29, 2001
                                          -----------------------------------------------------
                                            Consumer           Aviation              Total
                                          -----------------------------------------------------

                                                                             
Net sales to external customers               $263,358            $105,761            $369,119
Allocated interest income                        7,960               3,204              11,164
Allocated interest expense                       1,550                 624               2,174
Income before income taxes                     102,511              49,524             152,035
Assets:
   Accounts receivable                          34,222              13,776              47,998
   Inventories                                  43,587              17,545              61,132





                                       58


     Net sales,  long-lived  assets (property and equipment),  and net assets by
geographic  area are as follows as of and for the years ended December 27, 2003,
December 28, 2002, and December 29, 2001:




                                        North
                                       America             Asia               Europe               Total
                                    -------------------------------------------------------------------------
                                                                                        
December 27, 2003
Net sales to external customers          $414,580            $25,183            $133,226            $572,989
Long-lived assets                          71,817             32,475                 492             104,784
Net assets                                284,902            437,152              27,636             749,690

December 28, 2002
Net sales to external customers          $339,415            $22,673            $103,056            $465,144
Long-lived assets                          43,599             30,374                 467              74,440
Net assets                                232,430            348,255              21,814             602,499

December 29, 2001
Net sales to external customers          $275,630            $15,039             $78,450            $369,119
Long-lived assets                          40,183             29,321                 582              70,086
Net assets                                209,499            228,270              16,200             453,969





     No single customer accounted for 10% or more of the Company's  consolidated
net  sales  in  any  period.   Accounts   receivable   from  one  customer  were
approximately $7,891 as of December 27, 2003 representing 9.5% of total accounts
receivable.



11. Stock Compensation Plans

     The various Company stock compensation plans are summarized below:

2000 Equity Incentive Plan

     In October 2000,  the  stockholders  adopted an equity  incentive plan (the
Plan)  providing  for grants of incentive  and  nonqualified  stock  options and
"other"  stock  compensation   awards  to  employees  of  the  Company  and  its
subsidiaries,  pursuant  to which up to  3,500,000  shares of  common  stock are
available for issuance.  The stock options  generally vest over a period of five
years or as otherwise  determined by the Board of Directors or the  Compensation
Committee  and  generally  expire  ten  years  from  the date of  grant,  if not
exercised.  Option  activity  under  the  Plan  during  2003,  2002  and 2001 is
summarized below. There have been no "other" stock  compensation  awards granted
under the Plan.

2000 Non-employee Directors' Option Plan

     Also in October  2000,  the  stockholders  adopted a stock  option plan for
non-employee  directors (the Directors Plan) providing for grants of options for
up to 50,000 common shares of the Company's stock. The term of each award is ten
years.  All awards vest evenly over a three-year  period.  During 2003, 2002 and
2001,  options to purchase 3,648, 5,058 and 5,325 shares were granted under this
plan.




                                       59


     A summary of the Company's  stock option  activity and related  information
under the 2000 Equity Incentive Plan and the 2000 Non-employee Directors' Option
Plan for the years ended  December 27, 2003,  December 28, 2002 and December 29,
2001 is provided below:




                                           Weighted-Average
                                          Exercise Price          Number of Shares
                                        -------------------------------------------
                                                                 (In Thousands)

                                                                         
Outstanding at December 30, 2000                    $14.00                   1,176
      Granted                                        19.96                     374
      Exercised                                      14.00                      (5)
      Canceled                                       14.00                     (10)
                                                               --------------------
Outstanding at December 29, 2001                     15.45                   1,535
      Granted                                        29.61                     453
      Exercised                                      14.15                     (74)
      Canceled                                       16.58                     (40)
                                                               --------------------
Outstanding at December 28, 2002                     18.90                   1,874
      Granted                                        54.30                     581
      Exercised                                      14.91                    (176)
      Canceled                                       18.19                     (22)
                                                               --------------------
Outstanding at December 27, 2003                     28.42                   2,257
                                                               ====================






                                                 December 27,           December 28,           December 29,
                                                     2003                   2002                   2001
                                              ----------------------------------------------------------------
                                                                                         
Weighted-average fair value of options
    granted during the year                         $22.01                 $11.42                 $12.28




        Stock Options as of December 27, 2003
- ---------------------------------------------------------------------------
  Exercise               Options             Remaining             Options
    Price            Outstanding           Life (Years)        Exercisable
- ---------------------------------------------------------------------------
                   (In Thousands)                            (In Thousands)

      $14-$24              1,241                  7.23                 568
      $25-$34                436                  9.00                  87
      $35-$44                  6                  9.45                   -
      $45-$55                574                  9.98                   -
              -------------------------------------------------------------
                           2,257                  8.28                 655



         The weighted-average remaining contract life for options outstanding at
December 27, 2003 is 8.28 years.

     Pro forma  information  regarding  net  income  and  earnings  per share is
required by SFAS No. 123.  SFAS No. 123  requires the pro forma  information  be
determined as if the Company has accounted for its employee  stock options under
the fair value  method of that  statement.  As described  below,  the fair value
accounting  provided  under SFAS No. 123  requires  the use of option  valuation
models that were not developed for use in valuing  employee stock  options.  The
fair  value  for  these  options  was  estimated  at the date of  grant  using a
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions for 2003, 2002, and 2001:  risk-free interest rate of 4.25%,  1.67%,
and 5.11%,  respectively;  dividend yield of 1.0% for 2003 and no dividend yield
for 2002  and  2001;  volatility  factor  of the  expected  market  price of the
Company's  common  stock of  0.3927,  0.3395,  and  0.591,  respectively;  and a
weighted-average  expected  life of the  option  of six  years in 2003 and seven
years in 2002 and 2001.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the


                                       60


input of highly  subjective  assumptions,  including  the  expected  stock price
volatility.  Because the Company's  employee stock options have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

Employee Stock Purchase Plan

     The stockholders also adopted an employee stock purchase plan (ESPP). Up to
1,000,000 shares of common stock have been reserved for the ESPP. Shares will be
offered to  employees  at a price  equal to the lesser of 85% of the fair market
value of the stock on the date of purchase  or 85% of the fair  market  value on
the  enrollment  date.  The ESPP is  intended to qualify as an  "employee  stock
purchase plan" under Section 423 of the Internal Revenue Code. During 2003, 2002
and 2001, 70,857,  70,035 and 123,007 shares were purchased under the plan for a
total purchase price of $1,805, $1,265 and $1,464, respectively. At December 27,
2003, approximately 736,000 shares are available for future issuance.



12.  Earnings Per Share


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






                                                                       Fiscal Year Ended
                                                    ---------------------------------------------------------
                                                     December 27,         December 28,         December 29,
                                                         2003                 2002                 2001
                                                    ---------------------------------------------------------
                                                                                           
Numerator (in thousands):
       Numerator for basic and diluted
           net income per share - net income               $178,634             $142,797            $113,448
                                                    =========================================================

Denominator (in thousands):
       Denominator for basic net income per share -
           weighted-average common shares                   108,011              107,774             108,097
       Efect of dilutive securities -
           employee stock options (note 11)                     891                  427                 350
                                                    ---------------------------------------------------------
       Denominator for diluted net income per share -
           adjusted weighted-average common shares          108,902              108,201             108,447
                                                    =========================================================

Basic net income per share                                    $1.65                $1.32               $1.05
                                                    =========================================================

Diluted net income per share                                  $1.64                $1.32               $1.05
                                                   =========================================================





     Options  to  purchase  48 shares of common  stock at $54.54  per share were
outstanding  during 2003 and 472 shares of common  stock at prices  ranging from
$21.67 to $29.79 per share were outstanding during 2002 but were not included in
the  computation  of diluted  earnings per share  because the options'  exercise
price was  greater  than the  average  market  price of the common  shares  and,
therefore, the effect would be antidilutive.



13.  Share Repurchase Program


     On September  24, 2001,  the Board of Directors  authorized  the Company to
repurchase up to 5,000,000 shares of the Company's common stock through December
31, 2002. Through December 28, 2002, the Company had purchased 595,200 shares at
$9,834. The share repurchase authorization expired on December 31, 2002.


                                       61


14.  Shareholder Rights Plan


     On October 24,  2001,  Garmin's  Board of Directors  adopted a  shareholder
rights plan (the "Rights Plan"). Pursuant to the Rights Plan, the Board declared
a dividend of one preferred  share  purchase  right on each  outstanding  common
share of Garmin to  shareholders  of record as of November  1, 2001.  The rights
trade  together with Garmin's  common shares.  The rights  generally will become
exercisable  if a person or group  acquires or announces an intention to acquire
15% or more of Garmin's  outstanding common shares. Each right (other than those
held by the new 15% shareholder) will then be exercisable to purchase  preferred
shares of Garmin (or in certain  instances other securities of Garmin) having at
that time a market  value equal to two times the then  current  exercise  price.
Garmin's  Board of  Directors  may  redeem the rights at $0.002 per right at any
time  before the rights  become  exercisable.  The rights  expire on October 31,
2011.



15.  Selected Quarterly Information (Unaudited)





                                              Fiscal Year Ended December 27, 2003
                            ------------------------------------------------------------------------
                                                        Quarter Ending
                            ------------------------------------------------------------------------
                              March 29            June 28          September 27       December 27
                            ------------------------------------------------------------------------

                                                                               
Net sales                        $123,788           $143,495            $135,562           $170,144
Gross profit                       74,655             83,657              76,709             95,520
Net income                         41,494             47,246              35,308             54,586
Basic net income per share           0.38               0.43                0.33               0.51





                                              Fiscal Year Ended December 28, 2002
                            ------------------------------------------------------------------------
                                                        Quarter Ending
                            ------------------------------------------------------------------------
                              March 30            June 29          September 28       December 28
                            ------------------------------------------------------------------------

                                                                               
Net sales                        $100,856           $122,838            $107,756           $133,694
Gross profit                       54,492             67,662              59,051             73,851
Net income                         26,761             32,146              38,428             45,462
Basic net income per share           0.25               0.30                0.36               0.41



     The above  quarterly  financial  data is  unaudited,  but in the opinion of
management,  all adjustments  necessary for a fair  presentation of the selected
data for these interim periods  presented have been included.  These results are
not necessarily indicative of future quarterly results.



16.      Garmin AT Acquisition


     On August 22, 2003,  GII acquired all of the  outstanding  capital stock of
UPS  Aviation  Technologies,   Inc.  for  $38  million  in  cash.  UPS  Aviation
Technologies,  headquartered in Salem, Oregon, designs and manufactures multiple
lines of  communications,  navigation  and  surveillance  products  for  general
aviation and air transport customers.

     The  purchase  price  of the  UPS  Aviation  Technologies  acquisition  was
allocated  to the  estimated  fair  values of assets  acquired  and  liabilities
assumed based on management's estimates and third-party  appraisals.  The excess
purchase  price over the fair value of the net assets  acquired was allocated to
deductible goodwill in the amount of $11.4 million.  UPS Aviation  Technologies,
Inc. was  subsequently  renamed  Garmin AT, Inc. by the Company.  The results of
Garmin AT, Inc. are  included in the  financial  statements  for the period from
August 22, 2003 to December 27, 2003.


                                       62


     The following table summarizes the purchase price allocation and the useful
life of intangibles for the aforementioned acquisition:

                                                                Intangibles
                                                      Amount Useful Life (years)
                                        ----------------------------------------
Working capital                                       $8,562
Fixed assets                                           7,092
Intangibles:
     Technology / Patents                              4,151                  8
     Tradenames                                          824                  3
     Non-Competition Agreements                        2,122                  4
     Customer Contracts                                  292                  3
     Customer Relationships                            3,344                 10
     Order Backlogs                                      372                  3
Goodwill                                              11,418
- -------------------------------------------------------------------------------
Purchase price paid, net of cash acquired            $38,177
- -------------------------------------------------------------------------------


     The  following  table is  prepared on a pro forma basis for the 13-week and
52-week  periods  ended  December  27, 2003 and  December 28, 2002 as though the
business had been  acquired as of the beginning of the period  presented,  after
including the estimated  impact of certain  adjustments  such as amortization of
intangibles (unaudited):




                                                  13-Weeks Ended                       52-Weeks Ended
                                          --------------------------------     -------------------------------
                                             December 27,    December 28,         December 27,   December 28,
                                                     2003            2002                 2003           2002
                                          --------------------------------     -------------------------------
                                                                                         
Net sales                                        $170,144        $138,790             $591,050       $486,029
Net income after income taxes                     $54,586         $44,768             $178,524       $139,265
Basic net income per share                          $0.51           $0.42                $1.65          $1.29
Diluted net income per share                        $0.50           $0.41                $1.64          $1.29
                                          --------------------------------     -------------------------------





     The pro forma  results are not  necessarily  indicative  of what would have
occurred if the  acquisition  had been in effect for the periods  presented.  In
addition,  they are not intended to be a projection of future results and do not
reflect any synergies that might be achieved from combining the operations.


17.      Warranty Reserves

     The Company's products sold are generally covered by a warranty for periods
ranging from one to two years.  The  Company's  estimate of costs to service its
warranty  obligations  are based on historical  experience  and  expectation  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:





                                                        Fiscal Year Ended
                                             --------------------------------------
                                               December 27,         December 28,
                                                   2003                 2002
                                             --------------------------------------

                                                                      
Balance - beginning of period                          $5,949               $4,777
Accrual for products sold during the period             4,429                8,520
Expenditures                                           (1,979)              (7,348)
                                             --------------------------------------
Balance - end of period                                $8,399               $5,949
                                             ======================================






                                       63



Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None.


Item 9A.  Controls and Procedures

     Under  the  supervision  and  with  the  participation  of our  management,
including  the Chief  Executive  Officer and Chief  Financial  Officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14(c) as of the end of
the period covered by this report. Based on the evaluation,  the Chief Executive
Officer  and Chief  Financial  Officer  have  concluded  that  these  disclosure
controls and  procedures  are  effective.  There were no changes in our internal
control over financial reporting during the quarter ended December 27, 2003 that
have materially  affected,  or are reasonably likely to materially  affect,  our
internal controls over financial reporting.



                                    PART III


Item 10.  Directors and Executive Officers of the Company

     Garmin has  incorporated  by reference  certain  information in response or
partial  response to the Items under this Part III of this Annual Report on Form
10-K  pursuant  to General  Instruction  G(3) of this Form 10-K and Rule  12b-23
under the Exchange Act.  Garmin's  definitive proxy statement in connection with
its annual  meeting  of  stockholders  scheduled  for  June4,  2004 (the  "Proxy
Statement")  will be filed with the Securities and Exchange  Commission no later
than 120 days after December 27, 2003.

(a)      Directors of the Company

     The  information  set forth in response to Item 401 of Regulation S-K under
the  headings  "Election  of Two  Directors"  and "The  Board of  Directors"  in
Garmin's Proxy Statement is hereby  incorporated  herein by reference in partial
response to this Item 10.

(b)      Executive Officers of the Company

     The  information  set forth in response to Item 401 of Regulation S-K under
the heading  "Executive  Officers and  Significant  Employees of the Company" in
Part I of this Form 10-K is incorporated herein by reference in partial response
to this Item 10.

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

     The  information  set forth in response to Item 405 of Regulation S-K under
the  heading  "Section  16(a)  Beneficial  Ownership  Reporting  Compliance"  in
Garmin's Proxy Statement is hereby  incorporated  herein by reference in partial
response to this Item 10.

(d)       Audit Committee Financial Expert

     Garmin's  Board of  Directors  has  determined  that both Gene M. Betts and
Thomas A. McDonnell,  members of Garmin's Audit Committee,  are "audit committee
financial experts" as defined by the SEC regulations implementing Section 407 of
the   Sarbanes-Oxley  Act  of  2002.  Mr.  Betts  and  Mr.  McDonnell  each  are
"independent"  as defined  by  current  listing  standards  of the Nasdaq  Stock
Market.


                                       64


(e)      Code of Ethics

     Garmin's  Board of Directors  has adopted the Code of Business  Conduct and
Ethics for  Directors,  Officers and  Employees of Garmin Ltd. and  Subsidiaries
(the "Code"). The Code is applicable to all Garmin employees including the Chief
Executive  Officer,  the  Chief  Financial  Officer,  the  Controller  and other
officers.  A copy of the Code is filed as  Exhibit 14 to this  Annual  Report on
Form 10-K.  If any  amendments to the Code are made, or any waivers with respect
to the Code are granted to the Chief Executive Officer,  Chief Financial Officer
or  Controller,  such  amendment or waiver will be disclosed in a Form 8-K filed
with the Securities and Exchange Commission.


Item 11.  Executive Compensation

     The  information  set forth in response to Item 402 of Regulation S-K under
"The Board of  Directors  -  Compensation  of  Directors"  and under  "Executive
Compensation  Matters" in Garmin's Proxy Statement (other than the "Compensation
Committee Report on Executive  Compensation" and the "Stock Performance  Graph")
is hereby incorporated herein by reference in response to this Item 11.


Item 12.  Security Ownership of Certain Beneficial Owners and Management and
          Related Shareholder Matters

     The  information  set forth in response to Item 403 of Regulation S-K under
the heading "Stock Ownership of Certain Beneficial Owners and Management" in the
Company's Proxy Statement is hereby incorporated herein by reference in response
to this Item 12.

Equity Compensation Plan Information

     The  following  table gives  information  as of December 27, 2003 about the
Garmin  Common  Shares that may be issued  under all of the  Company's  existing
equity compensation plans.




- ------------------------------ ------------------------------ ------------------------- ----------------------------
                                             A                           B                           C
- ------------------------------ ------------------------------ ------------------------- ----------------------------
                                                                                           Number of securities
                                                                                          remaining available for
Plan Category                   Number of securities to be        Weighted-average         future issuance under
                                  issued upon exercise of        exercise price of       equity compensation plans
                                   outstanding options,         outstanding options,       (excluding securities
                                    warrants and rights         warrants and rights       reflected in column A)
- ------------------------------ ------------------------------ ------------------------- ----------------------------
                                                                                     
Equity compensation plans
approved by shareholders(1)              2,257,537                     $28.42                    1,618,398
- ------------------------------ ------------------------------ ------------------------- ----------------------------
Equity compensation plans
not approved by shareholders                --                           --                         --
- ------------------------------ ------------------------------ ------------------------- ----------------------------
Total                                    2,257,537                     $28.42                    1,618,398

- ------------------------------ ------------------------------ ------------------------- ----------------------------




(1)      Consists of the Garmin Ltd. 2000 Equity Incentive Plan, the Garmin Ltd.
         2000 Non-Employee Directors' Option Plan and the Garmin Ltd. Employee
         Stock Purchase Plan.


     The Company has no knowledge of any arrangement, the operation of which may
at a subsequent date result in a change in control of the Company.


                                       65


Item 13.  Certain Relationships and Related Transactions

     The  information  set forth in response to Item 404 of Regulation S-K under
the heading  "The Board of Directors -  Compensation  Committee  Interlocks  and
Insider  Participation" and "Certain  Relationships and Related Transactions" in
the Company's Proxy Statement is incorporated herein by reference in response to
this Item 13.

Item 14. Principal Accounting Fees and Services

     The  information  set forth under the headings  "Principal  Accounting Firm
Fees" and "Pre-Approval of Services  Provided by the Independent  Accountant" in
the Proxy Statement is hereby incorporated by reference in response to this Item
14.




                                     PART IV


Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) List of Documents filed as part of this Report

    (1)      Consolidated Financial Statements

     The consolidated  financial statements and related notes, together with the
     report  of  Ernst  &  Young  LLP,  appear  in Part  II,  Item 8  "Financial
     Statements and Supplementary Data" of this Form 10-K.

    (2)      Schedule II Valuation and Qualifying Accounts

     All other schedules have been omitted because they are not applicable,  are
     insignificant  or the  required  information  is shown in the  consolidated
     financial statements or notes thereto.

    (3)      Exhibits -- The following exhibits are filed as part of, or
             incorporated by reference into, this Annual Report on Form 10-K:


         EXHIBIT  DESCRIPTION
         NUMBER
         -------- -------------

          3.1*           Memorandum and Articles of Association of Garmin Ltd.
                        (as amended)

          4.1**          Specimen share certificate

          4.2***         Shareholder Rights Agreement

         10.1**          Garmin Ltd. 2000 Equity Incentive Plan

         10.2**          Garmin Ltd. 2000 Non-Employee Directors' Option Plan

         10.3**          Garmin Ltd. Employee Stock Purchase Plan

         10.4****        First Amendment to Garmin Ltd. Employee Stock
                         Purchase Plan

         10.5*           Second Amendment to Garmin Ltd. Employee Stock
                         Purchase Plan

         14.1            Code of Business Conduct and Ethics for Directors,
                         Officers and Employees of Garmin Ltd. and
                         Subsidiaries

                                       66



         21.1            List of subsidiaries

         23.1            Consent of Ernst & Young LLP

         24.1            Power of Attorney (included in signature page)

         31.1            Chief Executive Officer's Certification pursuant to
                         Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2            Chief Financial Officer's Certification pursuant to
                         Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1            Chief Executive Officer's Certification pursuant to
                         Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2            Chief Financial Officer's Certification pursuant to
                         Section 906 of the Sarbanes-Oxley Act of 2002.



- -------------------------------------------------------------------------------

*    Incorporated by reference from the Registrant's Quarterly Report on Form
     10-Q filed on August 13, 2003.

**   Incorporated by reference from the Registrant's Registration Statement
     on Form S-1 filed December 6, 2000 (Commission File No. 333-45514).

***  Incorporated by reference from the Registrant's Current Report on Form 8-K
     filed on October 26, 2001.

**** Incorporated by reference from the Registrant's Annual Report on Form 10-K
     filed on March 27, 2002.


(b)      Reports on Form 8-K

     The Company  furnished  under Item 12 of Form 8-K the  Company's  Form 8-K
dated October 29, 2003 reporting the  announcement of financial  results for the
fiscal quarter ended September 27, 2003.


                                       67




                          GARMIN LTD. AND SUBSIDIARIES
                      INDEX TO FINANCIAL STATEMENT SCHEDULE

Garmin Ltd. Financial  Statement Schedule for the years ended December 27, 2003,
December 28, 2002 and December 29, 2001.

   Schedule II - Valuation and qualifying accounts........................... 69



                                       68




                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                          Garmin Ltd. and Subsidiaries
                                 (In thousands)






                                                                      Additions
                                                          ------------------------------------
                                                 Balance at        Charged to          Charged to                         Balance at
                                                Beginning of        Costs and             Other                             End of
Description                                       Period            Expenses            Accounts         Deductions         Period
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              
Year Ended December 29, 2001:
  Deducted from asset accounts
    Allowance for doubtful accounts                  $ 1,866           $ 1,137               $ -            $ (376)          $ 2,627
    Inventory reserve                                  6,504             4,000                 -              (950)            9,554
                                           -----------------------------------------------------------------------------------------
Total                                                $ 8,370           $ 5,137               $ -          $ (1,326)         $ 12,181
                                           -----------------------------------------------------------------------------------------

Year Ended December 28, 2002:
  Deducted from asset accounts
    Allowance for doubtful accounts                  $ 2,627             $ 941               $ -            $ (415)          $ 3,153
    Inventory reserve                                  9,554               688                 -              (818)            9,424
                                           -----------------------------------------------------------------------------------------
Total                                               $ 12,181           $ 1,629               $ -          $ (1,233)         $ 12,577
                                           -----------------------------------------------------------------------------------------

Year Ended December 27, 2003:
  Deducted from asset accounts
    Allowance for doubtful accounts                  $ 3,153             $ 600               $ -            $ (177)          $ 3,576
    Inventory reserve                                  9,424             6,574                 -            (4,513)           11,485
                                           -----------------------------------------------------------------------------------------
Total                                               $ 12,577           $ 7,174               $ -          $ (4,690)         $ 15,061
                                           -----------------------------------------------------------------------------------------






                                       69


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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/ Min H. Kao
                                                    Min H. Kao
                                                    Chief Executive Officer

Dated:  March 10, 2004


                                POWER OF ATTORNEY

     Know all  persons  by these  presents,  that each  person  whose  signature
appears below constitutes and appoints Gary L. Burrell, Min H. Kao and Andrew R.
Etkind,  and  each  of  them,  as  his  attorney-in-fact,   with  the  power  of
substitution,  for him in any and all capacities, to sign any amendments to this
Annual  Report on Form 10-K,  and to file the same,  with  exhibits  thereto and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  hereby ratifying and confirming all that said attorney-in-fact,  or
his substitute or substitutes, may do or cause to be done by virtue hereof.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Annual  Report on Form 10-K has been signed  below by the  following  persons on
behalf of the registrant and in the capacities indicated on March 10, 2004:

      /s/ Min H. Kao                                    /s/ Gene M. Betts
          Min H. Kao                                        Gene M. Betts
          Co-Chairman, Chief                                  Director
      Executive Officer and Director
     (Principal Executive Officer)


       /s/ Kevin Rauckman                               /s/ Donald H. Eller
           Kevin Rauckman                                   Donald H. Eller
      Chief Financial Officer and Treasurer                   Director
      (Principal Financial Officer and
      Principal Accounting Officer)

      /s/ Gary L. Burrell                              /s/ Thomas A. McDonnell
          Gary L. Burrell                                  Thomas A. McDonnell
          Co-Chairman and Director                            Director



                                       70




                                   Garmin Ltd.
                          2003 Form 10-K Annual Report
                                  Exhibit Index




     The  following  exhibits  are attached  hereto.  See Part IV of this Annual
Report on Form 10-K for a complete list of exhibits.



Exhibit
Number   Document
- ------   --------

14.1     Code of Business Conduct and Ethics for Directors, Officers and
         Employees of Garmin Ltd.

21.1     List of subsidiaries

23.1     Consent of Ernst & Young LLP

31.1     Chief Executive Officer's Certification pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

31.2     Chief Financial Officer's Certification pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1     Chief Executive Officer's Certification pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002

32.2     Chief Financial Officer's Certification pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002


                                       71