Gross margin for the overall business remained solid in the fourth quarter at 41.1%, a 320 basis point decline sequentially that can be primarily attributed to the average selling price reductions associated with the holiday season. The automotive/mobile segment gross margin exceeded our expectations as we gained significant benefit from material cost reductions and improved operating efficiencies. Gross margin for the remaining segments remained on-target versus our long-term goals of 65% in aviation and 55% in marine and outdoor/fitness.

Operating margin fell 310 basis points from the year-ago quarter. The primary drivers of year-over-year growth in operating expenses include the acquired European distributors and the $14 million write-off of the Circuit City receivable.

We generated $340 million of free cash flow in the fourth quarter of 2008, resulting in a cash and marketable securities balance of just over $973 million at the end of the quarter. This equates to $4.83 of cash per basic share outstanding. We remain confident that this level of liquidity, along with our debt-free balance sheet, will allow us to grow market share through the economic downturn while continuing to invest in research and development for our long-term success. Our return on invested capital (ROIC) was 48% during fiscal 2008.”

Fiscal 2009 Outlook

We recognize that 2009 is going to be a difficult year and we are prepared to manage our business accordingly. While economic conditions are very challenging and are affecting most of our markets, we continue to see opportunities to invest selectively and grow our business through new product development and market share gains. Our goal is to maintain healthy margins and a strong balance sheet during the year. In addition, we will continue to manage our inventory carefully in order to scale it to the proper level to support our business in light of these challenging economic conditions. We continue to closely monitor the global economic developments and our business situation. We are evaluating making adjustments in certain areas of our business in order to increase cost efficiency and match operations to market demand over the near to intermediate term.

In light of the uncertainties and dynamic conditions, we will not offer specific guidance for 2009 until the outlook for the year becomes clearer.

Nüvifone Update

Garmin announced its strategic alliance with Asus earlier this month. The alliance will be known as Garmin-Asus and will allow the two organizations to utilize their core competencies and complementary resources to design, build and market the nüvifone products around the world. Our previously announced G60 model will be cobranded Garmin-Asus. In addition, we introduced the all-new M20, a Windows Mobile-based smartphone with custom LBS applications and functionality never before provided in a Windows Mobile device. Both the G60 and M20 will launch in selected markets during the first half of 2009.

Share Repurchase Program

During the fourth quarter, Garmin repurchased 2.4 million shares. This repurchase completes the 10 million shares approved by the Board of Directors in June 2008. In addition, the Company spent $42 million to repurchase shares under the October 2008 authorization allowing for $300 million through December 31, 2009. Going forward, the repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, or pursuant to a Rule 10b5-1 plan adopted by the Company which permits the Company to repurchase its shares during periods in which the Company may be in possession of material non-public information or self-imposed insider trading blackout periods. The Company continues to view stock repurchases as an appropriate use of cash given the long-term growth prospects of the Company, ongoing free cash flow generation and the need to maintain adequate cash reserves for strategic acquisitions.

Non-GAAP Measures

Net income (earnings) per share, excluding foreign currency

Management believes that net income per share before the impact of foreign currency translation gain or loss is an important measure. The majority of the Company’s consolidated foreign currency translation gain or loss results from translations involving the Euro, the British Pound Sterling and the Taiwan Dollar at the end of each reporting period of the significant cash and marketable securities, receivables and payables held in U.S. dollars by the various subsidiaries. Such translation is required under GAAP because the functional currency of the subsidiaries differs from the currency in which various assets and liabilities are hold. However, there is minimal cash impact from such foreign currency translation. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allows an assessment of the Company’s operating performance before the non-cash impact of the position of the U.S. Dollar versus other currencies, which permits a consistent comparison of results between periods.

The following table contains a reconciliation of GAAP net income per share to net income per share excluding the impact of foreign currency translation gain or loss.