Pro forma net income (earnings) per share
Management believes that net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure in order to permit a consistent comparison of the Company’s performance between periods.
Garmin Ltd. And Subsidiaries |
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Pro Forma Net Income (Earnings) Per Share |
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(In thousands, except per share information) |
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13-Weeks Ended |
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26-Weeks Ended |
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June 27, |
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June 29, |
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June 27, |
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June 29, |
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2020 |
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2019 |
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2020 |
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2019 |
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GAAP net income |
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$ |
184,180 |
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$ |
223,656 |
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$ |
345,360 |
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$ |
363,829 |
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Foreign currency gains / losses(1) |
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4,493 |
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(3,413 |
) |
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19,916 |
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(3,727 |
) |
| Tax effect of foreign currency gains / losses (2) |
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(630 |
) |
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645 |
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(2,345 |
) |
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660 |
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| Uncertain Tax Reserve Release (3) |
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(14,308 |
) |
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— |
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(14,308 |
) |
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— |
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| Pro forma net income |
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$ |
173,735 |
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$ |
220,888 |
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$ |
348,623 |
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$ |
360,762 |
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| GAAP net income per share: |
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| Basic |
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$ |
0.96 |
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$ |
1.18 |
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$ |
1.81 |
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$ |
1.92 |
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| Diluted |
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$ |
0.96 |
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$ |
1.17 |
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$ |
1.80 |
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$ |
1.91 |
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| Pro forma net income per share: |
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| Basic |
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$ |
0.91 |
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$ |
1.16 |
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$ |
1.83 |
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$ |
1.90 |
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| Diluted |
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$ |
0.91 |
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$ |
1.16 |
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$ |
1.82 |
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$ |
1.89 |
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| Weighted average common shares outstanding: |
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| Basic |
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191,024 |
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189,855 |
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190,914 |
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189,728 |
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| Diluted |
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191,597 |
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190,714 |
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191,640 |
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190,657 |
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| (1) Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar and the related exchange rate impact on the significant cash, receivables, and payables held in a currency other than the functional currency at a given legal entity. However, there is minimal cash impact from such foreign currency gains and losses. |
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| (2) The tax effect of foreign currency gains and losses was calculated using the pro forma effective tax rate of 14.0% and 11.8% for the 13-weeks and 26-weeks ended June 27, 2020, respectively, and an effective tax rate of 18.9% and 17.7% for the 13-weeks and 26-weeks ended June 29, 2019, respectively. |
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| (3) The discrete tax item is discussed in the pro forma effective tax rate section above. |
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