Free cash flow generation continued to be strong with $155 million generated in the quarter. We had a cash and marketable securities balance of over $2.7 billion at the end of the quarter. We intend to continue to fund our quarterly dividend and future acquisitions with our strong cash position.”

Non-GAAP Measures

Pro forma net income (earnings) per share

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 gain or loss results from transactions involving the Euro, the British Pound Sterling and the Taiwan Dollar and from the exchange rate impact of the significant cash and marketable securities, receivables and payables held in U.S. dollars at the end of each reporting period by the Company’s various non U.S. subsidiaries. Such gain or loss is required under GAAP because the functional currency of the subsidiaries differs from the currency in which various assets and liabilities are held. However, there is minimal cash impact from such foreign currency gain or loss. Accordingly, earnings per share before the impact of foreign currency translation gain or loss allow 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 pro forma net income per share.
Garmin Ltd. And Subsidiaries
Net income per share (Pro Forma)
(in thousands, except per share information)
       
13-Weeks Ended 39-weeks Ended
Sept 29, Sept 24, Sept 29, Sept 24,
2012   2011 2012   2011
 
Net Income (GAAP) $ 140,348 $ 150,381 $ 413,109 $ 355,340
Foreign currency (gain) / loss, net of tax effects $ 5,492     ($12,795 ) $ 14,184     ($11,062 )
Net income (Pro Forma) $ 145,840   $ 137,586   $ 427,293   $ 344,278  
 
Net income per share (GAAP):
Basic $ 0.72 $ 0.77 $ 2.12 $ 1.83
Diluted $ 0.72 $ 0.77 $ 2.11 $ 1.82
 
Net income per share (Pro Forma):
Basic $ 0.75 $ 0.71 $ 2.19 $ 1.77
Diluted $ 0.74 $ 0.71 $ 2.18 $ 1.77
 
Weighted average common shares outstanding:
Basic 194,912 194,112 194,834 194,028
Diluted 196,161 194,828 196,171 194,809
 

Free cash flow

Management believes that free cash flow is an important financial measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flow less capital expenditures for property and equipment.

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