FORM 10-K - Harman

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
Automotive Supply Arrangements
We have arrangements with our automotive customers to provide products that meet predetermined
technical specifications and delivery dates. In the event that we do not satisfy the performance obligations under
these arrangements, we may be required to indemnify the customer. We accrue for any loss that we expect to
incur under these arrangements when that loss is probable and can be reasonably estimated. For the years ended
June 30, 2009 and 2008, we incurred $9.2 million and $0.6 million, respectively, of costs relating to delayed
delivery of product to an automotive customer. An inability to meet performance obligations on automotive
platforms to be delivered in future periods could adversely affect our results of operations and financial condition
in future periods.
Note 17 – Investment in Joint Venture
In October 2005, we formed Harman Navis Inc., a joint venture located in Korea, to engage in the design
and development of navigation systems for Asian markets. We evaluated the joint venture agreement under FIN
No. 46R, Consolidation of Variable Interest Entities, and determined that the newly formed joint venture was a
variable interest entity requiring consolidation. We own a 50 percent equity interest in the joint venture. We are
not obligated to fund any joint venture losses beyond our investment. At June 30, 2009, the net assets of the joint
venture were approximately $14.6 million. The minority interest is less than $0.8 million. Our investment in this
joint venture is not material to our consolidated financial statements.
We recently entered into a restructuring agreement which amends the Harman Navis Inc. joint venture
agreement and other related agreements. Over time, we will sell our share of this joint venture to our 50 percent
equity partner. We will deconsolidate this entity when our ownership decreases below 50 percent and the other
partner gains control.
Note 18 – (Loss) Earnings Per Share Information
2009
Year Ended June 30,
2008 2007
Basic Diluted Basic Diluted Basic Diluted
Net (loss) income ................... $(422,551) (422,551) $107,786 $107,786 $313,963 $313,963
Weighted average shares outstanding . . . 58,766 58,766 61,472 61,472 65,310 65,310
Employee stock options .............. — — — 710 — 1,139
Total weighted average shares
outstanding ...................... 58,766 58,766 61,472 62,182 65,310 66,449
(Loss) earnings per share ............. $ (7.19) (7.19) $ 1.75 $ 1.73 $ 4.81 $ 4.72
Certain options were outstanding and not included in the computation of diluted net earnings per share
because the assumed exercise of these options would have been antidilutive. Options to purchase 2,700,470
shares of our common stock with exercise prices ranging from $16.43 to $126.94 per share at June 30, 2009 were
outstanding and not included in the computation of diluted earnings per share because the exercise of these
options would have been antidilutive. In addition, restricted shares of 392,117 were outstanding at June 30, 2009
and not included in the computation of diluted earnings per share as they also would have been antidilutive.
Certain options were outstanding and not included in the computation of diluted net earnings per share
because the assumed exercise of these options would have been antidilutive. Options to purchase 1,868,679
shares of our common stock with exercise prices ranging from $68.31 to $126.94 per share at June 30, 2008 were
outstanding and not included in the computation of diluted earnings per share because the exercise of these
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