FORM 10-K - Harman

Distribution Channels
Automotive
We primarily sell our Automotive infotainment and audio systems directly to automobile manufacturers in
the U.S., Europe, Japan and Korea, where they are installed as original equipment.
Consumer
In the U.S. we primarily sell our Consumer products to dealers who sell directly to the end user. Outside the
U.S. we primarily sell to distributors who resell our products to retailers.
Professional
In the U.S. we primarily sell our Professional products to dealers via manufacturer’s representatives.
Outside the U.S. we sell directly to distributors. Manufacturer’s representatives are paid sales agents and
distributors buy and hold the inventory and sell directly to dealers in their markets. Both manufacturer’s
representatives and distributors have a defined geographic region.
In the broadcast and recording market, we primarily solicit business directly with the end users.
Trademarks and Patents
We market our products under numerous brand names that are protected by both pending and registered
trademarks around the world. Our brands include JBL, ® Infinity, ® Harman/Kardon, ® Lexicon, ® Mark
Levinson, ® Revel, ® Crown, ® Becker, ® Soundcraft, ® Spirit, ® DigiTech, ® AKG, ® Studer ® BSS ® and dbx. ® Our
trademark registrations cover use of trademark rights in connection with various products, such as loudspeakers,
speaker systems, speaker system components and other electrical and electronic devices. We have registered or
taken other protective measures for many of these trademarks in substantially all major industrialized countries.
As of June 30, 2009, we had 1,901 trademark registrations and 288 pending trademark applications around
the world. On that date, we also had 2,065 United States and foreign patents and 1,518 pending patent
applications covering various audio, infotainment and software products.
Seasonality
We experience seasonal fluctuations in sales and earnings. Historically, our first fiscal quarter ended
September 30 is generally the weakest due to automotive model year changeovers and the summer holidays in
Europe. Sales of our consumer products are generally significantly higher in the second quarter of our fiscal year,
due to increased demand for these products during the holiday buying season. Our sales and earnings also vary
due to the timing of the release of new products, customer acceptance of our products, product offerings by our
competitors and general economic conditions.
Key Customers/Industry Concentration
We are subject to various risks related to our dependence on key customers. Sales to Audi/Volkswagen
accounted for 15 percent, sales to BMW accounted for 15 percent and sales to Daimler accounted for 8 percent of
our total consolidated net sales for the fiscal year ended June 30, 2009. The majority of the Daimler sales were to
the Mercedes-Benz division. Net accounts receivable due from Audi/Volkswagen accounted for 12 percent, net
accounts receivable from BMW accounted for 14 percent and net accounts receivable from Daimler accounted
for 10 percent of total consolidated net accounts receivable at June 30, 2009. We anticipate that Audi/
Volkswagen, BMW and Daimler will continue to account for a significant portion of our net sales and net
accounts receivables for the foreseeable future.
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