FORM 10-K - Harman

Automotive—Automotive SG&A expenses decreased $68.8 million to $530.3 million in fiscal year 2009
compared to the prior year. As a percentage of net sales, SG&A expenses increased 6.0 percentage points to 26.5
percent in fiscal year 2009 compared to the prior year, primarily due to the decline in sales. Foreign currency
translation contributed to the decrease in fiscal year 2009 versus the prior year by $34.5 million. R&D expenses
decreased $50.8 million to $269.1 million or 13.4 percent of net sales, compared to $319.9 million or 10.9
percent of net sales in the prior year. Approximately $20.8 million of the decrease in R&D expenses was due to
foreign currency translation. Other factors contributing to the decrease in SG&A included $15.4 million of a net
gain from the sale of certain of our speech recognition assets and lower advertising and promotion expenses,
partially offset by an increase of $30.0 million in restructuring expenses. The $15.4 million gain was comprised
of $20.2 million of gross proceeds, partially offset by a write-off of a related intangible asset of $4.8 million.
Automotive SG&A expenses increased $94.1 million to $599.1 million in fiscal year 2008 compared to the
prior year. As a percentage of net sales, SG&A expenses were flat compared to the prior year. R&D expenses
increased $38.9 million to $319.9 million or 10.9 percent of sales compared with $281.0 million or 11.4 percent
of sales in the prior year. Higher costs were incurred to develop and support 13 major audio and infotainment
platforms in fiscal year 2008 a record number for the division.
Consumer—Consumer SG&A expenses decreased $17.5 million to $110.3 million in fiscal year 2009
compared to the prior year. As a percentage of net sales, SG&A expenses increased 6.2 percentage points to 31.0
percent in fiscal year 2009 compared to the prior year, primarily due to the decrease in sales. R&D expenses
decreased $10.4 million to $18.7 million or 5.2 percent of net sales, compared to $29.1 million or 5.6 percent of
net sales in the prior year. Other factors contributing to the decrease in SG&A were lower compensation and
benefit expenses from restructuring actions. These decreases were partially offset by an increase in restructuring
expenses of $7.4 million and unfavorable currency translation of $4.1 million.
Consumer SG&A expenses increased $18.6 million to $127.9 million in fiscal year 2008 compared to the
prior year. As a percentage of net sales, SG&A expenses increased 2.1 percentage points to 24.8 percent in fiscal
year 2008 compared to the prior year, primarily due to higher restructuring costs. R&D costs decreased $12.6
million to $29.1 million or 5.6 percent of net sales, compared to $41.7 million or 8.7 percent of net sales in the
prior year. Selling expenses were $6.1 million higher in fiscal year 2008, primarily due to increased marketing
efforts for multimedia products in response to general economic weakness and a competitive market.
Professional—Professional SG&A expenses decreased $17.1 million to $138.8 million in fiscal year 2009
compared to the prior year. As a percentage of net sales, SG&A expenses increased 3.3 percentage points to 28.2
percent in fiscal year 2009 compared to the prior year, primarily due to the decrease in net sales. Foreign
currency translation contributed $4.8 million to the decrease from the prior year. R&D expenses decreased $7.1
million to $36.8 million or 7.5 percent of net sales, compared to $43.9 million or 7.0 percent of net sales in the
prior year. Other factors contributing to the decrease in SG&A were lower selling expenses due to tighter cost
controls. These decreases were partially offset by an increase in restructuring expenses of $8.0 million.
Professional SG&A expenses increased $16.5 million to $156.0 million in fiscal year 2008 compared to the
prior year. As a percentage of net sales, SG&A expenses increased 0.7 percentage points to 24.9 percent in fiscal
year 2008 compared to the prior year, primarily due to higher R&D expenses. R&D expenses increased $15.8
million to $43.9 million or 7.0 percent of net sales, compared to $28.1 million or 4.9 percent of net sales in the
prior year. These decreases were partially offset by an increase in restructuring expenses of $8.0 million.
Other—Other SG&A expenses include SG&A expenses related to our QNX business, as well as
compensation, benefit and occupancy costs for corporate employees. Other SG&A expenses decreased $14.1
million to $73.8 million in fiscal year 2009 primarily due to lower share-based compensation and benefit
expenses, primarily reflecting a benefit from stock option forfeitures due to executive retirements and lower
benefit expenses due to the suspension of 401(k) match and profit sharing contributions and $13.8 million of
merger costs incurred in fiscal year 2008.
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