FORM 10-K - Harman

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
Note 1 – Summary of Significant Accounting Policies
References to “we,” “us,” “our,” the “Company” and “Harman” refer to Harman International Industries,
Incorporated and its consolidated subsidiaries unless the context specifically indicates otherwise.
Description of Business: We believe we are a worldwide leader in the development, manufacture and
marketing of high-quality, high-fidelity audio products and electronic systems. We have developed, both
internally and through a series of strategic acquisitions, a broad range of product offerings sold under renowned
brand names in our principal markets. We also believe we are a leader in digitally integrated infotainment
systems for the automotive industry. Our AKG, Crown, JBL, Infinity, Harman/Kardon, Lexicon, dbx, Studer/
Soundcraft, Mark Levinson and Becker brand names are well-known worldwide for premium quality and
performance. We have built these brands by developing our engineering, manufacturing and marketing
competencies, and have employed these resources to establish our Company as a leader in the markets we serve.
Principles of Consolidation: The consolidated financial statements include the accounts of Harman
International Industries, Incorporated and our controlled subsidiary companies. All significant intercompany
accounts and transactions have been eliminated. Operating results of acquired businesses are included in the
Consolidated Statements of Operations from the date of acquisition.
We consolidate variable interest entities if we are deemed to be the primary beneficiary of the entity.
Operating results for variable interest entities in which we are determined to be the primary beneficiary are
included in the Consolidated Statements of Operations from the date such determination is made.
Reclassifications: Where necessary, information for prior years has been reclassified to conform to the
fiscal year 2009 financial statement presentation.
As previously disclosed in our Quarterly Reports on Form 10-Q for fiscal year 2009, effective July 1, 2008
we revised our business segments to better align them with our strategic approach to the markets and customers
we serve. As a result, our QNX business, which was previously reported in our Automotive segment, is now
reported in our Other segment. Prior period amounts have been reclassified to conform to the current period
presentation.
Effective April 1, 2009 we revised our business segments again in order to better align them with our
strategic approach to the markets and the customers we serve. As a result, our Harman Specialty business, which
had been previously reported in our Consumer segment, is now reported in our Professional segment. Prior
period amounts have been reclassified to conform to the current period presentation.
The reclassification of historical business segment information had no impact on our Consolidated Balance
Sheets, Statements of Operations, Statements of Changes in Shareholders’ Equity and Comprehensive Income or
Statements of Cash Flows.
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting
principles in the United States of America requires that we make estimates and assumptions that affect the
reported amount of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amount of revenues and expenses during the reporting period.
Significant estimates are used for, but not limited to: (i) inventory valuation; (ii) depreciable lives of fixed assets;
(iii) goodwill and other asset impairments; (vi) restructuring and related charges; (v) the evaluation of the
recoverability of pre-production and development contract costs; (vi) warranty liabilities; (vii) allowance for
doubtful accounts; (viii) contingency and litigation reserves; (ix) income tax reserves and valuation allowances;
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