FORM 10-K - Harman

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
Accumulated Other Comprehensive Income (“AOCI”): At June 30, 2009 and 2008 AOCI consisted of
the following:
June 30,
Income/(Loss): 2009 2008
Cumulative translation adjustment .................................. $84,555 $204,806
Pension benefits ................................................. (13,821) (11,947)
Unrealized loss on hedging derivatives ............................... (9,041) (1,328)
Unrealized loss on available-for-sale securities ......................... (4,495) —
Total accumulated other comprehensive income ........................ $57,198 $191,531
Treasury Stock: We account for repurchased common stock under the cost method and include such
treasury stock as a component of our Common shareholders’ equity. Retirement of Treasury stock is recorded as
a reduction of Common stock and Additional paid-in-capital at the time such retirement is approved by our
Board of Directors.
Recently Adopted Accounting Pronouncements:
Subsequent Events: In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”),
which establishes general standards of accounting and disclosure for events that occur after the balance sheet date
but before financial statements are issued. SFAS 165 is effective for all interim and annual periods ending after
June 15, 2009. We adopted SFAS 165 upon its issuance and it had no material impact on our consolidated
financial statements. See “Subsequent Events” above for this new disclosure.
Derivative Instruments and Hedging Activities: On January 1, 2009 we adopted SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(“SFAS 161”). SFAS 161 requires additional disclosures regarding a company’s derivative instruments and
hedging activities by requiring disclosure of the fair values of derivative instruments and their gains and losses in
a tabular format. It also requires disclosure of derivative features that are credit risk-related, as well as crossreferencing
within the notes to the financial statements to enable financial statement users to locate important
information about derivative instruments, financial performance and cash flows. The only impact from this
standard was to require us to expand our disclosures regarding our derivative instruments. Refer to Note 7 –
Derivatives for additional information.
Fair Value Accounting: On July 1, 2008, we adopted SFAS No. 157, “Fair Value Measurements” (“SFAS
157”). SFAS 157 defines fair value, establishes a market-based framework or hierarchy for measuring fair value
and expands disclosures about fair value measurements. SFAS 157 is applicable whenever another accounting
pronouncement requires or permits assets and liabilities to be measured at fair value. SFAS 157 does not expand
or require any new fair value measures; however, the application of this statement may change current practice.
In February 2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 157-1, “Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value
Measurements for Purposes of Lease Classification or Measurement under Statement 13”, (“FSP FAS 157-1”)
and FASB Staff Position No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”).
Collectively, FSP FAS 157-1 and FSP FAS 157-2 defer the effective date of SFAS 157 to fiscal years beginning
after November 15, 2008 for nonfinancial assets and liabilities, and amend the scope of SFAS 157. Accordingly,
our adoption of SFAS 157 in fiscal year 2009 was limited to financial assets and liabilities, which primarily
affects the valuation of our derivative contracts. The adoption of SFAS 157 did not have a material effect on our
financial condition or results of operations. We do not believe the full adoption of SFAS 157 with respect to our
57