Exhibit 99.1
April 28, 2011 – FOR IMMEDIATE RELEASE						Contact: Robert V. Lardon 203.328.3518
						robert.lardon@harman.com

HARMAN reports 13% Increase in Sales and 100% Increase in Operating Income year over year

 

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Increases Earnings per Share to $0.51 from $0.21

 

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Exceeds Target for $400 Million STEP Change Cost Savings

 

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Wins Large Asian Business and Expands VW Group Award to $1.6 Billion

 

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Grows Scalable Platform to $3.5 Billion; Backlog of Awarded Business at $13 Billion

STAMFORD, CT, April 28, 2011 – Harman International Industries, Incorporated, the leading global audio and infotainment group (NYSE: HAR), today announced results for the third quarter ended March 31, 2011. Net sales for the quarter were $948 million, an increase of 13 percent compared to the same period last year. Third quarter operating income was $54 million, an improvement of $27 million compared to the same period last year. Earnings from continuing operations per diluted share were $0.51 for the quarter compared to $0.21 in the same period last year. On a non-GAAP basis, earnings per diluted share from continuing operations were $0.60 compared to $0.27 in the same period last year.

“Our continued focus on execution has helped us achieve a sixth consecutive quarter of top and bottom line growth,” said Dinesh C. Paliwal, the Company’s Chairman, President and CEO. “I’m pleased that we have achieved our ambitious goal of a $400 million STEP Change Cost Savings program, announced in February 2008. This early decision enabled HARMAN to overcome the global economic downturn and return to profitability faster than the industry. Having developed a culture of efficiency, we have the foundation to capitalize on multiple profitable growth opportunities. The adoption of our innovative next-generation scalable platform continues to accelerate with the VW Group’s Asian business. Awards for this platform now exceed $3.5 billion, bringing our total backlog to $13 billion. We have also won multiple orders from Chinese automotive companies for our branded audio systems. We are executing our emerging market growth strategy and excellent progress is being made across all divisions,” added Paliwal.

 

FY 2011 Key Figures – Total Company		Three Months Ended March 31																Nine Months Ended March 31
All figures from continuing operations unless otherwise noted										Increase (Decrease)																Increase (Decrease)
$ millions (except per share data)		3M FY11				3M FY10				Nominal				Local Currency1				9M FY11				9M FY10				Nominal				Local Currency1
Net sales			948				837				13	%			13	%			2,741				2,514				9	%			13	%
Gross profit			249				218				14	%			14	%			742				661				12	%			16	%
Percent of net sales			26.2	%			26.0	%											27.1	%			26.3	%
SG&A & Other			195				191				2	%			3	%			578				601				(4	%)			0	%
Operating income			54				27				100	%			95	%			164				60				174	%			167	%
Percent of net sales			5.7	%			3.2	%											6.0	%			2.4	%
Net Income from continuing operations attributable to Harman International Industries, Incorporated			37				15				145	%			131	%			117				17				n.m.				n.m.
Diluted earnings per share from continuing operations attributable to Harman International Industries, Incorporated			0.51				0.21												1.64				0.24
Restructuring-related costs			10				6												12				14
Goodwill impairment charge			0				0												0				12
Net Income from discontinued operations			0				3												0				8
Diluted earnings per share from Discontinued Operations			0.00				0.05												0.00				0.12
Non-GAAP from continuing operations1
Gross profit			250				219				15	%			14	%			745				666				12	%			15	%
Percent of net sales			26.4	%			26.1	%											27.2	%			26.5	%
SG&A & Other			187				186				1	%			1	%			569				580				(2	%)			2	%
Operating income			63				33				93	%			88	%			176				86				105	%			103	%
Percent of net sales			6.7	%			3.9	%											6.4	%			3.4	%
Net Income from continuing operations attributable to Harman International Industries, Incorporated			43				19				129	%			118	%			125				39				n.m.				n.m.
Diluted earnings per share from continuing operations attributable to Harman International Industries, Incorporated			0.60				0.27												1.75				0.55
Shares outstanding – diluted (in millions)			72				71												72				71

 

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. n.m. = Not Meaningful

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Summary of Continuing Operations

Gross margin increased to 26.2 percent for the third quarter ended March 31, 2011, an improvement of 0.2 percentage points. Gross margin on a non-GAAP basis increased to 26.4 percent for the third quarter, an improvement of 0.3 percentage points. SG&A and other expense as a percentage of sales on a non-GAAP basis for the third quarter declined by 2.5 percentage points to 19.7 percent. The Company’s improved operating margin was primarily driven by higher sales, the monetizing of certain intellectual property rights, and improved productivity, largely offset by our temporarily elevated gross R&D costs required to achieve key customer milestones and higher expense related to first time ever participation at several major automotive trade shows.

HARMAN exceeded its goal of $400 million in permanent cost and productivity savings under the Company’s STEP Change Cost Savings program.

Executing Against All Four Strategic Pillars

The Company made significant progress during the quarter against each of its four strategic pillars, which form the foundation for future profitable growth.

1. Growing Automotive Audio

HARMAN’s focused branding and marketing programs with its long-standing customers such as BMW, Hyundai, Lexus/Toyota, and Mercedes Benz, are gaining traction resulting in increased penetration for branded audio systems. HARMAN is also taking its world leadership in premium branded audio to hybrid and electric cars with its patented, energy-efficient GreenEdge™ technology. Recent awards in China include branded audio for a new electric vehicle by the BYD Daimler joint venture company, the Geely Motors Emgrand EC8, and the new BYD e6 electric vehicle. In addition, HARMAN introduced its revolutionary QuantumLogic™ surround technology for its JBL^® Professional audio system in Ferrari’s new FF.

2. Growing Smart Infotainment

HARMAN is driving the adoption of new technologies that form the “Connected Car” ecosystem. During the quarter, HARMAN launched industry leading solutions for infotainment. Launched in cooperation with Toyota, the Entune™ infotainment system features ground-breaking connected car applications such as Microsoft Bing search for points of interest, iheartradio, and Pandora music search. HARMAN also launched its innovative navigation solution Becker^® MAP PILOT for Mercedes Benz, which gives drivers a feature-rich and upgradeable navigation solution without compromising the convenience of a highly integrated in-dash OEM solution.

The Company continued to leverage its leadership position, gaining scale and penetration through its award for its next-generation platform for Volkswagen Group brands Audi, SEAT, Skoda, and Volkswagen in the Asian markets. The new award builds on HARMAN’s previously announced next-generation scalable infotainment award for the automaker’s European and US marketed vehicles. Total order value of this award is now $1.6 billion, bringing our scalable platform awards to $3.5 billion.

3. Growing in Emerging Markets

HARMAN continues to expand its presence in all businesses in the emerging markets of Brazil, Russia, India and China where the Company is targeting $1.5 billion in revenues by 2015. HARMAN reports that its Dandong facility is nearing completion in China. The custom-built, 460,000 square foot facility will be HARMAN’s largest and most technologically advanced, featuring dual operations for automotive electronics and professional audio systems. The facility is expected to come on-line in July 2011.

4. Getting Costs and Capital Right

The Company noted that while it has exceeded its cost savings goal under the STEP Change program, the discipline gained in the process continues, which included the closure or consolidation of 16 HARMAN facilities and the reduction of 2250 jobs in high-cost countries during the past three years.

The Company continues to deploy its capital wisely through investments in organic growth initiatives such as its new facility in Dandong, a planned expansion of its manufacturing operation in Hungary and its new North American manufacturing and engineering facility in Queretaro, Mexico. Additionally, the Company continues to evaluate and execute a variety of capital strategies intended to drive value to shareholders including selected technology acquisitions, such as 3dB Research Limited in Vancouver Canada, and reinstatement of the quarterly dividend.

 

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Investor and Analyst Call on April 28, 2011

On Thursday, April 28, 2011 at 11:00 a.m. EDT, HARMAN’s management will host an analyst and investor conference call to discuss the third quarter results. Those who wish to participate via audio in the earnings conference call scheduled at 11:00 a.m. EDT should dial 1.800-891-3493 (U.S.) or +1 (212) 231-2920 (International) ten minutes before the call and reference HARMAN Access Code 21520338.

In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal third quarter earnings release and supporting materials will be posted on the site at approximately 8:00 a.m. EDT, Thursday, April 28, 2011.

A replay of the call will also be available following its completion at approximately 1:00 pm EDT. The replay will be available through June 30, 2011 at 1:00 pm EDT. To listen to the replay, dial 1(800) 633-8284 (U.S.) or +1 (402) 977-9140 (International), Access Code: 21520338.

If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1(800) 473-0602 (US) or +1 (303) 446-4604 (International).

General Information

HARMAN (www.harman.com) designs, manufactures and markets a wide range of audio and infotainment solutions for the automotive, consumer and professional markets – supported by 15 leading brands including AKG®, Harman Kardon®, Infinity®, JBL®, Lexicon® and Mark Levinson®. The Company is admired by audiophiles across multiple generations and supports leading professional entertainers and the venues where they perform. More than 20 million automobiles on the road today are equipped with HARMAN audio and infotainment systems. HARMAN has a workforce of about 12,000 people across the Americas, Europe and Asia, and reported sales of $3.6 billion for the twelve months ending March 31, 2011. The Company’s shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.

A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Forward-Looking Information

Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act. One should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current market conditions, current economic data, expected future developments and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited (1) our ability to maintain profitability in our automotive division if there are delays in our product launches which may give rise to significant penalties and increased engineering expense; (2) the loss of one or more significant customers, or the loss of a significant platform with an automotive customer; (3)warranty obligations for defects in our products; (4) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (5) our ability to successfully implement our global footprint initiative, including achieving cost reductions and other benefits in connection with the restructuring of our manufacturing, engineering, procurement and administrative organizations; (6) the inability of our suppliers to deliver products at the scheduled rate and disruptions arising in connection therewith; (7) our ability to attract and retain qualified senior management and to prepare and implement an appropriate succession plan for our critical organizational positions; (8) our failure to implement and maintain a comprehensive disaster recovery program; (9) our failure to comply with governmental rules and regulations, including the Foreign Corrupt Practices Act and U.S. export control laws, and the cost of compliance with such laws; (10) our ability to maintain a competitive technological advantage through innovation and leading product designs; (11) the outcome of pending or future litigation and other claims, including, but not limited to, the current stockholder and Employee Retirement Income Security Act of 1974 lawsuits; (12) our ability to enforce or defend our ownership and use of intellectual property rights; and (13) other risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010 and other filings made by the Company with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement, except as required by law. This press release also makes reference to the Company’s sales backlog. The Company’s sales backlog reflects anticipated net sales from formally awarded new programs and open replacement programs, less phased-out and cancelled programs. The sales backlog may be impacted by various assumptions embedded in the calculation, including vehicle production levels on new and replacement programs, foreign currency exchange rates and the timing of major program launches.

HAR-E

 

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APPENDIX

Automotive Division

 

FY 2011 Key Figures – Automotive		Three Months Ended March 31																Nine Months Ended March 31
										Increase (Decrease)																Increase (Decrease)
$ millions		3M FY11				3M FY10				Nominal				Local Currency1				9M FY11				9M FY10				Nominal				Local Currency1
Net sales			707				630				12	%			13	%			1,978				1,841				8	%			12	%
Gross profit			164				145				13	%			13	%			470				439				7	%			12	%
Percent of net sales			23.2	%			23.0	%											23.8	%			23.8	%
SG&A & Other			108				116				(7	%)			(6	%)			322				385				(16	%)			(12	%)
Operating income			56				29				92	%			88	%			148				54				175	%			160	%
Percent of net sales			7.9	%			4.6	%											7.5	%			2.9	%
Restructuring-related costs			6				1												10				5
Goodwill impairment charge			0				0												0				12
Non-GAAP1
Gross profit			165				145				14	%			14	%			473				441				7	%			12	%
Percent of net sales			23.3	%			23.1	%											23.9	%			23.9	%
SG&A & Other			104				115				(10	%)			(9	%)			315				369				(15	%)			(10	%)
Operating income			61				31				101	%			97	%			159				72				121	%			114	%
Percent of net sales			8.7	%			4.9	%											8.0	%			3.9	%

 

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the third quarter were $707 million, an increase of 12 percent or 13 percent in local currency, driven by higher production volumes in Automotive and market share gains in the Infotainment business. Gross margin on a non-GAAP basis in the third quarter increased slightly to 23.3 percent from 23.1 percent. SG&A and other expense on a non-GAAP basis in the third quarter was $104 million compared to $115 million in the prior year. The division’s improved operating margin was primarily driven by higher sales, the monetizing of certain intellectual property rights, and improved productivity, largely offset by our temporarily elevated gross R&D costs required to achieve key customer milestones and higher expense related to first time ever participation at several major automotive trade shows.

Automotive Division Highlights

During the quarter, HARMAN launched three industry leading solutions for infotainment and branded audio. Launched in cooperation with Toyota, the Entune™ infotainment system features ground-breaking connected car applications such as Microsoft Bing search for points of interest, iheartradio, and Pandora music search. In addition, HARMAN introduced its revolutionary QuantumLogic™ surround technology for its JBL^® Professional audio system in Ferrari’s new FF. HARMAN also launched its innovative navigation solution, Becker^® MAP PILOT for Mercedes Benz, which gives drivers a feature-rich and upgradeable navigation solution without compromising the convenience of a highly integrated in-dash OEM solution.

HARMAN demonstrated its broad range of connected infotainment solutions in the Rinspeed “BamBoo” concept car – the world’s first social networking vehicle – at the Geneva Auto Show. Technologies included Aha Radio on-demand, interactive, personalized radio, along with its GreenEdge energy-efficient audio solutions and HALOsonic technologies for electric vehicles.

HARMAN is collaborating with Sierra Wireless, a leader in high-speed mobile computing and wireless machine-to-machine communication, to pioneer 4G broadband connectivity for automotive customers. Together with speech-recognition leader Nuance, HARMAN Automotive is continuing to develop intuitive, intelligent voice solutions for today’s connected car.

HARMAN was awarded additional business to provide next-generation scalable infotainment systems for Volkswagen Group’s new vehicle platforms in the Asian markets. The new award builds on HARMAN’s previously announced next-generation scalable infotainment award for Volkswagen Group’s European and US marketed vehicles. Total order value of this award is now $1.6 Billion. Additional recent awards in China include branded audio for a new electric vehicle by the BYD Daimler joint venture company, the Geely Motors Emgrand EC8, and the new BYD e6 electric vehicle.

 

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Consumer Division

 

FY 2011 Key Figures – Consumer		Three Months Ended March 31																Nine Months Ended March 31
										Increase (Decrease)																Increase (Decrease)
$ millions		3M FY11				3M FY10				Nominal				Local Currency1				9M FY11				9M FY10				Nominal				Local Currency1
Net sales			95				81				17	%			17	%			320				292				10	%			14	%
Gross profit			26				22				17	%			17	%			93				80				17	%			21	%
Percent of net sales			27.7	%			27.6	%											29.0	%			27.3	%
SG&A & Other			28				23				19	%			19	%			83				74				12	%			15	%
Operating income			(1	)			(1	)			90	%			83	%			10				6				74	%			138	%
Percent of net sales			(1.5	%)			(0.9	%)											3.1	%			2.0	%
Restructuring-related costs			2				1												2				4
Goodwill impairment charge			0				0												0				0
Non-GAAP1
Gross profit			26				23				16	%			16	%			93				80				16	%			21	%
Percent of net sales			27.7	%			27.8	%											28.9	%			27.3	%
SG&A & Other			26				23				12	%			12	%			81				70				15	%			18	%
Operating income			1				0				n.m.				n.m.				12				10				23	%			45	%
Percent of net sales			0.7	%			(0.3	%)											3.7	%			3.3	%

 

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release. n.m. = Not Meaningful

Net sales in the third quarter were $95 million, an increase of 17 percent. This growth was driven by increased market share in the Latin American and Asian markets. Gross margin on a non-GAAP basis in the third quarter was basically flat. SG&A expense on a non-GAAP basis in the third quarter was $26 million compared to $23 million in the prior year. The increase was primarily due to expanded sales channel expense and increased marketing activities.

Consumer Division Highlights

HARMAN launched 17 new products during the third quarter, which represented more than 25% of revenue.

The Company reported excellent growth in Brazil, India and China as a result of both strong market demand and increased penetration.

HARMAN continues to add new points of sale and has improved its position with Apple, Best Buy and Target, based on the launch of its JBL OnAir and OnBeat multimedia products.

The harman/kardon BDS Series of home theater systems continues gaining share in Europe and is now launching in the Americas and Asia.

 

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Professional Division

 

FY 2011 Key Figures – Professional		Three Months Ended March 31																Nine Months Ended March 31
										Increase (Decrease)																Increase (Decrease)
$ millions		3M FY11				3M FY10				Nominal				Local Currency1				9M FY11				9M FY10				Nominal				Local Currency1
Net sales			146				126				16	%			15	%			442				380				16	%			17	%
Gross profit			59				50				17	%			15	%			178				147				21	%			21	%
Percent of net sales			40.1	%			39.9	%											40.3	%			38.8	%
SG&A & Other			39				35				11	%			10	%			111				95				16	%			17	%
Operating income			19				15				29	%			28	%			68				52				29	%			29	%
Percent of net sales			13.2	%			11.8	%											15.3	%			13.8	%
Restructuring-related costs			2				4												(1	)			4
Goodwill impairment charge			0				0												0				0
Non-GAAP1
Gross profit			59				51				16	%			14	%			178				149				19	%			19	%
Percent of net sales			40.2	%			40.3	%											40.2	%			39.3	%
SG&A & Other			38				32				17	%			16	%			111				93				19	%			20	%
Operating income			21				19				12	%			11	%			67				56				18	%			18	%
Percent of net sales			14.4	%			14.9	%											15.1	%			14.8	%

 

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the third quarter were $146 million, an increase of 16 percent, or 15 percent in local currency. This growth was driven by increased market share in the Latin American and Asian markets. Gross margin on a non-GAAP basis in the third quarter decreased slightly to 40.2 percent. SG&A expense on a non-GAAP basis in the third quarter was $38 million compared to $32 million in the prior year. The increase was primarily due to expanded sales channel expense and increased marketing activities.

Professional Division Highlights

HARMAN sound systems were used at the recent GRAMMY® Awards, Super Bowl XLV, the Oscars®, the Country Music Awards, and the Indian National Games. JBL VerTec Subcompact Line Array speakers received the prestigious audio industry TEC Award at the January NAMM music dealers show. JBL’s PRX600 powered speaker product line won the Music & Sound Retailer 2011 Reader’s Award for Best Speaker of 2010.

Notable installations during the quarter included the Houston Astros’ baseball stadium, Ontario, Canada’s court houses, and the Dolphin Resort Hotel at Disney World.

 

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Other (Corporate)

 

FY 2011 Key Figures – Other		Three Months Ended March 31																Nine Months Ended March 31
										Increase (Decrease)																Increase (Decrease)
$ millions		3M FY11				3M FY10				Nominal				Local Currency1				9M FY11				9M FY10				Nominal				Local Currency1
SG&A & Other			20				16				23	%			23	%			62				48				30	%			30	%
Restructuring-related costs			0				0												0				0
Non-GAAP1
SG&A & Other			20				16				24	%			24	%			62				48				30	%			30	%

 

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

SG&A expense increased in the third quarter primarily due to investments in corporate technology, innovation and marketing programs. The Company’s Corporate Technology Center (CTC) is driving cutting-edge development in connectivity and networking, mobile Internet (Aha Radio), cloud computing, advanced driver assistance, wireless technologies, and energy-efficiency.

 

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Harman International Industries, Incorporated

Consolidated Statements of Operations

 

		Three Months Ended March 31,								Nine Months Ended March 31,
(In thousands, except earnings per share data; unaudited)		2011				2010				2011				2010
Net sales		$	948,196			$	837,011			$	2,741,223			$	2,513,712
Cost of sales			699,371				619,379				1,999,087				1,852,218
Gross profit			248,825				217,632				742,136				661,494
Selling, general and administrative expenses			211,362				190,748				594,108				576,055
Loss on deconsolidation of variable interest entity			0				0				0				13,122
Sale of Intellectual Property			(16,184	)			0				(16,184	)			0
Goodwill impairment			0				0				0				12,292
Operating income			53,647				26,884				164,212				60,025
Other expenses:
Interest expense, net			5,262				5,762				17,172				23,950
Miscellaneous, net			1,464				1,572				5,396				3,719
Income from continuing operations before taxes			46,921				19,550				141,644				32,356
Income tax expense			10,321				4,629				24,604				10,326
Income from continuing operations net of taxes			36,600				14,921				117,040				22,030
Income from discontinued operations net of taxes			0				3,339				0				8,145
Net income			36,600				18,260				117,040				30,175
Less: Net income attributable to non-controlling interest			0				0				0				5,289
Net income attributable to Harman International Industries, Incorporated		$	36,600			$	18,260			$	117,040			$	24,886
Net income from continuing operations attributable to Harman International Industries, Incorporated:
Income from continuing operations, net of taxes		$	36,600			$	14,921			$	117,040			$	22,030
Less: Net income attributable to non-controlling interest			0				0				0				5,289
Net income from continuing operations attributable to Harman International Industries, Incorporated		$	36,600			$	14,921			$	117,040			$	16,741
Earnings per share from continuing operations attributable to Harman International Industries, Incorporated:
Basic		$	0.51			$	0.21			$	1.65			$	0.24
Diluted		$	0.51			$	0.21			$	1.64			$	0.24
Earnings per share from discontinued operations:
Basic		$	0.00			$	0.05			$	0.00			$	0.12
Diluted		$	0.00			$	0.05			$	0.00			$	0.12
Earnings per share:
Basic		$	0.51			$	0.26			$	1.65			$	0.35
Diluted		$	0.51			$	0.26			$	1.64			$	0.35
Weighted average shares outstanding:
Basic			71,123				70,531				70,918				70,300
Diluted			71,924				70,905				71,541				70,536

 

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Harman International Industries, Incorporated

Consolidated Balance Sheets

 

(In thousands; unaudited)		March 31, 2011				June 30, 2010
ASSETS
Current assets
Cash and cash equivalents		$	426,696			$	645,570
Short-term investments			340,777				0
Accounts receivable			599,969				517,092
Inventories			455,070				353,123
Other current assets			183,539				158,194
Total current assets			2,006,051				1,673,979
Property, plant and equipment			446,579				421,949
Goodwill			116,366				105,922
Deferred tax assets, long term			242,750				247,602
Other assets			129,504				106,763
Total assets		$	2,941,250			$	2,556,215
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt		$	960			$	463
Short-term debt			2,073				13,472
Accounts payable			428,395				382,985
Accrued liabilities			425,732				363,261
Accrued warranties			110,768				99,329
Income taxes payable			14,821				3,941
Total current liabilities			982,749				863,451
Convertible senior notes			374,485				362,693
Other senior debt			486				1,209
Other non-current liabilities			230,381				193,970
Total liabilities			1,588,101				1,421,323
Total equity			1,353,149				1,134,892
Total liabilities and equity		$	2,941,250			$	2,556,215

 

9

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

 

		Three Months Ended March 31, 2011
(In thousands, except earnings per share data; unaudited)		GAAP				Adjustments				Non-GAAP
Net sales		$	948,196			$	0			$	948,196
Cost of sales			699,371				(1,319	)a			698,052
Gross profit			248,825				1,319				250,144
Selling, general and administrative expenses			211,362				(8,220	)b			203,142
Loss on deconsolidation of variable interest entity			0				0				0
Sale of Intellectual Property			(16,184	)			0				(16,184	)
Goodwill impairment			0				0				0
Operating income			53,647				9,539				63,186
Other expenses:
Interest expense, net			5,262				0				5,262
Miscellaneous, net			1,464				0				1,464
Income from continuing operations before taxes			46,921				9,539				56,460
Income tax expense			10,321				2,762	c			13,083
Income from continuing operations net of taxes			36,600				6,777				43,377
Less: Net income attributable to non-controlling interest			0				0				0
Net income from continuing operations attributable to Harman International Industries, Incorporated		$	36,600			$	6,777			$	43,377
Earnings per share from continuing operations attributable to Harman International Industries, Incorporated:
Basic		$	0.51			$	0.10			$	0.61
Diluted		$	0.51			$	0.09			$	0.60
Weighted average shares outstanding:
Basic			71,123								71,123
Diluted			71,924								71,924

 

(a)	Restructuring expense in Cost of Sales was $1.3 million due to projects to increase efficiency in manufacturing.

(b)	Restructuring expense in SG&A was $8.2 million due to projects to increase efficiency in engineering and administrative functions.

(c)	The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

10

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

 

		Nine Months Ended March 31, 2011
(In thousands, except earnings per share data; unaudited)		GAAP				Adjustments				Non-GAAP
Net sales		$	2,741,223			$	0			$	2,741,223
Cost of sales			1,999,087				(2,371	)a			1,996,716
Gross profit			742,136				2,371				744,507
Selling, general and administrative expenses			594,108				(9,344	)b			584,764
Loss on deconsolidation of variable interest entity			0				0				0
Sale of Intellectual Property			(16,184	)			0				(16,184	)
Goodwill impairment			0				0				0
Operating income			164,212				11,715				175,927
Other expenses:
Interest expense, net			17,172				0				17,172
Miscellaneous, net			5,396				0				5,396
Income from continuing operations before taxes			141,644				11,715				153,359
Income tax expense			24,604				3,832	c			28,436
Income from continuing operations net of taxes			117,040				7,883				124,923
Less: Net income attributable to non-controlling interest			0				0				0
Net income from continuing operations attributable to Harman International Industries, Incorporated		$	117,040			$	7,883			$	124,923
Earnings per share from continuing operations attributable to Harman International Industries, Incorporated:
Basic		$	1.65			$	0.11			$	1.76
Diluted		$	1.64			$	0.11			$	1.75
Weighted average shares outstanding:
Basic			70,918								70,918
Diluted			71,541								71,541

 

(a)	Restructuring expense in Cost of Sales was $2.4 million due to projects to increase efficiency in manufacturing.

(b)	Restructuring expense in SG&A was $9.3 million due to projects to increase efficiency in engineering and administrative functions.

(c)	The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

11

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

 

		Three Months Ended March 31, 2010
(In thousands, except earnings per share data; unaudited)		GAAP				Adjustments				Non-GAAP
Net sales		$	837,011			$	0			$	837,011
Cost of sales			619,379				(880	)a			618,499
Gross profit			217,632				880				218,512
Selling, general and administrative expenses			190,748				(5,036	)b			185,712
Loss on deconsolidation of variable interest entity			0				0				0
Sale of Intellectual Property			0				0				0
Goodwill impairment			0				0				0
Operating income			26,884				5,916				32,800
Other expenses:
Interest expense, net			5,762				0				5,762
Miscellaneous, net			1,572				0				1,572
Income from continuing operations before taxes			19,550				5,916				25,466
Income tax expense			4,629				1,877	c			6,506
Income from continuing operations net of taxes			14,921				4,039				18,960
Less: Net income attributable to non-controlling interest			0				0				0
Net income from continuing operations attributable to Harman International Industries, Incorporated		$	14,921			$	4,039			$	18,960
Earnings per share from continuing operations attributable to Harman International Industries, Incorporated:
Basic		$	0.21			$	0.06			$	0.27
Diluted		$	0.21			$	0.06			$	0.27
Weighted average shares outstanding:
Basic			70,531								70,531
Diluted			70,905								70,905

 

(a)	Restructuring expense in Cost of Sales was $0.9 million due to projects to increase efficiency in manufacturing.

(b)	Restructuring expense in SG&A was $5.0 million due to projects to increase efficiency in engineering and administrative functions.

(c)	The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

12

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

 

		Nine Months Ended March 31, 2010
(In thousands, except earnings per share data; unaudited)		GAAP				Adjustments				Non-GAAP
Net sales		$	2,513,712			$	0			$	2,513,712
Cost of sales			1,852,218				(4,253	)a			1,847,965
Gross profit			661,494				4,253				665,747
Selling, general and administrative expenses			576,055				(9,440	)b			566,615
Loss on deconsolidation of variable interest entity			13,122				0				13,122
Sale of Intellectual Property			0				0				0
Goodwill impairment			12,292				(12,292	)c			0
Operating income			60,025				25,985				86,010
Other expenses:
Interest expense, net			23,950				0				23,950
Miscellaneous, net			3,719				0				3,719
Income from continuing operations before taxes			32,356				25,985				58,341
Income tax expense			10,326				3,977	d			14,303
Income from continuing operations net of taxes			22,030				22,008				44,038
Less: Net income attributable to non-controlling interest			5,289				0				5,289
Net income from continuing operations attributable to Harman International Industries, Incorporated		$	16,741			$	22,008			$	38,749
Earnings per share from continuing operations attributable to Harman International Industries, Incorporated:
Basic		$	0.24			$	0.31			$	0.55
Diluted		$	0.24			$	0.31			$	0.55
Weighted average shares outstanding:
Basic			70,300								70,300
Diluted			70,536								70,536

 

(a)	Restructuring expense in Cost of Sales was $4.3 million due to projects to increase efficiency in manufacturing.

(b)	Restructuring expense in SG&A was $9.4 million due to projects to increase efficiency in engineering and administrative functions.

(c)	Goodwill impairment charge was $12.3 million.

(d)	The tax benefits are calculated by multiplying the actual restructuring charge in each individual country by the discrete tax rate within that specific country.

Harman International has provided a reconciliation of non-GAAP measures in order to provide the users of these financial statements with a better understanding of our non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

13

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact

 

		Three Months Ended March 31,								Increase (Decrease)
(In thousands; unaudited)		2011				2010
Net sales – nominal currency		$	948,196			$	837,011				13	%
Effect of foreign currency translation1							(823	)
Net sales - local currency			948,196				836,188				13	%
Gross profit – nominal currency			248,825				217,632				14	%
Effect of foreign currency translation1							165
Gross profit – local currency			248,825				217,797				14	%
SG&A & Other – nominal currency			195,178				190,748				2	%
Effect of foreign currency translation1							(539	)
SG&A & Other – local currency			195,178				190,209				3	%
Operating income – nominal currency			53,647				26,884				100	%
Effect of foreign currency translation1							704
Operating income – local currency			53,647				27,588				95	%

 

1	Impact of restating prior year results at current year foreign exchange rates.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

14

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact

 

EXCLUDING restructuring and goodwill charges		Three Months Ended March 31,								Increase (Decrease)
(In thousands; unaudited)		2011				2010
Net sales – nominal currency		$	948,196			$	837,011				13	%
Effect of foreign currency translation1							(823	)
Net sales – local currency			948,196				836,188				13	%
Gross profit - nominal currency			250,144				218,512				15	%
Effect of foreign currency translation1							167
Gross profit - local currency			250,144				218,679				14	%
SG&A & Other – nominal currency			186,958				185,712				1	%
Effect of foreign currency translation1							(594	)
SG&A & Other – local currency			186,958				185,118				1	%
Operating income – nominal currency			63,186				32,800				93	%
Effect of foreign currency translation1							761
Operating income – local currency			63,186				33,561				88	%

 

1	Impact of restating prior year results at current year foreign exchange rates.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

15

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact

 

		Nine Months Ended March 31,								Increase (Decrease)
(In thousands; unaudited)		2011				2010
Net sales – nominal currency		$	2,741,223			$	2,513,712				9	%
Effect of foreign currency translation1							(89,081	)
Net sales - local currency			2,741,223				2,424,631				13	%
Gross profit – nominal currency			742,136				661,494				12	%
Effect of foreign currency translation1							(20,425	)
Gross profit – local currency			742,136				641,069				16	%
SG&A & Other – nominal currency			577,924				601,469				(4	%)
Effect of foreign currency translation1							(22,017	)
SG&A & Other – local currency			577,924				579,452				0	%
Operating income – nominal currency			164,212				60,025				174	%
Effect of foreign currency translation1							1,592
Operating income – local currency			164,212				61,617				167	%

 

1	Impact of restating prior year results at current year foreign exchange rates.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

16

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Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact

 

EXCLUDING restructuring and goodwill charges		Nine Months Ended March 31,								Increase (Decrease)
(In thousands; unaudited)		2011				2010
Net sales – nominal currency		$	2,741,223			$	2,513,712				9	%
Effect of foreign currency translation1							(89,081	)
Net sales – local currency			2,741,223				2,424,631				13	%
Gross profit - nominal currency			744,507				665,747				12	%
Effect of foreign currency translation1							(20,721	)
Gross profit - local currency			744,507				645,026				15	%
SG&A & Other – nominal currency			568,580				579,737				(2	%)
Effect of foreign currency translation1							(21,540	)
SG&A & Other – local currency			568,580				558,197				2	%
Operating income – nominal currency			175,928				86,010				105	%
Effect of foreign currency translation1							819
Operating income – local currency			175,928				86,829				103	%

 

1	Impact of restating prior year results at current year foreign exchange rates.

Harman International has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect our reported financial results, we show the rates of change both including and excluding the effect of these changes in exchange rates. We encourage readers of our financial statements to evaluate our financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements prepared in accordance with US GAAP.

 

17

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Harman International Industries, Incorporated

Total Liquidity Reconciliation

 

Total Company Liquidity		As of March 31, 2011
$ millions
Cash & cash equivalents		$	427
Short-term investments			341
Available credit under Revolving Credit Facility			543
Total liquidity		$	1,311

 

 

18