Harman Kardon 2009 Annual Report Download - page 84

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Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
purchase price consideration associated with a prior acquisition. After conducting a step two test on this unit
following the same methodology as described above, we determined that this goodwill was similarly impaired
and, as a result, $2.3 million and $2.9 million of non-cash goodwill impairment charges were recognized in our
Consolidated Statements of Operations in the quarters ended March 31, 2009 and June 30, 2009, respectively.
There were no tax impacts in connection with these charges nor did these non-cash charges affect our debt
covenant compliance, cash flows or ongoing results of operations.
The annual impairment test conducted on April 30, 2008 indicated that the fair value of each reporting unit
was in excess of its carrying value and, as such, no impairment was deemed to exist.
The changes in the carrying amount of goodwill for the year ended June 30, 2009 were as follows:
Automotive Consumer Professional Other Total
Balance at June 30, 2008 .......................... $367,492 $ 23,369 $45,586 $ — $ 436,447
Realignment of business segments (Note 15) .......... (52,497) — — 52,497 —
Contingent purchase price consideration associated with
the acquisition of Innovative Systems GmbH ........ 11,290 — — — 11,290
Impairment charge .............................. (295,080) (22,663) — (12,820) (330,563)
Other adjustments(1) .............................. (31,205) (706) (3,386) — (35,297)
Balance at June 30, 2009 .......................... $ — $ — $42,200 $ 39,677 $ 81,877
(1) The other adjustments to goodwill primarily consist of foreign currency translation adjustments.
The contingent purchase price consideration associated with the acquisition of Innovative Systems GmbH
continues through August 2025, unless the buyout option is exercised by either the buyer or the seller in
September 2010. There is also approximately $10 million of contingent purchase price consideration associated
with the acquisition of QNX which is payable in November 2009 when the contingency lapses.
Note 6 – Debt
Short Term Borrowings
At June 30, 2009 and 2008, we had no outstanding short-term borrowings. For the fiscal year ended June 30,
2009, we maintained lines of credit totaling $14.0 million in the aggregate in Germany, Austria and Hungary. For
the fiscal year ended June 30, 2008, we maintained lines of credit totaling $16.7 million in the aggregate in
Japan, China and the United Kingdom.
We classify our debt based on the contractual maturity dates of the underlying debt instruments. We defer
costs associated with debt issuance over the applicable term of the debt. These costs are amortized to interest
expense in our Consolidated Statements of Operations.
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