Harman Kardon 2009 Annual Report Download - page 94

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Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
Note 9 – Leases
We have obligations under cancelable and non-cancelable capital and operating leases, primarily for land,
office and manufacturing facilities. These leased assets are used in our operations where leasing offers
advantages of operating flexibility and is less expensive than alternative types of funding. The following analysis
represents property under capital leases:
June 30,
2009 2008
Capital lease assets ................................................. $7,217 $ 8,103
Less accumulated amortization ....................................... (5,345) (5,695)
Capital lease assets, net ............................................. $1,872 $ 2,408
At June 30, 2009, we are obligated for the following minimum lease commitments under terms of
non-cancelable lease agreements:
Capital
Leases
Operating
Leases
2010 ............................................................ $ 546 $ 35,106
2011 ............................................................ 438 29,017
2012 ............................................................ 427 28,233
2013 ............................................................ — 27,826
2014 ............................................................ — 24,755
Thereafter ....................................................... — 60,800
Total minimum lease payments ...................................... 1,411 $205,737
Less: interest ..................................................... (46)
Present value of minimum lease payments .............................. $1,365
Operating lease expense was $48.5 million, $50.5 million and $44.3 million for each of the fiscal years
ended June 30, 2009, 2008 and 2007, respectively.
Note 10 – Income Taxes
The tax provisions and analysis of effective income tax rates for the years ended June 30, 2009, 2008 and
2007 consisted of the following:
Year Ended June 30,
2009 2008 2007
Provision for Federal income taxes before credits at statutory rate ......... $(181,894) $ 43,569 $133,772
State income taxes ............................................... 195 260 260
Difference between Federal statutory rate and foreign effective rate ........ (4,477) (28,001) (1,305)
Goodwill impairment without tax benefit ............................. 82,551 —
Permanent differences ............................................ 1,259 4,722 (330)
Tax benefit from export sales and U.S. production activities .............. (1,024) (1,338)
Change in valuation allowance ..................................... 11,381 497
Change in other tax liabilities ...................................... 5,151 (1,497) (1,712)
Difference between Federal and financial accounting for incentive stock
option grants ................................................. 1,005 1,164 432
Federal income tax credits ......................................... (11,843) (2,750) (59,750)
Other ......................................................... (1,225) 179 157
Total income tax (benefit) expense, net .............................. $ (97,897) $ 17,119 $ 70,186
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