Harman Kardon 2010 Annual Report Download - page 121

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Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
techniques. The deconsolidation of Harman Navis resulted in an overall loss of $13.1 million which is included
in our Consolidated Statement of Operations as loss on deconsolidation of variable interest entity for the fiscal
year ended June 30, 2010. The loss resulted primarily from the difference between the fair value of the
consideration received for the disposal of our equity interest and the net asset value of the joint venture that was
deconsolidated.
In addition to the guaranteed royalty discussed above, we also agreed to pay Navis to perform certain
engineering development work which will continue post-deconsolidation. We may enter into similar
arrangements to support our future product development needs. Navis is considered a related party.
Note 21 – Related Party Transactions
From time to time we enter into transactions with related parties. In December 2009, we entered into a
three-year agreement for engineering and software development services with Neusoft Corporation (“Neusoft”),
a Shanghai exchange listed technology solutions provider. A member of our Board of Directors is the Chairman
and Chief Executive Officer of Neusoft.
On April 20, 2010, our subsidiary, Innovative entered into an asset purchase and business transfer
agreement (the “Asset Purchase Agreement”) with Neusoft Technology Solutions GmbH (“Neusoft
Technology”), which is a subsidiary of Neusoft for the sale of certain tangible assets located at Innovative’s
facility in Hamburg, Germany. This transaction closed on June 1, 2010. As part of the Asset Purchase
Agreement, Innovative and Neusoft Technology entered into a five-year agreement for engineering and software
development services related to Innovative’s vehicle navigation business (the “Services Agreement”). Under the
terms of the Asset Purchase Agreement, Innovative transferred at closing certain tangible assets and employment
relationships to Neusoft Technology and received consideration of €6 million. Our subsidiary, Harman Becker
and Neusoft Europe AG, a subsidiary of Neusoft, are guarantors under the terms of the Asset Purchase
Agreement and the Services Agreement.
Note 22 – Significant Customers
Presented below are the percentages of net sales to and net accounts receivable due from customers who
represent ten percent or more of our net sales or net accounts receivable from continuing operations for the
periods presented:
Net Sales
Accounts
Receivable, Net
Year Ended June 30, June 30,
2010 2009 2010 2009
BMW ...................................................... 18% 15% 13% 14%
Audi/Volkswagen ............................................. 14% 15% 13% 13%
Daimler ..................................................... 8% 9% 10% 10%
Other customers .............................................. 60% 61% 64% 63%
Total ....................................................... 100% 100% 100% 100%
100