Harman Kardon 2011 Annual Report Download - page 30

We believe that our facilities are in substantial compliance with current laws and regulations. We expect
further laws similar to the EU RoHS and China RoHS, and those governing product and packaging recycling, to
be introduced in other jurisdictions, many or most of which could impose additional costs, including fees to
cover recycling costs. The need for and cost of our compliance with such legislation cannot yet be determined but
it could be substantial.
Research and Development
We believe that continued investment in product research and development is critical to our success.
Expenditures for research and development were $304.6 million, $322.7 million and $325.1 million for the fiscal
years ended June 30, 2011, 2010 and 2009, respectively. We expect to continue to devote significant resources to
research and development to sustain our competitive position.
Number of Employees
At June 30, 2011, we had 10,103 full-time employees, including 3,260 employees located in North America
and 6,843 employees located outside of North America.
Foreign Operations
Information about our foreign operations is set forth in Note 17 – Business Segment Data, in the Notes to
the Consolidated Financial Statements located in Item 8 of Part II of this report.
Corporate Information
We were incorporated in the state of Delaware in 1980. Our principal executive offices are located at 400
Atlantic Street, Suite 1500, Stamford, Connecticut 06901. Our telephone number is [phone].
Subsequent Events
Effective July 1, 2011, we reorganized our business segments. Our new business segments now consist of
Infotainment, Lifestyle, Professional and Other. Our Infotainment segment consists of the infotainment business
previously reported in our Automotive segment and the results of Aha, previously reported in our Other segment.
Our Lifestyle segment consists of the audio business previously reported in our Automotive segment, our
Consumer segment and Luxury Home Audio, which was previously reported in our Professional segment. This
change is designed to unlock earnings growth and to better align with consumer lifestyle preferences.
On July 22, 2011 (the “MWM Acquisition Date”), we and our wholly-owned subsidiary, Harman Holding
Limited (“Harman Holding”), entered into an equity securities purchase agreement with a group of sellers (the
“MWM Sellers”) to acquire all of the issued and outstanding shares of the MWM Acoustics group of companies
(“MWM Acoustics”), a leading provider of high performance, embedded acoustic solutions (the “MWM
Acquisition”). The purchase price for the MWM Acquisition was $80.0 million (the “Fixed Purchase Price”),
which is subject to a working capital adjustment. The working capital adjustment is to be determined within 60
days of the MWM Acquisition Date. On the MWM Acquisition Date, we and Harman Holding paid the MWM
Sellers a total of $72.0 million. The remainder of the Fixed Purchase Price of $8.0 million will be payable on the
later of December 31, 2012, or upon the resolution of any outstanding indemnification claims. The acquisition is
also subject to a $57.0 million earn-out which is payable contingent on the achievement of certain financial
targets in the fiscal year ended June 30, 2014. The total cost of the MWM Acquisition, including the fair value of
the earn-out, will be allocated to the assets acquired and liabilities assumed based on their fair values at the
MWM Acquisition Date. We are in the process of finalizing the valuation of the net assets acquired. The results
of MWM Acoustics will be reported in our Lifestyle segment.
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