Harman Kardon 2011 Annual Report Download - page 6

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Board of Directors joined us the same
week as we showcased our legendary
brands for millions of potential
customers with the opening of a new
fl agship store in Shanghai.
In December, we announced that
HARMAN had secured a new fi ve-
year, $550 Million revolving credit
facility. This agreement refl ects the
ongoing confi dence of the banking
and investment community, including
earlier two-notch upgrades by both
major credit rating agencies. The
new revolver signifi cantly reduces
our borrowing costs, and ensures the
fl exibility needed for both ongoing
operations and strategic initiatives.
At mid year, we announced another
major new infotainment business
win, as Volkswagen Group selected
HARMAN to equip its vehicles
worldwide beginning in 2012.
Currently valued at some $1.6 Billion,
this multi-year agreement solidifi es
our established relationship with
several Volkswagen Group brands,
while extending our off ering across a
range of models from Audi, Bentley,
Lamborghini, Porsche, Seat, Skoda
and Volkswagen.
Our scalable, next-generation
infotainment is already delighting
drivers at Toyota, who unveiled
their HARMAN-based Entune™
multimedia system in January. Early
users are giving strong reviews to
the new system, which features a
variety of online mobile applications,
integration with Toyota’s on-board
safety system, and fi eld upgradeability
that will allow users to add new
mobile infotainment applications over
time. This contract was the fi rst for
our scalable, next generation system,
and the fi rst ever awarded to a non-
Japanese supplier. The subsequent
awards discussed earlier underscore
the appeal of this new HARMAN
technology and its contribution to our
growth strategy.
HARMAN’s branded audio business
also scored multiple wins during the
year. We introduced our revolutionary
QuantumLogic™ 7.1 channel surround
technology in the new Ferrari FF at
the Geneva Motor Show, integrated
with our premium JBL branded
audio. Soon after, we announced four
separate branded audio awards from
Chinese automakers, including BYD,
Geely, Dongfeng, and the BYD/Daimler
joint venture. These new awards
highlight the success of our expanded
footprint and relationships in China,
and give us a strong start toward a
targeted $1 Billion in China revenues
by 2015. Harman posted a record high
$14.5 billion in backlog of awarded
businesses.
Our activities in Fiscal Year 2011
touched the full range of emerging
markets, with strategic events or
investments in Brazil, China, Hungary,
India, Mexico, and Russia. We
appointed an experienced country
manager for our new operations
in Russia, charged with building
an organization that can service
the needs of the country’s growing
consumer demand for premium audio
products and automotive infotainment
solutions. We will continue to
aggressively develop our emerging
market resources, seizing new
business opportunities and added
competitiveness through best-cost
operations.
Among the driving forces behind this
global footprint optimization is the
4HARMAN ANNUAL REPORT 2011