EX-99.1

EX-99.1 2 d235116dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO


Darrin Shewchuk		Yijing Brentano
Senior Director, Corporate Communications		Vice President, Investor Relations
Tel: +1 203-328-3834		Tel: +1 203-328-3500
darrin.shewchuk@harman.com		yijing.brentano@harman.com

AUGUST 4, 2016

HARMAN REPORTS FOURTH QUARTER AND FISCAL 2016 RESULTS

•

Q4 Net Sales Up 12% to $1.9 Billion; FY Net Sales Up 12% to $6.9 Billion

•

Q4 and FY GAAP EBITDA Up 26%; Q4 and FY Operational EBITDA up 20%

•

FY GAAP EPS Up 3% to $4.99; FY Operational EPS Up 9% to $6.24

•

Industry-Leading $24.1 Billion Automotive Backlog

•

Issues Guidance for Fiscal 2017 and Provides Longer-Term Outlook

STAMFORD, CT – Harman International Industries, Incorporated (NYSE: HAR), the premier connected technologies company for automotive, consumer and enterprise markets, today announced results for the fourth quarter and full-year ended June 30, 2016.

Net sales for the fourth quarter were $1.9 billion, an increase of 12 percent compared to the prior year. Connected Car net sales increased 11 percent due to higher take rates and stronger production. Lifestyle Audio net sales increased 25 percent due to higher consumer audio sales and higher car audio take rates. Connected Services net sales increased seven percent compared to the prior year due to higher demand for engineering services.

On a GAAP basis, fourth quarter operating income increased 36 percent to $154 million compared to $114 million in the prior year and EBITDA increased 26 percent to $212 million compared to $168 million in the prior year. During the quarter, the Company recognized approximately $28 million of non-recurring incremental U.S. income tax from deemed income on foreign earnings (EPS impact of $0.39). As a result, earnings per diluted share were in-line with the prior year at $1.01.

Excluding restructuring, acquisition-related items and non-recurring charges, fourth quarter operating income increased 23 percent to $185 million compared to $150 million in the prior year, and EBITDA increased 20 percent to $225 million compared to $187 million in the prior year. Earnings per diluted share increased 14 percent to $1.57 compared to $1.37 in the prior year.

Net sales for the full-year were $6.9 billion, an increase of 12 percent as Connected Car, Lifestyle Audio and Connected Services reported strong increases in net sales. Excluding the impact of foreign currency translation and acquisitions, net sales increased nine percent compared to the prior year. On a GAAP basis, fiscal year 2016 operating income increased 24 percent to $580 million from $470 million in the prior year, EBITDA increased 26 percent to $804 million compared to $639 million in the prior year, and earnings per diluted share increased three percent to $4.99 compared to $4.84 in the prior year.

Excluding acquisition-related items, restructuring and non-recurring charges, fiscal year 2016 operating income increased 22 percent to $677 million compared to $554 million in the prior year, EBITDA increased 20 percent to $836 million compared to $699 million in the prior year, and earnings per diluted share increased nine percent to $6.24 from $5.71 in the prior year.

“In fiscal 2016, HARMAN delivered record revenue, EBITDA and earnings per share,” said Dinesh C. Paliwal, Chairman and CEO. “HARMAN’s intelligent, embedded connected car solutions, including unparalleled audio and sound management systems, led to a record-breaking automotive backlog of more than $24 billion. Together with a rapidly growing consumer audio business and improving Professional Solutions business, HARMAN has a strong foundation for long-term growth.”

Paliwal continued, “In fiscal 2017, we will continue to leverage our comprehensive technology portfolio, including expanded cloud and analytics capabilities, to meet the growing demand for embedded software and services in the automotive, consumer and enterprise markets. We also presented a longer-term outlook that capitalizes on the opportunities in connected car, mobility and IoT. With an industry-leading automotive backlog and continued focus on disciplined execution, HARMAN is well positioned to deliver superior financial and operational performance for our customers and shareholders.”


FY 2016 Key Figures – Total Company	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15			Including Currency Changes			Excluding Currency Changes¹			12M FY16			12M FY15			Including Currency Changes			Excluding Currency Changes¹
Net sales		1,881			1,679			12	%		12	%		6,912			6,155			12	%		16	%
Gross profit		568			491			16	%		16	%		2,093			1,817			15	%		19	%
Percent of net sales		30.2	%		29.3	%								30.3	%		29.5	%
SG&A		414			378			10	%		9	%		1,513			1,348			12	%		16	%
Operating income		154			114			36	%		37	%		580			470			24	%		27	%
Percent of net sales		8.2	%		6.8	%								8.4	%		7.6	%
EBITDA		212			168			26	%		27	%		804			639			26	%		29	%
Percent of net sales		11.3	%		10.0	%								11.6	%		10.4	%
Net Income attributable to HARMAN International Industries, Incorporated		73			73			0	%		0	%		362			343			6	%		8	%
Diluted earnings per share		1.01			1.01			1	%		1	%		4.99			4.84			3	%		5	%
Restructuring & non-recurring costs		19			13									41			49
Acquisition-related items		11			23									56			35
Non-GAAP - operational¹
Gross profit		573			493			16	%		16	%		2,103			1,811			16	%		20	%
Percent of net sales		30.5	%		29.4	%								30.4	%		29.4	%
SG&A		388			343			13	%		13	%		1,427			1,257			14	%		17	%
Operating income		185			150			23	%		24	%		677			554			22	%		26	%
Percent of net sales		9.8	%		8.9	%								9.8	%		9.0	%
EBITDA		225			187			20	%		21	%		836			699			20	%		23	%
Percent of net sales		12.0	%		11.2	%								12.1	%		11.4	%
Net Income attributable to HARMAN International Industries, Incorporated		113			100			13	%		13	%		453			405			12	%		15	%
Diluted earnings per share		1.57			1.37			14	%		14	%		6.24			5.71			9	%		13	%
Shares outstanding – diluted (in millions)		72			73									73			71

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Summary of Operations – Gross Margin and SG&A

On a non-GAAP basis, gross margin for the fourth quarter of fiscal year 2016 increased 110 basis points to 30.5 percent. The improvement was primarily due to the impact of higher sales volume leveraging a more efficient fixed production cost base and productivity initiatives. Non-GAAP SG&A expense as a percentage of net sales increased 30 basis points to 20.7 percent compared to 20.4 percent in the prior year due to higher research and development expenses.

On a GAAP basis in the fourth quarter of fiscal year 2016, gross margin increased 90 basis points to 30.2 percent. SG&A expense as a percentage of net sales decreased 50 basis points to 22.0 percent compared to 22.5 percent in the prior year.

Financial Outlook

HARMAN provided guidance for fiscal 2017 as well as a revenue and EBITDA outlook for fiscal 2018 and 2019. A summary of the operational guidance is below. The tables below should be read in conjunction with management’s assumptions, which are included in the Company’s Fourth Quarter and Full-Year Fiscal 2016 Highlights slide deck posted on the Investors section of the Company’s website at: www.harman.com.

Fiscal Year 2017

Total
HARMAN

Connected
Car

Lifestyle
Audio

Professional
Solutions

Connected
Services

Corporate /
Eliminations

Sales

7,300M - $7,500M

~$3,320M

~$2,410M

~$1,045M

~$680M

(~$55M)

Operational EBITDA

$900 – $940M

~$480M

~$365M

~$140M

~$100M

(~$165M)

~12.4%

~14.5%

~15.1%

~13.4%

~14.7%

(~2.2%)

Operational EPS

$6.75 – $7.00


Total HARMAN	Fiscal 2017 Guidance	Fiscal 2018 Outlook	Fiscal 2019 Outlook
Sales	$7.3 - $7.5B	~$7.7B	~$8.6B
Operational EBITDA	~12.4%	~12.7%	~13.5%

Note: Operational measures exclude restructuring, acquisition-related items and non-recurring charges; a reconciliation to the GAAP forecast is included in the appendix.

Investor Call Today August 4, 2016

At 11:00 a.m. EDT today, HARMAN’s management will host an analyst and investor conference call to discuss the fourth quarter results. Those who wish to participate via audio in the earnings conference call should dial 1 (800) 671-8331 (U.S.) or +1 (303) 223-4361 (International) ten minutes before the call and reference HARMAN, Access Code: 21814040.

In addition, HARMAN invites you to visit the Investors section of its website at: www.harman.com where visitors can sign-up for email alerts and conveniently download copies of historical earnings releases and supporting slide presentations, among other documents. The fiscal fourth quarter earnings release and supporting materials were posted on the site at approximately 8:00 a.m. EDT today.

A replay of the call will also be available following its completion at approximately 1:00 p.m. EDT. The replay will be available through Friday, November 4, 2016 at 1:00 p.m. EDT. To listen to the replay, dial 1 (800) 633-8284 (U.S.) or +1 (402) 977-9140 (International), Access Code: 21814040. If you need technical assistance, call the toll-free Global Crossing Customer Care Line at 1 (800) 473-0602 (U.S.) or +1 (303) 446-4604 (International).

Annual Stockholders Meeting

The Company’s 2016 Annual Meeting of Stockholders will be held on Tuesday, December 6, 2016. More information about the Annual Meeting will be included in the Company’s definitive proxy statement for the 2016 Annual Meeting of Stockholders.

General Information

HARMAN (harman.com) designs and engineers connected products and solutions for automakers, consumers, and enterprises worldwide, including connected car systems, audio and visual products, enterprise automation solutions; and connected services. With leading brands including AKG^®, Harman Kardon^®, Infinity^®, JBL^®, Lexicon^®, Mark Levinson^® and Revel^®, HARMAN is admired by audiophiles, musicians and the entertainment venues where they perform around the world. More than 25 million automobiles on the road today are equipped with HARMAN audio and connected car systems. The Company’s software services power billions of mobile devices and systems that are connected, integrated and secure across all platforms, from work and home to car and mobile. HARMAN has a workforce of approximately 29,000 people across the Americas, Europe, and Asia and reported sales of $6.9 billion during the 12 months ended June 30, 2016. The Company’s shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.

A reconciliation of the non-GAAP measures included in this press release to the most comparable GAAP measures is provided in the tables contained at the end of this press release. HARMAN does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Forward-Looking Information

Except for historical information contained herein, the matters discussed in this earnings presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One should not place undue reliance on these statements. The Company bases these statements on particular assumptions that it has made in light of its industry experience, as well as its perception of historical trends, current market conditions, current economic data, expected future developments and other factors that the Company believes are appropriate under the circumstances. These statements involve risks, uncertainties and assumptions that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to: (1) the loss of one or more significant customers, the loss of a significant platform with an automotive customer or the in-sourcing of certain services by the Company’s automotive customers; (2) the Company’s ability to maintain a competitive technological advantage through innovation and leading product designs; (3) the Company’s ability to maintain profitability if there are delays in its product launches or increased pricing pressure from its customers; (4) fluctuations in currency exchange rates, particularly with respect to the value of the U.S. Dollar and the Euro; (5) the inability of the Company’s suppliers to deliver materials, parts and components including, without limitation, microchips and displays, at the scheduled rate and disruptions arising in connection therewith; (6) fluctuations in the price and supply of raw materials including, without limitation, petroleum, copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; (7) the Company’s failure to protect the security of its products and systems against cyber crime; (8) the Company’s failure to maintain the value of its brands and implementing a sufficient brand protection program; and (9) other risks detailed in the Harman International Industries, Incorporated Annual Report on Form 10-K for the fiscal year ended June 30, 2016 and other filings made by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement except as required by law.

This earnings release also makes reference to the Company’s awarded business or “backlog”, which represents the estimated future lifetime net sales for all of the Company’s automotive customers. The Company’s awarded business does not represent firm customer orders. The Company reports its awarded business primarily based on written award letters. To validate these awards, the Company uses various assumptions including global vehicle production forecasts, customer take rates for the Company’s products, revisions to product life cycle estimates and the impact of annual price reductions and exchange rates, among other factors. The term “take rate” represents the number of units sold by the Company divided by an estimate of the total number of vehicles of a specific vehicle line produced during the same timeframe. The assumptions the Company uses to validate these awards are updated and reported externally on an annual basis.

APPENDIX

Connected Car


FY 2016 Key Figures – Connected Car	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15			Including Currency Changes			Excluding Currency Changes¹			12M FY16			12M FY15			Including Currency Changes			Excluding Currency Changes¹
Net sales		843			758			11	%		10	%		3,102			2,911			7	%		11	%
Gross profit		213			169			26	%		25	%		776			673			15	%		19	%
Percent of net sales		25.3	%		22.3	%								25.0	%		23.1	%
SG&A		121			98			23	%		21	%		416			379			10	%		15	%
Operating income		92			71			30	%		29	%		359			294			22	%		24	%
Percent of net sales		10.9	%		9.4	%								11.6	%		10.1	%
EBITDA		115			89			29	%		28	%		439			364			21	%		23	%
Percent of net sales		13.6	%		11.8	%								14.2	%		12.5	%
Restructuring & non-recurring costs		2			—									6			5
Acquisition-related items		1			1									5			1
Non-GAAP - operational¹
Gross profit		215			171			26	%		25	%		780			678			15	%		19	%
Percent of net sales		25.5	%		22.5	%								25.2	%		23.3	%
SG&A		119			98			21	%		19	%		410			377			9	%		14	%
Operating income		96			72			33	%		32	%		370			300			23	%		25	%
Percent of net sales		11.4	%		9.5	%								11.9	%		10.3	%
EBITDA		116			88			32	%		31	%		442			364			22	%		24	%
Percent of net sales		13.8	%		11.6	%								14.3	%		12.5	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2016 were $843 million, an increase of 11 percent (10 percent ex-FX) compared to the prior year. The increase in net sales was due to higher take rates and stronger production.

On a non-GAAP basis in the fourth quarter of fiscal 2016, gross margin increased 300 basis points to 25.5 percent compared to the prior year primarily due to the impact of higher sales volume leveraging a more efficient fixed production cost base, lower warranty costs and manufacturing productivity. SG&A expense as a percent of sales increased 110 basis points to 14.1 percent compared to the prior year due to higher research and development costs to support awarded business.

On a GAAP basis in the fourth quarter of fiscal 2016, gross margin increased 300 basis points to 25.3 percent compared to the prior year. SG&A expense as a percent of sales increased 140 basis points to 14.4 percent compared to the prior year.

Connected Car Highlights

During the quarter, HARMAN secured new and follow-on awards to provide connected car solutions for customers, including Harley-Davidson, Porsche, Toyota and a North American automaker.

Advancing its telematics strategy, the Company secured an award from a premium German automaker for an industry-first solution that will act as the main gateway for the car, providing a unique connectivity platform. The solution integrates and powers expanded telematics features and enables system diagnostics, remote control capabilities and system updates/deployment. The automaker will also employ HARMAN’s over-the-air (OTA) update technology, ensuring that critical software fixes, feature additions and upgrades can be easily and securely transmitted and added to the vehicle – not only for HARMAN equipment but also for other on-board electronic control units (ECUs).

HARMAN launched embedded infotainment solutions in the BMW X3 and X4, the Genesis EQ900/G90 luxury sedan by Hyundai, the Kia K3 and K5 in China, and the TATA Tiago.

HARMAN continues to receive accolades for its industry leadership. In June, HARMAN was named Supplier of the Year at the Automotive Interior Expo in Stuttgart, Germany. Also, in Consumer Report’s most recent guide to Infotainment systems, the highest rated system is supplied by HARMAN.

Lifestyle Audio


FY 2016 Key Figures – Lifestyle Audio	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15			Including Currency Changes			Excluding Currency Changes¹			12M FY16			12M FY15			Including Currency Changes			Excluding Currency Changes¹
Net sales		578			463			25	%		25	%		2,138			1,813			18	%		21	%
Gross profit		201			146			38	%		38	%		723			588			23	%		26	%
Percent of net sales		34.8	%		31.5	%								33.8	%		32.5	%
SG&A		125			98			28	%		27	%		456			392			16	%		20	%
Operating income		75			48			58	%		61	%		267			196			36	%		37	%
Percent of net sales		13.1	%		10.3	%								12.5	%		10.8	%
EBITDA		92			59			57	%		58	%		324			237			37	%		38	%
Percent of net sales		15.9	%		12.7	%								15.2	%		13.1	%
Restructuring & non-recurring costs		5			3									12			26
Acquisition-related items		5			2									17			2
Non-GAAP - operational¹
Gross profit		202			145			40	%		40	%		726			579			25	%		29	%
Percent of net sales		35.1	%		31.3	%								34.0	%		31.9	%
SG&A		117			92			26	%		26	%		431			355			21	%		25	%
Operating income		86			52			64	%		66	%		295			224			32	%		35	%
Percent of net sales		14.8	%		11.3	%								13.8	%		12.4	%
EBITDA		94			61			53	%		55	%		329			260			26	%		30	%
Percent of net sales		16.3	%		13.3	%								15.4	%		14.4	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2016 were $578 million, an increase of 25 percent on a nominal and ex-FX basis compared to the prior year, primarily due to higher take rates and the acquisition of Bang & Olufsen Automotive in car audio, and continued strong demand for smart audio solutions in consumer.

On a non-GAAP basis in the fourth quarter of fiscal 2016, gross margin improved by 380 basis points to 35.1 percent compared to the prior year, primarily due to improved operating leverage as a result of higher sales volume, the acquisition of Bang & Olufsen Automotive and manufacturing productivity. SG&A expense as a percentage of sales increased 20 basis points to 20.2 percent primarily due to additional research and development to support new car audio awards.

On a GAAP basis in the fourth quarter of fiscal 2016, gross margin improved by 330 basis points to 34.8 percent compared to the prior year. SG&A expense as a percentage of sales increased 50 basis points compared to the prior year.

Lifestyle Audio Highlights

HARMAN won new business awards with Audi (Bang & Olufsen), Hyundai/Kia (Infinity), Lexus (Mark Levinson), SGM Wuling in China (Infinity), Subaru (Harman Kardon) and Toyota (JBL). In addition, the Company secured its first award for its premium Summit audio platform with an electric vehicle company. The scalable Summit platform provides the foundation to integrate HARMAN’s sound processing and sound management technologies, such as Quantum Logic Surround Sound™, Individual Sound Zones^TM, and Clari-Fi^TM, along with new features like Connected Jukebox and Virtual Venues, to create an unprecedented in-car audio experience. In addition, the Company secured new business awards for its Individual Sound Zones and HALOsonic™ suite of sound management solutions with several global car manufacturers.

During the quarter, the Company launched car audio solutions in the Audi Q5 (Bang & Olufsen), Dodge Viper SRT (Harman Kardon) and Maserati Quattroporte and Ghibli (Bowers & Wilkins). As further proof of HARMAN’s leadership in the industry, the Company won a Ford World Excellence Award for its Revel audio system available in Lincoln vehicles.

The Company introduced several new portable speakers, including the JBL Charge 3 and the Harman Kardon Go+Play. For the year, the Company won a total of 56 design and innovation awards across its consumer audio portfolio, including 23 Red Dot, 13 CES Innovation awards, 10 IFF, six Red Star and four EISA awards.

Professional Solutions


FY 2016 Key Figures – Professional Solutions	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15			Including Currency Changes			Excluding Currency Changes¹			12M FY16			12M FY15			Including Currency Changes			Excluding Currency Changes¹
Net sales		286			285			1	%		1	%		1,014			1,049			(3	%)		(1	%)
Gross profit		103			113			(8	%)		(8	%)		386			428			(10	%)		(8	%)
Percent of net sales		36.0	%		39.6	%								38.1	%		40.8	%
SG&A		86			86			(0	%)		0	%		317			326			(3	%)		(1	%)
Operating income		17			27			(35	%)		(35	%)		70			102			(32	%)		(30	%)
Percent of net sales		6.1	%		9.4	%								6.9	%		9.7	%
EBITDA		26			36			(29	%)		(28	%)		105			136			(23	%)		(21	%)
Percent of net sales		9.1	%		12.8	%								10.3	%		13.0	%
Restructuring & non-recurring costs		9			11									20			19
Acquisition-related items		2			—									2			—
Non-GAAP - operational¹
Gross profit		105			114			(8	%)		(8	%)		389			426			(9	%)		(7	%)
Percent of net sales		36.7	%		40.1	%								38.4	%		40.7	%
SG&A		77			77			0	%		1	%		297			306			(3	%)		(1	%)
Operating income		28			38			(25	%)		(25	%)		92			121			(24	%)		(22	%)
Percent of net sales		9.8	%		13.2	%								9.0	%		11.5	%
EBITDA		34			46			(25	%)		(24	%)		122			153			(20	%)		(18	%)
Percent of net sales		12.0	%		16.0	%								12.1	%		14.6	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2016 were $286 million, an increase of one percent compared to the prior year on a nominal and ex-FX basis.

On a non-GAAP basis in the fourth quarter of fiscal 2016, gross margin decreased 340 basis points to 36.7 percent, driven by product mix and new factory start-up costs in Hungary. SG&A expense as a percentage of sales was in-line with the prior year.

On a GAAP basis in the fourth quarter of fiscal 2016, gross margin decreased 360 basis points to 36.0 percent. SG&A expense as percent of sales was in-line with the prior year.

Professional Solutions Highlights

HARMAN’s entertainment and enterprise solutions were selected by leading system integrators and installers around the world. Notable installations included Heinz Field in Pittsburgh, the Hyatt Regency Hotel in Mexico, and the Burj Al Arab Hotel in Dubai. HARMAN’s solutions also powered a wide range of high-profile special events, music festivals, summer concert tours and televised award shows, including the 51^st Country Music Awards.

The division launched 24 major new products during the quarter, some of which were recognized with innovation awards from industry experts.

Connected Services


FY 2016 Key Figures – Connected Services	Three Months Ended June 30												Twelve Months Ended June 30
							Increase (Decrease)												Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15			Including Currency Changes			Excluding Currency Changes¹			12M FY16			12M FY15			Including Currency Changes			Excluding Currency Changes¹
Net sales		185			173			7	%		8	%		694			381			82	%		96	%
Gross profit		52			63			(18	%)		(16	%)		214			127			69	%		79	%
Percent of net sales		28.2	%		36.7	%								30.8	%		33.3	%
SG&A		39			50			(22	%)		(22	%)		178			86			107	%		115	%
Operating income		13			14			(1	%)		4	%		35			40			(13	%)		(3	%)
Percent of net sales		7.3	%		7.9	%								5.1	%		10.6	%
EBITDA		22			27			(21	%)		(19	%)		79			57			39	%		51	%
Percent of net sales		11.8	%		15.9	%								11.4	%		14.9	%
Restructuring & non-recurring costs		1			—									3			—
Acquisition-related items		4			15									32			15
Non-GAAP - operational¹
Gross profit		52			63			(18	%)		(16	%)		214			127			69	%		79	%
Percent of net sales		28.2	%		36.7	%								30.8	%		33.3	%
SG&A		34			35			(3	%)		(2	%)		143			71			101	%		110	%
Operating income		19			29			(36	%)		(34	%)		71			56			27	%		38	%
Percent of net sales		10.0	%		16.7	%								10.2	%		14.6	%
EBITDA		22			30			(29	%)		(27	%)		85			60			42	%		54	%
Percent of net sales		11.7	%		17.6	%								12.2	%		15.7	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Net sales in the fourth quarter of fiscal 2016 were $185 million, an increase of seven percent (eight percent ex-FX) due to higher demand for engineering services.

The timing of booked revenue is tied to specific customer acceptance milestones in longer-term engineering projects, while expenses are recognized as incurred. This can result in margin volatility. As a result, for the fourth quarter, on non-GAAP basis, gross margin declined 850 basis points to 28.2 percent. Beginning in fiscal 2017, HARMAN will use percentage of completion accounting for significant new contracts, which is expected to reduce some of the volatility. SG&A expense as a percentage of sales decreased 180 basis points to 18.2 percent due to better leverage on higher sales.

On a GAAP basis, gross margin decreased 850 basis points to 28.2 percent. SG&A expense as a percentage of sales declined 780 basis points to 21.0 percent, primarily due to transaction costs related to the acquisition of Symphony Teleca incurred in the prior year.

Connected Services Highlights

HARMAN secured business to provide software services for BMW, Microsoft, PSA Group and Reliance Jio. The Company also won awards for its cloud-based OTA software update technology from leading OEMs such as FCA, Porsche and Subaru.

During the quarter, HARMAN partnered with NXP Semiconductors to jointly offer new software gateway solutions to the automotive market. NXP’s secured gateway processors, embedded with the new HARMAN update technology, will enable every ECU, regardless of memory, processor or network resource, to benefit from secure OTA updates.

HARMAN was also recognized with a number of industry accolades for its products and services, including the EGR Data Analytics Partner of the Year for Europe and the IoT Business Impact Award by IoT Evolution Expo.

Other (Corporate)


FY 2016 Key Figures – Other	Three Months Ended June 30											Twelve Months Ended June 30
						Increase (Decrease)										Increase (Decrease)
$ millions (except per share data)	3M FY16			3M FY15		Including Currency Changes			Excluding Currency Changes¹			12M FY16		12M FY15		Including Currency Changes			Excluding Currency Changes¹
SG&A		44			46		(3	%)		(3	%)		151		164		(8	%)		(8	%)
Restructuring & non-recurring costs		2			—								—		—
Acquisition-related items		(1	)		5								—		16
Non-GAAP - operational¹
SG&A		43			41		7	%		7	%		152		148		2	%		3	%

1	A non-GAAP measure, see reconciliations of non-GAAP measures later in this release.

Other (Corporate) SG&A expense includes compensation, benefit and occupancy costs for corporate employees, new technology innovation and expenses associated with the Company’s brand identity campaign. On a non-GAAP basis, Corporate SG&A as a percentage of total net sales declined 10 basis points compared to the prior year. On a GAAP basis, Corporate SG&A as a percentage of total net sales declined 30 basis points compared to the prior year.

HARMAN International Industries, Incorporated

Consolidated Statements of Income


(In thousands, except earnings per share data; unaudited)	Three Months Ended June 30,					Twelve Months Ended June 30,
	2016			2015		2016		2015
Net sales	$	1,880,549		$	1,678,633	$	6,911,676	$	6,155,297
Cost of sales		1,312,815			1,187,457		4,818,585		4,338,193
Gross profit		567,734			491,176		2,093,091		1,817,104
Selling, general and administrative expenses		413,680			377,629		1,513,064		1,347,510
Operating income		154,054			113,547		580,027		469,594
Other expenses:
Interest expense, net		8,924			6,068		33,482		13,929
Foreign exchange (gains) losses, net		(1,927	)		3,643		685		(723	)
Miscellaneous, net		4,090			3,175		15,352		10,107
Income before income taxes		142,967			100,661		530,508		446,281
Income tax expense, net		70,039			27,019		168,057		103,269
Equity in net loss of unconsolidated subsidiaries		—			—		—		23
Net income		72,928			73,642		362,451		342,989
Net income attributable to non-controlling interest		15			465		717		309
Net income attributable to HARMAN International Industries, Incorporated		72,913			73,177		361,734		342,680

Earnings per share:
Basic	$	1.02		$	1.02	$	5.03	$	4.89
Diluted	$	1.01		$	1.01	$	4.99	$	4.84
Weighted average shares outstanding:
Basic		71,321			71,923		71,866		70,147
Diluted		71,958			72,694		72,532		70,870

HARMAN International Industries, Incorporated

Consolidated Balance Sheets


(In thousands; unaudited)	June 30,		June 30,
	2016		2015
ASSETS
Current Assets
Cash and cash equivalents	$	602,300	$	649,513
Receivables, net		1,122,920		1,024,139
Inventories		706,084		693,574
Other current assets		487,151		461,366

Total current assets		2,918,455		2,828,592

Property, plant and equipment, net		593,290		552,421
Intangible assets, net		476,284		669,667
Goodwill		1,510,279		1,287,180
Deferred tax assets, net		140,181		100,032
Other assets		415,553		428,008

Total assets	$	6,054,042	$	5,865,900


LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt	$	86,641	$	4,550
Short-term debt		—		1,021
Accounts payable		867,279		918,910
Accrued liabilities		670,746		907,024
Accrued warranties		178,367		163,331
Income taxes payable		28,773		76,131

Total current liabilities		1,831,806		2,070,967

Borrowings under revolving credit facility		523,000		283,125
Long-term debt		793,506		797,542
Pension liability		216,095		186,662
Other non-current liabilities		237,162		134,778

Total liabilities		3,601,569		3,473,074

Total HARMAN International Industries, Incorporated shareholders’ equity		2,452,473		2,374,613

Noncontrolling interest		—		18,213

Total equity		2,452,473		2,392,826

Total liabilities and equity	$	6,054,042	$	5,865,900

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


(In thousands except earnings per share data; unaudited)	Three Months Ended June 30, 2016
	GAAP			Adjustments			Non-GAAP - Operational
Net sales	$	1,880,549			—		$	1,880,549
Cost of sales		1,312,815			(5,153	)^a		1,307,662
Gross profit		567,734			5,153			572,887
Selling, general and administrative expenses		413,680			(25,296	)^b		388,384
Operating income		154,054			30,449			184,503
Other expenses:
Interest expense, net		8,924			—			8,924
Foreign exchange (gains) losses, net		(1,927	)		—			(1,927	)
Miscellaneous, net		4,090			—			4,090
Income before income taxes		142,967			30,449			173,416
Income tax expense, net		70,039			(9,458	)^c		60,581
Net income		72,928			39,907			112,835
Net income attributable to non-controlling interest		15			—			15
Net income attributable to HARMAN International Industries, Incorporated	$	72,913		$	39,907		$	112,820

Earnings per share:
Basic	$	1.02		$	0.56		$	1.58
Diluted	$	1.01		$	0.55		$	1.57
Weighted average shares outstanding:
Basic		71,321						71,321
Diluted		71,958						71,958

a)	Restructuring expense in Cost of Sales was $5.2 million for projects to increase manufacturing productivity.

Restructuring expense in SG&A was $8.2 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; acquisition-related expenses were $11.9 million, including $13.5 million of intangible amortization expenses; other non-recurring expense included in SG&A was $5.2 million, which primarily relates to incremental costs incurred related to productivity improvement initiatives.

The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country. Also included is a discrete tax charge of $18.3 million for deemed income on foreign earnings related to fiscal years 2015 and 2014. Included in both GAAP and Operational income tax expense, net is $9.6 million for fiscal year 2016.

HARMAN has provided a reconciliation of non-GAAP measures in order to provide the users of these consolidated financial statements with a better understanding of its restructuring, acquisition-related, and non-recurring charges. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


(In thousands except earnings per share data; unaudited)	Twelve Months Ended June 30, 2016
	GAAP		Adjustments			Non-GAAP - Operational
Net sales	$	6,911,676		—		$	6,911,676
Cost of sales		4,818,585		(10,367	)^a		4,808,218
Gross profit		2,093,091		10,367			2,103,458
Selling, general and administrative expenses		1,513,064		(86,259	)^b		1,426,805
Operating income		580,027		96,626			676,653
Other expenses:
Interest expense, net		33,482		—			33,482
Foreign exchange losses (gains), net		685		—			685
Miscellaneous, net		15,352		(3,545	)		11,807
Income before income taxes		530,508		100,171			630,679
Income tax expense, net		168,057		9,210	^c		177,267
Net income		362,451		90,961			453,412
Net income attributable to non-controlling interest		717		—			717
Net income attributable to HARMAN International Industries, Incorporated	$	361,734	$	90,961		$	452,695

Earnings per share:
Basic	$	5.03	$	1.27		$	6.30
Diluted	$	4.99	$	1.25		$	6.24
Weighted average shares outstanding:
Basic		71,866					71,866
Diluted		72,532					72,532

a)	Restructuring expense in Cost of Sales was $10.4 million for projects to increase manufacturing productivity.

Restructuring expense in SG&A was $14.5 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; acquisition-related expenses were $55.9 million, including $54.6 million of intangible amortization expenses; other non-recurring expense included in SG&A was $15.8 million, which primarily relates to incremental costs incurred related to productivity improvement initiatives.

The tax (expense) benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country. Also included is a discrete tax charge of $18.3 million for deemed income on foreign earnings related to fiscal years 2015 and 2014. Included in both GAAP and Operational income tax expense, net is $9.6 million for fiscal year 2016.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


(In thousands except earnings per share data; unaudited)	Three Months Ended June 30, 2015
	GAAP		Adjustments			Non-GAAP - Operational
Net sales	$	1,678,633	$	0		$	1,678,633
Cost of sales		1,187,457		(1,589	)^a		1,185,868
Gross profit		491,176		1,589			492,765
Selling, general and administrative expenses		377,629		(34,715	)^b		342,914
Operating income		113,547		36,304			149,851
Other expenses:
Interest expense, net		6,068		—			6,068
Foreign exchange losses (gains), net		3,643		—			3,643
Miscellaneous, net		3,175		(1,224	)		1,951
Income before income taxes		100,661		37,528			138,189
Income tax expense, net		27,019		10,812	^c		37,831
Net income		73,642		26,716			100,358
Net income attributable to non-controlling interest		465		—			465
Net income attributable to HARMAN International Industries, Incorporated	$	73,177	$	26,716		$	99,893

Earnings per share:
Basic	$	1.02	$	0.37		$	1.39
Diluted	$	1.01	$	0.37		$	1.37
Weighted average shares outstanding:
Basic		71,923					71,923
Diluted		72,694					72,694

a)	Restructuring expense in Cost of Sales was $1.6 million for projects to increase manufacturing productivity.

Restructuring expense in SG&A was $3.7 million primarily due to projects to increase productivity in engineering, manufacturing and administrative functions; other non-recurring expense included in SG&A was $7.9 million. Acquisition-related expenses were $23.1 million, including $14.3 million of intangible amortization expenses.

c)	The tax (expense) benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the discrete tax rate within that specific country.

HARMAN International Industries, Incorporated

Consolidated Statement of Income

Reconciliation of GAAP to Non-GAAP Results


(In thousands except earnings per share data; unaudited)	Twelve Months Ended June 30, 2015
	GAAP			Adjustments			Non-GAAP - Operational
Net sales	$	6,155,297		$	0		$	6,155,297
Cost of sales		4,338,193			6,426	^a		4,344,619
Gross profit		1,817,104			(6,426	)		1,810,678
Selling, general and administrative expenses		1,347,510			(90,682	)^b		1,256,828
Operating income		469,594			84,256			553,850
Other expenses:
Interest expense, net		13,929			—			13,929
Foreign exchange losses (gains), net		(723	)		—			(723	)
Miscellaneous, net		10,107			(1,224	)		8,883
Income before income taxes		446,281			85,480			531,761
Income tax expense, net		103,269			23,611	^c		126,880
Equity in net loss of unconsolidated subsidiaries		23			—			23
Net income		342,989			61,869			404,858
Net income attributable to non-controlling interest		309			—			309
Net income attributable to HARMAN International Industries, Incorporated	$	342,680		$	61,869		$	404,549

Earnings per share:
Basic	$	4.89		$	0.88		$	5.77
Diluted	$	4.84		$	0.87		$	5.71
Weighted average shares outstanding:
Basic		70,147						70,147
Diluted		70,870						70,870

a)	Restructuring expense in Cost of Sales was $9.4 million for projects to increase manufacturing productivity, offset by a $17.3 million accrual reversal for a US Customs / NAFTA related exposure.

Restructuring expense in SG&A was $42.6 million primarily due to projects to increase productivity in engineering and administrative functions. Other non-recurring expense includes in SG&A was $13.4 million. Acquisition-related expenses were $34.7 million, including $15.2 million of intangible amortization expenses.

c)	The tax benefits are calculated by multiplying the actual restructuring / non-recurring charge in each individual country by the statutory tax rate within that specific country.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact


(In thousands; unaudited)	Three Months Ended June 30,					Increase / (Decrease)
	2016		2015			Increase / (Decrease)
Net sales - nominal currency	$	1,880,549	$	1,678,633			12	%
Effects of foreign currency translation⁽¹⁾				5,018

Net sales - local currency	$	1,880,549	$	1,683,651			12	%
Gross profit - nominal currency	$	567,734	$	491,176			16	%
Effects of foreign currency translation⁽¹⁾				(139	)

Gross profit - local currency	$	567,734	$	491,037			16	%
SG&A - nominal currency	$	413,680	$	377,629			10	%
Effects of foreign currency translation⁽¹⁾				(801	)

SG&A - local currency	$	413,680	$	378,430			9	%
Operating income - nominal currency	$	154,054	$	113,547			36	%
Effects of foreign currency translation⁽¹⁾				(940	)

Operating income - local currency	$	154,054	$	112,607			37	%
Net income attributable to HARMAN International Industries, Incorporated - nominal currency	$	72,913	$	73,177			0	%
Effects of foreign currency translation⁽¹⁾				(488	)

Net income attributable to HARMAN International Industries, Incorporated - local currency	$	72,913	$	72,689			0	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of these consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of Non-GAAP Results

Foreign Currency Translation Impact


EXCLUDING restructuring and non-recurring charges (In thousands; unaudited)	Three Months Ended June 30,					Increase / (Decrease)
	2016		2015			Increase / (Decrease)
Net sales - nominal currency	$	1,880,549	$	1,678,633			12	%
Effects of foreign currency translation⁽¹⁾				5,018

Net sales - local currency	$	1,880,549	$	1,683,651			12	%
Gross profit - nominal currency	$	572,887	$	492,765			16	%
Effects of foreign currency translation⁽¹⁾				(93	)

Gross profit - local currency	$	572,887	$	492,672			16	%
SG&A - nominal currency	$	388,384	$	342,914			13	%
Effects of foreign currency translation⁽¹⁾				(694	)

SG&A - local currency	$	388,384	$	343,608			13	%
Operating income - nominal currency	$	184,503	$	149,851			23	%
Effects of foreign currency translation⁽¹⁾				(787	)

Operating income - local currency	$	184,503	$	149,064			24	%
Net income attributable to HARMAN International Industries, Incorporated - nominal currency	$	112,820	$	99,893			13	%
Effects of foreign currency translation⁽¹⁾				(335	)

Net income attributable to HARMAN International Industries, Incorporated - local currency	$	112,820	$	99,558			13	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN has provided a reconciliation of the non-GAAP measures in the table above to provide the users of the consolidated financial statements with a better understanding of the Company’s performance. Because changes in currency exchange rates affect its reported financial results, the Company shows the rates of change both including and excluding the effect of these changes in exchange rates. The Company encourages readers of its financial statements to evaluate its financial performance excluding the impact of foreign currency translation. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. This measurement should be considered in addition to, but not as a substitute for, the information contained in HARMAN’s consolidated financial statements prepared in accordance with US GAAP.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact


(In thousands; unaudited)	Twelve Months Ended June 30,					Increase / (Decrease)
	2016		2015			Increase / (Decrease)
Net sales - nominal currency	$	6,911,676	$	6,155,297			12	%
Effects of foreign currency translation⁽¹⁾				(209,768	)

Net sales - local currency	$	6,911,676	$	5,945,529			16	%
Gross profit - nominal currency	$	2,093,091	$	1,817,104			15	%
Effects of foreign currency translation⁽¹⁾				(51,741	)

Gross profit - local currency	$	2,093,091	$	1,765,363			19	%
SG&A - nominal currency	$	1,513,064	$	1,347,510			12	%
Effects of foreign currency translation⁽¹⁾				(39,828	)

SG&A - local currency	$	1,513,064	$	1,307,682			16	%
Operating income - nominal currency	$	580,027	$	469,594			24	%
Effects of foreign currency translation⁽¹⁾				(11,912	)

Operating income - local currency	$	580,027	$	457,682			27	%
Net income attributable to HARMAN International Industries, Incorporated - nominal currency	$	361,734	$	342,680			6	%
Effects of foreign currency translation⁽¹⁾				(7,341	)

Net income attributable to HARMAN International Industries, Incorporated - local currency	$	361,734	$	335,339			8	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

HARMAN International Industries, Incorporated

Selected Financial Data

Reconciliation of GAAP to Non-GAAP Results

Foreign Currency Translation Impact


EXCLUDING restructuring and non-recurring charges (In thousands; unaudited)	Twelve Months Ended June 30,					Increase / (Decrease)
	2016		2015			Increase / (Decrease)
Net sales - nominal currency	$	6,911,676	$	6,155,297			12	%
Effects of foreign currency translation⁽¹⁾				(209,768	)

Net sales - local currency	$	6,911,676	$	5,945,529			16	%
Gross profit - nominal currency	$	2,103,458	$	1,810,678			16	%
Effects of foreign currency translation⁽¹⁾				(52,243	)

Gross profit - local currency	$	2,103,458	$	1,758,435			20	%
SG&A - nominal currency	$	1,426,805	$	1,256,828			14	%
Effects of foreign currency translation⁽¹⁾				(36,130	)

SG&A - local currency	$	1,426,805	$	1,220,698			17	%
Operating income - nominal currency	$	676,653	$	553,850			22	%
Effects of foreign currency translation⁽¹⁾				(16,113	)

Operating income - local currency	$	676,653	$	537,737			26	%
Net income attributable to HARMAN International Industries, Incorporated - nominal currency	$	452,695	$	404,549			12	%
Effects of foreign currency translation⁽¹⁾				(11,541	)

Net income attributable to HARMAN International Industries, Incorporated - local currency	$	452,695	$	393,008			15	%

(1)	Impact of restating prior year results at current year foreign exchange rates.

Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results


(In thousands, except earnings per share data; unaudited)	Three Months Ended June 30, 2016							Three Months Ended June 30, 2015
	GAAP		Adjustments			Non-GAAP - Operational		GAAP		Adjustments			Non-GAAP - Operational
HARMAN
Operating income		154,054		30,449			184,503		113,547		36,304			149,851
Depreciation & Amortization		58,169		(17,694	)		40,475		54,421		(16,844	)		37,577
EBITDA		212,223		12,755			224,978		167,968		19,460			187,428
CONNECTED CAR
Operating income		92,153		3,632			95,785		71,114		1,043			72,157
Depreciation & Amortization		22,751		(2,493	)		20,258		18,053		(2,429	)		15,624
EBITDA		114,904		1,139			116,043		89,167		(1,386	)		87,781
LIFESTYLE AUDIO
Operating income		75,372		10,172			85,544		47,663		4,516			52,179
Depreciation & Amortization		16,581		(7,768	)		8,813		11,089		(1,778	)		9,311
EBITDA		91,953		2,404			94,357		58,752		2,738			61,490
PROFESSIONAL SOLUTIONS
Operating income		17,471		10,599			28,070		26,874		10,634			37,508
Depreciation & Amortization		8,463		(2,180	)		6,283		9,462		(1,435	)		8,027
EBITDA		25,934		8,419			34,353		36,336		9,199			45,535
CONNECTED SERVICES
Operating income		13,436		5,104			18,540		13,580		15,182			28,762
Depreciation & Amortization		8,296		(5,252	)		3,044		13,828		(12,167	)		1,661
EBITDA		21,732		(148	)		21,584		27,408		3,015			30,423

Harman International Industries, Incorporated

Reconciliation of GAAP to Non-GAAP Results


(In thousands, except earnings per share data; unaudited)	Twelve Months Ended June 30, 2016							Twelve Months Ended June 30, 2015
	GAAP		Adjustments			Non-GAAP - Operational		GAAP		Adjustments			Non-GAAP - Operational
HARMAN
Operating income		580,027		96,626			676,653		469,594		84,256			553,850
Depreciation & Amortization		224,010		(64,982	)		159,028		169,231		(24,181	)		145,050
EBITDA		804,037		31,644			835,681		638,825		60,075			698,900
CONNECTED CAR
Operating income		359,255		11,100			370,355		294,121		6,290			300,411
Depreciation & Amortization		79,930		(8,016	)		71,914		69,618		(6,257	)		63,361
EBITDA		439,185		3,084			442,269		363,739		33			363,772
LIFESTYLE AUDIO
Operating income		266,655		28,551			295,206		196,138		27,815			223,953
Depreciation & Amortization		57,254		(23,185	)		34,069		40,601		(4,157	)		36,444
EBITDA		323,909		5,366			329,275		236,739		23,658			260,397
PROFESSIONAL SOLUTIONS
Operating income		69,775		21,829			91,604		102,002		18,544			120,546
Depreciation & Amortization		34,757		(4,069	)		30,688		34,112		(1,600	)		32,512
EBITDA		104,532		17,760			122,292		136,114		16,944			153,058
CONNECTED SERVICES
Operating income		35,293		35,580			70,873		40,492		15,181			55,673
Depreciation & Amortization		43,534		(29,712	)		13,822		16,312		(12,166	)		4,146
EBITDA		78,827		5,868			84,695		56,804		3,015			59,819

Harman International Industries, Incorporated

Intercompany Revenue Reconciliation, 3 Months Ended June 30, 2016


Three Months Ended June 30, 2016 (In thousands; unaudited)	Connected Car		Lifestyle Audio		Professional Solutions		Connected Services		Eliminations (Other)			HARMAN
Net Trade Sales	$	842,609	$	577,092	$	285,585	$	175,263		—		$	1,880,549
Intercompany Sales		20		450		885		9,603		(10,958	)		—
Net Sales		842,629		577,542		286,470		184,866		(10,958	)		1,880,549

Harman International Industries, Incorporated

Intercompany Revenue Reconciliation, 12 Months Ended June 30, 2016


Twelve Months Ended June 30, 2016 (In thousands; unaudited)	Connected Car		Lifestyle Audio		Professional Solutions		Connected Services		Eliminations (Other)			HARMAN
Net Trade Sales	$	3,101,818	$	2,135,500	$	1,011,744	$	662,575	$	39		$	6,911,676
Intercompany Sales		20		2,252		2,719		31,732		(36,723	)		—
Net Sales		3,101,838		2,137,752		1,014,463		694,307		(36,684	)		6,911,676

HARMAN International Industries, Incorporated

Total Liquidity Reconciliation


Total Company Liquidity $ millions	June 30, 2016
Cash & cash equivalents	$	602
Available credit under Revolving Credit Facility		673

Total Liquidity	$	1,275

Harman International Industries, Incorporated

Fiscal 2017 Guidance GAAP to Non-GAAP Reconciliation


($ In Millions, except earnings per share data)	GAAP	Adjustments	Non-GAAP
Operating Income	$615 - $655
Restructuring		~$50
Acquisition Related		~50
Non-Recurring		~5
Adjusted Operating Income		105	$720 - $760
Interest Expense & Misc	50 – 60		50 - 60
Pre-Tax Income	565 – 595	105	670 - 700
Income Tax Expense	155 – 165	30	185 - 195
Net Income	410 – 430	75	485 - 505
EPS	$5.70 - $5.95	$1.05	$6.75 - $7.00