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, Conn.--(BUSINESS WIRE)-- 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.

This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160804005361/en/

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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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 Year2017

Total HARMAN

ConnectedCar

LifestyleAudio

ProfessionalSolutions

ConnectedServices

Corporate /Eliminations

Sales

$7,300M - $7,500M

~$3,320M

~$2,410M

~$1,045M

~$680M

(~$55M)

Operational EBITDA

$900 – $940M   ~12.4%

~$480M   ~14.5%

~$365M   ~15.1%

~$140M   ~13.4%

~$100M   ~14.7%

(~$165M)   (~2.2%)

Operational EPS

$6.75 – $7.00

Total HARMAN				Fiscal 2017Guidance			Fiscal 2018Outlook			Fiscal 2019Outlook
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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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 ZonesTM, and Clari-FiTM, 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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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 51st 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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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)				3MFY16			3MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1			12MFY16			12MFY15			IncludingCurrencyChanges			ExcludingCurrencyChanges1
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 EndedJune 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 InternationalIndustries, 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.
b)		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.
c)		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 EndedJune 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			9,210c			177,267
Net income				362,451			90,961			453,412
Net income attributable to non-controlling interest				717			-			717
Net income attributable to HARMAN InternationalIndustries, 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.
b)		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.
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. 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)				Three Months EndedJune 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			10,812c			37,831
Net income				73,642			26,716			100,358
Net income attributable to non-controlling interest				465			-			465
Net income attributable to HARMAN InternationalIndustries, 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.
b)		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 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 EndedJune 30, 2015
				GAAP			Adjustments			Non-GAAP -Operational
Net sales				$6,155,297			$0			$6,155,297
Cost of sales				4,338,193			6,426a			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			23,611c			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 InternationalIndustries, 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.
b)		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 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
Selected Financial Data
Reconciliation of GAAP to Non-GAAP Results
Foreign Currency Translation Impact
(In thousands; unaudited)				Three Months EndedJune 30,						Increase /(Decrease)
				2016			2015
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 EndedJune 30,						Increase /(Decrease)
				2016			2015
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 EndedJune 30,						Increase /(Decrease)
				2016			2015
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 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
EXCLUDING restructuring and non-recurring charges (In thousands; unaudited)				Twelve Months EndedJune 30,						Increase /(Decrease)
				2016			2015
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 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
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data; unaudited)				Three Months EndedJune 30, 2016									Three Months EndedJune 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 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
Reconciliation of GAAP to Non-GAAP Results
(In thousands, except earnings per share data;unaudited)				Twelve Months EndedJune 30, 2016									Twelve Months EndedJune 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 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
Intercompany Revenue Reconciliation, 3 Months Ended June 30, 2016
Three Months Ended June 30, 2016 (In thousands; unaudited)				ConnectedCar			LifestyleAudio			ProfessionalSolutions			ConnectedServices			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 EndedJune 30, 2016(In thousands; unaudited)				ConnectedCar			LifestyleAudio			ProfessionalSolutions			ConnectedServices			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				June 30,2016
$ millions
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

View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005361/en/

Harman International Industries, Incorporated
Darrin Shewchuk, +1 203-328-3834
Senior Director, Corporate Communications
[email protected]
or
Yijing Brentano, +1 203-328-3500
Vice President, Investor Relations
[email protected]

Source: Harman International Industries, Incorporated