General standard disclosure

Strategy & AnalysisExpand
G1 – CEO statementCEO statement
Organizational ProfileExpand
G3 – Name of organizationHARMAN International Industries, Incorporated
G4 – Primary brands, products and servicesWe believe we are a worldwide leader in the development, manufacture and marketing of high quality, high fidelity audio products, lighting solutions and electronic systems, as well as digitally integrated audio and infotainment systems for the automotive industry. We have developed a broad range of product offerings, which we sell in our principal markets under our renowned brand names, including AKG®, Crown®, JBL®, Infinity®, Harman Kardon®, Lexicon®, dbx®, BSS®, Studer®, Soundcraft®, Mark Levinson®, Becker®, Revel®, Logic 7®, Martin® and Selenium®. We have built these brands by developing our engineering, manufacturing and marketing competencies, and have employed these resources to establish our company as a leader in the markets we serve.

We report our business on the basis of four segments. Our Infotainment, Lifestyle and Professional segments are based on our strategic approach to the markets and customers we serve. Our fourth segment, Other, primarily includes compensation, benefit and occupancy costs for corporate employees, net of allocations and expenses associated with new technology innovation and our corporate brand identity campaign.
G5 – Location of the organization’s headquartersOur headquarters is located at 400 Atlantic Street, Suite 1500, Stamford, CT 06901 USA
G6 – Number of countries where the organization operatesIn the United States, our primary manufacturing facilities are located in Kentucky, Indiana and Utah. Outside of the United States, we have manufacturing facilities in Austria, Brazil, China, Hungary, France, Germany, Mexico, Denmark and the United Kingdom.
G7 – Nature of ownership and legal formHARMAN is a publicly traded company. Our common stock is listed on the New York Stock Exchange and is reported on the New York Stock Exchange Composite Tape under the symbol HAR.
G8 – Markets servedOur products are sold worldwide, with the largest markets located in the United States and Germany. We believe significant opportunities exist to grow our business in all three of our business segments in emerging markets such as Brazil, Russia, India and China (“BRIC”).
G9 – Scale of the organizationFY2014 net sales were $5.348 billion compared to $4.298 billion, an increase of 24.4 percent or an increase of 22.0 percent excluding foreign currency translation

Our European manufacturing facilities for our Infotainment segment are located in Germany and Hungary. We also have manufacturing facilities in the U.S., Mexico and China. These facilities are used to manufacture infotainment systems.

Our European manufacturing facilities for our Lifestyle segment are located in Germany, France and Hungary. These facilities are used to manufacture automotive audio systems. Our North American manufacturing facilities are located in Mexico for automotive audio components and Kentucky for automotive electronics. We also manufacture automotive audio and electronic components in China.

Our Lifestyle segment primarily uses original design manufacturers and outsources the manufacture of its home audio products to generate cost efficiencies, deliver products faster and better serve our customers. These manufacturers are primarily based in China. We also have a facility in Brazil that produces aftermarket automotive audio products.

In North America, our principal Professional segment’s manufacturing facilities are located in Mexico for loudspeakers, in Indiana for electronic products, including amplifiers and effects devices, and in Washington for video and control products.

Our Professional segment’s electronics manufacturing in Europe includes mixing consoles in the United Kingdom, lighting solutions in Denmark and microphones and headphones in Austria. Our Professional segment’s electronics manufacturing in Brazil includes electronic loudspeakers, amplifiers and other components. Our Professional segment’s manufacturing in China includes audio electronics and loudspeakers.
G10 & General workforce statisticsNumber of employees: At June 30, 2014, we had approximately 14,202 full-time employees, including 5,599 employees located in North America and 8,603 employees located outside of North America.
G11 – Percentage of total employees covered by collective bargaining agreementsApproximately 11 percent of total employees are covered by collective bargaining agreements.
G12 – Organization’s supply chainWe use rare earth minerals in our products, specifically rare earth neodymium magnets. A significant disruption in the supply of neodymium would have a material adverse impact on our consolidated results of operations. We also use externally sourced microchips in many of our products. A significant disruption in our microchip supply chain and an inability to obtain from alternative sources would have a material adverse impact on our consolidated results of operations. Several independent suppliers manufacture loudspeakers and electronic products. The loss of any one of these suppliers could have a material adverse impact on our consolidated results of operations or consolidated financial condition.

The Company’s Standard Terms and Conditions require its suppliers to agree to the Company’s Supplier Code of Conduct (the “Code of Conduct”), which conforms with SA8000’s guidance and includes Labour Standards and is also available on the Company website. The Standard Terms and Conditions and the Code of Conduct are incorporated into any supplier contract with the Company.
G13 – Changes regarding the organization’s size, structure, ownership, or its supply chainAcquisitions:

On April 10, 2013 (the “iOnRoad Acquisition Date”), we acquired all of the outstanding shares of iOnRoad Technologies, Ltd. (“iOnRoad”), a developer of vehicle safety systems also know as Advanced Driver Assistance Systems. The operating results of iOnRoad are included in our Consolidated Statements of Income from the iOnRoad Acquisition Date within our Infotainment segment.

On February 28, 2013, we acquired all of the issued and outstanding shares of Martin Professional A/S (“Martin”), a leading provider of dynamic lighting solutions for the entertainment, architectural and commercial sectors. The operating results of Martin are included in our Consolidated Statements of Income from the date of the acquisition within our Professional segment.

On October 13, 2012, (the “Interchain Acquisition Date”) we acquired certain assets and liabilities of Interchain Solution Private Limited (“Interchain”), a technology product company that specializes in developing telematics, fleet management and Android® based in-vehicle infotainment and location-based solutions. The operating results of Interchain are included in our Consolidated Statements of Income from the Interchain Acquisition Date within our Infotainment segment.

Between FY2012-2014, the company grew in size by 12 percent. The structure remains nearly the same with three business divisions and a corporate division to support the organization.
G14 – Precautionary approach or principle applicationElements of the precautionary approach have been integrated into the organization’s approach to risk management. New products and capital investments are reviewed for potential impacts to the environment and potential risks are identified and addressed accordingly.
G15 – External economic, environmental and social charters, principles, or other initiativesHARMAN has structured its sustainability strategy around the CERES principles and roadmap.

The Chief Executive Officer at HARMAN has made a commitment to the United Nations Global Compact. Participation in the Global Compact is a widely visible commitment to the implementation, disclosure and promotion of its ten universal principles.

HARMAN has certified all key production facilities to ISO 14001, the global environmental management standard.
G16 – Memberships of associationsHARMAN participates in a number of technical and professional memberships around the world, as a company and as individual employees.
Identified Material Aspects & BoundariesExpand
G17 & Entities included in the organization’s consolidated financial statementsSEC Form 10-K for period ending June 30, 2014
G18 – Process for defining the report content and the Aspect BoundariesMateriality Analysis
G19 – All the material Aspects identified in the process for defining report contentMateriality Analysis
G20 – The Aspect Boundary within the organization for each material aspectMateriality Analysis
G21 – The Aspect Boundary outside the organization for each material aspectMateriality Analysis
G22 – Effect of any restatements of information provided in previous reportsKey Data Summary TableThe Key Data Summary Table reflects an expanded scope of facilities from that reported in the FY2011 report.
G23 – Significant changes from previous reporting periods in the Scope and Aspect BoundariesKey Data Summary Table The Key Data Summary Table reflects an expanded scope of facilities from that reported in the FY2011 report.
Stakeholder EngagementExpand
G24 & List of stakeholder groups engaged by the organizationTechnology Partners & Customers: In order to increase impact and optimize the costs of these marketing activities, we routinely team with both customers and technology partners for shared presentations. Automotive partners, such as Audi, BMW, Mercedes, Porsche, Toyota and concept vehicle pioneer Rinspeed, regularly host HARMAN technologies in their own displays to showcase our joint developments.

Technology leaders, including Intel, Nuance and Sierra Wireless, are integral components of both our development and marketing activities.

Customers: In the consumer sector, we work with such leading names as Amazon, Apple, Best Buy, Media-Saturn, Sprint, and Sony to reach customers through the power of our respective brands.

Suppliers: Suppliers with whom HARMAN conducts business must have established policies for social accountability. The preferred reference for these processes is the SA8000 standard from Social Accountability International. Each supplier must comply with applicable environmental, health and safety standards.

Government entities: Government relations took on increased importance during 2011 as HARMAN worked with leaders in several countries to expand our emerging market footprint and contribute our expertise to such initiatives as distraction-free driving. In the United States and elsewhere, we are working with government transportation officials to communicate the benefits of HARMAN technologies that will allow customers to stay connected on the road while reducing potential distractions.
G25 – Basis for identification and selection of stakeholders with whom to engageThe initial basis for determining stakeholder engagement was developed in 2011 as part of the CERES Roadmap process.
G26 – Organization’s approach to stakeholder engagementThe primary approach to stakeholder engagement is driven by requests for performance and governance data through surveys and questionnaires. HARMAN openly responds to these stakeholder requests.
G27 – Key topics and concerns that have been raised through stakeholder engagementPotential human rights and conflict mineral issues raised through stakeholder engagement have been addressed through our commitment to the UN Global Compact’s 10 universal principles.
Report ProfileExpand
G28 – Reporting period (such as fiscal or calendar year) for information providedFY2012 – FY2014
G29 – Date of most recent previous reportFY2011; November 2011
G30 – Reporting cycle (such as annual, biennial)No scheduled reporting cycle.
G31 – Contact point for questions regarding the report or its contentsSAMANTHA D. BRITTENHAM
Manager, Sustainability and Corporate Digital Communications
G32 – The 'in accordance' option the organization has chosenCore "in accordance" report with GRI G4 standards with omissions identified.
G33 – Organization’s policy and current practice with regard to seeking external assurance for the reportThe company has chosen not to seek external verification at this time.
G34 – Governance structure of the organization, including committees of the highest governance bodyHARMAN:
  • has more than 33% of the board as independent non-executives
  • has an audit committee, the majority of whose members are independent non-executives
  • discloses the remuneration of company directors - available in the annual proxy statement
Ethics & IntegrityExpand
G56 – Values, principles, standards and norms of behavior, such as codes of conduct and codes of ethicsGovernance