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**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

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**FORM        10-K**

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| x | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

**For      the fiscal year ended June 30, 2007**

**Commission      File Number 001-09764**

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**Harman      International Industries, Incorporated**

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| **Delaware**                                                 |   | **11-2534306**                     |
|--------------------------------------------------------------|--------|------------------------------------|
| (State                or Other Jurisdiction of               |   | (I.R.S.                Employer    |
| Incorporation                or Organization)                |   | Identification                No.) |
| **   **                                       |   |                               |
| **1101                Pennsylvania Ave., N.W., Suite 1010,** |   |                               |
| **Washington,                D.C.**                          |   | **20004**                          |
| (Address                of Principal Executive Offices)      |   | (Zip                Code)          |

**202-393-1101**

**Securities      registered pursuant to Section 12(b) of the      Act:  **

| **Title                  of Each Class**                  |   | **Name                  of Each Exchange on Which Registered** |
|-----------------------------------------------------------|--------|----------------------------------------------------------------|
| **Common                Stock, par value $.01 per share** |   | **New                York Stock Exchange**                     |
| **Preferred                Stock Purchase Rights**        |   | **New                York Stock Exchange**                     |

**None**

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|                                            |     |               |                                                                                                                                                            |   |
|-------------------------------------------------|----------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                            |     |               |                                                                                                                                                            |   |
| **INDEX**                                       |     |
|                                  | **Page** |
|                                            |     |
|                                  |     |
| Forward–Looking                Statements | i        |
| **   **                          |     |               |                                                                                                                                                            |   |
| **Part                I**                       |     |               |                                                                                                                                                            |   |
| Item                                  | 1.       |     | Business                                                                                                                                                        | 1      |
| Item                                  | 1A.      |               | Risk                Factors                                                                                                                                     | 9      |
| Item                                  | 1B.      |               | Unresolved                Staff Comments                                                                                                                        | 15     |
| Item                                  | 2.       |               | Properties                                                                                                                                                      | 16     |
| Item                                  | 3.       |               | Legal                Proceedings                                                                                                                                | 17     |
| Item                                  | 4.       |               | Submission                of Matters to a Vote of Security Holders                                                                                              | 18     |
|                                            |     |               | Executive                Officers of the Registrant                                                                                                             | 18     |
|                                            |     |               |                                                                                                                                                            |   |
| **Part                II**                      |     |               |                                                                                                                                                            |   |
| Item                                  | 5.       |               | Market                for Registrant’s Common Equity, Related Stockholder Matters and                Issuer                Purchases of Equity Securities | 19     |
| Item                                  | 6.       |               | Selected                Financial Data                                                                                                                          | 20     |
| Item                                  | 7.       |               | Management’s                Discussion and Analysis of Financial Condition and Results                of Operations                                       | 21     |
| Item                                  | 7A.      |               | Quantitative                and Qualitative Disclosures About Market Risk                                                                                       | 35     |
| Item                                  | 8.       |               | Financial                Statements and Supplementary Data                                                                                                      | 37     |
| Item                                  | 9.       |               | Changes                in and Disagreements With Accountants on Accounting and Financial                Disclosure                                              | 72     |
| Item                                  | 9A.      |               | Controls                and Procedures                                                                                                                          | 72     |
| Item                                  | 9B.      |               | Other                Information                                                                                                                                | 72     |
| **   **                          |     |               |                                                                                                                                                            |   |
| **Part                III**                     |     |               |                                                                                                                                                            |   |
| Item                                  | 10.      |               | Directors,                Executive Officers and Corporate Governance                                                                                           | 72     |
| Item                                  | 11.      |               | Executive                Compensation                                                                                                                           | 74     |
| Item                                  | 12.      |               | Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Matters                                    | 74     |
| Item                                  | 13.      |               | Certain                Relationships and Related Transactions, and Director                Independence                                                         | 74     |
| Item                                  | 14.      |               | Principal                Accounting Fees and Services                                                                                                           | 74     |
| **   **                          |     |               |                                                                                                                                                            |   |
| **Part                IV**                      |     |               |                                                                                                                                                            |   |
| Item                                  | 15.      |               | Exhibits                and Financial Statement Schedules                                                                                                       | 75     |
|                                  |     |               |                                                                                                                                                            |   |
| **Signatures**                                  | 79       |

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**Forward–Looking      Statements**

*This      report contains forward-looking statements within the meaning of Section 27A      of      the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934,      as      amended (the “Exchange Act”). You should not place undue reliance on these      statements. Forward-looking statements include information concerning possible      or assumed future results of operations, capital expenditures, the outcome      of      pending legal proceedings and claims, including environmental matters, goals      and      objectives for future operations, including descriptions of our business      strategies and purchase commitments from customers. These statements are      typically identified by words such as “believe,” “anticipate,” “expect,” “plan,”“intend,” “estimate” and similar expressions. We base these statements on      particular assumptions that we have made in light of our industry experience,      as      well as our perception of historical trends, current conditions, expected future      developments and other factors that we believe are appropriate under the      circumstances. As you read and consider the information in this report, you      should understand that these statements are not guarantees of performance or      results. They involve risks, uncertainties and assumptions. In light of these      risks and uncertainties, there can be no assurance that the results and events      contemplated by the forward-looking statements contained in, or incorporated      by      reference into, this report will in fact transpire.*

*You      should carefully consider the risks described below and the other information      in      this report.  Our operating results may fluctuate significantly and      may not meet our expectations or those of securities analysts or      investors.  The price of our stock would likely decline if this      occurs.  In addition, the proposed acquisition of our company by KHI      Parent Inc. (“Parent”), a company formed by investment funds affiliated with      Kohlberg, Kravis Roberts & Co. L.P. (“KKR”) and GS Capital Partners VI Fund,      L.P. and its related funds, which are sponsored by Goldman, Sachs & Co.      (“GSCP”), as reported on our current report on Form 8-K filed with the      Securities and Exchange Commission on April 26, 2007, may cause the price of      our      stock to fluctuate significantly.*

| ·   | the                occurrence of any event or other circumstances that could give rise                to                termination of the merger agreement and the fact that a termination                under                some circumstances could require our company to reimburse Parent’s                out-of-pocket transaction expenses up to $20 million and pay a termination                fee of up to $225 million (less any transaction expenses                reimbursed); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                outcome of any litigation and judicial actions that have been or                may be                instituted against our company, Parent and others relating to the                merger                agreement; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                inability to complete the merger due to failure to obtain stockholder                approval or the failure to satisfy other conditions to complete the                merger, including the inability of Parent and its affiliates to obtain                regulatory approvals, as required by the merger                agreement; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                possibility that the merger may involve unexpected                costs; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | the                failure of Parent or its affiliates to obtain the necessary debt                financing                arrangements set forth in the commitment letters received in connection                with the merger agreement, including as the result of the recent                disruptions in the debt capital                markets; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                failure of the merger to close for any other reason or any significant                delay in the expected completion of the                merger; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | risks                that the proposed transaction disrupts our company’s current plans and                operations, and the potential difficulties for our company’s employee                retention as a result of the announcement or completion of the                merger; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Forward–Looking      Statements (continued)**

| ·   | the                effect of the announcement or completion of the merger on our company’s                customer and supplier relationships, operating results and business                generally; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                impact of the substantial indebtedness incurred to finance the                merger; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | the                amount of costs, fees, expenses and charges related to the merger                and the                actual terms of the financings to be obtained in connection with                the                merger; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                diversion of our company’s management’s and employees’ attention from                day-to-day business; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in laws, including increased tax rates, changes in regulations or                accounting standards, third-party relations and approvals, and decisions                of courts, regulators and governmental                bodies; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | automobile                industry sales and production rates and the willingness of automobile                purchasers to pay for the option of a premium audio system and/or                a                multi-function infotainment system; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in consumer confidence and                spending; |
|--------------------|----------------------------------------------------------------------------|

| ·   | fluctuations                in currency exchange rates and other risks inherent in international                trade                and business transactions; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to satisfy contract performance criteria, including technical                specifications and due dates; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to design and manufacture our products profitably under our                long-term contractual commitments; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                loss of one or more significant customers, including our automotive                manufacturer customers; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | competition                in the automotive, consumer or professional markets in which we                operate; |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | model-year                changeovers in the automotive                industry; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | changes                in general economic conditions and specific market                conditions; |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | our                ability to enforce or defend our ownership and use of intellectual                property; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to effectively integrate acquisitions made by our                company; |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | strikes,                work stoppages and labor negotiations at our facilities, or at a                facility                of one of our significant customers; or work stoppages at a common                carrier                or a major shipping location; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                outcome of pending or future litigation and administrative claims,                including patent and environmental matters;                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | world                political stability. |
|--------------------|-------------------------------------------|

***Although      we believe that these forward-looking statements are based on reasonable      assumptions, you should be aware that many factors could affect our actual      financial results, results of operations and/or the price of our common stock      and  could cause actual results to differ materially from those      expressed in the forward-looking statements. As a result, the foregoing factors      should not be construed as exhaustive and should be read together with the      other      cautionary statements included in this and other reports we file with the      Securities and Exchange Commission.  For additional information      regarding certain factors that may cause our actual results to differ from      those      expected or anticipated, see the information under the caption “Risk Factors”which is located in Item 1A of Part I of this report.***

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**Part      I**

**Item      1.  Business**

*Management’s Discussion and Analysis of Financial Condition and Results of      Operations”*
*Business Segment Data,*

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**Proposed      Agreement and Plan of Merger**

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***Products***

*Automotive*

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*Consumer*

*Professional*

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***Manufacturing***

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***Suppliers***

***Trademarks      and Patents***

***Seasonality***

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***Customers/Industry      Concentration***

***Backlog      Orders***

***Warranty      Liabilities***

***Competition***

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***Research      and Development***

***Number      of Employees***

***Website      Information***

**Item      1A.  Risk Factors**

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**Risks      Related to Harman**

***Currency      fluctuations may reduce profits on our foreign sales or increase our costs,      either of which could adversely affect our financial      results.***

***Failure      to maintain relationships with our largest customers and failure by our      customers to continue to purchase expected quantities of our products due to      changes in market conditions would have an adverse effect on our      operations.***

***Our      products may not satisfy shifting consumer demand or compete successfully with      competitors’ products.***

***A      decrease in discretionary spending would likely reduce our      sales.***

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***Our      business could be adversely affected if we are unable to obtain raw materials      and components from our suppliers on favorable terms.***

***Our      business could be adversely affected by a strike or work stoppage at one of      our      manufacturing plants or at a facility of one of our significant customers or      at      a common carrier or major shipping location.***

***We      may lose market share if we are unable to compete successfully against our      current and future competitors.***

***If      we do not continue to develop, introduce and achieve market acceptance of new      and enhanced products, our sales may decrease.***

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***Our      operations could be harmed by factors including political instability, natural      disasters, fluctuations in currency exchange rates and changes in regulations      that govern international transactions.***

| ·   | changes                in tariff regulations; |
|--------------------|-----------------------------------------------|

| ·   | political                instability, war, terrorism and other political                risks; |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | foreign                currency exchange rate                fluctuations; |
|--------------------|----------------------------------------------------------------------------|

| ·   | establishing                and maintaining relationships with local distributors and                dealers; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | lengthy                shipping times and accounts receivable payment                cycles; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | import                and export licensing requirements; |
|--------------------|----------------------------------------------------------|

| ·   | compliance                with foreign laws and regulations, including unexpected changes in                taxation and regulatory                requirements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | greater                difficulty in safeguarding intellectual property than in the United                States; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | difficulty                in staffing and managing geographically diverse                operations. |
|--------------------|------------------------------------------------------------------------------------------------------|

***If      we are unable to enforce or defend our ownership and use of our intellectual      property, our business may decline.***

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***Covenants      in our existing debt agreements could restrict our      operations.***

| ·   | create                or assume liens; |
|--------------------|----------------------------------------|

| ·   | enter                into sale-leaseback transactions;                and |
|--------------------|---------------------------------------------------------------------------|

| ·   | engage                in mergers or consolidations. |
|--------------------|-----------------------------------------------------|

***If      we fail to comply with the covenants contained in our existing debt agreements,      the related debt incurred under those agreements could be declared immediately      due and payable, which could also trigger a default under other      agreements.***

***Harman      International is a holding company with no operations of its own and therefore      our cash flow and ability to service debt is dependent upon distributions from      our subsidiaries.***

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**Risks      Related to the Merger with Parent**

***The      merger may not be completed, which could adversely affect our      business.***

| ·   | our                management’s and employees’ attention from day-to-day business may be                diverted; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                may lose key employees; |
|--------------------|-------------------------------------------|

| ·   | our                relationships with customers and vendors may be substantially disrupted                as                a result of uncertainties with regard to our business and                prospects; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                would still be required to pay significant transaction costs related                to                the merger, including legal and accounting fees, and under certain                circumstances, we may be required to reimburse Parent’s out-of-pocket                transaction expenses up to $20 million and pay a termination fee                of up to                $225 million (less any reimbursed transaction expenses);                and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                market price of shares of our common stock may decline to the extent                that                the current market price of those shares reflects a market assumption                that                the proposed merger will be                completed. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Uncertainties      associated with the merger may have a negative impact on employee and business      relationships.***

***As      a result of the proposed acquisition, we will have substantially more      debt.***

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***The      downgrade in our credit ratings resulting from the announcement of the proposed      merger could negatively affect our ability to access      capital.***

***In      the future, we could have liquidity needs that could be difficult to satisfy      under some circumstances.***

| ·   | changes                in credit markets that reduce available credit or the ability to                renew                existing liquidity facilities on acceptable                terms; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in interest rates; |
|--------------------|-------------------------------------------|

| ·   | a                deterioration of our credit or a further reduction in our credit                ratings; |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | a                material breakdown in our risk management procedures;                and |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | the                occurrence of material adverse changes in our businesses that restrict                our                ability to access the credit                markets. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      1B.  Unresolved Staff Comments**

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**Item      2.  Properties**

|  Location                                                 |         | Segment                        | Size(Sq.                Ft.) |               | Ownedor                leased |         | Percentageutilization |
|----------------------------------------------------------------|--------------------------------------------|--------------------------------|------------------------------|--------------------|-------------------------------|--------------|-----------------------|
|                                                           |                                       |                           |                         |               |                          |         |                  |
| Northridge,                California                          |                                       | AutomotiveConsumerProfessional | 589,000                      |          | Leased                        |         | 100%                  |
|                                                      |                                       |                           |                         |          |                          |    |                  |
| Ittersbach,                Germany                             |                                  | Automotive                     | 565,000                      |     | Owned                         |    | 100%                  |
|                                                      |                                       |                      |                         |          |                          |    |                  |
| Straubing,                Germany                              |                                  | Automotive                     | 235,000                      |     | Owned                         |    | 100%                  |
|                                                      |                                       |                      |                         |          |                          |    |                  |
| Elkhart,                Indiana                                |                                       | Professional                   | 223,000                      |          | Owned                         |    | 86%                   |
|                                                      |                                       |                      |                         |          |                          |    |                  |
| Chateau                du Loir, France                    |                                       | AutomotiveConsumer             | 221,000                      |          | Owned                         |    | 75%                   |
|                                                      |                                       |                      |                         |          |                          |    |                  |
| Martinsville,                Indiana                           |                                       | Automotive                     | 221,000                      |          | Owned                         |    | 100%                  |
|                                                      |                                       |                      |                         |          |                          |    |                  |
| Rancho                Cucamonga, California               |                                  | Professional                   | 212,000                      |     | Leased                        |    | 100%                  |
|                                                           |                                  |                      |                         |          |                          |    |                  |
| Worth-Schaitt, Germany                                    |                             | Automotive                     | 204,000                      |     | Owned                         |    | 100%                  |
|                                                           |                                       |                      |                         |          |                          |    |                  |
| Tijuana,                Mexico                                 |                             | Consumer                       | 198,000                      |     | Leased                        |    | 78%                   |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Vienna,                Austria                                 |                             | Professional                   | 193,000                      |     | Leased                        |    | 100%                  |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Potters                Bar, United                Kingdom |                             | Professional                   | 160,000                      |     | Leased                        |    | 100%                  |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Franklin,                Kentucky                              |                                  | Automotive                     | 152,000                      |          | Owned                         |    | 100%                  |
|                                                           |                                  |                      |                         |          |                          |    |                  |
| Sandy,                Utah                                     |                                  | Professional                   | 127,000                      |          | Leased                        |    | 100%                  |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Bridgend, United                Kingdom                   |                                  | Automotive                     | 125,000                      |          | Leased                        |    | 100%                  |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Szekesfehervar, Hungary                                   |                                  | Automotive                     | 117,000                      |          | Owned                         |    | 100%                  |
|                                                      |                                  |                      |                         |          |                          |    |                  |
| Juarez,                Mexico                                  |                                  | Automotive                     | 109,000                      |          | Leased                        |    | 100%                  |
|                                                           |                                  |                      |                         |          |                          |    |                  |
| Regensdorf, Switzerland                                   |                                  | Professional                   | 108,000                      |          | Leased                        |    | 100%                  |
|                                                           |                                  |                      |                         |          |                          |    |                  |
| Washington,                Missouri                            |                                  | Automotive                     | 101,000                      |          | Owned                         |    | 100%                  |
|                                                           |                                  |                      |                         |          |                          |    |                  |

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**Item      3.  Legal Proceedings**

**Litigation      Related to the Merger**

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**Item      4.  Submission of Matters to a Vote of Security      Holders and Executive Officers of the Registrant**

**Submission      of Matters to a Vote of Security Holders**

**Executive      Officers of the Registrant**

| Name                              |    | Position                                                                                                    |    | Age    |
|-----------------------------------|--------------|-------------------------------------------------------------------------------------------------------------|--------------|--------|
|                              |         |                                                                                                        |         |   |
| Sidney                Harman      |         | Executive                Chairman                                                                           |         | 89     |
| Dinesh                C. Paliwal  |         | President,                Chief Executive Officer and Vice Chairman                                         |         | 49     |
| Kevin                L. Brown     |         | Executive                Vice President and Chief Financial Officer                                         |         | 47     |
| Erich                A. Geiger    |         | Executive                Vice President, Chief Strategy Officer and Chief Technology                Officer |         | 60     |
| Helmut                Schinagel   |         | Chief                Executive Officer – Automotive                                                   |         | 54     |
| Gina                Harman        |         | President                – Consumer                                                                   |         | 58     |
| Blake                Augsburger   |         | President                – Professional                                                               |         | 44     |
| Sandra                B. Robinson |         | Vice                President - Financial Operations and Chief Accounting                Officer            |         | 48     |
| Edwin                C. Summers   |         | Vice                President - General Counsel and Secretary                                               |         | 60     |

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**Part      II**

**Item      5.  Market for Registrant’s Common Equity, Related      Stockholder Matters and Issuer Purchases of Equity      Securities**

|                                                        |   | Fiscal                2007 |   |   | Fiscal                2006 |   |
|-------------------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|   Market                Price                     |   | High                       |   |   | Low                        |   |   | High |   |   | Low |   |
|                                                        |   |                       |   |   |                       |   |   |   |   |   |   |   |
|                                                   |   |                       |   |   |                       |   |   |   |   |   |   |   |
|   First                quarter ended September 30 |   | $                          | 87.03  |   |                       |   | 74.65 |   |   |   | 111.48 |   |   |   | 78.60 |   |
|   Second                quarter ended December 31 |   |                       | 108.29 |   |                       |   | 82.64 |   |   |   | 109.53 |   |   |   | 93.21 |   |
|   Third                quarter ended March 31     |   |                       | 105.68 |   |                       |   | 92.40 |   |   |   | 115.85 |   |   |   | 93.73 |   |
|   Fourth                quarter ended June 30     |   |                       | 125.13 |   |                       |   | 96.12 |   |   |   | 111.50 |   |   |   | 79.20 |   |

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We      did not repurchase any shares of our common stock in the quarter      ended June 30, 2007.  Our share repurchase program was first publicly      announced on June 16, 1998.  In August 2005, the Board authorized the      purchase of up to an additional four million shares, bringing the total number      of authorized shares to 20 million.  The total number of shares      repurchased through June 30, 2007 was 18,198,082.  Our share      repurchase program has been suspended due to our proposed merger with      Parent.

**Item      6.  Selected Financial Data**

|                                                                                                    | Years                Ended June 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|--------|
|  (In                thousands except per share data)                                                                                                                                                                                                                                   |                                |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
|                                                                                                                                                                                                                                                                                        |                      |   |   |     |     |   |     |     |   |     |     |   |     |     |   |   |
| Net                sales                                                                                                                                                                                                                                                                    |                                | $      | 3,551,144 |   |   | 3,247,897 |   |   | 3,030,889 |   |   | 2,711,374 |   |   | 2,228,519 |   |
| Operating                income                                                                                                                                                                                                                                                             |                                | $      | 386,387 |   |   | 397,241 |   |   | 350,981 |   |   | 254,465 |   |   | 166,894 |   |
| Income                before income taxes                                                                                                                                                                                                                                                   |                                | $      | 382,205 |   |   | 376,187 |   |   | 335,337 |   |   | 227,520 |   |   | 142,471 |   |
| Net                income                                                                                                                                                                                                                                                                   |                                | $      | 313,963 |   |   | 255,295 |   |   | 232,848 |   |   | 157,883 |   |   | 105,428 |   |
| Diluted                earnings per share (a)                                                                                                                                                                                                                                               |                                | $      | 4.72 |   |   | 3.75 |   |   | 3.31 |   |   | 2.27 |   |   | 1.55 |   |
| Weighted                average shares outstanding   –                diluted (a)                                                                                                                                                                                      |                                |   | 66,449 |   |   | 68,105 |   |   | 70,399 |   |   | 69,487 |   |   | 68,048 |   |
| Total                assets (b)                                                                                                                                                                                                                                                             |                                | $      | 2,508,868 |   |   | 2,375,752 |   |   | 2,201,983 |   |   | 1,999,875 |   |   | 1,711,918 |   |
| Total                debt                                                                                                                                                                                                                                                                   |                                | $      | 76,528 |   |   | 197,554 |   |   | 333,917 |   |   | 394,925 |   |   | 503,068 |   |
| Shareholders’                equity                                                                                                                                                                                                                                                   |                                | $      | 1,494,041 |   |   | 1,228,164 |   |   | 1,060,948 |   |   | 874,996 |   |   | 655,785 |   |
| Dividends                per share (a)                                                                                                                                                                                                                                                      |                                | $      | 0.05 |   |   | 0.05 |   |   | 0.05 |   |   | 0.05 |   |   | 0.05 |   |
|                                                                                                                                                                                                                                                                         |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  (a)  Share                and per share data has been adjusted to reflect the two-for-one stock                split in November 2003.(b)  Prior                year amounts have been reclassified to conform to current year                presentation.  |                                |

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**Item      7.  Management’s Discussion and Analysis of Financial      Condition and Results of Operations**

*The      following discussion should be read in conjunction with the information      presented in other sections of this Annual Report on Form 10-K, including “Item      1. Business,” “Item 6. Selected Financial Data,” and “Item 8. Financial      Statements and Supplementary Data.” This discussion contains forward-looking      statements which are based on our current expectations and experience and our      perception of historical trends, current market conditions, including customer      acceptance of our new products, current economic data, expected future      developments, including foreign currency exchange rates, and other factors      that      we believe are appropriate under the circumstances. These statements involve      risks and uncertainties that could cause actual results to differ materially      from those suggested in the forward-looking statements. See “Risk Factors”included in Item 1A of Part I. of this report.*

**Overview**

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**Recent      Developments**

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**Critical      Accounting Policies**

*Summary of      Significant Accounting Policies*

***Allowance      for Doubtful Accounts***

***Inventory      Valuation***

***Goodwill***

*Goodwill and Other      Intangible Assets*

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*Goodwill*

***Pre-Production      and Development Costs***

***Warranty      Liabilities***

***Income      Taxes***

***Stock-Based      Compensation***

*Accounting for St*
*ock-Based      Compensation*

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*Stock Option and Incentive Plan*

**Results      of Operations**

***Net      Sales***

| ($000s                omitted) |   | Fiscal                2007 |      |   | Fiscal                2006 |   |   | Fiscal                2005 |   |
|--------------------------------|--------|----------------------------|-----------|--------|----------------------------|--------|--------|----------------------------|--------|
|                           |   |                       |      |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Automotive         |   | $                          | 2,492,815 |   |                       |   | 70     | %                          |   |   | 2,237,632 |   |   |   | 69 | % |   |   | 2,127,682 |   |   |   | 70 | % |
|   Consumer           |   |                       | 497,673   |   |                       |   | 14     | %                          |   |   | 492,977 |   |   |   | 15 | % |   |   | 416,231 |   |   |   | 14 | % |
|   Professional       |   |                       | 560,656   |   |                       |   | 16     | %                          |   |   | 517,288 |   |   |   | 16 | % |   |   | 486,976 |   |   |   | 16 | % |
|   *Total*            |   | $                          | 3,551,144 |   |                       |   | 100    | %                          |   |   | 3,247,897 |   |   |   | 100 | % |   |   | 3,030,889 |   |   |   | 100 | % |

*Automotive      –*

----

*Traffic Assist*

*Consumer*

*Professional *

----

***Gross      Profit***

*Restructuring and Merger Costs*

|                           |   |   |      |   | Percent                |   |   |   |   | Percent                |      |   |   |   | Percent                |
|--------------------------------|--------|--------|-----------|--------|-----------------------------|--------|--------|--------|--------|-----------------------------|-----------|--------|--------|--------|-----------------------------|
|                           |   | Fiscal |      |   | of                net  |   | Fiscal |   |   | of                net  |      | Fiscal |   |   | of                net  |
| ($000s                omitted) |   | 2007   |      |   | sales                  |   | 2006   |   |   | sales                  |      | 2005   |   |   | sales                  |
|                 |   |   |      |   |                        |   |   |   |   |                        |      |   |   |   |                        |   |   |   |
| Automotive                     |   | $      | 872,838   |   |                        |   | 35.0   | %      |   |                        | 805,152   |   |   |   | 36.0                        | % |   |   | 739,746 |   |   |   | 34.8 | % |
| Consumer                       |   |   | 126,392   |   |                        |   | 25.4   | %      |   |                        | 160,212   |   |   |   | 32.5                        | % |   |   | 123,983 |   |   |   | 29.8 | % |
| Professional                   |   |   | 216,976   |   |                        |   | 38.7   | %      |   |                        | 193,129   |   |   |   | 37.3                        | % |   |   | 172,973 |   |   |   | 35.5 | % |
| Other/Unallocated              |   |   | (5,000    | )      |                        |   | ---    |   |   |                        | (5,923    | )      |   |   | ---                         |   |   |   | (5,000 | ) |   |   | --- |   |
| *Total*                        |   | $      | 1,211,206 |   |                        |   | 34.1   | %      |   |                        | 1,152,570 |   |   |   | 35.5                        | % |   |   | 1,031,702 |   |   |   | 34.0 | % |
|                           |   |   |      |   |                        |   |   |   |   |                        |      |   |   |   |                        |   |   |   |   |   |   |   |   |   |

*Automotive *

*Consumer *

----

*Professional *

***Selling,      General and Administrative Expenses***

----

|                           |   |   |    |   | Percent                |   |   |   |   | Percent                |    |   |   |   | Percent                |
|--------------------------------|--------|--------|---------|--------|-----------------------------|--------|--------|--------|--------|-----------------------------|---------|--------|--------|--------|-----------------------------|
|                           |   | Fiscal |    |   | of                net  |   | Fiscal |   |   | of                net  |    | Fiscal |   |   | of                net  |
| ($000s                omitted) |   | 2007   |    |   | sales                  |   | 2006   |   |   | sales                  |    | 2005   |   |   | sales                  |
|                 |   |   |    |   |                        |   |   |   |   |                        |    |   |   |   |                        |   |   |   |
| Automotive                     |   | $      | 532,722 |   |                        |   | 21.4   | %      |   |                        | 468,357 |   |   |   | 20.9                        | % |   |   | 391,912 |   |   |   | 18.4 | % |
| Consumer                       |   |   | 112,805 |   |                        |   | 22.7   | %      |   |                        | 109,399 |   |   |   | 22.2                        | % |   |   | 97,025 |   |   |   | 23.3 | % |
| Professional                   |   |   | 136,008 |   |                        |   | 24.3   | %      |   |                        | 133,851 |   |   |   | 25.9                        | % |   |   | 127,475 |   |   |   | 26.2 | % |
| Other/Unallocated              |   |   | 43,284  |   |                        |   | ---    |   |   |                        | 43,722  |   |   |   | ---                         |   |   |   | 64,309 |   |   |   | --- |   |
| *Total*                        |   | $      | 824,819 |   |                        |   | 23.2   | %      |   |                        | 755,329 |   |   |   | 23.3                        | % |   |   | 680,721 |   |   |   | 22.5 | % |

*Automotive *

*Consumer *

*Professional *

----

*Other *

***Restructuring      and Merger Costs***

|                                       |   | June                30, |   |
|--------------------------------------------|--------|-------------------------|--------|
| ($000s                omitted)             |   | 2007                    |   |   | 2006 |   |
|                                       |   |                    |   |   |   |   |
| Beginning                accrued liability |   |  $                 | 8,533  |   |   |   | --- |   |
| Add:  Expense                    |   | 7,071                   |   |   |   | 9,499 |   |
| Less:  Utilization               |   | (8,077                  | )      |   |   | (966 | ) |
|                                  |   |  $                 | 7,527  |   |   |   | 8,533 |   |

***Operating      Income***

----

|                           |   |   |    |   | Percent                |   |   |   |   | Percent                |    |   |   |   | Percent                |
|--------------------------------|--------|--------|---------|--------|-----------------------------|--------|--------|--------|--------|-----------------------------|---------|--------|--------|--------|-----------------------------|
|                           |   | Fiscal |    |   | of                net  |   | Fiscal |   |   | of                net  |    | Fiscal |   |   | of                net  |
| ($000s                omitted) |   | 2007   |    |   | sales                  |   | 2006   |   |   | sales                  |    | 2005   |   |   | sales                  |
| Automotive                     |   | $      | 340,116 |   |                        |   | 13.6   | %      |   |                        | 336,795 |   |   |   | 15.1                        | % |   |   | 347,834 |   |   |   | 16.3 | % |
| Consumer                       |   |   | 13,587  |   |                        |   | 2.7    | %      |   |                        | 50,813  |   |   |   | 10.3                        | % |   |   | 26,958 |   |   |   | 6.5 | % |
| Professional                   |   |   | 80,968  |   |                        |   | 14.4   | %      |   |                        | 59,278  |   |   |   | 11.5                        | % |   |   | 45,498 |   |   |   | 9.3 | % |
| Other                          |   |   | (48,284 | )      |                        |   | ---    |   |   |                        | (49,645 | )      |   |   | ---                         |   |   |   | (69,309 | ) |   |   | --- |   |
| *Total*                        |   | $      | 386,387 |   |                        |   | 10.9   | %      |   |                        | 397,241 |   |   |   | 12.2                        | % |   |   | 350,981 |   |   |   | 11.6 | % |

***Interest      Expense***

***Miscellaneous      Expenses***

***Income      Taxes***

----

**Financial      Condition**

***Liquidity      and Capital Resources***

***Operating      Activities***

----

*Employers’ Accounting for Defined Benefit Pension and Other      Postretirement Plans*

***Investing      Activities***

***Financing      Activities***

----

***Contractual      Obligations***

|                                                                                                                                                                                                                                  |   | Fiscal                Year Ending June 30, |    |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                  |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ($000s)                                                                                                                                                                                                                               |   | 2008                                       |    |   | 2009   |   |   | 2010   |   |   | 2011 |   |   | 2012 |   |   | Thereafter |   |   | Total |   |
|                                                                                                                                                                                                                                  |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                borrowings (a)                                                                                                                                                                                              |   | $                                          | 1,838   |   |   |   | ---    |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   | $ | 1,838 |   |
| Senior                notes (b)                                                                                                                                                                                                       |   |                                       | 16,486  |   |   |   | ---    |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | 16,486 |   |
| Capital                leases (c)                                                                                                                                                                                                     |   |                                       | 459     |   |   |   | 477    |   |   |   | 495 |   |   |   | 408 |   |   |   | 412 |   |   |   | --- |   |   |   | 2,251 |   |
| Other                long-term  obligations (b)                                                                                                                                                                                  |   |                                       | 84      |   |   |   | 90     |   |   |   | 55,095 |   |   |   | 100 |   |   |   | 105 |   |   |   | 479 |   |   |   | 55,953 |   |
| Firm                commitments for  capital expenditures                                                                                                                                                                        |   |                                       | 37,643  |   |   |   | ---    |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | 37,643 |   |
| Purchase                obligations (c)                                                                                                                                                                                               |   |                                       | 196,554 |   |   |   | 533    |   |   |   | 24 |   |   |   | --- |   |   |   | --- |   |   |   | 860 |   |   |   | 197,971 |   |
| Non-cancelable                 operating leases                (d)                                                                                                                                                               |   |                                       | 43,517  |   |   |   | 40,913 |   |   |   | 38,511 |   |   |   | 23,879 |   |   |   | 19,198 |   |   |   | 22,698 |   |   |   | 188,716 |   |
| *Total                contractual  cash obligations*                                                                                                                                                                             |   | $                                          | 296,581 |   |   |   | 42,013 |   |   |   | 94,125 |   |   |   | 24,387 |   |   |   | 19,715 |   |   |   | 24,037 |   |   | $ | 500,858 |   |
|                                                                                                                                                                                                                                  |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                  |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (a) See                note 5 to our consolidated financial statements.                                                                                                                                                          |   |
| (b) See                note 6 to our consolidated financial statements.                                                                                                                                                          |   |
| (c) Includes                amounts committed under enforceable agreements for purchase of goods                and                services with defined                terms as to quantity, price and timing of delivery. |   |
| (d) See                note 7 to our consolidated financial statements.                                                                                                                                                          |   |

***Business      Outlook***

----

**Item      7A.  Quantitative and Qualitative Disclosures About      Market Risk**

***Interest      Rate Sensitivity/Risk***

**Principal      Payments and Interest Rates by Contractual Maturity Dates**

|                                 |   | Fiscal                Years Ending June 30, |   |   |   |   |   |   |   |   | Fairvalue(assets)/ |   |
|--------------------------------------|--------|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
| ($ millions)                    |   | 2008                                        |   |   | 2009   |   |   | 2010   |   |   | 2011               |   |   | 2012 |   |   | Thereafter |   |   | Total |   |   | liabilities |   |
|                                 |   |                                        |   |   |   |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                obligation (US$) |   | $                                           | 18.4   |   |   |   | 0.1    |   |   |   | 55.1               |   |   |   | 0.1 |   |   |   | 0.1 |   |   |   | 0.5 |   |   | $ | 74.3 |   |   | $ | 74.3 |   |
|                                 |   |                                        |   |   |   |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                interest rate |   |                                        | 7.13   | %      |   |   | 5.00   | %      |   |   | 6.02               | %      |   |   | 5.00 | % |   |   | 5.00 | % |   |   | 5.00 | % |   |   | --- |   |   |   | --- |   |
|                                 |   |                                        |   |   |   |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

***Foreign      Currency Risk***

----

----

**Item      8.  Consolidated Financial Statements and      Supplementary Data**

----

**/s/      KPMG LLP**

----

*Employers*
*’*
* Accounting for Defined Benefit Pension and      Other Postretirement Plans*

**/s/      KPMG LLP**

**      **
**        **

----

|                                                                                                                                                   |   | June                  30,    |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                                                                                                                   |   | 2007                                        |      |   | 2006 |   |
| **Assets**                                                                                                                                             |   |                                        |      |   |   |   |
| Current                  assets                                                                                                                        |   |                                        |      |   |   |   |
| Cash                  and cash equivalents                                                                                                             |   | $                                           | 106,141   |   |   |   | 291,758 |   |
| Receivables (less                  allowance for doubtful accounts of $6,040 in 2007 and                  $8,738 in 2006)                         |   |                                        | 486,557   |   |   |   | 444,474 |   |
| Inventories                  (note 2)                                                                                                                  |   |                                        | 453,156   |   |   |   | 344,957 |   |
| Other                  current assets                                                                                                                  |   |                                        | 187,299   |   |   |   | 186,778 |   |
|                                                                                                                                         |   |                                        |      |   |   |   |   |   |
| Total                  current assets                                                                                                                  |   |                                        | 1,233,153 |   |   |   | 1,267,967 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Property,                  plant and equipment, net (notes 3, 6 and 7)                                                                                 |   |                                        | 591,976   |   |   |   | 521,935 |   |
| Goodwill                  (note 4)                                                                                                                     |   |                                        | 403,749   |   |   |   | 381,219 |   |
| Other                  assets                                                                                                                          |   |                                        | 279,990   |   |   |   | 204,631 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Total                  assets                                                                                                                          |   | $                                           | 2,508,868 |   |   |   | 2,375,752 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| **Liabilities                  and Shareholders’ Equity**                                                                                        |   |                                        |      |   |   |   |   |   |
| Current                  liabilities                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Short-term                  borrowings (notes 5)                                                                                                       |   | $                                           | 1,838     |   |   |   | 1,751 |   |
| Current                  portion of long-term debt (note 6)                                                                                            |   |                                        | 17,029    |   |   |   | 16,337 |   |
| Accounts                  payable                                                                                                                      |   |                                        | 356,763   |   |   |   | 320,327 |   |
| Accrued                  liabilities                                                                                                                   |   |                                        | 350,164   |   |   |   | 432,988 |   |
| Income                  taxes payable (note 10)                                                                                                        |   |                                        | 90,187    |   |   |   | 116,493 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Total                  current liabilities                                                                                                             |   |                                        | 815,981   |   |   |   | 887,896 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Borrowings                  under revolving credit facility (note 6)                                                                                   |   |                                        | 55,000    |   |   |   | 159,900 |   |
| Senior                  notes (note 6)                                                                                                                 |   |                                        | 2,661     |   |   |   | 19,566 |   |
| Minority                  interest (note 17)                                                                                                           |   |                                        | 878       |   |   |   | 2,716 |   |
| Other                  non-current liabilities                                                                                                         |   |                                        | 140,307   |   |   |   | 77,510 |   |
| Shareholders’                  equity (note 11)                                                                                                  |   |                                        |      |   |   |   |   |   |
| Preferred                  stock, $.01 par value. Authorized 5,000,000 shares;   none                  issued and outstanding           |   |                                        | ---       |   |   |   | --- |   |
| Common                  stock, $.01 par value. Authorized 200,000,000 shares; issued                  83,436,983 shares in 2007 and 82,754,909 in 2006 |   |                                        | 834       |   |   |   | 827 |   |
| Additional                  paid-in capital                                                                                                            |   |                                        | 595,853   |   |   |   | 544,871 |   |
| Accumulated                  other comprehensive income (loss):                                                                                        |   |                                        |      |   |   |   |   |   |
|     Unrealized                  loss on hedging derivatives                                                                        |   |                                        | (510      | ) |   |   | (3,267 | ) |
|     Pension                  benefits                                                                                              |   |                                        | (15,778   | ) |   |   | (11,789 | ) |
|     Cumulative                  foreign currency translation adjustment                                                            |   |                                        | 98,479    |   |   |   | 64,280 |   |
| Retained                  earnings                                                                                                                     |   |                                        | 1,454,771 |   |   |   | 1,144,070 |   |
| Less                  common stock held in treasury (18,198,082 shares in 2007 and                  16,690,182 shares in 2006)                         |   |                                        | (639,608  | ) |   |   | (510,828 | ) |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Total                  shareholders’ equity                                                                                                      |   |                                        | 1,494,041 |   |   |   | 1,228,164 |   |
|                                                                                                                                                   |   |                                        |      |   |   |   |   |   |
| Commitments                  and contingencies (notes 7 and 14)                                                                                        |   |                                        |      |   |   |   |   |   |
|                                                                                                                                              |   |                                        |      |   |   |   |   |   |
| Total                  liabilities and shareholders’ equity                                                                                      |   | $                                           | 2,508,868 |   |   |   | 2,375,752 |   |

----

**Consolidated      Statements of Operations**

|                                                               |   | Years                Ended June 30, |      |
|--------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                               |   | 2007                                |      |   | 2006 |   |   | 2005 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |
| Net                sales                                           |   | $                                   | 3,551,144 |   |   |   | 3,247,897 |   |   |   | 3,030,889 |   |
| Cost                of sales                                       |   |                                | 2,339,938 |   |   |   | 2,095,327 |   |   |   | 1,999,187 |   |
| Gross                profit                                        |   |                                | 1,211,206 |   |   |   | 1,152,570 |   |   |   | 1,031,702 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses        |   |                                | 824,819   |   |   |   | 755,329 |   |   |   | 680,721 |   |
| Operating                income                                    |   |                                | 386,387   |   |   |   | 397,241 |   |   |   | 350,981 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Other                expenses:                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
|    Interest                expense, net             |   |                                | 1,500     |   |   |   | 13,027 |   |   |   | 10,516 |   |
|    Miscellaneous,                net                |   |                                | 2,682     |   |   |   | 8,027 |   |   |   | 5,128 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Income                before income taxes and minority interest    |   |                                | 382,205   |   |   |   | 376,187 |   |   |   | 335,337 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Income                tax expense, net                             |   |                                | 70,186    |   |   |   | 121,877 |   |   |   | 102,489 |   |
| Minority                interest                                   |   |                                | (1,944    | ) |   |   | (985 | ) |   |   | --- |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Net                income                                          |   | $                                   | 313,963   |   |   |   | 255,295 |   |   |   | 232,848 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
| Basic                earnings per share                            |   | $                                   | 4.81      |   |   |   | 3.85 |   |   |   | 3.47 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share                          |   | $                                   | 4.72      |   |   |   | 3.75 |   |   |   | 3.31 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding – basic   |   |                                | 65,310    |   |   |   | 66,260 |   |   |   | 67,120 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding – diluted |   |                                | 66,449    |   |   |   | 68,105 |   |   |   | 70,399 |   |
|                                                               |   |                                |      |   |   |   |   |   |   |   |   |   |

----

**Consolidated      Statements of Cash Flows**

| ($000s                omitted)                                                                                       |   | Years                Ended June 30, |     |
|----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------|
|                                                                                                                 |   | 2007                                |     |   | 2006 |   |   | 2005 |   |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |
| Cash                flows from operating activities:                                                                 |   |                                |     |   |   |   |   |   |   |
|    Net                income                                                                          |   | $                                   | 313,963  |   |   |   | 255,295 |   |   |   | 232,848 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                |     |   |   |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                         |   |                                | 127,162  |   |   |   | 129,949 |   |   |   | 118,665 |   |
| Deferred                income taxes                                                                                 |   |                                | (45,563  | ) |   |   | (8,011 | ) |   |   | (83,057 | ) |
| Loss                on disposition of assets                                                                         |   |                                | 959      |   |   |   | 1,480 |   |   |   | 3,381 |   |
| Stock                option expense                                                                                  |   |                                | 15,418   |   |   |   | 16,586 |   |   |   | 14,318 |   |
| Excess                tax benefits from share-based payment arrangements                                             |   |                                | (10,456  | ) |   |   | (45,493 | ) |   |   | 74,107 |   |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Changes                in operating assets and liabilities:                                                          |   |                                |     |   |   |   |   |   |   |   |   |   |
| Decrease                (increase) in:                                                                               |   |                                |     |   |   |   |   |   |   |   |   |   |
|    Receivables                                                                                        |   |                                | (20,314  | ) |   |   | 4,877 |   |   |   | (3,015 | ) |
|    Inventories                                                                                        |   |                                | (92,024  | ) |   |   | (21,433 | ) |   |   | (25,291 | ) |
|    Other                current assets                                                                |   |                                | (34,844  | ) |   |   | (27,456 | ) |   |   | (11,287 | ) |
| Increase                (decrease) in:                                                                               |   |                                |     |   |   |   |   |   |   |   |   |   |
|    Accounts                payable                                                                    |   |                                | 26,266   |   |   |   | 37,274 |   |   |   | 35,396 |   |
|    Accrued                liabilities                                                                 |   |                                | (37,297  | ) |   |   | 45,877 |   |   |   | 66,270 |   |
|    Income                taxes payable                                                                |   |                                | (34,083  | ) |   |   | 5,303 |   |   |   | (19,075 | ) |
|    Other                operating activities                                                          |   |                                | 6,126    |   |   |   | 5,731 |   |   |   | 16,282 |   |
| Net                cash provided by operating activities                                                             |   | $                                   | 215,313  |   |   |   | 399,979 |   |   |   | 419,542 |   |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Cash                flows from investing activities:                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Payment                for purchase of companies, net of cash acquired                                               |   | $                                   | (9,229   | ) |   |   | (13,808 | ) |   |   | (145,680 | ) |
| Proceeds                from asset dispositions                                                                      |   |                                | 3,038    |   |   |   | 1,574 |   |   |   | 2,128 |   |
| Capital                expenditures                                                                                  |   |                                | (174,794 | ) |   |   | (130,548 | ) |   |   | (172,326 | ) |
| Sale                of investments                                                                                   |   |                                | ---      |   |   |   | --- |   |   |   | 91,000 |   |
| Other                items, net                                                                                      |   |                                | 970      |   |   |   | (3,898 | ) |   |   | 4,687 |   |
| Net                cash used in investing activities                                                                 |   | $                                   | (180,015 | ) |   |   | (146,680 | ) |   |   | (220,191 | ) |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in short-term borrowings                                                      |   | $                                   | 135      |   |   |   | (828 | ) |   |   | (1,699 | ) |
| Net                (repayments) borrowings under revolving credit facility                                           |   |                                | (107,631 | ) |   |   | 158,294 |   |   |   | --- |   |
| Repayment                of long-term debt                                                                           |   |                                | (13,168  | ) |   |   | (281,945 | ) |   |   | (49,921 | ) |
| Other                decrease in long-term debt                                                                      |   |                                | (5,614   | ) |   |   | (13,250 | ) |   |   | (1,077 | ) |
| Repurchase                of common stock                                                                            |   |                                | (128,780 | ) |   |   | (192,608 | ) |   |   | (146,369 | ) |
| Dividends                paid to shareholders                                                                        |   |                                | (3,262   | ) |   |   | (3,321 | ) |   |   | (3,354 | ) |
| Exercise                of stock options                                                                             |   |                                | 25,115   |   |   |   | 27,650 |   |   |   | 11,278 |   |
| Excess                tax benefits from share-based payment arrangements                                             |   |                                | 10,456   |   |   |   | 45,493 |   |   |   | --- |   |
| Other                                                                                                                |   |                                | ---      |   |   |   | 462 |   |   |   | --- |   |
| Net                cash used in financing activities                                                                 |   | $                                   | (222,749 | ) |   |   | (260,053 | ) |   |   | (191,142 | ) |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Effect                of exchange rate changes on cash                                                               |   |                                | 1,834    |   |   |   | 7,298 |   |   |   | (3,703 | ) |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                                  |   |                                | (185,617 | ) |   |   | 544 |   |   |   | 4,506 |   |
| Cash                and cash equivalents at beginning of period                                                      |   | $                                   | 291,758  |   |   |   | 291,214 |   |   |   | 286,708 |   |
| Cash                and cash equivalents at end of period                                                            |   | $                                   | 106,141  |   |   |   | 291,758 |   |   |   | 291,214 |   |
|                                                                                                                 |   |                                |     |   |   |   |   |   |   |   |   |   |
| Supplemental                schedule of non-cash investing activities:                                               |   |                                |     |   |   |   |   |   |   |   |   |   |
| Fair                value of assets acquired                                                                         |   | $                                   | ---      |   |   |   | 12,102 |   |   |   | 155,939 |   |
| Cash                paid for the assets                                                                              |   |                                | ---      |   |   |   | 6,503 |   |   |   | 139,213 |   |
| Liabilities                assumed                                                                                   |   | $                                   | ---      |   |   |   | 5,599 |   |   |   | 16,726 |   |

----

**Consolidated        Statements of Shareholders’ Equity and Comprehensive        Income**

|                                                                                                     |   | Common                  Stock |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |
|----------------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|--------|--------|--------|---------|------------|--------|--------------------------------------|-------------------|----------------|--------|----------|---------|--------|----------------------|--------|
|                                                                                                     |   |                          |       |   |   |   |    |       |   |                                 | Accumulated  |           |   |     |    |   |                 |   | Total  |
|                                                                                                     |   | Number                   |       | $      | 0.01   |   |    | Additional |   |                                 | other        |           |   |     |    |   |                 |   | share-  |
|                                                                                                     |   | of                       |       | Par    |   |   | paid-in |       |   | comprehensive                   |              | Retained  |   | Treasury |    |   | holders’  |
| ($000s                  omitted)                                                                         |   | shares                   |       | Value  |   |   | capital |       |   | income                  (loss)  |              | earnings  |   | stock    |    |   | equity          |
|                                                                                                     |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  June 30, 2004**                                                              |   |                          | 66,090,022 |   |   | $      | 789     |       |   |                                 | 355,477           |           |   |     | 27,979  |   |                 |   | 662,602 |   |   |   | (171,851 | ) |   |   | 874,996 |   |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income:                                                                   |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | 232,848 |   |   |   | — |   |   |   | 232,848 |   |
| Foreign                  currency translation                   adjustment                     |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | (3,477  | )      |                 |   | — |   |   |   | — |   |   |   | (3,477 | ) |
| Unrealized                  gain on hedging                   derivatives                      |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 13,369  |   |                 |   | — |   |   |   | — |   |   |   | 13,369 |   |
| Minimum                  pension liability                                                               |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | (6,768  | )      |                 |   | — |   |   |   | — |   |   |   | (6,768 | ) |
| Total                  comprehensive income                                                         |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 3,124   |   |                 |   | 232,848 |   |   |   | — |   |   |   | 235,972 |   |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                  of stock options,  net                  of shares received           |   |                          | 2,250,422  |   |   |   | 22      |       |   |                                 | 11,256            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 11,278 |   |
| Tax                  benefit attributable to  stock                  options plan              |   |                          | —    |   |   |   | — |       |   |                                 | 74,107            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 74,107 |   |
| Stock                  option compensation                                                          |   |                          | —    |   |   |   | — |       |   |                                 | 14,318            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 14,318 |   |
| Treasury                  shares purchased                                                          |   |                          | (1,677,900 | )      |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | — |   |   |   | (146,369 | ) |   |   | (146,369 | ) |
| Dividends                  ($.05 per share)                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | (3,354 | ) |   |   | — |   |   |   | (3,354 | ) |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  June 30, 2005**                                                              |   |                          | 66,662,544 |   |   | $      | 811     |       |   |                                 | 455,158           |           |   |     | 31,103  |   |                 |   | 892,096 |   |   |   | (318,220 | ) |   |   | 1,060,948 |   |
| Comprehensive                  income:                                                                   |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | 255,295 |   |   |   | — |   |   |   | 255,295 |   |
| Foreign                  currency translation                   adjustment                     |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 24,578  |   |                 |   | — |   |   |   | — |   |   |   | 24,578 |   |
| Unrealized                  gain on hedging                   derivatives                      |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | (8,815  | )      |                 |   | — |   |   |   | — |   |   |   | (8,815 | ) |
| Minimum                  pension liability                                                               |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 2,358   |   |                 |   | — |   |   |   | — |   |   |   | 2,358 |   |
| Total                  comprehensive income                                                         |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 18,121  |   |                 |   | 255,295 |   |   |   | — |   |   |   | 273,416 |   |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                  of stock options,  net of                  shares received |   |                          | 1,632,883  |   |   |   | 16      |       |   |                                 | 27,634            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 27,650 |   |
| Tax                  benefit attributable to  stock option plan                                |   |                          | —    |   |   |   | — |       |   |                                 | 45,493            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 45,493 |   |
| Stock                  option compensation                                                          |   |                          | —    |   |   |   | — |       |   |                                 | 16,586            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 16,586 |   |
| Treasury                  shares purchased                                                          |   |                          | (2,230,700 | )      |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | — |   |   |   | (192,608 | ) |   |   | (192,608 | ) |
| Dividends                  ($.05 per share)                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | (3,321 | ) |   |   | — |   |   |   | (3,321 | ) |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  June 30, 2006**                                                              |   |                          | 66,064,727 |   |   | $      | 827     |       |   |                                 | 544,871           |           |   |     | 49,224  |   |                 |   | 1,144,070 |   |   |   | (510,828 | ) |   |   | 1,228,164 |   |
| Comprehensive                  income:                                                                   |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | 313,963 |   |   |   | — |   |   |   | 313,963 |   |
| Foreign                  currency translation                   adjustment                     |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 34,199  |   |                 |   | — |   |   |   | — |   |   |   | 34,199 |   |
| Unrealized                  gain on hedging                   derivatives                      |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 2,757   |   |                 |   | — |   |   |   | — |   |   |   | 2,757 |   |
| Minimum                  pension liability                                                               |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 3,264   |   |                 |   | — |   |   |   | — |   |   |   | 3,264 |   |
| Total                  comprehensive income                                                         |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | 40,220  |   |                 |   | 313,963 |   |   |   | — |   |   |   | 354,183 |   |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                  of stock options,  net                  of shares received           |   |                          | 682,074    |   |   |   | 7       |       |   |                                 | 25,108            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 25,115 |   |
| Tax                  benefit attributable to  stock option plan                                |   |                          | —    |   |   |   | — |       |   |                                 | 10,456            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 10,456 |   |
| Adoption                  of SFAS No. 158  (net of tax)                                        |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     | (7,253  | )      |                 |   |   |   |   |   |   |   |   |   | (7,253 | ) |
| Stock                  option compensation                                                          |   |                          | —    |   |   |   | — |       |   |                                 | 15,418            |           |   |     | — |   |                 |   | — |   |   |   | — |   |   |   | 15,418 |   |
| Treasury                  shares purchased                                                          |   |                          | (1,507,900 | )      |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | — |   |   |   | (128,780 | ) |   |   | (128,780 | ) |
| Dividends                  ($.05 per share)                                                              |   |                          | —    |   |   |   | — |       |   |                                 | —           |           |   |     | — |   |                 |   | (3,262 | ) |   |   | — |   |   |   | (3,262 | ) |
|                                                                                                |   |                          |       |   |   |   |    |       |   |                                 |              |           |   |     |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  June 30, 2007**                                                              |   |                          | 65,238,901 |   |   | $      | 834     |       |   |                                 | 595,853           |           |   |     | 82,191  |   |                 |   | 1,454,771 |   |   |   | (639,608 | ) |   |   | 1,494,041 |   |

----

**Notes      to Consolidated Financial Statements**

***Note      1 - Summary of Significant Accounting      Policies***

**Principles      of Consolidation.**

**Reclassifications.**
** **

**Use      of Estimates. **

**Revenue      Recognitio**
**n. **

**Sales      Discounts. **
*Accounting for Consideration Given by a Vendor to a Customer (Including      a      Reseller of the Vendor’s Products)*

**Cost      of Sales. **

----

**Allowance      for Doubtful Accounts. **

**Warranty      Liabilities. **
*Warranty Liabilities*

**Selling,      General and Administrative Expenses. **

**Advertising      Costs. **

**Amortization      of Intangibles. **
*Goodwill and Other Intangible Assets (“SFAS 142”),*

**Research      and Development. **

**Interest      Expense, Net. **

**Cash      and Cash Equivalents. **

**Inventories.      **

----

*Inventories*

**Property,      Plant and Equipment. **
*Property, Plant and*
*Equipment*

**Goodwill.**

**Pre-Production      and Development Costs.  **
*Accounting for Pre-Production Costs      Related to Long-Term Supply Agreements*
*Accounting for      Performance of Construction-Type and Certain Production-Type Contracts.*
*Other current assets*
*Other assets*

*Other current assets*
*ther assets*

**Purchased      and Deferred Software Costs.  **
*Accounting for the Costs of      Computer Software to Be Sold, Leased, or Otherwise Marketed*

----

*Other assets*

**Income      Taxes. **
*Income Taxes*

**Retirement      benefits. **

*Employers’ Accounting for Defined      Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements      No. 87, 88, 106 and 132(R) (“SFAS No. 158”),*
*Retirement Benefits*

**Foreign      Currency Translation. **

**Derivative      Financial Instruments. **

----

*Derivatives*

**Interest      Rate Management. **
*Long-Term Debt and Current Portion of Long-Term Debt*

*Derivatives*

**Foreign      Currency Management. **

**Stock-Based      Compensation.**
*Accounting for Stock-Based Compensation (“SFAS No. 123R”)*

----

*Accounting      for Stock-Based Compensation,*
*Accounting for      Stock Appreciation Rights and Other Variable Stock Option or Award Plans,*
*Stock      Option and Incentive Plan*

**Recent      Accounting Pronouncements.**

*The Fair Value      Option for Financial Assets and Financial Liabilities*

*Fair Value Measurements*

*Considering the Effects of Prior Year Misstatements when Quantifying      Misstatements in Current Year Financial Statements*

*Employers’ Accounting for Defined      Benefit Pension and Other Postretirement Plans*
*Retirement Benefits*

*“Accounting      for Uncertainty in Income Taxes — An Interpretation of FASB Statement      No. 109”*

----

*Definition of Settlement      in FASB Interpretation No. 48*

***Note      2 - Inventories***

|                                      |   | June                30, |    |
|-------------------------------------------|--------|-------------------------|---------|
| ($000s                omitted)            |   | 2007                    |    |   | 2006 |   |
|                            |   |                    |    |   |   |   |
| Finished                goods             |   | $                       | 235,736 |   |   |   | 147,663 |   |
| Work                in process            |   |                    | 52,682  |   |   |   | 45,954 |   |
| Raw                materials and supplies |   |                    | 164,738 |   |   |   | 151,340 |   |
| *Total*                                   |   | $                       | 453,156 |   |   |   | 344,957 |   |

----

***Note      3 - Property, Plant and Equipment***

|                                                          |   | June                30, |      |
|---------------------------------------------------------------|--------|-------------------------|-----------|
| ($000s                omitted)                                |   | 2007                    |      |   | 2006 |   |
|                                                |   |                    |      |   |   |   |
| Land                                                          |   | $                       | 14,738    |   |   |   | 11,737 |   |
| Buildings                and improvements                     |   |                    | 269,968   |   |   |   | 244,960 |   |
| Machinery                and equipment                        |   |                    | 905,293   |   |   |   | 764,969 |   |
| Furniture                and fixtures                         |   |                    | 41,386    |   |   |   | 53,187 |   |
|                                                          |   |                    | 1,231,385 |   |   |   | 1,074,853 |   |
| Less                accumulated depreciation and amortization |   |                    | (639,409  | ) |   |   | (552,918 | ) |
| *Property,                plant and equipment, net*           |   | $                       | 591,976   |   |   |   | 521,935 |   |

***Note      4 - Goodwill***

***Note      5 - Short-Term Borrowings***

----

***Note      6 - Long-Term Debt and Current Portion of Long      Term-Debt***

|                                                                                                                                                                                                       |   | June                30, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
| ($000s                omitted)                                                                                                                                                                                       |   | 2007                    |    |   | 2006 |   |
| Senior                notes, unsecured, due February 15, 2007 interest                due semiannually                at 7.125%                                                                            |   | $                       | ---     |   |   |   | 13,168 |   |
| Senior                notes, unsecured, due July 1, 2007 interest due semiannually                at 7.32%                                                                                                 |   |                    | 16,486  |   |   |   | 16,486 |   |
| Revolving                credit facility                                                                                                                                                                             |   |                    | 55,000  |   |   |   | 159,900 |   |
| Obligations                under capital leases (note 7)                                                                                                                                                             |   |                    | 2,251   |   |   |   | 2,555 |   |
| Other                unsubordinated variable rate loans due through                2016, bearing interest                at an average effective rate   of 5.00% at June 30,                2007 |   |                    | 953     |   |   |   | 3,694 |   |
| Total                                                                                                                                                                                                                |   |                    | 74,690  |   |   |   | 195,803 |   |
| Less                current installments                                                                                                                                                                             |   |                    | (17,029 | ) |   |   | (16,337 | ) |
| *Long-term                debt*                                                                                                                                                                                      |   | $                       | 57,661  |   |   |   | 179,466 |   |

----

|       |   |   |   |   |
|------------|--------|--------|--------|--------|
| 2008       |   | $      | 17,029 |   |
| 2009       |   |   | 567    |   |
| 2010       |   |   | 55,591 |   |
| 2011       |   |   | 508    |   |
| 2012       |   |   | 516    |   |
| Thereafter |   |   | 479    |   |

***Note      7 - Leases***

|                                         |   | June                30, |   |
|----------------------------------------------|--------|-------------------------|--------|
| ($000s                omitted)          |   | 2007                    |   |   | 2006 |   |
| Capital                lease assets          |   | $                       | 6,982  |   |   |   | 6,680 |   |
| Less                accumulated amortization |   |                    | (4,629 | ) |   |   | (4,151 | ) |
| *Net*                                        |   | $                       | 2,353  |   |   |   | 2,529 |   |

|                                                      |   | Capital |   |   | Operating |   |
|----------------------------------------------------------------|--------|---------|--------|--------|-----------|--------|
|   ($000s                omitted)                     |   | leases  |   |   | leases    |   |
|   2008                                               |   | $       | 533    |   |      | $      | 43,517 |   |
|   2009                                               |   |    | 524    |   |      |   | 40,913 |   |
|   2010                                               |   |    | 527    |   |      |   | 38,511 |   |
|   2011                                               |   |    | 421    |   |      |   | 23,879 |   |
|   2012                                               |   |    | 411    |   |      |   | 19,198 |   |
|   Thereafter                                         |   |    | ---    |   |      |   | 22,698 |   |
|   Total                minimum lease payments        |   |    | 2,416  |   |      | $      | 188,716 |   |
|   Less                interest                       |   |    | (165   | )      |      |   |   |   |
|  *Present                value of minimum lease payments* |   | $       | 2,251  |   |      |   |   |   |

----

***Note      8 - Fair Value of Financial Instruments***

***Note      9 - Warranty Liabilities***

|                                               |   | Years                Ended June 30, |    |
|----------------------------------------------------|--------|-------------------------------------|---------|
| ($000s                omitted)                     |   | 2007                                |    |   | 2006 |   |
| Beginning                balance                   |   | $                                   | 60,768  |   |   |   | 48,582 |   |
| Warranty                provisions                 |   |                                | 49,148  |   |   |   | 55,925 |   |
| Warranty                payments (cash or in-kind) |   |                                | (61,768 | ) |   |   | (43,739 | ) |
| *Ending                balance*                    |   | $                                   | 48,148  |   |   |   | 60,768 |   |

----

***Note      10 - Income Taxes***

|                                                                                                                     |   | Years                Ended June 30, |    |
|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
| ($000s                omitted)                                                                                           |   | 2007                                |    |   | 2006 |   |   | 2005 |   |
|                                                                                                           |   |                                |    |   |   |   |   |   |   |
| Provision                for Federal income taxes before credits at statutory                rate                   |   | $                                   | 133,772 |   |   |   | 131,665 |   |   |   | 117,368 |   |
| State                income taxes                                                                                        |   |                                | 260     |   |   |   | 211 |   |   |   | 984 |   |
| Difference                between Federal statutory rate and foreign                effective rate                  |   |                                | (1,305  | ) |   |   | (2,401 | ) |   |   | (8,551 | ) |
| Dividend                repatriation                                                                                     |   |                                | ---     |   |   |   | 3,350 |   |   |   | --- |   |
| IRS                settlement                                                                                            |   |                                | ---     |   |   |   | (1,081 | ) |   |   | --- |   |
| Permanent                differences                                                                                     |   |                                | (330    | ) |   |   | (524 | ) |   |   | (4,224 | ) |
| Tax                benefit from export sales                                                                             |   |                                | (1,338  | ) |   |   | (2,186 | ) |   |   | (2,116 | ) |
| Change                in valuation allowance                                                                             |   |                                | ---     |   |   |   | 61 |   |   |   | 544 |   |
| Change                in other tax liabilities                                                                           |   |                                | (1,712  | ) |   |   | (2,611 | ) |   |   | (2,210 | ) |
| Reduction                in deferred asset due to tax rate changes in foreign                jurisdiction           |   |                                | ---     |   |   |   | --- |   |   |   | 3,429 |   |
| Difference                between Federal and financial accounting for                incentive stock option grants |   |                                | 432     |   |   |   | 853 |   |   |   | 895 |   |
| Federal                income tax credits                                                                                |   |                                | (59,750 | ) |   |   | (5,168 | ) |   |   | (3,600 | ) |
| Other                                                                                                                    |   |                                | 157     |   |   |   | (292 | ) |   |   | (30 | ) |
| *Total*                                                                                                                  |   | $                                   | 70,186  |   |   |   | 121,877 |   |   |   | 102,489 |   |
|                                                                                                                     |   |                                |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                     |   |                                |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                     |   |                                |    |   |   |   |   |   |   |   |   |   |

|                                                                                                               |   | Years                Ended June 30, |    |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
| ($000s                omitted)                                                                                     |   | 2007                                |    |   | 2006 |   |   | 2005 |   |
|                                                                                                               |   |                                |    |   |   |   |   |   |   |
| Current:                                                                                                           |   |                                |    |   |   |   |   |   |   |
|    Federal                                                                                          |   | $                                   | 3,991   |   |   |   | (3,692 | ) |   |   | 5,226 |   |
|    State                                                                                            |   |                                | 400     |   |   |   | 325 |   |   |   | 275 |   |
|    Foreign                                                                                          |   |                                | 107,818 |   |   |   | 134,610 |   |   |   | 104,658 |   |
|                                                                                                               |   |                                | 112,209 |   |   |   | 131,243 |   |   |   | 110,159 |   |
| Deferred:                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |
|    Federal                                                                                          |   |                                | (43,913 | ) |   |   | (47,105 | ) |   |   | (80,183 | ) |
|    State                                                                                            |   |                                | ---     |   |   |   | --- |   |   |   | 709 |   |
|    Foreign                                                                                          |   |                                | (8,566  | ) |   |   | (7,754 | ) |   |   | (2,302 | ) |
|                                                                                                               |   |                                | (52,479 | ) |   |   | (54,859 | ) |   |   | (81,776 | ) |
|                                                                                                               |   |                                |    |   |   |   |   |   |   |   |   |   |
| Charge                in lieu of taxes attributable to tax benefit from                employee stock options |   |                                | 10,456  |   |   |   | 45,493 |   |   |   | 74,106 |   |
|                                                                                                               |   |                                |    |   |   |   |   |   |   |   |   |   |
| *Total*                                                                                                            |   | $                                   | 70,186  |   |   |   | 121,877 |   |   |   | 102,489 |   |

----

|                                                                            |   | June                30, |     |
|---------------------------------------------------------------------------------|--------|-------------------------|----------|
| ($000s                omitted)                                                  |   | 2007                    |     |   | 2006 |   |
|                                                                            |   |                    |     |   |   |   |
| Federal                net operating loss carryforwards                         |   | $                       | ---      |   |   |   | 31,087 |   |
| Federal                tax credits                                              |   |                    | 206,110  |   |   |   | 26,515 |   |
| Inventory                costing differences                                    |   |                    | 8,816    |   |   |   | 8,350 |   |
| Capitalized                research and development                             |   |                    | 52,925   |   |   |   | 45,659 |   |
| Foreign                tax loss and credit carryforwards              |   |                    | 23,475   |   |   |   | 13,727 |   |
| Non-qualified                stock options – GAAP deductions              |   |                    | 12,075   |   |   |   | 10,441 |   |
| Valuations                and other allowances                                  |   |                    | 64,014   |   |   |   | 63,550 |   |
| Total                gross deferred tax asset                                   |   | $                       | 367,415  |   |   |   | 199,329 |   |
| Less                valuation allowance                                         |   |                    | (110,765 | ) |   |   | (3,674 | ) |
| Deferred                tax asset                                               |   | $                       | 256,650  |   |   |   | 195,655 |   |
|                                                                  |   |                    |     |   |   |   |   |   |
| Total                gross deferred tax liability from fixed asset depreciation |   | $                       | (8,545   | ) |   |   | (7,327 | ) |
| Foreign                statutory accounting including royalty payments          |   |                    | (18,907  | ) |   |   | (15,148 | ) |
| Total                gross deferred tax liability                               |   | $                       | (27,451  | ) |   |   | (22,475 | ) |
|                                                                  |   |                    |     |   |   |   |   |   |
| Net                deferred tax asset                                           |   | $                       | 229,199  |   |   |   | 173,180 |   |

----

***Note      11 - Stock Option and Incentive Plan***

*Option      Plan*

----

*Adoption      of SFAS No. 123R*

*Transition Election Related to Accounting for Tax      Effects of Share-Based Payment Awards*

----

*Fair      Value Determination*

|                                       |   | Years                ended June 30, |
|--------------------------------------------|--------|-------------------------------------|
|                                       |   | 2007                           |   | 2006  |   | 2005 |
|                                       |   |                           |   |    |   |   |
| Expected                volatility         |   |  34.2%                - 42.0%  |   |  35.0%                - 43.0% |   |  41.0% |
| Weighted-average                volatility |   |  36.2%                         |   |  38.7% |   |  41.0% |
| Expected                annual dividend    |   | $0.05                               |   | $0.05 |   | $0.05 |
| Expected                term (in years)    |   |  1.42                - 7.69    |   |  1.90                - 8.33 |   |  6.13 |
| Risk-free                rate              |   |  4.43%                - 4.97%  |   |  4.05%                - 5.24% |   |  3.69% |

*Stock      Option Activity*

|                                                            |   | Shares |      |   | Weightedaverageexerciseprice |   |   | Weightedaverageremainingcontractualterm(years) |   |   | Aggregateintrinsicvalue($000s) |   |
|-----------------------------------------------------------------|--------|--------|-----------|--------|------------------------------|--------|--------|------------------------------------------------|--------|--------|--------------------------------|--------|
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |
| Outstanding                at July                1, 2006  |   |   | 3,299,720 |   |                         | $      | 47.04  |                                           |   |   |                           |   |   |   |
|    Granted                                       |   |   | 793,250   |   |                         |   | 104.17 |                                           |   |   |                           |   |   |   |
|    Exercised                                     |   |   | (687,992  | )      |                         |   | 38.53  |                                           |   |   |                           |   |   |   |
|    Forfeited                or expired           |   |   | (190,740  | )      |                         |   | 78.24  |                                           |   |   |                           |   |   |   |
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |   |   |   |   |
| Outstanding                at June                30, 2007 |   |   | 3,214,238 |   |                         |   | 61.11  |                                           |   |   | 6.41                           |   |   | $ | 181,135 |   |
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |   |   |   |   |
| Exercisable                at June                30, 2007 |   |   | 1,519,408 |   |                         | $      | 31.76  |                                           |   |   | 4.31                           |   |   | $ | 129,321 |   |
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |   |   |   |   |
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |   |   |   |   |
|                                                            |   |   |      |   |                         |   |   |                                           |   |   |                           |   |   |   |   |   |

----

|                                      |   |   |    |   | Weighted                average |
|-------------------------------------------|--------|--------|---------|--------|---------------------------------|
|                                      |   |   |    |   | grant-date                      |
|                                      |   | Shares |    |   | fair                value       |
|                                      |   |   |    |   |                            |
| Nonvested                at July 1, 2006  |   |   | 37,000  |   |                            | $ | 85.36 |
|    Granted                 |   |   | ---     |   |                            |   | --- |
|    Vested                  |   |   | ---     |   |                            |   | --- |
|    Forfeited               |   |   | (25,000 | )      |                            |   | 86.98 |
| Nonvested                at June 30, 2007 |   |   | 12,000  |   |                            | $ | 82.00 |
|                                      |   |   |    |   |                            |   |   |
|                                      |   |   |    |   |                            |   |   |
|                                      |   |   |    |   |                            |   |   |

*Pro      Forma Disclosure*

*Accounting for Stock Issued to Employees.*
*Accounting for Stock      Based Compensation*

----

|                                                                                                                                                                 |   | Year                Ended    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|
| ($000s                omitted except per share amounts)                                                                                                              |   | June                30, 2005 |
|                                                                                                                                                                 |   |                         |
| Reported                net income                                                                                                                                   |   | $                            | 232,848 |
| Add:  Stock                based employee compensation expense included in reported net income,                net                of tax                   |   |                         | 10,345 |
| Deduct:  Total                stock-based employee compensation expense determined under fair value                based method for all awards, net of tax |   |                         | 11,449 |
| Net                income, pro forma                                                                                                                                 |   | $                            | 231,744 |
|                                                                                                                                                                 |   |                         |   |
| Basic                earning per share, as reported                                                                                                                  |   | $                            | 3.47 |
| Basic                earnings per share, pro forma                                                                                                                   |   |                         | 3.45 |
|                                                                                                                                                                 |   |                         |   |
| Diluted                earnings per share, as reported                                                                                                               |   | $                            | 3.31 |
| Diluted                earnings per share, pro forma                                                                                                                 |   |                         | 3.29 |

***Note      12 – Retirement Benefits***

*Plan      Descriptions*

*Retirement      savings plan*

*Pension      benefits*

----

*Summary      Plan Results*

|                                                     |   | Years                ended June 30, |     |
|----------------------------------------------------------|--------|-------------------------------------|----------|
| ($000s                omitted)                           |   | 2007                                |     |   | 2006 |   |
|                                                |   |                                |     |   |   |   |
| Change                in benefit obligation:             |   |                                |     |   |   |   |
| Benefit                obligation at beginning of year   |   | $                                   | 104,059  |   |   |   | 93,646 |   |
| Service                cost                              |   |                                | 3,292    |   |   |   | 2,679 |   |
| Interest                cost                             |   |                                | 6,010    |   |   |   | 4,354 |   |
| Amendments                                               |   |                                | 12,950   |   |   |   | 2,380 |   |
| Actuarial                gain                            |   |                                | (5,245   | ) |   |   | (2,446 | ) |
| Asset                transfer                            |   |                                | ---      |   |   |   | 3,423 |   |
| Benefits                paid                             |   |                                | (4,233   | ) |   |   | (2,731 | ) |
| Foreign                currency exchange rate changes    |   |                                | 3,225    |   |   |   | 2,754 |   |
| Benefit                obligation at end of year         |   | $                                   | 120,058  |   |   |   | 104,059 |   |
|                                                |   |                                |     |   |   |   |   |   |
| Change                in plan assets:                    |   |                                |     |   |   |   |   |   |
| Fair                value of assets at beginning of year |   | $                                   | ---      |   |   |   | 387 |   |
| Asset                transfer                            |   |                                | ---      |   |   |   | (409 | ) |
| Employer                contributions                    |   |                                | 1,680    |   |   |   | 1,037 |   |
| Benefits                paid                             |   |                                | (1,680   | ) |   |   | (1,037 | ) |
| Foreign                currency exchange rate changes    |   |                                | ---      |   |   |   | 22 |   |
| Fair                value of assets at end of year       |   | $                                   | ---      |   |   |   | --- |   |
|                                                |   |                                |     |   |   |   |   |   |
| Reconciliation                of funded status:          |   |                                |     |   |   |   |   |   |
| Funded                status                             |   | $                                   | (120,058 | ) |   |   | (104,059 | ) |
| Unrecognized                prior service cost           |   |                                | 7,484    |   |   |   | 7,100 |   |
| Unrecognized                net loss                     |   |                                | 16,591   |   |   |   | 22,895 |   |
| Accrued                pension cost                      |   | $                                   | (95,983  | ) |   |   | (74,064 | ) |
|                                                |   |                                |     |   |   |   |   |   |
| Amounts                recognized on the balance sheet:  |   |                                |     |   |   |
| Other                assets                              |   | $                                   | ---      |   |   |   | 7,100 |   |
| Accrued                liabilities                       |   |                                | (9,229   | ) |   |   | (51,480 | ) |
| Other                non-current liabilities             |   |                                | (110,829 | ) |   |   | (47,853 | ) |
| Accumulated                other comprehensive loss      |   |                                | 24,075   |   |   |   | 18,169 |   |
| Accrued                pension cost                      |   | $                                   | (95,983  | ) |   |   | (74,064 | ) |

----

|                                                    |   | Years                ending June 30, |
|---------------------------------------------------------|--------|--------------------------------------|
| ($000s                omitted)                          |   | 2007                                 |   |   | 2006 |   |   | 2005 |
|                                                    |   |                                 |   |   |   |   |   |   |
| Components                of net periodic benefit cost: |   |                                 |   |   |   |   |   |   |
| Service                cost                             |   | $                                    | 3,292 |   |   |   | 2,679 |   |   |   | 2,683 |
| Interest                cost                            |   |                                 | 6,010 |   |   |   | 4,354 |   |   |   | 4,403 |
| Amortization                of prior service cost       |   |                                 | 887 |   |   |   | 728 |   |   |   | 17 |
| Amortization                of net loss                 |   |                                 | 2,147 |   |   |   | 2,003 |   |   |   | 1,884 |
| Net                periodic benefit cost                |   | $                                    | 12,336 |   |   |   | 9,764 |   |   |   | 8,987 |

*Adoption      of SFAS No. 158*

| ($000s                omitted)                                                 |   | Beforeapplicationof                SFASNo.                158 |    |   | Adjustments |   |    | Afterapplicationof                SFASNo.                158 |   |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------|---------|--------|-------------|--------|---------|--------------------------------------------------------------|--------|
|                                                                           |   |                                                          |    |   |        |   |    |                                                         |   |
| Incremental                impact of applying SFAS No. 158                     |   |                                                          |    |   |        |   |    |                                                         |   |
|    Other                assets                                  |   | $                                                             | 15,432  |   |        |   | (3,777  | )                                                            |   |   | 11,655 |   |
|    Total                assets                                  |   |                                                          | 15,432  |   |        |   | (3,777  | )                                                            |   |   | 11,655 |   |
|                                                                           |   |                                                          |    |   |        |   |    |                                                         |   |   |   |   |
|    Accrued                liabilities                           |   |                                                          | 101,589 |   |        |   | (92,360 | )                                                            |   |   | 9,229 |   |
|    Other                non-current liabilities                 |   |                                                          | 14,993  |   |        |   | 95,836  |                                                         |   |   | 110,829 |   |
|    Total                liabilities                             |   |                                                          | 116,582 |   |        |   | 3,476   |                                                         |   |   | 120,058 |   |
|                                                                           |   |                                                          |    |   |        |   |    |                                                         |   |   |   |   |
|    Accumulated                other comprehensive income (loss) |   |                                                          | (8,525  | )      |        |   | (7,253  | )                                                            |   |   | (15,778 | ) |
|    Total                shareholders’ equity              |   |                                                          | (8,525  | )      |        |   | (7,253  | )                                                            |   |   | (15,778 | ) |

----

| ($000s                omitted)                                                            |   |
|-------------------------------------------------------------------------------------------|--------|
|                                                                                      |   |
| Amounts                recorded in accumulated other comprehensive loss                   |   |   |   |
|    Prior                service cost (credit)                              |   | $ | 7,484 |   |
|    Net                actuarial loss (gain)                                |   |   | 16,591 |   |
|                                                                            |   |   | 24,075 |   |
|    Income                tax benefits related to above items               |   |   | (8,297 | ) |
|    Total                recognized in accumulated other comprehensive loss |   | $ | 15,778 |   |

| ($000s                omitted)                                                |   |
|-------------------------------------------------------------------------------|--------|
|                                                                          |   |   |   |
| Amounts                expected to be recognized in net periodic benefit cost |   |   |   |
|    Recognized                net actuarial loss (gain)         |   | $ | 1,775 |   |
|    Amortization                of prior service cost (credit)  |   |   | 529 |   |
|    Total                                                       |   | $ | 2,304 |   |

|                                                            |   | Years                ended June 30, |    |
|-----------------------------------------------------------------|--------|-------------------------------------|---------|
| ($000s                omitted)                                  |   | 2007                                |    |   | 2006 |   |
|                                                            |   |                                |    |   |   |   |
|    Projected                benefit obligation   |   | $                                   | 120,058 |   |   |   | 104,059 |   |
|    Accumulated                benefit obligation |   |                                | 66,624  |   |   |   | 99,321 |   |

*Plan      Assumptions*

|                                                                                                                  |   | June                30,      |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                             |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                                                                                             |   |                         |   |   |   |   |   |   |   |
| Assumptions:                                                                                                          |   |                         |   |   |   |   |   |   |   |
| Weighted                average rates used to determine benefit obligations at June                30: |   |                         |   |   |   |   |   |   |   |
|                                                                                                                  |   |                         |   |   |   |   |   |   |   |
| Range                of discount rates for pension plans                                                              |   | 4.75%to                6.15% |   |   | 4.60%to 6.25% |   |   | 4.20%to                5.10% |   |
|                                                                                                                  |   |                         |   |   |   |   |   |   |   |
| Range                of rates of compensation increase for                pension plans                     |   | 2.0%to                4.0%   |   |   | 2.0%to                4.0% |   |   | 2.0%to                4.0% |   |
|                                                                                                                  |   |                         |   |   |   |   |   |   |   |
| Weighted                average rates used to determine net periodic benefit                cost at June 30:     |   |                         |   |   |   |   |   |   |   |
|                                                                                                                  |   |                         |   |   |   |   |   |   |   |
| Range                of discount rates for pension plans                                                              |   | 4.75%to                6.25% |   |   | 4.60%to 5.10% |   |   | 4.20%to                6.15% |   |
|                                                                                                                  |   |                         |   |   |   |   |   |   |   |
| Expected                long-term return on plan assets                                                               |   |  6.0%                   |   |   |  5.5% |   |   |  5.5% |   |
|                                                                                                                  |   |                    |   |   |    |   |   |    |   |
| Range                of rates of compensation increase for                pension plans                     |   | 2.0%to                4.0%   |   |   | 2.0%to                4.0% |   |   | 2.0%to                4.0% |   |

----

***Note      13 – Business Segment Data***

----

|                                          |   | Years                Ended June 30, |      |
|-----------------------------------------------|--------|-------------------------------------|-----------|
| ($000s                omitted)                |   | 2007                                |      |   | 2006 |   |   | 2005 |   |
|                                          |   |                                |      |   |   |   |   |   |   |
| Net                sales:                     |   |                                |      |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 2,492,815 |   |   |   | 2,237,632 |   |   |   | 2,127,682 |   |
|      Consumer        |   |                                | 497,673   |   |   |   | 492,977 |   |   |   | 416,231 |   |
|      Professional    |   |                                | 560,656   |   |   |   | 517,288 |   |   |   | 486,976 |   |
| Total                                         |   | $                                   | 3,551,144 |   |   |   | 3,247,897 |   |   |   | 3,030,889 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
| Operating                income (loss):       |   |                                |      |   |   |   |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 340,116   |   |   |   | 336,795 |   |   |   | 347,834 |   |
|      Consumer        |   |                                | 13,587    |   |   |   | 50,813 |   |   |   | 26,958 |   |
|      Professional    |   |                                | 80,968    |   |   |   | 59,278 |   |   |   | 45,498 |   |
|      Other           |   |                                | (48,284   | ) |   |   | (49,645 | ) |   |   | (69,309 | ) |
| Total                                         |   | $                                   | 386,387   |   |   |   | 397,241 |   |   |   | 350,981 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
| Assets:                                       |   |                                |      |   |   |   |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 1,549,032 |   |   |   | 1,471,755 |   |   |   | 1,464,247 |   |
|      Consumer        |   |                                | 291,370   |   |   |   | 262,136 |   |   |   | 215,178 |   |
|      Professional    |   |                                | 310,966   |   |   |   | 291,155 |   |   |   | 250,931 |   |
|      Other           |   |                                | 357,500   |   |   |   | 350,706 |   |   |   | 271,627 |   |
| Total                                         |   | $                                   | 2,508,868 |   |   |   | 2,375,752 |   |   |   | 2,201,983 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
| Goodwill:                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 336,043   |   |   |   | 315,148 |   |   |   | 284,344 |   |
|      Consumer        |   |                                | 21,958    |   |   |   | 21,882 |   |   |   | 17,133 |   |
|      Professional    |   |                                | 45,748    |   |   |   | 44,189 |   |   |   | 43,594 |   |
| Total                                         |   | $                                   | 403,749   |   |   |   | 381,219 |   |   |   | 345,071 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
| Capital                expenditures:          |   |                                |      |   |   |   |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 150,385   |   |   |   | 105,777 |   |   |   | 138,485 |   |
|      Consumer        |   |                                | 9,178     |   |   |   | 8,316 |   |   |   | 7,925 |   |
|      Professional    |   |                                | 13,669    |   |   |   | 15,492 |   |   |   | 24,035 |   |
|      Other           |   |                                | 1,562     |   |   |   | 963 |   |   |   | 1,881 |   |
| Total                                         |   | $                                   | 174,794   |   |   |   | 130,548 |   |   |   | 172,326 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
| Depreciation                and amortization: |   |                                |      |   |   |   |   |   |   |   |   |   |
|      Automotive      |   | $                                   | 98,103    |   |   |   | 100,872 |   |   |   | 89,015 |   |
|      Consumer        |   |                                | 11,300    |   |   |   | 9,879 |   |   |   | 8,032 |   |
|      Professional    |   |                                | 16,334    |   |   |   | 17,181 |   |   |   | 19,073 |   |
|      Other           |   |                                | 1,425     |   |   |   | 2,017 |   |   |   | 2,545 |   |
| Total                                         |   | $                                   | 127,162   |   |   |   | 129,949 |   |   |   | 118,665 |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                |      |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                     |   | Years                Ended June 30, |      |
|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
| ($000s                omitted)                |   | 2007                                |      |   | 2006 |   |   | 2005 |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |
| Net                sales:                                                                                                |   |                                |      |   |   |   |   |   |   |
|                    U.S.                                                                                   |   | $                                   | 759,159   |   |   |   | 708,564 |   |   |   | 633,780 |   |
|                    Germany                                                                                |   |                                | 1,590,886 |   |   |   | 1,415,871 |   |   |   | 1,335,720 |   |
|                    Other Europe                                                                           |   |                                | 631,514   |   |   |   | 578,401 |   |   |   | 573,133 |   |
|                    Other                                                                                  |   |                                | 569,585   |   |   |   | 545,061 |   |   |   | 488,256 |   |
| Total                                                                                                                    |   | $                                   | 3,551,144 |   |   |   | 3,247,897 |   |   |   | 3,030,889 |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
| Long-lived                assets:                                                                                        |   |                                |      |   |   |   |   |   |   |   |   |   |
|                    U.S.                                                                                   |   | $                                   | 490,069   |   |   |   | 383,406 |   |   |   | 303,806 |   |
|                    Germany                                                                                |   |                                | 485,222   |   |   |   | 444,063 |   |   |   | 412,979 |   |
|                    Other Europe                                                                           |   |                                | 125,474   |   |   |   | 113,288 |   |   |   | 118,651 |   |
|                    Other                                                                                  |   |                                | 174,950   |   |   |   | 164,547 |   |   |   | 168,474 |   |
| Total                                                                                                                    |   | $                                   | 1,275,915 |   |   |   | 1,105,304 |   |   |   | 1,003,910 |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |
| Net                Assets                                                                                                |   |                                |      |   |   |   |   |   |   |   |   |   |
|                    U.S.                                                                                   |   | $                                   | 405,588   |   |   |   | 385,096 |   |   |   | 23,706 |   |
|                    Germany                                                                                |   |                                | 577,142   |   |   |   | 353,572 |   |   |   | 632,383 |   |
|                    Other Europe                                                                           |   |                                | 324,992   |   |   |   | 276,738 |   |   |   | 211,759 |   |
|                    Other                                                                                  |   |                                | 186,319   |   |   |   | 212,758 |   |   |   | 193,100 |   |
| Total                                                                                                                    |   | $                                   | 1,494,041 |   |   |   | 1,228,164 |   |   |   | 1,060,948 |   |
|                                                                                                                     |   |                                |      |   |   |   |   |   |   |   |   |   |

***Note      14 - Commitments and Contingencies***

----

*Proposed      Agree*
*ment and Plan of Merger*

***Note      15 - Derivatives***

----

----

***Note      16 – Proposed      Agreement  and Plan of Merger***

***Note      17 - Investment in Joint Venture***

*Consolidation of Variable Interest Entities*

----

***Note      18 - Earnings      Per Share Information***

|                                                    |   | Years                Ended June 30, |    |
|---------------------------------------------------------|--------|-------------------------------------|---------|
| ($000s                omitted except per share amounts) |   | 2007                                |    |   | 2006 |   |   | 2005 |   |
|                                                    |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   | Basic                               |    |   | Diluted |   |   | Basic |   |   | Diluted |   |   | Basic |   |   | Diluted |   |
|                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                               |   | $                                   | 313,963 |   |   |   | 313,963 |   |   |   | 255,295 |   |   |   | 255,295 |   |   |   | 232,848 |   |   |   | 232,848 |   |
|                                                    |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                of common stock outstanding       |   |                                | 65,310  |   |   |   | 65,310 |   |   |   | 66,260 |   |   |   | 66,260 |   |   |   | 67,120 |   |   |   | 67,120 |   |
| Employee                stock options                   |   |                                | ---     |   |   |   | 1,139 |   |   |   | --- |   |   |   | 1,845 |   |   |   | --- |   |   |   | 3,279 |   |
| Total                average equivalent shares          |   |                                | 65,310  |   |   |   | 66,449 |   |   |   | 66,260 |   |   |   | 68,105 |   |   |   | 67,120 |   |   |   | 70,399 |   |
|                                                    |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Earnings                per share*                     |   | $                                   | 4.81    |   |   |   | 4.72 |   |   |   | 3.85 |   |   |   | 3.75 |   |   |   | 3.47 |   |   |   | 3.31 |   |

***Note      19 - Quarterly Summary of Operations      (unaudited)***

| ($000s                omitted except per share amounts) |   | Three                months ended |    |
|---------------------------------------------------------|--------|-----------------------------------|---------|
| Fiscal                2007                              |   | September                30       |    |   | December                31 |   |   | March                31 |   |   | June                30 |   |
|                                     |   |                              |    |   |   |   |   |   |   |   |   |   |
| Net                sales                                |   | $                                 | 825,543 |   |   |   | 931,717 |   |   |   | 882,771 |   |   |   | 911,113 |   |
| Gross                profit                             |   | $                                 | 287,289 |   |   |   | 319,638 |   |   |   | 305,375 |   |   |   | 298,904 |   |
| Net                income                               |   | $                                 | 56,608  |   |   |   | 81,389 |   |   |   | 71,043 |   |   |   | 104,923 |   |
| Earnings                per share – basic         |   | $                                 | 0.86    |   |   |   | 1.25 |   |   |   | 1.09 |   |   |   | 1.61 |   |
| Earnings                per share – diluted       |   | $                                 | 0.85    |   |   |   | 1.22 |   |   |   | 1.07 |   |   |   | 1.58 |   |
|                                          |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                2006                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                |   | $                                 | 754,648 |   |   |   | 832,645 |   |   |   | 801,487 |   |   |   | 859,117 |   |
| Gross                profit                             |   | $                                 | 266,295 |   |   |   | 305,769 |   |   |   | 281,617 |   |   |   | 298,889 |   |
| Net                income                               |   | $                                 | 53,967  |   |   |   | 72,535 |   |   |   | 64,026 |   |   |   | 64,767 |   |
| Earnings                per share – basic         |   | $                                 | 0.82    |   |   |   | 1.10 |   |   |   | 0.96 |   |   |   | 0.97 |   |
| Earnings                per share – diluted       |   | $                                 | 0.79    |   |   |   | 1.07 |   |   |   | 0.94 |   |   |   | 0.95 |   |

**      **
**        **** **
**    **

----

**Item      9.  Changes in and Disagreements with Accountants on      Accounting and Financial Disclosure**

**Item      9A.  Controls and Procedures**

***Evaluation      of Disclosure Controls and Procedures:***

* *

*Change      in Internal Control Over Financial Reporting:*

**Item      9B.  Other Information**

**Part      III**

**Item      10.  Directors, Executive Officers and Corporate      Governance**

***Directors      and Executive Officers***

----

***Section      16(a) Beneficial Ownership Reporting Compliance***

----

***Corporate      Governance***

**Item      11.  Executive Compensation**

**Item      12.  Security Ownership of Certain Beneficial Owners      and Management and Related Stockholder Matters**

**Item      13.  Certain Relationships and Related Transactions,      and Director Independence**

**Item      14. ** **Principal Accountant      Fees and Services**

----

**Part      IV**

**Item      15. ** **Exhibits and Financial      Statement Schedules**

| The                following consolidated financial statements are filed as part of                this                report under “Part II, Item 8 – Financial Statements and Supplementary                Data”: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                  |   |   |
|                                                                                                                                                                                                                                  | **Financial                Statements:** | Page |
|                                                                                                                                                                                                                                  |   |   |
|                                                                                                                                                                                                                                  | Management’s                Report on Internal Control over Financial Reporting | 37 |
|                                                                                                                                                                                                                                  | Report                of Independent Registered Public Accounting Firm on                Internal Control                over Financial Reporting | 38 |
|                                                                                                                                                                                                                                  | Report                of Independent Registered Public Accounting Firm | 39 |
|                                                                                                                                                                                                                                  | Consolidated                Balance Sheets as of June 30, 2007 and 2006 | 40 |
|                                                                                                                                                                                                                                  | Consolidated                Statements of Operations for the years ended June                30, 2007, 2006 and 2005 | 41 |
|                                                                                                                                                                                                                                  | Consolidated                Statements of Cash Flows for the years ended June                30, 2007, 2006 and 2005 | 42 |
|                                                                                                                                                                                                                                  | Consolidated                Statements of Shareholders’ Equity and Comprehensive Income for the years                ended June 30, 2007, 2006 and 2005 | 43 |
|                                                                                                                                                                                                                                  | Notes                to Consolidated Financial Statements. | 44 |
|                                                                                                                                                                                                                        |   |   |
|                                                                                                                                                                                                                                  | **Financial                Statement Schedules:** |   |
|                                                                                                                                                                                                                                  | Schedule                II - Consolidated Valuation and Qualifying Accounts and                Reserves. | 80 |
|                                                                                                                                                                                                                                  | (Schedules                I, III, IV and V are not applicable and have therefore been                omitted.) |   |
|                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                  | **Exhibits:** |
| 2.1                                                                                                                                                                                                                                   | Agreement                and Plan of Merger, dated as of April 26, 2007, among Harman International                Industries, Incorporated, KHI Parent Inc. and KHI Merger Sub Inc.                (filed                as Exhibit 2.1 to the Current Report on Form 8-K filed with the Commission                on April 27, 2007, Commission File No. 001-09764, and hereby incorporated                by reference) |
| 3.1                                                                                                                                                                                                                                   | Restated                Certificate of Incorporation of Harman International Industries,                Incorporated, as amended. (filed as Exhibit 3.1 to the Quarterly                Report on                Form 10-Q for the quarter ended December 31, 2003, Commission File                No.                001-09764, and hereby incorporated by reference) |
| 3.2                                                                                                                                                                                                                                   | By-Laws                of Harman International Industries, Incorporated, as amended, dated                June                10, 2004. (filed as Exhibit 3.2 to the Annual Report on Form 10-K                for the                fiscal year ended June 30, 2004, Commission File No. 001-09764, and                hereby                incorporated by reference) |
| 4.1                                                                                                                                                                                                                                   | Rights                Agreement, dated as of December 13, 1999, between Harman                International Industries, Incorporated and ChaseMellon Shareholder                Services, L.L.C., as rights agent (including a Form of Certificate of                Designation of Series A Junior Participating Preferred Stock, a Form                of Right Certificate and a Summary of Rights to Purchase Preferred                Stock).                (filed as Exhibit 4.1 to the Form 8-A filed with the Commission                on December 16, 1999, Commission File No. 001-09764, and hereby                incorporated by reference) |
| 4.2                                                                                                                                                                                                                                   | Amendment                No. 1, dated as of April 26, 2007, to the Rights Agreement, dated                as of                December 13, 1999, by and between Harman International Industries,                Incorporated and ChaseMellon Shareholder Services, L.L.C. (filed                as                Exhibit 4.1 to the Registration Statement on Form 8-A/A filed with                the                Commission on April 27, 2007, Commission File No. 001-09764, and                hereby                incorporated by reference) |

----

| 4.3   | Certificate                of Designation of Series A Junior Participating Preferred Stock of                Harman                International Industries, Incorporated, dated January 11, 2000. (filed                as                Exhibit 4.3 to the Annual Report on Form 10-K for the fiscal year                ended                June 30, 2000, Commission File No. 001-09764, and hereby incorporated                by                reference)                                                                                                                                                                               |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1  | Amended                and Restated Multi-Currency, Multi-Option Credit Agreement, dated                June 22,                2006, among Harman International Industries, Incorporated, Harman                Holding                GmbH & Co. KG and the several lenders and agents from time to time                parties thereto. (filed as Exhibit 10.1 to the Current Report on                Form 8-K                filed with the Commission on June 26, 2006, Commission File No. 001-09764,                and hereby incorporated by reference)                                                                            |
| 10.2  | Guarantee,                dated June 22, 2006, in favor of JPMorgan Chase Bank, N.A., as                administrative agent for the several banks and other financial                institutions or entities from time to time parties to the Amended                and                Restated Multi-Currency, Multi-Option Credit Agreement, dated as                of June                22, 2006. (filed as Exhibit 10.2 to the Current Report on Form 8-K                filed                with the Commission on June 26, 2006, Commission File No. 001-09764,                and                hereby incorporated by reference) |
| 10.3  | Share                Purchase Agreement, dated October 26, 2004, among Harman Canada Co.                and                certain shareholders of QNX Software Systems Ltd. (filed as Exhibit                10.1                to the Quarterly Report on Form 10-Q for the quarter ended September                30,                2004, Commission File No. 001-09764, and hereby incorporated by                reference)                                                                                                                                                                                                               |
| 10.4  | Harman                International Industries, Incorporated 1992 Incentive Plan, as amended                and                restated. (filed as Exhibit B to the 1999 Proxy Statement, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                                                                                                                                                                                                                                                                                                                             |
| 10.5  | Harman                International Industries, Incorporated Amended and Restated 2002                Stock                Option and Incentive Plan. (filed as Exhibit 10.5 to the Annual Report                on                Form 10-K for the fiscal year ended June 30, 2006, Commission File                No.                001-09764, and hereby incorporated by reference) **                                                                                                                                                                                                                                                      |
| 10.6  | Form                of Harman International Industries, Incorporated 2002 Stock Option                and                Incentive Plan Nonqualified Stock Option Agreement for Non-Officer                Directors. (filed as Exhibit 10.11 to the Annual Report on Form 10-K                for                the fiscal year ended June 30, 2005, Commission File No. 001-09764,                and                hereby incorporated by reference)  **                                                                                                                                                                          |
| 10.7  | Form                of Harman International Industries, Incorporated 2002 Stock Option                and                Incentive Plan Incentive Stock Option Agreement for Officers and                Key                Employees. (filed as Exhibit 10.1 to the Current Report on Form 8-K                filed                with the Commission on August 22, 2005, Commission File No. 001-09764,                and                hereby incorporated by reference) **                                                                                                                                                                |
| 10.8  | Form                of Harman International Industries, Incorporated 2002 Stock Option                and                Incentive Plan Nonqualified Stock Option Agreement for Officers and                Key                Employees. (filed as Exhibit 10.2 to the Current Report on Form 8-K                filed                with the Commission on August 22, 2005, Commission File No. 001-09764,                and                hereby incorporated by reference) **                                                                                                                                                             |
| 10.9  | Form                of Harman International Industries, Incorporated 2002 Stock Option                and                Incentive Plan Restricted Stock Agreement for Officers and Key Employees.                (filed as Exhibit 10.3 to the Current Report on Form 8-K filed with                the                Commission on August 22, 2005, Commission File No. 001-09764, and                hereby                incorporated by reference) **                                                                                                                                                                                     |
| 10.10 | Form                of Harman International Industries, Incorporated 2002 Stock Option                and                Incentive Plan Restricted Share Unit Agreement for Officers and Key                Employees. (filed as Exhibit 10.3 to the Current Report on Form 8-K                filed                with the Commission on August 15, 2006, Commission File No. 001-09764,                and                hereby incorporated by reference) **                                                                                                                                                                                |
| 10.11 | Harman                International Industries, Incorporated 2002 Key Executive Officers                Bonus                Plan. (filed as Exhibit A to the 2002 Proxy Statement, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                                                                                                                                                                                                                                                                                                                                   |

----

| 10.12 | Harman                International Industries, Incorporated Supplemental Executive Retirement                Plan, as amended and restated as of October 1, 1999. (filed as Exhibit                10.27 to the Annual Report on Form 10-K for the fiscal year ended                June 30,                2000, Commission File No. 001-09764, and hereby incorporated by reference)                **                          |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13 | Amendment No. 1                to the Harman International Industries, Incorporated Supplemental                Executive Retirement Plan, dated September 24, 2002. (filed as                Exhibit 10.5 to the Quarterly Report on Form 10-Q for the                quarter ended December 31, 2002, Commission File No. 001-09764, and                hereby incorporated by reference) **       |
| 10.14 | Form                of Benefit Agreement under the Supplemental Executive Retirement                Plan.                (filed as Exhibit 10.14 to the Annual Report on Form 10-K for the                fiscal                year ended June 30, 2006, Commission File No. 001-09764, and hereby                incorporated by reference) **                                                                                   |
| 10.15 | Harman                International Industries, Inc. Deferred Compensation Plan, effective                June                1, 1997. (filed as Exhibit 4 to the Registration Statement on Form                S-8                (Reg. No. 333-28793) filed with the Commission June 9, 1997, and                hereby                incorporated by reference) **                                                             |
| 10.16 | Amendment                No. 1 to the Harman International Industries, Inc. Deferred                Compensation Plan dated October 1, 1999. (filed as Exhibit 10.46                to the                Annual Report on Form 10-K for the fiscal year ended June 30, 2000,                Commission File No. 001-09764, and hereby incorporated by reference)                **                                           |
| 10.17 | Amendment                No. 2 to the Harman International Industries, Inc. Deferred Compensation                Plan, effective December 16, 2003. (filed as Exhibit 10.1 to the                Quarterly                Report on Form 10-Q for the quarter ended December 31, 2003, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                       |
| 10.18 | Employment                Agreement between Harman Management GmbH and Helmut Schinagel (filed                as                Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission                on August 15, 2006, Commission File No. 001-09764, and hereby incorporated                by reference) **                                                                                                 |
| 10.19 | Letter                Agreement, dated June 3, 2005, between Harman International Industries,                Incorporated and Kevin L. Brown (filed as Exhibit 10.19 to the Annual                Report on Form 10-K for the fiscal year ended June 30, 2006, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                                               |
| 10.20 | Benefit                Agreement of Kevin Brown, dated April 30, 2007, under the Supplemental                Executive Retirement Plan. (filed as Exhibit 10.1 to the Quarterly                Report                on Form 10-Q for the quarter ended March 31, 2007, Commission File                No.                001-09764, and hereby incorporated by reference)                                                         |
| 10.21 | Employment                Agreement, dated November 6, 2006, between Harman International                Industries, Incorporated and Dr. Erich A. Geiger.  (filed as                Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter                ended                September 30, 2006, Commission File No. 001-09764, and hereby incorporated                by reference)                       |
| 10.22 | Consulting                Agreement, dated January 15, 2007, between Harman International                Industries, Incorporated and Dr. Erich A. Geiger (filed as Exhibit                10.1 to                the Quarterly Report on Form 10-Q for the quarter ended December                31, 2006,                Commission File No. 001-09764, and hereby incorporated by reference)                **                  |
| 10.23 | Form                of Severance Agreement between Harman International Industries,                Incorporated and each of Sidney Harman and Kevin L. Brown. (filed                as                Exhibit 10.71 to the Annual Report on Form 10-K for the fiscal year                ended                June 30, 2000, Commission File No. 001-09764, and hereby incorporated                by                reference) ** |
| 10.24 | Letter                Agreement, dated April 24, 2006, between Harman International Industries,                Incorporated and Douglas A. Pertz. (filed as Exhibit 10.1 to the                Current                Report on Form 8-K filed with the Commission on April 28, 2006, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                        |

----

| 10.25 | Letter                Agreement, dated May 8, 2007, between Harman International Industries,                Incorporated and Dinesh Paliwal. (filed as Exhibit 10.1 to the Current                Report on Form 8-K filed with the Commission on May 9, 2007, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                                                                        |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.26 | Severance                Agreement, dated May 8, 2007 between Harman International Industries,                Incorporated and Dinesh Paliwal (filed as Exhibit 10.2 to the Current                Report on Form 8-K filed with the Commission on May 9, 2007, Commission                File No. 001-09764, and hereby incorporated by reference)                **                                                                                       |
| 10.27 | Form                of Nonqualified Stock Option Agreement, related to the Stock Option                Award,                between Harman International Industries, Incorporated and Dinesh                Paliwal                (filed as Exhibit 10.3 to the Current Report on Form 8-K filed with                the                Commission on May 9, 2007, Commission File No. 001-09764, and hereby                incorporated by reference) ** |
| 10.28 | Form                of Restricted Stock Agreement, related to the Restricted Stock Award,                between Harman International Industries, Incorporated and Dinesh                Paliwal                (filed as Exhibit 10.4 to the Current Report on Form 8-K filed with                the                Commission on May 9, 2007, Commission File No. 001-09764, and hereby                incorporated by reference) **                     |
| 10.29 | Form                of Restricted Stock Agreement, related to the Inducement Stock Award,                between Harman International Industries, Incorporated and Dinesh                Paliwal                (filed as Exhibit 10.5 to the Current Report on Form 8-K filed with                the                Commission on May 9, 2007, Commission File No. 001-09764, and hereby                incorporated by reference) **                     |
| 10.30 | Form                of Restricted Stock Agreement, related to the Equity Replacement                Award,                between Harman International Industries, Incorporated and Dinesh                Paliwal                (filed as Exhibit 10.6 to the Current Report on Form 8-K filed with                the                Commission on May 9, 2007, Commission File No. 001-09764, and hereby                incorporated by reference) **    |
| 10.31 | Form                of Restricted Share Unit Agreement, related to the RSU Replacement                Award,                between Harman International Industries, Incorporated and Dinesh                Paliwal                (filed as Exhibit 10.7 to the Current Report on Form 8-K filed with                the                Commission on May 9, 2007, Commission File No. 001-09764, and hereby                incorporated by reference) **  |
| 10.32 | Consulting                Agreement, dated December 8, 2006, between Harman International                Industries, Incorporated and Floyd Toole (filed as Exhibit 10.2 to                the                Quarterly Report on Form 10-Q for the quarter ended December 31,                2006,                Commission File No. 001-09764, and hereby incorporated by reference).                **                                                  |
| 21.1  | Subsidiaries                of Harman International Industries, Incorporated. +                                                                                                                                                                                                                                                                                                                                                                             |
| 23.1  | Consent                of Independent Registered Public Accounting Firm. +                                                                                                                                                                                                                                                                                                                                                                                  |
| 31.1  | Certification                of Sidney Harman filed pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. +                                                                                                                                                                                                                                                                                                                        |
| 31.2  | Certification                of Dinesh Paliwal filed pursuant to Section 302 of the Sarbanes-Oxley                Act                of 2002. +                                                                                                                                                                                                                                                                                                             |
| 31.3  | Certification                of Kevin L. Brown filed pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. +                                                                                                                                                                                                                                                                                                                       |
| 32.1  | Certification                of Sidney Harman, Dinesh Paliwal and Kevin L. Brown filed pursuant                to 18                U.S.C. Section 1350, as adopted pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002. +                                                                                                                                                                                                             |

----

**SIGNATURES**

|                                        |               | HARMAN                INTERNATIONAL INDUSTRIES, INCORPORATED |
|-------------------------------------------------------|--------------------|--------------------------------------------------------------|
|                                   |               |                                                         |
|                                   |               |                                                         |
| Date:   August                29, 2007 |     | By:                                                | /s/ Dinesh                Paliwal |
|                                                  |               |                                                         |   |
|                                             |               |                                                         | Dinesh                Paliwal |
|                                             |               |                                                         | President,                Chief Executive Officer and Vice                Chairman |

|     |       | /s/                Sidney Harman            |    | Executive                Chairman of the Board                                                                   |
|--------------------|--------------------------------|---------------------------------------------|--------------|------------------------------------------------------------------------------------------------------------------|
|     |                      | Sidney                Harman                |         |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|     |                      |                    |    |                                                                                                        |
|          |                      | /s/                Dinesh Paliwal           |    | President,                Chief Executive Officer and Vice Chairman                                              |
|          |                      | Dinesh                Paliwal               |    | (Principal                Executive Officer)                                                                     |
|          |                      |                              |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|          |                      |                         |    |                                                                                                        |
|     |                      | /s/                Kevin L. Brown           |    | Executive                Vice President and Chief Financial Officer                                              |
|     |                           | Kevin                L. Brown               |    | (Principal                Financial Officer)                                                                     |
|     |                      |                         |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|          |                      |                         |    |                                                                                                        |
|     |                      | /s/                Sandra B. Robinson       |    | Vice                President – Financial Operations and Chief Accounting                Officer |
|          |                      | Sandra                B. Robinson           |    | (Principal                Accounting Officer)                                                                    |
|          |                      |                         |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|          |                      |                         |    |                                                                                                        |
|          |                      | /s/                Shirley M. Hufstedler    |    | Director                                                                                                         |
|     |                      | Shirley                M. Hufstedler        |    |                                                                                                        |
|     |                      |                         |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|          |                      |                         |    |                                                                                                        |
|     |                      | /s/                Ann McLaughlin Korologos |    | Director                                                                                                         |
|     |                      | Ann                McLaughlin Korologos     |    |                                                                                                        |
|     |                      |                         |    |                                                                                                        |
|          |                      |                    |    |                                                                                                        |
|     |                      |                         |    |                                                                                                        |
|     |                      | /s/                Edward H. Meyer          |    | Director                                                                                                         |
|     |                      | Edward                H. Meyer              |    |                                                                                                        |
|     |                      |                         |    |                                                                                                        |
|          |                      |                         |    |                                                                                                        |

----

**Schedule      II**

**HARMAN      INTERNATIONAL INDUSTRIES, INCORPORATED**

**Valuation      and Qualifying Accounts and Reserves**

**Years      Ended June 30, 2007, 2006 and 2005**

**($000s      omitted)**

| Classification                                 |   | Balance                atbeginningof                period |   |   | Charged                tocosts                andexpenses |         |   | Charged to                otheraccountsdescribe                (1) |         |   | Deductions |         |   | Balanceat                end ofperiod |         |
|------------------------------------------------|--------|------------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------------|--------|-------------------------------------------------------------------------|--------------|--------|------------|--------------|--------|---------------------------------------|--------------|
|                                           |   |                                                       |   |   |                                                      |         |   |                                                                    |         |   |       |         |   |                                  |         |
|                                           |   |                                                       |   |   |                                                      |         |   |                                                                    |         |   |       |         |   |                                  |         |
| **Year                ended June 30, 2005**    |   |                                                       |   |   |                                                      |         |   |                                                                    |         |   |       |         |   |                                  |         |
|                                           |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
| Allowance                for doubtful accounts |   | $                                                          | 8,657  |   |                                                      |  2,516  |   |                                                                    |  78     |   |       |  2,276  |   |                                  |  8,975  |   |
|                                           |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
| **Year                ended June 30, 2006**    |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
|                                           |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
| Allowance                for doubtful accounts |   | $                                                          | 8,975  |   |                                                      |  2,167  |   |                                                                    |  256    |   |       |  2,660  |   |                                  |  8,738  |   |
|                                           |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
| **Year                ended June 30, 2007**    |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
|                                           |   |                                                       |   |   |                                                      |    |   |                                                                    |    |   |       |    |   |                                  |    |   |
| Allowance                for doubtful accounts |   | $                                                          | 8,738  |   |                                                      |  735    |   |                                                                    |  342    |   |       |  3,775  |   |                                  |  6,040  |   |

----