Lexmark 2007 Annual Report Download - page 77

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At December 31, 2006, the Company’s available-for-sale Marketable securities consisted of the following:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Municipal debt securities . . . . . . . . . . . . . . . . . . . . . $172.2 $ — $ — $172.2
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . 220.7 — — 220.7
U.S. gov’t and agency debt securities . . . . . . . . . . . 10.6 — — 10.6
Asset-backed and mortgage-backed securities. . . . . 31.1 — — 31.1
Total security investments . . . . . . . . . . . . . . . . . . . . 434.6 — — 434.6
Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.3) — — (28.3)
Total marketable securities. . . . . . . . . . . . . . . . . . . . $406.3 $ — $ — $406.3
Although contractual maturities of the Company’s debt securities may be greater than one year, the
investments are classified as current assets in the Consolidated Statements of Financial Position due to
the Company’s expected holding period of less than one year. The contractual maturities of the Company’s
available-for-sale marketable debt securities noted above were as follows:
Amortized
Cost
Estimated
Fair Value
Amortized
Cost
Estimated
Fair Value
2007 2006
Due in less than one year . . . . . . . . . . . . . . . . . . . . . $111.3 $111.2 $211.2 $211.2
Due in 1-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.9 211.1 41.3 41.3
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . 217.2 217.1 182.1 182.1
Total available-for-sale marketable debt securities. . . . $539.4 $539.4 $434.6 $434.6
Proceeds from the sales and maturities of the Company’s available-for-sale marketable securities were
$855.3 million in 2007, $1,721.0 million in 2006 and $1,824.7 million in 2005. The Company recognized
immaterial gross realized gains and losses from these sales in 2007, 2006 and 2005. The Company uses
the specific identification method when accounting for the costs of its available-for-sale marketable
securities sold.
6. TRADE RECEIVABLES
The Company’s trade receivables are reported in the Consolidated Statements of Financial Position net of
allowances for doubtful accounts and product returns. Trade receivables consisted of the following at
December 31:
2007 2006
Gross trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $615.3 $622.3
Allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36.5) (38.0)
Trade receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $578.8 $584.3
In the U.S., the Company transfers a majority of its receivables to its wholly-owned subsidiary, Lexmark
Receivables Corporation (“LRC”), which then may transfer the receivables on a limited recourse basis to
an unrelated third party. The financial results of LRC are included in the Company’s consolidated financial
results. LRC is a separate legal entity with its own separate creditors who, in a liquidation of LRC, would be
entitled to be satisfied out of LRC’s assets prior to any value in LRC becoming available for equity claims of
the Company.
In October 2004, the Company entered into an amended and restated agreement to sell a portion of its
trade receivables on a limited recourse basis. The amended agreement allows for a maximum capital
availability of $200 million under this facility. The primary purpose of the amendment was to extend the
term of the facility to October 16, 2007, with required annual renewal of commitments.
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