Lexmark 2008 Annual Report Download - page 109

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Federal Supreme Court. The Company believes the amount accrued represents its best estimate of the
copyright fee issues currently pending.
For those all-in-one and/or multifunctional devices (“AIO/MFDs”) sold in Germany prior to December 31,
2001, Lexmark has reached a satisfactory resolution with VG Wort and has paid the applicable copyright
fee levies.
For those AIO/MFDs sold in Germany after December 31, 2001 through December 31, 2007, VG Wort
instituted non-binding arbitration proceedings against the Company in December 2006 before the
arbitration board of the Patent and Trademark Office relating to whether and to what extent copyright
levies should be imposed on such AIO/MFDs. A non-binding proposal was served in the arbitration
proceeding on December 24, 2008. This proposal has been rejected by the parties. VG Wort has the option
to file a lawsuit against Lexmark in the Regional Appeal Court in Munich, Germany seeking levies on
AIO/MFDs for the aforementioned period.
For those single function printer devices and AIO/MFDs sold in Germany by the Company after
December 31, 2007, pursuant to the new German Copyright Act applicable as of January 1, 2008, the
Company, other industry participants and the collecting societies have agreed upon an applicable levy rate
for such sales of single function printer devices and AIO/MFDs and the Company has agreed to collect and
pay such levies as appropriate.
The Company believes the amounts accrued represent its best estimate of the copyright fee issues
currently pending and these accruals are included in Accrued liabilities on the Consolidated Statements of
Financial Position.
18. SEGMENT DATA
Lexmark manufactures and sells a variety of printing and multifunction products and related supplies and
services and is primarily managed along its divisional segments: PSSD, formerly known as the Business
market segment, and ISD, formerly known as the Consumer market segment. The Company evaluates the
performance of its segments based on revenue and operating income, and does not include segment
assets or other income and expense items for management reporting purposes. Segment operating
income (loss) includes: selling, general and administrative; research and development; restructuring and
related charges; and other expenses, certain of which are allocated to the respective segments based on
internal measures and may not be indicative of amounts that would be incurred on a stand alone basis or
may not be indicative of results of other enterprises in similar businesses. All other operating income (loss)
includes significant expenses that are managed outside of the reporting segments. These unallocated
costs include such items as information technology expenses, occupancy costs, stock-based
compensation and certain other corporate and regional general and administrative expenses such as
finance, legal and human resources.
The following table includes information about the Company’s reportable segments for the year ended
December 31:
2008 2007 2006
Revenue:
PSSD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,981.6 $2,999.2 $2,869.1
ISD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,546.8 1,974.7 2,239.0
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,528.4 $4,973.9 $5,108.1
Operating income (loss):
PSSD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 497.1 $ 612.0 $ 600.1
ISD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137.1 93.4 246.0
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (357.0) (384.1) (403.6)
Total operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 277.2 $ 321.3 $ 442.5
103