Lexmark 2008 Annual Report Download - page 24

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The outbreak of a communicable disease may negatively impact the health and welfare of the
Company’s customers, channel partners, employees and those of its manufacturing partners and
negatively impact the Company’s operating results.
• The Company relies heavily on the health and welfare of its employees, the employees of its
manufacturing and distribution partners and customers. The widespread outbreak of any form of
communicable disease affecting a large number of workers could adversely impact the Company’s
operating results.
Any variety of factors unrelated to the Company’s operating performance may negatively impact the
Company’s operating results or the Company’s stock price.
• Factors unrelated to the Company’s operating performance, including the financial failure or loss of
significant customers, resellers, manufacturing partners or suppliers; the outcome of pending and
future litigation or governmental proceedings; and the ability to retain and attract key personnel,
could also adversely affect the Company’s operating results. In addition, the Company’s stock price,
like that of other technology companies, can be volatile. Trading activity in the Company’s common
stock, particularly the trading of large blocks and intraday trading in the Company’s common stock,
may affect the Company’s common stock price.
Item 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
Item 2. PROPERTIES
Lexmark’s corporate headquarters and principal development facilities are located on a 374 acre campus
in Lexington, Kentucky. At December 31, 2008, the Company owned or leased 7.5 million square feet of
administrative, sales, service, research and development, warehouse and manufacturing facilities
worldwide. The Company’s properties are used by both PSSD and ISD. Approximately 3.7 million
square feet is located in the U.S. and the remainder is located in various international locations. The
Company’s principal international manufacturing facilities are located in Mexico and the Philippines. The
principal domestic manufacturing facility is located in Colorado. The Company occupies facilities for
development in the U.S., India and the Philippines. The Company owns approximately 66 percent of the
worldwide square footage and leases the remaining 34 percent. The leased property has various lease
expiration dates. The Company believes that it can readily obtain appropriate additional space as may be
required at competitive rates by extending expiring leases or finding alternative space.
None of the property owned by Lexmark is held subject to any major encumbrances and the Company
believes that its facilities are in good operating condition.
Item 3. LEGAL PROCEEDINGS
On December 30, 2002 (“02 action”) and March 16, 2004 (“04 action”), the Company filed claims against
Static Control Components, Inc. (“SCC”) in the U.S. District Court for the Eastern District of Kentucky (the
“District Court”) alleging violation of the Company’s intellectual property and state law rights. Similar claims
in a separate action were filed by the Company in the District Court against David Abraham and Clarity
Imaging Technologies, Inc. (“Clarity”) on October 8, 2004. SCC and Clarity have filed counterclaims
against the Company in the District Court alleging that the Company engaged in anti-competitive and
monopolistic conduct and unfair and deceptive trade practices in violation of the Sherman Act, the Lanham
Act and state laws. SCC has stated in its legal documents that it is seeking approximately $17.8 million to
$19.5 million in damages for the Company’s alleged anticompetitive conduct and approximately $1 billion
for Lexmark’s alleged violation of the Lanham Act. Clarity has not stated a damage dollar amount. SCC and
Clarity are seeking treble damages, attorney fees, costs and injunctive relief. On September 28, 2006, the
District Court dismissed the counterclaims filed by SCC alleging that the Company engaged in anti-
competitive and monopolistic conduct and unfair and deceptive trade practices in violation of the Sherman
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