Lexmark 2008 Annual Report Download - page 47

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2009 Restructuring Plan
General
In response to the global economic weakening, on January 13, 2009, the Company announced a
restructuring plan (the “2009 Restructuring Plan”). The 2009 Restructuring Plan is expected to impact
about 375 positions through the end of 2009. The areas impacted include general and administrative
functions, supply chain and sales support, research and development program consolidation, as well as
marketing and sales management. The Company estimates the 2009 Restructuring Plan will result in total
pre-tax charges of approximately $45 million, all of which will require cash. Expected savings are
$40 million in 2009 and $50 million per year thereafter. Approximately 95% of the savings are
expected to benefit operating expense, and the remaining 5% will impact cost of sales. The Company
expects the 2009 Restructuring Plan to be substantially completed by the end of 2009.
Impact to 2008 Financial Results
For the year ended December 31, 2008, the Company incurred $20.2 million for the 2009 Restructuring
Plan as follows:
(In Millions)
2009 Action
Restructuring-
related
Charges(Note 4)
Project
Costs Total
Employee termination benefit charges/project costs . . . . . . . . $20.2 $— $20.2
The Company incurred $15.5 million in PSSD, $1.7 million in ISD and $3.0 million in All other. The
$20.2 million of total employee termination benefit charges are included in Restructuring and related
charges on the Consolidated Statements of Earnings.
Liability Rollforward
The following table presents a rollforward of the liability incurred for employee termination benefits in
connection with the 2009 Restructuring Plan. The liability is included in Accrued liabilities on the
Company’s Consolidated Statements of Financial Position.
Employee
Termination
Benefits
Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.7
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.2
(1)
Other consists of changes in the liability balance due to foreign currency translations.
2008 Restructuring Plan
General
To enhance the efficiency of the Company’s inkjet cartridge manufacturing operations, the Company
announced a plan (the “2008 Restructuring Plan”) on July 22, 2008, that resulted in the closure of one of
the Company’s inkjet supplies manufacturing facilities in Mexico. The 2008 Restructuring Plan is expected
to be substantially completed by the end of the first quarter of 2009, and any remaining charges to be
incurred will be immaterial.
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