Lexmark 2008 Annual Report Download - page 48

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Impact to 2008 Financial Results
For the year ended December 31, 2008, the Company incurred charges of $22.8 million for the 2008
Restructuring Plan as follows:
(In Millions)
2008 Action
Restructuring-
related
Charges (Note 4) Project Costs Total
Accelerated depreciation charges/project costs . . . . . . . . . . $18.0 $1.8 $19.8
Employee termination benefit charges/project costs . . . . . . 3.0 — 3.0
Total restructuring-related charges/project costs . . . . . . . . . $21.0 $1.8 $22.8
The $19.8 million of accelerated depreciation charges and project costs are included in Cost of revenue,
and the $3.0 million of total employee termination benefit charges are included in Restructuring and related
charges on the Consolidated Statements of Earnings. The Company incurred $22.7 million in ISD and
$0.1 million in All other.
Liability Rollforward
The following table presents a rollforward of the liability incurred for employee termination benefits in
connection with the 2008 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2)
Reversals
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.4)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.8
1) Other consists of changes in the liability balance due to foreign currency translations.
2) Reversals due to changes in estimates for employee termination benefits.
2007 Restructuring Plan
General
On October 23, 2007, the Company announced the “2007 Restructuring Plan”, which included:
• Closing one of the Company’s inkjet supplies manufacturing facilities in Mexico and additional
optimization measures at the remaining inkjet facilities in Mexico and the Philippines;
• Reducing the Company’s business support cost and expense structure by further consolidating
activity globally and expanding the use of shared service centers in lower-cost regions — the areas
impacted are supply chain, service delivery, general and administrative expense, as well as
marketing and sales support functions; and
• Focusing consumer segment marketing and sales efforts into countries or geographic regions that
have the highest supplies usage.
The 2007 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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