Lexmark 2008 Annual Report Download - page 51

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Impact to 2006 Financial Results
For the year ended December 31, 2006, the Company incurred net pre-tax charges and project costs of
$125.2 million related to the 2006 actions. Of the $125.2 million, $42.1 million is included in Cost of
revenue, $11.9 million in Selling, general and administrative and $71.2 million in Restructuring and related
charges on the Company’s Consolidated Statements of Earnings. For the year ended December 31, 2006,
the Company incurred total pre-tax restructuring-related charges and project costs of $35.9 million in
PSSD, $57.2 million in ISD and $42 million in All other. All other operating income also included a
$9.9 million pension curtailment gain.
Liability Rollforward
The following table presents a rollforward of the liability incurred for employee termination benefits and
contract termination and lease charges in connection with the 2006 actions. Of the total $2.1 million
restructuring liability, $1.0 million is included in Accrued liabilities and $1.1 million is included in Other
liabilities on the Company’s Consolidated Statements of Financial Position.
Employee
Termination
Benefit
Charges
Contract
Termination &
Lease Charges Total
Balance at January 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25.3 $ 4.8 $ 30.1
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14.0) (1.7) (15.7)
Reversals
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.9) (1.7) (2.6)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . 10.4 1.4 11.8
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.0 1.0
Payments & other
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.8) (0.7) (8.5)
Reversals
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2) — (2.2)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . $ 0.4 $ 1.7 $ 2.1
(1)
Other consists of additions due to positions being eliminated in 2007 and changes in the liability balance due to foreign currency
translations.
(2)
Other consists of changes in the liability balance due to foreign currency translations.
(3)
Reversals due to changes in estimates for employee termination benefits and contract termination and lease charges.
PENSION AND OTHER POSTRETIREMENT PLANS
The following table provides the total pre-tax cost related to Lexmark’s retirement plans for the years 2008,
2007 and 2006. Cost amounts are included as an addition to the Company’s cost and expense amounts in
the Consolidated Statements of Earnings.
(Dollars in Millions) 2008 2007 2006
Total cost of pension and other postretirement plans . . . . . . . . . . . . . . . . . $37.0 $40.2 $34.4
Comprised of:
Defined benefit pension plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.4 $13.2 $12.5
Defined contribution plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.1 25.8 20.5
Other postretirement plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 1.2 1.4
The increase in the cost of defined contribution plans in 2007 and 2008 compared to 2006 was primarily
due to the enhancement of benefits in the U.S. plan that were enacted in April 2006. Changes in actuarial
assumptions did not have a significant impact on the Company’s results of operations in 2007 and 2008,
nor are they expected to have a material effect in 2009. Future effects of retirement-related benefits on the
operating results of the Company depend on economic conditions, employee demographics, mortality
rates and investment performance. Refer to Part II, Item 8, Note 15 of the Notes to Consolidated Financial
Statements for additional information relating to the Company’s pension and other postretirement plans.
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