Lexmark 2008 Annual Report Download - page 60

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Contractual Cash Obligations
The following table summarizes the Company’s contractual obligations at December 31, 2008:
(Dollars in Millions) Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Long-term debt
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . $ 933 $ 41 $ 81 $421 $390
Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 — — —
Operating leases. . . . . . . . . . . . . . . . . . . . . . . . . . 94 36 41 14 3
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . 160 160 — — —
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . 29 6 23 — —
Other long-term liabilities
(2)
.................. 62 38 7 — 17
Total contractual obligations . . . . . . . . . . . . . . . . . $1,279 $282 $152 $435 $410
(1) includes interest payments
(2) includes current portion of other long-term liabilities
Long-term debt reported in the table above includes principal repayments of $350 million and $300 million
in the 3-5 Years and More than 5 Years columns, respectively. All other amounts represent interest
payments.
Purchase obligations reported in the table above include agreements to purchase goods or services that
are enforceable and legally binding on the Company and that specify all significant terms, including: fixed
or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.
In connection with the Company’s restructuring programs, the total liability balance at December 31, 2008
was $39 million, including $37 million that is included in Accrued liabilities and is expected to be paid in the
next twelve months and $2 million that is included in Other liabilities on the Consolidated Statements of
Financial Position. The $39 million total is included in Other long-term liabilities in the table above, with
short-term and long-term amounts reported separately in the Less than 1 Year and 1-3 Years columns,
respectively. These payments will relate mainly to employee termination benefits and contract termination
and lease charges.
The Company’s funding policy for its pension plans is to fund minimum amounts according to the
regulatory requirements under which the plans operate. From time to time, the Company may choose
to fund amounts in excess of the minimum for various reasons. The Company is currently expecting to
contribute approximately $100 million to its pension and other postretirement plans in 2009, driven by the
steep decline in the fair value of plan assets that occurred in 2008. Expected funding obligations beyond
2009 are uncertain due to a variety of factors. The effect of any future contributions the Company may be
obligated or otherwise choose to make could be material to the Company’s future cash flows from
operations. Due to the uncertainty of future funding obligations beyond 2009, the table above contains no
amounts for pension plan contributions.
The Company’s financial obligation to collect, recycle, treat and dispose of the printing devices it produces,
and in some instances, historical waste equipment it holds, is not shown in the table above due to the lack
of historical data necessary to project future dates of payment. At December 31, 2008, the Company’s
estimated liability for this obligation was a current liability of $1 million and a long-term liability of
$33 million. These amounts were included in Accrued liabilities and Other liabilities, respectively, on
the Consolidated Statements of Financial Position. Refer to the “Risk Factors” section in Part I, Item 1A of
this report for additional information regarding the Waste Electrical and Electronic Equipment Directive
adopted by the European Union.
As of December 31, 2008, the Company had accrued approximately $118 million for pending copyright fee
issues, including litigation proceedings, local legislative initiatives and/or negotiations with the parties
involved. These accruals are included in Accrued liabilities on the Consolidated Statements of Financial
Position. The liability is not included in the table above due to the level of uncertainty regarding the timing of
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