Lexmark 2008 Annual Report Download - page 83

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in Restructuring and related charges on the Company’s Consolidated Statements of Earnings. Of the net
$0.6 million reversed in 2008, the Company recognized $(0.3) million in PSSD and $(0.3) million in All
other.
Impact to 2007 Financial Results
During the first quarter of 2007, the Company sold its Rosyth, Scotland facility for $8.1 million and
recognized a $3.5 million pre-tax gain on the sale that is included in Selling, general and administrative on
the Consolidated Statements of Earnings.
During the second quarter of 2007, the Company substantially liquidated the remaining operations of its
Scotland entity and recognized an $8.1 million pre-tax gain from the realization of the entity’s accumulated
foreign currency translation adjustment generated on the investment in the entity during its operating life.
This gain is included in Other (income) expense, net on the Company’s Consolidated Statements of
Earnings.
Impact to 2006 Financial Results
For the year ended December 31, 2006, the Company incurred pre-tax charges of $121.1 million related to
the 2006 actions which were partially offset by a $9.9 million pension curtailment gain. Of the $111.2 million
of net pre-tax charges incurred, $40 million is included in Cost of revenue 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 of $35.2 million
in PSSD, $54.7 million in ISD and $31.2 million in All other. All other operating income also included the
$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.
5. STOCK-BASED COMPENSATION
Lexmark has various stock incentive plans to encourage employees and nonemployee directors to remain
with the Company and to more closely align their interests with those of the Company’s stockholders. As of
December 31, 2008, awards under the programs consisted of stock options, restricted stock units
(“RSUs”) and deferred stock units (“DSUs”). The Company currently issues the majority of shares
related to its stock incentive plans from the Company’s authorized and unissued shares of Class A
77