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For the year ended December 31, 2008, accelerated depreciation charges are included in Cost of revenue,
and 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 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
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.8)
Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —
(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 was substantially completed by the end of the first quarter of 2009. In the
fourth quarter of 2009, the Company incurred $3.9 million in additional restructuring-related charges as a
result of revisions in previous estimates. The Company expects any remaining charges related to the 2007
Restructuring Plan to be immaterial.
Impact to 2009 Financial Results
For the year ended December 31, 2009, the Company incurred charges of $5.3 million for the 2007
Restructuring Plan as follows:
Accelerated depreciation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.8
Employee termination benefit charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Contract termination and lease charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4
Total restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5.3
For the year ended December 31, 2009, the Company incurred $1.7 million of accelerated depreciation
charges in Cost of revenue and $0.1 million in Selling, general and administrative on the Consolidated
94