Lexmark 2009 Annual Report Download - page 103

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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 ending $1.2 million
restructuring liability, $0.5 million is included in Accrued liabilities and $0.7 million is included in Other
liabilities on the Company’s Consolidated Statements of Financial Position. Of the $2.1 million
restructuring liability on December 31, 2008, $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
Benefits
Contract
Termination &
Lease Charges Total
Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.4 $ 1.4 $11.8
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.0 1.0
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.8) (0.7) (8.5)
Reversals
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.2) — (2.2)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . $ 0.4 $ 1.7 $ 2.1
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 (0.5) (0.3)
Reversals
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.6) — (0.6)
Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 1.2 $ 1.2
(1)
Other consists of changes in the liability balance due to foreign currency translations. In 2009, amounts for employee termination
benefits are due entirely to foreign currency translations.
(2)
Reversals due to changes in estimates for employee termination benefits.
General
As noted in the review of the 2008 and 2007 restructuring plans, the Company reversed in 2009 a
combined $2.2 million of previously accrued accelerated depreciation costs that were incorrectly recorded.
The Company does not believe this adjustment is material to its Consolidated Financial Statements for the
year ended December 31, 2009 or to any prior years’ Consolidated Financial Statements.
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, 2009, 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
Common Stock. Approximately 49.3 million shares of Class A Common Stock have been authorized for
these stock incentive plans.
For the years ended December 31, 2009, 2008 and 2007, the Company incurred pre-tax stock-based
compensation expense of $20.7 million, $32.8 million and $41.3 million, respectively, in the Consolidated
Statements of Earnings.
The following table presents a breakout of the stock-based compensation expense recognized for the
years ended December 31:
2009 2008 2007
Cost of revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.3 $ 2.8 $ 3.4
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 5.1 6.2
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 24.9 31.7
Stock-based compensation expense before income taxes . . . . . . . . . . . . 20.7 32.8 41.3
Income tax benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.9) (12.2) (15.9)
Stock-based compensation expense after income taxes . . . . . . . . . . . . . $13.8 $ 20.6 $ 25.4
97