Lexmark 2009 Annual Report Download - page 113

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Changes in the Company’s warranty liability for standard warranties and deferred revenue for extended
warranties, are presented in the tables below:
Warranty Liability:
2009 2008
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50.9 $ 62.3
Accruals for warranties issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.1 100.6
Accruals related to pre-existing warranties (including changes in estimates). . . 4.4 0.6
Settlements made (in cash or in kind) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (92.8) (112.6)
Balance at December 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46.6 $ 50.9
Deferred service revenue:
2009 2008
Balance at January 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $203.7 $188.9
Revenue deferred for new extended warranty contracts . . . . . . . . . . . . . . . . . . 80.6 92.6
Revenue recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88.4) (77.8)
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $195.9 $203.7
Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.9 82.9
Non-current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.0 120.8
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $195.9 $203.7
Both the short-term portion of warranty and the short-term portion of extended warranty are included in
Accrued liabilities on the Consolidated Statements of Financial Position. Both the long-term portion of
warranty and the long-term portion of extended warranty are included in Other liabilities on the
Consolidated Statements of Financial Position. The split between the short-term and long-term portion
of the warranty liability is not disclosed separately above due to immaterial amounts in the long-term
portion.
Other liabilities, in the noncurrent liabilities section of the balance sheet, consisted of the following at
December 31:
2009 2008
Pension/Postretirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $219.3 $319.4
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.9 125.3
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160.7 102.4
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $499.9 $547.1
11. DEBT
Senior Notes — Long-term Debt and Current Portion of Long-term Debt
In May 2008, the Company repaid its $150 million principal amount of 6.75% senior notes that were due on
May 15, 2008. Additionally, in May 2008, the Company completed a public debt offering of $650 million
aggregate principal amount of fixed rate senior unsecured notes. The notes are split into two tranches of
five- and ten-year notes respectively. The five-year notes with an aggregate principal amount of
$350 million and 5.9% coupon were priced at 99.83% to have an effective yield to maturity of 5.939%
and will mature June 1, 2013 (referred to as the “2013 senior notes”). The ten-year notes with an aggregate
principal amount of $300 million and 6.65% coupon were priced at 99.73% to have an effective yield to
maturity of 6.687% and will mature June 1, 2018 (referred to as the “2018 senior notes”). At December 31,
2009, the outstanding balance was $648.9 million (net of unamortized discount of $1.1 million). At
December 31, 2008, the outstanding balance was $648.7 million (net of unamortized discount of
$1.3 million).
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