Lexmark 2009 Annual Report Download - page 45

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Operating Expense
The following table presents information regarding the Company’s operating expenses during the periods
indicated:
(Dollars in Millions) Dollars % of Rev Dollars % of Rev Dollars % of Rev
2009 2008 2007
Research and development . . . $ 375.3 9.7% $ 423.3 9.3% $ 403.8 8.1%
Selling, general &
administrative . . . . . . . . . . . . 647.8 16.7% 807.3 17.9% 812.8 16.4%
Restructuring and related
charges. . . . . . . . . . . . . . . . . 70.6 1.8% 26.8 0.6% 25.7 0.5%
Total operating expense . . . . . . $1,093.7 28.2% $1,257.4 27.8% $1,242.3 25.0%
Research and development decreased in 2009 compared to the prior year primarily due to the Company’s
efforts to reduce these operating expenses through platform consolidations and increased productivity.
Research and development increased in 2008 compared to the prior year primarily due to the Company’s
investment to support laser product and solution development.
Selling, general and administrative (“SG&A”) expenses in 2009 decreased YTY primarily driven by lower
selling expenses along with lower general and administrative expenses. SG&A expenses in 2008
decreased YTY due to lower general and administrative expenses. The lower SG&A expenses for
both years were attributable to savings realized from the Company’s restructuring actions. Additionally,
SG&A expenses in 2009 and 2008 included project costs related to the Company’s restructuring activities.
See discussion below of restructuring-related charges and project costs included in the Company’s
operating expenses for the years presented in the table above.
In 2009, the Company incurred $89.8 million of restructuring-related charges and project costs due to the
Company’s restructuring plans. Of the $89.8 million of total restructuring-related charges and project costs
incurred in 2009, $19.2 million is included in Selling, general and administrative while $70.6 million is
included in Restructuring and related charges on the Company’s Consolidated Statements of Earnings.
In 2008, the Company incurred $50.2 million of restructuring-related charges and project costs due to the
Company’s restructuring plans. Of the $50.2 million of total restructuring-related charges and project costs
incurred in 2008, $23.4 million is included in Selling, general and administrative while $26.8 million is
included in Restructuring and related charges on the Company’s Consolidated Statements of Earnings.
In 2007, the Company incurred $35.0 million of restructuring-related charges and project costs in
connection with the Company’s restructuring plans. Of the $35.0 million of total restructuring-related
charges and project costs incurred in 2007, $9.3 million (net of a $3.5 million pre-tax gain on the sale of the
Rosyth, Scotland facility) is included in Selling, general and administrative while $25.7 million is included in
Restructuring and related charges on the Company’s Consolidated Statements of Earnings.
See “Restructuring and Related Charges and Project Costs” that follows for further discussion of the
Company’s restructuring plans.
39