Lexmark 2009 Annual Report Download - page 49

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The October 2009 Restructuring Plan is expected to impact about 825 positions worldwide and should
result in total pre-tax charges of approximately $120 million. Charges of $63.5 million were incurred in
2009, with approximately $56.5 million expected to be incurred in 2010 — 2011. The company expects the
total cash cost of this plan to be approximately $105 million.
Lexmark expects the October 2009 Restructuring Plan to generate savings of approximately $70 million in
2010, and ongoing savings beginning in 2011 of approximately $110 million. These ongoing savings
should be split approximately 60% to operating expense and 40% to cost of goods sold. Ongoing cash
savings of approximately $105 million are expected beginning in 2011.
Impact to 2009 Financial Results
For the year ended December 31, 2009, the Company incurred charges of $63.5 million for the October
2009 Restructuring Plan as follows:
(In Millions)
October 2009
Restructuring-
related
Charges
(Note 4)
Project
Costs Total
Accelerated depreciation charges/project costs . . . . . . . . . . . . . $ 6.2 $0.9 $ 7.1
Employee termination benefit charges/project costs . . . . . . . . . 52.4 3.0 55.4
Contract termination and lease charges . . . . . . . . . . . . . . . . . . 1.0 — 1.0
Total restructuring-related charges/project costs . . . . . . . . . . . . $59.6 $3.9 $63.5
The Company incurred $7.1 million of accelerated depreciation charges and project costs in Cost of
revenue on the Consolidated Statements of Earnings. Employee termination benefit charges of
$52.4 million and contract termination and lease charges of $1.0 million are included in Restructuring
and related charges, and $3.0 million of related project costs are included in Selling, general and
administrative on the Company’s Consolidated Statements of Earnings.
For the year ended December 31, 2009, the Company incurred restructuring and related charges and
project costs related to the October 2009 Restructuring Plan of $47.0 million in PSSD, $4.2 million in ISD
and $12.3 million in All other.
Liability Rollforward
The following table represents a rollforward of the liability incurred for employee termination benefits and
contract termination and lease charges in connection with the October 2009 Restructuring Plan. Of the
total $50.9 million restructuring liability, $23.6 million is included in Accrued liabilities and $27.3 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, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ —
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.5 1.0 52.5
Payments & Other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.5) — (1.5)
Reversals
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) — (0.1)
Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . $49.9 $1.0 $50.9
(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
43