Lexmark 2009 Annual Report Download - page 53
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Liability Rollforward
As of December 31, 2009, the Company had no remaining liability balance for employee termination
benefits in connection with the 2008 Restructuring Plan.
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 $9.9 million for the 2007
Restructuring Plan as follows:
(In Millions)
2007 Action
Restructuring-
related Charges
(Note 4) Project Costs Total
Accelerated depreciation charges/project costs . . . . . . . . . . . $1.8 $0.9 $2.7
Employee termination benefit charges/project costs . . . . . . . . 3.1 3.7 6.8
Contract termination and lease charges . . . . . . . . . . . . . . . . . 0.4 — 0.4
Total restructuring-related charges/project costs . . . . . . . . . . . $5.3 $4.6 $9.9
For the year ended December 31, 2009, the Company incurred $2.6 million of accelerated depreciation
charges and project costs in Cost of revenue, and $0.1 million of accelerated depreciation charges in
Selling, general and administrative on the Consolidated Statements of Earnings. The $3.5 million of total
employee termination benefits and contract termination and lease charges are included in Restructuring
and related charges, and the $3.7 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
(reversals) of $3.1 million in PSSD, $(0.7) million in ISD and $7.5 million in All other. The $(0.7) million
represents a reversal of previously accrued accelerated depreciation costs that were incorrectly recorded.
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