Lexmark 2009 Annual Report Download - page 67

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Long-term debt reported in the table above includes principal repayments of $350 million and $300 million
in the 3-5 Years and More than 5 Years columns, respectively. All other amounts represent interest
payments.
Purchase obligations reported in the table above include agreements to purchase goods or services that
are enforceable and legally binding on the Company and that specify all significant terms, including: fixed
or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.
In connection with the Company’s restructuring programs, the total liability balance at December 31, 2009
was $72 million, including $44 million that is included in Accrued liabilities and is expected to be paid in the
next twelve months and $28 million that is included in Other liabilities on the Consolidated Statement of
Financial Position. The $72 million total is included in Other long-term liabilities in the table above, with
short-term and long-term amounts reported separately in the Less than 1 Year and 1-3 Years columns,
respectively. These payments will relate mainly to employee termination benefits and contract termination
and lease charges.
The Company’s funding policy for its pension and other postretirement plans is to fund minimum amounts
according to the regulatory requirements under which the plans operate. From time to time, the Company
may choose to fund amounts in excess of the minimum for various reasons. The Company is currently
expecting to contribute approximately $20 million to its pension and other postretirement plans in 2010.
The Company is currently assuming expected funding obligations for 2011 and 2012 of $30 million to
$35 million per year based on factors that were present as of December 31, 2009. Actual future funding
requirements beyond 2010 will be impacted by various factors, including actual pension asset returns and
interest rates used for discounting future liabilities. The effect of any future contributions the Company may
be obligated or otherwise choose to make could be material to the Company’s future cash flows from
operations. Due to the uncertainty of future funding obligations, the table above contains no amounts for
pension and postretirement plan funding.
The Company’s financial obligation to collect, recycle, treat and dispose of the printing devices it produces,
and in some instances, historical waste equipment it holds, is not shown in the table above due to the lack
of historical data necessary to project future dates of payment. At December 31, 2009, the Company’s
estimated liability for this obligation was a current liability of $1 million and a long-term liability of
$35 million. These amounts were included in Accrued liabilities and Other liabilities, respectively, on
the Consolidated Statements of Financial Position. Refer to the “Risk Factors” section in Part I, Item 1A of
this report for additional information regarding the Waste Electrical and Electronic Equipment Directive
adopted by the European Union.
As of December 31, 2009, the Company had accrued approximately $70 million for pending copyright fee
issues, including litigation proceedings, local legislative initiatives and/or negotiations with the parties
involved. These accruals are included in Accrued liabilities on the Consolidated Statements of Financial
Position. The liability is not included in the table above due to the level of uncertainty regarding the timing of
payments and ultimate settlement of the litigation. Refer to Part II, Item 8, Note 17 of the Notes to
Consolidated Financial Statements for additional information. Payment of such potential obligations could
have a material impact on the Company’s future operating cash flows.
CAPITAL EXPENDITURES
Capital expenditures totaled $242 million, $218 million and $183 million in 2009, 2008 and 2007,
respectively. The capital expenditures for 2009 principally related to infrastructure support (including
information technology expenditures) and new product development. The increase in 2009 capital
expenditures compared to prior years was driven by internal-use software and infrastructure
expenditures. During 2010, the Company expects capital expenditures to be approximately
$185 million, primarily attributable to infrastructure support and new product development. Capital
expenditures are expected to be funded through cash from operations; however, if necessary, the
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