Lexmark 2009 Annual Report Download - page 97

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Accelerated depreciation charges for the October 2009 Restructuring Plan and all of the following plans
were determined in accordance with FASB guidance on accounting for the impairment or disposal of long-
lived assets. For the year ended December 31, 2009, accelerated depreciation charges are included in
Cost of Revenue on the Consolidated Statements of Earnings.
Employee termination benefit charges and contract termination and lease charges for the October 2009
Restructuring Plan and all of the following plans were accrued in accordance with FASB guidance on
employers’ accounting for postemployment benefits and guidance on accounting for costs associated with
exit or disposal activities, as appropriate. For the year ended December 31, 2009, employee termination
benefit charges, which include severance, medical and other benefits, and contract termination and lease
charges are included in Restructuring and related charges on the Consolidated Statements of Earnings.
For the year ended December 31, 2009, the Company incurred restructuring-related charges of
$44.5 million in PSSD, $3.4 million in ISD and $11.7 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.
April 2009 Restructuring Plan
General
As part of Lexmark’s ongoing plan to consolidate manufacturing capacity and reduce costs and expenses
worldwide, the Company announced on April 21, 2009 the planned closure of its inkjet cartridge
manufacturing facility in Juarez, Mexico by the end of the first quarter of 2010 as well as the
continued restructuring of its worldwide workforce (the “April 2009 Restructuring Plan”). The April
2009 Restructuring Plan is expected to impact about 360 positions worldwide, with approximately 270
coming from the closure of the facility in Juarez, Mexico. The Company expects the April 2009
Restructuring Plan will result in pre-tax charges of approximately $45.1 million with cash costs
estimated at $10.0 million. The Company expects the April 2009 Restructuring Plan to be substantially
completed by the end of the second quarter of 2010.
Impact to 2009 Financial Results
For the year ended December 31, 2009, the Company incurred charges of $40.6 million for the April 2009
Restructuring Plan as follows:
Accelerated depreciation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34.7
Employee termination benefit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
Total restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40.6
91