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For the year ended December 31, 2008, the employee termination benefit charges are included in
Restructuring and related charges on the Consolidated Statements of Earnings. Although the 2009
Restructuring Plan was announced in January 2009, the Company accrued $20.2 million of employee
termination benefit charges in December 2008 in accordance with FASB guidance on employers’
accounting for postemployment benefits because the charges were probable and estimable for the
2008 year-end reporting period.
For the year ended December 31, 2008, the Company incurred restructuring-related charges of
$15.5 million in PSSD, $1.7 million in ISD and $3.0 million in All other.
Liability Rollforward
The following table represents a rollforward of the liability incurred for employee termination benefits in
connection with the 2009 Restructuring Plan. The liability is included in Accrued liabilities on the
Company’s Consolidated Statements of Financial Position.
Employee
Termination
Benefits
Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.7
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.2
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.0)
Reversals
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.1)
Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.9
(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.
2008 Restructuring Plan
General
To enhance the efficiency of the Company’s inkjet cartridge manufacturing operations, the Company
announced the 2008 Restructuring Plan on July 22, 2008 that resulted in the closure of one of the
Company’s inkjet supplies manufacturing facilities in Mexico. The 2008 Restructuring Plan was
substantially completed by the end of the first quarter of 2009.
Impact to 2009 Financial Results
For the year ended December 31, 2009, the Company reversed $1.5 million of previously accrued
accelerated depreciation costs that were incorrectly recorded. The reversal was incurred in the Company’s
ISD segment and is included in Cost of revenue on the Consolidated Statements of Earnings.
Impact to 2008 Financial Results
For the year ended December 31, 2008, the Company incurred charges of $21.0 million in ISD for the 2008
Restructuring Plan as follows:
Accelerated depreciation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18.0
Employee termination benefit charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0
Total restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.0
93