Lexmark 2010 Annual Report Download - page 109

Other liabilities, in the noncurrent liabilities section of the balance sheet, consisted of the following at
December 31:
2010 2009
Pension/Postretirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $214.8 $219.3
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.2 119.9
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.5 160.7
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $415.5 $499.9
13. DEBT
Senior Notes — Long-term Debt and Current Portion of Long-term Debt
In May 2008, the Company repaid its $150 million principal amount of 6.75% senior notes that were due on
May 15, 2008. Additionally, in May 2008, the Company completed a public debt offering of $650 million
aggregate principal amount of fixed rate senior unsecured notes. The notes are split into two tranches of
five- and ten-year notes respectively. The five-year notes with an aggregate principal amount of
$350 million and 5.9% coupon were priced at 99.83% to have an effective yield to maturity of 5.939%
and will mature June 1, 2013 (referred to as the “2013 senior notes”). The ten-year notes with an aggregate
principal amount of $300 million and 6.65% coupon were priced at 99.73% to have an effective yield to
maturity of 6.687% and will mature June 1, 2018 (referred to as the “2018 senior notes”). At December 31,
2010, the outstanding balance was $649.1 million (net of unamortized discount of $0.9 million). At
December 31, 2009, the outstanding balance was $648.9 million (net of unamortized discount of
$1.1 million).
The 2013 and 2018 senior notes (collectively referred to as the “senior notes”) pay interest on June 1 and
December 1 of each year. The interest rate payable on the notes of each series is subject to adjustments
from time to time if either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services
downgrades the debt rating assigned to the notes to a level below investment grade, or subsequently
upgrades the ratings.
The senior notes contain typical restrictions on liens, sale leaseback transactions, mergers and sales of
assets. There are no sinking fund requirements on the senior notes and they may be redeemed at any time
at the option of the Company, at a redemption price as described in the related indenture agreement, as
supplemented and amended, in whole or in part. If a “change of control triggering event” as defined below
occurs, the Company will be required to make an offer to repurchase the notes in cash from the holders at a
price equal to 101% of their aggregate principal amount plus accrued and unpaid interest to, but not
including, the date of repurchase. A “change of control triggering event” is defined as the occurrence of
both a change of control and a downgrade in the debt rating assigned to the notes to a level below
investment grade.
Credit Facility
Effective August 17, 2009, Lexmark entered into a $275 million 3-year senior, unsecured, multicurrency
revolving credit facility that includes the availability of swingline loans and multicurrency letters of credit
(the “New Facility”). Under the New Facility, the Company may borrow in U.S. dollars, euros, British pounds
sterling and Japanese yen. The New Facility replaced the Company’s $300 million 5-year multicurrency
revolving credit agreement entered into on January 20, 2005. On August 26, 2009, the Company exercised
its option to increase the maximum amount available under the New Facility to $300 million. As of
December 31, 2010 and 2009, there were no amounts outstanding under the facility.
Lexmark’s New Facility contains usual and customary default provisions, leverage and interest coverage
restrictions and certain restrictions on secured and subsidiary debt, disposition of assets, liens and
mergers and acquisitions. The New Facility also includes collateral terms providing that in the event the
Company’s credit ratings decrease to certain levels the Company will be required to secure, on behalf of
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