Lexmark 2010 Annual Report Download - page 18

ECM software platform and products that have the ability to be quickly and easily configured and integrated
with a large number of business applications. The market for Perceptive Software’s products is highly
competitive, and the Company’s management expects competition will continue to intensify as the ECM
markets consolidate. Perceptive Software competes with a large number of ECM providers, including
document management and web content management businesses, as well as companies that focus on
document imaging and workflow. Competitors in the ECM market space include larger competitors such as
EMC’s Documentum, OpenText, and IBM’s FileNet, as well as various smaller competitors, such as Hyland
and Laserfiche, which are Perceptive Software’s primary competitors.
Research and Development
Lexmark’s research and development activity is focused on laser and inkjet devices and associated
supplies, features, and related technologies as well as software. Lexmark’s primary research and
development activities are conducted in Lexington, Kentucky; Boulder, Colorado; Shawnee, Kansas;
Cebu City, Philippines; and Kolkata, India. Lexmark’s engineering efforts focus on technologies associated
with laser, inkjet, connectivity, document management, ECM software, and other customer facing
solutions. Lexmark also develops related applications and tools to enable it to efficiently provide a
broad range of services. Lexmark is also actively engaged in the design and development of
enhancements to its existing products that increase the performance, improve ease of use and lower
production costs. In the case of certain products, the Company may elect to purchase products or key
components from third-party suppliers rather than develop them internally.
Research and development expenditures were $369 million in 2010, $375 million in 2009 and $423 million
in 2008. In 2008 and the two years preceding, the Company increased its level of research and
development expenditures to more significantly broaden its product offerings and advance core
technologies associated with its markets. As many of these initial investments were completed and as
part of a corporate effort to improve productivity and efficiency of our research and development
investment, the Company reduced its expenditures in 2009 and 2010.
The process of developing new products is complex and requires innovative designs that anticipate
customer needs and technological trends. The Company must make strategic decisions from time to time
as to which technologies will produce products and solutions in market sectors that will experience the
greatest future growth. There can be no assurance that the Company can develop the more
technologically-advanced products required to remain competitive.
Employees
As of December 31, 2010, of the approximately 13,200 employees worldwide, 3,900 are located in the
U.S. and the remaining 9,300 are located in Europe, Canada, Latin America, Asia Pacific, the Middle East
and Africa. None of the U.S. employees are represented by a union. Employees in France are represented
by a Statutory Works Council.
Available Information
Lexmark makes available, free of charge, electronic access to all documents (including annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those
reports, as well as any beneficial ownership filings) filed with or furnished to the Securities and Exchange
Commission (“SEC” or the “Commission”) by the Company on its website at http://investor.lexmark.com as
soon as reasonably practicable after such documents are filed. The Company also posts all required XBRL
exhibits to its corporate web site on the same calendar day as the date of the related filing. The SEC
maintains an Internet site that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at www.sec.gov.
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