Lexmark 2010 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2010 Lexmark annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 147

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147

Operating Expense
The following table presents information regarding the Company’s operating expenses during the periods
indicated:
(Dollars in Millions) Dollars % of Rev Dollars % of Rev Dollars %ofRev
2010 2009 2008
Research and development . . . $ 369.0 8.8% $ 375.3 9.7% $ 423.3 9.3%
Selling, general &
administrative . . . . . . . . . . . . 701.2 16.7% 647.8 16.7% 807.3 17.9%
Restructuring and related
charges. . . . . . . . . . . . . . . . . 2.4 0.0% 70.6 1.8% 26.8 0.6%
Total operating expense . . . . . . $1,072.6 25.5% $1,093.7 28.2% $1,257.4 27.8%
Research and development decreased in 2010 compared to the prior year as the benefits of the
restructuring actions were partially offset by higher result-based compensation as well as the addition
of Perceptive Software in the second quarter of 2010. Research and development decreased in 2009
compared to the prior year primarily due to the Company’s efforts to reduce these operating expenses
through platform consolidations and increased productivity.
Selling, general and administrative (“SG&A”) expenses in 2010 increased YTY due to the addition of
Perceptive Software and higher result-based compensation, partially offset by the benefits of the
restructuring actions completed in 2009 and 2010. SG&A expenses in 2009 decreased YTY primarily
driven by lower selling expenses along with lower general and administrative expenses. Additionally,
SG&A expenses in 2010 and 2009 included project costs related to the Company’s restructuring activities.
In 2010 they also included acquisition-related adjustments. See discussion below of restructuring-related
charges and project costs and acquisition-related adjustments included in the Company’s operating
expenses for the years presented in the table above.
In 2010, the Company recognized $21.2 million of restructuring-related charges and project costs in
operating expense due to the Company’s restructuring plans. Of the $21.2 million incurred in 2010,
$18.8 million is included in Selling, general and administrative while $2.4 million is included in
Restructuring and related charges on the Company’s Consolidated Statements of Earnings.
Additionally, the Company incurred $10.0 million of pre-tax costs associated with the acquisition of
Perceptive Software included in Selling, general, and administrative on the Company’s Consolidated
Statements of Earnings.
In 2009, the Company incurred $89.8 million of restructuring-related charges and project costs due to the
Company’s restructuring plans. Of the $89.8 million of total restructuring-related charges and project costs
incurred in 2009, $19.2 million is included in Selling, general and administrative while $70.6 million is
included in Restructuring and related charges on the Company’s Consolidated Statements of Earnings.
See “Restructuring and Related Charges and Project Costs” and “Acquisition-related Adjustments”
sections that follow for further discussion of the Company’s restructuring plans and acquisitions.
43