Lexmark 2010 Annual Report Download - page 65

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Contractual Cash Obligations
The following table summarizes the Company’s contractual obligations at December 31, 2010:
(Dollars in Millions) Total
Less than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Long-term debt
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . $ 852 $ 41 $421 $40 $350
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . 96 30 40 21 5
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . 161 161 — — —
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . 26 10 5 5 6
Other long-term liabilities
(2)
.................. 47 29 5 — 13
Total contractual obligations. . . . . . . . . . . . . . . . . . $1,182 $271 $471 $66 $374
(1) includes interest payments
(2) includes current portion of other long-term liabilities
Long-term debt reported in the table above includes principal repayments of $350.0 million and
$300.0 million in the 1-3 Years and More than 5 Years columns, respectively. All other amounts
represent interest payments.
Purchase obligations reported in the table above include agreements to purchase goods or services that
are enforceable and legally binding on the Company and that specify all significant terms, including: fixed
or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.
In connection with the Company’s restructuring programs, the total liability balance at December 31, 2010
was $27.7 million, including $23.1 million that is included in Accrued liabilities and is expected to be paid in
the next twelve months and $4.6 million that is included in Other liabilities on the Consolidated Statement of
Financial Position. The $27.7 million total is included in Other long-term liabilities in the table above, with
short-term and long-term amounts reported separately in the Less than 1 Year and 1-3 Years columns,
respectively. These payments will relate mainly to employee termination benefits and contract termination
and lease charges.
The Company’s funding policy for its pension and other postretirement plans is to fund minimum amounts
according to the regulatory requirements under which the plans operate. From time to time, the Company
may choose to fund amounts in excess of the minimum for various reasons. The Company is currently
expecting to contribute approximately $35 million to its pension and other postretirement plans in 2011.
The Company anticipates similar levels of funding for 2012 and 2013 based on factors that were present as
of December 31, 2010. Actual future funding requirements beyond 2011 will be impacted by various
factors, including actual pension asset returns and interest rates used for discounting future liabilities. The
effect of any future contributions the Company may be obligated or otherwise choose to make could be
material to the Company’s future cash flows from operations. Due to the uncertainty of future funding
obligations, the table above contains no amounts for pension and postretirement plan funding.
Waste Electrical and Electronic Equipment (“WEEE”) Directives issued by the European Union require
producers of electrical and electronic goods to be financially responsible for specified collection, recycling,
treatment and disposal of past and future covered products. The Company’s estimated financial obligation
related to WEEE Directives is not shown in the table above due to the lack of historical data necessary to
project future dates of payment. At December 31, 2010, the Company’s estimated liability for this obligation
was a current liability of $1.0 million and a long-term liability of $30.6 million. These amounts were included
in Accrued liabilities and Other liabilities, respectively, on the Consolidated Statements of Financial
Position.
As of December 31, 2010, the Company had accrued approximately $64.8 million for pending copyright fee
issues, including litigation proceedings, local legislative initiatives and/or negotiations with the parties
involved. These accruals are included in Accrued liabilities on the Consolidated Statements of Financial
Position. The liability is not included in the table above due to the level of uncertainty regarding the timing of
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