Lexmark 2010 Annual Report Download - page 95

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Summary of Other Restructuring Actions
General
In response to global economic weakening, to enhance the efficiency of the Company’s inkjet cartridge
manufacturing operations and to reduce the Company’s business support cost and expense structure, the
Company announced various restructuring actions (“Other Restructuring Actions”) from 2006 to April
2009. The Other Restructuring Actions include the closure of inkjet supplies manufacturing facilities in
Mexico as well as impacting positions in the Company’s general and administrative functions, supply chain
and sales support, marketing and sales management, and consolidation of the Company’s research and
development programs. The Other Restructuring Actions are considered substantially completed and any
remaining charges to be incurred from these actions are expected to be immaterial.
Impact to 2010, 2009 and 2008 Financial Results
For the years ended December 31, 2010, 2009 and 2008, the Company incurred charges (reversals) for
the Company’s Other Restructuring Actions as follows:
2010 2009 2008
Accelerated depreciation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.4 $35.3 $35.3
Employee termination benefit charges (reversals) . . . . . . . . . . . . . . . . . . . . (1.6) 16.8 21.0
Contract termination and lease charges (reversals) . . . . . . . . . . . . . . . . . . (0.9) 0.4 5.8
Total restructuring-related charges (reversals). . . . . . . . . . . . . . . . . . . . . . . $(0.1) $52.5 $62.1
For the year ended December 31, 2010, accelerated depreciation charges are included in Cost of revenue
on the Consolidated Statements of Earnings. For the years ended December 31, 2009 and 2008,
accelerated depreciation charges of $35.2 million and $27.2 million, respectively, are included in Cost
of revenue, and $0.1 million and $8.1 million, respectively, are included in Selling, general and
administrative on the Consolidated Statements of Earnings.
For the years ended December 31, 2010, 2009 and 2008, Employee termination benefit charges
(reversals) and contract termination and lease charges (reversals) are included in Restructuring and
related charges on the Consolidated Statements of Earnings.
For the year ended December 31, 2010, the $0.9 million reversal for contract termination and lease
charges is due to the Company’s decision to reuse a leased building that had earlier been vacated as a
result of restructuring actions. The $1.6 million reversal for employee termination benefit charges is due
primarily to revisions in assumptions.
In 2008, the Company sold one of its inkjet supplies manufacturing facilities in Juarez, Mexico for
$4.6 million and recognized a $1.1 million pre-tax gain on the sale that is included in Selling, general
and administrative on the Consolidated Statements of Earnings.
For the years ended December 31, 2010, 2009 and 2008, the Company incurred restructuring-related
charges (reversals) in the Company’s segments as follows:
2010 2009 2008
ISS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.1 $45.7 $42.8
Allother................................................... (1.2) 6.8 19.3
Total charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.1) $52.5 $62.1
Liability Rollforward
The following table represents a rollforward of the liability incurred for employee termination benefits and
contract termination and lease charges in connection with the Company’s Other Restructuring Actions.
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