Lexmark 2011 Annual Report Download - page 141

20. SEGMENT DATA
The Company serves both the distributed printing and ECM markets and is managed primarily along
two segments: ISS and Perceptive Software. ISS offers a broad portfolio of monochrome and color
laser printers, laser multifunction products and inkjet all-in-one devices as well as a wide range of
supplies and services covering its printing products and technology solutions. Perceptive Software
offers a complete suite of ECM software and document workflow solutions. On October 18, 2011, the
Company acquired Pallas Athena which enables the Company’s Perceptive Software segment to
further strengthen its fleet management solutions and services with a broader range of workflow
solutions such as business process management, document output management and process mining
software capabilities.
The Company evaluates the performance of its segments based on revenue and operating income,
and does not include segment assets or nonoperating income/expense items for management
reporting purposes. Segment operating income (loss) includes: selling, general and administrative;
research and development; restructuring and related charges; and other expenses, certain of which
are allocated to the respective segments based on internal measures and may not be indicative of
amounts that would be incurred on a standalone basis or may not be indicative of results of other
enterprises in similar businesses. All other operating income (loss) includes significant expenses that
are managed outside of the reporting segments. These unallocated costs include such items as
information technology expenses, certain occupancy costs, stock-based compensation and certain
other corporate and regional general and administrative expenses such as finance, legal and human
resources. Acquisition-related costs and integration expenses are also included in All other.
The Company combined its laser and inkjet printing divisions into a single organization in the fourth
quarter of 2010. The financial data included in this note has been prepared under the current
organizational structure for all periods presented.
Perceptive Software was acquired by the Company on June 7, 2010. The 2010 financial results for
Perceptive Software include only the activity occurring after the date of acquisition. The 2011 financial
results for Pallas Athena include only activity occurring after its date of acquisition and are included in
Perceptive Software.
The following table includes information about the Company’s reportable segments for the year ended
December 31:
2011 2010 2009
Revenue:
ISS ................................................... $4,078.2 $4,162.4 $3,879.9
Perceptive Software ..................................... 94.8 37.3 —
Total revenue ........................................... $4,173.0 $4,199.7 $3,879.9
Operating income (loss):
ISS ................................................... $ 764.5 $ 744.6 $ 487.3
Perceptive Software ..................................... (29.6) (16.1) —
All other ............................................... (292.0) (281.6) (271.2)
Total operating income (loss) .............................. $ 442.9 $ 446.9 $ 216.1
Operating income (loss) noted above for the year ended December 31, 2011 includes restructuring and
related charges of $9.7 million in ISS and $3.8 million in All other. The improvement in ISS operating
income (loss) in 2011 versus 2010 is primarily due to laser hardware revenue growth and improved
margins, as well as improved hardware mix. Operating income (loss) related to Perceptive Software for
the year ended December 31, 2011 includes $20.7 million of amortization expense related to intangible
assets acquired by the Company in 2011 and 2010. Operating income (loss) in 2011 for the Perceptive
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