Lexmark 2013 Annual Report Download - page 131

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Other Litigation
There are various other lawsuits, claims, investigations and proceedings involving the Company, that are currently pending. The
Company has determined that although a potential loss is reasonably possible for certain matters, that for such matters in which it is
possible to estimate a loss or range of loss, the estimate of the loss or estimate of the range of loss are not material to the Company’s
consolidated results of operations, cash flows, or financial position.
20. SEGMENT DATA
Lexmark operates in the office imaging and enterprise content and business process management markets. The Company is managed
primarily along two segments: ISS and Perceptive Software.
ISS offers a broad portfolio of monochrome and color laser printers and laser multifunction products as well as a wide range of
supplies and services covering its printing products and technology solutions. In August 2012, the Company announced it will exit the
development and manufacturing of inkjet technology. The Company will continue to provide service, support and aftermarket supplies
for its inkjet installed base.
Perceptive Software offers a complete suite of ECM, BPM, DOM, intelligent data capture and search software as well as associated
industry specific solutions. On February 29, March 13, and March 16, 2012, the Company acquired Brainware, Nolij and ISYS,
respectively, which all joined the Company’s Perceptive Software segment. These acquisitions further strengthen the Company’s
products, content/business process management solutions and managed print services. On December 28, 2012, the Company expanded
its presence within the healthcare sector with the acquisition of Acuo which also joined the Perceptive Software segment. On March 1,
2013, the Company acquired AccessVia and Twistage as well as Saperion on September 16, 2013, further expanding and
strengthening the solutions available in the Perceptive Software segment. On October 3, 2013, the Company acquired all of the issued
and outstanding shares of PACSGEAR which is also reported in the Perceptive Software segment starting in the fourth quarter of
2013.
The Company evaluates the performance of its segments based on revenue and operating income, and does not include segment assets
or non-operating 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
stand-alone 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 primarily in All other.
During the fourth quarter of 2013, the Company changed its accounting policy for pension and other postretirement benefit plan asset
and actuarial gains and losses. Under the new accounting policy, these gains and losses will be recognized in net periodic benefit cost
in the year in which they occur rather than amortized over time. Results for all periods presented in this Annual Report on Form 10-K
reflect the retrospective application of this accounting policy change. Refer to Note 2 of the Notes to Consolidated Financial
Statements for additional information. In addition, in the fourth quarter of 2013, Lexmark changed its method of allocating the
elements of net periodic benefit cost to reporting segments. Historically, total net periodic benefit cost was allocated to reporting
segments. Under the new allocation method, service cost, amortization of prior service cost and credit, and pension and other
postretirement benefit plan settlements and curtailments will continue to be allocated to reporting segments. Interest cost, expected
return on plan assets, and asset and net actuarial gains and losses will be included in results for All other.
The following table includes information about the Company’s reportable segments:
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