Lexmark 2013 Annual Report Download - page 49

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In the second quarter of 2013, the Company sold its inkjet-related technology and assets. Refer to Part II, Item 8, Note 4 of the Notes
to Consolidated Financial Statements for more information.
The 2012 Restructuring Actions are expected to impact about 2,063 positions worldwide, including 300 manufacturing positions. The
2012 Restructuring Actions will result in total pre-tax charges, including project costs, of approximately $232 million with $179.3
million incurred to date and approximately $52.7 million to be incurred in 2014 and 2015. The Company expects the total cash costs
of the 2012 Restructuring Actions to be approximately $148 million with $100.9 million incurred to date and the remaining $47.1
million impacting 2014 and 2015. The anticipated timing of cash outlays for the 2012 Restructuring Actions is $60.3 million in 2014
and 2015, with cash outlays of approximately $49.7 million in 2013 and $38 million in 2012. Lexmark expects the 2012 Restructuring
Actions to generate savings of $138 million in 2014, with ongoing annual savings beginning in 2015 of approximately $168 million,
of which approximately $125 million will be cash savings. These ongoing savings should be split approximately 70% to Operating
expense and 30% to Cost of revenue. The Company expects these actions to be complete by the end of 2015.
Refer to Part II, Item 8, Note 5 of the Notes to Consolidated Financial Statements for a description of the Company’s Other
Restructuring Actions. In the fourth quarter of 2013 employee termination benefit charges were incurred for actions that were not a
part of an announced plan. The Other Restructuring Actions are substantially completed and any remaining charges to be incurred are
expected to be immaterial.
Refer to Part II, Item 8, Note 5 of the Notes to Consolidated Financial Statements for a rollforward of the liability incurred for the
2012 Restructuring Actions and the Other Restructuring Actions.
Impact to 2013 Financial Results
For the year ended December 31, 2013, the Company incurred charges (reversals), including project costs, of $54.5 million for the
Company’s restructuring plans as follows:
2012 2012 Other
Actions Actions Actions
Restructuring Restructuring 2012 Restructuring Other
Charges Project Actions Charges Actions
(Dollars in millions) (Note 5) Costs Total (Note 5) Total Total
Accelerated depreciation charges $ 11.1 $ – $ 11.1 $ – $ – $ 11.1
Excess components and other inventory-related charges 15.8 – 15.8 – – 15.8
Employee termination benefit charges 9.2 – 9.2 1.9 1.9 11.1
Contract termination and lease charges (0.2) – (0.2) – – (0.2)
Project costs – 16.7 16.7 – – 16.7
Total restructuring charges/project costs $ 35.9 $ 16.7 $ 52.6 $ 1.9 $ 1.9 $ 54.5
Restructuring charges/project costs for the 2012 Restructuring Actions and Other Restructuring Actions are recorded in the
Company’s Consolidated Statements of Earnings for the year ended December 31, 2013 as follows:
Selling, general Restructuring Impact on
Restructuring- Impact on and and related Operating
(Dollars in millions) related costs Gross profit administrative charges income
Accelerated depreciation charges $ 5.6 $ 5.6 $ 5.5 $ – $ 11.1
Excess components and other inventory-related
charges 15.8 15.8 – – 15.8
Employee termination benefit charges – – – 11.1 11.1
Contract termination and lease charges – – – (0.2) (0.2)
Project costs 0.1 0.1 16.6 – 16.7
Total restructuring charges/project costs $ 21.5 $ 21.5 $ 22.1 $ 10.9 $ 54.5
For the year ended December 31, 2013, the Company incurred restructuring charges and project costs related to the 2012
Restructuring Actions of $29.7 million in ISS, $19.9 million in All other and $3.0 million in Perceptive Software. The Company
incurred restructuring charges and project costs related to the Other Restructuring Actions of $0.1 million in All other and $1.8 million
in Perceptive Software.
Impact to 2012 Financial Results
For the year ended December 31, 2012, the Company incurred charges (reversals), including project costs, of $121.8 million for the
Company’s restructuring plans as follows:
45