Lexmark 2014 Annual Report Download - page 89

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5. RESTRUCTURING CHARGES
2012 Restructuring Actions
General
As part of Lexmark’s ongoing strategy to increase the focus of its talent and resources on higher usage business platforms, the
Company announced restructuring actions (the “2012 Restructuring Actions”) on January 31 and August 28, 2012. These actions
better align the Company’s sales, marketing and development resources, and align and reduce its support structure consistent with its
focus on business customers. The 2012 Restructuring Actions include exiting the development and manufacturing of the Company’s
remaining inkjet hardware, with reductions primarily in the areas of inkjet-related manufacturing, research and development, supply
chain, marketing and sales as well as other support functions. The Company will continue to provide service, support and aftermarket
supplies for its inkjet installed base. The Company expects these actions to be complete by the end of 2015.
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 of approximately $177.0 million, with $174.0 million incurred to date
and approximately $3.0 million to be incurred in 2015. The Company expects the total cash costs of the 2012 Restructuring Actions to
be approximately $102.2 million with $99.5 million incurred to date, and approximately $2.7 million remaining in 2015.
The Company expects to incur total charges related to the 2012 Restructuring Actions of approximately $134.4 million in ISS, $28.4
million in All other and $14.2 million in Perceptive Software.
In the second quarter of 2013, the Company sold inkjet-related technology and assets. Refer to Note 4 of the Notes to Consolidated
Financial Statements for more information.
Impact to 2014, 2013 and 2012 Financial Results
For the year ended December 31, 2014, charges for the 2012 Restructuring Actions were recorded in the Company’s Consolidated
Statements of Earnings as follows:
Selling, Restructuring Impact on
Restructuring- Impact on general and and related Operating
related costs Gross profit administrative charges Income
Accelerated depreciation charges $ 1.7 $ 1.7 $ 2.3 $ – $ 4.0
Excess components and other inventory-
related charges 7.6 7.6 – – 7.6
Employee termination benefit charges – – – 13.1 13.1
Contract termination and lease charges – – – 2.9 2.9
Total restructuring charges $ 9.3 $ 9.3 $ 2.3 $ 16.0 $ 27.6
For the year ended December 31, 2013, charges for the 2012 Restructuring Actions were recorded in the Company’s Consolidated
Statements of Earnings as follows:
Selling, Restructuring Impact on
Restructuring- Impact on general and and related Operating
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 – – – 9.2 9.2
Contract termination and lease charges – – – (0.2) (0.2)
Total restructuring charges $ 21.4 $ 21.4 $ 5.5 $ 9.0 $ 35.9
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