Lexmark 2014 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2014 Lexmark annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following at December 31:
Useful Lives
(Years) 2014 2013
Land and improvements 20 $ 35.4 $ 34.4
Buildings and improvements 10-35 552.3 554.0
Machinery and equipment 2-10 610.2 639.4
Information systems 3 129.2 135.4
Internal-use software 3-5 484.8 514.5
Leased products 2-7 147.3 133.9
Furniture and other 7 62.5 60.1
2,021.7 2,071.7
Accumulated depreciation (1,235.6) (1,259.3)
Property, plant and equipment, net $ 786.1 $ 812.4
In 2013 the Company derecognized certain assets upon the sale of its Inkjet-related technology and assets to a third party. Refer to
Note 4 of the Notes to Consolidated Financial Statements for information on the divestiture.
Depreciation expense was $184.5 million, $189.3 million and $229.6 million in 2014, 2013 and 2012, respectively.
Leased products refers to hardware leased by Lexmark to certain customers as part of the Company’s ISS operations. The cost of the
hardware is amortized over the life of the contracts, which have been classified as operating leases based on the terms of the
arrangements. The accumulated depreciation related to the Company’s leased products was $88.9 million and $89.7 million at year-
end 2014 and 2013, respectively.
The Company accounts for its internal-use software, an intangible asset by nature, in Property, plant and equipment, net on the
Consolidated Statements of Financial Position. Amortization expense related to internal-use software is included in the depreciation
expense values shown above and was $80.7 million, $80.8 million and $69.3 million in 2014, 2013 and 2012, respectively. The net
carrying amounts of internal-use software at December 31, 2014 and 2013 were $164.2 million and $209.7 million, respectively. The
following table summarizes the estimated future amortization expense for internal-use software currently being amortized.
Fiscal year:
2015 $ 59.1
2016 36.1
2017 25.0
2018 15.1
2019 4.7
Thereafter –
Total $140.0
The table above does not include future amortization expense for internal-use software that is not currently being amortized because
the assets are not ready for their intended use.
Accelerated depreciation and disposal of long-lived assets
The Company’s restructuring actions have resulted in shortened estimated useful lives of certain machinery and equipment and
buildings and subsequent disposal of machinery and equipment no longer in use. Refer to Note 5 of the Notes to Consolidated
Financial Statements for a discussion of these actions and the impact on earnings.
95