Lexmark 2015 Annual Report Download - page 98

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94
Refer to Note 13 of the Notes to Consolidated Financial Statements for a discussion of the Company’s outstanding borrowings under
the trade receivables facility and the related accounts receivable pledged as collateral. Expenses incurred under the trade receivables
facility are included in Interest expense (income), net on the Consolidated Statements of Earnings and totaled $1.1 million, $0.6
million, and $0.5 million in 2015, 2014, and 2013, respectively.
9. INVENTORIES
Inventories consist of the following at December 31:
2015
2014
Raw materials
$
28.3
$
29.8
Work in process
32.7
31.4
Finished goods
170.9
191.8
Inventories
$
231.9
$
253.0
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following at December 31:
Useful Lives
(Years)
2015
2014
Land and improvements
20
$
33.1
$
35.4
Buildings and improvements
10-35
528.7
552.3
Machinery and equipment
2-10
529.6
610.2
Information systems
3
95.4
129.2
Internal-use software
3-5
518.0
484.8
Leased products
2-7
150.8
147.3
Furniture and other
7
46.6
62.5
1,902.2
2,021.7
Accumulated depreciation
(1,162.0)
(1,235.6)
Property, plant and equipment, net
$
740.2
$
786.1
Depreciation expense was $170.5 million, $184.5 million and $189.3 million in 2015, 2014 and 2013, 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 $94.7 million and $88.9 million at
December 31, 2015 and 2014, 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 $65.6 million, $80.7 million and $80.8 million in 2015, 2014 and 2013, respectively. The net
carrying amounts of internal-use software at December 31, 2015 and 2014 were $139.1 million and $164.2 million, respectively. The
following table summarizes the estimated future amortization expense for internal-use software currently being amortized.
Fiscal year:
2016
$
47.3
2017
36.2
2018
24.9
2019
12.8
2020
3.5
Thereafter
–
Total
$
124.7
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.