Stockholders' Equity And Accumulated Other Comprehensive Earnings (Loss)

12 Months Ended

Dec. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

15.           STOCKHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSS)

The Class A Common Stock is voting and exchangeable for Class B Common Stock in very limited circumstances. The Class B Common Stock is non-voting and is convertible, subject to certain limitations, into Class A Common Stock.

At December 31, 2013, there were 804.2 million shares of authorized, unissued Class A Common Stock. Of this amount, approximately 16.3 million shares of Class A Common Stock have been reserved under employee stock incentive plans and nonemployee director plans. There were also 1.8 million shares of unissued and unreserved Class B Common Stock at December 31, 2013. These shares are available for a variety of general corporate purposes, including future public offerings to raise additional capital and for facilitating acquisitions.

In August 2012, the Company received authorization from the Board of Directors to repurchase an additional $200 million of its Class A Common Stock for a total repurchase authority of $4.85 billion. As of December 31, 2013, there was approximately $169 million of share repurchase authority remaining. This repurchase authority allows the Company, at management's discretion, to selectively repurchase its stock from time to time in the open market or in privately negotiated transactions depending upon market price and other factors. During 2013, the Company repurchased approximately 2.7 million shares at a cost of approximately $82 million. During 2012, the Company repurchased approximately 8.1 million shares at a cost of approximately $190 million. As of December 31, 2013, since the inception of the program in April 1996, the Company had repurchased approximately 110.3 million shares of its Class A Common Stock for an aggregate cost of approximately $4.68 billion. As of December 31, 2013, the Company had reissued approximately 0.5 million shares of previously repurchased shares in connection with certain of its employee benefit programs. As a result of these issuances as well as the retirement of 44.0 million, 16.0 million and 16.0 million shares of treasury stock in 2005, 2006 and 2008, respectively, the net treasury shares outstanding at December 31, 2013, were 33.8 million. The retired shares resumed the status of authorized but unissued shares of Class A Common Stock.

Accelerated Share Repurchase Agreements

The Company executed four accelerated share repurchase (“ASR”) Agreements with financial institution counterparties in 2013, resulting in a total of 2.7 million shares repurchased at a cost of $82 million. The impact of the four ASRs is included in the share repurchase totals provided in the preceding paragraphs. There were no outstanding ASR Agreements as of December 31, 2013.

Under the terms of the ASR Agreements, the Company paid an agreed upon amount targeting a certain number of shares based on the closing price of the Company's Class A Common Stock on the date of each agreement. The Company took delivery of 85% of the shares in the initial transaction and the remaining 15% holdback provision payment was held back until final settlement of each contract occurred. The final number of shares to be delivered by the counterparty under the ASR Agreements was dependent on the average of the daily volume weighted-average price of the Company's Class A Common Stock over the agreements' trading period, a discount, and the initial number of shares delivered. Under the terms of the ASR Agreements, the Company would either receive additional shares from the counterparty or be required to deliver additional shares or cash to the counterparty in the final settlement. The Company controls its election to either deliver additional shares or cash to the counterparty.

The ASR Agreements discussed in the preceding paragraph were accounted for as initial treasury stock transactions and forward stock purchase contracts. The initial repurchase of shares resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share on the effective date of the agreements. The forward stock purchase contract (settlement provision) was considered indexed to the Company's own stock and was classified as an equity instrument under accounting guidance applicable to contracts in an entity's own equity.

Dividends

The Company's dividend activity during the year ended December 31, 2013 was as follows:

			Lexmark International, Inc.
			Class A Common Stock
Declaration Date	Record Date	Payment Date	Dividend Per Share		Cash Outlay
February 21, 2013	March 4, 2013	March 15, 2013	$	0.30	$	19.1
April 25, 2013	May 31, 2013	June 14, 2013		0.30		18.9
July 25, 2013	August 30, 2013	September 13, 2013		0.30		18.7
October 24, 2013	November 29, 2013	December 13, 2013		0.30		18.6
Total Dividends			$	1.20	$	75.3

The payment of the cash dividends also resulted in the issuance of additional dividend equivalent units to holders of restricted stock units. Diluted weighted-average Lexmark Class A share amounts presented reflect this issuance. All cash dividends and dividend equivalent units are accounted for as reductions of Retained earnings.

Accumulated Other Comprehensive Earnings (Loss)

The following tables provide the tax benefit or expense attributed to each component of Other comprehensive (loss) earnings:

	Year Ended December 31, 2013
	Change,		Tax benefit		Change,
	net of tax		(liability)		pre-tax
Components of other comprehensive (loss) earnings:
Foreign currency translation adjustment	$	(32.0	)$	3.5	$	(35.5	)
Pension or other postretirement benefits		2.1		(0.8	)	2.9
Net unrealized gain (loss) on marketable securities		(1.1	)	-		(1.1	)
Net unrealized gain (loss) on cash flow hedge		0.9		(0.5	)	1.4
Total other comprehensive (loss) earnings	$	(30.1	)$	2.2	$	(32.3	)

	Year Ended December 31, 2012
	Change,		Tax benefit		Change,
	net of tax		(liability)		pre-tax
Components of other comprehensive earnings (loss):
Foreign currency translation adjustment	$	14.7	$	(0.6	)$	15.3
Pension or other postretirement benefits		0.2		0.1		0.1
Net unrealized gain (loss) on marketable securities - OTTI		(0.6	)	0.4		(1.0	)
Net unrealized gain (loss) on marketable securities		2.6		(0.6	)	3.2
Net unrealized gain (loss) on cash flow hedge		(0.9	)	0.5		(1.4	)
Total other comprehensive earnings (loss)	$	16.0	$	(0.2	)$	16.2

	Year Ended December 31, 2011
	Change,		Tax benefit		Change,
	net of tax		(liability)		pre-tax
Components of other comprehensive (loss) earnings:
Foreign currency translation adjustment	$	(29.2	)$	5.8	$	(35.0	)
Pension or other postretirement benefits		(2.7	)	1.4		(4.1	)
Net unrealized gain (loss) on marketable securities - OTTI		0.1		-		0.1
Net unrealized gain (loss) on marketable securities		(1.2	)	0.1		(1.3	)
Total other comprehensive (loss) earnings	$	(33.0	)$	7.3	$	(40.3	)

The change in Accumulated other comprehensive (loss) earnings, net of tax, consists of the following:

					Net
					Unrealized		Net		Net		Accumulated
	Foreign		Pension or		Gain (Loss) on		Unrealized		Unrealized		Other
	Currency		Other		Marketable		Gain (Loss) on		(Loss) Gain on		Comprehensive
	Translation		Postretirement		Securities -		Marketable		Cash Flow		(Loss)
	Adjustment		Benefits		OTTI		Securities		Hedge		Earnings
Balance at December 31, 2010	$	8.9	$	1.8	$	0.6	$	0.6	$	-	$	11.9
Net 2011 other comprehensive (loss) earnings		(29.2	)	(2.7	)	0.1		(1.2	)	-		(33.0	)
Balance at December 31, 2011		(20.3	)	(0.9	)	0.7		(0.6	)	-		(21.1	)
Net 2012 other comprehensive earnings (loss)		14.7		0.2		(0.6	)	2.6		(0.9	)	16.0
Balance at December 31, 2012		(5.6	)	(0.7	)	0.1		2.0		(0.9	)	(5.1	)
Other comprehensive income before reclassifications		(21.3	)	2.1		0.1		(0.1	)	0.9		(18.3	)
Amounts reclassified from accumulated other comprehensive income		(10.7	)	-		(0.1	)	(1.0	)	-		(11.8	)
Net 2013 other comprehensive (loss) earnings		(32.0	)	2.1		-		(1.1	)	0.9		(30.1	)
Balance at December 31, 2013	$	(37.6	)$	1.4	$	0.1	$	0.9	$	-	$	(35.2	)

Changes in the Company's foreign currency translation adjustments were due to a number of factors as the Company operates in various currencies throughout the world. The primary drivers of the unfavorable change in 2013 were decreases in the exchange rate values of approximately 8% in the Philippine peso, 13% in the Brazilian real and 19% in the South African rand. The primary drivers of the favorable change in 2012 were increases in the exchange rate values of approximately 7% in the Philippine peso, 8% in the Mexican peso and 2% in the Euro. The primary drivers of the unfavorable change in 2011 were decreases in the exchange rate values of approximately 11% in the Mexican peso, 11% in the Brazilian real, 3% in the Euro and 18% in the South African rand. The exchange rates referenced above are calculated as U.S. dollar per unit of foreign currency.

The December 31, 2013 balance of $0.1 million in the table above for Net Unrealized Gain (Loss) on Marketable Securities - OTTI represents the cumulative favorable mark-to-market adjustment on debt securities for which OTTI was previously recognized under the amended FASB guidance adopted by the Company in 2009.

For the year ended December 31, 2013, the following table provides details of amounts reclassified from Accumulated other comprehensive earnings (loss):

Details about Accumulated Other Comprehensive Earnings Components		Amount Reclassified from Accumulated Other Comprehensive (Loss) Earnings		Affected Line Item in the Statements of Earnings
Foreign currency translation adjustment
Foreign exchange gain recognized upon sale of a foreign entity	$	10.7		Gain on sale of inkjet-related technology and assets
Pension and other postretirement benefits
Amortization of prior service benefit		0.7		Note 17. Employee Pension and Postretirement Plans
Pension-related losses recognized upon sale of a subsidiary		(0.4	)	Gain on sale of inkjet-related technology and assets
		(0.3	)	Tax benefit (liability)
	$	-		Net of tax
Unrealized gains and (losses) on
marketable securities
Marketable securities
Non-OTTI	$	1.2		Other expense (income), net
OTTI		0.1		Other expense (income), net
		(0.2	)	Tax benefit (liability)
	$	1.1		Net of tax
Total reclassifications for the period	$	11.8		Net of tax

Net Other comprehensive earnings (loss) for 2012 and 2011 include amounts reclassified from Accumulated other comprehensive earnings (loss).  Refer to Note 17 of the Notes to Consolidated Financial Statements for additional information regarding pension and other postretirement plans, including the amounts amortized out of Accumulated other comprehensive earnings (loss) into net periodic benefit cost for the periods presented.  Refer to Note 7 of the Notes to Consolidated Financial Statements for additional information regarding the Company's investments in marketable securities, including realized gains and losses reclassified from Accumulated other comprehensive earnings (loss) into Net earnings for the periods presented.