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A global technology company with a proud history and a bright future

Lexmark International, Inc. (NYSE: LXK) makes it easier for businesses and consumers to move information between the digital and paper worlds. In doing so, we are guided by a simple vision: Customers For Life. To earn our customers’ loyalty, we listen to them, anticipate their needs and act to create value in their eyes.

Since our inception in 1991 as a spin-off of IBM, Lexmark has become a leading developer, manufacturer and supplier of printing and imaging solutions for offices and homes. Lexmark's products include laser printers, inkjet printers, multifunction devices and associated supplies, services and solutions.

Lexmark reported $5.0 billion in revenue in 2007. Revenue derived from international sales and exports from the U.S. make up about half of the company's consolidated revenue, with Europe accounting for approximately two-thirds of international sales. Lexmark's products are sold in more than 150 countries in North and South America, Europe, the Middle East, Africa, Asia, the Pacific Rim and the Caribbean.

The distributed output market is growing and presents attractive growth opportunities. Lexmark has unique strengths in this market, and we continue to strengthen our competitive position through strategic investments to pursue these growth opportunities.

Market trends driving long-term growth in distributed printing include:
» Continuing improvement in price/performance points;
» Continued convergence in technology between printers, scanners, copiers and fax machines into single, integrated all-in-one devices;
» Advancements in digital photography driving the opportunity to print digital images on distributed output devices;
» Increased adoption of color output in business; and
» Advancements in electronic movement of information, driving more pages to be printed by end users when and where it is convenient to do so.

As a result of these market trends, Lexmark has growth opportunities in low-end monochrome laser printers, color lasers, laser all-in-ones, photo all-in-ones, and business inkjet four-in-ones.

Lexmark's overall strategy to take advantage of its growth opportunities is three fold:
» Expand our product segments;
» Expand penetration in market segments; and,
» Further develop brand awareness and brand positioning.

We believe we have unique competitive strengths that support our growth:
» Lexmark is the only major player in the industry which is exclusively focused on distributed output;
» Our vertical integration in technology, which historically has allowed us to drive cost and price performance; and,
» Our large account industry teams and retail-centric consumer teams, which drive customer responsiveness and flexibility.

Those strengths have led to our position as No. 370 on the 2005 Fortune 500 listing, our inclusion on Fortune's Most Admired Companies list and our 2005 recognition by Industry Week as one of its Top 50 U.S. Manufacturers. In addition, we’ve received 2005 recognition for our new products from the test labs at PC World, PC Magazine, CNET, Better Buys for Business, and Buyers Laboratory, among others.

Combining customer insight with innovative technology to create solutions that make it easy to get things done

Lexmark is focused in two major market segments.

The first is the business market. This was the original focus of Lexmark when we spun out of IBM in 1991. In 2006, this market represented approximately 56 percent of Lexmark’s revenue. In the business market, our products are built around our laser technology. We sell laser products primarily through our large account sales team. These sales efforts are focused on customers who fall into six, specific industry groups: finance, services, retail, manufacturing, health care, and the public sector. Our industry teams are experts are on the core output and paper processes that exist in each of these industry segments. Over the last several years, our business in each industry has moved beyond just products to include print-centric workflow solutions and services that solve specific paper intensive process problems in these industries. We help our customers cut costs, reduce cycle times and improve productivity. This allows Lexmark to offer unique value to these industry customers and differentiates us from the competition as part of our business market approach known as 'Print, Move, Manage'.

The second is the consumer market, which we started in the mid-1990s and which represented approximately 44 percent of Lexmark’s revenue in 2006. In the consumer market our products are built around our inkjet technology. Our consumer market strategy is built around offering high-quality, competitively priced products that present an exceptional value to consumers and businesses and which are sold primarily through retail channels. It is a combination of innovative technology and customer insight that differentiates Lexmark from its competitors. Lexmark leverages this unique approach to create printing solutions that make it easier for consumers and small business owners to create, share and manage information and images.

We are responsible to the communities in which we live and work, to the environment and to the world community as well

Lexmark is committed to acting as a socially responsible company in our global community. This means that we will fully comply with the laws, rules and regulations of the countries in which we operate.

It also means that Lexmark will go further by continually evaluating our business practices using the principle of sustainability – balancing economic, environmental and social needs of our world today without compromising the opportunities of future generations.

We want Lexmark to always be associated with a respect for human rights, safe work conditions, and environmentally sound business practices, for our own organization and those with whom we partner.