Lexmark Reports Third-Quarter Results

LEXINGTON, Ky. – Oct. 28, 2016 – Lexmark International, Inc. today announced financial results for the third quarter of 2016.

CFIUS Clearance to Proceed with Acquisition of Lexmark

• On Sept. 30, 2016, clearance was received from the Committee on Foreign Investment in the UnitedStates (CFIUS) to proceed with the proposed acquisition of the company. CFIUS found that there are no unresolved national security issues associated with the proposed transaction.
• As a precondition to CFIUS clearance of the transaction, CFIUS required that the company and the Consortium enter into a National Security Agreement with the Departments of Defense andHomeland Security.
• The transaction remains subject to approval from China’s State Administration of Foreign Exchange (SAFE) and other customary closing conditions.
• The parties continue to expect the transaction to close in2016.

Looking Forward

• The company will not conduct quarterly conference calls while the transaction is pending.
• Upon closing, Lexmark common stock will cease to be publicly traded on the New York StockExchange.

Earnings Materials

This earnings release, including reconciliations between GAAP and non-GAAP financial measures, will be available on Lexmark’s investor relations website at http://investor.lexmark.com.

GAAP to non-GAAP Financial Measures

In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release non- GAAP financial measures such as Adjusted EBITDA, earnings per share amounts and related income statement items which management believes provides useful information to investors. When used in this press release, “non-GAAP” Adjusted EBITDA, earnings per share amounts and related income statement items exclude restructuring charges and project costs, strategic alternatives, acquisition and divestiture-related adjustments, pension plan actuarial gains/losses, and remediation-related adjustments. The rationale for management’s use of non-GAAP measures is included in Appendix A to the financial information attached hereto.

About Lexmark

Lexmark (NYSE: LXK) creates enterprise software, hardware and services that remove the inefficiencies of information silos and disconnected processes, connecting people to the information they need at the moment they need it. Open the possibilities at www.Lexmark.com.

Footnotes

1. Totals may not foot due to rounding.
2. ISS is the acronym for Lexmark’s Imaging Solutions and Services segment.
3. ES is the acronym for Lexmark’s Enterprise Software segment.
   1. Core revenue is defined as total Lexmark revenue minus Inkjet Exit revenue. Inkjet Exit is defined as consumer and business inkjet hardware and supplies that the company is exiting.
4. HigherValueSolutions revenue is defined as combined Managed Print Services (MPS)and Enterprise Software revenue.MPS is defined as ISS laser hardware,supplies,and fleet management solutions sold through a managed print services agreement.
5. Constant currency is calculated by translating prior period results at current period exchange rates and removing related hedge gains and losses.
6. Adjusted EBITDA, a non-GAAP measure, is defined as net earnings plus net interest expense (income), provision for income taxes, depreciation and amortization, excluding restructuring charges and project costs, acquisition and divestiture related adjustments, pension plan actuarial gains or losses, and remediation related adjustments.
7. Cash is defined as cash and cash equivalents.
8. Net debt, a non-GAAP measure, is defined as Cash minus long-term and short-term debt.
9. Free cash flow,anon-GAAPmeasure,is defined as net cash flows provided by operating activities minus purchases of property, plant and equipment plus proceeds from sale of fixed assets if applicable.