~~Table~~The terms of ~~Contents~~the credit agreement governing the Company's revolving credit facility and term loans (the Credit Agreement) and the Indenture restrict its current and future operations, particularly its ability to respond to changes or to take certain actions.

The Credit Agreement and the Indenture contain a number of restrictive covenants that impose significant operating and financial restrictions on the Company and may limit its ability to engage in acts that may be in its long-term best interest, including restrictions on its ability to:

incur additional indebtedness and guarantee indebtedness;

pay dividends or make other distributions or repurchase or redeem capital stock;

prepay, redeem or repurchase certain debt;

issue certain preferred stock or similar equity securities;

make loans and investments;

sell assets;

incur liens;

enter into transactions with affiliates;

alter the businesses the Company conducts;

enter into agreements restricting the Company's subsidiaries’ ability to pay dividends; and

consolidate, merge or sell all or substantially all of the Company's assets.

In addition, the restrictive covenants in the Credit Agreement require the Company to maintain specified financial ratios and satisfy other financial condition tests. Although it entered into an amendment to the Credit Agreement in August 2018 to, among other things, revise certain of the Company's financial covenants, upon the occurrence of certain events, the financial covenants, including the Company's net leverage ratio, will revert to pre-amendment levels. The Company's ability to meet the financial ratios and tests can be affected by events beyond its control, and it may be unable to meet them.

A breach of the covenants or restrictions under the Indenture or under the Credit Agreement could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the Credit Agreement would permit the lenders under the Company's revolving credit facility to terminate all commitments to extend further credit under that facility. Furthermore, if the Company were unable to repay the amounts due and payable under its revolving credit facility and term loans, those lenders could proceed against the collateral granted them to secure that indebtedness. In the event the Company's lenders or noteholders accelerate the repayment of its borrowings, the Company and its subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, the Company may be:

limited in how it conduct its business;

unable to raise additional debt or equity financing to operate during general economic or business downturns; and

unable to compete effectively or to take advantage of new business opportunities.

These restrictions may affect the Company's ability to grow in accordance with its strategy. In addition, the Company's financial results, its substantial indebtedness and its credit ratings could adversely affect the availability and terms of its financing.

The Company may not be successful divesting its non-core and/or non-accretive businesses.

The Company has a plan to divest certain non-core and/or non-accretive businesses to, among other things, simplify its business and reduce its debt. However, there can be no assurance that it will be successful in selling any assets. It may incur substantial expenses associated with identifying and evaluating potential sales. The process of exploring any sales may be time consuming and disruptive to its business operations, and if it is unable to effectively manage the process, its business, financial condition and results of operations could be adversely affected. It also cannot assure that any potential sale, if consummated, will prove to be beneficial to its shareholders. Any potential sale would be dependent upon a number of factors that may be beyond its control, including, among other factors, market conditions, industry trends, the interest of third parties in the assets and the availability of financing to potential buyers on reasonable terms.

In addition, while it evaluates asset sales, the Company is exposed to risks and uncertainties, including potential difficulties in retaining and attracting key employees, distraction of its management from other important business activities, and potential difficulties in establishing and maintaining relationships with customers, suppliers, lenders, sureties and other third parties, all of which could harm its business.

Demand for and supply of the Company's services and products may be adversely affected by numerous factors, some of which it cannot predict or control. This could adversely affect its operating results.

Numerous factors may affect the demand for and supply of the Company's services and products, including:

changes in the market acceptance of its services and products;

customer and competitor consolidation;

changes in customer preferences;

declines in general economic conditions;

disruptive technologies;

changes in environmental regulations that would limit its ability to service and sell products in specific markets;

macro-economic factors affecting retail stores and banks, credit unions and other financial institutions may lead to cost-cutting efforts by customers, including branch closures, which could cause it to lose current or potential customers or achieve less revenue per customer; and

availability of purchased products.

If any of these factors occur, the demand for and supply of the Company's services and products could suffer, which could adversely affect its results of operations.

The Company’s ability to deliver products that satisfy customer requirements is dependent on the performance of its subcontractors and suppliers, as well as on the availability of raw materials and other components.

The Company relies on other companies, including subcontractors and suppliers, to provide and produce raw materials, integrated components and sub-assemblies and production commodities included in, or used in the production of, its products. If one or more of the Company's subcontractors or suppliers experiences delivery delays or other performance problems, it may be unable to meet commitments to its customers or incur additional costs. In some instances, the Company depends upon a single source of supply. Any service disruption from one of these suppliers, either due to circumstances beyond the supplier’s control, such as geo-political developments, or as a result of performance problems or financial difficulties, could have a material adverse effect on the Company's ability to meet commitments to its customers or increase its operating costs.

Increased energy, raw material and labor costs could reduce the Company's operating results.

Energy prices, particularly petroleum prices, are cost drivers for the Company's business. In recent years, the price of petroleum has been highly volatile, particularly due to the unstable political conditions in the Middle East and increasing international demand from emerging markets. Price increases in fuel and electricity costs, such as those increases that may occur from climate change legislation or other environmental mandates, may continue to increase cost of operations. Any increase in the costs of energy would also increase the Company's transportation costs.

The primary raw materials in the Company's services, software and systems solutions are steel, plastics, and electronic parts and components. The majority of raw materials are purchased from various local, regional and global suppliers pursuant to supply contracts. However, the price of these materials can fluctuate under these contracts in tandem with the pricing of raw materials.

The Company cannot assure that its labor costs going forward will remain competitive or will not increase. In the future, the Company's labor agreements may be amended, or become amendable, and new agreements could have terms with higher labor costs. In addition, labor costs may increase in connection with the Company's growth. The Company may also become subject to collective bargaining agreements in the future in the event that non-unionized workers may unionize.

Although the Company attempts to pass on higher energy, raw material and labor costs to its customers, it is often not possible given the competitive markets in which it operates.

In addition to the Acquisition, the Company may be unable to successfully and effectively manage acquisitions, divestitures and other significant transactions, which could harm its operating results, business and prospects.

As part of its business strategy, the Company frequently engages in discussions with third parties regarding possible investments, acquisitions, strategic alliances, joint ventures, divestitures and outsourcing arrangements, and enters into agreements relating to such transactions in order to further its business objectives. In order to pursue this strategy successfully, it must identify suitable candidates, successfully complete transactions, some of which may be large and complex, and manage post-closing issues such as the integration of acquired companies or employees and the divestiture of combined businesses, operations and employees. Integration, divestiture and other risks of these transactions can be more pronounced in larger and more complicated transactions, or if multiple transactions are pursued simultaneously. If it fails to identify and successfully complete transactions that further its strategic objectives, it may be required to expend resources to develop products and technology internally. This may put it at a competitive disadvantage and it may be adversely affected by negative market perceptions, any of which may have a material adverse effect on its revenue, gross margin and profitability.

Integration and divestiture issues are complex, time-consuming and expensive and, without proper planning and implementation, could significantly disrupt the Company's business. The challenges involved in integrating and divesting include:

combining service and product offerings and entering into new markets in which the Company is not experienced;

convincing customers and distributors that any such transaction will not diminish client service standards or business focus, preventing customers and distributors from deferring purchasing decisions or switching to other suppliers or service providers (which could result in additional obligations to address customer uncertainty), and coordinating service, sales, marketing and distribution efforts;

consolidating and rationalizing corporate IT infrastructure, which may include multiple systems from various acquisitions and integrating software code;

minimizing the diversion of management attention from ongoing business concerns;

persuading employees that business cultures are compatible, maintaining employee morale and retaining key employees, integrating employees into the Company, correctly estimating employee benefit costs and implementing restructuring programs;

coordinating and combining administrative, service, manufacturing, R&D and other operations, subsidiaries, facilities and relationships with third parties in accordance with local laws and other obligations while maintaining adequate standards, controls and procedures;

achieving savings from supply chain and administration integration; and

efficiently divesting combined business operations which may cause increased costs as divested businesses are de-integrated from embedded systems and operations.

The Company evaluates and enters into these types of transactions on an ongoing basis. It may not fully realize all of the anticipated benefits of any transaction and the time frame for achieving benefits of a transaction may depend partially upon the actions of employees, suppliers or other third parties. In addition, the pricing and other terms of its contracts for these transactions require it to make estimates and assumptions at the time it enters into these contracts, and, during the course of its due diligence, it may not identify all of the factors necessary to estimate costs accurately. Any increased or unexpected costs, unanticipated delays or failure to achieve contractual obligations could make these agreements less profitable or unprofitable.

The Company's business may be affected by general economic conditions, cyclicality and uncertainty and could be adversely affected during economic downturns.

Demand for the Company's services and products is affected by general economic conditions and the business conditions of the industries in which it sells its services and products. The business of most of the Company's customers, particularly its financial institution and retail customers, is, to varying degrees, cyclical and has historically experienced periodic downturns. Under difficult economic conditions, customers may seek to reduce discretionary spending by forgoing purchases of the Company's services and products. This risk is magnified for capital goods purchases such as ATMs, retail systems and physical security products. In addition, downturns in the Company's customers’ industries, even during periods of strong general economic conditions, could adversely affect the demand for the Company's services and products, and its sales and operating results.

In particular, continuing economic difficulties in the global markets have led to an economic recession in certain markets in which the Company operates. As a result of these difficulties and other factors, including new or increased regulatory burdens, financial institutions and retail customers have failed and may continue to fail, resulting in a loss of current or potential customers, or deferred or canceled orders, including orders previously placed. Any customer deferrals or cancellations could materially affect the Company's sales and operating results.

The Company faces competition that could adversely affect its sales and financial condition.

All phases of the Company's business are highly competitive. Some of its services and products are in direct competition with similar or alternative services or products provided by its competitors. The Company encounters competition in price, delivery, service, performance, product innovation, product recognition and quality.

Because of the potential for consolidation in any market, the Company's competitors may become larger, which could make them more efficient and permit them to be more price-competitive. Increased size could also permit them to operate in wider geographic areas and enhance their abilities in other areas such as R&D and customer service. As a result, this could also reduce the Company's profitability.

The Company expects that its competitors will continue to develop and introduce new and enhanced services and products. This could cause a decline in market acceptance of the Company's services and products. In addition, the Company's competitors could cause a reduction in the prices for some of its services and products as a result of intensified price competition. Also, the Company may be unable to effectively anticipate and react to new entrants in the marketplace competing with its services and products.

Competitive pressures can also result in the loss of major customers. An inability to compete successfully could have an adverse effect on the Company's operating results, financial condition and cash flows in any given period.

Additional tax expense or additional tax exposures could affect the Company's future profitability.

The Company is subject to income taxes in both the U.S. and various non-U.S. jurisdictions, and its domestic and international tax liabilities are dependent upon the distribution of income among these different jurisdictions. If the Company decides to repatriate cash, cash equivalents and short-term investments residing in international tax jurisdictions, there could be further negative impact on foreign and domestic taxes. The Company's tax expense includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings of the Company that could affect the valuation of its net deferred tax assets. The Company's future results could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in the overall profitability of the Company, changes in tax legislation, changes in the valuation of deferred tax assets and liabilities, the results of audits and examinations of previously filed tax returns and continuing assessments of its income tax exposures.

Additionally, the Company's future results could be adversely affected by the results of indirect tax audits and examinations, and continuing assessments of its indirect tax exposures. A loss contingency is reasonably possible if it has a more than remote but less than probable chance of occurring. Although management believes the Company has valid defenses with respect to its indirect tax positions, it is reasonably possible that a loss could occur in excess of the estimated accrual. The Company estimated the aggregate risk at December 31, 2018 to be up to $106.1 for its material indirect tax matters. The aggregate risk related to indirect taxes is adjusted as the applicable statutes of limitations expire. It is reasonably possible that the Company could be required to pay taxes, penalties and interest related to this matter or other open years, which could be material to its financial condition and results of operations.

In international markets, the Company competes with local service providers that may have competitive advantages.

In a number of international markets in each region where the Company operates, for instance in Brazil and China, it faces substantial competition from local service providers that offer competing services and products. Some of these companies may have a dominant market share in their territories and may be owned by local stakeholders. This could give them a competitive advantage. Local providers of competing services and products may also have a substantial advantage in attracting customers in their countries due to more established branding in that country, greater knowledge with respect to the tastes and preferences of customers residing in that country and/or their focus on a single market. As a U.S. based multi-national corporation, the Company must ensure its compliance with both U.S. and foreign regulatory requirements.

Because the Company's operations are conducted worldwide, they are affected by risks of doing business abroad.

The Company generates a significant percentage of revenue from operations conducted outside the U.S. Revenue from international operations amounted to approximately 77.1 percent in 2018, 77.2 percent in 2017 and 67.0 percent in 2016 of total revenue during these respective years.

Accordingly, international operations are subject to the risks of doing business abroad, including, among other things, the following:

fluctuations in currency exchange rates, particularly in EMEA (primarily the euro (EUR) and Great Britain pound sterling (GBP)), Mexico (peso), Thailand (baht) and Brazil (real);

transportation and supply chain delays and interruptions;

political and economic instability and disruptions, including the impact of trade agreements;

the failure of foreign governments to abide by international agreements and treaties;

restrictions on the transfer of funds;

the imposition of duties, tariffs and other taxes;

import and export controls;

changes in governmental policies and regulatory environments;

ensuring the Company's compliance with U.S. laws and regulations and applicable laws and regulations in other jurisdictions, including the Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act, and applicable laws and regulations in other jurisdictions;

increasingly complex laws and regulations concerning privacy and data security, including the European Union’s (EU) General Data Protection Regulation (GDPR);

labor unrest and current and changing regulatory environments;

the uncertainty of product acceptance by different cultures;

the risks of divergent business expectations or cultural incompatibility inherent in establishing strategic alliances with foreign partners;

difficulties in staffing and managing multi-national operations;

limitations on the ability to enforce legal rights and remedies;

reduced protection for intellectual property rights in some countries; and

potentially adverse tax consequences, including repatriation of profits.

Any of these events could have an adverse effect on the Company's international operations by reducing the demand for its services and products or decreasing the prices at which it can sell its services and products, thereby adversely affecting its financial condition or operating results. The Company may not be able to continue to operate in compliance with applicable customs, currency exchange control regulations, transfer pricing regulations or any other laws or regulations to which it may be subject. In addition, these laws or regulations may be modified in the future, and the Company may not be able to operate in compliance with those modifications.

Significant developments from the recent and potential changes in U.S. trade policies could have a material adverse effect on the Company and its financial condition and results of operations.

The U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries. On various dates in July, August and September 2018, the U.S. government implemented additional tariffs of 25 percent and 10 percent (increasing to 25 percent on January 1, 2019) on certain goods imported from China. The Company manufactures a substantial amount of its products in China and are presently subjected to these additional tariffs. These tariffs, and other governmental action relating to international trade agreements or policies, the adoption and expansion of trade restrictions, or the occurrence of a trade war may adversely impact demand for the Company's products, costs, customers, suppliers and/or the U.S. economy or certain sectors thereof and, as a result, adversely impact its business. These additional tariffs may cause the Company to increase prices to its customers, which may reduce demand, or, if it is unable to increase prices, result in lowering its margin on products sold. It remains unclear what the U.S. or foreign governments will or will not do with respect to tariffs, international trade agreements and policies on a short-term or long-term basis. The Company cannot predict future trade policy or the terms of any renegotiated trade agreements and their impacts on its business.

As a result of these tariffs and other governmental action, the Company is presently shifting some of its supply base and sourcing to mitigate the risk of higher tariffs. Any shift may not be fully successful in reducing its costs, or fully off-setting the impact of tariffs.

The Company may be exposed to liabilities under the FCPA, which could harm its reputation and have a material adverse effect on its business.

The Company is subject to compliance with various laws and regulations, including the FCPA and similar worldwide anti-bribery laws, which generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments to foreign officials for the purpose of obtaining or retaining business or gaining an unfair business advantage. The FCPA also requires proper record keeping and characterization of such payments in the Company's reports filed with the SEC.

The Company's employees and agents are required to comply with these laws. The Company operates in many parts of the world that have experienced governmental and commercial corruption to some degree, and strict compliance with anti-bribery laws may conflict with local customs and practices. Foreign companies, including some that may compete with the Company, may not be subject to the FCPA and may follow local customs and practices. Accordingly, such companies may be more likely to engage in activities prohibited by the FCPA, which could have a significant adverse impact on the Company's ability to compete for business in such countries.

Despite the Company's commitment to legal compliance and corporate ethics, it cannot ensure that its policies and procedures will always protect it from intentional, reckless or negligent acts committed by its employees or agents. Violations of these laws, or allegations of such violations, could disrupt the Company's business and result in financial penalties, debarment from government contracts and other consequences that may have a material adverse effect on its reputation, business, financial condition or results of operations. Future changes in anti-bribery or economic sanctions laws and enforcement could also result in increased compliance requirements and related expenses that may also have a material adverse effect on its business, financial condition or results of operations.

The Company has a significant amount of long-term assets, including goodwill and other intangible assets, and any future impairment charges could adversely impact its results of operations.

The Company reviews long-lived assets, including property, plant and equipment and identifiable amortizing intangible assets, for impairment whenever changes in circumstances or events may indicate that the carrying amounts are not recoverable. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference. Factors which may cause an impairment of long-lived assets include significant changes in the manner of use of these assets, negative industry or market trends, a significant under-performance relative to historical or projected future operating results, or a likely sale or disposal of the asset before the end of its estimated useful life.

As of December 31, 2018, the Company had $827.1 of goodwill. The Company’s four reporting units are defined as Eurasia Banking, Americas Banking, EMEA Retail and Rest of World Retail. Management concluded during a second and third quarter interim goodwill impairment tests for 2018 that a portion of the Company’s goodwill was not recoverable and recorded a $217.5 non-cash impairment loss for the year ended December 31, 2018. The techniques used in its qualitative and quantitative assessment and goodwill impairment tests incorporate a number of estimates and assumptions that are subject to change. Although the Company believes these estimates and assumptions are reasonable and reflect market conditions forecast at the assessment date, any changes to these assumptions and estimates due to market conditions or otherwise may lead to an outcome where impairment charges would be required in future periods.

System security risks, systems integration and cybersecurity issues could disrupt the Company's internal operations or services provided to customers, and any such disruption could adversely affect revenue, increase costs, and harm its reputation and stock price.

Experienced computer programmers and hackers may be able to penetrate the Company's network security and misappropriate its own confidential information or those of its customers, corrupt data, create system disruptions or cause shutdowns. A network security breach could be particularly harmful if it remains undetected for an extended period of time. Groups of hackers may also act in a coordinated manner to launch distributed denial of service attacks, or other coordinated attacks, that may cause service outages or other interruptions. The Company could incur significant expenses in addressing problems created by network security breaches, such as the expenses of deploying additional personnel, enhancing or implementing new protection measures, training employees or hiring consultants. Further, such corrective measures may later prove inadequate. Moreover, actual or perceived security vulnerabilities in the Company's services and products could cause significant reputational harm, causing it to lose existing or potential customers. Reputational damage could also result in diminished investor confidence. Actual or perceived vulnerabilities may also lead to claims against the Company. Although its license agreements typically contain provisions that eliminate or limit its exposure to such liability, there is no assurance these provisions will withstand legal challenges. The Company could also incur significant expenses in connection with customers’ system failures.

In addition, sophisticated hardware and operating system software and applications that the Company produces or procures from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere

with the operation of the system. The costs to eliminate or alleviate security problems, viruses and bugs could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that could impede sales, manufacturing, distribution or other critical functions.

Portions of the Company's IT infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. The Company may not be successful in implementing new systems, and transitioning data and other aspects of the process could be expensive, time consuming, disruptive and resource-intensive. Such disruptions could adversely impact the ability to fulfill orders, service customers and interrupt other processes and, in addition, could adversely impact its ability to maintain effective internal control over financial reporting. Delayed sales, lower margins, lost customers or diminished investor confidence resulting from these disruptions could adversely affect the Company's financial results, stock price and reputation.

Privacy and information security laws are complex, and if the Company fails to comply with applicable laws, regulations and standards, or fails to properly maintain the integrity of its data, protect its proprietary rights to its systems or defend against cybersecurity attacks, the Company may be subject to government or private actions due to privacy and security breaches, any of which could have a material adverse effect on its business, financial condition and results of operations or materially harm our reputation.

The Company is subject to a variety of laws and regulations in the U.S. and other countries that involve matters central to its business, including user privacy, security, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, competition, protection of minors, consumer protection, taxation, and online-payment services. These laws can be particularly restrictive in countries outside the U.S. Both in the U.S. and abroad, these laws and regulations constantly evolve and remain subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which it operates. Because the Company stores, processes and uses data, some of which contains personal information, it is subject to complex and evolving federal, state, and foreign laws and regulations regarding privacy, data protection, content, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations, claims, changes to the Company's business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm its business.

Several proposals have recently been adopted or are currently pending before federal, state, and foreign legislative and regulatory bodies that could significantly affect our business. The GDPR in the EU, which went into effect in May 2018, placed new data protection obligations and restrictions on organizations and may require the Company to further change its policies and procedures. If the Company is not compliant with GDPR requirements, it may be subject to significant fines and its business may be seriously harmed. The California Consumer Privacy Act goes into effect in January 2020, with a lookback to January 2019, and places additional requirements on the handling of personal data.

An inability to attract, retain and motivate key employees could harm current and future operations.

In order to be successful, the Company must attract, retain and motivate executives and other key employees, including those in managerial, professional, administrative, technical, sales, marketing and IT support positions. It also must keep employees focused on its strategies and goals. Hiring and retaining qualified executives, engineers and qualified sales representatives are critical to its future, and competition for experienced employees in these areas can be intense. The failure to hire or loss of key employees could have a significant impact on the Company's operations.

The Company may not be able to generate sufficient cash flows to fund its operations and make adequate capital investments.

The Company's cash flows from operations depend primarily on sales and service margins. To develop new service and product technologies, support future growth, achieve operating efficiencies and maintain service and product quality, the Company must make significant capital investments in manufacturing technology, facilities and capital equipment, R&D, and service and product technology. In addition to cash provided from operations, the Company has from time to time utilized external sources of financing. Depending upon general market conditions or other factors, the Company may not be able to generate sufficient cash flows to fund its operations and make adequate capital investments, either in whole or in part. In addition, any tightening of the credit markets may limit the Company's ability to obtain alternative sources of cash to fund its operations.

Although the Company has paid dividends on its common shares in the past, the declaration and payment of future dividends, as well as the amount thereof, are subject to the declaration by the Company’s board of directors. The amount and size of any future dividends will depend on the Company’s results of operations, financial condition, capital levels, cash requirements, future prospects and other factors.

New service and product developments may be unsuccessful.

The Company is constantly looking to develop new services and products that complement or leverage the underlying design or process technology of its traditional service and product offerings. The Company makes significant investments in service and product technologies and anticipates expending significant resources for new software-led services and product development over the next several years. There can be no assurance that the Company's service and product development efforts will be successful, that the roll out of any new services and products will be timely, that it will be able to successfully market these services and products or that margins generated from sales of these services and products will recover costs of development efforts.

The Company's ability to maintain effective internal control over financial reporting may be insufficient to allow it to accurately report its financial results or prevent fraud, and this could cause its financial statements to become materially misleading and adversely affect the trading price of its common shares.

The Company requires effective internal control over financial reporting in order to provide reasonable assurance with respect to its financial reports and to effectively prevent fraud. Internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If the Company cannot provide reasonable assurance with respect to its financial statements and effectively prevent fraud, its financial statements could become materially misleading, which could adversely affect the trading price of its common shares.

If the Company is not able to maintain the adequacy of its internal control over financial reporting, including any failure to implement required new or improved controls, or if the Company experiences difficulties in the implementation of or the implemented controls required in connection with the Acquisition, its business, financial condition and operating results could be harmed. Any material weakness could affect investor confidence in the accuracy and completeness of its financial statements. As a result, the Company's ability to obtain any additional financing, or additional financing on favorable terms, could be materially and adversely affected. This, in turn, could materially and adversely affect its business, financial condition and the market value of its securities and require it to incur additional costs to improve its internal control systems and procedures. In addition, perceptions of the Company among customers, lenders, investors, securities analysts and others could also be adversely affected.

Management identified control deficiencies as of December 31, 2018 that constituted material weaknesses. Throughout 2018, the Company enhanced, and will continue to enhance, its internal controls over financial reporting. The Company had ineffective information technology general controls (ITGCs) used for financial reporting by certain entities throughout the organization, ineffective implementation and operation of controls over inventory valuation and ineffective controls over non-routine transactions. For more information regarding the material weaknesses refer to Item 9A of this annual report on Form 10-K. The Company is still considering the full extent of the procedures to implement in order to remediate these material weaknesses. The Company can give no assurances that any additional material weakness will not arise in the future due to its failure to implement and maintain adequate internal control over financial reporting. In addition, although the Company has been successful historically in strengthening its controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or ensure the fair presentation of its financial statements included in its periodic reports filed with the SEC.

Low investment performance by the Company's pension plan assets may result in an increase to its net pension liability and expense, which may require it to fund a portion of its pension obligations and divert funds from other potential uses.

The Company sponsors several defined benefit pension plans that cover certain eligible employees across the globe. The Company's pension expense and required contributions to its pension plans are directly affected by the value of plan assets, the projected rate of return on plan assets, the actual rate of return on plan assets and the actuarial assumptions it uses to measure the defined benefit pension plan obligations.

A significant market downturn could occur in future periods resulting in a decline in the funded status of the Company's pension plans and causing actual asset returns to be below the assumed rate of return used to determine pension expense. If return on plan assets in future periods perform below expectations, future pension expense will increase.

The Company establishes the discount rate used to determine the present value of the projected and accumulated benefit obligations at the end of each year based upon the available market rates for high-quality, fixed income investments. The Company matches the projected cash flows of its pension plans against those generated by high-quality corporate bonds. The yield of the resulting bond portfolio provides a basis for the selected discount rate. An increase in the discount rate would reduce the future pension expense and, conversely, a decrease in the discount rate would increase the future pension expense.

Based on current guidelines, assumptions and estimates, including investment returns and interest rates, the Company plans to make contributions to its pension plans as well as benefits payments directly from the Company of approximately $50 in 2019. The Company anticipates reimbursement of approximately $13 for certain benefits paid from its trustee in 2019. Changes in the current assumptions and estimates could result in contributions in years beyond 2019 that are greater than the projected 2019 contributions required. The Company cannot predict whether changing market or economic conditions, regulatory changes or

other factors will further increase its pension expenses or funding obligations, diverting funds it would otherwise apply to other uses.

The Company's businesses are subject to inherent risks, some for which it maintains third-party insurance and some for which it self-insures. The Company may incur losses and be subject to liability claims that could have a material adverse effect on its financial condition, results of operations or cash flows.

The Company maintains insurance policies that provide limited coverage for some, but not all, of the potential risks and liabilities associated with its businesses. The policies are subject to deductibles and exclusions that result in the Company's retention of a level of risk on a self-insurance basis. For some risks, the Company may not obtain insurance if it believes the cost of available insurance is excessive relative to the risks presented. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. As a result, the Company may not be able to renew its existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Even where insurance coverage applies, insurers may contest their obligations to make payments. The Company's financial condition, results of operations and cash flows could be materially and adversely affected by losses and liabilities from uninsured or under-insured events, as well as by delays in the payment of insurance proceeds, or the failure by insurers to make payments. The Company also may incur costs and liabilities resulting from claims for damages to property or injury to persons arising from its operations.

The Company's assumptions used to determine its self-insurance liability could be wrong and materially impact its business.

The Company evaluates its self-insurance liability based on historical claims experience, demographic factors, severity factors and other actuarial assumptions. However, if future occurrences and claims differ from these assumptions and historical trends, the Company's business, financial results and financial condition could be materially impacted by claims and other expenses.

An adverse determination that the Company's services, products or manufacturing processes infringe the intellectual property rights of others, an adverse determination that a competitor has infringed its intellectual property rights, or its failure to enforce its intellectual property rights could have a materially adverse effect on its business, operating results or financial condition.

As is common in any high technology industry, others have asserted from time to time, and may assert in the future, that the Company's services, products or manufacturing processes infringe their intellectual property rights. A court determination that its services, products or manufacturing processes infringe the intellectual property rights of others could result in significant liability and/or require it to make material changes to its services, products and/or manufacturing processes. The Company is unable to predict the outcome of assertions of infringement made against it.

The Company also seeks to enforce its intellectual property rights against infringement. In October 2015, the Company filed a complaint with the U.S. International Trade Commission (ITC) and the U.S. District Court for the Northern District of Ohio alleging that Nautilus Hyosung Inc., and its subsidiary Nautilus Hyosung America Inc., infringed upon the Company's patents. In February 2017, the ITC determined that Nautilus Hyosung products infringed two of the Company's patents and issued an exclusion order and cease and desist order which bars the importation and sale of certain Nautilus Hyosung deposit automation enabled ATMs and modules in the U.S. In February 2016, Nautilus Hyosung filed complaints against the Company in front of the ITC and U.S. District Court for the Northern District of Texas alleging the Company infringed certain Nautilus Hyosung patents. Those ITC proceedings have now concluded and the Company has successfully defeated all claims raised by Nautilus Hyosung in the ITC. The Company will continue to vindicate its intellectual property against infringement by others.

The Company cannot predict the outcome of actions to enforce its intellectual property rights, and, although it seeks to enforce its intellectual property rights, it cannot guarantee that it will be successful in doing so. Any of the foregoing could have a materially adverse effect on the Company's business, operating results or financial condition.

Changes in laws or regulations or the manner of their interpretation or enforcement could adversely impact the Company's financial performance and restrict its ability to operate its business or execute its strategies.

New laws or regulations, or changes in existing laws or regulations or the manner of their interpretation or enforcement, could increase the Company's cost of doing business and restrict its ability to operate its business or execute its strategies. This includes, among other things, the possible taxation under U.S. law of certain income from foreign operations, compliance costs and enforcement under applicable securities laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the German Securities Trading Act (Wertpapierhandelsgesetz) and Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014 as well as costs associated with complying with the Patient Protection and Affordable Care Act of 2010 and the regulations promulgated thereunder.

Economic conditions and regulatory changes leading up to and following the United Kingdom's (U.K.) likely exit from the EU could have a material adverse effect on the Company's business and results of operations.

The U.K.’s anticipated exit from the EU (Brexit) and the resulting significant change to the U.K.’s relationship with the EU and with countries outside the EU (and the laws, regulations and trade deals impacting business conducted between them) could disrupt

the overall economic growth or stability of the U.K. and the EU and negatively impact the Company’s European operations. The U.K. is currently negotiating the terms of Brexit, with the U.K. due to exit the EU on March 29, 2019. In November 2018, the U.K. and the EU agreed upon a draft withdrawal agreement that set out the terms governing the U.K.’s departure, including, among other things, a transition period to allow for a future trade deal to be agreed upon. Because the draft withdrawal agreement was rejected by the U.K. Parliament on January 15, 2019, there is significant uncertainty about the terms and timing under which the U.K. will leave the EU. It is possible that Brexit will result in the Company’s EU operations becoming subject to materially different, and potentially conflicting, laws, regulations or tariffs, which could require costly new compliance initiatives or changes to legal entity structures or operating practices. Furthermore, in the event the U.K. leaves the EU with no agreement, there may be additional adverse impacts on immigration and trade between the U.K. and the EU or countries outside the EU.

The Company's actual operating results may differ significantly from its guidance.

From time to time, the Company releases guidance, including any guidance that it may include in the reports that it files with the SEC regarding its future performance. This guidance, which consists of forward-looking statements, is prepared by its management and is qualified by, and subject to, the assumptions and the other information included in this annual report on Form 10-K, as well as the factors described under “Management's Discussion and Analysis of Financial Condition and Results of Operation — Forward-Looking Statement Disclosure.” The Company's guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither its independent registered public accounting firm nor any other independent or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.

Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and are based upon specific assumptions with respect to future business decisions, some of which will change. The principal reason that the Company releases such data is to provide a basis for its management to discuss its business outlook with analysts and investors. The Company does not accept any responsibility for any projections or reports published by any such persons.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by the Company will not materialize or will vary significantly from actual results. Accordingly, the Company's guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data are forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.

Anti-takeover provisions could make it more difficult for a third party to acquire the Company.

Certain provisions of the Company's charter documents, including provisions limiting the ability of shareholders to raise matters at a meeting of shareholders without giving advance notice, may make it more difficult for a third party to gain control of its board of directors and may have the effect of delaying or preventing changes in the Company's control or management. This could have an adverse effect on the market price of the Company's common shares. Additionally, Ohio corporate law provides that certain notice and informational filings and special shareholder meeting and voting procedures must be followed prior to consummation of a proposed control share acquisition, as defined in the Ohio Revised Code. Assuming compliance with the prescribed notice and information filings, a proposed control share acquisition may be made only if, at a special meeting of shareholders, the acquisition is approved by both a majority of its voting power represented at the meeting and a majority of the voting power remaining after excluding the combined voting power of the interested shares, as defined in the Ohio Revised Code. The application of these provisions of the Ohio Revised Code also could have the effect of delaying or preventing a change of control.

ITEM 1B: UNRESOLVED STAFF COMMENTS

None.

ITEM 2: PROPERTIES

The Company's corporate ~~offices are~~office is located in North Canton, Ohio. Within NA, Diebold leases manufacturing facilities in Greensboro, North Carolina and has selling, service and administrative offices throughout the United States and Canada, including a software development center in Canada. AP owns and operates manufacturing facilities in China and India and selling, service and administrative offices in the following locations: Australia, China, Hong Kong, India, Indonesia, Malaysia, Philippines, Taiwan, Thailand, Singapore and Vietnam. EMEAThe Company owns or leases and operates manufacturing facilities in ~~Belgium~~Greensboro, North Carolina, Brazil and ~~Hungary~~Germany. The Company leases software development centers in Canada and ~~has~~Mexico. The following are the principal locations in which the Company owns or leases and operates selling, service and administrative offices in the following locations: Austria, Denmark, Belgium, France, Germany, Hungary, Israel, Italy, Luxembourg, Morocco, Namibia, the Netherlands, Poland, Portugal, Russia, South Africa, Spain, Switzerland, Turkey, Uganda, the United Arab Emiratesits three segments, Eurasia Banking, Americas Banking and the United Kingdom. LA has selling, service and administrative offices in the following locations: Barbados, Belize, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, and Uruguay. In addition, LA owns and operates manufacturing facilities and has selling, service and administrative offices throughout Brazil. The Company leases a majority of the selling, service and administrative offices under operating lease agreements.Retail:



Americas		EMEA			AP
Bolivia	Honduras	Algeria	Italy	Slovakia	Australia
Brazil	Jamaica	Austria	Luxembourg	South Africa	China
Canada	Mexico	Belgium	Malta	Spain	Hong Kong
Chile	Nicaragua	Czech Republic	Morocco	Sweden	India
Colombia	Panama	Denmark	Netherlands	Switzerland	Indonesia
Costa Rica	Paraguay	Finland	Nigeria	Turkey	Malaysia
Dominican Republic	Peru	France	Norway	Ukraine	Myanmar
Ecuador	Uruguay	Germany	Poland	United Arab Emirates	Philippines
El Salvador	United States	Greece	Portugal	United Kingdom	Singapore
Guatemala	Venezuela	Hungary	Romania		Taiwan
		Ireland	Russia		Thailand
					Vietnam

The Company considers that its properties are generally in good condition, are well maintained, and are generally suitable and adequate to carry on the Company's business.

~~Table of Contents~~

ITEM 3: LEGAL PROCEEDINGS

(dollars in millions)

At December 31, ~~2015,~~2018, the Company was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company's financial position or results of operations. ~~In addition, the Company has indemnification obligations with certain former employees and costs associated with these indemnifications are expensed as incurred.~~ In management's opinion, the Company's consolidated financial statements would not be materially affected by the outcome of those legal proceedings, commitments, or asserted claims.

In addition to the routine legal proceedings noted above, the Company was a party to the legal proceedings described below at

December 31, ~~2015:~~2018:

Indirect Tax Contingencies

The Company accrues non-income tax liabilities for indirect tax matters when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they are charged against income. In evaluating indirect tax matters, management takes into consideration factors such as historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. Management evaluates and updates accruals as matters progress over time. It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably to the Company and could require recognizing future expenditures. Also, statutes of limitations could expire without the Company paying the taxes for matters for which accruals have been established, which could result in the recognition of future gains upon reversal of these accruals at that time.

At December 31, ~~2015~~,2018, the Company was a party to several routine indirect tax claims from various taxing authorities globally that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the consolidated financial statements would not be materially affected by the outcome of these indirect tax claims and/or proceedings or asserted claims.

In addition to these routine indirect tax matters, the Company was a party to the proceedings described below:

The Company has challenged multiple customs rulings in Thailand seeking to retroactively collect customs duties on previous imports of ATMs. In August ~~2012,~~2017, the Supreme Court of Thailand ruled in the Company's favor in one of the ~~Company's~~matters, finding that Customs' attempt to collect duties for importation of ATMs is improper. The surviving matters remain at various stages of the appeals process and the Company will use the Supreme Court's decision in support of its position in those matters. Management

remains confident that the Company has a valid legal position in these appeals. Accordingly, the Company does not have any amount accrued for this contingency.

At December 31, 2017, the Company had an accrual related to the Brazil ~~subsidiaries was notified~~indirect tax of ~~a tax assessment~~$4.9, which related to allegations of approximately R$270.0, including penalties and interest, regarding certain Brazil federal indirect taxes (Industrialized Products Tax, Import Tax, Programa de Integração Social and Contribution to Social Security Financing) for 2008 and 2009. The assessment alleges improper importation of certain components into Brazil's free trade zone that would nullify certain indirect tax incentives. On September 10, 2012, the Company filed its administrative defenses with the tax authorities. This proceeding is currently pending an administrative level decision, which could negatively impact Brazil federal indirect taxes in other years that remain open under statute. It is reasonably possible that the Company could be required to pay taxes, penalties and interest related to this matter, which could be material to the Company's consolidated financial statements.

In response to an order by the administrative court, the tax inspector provided further analysis with respect to the initial assessment in December 2013, which has now been accepted by the initial administrative court, that indicates a potential exposure that is significantly lower than the initial tax assessment received in August 2012. This revised analysis has been accepted by the initial administrative court; however, this matter remains subject to ongoing administrative proceedings and appeals. Accordingly, the Company cannot provide any assurance that its exposure pursuant to the initial assessment will be lowered significantly or at all. In addition, this matter could negatively impact Brazil federal indirect taxes in other years that remain open under statute. It is reasonably possible that the Company could be required to pay taxes, penalties and interest related to this matter, which could be material to the Company's consolidated financial statements. The Company continues to defend itself in this matter.

In connection with the Brazil indirect tax assessment, in May 2013, the SEC requested that the Company retain certain documents and produce certain records relating to the assessment, to which the Company complied. In September 2014, the Company was notified by the SEC that it had closed its inquiry relating to the assessment.

Beginning in July 2014 the Company challenged customs rulings in Thailand seeking to retroactively collect customs duties on previous imports of ATMs. Management believes that the customs authority’s attempt to retroactively assess customs duties is in contravention of World Trade Organization agreements and, accordingly, is challenging the rulings. In the third quarter of 2015, the Company received a prospective ruling from the United States Customs Border Protection which is consistent with its interpretation of the treaty in question. We are submitting that ruling for consideration in our ongoing dispute with Thailand. The matters are currently in the appeals process and management continues to believe that the Company has a valid legal position in these appeals. Accordingly, the Company has not accrued any amount for this contingency; however, the Company cannot provide any assurance that it will not ultimately be subject to a retroactive assessment.

At ~~December 31, 2015~~ ~~and 2014, the Company had an accrual of approximately $7.5 and $12.5, respectively, related to the Brazil indirect tax matter disclosed above. The reduction in the accrual is due to the expiration of~~During 2018, the statute of limitations ~~related to years subject to audit~~expired and ~~foreign currency fluctuations.~~the entire accrual was reversed.

~~Table of Contents~~

A loss contingency is reasonably possible if it has a more than remote but less than probable chance of occurring. Although management believes the Company has valid defenses with respect to its indirect tax positions, it is reasonably possible that a loss could occur in excess of the estimated ~~accrual, for which the~~accrual. The Company estimated the aggregate risk at December 31, ~~2015~~2018 to be up to ~~approximately $174.5~~$106.1 for its material indirect tax matters, of which ~~approximately $138.0 and $24.0, respectively,~~$27.0 relates to the ~~Brazil indirect tax matter and~~ Thailand customs matter disclosed above. The aggregate risk related to indirect taxes is adjusted as the applicable statutes of limitations expire.

ITEM 4: MINE SAFETY DISCLOSURES

Not applicable.

~~Table of Contents~~

PART II

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The common shares of the Company are listed on the New York Stock Exchange with a symbol of “DBD.” The price ranges of common shares of the Company for the periods indicated below are as follows:


	2015				2014				2013				2018				2017				2016
	High		Low		High		Low		High		Low		High		Low		High		Low		High		Low
1st Quarter	$	36.49	$	30.63	$	40.78	$	32.05	$	33.30	$	27.59	$	19.05	$	12.90	$	31.85	$	24.90	$	29.80	$	22.84
2nd Quarter	$	38.94	$	33.21	$	41.45	$	36.20	$	33.95	$	28.26	$	16.40	$	11.43	$	30.70	$	25.50	$	28.81	$	23.10
3rd Quarter	$	35.79	$	29.16	$	40.90	$	35.00	$	35.40	$	27.89	$	13.40	$	3.55	$	28.50	$	17.95	$	29.01	$	23.95
4th Quarter	$	37.98	$	29.60	$	38.67	$	32.31	$	34.44	$	28.88	$	4.90	$	2.41	$	23.50	$	16.00	$	25.90	$	21.05
Full Year	$	38.94	$	29.16	$	41.45	$	32.05	$	35.40	$	27.59	$	19.05	$	2.41	$	31.85	$	16.00	$	29.80	$	21.05

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)

Latin America: 2015 2014 $ Change % Change
Revenue $ 492.1
$ 721.9
$ (229.8 ) (31.8)
Segment operating profit $ 37.4
$ 68.7
$ (31.3 ) (45.6)
Segment operating profit margin 7.6 % 9.5 %
2017 comparison with 2016

LA revenue decreased in 2015 compared to 2014, including a net unfavorable currency impact of $136.9. In Brazil, market-specific economic and political factors affecting the purchasing environment have driven lower Brazil other volume as well as a delivery of IT equipment to a Brazil education ministry in 2014 that was non-recurring. This was partially offset by FSS revenue growth related to product volume, particularly in Mexico where several customers are renewing their install bases. Operating profit decreased due to product volume decline in the Brazil other business and $9.3 of bad debt and inventory reserve increases primarily related to the cancellation of previously awarded government contracts in connection with the current Brazil economic and political environment. Operating profit benefited from decreased operating expenses during the time period mainly related to favorable currency impact.Net Sales

~~Refer to note 20 to the consolidated financial statements, which is contained in Item 8 of this annual report on Form 10-K, for further details of segment revenue and operating profit.~~

~~2014 comparison with 2013~~

~~Net Sales~~

The following table represents information regarding our net sales for the years ended December 31:

2014 2013 $ Change % Change
Total financial self-service $ 2,197.2
$ 2,166.4
$ 30.8
1.4
Total security 312.4
344.3
(31.9 ) (9.3)
Brazil other 225.2
72.0
153.2
N/M
Total net sales $ 2,734.8
$ 2,582.7
$ 152.1
5.9



									Percent of Total Net Sales for the Year Ended
	2017		2016		% Change		% Change in CC ⁽¹⁾		2017	2016
Segments
Eurasia Banking
Services	$	1,133.1	$	637.3	77.8		71.3		24.6	19.2
Products	770.3		595.3		29.4		25.8		16.7	18.0
Total Eurasia Banking	$	1,903.4	$	1,232.6	54.4		49.5		41.3	37.2

Americas Banking
Services	$	1,043.9	$	1,068.1	(2.3	)	(3.2	)	22.6	32.2
Products	481.7		499.2		(3.5	)	(4.5	)	10.5	15.0
Total Americas Banking	$	1,525.6	$	1,567.3	(2.7	)	(3.6	)	33.1	47.2

Retail
Services	$	608.3	$	202.6	200.2		181.2		13.2	6.1
Products	572.0		313.8		82.3		72.4		12.4	9.5
Total Retail	$	1,180.3	$	516.4	128.6		115.3		25.6	15.6

Total net sales	$	4,609.3	$	3,316.3	39.0		35.4		100.0	100.0

⁽¹⁾The ~~increase in FSS~~Company calculates constant currency by translating the prior-year period results at the current year exchange rate.

Net sales ~~included~~increased $1,293.0 or 39.0 percent, including incremental net sales from the Acquisition of $1,517.7 and a net ~~unfavorable~~favorable currency impact of ~~$53.2 or 2.5 percent, of which 43 percent~~$88.3 primarily related to the euro and the Brazil real. 2017 net sales were adversely impacted $30.4 related to Deferred Revenue Adjustments, which was an increase of $14.2 compared to the prior year. The amounts attributable to the Acquisition are impacted by the alignment and integration of customer portfolios, solution offerings and operations between the legacy companies, which may result in unfavorable comparisons to prior year. The following ~~segment~~ results include the impact of foreign ~~currency. NA FSS~~currency and purchase accounting adjustments:

Segments

Eurasia Banking net sales increased $670.8, which included incremental net sales from the Acquisition of $756.7, a net favorable currency impact of $40.9 mainly related to the euro and higher Deferred Revenue Adjustments of $8.5. Excluding the impact of the Acquisition, currency and Deferred Revenue Adjustments, net sales decreased ~~$17.6 or 2.0 percent primarily from~~$118.3 due mostly to lower ~~volume within~~banking product project activity in EMEA as well as unfavorable structural changes in the ~~U.S. national bank business~~Asia Pacific market, partially offset by ~~improvement between years~~higher managed services net sales in Asia Pacific.

Americas Banking net sales decreased $41.7, which included incremental net sales from the ~~U.S. regional bank space~~Acquisition of $79.7 and ~~Canada. AP FSS~~a net favorable currency impact of $15.7 mostly related to the Brazil real. Excluding the impact of the Acquisition, currency and Deferred Revenue Adjustments, net sales decreased $137.1 mostly attributable to decreased product volumes, primarily in Mexico, North America and Brazil, as well as the run-off of multi-vendor service contracts in North America.

Retail net sales increased ~~$19.6 or 4.3 percent primarily due~~$663.9, which included incremental net sales from the Acquisition of $681.3, a net favorable currency impact of $31.7 mainly related to ~~growth~~the Brazil real and higher Deferred Revenue Adjustments of $5.7. Excluding the impact of the Acquisition, currency and Deferred Revenue Adjustments, net sales decreased $43.4, mostly from lower voting machine volume in ~~India, China and the Philippines~~Brazil, partially offset by ~~a decline~~increased services and software revenue in ~~Indonesia due to a large order in the prior year.~~ EMEA ~~FSS sales increased $59.6 or 16.5 percent with the main drivers being growth in Western Europe,~~and higher product volume ~~in Africa~~ and the ~~acquisition of Cryptera. LA FSS sales decreased $30.8 or 6.6 percent due to lower product sales volume primarily~~associated services in Brazil, a decline in Colombia and a decrease in Venezuela resulting from the currency control policy of the Venezuelan government offset by higher volume in Mexico and a net gain in the rest of the region.Asia Pacific.

~~Security~~A more detailed discussion of segment net sales decreased due to a decline in the physical security business, which was partially offset by an increase in the electronic security business. From a regional perspective, the decrease in total physical security sales resulted primarily from a decline in NA. The increase in electronic security related to LA, where in Chile a large government project was completed in the fourth quarter of 2014.is included under "Segment Net Sales and Operating Profit Summary" below.

Brazil other increased due to lottery sales volume combined with the favorable impact of deliveries of IT equipment to the education ministry primarily in the first quarter of 2014, which are not expected to recur in 2015, offset in part by a decrease in election systems sales.

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)

Gross Profit

The following table represents information regarding our gross profit for the years ended December 31:


	2014			2013			$ Change		% Change	2017			2016			$ Change		% Change
Gross profit - services	$	458.0		$	372.5		$	85.5	23.0	$	675.2		$	526.9		$	148.3	28.1
Gross profit - products	268.2			213.5			54.7		25.6	324.6			184.8			139.8		75.6
Total gross profit	$	726.2		$	586.0		$	140.2	23.9	$	999.8		$	711.7		$	288.1	40.5

Gross margin - services	32.0		%	26.2		%				24.2		%	27.6		%
Gross margin - products	20.6		%	18.4		%				17.8		%	13.1		%
Total gross margin	26.6		%	22.7		%				21.7		%	21.5		%

~~The increase~~Services gross margin decreased 3.4 percent due in ~~service~~part to the impact of the Acquisition, which utilizes a third-party labor model to support its services revenue stream, resulting in a dilutive effect on margins. Services gross margin was adversely impacted by higher non-routine cost of $10.8 primarily ~~driven by NA, which benefited from lower employee-related expense~~related to purchase accounting adjustments associated with ~~restructuring initiatives implemented as part of~~ the ~~Company’s service transformation efforts, including the ongoing benefit from its pension freeze~~Acquisition and voluntary early retirement program. Total service gross margin in 2014 compared to the prior year was also favorably impacted by margin improvement in LA. Total service gross profit in 2014 and 2013 includedhigher restructuring charges of ~~$0.5~~$8.9. Additionally, gross margin was also impacted by lower contract maintenance revenue in Americas combined with increased labor costs and ~~$25.6, respectively.~~investments. The labor investments are a result of higher turnover rates of technicians and the associated training to support additional product lines.

~~The increase in product~~Product gross margin ~~resulted from margin improvements in each international region. LA was~~increased 4.7 percent mostly as a ~~strong contributor as the Company benefited from certain contractual provisions in Venezuela that settled~~result of lower non-routine cost of $27.8 related to higher purchase accounting adjustments to record inventory acquired in the ~~year ended December 31, 2014. EMEA was also a contributor largely due to higher volume. Total product~~Acquisition at fair value in the prior year. Additionally, the incremental gross profit ~~in 2014 included a non-routine benefit~~associated with the Acquisition includes higher margin business across both banking and retail solutions. This increase was partially offset by higher restructuring of ~~$5.8 and 2013 included non-routine expense of $0.8, both of which were related to Brazil indirect taxes.~~

$5.2.

Operating Expenses

The following table represents information regarding our operating expenses for the years ended December 31:


	2014			2013			$ Change			% Change	2017		2016		$ Change			% Change
Selling and administrative expense	$	478.4		$	564.5		$	(86.1	)	(15.3)	$	933.7	$	761.2	$	172.5		22.7
Research, development and engineering expense	93.6			92.2			1.4			1.5	155.5		110.2		45.3			41.1
Impairment of assets	2.1			72.0			(69.9		)	(97.1)	3.1		9.8		(6.7		)	(68.4)
Gain on sale of assets, net	(12.9		)	(2.4		)	(10.5		)	N/M
Loss on sale of assets, net											1.0		0.3		0.7			N/M
Total operating expenses	$	561.2		$	726.3		$	(165.1	)	(22.7)	$	1,093.3	$	881.5	$	211.8		24.0

The ~~decrease in~~ selling and administrative expense ~~resulted primarily~~in 2017 increased $172.5 inclusive of incremental expenses from the Acquisition of $272.4 and a net unfavorable currency impact of $17.9. Excluding the impact of currency and the Acquisition, selling and administrative expense decreased $117.8 from the overall cost reductions tied to DN2020 as well as lower non-routine ~~expense~~ and restructuring ~~charges, savings realized from~~costs and lower incentive compensation expense related to the Company's ~~continued focus on cost structure~~annual incentive plans.

Selling and ~~favorable currency impact, partially offset by the reinvestment of the Company’s savings into transformation initiatives. Non-routine~~administrative non-routine expenses ~~of $9.2~~were $175.4 and ~~$128.7 were included~~$150.8 in ~~2014~~2017 and ~~2013,~~2016, respectively. The primary components of the ~~2013~~ non-routine ~~expense were a $67.6 non-cash pension charge, additional losses~~expenses in 2017 pertained to acquisition and divestiture costs, including related integration activities, totaling $85.0, purchase accounting adjustments of ~~$28.0~~$85.0 related to ~~the settlement of the Foreign Corrupt Practices Act (FCPA) investigation, $17.2 related to the settlement of the securities class action lawsuit~~intangible asset amortization and executive severance ~~costs~~ of ~~$9.3.~~$5.4. The year-over-year increase was primarily related to incremental purchase accounting and integration expenses offset by a decrease in legal, acquisition and divestiture costs. Selling and administrative expense ~~also~~ included ~~$9.7 and $20.3 of~~ restructuring charges of $21.3 and $28.8 in ~~2014~~2017 and ~~2013,~~2016, respectively. Restructuring charges in 2014 and 2013 related to the Company's multi-year realignment plan. Excluding non-routine expenses and restructuring charges, selling and administrative expense increased $43.9, which is nearly flat as a percentage of net sales in 2014 compared to the prior year. The increase in selling and administrative expense primarily relates to incremental commission expense and investments related to our back office transformation.

Research, development and engineering expense increased $45.3 due to incremental expense associated with the Acquisition of $62.7. Excluding the incremental impact of the Acquisition, expense was favorably impacted by the benefits of streamlining the cost structure as ~~a percent~~part of ~~net sales~~the Company's integration activities. Research, development and engineering expense included restructuring reversals of $1.1 in ~~2014 and 2013 were relatively flat. The~~2017 compared to $5.1 of restructuring costs in 2016.

In 2017, the Company ~~increased investment in 2014~~recorded impairments totaling $3.1 related to ~~development efforts to support the Company's innovation in future products, which was offset by restructuring charges of $6.0 incurred in 2013.~~IT transformation and integration activities.

The Company performed an other-than-annual assessment for its Brazil reporting unit in the third quarter of 2013 based on a two-step impairment test and concluded that the goodwill within the Brazil reporting unit was partially impaired. The Company recorded a $70.0 pre-tax, non-cash goodwill impairment charge in the third quarter of 2013 due to deteriorating macro-economic outlook, structural changes to an auction-based purchasing environment and new competitors entering the market.

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)

~~During~~In 2017, the ~~second quarter~~loss on sale of ~~2014,~~assets was primarily related to the ~~Company divested Eras within~~divestiture of the ~~NA segment, resulting~~Company's electronic security (ES) business in Chile and from building closures in EMEA due to integration efforts. These losses were partially offset by a gain on sale of assets primarily related to the Company's divestiture of ~~$13.7. During~~its business in the ~~first quarter~~U.K. and its ES business in Mexico.

Operating expense as a percent of ~~2013,~~net sales in 2017 was 23.7 percent compared with 26.6 percent in 2016 due to increased revenue and overall cost reductions tied to DN2020 which more than offset the ~~Company recognized a gain on assets of $2.2 resulting~~incremental operating costs from the ~~sale of certain U.S. manufacturing operations to a long-time supplier.~~

Acquisition.

Operating Profit (Loss)

The following table represents information regarding our operating profit (loss) for the years ended December 31:

2014 2013 $ Change % Change
Operating profit (loss) $ 165.0
$ (140.3 ) $ 305.3
N/M
Operating profit (loss) margin 6.0 % (5.4 )%



	2017			2016			$ Change		% Change
Operating loss	$	(93.5	)	$	(169.8	)	$	76.3	(44.9)
Operating margin	(2.0		)%	(5.1		)%

The operating loss decreased in 2017 compared to 2016 primarily due to higher gross margin that more than offset an increase in operating ~~profit (loss) resulted from a reduction in operating~~ expense, ~~mainly due~~which included amortization of acquired intangible assets, restructuring and non-routine costs related to ~~lower non-routine~~acquisitions and restructuring charges. Operating profit also improved in total margin and higher product sales, offset in part by higher spend partially attributable to reinvestment of the Company’s savings into transformation strategies.

divestitures.

Other Income (Expense) ~~Income~~

The following table represents information regarding our other income (expense) ~~income~~ for the years ended December 31:

2014 2013 $ Change % Change
Investment income $ 34.5
$ 27.6
$ 6.9
25.0
Interest expense (31.4 ) (29.2 ) (2.2 ) 7.5
Foreign exchange (loss) gain, net (11.8 ) 0.2
(12.0 ) N/M
Miscellaneous, net (1.6 ) (0.1 ) (1.5 ) N/M
Other (expense) income $ (10.3 ) $ (1.5 ) $ (8.8 ) N/M



	2017			2016			$ Change			% Change
Interest income	$	20.3		$	21.5		$	(1.2	)	(5.6)
Interest expense	(117.3		)	(101.4		)	(15.9		)	15.7
Foreign exchange loss, net	(3.9		)	(2.1		)	(1.8		)	(85.7)
Miscellaneous, net	2.5			3.1			(0.6		)	(19.4)
Other income (expense)	$	(98.4	)	$	(78.9	)	$	(19.5	)	24.7

The ~~increase~~decrease in ~~investment~~interest income in 2017 compared towith 2016 was a result of lower interest income of the ~~prior year was driven by LA due to leasing portfolio growth~~Company's marketable securities, which were primarily held for cash management in Brazil. ~~The foreign~~Interest expense was higher in 2017 associated with the financing required for the Acquisition, offset by improved interest rates from the Company's repricing certain of its debt in May 2017. Foreign exchange loss, ~~for 2014~~net in 2017 was unfavorable as a result of the incremental impact of the Acquisition. Miscellaneous, net in 2016 included a mark-to-market net gain of $9.2 associated with the Company's foreign currency option contracts entered and ~~the~~ foreign ~~exchange gain~~currency forward contract and $6.3 in ~~2013 included losses of $12.1 and $1.6, respectively,~~financing fees related to the ~~devaluation of the Venezuelan currency.~~

~~Income from Discontinued Operations, Net of Tax~~

~~Income from discontinued operations, net of tax was $9.7 and $13.7~~Company’s bridge financing required for the years ended December 31, 2014 and 2013, respectively. The operating results for the electronic security business were previously included in the Company's NA segment and have been reclassified to discontinued operations for all of the periods presented. Additionally, the assets and liabilities of this business are classified as held for sale in the Company's consolidated balance sheet for all of the periods presented.

Acquisition.

Income (Loss) from Continuing Operations, Net of Tax

The following table represents information regarding our income (loss) from continuing operations, net of tax, for the years ended December 31:

2014 2013 $ Change % Change
Income (loss) from continuing operations, net of tax $ 107.3
$ (190.2 ) $ 297.5
N/M
Percent of net sales 3.9 % (7.4 )%

Effective tax rate 30.6 % (34.1 )%



	2017			2016			$ Change			% Change
Loss from continuing operations, net of tax	$	(213.9	)	$	(179.3	)	$	(34.6	)	19.3
Percent of net sales	(4.6		)%	(5.4		)%
Effective tax rate (benefit)	14.7		%	(27.7		)%

Loss from continuing operations, net of tax was $213.9. This was primarily due to the reasons described above and the change in income tax (benefit) expense.

The ~~increase in net~~effective tax rate for 2017 was 14.7 percent on the overall loss from continuing operations. The Tax Act changed many aspects of U.S. corporate income ~~was driven by higher operating profit related mainly to significantly lower non-routine~~taxation and ~~restructuring expense, an improvement in service margin and higher product sales. These benefits were offset in part by higher spend partially attributable to reinvestment~~included a reduction of the ~~Company’s savings into transformation initiatives~~corporate income tax rate from 35 percent to 21 percent, implementation of a territorial tax system and ~~unfavorable other (expense) income in 2014~~imposition of a tax on deemed repatriated earnings of foreign subsidiaries. The resulting ~~from foreign exchange loss due~~impact to the ~~devaluation~~Company is an estimated $45.1 reduction to deferred income taxes for the income tax rate change and an estimated one-time, non-cash charge of ~~the Venezuelan currency.~~$36.6 related to deferred foreign earnings.

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)

The ~~negative~~effective tax rate benefit for ~~2013 is a result~~2016 of ~~tax expense of approximately $55.0 related to~~27.7 percent on the ~~repatriation of previously undistributed earnings and~~overall loss from continued operations. The benefit on the ~~establishment of a valuation allowance of approximately $39.2 on deferred tax assets in the Company's Brazil manufacturing facility. The 2013 tax rate~~overall loss was ~~also~~ negatively impacted by the ~~partially~~Acquisition including a valuation allowance for certain post-acquisition losses and non-deductible ~~goodwill impairment~~acquisition related toexpenses. The overall effective tax rate was decreased further by the ~~Brazil reporting unit~~jurisdictional income (loss) and varying respective statutory rates within the acquired entities.

Equity in (loss) earnings of unconsolidated subsidiaries, net consisted primarily of income from the Aisino and Inspur strategic alliances in China.

Income from Discontinued Operations, Net of Tax

The closing of the NA ES divestiture occurred on February 1, 2016 and the ~~FCPA penalty charge.~~

Company recorded a gain (loss) on sale, net of tax, of $145.0 in 2016. Additionally, the income from discontinued operations, net of tax includes a net loss of $1.3 as a result of the operations included through February 1, 2016.

Segment Revenue and Operating Profit Summary

The following tables represent information regarding our revenue and operating profit by reporting segment for the years ended December 31:


North America:	2014			2013			$ Change			% Change
Revenue	$	1,091.4		$	1,140.2		$	(48.8	)	(4.3)
Eurasia Banking:											2017			2016			$ Change		% Change
Net sales											$	1,903.4		$	1,232.6		$	670.8	54.4
Segment operating profit	$	266.3		$	232.4		$	33.9		14.6	$	126.8		$	88.2		$	38.6	43.8
Segment operating profit margin	24.4		%	20.4		%					6.7		%	7.2		%

~~NA revenue~~Eurasia Banking net sales increased $670.8, which included incremental net sales from the Acquisition of $756.7, a net favorable currency impact of $40.9 mainly related to the euro and higher Deferred Revenue Adjustments of $8.5. Excluding the impact of the Acquisition, currency and Deferred Revenue Adjustments, net sales decreased $118.3 due mostly to lower banking product project activity in EMEA as well as unfavorable structural changes in the Asia Pacific market, partially offset by higher managed services net sales in Asia Pacific.

Segment operating profit increased $38.6 including an incremental impact from the Acquisition of $98.7 in 2017. Excluding the incremental portion from the Acquisition, operating profit decreased $60.1 in 2017 mostly from lower product gross profit driven by declined project activity as well as unfavorable structural changes in the Asia Pacific market and higher operating expense. The unfavorable product gross profit and operating expense was partially offset by higher software and services gross profit.

Segment operating profit margin decreased due ~~to lower FSS sales resulting from decreased volume~~ in ~~the U.S. national bank sector partially due~~part to the impact of the Acquisition, which utilizes a ~~large non-recurring project~~higher third-party labor model to support its service and software revenue stream, resulting in ~~the prior year, offset~~a dilutive effect on margins in part by improvement between years in the U.S. regional bank business and Canada. NA revenue also declined due to lower physical security sales between years. Operating profit increased despite the net sales decline due to an improvement in service margin primarily driven by lower employee-related expense resulting from restructuring initiatives in addition to the ongoing benefit from the Company's pension freeze and voluntary early retirement program.

2017.


Asia Pacific:	2014			2013			$ Change		% Change
Revenue	$	500.3		$	479.1		$	21.2	4.4
Americas Banking:										2017			2016			$ Change			% Change
Net sales										$	1,525.6		$	1,567.3		$	(41.7	)	(2.7	)
Segment operating profit	$	66.4		$	62.8		$	3.6	5.7	$	68.1		$	101.8		$	(33.7	)	(33.1	)
Segment operating profit margin	13.3		%	13.1		%				4.5		%	6.5		%

~~AP revenue in 2014~~Americas Banking net sales decreased $41.7, which included incremental net ~~unfavorable~~sales from the Acquisition of $79.7 and a net favorable currency impact of ~~$14.1. Including~~$15.7 mostly related to the Brazil real. Excluding the impact of ~~foreign~~the Acquisition, currency ~~revenue~~and Deferred Revenue Adjustments, net sales decreased $137.1 mostly attributable to decreased product volumes, primarily in ~~2014 compared to 2013 increased mainly from growth~~Mexico, North America and Brazil, as well as the run-off of multi-vendor service contracts in India, China and the Philippines partially offset by a decrease in Indonesia because of a large order in 2013. Operating profit increased due to higher volume and improved margin performance in the region partially offset by higher operating expense.North America.

Europe, Middle East and Africa: 2014 2013 $ Change % Change
Revenue $ 421.2
$ 362.2
$ 59.0
16.3
Segment operating profit $ 61.4
$ 44.0
$ 17.4
39.5
Segment operating profit margin 14.6 % 12.1 %

~~EMEA revenue increased primarily from higher sales volume in Western Europe and Africa. The acquisition of Cryptera in the third quarter of 2014 resulted in incremental revenue and~~Segment operating profit ~~of $14.9 and $1.2, respectively.~~decreased $33.7 in 2017. The ~~overall volume increase led to product gross margin expansion driving~~incremental portion from the ~~improvement~~Acquisition accounted for $23.6 in segment operating profit ~~compared to~~in 2017. Excluding the ~~prior year.~~

Latin America: 2014 2013 $ Change % Change
Revenue $ 721.9
$ 601.1
$ 120.8
20.1
Segment operating profit $ 68.7
$ 41.5
$ 27.2
65.5
Segment operating profit margin 9.5 % 6.9 %

LA revenue increased in 2014 compared to 2013, including a net unfavorable currency impact of $29.1. The constant currency revenue improvement related to lottery sales volume and deliveries of IT equipment toincremental portion from the ~~education ministry in the first quarter of 2014 partially offset by a decrease in FSS volume and elections systems sales. Operating~~Acquisition, operating profit ~~increased~~decreased $57.3 mostly from lower services gross profit as a result of contract maintenance revenue declines combined with increased labor investments in addition to decreased product installation volume. The labor investments are a result of higher turnover rates of technicians and the ~~higher~~associated training to support additional product ~~sales volume, the benefit from certain contractual provisions in Venezuela that settled in the year ended December 31, 2014 and a gain in service margin primarily in Brazil. This was~~lines partially offset by ~~an increase in~~lower operating expenses ~~and a lower of~~from cost ~~or market adjustment of $4.1 in 2014 as a result~~saving initiatives

Segment operating profit margin decreased due to higher services cost, partially offset by the positive impact of the ~~Venezuelan currency devaluation.~~Acquisition.

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)



Retail:	2017			2016			$ Change		% Change
Net sales	$	1,180.3		$	516.4		$	663.9	128.6
Segment operating profit	$	87.9		$	34.0		$	53.9	158.5
Segment operating profit margin	7.4		%	6.6		%

Retail net sales increased $663.9, which included incremental net sales from the Acquisition of $681.3, a net favorable currency impact of $31.7 mainly related to the Brazil real and higher Deferred Revenue Adjustments of $5.7. Excluding the impact of the Acquisition, currency and Deferred Revenue Adjustments, net sales decreased $43.4, mostly from lower voting machine volume in Brazil, partially offset by increased services and software revenue in EMEA and higher product volume and the associated services in Asia Pacific.

Segment operating profit increased $53.9 in 2017. The incremental portion from the Acquisition accounted for $55.7 in segment operating profit in 2017. Excluding the incremental portion from the Acquisition, operating profit decreased $1.8 due to slightly higher operating expenses, partially offset by higher services gross profit from the Eurasia non-core business.

Segment operating profit margin increased due primarily to the positive impact of the Acquisition in 2016.

Refer to note 20 ~~to the consolidated financial statements, which is contained in Item 8 of this annual report on Form 10-K,~~ for further details of segment revenue and operating profit.

LIQUIDITY AND CAPITAL RESOURCES

Capital resources are obtained from income retained in the business, borrowings under the Company’s senior notes, committed and uncommitted credit facilities and operating and capital leasing arrangements. Management expects that the Company’s capital resources will be sufficient to finance planned working capital needs, ~~research and development~~R&D activities, investments in facilities or equipment, pension contributions, the payment of guaranteed dividends ~~on the Company’s common shares~~ and any repurchases of the Company’s common shares for at least the next 12 months. The Company had $105.3 and $8.0 of restricted cash at December 31, 2018 and 2017, respectively, primarily related to the acquisition of the remaining shares in Diebold Nixdorf AG. At December 31, ~~2015, $326.5~~2018, $386.6 or ~~92.4~~94.8 percent of the Company’s cash and cash equivalents and short-term investments reside in international tax jurisdictions. Repatriation of ~~these~~certain international held funds could be negatively impacted by potential payments for certain foreign ~~and domestic taxes, excluding $107.1 that is~~taxes. The Company has earnings in certain jurisdictions available for repatriation of $1,364.3 with no additional tax expense ~~because the Company has already provided for such taxes. Part~~primarily as a result of the ~~Company’s growth strategy is to pursue strategic acquisitions.~~Tax Act. The Company has made acquisitions in the past and ~~intends to~~may make acquisitions in the ~~future, including~~future. Part of the ~~potential acquisition of Wincor Nixdorf.~~Company's strategy is to optimize the business portfolio through divestitures and complementary acquisitions. The Company intends to finance any future acquisitions with ~~either~~ cash and short-term investments, cash provided from operations, borrowings under available credit facilities, proceeds from debt or equity offerings and/or the issuance of common shares. The Company intends to finance the cash portion of the purchase price as well as any Wincor Nixdorf debt outstanding under our revolving and term loan credit agreement entered into on December 23, 2015 and bridge agreement entered into on November 23, 2015.

The Company's ~~global liquidity~~total cash and cash availability as of December 31, ~~2015~~2018 and ~~2014~~2017 was as follows:

2015 2014
Cash and cash equivalents $ 313.6
$ 326.1
Additional cash availability from
Short-term uncommitted lines of credit 69.0
115.2
Five-year credit facility 352.0
280.0
Short-term investments 39.9
136.7
Total global liquidity $ 774.5
$ 858.0



	2018		2017
Cash and cash equivalents (excluding restricted cash)	$	353.1	$	535.2
Additional cash availability from:
Uncommitted lines of credit	28.0		216.9
Revolving facility	347.5		445.0
Short-term investments	33.5		81.4
Total cash and cash availability	$	762.1	$	1,278.5

The following table summarizes the results of our consolidated statement of cash flows for the years ended December 31:


Net cash flow provided by (used in)	2015			2014			2013			2018			2017			2016
Operating activities - continuing operations	$	31.6		$	189.1		$	122.9		$	(104.1	)	$	37.1		$	39.3
Investing activities - continuing operations	(62.4		)	15.1			(51.1		)	34.4			(120.8		)	(923.3		)
Financing activities - continuing operations	42.2			(81.2		)	(204.5		)	10.9			(63.7		)	881.3
Discontinued operations, net	2.6			(3.5		)	(0.3		)	—			—			351.3
Effect of exchange rate changes on cash and cash equivalents	(23.9		)	(28.2		)	(5.1		)
Net (decrease) increase in cash and cash equivalents	$	(9.9	)	$	91.3		$	(138.1	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash										(18.7		)	37.9			(8.0		)
Net increase (decrease) in cash, cash equivalents and restricted cash										$	(77.5	)	$	(109.5	)	$	340.6

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, 2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(in millions, except per share amounts)

During 2018, cash, cash equivalents and restricted cash decreased $77.5 primarily due to operating activities as well as payments of $47.2, $62.1, $129.6 and $64.9 for integration initiatives, restructuring programs, interest on debt and income taxes, respectively. These uses were offset by the cash provided by financing and investing activities related to the proceeds received from the Term A-1 Loan Facility and proceeds from the monetization of the company owned life insurance plans.

Operating Activities. Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities, pension funding and other items impact reported cash flows. Net cash ~~provided~~used by operating activities was ~~$31.6~~$104.1 for the year ended December 31, ~~2015,~~2018, a decrease of ~~$157.5~~$141.2 from ~~$189.1~~$37.1 cash provided for the year ended December 31, ~~2014.~~2017. The overall ~~decline~~decrease was primarily due to ~~lower income~~deferred revenue and finance receivables combined with an increased operating loss primarily from ~~continuing operations, higher~~integration initiatives and restructuring programs. These decreases were partially offset by lower working capital ~~and reductions in deferred revenue.~~balances. Additional detail is included below:

Cash flows from continuing operating activities during the year ended December 31, ~~2015~~2018 compared to the year ended December 31, ~~2014~~2017 were ~~negatively~~ impacted by a $~~47.8~~352.1 ~~decrease~~increase in ~~income~~loss from continuing operations, net of ~~tax, primarily related~~tax. Refer to ~~the aforementioned market-specific economic and political factors affecting the purchasing environment in Brazil, bad debt and inventory reserve increases related to the cancellation~~Results of ~~certain projects in connection with the current Brazil economic and political environment,~~ ~~$18.9~~ impairment of assets, the adverse impact of foreign currency compared to the same period of 2014, and the gain on sale of assets of $13.7 in the second quarter of 2014 which resulted from the Company's divestiture of its Eras subsidiary. The decrease in share-based compensation expense to ~~$12.4~~ ~~in 2015 from~~ ~~$21.5~~ ~~in 2014 was primarily due to changes in the assumptions related to performance shares. The impairment of assets, primarily in the first quarter of 2015, related to the sale~~Operations discussed above for further discussion of the Company's ~~equity interest in Venezuela as well as impairment~~loss from continuing operations, net of ~~redundant legacy Diebold internally-developed software as a result of the acquisition of Phoenix.~~tax.

~~Table of Contents~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS as of December 31, 2015~~

~~DIEBOLD, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

~~(dollars in millions, except per share amounts)~~

~~Accounts receivable and inventory used an~~The net aggregate of ~~$107.6~~trade accounts receivable, inventories and accounts payable provided $11.4 and $39.4 in operating cash flows during the year ended December 31, ~~2015~~2018 and 2017, respectively. The decrease is primarily a result of increased cash utilization by accounts payable as a result of critical supplier payments that were made in the current year caused by reduced terms and vendor collection efforts in the second half of the year. Inventory cash use increased compared to the ~~$81.0 during~~prior year due to increased build up of inventory to satisfy various customer demand. Partially offsetting the ~~year ended~~ ~~December 31, 2014. The $26.6~~changes in inventory and accounts payable, the increase in cash provided by trade receivables was primarily related to ~~an increase~~higher cash collected in ~~accounts receivable related to unbilled work which impacted~~connection with the ~~timing of cash collections and a build up in inventory related to securing multi-vendor services contracts in North America.~~Company's DN Now working capital management initiative.

Deferred revenue used $~~14.7~~42.4 of operating cash during the year ended December 31, ~~2015~~2018, compared to a $~~50.7~~26.0 ~~provided~~provide in the year ended December 31, ~~2014~~2017. The decrease in cash flow associated with deferred revenue is ~~due~~related to ~~a reduction of~~lower customer prepayments primarily in ~~China, received from customers on service contracts and product sales~~the Americas compared to the ~~same period of 2014 and higher installations in 2015.~~prior year as certain customers switched from a yearly prepayment to quarterly or monthly installments.

The aggregate of ~~refundable~~income taxes and deferred income taxes used $~~46.4~~61.3 of operating cash during the year ended December 31, ~~2015~~,2018, compared to $~~1.7~~22.1 used in ~~2014. This increase~~2017. Refer to note 4 for additional discussion on income taxes.

In the aggregate, the other combined certain assets and liabilities used $23.5 and $89.2 in ~~cash used~~2018 and 2017, respectively. The decreased use of $65.7 in ~~operating activities is a result of~~2018 primarily due to lower payments related to restructuring and integration and the timing of ~~cash~~ payments ~~for income taxes~~ related to ~~2014~~VAT and deferred costs. These decreases were partially offset by non-cash changes in accruals for cash compensation plans and insurance.

The most significant changes in adjustments to net income include the ~~increase~~goodwill impairment and non-routine inventory charge. The goodwill impairment of $217.5 in ~~deferred tax assets related~~2018 compared to ~~foreign tax credits~~$3.1 asset impairment in 2017. The inventory charge of $74.5 in 2018 relates to the Company's focus on streamlining its product portfolio and ~~credits related to research and development activities primarily~~harvesting inventory resulting in the ~~U.S.~~increased non-cash inventory charge. Other significant items include depreciation and amortization expense and additional share-based compensation expense.

Investing Activities. Net cash ~~used in~~provided by investing activities was ~~$62.4~~$34.4 for the year ended December 31, ~~2015~~2018 compared to net cash ~~provided by~~used in investing activities of ~~$15.1~~$120.8 for the year ended December 31, ~~2014.~~2017. The ~~$77.5~~$155.2 change was primarily due to the monetization of the Company's investment in the company owned life insurance plans, utilization of short-term investments in Brazil for cash needs across the organization and a decrease in cash spent on capital expenditures. The maturities and purchases of investments primarily related to ~~a $37.7 decrease in net~~short-term investment activity ~~primarily~~ in Brazil ~~which is primarily used to fund~~and for 2017 also include the ~~repayment of our offshore debt, a decrease of $13.4~~Company's investment in Kony. The proceeds from the sale of assets ~~related to~~primarily include cash from the sale of ~~Eras~~a building in North America for 2018 and divestitures of the legacy Diebold business in the ~~second quarter of 2014,~~U.K. and ~~a $47.7 increase~~the ES businesses located in ~~cash payments related to the acquisitions. These were partially offset by a decrease of $7.8~~Mexico and Chile in ~~capital expenditures related to capital reinvestment in Diebold’s transformation strategy to $52.3 for the year ended December 31, 2015 from $60.1 for the year ended December 31, 2014.~~2017.

The Company anticipates capital expenditures of approximately ~~$40.0 related primarily~~$80 in 2019 to be utilized for improvements to the ~~completion of~~Company's product line. Currently, the reinvestment of capital in connection with the Diebold transformation strategy, which is expected to culminate in 2016. These capital expenditures will be expended primarily in North America. Currently, we financeCompany finances these investments primarily with funds provided by income retained in the business, borrowings under ~~Diebold’s~~the Company's committed and uncommitted credit facilities, and operating and capital leasing arrangements.

Financing Activities. Net cash provided by financing activities was ~~$42.2~~$10.9 for the year ended December 31, ~~2015~~2018 compared to net cash used inby financing activities of ~~$81.2~~$63.7 for the year ended ~~2014, an increase~~2017, a change of ~~$123.4.~~$74.6. The increase was primarily due to ~~a $134.2 change~~an additional $650.0 in ~~debt borrowing net of repayments, including associated debt issuance costs, year-over-year as a result of funding the $75.6 in dividend payments and the Phoenix acquisition with borrowings~~proceeds received from the ~~credit facility,~~Term Loan A-1 Facility and an increase in net borrowings of the Revolving Facility. The increase in borrowings were partially offset by ~~a decrease of $11.1~~$337.7 in debt repayments and higher cash distributions primarily related to the ~~issuance~~redemption of ~~common shares.~~shares and cash compensation to Diebold Nixdorf AG minority shareholders of $377.2 compared to $17.6 in 2017. Refer to note 11 for details of the Company's cash flows related to debt borrowings and repayments.

~~Effect~~

Table of ~~exchange rate changes on cash and cash equivalents was negatively impacted by $9.5 and $6.1 related to the currency devaluation in Venezuela for the years ended~~Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015 and 2014.~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(in millions, except per share amounts)

Benefit Plans. The Company ~~is not currently planning~~plans to ~~contribute~~make contributions to its ~~pension~~retirement plans ~~during~~as well as benefits payments directly from the Company of approximately $50 for the year ~~ending~~ended December 31, ~~2016.~~2019. The Company anticipates reimbursement of approximately $13 for certain benefits paid from its trustee in 2019. Beyond ~~2016,~~2019, minimum statutory funding requirements for the Company's U.S. pension plans may become more significant. The actual amounts required to be contributed are dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory actions related to pension funding obligations. The Company has adopted a pension investment policy designed to achieve an adequate funded status based on expected benefit payouts and to establish an asset allocation that will meet or exceed the return assumption while maintaining a prudent level of risk. The plan's target asset allocation adjusts based on the plan's funded status. As the funded status improves or declines, the debt security target allocation will increase and decrease, respectively. Management monitors assumptions used for our actuarial projections as well as any funding requirements for the plans.

Payments due under the Company's other post-retirement benefit plans are not required to be funded in advance. Payments are made as medical costs are incurred by covered retirees and are principally dependent upon the future cost of retiree medical benefits under these plans. The Company expects the other post-retirement benefit plan payments to be approximately ~~$1.4~~$1 in ~~2016 (refer~~2019. Refer to note ~~13 to the consolidated financial statements, which is contained in Item 8 of this annual report on Form 10-K,~~15 for further discussion of the Company's pension and other post-retirement benefit ~~plans).~~

Dividends. The Company paid dividends of ~~$75.6, $74.9~~$7.7, $30.6 and ~~$74.0~~$64.6 in the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively. Annualized dividends per share were ~~$1.15~~$0.10, $0.40 and $0.96 for ~~each of~~ the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013. The~~

~~Table of Contents~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS as of December 31, 2015~~

~~DIEBOLD, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

~~(dollars in millions, except per share amounts)~~

~~first quarterly dividend of~~ 2016, ~~is 28.75 cents per share. The~~respectively. In May 2018, the Company announced ~~during the fourth quarter of 2015,~~ its ~~intention~~decision to ~~pay a~~reallocate future dividend ~~at a rate less than the Company's current annual dividend rate, following the close of the potential business combination with Wincor Nixdorf.~~funds towards debt reduction and other capital resource needs.

Contractual Obligations. The following table summarizes the Company’s approximate obligations and commitments to make future payments under contractual obligations as of December 31, ~~2015:~~2018:


			Payment due by period										Payment due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt	$	645.1	$	207.0	$	51.6	$	386.5	$	—
Interest on debt ⁽¹⁾	49.8		14.8		20.4		14.6		—
Short-term uncommitted lines of credit ⁽¹⁾											$	20.9	$	20.9	$	—	$	—	$	—
Long-term debt											2,293.5		28.6		464.7		1,400.2		400.0
Interest on debt ⁽²⁾											1,002.5		175.3		396.9		369.2		61.1
Diebold Nixdorf AG minority shareholders cash compensation											3.4		3.4		—		—		—
Redeemable noncontrolling interest of DN AG minority shareholders ⁽³⁾											99.1		99.1		—		—		—
Minimum operating lease obligations	128.1		43.4		47.8		24.2		12.7		223.8		81.4		93.5		40.3		8.6
Purchase commitments	9.3		9.3		—		—		—		8.9		5.3		3.6		—		—
Deal related costs	29.0		29.0		—		—		—
Total	$	861.3	$	303.5	$	119.8	$	425.3	$	12.7	$	3,652.1	$	414.0	$	958.7	$	1,809.7	$	469.7

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of December 31, ~~2015~~2018

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(~~dollars~~ in millions, except per share amounts)

FORWARD-LOOKING STATEMENT DISCLOSURE

In this annual report on Form 10-K, statements that are not reported financial results or other historical information are “forward-looking statements.” Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements include, but are not limited to, statements regarding the ~~Business Combination, its financing of the Business Combination, its~~Company's expected future performance (including expected results of operations and financial guidance)~~, and the Company’s~~ future financial condition, operating results, strategy and plans. Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “will,” “believes,” “estimates,” “potential,” “target,” “predict,” “project,” “seek,” and variations thereof or similar expressions. These statements are used to identify forward-looking statements. These forward-looking statements reflect the current views of the Company with respect to future events and involve significant risks and uncertainties that could cause actual results to differ materially.

Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, the economy, its knowledge of its business, and on key performance indicators that impact the Company, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements. ~~The Company is not obligated to update forward-looking statements, whether as a result of new information, future events or otherwise.~~

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:

the ~~Company’s ability to successfully consummate~~ultimate impact of the ~~Business Combination, including obtaining~~DPLTA with Diebold Nixdorf AG and ~~consummating~~ the ~~necessary financing, hedging transactions and satisfying closing conditions;~~outcome of the appraisal proceedings initiated in connection with the implementation of the DPLTA;

the ultimate outcome and results of integrating the operations of the Company and ~~Wincor~~Diebold Nixdorf AG;

the Company's ability to achieve benefits from its cost-reduction initiatives and other strategic initiatives, such as DN Now, including its planned restructuring actions, as well as its business process outsourcing initiative;

the Company's ability to comply with the covenants contained in the agreements governing its debt;

the ultimate outcome of the Company’s pricing, operating and ~~operating strategy~~tax strategies applied to ~~Wincor~~Diebold Nixdorf AG and the ultimate ability to realize ~~synergies;~~

~~the effects of the Business Combination, including the Company’s future financial condition, operating results, strategy~~cost reductions and ~~plans;~~

~~the effects of governmental regulation on the Company’s businesses or potential business combination transactions;~~

~~the ability to obtain regulatory approvals and meet other conditions to the Business Combination on a timely basis;~~

~~the success of the Company’s strategic business alliance with Securitas AB;~~synergies;

the Company's ability to ~~extract costs related to~~successfully operate its ~~electronic security business from its ongoing operations;~~

~~competitive pressures, including pricing pressures and technological developments;~~

~~changes~~strategic alliances in ~~the Company’s relationships with customers, suppliers, distributors and/or partners in its business ventures;~~China;

changes in political, economic or other factors such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the worldwide business in each of the Company's operations;

the Company’s ~~operations;~~reliance on suppliers and any potential disruption to the Company’s global supply chain;

~~global~~the impact of market and economic conditions economic conditions, including any additional deterioration and ~~disruptions~~disruption in the financial and service markets, including the bankruptcies, restructurings or consolidations of financial institutions, which could reduce ~~the Company’s~~our customer base and/or adversely affect ~~its customers’~~our customers' ability to make capital expenditures, as well as adversely impact the availability and cost of credit;

interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;

the acceptance of the ~~Company’s~~Company's product and technology introductions in the marketplace;

competitive pressures, including pricing pressures and technological developments;

changes in the Company's relationships with customers, suppliers, distributors and/or partners in its business ventures;

the effect of legislative and regulatory actions in the U.S. and internationally and the Company’s ability to comply with government regulations;

the impact of a security breach or operational failure on the Company's business;

the Company's ability to successfully integrate other acquisitions into its operations;

the Company's success in divesting, reorganizing or exiting non-core and/or non-accretive businesses;

the Company's ability to maintain effective internal controls;

changes in the ~~Company’s~~Company's intention to further repatriate cash and cash equivalents and short-term investments residing in international tax jurisdictions, which could negatively impact foreign and domestic taxes;

unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or ~~assessments, including, but not limited to, the Company’s Brazil tax dispute;~~

~~variations in consumer demand for FSS technologies, products and services;~~

~~potential security violations to the Company’s information technology systems;~~assessments;

the investment performance of the ~~Company’s~~Company's pension plan assets, which could require the Company ~~and~~ to increase its pension contributions, and significant changes in healthcare costs, including those that may result from government action; and

the amount and timing of repurchases of the Company's common shares, if ~~any;~~

the Company's ability to achieve benefits from its cost-reduction initiatives and other strategic changes, including its multi-year realignment plan and other restructuring actions, as well as its business process outsourcing initiative; and

~~the risk factors described above under "Part I - Item 1A - Risk Factors” of this Form 10-K.~~any.

Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

~~Table of Contents~~

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

(dollars in millions, except per share amounts)

The Company's Venezuelan operations consisted of a fifty-percent owned subsidiary, which was consolidated. Venezuela financial results were measured using the U.S. dollar as its functional currency because its economy is considered highly inflationary. On March 24, 2014, the Venezuelan government announced a currency exchange mechanism, SICAD 2, which yielded an exchange rate significantly higher than the rates established through the other regulated exchange mechanisms. Management determined that it was unlikely that the Company would be able to convert bolivars under a currency exchange other than SICAD 2. On March 31, 2014, the Company remeasured its Venezuelan balance sheet using the SICAD 2 rate of 50.86 compared to the previous official government rate of 6.30, resulting in a decrease of $6.1 to the Company’s cash balance and net losses of $12.1 that were recorded within foreign exchange (loss) gain, net in the consolidated statements of operations in the first quarter of 2014. In addition, as a result of the currency devaluation, the Company recorded a $4.1 lower of cost or market adjustment related to its service inventory within service cost of sales in the consolidated statements of operations in the first quarter of 2014. The Company's Venezuelan operations represented less than one percent of the Company's total assets as of December 31, 2014. On February 10, 2015, the Venezuela government introduced a new foreign currency exchange platform called the Marginal Currency System, or SIMADI, which replaced the SICAD 2 mechanism, yielding another significant increase in the exchange rate. As of March 31, 2015, management determined it was unlikely that the Company would be able to convert bolivars under a currency exchange other than SIMADI and remeasured its Venezuela balance sheet using the SIMADI rate of 192.95 compared to the previous SICAD 2 rate of 50.86, which resulted in a loss of $7.5 recorded within foreign exchange gain (loss), net in the condensed consolidated statements of operations in the first quarter of 2015.

As of March 31, 2015, the Company agreed to sell its equity interest in its Venezuela joint venture to its joint venture partner and recorded a $10.3 impairment of assets in the first quarter of 2015. On April 29, 2015, the Company closed the sale for the estimated fair market value and recorded a $1.0 reversal of impairment of assets based on final adjustments in the second quarter of 2015, resulting in a $9.3 impairment of assets for the six months ended June 30, 2015. During the remainder of 2015, the Company incurred an additional $0.4 related to uncollectible accounts receivable which is included in selling and administrative expenses on the consolidated statements of operations. The Company no longer has a consolidating entity in Venezuela but will continue to operate in Venezuela on an indirect basis.

The Company is exposed to foreign currency exchange rate risk inherent in its international operations denominated in currencies other than the U.S. dollar. A hypothetical 10 percent movement in the applicable foreign exchange rates would have resulted in an increase or decrease in ~~2015~~ ~~and~~ ~~2014~~2018 year-to-date operating profit of ~~approximately $5.0~~$11.1 and ~~$10.1, respectively.~~$9.1, respectively, and $21.8 and $17.8 for year-to-date 2017. The sensitivity model assumes an instantaneous, parallel shift in the foreign currency exchange rates. Exchange rates rarely move in the same direction. The assumption that exchange rates change in an instantaneous or parallel fashion may overstate the impact of changing exchange rates on amounts denominated in a foreign currency.

The Company’s risk-management strategy uses derivative financial instruments such as forwards to hedge certain foreign currency exposures. The intent is to offset gains and losses that occur on the underlying exposures with gains and losses on the derivative contracts hedging these exposures. The Company does not enter into derivatives for trading purposes. The Company’s primary exposures to foreign exchange risk are movements in the ~~euro/U.S.~~euro, GBP, Canada dollar, ~~U.S. dollar/~~Brazil ~~real/U.S. dollar~~real, Thailand baht, Mexico peso and ~~Chinese~~China yuan ~~renminbi/U.S. dollar. There were no significant changes in the Company’s foreign exchange risks in~~ ~~2015~~ ~~compared with~~ ~~2014~~.renminbi.

On November 23, 2015, the Company entered into foreign exchange option contracts to purchase $1,416.0 for €1,547.1 to hedge against the effect of exchange rate fluctuations on the euro denominated cash consideration related to the Business Combination and provide cash for working capital. T~~he cash component of the purchase price consideration approximates €1,162.2~~. The weighted average strike price is $1.09 per euro. These foreign exchange option contracts are non-designated and included in other current assets or other current liabilities based on the net asset or net liability position, respectively. Changes in foreign exchange rates between the U.S dollar and euro can create substantial gains and losses from the revaluation of the derivative instrument.

The Company manages interest rate risk with the use of variable rate borrowings under its committed and uncommitted credit facilities and interest rate swaps. Variable rate borrowings under the credit facilities totaled ~~$420.9~~$1,914.4 and ~~$280.4~~$1,504.0 of which ~~$25.0 and $50.0~~$400.0 were effectively converted to fixed rate using interest rate swaps at December 31, ~~2015~~2018 and ~~2014~~,2017, respectively. A one percentage point increase or decrease in interest rates would have resulted in an increase or decrease in interest expense of ~~approximately $4.0~~$14.6 and ~~$2.3~~$10.5 for ~~2015~~2018 and ~~2014~~,2017, respectively, including the impact of the swap agreements. The Company’s primary exposure to interest rate risk is movements in the LIBOR, which is consistent with prior periods.

~~Table of Contents~~

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



FINANCIAL STATEMENTS

	Reports of Independent Registered Public Accounting Firm	4844

	Consolidated Balance Sheets as of December 31, ~~2015~~2018 and ~~2014~~2017	5046

	Consolidated Statements of Operations for the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	5147

	Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	5248

	Consolidated Statements of Equity for the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	5349

	Consolidated Statements of Cash Flows for the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	5450

	Notes to the Consolidated Financial Statements	5652

~~Table of Contents~~

Report of Independent Registered Public Accounting Firm

~~The~~To the Shareholders and Board of Directors ~~and Shareholders~~

Diebold Nixdorf, Incorporated:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Diebold Nixdorf, Incorporated and subsidiaries (the Company) as of December 31, ~~2015~~2018 and ~~2014, and~~2017, the related consolidated statements of operations, comprehensive ~~loss,~~income (loss), equity, and cash flows for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2015. In connection with our audits of~~2018, and the related notes (collectively, the consolidated financial statements, we also have audited financial statement schedule, Schedule II “Valuation and Qualifying Accounts.” These consolidated financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)~~statements). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements ~~referred to above~~ present fairly, in all material respects, the financial position of ~~Diebold, Incorporated and subsidiaries~~the Company as of December 31, ~~2015~~2018 and ~~2014,~~2017, and the results of ~~their~~its operations and ~~their~~its cash flows for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2015,~~2018, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), ~~Diebold, Incorporated’s~~the Company’s internal control over financial reporting as of December 31, ~~2015,~~2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, ~~(COSO),~~ and our report dated ~~February 29, 2016,~~March 1, 2019, expressed an ~~unqualified~~adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for revenue recognition in 2018 due to the adoption of ASU 2014-09, Revenue from Contracts with Customers.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We or our predecessor firms have served as the Company’s auditor since 1965.

Cleveland, Ohio

~~February 29, 2016~~March 1, 2019

~~Table of Contents~~

Report of Independent Registered Public Accounting Firm

~~The~~To the Shareholders and Board of Directors ~~and Shareholders~~

Diebold Nixdorf, Incorporated:

Opinion on Internal Control Over Financial Reporting

We have audited Diebold ~~Incorporated’s~~Nixdorf, Incorporated and subsidiaries’ (the Company) internal control over financial reporting as of December 31, ~~2015,~~2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway ~~Commission (COSO). Diebold, Incorporated’s~~Commission. In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the consolidated financial statements), and our report dated March 1, 2019, expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses related to ineffective controls over information technology general controls related to user access, inventory valuation, and non-routine transactions have been identified and included in management’s assessment. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2018 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial ~~Reporting~~ ~~appearing under Item 9A(b) of the Diebold, Incorporated’s December 31, 2015 annual report on Form 10-K.~~Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~In our opinion, Diebold, Incorporated maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in~~ ~~Internal Control - Integrated Framework (2013)~~ ~~issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).~~

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Diebold, Incorporated and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the years in the three-year period ended December 31, 2015, and our report dated February 29, 2016, expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Cleveland, Ohio

~~February 29, 2016~~March 1, 2019

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in millions)


	December 31,						December 31,
	2015			2014			2018			2017
ASSETS
Current assets
Cash and cash equivalents	$	313.6		$	326.1
Cash, cash equivalents and restricted cash							$	458.4		$	543.2
Short-term investments	39.9			136.7			33.5			81.4
Trade receivables, less allowances for doubtful accounts of $31.7 and $20.9, respectively	413.9			403.3
Trade receivables, less allowances for doubtful accounts of $58.2 and $71.7, respectively							737.2			827.9
Inventories	369.3			374.7			610.1			714.5
Deferred income taxes	168.8			111.0
Prepaid expenses	23.6			21.2			57.4			65.7
Refundable income taxes	18.0			11.7
Current assets held for sale	148.2			106.2
Other current assets	148.3			164.6			306.8			247.5
Total current assets	1,643.6			1,655.5			2,203.4			2,480.2
Securities and other investments	85.2			83.6			22.4			96.8
Property, plant and equipment, net	175.3			165.7			304.1			364.5
Deferred income taxes							243.9			293.8
Goodwill	161.5			138.1			827.1			1,117.1
Deferred income taxes	65.3			86.5
Finance lease receivables	36.5			90.4
Customer relationships, net							533.1			633.3
Other intangible assets, net							91.5			140.5
Other assets	81.9			122.3			86.4			95.8
Total assets	$	2,249.3		$	2,342.1		$	4,311.9		$	5,222.0

LIABILITIES AND EQUITY
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable	$	32.0		$	25.6		$	49.5		$	66.7
Accounts payable	281.7			248.6			509.5			562.2
Deferred revenue	229.2			260.8			378.2			436.5
Payroll and other benefits liabilities	76.5			109.4			184.3			198.9
Current liabilities held for sale	49.4			39.1
Other current liabilities	287.0			344.3			446.9			531.4
Total current liabilities	955.8			1,027.8			1,568.4			1,795.7
Long-term debt	613.1			479.8			2,190.0			1,787.1
Pensions and other benefits	195.6			211.0
Post-retirement and other benefits	18.7			20.8
Pensions, post-retirement and other benefits							273.8			266.4
Deferred income taxes	1.9			6.5			221.6			287.1
Other liabilities	28.7			41.4			87.3			111.3
Commitments and contingencies
Redeemable noncontrolling interests							130.4			492.1
Equity
Diebold, Incorporated shareholders' equity
Diebold Nixdorf, Incorporated shareholders' equity
Preferred shares, no par value, 1,000,000 authorized shares, none issued	—			—			—			—
Common shares, $1.25 par value, 125,000,000 authorized shares, 79,696,694 and 79,238,759 issued shares, 65,001,602 and 64,632,400 outstanding shares, respectively	99.6			99.0
Common shares, $1.25 par value, 125,000,000 authorized shares, (91,345,451 and 90,524,360 issued shares, 76,174,025 and 75,558,544 outstanding shares, respectively)							114.2			113.2
Additional capital	430.8			418.0			741.8			721.5
Retained earnings	760.3			762.2
Treasury shares, at cost (14,695,092 and 14,606,359 shares, respectively)	(560.2		)	(557.2		)
Retained earnings (accumulated deficit)							(168.3		)	374.5
Treasury shares, at cost (15,171,426 and 14,965,816 shares, respectively)							(570.4		)	(567.4		)
Accumulated other comprehensive loss	(318.1		)	(190.5		)	(303.7		)	(196.3		)
Total Diebold, Incorporated shareholders' equity	412.4			531.5
Total Diebold Nixdorf, Incorporated shareholders' equity							(186.4		)	445.5
Noncontrolling interests	23.1			23.3			26.8			36.8
Total equity	435.5			554.8			(159.6		)	482.3
Total liabilities and equity	$	2,249.3		$	2,342.1
Total liabilities, redeemable noncontrolling interests and equity							$	4,311.9		$	5,222.0

See accompanying notes to consolidated financial statements.

5046

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

Year ended December 31,
2015 2014 2013
Net sales
Services $ 1,394.2
$ 1,432.8
$ 1,420.8
Products 1,025.1
1,302.0
1,161.9
2,419.3
2,734.8
2,582.7
Cost of sales
Services 932.8
974.8
1,048.3
Products 834.5
1,033.8
948.4
1,767.3
2,008.6
1,996.7
Gross profit 652.0
726.2
586.0
Selling and administrative expense 488.2
478.4
564.5
Research, development and engineering expense 86.9
93.6
92.2
Impairment of assets 18.9
2.1
72.0
Gain on sale of assets, net (0.6 ) (12.9 ) (2.4 )
593.4
561.2
726.3
Operating profit (loss) 58.6

165.0

(140.3 )
Other income (expense)
Investment income 26.0
34.5
27.6
Interest expense (32.5 ) (31.4 ) (29.2 )
Foreign exchange (loss) gain, net (10.0 ) (11.8 ) 0.2
Miscellaneous, net 3.7
(1.6 ) (0.1 )
Income (loss) from continuing operations before taxes 45.8
154.7
(141.8 )
Income tax (benefit) expense (13.7 ) 47.4
48.4
Income (loss) from continuing operations, net of tax 59.5
107.3
(190.2 )
Income from discontinued operations, net of tax 15.9
9.7
13.7
Net income (loss) 75.4
117.0
(176.5 )
Income attributable to noncontrolling interests, net of tax 1.7
2.6
5.1
Net income (loss) attributable to Diebold, Incorporated $ 73.7
$ 114.4
$ (181.6 )

Basic weighted-average shares outstanding 64.9
64.5
63.7
Diluted weighted-average shares outstanding 65.6
65.2
63.7

Basic earnings (loss) per share
Income (loss) before discontinued operations, net of tax $ 0.89
$ 1.62
$ (3.06 )
Income from discontinued operations, net of tax 0.24
0.15
0.21
Net income (loss) attributable to Diebold, Incorporated $ 1.13
$ 1.77
$ (2.85 )

Diluted earnings (loss) per share
Income (loss) before discontinued operations, net of tax $ 0.88
$ 1.61
$ (3.06 )
Income from discontinued operations, net of tax 0.24
0.15
0.21
Net income (loss) attributable to Diebold, Incorporated $ 1.12
$ 1.76
$ (2.85 )

Amounts attributable to Diebold, Incorporated
Income (loss) before discontinued operations, net of tax $ 57.8
$ 104.7
$ (195.3 )
Income from discontinued operations, net of tax 15.9
9.7
13.7
Net income (loss) attributable to Diebold, Incorporated $ 73.7
$ 114.4
$ (181.6 )

Cash dividends declared and paid per share $ 1.15
$ 1.15
$ 1.15



	Years ended December 31,
	2018			2017			2016
Net sales
Services	$	2,789.5		$	2,785.3		$	1,908.0
Products	1,789.1			1,824.0			1,408.3
	4,578.6			4,609.3			3,316.3
Cost of sales
Services	2,164.3			2,110.1			1,381.1
Products	1,523.4			1,499.4			1,223.5
	3,687.7			3,609.5			2,604.6
Gross profit	890.9			999.8			711.7
Selling and administrative expense	885.6			933.7			761.2
Research, development and engineering expense	157.4			155.5			110.2
Impairment of assets	217.5			3.1			9.8
(Gain) loss on sale of assets, net	(6.7		)	1.0			0.3
	1,253.8			1,093.3			881.5
Operating loss	(362.9		)	(93.5		)	(169.8		)
Other income (expense)
Interest income	8.7			20.3			21.5
Interest expense	(154.9		)	(117.3		)	(101.4		)
Foreign exchange loss, net	(2.5		)	(3.9		)	(2.1		)
Miscellaneous, net	(4.0		)	2.5			3.1
Loss from continuing operations before taxes	(515.6		)	(191.9		)	(248.7		)
Income tax expense (benefit)	37.2			28.3			(69.0		)
Equity in (loss) earnings of unconsolidated subsidiaries, net	(13.2		)	6.3			0.4
Loss from continuing operations, net of tax	(566.0		)	(213.9		)	(179.3		)
Income from discontinued operations, net of tax	—			—			143.7
Net loss	(566.0		)	(213.9		)	(35.6		)
Net income attributable to noncontrolling interests, net of tax	2.7			27.6			6.0
Net loss attributable to Diebold Nixdorf, Incorporated	$	(568.7	)	$	(241.5	)	$	(41.6	)

Basic and diluted weighted-average shares outstanding	76.0			75.5			69.1

Basic and diluted loss per share
Loss before discontinued operations, net of tax	$	(7.48	)	$	(3.20	)	$	(2.68	)
Income from discontinued operations, net of tax	—			—			2.08
Net loss attributable to Diebold Nixdorf, Incorporated	$	(7.48	)	$	(3.20	)	$	(0.60	)

Amounts attributable to Diebold Nixdorf, Incorporated
Loss before discontinued operations, net of tax	$	(568.7	)	$	(241.5	)	$	(185.3	)
Income from discontinued operations, net of tax	—			—			143.7
Net loss attributable to Diebold Nixdorf, Incorporated	$	(568.7	)	$	(241.5	)	$	(41.6	)

Cash dividends declared and paid per share	$	0.10		$	0.40		$	0.96

See accompanying notes to consolidated financial statements.

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(in millions)

Year ended December 31,
2015 2014 2013
Net income (loss) $ 75.4
$ 117.0
$ (176.5 )
Other comprehensive (loss) income, net of tax:
Translation adjustment (net of tax of $5.3, $3.6, and $2.1, respectively) (141.3 ) (73.7 ) (70.3 )
Foreign currency hedges (net of tax of $(4.0), $(0.3), and $(1.7), respectively) 6.4
0.5
2.9
Interest rate hedges:
Net income recognized in other comprehensive income (net of tax of $(0.3), $(0.4), and $(0.5), respectively) 0.8
0.7
0.7
Less: reclassification adjustments for amounts recognized in net income (net of tax of $(0.2), $(0.1), and $(0.1), respectively) 0.4
0.2
0.2
0.4
0.5
0.5
Pension and other post-retirement benefits:
Prior service credit recognized during the year (net of tax of $0.1, $0.1, and $0.3, respectively) (0.1 ) (0.3 ) (0.5 )
Net actuarial losses recognized during the year (net of tax of $(2.7), $(1.2), and $(5.8), respectively) 4.2
2.0
9.1
Net actuarial gain (loss) occurring during the year (net of tax of $(1.3), $39.3, and $(28.3), respectively) 2.1
(63.7 ) 44.8
Prior service cost recognized due to curtailment (net of tax of $0.0, $0.0, and $(0.8), respectively —
—
1.3
Net actuarial losses recognized due to curtailment (net of tax of $0.0, $0.0, and $(21.1), respectively) —
—
33.4
Settlements (net of tax of $0.0, $0.0, and $(7.8), respectively) —
—
12.3
6.2
(62.0 ) 100.4
Unrealized (loss) gain on securities, net:
Net (loss) gain recognized in other comprehensive income (net of tax of $0.0, $0.0 and $(0.1), respectively) —
(0.5 ) 3.9
Less: reclassification adjustments for amounts recognized in net income (net of tax) —
2.2
1.3
—
(2.7 ) 2.6
Other 0.1
—
1.2
Other comprehensive (loss) income, net of tax (128.2 ) (137.4 ) 37.3
Comprehensive loss (52.8 ) (20.4 ) (139.2 )
Less: comprehensive income attributable to noncontrolling interests 3.2
1.4
5.7
Comprehensive loss attributable to Diebold, Incorporated $ (56.0 ) $ (21.8 ) $ (144.9 )



	Years ended December 31,
	2018			2017			2016
Net loss	$	(566.0	)	$	(213.9	)	$	(35.6	)
Other comprehensive income (loss), net of tax:
Adoption of accounting standard	(29.0		)	—			—
Translation adjustment (net of tax of $(2.7), $8.4 and $(0.6), respectively)	(69.5		)	140.3			(32.4		)
Foreign currency hedges (net of tax of $(1.2), $0.2 and $6.2, respectively)	4.2			0.6			(10.7		)
Interest rate hedges:
Net income (loss) recognized in other comprehensive income (net of tax of $0.3, $(1.7) and $(3.0), respectively)	(1.4		)	3.9			4.9
Less: reclassification adjustments for amounts recognized in net income (loss) (net of tax of $(0.6), (0.1) and $0.0, respectively)	(2.6		)	0.4			0.2
	1.2			3.5			4.7
Pension and other post-retirement benefits:
Net actuarial losses recognized during the year (net of tax of $(1.1), $(3.3) and $(1.8), respectively)	4.8			2.2			4.0
Prior service cost occurring during the year (net of tax of $0.0, (0.5) and $0.0, respectively)	—			0.4			—
Net actuarial (gain) loss occurring during the year (net of tax of $(4.0), $(6.6) and $(8.3), respectively)	(10.9		)	4.5			18.5
Net actuarial losses recognized due to settlement (net of tax of $(1.3), $0.4 and $0.0, respectively)	(3.5		)	(0.2		)	—
Net actuarial gain recognized due to curtailment (net of tax of $0.0, $0.0, and $1.5, respectively)	—			—			(3.3		)
Acquired benefit plans and other (net of tax of $0.0, $1.5 and $0.0, respectively)	(7.7		)	(1.5		)	—
Currency impact (net of tax of $(0.3), $(1.9) and $0.4, respectively)	(0.9		)	1.3			(0.7		)
	(18.2		)	6.7			18.5
Other	—			(0.2		)	(0.1		)
Other comprehensive (loss) income, net of tax	(111.3		)	150.9			(20.0		)
Comprehensive loss	(677.3		)	(63.0		)	(55.6		)
Less: comprehensive income (loss) attributable to noncontrolling interests	(1.2		)	33.5			9.2
Comprehensive loss attributable to Diebold Nixdorf, Incorporated	$	(676.1	)	$	(96.5	)	$	(64.8	)

See accompanying notes to consolidated financial statements.

5248

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except per share amounts)


	Common Shares												Accumulated Other Comprehensive (Loss) Income				Total Diebold, Incorporated Shareholders' Equity										Common Shares														Accumulated Other Comprehensive Income (Loss)				Total Diebold Nixdorf, Incorporated Shareholders' Equity
	Number	td.25 Par Value		Additional Capital			Retained Earnings			Treasury Shares						Non-controlling Interests				Total Equity			Number			td.25 Par Value				Additional Capital		Retained Earnings			Treasury Shares					Non-controlling Interests								Total Equity
Balance, January 1, 2013	77.7	$	97.1	$	358.3		$	978.3		$	(551.2	)			$	(91.0			)	$	791.5			$	35.3			$	826.8
Net (loss) income							(181.6		)								(181.6		)	5.1				(176.5		)
Other comprehensive income													36.7				36.7			0.6				37.3
Balance, January 1, 2016																											79.7			$	99.6	$	430.8		$	752.8		$	(560.2	)		$	(318.1	)		$	404.9			$	23.1		$	428.0
Net income (loss)																																			(41.6		)								(41.6		)		6.0			(35.6		)
Other comprehensive income (loss)																																									(23.2		)		(23.2		)		3.2			(20.0		)
Stock options exercised	0.5	0.7		16.0													16.7							16.7			—			—		0.3													0.3							0.3
Restricted stock units issued	0.3	0.4		(0.4		)											—							—
Other share-based compensation	0.1	0.1		(0.1		)											—							—
Share-based compensation issued																											0.3			0.4		(0.4		)											—							—
Income tax detriment from share-based compensation				(3.9		)											(3.9		)					(3.9		)						(0.2		)											(0.2		)					(0.2		)
Share-based compensation expense				15.4													15.4							15.4								22.2													22.2							22.2
Dividends paid							(74.0		)								(74.0		)					(74.0		)									(64.6		)								(64.6		)					(64.6		)
Treasury shares (0.1 shares)										(4.1		)					(4.1		)					(4.1		)												(2.2		)					(2.2		)					(2.2		)
Distributions to noncontrolling interest holders, net																	—			(16.9		)		(16.9		)
Balance, December 31, 2013	78.6	$	98.3	$	385.3		$	722.7		$	(555.3	)	$	(54.3	)		$	596.7		$	24.1			$	620.8
Net income							114.4										114.4			2.6				117.0
Other comprehensive (loss) income													(136.2		)		(136.2		)	(1.2		)		(137.4		)
Sale of equity interest																																													—				7.1			7.1
Reclassification of guaranteed dividend to accrued liabilities																																													—				(5.7		)	(5.7		)
Distribution noncontrolling interest holders, net																																													—				(8.2		)	(8.2		)
Acquired fair value of noncontrolling interest																																													—				407.9			407.9
Acquisition of Diebold Nixdorf AG																											9.9			12.4		267.3													279.7				—			279.7
Balance, December 31, 2016																											89.9			$	112.4	$	720.0		$	646.6		$	(562.4	)	$	(341.3	)		$	575.3			$	433.4		$	1,008.7
Net income (loss)																																			(241.5		)								(241.5		)		27.6			(213.9		)
Other comprehensive income																																									145.0				145.0				5.9			150.9
Stock options exercised	0.4	0.5		14.1													14.6							14.6			—			—		0.3													0.3							0.3
Restricted stock units issued	0.2	0.2		(0.2		)											—							—
Income tax detriment from share-based compensation				(2.7		)											(2.7		)					(2.7		)
Share-based compensation issued																											0.6			0.8		(0.7		)											0.1							0.1
Share-based compensation expense				21.5													21.5							21.5								33.9													33.9							33.9
Dividends paid							(74.9		)								(74.9		)					(74.9		)									(30.6		)								(30.6		)					(30.6		)
Treasury shares (0.2 shares)										(1.9		)					(1.9		)					(1.9		)												(5.0		)					(5.0		)					(5.0		)
Distributions to noncontrolling interest holders, net																	—			(2.2		)		(2.2		)
Balance, December 31, 2014	79.2	$	99.0	$	418.0		$	762.2		$	(557.2	)	$	(190.5	)		$	531.5		$	23.3			$	554.8
Net income							73.7										73.7			1.7				75.4
Other comprehensive (loss) income													(127.6		)		(127.6		)	1.5				(126.1		)
Stock options exercised	0.1	0.2		3.3													3.5							3.5
Restricted stock units issued	0.2	0.2		(0.2		)											—							—
Other share-based compensation	0.2	0.2		(0.2		)											—							—
Income tax detriment from share-based compensation				(2.5		)											(2.5		)					(2.5		)
Reclassification of guaranteed dividend to accrued liabilities																																													—				(24.6		)	(24.6		)
Reclassification to redeemable noncontrolling interest																																(32.0		)											(32.0		)		(386.7		)	(418.7		)
Distribution noncontrolling interest holders, net																																													—				(18.8		)	(18.8		)
Balance, December 31, 2017																											90.5			$	113.2	$	721.5		$	374.5		$	(567.4	)	$	(196.3	)		$	445.5			$	36.8		$	482.3
Net income (loss)																																			(568.7		)								(568.7		)		2.7			(566.0		)
Other comprehensive loss																																									(107.4		)		(107.4		)		(3.9		)	(111.3		)
Share-based compensation issued																											0.8			1.0		(1.1		)											(0.1		)					(0.1		)
Share-based compensation expense				12.4													12.4							12.4								36.6													36.6							36.6
Dividends paid							(75.6		)								(75.6		)					(75.6		)									(7.7		)								(7.7		)					(7.7		)
Treasury shares (0.1 shares)										(3.0		)					(3.0		)					(3.0		)
Treasury shares (0.2 shares)																																						(3.0		)					(3.0		)					(3.0		)
Accounting principle change																																			33.6										33.6							33.6
Reclassification of guaranteed dividend to accrued liabilities																																													—				(3.4		)	(3.4		)
Reclassification to redeemable noncontrolling interest																																(15.2		)											(15.2		)		—			(15.2		)
Distributions to noncontrolling interest holders, net																	—			(3.4		)		(3.4		)																			—				(0.5		)	(0.5		)
Balance, December 31, 2015	79.7	$	99.6	$	430.8		$	760.3		$	(560.2	)	$	(318.1	)		$	412.4		$	23.1			$	435.5
Acquisitions and divestitures, net																																													—				(4.9		)	(4.9		)
Balance, December 31, 2018																											91.3			$	114.2	$	741.8		$	(168.3	)	$	(570.4	)	$	(303.7	)		$	(186.4	)		$	26.8		$	(159.6	)

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

~~605-20,~~ ~~Separately Priced Extended Warranty~~Company also has extended warranty and service contracts available for its customers, which are recognized as separate performance obligations. Revenue is recognized on these contracts ratably as the Company has a stand-ready obligation to provide services when or as needed by the customer. This input method is the most accurate assessment of progress toward completion the Company can apply.

Nature of goods and services

Product ~~Maintenance Contracts~~ ~~where stated price~~revenue is recognized at the point in time that the customer obtains control of the product, which could be upon delivery or upon completion of installation services, depending on contract terms. The Company’s software licenses are functional in nature (the IP has significant stand-alone functionality); as such, the revenue recognition of distinct software license sales is at the point in time that the customer obtains control of the rights granted by the license.

Professional services integrate the commercial solution with the customer's existing infrastructure and helps define the optimal user experience, improve business processes, refine existing staffing models and deploy technology to meet branch and store automation objectives. Revenue from professional services are recognized over time, because the customer simultaneously receives and consumes the benefits of the Company’s performance as the services are performed or when the Company’s performance creates an asset with no alternative use and the Company has an enforceable right to payment for performance completed to date. Generally revenue will be recognized using an input measure, typically costs incurred. The typical contract length for service is generally one year and is billed and paid in advance except for installations, among others.

Services may be sold separately or in bundled packages. For bundled packages, the Company accounts for individual services separately if they are distinct. A distinct service is separately identifiable from other items in the bundled package if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate services or distinct obligations in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the products or services. For items that are not sold separately, the Company estimates stand-alone selling prices using the cost plus expected margin approach. Revenue on service contracts is recognized ratably over time, generally using an input measure, as the ~~period.~~customer simultaneously receives and consumes the benefits of the Company’s performance as the services are performed. In some circumstances, when global service supply chain services are not included in a term contract and rather billed as they occur, revenue on these billed work services are recognized at a point in time as transfer of control occurs.

The following is a description of principal solutions offered within the Company's two main industry segments that generate the Company's revenue.

Banking

Products. Products for banking customers consist of cash recyclers and dispensers, intelligent deposit terminals, teller automation tools and kiosk technologies, as well as physical security solutions. The Company provides its banking customers front-end applications for consumer connection points and back-end platforms that manage channel transactions, operations and integration and facilitate omnichannel transactions, endpoint monitoring, remote asset management, customer marketing, merchandise management and analytics. These offerings include highly configurable, API enabled software that automates legacy banking transactions across channels.

~~For~~Services. The Company provides its banking customers product-related services which include proactive monitoring and rapid resolution of incidents through remote service capabilities or an on-site visit. First and second line maintenance, preventive maintenance and on-demand services keep the distributed assets of the Company's customers up and running through a standardized incident management process. Managed services and outsourcing consists of the end-to-end business processes, solution management, upgrades and transaction processing. The Company also provides a full array of cash management services, which optimizes the availability and cost of physical currency across the enterprise through efficient forecasting, inventory and replenishment processes.

Retail

Products. The retail product portfolio includes modular, integrated and mobile POS and SCO terminals that meet evolving automation and omnichannel requirements of consumers. Supplementing the POS system is a broad range of peripherals, including printers, scales and mobile scanners, as well as the cash management portfolio which offers a wide range of banknote and coin processing systems. Also in the portfolio, the Company provides SCO terminals and ordering kiosks which facilitate an efficient and user-friendly purchasing experience. The Company’s hybrid product line can alternate from an attended operator to self-checkout with the press of a button as traffic conditions warrant throughout the business day.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The Company's platform software is installed within retail data centers to facilitate omnichannel transactions, endpoint monitoring, remote asset management, customer marketing, merchandise management and analytics.

Services. The Company provides its retail customers product-related services which include on-demand services and professional services. Diebold Nixdorf AllConnect Services for retailers include maintenance and availability services to continuously improve retail self-service fleet availability and performance. These include: total implementation services to support both current and new store concepts; managed mobility services to centralize asset management and ensure effective, tailored mobile capability; monitoring and advanced analytics providing operational insights to support new growth opportunities; and store life-cycle management to proactively monitors store IT endpoints and enable improved management of internal and external suppliers and delivery organizations.

Refer to note 20 for additional information regarding the Company's reportable operating segments, disaggregation of net sales ~~excluding software required~~by segments and product solutions, net sales by geographical region and disaggregation by timing of revenue recognition.

Contract balances

The following table provides 2018 information about receivables and deferred revenue, which represent contract liabilities from contracts with customers:



Contract balance information	Trade Receivables		Contract liabilities
Balance at January 1	$	827.9	$	436.5
Balance at December 31	$	737.2	$	378.2

Contract assets are minimal for the ~~equipment~~periods presented. The amount of revenue recognized in 2018 from performance obligations satisfied (or partially satisfied) in previous periods, mainly due to ~~operate~~the changes in the estimate of variable consideration and contract modifications was de minimis. There have been $22.8 and $54.9 during the years ended December 31, 2018 and 2017, respectively, of impairment losses recognized as ~~intended,~~bad debt related to receivables or contract assets arising from the Company's contracts with customers.

As of January 1, 2018, the Company had $436.5 of unrecognized deferred revenue constituting the remaining performance obligations that are either unsatisfied (or partially unsatisfied). In 2018, the Company recognized revenue of $332.5 related to the Company's deferred revenue balance at January 1, 2018.

Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets of the Company primarily relate to the Company's rights to consideration for goods shipped and services provided but not contractually billable at the reporting date.

The contract assets are reclassified into the receivables balance when the rights to receive payment become unconditional. Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. In addition, contract liabilities are recorded as advanced payments for products and other deliverables that are billed to and collected from customers prior to revenue being recognizable.

Transaction price and variable consideration

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. This consideration can include fixed and variable amounts and is determined at contract inception and updated each reporting period for any changes in circumstances. The transaction price also considers variable consideration, time value of money and the measurement of any non-cash consideration, all of which are estimated at contract inception and updated at each reporting date for any changes in circumstances. Once the variable consideration is identified, the Company estimates the amount of the variable consideration to include in the transaction price by using one of two methods, expected value (probability weighted methodology) or most likely amount (when there are only two possible outcomes). The Company chooses the method expected to better predict the amount of consideration to which it will be entitled and applies the method consistently to similar contracts. Generally, the Company applies the ~~software revenue recognition principles within FASB ASC 985-605,~~ ~~Software - Revenue Recognition.~~ ~~For software~~expected value method when assessing variable consideration including returns and ~~software-related deliverables (software elements),~~refunds.

The Company also applies the ‘as invoiced’ practical expedient in Accounting Standards Codification (ASC) paragraph 606-10-55-18 related to performance obligations satisfied over time, which permits the Company allocates revenue based upon the relative fair value of these software elements as determined by VSOE. If the Company cannot obtain VSOE for any undelivered software element, revenue is deferred until all deliverables have been delivered or until VSOE can be determined for any remaining undelivered software elements. When the fair value of a delivered element cannot be established, but fair value evidence exists for the undelivered software elements, the Company uses the residual method to recognize ~~revenue. Under~~revenue in the ~~residual method,~~amount to which it has a right to invoice the ~~fair~~customer if that amount corresponds directly with the value to the customer of the ~~undelivered elements~~Company’s performance

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

completed to date. Service revenues that are recognized ratably are primarily contracts that include first and second line maintenance. Service revenues that are recognized using input measures include primarily preventative maintenance. The ‘as invoiced’ practical expedient relates to the on-demand service revenue which is ~~deferred and the remaining portion of the arrangement consideration is~~generally not under contract.

Transaction price allocated to the ~~delivered elements~~remaining performance obligations

As of December 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $2,900. The Company generally expects to recognize revenue on the remaining performance obligations over the next twelve months. The Company enters into service agreements with cancellable terms after a certain period without penalty. Unsatisfied obligations reflect only the obligation during the initial term. The Company applies the practical expedient in ASC paragraph 606-10-50-14 and ~~recognized as revenue.~~does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Cost to obtain and cost to fulfill a contract

The Company has minimal cost to obtain or fulfill contracts for customers for the ~~following~~periods presented. The Company pays commissions to the sales force based on multiple factors including but not limited to order entry, revenue ~~streams~~recognition and portfolio growth. These incremental commission fees paid to the sales force meet the criteria to be considered a cost to obtain a contract, as they are directly attributable to a contract, incremental and management expects the fees are recoverable. The Company applies the practical expedient and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The costs that are not capitalized are included in cost of sales. The costs related to ~~sales~~contracts with greater than a one-year term are immaterial and continue to ~~its customers:~~be recognized in cost of sales.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The Company has minimal cost for shipping and handling costs for the periods presented.

Changes in accounting policies

Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these consolidated financial statements.

~~Financial Self-Service Product & Managed Service Revenue~~ ~~FSS products are primarily ATMs and other equipment primarily used in the banking industry which include both hardware and the software required for the equipment to operate as intended.~~ The Company ~~also provides service contracts on FSS products that typically cover~~adopted Accounting Standards Updated (ASU) Topic 606, Revenue from Contracts with Customers (Topic 606), with a 12-month period and can begin at any time after the warranty period expires. The service provided under warranty is limited as compared to those offered under service contracts. Further, warranty is not considereddate of initial application of January 1, 2018. As a separate deliverable of the sale and covers only replacement of defective parts inclusive of labor. Service contracts provide additional services beyond those covered under the warranty, including preventative maintenance service, cleaning, supplies stocking and cash handling, all of which are not essential to the functionality of the equipment. Service revenue also includes services and partsresult, the Company ~~provides on a billed-work basis that are not covered by warranty or service contract. The Company also provides customers with integrated services such~~has changed its accounting policy for revenue recognition as ~~outsourced and managed services, including remote monitoring, trouble-shooting, training, transaction processing, currency management, maintenance or full support services.~~detailed below.

~~Electronic Security Products & Managed Service Revenue~~The Company ~~provides global product sales, service, installation, project management for longer-term contracts~~applied Topic 606 using the cumulative effect method — i.e., by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative information has not been adjusted and ~~monitoring of original equipment manufacturer electronic security products~~continues to ~~financial, government, retail and commercial customers. These solutions provide the Company’s customers a single-source solution to their electronic security needs.~~be reported under ASU Topic 605, Revenue Recognition. The Company ~~has included~~applied the ~~net sales~~practical expedient related to assessment of contract modifications, whereby the Company is essentially allowed to use hindsight when assessing the effect of a modification and accounting for the modified contract as if it existed from ~~its North America electronic security business as discontinued operations.~~the beginning of the original contract.

~~Physical Security & Facility~~The details of the significant changes and quantitative impact of the changes are set out below.

Professional service contracts

Previously, the Company recognized revenue for professional services contracts either on a milestone method or completed contract basis. Under Topic 606, the Company recognizes revenue when control transfers to a customer. As professional services can be highly customized for each customer, there is no alternative use for the services. When there is an enforceable right to payment for service completed combined with no alternative use of the services, the services meet criteria for over time revenue recognition. Revenue is recognized as the services are provided and as the customer benefits from the service. Revenue is recognized progressively based on the costs incurred method. When the professional services are not highly customized as in basic software installation services, customers do not take control of the services until they are completed. Therefore, the Company continues to recognize revenue for such contracts when the services are completed and customers formally accept them.

In certain circumstances, a contract with a customer that contains a software arrangement may include provisions for customer acceptance. In these cases, when or as the performance obligation is satisfied, the Company recognizes revenue and records a contract asset until customer acceptance is received. Once customer acceptance is received, the contract asset is reclassified to

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

accounts receivable. As of December 31, 2018, contract assets related to these arrangements were minimal. In situations where the performance obligation has not been met and the Company has not received customer acceptance, no revenue is recognized.

Customer acceptance provisions by their nature require the customer to approve that the Company has satisfied its performance obligation and are generally standard throughout the Company's contracts with customers.

If an instance arises where the Company would recognize revenue prior to customer acceptance, which occurs primarily when the Company provides bundled software and professional services, it is the Company's policy, pursuant to Topic 606, when or as the performance obligation is satisfied, to recognize revenue and record a contract asset or reduce deferred revenue, as applicable, until customer acceptance is received. Once customer acceptance is received, the contract asset is reclassified to trade receivables, net. In these circumstances, the Company would consider ASC 606-10-55-86 and -87 and conclude that although a standard method to transferring the software and services is not met, the standard terms of the customer acceptance provisions and favorable history of customer acceptances support revenue recognition prior to customer acceptance. The Company ~~designs, manufactures and/or procures~~also would only recognize revenue prior to customer acceptance only if there were no remaining inputs related to performance obligation. These instances were immaterial. For certain contracts that contain customer acceptance clauses, such as customized software arrangements, the revenue is recognized pursuant to ASC 606-25 25-27(c) since the Company’s performance does not create an asset with an alternative use and ~~installs physical security and facility products. These consist of vaults, safe deposit boxes and safes, drive-up banking equipment and a host of other banking facilities products.~~the Company has an enforceable right to payment for performance completed to date.

~~Brazil Other~~ The Company offers election and lottery systems product solutions and support to the Brazil government. Election systems revenue consists of election equipment sales, networking, tabulation and diagnostic software development, training, support and maintenance. Lottery systems revenue primarily consists of equipment sales. The election and lottery equipment components are included in product revenue. The software development, training, support and maintenance components are included in service revenue.Impacts on financial statements

~~Software Solutions & Service Revenue~~The ~~Company offers software solutions, excluding software required~~following table summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements as of and for the ~~equipment~~period ended December 31, 2018 as if the Company continued to ~~operate as intended, consisting~~follow its accounting policies under the previous revenue recognition guidance.



	Impact of changes in accounting policy for the twelve months ended December 31, 2018
	As Reported			Adjustments			Balances without adoption of Topic 606
Trade receivables, less allowances for doubtful accounts of $58.2 and $71.7, respectively	$	737.2		$	(3.9	)	$	733.3
Inventories	$	610.1		$	24.2		$	634.3
Deferred revenue	$	378.2		$	30.7		$	408.9
Deferred income taxes	$	221.6		$	(0.7	)	$	220.9
Retained earnings (accumulated deficit)	$	(168.3	)	$	(9.8	)	$	(178.1	)

The impact to net sales and cost of ~~multiple applications~~sales would have been decreases of $18.2 and $14.2, respectively, for the year ended December 31, 2018. The impact after tax was $(0.9) for the year ended December 31, 2018 and was primarily a result of timing of deferred revenue related to products and software for certain amounts being recognized that ~~process events~~would have previously been deferred, and ~~transactions (networking software) along with the related server. Sales of networking software represent software solutions to customers~~certain amounts being deferred that allow them to network various different vendors’ ATMs onto one network. Included within service revenue is revenue from software support agreements, which are typically 12 months in duration and pertain to networking software.would have previously been recognized.

Cost of Sales. Cost of services sales primarily consists of fuel, parts and labor and benefits costs related to installation of products and service maintenance contracts, including call center costs as well as costs for service parts repair centers. Cost of products sales is primarily comprised of direct materials and supplies consumed in the manufacturing and distribution of products, as well as related labor, depreciation expense and direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished products. Cost of products sales also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity. ~~Cost~~

Property, plant and equipment and long-lived assets. Property, plant and equipment and long-lived assets are recorded at historical cost, including interest where applicable.

Impairment of ~~services sold~~property, plant and equipment and long-lived assets is ~~primarily consists~~recognized when events or changes in circumstances indicate that the carrying amount of ~~fuel, parts and labor and benefits costs related~~the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to ~~installation~~reduce the asset to the lower of ~~products and service maintenance contracts, including call center costs as well as costs for service parts repair centers.~~its fair value or its net book value.

Depreciation and Amortization. Depreciation of property, plant and equipment is computed using the straight-line method based on the estimated useful life for ~~financial statement purposes.~~each asset class. Amortization of leasehold improvements is based upon the shorter of original terms of the lease or life of the improvement. Repairs and maintenance are expensed as incurred. ~~Amortization~~Generally, amortization of the Company’s other long-term assets, such as intangible assets and capitalized computer software, is computed using the ~~straight-line method over the life of the asset.~~straight-

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

line method over the life of the asset. Certain acquired technology assets utilize a double-declining method.

Fully depreciated assets are retained until disposal. Upon disposal, assets and related accumulated depreciation or amortization are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations.

Advertising Costs. Advertising costs are expensed as incurred and were ~~$11.6, $16.7~~$10.1, $11.0 and ~~$9.8~~$14.0 in ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

Research, Development and Engineering. Research, development and engineering costs are expensed as incurred and were ~~$86.9, $93.6~~$157.4, $155.5 and ~~$92.2~~$110.2 in ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

Shipping and Handling Costs. The Company recognizes shipping and handling fees billed when products are shipped or delivered to a customer and includes such amounts in net sales. Third-party freight payments are recorded in cost of sales.

Taxes on Income. Deferred taxes are provided on an asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences, operating loss carry-forwards and tax credits. Deferred tax liabilities are recognized for taxable temporary differences and undistributed earnings in certain tax jurisdictions. Deferred tax assets are reduced by a valuation allowance when, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Determination of a valuation allowance involves estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income and the impact of tax planning strategies. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company regularly assesses its position with regard to tax exposures and records liabilities for these uncertain tax positions and related interest and penalties, if any, when the tax benefit is not more likely than not realizable. The Company has recorded an accrual that reflects the recognition and measurement process for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. Additional future income tax expense or benefit may be recognized once the positions are effectively settled.

Sales Tax. The Company collects sales taxes from customers and accounts for sales taxes on a net basis.

Cash, ~~Equivalents.~~Cash Equivalents and Restricted Cash. The Company considers highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company had $105.3 and $8.0 of restricted cash at December 31, 2018 and 2017, respectively. Restricted cash primarily relates to the acquisition of the remaining shares in Diebold Nixdorf AG.

Financial Instruments. The carrying amount of cash and cash equivalents, short term investments, trade receivables and accounts payable approximated their fair value because of the relatively short maturity of these instruments. The Company’s risk-management strategy ~~uses~~utilizes derivative financial instruments such as forwards to hedge certain foreign currency exposures and interest rate swaps to manage interest rate risk. The intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on the derivative contracts hedging these exposures. The Company does not enter into derivatives for trading purposes. The Company recognizes all derivatives on the balance sheet at fair value. Changes in the fair values of derivatives that are not designated as hedges are recognized in earnings. If the derivative is designated and qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivatives are either offset against the change in the hedged assets or liabilities through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings.

Fair Value. The Company measures its financial assets and liabilities using one or more of the following three valuation techniques:



Valuation technique		Description
Market approach		Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Cost approach		Amount that would be required to replace the service capacity of an asset (replacement cost).
Income approach		Techniques to convert future amounts to a single present amount based upon market expectations.

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided into three levels:



Fair value level		Description
Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities. Fair value of investments categorized as level 1 are determined based on period end closing prices in active markets. Mutual funds are valued at their net asset value (NAV) on the last day of the period.
Level 2		Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Fair value of investments categorized as level 2 are determined based on the latest available ask price or latest trade price if listed. The fair value of unlisted securities is established by fund managers using the latest reported information for comparable securities and financial analysis. If the manager believes the fund is not capable of immediately realizing the fair value otherwise determined, the manager has the discretion to determine an appropriate value. Common collective trusts are valued at NAV on the last day of the period.
Level 3		Unobservable inputs for which there is little or no market data. Fair value of investments categorized as level 3 represent the plan’s interest in private equity, hedge and property funds. The fair value for these assets is determined based on the NAV as reported by the underlying investment managers.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses the end of the period when determining the timing of transfers between levels.

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~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

Short-Term Investments The Company has investments in certificates of deposit that are recorded at cost, which approximates fair value.

Assets Held in Rabbi Trusts / Deferred Compensation The fair value of the assets held in rabbi trusts (refer to ~~notes 6~~note 7 and ~~13)~~note15) is derived from investments in a mix of money market, fixed income and equity funds managed by Bank of America/Merrill Lynch. The related deferred compensation liability is recorded at fair value.

Foreign Exchange Contracts The valuation of foreign exchange forward and option contracts is determined using valuation techniques, including option models tailored for currency derivatives. These contracts are valued using the market approach based on observable market inputs. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including spot rates, foreign currency forward rates, the interest rate curve of the domestic currency, and foreign currency volatility for the given currency pair.

Forward Contracts A substantial portion of the Company’s operations and revenues are international. As a result, changes in foreign exchange rates can create substantial foreign exchange gains and losses from the revaluation of non-functional currency monetary assets and liabilities.

Option Contracts A put option gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option gives the purchaser of the option the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period. In connection with the Business Combination, the Company entered into foreign exchange option contracts to purchase or call €1,416.0 for a put of $1,547.1 to limit the effect of exchange rate fluctuations on the cash component of the purchase price consideration which is denominated in euros and approximates €1,162.2 and estimated euro denominated deal related costs and any outstanding Wincor Nixdorf borrowings. These foreign exchange option contracts are non-designated and are included in other current assets or other current liabilities based on the net asset or net liability position, respectively, in our consolidated balance sheets. The gain or loss on these non-designated derivative instruments is reflected in other income (expense) miscellaneous, net in ~~our~~the Company's consolidated statements of operations. Changes in foreign exchange rates between the U.S dollar and euro can create substantial gains and losses from the revaluation of the derivative instrument. The $60.0 delayed premium is recorded at fair value and netted against the fair value of the foreign exchange option contract asset.

Interest Rate Swaps The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company ~~has variable~~primarily uses interest rate ~~debt and is subject to fluctuations in~~swaps as part of its interest ~~related cash flows due to changes in market interest rates. The Company’s policy allows it to periodically enter into derivative instruments~~rate risk management strategy. Interest rate swaps designated as cash flow hedges ~~to fix some portion~~involve the receipt of ~~future~~ variable ~~rate based interest expense. The~~amounts from a counterparty in exchange for the Company ~~executed two pay-fixed receive-variable interest rate swaps to hedge against changes in~~making fixed-rate payments over the ~~London Interbank Offered Rate (LIBOR) benchmark interest rate on a portion~~life of the ~~Company’s LIBOR-based borrowings. The fair value~~agreements without exchange of the ~~swap is determined using the income approach and is calculated based on LIBOR rates at the reporting date.~~underlying notional amount.

~~Assets and Liabilities Not Measured at Fair Value on a Recurring Basis~~In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment. These assets are recorded at fair value, determined using level 3 inputs, only when an impairment charge is recognized. Further details regarding the Company's goodwill impairment review appear in note 11.

Assets and Liabilities Recorded at Carrying Value The fair value of the Company’s cash and cash equivalents, trade receivables and accounts payable, approximates the carrying value due to the relative short maturity of these instruments.

The fair value of the Company’s industrial development revenue bonds are measured using unadjusted quoted prices in active markets for identical assets categorized as level 1 inputs. The fair value of the Company’s current notes payable and credit facility debt instruments approximates the carrying value due to the relative short maturity of the revolving borrowings under these instruments. The fair values of the Company’s long-term senior notes were estimated using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets, market indices and interest rate measurements, considered level 2 inputs.

Refer to note 1918 for further details of assets and liabilities subject to fair value measurement.

Trade Receivables. The Company evaluates the collectability of trade receivables based on a percentage of sales related to historical loss experience and current trends. The Company will also record periodic adjustments for known events such as specific

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

customer circumstances and changes in the aging of accounts receivable balances. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off.

Financing Receivables. The Company evaluates the collectability of notes and finance lease receivables (collectively, financing receivables) on a customer-by-customer basis and evaluates specific customer circumstances, aging of invoices, credit risk changes

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~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

and payment patterns and historical loss experience. When the collectability is determined to be at risk based on the above criteria, the Company records the allowance for credit losses, which represents the Company’s current exposure less estimated reimbursement from insurance claims. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off.

Inventories. The Company primarily values inventories ~~at the~~using average or standard costing utilizing lower of cost or ~~market applied on a first-in, first-out basis.~~net realizable value. The Company identifies and writes down its excess and obsolete inventories to net realizable value based on usage forecasts, order volume and inventory aging. With the development of new products, the Company also rationalizes its product offerings and will write-down discontinued product to the lower of cost or net realizable value.

Deferred Revenue. Deferred revenue is recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. In addition, deferred revenue is recorded for products and other deliverables that are billed to and collected from customers prior to revenue being recognizable.

~~Split-Dollar Life Insurance.~~ The Company recognizes a liability for the post-retirement obligation associated with a collateral assignment arrangement if, based on an agreement with an employee, the Company has agreed to maintain a life insurance policy during the post-retirement period or to provide a death benefit. In addition, the Company recognizes a liability and related compensation costs for future benefits that extend to post-retirement periods.

Goodwill. Goodwill is the cost in excess of the net assets of acquired businesses (refer to note ~~11)~~8). The Company tests all existing goodwill at least annually for impairment on a reporting unit basis. ~~In 2015, the~~The annual goodwill impairment test was performed as of October 31 ~~compared to November 30 in prior years~~ for ~~administrative improvements.~~all periods presented.

The Company tests for interim impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the carrying value of a reporting unit below its reported amount. ~~The~~Beginning with the second quarter of 2018, the Company’s ~~reporting units~~reportable operating segments are ~~defined as Domestic~~based on the conclusion of the assessment on the following solutions: Eurasia Banking, Americas Banking and ~~Canada, LA, Asia Pacific (AP), and EMEA.~~Retail, with comparative periods, reclassified for consistency. Each year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In evaluating whether it is more likely than not the fair value of a reporting unit is less than its carrying amount, the Company considers the following events and circumstances, among others, if applicable: (a) macroeconomic conditions such as general economic conditions, limitations on accessing capital or other developments in equity and credit markets; (b) industry and market considerations such as competition, multiples or metrics and changes in the market for the Company's products and services or regulatory and political environments; (c) cost factors such as raw materials, labor or other costs; (d) overall financial performance such as cash flows, actual and planned revenue and earnings compared with actual and projected results of relevant prior periods; (e) other relevant events such as changes in key personnel, strategy or customers; (f) changes in the composition of a reporting unit's assets or expected sales of all or a portion of a reporting unit; and (g) any sustained decrease in share price.

If the Company's qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or if management elects to perform a quantitative assessment of goodwill, ~~a two-step~~an impairment test is used to identify potential goodwill impairment and measure the amount of any impairment loss to be recognized. ~~In the first step, the~~The Company compares the fair value of each reporting unit with its carrying value and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The fair value of the reporting units is determined based upon a combination of the income valuation and market approach in valuation methodology. The income approach uses discounted estimated future cash flows, whereas the market approach or guideline public company method utilizes market data of similar publicly traded companies. The ~~Company’s Step 1 impairment test of goodwill of a reporting unit is based upon the~~ fair value of the reporting unit is defined as the price that would be received to sell the net assets or transfer the net liabilities in an orderly transaction between market participants at the assessment date. In the event that the net carrying amount exceeds the fair value, a Step 2 test must be performed whereby the fair value of the reporting unit’s goodwill must be estimated to determine if it is less than its net carrying amount. In its two-step test, the Company uses the discounted cash flow method and the guideline company method for determining the fair value of its reporting units. Under these methods, the determination of implied fair value of the goodwill for a particular reporting unit is the excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities in the same manner as the allocation in a business combination.

The techniques used in the Company's qualitative assessment ~~and, if necessary, two-step impairment test~~ incorporate a number of assumptions that the Company believes to be reasonable and to reflect market conditions forecast at the assessment date. Assumptions in estimating future cash flows are subject to a high degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the time the forecast is made. To this end, the Company evaluates the appropriateness of its assumptions as well as its overall forecasts by comparing projected results of upcoming years with actual results of preceding years and validating that differences therein are reasonable. Key assumptions, all of which are Level 3 inputs, relate to price trends, material costs, discount rate, customer demand and the long-term growth and foreign exchange rates. A number of benchmarks from independent industry and other economic publications were also used. Changes in assumptions and estimates after the assessment date may lead to an outcome where impairment charges would be required

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~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.

~~Long-Lived Assets.~~ ~~Impairment~~

Table of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to the lower of its fair value or its net book value. The Company tests all existing indefinite-lived intangibles at least annually for impairmentContents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as ~~of October 31. As~~ of December 31, ~~2015, the Company had approximately $4.5 of indefinite-lived tangibles included~~ 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in ~~other assets on the consolidated balance sheets.~~millions, except per share amounts)

Contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Pensions and Other Post-retirement Benefits. Annual net periodic expense and benefit liabilities under the Company’s defined benefit plans are determined on an actuarial basis. Assumptions used in the actuarial calculations have a significant impact on plan obligations and expense. Members of the management investment committee periodically review the actual experience compared with the more significant assumptions used and make adjustments to the assumptions, if warranted. The healthcare trend rates are reviewed based upon the results of actual claims experience. The discount rate is determined by analyzing the average return of high-quality (i.e., AA-rated) fixed-income investments and the year-over-year comparison of certain widely used benchmark indices as of the measurement date. The expected long-term rate of return on plan assets is determined using the plans’ current asset allocation and their expected rates of return based on a geometric averaging over 20 years. The rate of compensation increase assumptions reflects the Company’s long-term actual experience and future and near-term outlook. Pension benefits are funded through deposits with ~~trustees.~~trustees or directly by the plan administrator. Other post-retirement benefits are not funded and the Company’s policy is to pay these benefits as they become due.

The Company recognizes the funded status of each of its plans in the consolidated balance sheets. Amortization of unrecognized net gain or loss resulting from experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value) is included as a component of net periodic benefit cost for a year if, as of the beginning of the year, that unrecognized net gain or loss exceeds five percent of the greater of the projected benefit obligation or the market-related value of plan assets. If amortization is required, the amortization is that excess divided by the average remaining service period of participating employees expected to receive benefits under the plan.

The Company records a curtailment when an event occurs that significantly reduces the expected years of future service or eliminates the accrual of defined benefits for the future services of a significant number of employees. A curtailment gain is recorded when the employees who are entitled to the benefits terminate their employment; a curtailment loss is recorded when it becomes probable a loss will occur. Upon a settlement, the Company recognizes the proportionate amount of the unamortized gains and losses if the cost of all settlements during the year exceeds the interest component of net periodic cost for the affected plan. Expense from curtailments and settlements is recorded in selling and administrative expense on the consolidated statements of operations.

~~Recently Adopted Accounting Guidance~~

~~In April 2014,~~Noncontrolling Interests and Redeemable Noncontrolling Interests. Noncontrolling interests represent the ~~FASB issued Accounting Standards Update (ASU) 2014-08,~~ ~~Reporting Discontinued Operations~~portion of profit or loss, net assets and ~~Disclosures of Disposals of Components of an Entity~~ ~~(ASU 2014-08)~~, ~~which includes amendments~~comprehensive income that ~~change~~is not allocable to the ~~requirements for reporting discontinued operations~~Company. During 2018, 2017 and require additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Additionally, ASU 2014-08 requires expanded disclosures about discontinued operations2016, net income attributable to noncontrolling interests primarily represented guaranteed dividends that ~~will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. In the second quarter of 2014,~~ the Company ~~adopted ASU 2014-08. The adoption~~was obligated to pay to the noncontrolling shareholders of ~~this update did not have a material impact on the financial statements of the Company.~~Diebold Nixdorf AG.

~~Recently Issued Accounting Guidance~~

~~In May 2014,~~Noncontrolling interests with redemption features, such as put rights, that are not solely within the ~~FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(ASU 2014-09), which requires an entity to recognize the amount~~Company’s control are considered redeemable noncontrolling interests. Redeemable noncontrolling interests are presented outside of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard is effective for the Company on January 1, 2018. Early application is permittedequity on the ~~original adoption date~~Company's consolidated balance sheets. The balance of ~~January 1, 2017. The standard permits~~redeemable noncontrolling interests is reported at the ~~use~~greater of ~~either~~its carrying value or its maximum redemption value at each reporting date. Refer to note 12 for more information.

Acquired redeemable noncontrolling interests are recorded at fair value by applying the ~~retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements~~income approach using unobservable inputs for projected cash flows, including but not limited, to net sales and ~~related disclosures.~~ operating profit, and a discount rate, which are considered Level 3 inputs.

Related Party Transactions. The Company has certain strategic alliances that are not ~~yet selected~~consolidated. The Company tests these strategic alliances annually, individually and in aggregate, to determine materiality. The Company owns 40.0 percent of Inspur (Suzhou) Financial Information Technology Co., Ltd (Inspur JV) and 43.6 percent of Aisino-Wincor Retail & Banking Systems (Shanghai) Co., Ltd (Aisino JV) as of December 31, 2018. The Company engages in transactions in the ordinary course of business. The Company's strategic alliances are not significant subsidiaries and are accounted for under the equity method of investments. As of December 31, 2018, the Company had accounts receivable and accounts payable balances with these affiliates of $9.9 and $10.6, respectively, which is included in trade receivables, less allowances for doubtful accounts and accounts payable, respectively, on the consolidated balance sheets. During the fourth quarter of 2018, the Company recorded a ~~transition method nor has it determined the effect~~charge of $19.2 for its investment in its Aisino strategic alliance as a result of the ~~standard on~~weakening banking market in China. The charge was included in equity in (loss) earnings of unconsolidated subsidiaries, net in its ~~ongoing financial reporting.~~consolidated statements of operations.

In May 2017, the Company announced a strategic partnership with Kony, which is located in Texas, a leading enterprise mobility and application company, to offer white label mobile application solutions for financial institutions and retailers. The Company acquired a minority equity stake in Kony, which was accounted for using the cost method of accounting. As of December 31, 2018

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

~~In April 2015, the FASB issued ASU 2015-03,~~ ~~Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs~~ (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for the Company on January 1, 2016. The adoption of ASU 2015-03 is not expected to have a material impact on the financial statements of the Company.

~~In May 2015,~~and 2017, the ~~FASB issued ASU 2015-07,~~ ~~Fair Value Measurement (Topic 820):Disclosures for Investments~~Company's carrying value in ~~Certain Entities That Calculate Net Asset Value per Share or Its Equivalent~~ ~~(ASU 2015-07). The amendments in this update remove the requirement to categorize within~~Kony was $14.0 and the fair value ~~hierarchy all investments for which fair value is measured using~~was not estimated as there were no events or changes in circumstances in the ~~net asset value per share practical expedient.~~ investment.

Recently Adopted Accounting Guidance

The ~~amendments also remove~~effects of the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The standard is effective for the Company on January 1, 2016. The adoption of ~~ASU 2015-07 is~~the ASUs listed below did not ~~expected to have a material~~significantly impact on the Company's financial ~~statements of the Company.~~statements:



Standards Adopted	Description	Effective Date
ASU 2014-09, Revenue from Contracts with Customers	The standard replaced the most previously existing revenue recognition guidance in U.S. GAAP and required additional financial statement disclosures. The standard requires revenue to be recognized when the Company expects to be entitled in exchange for the transfer of promised goods or services to customers. The standard was adopted using a modified retrospective approach to open contracts as of the effective date, January 1, 2018. The standard is intended to reduce potential for diversity in practice at initial application and reducing the cost and complexity of applying Topic 606 both at transition and prospectively. As a result of the adoption, the cumulative increase to the Company's retained earnings at January 1, 2018 was $4.6.	January 1, 2018
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	The standard was issued to address the net presentation of the components of net benefit cost. The standard requires that service cost be presented in the same line item as other current employee compensation costs and that the remaining components of net benefit cost be presented in a separate line item outside of any subtotal for income from operations. The adoption of this update did not have a material impact on the financial statements of the Company.	January 1, 2018
ASU 2017-12, Derivatives and Hedging: Target Improvements to Accounting for Hedging Activities	The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. For existing hedges as of the date of the adoption, the Company eliminated a minimal amount of ineffectiveness by means of a cumulative-effect adjustment to accumulated other comprehensive income (AOCI) with a corresponding adjustment to retained earnings. As a result of the standard, $2.4 and $(0.6) were included in net sales and cost of sales, respectively, for the year ended December 31, 2018.	Early adopted January 1, 2018
ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The standard allows for reclassification of stranded tax effects on items resulting from the Tax Act from AOCI to retained earnings. Tax effects unrelated to the Tax Act are released from AOCI using either the specific identification approach or the portfolio approach based on the nature of the underlying item. As a result of the adoption, during the first quarter of 2018, the Company recorded an adjustment to retained earnings resulting in an increase of $29.0, with a corresponding decrease to AOCI due to the reduction in the corporate tax rate.	Early adopted January 1, 2018
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	The standard simplifies the measurement of goodwill by eliminating step 2 from the goodwill impairment test. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The adoption of this update did not have an impact on the financial statements of the Company and only simplifies the procedure for the goodwill impairment test.	Early adopted January 1, 2018
ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs pursuant to SEC Staff Accounting Bulleting No. 118	This guidance amends SEC paragraphs in Topic 740, Income Taxes, to reflect SAB 118, which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. The standard allowed registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to complexities involved in accounting for the enactment of the Tax Act. As of December 31, 2018, the Company has finalized the accounting under SAB 118 as required for the items previously considered provisional. Refer to Note 4 for further information.	January 1, 2018

~~In July 2015,~~Recently Issued Accounting Guidance

The Company has considered the recent ASUs issued by the FASB ~~issued ASU 2015-12,~~ ~~Plan Accounting: Defined Benefit Plan~~ ~~(Topic 960),~~ ~~Defined Contribution Pension Plans~~(Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient ~~(ASU 2015-12),~~summarized below, which is a three-part update with the objective of simplifying benefit plan reporting to make the information presented more useful to the reader. Part I designates contract value as the only required measure for fully benefit-responsive investment contracts (FBRIC). A FBRIC is a guaranteed investment contract between the plan and an issuer in which the issuer agrees to pay a predetermined interest rate and principal for a set amount deposited with the issuer. Part II simplifies the investment disclosure requirements for employee benefits plans. Part III provides an alternative measurement date for fiscal periods that do not coincide with a month-end date. This guidance is effective for fiscal years beginning after December 15, 2015. The amendments in Parts I and II of this standard are effective retrospectively. The standard is effective for the Company on January 1, 2016. The adoption of ASU 2015-12 is not expected to have a materialcould significantly impact ~~on the~~its financial ~~statements of the Company.~~statements:

~~In September 2015, the FASB issued ASU 2015-16,~~ ~~Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments~~ (ASU 2015-16). The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and presented separately on the face of the income statement or disclosed in the notes by line item. The standard is effective for the Company on January 1, 2016. The adoption of ASU 2015-16 is not expected to have a material impact on the financial statements of the Company.

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes~~ (ASU 2015-17). This amendment requires the presentation of deferred tax assets and liabilities to be categorized as noncurrent on the balance sheet, instead of being classified as current or noncurrent. The standard is effective for the Company for annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of ASU 2015-17 is not expected to have a material impact on the financial statements of the Company.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments - Overall (subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~ (ASU 2016-01). This amendment requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The amendment simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The amendment requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Additionally, the update requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and requires an entity to separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The standard is effective for the Company on December 15, 2017, with early adoption permitted.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

6362

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)



Standards Pending Adoption	Description	Effective/Adoption Date	Anticipated Impact
ASU's 2016-02, 2018-01, 2018-20, Leases	The standard requires that a lessee recognize on its balance sheet right-of-use assets and corresponding liabilities resulting from leasing transactions, as well as additional financial statement disclosures. Currently, U.S. GAAP only requires balance sheet recognition for leases classified as capital leases. The provisions of this update apply to substantially all leased assets. ASUs 2018-01 and 2018-20 are updates to this standard, which prescribe a practical expedient for implementation and narrow-scope improvements for lessors.	January 1, 2019	The Company evaluated the impact that the standard will have on its financial information and related disclosures. The standard requires a modified retrospective transition method with the option to elect a package of practical expedients, which the Company anticipates utilizing. The Company anticipates a significant balance sheet gross-up for the right-of-use assets and corresponding liabilities, with no anticipated impact to debt covenants. For additional information on the Company’s operating lease commitments, see Note 16. The Company does not expect the two updates have a significant impact on its financial statements.
ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The new standard gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income as a result of the tax reform. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance. The Company is currently evaluating the impact of adopting this guidance.	January 1, 2019	As noted above, the Company early adopted in 2018.
ASU 2018-13, Fair Value Measurement (Topic 820) -Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement	The standard is is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements.	January 1, 2020	The Company is currently assessing the impact this ASU will have on its consolidated financial statements. The ASU allows for early adoption in any interim period after issuance of the update.
ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606	The amendments in this update provide guidance on whether certain transactions between collaborative arrangement participants should be accounted for under Topic 606.	January 1, 2020	The Company is currently assessing the impact this ASU will have on its consolidated financial statements. The ASU allows for early adoption in any year end after issuance of the update.
ASU 2016-13, Financial Instruments - Credit Losses	The amendments in this update replace the incurred loss impairment methodology with the current expected credit loss methodology. This will change the measurement of credit losses on financial instruments and the timing of when such losses are recorded.	January 1, 2020	The Company is currently assessing the impact this ASU will have on its consolidated financial statements. The ASU allows for early adoption as of the fiscal years beginning after December 31, 2018.
ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General Subtopic 715-20 - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans	The standard is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit plans.	January 1, 2021	The Company is currently assessing the impact this ASU will have on its consolidated financial statements. The ASU allows for early adoption in any year end after issuance of the update.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 2: EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is based on the weighted-average number of common shares outstanding. Diluted earnings (loss) per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing earnings (loss) per share, non-vested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s participating securities include restricted stock units (RSUs), director deferred shares and shares that were vested but deferred by employees. The Company calculated basic and diluted earnings (loss) per share under both the treasury stock method and the two-class method. For the years presented there were no differences in the earnings (loss) per share amounts calculated using the two methods. Accordingly, the treasury stock method is disclosed below.

The following table represents amounts used in computing earnings (loss) per share and the effect on the weighted-average number of shares of dilutive potential common shares for the years ended December 31:

2015 2014 2013
Numerator
Income (loss) used in basic and diluted earnings (loss) per share
Income (loss) from continuing operations, net of tax $ 59.5
$ 107.3
$ (190.2 )
Income attributable to noncontrolling interests, net of tax 1.7
2.6
5.1
Income (loss) before discontinued operations, net of tax 57.8
104.7
(195.3 )
Income from discontinued operations, net of tax 15.9
9.7
13.7
Net income (loss) attributable to Diebold, Incorporated $ 73.7
$ 114.4
$ (181.6 )
Denominator
Weighted-average number of common shares used in basic earnings (loss) per share 64.9
64.5
63.7
Effect of dilutive shares ⁽¹⁾
0.7
0.7
—
Weighted-average number of shares used in diluted earnings (loss) per share 65.6
65.2
63.7
Basic earnings (loss) per share
Income (loss) before discontinued operations, net of tax $ 0.89
$ 1.62
$ (3.06 )
Income from discontinued operations, net of tax 0.24
0.15
0.21
Net income (loss) attributable to Diebold, Incorporated $ 1.13
$ 1.77
$ (2.85 )
Diluted earnings (loss) per share
Income (loss) before discontinued operations, net of tax $ 0.88
$ 1.61
$ (3.06 )
Income from discontinued operations, net of tax 0.24
0.15
0.21
Net income (loss) attributable to Diebold, Incorporated $ 1.12
$ 1.76
$ (2.85 )

Anti-dilutive shares
Anti-dilutive shares not used in calculating diluted weighted-average shares 1.5
1.1
2.6



	2018			2017			2016
Numerator
Income (loss) used in basic and diluted earnings (loss) per share
Loss from continuing operations, net of tax	$	(566.0	)	$	(213.9	)	$	(179.3	)
Net income attributable to noncontrolling interests, net of tax	2.7			27.6			6.0
Loss before discontinued operations, net of tax	(568.7		)	(241.5		)	(185.3		)
Income from discontinued operations, net of tax	—			—			143.7
Net loss attributable to Diebold Nixdorf, Incorporated	$	(568.7	)	$	(241.5	)	$	(41.6	)
Denominator
Weighted-average number of common shares used in basic and diluted earnings (loss) per share ⁽¹⁾	76.0			75.5			69.1
Basic and diluted earnings (loss) per share
Loss before discontinued operations, net of tax	$	(7.48	)	$	(3.20	)	$	(2.68	)
Income from discontinued operations, net of tax	—			—			2.08
Net loss attributable to Diebold Nixdorf, Incorporated	$	(7.48	)	$	(3.20	)	$	(0.60	)
Anti-dilutive shares
Anti-dilutive shares not used in calculating diluted weighted-average shares	4.5			3.4			2.1


⁽¹⁾	Incremental shares of ~~0.5~~0.7, 0.7 and 0.6 were excluded from the computation of diluted loss per share for the ~~year~~years ended December 31, ~~2013~~2018, 2017 and 2016, respectively, because their effect is anti-dilutive due to the loss from continuing operations.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 3: ~~ACCUMULATED OTHER COMPREHENSIVE LOSS~~SHARE-BASED COMPENSATION AND EQUITY

~~The following table summarizes~~

Dividends. On the ~~changes in~~basis of amounts declared and paid quarterly, the ~~Company’s accumulated other comprehensive loss (AOCI), net of tax, by component~~annualized dividends per share were $0.10, $0.40 and $0.96 for the ~~year~~years ended December ~~31:~~31, 2018, 2017 and 2016, respectively. In May 2018, the Company announced its decision to reallocate future dividend funds towards debt reduction and other capital resource needs.

Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-Retirement Benefits Unrealized Gain on Securities, Net Other Accumulated Other Comprehensive Loss
Balance at December 31, 2013 $ (2.4 ) $ (1.9 ) $ (1.0 ) $ (52.0 ) $ 2.7
$ 0.3
$ (54.3 )
Other comprehensive (loss) income before reclassifications ⁽¹⁾
(72.5 ) 0.5
0.7
(63.7 ) (0.5 ) —
(135.5 )
Amounts reclassified from AOCI —
—
(0.2 ) 1.7
(2.2 ) —
(0.7 )
Net current period other comprehensive (loss) income (72.5 ) 0.5
0.5
(62.0 ) (2.7 ) —
(136.2 )
Balance at December 31, 2014 $ (74.9 ) $ (1.4 ) $ (0.5 ) $ (114.0 ) $ —
$ 0.3
$ (190.5 )
Other comprehensive (loss) income before reclassifications ⁽¹⁾
(140.7 ) 6.4
0.8
2.1
—
0.1
(131.3 )
Amounts reclassified from AOCI —
—
(0.4 ) 4.1
—
—
3.7
Net current period other comprehensive (loss) income (140.7 ) 6.4
0.4
6.2
—
0.1
(127.6 )
Balance at December 31, 2015 $ (215.6 ) $ 5.0
$ (0.1 ) $ (107.8 ) $ —
$ 0.4
$ (318.1 )

⁽¹⁾Share-Based Compensation Cost. The Company recognizes costs resulting from all share-based payment transactions based on the fair market value of the award as of the grant date. Awards are valued at fair value and compensation cost is recognized on a straight-line basis over the requisite periods of each award. The Company estimated forfeiture rates are based on historical experience. To cover the exercise and/or vesting of its share-based payments, the Company generally issues new shares from its authorized, unissued share pool. The number of common shares that may be issued pursuant to the 2017 Equity and Performance Incentive Plan (the 2017 Plan) was 6.1, of which 3.6 shares were available for issuance at December 31, 2018.

Other comprehensive (loss) income before reclassifications within the translation component excludes losses of $0.6 and $1.2 and translation attributable to noncontrolling interests for December 31, 2015 and 2014, respectively.

The following table summarizes the ~~details about amounts reclassified from AOCI~~components of the Company’s employee and non-employee directors share-based compensation programs recognized as selling and administrative expense for the ~~year~~years ended December 31:

2015 2014
Amount Reclassified from AOCI Amount Reclassified from AOCI Affected Line Item in the Statement of Operations
Interest rate hedges (net of tax of $0.2 and $0.1, respectively) $ (0.4 ) $ (0.2 ) Interest expense
Pension and post-retirement benefits:
Net prior service benefit amortization (net of tax of $0.1 and $0.1, respectively) (0.1 ) (0.3 )
⁽¹⁾
Net actuarial losses recognized during the year (net of tax of $(2.7) and $(1.2), respectively) 4.2
2.0

⁽¹⁾
4.1
1.7

Unrealized loss on securities (net of tax of $(0.0) and $(0.0), respectively) —
(2.2 ) Investment income
Total reclassifications for the period $ 3.7
$ (0.7 )



	2018			2017			2016
Stock options
Pre-tax compensation expense	$	2.8		$	4.6		$	2.7
Tax benefit	(0.6		)	(1.3		)	(0.9		)
Stock option expense, net of tax	$	2.2		$	3.3		$	1.8

RSU's
Pre-tax compensation expense	$	19.8		$	16.4		$	10.7
Tax benefit	(4.3		)	(4.0		)	(3.1		)
RSU expense, net of tax	$	15.5		$	12.4		$	7.6

Performance shares
Pre-tax compensation expense	$	14.0		$	12.9		$	8.8
Tax benefit	(3.3		)	(3.0		)	(3.0		)
Performance share expense, net of tax	$	10.7		$	9.9		$	5.8

Total share-based compensation
Pre-tax compensation expense	$	36.6		$	33.9		$	22.2
Tax benefit	(8.2		)	(8.3		)	(7.0		)
Total share-based compensation, net of tax	$	28.4		$	25.6		$	15.2


⁽¹⁾	~~Pension and other post-retirement benefits AOCI components are included in the computation of net periodic benefit cost (refer to note 13 to the consolidated financial statements).~~

The following table summarizes information related to unrecognized share-based compensation costs as of December 31, 2018:



	Unrecognized Cost		Weighted-Average Period
			(years)
Stock options	$	1.3	1.2
RSUs	12.3		1.2
Performance shares	12.1		1.6
	$	25.7

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

SHARE-BASED COMPENSATION AWARDS

Stock options, RSUs and performance shares have been issued to officers and other management employees under the Company’s Amended and Restated 1991 Equity and Performance Incentive Plan (as amended and restated as of February 12, 2014) (the 1991 Plan) and the 2017 Plan. Certain awards have accelerated vesting clauses that result in a non-substantive vesting requirement, which results in either immediate or accelerated expense.

Stock Options

Stock options generally vest after a one- to three-year period and have a maturity of ten years from the issuance date. Option exercise prices equal the closing price of the Company’s common shares on the date of grant. The estimated fair value of the options granted was calculated using a Black-Scholes option pricing model using the following assumptions:



	2018		2017		2016
Expected life (in years)	3		3		6
Weighted-average volatility	36	%	31	%	28	%
Risk-free interest rate	2.39-2.42%		1.28	%	1.50	%
Expected dividend yield	2.24	%	1.65	%	3.10	%

The Company uses historical data to estimate option exercise timing within the valuation model. Employees with similar historical exercise behavior with regard to timing and forfeiture rates are considered separately for valuation and attribution purposes. Expected volatility is based on historical volatility of the price of the Company’s common shares over the expected life of the equity instrument. The risk-free rate of interest is based on a zero-coupon U.S. government instrument over the expected life of the equity instrument. The expected dividend yield is based on actual dividends paid per share and the price of the Company’s common shares. The options granted in 2018 were granted prior to the dividend cancellation and include the expected dividend at the time of the grant date.

Options outstanding and exercisable as of December 31, 2018 and changes during the year ended were as follows:



	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
			(per share)		(in years)
Outstanding at January 1, 2018	2.3		$	29.68
Expired or forfeited	(0.3	)	$	29.50
Granted	0.5		$	17.53
Outstanding at December 31, 2018	2.5		$	27.05	7	$	—
Options exercisable at December 31, 2018	1.5		$	30.34	6	$	—
Options vested and expected to vest ⁽²⁾ at December 31, 2018	2.4		$	27.21	7	$	—

⁽¹⁾

The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company’s closing share price on the last trading day of the year in 2018 and the exercise price, multiplied by the number of “in-the-money” options) that would have been received by the option holders had all option holders exercised their options on December 31, 2018. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common shares.


⁽²⁾	The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding non-vested options.

The aggregate intrinsic value of options exercised was minimal for the years ended December 31, 2018 and 2017, and 2016. The weighted-average, grant-date fair value of stock options granted for the years ended December 31, 2018, 2017 and 2016 was $4.21, $4.57 and $5.37, respectively. Total fair value of stock options vested during the years ended December 31, 2018, 2017 and 2016 was $3.0, $2.4 and $2.6, respectively. There were no options exercised during the year end December 31, 2018. Exercise of options during the years ended December 31, 2017 and 2016 resulted in cash receipts of $0.3 and $0.3, respectively.

Restricted Stock Units

Each RSU provides for the issuance of one common share of the Company at no cost to the holder and are granted to both employees and non-employee directors. RSUs granted to employees prior to 2016 vest after a three-year period. RSUs granted to employees during or after 2016 ratably vest per annum over a three-year period and for non-employee directors cliff vest after

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

one year. During the vesting period, employees and non-employee directors are paid the cash equivalent of dividends on RSUs. Non-vested employee RSUs are forfeited upon termination unless the Board of Directors determines otherwise.

Non-vested RSUs outstanding as of December 31, 2018 and changes during the year ended were as follows:



	Number of Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2018	1.3		$	27.76
Forfeited	(0.3	)	$	21.87
Vested	(0.7	)	$	28.76
Granted ⁽¹⁾	1.3		$	17.34
Non-vested at December 31, 2018	1.6		$	19.66


⁽¹⁾	The RSUs granted during the year ended December 31, 2018 included 0.1one-year RSUs to non-employee directors under the 1991 Plan. These RSUs had a weighted-average, grant-date fair value of $14.98.

The weighted-average grant-date fair value of RSUs granted for the years ended December 31, 2018, 2017 and 2016 was $17.34, $26.81 and $26.77, respectively. The total fair value of RSUs vested during the years ended December 31, 2018, 2017 and 2016 was $18.9, $13.9 and $7.2, respectively.

Performance Shares

Performance shares are granted to employees and vest based on the achievement of certain performance objectives, as determined by the Board of Directors each year. The estimated fair value of certain performance shares granted was calculated using the Monte Carlo simulation method. Each performance share earned entitles the holder to one common share of the Company. The Company's performance shares include performance objectives that are assessed after a three-year period as well as performance objectives that are assessed annually over a three-year period. No shares are vested unless certain performance threshold objectives are met.

Non-vested performance shares outstanding as of December 31, 2018 and changes during the year ended were as follows:



	Number of Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2018 ⁽¹⁾	2.5		$	31.37
Forfeited	(0.9	)	$	28.81
Vested	(0.2	)	$	32.38
Granted	1.6		$	22.65
Non-vested at December 31, 2018	3.0		$	26.90


⁽¹⁾	Non-vested performance shares are based on a maximum potential payout. Actual shares vested at the end of the performance period may be less than the maximum potential payout level depending on achievement of the performance objectives, as determined by the Board of Directors.

The weighted-average grant-date fair value of performance shares granted for the years ended December 31, 2018, 2017 and 2016 was $22.65, $31.31 and $26.99, respectively. The total fair value of performance shares vested during the years ended December 31, 2018, 2017 and 2016 was $5.5, $3.6 and $3.1, respectively.

Director Deferred Shares

The Company has a minimal amount of deferred shares which are both vested and outstanding that were issued to non-employee directors under the 1991 Plan and will be issued at the end of the deferral period.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 4: INCOME TAXES

The following table presents components of loss from continuing operations before taxes for the years ended December 31:



	2018			2017			2016
Domestic	$	(300.9	)	$	(212.6	)	$	(219.2	)
Foreign	(214.7		)	20.7			(29.5		)
Total	$	(515.6	)	$	(191.9	)	$	(248.7	)

The following table presents the components of income tax (benefit) expense for the years ended December 31:



	2018			2017			2016
Current
U.S. federal	$	0.8		$	(5.9	)	$	(68.6	)
Foreign	49.0			72.9			54.0
State and local	1.9			1.7			(10.6		)
Total current	51.7			68.7			(25.2		)
Deferred
U.S. federal	4.6			7.6			3.6
Foreign	(19.8		)	(44.9		)	(50.2		)
State and local	0.7			(3.1		)	2.8
Total deferred	(14.5		)	(40.4		)	(43.8		)
Income tax expense (benefit)	$	37.2		$	28.3		$	(69.0	)

In addition to the income tax expense (benefit) listed above for the years ended December 31, 2018, 2017 and 2016, income tax expense (benefit) allocated directly to shareholders equity for the same periods was $4.8, $7.2 and $(1.8), respectively. The income tax expense (benefit) allocated directly to shareholders equity for the years ended December 31, 2018, 2017 and 2016 also includes expense of $11.6, $9.9 and $7.7, respectively, related to current year movement in valuation allowance. Income tax expense (benefit) allocated to discontinued operations for the year ended December 31, 2016 was $93.9.

Income tax expense (benefit) attributable to loss from continuing operations before taxes differed from the amounts computed by applying the U.S. federal income tax rate of 21 percent to pre-tax loss from continuing operations for year ended December 31, 2018 as a result of the Tax Act. The applicable U.S. federal rate of 35 percent to pre-tax loss from continuing operations was used for the years ended December 31, 2017 and 2016. The following table presents these differences for the years ended December 31:



	2018			2017			2016
Statutory tax benefit	$	(108.3	)	$	(67.2	)	$	(87.0	)
Brazil non-taxable incentive	(3.8		)	(3.9		)	(5.8		)
Valuation allowances	80.6			10.5			14.9
Goodwill impairment	41.8			—			—
Foreign tax rate differential	(33.7		)	(31.5		)	(10.0		)
Foreign subsidiary earnings	4.9			14.4			13.7
Accrual adjustments	3.1			4.1			1.1
Tax Act - rate impact on deferred tax balance	(2.5		)	45.1			—
Tax Act - deemed repatriation tax	32.6			36.6			—
Business tax credits	(1.1		)	(0.6		)	(0.7		)
Non-deductible (non-taxable) items	18.9			22.1			4.5
Other	4.7			(1.3		)	0.3
Income tax expense (benefit)	$	37.2		$	28.3		$	(69.0	)

The Tax Act was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax on earnings for certain foreign subsidiaries and created new

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

taxes on certain foreign sourced earnings. Due to the complexities involved in accounting for the enacted Tax Act, the Company applied the guidance in SAB 118 and a reasonable estimate of the impacts was included for the year ended December 31, 2017. At December 31, 2017, the Company recorded a non-cash charge to tax expense of $81.7 of which $45.1 represented the reduction to deferred income taxes for the income tax rate change and $36.6 related to the one-time transition tax on deferred foreign earnings. As of December 31, 2018, the Company completed the accounting as required under SAB 118 for items previously considered provisional. While the Company was able to make an estimate of the transition tax for 2017, it continued to gather additional information to more precisely compute the amount reported on its 2017 U.S. Federal tax return which was filed in the fourth quarter of 2018. Additionally, the Company was affected by other analyses related to the Tax Act. Transition tax was $41.1 greater than the Company’s initial estimate and was included in tax expense for 2018. Likewise, while the Company was able to make an estimate of the impact of the reduction to the corporate tax rate, in 2018 the Company recorded additional tax benefits of $2.5 as a result of adjustments made to federal temporary differences including a pension contribution made in 2018 that was deductible for 2017 at the higher 35 percent federal tax rate. In 2018, the Company also recorded a tax benefit of $8.5 related to the one-time transition tax for a fiscal year foreign subsidiary. The Company will continue to analyze the full effects of the Tax Act on its financial statements as additional guidance is issued and interpretations evolve.

The effective tax rate for 2018 was 7.2 percent and is primarily due to a goodwill impairment charge, impacts of the Tax Act, valuation allowances on certain foreign and state jurisdictions, foreign tax credits and the higher interest expense burden resulting from the debt restructuring. More specifically, the expense on the loss reflects the reduction of the U.S. federal corporate income tax rate from 35 percent to 21 percent, refinement of the transition tax under SAB 118, a goodwill impairment charge, which for tax purposes is primarily nondeductible and the business interest deduction limitation. As a result of the Company’s debt restructuring activity during the year, a full valuation allowance was required on the current year nondeductible business interest expense. The overall effective tax rate is also impacted by the jurisdictional income (loss) and varying respective statutory rates which is reflected in the foreign tax rate differential caption of the rate reconciliation.

The effective tax rate for 2017 was 14.7 percent on the overall loss from continued operations and is primarily driven by the provisional impacts of the Tax Act. In addition to the impact of the Tax Act, the overall effective tax rate is impacted by the jurisdictional income (loss) and varying respective statutory rates which is reflected in the foreign tax rate differential caption of the rate reconciliation.

The Company recognizes the benefit of tax positions taken or expected to be taken in its tax returns in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by authorities. Recognized tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement.

Details of the unrecognized tax benefits are as follows:



	2018			2017
Balance at January 1	$	48.4		$	43.2
Increases (decreases) related to prior year tax positions, net	(1.5		)	6.1
Increases related to current year tax positions	4.8			7.5
Settlements	(1.5		)	(1.8		)
Reductions due to lapse of applicable statute of limitations	(0.7		)	(6.6		)
Balance at December 31	$	49.5		$	48.4

The entire amount of unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate.

The Company classifies interest expense and penalties related to the underpayment of income taxes in the consolidated financial statements as income tax expense. Consistent with the treatment of interest expense, the Company accrues interest income on overpayments of income taxes where applicable and classifies interest income as a reduction of income tax expense in the consolidated financial statements. As of December 31, 2018 and 2017, accrued interest and penalties related to unrecognized tax benefits totaled $6.3 and $5.5, respectively.

It is reasonably possible that the total amount of unrecognized tax benefits will change during the next 12 months. The Company does not expect those changes to have a significant impact on its consolidated financial statements. The expected timing of payments cannot be determined with any degree of certainty.

During 2018, the Internal Revenue Service (IRS) issued the final Revenue Agent’s Report (RAR) for the tax year 2013 for the Company’s U.S. federal income tax return. The Company agreed to a draft RAR in 2017, effectively settling the findings and accruing all amounts. At December 31, 2018, the Company is under audit by the IRS for the tax year ended December 31, 2016. The Company believes it has adequately provided for any related uncertain tax positions. There are no other outstanding audits by the IRS and

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

all U.S. federal tax years prior to 2014 are closed by statute. The company is subject to tax examination in various U.S. state jurisdictions for tax years 2012 to the present, as well as various foreign jurisdictions for tax years 2011 to the present.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities at December 31 are as follows:



	2018			2017
Deferred tax assets
Accrued expenses	$	64.0		$	43.0
Warranty accrual	6.7			13.5
Deferred compensation	9.6			10.6
Allowances for doubtful accounts	3.2			3.8
Inventories	23.9			14.4
Deferred revenue	28.6			38.1
Pensions, post-retirement and other benefits	76.9			82.6
Tax credits	74.1			81.9
Net operating loss carryforwards (NOL's)	160.0			125.9
Capital loss carryforwards	2.6			2.6
State deferred taxes	19.8			17.4
Other	—			0.8
	469.4			434.6
Valuation allowances	(175.4		)	(105.6		)
Net deferred tax assets	$	294.0		$	329.0

Deferred tax liabilities
Property, plant and equipment, net	$	3.5		$	1.2
Goodwill and intangible assets	245.9			302.8
Undistributed earnings	20.6			16.0
Other	1.7			2.3
Net deferred tax liabilities	271.7			322.3
Net deferred tax asset	$	22.3		$	6.7

Deferred income taxes reported in the consolidated balance sheets as of December 31 are as follows:



	2018			2017
Deferred income taxes - assets	$	243.9		$	293.8
Deferred income taxes - liabilities	(221.6		)	(287.1		)
Net deferred tax asset	$	22.3		$	6.7

As of December 31, 2018, the Company had domestic and international NOLs of $964.8, resulting in an NOL deferred tax asset of $160.0. Of these NOL carryforwards, $647.2 expire at various times between 2019 and 2039 and $317.6 does not expire. At December 31, 2018, the Company had a domestic foreign tax credit carryforward resulting in a deferred tax asset of $68.4 that will expire between 2020 and 2029 and a general business credit carryforward resulting in a deferred tax asset of $5.7 that will expire between 2035 and 2039.

The Company recorded a valuation allowance to reflect the estimated amount of certain foreign and state deferred tax assets that, more likely than not, will not be realized. The net change in total valuation allowance for the years ended December 31, 2018 and 2017 was an increase of $69.8 and $17.8, respectively. The 2018 valuation allowance increase is driven primarily by current year domestic interest expense in which a full valuation allowance has been placed, domestic foreign tax credits scheduled to expire as well as certain foreign jurisdictions which are now in a three year cumulative loss position.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

For the years ended December 31, 2018 and 2017, provisions were made for foreign withholding taxes and estimated foreign income taxes which may be incurred upon the remittance of certain undistributed earnings in foreign subsidiaries and foreign unconsolidated affiliates. Provisions have not been made for income taxes on $865.4 of undistributed earnings at December 31, 2018 in foreign subsidiaries and corporate joint ventures that were deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings.

NOTE 5: INVENTORIES

The following table summarizes the major classes of inventories as of December 31:



	2018		2017
Finished goods	$	211.2	$	291.0
Service parts	221.6		259.4
Raw materials and work in process	177.3		164.1
Total inventories	$	610.1	$	714.5

During 2018, the Company re-assessed its inventory and recorded a charge of $74.5 of various finished goods, service parts, and excess and obsolete inventory due to streamlining the Company's product portfolio and optimizing the manufacturing footprint. For December 31, 2017, the Company corrected an immaterial error of $10.9, $11.2 and $0.4 for finished goods, service parts, and raw materials and work in process, respectively, refer to note 1 for additional details.

NOTE ~~4: SHARE-BASED COMPENSATION~~6: PROPERTY, PLANT AND ~~EQUITY~~

~~Dividends.~~ ~~On the basis of amounts declared and paid quarterly, the annualized dividends per share were $1.15 a for the years ended December 31, 2015, 2014 and 2013, respectively.~~

~~Share-Based Compensation Cost.~~ The Company recognizes costs resulting from all share-based payment transactions based on the fair market value of the award as of the grant date. Awards are valued at fair value and compensation cost is recognized on a straight-line basis over the requisite periods of each award. The Company estimated forfeiture rates are based on historical experience. To cover the exercise and/or vesting of its share-based payments, the Company generally issues new shares from its authorized, unissued share pool. The number of common shares that may be issued pursuant to the Amended and Restated 1991 Equity and Performance Incentive Plan (as amended and restated as of February 12, 2014) (1991 Plan) was 8.6, of which 5.0 shares were available for issuance at ~~December 31, 2015~~.EQUIPMENT

The following ~~table summarizes the components~~is a summary of ~~the Company’s employee~~property, plant and ~~non-employee share-based compensation programs recognized~~equipment, at cost less accumulated depreciation and amortization as ~~selling and administrative expense for the years ended~~of December 31:

2015 2014 2013
Stock options
Pre-tax compensation expense $ 3.6
$ 2.7
$ 6.0
Tax benefit (1.3 ) (1.0 ) (2.2 )
Stock option expense, net of tax $ 2.3
$ 1.7
$ 3.8

Restricted stock units
Pre-tax compensation expense $ 8.6
$ 6.0
$ 5.6
Tax benefit (2.4 ) (1.9 ) (1.7 )
RSU expense, net of tax $ 6.2
$ 4.1
$ 3.9

Performance shares
Pre-tax compensation expense $ 0.2
$ 12.5
$ 2.2
Tax benefit (0.1 ) (4.2 ) (0.8 )
Performance share expense, net of tax $ 0.1
$ 8.3
$ 1.4

Director deferred shares
Pre-tax compensation expense $ —
$ 0.3
$ 1.1
Tax benefit —
(0.1 ) (0.4 )
Director deferred share expense, net of tax $ —
$ 0.2
$ 0.7

Total share-based compensation
Pre-tax compensation expense $ 12.4
$ 21.5
$ 14.9
Tax benefit (3.8 ) (7.2 ) (5.1 )
Total share-based compensation, net of tax $ 8.6
$ 14.3
$ 9.8

~~The following table summarizes information related to unrecognized share-based compensation costs as of~~ ~~December 31, 2015~~:

Unrecognized
Cost Weighted-Average Period
(years)
Stock options $ 2.9
1.3
RSUs 12.1
1.8
Performance shares 4.9
1.7
$ 19.9

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~SHARE-BASED COMPENSATION AWARDS~~

~~Stock options, RSUs, restricted shares and performance shares have been issued to officers and other management employees under the Company’s 1991 Plan.~~

~~Stock Options~~

Stock options generally vest after a one- to five-year period and have a maturity of ten years from the issuance date. Option exercise prices equal the closing price of the Company’s common shares on the date of grant. The estimated fair value of the options granted was calculated using a Black-Scholes option pricing model using the following assumptions:

2015 2014 2013
Expected life (in years) 6
5
6
Weighted-average volatility 31 % 31 % 38 %
Risk-free interest rate 1.50 % 1.47-1.66%
1.08-1.27%
Expected dividend yield 3.12 % 3.59 % 3.23-3.59%

The Company uses historical data to estimate option exercise timing within the valuation model. Employees with similar historical exercise behavior with regard to timing and forfeiture rates are considered separately for valuation and attribution purposes. Expected volatility is based on historical volatility of the price of the Company’s common shares. The risk-free rate of interest is based on a zero-coupon U.S. government instrument over the expected life of the equity instrument. The expected dividend yield is based on actual dividends paid per share and the price of the Company’s common shares.

~~Options outstanding and exercisable as of~~ ~~December 31, 2015~~ ~~and changes during the year ended were as follows:~~

Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term
Aggregate Intrinsic Value ⁽¹⁾

(per share) (in years)
Outstanding at January 1, 2015 1.6
$ 37.11

Expired or forfeited (0.3 ) $ 48.64

Exercised (0.1 ) $ 29.55

Granted 0.5
$ 32.33

Outstanding at December 31, 2015 1.7
$ 34.21
7 $ 0.2
Options exercisable at December 31, 2015 0.9
$ 35.47
5 $ 0.2
Options vested and expected to vest ⁽²⁾ at December 31, 2015
1.6
$ 34.25
7 $ 0.2



	Estimated Useful Life (years)	2018		2017
Land and land improvements	⁽¹⁾	$	15.6	$	16.0
Buildings and building improvements	15-30	122.2		112.9
Machinery, tools and equipment	5-12	99.6		108.2
Leasehold improvements ⁽²⁾	10	26.9		28.3
Computer equipment	3	174.5		153.8
Computer software	5-10	142.9		146.6
Furniture and fixtures	5-8	70.3		73.4
Tooling	3-5	140.9		136.4
Construction in progress		5.3		7.7
Total property plant and equipment, at cost		$	798.2	$	783.3
Less accumulated depreciation and amortization		494.1		418.8
Total property plant and equipment, net		$	304.1	$	364.5

⁽¹⁾

~~The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company’s closing share price on the last trading day of the year in~~ ~~2015~~Estimated useful life for land and ~~the exercise price, multiplied by the number of “in-the-money” options) that would have been received by the option holders had all option holders exercised their options on~~ ~~December 31, 2015. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common shares.~~

land improvements is perpetual and 15 years, respectively.


⁽²⁾	The ~~expected to vest options are~~estimated useful life for leasehold improvements is the ~~result~~lesser of ~~applying~~10 years or the ~~pre-vesting forfeiture rate assumption to total outstanding non-vested options.~~term of the lease.

~~The aggregate intrinsic value of options exercised for the years ended~~During ~~December 31, 2015~~2018, ~~2014~~2017 and ~~2013~~2016, depreciation expense, computed on a straight-line basis over the estimated useful lives of the related assets, was ~~$0.7,~~ $~~2.1~~105.3, $92.9 and $~~2.1~~61.8, respectively. The ~~weighted-average grant-date fair value of stock options granted for~~increase in computer equipment reflects the ~~years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $7.04,~~ ~~$6.75~~ ~~and~~ ~~$7.79, respectively. Total fair value of stock options vested during the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $2.7,~~ ~~$1.8~~ ~~and~~ ~~$8.0, respectively. Exercise of options during the year ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~resulted~~Company's investment in ~~cash receipts of~~ ~~$3.5~~, ~~$14.6~~ ~~and~~ ~~$16.7, respectively.~~its IT infrastructure.

~~Restricted Stock Units~~

Each RSU provides for the issuance of one common share of the Company at no cost to the holder and are granted to both employees and non-employee directors. RSUs for employees vest after a three- or seven-year period and for non-employee directors vest after one year. During the vesting period, employees and non-employee directors are paid the cash equivalent of dividends on RSUs. Non-vested employee RSUs are forfeited upon termination unless the Board of Directors determines otherwise.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~Non-vested RSUs outstanding as of~~ ~~December 31, 2015~~ ~~and changes during the year ended were as follows:~~

Number of
Shares Weighted-Average
Grant-Date
Fair Value
Non-vested at January 1, 2015 0.7
$ 33.72
Forfeited (0.1 ) $ 33.64
Vested (0.2 ) $ 36.03
Granted ⁽¹⁾
0.5
$ 32.74
Non-vested at December 31, 2015 0.9
$ 32.53


⁽¹⁾	~~The RSUs granted during the year ended~~ ~~December 31, 2015~~ ~~include~~ ~~33 thousand~~1~~-year RSUs to non-employee directors under the 1991 Plan. These RSUs have a weighted-average grant-date fair value between~~ ~~$33.85~~ ~~and~~ ~~$35.92~~.

~~The weighted-average grant-date fair value of RSUs granted for the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $32.74~~, ~~$35.25~~ ~~and~~ ~~$30.14, respectively. The total fair value of RSUs vested during the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $6.4,~~ ~~$4.4~~ ~~and~~ ~~$9.2, respectively.~~

~~Performance Shares~~

Performance shares are granted to employees and vest based on the achievement of certain performance objectives, as determined by the Board of Directors each year. Each performance share earned entitles the holder to ~~one~~ common share of the Company. The Company's performance shares include performance objectives are assessed after a three-year period as well as performance objectives that are assessed annually over a three-year period. No shares are vested unless certain performance threshold objectives are met.

~~Non-vested performance shares outstanding as of December 31, 2015 and changes during the year ended were as follows:~~

Number of
Shares Weighted-Average
Grant-Date
Fair Value
Non-vested at January 1, 2014 ⁽¹⁾
1.1
$ 37.38
Forfeited (0.7 ) $ 34.72
Vested (0.1 ) $ 35.55
Granted 0.5
$ 32.50
Non-vested at December 31, 2015 0.8
$ 34.06


⁽¹⁾	Non-vested performance shares are based on a maximum potential payout. Actual shares vested at the end of the performance period may be less than the maximum potential payout level depending on achievement of the performance objectives, as determined by the Board of Directors.

~~The weighted-average grant-date fair value of performance shares granted for the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was~~ ~~$32.50~~, ~~$38.07~~ ~~and~~ ~~$29.15, respectively. The total fair value of performance shares vested during the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $5.1,~~ ~~$0.0~~ ~~and~~ ~~$1.1, respectively.~~

~~Director Deferred Shares~~

Deferred shares have been issued to non-employee directors under the 1991 Plan. Deferred shares provide for the issuance of one common share of the Company at no cost to the holder. Deferred shares vest in either a six- or twelve-month period and are issued at the end of the deferral period. During the vesting period and until the common shares are issued, non-employee directors are paid the cash equivalent of dividends on deferred shares.

As of December 31, 2015, there were 0.1 non-employee director deferred shares vested and outstanding. There were no deferred shares granted in 2015 or 2014. The weighted-average grant-date fair value of deferred shares granted for the year ended December 31, 2013 was $29.73 per share. The aggregate intrinsic value of deferred shares released during the years ended December 31, 2015, 2014 and 2013 was $0.2, $0.1 and $1.0, respectively. Total fair value of deferred shares vested for the years ended December 31, 2015, 2014 and 2013 was $0.0, $0.9 and $1.1, respectively.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~Other Non-employee Share-Based Compensation~~

In connection with the acquisition of Diebold Colombia, S.A., in December 2005, the Company issued warrants to purchase 0.1 common shares with an exercise price of $46.00 per share and grant-date fair value of $14.66 per share. The grant-date fair value of the warrants was valued using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 4.45 percent, dividend yield of 1.63 percent, expected volatility of 30 percent, and contractual life of six years. The warrants will expire in December 2016.

NOTE ~~5: INCOME TAXES~~

~~The following table presents components of income (loss) from continuing operations before income taxes for the years ended December 31:~~

2015 2014 2013
Domestic $ (56.6 ) $ (15.3 ) $ (193.1 )
Foreign 102.4
170.0
51.3
Total $ 45.8
$ 154.7
$ (141.8 )

~~The following table presents the components of income tax (benefit) expense from continuing operations for the years ended December 31:~~

2015 2014 2013
Current
U.S. federal $ (2.0 ) $ 0.3
$ 3.2
Foreign 38.2
61.5
59.3
State and local (0.6 ) —
2.4
Total current 35.6
61.8
64.9
Deferred
U.S. federal (38.3 ) (2.6 ) (20.2 )
Foreign (11.1 ) (9.4 ) 9.7
State and local 0.1
(2.4 ) (6.0 )
Total deferred (49.3 ) (14.4 ) (16.5 )
Income tax (benefit) expense $ (13.7 ) $ 47.4
$ 48.4

In addition to the income tax (benefit) expense listed above for the years ended December 31, 2015, 2014 and 2013, income tax expense (benefit) allocated directly to shareholders equity for the same periods was $5.4, $(38.5) and $67.4, respectively. Offsetting the income tax expense (benefit) allocated directly to shareholders equity for the years ended December 31, 2015, 2014 and 2013 was a benefit of $20.4, $9.2 and $9.0, respectively, related to current year movement in valuation allowance. Income tax expense allocated to discontinued operations for the years ended December 31, 2015, 2014 and 2013 was $9.6, $6.2 and $8.3, respectively.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

Income tax (benefit) expense attributable to income (loss) from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35 percent to pretax income (loss) from continuing operations. The following table presents these differences for the years ended December 31:

2015 2014 2013
Statutory tax expense (benefit) $ 16.0
$ 54.1
$ (49.6 )
Brazil non-taxable incentive (4.2 ) (15.5 ) (7.8 )
Valuation allowance (0.7 ) 9.5
43.9
Brazil tax goodwill amortization —
(1.5 ) (3.8 )
Foreign tax rate differential (19.4 ) (14.9 ) (12.4 )
Foreign subsidiary earnings (9.1 ) 14.6
59.3
Accrual adjustments 1.5
2.2
5.8
Non-deductible goodwill —
—
5.2
FCPA provision, nondeductible portion —
—
5.4
Business tax credits (1.4 ) (2.4 ) (2.1 )
Non-deductible (non-taxable) items 4.2
—
5.4
Other (0.6 ) 1.3
(0.9 )
Income tax (benefit) expense $ (13.7 ) $ 47.4
$ 48.4

In 2015, the repatriation of foreign earnings, the associated recognition of foreign tax credits and related benefits due to the passage of the Protecting Americans from Tax Hikes (PATH) Act of 2015, were recorded.

In the second quarter of 2013, the Company recorded a valuation allowance for the Brazil manufacturing subsidiary due to a change in circumstances including lower profitability in core operations, lower anticipated taxable income and an unfavorable business outlook. The Company also changed its assertion regarding the indefinite reinvestment of foreign subsidiary earnings due primarily to forecasted cash needs within the United States and strategic decisions related to the Company’s capital structure. As a result, the Company recorded current and deferred tax expense (net of related foreign tax credits) due to the repatriation of earnings of approximately $55.0.

~~Details of the unrecognized tax benefits are as follows:~~

2015 2014
Balance at January 1 $ 15.0
$ 16.6
Decreases related to prior year tax positions (0.4 ) 0.3
Increases related to current year tax positions 0.9
0.7
Settlements (0.2 ) (2.5 )
Reduction due to lapse of applicable statute of limitations (2.2 ) (0.1 )
Balance at December 31 $ 13.1
$ 15.0

~~The entire amount of unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate.~~

The Company classifies interest expense and penalties related to the underpayment of income taxes in the consolidated financial statements as income tax expense. Consistent with the treatment of interest expense, the Company accrues interest income on overpayments of income taxes where applicable and classifies interest income as a reduction of income tax expense in the consolidated financial statements. As of December 31, 2015 and 2014, accrued interest and penalties related to unrecognized tax benefits totaled approximately $7.2 and $7.4, respectively.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

As of December 31, 2015, the Company is under audit by the Internal Revenue Service (IRS) for tax years ended December 31, 2011, 2012 and 2013. During the year ended December 31, 2014, the IRS completed its examination of the Company’s U.S. federal income tax returns for the years 2008-2010 and issued a Revenue Agent’s Report (RAR). The net tax deficiency, excluding interest, associated with the RAR is $6.3 after net operating loss utilization. The Company appealed the findings in the RAR and a preliminary agreement was reached in 2015. The Company believes it has adequately provided for any related uncertain tax positions. All federal tax years prior to 2005 are closed by statute. The Company is subject to tax examination in various U.S. state jurisdictions for tax years 2009 to the present, as well as various foreign jurisdictions for tax years 2008 to the present.

2015 2014
Deferred tax assets
Accrued expenses $ 40.8
$ 56.7
Warranty accrual 22.0
35.6
Deferred compensation 14.0
15.8
Allowance for doubtful accounts 11.9
9.1
Inventories 12.7
14.1
Deferred revenue 20.1
12.5
Pension and post-retirement benefits 70.4
73.0
Tax credits 62.5
33.4
Net operating loss carryforwards 58.5
68.9
Capital loss carryforwards 1.9
—
State deferred taxes 16.3
17.4
Other 12.1
3.4
343.2
339.9
Valuation allowance (63.9 ) (88.0 )
Net deferred tax assets $ 279.3
$ 251.9

Deferred tax liabilities
Property, plant and equipment $ 20.5
$ 18.3
Goodwill and intangible assets 17.6
17.5
Partnership interest 7.7
13.1
Undistributed earnings 7.3
14.3
Net deferred tax liabilities 53.1
63.2
Net deferred tax asset $ 226.2
$ 188.7

~~Deferred income taxes reported in the consolidated balance sheets as of December 31 are as follows:~~

2015 2014
Deferred income taxes - current assets $ 168.8
$ 111.0
Deferred income taxes - long-term assets 65.3
86.5
Other current liabilities (6.0 ) (2.3 )
Deferred income taxes - long-term liabilities (1.9 ) (6.5 )
Net deferred tax asset $ 226.2
$ 188.7

At December 31, 2015, the Company had domestic and international net operating loss (NOL) carryforwards of $422.4, resulting in an NOL deferred tax asset of $58.5. Of these NOL carryforwards, $300.3 expire at various times between 2016 and 2036 and

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

$122.1 does not expire. At December 31, 2015, the Company had a domestic foreign tax credit carryforward resulting in a deferred tax asset of $50.3 that will expire between 2020 and 2026 and a general business credit carryforward resulting in a deferred tax asset of $12.0 that will expire between 2030 and 2036.

The Company recorded a valuation allowance to reflect the estimated amount of certain foreign and state deferred tax assets that, more likely than not, will not be realized. The net change in total valuation allowance for the years ended December 31, 2015 and 2014 was a decrease of $24.1 and an increase of $0.2, respectively. The 2015 valuation allowance decrease is currency driven relating mostly to the weakening of the Brazil real.

For the years ended December 31, 2015 and 2014, provisions were made for foreign withholding taxes and estimated U.S. income taxes, less available tax credits, which may be incurred upon the remittance of certain undistributed earnings in foreign subsidiaries and foreign unconsolidated affiliates. Provisions have not been made for income taxes on approximately $554.8 of undistributed earnings at December 31, 2015 in foreign subsidiaries and corporate joint ventures that are deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings.

~~NOTE 6:~~7: INVESTMENTS

The Company’s investments, primarily in Brazil, consist of certificates of deposit that are classified as available-for-sale and stated at fair value based upon quoted market prices. Unrealized gains and losses are recorded in AOCI. Realized gains and losses are recognized in investment income and are determined using the specific identification method. There were no realized gains from the sale of securities or proceeds from the sale of available-for-sale securities for the years ended December 31, ~~2015. Realized gains from the sale of securities were~~ ~~$0.5~~2018 and ~~proceeds from the sale~~2017.

Table of ~~available-for-sale securities were $39.6~~ ~~during the year ended~~Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2014~~.2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The Company has deferred compensation plans that enable certain employees to defer receipt of a portion of their cash, 401(k) or share-based compensation and non-employee directors to defer receipt of director fees at the participants’ discretion. For deferred cash-based compensation, the Company established rabbi trusts (refer to note ~~13)~~15), which are recorded at fair value of the underlying securities within securities and other investments. The related deferred compensation liability is recorded at fair value within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trusts are recognized in ~~investment~~interest income.

The Company’s investments, ~~excluding~~respectively, consist of the following:



	Cost Basis		Unrealized Gain			Fair Value
As of December 31, 2018
Short-term investments
Certificates of deposit	$	33.5	$	—		$	33.5
Long-term investments
Assets held in a rabbi trust	$	6.5	$	(0.2	)	$	6.3

As of December 31, 2017
Short-term investments
Certificates of deposit	$	81.4	$	—		$	81.4
Long-term investments:
Assets held in a rabbi trust	$	8.3	$	1.1		$	9.4

Securities and other investments also included a cash surrender value of insurance contracts of ~~$75.9~~$11.1 and ~~$73.9~~$79.8 as of December 31, ~~2015~~2018 and ~~2014, respectively, consist~~2017, respectively. The decrease was primarily due to the monetization of the ~~following:~~

Cost Basis Unrealized Gain Fair Value
As of December 31, 2015
Short-term investments
Certificates of deposit $ 39.9
$ —
$ 39.9
Long-term investments
Assets held in a rabbi trust $ 9.3
$ —
$ 9.3

As of December 31, 2014
Short-term investments
Certificates of deposit $ 136.7
$ —
$ 136.7
Long-term investments:
Assets held in a rabbi trust $ 9.3
$ 0.4
$ 9.7

~~NOTE 7: FINANCE LEASE RECEIVABLES~~Company's investment in the company owned life insurance plans and utilization of short-term investments in Brazil for cash needs across the organization. In addition, it included an interest rate swap asset carrying value of $4.8 and $7.6 as of December 31, 2018 and 2017, respectively, which also represented fair value (refer to note 18).

The Company provides financing arrangements to customers purchasing its products. These financing arrangements are largely classified and accounted for as sales-type leases.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

The following table presents finance lease receivables sold by the Company for the years ended December 31:

2015 2014 2013
Finance lease receivables sold $ 10.6
$ 22.0
$ —



	2018		2017		2016
Finance lease receivables sold	$	11.1	$	—	$	7.4

The following table presents the components of finance lease receivables as of December 31:


	2015			2014			2018			2017
Gross minimum lease receivable	$	76.0		$	161.2		$	39.0		$	26.6
Allowance for credit losses	(0.5		)	(0.4		)	(0.4		)	(0.3		)
Estimated unguaranteed residual values	5.2			6.1			0.4			1.1
	80.7			166.9			39.0			27.4
Less:
Unearned interest income	(4.4		)	(1.3		)	(3.0		)	(1.0		)
Unearned residuals	(1.4		)	(7.3		)	(0.1		)	(0.1		)
	(5.8		)	(8.6		)	(3.1		)	(1.1		)
Total	$	74.9		$	158.3		$	35.9		$	26.3

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Future minimum payments due from customers under finance lease receivables as of December 31, ~~2015~~2018 are as follows:

2016 $ 44.8
2017 22.1
2018 4.7
2019 2.2
2020 1.2
Thereafter 1.0
$ 76.0

~~NOTE 8: ALLOWANCE FOR CREDIT LOSSES~~

~~The following table summarizes the Company’s allowance for credit losses and amount of financing receivables evaluated for impairment:~~

Finance
Leases Notes
Receivable Total
Allowance for credit losses
Balance at January 1, 2014 $ 0.4
$ 4.1
$ 4.5
Provision for credit losses 0.2
—
0.2
Write-offs (0.2 ) —
(0.2 )
Balance at December 31, 2014 $ 0.4
$ 4.1
$ 4.5
Provision for credit losses 0.2
—
0.2
Write-offs (0.1 ) —
(0.1 )
Balance at December 31, 2015 $ 0.5
$ 4.1
$ 4.6



2019	$	10.8
2020	7.7
2021	6.7
2022	5.6
2023	4.9
Thereafter	3.3
	$	39.0

The Company's combined allowance ~~of $4.6~~for finance receivables and ~~$4.5~~notes receivables was $0.3 and $4.4 for the years ended December 31, ~~2015~~2018 and ~~2014,~~2017, respectively, all resulted from individual impairment evaluation. As of December 31, ~~2015,~~2018, finance leases and notes receivables individually evaluated for impairment were ~~$75.3~~$35.9 and ~~$22.5, respectively.~~$4.9, respectively, were assessed with no provision recorded. As of December 31, ~~2014,~~2017, finance leases and notes receivables individually evaluated for impairment were ~~$149.7~~$26.3 and ~~$23.1, respectively. As of December 31, 2015 and 2014, the Company’s financing~~$16.0, respectively, were assessed with no provision recorded. The increase in finance lease receivables ~~in LA were $58.8 and $127.9, respectively. The decrease is~~was related primarily to China while the ~~strengthening U.S. dollar compared~~decrease in notes receivable was related primarily to ~~the Brazil real and recurring customer payments for financing arrangements in LA.~~EMEA.

The Company records interest income and any fees or costs related to financing receivables using the effective interest method over the term of the lease or loan. The Company reviews the aging of its financing receivables to determine past due and delinquent accounts. Credit quality is reviewed at inception and is re-evaluated as needed based on customer-specific circumstances.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

Receivable balances 60 days to 89 days past due are reviewed and may be placed on nonaccrual status based on customer-specific circumstances. Receivable balances are placed on nonaccrual status upon reaching greater than 89 days past due. Upon receipt of payment on nonaccrual financing receivables, interest income is recognized and accrual of interest is resumed once the account has been made current or the specific circumstances have been resolved.

As of December 31, ~~2015~~2018 and ~~2014,~~2017, the recorded investment in past-due financing receivables ~~on nonaccrual status~~ was ~~$0.7~~minimal and ~~$2.2, respectively, and there was~~ no recorded investment in finance receivables was past due 90 days or more and still accruing interest. ~~The recorded investment in impaired notes receivable was $4.1 as of December 31, 2015 and 2014 and was fully reserved.~~

The following table summarizes the Company’s ~~aging of past-due notes receivable balances:~~allowances for doubtful accounts:

December 31,
2015 2014
30-59 days past due $ 0.1
$ 0.1
60-89 days past due —
—
> 89 days past due 3.0
1.5
Total past due $ 3.1
$ 1.6

~~NOTE 9: INVENTORIES~~

~~The following table summarizes the major classes of inventories as of December 31:~~

2015 2014
Finished goods $ 145.8
$ 194.8
Service parts 175.4
107.7
Raw materials and work in process 48.1
72.2
Total inventories $ 369.3
$ 374.7

~~NOTE 10: PROPERTY, PLANT AND EQUIPMENT~~

~~The following is a summary of property, plant and equipment, at cost less accumulated depreciation and amortization as of December 31:~~

Estimated Useful Life
(years) 2015 2014
Land and land improvements 0-15 $ 6.1
$ 7.0
Buildings and building equipment 15 57.7
59.5
Machinery, tools and equipment 5-12 83.5
86.0
Leasehold improvements ⁽¹⁾
10 22.1
24.1
Computer equipment 3-5 58.4
56.6
Computer software 5-10 188.4
160.2
Furniture and fixtures 5-8 62.0
63.6
Tooling 3-5 104.5
94.6
Construction in progress 26.3
53.2
Total property plant and equipment, at cost $ 609.0
$ 604.8
Less accumulated depreciation and amortization 433.7
439.1
Total property plant and equipment, net $ 175.3
$ 165.7


⁽¹⁾	~~The estimated useful life for leasehold improvements is the lesser of 10 years or the term of the lease.~~



	2018			2017			2016
Balance at January 1	$	71.7		$	50.4		$	31.7
Charged to costs and expenses	22.8			54.9			22.9
Charged to other accounts ⁽¹⁾	(4.1		)	1.4			1.7
Deductions ⁽²⁾	(32.2		)	(35.0		)	(5.9		)
Balance at December 31	$	58.2		$	71.7		$	50.4

~~During~~ ~~2015~~, ~~2014~~⁽¹⁾ ~~and~~ ~~2013, depreciation expense, computed on a straight-line basis over the estimated useful lives~~Net effects of ~~the related assets, was~~ foreign currency translation.

~~$40.7~~, ~~$48.2~~⁽²⁾ ~~and~~ ~~$50.2, respectively.~~Uncollectible accounts written-off, net of recoveries.

7473

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 8: GOODWILL AND OTHER ASSETS

The Company’s three reportable operating segments are Eurasia Banking, Americas Banking and Retail. The Company has allocated goodwill to its Eurasia Banking, Americas Banking and Retail reportable operating segments. The changes in carrying amounts, including an immaterial error correction discussed in note 1, of goodwill within the Company's segments are summarized as follows:



	Eurasia Banking			Americas Banking			Retail			Total
Goodwill	$	592.2		$	423.8		$	273.0		$	1,289.0
Accumulated impairment losses	(168.7		)	(122.0		)	—			(290.7		)
Balance at January 1, 2017	423.5			301.8			273.0			998.3
Goodwill acquired	2.2			1.8			1.6			5.6
Goodwill adjustment	(1.2		)	(1.0		)	(0.7		)	(2.9		)
Currency translation adjustment	46.2			38.3			31.6			116.1
Goodwill	639.4			462.9			305.5			1,407.8
Accumulated impairment losses	(168.7		)	(122.0		)	—			(290.7		)
Balance at December 31, 2017	470.7			340.9			305.5			1,117.1
Transferred to assets held for sale	(0.8		)	(0.3		)	(45.9		)	(47.0		)
Currency translation adjustment	(10.0		)	(8.3		)	(7.2		)	(25.5		)
Goodwill	628.6			454.3			252.4			1,335.3
Impairment	(153.0		)	—			(64.5		)	(217.5		)
Accumulated impairment losses	(321.7		)	(122.0		)	(64.5		)	(508.2		)
Balance at December 31, 2018	$	306.9		$	332.3		$	187.9		$	827.1

Goodwill.In the fourth quarter of 2018 in connection with the annual goodwill impairment test, the Company elected to assess goodwill for impairment based on a qualitative assessment, which resulted in a conclusion that no events or changes in circumstance resulted in a situation that would more likely than not reduce the carrying value of a reporting unit below its reported amount. Accordingly, no impairment resulted from the annual goodwill impairment test in any of the Company's reporting units.

During the second quarter of 2018, the Company performed an impairment test of goodwill for all of its LoB reporting units due to the change in its reportable operating segments. Based on the results of the LoB testing, the fair values of each of the Company's reporting units exceed their carrying values except for the Services-AP and Software-EMEA reporting units which resulted in a non-cash impairment loss of $90.0 during the second quarter 2018. During the fourth quarter of 2018, the Company corrected an immaterial error related to the allocation of goodwill as discussed in Note 1, which decreased the second quarter non-cash impairment loss to $83.1.

The Company identified four reporting units, which are Eurasia Banking, Americas Banking, EMEA Retail and Rest of World Retail. Management determined that the Americas Banking and EMEA Retail reporting unit had a cushion of approximately 20 percent and 10 percent, respectively, when compared to their carrying amounts. The Eurasia Banking had minimal excess fair value or cushion when compared to their carrying amounts, but primarily due to the reporting unit's improved performance, it did not indicate any impairment during the qualitative annual goodwill impairment test. Rest of World Retail had no carrying value as of December 31, 2018. Changes in certain assumptions or the Company's failure to execute on the current plan could have a significant impact to the estimated fair value of the reporting units.

During the second and third quarters 2018, the Company estimated the fair value of its reporting units using a combination of the income valuation and market approach methodologies. The determination of the fair value of a reporting unit requires significant estimates and assumptions, including significant unobservable inputs. The key inputs included, but were not limited to, discount rates, terminal growth rates, market multiple data from selected guideline public companies, management’s internal forecasts which include numerous assumptions such as projected net sales, gross profit, sales mix, operating and capital expenditures and earnings before interest and taxes margins, among others.

As a result of certain impairment triggering events, the Company performed an interim impairment test of goodwill for its four reporting units during the third quarter of 2018. Based on the results of the impairment testing, the Company recorded a non-cash goodwill impairment loss of $109.3 related to the Eurasia Banking, EMEA Retail and Rest of World Retail reporting units during the third quarter of 2018. During the fourth quarter of 2018, the Company corrected an immaterial error related to the allocation of goodwill as discussed in Note 1, which increased the third quarter non-cash impairment loss for Eurasia Banking, reduced the non-cash impairment loss for Rest of World Retail and eliminated the non-cash impairment loss for the EMEA Retail

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

reporting unit. This resulted in an additional $25.1 non-cash impairment loss for the third quarter of 2018 for a non-cash impairment loss of $134.4 for the three months ended September 30, 2018 which related to the Eurasia Banking and Rest of World Retail. For the nine months ended September 30, 2018 the Company recorded a $217.5 non-cash goodwill impairment loss.

The Company reclassified $47.0 of goodwill based on relative fair value to assets held for sale in December 2018 related to certain non-core businesses in Europe and the Americas.

During 2017, the $5.6 acquired goodwill from Moxx and Visio primarily related to anticipated synergies achieved through increased scale and higher utilization of the service organization.

Other Assets. Other assets consists of net capitalized computer software development costs, patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred.

During the fourth quarter of 2017, the Company recorded a $3.1 impairment charge related to redundant legacy Diebold internally-developed software and an indefinite-lived trade name in North America as a result of the Acquisition.

The following summarizes information on intangible assets by major category:



		December 31, 2018							December 31, 2017
	Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships, net	6.7 years	$	712.2	$	(179.1	)	$	533.1	$	741.5	$	(108.2	)	$	633.3

Internally-developed software	1.6 years	189.6		(118.9		)	70.7		192.9		(99.8		)	93.1
Development costs non-software	0.9 years	52.5		(44.3		)	8.2		55.3		(35.1		)	20.2
Other	0.7 years	79.5		(66.9		)	12.6		84.5		(57.3		)	27.2
Other intangible assets, net		321.6		(230.1		)	91.5		332.7		(192.2		)	140.5

Total		$	1,033.8	$	(409.2	)	$	624.6	$	1,074.2	$	(300.4	)	$	773.8

The decrease in the gross carrying amount of intangible assets was due primarily to the impact of the euro. Amortization expense on capitalized software of $33.7, $34.6 and $24.4 was included in cost of sales for 2018, 2017 and 2016, respectively. The Company's total amortization expense, including deferred financing costs, was $153.4, $159.3 and $73.0 for the years ended December 31, 2018, 2017 and 2016, respectively. The increase from 2016 to 2017 related to the incremental amortization related to acquired intangibles in connection with the Acquisition. The expected annual amortization expense is as follows:



	Estimated amortization
2019	$	128.0
2020	108.8
2021	96.2
2022	92.0
2023	88.6
	$	513.6

NOTE ~~11: GOODWILL AND OTHER ASSETS~~

~~The changes in carrying amounts of goodwill within the Company’s segments are summarized as follows:~~

NA AP EMEA LA Total
Goodwill $ 112.1
$ 41.3
$ 168.7
$ 148.5
$ 470.6
Assets held for sale (33.9 ) —
—
—
(33.9 )
Accumulated impairment losses (13.2 ) —
(168.7 ) (108.8 ) (290.7 )
Balance at January 1, 2014 65.0
41.3
—
39.7
146.0
Divestiture (1.6 ) —
—
—
(1.6 )
Currency translation adjustment (0.2 ) (1.3 ) —
(4.8 ) (6.3 )
Goodwill 76.4
40.0
168.7
143.7
428.8
Accumulated impairment losses (13.2 ) —
(168.7 ) (108.8 ) (290.7 )
Balance at December 31, 2014 63.2
40.0
—
34.9
138.1
Goodwill acquired 39.7
—
—
—
39.7
Currency translation adjustment (3.4 ) (2.4 ) —
(10.5 ) (16.3 )
Goodwill 112.7
37.6
168.7
133.2
452.2
Accumulated impairment losses (13.2 ) —
(168.7 ) (108.8 ) (290.7 )
Balance at December 31, 2015 $ 99.5
$ 37.6
$ —
$ 24.4
$ 161.5

~~Goodwill.~~In the fourth quarter of 2015, goodwill was reviewed for impairment based on a two-step test, which resulted in no impairment in any of the Company's reporting units. Management determined that the LA and AP reporting units had excess fair value of approximately $7.2 or 1.3 percent and approximately $149.4 or 56.5 percent, respectively, when compared to their carrying amounts. The Domestic and Canada reporting unit, included in the NA reportable segment, had excess fair value greater than 100.0 percent when compared to its carrying amount.

In March 2015, the Company acquired Phoenix, a world leader in developing innovative multi-vendor software solutions for ATMs and a host of other FSS applications. Preliminary goodwill and other intangible assets resulting from the acquisition were $39.7 and $26.8, respectively, and are primarily included in the NA reportable operating segment. The amount allocated to goodwill associated with the Phoenix acquisition is primarily the result of anticipated synergies and market expansion. The purchase price allocations are preliminary and subject to further adjustment until all pertinent information regarding the assets acquired and liabilities assumed are fully evaluated. The goodwill associated with the transaction is not deductible for income tax purposes. During 2014, NA had a reduction to goodwill of $1.6 relating to the divestiture of Eras.

During the third quarter of 2013, the Company performed an other-than-annual assessment for its LA reporting unit based on a two-step impairment test as a result of a reduced earnings outlook for the LA business unit. This was due to a deteriorating macro-economic outlook, structural changes to an auction-based purchasing environment and new competitors entering the market. The Company concluded that the goodwill within the LA reporting unit was partially impaired and recorded a $70.0 pre-tax, non-cash goodwill impairment charge. In the fourth quarter of 2013, the LA reporting unit was reviewed for impairment based on a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In addition, the remaining reporting units were reviewed based on a two-step test. These tests resulted in no additional impairment in any of the Company's reporting units.

~~Other Assets.~~ Other assets consists of net capitalized computer software development costs, patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred.

Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset, an impairment loss is recognized at that time to reduce the asset to the lower of its fair value or its net book value. The Company tests all existing indefinite-lived intangibles at least annually for impairment as of October 31. As of December 31, 2015, the Company had approximately $4.5 of indefinite-lived tangibles included in other intangibles.

For the year ended December 31, 2015, the Company recorded other asset-related impairment charges of $18.9. As of March 31, 2015, the Company agreed to sell its equity interest in its Venezuela joint venture to its joint venture partner and recorded a $10.3 impairment of assets in the first quarter of 2015. On April 29, 2015, the Company closed the sale for the estimated fair market value and recorded a $1.0 reversal of impairment of assets based on final adjustments in the second quarter of 2015, resulting in

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

a $9.3 impairment of assets for the six months ended June 30, 2015. During the remainder of 2015, the Company incurred an additional $0.4 related to uncollectible accounts receivable, which is included in selling and administrative expenses on the consolidated statements of operations. The Company no longer has a consolidating entity in Venezuela but will continue to operate in Venezuela on an indirect basis. Additionally, the Company recorded an impairment related to other intangibles in LA in the second quarter of 2015 and an impairment of $9.1 related to redundant legacy Diebold internally-developed software as a result of the acquisition of Phoenix in the first quarter of 2015 in which the carrying amounts of the assets were not recoverable.

~~The following summarizes information on intangible assets by major category:~~

December 31, 2015 December 31, 2014

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying Amount

Accumulated
Amortization

Net
Carrying
Amount
Internally-developed
software
$ 92.4
$ (48.5 ) $ 43.9
$ 102.1
$ (65.8 ) $ 36.3
Other intangibles 36.7
(16.3 ) 20.4
42.6
(18.9 ) 23.7
Total $ 129.1
$ (64.8 ) $ 64.3
$ 144.7
$ (84.7 ) $ 60.0

~~Amortization expense on capitalized software of~~ ~~$14.5~~, ~~$18.3~~ ~~and~~ ~~$20.9~~ ~~was included in product cost of sales for~~ ~~2015~~, ~~2014~~ ~~and~~ ~~2013, respectively.~~

The decrease in the gross carrying value of internally-developed software is primarily due to a $9.1 impairment during the first quarter of 2015 of certain internally-developed software related to redundant legacy Diebold software as a result of the acquisition of Phoenix.

~~NOTE 12: DEBT~~

~~Outstanding debt balances were as follows:~~

December 31,
2015 2014
Notes payable – current
Uncommitted lines of credit $ 19.2
$ 24.8
Term loan 11.5
—
Other 1.3
0.8
$ 32.0
$ 25.6
Long-term debt
Credit facility $ 168.0
$ 240.0
Term loan 218.5
—
Senior notes 225.0
225.0
Industrial development revenue bonds —
11.9
Other 1.6
2.9
$ 613.1
$ 479.8

~~As of~~ ~~December 31, 2015, the Company had various short-term uncommitted lines of credit with borrowing limits of~~ ~~$89.0. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of~~ ~~December 31, 2015~~ ~~and~~ ~~2014~~ ~~was 5.66 percent and~~ ~~2.96 percent~~, respectively. The increase in the weighted-average interest rate is attributable to the change in mix of borrowings of foreign entities. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at ~~December 31, 2015~~ ~~was $69.0.~~

The Company entered into a revolving and term loan credit agreement (the Credit Agreement), dated as of November 23, 2015, among the Company and certain of the Company's subsidiaries, as borrowers, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders named therein. The Credit Agreement included, among other things, mechanics for the Company’s existing revolving and term loan A facilities to be refinanced under the Credit Agreement. On December 23, 2015, the Company entered into a Replacement Facilities Effective Date Amendment among the Company, certain of the Company’s subsidiaries, the lenders identified therein and JPMorgan Chase Bank, N.A., as Administrative Agent, pursuant to which the Company is refinancing its existing $520.0 revolving and $230.0 term loan A senior unsecured credit facilities (which have been terminated and repaid in full)

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

with, respectively, a new unsecured revolving facility (the Revolving Facility) in an amount of up to $520.0 and a new (non-delayed draw) unsecured term loan A facility (the Term A Facility) on substantially the same terms as the Delayed Draw Term Facility (as defined in the Credit Agreement) in the amount of up to $230.0. The Revolving Facility and Term A Facility will be subject to the same maximum consolidated net leverage ratio and minimum consolidated interest coverage ratio as the Delayed Draw Term Facility. On December 23, 2020, the Term A Facility will mature and the Revolving Facility automatically terminate. The weighted-average interest rate on the term loan as of December 31, 2015 was 2.33 percent, which is variable based on the LIBOR.

In June 2015, the Company entered into a Second Amendment to the Credit Agreement (Second Amendment), which provides for a term loan in the aggregate principal amount of $230.0 with escalating quarterly principal payments and a balloon payment due upon maturity in August 2019. The Second Amendment replaced the net debt to net capitalization financial covenant with a net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) financial covenant and, accordingly, modified the facility fee and interest rate pricing schedules. The Credit Agreement continues to provide a revolving credit facility with availability of up to $520.0. The Company has the ability, subject to various approvals, to increase the borrowing limits by $250.0. In August 2014, the Company entered into the First Amendment to the Credit Agreement and Guaranty (First Amendment), which increased its borrowing limits under the revolving credit facility from $500.0 to $520.0. The First Amendment also extended the maturity date of the revolving credit facility to August 2019. Up to $50.0 of the revolving credit facility is available under a swing line sub-facility. The weighted-average interest rate on outstanding credit facility borrowings as of December 31, 2014 was 1.69 percent which is variable based on the LIBOR.

The amount available under the Revolving Facility as of December 31, 2015 was $352.0. The Company incurred $6.0 and $1.4 of fees related to its amended credit facility in 2015 and 2014, respectively, which are amortized as a component of interest expense over the term of the facility.

In March 2006, the Company issued senior notes in an aggregate principal amount of $300.0 with a weighted-average fixed interest rate of 5.50 percent. The Company entered into a derivative transaction to hedge interest rate risk on $200.0 of the senior notes, which was treated as a cash flow hedge. This reduced the effective interest rate from 5.50 percent to 5.36 percent. The Company funded the repayment of $75.0 of the senior notes at maturity in March 2013 using borrowings under its revolving credit facility. The maturity dates of the remaining senior notes are staggered, with $175.0 and $50.0 due in March 2016 and 2018, respectively. For the $175.0 of the Company's senior notes maturing in March 2016, management intended to fund the repayment through the revolving credit facility and/or proceeds from the sale of the Company's electronic security business.

The Company expects to receive the full $350.0 in cash proceeds, subject to working capital adjustments, from the divestiture of its electronic security business during the first quarter of 2016. The proceeds from the divestiture, net of deal costs and other related divestiture costs, will be placed in escrow to provide for the repayment of the senior notes due March 2016 and a portion of the financing for the Business Combination. The use of these funds will be restricted to the earlier of November 21, 2016, the cancellation of the tender offer or the payments for certain acquisition related items.

~~Maturities of long-term debt as of~~ ~~December 31, 2015~~ ~~are as follows:~~

Maturities of
Long-Term Debt
2016 $ 175.0
2017 1.2
2018 50.4
2019 0.1
Thereafter 386.4
$ 613.1

~~Interest expense on the Company’s debt instruments for the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013~~ ~~was $23.4,~~ ~~$22.4~~ ~~and~~ ~~$26.9, respectively.~~

~~As of~~ ~~December 31, 2015~~, all the industrial development revenue bonds were repaid in full. In 1997, industrial development revenue bonds were issued on behalf of the Company. The proceeds from the bond issuances were used to construct manufacturing facilities in the United States. The Company guaranteed the payments of principal and interest on the bonds by obtaining letters of credit. The bonds were issued with a ~~20-year~~ ~~original term and were scheduled to mature in~~ ~~2017~~. Each industrial development revenue bond carried a variable interest rate, which was reset weekly by the remarketing agents. During the third quarter of 2015, the Company repaid $7.5 of the industrial development revenue bonds, the remaining $4.4 was repaid during the fourth quarter of 2015. The weighted-average interest rate on the bonds was 0.27 percent as of ~~December 31, 2014~~.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~The Company’s financing agreements contain various restrictive financial covenants, including net debt to capitalization, net debt to EBITDA and net interest coverage ratios. As of~~ ~~December 31, 2015, the Company was in compliance with the financial and other covenants in its debt agreements.~~

~~NOTE 13: BENEFIT PLANS~~

~~Qualified Pension Benefits.~~ The Company has pension plans covering certain U.S. employees that have been closed to new participants since July 2003. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. Plans covering hourly employees and union members generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions required by applicable regulations. Employees of the Company’s operations in countries outside of the United States participate to varying degrees in local pension plans, which in the aggregate are not significant.

~~Supplemental Executive Retirement Benefits.~~ The Company has non-qualified pension plans to provide supplemental retirement benefits to certain officers. Benefits are payable at retirement based upon a percentage of the participant’s compensation, as defined.

~~During the first quarter of 2013, the Company recognized a curtailment loss of $1.2 within selling and administrative expense as a result of the termination of certain executives.~~

In July 2013, the Company's board of directors approved the freezing of certain pension and supplemental executive retirement plan (SERP) benefits effective as of December 31, 2013 for U.S.-based salaried employees. The Company recognized the plan freeze in the three-month period ended September 30, 2013 as a curtailment, since it eliminates for a significant number of participants the accrual of defined benefits for all of their future services. The impact of the curtailment includes the one-time accelerated recognition of outstanding unamortized pre-tax prior service cost of $0.8 within selling and administrative expense and a pre-tax reduction in AOCI of $52.6, attributable to the decrease in long-term pension liabilities. This curtailment event triggered a re-measurement for the affected benefit plans as of July 31, 2013 using a discount rate of 5.06 percent. The re-measurement resulted in a further reduction of long-term pension liabilities and AOCI (pre-tax) related to the actuarial gain occurring during the year of $71.0.

In connection with the voluntary early retirement program in the fourth quarter of 2013, the Company recorded distributions of $138.5 of pension plan assets, of which $15.8 were paid to participants in 2014. Distributions were made via lump-sum payments out of plan assets to participants. These distributions resulted in a non-cash pension charge of $67.6 recognized in selling and administrative expense within the Company's statement of operations. The non-cash pension charge included a $8.7 curtailment loss, a $20.2 settlement loss and $38.7 in special termination benefits.

~~Other Benefits.~~ In addition to providing pension benefits, the Company provides post-retirement healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Eligible employees may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. Currently, the Company has made no commitments to increase these benefits for existing retirees or for employees who may become eligible for these benefits in the future. Currently there are no plan assets and the Company funds the benefits as the claims are paid. The post-retirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

The following tables set forth the change in benefit obligation, change in plan assets, funded status, consolidated balance sheet presentation and net periodic benefit cost for the Company’s defined benefit pension plans and other benefits at and for the years ended December 31:

Pension Benefits Other Benefits
2015 2014 2015 2014
Change in benefit obligation
Benefit obligation at beginning of year $ 578.0
$ 469.0
$ 14.5
$ 13.1
Service cost 3.7
2.9
—
—
Interest cost 23.8
23.0
0.6
0.6
Actuarial (gain) loss (29.8 ) 112.6
(1.4 ) 1.9
Plan participant contributions —
—
0.1
0.1
Medicare retiree drug subsidy reimbursements —
—
0.2
0.2
Benefits paid (29.3 ) (29.5 ) (1.3 ) (1.4 )
Benefit obligation at end of year 546.4
578.0
12.7
14.5
Change in plan assets
Fair value of plan assets at beginning of year $ 364.2
$ 346.6
$ —
$ —
Actual return on plan assets (0.6 ) 37.5
—
—
Employer contributions 13.6
9.6
1.2
1.3
Plan participant contributions —
—
0.1
0.1
Benefits paid (29.3 ) (29.5 ) (1.3 ) (1.4 )
Fair value of plan assets at end of year 347.9
364.2
—
—
Funded status $ (198.5 ) $ (213.8 ) $ (12.7 ) $ (14.5 )
Amounts recognized in balance sheets
Current liabilities $ 3.5
$ 3.5
$ 1.2
$ 1.4
Noncurrent liabilities⁽¹⁾
195.0
210.3
11.3
13.1
Accumulated other comprehensive loss:
Unrecognized net actuarial loss⁽²⁾
(167.5 ) (176.1 ) (2.5 ) (4.3 )
Unrecognized prior service (cost) benefit⁽²⁾
(0.1 ) (0.1 ) 0.1
0.2
Net amount recognized $ 30.9
$ 37.6
$ 10.1
$ 10.4
Change in accumulated other comprehensive loss
Balance at beginning of year $ (176.2 ) $ (77.9 ) $ (4.1 ) $ (2.2 )
Prior service credit recognized during the year —
(0.2 ) (0.2 ) (0.2 )
Net actuarial losses recognized during the year 6.6
3.0
0.3
0.2
Net actuarial gains (losses) occurring during the year 2.0
(101.1 ) 1.4
(1.9 )
Balance at end of year $ (167.6 ) $ (176.2 ) $ (2.6 ) $ (4.1 )


⁽¹⁾	~~Included in the consolidated balance sheets in pensions and other benefits and other post-retirement benefits are international plans.~~


⁽²⁾	~~Represents amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost.~~

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

Pension Benefits Other Benefits
2015 2014 2013 2015 2014 2013
Components of net periodic benefit cost
Service cost $ 3.7
$ 2.9
$ 11.6
$ —
$ —
$ —
Interest cost 23.8
23.0
27.6
0.6
0.6
0.6
Expected return on plan assets (27.0 ) (25.8 ) (35.7 ) —
—
—
Amortization of prior service cost⁽¹⁾
—
(0.2 ) (0.3 ) (0.2 ) (0.2 ) (0.4 )
Recognized net actuarial loss 6.6
3.0
14.5
0.3
0.2
0.4
Curtailment loss —
—
10.7
—
—
—
Settlement loss —
—
20.2
—
—
—
Special termination benefits —
—
38.7
—
—
—
Net periodic benefit cost $ 7.1
$ 2.9
$ 87.3
$ 0.7
$ 0.6
$ 0.6


⁽¹⁾	The annual amortization of prior service cost is determined as the increase in projected benefit obligation due to the plan change divided by the average remaining service period of participating employees expected to receive benefits under the plan.

~~The following table represents information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31:~~

2015 2014
Projected benefit obligation $ 546.4
$ 578.0
Accumulated benefit obligation $ 546.1
$ 577.6
Fair value of plan assets $ 347.9
$ 364.2

~~The following table represents the weighted-average assumptions used to determine benefit obligations at December 31:~~

Pension Benefits Other Benefits
2015 2014 2015 2014
Discount rate 4.62 % 4.21 % 4.62 % 4.21 %
Rate of compensation increase N/A
N/A
N/A
N/A

~~The following table represents the weighted-average assumptions used to determine periodic benefit cost at December 31:~~

Pension Benefits Other Benefits
2015 2014 2015 2014
Discount rate 4.21 % 5.09 % 4.21 % 5.09 %
Expected long-term return on plan assets 7.75 % 7.95 % N/A
N/A
Rate of compensation increase N/A
N/A
N/A
N/A

The discount rate is determined by analyzing the average return of high-quality (i.e., AA-rated) fixed-income investments and the year-over-year comparison of certain widely used benchmark indices as of the measurement date. The expected long-term rate of return on plan assets is primarily determined using the plan’s current asset allocation and its expected rates of return based on a geometric averaging over 20 years. The Company also considers information provided by its investment consultant, a survey of other companies using a December 31 measurement date and the Company’s historical asset performance in determining the expected long-term rate of return. The rate of compensation increase assumptions reflects the Company’s long-term actual experience and future and near-term outlook.

During 2014, the Society of Actuaries released a series of updated mortality tables resulting from recent studies measuring mortality rates for various groups of individuals. As of December 31, 2014, the Company adopted these mortality tables, which reflect improved trends in longevity and have the effect of increasing the estimate of benefits to be received by plan participants.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~The following table represents assumed healthcare cost trend rates at December 31:~~

2015 2014
Healthcare cost trend rate assumed for next year 7.0 % 7.5 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.0 % 5.0 %
Year that rate reaches ultimate trend rate 2020
2020

The healthcare trend rates are reviewed based upon the results of actual claims experience. The Company used healthcare cost trends of 7.0 percent in 2015 and 7.5 percent in 2014 decreasing to an ultimate trend of ~~5.0 percent~~ in ~~2020~~ for both medical and prescription drug benefits using the Society of Actuaries Long Term Trend Model with assumptions based on the 2008 Medicare Trustees’ projections. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans.

~~A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:~~

One-Percentage-Point Increase One-Percentage-Point Decrease
Effect on total of service and interest cost $ —
$ —
Effect on post-retirement benefit obligation $ 0.9
$ (0.8 )

The Company has a pension investment policy designed to achieve an adequate funded status based on expected benefit payouts and to establish an asset allocation that will meet or exceed the return assumption while maintaining a prudent level of risk. The plans' target asset allocation adjusts based on the plan's funded status. As the funded status improves or declines, the debt security target allocation will increase and decrease, respectively. The Company utilizes the services of an outside consultant in performing asset / liability modeling, setting appropriate asset allocation targets along with selecting and monitoring professional investment managers.

The plan assets are invested in equity and fixed income securities, alternative assets and cash. Within the equities asset class, the investment policy provides for investments in a broad range of publicly-traded securities including both domestic and international stocks diversified by value, growth and cap size. Within the fixed income asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities with a substantial portion allocated to a long duration strategy in order to partially offset interest rate risk relative to the plans’ liabilities. The alternative asset class includes investments in diversified strategies with a stable and proven track record and low correlation to the U.S. stock market.

~~The following table summarizes the Company’s target mix for these asset classes in~~ ~~2016, which are readjusted at least quarterly within a defined range, and the Company’s actual pension plan asset allocation as of~~ ~~December 31, 2015~~ ~~and~~ ~~2014~~:

Target Allocation Actual Allocation
2016 2015 2014
Equity securities 45% 45% 45%
Debt securities 40% 39% 40%
Real estate 5% 6% 5%
Other 10% 10% 10%
Total 100% 100% 100%

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~Assets are categorized into a three level hierarchy based upon the assumptions (inputs) used to determine the fair value of the assets.~~

Level 1 - Fair value of investments categorized as level 1 are determined based on period end closing prices in active markets. Mutual funds are valued at their net asset value (NAV) on the last day of the period.

~~Level 2~~ - Fair value of investments categorized as level 2 are determined based on the latest available ask price or latest trade price if listed. The fair value of unlisted securities is established by fund managers using the latest reported information for comparable securities and financial analysis. If the manager believes the fund is not capable of immediately realizing the fair value otherwise determined, the manager has the discretion to determine an appropriate value. Common collective trusts are valued at NAV on the last day of the period.

Level 3 - Fair value of investments categorized as level 3 represent the plan’s interest in private equity, hedge and property funds. The fair value for these assets is determined based on the NAV as reported by the underlying investment managers.

~~The following table summarizes the fair value of the Company’s plan assets as of December 31, 2015:~~

Fair Value Level 1 Level 2 Level 3
Cash and other $ 3.4
$ 3.4
$ —
$ —
Mutual funds 14.7
14.7
—
—
Equity securities
U.S. mid cap value 13.2
13.2
—
—
U.S. small cap core 16.9
16.9
—
—
International developed markets 34.0
34.0
—
—
Fixed income securities
U.S. corporate bonds 47.4
—
47.4
—
International corporate bonds —
—
—
—
U.S. government 3.3
—
3.3
—
Other fixed income 0.5
—
0.5
—
Emerging markets 17.8
—
17.8
—
Common collective trusts
Real estate (a) 19.6
—
—
19.6
Other (b) 143.4
—
143.4
—
Alternative investments
Multi-strategy hedge funds (c) 17.2
—
—
17.2
Private equity funds (d) 16.5
—
—
16.5
Fair value of plan assets at end of year $ 347.9
$ 82.2
$ 212.4
$ 53.3

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~The following table summarizes the fair value of the Company’s plan assets as of~~ ~~December 31, 2014~~:

Fair Value Level 1 Level 2 Level 3
Cash and other $ 3.9
$ 3.9
$ —
$ —
Mutual funds 15.3
15.3
—
—
Equity securities
U.S. mid cap value 13.9
13.9
—
—
U.S. small cap core 18.5
18.5
—
—
International developed markets 33.9
33.9
—
—
Fixed income securities
U.S. corporate bonds 51.7
—
51.7
—
International corporate bonds 0.2
—
0.2
—
U.S. government 1.9
—
1.9
—
Other fixed income 0.3
—
0.3
—
Emerging markets 16.7
—
16.7
—
Common collective trusts
Real estate (a) 16.7
—
—
16.7
Other (b) 153.8
—
153.8
—
Alternative investments
Multi-strategy hedge funds (c) 16.6
—
—
16.6
Private equity funds (d) 20.8
—
—
20.8
Fair value of plan assets at end of year $ 364.2
$ 85.5
$ 224.6
$ 54.1

~~(a)~~

~~Real estate common collective trust.~~The objective of the real estate common collective trust (CCT) is to achieve long-term returns through investments in a broadly diversified portfolio of improved properties with stabilized occupancies. As of December 31, 2015, investments in this CCT included approximately 48 percent office, 20 percent residential, 24 percent retail and 8 percent industrial, cash and other. As of December 31, 2014, investments in this CCT included approximately 44 percent office, 21 percent residential, 24 percent retail and 11 percent industrial, cash and other. Investments in the real estate CCT can be redeemed once per quarter subject to available cash, with a 45-day notice.

~~(b)~~

~~Other common collective trusts.~~ At December 31, 2015, approximately 59 percent of the other CCTs are invested in fixed income securities including approximately 25 percent in mortgage-backed securities, 45 percent in corporate bonds and 30 percent in U.S. Treasury and other. Approximately 41 percent of the other CCTs at December 31, 2015 are invested in Russell 1000 Fund large cap index funds. At December 31, 2014, approximately 58 percent of the other CCTs are invested in fixed-income securities including approximately 27 percent in mortgage-backed securities, 47 percent in corporate bonds and 26 percent in U.S. Treasury and other. Approximately 42 percent of the other CCTs at December 31, 2014 are invested in Russell 1000 Fund large cap index funds. Investments in fixed-income securities can be redeemed daily.

~~(c)~~

~~Multi-strategy hedge funds.~~ The objective of the multi-strategy hedge funds is to diversify risks and reduce volatility. At December 31, 2015 and 2014, investments in this class include approximately 53 percent and 46 percent long/short equity, respectively, 40 percent and 44 percent arbitrage and event investments, respectively, and 7 percent and 10 percent in directional trading, fixed income and other, respectively. Investments in the multi-strategy hedge fund can be redeemed semi-annually with a 95-day notice.

~~(d)~~

~~Private equity funds.~~ The objective of the private equity funds is to achieve long-term returns through investments in a diversified portfolio of private equity limited partnerships that offer a variety of investment strategies, targeting low volatility and low correlation to traditional asset classes. As of December 31, 2015 and 2014, investments in these private equity funds include approximately 50 percent, in both years, in buyout private equity funds that usually invest in mature companies with established business plans, approximately 25 percent in both years, in special situations private equity and debt funds that focus on niche investment strategies and approximately 25 percent in both years, in venture private equity funds that invest in early development or expansion of business. Investments in the private equity fund can be redeemed only with written consent from the general partner, which may or may not be granted. At December 31, 2015 and 2014, the Company had unfunded commitments of underlying funds of $5.5 in both years.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~The following table summarizes the changes in fair value of level 3 assets for the years ended December 31:~~

2015 2014
Balance, January 1 $ 54.1
$ 73.4
Dispositions (6.1 ) (26.2 )
Realized and unrealized gain, net 5.3
6.9
Balance, December 31 $ 53.3
$ 54.1

~~The following table represents the amortization amounts expected to be recognized during~~ ~~2016~~:

Pension Benefits Other Benefits
Amount of net prior service credit $ —
$ —
Amount of net loss $ 5.5
$ 0.2

The Company contributed $13.6 to its pension plans, including contributions to the nonqualified plan, and $1.2 to its other post-retirement benefit plan during the year ended December 31, 2015. The Company expects to contribute $1.4 to its other post-retirement benefit plan and does not expect to contribute to its pension plans, including the nonqualified plan, during the year ending December 31, 2016. The following benefit payments, which reflect expected future service, are expected to be paid:

Pension Benefits Other Benefits Other Benefits
after Medicare
Part D Subsidy
2016 $ 27.2
$ 1.4
$ 1.3
2017 $ 27.4
$ 1.4
$ 1.3
2018 $ 27.9
$ 1.3
$ 1.2
2019 $ 28.4
$ 1.3
$ 1.2
2020 $ 29.2
$ 1.2
$ 1.1
2021-2025 $ 155.5
$ 5.4
$ 4.9

~~Retirement Savings Plan.~~ The Company offers employee 401(k) savings plans (Savings Plans) to encourage eligible employees to save on a regular basis by payroll deductions. Effective July 1, 2003, a new enhanced benefit to the Savings Plans was effective in lieu of participation in the pension plan for salaried employees. The following table represents the Company's basic match percentage on participant qualified contributions up to a percentage of their compensation:



	~~Employees hired prior~~ ~~to July 1, 2003~~	~~Employees hired on~~ ~~or after July 1, 2003~~
~~Effective January 1, 2012 - December 31, 2013~~	~~30% of first 6%~~	~~60% of first 6%~~
~~Effective January 1, 2014 - December 31, 2015~~	~~60% of first 6%~~	~~60% of first 6%~~

The Company match is determined by the Board of Directors and evaluated at least annually. Total Company match was $9.5, $8.7 and $7.7 for the years ended December 31, 2015, 2014 and 2013, respectively. Effective December 31, 2013, the salaried pension plan benefits were frozen and therefore all participants in the Savings Plan began receiving the equal Company basic match percentages in January 2014.

~~Deferred Compensation Plans.~~ The Company has deferred compensation plans that enable certain employees to defer receipt of a portion of their cash bonus, 401(k) or share-based compensation and non-employee directors to defer receipt of director fees at the participants’ discretion. For deferred cash-based compensation and 401(k), the Company established rabbi trusts which are recorded at fair value of the underlying securities within securities and other investments. The related deferred compensation liabilities are recorded at fair value within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trusts are recognized in investment income with corresponding changes in the Company’s deferred compensation obligation recorded as compensation cost within selling and administrative expense.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~NOTE 14: LEASES~~

~~The Company’s future minimum lease payments due under non-cancellable operating leases for real estate, vehicles and other equipment at December 31, 2015 are as follows:~~

Total Real Estate Vehicles and Equipment (a)
2016 $ 43.4
$ 25.9
$ 17.5
2017 27.9
19.0
8.9
2018 19.9
14.3
5.6
2019 13.6
11.8
1.8
2020 10.6
10.0
0.6
Thereafter 12.7
12.6
0.1
$ 128.1
$ 93.6
$ 34.5


~~(a)~~	The Company leases vehicles with contractual terms of 36 to 60 months that are cancellable after 12 months without penalty. Future minimum lease payments reflect only the minimum payments during the initial 12-month non-cancellable term.

~~NOTE 15:~~9: GUARANTEES AND PRODUCT WARRANTIES

In 1997, industrial development revenue bonds were issued on behalf of the Company. The Company guaranteed repayment of the bonds (refer to note 12) by obtaining letters of credit. The carrying value of the bonds was $11.9 as of ~~December 31, 2014. The Company repaid these bonds in 2015.~~

The Company provides its global operations guarantees and standby letters of credit through various financial institutions to suppliers, customers, regulatory agencies and insurance providers. If the Company is not able to make payment, the suppliers, customers, regulatory agencies and insurance providers may draw on the pertinent bank. At December 31, ~~2015~~2018, the maximum future contractual obligations relative to these various guarantees totaled ~~$89.9,~~$135.2, of which ~~$30.0~~$27.5 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, ~~2014~~,2017, the maximum future payment obligations relative to these various guarantees totaled $~~111.1~~195.1, of which $28.0 represented standby letters of credit to insurance providers, and no associated liability was recorded.

The Company provides its customers a standard manufacturer’s warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. Estimated future obligations due to warranty claims are based upon historical factors such as labor rates, average repair time, travel time, number of service calls per machine and cost of replacement parts. The decrease was primarily due to warranties expiring in Brazil and Germany.

Changes in the Company’s warranty liability balance are illustrated in the following table:


	2015			2014			2018			2017
Balance at January 1	$	113.3		$	83.2		$	76.7		$	101.6
Current period accruals	35.7			92.6			22.5			36.0
Current period settlements	(49.1		)	(51.2		)	(52.3		)	(65.2		)
Currency translation	(26.3		)	(11.3		)	(6.8		)	4.3
Balance at December 31	$	73.6		$	113.3		$	40.1		$	76.7

NOTE 10: RESTRUCTURING

The following table summarizes the impact of the Company’s restructuring charges on the consolidated statements of operations for the years ended December 31:



	2018		2017			2016
Cost of sales - services	$	17.8	$	27.3		$	18.4
Cost of sales - products	10.8		1.9			7.1
Selling and administrative expense	33.4		21.3			28.8
Research, development and engineering expense	3.0		(1.1		)	5.1
Total	$	65.0	$	49.4		$	59.4

The following table summarizes the Company’s restructuring charges by reporting segment for the years ended December 31:



	2018		2017		2016
Severance
Eurasia Banking	$	37.1	$	24.6	$	33.2
Americas Banking	8.9		4.2		13.8
Retail	13.3		14.8		0.7
Corporate	5.7		5.8		11.7
Total	$	65.0	$	49.4	$	59.4

DN Now

During the second quarter of 2018, the Company began implementing DN Now to deliver greater, more sustainable profitability. The plan is anticipating savings of approximately $160 for 2019, of which $130 is related to the restructuring actions in connection with the new customer centric operating model with clear role charters and a global workforce aligned with market demand and the remainder is related to other initiatives. Additional near term activities include divesting of non-core and/or non-accretive businesses, initiating a services modernization plan and rationalizing of the Company's product portfolio. The Company incurred restructuring charges of $58.9 for the year ended December 31, 2018 related to DN Now. The Company anticipates additional restructuring costs of approximately $175 to $200 through the end of the plan primarily related to severance anticipated for completion of the Company's transformation throughout the three solution segments and corporate.

Completed Plans

DN2020 Plan. As of August 15, 2016, the date of the Acquisition, the Company launched a multi-year integration and transformation program, known as DN2020. The Company incurred restructuring charges primarily related to severance of $6.0, $47.0 and $42.8 for the years ended December 31, 2018, 2017 and 2016, respectively, related to this plan.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Strategic Alliance Plan. On November 10, 2016, the Company entered into a strategic alliance with the Inspur Group, a Chinese cloud computing and data center company, to develop, manufacture and distribute Systems solutions in China. The Company incurred restructuring charges of $0.1, $2.4 and $5.7 for the years ended December 31, 2018, 2017 and 2016, respectively, related to this plan.

Delta Program. At the beginning of the 2015, Diebold Nixdorf AG initiated the Delta Program related to restructuring and realignment. As of August 15, 2016, the date of the acquisition of Diebold Nixdorf AG, the restructuring accrual balance acquired was $45.5 and consisted of severance activities. During the third quarter of 2017, the Company recorded a measurement period adjustment of $8.2 to the acquired restructuring accrual resulting in a $37.3 final fair value. The Company incurred restructuring charges of $3.2 for the year ended December 31, 2016 related to this plan.

Multi-Year Transformation Plan. During the first quarter of 2013, the Company announced a multi-year transformation plan. Restructuring charges of $7.7 were incurred for the year ended December 31, 2016. The multi-year transformation plan incurred cumulative total restructuring costs of $105.0 and $3.5 related to severance and other costs, respectively, and was considered complete as of December 31, 2016.

The following table summarizes the Company's cumulative total restructuring costs from continuing operations as of December 31, 2018 for the respective plans:



	Severance
	DN Now		DN2020 Plan		Delta Program		Strategic Alliance		Total
Eurasia Banking	$	33.3	$	51.5	$	0.5	$	8.2	$	93.5
Americas Banking	8.6		13.6		0.2		—		22.4
Retail	12.5		15.6		0.7		—		28.8
Corporate	4.5		15.1		1.8		—		21.4
Total	$	58.9	$	95.8	$	3.2	$	8.2	$	166.1

The following table summarizes the Company’s restructuring accrual balances and related activity:



Balance at January 1, 2016	$	4.7
Liabilities incurred	59.4
Liabilities acquired	45.5
Liabilities paid/settled	(19.7		)
Balance at December 31, 2016	$	89.9
Liabilities incurred	49.4
Liabilities acquired	(8.2		)
Liabilities paid/settled	(77.1		)
Balance at December 31, 2017	$	54.0
Liabilities incurred	65.0
Liabilities paid/settled	(62.1		)
Balance at December 31, 2018	$	56.9

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 11: DEBT

Outstanding debt balances were as follows:



	December 31,
	2018			2017
Notes payable – current
Uncommitted lines of credit	$	20.9		$	16.2
Term Loan A Facility	—			23.0
Delayed Draw Term Loan A Facility	—			17.2
Term Loan A-1 Facility	16.3			—
Term Loan B Facility - USD	4.8			4.8
Term Loan B Facility - Euro	4.8			5.0
Other	2.7			0.5
	$	49.5		$	66.7
Long-term debt
Revolving credit facility	$	125.0		$	75.0
Term Loan A Facility	126.3			178.3
Delayed Draw Term Loan A Facility	160.5			226.6
Term Loan A-1 Facility	625.6			—
Term Loan B Facility - USD	413.2			466.7
Term Loan B Facility - Euro	411.9			489.5
2024 Senior Notes	400.0			400.0
Other	2.4			1.4
	2,264.9			1,837.5
Long-term deferred financing fees	(74.9		)	(50.4		)
	$	2,190.0		$	1,787.1

As of December 31, 2018, the Company had various international, short-term uncommitted lines of credit with borrowing limits of $48.9. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of December 31, 2018 and 2017 was 8.80 percent and 9.17 percent, respectively. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at December 31, 2018 was $28.0.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The cash flows related to debt borrowings and repayments were as follows:



	December 31,
	2018			2017
Revolving debt borrowings (repayments), net	$	50.0		$	75.0

Proceeds from Delayed Draw Term Loan A Facility	$	—		$	250.0
Proceeds from Term Loan A-1 Facility under the Credit Agreement	650.0			—
Proceeds from Term Loan B Facility - Euro	—			73.3
International short-term uncommitted lines of credit borrowings	75.9			50.8
Other debt borrowings	$	725.9		$	374.1

Payments on Term Loan A Facility	$	(75.0	)	$	(17.3	)
Payments on Delayed Draw Term Loan A Facility	(83.2		)	(6.3		)
Payments on Term Loan A-1 Facility under the Credit Agreement	(8.1		)	—
Payments on Term Loan B Facility - USD	(53.0		)	(326.1		)
Payments on Term Loan B Facility - Euro	(55.6		)	(4.6		)
Payments on European Investment Bank	—			(63.1		)
International short-term uncommitted lines of credit and other repayments	(62.8		)	(41.4		)
Other debt repayments	$	(337.7	)	$	(458.8	)

The Company had a revolving and term loan credit agreement (the Credit Agreement), with a revolving facility of up to $500.0 (the Revolving Facility) as of December 31, 2018. On December 23, 2020, the Term Loan A Facility will mature and the Revolving Facility will automatically terminate. The weighted-average interest rate on outstanding revolving credit facility borrowings as of December 31, 2018 and December 31, 2017 was 5.97 percent and 3.63 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the revolving credit facility as of December 31, 2018 was $347.5, after excluding $27.5 in letters of credit.

On May 9, 2017, the Company entered into an incremental amendment to its Credit Agreement (the Incremental Agreement) which reduced the initial term loan B facility (the Term Loan B Facility) of a $1,000.0 USD-denominated tranche to $475.0. The reduction was funded using the $250.0 proceeds drawn from the Delayed Draw Term Loan A Facility, a replacement of $70.0 with Term Loan B Facility - Euro and previous principal payments.

The Incremental Amendment also renewed the repricing premium of 1.00 percent in relation to the Term Loan B Facility to the date that is six months after the Incremental Effective Date, removed the requirements to prepay the repriced Dollar Term Loan and the repriced Euro Term Loan upon any asset sale or casualty event if the Company is below a total net leverage ratio of 2.5:1.0 on a pro forma basis for such asset sale or casualty event and provides additional restricted payments and investment carveouts in regards to assets acquired with the Acquisition. All other material provisions under the Credit Agreement were unchanged.

On August 30, 2018, the Company entered into a sixth amendment and incremental amendment (the Sixth Amendment) to its Credit Agreement, which amended the financial covenants and established a new senior secured incremental term A-1 facility in an aggregate principal amount of $650.0 (Term Loan A-1 Facility) and made certain other changes to the Credit Agreement.

A portion of the proceeds of the Term Loan A-1 Facility are restricted to fund the purchase of the remaining shares of Diebold Nixdorf AG not owned by the Company. The proceeds were used to make optional prepayments of existing term A loans in the amount of $130.0 and to permanently reduce revolving credit commitments in an amount of $20.0 and to make a purchase pursuant to an offer open to all term B lenders on a pro rata basis for $100.0 in face principal amount of term B loans. Any remaining proceeds were used for general corporate and working capital purposes.

The interest rate with respect to the Term Loan A-1 Facility is based on, at the Company's option, either the alternative base rate (ABR) plus 8.25 percent or a eurocurrency rate plus 9.25 percent. The Term Loan A-1 Facility will mature in August 2022, the fourth Anniversary of the Sixth Amendment. The Term Loan A-1 Facility is subject to a maximum consolidated net leverage ratio, a minimum consolidated interest coverage ratio and certain covenant reset triggers (Covenant Reset Triggers) as described in the Sixth Amendment. Upon the occurrence of any Covenant Reset Trigger, the financial covenant levels will automatically revert to the previous financial covenant levels in effect prior to the Sixth Amendment.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The Credit Agreement financial ratios at December 31, 2018 were as follows:

a maximum allowable total net debt to adjusted EBITDA leverage ratio of 7.00 to 1.00 as of December 31, 2018 (reducing to 6.50 on June 30, 2020, 6.25 on December 31, 2020, 6.00 on June 30, 2021, and 5.75 on December 31, 2021); and

a minimum adjusted EBITDA to net interest expense coverage ratio of not less than 1.38 to 1.00 (increasing to 1.50 on December 31, 2020, and 1.63 on December 31, 2021).

The Company has senior notes due in 2024 (2024 Senior Notes) in the aggregate principal amount of $400.0. The 2024 Senior Notes are and will be guaranteed by certain of the Company’s existing and future domestic subsidiaries.

The Company incurred $39.4 and $1.1 of fees in the years ended December 31, 2018 and 2017, respectively, related to the Credit Agreement, which are amortized as a component of interest expense over the terms.

Below is a summary of financing and replacement facilities information:



Financing and Replacement Facilities	Interest Rate Index and Margin	Maturity/Termination Dates	Initial Term (Years)
Credit Agreement facilities
Revolving Facility	LIBOR + 3.50%	December 2020	5
Term Loan A Facility	LIBOR + 3.50%	December 2020	5
Delayed Draw Term Loan A Facility	LIBOR + 3.50%	December 2020	5
Term Loan A-1 Facility	LIBOR + 9.25%	August 2022	4
Term Loan B Facility - USD	LIBOR⁽ⁱ⁾ + 2.75%	November 2023	7.5
Term Loan B Facility - Euro	EURIBOR⁽ⁱⁱ⁾ + 3.00%	November 2023	7.5
2024 Senior Notes	8.5%	April 2024	8


⁽ⁱ⁾	LIBOR with a floor of 0.0 percent.


⁽ⁱⁱ⁾	EURIBOR with a floor of 0.0 percent.

The debt facilities under the Credit Agreement are secured by substantially all assets of the Company and its domestic subsidiaries that are borrowers or guarantors under the Credit Agreement, subject to certain exceptions and permitted liens.

Maturities of long-term debt as of December 31, 2018 are as follows:



	Maturities of Long-Term Debt
2019	$	49.5
2020	438.2
2021	26.5
2022	603.3
Thereafter	1,196.9
	$	2,314.4

Interest expense on the Company’s debt instruments for the years ended December 31, 2018, 2017 and 2016 was $127.1, $102.7 and $85.7, respectively.

The Company’s financing agreements contain various restrictive financial covenants, including net debt to capitalization, net debt to EBITDA and net interest coverage ratios. Under the Sixth Amendment, the Term A-1 Facility is under a covenant holiday period until the earlier of any covenant reset trigger or April 1, 2019. As of December 31, 2018, the Company was in compliance with the financial and other covenants in its debt agreements.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 12: REDEEMABLE NONCONTROLLING INTERESTS

Changes in redeemable noncontrolling interests were as follows:



	2018			2017			2016
Balance at January 1	$	492.1		$	44.1		$	—
Purchase of noncontrolling interests	—			—			44.1
Other comprehensive income	(19.3		)	32.8			—
Redemption value adjustment	2.8			32.0			—
Redemption of shares	(345.2		)	(3.5		)	—
Reclassification of noncontrolling interest	—			386.7			—
Balance at December 31	$	130.4		$	492.1		$	44.1

The Company entered into the DPLTA, which became effective on February 14, 2017, at which time, the carrying value of the noncontrolling interest related to the Diebold Nixdorf AG of $386.7 was reclassified to redeemable noncontrolling interest. For the period of time that the DPLTA is effective, this interest in Diebold Nixdorf AG will remain in redeemable noncontrolling interest and presented outside of equity in the consolidated balance sheets of the Company. As of December 31, 2018 and 2017, the balance related to the redeemable noncontrolling interest related to the Diebold Nixdorf AG ordinary shares the Company did not acquire was $99.1 and $454.6, respectively. The change is primarily related to the redemption of 5.3 Diebold Nixdorf AG ordinary shares in the year ended December 31, 2018. The Company increased its ownership stake in Diebold Nixdorf AG to 28.2 ordinary shares, or approximately 94.7 percent, as of December 31, 2018. In January 2019, the Company increased its ownership stake in Diebold Nixdorf AG to over 95 percent, which resulted in initiating squeeze-out procedures to acquire the remaining outstanding shares.

The DPLTA offers the Diebold Nixdorf AG minority shareholders, at their election, (i) the ability to put their Diebold Nixdorf AG ordinary shares to Diebold KGaA in exchange for cash compensation of €55.02 per Diebold Nixdorf AG ordinary share or (ii) to remain Diebold Nixdorf AG minority shareholders and receive a recurring compensation in cash of €2.82 per Diebold Nixdorf AG ordinary share for each full fiscal year of Diebold Nixdorf AG. The redemption value adjustment includes the updated cash compensation pursuant to the DPLTA. A portion of the proceeds of the Term Loan A-1 Facility are restricted to fund the purchase of the remaining shares of Diebold Nixdorf AG not owned by the Company and are included in restricted cash in the consolidated balance sheets.

The remaining balance relates to certain noncontrolling interests in Europe, which have put right redemption features not in control of the Company that are included in redeemable noncontrolling interests. The results of operations for these redeemable noncontrolling interests were not significant.

The ultimate amount and timing of any future cash payments related to the put rights are uncertain.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 13: ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the years ended December 31:



	Translation			Foreign Currency Hedges			Interest Rate Hedges			Pension and Other Post-Retirement Benefits			Other			Accumulated Other Comprehensive Loss
Balance at December 31, 2016	$	(251.2	)	$	(5.7	)	$	4.6		$	(89.3	)	$	0.3		$	(341.3	)
Other comprehensive income (loss) before reclassifications ⁽¹⁾	134.4			0.6			3.9			3.4			(0.2		)	142.1
Amounts reclassified from AOCI	—			—			(0.4		)	3.3			—			2.9
Net current period other comprehensive income (loss)	134.4			0.6			3.5			6.7			(0.2		)	145.0
Balance at December 31, 2017	$	(116.8	)	$	(5.1	)	$	8.1		$	(82.6	)	$	0.1		$	(196.3	)
Adoption of accounting standard	(9.1		)	(1.0		)	1.3			(20.2		)	—			(29.0		)
Other comprehensive income (loss) before reclassifications ⁽¹⁾	(65.6		)	4.2			(1.4		)	(18.6		)	—			(81.4		)
Amounts reclassified from AOCI	—			—			2.6			0.4			—			3.0
Net current period other comprehensive income (loss)	(74.7		)	3.2			2.5			(38.4		)	—			(107.4		)
Balance at December 31, 2018	$	(191.5	)	$	(1.9	)	$	10.6		$	(121.0	)	$	0.1		$	(303.7	)


⁽¹⁾	Other comprehensive income (loss) before reclassifications within the translation component excludes (gains)/losses of $3.9 and $(5.9) and translation attributable to noncontrolling interests for December 31, 2018 and 2017, respectively.

The following table summarizes the details about amounts reclassified from AOCI for the years ended December 31:



	2018			2017
	Amount Reclassified from AOCI			Amount Reclassified from AOCI			Affected Line Item in the Statement of Operations
Interest rate hedges (net of tax of $(0.6) and (0.1), respectively)	$	2.6		$	(0.4	)	Interest expense
Pension and post-retirement benefits:
Net actuarial losses recognized during the year (net of tax of $(1.1) and $(3.3), respectively)	4.8			2.2			⁽¹⁾
Net actuarial gains (losses) recognized due to settlement (net of tax of $(1.3) and $0.4, respectively)	(3.5		)	(0.2		)	⁽¹⁾
Currency impact (net of tax of $(0.3) and $(1.9), respectively)	(0.9		)	1.3			⁽¹⁾
	0.4			3.3
Total reclassifications for the period	$	3.0		$	2.9


⁽¹⁾	Pension and other post-retirement benefits AOCI components are included in the computation of net periodic benefit cost (refer to note 15 ).

NOTE ~~16: COMMITMENTS~~14: ACQUISITIONS AND ~~CONTINGENCIES~~DIVESTITURES

~~Contractual Obligation~~

~~At December 31, 2015,~~In the first quarter of 2018, the Company ~~had purchase commitments due within one year totaling $9.3~~acquired the remaining portion of its noncontrolling interest in its China operations for ~~materials through contract manufacturing agreements at negotiated prices. The amounts purchased under these obligations totaled $7.6~~$5.8 in ~~2015.~~the aggregate.

~~Indirect Tax Contingencies~~

The Company accrues non-income tax liabilities for indirect tax matters when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they are charged against income. In evaluating indirect tax matters, management takes into consideration factors such as historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. Management evaluates and updates accruals as matters progress over time. It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably toDuring 2017, the Company acquired all the capital stock of Moxx and ~~could require recognizing future expenditures. Also, statutes~~certain assets and liabilities of ~~limitations could expire without the Company paying the taxes~~Visio for ~~matters for which accruals have been established, which could result in the recognition of future gains upon reversal of these accruals at that time.~~

At ~~December 31, 2015, the Company was a party to several routine indirect tax claims from various taxing authorities globally that were incurred in the normal course of business, none of which individually or~~$5.6 in the aggregate, ~~is considered material by management~~net of cash acquired, which are included in ~~relation to~~ the Company’s financial position or results of operations. In management’s opinion, the consolidated financial statements would not be materially affected by the outcome of these indirect tax claims and/or proceedings or asserted claims.

~~In addition to these routine indirect tax matters, the Company was a party to the proceedings described below:~~

~~In August 2012, one of the Company's Brazil subsidiaries was notified of a tax assessment of approximately R$270.0, including penalties~~Retail and interest, regarding certain Brazil federal indirect taxes (Industrialized Products Tax, Import Tax, Programa de Integração Social and Contribution to Social Security Financing) for 2008 and 2009. The assessment alleges improper importation of certain components into Brazil's free trade zone that would nullify certain indirect tax incentives. On September 10, 2012, the Company filed its administrative defenses with the tax authorities. This proceeding is currently pending an administrative level decision, which could negatively impact Brazil federal indirect taxes in other years that remain open under statute. It is reasonably possible that the Company could be required to pay taxes, penalties and interest related to this matter, which could be material to the Company's consolidated financial statements.

In connection with the Brazil indirect tax assessment, in May 2013, the U.S. Securities and Exchange Commission (SEC) requested that the Company retain certain documents and produce certain records relating to the assessment, to which the Company complied. In September 2014, the Company was notified by the SEC that it had closed its inquiry relating to the assessment.

Beginning in July 2014, the Company challenged customs rulings in Thailand seeking to retroactively collect customs duties on previous imports of ATMs. Management believes that the customs authority’s attempt to retroactively assess customs duties is in contravention of World Trade Organization agreements and, accordingly, is challenging the rulings. InEurasia Banking segments, respectively. During the third quarter of ~~2015,~~2017, the Company ~~received a prospective ruling from the United States Customs Border Protection~~acquired Moxx, which is ~~consistent with~~a Netherlands based managed services company that provides managed mobility solutions for enterprises that use a large number of mobile assets in their business operations. In the second quarter of 2017, the Company acquired Visio, which is a design company based in Germany.

During 2017, the Company divested its ~~interpretation~~legacy Diebold business in the U.K. to Cennox Group for $5.0, fulfilling the requirements previously set forth by the U.K. Competition and Markets Authority. The divestiture closed on June 30, 2017. The legacy, independent Wincor Nixdorf U.K. and Ireland business will be completely integrated into the global Diebold Nixdorf operations and brand. As part of the ~~treaty in question. We are submitting that ruling for consideration in our ongoing dispute with Thailand. The matters are currently in the appeals process and management continues~~Company's routine efforts to ~~believe that~~evaluate its business operations, during 2017, the Company ~~has a valid legal position~~agreed to sell its ES businesses located in ~~these appeals. Accordingly, the Company has not accrued any amount for this contingency; however, the Company cannot provide any assurance that it will not ultimately be subject~~Mexico and Chile to a ~~retroactive assessment.~~wholly-owned subsidiary of Securitas AB and Avant, respectively. The Company

At ~~December 31, 2015~~ and 2014, the Company had an accrual of approximately $7.5 and $12.5, respectively, related to the Brazil indirect tax matter disclosed above. The reduction in the accrual is due to the expiration of the statute of limitations related to years subject to audit and foreign currency fluctuations.

8581

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

~~A loss contingency is reasonably possible if it has~~recorded a ~~more than remote but~~pre-tax gain of $2.2 related to these transactions. The combined net sales of the divestitures represented less than ~~probable chance~~one percent of ~~occurring. Although management believes~~total net sales of the Company for 2018, 2017 and 2016.

In February 2016, the Company finalized its divestiture of its wholly-owned ES subsidiary located in the U.S. and Canada for an aggregate purchase price of $350.0 in cash, 10.0 percent of which was contingent based on the successful transition of certain customer relationships. The Company received payment and recorded a pre-tax gain of $239.5 on the ES divestiture, which was recognized during 2016. Cash flows provided or used by the NA ES business are presented as cash flows from discontinued operations for all of the periods presented. The results of operations, financial position and cash flows from the NA ES business were not included in the Company's financial statements from the closing date.

The following summarizes select financial information included in income from discontinued operations, net of tax:



	For the year ended December 31, 2016
Net sales
Services	$	16.3
Products	8.5
	24.8
Cost of sales
Services	15.1
Products	6.9
	22.0
Gross profit	2.8
Selling and administrative expense	4.8
Loss from discontinued operations before taxes	(2.0		)
Income tax benefit	(0.7		)
	(1.3		)

Gain on sale of discontinued operations before taxes	239.5
Income tax expense	94.5
Gain on sale of discontinued operations, net of tax	145.0
Income from discontinued operations, net of tax	$	143.7

NOTE 15: BENEFIT PLANS

Qualified Retirement Benefits. The Company has ~~valid defenses~~qualified retirement plans covering certain U.S. employees that have been closed to new participants since 2003 and frozen since December 2013. Plans that cover salaried employees provide retirement benefits based on the employee’s compensation during the ten years before the date of the plan freeze or the date of their actual separation from service, if earlier. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. Plans covering hourly employees generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions required by applicable regulations.

The Company's non-U.S. benefit plans cover eligible employees located predominately in Germany, Switzerland, Belgium, the U.K. and France. Benefits for these plans are based primarily on each employee's final salary, with ~~respect~~annual adjustments for inflation. The obligations in Germany consist of employer funded pension plans and deferred compensation plans. The employer funded pension plans are based upon direct performance-related commitments in terms of defined contribution plans. Each beneficiary receives, depending on individual pay-scale grouping, contractual classification, or income level, different yearly contributions. The contribution is multiplied by an age factor appropriate to the respective pension plan and credited to the individual retirement account of the employee. The retirement accounts may be used up at retirement by either a one-time lump-sum payout or payments of up to ten years. In Switzerland, the post-employment benefit plan is required due to statutory provisions. The employees receive their pension payments as a function of contributions paid, a fixed interest rate and annuity factors. Insured events for these plans are primarily disability, death and reaching of retirement age.

In the Netherlands, the Company recognized a curtailment gain of $4.6 in 2016 related to its ~~indirect tax positions, it~~Netherlands' SecurCash B.V. plan due to a restructuring and cessation of accruals in the plan as of December 31, 2016. A transfer to an industry-wide pension fund

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

occurred in early 2017, which transferred $186.8 of obligations and assets and is ~~reasonably possible that~~included in the settlements caption in the following tables. Final settlement accounting for this plan took place and resulted in $0.4 of income for the year ended December 31, 2017.

The Company has other defined benefit plans outside the U.S., which have not been mentioned here due to their insignificance.

Supplemental Executive Retirement Benefits. The Company has non-qualified pension plans in the U.S. to provide supplemental retirement benefits to certain officers, which were also frozen since December 2013. Benefits are payable at retirement based upon a ~~loss could occur~~percentage of the participant’s compensation, as defined.

Other Benefits. In addition to providing retirement benefits, the Company provides post-retirement healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Retired eligible employees in the U.S. may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. There are no plan assets and the Company funds the benefits as the claims are paid. The post-retirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)



	Retirement Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans
	2018			2017			2018			2017			2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	569.0		$	554.5		$	452.0		$	546.9		$	9.9		$	10.8
Service cost	3.9			3.9			11.0			10.5			—			—
Interest cost	20.6			22.9			6.2			5.7			0.4			0.4
Actuarial (gain) loss	(41.3		)	17.9			(3.5		)	7.5			(1.6		)	(0.5		)
Plan participant contributions	—			—			1.4			1.3			—			—
Benefits paid	(30.0		)	(30.2		)	(17.3		)	(10.0		)	(0.8		)	(0.8		)
Plan amendments	—			—			—			(0.8		)	—			—
Special termination benefits	—			—			—			0.1			—			—
Settlements	—			—			(7.7		)	(191.4		)	—			—
Foreign currency impact	—			—			(18.1		)	59.2			—			—
Acquired benefit plans and other	—			—			2.5			23.0			7.4			—
Benefit obligation at end of year	522.2			569.0			426.5			452.0			15.3			9.9
Change in plan assets
Fair value of plan assets at beginning of year	378.7			351.7			359.5			482.9			—			—
Actual return on plan assets	(20.3		)	53.6			2.2			12.7			—			—
Employer contributions	17.6			3.6			16.9			1.3			0.8			0.8
Plan participant contributions	—			—			1.4			1.3			—			—
Benefits paid	(30.0		)	(30.2		)	(17.3		)	(10.0		)	(0.8		)	(0.8		)
Foreign currency impact	—			—			(14.4		)	51.7			—			—
Acquired benefit plans and other	—			—			0.3			11.0			—			—
Settlements	—			—			(7.7		)	(191.4		)	—			—
Fair value of plan assets at end of year	346.0			378.7			340.9			359.5			—			—
Funded status	$	(176.2	)	$	(190.3	)	$	(85.6	)	$	(92.5	)	$	(15.3	)	$	(9.9	)
Amounts recognized in balance sheets
Noncurrent assets	$	—		$	0.3		$	—		$	6.9		$	—		$	—
Current liabilities	3.4			3.5			3.2			3.2			1.1			1.1
Noncurrent liabilities⁽¹⁾	172.7			187.1			82.4			96.2			14.2			8.8
Accumulated other comprehensive loss:
Unrecognized net actuarial gain (loss)⁽²⁾	(151.3		)	(154.4		)	19.0			27.7			(6.3		)	(0.5		)
Unrecognized prior service benefit (cost)⁽²⁾	—			—			0.7			0.8			—			—
Net amount recognized	$	24.8		$	35.9		$	105.3		$	121.0		$	9.0		$	9.4


⁽¹⁾	Included in the consolidated balance sheets in pensions, post-retirement and other benefits.


⁽²⁾	Represents amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)



	Retirement Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans
	2018			2017			2018			2017			2018			2017
Change in accumulated other comprehensive loss
Balance at beginning of year	$	(154.4	)	$	(170.1	)	$	28.5		$	27.7		$	(0.5	)	$	(1.1	)
Prior service cost occurring during the year	—			—			—			0.9			—			—
Net actuarial losses recognized during the year	6.6			5.9			(0.7		)	(0.4		)	—			—
Net actuarial gains (losses) occurring during the year	(3.6		)	9.8			(4.9		)	0.7			1.6			0.6
Net actuarial losses recognized due to settlement	—			—			(2.2		)	(0.6		)	—			—
Acquired benefit plans and other	—			—			(0.3		)	(3.0		)	(7.4		)	—
Foreign currency impact	—			—			(0.6		)	3.2			—			—
Balance at end of year	$	(151.4	)	$	(154.4	)	$	19.8		$	28.5		$	(6.3	)	$	(0.5	)



	Retirement Benefits																		Other Benefits
	U.S. Plans									Non-U.S. Plans
	2018			2017			2016			2018			2017			2016			2018		2017		2016
Components of net periodic benefit cost
Service cost	$	3.9		$	3.9		$	3.5		$	11.0		$	10.5		$	5.5		$	—	$	—	$	—
Interest cost	20.6			22.9			24.7			6.2			5.7			2.7			0.4		0.4		0.5
Expected return on plan assets	(24.6		)	(25.9		)	(27.0		)	(10.5		)	(4.5		)	(3.5		)	—		—		—
Recognized net actuarial loss	6.6			5.9			5.5			(0.7		)	(0.4		)	—			—		—		0.2
Curtailment (gain) loss	—			—			—			—			0.1			(4.6		)	—		—		—
Settlement gain	—			—			—			(2.2		)	(0.6		)	—			—		—		—
Net periodic benefit cost	$	6.5		$	6.8		$	6.7		$	3.8		$	10.8		$	0.1		$	0.4	$	0.4	$	0.7

The following table represents information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31:



	U.S. Plans				Non-U.S. Plans
	2018		2017		2018		2017
Projected benefit obligation	$	522.2	$	569.0	$	426.5	$	452.0
Accumulated benefit obligation	$	522.2	$	569.0	$	409.7	$	439.5
Fair value of plan assets	$	346.0	$	378.7	$	340.9	$	359.5

The following table represents the ~~estimated accrual,~~weighted-average assumptions used to determine benefit obligations at December 31:



	Pension Benefits								Other Benefits
	U.S. Plans				Non-U.S. Plans
	2018		2017		2018		2017		2018		2017
Discount rate	4.34	%	3.71	%	1.60	%	1.45	%	4.34	%	3.71	%
Rate of compensation increase	N/A		N/A		2.82	%	2.75	%	N/A		N/A

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The following table represents the weighted-average assumptions used to determine periodic benefit cost at December 31:



	Pension Benefits								Other Benefits
	U.S. Plans				Non-U.S. Plans
	2018		2017		2018		2017		2018		2017
Discount rate	3.71	%	4.24	%	1.45	%	1.47	%	3.71	%	4.24	%
Expected long-term return on plan assets	6.80	%	7.40	%	2.97	%	1.34	%	N/A		N/A
Rate of compensation increase	N/A		N/A		2.75	%	2.76	%	N/A		N/A

The discount rate is determined by analyzing the average return of high-quality (i.e., AA-rated) fixed-income investments and the year-over-year comparison of certain widely used benchmark indices as of the measurement date. The expected long-term rate of return on plan assets is primarily determined using the plan’s current asset allocation and its expected rates of return. The Company also considers information provided by its investment consultant, a survey of other companies using a December 31 measurement date and the Company’s historical asset performance in determining the expected long-term rate of return. The rate of compensation increase assumptions reflects the Company’s long-term actual experience and future and near-term outlook.

During 2017, the Society of Actuaries released new mortality improvement projection scale (MP-2017) resulting from recent studies measuring mortality rates for ~~which~~various groups of individuals. As of December 31, 2017, the Company ~~estimated~~adopted for the ~~aggregate~~pension plan in the U.S. the use of the RP-2014 base mortality table modified to remove the post-2006 projections using the MP-2014 mortality improvement scale and replacing it with projections using the fully generational MP-2017 projection scale. For the plans outside the U.S., the mortality tables used are those either required or customary for local accounting and/or funding purposes.

The following table represents assumed healthcare cost trend rates at December 31:



	2018		2017
Healthcare cost trend rate assumed for next year	6.5	%	6.8	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.0	%	5.0	%
Year that rate reaches ultimate trend rate	2025		2025

The healthcare trend rates for the postemployment benefits plans in the U.S. are reviewed based upon the results of actual claims experience. The Company used initial healthcare cost trends of 6.5 percent and 6.8 percent in 2018 and 2017, respectively, with an ultimate trend rate of 5.0 percent reached in 2025. Assumed healthcare cost trend rates have a modest effect on the amounts reported for the healthcare plans.

A one-percentage-point change in assumed healthcare cost trend rates results in a minimal impact to total service and interest cost and post-retirement benefit obligation.

The Company has a pension investment policy in the U.S. designed to achieve an adequate funded status based on expected benefit payouts and to establish an asset allocation that will meet or exceed the return assumption while maintaining a prudent level of risk. The plans' target asset allocation adjusts based on the plan's funded status. As the funded status improves or declines, the debt security target allocation will increase and decrease, respectively. The Company utilizes the services of an outside consultant in performing asset / liability modeling, setting appropriate asset allocation targets along with selecting and monitoring professional investment managers.

The U.S. plan assets are invested in equity and fixed income securities, alternative assets and cash. Within the equities asset class, the investment policy provides for investments in a broad range of publicly-traded securities including both domestic and international stocks diversified by value, growth and cap size. Within the fixed income asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities with a substantial portion allocated to a long duration strategy in order to partially offset interest rate risk relative to the plans’ liabilities. The alternative asset class includes investments in diversified strategies with a stable and proven track record and low correlation to the U.S. stock market. Several plans outside of the U.S. are also invested in various assets, under various investment policies in compliance with local funding regulations.

In connection with the Acquisition, the Company also acquired plan assets that had been created in June 2006 as part of a Contractual Trust Arrangement (CTA), under which company assets have been irrevocably transferred to a registered association (Alme Pension Foundation) for the exclusive purpose of securing and funding pension and other postemployment benefits obligations to employees in Belgium, Germany, France and Switzerland. The association is investing in current and non-current assets, using a funding strategy that is reviewed on a regular basis by analyzing asset development as well as the current situation of the financial market.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The following table summarizes the Company’s target allocation for these asset classes in 2019, which are readjusted at least quarterly within a defined range for the U.S., and the Company’s actual pension plan asset allocation as of December 31, 2018 and 2017:



	U.S. Plans			Non-U.S. Plans
	Target	Actual		Target	Actual
	2019	2018	2017	2019	2018	2017
Equity securities	45%	44%	46%	40%	40%	24%
Debt securities	40%	41%	40%	27%	27%	26%
Real estate	5%	6%	5%	10%	10%	11%
Other	10%	9%	9%	23%	23%	39%
Total	100%	100%	100%	100%	100%	100%

The following table summarizes the fair value categorized into a three level hierarchy, as discussed in note 1, based upon the assumptions (inputs) of the Company’s plan assets as of December 31, 2018:



	U.S. Plans								Non-U.S. Plans
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Cash and short-term investments	$	3.0	$	3.0	$	—	$	—	$	34.0	$	34.0	$	—	$	—
Mutual funds	26.8		26.8		—		—		125.2		125.2		—		—
Equity securities
U.S. mid cap value	—		—		—		—		3.1		3.1		—		—
U.S. small cap core	17.2		17.2		—		—		0.3		0.3		—		—
International developed markets	34.5		34.5		—		—		7.7		7.7		—		—
Emerging markets	17.8		—		17.8		—		0.4		0.4		—		—
Fixed income securities
U.S. corporate bonds	45.6		—		45.6		—		—		—		—		—
International corporate bonds	—		—		—		—		76.8		1.3		75.5		—
U.S. government	7.4		—		7.4		—		—		—		—		—
Fixed and index funds	0.1		—		0.1		—		14.7		14.7		—		—
Common collective trusts
Real estate (a)	20.8		—		—		20.8		5.0		—		5.0		—
Other (b)	145.6		—		145.6		—		—		—		—		—
Alternative investments
Multi-strategy hedge funds (c)	19.3		—		—		19.3		—		—		—		—
Private equity funds (d)	7.9		—		—		7.9		—		—		—		—
Other alternative investments (e)	—		—		—		—		73.7		—		1.9		71.8
Fair value of plan assets at end of year	$	346.0	$	81.5	$	216.5	$	48.0	$	340.9	$	186.7	$	82.4	$	71.8

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The following table summarizes the fair value of the Company’s plan assets as of December 31, 2017:



	U.S. Plans								Non-U.S. Plans
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Cash and short-term investments	$	3.5	$	3.5	$	—	$	—	$	82.5	$	82.1	$	0.4	$	—
Mutual funds	32.0		32.0		—		—		77.5		77.5		—		—
Equity securities
U.S. mid cap value	—		—		—		—		0.7		0.7		—		—
U.S. small cap core	19.0		19.0		—		—		—		—		—		—
International developed markets	39.3		39.3		—		—		11.2		11.2		—		—
Emerging markets	19.5		—		19.5		—		—		—		—		—
Fixed income securities
U.S. corporate bonds	50.0		—		50.0		—		—		—		—		—
International corporate bonds	—		—		—		—		86.9		5.9		81.0		—
U.S. government	7.7		—		7.7		—		—		—		—		—
Fixed and index funds	0.6		—		0.6		—		11.7		7.4		4.3		—
Common collective trusts
Real estate (a)	19.2		—		—		19.2		4.7		—		4.7		—
Other (b)	159.9		—		159.9		—		—		—		—		—
Alternative investments
Multi-strategy hedge funds (c)	18.9		—		—		18.9		1.6		—		1.6		—
Private equity funds (d)	9.1		—		—		9.1		—		—		—		—
Other alternative investments (e)	—		—		—		—		82.7		—		0.9		81.8
Fair value of plan assets at end of year	$	378.7	$	93.8	$	237.7	$	47.2	$	359.5	$	184.8	$	92.9	$	81.8

(a)

Real estate common collective trust.The objective of the real estate common collective trust (CCT) is to achieve long-term returns through investments in a broadly diversified portfolio of improved properties with stabilized occupancies. As of December 31, 2018, investments in this CCT, for U.S. plans, included approximately 37 percent office, 23 percent residential, 26 percent retail and 14 percent industrial, cash and other. As of December 31, 2017, investments in this CCT, for U.S. plans, included approximately 41 percent office, 21 percent residential, 27 percent retail and 11 percent industrial, cash and other. Investments in the real estate CCT can be redeemed once per quarter subject to available cash, with a 30-day notice.

(b)

Other common collective trusts. At December 31, 2018, approximately 61 percent of the other CCTs are invested in fixed income securities including approximately 23 percent in mortgage-backed securities, 51 percent in corporate bonds and 26 percent in U.S. Treasury and other. Approximately 39 percent of the other CCTs at December 31, 2018 are invested in Russell 1000 Fund large cap index funds. At December 31, 2017, approximately 59 percent of the other CCTs are invested in fixed-income securities including approximately 15 percent in mortgage-backed securities, 54 percent in corporate bonds and 31 percent in U.S. Treasury and other. Approximately 41 percent of the other CCTs at December 31, 2017 are invested in Russell 1000 Fund large cap index funds. Investments in fixed-income securities can be redeemed daily.

(c)

Multi-strategy hedge funds. The objective of the multi-strategy hedge funds is to diversify risks and reduce volatility. At December 31, 2018 and 2017, investments in this class for U.S. plans include approximately 44 percent and 50 percent long/short equity, respectively, 54 percent and 45 percent arbitrage and event investments, respectively, and 2 percent and 5 percent in directional trading, fixed income and other, respectively. Investments in the multi-strategy hedge fund can be redeemed semi-annually with a 95-day notice.

(d)

Private equity funds. The objective of the private equity funds is to achieve long-term returns through investments in a diversified portfolio of private equity limited partnerships that offer a variety of investment strategies, targeting low volatility and low correlation to traditional asset classes. As of December 31, 2018 and 2017, investments in these private equity funds include approximately 43 percent and 42 percent, respectively, in buyout private equity funds that usually invest in mature companies with established business plans, approximately 34 percent and 25 percent, respectively, in special situations private equity and debt funds that focus on niche investment strategies and approximately 23 percent and 33 percent respectively, in venture private equity funds that invest in early development or expansion of business. Investments in the private equity fund can be redeemed only with written

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

consent from the general partner, which may or may not be granted. At December 31, 2018 and 2017, the Company had unfunded commitments of underlying funds of $5.5 in both years.


(e)	Other alternative investments. Following the Acquisition, the Company’s plan assets were expanded with a combination of insurance contracts, multi-strategy investment funds and company-owned real estate. The fair value for these assets is determined based on the NAV as reported by the underlying investment manager, insurance companies and the trustees of the CTA.

The following table summarizes the changes in fair value of level 3 assets for the years ended December 31:



	U.S. Plans						Non-U.S. Plans
	2018			2017			2018			2017
Balance, January 1	$	47.2		$	47.4		$	81.8		$	230.6
Dispositions	(2.8		)	(4.3		)	4.9			(175.3		)
Realized and unrealized gain (loss), net	3.6			4.1			(14.9		)	26.5
Balance, December 31	$	48.0		$	47.2		$	71.8		$	81.8

The following table represents the amortization amounts expected to be recognized during 2019:



	U.S. Pension Benefits		Non-U.S. Pension Benefits			Other Benefits
Amount of net loss (gain)	$	5.0	$	(1.5	)	$	—

The Company contributed $34.5 to its retirement plans, including contributions to the nonqualified plan and benefits paid from company assets. In 2018, the Company received a reimbursement of $14.6 from the CTA assets to the Company for benefits paid directly from company assets, and $0.8 to its other post-retirement benefit plan during the year ended December 31, 2018. The Company expects to contribute approximately $1 to its other post-retirement benefit plan and expects to contribute approximately $50 to its retirement plans, including the nonqualified plan, as well as benefits payments directly from the Company during the year ending December 31, 2019. The Company anticipates reimbursement of approximately $13 for certain benefits paid from its trustee in 2019. The following benefit payments, which reflect expected future service, are expected to be paid:



	U.S. Pension Benefits		Non-U.S. Pension Benefits		Other Benefits		Other Benefits after Medicare Part D Subsidy
2019	$	28.4	$	30.8	$	0.9	$	0.8
2020	$	29.1	$	27.9	$	0.9	$	0.8
2021	$	29.8	$	27.9	$	0.8	$	0.8
2022	$	30.4	$	25.1	$	0.8	$	0.7
2023	$	30.9	$	31.7	$	0.8	$	0.7
2024-2028	$	160.4	$	132.9	$	3.1	$	2.8

Retirement Savings Plan. The Company offers employee 401(k) savings plans (Savings Plans) to encourage eligible employees to save on a regular basis by payroll deductions. The Company's basic match is 60 percent of the first 6 percent of a participant's qualified contributions, subject to IRS limits.

The Company match is determined by the Board of Directors and evaluated at least annually. Total Company match was $10.3, $8.2 and $8.3 for the years ended December 31, 2018, 2017 and 2016, respectively. In January 2019, the Company suspended its match to the Savings Plans.

Deferred Compensation Plans. The Company has deferred compensation plans in the U.S. and Germany that enable certain employees to defer a portion of their cash wages, cash bonus, 401(k) or other compensation and non-employee directors to defer receipt of director fees at the participants’ discretion. For deferred cash-based compensation and 401(k), the Company established rabbi trusts in the U.S., which are recorded at fair value of the underlying securities within securities and other investments. The related deferred compensation liabilities are recorded at fair value within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trusts are recognized in interest income with corresponding changes in the Company’s deferred compensation obligation recorded as compensation cost within selling and administrative expense.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 16: LEASES

The Company’s future minimum lease payments due under non-cancellable operating leases for real estate, vehicles and other equipment at December 31, ~~2015~~2018 are as follows:



	Total		Real Estate		Vehicles and Equipment (a)
2019	$	81.4	$	50.0	$	31.4
2020	57.6		33.8		23.8
2021	35.9		26.8		9.1
2022	22.9		19.6		3.3
2023	17.4		16.0		1.4
Thereafter	8.6		8.6		—
	$	223.8	$	154.8	$	69.0


(a)	The Company leases vehicles with contractual terms of 36 to 60 months that are cancellable after 12 months without penalty. Future minimum lease payments reflect only the minimum payments of the historical average holding period of these vehicles.

Under lease agreements that contain escalating rent provisions, lease expense is recorded on a straight-line basis over the lease term. Rental expense under all lease agreements amounted to ~~be up to approximately $174.5~~$123.2, $125.4 and $84.3 for ~~its material indirect tax matters, of which approximately $138.0~~the years ended December 31, 2018, 2017 and $24.0, respectively, relates to the Brazil indirect tax matter and Thailand customs matter disclosed above. The aggregate risk related to indirect taxes is adjusted as the applicable statutes of limitations expire.2016, respectively.

~~Legal Contingencies~~

At December 31, 2015, the Company was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company’s financial position or results of operations. In addition, the Company has indemnification obligations with certain former employees, and costs associated with these indemnifications are expensed as incurred. In management’s opinion, the Company's consolidated financial statements would not be materially affected by the outcome of these legal proceedings, commitments or asserted claims.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

The following tables represent information regarding the Company’s segment information and provides a reconciliation between segment operating profit and the consolidated ~~income (loss)~~loss from continuing operations before income taxes for the years ended December 31:

2015 2014 2013
Revenue summary by segment
NA $ 1,094.5
$ 1,091.4
$ 1,140.2
AP 439.6
500.3
479.1
EMEA 393.1
421.2
362.2
LA 492.1
721.9
601.1
Total customer revenues $ 2,419.3
$ 2,734.8
$ 2,582.6

Intersegment revenues
NA $ 81.4
$ 68.4
$ 76.3
AP 99.7
85.4
99.3
EMEA 73.4
56.6
46.0
LA 0.5
0.5
—
Total intersegment revenues $ 255.0
$ 210.9
$ 221.6

Segment operating profit
NA $ 250.1
$ 266.3
$ 232.4
AP 63.1
66.4
62.8
EMEA 55.3
61.4
44.0
LA 37.4
68.7
41.5
Total segment operating profit $ 405.9
$ 462.8
$ 380.7

Corporate charges not allocated to segments ⁽¹⁾
(270.8 ) (296.6 ) (267.8 )
Impairment of assets (18.9 ) (2.1 ) (72.0 )
Restructuring charges (21.2 ) (11.6 ) (53.2 )
Net non-routine (expense) income (36.4 ) 12.5
(128.0 )

(347.3 ) (297.8 ) (521.0 )
Operating profit (loss) 58.6
165.0
(140.3 )
Other income (expense) (12.8 ) (10.3 ) (1.5 )
Income (loss) from continuing operations before taxes $ 45.8
$ 154.7
$ (141.8 )



	2018			2017			2016
Net sales summary by segment
Eurasia Banking	$	1,800.2		$	1,903.4		$	1,232.6
Americas Banking	1,515.7			1,525.6			1,567.3
Retail	1,262.7			1,180.3			516.4
Total customer revenues	$	4,578.6		$	4,609.3		$	3,316.3

Intersegment revenues
Eurasia Banking	$	161.1		$	105.0		$	63.5
Americas Banking	13.8			25.9			38.5
Retail	—			—			—
Total intersegment revenues	$	174.9		$	130.9		$	102.0

Segment operating profit
Eurasia Banking	$	147.1		$	126.8		$	88.2
Americas Banking	27.6			68.1			101.8
Retail	50.3			87.9			34.0
Total segment operating profit	$	225.0		$	282.8		$	224.0

Corporate charges not allocated to segments ⁽¹⁾	$	(62.7	)	$	(62.6	)	$	(69.3	)
Impairment of assets	(217.5		)	(3.1		)	(9.8		)
Restructuring charges	(65.0		)	(49.4		)	(59.4		)
Net non-routine expense	(242.7		)	(261.2		)	(255.3		)
	(587.9		)	(376.3		)	(393.8		)
Operating loss	(362.9		)	(93.5		)	(169.8		)
Other expense	(152.7		)	(98.4		)	(78.9		)
Loss from continuing operations before taxes	$	(515.6	)	$	(191.9	)	$	(248.7	)


⁽¹⁾	Corporate charges not allocated to segments include ~~headquarter based~~headquarter-based costs associated with ~~manufacturing administration,~~ procurement, human resources, compensation and benefits, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global ~~information technology,~~IT, tax, treasury and legal.

Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the reportable operating segments. Net non-routine expense of $242.7 for the year ended December 31, 2018 was primarily due to the inventory provision of $74.5 in cost of sales, acquisition integration expenses of $47.2 primarily within selling and administrative expense and purchase accounting pre-tax charges for amortization of acquired intangibles of $113.4. Net non-routine expense of $261.2 for the year ended December 31, 2017 was primarily due to acquisition integration expenses of $72.1 primarily within selling and administrative expense and purchase accounting pre-tax charges for amortization of acquired intangibles of $160.9. Net non-routine expense of $255.3 for the year ended December 31, 2016 was primarily due to the impact of purchase accounting adjustments of $128.6 primarily in cost of sales and legal, acquisition and divestiture related costs of $104.3 primarily within selling and administrative expense.

2015 2014 2013
Segment depreciation and amortization expense
NA $ 9.7
$ 8.7
$ 12.1
AP 6.9
7.7
7.7
EMEA 3.1
4.0
3.7
LA 6.9
12.0
11.6
Total segment depreciation and amortization expense 26.6
32.4
35.1
Corporate depreciation and amortization expense 37.4
41.0
47.3
Total depreciation and amortization expense $ 64.0
$ 73.4
$ 82.4

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

2015 2014 2013
Segment property, plant and equipment, at cost
NA $ 110.7
$ 120.6
$ 131.0
AP 53.3
46.9
46.1
EMEA 35.2
38.2
40.7
LA 51.9
78.7
89.6
Total segment property, plant and equipment, at cost 251.1
284.4
307.4
Corporate property, plant and equipment, at cost, not allocated to segments 357.9
320.4
285.0
Total property, plant and equipment, at cost $ 609.0
$ 604.8
$ 592.4

The following table presents information regarding the Company’s ~~revenue~~segment net sales by service and product solution:

Revenue summary by service and product solution 2015 2014 2013
Financial self-service
Services $ 1,185.0
$ 1,219.9
$ 1,188.7
Products 923.7
977.3
977.7
Total financial self-service 2,108.7
2,197.2
2,166.4
Security
Services 209.3
212.9
232.1
Products 83.5
99.5
112.2
Total security 292.8
312.4
344.3
Total financial self-service & security 2,401.5
2,509.6
2,510.7
Brazil other 17.8
225.2
72.0
$ 2,419.3
$ 2,734.8
$ 2,582.7



	2018		2017		2016
Eurasia Banking
Services	$	1,111.8	$	1,133.1	$	637.3
Products	688.4		770.3		595.3
Total Eurasia Banking	1,800.2		1,903.4		1,232.6
Americas Banking
Services	1,025.8		1,043.9		1,068.1
Products	489.9		481.7		499.2
Total Americas Banking	1,515.7		1,525.6		1,567.3
Retail
Services	651.9		608.3		202.6
Products	610.8		572.0		313.8
Total Retail	1,262.7		1,180.3		516.4
Total	$	4,578.6	$	4,609.3	$	3,316.3

The Company had no customers that accounted for more than 10 percent of total net sales in ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016.

Below is a summary of net sales by point of origin for the years ended December 31:

2015 2014 2013
Net sales
United States $ 1,014.3
$ 1,035.9
$ 1,105.2
Brazil 211.5
482.5
359.4
China 279.0
314.2
319.1
Other international 914.5
902.2
799.0
Total net sales $ 2,419.3
$ 2,734.8
$ 2,582.7



	2018		2017		2016
Americas
United States	$	1,047.7	$	1,049.5	$	1,093.6
Other Americas	556.7		556.3		568.7
Total Americas	1,604.4		1,605.8		1,662.3
EMEA
Germany	876.2		843.0		329.4
Other EMEA	1,583.8		1,537.1		853.8
Total EMEA	2,460.0		2,380.1		1,183.2
AP
Total AP	514.2		623.4		470.8
Total net sales	$	4,578.6	$	4,609.3	$	3,316.3

Below is a summary of property, plant and equipment, net by geographical location as of December 31:


	2015		2014		2013		2018		2017		2016
Property, plant and equipment, net
United States	$	130.4	$	116.5	$	101.4	$	77.8	$	91.7	$	111.2
Brazil	12.9		17.2		20.7
Germany							168.2		205.3		199.7
Other international	32.0		32.0		35.7		58.1		67.5		76.1
Total property, plant and equipment, net	$	175.3	$	165.7	$	157.8	$	304.1	$	364.5	$	387.0

In the following table, revenue is disaggregated by timing of revenue recognition at December 31:



Timing of revenue recognition	2018	2017
Products transferred at a point in time	39%	40%
Products and services transferred over time	61%	60%
Net sales	100%	100%

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, ~~2015~~2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 21: ~~ACQUISITIONS AND DIVESTITURES~~

~~ACQUISITIONS~~

In the fourth quarter of 2015, the Company announced its intention to acquire all 29.8 Wincor Nixdorf ordinary shares through a voluntary tender offer for €38.98 in cash and 0.434 common shares of the Company per outstanding ordinary share of Wincor Nixdorf. The Company considered a number of factors in connection with its evaluation of the proposed transaction, including significant strategic opportunities and potential synergies, as generally supporting its decision to enter into the business combination agreement. The Company intends to finance the cash portion of the purchase price as well as any Wincor Nixdorf debt outstanding under our revolving and term loan credit agreement entered into on December 23, 2015 and bridge agreement entered into on November 23, 2015, which is contingent upon closure of the acquisition. The Company will incur certain costs and fees, some of which will be payable even in the event the acquisition is terminated or expires.

In the first quarter of 2015, the Company acquired 100 percent of the equity interests of Phoenix for a total purchase price of approximately $72.9, including $12.6 of deferred cash payment payable over the next three years. Acquiring Phoenix, a leading developer of innovative multi-vendor software solutions for ATMs and a host of other FSS applications, is a foundational move to accelerate the Company’s growth in the fast-growing managed services and branch automation spaces. The results of operations for Phoenix are primarily included in the NA reportable operating segment within the Company's consolidated financial statements from the date of the acquisition. Preliminary purchase price allocations are subject to further adjustment until all pertinent information regarding the assets acquired and liabilities assumed are fully evaluated.

In the third quarter of 2014, the Company acquired 100 percent of the equity interests of Cryptera, a supplier of the Company's encrypting PIN pad technology with significant capabilities in the research and development of secure payment technologies. This acquisition positioned the Company as a significant original equipment manufacturer of secure payment technologies and allowed the Company to own more of the intellectual property related to its ATMs. The total purchase price was approximately $13.0, which included a 10 percent deferred cash payment paid on the first anniversary of the acquisition. The results of operations for Cryptera are included in the EMEA segment within the Company's consolidated financial statements from the date of the acquisition.

~~DIVESTITURES~~

On October 25, 2015, the Company entered into a definitive asset purchase agreement with a wholly owned subsidiary of Securitas AB (Securitas Electronic Security) to divest its electronic security business located in the United States and Canada for an aggregate purchase price of $350.0 in cash, 10.0 percent of which is contingent based on the successful transition of certain customer relationships, which management expects to receive full payment of $35.0 in the first quarter of 2016 now that all contingencies for this payment have been achieved. For ES to continue its growth, it would require resources and investment that Diebold is not committed to make given its focus on the self-service market. The Company is estimating a pre-tax gain of approximately $245.0 on the ES divestiture which will be recognized in the first quarter of 2016 and is subject to change upon the finalization of the working capital adjustments and the income tax effect of gain on sale.

The Company has also agreed to provide certain transition services to Securitas Electronic Security after the closing, including providing Securitas Electronic Security a $6.0 credit for such services.

The closing of the transaction occurred on February 1, 2016. The closing purchase price is subject to a customary working capital adjustment. The Purchase Agreement provides for customary representations, warranties, covenants and agreements.

The operating results for the electronic security business were previously included in the Company's NA segment and have been reclassified to discontinued operations for all of the periods presented. The assets and liabilities of this business are classified as held for sale in the Company's consolidated balance sheet for all of the periods presented. Cash flows provided or used by the electronic security business are presented as cash flows from discontinued operations for all of the periods presented.

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

~~The following summarizes select financial information included in income from discontinued operations, net of tax:~~

Year ended December 31,
2015 2014 2013
Net sales
Services $ 221.5
$ 204.8
$ 216.3
Products 127.0
111.4
58.6
348.5
316.2
274.9
Cost of sales
Services 181.1
172.6
174.5
Products 102.2
90.5
46.1
283.3
263.1
220.6
Gross profit 65.2
53.1
54.3
Selling and administrative expense 39.7
37.2
32.3
Income from discontinued operations before taxes 25.5
15.9
22.0
Income tax expense 9.6
6.2
8.3
Income from discontinued operations, net of tax $ 15.9
$ 9.7
$ 13.7

~~The following summarizes the assets and liabilities classified as held for sale in consolidated balance sheets:~~

December 31,
2015 2014
ASSETS
Cash and cash equivalents $ (1.5 ) $ (4.1 )
Trade receivables, less allowances for doubtful accounts of $4.0 and $2.1, respectively 75.6
74.6
Inventories 29.1
30.4
Prepaid expenses 0.9
0.8
Other current assets 5.0
4.5
Total current assets 109.1
106.2
Property, plant and equipment, net 5.2
3.8
Goodwill 33.9
33.9
Other assets —
1.0
Assets held for sale $ 148.2
$ 144.9

LIABILITIES
Accounts payable $ 24.8
$ 13.1
Deferred revenue 13.3
14.3
Payroll and other benefits liabilities 6.6
7.4
Other current liabilities 4.7
4.3
Total current liabilities 49.4
39.1
Other long-term liabilities —
0.1
Liabilities held for sale $ 49.4
$ 39.2

During 2015, all assets and liabilities classified as held for sale were included in total current assets based on the cash conversion of these assets and liabilities during the first quarter of 2016. The cash and cash equivalents of the electronic security business represents outstanding checks as of December 31, 2015 and 2014.

As of first quarter 2015, the Company agreed to sell its equity interest in its Venezuela joint venture to its joint venture partner and recorded a $10.3 impairment of assets in the first quarter of 2015. On April 29, 2015, the Company closed the sale for the estimated fair market value and recorded a $1.0 reversal of impairment of assets based on final adjustments in the second quarter of 2015, resulting in a $9.3 impairment of assets for the six months ended June 30, 2015. During the remainder of 2015, the Company

~~Table of Contents~~

~~DIEBOLD INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-K as of December 31, 2015~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in millions, except per share amounts)~~

incurred an additional $0.4 related to uncollectible accounts receivable, which is included in selling and administrative expenses on the consolidated statements of operations. The Company no longer has a consolidating entity in Venezuela which was included in the LA segment but will continue to operate in Venezuela on an indirect basis.

In the second quarter of 2014, the Company divested its Eras subsidiary for a sale price of $20.0, including installment payments of $1.0 on the first and second year anniversary dates of the closing. This sale resulted in a gain of $13.7 recognized within gain on sale of assets, net in the consolidated statement of operations. Eras was included within the NA segment. Total assets and operating results of Eras were not significant to the consolidated financial statements.

~~NOTE 22:~~ QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table presents selected unaudited quarterly financial information for the years ended December 31:

First Quarter Second Quarter Third Quarter Fourth Quarter
2015 2014 2015 2014 2015 2014 2015 2014
Net sales $ 574.8
$ 614.2
$ 644.5
$ 654.4
$ 589.6
$ 687.6
$ 610.4
$ 778.6
Gross profit 159.3
150.3
170.8
174.0
150.3
187.9
171.6
214.0
Income (loss) from continuing operations, net of tax (10.2 ) 2.0
19.7
40.9
18.3
33.1
31.7
31.3
Income from discontinued operations, net of tax 4.5
2.9
4.3
2.2
4.5
1.8
2.6
2.8
Net income (loss) (5.7 ) 4.9
24.0
43.1
22.8
34.9
34.3
34.1
Net income (loss) attributable to noncontrolling interests (2.9 ) (4.9 ) 1.8
1.5
1.1
1.9
1.7
4.1
Net income (loss) attributable to Diebold, Incorporated $ (2.8 ) $ 9.8
$ 22.2
$ 41.6
$ 21.7
$ 33.0
$ 32.6
$ 30.0

Basic earnings (loss) per share
Income (loss) from continuing operations, net of tax $ (0.11 ) $ 0.10
$ 0.27
$ 0.61
$ 0.26
$ 0.48
$ 0.46
$ 0.42
Income from discontinued operations, net of tax 0.07
0.05
0.07
0.03
0.07
0.03
0.04
0.04
Net income (loss) attributable to Diebold, Incorporated (basic) $ (0.04 ) $ 0.15
$ 0.34
$ 0.64
$ 0.33
$ 0.51
$ 0.50
$ 0.46

Diluted earnings (loss) per share
Income (loss) from continuing operations, net of tax $ (0.11 ) $ 0.11
$ 0.27
$ 0.61
$ 0.26
$ 0.48
$ 0.46
$ 0.42
Income from discontinued operations, net of tax 0.07
0.04
0.07
0.03
0.07
0.03
0.04
0.04
Net income (loss) attributable to Diebold, Incorporated (diluted) $ (0.04 ) $ 0.15
$ 0.34
$ 0.64
$ 0.33
$ 0.51
$ 0.50
$ 0.46

Basic weighted-average shares outstanding 64.7
64.3
64.9
64.6
65.0
64.6
65.0
64.6
Diluted weighted-average shares outstanding 64.7
64.8
65.6
65.2
65.6
65.3
65.7
65.4



	First Quarter						Second Quarter						Third Quarter						Fourth Quarter
	2018			2017			2018			2017			2018			2017			2018			2017
Net sales	$	1,064.2		$	1,102.8		$	1,105.6		$	1,133.9		$	1,119.0		$	1,122.7		$	1,289.8		$	1,249.9
Gross profit	238.4			239.8			217.7			237.1			227.0			236.8			207.8			286.1
Net loss	(65.6		)	(54.5		)	(128.3		)	(24.1		)	(244.6		)	(32.6		)	(127.5		)	(102.7		)
Net income (loss) attributable to noncontrolling interests	7.6			6.6			5.1			7.0			(6.1		)	6.6			(3.9		)	7.4
Net loss attributable to Diebold Nixdorf, Incorporated	$	(73.2	)	$	(61.1	)	$	(133.4	)	$	(31.1	)	$	(238.5	)	$	(39.2	)	$	(123.6	)	$	(110.1	)

Basic and diluted loss per share
Net loss attributable to Diebold Nixdorf, Incorporated	$	(0.97	)	$	(0.81	)	$	(1.76	)	$	(0.41	)	$	(3.13	)	$	(0.52	)	$	(1.62	)	$	(1.46	)

Basic and diluted weighted-average shares outstanding	75.8			75.3			76.0			75.5			76.1			75.5			76.1			75.5

~~Net loss~~During 2018, the Company recorded goodwill impairment charges (as adjusted) of $83.1 and $134.4 in the ~~first quarter~~second and third quarters, respectively, which contributed to the increased net loss compared to the same periods in 2017. In addition to the goodwill impairments, interest expense increased related to higher average outstanding balances throughout the year.

During 2018, the Company identified immaterial errors in prior periods for certain inventory balances, goodwill and various other items. Management determined that the correction of ~~2015 was negatively impacted by the Company's sale of its equity interest in its Venezuela joint venture~~these errors were not material to ~~its joint venture partner (refer~~each prior period. Refer to note ~~21), which resulted in an impairment charge~~1 for further details on these adjustments. As a result of ~~$10.3. The Company also recorded a foreign exchange loss of $7.5 related to~~applying the devaluation of the Venezuelan currency. In 2015, the repatriation of foreign earnings, the associated recognition of foreign tax credits and related benefits due to the passage of the PATH Act of 2015,correction retrospectively, previously reported balances within certain financial statement line items were ~~recorded which resulted in a tax benefit (refer to note 5).~~increased (decreased) as follows:



	First Quarter						Second Quarter						Third Quarter						Fourth Quarter
	2018			2017			2018			2017			2018			2017			2017
Results of operations
Cost of sales - Services	$	1.7		$	2.3		$	1.6		$	0.4		$	0.5		$	2.8		$	1.9
Cost of sales - Products	$	0.8		$	0.4		$	0.4		$	0.3		$	0.8		$	0.4		$	0.4
Impairment of assets	$	—		$	—		$	(6.9	)	$	—		$	25.1		$	—		$	—
Income tax benefit	$	(0.2	)	$	(0.4	)	$	(0.2	)	$	(0.2	)	$	(0.5	)	$	(0.4	)	$	(0.5	)
Net income (loss) attributable to Diebold Nixdorf, Incorporated	$	(2.3	)	$	(2.4	)	$	5.1		$	(0.4	)	$	(25.9	)	$	(3.8	)	$	(1.9	)
Basic and diluted earnings (loss) per common share	$	(0.03	)	$	(0.03	)	$	0.07		$	(0.01	)	$	(0.34	)	$	(0.05	)	$	(0.03	)

Consolidated balance sheet data
Trade receivables, less allowances for doubtful accounts	$	(2.3	)	$	(2.0	)	$	(2.3	)	$	(2.0	)	$	(2.3	)	$	(2.1	)	$	(2.2	)
Inventories	$	(24.9	)	$	(16.3	)	$	(26.6	)	$	(16.7	)	$	(18.5	)	$	(20.5	)	$	(22.5	)
Other current assets	$	(3.5	)	$	(2.7	)	$	(3.8	)	$	(3.1	)	$	(3.9	)	$	(3.4	)	$	(3.5	)
Goodwill	$	—		$	—		$	6.9		$	—		$	(18.2	)	$	—		$	—
Deferred revenue	$	(1.0	)	$	(1.0	)	$	(1.0	)	$	(1.0	)	$	(1.0	)	$	(1.0	)	$	(1.0	)
Other current liabilities	$	(2.8	)	$	(1.8	)	$	(2.9	)	$	(2.1	)	$	(3.0	)	$	(2.5	)	$	(2.7	)
Redeemable noncontrolling interests	$	1.1		$	—		$	13.6		$	—		$	17.1		$	—		$	—
Total equity	$	(28.0	)	$	(18.2	)	$	(35.5	)	$	(18.7	)	$	(56.0	)	$	(22.5	)	$	(24.5	)

~~The second quarter of 2014 included a $13.7 pre-tax gain from the sale of the Company's Eras subsidiary.~~

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

NOTE 22: SUPPLEMENTAL GUARANTOR INFORMATION

The Company issued the 2024 Senior Notes in an offering exempt from the registration requirements of the Securities Act of 1933 in connection with the Acquisition. The 2024 Senior Notes are and will be guaranteed by certain of the Company's existing and future subsidiaries. The following presents the condensed consolidating financial information separately for:


(i)	Diebold Nixdorf, Incorporated (the Parent Company), the issuer of the guaranteed obligations;


(ii)	Guarantor subsidiaries, on a combined basis, as specified in the Indenture, as supplemented;


(iii)	Non-guarantor subsidiaries, on a combined basis;


(iv)	Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between the Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries, and (c) record consolidating entries; and


(v)	Diebold Nixdorf, Incorporated and subsidiaries on a consolidated basis.

Each guarantor subsidiary is 100 percent owned by the Parent Company at the date of each balance sheet presented. The 2024 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and the guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Changes in intercompany receivables and payables related to operations, such as intercompany sales or service charges, are included in cash flows from operating activities. Intercompany transactions reported as investing or financing activities include the sale of capital stock of various subsidiaries, loans and other capital transactions between members of the consolidated group.

Certain non-guarantor subsidiaries of the Parent Company are limited in their ability to remit funds to it by means of dividends, advances or loans due to required foreign government and/or currency exchange board approvals or limitations in credit agreements or other debt instruments of those subsidiaries.

The Company has reclassified certain assets and liabilities from its non-guarantor subsidiaries to the Parent Company as a result of a common control transaction in connection with the Company's integration efforts of the Acquisition to optimize its operations. The Company also reclassified certain assets and liabilities for inclusion of an additional wholly-owned domestic subsidiary from its non-guarantor subsidiaries to the combined guarantor subsidiaries as a result of changes included in the Sixth Amendment.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Balance Sheets

As of December 31, 2018



	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Reclassifications/ Eliminations			Consolidated
ASSETS
Current assets
Cash, cash equivalents and restricted cash	$	17.3		$	2.7	$	438.4	$	—		$	458.4
Short-term investments	—			—		33.5		—			33.5
Trade receivables, net	105.7			0.1		631.4		—			737.2
Intercompany receivables	205.3			606.3		425.1		(1,236.7		)	—
Inventories	164.8			—		445.3		—			610.1
Prepaid expenses	16.4			0.1		40.9		—			57.4
Other current assets	20.4			12.5		299.6		(25.7		)	306.8
Total current assets	529.9			621.7		2,314.2		(1,262.4		)	2,203.4
Securities and other investments	22.4			—		—		—			22.4
Property, plant and equipment, net	76.9			0.8		226.4		—			304.1
Deferred income taxes	139.9			6.2		97.8		—			243.9
Goodwill	58.1			—		769.0		—			827.1
Intangible assets, net	30.8			—		593.8		—			624.6
Investment in subsidiaries	2,702.1			—		—		(2,702.1		)	—
Other assets	30.2			0.4		69.3		(13.5		)	86.4
Total assets	$	3,590.3		$	629.1	$	4,070.5	$	(3,978.0	)	$	4,311.9

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable	$	25.7		$	0.1	$	23.7	$	—		$	49.5
Accounts payable	88.1			—		421.4		—			509.5
Intercompany payable	1,030.8			60.8		145.1		(1,236.7		)	—
Deferred revenue	116.6			0.1		261.5		—			378.2
Payroll and other benefits liabilities	26.7			1.3		156.3		—			184.3
Other current liabilities	114.2			1.5		352.4		(21.2		)	446.9
Total current liabilities	1,402.1			63.8		1,360.4		(1,257.9		)	1,568.4
Long-term debt	2,172.5			—		17.5		—			2,190.0
Pensions, post-retirements and other benefits	183.7			—		90.1		—			273.8
Deferred income taxes	10.0			—		211.6		—			221.6
Other long-term liabilities	8.4			—		96.9		(18.0		)	87.3
Commitments and contingencies
Redeemable noncontrolling interests	—			—		130.4		—			130.4
Total Diebold Nixdorf, Incorporated shareholders' equity	(186.4		)	565.3		2,136.8		(2,702.1		)	(186.4		)
Noncontrolling interests	—			—		26.8		—			26.8
Total liabilities and equity	$	3,590.3		$	629.1	$	4,070.5	$	(3,978.0	)	$	4,311.9

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Balance Sheets

As of December 31, 2017



	Parent		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Reclassifications/ Eliminations			Consolidated
ASSETS
Current assets
Cash, cash equivalents and restricted cash	$	58.5	$	2.3	$	482.4	$	—		$	543.2
Short-term investments	—		—		81.4		—			81.4
Trade receivables, net	140.7		1.4		685.8		—			827.9
Intercompany receivables	106.7		638.4		384.0		(1,129.1		)	—
Inventories	159.4		—		555.1		—			714.5
Prepaid expenses	15.7		1.0		49.0		—			65.7
Other current assets	19.7		16.0		233.6		(21.8		)	247.5
Total current assets	500.7		659.1		2,471.3		(1,150.9		)	2,480.2
Securities and other investments	96.8		—		—		—			96.8
Property, plant and equipment, net	89.6		2.1		272.8		—			364.5
Deferred income taxes	150.8		8.0		135.0		—			293.8
Goodwill	55.5		—		1,061.6		—			1,117.1
Intangible assets, net	37.5		—		736.3		—			773.8
Investment in subsidiaries	2,810.9		—		—		(2,810.9		)	—
Other assets	47.2		1.1		74.0		(26.5		)	95.8
Total assets	$	3,789.0	$	670.3	$	4,751.0	$	(3,988.3	)	$	5,222.0

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable	$	49.9	$	0.3	$	16.5	$	—		$	66.7
Accounts payable	88.1		0.1		474.0		—			562.2
Intercompany payable	1,019.5		22.2		87.4		(1,129.1		)	—
Deferred revenue	115.8		0.6		320.1		—			436.5
Payroll and other benefits liabilities	26.1		2.2		170.6		—			198.9
Other current liabilities	112.4		2.8		438.0		(21.8		)	531.4
Total current liabilities	1,411.8		28.2		1,506.6		(1,150.9		)	1,795.7
Long-term debt	1,710.6		0.1		76.4		—			1,787.1
Pensions, post-retirements and other benefits	199.7		—		66.7		—			266.4
Deferred income taxes	10.0		—		277.1		—			287.1
Other long-term liabilities	11.4		—		126.4		(26.5		)	111.3
Commitments and contingencies
Redeemable noncontrolling interests	—		—		492.1		—			492.1
Total Diebold Nixdorf, Incorporated shareholders' equity	445.5		642.0		2,168.9		(2,810.9		)	445.5
Noncontrolling interests	—		—		36.8		—			36.8
Total liabilities and equity	$	3,789.0	$	670.3	$	4,751.0	$	(3,988.3	)	$	5,222.0

100

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2018



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated

Net sales	$	2,158.9		$	0.5		$	2,419.3		$	(0.1	)	$	4,578.6
Cost of sales	1,994.1			1.9			1,691.8			(0.1		)	3,687.7
Gross profit (loss)	164.8			(1.4		)	727.5			—			890.9
Selling and administrative expense	306.6			4.9			574.1			—			885.6
Research, development and engineering expense	2.8			44.6			110.0			—			157.4
Impairment of assets	—			—			217.5			—			217.5
(Gain) loss on sale of assets, net	(3.4		)	0.1			(3.4		)	—			(6.7		)
	306.0			49.6			898.2			—			1,253.8
Operating loss	(141.2		)	(51.0		)	(170.7		)	—			(362.9		)
Other income (expense)
Interest income	0.3			0.1			8.3			—			8.7
Interest expense	(140.7		)	—			(14.2		)	—			(154.9		)
Foreign exchange (loss) gain, net	(17.3		)	(0.2		)	15.0			—			(2.5		)
Miscellaneous, net	36.4			1.3			(41.7		)	—			(4.0		)
Loss from continuing operations before taxes	(262.5		)	(49.8		)	(203.3		)	—			(515.6		)
Income tax (benefit) expense	18.8			(10.2		)	28.6			—			37.2
Equity in (loss) earnings of unconsolidated subsidiaries, net	(287.4		)	—			(13.2		)	287.4			(13.2		)
Net (loss) income	(568.7		)	(39.6		)	(245.1		)	287.4			(566.0		)
Income attributable to noncontrolling interests, net of tax	—			—			2.7			—			2.7
Net (loss) income attributable to Diebold Nixdorf, Incorporated	$	(568.7	)	$	(39.6	)	$	(247.8	)	$	287.4		$	(568.7	)
Comprehensive (loss) income	$	(676.1	)	$	(39.6	)	$	(339.3	)	$	377.7		$	(677.3	)
Less: comprehensive loss attributable to noncontrolling interests	—			—			(1.2		)	—			(1.2		)
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated	$	(676.1	)	$	(39.6	)	$	(338.1	)	$	377.7		$	(676.1	)

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2017



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated

Net sales	$	1,126.4		$	7.4		$	3,480.6		$	(5.1	)	$	4,609.3
Cost of sales	902.0			12.3			2,700.3			(5.1		)	3,609.5
Gross profit (loss)	224.4			(4.9		)	780.3			—			999.8
Selling and administrative expense	283.8			10.5			639.4			—			933.7
Research, development and engineering expense	3.1			40.6			111.8			—			155.5
Impairment of assets	3.1			—			—			—			3.1
Loss on sale of assets, net	0.5			0.4			0.1			—			1.0
	290.5			51.5			751.3			—			1,093.3
Operating (loss) profit	(66.1		)	(56.4		)	29.0			—			(93.5		)
Other income (expense)
Interest income	2.3			0.2			17.8			—			20.3
Interest expense	(108.7		)	—			(8.6		)	—			(117.3		)
Foreign exchange loss, net	(0.5		)	(0.1		)	(3.3		)	—			(3.9		)
Miscellaneous, net	6.2			7.7			(11.1		)	(0.3		)	2.5
(Loss) income from continuing operations before taxes	(166.8		)	(48.6		)	23.8			(0.3		)	(191.9		)
Income tax (benefit) expense	36.1			(15.5		)	7.7			—			28.3
Equity in (loss) earnings of unconsolidated subsidiaries, net	(38.6		)	—			6.3			38.6			6.3
Net (loss) income	(241.5		)	(33.1		)	22.4			38.3			(213.9		)
Income attributable to noncontrolling interests, net of tax	—			—			27.6			—			27.6
Net (loss) income attributable to Diebold Nixdorf, Incorporated	$	(241.5	)	$	(33.1	)	$	(5.2	)	$	38.3		$	(241.5	)
Comprehensive (loss) income	$	(96.5	)	$	(33.1	)	$	193.7		$	(127.1	)	$	(63.0	)
Less: comprehensive income attributable to noncontrolling interests	—			—			33.5			—			33.5
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated	$	(96.5	)	$	(33.1	)	$	160.2		$	(127.1	)	$	(96.5	)

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2016



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated

Net sales	$	1,137.1		$	85.0		$	2,177.4		$	(83.2	)	$	3,316.3
Cost of sales	888.5			84.2			1,714.2			(82.3		)	2,604.6
Gross profit (loss)	248.6			0.8			463.2			(0.9		)	711.7
Selling and administrative expense	314.4			11.6			435.2			—			761.2
Research, development and engineering expense	7.9			45.7			56.6			—			110.2
Impairment of assets	—			5.1			4.7			—			9.8
Loss (Gain) on sale of assets, net	0.3			(0.1		)	0.1			—			0.3
	322.6			62.3			496.6			—			881.5
Operating loss	(74.0		)	(61.5		)	(33.4		)	(0.9		)	(169.8		)
Other income (expense)
Interest income	2.5			0.6			18.4			—			21.5
Interest expense	(95.1		)	(0.1		)	(6.2		)	—			(101.4		)
Foreign exchange (loss) gain, net	(3.5		)	(0.1		)	1.5			—			(2.1		)
Miscellaneous, net	(3.2		)	7.8			(0.5		)	(1.0		)	3.1
Loss from continuing operations before taxes	(173.3		)	(53.3		)	(20.2		)	(1.9		)	(248.7		)
Income (benefit) tax expense	(54.8		)	(28.6		)	14.4			—			(69.0		)
Equity in (loss) earnings of unconsolidated subsidiaries, net	(58.3		)	—			0.4			58.3			0.4
(Loss) income from continuing operations, net of tax	(176.8		)	(24.7		)	(34.2		)	56.4			(179.3		)
Income from discontinued operations, net of tax	135.2			—			8.5			—			143.7
Net (loss) income	(41.6		)	(24.7		)	(25.7		)	56.4			(35.6		)
Income attributable to noncontrolling interests, net of tax	—			—			6.0			—			6.0
Net (loss) income attributable to Diebold Nixdorf, Incorporated	$	(41.6	)	$	(24.7	)	$	(31.7	)	$	56.4		$	(41.6	)
Comprehensive (loss) income	$	(64.8	)	$	(24.7	)	$	(60.3	)	$	94.2		$	(55.6	)
Less: comprehensive income attributable to noncontrolling interests	—			—			9.2			—			9.2
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated	$	(64.8	)	$	(24.7	)	$	(69.5	)	$	94.2		$	(64.8	)

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2018



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated
Net cash (used) provided by operating activities	$	(67.8	)	$	(37.7	)	$	1.4		$	—		$	(104.1	)

Cash flow from investing activities
Capital expenditures	(6.5		)	(0.1		)	(51.9		)	—			(58.5		)
Payments for acquisitions, net of cash acquired	—			—			(5.9		)	—			(5.9		)
Proceeds from maturities of investments	71.2			—			246.6			—			317.8
Payments for purchases of investments	—			—			(200.2		)	—			(200.2		)
Proceeds from divestitures and the sale of assets	6.7			—			4.4			—			11.1
Decrease in certain other assets	(5.8		)	—			(24.1		)	—			(29.9		)
Capital contributions and loans paid	(503.2		)	—			—			503.2			—
Proceeds from intercompany loans	29.2			—			—			(29.2		)	—
Net cash (used) provided by investing activities	(408.4		)	(0.1		)	(31.1		)	474.0			34.4

Cash flow from financing activities
Dividends paid	(7.7		)	—			—			—			(7.7		)
Debt issuance costs	(39.4		)	—			—			—			(39.4		)
Revolving debt borrowings (repayments), net	110.0			—			(60.0		)	—			50.0
Other debt borrowings	660.0			—			65.9			—			725.9
Other debt repayments	(284.9		)	(0.3		)	(52.5		)	—			(337.7		)
Distribution to noncontrolling interest holders	—			—			(377.2		)	—			(377.2		)
Repurchase of common shares	(3.0		)	—			—			—			(3.0		)
Capital contributions received and loans incurred	—			59.0			444.2			(503.2		)	—
Payments on intercompany loans	—			(20.5		)	(8.7		)	29.2			—
Net cash provided (used) by financing activities	435.0			38.2			11.7			(474.0		)	10.9
Effect of exchange rate changes on cash	—			—			(18.7		)	—			(18.7		)
(Decrease) increase in cash, cash equivalents and restricted cash	(41.2		)	0.4			(36.7		)	—			(77.5		)
Less: Cash included in assets held for sale at end of year	—			—			7.3			—			7.3
Cash, cash equivalents and restricted cash at the beginning of the year	58.5			2.3			482.4			—			543.2
Cash, cash equivalents and restricted cash at the end of the year	$	17.3		$	2.7		$	438.4		$	—		$	458.4

104

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2017



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated
Net cash (used) provided by operating activities	$	(43.9	)	$	(41.6	)	$	122.6		$	—		$	37.1

Cash flow from investing activities
Capital expenditures	(13.0		)	(0.1		)	(56.3		)	—			(69.4		)
Payments for acquisitions, net of cash acquired	—			—			(5.6		)	—			(5.6		)
Proceeds from maturities of investments	—			—			296.2			—			296.2
Payments for purchases of investments	(14.0		)	—			(315.8		)	—			(329.8		)
Proceeds from divestitures and the sale of assets	4.6			—			16.3			—			20.9
(Decrease) increase in certain other assets	(43.0		)	11.8			(1.9		)	—			(33.1		)
Capital contributions and loans paid	(114.5		)	—			—			114.5			—
Proceeds from intercompany loans	210.7			—			—			(210.7		)	—
Net cash provided (used) by investing activities	30.8			11.7			(67.1		)	(96.2		)	(120.8		)

Cash flow from financing activities
Dividends paid	(30.6		)	—			—			—			(30.6		)
Debt issuance costs	(1.1		)	—			—			—			(1.1		)
Revolving debt borrowings, net	—			—			75.0			—			75.0
Other debt borrowings	323.3			—			50.8			—			374.1
Other debt repayments	(354.2		)	(1.2		)	(103.4		)	—			(458.8		)
Distribution to noncontrolling interest holders	—			—			(17.6		)	—			(17.6		)
Issuance of common shares	0.3			—			—			—			0.3
Repurchase of common shares	(5.0		)	—			—			—			(5.0		)
Capital contributions received and loans incurred	—			67.1			47.4			(114.5		)	—
Payments on intercompany loans	—			(36.0		)	(174.7		)	210.7			—
Net cash (used) provided by financing activities	(67.3		)	29.9			(122.5		)	96.2			(63.7		)
Effect of exchange rate changes on cash	—			—			37.9			—			37.9
Decrease in cash, cash equivalents and restricted cash	(80.4		)	—			(29.1		)	—			(109.5		)
Cash, cash equivalents and restricted cash at the beginning of the year	138.9			2.3			511.5			—			652.7
Cash, cash equivalents and restricted cash at the end of the year	$	58.5		$	2.3		$	482.4		$	—		$	543.2

105

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-K as of December 31, 2018

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in millions, except per share amounts)

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2016



	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications/ Eliminations			Consolidated
Net cash (used) provided by operating activities	$	(146.4	)	$	(43.2	)	$	232.1		$	(13.8	)	$	28.7

Cash flow from investing activities
Capital expenditures	(9.2		)	(1.0		)	(29.3		)	—			(39.5		)
Payments for acquisitions, net of cash acquired	(995.2		)	—			110.6			—			(884.6		)
Proceeds from maturities of investments	(1.9		)	—			226.9			—			225.0
Payments for purchases of investments	—			—			(243.5		)	—			(243.5		)
Proceeds from divestitures and the sale of assets	—			—			31.3			—			31.3
Increase (decrease) in certain other assets	0.5			(6.8		)	(21.9		)	—			(28.2		)
Proceeds from sale of foreign currency option and forward contracts, net	16.2			—			—			—			16.2
Capital contributions and loans paid	(270.2		)	—			(1,119.3		)	1,389.5			—
Proceeds from intercompany loans	106.4			—			—			(106.4		)	—
Net cash (used) provided by investing activities - continuing operations	(1,153.4		)	(7.8		)	(1,045.2		)	1,283.1			(923.3		)
Net cash provided by investing activities - discontinued operations	361.9			—			—			—			361.9
Net cash (used) provided by investing activities	(791.5		)	(7.8		)	(1,045.2		)	1,283.1			(561.4		)

Cash flow from financing activities
Dividends paid	(64.6		)	—			(13.8		)	13.8			(64.6		)
Debt issuance costs	(39.2		)	—			—			—			(39.2		)
Revolving debt repayments, net	(178.0		)	—			—			—			(178.0		)
Other debt borrowings	1,781.3			—			56.4			—			1,837.7
Other debt repayments	(439.6		)	(1.2		)	(221.7		)	—			(662.5		)
Distribution to noncontrolling interest holders	—			—			(10.2		)	—			(10.2		)
Issuance of common shares	0.3			—			—			—			0.3
Repurchase of common shares	(2.2		)	—			—			—			(2.2		)
Capital contributions received and loans incurred	—			133.3			1,256.2			(1,389.5		)	—
Payments on intercompany loans	—			(86.7		)	(19.7		)	106.4			—
Net cash provided by (used in) financing activities	1,058.0			45.4			1,047.2			(1,269.3		)	881.3
Effect of exchange rate changes on cash	—			—			(8.0		)	—			(8.0		)
Increase (decrease) in cash, cash equivalents and restricted cash	120.1			(5.6		)	226.1			—			340.6
Add: Cash overdraft included in assets held for sale at beginning of year	(1.5		)	—			—			—			(1.5		)
Cash, cash equivalents and restricted cash at the beginning of the year	20.3			7.9			285.4			—			313.6
Cash, cash equivalents and restricted cash at the end of the year	$	138.9		$	2.3		$	511.5		$	—		$	652.7

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A: CONTROLS AND PROCEDURES

(in millions)

This annual report on Form 10-K includes the certifications of our chief executive officer (CEO) and chief financial officer (CFO) required by Rule 13a-14 of the Exchange Act. See Exhibits 31.1 and 31.2. This Item 9A includes information concerning theThe Company maintains disclosure controls and ~~control evaluations referred~~procedures that are designed to ensure that information required to be disclosed in ~~those certifications.~~

~~(a) DISCLOSURE CONTROLS AND PROCEDURES~~

Asthe Company’s reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the ~~end of~~time periods specified in the ~~period covered by this annual report on Form 10-K,~~Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, ~~carried~~including its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carries out ~~an evaluation,~~a variety of on-going procedures, under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, ofto evaluate the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). During 2015, the Company acquired Phoenix. The scope of the Company's assessment of the effectiveness of disclosure controls and procedures did not include this 2015 acquisition in accordance with the SEC's guidance that a recently acquired business may be omitted from the Company's scope in the year of acquisition. Phoenix accounted for 4.2% of total assets as of December 31, 2015 and 0.4% and (5.7)% of total revenue and net income, respectively, of the related consolidated financial statement amounts for the year ended December 31, 2015. procedures.

Based ~~upon~~on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2019 due to material weaknesses in the ~~end~~Company's controls over financial reporting, described below.

Nevertheless, based on the performance of additional procedures by management designed to ensure reliability of financial reporting the Company's management has concluded that, notwithstanding the material weaknesses described below, the consolidated financial statements fairly present in all material respects, the Company's financial position, results of operations and cash flows as of the ~~period covered by this annual report on Form 10-K.~~dates, and for the periods presented, inconformity with U.S. GAAP.

~~(b)~~


(a)	MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management ~~under the supervision of the CEO and CFO,~~ is responsible for establishing and maintaining adequate internal control over financial reporting, ~~for the Company.~~as defined in Exchange Act Rule 13a-15(f). The Company’s internal control ~~system was~~over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Internal control over financial reporting includes those policies and ~~fair presentation~~procedures that (1) pertain to the maintenance of ~~published~~records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

~~Management assessed~~Under the supervision of the CEO and CFO and Board of Directors, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in “Internal Control-Integrated Framework (2013 framework)” issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this assessment, management identified the following control deficiencies:

The Company’s risk assessment process was not effective in considering changes to the business operations, personnel and other factors affecting certain financial reporting processes and design of related controls on a timely basis. Accordingly,

The Company had ineffective ITGCs related to IT systems used for financial reporting by certain entities throughout the organization. The Company did not establish effective IT and financial user access controls commensurate with certain job responsibilities. Consequently, automated and manual process level controls over financial reporting which were dependent upon these ITGCs were also ineffective.

The Company had ineffective implementation and operation of controls over inventory valuation related to spare parts and finished goods from canceled orders as the Company did not effectively communicate information to certain locations to allow for the effective operations or implementation of these controls.

The Company had ineffective controls over non-routine transactions as certain controls were not designed at the appropriate level of precision to ensure calculations supporting non-routine transaction were calculated correctly.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

These control deficiencies resulted in misstatements to goodwill impairment, inventory and redeemable non-controlling interests all of which were corrected prior to issuance of the Company’s consolidated financial statements as of and for the year ended December 31, 2018 included in this annual report on Form 10-K. As these deficiencies created a reasonable possibility that a material misstatement would not be prevented or detected in a timely basis, management concluded that the control deficiencies represent material weaknesses and accordingly our internal control over financial reporting was not effective as of December 31, 2018.

KPMG LLP, the Company’s independent registered public accounting firm, has issued an auditor’s report on management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2015. In making this assessment, it used~~2018. This report, which expressed an adverse opinion on the ~~criteria set forth by the Committee~~effectiveness of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment under COSO’s “Internal Control-Integrated Framework (2013 framework),” management believes that, as of December 31, 2015, the Company’s internal control over financial reporting, is effective. Management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2015 excluded from the scope of its assessment of internal control over financial reporting the operations and related assets of the Phoenix, which was acquired during 2015. SEC guidelines permit companies to omit an acquired business's internal controls over financial reporting from its management's assessment during the first year of the acquisition.

KPMG LLP, the Company's independent registered public accounting firm, has issued an auditor's report on management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2015. This report is included in Item 8 of this annual report on Form 10-K.


(b)	CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

~~(c) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING~~

~~We continued a phased implementation~~Other than the material weaknesses described above that occurred in earlier periods of enterprise resource planning systems in our North America and Latin America operations, portions of which were completed during the third and fourth quarters of 2015, with the balance expected to be completed during 2016. We believe we are maintaining and monitoring appropriate internal controls during the implementation period. During the quarter ended December 31, 2015,fiscal 2018, there have been no other changes in ~~our~~the Company's internal control over financial reporting during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.


(c)	REMEDIATION

The Company is still considering the full extent of the procedures to implement in order to remediate the three material weaknesses described above, however, the current remediation plan includes:

Improving our continuous risk assessment process to be responsive to changes in the business operations, personnel and IT developments affecting our financial reporting and related controls;

Improving our timely written communication of changes in financial reporting and related controls affecting both business and financial users;

Revoking the access to IT systems of those individuals that were identified as inappropriate;

Implementing more frequent and improved periodic access reviews that include: all sensitive access and the identification of additional business process owners to be part of the review process and providing the owners with guidance on the key data elements of the review to enhance the precision of the review process;

Implementing consistent inventory valuation controls at all locations and communicate the requirements for effectively operating such controls to all businesses; and

Implementing controls over calculations associated with non-routine transactions at a more precise level of operation.

ITEM 9B: OTHER INFORMATION

None.

~~Table of Contents~~

PART III

ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information with respect to directors of the Company, including the audit committee and the designated audit committee financial experts, is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting of Shareholders (the ~~2016~~2019 Annual Meeting) and is incorporated herein by reference. Information with respect to any material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference. The following table summarizes information regarding executive officers of the Company:



Name, Age, Title and Year Elected to Present Office		Other Positions Held Last Five Years
~~Andreas W. Mattes~~ ~~— 54~~Gerrard B. Schmid - 50 President and Chief Executive Officer Year elected: ~~2013~~2018		~~2011-Jun 2013:~~2012-February 2018 ~~Senior Vice President, Global Strategic Partnerships, Violin Memory (computer storage systems);~~ ~~2008 - 2011:~~ ~~Senior Vice President~~: Chief Executive Officer and ~~General Manager~~Director of ~~Enterprise Services for the Americas, Hewlett-Packard Co. (computer technologies)~~D+H Corporation (global payments and technology provider)
~~Christopher A. Chapman — 41~~Jeffrey L. Rutherford - 58 Senior Vice President, Chief Financial Officer Year elected: 2019		October 2018-January 2019: Interim Chief Financial Officer for Diebold Nixdorf, Incorporated; 2017-October 2018: Chairman, Interim President and Interim Chief Executive Officer for Edgewater Technology, Inc. (technology consulting firm); 2014-2016: Vice President and Chief Financial Officer ~~Year elected: 2014~~	~~2011 - Jun 2014:~~ ~~Vice President, Global Finance,~~ ~~2004- 2011:~~ ~~Vice President, Controller, International Operations~~ for Ferro Corporation (international coatings manufacturing)
~~Stefan E. Merz — 51~~ ~~Senior Vice President, Strategic Projects~~ ~~Year elected: 2013~~	~~2011-Aug 2013:~~ ~~Vice President, Sales, Strategy and Operations, Enterprise Group, Hewlett-Packard Co. (computer technologies);~~ ~~2009 - 2011:~~ ~~Vice President Strategy and Operations, Enterprise Operations, Enterprise services for Americas, Hewlett-Packard Co.~~
Jonathan B. Leiken — 44 47 Senior Vice President, Chief Legal Officer and ~~Secretary~~ General Counsel Year elected: 2014		~~2008 - May 2014:~~2008-May 2014: Partner, Jones Day (global legal services)
~~John D. Kristoff~~Alan Kerr — 4862 Senior Vice President, ~~Chief Communications Officer~~Software Year elected: ~~2006~~2016		2014-August 2016: Executive Vice President, Software Solutions for Diebold, Incorporated
~~Sheila M. Rutt~~Olaf Heyden — 4755 Senior Vice President, ~~Chief Human Resources Officer~~Services Year elected: ~~2005~~2016		2013-August 2016: Executive Vice President, Software and Services, and a member of the executive board for Wincor Nixdorf AG
Ulrich Näher — 53 Senior Vice President, Systems Year elected: 2016		March 2016-August 2016: Executive Vice President of Systems Business and member of the board of directors for Wincor Nixdorf AG; 2015-March 2016: Senior Vice President of Research and Development at Wincor Nixdorf AG; 2006-2015: Senior Partner at McKinsey and Company (management and consulting)

There isare no family ~~relationship,~~relationships, either by blood, marriage or adoption, between any of the executive officers and directors of the Company.

CODE OF BUSINESS ETHICS

All of the directors, executive officers and employees of the Company are required to comply with certain policies and protocols concerning business ethics and conduct, which we refer to as our Code of Business Ethics (COBE). The COBE applies not only to the Company, but also to all of those domestic and international companies in which the Company owns or controls a majority interest. The COBE describes certain responsibilities that the directors, executive officers and employees have to the Company, to each other and to the Company’s global partners and communities including, but not limited to, compliance with laws, conflicts of interest, intellectual property and the protection of confidential information. The COBE is available on the Company’s web site at ~~www.diebold.com~~www.dieboldnixdorf.com or by written request to the Corporate Secretary.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Information with respect to Section 16(a) beneficial ownership reporting compliance is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference.

ITEM 11: EXECUTIVE COMPENSATION

Information with respect to executive officers' and directors' compensation is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference. Information with respect to compensation committee interlocks and insider participation and the compensation committee report is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference.

~~Table of Contents~~

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information with respect to security ownership of certain beneficial owners and management is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference.

Equity Compensation Plan Information

Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders
Stock options 1,677,548
$ 34.21
N/A
Restricted stock units 867,828
N/A
N/A
Performance shares 833,427
N/A
N/A
Non-employee director deferred shares 134,200
N/A
N/A
Deferred compensation 17,681
N/A
N/A
Total equity compensation plans approved by security holders 3,530,684
$ 34.21
5,000,000

Equity compensation plans not approved by security holders
Warrants 34,789
$ 46.00
N/A
Total equity compensation plans not approved by security holders 34,789
$ 46.00
N/A

Total 3,565,473
$ 37.30
5,000,000

In column (b), the weighted-average exercise price is only applicable to stock options. In column (c), the number of securities remaining available for future issuance for stock options, restricted stock units, performance shares and non-employee director deferred shares is approved in total and not individually.



Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders
Stock options	2,506,902	$	27.05	N/A
Restricted stock units	1,586,482	N/A		N/A
Performance shares	2,958,118	N/A		N/A
Non-employee director deferred shares	91,900	N/A		N/A
Deferred compensation	815	N/A		N/A
Total equity compensation plans approved by security holders	7,144,217	$	27.05	3,600,000

In column (b), the weighted-average exercise price is only applicable to stock options. In column (c), the number of securities remaining available for future issuance for stock options, restricted stock units, performance shares and non-employee director deferred shares is approved in total and not individually.

~~Table of Contents~~

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information with respect to certain relationships and related transactions and director independence is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information with respect to principal accountant fees and services is included in the Company’s proxy statement for the ~~2016~~2019 Annual Meeting and is incorporated herein by reference.

~~100~~

~~Table of Contents~~

PART IV

ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Documents filed as a part of this annual report on Form 10-K.

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, ~~2015~~2018 and ~~2014~~2017

Consolidated Statements of Operations for the Years Ended December 31, ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016

Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the Years Ended December 31, ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016

Consolidated Statements of Equity for the Years Ended December 31, ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016

Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016

Notes to Consolidated Financial Statements

(a) 2. Financial statement ~~schedule~~

~~The following schedule is included in this Part IV, and is found in this annual report on Form 10-K:~~

~~Schedule II - Valuation and Qualifying Accounts~~schedules

All ~~other~~ schedules are omitted, as the required information is inapplicable or the information is presented in the ~~Consolidated Financial Statements~~consolidated financial statements or related notes.

(a) 3. Exhibits



2.1	Business Combination Agreement, dated November 23, 2015, by and among Diebold, Incorporated and Wincor Nixdorf Aktiengesellschaft — incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on November 23, 2015 (Commission File No. 1-4879)
2.2	Asset Purchase Agreement, dated as of October 25, 2015, by and among Diebold, Incorporated, The Diebold Company of Canada, LTD., Securitas Electronic Security, Inc. and 9481176 Canada Inc. — incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on February 4, 2016 (Commission File No. 1-4879)
3.1(i)	Amended and Restated Articles of Incorporation of Diebold, Incorporated — incorporated by reference to Exhibit 3.1(i) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994 (Commission File No. 1-4879)
3.1(ii)	~~Amended and Restated Code of Regulations — incorporated by reference to Exhibit 3.1(ii) to Registrant’s Form 8-K filed on November 23, 2015 (Commission File No. 1-4879)~~
~~3.2~~	Certificate of Amendment by Shareholders to Amended Articles of Incorporation of Diebold, Incorporated — incorporated by reference to Exhibit 3.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 (Commission File No. 1-4879)
~~3.3~~ 3.1 (iii)	Certificate of Amendment to Amended Articles of Incorporation of Diebold, Incorporated — incorporated by reference to Exhibit 3.3 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998 (Commission File No. 1-4879)
3.1 (iv)	Certificate of Amendment to Amended Articles of Incorporation of Diebold, Incorporated — incorporated by reference to Exhibit 3.1(i) to Registrant’s Current Report on Form 8-K filed on December 12, 2016 (Commission File No. 1-4879)
3.1 (v)	Certificate of Amendment to Amended Articles of Incorporation of Diebold Nixdorf, Incorporated — incorporated by reference to Exhibit 3.5 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 1-4879)
3.2	Amended and Restated Code of Regulations — incorporated by reference to Exhibit 3.1(i) to Registrant’s Current Report on Form 8-K filed on February 17, 2017 (Commission File No. 1-4879)
4.1 (i)	Indenture, dated as of April 19, 2016, among Diebold, Incorporated, as issuer, the subsidiaries of Diebold, Incorporated named therein as guarantors and U.S. Bank National Association, as trustee — incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed on April 19, 2016 (Commission File No. 1-4879)
4.1 (ii)	First Supplemental Indenture, dated as of November 29, 2018, among Diebold Nixdorf, Incorporated, the Guaranteeing Subsidiaries named therein and U.S. Bank National Association, as trustee
4.1 (iii)	Second Supplemental Indenture, dated as of February 29, 2019, among Diebold Nixdorf, Incorporated, the Guaranteeing Subsidiary named therein and U.S. Bank National Association, as trustee
*10.1(i)	Form of Amended and Restated Employment Agreement — incorporated by reference to Exhibit 10.1 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.1(ii)	Form of Amended and Restated Employment Agreement — incorporated by reference to Exhibit 10.1(ii) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (Commission File No. 1-4879)
*10.1(iii)	Form of Employee Agreement -— incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (Commission File No. 1-4879)
*10.2(i)	Supplemental Employee Retirement Plan I as amended and restated January 1, 2008 — incorporated by reference to Exhibit 10.5(i) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)



*10.2(ii)	Supplemental Employee Retirement Plan II as amended and restated July 1, 2002 — incorporated by reference to Exhibit 10.5(ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (Commission File No. 1-4879)
*10.2(iii)	Pension Restoration Supplemental Executive Retirement Plan — incorporated by reference to Exhibit 10.5(iii) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.2(iv)	Pension Supplemental Executive Retirement Plan — incorporated by reference to Exhibit 10.5(iv) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.2(v)	401(k) Restoration Supplemental Executive Retirement Plan — incorporated by reference to Exhibit 10.5(v) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.2(vi)	401(k) Supplemental Executive Retirement Plan — incorporated by reference to Exhibit 10.5(vi) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)

~~101~~

~~Table of Contents~~


*10.2(vii)	Amendment to 401(k) Restoration Supplemental Executive Retirement Plan
*10.3(i)	1985 Deferred Compensation Plan for Directors of Diebold, Incorporated — incorporated by reference to Exhibit 10.7 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1992 (Commission File No. 1-4879)
*10.3(ii)	Amendment No. 1 to the Amended and Restated 1985 Deferred Compensation Plan for Directors of Diebold, Incorporated — incorporated by reference to Exhibit 10.7 (ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (Commission File No. 1-4879)
*10.3(iii)	Amendment No. 2 to the Amended and Restated 1985 Deferred Compensation Plan for Directors of Diebold, Incorporated — incorporated by reference to Exhibit 10.7 (ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (Commission File No. 1-4879)
*10.3(iv)	Deferred Compensation Plan No. 2 for Directors of Diebold, Incorporated — incorporated by reference to Exhibit 10.7(iv) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.3(v)	First Amendment to Deferred Compensation Plan No. 2 for Directors of Diebold, Incorporated — incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (Commission File No. 1-4879)
*10.4(i)	1991 Equity and Performance Incentive Plan as Amended and Restated as of February 7, 2001 — incorporated by reference to Exhibit 4(a) to Registrant's Registration Statement on Form S-8 filed on May 10, 2001 (Registration ~~Statement~~ No. 333-60578)
*10.4(ii)	Amendment No. 1 to the 1991 Equity and Performance Incentive Plan as Amended and Restated as of February 7, 2001 — incorporated by reference to Exhibit 10.8 (ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 (Commission File No. 1-4879)
*10.4(iii)	Amendment No. 2 to the 1991 Equity and Performance Incentive Plan as Amended and Restated as of February 7, 2001 — incorporated by reference to Exhibit 10.8 (iii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 (Commission File No. 1-4879)
*10.4(iv)	Amendment No. 3 to the 1991 Equity and Performance Incentive Plan as Amended and Restated as of February 7, 2001 — incorporated by reference to Exhibit 10.8 (iv) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (Commission File No. 1-4879)
*10.4(v)	Amended and Restated 1991 Equity and Performance Incentive Plan as Amended and Restated as of April 13, 2009 — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 29, 2009 (Commission File No. 1-4879)
*10.4(vi)	Amended and Restated 1991 Equity and Performance Incentive Plan as Amended and Restated as of February 12, 2014 — incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on April 30, 2014 (Commission File No. 1-4879)
*10.5	Long-Term Executive Incentive Plan — incorporated by reference to Exhibit 10.9 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1993 (Commission File No. 1-4879)
*10.6(i)	Form of Deferred Compensation Agreement and Amendment No. 1 to Deferred Compensation Agreement — incorporated by reference to Exhibit 10.13 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1996 (Commission File No. 1-4879)
*10.6(ii)	Deferred Incentive Compensation Plan No. 2 — incorporated by reference to Exhibit 10.10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-4879)
*10.6(iii)	Section 162(m) Deferred Compensation Agreement (as amended and restated January 29, 1998) — incorporated by reference to Exhibit 10.13 (ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (Commission File No. 1-4879)
*10.7	Annual Incentive Plan — incorporated by reference to Exhibit 10.11 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 1-4879)
*10.8	Deferral of Stock Option Gains Plan — incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998 (Commission File No. 1-4879)
~~10.9(i)~~	Credit Agreement, dated as of June 30, 2011, by and among Diebold, Incorporated, the Subsidiary Borrowers (as defined therein) party thereto, JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lender party thereto — incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on July 6, 2011 (Commission File No. 1-4879)
~~10.9(ii)~~	First Amendment to Credit Agreement and Guaranty, dated as of August 26, 2014, by and among Diebold, Incorporated, the Subsidiary Borrowers (as defined therein) party thereto, JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lender party thereto — incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on September 2, 2014 (Commission File No. 1-4879)
~~10.9(iii)~~ 10.9(i)	Second Amendment to Credit Agreement, dated as of June 19, 2015, by and among Diebold, Incorporated, the Subsidiary Borrowers (as defined therein) party thereto, JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lenders party thereto — incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on June 24, 2015. (Commission File No. 1-4879)
~~10.10~~	Credit Agreement, dated as of November 23, 2015, among Diebold, Incorporated, the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent — incorporated by reference to Exhibit 10.1 to Registrant’s Amendment No. 1 to Registration Statement on Form S-4/A filed on January 8, 2016 (Registration ~~Statement~~ No. 333-208186)



~~10.11~~ 10.9(ii)	Replacement Facilities Effective Date Amendment, dated as of December 23, 2015, ~~by and~~ among Diebold, Incorporated, and the subsidiary ~~borrowers~~borrower party thereto, ~~as borrowers,~~the guarantors party thereto, JPMorgan Chase Bank, N.A, as administrative agent, and the lenders party thereto — incorporated by reference to Exhibit 10.2 to Registrant’s Amendment No. 1 to Registration Statement on Form S-4/A filed on January 8, 2016 (Registration ~~Statement~~ No. 333-208186)

~~102~~

~~Table of Contents~~


10.9(iii)
~~10.12~~	~~Bridge~~ Second Amendment to Credit Agreement, dated as of ~~November 23, 2015,~~May 6, 2016, among Diebold, Incorporated, the subsidiary borrowers party thereto, the guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders ~~from time~~party thereto — incorporated by reference to ~~time~~Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on May 12, 2016 (Commission File No. 1-4879)
10.9(iv)	Third Amendment to Credit Agreement, dated as of August 16, 2016, between Diebold, Incorporated and JPMorgan Chase Bank, N.A., as administrative agent — incorporated by reference to Exhibit 10.34 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 1-4879)
10.9(v)	Fourth Amendment to Credit Agreement, dated as of February 14, 2017, between Diebold, Incorporated and JP Morgan Chase Bank, N.A. as administrative agent
10.9(vi)	Incremental Amendment to Credit Agreement, dated as of May 9, 2017, among Diebold Nixdorf, Incorporated, the subsidiary borrowers party thereto, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent — incorporated by reference to Exhibit ~~10.3~~10.12 to Registrant’s Quarterly Report on Form ~~S-4/A~~10-Q for the quarter ended June 30, 2017 (Commission File No. 1-4879)
10.9(vii)	Fifth Amendment, dated as of April 17, 2018, among Diebold Nixdorf, Incorporated, the subsidiary borrower party thereto, the guarantor party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on ~~January 8, 2016 (Registration Statement~~April 20, 2018 (Commission File No. ~~333-208186)~~1-4879)
~~10.13(i)~~ 10.9(viii)	Sixth Amendment and Incremental Amendment, dated as of August 31, 2018, among Diebold Nixdorf, Incorporated, the subsidiary borrowers party thereto, the guarantor party thereto, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent — incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed on September 4, 2018 (Commission File No. 1-4879)
10.10(i)	Transfer and Administration Agreement, dated as of March 30, 2001, by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association and the financial institutions from time to time parties thereto — incorporated by reference to Exhibit 10.20(i) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 (Commission File No. 1-4879)
~~10.13(ii)~~ 10.10(ii)	Amendment No. 1 to the Transfer and Administration Agreement, dated as of May 2001, by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association and the financial institutions from time to time parties thereto — incorporated by reference to Exhibit ~~10.20 (ii)~~10.20(ii) to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March, 31, 2001 (Commission File No. 1-4879)
*~~10.14~~10.11	Form of Non-Qualified Stock Option Agreement — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on September 21, 2009 (Commission File No. 1-4879)
*~~10.15~~10.12	Form of Restricted Share Agreement — incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on September 21, 2009 (Commission File No. 1-4879)
*~~10.16~~10.13	Form of RSU Agreement — incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed on September 21, 2009 (Commission File No. 1-4879)
*~~10.17~~10.14	Form of Performance Share Agreement — incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed on September 21, 2009 (Commission File No. 1-4879)
*~~10.18(i)~~10.15(i)	Diebold, Incorporated Annual Cash Bonus Plan — incorporated by reference to Exhibit A to Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 16, 2010 (Commission File No. 1-4879)
*~~10.18(ii)~~10.15(ii)	Diebold, Incorporated Annual Cash Bonus Plan — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 28, 2015 (Commission File No. 1-4879)
~~10.19~~ *10.16(i)	~~Form of Note Purchase Agreement — incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on March 8, 2006 (Commission File No. 1-4879)~~
*10.20(i)	Form of Deferred Shares Agreement — incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed on September 21, 2009 (Commission File No. 1-4879)
*~~10.20(ii)~~10.16(ii)	Form of Deferred Shares Agreement (2014) — incorporated by reference to Exhibit 10.17(ii) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 (Commission File No. 1-4879)
*~~10.21(i)~~10.17(i)	Diebold, Incorporated Senior Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives) — incorporated by reference to Exhibit 10.31 to Registrant’s Quarterly Report on Form 10-Q filed on April 30, 2012 (Commission File No. 1-4879)
*~~10.21(ii)~~10.17(ii)	~~Amended and Restated~~ Senior Leadership Severance Plan, Amended and Restated Effective November 7, 2018 — incorporated by reference to Exhibit ~~10.3~~10.4 to ~~Registrant’s~~Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, ~~2015~~2018 (Commission File No. ~~1-4879)~~1 - 4879)
*~~10.22(i)~~10.18	Executive Employment Agreement, dated as of June 6, 2013, by and between Diebold, Incorporated and Andreas W. Mattes — incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on June 6, 2013 (Commission File No. 1-4879)
*10.22(ii)	Amended and Restated Executive Employment Agreement dated as of July 30, 2015 by and between Diebold, Incorporated and Andreas W. Mattes — incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q for the quarter ended June 30, 2015 (Commission File No. 1-4879)
*10.23	Separation Agreement and Release by and between Diebold, Incorporated and George S. Mayes, Jr., entered into September 1, 2015 — incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on September 8, 2015 (Commission File No. 1-4879)
*10.24	CEO Common Shares Award Agreement — incorporated by reference to Exhibit 4.5 to Registrant’s Registration Statement on Form S-8 filed on August 15, 2013 (Registration ~~Statement~~ No. 333-190626)
*~~10.25~~10.19	2014 Non-Qualified Stock Purchase Plan — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 30, 2014 (Commission File No. 1-4879)
*~~10.26~~10.20	Form of Long-Term Incentive Deferred Share Agreement (2014) — incorporated by reference to Exhibit 10.22 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 (Commission File No. 1-4879)


*10.27
*10.21	Form of Performance Share Agreement — incorporated by reference to Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 1-4879)
*~~10.28~~10.22	Form of Nonqualified Stock Option Agreement — incorporated by reference to Exhibit 10.28 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 1-4879)
*~~10.29~~10.23	Form of Restricted Stock Unit Agreement - Cliff Vesting — incorporated by reference to Exhibit 10.29 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 1-4879)
*~~10.30~~10.24	Form of Restricted Stock Unit Agreement - Ratable Vesting — incorporated by reference to Exhibit 10.30 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 1-4879)
*~~10.31~~10.25	Form of Restricted Share Agreement — incorporated by reference to Exhibit 10.31 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 1-4879)
~~21.1~~ *10.26	Domination and Profit and Loss Transfer Agreement, dated September 26, 2016, by and among Diebold Holding Germany Inc. & Co. KGaA and Wincor Nixdorf AG (English translation) — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on September 29, 2016 (Commission File No. 1-4879)
*10.27	Form of Synergy Grant Performance Share Agreement — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 13, 2017 (Commission File No. 1-4879)
*10.28	Jürgen Wunram service agreement — incorporated by reference to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 1-4879)
*10.29	Offer Letter - Jürgen Wunram — incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.30	Jürgen Wunram Amended Service Agreement — incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.31	Jürgen Wunram Separation Agreement — incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (Commission File No. 1-4879)
*10.32	Offer Letter - Olaf Heyden — incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.33	Olaf Heyden Amended Service Agreement — incorporated by reference to Exhibit 10.5 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.34	Offer Letter - Ulrich Näher — incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.35	Ulrich Näher Amended Service Agreement — incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
*10.36	Dr. Ulrich Näher Amendment to management Board Member's Service Agreement
*10.37	Eckard Heidloff service agreement — incorporated by reference to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 1-4879)
*10.38	Eckard Heidloff severance agreement — incorporated by reference to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 1-4879)
*10.39	Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan, as amended April 25 2018 — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 27, 2018 (Commission File No. 1-4879)
*10.40	Form of Non-Qualified Stock Option Agreement (2017 Plan) — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.41	Form of Restricted Share Agreement (2017 Plan) — incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.42	Form of Restricted Stock Unit Agreement - Cliff Vest (2017 Plan) — incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.43	Form of Restricted Stock Unit Agreement - Ratable Vest (2017 Plan) — incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.44	Form of Restricted Stock Unit Agreement - Non-employee Directors (2017 Plan) — incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.45	Form of Stock Appreciation Rights Agreement (2017 Plan) — incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.46	Form of Performance Shares Agreement (2017 Plan) — incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.47	Form of Performance Units Agreement (2017 Plan) — incorporated by reference to Exhibit 10.8 to Registrant’s Current Report on Form 8-K filed on April 28, 2017 (Commission File No. 1-4879)
*10.48	Form of Performance Cash Award Agreement (2017 Plan) — incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed on February 1, 2019 (Commission File No. 1-4879)
*10.49	Christopher Chapman Service Agreement — incorporated by reference to Exhibit 10.7 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)



*10.50	Dr. Jürgen Wunram Amendment to Management Board Member's Service Agreement — incorporated by reference to Exhibit 10.48 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File No. 1-4879)
*10.51	Mr. Olaf Heyden Extension of Management Board Member's Service Agreement — incorporated by reference to Exhibit 10.49 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File No. 1-4879)
*10.52	Dr. Ulrich Näher Amendment to Management Board Member's Service Agreement — incorporated by reference to Exhibit 10.50 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File No. 1-4879)
*10.53	C. Chapman February 16, 2018 Letter Agreement — incorporated by reference to Exhibit 10.51 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File No. 1-4879)
*10.54	Offer Letter, dated February 21, 2018, by and between Diebold Nixdorf, Incorporated and Gerrard Schmid — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 21, 2018 (Commission File No. 1-4879)
*10.55	Consulting Agreement, dated October 1, 2018, between Diebold Nixdorf, Incorporated and Christopher Chapman — incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (Commission File No. 1-4879)
*10.56	Offer Letter, dated February 21, 2018, by and between Diebold Nixdorf, Incorporated and Gerrard Schmid — incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 21, 2018 (Commission File No. 1-4879)
*10.57	CEO Inducement Award Agreement, dated February 21, 2018, by and between Diebold Nixdorf, Incorporated and Gerrard Schmid — incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on February 21, 2018 (Commission File No. 1-4879)
*10.58	Change in Control Agreement, dated February 21, 2018, by and between Diebold Nixdorf, Incorporated and Gerrard Schmid — incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed on February 21, 2018 (Commission File No. 1-4879)
*10.59	Independent Contractor Agreement, dated October 1, 2018, between Diebold Nixdorf, Incorporated and Jeffrey Rutherford — incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (Commission File No. 1-4879)
21.1	Subsidiaries of the Registrant as of December 31, ~~2015~~2018
23.1	Consent of Independent Registered Public Accounting Firm
24.1	Power of Attorney
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~103~~

~~Table of Contents~~


32.1
~~32.1~~	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document



*	Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15(b) of this annual ~~report.~~

~~(b)~~	~~Refer to page~~ ~~107~~ ~~of this annual~~ report on Form ~~10-K for an index of exhibits, which is incorporated herein by reference.~~ 10-K.

ITEM 16: FORM 10-K SUMMARY

None.

~~104~~

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DIEBOLD NIXDORF, INCORPORATED

Date: ~~February 29, 2016~~March 1, 2019

By: /s/ ~~Andreas W. Mattes~~Gerrard B. Schmid

~~Andreas W. Mattes~~Gerrard B. Schmid

President and Chief Executive Officer

By: /s/ Jeffrey Rutherford

Jeffrey Rutherford

Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Signature	Title	Date

/s/ ~~Andreas W. Mattes~~Gerrard B. Schmid	President and Chief Executive Officer (Principal Executive Officer)	~~February 29, 2016~~March 1, 2019
~~Andreas W. Mattes~~Gerrard B. Schmid

/s/ ~~Christopher A. Chapman~~Jeffrey Rutherford	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	~~February 29, 2016~~March 1, 2019
~~Christopher A. Chapman~~

*	~~Director~~	~~February 29, 2016~~
~~Patrick W. Allender~~

*	~~Director~~	~~February 29, 2016~~
~~Phillip R. Cox~~

*	~~Director~~	~~February 29, 2016~~
~~Richard L. Crandall~~

*	~~Director~~	~~February 29, 2016~~
~~Gale S. Fitzgerald~~

*	~~Director~~	~~February 29, 2016~~
~~Gary G. Greenfield~~

*	~~Director~~	~~February 29, 2016~~
~~Robert S. Prather, Jr.~~

*	~~Director~~	~~February 29, 2016~~
~~Rajesh K. Soin~~	Jeffrey Rutherford

*	Director	~~February 29, 2016~~March 1, 2019
~~Henry D.G. Wallace~~	Patrick W. Allender

*	Director	~~February 29, 2016~~March 1, 2019
Bruce Besanko

*	Director	March 1, 2019
Ellen M. Costello

*	Director	March 1, 2019
Phillip R. Cox

*	Director	March 1, 2019
Richard L. Crandall

*	Director	March 1, 2019
Alexander Dibelius

*	Director	March 1, 2019
Dieter Duesedau

*	Director	March 1, 2019
Gale S. Fitzgerald

*	Director	March 1, 2019
Gary G. Greenfield

*	Director	March 1, 2019
Alan J. Weber



*	The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K pursuant to the Powers of Attorney executed by the above-named officers and directors of the Registrant and filed with the Securities and Exchange Commission on behalf of such officers and directors.

Date: ~~February 29, 2016~~March 1, 2019

*By: /s/ Jonathan B. Leiken

Jonathan B. Leiken

Attorney-in-Fact

~~105~~

~~Table of Contents~~

~~DIEBOLD, INCORPORATED AND SUBSIDIARIES~~

~~SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS~~

~~YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013~~

~~(in millions)~~

116

Additions
Balance at beginning of year Charged to costs and expenses
Charged to other accounts ⁽¹⁾

Deductions ⁽²⁾

Balance at
end of year
Year ended December 31, 2015
Allowance for doubtful accounts $ 20.9
15.8
(4.0 ) 1.0
$ 31.7
Year ended December 31, 2014
Allowance for doubtful accounts $ 23.3
13.4
(1.7 ) 14.1
$ 20.9
Year ended December 31, 2013
Allowance for doubtful accounts $ 26.7
13.4
(2.7 ) 14.1
$ 23.3

⁽¹⁾ ~~Net effects of foreign currency translation.~~

⁽²⁾ ~~Uncollectible accounts written-off, net of recoveries.~~

~~106~~

~~Table of Contents~~

~~EXHIBIT INDEX~~



~~EXHIBIT NO.~~	~~DOCUMENT DESCRIPTION~~
~~10.27~~	~~Form of Performance Share Agreement~~
~~10.28~~	~~Form of Nonqualified Stock Option Agreement~~
~~10.29~~	~~Form of Restricted Stock Unit Agreement - Cliff Vesting~~
~~10.30~~	~~Form of Restricted Stock Unit Agreement - Ratable Vesting~~
~~10.31~~	~~Form of Restricted Share Agreement~~
~~21.1~~	~~Subsidiaries of the Registrant as of December 31, 2015~~
~~23.1~~	~~Consent of Independent Registered Public Accounting Firm~~
~~24.1~~	~~Power of Attorney~~
~~31.1~~	~~Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~31.2~~	~~Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~32.1~~	~~Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350~~
~~32.2~~	~~Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350~~
~~101.INS~~	~~XBRL Instance Document~~
~~101.SCH~~	~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~107~~



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, ~~2015~~2018
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to



Ohio	34-0183970
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio	44720-8077
(Address of principal executive offices)	(Zip Code)



Title of each class	Name of each exchange on which registered
Common Shares $1.25 Par Value	New York Stock Exchange



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o
Smaller reporting company o	Emerging growth companyo


Period	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans ⁽²⁾	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans ⁽²⁾
October	137	$	37.47	—	2,426,177	699	$	3.98	—	2,426,177
November	2,871	$	33.80	—	2,426,177	640	$	3.97	—	2,426,177
December	425	$	30.80	—	2,426,177	17,870	$	3.11	—	2,426,177
Total	3,433	$	33.64	—		19,209	$	3.17	—



PART I
	ITEM 1:	BUSINESS	3
	ITEM 1A:	RISK FACTORS	87
	ITEM 1B:	UNRESOLVED STAFF COMMENTS	1918
	ITEM 2:	PROPERTIES	1918
	ITEM 3:	LEGAL PROCEEDINGS	2018
	ITEM 4:	MINE SAFETY DISCLOSURES	2119

PART II
	ITEM 5:	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	2220
	ITEM 6:	SELECTED FINANCIAL DATA	2422
	ITEM 7:	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2523
	ITEM 7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4642
	ITEM 8:	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	4743
	ITEM 9:	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	97107
	ITEM 9A:	CONTROLS AND PROCEDURES	97107
	ITEM 9B:	OTHER INFORMATION	97108

PART III
	ITEM 10:	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	98109
	ITEM 11:	EXECUTIVE COMPENSATION	98109
	ITEM 12:	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	99110
	ITEM 13:	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	~~100~~110
	ITEM 14:	PRINCIPAL ACCOUNTANT FEES AND SERVICES	~~100~~110

PART IV
	ITEM 15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	~~101~~111
	ITEM 16:	FORM 10-K SUMMARY	115

SIGNATURES			~~105~~
~~SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS~~			~~106~~
~~EXHIBIT INDEX~~			~~107~~116


(1)	All shares were surrendered or deemed surrendered to the Company in connection with the Company’s stock-based compensation plans.



		Total Number of Shares Approved for Repurchase
1997		2,000,000
2004		2,000,000
2005		6,000,000
2007		2,000,000
2011		1,876,949
2012		2,000,000
		15,876,949



	Year Ended December 31,
	2015		2014		2013			2012		2011
	(in millions, except per share data)
Results of operations								(unaudited)		(unaudited)
Net sales	$	2,419.3	$	2,734.8	$	2,582.7		$	2,724.3	$	2,577.4
Cost of sales	1,767.3		2,008.6		1,996.7			2,044.1		1,862.4
Gross profit	$	652.0	$	726.2	$	586.0		$	680.2	$	715.0

Amounts attributable to Diebold, Incorporated
Income (loss) from continuing operations, net of tax	$	57.8	$	104.7	$	(195.3	)	$	62.6	$	151.8
Income (loss) from discontinued operations, net of tax	15.9		9.7		13.7			11.0		(7.6		)
Net income (loss) attributable to Diebold, Incorporated	$	73.7	$	114.4	$	(181.6	)	$	73.6	$	144.2

Basic earnings (loss) per common share
Income (loss) from continuing operations, net of tax	$	0.89	$	1.62	$	(3.06	)	$	1.00	$	2.36
Income (loss) from discontinued operations, net of tax	0.24		0.15		0.21			$	0.17	(0.12		)
Net income (loss) attributable to Diebold, Incorporated	$	1.13	$	1.77	$	(2.85	)	$	1.17	$	2.24

Diluted earnings (loss) per common share
Income (loss) from continuing operations, net of tax	$	0.88	$	1.61	$	(3.06	)	$	0.98	$	2.35
Income (loss) from discontinued operations, net of tax	0.24		0.15		0.21			$	0.17	$	(0.12	)
Net income (loss) attributable to Diebold, Incorporated	$	1.12	$	1.76	$	(2.85	)	$	1.15	$	2.23

Number of weighted-average shares outstanding
Basic shares	64.9		64.5		63.7			63.1		64.2
Diluted shares	65.6		65.2		63.7			63.9		64.8

Dividends
Common dividends paid	$	75.6	$	74.9	$	74.0		$	72.8	$	72.9
Common dividends paid per share	$	1.15	$	1.15	$	1.15		$	1.14	$	1.12

Consolidated balance sheet data (as of period end)					(unaudited)			(unaudited)		(unaudited)
Current assets	$	1,643.6	$	1,655.5	$	1,555.4		$	1,814.9	$	1,732.3
Current liabilities	$	955.8	$	1,027.8	$	893.8		$	838.8	$	837.9
Net working capital	$	687.8	$	627.7	$	661.6		$	976.1	$	894.4
Property, plant and equipment, net	$	175.3	$	165.7	$	160.9		$	184.3	$	192.7
Total long-term liabilities	$	858.0	$	759.5	$	668.9		$	908.8	$	834.9
Total assets	$	2,249.3	$	2,342.1	$	2,183.5		$	2,592.9	$	2,517.4
Total equity	$	435.5	$	554.8	$	620.8		$	845.3	$	844.6


•	Partnered with Mastercard^®on key technology and services agreements to strengthen the Company's Connected Commerce offerings and further bridge physical and digital transactions.



Europe, Middle East and Africa:	2015			2014			$ Change			% Change
Revenue	$	393.1		$	421.2		$	(28.1	)	(6.7)
Segment operating profit	$	55.3		$	61.4		$	(6.1	)	(9.9)
Segment operating profit margin	14.1		%	14.6		%



Latin America:	2015			2014			$ Change			% Change
Revenue	$	492.1		$	721.9		$	(229.8	)	(31.8)
Segment operating profit	$	37.4		$	68.7		$	(31.3	)	(45.6)
Segment operating profit margin	7.6		%	9.5		%


⁽¹⁾	The amount available under the short-term uncommitted lines at December 31, 2018 was $28.0. Refer to note 11 for additional information.


⁽²⁾	Amounts represent estimated contractual interest payments on outstanding long-term debt and notes payable. Rates in effect as of December 31, ~~2015~~2018 are used for variable rate debt.


⁽³⁾	A portion of cash is restricted to fund the purchase of the remaining shares of Diebold Nixdorf AG.


	One-Percentage-Point Increase		One-Percentage-Point Decrease			One-Percentage-Point Increase		One-Percentage-Point Decrease
Effect on total of service and interest cost	$	—	$	—		$	—	$	—
Effect on other post-retirement benefit obligation	$	0.9	$	(0.8	)	$	0.4	$	(0.3	)



	Number of Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2015	0.7		$	33.72
Forfeited	(0.1	)	$	33.64
Vested	(0.2	)	$	36.03
Granted ⁽¹⁾	0.5		$	32.74
Non-vested at December 31, 2015	0.9		$	32.53



	Number of Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2014 ⁽¹⁾	1.1		$	37.38
Forfeited	(0.7	)	$	34.72
Vested	(0.1	)	$	35.55
Granted	0.5		$	32.50
Non-vested at December 31, 2015	0.8		$	34.06



	2015			2014
Deferred income taxes - current assets	$	168.8		$	111.0
Deferred income taxes - long-term assets	65.3			86.5
Other current liabilities	(6.0		)	(2.3		)
Deferred income taxes - long-term liabilities	(1.9		)	(6.5		)
Net deferred tax asset	$	226.2		$	188.7



	Finance Leases			Notes Receivable		Total
Allowance for credit losses
Balance at January 1, 2014	$	0.4		$	4.1	$	4.5
Provision for credit losses	0.2			—		0.2
Write-offs	(0.2		)	—		(0.2		)
Balance at December 31, 2014	$	0.4		$	4.1	$	4.5
Provision for credit losses	0.2			—		0.2
Write-offs	(0.1		)	—		(0.1		)
Balance at December 31, 2015	$	0.5		$	4.1	$	4.6



	December 31, 2015							December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Internally-developed software	$	92.4	$	(48.5	)	$	43.9	$	102.1	$	(65.8	)	$	36.3
Other intangibles	36.7		(16.3		)	20.4		42.6		(18.9		)	23.7
Total	$	129.1	$	(64.8	)	$	64.3	$	144.7	$	(84.7	)	$	60.0



	Maturities of Long-Term Debt
2016	$	175.0
2017	1.2
2018	50.4
2019	0.1
Thereafter	386.4
	$	613.1



	Target Allocation	Actual Allocation
	2016	2015	2014
Equity securities	45%	45%	45%
Debt securities	40%	39%	40%
Real estate	5%	6%	5%
Other	10%	10%	10%
Total	100%	100%	100%



	Pension Benefits		Other Benefits
Amount of net prior service credit	$	—	$	—
Amount of net loss	$	5.5	$	0.2



Derivative instrument	Classification on consolidated statement of operations	2018			2017			2016
Non-designated hedges and interest rate swaps	Interest expense	$	(2.9	)	$	(4.3	)	$	(5.1	)
Foreign currency option contracts gain - acquisition related	Miscellaneous, net	—			—			35.6
Foreign exchange forward contracts and cash flow hedges	Net sales	2.4			—			—
Foreign exchange forward contracts and cash flow hedges	Cost of Sales	0.6			—			—
Foreign exchange forward contracts and cash flow hedges	Foreign exchange gain (loss), net	(10.4		)	6.3			4.4
Foreign exchange forward contracts - acquisition related	Miscellaneous, net	—			—			(26.4		)
Total		$	(10.3	)	$	2.0		$	8.5



Foreign Currency Derivative	Number of Instruments	Notional Sold		Notional Purchased
Currency forward agreements (EUR-GBP)	12	27.5	GBP	30.9	EUR



		Notional Amounts
Instrument	Number of Instruments	Call		Put
Foreign currency option contracts	2	€	1,416.0	$	1,547.1



Cumulative total restructuring costs from continuing operations for the multi-year realignment plan	Severance		Other		Total

NA	$	67.9	$	2.0	$	69.9
AP	3.8		0.6		4.4
EMEA	5.6		0.9		6.5
LA	20.0		—		20.0
Total	$	97.3	$	3.5	$	100.8



Balance at January 1, 2013	$	10.5
Liabilities incurred	53.2
Liabilities paid/settled	(32.0		)
Balance at December 31, 2013	$	31.7
Liabilities incurred	11.6
Liabilities paid/settled	(35.7		)
Balance at December 31, 2014	$	7.6
Liabilities incurred	21.2
Liabilities paid/settled	(24.1		)
Balance at December 31, 2015	$	4.7


	December 31, 2015						December 31, 2014
			Fair Value Measurements Using						Fair Value Measurements Using				Classification on consolidated balance sheets	December 31, 2018				December 31, 2017
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2		Classification on consolidated balance sheets	Level 1		Level 2		Level 1		Level 2
Assets
Short-term investments
Certificates of deposit	$	39.9	$	39.9	$	—	$	136.7	$	136.7	$	—	Short-term investments	$	33.5	$	—	$	81.4	$	—
Assets held in rabbi trusts	9.3		9.3		—		9.7		9.7		—		Securities and other investments	6.3		—		9.4		—
Foreign exchange forward contracts	3.5		—		3.5		3.0		—		3.0		Other current assets	—		3.4		—		6.7
Foreign exchange option contracts	7.0		—		7.0		—		—		—
Interest rate swaps													Other current assets	—		5.3		—		2.2
Interest rate swaps													Securities and other investments	—		4.8		—		7.6
Total	$	59.7	$	49.2	$	10.5	$	149.4	$	146.4	$	3.0		$	39.8	$	13.5	$	90.8	$	16.5

Liabilities
Deferred compensation	$	9.3	$	9.3	$	—	$	9.7	$	9.7	$	—
Foreign exchange forward contracts	1.5		—		1.5		1.0		—		1.0		Other current liabilities	$	—	$	3.1	$	—	$	10.2
Interest rate swaps	—		—		—		1.2		—		1.2		Other current liabilities	—		3.6		—		5.5
Deferred compensation													Other liabilities	6.3		—		9.4		—
Total	$	10.8	$	9.3	$	1.5	$	11.9	$	9.7	$	2.2		$	6.3	$	6.7	$	9.4	$	15.7



			Additions
	Balance at beginning of year		Charged to costs and expenses	Charged to other accounts ⁽¹⁾		Deductions ⁽²⁾	Balance at end of year
Year ended December 31, 2015
Allowance for doubtful accounts	$	20.9	15.8	(4.0	)	1.0	$	31.7
Year ended December 31, 2014
Allowance for doubtful accounts	$	23.3	13.4	(1.7	)	14.1	$	20.9
Year ended December 31, 2013
Allowance for doubtful accounts	$	26.7	13.4	(2.7	)	14.1	$	23.3