UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q
__________________________________________________ 
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2023
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 1-4879

Diebold Nixdorf, Incorporated
(Exact name of registrant as specified in its charter)
_________________________________________________ 
Ohio34-0183970
(State or other jurisdiction of

incorporation or organization)
(IRS Employer

Identification Number)
5995 Mayfair Road, PO50 Executive Parkway, P.O. Box 3077, North Canton, Ohio2520Hudson44720-8077Ohio44236
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (330) 490-4000
__________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common shares, $1.25 par value per shareDBDNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☒     No  o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒    No  o☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated Filerx☐Accelerated filerFilero☒
Non-accelerated filer
(Do not check if a smaller reporting company)
Filer		o☐
Smaller reporting companyo☐Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o☐    No  x☒
Number of shares of common stock outstanding as of October 26, 2017May 24, 2023 was 75,534,183.80,037,406.





DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
Form 10-Q


Index
 
Item 1: Financial Statements
Condensed Consolidated Balance Sheets - September 30, 2017– March 31, 2023 (Unaudited) and December 31, 20162022
Condensed Consolidated Statements of Operations (Unaudited) – Three and Nine Months Ended September 30, 2017March 31, 2023 and 20162022
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and Nine Months Ended September 30, 2017March 31, 2023 and 20162022
Condensed Consolidated Statements of Cash Flows (Unaudited) – NineThree Months Ended September 30, 2017March 31, 2023 and 20162022
Notes to Condensed Consolidated Financial Statements (Unaudited)
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Item 4: Controls and Procedures
Item 1: Legal Proceedings
Item 1A: Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 3: Defaults Upon Senior Securities
Item 4: Mine Safety Disclosures
Item 5: Other Information
Item 6: Exhibits


Table of Contents

Part I – Financial Information
Item 1: Financial Statements
`
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in millions, except share and per share amounts)
 September 30,
2017
December 31,
2016		March 31, 2023December 31, 2022
 (Unaudited)   (Unaudited) 
ASSETS    ASSETS
Current assets    Current assets
Cash and cash equivalents
$380.7

$652.7
Cash, cash equivalents, and restricted cashCash, cash equivalents, and restricted cash$246.4 $319.1 
Short-term investments
64.0

64.1
Short-term investments16.6 24.6 
Trade receivables, less allowances for doubtful accounts of $70.6 and $50.4, respectively 911.9
 835.9
Trade receivables, less allowances for doubtful accounts of $32.4 and $34.5, respectivelyTrade receivables, less allowances for doubtful accounts of $32.4 and $34.5, respectively627.1 612.2 
Inventories 807.8
 737.7
Inventories639.5 588.1 
Prepaid expenses 64.5
 60.7
Prepaid expenses53.2 50.5 
Income taxes 132.0
 85.2
Current assets held for saleCurrent assets held for sale6.9 7.9 
Other current assets 215.4
 183.3
Other current assets219.5 168.5 
Total current assets 2,576.3
 2,619.6
Total current assets1,809.2 1,770.9 
Securities and other investments 92.5
 94.7
Securities and other investments7.4 7.6 
Property, plant and equipment, net of accumulated depreciation and amortization of $428.1 and $477.0, respectively 367.7
 387.0
Property, plant and equipment, net of accumulated depreciation and amortization of $490.1 and $479.4, respectivelyProperty, plant and equipment, net of accumulated depreciation and amortization of $490.1 and $479.4, respectively120.1 120.7 
Goodwill 1,105.9
 998.3
Goodwill702.2 702.3 
Deferred income taxes 338.0
 309.5
Finance lease receivables 16.4
 25.2
Customer relationships, net 641.6
 596.3
Customer relationships, net199.9 213.6 
Other intangible assets, net 151.9
 176.6
Other assets 71.1
 63.1
Other assets251.9 249.9 
Total assets $5,361.4
 $5,270.3
Total assets$3,090.7 $3,065.0 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY    
LIABILITIES AND EQUITYLIABILITIES AND EQUITY
Current liabilities    Current liabilities
Notes payable $71.9
 $106.9
Notes payable$83.7 $24.0 
Accounts payable 579.1
 560.5
Accounts payable636.4 611.6 
Deferred revenue 369.4
 404.2
Deferred revenue486.7 453.2 
Payroll and other benefits liabilities 201.3
 172.5
Payroll and other benefits liabilities121.9 107.9 
Current liabilities held for saleCurrent liabilities held for sale8.5 6.8 
Other current liabilities 536.6
 580.4
Other current liabilities405.7 401.4 
Total current liabilities 1,758.3
 1,824.5
Total current liabilities1,742.9 1,604.9 
Long-term debt 1,834.5
 1,691.4
Long-term debt2,571.7 2,585.8 
Pensions, post-retirement and other benefits 281.5
 297.2
Pensions, post-retirement and other benefits41.9 40.6 
Deferred income taxes 282.6
 300.6
Deferred income taxes100.7 96.6 
Other liabilities 107.1
 87.7
Other liabilities107.1 108.2 
Commitments and contingencies 

 

Redeemable noncontrolling interests 485.7
 44.1
Equity    Equity
Diebold Nixdorf, Incorporated shareholders' equity    Diebold Nixdorf, Incorporated shareholders' equity
Preferred shares, no par value, 1,000,000 authorized shares, none issued —
 —
Preferred shares, no par value, 1,000,000 authorized shares, none issued— — 
Common shares, $1.25 par value, 125,000,000 authorized shares, 90,481,613 and 89,924,378 issued shares, 75,527,998 and 75,144,784 outstanding shares, respectively 113.1
 112.4
Common shares, $1.25 par value, 125,000,000 authorized shares, 96,563,247 and 95,779,719 issued shares, 79,609,121 and 79,103,450 outstanding shares, respectivelyCommon shares, $1.25 par value, 125,000,000 authorized shares, 96,563,247 and 95,779,719 issued shares, 79,609,121 and 79,103,450 outstanding shares, respectively120.8 119.8 
Additional capital 710.7
 720.0
Additional capital831.8 831.5 
Retained earnings 514.9
 662.7
Treasury shares, at cost (14,953,615 and 14,779,597 shares, respectively) (567.2) (562.4)
Retained earnings (accumulated deficit)Retained earnings (accumulated deficit)(1,517.8)(1,406.7)
Treasury shares, at cost (16,954,126 and 16,676,269 shares, respectively)Treasury shares, at cost (16,954,126 and 16,676,269 shares, respectively)(586.4)(585.6)
Accumulated other comprehensive loss (199.3) (341.3)Accumulated other comprehensive loss(353.7)(360.0)
Equity warrantsEquity warrants20.1 20.1 
Total Diebold Nixdorf, Incorporated shareholders' equity 572.2
 591.4
Total Diebold Nixdorf, Incorporated shareholders' equity(1,485.2)(1,380.9)
Noncontrolling interests 39.5
 433.4
Noncontrolling interests11.6 9.8 
Total equity 611.7
 1,024.8
Total equity(1,473.6)(1,371.1)
Total liabilities, redeemable noncontrolling interests and equity $5,361.4
 $5,270.3
Total liabilities and equityTotal liabilities and equity$3,090.7 $3,065.0 
See accompanying notes to condensed consolidated financial statements.


Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
(in millions, except per share amounts)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net sales       
Services and software$725.7
 $571.0
 $2,097.2
 $1,270.5
Systems397.0
 412.3
 1,262.2
 802.4
 1,122.7
 983.3
 3,359.4

2,072.9
Cost of sales       
Services and software553.7
 400.0
 1,595.6
 867.7
Systems328.0
 385.7
 1,042.5
 713.7
 881.7
 785.7
 2,638.1
 1,581.4
Gross profit241.0
 197.6
 721.3
 491.5
Selling and administrative expense208.8

253.5
 692.6
 506.4
Research, development and engineering expense34.2

31.3
 114.4
 67.4
Impairment of assets—

—
 3.1
 —
(Gain) loss on sale of assets, net5.6
 (0.5) (2.5) (0.2)
 248.6
 284.3
 807.6
 573.6
Operating profit (loss)(7.6) (86.7) (86.3)
(82.1)
Other income (expense)       
Interest income4.3
 5.3
 15.8
 16.5
Interest expense(27.7) (32.4) (90.7) (68.2)
Foreign exchange gain (loss), net3.2
 2.0
 (4.5) (1.6)
Miscellaneous, net(1.5) (4.2) 1.7
 3.6
Income (loss) from continuing operations before taxes(29.3) (116.0) (164.0) (131.8)
Income tax (benefit) expense(0.5) (18.8) (59.4) (34.5)
Income (loss) from continuing operations, net of tax(28.8) (97.2) (104.6) (97.3)
Income (loss) from discontinued operations, net of tax—
 (4.6) —
 143.7
Net income (loss)(28.8) (101.8) (104.6) 46.4
Net income attributable to noncontrolling interests6.6
 0.5
 20.2
 1.6
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(35.4) $(102.3) $(124.8) $44.8
        
Basic weighted-average shares outstanding75.5
 70.9
 75.4
 67.0
Diluted weighted-average shares outstanding75.5
 70.9
 75.4
 67.6
        
Basic earnings (loss) per share       
Loss from continuing operations, net of tax$(0.47) $(1.38) $(1.66) $(1.48)
Income (loss) from discontinued operations, net of tax—
 (0.06) —
 2.15
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(0.47) $(1.44) $(1.66) $0.67
        
Diluted earnings (loss) per share       
Loss from continuing operations, net of tax$(0.47) $(1.38) $(1.66) $(1.46)
Income (loss) from discontinued operations, net of tax—
 (0.06) —
 2.12
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(0.47) $(1.44) $(1.66) $0.66
        
Amounts attributable to Diebold Nixdorf, Incorporated       
Loss before discontinued operations, net of tax$(35.4) $(97.7) $(124.8) $(98.9)
Income (loss) from discontinued operations, net of tax—
 (4.6) —
 143.7
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(35.4) $(102.3) $(124.8) $44.8
        
Common dividends declared and paid per share$0.1000
 $0.2875
 $0.3000
 $0.8625
 Three months ended
March 31,
 20232022
Net sales
Services$516.4 $526.2 
Products341.7 303.6 
858.1 829.8 
Cost of sales
Services363.0 374.2 
Products285.8 270.3 
648.8 644.5 
Gross profit209.3 185.3 
Selling and administrative expense183.8 181.0 
Research, development and engineering expense26.4 32.3 
Loss on sale of assets, net0.3 0.2 
Impairment of assets0.9 55.2 
211.4 268.7 
Operating loss(2.1)(83.4)
Other income (expense)
Interest income1.7 1.3 
Interest expense(81.9)(48.1)
Foreign exchange loss, net(10.6)(4.7)
Miscellaneous, net2.6 2.6 
Loss before taxes(90.3)(132.3)
Income tax expense21.1 50.9 
Equity in loss of unconsolidated subsidiaries(0.1)(0.7)
Net loss(111.5)(183.9)
Net loss attributable to noncontrolling interests(0.4)(0.8)
Net loss attributable to Diebold Nixdorf, Incorporated$(111.1)$(183.1)
Basic and diluted weighted-average shares outstanding79.3 78.7 
Net loss attributable to Diebold Nixdorf, Incorporated
Basic and diluted loss per share$(1.40)$(2.33)
See accompanying notes to condensed consolidated financial statements.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
(in millions)
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Net income (loss) $(28.8) $(101.8) $(104.6) $46.4
Other comprehensive income (loss), net of tax        
Translation adjustment 15.8
 (4.2) 145.0
 49.6
Foreign currency hedges (net of tax of $1.2, $0.2, $(0.2) and $4.2, respectively) (2.4) (0.4) 1.0
 (7.9)
Interest rate hedges 

 

 

 

Net gain recognized in other comprehensive income (net of tax of $(0.1) and $(0.6), respectively) 0.3
 —
 1.8
 —
Reclassification adjustment for amounts recognized in net income —
 —
 (0.4) (0.1)
  0.3
 —
 1.4
 (0.1)
Pension and other post-retirement benefits        
Net actuarial loss amortization (net of tax of $(0.5), $(0.3), $0.5 and $(1.3), respectively) 1.0
 (0.1) (2.0) 1.8
Other comprehensive income (loss), net of tax 14.7
 (4.7) 145.4
 43.4
Comprehensive income (loss) (14.1) (106.5) 40.8
 89.8
Less: comprehensive income (loss) attributable to noncontrolling interests 8.4
 0.5
 23.7
 1.1
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated $(22.5) $(107.0) $17.1
 $88.7
 Three months ended
March 31,
 20232022
Net loss$(111.5)$(183.9)
Other comprehensive loss, net of tax
Translation adjustment6.9 11.2 
Foreign currency hedges (net of tax of $0.0 and $0.0, respectively)— (1.0)
Interest rate hedges
Net income recognized in other comprehensive income (net of tax of $0.0 and $0.6, respectively)0.3 2.9 
Reclassification adjustment for amounts recognized in net income— (0.6)
0.3 2.3 
Pension and other post-retirement benefits
Net actuarial gain amortized (net of tax of $0.5 and $0.3, respectively)1.3 0.7 
Other— 0.7 
Other comprehensive loss, net of tax8.5 13.9 
Comprehensive loss(103.0)(170.0)
Less: Comprehensive loss attributable to noncontrolling interests1.8 — 
Comprehensive loss attributable to Diebold Nixdorf, Incorporated$(104.8)$(170.0)
See accompanying notes to condensed consolidated financial statements.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in millions)
  Nine Months Ended
  September 30,
  2017 2016
Cash flow from operating activities    
Net income (loss) $(104.6) $46.4
Income (loss) from discontinued operations, net of tax —
 143.7
Income (loss) from continuing operations, net of tax (104.6) (97.3)
Adjustments to reconcile net income (loss) to cash flow used by operating activities:    
Depreciation and amortization 185.4
 74.3
Share-based compensation 23.1
 14.2
Other 4.7
 (9.5)
Changes in certain assets and liabilities, net of the effects of acquisitions    
Trade receivables (57.5) (85.3)
Inventories (48.8) (18.9)
Income taxes (46.8) (90.3)
Accounts payable 10.0
 14.2
Deferred revenue (43.3) (42.9)
Deferred income taxes (36.3) (58.5)
Restructuring payments (57.8) (11.7)
Certain other assets and liabilities (63.4) 125.3
Net cash used by operating activities - continuing operations (235.3) (186.4)
Net cash used by operating activities - discontinued operations —
 (8.2)
Net cash used by operating activities (235.3) (194.6)
Cash flow from investing activities    
Payment for acquisitions (5.6) (890.6)
Proceeds from maturities of investments 249.5
 164.1
Proceeds from sale of foreign currency option contracts, net —
 16.2
Payments for purchases of investments (260.7) (155.6)
Proceeds from sale of assets 14.6
 28.7
Capital expenditures (41.7) (23.9)
Restricted cash (7.9) —
Increase in certain other assets (26.9) (17.9)
Net cash used by investing activities - continuing operations (78.7) (879.0)
Net cash provided by investing activities - discontinued operations —
 361.9
Net cash used by investing activities (78.7) (517.1)
Cash flow from financing activities    
Dividends paid (22.9) (57.0)
Debt issuance costs (1.1) (39.2)
Revolving credit facility borrowings (repayments), net 120.0
 (168.0)
Other debt borrowings 381.0
 1,825.7
Other debt repayments (433.5) (419.2)
Distributions and payments to noncontrolling interest holders (16.3) (2.1)
Issuance of common shares 0.3
 0.3
Repurchase of common shares (4.8) (2.1)
Net cash provided by financing activities 22.7
 1,138.4
Effect of exchange rate changes on cash and cash equivalents 19.3
 9.4
(Decrease) increase in cash and cash equivalents (272.0) 436.1
Add: Cash overdraft included in assets held for sale at beginning of period —
 (1.5)
Cash and cash equivalents at the beginning of the period 652.7
 313.6
Cash and cash equivalents at the end of the period $380.7
 $748.2
 Three months ended
March 31,
 20232022
Cash flow from operating activities
Net loss$(111.5)$(183.9)
Adjustments to reconcile net loss to cash flow used by operating activities:
Depreciation and amortization11.7 14.5 
Amortization of Wincor Nixdorf purchase accounting intangible assets17.7 18.5 
Amortization of deferred financing costs into interest expense13.6 4.3 
Share-based compensation1.3 1.7 
Loss on sale of assets, net0.3 0.2 
Impairment of assets0.9 55.2 
Deferred income taxes2.9 — 
Other0.8 — 
Changes in certain assets and liabilities
Trade receivables(4.4)35.2 
Inventories(39.6)(83.0)
Accounts payable15.4 (77.7)
Deferred revenue25.5 54.2 
Sales tax and net value added tax(24.3)(24.8)
Income taxes(2.8)38.1 
Accrued salaries, wages and commissions11.3 (21.3)
Restructuring accrual(23.4)(11.5)
Warranty liability(1.1)(0.4)
Pension and post retirement benefits3.0 (22.5)
Certain other assets and liabilities6.8 (23.0)
Net cash used by operating activities(95.9)(226.2)
Cash flow from investing activities
Capital expenditures(5.7)(4.0)
Capitalized software development(5.4)(7.6)
Proceeds from divestitures, net of cash divested— 5.8 
Proceeds from maturities of investments71.9 126.8 
Payments for purchases of investments(62.5)(126.8)
Net cash used by investing activities(1.7)(5.8)
Cash flow from financing activities
Revolving credit facility borrowings, net22.7 75.0 
Other debt borrowings2.3 0.3 
Other debt repayments(2.1)(4.7)
Other(1.8)(5.0)
Net cash provided by financing activities21.1 65.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash1.9 1.5 
Change in cash, cash equivalents and restricted cash(74.6)(164.9)
Add: Cash included in assets held for sale at beginning of period2.8 3.1 
Less: Cash included in assets held for sale at end of period0.9 2.4 
Cash, cash equivalents and restricted cash at the beginning of the period319.1 388.9 
Cash, cash equivalents and restricted cash at the end of the period$246.4 $224.7 
See accompanying notes to condensed consolidated financial statements.


6
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements
(unaudited)
(in millions, except share and per share amounts)


Note 1: Consolidated Financial StatementsBasis of Presentation


The accompanying unaudited condensed consolidated financial statements of Diebold Nixdorf, Incorporated and its subsidiaries (collectively, the Company) have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (U.S. GAAP); however, such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods.periods presented.


The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s annual reportAnnual Report on Form 10-K for the year ended December 31, 2016.2022. In addition, some of the Company’s statements in this quarterly reportQuarterly Report on Form 10-Q may involve risks and uncertainties that could significantly impact expected future results. The results of operations for the three and nine months ended September 30, 2017March 31, 2023 are not necessarily indicative of results to be expected for the full year.

In August 2016, the Company acquired Diebold Nixdorf AG, formerly known as Wincor Nixdorf Aktiengesellschaft (the Acquisition). In connection with the business combination agreement related to the Acquisition, the Company announced the realignment of its lines of business to drive greater efficiency and further improve customer service. During the first quarter of 2017, the Company reorganized the management team reporting to the Chief Operating Decision Maker (CODM) and evaluated and assessed the line of business (LOB) reporting structure. The Company's reportable operating segments are based on the following three LOBs: Services, Software and Systems. As a result, the Company reclassified comparative periods for consistency.


The Company has reclassified the presentation of certain prior-year information to conform to the current presentation.


Recently Adopted Accounting GuidanceGoing Concern Assessment


The Company's condensed consolidated financial statements included herein have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. As part of this assessment, based on conditions that are known and reasonably knowable to us, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-09, Compensation, - Stock Compensation (Topic 718): Improvementsconsiders various scenarios, forecasts, projections, and estimates, and makes certain key assumptions, including the timing and nature of projected cash expenditures or programs, and the Company’s ability to Employee Share-Based Payment Accounting, atdelay or curtail those expenditures or programs, if necessary, among other factors. This evaluation does not take into consideration the beginningpotential mitigating effect of 2017 and accordingly, retrospectively reclassified $0.3management’s plans that have not been fully implemented or are not within control of excess tax benefits from share-based compensation from financing activities to operating activities included inthe Company as of the date the condensed consolidated financial statements ofare issued.

As previously disclosed, the Company is currently working to improve its operating performance and its cash, flowsliquidity and financial position. In addition, the Company has been in discussions with its lenders with respect to a long-term solution for the nine months ended SeptemberCompany’s capital structure, leverage ratio and liquidity needs. As a result of these discussions, on May 30, 2016.

In October 2016,2023, the FASB issued ASU 2016-16, Intra-Entity TransfersCompany and certain of Assets Other Than Inventoryits direct and indirect subsidiaries (collectively, the Company Parties) entered into a Restructuring Support Agreement (the Restructuring Support Agreement) with certain holders (collectively, the Consenting Creditors) of: (i) obligations under the Superpriority Credit Agreement (as defined in Note 9); (ii) term loan obligations under the New Term Loan Credit Agreement (as defined in Note 9); (iii) the 2025 Senior Notes (as defined in Note 9); and (iv) the 2L Notes (as defined in Note 9). This ASU requiresThe Consenting Creditors collectively hold the recognitionfollowing approximate amounts of the income tax effectsCompany’s outstanding secured debt obligations: (a) approximately 80% of intercompany salesthe Company’s Superpriority Credit Agreement obligations; (b) approximately 79% of the Company’s New Term Loan Credit Agreement obligations; (c) approximately 78% of the Company’s 2025 Senior Notes obligations; and transfers(d) approximately 59% of assets,the Company’s 2L Notes obligations.

The Company’s ability to continue as a going concern is contingent upon, among other than inventory,things, successful implementation of the Restructuring Transactions (as defined in Note 9) contemplated in the periodRestructuring Support Agreement, subject to the approval of the Bankruptcy Court (as defined in whichNote 9) and the transfer occurs rather than deferring recognition untilDutch Court (as defined in Note 9). There can be no certainty that the asset is soldRestructuring Transactions will be effected or that disruption from the Chapter 11 Cases (as defined in Note 9) and Dutch Scheme Proceedings (as defined in Note 9) contemplated by the Restructuring Support Agreement (as defined below) will not interfere with the Company’s business. As of March 31, 2023 substantial doubt exists regarding our ability to an external party. Forcontinue as a going concern.

The inclusion of the Company, ASU 2016-16 is effective for annual periods beginning after December 15, 2017 and requires application of a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings“going concern” uncertainty paragraph in the period of adoption. The Company early adoptedindependent registered public accounting firm’s report in the standard in 2017. The adoption of ASU 2016-16 did not have a material impactCompany's annual report on the financial statements of the Company.

Recently Issued Accounting Guidance

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitledForm 10-K for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016,year ended December 31, 2023, covering the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08). The FASB issued the amendment to clarify the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (ASU 2016-10). The FASB issued the amendment to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (ASU 2016-11). The FASB issued the amendment to rescind the following aspects of Topic 606. Specifically, registrants should not rely on the following SEC Staff Observer comments upon adoption of Topic 606: Revenue and Expense Recognition for Freight Services in Process, which is codified in paragraph 605-20-S99-2; Accounting for Shipping and Handling Fees and Costs, which is codified in paragraph 605-45-S99-1; Accounting for

Company's audited consolidated
7

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



financial statements would have constituted a default under the agreements governing the ABL Facility (as defined in Note 9), the Superpriority Facility (as defined in Note 9) and the New Term Loans (as defined in Note 9); however, the requisite lenders under each of these facilities have waived such default.
Consideration Given
The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

Recently Issued Accounting Guidance

The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) issued by a Vendor to a Customer (including Reseller of the Vendor’s Products), which is codified in paragraph 605-50-S99-1;Financial Accounting for Gas-Balancing Arrangements (that is, use of the “entitlements method”), which is codified in paragraph 932-10-S99-5. Additionally, in May 2016,Standards Board (FASB).

In March 2020, the FASB issued ASU 2016-12, Revenueguidance that provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from Contracts with Customers (Topic 606): Identifying Performance Obligationsreference rates expected to be discontinued to alternative reference rates. The guidance was effective upon issuance and Licensing: Narrow-Scope Improvementsmay be applied prospectively to contract modifications made and Practical Expedients (ASU 2016-12). The FASB issued the amendment to improve Topic 606 by reducing the potential for diversity in practice at initial application and reducing the cost and complexity of applying Topic 606 both at transition andhedging relationships entered into on an ongoing basis.

or before December 31, 2024. The standard along with its amendments,does not materially impact the Company's consolidated financial statements.

Although there are effective forother new accounting pronouncements issued by the FASB, the Company on January 1, 2018. Early application was permitted on the original adoption date of January 1, 2017. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. The Company has chosen to adopt the modified retrospective transition method as its recent acquisitions would impact the comparability under the retrospective model.

In 2015, the Company established a cross-functional steering committee and project implementation team to assess the impact of the standard on the Company's legacy revenue from contracts with customers. We utilized a bottom-up approach to assess and document the impact of the standard on the Company's contract portfolio by reviewing its current accounting policies and practices against application of the requirements of the new standard to identify potential differences. A broad-scope contract analysis was carried out to substantiate the results of the assessment and a business process, systems and controls review was performed to identify necessary changes to support recognition and disclosure under the new standard.

The implementation team reported the findings and progress of the project to management and the Audit Committee of the Company's board of directors on a frequent basis over the last year. In late 2016, the impact assessment was expanded to include Diebold Nixdorf AG revenue from contracts with customers. The Company's current assessment indicates no material impact related to the adoption of ASU 2014-06. The Company continues to evaluate all contracts, particularly on stand alone pricing methodology and variable consideration, which it believes are the gaps that provide the highest impact. The Companydoes not believe these pronouncements will continue its evaluation and assessment on the impact on the financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. ASU 2016-02 will be effective for the Company on January 1, 2019, including interim periods. ASU 2016-02 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 financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). The FASB issued the update to simplify 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. ASU 2017-04 will be effective for public companies for fiscal years beginning after December 15, 2019, including interim periods. Early adoption is permitted. The Company is evaluating the effect that ASU 2017-04 will have on its financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09). The FASB issued the update to provide clarity and reduce the cost and complexity when applying the guidance in Topic 718. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods. Early adoption is permitted. The adoption of ASU 2017-09 is not expected to have a material impact on theits consolidated financial statements of the Company.statements.


In May 2017, the FASB issued ASU 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (ASU 2017-10). The FASB issued the update to eliminate uncertainty regarding how an operating entity determines the customer of the operation services for transactions within the scope of Topic 853. The amendments in this update clarify that the grantor is the customer of the operation services in all cases for service concession arrangements within the scope of Topic 853. ASU 2017-10 will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods. Early adoption is permitted. The adoption of ASU 2017-10 is not expected to have a material impact on the financial statements of the Company.


8
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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for the Company on June 1, 2019, with early adoption permitted in any interim period. The Company is currently evaluating the effect the guidance will have on its financial statements and related disclosures.

Note 2: Acquisitions

During 2017, the Company acquired all the capital stock of Moxx Group B.V. (Moxx) and certain assets and liabilities of Visio Objekt GmbH (Visio) for $5.6 in the aggregate, net of cash acquired, which are included in the Services LOB. During the third quarter of 2017, the Company acquired Moxx, which is 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.

On August 15, 2016, the Company acquired, through Diebold Holding Germany Inc. & Co. KGaA (Diebold KGaA), a German partnership limited by shares and a wholly owned subsidiary of the Company, 22.9 Diebold Nixdorf AG ordinary shares representing 69.2 percent of total number of Diebold Nixdorf AG ordinary shares inclusive of treasury shares (76.7 percent of all Diebold Nixdorf AG ordinary shares outstanding) in exchange for an aggregate purchase price consideration of $1,265.7, which included the issuance of 9.9 common shares of the Company. The Company financed the cash portion of the Acquisition as well as the repayment of Diebold Nixdorf AG debt outstanding with funds available under the Company’s Credit Agreement (as defined in note 13) and proceeds from the issuance and sale of the $400.0 aggregate principal amount of 8.50 percent senior notes due 2024 (2024 Senior Notes).

The information included herein has been prepared based on the allocation of the purchase price using estimates of the fair value and useful lives of assets acquired and liabilities assumed which were determined with the assistance of independent valuations using discounted cash flow and comparative market multiple approaches, quoted market prices and estimates made by management.
The aggregate consideration, excluding $110.7 of cash acquired, for the Acquisition was $1,265.7, which consisted of the following:
Cash paid $995.3
Less: cash acquired (110.7)
Payments for acquisition, net of cash acquired 884.6
Common shares issued to Diebold Nixdorf AG shareholders 279.7
Other consideration (9.3)
Total consideration, net of cash acquired $1,155.0

Other consideration of $(9.3) represents the pre-existing net trade balances the Company owed to Diebold Nixdorf AG, which were deemed settled as of the acquisition date.


9
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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


The following table summarizes the final amounts of the fair value recognized for the assets acquired and liabilities assumed as of the acquisition date along with the measurement period adjustments based on the allocation of the total consideration, net of cash acquired:
  Amounts recognized as of:
  Preliminary   Final
  December 31, 2016 Measurement Period September 30, 2017
Trade receivables $474.1
 $(4.5) $469.6
Inventories 487.2
 10.9
 498.1
Prepaid expenses 39.3
 (0.3) 39.0
Current assets held for sale 106.6
 —
 106.6
Other current assets 79.9
 (0.3) 79.6
Property, plant and equipment 247.1
 (10.5) 236.6
Intangible assets 802.1
 29.0
 831.1
Deferred income taxes 109.7
 5.8
 115.5
Other assets 27.0
 —
 27.0
Total assets acquired 2,373.0
 30.1
 2,403.1
   
  
  
Notes payable 159.8
 —
 159.8
Accounts payable 321.5
 —
 321.5
Deferred revenue 158.0
 19.6
 177.6
Payroll and other benefits liabilities 191.6
 (7.3) 184.3
Current liabilities held for sale 56.6
 —
 56.6
Other current liabilities 196.3
 5.9
 202.2
Pensions and other benefits 103.2
 —
 103.2
Other noncurrent liabilities 458.9
 9.0
 467.9
Total liabilities assumed 1,645.9
 27.2
 1,673.1
       
Redeemable noncontrolling interest (46.8) —
 (46.8)
Fair value of noncontrolling interest (407.9) —
 (407.9)
Total identifiable net assets acquired, including noncontrolling interest 272.4

2.9

275.3
Total consideration, net of cash acquired 1,155.0
 —
 1,155.0
Goodwill $882.6
 $(2.9) $879.7

During the third quarter of 2017, the Company finalized the acquisition accounting for Diebold Nixdorf AG. The measurement period adjustments outlined above primarily related to changes in the fair value measurement of certain assets and liabilities. The trade receivables measurement period adjustment related to a reduction of $4.5 to certain customer accounts offset by certain deferred revenue adjustments primarily in the United Kingdom (U.K.). The inventories measurement period adjustment of $10.9 related to updated fair value measurement adjustments of certain inventory items along with certain deferred revenue adjustments, which resulted in an unfavorable impact of $2.8 and $1.9 to cost of sales-systems for the three and nine months ended September 30, 2017, respectively. The measurement period adjustments for prepaid expenses and other current assets relate to certain advances to suppliers and other miscellaneous receivables, respectively. The measurement period adjustment for property, plant and equipment of $10.5 related to the final fair value measurement of an acquired building which resulted in an unfavorable impact of $4.9 to cost of sales-systems and a favorable impact of $0.2 to selling and administrative expense related finalization of depreciation expense for the three and nine months ended September 30, 2017. The measurement period adjustment to intangible assets for $29.0 related to a change in the underlying valuation assumptions used in the fair value measurement of acquired customer relationships which resulted in an unfavorable impact of $0.2 and $0.8 in selling and administrative expense for the three and nine

10
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


months ended September 30, 2017, respectively. The deferred income tax measurement period adjustment of $5.8 related to the tax effects of adjustments. The deferred revenue measurement period adjustment of $19.6 primarily related to an adjustment to the inputs used in the fair value measurement primarily in the U.K. along with certain onerous contracts, which resulted in an unfavorable impact of $4.4 and $3.9 for the three and nine months ended September 30, 2017, respectively, which split near evenly between net sales-service and software and net sales-systems. The payroll and other benefits liabilities measurement period adjustment of $7.3 primarily related to the reduction of $8.2 related to the Delta Program restructuring accrual offset by certain bonus compensation accruals. The other current liabilities measurement period adjustment of $5.9 related primarily to certain onerous contracts and accrued taxes. The other noncurrent liabilities measurement period adjustment of $9.0 primarily relates to deferred income tax liabilities calculated in connection with the measurement period adjustments along with certain onerous contracts.

Included in the purchase price allocation are acquired identifiable intangibles of $831.1 the fair value of which was primarily determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance.

The Company recorded acquired intangible assets in the following table as of the acquisition date:
  Classification on condensed consolidated statements of operations Weighted-average useful lives August 15, 2016
Trade name Selling and administrative expense 3.0 years $30.1
Technologies Cost of sales 4.0 years 107.2
Customer relationships Selling and administrative expense 9.5 years 687.5
Other various various 6.3
Intangible assets     $831.1

Noncontrolling interest reflects a fair value adjustment of $407.9 consisting of $386.7 related to the Diebold Nixdorf AG ordinary shares the Company did not acquire and $21.2 for the pre-existing noncontrolling interests. Noncontrolling interests with certain redemption features, such as put rights that are not within the control of the issuer and are considered redeemable noncontrolling interests.

Goodwill is calculated as the excess of the purchase price over the estimated fair values of the assets acquired and the liabilities assumed from the Acquisition, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The Company has allocated goodwill to its Services, Software and Systems reportable operating segments (refer to note 12).

Net sales, income (loss) from continuing operations before taxes and income (loss) attributable to Diebold Nixdorf, Incorporated from the Acquisition included in the Company’s results for the quarter ended September 30, 2017, are as follows:
 Three Months Ended
September 30, 2017		 
Nine Months Ended
September 30, 2017
Net sales$587.2
 $1,846.6
Income (loss) from continuing operations before taxes$17.9
 $(20.5)
Income (loss) attributable to Diebold Nixdorf, Incorporated$(2.5) $(41.5)

The Acquisition's income (loss) from continuing operations before taxes subsequent to the acquisition date includes purchase accounting pretax charges related to deferred revenue of $9.7 and $30.4, amortization of acquired intangibles of $30.2 and $98.0, and $4.7 and $1.5 depreciation expense as a result of the change in fair value and useful lives for the three and nine months ended September 30, 2017, respectively. The measurement period adjustment include an inventory valuation adjustment of $2.8 and $1.9 for the three and nine months ended September 30. 2017, respectively.

The Company incurred deal-related costs in connection with the Acquisition, of $28.1 and $53.3, which are included in selling, general and administrative expenses for the three and nine months ended September 30, 2016, respectively. No Acquisition-related deal costs have been incurred in 2017.

11
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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)



Unaudited pro forma Information The unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, or the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results that the combined company will experience after the Acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the Acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur related to the Acquisition as part of combining the operations of the companies. The Company's fiscal year ends on December 31 while Diebold Nixdorf AG's fiscal year ends on September 30.

The pro forma information in the table below for the three and nine months ended September 30, 2016 includes unaudited pro forma information that represents the consolidated results of the Company as if the Acquisition occurred as of January 1, 2015:
 Three Months Ended Nine Months Ended
 September 30 September 30
 2016 2016
Net sales$1,292.4
 $3,750.3
Gross profit$294.9
 $913.5
Operating profit$15.8
 $95.3
Net income (loss) attributable to Diebold Nixdorf, Incorporated (1)
$(60.9) $91.3
Net income (loss) attributable to Diebold Nixdorf, Incorporated per share - basic(1)
$(0.81) $1.22
Net income (loss) attributable to Diebold Nixdorf, Incorporated per share - diluted(1)
$(0.80) $1.21
Basic weighted-average shares outstanding75.1
 75.1
Diluted weighted-average shares outstanding75.7
 75.7
(1) Net income (loss) for the three and nine months ended September 30, 2016 includes income from discontinued operations, net of tax of $(4.6) and $143.7, respectively.


The unaudited pro forma information has been adjusted with respect to certain aspects of the Acquisition to reflect the following:

Additional depreciation and amortization expenses that would have been recognized assuming fair value adjustments to the existing Diebold Nixdorf AG assets acquired and liabilities assumed, including intangible assets, fixed assets and expense associated with the valuation of inventory acquired.
Increased interest expense due to additional borrowings to fund the Acquisition.

The pro forma results do not include any anticipated cost synergies or other effects of the planned integration of the acquired business. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the Acquisition been completed as of January 1, 2015, nor are they indicative of the future operating results of the Company.

Note 3: Redeemable Noncontrolling Interests

Changes in redeemable noncontrolling interests were as follows:
 Redeemable Noncontrolling Interests
Balance at December 31, 2016$44.1
Other comprehensive income25.6
Redemption value adjustment32.0
Redemption of shares(2.7)
Reclassification of noncontrolling interest386.7
Balance at September 30, 2017$485.7

12
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)



Subsequent to the closing of the Acquisition, the board of directors of the Company and the supervisory and management boards of Diebold Nixdorf AG, as well as the shareholders of Diebold KGaA and Diebold Nixdorf AG, on September 26, 2016 each approved the proposed the Domination and Profit and Loss Transfer Agreement (DPLTA). The DPLTA became effective by entry in the commercial register at the local court of Paderborn (Germany) on February 14, 2017. As a result, the carrying value of the noncontrolling interest related to the Diebold Nixdorf AG ordinary shares the Company did not acquire of $386.7, which was presented as a component of total equity as of December 31, 2016, was reclassified to redeemable noncontrolling interest during the first quarter of 2017. For the period of time that the DPLTA is effective, the noncontrolling interest related to the Diebold Nixdorf AG ordinary shares the Company did not acquire will remain in redeemable noncontrolling interest and presented outside of equity in the condensed consolidated balance sheets of the Company.

Pursuant to the DPLTA, subject to certain limitations pursuant to applicable law, (i) Diebold KGaA has the ability to issue binding instructions to the management board of Diebold Nixdorf AG, (ii) Diebold Nixdorf AG will transfer all of its annual profits to Diebold KGaA, and (iii) Diebold KGaA will generally absorb all annual losses incurred by Diebold Nixdorf AG. In addition, 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 €3.13 (€2.82 net under the current taxation regime) 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. During 2017, the Company paid $2.7 in cash compensation to redeem Diebold Nixdorf AG ordinary shares in connection with the DPLTA. The ultimate timing and amount of any future cash payments related to the DPLTA are uncertain.

In connection with the Acquisition, the Company assumed pre-existing noncontrolling interests with certain redemption features, such as put rights that are not within the control of the issuer, which are considered redeemable noncontrolling interests. The redeemable noncontrolling interests were recorded at fair value as of the Acquisition date by applying the income approach using unobservable inputs for projected cash flows and a discount rate, which are considered Level 3 inputs. The Company adjusts the redeemable noncontrolling interest to redemption value (which approximates fair value) at each balance sheet date with changes recognized as an adjustment to additional paid-in capital. In the event the historical cost of the redeemable noncontrolling interest, which represents initial cost, adjusted for contributions, distributions and the allocation of profits or losses, is in excess of estimated fair value, the Company records the redeemable noncontrolling interest at historical cost. The ultimate amount and timing of any future cash payments related to the put rights are uncertain.


13
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 4: Earnings (Loss) Per Share


Basic earnings (loss)loss per share is based on the weighted-average number of common shares outstanding. Diluted earnings (loss)loss per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing earnings (loss)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 were deferred by the employee.employees. The Company calculated basic and diluted earnings (loss)loss per share under both the treasury stock method and the two-class method. For the three and nine months ended September 30, 2017March 31, 2023 and 2016,2022, there waswere no impactdifferences in the loss per share amounts calculated underusing the two methods. Accordingly, the treasury stock method is disclosed.disclosed below; however, because the Company is in a net loss position, dilutive shares of 2.1 and 1.4 for the three months ended March 31, 2023 and 2022, respectively, are excluded from the shares used in the computation of diluted loss per share.


The following table represents amounts used in computing earnings (loss)loss per share and the effect on the weighted-average number of shares of dilutive potential common shares:
Three months ended
March 31,
20232022
Numerator
Loss used in basic and diluted loss per share
Net loss$(111.5)$(183.9)
Net loss attributable to noncontrolling interests(0.4)(0.8)
Net loss attributable to Diebold Nixdorf, Incorporated$(111.1)$(183.1)
Denominator
Weighted-average number of common shares used in basic and diluted loss per share (1)
79.3 78.7 
Net loss attributable to Diebold Nixdorf, Incorporated
Basic and diluted loss per share$(1.40)$(2.33)
(1)Shares of 2.2 and 4.0 for the three months ended March 31, 2023 and 2022, respectively, are excluded from the computation of diluted loss per share because the effects are anti-dilutive, irrespective of the net loss position.


  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Numerator        
Income (loss) used in basic and diluted earnings (loss) per share        
Income (loss) from continuing operations, net of tax $(28.8) $(97.2) $(104.6) $(97.3)
Net income attributable to noncontrolling interests 6.6
 0.5
 20.2
 1.6
Loss before discontinued operations, net of tax (35.4) (97.7) (124.8) (98.9)
Income (loss) from discontinued operations, net of tax —
 (4.6) —
 143.7
Net income (loss) attributable to Diebold Nixdorf, Incorporated $(35.4) $(102.3) $(124.8) $44.8
Denominator        
Weighted-average number of common shares used in basic earnings (loss) per share 75.5
 70.9
 75.4
 67.0
Effect of dilutive shares (1)
 —
 —
 —
 0.6
Weighted-average number of shares used in diluted earnings (loss) per share 75.5
 70.9
 75.4
 67.6
Basic earnings (loss) per share        
Loss from continuing operations, net of tax $(0.47) $(1.38) $(1.66) $(1.48)
Income (loss) from discontinued operations, net of tax —
 (0.06) —
 2.15
Net income (loss) attributable to Diebold Nixdorf, Incorporated $(0.47) $(1.44) $(1.66) $0.67
Diluted earnings (loss) per share        
Loss from continuing operations, net of tax $(0.47) $(1.38) $(1.66) $(1.46)
Income (loss) from discontinued operations, net of tax —
 (0.06) —
 2.12
Net income (loss) attributable to Diebold Nixdorf, Incorporated $(0.47) $(1.44) $(1.66) $0.66
         
Anti-dilutive shares        
Anti-dilutive shares not used in calculating diluted weighted-average shares 2.8
 2.1
 2.6
 2.2
(1)
Incremental shares of 0.8 and 0.6 shares for the three months ended September 30, 2017 and 2016, respectively, and 0.7 shares for the nine months ended September 30, 2017, were excluded from the computation of diluted earnings (loss) per share because their effect is anti-dilutive due to the net loss attributable to Diebold Nixdorf, Incorporated.


14
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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 5: Equity3: Income Taxes


The following table presents changes in shareholders' equity attributable to Diebold Nixdorf, Incorporated andeffective tax rate on the noncontrolling
interests:
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Diebold Nixdorf, Incorporated shareholders' equity        
Balance at beginning of period $587.2
 $578.3
 $591.4
 $412.4
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated (22.5) (107.0) 17.1
 88.7
Common shares —
 12.4
 0.7
 12.8
Additional capital (1)
 15.4
 271.6
 (9.3) 281.4
Treasury shares (0.3) (0.1) (4.8) (2.1)
Dividends paid (7.6) (19.0) (22.9) (57.0)
Balance at end of period $572.2
 $736.2
 $572.2
 $736.2
         
Noncontrolling interests        
Balance at beginning of period $37.5
 $23.7
 $433.4
 $23.1
Comprehensive income attributable to noncontrolling interests, net 8.4
 386.9
 23.7
 387.5
Reclassification to redeemable noncontrolling interest —
 —
 (386.7) —
Reclassification of guaranteed dividend to accrued liabilities (6.4) —
 (18.1) —
Distributions to noncontrolling interest holders —
 —
 (12.8) —
Balance at end of period $39.5
 $410.6
 $39.5
 $410.6
(1)
The decrease for the nine months ended September 30, 2017 is primarily attributable to the redemption value adjustment to the redeemable noncontrolling interest.

Note 6: Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table summarizes the changes in the Company’s AOCI, net of tax, by componentloss from continuing operations was (23.4) percent for the three months ended September 30, 2017:
  Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2017 $(123.7) $(2.3) $5.7
 $(92.3) $0.3
 $(212.3)
Other comprehensive income (loss) before reclassifications (1)
 14.1
 (2.4) 0.3
 —
 —
 12.0
Amounts reclassified from AOCI —
 —
 —
 1.0
 —
 1.0
Net current-period other comprehensive income (loss) 14.1
 (2.4) 0.3
 1.0
 —
 13.0
Balance at September 30, 2017 $(109.6) $(4.7) $6.0
 $(91.3) $0.3
 $(199.3)
(1)Other comprehensive income (loss) before reclassifications withinMarch 31, 2023. The tax provision for the translation component excludes $1.7 of translationthree months ended March 31, 2023 was attributable to noncontrolling interests.the jurisdictional mix of pre-tax income and losses, discrete tax adjustments for current tax expense related to tax return to provision differences and changes in permanent reinvestment assertions. The Company calculated its income tax expense for the three months ended March 31, 2023 using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided in Accounting Standards Codification (ASC) 740-270-30-18. See Note 9 for further details regarding the refinancing and going concern assessment.


The effective tax rate on the loss from continuing operations was (38.3) percent for the three months ended March 31, 2022. The tax provision for the three months ended March 31, 2022 was primarily attributable to the jurisdictional mix of income and loss, in addition to various discrete tax adjustments for uncertain tax positions, expired and forfeited stock compensation, state tax rate benefit, and a change in valuation allowance.

Note 4: Inventories

Major classes of inventories are summarized as follows:
March 31, 2023December 31, 2022
Raw materials and work in process$220.0 $200.6 
Finished goods247.9 229.4 
Total product inventories467.9 430.0 
Service parts171.6 158.1 
Total inventories$639.5 $588.1 

Note 5: Investments

The Company’s investments, primarily held by our subsidiaries in Brazil, consist of certificates of deposit that are recorded at fair value based upon quoted market prices. Changes in fair value are recognized in interest income, determined using the specific identification method, and were minimal. There were no sales of securities or proceeds from the sale of securities prior to the maturity date for the three months ended March 31, 2023 and 2022.

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 enable 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), which are recorded at fair value of the underlying securities and presented within securities and other investments. The related deferred compensation liability is recorded at fair value and presented within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trusts are recognized in interest income.

15

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the three months ended September 30, 2016:
  Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2016 $(161.2) $(2.5) $(0.2) $(105.9) $0.4
 $(269.4)
Other comprehensive income (loss) before reclassifications (1)
 (4.3) (0.4) —
 —
 —
 (4.7)
Amounts reclassified from AOCI —
 —
 —
 (0.1) —
 (0.1)
Net current-period other comprehensive income (loss) (4.3) (0.4) —
 (0.1) —
 (4.8)
Balance at September 30, 2016 $(165.5) $(2.9) $(0.2) $(106.0) $0.4
 $(274.2)
(1)Other comprehensive income (loss) before reclassifications within the translation component excludes $0.1 of translation attributable to noncontrolling interests.

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the nine months ended September 30, 2017:

 Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2017 $(251.2) $(5.7) $4.6
 $(89.3) $0.3
 $(341.3)
Other comprehensive income (loss) before reclassifications (1)
 141.6
 1.0
 1.8
 —
 —
 144.4
Amounts reclassified from AOCI —
 —
 (0.4) (2.0) —
 (2.4)
Net current-period other comprehensive income (loss) 141.6
 1.0
 1.4
 (2.0) —
 142.0
Balance at September 30, 2017 $(109.6) $(4.7) $6.0
 $(91.3) $0.3
 $(199.3)
(1)Other comprehensive income (loss) before reclassifications within the translation component excludes $3.4 of translation attributable to noncontrolling interests.

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the nine months ended September 30, 2016:
  Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2016 $(215.6) $5.0
 $(0.1) $(107.8) $0.4
 $(318.1)
Other comprehensive income (loss) before reclassifications (1)
 50.1
 (7.9) —
 —
 —
 42.2
Amounts reclassified from AOCI —
 —
 (0.1) 1.8
 —
 1.7
Net current-period other comprehensive income (loss) 50.1
 (7.9) (0.1) 1.8
 —
 43.9
Balance at September 30, 2016 $(165.5) $(2.9) $(0.2) $(106.0) $0.4
 $(274.2)
(1)Other comprehensive income (loss) before reclassifications within the translation component excludes $(0.5) of translation attributable to noncontrolling interests.


16
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


The following table summarizes the details about amounts reclassified from AOCI:
  Three Months Ended Nine Months Ended Affected Line Item in the Statement of Operations
  2017 2016 2017 2016 
Interest rate hedges $—
 $—
 $(0.4) $(0.1) Interest expense
Pension and post-retirement benefits:          
Net actuarial loss amortization (net of tax of $(0.5), $(0.3), $0.5 and $(1.3), respectively) 1.0
 (0.1) (2.0) 1.8
 
(1) 
Total reclassifications for the period $1.0
 $(0.1) $(2.4) $1.7
  
(1)
Pension and other post-retirement benefits AOCI components are included in the computation of net periodic benefit cost (refer to note 14).
Note 7: Share-Based Compensation

The Company’s share-based compensation payments to employees are recognized based on their grant-date fair values during the period in which the employee is required to provide services in exchange for the award. Share-based compensation is primarily recognized as a component of selling and administrative expense. Total share-based compensation expense was $8.1 and $4.1 for the three months ended September 30, 2017 and 2016, respectively, and was $23.1 and $14.2 for the nine months ended September 30, 2017 and 2016, respectively.

Options outstanding and exercisable as of September 30, 2017 under the Company’s 1991 Equity and Performance Incentive Plan (as Amended and Restated as of February 12, 2014) (the 1991 Plan) and changes during the nine months ended September 30, 2017 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, 2017 1.7
 $31.98
    
Expired or forfeited (0.2) $39.41
    
Granted 0.8
 $26.57
    
Outstanding at September 30, 2017 2.3
 $29.68
 8 $—
Options exercisable September 30, 2017 1.1
 $32.15
 6 $—
Options vested and expected to vest September 30, 2017 2.2
 $29.80
 8 $—
(1)
The aggregate intrinsic value (the difference between the closing price of the Company’s common shares on the last trading day of the third quarter of 2017 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 September 30, 2017. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common shares.
(2)
The options expected to vest are the result of applying the pre-vesting forfeiture rate assumption to total outstanding non-vested options.


17
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


The following table summarizes information on non-vested RSUs and performance shares relating to employees and non-employee directors for the nine months ended September 30, 2017:
  Number of
Shares		 Weighted-Average
Grant-Date Fair
Value
     
RSUs:    
Non-vested at January 1, 2017 1.2
 $29.50
Forfeited (0.1) $28.87
Vested (0.5) $30.77
Granted 0.7
 $26.82
Non-vested at September 30, 2017 1.3
 $27.73
Performance Shares:    
Non-vested at January 1, 2017 1.2
 $31.77
Forfeited (0.3) $37.40
Vested (0.2) $23.64
Granted 1.8
 $31.32
Non-vested at September 30, 2017 2.5
 $31.38

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 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.

As of September 30, 2017, there were 0.1 non-employee director deferred shares vested and outstanding.

On April 26, 2017, the Company's shareholders approved the Company's 2017 Equity and Performance Incentive Plan (the 2017 Plan), which provides for approximately 4.9 of common shares available for grant. The 2017 Plan is expected to attract and retain directors, officers and employees of the Company by providing incentives and rewards for performance.

Note 8: Income Taxes

The effective tax rate on the loss from continuing operations was 1.7 percent for the three months ended September 30, 2017 and 36.2 percent for the nine months ended September 30, 2017. The tax rate for the three months ended September 30, 2017 reflects an unfavorable adjustment relating to year-to-date changes in the Company's valuation allowance as well as higher than anticipated losses incurred in jurisdictions with a full valuation allowance throughout the period. During the three and nine months ended September 30, 2017, the overall reduction in the tax benefit was offset by the repatriation of foreign earnings and the associated recognition of foreign tax credits as well as favorable discrete items associated with the release of uncertain tax positions due to the expiration of the statute of limitations and reductions in the Company's deferred tax liability relating to undistributed foreign subsidiary earnings.

The effective tax rate on loss from continuing operations was 16.2 percent for the three months ended September 30, 2016 and 26.2 percent for the nine months ended September 30, 2016. The tax rate benefit on the loss for the three months and nine months ended September 30, 2016 was negatively impacted due to the recognition of unfavorable discrete items and expenses relating to the Acquisition.  The tax rate benefit on the loss for the nine months ended September 30, 2016 was also impacted by the favorable release of an uncertain tax position due to the expiration of the statute of limitations. The rates for both periods were negatively impacted by an increase in the deferred tax liability associated with the Company’s undistributed foreign subsidiary earnings.  The non-taxable foreign currency hedges related to the Acquisition generated a loss for the three months ended September 30, 2016 and a net gain for the nine months ended September 30, 2016, resulting in a decrease in the tax benefit for the three months ended September 30, 2016 and an increase in the tax benefit for the nine months ended September 30, 2016.


18
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 9: 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 and proceeds from the sale of available-for-sale securities for the three and nine months ended September 30, 2017 and 2016.

The Company’s investments subject to fair value measurement consist of the following:
Cost BasisUnrealized
Gain		Fair Value
As of March 31, 2023
Short-term investments
Certificates of deposit$16.6 $— $16.6 
Long-term investments
Assets held in a rabbi trust$3.8 $0.4 $4.2 
As of December 31, 2022
Short-term investments
Certificates of deposit$24.6 $— $24.6 
Long-term investments
Assets held in a rabbi trust$4.3 $0.1 $4.4 
Securities and other investments also includes cash surrender value of insurance contracts of $3.2 as of March 31, 2023 and December 31, 2022.
  Cost Basis Unrealized Gain Fair Value
As of September 30, 2017      
Short-term investments      
Certificates of deposit $64.0
 $—
 $64.0
Long-term investments      
Assets held in a rabbi trust $7.7
 $1.4
 $9.1
       
As of December 31, 2016      
Short-term investments      
Certificates of deposit $64.1
 $—
 $64.1
Long-term investments      
Assets held in a rabbi trust $7.9
 $0.6
 $8.5


The Company has certain strategic alliancesnon-consolidated joint ventures that are not consolidated. The Company tests these strategic alliances annually, individuallysignificant subsidiaries and in aggregate, to determine materiality.are accounted for under the equity method of accounting. The Company owns 40.048.1 percent of Inspur (Suzhou) Financial Technology ServiceInformation System Co., Ltd. (Inspur JV) and 43.649.0 percent of Aisino-Wincor Retail & Banking Systems (Shanghai) Co., Ltd. (Aisino JV). 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 methodbusiness with these joint ventures. As of investments. In May 2017,March 31, 2023, the Company announced a strategic partnershiphad accounts receivable and accounts payable balances with Kony Inc. (Kony)these joint ventures of $16.9 and $32.0, 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 is accounted for using the cost methodrespectively. As of accounting.

Securities and other investments also includes a cash surrender value of insurance contracts of $77.4 and $77.8 as of September 30, 2017 and December 31, 2016, respectively. In addition, securities2022, the Company had accounts receivable and other investments includes interest rate swap assets carrying valueaccounts payable balances with these joint ventures of $6.0$18.9 and $8.4 as of September 30, 2017 and December 31, 2016, respectively, which also represents fair value (refer to note 18)$25.7.

Note 10: Allowance for Credit Losses

The following table summarizes the Company’s allowance for credit losses for the nine months ended September 30, 2017 and 2016:
  Finance
Leases		 Notes
Receivable		 Total
Allowance for credit losses      
Balance at January 1, 2017 $0.3
 $4.1
 $4.4
Write-offs (0.1) —
 (0.1)
Balance at September 30, 2017 $0.2
 $4.1
 $4.3
       
Balance at January 1, 2016
$0.5
 $4.1
 $4.6
Provision for credit losses
(0.1) —
 (0.1)
Write-offs
(0.1) —
 (0.1)
Balance at September 30, 2016
$0.3
 $4.1
 $4.4


19
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


There were no significant changes in provision for credit losses, recoveries and write-offs during the nine months ended September 30, 2017 and 2016. As of September 30, 2017, finance leases and notes receivable individually evaluated for impairment were $32.4 and $21.0, respectively, of which $23.4 and $13.3, respectively, relates to the Acquisition, with no provision recorded. As of September 30, 2016, finance leases and notes receivable individually evaluated for impairment were $78.7 and $20.7, respectively, of which $24.3 and $12.2, respectively, relates to the Acquisition. As of September 30, 2017 and December 31, 2016, the Company’s finance lease receivables in Brazil were $1.5 and $26.1, respectively. The decrease is These joint venture related primarily to recurring customer payments for financing arrangements.

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. 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 placedincluded in trade receivables, less allowances for doubtful accounts and accounts payable 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.condensed consolidated balance sheets.


As of September 30, 2017 and December 31, 2016, the recorded investment in past due financing receivables on nonaccrual status was $0.6 and $0.4, respectively, and there were no recorded investments in finance receivables past due 90 days or more and still accruing interest. The recorded investment in impaired notes receivable was $4.0 as of September 30, 2017 and December 31, 2016 and was fully reserved.

The following table summarizes the Company’s aging of past-due notes receivable balances:
  September 30, 2017 December 31, 2016
30-59 days past due $—
 $0.1
60-89 days past due —
 —
> 89 days past due (1)
 4.0
 3.9
Total past due $4.0
 $4.0
(1)
Past due notes receivable balances greater than 89 days are fully reserved.

Note 11: Inventories

Major classes of inventories are summarized as follows:
  September 30, 2017 December 31, 2016
Finished goods $357.0
 $330.5
Service parts 267.8
 235.2
Raw materials and work in process 183.0
 172.0
Total inventories $807.8
 $737.7


20
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 12:6: Goodwill and Other Assets


The Company’s three reportable operating segments are Services, Software and Systems. The Company has allocated goodwill to its Services, Software and Systemsthe following reportable operating segments. segments: Banking and Retail. This is described in further detail in Note 17, and is consistent with how the Chief Executive Officer, the chief operating decision maker (CODM), makes key operating decisions, allocates resources, and assesses the performance of the business.

The changessustained decline in the Company’s stock price and its market capitalization, in addition to the continuing substantial doubt about the Company's ability to continue as a going concern (refer to Note 9) were in combination considered a triggering event indicating that it was possible that the fair value of the reporting units could be less than their carrying amounts, of goodwill within the Company's segments are summarized as follows:
 Services Software Systems Total
Goodwill$452.2
 $—
 $—
 $452.2
Accumulated impairment losses(290.7) —
 —
 (290.7)
Balance at January 1, 2016$161.5
 $—
 $—
 $161.5
Goodwill acquired459.1
 238.7
 184.8
 882.6
Goodwill adjustment(0.5) —
 —
 (0.5)
Currency translation adjustment(20.8) (13.8) (10.7) (45.3)
Goodwill$890.0
 $224.9
 $174.1
 $1,289.0
Accumulated impairment losses(290.7) —
 —
 (290.7)
Balance at December 31, 2016$599.3
 $224.9
 $174.1
 $998.3
Goodwill acquired5.6
 —
 —
 5.6
Goodwill adjustment(1.1) (1.0) (0.8) (2.9)
Currency translation adjustment56.9
 27.1
 20.9
 104.9
Goodwill$951.4
 $251.0
 $194.2
 $1,396.6
Accumulated impairment losses(290.7) —
 —
 (290.7)
Balance at September 30, 2017$660.7
 $251.0
 $194.2
 $1,105.9

In August 2016,including goodwill. Thus, the Company acquired Diebold Nixdorf AG. During the first quarterperformed an interim quantitative goodwill impairment test as of 2017, in connection with the businessMarch 31, 2023 using a combination agreement related to the Acquisition, the Company realigned its reportable operating segment to its lines of business to drive greater efficiency and further improve customer service.

The $5.6 acquired goodwill from Moxx and Visio primarily relates to anticipated synergies achieved through increased scale and higher utilization of the service organization.

income valuation and market approach methodologies. The acquired Diebold Nixdorf AG goodwill is primarily the result of anticipated synergies achieved through increased scale, a streamlined portfolio of products and solutions, higher utilizationdetermination of the service organization, workforce rationalization in overlapping regions and shared back office resources. The Company also expects, after completionfair value of the business combination and related integration, to generate strong free cash flow, which would be used to make investments in innovative software and solutions and reduce debt. The Company has allocated goodwill to its Services, Software and Systems reportable operating segments. The goodwill associated with the Acquisition is not deductible for income tax purposes.

In connection with the recasting from geographical regions to lines of business reportable operating segments, the Company has identified nine reporting units 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 are summarized below.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.

No impairment resulted from the interim quantitative goodwill impairment test. As of our interim impairment testing date of March 31, 2023, the indicated fair value was in excess of carrying value for both the Banking and Retail segments by approximately 43 percent and 34 percent, respectively.

ServicesSoftwareSystems
EMEAEMEAEMEA
AmericasAmericasAmericas
APAPAP

There have been no impairment indicators identified during the nine months ended September 30, 2017.


21
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)




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.

The changes in the carrying amount of goodwill for the three months ended March 31, 2023 are as follows:

BankingRetailTotal
Goodwill$903.6 $269.6 $1,173.2 
Accumulated impairment(413.7)(57.2)(470.9)
Balance at January 1, 2023$489.9 $212.4 $702.3 
Currency translation adjustment(0.1)— (0.1)
Goodwill$903.5 $269.6 $1,173.1 
Accumulated impairment(413.7)(57.2)(470.9)
Balance at March 31, 2023$489.8 $212.4 $702.2 

The following summarizes information on intangible assets by major category:
March 31, 2023December 31, 2022
Weighted-average remaining useful livesGross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying Amount		Accumulated
Amortization		Net
Carrying
Amount
Customer relationships, net3.0 years$675.3 $(475.4)$199.9 $662.3 $(448.7)$213.6 
Capitalized Software Development2.4 years253.3 (209.6)43.7 245.2 (202.7)42.5 
Development costs non-software0.4 years49.7 (49.6)0.1 48.7 (48.7)— 
Other intangibles4.7 years49.3 (47.9)1.4 48.7 (47.2)1.5 
Other intangible assets, net352.3 (307.1)45.2 342.6 (298.6)44.0 
Total$1,027.6 $(782.5)$245.1 $1,004.9 $(747.3)$257.6 
 September 30, 2017 December 31, 2016
 Gross
Carrying
Amount		 Accumulated
Amortization		 Net
Carrying
Amount		 Gross
Carrying Amount		 Accumulated
Amortization		 Net
Carrying
Amount
Internally-developed software$184.0
 $(86.9) $97.1
 $151.0
 $(53.2) $97.8
Development costs non-software53.9
 (30.8) 23.1
 48.4
 (9.7) 38.7
Customer relationships727.7
 (86.1) 641.6
 621.7
 (25.4) 596.3
Other intangibles87.7
 (56.0) 31.7
 85.3
 (45.2) 40.1
Total$1,053.3
 $(259.8) $793.5
 $906.4
 $(133.5) $772.9


Costs incurred for the development of external-use software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. These costs are included within other assets and are amortized on a straight-line basis over the estimated useful lives ranging from three to five years. Amortization begins when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility or after general release are expensed as incurred. The Company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenue. If future revenue does not support the unamortized program costs, the amount by which the unamortized capitalized cost of a software product exceeds the net realizable value is impaired.
Amortization expense on
The following table identifies the activity relating to total capitalized software of $8.6development:

20232022
Beginning balance as of January 1$42.5 $43.2 
Capitalization5.4 7.6 
Amortization(4.7)(5.3)
Other0.5 (0.9)
Ending balance as of March 31$43.7 $44.6 

The Company's total amortization expense, excluding amounts related to deferred financing costs, was $23.3 and $6.7 was included in service and software cost of sales$24.3 for the three months ended September 30, 2017March 31, 2023 and 2016, respectively,2022, respectively.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and $27.9per share amounts)

Note 7: Product Warranties

The Company provides its customers a standard manufacturer’s warranty and $12.5records, 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.

Changes in the nine months ended September 30, 2017Company’s warranty liability balance are illustrated in the following table:
20232022
Beginning balance as of January 1$28.3 $37.2 
Current period accruals9.1 4.9 
Current period settlements(10.2)(5.3)
Currency translation adjustment0.7 0.5 
Ending balance as of March 31$27.9 $37.3 

Note 8: Restructuring

In the second quarter of 2022, the Company announced a new initiative to streamline operations, drive efficiencies and 2016, respectively. The Company's total amortization expense, including deferred financing costs, was $42.7 and $24.8 fordigitize processes, targeting annualized cost savings of more than $150.0 by the end of 2023. During the three months ended September 30, 2017March 31, 2023, the Company incurred $15.0 of restructuring and 2016, respectively,transformation costs. During the quarter $4.8 that was accrued for future severance payments under an ongoing severance benefit program, while the remainder of the expenses incurred primarily relates to transitioning personnel and $121.6 and $34.2 for the nine months ended September 30, 2017 and 2016, respectively. The year-over-year increaseconsultant fees in amortization expense was primarily relatedrelation to the identifiable intangiblestransformation process.



The following table summarizes the impact of the Company’s restructuring and transformation charges on the consolidated statements of operations:
Three months ended
March 31,
 20232022
Cost of sales – services$0.6 $— 
Cost of sales – products0.3 — 
Selling and administrative expense13.0 — 
Research, development and engineering expense0.6 — 
Loss on sale of assets, net0.5 — 
Total$15.0 $— 


The following table summarizes the Company’s severance accrual balance and related activity:
20232022
Beginning balance as of January 1$44.2 $35.3 
Severance accruals4.8 — 
Liabilities acquired— — 
Payouts/Settlements(28.2)(11.6)
Other0.3 (0.3)
Ending balance as of March 31$21.1 $23.4 


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to the Acquisition.Condensed Consolidated Financial Statements (continued)

(unaudited)
(in millions, except share and per share amounts)

Note 13:9: Debt


Outstanding debt balances were as follows:
March 31, 2023December 31, 2022
Notes payable – current
Uncommitted lines of credit$3.9 $0.9 
FILO Facility58.9 — 
2023 Term Loan B Facility - USD12.8 12.9 
2023 Term Loan B Facility - Euro5.2 5.1 
2025 New Term Loan B Facility - USD5.3 5.3 
2025 New Term Loan B Facility - EUR1.1 1.1 
Other0.3 1.7 
$87.5 $27.0 
Short-term deferred financing fees(3.8)(3.0)
$83.7 $24.0 
Long-term debt
2024 Senior Notes72.1 72.1 
2025 Senior Secured Notes - USD2.7 2.7 
2025 Senior Secured Notes - EUR4.8 4.7 
2026 Asset Backed Loan (ABL)151.7 182.0 
2025 New Term Loan B Facility - USD528.1 529.5 
2025 New Term Loan B Facility - EUR96.7 95.5 
2026 2L Notes333.6 333.6 
2025 New Senior Secured Notes - USD718.1 718.1 
2025 New Senior Secured Notes - EUR387.1 379.7 
2025 Superpriority Term Loans400.6 400.6 
Other5.3 6.3 
$2,700.8 $2,724.8 
Long-term deferred financing fees(129.1)(139.0)
$2,571.7 $2,585.8 

On December 29, 2022 (the Settlement Date), the Company completed a series of transactions with certain key financial stakeholders to refinance certain debt with near-term maturities and provide the Company with new capital. The transactions and related material definitive agreements entered into by the Company are described below.

2024 Senior Notes

On the Settlement Date, the Company completed a private exchange offer and consent solicitation with respect to the outstanding 8.50% Senior Notes due 2024, which included (i) a private offer to certain eligible holders to exchange any and all 2024 Senior Notes for units (the Units) consisting of (a) new 8.50%/12.50% Senior Secured PIK Toggle Notes due 2026 issued by the Company (the 2L Notes) and (b) a number of warrants (the New Warrants and, together with the Units and the New Notes, the New Securities) to purchase common shares, par value $1.25 per share, of the Company (Common Shares) and (ii) a related consent solicitation to adopt certain proposed amendments to the indenture governing the 2024 Senior Notes (the 2024 Senior Notes Indenture) to eliminate certain of the covenants, restrictive provisions and events of default intended to protect holders, among other things, from such indenture (collectively, the 2024 Exchange Offer and Consent Solicitation).

Pursuant to the 2024 Exchange Offer and Consent Solicitation, the Company accepted $327.9 in aggregate principal amount of the 2024 Senior Notes (representing 81.97% of the aggregate principal amount outstanding of the 2024 Senior Notes) tendered

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

  September 30, 2017 December 31, 2016
Notes payable    
Uncommitted lines of credit $24.2
 $9.4
Term Loan A Facility 21.6
 17.3
Delayed Draw Term Loan A Facility 15.6
 —
Term Loan B Facility - USD 4.8
 10.0
Term Loan B Facility - Euro 4.9
 3.7
European Investment Bank —
 63.1
Other 0.8
 3.4
  $71.9
 $106.9
Long-term debt    
Revolving Facility $120.0
 $—
Term Loan A Facility 184.0
 201.3
Delayed Draw Term Loan A Facility 231.3
 —
Term Loan B Facility - USD 467.9
 787.5
Term Loan B Facility - Euro 482.9
 363.5
2024 Senior Notes 400.0
 400.0
Other 1.2
 0.8
  1,887.3
 1,753.1
Long-term deferred financing fees (52.8) (61.7)
  $1,834.5
 $1,691.4
for exchange and issued $333.6 in aggregate principal amount of Units consisting of $333.6 in aggregate principal amount of 2L Notes and 15,813,847 New Warrants to purchase up to 15,813,847 Common Shares. After consummation of the 2024 Exchange Offer and Consent Solicitation, $72.1 of 2024 Senior Notes remained outstanding. The Company is required to raise equity capital prior to the maturity date of the 2024 Senior Notes in an amount necessary to repurchase, redeem, prepay or pay in full any outstanding 2024 Senior Notes in excess of $20.0 (such 2024 Senior Notes in excess of $20.0 the Excess Stub Notes).


Each New Warrant will initially represent the right to purchase one Common Share, at an exercise price of $0.01 per share. The New Warrants will, in the aggregate and upon exercise, be exercisable for up to 15,813,847 Common Shares (representing 19.99% of the Common Shares outstanding on the business day immediately preceding the Settlement Date), subject to adjustment. Unless earlier cancelled in accordance with their terms, New Warrants can be exercised at any time on and after April 1, 2024 and prior to December 30, 2027 (or, if such day is not a business day, the next succeeding day that is a business day). No cash will be payable by a warrantholder in respect of the exercise price for a New Warrant upon exercise.

If a Termination Event (as defined in the agreement governing the Units) occurs with respect to any Units prior to April 1, 2024, the New Warrants forming part of such Units will automatically terminate and become void without further legal effect and will be cancelled for no further consideration.

The 2L Notes are the Company’s senior secured obligations and are guaranteed by the Company’s material subsidiaries in the United States, Belgium, Canada, Germany, France, Italy, the Netherlands, Poland, Spain, Sweden and the United Kingdom (the Specified Jurisdictions), in each case, subject to agreed guaranty and security principles and certain exclusions. The obligations of the Company and the guarantors are secured (i) on a second-priority basis by certain Non-ABL Priority Collateral (as defined below) held by the Company and those guarantors that are organized in the United States, (ii) on a third-priority basis by certain other Non-ABL Priority Collateral held by the Company and the guarantors and (iii) on a fourth-priority basis by the ABL Priority Collateral (as defined below).

The 2L Notes will mature on October 15, 2026 and bear interest at a fixed rate of 8.50% per annum through July 15, 2025, after which interest will accrue at the rate of 8.50% (if paid in cash) or 12.50% (if paid in the form of PIK Interest (as defined in the Indenture governing the 2L Notes (the 2L Notes Indenture)), subject to the applicable interest period determination election made for each applicable interest period after such date.

Interest on the 2L Notes will be payable on January 15 and July 15 of each year, commencing on July 15, 2023. Interest will accrue from the Settlement Date.

The 2L Notes will be redeemable at the Company’s option, in whole or in part, at any time at 100% of their principal amount, together with accrued and unpaid interest, subject to certain restrictions.

Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to repurchase some or all of the 2L Notes at 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions. Further, if the Company or its subsidiaries sell assets, under certain circumstances, the Company will be required to use the net proceeds from such sales to make an offer to purchase 2L Notes at an offer price in cash in an amount equal to 100% of the principal amount of the 2L Notes plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions.

The 2L Notes Indenture contains covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and guarantee indebtedness, pay dividends, prepay, redeem or repurchase certain debt, incur liens and to merge, consolidate or sell assets.

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



2025 Senior Secured Notes

On the Settlement Date, the Company also completed the private exchange offers and consent solicitations with respect to the outstanding 9.375% Senior Secured Notes due 2025 issued by the Company (the 2025 USD Senior Notes) and the outstanding 9.000% Senior Secured Notes due 2025 issued by Diebold Nixdorf Dutch Holding B.V. (the Dutch Issuer), a direct and wholly owned subsidiary of the Company (the 2025 EUR Senior Notes, and together with the 2025 USD Senior Notes, the 2025 Senior Notes), which included (i) private offers to certain eligible holders to exchange (a) any and all 2025 USD Senior Notes for new senior secured notes (the New 2025 USD Senior Notes) having the same terms as the 2025 USD Senior Notes, other than the issue date, the first interest payment date, the first date from which interest will accrue and other than with respect to CUSIP and ISIN numbers, and (b) any and all 2025 EUR Senior Notes for new senior secured notes (the New 2025 EUR Senior Notes and, together with the New 2025 USD Senior Notes, the New 2025 Notes) having the same terms as the 2025 EUR Senior Notes, other than the issue date, the first interest payment date, the first date from which interest will accrue and other than with respect to ISIN numbers and common codes, and (ii) related consent solicitations to enter into supplemental indentures with respect to (a) the indenture governing the 2025 USD Senior Notes, dated as of July 20, 2020 (the 2025 USD Senior Notes Indenture), and (b) the indenture governing the 2025 EUR Senior Notes, dated as of July 20, 2020 (the 2025 EUR Senior Notes Indenture and, together with the 2025 USD Senior Notes Indenture, the 2025 Senior Notes Indentures), in order to amend certain provisions of the 2025 Senior Notes Indentures to, among other things, permit the December 2022 Refinancing Transactions (defined below) set forth in the Transaction Support Agreement, dated as of October 20, 2022 (as amended, the Transaction Support Agreement), among the Company, certain of its subsidiaries and certain creditors (collectively, the 2025 Exchange Offers and Consent Solicitations and, together with the 2024 Exchange Offer and Consent Solicitation, the Exchange Offers and Consent Solicitations).

The 2025 Exchange Offers and Consent Solicitations were completed on the terms and subject to the conditions set forth in the Offering Memorandum and Consent Solicitation Statement, dated as of November 28, 2022 (as amended, the 2025 Offering Memorandum), and the related eligibility letter. Pursuant to the 2025 Exchange Offers and Consent Solicitations, the Company accepted $697.3 in aggregate principal amount of the 2025 USD Senior Notes (representing 99.61% of the aggregate principal amount of the outstanding 2025 USD Senior Notes) tendered for exchange and issued $718.1 in aggregate principal amount of the New 2025 USD Senior Notes. The Dutch Issuer accepted €345.6 in aggregate principal amount of the 2025 EUR Senior Notes (representing 98.75% of the aggregate principal amount of the outstanding 2025 EUR Senior Notes) tendered for exchange and issued €356.0 aggregate principal amount of the New 2025 EUR Senior Notes. In addition, eligible holders received payment in cash for accrued and unpaid interest on the 2025 Senior Notes that were accepted for exchange.

The New 2025 USD Senior Notes are the Company’s senior secured obligations. The New 2025 USD Senior Notes and the 2025 USD Senior Notes that remain outstanding are guaranteed by the Company’s material subsidiaries in the Specified Jurisdictions, in each case, subject to agreed guaranty and security principles and certain exclusions. The obligations of the Company and the guarantors are secured (i) on a first-priority basis, ranking pari passu with the Superpriority Facility (as defined below), the 2025 EUR Senior Notes, the New 2025 EUR Senior Notes and the Existing Term Loans (as defined below) (excluding released liens), by certain Non-ABL Priority Collateral held by the Company and those guarantors that are organized in the United States, (ii) on a second-priority basis by certain other Non-ABL Priority Collateral held by the Company and the guarantors and (iii) on a third-priority basis by the ABL Priority Collateral.

The New 2025 USD Senior Notes will mature on July 15, 2025 and bear interest at a rate of 9.375% per year from the Settlement Date.

Interest on the New 2025 USD Senior Notes will be payable on January 15 and July 15 of each year, commencing on January 15, 2023.

The New 2025 USD Senior Notes will be redeemable at the Company’s option, in whole or in part, upon not less than 15 nor more than 60 days’ notice mailed or otherwise sent to each holder, at 104.688% of their principal amount prior to July 15, 2023, 102.344% prior to July 15, 2024 and 100% thereafter, together with accrued and unpaid interest, if any, to, but excluding, the date of redemption, subject to certain restrictions.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to repurchase some or all of the New 2025 USD Senior Notes at 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions. Further, if the Company or its subsidiaries sell assets, under certain circumstances, the Company will be required to use the net proceeds from such sales to make an offer to purchase the New 2025 USD Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the New 2025 USD Senior Notes plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions.

The New 2025 EUR Senior Notes are the Dutch Issuer’s senior secured obligations. The New 2025 EUR Senior Notes and the 2025 EUR Senior Notes that remain outstanding are guaranteed by the Company and the Company’s material subsidiaries (other than the Dutch Issuer) in the Specified Jurisdictions, in each case, subject to agreed guaranty and security principles and certain exclusions. The obligations of the Dutch Issuer and the guarantors are secured (i) on a first-priority basis, ranking pari passu with the Superpriority Facility, the 2025 USD Senior Notes, the New 2025 USD Senior Notes and the Existing Term Loans (excluding released liens), by certain Non-ABL Priority Collateral held by the Company and those guarantors that are organized in the United States, (ii) on a second-priority basis by certain other Non-ABL Priority Collateral held by the Company and the guarantors and (iii) on a third-priority basis by the ABL Priority Collateral.

The New 2025 EUR Senior Notes will mature on July 15, 2025 and bear interest at a rate of 9.000% per year from the Settlement Date.

Interest on the New 2025 EUR Senior Notes will be payable on January 15 and July 15 of each year, commencing on January 15, 2023.

The New 2025 EUR Senior Notes will be redeemable at the Dutch Issuer’s option, in whole or in part, upon not less than 15 nor more than 60 days’ notice mailed or otherwise sent to each holder, at 104.500% of their principal amount prior to July 15, 2023, 102.250% prior to July 15, 2024 and 100% thereafter, together with accrued and unpaid interest, if any, to, but excluding, the date of redemption, subject to certain restrictions.

Upon the occurrence of specific kinds of changes of control, the Dutch Issuer will be required to make an offer to repurchase some or all of the New 2025 EUR Senior Notes at 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions. Further, if the Dutch Issuer or its subsidiaries sell assets, under certain circumstances, the Dutch Issuer will be required to use the net proceeds from such sales to make an offer to purchase the New 2025 EUR Senior Notes at an offer price in cash in an amount equal to 100% of the principal amount of the New 2025 EUR Senior Notes plus accrued and unpaid interest to, but excluding, the repurchase date, subject to certain restrictions.

The Twelfth Amendment to the Existing Credit Agreement

On the Settlement Date, the Company entered into a twelfth amendment (the Twelfth Amendment) to the Credit Agreement, dated as of November 23, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Existing Credit Agreement).

The Twelfth Amendment, among other things, (i) permits the Exchange Offers and Consent Solicitations, the Term Loan Exchange (as defined below), the Superpriority Facility, the ABL Facility and certain other related transactions (together, the December 2022 Refinancing Transactions), (ii) removes substantially all negative covenants and mandatory prepayment provisions from the Existing Credit Agreement and (iii) directs the collateral agent under the Existing Credit Agreement to release the liens on certain current-asset collateral securing the ABL Facility on a first-priority basis (the ABL Priority Collateral) and certain other collateral securing the Company’s obligations under the Existing Credit Agreement and the Company’s existing subsidiary guarantors’ obligations under the related guarantees (in each case, to the extent permitted, including under applicable law).

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

Superpriority Facility

On the Settlement Date, the Company and Diebold Nixdorf Holding Germany GmbH (the Superpriority Borrower) entered into a Credit Agreement (the Superpriority Credit Agreement), providing for a superpriority secured term loan facility of $400 (the Superpriority Facility). On the Settlement Date, the Superpriority Borrower borrowed the full $400 of term loans available (the Superpriority Term Loans).

The proceeds of the borrowing under the Superpriority Facility were or will be used, respectively, (i) on the Settlement Date, to repay the New Term Loans (as defined below) in an amount equal to 15% of the principal amount of Existing Term Loans (as defined below) that participated in the Term Loan Exchange (the Initial New Term Loan Paydown), (ii) on December 31, 2023, to repay the New Term Loans in an amount equal to 5% of the principal amount (at the time of the Term Loan Exchange) of Existing Term Loans that participated in the Term Loan Exchange, subject to satisfaction of certain liquidity conditions, (iii) solely in the event that the repayment in (ii) is not made as a result of such liquidity conditions not being satisfied, on December 31, 2024, to repay the New Term Loans in an amount equal to 5% of the principal amount (at the time of the Term Loan Exchange) of Existing Term Loans that participated in the Term Loan Exchange, subject to satisfaction of the same liquidity condition measured on a pro forma basis on December 31, 2024 and (iv) for general corporate purposes (excluding making payments on any other funded indebtedness).

The Superpriority Term Loans will mature on July 15, 2025. The Superpriority Term Loans bear interest equal to (i) in the case of Term Benchmark Loans (as defined in the Superpriority Credit Agreement), the Adjusted Term SOFR Rate (as defined in the Superpriority Credit Agreement and subject to a 4.0% floor) plus a 0.10% credit spread adjustment plus an applicable margin of 6.40% and (ii) in the case of Floating Rate Loans (as defined in the Superpriority Credit Agreement), the Alternate Base Rate (as defined in the Superpriority Credit Agreement and subject to a 5.0% floor) plus an applicable margin of 5.40%. Interest accrued on the Superpriority Loans is payable (i) in the case of Term Benchmark Loans, on the last day of the applicable Interest Period (as defined in the Superpriority Credit Agreement) (provided that, if the Interest Period is longer than three months, interest is also payable on the last day of each three-month interval during such Interest Period), on any date on which the Term Benchmark Loans are repaid, and at maturity, and (ii) in the case of Floating Rate Loans, on the last business day of each March, June, September and December occurring after the Settlement Date, beginning with March 31, 2023, and at maturity.

Pursuant to the Transaction Support Agreement, the Superpriority Borrower paid a fee to the lenders under the Superpriority Facility in an amount equal to 6.40% per annum of such lenders’ commitments (the Ticking Fee), which began accruing on December 20, 2022 until the Settlement Date. The total amount of the Ticking Fee paid to all lenders was $0.6, and was paid in the form of additional Superpriority Term Loans on the Settlement Date.

The obligations of the Superpriority Borrower under the Superpriority Facility are guaranteed, subject to certain exclusions and agreed guaranty and security principles, by the Company and the Company’s material subsidiaries in the Specified Jurisdictions and secured (i) on a first-priority basis by substantially all assets (subject to agreed guaranty and security principles and certain exclusions) other than the ABL Priority Collateral (the Non-ABL Priority Collateral) held by the Superpriority Borrower and those guarantors that are organized outside the United States and certain Non-ABL Priority Collateral held by the Company and those guarantors that are organized in the United States, (ii) on a first-priority basis, ranking pari passu with the New Term Loans, the 2025 Senior Notes, the New 2025 Notes and the Existing Term Loans (excluding released liens), by certain Non-ABL Priority Collateral held by the Company and those guarantors that are organized in the United States and (iii) on a second-priority basis by the ABL Priority Collateral.

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

The Superpriority Borrower may prepay the Superpriority Term Loans at any time; provided that voluntary prepayments and certain mandatory prepayments made (i) prior to December 29, 2024 must be accompanied by a customary make-whole premium and (ii) on or after December 29, 2024 must be accompanied by a premium of 5.00% of the aggregate principal amount of the Superpriority Term Loans being prepaid. The Superpriority Credit Agreement additionally provides that the Superpriority Borrower is required to prepay the Superpriority Term Loans in certain circumstances, including (i) in connection with asset sales, where mandatory prepayments must be made with the proceeds of such asset sales and accompanied by a premium of 1.00% of the aggregate principal amount of the loans being prepaid, and (ii) in connection with change of control and certain other transformative transactions, where prepayments must be accompanied by a premium of 5.00% of the aggregate principal amount of the loans being prepaid. Amounts borrowed and repaid under the Superpriority Facility may not be reborrowed.

The Superpriority Credit Agreement contains affirmative and negative covenants customary for facilities of its type, including, but not limited to, delivery of financial information, limitations on mergers, consolidations and fundamental changes, limitations on sales of assets, limitations on investments and acquisitions, limitations on liens, limitations on transactions with affiliates, limitations on indebtedness, limitations on negative pledge clauses, limitations on restrictions on subsidiary distributions, limitations on restricted payments and limitations on certain payments of indebtedness. The Superpriority Credit Agreement contains restrictions on making repayments of certain junior indebtedness prior to their maturity, subject to certain specified repayment conditions.

The Superpriority Credit Agreement provides for certain customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts, breach of covenants, cross default and cross acceleration to material indebtedness, voluntary and involuntary bankruptcy or insolvency proceedings, unpaid material judgments and change of control.

Term Loans

On December 16, 2022, the Company made an offer to (i) each of the lenders (collectively, the Existing Dollar Term Lenders) holding certain dollar term loans (the Existing Dollar Term Loans) under the Existing Credit Agreement providing for the opportunity to exchange all (but not less than all) of the principal amount of its Existing Dollar Term Loans for the same principal amount of Dollar Term Loans (the New Dollar Term Loans) as defined in and made pursuant to the New Term Loan Credit Agreement (as defined below), plus the Transaction Premium (as defined in the Twelfth Amendment), and (ii) each of the lenders (collectively, the Existing Euro Term Lenders and together with the Existing Dollar Term Lenders, the Existing Term Lenders) holding certain euro term loans (the Existing Euro Term Loans and together with the Existing Dollar Term Loans, the Existing Term Loans; the loan facility for the Existing Term Loans, the Existing Term Loan Facility) providing for the opportunity to exchange all (but not less than all) of the principal amount of its Existing Euro Term Loans for either (a) the same principal amount of Euro Term Loans (the New Euro Term Loans and together with the New Dollar Term Loans, the New Term Loans; the loan facility for the New Term Loans, the New Term Loan Facility) as defined in and made pursuant to the New Term Loan Credit Agreement or (b) the same principal amount of New Dollar Term Loans (with the exchange rate used for such conversion of the existing principal amount denominated in euros to the equivalent new principal amount denominated in dollars determined by reference to the WMR 4pm London Mid Spot Rate published by Refinitiv at 4:00 p.m. (London Time) on the date that was two business days prior to the Settlement Date), in each case, plus the Transaction Premium (collectively, clauses (i) and (ii), the Term Loan Exchange Offer and the exchange pursuant to the Term Loan Exchange Offer, the Term Loan Exchange).

On the Settlement Date, the Company completed the Term Loan Exchange whereby approximately 96.6% of the aggregate principal amount of Existing Dollar Term Loans and approximately 98.6% of the aggregate principal amount of Existing Euro Term Loans, were exchanged into $626.0 (including a transaction premium of $18.2) in aggregate principal amount of New Dollar Term Loans, and €106.0 (including a transaction premium of € 3.1) in aggregate principal amount of New Euro Term Loans.

Substantially concurrently with the completion of the Term Loan Exchange Offer, the Company prepaid $91.2 in aggregate principal amount of New Dollar Term Loans and €15.4 in aggregate principal amount of New Euro Term Loans, pursuant to the Initial New Term Loan Paydown and consistent with the Transaction Support Agreement. On December 31, 2023, the Company will prepay $30.4 in aggregate principal amount of the New Dollar Term Loans and €5.1 in aggregate principal amount of the New Euro Term Loans, subject to satisfaction of certain liquidity conditions.

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)


As a result of the Term Loan Exchange, the Company’s obligations in respect of the Existing Term Loans of each lender who participated in the Term Loan Exchange were discharged and deemed satisfied in full, and each such lender’s commitments with respect to the Existing Term Loans were canceled.

The terms of the New Term Loans are governed by a Credit Agreement (the New Term Loan Credit Agreement), dated as of the Settlement Date, among the Company the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and GLAS America LLC, as collateral agent, which provides that the New Term Loans will mature on July 15, 2025.

The New Term Loans bear interest at a rate equal to (i) in the case of Term Benchmark Loans (as defined in the New Term Loan Credit Agreement), (a) for New Dollar Term Loans, the Adjusted Term SOFR Rate (as defined in the New Term Loan Credit Agreement and subject to a 1.50% floor) plus a 0.10% credit spread adjustment plus an applicable margin of 5.25% and (b) for New Euro Term Loans, the Adjusted EURIBOR Rate (as defined in the New Term Loan Credit Agreement and subject to a 0.50% floor) plus an applicable margin of 5.50% and (ii) in the case of Floating Rate Loans (as defined in the New Term Loan Credit Agreement), the Alternate Base Rate (as defined in the New Term Loan Credit Agreement and subject to a 2.50% floor) plus an applicable margin of 4.25%. Interest accrued on the New Term Loans is payable (i) in the case of Term Benchmark Loans, on the last day of the applicable Interest Period (as defined in the New Term Loan Credit Agreement) (provided that, if the Interest Period is longer than three months, interest is also payable on the last day of each three month interval during such Interest Period), on any date on which the Term Benchmark Loans are repaid and at maturity, (ii) in the case of Floating Rate Loans, on the last business day of each March, June, September and December occurring after the Settlement Date, beginning with March 31, 2023, and at maturity.

The obligations of the Company under the New Term Loan Credit Agreement are guaranteed, subject to certain exclusions and agreed guaranty and security principles, by the Company’s material subsidiaries in the Specified Jurisdictions and secured (i) on a first-priority basis, ranking pari passu with the Superpriority Facility, the 2025 Senior Notes, the New 2025 Notes and the Existing Term Loans (excluding released liens), by certain Non-ABL Priority Collateral held by the Company and those guarantors that are organized in the United States, (ii) on a second-priority basis by certain other Non-ABL Priority Collateral held by the guarantors that are organized outside the United States and (iii) on a third-priority basis by the ABL Priority Collateral.

The New Term Loan Credit Agreement contains affirmative and negative covenants customary for facilities of its type, including, but not limited to, delivery of financial information, limitations on mergers, consolidations and fundamental changes, limitations on sales of assets, limitations on investments and acquisitions, limitations on liens, limitations on transactions with affiliates, limitations on indebtedness, limitations on negative pledge clauses, limitations on restrictions on subsidiary distributions, limitations on restricted payments and limitations on certain payments of indebtedness.

The New Term Loan Credit Agreement provides that the Company may prepay the New Term Loans at any time without premium or penalty, subject to restrictions contained in the documentation governing the Company’s other indebtedness. The New Term Loan Credit Agreement additionally provides that the Company will be required to prepay the New Term Loans in certain circumstances (without premium), including with the proceeds of asset sales and in connection with change of control transactions. Once repaid, the New Term Loans may not be reborrowed.

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

ABL Revolving Credit and Guaranty Agreements

On the Settlement Date, the Company and subsidiary borrowers (together with the Company, the ABL Borrowers) entered into a Revolving Credit and Guaranty Agreement (the ABL Credit Agreement). The ABL Credit Agreement provides for an asset-based revolving credit facility (the ABL Facility) consisting of three Tranches (respectively, Tranche A, Tranche B and Tranche C) with a total commitment of up to $250, including a Tranche A commitment of up to $155, a Tranche B commitment of up to $25 and a Tranche C commitment of up to $70. Letters of credit are limited to the lesser of (i) $50 and (ii) the aggregate unused amount of the applicable lenders’ Tranche A commitments then in effect. Swing line loans are limited to the lesser (i) $50 and (ii) in respect of an applicable borrower, such borrower’s Tranche A available credit then in effect. Subject to currencies available under the applicable Tranche, loans under the ABL Facility may be denominated, depending on the Tranche being drawn, in U.S. Dollars, Canadian Dollars, Euros and Pounds Sterling. The ABL Facility replaced the commitments of the Company’s existing revolving credit lenders under the Existing Credit Agreement, which were repaid in full and terminated on the Settlement Date.

On the Settlement Date, certain ABL Borrowers borrowed a total of $182 under the ABL Facility, consisting of $122 of Tranche A loans and $60 of Tranche C loans. The proceeds of borrowing under the ABL Facility were or will be used, as applicable, (i) to finance the December 2022 Refinancing Transactions, including the repayment of revolving loans outstanding under the Existing Credit Agreement on the Settlement Date, (ii) to finance the ongoing working capital requirements of the ABL Borrowers and their respective subsidiaries and (iii) for other general corporate purposes.

The ABL Facility will mature on July 20, 2026, subject to a springing maturity to a date that is 91 days prior to the maturity date of any indebtedness for borrowed money (other than any Existing Term Loans or 2024 Senior Notes that were not exchanged in connection with the December 2022 Refinancing Transactions) in an aggregate principal amount of more than $25 incurred by the Company or any of its subsidiaries. Loans under the ABL Facility bear interest determined by reference to a benchmark rate plus a margin of between 1.50% and 3.00%, in each case, depending on the amount of excess availability, the currency of the loans and the type of loans under the ABL Facility. A commitment fee equal to 0.50% per annum of the average daily unused portion is also payable quarterly by the ABL Borrowers under the ABL Facility.

The ABL Borrowers may borrow only up to the lesser of the level of the then-current borrowing base and the committed maximum borrowing capacity of $250.0, subject to certain sub-caps that are applicable under the ABL Facility. The obligations of the ABL Borrowers under the ABL Facility are guaranteed, subject to certain exclusions and agreed guaranty and security principles, by the Company’s material subsidiaries in the Specified Jurisdictions and secured (i) on a first-priority basis by the ABL Priority Collateral, and (ii) on a junior-most priority basis by the Non-ABL Priority Collateral.

The ABL Borrowers may voluntarily repay outstanding loans under the ABL Facility at any time, without prepayment premium, subject to certain customary “breakage” costs. Amounts borrowed and repaid under the ABL Facility may be reborrowed.

The ABL Credit Agreement contains affirmative and negative covenants customary for facilities of its type, including, but not limited to, delivery of financial information, limitations on mergers, consolidations and fundamental changes, limitations on sales of assets, limitations on investments and acquisitions, limitations on liens, limitations on transactions with affiliates, limitations on indebtedness, limitations on negative pledge clauses, limitations on restrictions on subsidiary distributions, limitations on restricted payments and limitations on certain payments of indebtedness. The ABL Facility also requires the maintenance of a minimum Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of 1.00 to 1.00 for the four-fiscal-quarter period immediately preceding such date when excess availability is less than the greater of $25.0 and 10% of the Line Cap (as defined in the ABL Credit Agreement) then in effect.

The ABL Credit Agreement contains customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts, breach of covenants, cross default and cross acceleration to material indebtedness, voluntary and involuntary bankruptcy or insolvency proceedings, unpaid material judgments and change of control.

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

FILO Amendment

On March 21, 2023 the Company and certain of its subsidiaries entered into an amendment and limited waiver (the FILO Amendment) to the ABL Credit Agreement. The FILO Amendment provides for an additional tranche (the FILO Tranche) of commitments under the ABL Credit Agreement consisting of a senior secured “last out” term loan facility (the FILO Facility). The initial commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on the Closing Date. Proceeds of the loans made under the FILO Facility will be used to finance the ongoing working capital requirements of the Company and its subsidiaries and for other general corporate purposes.

The FILO Facility will mature on June 4, 2023. Loans under the FILO Facility bear interest determined by reference to, at the Company’s option, either (x) adjusted term SOFR plus a margin of 8.00% or (y) an alternative base rate plus a margin of 7.00%. The Company paid an upfront fee of $3.9 to the lenders providing the FILO Facility, which fee was capitalized and added to the outstanding balance under the FILO Facility. The obligations of the Company under the FILO Facility benefit from the same guarantees and security as the existing obligations under the ABL Credit Agreement.

Pursuant to the FILO Amendment, among other things, for a 75-day period ending on June 4, 2023 (the Waiver Period), the Company will be permitted to maintain outstanding borrowings and letters of credit in excess of its then-current borrowing base in an amount not to exceed $233.8 (inclusive of amounts outstanding under the FILO Facility but before giving effect to any payment in kind of interest or fees added thereto). During the Waiver Period, the Company will not be permitted to borrow any additional amounts under the ABL Credit Agreement and must maintain an actual borrowing base of at least $140.0. In addition, during the Waiver Period, the Company will not be required to comply with certain reporting provisions required by the ABL Credit Agreement.

At the closing of the December 2022 Refinancing Transactions, the Company drew down the ABL Facility and utilized the proceeds for working capital, including payments to suppliers and vendors. As of March 31, 2023, therefore, the Company had no additional availability under the ABL Facility and $263.0 of cash, cash equivalents, restricted cash and short-term investments. Initially, the Company believed that the December 2022 Refinancing Transactions, along with cash from operations, would be sufficient to meet the Company’s near-term and long-term liquidity needs for at least the next 12 months. Over the course of the first quarter of 2023, based on the Company's revenue cycle and composition of the borrowing base under the ABL Facility, the availability under the ABL Facility as of March 2023 has been substantially limited. In addition, slower-than-expected conversion of inventory into revenue has further suppressed liquidity. Accordingly, on March 21, 2023, the Company entered into the FILO Amendment, which established the FILO Facility. Commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on March 21, 2023. The liquidity provided by the FILO Facility is only expected to sustain the Company through part of the second quarter of 2023.

Restructuring Support Agreement

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors for the effectuation of a deleveraging transaction through, among other things, (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Company and certain of its subsidiaries (collectively, the Debtors) in connection with the anticipated commencement by the Debtors of voluntary cases under chapter 11 (the Chapter 11 Cases) of title 11 of the United States Code (the U.S. Bankruptcy Code) in the U.S. Bankruptcy Court for the Southern District of Texas (the U.S. Bankruptcy Court), (ii) a scheme of arrangement to be filed by the Dutch Issuer and relating to certain of the Company's subsidiaries (the Dutch Scheme Companies) in connection with the commencement by the Dutch Issuer of voluntary proceedings (the Dutch Scheme Proceedings) under the Dutch Act on Confirmation of Extrajudicial Plans (Wet homologatie onderhands akkoord) (the Dutch Restructuring Law) in the District Court of Amsterdam (the Dutch Court) and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

Under the Restructuring Support Agreement, the Consenting Creditors have agreed, subject to certain terms and conditions, to support transactions (the Restructuring Transactions) that would result in a financial restructuring of the existing funded debt and existing equity interests of the Company Parties pursuant to plans to be filed in the Chapter 11 Cases (the Chapter 11 Plan) and the Dutch Scheme Proceedings (the WHOA Plan).

The Chapter 11 Plan and the WHOA Plan (together, the Plans) will be based on the restructuring term sheet attached to and incorporated into the Restructuring Support Agreement. Below is a summary of the treatment that the stakeholders of the

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

Company would receive under the Chapter 11 Plan (capitalized terms not defined have the meanings assigned to them in the Restructuring Support Agreement):

•Holders of Other Secured Claims. Each holder of allowed Other Secured Claims would receive, at the Company's option (with the reasonable consent of a requisite number of Consenting Creditors (the Required Consenting Creditors): (a) payment in full in cash; (b) the collateral securing its secured claim; (c) reinstatement of its secured claim; or (d) such other treatment rendering its secured claim unimpaired in accordance with section 1124 of the U.S. Bankruptcy Code.

•Holders of Other Priority Claims. Each holder of allowed Other Priority Claims would receive, at the Company's option (with the reasonable consent of the Required Consenting Creditors): (a) payment in full in cash; or (b) such other treatment rendering its other priority claim unimpaired in accordance with section 1124 of the U.S. Bankruptcy Code.

•Holders of ABL Facility Claims. On or before the effective date of the Plans (the Effective Date) or earlier if ordered by the U.S. Bankruptcy Court (including in the orders approving the DIP Facility (as defined below)), allowed ABL Facility Claims would be paid in full and any letters of credit will be cash collateralized.

•Holders of Superpriority Term Loan Claims. On or before the Effective Date, or earlier if ordered by the U.S. Bankruptcy Court (including in the orders approving the DIP Facility), allowed Superpriority Term Loan Claims would be paid in full.

•Holders of First Lien Claims. On or as soon as practicable after the Effective Date, each holder of allowed First Lien Claims would receive its pro rata share of 98% of the reorganized Company's new common equity interests (the New Common Stock) available for distribution to certain creditors under the Plans, which will be subject to dilution on account of (a) the issuance of the Additional New Common Stock as described below and (b) a new management incentive plan to be implemented in connection with the Chapter 11 Cases pursuant to which 6% of the number of shares of New Common Stock to be issued pursuant to the Chapter 11 Plan on a fully diluted basis (the MIP Shares) will be reserved for issuance to management as determined by the restructured Company’s new board of directors.

•Holders of Second Lien Notes Claims. On or as soon as practicable after the Effective Date, each holder of allowed Second Lien Notes Claims would receive its pro rata share of 2% of the New Common Stock available for distribution to creditors under the Plans, which will be subject to dilution on account of (a) the issuance of the Additional New Common Stock related to the Backstop Premiums as described below and (b) the MIP Shares.

•Holders of 2024 Stub Unsecured Notes Claims. On or as soon as practicable after the Effective Date, each holder of an allowed claim under or with respect to the 2024 Senior Notes (the 2024 Stub Unsecured Notes Claims) would receive its pro rata share of an amount of cash that would provide such holder with the same percentage recovery on its allowed 2024 Stub Unsecured Notes Claim that a holder of an allowed Second Lien Notes Claim would receive in respect of its allowed Second Lien Notes Claim (as diluted on account of the Additional New Common Stock, as applicable) under the Chapter 11 Plan based on the midpoint of the equity value of the New Common Stock as set forth in the disclosure statement filed in the Chapter 11 Cases.

•Holders of General Unsecured Claims. On the Effective Date, each allowed General Unsecured Claim would be reinstated and paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such allowed general unsecured claim, or otherwise provided such treatment to render it unimpaired.

•Holders of Section 510(b) Claims. On the Effective Date, claims that could be asserted under section 510(b) of the U.S. Bankruptcy Code would be extinguished, cancelled and discharged, and holders thereof would receive no distributions from the Debtors in respect of their claims.

•DNI Equity Holders. Each holder of an equity interest in the Diebold Nixdorf, Incorporated would have such interest extinguished, cancelled and discharged without any distribution.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

In addition, intercompany equity interests and claims may be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed at the option of the Debtors (with the consent of the Required Consenting Creditors such consent not to be unreasonably delayed, withheld or conditioned). As a general matter, the distributions of consideration as summarized above and set forth in more detail in the Plans take into account claim holders’ rights to payment, in respect of their claims against all the Company Parties taken as a whole.

The WHOA Plan addresses only claims held by holders of First Lien Claims, 2023 Stub First Lien Claims, Second Lien Notes Claims and 2024 Stub Unsecured Notes Claims against the Dutch Scheme Companies. The WHOA Plan would include treatment in respect of holders of such claims consistent with the treatment set forth above except that the 2023 Stub First Lien Term Loan Claims, which hold only unsecured claims against the Dutch Scheme Companies, would be classified in a separate class in the WHOA Plan and would receive no additional consideration under the WHOA Plan beyond what they would receive in the Chapter 11 Plan.

The WHOA Plan would not propose any compromise or impairment of any trade vendor or customer of the Dutch Scheme Companies or any claims between or among Company Parties.

The Restructuring Support Agreement also includes a term sheet (the DIP Term Sheet) that provides that the Debtors will seek approval of a $1.25 billion debtor-in-possession term loan credit facility (the DIP Facility) to be provided by certain of the Company's existing first lien lenders on the terms set forth in the DIP Term Sheet and such other terms that are acceptable to the Debtors and a requisite number of lenders under the DIP Facility. The proceeds of the DIP Facility will be used to: (i) repay in full the term loan obligations, including a make-whole premium, under the Superpriority Credit Agreement; (ii) repay in full the ABL Facility and cash collateralize letters of credit thereunder; (iii) pay costs and reasonable and documented out-of-pocket fees and expenses related to the court-supervised restructuring proceedings; (iv) make certain “adequate protection payments”; and (v) fund the working capital needs and expenditures of the Company Parties and their non-debtor affiliates during the pendency of the court supervised restructuring proceedings.

As consideration for of their commitment with respect to the DIP Facility, certain lenders who have agreed to backstop the DIP Facility (the DIP Backstop Lenders) will receive (i) a commitment backstop premium equal to 13.5% of the New Common Stock, (ii) an upfront premium equal to 6.5% of the New Common Stock and (iii) an additional premium equal to equal to 7.0% of the New Common Stock (collectively, the Backstop Premiums). Additionally, holders of First Lien Claims that wish to become a lender under the DIP Facility and that execute a joinder to the Restructuring Support Agreement prior to 11:59 p.m., New York City time, on June 2, 2023 will be eligible to participate in the DIP Facility and receive a participation premium of their pro rata portion of 10% of the New Common Stock. The New Common Stock issuable as premiums described in this paragraph is referred to herein as Additional New Common Stock.

Pursuant to the Restructuring Support Agreement, the Company Parties must implement the Restructuring Transactions in accordance with the following milestones (unless extended or waived by the Required Consenting Creditors):

•no later than 11:59 pm Eastern Time on May 31, 2023, the Company Parties must have commenced solicitation of the Chapter 11 Plan and the WHOA Plan;

•no later than June 1, 2023, the Debtors must have filed their chapter 11 petitions under the U.S. Bankruptcy Code and commenced the Chapter 11 Cases (such date of commencement, the Petition Date);

•on the Petition Date, the Company Parties must have filed the Chapter 11 Plan and the related disclosure statement with the U.S. Bankruptcy Court;

•no later than two days after the Petition Date, the U.S. Bankruptcy Court must have entered an interim order approving the DIP Facility;

•no later than five days after the Petition Date, the Company Parties must have commenced the Dutch Scheme Proceedings with the Dutch Court;

•no later than 45 days after the Petition Date, the U.S. Bankruptcy Court must have entered a final order approving the DIP Facility;


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

•no later than 45 days after the Petition Date, the U.S. Bankruptcy Court must have entered an order confirming the Chapter 11 Plan;

•no later than 75 days after the Petition Date, the Dutch Court must have entered an order sanctioning the WHOA Plan (the Dutch Sanction Order); and

•no later than 80 days after the Petition Date, the Effective Date must have occurred.

In accordance with the Restructuring Support Agreement, the Consenting Creditors have agreed, among other things, to (i) support the Restructuring Transactions as contemplated by, and within the timeframes outlined in, the Restructuring Support Agreement and the definitive documents governing the Restructuring Transactions; (ii) not object to, delay, impede, or take any action to interfere with acceptance, implementation, or consummation of the Restructuring Transactions; (iii) vote to accept the Plans; and (iv) not transfer claims against a Company Party held by each Consenting Creditor except with respect to limited and customary exceptions, including requiring any transferee to either already be bound or become bound by the terms of the Restructuring Support Agreement.

In accordance with the Restructuring Support Agreement, the Company Parties agreed, among other things, to: (a) support and take all steps reasonably necessary and desirable to (i) consummate the Restructuring Transactions in accordance with the Restructuring Support Agreement, (ii) obtain the interim and final orders approving the DIP Facility, (iii) obtain the order confirming the Chapter 11 Plan and the Dutch Sanction Order and an order recognizing the Dutch Sanction Order in the chapter 15 proceedings, and (iv) prosecute and defend any appeals relating to the order confirming the Chapter 11 Plan and the Dutch Sanction Order; (b) comply with the milestones described above, (c) use commercially reasonable efforts to obtain any and all required governmental and/or regulatory approvals for the Restructuring Transactions; (d) negotiate in good faith and, where applicable, execute and deliver certain required documents and agreements to effectuate and consummate the Restructuring Transactions as contemplated by the Restructuring Support Agreement; (e) actively oppose and object to the efforts of any person seeking to object to, delay, impede, or take any other action to interfere with the acceptance, implementation, or consummation of the Restructuring Transactions; (f) use commercially reasonable efforts to seek additional support for the Restructuring Transactions from other material stakeholders to the extent reasonably prudent; (g) operate their business in the ordinary course; (h) timely file a formal objection to any motion filed with the U.S. Bankruptcy Court by a third party seeking the entry of an order (i) modifying or terminating the U.S. Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization, as applicable, (ii) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the U.S. Bankruptcy Code), (iii) converting any of the Chapter 11 Cases to cases under chapter 7 of the U.S. Bankruptcy Code, or (iv) dismissing any of the Chapter 11 Cases; and (i) at the request of the Required Consenting Creditors, appoint a chief restructuring officer, who shall be selected by the Required Consenting Creditors and be be reasonably acceptable to the Chief Executive Officer of the Company.

The Consenting Creditors may terminate the Restructuring Support Agreement (and thereby their obligations to support the Plans) under certain circumstances, including the Company's failure to meet the milestones described above (unless extended or waived).

A Company Party may terminate the Restructuring Support Agreement under certain circumstances, including the U.S. Bankruptcy Court's failure to confirm the Chapter 11 Plan or dismissal of the Chapter 11 Cases or the Dutch Court's failure to sanction the WHOA Plan. The Restructuring Support Agreement will be automatically terminated in certain circumstances, including if the Company's board of directors determines, after consulting with counsel, that proceeding with any of the restructuring transactions contemplated by the Restructuring Support Agreement would be inconsistent with its fiduciary duties or applicable law.

Although the Company intends to pursue the Restructuring Transactions in accordance with the terms set forth in the Restructuring Support Agreement, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement, on different terms or at all. The Restructuring Support Agreement is subject to various terms and conditions set forth therein. Moreover, consummation of the Plans will be subject to numerous conditions, including approval from the U.S. Bankruptcy Court and the Dutch Court, as applicable.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

Uncommitted Line of Credit

As of September 30, 2017,March 31, 2023, the Company had various international short-term uncommitted lines of credit with borrowing limits of $191.4, in the aggregate.aggregating to $25.1. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of September 30, 2017March 31, 2023 and December 31, 20162022 was 9.1018.44 percent and 9.8711.02 percent, respectively, and primarily relate to higher interest rate, short-term uncommitted lines of credit in India.Columbia and Brazil. Short-term uncommitted lines mature in less than one year. The remaining amount available under the short-term uncommitted lines at September 30, 2017March 31, 2023 was $167.2, in the aggregate.$21.2.



The cash flows related to debt borrowings and repayments were as follows:
 Three months ended
March 31,
 20232022
Revolving credit facility borrowings$102.7 $188.0 
Revolving credit facility repayments$(80.0)$(113.0)
Other debt borrowings
International short-term uncommitted lines of credit borrowings$2.3 $0.3 
Other debt repayments
Payments on Term Loan B Facility - USD under the Credit Agreement$(1.3)$(1.8)
Payments on Term Loan B Facility - Euro under the Credit Agreement(0.3)(1.7)
International short-term uncommitted lines of credit and other repayments(0.5)(1.2)
$(2.1)$(4.7)

Below is a summary of financing and replacement facilities information:
Financing and Replacement FacilitiesInterest Rate
Index and Margin		Maturity/Termination DatesInitial Term (Years)
Term Loan B Facility - USD(i)
LIBOR + 2.75%November 20237.5
Term Loan B Facility - Euro(ii)
EURIBOR + 3.00%November 20237.5
2024 Senior Notes8.50%April 20248
2025 Senior Secured Notes – USD9.38%July 20255
2025 Senior Secured Notes – EUR9.00%July 20255
ABL(iii)
SOFR + 2.50-3.00%July 20263.5
New Term B USD(iv)
SOFR + 5.35%July 20252.5
New Term B EUR(v)
EURIBOR + 5.60%July 20252.5
2L Notes8.50% / 12.50% PIKOctober 20263.8
New USD Senior Secured Notes9.38%July 20252.5
New EUR Senior Secured Notes9.00%July 20252.5
Superpriority Term Loans(vi)
SOFR + 6.50%July 20252.5
FILO Facility (iii)
SOFR + 8.00%June 20230.3
(i)LIBOR with a floor of 0.0 percent
(ii)EURIBOR with a floor of 0.0 percent
(iii)SOFR with a floor of 0.0 percent
(iv)SOFR with a floor of 1.5 percent
(v)EURIBOR with a floor of 0.5 percent
(vi)SOFR with a floor of 4.0 percent


22

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 10: Equity

The cash flows relatedfollowing tables present changes in shareholders' equity attributable to debt borrowings and repayments were as follows:
  Nine Months Ended
  September 30,
  2017 2016
Revolving credit facility borrowings (repayments), net $120.0
 $(168.0)
     
Other debt borrowings    
Proceeds from Delayed Draw Term Loan A Facility under the Credit Agreement $250.0
 $—
Proceeds from Term Loan B Facility - USD under the Credit Agreement —
 990.0
Proceeds from Term Loan B Facility - Euro under the Credit Agreement 73.3
 398.1
Proceeds from 2024 Senior Notes —
 393.0
International short-term uncommitted lines of credit borrowings 57.7
 44.6
  $381.0
 $1,825.7
     
Other debt repayments    
Payments on 2006 Senior Notes $—
 $(225.0)
Payments on Term Loan A Facility under the Credit Agreement (12.9) (8.6)
Payments on Delayed Draw Term Loan A Facility under the Credit Agreement (3.1) —
Payments on Term Loan B Facility - USD under the Credit Agreement (324.9) —
Payments on Term Loan B Facility - Euro under the Credit Agreement (3.4) —
Payments on European Investment Bank (63.1) —
International short-term uncommitted lines of credit and other repayments (26.1) (185.6)
  $(433.5) $(419.2)

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,Diebold Nixdorf, Incorporated 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, which amended the Credit Agreement, 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 refinanced its $520.0 revolving and $230.0 term loan A senior unsecured credit facilities (which have been terminated and repaid in full) 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 Loan A Facility) on substantially the same terms as the Delayed Draw Term Loan A Facility (as defined in the Credit Agreement) in the amount of up to $230.0. 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 Facility borrowings as of September 30, 2017 and December 31, 2016 was 3.25 percent and 2.56 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the Revolving Facility as of September 30, 2017 was $400.0.noncontrolling interests:

Accumulated Other Comprehensive LossTotal Diebold Nixdorf, Incorporated Shareholders' Equity
Common SharesAdditional
Capital		Accumulated DeficitTreasury
Shares		Equity WarrantsNon-controlling
Interests		Total
Equity
Balance, December 31, 2022$119.8 $831.5 $(1,406.7)$(585.6)$(360.0)$20.1 $(1,380.9)$9.8 $(1,371.1)
Net loss— — (111.1)— — — (111.1)(0.4)(111.5)
Other comprehensive loss— — — — 6.3 — 6.3 2.2 8.5 
Share-based compensation issued1.0 (1.0)— — — — — — — 
Share-based compensation expense— 1.3 — — — — 1.3 — 1.3 
Treasury shares— — — (0.8)— — (0.8)— (0.8)
Balance, March 31, 2023$120.8 $831.8 $(1,517.8)$(586.4)$(353.7)$20.1 $(1,485.2)$11.6 $(1,473.6)
Accumulated Other Comprehensive LossTotal Diebold Nixdorf, Incorporated Shareholders' Equity
Common SharesAdditional
Capital		Accumulated DeficitTreasury
Shares		Equity WarrantsNon-controlling
Interests		Total
Equity
Balance, December 31, 2021$118.3 $819.6 $(822.4)$(582.1)$(378.5)$— $(845.1)$8.1 $(837.0)
Net loss— — (183.1)— — — (183.1)(0.8)(183.9)
Other comprehensive loss— — — — 13.1 — 13.1 0.8 13.9 
Share-based compensation issued1.2 (1.2)— — — — — — — 
Share-based compensation expense— 1.7 — — — — 1.7 — 1.7 
Treasury shares— — — (3.3)— — (3.3)— (3.3)
Balance, March 31, 2022$119.5 $820.1 $(1,005.5)$(585.4)$(365.4)$— $(1,016.7)$8.1 $(1,008.6)
On April 19, 2016, the Company issued the $400.0 aggregate principal amount of 2024 Senior Notes in an offering exempt from the registration requirements of the Securities Act of 1933 (the Securities Act) in connection with the Acquisition. The 2024 Senior Notes are and will be guaranteed by certain of the Company’s existing and future domestic subsidiaries.

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 U.S. dollar-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.



23

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)




In connection withNote 11: Accumulated Other Comprehensive Income (Loss)

The following table summarizes the Incremental Agreement, the interest rate with respect to the Term Loan B Facility - USD is based on, atchanges in the Company’s option, adjusted LIBOR plus 2.75 percent (with a floorAOCI, net of 0.00 percent) or Alternate Base Rate (ABR) plus 1.75 percent (with an ABR floor of 1.00 percent) and the interest rate with respect to the Term Loan B Facility - Euro is based on adjusted Euro Interbank Offered Rate (EURIBOR) plus 3.00 percent (with a floor of 0.00 percent). Prior to the Incremental Agreement, the interest ratetax, by component for the Term Loan B Facility - USD was LIBOR plus an applicable marginthree months ended March 31, 2023:
TranslationForeign Currency HedgesInterest Rate HedgesPension and Other Post-retirement BenefitsOtherAccumulated Other Comprehensive Income (Loss)
Balance at January 1, 2023$(352.1)$(1.9)$5.3 $(12.6)$1.3 $(360.0)
Other comprehensive loss before reclassifications (1)
4.7 — 0.3 — — 5.0 
Amounts reclassified from AOCI— — — 1.3 — 1.3 
Net current-period other comprehensive loss4.7 — 0.3 1.3 — 6.3 
Balance at March 31, 2023$(347.4)$(1.9)$5.6 $(11.3)$1.3 $(353.7)
(1) Other comprehensive income (loss) before reclassifications within the translation component excludes $(2.2) of 4.50 percent (or, attranslation attributable to noncontrolling interests.

The following table summarizes the changes in the Company’s option, prime plus an applicable marginAOCI, net of 3.50 percent), and the interest ratetax, by component for the Term Loan B Facility - Euro was atthree months ended March 31, 2022:
TranslationForeign Currency HedgesInterest Rate HedgesPension and Other Post-retirement BenefitsOtherAccumulated Other Comprehensive Income (Loss)
Balance at January 1, 2022$(310.9)$(1.9)$0.4 $(64.6)$(1.5)$(378.5)
Other comprehensive loss before reclassifications (1)
10.4 (1.0)2.9 — 0.7 13.0 
Amounts reclassified from AOCI— — (0.6)0.7 — 0.1 
Net current-period other comprehensive loss10.4 (1.0)2.3 0.7 0.7 13.1 
Balance at March 31, 2022$(300.5)$(2.9)$2.7 $(63.9)$(0.8)$(365.4)
(1) Other comprehensive income (loss) before reclassifications within the EURIBOR plus an applicable margintranslation component excludes $(0.8) of 4.25 percent. As a resulttranslation attributable to noncontrolling interests.:

(1) Other comprehensive income (loss) before reclassifications within the translation component excludes $(0.8) of the Incremental Agreement, the Company anticipates an approximate $5.0 reduction in interest expense per quarter.

translation attributable to noncontrolling interests.
The Incremental Amendment also renewedfollowing table summarizes the repricing premium of 1.00 percent in relationdetails about the amounts reclassified from AOCI:
Three months endedAffected Line Item on the Statement of Operations
March 31,
20232022
Interest rate hedge loss$— $(0.6)Interest expense
Pension and post-retirement benefits:
Net actuarial gain amortized (net of tax of $0.5 and $0.3, respectively)1.3 0.7 Miscellaneous, net
Total reclassifications for the period$1.3 $0.1 


Note 12: Benefit Plans

Qualified Retirement Benefits. The Company has a qualified retirement plan covering certain U.S. employees that has been closed to the Term Loan B Facility to the date that is six months after the Incremental Effective Date, removed the requirement to prepay the Repriced Dollar Term Loannew participants since 2003 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.frozen since December 2013.

On May 6 and August 16, 2016, the Company entered into the Second and Third Amendments to the Credit Agreement, which re-denominated a portion of the Term Loan B Facility into euros and guaranteed the prompt and complete payment and performance of the obligations when due under the Credit Agreement. On February 14, 2017, the Company entered into the Fourth Amendment to the Credit Agreement, which allows the proceeds from the Delayed Draw Term Loan A Facility to be used for general corporate purposes.

The Credit Agreement financial covenant ratios at September 30, 2017 are as follows:

a maximum total net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) leverage ratio of 4.50 to 1.00 for the nine months ended September 30, 2017 (reducing to 4.25 on December 31, 2017, further reduced to 4.00 on December 31, 2018, and further reduced to 3.75 on June 30, 2019); and
a minimum adjusted EBITDA to net interest expense coverage ratio of not less than 3.00 to 1.00


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 + 2.00% December 2020 5
Term Loan A Facility LIBOR + 2.00% December 2020 5
Delayed Draw Term Loan A Facility LIBOR + 2.00% December 2020 5
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%.
(ii)
EURIBOR with a floor of 0.0%.

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.

As of September 30, 2017, the Company was in compliance with the financial and other covenants within its debt agreements.


24
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 14: Benefit Plans

The Company has 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 an employee’s compensation during the ten years before the datea number of the plan freeze or the date of the employee's 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.

In connection with the Acquisition, the Company acquired postemployment benefit plans for certain groups of employees at the Company’s new operations outside of the U.S. plans vary depending on the legal, economic, and tax environments of the respective country. For financially significantnon-U.S. defined benefit plans accrualscovering eligible employees located predominately in Europe, the most significant of which are German plans. Benefits for pensions and similar commitments have been included in the results for this year. The new significant defined benefitthese plans are mainly arrangedbased primarily on each employee's final salary, with periodic adjustments for employeesinflation. The obligations in Germany Switzerland and the Netherlands.

In Germany, post-employment benefit plans are set up asconsist of employer funded pension plans and deferred compensation plans. The employer funded pension commitments in Germanyplans 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. Insured events include disability, death and reaching of retirement age.


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 are disability, death and reaching of retirement age.

In the Netherlands, there is an average career salary plan, which is employer- and employee-financed and handled by an external fund. Insured events are disability, death and reaching of retirement age. In the Netherlands, the plan assets are currently invested in a company pension fund.

Other financially significantCompany has other defined benefit plans exist inoutside the U.K.U.S., Belgium and France.which have not been mentioned here due to materiality.


Supplemental Executive Retirement Benefits.The Company has non-qualified pension plans in the U.S. to provide supplemental retirement benefits to certain officers, which hashave also been frozen since December 2013. Benefits are payable at retirement based upon a 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.


The following table setstables set forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for the three months ended September 30:March 31, 2023 and March 31, 2022, respectively:
Three months ended
Pension Benefits
U.S. PlansNon-U.S. PlansOther Benefits
202320222023202220232022
Components of net periodic benefit cost
Service cost$— $— $1.6 $2.4 $— $— 
Interest cost4.9 4.3 2.9 1.1 0.1 0.1 
Expected return on plan assets(4.5)(5.8)(3.4)(3.9)— — 
Recognized net actuarial loss (gain)0.2 1.6 (0.9)(0.4)(0.1)(0.1)
Amortization of prior service cost— — (0.2)(0.1)— — 
Net periodic pension benefit cost$0.6 $0.1 $— $(0.9)$— $— 

Contributions and Reimbursements

For the three months ended March 31, 2023 and March 31, 2022, contributions of $17.5 and $21.8, respectively, were made to the qualified and non-qualified pension plans. The Company received reimbursements of $22.8 and $17.0 for certain benefits paid from its German plan trustee during March 2023 and May 2022, respectively.


  Pension Benefits Other Benefits
  2017 2016 2017 2016
Components of net periodic benefit cost        
Service cost $3.6
 $2.8
 $—
 $—
Interest cost 7.9
 7.1
 0.1
 0.2
Expected return on plan assets (8.6) (8.1) —
 —
Recognized net actuarial loss 1.4
 1.5
 —
 —
Curtailment loss —
 (0.2) —
 —
Net periodic pension benefit cost $4.3
 $3.1
 $0.1
 $0.2


25
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 13: Fair Value of Assets and Liabilities

Assets and Liabilities Recorded at Fair Value

Assets and liabilities subject to fair value measurement by fair value level and recorded as follows:
 March 31, 2023December 31, 2022
  Fair Value Measurements Using Fair Value Measurements Using
 Classification on condensed consolidated Balance SheetsFair ValueLevel 1Level 2Fair ValueLevel 1Level 2
Assets
Certificates of depositShort-term investments$16.6 $16.6 $— $24.6 $24.6 $— 
Assets held in rabbi trustsSecurities and other investments4.2 4.2 — 4.4 4.4 — 
Total$20.8 $20.8 $— $29.0 $29.0 $— 
Liabilities
Deferred compensationOther liabilities4.2 4.2 — 4.4 4.4 — 
Total$4.2 $4.2 $— $4.4 $4.4 $— 

The following table sets forthCompany uses the net periodic benefit cost forend of period when determining the Company’s defined benefit pension plans and other benefits fortiming of transfers between levels. During each of the ninethree months ended September 30:
March 31, 2023 and 2022, there were no transfers between levels.
  Pension Benefits
Other Benefits
  2017
2016
2017
2016
Components of net periodic benefit cost        
Service cost $10.8
 $4.6
 $—
 $—
Interest cost 23.7
 19.5
 0.3
 0.4
Expected return on plan assets (25.8) (21.6) —
 —
Recognized net actuarial loss 4.2
 4.3
 —
 0.1
Curtailment loss —
 (0.2) —
 —
Net periodic pension benefit cost (1)
 $12.9
 $6.6
 $0.3
 $0.5

(1)The increase in net periodic pension benefit cost iscarrying amount of the Company's revolving credit facility approximates fair value. The remaining debt had a carrying value of $2,573.8 and fair value of $1,441.0 at March 31, 2023, and a carrying value of $2,557.6 and fair value of $1,819.7 at December 31, 2022.

Refer to Note 9 for further details surrounding the Company's debt as of March 31, 2023 compared to December 31, 2022. Additionally, the Company would remeasure certain assets at fair value, using Level 3 measurements, as a result of the Acquisition.occurrence of triggering events.


Contributions

There have been no significant changes to the expected 2017 plan year contribution amounts previously disclosed. For the nine months ended September 30, 2017 and 2016, contributions of $20.2 and $3.5, respectively, were made to the qualified and non-qualified pension plans.

Note 15: Guarantees and Product Warranties

The Company provides its global operations guarantees and standby letters of credit through various financial institutions for suppliers, customers, regulatory agencies and insurance providers. If the Company is not able to make payment or fulfill contractual obligations, the suppliers, customers, regulatory agencies and insurance providers may draw on the pertinent bank. At September 30, 2017, the maximum future payment obligations related to these various guarantees totaled $192.3, of which $28.0 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, 2016, the maximum future payment obligations relative to these various guarantees totaled $183.3, of which $28.0 represented standby letters of credit to insurance providers, and no associated liability was recorded.

The Company provides its customers a 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. As of September 30, 2017 and 2016, the Company’s warranty liability balances were $81.2 and $106.5, respectively.

Changes in the Company’s warranty liability balance are illustrated in the following table:
  2017 2016
Balance at January 1 $101.6
 $73.6
Current period accruals 11.1
 24.6
Current period settlements (37.2) (42.8)
Acquired warranty accruals —
 43.8
Currency translation adjustment 5.7
 7.3
Balance at September 30 $81.2
 $106.5


26
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 16: Commitments and Contingencies

Contractual Obligations

At September 30, 2017, the Company had purchase commitments due within one year totaling $7.2 for materials and services through contract manufacturing agreements at negotiated prices.

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 September 30, 2017, 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, which neither individually nor in the aggregate are considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the condensed 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 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.

In March 2017, the administrative proceedings concluded and the assessment has been reduced approximately 95 percent to a total of R$17.3 including penalties and interest as of March 2017. The Company is pursuing its remedies in the judicial sphere and management continues to believe that it has valid legal positions. 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 condensed consolidated financial statements.

The Company challenged the 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, challenged 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 the Company's interpretation of the treaty in question. In August 2017, the Supreme Court of Thailand ruled in the Company's favor, finding that Customs' attempt to collect duties for importation of ATMs is improper. In addition, in August 2016 and February 2017, the tax court of appeals rendered decisions in favor of the Company related to more than half of the assessments at issue. During the third quarter of 2017, 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 September 30, 2017 and December 31, 2016, the Company had an accrual related to the Brazil indirect tax matter disclosed above of $7.5 and $7.3, respectively.

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

27
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


could occur in excess of the estimated accrual. The Company estimated the aggregate risk at September 30, 2017 to be up to approximately $168.1 for its material indirect tax matters, of which $48.5 and $26.0, 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.

Legal Contingencies

At September 30, 2017, the Company was a party to several lawsuits that were incurred in the normal course of business, which neither individually nor in the aggregate are considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the Company's condensed consolidated financial statements would not be materially affected by the outcome of these legal proceedings, commitments or asserted claims.

Note 17: Derivative Instruments and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate and foreign exchange rate risk, through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business or financing activities. The Company’s derivative foreign currency instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and cash payments principally related to the Company’s non functional currency assets and liabilities. The Company's interest rate derivatives are used to manage the differences in amount due to variable rate interest rate borrowings.

The Company uses derivatives to mitigate the economic consequences associated with fluctuations in currencies and interest rates. The following table summarizes the gain (loss) recognized on derivative instruments:
Derivative instrument Classification on condensed consolidated statements of operations Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Non-designated hedges and interest rate swaps Interest expense $(1.5) $(1.1) $(3.6) $(3.2)
Gain on foreign currency option contracts - acquisition related Miscellaneous, net —
 —
 —
 35.6
Foreign exchange forward contracts and cash flow hedges Foreign exchange gain (loss), net 2.3
 0.5
 6.3
 (0.2)
Foreign exchange forward contracts - acquisition related Miscellaneous, net —
 (3.6) —
 (26.3)
Total   $0.8
 $(4.2) $2.7
 $5.9

Foreign Exchange

Net Investment Hedges The Company has international subsidiaries with net balance sheet positions that generate cumulative translation adjustments within AOCI. The Company uses derivatives to manage potential changes in value of its net investments. The Company uses the forward-to-forward method for its quarterly measurement of ineffectiveness assessments of hedge effectiveness. No ineffectiveness results if the notional amount of the derivative matches the portion of the net investment designated as being hedged because the Company uses derivative instruments with underlying exchange rates consistent with its functional currency and the functional currency of the hedged net investment. Changes in value that are deemed effective are accumulated in AOCI where they will remain until they are reclassified to income together with the gain or loss on the entire investment upon substantial liquidation of the subsidiary. The fair value of the Company’s net investment hedge contracts were $0.1 and $(0.3) as of September 30, 2017 and December 31, 2016, respectively. The net gain (loss) recognized in AOCI on net investment hedge derivative instruments was $(2.7) and $(0.6) in the three months ended September 30, 2017 and 2016, respectively, and $(4.1) and $(12.1) in the nine months ended September 30, 2017 and 2016, respectively.


28
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


On August 15, 2016, the Company designated its €350.0 euro-denominated Term Loan B Facility as a net investment hedge of its investments in certain subsidiaries that use the Euro as their functional currency in order to reduce volatility in stockholders' equity caused by the changes in foreign currency exchange rates of the Euro with respect to the U.S. Dollar. Effectiveness is assessed at least quarterly by confirming that the respective designated net investments' net equity balances at the beginning of any period collectively continues to equal or exceed the balance outstanding on the Company's Euro-denominated term loan. Changes in value that are deemed effective are accumulated in AOCI. When the respective net investments are sold or substantially liquidated, the balance of the cumulative translation adjustment in AOCI will be reclassified into earnings. The net gain (loss) recognized in AOCI on net investment hedge foreign currency borrowings was $(12.0) in the three months ended September 30, 2017 and $(37.8) for the nine months ended September 30, 2017. On March 30, 2017, the Company de-designated €130.6 of its euro-denominated Term Loan B Facility and on May 9, 2017, the Company designated an additional €66.8 of its euro-denominated Term Loan B Facility as a result of its repricing described under note 13. On September 21, 2017, the Company de-designated €100.0 of its euro-denominated Term Loan B Facility.

Non-Designated Hedges 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. The Company’s policy allows the use of foreign exchange forward contracts with maturities of up to 24 months to mitigate the impact of currency fluctuations on those foreign currency asset and liability balances. The Company elected not to apply hedge accounting to its foreign exchange forward contracts. Thus, spot-based gains/losses offset revaluation gains/losses within foreign exchange loss, net and forward-based gains/losses represent interest expense or income. The fair value of the Company’s non-designated foreign exchange forward contracts was $0.8 and $2.6 as of September 30, 2017 and December 31, 2016, respectively.

Cash Flow Hedges The Company is exposed to fluctuations in various foreign currencies against its functional currency. At the Company, both sales and purchases are transacted in foreign currencies. Wincor Nixdorf International GmbH (WNI) is the Diebold Nixdorf AG currency management center. Currency risks in the aggregate are identified, quantified, and controlled at the WNI treasury center, and furthermore, it provides foreign currencies if necessary. The Diebold Nixdorf AG subsidiaries are primarily exposed to the United States Dollar (USD) and Great Britain Pound (GBP) as the euro (EUR) is its functional currency. This risk is considerably reduced by natural hedging (i.e. management of sales and purchases by choice location and suppliers). For the remainder of the risk that is not naturally hedged, foreign currency forwards are used to manage the exposure between EUR-GBP and EUR-USD.

Derivative transactions are recorded on the balance sheet at fair value. For transactions designated as cash flow hedges, the effective portion of changes in the fair value are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transactions impact earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. As of September 30, 2017, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:
Foreign Currency Derivative Number of Instruments Notional Sold Notional Purchased
Currency forward agreements (EUR-USD) 14
 77.8
USD 69.0
EUR
Currency forward agreements (EUR-GBP) 13
 30.8
GBP 35.1
EUR
Currency forward agreements (EUR-CAD) 1
 2.0
CAD 1.3
EUR
Currency forward agreements (EUR-CZK) 2
 161.6
CZK 6.1
EUR

The remaining net currency risk not hedged by forward currency transactions amounts to approximately $25.6 and £8.0 for the nine months ended September 30, 2017. The flows of foreign currency are recorded centrally for Diebold Nixdorf AG and, where feasible, equalized out. No foreign currency options were transacted during the current and previous year. If the euro had been revalued and devalued respectively by 10 percent against the U.S. dollar the other components of equity (before deferred taxes) and the fair value of forward currency transactions would have been €5.9 higher, and €7.1 lower, respectively for the nine months ended September 30, 2017. If the euro had been revalued and devalued respectively by 10 percent against pounds sterling as of September 30, 2017, the other components of equity (before deferred taxes) and the fair value of forward currency transactions would have been €3.1 higher and €3.8 lower, respectively, for the nine months ended September 30, 2017.


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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Foreign Currency Option and Forward Contracts - acquisition related On November 23, 2015, the Company entered into two foreign currency 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 Acquisition and estimated euro-denominated transaction related costs and any outstanding Diebold Nixdorf AG borrowings. At that time, the euro-denominated cash component of the purchase price consideration was €1,162.2. The weighted average strike price was $1.09 per euro.

On April 29, 2016, the Company entered into one foreign currency forward contract to purchase €713.0 for $820.9 to hedge against the effect of exchange rate fluctuations on the euro-denominated cash consideration related to the Acquisition and estimated euro denominated deal related costs and any outstanding Diebold Nixdorf AG borrowings. The forward rate was $1.1514. This foreign currency forward contract was non-designated and included in other current assets or other current liabilities based on the net asset or net liability position, respectively, in the condensed consolidated balance sheets. The gains and losses from the revaluation of the foreign currency forward contract are included in other income (expense) miscellaneous, net on the condensed consolidated statements of operations.

During the three and nine months ended September 30, 2016, the Company recorded a $(3.6) and $9.3, respectively, mark-to-market gain (loss) on foreign currency and forward option contracts reflected in miscellaneous, net as these contracts were settled in third quarter of 2016.

Interest Rate

Cash Flow Hedges 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 primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During November 2016, the Company entered into multiple pay-fixed receive-variable interest rate swaps outstanding with an aggregate notional amount of $400.0.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the fourth quarter of 2016, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company estimates that an additional $0.1 will be reclassified as an increase to interest expense over the next year.

Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

In connection with the Acquisition, the Company acquired an interest swap for a nominal sum of €50.0, which was entered into in May 2010 with a ten-year term from October 1, 2010 until September 30, 2020. For this interest swap, the three-month EURIBOR is received and a fixed interest of 2.97 percent is paid. The fair value, which is measured at market prices, as ofSeptember 30, 2017 and December 31, 2016 was €(6.1) and €(6.3), respectively. Because this swap was accounted for as a cash flow hedge, the change in fair value of €0.2 was directly recognized in AOCI. For the nine months ended September 30, 2017, the amount reclassified from equity to profit or loss was not significant.


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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 18: Fair Value of Assets14: Commitments and LiabilitiesContingencies


Assets and Liabilities Recorded at Fair ValueIndirect Tax Contingencies

Assets and liabilities subject to fair value measurement are as follows:
    September 30, 2017 December 31, 2016
      Fair Value Measurements Using   Fair Value Measurements Using
  Classification on condensed consolidated Balance Sheets Fair Value Level 1 Level 2 Fair Value Level 1 Level 2
Assets              
Short-term investments              
Certificates of deposit Short-term investments $64.0
 $64.0
 $—
 $64.1
 $64.1
 $—
Assets held in rabbi trusts Securities and other investments 9.1
 9.1
 —
 8.5
 8.5
 —
Foreign exchange forward contracts Other current assets 6.8
 —
 6.8
 7.2
 —
 7.2
Interest rate swaps Other current assets 1.0
 —
 1.0
 —
 —
 —
Interest rate swaps Securities and other investments 6.0
 —
 6.0
 8.4
 —
 8.4
Total   $86.9
 $73.1
 $13.8
 $88.2
 $72.6
 $15.6
Liabilities              
Foreign exchange forward contracts Other current liabilities $3.6
 $—
 $3.6
 $7.7
 $—
 $7.7
Interest rate swaps Other current liabilities 7.2
 —
 7.2
 6.9
 —
 6.9
Deferred compensation Other liabilities 9.1
 9.1
 —
 8.5
 8.5
 —
Total   $19.9
 $9.1
 $10.8
 $23.1
 $8.5
 $14.6


The Company usesaccrues for indirect tax matters when management believes that a loss is probable and the endamounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of period when determiningaccruals, 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 timinglikelihood of transfers between levels. During the nine months ended September 30, 2017, there were no transfers between levels.

The fair valueprevailing. Management evaluates and carrying valueupdates 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 accruals at that time.

At March 31, 2023, 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, which neither individually nor in the aggregate are considered material by management in relation to the Company’s debt instruments are summarized as follows:financial position or results of operations. In management’s opinion, the condensed consolidated financial statements would not be materially affected by the outcome of these indirect tax claims and/or proceedings or asserted claims.


  September 30, 2017 December 31, 2016
  Fair Value Carrying
Value		 Fair Value Carrying
Value
Notes payable $71.9
 $71.9
 $106.9
 $106.9
         
Revolving Facility 120.0
 120.0
 —
 —
Term Loan A Facility 184.0
 184.0
 201.3
 201.3
Delayed Draw Term Loan A Facility 231.3
 231.3
 —
 —
Term Loan B Facility - USD 467.9
 467.9
 787.5
 787.5
Term Loan B Facility - Euro 482.9
 482.9
 363.5
 363.5
2024 Senior Notes 433.7
 400.0
 426.0
 400.0
Other 1.2
 1.2
 0.8
 0.8
Long-term deferred financing fees (52.8) (52.8) (61.7) (61.7)
Long-term debt 1,868.2
 1,834.5
 1,717.4
 1,691.4
Total debt instruments $1,940.1
 $1,906.4
 $1,824.3
 $1,798.3

Refer to note 13 for further details surrounding the increase in long-term debt as of September 30, 2017 compared to December 31, 2016.


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Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 19: Restructuring

The following table summarizesA loss contingency is reasonably possible if it has a more than remote but less than probable chance of occurring. Although management believes the impactCompany has valid defenses with respect to its indirect tax positions, it is reasonably possible that a loss could occur in excess of the estimated liabilities. The Company estimated the aggregate risk at March 31, 2023 to be up to $51.1 for its material indirect tax matters. The aggregate risk related to indirect taxes is adjusted as the applicable statutes of limitations expire.

Legal Contingencies

At March 31, 2023, the Company was a party to several lawsuits that were incurred in the normal course of business, which neither individually nor in the aggregate were considered material by management in relation to the Company’s restructuring charges onfinancial position or results of operations. In management’s opinion, the Company's condensed consolidated financial statements would not be materially affected by the outcome of operations:these legal proceedings or asserted claims.

  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Cost of sales – services and software $14.0
 $2.0
 $29.6
 $3.7
Cost of sales – systems 1.2
 0.3
 2.8
 0.3
Selling and administrative expense 2.6
 5.0
 13.4
 8.6
Research, development and engineering expense (0.4) 0.1
 (1.1) 0.2
Total $17.4
 $7.4
 $44.7
 $12.8

The following table summarizes the Company’s typeIn addition to these normal course of restructuring charges by reportable operating segment:
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Severance        
Services $14.2
 $1.0
 $33.1
 $3.3
Software 1.0
 2.0
 0.8
 2.5
Systems 1.9
 0.7
 5.4
 1.6
Corporate 0.3
 3.7
 5.4
 5.4
Total severance $17.4
 $7.4
 $44.7
 $12.8

Multi-Year Transformation Plan

During the first quarter of 2013,business litigation matters, the Company announcedis a multi-year transformation plan, which focused on globalizing the Company's service organization and creating a unified center-led global organization for research and development, as well as transforming the Company's general and administrative cost structure. Restructuring charges relatedparty to the Company's multi-year transformation plan were $4.3 and $9.7 for the three and nine months ended September 30, 2016, respectively. The multi-year transformation plan was considered complete as of December 31, 2016.proceedings described below:


DN2020 Plan

As of August 15, 2016, the date of the Acquisition, the Company launchedDiebold Nixdorf Holding Germany GmbH, formerly Diebold Nixdorf Holding Germany Inc. & Co. KGaA (Diebold KGaA), is a multi-year integration and transformation program, known as DN2020. The DN2020 plan focuses on the utilization of cost efficiencies and synergy opportunities that result from the Acquisition, which aligns employee activitiesparty to two separate appraisal proceedings (Spruchverfahren) in connection with the Company's goalpurchase of delivering net operating profit savings of approximately $240all shares in its former listed subsidiary, Diebold Nixdorf AG. The first appraisal proceeding, which relates to the Domination and Profit Loss Transfer Agreement (DPLTA) entered into by the year 2020. The Company incurred restructuring charges of $17.4Diebold KGaA and $44.7 for the three and nine months ended September 30, 2017 related to DN2020. The Company anticipates additional restructuring costs of approximately $50 primarily related to severance anticipated for completion of the Company's integration and transformation plans throughout the three lines of business to be incurred through the end of DN2020.

Delta Program

At the beginning of the 2015,former Diebold Nixdorf AG, initiatedwhich became effective on February 17, 2017, is pending at the Delta Program relatedHigher Regional Court (Oberlandesgericht) of Düsseldorf (Germany) as the court of appeal. The DPLTA appraisal proceeding was filed by minority shareholders of Diebold Nixdorf AG challenging the adequacy of both the cash exit compensation of €55.02 per Diebold Nixdorf AG share (of which 6.9 shares were then outstanding) and the annual recurring compensation of €2.82 per Diebold Nixdorf AG share offered in connection with the DPLTA.

The second appraisal proceeding relates to restructuringthe cash merger squeeze-out of minority shareholders of Diebold Nixdorf AG in 2019 and realignment. As partis pending at the same Chamber for Commercial Matters (Kammer für Handelssachen) at the District Court (Landgericht) of Dortmund (Germany) that was originally competent for the DPLTA appraisal proceedings. The squeeze-out appraisal proceeding was filed by former minority shareholders of Diebold Nixdorf AG challenging the adequacy of the cash exit compensation of €54.80 per Diebold Nixdorf AG share (of which 1.4 shares were then outstanding) in connection with the merger squeeze-out.

In both appraisal proceedings, a change process that will span several years,court ruling would apply to all Diebold Nixdorf AG shares outstanding at the Delta Program is designedtime when the DPLTA or the merger squeeze-out, respectively, became effective. Any cash compensation received by former Diebold Nixdorf AG shareholders in connection with the merger squeeze-out would be netted with any higher cash compensation such shareholder may still claim in connection with the DPLTA appraisal proceeding.

In the second quarter of 2022, the District Court of Dortmund dismissed all claims to hastenincrease the expansion of software and professional services operations and to further enhance profitabilitycash compensation in the services business.DPLTA appraisal proceedings. This program includes expansionfirst instance decision, however, is not final as some of the plaintiffs filed appeals. The Company believes that the compensation offered in connection with the DPLTA and the merger squeeze-out was in both cases fair and that the decision of the District Court of Dortmund in the high-end fieldsDPLTA appraisal proceedings validates its position. German courts often adjudicate increases of managed services and outsourcing. It also involves capacity adjustments on the hardware side, enablingcash compensation to plaintiffs in varying amounts in connection with German appraisal proceedings. Therefore, the Company cannot rule out that a court may increase the cash compensation in these appraisal proceedings. The Company, however, is convinced that its defense in both appraisal proceedings is supported by strong sets of facts and the Company will continue to respond more effectivelyvigorously defend itself in these matters.

Bank Guarantees, Standby Letters of Credit, and Surety Bonds

In the ordinary course of business, the Company may issue performance guarantees on behalf of its subsidiaries to market volatility while maintaining its abilities with innovation. Ascertain customers and other parties. Some of August 15, 2016,those guarantees may be backed by standby letters of credit, surety bonds, or similar instruments. In general, under the dateguarantees, the Company would be obligated to perform, or cause performance, over the term of the Acquisition,underlying contract in the restructuring accrual balance acquiredevent of an unexcused, uncured breach by its subsidiary, or some other specified triggering event, in each case as defined by the applicable guarantee. At March 31, 2023, the maximum future contractual obligations relative to these various guarantees totaled $140.6, of which $24.0 represented standby letters of credit to insurance providers, and no associated liability was $45.5 and consisted of severance activities. Duringrecorded. At December 31, 2022, the third quarter of 2017, the Company recorded a measurement period adjustment of $8.2maximum future payment obligations relative to the acquired restructuring accrual resulting in a final fair value of $37.3 as of September 30, 2017. The Company incurred restructuring charges of $3.1 for the three and nine months

these
32

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



various guarantees totaled $173.2, of which $24.0 represented standby letters of credit to insurance providers, and no associated liability was recorded.
ended September 30, 2016, respectively. As

Note 15: Revenue Recognition

A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct performance obligation and is recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. The following table represents the percentage of September 30, 2017,revenue recognized either at a point in time or over time:
Three months ended
March 31,
Timing of revenue recognition20232022
Products transferred at a point in time40 %37 %
Products and services transferred over time60 %63 %
Net sales100 %100 %

Contract balances

Contract assets are the rights to consideration in exchange for goods or services that the Company does not anticipate additional restructuring costshas transferred to be incurred througha customer when that right is conditional on something other than the endpassage of time. Contract assets of the plan.Company primarily relate to the Company's rights to consideration for goods shipped and services provided but not contractually billable at the reporting date.


Strategic Alliance Plan

On November 10, 2016,The contract assets are reclassified into the Company entered into a strategic alliance plan withreceivables balance when the Inspur Group, a Chinese cloud computingrights to receive payment become unconditional. Contract liabilities are recorded for any services billed to customers and data center company, to develop, manufacture and distribute banking solutionsnot yet recognizable if the contract period has commenced or for the amount collected from customers in China. The Company did not incur restructuring charges during the three and nine months ended September 30, 2017 related to this plan. The Company anticipates additional restructuring costs primarily related to severance of approximately $1.0 to be incurred through the endadvance of the plan.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. Contract assets are minimal for the periods presented.


The following table summarizesprovides information about receivables and deferred revenue, which represent contract liabilities from contracts with customers:
Contract balance informationTrade receivablesContract liabilities
Balance at December 31, 2022$612.2 $453.2 
Balance at March 31, 2023$627.1 $486.7 

There have been $7.2 and $4.6 of impairment losses recognized as bad debt related to receivables or contract assets arising from the Company's cumulative total restructuring costs by plancontracts with customers during the three months ended March 31, 2023 and 2022, respectively.

As of December 31, 2022, the Company had $453.2 of unrecognized deferred revenue constituting the remaining performance obligations that are unsatisfied (or partially unsatisfied). During the three months ended March 31, 2023, the Company recognized revenue of $122.1 related to the Company's deferred revenue balance at December 31, 2022.

Transaction price allocated to the remaining performance obligations

As of March 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1,400. 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 does not disclose information about remaining performance obligations that have original expected durations of one year or less.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017:March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

 DN2020 Plan Delta Program Strategic Alliance Total

       
Services$54.5
 $0.1
 $2.0
 $56.6
Software6.8
 1.8
 0.1
 8.7
Systems18.7
 —
 3.6
 22.3
Corporate7.5
 1.3
 —
 8.8
Total$87.5
 $3.2
 $5.7
 $96.4


Note 16: Finance Lease Receivables

Under certain circumstances, the Company provides financing arrangements to customers that are largely classified and accounted for as sales-type leases. 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.

The following table summarizespresents the Company’s restructuring accrual balancescomponents of finance lease receivables:
March 31, 2023December 31, 2022
Gross minimum lease receivables$29.4 $28.1 
Allowance for credit losses(0.2)(0.2)
Estimated unguaranteed residual values0.1 0.1 
29.3 28.0 
Less:
Unearned interest income(1.5)(1.5)
Total$27.8 $26.5 

Future minimum payments due from customers under finance lease receivables as of March 31, 2023 are as follows:
2023$7.3 
20245.9 
20255.2 
20265.0 
20273.7 
Thereafter2.3 
$29.4 

There were no significant changes in provision for credit losses, recoveries and related activity forwrite-offs during the ninethree months ended September 30:March 31, 2023 or 2022.


  2017 2016
Balance at January 1 $89.9
 $4.7
Liabilities incurred 44.7
 12.8
Liabilities acquired (8.2) 45.5
Liabilities paid/settled (57.8) (11.7)
Balance at September 30, $68.6
 $51.3

Note 20:17: Segment Information


During the second quarter of 2022, the Company appointed a new Chief Executive Officer, who is also the CODM, and announced an organizational simplification initiative. In connection with those events, the Company's reportable segments are no longer Americas Banking, Eurasia Banking and Retail, and instead the reportable operating segments are the following: Banking and Retail. Under the simplified organization and related restructuring discussed in Note 8, the Company does not have regionally focused direct reports to the CODM, and the CODM analyzes Banking and Retail on a global basis and not based on regional profitability metrics.

The Company's accounting policies derivenew reportable segment results that are the same as thoseinformation below directly aligns with how the CODM regularly reviews and usesresults to make decisions, allocate resources and assess performance. The new Banking segment's sales and cost of sales are the summation of the legacy Americas Banking and Eurasia Banking's sales and cost of sales. The Company will continually considersconsider its operating structure and the information subject to regular reviewreview.

Segment operating profit (loss) as disclosed herein is consistent with the segment profit or loss measure used by its Chief Executive Officer, who is the CODM to identify reportable operating segments. The Company’s operating structure is based on a numberand does not include corporate charges, amortization of factors that management uses to evaluate, viewacquired intangible assets, asset impairment, restructuring and run itstransformation charges, the results of the held-for-sale European retail business, operations, which currently includes, but isor other non-routine, unusual or infrequently occurring items, as the CODM does not limited to, product, serviceregularly review and solution. The Companyuse such financial measures the performance of each segment based on several metrics, including net sales and segment operating profit. The CODM uses these results to make decisions, allocate resources and assess performance by the LOBs.performance.



Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)

Segment revenue represents revenues from sales to external customers. Segment operating profit is defined as revenues less expenses identifiabledirectly attributable to thosethe segments. The Company does not allocate to its segments certain operating expenses which it managesare managed at the corporateheadquarters level; that are not routinely used in the management of the segments; or information that issegments, not segment-specific, and impractical to report. These unallocated costs include certainallocate. In some cases the allocation of corporate costs, amortization of acquired intangible assets and deferred revenue, restructuring charges impairment charges, legal, indemnification, and professional fees relatedhas changed from the legacy structure to corporate monitor efforts, acquisition and divestiture expenses, along with other income (expenses).the new structure, but prior periods have been recast to conform to the new presentation. Segment operating profit reconciles to consolidated income (loss) from continuing operations before income taxes by deducting corporate costs and other income or expense items that are not attributed to the segments.segments and which are managed independently of segment results. Assets are not allocated to segments, and thus are not included in the assessment of segment performance, and consequently, we do not disclose total assets and depreciation and amortization expense by reportable operating segment.

In August 2016, in connection with the business combination agreement related to the Acquisition, the Company announced the realignment of its lines of business to drive greater efficiency and further improve customer service. During the first quarter of 2017, the Company reorganized the management team reporting to the CODM and evaluated and assessed the LOB reporting structure. The Company's reportable operating segments are based on the following three LOBs: Services, Systems, and Software.

33
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


As a result, the Company reclassified comparative periods for consistency. The presentation of comparative periods also reflects the reclassification of certain global manufacturing administration expenses from corporate charges not allocated to segments to segment operating profit.

Services
Product-related services provided by the Company 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 global service supply chain optimizes the process for obtaining replacement parts, making repairs, and implementing new features and functionality. 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.

Software
The Company provides front end applications for consumer connection points and back end platforms that manage channel transactions, operations and integration. The Company’s hardware-agnostic software applications facilitate millions of transactions via ATMs, point of sale (POS) terminals, kiosks, and a host of other self-service devices. The Company’s platform software facilitates omni-channel transactions, endpoint monitoring, remote asset management, marketing, merchandise management and analytics.

The professional services team provides systems integration, customization, consulting and project management. The Company’s advisory services team collaborates with its customers to help define optimal user experience, improve business processes, refine existing staffing models and deploy technology to meet branch automation objectives.

Systems
The systems portfolio consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation tools, physical security devices, integrated and mobile POS systems. 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 self-checkout terminals and ordering kiosks.


34
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)



The following tables representpresent information regarding the Company’s segment informationperformance and providesprovide a reconciliation between segment operating profit and the consolidated income (loss) from continuing operations before income taxes:
Three months ended
March 31,
 20232022
Net sales summary by segment
Banking$592.9 $562.7 
Retail260.4 261.7 
Held for sale non-core European retail business(7)
4.8 5.4 
Total revenue$858.1 $829.8 
Segment operating profit
Banking$79.9 $46.1 
Retail39.1 24.2 
Total segment operating profit$119.0 $70.3 
Corporate charges not allocated to segments (1)
$(69.0)$(71.2)
Impairment of assets (2)
(0.9)(55.2)
Amortization of Wincor Nixdorf purchase accounting intangible assets(3)
(17.7)(18.5)
Restructuring and transformation expenses(4)
(15.0)— 
Refinancing related costs(5)
(14.1)— 
Net non-routine expense(6)
(0.7)(2.4)
Held for sale non-core European retail business(7)
(3.7)(6.4)
(121.1)(153.7)
Operating loss(2.1)(83.4)
Other income (expense)(88.2)(48.9)
Loss before taxes$(90.3)$(132.3)
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Net sales summary by segment        
Services $605.9
 $484.6
 $1,759.3
 $1,131.1
Software 119.8
 86.4
 337.9
 139.4
Systems 397.0
 412.3
 1,262.2
 802.4
Total revenue $1,122.7
 $983.3
 $3,359.4
 $2,072.9
         
Segment operating profit        
Services $88.8
 $77.5
 $247.0
 $211.5
Software 11.1
 7.6
 22.8
 (0.5)
Systems (1.3) (5.0) (6.8) (34.1)
Total segment operating profit 98.6
 80.1
 263.0
 176.9
         
Corporate charges not allocated to segments (1)
 (16.1) (32.2) (98.4) (86.7)
Restructuring charges (17.4) (7.4) (44.7) (12.8)
Net non-routine expense (72.7) (127.2) (206.2) (159.5)
  (106.2) (166.8) (349.3) (259.0)
Operating profit (loss) (7.6) (86.7) (86.3) (82.1)
Other income (expense) (21.7) (29.3) (77.7) (49.7)
Income (loss) from continuing operations before taxes $(29.3) $(116.0) $(164.0) $(131.8)
(1)
Corporate charges not allocated to segments include headquarter-based costs associated with procurement, human resources, compensation and benefits, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global information technology, tax, treasury and legal.


(1)    Corporate charges not allocated to segments include headquarter-based costs associated primarily with human resources, finance, IT and legal that are not directly attributable to a particular segment and are separately assessed by the CODM for purposes of making decisions, assessing performance and allocating resources.
(2)Impairment of $0.9 in the first quarter of 2023 relates to leased European facilities closures and $55.2 in the first quarter 2022 related to impairment of capitalized cloud-based North America ERP costs of $38.4, and as a result of the Russian incursion into Ukraine and the related economic sanctions, the Company impaired $16.8 of assets connected with the Company's operations in Russia, Ukraine and Belarus.
(3)    The amortization of purchase accounting intangible assets is not included in the segment results used by the CODM to make decisions, allocate resources or assess performance.
(4)    Refer to Note 8 for further information regarding restructurings. Consistent with the historical reportable segment structure, restructuring and transformation costs are not assigned to the segments, and are separately analyzed by the CODM.
(5)    Refinancing related costs are fees earned by our advisors that have been accounted for as period expense.
(6)Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the LOBs. Net non-routine expense of $206.2 forreportable operating segments as they are not included in the nine months ended September 30, 2017 was duemeasure used by the CODM to legal, acquisitionmake decisions, allocate resources and divestiture expenses of $16.1 inclusive of the mark-to-market impact on Diebold Nixdorf AG stock options and Acquisition integration expenses of $54.8 primarily within selling and administrative expense and purchase accounting pretax charges, which included deferred revenue of $30.4 and amortization of acquired intangibles of $98.0 and an increase in cost of sales of $1.9 related to measurement period adjustments of inventory. Net non-routine expense of $159.5 for the nine months ended September 30, 2016 was primarily due to legal, acquisition and divestiture related costs of $96.3 within selling and administrative expense.

The following table presents information regarding the Company’s revenue by service and product solution:assess performance.

  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
Banking        
Services and software $564.2
 $483.9
 $1,651.2
 $1,187.3
Systems 273.6
 279.0
 850.1
 647.5
Total banking 837.8
 762.9
 2,501.3
 1,834.8
Retail        
Services and software 161.5
 87.1
 446.0
 87.1
Systems 123.4
 133.3
 412.1
 151.0
Total retail 284.9
 220.4
 858.1
 238.1
  $1,122.7
 $983.3
 $3,359.4
 $2,072.9


35
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



Note 21: Divestitures

During 2017,(7)    Held for sale non-core European retail business represents the Company divested its legacy Dieboldrevenue and operating profit of a business in the U.K. to Cennox Groupthat has been classified as held for $5.0, fulfilling the requirements previously set forth by the U.K. Competition and Markets Authority (CMA). 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 Company's routine efforts to evaluate its business operations, during 2017, the Company agreed to sell its electronic security (ES) businesses located in Mexico and Chile to a wholly-owned subsidiary of Securitas AB and Avant, respectively. The Company recorded a pre-tax gain of $2.2 related to these transactions. The combined net sales of the divestitures represented less than one percent of total net sales of the Company for 2017 and 2016.

In December 2015, the Company announced it was forming a new strategic alliance with a subsidiary of the Inspur Group, a Chinese cloud computing and data center company, to develop, manufacture and distribute banking solutions in China. The Inspur Group will hold a majority stake of 51.0 percent in the new jointly owned company, Inspur JV. In November 2016, the Inspur JV was formed and the Company did not have a significant gain or loss from the transaction. The Inspur JV offers a complete range of self-service terminals within the Chinese market, including ATMs. The Company serves as the exclusive distributor outside of China for all products developed by the Inspur JV, which is sold under the Diebold Nixdorf brand. The Company does not consolidate Inspur JV and includes its results of operations in equity in earnings of an investee included in other income (expense) of the condensed consolidated statements of operations.

In addition, to support the services-led approach to the market, the Company will divest a minority share of its current China operations to the Inspur Group. Moving forward, this business will be focused on providing a whole suite of services, including installation, maintenance, professional and managed services related to ATMs and other automated transaction solutions.

During the third quarter of 2016, the Company received cash proceeds of $27.7 related to the sale of stock in its Aevi International GmbH and Diebold Nixdorf AG China subsidiaries. In addition to the cash proceeds received, the Company recorded deferred payments of $44.7 for the divestiture of its Diebold Nixdorf AG China subsidiaries. The Diebold Nixdorf AG China sale was reflected in the opening balance sheet and no gain or loss was recorded. The Diebold Nixdorf AG China sale was in connection with the June 2016 Diebold Nixdorf AG announcement to establish a strategic alliance with Aisino Corporation, to position itself in China to offer solutions that meet Chinese banking regulations. Aisino Corporation is a Chinese company that specializes in intelligent anti-forgery tax control systems, electronic fund transfer (EFT) POS solutions, financial IC cards, bill receipt printing solutions and public IT security solutions. Following the closing of the transaction, the Company holds a noncontrolling interest in the Aisino JV of 43.6 percent. The Company includes the Aisino JV results of operations in equity in earnings of investees included in other income (expense) of the condensed consolidated statements of operations.

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 ES business 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, which was paid in the first quarter of 2016. For ES to continue its growth, it would require resources and investment that Diebold Nixdorf is not committed to make given its focus on the self-service market. The Company recorded a pre-tax gain of $239.5 on the ES divestiture, which was recognized during 2016.

The Company had 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, of which $5.0 relates to a quarterly payment to Securitas Electronic Security and $1.0 is a credit against payments due from Securitas Electronic Security. During the year ended December 31, 2016, $5.0 was paid as part of the quarterly payments and $1.0 was used against amounts owed by Securitas Electronic Security, fulfilling the Company's obligation.

The closing of the transaction occurred on February 1, 2016. The operating results for the NA electronic security business were previously included in the Company's former NA segment and have been reclassified to discontinued operations for all of the periods presented. Cash flows provided orpresented, but which was removed in 2022 from the retail segment's information used by the NA electronic security businessCODM to make decisions, assess performance and allocate resources, and now is individually analyzed. This change and timing thereof aligns with the build-out of a data center that makes the entity capable of operating autonomously and is consistent with material provided in connection with our refinancing effort which are presented as cash flows from discontinued operations for allexclusive of this entity. The first quarter of 2022 has been restated above to exclude the results of the periods presented. The operating results, assets and liabilities and cash flows from discontinued operations are no longer included in the financial statements of the Companyheld for sale non-core European retail business from the closing date.Retail segment for comparability to current year results.


The following table presents information regarding the Company’s segment net sales by service and product solution:
Three months ended
March 31,
20232022
Segments
Banking
Services$381.1 $383.7 
Products211.8 179.0 
Total Banking592.9 562.7 
Retail
Services133.2 140.0 
Products127.2 121.7 
Total Retail260.4 261.7 
Held for sale non-core European retail business
Services2.1 2.5 
Products2.7 2.9 
Total revenue$858.1 $829.8 



36

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except share and per share amounts)



The following summarizes select financial information included in income from discontinued operations, net of tax:
  Three Months Ended Nine Months Ended
  September 30, 2016 September 30, 2016
Net sales    
Services and software $—
 $16.3
Systems —
 8.5
  —
 24.8
Cost of sales    
Services and software —
 15.1
Systems —
 6.9
  —
 22.0
Gross profit —
 2.8
Selling and administrative expense —
 4.8
Income from discontinued operations before taxes —
 (2.0)
Income tax benefit —
 (0.7)
  —
 (1.3)
     
Gain on sale of discontinued operations before taxes (3.8) 239.5
Income tax (benefit) expense 0.8
 94.5
Gain on sale of discontinued operations, net of tax (4.6) 145.0
Income from discontinued operations, net of tax $(4.6) $143.7


37
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Note 22: Supplemental Guarantor Information18: Cloud Implementation


TheAt December 31, 2021, the Company issuedhad capitalized $50.7 of cloud implementation costs, which are presented in the 2024 Senior Notes in an offering exempt from the registration requirementsOther assets caption of the Securities Actcondensed consolidated balance sheets. During the first quarter of 2022, the Company impaired $38.4 of capitalized cloud implementation costs related to a cloud-based North American enterprise resource planning (ERP) system, which was intended to replace the on premise ERP currently in use. In connection with the Acquisition. The 2024 Senior Notes areexecutive transition that took place in the first quarter of 2022 and will be guaranteed by certainthe culmination of related process optimization workshops in March 2022, the Company made the decision to indefinitely suspend the cloud-based North America ERP implementation, which was going to require significant additional investment before it could function as well as our current North America ERP, and to instead focus the Company's ERP implementation efforts on the distribution subsidiaries, which can better leverage the standardization and simplification initiatives connected with the cloud-based implementation. As a result of the Company's existing and future domestic subsidiaries. The following presentscompleted process optimization walkthroughs, 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 governing the Company's obligations under the 2024 Senior Notes;

(iii)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 its subsidiaries, and (c) record consolidating entries; and

(iv)Diebold Nixdorf, Incorporated and Subsidiaries on a consolidated basis.

Each guarantor subsidiary is 100 percent owned byCompany determined that the Parent Companycustomizations already built for the North America ERP should not be leveraged at the datedistribution subsidiaries which require more streamlined and scalable process flows.

At March 31, 2023, the Company had a net book value of each balance sheet presented. The notes are fully and unconditionally guaranteed oncapitalized cloud implementation costs of $19.6, which relates to a joint and several basis by each guarantor subsidiary. The guaranteescombination of the guarantor subsidiaries are subjectdistribution subsidiary ERP and corporate tools to release in limited circumstances only upon the occurrencesupport business operations.

Amortization of certain customary conditions. Each entitycloud implementation fees totaled $0.8 and $0.5 in the consolidating financial information followsthree months ended March 31, 2023 and 2022, respectively. These fees are expensed over the term of the cloud computing arrangement, and the expense is required to be recognized in the same accounting policies as describedline item in the condensed consolidated financial statements, except forincome statement as the use by the Parent Company and the guarantor subsidiaries of the equity method of accounting to reflect ownership interestsassociated hosting service expenses.




Note 19: War 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.Ukraine

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 assetsa Russian distribution subsidiary that generated approximately $45.0 in revenue and liabilities from its non-guarantor subsidiaries$5.0 in operating profit during the year ended December 31, 2021. Due to the Parenteconomic sanctions levied on and economic conditions in Russia, the Company as a resultis making progress towards liquidating the distribution subsidiary.

Additionally, the Company has distribution partners in Russia, Ukraine and Belarus that generated approximately $35.0 in revenue and $5.0 in gross profit during the year ended December 31, 2021. Due to the Russian incursion into Ukraine and the related economic sanctions, the prospect of a common control control transactionre-establishing revenue from these relationships is currently uncertain.

Based on the circumstances outlined above, the Company recorded an impairment charge of $16.8 in connectionthe first quarter of 2022, inclusive of trade receivables from customers in the region that are doubtful of being collected, inventory specifically for customers in the region and various other assets that are not recoverable.

The war in Ukraine has had implication on logistic routes, which is one of several macroeconomic conditions that is negatively impacting our supply chain. We are not particularly reliant on specific suppliers based in the affected areas, but circumvention has impacted lead times of inbound product. Management has identified elevated cybersecurity risk related to the matter, and has implemented mitigation strategies. The net cost of these risks in addition to the aforementioned liquidation, management of economic sanctions, humanitarian efforts and other related expenditures offset with certain recoveries was not material during the Company's integration efforts of the Acquisition to optimize its operations.three months ended March 31, 2023.



38

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Balance Sheets
As of September 30, 2017
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
ASSETS
Current assets         
Cash and cash equivalents$59.3
 $2.5
 $318.9
 $—
 $380.7
Short-term investments—
 —
 64.0
 —
 64.0
Trade receivables, net167.6
 1.3
 743.0
 —
 911.9
Intercompany receivables729.0
 916.0
 2,086.6
 (3,731.6) —
Inventories187.1
 —
 620.7
 —
 807.8
Prepaid expenses12.5
 1.4
 50.6
 —
 64.5
Income taxes—
 4.1
 132.8
 (4.9) 132.0
Other current assets16.1
 1.0
 204.3
 (6.0) 215.4
Total current assets1,171.6
 926.3
 4,220.9
 (3,742.5) 2,576.3
Securities and other investments92.5
 —
 —
 —
 92.5
Property, plant and equipment, net89.1
 2.6
 276.0
 —
 367.7
Goodwill55.5
 —
 1,050.4
 —
 1,105.9
Deferred income taxes236.8
 7.8
 93.4
 —
 338.0
Finance lease receivables3.4
 3.1
 9.9
 —
 16.4
Intangible assets, net0.8
 9.3
 783.4
 —
 793.5
Investment in subsidiary2,525.4
 —
 —
 (2,525.4) —
Other assets37.5
 —
 45.5
 (11.9) 71.1
Total assets$4,212.6
 $949.1
 $6,479.5
 $(6,279.8) $5,361.4
          
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities         
Notes payable$46.8
 $0.4
 $24.7
 $—
 $71.9
Accounts payable111.0
 0.5
 467.6
 —
 579.1
Intercompany payable1,343.5
 178.9
 2,209.2
 (3,731.6) —
Deferred revenue77.4
 0.6
 291.4
 —
 369.4
Payroll and other benefits liabilities28.4
 1.6
 171.3
 —
 201.3
Other current liabilities83.7
 2.3
 461.5
 (10.9) 536.6
Total current liabilities1,690.8
 184.3
 3,625.7
 (3,742.5) 1,758.3
Long-term debt1,713.2
 0.1
 121.2
 —
 1,834.5
Pensions, post-retirement and other benefits210.7
 —
 70.8
 —
 281.5
Deferred income taxes13.3
 —
 269.3
 —
 282.6
Other liabilities12.4
 —
 115.2
 (20.5) 107.1
Commitments and contingencies         
Redeemable noncontrolling interests—
 —
 485.7
 —
 485.7
Total Diebold Nixdorf, Incorporated shareholders' equity572.2
 764.7
 1,752.1
 (2,516.8) 572.2
Noncontrolling interests—
 —
 39.5
 —
 39.5
Total liabilities, redeemable noncontrolling interests and equity$4,212.6
 $949.1
 $6,479.5
 $(6,279.8) $5,361.4

39
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Balance Sheets
As of December 31, 2016
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
ASSETS
Current assets         
Cash and cash equivalents$138.9
 $2.3
 $511.5
 $—
 $652.7
Short-term investments—
 —
 64.1
 —
 64.1
Trade receivables, net140.1
 —
 696.4
 (0.6) 835.9
Intercompany receivables883.0
 783.7
 497.0
 (2,163.7) —
Inventories147.9
 16.2
 573.6
 —
 737.7
Prepaid expenses15.0
 1.1
 44.6
 —
 60.7
Income taxes0.3
 25.4
 84.9
 (25.4) 85.2
Other current assets5.1
 1.6
 176.6
 —
 183.3
Total current assets1,330.3
 830.3
 2,648.7
 (2,189.7) 2,619.6
Securities and other investments94.7
 —
 —
 —
 94.7
Property, plant and equipment, net102.9
 9.0
 275.1
 —
 387.0
Goodwill55.5
 —
 942.8
 —
 998.3
Deferred income taxes173.7
 7.8
 128.0
 —
 309.5
Finance lease receivables4.8
 4.8
 15.6
 —
 25.2
Intangible assets, net1.8
 13.6
 757.5
 —
 772.9
Investment in subsidiary2,609.5
 —
 9.9
 (2,619.4) —
Other assets7.8
 0.1
 55.2
 —
 63.1
Total assets$4,381.0
 $865.6
 $4,832.8
 $(4,809.1) $5,270.3
          
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities         
Notes payable$30.9
 $1.3
 $74.7
 $—
 $106.9
Accounts payable109.1
 1.1
 450.9
 (0.6) 560.5
Intercompany payable1,421.2
 175.9
 566.6
 (2,163.7) —
Deferred revenue122.3
 0.7
 281.2
 —
 404.2
Payroll and other benefits liabilities22.9
 1.4
 148.2
 —
 172.5
Other current liabilities156.1
 3.9
 445.8
 (25.4) 580.4
Total current liabilities1,862.5
 184.3
 1,967.4
 (2,189.7) 1,824.5
Long-term debt1,690.5
 0.4
 0.5
 —
 1,691.4
Pensions, post-retirement and other benefits212.6
 —
 84.6
 —
 297.2
Deferred income taxes13.4
 —
 287.2
 —
 300.6
Other liabilities10.6
 —
 77.1
 —
 87.7
Commitments and contingencies         
Redeemable noncontrolling interests—
 —
 44.1
 —
 44.1
Total Diebold Nixdorf, Incorporated shareholders' equity591.4
 680.9
 1,938.5
 (2,619.4) 591.4
Noncontrolling interests—
 —
 433.4
 —
 433.4
Total liabilities, redeemable noncontrolling interests and equity$4,381.0
 $865.6
 $4,832.8
 $(4,809.1) $5,270.3




40
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Three Months Ended September 30, 2017
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
          
Net sales$289.1
 $0.6
 $833.0
 $—
 $1,122.7
Cost of sales233.0
 1.8
 646.9
 —
 881.7
Gross profit56.1
 (1.2) 186.1
 —
 241.0
Selling and administrative expense65.2
 2.7
 140.9
 —
 208.8
Research, development and engineering expense1.0
 10.8
 22.4
 —
 34.2
(Gain) loss on sale of assets, net(0.1) 0.1
 5.6
 —
 5.6
 66.1
 13.6
 168.9
 —
 248.6
Operating profit (loss)(10.0) (14.8) 17.2
 —
 (7.6)
Other income (expense)         
Interest income0.6
 0.1
 3.6
 —
 4.3
Interest expense(25.7) —
 (2.0) —
 (27.7)
Foreign exchange gain (loss), net0.5
 —
 2.7
 —
 3.2
Equity in earnings of subsidiaries11.0
 —
 —
 (11.0) —
Miscellaneous, net1.7
 1.8
 (4.7) (0.3) (1.5)
Income (loss) from continuing operations before taxes(21.9) (12.9) 16.8
 (11.3) (29.3)
Income tax (benefit) expense13.5
 2.6
 (16.6) —
 (0.5)
Net income (loss)(35.4) (15.5) 33.4
 (11.3) (28.8)
Net income attributable to noncontrolling interests—
 —
 6.6
 —
 6.6
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(35.4) $(15.5) $26.8
 $(11.3) $(35.4)
Comprehensive income (loss)$(22.5) $(15.5) $56.3
 $(32.4) $(14.1)
Less: comprehensive income (loss) attributable to noncontrolling interests—
 —
 8.4
 —
 8.4
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated$(22.5) $(15.5) $47.9
 $(32.4) $(22.5)

41
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Three Months Ended September 30, 2016
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
          
Net sales$301.3
 $22.5
 $681.6
 $(22.1) $983.3
Cost of sales229.2
 24.4
 554.1
 (22.0) 785.7
Gross profit72.1
 (1.9) 127.5
 (0.1) 197.6
Selling and administrative expense30.0
 2.9
 220.6
 —
 253.5
Research, development and engineering expense1.0
 10.8
 19.5
 —
 31.3
(Gain) loss on sale of assets, net—
 (0.1) (0.4) —
 (0.5)
 31.0
 13.6
 239.7
 —
 284.3
Operating profit (loss)41.1
 (15.5) (112.2) (0.1) (86.7)
Other income (expense)         
Interest income1.0
 0.1
 4.2
 —
 5.3
Interest expense(32.2) —
 (1.5) 1.3
 (32.4)
Foreign exchange gain (loss), net1.8
 (0.1) 0.3
 —
 2.0
Equity in earnings of subsidiaries(96.4) —
 —
 96.4
 —
Miscellaneous, net(5.5) 2.2
 0.4
 (1.3) (4.2)
Income (loss) from continuing operations before taxes(90.2) (13.3) (108.8) 96.3
 (116.0)
Income tax (benefit) expense7.5
 1.4
 (27.7) —
 (18.8)
Income (loss) from continuing operations, net of tax(97.7) (14.7) (81.1) 96.3
 (97.2)
Income (loss) from discontinued operations, net of tax(4.6) —
 —
 —
 (4.6)
Net income (loss)(102.3) (14.7) (81.1) 96.3
 (101.8)
Net income attributable to noncontrolling interests—
 —
 0.5
 —
 0.5
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(102.3) $(14.7) $(81.6) $96.3
 $(102.3)
Comprehensive income (loss)$(107.0) $(14.7) $(81.9) $97.1
 $(106.5)
Less: comprehensive income (loss) attributable to noncontrolling interests—
 —
 0.5
 —
 0.5
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated$(107.0) $(14.7) $(82.4) $97.1
 $(107.0)



42
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Nine Months Ended September 30, 2017
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
          
Net sales$831.0
 $6.9
 $2,526.6
 $(5.1) $3,359.4
Cost of sales667.3
 10.5
 1,965.4
 (5.1) 2,638.1
Gross profit163.7
 (3.6) 561.2
 —
 721.3
Selling and administrative expense211.5
 7.7
 473.4
 —
 692.6
Research, development and engineering expense1.8
 30.5
 82.1
 —
 114.4
Impairment of assets3.1
 —
 —
 —
 3.1
(Gain) loss on sale of assets, net—
 0.1
 (2.6) —
 (2.5)
 216.4
 38.3
 552.9
 —
 807.6
Operating profit (loss)(52.7) (41.9) 8.3
 —
 (86.3)
Other income (expense)         
Interest income1.7
 0.2
 13.9
 —
 15.8
Interest expense(84.4) (0.1) (6.2) —
 (90.7)
Foreign exchange gain (loss), net3.1
 0.1
 (7.7) —
 (4.5)
Equity in earnings of subsidiaries(42.3) —
 —
 42.3
 —
Miscellaneous, net9.0
 5.9
 (12.0) (1.2) 1.7
Income (loss) from continuing operations before taxes(165.6) (35.8) (3.7) 41.1
 (164.0)
Income tax (benefit) expense(40.8) (17.7) (0.9) —
 (59.4)
Net income (loss)(124.8) (18.1) (2.8) 41.1
 (104.6)
Net income attributable to noncontrolling interests—
 —
 20.2
 —
 20.2
Net income (loss) attributable to Diebold Nixdorf, Incorporated$(124.8) $(18.1) $(23.0) $41.1
 $(124.8)
Comprehensive income (loss)$17.1
 $(18.1) $179.0
 $(137.2) $40.8
Less: comprehensive income (loss) attributable to noncontrolling interests—
 —
 23.7
 —
 23.7
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated$17.1
 $(18.1) $155.3
 $(137.2) $17.1


43
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Nine Months Ended September 30, 2016
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
          
Net sales$852.2
 $75.2
 $1,219.4
 $(73.9) $2,072.9
Cost of sales629.8
 80.2
 944.7
 (73.3) 1,581.4
Gross profit222.4
 (5.0) 274.7
 (0.6) 491.5
Selling and administrative expense186.1
 8.4
 311.9
 —
 506.4
Research, development and engineering expense3.3
 34.6
 29.5
 —
 67.4
(Gain) loss on sale of assets, net0.2
 (0.1) (0.3) —
 (0.2)
 189.6
 42.9
 341.1
 —
 573.6
Operating profit (loss)32.8
 (47.9) (66.4) (0.6) (82.1)
Other income (expense)         
Interest income2.0
 0.5
 14.0
 —
 16.5
Interest expense(64.3) (0.1) (8.0) 4.2
 (68.2)
Foreign exchange gain (loss), net(1.2) (0.1) (0.3) —
 (1.6)
Equity in earnings of subsidiaries(66.1) —
 —
 66.1
 —
Miscellaneous, net(1.9) 5.4
 4.3
 (4.2) 3.6
Income (loss) from continuing operations before taxes(98.7) (42.2) (56.4) 65.5
 (131.8)
Income tax (benefit) expense(9.7) (3.5) (21.3) —
 (34.5)
Income (loss) from continuing operations, net of tax(89.0) (38.7) (35.1) 65.5
 (97.3)
Income (loss) from discontinued operations, net of tax133.8
 —
 9.9
 —
 143.7
Net income (loss)44.8
 (38.7) (25.2) 65.5
 46.4
Net income attributable to noncontrolling interests—
 —
 1.6
 —
 1.6
Net income (loss) attributable to Diebold Nixdorf, Incorporated$44.8
 $(38.7) $(26.8) $65.5
 $44.8
Comprehensive income (loss)$88.7
 $(39.0) $27.6
 $12.5
 $89.8
Less: comprehensive income (loss) attributable to noncontrolling interests—
 —
 1.1
 —
 1.1
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated$88.7
 $(39.0) $26.5
 $12.5
 $88.7
















44
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2017
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
Net cash used by operating activities$(101.9) $(23.9) $(109.5) $—
 $(235.3)
          
Cash flow from investing activities         
Payments for acquisitions—
 —
 (5.6) —
 (5.6)
Proceeds from maturities of investments0.4
 —
 249.1
 —
 249.5
Payments for purchases of investments(14.0) —
 (246.7) —
 (260.7)
Proceeds from sale of assets—
 —
 14.6
 —
 14.6
Capital expenditures(7.5) (0.1) (34.1) —
 (41.7)
Restricted cash—
 —
 (7.9) —
 (7.9)
Increase in certain other assets(0.6) 3.9
 (30.2) —
 (26.9)
Capital contributions and loans paid(100.2) —
 —
 100.2
 —
Proceeds from intercompany loans193.7
 —
 —
 (193.7) —
Net cash (used) provided by investing activities71.8
 3.8
 (60.8) (93.5) (78.7)
          
Cash flow from financing activities         
Dividends paid(22.9) —
 —
 —
 (22.9)
Debt issuance costs(1.1) —
 —
 —
 (1.1)
Revolving credit facility borrowings (repayments), net—
 —
 120.0
 —
 120.0
Other debt borrowings323.3
 —
 57.7
 —
 381.0
Other debt repayments(344.3) (1.1) (88.1) —
 (433.5)
Distributions to noncontrolling interest holders—
 —
 (16.3) —
 (16.3)
Issuance of common shares0.3
 —
 —
 —
 0.3
Repurchase of common shares(4.8) —
 —
 —
 (4.8)
Capital contributions received and loans incurred—
 53.2
 47.0
 (100.2) —
Payments on intercompany loans—
 (31.8) (161.9) 193.7
 —
Net cash provided (used) by financing activities(49.5) 20.3
 (41.6) 93.5
 22.7
Effect of exchange rate changes on cash and cash equivalents—
 —
 19.3
 —
 19.3
Increase (decrease) in cash and cash equivalents(79.6) 0.2
 (192.6) —
 (272.0)
Cash and cash equivalents at the beginning of the period138.9
 2.3
 511.5
 —
 652.7
Cash and cash equivalents at the end of the period$59.3
 $2.5
 $318.9
 $—
 $380.7


45
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
(in millions, except per share amounts)


Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2016
 Parent 
Combined
Guarantor
Subsidiaries
 
Combined
Non-Guarantor
Subsidiaries
 
Reclassifications/
Eliminations
 Consolidated
Net cash used by operating activities$(224.8) $(34.2) $64.4
 $—
 $(194.6)
          
Cash flow from investing activities         
Payments for acquisitions(995.3) —
 104.7
 —
 (890.6)
Proceeds from maturities of investments0.8
 —
 163.3
 —
 164.1
Proceeds from sale of foreign currency option and forward contracts, net16.2
 —
 —
 —
 16.2
Payments for purchases of investments—
 —
 (155.6) —
 (155.6)
Proceeds from sale of assets—
 —
 28.7
 —
 28.7
Capital expenditures(6.1) (0.5) (17.3) —
 (23.9)
Increase in certain other assets(5.7) (5.0) (7.2) —
 (17.9)
Capital contributions and loans paid(185.0) —
 —
 185.0
 —
Proceeds from intercompany loans83.3
 —
 —
 (83.3) —
Net cash (used) provided by investing activities - continuing operations(1,091.8) (5.5) 116.6
 101.7
 (879.0)
Net cash provided by investing activities - discontinued operations361.9
 —
 —
 —
 361.9
Net cash (used) provided by investing activities(729.9) (5.5) 116.6
 101.7
 (517.1)
          
Cash flow from financing activities         
Dividends paid(57.0) —
 —
 —
 (57.0)
Debt issuance costs(39.2) —
 —
 —
 (39.2)
Revolving credit facility borrowings (repayments), net(168.0) —
 —
 —
 (168.0)
Other debt borrowings1,781.1
 —
 44.6
 —
 1,825.7
Other debt repayments(233.5) (0.6) (185.1) —
 (419.2)
Distributions to noncontrolling interest holders—
 —
 (2.1) —
 (2.1)
Issuance of common shares0.3
 —
 —
 —
 0.3
Repurchase of common shares(2.1) —
 —
 —
 (2.1)
Capital contributions received and loans incurred—
 104.7
 80.3
 (185.0) —
Payments on intercompany loans—
 (69.7) (13.6) 83.3
 —
Net cash provided (used) by financing activities1,281.6
 34.4
 (75.9) (101.7) 1,138.4
Effect of exchange rate changes on cash and cash equivalents—
 —
 9.4
 —
 9.4
(Decrease) increase in cash and cash equivalents326.9
 (5.3) 114.5
 —
 436.1
Add: Cash overdraft included in assets held for sale at beginning of period(1.5) —
 —
 —
 (1.5)
Cash and cash equivalents at the beginning of the period20.3
 7.9
 285.4
 —
 313.6
Cash and cash equivalents at the end of the period$345.7
 $2.6
 $399.9
 $—
 $748.2


46
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

Significant Highlights

During the third quarter of 2017, Diebold Nixdorf:

Was named as the largest manufacturer of automated teller machines (ATMs) by Retail Banking Research's report "Global ATM Market and Forecasts to 2022." The Company's more than 1 million ATMs in service at the end of 2016 represent a 32 percent share of the global installed base.
Received the "Global Self-Checkout Systems Growth Excellence Leadership Award" from Frost & Sullivan in recognition of the Company's product innovation, growth, channel partnership strategies, and ability to serve multiple retailer segments.
Opened a new manufacturing facility in Suzhou, China operated by its strategic alliance partner, Inspur Group. This strategic alliance is enabling the Company to realize procurement advancements through better access to local suppliers, and is enhancing out ability to adapt to market conditions.
Launched new mobility management services offering with enhanced as-a-service, security and data analytics offerings.
Won a number of services contracts valued at more than $300 million total contract value including a new, managed services contract with a multi-national bank for 5,200 ATMs in the United States and the U.K.
•
Teamed with RAKBANK to introduce Samsung PayTM capabilities on more than 250 ATMs in the United Arab Emirates.


Overview


Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that appear within this quarterly reportQuarterly Report on Form 10-Q.


Introduction
The Company enablesautomates, digitizes and transforms the way people bank and shop. The Company’s integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of transactions each day through its connected commerce services, software and systems. Approximately 24,000 employees design and deliver convenient, "always on" and highly secure solutions that bridge the physical and the digital worlds of transactions. Customers of the Company include nearly allconsumers every day. As an innovation partner for a majority of the world's top 100 financial institutions and a majority of the top 25 global retailers.retailers, the Company delivers unparalleled services and technology that power the daily operations and consumer experience of banks and retailers around the world. The Company has a presence in more than 100 countries with approximately 21,000 employees worldwide.


Strategy
The Company is driving connected commerce by enabling banks and retailersfocused on consistently innovating its solutions to create seamless, secure, personal connections across the physical and digital channels of today and tomorrow. This requires the integration of services, software and systems as well as ongoing investment and development in the Company's industry leading field services organization, advanced and innovative technology, as well as open and agile software. The Company continuously refines its research and development (R&D) priorities in support of a better transaction experience for consumers at bank and greater operating efficiencies for customers.retail locations while simultaneously streamlining cost structures and business processes through the integration of hardware, software and services.


DN2020RECENT DEVELOPMENTS
Commensurate with its strategy,
Restructuring Support Agreement

On May 30, 2023, the Company is executing a multi-year integration and transformation program, called DN2020, which aligns employee activitiesParties entered into the Restructuring Support Agreement with the Company's goalConsenting Creditors holding: (i) obligations under the Superpriority Credit Agreement; (ii) term loan obligations under the New Term Loan Credit Agreement; (iii) the 2025 Senior Notes; and (iv) the 2L Notes. The Consenting Creditors collectively hold significant majority of delivering cost savingsthe Companies outstanding secured debt obligations.

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors for the effectuation of $240a deleveraging transaction through, among other things (i) a pre-packaged chapter 11 plan of reorganization to be filed by the year 2020. By executing this program,Debtors in connection with the anticipated commencement by the Debtors of the Chapter 11 Cases under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the Dutch Issuer in connection with the commencement by the Dutch Issuer of the Dutch Scheme Proceedings under the Dutch Restructuring Law in the the Dutch Court and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

Under the Restructuring Support Agreement, the Consenting Creditors have agreed, subject to certain terms and conditions, to support transactions (the Restructuring Transactions) that would result in a financial restructuring of the existing debt of, existing equity interests in the Company expectsParties pursuant to deliver greater innovation for customers, career enrichment opportunities for employees,the Chapter 11 Plan and enhanced value for shareholders. DN2020 consiststhe WHOA Plan.

The Company cannot predict the ultimate outcome of six inter-related elements:

Advancing the Company's Connected Commerce Strategy - Chapter 11 Cases and the Company will continueDutch Scheme Proceedings at this time or the satisfaction of any of the Restructuring Support Agreement milestones yet to come. For the duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the Company’s operations and ability to develop innovative technology and partnerexecute its business plan would be subject to the risks and uncertainties associated with external companies to deliver highly secure, customer-centric solutions. This includes the applicationChapter 11 process and Dutch Restructuring Law process. The amount and composition of cloud computing technology, mobile technology, sensorsthe Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the InternetDutch Scheme Proceedings, and our historical financial performance would likely not be indicative of Things, as well as openour future financial performance. In particular, the description of the Company’s operations, properties and agile software delivered "asliquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

For a service."more detailed discussion of the Restructuring Support Agreement and the Restructuring Transactions, see “Restructuring Support Agreement” in Note 9 to our Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.

Pursuing Finance Excellence - the Company will continuously improve its financial reporting and analysis by adopting best practices from similar business entities. The Company's initiatives are designed to improve forecasting accuracy, optimize working capital management and pursue prudent capital allocation strategies which enhance shareholder value. At present, the Company's capital allocation priorities are to reduce its leverage and accelerate the realization of its synergies.


Going Concern
47

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)


ExecutingOur condensed consolidated financial statements included herein have been prepared using the Company's Integration Plans - going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. Our ability to continue as a going concern is contingent upon, among other things, our ability to successfully implement the Restructuring Transactions contemplated in the Restructuring Support Agreement, subject to the approval of the U.S. Bankruptcy Court and the Dutch Court. The Restructuring Transactions are intended to provide the Company is executingwith additional liquidity and a detailed integration plan to capture incremental valuesustainable capital structure. There can be no certainty that the Restructuring Transactions will be effected or that disruption from the Acquisition,Chapter 11 Cases and Dutch Scheme Proceedings contemplated by harmonizing legacy business practices and building upon the best practices from each legacy company. These integration plansRestructuring Agreement will leveragenot interfere with the Company's global scale, reduce overlap and improve the profitabilityCompany’s business. As of March 31, 2023 substantial doubt exists regarding our ability to continue as a going concern.

For a more detailed discussion of the Company. Key areas of cost synergies include:Going Concern Assessment see “Going Concern Assessment” in Note 1 to our Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.
Realizing volume discounts on direct materials
Harmonizing the solutions set
Increasing utilization rates of the service techniciansSERVICES AND PRODUCT SOLUTIONS
Rationalizing facilities
Streamlining corporate and general and administrative functions
Harmonizing back office solutions

Pursuing Operational Excellence - the Company will implement best practices to improve operational efficiency and increase customer satisfaction to strengthen its industry leadership. Robust reporting and tracking tools will be used to measure progress towards achieving best-in-class service levels and manufacturing efficiencies.

Driving an Innovative Culture, which Attracts Industry-Leading Talent - the Company aims to become an employer of choice in the connected commerce space. We intend to build a culture characterized by innovative technologies and business models, a high degree of customer collaboration, accountability and strong ethical behavior. The Company will encourage experiential learningoffers a broad portfolio of solutions designed to automate, digitize and will invest in training resources to develop a vibrant workforcetransform the way people bank and expand its leadership in connected commerce. Performance-based rewards and recognition policies will be aligned with Company objectives and growth opportunities.

Pursuing Sales Excellence - a capable and progressive sales organization is vital to the future growth of the Company. The Company will invest in the sales organization to ensure it has the skills, resources, and process needed to support customers at all stages of their digital journeys. At the country level, we will optimize sales staffing and invest in partner programs commensurate with overall market demand.shop. As a result, the Company’s operating structure is focused on its two customer segments — Banking and Retail. Leveraging a broad portfolio of these investments,solutions, the Company expectsoffers customers the flexibility to increase its pipelinepurchase the combination of opportunitiesservices and increase its win rate over time.products embedded with software that drive the most value to their businesses.


Banking

The Company expectsprovides integrated solutions for financial institutions of all sizes designed to make investments to restructurehelp drive operational efficiencies, differentiate the workforce, combineconsumer experience, grow revenue and optimize legacy business systems, streamline legal entities and consolidate real estate holdingsmanage risk.

Banking Services

Services represents the largest operational component of approximately $240 in restructuring and integration related costs.

Segments
In August 2016, in connection with the business combination agreement related to the Acquisition, the Company announced the realignment of its lines of business to drive greater efficiency and further improve customer service. As a result of the Acquisition, the Company has reorganized the management team reporting to the CODMincludes product-related services, implementation services and implemented a new LOB reporting structure based on Services, Software and Systems effective on January 1, 2017. The Company reclassified financial data from comparative periods for consistency. The CODM makes decisions, allocates resources and assesses performance by the LOBs.

Services LOB
With approximately 15,000 highly-trained service employees and a global delivery network, Diebold Nixdorf is the global leader in servicing distributed IT assets for banking and retail customers. These services enable customers to meet the growing demand for transaction availability at ATMs, POS, self-checkout systems (SCO) and other distributed IT assets in a cost-effective manner. The Company’s global customer care center offers around-the-clock availability and is proficient in supporting customers in more than 25 languages. The global service supply chain optimizes the process for obtaining replacement parts, making repairs, and implementing new features and functionalities. The Company also possesses deep experience in installing, maintaining and upgrading customer touchpoints manufactured by other vendors, also known as multi-vendor support.

managed services. Product-related services provided by the Company include rapid resolution of incidents are managed through remote service capabilities or an on-site visit. First and second lineThe portfolio includes contracted maintenance, preventive maintenance, “on-demand” maintenance and on-demandtotal implementation services. Implementation services leveragehelp our customers effectively respond to changing customer demands and includes scalable solutions based on globally standardized processes and tools, a standardized incident management process to increase uptimesingle point of distributed IT assets.contact and reliable local expertise. Managed services and outsourcing consists of managing the end-to-end business processes and technology integration. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.

The Company's DN Vynamic software is the first end-to-end software portfolio in the banking marketplace designed to simplify and enhance the consumer experience. This platform is cloud-native, provides new capabilities and supports advanced transactions via open application program interface (API). In addition, the Company’s software suite simplifies operations by eliminating the traditional focus on internal silos and enabling inter-connected partnerships between financial institutions and payment providers. Through its open approach, DN Vynamic brings together legacy systems, enabling new levels of connectivity, integration, and day-to-day operation forinteroperability. The Company’s software suite provides a shared analytic and transaction engine. The DN Vynamic platform can generate new insights to enhance operations; prioritizing consumer preferences rather than technology.

In 2020, the self-service channel, bank branchCompany launched the AllConnect Data Engine (ACDE), which enables a more data-driven and retail store. The majoritypredictive approach to services. As of these contracts include remote monitoringMarch 31, 2023, more than 182,000 devices were connected to ACDE. As the number of connected devices continues to increase, the Company expects to benefit from more efficient and establish a service level threshold for uptime, incident response times and other key performance metrics. The Company's managed solutions enable banks and retailers to realize operational efficiencies while gaining access to industry-leading innovations.cost-effective operations.


48

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

Banking Products


WithThe banking portfolio of products consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation, and kiosk technologies. As financial institutions seek to expand the recent Moxx acquisitionself-service transaction set and other initiatives,reduce operating costs by shrinking their physical branch footprint, the Company expanded its managedoffers the DN Series™ family of self-service solutions.

DN Series is the culmination of several years of investment in consumer research, design and engineering resources. Key benefits and features of DN Series include:

◦superior availability and performance;
◦next-generation cash recycling technology;
◦full integration with the DN Vynamic™ software suite;
◦a modular and upgradeable design, which enables customers to respond more quickly to changing customer demands;
◦higher note capacity and processing power;
◦improved security safeguards to protect customers against emerging physical, data and cyber threats;
◦physical footprint as much as 40% less vs. competing ATMs in certain models;
◦made of recycled and recyclable materials and is 25% lighter than most traditional ATMs, reducing CO2 emissions both in the manufacturing and transportation of components and terminals;
◦uses LED technology and highly efficient electrical systems, resulting in up to 50% power savings versus traditional ATMs; and
◦increased branding options for financial institutions.


Retail

The Company’s comprehensive portfolio of retail services and products improves the checkout process for retailers while enhancing shopping experiences for consumers.

Retail Services

Diebold Nixdorf AllConnect Services® for retailers include maintenance and availability services to include the lifecycle management of all mobile devices in retail stores, bank branches, mobile bar code self-scanners and peripherals, all in a vendor agnostic manner. This offering, called managed mobility services, utilizes real-time business analytics to enable greater business insights and more proactive decision-making tocontinuously optimize the performance and total cost of connected endpoints.ownership of retail touchpoints, such as checkout, self-service and mobile devices, as well as critical store infrastructure. The solutions portfolio includes: implementation services to expand, modernize or upgrade store concepts; maintenance services for on-site incident resolution and restoration of multivendor solutions; support services for on-demand service desk support; operations services for remote monitoring of stationary and mobile endpoint hardware; as well as application services for remote monitoring of multivendor software and planned software deployments and data moves. As a single point of contact, service personnel plan and supervise store openings, renewals and transformation projects, with attention to local details and customers’ global IT infrastructure.


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. These services mitigate customer risks by relying on proven monitoring and reporting processes, secure tools and partnerships with larger cash-in-transit companies.

Under DN2020, the Services LOB has a dual mandate of delivering moderate revenue growth and increased efficiency. Sources of top-line growth include 1) increasing the Company's service attach rate on the unserved Diebold Nixdorf ATMs, POS and SCO systems in use, 2) up-selling current customers on managed services and 3) increasing billed work revenue by leveraging best practices across different countries and regions. The services line will achieve higher levels of efficiency by standardizing the service offerings, implementing standard service tools, optimizing business processes, increasing the market acceptance of remote connection and resolution, and streamlining global delivery centers and stocking facilities.
Software LOB
The Company provides front-end applicationsDN Vynamic software suite for consumer connection points and back-end platforms that manage channel transactions, operations and integration. These hardware-agnostic software applications facilitate millions of transactions via ATMs, POS terminals, kiosks, and other self-service devices. The Company's platform software is installed within bank and retail data centers to facilitate omnichannel transactions, endpoint monitoring, remote asset management, customer marketing, merchandise management and analytics. These offerings include highly configurable, application program interface (API) enabled software that automates legacy banking and retail transactions across channels.

This multi-vendor software portfolio is designed to meet the evolving demands of a customer's self-service network including:
Connection points
Transaction management
Operations and security
Customer engagement
Analytics and digital

In October 2017, the Company introduced Vynamic, the first end-to-end connected commerce software portfolio in the marketplace. This offering establishes an evolutionary path for the Company's current software offerings including Vista, Commander, Xpression, PCE, Procash and TP.net. Vynamic is powered by the analytics and can be delivered as-a-service using cloud computing. Built to enable connected commerce across mobile devices, ATMs, POS terminals, branches, stores, kiosks, and online channels, Vynamic extends beyond omnichannel to enable banks and retailers to create seamless, secure, highly personal connections across numerous digital and physical channels.

For the retail business, the Company provides a comprehensive, modular and open solution suite which is capable of enablingranging from the most advanced omnichannel retail use cases. Now under the Vynamic portfolio, this platform improvesin-store check-out to solutions across multiple channels that improve end-to-end store processes and facilitate continuous consumer engagements in support of omnichannel retailing.a digital ecosystem. This includes click & collect, reserve & collect, in-store ordering and return to storereturn-to-store processes across the retailers' physical and digital sales channels. Retail services and the other components of the Vynamic Application Suite are designed on a modular, API-enabled architecture and can be integrated fully or partially into existing infrastructures. DataOperational data from a number of sources, such as ERP,enterprise resource planning (ERP), POS, store systems and customer relationship management systems (CRM), may be integrated across all customer connection points to create seamless and differentiated omnichannelconsumer experiences.


An important enabler ofIn 2021, the Company’s softwareCompany announced it entered the electric vehicle (EV) charging station services business, is more than 1,600 professional service employeesa market with a customer profile potentially comparable to the existing retail business. Our global services capability, including our technicians, our skills in global spare parts logistics management, and multi-lingual help desks have initially resonated with market participants who provide systems integration, customization, consulting and project management. The Company's advisory services team collaborates with its customers to help define optimal user experience, improve business processes, refine existing staffing models and deploy technology to meet branch automation objectives.own public charging stations.


49

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

Retail Products

In May 2017, the Company announced its strategic partnership with Kony to offer white label mobile application solutions for financial institutions and retailers. The Company’s next generation mobile application suite, DN Mobile, will enable a unified and highly personalized transaction experience by leveraging cross-platform data and integrating multiple channels.


The Company views its software asretail product portfolio includes self-checkout (SCO) products and ordering kiosks facilitate a key differentiator in providing connected commerce solutionsseamless and efficient transaction experience. The BEETLE®/iSCAN EASY eXpress™, hybrid products, can alternate from attended operation to customersSCO with the press of a button. The K-two Kiosk automates routine tasks and is a source of competitive advantage.in-store transactions, offers order-taking abilities, particularly at quick service restaurants (QSRs) and fast casual restaurants and presents functionality that furthers store automation and digitalization. The Company's world-class softwareretail product portfolio is well positioned to capture gains from the bankers and retailers desire to increase automation, mobility, analytics, flexible omnichannel solutions, while transforming their branches and stores.

Systems LOB
Through collaboration with customers, engineering excellence and an efficient supply chain, the Company delivers industry-leading customer touchpoints to banks, retailers and other customers. These systems enable highly secure physical and digital transactions around the world. The Company integrates different components according to customer specifications in order to optimize the total cost of ownership by maximizing transaction availability while creating a positive impression on customers.

The systems portfolio for banking customers consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation tools, and physical security devices. Recent innovation concepts include the miniaturized Extreme ATM, Essence and Fusion. Extreme ATM is the smallest ATM ever developed at less than 10” wide, which allows customers to stage transactions on mobile phones and complete transactions using Bluetooth® devices or near-field communication. Essence is a highly-secure and miniaturized ATM that features a sleek, antimicrobial glass touchscreen display and enhanced user interface modeled after today’s smartphones and tablet computers. Fusion is aalso includes modular and dynamicintegrated, “all-in-one” point of sale (POS) and self-service touchpoint consisting of three interchangeable user interfaces that can connect with three different cash handling platforms.

For retail customers, the checkout portfolio includes modular, integrated and mobile POS systemsterminals that meet evolvingchanging consumer shopping journeys, as well as retailers’ and store staff’s automation and omni-channel requirements of consumers.requirements. 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 self-checkout terminals and ordering kiosks which facilitate an efficient and user-friendly purchasing experience. The Company’s hybrid product line can alternate from attended operation to self-checkout by the cashier with the pressAdditionally, our retail software solutions are inclusive of a button as traffic conditions warrant throughout the business day.cloud native software platform which is hardware agnostic and multi-vendor capable.

Under the DN2020 program, the Company has a dual mandate of introducing new innovations which meet changing consumer demands and increasing operating efficiencies. With respect to innovation, the Company will continue to spend significant R&D dollars on the latest technology, which includes:
Advanced security solutions including anti-skimming card readers, biometric authentication, and a modular, scalable architecture suited for various threat environments and risk appetites;
Advanced sensors and the Internet of Things to facilitate real-time monitoring activities;
Remote and assisted self-service solutions including in-store/branch tablet notifications and two-way video capabilities;
Mobile connectivity to support contactless transactions; and
Miniaturization technologies needed for branch/store transformation.
With respect to operating efficiencies, the Company's activities include:
Leveraging the purchasing power of the Company through a new procurement partnership program;
Streamlining the product portfolio - including terminals, core technologies and components;
Developing a partner ecosystem to complement the Company's core technologies; and
Consolidating manufacturing capacity to optimize fixed costs




50
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

Leveraging the broad portfolio of solutions, the Company enables customers the flexibility to select the combination of services, software and systems that drives the most value to their business. For example, the Company offers end-to-end branch and store automation solutions that consist of the complete value chain of consult, design, build and operate. Branch and store automation helps financial institutions grow revenue, reduce costs, and increase convenience and security for the their customers by migrating routine transactions, typically done inside the branch or store, to lower-cost automated channels. The Company’s advisory services team collaborates with its clients to define the ideal customer experience, modify processes, refine existing staffing models and deploy technologies that meet business objectives.


Business Drivers


The business drivers of the Company's future performance include, but are not limited to:
Demand
•demand for self-service and automation from Banking and Retail customers driven by the evolution of consumer behavior;
•demand for cost efficiencies and better usage of real estate for bank branches and retail stores as they transform their businesses to meet the needs of their customers while facing macro-economic challenges;
•demand for services on distributed IT assets such as ATMs, POS and SCO, including managed services and professional services;
Timing•timing of systemproduct upgrades and/or replacement cycles for ATMs, POS and SCO;
Demand•demand for software products and professional services;
Demand•demand for security products and services for the financial, retail and commercial sectors; and
Integration of legacy salesforce, business processes, procurement, and internal IT systems; and
Realization of cost synergies, which leverage•demand for innovative technology in connection with the Company's global scale, reduce overlapstrategy.

Refinancing Transactions

On October 20, 2022, the Company, certain of its subsidiaries, including Diebold Nixdorf Dutch Holding B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under Dutch law and improve operating efficiencies.a direct wholly owned subsidiary of the Company (the Dutch Subsidiary), and certain initial consenting holders entered into a Transaction Support Agreement (which was subsequently amended on November 28, 2022 and December 20, 2022), to which the other consenting holders became parties (together with all exhibits, annexes and schedules thereto, and as so amended, the Transaction Support Agreement). As contemplated in the Transaction Support Agreement, the following refinancing transactions (the December 2022 Refinancing Transactions) were completed on December 29, 2022:


•The Company and certain of its subsidiaries obtained a new $250.0 asset-based credit facility (the ABL Facility), which will mature in July 2026, subject to a springing maturity to a date that is 91 days prior to the maturity of certain indebtedness of the Company or its subsidiaries above a certain threshold amount. The ABL Facility is provided by, and replaces the commitments of, the Company’s existing revolving credit lenders under the Credit Agreement, dated as of November 23, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Existing Credit Agreement), among the Company, as borrower, the Company’s subsidiary borrowers party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank N.A., as administrative agent.
•Diebold Nixdorf Holding Germany GmbH (the German Borrower), a wholly-owned subsidiary of the Company, obtained a new $400.0 superpriority term loan credit facility (the Superpriority Facility), which will mature in July 2025.
•Certain holders of the term loans (the Existing Term Loans) under the Existing Credit Agreement exchanged such Existing Term Loans at par into extended term loans (the New Term Loans and, such exchange, the Term Loan Exchange), which will mature in July 2025.
•The Company amended the Existing Credit Agreement to, among other things, permit the December 2022 Refinancing Transactions, remove substantially all negative covenants and mandatory prepayments, and direct the collateral agent to release the liens on certain collateral securing the Company’s obligations under the Existing Credit Agreement and

Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
the Company’s existing subsidiary guarantors’ obligations under the related guarantees (in each case, to the extent permitted, including under applicable law).
•The Company consummated a private exchange offer (the Private 2024 Exchange Offer) and consent solicitation with respect to the outstanding 2024 Senior Notes, which included (i) a private offer to certain eligible holders to exchange any and all 2024 Senior Notes for units (the Units) consisting of (a) new 8.50%/12.50% Senior Secured PIK Toggle Notes due 2026 issued by the Company (the 2L Notes) and (b) a number of warrants (the Warrants) to purchase common shares of the Company and (ii) a related consent solicitation to adopt certain proposed amendments to the indenture governing the 2024 Senior Notes (the 2024 Senior Notes Indenture) to eliminate certain of the covenants, restrictive provisions and events of default intended to protect holders, among other things, from such indenture (collectively, the 2024 Exchange Offer and Consent Solicitation).
•(i) Certain holders of the Company’s 9.375% Senior Secured Notes due 2025 (the 2025 USD Senior Notes), issued pursuant to the Indenture, dated as of July 20, 2020 (as amended, the 2025 USD Senior Notes Indenture) exchanged such 2025 USD Senior Notes for new 9.375% Senior Secured Notes due 2025 (the New 2025 USD Senior Notes), being issued under the 2025 USD Senior Notes Indenture and with identical terms to the 2025 USD Senior Notes (after giving effect to the proposed amendments as described below), and (ii) certain holders of the Dutch Subsidiary’s 9.000% Senior Secured Notes due 2025 (the 2025 EUR Senior Notes and, together with the 2025 USD Senior Notes, the 2025 Senior Notes), issued pursuant to that certain Indenture, dated as of July 20, 2020 (the 2025 EUR Senior Notes Indenture) exchanged such 2025 EUR Senior Notes for new 9.00% Senior Secured Notes due 2025 (the New 2025 EUR Senior Notes and, together with the New 2025 USD Senior Notes, the New 2025 Notes). The Company also consummated the related consent solicitations and effected certain proposed amendments to the 2025 USD Senior Notes Indenture and the 2025 EUR Senior Notes Indenture.

Public 2024 Exchange Offer

On February 10, 2023, the Company filed with the SEC a registration statement on Form S-4, registering an exchange offer (the Public 2024 Exchange Offer) with respect to the 2024 Senior Notes, on substantially the same terms as the Private 2024 Exchange Offer, to exchange the remaining 2024 Senior Notes outstanding following the Private 2024 Exchange Offer for Units. The Public 2024 Exchange Offer is currently scheduled to expire on June 5, 2023. The Company is required to raise equity capital prior to the maturity date of the 2024 Senior Notes in an amount necessary to repurchase, redeem, prepay or pay in full the principal amount of any 2024 Senior Notes that are not exchanged in the Public 2024 Exchange Offer in excess of $20 aggregate principal amount of 2024 Senior Notes (such 2024 Senior Notes in excess of $20.0, the Excess Stub Notes). In light of ongoing conversations with the Company's lending partners to address short- and long-term liquidity needs, the Company's capital structure and deleveraging its balance sheet, the Company currently believes that the Public 2024 Exchange Offer will not be consummated.

FILO Facility

On March 21,2023, the Company entered into the FILO Amendment (as defined below), which established the FILO Facility (as defined below). Commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on March 21, 2023. The liquidity provided by the FILO Facility is only expected to sustain the Company through part of the second quarter of 2023.

Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
Results of Operations


The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this quarterly reportQuarterly Report on Form 10-Q.
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
  Amount 
% of
Net sales
 Amount 
% of
Net sales
 Amount 
% of
Net sales
 Amount % of
Net sales
Net sales $1,122.7
 100.0
 $983.3
 100.0
 $3,359.4
 100.0
 $2,072.9
 100.0
Gross profit $241.0
 21.5
 $197.6
 20.1
 $721.3
 21.5
 $491.5
 23.7
Operating expenses $248.6
 22.1
 $284.3
 28.9
 $807.6
 24.0
 $573.6
 27.7
Operating profit (loss) $(7.6) (0.7) $(86.7) (8.8) $(86.3) (2.6) $(82.1) (4.0)
Net income (loss)(1)
 $(28.8) (2.6) $(101.8) (10.4) $(104.6) (3.1) $46.4
 2.2
Net income attributable to noncontrolling interests $6.6
 0.6
 $0.5
 0.1
 $20.2
 0.6
 $1.6
 0.1
Net income (loss) attributable to Diebold Nixdorf, Incorporated $(35.4) (3.2) $(102.3) (10.4) $(124.8) (3.7) $44.8
 2.2
(1) Net income (loss) for the three and nine months ended September 30, 2016 includes income (loss) from discontinued operations, net of tax of $(4.6) and 143.7, respectively.

51
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)



Net Sales


The following table representstables represent information regarding the Company's net sales:

Three months endedPercent of Total Net Sales for the Three months ended
March 31,March 31,
20232022% Change
% Change in CC (1)
20232022
Segments
Banking
Services$381.1 $383.7 (0.7)1.5 44.4 46.2 
Products211.8 179.0 18.3 21.7 24.7 21.6 
Total Banking592.9 562.7 5.4 7.9 69.1 67.8 
Retail
Services135.3 142.5 (5.1)0.8 15.8 17.2 
Products129.9 124.6 4.3 8.9 15.1 15.0 
Total Retail265.2 267.1 (0.7)4.6 30.9 32.2 
Total Net Sales$858.1 $829.8 3.4 6.8 100.0 100.0 
  Three Months Ended     Percent of Total Net Sales for the Three Months Ended
  September 30,     September 30,
  2017 2016 % Change 
% Change in CC (1)
 2017 2016
Segments            
Services $605.9
 $484.6
 25.0
 22.6
 54.0 49.3
Software 119.8
 86.4
 38.7
 33.7
 10.7 8.8
Systems 397.0
 412.3
 (3.7) (6.5) 35.3 41.9
Net sales $1,122.7
 $983.3
 14.2
 11.3
 100.0 100.0
             
Geographic regions            
Americas $395.1
 $473.0
 (16.5) (17.1) 35.2 48.1
EMEA 578.2
 371.4
 55.7
 47.6
 51.5 37.8
AP 149.4
 138.9
 7.6
 6.9
 13.3 14.1
Net sales $1,122.7
 $983.3
 14.2
 11.3
 100.0 100.0
             
Solutions            
Banking $837.8
 $762.9
 9.8
 7.6
 74.6 77.6
Retail 284.9
 220.4
 29.3
 24.0
 25.4 22.4
Net sales $1,122.7
 $983.3
 14.2
 11.3
 100.0 100.0
(1)The Company calculates constant currency by translating the prior-year period results at the current year exchange rate. 

Three months ended September 30, 2017 compared with three months ended September 30, 2016


Net sales increased $139.4$28.3, or 14.23.4 percent, including incremental net sales from the Acquisition of $258.3 and a net favorableunfavorable currency impact of $25.1. The amounts attributable$26.7 primarily related to the Acquisition are impacted byeuro. After excluding the alignmentunfavorable currency impact and integration$12.7 of customer portfolios, solution offerings and operations betweennet sales generated during the legacy companies, which may result in unfavorable comparisons to prior year. The following results include the impact of foreign currency and purchase accounting adjustments:

Segments

Servicesthree months ended March 31, 2022 from divested businesses, net sales increased $121.3, which included incrementalby $67.7.

Segments

•Banking net sales from the Acquisition of $123.4 andincreased $30.2, including a net favorableunfavorable currency impact of $9.8. Excluding$13.1, related primarily to the incrementaleuro. After excluding the unfavorable currency impact and $5.9 of net sales from the Acquisition and currency, services sales decreased $11.9 attributable to lower installation revenue tied to decreased systems volumes and the run-off of multi-vendor service contracts in the Americas. These decreases were partially offsetgenerated by higher service maintenance revenue in EMEA and Asia Pacific (AP). Additionally, AP benefited from higher managed services revenue.

Softwaredivested businesses, net sales increased $33.4,$49.2, which included incrementalwas driven by higher ATM unit sales volume.

•Retail net sales from the Acquisition of $33.9 anddecreased $1.9, including a net favorableunfavorable currency impact of $3.2. Excluding$13.6 primarily related to the incrementaleuro. After excluding the unfavorable currency impact and $6.8 of sales generated by divested businesses, net sales increased $18.5 primarily due to increased volume from the Acquisition and currency, software sales decreased $3.7 attributable to lower sales in EMEA and the Americas as noted in the geographic regions.

Systems net sales decreased $15.3, which included incremental net sales from the Acquisition of $101.0 and a net favorable currency impact of $12.1. Excluding the incremental net sales from the Acquisition and currency, systems net sales decreased $128.4 primarily attributable to fewer large projects in the Americas and EMEA.

A more detailed discussion of segment net sales is included under "Segment Net Sales and Operating Profit Summary" below.


business.
52

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

Gross Profit
Geographic Regions

The following table represents information regarding the Company's gross profit:
Americas net
Three months ended
March 31,
20232022% Change
Gross profit - services$153.4 $152.0 0.9 
Gross profit - products55.9 33.3 67.9 
Total gross profit$209.3 $185.3 13.0 
Gross margin - services29.7 %28.9 %
Gross margin - products16.4 %11.0 %
Total gross margin24.4 %22.3 %

Product gross profit increased due to the product sales increase. Product gross margin increased 540 basis points in the three months ended March 31, 2023 primarily due to lower logistical costs and decreases in certain raw material costs, most notably semiconductor chips. Further increase period over period was due to a favorable mix in sales geography.

Operating Expenses

The following table represents information regarding the Company's operating expenses:
Three months ended
March 31,
20232022% Change
Selling and administrative expense$183.8 $181.0 1.5 
Research, development and engineering expense26.4 32.3 (18.3)
Loss on sale of assets, net0.3 0.2 50.0 
Impairment of assets0.9 55.2 (98.4)
Total operating expenses$211.4 $268.7 (21.3)
Percent of net sales24.6 %32.4 %

Selling and administrative expense increased $2.8 in the three months ended March 31, 2023 compared to the corresponding period in 2022. This increase is the result of refinancing related charges incurred in 2023 related to efforts to obtain additional liquidity and optimize capital structure, which is partially offset by the cost savings initiatives, the most significant of which were headcount reductions that were implemented beginning in the second quarter of 2022.

Research and development costs decreased $77.9 or 16.5 percent. The incremental net sales from the Acquisition accounted for $13.6. Excluding the incremental net sales from the Acquisition, net sales decreased $91.5$5.9 as a result of fewer large systems projectsongoing costs savings initiatives which include the movement of certain research and development activities to lower cost jurisdictions and project prioritization and rationalization.

During the first quarter of 2023, the Company recognized impairment for certain facilities leases in Brazil andthe U.K. as a result of an initiative to streamline administrative office space usage. The Company recognized impairment of its North America (NA)American ERP system of $38.4 as well as the corresponding services revenue associated with the projectsassets in NA. Additionally, services revenue was impacted by lower multi-vendor service contract revenue in NA.

EMEA net sales increased $206.8 or 55.7 percent. The incremental net sales from the Acquisition accounted for $219.1. Excluding the incremental net sales from the Acquisition, net sales decreased $12.3 which was tied to volume decreases in various countries including the divestitureRussia and Ukraine of the Company's legacy U.K. business on June 30, 2017 partially offset by increased systems sales with distributors$16.8 in the region.

AP net sales increased $10.5 or 7.6 percent. The incremental net sales from the Acquisition accounted for $25.6. Excluding the incremental net sales from the Acquisition, net sales decreased $15.1 from lower systems volume related to the market structure change in China partially offset by higher systems and services sales in India and Thailand.

Solutions

Banking net sales increased $74.9 or 9.8 percent. The incremental net sales from the Acquisition accounted for $137.4. Excluding the incremental net sales from the Acquisition, net sales decreased $62.5 primarily attributable to lower systems volumes and the associated installation activitysame period in the Americas. In addition, banking services was adversely impacted by the run-off of multi-vendor service contracts in the Americas, partially offset by an increase in services revenue in AP.prior year.


Retail net sales increased $64.5 or 29.3 percent. The incremental net sales from the Acquisition accounted for $120.9. Excluding the incremental net sales from the Acquisition, net sales decreased $56.4 primarily due to lower demand in Brazil for voting and lottery solutions.



  Nine Months Ended     Percent of Total Net Sales for the Nine Months Ended
  September 30,     September 30,
  2017 2016 % Change 
% Change in CC (1)
 2017 2016
Segments            
Services $1,759.3
 $1,131.1
 55.5
 53.5
 52.4 54.6
Software 337.9
 139.4
 142.4
 135.1
 10.1 6.7
Systems 1,262.2
 802.4
 57.3
 54.6
 37.5 38.7
Net sales $3,359.4
 $2,072.9
 62.1
 59.5
 100.0 100.0
             
Geographic regions            
Americas $1,181.6
 $1,202.9
 (1.8) (3.0) 35.2 58.0
EMEA 1,727.8
 563.7
 206.5
 196.8
 51.4 27.2
AP 450.0
 306.3
 46.9
 47.4
 13.4 14.8
Net sales $3,359.4
 $2,072.9
 62.1
 59.5
 100.0 100.0
             
Solutions            
Banking $2,501.3
 $1,834.8
 36.3
 34.7
 74.5 88.5
Retail 858.1
 238.1
 260.4
 245.5
 25.5 11.5
Net sales $3,359.4
 $2,072.9
 62.1
 59.5
 100.0 100.0
(1) The Company calculates constant currency by translating the prior-year period results at the current year exchange rate. 


53
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

Operating Loss
Nine months ended September 30, 2017 compared with nine months ended September 30, 2016
Net sales increased $1,286.5 or 62.1 percent including incremental net sales from the Acquisition of $1,517.7 and a net favorable currency impact of $33.0 primarily related to the Brazil real and the euro. In addition, net sales was adversely impacted $30.4 related to deferred revenue purchase accounting adjustments. 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 results include the impact of foreign currency and purchase accounting adjustments:

Segments

Services net sales increased $628.2 including incremental net sales from the Acquisition of $652.5 and a net favorable currency impact of $14.7. Excluding the incremental net sales from the Acquisition and currency, net sales decreased $39.0 attributable to the run-off of multi-vendor service contracts as well as lower installation revenue tied to decreased systems volumes in the Americas. This was partially offset by higher managed services net sales in AP. Services net sales also included an unfavorable impact of $15.2 related to purchase accounting adjustments.

Software net sales increased $198.5 including incremental net sales from the Acquisition of $202.5 and a net favorable currency impact of $4.3. Excluding the incremental net sales from the Acquisition and currency, net sales decreased $8.3 primarily related to lower volumes in the Americas and EMEA as noted in the geographic regions.

Systems net sales increased $459.8, including incremental net sales from the Acquisition of $662.7 and a net favorable currency impact of $14.0. Excluding the incremental net sales from the Acquisition and currency, net sales decreased $216.9 as systems net sales were adversely impacted by lower retail solutions activity in the Americas and lower banking solutions activity across the Company. In the Americas and EMEA, the volume declines were primarily due to lower banking project activity and in AP mainly due to structural changes in the market. Services net sales also included an unfavorable impact of $15.3 related to purchase accounting adjustments.

A more detailed discussion of segment net sales is included under "Segment Net Sales and Operating Profit Summary" below.

Geographic Regions

Americas net sales decreased $21.3 or 1.8 percent. The incremental net sales from the Acquisition accounted for $105.8. Excluding the incremental net sales from the Acquisition, net sales decreased $127.1 as a result of fewer large systems projects across the Americas, including Brazil retail solutions. In addition, lower services revenue related to a decrease in multi-vendor service contract volume also adversely impacted the time period.

EMEA net sales increased $1,164.1 or 206.5 percent. The incremental net sales from the Acquisition accounted for $1,228.2. Excluding the incremental net sales from the Acquisition, net sales decreased $64.1 primarily attributable to fewer large projects in Spain, France and in Switzerland. Additionally, lower sales in the U.K. also contributed to the decrease as a result of the divestiture of the Company’s legacy business on June 30, 2017 and is now reported as part of the sales attributed to the Acquisition.

AP net sales increased $143.7 or 46.9 percent. The incremental net sales from the Acquisition accounted for $183.7. Excluding the incremental net sales from the Acquisition, net sales decreased $40.0 primarily due to lower systems volume related to the market structure change in China, partially offset by higher services sales in India.

Solutions

Banking net sales increased $666.5 or 36.3 percent . The incremental net sales from the Acquisition accounted for $836.4. Excluding the incremental net sales from the Acquisition, net sales decreased $169.9 primarily due to lower systems volumes and the associated installation activity across the Company, with lower large project activity impacting all regions. In addition, banking services decreased primarily due to the run-off of multi-vendor service contracts in the Americas and was unfavorably impacted by $18.3 related to purchase accounting adjustments.


54
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

Retail net sales increased $620.0 or 260.4 percent. The incremental net sales from the Acquisition accounted for $681.3. Excluding the incremental net sales from the Acquisition, net sales decreased $61.3 due to lower demand in Brazil for voting solutions and was unfavorably impacted by $12.2 related to purchase accounting adjustments.

Gross Profit

The following table represents information regarding the Company's gross profit:
  Three Months Ended
Nine Months Ended
  September 30,
September 30,
  2017 2016 % Change 2017 2016 % Change
Gross profit - services and software $172.0
 $171.0
 0.6 $501.6
 $402.8
 24.5
Gross profit - systems 69.0
 26.6
 159.4 219.7
 88.7
 147.7
Total gross profit $241.0
 $197.6
 22.0 $721.3
 $491.5
 46.8
             
Gross margin - services and software 23.7% 29.9%   23.9% 31.7%  
Gross margin - systems 17.4% 6.5% 
 17.4% 11.1%  
Total gross margin 21.5% 20.1%   21.5% 23.7%  

Services and software gross margin was lower in the three and nine months ended September 30, 2017 due in part to the impact of the Acquisition, which utilizes a higher third-party labor model to support its service and software revenue stream, resulting in a dilutive effect on margins. Services and software gross margin was also adversely impacted by higher restructuring and non-routine costs compared to the prior year periods. In the three and nine months ended September 30, 2017, services and software gross profit included non-routine charges of $10.5 and $36.5, respectively, primarily related to purchase accounting adjustments associated with the Acquisition. Services and software gross profit also included restructuring charges of $14.0 and $29.6 in the three and nine months ended September 30, 2017, respectively. In the three and nine months ended September 30, 2016, restructuring charges were $2.0 and $3.7, respectively. In addition, gross margin in both the three and nine months ended September 30, 2017 was also impacted by lower contract maintenance revenue in Americas combined with increased labor investments. The labor investments are a result of higher turnover rates of technicians and the associated training to support additional product lines. In the nine months ended September 30, 2017, EMEA was adversely impacted in banking services gross margin due to a change in a western European niche market for cash-in-transit services.

Systems gross margin in the three and nine months ended September 30, 2017 increased primarily as a result of higher purchase accounting adjustments in the prior year and incremental gross profit associated with the Acquisition, which has a larger mix of higher margin business across both banking and retail solutions. Purchase accounting adjustments impacting systems gross margin in the three- and nine-month periods of 2017 were $13.3 and $34.2 compared with $41.1 in both the three- and nine-month periods of 2016. In the three and nine months ended September 30, 2017, systems gross margin was unfavorably impacted as a result of higher margin large projects in the prior year in EMEA and the Americas. In the three and nine months ended September 30, 2017, systems gross profit included non-routine charges of $13.3 and $35.9, respectively, primarily related to purchase accounting adjustments associated with the Acquisition. Systems gross profit also included restructuring charges of $1.2 and $2.8 in the three and nine months ended September 30, 2017, respectively.



55
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

Operating Expenses

The following table represents information regarding the Company's operating expenses:
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017
2016 % Change 2017 2016 % Change
Selling and administrative expense $208.8
 $253.5
 (17.6) $692.6
 $506.4
 36.8
Research, development and engineering expense 34.2
 31.3
 9.3
 114.4
 67.4
 69.7
Impairment of assets —
 —
 —
 3.1
 —
 N/M
(Gain) loss on sale of assets, net 5.6
 (0.5) N/M
 (2.5) (0.2) N/M
Total operating expenses $248.6
 $284.3
 (12.6) $807.6
 $573.6
 40.8
N/M = Not Meaningful
Selling and administrative expense in the three months ended September 30, 2017, which included incremental expenses from the Acquisition accounted of $43.2, decreased primarily from the overall cost reductions tied to DN2020 and lower non-routine and restructuring expense as well as lower incentive compensation expense related to the Company's annual incentive plans and a favorable impact of a $6.7 adjustment related to a mark-to-market compensation program. These decreases were partially offset by an unfavorable currency impact of $10.8. The selling and administrative expense in the nine months ended September 30, 2017, which included incremental expenses from the Acquisition accounted for $274.2, decreased from the previously mentioned favorable impact from the overall cost reductions tied to DN2020 as well as lower incentive compensation expense related to the Company's annual incentive plans in addition to the mark-to-market compensation program. The decrease was offset by an unfavorable currency impact of $12.0.

Non-routine expenses in selling and administrative expense of $43.7 and $81.9 were included in the three months ended September 30, 2017 and 2016, respectively. The primary components of the non-routine expenses pertained to acquisition and divestiture costs totaling $19.7 and purchase accounting adjustments of $23.6 related to intangible asset amortization. Selling and administrative expense included restructuring charges of $2.6 and $5.0 in the three months ended September 30, 2017 and 2016, respectively. Non-routine expenses in selling and administrative expense of $132.5 and $113.6 were included in the nine months ended September 30, 2017 and 2016, respectively. The primary components of the non-routine expenses pertained to acquisition and divestiture costs totaling $69.4 and purchase accounting adjustments of $62.3 related to intangible asset amortization. Selling and administrative expense included restructuring charges of $13.4 and $8.6 in the nine months ended September 30, 2017 and 2016, respectively.

Research, development and engineering expense as a percent of net sales was 3.0 and 3.4 percent in the three and nine months ended September 30, 2017, respectively compared with 3.2 and 3.3 percent in the three and nine months ended September 30, 2016, respectively. Research, development and engineering expense was unfavorably impacted by incremental expense associated with the Acquisition in both the three- and nine-month periods. The incremental expense from the Acquisition accounted for $10.3 and $62.7 in research, development and engineering expense in the three and nine months ended September 30, 2017, respectively. In both the three and nine months ended September 30, 2017, research, development and engineering expense was favorably impacted by the benefits of streamlining the cost structure as part of the Company's integration activities. Research, development and engineering expense included restructuring reversals of $(0.4) and $(1.1) in the three and nine months ended September 30, 2017, respectively. Restructuring charges in the three and nine months ended September 30, 2016 were $0.1. Research, development and engineering expense included non-routine charges of $0.3 in the nine months ended September 30, 2017. Non-routine charges in the three and nine months ended September 30, 2016 were $0.9.

In the nine months ended September 30, 2017, the Company recorded impairments totaling $3.1 related to information technology transformation and integration activities.

In the three months ended September 30, 2017, the loss on sale of assets was primarily related to the divestiture of the Company's legacy ES business in Chile. In the nine months ended September 30, 2017, the gain on sale of assets primarily related to the Company's divestiture of the legacy business in the U.K. and the ES business located in Mexico, partially offset by the previously mentioned loss in the three-month period.


56
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

Operating expense as a percent of net sales in the three months ended September 30, 2017 was 22.1 percent compared with 28.9 percent in the three months ended September 30, 2016. Operating expense as a percent of net sales in the nine months ended September 30, 2017 was 24.0 percent compared with 27.7 percent in the nine months ended September 30, 2016.

Operating Profit


The following table represents information regarding the Company's operating profit:loss:
Three months ended
March 31,
 20232022% Change
Operating loss$(2.1)$(83.4)97.5
Operating margin(0.2)%(10.1)%
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017
2016 % Change 2017 2016 % Change
Operating profit (loss) $(7.6) $(86.7) 91.2 $(86.3) $(82.1) (5.1)
Operating profit margin (0.7)% (8.8)%   (2.6)% (4.0)%  


The loss in operatingOperating profit decreasedincreased by $81.3 in the three months ended September 30, 2017March 31, 2023, compared to the same period in 2016 was primarily due to higher gross profit and lower operating expense.prior-year period. The lossimprovement in operating profit increasedis predominantly the result of higher product gross profits and the non-recurrence of the large impairment charges recognized in the nine months ended September 30, 2017 compared to the same period in 2016 was primarily due to higher gross profit that more than offset an increase in operating expense, which included amortizationfirst quarter of acquired intangible assets, restructuring and non-routine costs related to acquisitions and divestitures.2022, as noted above.


Other Income (Expense)


The following table represents information regarding the Company's other income (expense), net:
Three months ended
March 31,
 20232022% Change
Interest income$1.7 $1.3 30.8 
Interest expense(81.9)(48.1)70.3 
Foreign exchange loss, net(10.6)(4.7)125.5 
Miscellaneous, net2.6 2.6 — 
Other income (expense), net$(88.2)$(48.9)80.4 
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017
2016 % Change 2017 2016 % Change
Interest income $4.3
 $5.3
 (18.9) $15.8
 $16.5
 (4.2)
Interest expense (27.7) (32.4) 14.5
 (90.7) (68.2) (33.0)
Foreign exchange gain (loss), net 3.2
 2.0
 60.0
 (4.5) (1.6) (181.3)
Miscellaneous, net (1.5) (4.2) 64.3
 1.7
 3.6
 (52.8)
Other income (expense), net $(21.7) $(29.3) 25.9
 $(77.7) $(49.7) (56.3)


Interest income remained materially consistent for the three month periods ended March 31, 2023 and 2022.
The decrease in
Interest expense increased $33.8 due to the terms of the agreement completed on December 29, 2022 and increasing variable interest incomerates. Additionally, amortization of deferred financing fees from refinanced debt contributed $13.6 of interest expense in the three and nine months ended September 30, 2017,current year quarter compared with the same period in 2016, was as a result of lower interest income in Brazil. In addition, the Company's cash balancesto only $4.3 in the prior year three and nine months ended included funds held for the purchase of Wincor Nixdorf which generated additional interest income. Interest expense was lower in the three months ended September 30, 2017 compared to the same prior-year period due to the favorable impact of refinancing the debt related to the Acquisition, while interest expense was higher in the nine months ended September 30, 2017 associated with the financing required for the Acquisition. quarter.

Foreign exchange gain (loss), net, in the three-month period was favorable dueincludes realized gains and losses, primarily related to improved foreigneuro and brazilian real currency hedging while the nine-month periodexposure, which was unfavorable asduring all periods presented.

Miscellaneous, net remained consistent for the three month periods ended March 31, 2023 and 2022 and is primarily driven by recognition of non-service pension items, the most significant of which are in Germany.

Net Loss

The following table represents information regarding the Company's net loss:
Three months ended
March 31,
 20232022% Change
Net loss$(111.5)$(183.9)39.4 
Percent of net sales(13.0)%(22.2)%
Effective tax rate(23.4)%(38.3)%

Changes in net loss are a result of the impact offluctuations outlined in the Acquisition. Miscellaneous,previous sections. The change in net loss is also impacted by a decrease in income tax expense for the three months ended September 30, 2016 included a mark-to market lossMarch 31, 2023, Refer to Note 3 of $(3.6) associated with the Company’s foreign currency forward contract entered into on April 29, 2016. In addition,Condensed Consolidated Financial Statements for additional information of tax expense in the nine months ended September 30, 2016 included a mark-to-market gain of $35.6 associated with the Company's foreign currency option contracts entered into on November 23, 2015, a mark-to-market loss of $26.3 associated with the Company’s foreign currency forward contract entered into on April 29, 2016 and $6.3 in financing fees related to the Company’s bridge financing required for the Acquisition.

current quarter.
57

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)



Segment Operating Profit Summary
Income (Loss) From Continuing Operations, Net of Tax


The following table representstables represent information regarding the Company's income (loss) from continuing operations, netsegment operating profit metrics, which exclude the impact of tax:restructuring, non-routine charges, and held for sale non-core European retail business. Refer to Note 17 of the Condensed Consolidated Financial Statements for further details regarding the determination of reportable segments and the reconciliation between segment operating profit and consolidated operating profit.
Three months ended
March 31,
Banking:20232022% Change
Net sales$592.9 $562.7 5.4 
Segment operating profit$79.9 $46.1 73.3 
Segment operating profit margin13.5 %8.2 %
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017
2016 % Change 2017 2016 % Change
Income (loss) from continuing operations, net of tax $(28.8) $(97.2) (70.4) $(104.6) $(97.3) 7.5
Percent of net sales (2.6)% (9.9)%   (3.1)% (4.7)% 
Effective tax rate 1.7 % 16.2 %   36.2 % 26.2 %  


Loss from continuing operations, net of tax was $28.8 and $97.2 forBanking segment operating profit increased $33.8 in the three months ended September 30, 2017 and 2016, respectively. The decrease is primarilyMarch 31, 2023, as compared to the prior-year period due to the reasons described aboveincreased sales volume of ATM units and the changenormalization of supply chain logistics and input costs.

Three months ended
March 31,
Retail:20232022% Change
Net sales$260.4 $261.7 (0.5)
Segment operating profit$39.1 $24.2 61.6 
Segment operating profit margin15.0 %9.2 %

Retail segment operating profit increased $14.9 in income tax (benefit) expense.

The effective tax rate on the loss from continuing operations was 1.7 percent for the three months ended September 30, 2017March 31, 2023, as compared to the prior-year period due to normalization of supply chain logistics and 36.2 percent forinput costs.

Three months ended
March 31,
Corporate:20232022% Change
Charges not allocated to segments$69.0 $71.2 (3.1)

Corporate does not represent a reportable segment, but the nine months ended September 30, 2017. The tax rate for the three months ended September 30, 2017 reflects an unfavorable adjustment relatingtable above includes charges not allocated to year-to-date changes in the Company's valuation allowancesegments as well as higher than anticipated losses incurred in jurisdictions with a full valuation allowance throughout the period. During the threethey are not directly attributable and nine months ended September 30, 2017, the overall reduction in the tax benefit was offsetare managed independently by the repatriationCODM. These include include headquarter-based costs associated primarily with human resources, finance, IT and legal. The decreases in cost from the prior year period are a result of foreign earningscontinued restructuring efforts to reduce redundancy and indirect spend.


Liquidity and Capital Resources

On December 29, 2022, and as discussed above, the associated recognitionCompany completed the December 2022 Refinancing Transactions, which were a series of foreign tax credits as well as favorable discrete items associatedtransactions with certain key financial stakeholders to refinance certain debt with near-term maturities and provide the release of uncertain tax positions due toCompany with new capital. As planned, at the expiration of the statute of limitations and reductions in the Company's deferred tax liability relating to undistributed foreign subsidiary earnings.

The effective tax rate on loss from continuing operations was 16.2 percent for the three months ended September 30, 2016 and 26.2 percent for the nine months ended September 30, 2016. The tax rate benefit on the loss for the three months and nine months ended September 30, 2016 was negatively impacted due to the recognition of unfavorable discrete items and expenses relating to the Acquisition.  The tax rate benefit on the loss for the nine months ended September 30, 2016 was also impacted by the favorable release of an uncertain tax position due to the expiration of the statute of limitations. The rate for both periods were negatively impacted by an increase in the deferred tax liability associated with the Company’s undistributed foreign subsidiary earnings.  The non-taxable foreign currency hedges related to the Acquisition generated a loss for the three months ended September 30, 2016 and a net gain for the nine months ended September 30, 2016, resulting in a decrease in the tax benefit for the three months ended September 30, 2016 and an increase in the tax benefit for the nine months ended September 30, 2016.

Income (Loss) From Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net of tax was $4.6 for the three months ended September 30, 2016. The closing of the NA electronic security divestiture occurredDecember 2022 Refinancing Transactions, the Company drew down the ABL Facility and utilized the proceeds for working capital, including payments to suppliers and vendors. As of March 31, 2023, therefore, the Company had zero availability under the ABL Facility and $263.0 of cash, cash equivalents, restricted cash and short-term investments. Initially, the Company believed that the December 2022 Refinancing Transactions, along with cash from operations, would be sufficient to meet the Company’s near-term and long-term liquidity needs for at least the next 12 months. Over the course of the first quarter of 2023, based on February 1, 2016the Company’s revenue cycle and the Company recorded a gain (loss) on sale, net of tax, of 145.0 for the nine months ended September 30, 2016. Additionally, the income from discontinued operations, net of tax includes a net loss of 1.3 as a resultcomposition of the operations included through February 1, 2016.

Net Income (Loss)

Net loss decreased $73.0 to a net lossborrowing base under the ABL Facility, the availability under the ABL Facility as of $(28.8) forMarch 2023 has been substantially limited. In addition, slower-than-expected conversion of inventory into revenue has further suppressed liquidity. Accordingly, on March 21, 2023, and as discussed above, the three months ended September 30, 2017, compared to net loss of $(101.8) forCompany entered into the same period in 2016 due to the reasons described above.


FILO Amendment, which
58

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)

established the FILO Facility.The initial commitments under the FILO Facility were $55.0 and were borrowed in full and terminated on March 21, 2023.
Segment Net Sales and Operating Profit Summary


The following tables represent information regardingliquidity provided by the Company's net salesFILO Facility is only expected to sustain the Company through part of the second quarter. As previously disclosed, the Company is currently working to improve its operating performance and operating profitits cash, liquidity and financial position. In addition, the Company has been in discussions with its lenders with respect to a long-term solution for the Company’s capital structure, leverage and liquidity needs. As a result of those discussions, on May 30, 2023, the Company Parties entered into a Restructuring Support Agreement with the Consenting Creditors. The Consenting Creditors collectively hold significant majority of the Companies outstanding secured debt obligations.

The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors fora the effectuation of a deleveraging transaction through, among other things, (i) a pre-packaged chapter 11 plan of reorganization to be filed by reporting segment:
  Three Months Ended Nine Months Ended
  September 30, September 30,
Services: 2017 2016 % Change 2017 2016 % Change
Net sales $605.9
 $484.6
 25.0 $1,759.3
 $1,131.1
 55.5
Segment operating profit (loss) $88.8
 $77.5
 14.6 $247.0
 $211.5
 16.8
Segment operating profit margin 14.7% 16.0%   14.0%
18.7%  

Services net sales increased $121.3 or 25.0 percent and included a net favorable currency impactthe Debtors in connection with the anticipated commencement by the Debtors of $9.8the Chapter 11 Cases under chapter 11 of title 11 of the U.S. Bankruptcy Code in the three months ended September 30, 2017. InU.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the three-month period,Dutch Issuer relating to the impactDutch Scheme Companies in connection with the commencement by the Dutch Issuer of the Acquisition was $123.4. ExcludingDutch Scheme Proceedings under the incremental net sales fromDutch Restructuring Law in the AcquisitionDutch Court and currency, services sales decreased $11.9 attributable(iii) recognition of such Dutch scheme pursuant to lower installation revenue tiedproceedings to decreased systems volumesbe commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

The Company cannot predict the ultimate outcome of the Chapter 11 Cases and the run-offDutch Scheme Proceedings at this time or the satisfaction of multi-vendor service contracts inany of the Americas. These decreases were partially offset by higher service maintenance revenue in EMEA and AP. Additionally, AP benefited from higher managed services revenue.

In the nine months ended September 30, 2017, Services net sales increased $628.2 or 55.5 percent and included a net favorable currency impact of $14.7.Restructuring Support Agreement milestones yet to come. For the nine months ended September 30, 2017,duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the impact of the Acquisition was $652.5. Excluding the incremental net sales from the AcquisitionCompany’s operations and currency, net sales decreased $39.0 attributableability to develop and execute its business plan would be subject to the run-off of multi-vendor service contracts as well as lower installation revenue tied to decreased systems volumes in the Americas. This was partially offset by higher managed services revenue in AP. Services net sales also included an unfavorable impact of $15.2 related to purchase accounting adjustments.

Segment operating profit increased $11.3risks and $35.5 in the three and nine months ended September 30, 2017, respectively. The incremental portion from the Acquisition accounted for $5.5 and $27.2 in segment operating profit in the three and nine months ended September 30, 2017, respectively. Both the three and nine months ended September 30, 2017 benefited from incremental gross profituncertainties associated with the AcquisitionChapter 11 process and Dutch Restructuring Law process. The amount and composition of $22.9the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and $118.4, respectively. This incremental gross profit was partially offsetthe Dutch Scheme Proceedings, and our historical financial performance would likely not be indicative of our future financial performance. In particular, the description of the Company's operations, properties and liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

Our condensed consolidated financial statements included herein have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. Pursuant to the requirements of ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued. Our ability to continue as a going concern is contingent upon, among other things, our ability to successfully implement the Restructuring Transactions contemplated in the Restructuring Support Agreement, subject to the approval of the Bankruptcy Court and the Dutch Court. The Restructuring Transactions are intended to provide the Company with additional liquidity and a sustainable capital structure. There can be no certainty that the Restructuring Transactions will be effected or that, disruption from the Chapter 11 Cases and Dutch Scheme Proceedings contemplated by incremental operating expenses associatedthe Restructuring Support Agreement will not interfere with the Acquisition, which was $17.5 and $91.2 in the three and nine months ended September 30, 2017, respectively. Excluding the incremental portion from the Acquisition, segment operating profit increased $16.4 in the three and nine months ended September 30, 2017 driven by lower operating expense that was partially offset by lower gross profitCompany’s business. As of March 31, 2023 , substantial doubt exists regarding our ability to continue as a resultgoing concern.

For a more detailed discussion of contract maintenance revenue declines in the Americas combined with increased labor investments. In the nine months ended September 30, 2017, segment operating profit decreased $16.8. This decrease was primarily driven by lower gross profit as a result of contract maintenance revenue declines in the Americas combined with increased labor investments. The labor investments are a result of higher turnover rates of techniciansRestructuring Support Agreement and the associated trainingRestructuring Transactions, see “Restructuring Support Agreement” in Note 9 and “Going Concern Assessment” in Note 1 to support additional product lines. Additionally, both time periodsour Condensed Consolidated Financial Statements and Part II, Item 1A “Risk Factors” in this Quarterly Report.

The Company's total cash and cash availability as of March 31, 2023 and December 31, 2022 was as follows:
March 31, 2023December 31, 2022
Cash, cash equivalents and restricted cash$246.4 $319.1 
Additional cash availability from:
Short-term investments16.6 24.6 
Total cash and cash availability$263.0 $343.7 

As of March 31, 2023, the ABL Credit Agreement provides for (x) the ABL Facility with commitments of up to $250.0 that matures on July 20, 2026 and (y) the FILO Facility of $55.0 that matures on June 4, 2023. The weighted average interest rates on outstanding revolver borrowings under the ABL Facility as of March 31, 2023 and December 31, 2022 were adversely impacted by lower installation gross profit as a result of decreased systems volumes.7.60 percent and 7.66 percent, respectively which is based on the Secured Overnight Financing Rate (SOFR). The segment benefited from lower operating expense related to integration activities in bothinterest rate for the of three- and nine-month periods ended September 30, 2017.

Segment operating profit margin decreased in part to the impact of the Acquisition, which utilizes a higher third-party labor model to support its service and software revenue stream, resulting in a dilutive effect on margins in the three and nine months ended September 30, 2017.


  Three Months Ended Nine Months Ended
  September 30, September 30,
Software: 2017 2016 % Change 2017 2016 % Change
Net sales $119.8
 $86.4
 38.7 $337.9
 $139.4
 142.4
Segment operating profit (loss) $11.1
 $7.6
 46.1 $22.8
 $(0.5) N/M
Segment operating profit margin 9.3% 8.8%   6.7% (0.4)%  

Software net sales increased $33.4 or 38.7 percent included incremental net sales from the Acquisition of $33.9 and a net favorable currency impact of $3.2. In the three-month period, the Acquisition accounted for $79.8 in software net sales compared with $59.2 in the prior year period and included a net favorable currency impact of $2.7. Excluding the incremental portion from the Acquisition and currency, software sales decreased $3.7 attributable to lower sales in EMEA and the Americas.

59
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)


Inoutstanding borrowings on the nine months ended September 30, 2017, software net sales increased $198.5 or 142.4 percent including incremental net sales from the Acquisition of $202.5 and a net favorable currency impact of $4.3. Excluding the incremental net sales from the Acquisition and currency, net sales decreased $8.3 primarily related to lower volumes in the Americas and EMEA.

Segment operating profit increased $3.5 and $23.3 in the three and nine months ended September 30, 2017, respectively. The Acquisition was responsible for an additional $12.5 and $24.6 segment operating loss in the three and nine months ended September 30, 2017, respectively. The impact of the incremental portion from the Acquisition on gross profit was negligible in the three-month period, however, the nine-month period benefited from the incremental gross profit. The gross profit was offset by incremental operating expenses associated with the Acquisition of $112.8 and $71.5 in the three and nine months ended September 30, 2017, respectively. Excluding the incremental portion from the Acquisition, operating profit increased $8.0 and $10.0 in the three and nine months ended September 30, 2017, respectively. The increase in operating profit was driven by lower operating expense and higher gross profit across all regions in both the three- and nine-month periods.

Segment operating profit margin increased due to the positive impact of the Acquisition as well as lower operating expense resulting from the cost reduction integration activities in the three and nine months ended September 30, 2017.

  Three Months Ended Nine Months Ended
  September 30, September 30,
Systems: 2017 2016 % Change 2017 2016 % Change
Net sales $397.0
 $412.3
 (3.7) $1,262.2
 $802.4
 57.3
Segment operating profit (loss) $(1.3) $(5.0) 74.0
 $(6.8) $(34.1) 80.1
Segment operating profit margin (0.3)% (1.2)%   (0.5)% (4.2)%  

Systems net sales decreased $15.3 or 3.7 percent, which included incremental net sales from the Acquisition of $101.0 and a net favorable currency impact of $12.1. Excluding the incremental net sales from the Acquisition and currency, systems net sales decreased $128.4 primarily attributable to to fewer large projects in the Americas and EMEA and lower demand in Brazil for voting and lottery solutions.

In the nine months ended September 30, 2017, systems revenue increased $459.8 or 57.3 percent including incremental net sales from the Acquisition of $662.7 and a net favorable currency impact of $14.0. Excluding the incremental net sales from the Acquisition and currency, net sales decreased $216.9 as systems net sales were adversely impacted by lower retail solutions activity in the Americas and lower banking solutions activity across the Company. In the Americas and EMEA, the volume declines were primarily due to lower banking project activity and in AP mainly due to structural changes in the market. Systems net sales also included an unfavorable impact of $15.3 related to purchase accounting adjustments.

Segment operating loss decreased $3.7 and $27.3 in the three and nine months ended September 30, 2017, respectively. The incremental portion from the Acquisition was a $23.9 and $16.5 segment operating loss in the three and nine months ended September 30, 2017, respectively. Both the three and nine months ended benefited from incremental gross profit associated with the Acquisition, which has a larger mix of higher margin business across both banking and retail solutions. This incremental gross profit was partially offset by incremental operating expenses associated with the Acquisition, which was $25.7 and $132.1 in the three and nine months ended September 30, 2017, respectively. Excluding the incremental portion from the Acquisition, segment operating profit increased $50.6 and $22.3 in the three and nine months ended September 30, 2017, respectively. In the three and nine month period, the increase in segment operating profit was a combination of lower operating expense and increased gross profit as result of integration activities. In the nine-month period, the increase in segment operating profit was offset by volume declines in the Americas as well as in EMEA due to higher project activity in the prior-year period.

Segment operating profit margin increased due to the positive impact of lower operating expense resulting from the cost reduction integration activities offset by lower retail solutions activity in the Americas and lower banking solutions activity across the Company in the three and nine months ended September 30, 2017.

Refer to note 20 to the condensed consolidated financial statements for further details of segment net sales and operating profit.


60
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of OperationsFILO facility as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(March 31, 2023 was 12.88 percent. There was $263.0 in millions, except per share amounts)

Liquidity and Capital Resources

The Company's total cash, and cash availability as of September 30, 2017 and December 31, 2016 was as follows:
  September 30,
2017		 December 31,
2016
Cash and cash equivalents $380.7
 $652.7
Additional cash availability from    
Uncommitted lines of credit 167.2
 198.6
Revolving Facility 400.0
 520.0
Short-term investments 64.0
 64.1
Total cash and cash availability $1,011.9
 $1,435.4

Capital resources are obtained from income retained in the business, borrowings under the Company’s committed and uncommitted credit facilities and future issuances of long-term debt as well as 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 activities, restructuring and integration activities, investments in facilities or equipment, pension contributions, repayments of debt, redemption payments for redeemable noncontrolling interests, the payment of dividends on the Company’s common shares and any repurchases of the Company’s common shares for at least the next 12 months. As of September 30, 2017, $382.9 or 86.1 percent of the Company's cash and cash equivalents, and short-term investments reside in international tax jurisdictions. Repatriation of these funds could be negatively impacted by potential payments for foreign and domestic taxes. The Company has approximately $167 of earnings that are available for repatriation with no additional tax expense as the Company has already provided for such taxes. Part of the Company’s growth strategy is to pursue acquisitions complementary to the Company's future structure. The Company has made acquisitions in the past and intends to make acquisitions in the future. The Company intends to finance any future acquisitions with eitherrestricted cash and short-term investments cash provided from operations, borrowingsand zero borrowing availability under available credit facilities, proceeds from debt or equity offerings and/or the issuanceABL Facility as of common shares.March 31, 2023, after excluding $29.0 in outstanding letters of credit.


The following table summarizes the results of the Company's condensed consolidated statement of cash flows for the ninethree months ended September 30:March 31, 2023 and 2022:
Three months ended
Summary of cash flows:March 31, 2023March 31, 2022
Net cash used by operating activities$(95.9)$(226.2)
Net cash used by investing activities(1.7)(5.8)
Net cash provided by financing activities21.1 65.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash1.9 1.5 
Change in cash, cash equivalents and restricted cash$(74.6)$(164.9)
Summary of cash flows: 2017 2016
Net cash used by operating activities - continuing operations $(235.3) $(186.4)
Net cash used by investing activities - continuing operations (78.7) (879.0)
Net cash provided by financing activities 22.7
 1,138.4
Discontinued operations, net —
 353.7
Effect of exchange rate changes on cash and cash equivalents 19.3
 9.4
(Decrease) increase in cash and cash equivalents $(272.0) $436.1


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 used by operating activities - continuing operations was $235.3$95.9 for the ninethree months ended September 30, 2017,March 31, 2023, a change of $130.3 from cash use of $226.2 for the three months ended March 31, 2022.

•Cash flows from operating activities during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 were favorably impacted by a $72.4 decrease in net loss. Refer to "Results of Operations" discussed above for further discussion of the Company's net loss.

•The net aggregate of inventories and accounts payable was a decrease in operating cash flow of $24.2 during the three months ended March 31, 2023, compared to a decrease in operating cash flow of $160.7 during the three months ended March 31, 2022. The $136.5 decrease in cash usage is primarily a result of disbursement timing.

•The net aggregate of trade receivables and deferred revenue was an increase in useoperating cash flow of $48.9$21.1 during the three months ended March 31, 2023, compared to an increase in operating cash flow of $89.4 in the three months ended March 31, 2022. The $68.3 net change is primarily the result of timing within the order to cash cycle as well as lower collections of customer prepayments.

Investing Activities

Cash flows from $186.4investing activities during the three months ended March 31, 2023 includes $5.7 and $5.4 for capital expenditures and software development, respectively, compared to $4.0 and $7.6, respectively, for the same periods in 2022. .

During the three months ended March 31, 2023, the Company received no cash proceeds from divestitures compared to $5.8 of proceeds from the divestiture of its German reverse vending business in the three months ended March 31, 2022.

During the three months ended March 31, 2023, net maturities from investing activity was $9.4, compared to $0.0 for the three months ended March 31, 2022.

Financing Activities

Net cash provided by financing activities was $21.1 for the three months ended March 31, 2023 compared to a $65.6 source of cash for the same period in 2016.

2022. The net aggregate of trade accounts receivable, inventories and accounts payable used $96.3 and $90.0 in operating cash flows during the nine months ended September 30, 2017 and 2016, respectively. In general, the amount of cash flow provided or used by the aggregate of trade accounts payable, inventories and trade accounts receivable depends upon how effectively the Company manages the cash conversion cycle, which represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period. Accounts receivable cash use improved compared to prior-year same periodchange was primarily due to collections in AP and EMEA in connection with the Company's working capital initiative. Inventory cash use increased compared to the same period in the prior year as a result of delays in shipments that requirednet borrowings under the ABL Facility, including the FILO facility, of $22.7 during the three months ended March 31, 2023, compared to net borrowings under the Company's prior revolving credit facility of $75.0 during the three months ended March 31, 2022.

The Company paid cash for interest related to hold additional inventory, particularly inits debt of $25.5 and $58.6 for the Americas.

three months ended March 31, 2023 and March 31, 2022, respectively.
61

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)



In the aggregate, the other combined certain assets and liabilities used $247.6 and $78.1 of operating cash during the nine months ended September 30, 2017 and 2016, respectively. The increase in use was primarily due to interest paid as a result of the Company's increased debt incurred to finance the Acquisition, restructuring payments primarily related to DN2020, VAT payments associated with increased EMEA net sales and a netting settlement with Securitas AB offset by deferred revenue cash provided by the collection of customer prepayments, mainly on service contracts compared to the same period in the prior year. Additionally, there were non-cash uses primarily related to taxes of $84.4 offset by non-cash sources of Diebold Nixdorf AG accrued noncontrolling interest dividend of $25.5.

The most significant changes in adjustments to net income includes increased depreciation and amortization expense and additional share-based compensation. Depreciation and amortization expense increased $111.1 to $185.4 during the nine months ended September 30, 2017 compared to $74.3 during the same period in 2016 primarily due to incremental intangible assets amortization expense related to the Acquisition. Share-based compensation increased $8.9 to $23.1 for the nine months ended September 30, 2016 due to incremental awards granted in connection with the Acquisition. Adjustments to net income also includes (gain) loss on sale of assets, net, which consisted primarily of the gains from divestitures of the legacy Diebold business in the U.K. and the ES business located in Mexico offset by the loss from sale of the ES business in Chile. In connection with the Acquisition, the Company entered into foreign currency option and forward contracts to hedge against the effect of exchange rate fluctuations on the cash purchase consideration, acquisition-related costs and any outstanding Diebold Nixdorf AG borrowings that were euro denominated and expected to be paid on or near the closing of the Acquisition. During the nine months ended September 30, 2016, the Company recorded a $9.3 mark-to-market net gain on foreign currency option and forward contracts which is reflected in miscellaneous, net.

Investing Activities

Net cash used by investing activities - continuing operations was $78.7 and $879.0 for the nine months ended September 30, 2017 and 2016, respectively. The maturities and purchases of investments primarily relate to short-term investment activity in Brazil and for 2017 also include the Company's investment in Kony. The proceeds from the sale of assets primarily include cash from the divestitures of the legacy Diebold business in the U.K. and the ES businesses located in Mexico and Chile. The $800.3 change was primarily due to the funding of the Acquisition offset by $16.2 of proceeds from sale of foreign currency option contracts and payments for acquisitions of Moxx and Visio for $5.6 in the aggregate, net of cash acquired, and other investing activities. This decrease was partially offset by an increase in capital expenditures and certain other assets of $17.8 and $9.0 primarily due to the incremental expenditures related to the Acquisition. The Company's capital expenditures reflect normal investment activities to support operations. As a result of anticipated steps in forming the Inspur JV, the Company deposited $7.9 into a restricted escrow account, which is included in restricted cash from investing activities of the condensed consolidated statements of cash flows and in other current assets of the condensed consolidated balance sheets as of September 30, 2017.

The cash provided by the discontinued operations, net, includes the cash provided by the operations of the NA electronic security business. In the first quarter of 2016, discontinued operations, net, primarily related to the $365.1 proceeds received for the NA electronic security business divestiture.

Financing Activities

Net cash provided by financing activities was $22.7 and $1,138.4 for the nine months ended September 30, 2017 and 2016, respectively, a decrease of $1,115.7. The change was primarily due to the decrease of $1,132.9 in debt borrowings, net of repayments primarily related to funding the Acquisition in 2016 and an increase of $14.2 cash distributions to noncontrolling interests primarily related to Diebold Nixdorf AG offset the reduction in dividends paid. Refer to note 13 toNote 9 of the condensed consolidated financial statements for details ofadditional information regarding the Company's cash flows related to debt borrowingsobligations.

Contractual and repayments.

Debt As of September 30, 2017, the Company had various international short-term uncommitted lines of credit with borrowing limits of $191.4. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of September 30, 2017 and December 31, 2016 was 9.10 percent and 9.87 percent, respectively. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at September 30, 2017 was $167.2.

Other ObligationsThe Company enteredenters 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

62
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

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, which amended the Credit Agreement, 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 refinanced its $520.0 revolving and $230.0 term loan A senior unsecured credit facilities (which have been terminated and repaid in full) 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 Loan A Facility) on substantially the same terms as the Delayed Draw Term Loan A Facility (as defined in the Credit Agreement) in the amount of up to $230.0. 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 Facility borrowings as of September 30, 2017 and December 31, 2016 was 3.25 percent and 2.56 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the Revolving Facility as of September 30, 2017 was $400.0.

On April 19, 2016, the Company issued the 2024 Senior Notes in an offering exempt from the registration requirements of the Securities Act of 1933 (the Securities Act) in connection with the Acquisition. The 2024 Senior Notes are and will be guaranteed by certain of the Company’s existing and future domestic subsidiaries.

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 U.S. dollar-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.

In connection with the Incremental Agreement, the interest rate with respect to the Term Loan B Facility - USD is based on, at the Company’s option, adjusted LIBOR plus 2.75 percent (with a floor of 0.00 percent) or Alternate Base Rate (ABR) plus 1.75 percent (with an ABR floor of 1.00 percent) and the interest rate with respect to the Term Loan B Facility - Euro is based on adjusted Euro Interbank Offered Rate (EURIBOR) plus 3.00 percent (with a floor of 0.00 percent). Prior to the Incremental Agreement, the interest rate for the Term Loan B Facility - USD was LIBOR plus an applicable margin of 4.50 percent (or, at the Company’s option, prime plus an applicable margin of 3.50 percent), and the interest rate for the Term Loan B Facility - Euro was at the EURIBOR plus an applicable margin of 4.25 percent. As a result of the Incremental Agreement, the Company anticipates an approximate $5.0 reduction in interest expense per quarter.

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 requirement 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 May 6 and August 16, 2016, the Company entered into the Second and Third Amendments to the Credit Agreement, which re-denominated a portion of the Term Loan B Facility into euros and guaranteed the prompt and complete payment and performance of the obligations when due under the Credit Agreement. On February 14, 2017, the Company entered into the Fourth Amendment to the Credit Agreement, which allows the proceeds from the Delayed Draw Term Loan A Facility to be used for general corporate purposes.

The Credit Agreement financial covenant ratios at September 30, 2017 are as follows:

a maximum total net debt to adjusted EBITDA leverage ratio of 4.50 to 1.00 for the three months ended September 30, 2017 (reducing to 4.25 on December 31, 2017, further reduced to 4.00 on December 31, 2018, and further reduced to 3.75 on June 30, 2019); and
a minimum adjusted EBITDA to net interest expense coverage ratio of not less than 3.00 to 1.00


63
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

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 + 2.00% December 2020 5
Term Loan A Facility LIBOR + 2.00% December 2020 5
Delayed Draw Term Loan A Facility LIBOR + 2.00% December 2020 5
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%.
(ii)
EURIBOR with a floor of 0.0%.

In November 2016, the Company entered into multiple pay-fixed receive-variable interest rate swaps outstanding with an aggregate notional amount of $400.0.

Following the close of the Acquisition, 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.

The Company’s financing agreements contain various restrictive financial covenants, including net debt to EBITDA and net interest coverage ratios. As of September 30, 2017, the Company was in compliance with the financial and other covenants within its debt agreements.

Dividends The Company paid dividends of $22.9 and $57.0 in the nine months ended September 30, 2017 and 2016, respectively. Quarterly dividends were $0.10 per share for the nine months ended September 30, 2017 compared to $0.2875 per share for the nine months ended September 30, 2016.

Contractual Obligations In the first nine months ended of 2017, the Company entered into purchase commitments due within one year for materials through contract manufacturing agreements for a total negotiated price. At September 30, 2017,March 31, 2023, the Company had minimal purchase commitments due within one year totaling $7.2 for materials through contract manufacturing agreements at negotiated prices.

Pursuant to the DPLTA, subject to certain limitations pursuant to applicable law, (i) Diebold KGaA has the ability to issue binding instructions to the management board of Diebold Nixdorf AG, (ii) Diebold Nixdorf AG will transfer all of its annual profits to Diebold KGaA, and (iii) Diebold KGaA will generally absorb all annual losses incurred by Diebold Nixdorf AG. In addition, 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 €3.13 (€2.82 net under the current taxation regime) per Diebold Nixdorf AG ordinary share for each full fiscal year of Diebold Nixdorf AG. The ultimate timing and amount of any future cash payments related to the DPLTA are uncertain.


Except for the items noted above, inclusive of near-term debt maturities, all contractual and other cash obligations with initial and remaining terms in excess of one year and contingent liabilities remained generally unchanged at September 30, 2017March 31, 2023 compared to December 31, 2016.2022.


Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
Off-Balance Sheet Arrangements The Company enters into various arrangements not recognized in the condensed consolidated balance sheets that have or could have an effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources. The principal off-balance sheet arrangements that the Company enters into are guarantees operating leases and sales of finance receivables. 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,comply with its contractual obligations, the suppliers, regulatory agencies and insurance providers may draw on the pertinent bank. Refer to note 15 to the condensed consolidated financial statements for further details of guarantees. The Company has sold finance receivables to financial institutions

64
Table of Contents
Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(in millions, except per share amounts)

while continuing to service the receivables. The Company records these sales by removing finance receivables from the condensed consolidated balance sheets and recording gains and losses in the consolidated statement of operations (refer to Note 5 of the condensed consolidated financial statements).

Diebold Nixdorf, Incorporated initially issued the 8.5% Senior Notes due 2024 (the 2024 Senior Notes) in an offering exempt from the registration requirements of the Securities Act, which were later exchanged in an exchange offer registered under the Securities Act, and any 2L Notes issued pursuant to the Public 2024 Exchange Offer (the Public 2L Notes) will be issued in a transaction registered under the Securities Act. The 2024 Senior Notes are and will be, and the Public 2L Notes will be, guaranteed by certain of Diebold Nixdorf, Incorporated's existing and future subsidiaries which are listed on Exhibit 22.1 to this Quarterly Report on Form 10-Q. The following presents the summarized financial information separately for Diebold Nixdorf, Incorporated (the Parent Company), the issuer of the guaranteed obligations, and the guarantor subsidiaries, as specified in the indenture governing the Company's obligations under the 2024 Senior Notes and the indenture that will govern the Company’s obligations under the Public 2L Notes, on a combined 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, and the Public 2L Notes will be, 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 conditions. Each entity in the consolidating financial information follows the same accounting policies as described in the condensed consolidated financial statements, except for the use by the Parent Company and the guarantor subsidiaries of operations.the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation.


The following tables present summarized financial information for the Parent Company and the guarantor subsidiaries on a combined basis after elimination of (i) intercompany transactions and balances among the Parent Company and the guarantor subsidiaries and (ii) equity in earnings from and investments in any non-guarantor subsidiary.


Summarized Balance Sheets
March 31, 2023December 31, 2022
Total current assets$2,004.2 $1,818.9 
Total non-current assets$1,388.5 $1,401.2 
Total current liabilities$2,925.0 $2,662.6 
Total non-current liabilities$2,751.1 $2,748.7 


Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
Summarized Statements of Operations
Three months endedYear ended
March 31, 2023December 31, 2022
Net sales$643.8 $2,521.2 
Cost of sales478.2 1,857.8 
Selling and administrative expense182.3 690.0 
Research, development and engineering expense22.1 83.4 
Impairment of assets0.9 52.0 
Gain (loss) on sale of assets, net0.3 (4.6)
Interest income0.9 1.6 
Interest expense(73.9)(298.3)
Foreign exchange gain (loss), net2.4 36.5 
Miscellaneous, net(4.7)(13.2)
Loss from continuing operations before taxes$(115.3)$(430.8)
Net loss$(127.0)$(494.7)

As of March 31, 2023 and December 31, 2022, the Parent Company and the guarantor subsidiaries on a combined basis had the following balances with non-guarantor subsidiaries:
Summarized Balance Sheets
March 31, 2023December 31, 2022
Total current assets$940.8 $820.5 
Total non-current assets$— $— 























Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
The following tables present summarized financial information for the subsidiaries of the Company whose securities are pledged as the Collateral (together, the “Collateral Group”) on a combined basis with intercompany balances and transactions between entities in the Consolidated Group eliminated. No trading market for the subsidiaries in the Collateral Group exists.

Summarized Balance Sheets
March 31, 2023December 31, 2022
Total current assets$2,472.2 $2,362.4 
Total non-current assets$1,241.4 $1,248.3 
Total current liabilities$1,104.0 $1,035.7 
Total non-current liabilities$1,457.4 $1,443.0 

Summarized Statements of Operations
Three months endedYear ended
March 31, 2023December 31, 2022
Net sales$590.7 $2,370.9 
Cost of sales374.3 1,541.5 
Selling and administrative expense103.4 420.9 
Research, development and engineering expense20.0 84.8 
Impairment of assets0.8 25.8 
Gain (loss) on sale of assets, net0.1 (1.3)
Interest income0.6 3.5 
Interest expense(21.9)(44.7)
Foreign exchange gain, net7.8 28.5 
Miscellaneous, net(6.6)(53.6)
Income from continuing operations before taxes$72.0 $232.9 
Net income$63.2 $239.3 

As of March 31, 2023 and December 31, 2022, the Collateral Group on a combined basis had the following balances with non-guarantor subsidiaries:
Summarized Balance Sheets
March 31, 2023December 31, 2022
Total current assets$1,417.0 $1,332.0 
Total non-current assets$— $— 

Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
Critical Accounting Policies and Estimates


Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s condensed consolidated financial statements. The consolidated financial statements of the Company are prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of thesethe accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include revenue recognition, the valuation of trade finance leaseand financing receivables, inventories, goodwill, intangible assets, other long-lived assets, legal contingencies, guarantee obligations, and assumptions used in the calculation of income taxes, pension and post-retirement benefits and customer incentives, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. Management monitors the economic conditions and other factors and will adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.


Management believes thereThere have been no significantmaterial changes during the nine months ended September 30, 2017 to the items that the Company disclosed as its critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operationsdescribed in the Company’s annual reportAnnual Report on Form 10-K for the year ended December 31, 2016.2022.


Forward-Looking Statement Disclosure


In this quarterly reportThis Quarterly Report on Form 10-Q and the exhibits hereto may contain statements that are not reported financial results or other historical information and are “forward-looking statements"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.” Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements relateinclude, but are not limited to, among other things,projections, statements regarding the Company's expected future operating performance the Company's share(including expected results of newoperations and existing markets, the Company's short- and long-term revenue and earnings growth rates, and the Company's implementation of cost-reduction initiatives and measures to improve pricing, including the optimizationfinancial guidance), future financial condition, potential impact of the Company's manufacturing capacity.ongoing coronavirus (COVID-19) pandemic, anticipated operating results, strategy plans, future liquidity and financial position.


The use of theStatements can generally be identified as forward looking because they include words “will,”such as “believes,” “anticipates,” “expects,” “intends”“intends,” “plans,” “will,” “estimates,” “potential,” “target,” “predict,” “project,” “seek,” and variations thereof or “could,” “should” or words of similar expressions is intended to identifymeaning. Statements that describe the Company's future plans, objectives or goals are also forward-looking statements, that have been made and may inwhich reflect the future be made by or on behalfcurrent views of the Company.Company with respect to future events and are subject to assumptions, 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

The factors that may affect the Company's results include, among others:
•the Company's ability to negotiate and execute definitive documentation with respect to the Restructuring Transactions and to satisfy the conditions of the risks, uncertaintiesRestructuring Support Agreement;
•the timing and ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings;
•the Company's ability to have its New Common Stock approved for listing on the New York Stock Exchange;
•the overall impact of the global supply chain complexities on the Company and its business, including delays in sourcing key components as well as longer transport times, especially for container ships and U.S. trucking, given the Company’s reliance on suppliers, subcontractors and availability of raw materials and other factors thatcomponents;
•the Company's ability to improve its operating performance and its cash, liquidity and financial position;
•the Company's ability to generate sufficient cash or have sufficient access to capital resources to service its debt, which, if unsuccessful or insufficient, could cause actual resultsforce the Company to differ materially from those expressedreduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness;
•the Company's ability to comply with the covenants contained in or implied by the forward-looking statements include, but are not limited to:agreements governing its debt and to successfully refinance its debt in the future;

Discussion and Analysis of
Financial Condition and Results of Operations as of March 31, 2023
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)
(dollars in millions, except per share amounts)
•the Company’s ability to successfully convert its backlog into sales, including our ability to overcome supply chain and liquidity challenges;
•the ultimate impact of the DPLTA with Diebold Nixdorf AGongoing COVID-19 pandemic and other public health emergencies, including further adverse effects to the Company’s supply chain, maintenance of increased order backlog, and the effects of any COVID-19 related cancellations;
•the Company's ability to successfully meet its cost-reduction goals and continue to achieve benefits from its cost-reduction initiatives and other strategic initiatives, such as the current $150 million-plus cost savings plan;
•the success of the Company’s new products, including its DN Series line and EASY family of retail checkout solutions, and electronic vehicle charging service business;
•the impact of a cybersecurity breach or operational failure on the Company's business;
•the Company’s ability to attract, retain and motivate key employees;
•the Company’s reliance on suppliers, subcontractors and availability of raw materials and other components;
•changes in the 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;
•the Company's success in divesting, reorganizing or exiting non-core and/or non-accretive businesses and its ability to successfully manage acquisitions, divestitures, and alliances;
•the ultimate outcome of the appraisal proceedings initiated in connection with the implementation of the DPLTA;
Domination and Profit Loss Transfer Agreement with the ultimate outcome and results of integrating the operations of the Company and Diebold Nixdorf AG;
the ultimate outcome of the Company’s pricing, operating and tax strategies applied toformer Diebold Nixdorf AG (which was dismissed in the Company’s favor at the lower court level in May 2022) and the ultimate ability to realize synergies;merger/squeeze-out;
the Company's ability to successfully operate its strategic alliances in China with the Inspur Group and Aisino Corp.;
•the impact of market and economic conditions, onincluding the bankruptcies, restructuring or consolidations of financial services industry;institutions, which could reduce the Company’s customer base and/or adversely affect its customers' ability to make capital expenditures, as well as adversely impact the availability and cost of credit;
•the capacityimpact of competitive pressures, including pricing pressures and technological developments;
•changes in political, economic or other factors such as currency exchange rates, inflation rates (including the impact of possible currency devaluations in countries experiencing high inflation rates), recessionary or expansive trends, hostilities or conflicts (including the war between Russia and Ukraine and the tension between the U.S. and China), disruption in energy supply, taxes and regulations and laws affecting the worldwide business in each of the Company's technology to keep pace with a rapidly evolving marketplace;operations;
pricing and other actions by competitors;
the effect of legislative and regulatory actions in the United States and internationally;
•the Company's ability to maintain effective internal controls;
•unanticipated litigation, claims or assessments, as well as the outcome/impact of any current/pending litigation, claims or assessments;
•the effect of changes in law and regulations or the manner of enforcement in the U.S. and internationally and the Company’s ability to comply with governmentapplicable laws and regulations; and
•and other factors included in the impactCompany’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2022.

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 a security breach or operational failureunanticipated events.

You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on the Company's business;such statements.
the Company's ability to successfully integrate acquisitions into its operations; and
the impact of the Company's strategic initiatives, including the Company's DN2020 plan.


65

Management's Discussion and Analysis of
Financial Condition and Results of Operations as of September 30, 2017
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
(unaudited)FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)


Item 3: Quantitative and Qualitative Disclosures About Market Risk

On August 15, 2016, the Company designated its €350.0 euro-denominated Term Loan B Facility as a net investment hedge of its investments in certain subsidiaries that use the Euro as their functional currency in order to reduce volatility in stockholders' equity caused by the changes in foreign currency exchange rates of the Euro with respect to the U.S. Dollar. Effectiveness is assessed at least quarterly by confirming that the respective designated net investments' net equity balances at the beginning of any period collectively continues to equal or exceed the balance outstanding on the Company's Euro-denominated term loan. Changes in value that are deemed effective are accumulated in AOCI. When the respective net investments are sold or substantially liquidated, the balance of the cumulative translation adjustment in AOCI will be reclassified into earnings. The net gain (loss) recognized in AOCI on net investment hedge foreign currency borrowings was $(12.0) in the three months ended September 30, 2017 and $(37.8) for the nine months ended September 30, 2017. On March 30, 2017, the Company de-designated €130.6 of its euro-denominated Term Loan B Facility and on May 9, 2017, the Company designated an additional €66.8 of its euro-denominated Term Loan B Facility as a result of its repricing described under note 13 to the condensed consolidated financial statements.


Refer to the Company’s annual reportAnnual Report on Form 10-K for the year ended December 31, 20162022 for a discussion of market risk exposures. As discussed elsewhere in this Quarterly Report on Form 10-Q, the COVID-19 pandemic and related impacts on the global supply chain have negatively impacted our business and results of operations. As the Company cannot predict the full duration or extent of the pandemic, the future impact on the results of operations, financial position and cash flows, among others, cannot be reasonably estimated, but could be material. There have been no other material changes in this information since December 31, 2016.2022.



66
Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017
(in millions, except share and per share amounts)

Item 4: Controls and Procedures


This quarterly reportQuarterly Report on Form 10-Q includes the certifications of the Company's chief executive officerChief Executive Officer (CEO) and chief financial officerChief Financial Officer (CFO) required by Rule 13a-14 of the Securities Exchange Act of 1934 (the Exchange Act). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.


Based on the performance of procedures by management, designed to ensure the reliability of financial reporting, management believes that the unaudited condensed consolidated financial statements fairly present, in all material respects, the Company's financial position, results of operations and cash flows as of the dates, and for the periods presented.


Disclosure Controls and Procedures


Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC'sSecurities and Exchange Commission's (SEC) rules and forms and that such information is accumulated and communicated to management, including the CEO and CFO as appropriate, to allow timely decisions regarding required disclosures.


In connection with the preparation of this quarterly reportQuarterly Report on Form 10-Q, the Company's management, under the supervision and with the participation of the CEO and CFO, conducted an evaluation of disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO have concluded that such disclosure controls and procedures were effective as of September 30, 2017.March 31, 2023.


Change in Internal Controls

We have extended the Company's oversight and monitoring processes that support its internal control over financial reporting to include Diebold Nixdorf AG's operations.


During the quarter ended September 30, 2017,March 31, 2023, there have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.




67

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
(in millions, except share and per share amounts)

Part II – Other Information

Item 1: Legal Proceedings


At September 30, 2017,March 31, 2023, the Company was a party to several lawsuits that were incurred in the normal course of business, which neither individually nor in the aggregate are considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the Company's condensed consolidated financial statements would not be materially affected by the outcome of these legal proceedings, commitments or asserted claims.


For more information regarding legal proceedings, please refer to Part I, Item 3 of the Company's annual reportAnnual Report on Form 10-K for the year ended December 31, 2016. There2022 and to "Legal Contingencies" in Note 14 of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Other than as described in "Legal Contingencies" in Note 14 of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material developments with respect to the legal proceedings reported in the Company's annual reportAnnual Report on Form 10-K for the year ended December 31, 2016.2022.


Item 1A: Risk Factors


Refer to the Company’s annual reportAnnual Report on Form 10-K for the year ended December 31, 2016, and the Company's quarterly reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017.2022. There has been no material change to this information since JuneDecember 31, 2022, except as provided below.

The Company may not be able to generate sufficient cash from operations or have access to other sources of liquidity to sustain its operating needs or to meet its obligations as they become due over the next twelve-month period, raising substantial doubt as to the Company’s ability to continue as a going concern. The Company has substantial indebtedness and requires sufficient cash flows and capital resources to fund its debt service obligations and other liquidity needs. Although the December 2022 Refinancing Transactions were intended to provide the Company with the necessary liquidity to meet, along with cash from operations, its near-term and long-term liquidity needs, over the course of the first quarter of 2023, based on the Company’s revenue cycle and the composition of the borrowing base under the ABL Facility, the availability under the ABL Facility as of March 2023 has been substantially limited. In addition, slower-than-expected conversion of inventory into revenue has further suppressed liquidity. Accordingly, on March 21, 2023, the Company obtained the FILO Facility, which was borrowed in full. However, without modifications to the ABL Facility and access to additional capital, the Company currently projects that it will have insufficient liquidity to satisfy its obligations as they become due over the next twelve-month period.

On May 30, 2017.2023, the Company Parties entered into the Restructuring Support Agreement with the Consenting Creditors.


The Restructuring Support Agreement sets forth the agreed-upon terms among the Company and the Consenting Creditors for Issuer relating to the Dutch Scheme Companies (i) a pre-packaged chapter 11 plan of reorganization to be filed by the Debtors in connection with the anticipated commencement by the Debtors of the Chapter 11 Cases under chapter 11 of title 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, (ii) a scheme of arrangement to be filed by the Dutch Issuer in connection with the commencement by the Dutch Issuer of the Dutch Scheme Proceedings under the Dutch Restructuring Law in the Dutch Court and (iii) recognition of such Dutch scheme pursuant to proceedings to be commenced under chapter 15 of the U.S. Bankruptcy Code by the Dutch Issuer.

Under the Restructuring Support Agreement, the Consenting Creditors have agreed, subject to certain terms and conditions, to support the Restructuring Transactions that would result in a financial restructuring of the existing debt of, existing equity interests in the Company Parties pursuant to the Chapter 11 Plan and the WHOA Plan.

Although the Company intends to pursue the Restructuring Transactions in accordance with the terms set forth in the Restructuring Support Agreement, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement, on different terms or at all.

The Company cannot predict the ultimate outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings at this time or the satisfaction of any of the Restructuring Support Agreement milestones yet to come. For the duration of any Chapter 11 Cases or Dutch Scheme Proceedings, the Company’s operations and ability to develop and execute its business plan would be subject to the risks and uncertainties associated with the Chapter 11 process and Dutch Restructuring Law process. The amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance would likely not be indicative of our future financial performance. In particular, the description of the Company’s operations, properties and

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)
liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.

The Restructuring Support Agreement may be terminated upon the occurrence of certain events, and there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement. The Restructuring Support Agreement may be terminated upon the occurrence of certain events, including the failure to meet the milestones (unless extended or waived) described in “Going Concern Assessment” in Note 9 to our Condensed Consolidated Financial Statements.

Each of the Consenting Creditors may terminate the Restructuring Support Agreement (and thereby their obligations to support the Plans) under certain circumstances, including the Company’s failure to meet the milestones set forth in the Restructuring Support Agreement. A Company Party may terminate the Restructuring Support Agreement under certain circumstances, including the U.S. Bankruptcy Court’s failure to confirm the Chapter 11 Plan or dismissal of the Chapter 11 Cases or the Dutch Court’s failure to sanction the WHOA Plan.The Restructuring Support Agreement will be automatically terminated in certain circumstances, including if the Company’s board of directors determines, after consulting with counsel, that proceeding with any of the restructuring transactions contemplated by the Restructuring Support Agreement would be inconsistent with its fiduciary duties or applicable law. Some of these conditions are not under our control. There can be no assurance that any or all of the conditions precedent will be satisfied or waived or that these transactions will be completed as currently contemplated or at all.
Although the Company intends to pursue the Restructuring Transactions in accordance with the terms set forth in the Restructuring Support Agreement, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the Restructuring Support Agreement, on different terms or at all.

If the Restructuring Support Agreement is terminated or if we are otherwise unable to consummate the Restructuring Transactions, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims. In addition, any Chapter 11 Cases may become protracted, which could significantly and detrimentally impact our relationships with our partners, suppliers, service providers, customers, employees, and other third parties. Even if the Restructuring Transactions are completed, they may not be completed on the anticipated schedule or terms, and we may incur significant additional costs and expenses.

Under the terms of the Restructuring Support Agreement, we are required to seek the protection of the U.S. Bankruptcy Court and the Dutch Court, which subjects us to the risks and uncertainties associated with bankruptcy and may harm our business. If we seek the protection of the U.S. Bankruptcy Court and the Dutch Court, our operations and ability to develop and execute our business plan, and our ability to continue as a going concern, are subject to the risks and uncertainties associated with bankruptcy. As such, seeking bankruptcy protection could have a material adverse effect on our business, financial condition, results of operations and liquidity. Our senior management has been required to spend a significant amount of time and effort attending to the Restructuring Transactions instead of focusing exclusively on our business operations. Bankruptcy court protection also might make it more difficult to retain management and other employees necessary to the success and growth of our business.

Other significant risks include the following:
•our ability to consummate the Chapter 11 Plan and the WHOA Plan;
•the high costs of bankruptcy and related fees;
•the imposition of restrictions or obligations on the Company by regulators related to the bankruptcy and emergence from bankruptcy;
•our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence;
•our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties;
•our ability to maintain contracts that are critical to our operations; and
•the actions and decisions of our debtholders and other third parties who have interests in our Chapter 11 Cases that may be inconsistent with our plans.

If we seek the protection of the U.S. Bankruptcy Court and the Dutch Court, we may not be able to obtain confirmation of the Chapter 11 Plan and the WHOA Plan. To emerge successfully from bankruptcy protection as a viable entity, we must meet certain statutory requirements with respect to adequacy of disclosure with respect to the Chapter 11 Plan and the WHOA Plan, solicit and obtain the requisite acceptances of such reorganization plans and fulfill other statutory conditions for confirmation of such a plan. There is no assurance that Chapter 11 Cases and the Dutch Scheme Proceedings will be confirmed by the U.S. Bankruptcy Court or the Dutch Court, or that the WHOA Plan proceedings will be recognized by the U.S. Bankruptcy Court.

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)
Additionally, certain parties in interest may file objections to the Chapter 11 Plan and the WHOA Plan. The precise requirements and evidentiary showing for confirming a plan, notwithstanding its rejection by one or more impaired classes of claims or equity interests, depends upon a number of factors including, without limitation, the status and seniority of the claims or equity interests in the rejecting class.

If the Chapter 11 Plan and the WHOA Plan are not confirmed by the U.S. Bankruptcy Court or the Dutch Court, or the WHOA Plan proceedings are not recognized by the U.S. Bankruptcy Court, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims. Delays could increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.

We expect to be subject to claims that will not be discharged in the Chapter 11 Cases and the Dutch Scheme Proceedings. The U.S. Bankruptcy Code provides that the effectiveness of a plan of reorganization discharges a debtor from substantially all debts arising prior to petition date, other than as provided in the Chapter 11 Plan or the confirmation order. For example, pursuant to the Restructuring Support Agreement, the Chapter 11 Plan is expected to provide that holders of allowed general unsecured claims would be reinstated and paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such allowed general unsecured claim, or otherwise provided such treatment to render it unimpaired.

To the extent such claims could have been asserted prior to bankruptcy or arose during the bankruptcy, such claims can be asserted after we emerge from bankruptcy. The outcome and timing of potential matters is uncertain, and it is possible material costs, penalties, fines, sanctions, or injunctive relief could result from such a matter. As a result, an adverse ruling with respect to potential matters could have a material impact on our financial condition, results of operations, liquidity, and cash flows.

The negotiations of the Restructuring Transactions have consumed and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition. Our management has spent, and continues to be required to spend, a significant amount of time and effort focusing on the Restructuring Transactions. This diversion of attention may have a material adverse effect on the conduct of our business, and, as a result, on our financial condition and results of operations, particularly if the Restructuring Transactions, the Chapter 11 Cases or the Dutch Scheme Proceedings are protracted. During the pendency of the Restructuring Transactions, our employees will face considerable distraction and uncertainty and we may experience increased levels of employee attrition. A loss of key personnel or material erosion of employee morale could have a materially adverse effect on our ability to meet customer expectations, thereby adversely affecting our business and results of operations. The failure to retain or attract members of our management team and other key personnel could impair our ability to execute our strategy and implement operational initiatives, thereby having a material adverse effect on our financial condition and results of operations. Likewise, we could experience losses of customers or business partners who may be concerned about our ongoing long-term viability.

In certain instances, the Chapter 11 Cases may be converted to a case under Chapter 7 of the U.S. Bankruptcy Code. Following commencement of the Chapter 11 Cases, upon a showing of cause, the U.S. Bankruptcy Court may convert such Chapter 11 Cases to cases under chapter 7 of the U.S. Bankruptcy Code (Chapter 7). In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the U.S. Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in a prepackaged plan because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than a controlled manner and as a going concern, (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.

As a result of the Chapter 11 Cases and the Dutch Scheme Proceedings, our historical financial information may not be indicative of our future financial performance and our board of directors and management team may change significantly. During the Chapter 11 Cases and the Dutch Scheme Proceedings, we expect our financial results to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements. As a result, the amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases and the Dutch Scheme Proceedings, and our historical financial performance is likely not indicative of our future financial performance. In particular, the description of the Company’s operations, properties and liquidity and capital resources included in this Quarterly Report on Form 10-Q may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process and Dutch Restructuring Law process.


DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)
In addition, the composition of our management team may change significantly. Qualified individuals are in high demand and we may incur significant costs to attract them. In addition, the loss of any of our senior management or other key employees or changes in the composition of our management team could materially and adversely affect our ability to execute their strategy and implement operational initiatives and have a material and adverse effect on our financial condition, liquidity and results of operations.

Our existing common shares will be cancelled without any recovery if the Restructuring Transactions are consummated. If the Restructuring Transactions contemplated by the Restructuring Support Agreement are consummated, all existing equity interests of the Company, including common shares, will be extinguished without any recovery. Additionally, if the Restructuring Support Agreement is terminated or if we are otherwise unable to consummate the Restructuring Transactions, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims.

If the New York Stock Exchange (NYSE) were to suspend trading in the Company’s common shares, liquidity in our common shares would be materially diminished. As a result of the announcement of the Restructuring Transactions or the initiation of the Chapter 11 Cases or the Dutch Scheme Proceedings, the NYSE may commence proceedings to delist the Company’s common shares and suspend trading in the Company’s common shares. Although the Company’s common shares are likely to begin trading in the over-the-counter markets in such circumstances, the over-the-counter markets are significantly more limited than the NYSE, and quotation on the over-the-counter markets may result in a less liquid market available for existing and potential shareholders to trade the common shares and could further depress the trading price of the common shares. We can provide no assurance that the common shares will trade on the over-the-counter markets, whether broker-dealers will continue to provide public quotes of the common shares or whether the trading volume of the common shares will be sufficient to provide for an efficient trading market.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds


Information concerning the Company’s share repurchases made during the thirdfirst quarter ended March 31, 2023:
Period
Total Number of
Shares
Purchased (1)
Average Price
Paid Per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans (2)
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans (2)
January46,611 $2.30 — 2,426,177 
February65,983 $2.50 — 2,426,177 
March165,263 $3.24 — 2,426,177 
Total277,857 $2.91 — 
(1)All shares were surrendered or deemed surrendered to the Company in connection with the Company’s share-based compensation plans.
(2)The initial share repurchase plan was approved by the Board of 2017:Directors in 1997 and subsequently increased from time to time through 2012. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans. The share repurchase plan has no expiration date.

Period 
Total Number of
Shares
Purchased (1)
 
Average Price
Paid Per Share
 
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans (2)
 
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans (2)
July 4,136
 $26.36
 —
 2,426,177
August 3,547
 $22.59
 —
 2,426,177
September 2,590
 $22.53
 —
 2,426,177
Total 10,273
 $24.09
 —
  
(1)
All shares were surrendered or deemed surrendered to the Company in connection with the Company’s share-based compensation plans.
(2)
The total number of shares repurchased as part of the publicly announced share repurchase plan since its inception was 13,450,772 as of September 30, 2017. The plan was approved by the Board of Directors in 1997. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans. The plan has no expiration date. The following table provides a summary of Board of Directors approvals to repurchase the Company’s outstanding common shares:

 Total Number of Shares
Approved for Repurchase
19972,000,000
20042,000,000
20056,000,000
20072,000,000
20111,876,949
20122,000,000
 15,876,949

Item 3: Defaults Upon Senior Securities


None.Not applicable.


Item 4: Mine Safety Disclosures


Not applicable.


Item 5: Other Information


None.On May 20, 2023, the Board of Directors of the Company approved a cash retention award (the Retention Award) for James Barna in the amount of $100,000. The Retention Award is governed by the terms of a retention award letter (the Letter Agreement).



The Retention Award is payable within seven days after the date of the Letter Agreement. The Retention Award is subject to clawback and repayment by Mr. Barna if, prior to the one year anniversary of the payment date, Mr. Barna voluntarily resigns or his employment is terminated by the Company with cause (as defined in the Letter Agreement).

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Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of September 30, 2017March 31, 2023
(in millions, except share and per share amounts)

On May 16, 2023, the Company received a notice (the Initial NYSE Notice) from the NYSE that the Company is not in compliance with Section 802.01E of the NYSE Listed Company Manual as a result of its failure to timely file its Quarter Report on Form 10-Q for the quarterly period ended March 31, 2023 with the SEC.

The Initial NYSE Notice has no immediate effect on the listing of the Company’s common shares on the NYSE. The Initial NYSE Notice informed the Company that, under NYSE rules, the Company has six months from May 15, 2023 to regain compliance with the NYSE listing standards by filing the Form 10-Q with the SEC. The filing of this Quarterly Report on Form 10-Q rectifies the Company’s noncompliance with Section 802.01E.

On May 23, 2023, the Company received an additional notice (the “Additional NYSE Notice”) from the NYSE that the Company is not in compliance with Section 802.01B of the NYSE Listed Company Manual because its average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, its last reported shareholders’ equity was less than $50 million.

In accordance with applicable NYSE procedures, the Company has 45 days from receipt of the Additional NYSE Notice to submit a plan advising the NYSE of the definitive action(s) the Company has taken, or is taking, that would bring it into compliance with the minimum global market capitalization listing standard within 18 months of receipt of the Additional NYSE Notice. In light of the entry into the Restructuring Support Agreement, the Company is assessing its options with respect to bringing it into compliance with the NYSE continued listing standards within the required timeframe.

The Additional NYSE Notice has no immediate impact on the listing of the Company’s common shares on the NYSE. In the event that the Company fails to restore its compliance with the continued listing standards of Section 802.01B, its common shares will be subject to NYSE’s suspension and delisting procedures.


Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)
Item 6: Exhibits


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 Current Report on Form 8-K filed on February 17, 2017 (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)
3.33.1(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)
3.43.1(iv)
Certificate of Amendment to Amended Articles of Incorporation of Diebold Nixdorf, 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)
3.53.1(v)
Certificate of Amendment to Amended Articles of Incorporation of Diebold Nixdorf, Incorporated, effective April 26, 2017 – incorporated by reference to Exhibit 3.5 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (Commission File No. 1-4879)
3.1(vi)
Certificate of Amendment to Amended Articles of Incorporation of Diebold Nixdorf, Incorporated, effective March 9, 2022 – incorporated by reference to Exhibit 3.1(vi) to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (Commission File No. 1-4879)
3.2
Amended and Restated Code of Regulations – incorporated by reference to Exhibit 3.1(ii) to Registrant’s Current Report on Form 8-K filed on February 17, 2017 (Commission File No. 1-4879)
3.2(i)
10.1
Offer Letter, dated February 7, 2023, by and between Diebold Nixdorf, Incorporated and James Barna – incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 9, 2023 (Commission File No. 1-4879)
10.2
Amendment and Limited Waiver dated as of March 21, 2023, between the Company, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the other borrowers and lenders party thereto – incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K on March 21, 2023 (Commission File No. 1-4879)
10.3
Form of Deferred Cash Award Agreement – incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 3, 2023 (Commission File No. 1-4879)
10.4
Form of Performance Cash Award Agreement by and between Diebold Nixdorf, Incorporated and Participants
10.5
Form of Retention Agreement Letter by and between Diebold Nixdorf, Incorporated and Octavio Marquez, Olaf Heyden and Jonathan Leiken
10.6
Retention Agreement Letter by and between Diebold Nixdorf, Incorporate and James Barna
10.7
Restructuring Support Agreement, dated as of May 30, 2023, among Diebold Nixdorf, Incorporated and the other parties thereto
21.1
Subsidiaries of the Registrant as of March 31, 2023
22.1
List of Subsidiary Guarantors
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32.2
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

Table of Contents
DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES
FORM 10-Q as of March 31, 2023
(in millions, except share and per share amounts)
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document included in Exhibit 101)




SIGNATURES


Pursuant to the requirements 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:May 30, 2023/s/ Octavio Marquez
By:Octavio Marquez
President and Chief Executive Officer
(Principal Executive Officer)
DIEBOLD NIXDORF, INCORPORATED
Date:May 30, 2023/s/ James Barna
By:James Barna
Date:October 31, 2017/s/ Andreas W. Mattes
By:Andreas W. Mattes
President and Chief Executive Officer
(Principal Executive Officer)
Date:October 31, 2017/s/ Christopher A. Chapman
By:Christopher A. Chapman
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)



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