UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

__________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2020~~2021


☐			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)

_________________________________________________

Ohio

34-0183970

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification Number)

5995 Mayfair Road, PO Box 3077,

North Canton,

Ohio

44720-8077

(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 class

Trading Symbol

Name of each exchange on which registered

Common shares, $1.25 par value per share

DBD

New 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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 filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of July 27, ~~2020~~2021 was ~~77,674,592.~~78,353,807.

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

Form 10-Q

Index


Part I - Financial Information			3
Item 1: Financial Statements			3
Condensed Consolidated Balance Sheets –June 3 0 , ~~2020~~2021 (Unaudited) and December 31, ~~2019~~2020			3
Condensed Consolidated Statements of Operations (Unaudited) – Three and Six Months Ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020			4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~			5
Condensed Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020			6
Notes to Condensed Consolidated Financial Statements (Unaudited)			7
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations			4530
Item 3: Quantitative and Qualitative Disclosures About Market Risk			6146
Item 4: Controls and Procedures			6146
Part II - Other Information			6247
Item 1: Legal Proceedings			6247
Item 1A: Risk Factors			6247
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds			6247
Item 3: Defaults Upon Senior Securities			6247
Item 4: Mine Safety Disclosures			6247
Item 5: Other Information			6247
Item 6: Exhibits			6348
Signatures			6449

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)


		June 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash, cash equivalents and restricted cash		$	446.4	$	280.9
Cash and cash equivalents						Cash and cash equivalents	$	224.3	$	324.5
Short-term investments	Short-term investments	9.0		10.0		Short-term investments	8.1		37.2
Trade receivables, less allowances for doubtful accounts of $42.7 and $42.2, respectively		588.8		619.3
Trade receivables, less allowances for doubtful accounts of $35.7 and $37.5, respectively						Trade receivables, less allowances for doubtful accounts of $35.7 and $37.5, respectively	638.6		646.9
Inventories	Inventories	513.4		466.5		Inventories	587.5		498.2
Prepaid expenses	Prepaid expenses	32.8		51.3		Prepaid expenses	48.9		58.8
Current assets held for sale	Current assets held for sale	56.3		233.3		Current assets held for sale	59.4		64.7
Other current assets	Other current assets	248.7		230.7		Other current assets	249.6		227.0
Total current assets	Total current assets	1,895.4		1,892.0		Total current assets	1,816.4		1,857.3
Securities and other investments	Securities and other investments	17.4		21.4		Securities and other investments	10.6		10.3
Property, plant and equipment, net of accumulated depreciation and amortization of $541.1 and $526.9, respectively		205.5		231.5
Property, plant and equipment, net of accumulated depreciation and amortization of $548.1 and $536.1, respectively						Property, plant and equipment, net of accumulated depreciation and amortization of $548.1 and $536.1, respectively	154.3		177.5
Goodwill	Goodwill	775.1		764.0		Goodwill	779.1		800.4
Deferred income taxes	Deferred income taxes	135.3		120.8		Deferred income taxes	102.5		97.5

Customer relationships, net	Customer relationships, net	409.2		447.7		Customer relationships, net	355.8		407.9

Other assets	Other assets	283.2		313.2		Other assets	316.4		306.5
Total assets	Total assets	$	3,721.1	$	3,790.6	Total assets	$	3,535.1	$	3,657.4
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Notes payable	Notes payable	$	102.1	$	32.5	Notes payable	$	32.9	$	10.7
Accounts payable	Accounts payable	479.6		471.5		Accounts payable	561.5		499.9
Deferred revenue	Deferred revenue	300.6		320.5		Deferred revenue	299.3		346.8
Payroll and other benefits liabilities	Payroll and other benefits liabilities	161.0		224.7		Payroll and other benefits liabilities	211.7		226.6

Current liabilities held for sale						Current liabilities held for sale	16.6		15.4

Other current liabilities	Other current liabilities	484.6		550.4		Other current liabilities	469.4		550.1
Total current liabilities	Total current liabilities	1,527.9		1,599.6		Total current liabilities	1,591.4		1,649.5
Long-term debt	Long-term debt	2,362.4		2,108.7		Long-term debt	2,318.7		2,335.7
Pensions, post-retirement and other benefits	Pensions, post-retirement and other benefits	231.1		237.7		Pensions, post-retirement and other benefits	218.6		228.7

Deferred income taxes	Deferred income taxes	95.2		134.5		Deferred income taxes	103.4		103.4
Other liabilities	Other liabilities	192.9		195.5		Other liabilities	145.6		152.6
Commitments and contingencies

Redeemable noncontrolling interests	Redeemable noncontrolling interests	20.1		20.9		Redeemable noncontrolling interests	0		19.2
Equity	Equity					Equity
Diebold Nixdorf, Incorporated shareholders' equity	Diebold Nixdorf, Incorporated shareholders' equity					Diebold Nixdorf, Incorporated shareholders' equity
Preferred shares, 0 par value, 1,000,000 authorized shares, NaN issued	Preferred shares, 0 par value, 1,000,000 authorized shares, NaN issued	—		—		Preferred shares, 0 par value, 1,000,000 authorized shares, NaN issued	0		0
Common shares, $1.25 par value, 125,000,000 authorized shares, 93,518,712 and 92,208,247 issued shares, 77,668,932 and 76,813,013 outstanding shares, respectively		116.9		115.3
Common shares, $1.25 par value, 125,000,000 authorized shares, 94,593,267 and 93,534,866 issued shares, 78,348,114 and 77,678,984 outstanding shares, respectively						Common shares, $1.25 par value, 125,000,000 authorized shares, 94,593,267 and 93,534,866 issued shares, 78,348,114 and 77,678,984 outstanding shares, respectively	118.2		116.9
Additional capital	Additional capital	779.9		773.9		Additional capital	813.8		787.9
Accumulated deficit		(588.8)		(472.3)
Treasury shares, at cost (15,849,780 and 15,395,234 shares, respectively)		(576.6)		(571.9)
Retained earnings (accumulated deficit)						Retained earnings (accumulated deficit)	(780.7)		(742.3)
Treasury shares, at cost (16,245,153 and 15,855,882 shares, respectively)						Treasury shares, at cost (16,245,153 and 15,855,882 shares, respectively)	(582.1)		(576.7)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(434.4)		(375.3)		Accumulated other comprehensive loss	(420.5)		(412.9)
Total Diebold Nixdorf, Incorporated shareholders' equity	Total Diebold Nixdorf, Incorporated shareholders' equity	(703.0)		(530.3)		Total Diebold Nixdorf, Incorporated shareholders' equity	(851.3)		(827.1)
Noncontrolling interests	Noncontrolling interests	(5.5)		24.0		Noncontrolling interests	8.7		(4.6)
Total equity	Total equity	(708.5)		(506.3)		Total equity	(842.6)		(831.7)
Total liabilities, redeemable noncontrolling interests and equity	Total liabilities, redeemable noncontrolling interests and equity	$	3,721.1	$	3,790.6	Total liabilities, redeemable noncontrolling interests and equity	$	3,535.1	$	3,657.4

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						Six Months Ended							Three Months Ended				Six Months Ended
		June 30,						June 30,							June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net sales	Net sales									Net sales
Services	Services	$	559.7	$	659.3	$	1,147.5	$	1,288.0	Services	$	586.7	$	559.7	$	1,160.3	$	1,147.5
Products	Products	330.8		490.9		653.7		890.3		Products	356.8		330.8		727.1		653.7
		890.5		1,150.2		1,801.2		2,178.3			943.5		890.5		1,887.4		1,801.2
Cost of sales	Cost of sales									Cost of sales
Services	Services	389.8		489.4		827.3		960.9		Services	409.9		389.8		799.5		827.3
Products	Products	253.1		381.6		499.5		692.1		Products	281.7		253.1		562.8		499.5
		642.9		871.0		1,326.8		1,653.0			691.6		642.9		1,362.3		1,326.8
Gross profit	Gross profit	247.6		279.2		474.4		525.3		Gross profit	251.9		247.6		525.1		474.4
Selling and administrative expense	Selling and administrative expense	181.6		224.1		403.7		454.4		Selling and administrative expense	204.8		181.6		408.2		403.7
Research, development and engineering expense	Research, development and engineering expense	30.7		36.1		63.2		73.0		Research, development and engineering expense	35.6		30.7		69.7		63.2

(Gain) loss on sale of assets, net	(Gain) loss on sale of assets, net	14.8		11.7		13.0		15.1		(Gain) loss on sale of assets, net	(1.4)		14.8		(1.9)		13.0
		227.1		271.9		479.9		542.5			239.0		227.1		476.0		479.9
Operating profit (loss)	Operating profit (loss)	20.5		7.3		(5.5)		(17.2)		Operating profit (loss)	12.9		20.5		49.1		(5.5)
Other income (expense)	Other income (expense)									Other income (expense)
Interest income	Interest income	2.4		2.2		3.5		5.1		Interest income	2.3		2.4		4.0		3.5
Interest expense	Interest expense	(48.3)		(49.9)		(96.3)		(100.8)		Interest expense	(49.7)		(48.3)		(98.4)		(96.3)
Foreign exchange gain, net		(7.6)		(5.1)		(7.2)		(2.3)
Foreign exchange gain (loss), net										Foreign exchange gain (loss), net	(9.2)		(7.6)		(3.5)		(7.2)
Miscellaneous, net	Miscellaneous, net	6.5		(0.4)		5.6		(1.8)		Miscellaneous, net	2.7		6.5		2.0		5.6
Loss before taxes	Loss before taxes	(26.5)		(45.9)		(99.9)		(117.0)		Loss before taxes	(41.0)		(26.5)		(46.8)		(99.9)
Income tax (benefit) expense	Income tax (benefit) expense	(3.4)		9.2		16.6		69.6		Income tax (benefit) expense	(11.2)		(3.4)		(10.0)		16.6
Equity in earnings of unconsolidated subsidiaries		—		(0.2)		—		(0.6)
Equity in loss of unconsolidated subsidiaries										Equity in loss of unconsolidated subsidiaries	(0.5)		0		(1.6)		0
Net loss	Net loss	(23.1)		(55.3)		(116.5)		(187.2)		Net loss	(30.3)		(23.1)		(38.4)		(116.5)
Net (loss) income attributable to noncontrolling interests	Net (loss) income attributable to noncontrolling interests	0.6		(5.0)		—		(4.2)		Net (loss) income attributable to noncontrolling interests	0		0.6		0		0
Net loss attributable to Diebold Nixdorf, Incorporated	Net loss attributable to Diebold Nixdorf, Incorporated	$	(23.7)	$	(50.3)	$	(116.5)	$	(183.0)	Net loss attributable to Diebold Nixdorf, Incorporated	$	(30.3)	$	(23.7)	$	(38.4)	$	(116.5)

Basic and diluted weighted-average shares outstanding	Basic and diluted weighted-average shares outstanding	77.6		76.7		77.4		76.5		Basic and diluted weighted-average shares outstanding	78.3		77.6		78.2		77.4

Net loss attributable to Diebold Nixdorf, Incorporated	Net loss attributable to Diebold Nixdorf, Incorporated									Net loss attributable to Diebold Nixdorf, Incorporated
Basic and diluted loss per share	Basic and diluted loss per share	$	(0.31)	$	(0.66)	$	(1.51)	$	(2.39)	Basic and diluted loss per share	$	(0.39)	$	(0.31)	$	(0.49)	$	(1.51)

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						Six Months Ended							Three Months Ended				Six Months Ended
		June 30						June 30							June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net loss	Net loss	$	(23.1)	$	(55.3)	$	(116.5)	$	(187.2)	Net loss	$	(30.3)	$	(23.1)	$	(38.4)	$	(116.5)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax									Other comprehensive income (loss), net of tax
Translation adjustment	Translation adjustment	42.5		14.0		(54.1)		17.6		Translation adjustment	21.8		42.5		(13.5)		(54.1)
Foreign currency hedges (net of tax of $0.3, $0.4, $0.5 and $0.0, respectively)		1.5		0.7		2.2		0.1
Foreign currency hedges (net of tax of $0.0, $0.3, $0.0 and $0.5, respectively)										Foreign currency hedges (net of tax of $0.0, $0.3, $0.0 and $0.5, respectively)	(1.3)		1.5		0.3		2.2
Interest rate hedges	Interest rate hedges									Interest rate hedges
Net loss recognized in other comprehensive income (net of tax of $(0.5), $(0.7), $(4.6) and $(1.2), respectively)		(2.4)		(3.4)		(22.1)		(5.7)
Net income (loss) recognized in other comprehensive income (net of tax of $0.4, $(0.5), $0.8 and $(4.6) respectively)										Net income (loss) recognized in other comprehensive income (net of tax of $0.4, $(0.5), $0.8 and $(4.6) respectively)	2.0		(2.4)		4.1		(22.1)
Reclassification adjustment for amounts recognized in net income	Reclassification adjustment for amounts recognized in net income	0.8		0.5		5.3		1.0		Reclassification adjustment for amounts recognized in net income	(0.3)		0.8		(0.8)		5.3
		(1.6)		(2.9)		(16.8)		(4.7)			1.7		(1.6)		3.3		(16.8)
Pension and other post-retirement benefits	Pension and other post-retirement benefits									Pension and other post-retirement benefits
Net actuarial gain (loss) amortization (net of tax of $0.4, $0.4, $1.8 and $0.7, respectively)		2.3		4.3		9.1		3.8
Net actuarial loss amortized (net of tax of $0.4, $0.4, $0.9 and $1.8, respectively)										Net actuarial loss amortized (net of tax of $0.4, $0.4, $0.9 and $1.8, respectively)	1.2		2.3		3.8		9.1

Other	Other	0.4		—		(0.8)		0.1		Other	0		0.4		(0.9)		(0.8)
Other comprehensive income (loss), net of tax		45.1		16.1		(60.4)		16.9
Comprehensive income (loss)		22.0		(39.2)		(176.9)		(170.3)
Less: comprehensive income (loss) attributable to noncontrolling interests		0.6		(7.5)		(1.3)		(4.0)
Comprehensive income (loss) attributable to Diebold Nixdorf, Incorporated		$	21.4	$	(31.7)	$	(175.6)	$	(166.3)
Other comprehensive loss, net of tax										Other comprehensive loss, net of tax	23.4		45.1		(7.0)		(60.4)
Comprehensive loss										Comprehensive loss	(6.9)		22.0		(45.4)		(176.9)
Less: Comprehensive income (loss) attributable to noncontrolling interests										Less: Comprehensive income (loss) attributable to noncontrolling interests	0.1		0.6		0.6		(1.3)
Comprehensive loss attributable to Diebold Nixdorf, Incorporated										Comprehensive loss attributable to Diebold Nixdorf, Incorporated	$	(7.0)	$	21.4	$	(46.0)	$	(175.6)

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)


		Six Months Ended							Six Months Ended
		June 30							June 30,
		2020		2019			2021		2020
Cash flow from operating activities	Cash flow from operating activities					Cash flow from operating activities
Net loss	Net loss	$	(116.5)	$	(187.2)	Net loss	$	(38.4)	$	(116.5)
Adjustments to reconcile net loss to cash flow used by operating activities:	Adjustments to reconcile net loss to cash flow used by operating activities:					Adjustments to reconcile net loss to cash flow used by operating activities:
Depreciation and amortization	Depreciation and amortization	106.5		115.8		Depreciation and amortization	38.5		52.3

Amortization of Wincor Nixdorf purchase accounting intangible assets						Amortization of Wincor Nixdorf purchase accounting intangible assets	39.8		42.8
Amortization of deferred financing costs into interest expense						Amortization of deferred financing costs into interest expense	8.7		11.4
Share-based compensation	Share-based compensation	7.6		14.1		Share-based compensation	8.0		7.6
Loss (gain) on sale of assets, net		13.0		15.1

(Gain) loss on sale of assets, net						(Gain) loss on sale of assets, net	(1.9)		13.0

Deferred income taxes	Deferred income taxes	(55.8)		(13.4)		Deferred income taxes	(3.9)		(55.8)
Other		(7.2)		0.6

Changes in certain assets and liabilities	Changes in certain assets and liabilities					Changes in certain assets and liabilities
Trade receivables	Trade receivables	7.4		23.1		Trade receivables	(2.3)		7.4
Inventories	Inventories	(65.0)		(1.2)		Inventories	(96.0)		(65.0)
Accounts payable	Accounts payable	21.5		1.4		Accounts payable	70.4		21.5
Deferred revenue	Deferred revenue	(9.7)		(10.8)		Deferred revenue	(40.6)		(9.7)
Sales tax and net value added tax	Sales tax and net value added tax	(23.0)		(23.8)		Sales tax and net value added tax	(34.7)		(23.0)
Prepaid expenses		18.1		3.2

Income taxes	Income taxes	51.6		62.4		Income taxes	(34.2)		51.6

Accrued salaries, wages and commissions	Accrued salaries, wages and commissions	(57.1)		(15.3)		Accrued salaries, wages and commissions	(11.5)		(57.1)
Restructuring		(10.8)		(23.0)
Restructuring accrual						Restructuring accrual	(10.1)		(10.8)
Warranty liability	Warranty liability	(5.4)		(2.0)		Warranty liability	(0.2)		(5.4)
Liabilities held for sale	Liabilities held for sale	(16.2)		(12.0)		Liabilities held for sale	0		0
Pension and post retirement benefits	Pension and post retirement benefits	4.9		2.1		Pension and post retirement benefits	(2.7)		4.9
Certain other assets and liabilities	Certain other assets and liabilities	(34.5)		(16.7)		Certain other assets and liabilities	(32.6)		(37.1)
Net cash used by operating activities		(170.6)		(67.6)
Net cash provided (used) by operating activities						Net cash provided (used) by operating activities	(143.7)		(167.9)
Cash flow from investing activities	Cash flow from investing activities					Cash flow from investing activities
Capital expenditures	Capital expenditures	(8.8)		(20.3)		Capital expenditures	(6.2)		(8.8)

Capitalized software development						Capitalized software development	(11.2)		(8.9)
Proceeds from divestitures, net of cash divested	Proceeds from divestitures, net of cash divested	(47.9)		8.2		Proceeds from divestitures, net of cash divested	5.8		(47.9)

Proceeds from maturities of short-term investments		104.1		108.2
Payments for purchases of short-term investments		(103.0)		(85.8)

Increase in certain other assets		1.2		(11.8)
Net cash used by investing activities		(54.4)		(1.5)
Proceeds from maturities of investments						Proceeds from maturities of investments	177.3		104.1
Payments for purchases of investments						Payments for purchases of investments	(150.3)		(103.0)
Proceeds from sale of assets						Proceeds from sale of assets	1.7		0
Change in certain other assets						Change in certain other assets	0		7.4
Net cash provided (used) by investing activities						Net cash provided (used) by investing activities	17.1		(57.1)
Cash flow from financing activities	Cash flow from financing activities					Cash flow from financing activities

Debt issuance costs	Debt issuance costs	(3.8)		—		Debt issuance costs	0		(3.8)

Revolving credit facility borrowings (repayments), net	Revolving credit facility borrowings (repayments), net	385.9		(10.0)		Revolving credit facility borrowings (repayments), net	20.9		385.9
Other debt borrowings	Other debt borrowings	20.0		19.6		Other debt borrowings	7.4		20.0
Other debt repayments	Other debt repayments	(90.5)		(42.9)		Other debt repayments	(5.2)		(90.5)
Distributions to noncontrolling interest holders		—		(98.0)
Contributions from noncontrolling interest holders						Contributions from noncontrolling interest holders	12.7		0

Other	Other	(5.5)		(1.6)		Other	(6.3)		(5.5)
Net cash provided (used) by financing activities	Net cash provided (used) by financing activities	306.1		(132.9)		Net cash provided (used) by financing activities	29.5		306.1
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(10.8)		0.2		Effect of exchange rate changes on cash and cash equivalents	(0.6)		(10.8)
Change in cash, cash equivalents and restricted cash		70.3		(201.8)
Change in cash and cash equivalents						Change in cash and cash equivalents	(97.7)		70.3
Add: Cash included in assets held for sale at beginning of period	Add: Cash included in assets held for sale at beginning of period	97.2		7.3		Add: Cash included in assets held for sale at beginning of period	2.7		97.2
Less: Cash included in assets held for sale at end of period	Less: Cash included in assets held for sale at end of period	2.0		4.1		Less: Cash included in assets held for sale at end of period	5.2		2.0
Cash, cash equivalents and restricted cash at the beginning of the period		280.9		458.4
Cash, cash equivalents and restricted cash at the end of the period		$	446.4	$	259.8
Cash and cash equivalents at the beginning of the period						Cash and cash equivalents at the beginning of the period	324.5		280.9
Cash and cash equivalents at the end of the period						Cash and cash equivalents at the end of the period	$	224.3	$	446.4

See accompanying notes to condensed consolidated financial statements.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements

(unaudited)

(in millions, except per share amounts)

Note 1: Basis 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 report~~Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. In addition, some of the Company’s statements in this ~~quarterly report~~Quarterly 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 six months ended June 30, ~~2020~~2021 are not necessarily indicative of results to be expected for the full year.

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

Recently ~~Adopted~~Issued Accounting Guidance

~~Standards Adopted~~

~~Description~~

Effective
Date

~~ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement~~

The standard is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The adoption of this Accounting Standard Update (ASU) did not have a significant impact on the Company's

The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB).

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes. The new guidance affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The Company adopted the ASU during the first quarter of 2021 using a prospective approach. The adoption of the ASU did not have a material impact on the Company’s condensed consolidated financial statements.

In March 2020, the FASB issued guidance 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 reference rates expected to be discontinued to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company is currently evaluating the impact of this guidance on the Company’s condensed consolidated financial statements.

~~January 1, 2020~~

~~ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606~~

The amendments in this update provide guidance on whether certain transactions between collaborative arrangement participants should be accounted for under Topic 606. The adoption of this ASU did not have a significant impact on the Company's condensed consolidated financial statements.

~~January 1, 2020~~

~~ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~

The amendments in this update replace the incurred loss impairment methodology with the current expected credit loss methodology. This will change the measurement of credit losses on financial instruments and the timing of when such losses are recorded. The adoption of this ASU did not have a significant impact on the Company's condensed consolidated financial statements.

~~January 1, 2020~~

~~ASU 2019-01, Leases (Topic 842): Codification Improvements~~

The standard is designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing essential information about leasing transactions. The adoption of this ASU did not have a significant impact on the Company's condensed consolidated financial statements.

~~January 1, 2020~~

~~ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments~~

The standard is designed to clarify, correct, and improve various aspects of the guidance in the following ASUs related to financial instruments: ASU 2016-01 - Financial Instruments - Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Liabilities, ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments and ASU 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements for Hedging Activities. The adoption of this ASU did not have a significant impact on the Company's condensed consolidated financial statements.

~~January 1, 2020~~

Note 2: ~~Leases~~

The Company utilizes lease agreements to meet its operating needs. These leases support global staff via the use of office space, warehouses, vehicles and information technology (IT) equipment. The Company utilizes both operating and finance leases in its

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

portfolio of leased assets; however, the majority of these leases are classified as operating. A significant portion of the volume of the lease portfolio is in fleet vehicles and IT office equipment; however, real estate leases constitute a majority of the value of the right-of-use (ROU) assets. Lease agreements are utilized worldwide, with the largest location concentration in the United States, Germany and India. The Company's lease population has initial lease terms ranging from less than one year to approximately ten years. Some leases include one or more options to renew, with renewal terms that can extend the lease term from six months to 15 years.

~~The following table summarizes the weighted-average remaining lease terms and discount rates related to the Company's lease population at:~~

June 30, 2020 June 30, 2019
Weighted-average remaining lease terms (in years)
Operating leases 4.3 4.1
Finance leases 3.9 2.6
Weighted-average discount rate
Operating leases 11.4 % 13.8 %
Finance leases 11.5 % 26.7 %

The weighted-average discount rates used for operating and finance leases varies due to the jurisdictional composition. The Company has an immaterial amount of finance leases. In 2019, the Company's finance leases were primarily comprised of leases in Turkey, which have higher interest rates. The weighted-average discount rate for finance leases decreased in 2020 compared to 2019 due to an increase in finance leases globally that had rates lower than the rates for Turkish leases.

Certain lease agreements include payments based on a variety of global indexes or rates. These payment amounts have been projected using the index or rate as of lease commencement or the transition date and measured in ROU assets and lease liabilities. Other leases contain variable payments that are based on actual usage of the underlying assets and, therefore, are not measured in assets or liabilities as the variable payments are not based on an index or a rate. For real estate leases, these payments are most often tied to non-committed maintenance or utilities charges, and for equipment leases, to actual output or hours in operation. These amounts typically become known when the invoice is received, which is when expense is recognized. In rare circumstances, the Company's lease agreements may contain residual value guarantees. The Company's lease agreements do not contain any restrictions or covenants, such as those relating to dividends or incurring additional financial obligations.

~~As of June 30, 2020, the Company did not have any material leases that have not yet commenced but that create significant rights and obligations.~~

The Company determines whether an arrangement is or includes a lease at contract inception. All contracts containing the right to use an underlying asset are reviewed to confirm that the contract meets the definition of a lease. ROU assets and liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term.

As most leases do not provide an explicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. In order to apply the incremental borrowing rate, a rate table was developed to assign the appropriate rate to each lease based on lease term and currency of payments. For leases with large numbers of underlying assets, a portfolio approach with a collateralized rate was utilized. Assets were grouped based on similar lease terms and economic environments in a manner whereby the Company reasonably expects that the application does not differ materially from a lease-by-lease approach.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~The following table summarizes the components of lease expense:~~

Three Months Ended Six Months Ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Lease expense
Operating lease expense $ 23.3 $ 21.5 $ 47.3 $ 42.1
Finance lease expense
Amortization of ROU lease assets $ 0.4 $ 0.2 $ 0.7 $ 0.3
Interest on lease liabilities $ 0.2 $ 0.1 $ 0.3 $ 0.2
Variable lease expense $ 2.8 $ 5.0 $ 4.6 $ 8.2

~~The following table summarizes the maturities of lease liabilities:~~

Operating Finance
2020 (excluding the six months ended June 30, 2020) $ 42.2 $ 1.1
2021 52.0 2.1
2022 31.4 1.2
2023 18.9 0.5
2024 13.7 0.5
Thereafter 24.1 0.7
Total 182.3 6.1
Less: Present value discount (36.0) (1.0)
Lease liability $ 146.3 $ 5.1

~~The following table summarizes the cash flow information related to leases:~~

Three Months Ended Six Months Ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating - operating cash flows $ 18.6 $ 19.4 $ 44.0 $ 41.3
Finance - financing cash flows $ 0.5 $ 0.1 $ 0.8 $ 0.2
Finance - operating cash flows $ 0.3 $ 0.1 $ 0.4 $ 0.2
ROU lease assets obtained in the exchange for lease liabilities
Operating leases $ 3.1 $ 26.1 $ 7.7 $ 40.8
Finance leases $ 2.7 $ 0.1 $ 3.9 $ 2.1

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~The following table summarizes the balance sheet information related to leases:~~

June 30, 2020 December 31, 2019
Assets
Operating $ 145.0 $ 167.5
Finance 5.3 2.4
Total leased assets $ 150.3 $ 169.9
Current liabilities
Operating $ 54.5 $ 62.8
Finance 1.6 0.9
Noncurrent liabilities
Operating 91.8 106.4
Finance 3.5 1.4
Total lease liabilities $ 151.4 $ 171.5

~~Operating and finance leases are included in other assets, other current liabilities and other liabilities on the condensed consolidated balance sheets.~~

~~Note 3:~~ Earnings (Loss) Per Share

Basic earnings (loss) per share is based on the weighted-average number of common shares outstanding. Diluted earnings (loss) per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing earnings (loss) per share, non-vested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s participating securities include restricted stock units (RSUs), director deferred shares and shares that were vested but deferred by employees. The Company calculated basic and diluted earnings (loss) per share under both the treasury stock method and the two-class method. For the three and six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, there were no differences in the earnings (loss) per share amounts calculated ~~under~~using the two methods. Accordingly, the treasury stock method is disclosed below; however, because the ~~weighted-average number~~Company is in a net loss position, dilutive shares of 1.3 and 0.5 for the three months ended June 30, 2021 and 2020, respectively, and 1.3 and 1.0 for the six months ended June 30, 2021 and 2020, respectively, are excluded from the shares used in the computation of diluted earnings (loss) per ~~share are excluded due to the Company's net loss.~~share.

107

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

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


		Three Months Ended						Six Months Ended							Three Months Ended				Six Months Ended
		June 30						June 30							June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Numerator	Numerator									Numerator
Income (loss) used in basic and diluted loss per share	Income (loss) used in basic and diluted loss per share									Income (loss) used in basic and diluted loss per share
Net loss	Net loss	$	(23.1)	$	(55.3)	$	(116.5)	$	(187.2)	Net loss	$	(30.3)	$	(23.1)	$	(38.4)	$	(116.5)
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	0.6		(5.0)		—		(4.2)		Net (income) loss attributable to noncontrolling interests	0		0.6		0		0
Net loss attributable to Diebold Nixdorf, Incorporated	Net loss attributable to Diebold Nixdorf, Incorporated	$	(23.7)	$	(50.3)	$	(116.5)	$	(183.0)	Net loss attributable to Diebold Nixdorf, Incorporated	$	(30.3)	$	(23.7)	$	(38.4)	$	(116.5)
Denominator	Denominator									Denominator
Weighted-average number of common shares used in basic and diluted loss per share ⁽¹⁾	Weighted-average number of common shares used in basic and diluted loss per share ⁽¹⁾	77.6		76.7		77.4		76.5		Weighted-average number of common shares used in basic and diluted loss per share (1)	78.3		77.6		78.2		77.4

Net loss attributale to Diebold Nixdorf, Incorporated
Net loss attributable to Diebold Nixdorf, Incorporated										Net loss attributable to Diebold Nixdorf, Incorporated
Basic and diluted loss per share	Basic and diluted loss per share	$	(0.31)	$	(0.66)	$	(1.51)	$	(2.39)	Basic and diluted loss per share	$	(0.39)	$	(0.31)	$	(0.49)	$	(1.51)

Anti-dilutive shares
Anti-dilutive shares not used in calculating diluted weighted-average shares		3.7		3.4		2.7		3.8

⁽¹⁾~~Incremental shares~~Shares of ~~0.5~~1.6 and ~~1.8~~3.7 for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~1.0~~1.6 and ~~1.5~~2.7 for the six months ended June 30, 2021 and 2020, ~~and 2019, would have been included in the weighted-average number of shares used in~~respectively, are excluded from the computation of diluted earnings ~~(loss)~~ per share because ~~their~~the effects are ~~dilutive, but are excluded due to~~anti-dilutive, irrespective of the ~~Company's~~ net ~~loss.~~loss position.

Note ~~4: Share-Based Compensation~~3: Income Taxes

The ~~Company’s share-based compensation to employees is recognized based~~effective tax rate on ~~grant-date fair values during~~ the ~~period in which the employee is required to provide services in exchange~~loss from continuing operations was 27.0 percent and 20.7 percent for the ~~award. Share-based compensation is primarily recognized as a component of selling~~three and ~~administrative expense. Total share-based compensation expense was $3.6 and $4.8~~six months ended June 30, 2021, respectively. The tax benefit for the three months ended June 30, ~~2020 and 2019, respectively, and $7.6 and $14.1~~2021 was attributable to current quarter pre-tax losses. The tax benefit for the six months ended June 30, ~~2020 and 2019, respectively. The decrease in share-based compensation of $6.5 for the six months ended June 30, 2020 is~~2021 was primarily due to a reduction in shares granted. The Company has certain performance and restricted stock units that will be settled in cash and are accounted for as liabilities. The total compensation expense for these awards was $3.3 and $2.8 for the three months ended June 30, 2020 and 2019, respectively, and $6.4 and $4.9 for the six months ended June 30, 2020 and 2019, respectively. These awards vest ratably over a three year period.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

Options outstanding and exercisable as of June 30, 2020 are included under the Company’s 1991 Equity and Performance Incentive Plan (as Amended and Restated as of February 12, 2014) (the 1991 Plan) and the Company's 2017 Equity and Performance Incentive Plan (the 2017 Plan). Changes during the six months ended June 30, 2020 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, 2020 2.4 $ 14.89
Expired or forfeited (0.1) $ 31.74
Granted 0.4 $ 12.54
Outstanding at June 30, 2020 2.7 $ 14.30 8 $ 1.9
Options exercisable at June 30, 2020 1.4 $ 19.66 7 $ 0.6
Options vested and expected to vest⁽²⁾at June 30, 2020
2.7 $ 14.30 8 $ 1.9

⁽¹⁾The aggregate intrinsic value (the difference between the closing price of the Company’s common shares on the last trading day of the first quarter of 2020 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 June 30, 2020. 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.~~

~~The following table summarizes information on non-vested RSUs and performance shares relating to employees and non-employee directors for the six months ended June 30, 2020:~~

Number of
Shares Weighted-Average
Grant-Date Fair
Value
RSUs:
Non-vested at January 1, 2020 2.2 $ 9.99
Forfeited (0.1) $ 14.97
Vested (1.0) $ 12.61
Granted 0.9 $ 10.64
Non-vested at June 30, 2020 2.0 $ 8.94
Performance Shares:
Non-vested at January 1, 2020 2.4 $ 26.44
Forfeited (0.8) $ 34.70
Vested (0.3) $ 26.60
Non-vested at June 30, 2020 1.3 $ 21.76

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 June 30, 2020, there were 0.1 non-employee director deferred shares vested and outstanding.~~

~~On May 1, 2020, the Company's shareholders approved amendments~~attributable to the ~~2017 Plan, which provide~~jurisdictional mix of income and loss, valuation allowance on certain interest expense carryforwards, partially offset by discrete tax adjustments for ~~an additional 1.9 common shares available for award.~~

uncertain tax positions, tax return to provision differences and expired stock compensation.

~~Note 5: Income Taxes~~

The effective tax rate on the loss from continuing operations was 12.8 percent and (16.6) percent for the three and six months ended June 30, 2020, respectively. The tax benefit for the three months ended June 30, 2020 was attributable to then current quarter pre-tax losses. The tax expense for the six months ended June 30, 2020 was primarily attributable to gain recognized for tax purposes on the surrender of Company-owned life insurance (COLI) plans, partially offset by release of valuation allowance against U.S. foreign tax

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

credits expected to be utilized against current year income tax. ~~Also as a result of the tax gain on the surrender of COLI policies, it is not expected that a valuation allowance will be required against carryforwards of disallowed interest.~~

The effective tax rate on the loss was (20.0) percent and (59.5) percent for the three and six months ended June 30, 2019, respectively. The tax expense on the loss was due primarily to the tax impacts of the U.S.Tax Cuts and Jobs Act (Tax Act) on the estimated projected tax rate, more specifically, the impacts of the global intangible low-taxed income (GILTI) and base erosion and anti-abuse tax (BEAT). The tax expense for the six months ended June 30, 2019, in addition, was impacted by the Barbados structure collapse that the Company executed during the first quarter and resulted in additional tax discrete expense, which was offset in part by the valuation allowance release relating to the Company’s nondeductible interest expense, which was carried forward from December 31, 2018. The above items noted as well as the Company’s jurisdictional income (loss) mix and varying respective statutory rates are the primary drivers of the quarterly tax rate.

Note 6:4: Inventories

Major classes of inventories are summarized as follows:


		June 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
Finished goods	Finished goods	$	181.9	$	157.4	Finished goods	$	239.8	$	204.7
Service parts	Service parts	167.4		175.4		Service parts	176.2		169.0
Raw materials and work in process	Raw materials and work in process	164.1		133.7		Raw materials and work in process	171.5		124.5
Total inventories	Total inventories	$	513.4	$	466.5	Total inventories	$	587.5	$	498.2

Note 7:5: Investments

The Company’s investments, primarily 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 ~~investment~~interest income, determined using the specific identification method, and were minimal. There were no gains from the sale of securities or proceeds from the sale of securities prior to the maturity date for the three and six months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The Company has deferred compensation plans that enable certain employees to defer receipt of a portion of their cash, 401(k) or share-based compensation and 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 ~~18)~~15), which are recorded at fair value of the underlying securities within securities and other investments. The related deferred compensation liability is recorded at fair value within other long-term liabilities. Realized and unrealized gains and losses on marketable securities in the rabbi trusts are recognized in interest income.

The Company’s investments subject to fair value measurement consist of the following:


		Cost Basis		Unrealized Gain / (Loss)		Fair Value			Cost Basis		Unrealized Gain / (Loss)		Fair Value
As of June 30, 2020
As of June 30, 2021								As of June 30, 2021
Short-term investments	Short-term investments							Short-term investments
Certificates of deposit	Certificates of deposit	$	9.0	$	—	$	9.0	Certificates of deposit	$	8.1	$	0	$	8.1

Long-term investments	Long-term investments							Long-term investments
Assets held in a rabbi trust	Assets held in a rabbi trust	$	5.2	$	0.5	$	5.7	Assets held in a rabbi trust	$	5.1	$	1.8	$	6.9

As of December 31, 2019
As of December 31, 2020								As of December 31, 2020
Short-term investments	Short-term investments							Short-term investments
Certificates of deposit	Certificates of deposit	$	10.0	$	—	$	10.0	Certificates of deposit	$	37.2	$	0	$	37.2

Long-term investments	Long-term investments							Long-term investments
Assets held in a rabbi trust	Assets held in a rabbi trust	$	5.5	$	0.7	$	6.2	Assets held in a rabbi trust	$	5.2	$	1.4	$	6.6

Securities and other investments also includes a cash surrender value of insurance contracts of ~~$11.7 and $15.2~~$3.7 as of June 30, ~~2020~~2021 and December 31, ~~2019, respectively. The decrease is primarily due to death benefits paid.~~2020. During the second quarter of 2020, the Company ~~created a plan to close and surrender~~surrendered several of its COLI plans. As a result, the Company received proceeds of $7.7 million during the six months ended June 30, 2020 and $15.6 during the year ended December 31, 2020 from the closure of the respective plans. The Company recorded a gain of $7.2 ~~for~~during the ~~close of one plan~~six months ended June 30, 2020, and recorded this to Miscellaneous, net within Other ~~Income (Expense)~~income (expense) on the ~~Condensed~~

~~Table~~condensed consolidated statement of ~~Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Consolidated Statement of Operations during the three months ended June 30, 2020. The Company expects to close the remaining plans during the third quarter of 2020.~~operations.

The Company has certain ~~strategic alliances~~non-consolidated joint ventures that are not ~~consolidated. The Company tests these strategic alliances annually, individually~~significant subsidiaries and inare accounted for under the ~~aggregate, to determine materiality.~~equity method of accounting. The Company owns 48.1 percent of Inspur (Suzhou) Financial Technology Service Co. Ltd. (Inspur JV)~~, which increased from 40.0 percent as a result of the divestiture of the Company's operations in China (refer to note 15). Additionally, the Company owns 43.6~~ and 49.0 percent of Aisino-Wincor Retail & Banking Systems (Shanghai) Co., Ltd. (Aisino JV). The Company engages in transactions in the ordinary course of business with ~~its strategic alliances. The Company's strategic alliances are not significant subsidiaries and are accounted for under~~ the ~~equity method of accounting.~~respective joint ventures. As of June 30, ~~2020,~~2021, the Company had accounts receivable and accounts payable balances with these ~~strategic alliances~~joint ventures of ~~$13.7~~$6.1 and ~~$40.9,~~$33.5, respectively, which are included in trade receivables, less allowances for doubtful accounts and accounts payable on the condensed consolidated balance sheets. ~~The Company continues to assess these strategic alliances as part of the optimization of its portfolio of businesses, which may include the exit or restructuring of these businesses.~~

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

~~The following table presents the components of finance lease receivables as of June 30, 2020 and December 31, 2019:~~

June 30, 2020 December 31, 2019
Gross minimum lease receivables $ 41.2 $ 41.8
Allowance for credit losses (0.3) (0.3)
Estimated unguaranteed residual values 0.2 0.2
41.1 41.7
Less:
Unearned interest income (1.7) (2.8)
Total $ 39.4 $ 38.9

~~Future minimum payments due from customers under finance lease receivables as of June 30, 2020 are as follows:~~

2020 12.7
2021 8.4
2022 7.1
2023 5.3
2024 4.7
Thereafter 3.0
$ 41.2

There were no significant changes in provision for credit losses, recoveries and write-offs during the six months ended June 30, 2020 and 2019. As of June 30, 2020, finance leases and notes receivable individually evaluated for impairment were $39.7 and $4.6, respectively, with no provision recorded. As of June 30, 2019, finance leases and notes receivable individually evaluated for impairment were $36.3 and $4.9, respectively. There have been no material changes to the maturities on the finance lease receivables since December 31, 2019. The income related to the finance lease receivables was minimal for the three and six months ended June 30, 2020.

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 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 placed on nonaccrual status upon reaching greater than 89 days past due. Upon

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

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.

On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended actions for containment and mitigation. The Company continues to actively monitor the impact of the COVID-19 pandemic, which will likely impact the global economy including our business and results of operations for the rest of 2020. The extent of the COVID-19 impact to our operations will depend largely on future developments, along with any new information that may emerge regarding the severity of the pandemic and the actions taken by government authorities to mitigate the spread of the virus, among other factors, all of which are highly uncertain and cannot be accurately predicted.

~~As a result of the disruption and uncertainty related to the COVID-19 pandemic, the Company continues to assess the impacts on its investments and credit losses.~~

Note 8:6: Goodwill and Other Assets

The Company’s 3 reportable operating segments are Eurasia Banking, Americas Banking and Retail. The Company has allocated goodwill to its Eurasia Banking, Americas Banking and Retail reportable operating segments. The changes in carrying amounts of goodwill within the Company's segments are summarized as follows:


		Eurasia Banking		Americas Banking		Retail		Total			Eurasia Banking		Americas Banking		Retail		Total
Goodwill	Goodwill	$	598.6	$	437.3	$	233.2	$	1,269.1	Goodwill	$	579.2	$	431.3	$	224.4	$	1,234.9
Accumulated impairment	Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)		Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)
Balance at January 1, 2019		$	306.9	$	315.3	$	176.0	$	798.2
Balance at January 1, 2020										Balance at January 1, 2020	$	287.5	$	309.3	$	167.2	$	764.0
Transferred to assets held for sale	Transferred to assets held for sale	(11.7)		—		—		(11.7)		Transferred to assets held for sale	(1.4)		0		0		(1.4)
Divestitures	Divestitures	(0.4)		—		(3.9)		(4.3)		Divestitures	(6.4)		(2.4)		(1.2)		(10.0)
Currency translation adjustment	Currency translation adjustment	(7.3)		(6.0)		(4.9)		(18.2)		Currency translation adjustment	19.0		15.8		13.0		47.8
Goodwill	Goodwill	$	579.2	$	431.3	$	224.4	$	1,234.9	Goodwill	$	590.4	$	444.7	$	236.2	$	1,271.3

Accumulated impairment	Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)		Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)
Balance at December 31, 2019		$	287.5	$	309.3	$	167.2	$	764.0
Balance at December 31, 2020										Balance at December 31, 2020	$	298.7	$	322.7	$	179.0	$	800.4

Divestitures										Divestitures	0		0		(0.3)		(0.3)

Transferred to assets held for sale		(6.4)		—		—		(6.4)
Currency translation adjustment	Currency translation adjustment	7.0		5.8		4.7		17.5		Currency translation adjustment	(8.4)		(6.9)		(5.7)		(21.0)
Goodwill	Goodwill	$	579.8	$	437.1	$	229.1	$	1,246.0	Goodwill	$	582.0	$	437.8	$	230.2	$	1,250.0

Accumulated impairment	Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)		Accumulated impairment	(291.7)		(122.0)		(57.2)		(470.9)
Balance at June 30, 2020		$	288.1	$	315.1	$	171.9	$	775.1
Balance at June 30, 2021										Balance at June 30, 2021	$	290.3	$	315.8	$	173.0	$	779.1

In accordance with the Company's accounting policy, goodwill is tested for impairment annually during the fourth ~~quarter.~~quarter or earlier if a triggering event is identified.

The Company ~~identified~~has four reporting units, which are Eurasia Banking, Americas Banking, EMEA Retail and Rest of World Retail. ~~The Company considered there to be a~~A triggering event ~~and as a result of analysis performed during~~was identified in the first quarter of 2020 leading to the Company performing an impairment analysis which indicated the Eurasia Banking, Americas Banking and EMEA Retail reporting units each had sufficient cushion of estimated fair value in excess of carrying value as of March 31, 2020. There have been no impairment indicators identified during the six months ended June 30, ~~2020.~~2021. Rest of World Retail had 0 goodwill as of June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. Changes in certain assumptions ~~or the Company's inability to execute on the current plan~~ could have a significant impact to the estimated fair value of the reporting units.

As a result of the uncertainty related to the COVID-19 pandemic, the Company could experience unfavorable impacts in the results of the reporting units and to the various assumptions used in the analysis of goodwill and will continue to assess potential triggering events.

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Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The following summarizes information on intangible assets by major category:


			June 30, 2020										December 31, 2019												June 30, 2021				December 31, 2020
		Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships, net	Customer relationships, net	5.7 years	$	695.3	$	(286.1)	$	409.2	$	698.7	$	(251.0)	$	447.7	Customer relationships, net	4.7 years	$	737.9	$	(382.1)	$	355.8	$	762.0	$	(354.1)	$	407.9

Internally-developed software	Internally-developed software	1.7 years	187.1		(146.9)		40.2		178.2		(132.2)		46.0		Internally-developed software	2.5 years	205.1		(166.9)		38.2		198.0		(160.0)		38.0
Development costs non-software	Development costs non-software	1.7 years	51.2		(50.3)		0.9		51.5		(47.5)		4.0		Development costs non-software	1.5 years	54.3		(54.2)		0.1		56.1		(55.8)		0.3
Other intangibles	Other intangibles	2.5 years	76.1		(72.3)		3.8		79.3		(74.7)		4.6		Other intangibles	6.1 years	58.4		(56.4)		2.0		69.8		(67.4)		2.4
Other intangible assets, net	Other intangible assets, net		314.4		(269.5)		44.9		309.0		(254.4)		54.6		Other intangible assets, net		317.8		(277.5)		40.3		323.9		(283.2)		40.7
Total	Total		$	1,009.7	$	(555.6)	$	454.1	$	1,007.7	$	(505.4)	$	502.3	Total		$	1,055.7	$	(659.6)	$	396.1	$	1,085.9	$	(637.3)	$	448.6

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 ~~expense on~~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.

The following table identifies the activity relating to total capitalized software ~~of $7.3~~development:


	2021		2020
Beginning balance as of January 1	$	38.0	$	46.0
Capitalization	11.2		8.9
Amortization	(12.5)		(14.5)

Other	1.5		(0.1)
Ending balance as of June 30	$	38.2	$	40.3

The Company's total amortization expense, excluding that related to deferred financing costs, was $52.1 and ~~$8.3~~$55.1 for the six months ended June 30, 2021 and 2020, respectively. The Company's total amortization expense, excluding that related to deferred financing costs, was ~~included in service~~$26.0 and ~~software cost of sales~~$27.5 for the three months ended June 30, ~~2020~~2021 and ~~2019, respectively, and $14.5 and $16.9 for the six months ended June 30,~~ 2020, and June 30, 2019, respectively. The Company's total amortization expense, including deferred financing costs, was $33.3 and $36.5 for the three months ended June 30, 2020 and 2019, respectively, and $66.5 and $73.6 for the six months ended June 30, 2020 and 2019, respectively.

Note ~~9: Guarantees and~~7: 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 payments or fulfill contractual obligations, the suppliers, customers, regulatory agencies and insurance providers may draw on the pertinent bank. At June 30, 2020, the maximum future payment obligations related to these various guarantees totaled $97.2, of which $26.6 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, 2019, the maximum future payment obligations relative to these various guarantees totaled $108.2, of which $25.2 represented standby letters of credit to insurance providers, and no associated liability was recorded.

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

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


		June 30, 2020		June 30, 2019			2021		2020
Balance at January 1		$	36.9	$	40.1
Beginning balance as of January 1						Beginning balance as of January 1	$	38.6	$	36.9
Current period accruals	Current period accruals	11.8		6.2		Current period accruals	11.0		11.8
Current period settlements	Current period settlements	(17.1)		(6.3)		Current period settlements	(11.4)		(17.1)

Currency translation adjustment	Currency translation adjustment	(1.7)		(1.5)		Currency translation adjustment	(0.6)		(1.7)
Balance at June 30	Balance at June 30	$	29.9	$	38.5	Balance at June 30	$	37.6	$	29.9

1611

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

Note ~~10:~~8: Restructuring

The following table summarizes the impact of the Company’s restructuring charges on the ~~condensed~~ consolidated statements of operations:


		Three Months Ended						Six Months Ended							Three Months Ended				Six Months Ended
		June 30,						June 30,							June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Cost of sales – services	Cost of sales – services	$	1.6	$	2.6	$	2.5	$	4.1	Cost of sales – services	$	10.1	$	1.6	$	10.1	$	2.5

Cost of sales – products										Cost of sales – products	1.1		0		1.6		0
Selling and administrative expense	Selling and administrative expense	8.9		4.8		16.5		7.0		Selling and administrative expense	6.5		8.9		11.7		16.5
Research, development and engineering expense	Research, development and engineering expense	1.0		(0.1)		2.5		—		Research, development and engineering expense	(0.6)		1.0		(0.3)		2.5
Loss on sale of assets, net		—		0.1		—		0.1

Total	Total	$	11.5	$	7.4	$	21.5	$	11.2	Total	$	17.1	$	11.5	$	23.1	$	21.5

The following table summarizes the Company’s ~~type of~~ restructuring charges by ~~reportable operating~~reporting segment:


		Three Months Ended						Six Months Ended							Three Months Ended				Six Months Ended
		June 30,						June 30,							June 30,				June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Severance	Severance									Severance
Eurasia Banking	Eurasia Banking	$	5.8	$	1.3	$	8.1	$	2.8	Eurasia Banking	$	8.8	$	5.8	$	8.8	$	8.1
Americas Banking	Americas Banking	0.7		0.2		1.1		0.6		Americas Banking	0.3		0.7		0.3		1.1
Retail	Retail	3.4		2.8		8.8		3.6		Retail	1.2		3.4		1.2		8.8
Corporate	Corporate	1.6		3.0		3.5		4.1		Corporate	0		1.6		0		3.5

Total severance	Total severance	$	11.5	$	7.3	$	21.5	$	11.1	Total severance	$	10.3	$	11.5	$	10.3	$	21.5

Other										Other
Eurasia Banking										Eurasia Banking	$	0.1	$	0	$	0.6	0

Retail										Retail	1.6		0		1.6		0
Corporate										Corporate	5.1		0		10.6		0

Other - Americas Banking		—		0.1		—		0.1

Total Other										Total Other	6.8		0		12.8		0
Total	Total	$	11.5	$	7.4	$	21.5	$	11.2	Total	$	17.1	$	11.5	$	23.1	$	21.5

DN Now

During the second quarter of 2018, the Company began implementing DN Now to deliver greater, more sustainable ~~profitability. The~~profitability, and the gross ~~annualized~~ savings target ~~for DN Now is~~remains approximately ~~$470~~$500 through 2021. ~~In order to achieve these savings, the~~The Company ~~has and will continue~~is approaching completion of its program to restructure the workforce, integrate and optimize systems and processes, transition workloads to lower cost locations and consolidate real estate holdings. Additional near-term activities include continuation of the services modernization plan, rationalizing of the Company's product portfolio and further reducing the Company's selling and administrative expense.Material incremental restructuring charges related to DN Now are not expected. The Company incurred DN Now restructuring charges of $17.1 and $23.1 for the three and six months ended June 30, 2021, respectively, compared to $11.5 and ~~$7.4~~$21.5 for the three and six months ended June 30, 2020, ~~and 2019, respectively, and $21.5 and $11.2 for~~respectively. The charges incurred during the six months ended June 30, ~~2020 and 2019, respectively, related~~2021 relate primarily to ~~DN Now. The Company anticipates additional restructuring~~redundant personnel costs ~~of approximately $29 to $49 through~~during the ~~end of the plan, primarily related to severance.~~transition period.

The following table summarizes the Company's cumulative total restructuring costs ~~by plan~~for DN Now as of June 30, ~~2020:~~2021:


		DN Now									DN Now
		Severance		Other		Total			Severance		Other
Eurasia Banking	Eurasia Banking	$	54.9	$	—	$	54.9	Eurasia Banking	$	87.7	$	2.6
Americas Banking	Americas Banking	11.5		0.1		11.6		Americas Banking	13.2		0.1
Retail	Retail	31.0		—		31.0		Retail	39.9		3.8
Corporate	Corporate	33.1		—		33.1		Corporate	54.3		12.2
Total	Total	$	130.5	$	0.1	$	130.6	Total	$	195.1	$	18.7

1712

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The following table summarizes the Company’s restructuring accrual balances and related ~~activity for the six months ended June 30, 2020:~~activity:

2020 2019
Balance at January 1 $ 42.6 $ 56.9
Liabilities incurred 21.5 11.2
Liabilities paid/settled (32.5) (34.6)
Balance at June 30 $ 31.6 $ 33.5


	2021		2020
Beginning balance as of January 1	$	62.9	$	42.6
Severance charges	10.3		21.5

Payouts/Settlements	(18.5)		(32.5)
Other	(2.8)		0
Ending balance as of June 30	$	51.9	$	31.6

Note ~~11:~~9: Debt

Outstanding debt balances were as follows:


		June 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
Notes payable	Notes payable					Notes payable
Uncommitted lines of credit	Uncommitted lines of credit	$	7.6	$	5.0	Uncommitted lines of credit	$	6.0	$	0.2
Revolving Facility		68.8		—
2022 Revolving Facility						2022 Revolving Facility	15.9		0

Term Loan A-1 Facility		16.3		16.3

Term Loan B Facility - USD	Term Loan B Facility - USD	4.8		4.8		Term Loan B Facility - USD	4.8		4.8
Term Loan B Facility - Euro	Term Loan B Facility - Euro	4.6		4.7		Term Loan B Facility - Euro	4.9		5.1
Other	Other	—		1.7		Other	1.8		0.6
		$	102.1	$	32.5		$	33.4	$	10.7
Short-term deferred financing fees						Short-term deferred financing fees	(0.5)		0
							$	32.9	$	10.7
Long-term debt	Long-term debt					Long-term debt
Revolving Facility		$	317.1	$	—
2023 Revolving Facility						2023 Revolving Facility	$	65.1	$	60.1

2022 Term Loan A Facility		358.1		370.3
Term Loan A-1 Facility		574.1		602.6
Term Loan B Facility - USD	Term Loan B Facility - USD	388.1		404.0		Term Loan B Facility - USD	383.4		385.7
Term Loan B Facility - Euro	Term Loan B Facility - Euro	378.4		395.1		Term Loan B Facility - Euro	396.6		412.1
2024 Senior Notes	2024 Senior Notes	400.0		400.0		2024 Senior Notes	400.0		400.0
2025 Senior Secured Notes - USD						2025 Senior Secured Notes - USD	700.0		700.0
2025 Senior Secured Notes - EUR						2025 Senior Secured Notes - EUR	415.9		429.5
Other	Other	3.6		1.3		Other	3.0		3.1
		2,419.4		2,173.3			2,364.0		2,390.5
Long-term deferred financing fees	Long-term deferred financing fees	(57.0)		(64.6)		Long-term deferred financing fees	(45.3)		(54.8)
		$	2,362.4	$	2,108.7		$	2,318.7	$	2,335.7

As of June 30, 2020, the Company had various international short-term uncommitted lines of credit with borrowing limits of $46.1. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of June 30, 2020Senior and December 31, 2019 was 6.11 percent and 9.03 percent, respectively, and primarily relate to higher interest rate, short-term uncommitted lines of credit in Turkey and Brazil. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at June 30, 2020 was $38.5.Senior Secured Notes

On July 20, 2020, Diebold Nixdorf, Incorporated issued $700.0 aggregate principal amount of 9.375 percent Senior Secured Notes due 2025 (the 2025 Senior Secured Notes - USD) and its wholly-owned subsidiary, Diebold Nixdorf Dutch Holding B.V., issued €350.0 aggregate principal amount of 9.0 percent Senior Secured Notes due 2025 (the 2025 Senior Secured Notes - EUR and, together with the 2025 Senior Secured Notes - USD, the 2025 Senior Secured Notes) in private offerings exempt from registration under the Securities Act of 1933. The 2025 Senior Secured Notes - USD were issued at a price of 99.031 percent of their principal amount, and the 2025 Senior Secured Notes - EUR were issued at a price of 99.511 percent of their principal amount.

The 2025 Senior Secured Notes are or will be, as applicable, guaranteed on a senior secured basis by (i) all of Diebold Nixdorf, Incorporated’s existing and future direct and indirect U.S. subsidiaries that guarantee the obligations under the credit agreement (the Credit Agreement) governing the Company's revolving credit facility (the Revolving Facility) and (ii) all of Diebold Nixdorf, Incorporated’s existing, future, direct and indirect U.S. subsidiaries (other than securitization subsidiaries, immaterial subsidiaries and certain other subsidiaries) that guarantee any of the Diebold Nixdorf Dutch Holding B.V.’s, Diebold Nixdorf, Incorporated’s or its subsidiary guarantors’ indebtedness for borrowed money (collectively, the U.S. subsidiary guarantors). Additionally, the 2025 Senior Secured Notes - USD and the 2025 Senior Secured Notes - EUR are guaranteed on a senior secured basis by Diebold Nixdorf Dutch Holdings B.V. and Diebold Nixdorf, Incorporated, respectively. The 2025 Senior Secured Notes are secured by first-priority liens on substantially all of the tangible and intangible assets of Diebold Nixdorf, Incorporated, Diebold Nixdorf Dutch Holding B.V. and the U.S. subsidiary guarantors, in each case subject to permitted liens

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

and certain exceptions. The ~~cash flows~~first-priority liens on the collateral securing the 2025 Senior Secured Notes - USD and the related ~~to debt borrowings~~guarantees and ~~repayments were as follows:~~

Six Months Ended
June 30,
2020 2019
Revolving credit facility borrowings $ 461.0 $ 536.2
Revolving credit facility repayments $ (75.1) $ (546.2)
Other debt borrowings
International short-term uncommitted lines of credit borrowings $ 20.0 $ 19.6
Other debt repayments
Payments on 2022 Term Loan A Facility under the Credit Agreement $ (12.2) $ —
Payments Term Loan A-1 Facility under the Credit Agreement (28.6) (8.1)
Payments on Term Loan B Facility - USD under the Credit Agreement (15.9) (2.4)
Payments on Term Loan B Facility - Euro under the Credit Agreement (15.2) (2.4)
International short-term uncommitted lines of credit and other repayments (18.6) (30.0)
$ (90.5) $ (42.9)
the 2025 Senior Secured Notes - EUR and the related guarantees are shared ratably among the 2025 Senior Secured Notes and the obligations under the Credit Agreement.

~~As of June 30, 2020,~~The net proceeds from the ~~Company had a revolving and term loan credit agreement (the Credit Agreement), with a revolving facility of up to $412.5 (the Revolving Facility). On December 23, 2020, $68.8~~offerings of the ~~Revolving Facility was scheduled~~2025 Senior Secured Notes, along with cash on hand, were used to ~~mature. The weighted-average interest rate on~~repay a portion of the amounts outstanding Revolving Facility borrowings as of June 30, 2020 and December 31, 2019 was 4.46 percent and 6.01 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). There was no additional amount available under the ~~Revolving Facility as of June 30, 2020, after excluding $26.6 in letters of credit.~~

~~On May 9, 2017, the Company entered into an incremental amendment to its~~ Credit Agreement, ~~(the Incremental Agreement) which reduced~~including all amounts outstanding under 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.~~

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

On August 30, 2018, the Company entered into a sixth amendment and incremental amendment (the Sixth Amendment) to its Credit Agreement. The Sixth Amendment amended the financial covenants and established a new senior secured incremental term A-1 facility in an aggregate principal amount of $650.0 (Term Loan A-1 Facility) and made certain other changes to the Credit Agreement. Following the execution of the Sixth Amendment, the Company has executed, and has caused certain of its subsidiaries to execute, certain foreign security and guaranty documents for the benefit of the secured parties under the Credit Agreement that provide for guarantees by, and additional security with respect to the equity interests in and the stock of certain foreign subsidiaries.

~~As of June 30, 2020, the interest rate with respect to the~~ Term Loan A-1 Facility was based on, at the Company’s option, either the alternative base rate (ABR) plus 8.25 percent or a eurocurrency rate plus 9.25 percent. The Term A-1 Facility was scheduled to mature in August 2022, the fourth anniversaryand $193.8 of revolving credit loans, including all of the ~~Sixth Amendment. The Term Loan A-1 Facility was subject to a maximum consolidated net leverage ratio, a minimum consolidated interest coverage ratio~~revolving credit loans due in December 2020, and ~~certain covenant reset triggers~~

~~Table~~for the payment of ~~Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

(Covenant Reset Triggers) as described in the Sixth Amendment. Upon the occurrence of any Covenant Reset Trigger, the financial covenant levels will automatically revert to previous financial covenant levels in effect prior to the Sixth Amendment.

~~On August 7, 2019, the Company entered into a seventh amendment (the Seventh Amendment) to its Credit Agreement. The Seventh Amendment amended~~all related fees and extended certain of the Term A Loans, Revolving Credit Commitments and Revolving Credit Loans maturing on December 23, 2020 (collectively, the 2020 Facilities), to April 30, 2022, to be effected by an exchange of 2020 Term A Loans, 2020 Revolving Credit Commitments and 2020 Revolving Credit Loans for 2022 Term A Loans, 2022 Revolving Credit Commitments and 2022 Revolving Credit Loans, respectively.expenses.

In ~~connection with~~addition to the ~~Seventh Amendment,~~2025 Senior Secured Notes, the Company also raised $116.7 of new 2022 Term A Loan financing to fund commitment reduction of the 2020 Revolving Credit Commitments, paydown of the 2020 Revolving Credit Loans and payoff of the remaining 2020 Term A Loans. As a result, as of June 30, 2020, the Company had $317.1 and $68.8 in 2022 and 2020 Revolving Credit Commitments, respectively, as well as $358.1 inhas an outstanding ~~principal amount of 2022 Term A Loan.~~

The interest rates with respect to the 2022 Facilities are based on, at the Company’s option, adjusted LIBOR or an alternative base rate, in each case plus an applicable margin tied to the Company’s then applicable total net leverage ratio. Such applicable margins range from, for LIBOR-based 2022 Term A Loans, 1.25 percent to 4.75 percent, for LIBOR-based 2022 Revolving Loans, 1.25 percent to 4.25 percent, and for base-rate 2022 Term A Loans and 2022 Revolving Loans, 1.00 percent less than in the case of LIBOR-based loans.

~~The Credit Agreement financial ratios at June 30, 2020 were as follows:~~

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

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

~~The Company has~~ $400.0 aggregate principal amount of 8.5% Senior Notes due 2024 (the 2024 Senior Notes)~~, which~~. The 2024 Senior Notes were issued by Diebold Nixdorf, Incorporated and are ~~and will be~~ guaranteed by ~~certain of Diebold Nixdorf, Incorporated’s existing and future subsidiaries~~the U.S. subsidiary, and mature in April 2024.

~~Below is a summary~~Credit Agreement - Term Loan and Revolving Facilities

On November 6, 2020, the Company entered into the tenth and most recent amendment to the Credit Agreement to amend the definition of ~~financing~~“Interest Coverage Ratio” for certain time periods and ~~replacement facilities information:~~Covenant Reset Triggers (as defined in the Credit Agreement). The Interest Coverage Ratio calculation now excludes specific make-whole premiums, write-offs and expenses paid by the Company in relation to the Term A Loans and Term A-1 Loans.

Financing and Replacement Facilities Interest Rate
Index and Margin Maturity/Termination Dates Initial Term (Years)
Credit Agreement facilities
2020 Revolving Facility⁽ⁱ⁾
LIBOR + 3.50% December 2020 5
2022 Revolving Facility⁽ⁱ⁾
LIBOR + 4.25% April 2022 2.5
2022 Term Loan A Facility⁽ⁱ⁾
LIBOR + 4.75% April 2022 2.5
Term Loan A-1 Facility⁽ⁱ⁾
LIBOR + 9.25% August 2022 4
Term Loan B Facility - USD⁽ⁱ⁾
LIBOR + 2.75% November 2023 7.5
Term Loan B Facility - Euro⁽ⁱⁱ⁾
EURIBOR + 3.00% November 2023 7.5
2024 Senior Notes 8.5% April 2024 8

⁽ⁱ⁾~~LIBOR with a floor of 0.0%.~~

⁽ⁱⁱ⁾~~EURIBOR~~On July 20, 2020, the Company entered into the ninth amendment to the Credit Agreement (the Ninth Amendment). The Ninth Amendment amended the Credit Agreement to, among other things, extend the maturity of $330.0 of revolving credit commitments from April 30, 2022 to July 20, 2023 and amend the financial covenants in the Credit Agreement in connection with ~~a floor~~the extension of ~~0.0%.~~such maturities (and, effective as of the date of the Ninth Amendment, the Company terminated the majority of its other revolving credit commitments under the Revolving Facility.

As of June 30, ~~2020,~~2021, the ~~debt facilities~~Term Loan Facilities and Revolving Facility under the Credit Agreement were secured by substantially all assets of Diebold Nixdorf, Incorporated and its domestic subsidiaries that are borrowers or guarantors under the Credit Agreement, subject to certain exceptions and permitted liens.

Uncommitted Line of Credit

As of June 30, 2021, the Company had various international short-term uncommitted lines of credit with borrowing limits aggregating to $27.4. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of June 30, 2021 and December 31, 2020 was 11.44 percent and 7.61 percent, respectively, and primarily relate to higher interest rate, short-term uncommitted lines of credit in Turkey and Brazil. Short-term uncommitted lines mature in less than one year. The remaining amount available under the short-term uncommitted lines at June 30, 2021 was $21.4.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

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


	Six Months Ended
	June 30,
	2021		2020
Revolving credit facility borrowings	$	135.0	$	461.0

Revolving credit facility repayments	$	(114.1)	$	(75.1)

Other debt borrowings



International short-term uncommitted lines of credit borrowings	$	7.4	$	20.0


Other debt repayments
Payments on 2022 Term Loan A Facility under the Credit Agreement	$	0	$	(12.2)

Payments Term Loan A-1 Facility under the Credit Agreement	0		(28.6)
Payments on Term Loan B Facility - USD under the Credit Agreement	(2.4)		(15.9)
Payments on Term Loan B Facility - Euro under the Credit Agreement	(2.5)		(15.2)

International short-term uncommitted lines of credit and other repayments	(0.3)		(18.6)
	$	(5.2)	$	(90.5)

The interest rates with respect to the Revolving Facility are based on, at the Company’s option, adjusted LIBOR or an alternative base rate, plus an applicable margin tied to the Company’s then applicable total net leverage ratio. Such applicable margins range from, LIBOR-based Revolving Loans, 1.25 percent to 4.25 percent, and for base-rate Revolving Loans, 1.00 percent less than in the case of LIBOR-based loans.

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

2022 Revolving Facility(i)

LIBOR + 4.25%

April 2022

3.2

2023 Revolving Facility(ii)

LIBOR + 4.25%

July 2023

3.0

Term Loan B Facility - USD(i)

LIBOR + 2.75%

November 2023

7.5

Term Loan B Facility - Euro(iii)

EURIBOR + 3.00%

November 2023

7.5

2024 Senior Notes

8.5%

April 2024

2025 Senior Secured Notes - USD

9.375%

July 2025

2025 Senior Secured Notes - EUR

9.0%

July 2025

(i)LIBOR with a floor of 0.0%

(ii)LIBOR with a floor of 0.5%

(iii)EURIBOR with a floor of 0.0%

The Company's financing agreements contain various financial covenants, including ~~net debt to capitalization,~~ net debt to EBITDA and net interest coverage ratio, along with certain negative covenants that, among other things, limit dividends, acquisitions and the use of proceeds from divestitures. The Credit Agreement financial ratios at June 30, 2021 were as follows:

•a maximum allowable total net debt to adjusted EBITDA leverage ratio of 6.00 to 1.00 as of June 30, 2021 (reducing to 5.75 on December 31, 2021, 5.50 on September 30, 2022 and 5.25 on December 31, 2022 and thereafter); and

•a minimum adjusted EBITDA to net interest expense coverage ratio of not less than 1.50 to 1.00 as of June 30, 2021 (increasing to 1.625 on December 31, 2021 and 1.75 on December 31, 2022 and thereafter).

As of June 30, ~~2020,~~2021, the Company was in compliance with the financial covenants in its debt agreements.

~~Refer to note 22 for additional information regarding the July 2020 refinancing transactions.~~

2015

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

Note ~~12:~~10: Redeemable Noncontrolling Interests

Changes in ~~the Company's~~ redeemable noncontrolling interests ~~balance are illustrated in the following table:~~were as follows:

2020 2019
Balance at January 1 $ 20.9 $ 130.4
Other comprehensive income — (1.7)
Redemption value adjustment (0.8) (18.6)
Redemption of shares — (88.4)
Balance at June 30 $ 20.1 $ 21.7


	2021		2020
Beginning balance as of January 1	$	19.2	$	20.9

Redemption value adjustment	0		(0.8)
Termination of put option	(19.2)		0
Ending balance as of June 30	$	0	$	20.1

~~At December 31, 2018,~~During the ~~balance related~~first quarter of 2021, the Company entered into an agreement whereby its ownership percentage in a certain consolidated but non-wholly owned subsidiary in Europe was reduced by means of capital contributions from noncontrolling shareholders totaling $12.7. Following the agreement, the Company maintains a controlling interest in the subsidiary. As part of this agreement, the put option that could have required the Company to acquire the noncontrolling shares was irrevocably waived, reducing the redeemable noncontrolling interest ~~related~~ to the Diebold Nixdorf AG ordinary shares the Company did not acquire was $99.1. In May 2019, the Company announced that the merger/squeeze-out of Diebold Nixdorf AG was completed, streamlining and simplifying the Company's corporate structure. In the second quarter of 2019, the Company increased its ownership stake in Diebold Nixdorf AG to 29.8 ordinary shares, 100.0 percent ownership. With the completion of the merger/squeeze-out, only Diebold Nixdorf, Incorporated remains publicly-listed and no longer has subsidiary shares traded in Germany.zero.

The remaining balance of $20.1 as of June 30, 2020 relates to a certain noncontrolling interest in Europe, which has put right redemption features not within the control of the Company that are included in redeemable noncontrolling interests. The results of operations were not significant. The ultimate amount and timing of any future cash payments related to the put rights are uncertain.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

Note ~~13:~~11: Equity

The following tables present changes in shareholders' equity attributable to Diebold Nixdorf, Incorporated and the noncontrolling interests:


										Accumulated Other Comprehensive Income (Loss)		Total Diebold Nixdorf, Incorporated Shareholders' Equity																Accumulated Other Comprehensive Income (Loss)				Total Diebold Nixdorf, Incorporated Shareholders' Equity
		Common Shares		Additional Capital		Accumulated Deficit		Treasury Shares								Non-controlling Interests			Total Equity			Common Shares		Additional Capital		Accumulated Deficit								Total Diebold Nixdorf, Incorporated Shareholders' Equity			Non-controlling Interests			Total Equity
Balance, December 31, 2019		$	115.3	$	773.9	$	(472.3)	$	(571.9)	$	(375.3)	$	(530.3)	$	24.0	$	(506.3)
Balance, December 31, 2020																		Balance, December 31, 2020		$	116.9	$	787.9	$	(742.3)	$	(576.7)			$	(412.9)				$	(827.1)		$	(4.6)		$	(831.7)
Net loss																		Net loss		—		—		(8.1)		—		—				(8.1)			0			(8.1)
Other comprehensive loss																		Other comprehensive loss		—		—		—		—		(30.9)				(30.9)			0.5			(30.4)
Share-based compensation issued																		Share-based compensation issued		1.1		(1.1)		—		—		—				—			—			0
Share-based compensation expense																		Share-based compensation expense		—		3.5		—		—		—				3.5			—			3.5
Treasury shares																		Treasury shares		—		—		—		(5.2)		—				(5.2)			—			(5.2)

Redeemable noncontrolling interest adjustments																		Redeemable noncontrolling interest adjustments		—		19.2		—		—		—				19.2			12.7			31.9

Balance, March 31, 2021																		Balance, March 31, 2021		$	118.0	$	809.5	$	(750.4)	$	(581.9)	$	(443.8)			$	(848.6)		$	8.6		$	(840.0)
Net loss	Net loss					(92.8)						(92.8)		(0.6)		(93.4)		Net loss		—		—		(30.3)		—		—				(30.3)			0			(30.3)
Other comprehensive loss	Other comprehensive loss									(104.2)		(104.2)		(1.3)		(105.5)		Other comprehensive loss		—		—		—		—		23.3				23.3			0.1			23.4
Share-based compensation issued	Share-based compensation issued	1.4		(1.4)								—				—		Share-based compensation issued		0.2		(0.2)		—		—		—				—			—			0
Share-based compensation expense	Share-based compensation expense			4.0								4.0				4.0		Share-based compensation expense		—		4.5		—		—		—				4.5			—			4.5
Treasury shares	Treasury shares							(4.6)				(4.6)				(4.6)		Treasury shares		—		—		—		(0.2)		—				(0.2)			—			(0.2)

Divestitures, net	Divestitures, net											—		(4.8)		(4.8)		Divestitures, net		—		—		—		—		—				—			0			$	0
Balance, March 31, 2020		$	116.7	$	776.5	$	(565.1)	$	(576.5)	$	(479.5)	$	(727.9)	$	17.3	$	(710.6)
Net loss						(23.7)						(23.7)		0.6		(23.1)
Other comprehensive loss										45.1		45.1		—		45.1
Share-based compensation issued		0.2		(0.2)								—				—
Share-based compensation expense				3.6								3.6				3.6
Treasury shares								(0.1)				(0.1)				(0.1)
Divestitures, net												—		(23.4)		(23.4)
Balance, June 30, 2020		116.9		779.9		(588.8)		(576.6)		(434.4)		(703.0)		(5.5)		(708.5)
Balance, June 30, 2021																		Balance, June 30, 2021		$	118.2	$	813.8	$	(780.7)	$	(582.1)	$	(420.5)			(851.3)			$	8.7		$	(842.6)

Accumulated Other Comprehensive Income (Loss) Total Diebold Nixdorf, Incorporated Shareholders' Equity
Common Shares Additional
Capital Accumulated Deficit Treasury
Shares Non-controlling
Interests Total
Equity
Balance, December 31, 2018 $ 114.2 $ 741.8 $ (131.0) $ (570.4) $ (304.3) $ (149.7) $ 26.8 $ (122.9)
Net income (loss) (132.7) (132.7) 0.8 (131.9)
Other comprehensive income (loss) (1.9) (1.9) 2.7 0.8
Share-based compensation issued 0.7 (0.7) — —
Share-based compensation expense 9.3 9.3 9.3
Treasury shares (1.1) (1.1) (1.1)
Reclassification of guaranteed dividend to accrued liabilities — (0.6) (0.6)
Reclassifications of redeemable noncontrolling interest 10.6 10.6 — 10.6
Divestitures, net — (3.0) (3.0)
Balance, March 31, 2019 $ 114.9 $ 761.0 $ (263.7) $ (571.5) $ (306.2) $ (265.5) $ 26.7 $ (238.8)
Net income (loss) (50.3) (50.3) (5.0) (55.3)
Other comprehensive loss 18.6 18.6 (2.5) 16.1
Share-based compensation issued 0.3 (0.3) — —
Share-based compensation expense 4.8 4.8 4.8
Treasury shares (0.3) (0.3) (0.3)
Reclassification of guaranteed dividend to accrued liabilities — 5.6 5.6
Reclassifications of redeemable noncontrolling interest (0.2) (0.2) (0.2)
Divestitures, net — — —
Balance, June 30, 2019 $ 115.2 $ 765.3 $ (314.0) $ (571.8) $ (287.6) $ (292.9) $ 24.8 $ (268.1)

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)


										Accumulated Other Comprehensive Income (Loss)		Total Diebold Nixdorf, Incorporated Shareholders' Equity
	Common Shares		Additional Capital		Accumulated Deficit			Treasury Shares						Non-controlling Interests		Total Equity
Balance, December 31, 2019	$	115.3	$	773.9	$	(472.3)		$	(571.9)	$	(375.3)	$	(530.3)	$	24.0	$	(506.3)
Net income (loss)	—		—		(92.8)		-23.7	—		—		(92.8)		(0.6)		(93.4)
Other comprehensive loss	—		—		—			—		(104.2)		(104.2)		(1.3)		(105.5)
Share-based compensation issued	1.4		(1.4)		—			—		—		0		—		0
Share-based compensation expense	—		4.0		—			—		—		4.0		—		4.0
Treasury shares	—		—		—			(4.6)		—		(4.6)		—		(4.6)


Divestitures, net	—		—		—			—		—		0		(4.8)		(4.8)
Balance, March 31, 2020	$	116.7	$	776.5	$	(565.1)		$	(576.5)	$	(479.5)	$	(727.9)	$	17.3	$	(710.6)
Net income (loss)	—		—		(23.7)			—		—		(23.7)		0.6		(23.1)
Other comprehensive loss	—		—		—			—		45.1		45.1		0		45.1
Share-based compensation issued	0.2		(0.2)		—			—		—		0		—		0
Share-based compensation expense	—		3.6		—			—		—		3.6		—		3.6
Treasury shares	—		—		—			(0.1)		—		(0.1)		—		(0.1)


Divestitures, net	—		—		—			—		—		0		(23.4)		(23.4)
Balance, June 30, 2020	$	116.9	$	779.9	$	(588.8)		$	(576.6)	$	(434.4)	$	(703.0)	$	(5.5)	$	(708.5)

2217

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

Note ~~14:~~12: Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the Company’s ~~AOCI,~~accumulated other comprehensive income (AOCI), net of tax, by component for the three months ended June 30, ~~2020:~~2021:


		Translation		Foreign Currency Hedges		Interest Rate Hedges		Pension and Other Post-retirement Benefits		Other		Accumulated Other Comprehensive Income (Loss)			Translation		Foreign Currency Hedges		Interest Rate Hedges		Pension and Other Post-retirement Benefits		Other		Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2020		$	(326.8)	$	(1.9)	$	(10.0)	$	(139.8)	$	(1.0)	$	(479.5)
Balance at March 31, 2021														Balance at March 31, 2021	$	(292.5)	$	(1.0)	$	(4.5)	$	(144.3)	$	(1.5)	$	(443.8)
Other comprehensive income (loss) before reclassifications ⁽¹⁾	Other comprehensive income (loss) before reclassifications ⁽¹⁾	42.5		1.5		(2.4)		—		0.4		42.0		Other comprehensive income (loss) before reclassifications (1)	21.7		(1.3)		2.0		0		0		22.4
Amounts reclassified from AOCI	Amounts reclassified from AOCI	—		—		0.8		2.3		—		3.1		Amounts reclassified from AOCI	0		0		(0.3)		1.2		0		0.9
Net current-period other comprehensive income (loss)	Net current-period other comprehensive income (loss)	42.5		1.5		(1.6)		2.3		0.4		45.1		Net current-period other comprehensive income (loss)	21.7		(1.3)		1.7		1.2		0		23.3
Balance at June 30, 2020		$	(284.3)	$	(0.4)	$	(11.6)	$	(137.5)	$	(0.6)	$	(434.4)
Balance at June 30, 2021														Balance at June 30, 2021	$	(270.8)	$	(2.3)	$	(2.8)	$	(143.1)	$	(1.5)	$	(420.5)

⁽¹⁾ Other comprehensive income (loss) before reclassifications within the translation component excludes ~~nominal~~a $(0.1) translation amount attributable to noncontrolling interests.

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the three months ended June 30, ~~2019:~~2020:


		Translation		Foreign Currency Hedges		Interest Rate Hedges		Pension and Other Post-retirement Benefits		Other		Accumulated Other Comprehensive Income (Loss)			Translation		Foreign Currency Hedges		Interest Rate Hedges		Pension and Other Post-retirement Benefits		Other		Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2019		$	(191.2)	$	(2.5)	$	8.8	$	(121.5)	$	0.2	$	(306.2)
Balance at March 31, 2020														Balance at March 31, 2020	$	(326.8)	$	(1.9)	$	(10.0)	$	(139.8)	$	(1.0)	$	(479.5)
Other comprehensive income (loss) before reclassifications(1)	Other comprehensive income (loss) before reclassifications(1)	16.5		0.7		(3.4)		—		—		13.8		Other comprehensive income (loss) before reclassifications(1)	42.5		1.5		(2.4)		0		0.4		42.0
Amounts reclassified from AOCI	Amounts reclassified from AOCI	—		—		0.5		4.3		—		4.8		Amounts reclassified from AOCI	0		0		0.8		2.3		0		3.1
Net current-period other comprehensive income (loss)	Net current-period other comprehensive income (loss)	16.5		0.7		(2.9)		4.3		—		18.6		Net current-period other comprehensive income (loss)	42.5		1.5		(1.6)		2.3		0.4		45.1
Balance at June 30, 2019		$	(174.7)	$	(1.8)	$	5.9	$	(117.2)	$	0.2	$	(287.6)
Balance at June 30, 2020														Balance at June 30, 2020	$	(284.3)	$	(0.4)	$	(11.6)	$	(137.5)	$	(0.6)	$	(434.4)

⁽¹⁾ Other comprehensive income (loss) before reclassifications within the translation component excludes ~~$(2.5) of~~a nominal translation amount attributable to noncontrolling interests.

2318

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the six months ended June 30, ~~2020:~~2021:

Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2020 $ (231.5) $ (2.6) $ 5.2 $ (146.6) $ 0.2 $ (375.3)
Other comprehensive income (loss) before reclassifications ⁽¹⁾
(52.8) 2.2 (22.1) — (0.8) (73.5)
Amounts reclassified from AOCI — — 5.3 9.1 — 14.4
Net current-period other comprehensive income (loss) (52.8) 2.2 (16.8) 9.1 (0.8) (59.1)
Balance at June 30, 2020 $ (284.3) $ (0.4) $ (11.6) $ (137.5) $ (0.6) $ (434.4)

^{Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2021 $ (256.7) $ (2.6) $ (6.1) $ (146.9) $ (0.6) $ (412.9)
Other comprehensive income (loss) before reclassifications (1) (14.1) 0.3 4.1 0 (0.9) (10.6)
Amounts reclassified from AOCI 0 0 (0.8) 3.8 0 3.0
Net current-period other comprehensive income (loss) (14.1) 0.3 3.3 3.8 (0.9) (7.6)
Balance at June 30, 2021 $ (270.8) $ (2.3) $ (2.8) $ (143.1) $ (1.5) $ (420.5)}

(1) Other comprehensive income (loss) before reclassifications within the translation component excludes ~~$1.3~~$(0.6) of translation attributable to noncontrolling interests.

The following table summarizes the changes in the Company’s AOCI, net of tax, by component for the six months ended June 30, ~~2019:~~2020:

Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2019 $ (192.1) $ (1.9) $ 10.6 $ (121.0) $ 0.1 $ (304.3)
Other comprehensive income (loss) before reclassifications ⁽¹⁾
17.4 0.1 (5.7) — 0.1 11.9
Amounts reclassified from AOCI — — 1.0 3.8 — 4.8
Net current-period other comprehensive income (loss) 17.4 0.1 (4.7) 3.8 0.1 16.7
Balance at June 30, 2019 $ (174.7) $ (1.8) $ 5.9 $ (117.2) $ 0.2 $ (287.6)

^{Translation Foreign Currency Hedges Interest Rate Hedges Pension and Other Post-retirement Benefits Other Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2020 $ (231.5) $ (2.6) $ 5.2 $ (146.6) $ 0.2 $ (375.3)
Other comprehensive income (loss) before reclassifications (1) (52.8) 2.2 (22.1) 0 (0.8) (73.5)
Amounts reclassified from AOCI 0 0 5.3 9.1 0 14.4
Net current-period other comprehensive income (loss) (52.8) 2.2 (16.8) 9.1 (0.8) (59.1)
Balance at June 30, 2020 $ (284.3) $ (0.4) $ (11.6) $ (137.5) $ (0.6) $ (434.4)}

(1) Other comprehensive income (loss) before reclassifications within the translation component excludes ~~$0.2~~$1.3 of translation attributable to noncontrolling interests.

The following table summarizes the details about the amounts reclassified from AOCI:

Three Months Ended Six Months Ended Affected Line Item in the Statement of Operations
June 30, June 30,
2020 2019 2020 2019
Interest rate hedges $ 0.8 $ 0.5 $ 5.3 $ 1.0 Interest expense
Pension and post-retirement benefits:
Net actuarial gain (loss) amortization (net of tax of $0.4, $0.4, $1.8 and $0.7, respectively) 2.3 4.3 9.1 3.8 (1)
Total reclassifications for the period $ 3.1 $ 4.8 $ 14.4 $ 4.8

⁽¹⁾ ~~Pension and other post-retirement benefits AOCI components are included in the computation of net periodic benefit cost (refer to note 16).~~


	Three Months Ended				Six Months Ended				Affected Line Item on the Statement of Operations
	June 30,				June 30,
	2021		2020		2021		2020
Interest rate hedge gain/(loss)	$	(0.3)	$	0.8	$	(0.8)	$	5.3	Interest expense
Pension and post-retirement benefits:
Net actuarial loss amortized (net of tax of $0.4, $0.4, $0.9 and $1.8, respectively)	1.2		2.3		3.8		9.1		Miscellaneous, net
Total reclassifications for the period	$	0.9	$	3.1	$	3.0	$	14.4

Note ~~15: Acquisitions and Divestitures~~

~~Divestitures~~

In 2020, the Company divested several non-core, non-accretive businesses in Eurasia, which resulted in a loss of $14.8 and $13.0 for the three and six months ended June 30, 2020, respectively. The loss of $14.8 for the three months ended June 30, 2020 included losses on two transactions, and the loss of $13.0 for the six months ended June 30, 2020 included the losses on those two transactions in the second quarter, as well as the gain on a transaction completed in the first quarter, all further discussed below.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

In the first quarter of 2020, the Company divested Portavis GmbH, a non-core, Eurasia Banking consulting business, which resulted in a gain of $1.8 and cash consideration received of $10.1, excluding cash divested.

In the second quarter of 2020, the Company divested a portion of its operations in China, which resulted in a loss of $8.6 and consideration received of $26.8 along with increased ownership in Inspur, from 40.0 percent to 48.1 percent. Additionally, the Company sold Cryptera A/S, a Danish subsidiary, which resulted in a loss of $5.9 during the three months ended June 30, 2020.

In 2019, the Company exited and divested certain non-core, non-accretive business which resulted in a loss of $11.7 and $15.1 for the three and six months ended June 30, 2019, respectively. In the first quarter of 2019, the Company divested its interest in Projective NV, a program and project management services business for financial institutions included in Eurasia Banking operating segment, for $4.2 in proceeds, net of cash transferred resulting in a loss $2.8. During the first quarter of 2019, the Company also recorded a loss of $4.1 on the divestiture of its Venezuela business included in the Americas Banking operating segment and a gain of $3.5 related to the Company’s exit activities of certain entities in the Netherlands, included in the Retail operating segment. During the second quarter of 2019, the Company identified an immaterial error in the first quarter of 2019 for the loss (gain) on sale of assets, net related to this divestiture. Management determined this error was not material to the prior period and recorded the correction in the three months ended June 30, 2019 resulting in a $9.5 charge in the loss (gain) on the sale of assets, net.

~~In the second quarter of 2019, the Company divested its remaining SecurCash B.V. entity included in the Eurasia Banking operating segment resulting in a loss of $1.1.~~

~~Acquisitions~~

During the first six months of 2019, the Company acquired the remaining shares of Diebold Nixdorf AG for $97.5, inclusive of the redemption of shares and the proportionate recurring compensation pursuant to the DPLTA.

~~Note 16:~~13: Benefit Plans

Qualified Retirement Benefits. 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 the employee’s compensation during the ten years before the date of the plan freeze or the date of their actual separation from service, if earlier. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. Plans covering hourly employees generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions required by applicable regulations.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The ~~Company's~~Company has a number of non-U.S. ~~cover~~defined benefit plans covering eligible employees located predominately in ~~Germany, Switzerland, Belgium,~~Europe, the ~~U.K. and France.~~most significant of which are German plans. Benefits for these plans are based primarily on each employee's final salary, with annual adjustments for inflation. The obligations in Germany consist of employer funded pension plans and deferred compensation ~~plans. The employer funded pension plans are based upon direct performance-related commitments in terms of defined contribution~~ plans. Each beneficiary receives, depending on individual pay-scale grouping, contractual classification, or income level, different yearly contributions. The contribution is multiplied by an age factor appropriate to the respective pension plan and credited to the individual retirement account of the employee. The retirement accounts may be used up at retirement by either a one-time lump-sum payout or payments of up to ten years. In Switzerland, the post-employment benefit plan is required due to statutory provisions. The employees receive their pension payments as a function of contributions paid, a fixed interest rate and annuity factors. Insured events for these plans are primarily disability, death and reaching of retirement age.recurring payments.

The Company has other defined benefit plans outside the U.S., which have not been ~~mentioned here~~disclosed due to ~~their insignificance.~~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 were also 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

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. There are no plan assets and the Company funds the benefits as the claims are paid. The post-retirement benefit obligation was determined by application of the terms of medical and life insurance plans together with relevant actuarial assumptions and healthcare cost trend rates.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for the three months ended June ~~30:~~30, 2021 and June 30, 2020:


		Pension Benefits																						Pension Benefits
		U.S.Plans						Non-U.S. Plans							Other Benefits							U.S. Plans				Non-U.S. Plans		Other Benefits
		2020		2019		2020		2019		2020		2019				2021		2020		2021		2020		2021		2020
Components of net periodic benefit cost	Components of net periodic benefit cost													Components of net periodic benefit cost
Service cost	Service cost	$	0.9	$	0.9	$	2.6	$	2.4	$	—	$	—	Service cost		$	0.8	$	0.9	$	2.6	$	2.6	$	0	$	0
Interest cost	Interest cost	4.7		5.5		1.0		1.7		0.1		0.4		Interest cost		3.9		4.7		0.7		1.0		0.2		0.1
Expected return on plan assets	Expected return on plan assets	(6.4)		(6.2)		(3.2)		(3.2)		—		—		Expected return on plan assets		(6.3)		(6.4)		(3.7)		(3.2)		0		0
Recognized net actuarial loss	Recognized net actuarial loss	2.0		1.3		(0.2)		(0.4)		—		0.2		Recognized net actuarial loss		2.2		2.0		(0.7)		(0.2)		0.1		0

Other														Other		0		0		0		0		0		0
Net periodic pension benefit cost	Net periodic pension benefit cost	$	1.2	$	1.5	$	0.2	$	0.5	$	0.1	$	0.6	Net periodic pension benefit cost		$	0.6	$	1.2	$	(1.1)	$	0.2	$	0.3	$	0.1

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for the six months ended June ~~30:~~30, 2021 and June 30, 2020:


		Pension Benefits																						Pension Benefits
		U.S.Plans						Non-U.S. Plans							Other Benefits							U.S. Plans				Non-U.S. Plans		Other Benefits
		2020		2019		2020		2019		2020		2019				2021		2020		2021		2020		2021		2020
Components of net periodic benefit cost	Components of net periodic benefit cost													Components of net periodic benefit cost
Service cost	Service cost	$	1.9	$	1.8	$	5.1	$	4.9	$	—	$	—	Service cost		$	1.6	$	1.9	$	5.1	$	5.1	$	0	$	0
Interest cost	Interest cost	9.4		11.0		2.0		3.3		0.1		0.5		Interest cost		7.9		9.4		1.5		2.0		0.4		0.1
Expected return on plan assets	Expected return on plan assets	(12.7)		(12.4)		(6.5)		(6.3)		—		—		Expected return on plan assets		(12.7)		(12.7)		(7.5)		(6.5)		0		0
Recognized net actuarial loss	Recognized net actuarial loss	3.9		2.6		(0.3)		(0.8)		(0.1)		0.2		Recognized net actuarial loss		4.5		3.9		0.1		(0.3)		0.1		(0.1)

Other	Other	—		—		0.1		—		—		—		Other		0		0		0		0.1		0		0
Net periodic pension benefit cost	Net periodic pension benefit cost	$	2.5	$	3.0	$	0.4	$	1.1	$	—	$	0.7	Net periodic pension benefit cost		$	1.3	$	2.5	$	(0.8)	$	0.4	$	0.5	$	—

Contributions

~~There have been no significant changes to the expected 2020 plan year contribution amounts previously disclosed.~~ For the six months ended June 30, ~~2020~~2021 and June 30, ~~2019,~~2020, contributions of ~~$17.9~~$20.7 and ~~$20.5,~~$17.9, respectively, were made to the qualified and non-qualified pension plans. ~~The~~In June 2021, the Company received a reimbursement of $16.4 for certain benefits paid from its German plan trustee. In June 2020, the Company received a reimbursement of $13.5 for certain benefits paid from its ~~non-U.S. plan trustee in June 2020. In May 2019, the Company received a reimbursement of $12.9 for certain benefits paid from its non-U.S.~~German plan trustee.

The Company expects that pension benefit costs and financial position will fluctuate year-over-year, along with contribution requirements, due to the performance of plan assets and changes in interest rates, among others. As a result, the Company may not be able to reasonably estimate impact due to the uncertainty and extent of the COVID-19 pandemic and related macroeconomic implications along with actions taken by government authorities.

Note ~~17:~~14: Derivative Instruments and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic ~~conditions. The Company principally~~conditions and manages ~~its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages~~certain 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 foreign currency derivative 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 ~~exposures to changes in~~ interest ~~rates~~expense on ~~our variable-rate~~variable interest rate borrowings.

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

~~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	Derivative instrument	Classification on condensed consolidated statements of operations	Three Months Ended								Six Months Ended							Derivative instrument	Classification on condensed consolidated statements of operations				Three Months Ended						Six Months Ended
							June 30,								June 30,							Derivative instrument			Classification on condensed consolidated statements of operations			June 30,			June 30,
							2020			2019			2020		2019	Derivative instrument					2021							2021		2020
Non-designated hedges and interest rate swaps		Interest expense	$	(3.4)	$	(0.4)		$	(4.9)		$	(1.5)
Foreign exchange forward contracts and cash flow hedges													Foreign exchange forward contracts and cash flow hedges	Foreign exchange gain (loss), net				0.1	$	6.4			$	(4.1)		$	(7.2)
Interest rate swaps and non-designated hedges													Interest rate swaps and non-designated hedges	Interest expense				(2.2)		(3.4)				(4.1)			(4.9)
Foreign exchange forward contracts and cash flow hedges	Foreign exchange forward contracts and cash flow hedges	Net sales	0.2		(0.4)			0.5			(0.5)		Foreign exchange forward contracts and cash flow hedges	Cost of sales			0.1		—				—			—
Foreign exchange forward contracts and cash flow hedges	Foreign exchange forward contracts and cash flow hedges	Foreign exchange gain (loss), net	6.4		0.5			(7.2)			0.7		Foreign exchange forward contracts and cash flow hedges	Net sales			0		0.2				0			0.5
Total	Total		$	3.2	$	(0.3)		$	(11.6)		$	(1.3)	Total				$	(2.0)	$	3.2			$	(8.2)		$	(11.6)

Foreign Exchange

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~~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 ~~certain of~~ 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 $(0.6) and $(0.4) as of June 30, 2020 and December 31, 2019, respectively.~~

Cash Flow Hedges The Company is exposed to fluctuations in various foreign currencies against its functional currency. ~~At the Company,~~In many instances, both sales and purchases are transacted in foreign currencies. Diebold Nixdorf Systems GmbH, a EUR-functional currency subsidiary of 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 FX risk due to purchase of raw materials that are denominated in USD. Such purchases expose the ~~GBP~~Company to exchange rate fluctuations between EUR and USD. To hedge this risk, the Company enters into and designates certain foreign currency forward contracts to sell EUR and buy USD as ~~the 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~~cash flow hedges of the Company’s USD-denominated raw material purchases.

WNI, a EUR-functional-currency subsidiary, is exposed to FX risk due to sales that ~~is not naturally hedged,~~are denominated in GBP. To hedge this risk, the Company enters into and designates certain foreign currency ~~forwards are used~~forward contracts to ~~manage~~sell GBP and buy EUR as cash flow hedges of the ~~exposure between EUR-GBP.~~Company’s GBP-denominated intercompany sales.

Procomp Amazonia Industria Electronica S.A. is a ~~BRL-functional-currency~~Brazilian real (BRL) functional-currency subsidiary of Diebold Nixdorf, Incorporated that, on a routine basis and in the normal course of business, makes inventory purchases that are denominated in USD. Upon the completion of customs clearance, accounts payable and inventory are recorded using the daily spot USD-BRL exchange rate, and released to cost of goods sold as inventory is sold. Such expenses expose the Company to exchange rate fluctuations between BRL and USD until the accounts payable and inventory is recorded. To hedge this risk, the Company enters into and designates certain foreign currency forward contracts to sell BRL and buy USD as cash flow hedges of the Company’s ~~USD-denominated~~USD denominated inventory purchases.

Derivative instruments are recorded on the balance sheet at fair value. For ~~transactions~~instruments designated as cash flow hedges, the effective portion of changes in the fair value ~~are~~is 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~~changes in fair value of the derivatives is recognized directly in earnings. As of June 30, ~~2020,~~2021, 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-GBP) 12 24.0 GBP 27.0 EUR
Currency forward agreements (USD-BRL) 2 7.4 USD 36.9 BRL

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Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)


Foreign Currency Derivative	Number of Instruments	Notional Sold		Notional Purchased

Currency forward agreements (USD-BRL)	4	25.4	BRL	4.9	USD
Currency forward agreements (GBP-EUR)	4	2.2	GBP	2.6	EUR
Currency forward agreements (USD-EUR)	2	1.0	EUR	1.2	USD

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. 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 a minimal amount will be reclassified as a decrease to interest expense over the next year.

In March 2020 and September 2019, the Company entered into multiple pay-fixed receive-variable interest rate swaps with aggregate notional amounts of $250.0 and $500.0, respectively. 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. The ineffective portion of the ~~change~~changes in fair value of the derivatives is recognized directly in earnings.

~~In November 2016,~~As a result of the Company's refinancing activities in July 2020 (refer to note 9), the Company ~~entered into multiple pay-fixed receive-variable~~terminated $625.0 of interest rate ~~swaps with an aggregate notional amount~~hedges resulting in a termination payout 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. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.$6.2.

The Company has an interest rate 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. This interest rate swap mitigated the interest rate risk associated with the European Investment Bank debt, which was paid in full during 2017. For this interest swap, the three-month EURIBOR is received and a fixed interest rate of 2.97 percent is paid. The interest rate swap is not designated and changes in the fair value of non-designated interest rate swap agreements are recognized in Miscellaneous, net in the condensed consolidated statements of operations. The Company recognized $0.7 and $0.5 of expense relating to the interest rate swap for the three months ended June 30, 2020 and 2019, respectively. The Company recognized $1.2 and $1.0 of expense relating to the interest rate swap for the six months ended June 30, 2020 and 2019, respectively.

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

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

Note ~~18:~~15: Fair Value of Assets and Liabilities

Assets and Liabilities Recorded at Fair Value

~~As a result of the disruption and uncertainty related to the COVID-19 pandemic, fair values may experience volatile movements that cannot be reasonably estimated.~~

Assets and liabilities subject to fair value measurement ~~are~~by fair value level and recorded as follows:


			June 30, 2020										December 31, 2019												June 30, 2021					December 31, 2020
					Fair Value Measurements Using								Fair Value Measurements Using										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			Classification on condensed consolidated Balance Sheets	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
Assets	Assets														Assets
Short-term investments	Short-term investments														Short-term investments
Certificates of deposit	Certificates of deposit	Short-term investments	$	9.0	$	9.0	$	—	$	10.0	$	10.0	$	—	Certificates of deposit	Short-term investments	$	8.1	$	8.1	$	0	$	37.2	$	37.2	$	0
Assets held in rabbi trusts	Assets held in rabbi trusts	Securities and other investments	5.7		5.7		—		6.2		6.2		—		Assets held in rabbi trusts	Securities and other investments	6.9		6.9		0		6.6		6.6		0
Foreign exchange forward contracts	Foreign exchange forward contracts	Other current assets	4.3		—		4.3		2.9		—		2.9		Foreign exchange forward contracts	Other current assets	0		0		0		1.7		0		1.7
Interest rate swaps		Other current assets	—		—		—		1.7		—		1.7
Interest rate swaps		Securities and other investments	—		—		—		0.1		—		0.1

Total	Total		$	19.0	$	14.7	$	4.3	$	20.9	$	16.2	$	4.7	Total		$	15.0	$	15.0	$	0	$	45.5	$	43.8	$	1.7
Liabilities	Liabilities														Liabilities
Foreign exchange forward contracts	Foreign exchange forward contracts	Other current liabilities	$	6.3	$	—	$	6.3	$	2.9	$	—	$	2.9	Foreign exchange forward contracts	Other current liabilities	$	0.2	$	0	$	0.2	$	2.7	$	0	$	2.7
Interest rate swaps		Other liabilities	12.2		—		12.2		2.3		—		2.3
Interest rate swaps - long term															Interest rate swaps - long term	Other liabilities	0.7		0		0.7		3.0		0		3.0
Deferred compensation	Deferred compensation	Other liabilities	5.7		5.7		—		6.2		6.2		—		Deferred compensation	Other liabilities	6.9		6.9		0		6.6		6.6		0
Total	Total		$	24.2	$	5.7	$	18.5	$	11.4	$	6.2	$	5.2	Total		$	7.8	$	6.9	$	0.9	$	12.3	$	6.6	$	5.7

The Company uses the end of period when determining the timing of transfers between levels. During each of the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, there were 0 transfers between levels.

~~The carrying amount of the Company's debt instruments approximates fair value except for the 2024 Senior Notes. The fair value and carrying value of the 2024 Senior Notes are summarized as follows:~~

June 30, 2020 December 31, 2019
Fair Value Carrying
Value Fair Value Carrying
Value
2024 Senior Notes $ 320.5 $ 400.0 $ 387.0 $ 400.0

Refer to note 11 for further details surrounding the Company's long-term debt as of June 30, 2020 compared to December 31, 2019. Additionally, the Company remeasures certain assets to fair value, using Level 3 measurements, as a result of the occurrence of triggering events. There were no significant assets or liabilities that were remeasured at fair value on a non-recurring basis during the periods presented.

2923

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

The carrying amount of the Company's debt instruments approximates fair value except for the 2024 Senior Notes and 2025 Senior Secured Notes. The fair value and carrying value of the 2024 Senior Notes and 2025 Senior Secured Notes are summarized as follows:


	June 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
2024 Senior Notes	$	408.0	$	400.0	$	400.0	$	400.0
2025 Senior Secured Notes - USD	$	773.5	$	700.0	$	778.8	$	700.0
2025 Senior Secured Notes - EUR	$	457.0	$	415.9	$	466.0	$	429.5

Refer to note 9 for further details surrounding the Company's long-term debt as of June 30, 2021 compared to December 31, 2020. Additionally, the Company would remeasure certain assets at fair value, using Level 3 measurements, as a result of the occurrence of triggering events.

Note ~~19:~~16: Commitments and Contingencies

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 June 30, ~~2020,~~2021, 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 party to the proceedings described below:~~

The Company has challenged multiple customs rulings in Thailand seeking to retroactively collect customs duties on previous imports of automated teller machines (ATMs). In August 2017, March 2019, August 2019, and May 2020 the Supreme Court of Thailand ruled in the Company's favor; finding each time that Customs' attempt to collect duties for importation of ATMs was improper. The surviving matters are immaterial and accordingly, the Company believes a loss is not probable and accordingly, does not have any amount accrued for this contingency.

A loss contingency is reasonably possible if it has a more than remote but less than probable chance of occurring. Although management believes the Company has valid defenses with respect to its indirect tax positions, it is reasonably possible that a loss could occur in excess of the estimated ~~accrual.~~liabilities. The Company estimated the aggregate risk at June 30, ~~2020~~2021 to be up to ~~$57.5~~$76.3 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 June 30, ~~2020,~~2021, 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 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.

In addition to these normal course of business litigation matters, the Company is a party to the proceedings described below:

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, 2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

In July and August 2019, shareholders filed putative class action lawsuits alleging violations of federal securities laws in the United States District Court for the Southern District of New York and the Northern District of Ohio. The lawsuits collectively assert that the Company and three former officers (collectively, Defendants) made material misstatements regarding the Company’s business and operations, causing the Company’s common stock to be overvalued from February 14, 2017 to August 1, 2018. The lawsuits were consolidated before a single judge in the United States District Court for the Southern District of New York and lead plaintiff appointed. In March 2021, the judge granted Defendants’ motion to dismiss and in April 2021 judgment was rendered in the Defendants’ favor. Although the plaintiffs originally filed an appeal, in June 2021, the plaintiffs subsequently withdrew the appeal and, therefore, the litigation is now over, fully resolved in favor of the Company and its former officers.

In January 2020, the Company’s Board of Directors received a demand letter from alleged shareholders to investigate and pursue claims for breach of fiduciary duty against certain current and former directors and officers based on the Company’s statements regarding its business and operations, which are substantially similar to those challenged in the federal securities litigation. Following the dismissal of the federal securities litigation, in July 2021, the alleged shareholders informed the Company that they withdrew the demand letter. Therefore, both the securities litigation and the subsequent shareholder demand letter are now concluded, completely resolved in favor of the Company and its current and former officers.

Diebold Nixdorf Holding Germany GmbH, formerly Diebold Nixdorf Holding Germany Inc. & Co. KGaA (Diebold KGaA), is a party to two separate appraisal proceedings (Spruchverfahren) in connection with the purchase of all shares in its former listed subsidiary, Diebold Nixdorf AG. Both proceedings are pending at the same Chamber for Commercial Matters (Kammer für Handelssachen) at the District Court (Landgericht) of Dortmund (Germany). The first appraisal proceeding relates to the Domination and Profit ~~and~~Transfer Loss ~~Transfer~~ Agreement ~~dated September 26, 2016 (the DPLTA)~~(DPLTA) entered into by Diebold KGaA and former Diebold Nixdorf AG, which became effective on February 17, 2017. 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 million 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 the cash merger squeeze-out of minority shareholders of Diebold Nixdorf AG in 2019. The squeeze-out appraisal proceeding was filed by minority shareholders of Diebold Nixdorf AG challenging the

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

adequacy of the cash exit compensation of €54.80 per Diebold Nixdorf AG share (of which 1.4 million shares were then outstanding) in connection with the merger squeeze-out.

In both appraisal proceedings, a court ruling would apply to all Diebold Nixdorf AG shares outstanding at the time 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. While the Company believes that the compensation offered in connection with the DPLTA and the merger squeeze-out was in both cases fair, it notes that German courts often adjudicate increases of the cash compensation to plaintiffs in varying amounts in connection with German appraisal proceedings. Therefore, the Company cannot rule out that the first instance court or an appellate court may increase the cash compensation also in these appraisal proceedings. The Company, however, is convinced that its defense in both appraisal proceedings, which are still at preliminary stages, is supported by strong sets of facts and the Company will continue to vigorously defend itself in these matters.

~~In July~~Bank Guarantees, Standby Letters of Credit, and August 2019, shareholders filed putative class action lawsuits alleging violations of federal securities laws in the United States District Court for the Southern District of New York and the Northern District of Ohio. The lawsuits collectively assert that the Company and three former officers made material misstatements regarding the Company’s business and operations, causing the Company’s common shares to be overvalued from February 14, 2017 to August 1, 2018. The lawsuits have been consolidated before a single judge in the United States District Court for the Southern District of New York and lead plaintiffs appointed. While management remains confident that it has valid defenses to these claims, as with any pending litigation, the Company is unable to predict the final outcome of this matter.Surety Bonds

In ~~January~~the ordinary course of business, the Company may issue performance guarantees on behalf of its subsidiaries to certain customers and other parties. Some of those guarantees may be backed by standby letters of credit, surety bonds, or similar instruments. In general, under the guarantees, the Company would be obligated to perform, or cause performance, over the term of the underlying contract in the event of an unexcused, uncured breach by its subsidiary, or some other specified triggering event, in each case as defined by the applicable guarantee. At June 30, 2021, the maximum future contractual obligations relative to these various guarantees totaled $166.0, of which $25.8 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, 2020, the ~~Company's Board~~maximum future payment obligations relative to these various guarantees totaled $177.3, of ~~Directors received a demand letter from alleged shareholders~~which $25.8 represented standby letters of credit to ~~investigate~~insurance providers, and pursue claims for breach of fiduciary duty against certain current and former directors and officers based on the Company's statements regarding its business and operations, which are substantially similar to those challenged in the federal securities litigation. The Board has determined to defer consideration of the demand while the federal securities litigation remains pending.

~~Note 20: Segment and Revenue Information~~

The Company's accounting policies result in segments that are the same as those the Chief Operating Decision Maker (CODM) regularly reviews and uses to make decisions, allocate resources and assess performance. The Company continually considers its operating structure and the information subject to regular review by its Chief Executive Officer, who is the CODM, to identify reportable operating segments. The Company’s operating structure is based on a number of factors that management uses to evaluate, view and run its business operations, which currently includes, but is not limited to, product, service and solution. The Company's reportable operating segments are based on the following solutions: Eurasia Banking, Americas Banking and Retail.

Segment revenue represents revenues from sales to external customers. Segment operating profit is defined as revenues less expenses direct and allocated to those segments. The Company does not allocate to its segments certain operating expenses, managed at the corporate level; that are not routinely used in the management of the segments; or information that is impractical to allocate. These unallocated costs include certain corporate costs and amortization of acquired intangible assets, restructuring charges, impairment charges, legal, indemnification and professional fees related to acquisition and divestiture expenses, along with other income (expenses). Segment operating profit reconciles to consolidated income (loss) before income taxes by deducting corporate costs and other income or expense items that are not attributed to the segments. Corporate charges not allocated to segments include headquarter-based costsno associated with procurement, human resources, compensation and benefits, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global IT, tax, treasury and legal. 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.liability was recorded.

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

The following tables present information regarding the Company’s segment performance and provide a reconciliation between segment operating profit and the consolidated income (loss) before income taxes:

Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 2020 2019
Net sales summary by segment
Eurasia Banking $ 337.7 $ 430.2 $ 648.2 $ 812.8
Americas Banking 331.4 419.9 676.1 782.6
Retail 221.4 300.1 476.9 582.9
Total revenue $ 890.5 $ 1,150.2 $ 1,801.2 $ 2,178.3
Intersegment revenue
Eurasia Banking $ 32.4 $ 46.8 $ 53.8 $ 102.0
Americas Banking 3.6 5.5 4.9 7.7
Total intersegment revenue $ 36.0 $ 52.3 $ 58.7 $ 109.7
Segment gross profit
Eurasia Banking $ 102.2 $ 120.7 $ 192.0 $ 230.0
Americas Banking 107.2 96.3 211.7 178.7
Retail 54.6 65.9 114.5 121.7
Total segment gross profit $ 264.0 $ 282.9 $ 518.2 $ 530.4
Segment selling and administrative expense
Eurasia Banking $ 49.9 $ 67.1 $ 97.8 $ 129.0
Americas Banking 38.8 50.5 80.6 100.8
Retail 34.4 39.3 72.7 77.1
Total segment selling and administrative expense $ 123.1 $ 156.9 $ 251.1 $ 306.9
Segment research, development and engineering expense
Eurasia Banking $ 12.2 $ 12.9 $ 24.2 $ 26.3
Americas Banking 10.4 13.0 21.5 26.4
Retail 7.1 10.4 15.0 20.3
Total segment research, development and engineering expense $ 29.7 $ 36.3 $ 60.7 $ 73.0
Segment operating profit
Eurasia Banking $ 40.1 $ 38.8 70.0 72.5
Americas Banking 58.0 32.5 109.6 51.0
Retail 13.1 15.6 26.8 23.7
Total segment operating profit 111.2 86.9 206.4 147.2
Corporate charges not allocated to segments ⁽¹⁾
(13.0) (12.9) (45.2) (46.1)
Restructuring and DN Now transformation expenses (26.8) (28.4) (68.4) (43.6)
Net non-routine expense (50.9) (38.3) (98.3) (74.7)
(90.7) (79.6) (211.9) (164.4)
Operating profit (loss) 20.5 7.3 (5.5) (17.2)
Other income (expense) (47.0) (53.2) (94.4) (99.8)
Loss before taxes $ (26.5) $ (45.9) $ (99.9) $ (117.0)

⁽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 IT, tax, treasury and legal.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the reportable operating segments. Net non-routine expense of $50.9 and $98.3 for the three and six months ended June 30, 2020, respectively, primarily consisted of purchase accounting pre-tax charges for amortization of acquired intangibles, legal, consulting and deal expense and charges related to certain onerous services contracts. Net non-routine expense of $38.3 and $74.7 for the three and six months ended June 30, 2019, respectively, was primarily due purchase accounting pre-tax charges for amortization of acquired intangibles, and legal, consulting and deal expense.

Note 17: 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 ~~presents information regarding~~represents the ~~Company’s segment net sales by service and product solution:~~

Three Months Ended Six Months Ended
June 30, 2020 June 30, 2020
2020 2019 2020 2019
Segments
Eurasia Banking
Services $ 192.6 $ 251.2 $ 398.6 $ 498.2
Products 145.1 179.0 249.6 314.6
Total Eurasia Banking 337.7 430.2 648.2 812.8
Americas Banking
Services 234.4 252.6 473.9 493.4
Products 97.0 167.3 202.2 289.2
Total Americas Banking 331.4 419.9 676.1 782.6
Retail
Services 132.7 155.5 275.0 296.4
Products 88.7 144.6 201.9 286.5
Total Retail 221.4 300.1 476.9 582.9
Total net sales $ 890.5 $ 1,150.2 $ 1,801.2 $ 2,178.3

~~In the following table, revenue is disaggregated by timing~~percentage of revenue ~~recognition~~recognized either at ~~June 30, 2020:~~a point in time or over time:


							Six Months Ended
							June 30,
Timing of revenue recognition	Timing of revenue recognition	2020		2019		Timing of revenue recognition	2021		2020
Products transferred at a point in time	Products transferred at a point in time	36	%	41	%	Products transferred at a point in time	39	%	36	%
Products and services transferred over time	Products and services transferred over time	64	%	59	%	Products and services transferred over time	61	%	64	%
Net sales	Net sales	100	%	100	%	Net sales	100	%	100	%

Contract balances

~~The following table provides 2020 information about receivables and deferred revenue, which represent contract liabilities from contracts with customers:~~

Contract balance information Trade Receivables Contract liabilities
Balance at December 31 $ 619.3 $ 320.5
Balance at June 30 $ 588.8 $ 300.6

Contract assets are minimal for the periods presented. The amount of revenue recognized during the six months ended June 30, 2020 and 2019 from performance obligations satisfied (or partially satisfied) in previous periods, mainly due to the changes in the estimate of variable consideration and contract modifications was de minimis. There have been $3.8 and $8.6 during the six months ended June 30, 2020 and 2019, respectively, of impairment losses recognized as bad debt related to receivables or contract assets arising from the Company's contracts with customers.

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

As of December 31, 2019, the Company had $320.5 of unrecognized deferred revenue constituting the remaining performance obligations that are unsatisfied (or partially unsatisfied). During the six months ended June 30, 2020, the Company recognized revenue of $203.1 related to the Company's deferred revenue balance at December 31, 2019.

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

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

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


Contract balance information	Trade receivables		Contract liabilities
Balance at December 31, 2020	$	646.9	$	346.8
Balance at June 30, 2021	$	638.6	$	299.3

There have been $8.6 and $3.8 during the six months ended June 30, 2021 and 2020, respectively, of impairment losses recognized as bad debt related to receivables or contract assets arising from the Company's contracts with customers.

As of December 31, 2020, the Company had $346.8 of unrecognized deferred revenue constituting the remaining performance obligations that are unsatisfied (or partially unsatisfied). During the six months ended June 30, 2021, the Company recognized revenue of $147.1 related to the Company's deferred revenue balance at December 31, 2020.

Transaction price allocated to the remaining performance obligations

As of June 30, ~~2020,~~2021, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately ~~$1,400.~~$1,200. 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.

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

Note ~~21: Supplemental Guarantor~~18: 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 presents the components of finance lease receivables:


	June 30, 2021		December 31, 2020
Gross minimum lease receivables	$	40.8	$	44.0
Allowance for credit losses	(0.2)		(0.2)
Estimated unguaranteed residual values	0.2		0.2
	40.8		44.0
Less:
Unearned interest income	(1.3)		(1.5)


Total	$	39.5	$	42.5

Future minimum payments due from customers under finance lease receivables as of June 30, 2021 are as follows:


2021	$	13.2
2022	7.5
2023	6.1
2024	5.6
2025	5.0
Thereafter	3.4
	$	40.8

There were no significant changes in provision for credit losses, recoveries and write-offs during the six months ended June 30, 2021 or 2020.

Note 19: Segment Information

~~Diebold Nixdorf, Incorporated issued~~The Company's accounting policies result in segments that are the ~~2024 Senior Notes in an offering exempt from~~same as those the ~~registration requirements of~~Chief Operating Decision Maker (CODM) regularly reviews and uses to make decisions, allocate resources and assess performance. The Company continually considers its operating structure and the ~~Securities Act of 1933 (the Securities Act).~~information subject to regular review by its Chief Executive Officer, who is the CODM, to identify reportable operating segments. The 2024 Senior Notes are and will be guaranteed by certain of Diebold Nixdorf, Incorporated's existing and future subsidiaries. The following presents the condensed consolidating financial information separately for:

~~(i)Diebold Nixdorf, Incorporated (the Parent Company), the issuer of the guaranteed obligations;~~

~~(ii)Domestic guarantor subsidiaries,~~Company’s operating structure is based on a ~~combined basis, as specified~~number of factors that management uses to evaluate, view and run its business operations, which currently includes, but is not limited to, product, service and solution. The restructuring charges disclosed in note 8 are not included in the ~~indenture governing the Company's obligations under the 2024 Senior Notes;~~

~~(iii)Non-guarantor subsidiaries, on a combined basis;~~

~~(iv)~~Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between the Parent Company, the guarantor subsidiaries, and the non-guarantor subsidiaries, (b) eliminate the investments in its subsidiaries, and (c) record consolidating entries; and

~~(v)Diebold Nixdorf, Incorporated and subsidiaries on a consolidated basis.~~

~~Each guarantor subsidiary is 100 percent owned by the Parent Company at the date~~calculation of each balance sheet presented. The 2024 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain conditions. Each entity in the consolidating financial information follows the same accounting policiessegment operating profit as described in the condensed consolidated financial statements, except for the use by the Parent Company and the guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Changes in intercompany receivables and payables related to operations, such as intercompany sales or service charges,disclosed herein. Those expenses are included in ~~cash flows~~the "Restructuring and DN Now transformation expenses" reconciling item between total segment operating profit and consolidated operating profit (loss). We have excluded the restructuring and transformation charges and net non-routine expenses from segment operating ~~activities. Intercompany transactions reported~~profit (loss) as ~~investing~~they are not included in the measure as used by the CODM to make decisions, allocate resources and assess performance. Segment operating profit (loss) as disclosed herein is consistent with the segment profit or ~~financing activities~~loss measure used by the CODM and does not include ~~the sale of capital stock of various subsidiaries, loans and other capital transactions between members of the consolidated group.~~

Certain non-guarantor subsidiaries of the Parent Company are limited in their ability to remit funds to it by means of dividends, advances or loans due to required foreign government and/or currency exchange board approvals or limitations in credit agreementsrestructuring charges or other ~~debt instruments of those subsidiaries.~~unusual or infrequently occurring items related to the transformation initiative, as the CODM does not regularly review and use such financial measures to make decisions, allocate resources and assess performance. The Company's reportable operating segments are based on the following solutions: Eurasia Banking, Americas Banking and Retail.

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DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

~~Condensed Consolidating Balance Sheet~~Segment revenue represents revenues from sales to external customers. Segment operating profit is defined as revenues less expenses direct and allocated to those segments. The Company does not allocate to its segments certain operating expenses, managed at the corporate level; that are not routinely used in the management of the segments, or information that is impractical to allocate. These unallocated costs include certain corporate costs and amortization of acquired intangible assets, restructuring charges, impairment charges, legal, indemnification and professional fees related to acquisition and divestiture expenses, along with other income (expenses). Segment operating profit reconciles to consolidated income (loss) before income taxes by deducting corporate costs and other income or expense items that are not attributed to the segments. 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 IT, tax, treasury and legal. 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.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net sales summary by segment
Eurasia Banking	$	326.0	$	337.7	$	653.8	$	648.2
Americas Banking	312.5		331.4		624.2		676.1
Retail	305.0		221.4		609.4		476.9
Total revenue	$	943.5	$	890.5	$	1,887.4	$	1,801.2

Intersegment revenue
Eurasia Banking	$	43.9	$	32.4	$	72.4	$	53.8
Americas Banking	1.7		3.6		3.9		4.9

Total intersegment revenue	$	45.6	$	36.0	$	76.3	$	58.7



















Segment operating profit
Eurasia Banking	$	26.2	$	37.1	$	51.2	$	59.9
Americas Banking	26.9		56.4		67.1		102.9
Retail	28.2		10.2		55.3		21.3


Total segment operating profit	81.3		103.7		173.6		184.1

Corporate charges not allocated to segments (1)	(18.2)		(5.5)		(31.5)		(22.9)

Restructuring and DN Now transformation expenses	(30.4)		(26.8)		(53.5)		(68.4)
Net non-routine expense	(19.8)		(50.9)		(39.5)		(98.3)
	(68.4)		(83.2)		(124.5)		(189.6)
Operating profit (loss)	12.9		20.5		49.1		(5.5)
Other income (expense)	(53.9)		(47.0)		(95.9)		(94.4)
Loss before taxes	$	(41.0)	$	(26.5)	$	(46.8)	$	(99.9)

(1) Corporate charges not allocated to segments include headquarter-based costs associated with human resources, compensation and benefits, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global IT, tax, treasury and legal.

Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the reportable operating segments as they are not included in the measure as used by the CODM to make decisions, allocate resources and assess performance. Net non-routine expense of $19.8 and $39.5 for the three and six months ended June 30, 2021, respectively, primarily consisted of purchase accounting pre-tax charges for amortization of acquired intangibles of $19.9 and $39.8, respectively. Net non-routine expense of $50.9 and $98.3 for the three and six months ended June 30, 2020,

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
ASSETS
Current assets
Cash, cash equivalents and restricted cash $ 194.5 $ — $ 251.9 $ — $ 446.4
Short-term investments — — 9.0 — 9.0
Trade receivables, net 122.4 0.1 466.3 — 588.8
Intercompany receivables 600.0 549.8 670.2 (1,820.0) —
Inventories 115.3 — 403.0 (4.9) 513.4
Prepaid, income taxes and other current assets 20.1 7.9 317.6 (7.8) 337.8
Total current assets 1,052.3 557.8 2,118.0 (1,832.7) 1,895.4
Securities and other investments 17.4 — — — 17.4
Property, plant and equipment, net 52.0 — 153.5 — 205.5
Goodwill 55.5 — 719.6 — 775.1
Deferred income taxes 71.8 6.4 57.1 — 135.3
Customer relationships, net — — 409.2 — 409.2
Investment in subsidiary 1,589.6 — — (1,589.6) —
Long-term intercompany receivables 615.9 — — (615.9) —
Other assets 52.0 3.4 227.8 — 283.2
Total assets $ 3,506.5 $ 567.6 $ 3,685.2 $ (4,038.2) $ 3,721.1
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable $ 93.2 $ — $ 8.9 $ — $ 102.1
Accounts payable 81.4 — 398.2 — 479.6
Intercompany payable 1,220.0 45.2 554.8 (1,820.0) —
Deferred revenue 107.5 — 193.1 — 300.6
Payroll and other benefits liabilities 44.6 — 116.4 — 161.0
Other current liabilities 96.7 0.9 394.8 (7.8) 484.6
Total current liabilities 1,643.4 46.1 1,666.2 (1,827.8) 1,527.9
Long-term debt 2,360.7 — 1.7 — 2,362.4
Long-term intercompany payable — — 615.9 (615.9) —
Other long-term liabilities 205.4 — 313.8 — 519.2
Redeemable noncontrolling interests — — 20.1 — 20.1
Total Diebold Nixdorf, Incorporated shareholders' equity (703.0) 521.5 1,073.0 (1,594.5) (703.0)
Noncontrolling interests — — (5.5) — (5.5)
Total liabilities, redeemable noncontrolling interests and equity $ 3,506.5 $ 567.6 $ 3,685.2 $ (4,038.2) $ 3,721.1
respectively, was primarily due to purchase accounting pre-tax charges for amortization of acquired intangibles, legal consulting and deal expense and a provisions for a loss making contract.

3628

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(in millions, except per share amounts)

~~Condensed Consolidating Balance Sheet~~

~~As of December 31, 2019~~The following table presents information regarding the Company’s segment net sales by service and product solution:

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
ASSETS
Current assets
Cash, cash equivalents and restricted cash $ 3.6 $ 1.8 $ 275.5 $ — $ 280.9
Short-term investments — — 10.0 — 10.0
Trade receivables, net 109.0 — 510.3 — 619.3
Intercompany receivables 632.6 559.3 747.6 (1,939.5) —
Inventories 122.4 — 346.4 (2.3) 466.5
Prepaid, income taxes and other current assets 42.1 7.8 473.2 (7.8) 515.3
Total current assets 909.7 568.9 2,363.0 (1,949.6) 1,892.0
Securities and other investments 21.4 — — — 21.4
Property, plant and equipment, net 61.9 0.5 169.1 — 231.5
Goodwill 55.5 — 708.5 — 764.0
Deferred income taxes 51.1 6.4 63.3 — 120.8
Customer relationships, net — — 447.7 — 447.7
Investment in subsidiary 1,676.8 — — (1,676.8) —
Long-term intercompany receivables 617.9 — — (617.9) —
Other assets 64.3 0.1 248.8 — 313.2
Total assets $ 3,458.6 $ 575.9 $ 4,000.4 $ (4,244.3) $ 3,790.6
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable $ 26.6 $ — $ 5.9 $ — $ 32.5
Accounts payable 55.3 — 416.2 — 471.5
Intercompany payable 1,302.3 46.7 590.5 (1,939.5) —
Deferred revenue 133.7 — 186.8 — 320.5
Payroll and other benefits liabilities 49.4 2.1 173.2 — 224.7
Other current liabilities 109.5 1.0 447.7 (7.8) 550.4
Total current liabilities 1,676.8 49.8 1,820.3 (1,947.3) 1,599.6
Long-term debt 2,107.4 — 1.3 — 2,108.7
Pensions, post-retirement and other benefits 160.3 — 77.4 — 237.7
Long-term intercompany payable — — 617.9 (617.9) —
Other long-term liabilities 42.7 — 287.3 — 330.0
Redeemable noncontrolling interests — — 20.9 — 20.9
Total Diebold Nixdorf, Incorporated shareholders' equity (528.6) 526.1 1,151.3 (1,679.1) (530.3)
Noncontrolling interests — — 24.0 — 24.0
Total liabilities, redeemable noncontrolling interests and equity $ 3,458.6 $ 575.9 $ 4,000.4 $ (4,244.3) $ 3,790.6


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Segments
Eurasia Banking
Services	$	191.8	$	192.6	$	381.4	$	398.6
Products	134.2		145.1		272.4		249.6
Total Eurasia Banking	326.0		337.7		653.8		648.2

Americas Banking
Services	232.2		234.4		459.9		473.9
Products	80.3		97.0		164.3		202.2
Total Americas Banking	312.5		331.4		624.2		676.1

Retail
Services	162.7		132.7		319.0		275.0
Products	142.3		88.7		290.4		201.9
Total Retail	305.0		221.4		609.4		476.9

Total net sales	$	943.5	$	890.5	$	1,887.4	$	1,801.2

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~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 June 30, 2020~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net sales $ 276.1 $ 0.1 $ 697.2 $ (82.9) $ 890.5
Cost of sales 190.9 0.1 527.8 (75.9) 642.9
Gross profit (loss) 85.2 — 169.4 (7.0) 247.6
Selling and administrative expense 86.8 0.1 94.7 — 181.6
Research, development and engineering expense 5.4 1.5 28.6 (4.8) 30.7
Loss on sale of assets, net 0.1 — 14.7 — 14.8
92.3 1.6 138.0 (4.8) 227.1
Operating (loss) income (7.1) (1.6) 31.4 (2.2) 20.5
Other income (expense)
Interest income — — 2.4 — 2.4
Interest expense (46.6) — (1.7) — (48.3)
Foreign exchange (loss) gain, net 0.7 — (8.3) — (7.6)
Miscellaneous, net 28.2 (0.2) (14.4) (7.1) 6.5
(Loss) income before taxes (24.8) (1.8) 9.4 (9.3) (26.5)
Income tax (benefit) expense (14.7) (2.4) 13.7 — (3.4)
Equity in earnings of subsidiaries (13.6) — — 13.6 —
Net (loss) income (23.7) 0.6 (4.3) 4.3 (23.1)
Net income attributable to noncontrolling interests — — 0.6 — 0.6
Net (loss) income attributable to Diebold Nixdorf, Incorporated $ (23.7) $ 0.6 $ (4.9) $ 4.3 $ (23.7)
Comprehensive (loss) income $ 21.4 $ 0.6 $ 26.9 $ (26.9) $ 22.0
Less: comprehensive income attributable to noncontrolling interests — — 0.6 — 0.6
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated $ 21.4 $ 0.6 $ 26.3 $ (26.9) $ 21.4

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~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 June 30, 2019~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net sales $ 301.6 $ (0.1) $ 949.0 $ (100.3) $ 1,150.2
Cost of sales 241.3 0.2 727.5 (98.0) 871.0
Gross profit (loss) 60.3 (0.3) 221.5 (2.3) 279.2
Selling and administrative expense 87.7 1.0 135.4 — 224.1
Research, development and engineering expense 1.5 8.3 31.1 (4.8) 36.1
Gain on sale of assets, net 0.6 — 11.1 — 11.7
89.8 9.3 177.6 (4.8) 271.9
Operating loss (29.5) (9.6) 43.9 2.5 7.3
Other income (expense)
Interest income 0.4 — 1.8 — 2.2
Interest expense (46.9) — (3.0) — (49.9)
Foreign exchange (loss) gain, net 2.0 (0.1) (7.0) — (5.1)
Miscellaneous, net 8.4 0.5 (9.6) 0.3 (0.4)
Loss before taxes (65.6) (9.2) 26.1 2.8 (45.9)
Income tax (benefit) expense 1.5 (1.5) 9.2 — 9.2
Equity in earnings of subsidiaries 16.8 — (0.2) (16.8) (0.2)
Net (loss) income (50.3) (7.7) 16.7 (14.0) (55.3)
Net (loss) income attributable to noncontrolling interests — — (5.0) — (5.0)
Net (loss) income attributable to Diebold Nixdorf, Incorporated $ (50.3) $ (7.7) $ 21.7 $ (14.0) $ (50.3)
Comprehensive (loss) income $ (31.7) $ (7.7) $ 14.2 $ (14.0) $ (39.2)
Less: comprehensive income (loss) attributable to noncontrolling interests — — (7.5) — (7.5)
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated $ (31.7) $ (7.7) $ 21.7 $ (14.0) $ (31.7)

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)~~

~~Six Months Ended June 30, 2020~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net sales $ 545.5 $ 0.1 $ 1,399.0 $ (143.4) $ 1,801.2
Cost of sales 379.3 0.1 1,076.8 (129.4) 1,326.8
Gross profit (loss) 166.2 — 322.2 (14.0) 474.4
Selling and administrative expense 198.3 0.3 205.1 — 403.7
Research, development and engineering expense 10.5 4.3 58.6 �� (10.2) 63.2
Loss on sale of assets, net 0.1 — 12.9 — 13.0
208.9 4.6 276.6 (10.2) 479.9
Operating (loss) income (42.7) (4.6) 45.6 (3.8) (5.5)
Other income (expense)
Interest income — — 3.5 — 3.5
Interest expense (92.2) — (4.1) — (96.3)
Foreign exchange (loss) gain, net (4.1) — (3.1) — (7.2)
Miscellaneous, net 49.9 — (37.8) (6.5) 5.6
(Loss) income before taxes (89.1) (4.6) 4.1 (10.3) (99.9)
Income tax (benefit) expense (10.3) (4.4) 31.3 — 16.6
Equity in earnings of subsidiaries (37.7) — — 37.7 —
Net (loss) income (116.5) (0.2) (27.2) 27.4 (116.5)
Net (loss) income attributable to noncontrolling interests — — — — —
Net (loss) income attributable to Diebold Nixdorf, Incorporated $ (116.5) $ (0.2) $ (27.2) $ 27.4 $ (116.5)
Comprehensive (loss) income $ (175.6) $ (0.2) $ (68.8) $ 67.7 $ (176.9)
Less: comprehensive income (loss) attributable to noncontrolling interests — — (1.3) — (1.3)
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated $ (175.6) $ (0.2) $ (67.5) $ 67.7 $ (175.6)

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)~~

~~Six Months Ended June 30, 2019~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net sales $ 597.1 $ — $ 1,800.3 $ (219.1) $ 2,178.3
Cost of sales 484.3 0.4 1,376.4 (208.1) 1,653.0
Gross profit (loss) 112.8 (0.4) 423.9 (11.0) 525.3
Selling and administrative expense 171.7 2.1 280.6 — 454.4
Research, development and engineering expense 2.7 17.1 62.6 (9.4) 73.0
Loss on sale of assets, net 0.6 — 14.5 — 15.1
175.0 19.2 357.7 (9.4) 542.5
Operating loss (62.2) (19.6) 66.2 (1.6) (17.2)
Other income (expense)
Interest income 1.3 — 3.8 — 5.1
Interest expense (94.4) — (6.4) — (100.8)
Foreign exchange (loss) gain, net 0.6 (0.1) (2.8) — (2.3)
Miscellaneous, net 21.0 0.8 (21.1) (2.5) (1.8)
Loss before taxes (133.7) (18.9) 39.7 (4.1) (117.0)
Income tax (benefit) expense 42.5 (7.9) 35.0 — 69.6
Equity in earnings of subsidiaries (6.8) (1.0) (0.6) 7.8 (0.6)
Net (loss) income (183.0) (12.0) 4.1 3.7 (187.2)
Net (loss) income attributable to noncontrolling interests — — (4.2) — (4.2)
Net (loss) income attributable to Diebold Nixdorf, Incorporated $ (183.0) $ (12.0) $ 8.3 $ 3.7 $ (183.0)
Comprehensive (loss) income $ (166.3) $ (12.0) $ (7.7) $ 15.7 $ (170.3)
Less: comprehensive income (loss) attributable to noncontrolling interests — — (4.0) — (4.0)
Comprehensive (loss) income attributable to Diebold Nixdorf, Incorporated $ (166.3) $ (12.0) $ (3.7) $ 15.7 $ (166.3)

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Condensed Consolidating Statement of Cash Flows~~

~~Six Months Ended June 30, 2020~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net cash provided (used) by operating activities $ (118.8) $ (10.1) $ (41.7) $ — $ (170.6)
Cash flow from investing activities
Capital expenditures (2.1) — (6.7) — (8.8)
Proceeds from divestitures, net of cash divested — — (47.9) — (47.9)
Proceeds from maturities of investments — — 104.1 — 104.1
Payments for purchases of investments — — (103.0) — (103.0)
Increase in certain other assets 9.9 — (8.7) — 1.2
Capital contributions and loans paid (12.1) — — 12.1 —
Proceeds from intercompany loans 9.4 — — (9.4) —
Net cash provided (used) by investing activities 5.1 — (62.2) 2.7 (54.4)
Cash flow from financing activities
Debt issuance costs (3.8) — — — (3.8)
Revolving credit facility borrowings 385.9 — — — 385.9
Other debt borrowings — — 20.0 — 20.0
Other debt repayments (72.8) — (17.7) — (90.5) ��
Other (4.7) — (0.8) — (5.5)
Capital contributions received and loans incurred — 12.1 — (12.1) —
Payments on intercompany loans — (3.8) (5.6) 9.4 —
Net cash provided (used) by financing activities 304.6 8.3 (4.1) (2.7) 306.1
Effect of exchange rate changes on cash and cash equivalents — — (10.8) — (10.8)
Increase (decrease) in cash, cash equivalents and restricted cash 190.9 (1.8) (118.8) — 70.3
Add: Cash included in assets held for sale at beginning of period — — 97.2 — 97.2
Less: Cash included in assets held for sale at end of period — — 2.0 — 2.0
Cash, cash equivalents and restricted cash at the beginning of the period 3.6 1.8 275.5 — 280.9
Cash, cash equivalents and restricted cash at the end of the period $ 194.5 $ — $ 251.9 $ — $ 446.4

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Condensed Consolidating Statement of Cash Flows~~

~~Six Months Ended June 30, 2019~~

Parent Domestic
Guarantor
Subsidiaries Non-
Guarantor
Subsidiaries Consolidating
Entries and
Eliminations Consolidated
Net cash used by operating activities $ 54.7 $ (21.0) $ (101.3) $ — $ (67.6)
Cash flow from investing activities
Capital expenditures (2.2) — (18.1) — (20.3)
Proceeds from maturities of investments 1.2 — 107.0 — 108.2
Payments for purchases of investments — — (85.8) — (85.8)
Proceeds from sale of assets 0.1 — 8.1 — 8.2
Increase in certain other assets (3.4) — (8.4) — (11.8)
Capital contributions and loans paid (27.4) — — 27.4 —
Proceeds from intercompany loans 9.9 — — (9.9) —
Net cash provided (used) by investing activities (21.8) — 2.8 17.5 (1.5)
Cash flow from financing activities
Revolving credit facility (repayments) borrowings, net (25.0) — 15.0 — (10.0)
Other debt borrowings — — 19.6 — 19.6
Other debt repayments (13.6) — (29.3) — (42.9)
Distributions and payments to noncontrolling interest holders — — (98.0) — (98.0)
Other (1.6) — — — (1.6)
Capital contributions received and loans incurred — 27.0 0.4 (27.4) —
Payments on intercompany loans — (6.8) (3.1) 9.9 —
Net cash provided (used) by financing activities (40.2) 20.2 (95.4) (17.5) (132.9)
Effect of exchange rate changes on cash and cash equivalents — — 0.2 — 0.2
Decrease in cash, cash equivalents and restricted cash (7.3) (0.8) (193.7) — (201.8)
Add: Cash included in assets held for sale at beginning of period — — 7.3 — 7.3
Less: Cash included in assets held for sale at end of period — — 4.1 — 4.1
Cash, cash equivalents and restricted cash at the beginning of the period 17.3 2.7 438.4 — 458.4
Cash, cash equivalents and restricted cash at the end of the period $ 10.0 $ 1.9 $ 247.9 $ — $ 259.8

~~Table of Contents~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~FORM 10-Q as of June 30, 2020~~

~~Notes to Condensed Consolidated Financial Statements (continued)~~

~~(unaudited)~~

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

~~Note 22: Subsequent Event~~

~~Issuance of Notes~~

On July 20, 2020, Diebold Nixdorf, Incorporated issued $700.0 aggregate principal amount of 9.375% Senior Secured Notes due 2025 (the U.S. Notes) and its wholly-owned subsidiary, Diebold Nixdorf Dutch Holding B.V. (the Euro Notes Issuer), issued €350.0 aggregate principal amount of 9.000% Senior Secured Notes due 2025 (the Euro Notes and, together with the U.S. Notes, the New Notes) in private offerings exempt from registration under the Securities Act. The U.S. Notes were issued at a price of 99.031% of their principal amount, and the Euro Notes were issued at a price of 99.511% of their principal amount.

The New Notes are or will be, as applicable, guaranteed on a senior secured basis by (i) all of Diebold Nixdorf, Incorporated’s existing and future direct and indirect U.S. subsidiaries that guarantee the obligations under the Credit Agreement and (ii) all of Diebold Nixdorf, Incorporated’s existing and future direct and indirect U.S. subsidiaries (other than securitization subsidiaries, immaterial subsidiaries and certain other subsidiaries) that guarantee any of the Euro Notes Issuer’s or Diebold Nixdorf, Incorporated’s or its subsidiary guarantors’ indebtedness for borrowed money (collectively, the U.S. Subsidiary Guarantors). Additionally, the U.S. Notes and the Euro Notes are guaranteed on a senior secured basis by the Euro Notes Issuer and Diebold Nixdorf, Incorporated, respectively. The New Notes are secured by first-priority liens on substantially all of the tangible and intangible assets of Diebold Nixdorf, Incorporated, the Euro Notes Issuer and the U.S. Subsidiary Guarantors, in each case subject to permitted liens and certain exceptions. The first-priority liens on the collateral securing the U.S. Notes and the related guarantees and the Euro Notes and the related guarantees are shared ratably among the Notes and the obligations under the Credit Agreement.

The net proceeds from the offerings of the New Notes, along with cash on hand, were used to repay a portion of the amounts outstanding under the Credit Agreement, including all amounts outstanding under the Term Loan A Facility and Term Loan A-1 Facility and $193.8 of revolving credit loans, including all of the revolving credit loans due in December 2020, and for the payment of all related fees and expenses.

~~Credit Agreement Amendment~~

On July 20, 2020, the Company entered into the ninth amendment to the Credit Agreement (the Ninth Amendment) with the subsidiary borrowers named therein, the guarantors party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and the other institutions named on the signature pages thereto. The Ninth Amendment amended the Credit Agreement to, among other things, extend the maturity of $330.0 of revolving credit commitments from April 30, 2022 to July 20, 2023 and amend the financial covenants in the Credit Agreement in connection with the extension of such maturities (and, effective as of the date of the Ninth Amendment, the Company terminated its other revolving credit commitments under the Revolving Facility other than approximately $39.0 of revolving credit commitments that still mature April 30, 2022).

4429

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

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 second quarter of ~~2020, Diebold Nixdorf:~~2021, the Company:

•Generated strong product order growth of 40 percent during the quarter versus the prior year, led by strong contributions from both banking and retail customers

•~~Continued to proactively manage the risks and impacts of the global COVID-19 pandemic, including:~~Expanded market share in Banking, led by DN Series ATMs

•◦~~Delivering outstanding service~~Expanded our global business partnership with Santander Group to ~~customers, even~~deliver customer innovation and operating efficiencies with more than 3,000 new ATMs, including DN Series, and maintenance services in ~~hard-hit areas around~~ the ~~world,~~U.S., Brazil, Mexico, Spain, Argentina and ~~received positive feedback from clients, including critical infrastructure providers such as supermarkets and financial institutions, in how effectively it has responded to the pandemic~~Chile

•◦~~Actively managing its pandemic crisis management plan,~~Displaced a competitor’s ATMs with ~~its team of service engineers adhering to strict hygiene protocols, using gloves and masks when and where appropriate and sanitizing equipment during servicing~~more than 500 cash recyclers for a client in Brazil

•◦~~Taking steps~~Booked sizable wins in Egypt — collectively valued at nearly $27 for DN Series, VynamicTM software licenses and maintenance services; one with National Bank of Egypt to ~~ensure that the Company’s global manufacturing and production facilities remain operational and continue to ship products in a timely manner~~support its expansion

•◦~~Maintained the execution pace of the~~Supplanted a competitor with orders for over 700 DN ~~Now transformation program and leveraged its operational rigor to further reduce costs, manage net working capital and reduce risks~~

•~~Made significant progress with next-generation DN Series™~~Series ATMs ~~including new orders with~~at a top 10 and a top 25 ~~financial institution~~bank in the United States. Also secured a new contract in Egypt for 350 DN Series ATMs plus remote monitoring and cash deposit software. Globally, DN Series certification projects nearly doubled since the beginning of the year to 475.U.S.

•Continued growth for Retail self-checkout (SCO) solutions

◦Signed a contract to ~~lead~~replace a competitor's SCO solutions at a multinational clothing and home products retailer located in the ~~Americas region in deposit automation technology with~~U.K.

◦Won an initial award at a ~~$13 million contract for cash recycling ATMs~~major European discount apparel and ~~related~~household product retailer to furnish more than 400 SCO devices and maintenance services at ~~one of the largest financial institutions~~locations in ~~Latin America.~~Spain and Austria

•~~Signed~~Secured additional, recurring revenue agreements for Managed Services and Software solutions

◦Secured a ~~three-year~~five-year Managed Services contract with a large European bank valued at $24

◦Secured an agreement with A.S. Watson, the world’s largest international health and beauty retailer, ~~with over 15,700~~to deliver new managed mobility software and services for more than 10,000 inventory devices in stores across ~~25 markets, to support its digital transformation strategy with point-of-sale~~Asia and ~~self-checkout systems – including managed services.~~Europe

•◦~~Secured~~Signed an agreement valued at nearly $4 with a ~~new $17 million contract~~large multinational retailer in Sweden to ~~deliver managed services, new point-of-sale~~automate checkout and ~~self-checkout solutions for one of~~reduce fraud at the ~~world’s largest home furnishing retailers.~~

•~~Extended a strategic relationship with Accenture to accelerate digital transformation~~SCO counter using artificial intelligence and ~~cloud migration activities.~~image recognition

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 report~~Quarterly Report on Form 10-Q.

Introduction

The Company is a world leader in enabling Connected Commerce™. The Company automates, 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 consumers every day. As an innovation partner for ~~nearly all~~a majority of the world's top 100 financial institutions and ~~a majority of the~~ top 25 global 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 22,000 employees worldwide.

Strategy

The Company seeks to continually enhance the consumer experience at bank and retail locations while simultaneously streamlining cost structures and business processes through the smart integration of hardware, software and services. The Company partners with other leading technology companies and regularly refines its research and development (R&D) spend to support a better transaction experience for consumers.

DN Now Transformation Activities

Commensurate with its strategy, the Company is executing its multi-year transformation program called DN Now to relentlessly focus on its customers while improving operational excellence. Large restructuring costs related to its transformation are concluding in 2021 and the Company expects to incur up to $50 of cash payments. Key activities include:

•Transitioning to a streamlined and customer-centric operating model

4530

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

•Implementing a services modernization plan which focuses on upgrading certain customer touchpoints, automating incident reporting and response, ~~and~~ standardizing service offerings and ~~internal processes~~connecting distributed IT assets to the AllConnect Data Engine

•Streamlining the ~~product range~~manufacturing footprint, reducing the number of ~~ATMs~~ATM models and ~~manufacturing footprint~~rolling out DN Series ATMs

•Improving working capital management through greater focus and efficiency of payables, receivables and inventory

•Reducing administrative expenses, including finance, ITinformation technology (IT) and real estate by leveraging digital and cloud-based solutions

•Increasing sales productivity through improved coverage and compensation arrangements

•Standardizing, digitizing and automating back-office finance, IT, human resources and sales support processes through a partnership with Accenture

•Optimizing the portfolio of businesses to improve overall profitability

By executing on these and other operational improvement activities, the Company expects to increase customer intimacy and satisfaction, while providing career enrichment opportunities for employees and enhancing value for shareholders. Collectively, these work streams are designed to generate gross annual savings of approximately $470 through 2021. During 2019, the Company achieved approximately $175 in annualized gross run rate savings. In order to achieve these savings, the Company has and will continue to restructure the workforce globally, integrate and optimize systems and processes, transition workloads to lower cost locations, renegotiate and consolidate supplier agreements and streamline real estate holdings. The cash payments from inception to date needed to achieve these savings was approximately $240 and was largely due to restructuring and the implementation of DN Now transformational programs.

COVID-19 ~~Response~~

The Company continues to ~~prioritize the health~~deliver high levels of service to customers and safety of its employees as a result of the global COVID-19 pandemic, adapting to the new global environment and continuing to serve customers as an essential service provider, all while taking steps to protect its operational foundation. The Company has taken multiple measures to protect its employees and it continues to evolve those measures based on input from various health authorities. The Company is equipping its service technicians with the appropriate protective gear and training them on evolving hygiene practices and social distancing rules. For employees in manufacturing facilities, the Company has segmented its workers and has implemented daily temperature checks. The Company is providing the proper tools, resources and guidance for its support functions to safely and productively work from home during the crisis, including establishing an employee crisis reserve fund which is available for employees who need support. The Company has also focused on the stability of its suppliers and supply chain, as borders have shut and logistics have become more challenging.

COVID-19 pandemic. The Company has been designated as providing “critical infrastructure” services by the majority of government entities around the world, including the United States Department of Homeland Security in order to promote public health and safety, as well as economic and national security during the COVID-19 ~~outbreak.~~pandemic. These designations recognize the vital role ~~Diebold Nixdorf~~the Company plays in allowing consumers to reliably and safely access financial services and essential retailers across more than 60 countries.

~~In taking measures to strengthen its operations during this period~~Although business conditions for us, our customers and suppliers improved, there is some measure of uncertainty surrounding the ~~Company~~COVID-19 pandemic. In 2021, we are continuing to see longer lead times for certain electronic components and longer logistics times due to delays in major ports. We have been taking and will continue to take steps to manage the impacts on our business. The possible resurgence of COVID-19 infection rates and government actions in response thereto could disrupt our operations and our supply chain and materially adversely affect our business. Because the situation continues to ~~execute its DN Now transformation program according~~evolve, we cannot reasonably estimate the ultimate impact to ~~plan,~~our business, results of operations, cash flows and ~~is accelerating certain elements of~~financial position that the ~~program. It has also added additional cost measures that are in the midst of execution —~~COVID-19 pandemic may have, and any such as reducing the annual bonus plan, deferring merit pay increases and implementing a hiring freeze. With so many employees working remotely, the Company is accelerating plans to consolidate its real estate footprint. In selected areas, the Company will participate in government relief programs that facilitate labor and payroll tax savings. Taken together, Diebold Nixdorf is targeting an incremental $80 - $100 of annualized savings. Furthermore, the Company continues to carefully manage net working capital with the same discipline and governance put in place during 2019. During the first quarter of 2020, the Company fully borrowed its revolving credit facility, consistent with the practices of many large companies. This action was done out of an abundance of caution to ensure the Company has adequate financial flexibility during what is expected toimpact could be ~~a more challenging near-term environment. The Company believes it has sufficient liquidity to fund its operations and DN Now transformation.~~material.

~~Segments~~CONNECTED COMMERCE SOLUTIONS™

The Company offers a broad portfolio of solutions designed to automate, digitize and transform the way people bank and shop. As a result, the Company’s operating structure is focused on its two customer segments — Banking and Retail. Leveraging a broad portfolio of solutions, the Company offers customers the flexibility to purchase the combination of services, software and products that drive the most value to their business.

Banking

The Company provides integrated solutions for financial institutions of all sizes designed to help drive operational efficiencies, differentiate the consumer experience, grow revenue and manage risk. Banking operations are managed within two geographic regions. The Eurasia Banking region includes the economies of Western Europe, Eastern Europe, Asia, the Middle East and Africa. The Americas Banking region encompasses the U.S., Canada, Mexico and Latin America.

Banking Services

The DN AllConnect Services℠ portfolio is designed for financial institutions of all sizes who are looking to outsource part or all of their ATM fleet operations, through a managed services or ATM as a Service model. The Company provides the intellectual knowledge, human capital and information technology needed to maintain and upgrade these distributed assets throughout their life cycle. DN AllConnect Services leverages scalable solutions based on globally standardized processes and tools, a single point of contact and reliable local expertise.

The portfolio of DN AllConnect Services℠ includes:

◦Installation: end-to-end ATM deployment, implementation and full branch design and deployment services

◦Availability: first and second line maintenance as well as help desk services

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(unaudited)

(dollars in millions, except per share amounts)

~~within two geographic regions. The Eurasia region includes the economies~~◦Managed Services: a range of ~~Western Europe, Eastern Europe, Asia, the Middle East~~a la carte or bundled Self-Service Fleet Management services including event management and ~~Africa. The Americas region encompasses the United States (U.S.), Canada, Mexico~~monitoring, integrated service desk, software deployment, cash management and ~~Latin America.~~

optimization, security and marketing.

~~For banking clients,~~◦Branch Management: a range of services ~~represents the largest operational component of the Company. Diebold Nixdorf AllConnect Services~~^® ~~was launched in 2018 to power the business operations of financial institutions of all sizes. This as-a-service offering provides financial institutions with the capabilities~~which transform and technology needed to make physical distribution channels as agile, integrated, efficient and differentiated as their digital counterparts by leveraging a data-driven Internet of Things (IoT) infrastructure.optimize bank branch operations.

The ~~Company’s product-related services resolve incidents through remote~~DN AllConnect Data Engine (ACDE) leverages Internet of Things (IoT) technology to enable a data-driven approach to services. ACDE extracts machine performance data, uploads it to the cloud and applies machine learning algorithms in order to shift the service ~~capabilities or an on-site visit. The portfolio includes first~~model to be proactive and ~~second line maintenance, preventive maintenance, “on-demand” and total implementation services.~~predictive. As the number of connected devices increases, the Company expects to deliver higher availability for self-service channels while reducing call rates, which leads to more cost-effective operations.

~~Managed services and outsourcing consists~~Banking Products

The banking portfolio of managing the end-to-end business processes, technology integration and day-to-day operation of the self-service channel and the bank branch. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.

~~From a product perspective, the banking portfolio~~products consists of cash recyclers and dispensers, intelligent deposit terminals, teller automation and kiosk ~~technologies, as well as physical security solutions. The Company assists~~technologies. As financial institutions seek to ~~increase~~expand the ~~functionality, availability~~self-service transaction set and ~~security within~~reduce operating costs by shrinking their ~~ATM fleet.~~

~~In 2019,~~physical branch footprint, the Company ~~introduced~~is introducing and selling DN Series, a family of self-service solutions designed to meet the needs of a progressively transforming industry. These holistic, digitally-connected solutions are built upon an integrated software and services model and provide a modern and personalized experience for consumers, while delivering maximum efficiency and reliability for financial institutions.Series™ ATMs.

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:

•◦~~Improved ATM~~Superior availability and performance through intelligent design and the use of ~~sensor technology and machine learning via~~ the ~~AllConnect Data Engine~~DN ACDE

•◦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 ~~with next-generation cash recycling technology~~

•◦Improved security ~~in a smaller footprint~~safeguards to protect customers against emerging physical, data and cyber threats

•◦~~Full integration with the DN Vynamic™ software suite~~A streamlined footprint which is up to 40 percent less than both legacy models and certain competing ATMs

•◦~~Technological capability that facilitates a streamlined, simplified product portfolio~~Improved security safeguards protecting against emerging physical, data and cyber threats.

•◦~~Modular and upgradeable design, enabling a simplified and streamlined internal~~Optimized ATM portfolio streamlining the supply chain and shortening lead times due to reduce platform complexity

◦Increased branding options for financial institutions

Banking Software

The Company’s DN Vynamic®Softwareis an open and flexible software portfolio that is aligned with how financial institutions operate. Different capabilities can be bundled to support and enhance a modern banking ecosystem including channels, operations, consumer experience and payments.

The Company’s software encompasses front-end applications for consumer connection points, digital solutions that enhance consumer-facing offerings, as well as back-end platforms which manage channel transactions, operations and channel integration. These hardware-agnostic software applications facilitate millions of transactions via ATMs, kiosks, and other self-service devices, as well as via online and mobile digital channels.

Self-service channel software includes multivendor terminal, security, availability and monitoring software, all of which facilitates millions of transactions via ATMs, kiosks, and other self-service devices. The ~~Company's DN Vynamic~~ software ~~is the first end-to-end Connected Commerce software portfolio in~~has evolved to utilize WebApp architecture and application program interfaces (APIs) to easily add advanced services such as connecting to the banking ~~marketplace designed to simplify~~core systems, enabling cash recycling and enhance the consumer experience. In addition, DN Vynamic suite's open application program interface (API) architecture is built to simplify operations by eliminating the traditional focus on internal silos and enabling tomorrow's inter-connected partnerships between financial institutions and payment providers. In addition, with a shared analytic andother transaction ~~engine, the DN Vynamic platform can generate new insights to enhance operations across any channel - putting customer preferences, not the technology, at the heart of the experience.~~capabilities.

~~An important enabler~~Complementary components of the ~~Company’s~~Vynamic Portfolio, including our most recent introduction Vynamic Payments, are built on a cloud native platform. These scalable, API-enabled offerings deliver enhanced features for customers such as cardless/touchless transactions, personalized marketing, and video-teller capabilities. Enhanced features are made available to customers through a Software as a Service consumption model and allow for new levels of bank efficiency. Unlike legacy software ~~offerings is the professional service employees who provide systems~~suites, Vynamic Payments’ microservices architecture, breaks down traditional software silos to enable business agility and create consumer experiences that seamlessly bridge any channel, any integration ~~customization, project management~~point, any payment type and ~~consulting. The Company's advisory services team collaborates~~any authentication method.

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Financial Condition and Results of Operations as of June 30, ~~2020~~2021

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(unaudited)

(dollars in millions, except per share amounts)

The Vynamic Software portfolio is offered as a unified release ensuring full software integration and interoperability with an enhanced focus on quality, stability, and resiliency. The DN Software and Services organizations deliver all components of an end-to-end solution within a single release. This enables customers to ~~refine the end-user experience, improve business processes, refine existing staffing models~~enhance their self-service fleet with new features and ~~deploy technology to automate both branches~~functionality faster and ~~stores.~~at a reduced cost.

Retail

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

The DN Vynamic software suite for retailers provides a comprehensive, modular and open solution ranging from the in-store check-out solution to solutions across multiple channels that improve end-to-end store processes and facilitate continuous consumer engagements in support of a digital ecosystem. This includes click & collect, reserve & collect, in-store ordering and return-to-store processes across the retailers' physical and digital sales channels. Operational data from a number of sources, such as enterprise resource planning (ERP), point of sale (POS), store systems and customer relationship management systems (CRM), may be integrated across all customer connection points to create seamless and differentiated consumer experiences.Retail Services

~~Diebold Nixdorf~~DN AllConnect Services® for retailers include maintenance and availability services to continuously optimize the performance and total cost of 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.

Retail Products

The retail ~~systems~~product portfolio includes modular and integrated, “all-in-one” ~~POS~~point of sale (POS) and self-service terminals that meet ~~evolving~~changing consumer shopping journeys, as well as retailers’ and store staff’s automation requirements. ~~The~~Anchored by the newly launched DN SERIES EASY line, the Company’s ~~self-checkout (SCO) systems~~SCO products and ordering kiosks facilitate a seamless and efficient transaction experience. The ~~BEETLE~~^®BEETLE®/iSCAN EASY eXpress™, hybrid products, can alternate from attended operation to SCO with the press of a button. The K-two Kiosk automates routine tasks and 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. 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.

Retail Software

DN Vynamic®Software for Retail is an open and flexible software portfolio built to align with how retailers operate. Different capabilities can be bundled to support the modern retail ecosystem across many retail verticals including grocery, fashion, convenience, fuel, food and specialty retail. Consumption models are flexible; being both cloud-enabled and/or on-premise solutions. The modular micro-services architecture allows Vynamic Software to easily scale up or down as needed. Vynamic software for Retail promotes standards and open API-based architectures giving retailers the ability to integrate third-party technologies to enable the best customer journey possible and to optimize efficiency and reduce costs across every part of the retail process, from consumer-facing transactions to store operations to enterprise management.

The software suite enables retailers to upgrade and orchestrate consumer and staff journeys across all channels and touchpoints by providing personalized, efficient and secure check-out solutions. The software supports a staffed POS checkout, handheld self-scanning devices or SCO terminals.

The self-service element of the software suite leverages advanced artificial intelligence algorithms and other advancements for automatic item recognition, automated age verifications for certain items and screen mirroring to offer touchless checkout processes as well as support for advanced loyalty programs. The Vynamic suite supports online and offline promotions in real time, dynamic consumer segmentation, and flexible digital or print couponing. Business operations are optimized with Vynamic Retail including automated merchandise collection, in-store ordering and return-in-store processes, stock management, pricing management, etc., via store management solutions.

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, 2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

Business Drivers

The business drivers of the Company's future performance include, but are not limited to:

•Demand for services on distributed IT assets such as ATMs, POS and SCO, including managed services and professional services

•Timing of ~~system~~product upgrades and/or replacement cycles for ATMs, POS and SCO

•Demand for advanced self-service capabilities supported by the Company’s software ~~products~~licenses, maintenance and professional services

•Demand for ~~security products~~innovative and ~~services for the financial, retail and commercial sectors~~

•~~Demand for innovative~~secure technology in connection with the Company's Connected Commerce strategy

•Integration of sales force, business processes, procurement, and internal IT systems

•Execution and risk management associated with DN Now transformational activities

•Realization of cost reductions, which leverage the Company's global scale, reduce overlap and improve operating efficiencies

•Global supply chain constraints have become more acute for Diebold Nixdorf and other technology companies. These constraints include significant delays in sourcing key components as well as longer transport times - especially for container ships and U.S. trucking. The overall impact of these supply chain constraints on us or on our business could adversely impact our operating results.

~~Table of Contents~~

~~Management's Discussion and Analysis of~~

~~Financial Condition and Results of Operations as of June 30, 2020~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

~~(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 COVID-19 pandemic adversely impacted revenue for the second quarter, but as a result of ongoing execution of our DN Now initiatives, as well as other mitigating actions, did not have a material adverse effect on the Company's reported results for the second quarter of 2020. The Company continues to actively monitor the impact of the COVID-19 pandemic, which impacts our banking and retail customers and consumers around the world, albeit in different ways depending on location and business profile. While we cannot predict the full extent of the impact, we currently expect that the COVID-19 pandemic will have relatively mild adverse impacts on revenues for our services and software business lines, but it will have a moderate negative impact on revenues for our products business line. The extent of the impact of the COVID-19 pandemic on our operations will depend largely on future developments, along with any new information that may emerge regarding the severity of the pandemic and the actions taken by government authorities to mitigate the spread of the virus, among other factors, all of which are highly uncertain and cannot be accurately predicted.

~~The~~ following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this ~~quarterly report~~Quarterly Report on Form 10-Q.

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, 2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

Net Sales

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


		Three Months Ended							Percent of Total Net Sales for the Three Months Ended						Three Months Ended				Percent of Total Net Sales for the Three Months Ended
		June 30,							June 30,						June 30,				June 30,
		2020		2019		% Change	% Change in CC ⁽¹⁾	2020	2019		2021		2020		% Change	% Change in CC (1)	2021	2020
Segments	Segments									Segments
Eurasia Banking	Eurasia Banking									Eurasia Banking
Services	Services	$	192.6	$	251.2	(23.3)	(20.9)	21.6	21.8	Services	$	191.8	$	192.6	(0.4)	(8.0)	20.3	21.6
Products	Products	145.1		179.0		(18.9)	(16.7)	16.3	15.6	Products	134.2		145.1		(7.5)	(12.6)	14.3	16.3
Total Eurasia Banking	Total Eurasia Banking	337.7		430.2		(21.5)	(19.2)	37.9	37.4	Total Eurasia Banking	326.0		337.7		(3.5)	(9.9)	34.6	37.9

Americas Banking	Americas Banking									Americas Banking
Services	Services	234.4		252.6		(7.2)	(4.8)	26.3	22.0	Services	232.2		234.4		(0.9)	(1.7)	24.6	26.3
Products	Products	97.0		167.3		(42.0)	(37.8)	10.9	14.5	Products	80.3		97.0		(17.2)	(18.1)	8.5	10.9
Total Americas Banking	Total Americas Banking	331.4		419.9		(21.1)	(17.6)	37.2	36.5	Total Americas Banking	312.5		331.4		(5.7)	(6.5)	33.1	37.2

Retail	Retail									Retail
Services	Services	132.7		155.5		(14.7)	(11.9)	14.9	13.5	Services	162.7		132.7		22.6	11.7	17.2	14.9
Products	Products	88.7		144.6		(38.7)	(37.0)	10.0	12.6	Products	142.3		88.7		60.4	50.3	15.1	10.0
Total Retail	Total Retail	221.4		300.1		(26.2)	(24.1)	24.9	26.1	Total Retail	305.0		221.4		37.8	26.9	32.3	24.9

Total net sales	Total net sales	$	890.5	$	1,150.2	(22.6)	(19.9)	100.0	100.0	Total net sales	$	943.5	$	890.5	6.0	0.7	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 June 30, ~~2020~~2021 compared with the three months ended June 30, ~~2019~~2020

Net sales ~~decreased $259.7,~~increased $53.0, or ~~22.6~~6.0 percent, including a net ~~unfavorable~~favorable currency impact of ~~$38.7~~$46.2 primarily related to the euro, ~~and Brazil real,~~ resulting in a constant currency ~~decrease~~increase of ~~$221.0. The following results include~~$6.8. After excluding the favorable currency impact and $16.0 of net sales generated during the three months ended June 30, 2020 from divested businesses, net sales decreased by $22.8.

Segments

•Eurasia Banking net sales decreased $11.7, including a net favorable currency impact of $24.3, related primarily to the euro, and divestitures of $11.6. Excluding the impact of ~~foreign currency:~~currency and divestitures, net sales decreased $24.4, which was driven by timing of installation activity and not associated with a decline in order volume.

•Americas Banking net sales decreased $18.9, including a net favorable currency impact of $2.9, related primarily to the Brazilian real, and divestitures of $2.9. Excluding the impact of currency and divestitures, net sales decreased $18.9 due to timing of installation activity in connection with longer lead times throughout the supply chain as well as non-recurring U.S. regional Windows 10 upgrades completed during the six months ended June 30, 2020.

•Retail net sales increased $83.6, including a net favorable currency impact of $19.0 mostly related to the euro, and offset by divestitures of $1.5. Excluding the impact of currency and divestitures, net sales increased $66.1 primarily from POS and SCO roll-outs in Europe with installations occurring during the three months ended June 30, 2021 as well as increased demand for professional services.

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Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

~~Segments~~


	Six Months Ended						Percent of Total Net Sales for the Six Months Ended
	June 30,						June 30,
	2021		2020		% Change	% Change in CC (1)	2021	2020
Segments
Eurasia Banking
Services	$	381.4	$	398.6	(4.3)	(11.0)	20.2	22.1
Products	272.4		249.6		9.1	2.9	14.4	13.9
Total Eurasia Banking	653.8		648.2		0.9	(5.7)	34.6	36.0

Americas Banking
Services	459.9		473.9		(3.0)	(2.6)	24.4	26.3
Products	164.3		202.2		(18.7)	(18.2)	8.7	11.2
Total Americas Banking	624.2		676.1		(7.7)	(7.3)	33.1	37.5

Retail
Services	319.0		275.0		16.0	6.4	16.9	15.3
Products	290.4		201.9		43.8	34.8	15.4	11.2
Total Retail	609.4		476.9		27.8	18.3	32.3	26.5

Total net sales	$	1,887.4	$	1,801.2	4.8	0.3	100.0	100.0

•Eurasia Banking net sales decreased $92.5, including a net unfavorable currency impact of $12.5, related primarily to the euro, and divestitures of $23.3. Excluding currency and the impact of divestitures, net sales decreased $56.7 driven by delays related to the COVID-19 pandemic, non-recurring prior year refresh projects and reducing low margin services business.

•Americas Banking net sales decreased $88.5, including a net unfavorable currency impact of $17.7, related primarily to the Brazil real. Excluding the impact of currency, net sales decreased $70.8 mostly from large non-recurring product refresh projects in Canada and U.S. National accounts as well as the Company's initiative to reduce lower margin services business. This decrease was partially offset by increased U.S. regional Windows 10 upgrades and software growth.

•Retail net sales decreased $78.7, including a net unfavorable currency impact of $8.5 mostly related to the euro. Excluding the impact of currency, net sales decreased $70.2 primarily from prior year non-recurring POS roll-outs in Europe. Additionally, overall revenue was unfavorably impacted by delays related to the COVID-19 pandemic.

Six Months Ended Percent of Total Net Sales for the Six Months Ended
June 30, June 30,
2020 2019 % Change
% Change in CC ⁽¹⁾
2020 2019
Segments
Eurasia Banking
Services $ 398.6 $ 498.2 (20.0) (17.8) 22.1 22.9
Products 249.6 314.6 (20.7) (18.4) 13.9 14.4
Total Eurasia Banking 648.2 812.8 (20.3) (18.0) 36.0 37.3
Americas Banking
Services 473.9 493.4 (4.0) (2.0) 26.3 22.7
Products 202.2 289.2 (30.1) (26.4) 11.2 13.2
Total Americas Banking 676.1 782.6 (13.6) (10.9) 37.5 35.9
Retail
Services 275.0 296.4 (7.2) (4.4) 15.3 13.6
Products 201.9 286.5 (29.5) (27.7) 11.2 13.2
Total Retail 476.9 582.9 (18.2) (15.9) 26.5 26.8
Total net sales $ 1,801.2 $ 2,178.3 (17.3) (14.9) 100.0 100.0

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

Six months ended June 30, ~~2020~~2021 compared with six months ended June 30, ~~2019~~2020

Net sales ~~decreased $377.1,~~increased $86.2, or ~~17.3~~4.8 percent, including a net ~~unfavorable~~favorable currency impact of ~~$62.1~~$80.4 primarily related to the euro, ~~and Brazil real,~~ resulting in a constant currency ~~decrease~~increase of ~~$315.0. The following results include~~$5.8. After excluding the favorable currency impact and $9.2 of ~~foreign currency:~~net sales generated during the six months ended June 30, 2021 from divested businesses, net sales decreased by $15.0.

Segments

•Eurasia Banking net sales ~~decreased $164.6,~~increased $5.6, including a net ~~unfavorable~~favorable currency impact of ~~$22.0,~~$45.2, related primarily to the euro, and divestitures of ~~$36.7.~~$ 8.1. Excluding ~~currency and~~ the impact of currency and divestitures, net sales decreased ~~$105.9~~ $31.5driven by ~~delays related to the COVID-19 pandemic, non-recurring prior year refresh projects~~timing of installation activity and ~~reducing low margin services business.~~not associated with a decline in order volume.

•Americas Banking net sales decreased ~~$106.5,~~$51.9, including a net unfavorable currency impact of ~~$24.1,~~$3.0, related primarily to the ~~Brazil real.~~Brazilian real, and divestitures of $0.5. Excluding the impact of currency and divestitures, net sales decreased ~~$82.4~~$48.4 due to timing of installation activity in connection with longer lead times throughout the supply chain as well as non-recurring U.S. regional Windows 10 upgrades completed during the six months ended June 30, 2020.

•Retail net sales increased $132.5, including a net favorable currency impact of $38.2 mostly related to the euro, and divestitures of $0.6. Excluding the impact of currency and divestitures, net sales increased $94.9 primarily from ~~large non-recurring product~~POS and SCO roll-outs in Europe with installations occurring during the six months ended June 30, 2021 as well as increased demand for professional services.

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Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

refresh projects in Canada and U.S. National accounts as well as the Company's initiative to reduce lower margin services business. This decrease was partially offset by increased U.S. regional Windows 10 upgrades and software growth.

•Retail net sales decreased $106.0, including a net unfavorable currency impact of $16.0 mostly related to the euro. Excluding the impact of currency, net sales decreased $90.0 primarily from prior year non-recurring POS roll-outs in Europe. Additionally, overall revenue was unfavorably impacted by delays related to the COVID-19 pandemic.

Gross Profit

The following table represents information regarding the Company's gross profit:


		Three Months Ended													Six Months Ended												Three Months Ended					Six Months Ended
		June 30,													June 30,												June 30,
		2020			2019			% Change	2020			2019			% Change		2021			2020			% Change	2021				2020			% Change
Gross profit - services	Gross profit - services	$	169.9		$	169.9		—	$	320.2		$	327.1		(2.1)	Gross profit - services	$	176.8		$	169.9		4.1	$	360.8			$	320.2		12.7
Gross profit - products	Gross profit - products	77.7			109.3			(28.9)	154.2			198.2			(22.2)	Gross profit - products	75.1			77.7			(3.3)	164.3				154.2			6.5
Total gross profit	Total gross profit	$	247.6		$	279.2		(11.3)	$	474.4		$	525.3		(9.7)	Total gross profit	$	251.9		$	247.6		1.7	$	525.1			$	474.4		10.7

Gross margin - services	Gross margin - services	30.4		%	25.8		%		27.9		%	25.4		%		Gross margin - services	30.1		%	30.4		%		31.1		%		27.9		%
Gross margin - products	Gross margin - products	23.5		%	22.3		%		23.6		%	22.3		%		Gross margin - products	21.0		%	23.5		%		22.6		%		23.6		%

Total gross margin	Total gross margin	27.8		%	24.3		%		26.3		%	24.1		%		Total gross margin	26.7		%	27.8		%		27.8		%		26.3		%

Services gross margin ~~increased 4.6~~decreased 0.3 percent and ~~2.5~~increased 3.2 percent in the three and six months ended June 30, ~~2020,~~2021, respectively, including ~~higher~~restructuring, transformation and other non-routine charges of ~~$11.4~~$8.2 and ~~$30.8, respectively, consisting~~$7.9 in the three and six months ended June 30, 2021, respectively. These charges consisted primarily of a second quarter accrual for a global restructuring initiative. Restructuring, transformation and other non-routine charges ~~related to certain onerous contracts, spare parts inventory provision,~~were $15.1 and incremental payments to essential service technicians for their contributions during the COVID-19 pandemic, partially offset by subsidies received for certain wages related to the COVID-19 pandemic. Restructuring charges decreased $1.0 and $1.7$35.5 in the three and six months ended June 30, 2020, ~~respectively.~~respectively, consisting primarily of a charge associated with a loss making contract and purchase accounting amortization. Excluding the impact of non-routine charges, services gross margin decreased slightly in the three months ended June 30, 2021, as compared to the same period in the prior year, primarily due to labor cost reductions and ~~restructuring expense,~~other interim cost benefits in the second quarter of 2020 in connection with the global pandemic. Excluding the impact of non-routine charges, services gross margin increased ~~6.6 percent and 5.1 percent~~ in the ~~three and~~ six months ended June 30, ~~2020, respectively,~~2021, due in part to sustainable savings brought about by the Company’s service modernization plan, ~~as well as exiting low margin maintenance contracts,~~divestitures of certain businesses, and lower professional services cost in the Americas Banking and Retail segments. ~~Additionally, interim cost benefits related to lower economic activity during the initial phases of the COVID-19 pandemic also contributed to the increased service gross margin.~~

Product gross margin ~~increased 1.2~~decreased 2.5 percent and ~~1.3~~1.0 percent in the three and six months ended June 30, 2021, respectively, including restructuring, transformation and other non-routine charges of $1.7 and $2.2, respectively. Restructuring, transformation and other non-routine charges were $1.3 and $8.3 in the three and six months ended June 30, 2020, respectively, ~~including higher non-routine charges~~consisting primarily of ~~$2.5~~purchase accounting amortization and ~~$9.6, respectively, primarily consisting of a $4.8 charge for certain benefits~~first quarter costs related to a previously divested business ~~and $3.4 inventory provision reversal~~ in Germany. Excluding the ~~prior year. Excluding~~impact of non-routine charges, products gross ~~profit increased 1.9 percent~~margin has declined in the three and ~~2.7 percent, respectively,~~six months ended June 30, 2021, due primarily to a ~~favorable~~unfavorable solution and geography mix, ina reversal of cost benefits from the ~~Americas~~prior year related to the pandemic, and ~~Eurasia Banking segments as well as lower Americas Banking and Retail amortization of certain capitalized software that was impaired in December 2019.~~higher logistics costs.

Operating Expenses

The following table represents information regarding the Company's operating expenses:


		Three Months Ended													Six Months Ended													Three Months Ended					Six Months Ended
		June 30,													June 30,													June 30,					June 30,
		2020			2019			% Change	2020			2019				% Change		2021			2020			% Change	2021				2020			% Change
Selling and administrative expense	Selling and administrative expense	$	181.6		$	224.1		(19.0)	$	403.7		$	454.4			(11.2)	Selling and administrative expense	$	204.8		$	181.6		12.8	$	408.2			$	403.7		1.1
Research, development and engineering expense	Research, development and engineering expense	30.7			36.1			(15.0)	63.2			73.0				(13.4)	Research, development and engineering expense	35.6			30.7			16.0	69.7				63.2			10.3

(Gain) loss on sale of assets, net	(Gain) loss on sale of assets, net	14.8			11.7			26.5	13.0			15.1				(13.9)	(Gain) loss on sale of assets, net	(1.4)			14.8			(109.5)	(1.9)				13.0			(114.6)
Total operating expenses	Total operating expenses	$	227.1		$	271.9		(16.5)	$	479.9		$	542.5			(11.5)	Total operating expenses	$	239.0		$	227.1		5.2	$	476.0			$	479.9		(0.8)
Percent of net sales	Percent of net sales	25.5		%	23.6		%		26.6		%	24.9		%			Percent of net sales	25.3		%	25.5		%		25.2		%		26.6		%

^{N/M = Not Meaningful}

5137

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

Selling and administrative expense ~~decreased $42.5 in the three months ended June 30, 2020, or $31.3 excluding a $4.6 favorable currency impact~~increased $23.2 and $6.5 lower non-routine and restructuring expenses, and decreased $50.7 in the six months ended June 30, 2020, or $51.0 excluding a $8.2 favorable currency impact and $8.6 incremental non-routine and restructuring expenses. Lower selling and administrative expense was due primarily to the Company's planned DN Now actions, including lower costs resulting from finance transformation, as well as lower expense related to the legacy Wincor Nixdorf stock option program and decreased stock and cash bonus compensation.

~~Non-routine cost in selling and administrative expense was $36.6 and $90.9~~$4.5 in the three and six months ended June 30, ~~2020, respectively, a decrease of $10.6 and $0.8, respectively,~~2021 compared to the ~~prior-year periods.~~corresponding periods in 2020. The ~~lower non-routine costs~~increase in both the three and six ~~months ended June 30, 2020 related primarily~~month periods is largely the result of the Company's incentive plan, which has been accrued throughout 2021, in comparison to ~~lower legal and deal expenses and lower amortization of purchase accounting adjustments. The six months ended June 30, 2020~~the prior year when the established accrual was ~~partially offset by increased DN Now transformation expense. Restructuring expense was $8.9 and $16.5~~reversed in the ~~three and six months ended June 30, 2020, respectively, an increase~~second quarter as a result of ~~$4.1 and $9.5, respectively, compared~~the expected implications of the pandemic. Also contributing to the ~~prior-year periods related to~~increase in selling and administrative expense are cost benefits in 2020 in connection with the ~~Company's DN Now actions.~~pandemic.

Research, development and engineering expense in the three and six months ended June 30, ~~2020 decreased $5.4~~2021 increased $4.9 and ~~$9.8, respectively, including a net favorable currency impact of $0.9 and $1.8,~~$6.5, respectively, primarily ~~related~~due to the euro and Brazil real. Excluding currency and higher restructuring expense of $1.2 and $2.6 for the three and six months ended June 30, 2020, respectively, research, development and engineering expense decreased primarily from lower bonus expense, lower product development cost and software cost management actions.

~~In the three months ended June 30, 2020, the Company recorded a loss on sale of assets of $14.8 primarily related to the divestitures of the~~ Company's operations in China and Denmark. The six months ended June 30, 2020 includes a gain on sale of assets of $1.8 related primarily to the sale of Portavis GmbH. In the three months ended June 30, 2019, the loss on sale of assets consists mainly of the loss on the finalization of divestitures in the retail and banking SecurCash businesses. The six months ended June 30, 2019 included the loss on sale of assets primarily related to the divestitures of the Venezuela business of $4.1 and Projective NV of $2.8.growth initiatives.

Operating expense as a ~~percent~~percentage of net sales in the three months ended June 30, ~~2020 increased 1.9~~2021 decreased 0.2 percent to ~~25.5~~25.3 percent compared to the same period in ~~2019 primarily from lower revenue.~~2020. Operating expense as a percent of net sales in the six months ended June 30, ~~2020 increased 1.7 percent to 26.6~~2021 decreased 1.4 percent compared to the same period in ~~2019.~~2020. The declines are as a result of non-recurring interim labor cost benefits in 2020, partially offset by higher sales volume and successful implementation of the Company's DN Now initiatives.

Operating Profit (Loss)

The following table represents information regarding the Company's operating profit (loss):


		Three Months Ended													Six Months Ended													Three Months Ended					Six Months Ended
		June 30,													June 30,													June 30,					June 30,
		2020			2019			% Change	2020			2019				% Change		2021			2020			% Change	2021				2020			% Change
Operating profit (loss)	Operating profit (loss)	$	20.5		$	7.3		N/M	$	(5.5)		$	(17.2)			68.0	Operating profit (loss)	$	12.9		$	20.5		(37.1)	$	49.1			$	(5.5)		992.7
Operating margin	Operating margin	2.3		%	0.6		%		(0.3)		%	(0.8)		%			Operating margin	1.4		%	2.3		%		2.6		%		(0.3)		%

The operating profit decreased by $7.6 and increased by $54.6 in the three and six months ended June 30, 2021, respectively, compared to the prior-year periods. The decline in the three months ended June 30, ~~2020 compared~~2021 is attributable to the ~~prior-year period and operating loss decreased~~non-recurrence of interim cost benefits from prior year as well as increased logistics costs. The increase in the six months ended June 30, ~~2020 compared to the prior-year period. The change~~2021 is primarily due to ~~DN Now initiatives which~~higher product sales volume in the Eurasia Banking and Retail segments, improved gross margin and ~~lowered selling~~lower DN Now restructuring accruals.

Other Income (Expense)

The following table represents information regarding the Company's other income (expense), net:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2021		2020		% Change		2021		2020		% Change
Interest income	$	2.3	$	2.4	(4.2)		$	4.0	$	3.5	14.3
Interest expense	(49.7)		(48.3)		(2.9)		(98.4)		(96.3)		(2.2)
Foreign exchange gain (loss), net	(9.2)		(7.6)		(21.1)		(3.5)		(7.2)		51.4
Miscellaneous, net	2.7		6.5		(58.5)		2.0		5.6		(64.3)
Other income (expense), net	$	(53.9)	$	(47.0)	(14.7)		$	(95.9)	$	(94.4)	(1.6)

Interest income and ~~administrative~~ expense ~~partially mitigating lower revenues,~~in the three and ~~decreased research, development and engineering expense.~~six months ended June 30, 2021 have remained largely consistent with the prior periods. Foreign exchange gain, net includes realized gains primarily related to the Brazilian real on non-designated foreign currency hedges.

5238

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

~~Other Income (Expense)~~

~~The following table represents information regarding the Company's other income (expense), net:~~

Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 % Change 2020 2019 % Change
Interest income $ 2.4 $ 2.2 9.1 $ 3.5 $ 5.1 (31.4)
Interest expense (48.3) (49.9) 3.2 (96.3) (100.8) 4.5
Foreign exchange gain, net (7.6) (5.1) (49.0) (7.2) (2.3) N/M
Miscellaneous, net 6.5 (0.4) N/M 5.6 (1.8) N/M
Other income (expense), net $ (47.0) $ (53.2) 11.7 $ (94.4) $ (99.8) 5.4

Interest income in the three and six months ended June 30, 2020, increased $0.2 and decreased $1.6, respectively, mostly from lower market returns on non-qualified plans, in addition to lower cash balances in Brazil. Interest expense decreased $1.6 and $4.5, respectively, from the pay down of debt and reduced interest rates. Miscellaneous, net includes proceeds of $7.2 for the close and surrender of one of its Company-owned life insurance (COLI) plans. During the second quarter of 2020, the Company created a plan to close and surrender several of its COLI plans.

Net Loss

The following table represents information regarding the Company's net loss:


		Three Months Ended													Six Months Ended													Three Months Ended					Six Months Ended
		June 30,													June 30,													June 30,					June 30,
		2020			2019			% Change	2020			2019				% Change		2021			2020			% Change	2021				2020			% Change

Net loss	Net loss	$	(23.1)		$	(55.3)		58.2	$	(116.5)		$	(187.2)			37.8	Net loss	$	(30.3)		$	(23.1)		(31.2)	$	(38.4)			$	(116.5)		67.0
Percent of net sales	Percent of net sales	(2.6)		%	(4.8)		%		(6.5)		%	(8.6)		%			Percent of net sales	(3.2)		%	(2.6)		%		(2.0)		%		(6.5)		%
Effective tax rate	Effective tax rate	12.8		%	(20.0)		%		(16.6)		%	(59.5)		%			Effective tax rate	27.0		%	12.8		%		20.7		%		(16.6)		%

~~The loss before taxes and~~Changes in net loss ~~decreased primarily~~are due to the reasons described ~~above. Net loss was also impacted by~~above, as well as the ~~change~~$26.6 decrease in income tax expense for the six months ended June 30, 2021 that is the result of one-time charges incurred in the first quarter of 2020 related to the global intangible low-taxed income ~~tax expense.~~(GILTI) provisions of the U.S. Tax Cuts and Jobs Act as well as the establishment of partial valuation allowance against interest expense carryforwards.

Segment Operating Profit Summary

The ~~effective tax rate on~~following tables represent information regarding the ~~loss was 12.8~~segment operating profit metrics, which exclude the impact of restructuring and non-routine charges, by reporting segment. Refer to note 18 of the condensed consolidated financial statements for further details of net sales and segment operating profit:


	Three Months Ended							Six Months Ended
	June 30,							June 30,
Eurasia Banking:	2021			2020			% Change		2021			2020			% Change
Net sales	$	326.0		$	337.7		(3.5)		$	653.8		$	648.2		0.9
Segment operating profit	$	26.2		$	37.1		(29.4)		$	51.2		$	59.9		(14.5)
Segment operating profit margin	8.0		%	11.0		%			7.8		%	9.2		%

Segment operating profit decreased $10.9 in the three months ended June 30, 2021, as compared to the prior-year period, largely due to the timing related sales decline, unfavorable customer and solution mix, as well as non-recurring interim cost benefit in the three months ended June 30, 2020. For the six months ended June 30, 2021, operating profit decreased $8.7, as compared to the prior-year period, related primarily to the nonrecurring interim labor cost benefits and unfavorable customer and solution mix. For these reasons, segment operating profit margin decreased 3.0 percent and ~~(16.6)~~1.4 percent for the three and six months ended June 30, ~~2020,~~2021, respectively. ~~The tax benefit for~~


	Three Months Ended							Six Months Ended
	June 30,							June 30,
Americas Banking:	2021			2020			% Change		2021			2020			% Change
Net sales	$	312.5		$	331.4		(5.7)		$	624.2		$	676.1		(7.7)
Segment operating profit	$	26.9		$	56.4		(52.3)		$	67.1		$	102.9		(34.8)
Segment operating profit margin	8.6		%	17.0		%			10.7		%	15.2		%

Segment operating profit decreased $29.5 and $35.8 in the three ~~months ended June 30, 2020 was attributable to current quarter pre-tax losses. The tax expense for the~~and six months ended June 30, ~~2020, is primarily attributable~~2021, respectively, due to ~~gain recognized for tax purposes on~~ the ~~surrender~~decrease in net sales, which was driven partially by timing of ~~COLI plans, partially offset by release~~installations, non-recurrence of ~~valuation allowance against U.S. foreign tax credits expected to be utilized against current year income tax. Also~~interim labor cost benefits, as ~~a result of~~well as increased logistical costs and longer lead times consistent with the ~~tax gain on the surrender of COLI policies, it is not expected that a valuation allowance will be required against carryforwards of disallowed interest.~~

~~The effective tax rate on the loss was (20.0)~~macroeconomic environment. For these reasons, segment operating profit margin decreased 8.4 percent and ~~(59.5)~~4.5 percent for the three and six months ended June 30, 2019. The tax expense on the loss is due primarily to the tax impacts of the Tax Act on the estimated projected tax rate, more specifically, the impacts of the GILTI and BEAT. The tax expense for the six months ended June 30, 2019, in addition, is impacted by the Barbados structure collapse which the Company executed during the first quarter and resulted in additional tax discrete expense which was offset in part by the valuation allowance release relating to the Company’s nondeductible interest expense which was carried forward from December 31, 2018. The above items noted as well as the Company’s jurisdictional income (loss) mix and varying respective statutory rates are the primary drivers of the quarterly tax rate.2021, respectively.

5339

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

~~Segment Net Sales and Operating Profit Summary~~


	Three Months Ended							Six Months Ended
	June 30,							June 30,
Retail:	2021			2020			% Change		2021			2020			% Change
Net sales	$	305.0		$	221.4		37.8		$	609.4		$	476.9		27.8
Segment operating profit	$	28.2		$	10.2		176.5		$	55.3		$	21.3		159.6
Segment operating profit margin	9.2		%	4.6		%			9.1		%	4.5		%

The following tables represent information regarding the segment operating profit metrics excluding the impact of restructuring and non-routine charges, by reporting segment. Refer to note 20 of the condensed consolidated financial statements for further details of net sales and segment operating profit:

Three Months Ended Six Months Ended
June 30, June 30,
Eurasia Banking: 2020 2019 % Change 2020 2019 % Change
Net sales $ 337.7 $ 430.2 (21.5) $ 648.2 $ 812.8 (20.3)
Segment gross profit $ 102.2 $ 120.7 (15.3) $ 192.0 $ 230.0 (16.5)
Segment selling and administrative expense 49.9 67.1 (25.6) 97.8 129.0 (24.2)
Segment research, development and engineering expense 12.2 12.9 (5.4) 24.2 26.3 (8.0)
Segment operating profit $ 40.1 $ 38.8 3.4 $ 70.0 $ 72.5 (3.4)
Segment operating profit margin 11.9 % 9.0 % 10.8 % 8.9 %

For the three months ended June 30, 2020, Eurasia Banking net sales decreased $92.5, including a net unfavorable currency impact of $12.5, related primarily to the euro, and divestitures of $23.3. Excluding currency and the impact of divestitures, net sales decreased $56.6 driven by delays related to the COVID-19 pandemic, non-recurring prior year refresh projects and reducing low margin services business.

For the six months ended June 30, 2020, Eurasia Banking net sales decreased $164.6, including a net unfavorable currency impact of $22.0, related primarily to the euro, and divestitures of $36.7. Excluding currency and the impact of divestitures, net sales decreased $105.9 driven by delays related to the COVID-19 pandemic, non-recurring prior year refresh projects and reducing low margin services business.

Segment operating profit increased ~~$1.3~~$18.0 and decreased $2.5 in the three and six months ended June 30, 2020, respectively, including a net unfavorable currency impact of $0.9 and $3.2, respectively. Excluding the impact of currency, operating profit increased ~~$2.2 and $0.7~~$34.0 for the three and six months ended June 30, ~~2020,~~2021, respectively, ~~due primarily~~as a result of an increase in net sales as well as gross margin improvements related to ~~lower operating expense resulting from the execution of DN Now initiatives~~increases in sales on higher margin POS and ~~lower bonus expense.~~SCO products and professional services.

Segment operating profit margin increased ~~2.9~~4.6 percent ~~and 1.9 percent~~ for each of the three and six months ended June 30, ~~2020, respectively, mostly from lower operating expense as noted above.~~

Three Months Ended Six Months Ended
June 30, June 30,
Americas Banking: 2020 2019 % Change 2020 2019 % Change
Net sales $ 331.4 $ 419.9 (21.1) $ 676.1 $ 782.6 (13.6)
Segment gross profit $ 107.2 $ 96.3 11.3 $ 211.7 $ 178.7 18.5
Segment selling and administrative expense 38.8 50.5 (23.2) 80.6 100.8 (20.0)
Segment research, development and engineering expense 10.4 13.0 (20.0) 21.5 26.4 (18.6)
Segment operating profit $ 58.0 $ 32.5 78.5 $ 109.6 $ 51.0 N/M
Segment operating profit margin 17.5 % 7.7 % 16.2 % 6.5 %

^{N/M = Not Meaningful}

~~For the three months ended June 30, 2020, Americas Banking net sales decreased $88.5, including a net unfavorable currency impact of $17.7,~~2021, due to gross margin improvements and cost savings related ~~primarily~~ to the Brazil real. Excluding the impact of currency, net sales decreased $70.9 mostly from large non-recurring product refresh projects in Canada and U.S. National accounts as well as reducing lower margin services business. This decrease was partially offset by increased U.S. regional Windows 10 upgrades and software growth.DN Now initiatives.

For the six months ended June 30, 2020, Americas Banking net sales decreased $106.5, including a net unfavorable currency impact of $24.1, related primarily to the Brazil real. Excluding the impact of currency, net sales decreased $82.4 mostly from

~~Table of Contents~~

~~Management's Discussion and Analysis of~~

~~Financial Condition and Results of Operations as of June 30, 2020~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

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

large non-recurring product refresh projects in Canada and U.S. National accounts as well as the Company's initiative to reduce lower margin services business. This decrease was partially offset by increased U.S. regional Windows 10 upgrades and software growth.

Segment operating profit increased $25.5 and $58.6 in the three and six months ended June 30, 2020, respectively, including a net unfavorable currency impact of $1.2 and $1.8, respectively. Higher operating profit was driven primarily by the Company's DN Now initiatives, which include Services Modernization and Software Excellence, as well as a favorable product mix in the U.S. Additionally, the DN Now work streams are driving lower operating expense versus the prior-year period.

Segment operating profit margin increased 9.8 percent and 9.7 percent for the three and six months ended June 30, 2020, respectively, primarily as a result of higher products and services gross margin, in addition to lower cost resulting from the execution of DN Now initiatives and lower bonus expense.

Three Months Ended Six Months Ended
June 30, June 30,
Retail: 2020 2019 % Change 2020 2019 % Change
Net sales $ 221.4 $ 300.1 (26.2) $ 476.9 $ 582.9 (18.2)
Segment gross profit 54.6 65.9 (17.1) $ 114.5 $ 121.7 (5.9)
Segment selling and administrative expense 34.4 39.3 (12.5) 72.7 77.1 (5.7)
Segment research, development and engineering expense 7.1 10.4 (31.7) 15.0 20.3 (26.1)
Segment operating profit $ 13.1 $ 15.6 (16.0) $ 26.8 $ 23.7 13.1
Segment operating profit margin 5.9 % 5.2 % 5.6 % 4.1 %

For the three months ended June 30, 2020, Retail net sales decreased $78.7, including a net unfavorable currency impact of $8.5 mostly related to the euro. Excluding the impact of currency, net sales decreased $70.2 primarily from prior year non-recurring POS roll-outs in Europe. Additionally, overall revenue was unfavorably impacted by delays related to the COVID-19 pandemic.

For the six months ended June 30, 2020, Retail net sales decreased $106.0, including a net unfavorable currency impact of $16.0 mostly related to the euro. Excluding the impact of currency, net sales decreased $90.0 primarily from prior year non-recurring POS roll-outs in Europe. Additionally, overall revenue was unfavorably impacted by delays related to the COVID-19 pandemic.

Segment operating profit decreased $2.5 and increased $3.1 for the three and six months ended June 30, 2020, respectively, including a nominal unfavorable currency impact, due primarily to higher gross margin mostly from the Company's DN Now initiatives which include Software Excellence and Services Modernization, as well as a favorable services solution and country mix in EMEA, and lower bonus and software cost.

Segment operating profit margin increased 1.5 percent for the six months ended June 30, 2020, primarily from higher gross margin on favorable mix and lower software amortization and operating expenses. Segment operating profit margin was flat for the three months ended June 30, 2020.

~~Table of Contents~~

~~Management's Discussion and Analysis of~~

~~Financial Condition and Results of Operations as of June 30, 2020~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

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

Liquidity and Capital Resources

The Company's total cash and cash availability as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was as follows:


		June 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
Cash and cash equivalents (excluding restricted cash)		$	442.8	$	277.3
Additional cash availability from
Cash included in assets held for sale		2.0		97.2
Cash and cash equivalents						Cash and cash equivalents	$	224.3	$	324.5
Additional cash availability from:						Additional cash availability from:

Uncommitted lines of credit	Uncommitted lines of credit	38.5		36.7		Uncommitted lines of credit	21.4		41.1
Revolving Facility	Revolving Facility	—		387.3		Revolving Facility	262.1		283.1
Short-term investments	Short-term investments	9.0		10.0		Short-term investments	8.1		37.2
Total cash and cash availability	Total cash and cash availability	$	492.3	$	808.5	Total cash and cash availability	$	515.9	$	685.9

Capital resources are obtained from income retained in the business, borrowings under the Company’s committed and uncommitted credit facilities and operating and capital leasing arrangements. Management expects that the Company’s capital resources will be sufficient to finance planned working capital needs, R&D activities, investments in facilities or equipment, pension contributions, and any repurchases of the Company’s common shares for at least the next 12 months. While the Company believes it has sufficient liquidity, it has increased its cash position out of an abundance of caution in light of the evolving COVID-19 pandemic and related macroeconomic implications. The Company is enhancing its financial flexibility as a critical provider of Connected Commerce solutions to financial institutions, supermarkets, pharmacies and fuel stations through its industry-leading ATMs, AllConnect Services, retail SCO and POS solutions. The additional borrowings under the Revolving Facility may be used for general corporate purposes. The Company cannot predict the duration or full extent of the COVID-19 pandemic, or its impact on our customers and suppliers. The Company is actively managing the business to maintain sufficient liquidity. The Company had ~~$3.6 of~~no restricted cash at June 30, ~~2020~~2021 and December 31, 2019. As of June 30, 2020, $262.4 or 57.6 percent of the Company's cash and cash equivalents and short-term investments reside in international tax jurisdictions. Repatriation of certain international funds could be negatively impacted by potential payments for foreign taxes. The Company has approximately $1,500 of earnings that are available for repatriation with no additional tax expense.2020. The Company has made acquisitions in the past and may make acquisitions in the future. Part of the Company’s strategy is to optimize the business portfolio through divestitures and complementary acquisitions. The Company intends to finance any future acquisitions with cash and short-term investments, cash provided from operations, borrowings under available credit facilities, proceeds from debt or equity offerings and/or the issuance of common shares.

As of June 30, 2021, the Company had a revolving facility provided by the Company's credit agreement (the Credit Agreement) of up to $343.1 (the Revolving Facility). The weighted-average interest rate on outstanding Revolving Facility borrowings as of both June 30, 2021 and December 31, 2020 was 4.75 percent, which is variable based on the London Interbank Offered Rate (LIBOR). There was $262.1 available under the Revolving Facility as of June 30, 2021, after excluding $25.8 in letters of credit.

The following table summarizes the results of the Company's condensed consolidated statement of cash flows for the six months ended June 30, 2021 and 2020:


							Six Months Ended
Summary of cash flows:	Summary of cash flows:	June 30, 2020		June 30, 2019		Summary of cash flows:	June 30, 2021		June 30, 2020
Net cash used by operating activities		$	(170.6)	$	(67.6)
Net cash used by investing activities		(54.4)		(1.5)
Net cash provided (used) by operating activities						Net cash provided (used) by operating activities	$	(143.7)	$	(167.9)
Net cash provided (used) by investing activities						Net cash provided (used) by investing activities	17.1		(57.1)
Net cash provided (used) by financing activities	Net cash provided (used) by financing activities	306.1		(132.9)		Net cash provided (used) by financing activities	29.5		306.1
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(10.8)		0.2		Effect of exchange rate changes on cash and cash equivalents	(0.6)		(10.8)
Change in cash, cash equivalents and restricted cash		$	70.3	$	(201.8)
Change in cash and cash equivalents						Change in cash and cash equivalents	$	(97.7)	$	70.3

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, 2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

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~~finance transformation and ~~integration~~restructuring activities, pension funding and other items impact reported cash flows. Net cash used by operating activities was ~~$170.6~~$143.7 for the six months ended June 30, ~~2020, an increase in~~2021, a change of $24.2 from cash use of ~~$103.0 from $67.6~~$167.9 for the ~~same period in~~six months ended June 30, ~~2019.~~2020.

•Cash flows from operating activities during the six months ended June 30, ~~2020~~2021 compared to the same period in ~~2019 were primarily impacted by~~2020 improved largely due to the ~~change~~$78.1 decrease in the net ~~aggregate of trade receivables, inventories, and accounts payable~~loss as well as ~~other combined certain assets and liabilities.~~successful management of payables in the first half of the current year. This ~~was~~activity is partially offset by ~~a $70.7 decrease~~management of longer lead time requirements in ~~net loss~~the supply chain that increased inventory levels as ~~a result of DN Now cost saving initiatives.~~well as an increase in deferred revenue. Refer to the Results of Operations discussed above for further discussion of the Company's reduction in net loss.

•The net aggregate of trade receivables, inventories and accounts payable used $27.9 and $36.1 in operating cash flows during the six months ended June 30, 2021 and 2020, respectively. Trade receivables cash use was $2.3 for the six months ended June 30, 2021 compared to cash provided of $7.4 for the same period in the prior year primarily due to timing of installations. For the six months ended June 30, 2021, inventory cash use increased $31.0 compared to the same period in the prior year primarily due to increased purchases in 2021 both to meet increased customer demand and manage longer lead time requirements on raw materials. Accounts payable provided $70.4 for the six months ended June 30, 2021 compared to a cash source of $21.5 for the same period in the prior year for a favorable cash source difference of $48.9 primarily related tighter controls on accounts payable.

•In the aggregate, the other combined certain assets and liabilities used $32.6 for the six months ended June 30, 2021 compared to $37.1 during the same period in 2020. The change is largely driven by an increase in capitalized cloud implementation costs during the six months ended June 30, 2021.

Depreciation and amortization expense, excluding the Wincor Nixdorf purchase price accounting adjustments, decreased $16.5 to $38.5 during the six months ended June 30, 2021 compared to $52.3 during the same period in 2020, primarily due to a reduction in depreciation expense related to the first quarter 2021 useful life expiration of a legacy enterprise resource planning system along with a reduction in capital spend.

Investing Activities

Cash flows from investing activities during the six months ended June 30, 2021 compared to the same period in 2020 were primarily impacted by a non-recurring net use of $53.7 of cash in the first quarter of 2020 that was included in the sale of Portavis Gmbh, a non-core consulting business in the Eurasia Banking segment. Additionally, the maturities and purchases of investments primarily relate to short-term investment activity in Brazil that resulted in an $25.9 increase in net cash proceeds due to an increase in investment activity.

Financing Activities

Net cash used by financing activities was $29.5 for the six months ended June 30, 2021 compared to $306.1 of proceeds for the same period in 2020, which resulted in a decrease of $276.6. The change was primarily a result of the Company drawing down its entire availability under the Revolving Facility provided by the Credit Agreement in the first quarter of 2020 in response to the uncertainty of the circumstances surrounding the COVID-19 pandemic, which was materially paid down in 2020. In 2021, the Company has continued routine cyclical borrowing on the Revolving Facility in line with the ordinary course of business operations.

During the first quarter of 2021, the Company entered into an agreement whereby its ownership percentage in a certain consolidated but non-wholly owned subsidiary in Europe was reduced by means of capital contributions from noncontrolling shareholders totaling $12.7, which is considered cash proceeds from financing activities in the Contributions from noncontrolling interest holders caption.

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

•The net aggregate of trade receivables, inventories and accounts payable used $36.1 and provided $23.3 in operating cash flows during the six months ended June 30, 2020 and 2019, respectively. Trade receivables cash provided $7.4 for the six months ended June 30, 2020 compared to $23.1 for the same period in the prior-year primarily due to improvement in collections in 2019 as a result of the Company's working capital improvement initiatives and normal operational spending during the first quarter of 2020. For the six months ended June 30, 2020, inventory cash use increased $63.8 compared to the same period in the prior year primarily due to increased purchases for normal operations in 2020 as well as efforts in 2019 to improve inventory management as a result of streamlining the product portfolio and implementing better governance. Accounts payable provided $21.5 for the six months ended June 30, 2020 compared to $1.4 for the same period in the prior year primarily related to DN Now initiatives.

•In the aggregate, the other combined certain assets and liabilities used $82.1 for the three months ended June 30, 2020 compared to $35.9 during the same period in 2019. The change was primarily due to increased cash bonuses paid, along with cash usage by assets held for sale in the first quarter of 2020 and decreased non-cash deferred income taxes due to the results of operations.

Depreciation and amortization expense decreased $9.3 to $106.5 during the six months ended June 30, 2020 compared to $115.8 during the same period in June 30, 2019, primarily due to reduction in amortization related to acquired intangibles and capitalized software, along with a reduction in capital spend. Changes in deferred income taxes during the six months ended June 30, 2020 compared to the same period in 2019 resulted in increased usage of $42.4, primarily related to the tax effects of the 2019 Barbados structure collapse partially offset by a reduction in the deferred liabilities released on certain acquired intangible assets. Share-based compensation decreased $6.5 to $7.6 for the six months ended June 30, 2020 compared to the same period in June 30, 2019, primarily due to a reduction in shares awarded. The loss (gain) on sale of assets, net were primarily a result of the Portavis GmbH divestiture during the first quarter of 2020 as well as the divestiture of a portion of the Company's operations in China during the second quarter of 2020 and the divestiture of non-core businesses during the first and second quarters of 2019.

~~Investing Activities~~

Cash flows from investing activities during the six months ended June 30, 2020 compared to the same period in 2019 were primarily impacted by a $56.1 decrease in proceeds from divestitures, net of cash divested as a result of the Portavis GmbH divestiture during the first quarter of 2020, the divestiture of a portion of the Company's operations in China during the second quarter of 2020 and the Projective NV divestiture during the first quarter of 2019. Additionally, the maturities and purchases of investments primarily relate to short-term investment activity in Brazil resulted in an $21.3 decrease in cash proceeds. The Company also reduced its capital expenditures and investments in certain other assets primarily related to software to be sold when compared to the same period in the prior year.

~~Financing Activities~~

Net cash provided by financing activities was $306.1 for the six months ended June 30, 2020 compared to the $132.9 usage for the same period in 2019, which resulted in an increase of $439.0. The change was primarily a result of the Company drawing down its entire availability under the Revolving Facility in response to the uncertainty of the circumstances surrounding the COVID-19 pandemic. The Company also had $11.8 net borrowings from uncommitted lines of credit in connection with international projects. During the six months ended June 30, 2020, the Company paid $71.9 towards its term loans primarily due to certain mandatory repayment provisions pursuant to the Credit Agreement compared to the $12.9 during the same period in the prior year. During the first quarter of 2019, the Company paid $98.0 for the redemption of shares and cash compensation to Diebold Nixdorf AG minority shareholders.

Refer to note 119 of the condensed consolidated financial statements for additional information regarding the Company's debt obligations. The Company paid cash for interest related to its debt ofof $27.1 and $51.0 ~~and $53.5 for~~for the three months ended June 30, ~~2020~~2021 and June 30, ~~2019,~~2020, respectively, and ~~$85.0~~$87.0 and ~~$93.0~~$85.0 for the six months ended June 30, ~~2020~~2021 and June 30, ~~2019,~~2020, respectively. As defined by the ~~Company's credit agreement,~~Credit Agreement, the ratio of net debt to trailing 12 months adjusted EBITDA was ~~4.3~~4.9 times as of June 30, ~~2020.~~2021. As of June 30, ~~2020,~~2021, the Company was in compliance with the financial and other covenants in its debt agreements.

Refer to note 1714 of the condensed consolidated financial statements for additional information regarding the Company's hedging and derivative instruments.

~~Table of Contents~~

~~Management's Discussion and Analysis of~~

~~Financial Condition and Results of Operations as of June 30, 2020~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

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

On July 20, 2020, the Company issued approximately $1,100.0 aggregate principal amount of senior secured notes consisting of $700 aggregate principal amount of Diebold Nixdorf, Incorporated’s 9.375% Senior Secured Notes due 2025 and €350.0 aggregate principal amount of 9.000% Senior Secured Notes due 2025 issued by its wholly-owned subsidiary, Diebold Nixdorf, Dutch Holding B.V. in private offerings exempt from registration under the Securities Act of 1933. The net proceeds from the offerings, along with cash on hand, was used to repay a portion of the amounts outstanding under the Credit Agreement, including all amounts outstanding under the Term Loan A Facility and Term Loan A-1 Facility and $193.8 of revolving credit loans, including all of the revolving credit loans due in December 2020, as well as all related fees and expenses. On July 20, 2020, the Company also amended the Credit Agreement to, among other things, extend the maturity of $330.0 of its revolving credit commitments and revolving credit loans from April 30, 2022 to July 20, 2023 (and, effective as of July 20, 2020, the Company terminated its other revolving credit commitments under the Revolving Facility other than approximately $39.0 of revolving credit commitments that still mature April 30, 2022). The Company’s current capital structure includes no significant maturities until 2023.

~~Refer to note 22 for additional information regarding the July 2020 refinancing transactions.~~

Contractual Obligations ~~During 2020, the~~The Company ~~entered~~enters into certain purchase commitments due within one year for materials through contract manufacturing agreements for a total negotiated price. At June 30, ~~2020,~~2021, the Company had minimal purchase commitments due within one year for materials through contract manufacturing agreements at negotiated prices.

~~During the first quarter of 2020, the Company drew down its entire availability under the Revolving Facility and as a result, $68.8 included in notes payable mature on December 23, 2020.~~

Except for the items noted above, all contractual cash obligations with initial and remaining terms in excess of one year and contingent liabilities remained generally unchanged at June 30, ~~2020~~2021 compared to December 31, ~~2019.~~2020.

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, ~~customers,~~ regulatory agencies and insurance providers may draw on the pertinent bank. ~~Refer to note 9 for further details of guarantees.~~ The Company has sold finance receivables to financial institutions 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).

Supplemental Guarantor Financial Information Diebold Nixdorf, Incorporated initially issued 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. The 2024 Senior Notes are and 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, 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 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
	June 30, 2021		December 31, 2020
Total current assets	$	457.7	$	449.9
Total non-current assets	$	2,558.6	$	1,504.6

Total current liabilities	$	1,323.8	$	1,252.5
Total non-current liabilities	$	2,072.3	$	2,084.3

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, 2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)


	Summarized Statements of Operations
	Six Months Ended		Year Ended
	June 30, 2021		December 31, 2020
Net sales	$	509.0	$	1,097.4
Cost of sales	367.3		784.3
Selling and administrative expense	201.9		446.4
Research, development and engineering expense	21.3		38.1
Impairment of assets	—		2.5
Gain on sale of assets, net	(0.3)		(0.5)
Interest income	0.7		1.1
Interest expense	(68.1)		(267.8)
Foreign exchange gain (loss), net	2.9		(9.5)
Miscellaneous, net	37.7		156.9
Loss from continuing operations before taxes	$	(108.0)	$	(292.7)

Net (loss) income	$	(38.4)	$	(269.1)
Net (loss) income attributable to Diebold Nixdorf, Incorporated	$	(38.4)	$	(269.1)

As of June 30, 2021 and December 31, 2020, the Parent Company and the guarantor subsidiaries on a combined basis had the following balances with non-guarantor subsidiaries:


	Summarized Balance Sheets
	June 30, 2021		December 31, 2020
Total current assets	$	183.0	$	211.5
Total non-current assets	$	653.6	$	867.5

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 ~~these~~the 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 lease~~and 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.

~~The COVID-19 pandemic adversely impacted revenue~~There have been no material changes to the critical accounting policies and estimates described in the Company’s Annual Report on Form 10-K for the second quarter, but as a result of ongoing execution of our DN Now initiatives, as well as other mitigating actions, did not have a material adverse effect on the Company's reported results for the second quarter ofyear ended December 31, 2020. ~~The Company continues to actively monitor the impact of the COVID-19 pandemic, which impacts~~

5843

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, ~~2020~~2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

our banking and retail customers and consumers around the world, albeit in different ways depending on location and business profile. While we cannot predict the full extent of the impact, we currently expect that the COVID-19 pandemic will have relatively mild adverse impacts on revenues for our services and software business lines, but it will have a moderate negative impact on revenues for our products business line. The extent of the impact of the COVID-19 pandemic on our operations will depend largely on future developments, along with any new information that may emerge regarding the severity of the pandemic and the actions taken by government authorities to mitigate the spread of the virus, among other factors, all of which are highly uncertain and cannot be accurately predicted.

Management believes there have been no other significant changes during the six months ended June 30, 2020 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 Operations in the Company’s annual report on Form 10-K for the year ended December 31, 2019.

Forward-Looking Statement Disclosure

In this ~~quarterly report~~Quarterly Report on Form 10-Q, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of ~~1995.~~1995, including statements regarding the potential impact of the ongoing coronavirus (COVID-19) pandemic, anticipated revenue, future liquidity and financial position. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements include, but are not limited to, statements regarding the Company's expected future performance (including expected results of operations and financial guidance) future financial condition, operating results, strategy and plans.

~~The~~ Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “will,” “believes,” ~~“anticipates,~~“estimates,” ~~“expects,~~“potential,” ~~“intends”~~“target,” “predict,” “project,” “seek,” and variations thereof or similar ~~expressions is intended~~expressions. These statements are used to identify forward-looking statements. These forward-looking statements ~~that have been made and may in~~reflect the ~~future be made by or on behalf~~current views of the ~~Company.~~ Company with respect to future events and involve significant risks and uncertainties that could cause actual results to differ materially.

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

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

• the duration and overall impact on the Company and its business of the global supply chain complexities that the company is currently facing, 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 components;

•the ultimate impact of the ongoing COVID-19 ~~pandemic;~~

•pandemic, including further adverse effects to the ~~outcome~~Company's supply chain, maintenance of ~~the appraisal proceedings initiated in connection with the implementation of the DPLTA with the former Diebold Nixdorf AG~~increased order backlog, and the ~~merger/squeeze-out;~~effects of any COVID-19 related cancellations;

•the Company's ability to continue to achieve benefits from its cost-reduction initiatives and other strategic initiatives such as DN Now ~~including~~and its ~~planned restructuring actions, as well as its business process outsourcing initiative;~~digitally enabled hardware, services and software strategy;

•the success of the Company’s new products, including its DN Series ~~line;~~line and EASY family of retail checkout solutions;

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

• the Company's ability to generate sufficient cash to service its debt or to comply with the covenants contained in the agreements governing its debt;

•~~the ultimate outcome of the Company’s pricing, operating and tax strategies applied to former Diebold Nixdorf AG and the ultimate ability to realize cost reductions and synergies;~~

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

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

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

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

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

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

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

~~Table of Contents~~

~~Management's Discussion and Analysis of~~

~~Financial Condition and Results of Operations as of June 30, 2020~~

~~DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES~~

~~(unaudited)~~

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

•~~the effect of legislative and regulatory actions in the U.S. and internationally and~~ the Company’s ability to ~~comply with government regulations;~~attract, retain and motivate key employees;

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

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

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

•~~the Company's ability to maintain effective internal controls;~~

•changes in the Company's 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 outcome of the appraisal proceedings initiated in connection with the implementation of the Domination and Profit Loss Transfer Agreement with the former Diebold Nixdorf AG and the merger/squeeze-out;

• the impact of market and economic conditions, including the proliferation of cash and any deterioration or disruption in the financial and service markets, including the bankruptcies, restructurings or consolidations of financial 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; 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, taxes and regulations and laws affecting the worldwide business in each of the Company's operations;

• 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;

Table of Contents

Management's Discussion and Analysis of

Financial Condition and Results of Operations as of June 30, 2021

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in millions, except per share amounts)

•the ~~investment performance~~effect of ~~the Company's pension plan assets, which could require the Company to increase its pension contributions, and significant~~ changes in ~~healthcare costs, including those that may result from~~law and regulations or the manner of enforcement in the U.S. and internationally and the Company’s ability to comply with government ~~action;~~regulations; and

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

~~Except~~You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to ~~the extent required by applicable law or regulation, the~~place undue reliance on such statements. The Company ~~undertakes~~assumes no obligation to update ~~these~~any forward-looking statements, which speak only to ~~reflect future events or circumstances or to reflect~~ the ~~occurrence~~date of ~~unanticipated events.~~this document.

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Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

(in millions, except share and per share amounts)

Item 3: Quantitative and Qualitative Disclosures About Market Risk

Refer to the Company’s ~~annual report~~Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for a discussion of market risk exposures. As discussed elsewhere in this ~~report,~~Quarterly Report on Form 10-Q, the COVID-19 pandemic ~~will~~has negatively ~~impact~~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, ~~2019.~~2020.

Item 4: Controls and Procedures

This ~~quarterly report~~Quarterly Report on Form 10-Q includes the certifications of the Company's Chief Executive Officer (CEO) and Chief 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 Securities 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 report~~Quarterly 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 June 30, ~~2020.~~2021.

Change in Internal Controls

During the second quarter ended June 30, ~~2020,~~2021, 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.

6146

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

(in millions, except share and per share amounts)

Part II – Other Information

Item 1: Legal Proceedings

At June 30, ~~2020,~~2021, 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 report~~Annual Report on Form 10-K for the year ended December 31, ~~2019. There~~2020 and to "Legal Contingencies" in note 16 of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Other than as described in "Legal Contingencies" in note 16 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 report~~Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Item 1A: Risk Factors

Refer to the Company’s ~~annual report~~Annual Report on Form 10-K for the year ended December 31, ~~2019 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,~~ 2020. There has been no ~~other~~ material change to this information since December 31, ~~2019.~~2020.

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

Information concerning the Company’s share repurchases made during the second quarter ofended June 30, ~~2020:~~2021:


Period	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)	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)
April	April	13,572	$	5.10	—	2,426,177	April	6,035	$	13.45	—	2,426,177
May	May	9,286	$	5.87	—	2,426,177	May	9,447	$	13.68	—	2,426,177
June	June	1,398	$	9.50	—	2,426,177	June	166	$	13.80	—	2,426,177
Total	Total	24,256	$	5.65	—		Total	15,648	$	13.59	—

⁽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 Directors in 1997 and subsequently ~~increases~~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.

Item 3: Defaults Upon Senior Securities

None.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

None.

6247

Table of Contents

DIEBOLD NIXDORF, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of June 30, ~~2020~~2021

(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)

3.3						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)

3.4						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)

3.5						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)

~~4.1~~						~~Indenture, dated as of July 20, 2020, among Diebold Nixdorf, Incorporated, as issuer, the subsidiaries of Diebold Nixdorf, Incorporated named therein as guarantors, and U.S. Bank National Association, as trustee and~~ ~~notes~~ ~~collateral agent, relating to Diebold Nixdorf, Incorporated's 9.375% Senior S~~e ~~cured~~ ~~Notes due 202~~5 – ~~incorporated by reference~~ ~~to exhibit 4.1 to Registrant's Current Report on Form 8-K filed on July~~ 24 ~~, 2020 (Commission File No. 1-4879)~~

~~4.2~~						~~Form of 9.375% Senior Secured Notes due 2025 (included in Exhibit 4.1)~~

~~4.3~~						~~Indenture, dated as of July 20, 2020, among Diebold Nixdorf~~ ~~Dutch Holding B.V., as issuer,~~ ~~Diebold Nixdorf, Incorporated, as guarantor,~~ ~~the subsidiaries of Diebold Nixdorf, Incorporated named therein asguarantors,~~ ~~Euroclear Financial Services DAC, as paying agent,transfer agent and registra~~r, ~~and U.S. Bank National Association, as trustee, and U.S. Bank~~ ~~Trustees Limited,~~ as ~~notes~~ ~~collateral agent, relating to Diebold Nixdorf~~ ~~Dutch Holding B.V.'s 9.000% Senior Secured Notes due 2025~~ – ~~incorporated by reference~~ ~~to exhibit 4.~~3 ~~to Registrant's Current Report on Form 8-K filed on July~~ 24 ~~, 2020 (Commission File No. 1-4879)~~

~~4.4~~						~~Form of 9.000% Senior Secured Notes due 2025 (included in Exhibit 4.3)~~

10.1						Diebold Nixdorf, Incorporated 2017 Equity and Performance Incentive Plan, as amended ~~May 1, 2020 incorporated~~April 30, 2021 – Incorporated by reference to Exhibit ~~10.13~~10.1 to ~~Registrant's~~Registrant’s Current Report on Form 8-K filed on May ~~7, 2020(Commission File No. 1-4879)~~

~~10.2~~						~~Ninth Amendment, dated as of July 20, 2020, by and among Diebold Nixdorf, Incorporated, as borrower,~~ ~~the subsidiary borrowers named therein~~, ~~the guarantors party thereto~~ ~~from time to time, JPMorgan Chase Bank, N.A., as administrative agent and the~~ ~~other institutions named on the signature pages~~ ~~thereto~~ – ~~incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed on July~~ 24 ~~, 2020~~5, 2021 (Commission File No. 1-4879)


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

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (embedded within the Inline XBRL document included in Exhibit 101)

6348

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:

July ~~31, 2020~~29, 2021

/s/ Gerrard B. Schmid

By:

Gerrard B. Schmid

President and Chief Executive Officer

(Principal Executive Officer)

Date:

July ~~31, 2020~~29, 2021

/s/ Jeffrey Rutherford

By:

Jeffrey Rutherford

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

6449


	June 30, 2020		June 30, 2019
Weighted-average remaining lease terms (in years)
Operating leases	4.3		4.1
Finance leases	3.9		2.6
Weighted-average discount rate
Operating leases	11.4	%	13.8	%
Finance leases	11.5	%	26.7	%


	Operating		Finance
2020 (excluding the six months ended June 30, 2020)	$	42.2	$	1.1
2021	52.0		2.1
2022	31.4		1.2
2023	18.9		0.5
2024	13.7		0.5
Thereafter	24.1		0.7
Total	182.3		6.1
Less: Present value discount	(36.0)		(1.0)
Lease liability	$	146.3	$	5.1


	Number of Shares	Weighted-Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
		(per share)		(in years)
Outstanding at January 1, 2020	2.4	$	14.89
Expired or forfeited	(0.1)	$	31.74

Granted	0.4	$	12.54
Outstanding at June 30, 2020	2.7	$	14.30	8	$	1.9
Options exercisable at June 30, 2020	1.4	$	19.66	7	$	0.6
Options vested and expected to vest⁽²⁾at June 30, 2020	2.7	$	14.30	8	$	1.9


	Number of Shares	Weighted-Average Grant-Date Fair Value
RSUs:
Non-vested at January 1, 2020	2.2	$	9.99
Forfeited	(0.1)	$	14.97
Vested	(1.0)	$	12.61
Granted	0.9	$	10.64
Non-vested at June 30, 2020	2.0	$	8.94
Performance Shares:
Non-vested at January 1, 2020	2.4	$	26.44
Forfeited	(0.8)	$	34.70
Vested	(0.3)	$	26.60

Non-vested at June 30, 2020	1.3	$	21.76


	Three Months Ended						Six Months Ended			Affected Line Item in the Statement of Operations
	June 30,						June 30,
	2020		2019		2020		2019
Interest rate hedges	$	0.8	$	0.5	$	5.3	$	1.0	Interest expense
Pension and post-retirement benefits:
Net actuarial gain (loss) amortization (net of tax of $0.4, $0.4, $1.8 and $0.7, respectively)	2.3		4.3		9.1		3.8		(1)
Total reclassifications for the period	$	3.1	$	4.8	$	14.4	$	4.8


	Parent		Domestic Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Entries and Eliminations		Consolidated
ASSETS
Current assets
Cash, cash equivalents and restricted cash	$	194.5	$	—	$	251.9	$	—	$	446.4

Short-term investments	—		—		9.0		—		9.0
Trade receivables, net	122.4		0.1		466.3		—		588.8
Intercompany receivables	600.0		549.8		670.2		(1,820.0)		—
Inventories	115.3		—		403.0		(4.9)		513.4


Prepaid, income taxes and other current assets	20.1		7.9		317.6		(7.8)		337.8
Total current assets	1,052.3		557.8		2,118.0		(1,832.7)		1,895.4
Securities and other investments	17.4		—		—		—		17.4
Property, plant and equipment, net	52.0		—		153.5		—		205.5
Goodwill	55.5		—		719.6		—		775.1
Deferred income taxes	71.8		6.4		57.1		—		135.3

Customer relationships, net	—		—		409.2		—		409.2

Investment in subsidiary	1,589.6		—		—		(1,589.6)		—
Long-term intercompany receivables	615.9		—		—		(615.9)		—
Other assets	52.0		3.4		227.8		—		283.2
Total assets	$	3,506.5	$	567.6	$	3,685.2	$	(4,038.2)	$	3,721.1

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities
Notes payable	$	93.2	$	—	$	8.9	$	—	$	102.1
Accounts payable	81.4		—		398.2		—		479.6
Intercompany payable	1,220.0		45.2		554.8		(1,820.0)		—
Deferred revenue	107.5		—		193.1		—		300.6
Payroll and other benefits liabilities	44.6		—		116.4		—		161.0


Other current liabilities	96.7		0.9		394.8		(7.8)		484.6
Total current liabilities	1,643.4		46.1		1,666.2		(1,827.8)		1,527.9
Long-term debt	2,360.7		—		1.7		—		2,362.4




Long-term intercompany payable	—		—		615.9		(615.9)		—
Other long-term liabilities	205.4		—		313.8		—		519.2

Redeemable noncontrolling interests	—		—		20.1		—		20.1
Total Diebold Nixdorf, Incorporated shareholders' equity	(703.0)		521.5		1,073.0		(1,594.5)		(703.0)
Noncontrolling interests	—		—		(5.5)		—		(5.5)
Total liabilities, redeemable noncontrolling interests and equity	$	3,506.5	$	567.6	$	3,685.2	$	(4,038.2)	$	3,721.1