DIEBOLD NIXDORF Inc

Previous wording

The Company seeks to continually enhance the consumer experience at bank and retail locations while streamlining cost structures and business processes for its customers 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. In addition, the Company is focused on consistently innovating its solutions while simultaneously streamlining its cost structures and business processes.

Current wording

The Company seeks to continually enhance the consumer experience at bank and retail locations while streamlining cost structures and business processes for its customers 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. In addition, the Company is focused on consistently innovating its solutions while effectively improving its business processes and cost management efforts.

Previous wording

Services represents the largest operational component of the Company and includes product-related services, implementation services and managed services. Product-related services incidents are managed through remote service capabilities or an on-site visit. The portfolio includes contracted maintenance, preventive maintenance, “on-demand” maintenance and total implementation services. Implementation services help our customers effectively respond to changing customer demands and includes scalable solutions based on globally standardized processes and tools, a single point of contact and reliable local expertise. Managed services and outsourcing consists of managing the end-to-end business processes and technology integration. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.

Current wording

Banking services represents the largest operational component of the Company and includes product-related services, implementation services and managed services. Product-related services incidents are managed through remote service capabilities or an on-site visit. The portfolio includes contracted maintenance, preventive maintenance, “on-demand” maintenance and total implementation services. Implementation services help our customers effectively respond to changing customer demands and includes scalable solutions based on globally standardized processes and tools, a single point of contact and reliable local expertise. Managed services and outsourcing consist of managing the end-to-end business processes and technology integration. Our integrated business solutions include self-service fleet management, branch life-cycle management and ATM as-a-service capabilities.

Previous wording

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. This discussion focuses on comparison of Successor results for the three month period ending March 31, 2024 compared to the Predecessor results for the period ending March 31, 2023. 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 on Form 10-Q.

Current wording

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. This discussion focuses on comparison of Successor results for the three and six month periods ended June 30, 2024 compared to the Predecessor results for the period ended June 30, 2023. 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 on Form 10-Q.

Previous wording

The increase in net sales of 4.3 percent was primarily due to price increases, mix of unit sales and a $9.7 PIS/COFIN tax recovery in Brazil in the Banking segments, offset by declines in POS sales in the Retail segment. The increase in net sales was also partially attributable to increases in Services revenues in both segments.

Current wording

The increase in net sales of 3.1 percent was primarily due to price increases, mix of unit sales and a $9.7 PIS/COFIN tax recovery in Brazil in the Banking segments. This was offset by declines in product sales in the Retail segment, particularly in 3rd party products and to lesser degree SCO. The increase in net sales was also partially attributable to increases in Services revenues in both segments.

Previous wording

Product gross profit performance was driven by product sales unit volume at favorable pricing, as well as the PIS/COFIN tax recovery in Brazil. This was further supplemented by favorable logistical costs and normalization of certain raw material costs, most notably semiconductor chips.

Current wording

Product gross profit performance favorable geographic mix, improved pricing realization, logistical costs and normalization of certain raw material costs, as well as the PIS/COFIN tax recovery in Brazil.

Previous wording

(Gain) loss on sale of assets, net in the Successor period is the result of sales of fleet vehicles in the US.

Current wording

(Gain) loss on sale of assets, net in the Successor period is the result of sales of fleet vehicles in the US and lease terminations in Poland.

Previous wording

Interest expense decreased as a result of the 58.2 percent decrease in debt balance somewhat offset by increasing variable interest rates. Refer to Note 11 to our condensed consolidated financial statements for further detail.

Current wording

Interest expense decreased as a result of the 67.7 percent decrease in debt balance somewhat offset by increasing variable interest rates. Refer to Note 11 to our condensed consolidated financial statements for further detail.

Previous wording

Foreign exchange gain (loss), net includes realized gains and losses, primarily related to the favorable exposures in the Chilean Peso, Colombian Peso and Thai Baht and offset by Euro and Canadian dollar exposures, which were unfavorable during the first quarter of 2024.

Current wording

Foreign exchange gain (loss), net includes realized gains and losses, primarily related to the favorable exposures in the Brazilian Real, Colombian Peso and Thai Baht and offset by Euro and Canadian dollar exposures, which were unfavorable during the six months ended June 30, 2024.

Previous wording

The following tables represent information regarding the segment operating profit metrics, which exclude the impact of restructuring and transformation, non-routine charges, and the held for sale non-core European retail business (sold in September 2023) because these items are not assigned to a segment in any of the Company's reporting metrics, including those used by the Chief Operating Decision Maker for assessing performance and allocating resources. Refer to Note 19 to our condensed consolidated financial statements for further details regarding the determination of reportable segments and the reconciliation between segment operating profit and consolidated operating profit.

Current wording

The following tables represent information regarding the segment operating profit metrics, which exclude the impact of restructuring and transformation, non-routine charges, amortization of fair value assets and the held for sale non-core European retail business (sold in September 2023) because these items are not assigned to a segment in any of the Company's reporting metrics, including those used by the Chief Operating Decision Maker for assessing performance and allocating resources. Refer to Note 19 to our condensed consolidated financial statements for further details regarding the determination of reportable segments and the reconciliation between segment operating profit and consolidated operating profit.

Previous wording

Banking net sales were favorable in the Successor Period due to price increases, mix of unit sales, as well as a PIS/COFIN tax recovery in Brazil. Operating profit and margin increased as a result of price and cost actions and spend management initiatives resulting in lower operating expenses.

Current wording

Banking net sales were favorable in the Successor Period due to price increases, geographical mix of sales, as well as a PIS/COFIN tax recovery in Brazil. Operating profit and margin increased as a result of price and cost actions and spend management initiatives resulting in lower operating expenses.

Previous wording

Retail segment operating profit was driven by sales volume of SCO units and normalization of supply chain logistics and input costs.

Current wording

Retail segment operating profit was driven by service volume and improvements in product margin from normalization of supply chain logistics and input costs.

Previous wording

As of March 31, 2024, $50.0 was drawn under the Revolving Credit Facility.

Current wording

As of June 30, 2024, $39.3 was drawn under the Revolving Credit Facility.

Previous wording

•Cash flows from operating activities during the Successor Period ended March 31, 2024 were driven by cash provided by trade receivables, accounts payable and deferred revenue as well as cash uses for inventories. The key drivers of these cash flows are timing of sales, collections, and vendor payments which can fluctuate significantly period to period.

Current wording

•Cash flows from operating activities during the Successor Period ended June 30, 2024 were driven by cash provided by trade receivables and cash uses for inventories, accounts payable and deferred revenue. The key drivers of these cash flows are timing of sales, collections, and vendor payments which can fluctuate significantly period to period.

Previous wording

Cash flows from financing activities during the Successor Period include a $200.0 borrowing against the Revolving Credit Facility which was used to pay down the Exit Facility, and a $150.0 repayment of the Revolving Credit Facility (refer to Note 11 of the condensed consolidated financial statements).

Current wording

Cash flows from financing activities during the Successor Period include a $200.0 borrowing against the Revolving Credit Facility which was used to pay down the Exit Facility, and a $160.7 repayment of the Revolving Credit Facility (refer to Note 11 of the condensed consolidated financial statements).

Previous wording

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 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 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.

Current wording

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 condensed 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 the accompanying condensed 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 receivables, inventories, goodwill, intangible assets, other long-lived assets, legal contingencies, 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.

Previous wording

•other factors included in the Company’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2023 and this Quarterly Report on Form 10-Q.

Current wording

•other factors included in the Company’s filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on March 8, 2024, and this Quarterly Report on Form 10-Q.