10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

Form 10-Q

__________________________________________________ 

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

For the quarterly period ended March 31, 2012

OR

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

For the transition period from                      to                     

Commission file number 1-4879

_________________________________________________

Diebold, 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

__________________________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x     No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer (Do not check if a smaller reporting company) o Smaller reporting company o

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

Number of shares of common stock outstanding as of April 24, 2012 was 62,986,506.

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q

INDEX

PART I – FINANCIAL INFORMATION	3
ITEM 1: FINANCIAL STATEMENTS	3
CONDENSED CONSOLIDATED BALANCE SHEETS – March 31, 2012 (Unaudited) and December  31, 2011	3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) – Three Months Ended March 31, 2012 and 2011	4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) – Three Months Ended March 31, 2012 and 2011	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) – Three Months Ended March 31, 2012 and 2011	6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	7
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4: CONTROLS AND PROCEDURES	30
PART II – OTHER INFORMATION	30
ITEM 1: LEGAL PROCEEDINGS	30
ITEM 1A: RISK FACTORS	31
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31
ITEM 3: DEFAULTS UPON SENIOR SECURITIES	32
ITEM 4: MINE SAFETY DISCLOSURES	32
ITEM 5: OTHER INFORMATION	32
ITEM 6: EXHIBITS	33
SIGNATURES	34
EXHIBIT INDEX	35

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	March 31, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	311,437		$	333,920
Short-term investments	300,051			286,853
Trade receivables, less allowances for doubtful accounts of $23,027 and $22,128, respectively	447,949			414,969
Inventories	493,831			440,900
Deferred income taxes	112,824			114,250
Prepaid expenses	34,860			31,452
Other current assets	134,945			110,011
Total current assets	1,835,897			1,732,355
Securities and other investments	74,876			74,869
Property, plant and equipment, at cost	652,695			642,256
Less accumulated depreciation and amortization	460,184			449,562
Property, plant and equipment, net	192,511			192,694
Goodwill	257,374			253,063
Deferred income taxes	91,752			91,090
Other assets	178,982			173,372
Total assets	$	2,631,392		$	2,517,443
LIABILITIES AND EQUITY
Current liabilities
Notes payable	$	39,425		$	21,722
Accounts payable	231,478			221,964
Deferred revenue	287,360			241,992
Payroll and other benefits liabilities	55,992			79,854
Other current liabilities	253,068			258,685
Total current liabilities	867,323			824,217
Long-term debt	618,095			606,154
Pensions and other benefits	136,210			148,399
Postretirement and other benefits	23,547			23,196
Deferred income taxes	32,914			32,029
Other long-term liabilities	28,300			25,188
Commitments and contingencies	—			—
Equity
Diebold, Incorporated shareholders' equity
Preferred shares, no par value, 1,000,000 authorized shares, none issued	—			—
Common shares, $1.25 par value, 125,000,000 authorized shares, 77,389,520 and 76,840,956 issued shares, 62,986,756 and 62,513,615 outstanding shares, respectively	96,737			96,051
Additional capital	340,818			327,805
Retained earnings	1,018,279			991,210
Treasury shares, at cost (14,402,764 and 14,327,341 shares, respectively)	(550,622		)	(547,737		)
Accumulated other comprehensive income	(11,165		)	(40,343		)
Total Diebold, Incorporated shareholders' equity	894,047			826,986
Noncontrolling interests	30,956			31,274
Total equity	925,003			858,260
Total liabilities and equity	$	2,631,392		$	2,517,443

See accompanying notes to condensed consolidated financial statements.

3

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share amounts)

	Three Months Ended
	March 31,
	2012			2011
Net sales
Services	$	396,865		$	364,374
Products	301,626			249,783
	698,491			614,157
Cost of sales
Services	285,396			275,890
Products	219,855			188,863
	505,251			464,753
Gross profit	193,240			149,404
Selling and administrative expense	119,795			121,111
Research, development and engineering expense	18,801			19,424
	138,596			140,535
Operating profit	54,644			8,869
Other income (expense)
Investment income	11,955			10,898
Interest expense	(7,608		)	(8,673		)
Foreign exchange gain (loss), net	545			(1,046		)
Miscellaneous, net	(90		)	23
Income from continuing operations before taxes	59,446			10,071
Taxes on income	13,481			5,925
Income from continuing operations	45,965			4,146
Loss from discontinued operations, net of tax	—			(11		)
Net income	45,965			4,135
Net income attributable to noncontrolling interests	802			1,634
Net income attributable to Diebold, Incorporated	$	45,163		$	2,501
Basic weighted-average shares outstanding	62,725			65,762
Diluted weighted-average shares outstanding	63,333			66,230
Basic earnings per share
Income from continuing operations, net of tax	$	0.72		$	0.04
Loss from discontinued operations, net of tax	—			—
Net income attributable to Diebold, Incorporated	$	0.72		$	0.04
Diluted earnings per share
Income from continuing operations, net of tax	$	0.71		$	0.04
Loss from discontinued operations, net of tax	—			—
Net income attributable to Diebold, Incorporated	$	0.71		$	0.04
Amounts attributable to Diebold, Incorporated
Income from continuing operations, net of tax	$	45,163		$	2,512
Loss from discontinued operations, net of tax	—			(11		)
Net income attributable to Diebold, Incorporated	$	45,163		$	2,501

See accompanying notes to condensed consolidated financial statements.

4

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2012			2011
Net income	$	45,965		$	4,135
Other comprehensive income, net of tax:
Foreign currency hedges and translation	25,565			14,945
Interest rate hedges:
Gain recognized in other comprehensive income	170			40
Less: reclassification adjustment for gains included in net income	94			89
	76			(49		)
Pension and other postretirement benefits:
Net actuarial loss amortization	4,332			2,503
Net prior service cost (benefit) amortization	(64		)	(64		)
Other	5			(1,710		)
	4,273			729
Unrealized gain (loss), net on securities:
Unrealized holding losses arising during period	(416		)	(837		)
Less: reclassification adjustment for gains (losses) included in net income	328			(164		)
	(744		)	(673		)
Other comprehensive income, net of tax	29,170			14,952
Comprehensive income	75,135			19,087
Less: comprehensive income attributable to noncontrolling interests	794			1,905
Comprehensive income attributable to Diebold, Incorporated	$	74,341		$	17,182

See accompanying notes to condensed consolidated financial statements.

5

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2012			2011
Cash flow from operating activities:
Net income	$	45,965		$	4,135
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation and amortization	19,711			19,246
Share-based compensation	3,797			3,435
Excess tax benefits from share-based compensation	(1,269		)	(1,484		)
Equity in earnings of an investee	(247		)	(425		)
Cash flow from changes in certain assets and liabilities:
Trade receivables	(26,535		)	(8,072		)
Inventories	(45,268		)	(21,955		)
Prepaid expenses	(3,045		)	158
Other current assets	(24,992		)	(15,419		)
Accounts payable	7,063			(29,404		)
Deferred revenue	42,378			25,078
Certain other assets and liabilities	(43,579		)	(65,444		)
Net cash used in operating activities	(26,021		)	(90,151		)
Cash flow from investing activities:
Proceeds from maturities of investments	88,698			59,292
Proceeds from sale of investments	5,808			7,117
Payments for purchases of investments	(99,738		)	(56,720		)
Proceeds from sale of assets	—			175
Capital expenditures	(12,297		)	(10,902		)
Collections on purchased finance receivables	4,438			7,338
Increase in certain other assets	(6,692		)	(4,103		)
Net cash (used in) provided by investing activities	(19,783		)	2,197
Cash flow from financing activities:
Dividends paid	(18,094		)	(18,650		)
Debt borrowings	263,724			156,637
Debt repayments	(234,264		)	(85,210		)
Issuance of common shares	9,902			4,017
Repurchase of common shares	(2,885		)	(21,451		)
Other	157			615
Net cash provided by financing activities	18,540			35,958
Effect of exchange rate changes on cash and cash equivalents	4,781			2,900
Decrease in cash and cash equivalents	(22,483		)	(49,096		)
Cash and cash equivalents at the beginning of the period	333,920			328,658
Cash and cash equivalents at the end of the period	$	311,437		$	279,562

See accompanying notes to condensed consolidated financial statements.

6

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

NOTE 1: CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of Diebold, 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 U.S. generally accepted accounting principles (GAAP); however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods.

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s annual report on Form 10-K for the year ended December 31, 2011. In addition, some of the Company’s statements in this 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 months ended March 31, 2012 are not necessarily indicative of results to be expected for the full year.

RECENTLY ADOPTED ACCOUNTING GUIDANCE

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income (ASU 2011-05), which eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently, in December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (ASU 2011-12), which indefinitely defers the requirement in ASU 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The Company has provided the required statements of comprehensive income for the three months ended March 31, 2012 and 2011.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 amended Accounting Standards Codification 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards (IFRSs). ASU 2011-04 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Disclosure requirements have been expanded to include additional information about transfers between level 1 and level 2 of the fair value hierarchy and level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurements including: (a) the application of the highest and best use valuation premise concepts; (b) measuring the fair value of an instrument classified in a reporting entity's stockholders' equity; and (c) quantitative information required for fair value measurements categorized within level 3. The adoption of this guidance did not have an impact on the Company's condensed consolidated financial statements; however, the Company provided additional disclosure as required by ASU 2011-04 in note 16.

RECENTLY ISSUED ACCOUNTING GUIDANCE

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which requires certain additional disclosure requirements about financial instruments and derivatives instruments that are subject to netting arrangements. The new disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those periods. The adoption of this update will not have an impact on the financial statements of the Company.

7

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

NOTE 2: EARNINGS PER SHARE

Basic earnings per share is based on the weighted-average number of common shares outstanding. Diluted earnings per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing earnings 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), deferred shares and shares that were vested, but deferred by the employee. The Company calculated basic and diluted earnings per share under both the treasury stock method and the two-class method. For the three months ended March 31, 2012, there was no impact in the per share amounts calculated under the two methods. Accordingly, the treasury stock method is disclosed below.

The following represents amounts used in computing earnings per share and the effect on the weighted-average number of shares of dilutive potential common shares for the three months ended March 31:

	2012		2011
Numerator:
Income used in basic and diluted earnings per share:
Income from continuing operations, net of tax	$	45,163	$	2,512
Loss from discontinued operations, net of tax	—		(11		)
Net income attributable to Diebold, Incorporated	$	45,163	$	2,501
Denominator (in thousands):
Weighted-average number of common shares used in basic earnings per share	62,725		65,762
Effect of dilutive shares	608		468
Weighted-average number of shares used in diluted earnings per share	63,333		66,230
Basic earnings per share:
Net income from continuing operations	$	0.72	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.72	$	0.04
Diluted earnings per share:
Net income from continuing operations	$	0.71	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.71	$	0.04
Anti-dilutive shares (in thousands):
Anti-dilutive shares not used in calculating diluted weighted-average shares	1,596		2,023

8

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

NOTE 3: EQUITY

The following table presents changes in shareholders' equity attributable to Diebold, Incorporated and the noncontrolling interests for the three months ended March 31:

	2012			2011
Diebold, Incorporated shareholders' equity
Balance at beginning of period	$	826,986		$	961,155
Comprehensive income attributable to Diebold, Incorporated	74,341			17,182
Common shares	686			537
Additional capital	13,013			8,257
Treasury shares	(2,885		)	(21,451		)
Dividends declared	(18,094		)	(18,650		)
Balance at end of period	$	894,047		$	947,030
Noncontrolling interests
Balance at beginning of period	$	31,274		$	28,659
Comprehensive income attributable to noncontrolling interests	794			1,905
Distributions to noncontrolling interest holders	(1,112		)	(310		)
Balance at end of period	$	30,956		$	30,254

NOTE 4: SHARE-BASED COMPENSATION

The Company’s share-based compensation payments to employees are recognized in the statement of income based on their grant-date fair values during the period in which the employee is required to provide services in exchange for the award. Share-based compensation is recognized as a component of selling and administrative expense. Total share-based compensation expense for the three months ended March 31, 2012 and 2011 was $3,797 and $3,435, respectively.

Options outstanding and exercisable as of March 31, 2012 under the Company’s 1991 Equity and Performance Incentive Plan (as Amended and Restated as of April 13, 2009) and changes during the three months ended March 31, 2012, were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (1)
	(in thousands)		(per share)		(in years)
Outstanding at January 1, 2012	3,201		$	36.70
Expired or forfeited	(400	)	$	36.70
Exercised	(331	)	$	29.93
Granted	539		$	34.89
Outstanding at March 31, 2012	3,009		$	37.12	6	$	13,856
Options exercisable at March 31, 2012	1,910		$	39.76	4	$	7,265
Options vested and expected to vest (2) at March 31, 2012	2,982		$	37.16	6	$	13,697

(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 2012 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 March 31, 2012. 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.

9

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

The following tables summarize information on non-vested RSUs, performance shares and deferred shares for the three months ended March 31, 2012:

	Number of Shares		Weighted-Average Grant-Date Fair Value
	(in thousands)
RSUs:
Non-Vested at January 1, 2012	717		$	30.69
Forfeited	(29	)	$	29.65
Vested	(130	)	$	24.91
Granted	209		$	34.97
Non-Vested at March 31, 2012	767		$	32.88
Performance Shares (1):
Non-Vested at January 1, 2012	727		$	34.70
Forfeited	(207	)	$	30.55
Vested	(86	)	$	29.25
Granted	285		$	44.25
Non-Vested at March 31, 2012	719		$	40.33
Director Deferred Shares:
Non-Vested at March 31, 2012	19		$	33.98
Vested at March 31, 2012	96		$	33.88
Outstanding at March 31, 2012	115		$	33.90

(1) Non-vested performance shares are based on a maximum potential payout. Actual shares granted at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance share objectives.

NOTE 5: INCOME TAXES

The effective tax rate on continuing operations for the three months ended March 31, 2012 was 22.7 percent compared to 58.8 percent for the same period of 2011. The 36.1 percentage point decrease was mainly due to 2011 losses in certain Europe, Middle East and Africa (EMEA) jurisdictions for which no tax benefit was recognized in the first-quarter 2011 effective tax rate. The impact was significant on the first-quarter 2011 effective tax rate because these operating losses were relatively large when compared to income from continuing operations before taxes for the period. Additionally, foreign income tax assessments and interest on uncertain tax positions increased the first-quarter 2011 effective tax rate.

NOTE 6: INVESTMENTS

The Company’s investments, primarily in Brazil, consist of certificates of deposit and U.S. dollar indexed bond funds, which are classified as available-for-sale and stated at fair value based upon quoted market prices and net asset values, respectively. Unrealized gains and losses are recorded in OCI. Realized gains and losses are recognized in investment income and are determined using the specific identification method. Realized gains (losses), net from the sale of securities were $328 and $(164) for the three months ended March 31, 2012 and 2011, respectively. Proceeds from the sale of available-for-sale securities were $5,808 and $7,117 during the three months ended March 31, 2012 and 2011, respectively.

10

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

The Company’s investments, excluding cash surrender value of insurance contracts of $67,068 and $67,699 as of March 31, 2012 and December 31, 2011, respectively, consist of the following:

	Cost Basis		Unrealized Gain (Loss)			Fair Value
As of March 31, 2012
Short-term investments:
Certificates of deposit	$	264,896	$	—		$	264,896
U.S. dollar indexed bond funds	34,561		594			35,155
	$	299,457	$	594		$	300,051
Long-term investments:
Assets held in a rabbi trust	$	7,302	$	506		$	7,808
As of December 31, 2011
Short-term investments:
Certificates of deposit	$	269,033	$	—		$	269,033
U.S. dollar indexed bond funds	16,482		1,338			17,820
	$	285,515	$	1,338		$	286,853
Long-term investments:
Assets held in a rabbi trust	$	7,428	$	(258	)	$	7,170

NOTE 7: ALLOWANCE FOR CREDIT LOSSES

Trade Receivables The Company evaluates the collectability of trade receivables based on (1) a percentage of sales related to historical loss experience and current trends and (2) periodic adjustments for known events such as specific customer circumstances and changes in the aging of accounts receivable balances. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off.

Financing Receivables The Company evaluates the collectability of notes and finance lease receivables (collectively, financing receivables) on a customer-by-customer basis and evaluates specific customer circumstances, aging of invoices, credit risk changes and payment patterns and historical loss experience. When the collectability is determined to be at risk based on the above criteria, the Company records the allowance for credit losses which represents the Company’s current exposure less estimated reimbursement from insurance claims. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off. The following table summarizes the Company’s allowance for credit losses and recorded investment in financing receivables:

	Finance Leases		Notes Receivable		Total
Allowance for credit losses
Balance at January 1, 2012	$	210	$	2,047	$	2,257
Provision for credit losses	—		—		—
Recoveries	15		—		15
Write-offs	—		—		—
Balance at March 31, 2012	$	225	$	2,047	$	2,272
Allowance resulting from individual impairment evaluation	$	225	$	2,047	$	2,272
Allowance resulting from collective impairment evaluation	—		—		—
Financing receivables individually evaluated for impairment	$	100,819	$	14,134	$	114,953
Financing receivables collectively evaluated for impairment	—		—		—

The Company records interest income and any fees or costs related to financing receivables using the effective interest method over the term of the lease or loan. The Company reviews the aging of its financing receivables to determine past due and delinquent accounts. Credit quality is reviewed at inception and is re-evaluated as needed based on customer-specific circumstances. Receivable balances 60 days to 89 days past due are reviewed and may be placed on nonaccrual status based on customer-specific circumstances.

11

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

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

As of March 31, 2012 and December 31, 2011, the recorded investment in past-due finance lease receivables on nonaccrual status was $2,813 and $1,740, respectively. The recorded investment in finance lease receivables past due 90 days or more and still accruing interest was $0 and $114 as of March 31, 2012 and December 31, 2011, respectively. The recorded investment in impaired notes receivable as of March 31, 2012 and December 31, 2011 was $2,047 and $2,047, respectively, and was fully reserved. The following table summarizes the Company’s aging of past-due notes receivable balances as of March 31, 2012:

30-59 days past due	$	—
60-89 days past due	—
> 89 days past due	1,564
Total past due	$	1,564

NOTE 8: INVENTORIES

Major classes of inventories are summarized as follows:

	March 31, 2012		December 31, 2011
Finished goods	$	217,108	$	188,571
Service parts	159,442		152,597
Raw materials and work in process	117,281		99,732
Total inventories	$	493,831	$	440,900

NOTE 9: OTHER ASSETS

Included in other assets are net capitalized software development costs of $51,223 and $51,117 as of March 31, 2012 and December 31, 2011, respectively. Amortization expense on capitalized software of $4,370 and $4,576 was included in product cost of sales for the three months ended March 31, 2012 and 2011, respectively. Other long-term assets also consist of patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred. Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss may be recognized at that time to reduce the asset to the lower of its fair value or its net book value.

Investment in Affiliate Investment in the Company’s non-consolidated affiliate is accounted for under the equity method and consists of a 50 percent ownership in Shanghai Diebold King Safe Company, Ltd. The balance of this investment as of March 31, 2012 and December 31, 2011 was $11,708 and $11,461 respectively, and fluctuated based on equity earnings and dividends. Equity earnings from the non-consolidated affiliate are included in miscellaneous, net in the condensed consolidated statements of income and were $247 and $425 for the three months ended March 31, 2012 and 2011, respectively.

12

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

NOTE 10: DEBT

Outstanding debt balances were as follows:

	March 31, 2012		December 31, 2011
Notes payable:
Uncommitted lines of credit	$	39,281	$	21,572
Other	144		150
	$	39,425	$	21,722
Long-term debt:
Credit facility	$	303,000	$	291,000
Senior notes	300,000		300,000
Industrial development revenue bonds	11,900		11,900
Other	3,195		3,254
	$	618,095	$	606,154

As of March 31, 2012, the Company had various international short-term uncommitted lines of credit with borrowing limits of $110,700. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of March 31, 2012 and December 31, 2011 was 2.63 percent and 4.23 percent, respectively. The decline in the weighted-average interest rate is attributable to the change in mix of borrowings in foreign entities. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at March 31, 2012 was $71,419.

In June 2011, the Company entered into a five-year credit facility, which replaced its previous credit facility. As of March 31, 2012, the Company had borrowing limits under the credit facility totaling $500,000. Under the terms of the credit facility agreement, the Company has the ability, subject to various approvals, to increase the borrowing limits by $250,000. Up to $50,000 of the revolving credit facility is available under a swing line subfacility. The weighted-average interest rate on outstanding credit facility borrowings as of March 31, 2012 and December 31, 2011 was 1.44 percent and 1.49 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the credit facility as of March 31, 2012 was $197,000.

In March 2006, the Company issued senior notes in an aggregate principal amount of $300,000 with a weighted-average fixed interest rate of 5.50 percent. The maturity dates of the senior notes are staggered, with $75,000, $175,000 and $50,000 becoming due in 2013, 2016 and 2018, respectively. Additionally, the Company entered into a derivative transaction to hedge interest rate risk on $200,000 of the senior notes, which was treated as a cash flow hedge. This reduced the effective interest rate from 5.50 percent to 5.36 percent. As of March 31, 2012, although it is due within twelve months, $75,000 of the senior notes remain classified as long-term debt because of the Company's intent and ability to fund the repayment using amounts available under its credit facility, unless an alternative source of financing with more favorable terms is available upon maturity.

In 1997, industrial development revenue bonds were issued on behalf of the Company. The proceeds from the bond issuances were used to construct new manufacturing facilities in the United States. The Company guaranteed the payments of principal and interest on the bonds by obtaining letters of credit. The bonds were issued with a 20-year original term and are scheduled to mature in 2017. Each industrial development revenue bond carries a variable interest rate, which is reset weekly by the remarketing agents. The weighted-average interest rate on the bonds was 0.78 percent and 0.77 percent as of March 31, 2012 and December 31, 2011, respectively.

The Company’s debt agreements contain various restrictive financial covenants, including net debt to capitalization and net interest coverage ratios. As of March 31, 2012, the Company was in compliance with the financial covenants in its debt agreements.

NOTE 11: BENEFIT PLANS

The Company has pension plans covering certain U.S. employees that have been closed to new participants since July 1, 2003. Plans that cover certain salaried employees provide pension benefits based on the employee’s compensation during the ten years before retirement. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. Plans covering certain hourly employees and union members generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions

13

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

required by applicable regulations. Employees of the Company’s operations in countries outside of the U.S. participate to varying degrees in local pension plans, which in the aggregate are not significant.

In addition to providing pension benefits, the Company provides healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Eligible employees may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. Currently, the Company has made no commitments to increase these benefits for existing retirees or for employees who may become eligible for these benefits in the future. There are no plan assets and the Company funds the benefits as the claims are paid.

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for three months ended March 31:

	Pension Benefits						Other Benefits
	2012			2011			2012			2011
Components of net periodic benefit cost
Service cost	$	2,862		$	2,713		$	—		$	—
Interest cost	7,958			7,872			204			233
Expected return on plan assets	(10,205		)	(10,183		)	—			—
Amortization of prior service cost	65			65			(129		)	(129		)
Recognized net actuarial loss	4,211			2,406			121			97
Net periodic pension benefit cost	$	4,891		$	2,873		$	196		$	201

Cash Flows

There have been no significant changes to the 2012 plan year contribution amounts previously disclosed. For the three months ended March 31, 2012 and 2011, contributions of $12,864 and $20,697, respectively, were made to the qualified and non-qualified pension plans.

NOTE 12: GUARANTEES AND PRODUCT WARRANTIES

In 1997, industrial development revenue bonds were issued on behalf of the Company. The Company guaranteed the payments of principal and interest on the bonds (refer to note 10) by obtaining letters of credit. The carrying value of the bonds was $11,900 as of March 31, 2012 and December 31, 2011.

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 or fulfill contractual obligations, the suppliers, customers, regulatory agencies and insurance providers may draw on the pertinent bank. At March 31, 2012, the maximum future payment obligations related to these various guarantees totaled $77,906, of which $23,435 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, 2011, the maximum future payment obligations relative to these various guarantees totaled $71,321, of which $22,623 represented standby letters of credit to insurance providers, and no associated liability was recorded.

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

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

	2012			2011
Balance at January 1	$	63,355		$	78,313
Current period accruals (a)	15,934			18,411
Current period settlements	(14,608		)	(19,252		)
Balance at March 31	$	64,681		$	77,472

(a) includes the impact of foreign exchange rate fluctuations

14

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

NOTE 13: COMMITMENTS AND CONTINGENCIES

At March 31, 2012, the Company was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate 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 legal proceedings, commitments or asserted claims. In addition to these routine legal proceedings, the Company was a party to securities and shareholder actions, which are described in note 15 of the consolidated financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2011.

During the second quarter of 2010, while conducting due diligence in connection with a potential acquisition in Russia, the Company identified certain transactions and payments by its subsidiary in Russia (primarily during 2005 to 2008) that potentially implicate the Foreign Corrupt Practices Act (FCPA), particularly the books and records provisions of the FCPA. As a result, the Company conducted a global internal review and collected information related to its global FCPA compliance. In the fourth quarter of 2010, the Company identified certain transactions within its Asia Pacific operation that occurred over the past several years that may also potentially implicate the FCPA. The Company continues to monitor its ongoing compliance with the FCPA.

The Company has voluntarily self-reported its findings to the SEC and the U.S. Department of Justice (DOJ) and is cooperating with these agencies in their review. The Company was previously informed that the SEC's inquiry had been converted to a formal, non-public investigation. The Company also received a subpoena for documents from the SEC and a voluntary request for documents from the DOJ in connection with the investigation. As of March 31, 2012, the Company's accrued estimated loss related to the potential outcome of this matter is not considered material to the condensed consolidated financial statements. Because the SEC and DOJ investigations are ongoing, there can be no assurance that their review will not find evidence of additional transactions that potentially implicate the FCPA. At this time, the Company cannot predict the results of the government investigations and future resolution of these matters with the SEC and the DOJ could result in changes in management's estimates of losses, which could be material to the Company’s consolidated financial statements.

NOTE 14: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company uses derivatives to mitigate the economic consequences associated with fluctuations in currencies and interest rates.

FOREIGN EXCHANGE

Net Investment Hedges The Company has international subsidiaries with net balance sheet positions that generate cumulative translation adjustments within OCI. The Company uses derivatives to manage potential changes in value of its net investments in Brazil. The Company uses the forward-to-forward method for its quarterly retrospective and prospective assessments of hedge effectiveness. No ineffectiveness results if the notional amount of the derivative matches the portion of the net investment designated as being hedged because the Company uses derivative instruments with underlying exchange rates consistent with its functional currency and the functional currency of the hedged net investment. Changes in value that are deemed effective are accumulated in OCI where they will remain until they are reclassified to income together with the gain or loss on the entire investment upon substantial liquidation of the subsidiary. The fair value of the Company’s net investment hedge contracts was $(258) and $1,768 as of March 31, 2012 and December 31, 2011, respectively. The loss recognized in OCI on net investment hedge derivative instruments was $2,026 in the three months ended March 31, 2012.

Non-Designated Hedges A substantial portion of the Company’s operations and revenues are international. As a result, changes in foreign exchange rates can create substantial foreign exchange gains and losses from the revaluation of non-functional currency monetary assets and liabilities. The Company’s policy allows the use of foreign exchange forward contracts with maturities of up to 24 months to mitigate the impact of currency fluctuations on those foreign currency asset and liability balances. The Company elected not to apply hedge accounting to its foreign exchange forward contracts. Thus, spot-based gains/losses offset revaluation gains/losses within foreign exchange loss, net and forward-based gains/losses represent interest expense. The fair value of the Company’s non-designated foreign exchange forward contracts was $832 and $(1,558) as of March 31, 2012 and December 31, 2011, respectively.

15

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

The following table summarizes the (loss) gain recognized on non-designated foreign-exchange derivative instruments for the three months ended March 31:

Income Statement Location	2012			2011
Interest expense	$	(1,391	)	$	(1,849	)
Foreign exchange gain (loss), net	(2,434		)	(6,217		)
	$	(3,825	)	$	(8,066	)

INTEREST RATE

Cash Flow Hedges The Company has variable rate debt and is subject to fluctuations in interest related cash flows due to changes in market interest rates. The Company’s policy allows derivative instruments designated as cash flow hedges that fix a portion of future variable-rate interest expense. As of March 31, 2012, the Company has a pay-fixed receive-variable interest rate swap, with a total notional amount of $25,000, to hedge against changes in the LIBOR benchmark interest rate on a portion of the Company’s LIBOR-based borrowings. Changes in value that are deemed effective are accumulated in OCI and reclassified to interest expense when the hedged interest is accrued. To the extent that it becomes probable that the Company’s variable rate borrowings will not occur, the gains or losses on the related cash flow hedges will be reclassified from OCI to interest expense.

In December 2005 and January 2006, the Company executed cash flow hedges by entering into receive-variable and pay-fixed interest rate swaps, with a total notional amount of $200,000, related to the senior notes issuance in March 2006. Amounts previously recorded in OCI related to the pre-issuance cash flow hedges will continue to be reclassified on a straight-line basis through February 2016.

The fair value of the Company’s interest rate contracts was $(3,631) and $(3,796) as of March 31, 2012 and December 31, 2011, respectively.

Gains and losses related to interest rate contracts that are reclassified from accumulated OCI are recorded in interest expense on the statement of income. The Company anticipates reclassifying $742 from OCI to interest expense within the next 12 months.

NOTE 15: RESTRUCTURING AND OTHER CHARGES

The following table summarizes the impact of the Company’s restructuring charges (accrual adjustments) on the condensed consolidated statements of income for three months ended March 31:

	2012			2011
Cost of sales – services	$	(669	)	$	6,074
Cost of sales – products	5			123
Selling and administrative expense	2,387			5,604
Total	$	1,723		$	11,801

The following table summarizes the Company’s net restructuring charges (accrual adjustments) within continuing operations for its Diebold North America (DNA) and Diebold International (DI) reporting segments for the three months ended March 31:

	2012		2011
DNA
Severance	$	1,107	$	(7	)
DI
Severance	128		11,605
Other (1)	488		203
Total	$	1,723	$	11,801

(1) Other costs in the DI segment include legal fees, accelerated depreciation and lease termination fees.

Restructuring charges of $1,723 for the three months ended March 31, 2012 related to the Company’s global shared services plan, which entails expanding the Company's current information technology (IT) center in India, to create a global shared services center. Expanding the shared services center will require that the Company transfer global back-office work that currently resides in other geographies. Over the next two years, the Company anticipates approximately 200 IT and financial services-related jobs

16

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

globally will be impacted by this decision and incurring additional restructuring costs of $1,500 in 2012 and up to $9,500 in future periods. As management concludes on certain aspects of the global shared services plan, the anticipated future costs related to this plan are subject to change.

Restructuring charges of $330 and $11,580 for the three months ended March 31, 2012 and 2011, respectively, related to the Company’s plan for the EMEA reorganization, which realigns resources and leveraged the existing shared services center. As of March 31, 2012, the Company anticipates additional restructuring costs in the range of $400 to $1,100 to be incurred during the remainder of 2012 related to this plan.

Other net restructuring (accrual adjustments) charges were $(330) and $221 for the three months ended March 31, 2012 and 2011. Included in service cost of sales is a benefit of $669 related to restructuring accrual adjustments for the three months ended March 31, 2012.

The following table summarizes the Company’s cumulative total restructuring costs for the significant plans:

	EMEA Reorganization		Global Shared Services
Costs incurred to date:
DNA	$	—	$	1,437
DI	19,780		286
Total costs incurred to date	$	19,780	$	1,723

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

Balance at January 1, 2012	$	10,136
Liabilities incurred	1,723
Liabilities paid	(1,945		)
Balance at March 31, 2012	$	9,914

Other Charges

Other charges consist of items that the Company determines are non-routine in nature. Net non-routine expense of $924 and $5,771 were included in selling and administrative expense for the three months ended March 31, 2012 and 2011, respectively. Net non-routine expenses for 2012 and 2011 consisted primarily of legal and compliance costs related to the FCPA investigation.

NOTE 16: FAIR VALUE OF ASSETS AND LIABILITIES

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

Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Cost approach – Amount that would be required to replace the service capacity of an asset (replacement cost).

Income approach – Techniques to convert future amounts to a single present amount based upon market expectations.

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

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 – Unobservable inputs for which there is little or no market data.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

17

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

Assets and Liabilities Recorded at Fair Value

Assets and liabilities subject to fair value measurement are as follows:

	March 31, 2012						December 31, 2011
			Fair Value Measurements Using						Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
Assets
Short-term investments:
Certificates of deposit	$	264,896	$	264,896	$	—	$	269,033	$	269,033	$	—
U.S. dollar indexed bond funds	35,155		—		35,155		17,820		—		17,820
Assets held in a rabbi trust	7,808		7,808		—		7,170		7,170		—
Foreign exchange forward contracts	1,156		—		1,156		2,193		—		2,193
Total	$	309,015	$	272,704	$	36,311	$	296,216	$	276,203	$	20,013
Liabilities
Deferred compensation	$	7,808	$	7,808	$	—	$	7,170	$	7,170	$	—
Foreign exchange forward contracts	582		—		582		1,983		—		1,983
Interest rate swaps	3,631		—		3,631		3,796		—		3,796
Total	$	12,021	$	7,808	$	4,213	$	12,949	$	7,170	$	5,779

The Company uses the end of period when determining the timing of transfers between levels. During the three months ended March 31, 2012 and 2011, there were no transfers between levels.

Short-Term Investments The Company has investments in certificates of deposit that are recorded at cost, which approximates fair value. Additionally, the Company has investments in U.S. dollar indexed bond funds that are classified as available-for-sale and stated at fair value. U.S. dollar indexed bond funds are reported at net asset value, which is the practical expedient for fair value as determined by banks where funds are held.

Assets Held in a Rabbi Trust / Deferred Compensation The fair value of the assets held in a rabbi trust is derived from investments in a mix of money market, fixed income and equity funds managed by Vanguard. The related deferred compensation liability is recorded at fair value.

Foreign Exchange Forward Contracts A substantial portion of the Company’s operations and revenues are international. As a result, changes in foreign exchange rates can create substantial foreign exchange gains and losses from the revaluation of non-functional currency monetary assets and liabilities. The foreign exchange contracts are valued using the market approach based on observable market transactions of forward rates.

Interest Rate Swaps The Company has variable rate debt and is subject to fluctuations in interest-related cash flows due to changes in market interest rates. The Company’s policy allows it to periodically enter into derivative instruments designated as cash flow hedges to fix some portion of future variable rate based interest expense. The Company has a pay-fixed receive-variable interest rate swap to hedge against changes in the LIBOR benchmark interest rate on a portion of the Company’s LIBOR-based borrowings. The fair value of the swap is determined using the income approach and is calculated based on LIBOR rates at the reporting date.

Assets and Liabilities Recorded at Carrying Value

The fair value of the Company’s cash and cash equivalents, trade receivables and accounts payable, approximates the carrying value due to the relative short maturity of these instruments. The fair value and carrying value of the Company’s debt instruments are summarized as follows:

	March 31, 2012				December 31, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes payable	$	39,425	$	39,425	$	21,722	$	21,722
Long-term debt	628,538		618,095		612,551		606,154
Total debt instruments	$	667,963	$	657,520	$	634,273	$	627,876

18

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

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

NOTE 17: SEGMENT INFORMATION

The Company’s segments are comprised of two sales channels: DNA and DI. The DNA segment sells and services financial and retail systems in the United States and Canada. The DI segment sells and services financial and retail systems over the remainder of the globe as well as voting and lottery solutions in Brazil.

The reconciliation between segment information and the condensed consolidated financial statements is disclosed. Revenue summaries by geographic area and product and service solutions are also disclosed. Certain information not routinely used in the management of the DNA and DI segments are not allocated back to the segments. Items not allocated are as follows: investment income; interest expense; equity in the net income of investees accounted for by the equity method; income tax expense or benefit; foreign exchange gains and losses; miscellaneous, net; and discontinued operations. The Company has reclassified the presentation of prior-year operating profit (loss) to conform to the current year presentation due to changes in corporate allocations. 

The following table presents information regarding the Company’s segment information for three months ended March 31:

	2012			2011
DNA
Customer revenues	$	399,920		$	305,964
Intersegment revenues	13,607			19,626
Operating profit	55,297			16,152
Capital expenditures	5,285			5,779
Depreciation	6,895			6,759
Property, plant and equipment, at cost	465,358			462,840
Total assets	1,057,410			1,012,990
DI
Customer revenues	298,571			308,193
Intersegment revenues	18,775			15,266
Operating loss	(653		)	(7,283		)
Capital expenditures	7,012			5,123
Depreciation	6,387			5,224
Property, plant and equipment, at cost	187,337			193,471
Total assets	1,573,982			1,518,547
TOTAL
Customer revenues	698,491			614,157
Intersegment revenues	32,382			34,892
Operating profit	54,644			8,869
Capital expenditures	12,297			10,902
Depreciation	13,282			11,983
Property, plant and equipment, at cost	652,695			656,311
Total assets	2,631,392			2,531,537

19

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars in thousands, except per share amounts)

The following table presents information regarding the Company’s revenue by geographic region for three months ended March 31:

	2012		2011
Diebold North America	$	399,920	$	305,964
Diebold International:
Latin America including Brazil	137,668		152,888
Asia Pacific	96,200		83,889
Europe, Middle East and Africa	64,703		71,416
Total Diebold International	298,571		308,193
Total customer revenues	$	698,491	$	614,157

The following table presents information regarding the Company’s revenue by service and product solution for three months ended March 31:

	2012		2011
Financial self-service:
Services	$	299,935	$	264,456
Products	261,067		198,640
Total financial self-service	561,002		463,096
Security
Services	96,840		99,918
Products	38,033		43,413
Total security	134,873		143,331
Total financial self-service & security	695,875		606,427
Election and lottery systems	2,616		7,730
Total customer revenues	$	698,491	$	614,157

NOTE 18: DISCONTINUED OPERATIONS

Included in loss from discontinued operations were costs related to the Company's U.S.-based elections systems business.

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Management’s discussion and analysis should be read in conjunction with the condensed consolidated financial statements and accompanying notes that appear elsewhere in this quarterly report.

Introduction

Diebold, Incorporated is a global leader in providing integrated self-service delivery and security systems and services primarily to the financial, commercial, government, and retail markets. Founded in 1859, the Company today has more than 16,000 employees with representation in nearly 90 countries worldwide.

In 2011, the Company accelerated its transformation into a world-class, software-led services provider aligned with the security, convenience and efficiency needs of its customers. Three essential pillars provide the Company a clear path toward reaching this future:

• A strategy that leverages its leadership in software-led services, attuned with the needs of the Company's core global markets for financial self-service (FSS) and security solutions.

• The financial capacity to implement that strategy and fund the investments necessary to drive growth, while preserving the ability to return value to shareholders in the form of reliable, growing dividends and, as appropriate, share repurchases.

• A disciplined risk assessment process, focused on proactively identifying and mitigating potential risks to the Company's continued success.

The strategy to leverage the Company's capabilities in services, software and innovation is beginning to pay dividends and is meeting the needs of its rapidly evolving markets. The Company believes this positions it for continued momentum in 2012 using its software-led services strategy and leading edge technology.

The Company delivered record-setting first-quarter earnings per share performance, as the strength it saw in the fourth quarter of 2011 continued into 2012. The Company once again had strong performance in North America as demand for deposit automation and integrated services continues to grow. In addition, the Company's Europe, Middle East and Africa (EMEA) operation contributed to growth in earnings with a significant year-over-year reduction in first-quarter losses as it continues to benefit from the Company's restructuring efforts. Given the strong start to the year and the continued underlying strength in Diebold's markets, the Company has increased confidence in its ability to generate growth as it continues to build software-led services capabilities.

Income from continuing operations attributable to Diebold, Incorporated, net of tax, for the three months ended March 31, 2012 was $45,163 or $0.71 per share, an increase of $42,651 and $0.67 per share, respectively, from the same period in 2011. Total revenue for the three months ended March 31, 2012 was $698,491, an increase of $84,334 compared to the same period in 2011.

Vision and strategy

The Company’s vision is to be recognized as the essential partner in creating and implementing ideas that optimize convenience, efficiency and security. This vision is the guiding principle behind the Company’s transformation to becoming a more software-led services company. Services comprise more than 50 percent of the Company’s revenue. The Company expects that this percentage will continue to grow over time as the Company continues to build on its strong base of maintenance and advanced services to deliver world-class integrated services.

Several years ago, the Company launched its Diebold Integrated Services® outsourcing business in North America. Initially the scale was small, generating about $5,000 in contract value in year one. In the ensuing years, the Company has achieved substantial growth in this business. During 2011, the Company signed new integrated services contracts exceeding $500,000 compared with $150,000 in 2010. During the first quarter of 2012, the Company signed integrated services contracts in North America alone of approximately $80,000 in total contract value. For example, Denali Alaskan Federal Credit (Denali Alaskan) selected Diebold to replace the credit union's entire fleet with Opteva® ATMs, most of which include deposit automation technology. In addition, Diebold is maximizing Denali Alaskan's ATM uptime and reducing the credit union's maintenance costs by providing remote and on-site services. Another example during the quarter was Hume Building Society in Australia. The financial institution signed an integrated services agreement with Diebold to deploy OpteView® Resolve™ across its fleet of ATMs. Diebold will manage

21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

Hume's fleet of new Opteva ATMs and migrate to Agilis software–lowering costs, increasing security and enhancing the consumer experience. In addition to service and integrated services, another demand driver in the global ATM marketplace continues to be deposit automation. Among the largest U.S. national banks there has been extensive deployment of deposit automation-enabled terminals. Today, approximately 25 percent of ATMs globally are configured for automated deposits. During the first quarter of 2012, the Company saw continued strong demand for deposit automation resulting in financial self-service product order growth well into the double-digit range in North America alone.

In its security business, the Company has an equal, if not greater, potential for a successful integrated services approach. Security challenges and the systems to address them have grown increasingly complex. That has created a greater appetite among financial institutions for outsourcing solutions, particularly in the areas of monitoring, services and software. Today the Company is bringing its expertise back into the financial sector with a focused effort on bank branch and large, complex and technologically demanding projects. The Company has created new customer-focused teams that possess the high levels of specialized expertise in logical and enterprise security required in this business. The Company is leveraging best practices, and some of its best talent, from its FSS integrated services business to build the foundation for a new security outsourcing business. During the first quarter of 2012, the Company signed more than $4,000 in security integrated service contracts and the pipeline for additional integrated services opportunities continues to grow.

Moving forward, the Company intends to create shareholder value by leveraging its growing advantage in software and services capabilities, taking advantage of key market opportunities around the world and further leveraging opportunities in the security business. Many opportunities lie ahead, and the Company will continue to invest in developing new software, services and security solutions, particularly in emerging markets.

Cost savings initiatives, restructuring and other charges

Over the past several years, the Company’s SmartBusiness (SB) initiatives have led to rationalization of product development, streamlined procurement, realignment of the Company’s manufacturing footprint and improved logistics. Building on that success, the Company's SB 300 initiatives in 2011 shifted the focus from reducing cost of sales to lowering operating expenses and are targeted to achieve an additional $100,000 in efficiencies by the end of 2013.

The Company is committed to making the strategic decisions that not only streamline operations, but also enhance its ability to serve its customers. The Company remains confident in its ability to continue to execute on cost-reduction initiatives, deliver solutions that help improve customers’ businesses and create shareholder value. During the the three months ended March 31, 2012 and and 2011, the Company incurred pre-tax net restructuring charges of $1,723 and $11,801, respectively. Restructuring charges in 2012 and 2011 primarily related to the Company's global shared services plan and the Company’s plan for the EMEA reorganization, respectively. The global shared services plan, which entails expanding the Company's current information technology center in India, to create a global shared services center. Expanding the shared services center will require that the Company transfer global back-office work that currently resides in other geographies.

Other charges consist of items that the Company determines are non-routine in nature. Net non-routine expense of $924 and $5,771 impacted the three months ended March 31, 2012 and 2011, respectively. Net non-routine expenses for 2012 and 2011 consisted primarily of legal and compliance costs related to the Global Foreign Corrupt Practices Act (FCPA) investigation.

Business Drivers

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

• demand for new service offerings, including integrated services and outsourcing;

• demand for security products and services for the financial sectors;

• timing of self-service equipment upgrades and/or replacement cycles, including deposit automation in mature markets such as the United States; and

• high levels of deployment growth for new self-service products in emerging markets, such as Asia Pacific.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

RESULTS OF OPERATIONS

The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this quarterly report.

	Three Months Ended
	March 31,
	2012			2011
	Dollars		% of Net sales	Dollars			% of Net sales
Net sales	$	698,491	100.0	$	614,157		100.0
Gross profit	193,240		27.7	149,404			24.3
Operating expenses	138,596		19.8	140,535			22.9
Operating profit	54,644		7.8	8,869			1.4
Income from continuing operations	45,965		6.6	4,146			0.7
Loss from discontinued operations, net of tax	—		—	(11		)	—
Net income attributable to noncontrolling interests	802		0.1	1,634			0.3
Net income attributable to Diebold, Incorporated	45,163		6.5	2,501			0.4

First Quarter 2012 Comparisons to First Quarter 2011

Net Sales

The following table represents information regarding our net sales for the three months ended March 31:

	2012		2011		$ Change		% Change
Net sales	$	698,491	$	614,157	$	84,334	13.7

FSS sales in the first quarter of 2012 improved $97,906 or 21.1 percent compared to the same period of 2011. The increase in FSS sales included a net unfavorable currency impact of $10,864 or 3.0 percent, of which over 50 percent related to the Brazilian real. The following division highlights include the impact of foreign currency. Diebold North America (DNA) increased $104,717 or 60.0 percent due to growth within the U.S. regional and national bank business. Customers in the U.S. regional bank business continue to focus on deposit automation technology and meeting regulatory requirements. Diebold International (DI) sales decreased by $6,811 or 2.4 percent related to the following: Latin America, including Brazil, decreased $11,275 or 8.2 percent, EMEA decreased $6,674 or 9.4 percent and Asia Pacific increased $11,138 or 13.8 percent. The decrease in Latin America, including Brazil, was due to lower volume across most of the geographies. The decrease in EMEA was driven by lower volume in the Middle East in comparison to the same period of the prior year. The improvement in Asia Pacific was attributable to growth throughout most of the region, particularly Thailand and China.

Security solutions sales in the first quarter of 2012 decreased by $8,458 or 5.9 percent compared to the same period of 2011. DNA decreased $10,761 or 8.2 percent compared to the same period of the prior year, partially offset by improvement in DI of $2,303 or 19.6 percent. In DNA, financial security within the U.S. regional and national banks continued to be a challenging environment with lower product volumes compared to the prior year. The DI improvement was influenced by higher volume in Asia Pacific mostly from India as well as growth across a mix of countries in Latin America, including Brazil.

The Brazilian-based lottery systems sales decreased $5,588 or 72.3 percent, a result of fewer units sold in the first quarter of 2012 compared to the same period of 2011.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

Gross Profit

The following table represents information regarding our gross profit for the three months ended March 31:

	2012			2011			$ Change		% Change
Gross profit – services	$	111,469		$	88,484		$	22,985	26.0
Gross profit – products	81,771			60,920			20,851		34.2
Total gross profit	$	193,240		$	149,404		$	43,836	29.3
Gross margin – services	28.1		%	24.3		%
Gross margin – products	27.1		%	24.4		%
Total gross margin	27.7		%	24.3		%

The increase in service gross margin was driven by DNA and EMEA. The favorable margin in DNA was related to cost efficiencies in software-led and maintenance services, a result of productivity improvements related to higher installation volume and better resource leverage. The margin improvement within EMEA was influenced mostly by fewer restructuring charges in the first quarter of 2012. Total service gross margin for the first quarter of 2012 included $669 of restructuring accrual adjustment compared to $6,074 of charges in the same period of 2011. The majority of the restructuring charges in the first quarter of 2011 were related to the EMEA reorganization.

The increase in product gross margin was driven by DNA, particularly the U.S. regional bank business, as the FSS business continues to benefit from the higher volume. Partially offsetting the improvement, the reduction in DI was influenced by lower volume in Brazil as well as continued pricing pressure in the Asia Pacific region.

Operating Expenses

The following table represents information regarding our operating expenses for the three months ended March 31:

	2012		2011		$ Change			% Change
Selling and administrative expense	$	119,795	$	121,111	$	(1,316	)	(1.1	)
Research, development and engineering expense	18,801		19,424		(623		)	(3.2	)
Total operating expenses	$	138,596	$	140,535	$	(1,939	)	(1.4	)

Selling and administrative expense decreased $1,316 or 1.1 percent in the first quarter of 2012 compared to the same period of 2011. The improvement was due to lower non-routine expense, lower restructuring charges and $1,718 favorable currency impact, partially offset by higher compensation and benefits and an increase in consulting expense related to strategic initiatives. Selling and administrative expense in the first quarter of 2012 and 2011 included non-routine expense of $924 and $5,771 respectively, of which the majority pertained to legal, consultative, audit and severance costs related to the FCPA investigation. In addition, selling and administrative expense included $2,387 and $5,604 of restructuring charges in the first quarter of 2012 and 2011, respectively. The majority of the first-quarter 2012 restructuring charges related to the Company's global shared services plan, which entails expanding the Company's current information technology center in India, to create a global shared services center. The first-quarter 2011 restructuring charges related mainly to the EMEA reorganization.

Research, development and engineering expense as a percent of net sales in 2012 and 2011 were 2.7 percent and 3.2 percent, respectively. The decrease as a percent of net sales was influenced by the significant growth in revenue.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

Operating Profit

The following table represents information regarding our operating profit for the three months ended March 31:

	2012			2011			$ Change/		% Change
Operating profit	$	54,644		$	8,869		$	45,775	516.1
Operating profit margin	7.8		%	1.4		%

The increase in operating profit in the first quarter of 2012 compared to the same period of 2011 was influenced by significant growth in service and product revenue, improvement in both service and product gross margins which generated a better rate of return, and the reduction in operating expenses noted above. All of these items combined to produce a 6.4 percent increase in operating profit in the first quarter of 2012 compared to the same period of 2011.

Other Income (Expense)

The following table represents information regarding our other income (expense) for the three months ended March 31:

	2012			2011			$ Change			% Change
Investment income	$	11,955		$	10,898		$	1,057		9.7
Interest expense	(7,608		)	(8,673		)	(1,065		)	(12.3	)
Foreign exchange gain (loss), net	545			(1,046		)	1,591			N/M
Miscellaneous, net	(90		)	23			(113		)	N/M
Other income (expense)	$	4,802		$	1,202		$	3,600		299.5

The improvement in foreign exchange was influenced by favorable currency positions mostly in EMEA, partially offset by a net reduction elsewhere. Investment income in the first quarter of 2012 was favorable compared to the same period of 2011 related to increased investments. Interest expense was favorable compared to the same period in 2011 due to lower interest rates and fees.

Income from Continuing Operations

The following table represents information regarding our income from continuing operations for the three months ended March 31:

	2012			2011			$ Change		% Change
Income from continuing operations	$	45,965		$	4,146		$	41,819	N/M
Percent of net sales	6.6		%	0.7		%
Effective tax rate	22.7		%	58.8		%

The increase in net income from continuing operations in 2012 compared to 2011 was influenced by revenue growth and cost efficiencies, which improved the operating margin paired with the other income noted above. The 36.1 percentage point decrease in the effective tax rate was mainly due to first-quarter 2011 losses in certain EMEA jurisdictions for which no tax benefit was recognized in the first-quarter 2011 effective tax rate. The impact was significant on the first-quarter 2011 effective tax rate because these operating losses were relatively large when compared to income from continuing operations before taxes for the period. Additionally, foreign income tax assessments and interest on uncertain tax positions increased the first-quarter 2011 effective tax rate.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

Segment Analysis and Operating Profit Summary

The following table represents information regarding our revenue by reporting segment for the three months ended March 31:

	2012		2011		$ Change			% Change
DNA	$	399,920	$	305,964	$	93,956		30.7
DI	298,571		308,193		(9,622		)	(3.1	)
Total net sales	$	698,491	$	614,157	$	84,334		13.7

The increase in DNA net sales was driven by continued growth in the FSS business, particularly related to higher product volume in both the U.S. regional and national bank business. The higher product volume stimulated growth in installation services as well as improvement in software-led services. Partially offsetting these increases were lower volumes in Canada as well as security products in both the U.S. regional and national bank business.

The decrease in DI net sales was influenced by a net unfavorable currency impact of $11,077, of which approximately 59 percent related to Brazil. Operationally, DI realized lower FSS and lottery systems volume in Brazil as well as a reduction in volume within EMEA. These decreases were partially offset with higher product and service volumes in Asia Pacific compared to the same period of 2011. The improvement in Asia Pacific was concentrated in Thailand, China and India.

The following table represents information regarding our operating profit (loss) by reporting segment for the three months ended March 31:

	2012			2011			$ Change		% Change
DNA	$	55,297		$	16,152		$	39,145	242.4
DI	(653		)	(7,283		)	6,630		91.0
Total operating profit	$	54,644		$	8,869		$	45,775	516.1

DNA operating profit in the first quarter of 2012 increased by $39,145 compared to the same period of 2011. The increase was driven primarily by higher FSS product volume in the U.S. regional bank business as well as cost efficiencies in software-led services and maintenance related to higher installation volume and better labor productivity. These increases were partially offset with an increase in operating expense related mostly to higher compensation and benefits.

DI operating loss in the first quarter of 2012 decreased by $6,630 compared to the same period of 2011. The majority of the improvement was due to lower restructuring charges in EMEA related to the 2011 reorganization. Furthermore, EMEA operational performance improved in the first quarter of 2012 resulting from the restructuring efforts. Partially offsetting this improvement were lower volumes in Brazil FSS and lottery businesses in comparison to the same period of 2011.

Refer to note 17 to the condensed consolidated financial statements for further details of segment revenue and operating profit.

LIQUIDITY AND CAPITAL RESOURCES

Capital resources are obtained from income retained in the business, borrowings under the Company’s senior notes, committed and uncommitted credit facilities, long-term industrial revenue bonds, and operating and capital leasing arrangements. Management expects that the Company’s capital resources will be sufficient to finance planned working capital needs, research and development activities, investments in facilities or equipment, pension contributions, dividends and any repurchase of the Company’s common shares for at least the next 12 months. As of March 31, 2012, $601,489 or 98.4 percent of the Company’s cash and cash equivalents and short-term investments reside in international tax jurisdictions. Repatriation of these funds could be negatively impacted by potential foreign and domestic taxes. Part of the Company’s growth strategy is to pursue strategic acquisitions. The Company has made acquisitions in the past and intends to make acquisitions in the future. The Company intends to finance any future acquisitions with either cash and short-term investments, cash provided from operations, borrowings under available credit facilities, proceeds from debt or equity offerings and/or the issuance of common shares.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

The following table summarizes the results of our condensed consolidated statement of cash flows for the three months ended March 31:

	2012			2011
Net cash flow (used in) provided by:
Operating activities	$	(26,021	)	$	(90,151	)
Investing activities	(19,783		)	2,197
Financing activities	18,540			35,958
Effect of exchange rate changes on cash and cash equivalents	4,781			2,900
Net decrease in cash and cash equivalents	$	(22,483	)	$	(49,096	)

Net cash used in operating activities was $26,021 for the three months ended March 31, 2012, a decrease of $64,130 from $90,151 for the same period in 2011. Cash flows from operating activities are generated primarily from operating income and managing the components of working capital. Cash flows from operating activities during the three months ended March 31, 2012, compared to the same period of 2011, were positively impacted by a $41,830 increase in net income, as well as favorable changes in accounts payable, deferred revenue and certain other assets and liabilities. These changes were partially offset by unfavorable changes in trade receivables, inventories, prepaid expenses and other current assets.

Net cash used in investing activities was $19,783 for the three months ended March 31, 2012 compared to net cash provided by investing activities of $2,197 for the same period in 2011. The $21,980 change was primarily due to $a 14,921 change in net investment activity and a $2,900 decrease in collections on purchased finance receivables, as well as increases in capital expenditures and certain other assets.

Net cash provided by financing activities was $18,540 for the three months ended March 31, 2012, a decrease of $17,418 from $35,958 for the same period of 2011. The change was primarily due to a $41,967 decrease in net borrowings, partially offset by a decrease in share repurchases of $18,566 and an increase in the issuance of common shares of $5,885.

As of March 31, 2012, the Company had various international short-term uncommitted lines of credit with borrowing limits of $110,700. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at March 31, 2012 was $71,419.

In June 2011, the Company entered into a five-year credit facility, which replaced its previous credit facility. As of March 31, 2012, the Company had borrowing limits under the credit facility totaling $500,000. Under the terms of the credit facility agreement, the Company has the ability, subject to various approvals, to increase the borrowing limits by $250,000. Up to $50,000 of the revolving credit facility is available under a swing line subfacility. The weighted-average interest rate on outstanding credit facility borrowings as of March 31, 2012 and December 31, 2011 was 1.44 percent and 1.49 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the new credit facility as of March 31, 2012 was $197,000.

In March 2006, the Company issued senior notes in an aggregate principal amount of $300,000 with a weighted-average fixed interest rate of 5.50 percent. The maturity dates of the senior notes are staggered, with $75,000, $175,000 and $50,000 becoming due in 2013, 2016 and 2018, respectively. Additionally, the Company entered into a derivative transaction to hedge interest rate risk on $200,000 of the senior notes, which was treated as a cash flow hedge. This reduced the effective interest rate from 5.50 percent to 5.36 percent. As of March 31, 2012, although it is due within twelve months, $75,000 of the senior notes remain classified as long-term debt because of the Company's intent and ability to fund the repayment using amounts available under its credit facility, unless an alternative source of financing with more favorable terms is available upon maturity.

The Company’s debt agreements contain various restrictive financial covenants, including net debt to capitalization and net interest coverage ratios. As of March 31, 2012, the Company was in compliance with the financial covenants in its debt agreements.

Dividends The Company paid dividends of $18,094 and $18,650 in the three months ended March 31, 2012 and 2011, respectively. Quarterly dividends were $0.285 and $0.280 per share for 2012 and 2011, respectively.

All contractual cash obligations with initial and remaining terms in excess of one year and contingent liabilities remained generally unchanged at March 31, 2012 compared to December 31, 2011.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

Off-Balance Sheet Arrangements The Company enters into various arrangements not recognized in the condensed consolidated balance sheets that have or could have an effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources. The principal off-balance sheet arrangements that the Company enters into are guarantees and sales of finance receivables. The Company provides its global operations guarantees and standby letters of credit through various financial institutions to suppliers, regulatory agencies and insurance providers. If the Company is not able to make payment, the suppliers, regulatory agencies and insurance providers may draw on the pertinent bank. Refer to note 12 to the condensed consolidated financial statements 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 condensed consolidated statements of income.

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 preparation of these financial statements 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, guarantee obligations and assumptions used in the calculation of income taxes, pension and postretirement benefits and customer incentives, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. Management monitors the economic conditions and other factors and will adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Management believes there have been no significant changes during the three months ended March 31, 2012 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, 2011.

FORWARD-LOOKING STATEMENT DISCLOSURE

In this quarterly report on Form 10-Q, statements that are not reported financial results or other historical information are “forward-looking statements.” Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements relate to, among other things, the Company’s future operating performance, the Company’s share of new and existing markets, the Company’s short- and long-term revenue and earnings growth rates, the Company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the Company’s manufacturing capacity. The use of the words “will,” “believes,” “anticipates,” “plans,” “projects,” “expects,” “intends” and similar expressions is intended to identify forward-looking statements that have been made and may in the future be made by or on behalf of the Company.

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:

• 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;

• 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, including Brazil, where a significant portion of the Company's revenue is derived;

• global economic conditions, including any additional deterioration and disruptions in the financial markets, including bankruptcies, restructurings or consolidations of financial institutions, which could reduce our customer base and/or

28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS as of March 31, 2012

DIEBOLD, INCORPORATED AND SUBSIDIARIES

(unaudited)

(dollars in thousands, except per share amounts)

adversely affect our customers’ ability to make capital expenditures, as well as adversely impact the availability and cost of credit;

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

• the Company’s ability to maintain effective internal controls;

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

• unanticipated litigation, claims or assessments, as well as the impact of any current or pending lawsuits;

• variations in consumer demand for financial self-service technologies, products and services;

• potential security violations to the Company's information technology systems;

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

• the amount and timing of repurchases of the Company’s common shares, if any;

• the outcome of the Company’s global FCPA review and any actions taken by government agencies in connection with the Company’s self disclosure, including the pending SEC investigation; and

• the Company’s ability to achieve benefits from its cost-reduction initiatives and other strategic changes, including its restructuring actions.

29

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to the Company’s annual report on Form 10-K for the year ended December 31, 2011. There has been no material change in this information since December 31, 2011.

ITEM 4: CONTROLS AND PROCEDURES

This quarterly report includes the certifications of our chief executive officer (CEO) and chief financial officer (CFO) required by Rule 13a-14 of the Exchange Act. See Exhibits 31.1 and 31.2. This Item 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. Refer to Note 1 in the notes to condensed consolidated financial statements.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s 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, management, under the supervision and with the participation of the CEO and CFO, conducted an evaluation of disclosure controls and procedures. Based on this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2012.

No change was made to the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

(dollars in thousands)

At March 31, 2012, the Company was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the Company’s condensed consolidated financial statements would not be materially affected by the outcome of those legal proceedings, commitments, or asserted claims.

In addition to the routine legal proceedings noted above the Company was a party to the lawsuits described below at March 31, 2012:

Securities and Shareholder Actions

On June 30, 2010, a shareholder filed a putative class action complaint in the United States District Court for the Northern District of Ohio alleging violations of the federal securities laws against the Company, certain current and former officers, and the Company’s independent auditors (Louisiana Municipal Police Employees Retirement System v. KPMG et al., No. 10-CV-1461). The complaint seeks unspecified compensatory damages on behalf of a class of persons who purchased the Company’s stock between June 30, 2005 and January 15, 2008 and fees and expenses related to the lawsuit. The complaint generally relates to the matters set forth in the court documents filed by the SEC in June 2010 finalizing the settlement of civil charges stemming from the investigation of the Company conducted by the Division of Enforcement of the SEC (SEC Settlement).

On October 19, 2010, an alleged shareholder of the Company filed a shareholder derivative lawsuit in the Stark County, Ohio, Court of Common Pleas, alleging claims on behalf of the Company against certain current and former officers and directors of the Company for breach of fiduciary duty, unjust enrichment and corporate waste (Levine v. Geswein et al., Case No. 2010-CV-3848). The complaint generally relates to the matters set forth in the court documents filed by the SEC in June 2010 in connection with the SEC Settlement, and asserts that the defendants are liable to the Company for alleged damages associated with the SEC investigation, settlement, and related litigation. It also asserts that alleged misstatements in the Company’s publicly issued financial statements caused the Company’s common stock to trade at artificially inflated prices between 2004 and 2006, and that defendants harmed the Company by causing it to repurchase its common stock in the open market at inflated prices during

30

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

that period. The complaint seeks an award of money damages against the defendants and in favor of the Company in an unspecified amount, as well as unspecified equitable and injunctive relief and attorneys’ fees and expenses.

Management believes any possible loss or range of loss associated with the putative federal securities class action cannot be estimated. The parties to the shareholder derivative lawsuit have agreed to a settlement of that action. The settlement, which requires court approval before it will become effective, is not anticipated to have a material impact on the Company's financial position or results of operations.

Global Foreign Corrupt Practices Act (FCPA) Review

During the second quarter of 2010, while conducting due diligence in connection with a potential acquisition in Russia, the Company identified certain transactions and payments by its subsidiary in Russia (primarily during 2005 to 2008) that potentially implicate the FCPA, particularly the books and records provisions of the FCPA. As a result, the Company conducted a global internal review and collected information related to its global FCPA compliance. In the fourth quarter of 2010, the Company identified certain transactions within its Asia Pacific operation that occurred over the past several years that may also potentially implicate the FCPA. The Company continues to monitor its ongoing compliance with the FCPA.

The Company has voluntarily self-reported its findings to the SEC and the U.S. Department of Justice (DOJ) and is cooperating with these agencies in their review. The Company was previously informed that the SEC's inquiry had been converted to a formal, non-public investigation. The Company also received a subpoena for documents from the SEC and a voluntary request for documents from the DOJ in connection with the investigation. Because the SEC and DOJ investigations are ongoing, there can be no assurance that their review will not find evidence of additional transactions that potentially implicate the FCPA. At this time, the Company cannot predict the results of the government investigations and future resolution of these matters with the SEC and the DOJ could result in changes in management's estimates of losses, which could be material to the Company’s consolidated financial statements.

ITEM 1A: RISK FACTORS

Refer to the Company’s annual report on Form 10-K for the year ended December 31, 2011.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Information concerning the Company’s share repurchases made during the first quarter of 2012:

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)
January	806	$	30.14	—	2,426,177
February	71,460	38.44		—	2,426,177
March	3,157	35.86		—	2,426,177
Total	75,423	38.24		—

(1) All shares were surrendered or deemed surrendered to the Company in connection with the Company’s share-based compensation plans.

(2) The total number of shares repurchased as part of the publicly announced share repurchase plan since its inception was 13,450,772 as of March 31, 2012. The plan was approved by the Board of Directors in 1997. The Company may purchase shares from time to time in open market purchases or privately negotiated transactions. The Company may make all or part of the purchases pursuant to accelerated share repurchases or Rule 10b5-1 plans. The plan has no expiration date. The following table provides a summary of Board of Directors approvals to repurchase the Company’s outstanding common shares:

	Total Number of Shares Approved for Repurchase
1997	2,000,000
2004	2,000,000
2005	6,000,000
2007	2,000,000
2011	1,876,949
2012	2,000,000
	15,876,949

31

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4: MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5: OTHER INFORMATION

On December 7, 2011, the Compensation Committee of the Company adopted a Senior Leadership Severance Policy (the Policy) for certain members of senior management, including all of the Company's named executive officers. The Policy was adopted in order to provide greater consistency for executives who are involuntarily terminated other than for cause or upon certain constructive terminations, in each case separate from a change-in-control, and also to provide a consistent approach to ensuring reinforcement of an executive's confidentiality, non-competition and non-solicitation obligations.

The Policy provides for the following:

• Severance of two times base salary and target bonus for the CEO, and one and one-half times salary and target bonus for the other named executive officers, as well as a pro-rata award bonus payment, to the extent such awards are ultimately earned based on the Company's performance;

• Two years of continued participation in our employee health and welfare benefit plans for our CEO, and one and one-half years of continued participation for the other named executive officers (excluding perquisites and any qualified or non-qualified pension or 401(k) plans);

• Lapse of the restrictions on outstanding restricted shares;

• Vesting of all outstanding non-vested options, which shall remain exercisable for three months;

• Pro-rata vesting of all outstanding RSUs and performance shares (to the extent such awards are earned); and

• Professional outplacement services for up to two years.

In order to accept severance benefits under the Policy, the executive is required to sign a release of claims and acknowledgment of certain restrictive covenants, including non-competition, non-solicitation and confidentiality protections for the benefit of the Company. When triggered, these restrictive covenants and other protections will be enforceable for two years for the CEO, and for one and one-half years for the other named executive officers.

32

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (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 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 Form 10-K for the year ended December 31, 1998 (Commission File No. 1-4879)
10.31	Diebold, Incorporated Senior Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives)
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 Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

33

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

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, INCORPORATED
Date: April 30, 2012	By:	/s/ Thomas W. Swidarski
		Thomas W. Swidarski
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: April 30, 2012	By:	/s/ Bradley C. Richardson
		Bradley C. Richardson
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

34

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q as of March 31, 2012

EXHIBIT INDEX

EXHIBIT NO.	DOCUMENT DESCRIPTION
10.31	Diebold, Incorporated Senior Leadership Severance Plan (For Tier I, Tier II, and Tier III Executives)
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 Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

35

EX-10.31

EXHIBIT 10.31

Senior Leadership Severance Plan
(For Tier I, Tier II, and Tier III Executives)

Diebold, Incorporated

Contents

Article 1. Establishment and Term of the Plan 1

Article 2. Definitions 1

Article 3. Severance Benefits 4

Article 4. Confidentiality and Noncompetition 6

Article 5. Legal Fees and Notice 7

Article 6. Successors and Assignment 8

Article 7. Miscellaneous 8

Appendix A-1

Diebold, Incorporated Senior Leadership Severance Plan
(For Tier I, Tier II, and Tier III Executives)

Article 1. Establishment and Term of the Plan

1.1    Establishment of the Plan. Diebold, Incorporated (hereinafter referred to as the “Company”) hereby establishes a severance plan to be known as the “Diebold Incorporated Senior Leadership Severance Plan” (the “Plan”). The Plan provides severance benefits to certain employees of the Company (“Executives”) upon certain terminations of employment from the Company. Eligibility to participate in the Plan is determined by career level and is subject to approval by the Compensation Committee of the Board. The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management to their assigned duties without distraction in circumstances arising from the possibility of certain terminations.

1.2    Initial Term. This Plan will commence on (the “Effective Date”) and shall continue in effect for a period of three (3) years (the “Initial Term”).

1.3    Successive Periods. The term of this Plan shall automatically be extended for one (1) additional year at the end of the Initial Term, and then again after each successive one (1) year period thereafter (each such one (1) year period following the Initial Term is referred to as a “Successive Period”). However, the Committee may terminate this Plan entirely or terminate any individual Executive’s participation in the Plan at the end of the Initial Term, or at the end of any Successive Period thereafter, by giving all Executives (or select Executives, if terminating select Executives’ participation in the Plan) written notice of intent not to renew, delivered at least three (3) months prior to the end of such Initial Term or Successive Period. If such notice is properly delivered by the Company, this Plan, along with all corresponding rights, duties, and covenants, shall automatically expire at the end of the Initial Term or Successive Period then in progress.

Article 2. Definitions

Whenever used in this Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized.

(a) “Base Salary” means the Executive’s annual rate of salary, whether or not deferred as of the Effective Date of Termination.

(b) “Beneficiary” means the persons or entities designated or deemed designated by the Executive pursuant to Section 7.5 herein.

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” shall mean the Executive’s”

(i) Willful failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially p

erformed his duties, and the Executive has failed to remedy the situation with fifteen (15) business days of such written notice from the Company;

(ii) Willful gross negligence in the performance of the Executive’s duties;

(iii) Conviction of, or plea of guilty or nolo contendere, to any felony or a lesser crime or offense which, in the reasonable opinion of the Company, could adversely affect the business or reputation of the Company;

(iv) Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise;

(v) Willful violation of any provision of the Company’s code of conduct;

(vi) Willful violation of any of the covenants contained in Article 4 of this Plan, as applicable;

(vii) Act of dishonesty resulting in, or intended to result in, personal gain at the expense of the Company; or

(viii) Engaging in any act that is intended to harm, or may be reasonably expected to harm, the reputation, business prospects, or operations of the Company.

For purposes of this paragraph (d), no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon: (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

For purposes of this Plan, there shall be no termination for Cause pursuant to subsections (i) through (viii) above, unless a written notice, containing a detailed description of the grounds constituting Cause hereunder, is delivered to the Executive stating the basis for the termination. Upon receipt of such notice, the Executive shall be given thirty (30) days to fully cure (if such violation, neglect, or conduct is capable of cure) the violation, neglect, or conduct that is the basis of such claim.

(e) “Code” means the United States Internal Revenue Code of 1986, as amended, and any successors thereto.

(f) “Committee” means the Compensation Committee of the Board or any other committee appointed by the Board to perform the functions of the Compensation Committee.

(g) “Company” means Diebold, Incorporated, an Ohio corporation, or any successor thereto as provided in Article 6 herein.

(h) “Disability” shall have the same meaning ascribed to that word in the long-term disability plan in effect for senior executives of the Company and its Subsidiaries.

(i) “Effective Date” means the commencement date of this Plan as specified in Section 1.2 of this Plan.

(j) “Effective Date of Termination” means the date on which a Qualifying Termination occurs, as defined hereunder, which triggers the payment of Severance Benefits hereunder.

(k) “Good Reason” shall mean the occurrence of any one or more of the following without the Executive’s express written consent:

(i)    The Company materially reduces the amount of the Executive’s then current Base Salary or the target for his annual bonus; or

(ii)    The Company requires the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office as of the Effective Date; or

(iii)    The failure of the Company to obtain in writing the obligation to perform or be bound by the terms of this Plan by any successor to the Company or a purchaser of all or substantially all of the assets of the Company; or

(iv) Any other action or inaction by the Company that constitutes a material breach by the Company of the terms and conditions of this Plan.

For purposes of this Plan, neither the change in the Executive’s title, authority, duties, or responsibilities nor the assignment of duties to the Executive that are inconsistent with his position shall constitute “Good Reason” and further, the Executive is not entitled to assert that his termination is for Good Reason unless the Executive gives the Company written notice of the event or events that are the basis for such claim within ninety (90) days after the event or events occur, describing such claim in reasonably sufficient detail to allow the Company to address the event or events and a period of not less than thirty (30) days after to cure the alleged condition.

(l) “Notice of Termination” shall mean a written notice that shall indicate the specific termination provision in this Plan relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

(m) “Qualifying Termination” means a termination of employment under the following circumstances:

(i) An involuntary termination of the Executive’s employment by the Company for reasons other than Cause pursuant to a Notice of Termination delivered to the Executive by the Company; or

(ii) A voluntary termination by the Executive for Good Reason pursuant to a Notice of Termination delivered to the Company by the Executive.

Termination of employment shall have the same meaning as “separation from service” within the meaning of Treasury Regulation §1.409A‑1(h).

(n) “Severance Benefits” means the payment of severance compensation as provided in Article 3 herein.

Article 3. Severance Benefits

3.1    Right to Severance Benefits and Impact on Long‑Term Incentives.

(a) Severance Benefits. The Executive shall be entitled to receive from the Company Severance Benefits, as described in Section 3.2 herein, if a Qualifying Termination of the Executive’s employment has occurred.

(b) No Severance Benefits. The Executive shall not be entitled to receive Severance Benefits if the Executive’s employment with the Company ends for reasons other than a Qualifying Termination.

(c) General Release and Acknowledgement of Restrictive Covenants. As a condition to receiving Severance Benefits under Section 3.2 herein, no later than sixty (60) days after the date of the Executive’s Qualifying Termination, (i) the Executive shall be obligated to execute a general release of claims in favor of the Company, its current and former affiliates and stockholders, and the current and former directors, officers, employees, and agents of the Company in a form acceptable to the Company, (ii) the Executive must execute a notice acknowledging the restrictive covenants in Article 4, and (iii) the Executive’s general release shall have become irrevocable.

3.2     Description of Severance Benefits. In the event the Executive becomes entitled to receive Severance Benefits as provided in Section 3.1(a) herein, the Company shall provide the Executive with the following, subject to Section 3.2(g) herein:

(a) A lump‑sum amount, paid sixty (60) calendar daysfollowing the Effective Date of Termination, equal to the Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination; provided that if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.

(b) A lump‑sum amount, paid within the sixty (60) calendar days following the Effective Date of Termination, equal to: (i) two (2) for Tier I Executives, (ii) one and one‑half (1.5) for Tier II Executives, and (iii) one (1) for Tier III Executives, multiplied by the sum of the following: (A) the Executive’s Base Salary, and (B) the Executive’s annual target bonus opportunity in the year of termination; provided that if the sixty (60) day period begins in an Executive’s taxable year and ends in the Executive’s subsequent taxable year, the payment will be made in the subsequent taxable year.

(c) A lump‑sum amount, if any, paid within two and one‑half (2 ½) months after the end of the calendar year that includes the Effective Date of Termination, equal to the actual bonus that would have been payable to the Executive for the calendar year that includes the Effective Date of Termination based on actual performance if the Executive had remained employed through the end of such calendar year; provided however, that such amount shall be adjusted on a pro rata basis based on the number of days the Executive was actually employed during the bonus plan year in which the Qualifying Termination occurs.

(d) Continuation of the Executive’s medical, dental, vision, and Company-paid basic life insurance coverage for: (i) two (2) years for Tier I Executives, or (ii) one and one-half (1.5) years for Tier II, and one (1) year for Tier III Executives. These benefits shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefits shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination. Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Code, then the benefits provided under this Section 3.2(d) which the Company determines constitute the payment of deferred compensation (within the meaning of Section 409A of the Code) shall be provided at the Executive’s sole cost during the six (6) month period immediately after the Effective Date of Termination, and as soon as administratively practicable following the expiration of such six (6) month period, the Company shall reimburse the Executive for the portion of such costs payable by the Company hereunder.

Notwithstanding the above, these medical, dental, vision and Company-paid basic life insurance benefits shall be discontinued prior to the end of the stated continuation period in the event the Executive receives substantially similar benefits from a subsequent employer, as determined solely by the Company in good faith. For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

(e) Treatment of outstanding long‑term incentives shall be in accordance with Section 3.3 herein.

(f) The Company will assist the Executive in finding other employment opportunities by providing to him, at the Company’s limited expense, professional outplacement services through the provider of the Company’s choice. Such outplacement services shall terminate when the Executive finds other employment. However, in no event shall such outplacement services continue for more than two (2) years following the Effective Date of Termination.

(g) Notwithstanding anything in this Plan to the contrary, if the Executive constitutes a “specified employee” as defined and applied in Section 409A of the Code, as of the Effective Date of Termination, to the extent payments made under Sections 3.2(a), (b), or (c) constitute deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, payments may not commence to be paid to Executive until the earlier of: (i) the first day following the six (6) month anniversary of the Executive’s Effective Date of Termination, or (ii) the Executive’s date of death; provided, however, that any payments delayed during this six (6) month period shall be paid in a lump sum as soon as administratively practicable following the six (6) month

anniversary of the Executive’s Effective Date of Termination. For purposes of Section 409A of the Code, each payment due under Sections 3.2(a), (b), and (c) immediately above shall be considered a separate payment.

For purposes of the preceding paragraph, and to the extent permitted by Section 409A of the Code, during the six (6) months following the Executive’s Effective Date of Termination, the Company shall pay any amounts required to be paid by this Section 3.2 in accordance with the payment schedules specified in this Section 3.2 to the extent that such payments would not exceed the limitations of the “short‑term deferral” and “separation pay plan” exceptions provided by Treasury Regulations and other guidance issued with respect to Code Section 409A. Any payments in excess of these limitations shall be paid after the six (6) month period described in accordance with the preceding paragraph.

3.3    Impact on Long‑Term Incentives. Upon a Qualifying Termination that entitles the Executive to Severance Benefits as provided in Section 3.1(a) herein:

(a) All outstanding and unvested stock options and stock appreciation rights (“SARs”) shall immediately vest and shall remain exercisable for a period of three (3) months from the Effective Date of Termination or the last day of the option term, whichever occurs first. Additionally, from time to time, the Company may declare "blackout" periods with respect to designated employees of the Company during which such employees are prohibited from engaging in certain transactions in Company securities. In the event that the scheduled expiration date of this option and SAR shall fall within a blackout period that has been declared by the Company and that applies to an option/SAR holder, then the expiration date shall automatically, and without further notice to option/SAR holder, be extended until such time as fifteen (15) consecutive business days have elapsed after the scheduled expiration date without interruption by any blackout period that applied to the option/SAR holder.

(b) All restrictions on unvested shares of restricted stock and unvested restricted stock units shall immediately lapse, with such shares and units becoming nonforfeitable on a pro rata basis, as determined under this subparagraph (b). The pro rata award shall equal the product of (x) and (y) where (x) is the number of restricted stock shares or units subject to the award, and (y) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the restriction period (with any partial months counting as a full month for this purpose) and the denominator of which is the number of months in the restriction period.

(c) Unearned performance shares and performance units shall be paid out on a pro rata basis, as determined under this subparagraph (c). The pro rata award shall equal the product of (x) and (y) where (x) is the award the Executive would have earned based on actual performance measured as of the end of the respective performance period and (y) is a fraction, the numerator of which is the number of calendar months that the Executive was employed by the Company during the performance period (with any partial month counting as a full month for this purpose) and the denominator of which is the number of months in the performance period.

If there is any inconsistency between the terms of the Plan and the terms of a separate outstanding award agreement, the Plan’s terms shall completely supersede and replace the conflicting terms of the

underlying award agreement.

Article 4. Confidentiality and Noncompetition

In the event the Executive becomes entitled to receive Severance Benefits as provided in Section 3.2 herein, the following shall apply:

(a) Noncompetition. During the Executive’s Employment and for a period of: (i) two (2) years for Tier I Executives, (ii) one and one-half (1 ½) years for Tier II Executives, and (iii) one (1) year for Tier III Executives after the Effective Date of Termination, the Executive shall not: (A) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (B) serve as an employee, agent, partner, shareholder, director, or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity that he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Plan, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).

(b) Confidentiality. The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. The Executive shall not at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment), nor use in any manner, either during the Executive’s employment or after termination for any reason, any Protected Information, or cause any such Protected Information of the Company to enter the public domain.

For purposes of this Plan, “Protected Information” means trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including, but not limited to, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services that may be developed from time to time by the Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Plan), approved for release by the Company or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.

(c) Nonsolicitation. During the Executive’s employment and for a period of: (i) three (3) years for Tier I Executives, (ii) two and one-half (2 ½) years for Tier II Executives, and (iii) two (2) year for Tier III Executives after the Effective Date of Termination, the Executive shall not: (A) employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company; or (B) solicit suppliers or customers of the Company or induce any such person to terminate his, her, or its relationship with the Company.

(d) Cooperation. Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.

(e) Nondisparagement. At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.

(f) Severability. If any provision of Article 4 is held to be unenforceable, then this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the rest of Article 4, valid and enforceable. If a court declines to amend the provisions of Article 4 as provided herein, the invalidity or unenforceability of any provision in Article 4 shall not affect the validity or enforceability of the remaining provisions in Article 4, which shall be enforced as if the offending provision had not been included in this Plan.

Article 5. Legal Fees and Notice

5.1    Payment of Legal Fees. Except as otherwise agreed to by the parties, the Company shall pay the Executive for costs of litigation or other disputes including, without limitation, reasonable attorneys’ fees incurred by the Executive in asserting any claims or defenses under this Plan, except that the Executive shall bear his own costs of such litigation or disputes (including, without limitation, attorneys’ fees) if the court (or arbitrator) finds in favor of the Company with respect to any claims or defenses asserted by the Executive.

5.2    Notice. Any notices, requests, demands, or other communications provided for by this Plan shall be sufficient if in writing and if sent by registered or certified mail to the Executive at the last address he or she has filed in writing with the Company or, in the case of the Company, at its principal offices.

Article 6. Successors and Assignment

6.1    Successors to the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform under this Plan in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, the terms of this Plan shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Plan.

6.2    Assignment by the Executive. This Plan shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him or her hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the Executive’s Beneficiary. If the Executive has not named a Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 7. Miscellaneous

7.1    Employment Status. Except as may be provided under any other agreement between the Executive and the Company, the employment of the Executive by the Company is “at will” and may be terminated by either the Executive or the Company at any time, subject to applicable law.

7.2    Entire Plan. Except for any change in control related separation or severance pay plans, agreements, or understandings, oral or written, between the parties hereto, this Plan supersedes all other separation or severance pay plans, prior agreements, or understandings, oral or written, between the parties hereto, with respect to the subject matter hereof, and constitutes the entire agreement of the parties with respect thereto. The Severance Benefits provided under Section 3.2 herein, are not intended to duplicate severance benefits (including change in control related severance benefits) under any other severance plan, arrangement, or employment agreement maintained by the Company. In the event an Executive qualifies for benefits under this Plan and under any other severance plan, arrangement, or employment agreement of the Company, the Severance Benefits under this Plan shall be reduced dollar for dollar by the amount or single-sum value of the severance benefits under any other such severance plan, arrangement, or agreement.

The Company reserves the right to provide additional benefits to the Executive outside of the Plan. Any such additional benefits will not be considered provided pursuant to this Plan, but unless expressly provided otherwise, any such additional benefits will offset and reduce the Severance Benefits provided under this Plan.

The amount of any reduction or offset under this Section 7.2 shall not change after a change in control except to the extent that such change does not change the time or form of payment of “deferred compensation” within the meaning of Section 409A of the Code.

7.3    Severability. In the event that any provision or portion of this Plan shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Plan shall be unaffected thereby and shall remain in full force and effect.

7.4    Tax Withholding. The Company may withhold from any benefits payable under this Plan all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

7.5    Beneficiaries. The Executive may designate one (1) or more persons or entities as the primary and/or contingent beneficiaries of any amounts to be received under this Plan. Such designation must be in the form of a signed writing acceptable to the Board or the Board’s designee. The Executive may make or change such designation at any time.

7.6    Payment Obligation Absolute. The Company’s obligation to make the payments provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else.

Except as provided in Section 3.2(d) of this Plan, the Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Plan, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s

obligations to make the payments and arrangements required to be made under this Plan.

7.7    Contractual Rights to Benefits. Subject to approval and ratification by the Board of Directors, this Plan establishes and vests in the Executive a contractual right to the benefits to which he or she is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

7.8    Modification. No provision of this Plan may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by each and every Executive then covered by the Plan and by an authorized member of the Committee, or by the respective parties’ legal representatives and successors.

7.9    Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

7.10    Section 409A of the Code. This Plan is intended to comply with, or be exempt from, Section 409A of the Code (to the extent applicable). This Plan shall be interpreted and administered consistent with this intent. No reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit and the amount available for reimbursement, or in-kind benefits to be provided, during any calendar year shall not affect the amount available for reimbursement, or in-kind benefits to be provided, in a subsequent calendar year. Any reimbursement to which the Executive is entitled hereunder shall be made no later than the last day of the calendar year following the calendar year in which such expenses were incurred.

7.11    Applicable Law. To the extent not preempted by the laws of the United States, the laws of the state of Ohio shall be the controlling law in all matters relating to this Plan.

Appendix:

Tier I Executives

Tier II Executives

Tier III Executives

EX-31.1

EXHIBIT 31.1

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas W. Swidarski, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Diebold, Incorporated;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2012	/s/ Thomas W. Swidarski
	Thomas W. Swidarski
	President and Cheif Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradley C. Richardson, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Diebold, Incorporated;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2012	/s/ Bradley C. Richardson
	Bradley C. Richardson
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Diebold, Incorporated (Company) for the quarter ended March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (Report), I, Thomas W. Swidarski, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

1 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

April 30, 2012	/s/ Thomas W. Swidarski
	Thomas W. Swidarski
	President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

DIEBOLD, INCORPORATED AND SUBSIDIARIES

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Diebold, Incorporated (Company) for the quarter ended March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (Report), I, Bradley C. Richardson, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

1 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

April 30, 2012	/s/ Bradley C. Richardson
	Bradley C. Richardson
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

XML

Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Income used in basic and diluted earnings per share:
Income from continuing operations, net of tax	$ 45,163	$ 2,512
Loss from discontinued operations, net of tax	0	(11)
Net income attributable to Diebold, Incorporated	$ 45,163	$ 2,501
Denominator (in thousands):
Weighted-average number of common shares used in basic earnings per share	62,725	65,762
Effect of dilutive shares	608	468
Weighted-average number of shares used in diluted earnings per share	63,333	66,230
Basic earnings per share
Net Income from continuing operations	$ 0.72	$ 0.04
Loss from discontinued operations	$ 0.00	$ 0.00
Net income attributable to Diebold, Incorporated	$ 0.72	$ 0.04
Diluted earnings per share
Net Income from continuing operations	$ 0.71	$ 0.04
Loss from discontinued operations	$ 0.00	$ 0.00
Net income attributable to Diebold, Incorporated	$ 0.71	$ 0.04
Anti-dilutive shares (in thousands):
Anti-dilutive shares not used in calculating diluted weighted-average shares	1,596	2,023

XML

Guarantees and Product Warranties (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011		Dec. 31, 2011
Changes in warranty liability balance
Beginning Balance	$ 63,355		$ 78,313
Current period accruals	15,934	[1]	18,411	[1]
Current period settlements	(14,608)		(19,252)
Ending Balance	64,681		77,472
Guarantees and Product Warranties (Textuals)
Carrying value of the bonds	11,900				11,900
Maximum future payment obligations	77,906				71,321
Standby letters of credit	23,435				22,623
Liability associated with guarantee	$ 0				$ 0

[1] includes the impact of foreign exchange rate fluctuations

XML

Allowance for Credit Losses (Details Textuals) (USD $) In Thousands, unless otherwise specified			3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2012 Minimum [Member]	Mar. 31, 2012 Maximum [Member]
Allowance for credit losses (Textuals)
Period required for considering financing receivable as non accrual status			60 days	89 days
The recorded investment in past-due finance lease receivables on nonaccrual status	$ 2,813	$ 1,740
Interest accrued in the recorded investment in finance lease receivable	0	114
The recorded investment in impaired notes receivable	2,047	2,047
The recorded investment in impaired notes related allowance	$ 2,047	$ 2,047
Past Due Period Of Financing Receivable Accruing Interest			90 days
Period for placing financing receivables on non-accrual status			89 days

XML

Derivative Instruments and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Gain (loss) recognized on non-designated derivative instruments:
Gain (loss) recognized on non-designated derivative instruments, total	$ (3,825)	$ (8,066)
Foreign Exchange Contract [Member] | Interest expense [Member]
Gain (loss) recognized on non-designated derivative instruments:
Gain (loss) recognized on non-designated derivative instruments, total	(1,391)	(1,849)
Foreign Exchange Contract [Member] | Foreign exchange gain (loss), net [Member]
Gain (loss) recognized on non-designated derivative instruments:
Gain (loss) recognized on non-designated derivative instruments, total	$ (2,434)	$ (6,217)

XML

Allowance for Credit Losses - Summary of Allowance for Credit Losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Allowance for credit losses and recorded investment in financing receivables
Financing Receivable, Allowance for Credit Losses	$ 2,272	$ 2,257
Financing Receivable, Allowance for Credit Losses, Provisions	0
Financing Receivable, Allowance for Credit Losses, Recoveries	15
Financing Receivable, Allowance for Credit Losses, Charge-offs	0
Allowance resulting from individual impairment evaluation	2,272
Allowance resulting from collective impairment evaluation	0
Recorded investment in financing receivables
Balance individually evaluated for impairment	114,953
Balance collectively evaluated for impairment	0
Finance Leases Financing Receivable [Member]
Allowance for credit losses and recorded investment in financing receivables
Financing Receivable, Allowance for Credit Losses	225	210
Financing Receivable, Allowance for Credit Losses, Provisions	0
Financing Receivable, Allowance for Credit Losses, Recoveries	15
Financing Receivable, Allowance for Credit Losses, Charge-offs	0
Allowance resulting from individual impairment evaluation	225
Allowance resulting from collective impairment evaluation	0
Recorded investment in financing receivables
Balance individually evaluated for impairment	100,819
Balance collectively evaluated for impairment	0
Notes Receivable [Member]
Allowance for credit losses and recorded investment in financing receivables
Financing Receivable, Allowance for Credit Losses	2,047	2,047
Financing Receivable, Allowance for Credit Losses, Provisions	0
Financing Receivable, Allowance for Credit Losses, Recoveries	0
Financing Receivable, Allowance for Credit Losses, Charge-offs	0
Allowance resulting from individual impairment evaluation	2,047
Allowance resulting from collective impairment evaluation	0
Recorded investment in financing receivables
Balance individually evaluated for impairment	14,134
Balance collectively evaluated for impairment	$ 0

XML

Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for three months ended March 31:

	Pension Benefits						Other Benefits
	2012			2011			2012			2011
Components of net periodic benefit cost
Service cost	$	2,862		$	2,713		$	—		$	—
Interest cost	7,958			7,872			204			233
Expected return on plan assets	(10,205		)	(10,183		)	—			—
Amortization of prior service cost	65			65			(129		)	(129		)
Recognized net actuarial loss	4,211			2,406			121			97
Net periodic pension benefit cost	$	4,891		$	2,873		$	196		$	201

XML

Restructuring and Other Charges - Restructuring Charges By Statement of Income Account (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Schedule of restructuring and related costs
Restructuring Charges	$ 1,723	$ 11,801
Cost Of Sales Services [Member]
Schedule of restructuring and related costs
Restructuring Charges	(669)	6,074
Cost Of Sales Products [Member]
Schedule of restructuring and related costs
Restructuring Charges	5	123
Selling and Administrative Expense [Member]
Schedule of restructuring and related costs
Restructuring Charges	$ 2,387	$ 5,604

XML

Allowance for Credit Losses (Policies)

3 Months Ended

Mar. 31, 2012

Receivables [Abstract]

Loans and leases receivable

The Company records interest income and any fees or costs related to financing receivables using the effective interest method over the term of the lease or loan. The Company reviews the aging of its financing receivables to determine past due and delinquent accounts. Credit quality is reviewed at inception and is re-evaluated as needed based on customer-specific circumstances. Receivable balances 60 days to 89 days past due are reviewed and may be placed on nonaccrual status based on customer-specific circumstances. Receivable balances are placed on nonaccrual status upon reaching greater than 89 days past due. Upon receipt of payment on nonaccrual financing receivables, interest income is recognized and accrual of interest is resumed once the account has been made current or the specific circumstances have been resolved.

XML

Other Assets (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Other Asset (Textuals)
Capitalized software development costs	$ 51,223		$ 51,117
Amortization expense on capitalized software	4,370	4,576
Investments in subsidiary accounted under equity method of investment	11,708		11,461
Equity earnings of an investee	$ 247	$ 425
Shanghai Diebold King Safe Company [Member]
Other Asset (Textuals)
Percentage of ownership in subsidiary company	50.00%

XML

Share-Based Compensation - Compensation Expense and Information on Non-Vested Shares (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 3,797		$ 3,435
Performance Shares [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested, Shares, Beginning balance	727	[1]
Unvested, Weighted-average grant-date fair value, Beginning balance	$ 34.70
Forfeited, Shares	(207)
Forfeited, Weighted-average grant-date fair value	$ 30.55
Vested, Shares	(86)
Vested, Weighted-average grant-date fair value	$ 29.25
Granted, Shares	285
Granted, Weighted-average grant-date fair value	$ 44.25
Unvested, Shares, Ending balance	719	[1]
Unvested, Weighted-average grant-date fair value, Ending balance	$ 40.33
RSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested, Shares, Beginning balance	717
Unvested, Weighted-average grant-date fair value, Beginning balance	$ 30.69
Forfeited, Shares	(29)
Forfeited, Weighted-average grant-date fair value	$ 29.65
Vested, Shares	(130)
Vested, Weighted-average grant-date fair value	$ 24.91
Granted, Shares	209
Granted, Weighted-average grant-date fair value	$ 34.97
Unvested, Shares, Ending balance	767
Unvested, Weighted-average grant-date fair value, Ending balance	$ 32.88
Deferred Compensation, Share-based Payments [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested, Shares, Ending balance	19
Unvested, Weighted-average grant-date fair value, Ending balance	$ 33.98
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested And Outstanding Number	96
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested And Outstanding Weighted Average Grant Date Fair Value	$ 33.88
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Outstanding Number	115
Share Based Compensation Arrangement Award Other Than Options Outstanding Weighted Average Grant Date Fair Value	$ 33.90

[1] Non-vested performance shares are based on a maximum potential payout. Actual shares granted at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance share objectives.

XML

Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Recorded at Fair Market Value

Assets and liabilities subject to fair value measurement are as follows:

	March 31, 2012						December 31, 2011
			Fair Value Measurements Using						Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
Assets
Short-term investments:
Certificates of deposit	$	264,896	$	264,896	$	—	$	269,033	$	269,033	$	—
U.S. dollar indexed bond funds	35,155		—		35,155		17,820		—		17,820
Assets held in a rabbi trust	7,808		7,808		—		7,170		7,170		—
Foreign exchange forward contracts	1,156		—		1,156		2,193		—		2,193
Total	$	309,015	$	272,704	$	36,311	$	296,216	$	276,203	$	20,013
Liabilities
Deferred compensation	$	7,808	$	7,808	$	—	$	7,170	$	7,170	$	—
Foreign exchange forward contracts	582		—		582		1,983		—		1,983
Interest rate swaps	3,631		—		3,631		3,796		—		3,796
Total	$	12,021	$	7,808	$	4,213	$	12,949	$	7,170	$	5,779

Fair value and carrying value of the Company's debt instruments

The fair value and carrying value of the Company’s debt instruments are summarized as follows:

	March 31, 2012				December 31, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes payable	$	39,425	$	39,425	$	21,722	$	21,722
Long-term debt	628,538		618,095		612,551		606,154
Total debt instruments	$	667,963	$	657,520	$	634,273	$	627,876

XML

Debt (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2006
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 500,000
Debt (Textuals)
Maturity time of short term uncommitted lines	less than one year
Credit facility maturity period	5 years
Increase in borrowing limits under credit facility agreement	250,000
Weighted average interest rate on credit facility borrowings outstanding	1.40%	1.49%
Line of credit facility description of variable rate basis	LIBOR
Amount available under credit facility	197,000
Issuance of Senior Notes, Principal amount			300,000
Cash flow hedge	200,000
Discussion Of Senior Notes Interest Rate Cash Flow Hedge Effective Rate	This reduced the effective interest rate from 5.50 percent to 5.36 percent.
Effective interest rate before cash flow hedge	5.50%
Effective interest rate after cash flow hedge	5.36%
Bond maturity period	20 years
Debt Instrument, Covenant Compliance	As of March 31, 2012, the Company was in compliance with the financial covenants in its debt agreements.
Uncommitted Line of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity	71,419
Debt (Textuals)
Borrowing limit of short term uncommitted line of credit	110,700
Weighted average interest rate on outstanding borrowings	2.63%	4.23%
Uncommitted Line of Credit [Member] | Maximum [Member]
Debt (Textuals)
Credit facility maturity period	1 year
Swing Line Loan [Member]
Debt (Textuals)
Borrowing limit of short term uncommitted line of credit	50,000
Senior Notes [Member]
Debt (Textuals)
Debt, Weighted Average Interest Rate			5.50%
Senior Notes Due 2013 [Member]
Debt Instrument [Line Items]
Senior Notes due	75,000
Senior Notes Due 2016 [Member]
Debt Instrument [Line Items]
Senior Notes due	175,000
Senior Notes Due 2018 [Member]
Debt Instrument [Line Items]
Senior Notes due	$ 50,000
Industrial development revenue bonds [Member]
Debt (Textuals)
Debt, Weighted Average Interest Rate	0.78%	0.77%
Maturity of bonds issued	2017

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Segment Information (Details Textuals)	3 Months Ended
	Mar. 31, 2012 segments
Segment Reporting [Abstract]
Number of reporting segments	2

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Restructuring and Other Charges (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 1,723	$ 11,801
Other restructuring charges	(330)	221
Restructuring and Other Charges (Textuals)
Non routine expenses net	924	5,771
Global Shared Services Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	1,723
EMEA Reorganization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	330	11,580
Minimum [Member] | EMEA Reorganization [Member]
Restructuring Cost and Reserve [Line Items]
Additional restructuring charges	400
Maximum [Member] | EMEA Reorganization [Member]
Restructuring Cost and Reserve [Line Items]
Additional restructuring charges	1,100
Expected Future Costs to Be Recognized in 2012 [Member] | Global Shared Services Plan [Member]
Restructuring Cost and Reserve [Line Items]
Additional restructuring charges	1,500
Expected Future Costs to Be Recognized Beyond 2012 [Member] | Global Shared Services Plan [Member]
Restructuring Cost and Reserve [Line Items]
Additional restructuring charges	9,500
Cost Of Sales Services [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ (669)	$ 6,074

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Allowance for Credit Losses - Aging of Past-Due Receivables (Details) (Notes Receivable [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2012
Notes Receivable [Member]
Summarizes the Company's aging of past-due notes receivable
30-59 days past due	$ 0
60-89 days past due	0
> 89 days past due	1,564
Total past due	$ 1,564

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Equity

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

EQUITY

EQUITY

The following table presents changes in shareholders' equity attributable to Diebold, Incorporated and the noncontrolling interests for the three months ended March 31:

	2012			2011
Diebold, Incorporated shareholders' equity
Balance at beginning of period	$	826,986		$	961,155
Comprehensive income attributable to Diebold, Incorporated	74,341			17,182
Common shares	686			537
Additional capital	13,013			8,257
Treasury shares	(2,885		)	(21,451		)
Dividends declared	(18,094		)	(18,650		)
Balance at end of period	$	894,047		$	947,030
Noncontrolling interests
Balance at beginning of period	$	31,274		$	28,659
Comprehensive income attributable to noncontrolling interests	794			1,905
Distributions to noncontrolling interest holders	(1,112		)	(310		)
Balance at end of period	$	30,956		$	30,254

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Fair Value of Assets and Liabilities - Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Fair value assets measured on recurring basis
Assets held in a rabbi trust	$ 7,808	$ 7,170
Total	309,015	296,216
Fair value liabilities measured on recurring basis
Deferred compensation	7,808	7,170
Total	12,021	12,949
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Fair value assets measured on recurring basis
Assets held in a rabbi trust	7,808	7,170
Total	272,704	276,203
Fair value liabilities measured on recurring basis
Deferred compensation	7,808	7,170
Total	7,808	7,170
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Fair value assets measured on recurring basis
Assets held in a rabbi trust	0	0
Total	36,311	20,013
Fair value liabilities measured on recurring basis
Deferred compensation	0	0
Total	4,213	5,779
Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member]
Fair value assets measured on recurring basis
Foreign exchange forward contracts	1,156	2,193
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	582	1,983
Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Fair value assets measured on recurring basis
Foreign exchange forward contracts	0	0
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	0	0
Forward Contracts [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Fair value assets measured on recurring basis
Foreign exchange forward contracts	1,156	2,193
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	582	1,983
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member]
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	3,631	3,796
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	0	0
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Fair value liabilities measured on recurring basis
Fair value Liabilities measured on recurring basis- Derivatives	3,631	3,796
Certificates Of Deposit [Member] | Fair Value, Measurements, Recurring [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	264,896	269,033
Certificates Of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	264,896	269,033
Certificates Of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	0	0
U.S. dollar indexed bond funds [Member] | Fair Value, Measurements, Recurring [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	35,155	17,820
U.S. dollar indexed bond funds [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	0	0
U.S. dollar indexed bond funds [Member] | Level 2 [Member]
Fair value assets measured on recurring basis
Investments, Fair Value Disclosure	$ 35,155	$ 17,820

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Income Taxes (Details)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Income Taxes (Textuals)
Effective tax rate on continuing operations	22.70%	58.80%
Decrease in effective income tax rate	36.1

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Investments (Tables)

3 Months Ended

Mar. 31, 2012

Investments, Debt and Equity Securities [Abstract]

Investments

The Company’s investments, excluding cash surrender value of insurance contracts of $67,068 and $67,699 as of March 31, 2012 and December 31, 2011, respectively, consist of the following:

	Cost Basis		Unrealized Gain (Loss)			Fair Value
As of March 31, 2012
Short-term investments:
Certificates of deposit	$	264,896	$	—		$	264,896
U.S. dollar indexed bond funds	34,561		594			35,155
	$	299,457	$	594		$	300,051
Long-term investments:
Assets held in a rabbi trust	$	7,302	$	506		$	7,808
As of December 31, 2011
Short-term investments:
Certificates of deposit	$	269,033	$	—		$	269,033
U.S. dollar indexed bond funds	16,482		1,338			17,820
	$	285,515	$	1,338		$	286,853
Long-term investments:
Assets held in a rabbi trust	$	7,428	$	(258	)	$	7,170

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Options outstanding and exercisable under the Company's 1991 Equity and Performance Incentive Plan

Options outstanding and exercisable as of March 31, 2012 under the Company’s 1991 Equity and Performance Incentive Plan (as Amended and Restated as of April 13, 2009) and changes during the three months ended March 31, 2012, were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (1)
	(in thousands)		(per share)		(in years)
Outstanding at January 1, 2012	3,201		$	36.70
Expired or forfeited	(400	)	$	36.70
Exercised	(331	)	$	29.93
Granted	539		$	34.89
Outstanding at March 31, 2012	3,009		$	37.12	6	$	13,856
Options exercisable at March 31, 2012	1,910		$	39.76	4	$	7,265
Options vested and expected to vest (2) at March 31, 2012	2,982		$	37.16	6	$	13,697

(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 2012 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 March 31, 2012. 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.

Summarized information on unvested restricted stock units (RSUs), performance shares and deferred shares

The following tables summarize information on non-vested RSUs, performance shares and deferred shares for the three months ended March 31, 2012:

	Number of Shares		Weighted-Average Grant-Date Fair Value
	(in thousands)
RSUs:
Non-Vested at January 1, 2012	717		$	30.69
Forfeited	(29	)	$	29.65
Vested	(130	)	$	24.91
Granted	209		$	34.97
Non-Vested at March 31, 2012	767		$	32.88
Performance Shares (1):
Non-Vested at January 1, 2012	727		$	34.70
Forfeited	(207	)	$	30.55
Vested	(86	)	$	29.25
Granted	285		$	44.25
Non-Vested at March 31, 2012	719		$	40.33
Director Deferred Shares:
Non-Vested at March 31, 2012	19		$	33.98
Vested at March 31, 2012	96		$	33.88
Outstanding at March 31, 2012	115		$	33.90

(1) Non-vested performance shares are based on a maximum potential payout. Actual shares granted at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance share objectives.

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Derivative Instruments and Hedging Activities (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2006
Derivative Instruments and Hedging Activities (Textuals)
Fair value of investment hedge contracts	$ (258)	$ 1,768
Loss on investment hedge derivative	2,026
Maximum maturities of Foreign exchange forward contracts	24 months
Fair value of non-designated foreign exchange forward contracts	832	(1,558)
Fair value of interest rate contracts	(3,631)	(3,796)
Notional amount related to senior notes issuance			200,000
Anticipated reclassification from other comprehensive income to interest expense within the next 12 months	742
Interest Rate Swap [Member]
Derivative Instruments and Hedging Activities (Textuals)
Notional amount of pay-fixed receive-variable interest rate swap	$ 25,000

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Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Short-term investments:
Investments, Cost Basis	$ 299,457	$ 285,515
Available-for-sale Securities, Gross Unrealized Gain (Loss)	594	1,338
Short-term investments, Fair Value	300,051	286,853
Certificates Of Deposit [Member]
Short-term investments:
Investments, Cost Basis	264,896	269,033
Available-for-sale Securities, Gross Unrealized Gain (Loss)	0	0
Short-term investments, Fair Value	264,896	269,033
U.S. dollar indexed bond funds [Member]
Short-term investments:
Investments, Cost Basis	34,561	16,482
Available-for-sale Securities, Gross Unrealized Gain (Loss)	594	1,338
Short-term investments, Fair Value	35,155	17,820
Assets held in rabbi trust [Member]
Long-term investments:
Long-term investments, Cost Basis	7,302	7,428
Long-term investments, Unrealized Gain (Loss)	506	(258)
Fair Value Of Assets Held Under Trust	$ 7,808	$ 7,170

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Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2012

Receivables [Abstract]

Allowance for credit losses and recorded investment in financing receivables

The following table summarizes the Company’s allowance for credit losses and recorded investment in financing receivables:

	Finance Leases		Notes Receivable		Total
Allowance for credit losses
Balance at January 1, 2012	$	210	$	2,047	$	2,257
Provision for credit losses	—		—		—
Recoveries	15		—		15
Write-offs	—		—		—
Balance at March 31, 2012	$	225	$	2,047	$	2,272
Allowance resulting from individual impairment evaluation	$	225	$	2,047	$	2,272
Allowance resulting from collective impairment evaluation	—		—		—
Financing receivables individually evaluated for impairment	$	100,819	$	14,134	$	114,953
Financing receivables collectively evaluated for impairment	—		—		—

Summarizes the Company's aging of past-due notes receivable

The following table summarizes the Company’s aging of past-due notes receivable balances as of March 31, 2012:

30-59 days past due	$	—
60-89 days past due	—
> 89 days past due	1,564
Total past due	$	1,564

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Inventories (Tables)

3 Months Ended

Mar. 31, 2012

Inventory Disclosure [Abstract]

Major classes of inventories

Major classes of inventories are summarized as follows:

	March 31, 2012		December 31, 2011
Finished goods	$	217,108	$	188,571
Service parts	159,442		152,597
Raw materials and work in process	117,281		99,732
Total inventories	$	493,831	$	440,900

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Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share is based on the weighted-average number of common shares outstanding. Diluted earnings per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing earnings 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), deferred shares and shares that were vested, but deferred by the employee. The Company calculated basic and diluted earnings per share under both the treasury stock method and the two-class method. For the three months ended March 31, 2012, there was no impact in the per share amounts calculated under the two methods. Accordingly, the treasury stock method is disclosed below.

The following represents amounts used in computing earnings per share and the effect on the weighted-average number of shares of dilutive potential common shares for the three months ended March 31:

	2012		2011
Numerator:
Income used in basic and diluted earnings per share:
Income from continuing operations, net of tax	$	45,163	$	2,512
Loss from discontinued operations, net of tax	—		(11		)
Net income attributable to Diebold, Incorporated	$	45,163	$	2,501
Denominator (in thousands):
Weighted-average number of common shares used in basic earnings per share	62,725		65,762
Effect of dilutive shares	608		468
Weighted-average number of shares used in diluted earnings per share	63,333		66,230
Basic earnings per share:
Net income from continuing operations	$	0.72	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.72	$	0.04
Diluted earnings per share:
Net income from continuing operations	$	0.71	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.71	$	0.04
Anti-dilutive shares (in thousands):
Anti-dilutive shares not used in calculating diluted weighted-average shares	1,596		2,023

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Debt (Tables)

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

Outstanding Debt Balances

Outstanding debt balances were as follows:

	March 31, 2012		December 31, 2011
Notes payable:
Uncommitted lines of credit	$	39,281	$	21,572
Other	144		150
	$	39,425	$	21,722
Long-term debt:
Credit facility	$	303,000	$	291,000
Senior notes	300,000		300,000
Industrial development revenue bonds	11,900		11,900
Other	3,195		3,254
	$	618,095	$	606,154

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Equity (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Diebold, Incorporated shareholders' equity
Balance at beginning of the period	$ 826,986	$ 961,155
Other comprehensive income:
Comprehensive income attributable to Diebold, Incorporated	74,341	17,182
Common shares	686	537
Additional capital	13,013	8,257
Treasury shares	(2,885)	(21,451)
Dividends declared	(18,094)	(18,650)
Balance at end of the period	894,047	947,030
Noncontrolling interests
Balance at beginning of the period	31,274	28,659
Other comprehensive income:
Comprehensive income attributable to noncontrolling interests	794	1,905
Distributions to noncontrolling interest holders	(1,112)	(310)
Balance at end of the period	$ 30,956	$ 30,254

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Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Benefit Plans (Textuals)
Contributions to qualified and non qualified pension plans	$ 12,864	$ 20,697
Pension Benefits [Member]
Components of net periodic benefit cost
Service cost	2,862	2,713
Interest cost	7,958	7,872
Expected return on plan assets	(10,205)	(10,183)
Amortization of prior service cost	65	65
Recognized net actuarial loss	4,211	2,406
Net periodic pension benefit cost	4,891	2,873
Other Benefits [Member]
Components of net periodic benefit cost
Service cost	0	0
Interest cost	204	233
Expected return on plan assets	0	0
Amortization of prior service cost	(129)	(129)
Recognized net actuarial loss	121	97
Net periodic pension benefit cost	$ 196	$ 201

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 311,437	$ 333,920
Short-term investments	300,051	286,853
Trade receivables, less allowances for doubtful accounts of $23,027 and $22,128, respectively	447,949	414,969
Inventories	493,831	440,900
Deferred income taxes	112,824	114,250
Prepaid expenses	34,860	31,452
Other current assets	134,945	110,011
Total current assets	1,835,897	1,732,355
Securities and other investments	74,876	74,869
Property, plant and equipment, at cost	652,695	642,256
Less accumulated depreciation and amortization	460,184	449,562
Property, plant and equipment, net	192,511	192,694
Goodwill	257,374	253,063
Deferred income taxes	91,752	91,090
Other assets	178,982	173,372
Total assets	2,631,392	2,517,443
Current liabilities
Notes payable	39,425	21,722
Accounts payable	231,478	221,964
Deferred revenue	287,360	241,992
Payroll and other benefits liabilities	55,992	79,854
Other current liabilities	253,068	258,685
Total current liabilities	867,323	824,217
Long-term debt	618,095	606,154
Pensions and other benefits	136,210	148,399
Postretirement and other benefits	23,547	23,196
Deferred income taxes	32,914	32,029
Other long-term liabilities	28,300	25,188
Commitments and contingencies	0	0
Diebold, Incorporated shareholders' equity
Preferred shares, no par value, 1,000,000 authorized shares, none issued	0	0
Common shares, $1.25 par value, 125,000,000 authorized shares, 77,389,520 and 76,840,956 issued shares, 62,986,756 and 62,513,615 outstanding shares, respectively	96,737	96,051
Additional capital	340,818	327,805
Retained earnings	1,018,279	991,210
Treasury shares, at cost (14,402,764 and 14,327,341 shares, respectively)	(550,622)	(547,737)
Accumulated other comprehensive income	(11,165)	(40,343)
Total Diebold, Incorporated shareholders' equity	894,047	826,986
Noncontrolling interests	30,956	31,274
Total equity	925,003	858,260
Total liabilities and equity	$ 2,631,392	$ 2,517,443

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Investments (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Investments (Textuals)
Realized net gains (losses) from sale of securities	$ 328	$ (164)
Proceeds from sale of available-for-sale securities	5,808	7,117
Cash surrender value of insurance contracts	$ 67,068	$ 67,699

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flow from operating activities:
Net income	$ 45,965	$ 4,135
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation and amortization	19,711	19,246
Share-based compensation	3,797	3,435
Excess tax benefits from share-based compensation	(1,269)	(1,484)
Equity in earnings of an investee	(247)	(425)
Cash flow from changes in certain assets and liabilities:
Trade receivables	(26,535)	(8,072)
Inventories	(45,268)	(21,955)
Prepaid expenses	(3,045)	158
Other current assets	(24,992)	(15,419)
Accounts payable	7,063	(29,404)
Deferred revenue	42,378	25,078
Certain other assets and liabilities	(43,579)	(65,444)
Net cash used in operating activities	(26,021)	(90,151)
Cash flow from investing activities:
Proceeds from maturities of investments	88,698	59,292
Proceeds from sale of investments	5,808	7,117
Payments for purchases of investments	(99,738)	(56,720)
Proceeds from sale of assets	0	175
Capital expenditures	(12,297)	(10,902)
Collections on purchased finance receivables	4,438	7,338
Increase in certain other assets	(6,692)	(4,103)
Net cash (used in) provided by investing activities	(19,783)	2,197
Cash flow from financing activities:
Dividends paid	(18,094)	(18,650)
Debt borrowings	263,724	156,637
Debt repayments	(234,264)	(85,210)
Issuance of common shares	9,902	4,017
Repurchase of common shares	(2,885)	(21,451)
Other	157	615
Net cash provided by financing activities	18,540	35,958
Effect of exchange rate changes on cash and cash equivalents	4,781	2,900
Decrease in cash and cash equivalents	(22,483)	(49,096)
Cash and cash equivalents at the beginning of the period	333,920	328,658
Cash and cash equivalents at the end of the period	$ 311,437	$ 279,562

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Restructuring and Other Charges - Restructuring Charges By Plan (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
EMEA Reorganization [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	$ 19,780
EMEA Reorganization [Member] | Diebold North America [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	0
EMEA Reorganization [Member] | Diebold International [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	19,780
Global Shared Services Plan [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	1,723
Global Shared Services Plan [Member] | Diebold North America [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	1,437
Global Shared Services Plan [Member] | Diebold International [Member]
Cumulative total restructuring costs for significant plans
Costs incurred to date	$ 286

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gain (loss) recognized on non-designated derivative instruments

The following table summarizes the (loss) gain recognized on non-designated foreign-exchange derivative instruments for the three months ended March 31:

Income Statement Location	2012			2011
Interest expense	$	(1,391	)	$	(1,849	)
Foreign exchange gain (loss), net	(2,434		)	(6,217		)
	$	(3,825	)	$	(8,066	)

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Segment Information - Revenue By Geographic Region (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenue summary by geographic region
Total sales	$ 698,491	$ 614,157
Latin America including Brazil [Member]
Revenue summary by geographic region
Total sales	137,668	152,888
Asia Pacific [Member]
Revenue summary by geographic region
Total sales	96,200	83,889
Europe, Middle East and Africa [Member]
Revenue summary by geographic region
Total sales	64,703	71,416
Diebold North America [Member]
Revenue summary by geographic region
Total sales	399,920	305,964
Diebold International [Member]
Revenue summary by geographic region
Total sales	$ 298,571	$ 308,193

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Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE OF ASSETS AND LIABILITIES

FAIR VALUE OF ASSETS AND LIABILITIES

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

Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Cost approach – Amount that would be required to replace the service capacity of an asset (replacement cost).

Income approach – Techniques to convert future amounts to a single present amount based upon market expectations.

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

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 – Unobservable inputs for which there is little or no market data.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Recorded at Fair Value

Assets and liabilities subject to fair value measurement are as follows:

	March 31, 2012						December 31, 2011
			Fair Value Measurements Using						Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
Assets
Short-term investments:
Certificates of deposit	$	264,896	$	264,896	$	—	$	269,033	$	269,033	$	—
U.S. dollar indexed bond funds	35,155		—		35,155		17,820		—		17,820
Assets held in a rabbi trust	7,808		7,808		—		7,170		7,170		—
Foreign exchange forward contracts	1,156		—		1,156		2,193		—		2,193
Total	$	309,015	$	272,704	$	36,311	$	296,216	$	276,203	$	20,013
Liabilities
Deferred compensation	$	7,808	$	7,808	$	—	$	7,170	$	7,170	$	—
Foreign exchange forward contracts	582		—		582		1,983		—		1,983
Interest rate swaps	3,631		—		3,631		3,796		—		3,796
Total	$	12,021	$	7,808	$	4,213	$	12,949	$	7,170	$	5,779

The Company uses the end of period when determining the timing of transfers between levels. During the three months ended March 31, 2012 and 2011, there were no transfers between levels.

Short-Term Investments The Company has investments in certificates of deposit that are recorded at cost, which approximates fair value. Additionally, the Company has investments in U.S. dollar indexed bond funds that are classified as available-for-sale and stated at fair value. U.S. dollar indexed bond funds are reported at net asset value, which is the practical expedient for fair value as determined by banks where funds are held.

Assets Held in a Rabbi Trust / Deferred Compensation The fair value of the assets held in a rabbi trust is derived from investments in a mix of money market, fixed income and equity funds managed by Vanguard. The related deferred compensation liability is recorded at fair value.

Foreign Exchange Forward Contracts A substantial portion of the Company’s operations and revenues are international. As a result, changes in foreign exchange rates can create substantial foreign exchange gains and losses from the revaluation of non-functional currency monetary assets and liabilities. The foreign exchange contracts are valued using the market approach based on observable market transactions of forward rates.

Interest Rate Swaps The Company has variable rate debt and is subject to fluctuations in interest-related cash flows due to changes in market interest rates. The Company’s policy allows it to periodically enter into derivative instruments designated as cash flow hedges to fix some portion of future variable rate based interest expense. The Company has a pay-fixed receive-variable interest rate swap to hedge against changes in the LIBOR benchmark interest rate on a portion of the Company’s LIBOR-based borrowings. The fair value of the swap is determined using the income approach and is calculated based on LIBOR rates at the reporting date.

Assets and Liabilities Recorded at Carrying Value

The fair value of the Company’s cash and cash equivalents, trade receivables and accounts payable, approximates the carrying value due to the relative short maturity of these instruments. The fair value and carrying value of the Company’s debt instruments are summarized as follows:

	March 31, 2012				December 31, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes payable	$	39,425	$	39,425	$	21,722	$	21,722
Long-term debt	628,538		618,095		612,551		606,154
Total debt instruments	$	667,963	$	657,520	$	634,273	$	627,876

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

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Restructuring and Other Charges (Tables)

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following table summarizes the impact of the Company’s restructuring charges (accrual adjustments) on the condensed consolidated statements of income for three months ended March 31:

	2012			2011
Cost of sales – services	$	(669	)	$	6,074
Cost of sales – products	5			123
Selling and administrative expense	2,387			5,604
Total	$	1,723		$	11,801

Restructuring charges (benefits) within continuing operations for DNA and Diebold International (DI) reporting segments

The following table summarizes the Company’s net restructuring charges (accrual adjustments) within continuing operations for its Diebold North America (DNA) and Diebold International (DI) reporting segments for the three months ended March 31:

	2012		2011
DNA
Severance	$	1,107	$	(7	)
DI
Severance	128		11,605
Other (1)	488		203
Total	$	1,723	$	11,801

(1) Other costs in the DI segment include legal fees, accelerated depreciation and lease termination fees.

Cumulative total restructuring costs for significant plans

The following table summarizes the Company’s cumulative total restructuring costs for the significant plans:

	EMEA Reorganization		Global Shared Services
Costs incurred to date:
DNA	$	—	$	1,437
DI	19,780		286
Total costs incurred to date	$	19,780	$	1,723

Restructuring accrual balances and related activity

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

Balance at January 1, 2012	$	10,136
Liabilities incurred	1,723
Liabilities paid	(1,945		)
Balance at March 31, 2012	$	9,914

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Discontinued Operations

3 Months Ended

Mar. 31, 2012

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

Included in loss from discontinued operations were costs related to the Company's U.S.-based elections systems business.

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Consolidated Financial Statements

3 Months Ended

Mar. 31, 2012

Accounting Policies [Abstract]

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of Diebold, 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 U.S. generally accepted accounting principles (GAAP); however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods.

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s annual report on Form 10-K for the year ended December 31, 2011. In addition, some of the Company’s statements in this 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 months ended March 31, 2012 are not necessarily indicative of results to be expected for the full year.

RECENTLY ADOPTED ACCOUNTING GUIDANCE

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, Presentation of Comprehensive Income (ASU 2011-05), which eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently, in December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (ASU 2011-12), which indefinitely defers the requirement in ASU 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The Company has provided the required statements of comprehensive income for the three months ended March 31, 2012 and 2011.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 amended Accounting Standards Codification 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards (IFRSs). ASU 2011-04 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Disclosure requirements have been expanded to include additional information about transfers between level 1 and level 2 of the fair value hierarchy and level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurements including: (a) the application of the highest and best use valuation premise concepts; (b) measuring the fair value of an instrument classified in a reporting entity's stockholders' equity; and (c) quantitative information required for fair value measurements categorized within level 3. The adoption of this guidance did not have an impact on the Company's condensed consolidated financial statements; however, the Company provided additional disclosure as required by ASU 2011-04 in note 16.

RECENTLY ISSUED ACCOUNTING GUIDANCE

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which requires certain additional disclosure requirements about financial instruments and derivatives instruments that are subject to netting arrangements. The new disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those periods. The adoption of this update will not have an impact on the financial statements of the Company.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets
Allowances for doubtful accounts	$ 23,027	$ 22,128
Diebold, Incorporated shareholders' equity
Preferred shares, par value	$ 0	$ 0
Preferred shares, shares authorized	1,000,000	1,000,000
Preferred shares, shares issued	0	0
Common shares, par value	$ 1.25	$ 1.25
Common shares, shares authorized	125,000,000	125,000,000
Common shares, shares issued	77,389,520	76,840,956
Common shares, shares outstanding	62,986,756	62,513,615
Treasury shares, at cost, shares	14,402,764	14,327,341

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Benefit Plans

3 Months Ended

Mar. 31, 2012

Compensation and Retirement Disclosure [Abstract]

BENEFIT PLANS

BENEFIT PLANS

The Company has pension plans covering certain U.S. employees that have been closed to new participants since July 1, 2003. Plans that cover certain salaried employees provide pension benefits based on the employee’s compensation during the ten years before retirement. The Company’s funding policy for salaried plans is to contribute annually based on actuarial projections and applicable regulations. Plans covering certain hourly employees and union members generally provide benefits of stated amounts for each year of service. The Company’s funding policy for hourly plans is to make at least the minimum annual contributions

required by applicable regulations. Employees of the Company’s operations in countries outside of the U.S. participate to varying degrees in local pension plans, which in the aggregate are not significant.

In addition to providing pension benefits, the Company provides healthcare and life insurance benefits (referred to as other benefits) for certain retired employees. Eligible employees may be entitled to these benefits based upon years of service with the Company, age at retirement and collective bargaining agreements. Currently, the Company has made no commitments to increase these benefits for existing retirees or for employees who may become eligible for these benefits in the future. There are no plan assets and the Company funds the benefits as the claims are paid.

The following table sets forth the net periodic benefit cost for the Company’s defined benefit pension plans and other benefits for three months ended March 31:

	Pension Benefits						Other Benefits
	2012			2011			2012			2011
Components of net periodic benefit cost
Service cost	$	2,862		$	2,713		$	—		$	—
Interest cost	7,958			7,872			204			233
Expected return on plan assets	(10,205		)	(10,183		)	—			—
Amortization of prior service cost	65			65			(129		)	(129		)
Recognized net actuarial loss	4,211			2,406			121			97
Net periodic pension benefit cost	$	4,891		$	2,873		$	196		$	201

Cash Flows

There have been no significant changes to the 2012 plan year contribution amounts previously disclosed. For the three months ended March 31, 2012 and 2011, contributions of $12,864 and $20,697, respectively, were made to the qualified and non-qualified pension plans.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	Apr. 24, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	DIEBOLD INC
Entity Central Index Key	0000028823
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		62,986,506

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Guarantees and Product Warranties

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

GUARANTEES AND PRODUCT WARRANTIES

GUARANTEES AND PRODUCT WARRANTIES

In 1997, industrial development revenue bonds were issued on behalf of the Company. The Company guaranteed the payments of principal and interest on the bonds (refer to note 10) by obtaining letters of credit. The carrying value of the bonds was $11,900 as of March 31, 2012 and December 31, 2011.

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 or fulfill contractual obligations, the suppliers, customers, regulatory agencies and insurance providers may draw on the pertinent bank. At March 31, 2012, the maximum future payment obligations related to these various guarantees totaled $77,906, of which $23,435 represented standby letters of credit to insurance providers, and no associated liability was recorded. At December 31, 2011, the maximum future payment obligations relative to these various guarantees totaled $71,321, of which $22,623 represented standby letters of credit to insurance providers, and no associated liability was recorded.

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

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

	2012			2011
Balance at January 1	$	63,355		$	78,313
Current period accruals (a)	15,934			18,411
Current period settlements	(14,608		)	(19,252		)
Balance at March 31	$	64,681		$	77,472

(a) includes the impact of foreign exchange rate fluctuations

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net sales
Services	$ 396,865	$ 364,374
Products	301,626	249,783
Total sales	698,491	614,157
Cost of sales
Services	285,396	275,890
Products	219,855	188,863
Total cost of sales	505,251	464,753
Gross profit	193,240	149,404
Selling and administrative expense	119,795	121,111
Research, development and engineering expense	18,801	19,424
Total operating expense	138,596	140,535
Operating profit	54,644	8,869
Other income (expense)
Investment income	11,955	10,898
Interest expense	(7,608)	(8,673)
Foreign exchange gain (loss), net	545	(1,046)
Miscellaneous, net	(90)	23
Income from continuing operations before taxes	59,446	10,071
Taxes on income	13,481	5,925
Income from continuing operations	45,965	4,146
Loss from discontinued operations, net of tax	0	(11)
Net income	45,965	4,135
Net income attributable to noncontrolling interests	802	1,634
Net income attributable to Diebold, Incorporated	45,163	2,501
Basic weighted-average shares outstanding	62,725	65,762
Diluted weighted-average shares outstanding	63,333	66,230
Basic earnings per share
Net income from continuing operations	$ 0.72	$ 0.04
Loss from discontinued operations	$ 0.00	$ 0.00
Net income attributable to Diebold, Incorporated	$ 0.72	$ 0.04
Diluted earnings per share
Net income from continuing operations	$ 0.71	$ 0.04
Loss from discontinued operations	$ 0.00	$ 0.00
Net income attributable to Diebold, Incorporated	$ 0.71	$ 0.04
Amounts attributable to Diebold, Incorporated
Income from continuing operations, net of tax	45,163	2,512
Loss from discontinued operations, net of tax	0	(11)
Net income attributable to Diebold, Incorporated	$ 45,163	$ 2,501

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Investments

3 Months Ended

Mar. 31, 2012

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

The Company’s investments, primarily in Brazil, consist of certificates of deposit and U.S. dollar indexed bond funds, which are classified as available-for-sale and stated at fair value based upon quoted market prices and net asset values, respectively. Unrealized gains and losses are recorded in OCI. Realized gains and losses are recognized in investment income and are determined using the specific identification method. Realized gains (losses), net from the sale of securities were $328 and $(164) for the three months ended March 31, 2012 and 2011, respectively. Proceeds from the sale of available-for-sale securities were $5,808 and $7,117 during the three months ended March 31, 2012 and 2011, respectively.

The Company’s investments, excluding cash surrender value of insurance contracts of $67,068 and $67,699 as of March 31, 2012 and December 31, 2011, respectively, consist of the following:

	Cost Basis		Unrealized Gain (Loss)			Fair Value
As of March 31, 2012
Short-term investments:
Certificates of deposit	$	264,896	$	—		$	264,896
U.S. dollar indexed bond funds	34,561		594			35,155
	$	299,457	$	594		$	300,051
Long-term investments:
Assets held in a rabbi trust	$	7,302	$	506		$	7,808
As of December 31, 2011
Short-term investments:
Certificates of deposit	$	269,033	$	—		$	269,033
U.S. dollar indexed bond funds	16,482		1,338			17,820
	$	285,515	$	1,338		$	286,853
Long-term investments:
Assets held in a rabbi trust	$	7,428	$	(258	)	$	7,170

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate on continuing operations for the three months ended March 31, 2012 was 22.7 percent compared to 58.8 percent for the same period of 2011. The 36.1 percentage point decrease was mainly due to 2011 losses in certain Europe, Middle East and Africa (EMEA) jurisdictions for which no tax benefit was recognized in the first-quarter 2011 effective tax rate. The impact was significant on the first-quarter 2011 effective tax rate because these operating losses were relatively large when compared to income from continuing operations before taxes for the period. Additionally, foreign income tax assessments and interest on uncertain tax positions increased the first-quarter 2011 effective tax rate.

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Segment Information

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company’s segments are comprised of two sales channels: DNA and DI. The DNA segment sells and services financial and retail systems in the United States and Canada. The DI segment sells and services financial and retail systems over the remainder of the globe as well as voting and lottery solutions in Brazil.

The reconciliation between segment information and the condensed consolidated financial statements is disclosed. Revenue summaries by geographic area and product and service solutions are also disclosed. Certain information not routinely used in the management of the DNA and DI segments are not allocated back to the segments. Items not allocated are as follows: investment income; interest expense; equity in the net income of investees accounted for by the equity method; income tax expense or benefit; foreign exchange gains and losses; miscellaneous, net; and discontinued operations. The Company has reclassified the presentation of prior-year operating profit (loss) to conform to the current year presentation due to changes in corporate allocations. 

The following table presents information regarding the Company’s segment information for three months ended March 31:

	2012			2011
DNA
Customer revenues	$	399,920		$	305,964
Intersegment revenues	13,607			19,626
Operating profit	55,297			16,152
Capital expenditures	5,285			5,779
Depreciation	6,895			6,759
Property, plant and equipment, at cost	465,358			462,840
Total assets	1,057,410			1,012,990
DI
Customer revenues	298,571			308,193
Intersegment revenues	18,775			15,266
Operating loss	(653		)	(7,283		)
Capital expenditures	7,012			5,123
Depreciation	6,387			5,224
Property, plant and equipment, at cost	187,337			193,471
Total assets	1,573,982			1,518,547
TOTAL
Customer revenues	698,491			614,157
Intersegment revenues	32,382			34,892
Operating profit	54,644			8,869
Capital expenditures	12,297			10,902
Depreciation	13,282			11,983
Property, plant and equipment, at cost	652,695			656,311
Total assets	2,631,392			2,531,537

The following table presents information regarding the Company’s revenue by geographic region for three months ended March 31:

	2012		2011
Diebold North America	$	399,920	$	305,964
Diebold International:
Latin America including Brazil	137,668		152,888
Asia Pacific	96,200		83,889
Europe, Middle East and Africa	64,703		71,416
Total Diebold International	298,571		308,193
Total customer revenues	$	698,491	$	614,157

The following table presents information regarding the Company’s revenue by service and product solution for three months ended March 31:

	2012		2011
Financial self-service:
Services	$	299,935	$	264,456
Products	261,067		198,640
Total financial self-service	561,002		463,096
Security
Services	96,840		99,918
Products	38,033		43,413
Total security	134,873		143,331
Total financial self-service & security	695,875		606,427
Election and lottery systems	2,616		7,730
Total customer revenues	$	698,491	$	614,157

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

At March 31, 2012, the Company was a party to several lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate 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 legal proceedings, commitments or asserted claims. In addition to these routine legal proceedings, the Company was a party to securities and shareholder actions, which are described in note 15 of the consolidated financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2011.

During the second quarter of 2010, while conducting due diligence in connection with a potential acquisition in Russia, the Company identified certain transactions and payments by its subsidiary in Russia (primarily during 2005 to 2008) that potentially implicate the Foreign Corrupt Practices Act (FCPA), particularly the books and records provisions of the FCPA. As a result, the Company conducted a global internal review and collected information related to its global FCPA compliance. In the fourth quarter of 2010, the Company identified certain transactions within its Asia Pacific operation that occurred over the past several years that may also potentially implicate the FCPA. The Company continues to monitor its ongoing compliance with the FCPA.

The Company has voluntarily self-reported its findings to the SEC and the U.S. Department of Justice (DOJ) and is cooperating with these agencies in their review. The Company was previously informed that the SEC's inquiry had been converted to a formal, non-public investigation. The Company also received a subpoena for documents from the SEC and a voluntary request for documents from the DOJ in connection with the investigation. As of March 31, 2012, the Company's accrued estimated loss related to the potential outcome of this matter is not considered material to the condensed consolidated financial statements. Because the SEC and DOJ investigations are ongoing, there can be no assurance that their review will not find evidence of additional transactions that potentially implicate the FCPA. At this time, the Company cannot predict the results of the government investigations and future resolution of these matters with the SEC and the DOJ could result in changes in management's estimates of losses, which could be material to the Company’s consolidated financial statements.

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Other Assets

3 Months Ended

Mar. 31, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER ASSETS

OTHER ASSETS

Included in other assets are net capitalized software development costs of $51,223 and $51,117 as of March 31, 2012 and December 31, 2011, respectively. Amortization expense on capitalized software of $4,370 and $4,576 was included in product cost of sales for the three months ended March 31, 2012 and 2011, respectively. Other long-term assets also consist of patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred. Impairment of long-lived assets is recognized when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the expected future undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss may be recognized at that time to reduce the asset to the lower of its fair value or its net book value.

Investment in Affiliate Investment in the Company’s non-consolidated affiliate is accounted for under the equity method and consists of a 50 percent ownership in Shanghai Diebold King Safe Company, Ltd. The balance of this investment as of March 31, 2012 and December 31, 2011 was $11,708 and $11,461 respectively, and fluctuated based on equity earnings and dividends. Equity earnings from the non-consolidated affiliate are included in miscellaneous, net in the condensed consolidated statements of income and were $247 and $425 for the three months ended March 31, 2012 and 2011, respectively.

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Restructuring and Other Charges - Restructuring Reserve Activity (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 9,914	$ 10,136
Restructuring Reserve, Period Expense	1,723
Restructuring Reserve, Settled with Cash	$ (1,945)

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Allowance for Credit Losses

3 Months Ended

Mar. 31, 2012

Receivables [Abstract]

ALLOWANCE FOR CREDIT LOSSES

ALLOWANCE FOR CREDIT LOSSES

Trade Receivables The Company evaluates the collectability of trade receivables based on (1) a percentage of sales related to historical loss experience and current trends and (2) periodic adjustments for known events such as specific customer circumstances and changes in the aging of accounts receivable balances. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off.

Financing Receivables The Company evaluates the collectability of notes and finance lease receivables (collectively, financing receivables) on a customer-by-customer basis and evaluates specific customer circumstances, aging of invoices, credit risk changes and payment patterns and historical loss experience. When the collectability is determined to be at risk based on the above criteria, the Company records the allowance for credit losses which represents the Company’s current exposure less estimated reimbursement from insurance claims. After all efforts at collection have been unsuccessful, the account is deemed uncollectible and is written off. The following table summarizes the Company’s allowance for credit losses and recorded investment in financing receivables:

	Finance Leases		Notes Receivable		Total
Allowance for credit losses
Balance at January 1, 2012	$	210	$	2,047	$	2,257
Provision for credit losses	—		—		—
Recoveries	15		—		15
Write-offs	—		—		—
Balance at March 31, 2012	$	225	$	2,047	$	2,272
Allowance resulting from individual impairment evaluation	$	225	$	2,047	$	2,272
Allowance resulting from collective impairment evaluation	—		—		—
Financing receivables individually evaluated for impairment	$	100,819	$	14,134	$	114,953
Financing receivables collectively evaluated for impairment	—		—		—

The Company records interest income and any fees or costs related to financing receivables using the effective interest method over the term of the lease or loan. The Company reviews the aging of its financing receivables to determine past due and delinquent accounts. Credit quality is reviewed at inception and is re-evaluated as needed based on customer-specific circumstances. Receivable balances 60 days to 89 days past due are reviewed and may be placed on nonaccrual status based on customer-specific circumstances. Receivable balances are placed on nonaccrual status upon reaching greater than 89 days past due. Upon receipt of payment on nonaccrual financing receivables, interest income is recognized and accrual of interest is resumed once the account has been made current or the specific circumstances have been resolved.

As of March 31, 2012 and December 31, 2011, the recorded investment in past-due finance lease receivables on nonaccrual status was $2,813 and $1,740, respectively. The recorded investment in finance lease receivables past due 90 days or more and still accruing interest was $0 and $114 as of March 31, 2012 and December 31, 2011, respectively. The recorded investment in impaired notes receivable as of March 31, 2012 and December 31, 2011 was $2,047 and $2,047, respectively, and was fully reserved. The following table summarizes the Company’s aging of past-due notes receivable balances as of March 31, 2012:

30-59 days past due	$	—
60-89 days past due	—
> 89 days past due	1,564
Total past due	$	1,564

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Inventories

3 Months Ended

Mar. 31, 2012

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Major classes of inventories are summarized as follows:

	March 31, 2012		December 31, 2011
Finished goods	$	217,108	$	188,571
Service parts	159,442		152,597
Raw materials and work in process	117,281		99,732
Total inventories	$	493,831	$	440,900

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Debt

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

DEBT

DEBT

Outstanding debt balances were as follows:

	March 31, 2012		December 31, 2011
Notes payable:
Uncommitted lines of credit	$	39,281	$	21,572
Other	144		150
	$	39,425	$	21,722
Long-term debt:
Credit facility	$	303,000	$	291,000
Senior notes	300,000		300,000
Industrial development revenue bonds	11,900		11,900
Other	3,195		3,254
	$	618,095	$	606,154

As of March 31, 2012, the Company had various international short-term uncommitted lines of credit with borrowing limits of $110,700. The weighted-average interest rate on outstanding borrowings on the short-term uncommitted lines of credit as of March 31, 2012 and December 31, 2011 was 2.63 percent and 4.23 percent, respectively. The decline in the weighted-average interest rate is attributable to the change in mix of borrowings in foreign entities. Short-term uncommitted lines mature in less than one year. The amount available under the short-term uncommitted lines at March 31, 2012 was $71,419.

In June 2011, the Company entered into a five-year credit facility, which replaced its previous credit facility. As of March 31, 2012, the Company had borrowing limits under the credit facility totaling $500,000. Under the terms of the credit facility agreement, the Company has the ability, subject to various approvals, to increase the borrowing limits by $250,000. Up to $50,000 of the revolving credit facility is available under a swing line subfacility. The weighted-average interest rate on outstanding credit facility borrowings as of March 31, 2012 and December 31, 2011 was 1.44 percent and 1.49 percent, respectively, which is variable based on the London Interbank Offered Rate (LIBOR). The amount available under the credit facility as of March 31, 2012 was $197,000.

In March 2006, the Company issued senior notes in an aggregate principal amount of $300,000 with a weighted-average fixed interest rate of 5.50 percent. The maturity dates of the senior notes are staggered, with $75,000, $175,000 and $50,000 becoming due in 2013, 2016 and 2018, respectively. Additionally, the Company entered into a derivative transaction to hedge interest rate risk on $200,000 of the senior notes, which was treated as a cash flow hedge. This reduced the effective interest rate from 5.50 percent to 5.36 percent. As of March 31, 2012, although it is due within twelve months, $75,000 of the senior notes remain classified as long-term debt because of the Company's intent and ability to fund the repayment using amounts available under its credit facility, unless an alternative source of financing with more favorable terms is available upon maturity.

In 1997, industrial development revenue bonds were issued on behalf of the Company. The proceeds from the bond issuances were used to construct new manufacturing facilities in the United States. The Company guaranteed the payments of principal and interest on the bonds by obtaining letters of credit. The bonds were issued with a 20-year original term and are scheduled to mature in 2017. Each industrial development revenue bond carries a variable interest rate, which is reset weekly by the remarketing agents. The weighted-average interest rate on the bonds was 0.78 percent and 0.77 percent as of March 31, 2012 and December 31, 2011, respectively.

The Company’s debt agreements contain various restrictive financial covenants, including net debt to capitalization and net interest coverage ratios. As of March 31, 2012, the Company was in compliance with the financial covenants in its debt agreements.

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Segment Information - Summary of Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Summary of Segment Information
Total sales	$ 698,491	$ 614,157
Intersegment revenue	32,382	34,892
Operating profit (loss)	54,644	8,869
Capital expenditures	12,297	10,902
Depreciation	13,282	11,983
Property, plant and equipment, at cost	652,695	656,311	642,256
Total assets	2,631,392	2,531,537	2,517,443
Diebold North America [Member]
Summary of Segment Information
Total sales	399,920	305,964
Intersegment revenue	13,607	19,626
Operating profit (loss)	55,297	16,152
Capital expenditures	5,285	5,779
Depreciation	6,895	6,759
Property, plant and equipment, at cost	465,358	462,840
Total assets	1,057,410	1,012,990
Diebold International [Member]
Summary of Segment Information
Total sales	298,571	308,193
Intersegment revenue	18,775	15,266
Operating profit (loss)	(653)	(7,283)
Capital expenditures	7,012	5,123
Depreciation	6,387	5,224
Property, plant and equipment, at cost	187,337	193,471
Total assets	$ 1,573,982	$ 1,518,547

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Segment Information - Revenue By Service and Product Solution (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenue summary by product and service solution
Services	$ 396,865	$ 364,374
Products	301,626	249,783
Total sales	698,491	614,157
Financial self-service [Member]
Revenue summary by product and service solution
Services	299,935	264,456
Products	261,067	198,640
Total sales	561,002	463,096
Security [Member]
Revenue summary by product and service solution
Services	96,840	99,918
Products	38,033	43,413
Total sales	134,873	143,331
Financial Self Service And Security [Member]
Revenue summary by product and service solution
Total sales	695,875	606,427
Election And Lottery Systems [Member]
Revenue summary by product and service solution
Total sales	$ 2,616	$ 7,730

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Fair Value of Assets and Liabilities - Summary of Liabilities Recorded at Carrying Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Fair value and carrying value of the Company's debt instruments
Current notes payable - Fair value	$ 39,425	$ 21,722
Long-term debt - Fair Value	628,538	612,551
Total debt instruments - Fair value	667,963	634,273
Notes Payable, Current	39,425	21,722
Long-term debt - Carrying value	618,095	606,154
Total debt instruments - Carrying value	$ 657,520	$ 627,876

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Guarantees and Product Warranties (Tables)

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Changes in warranty liability balance

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

	2012			2011
Balance at January 1	$	63,355		$	78,313
Current period accruals (a)	15,934			18,411
Current period settlements	(14,608		)	(19,252		)
Balance at March 31	$	64,681		$	77,472

(a) includes the impact of foreign exchange rate fluctuations

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Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Notes payable - current:
Uncommitted lines of credit	$ 39,281	$ 21,572
Other	144	150
Short-term Debt	39,425	21,722
Long-term debt:
Credit facility	303,000	291,000
Senior notes	300,000	300,000
Industrial development revenue bonds	11,900	11,900
Other	3,195	3,254
Long-term debt	$ 618,095	$ 606,154

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Restructuring and Other Charges

3 Months Ended

Mar. 31, 2012

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER CHARGES

RESTRUCTURING AND OTHER CHARGES

The following table summarizes the impact of the Company’s restructuring charges (accrual adjustments) on the condensed consolidated statements of income for three months ended March 31:

	2012			2011
Cost of sales – services	$	(669	)	$	6,074
Cost of sales – products	5			123
Selling and administrative expense	2,387			5,604
Total	$	1,723		$	11,801

The following table summarizes the Company’s net restructuring charges (accrual adjustments) within continuing operations for its Diebold North America (DNA) and Diebold International (DI) reporting segments for the three months ended March 31:

	2012		2011
DNA
Severance	$	1,107	$	(7	)
DI
Severance	128		11,605
Other (1)	488		203
Total	$	1,723	$	11,801

(1) Other costs in the DI segment include legal fees, accelerated depreciation and lease termination fees.

Restructuring charges of $1,723 for the three months ended March 31, 2012 related to the Company’s global shared services plan, which entails expanding the Company's current information technology (IT) center in India, to create a global shared services center. Expanding the shared services center will require that the Company transfer global back-office work that currently resides in other geographies. Over the next two years, the Company anticipates approximately 200 IT and financial services-related jobs globally will be impacted by this decision and incurring additional restructuring costs of $1,500 in 2012 and up to $9,500 in future periods. As management concludes on certain aspects of the global shared services plan, the anticipated future costs related to this plan are subject to change.

Restructuring charges of $330 and $11,580 for the three months ended March 31, 2012 and 2011, respectively, related to the Company’s plan for the EMEA reorganization, which realigns resources and leveraged the existing shared services center. As of March 31, 2012, the Company anticipates additional restructuring costs in the range of $400 to $1,100 to be incurred during the remainder of 2012 related to this plan.

Other net restructuring (accrual adjustments) charges were $(330) and $221 for the three months ended March 31, 2012 and 2011. Included in service cost of sales is a benefit of $669 related to restructuring accrual adjustments for the three months ended March 31, 2012.

The following table summarizes the Company’s cumulative total restructuring costs for the significant plans:

	EMEA Reorganization		Global Shared Services
Costs incurred to date:
DNA	$	—	$	1,437
DI	19,780		286
Total costs incurred to date	$	19,780	$	1,723

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

Balance at January 1, 2012	$	10,136
Liabilities incurred	1,723
Liabilities paid	(1,945		)
Balance at March 31, 2012	$	9,914

Other Charges

Other charges consist of items that the Company determines are non-routine in nature. Net non-routine expense of $924 and $5,771 were included in selling and administrative expense for the three months ended March 31, 2012 and 2011, respectively. Net non-routine expenses for 2012 and 2011 consisted primarily of legal and compliance costs related to the FCPA investigation.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Computation of earnings per share under the treasury stock method and the effect on the weighted-average number of shares of dilutive potential common stock:

The following represents amounts used in computing earnings per share and the effect on the weighted-average number of shares of dilutive potential common shares for the three months ended March 31:

	2012		2011
Numerator:
Income used in basic and diluted earnings per share:
Income from continuing operations, net of tax	$	45,163	$	2,512
Loss from discontinued operations, net of tax	—		(11		)
Net income attributable to Diebold, Incorporated	$	45,163	$	2,501
Denominator (in thousands):
Weighted-average number of common shares used in basic earnings per share	62,725		65,762
Effect of dilutive shares	608		468
Weighted-average number of shares used in diluted earnings per share	63,333		66,230
Basic earnings per share:
Net income from continuing operations	$	0.72	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.72	$	0.04
Diluted earnings per share:
Net income from continuing operations	$	0.71	$	0.04
Loss from discontinued operations	—		—
Net income attributable to Diebold, Incorporated	$	0.71	$	0.04
Anti-dilutive shares (in thousands):
Anti-dilutive shares not used in calculating diluted weighted-average shares	1,596		2,023

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Major classes of inventories
Finished goods	$ 217,108	$ 188,571
Service parts	159,442	152,597
Raw materials and work in process	117,281	99,732
Total inventories	$ 493,831	$ 440,900

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Share-Based Compensation - Stock Options (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 years
Options outstanding and exercisable under the Company's 1991 Equity and Performance Incentive Plan
Outstanding, Shares, Beginning balance	3,201
Outstanding, Weighted average exercise price, Beginning balance	$ 36.70
Expired or forfeited, Shares	(400)
Expired or forfeited, Weighted average exercise price	$ 36.70
Exercised, Shares	(331)
Exercised, Weighted average exercise price	$ 29.93
Granted, Shares	539
Granted, Weighted average exercise price	$ 34.89
Outstanding, Shares, Ending balance	3,009
Outstanding, Weighted average exercise price, Ending balance	$ 37.12
Outstanding, Weighted Average Remaining Contractual Term	6
Outstanding, Aggregate Intrinsic Value	$ 13,856	[1]
Options exercisable, Shares	1,910
Options exercisable, Weighted average exercise price	$ 39.76
Option exercisable, Weighted average remaining contractual term	4
Option exercisable, aggregate Intrinsic Value	7,265	[1]
Options vested and expected to vest, Shares	2,982	[2]
Options vested and expected to vest, Weighted average exercise price	$ 37.16	[2]
Options vested and expected to vest, Weighted average remaining contractual term	6	[2]
Options vested and expected to vest, aggregate intrinsic value	$ 13,697	[1],[2]

[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 2012 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 March 31, 2012. 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.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 45,965	$ 4,135
Foreign currency hedges and translation	25,565	14,945
Interest rate hedges:
Gain recognized in other comprehensive income	170	40
Less: reclassification adjustment for gains included in net income	94	89
Total interest rate hedges	76	(49)
Pension and other postretirement benefits:
Net actuarial loss amortization	4,332	2,503
Net prior service cost (benefit) amortization	(64)	(64)
Other	5	(1,710)
Total pension and other postretirement benefits	4,273	729
Unrealized gain (loss), net on securities
Unrealized holding losses arising during period	(416)	(837)
Less: reclassification adjustment for gains (losses) included in net income	328	(164)
Total unrealized gain (loss), net on securities	(744)	(673)
Other comprehensive income, net of tax	29,170	14,952
Comprehensive income	75,135	19,087
Less: comprehensive income attributable to noncontrolling interests	794	1,905
Comprehensive income attributable to Diebold, Incorporated	$ 74,341	$ 17,182

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Share-Based Compensation

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

The Company’s share-based compensation payments to employees are recognized in the statement of income based on their grant-date fair values during the period in which the employee is required to provide services in exchange for the award. Share-based compensation is recognized as a component of selling and administrative expense. Total share-based compensation expense for the three months ended March 31, 2012 and 2011 was $3,797 and $3,435, respectively.

Options outstanding and exercisable as of March 31, 2012 under the Company’s 1991 Equity and Performance Incentive Plan (as Amended and Restated as of April 13, 2009) and changes during the three months ended March 31, 2012, were as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (1)
	(in thousands)		(per share)		(in years)
Outstanding at January 1, 2012	3,201		$	36.70
Expired or forfeited	(400	)	$	36.70
Exercised	(331	)	$	29.93
Granted	539		$	34.89
Outstanding at March 31, 2012	3,009		$	37.12	6	$	13,856
Options exercisable at March 31, 2012	1,910		$	39.76	4	$	7,265
Options vested and expected to vest (2) at March 31, 2012	2,982		$	37.16	6	$	13,697

(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 2012 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 March 31, 2012. 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 tables summarize information on non-vested RSUs, performance shares and deferred shares for the three months ended March 31, 2012:

	Number of Shares		Weighted-Average Grant-Date Fair Value
	(in thousands)
RSUs:
Non-Vested at January 1, 2012	717		$	30.69
Forfeited	(29	)	$	29.65
Vested	(130	)	$	24.91
Granted	209		$	34.97
Non-Vested at March 31, 2012	767		$	32.88
Performance Shares (1):
Non-Vested at January 1, 2012	727		$	34.70
Forfeited	(207	)	$	30.55
Vested	(86	)	$	29.25
Granted	285		$	44.25
Non-Vested at March 31, 2012	719		$	40.33
Director Deferred Shares:
Non-Vested at March 31, 2012	19		$	33.98
Vested at March 31, 2012	96		$	33.88
Outstanding at March 31, 2012	115		$	33.90

(1) Non-vested performance shares are based on a maximum potential payout. Actual shares granted at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance share objectives.

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Restructuring and Other Charges - Restructuring Charges By Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 1,723		$ 11,801
Diebold North America [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	1,107		(7)
Diebold International [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	128		11,605
Diebold International [Member] | Other Restructuring Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 488	[1]	$ 203	[1]

[1] Other costs in the DI segment include legal fees, accelerated depreciation and lease termination fees.

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Equity (Tables)

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

Changes in shareholders' equity attributable to Diebold, Incorporated and the noncontrolling interests

The following table presents changes in shareholders' equity attributable to Diebold, Incorporated and the noncontrolling interests for the three months ended March 31:

	2012			2011
Diebold, Incorporated shareholders' equity
Balance at beginning of period	$	826,986		$	961,155
Comprehensive income attributable to Diebold, Incorporated	74,341			17,182
Common shares	686			537
Additional capital	13,013			8,257
Treasury shares	(2,885		)	(21,451		)
Dividends declared	(18,094		)	(18,650		)
Balance at end of period	$	894,047		$	947,030
Noncontrolling interests
Balance at beginning of period	$	31,274		$	28,659
Comprehensive income attributable to noncontrolling interests	794			1,905
Distributions to noncontrolling interest holders	(1,112		)	(310		)
Balance at end of period	$	30,956		$	30,254

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Summary of Segment Information

The following table presents information regarding the Company’s segment information for three months ended March 31:

	2012			2011
DNA
Customer revenues	$	399,920		$	305,964
Intersegment revenues	13,607			19,626
Operating profit	55,297			16,152
Capital expenditures	5,285			5,779
Depreciation	6,895			6,759
Property, plant and equipment, at cost	465,358			462,840
Total assets	1,057,410			1,012,990
DI
Customer revenues	298,571			308,193
Intersegment revenues	18,775			15,266
Operating loss	(653		)	(7,283		)
Capital expenditures	7,012			5,123
Depreciation	6,387			5,224
Property, plant and equipment, at cost	187,337			193,471
Total assets	1,573,982			1,518,547
TOTAL
Customer revenues	698,491			614,157
Intersegment revenues	32,382			34,892
Operating profit	54,644			8,869
Capital expenditures	12,297			10,902
Depreciation	13,282			11,983
Property, plant and equipment, at cost	652,695			656,311
Total assets	2,631,392			2,531,537

Revenue summary by geographic region

The following table presents information regarding the Company’s revenue by geographic region for three months ended March 31:

	2012		2011
Diebold North America	$	399,920	$	305,964
Diebold International:
Latin America including Brazil	137,668		152,888
Asia Pacific	96,200		83,889
Europe, Middle East and Africa	64,703		71,416
Total Diebold International	298,571		308,193
Total customer revenues	$	698,491	$	614,157

Revenue summary by service and product solution

The following table presents information regarding the Company’s revenue by service and product solution for three months ended March 31:

	2012		2011
Financial self-service:
Services	$	299,935	$	264,456
Products	261,067		198,640
Total financial self-service	561,002		463,096
Security
Services	96,840		99,918
Products	38,033		43,413
Total security	134,873		143,331
Total financial self-service & security	695,875		606,427
Election and lottery systems	2,616		7,730
Total customer revenues	$	698,491	$	614,157

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company uses derivatives to mitigate the economic consequences associated with fluctuations in currencies and interest rates.

FOREIGN EXCHANGE

Net Investment Hedges The Company has international subsidiaries with net balance sheet positions that generate cumulative translation adjustments within OCI. The Company uses derivatives to manage potential changes in value of its net investments in Brazil. The Company uses the forward-to-forward method for its quarterly retrospective and prospective assessments of hedge effectiveness. No ineffectiveness results if the notional amount of the derivative matches the portion of the net investment designated as being hedged because the Company uses derivative instruments with underlying exchange rates consistent with its functional currency and the functional currency of the hedged net investment. Changes in value that are deemed effective are accumulated in OCI where they will remain until they are reclassified to income together with the gain or loss on the entire investment upon substantial liquidation of the subsidiary. The fair value of the Company’s net investment hedge contracts was $(258) and $1,768 as of March 31, 2012 and December 31, 2011, respectively. The loss recognized in OCI on net investment hedge derivative instruments was $2,026 in the three months ended March 31, 2012.

Non-Designated Hedges A substantial portion of the Company’s operations and revenues are international. As a result, changes in foreign exchange rates can create substantial foreign exchange gains and losses from the revaluation of non-functional currency monetary assets and liabilities. The Company’s policy allows the use of foreign exchange forward contracts with maturities of up to 24 months to mitigate the impact of currency fluctuations on those foreign currency asset and liability balances. The Company elected not to apply hedge accounting to its foreign exchange forward contracts. Thus, spot-based gains/losses offset revaluation gains/losses within foreign exchange loss, net and forward-based gains/losses represent interest expense. The fair value of the Company’s non-designated foreign exchange forward contracts was $832 and $(1,558) as of March 31, 2012 and December 31, 2011, respectively.

The following table summarizes the (loss) gain recognized on non-designated foreign-exchange derivative instruments for the three months ended March 31:

Income Statement Location	2012			2011
Interest expense	$	(1,391	)	$	(1,849	)
Foreign exchange gain (loss), net	(2,434		)	(6,217		)
	$	(3,825	)	$	(8,066	)

INTEREST RATE

Cash Flow Hedges The Company has variable rate debt and is subject to fluctuations in interest related cash flows due to changes in market interest rates. The Company’s policy allows derivative instruments designated as cash flow hedges that fix a portion of future variable-rate interest expense. As of March 31, 2012, the Company has a pay-fixed receive-variable interest rate swap, with a total notional amount of $25,000, to hedge against changes in the LIBOR benchmark interest rate on a portion of the Company’s LIBOR-based borrowings. Changes in value that are deemed effective are accumulated in OCI and reclassified to interest expense when the hedged interest is accrued. To the extent that it becomes probable that the Company’s variable rate borrowings will not occur, the gains or losses on the related cash flow hedges will be reclassified from OCI to interest expense.

In December 2005 and January 2006, the Company executed cash flow hedges by entering into receive-variable and pay-fixed interest rate swaps, with a total notional amount of $200,000, related to the senior notes issuance in March 2006. Amounts previously recorded in OCI related to the pre-issuance cash flow hedges will continue to be reclassified on a straight-line basis through February 2016.

The fair value of the Company’s interest rate contracts was $(3,631) and $(3,796) as of March 31, 2012 and December 31, 2011, respectively.

Gains and losses related to interest rate contracts that are reclassified from accumulated OCI are recorded in interest expense on the statement of income. The Company anticipates reclassifying $742 from OCI to interest expense within the next 12 months.