Restructuring, Impairment and Other Charges

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

Restructuring Charges

The following table summarizes the impact of the Company’s restructuring charges (accrual adjustments) on the condensed consolidated statements of operations:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013		2012			2013		2012
Cost of sales – services	$	4,235	$	(196	)	$	6,859	$	(865	)
Cost of sales – products	78		100			217		105
Selling and administrative expense	1,629		813			7,516		3,200
Research, development and engineering expense	1,613		—			2,466		—
Total	$	7,555	$	717		$	17,058	$	2,440

The following table summarizes the Company’s net restructuring charges for its Diebold North America (DNA) and Diebold International (DI) reporting segments:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
DNA
Severance	$	3,883	$	450	$	13,411	$	1,557
DI
Severance	3,593		164		3,507		292
Other	79		103		140		591
Total	$	7,555	$	717	$	17,058	$	2,440

During the first quarter 2013, the Company announced a multi-year realignment plan. Certain aspects of this plan were previously disclosed under the Company's global realignment plan and global shared services plan. This multi-year realignment will focus on globalizing the Company's service organization, create a unified center-led global organization for research and development as well as transform the Company's general and administrative cost structure. Restructuring charges were $7,555 and $717 for the three months ended June 30, 2013 and 2012, respectively, and $17,058 and $2,440 for the six months endedJune 30, 2013 and 2012, respectively, related to the Company's realignment plan. As of June 30, 2013, the Company anticipates additional restructuring costs of in the range of $10,000 to $20,000. As management concludes on certain aspects of the realignment plan, the anticipated future costs related to this plan are subject to change. As of June 30, 2013, cumulative total restructuring costs for the realignment plan were $24,993 and $10,795 in DNA and DI, respectively.

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

	2013			2012
Balance at January 1	$	11,844		$	10,136
Liabilities incurred	17,058			2,440
Liabilities paid	(17,788		)	(3,587		)
Balance at June 30	$	11,114		$	8,989

Impairment and Other Charges

In the second quarter of 2012, the Company recorded an impairment charge within DNA of $6,701 related to a portion of its global enterprise resource planning (ERP) system. Previously capitalized software and software-related costs were impaired due to changes in the ERP implementation plan related to configuration and design.

Other charges consist of items that the Company determines are non-routine in nature. Net non-routine expenses of $53,017 and $1,267 impacted the six months endedJune 30, 2013 and 2012, respectively. Non-routine expenses within selling and administrative expense for the first six months of 2013 included $28,000 of estimated pre-tax losses related to the potential outcome of the FCPA investigation, $17,500 pre-tax charge related to settlement of the securities legal action (refer to note 13), and executive severance costs, including accelerated share-based compensation expense of $2,982 (pre-tax). Non-routine income for 2013 related to a pre-tax gain of $2,191 from the sale of certain U.S. manufacturing operations to a long-time supplier. Net non-routine expenses for 2012 consisted primarily of legal and compliance costs related to the FCPA investigation.