Segment Information

The Company's accounting policies derive segment results that are the same as those the Chief Operating Decision Maker (CODM) regularly reviews and uses to make decisions, allocate resources and assess performance. The Company continually considers its operating structure and the information subject to regular review by its Chief Executive Officer, who is the CODM, to identify reportable operating segments. The Company’s operating structure is based on a number of factors that management uses to evaluate, view and run its business operations, which currently includes, but is not limited to, product, service and solution. The Company measures the performance of each segment based on several metrics, including net sales and segment operating profit. The CODM uses these results to make decisions, allocate resources and assess performance by LOB.

Segment revenue represents revenues from sales to external customers. Segment operating profit is defined as revenues less expenses identifiable to those segments. The Company does not allocate to its segments certain operating expenses, which it manages at the corporate level; that are not routinely used in the management of the segments; or information that is impractical to report. These unallocated costs include certain corporate costs, amortization of acquired intangible assets and deferred revenue, restructuring charges, impairment charges, legal, indemnification, and professional fees related to acquisition and divestiture expenses, along with other income (expenses). Segment operating profit reconciles to consolidated income (loss) before income taxes by deducting corporate costs and other income or expense items that are not attributed to the segments. Assets are not allocated to segments, and thus are not included in the assessment of segment performance, and consequently, we do not disclose total assets and depreciation and amortization expense by reportable operating segment.

For additional information related to the Company's revenue sources, refer to note 2. In addition to the considerations mentioned above regarding the CODM, the Company has assessed several factors in disaggregating revenue which include the information disclosed in this report and other disaggregated revenue information provided in investor presentations and board of director presentations.

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



	Three Months Ended
	March 31,
	2018			2017
Net sales summary by segment
Services	$	592.2		$	573.2
Software	119.5			110.4
Systems	352.5			419.2
Total revenue	$	1,064.2		$	1,102.8

Segment operating profit
Services	$	73.8		$	81.2
Software	7.4			5.3
Systems	(25.5		)	(3.9		)
Total segment operating profit	55.7			82.6

Corporate charges not allocated to segments ⁽¹⁾	(37.5		)	(40.9		)
Restructuring charges	(3.9		)	(12.9		)
Net non-routine expense	(35.3		)	(77.4		)
	(76.7		)	(131.2		)
Operating profit (loss)	(21.0		)	(48.6		)
Other income (expense)	(22.9		)	(26.2		)
Income (loss) before taxes	$	(43.9	)	$	(74.8	)


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

Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the LOBs. Net non-routine expense of $35.3 for the three months ended March 31, 2018 was due to acquisition integration expenses of $15.2 primarily within selling and administrative expense and purchase accounting pre-tax charges for amortization of acquired intangibles of $31.2. Net non-routine expense of $77.4 for the three months ended March 31, 2017 was primarily due to legal, acquisition and divestiture related costs of $18.9 inclusive of the mark-to-market impact on Diebold Nixdorf AG stock options and integration expenses of $12.9 primarily within selling and administrative expense and purchase accounting pretax charges, which included deferred revenue of $10.4 and $31.8 in amortization of acquired intangibles.

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



	Three Months Ended
	March 31,
	2018		2017
Banking
Services and software	$	548.8	$	545.9
Systems	219.9		273.7
Total banking	768.7		819.6
Retail
Services and software	162.9		137.7
Systems	132.6		145.5
Total retail	295.5		283.2
	$	1,064.2	$	1,102.8

The following table presents information regarding the Company’s revenue by geographic region:



	Three Months Ended
	March 31,
	2018		2017
Americas
Services and software	$	270.3	$	278.9
Systems	75.4		117.3
Total Americas	345.7		396.2
EMEA
Services and software	354.2		317.6
Systems	236.8		244.4
Total EMEA	591.0		562.0
AP
Services and software	87.2		87.1
Systems	40.3		57.5
Total AP	127.5		144.6
	$	1,064.2	$	1,102.8

In connection with recent changes in the Company's leadership, the Company anticipates the realignment of its operating model to Banking and Retail. The Company has begun to reorganize its management team reporting to the CODM and assessing its new operating model. The Company continues to assess certain allocations and anticipates the assessment being completed during the second quarter of 2018. Beginning with the second quarter of 2018, the Company anticipates its reportable operating segments will, after the conclusion of the assessment, be based on the following solutions: Banking and Retail. The Company will reclassify comparative periods for consistency following such change. Until such assessment is completed, the CODM will continue to regularly review, make decisions, allocate resources and assess performance based on the current LOB reportable operating segments.