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's previous reportable operating segments included the lines of business (LoB): Services, Systems, and Software. The Company began to reorganize its management team reporting to the CODM and assess its new operating model during the first half of 2018. The results of re-evaluating the LoB operating model highlighted the need to transform the Company’s operating model to Banking and Retail. The renewed focus on the customer experience has led the Company to reorganize its operating model. The LoBs will continue to develop solutions, but will operate as cost centers focused on designing and delivering innovative and customer-driven products. The realignment to Banking and Retail enables quicker decision making, reduces complexity, makes better use of talent and promotes the best possible experience for the Company’s customers. Beginning with the second quarter of 2018, the Company's reportable operating segments are based on the following solutions: Eurasia Banking, Americas Banking and Retail. As a result, the Company reclassified comparative periods for consistency.

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, managed at the corporate level; that are not routinely used in the management of the segments; or information that is impractical to allocate. These unallocated costs include certain corporate costs, 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. Corporate charges not allocated to segments include headquarter-based costs associated with procurement, human resources, compensation and benefits, finance and accounting, global development/engineering, global strategy/mergers and acquisitions, global IT, tax, treasury and legal. Assets are not allocated to segments, and thus are not included in the assessment of segment performance, and consequently, we do not disclose total assets and depreciation and amortization expense by reportable operating segment.

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						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net sales summary by segment
Eurasia Banking	$	437.5		$	473.5		$	872.6		$	911.5
Americas Banking	370.6			370.4			704.3			752.0
Retail	297.5			290.0			592.9			573.2
Total revenue	$	1,105.6		$	1,133.9		$	2,169.8		$	2,236.7

Intersegment revenue
Eurasia Banking	$	31.7		$	20.3		$	53.0		$	57.0
Americas Banking	3.5			8.8			9.0			17.3
Total intersegment revenue	$	35.2		$	29.1		$	62.0		$	74.3

Segment operating profit
Eurasia Banking	$	17.7		$	29.9		$	36.6		$	51.0
Americas Banking	(0.1		)	10.1			7.6			35.5
Retail	6.2			26.3			17.3			44.0
Total segment operating profit	23.8			66.3			61.5			130.5

Corporate charges not allocated to segments ⁽¹⁾	(17.9		)	(25.9		)	(37.4		)	(48.4		)
Restructuring charges	(2.2		)	(14.4		)	(6.1		)	(27.3		)
Net non-routine expense	(135.2		)	(56.1		)	(170.5		)	(133.5		)
	(155.3		)	(96.4		)	(214.0		)	(209.2		)
Operating profit (loss)	(131.5		)	(30.1		)	(152.5		)	(78.7		)
Other income (expense)	(31.5		)	(29.8		)	(54.4		)	(56.0		)
Income (loss) before taxes	$	(163.0	)	$	(59.9	)	$	(206.9	)	$	(134.7	)


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

Net non-routine expense consists of items that the Company has determined are non-routine in nature and not allocated to the reportable operating segments. Net non-routine expense of $135.2 for the three months ended June 30, 2018 was due to the goodwill impairment charge of $90.0 and acquisition integration expenses of $14.5 primarily within selling and administrative expense and purchase accounting pre-tax charges for amortization of acquired intangibles of $29.3. Net non-routine expense of $170.5 for the six months ended June 30, 2018 was due to the goodwill impairment charge of $90.0 and acquisition integration expenses of $29.6, primarily within selling and administrative expense, and purchase accounting pre-tax charges for amortization of acquired intangibles of $60.5.

Net non-routine expense of $56.1 for the three months ended June 30, 2017 was primarily due to acquisition and divestiture related costs inclusive of integration expenses of $22.1 primarily within selling and administrative expense and purchase accounting pretax charges, which included deferred revenue of $10.3 and $32.8 in amortization of acquired intangibles. Net non-routine expense of $133.5 for the six months ended June 30, 2017 was primarily due to legal, acquisition and divestiture related costs of $17.4 inclusive of the mark-to-market impact on Diebold Nixdorf AG stock options and integration expenses of $34.9 primarily within selling and administrative expense and purchase accounting pretax charges, which included deferred revenue of $20.7 and $64.6 in amortization of acquired intangibles.