Segment Information

3 Months Ended

Mar. 31, 2020

Segment Reporting Disclosure [Text Block]

Segment and Revenue Information

The Company's accounting policies result in segments 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 reportable operating segments are based on the following solutions: Eurasia Banking, Americas Banking and Retail.

Segment revenue represents revenues from sales to external customers. Segment operating profit is defined as revenues less expenses direct and allocated 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 and amortization of acquired intangible assets, 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.

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



	Three Months Ended
	March 31,
	2020			2019
Net sales summary by segment
Eurasia Banking	$	310.5		$	382.6
Americas Banking	344.7			362.7
Retail	255.5			282.8
Total revenue	$	910.7		$	1,028.1

Intersegment revenue
Eurasia Banking	$	21.4		$	55.2
Americas Banking	1.3			2.2
Total intersegment revenue	$	22.7		$	57.4

Segment gross profit
Eurasia Banking	$	89.8		$	109.0
Americas Banking	104.5			82.2
Retail	59.9			55.8
Total segment gross profit	254.2			247.0

Segment selling and administrative expense
Eurasia Banking	46.1			61.9
Americas Banking	39.7			50.3
Retail	36.7			37.8
Total segment selling and administrative expense	122.5			150.0

Segment research, development and engineering expense
Eurasia Banking	12.0			13.4
Americas Banking	11.1			13.4
Retail	7.9			9.9
Total segment research, development and engineering expense	31.0			36.7

Segment operating profit
Eurasia Banking	31.7			33.7
Americas Banking	53.7			18.5
Retail	15.3			8.1
Total segment operating profit	100.7			60.3

Corporate charges not allocated to segments ⁽¹⁾	(37.7		)	(33.2		)
Restructuring and DN Now transformation expenses	(41.6		)	(15.2		)
Net non-routine expense	(47.4		)	(36.4		)
	(126.7		)	(84.8		)
Operating profit (loss)	(26.0		)	(24.5		)
Other income (expense)	(47.4		)	(46.6		)
Loss before taxes	$	(73.4	)	$	(71.1	)


⁽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 $47.4 for the three months ended March 31, 2020 primarily consisted of purchase accounting pre-tax charges for amortization of acquired intangibles, legal, consulting and deal expense and a charge related to a certain onerous services contract. Net non-routine expense of $36.4 for the three months ended March 31, 2019 was primarily due purchase accounting pre-tax charges for amortization of acquired intangibles, and legal, consulting and deal expense.

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



	Three Months Ended
	March 31,
	2020		2019
Segments
Eurasia Banking
Services	$	206.0	$	247.0
Products	104.5		135.6
Total Eurasia Banking	310.5		382.6

Americas Banking
Services	239.5		240.8
Products	105.2		121.9
Total Americas Banking	344.7		362.7

Retail
Services	142.3		140.9
Products	113.2		141.9
Total Retail	255.5		282.8

Total net sales	$	910.7	$	1,028.1

In the following table, revenue is disaggregated by timing of revenue recognition at March 31:



Timing of revenue recognition	2020		2019
Products transferred at a point in time	35	%	39	%
Products and services transferred over time	65	%	61	%
Net sales	100	%	100	%

Contract balances

The following table provides 2020 information about receivables and deferred revenue, which represent contract liabilities from contracts with customers:



Contract balance information	Trade Receivables		Contract liabilities
Balance at December 31	$	619.3	$	320.5
Balance at March 31	$	594.5	$	371.4

Contract assets are minimal for the periods presented. The amount of revenue recognized during the three months ended March 31, 2020 and 2019 from performance obligations satisfied (or partially satisfied) in previous periods, mainly due to the changes in the estimate of variable consideration and contract modifications was de minimis. There have been $4.8 and $3.4 during the three months ended March 31, 2020 and 2019, respectively, of impairment losses recognized as bad debt related to receivables or contract assets arising from the Company's contracts with customers.

As of December 31, 2019, the Company had $320.5 of unrecognized deferred revenue constituting the remaining performance obligations that are unsatisfied (or partially unsatisfied). During the three months ended March 31, 2020, the Company recognized revenue of $138.3 related to the Company's deferred revenue balance at December 31, 2019.

Contract assets are the rights to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets of the Company primarily relate to the Company's rights to consideration for goods shipped and services provided but not contractually billable at the reporting date.

The contract assets are reclassified into the receivables balance when the rights to receive payment become unconditional. Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing. In addition, contract liabilities are recorded as advanced payments for products and other deliverables that are billed to and collected from customers prior to revenue being recognizable.

Transaction price allocated to the remaining performance obligations

As of March 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1,500. The Company generally expects to recognize revenue on the remaining performance obligations over the next twelve months. The Company enters into service agreements with cancellable terms after a certain period without penalty. Unsatisfied obligations reflect only the obligation during the initial term. The Company applies the practical expedient in ASC paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.