Restructuring and Other Charges

6 Months Ended

Jun. 30, 2011

Restructuring and Other Charges [Abstract]

RESTRUCTURING AND OTHER CHARGES

NOTE 15: RESTRUCTURING AND OTHER CHARGES

The following table summarizes the impact of the Company’s restructuring charges (benefits) on the condensed consolidated statements of income:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Cost of sales — products	$	251	$	696		$	374	$	482
Cost of sales — services		2,555		(524	)		8,629		(210	)
Selling and administrative expense		1,667		1,079			7,271		2,236
Research, development and engineering expense		12		(57	)		12		(198	)
Total	$	4,485	$	1,194		$	16,286	$	2,310

The following table summarizes the Company’s restructuring charges (benefits) within continuing operations for its DNA and Diebold International (DI) reporting segments:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
DNA
Severance	$	802	$	518	$	795	$	1,883
Other		—		447		—		(117	)
DI
Severance		2,844		194		14,449		378
Other (1)		839		35		1,042		166
Total	$	4,485	$	1,194	$	16,286	$	2,310

(1) Net other restructuring charges in the DI segment include legal fees, accelerated depreciation, facility refurbishment and lease termination costs.

Restructuring charges of $3,452 and $15,032 for the three and six months ended June 30, 2011 related to the Company’s plan for the EMEA reorganization, which realigns resources and further leverages the existing shared services center. As of June 30, 2011, the Company anticipates additional restructuring costs in the range of $10,000 to $13,000 to be incurred into 2012 related to its EMEA restructuring plan. As management concludes on certain aspects of the EMEA restructuring plan, the anticipated future costs related to this plan are subject to change.

Restructuring charges related to reductions in the Company’s global workforce were $172 and $552 for the three months ended June 30, 2011 and 2010, respectively and $279 and $1,930 for the six months ended June 30, 2011 and 2010, respectively. These charges included realignment of the organization and resources to better support opportunities in emerging growth markets as well as consolidation of certain international facilities in efforts to optimize overall operational performance. This plan resulted in a workforce reduction which primarily affected Canton, Ohio area facilities. The Company does not expect any material remaining costs related to this workforce reduction.

Restructuring charges related to the Company’s strategic global manufacturing realignment plans were $230 and $648 for the three months ended June 30, 2011 and 2010, respectively and $344 and $356 for the six months ended June 30, 2011 and 2010, respectively.

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

			Global		Global
	EMEA		Workforce		Manufacturing
	Reorganization		Reductions		Realignment
Costs incurred to date:
DNA	$	—	$	22,227	$	11,579
DI		15,032		20,571		25,409
Total costs incurred to date	$	15,032	$	42,798	$	36,988

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

Balance as of January 1, 2011	$	3,340
Liabilities incurred		16,286
Liabilities paid		(7,664	)
Balance as of June 30, 2011	$	11,962

Other Charges and Expense Reimbursements

Other charges and expense reimbursements consist of items that the Company determines are non-routine in nature. Net non-routine expense of $13,441 impacted the six months ended June 30, 2011 compared to net non-routine income of $3,073 in the same period of 2010. Net non-routine expenses for 2011 consisted primarily of legal and compliance costs related to the FCPA investigation and were recorded in selling and administrative expense. Net non-routine income for 2010 consisted primarily of reimbursements from the Company’s director and officer (D&O) insurance carriers and was recorded in selling and administrative expense, partially offset by costs related to the FCPA investigation.