8-K

\

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 25, 2007

DIEBOLD, INCORPORATED

(Exact name of registrant as specified in its charter)

Ohio	1-4879	34-0183970
(State or other jurisdiction	(Commission File Number)	(IRS Employer Identification
of incorporation)		Number)

5995 Mayfair Road, P.O. Box 3077, North Canton, Ohio
(Address of principal executive offices) 44720-8077
(Zip Code)

Registrant’s telephone number, including area code: (330) 490-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On April 25, 2007, Diebold, Incorporated issued a news release announcing its results for the first quarter of 2007. The news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this report shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

Exhibit No.	Exhibit Description
99.1	News Release of Diebold, Incorporated dated April 25, 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DIEBOLD, INCORPORATED
Date: April 25, 2007	By:	/s/Kevin J. Krakora
		Kevin J. Krakora
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	News Release of Diebold, Incorporated dated April 25, 2007.

EX-99.1

Exhibit 99.1

pressrelease

Media contact:	Investor contact:
Mike Jacobsen	John Kristoff
+1 330 490 3796	+1 330 490 5900
jacobsm1@diebold.com	kristoj@diebold.com

FOR IMMEDIATE RELEASE:
April 25, 2007

DIEBOLD REPORTS FIRST QUARTER FINANCIAL RESULTS

Results include $.32 per share restructuring charge related to the closing of the manufacturing facility in Cassis, France

• Cassis manufacturing facility now closed

• New facility in Budapest, Hungary, ramping up production as scheduled

• Year-over-year improvement in global service gross margin

• Strong financial self-service revenue growth of 11.5 percent

NORTH CANTON, Ohio – Diebold, Incorporated (NYSE: DBD) today reported 2007 first quarter revenue of $628.4 million, an increase of 0.8 percent from the first quarter of 2006. The company reported a first quarter net loss of $5.9 million, or $.09 per share. This compares to net income of $12.7 million, or $.18 per share from the first quarter of 2006.

Included in the first quarter 2007 results was a restructuring charge of $.32 per share related to the closing of the manufacturing facility in Cassis, France. Excluding restructuring charges*, diluted earnings per share in the first quarter of 2007 would have been $.23. Net income for the first quarter benefited from a $.05 per share recovery due to the collection of accounts receivable related to election systems that had previously been reserved.

Business Review

Management commentary

“I am pleased with the steady progress we made during the first quarter, as we expected the first half of this year to be challenging,” said Thomas W. Swidarski, Diebold president and chief executive officer. “In financial self-service, we saw revenue growth in all our geographic regions as the market remains healthy and were able to close some business earlier than anticipated. While we anticipate the second quarter will be equally challenging, I believe our renewed focus on the customer and the operational improvements we’ve made position us well for the second half of the year.”

Swidarski continued, “Also during the quarter, we significantly strengthened our manufacturing position in EMEA with the closure of the facility in Cassis, France. This restructuring process was lengthy and arduous, but vital as the company works to achieve its long-term profitability goals.

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* See accompanying notes for non-GAAP measures.

PAGE 2/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

“The efforts of our employees have been exceptional as we have worked to realign our global manufacturing, bring our IT operations and enterprise resource planning (ERP) deployment back in house, instill pricing discipline and improve our product quality and service while reducing our cost structure,” Swidarski said. “I am pleased with our progress and feel our condition has improved dramatically over the past year. While we still have much that needs to be accomplished in all our key initiatives, I remain confident we will reach the goals we have established.”

Manufacturing optimization

The production facility in Cassis, France, was closed at the end of the first quarter. In March 2007, the company finalized an agreement with the remaining union that was legally challenging the closure of the facility, and all the unions have agreed to the related social plan. As a result, by the end of the first quarter all usable inventories and production equipment had been transferred to other locations. The sale of the building continues to progress, and the company anticipates closing the transaction with the buyer during the second quarter.

During the quarter, Diebold continued to ramp up production at its new manufacturing facility in Budapest, Hungary, producing approximately 1,700 Opteva® automated teller machines (ATMs). The company is on target to produce approximately 10,000 ATMs in Hungary in 2007. The facility is now the primary source of ATMs for the Diebold EMEA market.

Strategy for election systems business

Management is still in the process of evaluating its long-term strategic position in the election systems business and will require more time before communicating a definitive strategy in that area. “We are working diligently on this effort and we will communicate our strategy as soon as possible,” Swidarski said. “We will do our best to ensure that any course of action we take will be in the best possible interest of all our customers, employees and shareholders.”

First Quarter Orders (constant currency)

Total orders for financial self-service and security products and services were down slightly compared to the prior year period. Financial self-service orders declined due primarily to a large, non-recurring order with a single customer in Canada in the first quarter 2006. Outside of Canada, financial self-service orders in the Americas were up in the high single digits. Asia Pacific financial self-service orders declined in the low double-digit range, as several large orders in China were delayed to the second and third quarters. Security orders increased in the low single-digit range.

Revenue

Total revenue for the quarter was up 0.8 percent. Financial self-service products and services revenue was up 11.5 percent over the first quarter 2006, while total security was essentially flat. Election systems revenue declined $22.6 million, while Brazilian lottery revenue declined $18.6 million. During the quarter, the net positive currency impact was approximately $11.1 million, or 1.8 percent. The positive currency impact on revenue was largely due to the year-over-year strengthening of the euro and the Brazilian real.

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PAGE 3/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Gross Margin

Total gross margin for the quarter was 19.1 percent, compared to 23.2 percent in the first quarter 2006. Restructuring charges of $21.4 million were included in the first quarter of 2007, while restructuring charges of $0.9 million were recorded in the first quarter of 2006.

Product gross margin was 18.6 percent, compared to 28.8 percent in the first quarter of 2006. Restructuring charges of $21.4 million were included in the first quarter 2007, while restructuring charges of $0.7 million were recorded in the first quarter 2006. First quarter 2007 restructuring charges are entirely from the previously mentioned closing of manufacturing operations in Cassis, France. Excluding restructuring charges*, product gross margin would have been 26.2 percent in the first quarter of 2007, compared to 29.1 percent in the first quarter 2006. While the gross margin for the combined financial self-service and security business was flat quarter over quarter, the non-recurring revenue from the higher margin Brazilian lottery business and a gross margin loss on significantly reduced revenue in the election systems business negatively affected total product gross margin.

Service gross margin was 19.6 percent, compared to 18.3 percent in the first quarter of 2006. Restructuring charges of $0.2 million were included in the first quarter of 2006. This year-over-year improvement in service margin was driven by improved product quality and related productivity gains, primarily within the U.S. market, slightly offset by reduced margins in EMEA.

Net Income

The company reported a net loss of $5.9 million, or 0.9 percent of revenue, compared to net income of $12.7 million, or 2.0 percent in the first quarter 2006. Included in the first quarter 2007 results were restructuring charges of $21.4 million, entirely related to the closing of manufacturing operations in Cassis, France. Restructuring charges in the first quarter 2006 were $3.8 million. The first quarter 2007 restructuring charges were recorded with no associated tax benefit. As a result, we recognized taxes of $5.7 million on a loss before taxes of $0.2 million. As the Cassis restructuring is concluded, the company will pursue its ability to realize a tax benefit for the charges.

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* See accompanying notes for non-GAAP measures.

PAGE 4/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Balance Sheet, Cash Flow

The company’s net debt* was $392.7 million at March 31, 2007 compared to $287.5 million at March 31, 2006. The $105.2 million increase in net debt* over the last 12 months was principally due to free cash flow of $147.2 million, offset by share repurchases of $96.1 million, dividends of $58.1 million, $53.1 million used for acquisitions, and a $45.1 million increase in other assets.

Net cash provided by operating activities decreased by $51.8 million in the first quarter, moving from $47.4 million of cash provided by operating activities in the first quarter 2006 to a cash use of $4.4 million in the first quarter 2007. The primary reasons for this decrease were lower net income and the reduction in cash provided by certain other assets and liabilities, which provided cash of $56.6 million in the first quarter 2006 compared to $6.9 million in the first quarter 2007. This reduction was due to less cash from deferred income and higher income tax payments. Days sales outstanding (DSO) were 78 days at March 31, 2007, compared to 86 days at March 31, 2006, with improvement occurring in North America and EMEA. In addition, first quarter cash collections included $5.0 million of previously reserved election receivables related to a county in California. Inventory turns improved slightly, moving from 4.6 turns at March 31, 2006 to 4.7 turns at March 31, 2007.

As a result of the change in net cash provided by operating activities, free cash flow* decreased by $59.0 million, moving to free cash use of $16.5 million in the first quarter from $42.5 million of free cash flow* in the first quarter of 2006.

Restructuring

The company incurred first quarter restructuring charges totaling $21.4 million, or $.32 per share. These charges were entirely related to the closing of the manufacturing facility in Cassis, France. Included in these charges were costs associated with severance agreements, legal fees, asset impairment, and costs to transfer usable inventory and equipment. The first-quarter restructuring charges were recorded with no associated tax benefit. Within the context of FASB Interpretation Number (FIN) 48, the company is uncertain it will ultimately be able to recognize a tax benefit on these charges. Consequently, we were not able to record a tax benefit in the current quarter. The company expects the remaining restructuring charges related to the closure of the Cassis facility will be approximately $3 million to $6 million. Total restructuring charges for the closure are now expected to be approximately $24 million to $27 million, or $.25 to $.28 per share. This per share estimate is based on the assumption that the company will ultimately recognize a tax benefit on these charges. Actual first quarter cash payments related to this restructuring were $7.7 million.

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* See accompanying notes for non-GAAP measures.

PAGE 5/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Full-year 2007 outlook

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any future mergers, acquisitions, disposals or other business combinations.

Expectations for the full year 2007 include:

• Revenue growth remains 3 to 5 percent

o Financial self-service revenue growth now expected to be 3 to 5 percent.

o Security revenue growth now 7 to 10 percent.

o Election systems revenue remains in the range of $185 million to $215 million.

o Brazilian lottery systems revenue now approximately $8 million to $10 million.

• Earnings per share

2007 EPS (GAAP)	$	1.87 – $2.00
Cassis Restructuring	$	0.28 – $0.25
2007 EPS non-GAAP, excluding restructuring expense	$	2.15 – $2.25

• Free cash flow* expectations remain in the range of $150 to $165 million, which includes approximately $18 million to $22 million in anticipated cash charges associated with the Cassis restructuring.

Financial Information

Thomas W. Swidarski and Kevin J. Krakora will discuss the company’s financial performance during a conference call today at 10:00 a.m. (ET). Access is available from Diebold’s Web site at www.diebold.com. The replay can also be accessed on the site for up to three months after the call.

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* See accompanying notes for non-GAAP measures.

PAGE 6/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Revenue Summary by Product, Service and Geographic Area

(In Thousands — Quarter Ended March 31)

								% Change
					% Change			constant
	2007		2006		GAAP			currency*
Financial Self-Service
Products	$	216,377	$	179,757		20.4	%		17.2	%
Services		233,669		223,798		4.4	%		2.3	%
Total Fin. self-service		450,046		403,555		11.5	%		9.0	%
Security solutions
Products		63,068		68,926		-8.5	%		-8.8	%
Services		107,483		102,140		5.2	%		4.5	%
Total Security		170,551		171,066		-0.3	%		-0.9	%
Total Fin. self-service & security		620,597		574,621		8.0	%		6.1	%
Election systems
Products		2,704		24,661		-89.0	%		-89.0	%
Services		5,143		5,772		-10.9	%		-10.9	%
Total Election systems		7,847		30,433		-74.2	%		-74.2	%
Brazilian lottery systems		—		18,637		-100.0	%		-100.0	%
Total Revenue	$	628,444	$	623,691		0.8	%		-1.0	%

Revenue Summary by Geographic Segment

(In Thousands — Quarter Ended March 31)

								% Change
					% Change			constant
	2007		2006		GAAP			currency*
The Americas
Financial self-service solutions	$	289,854	$	266,613		8.7	%		7.8	%
Security solutions		155,188		158,249		-1.9	%		-1.9	%
subtotal		445,042		424,862		4.7	%		4.2	%
Brazilian lottery systems		—		18,637		-100.0	%		-100.0	%
Election systems		7,847		30,433		-74.2	%		-74.2	%
Total Americas		452,889		473,932		-4.4	%		-5.0	%
Asia Pacific
Financial self-service solutions		57,878		45,346		27.6	%		21.0	%
Security solutions		9,907		8,706		13.8	%		7.0	%
Total Asia Pacific		67,785		54,052		25.4	%		18.7	%
Europe, Middle East, Africa
Financial self-service solutions		102,314		91,596		11.7	%		6.3	%
Security solutions		5,456		4,111		32.7	%		20.2	%
Total Europe, Middle East, Africa		107,770		95,707		12.6	%		6.9	%
Total Revenue	$	628,444	$	623,691		0.8	%		-1.0	%

* See accompanying notes for non-GAAP measures.

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PAGE 7/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Notes for Non-GAAP Measures

1. Reconciliation of GAAP EPS to non-GAAP measures:

	Three Months
	Ended March 31, 2007
Total EPS (GAAP measure)	$	(0.09	)
Restructuring Charges		0.32
Operating EPS (non-GAAP measure)	$	0.23

	The company’s management believes excluding restructuring charges is useful to investors because it provides an overall understanding of the company’s historical financial performance and future prospects. Management believes operating EPS (non-GAAP) is an indication of the company’s base-line performance before gains, losses or other charges that are considered by management to be outside the company’s core operating results. Exclusion of these items permits evaluation and comparison of results for the company’s core business operations, and it is on this basis that management internally assesses the company’s performance.
2.	The company’s management believes that constant currency is useful to investors since it depicts order and GAAP revenue growth in local currency without the benefit or detriment occurring from currency fluctuations.
3.	Free cash flow/(use) is calculated as follows:

	Three Months Ended			Three Months Ended
	March 31, 2007			March 31, 2006
Net cash (used)/provided by operating activities (GAAP measure)	$	(4,418	)	$	47,418
Capital expenditures		(12,088	)		(4,941	)
Free cash flow (use) (non-GAAP measure)	$	(16,506	)	$	42,477

The company’s management believes that free cash flow is useful to investors because it is a meaningful indicator of cash generated from operating activities that is available for the execution of its business strategy, including service of debt principal, dividends, share repurchase and acquisitions. Free cash flow is not an indicator of residual cash available for discretionary spending, because it does not take into account mandatory debt service or other non-discretionary spending requirements that are deducted in the calculation of free cash flow.

4.

Net (debt) is calculated as follows:

	March 31, 2007			December 31, 2006			March 31, 2006
Cash, cash equivalents and other investments (GAAP measure)	$	189,702		$	353,385		$	368,416
Less Industrial development revenue bonds and other		(12,000	)		(12,000	)		(13,450	)
Less Notes payable		(570,392	)		(676,805	)		(642,468	)
Net (debt) (non-GAAP measure)	$	(392,690	)	$	(335,420	)	$	(287,502	)

The company’s management believes that given the net debt, the significant cash, cash equivalents and other investments on its balance sheet, that net cash against outstanding debt is a meaningful debt calculation.

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PAGE 8/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

5. Reconciliation of GAAP Gross Margin to non-GAAP measures

	Product Gross Margin						Service Gross Margin						Total Gross Margin
	Q1 2007			Q1 2006			Q1 2007			Q1 2006			Q1 2007			Q1 2006
GAAP Gross Margin	$	52,477		$	84,134		$	67,709		$	60,739		$	120,186		$	144,873
GAAP Gross Margin %		18.6	%		28.8	%		19.6	%		18.3	%		19.1	%		23.2	%
Restructuring	$	21,366		$	692		$	—		$	199		$	21,366		$	891
Operating gross margin (non GAAP)	$	73,843		$	84,826		$	67,709		$	60,938		$	141,552		$	145,764
Operating gross margin (non GAAP) %		26.2	%		29.1	%		19.6	%		18.4	%		22.5	%		23.4	%

The company’s management believes excluding restructuring charges from gross profit margins is an indication of the company’s baseline performance before gains, losses, or other charges that are considered by management to be outside the company’s core operating results. The exclusion of these items permits evaluation and comparison of results for the company’s core business operations and it is on this basis that the company’s management internally assesses the company’s performance.

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PAGE 9/DIEBOLD ANNOUNCES FIRST QUARTER RESULTS

Forward-Looking Statements

In this press release, statements that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. These forward-looking statements relate to, among other things, the company’s future operating performance, the company’s share of new and existing markets, the company’s short- and long-term revenue and earnings growth rates, the company’s implementation of cost-reduction initiatives and measures to improve pricing, including the optimization of the company’s manufacturing capacity. The use of the words “believes,” “anticipates,” “expects,” “intends” and similar expressions is intended to identify forward-looking statements that have been made and may in the future be made by or on behalf of the company. Although the company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, the economy, its knowledge of its business, and on key performance indicators that impact the company, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The company is not obligated to update forward-looking statements, whether as a result of new information, future events or otherwise.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Some of the risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to:

• competitive pressures, including pricing pressures and technological developments;

• changes in the company’s relationships with customers, suppliers, distributors and/or partners in its business ventures;

• changes in political, economic or other factors such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the worldwide business in each of the company’s operations, including Brazil, where a significant portion of the company’s revenue is derived;

• acceptance of the company’s product and technology introductions in the marketplace;

• unanticipated litigation, claims or assessments;

• the timely completion of the company’s new manufacturing operation for financial self-service terminals and related components in the Eastern European region;

• costs and benefits associated with the closure of the company’s Cassis production facility, including the timing of related restructuring charges and any tax benefits associated with such charges;

• the completion of the company’s implementation of its ERP system and other IT-related functions;

• the company’s ability to reduce costs and expenses and improve internal operating efficiencies, including the optimization of the company’s manufacturing capacity;

• the company’s ability to successfully implement measures to improve pricing;

• variations in consumer demand for financial self-service technologies, products and services;

• challenges raised about reliability and security of the company’s election systems products, including the risk that such products will not be certified for use or will be decertified;

• changes in laws regarding the company’s election systems products and services;

• potential security violations to the company’s information technology systems;

• the company’s ability to successfully execute its strategy related to the election systems business; and

• the company’s ability to achieve benefits from its cost-reduction initiatives and other strategic changes.

About Diebold

Diebold, Incorporated is a global leader in providing integrated self-service delivery and security systems and services. Diebold employs more than 15,000 associates with representation in nearly 90 countries worldwide and is headquartered in Canton, Ohio, USA. Diebold reported revenue of $2.9 billion in 2006 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at www.diebold.com.

# # #

PR/xxxx

DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED INCOME STATEMENTS — UNAUDITED
(IN THOUSANDS EXCEPT EARNINGS PER SHARE)

	Three months ended
	March 31
	2007			2006
Net Sales
Product	$	282,149		$	291,981
Service		346,295			331,710
Total		628,444			623,691
Cost of goods
Product		229,672			207,847
Service		278,586			270,971
Total		508,258			478,818
Gross Profit		120,186			144,873
Percent of net sales		19.1	%		23.2	%
Operating expenses
Selling, general and administrative		102,432			102,244
Research, development and engineering		16,576			19,120
Total		119,008			121,364
Percent of net sales		18.9	%		19.5	%
Operating profit		1,178			23,509
Percent of net sales		0.2	%		3.8	%
Other expense and minority interest, net		(1,338	)		(3,969	)
(Loss)/income before taxes		(160	)		19,540
Percent of net sales		0.0	%		3.1	%
Taxes on income		(5,725	)		(6,839	)
Effective tax rate		-3578.1	%		35.0	%
Net (loss)/income	$	(5,885	)	$	12,701
Percent of net sales		-0.9	%		2.0	%
Basic weighted average shares outstanding		65,673			68,534
Diluted weighted average shares outstanding		66,156			68,840
Basic (Loss)/Earnings Per Share	$	(0.09	)	$	0.19
Total Basic (Loss)/Earnings Per Share	$	(0.09	)	$	0.19
Diluted (Loss)/Earnings Per Share	$	(0.09	)	$	0.18
Total (Loss)/Diluted Earnings Per Share	$	(0.09	)	$	0.18

DIEBOLD, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
(IN THOUSANDS)

	March 31,		December 31,
	2007		2006
ASSETS
Current assets
Cash and cash equivalents	$	94,295	$	253,814
Short-term investments		95,407		99,571
Trade receivables, net		600,165		610,893
Inventories		470,178		442,804
Other current assets		194,099		188,599
Total current assets		1,454,144		1,595,681
Securities and other investments		67,877		70,088
Property, plant and equipment, net		202,007		202,535
Goodwill		472,384		460,339
Other assets		197,543		185,636
	$	2,393,955	$	2,514,279
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes payable	$	25,608	$	11,324
Accounts payable		131,136		158,388
Other current liabilities		446,003		429,024
Total current liabilities		602,747		598,736
Long-term notes payable		544,784		665,481
Long-term liabilities		145,922		158,661
Total shareholders’ equity		1,100,502		1,091,401
	$	2,393,955	$	2,514,279

DIEBOLD, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(IN THOUSANDS)

	Three months ended March 31,
	2007			2006
Cash flow from operating activities:
Net (loss)/income	$	(5,885	)	$	12,701
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Minority share of income		769			992
Depreciation and amortization		23,963			23,479
Share-based compensation		3,516			3,642
Deferred income taxes		3,381			(192	)
(Gain) loss on sale of assets, net		794			(945	)
Cash provided (used) by changes in certain assets and liabilities:
Trade receivables		19,224			29,522
Inventories		(27,145	)		(43,594	)
Prepaid expenses		10			(7,010	)
Other current assets		(1,608	)		219
Accounts payable		(28,301	)		(27,959	)
Certain other assets and liabilities		6,864			56,563
Net cash (used)/provided by operating activities		(4,418	)		47,418
Cash flow from investing activities:
Payments for acquisitions, net of cash acquired		—			(9,044	)
Net investment activity		10,386			(644	)
Capital expenditures		(12,088	)		(4,941	)
Increase in certain other assets		(18,800	)		(14,899	)
Net cash used by investing activities		(20,502	)		(29,528	)
Cash flow from financing activities:
Dividends paid		(15,439	)		(14,745	)
Net (payments)/borrowings		(107,208	)		149,675
Repurchase of common shares		—			(51,921	)
Other financing activities		(14,173	)		(197	)
Net cash (used)/provided by financing activities		(136,820	)		82,812
Effect of exchange rate changes on cash		2,221			2,713
(Decrease)/Increase in cash and cash equivalents		(159,519	)		103,415
Cash and cash equivalents at the beginning of the period		253,814			207,900
Cash and cash equivalents at the end of the period	$	94,295		$	311,315

The March 31, 2006 Statements of Cash Flows has been reclassified to reflect the company’s year-end change in its method of accounting for rotable spares used in its service business. The reclassification includes rotable spares expenditures as part of Cash flows from operating activities, which were previously included as part of Cash flows from investing activities.