DIEBOLD NIXDORF, Inc — Interim / Quarterly Report 2000

Apr 27, 2000

PAGEBREAK TOC

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
INDEX TO EXHIBITS

/TOC

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q

(X)
For the quarterly period ended March 31, 2000

OR

( )
For the transition period from .........to .........
Commission file number 1-4879

Diebold, Incorporated (Exact name of registrant as specified in its charter)

Ohio	34-0183970
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
5995 Mayfair Road, PO Box 3077, North Canton, Ohio	44720-8077
(Address of principal executive offices)	(Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate the number of shares outstanding of each of the issuer’s classes of Common Shares, as of the latest practicable date.

Class	Outstanding at April 25, 2000
Common Shares $1.25 Par Value	71,171,783 Shares

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Table of Contents

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 2000 and December 31, 1999	3
Condensed Consolidated Statements of Income -
Three Months Ended March 31, 2000 and 1999	4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2000 and 1999	5
Notes to Condensed Consolidated Financial Statements	6
ITEM 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations	10
ITEM 3. Quantitative And Qualitative Disclosures About Market Risk	13
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders	13
ITEM 5. Other Information	13
ITEM 6. Exhibits and Reports on Form 8-K	14
SIGNATURES	17
INDEX TO EXHIBITS	18

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Table of Contents

link1 "PART I – FINANCIAL INFORMATION"

link2 "ITEM 1. FINANCIAL STATEMENTS"

link3 "CONDENSED CONSOLIDATED BALANCE SHEETS"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)

	(Unaudited) — March 31,	December 31,
	2000	1999
ASSETS
Current assets
Cash and cash equivalents	$ 15,882	$	27,299
Short-term investments	42,097		57,348
Trade and notes receivable	386,464		325,793
Inventories	192,759		169,785
Prepaid expenses and other current assets	79,685		67,711
Total current assets	716,887		647,936
Securities and other investments	171,976		175,232
Property, plant and equipment, at cost	326,355		320,640
Less accumulated depreciation and amortization	166,146		159,916
	160,209		160,724
Finance receivables	73,215		83,804
Goodwill	157,991		160,073
Other assets	80,708		71,062
	$ 1,360,986	$	1,298,831
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and other current liabilities	$ 297,975	$	311,508
Deferred income	118,316		70,899
Total current liabilities	416,291		382,407
Bonds payable	20,800		20,800
Pensions	27,618		24,309
Postretirement benefits	22,434		22,497
Minority interest	4,643		4,423
Shareholders’ equity
Preferred Shares, no par value, authorized 1,000,000 shares, none issued	—		—
Common shares, par value $1.25, authorized
125,000,000, issued 71,596,665 and 71,482,997 shares, respectively;
outstanding 71,164,462 and 71,096,290 shares, respectively	89,496		89,354
Additional capital	88,782		87,169
Retained earnings	711,633		691,415
Treasury shares, at cost (432,203 and 386,707 shares, respectively)	(14,719	)	(13,644	)
Accumulated other comprehensive income	(1,939	)	(5,865	)
Other	(4,053	)	(4,034	)
Total shareholders’ equity	869,200		844,395
	$ 1,360,986	$	1,298,831
See accompanying notes to condensed consolidated financial statements

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link3 "CONDENSED CONSOLIDATED STATEMENTS OF INCOME"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands except for per share amounts)

	Three Months Ended
	March 31,
	2000	1999
Net Sales
Products	$ 203,023	$	169,113
Services	141,569		114,370
	344,592		283,483
Cost of sales
Products	125,708		101,344
Services	102,061		81,051
	227,769		182,395
Gross Profit	116,823		101,088
Selling and administrative expense	56,756		47,457
Research, development and engineering expense	10,870		11,951
	67,626		59,408
Operating Profit	49,197		41,680
Investment income	5,901		4,793
Miscellaneous, net	(8,071	)	(971	)
Minority interest	(370	)	362
Income before taxes	46,657		45,864
Taxes on income	15,397		16,740
Net income	$ 31,260	$	29,124
Basic weighted-average shares outstanding	71,130		68,927
Diluted weighted-average shares outstanding	71,444		69,177
Basic earnings per share	$ 0.44	$	0.42
Diluted earnings per share	$ 0.44	$	0.42
Cash dividends paid per Common Share	$ 0.155	$	0.150
See accompanying notes to condensed consolidated financial statements.

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link3 "CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)

	Three Months Ended March 31, — 2000	1999
Cash flow from operating activities:
Net income	$ 31,260	$	29,124
Adjustments to reconcile net income to cash
provided by operating activities
Minority share of income	370		(362	)
Depreciation	5,707		5,801
Other charges and amortization	5,162		3,636
Loss on sale of investments	113		—
Cash used by changes in certain assets and liabilities	(95,027	)	(36,940	)
Changes in deferred income	47,417		42,347
Other	19,812		16,870
Net cash provided by operating activities	14,814		60,476
Cash flow from investing activities:
Proceeds from maturities and sale of investments	25,579		6,507
Payments for purchases of investments	(6,825	)	(53,995	)
Capital expenditures	(7,120	)	(4,204	)
Increase in net finance receivables	(413	)	5,485
Increase in certain other assets	(9,940	)	(2,592	)
Net cash provided (used) by investing activities	1,281		(48,799	)
Cash flow from financing activities:
Dividends paid	(11,042	)	(10,341	)
Repayments on short-term borrowings	(17,000	)	—
Issuance and repurchase of Common shares	680		1,276
Distribution of affiliate’s earnings to minority interest holder	(150	)	—
Net cash used by financing activities	(27,512	)	(9,065	)
(Decrease)/increase in cash and cash equivalents	(11,417	)	2,612
Cash and cash equivalents at the beginning of the period	27,299		42,540
Cash and cash equivalents at the end of the period	$ 15,882	$	45,152
See accompanying notes to condensed consolidated financial statements

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link3 "NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands except for per share amounts)

| 1. — 2. | The financial information included herein is
unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of
management, necessary for a fair statement of the
results for the interim periods. The condensed
consolidated financial statements should be read in
conjunction with the consolidated financial
statements and notes thereto together with
management’s discussion and analysis of
financial condition and results of operations
contained in the Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1999.
In addition, the Registrant’s statements in this
Form 10-Q report may be considered forward-looking
and involve risks and uncertainties that could
significantly impact expected results. A discussion
of these risks and uncertainties is contained in the
management’s discussion and analysis of financial
condition and results of operations in this
Form 10-Q. The results of operations for the
three-month period ended March 31, 2000 are not
necessarily indicative of results to be expected
for the full year. — The basic and diluted earnings per share computations
in the condensed consolidated statements of
income are based on the weighted-average number of
shares outstanding during each period reported.
The following data show the amounts used in computing
earnings per share and the effect on the
weighted-average number of shares of dilutive
potential common stock. | | |
| --- | --- | --- | --- |
| | | Three Months Ended March 31, | |
| | | 2000 | 1999 |
| | Numerator: | | |
| | Income used in basic and diluted
earnings per share | $ 31,260 | $ 29,124 |
| | Denominator : | | |
| | Basic weighted-average shares | 71,130 | 68,927 |
| | Effect of dilutive fixed stock options | 314 | 250 |
| | Diluted weighted-average shares | 71,444 | 69,177 |
| | Basic earnings per share | $ 0.44 | $ 0.42 |
| | Diluted earnings per share | $ 0.44 | $ 0.42 |
| | Anti-dilutive shares not used in calculating diluted weighted-average shares | 1,450 | 1,325 |
| 3. | Inventory detail at: | March 31, 2000 | December 31, 1999 |
| | Finished goods and service parts | $ 90,261 | $ 55,433 |
| | Work in process | 102,446 | 114,300 |
| | Raw materials | 52 | 52 |
| | Total inventory | $ 192,759 | $ 169,785 |

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (In thousands except for per share amounts)

4.	The Registrant has reclassified the presentation of certain prior-year information to conform with the current presentation format.
5.	The Registrant displays the accumulated balance of other comprehensive income separately from retained earnings and additional capital in the equity section of the Balance Sheet. Items considered to be other comprehensive income
include adjustments made for foreign currency translation (under SFAS No. 52), pensions (under SFAS No. 87)
and unrealized holding gains and losses on available-for-sale securities (under SFAS No. 115). Comprehensive income for the three months ended March 31, 2000 and 1999 was $35,186 and $28,644, respectively.
6.	The Registrant has defined its segments into its three main sales channels: North American Sales and Service (NASS), International Sales and Service (ISS) and Other, which combines several of the Registrant’s smaller
sales channels. These sales channels are evaluated based on the following information presented: revenues from customers,
revenues from inter-segment transactions, and operating profit contribution to the total corporation. A reconciliation between segment information and the Condensed Consolidated Financial Statements is also disclosed. All income and expense items below
operating profit are not allocated to the segments and are not disclosed. Revenue by
geography and revenue by product and service solution are also disclosed.
	The NASS segment sells financial and retail systems and also services financial, retail and medical systems in the United States and Canada. The ISS segment sells and services financial and retail systems over the remainder of the
globe, including sales to IBM, which was the Registrant’s former partner in the InterBold joint venture that
terminated in January 1998. The segment called Other sells products to educational and medical institutions and other customers. This segment also services educational customers in the United States. Each of the sales channels buys the goods it sells
from the Registrant’s manufacturing plants through inter-company sales that are
eliminated on consolidation. Each year, inter-company pricing is agreed upon which drives sales channel operating profit contribution. As permitted under Statement 131, certain information not routinely used in the management of these segments,
information not allocated back to the segments or information that is impractical to report is
not shown. Items not disclosed are as follows: interest revenue, interest expense, depreciation, amortization, equity in the net income of investees accounted for by the equity method, income tax expense or benefit, extraordinary items, significant
noncash items and long-lived assets.

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (In thousands except for per share amounts)

	NASS	ISS
1st Quarter 2000 Segment Information by Channel
Customer revenues	$ 234,738	$ 99,264	$	10,301	$	344,303
Intersegment revenues	5,036	—		1,468		6,504
Operating profit/(loss)	33,529	1,379		(423	)	34,485
1st Quarter 1999 Segment Information by Channel
Customer revenues	$ 224,601	$ 51,864	$	6,127	$	282,592
Intersegment revenues	716	(190	)	1,770		2,296
Operating profit/(loss)	38,075	41		(2,526	)	35,590

Reconciliation of Segment Information to Condensed Consolidated Statements of Income

	For the period ending March 31:
		2000					1999
		Inter-					Inter-
	Customer	segment	Operating		Customer		segment	Operating
	Revenues	Revenues	Profit		Revenues		Revenues	Profit
Total segment
information	$ 344,303	$ 6,504	$	34,485	$	282,592	$ 2,296	$	35,590
Adjustments:
Manufacturing	113	162,477		19,928		506	149,420		17,211
Corporate	176	214		(5,216	)	385	1,498		(11,121	)
Eliminations	—	(169,195	)	—		—	(153,214	)	—
Total adjustments	289	(6,504	)	14,712		891	(2,296	)	6,090
Consolidated Statements
of Income	$ 344,592	$ —	$	49,197	$	283,483	$ —	$	41,680

Product Revenue by Geography

For the period ending March 31:	2000	1999
United States	$ 138,795	122,933
Canada	919	7,559
Asia-Pacific	10,635	4,741
Europe, Middle East
and Africa	17,683	8,991
Latin America	34,991	24,889
Total product revenue	$ 203,023	$ 169,113

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (In thousands except for per share amounts)

Total Revenue Domestic vs. International

For the period ending March 31:	2000	1999
Domestic	$ 243,770	$ 223,154
Percentage of total revenue	70.7 %	78.7 %
International	100,822	60,329
Percentage of total revenue	29.3 %	21.3 %
Total revenue	$ 344,592	$ 283,483

Total Revenue by Product /Service Solution

For the period ending March 31:	2000	1999
Self-service solutions	$ 135,518	$ 121,299
Security solutions	42,595	40,087
Professional and
special services	24,910	7,727
Custom maintenance
services	141,569	114,370
Total revenue	$ 344,592	$ 283,483

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link2 "ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As of March 31, 2000 (Unaudited) (Dollars in thousands except for per share amounts)

Changes in Financial Condition

The Registrant continued to show a strong balance sheet at March 31, 2000. Total assets for the first quarter ended March 31, 2000 were $1,360,986, up $62,155, or 4.8 percent from December 31, 1999. Total current assets are up $68,951: notes receivable are up $1,377, trade receivables are up $59,294, short-term investments are down $15,251 and inventories are up $22,974. Marketable securities and other investments are down by $3,256 and net property, plant and equipment is also down by $515, while other assets are up $9,646.

Total liabilities of $491,786 are up $37,350 from December 31, 1999. Current liabilities in total are up $33,884: deferred income is up $47,417, while accounts payable are down $9,999 and current notes payable decreased $17,000. The current asset to current liability ratio is 1.7.

Future capital expenditures, acquisitions and increases in working capital are expected to be financed through internally generated funds and external financing. The Registrant’s investment portfolio is available for any funding needs if required. External financing is also available if needed through the Registrant’s lines of credit. At March 31, 2000, the Registrant’s bank credit lines approximated $245,000, and EUR 100,000 (translation $96,510) with various institutions. The Registrant had $100,000 outstanding borrowings under these agreements, with an average short-term rate of 6.24 percent. These lines of credit represent an additional and immediate source of liquidity.

Shareholders’ equity is up $24,805 over December 31, 1999; with retained earnings up $20,218, net stock related activity increased equity by $680 and accumulated other comprehensive income increased by $3,926. Shareholders’ equity per Common Share at March 31, 2000 increased to $12.21 from $11.88 at December 31, 1999. The first quarter cash dividend of $0.155 per share was paid on March 10, 2000 to shareholders of record on February 18, 2000. On April 19, 2000, the second quarter cash dividend of $0.155 per share was declared payable on June 2, 2000 to shareholders of record on May 12, 2000. Diebold, Incorporated shares are listed on the New York Stock Exchange under the symbol of DBD. The market price during the first three months of 2000 fluctuated within the range of $21.50 and $28.50.

Results of Operations

Overall, net sales for the first quarter of 2000 increased from the same period in 1999 by $61,109 or 21.6 percent. Product revenue showed an increase of $33,910, or 20.1 percent over the first quarter of 1999. International product revenue showed dramatic growth, evidenced by a 106.2 percent increase generated in Asia-Pacific, Europe, the Middle East and Africa. Net service sales for the quarter were up from the prior year by $27,199 or 23.8 percent. Excluding the effects of Procomp, total revenue for the first quarter was up 11.2 percent, and service revenue showed an increase of 8.6 percent. Gross profit of $116,823 was $15,735, or 15.6 percent higher than the same quarter last year. Product gross margin, excluding Procomp, of 41.3 percent was

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

As of March 31, 2000 (Unaudited) (Dollars in thousands except for per share amounts)

Results of Operation (continued)

up from 1999 first quarter gross margin of 40.1 percent, reflecting the higher margins associated with direct international channels. Service gross margin of 29.2 percent, excluding Procomp, was up from 29.1 percent a year ago. Total operating expenses of $67,626 were 19.6 percent of revenue. Excluding Procomp, expenses were 20.4 percent, which was an improvement from 21.0 percent of revenue in 1999. First quarter 2000 miscellaneous, net was down from the same quarter in the prior year by $7,100, primarily due to the amortization of goodwill from Procomp, and an increase in interest on short-term debt. Net income was up by 7.3 percent over first quarter 1999 net income resulting in first quarter diluted earnings per share of $0.44. Excluding the anticipated dilutive effect of Procomp, earnings per share were $0.46.

Segment Information

NASS customer revenues of $234,738 increased by $10,137, or 4.5 percent from the first quarter 1999 of $224,601. U.S. product revenue increased 12.9 percent, while Canada decreased 87.8 percent. The decrease in Canada is a result of nonrecurring revenue from first quarter 1999 and continued challenges in replacing the IBM sales channel. Operating profits for the same period were down by $4,546, or 11.9 percent. Service performance, specifically a shortfall in NASS service revenue negatively impacted profit for the quarter.

ISS customer revenue was up for the first quarter of 2000 over the same quarter of 1999 by $47,400, or 91.4 percent. ISS product revenue showed dramatic improvement, evidenced by 124.3 percent product revenue growth generated in Asia-Pacific. Europe, the Middle East and Africa showed an increase of 96.7 percent in product revenue over the same quarter 1999. Latin America decreased 23.3 percent, excluding Procomp, due to a comparison with the 1999 first quarter shipment of a very large order in Venezuela.

The segment called Other showed an increase in customer revenues of $4,174, or 68.1 percent for the first quarter 2000 over the same quarter 1999. The segment showed an operating loss of $423 for the first quarter of 2000.

Year 2000 Disclosure

The Registrant was well prepared for year 2000 and experienced no major problems with its internal systems or in products purchased from suppliers used in manufacturing and service of its customers. Registrant’s web page (www.diebold.com) gave information to customers on year 2000 compliance of products and was a frequently used resource. As required, the Registrant expensed as incurred all costs associated with year 2000 issues. The costs did not have a material effect on the Registrant’s financial position or results of operations.

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

As of March 31, 2000 (Unaudited) (Dollars in thousands except for per share amounts)

New Accounting Pronouncements For 2001

In June 1998, the FASB issued Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” which establishes accounting and reporting standards for derivative instruments and hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The Registrant will adopt Statement No. 133 as required for its first quarterly filing of fiscal year 2001.

Forward-Looking Statement Disclosure

In the Registrant’s written or oral statements, the use of the words “believes,” “anticipates,” “expects” and similar verbs is intended to identify forward-looking statements which have been made and may in the future be made by or on behalf of the Registrant, including statements concerning future operating performance, the Registrant’s share of new and existing markets, and the Registrant’s short- and long-term revenue and earnings growth rates. The Registrant gives no assurance that its goals will be realized, and it is under no obligation to report changes to its outlook. Readers are cautioned not to place undue reliance on these forward-looking statements. The Registrant’s uncertainties could cause actual results to differ materially from those anticipated in forward-looking statements. These include, but are not limited to:

•	competitive pressures, including pricing pressures and technological developments;
•	changes in the Registrant’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
Registrant’s operations, including Brazil, where a significant portion of the Registrant’s revenue is derived;
•	acceptance of the Registrant’s product and technology introductions in the marketplace;
•	unanticipated litigation, claims or assessments; and
•	successfully and quickly integrating the Procomp, Bull and Getronics acquisitions into the Registrant’s operations.

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q link2 "ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK"

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Registrant does not have material exposure to interest rate risk, foreign currency exchange rate risk or commodity price risk. As the Registrant continues to expand internationally, it expects market risks to have a greater impact on its financial position and results of operation.

link1 "PART II. OTHER INFORMATION"

PART II. OTHER INFORMATION link2 "ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS"

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Registrant’s annual meeting of shareholders was held on April 19, 2000. Each matter voted upon at such meeting and the number of shares cast for, against or withheld, and abstained are as follows:

1. Election of Directors

Louis V. Bockius III	60,830,944	2,161,594
Richard L. Crandall	60,829,393	2,163,145
Gale S. Fitzgerald	61,160,110	1,832,428
Donald R. Gant	60,734,816	2,257,722
L. Lindsey Halstead	61,159,014	1,833,524
Phillip B. Lassiter	61,198,272	1,794,266
John N. Lauer	61,193,047	1,799,491
William F. Massy	61,167,526	1,825,012
Walden W. O’Dell	61,212,110	1,780,428
W. R. Timken, Jr.	61,187,421	1,805,117
Patrick J. Lysobey	12,100	—

1. Ratification of Appointment of KPMG LLP as Independent Auditors for 2000

For	Against	Abstained
62,516,416	222,216	253,906

There were no broker non-votes.

link2 "ITEM 5. OTHER INFORMATION"

ITEM 5. OTHER INFORMATION

| Subsequent Events (Dollars in thousands) |
| --- |
| On April 17, 2000, the Registrant announced the successful completion of its acquisition of the financial self-service assets and related development activities of European-based Groupe Bull and Getronics
NV. The businesses acquired include ATMs, cash dispensers, other self-service terminals and related services primarily for the global banking industry. The acquisition was completed for approximately
$160,000. As part of the transaction, the Registrant acquired approximately 1,300 new employees in the areas of sales, service, management and manufacturing. |

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link2 "ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)		Exhibits
3.1	(i)	Amended and Restated Articles of Incorporation of
Diebold, Incorporated — incorporated by reference
to Exhibit 3.1(i) of Registrant’s Annual Report on Form
10-K for the year ended December 31, 1994
3.1	(ii)	Code of Regulations — incorporated by reference to
Exhibit 4(c) to Registrant’s Post-Effective Amendment
No. 1 to Form S-8 Registration Statement No. 33-32960.
3.2		Certificate of Amendment by Shareholders to Amended
Articles of Incorporation of Diebold, Incorporated —
incorporated by reference to Exhibit 3.2 to Registrant’s
Form 10-Q for the quarter ended March 31, 1996.
3.3		Certificate of Amendment to Amended Articles of
Incorporation of Diebold, Incorporated — incorporated by
reference to Exhibit 3.3 of Registrant’s Annual
Report on Form 10-K for the year ended December 31, 1998.
4.		Rights Agreement dated as of February 11, 1999 between
Diebold, Incorporated and the Bank of New York —
incorporated by reference to Exhibit 4.1 to Registrant’s
Registration Statement on Form 8-A dated February 11, 1999.
*10.1		Form of Employment Agreement as amended and restated as of
September 13, 1990 — incorporated by reference to Exhibit
10.1 to Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1990.
*10.2		Schedule of Certain Officers who are Parties to Employment
Agreements in the form of Exhibit 10.1 — incorporated by
reference to Exhibit 10.2 to Registrant’s Form 10-K for the
year ended December 31, 1999.
*10.5	(i)	Supplemental Employee Retirement Plan (as amended January 1,
1994) — incorporated by reference to Exhibit 10.5 of
Registrant’s Annual Report on Form 10-K for the year ended
December 31, 1994.
*10.5	(ii)	Amendment No. 1 to the Amended and Restated Supplemental
Retirement Plan — incorporated by reference to Exhibit 10.5
(ii) to Registrant’s Form 10-Q for the quarter ended March 31, 1998.
*10.7	(i)	1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated — incorporated by reference to Exhibit 10.7
to Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1992.
*10.7	(ii)	Amendment No. 1 to the Amended and Restated 1985 Deferred
Compensation Plan for Directors of Diebold,
Incorporated — incorporated by reference to Exhibit
10.7 (ii) to Registrant’s Form 10-Q for the quarter ended
March 31, 1998.
*10.8	(i)	1991 Equity and Performance Incentive Plan as Amended and
Restated — incorporated by reference to Exhibit 10.8 to
Registrant’s Form 10-Q for the quarter ended March 31, 1997.
*		Reflects management contract or other compensatory arrangement.

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)		Exhibits (Continued)
*10.8	(ii)	Amendment No. 1 to the 1991 Equity and Performance Incentive
Plan as Amended and Restated — incorporated by reference to
Exhibit 10.8 (ii) to the Registrant’s Form 10-Q for the
quarter ended September 30, 1998.
*10.8	(iii)	Amendment No. 2 to the 1991 Equity and Performance Incentive
Plan as Amended and Restated — incorporated by reference
to Exhibit 10.8 (iii) to the Registrant’s Form 10-Q for the
quarter ended June 30, 1999.
*10.9		Long-Term Executive Incentive Plan — incorporated by
reference to Exhibit 10.9 of Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1993.
*10.10	(i)	1992 Deferred Incentive Compensation Plan (as amended and
restated as of July 1, 1993) — incorporated by reference to
Exhibit 10.10 to Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1993.
*10.10	(ii)	Amendment No. 1 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan — incorporated by reference to
Exhibit 10.10 (ii) to Registrant’s Form 10-Q for the quarter
ended March 31, 1998.
*10.10	(iii)	Amendment No. 2 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan — incorporated by reference to
Exhibit 10.10 (iii) to Registrant’s Form 10-Q for the quarter ended September 30, 1998.
*10.11		Annual Incentive Plan — incorporated by reference to Exhibit
10.11 to Registrant’s Annual Report on Form 10-K for the
year ended December 31, 1992.
*10.13	(i)	Forms of Deferred Compensation Agreement and Amendment No. 1
to Deferred Compensation Agreement — incorporated by
reference to Exhibit 10.13 to Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1996.
*10.13	(ii)	Section 162(m) Deferred Compensation Agreement (as amended
and restated January 29, 1998) — incorporated by reference
to Exhibit 10.13 (ii) to Registrant’s Form 10-Q for the
quarter ended March 31, 1998.
*10.14		Deferral of Stock Option Gains Plan — incorporated by
reference to Exhibit 10.14 of Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1998.
*10.15		Employment Agreement with Walden W. O’Dell – incorporated by
reference to Exhibit 10.15 of Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1999
*10.16		Separation Agreement with Gerald F. Morris — incorporated by
reference to Exhibit 10.16 of Registrant’s Annual Report on
Form 10-K for the year ended December 31, 1999.
*		Reflects management contract or other compensatory arrangement.

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Table of Contents

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits (Continued)
10.17	Loan Agreement dated as of December 1, 1999 among Diebold,
Incorporated, the Subsidiary Borrowers, the Lenders and Bank
One, Michigan as Agent — incorporated by reference to
Exhibit 10.17 of Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1999.
27.	Financial Data Schedule.
(b)	Reports on Form 8-K.
	Registrant filed a Form 8-K/A on January 4, 2000 reporting the
Stock Purchase Agreement between the Registrant and Procomp
Amazonia Industria Eletronica S.A., effective as of
October 21, 1999

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link1 "SIGNATURES"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q 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
			(Registrant)
Date :	April 27, 2000	By:	/s/ Walden W. O’Dell
			Walden W. O’Dell
			Chairman of the Board, President and Chief Executive Officer
Date :	April 27, 2000	By:	/s/ Gregory T. Geswein
			Gregory T. Geswein
			Senior Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)

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Table of Contents

link1 "INDEX TO EXHIBITS"

DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q INDEX TO EXHIBITS

| EXHIBIT NO. — 3.1 | (i) | Amended and Restated Articles of Incorporation
of Diebold, Incorporated — incorporated by reference to
Exhibit 3.1(i) of Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1994 | PAGE NO. — — |
| --- | --- | --- | --- |
| 3.1 | (ii) | Code of Regulations — incorporated by reference to Exhibit
4(c) to Registrant’s Post-Effective Amendment No. 1 to Form S-8
Registration Statement No. 33-32960. | — |
| 3.2 | | Certificate of Amendment by Shareholders to Amended Articles of
Incorporation of Diebold, Incorporated — incorporated by reference
to Exhibit 3.2 to Registrant’s Form 10-Q for the quarter
ended March 31, 1996. | — |
| 3.3 | | Certificate of Amendment to Amended Articles of Incorporation of
Diebold, Incorporated — incorporated by reference to Exhibit 3.3
of Registrant’s Annual Report on Form 10-K for the year ended
December 31, 1998. | — |
| 4. | | Rights Agreement dated as of February 11, 1999 between Diebold,
Incorporated and the Bank of New York — incorporated by
reference to Exhibit 4.1 to Registrant’s Registration Statement
on Form 8-A dated February 11, 1999. | — |
| 10.1 | | Form of Employment Agreement as amended and restated as of
September 13, 1990 — incorporated by reference to Exhibit
10.1 to Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1990. | — |
| 10.2 | | Schedule of Certain Officers who are Parties to Employment
Agreements in the form of Exhibit 10.1 — incorporated by
reference to Exhibit 10.2 to Registrant’s Form 10-K for the
year ended December 31, 1999. | — |
| 10.5 | (i) | Supplemental Employee Retirement Plan (as amended January 1,
1994) — incorporated by reference to Exhibit 10.5 of
Registrant’s Annual Report on Form 10-K for the year ended
December 31, 1994. | — |
| 10.5 | (ii) | Amendment No. 1 to the Amended and Restated Supplemental Retirement
Plan — incorporated by reference to Exhibit 10.5 (ii) to
Registrant’s Form 10-Q for the quarter ended March 31, 1998. | — |
| 10.7 | (i) | 1985 Deferred Compensation Plan for Directors of Diebold,
Incorporated — incorporated by reference to Exhibit 10.7 to
Registrant’s Annual Report on Form 10-K for the year ended
December 31, 1992. | — |
| 10.7 | (ii) | Amendment No. 1 to the Amended and Restated 1985 Deferred Compensation
Plan for Directors of Diebold, Incorporated — incorporated by
reference to Exhibit 10.7 (ii) to Registrant’s Form 10-Q for the
quarter ended March 31, 1998. | — |

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q INDEX TO EXHIBITS (continued)

| EXHIBIT NO. — 10.8 | (i) | 1991 Equity and Performance Incentive Plan as Amended and
Restated — incorporated by reference to Exhibit 10.8 to
Registrant’s Form 10-Q for the quarter ended March 31, 1997. | PAGE NO. — — |
| --- | --- | --- | --- |
| 10.8 | (ii) | Amendment No. 1 to the 1991 Equity and Performance Incentive
Plan as Amended and Restated — incorporated by reference to
Exhibit 10.8 (ii) to the Registrant’s Form 10-Q for the
quarter ended September 30, 1998. | — |
| 10.8 | (iii) | Amendment No. 2 to the 1991 Equity and Performance Incentive Plan as
Amended and Restated — incorporated by reference to Exhibit
10.8 (iii) to Registrant’s Form 10-Q for the quarter ended
June 30, 1999. | — |
| 10.9 | | Long-Term Executive Incentive Plan — incorporated by reference
to Exhibit 10.9 of Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1993. | — |
| 10.10 | (i) | 1992 Deferred Incentive Compensation Plan (as amended and restated as of
July 1, 1993) — incorporated by reference to Exhibit 10.10 to
Registrant’s Annual Report on Form 10-K for the year ended
December 31, 1993. | — |
| 10.10 | (ii) | Amendment No. 1 to the Amended and Restated 1992 Deferred Incentive
Compensation Plan — incorporated by reference to Exhibit 10.10
(ii) to Registrant’s Form 10-Q for the quarter ended March 31,
1998. | — |
| 10.10 | (iii) | Amendment No. 2 to the Amended and Restated 1992 Deferred
Incentive Compensation Plan — incorporated by reference to
Exhibit 10.10 (iii) to Registrant’s Form 10-Q for the quarter
ended September 30, 1998. | — |
| 10.11 | | Annual Incentive Plan — incorporated by reference to Exhibit
10.11 to Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1992. | — |
| 10.13 | (i) | Forms of Deferred Compensation Agreement and Amendment No. 1
to Deferred Compensation Agreement — incorporated by reference
to Exhibit 10.13 to Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1996. | — |
| 10.13 | (ii) | Section 162(m) Deferred Compensation Agreement (as amended and restated
January 29, 1998) — incorporated by reference to Exhibit 10.13
(ii) to Registrant’s Form 10-Q for the quarter ended March 31,
1998. | — |
| *10.14 | | Deferral of Stock Option Gains Plan — incorporated by reference to
Exhibit 10.14 of Registrant’s Annual Report on Form 10-K for the
year ended December 31, 1998. | — |

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DIEBOLD, INCORPORATED AND SUBSIDIARIES FORM 10-Q INDEX TO EXHIBITS (continued)

EXHIBIT NO.		PAGE NO.
*10.15	Employment Agreement with Walden W. O’Dell — incorporated by reference
to Exhibit 10.15 of Registrant’s Annual Report on Form 10-K for
the year ended December 31, 1999.	—
*10.16	Separation Agreement with Gerald. F. Morris — incorporated by
reference to Exhibit 10.16 of Registrant’s Annual Report on Form
10-K for the year ended December 31, 1999.	—
10.17	Loan Agreement dated as of December 1, 1999 among Diebold,
Incorporated, the Subsidiary Borrowers, the Lenders and Bank
One, Michigan as Agent — incorporated by reference to Exhibit
10.17 of Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1999.	—
27.	Financial Data Schedule.	21

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