Diebold Nixdorf - 10-Q quarterly report FY

Diebold Nixdorf - 10-Q quarterly report FY

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PART I – FINANCIAL INFORMATION
	ITEM 1. 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 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
Ex 10.20(I)--Transfer & Administration Agreement
Ex 10.21(II)--Amd#1 to the Transfer & Admin Agmt

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(X)		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

OR

( )		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 May 14, 2001

Common Shares $1.25 Par Value		71,591,251 Shares

-1-

DIEBOLD, INCORPORATED AND SUBSIDIARIES

FORM 10-Q

INDEX


		Page No.

PART I	FINANCIAL INFORMATION




ITEM 1.	Financial Statements




	Condensed Consolidated Balance Sheets — March 31, 2001 and December 31, 2000		3




	Condensed Consolidated Statements of Income — Three Months Ended March 31, 2001 and 2000		4




	Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2001 and 2000		5




	Notes to Condensed Consolidated Financial Statements		6








ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12








ITEM 3.	Quantitative And Qualitative Disclosures About Market Risk		15








PART II	OTHER INFORMATION








ITEM 4.	Submission of Matters to a Vote of Security Holders		16








ITEM 6.	Exhibits and Reports on Form 8-K		17








SIGNATURES			20








INDEX TO EXHIBITS			21

-2-

DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)


			(Unaudited)			December 31,
			March 31, 2001			2000

ASSETS




Current assets




	Cash and cash equivalents		$	50,865		$	65,184




	Short-term investments			54,981			61,328




	Trade receivables less allowances of $13,024 and $12,093, respectively			373,446			363,571




	Notes receivable			1,219			13,663




	Inventories			221,752			205,567




	Finance receivables			42,287			35,101




	Deferred income taxes			19,975			17,232




	Prepaid expenses and other current assets			76,243			42,717

		Total current assets		840,768			804,363




Securities and other investments				124,426			123,224




Property, plant and equipment, at cost				375,105			363,493




Less accumulated depreciation and amortization				195,680			188,547

				179,425			174,946




Deferred income taxes				984			6,044




Finance receivables				27,912			94,364




Goodwill				280,800			296,101




Other assets				96,502			86,385

			$	1,550,817		$	1,585,427

LIABILITIES AND SHAREHOLDERS’ EQUITY




Current liabilities




	Notes payable		$	142,585		$	263,609




	Accounts payable			114,742			111,055




	Estimated income taxes			7,966			5,594




	Accrued insurance			12,699			13,365




	Deferred income			112,538			59,242




	Other current liabilities			161,836			113,927

		Total current liabilities		552,366			566,792




Bonds payable				20,800			20,800




Pensions and other benefits				28,898			28,386




Postretirement and other benefits				28,792			28,123




Other liabilities				4,097			—




Minority interest				5,895			5,260




Shareholders’ equity




	Preferred Shares, no par value, authorized 1,000,000 shares,




		none issued		—			—




	Common shares, par value $1.25, authorized 125,000,000 shares;




		issued 72,054,031 and 72,019,205 shares, respectively




		outstanding 71,563,812 and 71,547,232 shares, respectively		90,067			90,024




	Additional capital			98,874			98,530




	Retained earnings			780,171			784,063




	Treasury shares, at cost (490,219 and 471,973 shares, respectively)			(16,455	)		(15,944	)




	Accumulated other comprehensive income			(35,119	)		(12,658	)




	Other			(7,569	)		(7,949	)

		Total shareholders’ equity		909,969			936,066

			$	1,550,817		$	1,585,427

See accompanying notes to condensed consolidated financial statements.

-3-

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,

		2001			2000

Net Sales




	Products	$	188,458		$	180,384




	Services		195,396			164,208

			383,854			344,592




Cost of sales




	Products		113,337			104,293




	Special charges		4,000			—




	Services		149,360			123,476

			266,697			227,769





Gross Profit			117,157			116,823





Selling and administrative expense			67,750			56,756




Research, development and engineering expense			14,754			10,870




Realignment charges			21,124			—

			103,628			67,626





Operating Profit			13,529			49,197




Other income (expense)




	Investment income		4,874			5,901




	Interest expense		(4,143	)		(3,291	)




	Miscellaneous, net		(2,150	)		(4,780	)




Minority interest			(831	)		(370	)

Income before taxes			11,279			46,657





Taxes on income			3,722			15,397

Net income		$	7,557		$	31,260

Basic weighted-average shares outstanding			71,554			71,130




Diluted weighted-average shares outstanding			71,741			71,444





Basic earnings per share		$	0.11		$	0.44




Diluted earnings per share		$	0.11		$	0.44





Cash dividends paid per Common Share		$	0.160		$	0.155

See accompanying notes to condensed consolidated financial statements.

-4-

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


				Three Months Ended March 31,

				2001			2000

Cash flow from operating activities:




	Net income			$	7,557		$	31,260




	Adjustments to reconcile net income to cash provided by operating activities:




		Minority share of income			831			370




		Depreciation			8,766			5,707




		Other charges and amortization			10,276			7,097




		Deferred income taxes			2,801			(3,863	)




		Loss on disposal of assets, net			479			1,928




		Loss on sale of investments, net			—			113




		Cash provided (used) by changes in certain assets and liabilities:




			Trade receivables		(1,738	)		(60,420	)




			Inventories		(19,627	)		(22,974	)




			Prepaid expenses and other current assets		(35,387	)		(1,634	)




			Accounts payable		6,148			(9,999	)




			Certain other assets and liabilities		128,671			67,229

	Net cash provided by operating activities				108,777			14,814





Cash flow from investing activities:




	Proceeds from maturities of investments				15,669			15,571




	Proceeds from sales of investments				—			10,008




	Payments for purchases of investments				(11,284	)		(6,825	)




	Capital expenditures				(16,706	)		(7,120	)




	Decrease (increase) in net finance receivables				59,240			(413	)




	Increase in certain other assets				(40,340	)		(9,940	)

	Net cash provided by investing activities				6,579			1,281





Cash flow from financing activities:




	Dividends paid				(11,449	)		(11,042	)




	Notes payable borrowings				40,490			10,000




	Notes payable repayments				(155,836	)		(27,000	)




	Distribution of affiliate’s earnings to minority interest holder				(125	)		(150	)




	Issuance of Common Shares				194			1,755




	Repurchase of Common Shares				(511	)		(1,075	)

	Net cash used by financing activities				(127,237	)		(27,512	)





Effect of exchange rate changes on cash					(2,438	)		—

Decrease in cash and cash equivalents					(14,319	)		(11,417	)




Cash and cash equivalents at the beginning of the period					65,184			27,299

Cash and cash equivalents at the end of the period				$	50,865		$	15,882

See accompanying notes to condensed consolidated financial statements.

-5-

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


	Three Months Ended March 31,

	2001		2000

Numerator:




Income used in basic and diluted earnings per share	$	7,557	$	31,260





Denominator:




Basic weighted-average shares		71,554		71,130




Effect of dilutive fixed stock options		187		314

Diluted weighted-average shares		71,741		71,444


Basic earnings per share	$	0.11	$	0.44




Diluted earnings per share	$	0.11	$	0.44

Anti-dilutive shares not used in calculating diluted weighted-average shares		1,332		1,450


3.	Inventory detail at:	March 31, 2001		December 31, 2000

	Finished goods and service parts	$	68,537	$	63,855




	Work in process		142,757		130,578




	Raw materials		10,458		11,134





	Total inventory	$	221,752	$	205,567

-6-

DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(In thousands except for per share amounts)

-7-

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


7.		In June 1998, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 133, Accounting for Derivative Instruments and Hedging Activities, which for the Registrant, was effective January 1, 2001. SFAS 133 establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recognized on the balance sheet as either an asset or liability measured at its fair value. SFAS 133 requires that changes in the derivative instrument’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument’s gains and losses to partially or wholly offset related results on the hedged item in the income statement, and requires that a company must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. The cumulative effect of adopting SFAS 133 as of January 1, 2001 was not material to the Registrant’s consolidated financial statements.

		Since a substantial portion of the Registrant’s operations and revenue arise outside of the United States, financial results can be significantly affected by changes in foreign exchange rate movements. The Registrant’s risk management strategy uses forward contracts to hedge certain foreign currency exposures. Such contracts are designated at inception to the related foreign currency exposures being hedged. The Registrant’s intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on the derivative contracts hedging these exposures. The Registrant does not enter into any speculative positions with regard to derivative instruments. The Registrant’s foreign currency hedges generally mature within six months.

		The Registrant records all derivatives on the balance sheet at fair value. For derivative instruments not designated as hedging instruments, changes in their fair values are recognized in earnings in the current period. The Registrant’s foreign currency hedges are designated as fair value hedges and the resulting changes in fair values are recognized in earnings in the current period in other income or expense. Results from the Registrant’s foreign currency hedges were not material to the financial statements for first quarter 2001. At March 31, 2001, the net fair value of derivatives designated as fair value hedges was not material to the financial statements.

8.		In September 2000, the FASB issued SFAS No. 140, Accounting for Transfer and Servicing of Financial Assets and Extinguishments of Liabilities – a Replacement of FASB Statement No. 125.

		On March 30, 2001, the Registrant entered into an agreement to sell, on an ongoing basis, a pool of its lease receivables to a wholly owned, unconsolidated, qualified, special purpose subsidiary, DCC Funding LLC (DCCF). The Registrant sold $95.3 million of lease receivables on March 30, 2001 to DCCF. Under a 364 day facility agreement, DCCF sold and, subject to certain conditions, may from time to time sell an undivided fractional ownership interest in the pool of receivables to a multi-seller receivables securitization company (Conduit). Upon sale of the receivables to the Conduit, DCCF holds a subordinated interest in the receivables and services, administers and collects the receivables. DCCF and the Conduit have no recourse to the Registrant’s other assets for failure of debtors to pay when due. Costs associated with the sale of the receivables were $457 as of March 31, 2001.

-8-

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


		The Registrant has a retained interest in the transferred receivables in the form of a note receivable from DCCF to the extent that they exceed advances to DCCF by the Conduit. The Registrant initially and subsequently measures the fair value of the retained interest at management’s best estimate of the undiscounted expected future cash collections on the transferred receivables. Actual cash collections may differ from these estimates and would directly affect the fair value of the retained interests. As of March 31, 2001, the Registrant received proceeds from the new securitization of $71.4 million. The Registrant recorded an after-tax gain of $2.3 million on the sale of the receivables to DCCF.

-9-

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

-10-

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

DNA

Other

Total

1st Quarter 2001 Segment Information by Channel

Customer revenues

229,327

151,080

3,447

383,854

Realignment and special charges

(10,998

)

(7,126

)

(9,000

)

(27,124

)

Operating profit/(loss)

17,875

7,104

(11,450

)

13,529

1st Quarter 2000 Segment Information by Channel

Customer revenues

242,543

99,264

2,785

344,592

Realignment and special charges

—

Operating profit/(loss)

47,233

7,821

(5,857

)

49,197

Total Revenue by Geography

For the period ending March 31:


		2001		2000

The Americas:




	Financial self-service solutions	$	230,222	$	232,183




	Security solutions		69,996		71,342




	Other (voting machines/MedSelect)		1,441		3,555

	Total Americas		301,659		307,080





Asia-Pacific:




	Financial self-service solutions		20,947		14,023




	Security solutions		255		427

	Total Asia-Pacific		21,202		14,450





Europe, Middle East and Africa:




	Financial self-service solutions		60,864		22,994




	Security solutions		129		68

	Total Europe, Middle East and Africa		60,993		23,062





Total Revenue		$	383,854	$	344,592

Total Revenue by Product and Service Solutions

For the period ending March 31:


		2001		2000

Self-service solutions hardware		$	138,182	$	126,786




Professional and special services			18,001		17,291

	Total product financial self services		156,183		144,077





Maintenance services			155,850		125,123

	Total financial self-service solutions		312,033		269,200





Security solutions hardware			30,834		32,751




Maintenance services			39,546		39,086

	Total security solutions		70,380		71,837





Total excluding voting machines and MedSelect			382,413		341,037





Voting machines			—		614




MedSelect			1,441		2,941

Total Revenue		$	383,854	$	344,592

-11-

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, 2001
(Unaudited)
(Dollars in thousands except for per share amounts)

Material Changes in Financial Condition

Total assets for the first quarter ended March 31, 2001 were $1,550,817, down $34,610, or 2.2 percent from December 31, 2000, primarily due to the securitization of finance receivables, increasing net cash provided by operating activities. Inventories increased $16,185 primarily due to the Registrant’s shift of manufacturing processes overseas in order to meet international demand more efficiently. The increase in prepaid expenses and other current assets of $33,526 is primarily due to timing of payments for value added tax, insurance and other premiums.

Total liabilities of $640,848 are down $8,513 from December 31, 2000. The net decrease is primarily due to the paydown of notes payable through the use of cash provided from operating activities and securitization proceeds and offset by an increase in deferred revenue due to an increase in the customer service base.

Future capital expenditures, acquisitions and increases in working capital are expected to be financed through internally generated funds and external financing. If necessary, the Registrant’s investment portfolio is available for any funding needs. External financing is also available if needed through the Registrant’s lines of credit. At March 31, 2001, the Registrant’s bank credit lines approximated $250,000, and EUR 125,000 (translation $109,750) with various institutions. The Registrant had $142,445 outstanding borrowings under these agreements, with an average short-term rate of 5.54 percent. These lines of credit represent an additional and immediate source of liquidity.

Shareholders’ equity decreased $26,097 over December 31, 2000. Accumulated other comprehensive income decreased by $22,461 due to foreign currency translation adjustments. Shareholders’ equity per Common Share at March 31, 2001 decreased to $12.72 from $13.08 at December 31, 2000. The first quarter cash dividend of $0.16 per share was paid on March 9, 2001 to shareholders of record on February 16, 2001. On April 26, 2001, the second quarter cash dividend of $0.16 per share was declared payable on June 8, 2001 to shareholders of record on May 18, 2001. 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 2001 fluctuated within the range of $25.75 and $36.38.

Results of Operations

Overall, net sales for the first quarter of 2001 increased from the same period in 2000 by $39,262 or 11.4 percent, primarily due to an increased customer base as a result of the acquisitions that occurred in the past two years. Total product revenue showed an increase of $8,074, or 4.5 percent over the first quarter of 2000. Total service revenue for the quarter was up from the prior year by $31,188 or 19.0 percent.

-12-

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, 2001
(Unaudited)
(Dollars in thousands except for per share amounts)

Results of Operation (continued)

Gross profit of $117,157 was $334, or 0.3 percent higher than the same quarter last year. Product gross margin of 39.9 percent was down from 2000 first quarter gross margin of 42.2 percent. Service gross margin of 23.6 percent was down from 24.8 percent a year ago due to a very competitive service market. The margins were negatively affected due to the increase in the international revenue mix that is accompanied by lower margins due to a competitive international environment.

Total operating expenses of $103,628 were 27.0 percent of revenue, which was an increase from 19.6 percent of revenue in 2000, primarily due to realignment costs incurred during the first quarter of 2001. Excluding realignment charges, total operating expenses remained flat as a percentage of revenue.

Net income of $7,557 was down by 75.8 percent over first quarter 2000 net income of $31,260, resulting in first quarter diluted earnings per share of $0.11. The decrease is primarily due to first quarter realignment and special charges of $18,173 (after-tax).

Segment Information

DNA customer revenues of $229,327 for the first quarter ended March 31, 2001 decreased by $13,216, or 5.4 percent from the same period in 2000, due to the weakness of the U.S. market. DNA operating profits for the same period were down by $29,358, or 62.2 percent, primarily due to realignment and special charges.

DI customer revenues were up for the first quarter of 2001 over the same quarter of 2000 by $51,816, or 52.2 percent. Europe, the Middle East and Africa revenue increased $37,931, or 164.5 percent. Again, the increase in international revenues is primarily due to an increased customer base resulting from the acquisitions that occurred during the past two years. Asia-Pacific revenue increased $6,752, or 46.7 percent from the same period in 2000 due to growing demands in the Asia-Pacific market.

The segment called Other showed an operating loss of $11,450 for the first quarter of 2001, primarily due to the realignment expense.

-13-

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, 2001
(Unaudited)
(Dollars in thousands except for per share amounts)

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 mergers, acquisitions or other business combinations that may be completed after March 31, 2001. Registrant’s expectations include:

	•	Second quarter earnings per share in the range of $.43 to $.49, excluding realignment and special charges. Full year 2001 earnings per share in the range of $1.95 to $2.00, excluding realignment and special charges.
	•	Additional realignment and special charges are estimated in the range of $30 million to $40 million during the remainder of 2001, of which approximately $5 million to $10 million will be in the second quarter.
	•	Depreciation, amortization and goodwill in the range of $70 million to $75 million for the year 2001.
	•	Capital expenditures of approximately $50 million for 2001.
	•	Effective tax rate of approximately 33 percent.

Forward-Looking Statement Disclosure

In the Registrant’s written or oral statements, the use of the words “believes,” “anticipates,” “expects” 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 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. Although the Registrant believes that its outlook is based upon reasonable assumptions regarding the economy, its knowledge of its business, and on key performance indicators which impact the Registrant, there can be no assurance that the Registrant’s goals will be realized. The Registrant is not obligated to report changes to its outlook. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 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:

	•	competitiveness 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 the 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;
	•	ability to continue to generate revenue growth in both domestic and international markets;
	•	ability to reduce costs and expenses and improve internal operating efficiencies; and
	•	variation in consumer demand for biometrics and self-service technologies, products and services.

-14-

DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Registrant is exposed to foreign currency exchange rate risk inherent in our international operations denominated in currencies other than the U.S. dollar. The Registrant’s risk management strategy uses derivative financial instruments such as forwards to hedge certain foreign currency exposures. The intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on the derivative contracts hedging these exposures. The Registrant does not enter into derivatives for trading purposes.

The Registrant performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign exchange rates applied to the hedging contracts and underlying exposures describe above. As of March 31, 2001, the analysis indicated that these hypothetical market movements would not materially affect the results of operations. Actual gains and losses in the future may differ materially from that analysis based on changes in the timing and amount of foreign currency exchange rate movements and our actual exposures and hedges.

-15-

DIEBOLD, INCORPORATED AND SUBSIDIARIES
FORM 10-Q

PART II. OTHER INFORMATION

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

The Registrant’s annual meeting of shareholders was held on April 26, 2001. 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


	For		Withheld

Louis V. Bockius III		61,578,484		1,612,316




Richard L. Crandall		61,584,546		1,606,254




Gale S. Fitzgerald		61,564,387		1,626,413




Donald R. Gant		58,795,072		4,395,728




L. Lindsey Halstead		61,527,183		1,663,617




Phillip B. Lassiter		61,591,052		1,599,748




John N. Lauer		61,589,340		1,601,460




William F. Massy		61,559,546		1,631,254




Walden W. O’Dell		61,569,635		1,621,165




W. R. Timken, Jr.		61,587,862		1,602,938

2. Proposal to Amend and Restate the 1991 Equity and Performance Incentive Plan


For	Against		Abstained

34,326,252		17,626,794		689,895

There were 10,559,959 broker non-votes.

3. Ratification of Appointment of KPMG LLP as Independent Auditors for 2001


For	Against		Abstained

57,707,321		3,445,052		2,038,427

There were no broker non-votes.

-16-

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 to Registrant’s 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, 2000.




*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 required to be filed as an exhibit pursuant to Item 14(c) of this report.

-17-

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 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, 2000.




*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 required to be filed as an exhibit pursuant to Item 14(c) of this report.

-18-

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	(i)	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, 2000.




*10.17	(ii)	First Amendment to 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 (ii) of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.




*10.17	(iii)	Second Amendment to 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 (iii) of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.




*10.18		Retirement and Consulting Agreement with Robert W. Mahoney – incorporated by reference to Exhibit 10.18 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.




*10.19		Employment Agreement with Wesley B. Vance — incorporated by reference to Exhibit 10.19 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.




*10.20	(i)	Transfer and Administration Agreement by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association.




*10.20	(ii)	Amendment No. 1 to the Transfer and Administration Agreement by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association.




	*	Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 14(c) of this report.




(b)		Reports on Form 8-K.




		No reports on Form 8-K were filed by Registrant during the first quarter of 2001.

-19-

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:	May 15, 2001	By:	/s/ Walden W. O’Dell

			Walden W. O’Dell Chairman of the Board, President and Chief Executive Officer

Date:	May 15, 2001	By:	/s/ Gregory T. Geswein

			Gregory T. Geswein Senior Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)

-20-

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


EXHIBIT NO.			PAGE 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.		—




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 to Registrant’s 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, 2000.		—




*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.		—

-21-

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


EXHIBIT NO.			PAGE 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.		—




*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 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, 2000.		—




*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.		—

-22-

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	(i)	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, 2000.		—




*10.17	(ii)	First Amendment to 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 (ii) of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.		—




*10.17	(iii)	Second Amendment to 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 (iii) of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.		—




*10.18		Retirement and Consulting Agreement with Robert W. Mahoney – incorporated by reference to Exhibit 10.18 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.		—




*10.19		Employment Agreement with Wesley B. Vance — incorporated by reference to Exhibit 10.19 of Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.		—




*10.20	(i)	Transfer and Administration Agreement by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association.		24




*10.20	(ii)	Amendment No. 1 to the Transfer and Administration Agreement by and among DCC Funding LLC, Diebold Credit Corporation, Diebold, Incorporated, Receivables Capital Corporation and Bank of America, National Association.		25




	*	Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 14(c) of this report.

-23-

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, 2000. 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, 2001 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.