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Fresh Start Accounting | 9 Months Ended
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Sep. 30, 2023
Reorganizations [Abstract] |
Chapter 11 Cases and Dutch Scheme Proceedings, Ability to Continue as a Going Concern and Other Related Matters | Chapter 11 Cases and Dutch Scheme Proceedings, Ability to Continue as Going Concern and Other Related Matters Voluntary Reorganization On June 1, 2023, the Company and certain of its U.S. and Canadian subsidiaries (collectively, the Debtors) filed voluntary petitions in the U.S. Bankruptcy Court for the Southern District of Texas (the U.S. Bankruptcy Court) seeking relief under chapter 11 of title 11 of the U.S. Code (the U.S. Bankruptcy Code). The cases were jointly administered under the caption In re: Diebold Holding Company, LLC, et al. (Case No. 23-90602) (the Chapter 11 Cases). Additionally, on June 1, 2023, Diebold Nixdorf Dutch Holding B.V. (Diebold Dutch) filed a scheme of arrangement relating to certain of the Company’s other subsidiaries (the Dutch Scheme Parties) and commenced voluntary proceedings (the Dutch Scheme Proceedings and, together with the Chapter 11 Cases, the Restructuring Proceedings) under the Dutch Act on Confirmation of Extrajudicial Plans (Wet homologatie onderhands akkoord) in the District Court of Amsterdam (the Dutch Court). In addition, on June 12, 2023, Diebold Dutch filed a voluntary petition for relief under chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court seeking recognition of the Dutch Scheme Proceedings as a foreign main proceedings and related relief (the Chapter 15 Proceedings). On July 13, 2023, the U.S. Bankruptcy Court entered an order (the Confirmation Order) confirming the Debtors’ Second Amended Joint Prepackaged Chapter 11 Plan of Reorganization (the U.S. Plan). On August 2, 2023, the Dutch Court entered an order (the WHOA Sanction Order) sanctioning the Netherlands WHOA Plan of Diebold Dutch and the Dutch Scheme Companies (the WHOA Plan) in the Dutch Scheme Proceedings. On August 7, 2023, the U.S. Bankruptcy Court entered an order in the Chapter 15 Proceedings recognizing the WHOA Plan and the WHOA Sanction Order. On August 11, 2023 (the Effective Date or Fresh Start Reporting Date), the U.S. Plan and WHOA Plan (together, the Plans) became effective in accordance with their terms and the Debtors and the Dutch Scheme Parties emerged from the Chapter 11 Cases and the Dutch Scheme Proceedings. Following filing the notice of the Effective Date with the U.S. Bankruptcy Court, the Chapter 15 Proceedings were closed. The following is a summary of the material provisions of the U.S. Plan, as confirmed by the U.S. Bankruptcy Court pursuant to the Confirmation Order, and the WHOA Plan (as applicable), as sanctioned by the Dutch Court, and are qualified in its entirety by reference to the full text of the Plans (including the Plan Supplement). Capitalized terms used but not defined in the following "Treatment of Claims" section of this Quarterly Report on Form 10-Q have the meanings set forth in the U.S. Plan. Treatment of Claims The following is a high-level summary of the treatment of claims and interests under the Plans (as applicable), which is qualified in its entirety by the terms of the Plans (as applicable): •Holders of Other Secured Claims. Each holder of allowed Other Secured Claims received, at the Company’s option: (a) payment in full in cash; (b) the collateral securing its secured claim; (c) reinstatement of its secured claim; or (d) such other treatment rendering its secured claim unimpaired in accordance with section 1124 of the U.S. Bankruptcy Code. •Holders of Other Priority Claims. Each holder of allowed Other Priority Claims received, at the Company’s option: (a) payment in full in cash; or (b) such other treatment rendering its other priority claim unimpaired in accordance with section 1124 of the U.S. Bankruptcy Code. •Holders of ABL Facility Claims. Prior to the Effective Date, allowed ABL Facility Claims were paid in full and any letters of credit were cash collateralized. •Holders of Superpriority Term Loan Claims. Prior to the Effective Date, allowed Superpriority Term Loan Claims were paid in full. •Holders of First Lien Claims. On the Effective Date, each holder of allowed First Lien Claims received its pro rata share of 98% of the reorganized Company’s new common equity interests (the New Common Stock) available for distribution to certain creditors under the Plans, which is subject to dilution on account of (a) the issuance of the New Common Stock (the Additional New Common Stock) as premiums in consideration for commitments with respect to the Debtors’ $1,250.0 debtor-in-possession term loan credit facility (the DIP Facility) and (b) a new management incentive plan implemented in connection with the Chapter 11 Cases pursuant to which 6% of the number of shares of New Common Stock issued pursuant to the U.S. Plan on a fully diluted basis (the MIP Shares) were reserved for issuance to management as determined by the reorganized Company’s new Board of Directors. •Holders of Second Lien Notes Claims. On the Effective Date, each holder of allowed Second Lien Notes Claims received its pro rata share of 2% of the New Common Stock available for distribution to creditors under the Plans, which is subject to dilution on account of (a) the issuance of certain of the Additional New Common Stock and (b) the MIP Shares. •Holders of 2024 Stub Unsecured Notes Claims. On the Effective Date, each holder of allowed 2024 Stub Unsecured Notes Claims received its pro rata share of an amount of a $3.5 cash distribution, which provided such holder with the same percentage recovery on its allowed 2024 Stub Unsecured Notes Claim that a holder of an allowed Second Lien Notes Claim received in respect of its allowed Second Lien Notes Claim (as diluted on account of the Additional New Common Stock, as applicable) under the U.S. Plan based upon the midpoint of the equity value of the New Common Stock as set forth in the Disclosure Statement approved in the Chapter 11 Cases (the Disclosure Statement). •Holders of General Unsecured Claims. On the Effective Date, each allowed General Unsecured Claim was reinstated and paid in the ordinary course of business in accordance with the terms and conditions of the particular transaction or agreement giving rise to such allowed general unsecured claim. •Holders of Section 510(b) Claims. On the Effective Date, claims subject to section 510(b) of the U.S. Bankruptcy Code were either extinguished, cancelled and discharged, and holders thereof received no distributions from the Debtors in respect of their claims. •DNI Equity Holders. Each holder of an equity interest in Diebold Nixdorf, Incorporated had such interest extinguished, cancelled and discharged without any distribution. The Exit Credit Agreement On the Effective Date, the Company, as borrower, entered into a new credit agreement (the Exit Credit Agreement) governing its $1,250.0 senior secured loan credit facility (the Exit Facility) along with certain financial institutions party thereto, as lenders, GLAS USA LLC, as administrative agent, and GLAS Americas LLC, as collateral agent. Concurrently with the closing of the Exit Facility, the Company’s existing $1,250.0 senior secured superpriority debtor-in-possession term loan credit facility (the DIP Facility) was terminated and the loans outstanding under the DIP Facility were converted into loans outstanding under the Exit Facility (the Conversion), and the liens and guarantees, including all guarantees and liens granted by certain subsidiaries of the Company that are organized in the United States and in certain foreign jurisdictions, granted under the DIP Facility were automatically terminated and released. In connection with the Conversion, the entire $1,250.0 under the Exit Facility was deemed drawn on the Effective Date. The Company may repay the loans under the Exit Facility at any time; provided that certain repayments of the loans made on or prior to February 11, 2025 with the proceeds of certain types of indebtedness must be accompanied by a premium of either 1.00% or 5.00% of the principal amount of the loans repaid. The amount of the premium is based on the type of indebtedness incurred to repay the loans. Amounts borrowed and repaid under the Exit Facility may not be reborrowed. The Exit Facility will mature on August 11, 2028. The obligations of the Company under the Exit Facility are guaranteed by certain subsidiaries of the Company that are organized in the United States (the Guarantors). The Exit Facility and related guarantees are secured by perfected senior security interests and liens on substantially all assets of the Company and each Guarantor. Loans under the Exit Facility bear interest at an adjusted secured overnight financing rate with a one-month tenor rate plus 7.50% per annum or an adjusted base rate plus 6.50% per annum. The Exit Facility includes conditions precedent, representations and warranties, affirmative and negative covenants and events of default that are customary for financings of this type and size. Registration Rights Agreement On the Effective Date, the Company entered into a registration rights agreement (the Registration Rights Agreement) with certain parties (together with any person or entity that becomes a party to the Registration Rights Agreement, the Holders) that received shares of the New Common Stock on the Effective Date as provided in the Plans. The Registration Rights Agreement provides Holders with registration rights for the Holders’ Registrable Securities (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company is required to file a Resale Shelf Registration Statement (as defined in the Registration Rights Agreement) with respect to the Registrable Securities within 90 calendar days of the Effective Date. Subject to certain exceptions, the Company is required to use commercially reasonable efforts maintain the effectiveness of any such registration statement until the date on which all Registrable Securities registered thereunder are no longer Registrable Securities. In addition, specified Holders have the right to demand that the Company effect the registration of any or all of the Registrable Securities (a Demand Registration) and/or effectuate the distribution of any or all of their Registrable Securities by means of an underwritten shelf takedown offering. The Company is not obligated to effect more than five Demand Registrations or more than four underwritten shelf takedown offerings and it need not comply with such a request unless the aggregate gross proceeds from such a sale will exceed specified thresholds and other conditions are met. The Company will not be obligated to effect an underwritten shelf takedown within 180 days after the consummation of a previous underwritten shelf takedown or Demand Registration. Holders also have customary piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration statement and the Company’s right to delay or withdraw a registration statement under certain circumstances. The Company will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods. Share-Based Compensation As discussed above, on the Effective Date, the then existing common shares of the Predecessor were canceled and the New Common Stock was issued. Accordingly, the existing share-based compensation awards issued pursuant to the 2017 Equity and Performance Incentive Plan were also canceled, which resulted in the recognition of any previously unamortized expense related to the canceled awards on the date of cancellation. Management Incentive Plan Pursuant to the U.S. Plan, the reorganized Company adopted a new management incentive plan (the MIP). The U.S. Plan contemplates that 6% of the New Common Stock, on a fully diluted basis, is reserved for issuance in connection with the MIP. As of September 30, 2023, the terms of awards under the MIP have not been established; as such, no grants have been awarded pursuant to the MIP. Conversion to Delaware Corporation Pursuant to the U.S. Plan as and part of the Restructuring Proceedings, the Company was reincorporated as a Delaware corporation. Going Concern Assessment The Company's condensed consolidated financial statements included herein have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. As discussed above, commencing June 1, 2023, the Debtors and the Dutch Scheme Parties were operating as debtors in possession under the supervision and jurisdiction of the U.S. Bankruptcy Court and the Dutch Court until the Effective Date, when the U.S. Plan and the WHOA Plan became effective in accordance with their terms and the Debtors and Dutch Scheme Parties emerged from the Chapter 11 Cases and Dutch Scheme Proceedings. Prior to and during the pendency of the Chapter 11 Cases and Dutch Scheme Proceedings, the Company’s ability to continue as a going concern was subject to a high degree of risk and uncertainty until the Plans were confirmed and became effective. As a result of the U.S. Plan and the WHOA Plan becoming effective on the Effective Date, the Company believes that it has the ability to meet its obligations for at least one year from the date of the issuance of this Form 10-Q and that there is no longer substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. Liabilities Subject to Compromise During the pendency of the Chapter 11 Cases and Dutch Scheme Proceedings, prepetition liabilities of the Debtors and Dutch Scheme Parties subject to compromise under the Restructuring Proceedings were distinguished from liabilities that were not expected to be compromised and post-petition liabilities in our condensed consolidated balance sheets. Liabilities subject to compromise were recorded at the amounts expected to be allowed by the U.S. Bankruptcy Court. See Note 3 for a listing of liabilities subject to compromise immediately prior to the effectiveness of the Plans. The contractual interest expense on Debt that was classified as subject to compromise was in excess of recorded interest expense by $50.6 and $67.5 for the period from July 1, 2023 through August 11, 2023 and the period from January 1, 2023 through August 11, 2023, respectively. This excess contractual interest was not recorded as interest expense on the Predecessor's Condensed Consolidated Statements of Operations, as we had discontinued accruing interest on this debt and discontinued making interest payments beginning on June 1, 2023 in connection with filing of the plans. See Note 12 for further detail regarding Debt subject to compromise. Reorganization Items, Net The income, expenses, gains and losses directly and incrementally resulting from the Chapter 11 Cases and Dutch Scheme Proceedings are separately reported as Reorganization items, net in our condensed consolidated statement of operations. Reorganization items, net consisted of the following:
| Successor |  |  | Predecessor |  | Successor |  |  | Predecessor
| 08/12/2023 through 09/30/2023 |  |  | 07/01/2023 through 08/11/2023 |  | 08/12/2023 through 09/30/2023 |  |  | 01/01/2023 through 08/11/2023
Gain on settlement of liabilities subject to compromise (non-cash) | $ | — |  |  |  | $ | 1,570.5 |  |  | $ | — |  |  |  | $ | 1,570.5 |
Fresh start valuation adjustments (non-cash) | — |  |  |  | 686.7 |  |  | — |  |  |  | 686.7 |
Professional fees (cash) | (8.0) |  |  |  | (35.2) |  |  | (8.0) |  |  |  | (38.7) |
Unamortized debt issuance costs (non-cash) | — |  |  |  | — |  |  | — |  |  |  | (124.6) |
DIP premium (non-cash) | — |  |  |  | 32.6 |  |  | — |  |  |  | (384.4) |
Debt make-whole premium (cash) | — |  |  |  | — |  |  | — |  |  |  | (91.0) |
Lease rejection damage claim (cash) | — |  |  |  | (3.8) |  |  | — |  |  |  | (3.8) |
Other (non-cash) | — |  |  |  | (0.5) |  |  | — |  |  |  | (0.6) |
Total Reorganization items, net | $ | (8.0) |  |  |  | $ | 2,250.3 |  |  | $ | (8.0) |  |  |  | $ | 1,614.1 |
Cash paid for Reorganization items, net was $4.7 and $107.2 for the Successor Period from August 12, 2023 through September 30, 2023 and the Predecessor Period, respectively. Fresh Start Accounting Fresh Start Accounting As discussed in Note 1, upon emergence from the Chapter 11 Cases and Dutch Scheme Proceedings, the Company qualified for and adopted Fresh Start Accounting, which resulted in the Company becoming a new entity for financial reporting purposes (the Successor). The reorganization value derived from the range of enterprise values associated with the Plans was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their fair values (except for deferred income taxes) with the remaining excess value allocated to goodwill. As a result of the adoption of Fresh Start Accounting and the effects of the implementation of the Plans, the Company’s condensed consolidated financial statements of the Successor, are not comparable to its condensed consolidated financial statements of the Predecessor. Reorganization Value The Successor determined a value to be assigned to the equity of the emerging entity as of the date of adoption of Fresh Start Accounting. The Disclosure Statement approved in the Chapter 11 Cases (the Disclosure Statement) included a range of enterprise values between $2,150.0 and $2,450.0. The Company engaged third-party valuation advisors to assist in determining a point estimate of enterprise value within the range and the allocation of enterprise value to the assets and liabilities for financial reporting purposes based on management’s latest outlook as of the Effective Date. The Company deemed it appropriate to use an enterprise value of $2,150.0 for financial reporting. The following table reconciles the enterprise value to the estimated fair value of the Successor common stock as of the Fresh Start Reporting Date:
Enterprise value | $ | 2,150.0 |
Plus: Excess cash available for operations | 206.1 |
Less: Fair value of Exit Facility | (1,250.0) |
Less: Net pension, post-retirement and other benefits liability | (39.3) |
Less: Other debt | (13.9) |
Less: Noncontrolling interests | (13.9) |
Fair Value of Successor Equity | $ | 1,039.0 |
The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Fresh Start Reporting Date:
Enterprise value | $ | 2,150.0 |
Plus: Excess cash available for operations | 206.1 |
Less: Net pension, post-retirement and other benefits liability | (39.3) |
Plus: Fair value of non-debt current liabilities | 1,398.3 |
Plus: Fair value of non-debt, non-current liabilities | 225.0 |
Plus: Deferred income taxes, non-current | 238.5 |
Reorganization Value of Successor's Assets to be Allocated | $ | 4,178.6 |
The discounted cash flow (DCF) method, a form of the income approach, was relied upon to validate the selected enterprise value of the Company within the range established within the Disclosure Statement, as well as to allocate the resulting consolidated enterprise value between the Company’s two reporting units. The DCF method is a multiple period discounting model in which the value of an entity is determined based on the present value of its expected future economic benefits. For purposes of our analysis, we used free cash flow, defined as the earnings available for distribution to an entity’s investors after consideration of the cash reinvestment required to support the Company’s continued operations and future growth. Conceptually, free cash flow as defined above is the amount that could be paid to investors without impairing an entity’s current or future operations. The expected cash flows for the period from August 12, 2023 through December 31, 2023 and for the years ending December 31, 2024 through 2028 were based on the financial projections and assumptions utilized as an input to determining the range of enterprise values in the Disclosure Statement. The expected cash flows beyond this period were based on long-term profitability and growth expectations. A terminal value was included, based on the cash flows of the final year of the discrete forecast period. Discount rates of 19.0% and 19.0% were estimated for the Company’s Banking and Retail reporting units, respectively, based on an after-tax weighted average cost of capital (WACC) reflecting the rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the financial projections used to estimate future cash flows. These discount rates were also compared to the consolidated internal rate of return (IRR) of 18.9% to assess reasonableness. The IRR is the rate of return that equates the present value of the expected consolidated cash flows to the enterprise value relied upon within the range established in the Disclosure Statement. The enterprise value and corresponding equity value are dependent upon achieving the future financial results set forth in our projections. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to uncertainties and the resolution of contingencies beyond our control. Accordingly, there cannot be assurance that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially. Valuation Process The Company estimated the fair values of the Company’s principal assets, including inventory, property, plant, and equipment, and intangible assets as well as the Company’s lease liabilities and the Exit Facility. Inventory The replacement value of the Company’s raw materials inventory was considered as its fair value. The comparative sales method was employed to estimate the fair value of the Company’s work-in-process and finished goods inventory. The comparative sales method utilizes the expected selling price of the inventory items as the base inventory value amount. This amount is then adjusted downward for costs and expenses associated with the time and effort that would be required to dispose of the inventory and a reasonable profit. Property, plant, and equipment Personal Property Personal property consisted of machinery, tools, equipment, furniture and fixtures, leasehold improvements, computer and equipment, and construction in progress. The cost approach was primarily utilized for the Company's personal property. This approach considers the amount required to construct or purchase a new asset of equal utility at current prices, with adjustments in value for physical deterioration, and functional and economic obsolescence. Physical deterioration is an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not prevented by maintenance. Functional obsolescence is the loss in value or usefulness of an asset caused by inefficiencies or inadequacies of the asset, as compared to a more efficient or less costly replacement asset with newer technology. Economic obsolescence is the loss in value or usefulness of an asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors. Land and Building Improvements The valuation of land, land improvements, buildings and building improvements was performed using either the cost, income capitalization or sales comparison approach, depending on the nature of the asset. The cost approach was utilized for the Company’s owned industrial facilities. The income capitalization approach was used to value the Company’s interests in an industrial complex. The income capitalization approach measures the value of a property by calculating the present value of the future economic benefits associated with the property. The sales comparison approach was used for certain owned vacant land and relies upon recent sales or similar offerings to arrive at a probable selling price. Intangible Assets Tradenames and Trademarks and Technology / Know-How Assets The relief from royalty method was relied upon to value the trade names and trademarks and technology / know-how assets. The relief from royalty analysis is comprised of two major steps: (i) a determination of an appropriate royalty rate, and (ii) the subsequent application of the royalty rate to projected revenue. In determining an appropriate royalty rate, the Company considered comparable license agreements, an excess earnings analysis to determine aggregate intangible asset earnings, and other qualitative factors. The key assumptions used to estimate the fair value of the Company’s trade names and trademarks and technology / know-how assets included forecasted revenues, the royalty rate, the tax rate and the discount rate. The relief from royalty method was relied upon for these valuations. The relief from royalty method measures the benefit of owning an intangible asset as the “relief” from the royalty expense that would otherwise be incurred by licensing the asset from a third party. It assumes that if the Company did not own the intangible asset, then it would be willing to pay a royalty for its use. This method is most commonly used for readily transferable intangible assets that have licensing appeal, such as intellectual property. Customer Relationship and Backlog Assets The customer relationships and backlog assets were valued using the multi-period excess earnings method, a variation of the income approach. For the customer relationships assets, revenues attributable to customer assets were determined and an attrition rate based on historical customer trends was applied to estimate the expected decline anticipated from the existing customer population. The cash flows attributable to the customer relationships and backlog assets were also determined by applying appropriate costs and contributory asset charges then adjusted using a discount rate that is commensurate with the risk inherent in the customer-related intangible assets. The key assumptions used to estimate the fair value of the customer-related assets included forecasted revenues, attrition rates, profit margins, contributory asset charges, the tax rate and the discount rate. Joint ventures To estimate the value of the joint ventures, the DCF method was employed to determine the enterprise value of these entities. Adjustments for cash and cash equivalents and interest-bearing debt were made to enterprise value to calculate each entity’s equity value. The application of a discount for lack of control was also considered. Lastly, the concluded equity value was adjusted for the Company’s ownership interest. Lease liabilities and right of use assets Lease liabilities were estimated as the present value of the remaining lease payments. The Company estimated an incremental borrowing rate and used it as the discount rate in the analysis. Right of use asset values were estimated by adjusting the lease liability estimates with estimates of off-market value of leases. Off-market (or above/below market) value was estimated as the present value of the differential between contract rates and market rates over the remaining term of a lease. Exit Facility To estimate the value of the Exit Facility, a DCF method was employed. The fair value of the Exit Facility was estimated by analyzing the expected cash flows and discounting such cash flows at a rate of return that reflects the time value of money and credit risk of the Company. The credit risk of the Company was determined via a synthetic credit rating analysis, and the concluded discount rate was determined by analyzing comparable corporate debt instruments and their observed market yields. Noncontrolling interests To estimate the value of the non-controlling interests, the DCF method was employed to determine the enterprise value of these entities. Adjustments for cash and cash equivalents and interest-bearing debt were made to enterprise value to calculate each entities’ equity value. The application of a discount for lack of control was also considered. Lastly, the concluded equity value was adjusted for the non-controlling interest’s ownership position. Consolidated Balance Sheet The adjustments included in the following fresh start condensed consolidated balance sheet reflect the effects of the transactions contemplated by the Plans and executed by the Company on the Fresh Start Reporting Date (reflected in the column “Reorganization Adjustments”), and fair value and other required accounting adjustments resulting from the adoption of Fresh Start Accounting (reflected in the column “Fresh Start Accounting Adjustments”). The explanatory notes provide additional information and significant assumptions with regard to the adjustments recorded and the methods used to determine the fair values.
| Predecessor |  | Reorganization Adjustments | (1) |  | Fresh Start Accounting Adjustments |  |  | Successor
| August 11, 2023 |  |  |  |  |  |  |  | August 12, 2023
ASSETS |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 404.9 |  |  | $ | (13.5) |  | (2) |  | $ | — |  |  |  | $ | 391.4 |
Restricted cash | 60.8 |  |  | — |  |  |  | — |  |  |  | 60.8 |
Short-term investments | 13.9 |  |  | — |  |  |  | — |  |  |  | 13.9 |
Trade receivables, less allowances for doubtful accounts | 623.9 |  |  | — |  |  |  | — |  |  |  | 623.9 |
Inventories | 712.8 |  |  | — |  |  |  | 32.8 |  | (17) |  | 745.6 |
Prepaid expenses | 49.1 |  |  | (3.5) |  | (3) |  | — |  |  |  | 45.6 |
Current assets held for sale | 9.9 |  |  | — |  |  |  | — |  |  |  | 9.9 |
Other current assets | 247.8 |  |  | — |  |  |  | — |  |  |  | 247.8 |
Total current assets | 2,123.1 |  |  | (17.0) |  |  |  | 32.8 |  |  |  | 2,138.9 |
Securities and other investments | 7.0 |  |  | — |  |  |  | — |  |  |  | 7.0 |
Property, plant, and equipment, net of accumulated depreciation and amortization | 120.3 |  |  | — |  |  |  | 46.2 |  | (18) |  | 166.5 |
Deferred income taxes | — |  |  | 70.3 |  | (4) |  | (10.8) |  | (19) |  | 59.5 |
Goodwill | 714.3 |  |  | — |  |  |  | (93.3) |  | (20) |  | 621.0 |
Customer relationships, net | 176.1 |  |  | — |  |  |  | 378.2 |  | (21) |  | 554.3 |
Other intangible assets, net | 45.1 |  |  | — |  |  |  | 320.0 |  | (22) |  | 365.1 |
Other assets | 256.8 |  |  | — |  |  |  | 9.5 |  | (23) |  | 266.3 |
Total assets | $ | 3,442.7 |  |  | $ | 53.3 |  |  |  | $ | 682.6 |  |  |  | $ | 4,178.6 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |
Notes payable | $ | 1,254.9 |  |  | $ | (1,250.0) |  | (5) |  | $ | — |  |  |  | $ | 4.9 |
Accounts payable | 461.0 |  |  | — |  |  |  | — |  |  |  | 461.0 |
Deferred revenue | 421.0 |  |  | — |  |  |  | — |  |  |  | 421.0 |
Payroll and other benefits liabilities | 159.2 |  |  | (0.1) |  | (6) |  | — |  |  |  | 159.1 |
Current liabilities held for sale | 10.2 |  |  | — |  |  |  | 0.7 |  | (24) |  | 10.9 |
DIP facility premium | 384.4 |  |  | (384.4) |  | (7) |  | — |  |  |  | — |
Other current liabilities | 343.3 |  |  | 5.5 |  | (8) |  | 1.5 |  | (25) |  | 350.3 |
Total current liabilities | 3,034.0 |  |  | (1,629.0) |  |  |  | 2.2 |  |  |  | 1,407.2 |
Long-term debt | 4.2 |  |  | 1,248.7 |  | (9) |  | 0.8 |  | (26) |  | 1,253.7 |
Pensions, post-retirement and other benefits | 102.3 |  |  | — |  |  |  | (0.3) |  | (27) |  | 102.0 |
Deferred income taxes | 85.8 |  |  | (26.4) |  | (4) |  | 179.1 |  | (19) |  | 238.5 |
Other liabilities | 120.3 |  |  | — |  |  |  | 4.0 |  | (28) |  | 124.3 |
Liabilities subject to compromise | 2,232.4 |  |  | (2,232.4) |  | (10) |  | — |  |  |  | — |
Total liabilities | $ | 5,579.0 |  |  | (2,639.1) |  |  |  | 185.8 |  |  |  | 3,125.7 |
Equity |  |  |  |  |  |  |  |  |
Diebold Nixdorf, Incorporated shareholders' equity |  |  |  |  |  |  |  |  |
Predecessor common shares | 121.2 |  |  | (121.2) |  | (11) |  | — |  |  |  | — |
Successor common stock | — |  |  | 0.4 |  | (12) |  | — |  |  |  | 0.4 |
Paid-in capital; predecessor | 832.3 |  |  | (442.3) |  | (13) |  | (390.0) |  | (29) |  | — |
Paid-in capital; successor | — |  |  | 1,038.6 |  | (14) |  | — |  |  |  | 1,038.6 |
Retained earnings (accumulated deficit) | (2,204.8) |  |  | 1,659.4 |  | (15) |  | 545.4 |  | (29) |  | — |
Treasury shares, at cost | (586.4) |  |  | 586.4 |  | (13) |  | — |  |  |  | — |
Accumulated other comprehensive income (loss) | (320.0) |  |  | (8.8) |  | (16) |  | 328.8 |  | (29) |  | — |
Equity warrants | 20.1 |  |  | (20.1) |  | (13) |  | — |  |  |  | — |
Total Diebold Nixdorf, Incorporated shareholders' equity (deficit) | (2,137.6) |  |  | 2,692.4 |  |  |  | 484.2 |  |  |  | 1,039.0 |
Noncontrolling interests | 1.3 |  |  | — |  |  |  | 12.6 |  | (30) |  | 13.9 |
Total equity (deficit) | (2,136.3) |  |  | 2,692.4 |  |  |  | 496.8 |  |  |  | 1,052.9 |
Total liabilities and equity (deficit) | $ | 3,442.7 |  |  | $ | 53.3 |  |  |  | $ | 682.6 |  |  |  | $ | 4,178.6 |
Reorganization Adjustments (1) Represent amounts recorded as of the Fresh Start Reporting Date for the implementation of the Plans, including, among other items, settlement of the Predecessor's liabilities subject to compromise, distributions of cash, conversion of the DIP Facility to the Exit Facility, and the issuance of the Successor common stock. (2) Changes in cash and cash equivalents include the following:
Payment of interest on the DIP Facility | $ | (1.8) |
Payment to holders of the 2024 Stub Unsecured Notes Claims | (3.5) |
Payment of lease rejection damages | (3.8) |
Payment of professional fees | (4.4) |
Net change in cash and cash equivalents | $ | (13.5) |
(3) Reflects the elimination of prepaid directors and officers insurance policies related to the Predecessor. (4) Change in deferred tax assets and liabilities as a result of release of valuation allowance, partially offset by reduction of estimated tax attributes due to cancellation of debt. (5) Represents the conversion of the DIP Facility to the Exit Facility and the reclassification of debt from current liabilities to non-current liabilities, based on the maturity of the debt. (6) Reflects the acceleration and cancellation of unvested Predecessor stock compensation awards. (7) Represents the issuance of Successor common stock to the settle the DIP Facility premiums. (8) Changes in other current liabilities includes the following:
Accrual of professional fees | $ | 6.3
Accrual of German transfer tax | 5.0
Accrual of deferred financing fees | 1.3
Cancellation of unvested Predecessor stock compensation awards | (0.9)
Payment of interest on the DIP Facility | (1.8)
Payment of professional fees | (4.4)
Net change in other current liabilities | $ | 5.5
(9) Represents the conversion of the DIP Facility to the Exit Facility and the reclassification of debt from current liabilities to non-current liabilities ($1,250.0) and recording of deferred financing fees ($1.3), based on the maturity of the debt. (10) Liabilities Subject to Compromise were settled in accordance with the Plans and the resulting gain was determined as follows:
Debt subject to compromise | $ | 2,160.5 |
Accrued interest on debt subject to compromise | 68.1 |
Lease liability | 3.8 |
Total liabilities subject to compromise | $ | 2,232.4 |
Less: Distribution of common stock to holders of First Lien Claims and Second Lien Notes Claims | (654.6) |
Less: Payment to holders of the 2024 Stub Unsecured Notes Claims | (3.5) |
Less: Payment of lease rejection damages | (3.8) |
Gain on Settlement of Liabilities Subject to Compromise | $ | 1,570.5 |
(11) Represents the cancellation of Predecessor common shares at par value. (12) Reflects the par value of Successor common stock issued to holders of the First Lien Claims and Second Lien Notes Claims ($0.3) and the DIP Facility premiums ($0.1), pursuant to the Plans. (13) Change in Predecessor paid-in-capital reflect the following:
Cancellation of Predecessor common shares at par value | $ | 121.2 |
Cancellation of Predecessor equity warrants | 20.1 |
Acceleration of the vesting of Predecessor equity awards upon the Effective Date | 2.8 |
Cancellation of Predecessor treasury stock, at cost | (586.4) |
Change in Predecessor paid-in-capital | $ | (442.3) |
(14) Represents paid in capital associated with the issuance of Successor common stock to holders of First Lien Claims and Second Lien Notes Claims ($654.3) and the DIP Facility premiums ($384.3), pursuant to the Plans. (15) Net change in accumulated deficit includes the following:
Gain on Settlement of Liabilities Subject to Compromise | $ | 1,570.5 |
Net deferred tax impacts on the effectiveness of the Plans | 96.7 |
Elimination of unvested Predecessor stock compensation awards (liability classified) | 0.8 |
Accrual of professional fees | (6.3) |
Elimination of prepaid directors and officers insurance policies related to the Predecessor | (3.5) |
Acceleration of the vesting of Predecessor equity awards upon the Effective Date | (2.6) |
Elimination of accumulated other comprehensive income related to interest rate swaps | 8.8 |
Accrual of German transfer tax | (5.0) |
Net change in accumulated deficit | $ | 1,659.4 |
(16) Represents the elimination of accumulated other comprehensive income related to interest rate swaps. Fresh Start Accounting Adjustments Amounts presented for "Predecessor Historical Value" represents the carrying value of the asset/liability prior to the implementation of the Plans. (17) Reflects adjustments to inventory at its estimated fair value due to the adoptions of Fresh Start Accounting.
| Successor Fair Value |  | Predecessor Historical Value
Raw materials and work in process, net | $ | 226.4 |  |  | $ | 232.7 |
Finished goods, net | 347.3 |  |  | 308.2 |
Total product inventories | 573.7 |  |  | 540.9 |
Service parts | 171.9 |  |  | 171.9 |
Total inventories | $ | 745.6 |  |  | $ | 712.8 |
(18) Changes in property, plant and equipment reflects the fair value adjustment due to the adoption of Fresh Start Accounting. The following table summarizes the components of property, plant, and equipment:
| Successor Fair Value |  | Predecessor Historical Value
Land and land improvements | $ | 21.5 |  |  | $ | 10.4 |
Buildings and building improvements | 42.3 |  |  | 70.5 |
Leasehold improvements | 6.1 |  |  | 17.4 |
Computer equipment | 16.1 |  |  | 105.1 |
Computer software | 5.9 |  |  | 128.7 |
Furniture and fixtures | 17.3 |  |  | 55.9 |
Tooling | 11.1 |  |  | 137.5 |
Machinery, tools and equipment | 32.4 |  |  | 83.4 |
Construction in progress | 13.8 |  |  | 12.2 |
Total property, plant and equipment, at cost | 166.5 |  |  | 621.1 |
Less accumulated depreciation and amortization | — |  |  | (500.8) |
Total property, plant, and equipment, net | $ | 166.5 |  |  | $ | 120.3 |
(19) Adjustments to deferred income taxes for changes in financial reporting basis of assets and liabilities as a result of the adoption of fresh start accounting. (20) Reflects adjustment to goodwill for the excess of the reorganization value of assets over the fair value of identifiable tangible and intangible assets. (21) Changes in customer relationships reflects the fair value adjustment due to the adoption of Fresh Start Accounting. (22) Changes in other intangible assets reflects the fair value adjustment due to the adoption of Fresh Start Accounting. The following table summarizes the components of other intangible assets:
| Successor Fair Value |  | Predecessor Historical Value
Capitalized software development | 13.8 |  |  | 260.4 |
Development costs non-software | 32.2 |  |  | 50.4 |
Tradenames and trademarks | 118.6 |  |  | — |
Technology know-how | 160.8 |  |  | — |
Other intangibles | 39.7 |  |  | 51.8 |
Other intangible assets, at cost | 365.1 |  |  | 362.6 |
Less accumulated amortization | — |  |  | (317.5) |
Total intangibles, net | $ | 365.1 |  |  | $ | 45.1 |
(23) Changes in other assets reflects fair value adjustments from implementation of Fresh Start Accounting. The following table summarizes the components of other assets:
| Successor Fair Value |  | Predecessor Historical Value
Cloud projects, at cost | 19.9 |  |  | 25.6 |
Less accumulated depreciation and amortization | — |  |  | (5.3) |
Cloud projects, net | 19.9 |  |  | 20.3 |
Right-of-use operating lease assets | 102.2 |  |  | 89.6 |
Right-of-use finance lease assets | 8.7 |  |  | 7.9 |
Joint ventures | 30.3 |  |  | 33.7 |
Pensions, post-retirement and other benefits | 71.3 |  |  | 71.4 |
Other assets | 33.9 |  |  | 33.9 |
Total other assets | $ | 266.3 |  |  | $ | 256.8 |
(24) Reflects changes in the fair value of current liabilities held for sale due to the adoption of Fresh Start Accounting. (25) Reflects changes in the fair value of operating lease liabilities ($0.8 increase) and finance lease liability ($0.7 increase) due to the adoption of Fresh Start Accounting. (26) Reflects changes in the finance lease liabilities ($0.8 increase) due to the adoption of Fresh Start Accounting. (27) Reflects the remeasurement adjustment to pensions, post-retirement benefits, and other benefits driven by changes in actuarial assumptions. (28) Reflects changes in the fair value of operating lease liabilities ($6.2 increase) and other liabilities ($2.2 decrease) due to the adoption of Fresh Start Accounting. (29) Reflects the cumulative impact of Fresh Start Accounting adjustments discussed above and below and the elimination of Predecessor capital in excess of par value and Predecessor accumulated deficit.
Customer relationships, net | 378.2
Other intangible assets | 320.0 |
Other assets fair value adjustments | 9.5 |
Property, plant and equipment | 46.2 |
Inventories | 32.8 |
Current Liabilities | (2.2) |
Long-term debt | (0.8) |
Pensions, post-retirement and other benefits | 0.3 |
Other long-term liabilities | (4.0) |
Goodwill | (93.3) |
Fresh start valuation gain | $ | 686.7 |
Deferred income taxes | (189.9) |
Fresh start valuation adjustment for noncontrolling interest | (12.6) |
Elimination of Predecessor paid-in-capital | 390.0 |
Elimination of Predecessor other comprehensive loss | (328.8) |
Net Change in Accumulated Deficit | $ | 545.4 |
(30) Reflects the fair value adjustment to noncontrolling interests in certain consolidated subsidiaries.

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