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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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31-0387920
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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PART I. Financial Information
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Description
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II. Other Information
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Description
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Page
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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Item 1.
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FINANCIAL STATEMENTS
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In millions, except per share amounts
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Three months ended June 30
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Six months ended June 30
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||||||||||||
2015
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2014
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2015
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2014
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|||||||||
Product revenue
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$
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703
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|
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$
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722
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|
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$
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1,307
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|
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$
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1,356
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Service revenue
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901
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936
|
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1,773
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1,820
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||||
Total revenue
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1,604
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1,658
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3,080
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3,176
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||||
Cost of products
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544
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531
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1,027
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1,007
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||||
Cost of services
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914
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647
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1,517
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1,273
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|
||||
Selling, general and administrative expenses
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339
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|
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247
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|
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564
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|
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492
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||||
Research and development expenses
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67
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|
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64
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|
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122
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|
|
127
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||||
Restructuring-related charges
|
6
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—
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21
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—
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||||
Total operating expenses
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1,870
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1,489
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3,251
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2,899
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||||
(Loss) income from operations
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(266
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)
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169
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|
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(171
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)
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277
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||||
Interest expense
|
(45
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)
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(46
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)
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(89
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)
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(89
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)
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||||
Other (expense), net
|
—
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(3
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)
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(7
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)
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(10
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)
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||||
(Loss) income from continuing operations before income taxes
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(311
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)
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120
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|
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(267
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)
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|
178
|
|
||||
Income tax expense
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32
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|
|
29
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|
|
34
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|
|
33
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|
||||
(Loss) income from continuing operations
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(343
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)
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91
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|
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(301
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)
|
|
145
|
|
||||
Income from discontinued operations, net of tax
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—
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—
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—
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—
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||||
Net (loss) income
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(343
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)
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91
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|
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(301
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)
|
|
145
|
|
||||
Net income attributable to noncontrolling interests
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1
|
|
|
1
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|
|
3
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|
|
2
|
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||||
Net (loss) income attributable to NCR
|
$
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(344
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)
|
|
$
|
90
|
|
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$
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(304
|
)
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$
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143
|
|
Amounts attributable to NCR common stockholders:
|
|
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||||||||
(Loss) income from continuing operations
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$
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(344
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)
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$
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90
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$
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(304
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)
|
|
$
|
143
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Income from discontinued operations, net of tax
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—
|
|
|
—
|
|
|
—
|
|
|
—
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|
||||
Net (loss) income
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$
|
(344
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)
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$
|
90
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|
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$
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(304
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)
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$
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143
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(Loss) income per share attributable to NCR common stockholders:
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||||||||
(Loss) income per common share from continuing operations
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Basic
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$
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(2.03
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)
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$
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0.54
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$
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(1.80
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)
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$
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0.85
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Diluted
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$
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(2.03
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)
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$
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0.53
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$
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(1.80
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)
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$
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0.84
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Net (loss) income per common share
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Basic
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$
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(2.03
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)
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$
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0.54
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$
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(1.80
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)
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$
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0.85
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Diluted
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$
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(2.03
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)
|
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$
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0.53
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$
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(1.80
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)
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$
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0.84
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Weighted average common shares outstanding
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||||||||
Basic
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169.6
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167.9
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169.3
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167.5
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Diluted
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169.6
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170.9
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169.3
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171.0
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In millions
|
Three months ended June 30
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Six months ended June 30
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||||||||||||
2015
|
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2014
|
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2015
|
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2014
|
|||||||||
Net (loss) income
|
$
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(343
|
)
|
|
$
|
91
|
|
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$
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(301
|
)
|
|
$
|
145
|
|
Other comprehensive income (loss):
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||||||||
Currency translation adjustments
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Currency translation adjustments
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26
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|
|
23
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(2
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)
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|
30
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|
||||
Derivatives
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||||||||
Unrealized gain (loss) on derivatives
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(2
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)
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(1
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)
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7
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(2
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)
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(Gains) losses on derivatives arising during the period
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(1
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)
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2
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(2
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)
|
|
3
|
|
||||
Less income tax benefit (expense)
|
1
|
|
|
(1
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)
|
|
(1
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)
|
|
(1
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)
|
||||
Employee benefit plans
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service benefit
|
(5
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)
|
|
(5
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)
|
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(11
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)
|
|
(11
|
)
|
||||
Amortization of actuarial loss
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Less income tax benefit
|
2
|
|
|
2
|
|
|
4
|
|
|
4
|
|
||||
Other comprehensive (loss) income
|
21
|
|
|
20
|
|
|
(4
|
)
|
|
24
|
|
||||
Total comprehensive (loss) income
|
(322
|
)
|
|
111
|
|
|
(305
|
)
|
|
169
|
|
||||
Less comprehensive income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
||||||||
Net income
|
1
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Currency translation adjustments
|
—
|
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
||||
Amounts attributable to noncontrolling interests
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Comprehensive (loss) income attributable to NCR common stockholders
|
$
|
(323
|
)
|
|
$
|
109
|
|
|
$
|
(305
|
)
|
|
$
|
167
|
|
In millions, except per share amounts
|
June 30, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
425
|
|
|
$
|
511
|
|
Accounts receivable, net
|
1,425
|
|
|
1,404
|
|
||
Inventories
|
709
|
|
|
669
|
|
||
Other current assets
|
481
|
|
|
504
|
|
||
Total current assets
|
3,040
|
|
|
3,088
|
|
||
Property, plant and equipment, net
|
348
|
|
|
396
|
|
||
Goodwill
|
2,758
|
|
|
2,760
|
|
||
Intangibles, net
|
863
|
|
|
926
|
|
||
Prepaid pension cost
|
137
|
|
|
551
|
|
||
Deferred income taxes
|
375
|
|
|
349
|
|
||
Other assets
|
545
|
|
|
537
|
|
||
Total assets
|
$
|
8,066
|
|
|
$
|
8,607
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
59
|
|
|
$
|
187
|
|
Accounts payable
|
695
|
|
|
712
|
|
||
Payroll and benefits liabilities
|
178
|
|
|
196
|
|
||
Deferred service revenue and customer deposits
|
567
|
|
|
494
|
|
||
Other current liabilities
|
411
|
|
|
481
|
|
||
Total current liabilities
|
1,910
|
|
|
2,070
|
|
||
Long-term debt
|
3,415
|
|
|
3,472
|
|
||
Pension and indemnity plan liabilities
|
686
|
|
|
705
|
|
||
Postretirement and postemployment benefits liabilities
|
177
|
|
|
170
|
|
||
Income tax accruals
|
181
|
|
|
181
|
|
||
Other liabilities
|
83
|
|
|
111
|
|
||
Total liabilities
|
6,452
|
|
|
6,709
|
|
||
Commitments and Contingencies (Note 9)
|
|
|
|
||||
Redeemable noncontrolling interest
|
16
|
|
|
15
|
|
||
Stockholders’ equity
|
|
|
|
||||
NCR stockholders’ equity
|
|
|
|
||||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of June 30, 2015 and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 169.7 and 168.6 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively
|
2
|
|
|
2
|
|
||
Paid-in capital
|
470
|
|
|
442
|
|
||
Retained earnings
|
1,259
|
|
|
1,563
|
|
||
Accumulated other comprehensive loss
|
(137)
|
|
|
(136)
|
|
||
Total NCR stockholders’ equity
|
1,594
|
|
|
1,871
|
|
||
Noncontrolling interests in subsidiaries
|
4
|
|
|
12
|
|
||
Total stockholders’ equity
|
1,598
|
|
|
1,883
|
|
||
Total liabilities and stockholders’ equity
|
$
|
8,066
|
|
|
$
|
8,607
|
|
In millions
|
Six months ended June 30
|
||||||
2015
|
|
2014
|
|||||
Operating activities
|
|
|
|
||||
Net (loss) income
|
$
|
(301
|
)
|
|
$
|
145
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
||
Depreciation and amortization
|
152
|
|
|
142
|
|
||
Stock-based compensation expense
|
20
|
|
|
19
|
|
||
Deferred income taxes
|
15
|
|
|
10
|
|
||
Gain on sale of property, plant and equipment and other assets
|
(1
|
)
|
|
(2
|
)
|
||
Impairment of long-lived and other assets
|
16
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
(51
|
)
|
|
(88
|
)
|
||
Inventories
|
(54
|
)
|
|
(27
|
)
|
||
Current payables and accrued expenses
|
(25
|
)
|
|
2
|
|
||
Deferred service revenue and customer deposits
|
89
|
|
|
35
|
|
||
Employee benefit plans
|
386
|
|
|
(59
|
)
|
||
Other assets and liabilities
|
—
|
|
|
(66
|
)
|
||
Net cash provided by operating activities
|
246
|
|
|
111
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(31
|
)
|
|
(66
|
)
|
||
Additions to capitalized software
|
(79
|
)
|
|
(73
|
)
|
||
Business acquisitions, net
|
—
|
|
|
(1,642
|
)
|
||
Changes in restricted cash
|
—
|
|
|
1,114
|
|
||
Other investing activities, net
|
(3
|
)
|
|
4
|
|
||
Net cash used in investing activities
|
(113
|
)
|
|
(663
|
)
|
||
Financing activities
|
|
|
|
||||
Tax withholding payments on behalf of employees
|
(10
|
)
|
|
(24
|
)
|
||
Short term borrowings, net
|
28
|
|
|
9
|
|
||
Payments on term credit facilities
|
(116
|
)
|
|
(3
|
)
|
||
Borrowings on term credit facility
|
—
|
|
|
250
|
|
||
Payments on revolving credit facilities
|
(608
|
)
|
|
(255
|
)
|
||
Borrowings on revolving credit facilities
|
512
|
|
|
570
|
|
||
Debt issuance costs
|
—
|
|
|
(3
|
)
|
||
Proceeds from employee stock plans
|
11
|
|
|
7
|
|
||
Other financing activities
|
—
|
|
|
(3
|
)
|
||
Net cash (used in) provided by financing activities
|
(183
|
)
|
|
548
|
|
||
Cash flows from discontinued operations
|
|
|
|
||||
Net cash used in operating activities
|
(17
|
)
|
|
(38
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(19
|
)
|
|
(3
|
)
|
||
Decrease in cash and cash equivalents
|
(86
|
)
|
|
(45
|
)
|
||
Cash and cash equivalents at beginning of period
|
511
|
|
|
528
|
|
||
Cash and cash equivalents at end of period
|
$
|
425
|
|
|
$
|
483
|
|
In millions
|
June 30, 2015
|
|
December 31, 2014
|
Accounts receivable
|
|
|
|
Trade
|
$1,412
|
|
$1,382
|
Other
|
34
|
|
41
|
Accounts receivable, gross
|
1,446
|
|
1,423
|
Less: allowance for doubtful accounts
|
(21)
|
|
(19)
|
Total accounts receivable, net
|
$1,425
|
|
$1,404
|
In millions
|
June 30, 2015
|
|
December 31, 2014
|
Inventories
|
|
|
|
Work in process and raw materials
|
$147
|
|
$132
|
Finished goods
|
184
|
|
148
|
Service parts
|
378
|
|
389
|
Total inventories
|
$709
|
|
$669
|
In millions
|
June 30, 2015
|
|
December 31, 2014
|
Other current assets
|
|
|
|
Current deferred tax assets
|
$215
|
|
$264
|
Other
|
266
|
|
240
|
Total other current assets
|
$481
|
|
$504
|
|
December 31, 2014
|
|
|
|
|
|
|
|
June 30, 2015
|
||||||||||||||||||||||||||
In millions
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
|
Additions
|
|
Impairment
|
|
Other
|
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
||||||||||||||||||
Financial Services
|
$
|
1,493
|
|
|
$
|
—
|
|
|
$
|
1,493
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1,494
|
|
|
$
|
—
|
|
|
$
|
1,494
|
|
Retail Solutions
|
581
|
|
|
(7
|
)
|
|
574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|
(7
|
)
|
|
574
|
|
|||||||||
Hospitality
|
669
|
|
|
—
|
|
|
669
|
|
|
2
|
|
|
—
|
|
|
(5
|
)
|
|
666
|
|
|
—
|
|
|
666
|
|
|||||||||
Emerging Industries
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||||||
Total goodwill
|
$
|
2,767
|
|
|
$
|
(7
|
)
|
|
$
|
2,760
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
2,765
|
|
|
$
|
(7
|
)
|
|
$
|
2,758
|
|
|
Amortization
Period
(in Years)
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
In millions
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|||||||||
Identifiable intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||
Reseller & customer relationships
|
1 - 20
|
|
$
|
660
|
|
|
$
|
(77
|
)
|
|
$
|
660
|
|
|
$
|
(63
|
)
|
Intellectual property
|
2 - 8
|
|
393
|
|
|
(213
|
)
|
|
393
|
|
|
(181
|
)
|
||||
Customer contracts
|
8
|
|
89
|
|
|
(34
|
)
|
|
89
|
|
|
(22
|
)
|
||||
Tradenames
|
2 - 10
|
|
74
|
|
|
(29
|
)
|
|
74
|
|
|
(24
|
)
|
||||
Non-compete arrangements
|
2 - 5
|
|
8
|
|
|
(8
|
)
|
|
8
|
|
|
(8
|
)
|
||||
Total identifiable intangible assets
|
|
|
$
|
1,224
|
|
|
$
|
(361
|
)
|
|
$
|
1,224
|
|
|
$
|
(298
|
)
|
In millions
|
Three months ended June 30, 2015
|
|
Six months ended June 30, 2015
|
|
Remainder of 2015 (estimated)
|
||||||
Amortization expense
|
$
|
31
|
|
|
$
|
63
|
|
|
$
|
64
|
|
|
|
For the years ended December 31 (estimated)
|
||||||||||||||||||
In millions
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
||||||||||
Amortization expense
|
|
$
|
125
|
|
|
$
|
116
|
|
|
$
|
85
|
|
|
$
|
75
|
|
|
$
|
57
|
|
|
June 30, 2015
|
|
December 31, 2014
|
|||||||||
In millions, except percentages
|
Amount
|
|
Weighted-Average Interest Rate
|
|
Amount
|
|
Weighted-Average Interest Rate
|
|||||
Short-Term Borrowings
|
|
|
|
|
|
|
|
|||||
Current portion of Senior Secured Credit Facility
(1)
|
$
|
26
|
|
|
2.95%
|
|
$
|
85
|
|
|
2.91%
|
|
Trade Receivables Securitization Facility
|
—
|
|
|
|
|
96
|
|
|
0.83%
|
|||
Other
(2)
|
33
|
|
|
7.00%
|
|
6
|
|
|
7.31%
|
|||
|
Total short-term borrowings
|
$
|
59
|
|
|
|
|
$
|
187
|
|
|
|
Long-Term Debt
|
|
|
|
|
|
|
|
|||||
Senior Secured Credit Facility:
|
|
|
|
|
|
|
|
|||||
|
Term loan facility due 2018
(1)
|
$
|
1,194
|
|
|
2.95%
|
|
$
|
1,246
|
|
|
2.91%
|
|
Revolving credit facility due 2018
(1)
|
—
|
|
|
|
|
—
|
|
|
|
||
Senior notes:
|
|
|
|
|
|
|
|
|
||||
|
5.00% Senior Notes due 2022
|
600
|
|
|
|
|
600
|
|
|
|
||
|
4.625% Senior Notes due 2021
|
500
|
|
|
|
|
500
|
|
|
|
||
|
5.875% Senior Notes due 2021
|
400
|
|
|
|
|
400
|
|
|
|
||
|
6.375% Senior Notes due 2023
|
700
|
|
|
|
|
700
|
|
|
|
||
Other
(2)
|
21
|
|
|
7.20%
|
|
26
|
|
|
7.23%
|
|||
|
Total long-term debt
|
$
|
3,415
|
|
|
|
|
$
|
3,472
|
|
|
|
(1)
|
Interest rates are weighted average interest rates as of
June 30, 2015
and
December 31, 2014
related to the Senior Secured Credit Facility, which incorporate the impact of the interest rate swap agreement described in
Note 11, "Derivatives and Hedging Instruments."
|
(2)
|
Interest rates are weighted average interest rates as of
June 30, 2015
and
December 31, 2014
and are primarily related to various international credit facilities and a note payable in the U.S.
|
•
|
a consolidated leverage ratio on the last day of any fiscal quarter, not to exceed (i) in the case of any fiscal quarter ending after December 31, 2014 and on or prior to December 31, 2016, (a) the sum of (x)
4.25
and (y) an amount (not to exceed
0.50
) to reflect new debt used to reduce NCR's underfunded pension liabilities, to (b)
1.00
, (ii) in the case of any fiscal quarter ending after December 31, 2016 and on or prior to December 31, 2017,
4.00
to
1.00
, and (iii) in the case of any fiscal quarter ending after December 31, 2017,
3.75
to
1.00
; and
|
•
|
an interest coverage ratio on the last day of any fiscal quarter greater than or equal to
3.50
to
1.00
.
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Restricted stock expense
|
$11
|
|
$9
|
|
$20
|
|
$19
|
Tax benefit
|
(3)
|
|
(2)
|
|
(6)
|
|
(6)
|
Total stock-based compensation (net of tax)
|
$8
|
|
$7
|
|
$14
|
|
$13
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net service cost
|
$—
|
|
$—
|
|
$3
|
|
$3
|
|
$3
|
|
$3
|
Interest cost
|
22
|
|
34
|
|
12
|
|
20
|
|
34
|
|
54
|
Expected return on plan assets
|
(18)
|
|
(29)
|
|
(17)
|
|
(26)
|
|
(35)
|
|
(55)
|
Curtailment
|
—
|
|
—
|
|
(3)
|
|
—
|
|
(3)
|
|
—
|
Settlement
|
—
|
|
—
|
|
427
|
|
—
|
|
427
|
|
—
|
Net periodic benefit cost (income)
|
$4
|
|
$5
|
|
$422
|
|
$(3)
|
|
$426
|
|
$2
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net service cost
|
$—
|
|
$—
|
|
$6
|
|
$6
|
|
$6
|
|
$6
|
Interest cost
|
44
|
|
66
|
|
27
|
|
41
|
|
71
|
|
107
|
Expected return on plan assets
|
(36)
|
|
(59)
|
|
(39)
|
|
(52)
|
|
(75)
|
|
(111)
|
Amortization of prior service cost
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
Curtailment
|
—
|
|
—
|
|
(3)
|
|
—
|
|
(3)
|
|
—
|
Settlement
|
—
|
|
—
|
|
427
|
|
(2)
|
|
427
|
|
(2)
|
Net periodic benefit cost (income)
|
$8
|
|
$7
|
|
$418
|
|
$(6)
|
|
$426
|
|
$1
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Amortization of:
|
|
|
|
|
|
|
|
Prior service benefit
|
(4)
|
|
(4)
|
|
(9)
|
|
(9)
|
Actuarial loss
|
—
|
|
—
|
|
1
|
|
1
|
Net postretirement benefit
|
$(4)
|
|
$(4)
|
|
$(8)
|
|
$(8)
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net service cost
|
$4
|
|
$3
|
|
$8
|
|
$7
|
Interest cost
|
1
|
|
2
|
|
2
|
|
4
|
Amortization of prior service benefit
|
(1)
|
|
(1)
|
|
(2)
|
|
(2)
|
Net benefit cost
|
$4
|
|
$4
|
|
$8
|
|
$9
|
Restructuring severance cost
|
(3)
|
|
—
|
|
(5)
|
|
—
|
Total postemployment cost
|
$1
|
|
$4
|
|
$3
|
|
$9
|
In millions
|
2015
|
|
2014
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance as of January 1
|
$
|
22
|
|
|
$
|
22
|
|
Accruals for warranties issued
|
19
|
|
|
18
|
|
||
Settlements (in cash or in kind)
|
(18)
|
|
|
(19)
|
|
||
Ending balance as of June 30
|
$
|
23
|
|
|
$
|
21
|
|
In millions, except per share amounts
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Amounts attributable to NCR common stockholders:
|
|
|
|
|
|
|
|
||||||||
(Loss) income from continuing operations
|
$
|
(344
|
)
|
|
$
|
90
|
|
|
$
|
(304
|
)
|
|
$
|
143
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (loss) income applicable to common shares
|
$
|
(344
|
)
|
|
$
|
90
|
|
|
$
|
(304
|
)
|
|
$
|
143
|
|
Weighted average outstanding shares of common stock
|
169.6
|
|
|
167.9
|
|
|
169.3
|
|
|
167.5
|
|
||||
Dilutive effect of restricted stock and employee stock options
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.5
|
|
||||
Weighted average outstanding shares of common stock - diluted
|
169.6
|
|
|
170.9
|
|
|
169.3
|
|
171.0
|
||||||
Earnings per share attributable to NCR common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
$
|
(2.03
|
)
|
|
$
|
0.54
|
|
|
$
|
(1.80
|
)
|
|
$
|
0.85
|
|
From discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings per share (Basic)
|
$
|
(2.03
|
)
|
|
$
|
0.54
|
|
|
$
|
(1.80
|
)
|
|
$
|
0.85
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
$
|
(2.03
|
)
|
|
$
|
0.53
|
|
|
(1.80
|
)
|
|
$
|
0.84
|
|
|
From discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings per share (Diluted)
|
$
|
(2.03
|
)
|
|
$
|
0.53
|
|
|
$
|
(1.80
|
)
|
|
$
|
0.84
|
|
|
Fair Values of Derivative Instruments
|
||||||||||
|
June 30, 2015
|
||||||||||
In millions
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
Other current assets
|
|
$—
|
|
$—
|
|
Other current liabilities and other liabilities
(1)
|
|
$434
|
|
$5
|
Foreign exchange contracts
|
Other current assets
|
|
119
|
|
5
|
|
Other current liabilities
|
|
34
|
|
1
|
Total derivatives designated as hedging instruments
|
|
|
|
|
$5
|
|
|
|
|
|
$6
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
Other current assets
|
|
$105
|
|
$—
|
|
Other current liabilities
|
|
$217
|
|
$—
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
—
|
|
|
|
|
|
—
|
Total derivatives
|
|
|
|
|
$5
|
|
|
|
|
|
$6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Instruments
|
||||||||||
|
December 31, 2014
|
||||||||||
In millions
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap
|
Other current assets
|
|
$—
|
|
$—
|
|
Other current liabilities and other liabilities
(1)
|
|
$462
|
|
$6
|
Total derivatives designated as hedging instruments
|
|
|
|
|
$—
|
|
|
|
|
|
$6
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
Other current assets
|
|
$186
|
|
$1
|
|
Other current liabilities
|
|
$330
|
|
$5
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
1
|
|
|
|
|
|
5
|
Total derivatives
|
|
|
|
|
$1
|
|
|
|
|
|
$11
|
In millions
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income (OCI) on Derivative
(Effective Portion) |
|
|
|
Amount of Gain (Loss) Reclassified from AOCI into the Condensed Consolidated Statement of Operations
(Effective Portion) |
|
|
|
Amount of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
For the three months ended June 30, 2015
|
|
For the three months ended June 30, 2014
|
|
Location of Gain (Loss) Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the three months ended June 30, 2015
|
|
For the three months ended June 30, 2014
|
|
Location of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
|
For the three months ended June 30, 2015
|
|
For the three months ended June 30, 2014
|
Interest rate swap
|
$—
|
|
$(1)
|
|
Interest expense
|
|
$(1)
|
|
$(2)
|
|
Interest expense
|
|
$—
|
|
$—
|
Foreign exchange contracts
|
$(2)
|
|
$—
|
|
Cost of products
|
|
$2
|
|
$—
|
|
Other (expense) income, net
|
|
$—
|
|
$—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income (OCI) on Derivative
(Effective Portion) |
|
|
|
Amount of Gain (Loss) Reclassified from AOCI into the Condensed Consolidated Statement of Operations
(Effective Portion) |
|
|
|
Amount of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
For the six months ended June 30, 2015
|
|
For the six months ended June 30, 2014
|
|
Location of Gain (Loss) Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the six months ended June 30, 2015
|
|
For the six months ended June 30, 2014
|
|
Location of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
|
For the six months ended June 30, 2015
|
|
For the six months ended June 30, 2014
|
Interest rate swap
|
$(1)
|
|
$(2)
|
|
Interest expense
|
|
$(2)
|
|
$(3)
|
|
Interest expense
|
|
$—
|
|
$—
|
Foreign exchange contracts
|
$8
|
|
$—
|
|
Cost of products
|
|
$4
|
|
$—
|
|
Other (expense), net
|
|
$—
|
|
$—
|
In millions
|
|
|
Amount of Gain (Loss) Recognized in the
Condensed Consolidated Statement of Operations
|
||||||
Derivatives not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations
|
|
For the three months ended June 30, 2015
|
|
For the three months ended June 30, 2014
|
|
For the six months ended June 30, 2015
|
|
For the six months ended June 30, 2014
|
Foreign exchange contracts
|
Other (expense) income, net
|
|
$—
|
|
$(3)
|
|
$(1)
|
|
$(6)
|
|
|
|
Fair Value Measurements at June 30, 2015 Using
|
||||||||||||
In millions
|
June 30, 2015
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deposits held in money market mutual funds
(1)
|
$
|
32
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
(2)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total
|
$
|
37
|
|
|
$
|
32
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
(3)
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Foreign exchange contracts
(3)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at December 31, 2014 Using
|
||||||||||||
In millions
|
December 31, 2014
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deposits held in money market mutual funds
(1)
|
$
|
82
|
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
(2)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
83
|
|
|
$
|
82
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
(3)
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Foreign exchange contracts
(3)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
•
|
Financial Services
- We offer solutions to enable customers in the financial services industry to reduce costs, generate new revenue streams and enhance customer loyalty. These solutions include a comprehensive line of ATM and payment processing hardware and software; cash management and video banking software and customer-facing digital banking services; and related installation, maintenance, and managed and professional services. We also offer a complete line of printer consumables.
|
•
|
Retail Solutions
- We offer solutions to customers in the retail industry designed to improve selling productivity and checkout processes as well as increase service levels. These solutions primarily include retail-oriented technologies, such as point of sale terminals and point of sale software; an omni-channel retail software platform with a comprehensive suite of retail software applications; innovative self-service kiosks, such as self-checkout; as well as bar-code scanners. We also offer installation, maintenance, managed and professional services and a complete line of printer consumables.
|
•
|
Hospitality
- We offer technology solutions to customers in the hospitality industry, serving businesses that range from a single store or restaurant to global chains and sports and entertainment venues. Our solutions include point of sale hardware and software solutions, installation, maintenance, managed and professional services and a complete line of printer consumables.
|
•
|
Emerging Industries -
We offer maintenance as well as managed and professional services for third-party computer hardware provided to select manufacturers, primarily in the telecommunications industry, who value and leverage our global service capability. Also included in our Emerging Industries segment are solutions designed to enhance the customer experience for the travel industry, such as self-service kiosks, and the small business industry, such as an all-in-one point of sale solution. Additionally, we offer installation, maintenance, and managed and professional services.
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Revenue by segment
|
|
|
|
|
|
|
|
||||||||
Financial Services
|
$
|
840
|
|
|
$
|
900
|
|
|
$
|
1,638
|
|
|
$
|
1,694
|
|
Retail Solutions
|
505
|
|
|
503
|
|
|
950
|
|
|
993
|
|
||||
Hospitality
|
172
|
|
|
170
|
|
|
320
|
|
|
319
|
|
||||
Emerging Industries
|
87
|
|
|
85
|
|
|
172
|
|
|
170
|
|
||||
Consolidated revenue
|
1,604
|
|
|
1,658
|
|
|
3,080
|
|
|
3,176
|
|
||||
Operating income by segment
|
|
|
|
|
|
|
|
||||||||
Financial Services
|
123
|
|
|
137
|
|
|
228
|
|
|
240
|
|
||||
Retail Solutions
|
42
|
|
|
48
|
|
|
58
|
|
|
84
|
|
||||
Hospitality
|
27
|
|
|
23
|
|
|
45
|
|
|
35
|
|
||||
Emerging Industries
|
10
|
|
|
2
|
|
|
17
|
|
|
6
|
|
||||
Subtotal - segment operating income
|
202
|
|
|
210
|
|
|
348
|
|
|
365
|
|
||||
Pension expense
|
426
|
|
|
2
|
|
|
426
|
|
|
1
|
|
||||
Other adjustments
(1)
|
42
|
|
|
39
|
|
|
93
|
|
|
87
|
|
||||
Income from operations
|
$
|
(266
|
)
|
|
$
|
169
|
|
|
$
|
(171
|
)
|
|
$
|
277
|
|
(1)
|
The following table presents the other adjustments for NCR:
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Restructuring plan
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
Acquisition-related amortization of intangible assets
|
31
|
|
|
30
|
|
|
63
|
|
|
60
|
|
||||
Acquisition-related costs
|
3
|
|
|
6
|
|
|
5
|
|
|
20
|
|
||||
Acquisition-related purchase price adjustments
|
—
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||
OFAC and FCPA investigations
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total other adjustments
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
93
|
|
|
$
|
87
|
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Product revenue
|
$
|
703
|
|
|
$
|
722
|
|
|
$
|
1,307
|
|
|
$
|
1,356
|
|
Professional services, installation services and cloud revenue
|
421
|
|
|
431
|
|
|
821
|
|
|
814
|
|
||||
Total solution revenue
|
1,124
|
|
|
1,153
|
|
|
2,128
|
|
|
2,170
|
|
||||
Support services revenue
|
480
|
|
|
505
|
|
|
952
|
|
|
1,006
|
|
||||
Total revenue
|
$
|
1,604
|
|
|
$
|
1,658
|
|
|
$
|
3,080
|
|
|
$
|
3,176
|
|
In millions
|
Currency Translation Adjustments
|
Changes in Employee Benefit Plans
|
Changes in Fair Value of Effective Cash Flow Hedges
|
Total
|
||||||||
Balance as of December 31, 2014
|
$
|
(125
|
)
|
$
|
(8
|
)
|
$
|
(3
|
)
|
$
|
(136
|
)
|
Other comprehensive (loss) income before reclassifications
|
1
|
|
—
|
|
6
|
|
7
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
(6
|
)
|
(2
|
)
|
(8
|
)
|
||||
Net current period other comprehensive (loss) income
|
1
|
|
(6
|
)
|
4
|
|
(1
|
)
|
||||
Balance as of June 30, 2015
|
$
|
(124
|
)
|
$
|
(14
|
)
|
$
|
1
|
|
$
|
(137
|
)
|
|
|
For the three months ended June 30, 2015
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Actuarial Losses Recognized
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of products
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
Cost of services
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
||||
|
Selling, general and administrative expenses
|
—
|
|
(3
|
)
|
—
|
|
|
(3
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
1
|
|
|
1
|
|
||||
|
Total before tax
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
Tax expense
|
|
|
|
|
2
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(4
|
)
|
|
|
For the three months ended June 30, 2014
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Actuarial Losses Recognized
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of services
|
$
|
—
|
|
$
|
(3
|
)
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
Selling, general and administrative expenses
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
2
|
|
|
2
|
|
||||
|
Total before tax
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
Tax expense
|
|
|
|
|
1
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(2
|
)
|
|
|
For the six months ended June 30, 2015
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Actuarial Losses Recognized
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of products
|
$
|
—
|
|
$
|
—
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
Cost of services
|
1
|
|
(5
|
)
|
—
|
|
|
(4
|
)
|
||||
|
Selling, general and administrative expenses
|
—
|
|
(5
|
)
|
—
|
|
|
(5
|
)
|
||||
|
Research and development expenses
|
—
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
2
|
|
|
2
|
|
||||
|
Total before tax
|
$
|
1
|
|
$
|
(11
|
)
|
$
|
(2
|
)
|
|
$
|
(12
|
)
|
|
Tax expense
|
|
|
|
|
4
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(8
|
)
|
|
|
For the six months ended June 30, 2014
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Actuarial Losses Recognized
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of services
|
$
|
1
|
|
$
|
(6
|
)
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
Selling, general and administrative expenses
|
—
|
|
(4
|
)
|
—
|
|
|
(4
|
)
|
||||
|
Research and development expenses
|
—
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
3
|
|
|
3
|
|
||||
|
Total before tax
|
$
|
1
|
|
$
|
(11
|
)
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
Tax expense
|
|
|
|
|
3
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(4
|
)
|
•
|
the designation of the Guarantor Subsidiary as an unrestricted subsidiary under the indenture governing the notes;
|
•
|
the release of the Guarantor Subsidiary from its guarantee under the Senior Secured Credit Facility;
|
•
|
the release or discharge of the indebtedness that required the guarantee of the notes by the Guarantor Subsidiary;
|
•
|
the permitted sale or other disposition of the Guarantor Subsidiary to a third party; and
|
•
|
the Company's exercise of its legal defeasance option of its covenant defeasance option under the indenture governing the notes.
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the three months ended June 30, 2015
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
297
|
|
|
$
|
27
|
|
|
$
|
495
|
|
|
$
|
(116
|
)
|
|
$
|
703
|
|
Service revenue
|
327
|
|
|
8
|
|
|
566
|
|
|
—
|
|
|
901
|
|
|||||
Total revenue
|
624
|
|
|
35
|
|
|
1,061
|
|
|
(116
|
)
|
|
1,604
|
|
|||||
Cost of products
|
233
|
|
|
9
|
|
|
418
|
|
|
(116
|
)
|
|
544
|
|
|||||
Cost of services
|
236
|
|
|
3
|
|
|
675
|
|
|
—
|
|
|
914
|
|
|||||
Selling, general and administrative expenses
|
110
|
|
|
1
|
|
|
228
|
|
|
—
|
|
|
339
|
|
|||||
Research and development expenses
|
19
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
67
|
|
|||||
Restructuring-related charges
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
6
|
|
|||||
Total operating expenses
|
600
|
|
|
13
|
|
|
1,373
|
|
|
(116
|
)
|
|
1,870
|
|
|||||
Income (loss) from operations
|
24
|
|
|
22
|
|
|
(312
|
)
|
|
—
|
|
|
(266
|
)
|
|||||
Interest expense
|
(44
|
)
|
|
—
|
|
|
(20
|
)
|
|
19
|
|
|
(45
|
)
|
|||||
Other (expense) income, net
|
13
|
|
|
2
|
|
|
4
|
|
|
(19
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations before income taxes
|
(7
|
)
|
|
24
|
|
|
(328
|
)
|
|
—
|
|
|
(311
|
)
|
|||||
Income tax expense (benefit)
|
(2
|
)
|
|
11
|
|
|
23
|
|
|
—
|
|
|
32
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(5
|
)
|
|
13
|
|
|
(351
|
)
|
|
—
|
|
|
(343
|
)
|
|||||
Equity in earnings of consolidated subsidiaries
|
(339
|
)
|
|
(359
|
)
|
|
—
|
|
|
698
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
(344
|
)
|
|
(346
|
)
|
|
(351
|
)
|
|
698
|
|
|
(343
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(344
|
)
|
|
$
|
(346
|
)
|
|
$
|
(351
|
)
|
|
$
|
698
|
|
|
$
|
(343
|
)
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
(344
|
)
|
|
$
|
(346
|
)
|
|
$
|
(352
|
)
|
|
$
|
698
|
|
|
$
|
(344
|
)
|
Total comprehensive income (loss)
|
(323
|
)
|
|
(274
|
)
|
|
(327
|
)
|
|
602
|
|
|
(322
|
)
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
(323
|
)
|
|
$
|
(274
|
)
|
|
$
|
(328
|
)
|
|
$
|
602
|
|
|
$
|
(323
|
)
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the three months ended June 30, 2014
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
245
|
|
|
$
|
32
|
|
|
$
|
485
|
|
|
$
|
(40
|
)
|
|
$
|
722
|
|
Service revenue
|
322
|
|
|
7
|
|
|
607
|
|
|
—
|
|
|
936
|
|
|||||
Total revenue
|
567
|
|
|
39
|
|
|
1,092
|
|
|
(40
|
)
|
|
1,658
|
|
|||||
Cost of products
|
200
|
|
|
12
|
|
|
359
|
|
|
(40
|
)
|
|
531
|
|
|||||
Cost of services
|
239
|
|
|
3
|
|
|
405
|
|
|
—
|
|
|
647
|
|
|||||
Selling, general and administrative expenses
|
127
|
|
|
(1
|
)
|
|
121
|
|
|
—
|
|
|
247
|
|
|||||
Research and development expenses
|
34
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
64
|
|
|||||
Total operating expenses
|
600
|
|
|
14
|
|
|
915
|
|
|
(40
|
)
|
|
1,489
|
|
|||||
Income (loss) from operations
|
(33
|
)
|
|
25
|
|
|
177
|
|
|
—
|
|
|
169
|
|
|||||
Interest expense
|
(44
|
)
|
|
—
|
|
|
(20
|
)
|
|
18
|
|
|
(46
|
)
|
|||||
Other (expense) income, net
|
12
|
|
|
(1
|
)
|
|
4
|
|
|
(18
|
)
|
|
(3
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(65
|
)
|
|
24
|
|
|
161
|
|
|
—
|
|
|
120
|
|
|||||
Income tax expense (benefit)
|
(23
|
)
|
|
13
|
|
|
39
|
|
|
—
|
|
|
29
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(42
|
)
|
|
11
|
|
|
122
|
|
|
—
|
|
|
91
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
132
|
|
|
121
|
|
|
—
|
|
|
(253
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
90
|
|
|
132
|
|
|
122
|
|
|
(253
|
)
|
|
91
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
90
|
|
|
$
|
132
|
|
|
$
|
122
|
|
|
$
|
(253
|
)
|
|
$
|
91
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
90
|
|
|
$
|
132
|
|
|
$
|
121
|
|
|
$
|
(253
|
)
|
|
$
|
90
|
|
Total comprehensive income (loss)
|
109
|
|
|
143
|
|
|
143
|
|
|
(284
|
)
|
|
111
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
109
|
|
|
$
|
143
|
|
|
$
|
141
|
|
|
$
|
(284
|
)
|
|
$
|
109
|
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the six months ended June 30, 2015
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
547
|
|
|
$
|
46
|
|
|
$
|
919
|
|
|
$
|
(205
|
)
|
|
$
|
1,307
|
|
Service revenue
|
628
|
|
|
15
|
|
|
1,130
|
|
|
—
|
|
|
1,773
|
|
|||||
Total revenue
|
1,175
|
|
|
61
|
|
|
2,049
|
|
|
(205
|
)
|
|
3,080
|
|
|||||
Cost of products
|
438
|
|
|
19
|
|
|
775
|
|
|
(205
|
)
|
|
1,027
|
|
|||||
Cost of services
|
457
|
|
|
5
|
|
|
1,055
|
|
|
—
|
|
|
1,517
|
|
|||||
Selling, general and administrative expenses
|
216
|
|
|
3
|
|
|
345
|
|
|
—
|
|
|
564
|
|
|||||
Research and development expenses
|
38
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
122
|
|
|||||
Restructuring-related charges
|
5
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
21
|
|
|||||
Total operating expenses
|
1,154
|
|
|
27
|
|
|
2,275
|
|
|
(205
|
)
|
|
3,251
|
|
|||||
Income (loss) from operations
|
21
|
|
|
34
|
|
|
(226
|
)
|
|
—
|
|
|
(171
|
)
|
|||||
Interest expense
|
(87
|
)
|
|
—
|
|
|
(39
|
)
|
|
37
|
|
|
(89
|
)
|
|||||
Other (expense) income, net
|
21
|
|
|
2
|
|
|
7
|
|
|
(37
|
)
|
|
(7
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(45
|
)
|
|
36
|
|
|
(258
|
)
|
|
—
|
|
|
(267
|
)
|
|||||
Income tax expense (benefit)
|
(6
|
)
|
|
16
|
|
|
24
|
|
|
—
|
|
|
34
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(39
|
)
|
|
20
|
|
|
(282
|
)
|
|
—
|
|
|
(301
|
)
|
|||||
Equity in earnings of consolidated subsidiaries
|
(265
|
)
|
|
(303
|
)
|
|
—
|
|
|
568
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
(304
|
)
|
|
(283
|
)
|
|
(282
|
)
|
|
568
|
|
|
(301
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(304
|
)
|
|
$
|
(283
|
)
|
|
$
|
(282
|
)
|
|
$
|
568
|
|
|
$
|
(301
|
)
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
(304
|
)
|
|
$
|
(283
|
)
|
|
$
|
(285
|
)
|
|
$
|
568
|
|
|
$
|
(304
|
)
|
Total comprehensive income (loss)
|
(305
|
)
|
|
(246
|
)
|
|
(294
|
)
|
|
540
|
|
|
(305
|
)
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
(305
|
)
|
|
$
|
(246
|
)
|
|
$
|
(294
|
)
|
|
$
|
540
|
|
|
$
|
(305
|
)
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the six months ended June 30, 2014
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
485
|
|
|
$
|
49
|
|
|
$
|
916
|
|
|
$
|
(94
|
)
|
|
$
|
1,356
|
|
Service revenue
|
629
|
|
|
14
|
|
|
1,177
|
|
|
—
|
|
|
1,820
|
|
|||||
Total revenue
|
1,114
|
|
|
63
|
|
|
2,093
|
|
|
(94
|
)
|
|
3,176
|
|
|||||
Cost of products
|
383
|
|
|
17
|
|
|
701
|
|
|
(94
|
)
|
|
1,007
|
|
|||||
Cost of services
|
471
|
|
|
6
|
|
|
796
|
|
|
—
|
|
|
1,273
|
|
|||||
Selling, general and administrative expenses
|
258
|
|
|
—
|
|
|
234
|
|
|
—
|
|
|
492
|
|
|||||
Research and development expenses
|
51
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
127
|
|
|||||
Total operating expenses
|
1,163
|
|
|
23
|
|
|
1,807
|
|
|
(94
|
)
|
|
2,899
|
|
|||||
Income (loss) from operations
|
(49
|
)
|
|
40
|
|
|
286
|
|
|
—
|
|
|
277
|
|
|||||
Interest expense
|
(87
|
)
|
|
—
|
|
|
(37
|
)
|
|
35
|
|
|
(89
|
)
|
|||||
Other (expense) income, net
|
24
|
|
|
(3
|
)
|
|
4
|
|
|
(35
|
)
|
|
(10
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(112
|
)
|
|
37
|
|
|
253
|
|
|
—
|
|
|
178
|
|
|||||
Income tax expense (benefit)
|
(40
|
)
|
|
20
|
|
|
53
|
|
|
—
|
|
|
33
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(72
|
)
|
|
17
|
|
|
200
|
|
|
—
|
|
|
145
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
215
|
|
|
184
|
|
|
—
|
|
|
(399
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
143
|
|
|
201
|
|
|
200
|
|
|
(399
|
)
|
|
145
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
143
|
|
|
$
|
201
|
|
|
$
|
200
|
|
|
$
|
(399
|
)
|
|
$
|
145
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
143
|
|
|
$
|
201
|
|
|
$
|
198
|
|
|
$
|
(399
|
)
|
|
$
|
143
|
|
Total comprehensive income (loss)
|
167
|
|
|
215
|
|
|
221
|
|
|
(434
|
)
|
|
169
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
167
|
|
|
$
|
215
|
|
|
$
|
219
|
|
|
$
|
(434
|
)
|
|
$
|
167
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
June 30, 2015
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
20
|
|
|
$
|
14
|
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
425
|
|
Accounts receivable, net
|
73
|
|
|
32
|
|
|
1,320
|
|
|
—
|
|
|
1,425
|
|
|||||
Inventories
|
255
|
|
|
10
|
|
|
444
|
|
|
—
|
|
|
709
|
|
|||||
Due from affiliates
|
1,055
|
|
|
1,286
|
|
|
330
|
|
|
(2,671
|
)
|
|
—
|
|
|||||
Other current assets
|
219
|
|
|
31
|
|
|
278
|
|
|
(47
|
)
|
|
481
|
|
|||||
Total current assets
|
1,622
|
|
|
1,373
|
|
|
2,763
|
|
|
(2,718
|
)
|
|
3,040
|
|
|||||
Property, plant and equipment, net
|
152
|
|
|
1
|
|
|
195
|
|
|
—
|
|
|
348
|
|
|||||
Goodwill
|
876
|
|
|
—
|
|
|
1,882
|
|
|
—
|
|
|
2,758
|
|
|||||
Intangibles, net
|
179
|
|
|
—
|
|
|
684
|
|
|
—
|
|
|
863
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
137
|
|
|||||
Deferred income taxes
|
388
|
|
|
130
|
|
|
42
|
|
|
(185
|
)
|
|
375
|
|
|||||
Investments in subsidiaries
|
3,259
|
|
|
1,491
|
|
|
—
|
|
|
(4,750
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,091
|
|
|
21
|
|
|
39
|
|
|
(1,151
|
)
|
|
—
|
|
|||||
Other assets
|
388
|
|
|
53
|
|
|
104
|
|
|
—
|
|
|
545
|
|
|||||
Total assets
|
$
|
7,955
|
|
|
$
|
3,069
|
|
|
$
|
5,846
|
|
|
$
|
(8,804
|
)
|
|
$
|
8,066
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
59
|
|
Accounts payable
|
275
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
695
|
|
|||||
Payroll and benefits liabilities
|
80
|
|
|
1
|
|
|
97
|
|
|
—
|
|
|
178
|
|
|||||
Deferred service revenue and customer deposits
|
208
|
|
|
32
|
|
|
327
|
|
|
—
|
|
|
567
|
|
|||||
Due to affiliates
|
1,660
|
|
|
136
|
|
|
875
|
|
|
(2,671
|
)
|
|
—
|
|
|||||
Other current liabilities
|
221
|
|
|
5
|
|
|
232
|
|
|
(47
|
)
|
|
411
|
|
|||||
Total current liabilities
|
2,485
|
|
|
174
|
|
|
1,969
|
|
|
(2,718
|
)
|
|
1,910
|
|
|||||
Long-term debt
|
3,402
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
3,415
|
|
|||||
Pension and indemnity plan liabilities
|
400
|
|
|
—
|
|
|
286
|
|
|
—
|
|
|
686
|
|
|||||
Postretirement and postemployment benefits liabilities
|
23
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
177
|
|
|||||
Income tax accruals
|
3
|
|
|
11
|
|
|
167
|
|
|
—
|
|
|
181
|
|
|||||
Due to affiliates
|
17
|
|
|
39
|
|
|
1,095
|
|
|
(1,151
|
)
|
|
—
|
|
|||||
Other liabilities
|
31
|
|
|
—
|
|
|
237
|
|
|
(185
|
)
|
|
83
|
|
|||||
Total liabilities
|
6,361
|
|
|
224
|
|
|
3,921
|
|
|
(4,054
|
)
|
|
6,452
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total NCR stockholders’ equity
|
1,594
|
|
|
2,845
|
|
|
1,905
|
|
|
(4,750
|
)
|
|
1,594
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Total stockholders’ equity
|
1,594
|
|
|
2,845
|
|
|
1,909
|
|
|
(4,750
|
)
|
|
1,598
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,955
|
|
|
$
|
3,069
|
|
|
$
|
5,846
|
|
|
$
|
(8,804
|
)
|
|
$
|
8,066
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
December 31, 2014
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
40
|
|
|
$
|
9
|
|
|
462
|
|
|
$
|
—
|
|
|
$
|
511
|
|
|
Accounts receivable, net
|
69
|
|
|
19
|
|
|
1,316
|
|
|
—
|
|
|
1,404
|
|
|||||
Inventories
|
242
|
|
|
6
|
|
|
421
|
|
|
—
|
|
|
669
|
|
|||||
Due from affiliates
|
626
|
|
|
1,228
|
|
|
476
|
|
|
(2,330
|
)
|
|
—
|
|
|||||
Other current assets
|
294
|
|
|
28
|
|
|
280
|
|
|
(98
|
)
|
|
504
|
|
|||||
Total current assets
|
1,271
|
|
|
1,290
|
|
|
2,955
|
|
|
(2,428
|
)
|
|
3,088
|
|
|||||
Property, plant and equipment, net
|
161
|
|
|
1
|
|
|
234
|
|
|
—
|
|
|
396
|
|
|||||
Goodwill
|
878
|
|
|
—
|
|
|
1,882
|
|
|
—
|
|
|
2,760
|
|
|||||
Intangibles, net
|
196
|
|
|
—
|
|
|
730
|
|
|
—
|
|
|
926
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
551
|
|
|
—
|
|
|
551
|
|
|||||
Deferred income taxes
|
363
|
|
|
128
|
|
|
43
|
|
|
(185
|
)
|
|
349
|
|
|||||
Investments in subsidiaries
|
3,519
|
|
|
1,771
|
|
|
—
|
|
|
(5,290
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,127
|
|
|
20
|
|
|
41
|
|
|
(1,188
|
)
|
|
—
|
|
|||||
Other assets
|
375
|
|
|
49
|
|
|
113
|
|
|
—
|
|
|
537
|
|
|||||
Total assets
|
$
|
7,890
|
|
|
$
|
3,259
|
|
|
$
|
6,549
|
|
|
$
|
(9,091
|
)
|
|
$
|
8,607
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
187
|
|
Accounts payable
|
248
|
|
|
—
|
|
|
464
|
|
|
—
|
|
|
712
|
|
|||||
Payroll and benefits liabilities
|
85
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
196
|
|
|||||
Deferred service revenue and customer deposits
|
149
|
|
|
21
|
|
|
324
|
|
|
—
|
|
|
494
|
|
|||||
Due to affiliates
|
1,318
|
|
|
124
|
|
|
888
|
|
|
(2,330
|
)
|
|
—
|
|
|||||
Other current liabilities
|
192
|
|
|
10
|
|
|
377
|
|
|
(98
|
)
|
|
481
|
|
|||||
Total current liabilities
|
2,077
|
|
|
155
|
|
|
2,266
|
|
|
(2,428
|
)
|
|
2,070
|
|
|||||
Long-term debt
|
3,454
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
3,472
|
|
|||||
Pension and indemnity plan liabilities
|
391
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
705
|
|
|||||
Postretirement and postemployment benefits liabilities
|
25
|
|
|
—
|
|
|
145
|
|
|
—
|
|
|
170
|
|
|||||
Income tax accruals
|
3
|
|
|
10
|
|
|
168
|
|
|
—
|
|
|
181
|
|
|||||
Due to affiliates
|
17
|
|
|
41
|
|
|
1,130
|
|
|
(1,188
|
)
|
|
—
|
|
|||||
Other liabilities
|
52
|
|
|
—
|
|
|
244
|
|
|
(185
|
)
|
|
111
|
|
|||||
Total liabilities
|
6,019
|
|
|
206
|
|
|
4,285
|
|
|
(3,801
|
)
|
|
6,709
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total NCR stockholders’ equity
|
1,871
|
|
|
3,053
|
|
|
2,237
|
|
|
(5,290
|
)
|
|
1,871
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Total stockholders’ equity
|
1,871
|
|
|
3,053
|
|
|
2,249
|
|
|
(5,290
|
)
|
|
1,883
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,890
|
|
|
$
|
3,259
|
|
|
$
|
6,549
|
|
|
$
|
(9,091
|
)
|
|
$
|
8,607
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the six months ended June 30, 2015
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
61
|
|
|
$
|
(75
|
)
|
|
$
|
301
|
|
|
$
|
(41
|
)
|
|
$
|
246
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(9
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
(31
|
)
|
|||||
Additions to capitalized software
|
(48
|
)
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(79
|
)
|
|||||
Proceeds from (payments of) intercompany notes
|
96
|
|
|
80
|
|
|
—
|
|
|
(176
|
)
|
|
—
|
|
|||||
Investments in equity affiliates
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Other investing activities, net
|
(7
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash provided by (used in) investing activities
|
31
|
|
|
80
|
|
|
(49
|
)
|
|
(175
|
)
|
|
(113
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Tax withholding payments on behalf of employees
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Short term borrowings, net
|
15
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
28
|
|
|||||
Payments on term credit facility
|
(111
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(116
|
)
|
|||||
Payments on revolving credit facilities
|
(223
|
)
|
|
—
|
|
|
(385
|
)
|
|
—
|
|
|
(608
|
)
|
|||||
Borrowings on revolving credit facilities
|
223
|
|
|
—
|
|
|
289
|
|
|
—
|
|
|
512
|
|
|||||
Proceeds from employee stock plans
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Other financing activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity contribution
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Dividend distribution to consolidated subsidiaries
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
41
|
|
|
—
|
|
|||||
Borrowings (repayments) of intercompany notes
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
176
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(95
|
)
|
|
—
|
|
|
(304
|
)
|
|
216
|
|
|
(183
|
)
|
|||||
Cash flows from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
(20
|
)
|
|
5
|
|
|
(71
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
40
|
|
|
9
|
|
|
462
|
|
|
—
|
|
|
511
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
20
|
|
|
$
|
14
|
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
425
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the six months ended June 30, 2014
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
17
|
|
|
$
|
(46
|
)
|
|
$
|
169
|
|
|
$
|
(29
|
)
|
|
$
|
111
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(31
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(66
|
)
|
|||||
Additions to capitalized software
|
(43
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(73
|
)
|
|||||
Business acquisitions, net
|
(1,642
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,642
|
)
|
|||||
Proceeds from (payments of) intercompany notes
|
40
|
|
|
50
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|||||
Changes in restricted cash
|
1,114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,114
|
|
|||||
Investments in equity affiliates
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Other investing activities, net
|
(3
|
)
|
|
—
|
|
|
7
|
|
|
—
|
|
|
4
|
|
|||||
Net cash provided by (used in) investing activities
|
(567
|
)
|
|
50
|
|
|
(58
|
)
|
|
(88
|
)
|
|
(663
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Tax withholding payments on behalf of employees
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Short term borrowings, net
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Payments on term credit facility
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Borrowings on term credit facility
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|||||
Payments on revolving credit facility
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|||||
Borrowings on revolving credit facility
|
570
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
570
|
|
|||||
Debt issuance costs
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Proceeds from employee stock plans
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Other financing activities
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Equity contribution
|
—
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|||||
Dividend distribution to consolidated subsidiaries
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
29
|
|
|
—
|
|
|||||
Borrowings (repayments) of intercompany notes
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
90
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
542
|
|
|
—
|
|
|
(111
|
)
|
|
117
|
|
|
548
|
|
|||||
Cash flows from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
(46
|
)
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
(45
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
75
|
|
|
11
|
|
|
442
|
|
|
—
|
|
|
528
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
29
|
|
|
$
|
15
|
|
|
$
|
439
|
|
|
$
|
—
|
|
|
$
|
483
|
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
|
•
|
Results continued to be negatively impacted by foreign currency headwinds;
|
•
|
Revenue decreased approximately
3%
from the prior year period, including unfavorable foreign currency impacts of approximately
7%
; and
|
•
|
We completed the transfer of the UK London pension plan to an insurer, resulting in a charge of $427 million in the second quarter of 2015.
|
•
|
Gain profitable share -
We have been working to shift our business model to focus on growth of higher margin software and services revenue by focusing our research and development efforts, changing and educating our sales force and executing transformative acquisitions in each of our core divisions. At the same time, we are continuing our effort to optimize our investments in demand creation to increase NCR’s market share in areas with the greatest potential for profitable growth, which include opportunities in self-service technologies with our core financial services, retail, and hospitality customers. We focus on expanding our presence in our core industries, while seeking additional growth by:
|
◦
|
penetrating market adjacencies in single and multi-channel self-service segments;
|
◦
|
expanding and strengthening our geographic presence and sales coverage across customer tiers through use of the indirect channel; and
|
◦
|
leveraging NCR Services and consumables solutions to grow our share of customer revenue, improve customer retention, and deliver increased value to our customers.
|
•
|
Enhancing the customer experience
- We are committed to providing a customer experience to drive loyalty, focusing on product and software solutions based on the needs of our customers, a sales force enabled with the consultative selling model to better leverage the innovative solutions we are bringing to market, and sales and support service teams focused on delivery and customer interactions. We continue to rely on the Customer Loyalty Survey, among other metrics, to measure our current state and set a course for our future state where we aim to continuously improve with solution innovations as well as through the execution of our service delivery programs.
|
•
|
Enhance our global service capability
- We continue to identify and execute various initiatives to enhance our global service capability. We also have focused on improving our service positioning, increasing customer service attach rates for our products and improving profitability in our services business. Our service capability can provide us with a competitive advantage in winning customers and it provides NCR with an attractive and stable revenue source.
|
•
|
Build the lowest cost structure in our industry
- We strive to increase the efficiency and effectiveness of our core functions and the productivity of our employees through our continuous improvement initiatives. In 2014, we began a comprehensive restructuring plan to reallocate resources to higher-growth, higher-margin opportunities by proactively taking steps to end-of-life older commodity hardware product lines, moving lower productivity services to new centers of excellence, rationalizing our hardware and software product lines and reducing layers of management and organizing internally around a division model. We have continued to execute this plan in 2015, and expect it to contribute meaningful savings and gains in productivity and efficiency.
|
•
|
Expand into emerging growth industry segments
- We are focused on broadening the scope of our self-service solutions from our existing customers to expand these solution offerings to customers in newer industry-vertical markets including telecommunications and technology as well as travel and small business. We expect to grow our business in these industries through integrated service offerings in addition to targeted acquisitions and strategic partnerships.
|
•
|
Innovation of our people
- We are committed to solution innovation across all customer industries. Our focus on innovation has been enabled by closer collaboration between NCR Services and our divisions, and the movement of our software development resources directly into our core divisions. Innovation is also driven through investments in training and developing our employees by taking advantage of our world-class training centers. We expect that these steps and investments will accelerate the delivery of innovative solutions focused on the needs of our customers and changes in consumer behavior.
|
•
|
Pursue strategic acquisitions that promote growth and improve gross margin
- We have actively explored, and will continue selectively to explore, potential acquisition opportunities in the ordinary course of business to identify acquisitions that can accelerate the growth of our business and improve our gross margin mix, with a particular focus on software-oriented transactions. We may fund acquisitions through either equity or debt, including borrowings under our senior secured credit facility.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$1,604
|
|
$1,658
|
|
$3,080
|
|
$3,176
|
Gross margin
|
$146
|
|
$480
|
|
$536
|
|
$896
|
Gross margin as a percentage of revenue
|
9.1%
|
|
29.0%
|
|
17.4%
|
|
28.2%
|
Operating expenses
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
$339
|
|
$247
|
|
$564
|
|
$492
|
Research and development expenses
|
67
|
|
64
|
|
122
|
|
127
|
Restructuring-related charges
|
6
|
|
—
|
|
21
|
|
—
|
(Loss) income from operations
|
$(266)
|
|
$169
|
|
$(171)
|
|
$277
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Product revenue
|
$703
|
|
$722
|
|
$1,307
|
|
$1,356
|
Cost of products
|
544
|
|
531
|
|
1,027
|
|
1,007
|
Product gross margin
|
$159
|
|
$191
|
|
$280
|
|
$349
|
Product gross margin as a percentage of revenue
|
22.6%
|
|
26.5%
|
|
21.4%
|
|
25.7%
|
Services revenue
|
$901
|
|
$936
|
|
$1,773
|
|
$1,820
|
Cost of services
|
914
|
|
647
|
|
1,517
|
|
1,273
|
Services gross margin
|
$(13)
|
|
$289
|
|
$256
|
|
$547
|
Services gross margin as a percentage of revenue
|
(1.4)%
|
|
30.9%
|
|
14.4%
|
|
30.1%
|
In millions
|
2015
|
% of Total
|
|
2014
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Constant Currency
|
Americas
|
$878
|
55%
|
|
$834
|
50%
|
|
5%
|
7%
|
Europe
|
349
|
22%
|
|
408
|
25%
|
|
(14)%
|
2%
|
Asia Middle East Africa (AMEA)
|
377
|
23%
|
|
416
|
25%
|
|
(9)%
|
(1)%
|
Consolidated revenue
|
$1,604
|
100%
|
|
$1,658
|
100%
|
|
(3)%
|
4%
|
In millions
|
2015
|
% of Total
|
|
2014
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Constant Currency
|
Americas
|
$1,677
|
54%
|
|
$1,614
|
51%
|
|
4%
|
6%
|
Europe
|
677
|
22%
|
|
773
|
24%
|
|
(12)%
|
4%
|
Asia Middle East Africa (AMEA)
|
726
|
24%
|
|
789
|
25%
|
|
(8)%
|
(1)%
|
Consolidated revenue
|
$3,080
|
100%
|
|
$3,176
|
100%
|
|
(3)%
|
4%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Pension expense
|
$426
|
|
$2
|
|
$426
|
|
$1
|
Postemployment expense
|
1
|
|
4
|
|
3
|
|
9
|
Postretirement benefit
|
(4)
|
|
(4)
|
|
(8)
|
|
(8)
|
Total expense
|
$423
|
|
$2
|
|
$421
|
|
$2
|
•
|
Financial Services
- We offer solutions to enable customers in the financial services industry to reduce costs, generate new revenue streams and enhance customer loyalty. These solutions include a comprehensive line of ATM and payment processing hardware and software; cash management and video banking software and customer-facing digital banking services; and related installation, maintenance, and managed and professional services. We also offer a complete line of printer consumables.
|
•
|
Retail Solutions
- We offer solutions to customers in the retail industry designed to improve selling productivity and checkout processes as well as increase service levels. These solutions primarily include retail-oriented technologies, such as point of sale terminals and point of sale software; an omni-channel retail software platform with a comprehensive suite of retail software applications; innovative self-service kiosks, such as self-checkout; as well as bar-code scanners. We also offer installation, maintenance, managed and professional services and a complete line of printer consumables.
|
•
|
Hospitality
- We offer technology solutions to customers in the hospitality industry, serving businesses that range from a single store or restaurant to global chains and sports and entertainment venues. Our solutions include point of sale hardware and software solutions, installation, maintenance, managed and professional services and a complete line of printer consumables.
|
•
|
Emerging Industries
- We offer maintenance as well as managed and professional services for third-party computer hardware provided to select manufacturers, primarily in the telecommunications industry, who value and leverage our global service capability. Also included in the Emerging Industries segment are solutions designed to enhance the customer experience for the travel industry, such as self-service kiosks, and the small business industry, such as an all-in-one point of sale solution. Additionally, we offer installation, maintenance, and managed and professional services.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$840
|
|
$900
|
|
$1,638
|
|
$1,694
|
Operating income
|
$123
|
|
$137
|
|
$228
|
|
$240
|
Operating income as a percentage of revenue
|
14.6%
|
|
15.2%
|
|
13.9%
|
|
14.2%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$505
|
|
$503
|
|
$950
|
|
$993
|
Operating income
|
$42
|
|
$48
|
|
$58
|
|
$84
|
Operating income as a percentage of revenue
|
8.3%
|
|
9.5%
|
|
6.1%
|
|
8.5%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$172
|
|
$170
|
|
$320
|
|
$319
|
Operating income
|
$27
|
|
$23
|
|
$45
|
|
$35
|
Operating income as a percentage of revenue
|
15.7%
|
|
13.5%
|
|
14.1%
|
|
11.0%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||
In millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$87
|
|
$85
|
|
$172
|
|
$170
|
Operating income
|
$10
|
|
$2
|
|
$17
|
|
$6
|
Operating income as a percentage of revenue
|
11.5%
|
|
2.4%
|
|
9.9%
|
|
3.5%
|
|
Six months ended June 30
|
||
In millions
|
2015
|
|
2014
|
Net cash provided by operating activities
|
$246
|
|
$111
|
Less: Expenditures for property, plant and equipment
|
(31)
|
|
(66)
|
Less: Additions to capitalized software
|
(79)
|
|
(73)
|
Net cash used in discontinued operations
|
(17)
|
|
(38)
|
Pension discretionary contributions and settlements
|
—
|
|
18
|
Free cash flow (used) (non-GAAP)
|
$119
|
|
$(48)
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
2.1
|
Separation and Distribution Agreement, dated as of August 27, 2007, between NCR Corporation and Teradata Corporation (Exhibit 10.1 to the Current Report on Form 8-K of Teradata Corporation dated September 6, 2007).
|
|
|
2.2
|
Asset Purchase Agreement, dated as of February 3, 2012, by and between Redbox Automated Retail, LLC and NCR Corporation (incorporated by reference to Exhibit 2.2 from the NCR Corporation Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
|
2.3
|
First Amendment to Asset Purchase Agreement, dated as of June 22, 2012, by and between Redbox Automated Retail, LLC and NCR Corporation (incorporated by reference to Exhibit 2.3 from the NCR Corporation Quarterly Report on Form 10-Q for the period ended June 30, 2012).
|
|
|
2.4
|
Agreement and Plan of Merger, dated November 28, 2012, by and among NCR Corporation, Moon S.P.V. (Subsidiary) Ltd., and Retalix, Ltd. (incorporated by reference to Exhibit 2.1 from the NCR Corporation Current Report on Form 8-K filed February 6, 2013).
|
|
|
2.5
|
Agreement and Plan of Merger, dated as of December 2, 2013, by and among NCR Corporation, Delivery Acquisition Corporation, Fandango Holdings Corporation and Thoma Bravo, LLC as the stockholder representative (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of NCR Corporation dated December 2, 2013 (the “December 2, 2013 Form 8-K”)).
|
|
|
2.6
|
Commitment Letter, dated as of December 2, 2013, by and among NCR Corporation, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Royal Bank of Canada, RBC Capital Markets, SunTrust Bank, SunTrust Robinson Humphrey, Inc., WF Investment Holdings, LLC and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 2.2 to the December 2, 2013 Form 8-K).
|
|
|
2.7
|
Share Purchase Agreement, dated as of December 2, 2013, by and among NCR Limited and the holders of the outstanding share capital of Alaric Systems Limited (incorporated by reference to Exhibit 2.3 to the December 2, 2013 Form 8-K).
|
|
|
3.1
|
Articles of Amendment and Restatement of NCR Corporation as amended May 14, 1999 (incorporated by reference to Exhibit 3.1 from the NCR Corporation Form 10-Q for the period ended June 30, 1999).
|
|
|
3.2
|
Bylaws of NCR Corporation, as amended and restated on January 26, 2011 (incorporated by reference to Exhibit 3(ii) to the NCR Corporation Current Report on Form 8-K filed January 31, 2011).
|
|
|
4.1
|
Common Stock Certificate of NCR Corporation (incorporated by reference to Exhibit 4.1 from the NCR Corporation Annual Report on Form 10-K for the year ended December 31, 1999).
|
|
|
4.2
|
Indenture, dated September 17, 2012, among NCR Corporation, as issuer, NCR International Inc. and Radiant Systems Inc. as subsidiary guarantors and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.01 to the Current Report on Form 8-K of NCR Corporation dated September 17, 2012).
|
|
|
4.3
|
Indenture, dated December 18, 2012, among NCR Corporation, as issuer, NCR International Inc. and Radiant Systems Inc. as subsidiary guarantors and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.01 to the NCR Corporation Current Report on Form 8-K filed December 18, 2012).
|
|
|
4.4
|
Indenture, dated December 19, 2013, between NCR Escrow Corp. and U.S. Bank National Association relating to the $400 million aggregate principal amount of 5.875% senior notes due 2021 (the “5.875% Notes”) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of NCR Corporation dated December 19, 2013 (the “December 19, 2013 Form 8-K”)).
|
|
|
4.5
|
First Supplemental Indenture relating to the 5.875% Notes, dated January 10, 2014, among NCR Corporation, NCR International, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report of NCR Corporation dated January 10, 2014 (the “January 10, 2014 Form 8-K”)).
|
|
|
4.6
|
Indenture, dated December 19, 2013, between NCR Escrow Corp. and U.S. Bank National Association relating to the $700 million aggregate principal amount of 6.375% senior notes due 2023 (the “6.375% Notes”) (incorporated by reference to Exhibit 4.2 to the December 19, 2013 Form 8-K).
|
|
|
4.7
|
First Supplemental Indenture relating to the 6.375% Notes, dated January 10, 2014, among NCR Corporation, NCR International, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the January 10, 2014 Form 8-K).
|
|
|
10.1
|
Amended and Restated NCR Executive Severance Plan.
|
|
|
10.2
|
Amended and Restated NCR Corporation Economic Profit Plan.
|
|
|
10.3
|
Form of 2015 Director Restricted Stock Unit Grant Statement under the NCR Corporation 2013 Stock Incentive Plan.
|
|
|
10.4
|
Employment Transfer Letter (revised) of Michael Bayer, dated July 30, 2015.
|
|
|
31.1
|
Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
31.2
|
Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
32
|
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
Financials in XBRL Format.
|
|
|
NCR CORPORATION
|
||
|
|
|
|
|
Date:
|
July 31, 2015
|
By:
|
|
/s/ Robert Fishman
|
|
|
|
|
Robert Fishman
Senior Vice President and Chief Financial Officer
|
|
NCR CORPORATION
|
|
|
|
By:
/s/ Andrea L. Ledford
|
|
Andrea L. Ledford
|
|
SVP, Corporate Services and
|
|
Chief Human Resources Officer
|
1.1
|
Applicable Percentage
means sixty-seven percent (67%) in the case of a termination by the Company without Cause or a resignation for Good Reason and one hundred percent (100%) in the case of a termination by reason of Retirement or Disability.
|
1.2
|
Award Statement
means a written statement (a) identifying an individual as a Participant, (b) setting forth the percentage of Economic Profit that represents the Participant’s Bonus Credit opportunity under the Plan for the applicable Performance Period, (c) setting forth, to the extent applicable, the Participant’s Bonus payment and Bonus Credit for the prior Performance Period, (d) setting forth, to the extent applicable, the balance in the Participant’s Bonus Bank, and (e) containing such other terms and conditions as may be determined by the Committee in its sole discretion. For the avoidance of doubt, an Award Statement may be in electronic form.
|
1.3
|
Bonus
means the portion of a Participant’s Bonus Bank payable to a Participant in accordance with the terms of the Plan.
|
1.4
|
Bonus Bank
means the bookkeeping account established and maintained by the Company under the Plan for the Participant which reflects the aggregate Bonus Credits for such Participant less the aggregate Bonuses paid to such Participant, in each case, in accordance with the terms of the Plan.
|
1.5
|
Bonus Credit
means the amount credited to a Participant’s Bonus Bank for a Performance Period based on Economic Profit.
|
1.6
|
Cash Flow from Operations
means net cash provided by operating activities as reported under GAAP, excluding extraordinary cash payments made to or under any of the Company’s global defined benefit pension and retirement plans in connection with the Company’s pension strategy to reduce pension liability or increase pension funding (which may include but is not limited to cash payments made in connection with any annuity purchase, plan termination or settlement) (provided that, to the extent required by Section 409A of the Code, the prior definition of Cash Flow from Operations shall apply).
|
1.7
|
Cash Flow Test
has the meaning set forth in Section 3.4.
|
1.8
|
Cause
means, unless otherwise provided in an Award Statement, (a) “Cause” as defined in any Individual Agreement, or (b) if there is no Individual Agreement or if it does not define Cause: (i) conviction of the Participant for committing a felony under federal law or the law of the state in which such action occurred, (ii) dishonesty in the course of fulfilling the Participant’s employment duties, (iii) failure on the part of the Participant to perform substantially such Participant’s employment duties in any material respect, (iv) a material violation of the Company’s ethics and compliance program or (v) such other events as shall be determined by the Committee and set forth in a Participant’s Award Statement.
|
1.9
|
Change in Control
means any of the following events:
|
1.10
|
Code
means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
|
1.11
|
Committee
means the Compensation and Human Resource Committee of the Board of Directors of the Company, or a subcommittee thereof consisting of members appointed from time to time by the Board of Directors of the Company. The Committee administering the Plan shall be composed solely of “outside directors” within the meaning of Section 162(m) of the Code.
|
1.12
|
Company
means NCR Corporation, a Maryland corporation.
|
1.13
|
Compensation Recovery Policy
has the meaning set forth in Section 7.11.
|
1.14
|
Competing Organization
has the meaning set forth in Section 6.2.
|
1.15
|
Disability
means a total and permanent disability that causes a Participant to be eligible to receive long-term disability benefits from the NCR Long-Term Disability Plan, or any similar plan or program sponsored by a subsidiary or affiliate of the Company.
|
1.16
|
Economic Profit
, for any Performance Period, means the difference between (a) the Company’s Net Operating Profit After Tax and (b) the product of (i) Total Invested Capital and (ii) Weighted Average Cost of Capital.
|
1.18
|
Good Reason
shall have the meaning set forth in an Individual Agreement. For the avoidance of doubt, (a) if there is no Individual Agreement or if it does not define Good Reason, the provisions applicable to a resignation for “Good Reason” under the Plan shall not apply to the Participant and (b) “Good Reason” shall not apply to a Participant under the Plan by virtue of its application to a Participant following a Change in Control under the Company’s Amended and Restated Change in Control Severance Plan.
|
1.19
|
Grandfathered Bonus Bank
means (i) a Participant’s Bonus Bank as of December 31, 2014 (for the avoidance of doubt, without taking into account any Bonus Credit for calendar year 2014 to be credited in 2015) minus (ii) the aggregate of all distributions made to the Participant pursuant to Section 3.4 and Section 4.3(b)(ii) after December 31, 2014.
|
1.20
|
Individual Agreement
means an employment, consulting or similar agreement between a Participant and the Company or one of its subsidiaries or affiliates. For the avoidance of doubt, the term Individual Agreement does not include any severance plan or policy that covers more than one individual.
|
1.21
|
Net Operating Profit After Tax
means Non-Pension Operating Income less cash paid for income taxes and the cash paid for restructuring charges.
|
1.22
|
Non-Pension Operating Income
means income (loss) from operations reported under generally accepted accounting principles, excluding the impact of pension expense (benefit), excluding the impact of non-operational adjustments as reported in the Company’s Annual Report on Form 10-K and excluding the impact of foreign currency fluctuations as compared to foreign currency rates used to establish the Company’s current year plan.
|
1.23
|
Participant
means any employee of the Company or any of its subsidiaries or affiliates who is selected by the Committee to participate in the Plan.
|
1.24
|
Performance Period
means the calendar year designated by the Committee pursuant to Section 3.1 of the Plan with respect to which the achievement of the performance goals is to be measured.
|
1.25
|
Plan
means this NCR Corporation Economic Profit Plan.
|
1.26
|
Prorated Bonus Bank
means, for a Participant described in Section 4.3, (a) the Participant’s Bonus Bank (adjusted as provided in Section 4.3(b)(i) and reduced by any distributions made or to be made pursuant to Section 4.3(a) and Section 4.3(b)(ii)) as of July 31 of the year following the year of the Participant’s termination of employment (b) multiplied by a fraction, (i) the numerator of which is the number of days in which the Participant was actively employed by the Company in the year in which the Participant’s employment with the Company terminates, and (ii) the denominator of which is 365, (c) multiplied by thirty-three percent (33%).
|
1.27
|
Retirement
means termination of employment with the Company or a subsidiary or affiliate when a Participant is age 62 or older with at least 10 years of continuous service with the Company and its subsidiaries and affiliates for the period ending on the date of the Participant’s termination of employment (but excluding service with any entity whose stock or assets were acquired by the Company for the period prior to such acquisition).
|
1.28
|
Total Invested Capital
means debt (long and short term), plus stockholders’ equity, adjusted to eliminate the after-tax impact of the current year impact of pension expense (benefit), to exclude the impact of non-operational adjustments as reported in the Company’s Annual Report on Form 10-K, and to exclude the impact of foreign currency exchange fluctuations as compared to foreign currency rates used to establish the Company’s current year plan.
|
1.29
|
Weighted Average Cost of Capital
means the sum of (a) the product of (i) cost of equity and (ii) the weighted market value of the Company’s common shares outstanding and (b) the product of (i) the cost of debt and (ii) the weighted market value of the long-term debt and short-term debt, divided by (c) the sum of the weighted market value of common shares outstanding and the weighted market value of long-term debt and short-term debt.
|
3.1
|
Bonus Credit Awards
.
For each Performance Period, a Participant will be eligible to earn a Bonus Credit, which will equal a specified percentage of Economic Profit for such Performance Period. The Committee shall, subject to Section 4.1, no later than the earlier of 90 days after the beginning of each Performance Period or the expiration of twenty-five percent (25%) of such Performance Period, (a) affirm the applicability of Economic Profit as the performance criterion for such Performance Period, and (b) determine the pre-established percentage of Economic Profit that each Participant will be eligible to earn as a Bonus Credit under the Plan, subject to the individual maximum amounts described in the final sentence of this Section 3.1. A Performance Period shall be determined by the Committee and set forth in each Participant’s Award Statement. The maximum percent of Economic Profit that may be earned by any Participant as a Bonus Credit for a particular Performance Period is five percent (5%).
|
3.2
|
Determination of Bonus Credit Amount
.
Following the close of each Performance Period, the Committee will certify in writing as to the attainment of Economic Profit for the Performance Period. Once the amount of Economic Profit is determined as soon as reasonably practicable after the end of the Performance Period, a Bonus Credit shall be credited to a Participant’s Bonus Bank for the Performance Period, and the determination of the Committee will be final and binding. The Bonus Credit for any Participant for any Performance Period may be a negative number or a positive number. If the Bonus Credit is a positive number, the Participant’s Bonus Bank will be increased by the amount of such Bonus Credit; if the Bonus Credit is a negative number, the Bonus Bank will be decreased by the amount of such Bonus Credit, including a decrease such that the Participant’s overall Bonus Bank balance is negative. If a Participant’s overall Bonus Bank account balance is negative as of the date a Bonus would be paid under the Plan (as described below), no Bonus will be paid to such Participant under the Plan, but the Participant’s negative Bonus Bank shall not reduce the amount of other compensation payable to, or offset any amount otherwise due to, such Participant.
|
3.3
|
Discretionary Adjustment
.
The Committee may not increase the pre-established percentage of Economic Profit that may be credited to any Participant’s Bonus Bank under the Plan for a Performance Period, but it retains the authority to reduce the Bonus Credit to be credited to a Participant’s Bonus Bank under the Plan for a Performance Period (provided that such authority to reduce a Bonus Credit does not apply to any Bonus Credits made pursuant to Article V). The Committee may establish factors to take into consideration in implementing its discretion, including, but not limited to, corporate or business unit performance against budgeted financial goals (
e.g.
, operating income or revenue), achievement of non-financial goals, economic and relative performance considerations and assessments of individual performance.
|
3.4
|
Payment of Bonus
.
Except as otherwise determined by the Committee and set forth in a Participant’s Award Statement, subject to a Participant’s continued employment through the
|
4.1
|
New Participants During the Performance Period
.
If an individual is newly hired or promoted during a Performance Period and is designated by the Committee to become a Participant for such Performance Period, he or she shall be eligible for a Bonus Credit under the Plan for the Performance Period, prorated for the portion of the Performance Period following the date of his or her designation to become a Participant in the Plan.
|
4.2
|
Termination of Employment
.
Except as otherwise provided in Section 4.3, Section 4.4 or Article V, a Participant will immediately forfeit his or her entire Bonus Bank and any right to any future Bonus Credits upon a termination of employment for any reason.
|
4.3
|
Termination by the Company without Cause/By Participant for Good Reason or Retirement
.
If a Participant’s employment is terminated by the Company without Cause, or the Participant resigns for Good Reason or terminates employment by reason of Retirement, the following rules shall apply:
|
(a)
|
Grandfathered Bonus Bank.
With respect to the Grandfathered Bonus Bank (if any), the Participant will be paid the Applicable Percentage of the Participant's Grandfathered Bonus Bank in four equal installments on each of the first four six-month anniversaries of the Participant's termination of employment. Any remaining portion of the Grandfathered Bonus Bank will be forfeited. Notwithstanding the foregoing, if the Cash Flow Test (as applied by reference to the definition of Cash Flow from Operations in effect on the Plan’s original effective date) is not met for the year immediately preceding the year in which any such termination occurs, the Participant's first installment payment will be delayed and will continue to be held in
|
(b)
|
Additional Bonus Credit and Payments
.
|
(i)
|
The Participant will be credited with (i) a Bonus Credit, if any, for any complete Performance Period during which the Participant participated in the Plan but for which the Participant has not yet received a Bonus Credit pursuant to Section 3.2 as of the date of his or her termination of employment with the Company, and (ii) a Bonus Credit pursuant to Section 3.2 for the year in which the Participant’s termination of employment occurs, to be credited at the same time Bonus Credits for such year are credited pursuant to Section 3.2.
|
(ii)
|
If the Participant’s termination of employment is before August 1 of the year of termination, the amount that would have been payable pursuant to Section 3.4 on August 1 of the year of termination shall be paid in the same manner as specified in Section 3.4 as if the Participant had remained actively employed by the Company (and, for the avoidance of doubt, such payment shall reduce the Grandfathered Bonus Bank).
|
(iii)
|
In addition, to the extent that the Participant’s Prorated Bonus Bank exceeds the amount (if any) payable to the Participant pursuant to Section 4.3(a), then the amount of such excess (if any) will be paid to the Participant in cash in a lump sum on August 1 of the year following the year in which the Participant’s termination of employment occurs, and any remaining portion of the Bonus Bank shall be forfeited. Notwithstanding the foregoing, if the Cash Flow Test is not met for the year immediately preceding the year in which any such termination occurs, the payment described in this Section 4.3(b)(iii) will be delayed and will continue to be held in the Participant's Bonus Bank, without interest, until the next-following August 1, at which time it will be paid to the Participant.
|
4.4
|
Death or Disability
.
Upon a termination of employment by reason of the Participant’s death or Disability, the Participant will be credited with a Bonus Credit, if any, for any Performance Period or portion thereof during which the Participant participated in the Plan but for which the Participant has not yet received a credit through the end of the quarter in which the termination by reason of death or Disability occurs. Subject to Section 4.3(a) in the case of Disability (which payments shall offset the amount payable pursuant to this Section 4.4), the Participant will be paid in a cash lump sum the Participant’s entire Bonus Bank (with the amount of the Bonus Bank determined after the Participant’s Bonus Bank is credited with Bonus Credits pursuant to the immediately preceding sentence) as soon as reasonably practicable following the end of the calendar quarter in which the Participant’s
|
6.1
|
Bonus Credits and Bonus Bank Payments Subject to Compliance with Restrictive Covenants
.
In exchange for the opportunity to participate in the Plan, the Participant will not, during employment with the Company and for a 12-month period after the Participant’s termination of employment (or if applicable law mandates a maximum time that is shorter than 12 months, then for a period of time equal to that shorter maximum period), regardless of the reason for the Participant’s termination, directly or through others, without the prior written consent of the Chief Executive Officer of the Company: (a) render services directly or indirectly to, or become employed by, any Competing Organization (as defined in this Article VI) to the extent such services or employment involves the development, manufacture, marketing, advertising, sale or servicing of any product, process, system or service which is the same or similar to, or competes with, a product, process, system or service manufactured, sold, serviced or otherwise provided by the Company, its subsidiaries or affiliates, to its customers and upon which the Participant worked or in which the Participant participated during the last two years of employment; (b) directly or indirectly
|
6.2
|
Competing Organization
.
As used in this Article VI, “
Competing Organization
” means an organization identified as a Competing Organization by the Chief Executive Officer of the Company for the year in which Participant’s employment with the Company terminates, and any other person or organization that is engaged in or about to become engaged in research on or development, production, marketing, leasing, selling or servicing of a product, process, system or service which is the same or similar to or competes with a product, process, system or service manufactured, sold, serviced or otherwise provided by the Company to its customers. The list of Competing Organizations identified by the Chief Executive Officer is maintained by the Company’s Law Department.
|
7.1
|
Withholding Taxes
.
The Company shall have the right to make payment of Bonus Credits net of any applicable federal, state and local taxes required to be withheld, or to require the Participant to pay such withholding taxes. If the Participant fails to make such tax payments as required, the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such withholding obligations.
|
7.2
|
Nontransferability
.
No Bonus Credit may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, including assignment pursuant to a domestic relations order, during the time in which the requirement of continued employment or attainment of performance objectives has not been achieved. Each Bonus Credit shall be paid during the Participant’s lifetime only to the Participant, or, if permissible under applicable law, to the Participant’s legal representatives; provided, however, that a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and to receive any amounts payable under the Plan in the event of such Participant’s death. No Bonus Credit shall, prior to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, or torts of the Participant.
|
7.3
|
Administration
.
The Committee shall administer the Plan, interpret the terms of the Plan, amend and rescind rules relating to the Plan, and determine the rights and obligations of Participants under the Plan. The Committee may delegate any of its authority as it solely determines and for all purposes of the Plan such delegate shall be deemed to be the “Committee” for all purposes of the Plan. In administering the Plan, the Committee may at its option employ compensation consultants, accountants and counsel and other persons to assist or render advice to the Committee, all at the expense of the Company. Any determinations made by the Committee under the Plan shall be final, binding and conclusive on the Company, its affiliates, subsidiaries and their respective stockholders and each Participant in the Plan for all purposes. The provisions of the Plan are intended to ensure that all amounts paid hereunder qualify for the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code, and the Plan shall be interpreted and operated consistent with that intention.
|
7.4
|
Severability
.
If any provision of the Plan is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan, such provision will be stricken as to such jurisdiction, and the remainder of the Plan shall remain in full force and effect.
|
7.5
|
No Fund Created
.
Bonuses shall be paid from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure payment. Neither the Plan nor any Bonus Credit shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive a Bonus, such right shall be no greater than the right of any unsecured general creditor of the Company. For the avoidance of doubt, the Bonus Bank shall in no event be eligible to earn interest.
|
7.6
|
Employment at Will
.
Neither the adoption of the Plan, eligibility of any person to participate, nor payment of an Bonus Credit to a Participant shall be construed to confer upon any person a right to be continued in the employ of the Company. The Company expressly reserves the right to discharge any Participant whenever in the sole discretion of the Company its interest may so require.
|
7.7
|
Amendment or Termination of the Plan
.
The Committee reserves the right to amend, modify, suspend or terminate the Plan at any time,
provided
that no such amendment, modification, suspension or termination shall impair the rights of any Participant with respect to an outstanding Bonus Bank without his or her consent, except for amendments made to cause the Plan to comply with applicable law, stock exchange rules or accounting rules. The Committee may terminate the Plan (including by reason of the Committee’s determination not to designate a Performance Period pursuant to the terms and conditions of
|
7.8
|
Non-Exclusivity of Plan
.
Neither the adoption of the Plan by the Board of Directors nor the submission of the Plan to stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board of Directors of the Company or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, cash or equity-based compensation arrangements, either tied to performance or otherwise.
|
7.9
|
Dispute Resolution
.
Any controversy or claim arising out of or related to this Plan or a Participant’s employment with the Company, its subsidiaries or affiliates, or the termination of that employment, shall be resolved by binding arbitration at the election of either the Participant or the Company; the obligation to arbitrate shall also extend to and encompass any claims that a Participant may have or assert against any Company employees, officers, directors or agents. The arbitration shall be pursuant to the then current rules of the American Arbitration Association and shall be held in New York City for employees residing or having a primary NCR business location in the United States; for employees residing or having a primary NCR business location outside the United States, where permitted by local law the arbitration shall be conducted in the regional headquarters city of the Participant’s NCR business organization pursuant to the rules of a reputable national or international arbitration organization. The arbitration shall be held before a single arbitrator who is an attorney. The arbitrator’s decision and award shall be final and binding and may be entered in any court having jurisdiction. Issues of arbitrability shall be determined in accordance with the U.S. federal substantive and procedural laws relating to arbitration; in all other respects, this Plan shall be governed by the laws of the State of Georgia in the United States, without regard to its conflict-of-laws principles. Each party shall bear its own attorney fees associated with the arbitration; other costs, and the expenses of the arbitration, shall be borne as provided by the rules of the American Arbitration Association. If any portion of this Section 7.9 is held unenforceable, it shall be severed and shall not affect the duty to arbitrate nor any other part of this Section 7.9.
|
7.10
|
Section 409A
.
It is intended that the Plan shall comply with Section 409A of the Code (and any regulations or other guidance issued thereunder) to the extent the Plan is subject thereto,
provided
that the Company shall have no liability for any taxes that may be imposed on the Participant by reason of the application of Section 409A of the Code. For the purposes of the Plan, “termination of employment” means the Participant ceases to be employed by the Company for any reason,
provided
that such cessation of employment constitutes a “separation from service” within the meaning of Section 409A of the Code. Notwithstanding the foregoing provisions of the Plan, in the event that the Participant is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the date of the Participant’s “separation from service” (within the meaning of Section 409A of the Code), amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that would otherwise be payable under the Plan during the six-
|
7.11
|
Compensation Recovery Policy
.
Bonuses, Bonus Credits and Bonus Banks shall constitute “Covered Incentive Compensation” subject to the terms of the Company’s Compensation Recovery Policy, as the same may be in effect from time to time (the “
Compensation Recovery Policy
”). Accordingly, notwithstanding any other provision of the Plan to the contrary, a Participant may be required to forfeit or repay any or all of the Participant’s Bonuses, Bonus Credits and Bonus Bank pursuant to the terms of the Compensation Recovery Policy. Further, the Company may, to the extent permitted by law, enforce any repayment obligation pursuant to the Compensation Recovery Policy by reducing any amounts that may be owing from time-to-time by the Company to the Participant, whether as wages, severance, vacation pay or in the form of any other benefit or for any other reason, subject to Section 409A of the Code.
|
7.12
|
Overpayment
.
In the event of the overpayment to or wrongful receipt of any amounts by a participant pursuant to this Plan, the Plan and the Company shall be entitled to recovery of such funds by remedies including, without limitation, the equitable remedy of constructive trust.
|
7.13
|
Successor to Company
.
This Plan shall bind any successor of or to the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Plan if no succession had taken place. The term “Company,” as used in this Plan, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by this Plan.
|
|
NCR CORPORATION
|
|
|
|
By:
/s/ Andrea L. Ledford
|
|
Andrea L. Ledford
|
|
SVP, Corporate Services and
|
|
Chief Human Resources Officer
|
Name of Grantee
|
Soc. Sec. #
|
Grant Date
|
No.
of Restricted Stock Units
|
1.
|
The Stock Units will vest during the one (1) year period beginning on the date upon which you were granted the Stock Units (the “Grant Date”), in four (4) equal quarterly installments commencing three (3) months after the Grant Date, provided that you continuously serve as a Director of NCR until each quarterly vesting date. Notwithstanding the foregoing, if the Grant Date of your Stock Units is the date of an Annual Meeting of Stockholders, then, the fourth quarterly vesting will occur only if you continue to serve as a Director until the earlier of (a) the next Annual Meeting of Stockholders following the Grant Date, or (b) the first (1
st
) anniversary of the Grant Date.
|
2.
|
The Stock Units will become fully vested if, prior to the one (1) year anniversary of the Grant Date, you die at a time while serving as a Director of NCR.
|
3.
|
The vesting schedule will accelerate and the Stock Units will become fully vested if (1) a Change in Control (as defined in Section 10(b) of the Plan) occurs, and (2) you cease to serve as a Director of NCR within twenty-four (24) months of the effective date of the Change in Control for any reason other than your willful engaging in illegal conduct or gross misconduct, as determined by the affirmative vote of a majority of the entire membership of the Board of Directors of NCR. In the event that Stock Units become vested due to your cessation of service as a Director of NCR pursuant to this Section 3, to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), such Stock Units shall be paid upon your "separation from service" within the meaning of Section 409A of the Code; provided, however, that if you are a "specified employee" as determined under NCR's policy for determining specified employees on the date of separation from service, such Stock Units shall be paid, to the extent required to comply with Section 409A of the Code, on the first business day after the date that is six months following your "separation from service" within the meaning of Section 409A of the Code.
|
4.
|
Except as otherwise provided pursuant to (1) a deferral election in effect under Article IV of the Program or (2) Section 3 of this Statement, when vested, the Stock Units will be paid to you in shares of NCR common stock, such that one Stock Unit equals one share of NCR common stock.
|
5.
|
Any cash dividends declared before the vesting dates on the shares underlying the Stock Units shall not be paid currently, but shall be converted to additional Stock Units, based on the fair market value of NCR common stock on the date the dividend is declared. Any Stock Units resulting from such conversion will be considered Stock Units for purposes of this Statement and will be subject to all of the terms, conditions and restrictions set forth herein.
|
6.
|
You may designate one or more beneficiaries to receive all or part of any shares underlying the Stock Units to be distributed in case of your death, and you may change or revoke such designation at any time. In the event of your death, any shares underlying the Stock Units distributable hereunder that are subject to such a designation will be distributed to such beneficiary or beneficiaries in accordance with this Statement. Any other shares underlying the Stock Units not designated by you will be distributable to your estate. If there shall be any question as to the legal right of any beneficiary to receive a distribution hereunder, the shares underlying the Stock Units in question may be transferred to your estate, in which event NCR will have no further liability to anyone with respect to such shares.
|
7.
|
The terms of this award of Stock Units as evidenced by this Statement may be amended by the NCR Board of Directors or the Compensation and Human Resource Committee of the NCR Board of Directors, provided that no such amendment shall impair your rights hereunder without your consent.
|
8.
|
In the event of a conflict between the terms and conditions of this Statement and the terms and conditions of the Plan, the terms and conditions of the Plan shall prevail.
|
Lump Sum Payment
|
A one-time US$16,000 net lump sum payment will be provided to cover: temporary living, final move trip meals and other miscellaneous expenses.
|
Household Goods
|
Weichert Relocation will coordinate the shipment of your household goods (packing, loading and unloading). Household goods are defined as those articles normally part of a family’s possessions such as furniture and clothing. Certain items such as high value, large collections or excessively heavy items may not be covered and should be discussed with your relocation counselor. The allowance for household goods shipment is based on the family size relocating. For a single employee or employee plus spouse the allowance is a D container size shipped via air plus a 20’ container shipped by sea. For an employee plus family the allowance is an LDN container size shipped by air plus a 40’ container shipped by sea. Other provisions include: in transit insurance, and storage of household goods for up to 60 days.
|
Immigration Support
|
Immigration support for work permit/visa applications for employee and eligible accompanying dependents will be provided through NCR’s preferred immigration consultant(s).
|
Home Sale Expenses
|
Reimbursement for customary closing costs, legal fees, and commission which are standard and customary for each market. To be eligible for assistance, you must use the Weichert Relocation broker program and select one of the referred real estate agents.
|
Destination Home Purchase Assistance
|
You will receive 2% of new home loan amount, reasonable and customary closing costs up to U.S. $12,000. Closing cost reimbursements are typically subject to federal, state and local taxes. Loan origination fees/discount points may be deductible on your individual tax return.
|
Final Move Expenses
|
Final move expenses covered include: airfare from home country, via most direct route, to the relocating destination. In addition, lodging en route for layover and transportation expenses to/from the airport.
|
This is a summary of the relocation plan being offered. If a provision described in this summary differs from the provision of the applicable plan document, the plan document prevails.
|
Date:
|
July 31, 2015
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board, Chief Executive Officer and President
|
Date:
|
July 31, 2015
|
|
/s/ Robert Fishman
|
|
|
|
Robert Fishman
|
|
|
|
Senior Vice President and Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Dated:
|
July 31, 2015
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board, Chief Executive Officer and President
|
Dated:
|
July 31, 2015
|
|
/s/ Robert Fishman
|
|
|
|
Robert Fishman
|
|
|
|
Senior Vice President and Chief Financial Officer
|