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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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||||||||||||
2016
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2015
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2016
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2015
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|||||||||
Product revenue
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$
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676
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|
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$
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703
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$
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1,224
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$
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1,307
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Service revenue
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944
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901
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1,840
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1,773
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||||
Total revenue
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1,620
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1,604
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3,064
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3,080
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||||
Cost of products
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517
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544
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959
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1,027
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||||
Cost of services
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657
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914
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1,279
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1,517
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|
||||
Selling, general and administrative expenses
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229
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|
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339
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|
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453
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|
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564
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||||
Research and development expenses
|
50
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|
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67
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|
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103
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|
|
122
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|
||||
Restructuring-related charges
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4
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|
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6
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6
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21
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||||
Total operating expenses
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1,457
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1,870
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2,800
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3,251
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||||
Income (loss) from operations
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163
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|
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(266)
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264
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(171
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)
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||||
Interest expense
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(43
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)
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(45
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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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(15
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)
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—
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(25
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)
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(7
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)
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||||
Income (loss) from continuing operations before income taxes
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105
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(311)
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150
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(267
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)
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||||
Income tax expense
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31
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32
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|
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44
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34
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|
||||
Income (loss) from continuing operations
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74
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(343
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)
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106
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(301
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)
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||||
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 income (loss)
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74
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(343)
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106
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(301
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)
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||||
Net (loss) income attributable to noncontrolling interests
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(2
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)
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1
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(2
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)
|
|
3
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||||
Net income (loss) attributable to NCR
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$
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76
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$
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(344
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)
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$
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108
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$
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(304
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)
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Amounts attributable to NCR common stockholders:
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||||||||
Income (loss) from continuing operations
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$
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76
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$
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(344
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)
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$
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108
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$
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(304
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)
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Series A convertible preferred stock dividends
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(13
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)
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—
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(24
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)
|
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—
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||||
Income (loss) from continuing operations attributable to NCR common stockholders
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63
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(344
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)
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84
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(304
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)
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||||
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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—
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||||
Net income (loss) attributable to NCR common stockholders
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$
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63
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$
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(344
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)
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$
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84
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$
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(304
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)
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Income (loss) per share attributable to NCR common stockholders:
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||||||||
Income (loss) per common share from continuing operations
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Basic
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$
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0.51
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$
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(2.03
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)
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$
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0.66
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$
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(1.80
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)
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Diluted
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$
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0.49
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$
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(2.03
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)
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$
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0.65
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$
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(1.80
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)
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Net income (loss) per common share
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Basic
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$
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0.51
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$
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(2.03
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)
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$
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0.66
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$
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(1.80
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)
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Diluted
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$
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0.49
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$
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(2.03
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)
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$
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0.65
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$
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(1.80
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)
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Weighted average common shares outstanding
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Basic
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123.8
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169.6
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127.1
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169.3
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Diluted
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154.5
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169.6
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129.6
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169.3
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In millions
|
Three months ended June 30
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Six months ended June 30
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||||||||||||
2016
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2015
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2016
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2015
|
|||||||||
Net income (loss)
|
$
|
74
|
|
|
$
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(343
|
)
|
|
$
|
106
|
|
|
$
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(301
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
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|
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||||||||
Currency translation adjustments
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(18
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)
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26
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|
|
(26
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)
|
|
(2
|
)
|
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Derivatives
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Unrealized gain (loss) on derivatives
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2
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(2
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)
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—
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|
7
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|
||||
Losses (gains) on derivatives recognized during the period
|
1
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(1
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)
|
|
2
|
|
|
(2
|
)
|
||||
Less income tax (expense) benefit
|
(1
|
)
|
|
1
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|
|
—
|
|
|
(1
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)
|
||||
Employee benefit plans
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service benefit
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(5
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)
|
|
(5
|
)
|
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(10
|
)
|
|
(11
|
)
|
||||
Amortization of actuarial (benefit) loss
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
||||
Less income tax benefit
|
2
|
|
|
2
|
|
|
3
|
|
|
4
|
|
||||
Other comprehensive (loss) income
|
(20
|
)
|
|
21
|
|
|
(32
|
)
|
|
(4
|
)
|
||||
Total comprehensive income (loss)
|
54
|
|
|
(322
|
)
|
|
74
|
|
|
(305
|
)
|
||||
Less comprehensive income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
(2
|
)
|
|
1
|
|
|
(2
|
)
|
|
3
|
|
||||
Currency translation adjustments
|
(2
|
)
|
|
—
|
|
|
(6
|
)
|
|
(3
|
)
|
||||
Amounts attributable to noncontrolling interests
|
(4
|
)
|
|
1
|
|
|
(8
|
)
|
|
—
|
|
||||
Comprehensive income (loss) attributable to NCR
|
$
|
58
|
|
|
$
|
(323
|
)
|
|
$
|
82
|
|
|
(305
|
)
|
In millions, except per share amounts
|
June 30, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
332
|
|
|
$
|
328
|
|
Accounts receivable, net
|
1,362
|
|
|
1,251
|
|
||
Inventories
|
765
|
|
|
643
|
|
||
Other current assets
|
294
|
|
|
327
|
|
||
Total current assets
|
2,753
|
|
|
2,549
|
|
||
Property, plant and equipment, net
|
290
|
|
|
322
|
|
||
Goodwill
|
2,736
|
|
|
2,733
|
|
||
Intangibles, net
|
734
|
|
|
798
|
|
||
Prepaid pension cost
|
130
|
|
|
130
|
|
||
Deferred income taxes
|
564
|
|
|
582
|
|
||
Other assets
|
544
|
|
|
521
|
|
||
Total assets
|
$
|
7,751
|
|
|
$
|
7,635
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
259
|
|
|
$
|
13
|
|
Accounts payable
|
676
|
|
|
657
|
|
||
Payroll and benefits liabilities
|
191
|
|
|
189
|
|
||
Deferred service revenue and customer deposits
|
535
|
|
|
476
|
|
||
Other current liabilities
|
356
|
|
|
446
|
|
||
Total current liabilities
|
2,017
|
|
|
1,781
|
|
||
Long-term debt
|
3,198
|
|
|
3,239
|
|
||
Pension and indemnity plan liabilities
|
702
|
|
|
696
|
|
||
Postretirement and postemployment benefits liabilities
|
128
|
|
|
133
|
|
||
Income tax accruals
|
174
|
|
|
167
|
|
||
Other liabilities
|
141
|
|
|
79
|
|
||
Total liabilities
|
6,360
|
|
|
6,095
|
|
||
Commitments and Contingencies (Note 8)
|
|
|
|
||||
Redeemable noncontrolling interest
|
9
|
|
|
16
|
|
||
Series A convertible preferred stock: par value $0.01 per share, 3.0 shares authorized, 0.8 shares issued and outstanding as of June 30, 2016 and December 31, 2015; redemption amount and liquidation preference of $846 and $824 as of June 30, 2016 and December 31, 2015, respectively
|
822
|
|
|
798
|
|||
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, 2016 and December 31, 2015
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 123.8 and 133.0 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
—
|
|
|
—
|
|
||
Retained earnings
|
730
|
|
|
869
|
|
||
Accumulated other comprehensive loss
|
(176
|
)
|
|
(150)
|
|
||
Total NCR stockholders’ equity
|
555
|
|
|
720
|
|
||
Noncontrolling interests in subsidiaries
|
5
|
|
|
6
|
|
||
Total stockholders’ equity
|
560
|
|
|
726
|
|
||
Total liabilities and stockholders’ equity
|
$
|
7,751
|
|
|
$
|
7,635
|
|
In millions
|
Six months ended June 30
|
||||||
2016
|
|
2015
|
|||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
106
|
|
|
$
|
(301
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Loss (income) from discontinued operations
|
—
|
|
|
—
|
|
||
Depreciation and amortization
|
175
|
|
|
152
|
|
||
Stock-based compensation expense
|
29
|
|
|
20
|
|
||
Deferred income taxes
|
20
|
|
|
15
|
|
||
Gain on sale of property, plant and equipment and other assets
|
—
|
|
|
(1
|
)
|
||
Loss on divestiture
|
1
|
|
|
—
|
|
||
Impairment of long-lived and other assets
|
2
|
|
|
16
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
(121
|
)
|
|
(51
|
)
|
||
Inventories
|
(123
|
)
|
|
(54
|
)
|
||
Current payables and accrued expenses
|
4
|
|
|
(25
|
)
|
||
Deferred service revenue and customer deposits
|
131
|
|
|
89
|
|
||
Employee benefit plans
|
(26
|
)
|
|
386
|
|
||
Other assets and liabilities
|
(54
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
144
|
|
|
246
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(24
|
)
|
|
(31
|
)
|
||
Additions to capitalized software
|
(74
|
)
|
|
(79
|
)
|
||
Proceeds from divestiture
|
47
|
|
|
—
|
|
||
Other investing activities, net
|
(8
|
)
|
|
(3
|
)
|
||
Net cash used in investing activities
|
(59
|
)
|
|
(113
|
)
|
||
Financing activities
|
|
|
|
||||
Short term borrowings, net
|
1
|
|
|
28
|
|
||
Payments on term credit facilities
|
(73
|
)
|
|
(116
|
)
|
||
Payments on revolving credit facilities
|
(431
|
)
|
|
(608
|
)
|
||
Borrowings on revolving credit facilities
|
706
|
|
|
512
|
|
||
Debt issuance costs
|
(8
|
)
|
|
—
|
|
||
Repurchases of Company common stock
|
(250
|
)
|
|
—
|
|
||
Proceeds from employee stock plans
|
6
|
|
|
11
|
|
||
Tax withholding payments on behalf of employees
|
(7
|
)
|
|
(10
|
)
|
||
Net cash used in financing activities
|
(56
|
)
|
|
(183
|
)
|
||
Cash flows from discontinued operations
|
|
|
|
||||
Net cash used in operating activities
|
(20
|
)
|
|
(17
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
|
(19
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
4
|
|
|
(86
|
)
|
||
Cash and cash equivalents at beginning of period
|
328
|
|
|
511
|
|
||
Cash and cash equivalents at end of period
|
$
|
332
|
|
|
$
|
425
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
June 30, 2016
|
||||||||||||||||||||||||||
In millions
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
|
Additions
|
|
Impairment
|
|
Other
|
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
||||||||||||||||||
Software
|
$
|
1,936
|
|
|
$
|
(7
|
)
|
|
$
|
1,929
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
1,939
|
|
|
$
|
(7
|
)
|
|
$
|
1,932
|
|
Services
|
658
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||||||
Hardware
|
162
|
|
|
(16
|
)
|
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
(16
|
)
|
|
146
|
|
|||||||||
Total goodwill
|
$
|
2,756
|
|
|
$
|
(23
|
)
|
|
$
|
2,733
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
2,759
|
|
|
$
|
(23
|
)
|
|
$
|
2,736
|
|
|
Amortization
Period
(in Years)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
In millions
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|||||||||
Identifiable intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||
Reseller & customer relationships
|
1 - 20
|
|
$
|
659
|
|
|
$
|
(110
|
)
|
|
$
|
659
|
|
|
$
|
(92
|
)
|
Intellectual property
|
2 - 8
|
|
392
|
|
|
(275
|
)
|
|
392
|
|
|
(244
|
)
|
||||
Customer contracts
|
8
|
|
89
|
|
|
(56
|
)
|
|
89
|
|
|
(46
|
)
|
||||
Tradenames
|
2 - 10
|
|
73
|
|
|
(38
|
)
|
|
73
|
|
|
(33
|
)
|
||||
Total identifiable intangible assets
|
|
|
$
|
1,213
|
|
|
$
|
(479
|
)
|
|
$
|
1,213
|
|
|
$
|
(415
|
)
|
In millions
|
Three months ended June 30, 2016
|
|
Six months ended June 30, 2016
|
|
Remainder of 2016 (estimated)
|
||||||
Amortization expense
|
$
|
32
|
|
|
$
|
64
|
|
|
$
|
61
|
|
|
|
For the years ended December 31 (estimated)
|
||||||||||||||||||
In millions
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||
Amortization expense
|
|
$
|
116
|
|
|
$
|
85
|
|
|
$
|
75
|
|
|
$
|
57
|
|
|
$
|
49
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|||||||||
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)
|
$
|
45
|
|
|
3.11%
|
|
$
|
—
|
|
|
|
|
Trade Receivables Securitization Facility
(1)
|
200
|
|
|
1.12%
|
|
—
|
|
|
|
|||
Other
(1)
|
14
|
|
|
7.41%
|
|
13
|
|
|
6.34%
|
|||
|
Total short-term borrowings
|
$
|
259
|
|
|
|
|
$
|
13
|
|
|
|
Long-Term Debt
|
|
|
|
|
|
|
|
|||||
Senior Secured Credit Facility:
|
|
|
|
|
|
|
|
|||||
|
Term loan facility
(1)
|
$
|
844
|
|
|
3.11%
|
|
$
|
956
|
|
|
2.95%
|
|
Revolving credit facility
(1)
|
175
|
|
|
2.72%
|
|
100
|
|
|
2.61%
|
||
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
(1)
|
11
|
|
|
7.09%
|
|
17
|
|
|
7.16%
|
|||
Deferred Financing Fees
|
(32
|
)
|
|
|
|
(34
|
)
|
|
|
|||
|
Total long-term debt
|
$
|
3,198
|
|
|
|
|
$
|
3,239
|
|
|
|
(1)
|
Interest rates are weighted average interest rates as of
June 30, 2016
and
December 31, 2015
. The Senior Secured Credit Facility incorporates the impact of the interest rate swap agreement described in
Note 11, "Derivatives and Hedging Instruments."
|
•
|
a consolidated leverage ratio on the last day of any fiscal quarter, not to exceed (i) in the case of any fiscal quarter ending on or prior to December 31, 2017, (a) the sum of
4.25
and an amount (not to exceed
0.50
) to reflect debt used to reduce NCR’s unfunded pension liabilities to (b)
1.00
, (ii) in the case of any fiscal quarter ending after December 31, 2017 and on or prior to December 31, 2019, (a) the sum of
4.00
and an amount (not to exceed
0.50
) to reflect debt used to reduce NCR’s unfunded pension liabilities to (b)
1.00
, and (iii) in the case of any fiscal quarter ending after December 31, 2019, the sum of (a)
3.75
and an amount (not to exceed 0.50) to reflect debt used to reduce NCR’s unfunded pension liabilities to (b)
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
.
|
|
|
|
|
|
|
For the years ended December 31
|
|
|
||||||||||||||||||||
In millions
|
|
Total
|
|
July 1 2016 through December 31, 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
Debt maturities
|
|
$
|
3,489
|
|
|
$
|
226
|
|
|
$
|
50
|
|
|
$
|
63
|
|
|
$
|
85
|
|
|
$
|
95
|
|
|
$
|
2,970
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Severance and other employee-related costs
|
|
|
|
|
|
|
|
||||||||
ASC 712 charges included in restructuring-related charges
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
ASC 420 charges included in restructuring-related charges
|
(2
|
)
|
|
4
|
|
|
(2
|
)
|
|
6
|
|
||||
Inventory-related charges
|
|
|
|
|
|
|
|
||||||||
Charges included in cost of products
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Charges included in cost of services
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Asset-related charges
|
|
|
|
|
|
|
|
||||||||
External and internal use software impairment charges
included in restructuring-related charges
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
Impairment of long-lived assets included in restructuring-
related charges
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Other exit costs
|
|
|
|
|
|
|
|
||||||||
Other exit costs included in restructuring-related charges
|
3
|
|
|
4
|
|
|
4
|
|
|
5
|
|
||||
Total restructuring charges
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
24
|
|
In millions
|
2016
|
|
2015
|
||||
Employee Severance and Other Exit Costs
|
|
|
|
||||
Beginning balance as of January 1
|
$
|
20
|
|
|
$
|
60
|
|
Cost recognized during the period
|
6
|
|
|
5
|
|
||
Change in estimated payments
|
(2
|
)
|
|
—
|
|
||
Utilization
|
(16
|
)
|
|
(30
|
)
|
||
Foreign currency translation adjustments
|
—
|
|
|
(2
|
)
|
||
Ending balance as of June 30
|
$
|
8
|
|
|
$
|
33
|
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Restricted stock units
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
29
|
|
|
$
|
20
|
|
Tax benefit
|
(4)
|
|
|
(3)
|
|
|
(8
|
)
|
|
(6
|
)
|
||||
Total stock-based compensation (net of tax)
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
21
|
|
|
$
|
14
|
|
|
Six months ended June 30, 2016
|
Expected volatility
|
33.9%
|
Expected dividend yield
|
—
|
Risk-free rate
|
1.21%
|
Weighted average fair value per share
|
$14.93
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
Net service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Interest cost
|
22
|
|
|
22
|
|
|
7
|
|
|
13
|
|
|
29
|
|
|
35
|
|
||||||
Expected return on plan assets
|
(18
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|
(18
|
)
|
|
(27
|
)
|
|
(36
|
)
|
||||||
Curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
427
|
|
|
—
|
|
|
427
|
|
||||||
Net periodic benefit cost (income)
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
422
|
|
|
$
|
4
|
|
|
$
|
426
|
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
Net service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
6
|
|
Interest cost
|
45
|
|
|
44
|
|
|
14
|
|
|
27
|
|
|
59
|
|
|
71
|
|
||||||
Expected return on plan assets
|
(36
|
)
|
|
(36
|
)
|
|
(18
|
)
|
|
(39
|
)
|
|
(54
|
)
|
|
(75
|
)
|
||||||
Curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
427
|
|
|
—
|
|
|
427
|
|
||||||
Net periodic benefit cost (income)
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
418
|
|
|
$
|
9
|
|
|
$
|
426
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(9
|
)
|
||||
Actuarial loss
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Net postretirement benefit
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net service cost
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Interest cost
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
Actuarial gain
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Net benefit cost
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
Restructuring severance cost
|
2
|
|
|
(3
|
)
|
|
2
|
|
|
(5
|
)
|
||||
Total postemployment cost
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
3
|
|
In millions
|
2016
|
|
2015
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance as of January 1
|
$
|
24
|
|
|
$
|
22
|
|
Accruals for warranties issued
|
18
|
|
|
19
|
|
||
Settlements (in cash or in kind)
|
(20
|
)
|
|
(18
|
)
|
||
Ending balance as of June 30
|
$
|
22
|
|
|
$
|
23
|
|
In millions, except per share amounts
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
76
|
|
|
$
|
(344
|
)
|
|
$
|
108
|
|
|
$
|
(304
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to NCR
|
$
|
76
|
|
|
$
|
(344
|
)
|
|
$
|
108
|
|
|
$
|
(304
|
)
|
Series A convertible preferred stock dividends
|
(13
|
)
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Net income (loss) attributable to NCR common stockholders
|
$
|
63
|
|
|
$
|
(344
|
)
|
|
$
|
84
|
|
|
$
|
(304
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of shares outstanding
|
123.8
|
|
|
169.6
|
|
|
127.1
|
|
|
169.3
|
|
||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
$
|
0.51
|
|
|
$
|
(2.03
|
)
|
|
$
|
0.66
|
|
|
$
|
(1.80
|
)
|
From discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total basic earnings per share
|
$
|
0.51
|
|
|
$
|
(2.03
|
)
|
|
$
|
0.66
|
|
|
$
|
(1.80
|
)
|
In millions, except per share amounts
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
76
|
|
|
$
|
(344
|
)
|
|
$
|
108
|
|
|
$
|
(304
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to NCR
|
$
|
76
|
|
|
$
|
(344
|
)
|
|
$
|
108
|
|
|
$
|
(304
|
)
|
Series A convertible preferred stock dividends
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Net income (loss) attributable to NCR common stockholders
|
$
|
76
|
|
|
$
|
(344
|
)
|
|
$
|
84
|
|
|
$
|
(304
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of shares outstanding
|
123.8
|
|
|
169.6
|
|
|
127.1
|
|
|
169.3
|
|
||||
Dilutive effect of as-if Series A Convertible Preferred Stock
|
28.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Dilutive effect of employee stock options and restricted stock units
|
2.7
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
||||
Diluted weighted average number of shares outstanding
|
154.5
|
|
|
169.6
|
|
|
129.6
|
|
|
169.3
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
$
|
0.49
|
|
|
$
|
(2.03
|
)
|
|
$
|
0.65
|
|
|
$
|
(1.80
|
)
|
From discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total diluted earnings per share
|
$
|
0.49
|
|
|
$
|
(2.03
|
)
|
|
$
|
0.65
|
|
|
$
|
(1.80
|
)
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
June 30, 2016
|
||||||||||||||||||
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
|
|
$
|
354
|
|
|
$
|
1
|
|
Foreign exchange contracts
|
Other current assets
|
|
29
|
|
|
3
|
|
|
Other current liabilities
|
|
81
|
|
|
2
|
|
||||
Total derivatives designated as hedging instruments
|
|
|
|
|
$
|
3
|
|
|
|
|
|
|
$
|
3
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
162
|
|
|
$
|
1
|
|
|
Other current liabilities
|
|
$
|
182
|
|
|
$
|
1
|
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
||||||
Total derivatives
|
|
|
|
|
$
|
4
|
|
|
|
|
|
|
$
|
4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
December 31, 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
|
|
$
|
380
|
|
|
$
|
3
|
|
Foreign exchange contracts
|
Other current assets
|
|
53
|
|
|
2
|
|
|
Other current liabilities
|
|
105
|
|
|
1
|
|
||||
Total derivatives designated as hedging instruments
|
|
|
|
|
$
|
2
|
|
|
|
|
|
|
$
|
4
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
191
|
|
|
$
|
1
|
|
|
Other current liabilities
|
|
$
|
204
|
|
|
$
|
1
|
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
||||||
Total derivatives
|
|
|
|
|
$
|
3
|
|
|
|
|
|
|
$
|
5
|
|
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, 2016
|
|
For the three months ended June 30, 2015
|
|
Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the three months ended June 30, 2016
|
|
For the three months ended June 30, 2015
|
|
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, 2016
|
|
For the three months ended June 30, 2015
|
||||||||||||
Interest rate swap
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
Cost of products
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
Other (expense), 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, 2016
|
|
For the six months ended June 30, 2015
|
|
Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the six months ended June 30, 2016
|
|
For the six months ended June 30, 2015
|
|
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, 2016
|
|
For the six months ended June 30, 2015
|
||||||||||||
Interest rate swap
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Interest expense
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
$
|
1
|
|
|
$
|
8
|
|
|
Cost of products
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
Other (expense), net
|
|
$
|
—
|
|
|
$
|
—
|
|
In millions
|
|
|
Amount of Gain (Loss) Recognized in the
Condensed Consolidated Statement of Operations
|
||||||||||||||
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
Derivatives not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in the Condensed Consolidated Statement of Operations
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Foreign exchange contracts
|
Other (expense), net
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
|
|
Fair Value Measurements at June 30, 2016 Using
|
||||||||||||
In millions
|
June 30, 2016
|
|
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)
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
(2)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
(3)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Foreign exchange contracts
(3)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at December 31, 2015 Using
|
||||||||||||
In millions
|
December 31, 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)
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
(2)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
(3)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Foreign exchange contracts
(3)
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
•
|
Software
- Our software solutions include our automated teller machine (ATM) software application suite, cash management and video banking software, check and image processing software and customer-facing digital banking solutions. We offer an omni-channel retail software platform with a comprehensive suite of software applications, including point-of-sale (POS) software, and a suite of software applications for hospitality POS operations, and kitchen and restaurant management. We also offer other cloud (or software-as-a-service) solutions, hosted services, and online, mobile and transactional services and applications such as bill pay. Additionally, we provide ongoing software support and maintenance services, as well as consulting and implementation services for our software solutions.
|
•
|
Services
- Our service solutions include maintenance and repair services for our hardware solutions as well as for third party products, and support services for our hardware solutions. Additionally, we provide managed services as well as other services, including site assessment and preparation, staging, installation and implementation and systems management services.
|
•
|
Hardware
- Our hardware solutions include a comprehensive line of ATMs, self-checkout (SCO), and mobile and other point of sale (POS) products. Additionally, we also offer printer consumables.
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Revenue by segment
|
|
|
|
|
|
|
|
||||||||
Software
|
$
|
452
|
|
|
$
|
440
|
|
|
$
|
871
|
|
|
$
|
854
|
|
Services
|
574
|
|
|
542
|
|
|
1,117
|
|
|
1,065
|
|
||||
Hardware
|
594
|
|
|
622
|
|
|
1,076
|
|
|
1,161
|
|
||||
Consolidated revenue
|
1,620
|
|
|
1,604
|
|
|
3,064
|
|
|
3,080
|
|
||||
Operating income by segment
|
|
|
|
|
|
|
|
||||||||
Software
|
144
|
|
|
130
|
|
|
259
|
|
|
247
|
|
||||
Services
|
49
|
|
|
48
|
|
|
83
|
|
|
84
|
|
||||
Hardware
(1)
|
14
|
|
|
22
|
|
|
4
|
|
|
15
|
|
||||
Subtotal - segment operating income
|
207
|
|
|
200
|
|
|
346
|
|
|
346
|
|
||||
Other adjustments
(2)
|
44
|
|
|
466
|
|
|
82
|
|
|
517
|
|
||||
Income from operations
|
$
|
163
|
|
|
$
|
(266
|
)
|
|
$
|
264
|
|
|
$
|
(171
|
)
|
(1)
|
On May 27, 2016, NCR completed the first phase of the sale of its Interactive Printer Solutions (IPS) business to Atlas Holdings LLC. Completion of the final phase, covering the Middle East and Africa (MEA) operations of IPS, is anticipated to occur in the third quarter of 2016. Accordingly, the revenue and operating income results exclude the results of the IPS operations from May 27, 2016 through the end of the second quarter of
2016
; except for the IPS MEA operations which will be included until the final phase is completed.
|
(2)
|
The following table presents the other adjustments for NCR:
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Restructuring / transformation costs
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
15
|
|
|
$
|
24
|
|
Acquisition-related amortization of intangible assets
|
32
|
|
|
31
|
|
|
64
|
|
|
63
|
|
||||
Acquisition-related costs
|
1
|
|
|
3
|
|
|
3
|
|
|
5
|
|
||||
OFAC and FCPA investigations
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Pension mark-to-market adjustments
|
—
|
|
|
424
|
|
|
—
|
|
|
424
|
|
||||
Total other adjustments
|
$
|
44
|
|
|
$
|
466
|
|
|
$
|
82
|
|
|
$
|
517
|
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Product revenue
|
$
|
676
|
|
|
$
|
703
|
|
|
1,224
|
|
|
1,307
|
|
||
Professional services and installation services revenue
|
254
|
|
|
226
|
|
|
463
|
|
|
434
|
|
||||
Recurring revenue, including maintenance and cloud revenue
|
690
|
|
|
675
|
|
|
1,377
|
|
|
1,339
|
|
||||
Total revenue
|
$
|
1,620
|
|
|
$
|
1,604
|
|
|
$
|
3,064
|
|
|
$
|
3,080
|
|
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, 2015
|
$
|
(172
|
)
|
$
|
23
|
|
$
|
(1
|
)
|
$
|
(150
|
)
|
Other comprehensive (loss) before reclassifications
|
(20
|
)
|
—
|
|
—
|
|
(20
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
(8
|
)
|
2
|
|
(6
|
)
|
||||
Net current period other comprehensive (loss) income
|
(20
|
)
|
(8
|
)
|
2
|
|
(26
|
)
|
||||
Balance as of June 30, 2016
|
$
|
(192
|
)
|
$
|
15
|
|
$
|
1
|
|
$
|
(176
|
)
|
|
|
For the three months ended June 30, 2016
|
||||||||||||
|
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
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
Selling, general and administrative expenses
|
(1
|
)
|
(2
|
)
|
—
|
|
|
(3
|
)
|
||||
|
Research and development expenses
|
—
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
1
|
|
|
1
|
|
||||
|
Total before tax
|
$
|
(1
|
)
|
$
|
(5
|
)
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
Tax expense
|
|
|
|
|
1
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(4
|
)
|
|
|
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 six months ended June 30, 2016
|
||||||||||||
|
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
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
Selling, general and administrative expenses
|
(1
|
)
|
(3
|
)
|
—
|
|
|
(4
|
)
|
||||
|
Research and development expenses
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
||||
|
Interest expense
|
—
|
|
—
|
|
2
|
|
|
2
|
|
||||
|
Total before tax
|
$
|
(1
|
)
|
$
|
(10
|
)
|
$
|
2
|
|
|
$
|
(9
|
)
|
|
Tax expense
|
|
|
|
|
2
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(7
|
)
|
|
|
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
|
)
|
In millions
|
June 30, 2016
|
|
December 31, 2015
|
||||
Accounts receivable
|
|
|
|
||||
Trade
|
$
|
1,358
|
|
|
$
|
1,259
|
|
Other
|
49
|
|
|
39
|
|
||
Accounts receivable, gross
|
1,407
|
|
|
1,298
|
|
||
Less: allowance for doubtful accounts
|
(45
|
)
|
|
(47
|
)
|
||
Total accounts receivable, net
|
$
|
1,362
|
|
|
$
|
1,251
|
|
In millions
|
June 30, 2016
|
|
December 31, 2015
|
||||
Inventories
|
|
|
|
||||
Work in process and raw materials
|
$
|
175
|
|
|
$
|
137
|
|
Finished goods
|
205
|
|
|
129
|
|
||
Service parts
|
385
|
|
|
377
|
|
||
Total inventories
|
$
|
765
|
|
|
$
|
643
|
|
In millions
|
June 30, 2016
|
|
December 31, 2015
|
||||
Other current assets
|
|
|
|
||||
Held for sale assets
|
$
|
11
|
|
|
$
|
89
|
|
Other
|
283
|
|
|
238
|
|
||
Total other current assets
|
$
|
294
|
|
|
$
|
327
|
|
•
|
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, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
315
|
|
|
$
|
39
|
|
|
$
|
428
|
|
|
$
|
(106
|
)
|
|
$
|
676
|
|
Service revenue
|
390
|
|
|
9
|
|
|
545
|
|
|
—
|
|
|
944
|
|
|||||
Total revenue
|
705
|
|
|
48
|
|
|
973
|
|
|
(106
|
)
|
|
1,620
|
|
|||||
Cost of products
|
245
|
|
|
9
|
|
|
369
|
|
|
(106
|
)
|
|
517
|
|
|||||
Cost of services
|
280
|
|
|
3
|
|
|
374
|
|
|
—
|
|
|
657
|
|
|||||
Selling, general and administrative expenses
|
127
|
|
|
1
|
|
|
101
|
|
|
—
|
|
|
229
|
|
|||||
Research and development expenses
|
29
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
50
|
|
|||||
Restructuring-related charges
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Total operating expenses
|
685
|
|
|
13
|
|
|
865
|
|
|
(106
|
)
|
|
1,457
|
|
|||||
Income (loss) from operations
|
20
|
|
|
35
|
|
|
108
|
|
|
—
|
|
|
163
|
|
|||||
Interest expense
|
(41
|
)
|
|
—
|
|
|
(20
|
)
|
|
18
|
|
|
(43
|
)
|
|||||
Other (expense) income, net
|
14
|
|
|
—
|
|
|
(11
|
)
|
|
(18
|
)
|
|
(15
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(7
|
)
|
|
35
|
|
|
77
|
|
|
—
|
|
|
105
|
|
|||||
Income tax expense (benefit)
|
—
|
|
|
20
|
|
|
11
|
|
|
—
|
|
|
31
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(7
|
)
|
|
15
|
|
|
66
|
|
|
—
|
|
|
74
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
83
|
|
|
89
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
76
|
|
|
104
|
|
|
66
|
|
|
(172
|
)
|
|
74
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
76
|
|
|
$
|
104
|
|
|
$
|
66
|
|
|
$
|
(172
|
)
|
|
$
|
74
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss) attributable to NCR
|
$
|
76
|
|
|
$
|
104
|
|
|
$
|
68
|
|
|
$
|
(172
|
)
|
|
$
|
76
|
|
Total comprehensive income (loss)
|
58
|
|
|
70
|
|
|
47
|
|
|
(121
|
)
|
|
54
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
58
|
|
|
$
|
70
|
|
|
$
|
51
|
|
|
$
|
(121
|
)
|
|
$
|
58
|
|
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
|
$
|
314
|
|
|
$
|
27
|
|
|
$
|
485
|
|
|
$
|
(123
|
)
|
|
$
|
703
|
|
Service revenue
|
371
|
|
|
8
|
|
|
522
|
|
|
—
|
|
|
901
|
|
|||||
Total revenue
|
685
|
|
|
35
|
|
|
1,007
|
|
|
(123
|
)
|
|
1,604
|
|
|||||
Cost of products
|
244
|
|
|
9
|
|
|
414
|
|
|
(123
|
)
|
|
544
|
|
|||||
Cost of services
|
262
|
|
|
3
|
|
|
649
|
|
|
—
|
|
|
914
|
|
|||||
Selling, general and administrative expenses
|
116
|
|
|
1
|
|
|
222
|
|
|
—
|
|
|
339
|
|
|||||
Research and development expenses
|
22
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
67
|
|
|||||
Restructuring-related charges
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
6
|
|
|||||
Total operating expenses
|
647
|
|
|
13
|
|
|
1,333
|
|
|
(123
|
)
|
|
1,870
|
|
|||||
Income (loss) from operations
|
38
|
|
|
22
|
|
|
(326
|
)
|
|
—
|
|
|
(266
|
)
|
|||||
Interest expense
|
(44
|
)
|
|
—
|
|
|
(20
|
)
|
|
19
|
|
|
(45
|
)
|
|||||
Other (expense) income, net
|
12
|
|
|
2
|
|
|
5
|
|
|
(19
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations before income taxes
|
6
|
|
|
24
|
|
|
(341
|
)
|
|
—
|
|
|
(311
|
)
|
|||||
Income tax expense (benefit)
|
4
|
|
|
11
|
|
|
17
|
|
|
—
|
|
|
32
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
2
|
|
|
13
|
|
|
(358
|
)
|
|
—
|
|
|
(343
|
)
|
|||||
Equity in earnings of consolidated subsidiaries
|
(346
|
)
|
|
(359
|
)
|
|
—
|
|
|
705
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
(344
|
)
|
|
(346
|
)
|
|
(358
|
)
|
|
705
|
|
|
(343
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(344
|
)
|
|
$
|
(346
|
)
|
|
$
|
(358
|
)
|
|
$
|
705
|
|
|
$
|
(343
|
)
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
(344
|
)
|
|
$
|
(346
|
)
|
|
$
|
(359
|
)
|
|
$
|
705
|
|
|
$
|
(344
|
)
|
Total comprehensive income (loss)
|
(323
|
)
|
|
(274
|
)
|
|
(334
|
)
|
|
609
|
|
|
(322
|
)
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
(323
|
)
|
|
$
|
(274
|
)
|
|
$
|
(335
|
)
|
|
$
|
609
|
|
|
$
|
(323
|
)
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the six months ended June 30, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
546
|
|
|
$
|
55
|
|
|
$
|
793
|
|
|
$
|
(170
|
)
|
|
$
|
1,224
|
|
Service revenue
|
767
|
|
|
17
|
|
|
1,056
|
|
|
—
|
|
|
1,840
|
|
|||||
Total revenue
|
1,313
|
|
|
72
|
|
|
1,849
|
|
|
(170
|
)
|
|
3,064
|
|
|||||
Cost of products
|
424
|
|
|
16
|
|
|
689
|
|
|
(170
|
)
|
|
959
|
|
|||||
Cost of services
|
564
|
|
|
6
|
|
|
709
|
|
|
—
|
|
|
1,279
|
|
|||||
Selling, general and administrative expenses
|
247
|
|
|
2
|
|
|
204
|
|
|
—
|
|
|
453
|
|
|||||
Research and development expenses
|
57
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
103
|
|
|||||
Restructuring-related charges
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Total operating expenses
|
1,298
|
|
|
24
|
|
|
1,648
|
|
|
(170
|
)
|
|
2,800
|
|
|||||
Income (loss) from operations
|
15
|
|
|
48
|
|
|
201
|
|
|
—
|
|
|
264
|
|
|||||
Interest expense
|
(86
|
)
|
|
—
|
|
|
(38
|
)
|
|
35
|
|
|
(89
|
)
|
|||||
Other (expense) income, net
|
25
|
|
|
(5
|
)
|
|
(10
|
)
|
|
(35
|
)
|
|
(25
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(46
|
)
|
|
43
|
|
|
153
|
|
|
—
|
|
|
150
|
|
|||||
Income tax expense (benefit)
|
(21
|
)
|
|
25
|
|
|
40
|
|
|
—
|
|
|
44
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(25
|
)
|
|
18
|
|
|
113
|
|
|
—
|
|
|
106
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
133
|
|
|
137
|
|
|
—
|
|
|
(270
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
108
|
|
|
155
|
|
|
113
|
|
|
(270
|
)
|
|
106
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
108
|
|
|
$
|
155
|
|
|
$
|
113
|
|
|
$
|
(270
|
)
|
|
$
|
106
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss) attributable to NCR
|
$
|
108
|
|
|
$
|
155
|
|
|
$
|
115
|
|
|
$
|
(270
|
)
|
|
$
|
108
|
|
Total comprehensive income (loss)
|
82
|
|
|
105
|
|
|
75
|
|
|
(188
|
)
|
|
74
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
82
|
|
|
$
|
105
|
|
|
$
|
83
|
|
|
$
|
(188
|
)
|
|
$
|
82
|
|
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
|
$
|
577
|
|
|
$
|
46
|
|
|
$
|
896
|
|
|
$
|
(212
|
)
|
|
$
|
1,307
|
|
Service revenue
|
715
|
|
|
15
|
|
|
1,043
|
|
|
—
|
|
|
1,773
|
|
|||||
Total revenue
|
1,292
|
|
|
61
|
|
|
1,939
|
|
|
(212
|
)
|
|
3,080
|
|
|||||
Cost of products
|
459
|
|
|
19
|
|
|
761
|
|
|
(212
|
)
|
|
1,027
|
|
|||||
Cost of services
|
510
|
|
|
5
|
|
|
1,002
|
|
|
—
|
|
|
1,517
|
|
|||||
Selling, general and administrative expenses
|
228
|
|
|
3
|
|
|
333
|
|
|
—
|
|
|
564
|
|
|||||
Research and development expenses
|
44
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
122
|
|
|||||
Restructuring-related charges
|
7
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
21
|
|
|||||
Total operating expenses
|
1,248
|
|
|
27
|
|
|
2,188
|
|
|
(212
|
)
|
|
3,251
|
|
|||||
Income (loss) from operations
|
44
|
|
|
34
|
|
|
(249
|
)
|
|
—
|
|
|
(171
|
)
|
|||||
Interest expense
|
(87
|
)
|
|
—
|
|
|
(39
|
)
|
|
37
|
|
|
(89
|
)
|
|||||
Other (expense) income, net
|
20
|
|
|
2
|
|
|
8
|
|
|
(37
|
)
|
|
(7
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
(23
|
)
|
|
36
|
|
|
(280
|
)
|
|
—
|
|
|
(267
|
)
|
|||||
Income tax expense (benefit)
|
1
|
|
|
16
|
|
|
17
|
|
|
—
|
|
|
34
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
(24
|
)
|
|
20
|
|
|
(297
|
)
|
|
—
|
|
|
(301
|
)
|
|||||
Equity in earnings of consolidated subsidiaries
|
(280
|
)
|
|
(303
|
)
|
|
—
|
|
|
583
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
(304
|
)
|
|
(283
|
)
|
|
(297
|
)
|
|
583
|
|
|
(301
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(304
|
)
|
|
$
|
(283
|
)
|
|
$
|
(297
|
)
|
|
$
|
583
|
|
|
$
|
(301
|
)
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
(304
|
)
|
|
$
|
(283
|
)
|
|
$
|
(300
|
)
|
|
$
|
583
|
|
|
$
|
(304
|
)
|
Total comprehensive income (loss)
|
(305
|
)
|
|
(246
|
)
|
|
(309
|
)
|
|
555
|
|
|
(305
|
)
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
(305
|
)
|
|
$
|
(246
|
)
|
|
$
|
(309
|
)
|
|
$
|
555
|
|
|
$
|
(305
|
)
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
June 30, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
17
|
|
|
$
|
22
|
|
|
$
|
293
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Accounts receivable, net
|
64
|
|
|
22
|
|
|
1,276
|
|
|
—
|
|
|
1,362
|
|
|||||
Inventories
|
282
|
|
|
12
|
|
|
471
|
|
|
—
|
|
|
765
|
|
|||||
Due from affiliates
|
670
|
|
|
1,413
|
|
|
498
|
|
|
(2,581
|
)
|
|
—
|
|
|||||
Other current assets
|
104
|
|
|
35
|
|
|
206
|
|
|
(51
|
)
|
|
294
|
|
|||||
Total current assets
|
1,137
|
|
|
1,504
|
|
|
2,744
|
|
|
(2,632
|
)
|
|
2,753
|
|
|||||
Property, plant and equipment, net
|
128
|
|
|
1
|
|
|
161
|
|
|
—
|
|
|
290
|
|
|||||
Goodwill
|
988
|
|
|
—
|
|
|
1,748
|
|
|
—
|
|
|
2,736
|
|
|||||
Intangibles, net
|
193
|
|
|
—
|
|
|
541
|
|
|
—
|
|
|
734
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|||||
Deferred income taxes
|
460
|
|
|
152
|
|
|
81
|
|
|
(129
|
)
|
|
564
|
|
|||||
Investments in subsidiaries
|
3,296
|
|
|
1,476
|
|
|
—
|
|
|
(4,772
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,074
|
|
|
17
|
|
|
38
|
|
|
(1,129
|
)
|
|
—
|
|
|||||
Other assets
|
384
|
|
|
56
|
|
|
104
|
|
|
—
|
|
|
544
|
|
|||||
Total assets
|
$
|
7,660
|
|
|
$
|
3,206
|
|
|
$
|
5,547
|
|
|
$
|
(8,662
|
)
|
|
$
|
7,751
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
259
|
|
Accounts payable
|
278
|
|
|
1
|
|
|
397
|
|
|
—
|
|
|
676
|
|
|||||
Payroll and benefits liabilities
|
71
|
|
|
1
|
|
|
119
|
|
|
—
|
|
|
191
|
|
|||||
Deferred service revenue and customer deposits
|
213
|
|
|
9
|
|
|
313
|
|
|
—
|
|
|
535
|
|
|||||
Due to affiliates
|
1,762
|
|
|
137
|
|
|
682
|
|
|
(2,581
|
)
|
|
—
|
|
|||||
Other current liabilities
|
172
|
|
|
1
|
|
|
234
|
|
|
(51
|
)
|
|
356
|
|
|||||
Total current liabilities
|
2,542
|
|
|
149
|
|
|
1,958
|
|
|
(2,632
|
)
|
|
2,017
|
|
|||||
Long-term debt
|
3,194
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
3,198
|
|
|||||
Pension and indemnity plan liabilities
|
441
|
|
|
—
|
|
|
261
|
|
|
—
|
|
|
702
|
|
|||||
Postretirement and postemployment benefits liabilities
|
25
|
|
|
3
|
|
|
100
|
|
|
—
|
|
|
128
|
|
|||||
Income tax accruals
|
14
|
|
|
13
|
|
|
147
|
|
|
—
|
|
|
174
|
|
|||||
Due to affiliates
|
17
|
|
|
37
|
|
|
1,075
|
|
|
(1,129
|
)
|
|
—
|
|
|||||
Other liabilities
|
50
|
|
|
11
|
|
|
209
|
|
|
(129
|
)
|
|
141
|
|
|||||
Total liabilities
|
6,283
|
|
|
213
|
|
|
3,754
|
|
|
(3,890
|
)
|
|
6,360
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Series A convertible preferred stock
|
822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
822
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total NCR stockholders’ equity
|
555
|
|
|
2,993
|
|
|
1,779
|
|
|
(4,772
|
)
|
|
555
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total stockholders’ equity
|
555
|
|
|
2,993
|
|
|
1,784
|
|
|
(4,772
|
)
|
|
560
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,660
|
|
|
$
|
3,206
|
|
|
$
|
5,547
|
|
|
$
|
(8,662
|
)
|
|
$
|
7,751
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
December 31, 2015
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
15
|
|
|
$
|
20
|
|
|
293
|
|
|
$
|
—
|
|
|
$
|
328
|
|
|
Accounts receivable, net
|
94
|
|
|
33
|
|
|
1,124
|
|
|
—
|
|
|
1,251
|
|
|||||
Inventories
|
233
|
|
|
6
|
|
|
404
|
|
|
—
|
|
|
643
|
|
|||||
Due from affiliates
|
571
|
|
|
1,325
|
|
|
286
|
|
|
(2,182
|
)
|
|
—
|
|
|||||
Other current assets
|
129
|
|
|
31
|
|
|
206
|
|
|
(39
|
)
|
|
327
|
|
|||||
Total current assets
|
1,042
|
|
|
1,415
|
|
|
2,313
|
|
|
(2,221
|
)
|
|
2,549
|
|
|||||
Property, plant and equipment, net
|
140
|
|
|
1
|
|
|
181
|
|
|
—
|
|
|
322
|
|
|||||
Goodwill
|
979
|
|
|
—
|
|
|
1,754
|
|
|
—
|
|
|
2,733
|
|
|||||
Intangibles, net
|
212
|
|
|
—
|
|
|
586
|
|
|
—
|
|
|
798
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|||||
Deferred income taxes
|
475
|
|
|
152
|
|
|
84
|
|
|
(129
|
)
|
|
582
|
|
|||||
Investments in subsidiaries
|
3,173
|
|
|
1,449
|
|
|
—
|
|
|
(4,622
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,072
|
|
|
17
|
|
|
38
|
|
|
(1,127
|
)
|
|
—
|
|
|||||
Other assets
|
362
|
|
|
55
|
|
|
104
|
|
|
—
|
|
|
521
|
|
|||||
Total assets
|
$
|
7,455
|
|
|
$
|
3,089
|
|
|
$
|
5,190
|
|
|
$
|
(8,099
|
)
|
|
$
|
7,635
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
13
|
|
Accounts payable
|
280
|
|
|
—
|
|
|
377
|
|
|
—
|
|
|
657
|
|
|||||
Payroll and benefits liabilities
|
94
|
|
|
1
|
|
|
94
|
|
|
—
|
|
|
189
|
|
|||||
Deferred service revenue and customer deposits
|
180
|
|
|
24
|
|
|
272
|
|
|
—
|
|
|
476
|
|
|||||
Due to affiliates
|
1,405
|
|
|
137
|
|
|
640
|
|
|
(2,182
|
)
|
|
—
|
|
|||||
Other current liabilities
|
215
|
|
|
3
|
|
|
267
|
|
|
(39
|
)
|
|
446
|
|
|||||
Total current liabilities
|
2,178
|
|
|
165
|
|
|
1,659
|
|
|
(2,221
|
)
|
|
1,781
|
|
|||||
Long-term debt
|
3,229
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
3,239
|
|
|||||
Pension and indemnity plan liabilities
|
433
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
696
|
|
|||||
Postretirement and postemployment benefits liabilities
|
27
|
|
|
3
|
|
|
103
|
|
|
—
|
|
|
133
|
|
|||||
Income tax accruals
|
14
|
|
|
13
|
|
|
140
|
|
|
—
|
|
|
167
|
|
|||||
Due to affiliates
|
18
|
|
|
37
|
|
|
1,072
|
|
|
(1,127
|
)
|
|
—
|
|
|||||
Other liabilities
|
38
|
|
|
—
|
|
|
170
|
|
|
(129
|
)
|
|
79
|
|
|||||
Total liabilities
|
5,937
|
|
|
218
|
|
|
3,417
|
|
|
(3,477
|
)
|
|
6,095
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Series A convertible preferred stock
|
798
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
798
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total NCR stockholders’ equity
|
720
|
|
|
2,871
|
|
|
1,751
|
|
|
(4,622
|
)
|
|
720
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Total stockholders’ equity
|
720
|
|
|
2,871
|
|
|
1,757
|
|
|
(4,622
|
)
|
|
726
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,455
|
|
|
$
|
3,089
|
|
|
$
|
5,190
|
|
|
$
|
(8,099
|
)
|
|
$
|
7,635
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the six months ended June 30, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
203
|
|
|
$
|
(74
|
)
|
|
$
|
17
|
|
|
$
|
(2
|
)
|
|
$
|
144
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(9
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(24
|
)
|
|||||
Additions to capitalized software
|
(45
|
)
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(74
|
)
|
|||||
Proceeds from (payments of) intercompany notes
|
123
|
|
|
78
|
|
|
—
|
|
|
(201
|
)
|
|
—
|
|
|||||
Investments in equity affiliates
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|||||
Proceeds from divestiture
|
22
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
47
|
|
|||||
Other investing activities, net
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Net cash provided by (used in) investing activities
|
74
|
|
|
78
|
|
|
(19
|
)
|
|
(192
|
)
|
|
(59
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short term borrowings, net
|
(4
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|||||
Payments on term credit facilities
|
(67
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(73
|
)
|
|||||
Payments on revolving credit facilities
|
(351
|
)
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
(431
|
)
|
|||||
Borrowings on revolving credit facilities
|
426
|
|
|
—
|
|
|
280
|
|
|
—
|
|
|
706
|
|
|||||
Repurchase of Company common stock
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
|||||
Debt issuance cost
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Proceeds from employee stock plans
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Equity contribution
|
—
|
|
|
—
|
|
|
9
|
|
|
(9
|
)
|
|
—
|
|
|||||
Dividend distribution to consolidated subsidiaries
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|||||
Borrowings (repayments) of intercompany notes
|
—
|
|
|
—
|
|
|
(201
|
)
|
|
201
|
|
|
—
|
|
|||||
Tax withholding payments on behalf of employees
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(255
|
)
|
|
—
|
|
|
5
|
|
|
194
|
|
|
(56
|
)
|
|||||
Cash flows from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash used in operating activities
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Cash and cash equivalents at beginning of period
|
15
|
|
|
20
|
|
|
293
|
|
|
—
|
|
|
328
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
17
|
|
|
$
|
22
|
|
|
$
|
293
|
|
|
$
|
—
|
|
|
$
|
332
|
|
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
|
$
|
62
|
|
|
$
|
(75
|
)
|
|
$
|
300
|
|
|
$
|
(41
|
)
|
|
$
|
246
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(8
|
)
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(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
|
32
|
|
|
80
|
|
|
(50
|
)
|
|
(175
|
)
|
|
(113
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short term borrowings, net
|
15
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
28
|
|
|||||
Payments on term credit facilities
|
(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
|
|
|||||
Equity contribution
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Dividend distribution to consolidated subsidiaries
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
41
|
|
|
—
|
|
|||||
Borrowings (repayments) of intercompany notes
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
176
|
|
|
—
|
|
|||||
Tax withholding payments on behalf of employees
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(95
|
)
|
|
—
|
|
|
(304
|
)
|
|
216
|
|
|
(183
|
)
|
|||||
Cash flows from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash used in operating activities
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
(18
|
)
|
|
5
|
|
|
(73
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
44
|
|
|
9
|
|
|
458
|
|
|
—
|
|
|
511
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
26
|
|
|
$
|
14
|
|
|
$
|
385
|
|
|
$
|
—
|
|
|
$
|
425
|
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
|
•
|
Revenue
increased
approximately
1%
from the prior year period, and increased
4%
excluding unfavorable foreign currency impacts and adjusting for the divestiture of our Interactive Printer Solutions (IPS) business;
|
•
|
Software revenue and Services revenue increased as a percentage of total revenue; and
|
•
|
Divestiture of our IPS business was substantially completed.
|
•
|
Evolving our Business Model
- Shifting our business model to focus on growth of higher margin software and services revenue to grow our recurring revenue streams, and strengthen our long-term foundation.
|
•
|
Sales Enablement
- Developing a sales force enabled with a consultative selling model, supported by service teams and focused on delivery and customer interactions to leverage the innovative solutions we are bringing to market and gain share.
|
•
|
Services Transformation
- Enhancing our global service capability by improving our service positioning, increasing customer service attach rates for our products, improving profitability in our services business and aligning our services capability to support our solutions.
|
•
|
Investing in Innovation
- Optimizing our investments in areas with the greatest potential for profitable growth, such as cloud solutions and professional, managed and other services.
|
•
|
Cultivating our Culture and Team
- Organizing and recruiting with an eye toward the future, and investing in, training and developing our employees to accelerate the delivery of our innovative solutions and to focus on the needs of our customers and changes in consumer behavior.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
1,620
|
|
|
$
|
1,604
|
|
|
$
|
3,064
|
|
|
$
|
3,080
|
|
Gross margin
|
$
|
446
|
|
|
$
|
146
|
|
|
$
|
826
|
|
|
$
|
536
|
|
Gross margin as a percentage of revenue
|
27.5
|
%
|
|
9.1
|
%
|
|
27.0
|
%
|
|
17.4
|
%
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
$
|
229
|
|
|
$
|
339
|
|
|
$
|
453
|
|
|
$
|
564
|
|
Research and development expenses
|
50
|
|
|
67
|
|
|
103
|
|
|
122
|
|
||||
Restructuring-related charges
|
4
|
|
|
6
|
|
|
6
|
|
|
21
|
|
||||
Income from operations
|
$
|
163
|
|
|
$
|
(266
|
)
|
|
$
|
264
|
|
|
$
|
(171
|
)
|
In millions
|
2016
|
% of Total
|
|
2015
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Americas
|
$
|
919
|
|
57%
|
|
$
|
878
|
|
55%
|
|
5%
|
8%
|
Europe, Middle East Africa (EMEA)
|
477
|
|
29%
|
|
489
|
|
30%
|
|
(2)%
|
—%
|
||
Asia Pacific (APJ)
|
224
|
|
14%
|
|
237
|
|
15%
|
|
(5)%
|
(4)%
|
||
Consolidated revenue
|
$
|
1,620
|
|
100%
|
|
$
|
1,604
|
|
100%
|
|
1%
|
4%
|
In millions
|
2016
|
% of Total
|
|
2015
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Americas
|
$
|
1,738
|
|
57%
|
|
$
|
1,677
|
|
54%
|
|
4%
|
7%
|
Europe, Middle East Africa (EMEA)
|
904
|
|
29%
|
|
945
|
|
31%
|
|
(4)%
|
(2)%
|
||
Asia Pacific (APJ)
|
422
|
|
14%
|
|
458
|
|
15%
|
|
(8)%
|
(5)%
|
||
Consolidated revenue
|
$
|
3,064
|
|
100%
|
|
$
|
3,080
|
|
100%
|
|
(1)%
|
2%
|
In millions
|
2016
|
% of Total
|
|
2015
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Software
|
$
|
452
|
|
28%
|
|
$
|
440
|
|
27%
|
|
3%
|
3%
|
Services
|
574
|
|
35%
|
|
542
|
|
34%
|
|
6%
|
8%
|
||
Hardware
|
594
|
|
37%
|
|
622
|
|
39%
|
|
(5)%
|
—%
|
||
Consolidated revenue
|
$
|
1,620
|
|
100%
|
|
$
|
1,604
|
|
100%
|
|
1%
|
4%
|
In millions
|
2016
|
% of Total
|
|
2015
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Software
|
$
|
871
|
|
29%
|
|
$
|
854
|
|
28%
|
|
2%
|
3%
|
Services
|
1,117
|
|
36%
|
|
1,065
|
|
34%
|
|
5%
|
8%
|
||
Hardware
|
1,076
|
|
35%
|
|
1,161
|
|
38%
|
|
(7)%
|
(4)%
|
||
Consolidated revenue
|
$
|
3,064
|
|
100%
|
|
3,080
|
|
100%
|
|
(1)%
|
2%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Americas
|
5%
|
(1)%
|
(2)%
|
8%
|
Europe, Middle East Africa (EMEA)
|
(2)%
|
(1)%
|
(1)%
|
—%
|
Asia Pacific (APJ)
|
(5)%
|
—%
|
(1)%
|
(4)%
|
Consolidated revenue
|
1%
|
(1)%
|
(2)%
|
4%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Americas
|
4%
|
(1)%
|
(2)%
|
7%
|
Europe, Middle East Africa (EMEA)
|
(4)%
|
(1)%
|
(1)%
|
(2)%
|
Asia Pacific (APJ)
|
(8)%
|
(2)%
|
(1)%
|
(5)%
|
Consolidated Revenue
|
(1)%
|
(3)%
|
—%
|
2%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Software
|
3%
|
—%
|
—%
|
3%
|
Services
|
6%
|
(2)%
|
—%
|
8%
|
Hardware
|
(5)%
|
(1)%
|
(4)%
|
—%
|
Consolidated Revenue
|
1%
|
(1)%
|
(2)%
|
4%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Software
|
2%
|
(1)%
|
—%
|
3%
|
Services
|
5%
|
(3)%
|
—%
|
8%
|
Hardware
|
(7)%
|
(1)%
|
(2)%
|
(4)%
|
Consolidated Revenue
|
(1)%
|
(3)%
|
—%
|
2%
|
•
|
Software
- Our software solutions include our automated teller machine (ATM) software application suite, cash management and video banking software, check and image processing software and customer-facing digital banking solutions. We offer an omni-channel retail software platform with a comprehensive suite of software applications, including point-of-sale (POS) software, and a suite of software applications for hospitality POS operations, and kitchen and restaurant management. We also offer other cloud (or software-as-a-service) solutions, hosted services, and online, mobile and transactional services and applications such as bill pay. Additionally, we provide ongoing software support and maintenance services, as well as consulting and implementation services for our software solutions.
|
•
|
Services
- Our service solutions include maintenance and repair services for our hardware solutions as well as for third party products, and support services for our hardware solutions. Additionally, we provide managed services as well as other services, including site assessment and preparation, staging, installation and implementation and systems management services.
|
•
|
Hardware
- Our hardware solutions include a comprehensive line of ATMs, self-checkout (SCO), and mobile and other point of sale (POS) products. Additionally, we also offer printer consumables.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
452
|
|
|
$
|
440
|
|
|
$
|
871
|
|
|
$
|
854
|
|
Operating income
|
$
|
144
|
|
|
$
|
130
|
|
|
$
|
259
|
|
|
$
|
247
|
|
Operating income as a percentage of revenue
|
31.9
|
%
|
|
29.5
|
%
|
|
29.7
|
%
|
|
28.9
|
%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
574
|
|
|
$
|
542
|
|
|
$
|
1,117
|
|
|
$
|
1,065
|
|
Operating income
|
$
|
49
|
|
|
$
|
48
|
|
|
$
|
83
|
|
|
$
|
84
|
|
Operating income as a percentage of revenue
|
8.5
|
%
|
|
8.9
|
%
|
|
7.4
|
%
|
|
7.9
|
%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
594
|
|
|
$
|
622
|
|
|
$
|
1,076
|
|
|
$
|
1,161
|
|
Operating income
|
$
|
14
|
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
15
|
|
Operating income as a percentage of revenue
|
2.4
|
%
|
|
3.5
|
%
|
|
0.4
|
%
|
|
1.3
|
%
|
|
Six months ended June 30
|
||||||
In millions
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
$
|
144
|
|
|
$
|
246
|
|
Less: Expenditures for property, plant and equipment
|
(24
|
)
|
|
(31
|
)
|
||
Less: Additions to capitalized software
|
(74
|
)
|
|
(79
|
)
|
||
Net cash used in discontinued operations
|
(20
|
)
|
|
(17
|
)
|
||
Free cash flow (non-GAAP)
|
$
|
26
|
|
|
$
|
119
|
|
In millions
|
Total Amounts
|
July 1, 2016 through
December 31, 2016
|
2017 - 2018
|
2019 - 2020
|
2021 & Thereafter
|
||||||||||
Debt obligations
|
$
|
3,489
|
|
$
|
226
|
|
$
|
113
|
|
$
|
180
|
|
$
|
2,970
|
|
Interest on debt obligations
|
900
|
|
80
|
|
297
|
|
284
|
|
239
|
|
|||||
Total obligations
|
$
|
4,389
|
|
$
|
306
|
|
$
|
410
|
|
$
|
464
|
|
$
|
3,209
|
|
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
|
Time Period
|
|
Total Number of
Shares Purchased
|
|
Average Price Paid
Per Share
|
|
Total Number of
Shares Purchased as
Part of Current
Programs
(1)
|
|
Maximum Dollar
Value of
Shares that May
Yet be Purchased
Under Programs
(1)
|
||||||
April 1 through April 30, 2016
|
|
1,158,009
|
|
|
$
|
29.67
|
|
|
1,158,009
|
|
|
$
|
86,467,722
|
|
May 1 through May 31, 2016
|
|
215,670
|
|
|
$
|
28.93
|
|
|
215,670
|
|
|
$
|
81,174,236
|
|
June 1 through June 30, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
81,827,654
|
|
Second quarter total
|
|
1,373,679
|
|
|
$
|
29.56
|
|
|
1,373,679
|
|
|
|
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).
|
|
|
3.1
|
Articles of Amendment and Restatement of NCR Corporation.
|
|
|
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
|
Annex A to Credit Agreement dated as of August 22, 2011, as amended and restated as of July 25, 2013, as further amended and restated as of March 31, 2016 among NCR, the Foreign Borrowers party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A.*
|
|
|
10.2
|
Form of 2016 Director Restricted Stock Unit Grant Statement under the NCR Corporation 2013 Stock Incentive Plan.
|
|
|
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.
|
|
|
*
|
Inadvertently omitted from Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 31, 2016.
|
|
|
NCR CORPORATION
|
||
|
|
|
|
|
Date:
|
July 29, 2016
|
By:
|
|
/s/ Robert Fishman
|
|
|
|
|
Robert Fishman
Senior Vice President and Chief Financial Officer
|
Name of Grantee
|
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
|
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.
|
Date:
|
July 29, 2016
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board, Chief Executive Officer and President
|
Date:
|
July 29, 2016
|
|
/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 29, 2016
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board, Chief Executive Officer and President
|
Dated:
|
July 29, 2016
|
|
/s/ Robert Fishman
|
|
|
|
Robert Fishman
|
|
|
|
Senior Vice President and Chief Financial Officer
|