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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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Emerging Growth 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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||||||||||||
2017
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2016
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2017
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2016
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|||||||||
Product revenue
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$
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618
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$
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676
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$
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1,172
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$
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1,224
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Service revenue
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975
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944
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1,899
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1,840
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Total revenue
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1,593
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1,620
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3,071
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3,064
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Cost of products
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478
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517
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902
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959
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Cost of services
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652
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657
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1,293
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1,279
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Selling, general and administrative expenses
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227
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|
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229
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|
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456
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|
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453
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||||
Research and development expenses
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58
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50
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125
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103
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||||
Restructuring-related charges
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—
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4
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—
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6
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||||
Total operating expenses
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1,415
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1,457
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2,776
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2,800
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Income from operations
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178
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|
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163
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|
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295
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264
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||||
Interest expense
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(41
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)
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(43
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)
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(80
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)
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(89
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)
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||||
Other (expense), net
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(7
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)
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(15
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)
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(14
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)
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(25
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)
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||||
Income from continuing operations before income taxes
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130
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105
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201
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150
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||||
Income tax expense
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33
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31
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47
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44
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Income from continuing operations
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97
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74
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154
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106
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Income from discontinued operations, net of tax
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5
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—
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5
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—
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Net income
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102
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74
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159
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106
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Net loss attributable to noncontrolling interests
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—
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(2
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)
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—
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(2
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)
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||||
Net income attributable to NCR
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$
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102
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$
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76
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$
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159
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$
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108
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Amounts attributable to NCR common stockholders:
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||||||||
Income from continuing operations
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$
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97
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$
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76
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$
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154
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$
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108
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Series A convertible preferred stock dividends
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(12
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)
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(13
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)
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(24
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)
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(24
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)
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||||
Deemed dividend on modification of Series A convertible preferred stock
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—
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—
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(4
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)
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—
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Deemed dividend on Series A convertible preferred stock related to redemption
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—
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—
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(58
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)
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—
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Income from continuing operations attributable to NCR common stockholders
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85
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63
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68
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84
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Income from discontinued operations, net of tax
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5
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—
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5
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—
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Net income attributable to NCR common stockholders
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$
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90
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$
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63
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$
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73
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$
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84
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Income per share attributable to NCR common stockholders:
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Income per common share from continuing operations
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Basic
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$
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0.70
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$
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0.51
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$
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0.56
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$
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0.66
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Diluted
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$
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0.64
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$
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0.49
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$
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0.53
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$
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0.65
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Net income per common share
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Basic
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$
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0.74
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$
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0.51
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$
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0.60
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$
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0.66
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Diluted
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$
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0.67
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$
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0.49
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$
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0.57
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$
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0.65
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Weighted average common shares outstanding
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Basic
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121.4
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123.8
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122.1
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127.1
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Diluted
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152.7
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154.5
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127.2
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129.6
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In millions
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Three months ended June 30
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Six months ended June 30
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||||||||||||
2017
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2016
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2017
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2016
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|||||||||
Net income
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$
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102
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$
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74
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$
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159
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$
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106
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Other comprehensive income (loss):
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||||||||
Currency translation adjustments
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||||||||
Currency translation gains (losses)
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5
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(18
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)
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29
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(26
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)
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Derivatives
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||||||||
Unrealized (losses) gains on derivatives
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(6
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)
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2
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(10
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)
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—
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(Gains) losses on derivatives recognized during the period
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(1
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)
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1
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(3
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)
|
|
2
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Less income tax benefit (expense)
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1
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(1
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)
|
|
3
|
|
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—
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|
||||
Employee benefit plans
|
|
|
|
|
|
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||||||||
Amortization of prior service benefit
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(3
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)
|
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(5
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)
|
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(5
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)
|
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(10
|
)
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||||
Amortization of actuarial benefit
|
—
|
|
|
(1
|
)
|
|
(1
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)
|
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(1
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)
|
||||
Less income tax benefit
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
||||
Other comprehensive (loss) income
|
(3
|
)
|
|
(20
|
)
|
|
15
|
|
|
(32
|
)
|
||||
Total comprehensive income
|
99
|
|
|
54
|
|
|
174
|
|
|
74
|
|
||||
Less comprehensive income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Currency translation losses
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Amounts attributable to noncontrolling interests
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(8
|
)
|
||||
Comprehensive income attributable to NCR
|
$
|
99
|
|
|
$
|
58
|
|
|
$
|
174
|
|
|
82
|
|
In millions, except per share amounts
|
June 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
377
|
|
|
$
|
498
|
|
Accounts receivable, net
|
1,321
|
|
|
1,282
|
|
||
Inventories
|
828
|
|
|
699
|
|
||
Other current assets
|
290
|
|
|
278
|
|
||
Total current assets
|
2,816
|
|
|
2,757
|
|
||
Property, plant and equipment, net
|
304
|
|
|
287
|
|
||
Goodwill
|
2,736
|
|
|
2,727
|
|
||
Intangibles, net
|
618
|
|
|
672
|
|
||
Prepaid pension cost
|
107
|
|
|
94
|
|
||
Deferred income taxes
|
611
|
|
|
575
|
|
||
Other assets
|
575
|
|
|
561
|
|
||
Total assets
|
$
|
7,767
|
|
|
$
|
7,673
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
267
|
|
|
$
|
50
|
|
Accounts payable
|
731
|
|
|
781
|
|
||
Payroll and benefits liabilities
|
205
|
|
|
234
|
|
||
Deferred service revenue and customer deposits
|
521
|
|
|
468
|
|
||
Other current liabilities
|
389
|
|
|
432
|
|
||
Total current liabilities
|
2,113
|
|
|
1,965
|
|
||
Long-term debt
|
3,015
|
|
|
3,001
|
|
||
Pension and indemnity plan liabilities
|
764
|
|
|
739
|
|
||
Postretirement and postemployment benefits liabilities
|
127
|
|
|
127
|
|
||
Income tax accruals
|
140
|
|
|
142
|
|
||
Other liabilities
|
161
|
|
|
138
|
|
||
Total liabilities
|
6,320
|
|
|
6,112
|
|
||
Commitments and Contingencies (Note 7)
|
|
|
|
||||
Redeemable noncontrolling interest
|
14
|
|
|
15
|
|
||
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, 2017 and, 0.9 shares issued and outstanding as of December 31, 2016; redemption amount and liquidation preference of $802 and $870 as of June 30, 2017 and December 31, 2016, respectively
|
786
|
|
|
847
|
|||
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, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 121.4 and 124.6 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
25
|
|
|
32
|
|
||
Retained earnings
|
806
|
|
|
867
|
|
||
Accumulated other comprehensive loss
|
(190
|
)
|
|
(205)
|
|
||
Total NCR stockholders’ equity
|
642
|
|
|
695
|
|
||
Noncontrolling interests in subsidiaries
|
5
|
|
|
4
|
|
||
Total stockholders’ equity
|
647
|
|
|
699
|
|
||
Total liabilities and stockholders’ equity
|
$
|
7,767
|
|
|
$
|
7,673
|
|
In millions
|
Six months ended June 30
|
||||||
2017
|
|
2016
|
|||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
159
|
|
|
$
|
106
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Income from discontinued operations
|
(5
|
)
|
|
—
|
|
||
Depreciation and amortization
|
172
|
|
|
175
|
|
||
Stock-based compensation expense
|
41
|
|
|
29
|
|
||
Deferred income tax expense
|
4
|
|
|
20
|
|
||
Gain on sale of property, plant and equipment and other assets
|
(1
|
)
|
|
—
|
|
||
Loss on divestiture
|
—
|
|
|
1
|
|
||
Impairment of other assets
|
—
|
|
|
2
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
(28
|
)
|
|
(121
|
)
|
||
Inventories
|
(126
|
)
|
|
(123
|
)
|
||
Current payables and accrued expenses
|
(93
|
)
|
|
4
|
|
||
Deferred service revenue and customer deposits
|
50
|
|
|
131
|
|
||
Employee benefit plans
|
(6
|
)
|
|
(26
|
)
|
||
Other assets and liabilities
|
(29
|
)
|
|
(54
|
)
|
||
Net cash provided by operating activities
|
138
|
|
|
144
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(43
|
)
|
|
(24
|
)
|
||
Additions to capitalized software
|
(84
|
)
|
|
(74
|
)
|
||
Proceeds from divestiture
|
—
|
|
|
47
|
|
||
Other investing activities, net
|
—
|
|
|
(8
|
)
|
||
Net cash used in investing activities
|
(127
|
)
|
|
(59
|
)
|
||
Financing activities
|
|
|
|
||||
Short term borrowings, net
|
13
|
|
|
1
|
|
||
Payments on term credit facilities
|
(25
|
)
|
|
(73
|
)
|
||
Payments on revolving credit facilities
|
(615
|
)
|
|
(431
|
)
|
||
Borrowings on revolving credit facilities
|
855
|
|
|
706
|
|
||
Debt issuance costs
|
—
|
|
|
(8
|
)
|
||
Repurchases of Company common stock
|
(350
|
)
|
|
(250
|
)
|
||
Proceeds from employee stock plans
|
8
|
|
|
6
|
|
||
Tax withholding payments on behalf of employees
|
(24
|
)
|
|
(7
|
)
|
||
Other financing activities
|
(1
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(139
|
)
|
|
(56
|
)
|
||
Cash flows from discontinued operations
|
|
|
|
||||
Net cash used in operating activities
|
(5
|
)
|
|
(20
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
12
|
|
|
(5
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(121
|
)
|
|
4
|
|
||
Cash and cash equivalents at beginning of period
|
498
|
|
|
328
|
|
||
Cash and cash equivalents at end of period
|
$
|
377
|
|
|
$
|
332
|
|
•
|
The new standard removes the current limitation on contingent revenue, and we expect that this may result in revenue being recognized earlier for certain contracts.
|
•
|
The new standard modifies the accounting for the costs to obtain a contract, such as the capitalization and deferral of commission expenses for certain recurring revenue streams, and we expect that this will be a change to our current policy to expense as incurred.
|
|
December 31, 2016
|
|
|
|
|
|
|
|
June 30, 2017
|
||||||||||||||||||||||||||
In millions
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
|
Additions
|
|
Impairment
|
|
Other
|
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Total
|
||||||||||||||||||
Software
|
$
|
1,930
|
|
|
$
|
(7
|
)
|
|
$
|
1,923
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
1,939
|
|
|
$
|
(7
|
)
|
|
$
|
1,932
|
|
Services
|
658
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||||||
Hardware
|
162
|
|
|
(16
|
)
|
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
(16
|
)
|
|
146
|
|
|||||||||
Total goodwill
|
$
|
2,750
|
|
|
$
|
(23
|
)
|
|
$
|
2,727
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
2,759
|
|
|
$
|
(23
|
)
|
|
$
|
2,736
|
|
|
Amortization
Period
(in Years)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
In millions
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|||||||||
Identifiable intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||
Reseller & customer relationships
|
1 - 20
|
|
$
|
658
|
|
|
$
|
(149
|
)
|
|
$
|
656
|
|
|
$
|
(128
|
)
|
Intellectual property
|
2 - 8
|
|
393
|
|
|
(326
|
)
|
|
392
|
|
|
(302
|
)
|
||||
Customer contracts
|
8
|
|
89
|
|
|
(74
|
)
|
|
89
|
|
|
(66
|
)
|
||||
Tradenames
|
2 - 10
|
|
73
|
|
|
(46
|
)
|
|
73
|
|
|
(42
|
)
|
||||
Total identifiable intangible assets
|
|
|
$
|
1,213
|
|
|
$
|
(595
|
)
|
|
$
|
1,210
|
|
|
$
|
(538
|
)
|
In millions
|
Three months ended June 30, 2017
|
|
Six months ended June 30, 2017
|
|
Remainder of 2017 (estimated)
|
||||||
Amortization expense
|
$
|
28
|
|
|
$
|
57
|
|
|
$
|
59
|
|
|
|
For the years ended December 31 (estimated)
|
||||||||||||||||||
In millions
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||
Amortization expense
|
|
$
|
85
|
|
|
$
|
75
|
|
|
$
|
57
|
|
|
$
|
49
|
|
|
$
|
45
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|||||||||
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)
|
$
|
51
|
|
|
2.85%
|
|
$
|
45
|
|
|
2.88%
|
|
Trade Receivables Securitization Facility
(1)
|
200
|
|
|
2.00%
|
|
—
|
|
|
|
|||
Other
(2)
|
16
|
|
|
12.52%
|
|
5
|
|
|
7.41%
|
|||
|
Total short-term borrowings
|
$
|
267
|
|
|
|
|
$
|
50
|
|
|
|
Long-Term Debt
|
|
|
|
|
|
|
|
|||||
Senior Secured Credit Facility:
|
|
|
|
|
|
|
|
|||||
|
Term loan facility
(1)
|
$
|
793
|
|
|
2.85%
|
|
$
|
821
|
|
|
2.88%
|
|
Revolving credit facility
(1)
|
40
|
|
|
2.98%
|
|
—
|
|
|
|
||
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
|
|
|
|
||
Deferred financing fees
|
(27
|
)
|
|
|
|
(29
|
)
|
|
|
|||
Other
(2)
|
9
|
|
|
6.39%
|
|
9
|
|
|
6.64%
|
|||
|
Total long-term debt
|
$
|
3,015
|
|
|
|
|
$
|
3,001
|
|
|
|
(1)
|
Interest rates are weighted-average interest rates as of
June 30, 2017
and
December 31, 2016
.
|
(2)
|
Interest rates are weighted-average interest rates as of
June 30, 2017
and
December 31, 2016
primarily related to various international credit facilities and a note payable in the U.S.
|
•
|
a consolidated leverage ratio on the last day of any fiscal quarter, not to exceed (i) in the case of any fiscal quarter ending 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
.
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Restricted stock units
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
39
|
|
|
$
|
29
|
|
Employee stock purchase plan
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Stock-based compensation expense
|
22
|
|
|
16
|
|
|
41
|
|
|
29
|
|
||||
Tax benefit
|
(6)
|
|
|
(4)
|
|
|
(12)
|
|
|
(8
|
)
|
||||
Total stock-based compensation expense (net of tax)
|
$
|
16
|
|
|
$
|
12
|
|
|
$
|
29
|
|
|
$
|
21
|
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
Net service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
18
|
|
|
22
|
|
|
5
|
|
|
7
|
|
|
23
|
|
|
29
|
|
||||||
Expected return on plan assets
|
(15
|
)
|
|
(18
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|
(23
|
)
|
|
(27
|
)
|
||||||
Net periodic benefit cost (income)
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
4
|
|
In millions
|
U.S. Pension Benefits
|
|
International Pension Benefits
|
|
Total Pension Benefits
|
||||||||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
Net service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
36
|
|
|
45
|
|
|
10
|
|
|
14
|
|
|
46
|
|
|
59
|
|
||||||
Expected return on plan assets
|
(29
|
)
|
|
(36
|
)
|
|
(17
|
)
|
|
(18
|
)
|
|
(46
|
)
|
|
(54
|
)
|
||||||
Net periodic benefit cost (income)
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
9
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net service cost
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
19
|
|
|
$
|
8
|
|
Interest cost
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Actuarial gain
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Net benefit cost
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
4
|
|
Restructuring severance cost
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total postemployment cost
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
16
|
|
|
$
|
6
|
|
In millions
|
2017
|
|
2016
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance as of January 1
|
$
|
27
|
|
|
$
|
24
|
|
Accruals for warranties issued
|
18
|
|
|
18
|
|
||
Settlements (in cash or in kind)
|
(21
|
)
|
|
(20
|
)
|
||
Ending balance as of June 30
|
$
|
24
|
|
|
$
|
22
|
|
in millions
|
NCR Stockholders' Equity
|
Non-Redeemable Noncontrolling Interests in Subsidiaries
|
Total Stockholders' Equity
|
||||||
Balance at December 31, 2016
|
$
|
695
|
|
$
|
4
|
|
$
|
699
|
|
Adoption of share-based compensation accounting standard update
|
39
|
|
—
|
|
39
|
|
|||
Balance at January 1, 2017
|
734
|
|
4
|
|
738
|
|
|||
Net income
|
159
|
|
1
|
|
160
|
|
|||
Other comprehensive income
|
15
|
|
—
|
|
15
|
|
|||
Repurchases of Company common stock
|
(350
|
)
|
—
|
|
(350
|
)
|
|||
Series A convertible preferred stock dividends
|
(24
|
)
|
—
|
|
(24
|
)
|
|||
Deemed dividend on modification of Series A convertible preferred stock
|
(4
|
)
|
—
|
|
(4
|
)
|
|||
Redemption of Series A convertible preferred stock
|
87
|
|
—
|
|
87
|
|
|||
Employee stock compensation expense
|
41
|
|
—
|
|
41
|
|
|||
Tax witholdings related to vesting of stock based awards
|
(24
|
)
|
—
|
|
(24
|
)
|
|||
Proceeds from employee stock plans
|
8
|
|
—
|
|
8
|
|
|||
Balance at June 30, 2017
|
$
|
642
|
|
$
|
5
|
|
$
|
647
|
|
In millions, except per share amounts
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
97
|
|
|
$
|
76
|
|
|
$
|
154
|
|
|
$
|
108
|
|
Series A convertible preferred stock dividends
|
|
(12
|
)
|
|
(13
|
)
|
|
(24
|
)
|
|
(24
|
)
|
||||
Deemed dividend on modification of Series A convertible preferred stock
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Deemed dividend on Series A convertible preferred stock redemption
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
||||
Net income from continuing operations attributable to NCR common stockholders
|
|
85
|
|
|
63
|
|
|
68
|
|
|
84
|
|
||||
Income from discontinued operations, net of tax
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Net income attributable to NCR common stockholders
|
|
$
|
90
|
|
|
$
|
63
|
|
|
$
|
73
|
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of shares outstanding
|
|
121.4
|
|
|
123.8
|
|
|
122.1
|
|
|
127.1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
|
$
|
0.70
|
|
|
$
|
0.51
|
|
|
$
|
0.56
|
|
|
$
|
0.66
|
|
From discontinued operations
|
|
0.04
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Total basic earnings per share
|
|
$
|
0.74
|
|
|
$
|
0.51
|
|
|
$
|
0.60
|
|
|
$
|
0.66
|
|
In millions, except per share amounts
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
97
|
|
|
$
|
76
|
|
|
$
|
154
|
|
|
$
|
108
|
|
Series A convertible preferred stock dividends
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
||||
Deemed dividend on modification of Series A convertible preferred stock
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Deemed dividend on Series A convertible preferred stock redemption
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
||||
Net income from continuing operations attributable to NCR common stockholders
|
|
97
|
|
|
76
|
|
|
68
|
|
|
84
|
|
||||
Income from discontinued operations, net of tax
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Net income attributable to NCR common stockholders
|
|
$
|
102
|
|
|
$
|
76
|
|
|
$
|
73
|
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of shares outstanding
|
|
121.4
|
|
|
123.8
|
|
|
122.1
|
|
|
127.1
|
|
||||
Dilutive effect of as-if converted Series A Convertible Preferred Stock
|
|
26.6
|
|
|
28.0
|
|
|
—
|
|
|
—
|
|
||||
Dilutive effect of restricted stock units and employee stock options
|
|
4.7
|
|
|
2.7
|
|
|
5.1
|
|
|
2.5
|
|
||||
Denominator - from continuing operations and total
|
|
152.7
|
|
|
154.5
|
|
|
127.2
|
|
|
129.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
From continuing operations
|
|
$
|
0.64
|
|
|
$
|
0.49
|
|
|
$
|
0.53
|
|
|
$
|
0.65
|
|
From discontinued operations
|
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Total diluted earnings per share
|
|
$
|
0.67
|
|
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
$
|
0.65
|
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
June 30, 2017
|
||||||||||||||||||
In millions
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
166
|
|
|
$
|
4
|
|
|
Other current liabilities
|
|
$
|
15
|
|
|
$
|
—
|
|
Total derivatives designated as hedging instruments
|
|
|
|
|
$
|
4
|
|
|
|
|
|
|
$
|
—
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
175
|
|
|
$
|
1
|
|
|
Other current liabilities
|
|
$
|
174
|
|
|
$
|
1
|
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
||||||
Total derivatives
|
|
|
|
|
$
|
5
|
|
|
|
|
|
|
$
|
1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
December 31, 2016
|
||||||||||||||||||
In millions
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Location
|
|
Notional
Amount
|
|
Fair
Value
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
251
|
|
|
$
|
18
|
|
|
Other current liabilities
|
|
$
|
56
|
|
|
$
|
1
|
|
Total derivatives designated as hedging instruments
|
|
|
|
|
$
|
18
|
|
|
|
|
|
|
$
|
1
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
165
|
|
|
$
|
1
|
|
|
Other current liabilities
|
|
$
|
218
|
|
|
$
|
1
|
|
Total derivatives not designated as hedging instruments
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
||||||
Total derivatives
|
|
|
|
|
$
|
19
|
|
|
|
|
|
|
$
|
2
|
|
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, 2017
|
|
For the three months ended June 30, 2016
|
|
Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the three months ended June 30, 2017
|
|
For the three months ended June 30, 2016
|
|
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, 2017
|
|
For the three months ended June 30, 2016
|
||||||||||||
Interest rate swap
(1)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
$
|
(6
|
)
|
|
$
|
3
|
|
|
Cost of products
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
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, 2017
|
|
For the six months ended June 30, 2016
|
|
Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations (Effective Portion)
|
|
For the six months ended June 30, 2017
|
|
For the six months ended June 30, 2016
|
|
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, 2017
|
|
For the six months ended June 30, 2016
|
||||||||||||
Interest rate swap
(1)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
$
|
(10
|
)
|
|
$
|
1
|
|
|
Cost of products
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
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
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign exchange contracts
|
Other (expense), net
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
|
|
June 30, 2017
|
||||||||||||
In millions
|
June 30, 2017
|
|
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)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
(3)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Total
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
|
December 31, 2016
|
||||||||||||
In millions
|
December 31, 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)
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
(2)
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Total
|
$
|
24
|
|
|
$
|
5
|
|
|
$
|
19
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
(3)
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
•
|
Software
- Our software portfolio includes industry-based software applications and application suites for the financial services, retail, hospitality and small business industries. We also offer other industry-oriented software applications, including cash management software, video banking software, fraud and loss-prevention applications, check and document imaging, remote-deposit capture and customer-facing digital banking applications for the financial services industry; and secure electronic and mobile payment solutions, sector-specific point of sale software applications, and back-office inventory and store and restaurant management software applications for the retail and hospitality industries. Additionally, we provide ongoing software support and maintenance services, as well as consulting and implementation services for our software solutions.
|
•
|
Services
- Our global end-to-end services solutions include assessment and preparation, staging, installation, implementation, and maintenance and support for our hardware solutions. We also provide systems management and complete managed services for our product offerings. In addition, we provide servicing for third party networking products and computer hardware from select manufacturers.
|
•
|
Hardware
- Our hardware solutions include our suite of financial-oriented self-service ATM-related hardware, and our retail- and hospitality-oriented point of sale terminal, self-checkout kiosk and related hardware. We also offer other self-service kiosks, such as self-check in/out kiosks for airlines, and wayfinding solutions for buildings and campuses.
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Revenue by segment
|
|
|
|
|
|
|
|
||||||||
Software
|
$
|
464
|
|
|
$
|
452
|
|
|
$
|
916
|
|
|
$
|
871
|
|
Services
|
588
|
|
|
574
|
|
|
1,145
|
|
|
1,117
|
|
||||
Hardware
(1)
|
541
|
|
|
594
|
|
|
1,010
|
|
|
1,076
|
|
||||
Consolidated revenue
|
1,593
|
|
|
1,620
|
|
|
3,071
|
|
|
3,064
|
|
||||
Operating income by segment
|
|
|
|
|
|
|
|
||||||||
Software
|
128
|
|
|
144
|
|
|
253
|
|
|
259
|
|
||||
Services
|
75
|
|
|
49
|
|
|
120
|
|
|
83
|
|
||||
Hardware
|
12
|
|
|
14
|
|
|
2
|
|
|
4
|
|
||||
Subtotal - segment operating income
|
215
|
|
|
207
|
|
|
375
|
|
|
346
|
|
||||
Other adjustments
(2)
|
37
|
|
|
44
|
|
|
80
|
|
|
82
|
|
||||
Income from operations
|
$
|
178
|
|
|
$
|
163
|
|
|
$
|
295
|
|
|
$
|
264
|
|
(1)
|
On May 27, 2016, NCR completed the sale of all but the Middle East and Africa (MEA) assets of its Interactive Printer Solutions (IPS) business to Atlas Holdings LLC. For
the three and six months ended
June 30, 2016
, revenues from the results of IPS operations, other than MEA, were
$52 million
and
$124 million
, respectively.
|
(2)
|
The following table presents the other adjustments for NCR:
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Transformation / restructuring costs
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
21
|
|
|
$
|
15
|
|
Acquisition-related amortization of intangible assets
|
28
|
|
|
32
|
|
|
57
|
|
|
64
|
|
||||
Acquisition-related costs
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Total other adjustments
|
$
|
37
|
|
|
$
|
44
|
|
|
$
|
80
|
|
|
$
|
82
|
|
In millions
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Product revenue
|
$
|
618
|
|
|
$
|
676
|
|
|
$
|
1,172
|
|
|
$
|
1,224
|
|
Professional services and installation services revenue
|
261
|
|
|
254
|
|
|
488
|
|
|
463
|
|
||||
Recurring revenue, including maintenance and cloud revenue
|
714
|
|
|
690
|
|
|
1,411
|
|
|
1,377
|
|
||||
Total revenue
|
$
|
1,593
|
|
|
$
|
1,620
|
|
|
$
|
3,071
|
|
|
$
|
3,064
|
|
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, 2016
|
$
|
(224
|
)
|
$
|
6
|
|
$
|
13
|
|
$
|
(205
|
)
|
Other comprehensive income (loss) before reclassifications
|
29
|
|
—
|
|
(7
|
)
|
22
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
(4
|
)
|
(3
|
)
|
(7
|
)
|
||||
Net current period other comprehensive income (loss)
|
29
|
|
(4
|
)
|
(10
|
)
|
15
|
|
||||
Balance as of June 30, 2017
|
$
|
(195
|
)
|
$
|
2
|
|
$
|
3
|
|
$
|
(190
|
)
|
|
|
For the three months ended June 30, 2017
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Amortization of Actuarial Gain (Loss)
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of products
|
$
|
—
|
|
$
|
—
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Cost of services
|
1
|
|
—
|
|
—
|
|
|
1
|
|
||||
|
Selling, general and administrative expenses
|
(1
|
)
|
(2
|
)
|
—
|
|
|
(3
|
)
|
||||
|
Research and development expenses
|
—
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
||||
|
Total before tax
|
$
|
—
|
|
$
|
(3
|
)
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
Tax expense
|
|
|
|
|
1
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(3
|
)
|
|
|
For the three months ended June 30, 2016
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Amortization of Actuarial Gain
|
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 six months ended June 30, 2017
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Amortization of Actuarial Gain
|
Amortization of Prior Service Benefit
|
Effective Cash Flow Hedges
|
|
Total
|
|||||||||
Affected line in Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
|||||||||
|
Cost of products
|
$
|
—
|
|
$
|
—
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
Cost of services
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
||||
|
Selling, general and administrative expenses
|
(1
|
)
|
(2
|
)
|
—
|
|
|
(3
|
)
|
||||
|
Research and development expenses
|
—
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
||||
|
Total before tax
|
$
|
(1
|
)
|
$
|
(5
|
)
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
Tax expense
|
|
|
|
|
2
|
|
|||||||
|
Total reclassifications, net of tax
|
|
|
|
|
$
|
(7
|
)
|
|
|
For the six months ended June 30, 2016
|
||||||||||||
|
Employee Benefit Plans
|
|
|
|
||||||||||
In millions
|
Amortization of Actuarial Gain
|
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
|
)
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Severance and other employee-related costs
|
|
|
|
|
|
|
|
||||||||
ASC 712 charges included in restructuring-related charges
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
ASC 420 charges included in restructuring-related charges
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Inventory-related charges
|
|
|
|
|
|
|
|
||||||||
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
|
|
||||
Other exit costs
|
|
|
|
|
|
|
|
||||||||
Other exit costs included in restructuring-related charges
|
—
|
|
|
3
|
|
|
—
|
|
|
4
|
|
||||
Total restructuring charges
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
10
|
|
In millions
|
2017
|
|
2016
|
||||
Employee Severance and Other Exit Costs
|
|
|
|
||||
Beginning balance as of January 1
|
$
|
1
|
|
|
$
|
20
|
|
Cost recognized during the period
|
—
|
|
|
6
|
|
||
Change in estimated payments
|
—
|
|
|
(2
|
)
|
||
Utilization
|
(1
|
)
|
|
(16
|
)
|
||
Ending balance as of June 30
|
$
|
—
|
|
|
$
|
8
|
|
In millions
|
June 30, 2017
|
|
December 31, 2016
|
||||
Accounts receivable
|
|
|
|
||||
Trade
|
$
|
1,321
|
|
|
$
|
1,266
|
|
Other
|
39
|
|
|
57
|
|
||
Accounts receivable, gross
|
1,360
|
|
|
1,323
|
|
||
Less: allowance for doubtful accounts
|
(39
|
)
|
|
(41
|
)
|
||
Total accounts receivable, net
|
$
|
1,321
|
|
|
$
|
1,282
|
|
In millions
|
June 30, 2017
|
|
December 31, 2016
|
||||
Inventories
|
|
|
|
||||
Work in process and raw materials
|
$
|
203
|
|
|
$
|
154
|
|
Finished goods
|
219
|
|
|
149
|
|
||
Service parts
|
406
|
|
|
396
|
|
||
Total inventories
|
$
|
828
|
|
|
$
|
699
|
|
•
|
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, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
327
|
|
|
$
|
13
|
|
|
$
|
338
|
|
|
$
|
(60
|
)
|
|
$
|
618
|
|
Service revenue
|
422
|
|
|
7
|
|
|
546
|
|
|
—
|
|
|
975
|
|
|||||
Total revenue
|
749
|
|
|
20
|
|
|
884
|
|
|
(60
|
)
|
|
1,593
|
|
|||||
Cost of products
|
256
|
|
|
9
|
|
|
273
|
|
|
(60
|
)
|
|
478
|
|
|||||
Cost of services
|
291
|
|
|
3
|
|
|
358
|
|
|
—
|
|
|
652
|
|
|||||
Selling, general and administrative expenses
|
116
|
|
|
1
|
|
|
110
|
|
|
—
|
|
|
227
|
|
|||||
Research and development expenses
|
34
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
58
|
|
|||||
Total operating expenses
|
697
|
|
|
13
|
|
|
765
|
|
|
(60
|
)
|
|
1,415
|
|
|||||
Income (loss) from operations
|
52
|
|
|
7
|
|
|
119
|
|
|
—
|
|
|
178
|
|
|||||
Interest expense
|
(39
|
)
|
|
—
|
|
|
(19
|
)
|
|
17
|
|
|
(41
|
)
|
|||||
Other (expense) income, net
|
11
|
|
|
(1
|
)
|
|
—
|
|
|
(17
|
)
|
|
(7
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
24
|
|
|
6
|
|
|
100
|
|
|
—
|
|
|
130
|
|
|||||
Income tax expense (benefit)
|
10
|
|
|
2
|
|
|
21
|
|
|
—
|
|
|
33
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
14
|
|
|
4
|
|
|
79
|
|
|
—
|
|
|
97
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
83
|
|
|
90
|
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
97
|
|
|
94
|
|
|
79
|
|
|
(173
|
)
|
|
97
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Net income (loss)
|
$
|
102
|
|
|
$
|
94
|
|
|
$
|
79
|
|
|
$
|
(173
|
)
|
|
$
|
102
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
102
|
|
|
$
|
94
|
|
|
$
|
79
|
|
|
$
|
(173
|
)
|
|
$
|
102
|
|
Total comprehensive income (loss)
|
99
|
|
|
107
|
|
|
76
|
|
|
(183
|
)
|
|
99
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
99
|
|
|
$
|
107
|
|
|
$
|
76
|
|
|
$
|
(183
|
)
|
|
$
|
99
|
|
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
|
$
|
318
|
|
|
$
|
39
|
|
|
$
|
425
|
|
|
$
|
(106
|
)
|
|
$
|
676
|
|
Service revenue
|
395
|
|
|
9
|
|
|
540
|
|
|
—
|
|
|
944
|
|
|||||
Total revenue
|
713
|
|
|
48
|
|
|
965
|
|
|
(106
|
)
|
|
1,620
|
|
|||||
Cost of products
|
249
|
|
|
9
|
|
|
365
|
|
|
(106
|
)
|
|
517
|
|
|||||
Cost of services
|
283
|
|
|
3
|
|
|
371
|
|
|
—
|
|
|
657
|
|
|||||
Selling, general and administrative expenses
|
128
|
|
|
1
|
|
|
100
|
|
|
—
|
|
|
229
|
|
|||||
Research and development expenses
|
29
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
50
|
|
|||||
Restructuring-related charges
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Total operating expenses
|
693
|
|
|
13
|
|
|
857
|
|
|
(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
|
|
|
92
|
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
76
|
|
|
107
|
|
|
66
|
|
|
(175
|
)
|
|
74
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
76
|
|
|
$
|
107
|
|
|
$
|
66
|
|
|
$
|
(175
|
)
|
|
$
|
74
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss) attributable to NCR
|
$
|
76
|
|
|
$
|
107
|
|
|
$
|
68
|
|
|
$
|
(175
|
)
|
|
$
|
76
|
|
Total comprehensive income (loss)
|
58
|
|
|
66
|
|
|
47
|
|
|
(117
|
)
|
|
54
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
58
|
|
|
$
|
66
|
|
|
$
|
51
|
|
|
$
|
(117
|
)
|
|
$
|
58
|
|
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
|
|||||||||||||||||||
For the six months ended June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Product revenue
|
$
|
610
|
|
|
$
|
53
|
|
|
$
|
673
|
|
|
$
|
(164
|
)
|
|
$
|
1,172
|
|
Service revenue
|
827
|
|
|
14
|
|
|
1,058
|
|
|
—
|
|
|
1,899
|
|
|||||
Total revenue
|
1,437
|
|
|
67
|
|
|
1,731
|
|
|
(164
|
)
|
|
3,071
|
|
|||||
Cost of products
|
464
|
|
|
22
|
|
|
580
|
|
|
(164
|
)
|
|
902
|
|
|||||
Cost of services
|
576
|
|
|
5
|
|
|
712
|
|
|
—
|
|
|
1,293
|
|
|||||
Selling, general and administrative expenses
|
234
|
|
|
2
|
|
|
220
|
|
|
—
|
|
|
456
|
|
|||||
Research and development expenses
|
60
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
125
|
|
|||||
Total operating expenses
|
1,334
|
|
|
29
|
|
|
1,577
|
|
|
(164
|
)
|
|
2,776
|
|
|||||
Income (loss) from operations
|
103
|
|
|
38
|
|
|
154
|
|
|
—
|
|
|
295
|
|
|||||
Interest expense
|
(78
|
)
|
|
—
|
|
|
(35
|
)
|
|
33
|
|
|
(80
|
)
|
|||||
Other (expense) income, net
|
9
|
|
|
(1
|
)
|
|
11
|
|
|
(33
|
)
|
|
(14
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
34
|
|
|
37
|
|
|
130
|
|
|
—
|
|
|
201
|
|
|||||
Income tax expense (benefit)
|
9
|
|
|
18
|
|
|
20
|
|
|
—
|
|
|
47
|
|
|||||
Income (loss) from continuing operations before earnings in subsidiaries
|
25
|
|
|
19
|
|
|
110
|
|
|
—
|
|
|
154
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
129
|
|
|
97
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
154
|
|
|
116
|
|
|
110
|
|
|
(226
|
)
|
|
154
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Net income (loss)
|
$
|
159
|
|
|
$
|
116
|
|
|
$
|
110
|
|
|
$
|
(226
|
)
|
|
$
|
159
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to NCR
|
$
|
159
|
|
|
$
|
116
|
|
|
$
|
110
|
|
|
$
|
(226
|
)
|
|
$
|
159
|
|
Total comprehensive income (loss)
|
174
|
|
|
141
|
|
|
119
|
|
|
(260
|
)
|
|
174
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
174
|
|
|
$
|
141
|
|
|
$
|
119
|
|
|
$
|
(260
|
)
|
|
$
|
174
|
|
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
|
$
|
552
|
|
|
$
|
55
|
|
|
$
|
787
|
|
|
$
|
(170
|
)
|
|
$
|
1,224
|
|
Service revenue
|
776
|
|
|
17
|
|
|
1,047
|
|
|
—
|
|
|
1,840
|
|
|||||
Total revenue
|
1,328
|
|
|
72
|
|
|
1,834
|
|
|
(170
|
)
|
|
3,064
|
|
|||||
Cost of products
|
430
|
|
|
16
|
|
|
683
|
|
|
(170
|
)
|
|
959
|
|
|||||
Cost of services
|
570
|
|
|
6
|
|
|
703
|
|
|
—
|
|
|
1,279
|
|
|||||
Selling, general and administrative expenses
|
250
|
|
|
2
|
|
|
201
|
|
|
—
|
|
|
453
|
|
|||||
Research and development expenses
|
57
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
103
|
|
|||||
Restructuring-related charges
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Total operating expenses
|
1,313
|
|
|
24
|
|
|
1,633
|
|
|
(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
|
|
|
133
|
|
|
—
|
|
|
(266
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
108
|
|
|
151
|
|
|
113
|
|
|
(266
|
)
|
|
106
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
108
|
|
|
$
|
151
|
|
|
$
|
113
|
|
|
$
|
(266
|
)
|
|
$
|
106
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss) attributable to NCR
|
$
|
108
|
|
|
$
|
151
|
|
|
$
|
115
|
|
|
$
|
(266
|
)
|
|
$
|
108
|
|
Total comprehensive income (loss)
|
82
|
|
|
101
|
|
|
75
|
|
|
(184
|
)
|
|
74
|
|
|||||
Less comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Comprehensive income (loss) attributable to NCR common stockholders
|
$
|
82
|
|
|
$
|
101
|
|
|
$
|
83
|
|
|
$
|
(184
|
)
|
|
$
|
82
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
18
|
|
|
$
|
10
|
|
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
377
|
|
Accounts receivable, net
|
59
|
|
|
19
|
|
|
1,243
|
|
|
—
|
|
|
1,321
|
|
|||||
Inventories
|
304
|
|
|
12
|
|
|
512
|
|
|
—
|
|
|
828
|
|
|||||
Due from affiliates
|
627
|
|
|
1,633
|
|
|
497
|
|
|
(2,757
|
)
|
|
—
|
|
|||||
Other current assets
|
131
|
|
|
40
|
|
|
181
|
|
|
(62
|
)
|
|
290
|
|
|||||
Total current assets
|
1,139
|
|
|
1,714
|
|
|
2,782
|
|
|
(2,819
|
)
|
|
2,816
|
|
|||||
Property, plant and equipment, net
|
153
|
|
|
—
|
|
|
151
|
|
|
—
|
|
|
304
|
|
|||||
Goodwill
|
988
|
|
|
—
|
|
|
1,748
|
|
|
—
|
|
|
2,736
|
|
|||||
Intangibles, net
|
162
|
|
|
—
|
|
|
456
|
|
|
—
|
|
|
618
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
|
107
|
|
|||||
Deferred income taxes
|
530
|
|
|
98
|
|
|
85
|
|
|
(102
|
)
|
|
611
|
|
|||||
Investments in subsidiaries
|
3,440
|
|
|
2,844
|
|
|
—
|
|
|
(6,284
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,019
|
|
|
1
|
|
|
38
|
|
|
(1,058
|
)
|
|
—
|
|
|||||
Other assets
|
426
|
|
|
57
|
|
|
92
|
|
|
—
|
|
|
575
|
|
|||||
Total assets
|
$
|
7,857
|
|
|
$
|
4,714
|
|
|
$
|
5,459
|
|
|
$
|
(10,263
|
)
|
|
$
|
7,767
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
267
|
|
Accounts payable
|
310
|
|
|
2
|
|
|
419
|
|
|
—
|
|
|
731
|
|
|||||
Payroll and benefits liabilities
|
105
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
205
|
|
|||||
Deferred service revenue and customer deposits
|
236
|
|
|
4
|
|
|
281
|
|
|
—
|
|
|
521
|
|
|||||
Due to affiliates
|
1,916
|
|
|
140
|
|
|
701
|
|
|
(2,757
|
)
|
|
—
|
|
|||||
Other current liabilities
|
200
|
|
|
3
|
|
|
248
|
|
|
(62
|
)
|
|
389
|
|
|||||
Total current liabilities
|
2,819
|
|
|
149
|
|
|
1,964
|
|
|
(2,819
|
)
|
|
2,113
|
|
|||||
Long-term debt
|
3,013
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3,015
|
|
|||||
Pension and indemnity plan liabilities
|
481
|
|
|
—
|
|
|
283
|
|
|
—
|
|
|
764
|
|
|||||
Postretirement and postemployment benefits liabilities
|
24
|
|
|
3
|
|
|
100
|
|
|
—
|
|
|
127
|
|
|||||
Income tax accruals
|
17
|
|
|
2
|
|
|
121
|
|
|
—
|
|
|
140
|
|
|||||
Due to affiliates
|
—
|
|
|
38
|
|
|
1,020
|
|
|
(1,058
|
)
|
|
—
|
|
|||||
Other liabilities
|
75
|
|
|
5
|
|
|
183
|
|
|
(102
|
)
|
|
161
|
|
|||||
Total liabilities
|
6,429
|
|
|
197
|
|
|
3,673
|
|
|
(3,979
|
)
|
|
6,320
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Series A convertible preferred stock
|
786
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
786
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total NCR stockholders’ equity
|
642
|
|
|
4,517
|
|
|
1,767
|
|
|
(6,284
|
)
|
|
642
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total stockholders’ equity
|
642
|
|
|
4,517
|
|
|
1,772
|
|
|
(6,284
|
)
|
|
647
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,857
|
|
|
$
|
4,714
|
|
|
$
|
5,459
|
|
|
$
|
(10,263
|
)
|
|
$
|
7,767
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
December 31, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
65
|
|
|
$
|
12
|
|
|
421
|
|
|
$
|
—
|
|
|
$
|
498
|
|
|
Accounts receivable, net
|
64
|
|
|
25
|
|
|
1,193
|
|
|
—
|
|
|
1,282
|
|
|||||
Inventories
|
272
|
|
|
13
|
|
|
414
|
|
|
—
|
|
|
699
|
|
|||||
Due from affiliates
|
680
|
|
|
1,509
|
|
|
400
|
|
|
(2,589
|
)
|
|
—
|
|
|||||
Other current assets
|
140
|
|
|
37
|
|
|
162
|
|
|
(61
|
)
|
|
278
|
|
|||||
Total current assets
|
1,221
|
|
|
1,596
|
|
|
2,590
|
|
|
(2,650
|
)
|
|
2,757
|
|
|||||
Property, plant and equipment, net
|
129
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
287
|
|
|||||
Goodwill
|
988
|
|
|
—
|
|
|
1,739
|
|
|
—
|
|
|
2,727
|
|
|||||
Intangibles, net
|
176
|
|
|
—
|
|
|
496
|
|
|
—
|
|
|
672
|
|
|||||
Prepaid pension cost
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
94
|
|
|||||
Deferred income taxes
|
499
|
|
|
98
|
|
|
82
|
|
|
(104
|
)
|
|
575
|
|
|||||
Investments in subsidiaries
|
3,275
|
|
|
2,822
|
|
|
—
|
|
|
(6,097
|
)
|
|
—
|
|
|||||
Due from affiliates
|
1,053
|
|
|
—
|
|
|
35
|
|
|
(1,088
|
)
|
|
—
|
|
|||||
Other assets
|
405
|
|
|
56
|
|
|
100
|
|
|
—
|
|
|
561
|
|
|||||
Total assets
|
$
|
7,746
|
|
|
$
|
4,572
|
|
|
$
|
5,294
|
|
|
$
|
(9,939
|
)
|
|
$
|
7,673
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
50
|
|
Accounts payable
|
310
|
|
|
2
|
|
|
469
|
|
|
—
|
|
|
781
|
|
|||||
Payroll and benefits liabilities
|
129
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
234
|
|
|||||
Deferred service revenue and customer deposits
|
193
|
|
|
5
|
|
|
270
|
|
|
—
|
|
|
468
|
|
|||||
Due to affiliates
|
1,736
|
|
|
154
|
|
|
699
|
|
|
(2,589
|
)
|
|
—
|
|
|||||
Other current liabilities
|
224
|
|
|
6
|
|
|
263
|
|
|
(61
|
)
|
|
432
|
|
|||||
Total current liabilities
|
2,638
|
|
|
167
|
|
|
1,810
|
|
|
(2,650
|
)
|
|
1,965
|
|
|||||
Long-term debt
|
2,998
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3,001
|
|
|||||
Pension and indemnity plan liabilities
|
473
|
|
|
—
|
|
|
266
|
|
|
—
|
|
|
739
|
|
|||||
Postretirement and postemployment benefits liabilities
|
24
|
|
|
3
|
|
|
100
|
|
|
—
|
|
|
127
|
|
|||||
Income tax accruals
|
17
|
|
|
4
|
|
|
121
|
|
|
—
|
|
|
142
|
|
|||||
Due to affiliates
|
—
|
|
|
35
|
|
|
1,053
|
|
|
(1,088
|
)
|
|
—
|
|
|||||
Other liabilities
|
54
|
|
|
5
|
|
|
183
|
|
|
(104
|
)
|
|
138
|
|
|||||
Total liabilities
|
6,204
|
|
|
214
|
|
|
3,536
|
|
|
(3,842
|
)
|
|
6,112
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Series A convertible preferred stock
|
847
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
847
|
|
|||||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total NCR stockholders’ equity
|
695
|
|
|
4,358
|
|
|
1,739
|
|
|
(6,097
|
)
|
|
695
|
|
|||||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Total stockholders’ equity
|
695
|
|
|
4,358
|
|
|
1,743
|
|
|
(6,097
|
)
|
|
699
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
7,746
|
|
|
$
|
4,572
|
|
|
$
|
5,294
|
|
|
$
|
(9,939
|
)
|
|
$
|
7,673
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the six months ended June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
Parent Issuer
|
|
Guarantor Subsidiary
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
258
|
|
|
$
|
(22
|
)
|
|
$
|
(92
|
)
|
|
$
|
(6
|
)
|
|
$
|
138
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(25
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Additions to capitalized software
|
(57
|
)
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(84
|
)
|
|||||
Proceeds from (payments of) intercompany notes
|
133
|
|
|
20
|
|
|
—
|
|
|
(153
|
)
|
|
—
|
|
|||||
Investments in equity affiliates
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Other investing activities, net
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
48
|
|
|
20
|
|
|
(44
|
)
|
|
(151
|
)
|
|
(127
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Short term borrowings, net
|
2
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
13
|
|
|||||
Payments on term credit facilities
|
(23
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
Payments on revolving credit facilities
|
(575
|
)
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(615
|
)
|
|||||
Borrowings on revolving credit facilities
|
615
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
855
|
|
|||||
Repurchase of Company common stock
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|||||
Proceeds from employee stock plans
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Other financing activities
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Equity contribution
|
—
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|||||
Dividend distribution to consolidated subsidiaries
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|||||
Borrowings (repayments) of intercompany notes
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
153
|
|
|
—
|
|
|||||
Tax withholding payments on behalf of employees
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(348
|
)
|
|
—
|
|
|
52
|
|
|
157
|
|
|
(139
|
)
|
|||||
Cash flows from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash used in operating activities
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
(47
|
)
|
|
(2
|
)
|
|
(72
|
)
|
|
—
|
|
|
(121
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
65
|
|
|
12
|
|
|
421
|
|
|
—
|
|
|
498
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
18
|
|
|
$
|
10
|
|
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
377
|
|
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
|
$
|
206
|
|
|
$
|
(74
|
)
|
|
$
|
14
|
|
|
$
|
(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 costs
|
(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
|
5
|
|
|
2
|
|
|
(3
|
)
|
|
—
|
|
|
4
|
|
|||||
Cash and cash equivalents at beginning of period
|
15
|
|
|
20
|
|
|
293
|
|
|
—
|
|
|
328
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
20
|
|
|
$
|
22
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
|
•
|
Revenue
decreased
approximately
2%
from the prior year period, and increased
3%
excluding unfavorable foreign currency impacts and adjusting for the divestiture of our Interactive Printer Solutions (IPS) business;
|
•
|
Software revenue increased
3%
from the prior year period, driven by cloud growth of
9%
; and
|
•
|
Gross margin rate expanded
160
basis points to
29.1%
as a result of strength in our Services and Hardware segments.
|
•
|
Sales Enablement
- Providing our sales force with the training, tools and processes necessary for consultative selling, supported by a strong solutions management function that innovates the way in which we go to market, and expanding our organization of channel partners.
|
•
|
Services Transformation
- Driving improved services performance by focusing on a higher mix of managed services, improving our productivity and efficiency, expanding our remote diagnostics and repair capabilities and creating greater discipline in our product lifecycle management.
|
•
|
Evolving our Business Model
- Continuing the shift in our business model to provide innovative end-to-end software platform solutions for our customers, with best in class software support while keeping an efficient cost structure to create competitive advantage.
|
•
|
Investing in Innovation
- Optimizing our operating model and prioritizing 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
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
1,593
|
|
|
$
|
1,620
|
|
|
$
|
3,071
|
|
|
$
|
3,064
|
|
Gross margin
|
$
|
463
|
|
|
$
|
446
|
|
|
$
|
876
|
|
|
$
|
826
|
|
Gross margin as a percentage of revenue
|
29.1
|
%
|
|
27.5
|
%
|
|
28.5
|
%
|
|
27.0
|
%
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
$
|
227
|
|
|
$
|
229
|
|
|
$
|
456
|
|
|
$
|
453
|
|
Research and development expenses
|
58
|
|
|
50
|
|
|
125
|
|
|
103
|
|
||||
Restructuring-related charges
|
—
|
|
|
4
|
|
|
—
|
|
|
6
|
|
||||
Income from operations
|
$
|
178
|
|
|
$
|
163
|
|
|
$
|
295
|
|
|
$
|
264
|
|
In millions
|
2017
|
% of Total
|
|
2016
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Americas
|
$
|
915
|
|
57%
|
|
$
|
919
|
|
57%
|
|
—%
|
3%
|
Europe, Middle East Africa (EMEA)
|
454
|
|
29%
|
|
477
|
|
29%
|
|
(5)%
|
2%
|
||
Asia Pacific (APJ)
|
224
|
|
14%
|
|
224
|
|
14%
|
|
—%
|
3%
|
||
Consolidated revenue
|
$
|
1,593
|
|
100%
|
|
$
|
1,620
|
|
100%
|
|
(2)%
|
3%
|
In millions
|
2017
|
% of Total
|
|
2016
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Americas
|
$
|
1,762
|
|
57%
|
|
$
|
1,738
|
|
57%
|
|
1%
|
6%
|
Europe, Middle East Africa (EMEA)
|
876
|
|
29%
|
|
904
|
|
29%
|
|
(3)%
|
6%
|
||
Asia Pacific (APJ)
|
433
|
|
14%
|
|
422
|
|
14%
|
|
3%
|
5%
|
||
Consolidated revenue
|
$
|
3,071
|
|
100%
|
|
$
|
3,064
|
|
100%
|
|
—%
|
6%
|
In millions
|
2017
|
% of Total
|
|
2016
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Software
|
$
|
464
|
|
29%
|
|
$
|
452
|
|
28%
|
|
3%
|
3%
|
Services
|
588
|
|
37%
|
|
574
|
|
35%
|
|
2%
|
4%
|
||
Hardware
|
541
|
|
34%
|
|
594
|
|
37%
|
|
(9)%
|
1%
|
||
Consolidated revenue
|
$
|
1,593
|
|
100%
|
|
$
|
1,620
|
|
100%
|
|
(2)%
|
3%
|
In millions
|
2017
|
% of Total
|
|
2016
|
% of Total
|
|
% Increase (Decrease)
|
% Increase (Decrease) Adjusted Constant Currency
(1)
|
||||
Software
|
$
|
916
|
|
30%
|
|
$
|
871
|
|
29%
|
|
5%
|
6%
|
Services
|
1,145
|
|
37%
|
|
1,117
|
|
36%
|
|
3%
|
4%
|
||
Hardware
|
1,010
|
|
33%
|
|
1,076
|
|
35%
|
|
(6)%
|
7%
|
||
Consolidated revenue
|
$
|
3,071
|
|
100%
|
|
$
|
3,064
|
|
100%
|
|
—%
|
6%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Americas
|
—%
|
—%
|
(3)%
|
3%
|
EMEA
|
(5)%
|
(4)%
|
(3)%
|
2%
|
APJ
|
—%
|
—%
|
(3)%
|
3%
|
Consolidated revenue
|
(2)%
|
(2)%
|
(3)%
|
3%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Americas
|
1%
|
—%
|
(5)%
|
6%
|
EMEA
|
(3)%
|
(4)%
|
(5)%
|
6%
|
APJ
|
3%
|
1%
|
(3)%
|
5%
|
Consolidated revenue
|
—%
|
(1)%
|
(5)%
|
6%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Software
|
3%
|
—%
|
—%
|
3%
|
Services
|
2%
|
(2)%
|
—%
|
4%
|
Hardware
|
(9)%
|
(1)%
|
(9)%
|
1%
|
Consolidated revenue
|
(2)%
|
(2)%
|
(3)%
|
3%
|
|
Revenue % Growth (GAAP)
|
Favorable (unfavorable) FX impact
|
Divestiture impact
|
Revenue % Growth Adjusted Constant Currency (non-GAAP)
|
Software
|
5%
|
(1)%
|
—%
|
6%
|
Services
|
3%
|
(1)%
|
—%
|
4%
|
Hardware
|
(6)%
|
—%
|
(13)%
|
7%
|
Consolidated revenue
|
—%
|
(1)%
|
(5)%
|
6%
|
•
|
Software
- Our software portfolio includes industry-based software applications and application suites for the financial services, retail, hospitality and small business industries. We also offer other industry-oriented software applications including cash management software, video banking software, fraud and loss prevention applications, check and document imaging, remote-deposit capture and customer-facing digital banking applications for the financial services industry; and secure electronic and mobile payment solutions, sector-specific point of sale software applications, and back-office inventory and store and restaurant management applications for the retail and hospitality industries. Additionally, we provide ongoing software support and maintenance services, as well as consulting and implementation services for our software solutions.
|
•
|
Services
- Our global end-to-end services solutions include assessment and preparation, staging, installation, implementation, and maintenance and support for our hardware solutions. We also provide systems management and complete managed services for our product offerings. In addition, we provide servicing for third party networking products and computer hardware from select manufacturers.
|
•
|
Hardware
- Our hardware solutions include our suite of financial-oriented self-service ATM-related hardware, and our retail- and hospitality-oriented POS terminal and self-checkout kiosk and related hardware. We also offer other self-service kiosks, such as self-check in/out kiosks for airlines, and wayfinding solutions for buildings and campuses.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
464
|
|
|
$
|
452
|
|
|
$
|
916
|
|
|
$
|
871
|
|
Operating income
|
$
|
128
|
|
|
$
|
144
|
|
|
$
|
253
|
|
|
$
|
259
|
|
Operating income as a percentage of revenue
|
27.6
|
%
|
|
31.9
|
%
|
|
27.6
|
%
|
|
29.7
|
%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
588
|
|
|
$
|
574
|
|
|
$
|
1,145
|
|
|
$
|
1,117
|
|
Operating income
|
$
|
75
|
|
|
$
|
49
|
|
|
$
|
120
|
|
|
$
|
83
|
|
Operating income as a percentage of revenue
|
12.8
|
%
|
|
8.5
|
%
|
|
10.5
|
%
|
|
7.4
|
%
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||
In millions
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
541
|
|
|
$
|
594
|
|
|
$
|
1,010
|
|
|
$
|
1,076
|
|
Operating income
|
$
|
12
|
|
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Operating income as a percentage of revenue
|
2.2
|
%
|
|
2.4
|
%
|
|
0.2
|
%
|
|
0.4
|
%
|
|
Six months ended June 30
|
||||||
In millions
|
2017
|
|
2016
|
||||
Net cash provided by operating activities
|
$
|
138
|
|
|
$
|
144
|
|
Less: Expenditures for property, plant and equipment
|
(43
|
)
|
|
(24
|
)
|
||
Less: Additions to capitalized software
|
(84
|
)
|
|
(74
|
)
|
||
Net cash used in discontinued operations
|
(5
|
)
|
|
(20
|
)
|
||
Free cash flow (non-GAAP)
|
$
|
6
|
|
|
$
|
26
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
2.1
|
Separation and Distribution Agreement, dated as of August 27, 2007, between NCR Corporation and Teradata Corporation (Exhibit 10.1 to the Current Report on Form 8-K of Teradata Corporation dated September 6, 2007).
|
|
|
Articles of Amendment and Restatement of NCR Corporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of NCR Corporation for the quarter ended June 30, 2016).
|
|
|
|
Bylaws of NCR Corporation, as amended and restated on October 11, 2016 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of NCR Corporation dated October 11, 2016).
|
|
|
|
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).
|
|
|
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).
|
|
|
|
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 Current Report on Form 8-K of NCR Corporation filed December 18, 2012).
|
|
|
|
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”)).
|
|
|
|
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 on Form 8-K of NCR Corporation dated January 10, 2014 (the “January 10, 2014 Form 8-K”)).
|
|
|
|
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).
|
|
|
|
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
|
Form of 2017 Director Restricted Stock Unit Grant Statement under the NCR Corporation 2013 Stock Incentive Plan (the “2013 Stock Incentive Plan”) and NCR Corporation 2017 Stock Incentive Plan (the “2017 Stock Incentive Plan”).
|
|
|
10.2
|
Form of 2017 Stock Option Award Agreement under the 2013 Stock Incentive Plan and 2017 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.
|
|
|
|
|
NCR CORPORATION
|
||
|
|
|
|
|
Date:
|
July 28, 2017
|
By:
|
|
/s/ Robert Fishman
|
|
|
|
|
Robert Fishman
Executive Vice President and Chief Financial Officer
|
Name of Grantee
|
Grant Date
|
No.
of Restricted Stock Units
|
Termination Event
|
Treatment of Option
|
Death, Disability or Retirement
|
A pro rata portion of the Option will become Vested, determined by (a) multiplying the number of Shares subject to the Option awarded pursuant to this Agreement, by a fraction the numerator of which is the number of days that you completed as an employee of the Company or an Employer between the Grant Date and the Termination of Employment due to death, Disability or Retirement, and the denominator of which is 1,460 (the “Pro‑rata Fraction”) and then (b) subtracting the portion of the Option that Vested prior to your Termination of Employment. The Vested portion of the Option may be exercised until the earlier of (i) the first (1
st
) year anniversary of the date of death, Disability or Retirement, or (ii) the Expiration Date.
|
Termination for Cause
or Voluntary Resignation
|
The Option will automatically terminate and the entire unexercised Vested and unvested portion of the Option will be forfeited and will not be exercisable as of the date of such Termination of Employment by the Company for Cause or Voluntary Resignation.
|
Termination Other than for Cause
|
The unvested portion of the Option will terminate and be forfeited in the event of a Termination of Employment for a reason not otherwise described in this chart, and the Vested portion may be exercised until the earlier of (a) the ninetieth (90
th
) day after the date of your Termination of Employment, or (b) the Expiration Date.
|
Change in Control Termination
or
Good Reason Termination
|
The Option shall be fully Vested immediately upon your Termination of Employment due to a Change in Control termination or a Good Reason Termination, and the Option may be exercised until the earlier of (i) the first (1
st
) anniversary of your Termination of Employment, or (ii) the Expiration Date.
|
(i)
|
Of the type conducted, authorized, offered, or provided by you on behalf of NCR during the 2 years prior to termination of your NCR employment;
|
(ii)
|
In connection with NCR Competing Products/Services (as defined in Section 10(c)(ii)) that are similar to or serve substantially the same functions as those with respect to which you worked during the 2 years prior to termination of your NCR employment or about which you obtained trade secret or other Confidential Information;
|
(iii)
|
Within the geographic territories (including countries and regions, if applicable, or types, classes or tiers of customers if no geographic territory was assigned to you) where or for which you performed, were assigned, or had responsibilities for such services during the 2 years preceding your termination;
|
(iv)
|
On behalf of a Competing Organization (as defined in Section 10(c)(iii)).
|
ACI Worldwide
|
Glory
|
PCMS
|
Acuative
|
GRG Banking Equipment
|
Pendum - See Burroughs
|
Agilysys
|
GRG International
|
Pinnacle Corp
|
Alkami
|
Hisense Intelligent Commercial System
|
Presidio
|
Allure Global Solutions
|
Hitachi
|
Q2
|
Altametrics
|
Hitachi-Omron Terminal Solutions
|
QSR Automations
|
Appetize
|
HotSchedules Inc
|
Red Prairie Holding (JDA and Escalate)
|
APTOS
|
HP Inc.
|
Retail Pro International
|
Arinc.
|
IBM Corp
|
Revel Systems
|
Bematech - See TOTVS SA
|
IER
|
RTC Quaterion Group
|
Black Box
|
Infor
|
ShopKeep
|
Burroughs (Pendum)
|
Ipsoft
|
SICOM
|
Bypass Mobile LLC
|
ITAB Group
|
SITA
|
CompuCom
|
Itasca Retail Information Systems
|
Sonda
|
Crunchtime
|
Jack Henry & Assoc.
|
Spartan Computer Services
|
Cuscapi
|
Kiosk Info Sys (KIS)
|
SPSS
|
Datalogic SpA
|
Kony Retail Banking
|
Symphony EYC
|
Dell, Inc.
|
Korala Associates Ltd (KAL)
|
Task Retail Technology
|
Diebold Nixdorf
|
Lavu Inc.
|
TIBCO Loyalty Lab
|
Diebold UK
|
LOC Software
|
Tillster
|
Dimension Data
|
Logicalis
|
Toast, Inc.
|
ECR Software Corp
|
Magstar
|
Toshiba TEC
|
Elo
|
Malauzai Software Inc
|
TOTVS SA
|
Epicor
|
Manhattan Associates
|
Unisys
|
eRestaurant Systems
|
Mi9 Retail
|
Upserve (Breadcrumb)
|
FIS
|
Micros – See Oracle
|
Vista Retail Support
|
Fiserv
|
Mobile Travel Technologies
|
Vsoft Corp
|
Fourth Ltd
|
Nautilus Hyosung
|
Wand
|
Fujitsu
|
NSC Group
|
Wayne Fueling Systems
|
FuturePOS
|
OKI (Itautec)
|
Wescom Resources Group
|
Getronics
|
Onepath
|
Wincor Nixdorf UK
|
Gilbarco Veeder-Root
|
Open Table
|
Xpient
|
GK Software
|
Oracle
|
Zebra Technologies Corp
|
Global Payments
|
PAR Technology
|
Zonal Retail Data
|
Date:
|
July 28, 2017
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
Date:
|
July 28, 2017
|
|
/s/ Robert Fishman
|
|
|
|
Robert Fishman
|
|
|
|
Executive 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 28, 2017
|
|
/s/ William Nuti
|
|
|
|
William Nuti
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
Dated:
|
July 28, 2017
|
|
/s/ Robert Fishman
|
|
|
|
Robert Fishman
|
|
|
|
Executive Vice President and Chief Financial Officer
|