NCR Announces Fourth Quarter Results: NCR achieves strong non-pension operating income and free cash flow generation; Software

  NCR Announces Fourth Quarter Results: NCR achieves strong non-pension
  operating income and free cash flow generation; Software revenue growth led
  to continued operational gross margin expansion

  *Non-pension operating income (NPOI)^(1) of $221 million, an increase of
    22%; GAAP income from operations of $297 million, a decrease of 28%
    primarily related to lower pension benefit
  *Free cash flow^(2) generation of$317 million, an increase of 160%; GAAP
    net cash provided by operating activities of$265 million, an increase of
    165%
  *Non-GAAP diluted EPS^(1) of $0.83, an increase of 15%; GAAP diluted EPS of
    $1.21, a decrease of 17% primarily related to lower pension benefit
  *Software revenue increased 27% driving continued operational gross margin
    expansion
  *2014 full year guidance announced

Business Wire

DULUTH, Ga. -- February 6, 2014

NCR Corporation (NYSE: NCR) reported financial results today for the three
months ended December 31, 2013. Reported revenue of $1.67 billion increased 2%
from the fourth quarter of 2012. Fourth-quarter revenue includes an
unfavorable impact of 2% as a result of foreign currency translation.

Non-pension operating income^(1) in the fourth quarter of 2013 was $221
million and non-GAAP diluted EPS^(1) was $0.83 compared to $181 million and
$0.72 in the prior-year period. NCR reported fourth quarter income from
operations of $297 million and diluted EPS of $1.21 compared to $411 million
and $1.45 in the fourth quarter of 2012. Please refer to the tables and
footnotes at the end of this release for explanations and GAAP to non-GAAP
reconciliations.

"I am very proud of the NCR team's many accomplishments in 2013, highlighted
by record financial results and outstanding progress on our strategic
priorities," said Bill Nuti, Chairman and CEO of NCR. "We continue to execute
at a high level as we reinvent NCR and transform our company into a software
and services led business, with an accelerated path to a higher margin,
sustainable growth, and more predictable revenue model - along with a strong
cash generation profile. Once again, we have another healthy outlook for the
forthcoming year. In 2014, we expect a better overall balance across our Lines
of Businesses, geographies and product segments, with another strong year of
software growth. The combination of our organic development and acquired
assets have separated NCR from our traditional competition and placed us on a
path to become the market leader in the burgeoning consumer transaction
technologies category."

              Fourth Quarter 2013 Operating Segment Results^(1)

                              Financial Services

NCR's Financial Services segment generated fourth quarter revenue of $852
million, a decrease of 7% from the fourth quarter of 2012. The decrease was
primarily driven by declines in the Americas theater. Foreign currency
fluctuations had an unfavorable impact on the year-over-year revenue
comparison by 2%.

Operating income for Financial Services was $111 million in the fourth quarter
of 2013 as compared to $100 million in the fourth quarter of 2012. The
increase in operating income was driven by a favorable mix of revenues,
including a higher mix of software revenue and reduced expenses.

                               Retail Solutions

The Retail Solutions segment generated revenue of $536 million in the fourth
quarter of 2013, an increase of 9% from the fourth quarter of 2012. The
increase was driven by growth in all of our theaters due to the impact of the
Retalix business, which contributed $86 million of revenue in the fourth
quarter of 2013. Foreign currency fluctuations had an unfavorable impact on
the year-over-year revenue comparison by 3%.

Operating income for Retail Solutions was $65 million in the fourth quarter of
2013 as compared to $44 million in the fourth quarter of 2012. The increase in
operating income was driven by a higher mix of software revenue and the
contribution of the Retalix business as noted above.

                                 Hospitality

The Hospitality segment generated revenue of $176 million in the fourth
quarter of 2013, an increase of 17% from the fourth quarter of 2012. The
increase was driven by growth in all of our theaters. Foreign currency
fluctuations had an unfavorable impact on the year-over-year revenue
comparison by 1%.

Operating income for Hospitality was $26 million in the fourth quarter of 2013
as compared to $22 million in the fourth quarter of 2012. The increase in
operating income was driven by higher revenues, slightly offset by investment
in sales and development resources.

                             Emerging Industries

The Emerging Industries segment generated revenue of $106 million in the
fourth quarter of 2013, an increase of 31% from the fourth quarter of 2012.
The increase was driven by growth in all of our theaters. Foreign currency
fluctuations had an unfavorable impact on the year-over-year revenue
comparison by 2%.

Operating income for Emerging Industries was $19 million in the fourth quarter
of 2013 as compared to $15 million in the fourth quarter of 2012. The increase
in operating income was due to higher revenues.

                   Fourth Quarter 2013 Business Highlights

                              Financial Services

In the Financial Services segment, NCR greatly strengthened its financial
services software offerings through two acquisitions, received an important
industry certification, and continued to advance its Interactive Teller
technology and other software and hardware solutions across the globe.

On December 2, 2013, NCR entered into a definitive agreement to purchase
Digital Insight Corporation, a leader in online and mobile banking solutions,
and completed the acquisition of Alaric Systems Limited, a provider of secure
transaction switching and fraud prevention software. On January 10, 2014, NCR
completed its acquisition of Digital Insight, which was financed using the net
proceeds from NCR’s December 2013 offering of $1.1 billion of senior notes,
$250 million in incremental term loans under NCR’s senior secured credit
facility and approximately $300 million in additional borrowings under the
revolving portion of NCR’s senior secured credit facility. Together, these
companies complement and extend NCR’s existing capabilities in the banking
industry to form a complete enterprise software platform designed to deliver a
unique and compelling consumer experience across all digital and physical
channels - mobile, online, branch, and ATM.

Also during the quarter, NCR received certification of APTRA^TM Interactive
Teller from First Data, a global leader in electronic commerce and payment
processing. The certification by First Data enables its financial institution
clients to use APTRA^TM Interactive Teller for standard ATM transaction
processing. NCR also expanded its APTRA^TM Interactive Teller customer base
during the quarter as Landmark Bank deployed the first Interactive Teller ATM
in Missouri and First Community Credit Union became the first institution in
Houston with NCR video teller services.

NCR also secured hardware wins in Europe. NCR was chosen by the Royal Bank of
Scotland to install more than 2,000 NCR SelfServ^TM ATMs across the U.K. over
the next three years. NCR also extended its relationship with Automatia, a
leading Finnish ATM network operator, and will replace 400 older, non-NCR ATMs
and 200 NCR Personas series ATMs with 600 new NCR SelfServ^TM 25 and 26 ATMs
which are designed to withstand the extreme low temperatures in Finland.

In Asia, NCR entered into a professional services engagement with the Bank of
China to develop new ATM applications. Additionally, Fukuoka Financial Group,
Inc. deployed the NCR iTRAN^® ImageTrac Series 5, a high-speed document
processing scanner, to improve the operational efficiency for its data entry
and image-item sorting.

                               Retail Solutions

In the Retail Solutions segment, NCR received industry recognition for its
software leadership, introduced NCR Silver 3.0, and secured customer wins for
its software, point-of-sale (POS) and self-checkout solutions.

Cornell Mayo, an NCR subsidiary, was identified as a leader in the 2013 RIS
Software Leaderboard, ranking first in 20 categories and in the top ten for 14
additional categories - more top rankings than any other vendor. The annual
Software Leaderboard, developed and published by RIS News, is considered the
industry’s most influential guide to the top retail technology software
companies.

NCR Silver, NCR’s tablet and mobile-based POS system for small businesses,
announced the release of NCR Silver 3.0, which includes additional features
that make it even easier for small businesses to save time while managing and
growing their businesses. The new functionality supports multiple locations,
gives business owners the ability to set user roles, like Cashier or Manager,
and assign permissions, and includes a new Time Clock feature that simplifies
payroll management. NCR Silver is built to run in the cloud, using
consumer-friendly technology, and works on Apple® devices running iOS, like
the iPad®, iPhone® and iPod touch®. In addition to 7-day live support, NCR
Small Business introduced Silver Sidewalk^TM, a customer community portal
where NCR Silver customers can interact with each other, explore product
features, search the knowledge base, find helpful tips and get assistance from
the Customer Care team.

Retail software customer wins during the quarter included the deployment by
Queensland Frozen Food Services of NCR Power Mobile, an innovative and
easy-to-use business-to-business customer relationship management software
solution.

Additionally, Lukoil, one of the world’s largest oil and gas providers,
deployed NCR’s latest POS software and hardware for petroleum and convenience
stores at more than 170 petrol station convenience stores in Belgium and
updated legacy POS equipment with new NCR technology at more than 400 sites in
six countries in Central and Eastern Europe.

Pilot Flying J, which serves more than 1.3 million customers daily at its more
than 650 travel centers and travel plazas in North America, entered into an
agreement for an omni-commerce NCR retail POS solution that will streamline
deploying and managing in-store, mobile commerce and online storefront
systems.

Scotmid, a convenience store chain with 200 branches in the UK, agreed to
deploy NCR SelfServ™ Checkout solutions to drive profits and improve customer
service and the overall brand experience at its convenience stores. The
solutions reduce queue waiting time and allow employees to be redeployed from
front end checkout to valuable in-aisle functions.

                                 Hospitality

In the Hospitality segment, NCR advanced its Pulse Real-Time offering and
secured customer wins for its Aloha software and POS terminals.

Pulse Real-Time is a SaaS-based mobile analytics engine, available on
Android^® and iOS^® devices. The application helps restaurant operators solve
the challenges of low visibility into operational performance, lack of
predictable data and the inability to be in several places simultaneously.
Pulse Real-Time deployments in the quarter included Ted’s Montana Grill.

During the quarter, NCR also assisted Johnny Rockets’ expansion into Brazil.
Johnny Rockets will open its first two restaurants in Brazil with the support
of NCR Aloha software running on NCR POS technology. Johnny Rockets selected
the NCR POS solution because it is optimized for fast-paced food service
operations.

In addition, Juan Valdez Café stores agreed to replace their PC-based POS
terminals with an NCR solution to enhance customer service and experiences
chain wide. The NCR POS solution includes a guest-facing screen so Juan Valdez
Café stores can create and easily communicate new marketing initiatives, such
as offering special drinks, replacing their previous use of paper-based
advertising.

                             Emerging Industries

During the quarter, in the Emerging Industries segment, NCR continued to
advance its self-service technologies for the travel industry.

Air Macau deployed a self-service airline check-in solution from NCR to enable
its passengers to check-in, access flight information, select seats, and scan
and print boarding passes. NCR will also provide Air Macau with after-sales
service support. NCR also worked with China Southern Airlines (China Southern)
to share its self-service check-in solution at Guangzhou Baiyun International
Airport with Air France, making China Southern the first airline based in
China to share self-service check-in with a foreign airline.

NCR signed a long-term agreement with GuestLogix Inc., the leading global
provider of onboard retail and payment technology solutions to airlines and
the passenger travel industry, to develop a comprehensive and secure solution
that airlines can use to sell additional products and services at multiple
touch points throughout the travel journey, improving the passenger
experience.

NCR also entered into an agreement to provide the United States Transportation
Security Administration (TSA) with a mobile solution that employs NCR boarding
pass scanners and enables TSA agents to enhance security and expedite
passenger identification at checkpoints nationwide.

                   Fourth Quarter 2013 Financial Highlights

Income from operations was $297 million in the fourth quarter of 2013 compared
to $411 million in the fourth quarter of 2012. The decrease was mainly due to
lower pension benefit which decreased from $254 million in the fourth quarter
of 2012 to $99 million in the fourth quarter of 2013. Non-pension operating
income^(1) was $221 million in the fourth quarter of 2013 compared to $181
million in the fourth quarter of 2012. The increase was mainly due to an
increase in software revenues.

Net cash provided by operating activities was $265 million during the fourth
quarter of 2013 compared to net cash provided by operating activities of $100
million in the prior-year period. Free cash flow (net cash from operations and
discontinued operations, less capital expenditures for property, plant and
equipment, additions to capitalized software, and discretionary pension
contributions and settlements)^(2) was a cash inflow of $317 million in the
fourth quarter of 2013, compared to a cash inflow of $122 million in the
fourth quarter of 2012. The increase in free cash flow was driven by improved
profitability, improvements in working capital, a reduction in cash outflows
related to discontinued operations partially offset by increases in capital
expenditures.

NCR contributed approximately $283 million to its international, executive and
U.S. qualified pension plans in 2013 compared to $752 million in 2012.
Contributions in2013included an $80 million contribution to the U.S.
non-qualified pension plan in the second quarter of 2013, and a $100 million
and a $24 million discretionary contribution to the U.S. qualified pension
plan and the U.K. pension plan, respectively, in the fourth quarter of 2013.
The net unfunded status of the Company's global pension plans improved by
approximately $372 million and was $(89) million as of December 31, 2013
compared to $(461) million as of December 31, 2012.

Other expense, net was $38 million in the fourth quarter of 2013 compared to
other expense, net, of $19 million in the prior year period, mainly due to
higher interest expense in the current period.

Income tax expense was $54 million in the fourth quarter of 2013 compared to
income tax expense of $155 million in the fourth quarter of 2012. The decrease
in income tax expense is driven by the reduction in income from operations
primarily due to lower pension benefit as well as a favorable mix of earnings.

NCR ended the fourth quarter of 2013 with $528 million in cash and cash
equivalents, compared to a balance of $460 million as of September 30, 2013.
As of December 31, 2013, NCR had a total debt balance of $3.35 billion
compared to a total debt balance of $2.23 billion as of September 30, 2013.
The increase in total debt balance is due primarily to the December 2013
offering by NCR of $400 million aggregate principal amount of 5.875% senior
notes due 2021 and $700 million aggregate principal amount of 6.375% senior
notes due 2023, the proceeds of which were used to finance the acquisition of
Digital Insight on January 10, 2014.

As previously announced, effective in the first quarter of 2013, NCR changed
the accounting methodology for recognizing expense for its Company-sponsored
U.S. and international pension benefit plans. From 2013 forward, NCR will
recognize changes in fair values of plan assets and net actuarial gains and
losses in the year incurred, generally in the fourth quarter of each year,
which were previously deferred and amortized over time into pension expense.
The results and guidance included in this release give effect to the change in
accounting methodology.

                                 2014 Outlook

                                         2014           2013
                                           Guidance        Actual
Year-over-year revenue growth             12% - 14%      7%
Income from Operations (GAAP)             $730 - $750    $666 million
                                           million
Non-pension operating income (NPOI) ^(1)  $900 - $920    $717 million
                                           million
Diluted earnings per share (GAAP)         $2.36 - $2.46  $2.67
Non-GAAP Diluted EPS^(1)                  $3.00 - $3.10  $2.81
                                                        
                                                                        

The 2014 outlook includes the impact of the acquisitions of Alaric Systems and
Digital Insight. NCR expects approximately $200 million of Other Expense, net
including interest expense in 2014 and that its full-year 2014 effective
income tax rate will be approximately 26%.

The GAAP income from operations and earnings per share guidance for the full
year 2014 included above and elsewhere in this release excludes the impact of
the actuarial mark to market pension adjustments that will be determined in
the fourth quarter of 2014, whereas the full year 2013 and fourth quarter 2013
actual GAAP income from operations includes the actuarial mark to market
pension adjustments.

Please refer to the tables and footnotes at the end of this release for
explanations and GAAP to non-GAAP reconciliations.

                               Q1 2014 Outlook

For the first quarter of 2014, the Company expects non-pension operating
income (NPOI)^(1) to be in the range of $155 million to $165 million, compared
to $129 million in the first quarter of 2013 and income from operations to be
in the range of $105 million to $115 million, compared to $85 million in the
first quarter of 2013. NCR expects its first quarter 2014 tax rate to be
approximately 25% and Other Expense, net including interest expense to be
approximately $50 million.

                 2013 Fourth Quarter Earnings Conference Call

A conference call is scheduled for today at 4:30 p.m. (EST) to discuss the
Company's 2013 fourth quarter results and guidance for first quarter and
full-year 2014. Access to the conference call and accompanying slides, as well
as a replay of the call, is available on NCR's web site at
http://investor.ncr.com/. Additionally, the live call can be accessed by
dialing 888-801-6504 and entering the participant passcode 8650319.

About NCR Corporation

NCR Corporation (NYSE: NCR) is the global leader in consumer transaction
technologies, turning everyday interactions with businesses into exceptional
experiences. With its software, hardware, and portfolio of services, NCR
enables more than 485 million transactions daily across the financial, retail,
hospitality, travel, telecom and technology industries. NCR solutions run the
everyday transactions that make your life easier.

NCR is headquartered in Duluth, Georgia with over 29,000 employees and does
business in 180 countries. NCR is a trademark of NCR Corporation in the United
States and other countries. NCR encourages investors to visit its web site
which is updated regularly with financial and other important information
about NCR.

Web site: www.ncr.com
Twitter: @NCRCorporation
Facebook: www.facebook.com/ncrcorp
LinkedIn: http://linkd.in/ncrgroup
YouTube: www.youtube.com/user/ncrcorporation

Note to Investors - This news release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements use words such as “seek,” “potential,” “expect,”
“strive,” “continue,” “continuously,” “accelerate,” “anticipate,” “outlook,”
“intend,” “plan,” “target,” “believe,” “estimate,” “forecast,” “pursue” and
other similar expressions or future or conditional verbs such as “will,”
“should,” “would” and “could”. They include statements about the reinvention
and transformation of NCR's business; statements about NCR’s Financial
Services software offerings and the expected contributions of the Alaric
Systems and Digital Insight acquisitions to those offerings; expectations
regarding NCR's future margins, expected growth, cash generation and the
transformation of NCR’s revenue model; expectations for the performance of
NCR's lines of business, geographies and products, including software;
statements as to NCR's anticipated or expected results and financial
performance, including its outlook for the first quarter of 2014 and the 2014
fiscal year (including in the sections entitled “Fourth Quarter 2013 Business
Highlights,” “2014 Outlook” and “Q1 2014 Outlook”) and its expectations for
revenue and growth across its core verticals; projections of revenue, profit
growth and other financial items; discussion of strategic initiatives and
related actions; comments about future market or industry performance or
behaviors, including how NCR's products and services may be used and the
benefits they might create or provide for its customers; and beliefs,
expectations, intentions, and strategies, among other things. Forward-looking
statements are based on management's current beliefs, expectations and
assumptions, and involve a number of known and unknown risks and
uncertainties, many of which are out of NCR's control.

Forward-looking statements are not guarantees of future performance, and there
are a number of factors, risks and uncertainties that could cause actual
outcomes and results to differ materially from the results contemplated by
such forward-looking statements. In addition to the factors discussed in this
release, these other factors, risks and uncertainties include those relating
to: domestic and global economic and credit conditions, including the ongoing
sovereign debt conditions in Europe and the uneven global economic recovery;
our indebtedness and the impact that it may have on our financial and
operating activities and our ability to incur additional debt; the financial
covenants in our senior secured credit facility and the indentures for our
outstanding senior unsecured notes and their impact on our financial and
business operations; the adequacy of our future cash flows to service our
indebtedness; the variable interest rates borne by our indebtedness under our
senior secured credit facility and the effects of changes in those rates; our
ability to raise funds necessary to finance a required change in control
purchase of our outstanding senior unsecured notes; the effect on our future
borrowing costs and access to capital of a lowering or withdrawal of the
ratings assigned to our debt securities; shifts in market demands, continued
competitive factors and pricing pressures; shorter product cycles, rapidly
changing technologies and maintaining a competitive leadership position with
respect to our solution offerings; manufacturing disruptions affecting product
quality or delivery times; the historical seasonality of our sales; the effect
of currency translation; our ability to achieve targeted cost reductions;
maintaining profitability of our professional services consulting engagements
and appropriate utilization rates for our consultants; market volatility and
the funded status of our pension plans; the success of our pension strategy,
including "Phase III" of our pension strategy; tax rates; our ability to sell
higher-margin software and services in addition to hardware; business and
legal risks associated with multinational operations; availability and
successful exploitation of new acquisition and alliance opportunities;
expected benefits related to acquisitions and alliances, including the
acquisition of Digital Insight, not materializing; the timely development,
production or acquisition and market acceptance of new and existing products
and services; the ability of third party suppliers on which we rely being able
to fulfill our needs; our ability to successfully develop and protect
intellectual property that drives innovation; our ability to execute our
business and reengineering plans; turnover of workforce and the ability to
attract and retain skilled employees; compliance with requirements relating to
data privacy and protection; continued efforts to establish and maintain
best-in-class internal information technology and control systems; exposure to
post-closing liabilities resulting from the sale of assets of our
entertainment business; environmental exposures from our historical and
ongoing manufacturing activities; changes in GAAP and the resulting impact, if
any, on the Company's accounting policies; uncertainties with regard to
regulations, lawsuits, claims and other matters across various jurisdictions;
and other factors detailed from time to time in the Company's U.S. Securities
and Exchange Commission reports and the Company's annual reports to
stockholders. The Company does not undertake any obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

Reconciliation of Diluted Earnings Per Share (EPS) (GAAP) to Non-GAAP Diluted
                                     EPS

                               Q4 2013      Q4 2012      2014         2013
                             Actual     Actual                Actual
                                                         Guidance
Diluted EPS (GAAP)             $ 1.21       $ 1.45       $2.36 -      $ 2.67
                                                         $2.46
Pension (benefit) expense      (0.41  )     (0.82  )     0.03         (0.34  )
Acquisition-related costs      0.03         0.04         0.13         0.21
Acquisition-related            0.07         0.04         0.47         0.29
amortization of intangibles
Acquisition-related purchase   0.01         —            0.01         0.06
price adjustments
OFAC and FCPA Investigations   0.01         0.01         —            0.01
^(3)
Japan valuation reserve        (0.09  )     —           —            (0.09  )
release
Diluted EPS (non-GAAP) ^ (1)   $ 0.83      $ 0.72      $3.00 -      $ 2.81 
                                                         $3.10
                                                                             
                                                                             

   Reconciliation of Income from Operations (GAAP) to Non-pension Operating
                              Income (non-GAAP)

                      Q4 2013   Q4 2012   2014       2013      Q1 2014      Q1
(in millions)        Actual   Actual   Guidance  Actual   Guidance   2013
                                                                            Actual
Income from           $ 297     $ 411     $730 -     $ 666     $105 -       $  85
Operations (GAAP)                         $750                 $115
Pension (benefit)     (99   )   (254  )   10         (78   )   1            7
expense
Acquisition-related   2         11        35         46        18           16
costs
Acquisition-related
amortization of       17        9         121        65        29           14
intangibles
Acquisition-related
purchase price        3         —         3          15        1            6
adjustments
OFAC and FCPA         1        4        1          3        1            1
Investigations ^(3)
Non-pension                               $900 -               $155 -
Operating Income      $ 221    $ 181    $920       $ 717    $165         $  129
(non-GAAP) ^ (1)
                                                                               
                                                                               

                                Free Cash Flow

                                 For the Periods Ended December 31
                                  Three Months          Twelve Months
                                  2013      2012        2013      2012
Net cash provided by (used in)    $ 265       $ 100       $ 281       $ (180 )
operating activities (GAAP)
Less expenditures for:
Property, plant and equipment     (36   )     (27   )     (116  )     (80    )
Capitalized software              (35   )     (22   )     (110  )     (80    )
Total capital expenditures, net   (71   )     (49   )     (226  )     (160   )
Net cash used in operating
activities from discontinued      (1    )     (29   )     (52   )     (114   )
operations
Discretionary pension             124        100        204        600    
contributions and settlements
Free cash flow (non-GAAP)^(2)     $ 317      $ 122      $ 207      $ 146  
                                                                             
                                                                             

Notes

While NCR reports its results in accordance with Generally Accepted Accounting
Principles in the United States, or GAAP, it believes that certain non-GAAP
measures provide additional useful information regarding NCR's financial
results. NCR's management evaluates the Company's results excluding certain
items, such as pension expense and the effect of foreign currency translation,
to assess the financial performance of the Company and believes this
information is useful for investors because it provides a more complete
understanding of NCR's underlying operational performance, as well as
consistency and comparability with NCR's past reports of financial results. In
addition, management uses certain of these measures to manage and determine
effectiveness of its business managers and as a basis for incentive
compensation. NCR management's calculation of these non-GAAP measures may
differ from similarly-titled measures reported by other companies and cannot,
therefore, be compared with similarly-titled measures of other companies.
These non-GAAP measures should not be considered as substitutes for, or
superior to, results determined in accordance with GAAP.

(1) The segment results included in this release and Schedule B hereto and the
non-GAAP income from operations (i.e. non-pension operating income or NPOI)
and non-GAAP earnings per share discussed in this earnings release exclude the
impact of pension expense and certain special items. Due to the significant
change in its pension expense from year to year and the non-operational nature
of pension expense and these special items, including amortization of
acquisition related intangibles, NCR's management uses non-pension operating
income and non-GAAP earnings per share to evaluate year-over-year operating
performance. NCR may, in addition, segregate special items from its GAAP
results from time to time to reflect the ongoing earnings per share
performance of the Company. NCR also uses non-pension operating income and
non-GAAP earnings per share to manage and determine the effectiveness of its
business managers and as a basis for incentive compensation. NCR determines
non-pension operating income based on its GAAP income (loss) from operations
excluding pension expense and special items. These non-GAAP measures should
not be considered as substitutes for, or superior to, results determined in
accordance with GAAP.

(2) Free cash flow does not have a uniform definition under GAAP and,
therefore, NCR's definition may differ from other companies' definitions of
this measure. NCR defines free cash flow as net cash provided by/used in
operating activities and cash flow provided by/used in discontinued operations
less capital expenditures for property, plant and equipment, additions to
capitalized software, discretionary pension contributions and settlements.
NCR's management uses free cash flow to assess the financial performance of
the Company and believes it is useful for investors because it relates the
operating cash flow of the Company to the capital that is spent to continue
and improve business operations. In particular, free cash flow indicates the
amount of cash generated after capital expenditures which can be used for,
among other things, investment in the Company's existing businesses, strategic
acquisitions, strengthening the Company's balance sheet, repurchase of Company
stock and repayment of the Company's debt obligations. Free cash flow does not
represent the residual cash flow available for discretionary expenditures
since there may be other nondiscretionary expenditures that are not deducted
from the measure. This non-GAAP measure should not be considered a substitute
for, or superior to, cash flows from operating activities determined in
accordance with GAAP.

(3) Estimated expenses for 2014 will be affected by, among other things, the
status and progress of these matters. There can be no assurance that the
Company will not be subject to fines or other remedial measures as a result of
OFAC’s, the SEC’s or the DOJ’s investigations.

Schedule A

NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
                                 
                                   For the Periods Ended December 31
                                   Three Months         Twelve Months
                                   2013      2012       2013       2012
Revenue
Products                           $ 801      $ 866      $ 2,912     $ 2,854
Services                           869       776       3,211      2,876   
Total Revenue                      1,670      1,642      6,123       5,730
Cost of products                   575        633        2,152       2,144
Cost of services                   565       435       2,231      1,941   
Total gross margin                 530        574        1,740       1,645
% of Revenue                       31.7   %   35.0   %   28.4    %   28.7    %
Selling, general and               193        150        871         742
administrative expenses
Research and development           40        13        203        155     
expenses
Income from operations             297        411        666         748
% of Revenue                       17.8   %   25.0   %   10.9    %   13.1    %
Interest expense                   (33    )   (18    )   (103    )   (42     )
Other (expense), net               (5     )   (1     )   (9      )   (8      )
Total other (expense), net         (38    )   (19    )   (112    )   (50     )
Income before income taxes and     259        392        554         698
discontinued operations
% of Revenue                       15.5   %   23.9   %   9.0     %   12.2    %
Income tax expense                 54        155       98         223     
Income from continuing             205        237        456         475
operations
(Loss) income from discontinued    (8     )   3         (9      )   6       
operations, net of tax
Net Income                         197        240        447         481
Net (loss) income attributable     (1     )   (2     )   4          —       
to noncontrolling interests
Net income attributable to NCR     $ 198     $ 242     $ 443      $ 481   
Amounts attributable to NCR
common stockholders:
Income from continuing             $ 206      $ 239      $ 452       $ 475
operations
(Loss) income from discontinued    (8     )   3         (9      )   6       
operations, net of tax
Net income                         $ 198     $ 242     $ 443      $ 481   
Net income per share
attributable to NCR common
stockholders:
Net income per common share from
continuing operations
Basic                              $ 1.24    $ 1.49    $ 2.73     $ 2.98  
Diluted                            $ 1.21    $ 1.45    $ 2.67     $ 2.90  
Net income per common share
Basic                              $ 1.19    $ 1.51    $ 2.68     $ 3.02  
Diluted                            $ 1.16    $ 1.47    $ 2.62     $ 2.94  
Weighted average common shares
outstanding
Basic                              166.5      160.4      165.4       159.3
Diluted                            170.8      164.4      169.3       163.8
                                                                             
                                                                             

Schedule B

NCR CORPORATION
CONSOLIDATED REVENUE AND OPERATING INCOME SUMMARY
(Unaudited)
(in millions)
                 
                   For the Periods Ended December 31
                   Three Months                    Twelve Months
                   2013       2012       %        2013       2012       %
                                           Change                           Change
Revenue by
segment
Financial          $ 852       $ 921       (7 ) %   $ 3,115     $ 3,201     (3 ) %
Services
Retail Solutions   536         490         9    %   2,034       1,667       22   %
Hospitality        176         150         17   %   626         522         20   %
Emerging           106        81         31   %   348        340        2    %
Industries
Total Revenue      $ 1,670    $ 1,642    2    %   $ 6,123    $ 5,730    7    %
Operating income
by segment
Financial          $ 111       $ 100                $ 356       $ 327
Services
% of Revenue       13.0    %   10.9    %            11.4    %   10.2    %
Retail Solutions   65          44                   205         102
% of Revenue       12.1    %   9.0     %            10.1    %   6.1     %
Hospitality        26          22                   100         85
% of Revenue       14.8    %   14.7    %            16.0    %   16.3    %
Emerging           19          15                   56          75
Industries
% of Revenue       17.9    %   18.5    %            16.1    %   22.1    %
Subtotal-segment   $ 221      $ 181               $ 717      $ 589   
operating income
% of Revenue       13.2    %   11.0    %            11.7    %   10.3    %
Pension benefit    (99     )   (254    )            (78     )   (224    )
Other              23         24                  129        65      
adjustments (1)
Total income       $ 297      $ 411               $ 666      $ 748   
from operations
                                                                            
                                                                            

(1) Other adjustments for the three months ended December 31, 2013 include $2
million of acquisition related costs, $17 million of acquisition-related
amortization of intangible assets, $3 million of acquisition-related purchase
price adjustments and $1 million of legal costs related to previously
disclosed OFAC and FCPA investigations; other adjustments for the three months
ended December 31, 2012 include $11 million of acquisition-related costs, $9
million of acquisition-related amortization of intangible assets, and $4
million of legal costs related to previously disclosed OFAC and FCPA
investigations. Other adjustments for the twelve months ended December 31,
2013 include $46 million of acquisition-related costs, $65 million of
acquisition-related amortization of intangible assets, $15 million of
acquisition-related purchase price adjustments and $3 million of legal costs
related to the previously disclosed OFAC and FCPA investigations; other
adjustments for the twelve months ended December 31, 2012 include $23 million
of acquisition-related costs, $38 million of acquisition-related amortization
of intangible assets, and $4 million of legal costs related to the previously
disclosed OFAC and FCPA investigations.

Schedule C

NCR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
                                                              
                                   December 31,   September 30,   December 31,
                                   2013           2013            2012
Assets
Current assets
Cash and cash equivalents          $  528         $   460         $  1,069
Restricted cash                    1,114          —               —
Accounts receivable, net           1,339          1,349           1,086
Inventories, net                   790            842             797
Other current assets               568           591            454       
Total current assets               4,339         3,242          3,406     
Property, plant and equipment,     352            338             308
net
Goodwill                           1,534          1,472           1,003
Intangibles, net                   494            474             304
Prepaid pension cost               478            424             368
Deferred income taxes              441            492             532
Other assets                       470           436            448       
Total assets                       $  8,108      $   6,878      $  6,369  
Liabilities and stockholders’
equity
Current liabilities
Short-term borrowings              $  34          $   15          $  72
Accounts payable                   670            584             611
Payroll and benefits liabilities   191            209             186
Deferred service revenue and       525            508             455
customer deposits
Other current liabilities          461           437            418       
Total current liabilities          1,881         1,753          1,742     
Long-term debt                     3,320          2,212           1,891
Pension and indemnity plan         532            740             805
liabilities
Postretirement and
postemployment benefits            169            202             246
liabilities
Income tax accruals                189            143             138
Environmental liabilities          121            118             171
Other liabilities                  99            118            79        
Total liabilities                  6,311         5,286          5,072     
Redeemable noncontrolling          14             17              15
interests
Stockholders' equity
NCR stockholders' equity:
Preferred stock: par value $0.01
per share, 100.0 shares
authorized, no
shares issued and outstanding as   —              —               —
of December 31, 2013, September
30,
2013, and December 31, 2012,
respectively
Common stock: par value $0.01
per share, 500.0 shares
authorized,
166.6, 166.3 and 162.8 shares      2              2               2
issued and outstanding as of
December
31, 2013, September 30, 2013 and
December 31, 2012 respectively
Paid-in capital                    433            434             358
Retained earnings                  1,372          1,174           929
Accumulated other comprehensive    (38       )    (73        )    (37       )
loss
Total NCR stockholders' equity     1,769          1,537           1,252
Noncontrolling interests in        14            38             30        
subsidiaries
Total stockholders' equity         1,783         1,575          1,282     
Total liabilities and              $  8,108      $   6,878      $  6,369  
stockholders' equity
                                                                            
                                                                            

Schedule D

NCR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
                                   
                                   For the Periods Ended December 31
                                   Three Months          Twelve Months
                                   2013      2012        2013      2012
Operating activities
Net income                         $  197     $ 240       $  447     $ 481
Adjustments to reconcile net
income to net cash (used in)
provided by operating activities:
Loss (income) from discontinued    8          (3      )   9          (6      )
operations
Depreciation and amortization      59         43          208        166
Stock-based compensation expense   7          13          41         49
Deferred income taxes              11         117         3          144
Gain on sale of property, plant    —          (2      )   (14    )   (10     )
and equipment and other assets
Impairment of long-lived and other —          —           —          7
assets
Changes in assets and liabilities:
Receivables                        16         41          (136   )   (53     )
Inventories                        51         32          10         (42     )
Current payables and accrued       45         22          21         86
expenses
Deferred service revenue and       15         (25     )   36         31
customer deposits
Pension and indemnity plan         (245   )   (407    )   (397   )   (994    )
Other assets and liabilities       101       29         53        (39     )
Net cash provided by (used in)     265       100        281       (180    )
operating activities
Investing activities
Expenditures for property, plant   (36    )   (27     )   (116   )   (80     )
and equipment
Proceeds from sales of property,   —          —           10         8
plant and equipment
Additions to capitalized software  (35    )   (22     )   (110   )   (80     )
Business acquisition, net          (84    )   (50     )   (780   )   (108    )
Changes in restricted cash         (1,114 )   —           (1,114 )   —
Other investing activities, net    —         —          5         4       
Net cash used in investing         (1,269 )   (99     )   (2,105 )   (256    )
activities
Financing activities
Tax withholding payments on behalf (2     )   —           (30    )   (12     )
of employees
Short term borrowings, net         —          —           (1     )   —
Payments on term credit facility   —          —           (35    )   —
Borrowings on term credit          29         —           329        150
facilities
Payments on revolving credit       (164   )   —           (1,009 )   (860    )
facility
Borrowings on revolving credit     164        —           1,009      720
facility
Proceeds from bond offerings       1,100      500         1,100      1,100
Debt issuance costs                (24    )   (8      )   (36    )   (19     )
Proceeds from employee stock plans 5          30          57         53
Purchase of noncontrolling         (24    )   —           (24    )   —
interest
Dividend distribution to minority  (3     )   —          (3     )   (1      )
shareholder
Net cash provided by financing     1,081     522        1,357     1,131   
activities
Cash flows from discontinued
operations
Net cash used in operating         (1     )   (29     )   (52    )   (114    )
activities
Net cash provided by investing     —         1          —         99      
activities
Net cash (used in) provided by     (1     )   (28     )   (52    )   (15     )
discontinued operations
Effect of exchange rate changes on (8     )   (7      )   (22    )   (9      )
cash and cash equivalents
Increase (decrease) in cash and    68         488         (541   )   671
cash equivalents
Cash and cash equivalents at       460       581        1,069     398     
beginning of period
Cash and cash equivalents at end   $  528    $ 1,069    $  528    $ 1,069 
of period

Contact:

News Media Contact
NCR Corporation
Lou Casale, 212-589-8415
lou.casale@ncr.com
or
Investor Contact
NCR Corporation
Tracy Krumme, 212-589-8569
tracy.krumme@ncr.com
 
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