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8-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
         
FORM 8-K
 
         
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): October 27, 2015
 
        
NCR CORPORATION
(Exact name of registrant as specified in its charter)
 
        
 
Commission File Number 001-00395
 
 
 
 
Maryland
 
31-0387920
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
3097 Satellite Boulevard
Duluth, Georgia 30096
(Address of principal executive offices and zip code)
 
Registrant's telephone number, including area code: (937) 445-5000
 
N/A
(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 







Item 2.02.     Results of Operations and Financial Condition.

On October 27, 2015, the Company issued a press release setting forth its third quarter 2015 financial results along with its updated fiscal year 2015 financial outlook and its fourth quarter 2015 financial outlook. A copy of the press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.


Item 7.01.     Regulation FD Disclosure.

On October 27, 2015, the Company will hold its previously announced conference call to discuss its third quarter 2015 results, its updated fiscal year 2015 financial outlook and its fourth quarter 2015 financial outlook. A copy of supplementary materials that will be referred to in the conference call, and which were posted to the Company’s website, is attached hereto as Exhibit 99.2.


Item 9.01        Financial Statements and Exhibits.

(d)    Exhibits:

The following exhibits are attached with this current report on Form 8-K:

Exhibit No.
Description
99.1
Press Release issued by the Company, dated October 27, 2015
99.2
Supplemental materials, dated October 27, 2015

            
                        
                    



- 2 -




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
NCR Corporation
 
 
By:
 
/s/ Robert Fishman
 
 
Robert Fishman
 
 
Senior Vice President and Chief Financial Officer
Date: October 27, 2015










































- 3 -




Index to Exhibits
The following exhibits are attached with this current report on Form 8-K:

Exhibit No.            Description            
99.1                Press Release issued by the Company, dated October 27, 2015
99.2                Supplemental materials, dated October 27, 2015


- 4 -
Exhibit



 
NEWS RELEASE


October 27, 2015         

NCR Announces Third Quarter 2015 Results

•
Revenue of $1.61 billion, down 2% as reported, up 5% constant currency, $30 million incremental FX headwind from beginning of quarter; Software-related revenue of $434 million, up 1% as reported, up 5% constant currency

•
Non-pension operating income (NPOI) of $218 million, up 7% as reported, up 15% constant currency; Non-GAAP diluted EPS of $0.78, up 16% as reported, up 25% constant currency

•
GAAP income from operations of $168 million, up 310%; GAAP diluted EPS of $0.59

•
Free cash flow of $106 million; net cash provided by operating activities of $170 million

•
Full year 2015 guidance:
◦
Incremental FX headwinds of $120 million in revenue, $20 million in NPOI and $0.10 in EPS from beginning of year guidance
◦
Full Year Revenue guidance now forecasted at 3% - 4% constant currency growth
◦
NPOI guidance of $830 million to $840 million, within the previous range
◦
Non-GAAP EPS guidance of $2.70 to $2.80, at the high end of the previous range
◦
FCF guidance of $350 million to $400 million reaffirmed

DULUTH, Georgia - NCR Corporation (NYSE: NCR) reported financial results today for the three months ended September 30, 2015.

"Consistent execution across NCR delivered third-quarter earnings in line with our expectations and puts us in position to achieve our full year objectives for earnings and free cash flow," said Chairman and CEO Bill Nuti.  Revenue was up 5% on a constant currency basis with improving growth in software and services.  Despite a worsening FX environment and challenging geographies, our Financial Services business experienced continued demand for our omni-channel software solutions, including cloud applications, as well as our branch transformation offers.  In Retail Solutions, we are executing better in a moderately improving retail environment and generated solid results.  And, our Hospitality Division had a very good quarter, led by software and cloud growth.  I am most pleased about our improving free cash flow execution, both in terms of quarterly linearity and overall operational results.  In a consolidating industry, we believe our competitive position can significantly improve given our industry aligned strategy, rich software portfolio, cloud and mobile first applications, global Services excellence, and unmatched hardware platforms.  Given recent industry developments we are particularly excited about our business opportunities ahead."







Q3 Financial Summary
 
Third Quarter
$ in millions, except per share amounts
2015
 
2014
 
As Reported
 
Constant Currency
Revenue
$1,613
 
$1,647
 
(2)%
 
5%
Income from operations *
$168
 
$41
 
310%
 
 
Non-pension operating income (NPOI)
$218
 
$204
 
7%
 
15% **
Diluted earnings per share ***
$0.59
 
$—
 
100%
 
 
Non-GAAP diluted earnings per share
$0.78
 
$0.67
 
16%
 
25% **
*
Income from operations in the third quarter of 2015 and 2014 includes charges of $12 million and $127 million, respectively, related to the ongoing restructuring plan.
**
NPOI includes approximately $17 million, and non-GAAP diluted earnings per share includes approximately $0.06, of unfavorable foreign currency impacts.
***
Diluted earnings per share in the third quarter of 2015 and 2014 includes $0.05 and $0.58, respectively, related to the ongoing restructuring plan.

In this release, we use the non-GAAP measures non-pension operating income (NPOI), non-GAAP diluted earnings per share and free cash flow, and we present certain measures on a constant currency basis. These non-GAAP measures are described and reconciled to their most directly comparable GAAP measures elsewhere in this release.

Q3 Supplemental Revenue Information
 
Third Quarter
$ in millions
2015
 
2014
 
% Change
 
% Change Constant Currency
Cloud *
$
133

 
$
125

 
6
%
 
7
%
Software License/Software Maintenance
158

 
157

 
1
%
 
6
%
Professional Services
143

 
148

 
(3
%)
 
3
%
Total Software-Related Revenue
434

 
430

 
1
%
 
5
%
Hardware
616

 
650

 
(5
%)
 
4
%
Other Services
563

 
567

 
(1
%)
 
7
%
Total Revenue
$
1,613

 
$
1,647

 
(2
%)
 
5
%

* Referred to as Software-as-a-Service or SaaS in prior Company earnings releases.

Software-related revenue increased 5% on a constant currency basis, including 7% constant currency growth in cloud revenue driven by Hospitality. Additionally, on a constant currency basis, hardware revenue increased 4% in the third quarter and other services revenue increased 7%.



2


Q3 Operating Segment Results
 
Third Quarter
$ in millions
2015
 
2014
 
% Change
 
% Change Constant Currency
Revenue by segment
 
 
 
 
 
 
 
Financial Services
$
820

 
$
899

 
(9)%
 
—%
Retail Solutions
523

 
489

 
7%
 
14%
Hospitality
177

 
168

 
5%
 
8%
Emerging Industries
93

 
91

 
2%
 
11%
Total Revenue
$
1,613

 
$
1,647

 
(2)%
 
5%
Operating income by segment
 
 
 
 
 
 
 
Financial Services
135

 
144

 
(6)%
 
2%
% of Financial Services Revenue
16.5
%
 
16.0
%
 
 
 
 
Retail Solutions
43

 
24

 
79%
 
92%
% of Retail Solutions Revenue
8.2
%
 
4.9
%
 
 
 
 
Hospitality
30

 
27

 
11%
 
15%
% of Hospitality Revenue
16.9
%
 
16.1
%
 
 
 
 
Emerging Industries
10

 
9

 
11%
 
22%
% of Emerging Industries Revenue
10.8
%
 
9.9
%
 
 
 
 
Segment operating income
$
218

 
$
204

 
7%
 
15%
% of Total Revenue
13.5
%
 
12.4
%
 
 
 
 

Financial Services Constant currency revenue growth was flat, with growth in the Americas, South Pacific, and Middle East Africa offset by declines in China and Russia. Excluding the impact of foreign currency, operating income increased due to a more favorable mix of revenue and expense management.

Retail Solutions Constant currency revenue growth was driven by growth in North America and Europe. Operating income increased due higher revenue, including more software-related revenue and expense management.

Hospitality Constant currency revenue growth was driven by improvements in software-related revenue in the Americas. The increase in operating income was driven by higher software-related revenue, including cloud and professional services revenue.

Emerging Industries Constant currency revenue growth was driven by our Telecom & Technology business. Operating income increased due to higher services margins.


Free Cash Flow
 
Third Quarter
$ in millions
2015
 
2014
Net cash provided by operating activities
$
170

 
$
124

Total capital expenditures
(54
)
 
(58
)
Net cash (used in) provided by discontinued operations
(10
)
 
66

Free cash flow
$
106

 
$
132


Free cash flow was lower in the third quarter of 2015 as compared to the third quarter of 2014 due to $93 million in recoveries associated with the Fox River environmental matter in the third quarter of 2014. Excluding the recoveries, free cash flow improved in the third quarter of 2015 as compared to the third quarter of 2014 driven by an increase in cash from operations.

3



Other Third Quarter Developments

The Company's progress to date with its restructuring plan is on track. NCR incurred a pre-tax charge of $36 million in the first nine months of 2015, and expects to incur a pre-tax charge of approximately $20 million to $28 million in the fourth quarter of 2015. Cash payments in 2015 were $51 million in the first nine months, and are expected to be approximately $20 million to $35 million in the fourth quarter. Savings are in line with previous expectations with $18 million in 2014, approximately $70 million in 2015 and approximately $105 million in 2016, with about 50% of the savings benefiting NPOI.


2015 Outlook

We are decreasing our revenue guidance to 3% - 4% constant currency growth, due to continued challenges in certain developing markets and slower backlog rollouts pushing into 2016. Expected foreign currency headwinds on revenue increased by $65 million from previous guidance provided in July. The NPOI range is expected to be $830 million to $840 million, at the low end of the previous range due to lower revenue and $20 million of additional negative foreign currency impacts from our beginning of the year guidance. Our non-GAAP diluted EPS is expected to be $2.70 to $2.80, the high end of our previous range, due to other expense, effective tax rate and share count lower than previously expected. Expected foreign currency headwinds increased by $0.10 from beginning of year guidance. Free cash flow guidance is reaffirmed. We expect unfavorable foreign currency impacts of 6%, or approximately $420 million, in revenue, $70 million to $75 million in NPOI and $0.30 per share in non-GAAP diluted EPS for full-year 2015.
$ in millions, except per share amounts
 
Current 2015
Guidance
 
Prior 2015 Guidance
 
2014
Actual
Revenue
 
$6,380 - $6,410
 
 
$6,525 - $6,675
 
 
$6,591
 
Year-over-year revenue growth
 
(3%) - (2%)
 
 
(1%) to 1%
 
 
8%
 
Constant currency revenue growth
 
3% - 4%
(1) 
 
5% to 7%
 
 
10%
 
Income from operations (GAAP)
 
$196 - $214
(2) 
 
$194 - $259
 
 
$353
(2) 
Non-pension operating income (NPOI)
 
$830 - $840
 
 
$830 - $870
 
 
$820
 
Diluted earnings per share (GAAP)
 
($0.60) - ($0.45)
(2) 
 
($0.70) - ($0.40)
 
 
$1.06
(2) 
Non-GAAP Diluted EPS
 
$2.70 - $2.80
(3) 
 
$2.60 - $2.80
 
 
$2.74
 
Net cash provided by operating activities
 
$620 - $650
 
 
$620 - $650
 
 
$524
 
Free cash flow
 
$350 - $400
 
 
$350 - $400
 
 
$313
 

(1) 
Includes unfavorable foreign currency impacts of approximately 6% in revenue.
(2)
For 2014, actuarial mark-to-market pension adjustment is included; 2015 guidance does not include actuarial mark-to-market pension adjustments, which will be determined in Q4 2015.
(3)
NCR now expects approximately$204 million of other expense, net including interest expense in 2015 , that its full-year 2015 effective income tax rate will be approximately 24% to 25% compared to 22% in 2014, and that its dilutive share count will be 173 million. Previously, NCR expected $215 million to $220 million of other expense, net in 2015, a full-year 2015 effective tax rate of approximately 25%, and a dilutive share count of 175 million.

Q4 2015 Outlook

For the fourth quarter of 2015, the Company expects its as reported revenue to be in the range of $1,687 million to $1,717 million, compared to $1,768 million in the fourth quarter of 2014. Revenue includes an expected 5% unfavorable foreign currency impact. Additionally, the Company expects non-pension operating income (NPOI) to be in the range of $264 million to $274 million, compared to $251 million in the fourth quarter of 2014, and income from operations to be in the range of $199 million to $217 million, compared to $35 million in the fourth quarter of 2014. The unfavorable foreign currency impact on NPOI is expected to be approximately $19 million in the fourth quarter of 2015. NCR expects its fourth quarter 2015 effective income tax rate to be approximately 27% to 30% and other expense, net including interest expense to be approximately $55 million.

4




2015 Third Quarter Earnings Conference Call

A conference call is scheduled for today at 4:30 p.m. (EDT) to discuss the third quarter 2015 results and guidance for fourth quarter and full-year 2015. Access to the conference call and accompanying slides, as well as a replay of the call, are available on NCR's web site at http://investor.ncr.com/. Additionally, the live call can be accessed by dialing 888-219-1420 and entering the participant passcode 8552634.

More information on NCR’s Q3 2015 earnings, including additional financial information and analysis, is available on NCR’s Investor Relations website at http://investor.ncr.com/.
 
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 nearly 550 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 30,000 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

News Media Contact
Lou Casale
NCR Corporation
212.589.8415
lou.casale@ncr.com

Investor Contact
Gavin Bell
NCR Corporation
212.589.8468
gavin.bell@ncr.com

5


Note to Investors This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as “expect,” “anticipate,” “outlook,” “intend,” “believe,” “will,” “should,” “would,” “could” and words of similar meaning. Statements that describe or relate to NCR’s future plans, goals, intentions, strategies or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements. The forward-looking statements in this release include statements about market and economic conditions affecting NCR and its business; expectations regarding foreign currency fluctuations and their impact on NCR's results; expectations for NCR's achievement of its annual financial objectives; NCR's ongoing restructuring plan and its costs, expected benefits and results; NCR's competitive position and growth outlook; and NCR's 2015 financial outlook (including in the sections entitled “2015 Outlook” and “Q4 2015 Outlook”). Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, 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 important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including those factors relating to: domestic and global economic and credit conditions including, in particular, market conditions and spending trends in the retail industry and economic and market conditions in Russia and China; the impact of our indebtedness and its terms on our financial and operating activities; foreign currency fluctuations; our ability to successfully introduce new solutions and compete in the information technology industry; the transformation of our business model and our ability to sell higher-margin software and services; our ability to improve execution in our sales and services organizations; defects or errors in our products or problems with our hosting facilities; manufacturing disruptions; collectability difficulties in subcontracting relationships in Emerging Industries; the historical seasonality of our sales; compliance with data privacy and protection requirements; the availability and success of acquisitions, divestitures and alliances, including the acquisition of Digital Insight; our pension strategy and underfunded pension obligation; the success of our ongoing restructuring plan; tax rates; reliance on third party suppliers; development and protection of intellectual property; workforce turnover and the ability to attract and retain skilled employees; environmental exposures from our historical and ongoing manufacturing activities; and uncertainties with regard to regulations, lawsuits, claims and other matters across various jurisdictions. Additional information concerning these and other factors can be found in the Company's filings with the U.S. Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made. 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.

Non-GAAP Financial Measures While NCR reports its results in accordance with Generally Accepted Accounting Principles in the United States, or GAAP, in this release NCR also uses the non-GAAP measures listed and described below.

Non-Pension Operating Income and Non-GAAP Diluted Earnings Per Share. NCR’s non-pension operating income and non-GAAP diluted earnings per share are determined by excluding pension expense and special items, including amortization of acquisition related intangibles, from NCR’s GAAP income (loss) from operations. 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, NCR's management uses non-pension operating income and non-GAAP diluted earnings per share to evaluate year-over-year operating performance, to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes these measures are useful for investors because they provide a more complete understanding of NCR's underlying operational performance, as well as consistency and comparability with NCR's past reports of financial results.

Free Cash Flow. 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. 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.

Constant Currency. NCR presents certain measures, such as period-over-period revenue growth, on a constant currency basis, which excludes the effects of foreign currency translation. Due to the continuing strengthening of the U.S. dollar against foreign currencies and the overall variability of foreign exchange rates from period to period, NCR’s management uses these measures on a constant currency basis to evaluate period-over-period operating performance. Measures presented on a constant currency basis are calculated by translating current period results at prior period monthly average exchange rates.

NCR's definitions and calculations 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. These non-GAAP measures are

6


reconciled to their most directly comparable GAAP measures in the tables below or, in the case of quarterly free cash flow, in the body of this release.

Reconciliation of Diluted Earnings Per Share (GAAP) to Non-GAAP Diluted Earnings Per Share (non-GAAP)
 
Q3 2015 Actual
 
Q3 2014 Actual
 
Current 2015
Guidance
 
Prior 2015 Guidance
 
2014 Actual
Diluted EPS (GAAP)
$
0.59

 
$
—

 
($0.60) - ($0.45)

 
($0.70) - ($0.40)

 
$
1.06

Pension expense (benefit)
0.01

 
(0.05
)
 
2.51

 
2.51

 
0.38

Restructuring plan
0.05

 
0.58

 
0.23 - 0.28

 
0.18 - 0.28

 
0.68

Acquisition-related costs
0.01

 
0.02

 
0.04

 
0.04

 
0.12

Acquisition-related amortization of intangibles
0.12

 
0.12

 
0.47

 
0.47

 
0.47

Acquisition-related purchase price adjustments
—

 
—

 
—

 
—

 
0.02

OFAC and FCPA Investigations (1)
—

 
—

 
—

 
—

 
0.01

Non-GAAP Diluted EPS 
$
0.78

 
$
0.67

 
$2.70 - $2.80

 
$2.60 - $2.80

 
$
2.74


Reconciliation of Income from Operations (GAAP) to Non-pension Operating Income (non-GAAP)
$ in millions
Q3 2015 Actual
 
Q3 2014 Actual
 
Current 2015
Guidance
 
Prior 2015 Guidance
 
2014 Actual
 
Q4 2015 Guidance
 
Q4 2014 Actual
Income from Operations (GAAP)
$
168

 
$
41

 
$196 - $214

 
$194 - $259

 
$
353

 
$199 - $217

 
$
35

Pension expense
5

 
1

 
434

 
434

 
152

 
3

 
150

Restructuring plan
12

 
127

 
56 - 64

 
39 - 64

 
160

 
$20 - $28

 
33

Acquisition-related costs
2

 
5

 
10

 
10

 
27

 
3

 
2

Acquisition-related amortization of intangibles
31

 
29

 
125

 
127

 
119

 
31

 
30

Acquisition-related purchase price adjustments
—

 
1

 
—

 
—

 
6

 
—

 
—

OFAC and FCPA Investigations (1)
—

 
—

 
1

 
1

 
3

 
—

 
1

Non-pension Operating Income (non-GAAP)
$
218

 
$
204

 
$830 - $840

 
$830 - $870

 
$
820

 
$264 - $274

 
$
251


Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)
$ in millions
2015 Guidance
Net cash provided by operating activities
$620 - $650
Total capital expenditures
(215) - (235)
Net cash used in discontinued operations
(35)
Free cash flow
$350 - $400

Reconciliation of Revenue Growth (GAAP) to
Revenue Growth on a Constant Currency Basis (non-GAAP)
 
Three months ended September 30, 2015

Revenue Growth % (GAAP)

Favorable (unfavorable) FX impact

Constant Currency Revenue Growth % (non-GAAP)
Financial Services
(9)%

(9)%

—%
Retail Solutions
7%

(7)%

14%
Hospitality
5%

(3)%

8%
Emerging Industries
2%

(9)%

11%
Total Revenue
(2)%

(7)%

5%


7


 
Nine months ended September 30, 2015
 
Revenue Growth % (GAAP)
 
Favorable (unfavorable) FX impact
 
Constant Currency Revenue Growth % (non-GAAP)
Financial Services
(5)%
 
(8)%
 
3%
Retail Solutions
(1)%
 
(7)%
 
6%
Hospitality
2%
 
(3)%
 
5%
Emerging Industries
2%
 
(8)%
 
10%
Total Revenue
(3)%
 
(7)%
 
4%

 
Three months ended September 30, 2015
 
Revenue Growth % (GAAP)
 
Favorable (unfavorable) FX impact
 
Constant Currency Revenue Growth % (non-GAAP)
Cloud
6%
 
(1)%
 
7%
Software License/Software Maintenance
1%
 
(5)%
 
6%
Professional Services
(3)%
 
(6)%
 
3%
Total Software-Related Revenue
1%
 
(4)%
 
5%
Hardware
(5)%
 
(9)%
 
4%
Other Services
(1)%
 
(8)%
 
7%
Total Revenue
(2)%
 
(7)%
 
5%

Reconciliation of Operating Income Growth (GAAP) to
Operating Income Growth on a Constant Currency Basis (non-GAAP)

 
Three months ended September 30, 2015
 
Operating Income Growth % (GAAP)
 
Favorable (unfavorable) FX impact
 
Constant Currency Operating Income Growth % (non-GAAP)
Financial Services
(6)%
 
(8)%
 
2%
Retail Solutions
79%
 
(13)%
 
92%
Hospitality
11%
 
(4)%
 
15%
Emerging Industries
11%
 
(11)%
 
22%
Total Operating Income
7%
 
(8)%
 
15%


(1) Estimated expenses for 2015 will be affected by, among other things, the status and progress of the OFAC matter.   There can be no assurance that the Company will not be subject to fines or other remedial measures as a result of OFAC’s investigation. 


8



NCR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
Schedule A

 
For the Periods Ended September 30
 
Three Months
 
Nine Months
 
2015
 
2014
 
2015
 
2014
Revenue
 
 
 
 
 
 
 
Products
$
688

 
$
721

 
$
1,995

 
$
2,077

Services
925

 
926

 
2,698

 
2,746

Total Revenue
1,613

 
1,647

 
4,693

 
4,823

Cost of products
512

 
547

 
1,539

 
1,554

Cost of services
644

 
696

 
2,161

 
1,969

Total gross margin
457

 
404

 
993

 
1,300

% of Revenue
28.3
%
 
24.5
 %
 
21.2
 %
 
27.0
%
Selling, general and administrative expenses
224

 
232

 
788

 
724

Research and development expenses
53

 
59

 
175

 
186

Restructuring-related charges
12

 
72

 
33

 
72

Income (loss) from operations
168

 
41

 
(3
)
 
318

% of Revenue
10.4
%
 
2.5
 %
 
(0.1
)%
 
6.6
%
Interest expense
(42
)
 
(46
)
 
(131
)
 
(135
)
Other (expense), net
(7
)
 
(14
)
 
(14
)
 
(24
)
Total other (expense), net
(49
)
 
(60
)
 
(145
)
 
(159
)
Income (loss) before income taxes and discontinued operations
119

 
(19
)
 
(148
)
 
159

% of Revenue
7.4
%
 
(1.2
)%
 
(3.2
)%
 
3.3
%
Income tax expense
16

 
(19
)
 
50

 
14

Income (loss) from continuing operations
103

 
—

 
(198
)
 
145

(Loss) income from discontinued operations, net of tax
(4
)
 
15

 
(4
)
 
15

Net income (loss)
99

 
15

 
(202
)
 
160

Net income attributable to noncontrolling interests
1

 
—

 
4

 
2

Net income (loss) attributable to NCR
$
98

 
$
15

 
$
(206
)
 
$
158

Amounts attributable to NCR common stockholders:
 
 
 
 
 
 
 
Income (loss) from continuing operations
$
102

 
$
—

 
$
(202
)
 
$
143

Income from discontinued operations, net of tax
(4
)
 
15

 
(4
)
 
15

Net income (loss)
$
98

 
$
15

 
$
(206
)
 
$
158

Net income (loss) per share attributable to NCR common stockholders:
 
 
 
 
 
 
 
Net income (loss) per common share from continuing operations
 
 
 
 
 
 
 
Basic
$
0.60

 
$
—

 
$
(1.19
)
 
$
0.85

Diluted
$
0.59

 
$
—

 
$
(1.19
)
 
$
0.84

Net income (loss) per common share

 

 

 

Basic
$
0.58

 
$
0.09

 
$
(1.22
)
 
$
0.94

Diluted
$
0.57

 
$
0.09

 
$
(1.22
)
 
$
0.92

Weighted average common shares outstanding

 


 

 

Basic
169.8

 
168.2

 
169.5

 
167.7

Diluted
172.3

 
171.3

 
169.5

 
171.1


9


NCR CORPORATION
REVENUE AND OPERATING INCOME SUMMARY
(Unaudited)
(in millions)
Schedule B

 
For the Periods Ended September 30
 
Three Months
 
Nine Months
 
2015
 
2014
 
% Change
 
% Change Constant Currency
 
2015
 
2014
 
% Change
 
% Change Constant Currency
Revenue by segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Services
$
820

 
$
899

 
(9
)%
 
—
%
 
$
2,458

 
$
2,593

 
(5
)%
 
3
%
Retail Solutions
523

 
489

 
7
 %
 
14
%
 
1,473

 
1,482

 
(1
)%
 
6
%
Hospitality
177

 
168

 
5
 %
 
8
%
 
497

 
487

 
2
 %
 
5
%
Emerging Industries
93

 
91

 
2
 %
 
11
%
 
265

 
261

 
2
 %
 
10
%
Total Revenue
$
1,613

 
$
1,647

 
(2
)%
 
5
%
 
$
4,693

 
$
4,823

 
(3
)%
 
4
%
Operating income by segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Services
$
135

 
$
144

 
 
 
 
 
$
363

 
$
384

 
 
 
 
% of Revenue
16.5
%
 
16.0
%
 
 
 
 
 
14.8
%
 
14.8
%
 
 
 
 
Retail Solutions
43

 
24

 
 
 
 
 
101

 
108

 
 
 
 
% of Revenue
8.2
%
 
4.9
%
 
 
 
 
 
6.9
%
 
7.3
%
 
 
 
 
Hospitality
30

 
27

 
 
 
 
 
75

 
62

 
 
 
 
% of Revenue
16.9
%
 
16.1
%
 
 
 
 
 
15.1
%
 
12.7
%
 
 
 
 
Emerging Industries
10

 
9

 
 
 
 
 
27

 
15

 
 
 
 
% of Revenue
10.8
%
 
9.9
%
 
 
 
 
 
10.2
%
 
5.7
%
 
 
 
 
Subtotal-segment operating income
$
218

 
$
204

 
 
 
 
 
$
566

 
$
569

 
 
 
 
% of Revenue
13.5
%
 
12.4
%
 
 
 
 
 
12.1
%
 
11.8
%
 
 
 
 
Pension expense
5

 
1

 
 
 
 
 
431

 
2

 
 
 
 
Other adjustments (1)
45

 
162

 
 
 
 
 
138

 
249

 
 
 
 
Total income (loss) from operations
$
168

 
$
41

 
 
 
 
 
$
(3
)
 
$
318

 
 
 
 

(1) 
The following table presents the other adjustments for NCR:
 
 
For the Periods Ended September 30
 
 
Three Months
 
Nine Months
In millions
 
2015
 
2014
 
2015
 
2014
Restructuring plan
 
$
12

 
$
127

 
$
36

 
$
127

Acquisition-related amortization of intangible assets
 
31

 
29
 
94

 
89

Acquisition-related costs
 
2

 
5
 
7

 
25

Acquisition-related purchase price adjustments
 
—

 
1
 
—

 
6

OFAC and FCPA investigations
 
—

 
—

 
1

 
2

Total other adjustments
 
$
45

 
$
162

 
$
138

 
$
249



10


NCR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
Schedule C
 
September 30,
2015
 
June 30, 2015
 
December 31,
2014
Assets
 
 
 
 
 
Current assets
 
 
 
 
 
Cash and cash equivalents
$
303

 
$
425

 
$
511

Accounts receivable, net
1,424

 
1,425

 
1,404

Inventories
718

 
709

 
669

Other current assets
453

 
481

 
504

Total current assets
2,898

 
3,040

 
3,088

Property, plant and equipment, net
338

 
348

 
396

Goodwill
2,750

 
2,758

 
2,760

Intangibles, net
830

 
863

 
926

Prepaid pension cost
137

 
137

 
551

Deferred income taxes
383

 
375

 
349

Other assets
551

 
545

 
537

Total assets
$
7,887

 
$
8,066

 
$
8,607

Liabilities and stockholders’ equity
 
 
 
 
 
Current liabilities
 
 
 
 
 
Short-term borrowings
$
5

 
$
59

 
$
187

Accounts payable
691

 
695

 
712

Payroll and benefits liabilities
210

 
178

 
196

Deferred service revenue and customer deposits
537

 
567

 
494

Other current liabilities
392

 
411

 
481

Total current liabilities
1,835

 
1,910

 
2,070

Long-term debt
3,243

 
3,415

 
3,472

Pension and indemnity plan liabilities
684

 
686

 
705

Postretirement and postemployment benefits liabilities
180

 
177

 
170

Income tax accruals
176

 
181

 
181

Other liabilities
82

 
83

 
111

Total liabilities
6,200

 
6,452

 
6,709

Redeemable noncontrolling interests
12

 
16

 
15

Stockholders' equity
 
 
 
 
 
NCR stockholders' equity:
 
 
 
 
 
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of September 30, 2015, June 30, 2015 and December 31, 2014, respectively
—

 
—

 
—

Common stock: par value $0.01 per share, 500.0 shares authorized 169.9, 169.7 and 168.6 shares issued and outstanding as of September 30, 2015, June 30, 2015 and December 31, 2014, respectively
2

 
2

 
2

Paid-in capital
485

 
470

 
442

Retained earnings
1,357

 
1,259

 
1,563

Accumulated other comprehensive loss
(175
)
 
(137
)
 
(136
)
Total NCR stockholders' equity
1,669

 
1,594

 
1,871

Noncontrolling interests in subsidiaries
6

 
4

 
12

Total stockholders' equity
1,675

 
1,598

 
1,883

Total liabilities and stockholders' equity
$
7,887

 
$
8,066

 
$
8,607


11


NCR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
Schedule D

 
For the Periods Ended September 30
 
Three Months

Nine Months
 
2015
 
2014
 
2015
 
2014
Operating activities
 
 
 
 
 
 
 
Net (loss) income
$
99

 
$
15

 
$
(202
)
 
$
160

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
 
 
 
Loss (Income) from discontinued operations
4

 
(15
)
 
4

 
(15
)
Depreciation and amortization
77

 
69

 
229

 
211

Stock-based compensation expense
12

 
7

 
32

 
26

Deferred income taxes
11

 
(38
)
 
26

 
(28
)
Gain on sale of property, plant and equipment and other assets
—

 
—

 
(1
)
 
(2
)
Impairment of long-lived and other assets
—

 
8

 
16

 
8

Changes in assets and liabilities:
 
 
 
 
 
 
 
Receivables
(29
)
 
(18
)
 
(80
)
 
(106
)
Inventories
(32
)
 
22

 
(86
)
 
(5
)
Current payables and accrued expenses
42

 
45

 
17

 
47

Deferred service revenue and customer deposits
(17
)
 
(15
)
 
72

 
20

Employee benefit plans
(19
)
 
47

 
367

 
(12
)
Other assets and liabilities
22

 
(3
)
 
22

 
(69
)
Net cash provided by operating activities
170

 
124

 
416

 
235

Investing activities
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
(16
)
 
(22
)
 
(47
)
 
(88
)
Additions to capitalized software
(38
)
 
(36
)
 
(117
)
 
(109
)
Business acquisition, net
—

 
(5
)
 
—

 
(1,647
)
Changes in restricted cash
—

 
—

 
—

 
1,114

Other investing activities, net
3

 
—

 
—

 
4

Net cash used in investing activities
(51
)
 
(63
)
 
(164
)
 
(726
)
Financing activities
 
 
 
 
 
 
 
Short term borrowings, net
(28
)
 
(7
)
 
—

 
2

Payments on term credit facilities
(196
)
 
(17
)
 
(312
)
 
(20
)
Borrowings on term credit facilities
—

 
—

 
—

 
250

Payments on revolving credit facilities
(369
)
 
(273
)
 
(977
)
 
(528
)
Borrowings on revolving credit facilities
369

 
120

 
881

 
690

Debt issuance costs
—

 
—

 
—

 
(3
)
Proceeds from employee stock plans
1

 
3

 
12

 
10

Tax withholding payments on behalf of employees
—

 
(4
)
 
(10
)
 
(28
)
Other financing activities
—

 
—

 
—

 
(3
)
Net cash used in financing activities
(223
)
 
(178
)
 
(406
)
 
370

Cash flows from discontinued operations

 

 

 

Net cash (used in) provided by discontinued operations
(10
)
 
66

 
(27
)
 
28

Effect of exchange rate changes on cash and cash equivalents
(8
)
 
(8
)
 
(27
)
 
(11
)
Decrease in cash and cash equivalents
(122
)
 
(59
)
 
(208
)
 
(104
)
Cash and cash equivalents at beginning of period
425

 
483

 
511

 
528

Cash and cash equivalents at end of period
$
303

 
$
424

 
$
303

 
$
424


12
q32015callslidesfinal
1 Q3 2015 EARNINGS CONFERENCE CALL BILL NUTI, CHAIRMAN AND CEO BOB FISHMAN, CFO October 27, 2015

 
2 NOTES TO INVESTORS FORWARD-LOOKING STATEMENTS. Comments made during this conference call and in these materials contain forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that describe or relate to NCR's future plans, goals, intentions, strategies or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements. The forward-looking statements in these materials include statements about NCR's expectations for meeting its full-year financial objectives; expectations for revenue growth in NCR’s divisions; expectations regarding the transformation of NCR’s sales and services functions; the success and expected savings, income statement and cash impacts of NCR’s ongoing restructuring plan; foreign currency fluctuations and their impact on NCR’s results; and NCR's FY 2015 free cash flow, FY 2015 overall, FY 2015 segment and Q4 2015 financial outlook. Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, 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 important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including those factors listed in Item 1a "Risk Factors" of NCR's Annual Report on Form 10-K and those factors detailed from time to time in NCR's other SEC reports. These materials are dated October 27, 2015, and NCR 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. NON-GAAP MEASURES. While NCR reports its results in accordance with generally accepted accounting principles in the United States (GAAP), comments made during this conference call and these materials will include the following "non-GAAP" measures: non- pension operating income (NPOI), non-GAAP diluted earnings per share (non-GAAP diluted EPS), free cash flow (FCF), operational gross margin, operational gross margin rate, expenses (non-GAAP), adjusted EBITDA, effective tax rate, non-GAAP net income and selected measures expressed on a constant currency basis. These measures are included to provide additional useful information regarding NCR's financial results, and are not a substitute for their comparable GAAP measures. Explanations of these non-GAAP measures and reconciliations of these non-GAAP measures to their directly comparable GAAP measures are included in the accompanying "Supplementary Non-GAAP Materials" and are available on the Investor Relations page of NCR's website at www.ncr.com. Descriptions of many of these non-GAAP measures are also included in NCR's SEC reports. USE OF CERTAIN TERMS. As used in these materials, (i) the term "software-related revenue" includes software license, software maintenance, cloud, and professional services revenue associated with software delivery, (ii) the term "recurring revenue" means the sum of cloud, hardware maintenance and software maintenance revenue, (iii) the terms "cloud" and "cloud revenue" are used to describe NCR’s software-as-a-service offerings and the revenue associated therewith (prior earnings releases and presentation materials referred to these offerings and revenues as "SaaS" and "SaaS revenue") and (iv) the term "CC" means constant currency. These presentation materials and the associated remarks made during this conference call are integrally related and are intended to be presented and understood together.

 
3 Q3 2015 FINANCIAL RESULTS REVENUE Q3 2014 Q3 2015 $1.65 billion Revenue down 2% y/y, up 5% CC Recurring revenue up 1% y/y, up 8% CC, 42% of total revenue OPERATIONAL GROSS MARGIN Q3 2014 Q3 2015 28.9% 29.4% Up 50 bps y/y, up ~20 bps CC NPOI NPOI up 7% y/y, up 15% CC Non-GAAP EPS up 16% y/y, up 25% CC FREE CASH FLOW Excluding $93 million of recoveries from the Fox River environmental matter in Q3 2014, FCF up $67 million due to improved cash from operations Q3 2014 Q3 2015 $204 million $218 million Q3 2014 Q3 2015 $132 million $106 million $1.61 billion NON-GAAP EPS Q3 2014 Q3 2015 $0.78 $0.67 FX Impact ~($120M) FX Impact ~($0.06) FX Impact ~($17M) FX Impact ~30 bps

 
4 SOFTWARE-RELATED REVENUE GROWTH Q3 2015 Q3 2014 $125 QTD • QTD Software-related revenue up 1% y/y; up 5% CC • QTD Cloud revenue up 6% y/y; up 7% CC • QTD Professional Services revenue down 3% y/y; up 3% CC $434 Cloud Professional Services SW Licenses & SW Maintenance $157 Q3 2015 $1,288 Q3 2014 ($'s in Millions) • YTD Software-related revenue up 1% y/y; up 5% CC • YTD Cloud revenue up 11% y/y; up 12% CC • YTD Professional Services revenue down 5% y/y; up 1% CC $148 $143 $133 $158 YTD $475 $402 $411 $476 $363 $432 $430 $1,271

 
5 Q3 2015 SUMMARY Q3 aggregate results in-line with expectations • Balanced performance with margin expansion across all businesses • Continued significant FX headwinds and managing through challenging developing markets • On track to achieve full year earnings and free cash flow goals • Industry consolidation continues to impact competitors in legacy business Healthy division performance and improved OI% for each division driven by omni- commerce solutions despite macroeconomic headwinds • Financial Services – 3% CC revenue growth excluding China/Russia • Retail – 14% CC revenue growth • Hospitality – 8% CC revenue growth Growth of software and cloud revenues • Total software-related revenue up 5% CC • Cloud revenue up 7% CC; driven by Hospitality Building a stronger NCR • Sales and Services transformation delivering results • Restructuring initiatives on track Continued improvements in free cash flow linearity year-over-year

 
6 For the Three Months Ended September 30 2015 2014 As Reported Constant Currency Revenue $1,613 $1,647 (2)% 5% Operational Gross Margin 475 476 —% 6% Operational Gross Margin Rate 29.4% 28.9% Expenses (non-GAAP) 257 272 (6)% —% % of Revenue 15.9% 16.5% NPOI 218 204 7% 15% % of Revenue 13.5% 12.4% +110 bps +110 bps Interest and other expense (49) (57) (14)% (8)% Non-GAAP Diluted EPS (1) $0.78 $0.67 16% 25% Q3 OPERATIONAL RESULTS (1) Effective tax rate of 20% in Q3 2015 and 22% in Q3 2014. $ millions, except per share amounts

 
7 For the Three Months Ended September 30 2015 2014 % Change Revenue $1,613 $1,647 (2)% Gross Margin (1) 457 404 13% Gross Margin Rate 28.3% 24.5% Expenses (1) 289 363 (20)% % of Revenue 17.9% 22.0% Income from Operations (1) 168 41 310% % of Revenue 10.4% 2.5% Interest and other expense (49) (60) (18)% GAAP Diluted EPS (1) $0.59 $— 100% Q3 GAAP RESULTS $ millions, except per share amounts(1) Includes the impact of the restructuring program in Q3 2015 and 2014. See further detail on slides 23 and 24, respectively.

 
8 FINANCIAL SERVICES Q3 2015 Update • Revenue down 9% as reported and flat CC; CC growth in Americas, South Pacific & MEA offset by China/Russia (Up 3% CC excluding China & Russia) • Operating income down 6% as reported; up 2% CC due to a favorable mix of revenue and expense management • Remain focused on profitability through our transformation initiatives, mix shifts and operating margin expansion • Continued growth in CC operating income despite higher than expected headwinds in China and Russia as well as local currency weakness impacting Middle East / Africa • CC backlog position grew double-digits driven by Branch Transformation and CxBanking; inherently slower conversion rates affecting short-term revenue • Industry consolidation signaling positive indicators for future demand Key Market Developments Financial Results Q3 2015 Q3 2014 As Reported Constant Currency Revenue $820M $899M (9%) —% Operating Income $135M $144M (6%) 2% Operating Income as a % of Revenue 16.5% 16.0% +50 bps +40 bps • Software-related revenue down 3% as reported and up 2% CC • Branch Transformation revenue grew 94% led by North America Key Metrics

 
9 RETAIL SOLUTIONS Q3 2015 Update • Revenue up 7% as reported and up 14% CC; CC growth in all regions • Operating income up 79% as reported and up 92% CC due to higher revenue, including more software-related revenue and expense management • Retail One omni-commerce platform continues to achieve positive reaction from the market and our customers • Market continues to show signs of overall improvement; some regions experiencing slower growth and FX still a concern in some geographies • Gaining momentum in the channel in EMEA and developing markets • Success gaining new competitive key accounts globally • Australian supermarket Coles awards NCR "Supplier of the Year" award for outstanding Service Key Market Developments Financial Results Q3 2015 Q3 2014 As Reported Constant Currency Revenue $523M $489M 7% 14% Operating Income $43M $24M 79% 92% Operating Income as a % of Revenue 8.2% 4.9% +330 bps +340 bps • Cloud revenue up 8% as reported; up 12% CC • Software-related revenue flat as reported; up 4% CC Key Metrics

 
10 HOSPITALITY Q3 2015 Update • Revenue up 5% as reported and up 8% CC growth due to higher software-related revenue • Operating income up 11% as reported and up 15% CC due to higher software-related revenue including cloud and professional services revenue • Stronger market and allocation of resources to sales leading to improved overall results across markets • Strong cloud revenue growth driven by omni-channel; total cloud application sites up 19% y/y • Deployed 40,000th application site in the Manage SaaS application family, including 9,000 Pulse Real-Time application sites • Continued success executing SMB market strategy with 4% revenue growth y/y and 8% software-related revenue growth y/y • Strong competitive customer wins in North America, leading to new opportunities in market adjacencies Key Market Developments Financial Results Q3 2015 Q3 2014 As Reported Constant Currency Revenue $177M $168M 5% 8% Operating Income $30M $27M 11% 15% Operating Income as a % of Revenue 16.9% 16.1% +80 bps +100 bps • Cloud revenue up 22%; up 25% CC • Software-related revenue up 18%; up 20% CC Key Metrics

 
11 EMERGING INDUSTRIES Q3 2015 Update • Revenue up 2% as reported and up 11% CC; CC growth driven by Telecom & Technology revenue Telecom & Technology ▪ Revenue growth and margin expansion due to improved Services performance Travel ▪ Redesigning check-in experiences around the world - record 46 million mobile airline boarding passes in Q3 2015, up 35% y/y Small Business (NCR Silver) • Driving further adoption of NCR Silver; customer base up 5% over Q2 2015 and up 57% y/y Key Market Developments Financial Results Q3 2015 Q3 2014 As Reported Constant Currency Revenue $93M $91M 2% 11% Operating Income $10M $9M 11% 22% Operating Income as a % of Revenue 10.8% 9.9% +90 bps +100 bps Key Metrics • Operating income up 11% as reported and up 22% CC due to higher services margins

 
12 Q3 SUPPLEMENTAL REVENUE INFORMATION For the Periods Ended September 30 Three Months 2015 2014 % Change % Change (Constant Currency) Cloud $133 $125 6% 7% Software License and Software Maintenance 158 157 1% 6% Professional Services 143 148 (3%) 3% Total Software-Related Revenue 434 430 1% 5% Hardware 616 650 (5%) 4% Other Services 563 567 (1%) 7% Total Revenue $1,613 $1,647 (2%) 5% $ millions

 
13 FREE CASH FLOW QTD YTD FY 2015e FY 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Cash Provided by Operating Activities (1) $170 $124 $416 $235 $620 - $650 $524 Net capital expenditures (54) (58) (164) (197) (215) - (235) (258) Cash (Used in) Provided by Discontinued Operations (10) 66 (27) 28 (35) (1) Pension discretionary contributions and settlements — — — 18 — 48 Free Cash Flow $106 $132 $225 $84 $350 - $400 $313 Free Cash Flow as a % of non-GAAP net income ~80% 67% $ millions, except metrics (1) Includes cash tax rate of 12% in FY 2014 and an expected cash tax rate of 13% in FY 2015.

 
14 RESTRUCTURING PROGRESS UPDATE Expected Savings • $18M in 2014, ~$70M in 2015 and ~$105M in 2016 • ~50% of the savings benefiting NPOI in each year GAAP Income Statement Impact • Total charge of $217M to $225M from 2014 through 2015; • $36M YTD Q3 2015 • ~$20M to ~$28M remaining in FY 2015 Cash Impact • Total cash impact of $100M to $115M from 2014 through 2015; • $51M YTD Q3 2015 • ~$20M to ~$35M remaining in FY 2015

 
15 NET DEBT & EBITDA METRICS Q3 2014 Q4 2014 Q3 2015 Debt $3,745 $3,659 $3,248 Cash 424 511 303 Net Debt $3,321 $3,148 $2,945 Adjusted EBITDA $963 (1) $1,000 $1,012 (1) Net Debt / Adjusted EBITDA 3.4x 3.1x 2.9x $ in millions, except metrics (1) Adjusted EBITDA for the trailing twelve-month period. Achieved 2015 leverage multiple goal one quarter earlier than targeted due to higher free cash flow

 
16 Current 2015 Guidance Prior 2015 Guidance 2014 Revenue $6,380 - $6,410 $6,525 - $6,675 $6,591 Year-over-Year Revenue Growth (3%) - (2%) (1%) to 1% 8% Constant Currency Year-Over-Year Revenue Growth 3% - 4% (1) 5% to 7% 10% Income from Operations (GAAP)(2) $196 - $214 $194 - $259 $353 Non-Pension Operating Income (NPOI) $830 - $840 $830 - $870 $820 Adjusted EBITDA $1,040 - $1,050 $1,040 - $1,080 $1,000 Diluted EPS (GAAP)(2) ($0.60) - ($0.45) ($0.70) - ($0.40) $1.06 Non-GAAP Diluted EPS(3) $2.70 - $2.80 $2.60 - $2.80 $2.74 Cash Flow from Operating Activities $620 - $650 $620 - $650 $524 Free Cash Flow $350 - $400 $350 - $400 $313 FY 2015 GUIDANCE $ in millions, except per share amounts (1) Expected constant currency growth of 3% - 4%, which includes unfavorable foreign currency impacts of approximately 6% in revenue. Foreign currency headwinds on revenue increased by $65 million from our previous guidance. (2) For 2014, actuarial mark-to-market pension adjustment is included; 2015 guidance does not include actuarial mark-to-market pension adjustments, which will be determined in Q4 2015. (3) 2015 guidance now includes expected other expense (income), net (OIE) of $204M, a 24% to 25% tax rate and a share count of 173M. 2014 results include OIE of $213M, a 22% tax rate and a share count of 171.2M. 2015 guidance previously included OIE of $215 million to $220 million, a 25% tax rate and a share count of 175M.

 
17 2015 SEGMENT REVENUE GUIDANCE Segment 2015e 2015e Constant Currency FY 2014 Financial Services (6%) - (5%) 1% - 2% $3,561 Retail Solutions 1% - 2% 5% - 6% $2,008 Hospitality 3% - 5% 5% - 7% $659 Emerging Industries (3%) - (1%) 5% - 7% $363 Total (3%) - (2%) 3% - 4% $6,591 $ in millions Note - The 2015e and 2015e Constant Currency revenue growth ranges by segment have been updated from prior guidance. The 2015e Constant Currency revenue growth ranges in the previous guidance were 4% to 6% for Financial Services; 4% to 6% for Retail Solutions; 5% to 9% for Hospitality; 0% to 5% for Emerging Industries; and 5% to 7% for Total.

 
18 Q4 2015 GUIDANCE Q4 2015e Q4 2014 Revenue $1,687 - $1,717 (1) $1,768 Income from Operations (GAAP) $199 - $217 (2) $35 Non-Pension Operating Income (Non-GAAP) $264 - $274 (3) $251 Tax rate 27% to 30% 20% Other expense ~$55 $57 $ millions(1) Includes an estimated unfavorable foreign currency impact of approximately 5% in revenue. (2) Includes an estimated pre-tax charge of $20M - $28M in Q4 2015 related to the ongoing restructuring plan and does not include actuarial mark-to-market pension adjustments, which will be determined in Q4 2015. (3) Includes an estimated unfavorable foreign currency impact of approximately $19M in NPOI in Q4 2015.

 
SUPPLEMENTARY NON-GAAP MATERIALS

 
20 NON-GAAP MEASURES While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful information regarding NCR's financial results, and are not a substitute for their comparable GAAP measures. NPOI, Non-GAAP Diluted EPS, Operational Gross Margin, Operational Gross Margin Rate, Expenses (non-GAAP), Effective Tax Rate and Non-GAAP Net Income. NCR's non-pension operating income (NPOI), non-GAAP net income and non-GAAP diluted earnings per share (non-GAAP diluted EPS) are determined by excluding pension expense and special items, including amortization of acquisition related intangibles, from NCR's GAAP income (loss) from operations. NCR also determines operational gross margin, operational gross margin rate, expenses (non-GAAP) and effective tax rate (non-GAAP) by excluding pension expense and these special items from its GAAP gross margin, gross margin rate, expenses and effective tax rate. 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, NCR's management uses these non-GAAP measures to evaluate year-over-year operating performance. NCR also uses NPOI and non-GAAP diluted EPS to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes these measures are useful for investors because they provide a more complete understanding of NCR's underlying operational performance, as well as consistency and comparability with NCR's past reports of financial results. Free Cash Flow. 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. Free cash flow (FCF) does not have a uniform definition under GAAP and, therefore, NCR's definition may differ from other companies' definition of this measure.

 
21 NON-GAAP MEASURES Adjusted EBITDA. NCR believes that Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) provides useful information to investors because it is an indicator of the strength and performance of the Company's ongoing business operations, including its ability to fund discretionary spending such as capital expenditures, strategic acquisitions and other investments. NCR determines Adjusted EBITDA for a given period based on its GAAP income (loss) from continuing operations plus interest expense, net; plus income tax expense (benefit); plus depreciation and amortization; plus other income (expense); plus pension expense (benefit); and plus special items included in the definition of NPOI. NCR believes that its ratio of net debt to Adjusted EBITDA provides useful information to investors because it is an indicator of the company's ability to meet its future financial obligations. Constant Currency. NCR presents certain measures, such as period-over-period revenue growth, on a constant currency basis, which excludes the effects of foreign currency translation. Due to the continuing strengthening of the U.S. dollar against foreign currencies and the overall variability of foreign exchange rates from period to period, NCR's management uses these measures on a constant currency basis to evaluate period-over-period operating performance. Measures presented on a constant currency basis are calculated by translating current period results at prior period monthly average exchange rates. NCR management's definitions and calculations 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. These non- GAAP measures are reconciled to their corresponding GAAP measures in the following slides and elsewhere in these materials. These reconciliations and other information regarding these non-GAAP measures are also available on the Investor Relations page of NCR's website at www.ncr.com.

 
22 Income from Operations (GAAP) to Non-Pension Operating Income (non-GAAP) and Adjusted EBITDA (non-GAAP) in millions Q3 2014 LTM FY 2014 Q3 2015 LTM Q2 2015 LTM FY 2015e Q4 2015e Q4 2014 Income (Loss) from Operations (GAAP) $615 $353 $32 ($95) $196 - $214 $199 - $217 $35 Pension Expense (Benefit) (97) 152 581 577 434 3 150 Restructuring Plan 127 160 69 184 56 - 64 $20 - $28 33 Acquisition-Related Amortization of Intangibles 106 119 124 122 125 31 30 Acquisition-Related Costs 27 27 9 12 10 3 2 Acquisition-Related Purchase Price Adjustment 9 6 — 1 — — — OFAC and FCPA Investigations(1) 3 3 2 2 1 — 1 Non-Pension Operating Income (non-GAAP) $790 $820 $817 $803 $830 - $840 $264 - $274 $251 Depreciation and Amortization 146 152 165 159 175 Ongoing Pension Expense (6) (3) (7) (2) (10) Stock Compensation Expense 33 31 37 32 45 Adjusted EBITDA $963 $1,000 $1,012 $992 $1,040 - $1,050 GAAP TO NON-GAAP RECONCILIATION (1) Estimated expenses for 2015 will be affected by, among other things, the status and progress of the OFAC matter.  There can be no assurance that the Company will not be subject to fines or other remedial measures as a result of OFAC's investigation.

 
23 in millions (except per share amounts) Q3 QTD 2015 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit Q3 QTD 2015 non-GAAP Product revenue $688 $— $— $— $— $— $— $688 Service revenue 925 — — — — — — 925 Total revenue 1,613 — — — — — — 1,613 Cost of products 512 — (9) — — — 1 504 Cost of services 644 — (6) — — — (4) 634 Gross margin 457 — 15 — — — 3 475 Gross margin rate 28.3% —% 0.9% —% —% —% 0.2% 29.4% Selling, general and administrative expenses 224 — (16) (2) — — (1) 205 Research and development expenses 53 — — — — — (1) 52 Restructuring-related charges 12 (12) — — — — — — Total expenses 289 (12) (16) (2) — — (2) 257 Total expense as a % of revenue 17.9% (0.7)% (1.1)% (0.1)% —% —% (0.1)% 15.9% Income (loss) from operations 168 12 31 2 — — 5 218 Income (loss) from operations as a % of revenue 10.4% 0.7% 2.0% 0.1% —% —% 0.3% 13.5% Interest and Other (expense) income, net (49) — — — — — — (49) Income (loss) from continuing operations before income taxes 119 12 31 2 — — 5 169 Income tax expense (benefit) 16 4 10 — — — 3 33 Effective tax rate 13% 20% Income (loss) from continuing operations 103 8 21 2 — — 2 136 Net income (loss) attributable to noncontrolling interests 1 — — — — — — 1 Income (loss) from continuing operations (attributable to NCR) $102 $8 $21 $2 $— $— $2 $135 Diluted earnings per share $0.59 $0.05 $0.12 $0.01 $— $— $0.01 $0.78 Diluted shares outstanding 172.3 172.3 GAAP TO NON-GAAP RECONCILIATION Q3 2015 QTD

 
24 in millions (except per share amounts) Q3 QTD 2014 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit Q3 QTD 2014 non-GAAP Product revenue $721 $— $— $— $— $— $— $721 Service revenue 926 — — — — — — 926 Total revenue 1,647 — — — — — — 1,647 Cost of products 547 (9) (9) — (1) — — 528 Cost of services 696 (46) (6) — — — (1) 643 Gross margin 404 55 15 — 1 — 1 476 Gross margin rate 24.5% 3.3% 0.9% —% 0.1% —% 0.1% 28.9% Selling, general and administrative expenses 232 — (14) (5) — — — 213 Research and development expenses 59 — — — — — — 59 Restructuring-related charges 72 (72) — — — — — — Total expenses 363 (72) (14) (5) — — — 272 Total expense as a % of revenue 22.0% (4.4)% (0.8)% (0.3)% —% —% —% 16.5% Income (loss) from operations 41 127 29 5 1 — 1 204 Income (loss) from operations as a % of revenue 2.5% 7.7% 1.7% 0.3% 0.1% —% 0.1% 12.4% Interest and Other (expense) income, net (60) 3 — — — — — (57) Income (loss) from continuing operations before income taxes (19) 130 29 5 1 — 1 147 Income tax expense (benefit) (19) 31 9 1 1 — 9 32 Effective tax rate 100% 22% Income (loss) from continuing operations — 99 20 4 — — (8) 115 Net income (loss) attributable to noncontrolling interests — — — — — — — — Income (loss) from continuing operations (attributable to NCR) $— $99 $20 $4 $— $— ($8) $115 Diluted earnings per share $— $0.58 $0.12 $0.02 $— $— ($0.05) $0.67 Diluted shares outstanding 171.3 171.3 GAAP TO NON-GAAP RECONCILIATION Q3 2014 QTD

 
25 in millions (except per share amounts) Q3 YTD 2015 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit Q3 YTD 2015 non-GAAP Product revenue $1,995 $— $— $— $— $— $— $1,995 Service revenue 2,698 — — — — — — 2,698 Total revenue 4,693 — — — — — — 4,693 Cost of products 1,539 (3) (28) — — — (9) 1,499 Cost of services 2,161 — (19) — — — (297) 1,845 Gross margin 993 3 47 — — — 306 1,349 Gross margin rate 21.2% 0.1% 1.0% —% —% —% 6.4% 28.7% Selling, general and administrative expenses 788 — (47) (7) — (1) (115) 618 Research and development expenses 175 — — — — — (10) 165 Restructuring-related charges 33 (33) — — — — — — Total expenses 996 (33) (47) (7) — (1) (125) 783 Total expense as a % of revenue 21.2% (0.7)% (1.0)% (0.1)% —% —% (2.7)% 16.7% Income (loss) from operations (3) 36 94 7 — 1 431 566 Income (loss) from operations as a % of revenue (0.1)% 0.8% 2.0% 0.1% —% —% 9.3% 12.1% Interest and Other (expense) income, net (145) — — — — — — (145) Income (loss) from continuing operations before income taxes (148) 36 94 7 — 1 431 421 Income tax expense (benefit) 50 10 30 2 — 1 2 95 Effective tax rate (34)% 23% Income (loss) from continuing operations (198) 26 64 5 — — 429 326 Net income (loss) attributable to noncontrolling interests 4 — — — — — — 4 Income (loss) from continuing operations (attributable to NCR) ($202) $26 $64 $5 $— $— $429 $322 Diluted earnings per share ($1.19) $0.15 $0.37 $0.03 $— $— $2.51 $1.87 Diluted shares outstanding 169.5 172.0 GAAP TO NON-GAAP RECONCILIATION Q3 2015 YTD

 
26 in millions (except per share amounts) Q3 YTD 2014 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit Q3 YTD 2014 non-GAAP Product revenue $2,077 — — — — — — $2,077 Service revenue 2,746 — — — — — — 2,746 Total revenue 4,823 — — — — — — 4,823 Cost of products 1,554 (9) (29) — (4) — — 1,512 Cost of services 1,969 (46) (18) — (2) — — 1,903 Gross margin 1,300 55 47 — 6 — — 1,408 Gross margin rate 27.0% 1.1% 1.0% —% 0.1% —% —% 29.2% Selling, general and administrative expenses 724 — (42) (25) — (2) (1) 654 Research and development expenses 186 — — — — — (1) 185 Restructuring-related charges 72 (72) — — — — — — Total expenses 982 (72) (42) (25) — (2) (2) 839 Total expense as a % of revenue 20.4% (1.5)% (0.9)% (0.6)% —% —% —% 17.4% Income (loss) from operations 318 127 89 25 6 2 2 569 Income (loss) from operations as a % of revenue 6.6% 2.7% 1.9% 0.5% 0.1% —% —% 11.8% Interest and Other (expense) income, net (159) 3 — — — — — (156) Income (loss) from continuing operations before income taxes 159 130 89 25 6 2 2 413 Income tax expense (benefit) 14 31 29 6 2 1 10 93 Effective tax rate 9% 23% Income (loss) from continuing operations 145 99 60 19 4 1 (8) 320 Net income (loss) attributable to noncontrolling interests 2 — — — — — — 2 Income (loss) from continuing operations (attributable to NCR) $143 $99 $60 $19 $4 $1 ($8) $318 Diluted earnings per share $0.84 $0.58 $0.35 $0.11 $0.02 $0.01 ($0.05) $1.86 Diluted shares outstanding 171.1 171.1 GAAP TO NON-GAAP RECONCILIATION Q3 2014 YTD

 
27 in millions (except per share amounts) Q4 QTD 2014 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit Q4 QTD 2014 non-GAAP Product revenue $815 — — — — — — $815 Service revenue 953 — — — — — — 953 Total revenue 1,768 — — — — — — 1,768 Cost of products 599 — (10) — — — (3) 586 Cost of services 737 (1) (6) — — — (82) 648 Gross margin 432 1 16 — — — 85 534 Gross margin rate 24.4% 0.1% 0.9% —% —% —% 4.8% 30.2% Selling, general and administrative expenses 288 — (14) (2) — (1) (47) 224 Research and development expenses 77 — — — — — (18) 59 Restructuring-related charges 32 (32) — — — — — — Total expenses 397 (32) (14) (2) — (1) (65) 283 Total expense as a % of revenue 22.5% (1.8)% (0.8)% (0.1)% —% (0.1)% (3.7)% 16.0% Income (loss) from operations 35 33 30 2 — 1 150 251 Income (loss) from operations as a % of revenue 2.0% 1.9% 1.7% 0.1% —% 0.1% 8.4% 14.2% Interest and Other (expense) income, net (57) — — — — — — (57) Income (loss) from continuing operations before income taxes (22) 33 30 2 — 1 150 194 Income tax expense (benefit) (62) 14 10 1 — — 76 39 Effective tax rate 282% 20% Income (loss) from continuing operations 40 19 20 1 — 1 74 155 Net income (loss) attributable to noncontrolling interests 2 2 — — — — — 4 Income (loss) from continuing operations (attributable to NCR) $38 $17 $20 $1 $— $1 $74 $151 Diluted earnings per share $0.22 $0.10 $0.11 $0.01 $— $0.01 $0.43 $0.88 Diluted shares outstanding 171.3 171.3 GAAP TO NON-GAAP RECONCILIATION Q4 2014 QTD

 
28 in millions (except per share amounts) FY 2014 GAAP Restructuring plan Acquisition- related amortization of intangibles Acquisition- related costs Acquisition- related purchase price adjustments OFAC and FCPA Investigations Pension (expense) benefit FY 2014 non-GAAP Product revenue $2,892 — — — — — — $2,892 Service revenue 3,699 — — — — — — 3,699 Total revenue 6,591 — — — — — — 6,591 Cost of products 2,153 (9) (39) — (4) — (3) 2,098 Cost of services 2,706 (47) (24) — (2) — (82) 2,551 Gross margin 1,732 56 63 — 6 — 85 1,942 Gross margin rate 26.3% 0.8% 1.0% —% 0.1% —% 1.3% 29.5% Selling, general and administrative expenses 1,012 — (56) (27) — (3) (48) 878 Research and development expenses 263 — — — — — (19) 244 Restructuring-related charges 104 (104) — — — — — — Total expenses 1,379 (104) (56) (27) — (3) (67) 1,122 Total expense as a % of revenue 20.9% (1.6)% (0.8)% (0.4)% —% —% (1.1)% 17.0% Income (loss) from operations 353 160 119 27 6 3 152 820 Income (loss) from operations as a % of revenue 5.4% 2.4% 1.8% 0.4% 0.1% —% 2.3% 12.4% Interest and Other (expense) income, net (216) 3 — — — — — (213) Income (loss) from continuing operations before income taxes 137 163 119 27 6 3 152 607 Income tax expense (benefit) (48) 45 39 7 2 1 86 132 Effective tax rate (35)% 22% Income (loss) from continuing operations 185 118 80 20 4 2 66 475 Net income (loss) attributable to noncontrolling interests 4 2 — — — — — 6 Income (loss) from continuing operations (attributable to NCR) $181 $116 $80 $20 $4 $2 $66 $469 Diluted earnings per share $1.06 $0.68 $0.47 $0.12 $0.02 $0.01 $0.38 $2.74 Diluted shares outstanding 171.2 171.2 GAAP TO NON-GAAP RECONCILIATION FY 2014

 
29 GAAP TO NON-GAAP RECONCILIATION Current 2015 Guidance Prior 2015 Guidance Diluted EPS (GAAP) ($0.60) - ($0.45) ($0.70) - ($0.40) Pension Expense (Benefit) 2.51 2.51 Restructuring Plan 0.23 - 0.28 0.18 - 0.28 Acquisition-Related Costs 0.04 0.04 Acquisition-Related Amortization of Intangibles 0.47 0.47 OFAC and FCPA Investigations(1) — — Non-GAAP Diluted EPS $2.70 - $2.80 $2.60 - $2.80 Diluted Earnings per Share (GAAP) to Non-GAAP Diluted Earnings per Share (non-GAAP) (1) Estimated expenses for 2015 will be affected by, among other things, the status and progress of the OFAC matter.  There can be no assurance that the Company will not be subject to fines or other remedial measures as a result of OFAC's investigation.

 
30 GAAP TO NON-GAAP RECONCILIATION Revenue Growth % (GAAP) to Revenue Growth % on a Constant Currency Basis (non-GAAP) Q3 2015 QTD Revenue Growth % (GAAP) Favorable (unfavorable) FX impact Constant Currency Revenue Growth % (non-GAAP) Financial Services (9)% (9)% —% Retail Solutions 7% (7)% 14% Hospitality 5% (3)% 8% Emerging Industries 2% (9)% 11% Total Revenue (2)% (7)% 5%

 
31 GAAP TO NON-GAAP RECONCILIATION Revenue Growth % (GAAP) to Revenue Growth % on a Constant Currency Basis (non-GAAP) Q3 2015 QTD Revenue Growth % (GAAP) Favorable (unfavorable) FX impact Constant Currency Revenue Growth % (non-GAAP) Cloud 6% (1)% 7% Software License/ Software Maintenance 1% (5)% 6% Professional Services (3)% (6)% 3% Total Software Related 1% (4)% 5% Hardware (5)% (9)% 4% Other Services (1)% (8)% 7% Total Revenue (2)% (7)% 5%

 
32 GAAP TO NON-GAAP RECONCILIATION Revenue Growth % (GAAP) to Revenue Growth % on a Constant Currency Basis (non-GAAP) Q3 2015 YTD Revenue Growth % (GAAP) Favorable (unfavorable) FX impact Constant Currency Revenue Growth % (non-GAAP) Cloud 11% (1)% 12% Professional Services (5)% (6)% 1% Total Software Related 1% (4)% 5%

 
33 GAAP TO NON-GAAP RECONCILIATION Operating Income Growth % (GAAP) to Operating Income Growth % on a Constant Currency Basis (non-GAAP) Q3 2015 QTD Operating Income Growth % Reported Favorable (unfavorable) FX impact Constant Currency Operating Income Growth % (non- GAAP) Financial Services (6)% (8)% 2% Retail Solutions 79% (13)% 92% Hospitality 11% (4)% 15% Emerging Industries 11% (11)% 22% Total Operating Income 7% (8)% 15%

 
34 GAAP TO NON-GAAP RECONCILIATION Operating Income Growth bps (GAAP) to Operating Income Growth bps on a Constant Currency Basis (non-GAAP) Q3 2015 QTD Operating Income bps Growth Reported Favorable (unfavorable) FX impact Constant Currency Operating Income bps Growth (non- GAAP) Financial Services +50 bps +10 bps +40 bps Retail Solutions +330 bps -10 bps +340 bps Hospitality +80 bps -20 bps +100 bps Emerging Industries +90 bps -10 bps +100 bps Total Operating Income +110 bps — bps +110 bps

 
35