Company expects to improve its underfunded position by an estimated
$800 million through contributions to the U.S. qualified pension plan
and a voluntary lump sum payment offer to certain former employees who
are participants
DULUTH, Ga.--(BUSINESS WIRE)--Jul. 31, 2012--
NCR
Corporation (NYSE : NCR) announced today that it expects to make a
contribution to its U.S. pension plan and offer a voluntary lump sum
payment option to certain former employees who are deferred vested
participants of the U.S. pension plan who have not yet started monthly
payments of their pension benefit. The planned contributions will be
financed through capital market borrowings.
“These actions are major steps toward our objective of permanently
reducing NCR's pension liability and supporting our profitable growth
strategy,” said Bill Nuti, NCR's Chairman and CEO. “The transactions
will reduce the size of the U.S. plan, improve plan funded status, free
up cash flow, reduce pension-related expenses and lock in attractive
financing rates. Importantly, the transactions will strengthen our
balance sheet, enhance our capability to invest for growth and strongly
position NCR to execute its strategic priorities.”
The actions announced today constitute the second phase of NCR's pension
strategy. In April 2010, NCR announced the first phase of its strategy
to substantially reduce future volatility in its U.S. pension plan
through a rebalancing of its asset allocation to a portfolio of entirely
fixed income assets by the end of 2012. As a result, fixed income asset
allocation increased from 39 percent at the end of 2009 to 80 percent in
2011, and is expected to be at 100 percent fixed income by year-end 2012.
The total liability associated with the U.S. deferred vested
participants is approximately 33 percent of the U.S. pension liability.
In the coming weeks, NCR will contact approximately 23,000 eligible
deferred vested participants with personalized information about the
voluntary lump sum offer, which is designed to give them more
flexibility in managing their retirement. NCR expects to complete lump
sum payouts under the voluntary lump sum offer by year end 2012.
NCR is being advised by J.P. Morgan in the review and implementation of
its comprehensive pension strategy.
A conference call is scheduled for today at 5 p.m. EDT to discuss the
next steps in NCR's pension strategy. The conference call number is
1-888-843-9982 Participant Passcode: NCR. Access to the conference call
and a presentation describing the pension strategy will be available on
NCR's website at http://investor.ncr.com/.
Overview of voluntary lump sum offer
The details of the offer will be described in the personalized
information eligible deferred vested participants will receive in the
coming weeks.
The offer will include the following choices, which are designed to
provide greater flexibility in managing retirement savings:
-
One-time lump sum payment rolled over to an IRA or another employer's
qualified plan (if permitted by that plan)
-
One-time lump sum payment rolled over to the NCR Savings Plan (for NCR
Savings Plan participants only)
-
One-time lump sum payment in cash payable in December 2012
-
Monthly annuity payment (single life or joint and survivor) commencing
in December 2012
-
Take no action (remain in the U.S. pension plan as a deferred vested
participant)
Eligible participants will have from August 31 until October 31, 2012 to
make a decision on these options. Participants with questions prior to
August 31 can visit the NCR website http://www.ncr.com/ncr-lump-sum-offer
for additional details on the offer.
Participants who are currently receiving monthly benefits from the U.S.
pension plan (retirees), active participants (current employees of NCR)
of the U.S. pension plan and certain other participants of the U.S.
pension plan are not eligible for this offer.
About NCR Corporation
NCR Corporation (NYSE: NCR) is a global technology company leading how
the world connects, interacts and transacts with business. NCR's
assisted- and self-service solutions and comprehensive support services
address the needs of retail, financial, travel, hospitality, gaming,
public sector, telecom carrier and equipment organizations in more than
100 countries. NCR (www.ncr.com)
is headquartered in Duluth, Georgia.
# # #
NCR is a trademark of NCR Corporation in the United States and other
countries.
Notes 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," and other similar expressions
or future or conditional verbs such as "will," "should," "would" and
"could". They include statements as to NCR's anticipated or expected
results; future financial performance; projections of revenue, profit
growth and other financial items; expectations regarding pension
metrics, future contributions and funding obligations, and the economic
and other effects thereof; plans with respect to lump sum payment
options to be offered to certain pension plan participants and the
effect thereof; strategies and intentions regarding NCR's pension plans;
discussion of other strategic initiatives and related actions; comments
about future market or industry performance; 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, which could impact the ability of our customers to make
capital expenditures, purchase our products and pay accounts receivable,
and drive further consolidation in the financial services sector and
reduce our customer base; the financial covenants in our secured credit
facility and their impact on our financial and business operations; our
indebtedness and the impact that it may have on our financial and
operating activities and our ability to incur additional debt; the
adequacy of our future cash flows to service our indebtedness; the
variable interest rates borne by our indebtedness and the effects of
changes in those rates; shifts in market demands, continued competitive
factors and pricing pressures and their impact on our ability to improve
gross margins and profitability, especially in our more mature
offerings; manufacturing disruptions affecting product quality or
delivery times; the effect of currency translation; our ability to
achieve targeted cost reductions; short product cycles, rapidly changing
technologies and maintaining a competitive leadership position with
respect to our solution offerings; tax rates; ability to execute our
business and reengineering plans; turnover of workforce and the ability
to attract and retain skilled employees, especially in light of
continued cost-control measures being taken by the company; availability
and successful exploitation of new acquisition and alliance
opportunities; our ability to sell higher-margin software and services
in addition to our hardware; the timely development, production or
acquisition and market acceptance of new and existing products and
services (such as self-service technologies), including our ability to
accelerate market acceptance of new products and services; changes in
Generally Accepted Accounting Principles (GAAP) and the resulting
impact, if any, on the company's accounting policies; continued efforts
to establish and maintain best-in-class internal information technology
and control systems; market volatility and the funded status of our
pension plans; the success of our pension strategy, including our
ability to successfully execute our plan to make a contribution to our
U.S. pension plan and to offer a lump sum payment option to certain
pension plan participants; compliance with requirements relating to data
privacy and protection; expected benefits related to acquisitions and
alliances, including the acquisition of Radiant Systems, Inc., not
materializing as expected; 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.
Source: NCR Corporation
News Media Contact
NCR Corporation
Lou Casale,
212-589-8415
lou.casale@ncr.com
or
NCR
Corporation
Jeff Dudash, 919-435-6976
Jeff.dudash@ncr.com
or
Investor
Contact
NCR Corporation
Gavin Bell, 212-589-8468
gavin.bell@ncr.com