UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 7.01. | Regulation FD Disclosure. |
In connection with a previously announced private financing transaction, NCR Corporation (“NCR”) anticipates disclosing to prospective investors certain information that has not been previously publicly reported. This information is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
This report shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The information furnished under Item 7.01 in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933 or the Exchange Act, except as set forth by specific reference in such filing. This report shall not be deemed an admission as to the materiality of any information in this report that is being disclosed pursuant to Regulation FD.
Item 8.01. | Other Events. |
On March 22, 2021, NCR announced that it plans to offer, subject to market and customary conditions, senior notes due 2029 and senior notes due 2031. A copy of the press release announcing the launch of the offering is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
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 | ||
99.2 | Press Release issued by NCR Corporation, dated March 22, 2021. | |
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
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 | ||||||
Date: March 22, 2021 | By: | /s/ Timothy C. Oliver | ||||
Timothy C. Oliver | ||||||
Executive Vice President and Chief Financial Officer |
Exhibit 99.1
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On January 25, 2021, NCR Corporation, a Maryland corporation (NCR or the Company), Cardtronics plc, a public limited company incorporated under the laws of England and Wales (Cardtronics) and solely for purposes of Section 8.2, Section 8.4 and Article IX of the Cardtronics Acquisition Agreement (as defined below), Cardtronics USA, Inc. a corporation incorporated in Delaware and a wholly owned subsidiary of Cardtronics , entered into an Acquisition Agreement (the Cardtronics Acquisition Agreement), pursuant to which the Company has agreed to acquire Cardtronics by means of a court-sanctioned scheme of arrangement under Part 26 of the U.K. Companies Act of 2006 for $39.00 per share, subject to the terms and conditions of the Cardtronics Acquisition Agreement (such transaction, the Cardtronics Acquisition). The board of directors of the Company has unanimously approved the Cardtronics Acquisition Agreement and the transactions completed thereby, including the Cardtronics Acquisition.
The following unaudited pro forma combined financial information (the Pro Forma Financial Statements) give effect to the Cardtronics Acquisition, which will be accounted for using the acquisition method of accounting with NCR identified as the accounting acquirer. Under the acquisition method of accounting, NCR will record assets acquired and liabilities assumed from Cardtronics at their respective acquisition date fair values on the closing date of the Cardtronics Acquisition.
The Pro Forma Financial Statements have been prepared from the respective historical consolidated financial statements of NCR and Cardtronics, adjusted to give effect to the Cardtronics Acquisition. The unaudited pro forma combined balance sheet (the Pro Forma Balance Sheet) combines the historical consolidated balance sheets of NCR and Cardtronics as of December 31, 2020, giving effect to the Cardtronics Acquisition as if it had been completed on December 31, 2020. The unaudited pro forma combined statements of operations (the Pro Forma Statement of Operations) for the year ended December 31, 2020, combines the historical consolidated statements of operations of NCR and Cardtronics, giving effect to the Cardtronics Acquisition as if it had been completed on January 1, 2020. The Pro Forma Financial Statements contain certain reclassification adjustments to conform the historical Cardtronics financial statement presentation to NCRs financial statement presentation.
The Pro Forma Financial Statements are presented to reflect the Cardtronics Acquisition and the expected financing arrangements of the Company in connection therewith and do not represent what NCRs financial position or results of operations would have been had the Cardtronics Acquisition occurred on the dates noted above, nor do they project the financial position or results of operations of the combined company following the Cardtronics Acquisition. The Pro Forma Financial Statements are intended to provide information about the continuing impact of the Cardtronics Acquisition as if it had been consummated earlier. The pro forma adjustments are based on available information as of the date hereof and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on NCRs results of operations with the exception of certain non-recurring charges to be incurred in connection with the Cardtronics Acquisition, as further described below. In the opinion of management, all material adjustments necessary to present fairly the Pro Forma Financial Statements have been made.
NCR and Cardtronics anticipate that certain non-recurring charges will be incurred in connection with the Cardtronics Acquisition, the substantial majority of which will consist of fees paid to financial, legal and accounting advisors, and certain bank-related fees. Any such charge could affect the future results of the post-acquisition company in the period in which such charges are incurred; however, these costs are not expected to be incurred in any period beyond twelve months from the closing date of the Cardtronics Acquisition. Accordingly, the Pro Forma Statement of Operations for the year ended December 31, 2020 reflects the effects of these non-recurring charges, which are not included in the historical balance sheets of NCR or Cardtronics as of December 30, 2020.
1
While the Pro Forma Financial Statements do not include the realization of any cost savings from operating efficiencies, synergies or other restructuring activities which might result from the Cardtronics Cardtronics Acquisition, managements estimates of certain cost savings to be realized following closing of the Cardtronics Acquisition are illustrated in Note 7 to the Pro Forma Financial Statements. Further, there may be additional charges related to other integration activities resulting from the Cardtronics Acquisition, the timing, nature and amount of which management cannot identify as of the date hereof, and thus, such charges are not reflected in the Pro Forma Financial Statements.
As of the date hereof, NCR has used currently available information to determine preliminary fair value estimates for the Cardtronics Acquisition consideration and its allocation to the Cardtronics tangible assets and identifiable intangible assets acquired and liabilities assumed. Until the Cardtronics Acquisition is completed, NCR and Cardtronics are limited in their ability to share certain information. Therefore, NCR estimated the fair value of Cardtronics assets and liabilities based on reviews of Cardtronics annual report on Form 10-K for the year ended December 31, 2020, certain discussions with Cardtronics management, other due diligence procedures and based on past similar acquisitions which NCR believes were most relevant. The assumptions and estimates used to determine the preliminary purchase price allocation and fair value adjustments are described in the notes accompanying the Pro Forma Financial Statements.
The final determination of the fair value of Cardtronics assets and liabilities will be based on the actual net tangible and intangible assets of Cardtronics that exist as of the closing date of the Cardtronics Acquisition and, therefore, cannot be made prior to the completion of the Cardtronics Acquisition.
As a result of the foregoing, the transaction accounting adjustments are preliminary and subject to change as additional information becomes available and additional analysis is performed. The preliminary transaction accounting adjustments have been made solely for the purpose of providing the Pro Forma Financial Statements presented below. Any increases or decreases in the fair value of assets acquired and liabilities assumed upon completion of the final valuation will result in adjustments to the Pro Forma Balance Sheet and if applicable, the Pro Forma Statement of Operations. The final purchase price allocation may be materially different than that reflected in the preliminary purchase price allocation presented herein.
The Pro Forma Financial Statements have been developed from and should be read in conjunction with the separate historical consolidated financial statements and related notes thereto in each of NCRs and Cardtronics respective annual report on Form 10-K for the year ended December 31, 2020.
2
NCR CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of December 31, 2020
Historical | Transaction Accounting Adjustments |
|||||||||||||||||||||
(in millions, except per share amounts) | NCR | Cardtronics | Reclassification Adjustments (Note 5) |
Pro Forma Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||
Assets |
||||||||||||||||||||||
Current assets |
||||||||||||||||||||||
Cash and cash equivalents |
$ | 338 | $ | 174 | $ | | $ | | $ | 512 | ||||||||||||
Accounts receivable, net |
1,117 | 90 | | (6 | ) | 6(a) | 1,201 | |||||||||||||||
Inventories |
601 | 7 | | | 608 | |||||||||||||||||
Restricted cash |
| 137 | 59 | | 196 | |||||||||||||||||
Other current assets |
422 | 54 | (59 | ) | (2 | ) | 6(b) | 415 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
2,478 | 462 | | (8 | ) | 2,932 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property, plant and equipment, net |
373 | 430 | | (34 | ) | 6(c) | 769 | |||||||||||||||
Goodwill |
2,837 | 759 | | 809 | 6(d) | 4,405 | ||||||||||||||||
Intangibles, net |
532 | 85 | | 831 | 6(e) | 1,448 | ||||||||||||||||
Operating lease assets |
344 | 60 | | | 404 | |||||||||||||||||
Prepaid pension cost |
199 | | | | 199 | |||||||||||||||||
Deferred income taxes |
965 | 17 | | (173 | ) | 6(g) | 809 | |||||||||||||||
Other assets |
686 | 18 | | (4 | ) | 6(b) | 700 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
$ | 8,414 | $ | 1,831 | $ | | $ | 1,421 | $ | 11,666 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities and stockholders equity |
||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||
Short-term borrowings |
$ | 8 | $ | 5 | $ | | $ | 108 | 6(h) | $ | 121 | |||||||||||
Accounts payable |
632 | 40 | | (3 | ) | 6(a) | 669 | |||||||||||||||
Payroll and benefits liabilities |
268 | | 19 | | 287 | |||||||||||||||||
Deferred service revenue and customer deposits |
507 | | | | 507 | |||||||||||||||||
Current portion of other long term liabilities |
| 65 | (65 | ) | | | ||||||||||||||||
Accrued liabilities |
| 366 | (366 | ) | | | ||||||||||||||||
Other current liabilities |
673 | | 412 | 62 | 6(a), 6(f), 6(h) | 1,147 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
2,088 | 476 | | 167 | 2,731 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Long-term debt |
3,270 | 773 | 1,743 | 5,786 | ||||||||||||||||||
Pension and indemnity plan liabilities |
851 | | | | 851 | |||||||||||||||||
Postretirement and postemployment benefits liabilities |
120 | | | | 120 | |||||||||||||||||
Asset retirement obligations |
| 57 | (57 | ) | | |
3
Historical | Transaction Accounting Adjustments |
|||||||||||||||||||||
(in millions, except per share amounts) | NCR | Cardtronics | Reclassification Adjustments (Note 5) |
Pro Forma Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||
Income tax accruals |
102 | | | | 102 | |||||||||||||||||
Deferred tax liabilities, net |
| 51 | (51 | ) | | | ||||||||||||||||
Operating lease liabilities |
325 | 57 | | | 382 | |||||||||||||||||
Other liabilities |
334 | 38 | 108 | (50 | ) | 6(g) | 430 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
7,090 | 1,452 | | 1,860 | 10,402 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commitments and Contingencies |
||||||||||||||||||||||
Series A convertible preferred stock |
273 | | | | 273 | |||||||||||||||||
Stockholders equity |
||||||||||||||||||||||
Stockholders equity |
||||||||||||||||||||||
Preferred stock |
| | | | | |||||||||||||||||
Common stock |
1 | | | | 1 | |||||||||||||||||
Paid-in capital |
368 | 343 | | (318 | ) | 6(j) | 393 | |||||||||||||||
Retained earnings |
950 | 130 | | (215 | ) | 6(i) | 865 | |||||||||||||||
Accumulated other comprehensive loss |
(271 | ) | (94 | ) | | 94 | 6(k) | (271 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total stockholders equity |
1,048 | 379 | | (439 | ) | 988 | ||||||||||||||||
Noncontrolling interests in subsidiaries |
3 | | | | 3 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total stockholders equity |
1,051 | 379 | | (439 | ) | 991 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities and stockholders equity |
$ | 8,414 | $ | 1,831 | $ | | $ | 1,421 | $ | 11,666 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
4
NCR CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the year ended December 31, 2020
Historical | Transaction Accounting Adjustments |
|||||||||||||||||||||
(in millions, except per share amounts) | NCR | Cardtronics | Reclassification Adjustments (Note 5) |
Pro Forma Adjustments (Note 6) |
Pro Forma Combined |
|||||||||||||||||
Product revenue |
$ | 2,005 | $ | | $ | 53 | $ | (54 | ) | 6(l) | $ | 2,004 | ||||||||||
Service revenue |
4,202 | | 1,041 | (37 | ) | 6(l) | 5,206 | |||||||||||||||
ATM operating revenue |
| 1,041 | (1,041 | ) | | | ||||||||||||||||
ATM product sales and other revenues |
| 53 | (53 | ) | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
6,207 | 1,094 | | (91 | ) | 7,210 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of products |
1,733 | | 40 | (45 | ) | 6(l) | 1,728 | |||||||||||||||
Cost of services |
2,950 | | 754 | 18 | 6(l), 6(m), 6(o) | 3,722 | ||||||||||||||||
Cost of ATM operating revenue |
| 653 | (653 | ) | | | ||||||||||||||||
Cost of ATM product sales and other revenues |
| 40 | (40 | ) | | | ||||||||||||||||
Selling, general and administrative expenses |
1,051 | 160 | 54 | 146 | 6(m), 6(n), 6(o), 6(p), 6(r) |
1,411 | ||||||||||||||||
Research and development expenses |
234 | | | | 234 | |||||||||||||||||
Asset impairment charges |
18 | 4 | (4 | ) | | 18 | ||||||||||||||||
Restructuring charges |
| 9 | (9 | ) | | | ||||||||||||||||
Acquisition related expenses |
| 9 | (9 | ) | | | ||||||||||||||||
Depreciation and accretion expense |
| 133 | (133 | ) | | | ||||||||||||||||
Amortization of intangible assets |
| 32 | | (32 | ) | 6(m) | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
5,986 | 1,040 | | 87 | 7,113 | |||||||||||||||||
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|
|
|
|
|
|
|||||||||||||
Income from operations |
221 | 54 | | (178 | ) | 97 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss on extinguishment of debt |
(20 | ) | (3 | ) | | | (23 | ) | ||||||||||||||
Interest expense |
(218 | ) | (37 | ) | (12 | ) | (56 | ) | 6(q) | (323 | ) | |||||||||||
Amortization of deferred financing costs and note discount |
| (12 | ) | 12 | | | ||||||||||||||||
Other income (expense), net |
(42 | ) | 18 | | (17 | ) | 6(r) | (41 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from continuing operations before income taxes |
(59 | ) | 20 | | (251 | ) | (290 | ) | ||||||||||||||
Income tax expense (benefit) |
(53 | ) | 1 | (44 | ) | 6(s) | (96 | ) | ||||||||||||||
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|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from continuing operations |
(6 | ) | 19 | | (207 | ) | (194 | ) | ||||||||||||||
Loss from discontinued operations, net of tax |
(72 | ) | | | | (72 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
(78 | ) | 19 | | (207 | ) | (266 | ) | ||||||||||||||
Net income attributable to noncontrolling interests |
1 | | | | 1 | |||||||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to NCR |
$ | (79 | ) | $ | 19 | $ | | $ | (207 | ) | $ | (267 | ) | |||||||||
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|
|
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|
|
|
|
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|
|||||||||||||
Amounts attributable to NCR common stockholders: |
||||||||||||||||||||||
Income (loss) from continuing operations |
$ | (7 | ) | $ | (195 | ) | ||||||||||||||||
Series A preferred stock dividends |
(31 | ) | (31 | ) | ||||||||||||||||||
|
|
|
|
|||||||||||||||||||
Income (loss) from continuing operations attributable to NCR |
(38 | ) | (226 | ) |
5
Loss from discontinued operations, net of tax |
(72 | ) | (72 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Net income (loss) attributable to NCR |
$ | (110 | ) | |
|
|
|
$ | (298 | ) | ||||||||||
|
|
|
|
|||||||||||||||||
Income (loss) per common share from continuing operations |
||||||||||||||||||||
Basic |
$ | (0.30 | ) | $ | 0.43 | $ | (1.76 | ) | ||||||||||||
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|
|
|
|
|
|||||||||||||||
Diluted |
$ | (0.30 | ) | $ | 0.42 | $ | (1.76 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income (loss) per common share |
||||||||||||||||||||
Basic |
$ | (0.86 | ) | $ | 0.43 | $ | (2.32 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Diluted |
$ | (0.86 | ) | $ | 0.42 | $ | (2.32 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Weighted average common shares outstanding |
||||||||||||||||||||
Basic |
128.4 | 44.5 | 128.4 | |||||||||||||||||
Diluted |
128.4 | 45.4 | 128.4 |
6
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. DESCRIPTION OF THE TRANSACTION
On January 25, 2021, NCR Corporation, a Maryland corporation (NCR or the Company), Cardtronics plc, a public limited company incorporated under the laws of England and Wales (Cardtronics) and solely for purposes of Section 8.2, Section 8.4 and Article IX of the Cardtronics Acquisition Agreement (as defined below), Cardtronics USA, Inc. a corporation incorporated in Delaware and a wholly owned subsidiary of Cardtronics, entered into an Acquisition Agreement (the Cardtronics Acquisition Agreement), pursuant to which the Company has agreed to acquire Cardtronics by means of a court-sanctioned scheme of arrangement under Part 26 of the U.K. Companies Act of 2006 for $39.00 per share, subject to the terms and conditions of the Cardtronics Acquisition Agreement (such transaction, the Cardtronics Acquisition). The board of directors of the Company has unanimously approved the Cardtronics Acquisition Agreement and the transactions completed thereby, including the Cardtronics Acquisition.
NCR and Cardtronics currently expect the Cardtronics Acquisition to close in mid-2021, subject to the satisfaction of certain regulatory approvals and other customary closing conditions. There can be no assurance the Cardtronics Acquisition will close as expected or at all.
2. DESCRIPTION OF THE DEBT FINANCING
In connection with the Cardtronics Acquisition, on February 16, 2021, the Company entered into (a) a second amended and restated commitment letter (the Commitment Letter), with certain financial institutions party thereto (the Commitment Parties), (b) an incremental term loan A facility agreement (the Incremental Term Agreement) with certain financial institutions party thereto as lenders (the Term Loan A Lenders), JPMorgan Chase Bank, N.A., as administrative agent (the Administrative Agent), and NCR International, Inc, (the Guarantor Subsidiary) and (c) an incremental revolving facility agreement (the Incremental Revolving Agreement) with certain financial institutions party thereto as lenders (the Revolving Credit Lenders), the Administrative Agent, the Guarantor Subsidiary and certain of the foreign subsidiaries (the Foreign Borrowers).
Pursuant to the Commitment Letter, the Commitment Parties (or lending affiliates thereof) have committed to provide a senior secured incremental term loan B facility under the Companys existing senior secured credit facilities, in an aggregate principal amount of $195 million (as such amount may be adjusted pursuant to the terms of the Commitment Letter) (the Term Loan B Facility). Pursuant to the Incremental Term Agreement, the Term A Lenders have committed to provide senior secured incremental term loan A facilities under the Companys existing senior secured credit facilities, in an aggregate principal amount of up to $1,505 million (the Term Loan A Facilities). The Term Loan B Facility and the Term Loan A Facilities will be available to the Company subject to certain conditions precedent, including, among other things, the closing of the Cardtronics Acquisition. Pursuant to the Incremental Term Agreement, $200 million of the Term Loan A Facilities will convert into revolving credit commitments under the Senior Secured Credit Facilities, and the revolving credit commitments thereunder will increase by an equal amount (the Additional Revolving Commitments), on the date that is three business days after the closing of the initial funding of the Term Loan A Facilities (or such other date that is acceptable to the Administrative Agent), subject to the satisfaction of certain conditions precedent, including repayment in full of the portion of the Term Loan A Facilities to be converted into Additional Revolving Commitments and customary conditions for borrowings of loans under the New Revolving Credit Facility (as defined herein).
Pursuant to the Incremental Revolving Agreement, the Revolving Credit Lenders have committed to provide the Company and the Foreign Borrowers with a $1,100 million revolving credit facility (the New
7
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Revolving Credit Facility) under the Senior Secured Credit Facilities to replace the Companys existing revolving credit facility, which will be available to the Company upon the satisfaction of certain customary conditions precedent, including, among other things, the closing of the Cardtronics Acquisition, and subject to increase in connection with the conversion of a portion of the Term Loan A Facilities into Additional Revolving Commitments (as described above).
3. BASIS OF PRESENTATION
The NCR and Cardtronics historical financial information have been derived from each respective companys historical audited financial statements for the year ended December 31, 2020. Certain of Cardtronics historical amounts have been reclassified to conform to NCRs financial statement presentation, as discussed further in Note 5. The Pro Forma Financial Statements should be read in conjunction with NCRs and Cardtronics historical consolidated financial statements and the notes thereto included in their respective Annual Reports on Form 10-K for the year ended December 31, 2020, which have been incorporated by reference into this report. The Pro Forma Balance Sheet gives effect to the Cardtronics Acquisition as if it had been completed on December 31, 2020. The Pro Forma Statement of Operations give effect to the Cardtronics Acquisition as if it had been completed on January 1, 2020.
The transaction accounting adjustments are described in the accompanying notes to the Pro Forma Financial Statements. In the opinion of NCRs management, based on reviews of Cardtronics annual report on Form 10-K for the year ended December 31, 2020, certain discussions with Cardtronics management, other due diligence procedures and based on past similar acquisitions which NCR believes were most relevant, all material adjustments have been made that are necessary to present fairly, in accordance with Article 11 of Regulation S-X of the SEC, the Pro Forma Financial Statements.
The Pro Forma Financial Statements were prepared using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (ASC 805), with NCR as the accounting acquirer, using the fair value concepts defined in Accounting Standards Codification 820 Fair Value Measurement, and based on the historical consolidated financial statements of NCR and Cardtronics. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of purchase price consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The allocation of the purchase price consideration depends upon certain estimates and assumptions, all of which are preliminary. The allocation of the purchase price consideration has been made for the purpose of developing the Pro Forma Financial Statements. NCR estimated the fair value of Cardtronics assets and liabilities based on reviews of Cardtronics annual report on Form 10-K for the year ended December 31, 2020, certain discussions with Cardtronics management, other due diligence procedures and based on past similar acquisitions which NCR believes were most relevant. A final determination of fair values of assets acquired and liabilities assumed relating to the Cardtronics Acquisition could differ materially from the preliminary allocation of the purchase price consideration. This final valuation will be based on the actual net tangible and intangible assets of Cardtronics existing at the closing date of the Cardtronics Acquisition. The final valuation may materially change the allocation of purchase price consideration, which could materially affect the fair values assigned to the assets and liabilities and could result in a material change to the Pro Forma Financial Statements.
Upon completion of the Cardtronics Acquisition, NCR will perform a comprehensive review of Cardtronics accounting policies. As a result of the review, NCR may identify differences between the
8
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
accounting policies of the two companies, which when conformed, could have a material impact on the Pro Forma Financial Statements. Based on a preliminary analysis, NCR did not identify any differences that would have a material impact on the Pro Forma Financial Statements. As a result, the Pro Forma Financial Statements assume there are no differences in accounting policies.
The Pro Forma Financial Statements are for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the Cardtronics Acquisition had been completed on the dates indicated, nor is it indicative of future operating results or financial position. The Pro Forma Financial Statements do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Cardtronics Acquisition, the costs to integrate the operations of NCR and Cardtronics or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements.
4. PRELIMINARY ACQUISITION ACCOUNTING
Preliminary purchase price consideration. The following table presents the preliminary purchase price consideration:
In millions | ||||
Estimated cash paid for outstanding shares of Cardtronics (1) |
$ | 1,761 | ||
Estimated cash paid for certain outstanding equity awards of Cardtronics (2) |
6 | |||
Estimated replacement equity awards issued for certain outstanding equity awards of Cardtronics (3) |
25 | |||
Estimated cash paid to settle the outstanding debt of Cardtronics (4) |
809 | |||
Cash paid on behalf of Cardtronics for contract termination penalty |
36 | |||
Settlement of estimated pre-existing relationships between NCR & Cardtronics |
6 | |||
|
|
|||
Estimated purchase price consideration |
$ | 2,643 | ||
|
|
(1) | The cash component of the preliminary purchase price consideration is determined based on 100% of the outstanding Cardtronics shares being exchanged for the per share cash amount of $39.00. |
In millions, except per share amounts | Shares | Per Share | Total | |||||||||
Cardtronics shares outstanding as of February 25, 2021 |
45.16 | $ | 39.00 | $ | 1,761 |
(2) | Estimated cash consideration for the settlement of certain outstanding vested equity awards which will be paid out on the closing date of the Cardtronics Acquisition. |
(3) | Estimated consideration for replacement of certain outstanding equity awards of Cardtronics. Certain outstanding equity awards will be replaced by NCRs equity awards with similar terms. A portion of the fair value of NCRs equity awards issued represents consideration transferred, while a portion represents compensation expense based on the vesting terms of the equity awards. |
9
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(4) | The estimated cash paid to settle the outstanding the debt of Cardtronics consists of the following components: |
In millions | ||||
Estimated cash paid to settle the term loan facility of Cardtronics |
$ | 498 | ||
Estimated cash paid to settle the senior unsecured notes of Cardtronics |
300 | |||
Estimated call premium on extinguishment of senior unsecured notes of Cardtronics |
8 | |||
Estimated cash paid to settle the accrued and unpaid interest of the term loan facility and senior unsecured notes |
3 | |||
|
|
|||
Total estimated cash paid to settle the outstanding debt of Cardtronics |
$ | 809 | ||
|
|
Preliminary purchase price allocation. The following table presents the preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Cardtronics Acquisition as of December 31, 2020, using currently available information:
In millions | ||||
Assets acquired |
||||
Cash and cash equivalents |
$ | 174 | ||
Accounts receivable |
90 | |||
Inventory |
7 | |||
Restricted cash |
137 | |||
Other current assets |
52 | |||
Property, plant and equipment |
396 | |||
Right of use assets - operating leases |
60 | |||
Deferred income tax assets |
17 | |||
Acquired goodwill |
1,568 | |||
Acquired intangible assets other than goodwill |
916 | |||
Other non-current assets |
14 | |||
|
|
|||
$ | 3,431 | |||
Liabilities assumed |
||||
Accounts payable |
$ | 37 | ||
Accrued liabilities |
360 | |||
Current portion of long-term liabilities |
65 | |||
Asset retirement obligations |
57 | |||
Long term lease liability - Operating leases |
57 | |||
Deferred income tax liabilities |
174 | |||
Other non-current liabilities |
38 | |||
|
|
|||
$ | 788 | |||
|
|
|||
Estimated purchase price consideration |
$ | 2,643 | ||
|
|
Goodwill represents the future economic benefits arising from other assets acquired that could not be individually separately recognized. The goodwill arising from the Cardtronics Acquisition consists of revenue and cost synergies expected from combining the operations of NCR and Cardtronics. It is expected that none of the goodwill recognized in connection with the Cardtronics Acquisition will be deductible for tax purposes.
10
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Preliminary identifiable intangible assets in the unaudited pro forma combined financial information consist of the following:
Preliminary Fair Value |
Estimated Average Lives Amortization Period |
|||||||
(In millions) | (In years) | |||||||
Merchant & Bank Branding/Customer Relationships |
$ | 586 | 8 years | |||||
Technology |
275 | 5 years | ||||||
Tradenames |
46 | 2 years | ||||||
Noncompete agreements |
9 | 2 years | ||||||
|
|
|||||||
Total estimated acquired intangible assets |
$ | 916 | ||||||
|
|
The identifiable intangible assets and related amortization are preliminary and are based on managements estimates after consideration of similar transactions. As discussed above, the amount that will ultimately be allocated to identifiable intangible assets, and the related amount of amortization, may differ materially from this preliminary allocation. In addition, the periods the amortization impacts will ultimately be based upon the periods in which the associated economic benefits or detriments are expected to be derived, or where appropriate, based on the assumption using a straight-line method. Therefore, the amount of amortization may differ significantly between periods based upon the final value assigned and amortization period and methodology used for each identifiable intangible asset and liability.
5. RECLASSIFICATION ADJUSTMENTS
The reclassification adjustments to the Pro Forma Balance Sheet as of December 31, 2020 are as follows:
| Reclassification of $59 million from Other current assets to Restricted cash |
| Reclassification of $65 million from Current portion of long term liabilities to Other current liabilities |
| Reclassification of $366 million from Accrued liabilities to Other current liabilities |
| Reclassification of $57 million from Asset retirement obligations to Other liabilities |
| Reclassification of $51 million from Deferred tax liabilities, net to Other liabilities |
| Reclassification of $19 million from Other current liabilities to Payroll and benefits liabilities |
The reclassification adjustments to the Pro Forma Statement of Operations for the year ended December 31, 2020 are as follows:
| Reclassification of $1,041 million from ATM operating revenue to Service revenue |
| Reclassification of $53 million from ATM product sales and other revenue to Product revenue |
| Reclassification of $653 million from Cost of ATM operating revenue to Cost of services |
| Reclassification of $40 million from Cost of ATM product sales and other revenue to Cost of products |
| Reclassification of $101 million from Depreciation and accretion expense to Cost of Services |
| Reclassification of $32 million from Depreciation and accretion expense to Selling, general and administrative expenses |
| Reclassification of $4 million from Asset impairment charges to Selling, general and administrative expenses |
11
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
| Reclassification of $9 million from Restructuring charges to Selling, general and administrative expenses |
| Reclassification of $9 million from Acquisition related charges to Selling, general and administrative expenses |
| Reclassification of $12 million from Amortization of deferred financing costs and note discount to Interest expense |
6. PRO FORMA ADJUSTMENTS
The pro forma adjustments to the Pro Forma Balance Sheet as of December 31, 2020 are as follows:
(a) | Reflects the elimination of outstanding accounts receivable and accounts payable balances between NCR and Cardtronics. |
In millions | Balance sheet location | Adjustment | ||||
Elimination of amounts due from Cardtronics |
Accounts receivable, net | $ | (6 | ) | ||
Elimination of amounts due to NCR |
Accounts payable | $ | (3 | ) | ||
Elimination of amounts due to NCR |
Other current liabilities | $ | (3 | ) |
(b) | Reflects the preliminary purchase accounting adjustment to remove the current and non-current deferred sales commissions balances from other current assets and other assets. |
(c) | Reflects the elimination of Cardtronics software capitalization balances from property, plant and equipment, net. |
(d) | Reflects the elimination of Cardtronics goodwill and the recognition of the preliminary estimate of goodwill for the estimated purchase price consideration in excess of the fair value of the net assets acquired. Refer to Note 4 for additional information on the goodwill expected to be recognized. |
In millions | Adjustment | |||
Elimination of Cardtronics goodwill |
$ | (759 | ) | |
Preliminary estimate of goodwill from the Cardtronics Acquisition |
1,568 | |||
|
|
|||
Net adjustment to goodwill |
$ | 809 | ||
|
|
(e) | Reflects the preliminary purchase accounting adjustment for estimated intangible assets based on the acquisition method of accounting. Refer to Note 4 for additional information on the acquired intangible assets expected to be recognized. |
In millions | Adjustment | |||
Elimination of Cardtronics intangible assets |
$ | (85 | ) | |
Preliminary estimate for intangible assets from the Cardtronics Acquisition |
916 | |||
|
|
|||
Net adjustment to intangible assets |
$ | 831 | ||
|
|
(f) | Reflects the accrual of the estimated transaction costs of $68 million expected to be incurred by NCR and Cardtronics related to the Cardtronics Acquisition. |
12
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(g) | Reflects the origination of deferred tax balances resulting from the preliminary purchase accounting adjustments based on applicable statutory tax rates for jurisdictions associated with the respective estimated purchase price allocation. The estimate of deferred tax liability is preliminary and is subject to change based upon NCRs final determination of the fair value of assets acquired and liabilities assumed, by jurisdiction including the final allocation across such legal entities and related jurisdictions. |
In millions | Adjustment | |||
Adjustment for presentation of deferred tax balances |
$ | (50 | ) | |
Deferred tax liability originating from preliminary purchase price accounting adjustments |
(123 | ) | ||
|
|
|||
Net adjustment to deferred tax assets |
$ | (173 | ) | |
|
|
|||
Adjustment for presentation of deferred tax balances |
$ | (50 | ) | |
|
|
|||
Net adjustment to other liabilities |
$ | (50 | ) | |
|
|
(h) | Reflects the new debt financing of the Cardtronics Acquisition as described in Note 2, the payment of the financing fees and elimination of Cardtronics historical debt and related debt financing fees: |
In millions | Adjustment | |||
Elimination of Cardtronics historical short term borrowings balance |
$ | (5 | ) | |
Current portion of bridge facility and senior unsecured term loan facilities |
113 | |||
|
|
|||
Net adjustment to short term borrowings |
$ | 108 | ||
|
|
|||
Bridge facility |
$ | 1,000 | ||
Senior secured term loan facilities |
1,505 | |||
Senior secured revolving credit facility |
159 | |||
Current portion of bridge facility and senior unsecured term loan facilities |
(113 | ) | ||
Estimate of new deferred financing fees |
(35 | ) | ||
Elimination of Cardtronics historical long-term debt balance |
(773 | ) | ||
|
|
|||
Net adjustment to long term debt |
$ | 1,743 | ||
|
|
Additionally, there was an adjustment to reflect to elimination of Cardtronics historical balance of accrued interest of $3 million from other current liabilities.
(i) | Reflects the impact to retained earnings for the accrual of the estimated transaction costs related to the Cardtronics Acquisition described in (f) above and bank-related fees as well as the elimination of Cardtronics historical retained earnings |
In millions | Adjustment | |||
Estimated transaction costs |
$ | (68 | ) | |
Estimated bank-related fees |
(17 | ) | ||
Elimination of Cardtronics retained earnings |
(130 | ) | ||
|
|
|||
Net adjustment to retained earnings |
$ | (215 | ) | |
|
|
13
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(j) | Reflects the elimination of Cardtronics historical paid in capital and record paid in capital for the pre-combination stock compensation expense related to the replacement awards. |
In millions | Adjustment | |||
Pre-combination stock compensation expense related to replacement awards |
$ | 25 | ||
Elimination of Cardtronics paid in capital |
(343 | ) | ||
|
|
|||
Net adjustment to paid in capital |
$ | (318 | ) | |
|
|
(k) | Reflects the elimination of Cardtronics historical accumulated other comprehensive loss balance. |
The adjustments to the Pro Forma Statement of Operations for the year ended December 31, 2020 are as follows:
(l) | Reflects the elimination of the impact of revenue and cost transactions between NCR and Cardtronics. |
(m) | Reflects the elimination of Cardtronics historical amortization of intangible assets and to record expense for the estimated intangible assets related to the Cardtronics Acquisition. |
In millions | Income statement location |
For the year ended December 31, 2020 |
||||
Elimination of Cardtronics historical amortization of intangible assets |
Amortization of intangible assets |
$ | (32 | ) | ||
Estimated amortization expense for intangible assets |
Cost of Services | $ | 55 | |||
Estimated amortization expense for intangible assets |
Selling, general and administrative |
$ | 101 |
(n) | Reflects the elimination of the amortization of the deferred sales commissions of $3 million for the year ended December 31, 2020. |
(o) | Reflects the elimination of Cardtronics historical stock compensation expense and the stock compensation expense for the post-combination expense from the replacement awards issued as of the closing date of the Cardtronics Acquisition for the year ended December 31, 2020. |
In millions | Income statement location |
For the year ended December 31, 2020 |
||||
Elimination of Cardtronics historical stock compensation expense |
Cost of services | $ | (1 | ) | ||
Elimination of Cardtronics historical stock compensation expense |
Selling, general and administrative expenses |
$ | (21 | ) | ||
Post-combination stock compensation expense for the replacement awards |
Cost of services | $ | 1 | |||
Post-combination stock compensation expense for the replacement awards |
Selling, general and administrative expenses |
$ | 17 |
14
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(p) | Reflects the elimination of Cardtronics historical amortization expense on software capitalization balances of $16 million for the year ended December 31, 2020. |
(q) | Reflects the elimination of Cardtronics historical interest expense and amortization of deferring financing costs and record interest expense and amortization of deferred financing costs related to the new debt financing of the Cardtronics Acquisition described in (h) above. |
In millions | Income statement location |
For the year ended December 31, 2020 |
||||||
Elimination of Cardtronics historical interest expense |
Interest Expense | $ | (30 | ) | ||||
Elimination of Cardtronics historical amortization of deferred financing costs |
Interest Expense | $ | (3 | ) | ||||
Record estimated interest expense from new debt financings |
Interest Expense | $ | 82 | |||||
Record estimated amortization of new deferred financing costs |
Interest Expense | $ | 7 |
The effective interest rates used to calculate the estimated interest expense from the new debt were LIBOR plus 2.5% for the term loan and revolver facilities and 4.0% for the bridge loan facility. A change in interest rates by 0.125% would increase or decrease the estimated interest expense by approximately $3 million.
(r) | Reflects the estimated transaction costs of the Cardtronics Acquisition and bank-related fees related to the new debt financing as described in Note 2 that are expected to be incurred. |
In millions | Income statement location |
For the year ended December 31, 2020 |
||||
Estimated transaction costs |
Selling, general and administrative expenses |
$ | 68 | |||
Estimated bank-related fee |
Other income (expense), net |
$ | 17 |
(s) | Reflects the income tax expense (benefit) effects of the transaction accounting adjustments based on the applicable statutory rates associated with the respective adjustments. |
7. MANAGEMENTS ADJUSTMENTS
Management expects that, following completion of the Cardtronics Acquisition, the post-acquisition company will realize certain cost savings as compared to the historical combined costs of NCR and Cardtronics operating independently. managements adjustments, which are based on estimated cost savings as a result of the integration of personnel and the manner in which the post-acquisition company will be integrated and managed prospectively are not reflected in the Pro Forma Statement of Operations. Management is targeting to achieve approximately $120 million in annualized synergies primarily related to operating cost and selling, general and administrative savings within 18 months from the consummation of the Cardtronics Acquisition. Additionally, the Company estimates that the cost to achieve the annual synergies could be approximately $30 million.
Material limitations of these adjustments include not fully realizing the anticipated benefits, taking longer to realize these cost savings, or other adverse effects that NCR does not currently foresee. Cost savings expectations are inherently estimates that are difficult to predict and are necessarily speculative in nature, and there can be no assurance that NCR will achieve expected or any actual cost savings. A variety of factors could cause NCR not to realize some or all of the expected cost savings, including,
15
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
among others, delays in the anticipated timing of activities related to NCRs cost savings programs, lack of sustainability in cost savings over time, unexpected costs associated with operating its business, NCRs ability to reduce headcount and NCRs ability to achieve the efficiencies contemplated by the cost savings initiative. Further, there may be additional charges incurred in achieving these cost savings for which management cannot determine the nature and amount as of the date hereof. Certain of the assumptions relate to business decisions that are subject to change, including, among others, NCRs anticipated business strategies, NCRs marketing strategies, NCRs product development and licensing strategies and NCRs ability to anticipate and react to business trends. Other assumptions relate to risks and uncertainties beyond NCRs control, including, among others, the economic environment in which NCR operates and other developments in NCRs industry as well as capital markets conditions from time to time. The actual results of implementing the various cost savings initiatives may differ materially from the estimates set forth herein if any of these assumptions prove incorrect. Moreover, NCRs continued efforts to implement these cost savings may divert management attention from the rest of its business and may preclude NCR from seeking attractive new product opportunities, any of which may materially and adversely affect its business. These adjustments reflect all managements adjustments that are, in the opinion of management, necessary to a fair statement of the Pro Forma Financial Statements presented.
Had the Cardtronics Acquisition been completed as of January 1, 2020, management estimates that operating costs and selling, general and administrative expenses of $90 million, on a pre-tax basis, would not have been incurred for the year ended December 31, 2020.
The tax effect has been calculated based on the applicable statutory rates to the aforementioned adjustments.
16
NCR CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
For the year ended December 31, 2020 | ||||||||||||
In millions, except per share amounts | Pro Forma Combined |
Managements Adjustment |
As Adjusted |
|||||||||
Income (loss) from continuing operations before income taxes |
$ | (290 | ) | $ | 90 | $ | (200 | ) | ||||
Income (loss) from continuing operations |
$ | (194 | ) | $ | 70 | $ | (124 | ) | ||||
Net income (loss) |
$ | (266 | ) | $ | 70 | $ | (196 | ) | ||||
Income (loss) from continuing operations attributable to NCR common stockholders |
$ | (226 | ) | $ | 70 | $ | (156 | ) | ||||
Net income (loss) attributable to NCR common stockholders |
$ | (298 | ) | $ | 70 | $ | (228 | ) | ||||
Income (loss) per common share from continuing operations |
||||||||||||
Basic |
$ | (1.76 | ) | $ | (1.21 | ) | ||||||
Diluted |
$ | (1.76 | ) | $ | (1.21 | ) | ||||||
Net income (loss) per common share |
||||||||||||
Basic |
$ | (2.32 | ) | $ | (1.78 | ) | ||||||
Diluted |
$ | (2.32 | ) | $ | (1.78 | ) | ||||||
Weighted average common shares outstanding |
||||||||||||
Basic |
128.4 | 128.4 | ||||||||||
Diluted |
128.4 | 128.4 |
17
Exhibit 99.2
NEWS RELEASE |
March 22, 2021
NCR CORPORATION ANNOUNCES OFFERING OF SENIOR NOTES
ATLANTA March 22, 2021 NCR Corporation (NYSE: NCR) (the Company) announced today its intention to offer, subject to market and customary conditions, senior notes due 2029 (the 2029 Notes) and senior notes due 2031 (the 2031 Notes and, together with the 2029 Notes, the Notes) in an aggregate principal amount of $1.0 billion, in connection with its previously announced acquisition (the Cardtronics Acquisition) of Cardtronics plc, a public limited company incorporated in England and Wales (Cardtronics). The Notes will be general unsecured senior obligations of the Company and will be initially guaranteed by the Companys wholly-owned subsidiary, NCR International, Inc., a Delaware corporation.
The Company intends to use the net proceeds from the offering, together with borrowings under its senior secured credit facilities and its trade receivables securitization facility and/or cash on hand, to finance the consideration payable in connection with the Cardtronics Acquisition, to repay certain indebtedness of Cardtronics and to pay related fees and expenses. The closing of this offering is not conditioned on the closing of the Cardtronics Acquisition which, if completed, will occur subsequent to the closing of this offering. The proceeds of the offering will be held in escrow until satisfaction of the escrow release conditions.
If such escrow release conditions are not satisfied on or prior to the earlier of November 1, 2021 and the date on which the Company notifies the escrow agent and the trustee in writing that the Company has determined that the escrow release conditions will not be satisfied, then the 2029 Notes will be subject to a special mandatory redemption. The 2031 Notes are not subject to special mandatory redemption; accordingly, if the Cardtronics Acquisition is not consummated, the net proceeds of such notes will be used for general corporate purposes.
The Notes and the related subsidiary guarantee will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related subsidiary guarantee have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About NCR Corporation
NCR Corporation (NYSE: NCR) is a leading software- and services-led enterprise provider in the financial, retail and hospitality industries. NCR is headquartered in Atlanta, Georgia, with 36,000 employees globally. NCR is a trademark of NCR Corporation in the United States and other countries.
News Media Contact
Cameron Smith
NCR Corporation
678.808.5313
cameron.smith@ncr.com
Investor Contact
Michael Nelson
NCR Corporation
678.808.6995
michael.nelson@ncr.com
Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements. Forward-looking statements use words such as expect, anticipate, outlook, intend, plan, believe, will, should, would, could, and words of similar meaning. Statements that describe or relate to the Companys plans, goals, intentions, strategies, financial outlook, the Companys expectations regarding the Cardtronics Acquisition, the aggregate principal amount of the Notes to be sold or the intended use of proceeds from the offering of the Notes, and statements that do not relate to historical or current fact, are examples of forward-looking statements. 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 the Companys 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. Additional information concerning these and other factors can be found in the Companys filings with the U.S. Securities and Exchange Commission, including the Companys most recent annual report on Form 10-K 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.