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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-Q
________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-00395
 ________________________
https://cdn.kscope.io/e4a156df06543d34d8c9f3ad5bb16da9-ncr-20210630_g1.jpg
NCR CORPORATION
(Exact name of registrant as specified in its charter)
________________________
 
Maryland 31-0387920
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
864 Spring Street NW
Atlanta, GA 30308
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (937445-1936
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
NCR
New York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  ☐
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ☐
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer
þ
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
Emerging growth company
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  
As of July 23, 2021, there were approximately 131.4 million shares of the registrant's common stock issued and outstanding.


Table of Contents

TABLE OF CONTENTS    
 
PART I. Financial Information
 DescriptionPage
Item 1.

Item 2.
Item 3.
Item 4.
PART II. Other Information
 DescriptionPage
Item 1.
Item 1A.
Item 2.
Item 6.


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Part I. Financial Information
 
Item 1.    FINANCIAL STATEMENTS
NCR Corporation
Condensed Consolidated Statements of Operations (Unaudited) 
In millions, except per share amountsThree months ended June 30Six months ended June 30
2021202020212020
Product revenue$551 $481 $1,033 $955 
Service revenue1,126 1,003 2,188 2,032 
Total revenue1,677 1,484 3,221 2,987 
Cost of products453 411 861 802 
Cost of services768 701 1,490 1,416 
Selling, general and administrative expenses303 234 541 489 
Research and development expenses69 49 135 114 
Total operating expenses1,593 1,395 3,027 2,821 
Income (loss) from operations84 89 194 166 
Interest expense(61)(57)(106)(107)
Other expense, net(1)(2)(18)(4)
Income (loss) from continuing operations before income taxes22 30 70 55 
Income tax expense (benefit)31 (34)48 (33)
Income (loss) from continuing operations(9)64 22 88 
Loss from discontinued operations, net of tax    
Net income (loss)(9)64 22 88 
Net income (loss) attributable to noncontrolling interests  1 1 
Net income (loss) attributable to NCR$(9)$64 $21 $87 
Amounts attributable to NCR common stockholders:
Income (loss) from continuing operations$(9)$64 $21 $87 
Dividends on convertible preferred stock(4)(7)(8)(13)
Income (loss) from continuing operations attributable to NCR common stockholders(13)57 13 74 
Loss from discontinued operations, net of tax    
Net income (loss) attributable to NCR common stockholders$(13)$57 $13 $74 
Income (loss) per share attributable to NCR common stockholders:
Income (loss) per common share from continuing operations
Basic$(0.10)$0.45 $0.10 $0.58 
Diluted$(0.10)$0.44 $0.10 $0.57 
Net income (loss) per common share
Basic$(0.10)$0.45 $0.10 $0.58 
Diluted$(0.10)$0.44 $0.10 $0.57 
Weighted average common shares outstanding
Basic131.0 128.0 130.5 128.0 
Diluted131.0 128.9 136.1 129.7 
See Notes to Condensed Consolidated Financial Statements.
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NCR Corporation
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
 
In millionsThree months ended June 30Six months ended June 30
2021202020212020
Net income (loss)$(9)$64 $22 $88 
Other comprehensive income (loss):
Currency translation adjustments
Currency translation gains (losses)8 17 1 (44)
Derivatives
Unrealized gains (losses) on derivatives (3)  
   Losses (gains) on derivatives recognized during the period   (1)
        Less income tax 1   
Employee benefit plans
   Amortization of prior service benefit (1)(1)(2)
   Amortization of actuarial losses (gains) (1) (2)
        Less income tax 1  2 
Other comprehensive income (loss)8 14  (47)
Total comprehensive income (loss)(1)78 22 41 
Less comprehensive income attributable to noncontrolling interests:
   Net income (loss)  1 1 
   Currency translation losses   (1)
Amounts attributable to noncontrolling interests  1  
Comprehensive income (loss) attributable to NCR$(1)$78 $21 $41 
See Notes to Condensed Consolidated Financial Statements.
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NCR Corporation
Condensed Consolidated Balance Sheets (Unaudited)
In millions, except per share amountsJune 30, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$449 $338 
Accounts receivable, net of allowances of $40 and $51 as of June 30, 2021 and December 31, 2020, respectively
1,271 1,117 
Inventories695 601 
Restricted cash241 59 
Other current assets450 363 
Total current assets3,106 2,478 
Property, plant and equipment, net676 373 
Goodwill4,520 2,837 
Intangibles, net1,420 532 
Operating lease assets439 344 
Prepaid pension cost209 199 
Deferred income taxes930 965 
Other assets763 686 
Total assets$12,063 $8,414 
Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings$303 $8 
Accounts payable746 632 
Payroll and benefits liabilities347 268 
Contract liabilities572 507 
Settlement liabilities243 31 
Other current liabilities756 642 
Total current liabilities2,967 2,088 
Long-term debt5,668 3,270 
Pension and indemnity plan liabilities842 851 
Postretirement and postemployment benefits liabilities116 120 
Income tax accruals98 102 
Operating lease liabilities420 325 
Other liabilities521 334 
Total liabilities10,632 7,090 
Commitments and Contingencies (Note 9)
Series A convertible preferred stock: par value $0.01 per share, 3.0 shares authorized, 0.3 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively; redemption amount and liquidation preference of $276 as of June 30, 2021 and December 31, 2020, respectively
273 273 
Stockholders’ equity
NCR stockholders’ equity
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
  
Common stock: par value $0.01 per share, 500.0 shares authorized, 131.1 and 129.1 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
1 1 
Paid-in capital461 368 
Retained earnings963 950 
Accumulated other comprehensive loss(271)(271)
Total NCR stockholders’ equity1,154 1,048 
Noncontrolling interests in subsidiaries4 3 
Total stockholders’ equity1,158 1,051 
Total liabilities and stockholders’ equity$12,063 $8,414 
See Notes to Condensed Consolidated Financial Statements.
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NCR Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
 
In millionsSix months ended June 30
20212020
Operating activities
Net income$22 $88 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization212 176 
Stock-based compensation expense81 45 
Deferred income taxes26 (30)
Impairment of other assets 4 
Gain on sale of property, plant and equipment (2)
Changes in assets and liabilities, net of effects of business acquired:
Receivables(78)253 
Inventories(81)(14)
Current payables and accrued expenses134 (230)
Contract liabilities43 56 
Employee benefit plans(21)(3)
Other assets and liabilities(28)(60)
Net cash provided by operating activities310 283 
Investing activities
Expenditures for property, plant and equipment(30)(18)
Proceeds from sale of property, plant and equipment 7 
Additions to capitalized software(110)(122)
Business acquisitions, net of cash acquired (2,464)(25)
Purchases of short-term investments(13)(6)
Proceeds from sales of short-term investments14 11 
Other investing activities, net(6)(1)
Net cash used in investing activities(2,609)(154)
Financing activities
Short term borrowings, net  
Payments on term credit facilities(105)(4)
Payments on revolving credit facilities(685)(666)
Borrowings on term credit facilities1,505 3 
Borrowings on revolving credit facilities809 1,404 
Proceeds from issuance of senior unsecured notes1,200 400 
Debt issuance costs and bridge commitment fees(51)(8)
Cash dividend paid for Series A preferred shares dividends (8)(6)
Repurchases of Common Stock (41)
Proceeds from employee stock plans18 9 
Tax withholding payments on behalf of employees(25)(25)
Net change in client funds obligations(8)(3)
Principal payments for finance lease obligations(8)(3)
Other financing activities(1)(3)
Net cash provided by financing activities$2,641 $1,057 
Cash flows from discontinued operations
Net cash provided by (used in) discontinued operations(47)6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(4)(16)
Increase in cash, cash equivalents, and restricted cash291 1,176 
Cash, cash equivalents and restricted cash at beginning of period406 563 
Cash, cash equivalents and restricted cash at end of period$697 $1,739 
See Notes to Condensed Consolidated Financial Statements.
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NCR Corporation
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited)
NCR Stockholders
Common StockAccumulated Other Comprehensive (Loss) IncomeNon-Redeemable Noncontrolling Interests in Subsidiaries
In millionsSharesAmountPaid-in CapitalRetained EarningsTotal
December 31, 2020129 $1 $368 $950 $(271)$3 $1,051 
Comprehensive income:
     Net income— — — 30 — 1 31 
     Other comprehensive income (loss)— — — — (8) (8)
Total comprehensive income (loss)— — — 30 (8)1 23 
Employee stock purchase and stock compensation plans2 — 30 — — — 30 
Series A convertible preferred stock dividends— — — (4)— — (4)
March 31, 2021131 $1 $398 $976 $(279)$4 $1,100 
Comprehensive income:
Net income— — — (9)—  (9)
Other comprehensive income (loss)— — — — 8  8 
Total comprehensive income (loss)— — — (9)8  (1)
Employee stock purchase and stock compensation plans— — 44 — — — 44 
Fair value of converted Cardtronics awards attributable to pre-combination services— — 19 — — — 19 
Series A convertible preferred stock dividends— — — (4)— — (4)
June 30, 2021131 $1 $461 $963 $(271)$4 $1,158 
See Notes to Condensed Consolidated Financial Statements.


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NCR Corporation
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - (Continued)
NCR Stockholders
Common StockAccumulated Other Comprehensive (Loss) IncomeNon-Redeemable Noncontrolling Interests in Subsidiaries
In millionsSharesAmountPaid-in CapitalRetained EarningsTotal
December 31, 2019127 $1 $312 $1,060 $(269)$3 $1,107 
Comprehensive income:
     Net income— — — 23 — 1 24 
     Other comprehensive income— — — — (60)(1)(61)
Total comprehensive income— — — 23 (60) (37)
Employee stock purchase and stock compensation plans2 — 4 — — — 4 
Series A convertible preferred stock dividends— — — (6)— — (6)
Repurchase of Common Stock(2)— (41)— — — (41)
March 31, 2020127 $1 $275 $1,077 $(329)$3 $1,027 
Comprehensive income:
Net income— — — 64 — — 64 
Other comprehensive income— — — — 14 — 14 
Total comprehensive income— — — 64 14 — 78 
Employee stock purchase and stock compensation plans1 — 25 — — — 25 
Series A convertible preferred stock dividends— — — (7)— — (7)
June 30, 2020 128 $1 $300 $1,134 $(315)$3 $1,123 
See Notes to Condensed Consolidated Financial Statements.


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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)

Index to Financial Statements and Supplemental Data

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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements have been prepared by NCR Corporation (NCR, the Company, we or us) without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed consolidated results of operations, financial position, and cash flows for each period presented. The consolidated results for the interim periods are not necessarily indicative of results to be expected for the full year. The 2020 year-end Condensed Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (GAAP). These financial statements should be read in conjunction with NCR’s Form 10-K for the year ended December 31, 2020.

Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the period reported.

Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing novel coronavirus (COVID-19) pandemic. The severity, magnitude and duration of the COVID-19 pandemic, and the resulting economic consequences, are uncertain, rapidly changing and difficult to predict with certainty. As a result, our accounting estimates and assumptions may change over time as a consequence of the effects of COVID-19.

Such changes could result in future impairments of goodwill, intangible assets, long-lived assets, incremental credit losses on accounts receivable and decreases in the carrying amount of our tax assets.

Evaluation of Subsequent Events The Company evaluated subsequent events through the date that our Condensed Consolidated Financial Statements were issued. No matters were identified that required adjustment of the Condensed Consolidated Financial Statements or additional disclosure other than subsequent events disclosed within the notes to the Condensed Consolidated Financial Statements.

Reclassifications Certain prior-period amounts have been reclassified in the accompanying Condensed Consolidated Financial Statements and Notes thereto in order to conform to the current period presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

Cash, Cash Equivalents, and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash in the Condensed Consolidated Statements of Cash Flows is as follows:
In millionsJune 30
20212020
Cash and cash equivalents$449 $1,681 
Restricted cash included in other assets7 9 
Funds held for clients included in restricted cash36 28 
Cash included in settlement processing assets included in restricted cash205 21 
Total cash, cash equivalents and restricted cash$697 $1,739 

Contract Assets and Liabilities The following table presents the net contract asset and contract liability balances as of June 30, 2021 and December 31, 2020.
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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)
In millionsLocation in the Condensed Consolidated Balance SheetJune 30, 2021December 31, 2020
Current portion of contract liabilitiesContract liabilities$572 $507 
Non-current portion of contract liabilitiesOther liabilities$67 $80 

During the six months ended June 30, 2021, the Company recognized $323 million in revenue that was included in contract liabilities as of December 31, 2020.

Remaining Performance Obligations Remaining performance obligations represent the transaction price of orders for which products have not been delivered or services have not been performed. As of June 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $3.5 billion. The Company expects to recognize revenue on approximately three-quarters of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. The majority of our professional services are expected to be recognized over the next 12 months but this is contingent upon a number of factors, including customers’ needs and schedules.

The Company has made two elections that affect the value of remaining performance obligations described above. We do not disclose remaining performance obligations for Software as a Service (SaaS) contracts where variable consideration is directly allocated based on usage or when the original expected length is one year or less.

Recent Accounting Pronouncements

Issued

In August 2020, the Financial Accounting Standards Board ("FASB") issued an accounting standards update with new guidance for convertible preferred stock, which eliminates considerations related to the beneficial conversion feature model. The standard also requires an average stock price when calculating the denominator for diluted earnings per share to be used for stock units where the settlement of the number of shares is based on the stock price. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted no earlier than fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The adoption of this accounting standards update is not expected to have a material effect on the Company's net income, cash flows, earnings per share or financial condition.

In May 2021, the FASB issued an accounting standards update with new guidance for freestanding equity-classified written call options. The new guidance requires modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The adoption of this accounting standards update is not expected to have a material effect on the Company's net income, cash flows, earnings per share or financial condition.

In July 2021, the FASB issued an accounting standards update with new guidance for lessors with lease contracts that have variable lease payments. Under the new guidance, a lease which includes variable lease payments which do not depend on a reference index or rate and would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing are now to be classified as operating. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The adoption of this accounting standards update is not expected to have a material effect on the Company's net income, cash flows, earnings per share or financial condition.



2. BUSINESS COMBINATIONS

Pending acquisition of LibertyX

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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)
On July 31, 2021, NCR entered into a definitive agreement to acquire Moon Inc. dba LibertyX, a leading cryptocurrency software provider. The transaction is expected to close later in 2021, subject to customary closing conditions, including obtaining certain regulatory licensing consents and approvals.


Acquisition of Cardtronics plc

On January 25, 2021, NCR entered into a definitive agreement to acquire all outstanding shares of Cardtronics plc ("Cardtronics") for $39.00 per share (the "Cardtronics Transaction"). The legal closing of the Cardtronics Transaction occurred on June 21, 2021. Prior to the closing, the United Kingdom Competition and Markets Authority ("CMA") initiated a review of the transaction and issued an Initial Enforcement Order, effective on June 21, 2021, on NCR Corporation, NCR UK Group Limited and Cardtronics plc in relation to the acquisition (the “Initial Order”). The Initial Order requires the companies and each of their subsidiaries to operate separately and independently while the CMA reviews the transaction. However, the Initial Order allows for limited access to certain information strictly necessary for compliance with external financial reporting obligations. The CMA has also granted limited derogations to the Initial Order to permit certain critical functions.

Cardtronics is the world's largest non-bank ATM operator and service provider enabling cash transactions by converting digital currency into physical cash at over 285,000 ATMs across 10 countries in North America, Europe, Asia-Pacific, and Africa. The Cardtronics Transaction is expected to accelerate our NCR-as-a-service strategy and enhance our ability to provide technology solutions and capabilities that run our customers’ businesses.

Purchase Price Consideration The purchase consideration transferred consisted of the following:

In millionsPurchase Consideration
Cash paid to common stockholders and holders of certain restricted stock and stock option awards$1,775 
Debt repaid by NCR on behalf of Cardtronics809 
Transaction costs paid by NCR on behalf of Cardtronics57 
Fair value of converted Cardtronics awards attributable to pre-combination services19 
Settlement of pre-existing relationships14 
Total purchase consideration$2,674 

Other than certain outstanding restricted stock and stock option awards issued to directors which were paid out in cash at closing, the Company converted outstanding unvested Cardtronics awards into NCR awards pursuant to an exchange ratio as defined in the acquisition agreement. Each restricted stock award that was outstanding, whether performance-based or time-based, was converted into time-based awards, and will continue to be governed by the same vesting terms as the original Cardtronics awards. Cardtronics stock option awards were converted into NCR stock option awards with an exercise price per share for option awards equal to the exercise price per share of such stock option award immediately prior to the completion of the acquisition divided by the exchange ratio, and will continue to be governed generally by the same terms and conditions as were applicable prior to the acquisition. The amounts attributable to services already rendered were included as an adjustment to the purchase price and the amounts attributable to future services will be expensed over the remaining vesting period, net of estimated forfeitures. The fair value of options that the Company assumed in connection with the acquisition of Cardtronics were estimated using the Black-Scholes model.

Recording of Assets Acquired and Liabilities Assumed The fair value of consideration transferred to acquire Cardtronics was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition as set forth below.

The preliminary allocation of the purchase price for Cardtronics is as follows:

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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)
In millionsFair Value
Assets acquired
      Cash and restricted cash acquired$296 
      Trade accounts receivable84 
      Prepaid expenses, other current assets and other assets154 
      Property, plant and equipment359 
      Estimated acquisition-related intangible assets877 
Total assets acquired$1,770 
Liabilities assumed690 
Net assets acquired, excluding goodwill1,080 
Total purchase consideration2,674 
Estimated goodwill$1,594 

We recorded a preliminary allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of June 21, 2021. The provisional amounts for intangible assets are based on third-party valuations performed. Additionally, as noted above, access to information was limited based on the Initial Order issued by the CMA so further adjustments to the purchase price allocation will be required, within the measurement period, once the regulatory restrictions are lifted and the Company is able to complete more detailed procedures, additional refinement to finalize valuations, among other items.

Goodwill represents the future economic benefits arising from other assets acquired that could not be separately recognized. The goodwill arising from the acquisition consists of revenue and cost synergies expected from combining the operations of NCR and Cardtronics. It is expected that approximately $153 million of the goodwill recognized in connection with the acquisition will be deductible for tax purposes. The goodwill arising from the acquisition has been allocated to our Banking segment. Refer to Note 3, Goodwill and Long-Lived Assets, for the carrying amounts of goodwill by segment as of June 30, 2021.

The following table sets forth the components of the intangible assets acquired as of the acquisition date:

Fair Value
Weighted Average Amortization Period (1)
(In millions) (In years)
Direct customer relationships$340 15
Technology - Software485 8
Non-compete 1 1
Tradenames51 5
Total acquired intangible assets$877 

(1) Determination of the weighted average period of the individual categories of intangible assets was based on the nature of applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives is recognized over the period of time the assets are expected to contribute to future cash flows.

In connection with the closing of the acquisition, the Company incurred transaction costs of $44 million and $46 million in the three and six months ended June 30, 2021, respectively, which has been included within selling, general and administrative expenses in the Condensed Consolidated Statement of Operation. Refer to Note 5, Debt Obligations for additional discussion on fees incurred related to the financing for the Cardtronics Transaction.

Unaudited Pro forma Information The following unaudited pro forma information presents the consolidated results of NCR and Cardtronics for the three and six months ended June 30, 2021 and 2020. The unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, or the results of
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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)
operations that actually would have been realized had the entities been a single company during the periods presented or the results that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur related to the acquisition as part of combining the operations of the companies.

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2020, are as follows:

In millionsThree months ended June 30Six months ended June 30
2021202020212020
Revenue$1,919 $1,698 $3,703 $3,489 
Net Income attributable to NCR$42 $36 $72 $(29)

The unaudited pro forma results for the three months ended June 30, 2021 include:
$24 million in eliminated intercompany revenue and cost between NCR and Cardtronics;
$15 million, net of tax, in additional amortization expense for acquired intangible assets;
$71 million, net of tax, in eliminated transaction costs as if those costs were incurred in the prior year period; and
$18 million, net of tax, in additional interest expense from the incremental borrowings under the senior secured credit facility as well as the 5.125% senior notes.

The unaudited pro forma results for the six months ended June 30, 2021 include:
$53 million in eliminated intercompany revenue and cost between NCR and Cardtronics;
$25 million, net of tax, in additional amortization expense for acquired intangible assets;
$87 million, net of tax, in eliminated transaction costs as if those costs were incurred in the prior year period; and
$35 million, net of tax, in additional interest expense from the incremental borrowings under the senior secured credit facility as well as the 5.125% senior notes.

The unaudited pro forma results for the three months ended June 30, 2020 include:
$19 million in eliminated intercompany revenue and cost between NCR and Cardtronics;
$13 million, net of tax, in additional amortization expense for acquired intangible assets; and
$14 million, net of tax, in additional interest expense from the incremental borrowings under the senior secured credit facility as well as the 5.125% senior notes.

The unaudited pro forma results for the six months ended June 30, 2020 include:
$38 million in eliminated intercompany revenue and cost between NCR and Cardtronics;
$27 million, net of tax, in additional amortization expense for acquired intangible assets;
$67 million, net of tax, of transaction costs as if those costs were incurred in the period; and
$33 million, net of tax, in additional interest expense from the incremental borrowings under the senior secured credit facility as well as the 5.125% senior notes.


Acquisition of Freshop, Terafina, & Dumac

In the first quarter of 2021, NCR completed acquisitions for total cash considerations of $126 million, as outlined below:

On January 6, 2021, NCR completed its acquisition of Freshop E-Commerce Solution, Inc. ("Freshop"), a leading provider of grocery e-commerce. The Freshop acquisition further expands NCR’s software and services-led offerings to our retail platform and creates more value for our customers and new capabilities for NCR to run the store. As a result of the acquisition, Freshop became a wholly owned subsidiary of NCR.

On February 5, 2021, NCR completed its acquisition of Terafina, Inc. ("Terafina"), a leading solution provider for customer account opening and onboarding across digital, branch and call center channels. The Terafina acquisition further expands NCR sales and marketing capabilities in its industry-leading Digital First Banking platform to drive
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NCR Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)
revenue growth across consumer and business market segments. As a result of the acquisition, Terafina became a wholly owned subsidiary of NCR.

On March 22, 2021 NCR completed its acquisition of certain assets and liabilities of Dumac Business Systems Inc. ("Dumac"), a leading POS solution provider for the quick service, table service, and convenient store markets. The Dumac asset acquisition further expands NCR's software and services-led offerings, creating more value for our customers and driving revenue growth across the Hospitality segment.

Recording of Assets Acquired and Liabilities Assumed The fair value of consideration transferred was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the respective acquisitions as set forth below. The allocation of the purchase prices are provisional as of June 30, 2021 and may be subject to future adjustments as the Company obtains additional information to finalize the accounting for the business combinations. The allocation of the purchase prices is as follows:

In millionsFair Value
Cash acquired$2 
Tangible assets acquired7 
Acquired intangible assets other than goodwill52 
Acquired goodwill86 
Deferred tax liabilities(8)
Liabilities assumed(13)
Total purchase consideration$126 

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually separately recognized. The goodwill arising from the acquisitions consists of revenue and cost synergies expected from combining the operations of NCR and the respective acquisitions. It is expected that $9 million of the goodwill recognized in connection with the acquisitions will be deductible for tax purposes. The goodwill arising from the Freshop acquisition has been allocated to our Retail segment. The goodwill arising from the Terafina acquisition has been allocated to our Banking segment. The goodwill arising from the Dumac acquisition has been allocated to our Hospitality segment. Refer to Note 3, Goodwill and Long-Lived Assets, for the carrying amounts of goodwill by segment.

The following table sets forth the components of the intangible assets acquired as of the acquisition dates:
Fair Value
Weighted Average Amortization Period (1)
(In millions)