UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Explanatory Note
On September 30, 2024, NCR Voyix Corporation (“NCR Voyix” or the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) to report the completion of its sale of the Company’s Digital Banking business to Dragon Buyer, Inc., an affiliate of The Veritas Capital Fund VIII, L.P. (the “Digital Banking Sale”). In accordance with Accounting Standards Codification 205-20, “Discontinued Operations,” the results of the digital banking business will be reflected as discontinued operations beginning in the quarter ending September 30, 2024. The purpose of this amendment to the Original Form 8-K is to provide the pro forma financial information required by Item 9.01(b) of Form 8-K.
The pro forma financial information included in this amended Report on Form 8-K/A has been presented for informational purposes, is based on various adjustments and assumptions and is not necessarily indicative of what the Company’s condensed consolidated financial statements actually would have been had the Digital Banking Sale and other adjustments been completed as of the dates indicated or will be for any future periods.
Item 9.01. | Financial Statements and Exhibits. |
(b) Pro Forma Financial Information
Pursuant to Article 11 of Regulation S-X, the following unaudited pro forma financial information of the Company, giving effect to the Digital Banking Sale, is attached hereto as Exhibit 99.1 to this Form 8-K/A and incorporated herein by reference:
• | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024; |
• | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Six Months ended June 30, 2024; and |
• | Unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021. |
(d) Exhibits:
The following exhibits are attached with this current report on Form 8-K:
Exhibit |
Description | |
99.1 | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024 and Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2024 and for the three years ended December 31, 2023, 2022 and 2021. | |
104 | Cover Page Interactive Data File (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 Voyix Corporation | ||
By: | /s/ Brian Webb-Walsh | |
Brian Webb-Walsh | ||
Executive Vice President and Chief Financial Officer |
Date: October 4, 2024
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As previously reported, on August 5, 2024, NCR Voyix Corporation (NCR Voyix or the Company) entered into a purchase agreement (the Purchase Agreement) with Dragon Buyer, Inc. (Buyer), an affiliate of The Veritas Capital Fund VIII, L.P. (Veritas), pursuant to which Buyer agreed to purchase the Companys digital banking business (the Transaction or the Digital Banking Business). On September 30, 2024, and pursuant to the Purchase Agreement, the Buyer acquired NCR Voyixs Digital Banking Business. The gross purchase price was $2.45 billion in cash as well as contingent consideration of up to an additional $100 million in cash upon the achievement of a specified return on Veritas and its affiliates invested capital at the time of any future sale, subject to certain customary adjustments as set forth in the Purchase Agreement. The Company intends to use the majority of the proceeds from the Transaction for repayment of the short- and long-term debt held by NCR Voyix, termination and contemporaneous repurchase of trade receivables held within the trade receivables facility (the T/R Facility) and payment of transaction costs.
The Company will report the results of the Digital Banking Business as discontinued operations for the current and historical periods in the Companys consolidated financial statements beginning in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.
The Unaudited Pro Forma Condensed Consolidated Financial Statements presented below have been derived from the NCR Voyixs historical consolidated financial statements and give pro forma effect to the Transaction. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024 reflects NCR Voyixs financial position as if the Transaction had occurred on June 30, 2024. The adjustments in the Transaction Accounting Adjustments column in the Unaudited Pro Forma Condensed Consolidated Balance Sheet give effect to the Transaction as if it had occurred as of June 30, 2024. The Unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2024 and for each of the years ended December 31, 2023, December 31, 2022 and December 31, 2021 reflect the results of operations as if the Transaction had occurred on January 1, 2021 in that they reflect the reclassification of the Digital Banking Business as discontinued operations for all periods presented. The adjustments in the Transaction Accounting Adjustments column in the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2024 and for the year ended December 31, 2023 give effect to the Transaction as if it had occurred as of January 1, 2023.
The Unaudited Pro Forma Condensed Consolidated Financial Statements presented below have been derived from, and should be read in conjunction with, NCR Voyixs audited consolidated financial statements and the notes thereto as of December 31, 2023, and for the three years ended December 31, 2023, and Managements Discussion and Analysis included in NCR Voyixs Annual Report on Form 10-K for the year ended December 31, 2023, as well as NCR Voyixs unaudited condensed consolidated financial statements and the notes thereto as of and for the six months ended June 30, 2024, and Managements Discussion and Analysis included in NCR Voyixs Quarterly Report on Form 10-Q for the six months ended June 30, 2024. Upon entering into the Purchase Agreement with the Buyer, the historical financial results of the Digital Banking Business will be reflected in NCR Voyixs consolidated financial statements as discontinued operations under U.S. generally accepted accounting principles (GAAP) for all periods.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are presented based on information currently available, subject to the assumptions and adjustments described in the accompanying notes and is not intended to represent what NCR Voyixs condensed consolidated balance sheet and statements of operations actually would have been had the Transaction occurred on the dates indicated above. Further, the Unaudited Pro Forma Condensed Consolidated Financial Statements are provided for illustrative and informational purposes only and are not necessarily indicative of NCR Voyixs financial position and results of operations for any future period and does not reflect all actions that may be undertaken by NCR Voyix following the closing of the Transaction. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Statements do not reflect the realization of any expected cost savings, synergies or dis-synergies as a result of the Transaction. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. Management believes these assumptions and adjustments are reasonable, given the information available at the time of filing. The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with NCR Voyixs historical consolidated financial statements and accompanying notes. The Transaction constituted a significant disposition for purposes of Item 2.01 of Form 8-K and the Unaudited Pro Forma Condensed Consolidated Financial Statements presented below have been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information.
The pro forma adjustments are based on currently available information and assumptions management believes are, under the circumstances and given the information available at this time, reasonable, and best reflect the Transaction on NCR Voyixs financial condition and results of operations. The adjustments included within the Discontinued Operations column of the Unaudited Pro Forma Condensed Consolidated Financial Statements are NCR Voyixs current preliminary estimates on a discontinued operations basis and could change as NCR Voyix finalizes discontinued operations accounting to be reported in NCR Voyixs Annual Report on Form 10-K for the year ended December 31, 2024.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2024 | ||||||||||||||||
In millions, except per share amounts | Historical (as reported) |
Discontinued Operations (Note a) |
Transaction Accounting Adjustments |
Pro Forma | ||||||||||||
Assets |
||||||||||||||||
Current assets |
||||||||||||||||
Cash and cash equivalents |
$ | 204 | $ | 1 | $ | 547 | (b) | $ | 750 | |||||||
Accounts receivable, net of allowances of $23 million |
429 | 64 | 252 | (b) | 617 | |||||||||||
Inventories |
220 | | | 220 | ||||||||||||
Restricted cash |
24 | | | 24 | ||||||||||||
Prepaid and other current assets |
187 | 9 | | 178 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current assets |
1,064 | 74 | 799 | 1,789 | ||||||||||||
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|
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|
|
|
|||||||||
Property, plant and equipment, net |
205 | 5 | | 200 | ||||||||||||
Goodwill |
2,038 | 521 | | 1,517 | ||||||||||||
Intangibles, net |
261 | 154 | | 107 | ||||||||||||
Operating lease assets |
233 | 4 | | 229 | ||||||||||||
Prepaid pension cost |
40 | | | 40 | ||||||||||||
Deferred income taxes |
244 | 2 | (45 | ) (c) | 197 | |||||||||||
Other assets |
698 | 188 | | 510 | ||||||||||||
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|
|
|
|
|
|||||||||
Total assets |
$ | 4,783 | $ | 948 | $ | 754 | $ | 4,589 | ||||||||
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Liabilities and stockholders equity (deficit) |
||||||||||||||||
Current liabilities |
||||||||||||||||
Short-term borrowings |
$ | 15 | $ | | $ | (15 | ) (b) | $ | | |||||||
Accounts payable |
478 | 55 | | 423 | ||||||||||||
Payroll and benefits liabilities |
93 | 11 | | 82 | ||||||||||||
Contract liabilities |
230 | 50 | | 180 | ||||||||||||
Settlement liabilities |
51 | | | 51 | ||||||||||||
Other current liabilities |
387 | 3 | 362 | (b), (c) | 746 | |||||||||||
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|
|||||||||
Total current liabilities |
1,254 | 119 | 347 | 1,482 | ||||||||||||
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|
|
|||||||||
Long-term debt |
2,595 | | (1,498 | ) (b) | 1,097 | |||||||||||
Pension and indemnity plan liabilities |
157 | | | 157 | ||||||||||||
Postretirement and postemployment benefits liabilities |
45 | | | 45 | ||||||||||||
Income tax accruals |
66 | | | 66 | ||||||||||||
Operating lease liabilities |
252 | 2 | | 250 | ||||||||||||
Other liabilities |
225 | 3 | | 222 | ||||||||||||
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|
|
|
|
|
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|
|||||||||
Total liabilities |
4,594 | 124 | (1,151 | ) | 3,319 | |||||||||||
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|
|||||||||
Commitments and Contingencies |
||||||||||||||||
Series A convertible preferred stock: par value $0.01 per share |
276 | | | 276 | ||||||||||||
Stockholders equity (deficit) |
||||||||||||||||
NCR Voyix stockholders equity (deficit) |
||||||||||||||||
Preferred stock: par value $0.01 per share |
| | | | ||||||||||||
Common stock: par value $0.01 per share |
1 | | | 1 | ||||||||||||
Paid-in capital |
899 | | | 899 | ||||||||||||
Retained earnings (deficit) |
(517 | ) | 824 | (d) | 1,905 | (d) | 564 | |||||||||
Accumulated other comprehensive loss |
(468 | ) | | | (468 | ) | ||||||||||
|
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|
|
|
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|
|
|||||||||
Total NCR Voyix stockholders equity (deficit) |
(85 | ) | 824 | 1,905 | 996 | |||||||||||
Noncontrolling interests in subsidiaries |
(2 | ) | | | (2 | ) | ||||||||||
|
|
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|
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|
|
|||||||||
Total stockholders equity (deficit) |
(87 | ) | 824 | 1,905 | 994 | |||||||||||
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|
|
|
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|
|
|
|||||||||
Total liabilities and stockholders equity (deficit) |
$ | 4,783 | $ | 948 | $ | 754 | $ | 4,589 | ||||||||
|
|
|
|
|
|
|
|
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the six months ended June 30, 2024 | ||||||||||||||||||||
In millions, except per share amounts | Historical (as reported) |
Discontinued Operations (Note a) |
Continuing Operations |
Transaction Accounting Adjustments |
Pro Forma | |||||||||||||||
Product revenue |
$ | 488 | $ | 23 | $ | 465 | $ | | $ | 465 | ||||||||||
Service revenue |
1,246 | 278 | 968 | | 968 | |||||||||||||||
|
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|
|
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|
|||||||||||
Total Revenue |
1,734 | 301 | 1,433 | | 1,433 | |||||||||||||||
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|
|||||||||||
Cost of products |
431 | 22 | 409 | | 409 | |||||||||||||||
Cost of services |
916 | 157 | 759 | | 759 | |||||||||||||||
Selling, general and administrative expenses |
271 | 45 | 226 | | 226 | |||||||||||||||
Research and development expenses |
115 | 26 | 89 | | 89 | |||||||||||||||
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|
|||||||||||
Total operating expenses |
1,733 | 250 | 1,483 | | 1,483 | |||||||||||||||
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|||||||||||
Income (loss) from operations |
1 | 51 | (50 | ) | | (50 | ) | |||||||||||||
Interest expense |
(80 | ) | | (80 | ) | 59 | (e) | (21 | ) | |||||||||||
Other income (expense), net |
(25 | ) | | (25 | ) | 2 | (e) | (23 | ) | |||||||||||
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|||||||||||
Income (loss) from continuing operations before income taxes |
(104 | ) | 51 | (155 | ) | 61 | (94 | ) | ||||||||||||
Income tax expense (benefit) |
10 | 9 | 1 | | (g) | 1 | ||||||||||||||
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|
|||||||||||
Income (loss) from continuing operations |
(114 | ) | 42 | (156 | ) | 61 | (95 | ) | ||||||||||||
Net income (loss) attributable to noncontrolling interests |
(1 | ) | | (1 | ) | | (1 | ) | ||||||||||||
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|||||||||||
Net income (loss) attributable to NCR Voyix |
$ | (113 | ) | $ | 42 | $ | (155 | ) | $ | 61 | $ | (94 | ) | |||||||
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Amounts attributable to NCR Voyix common stockholders: |
||||||||||||||||||||
Income (loss) from continuing operations |
$ | (113 | ) | $ | (94 | ) | ||||||||||||||
Series A convertible preferred stock dividends |
(8 | ) | (8 | ) | ||||||||||||||||
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|
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|
|||||||||||||||||
Income (loss) from continuing operations attributable to NCR Voyix common stockholders |
$ | (121 | ) | $ | (102 | ) | ||||||||||||||
Income (loss) per common share from continuing operations |
||||||||||||||||||||
Basic |
$ | (0.84 | ) | $ | (0.71 | ) | ||||||||||||||
Diluted |
$ | (0.84 | ) | $ | (0.71 | ) | ||||||||||||||
Weighted average common shares outstanding |
||||||||||||||||||||
Basic |
144.3 | 144.3 | ||||||||||||||||||
Diluted |
144.3 | 144.3 |
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2023 | ||||||||||||||||||||
In millions, except per share amounts | Historical (as reported) |
Discontinued Operations (Note a) |
Continuing Operations |
Transaction Accounting Adjustments |
Pro Forma | |||||||||||||||
Product revenue |
$ | 1,239 | $ | 53 | $ | 1,186 | $ | | $ | 1,186 | ||||||||||
Service revenue |
2,591 | 526 | 2,065 | | 2,065 | |||||||||||||||
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|||||||||||
Total Revenue |
3,830 | 579 | 3,251 | | 3,251 | |||||||||||||||
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|
|||||||||||
Cost of products |
1,110 | 43 | 1,067 | | 1,067 | |||||||||||||||
Cost of services |
1,758 | 280 | 1,478 | | 1,478 | |||||||||||||||
Selling, general and administrative expenses |
740 | 76 | 664 | | 664 | |||||||||||||||
Research and development expenses |
185 | 46 | 139 | | 139 | |||||||||||||||
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Total operating expenses |
3,793 | 445 | 3,348 | | 3,348 | |||||||||||||||
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|
|||||||||||
Income (loss) from operations |
37 | 134 | (97 | ) | | (97 | ) | |||||||||||||
Loss on extinguishment of debt |
(46 | ) | | (46 | ) | (11 | ) (e) | (57 | ) | |||||||||||
Interest expense |
(294 | ) | | (294 | ) | 85 | (e) | (209 | ) | |||||||||||
Other income (expense), net |
(79 | ) | (5 | ) | (74 | ) | 22 | (e), (f) | (52 | ) | ||||||||||
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Income (loss) from continuing operations before income taxes |
(382 | ) | 129 | (511 | ) | 96 | (415 | ) | ||||||||||||
Income tax expense (benefit) |
204 | 13 | 191 | 2 | (g) | 193 | ||||||||||||||
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Income (loss) from continuing operations |
(586 | ) | 116 | (702 | ) | 94 | (608 | ) | ||||||||||||
Net income (loss) attributable to noncontrolling interests |
| | | | | |||||||||||||||
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Net income (loss) attributable to NCR Voyix |
$ | (586 | ) | $ | 116 | $ | (702 | ) | $ | 94 | $ | (608 | ) | |||||||
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Amounts attributable to NCR Voyix common stockholders: |
||||||||||||||||||||
Income (loss) from continuing operations |
$ | (586 | ) | $ | (608 | ) | ||||||||||||||
Series A convertible preferred stock dividends |
(16 | ) | (16 | ) | ||||||||||||||||
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|
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Income (loss) from continuing operations attributable to NCR Voyix common stockholders |
$ | (602 | ) | $ | (624 | ) | ||||||||||||||
Income (loss) per common share from continuing operations |
||||||||||||||||||||
Basic |
$ | (4.28 | ) | $ | (4.44 | ) | ||||||||||||||
Diluted |
$ | (4.28 | ) | $ | (4.44 | ) | ||||||||||||||
Weighted average common shares outstanding |
||||||||||||||||||||
Basic |
140.6 | 140.6 | ||||||||||||||||||
Diluted |
140.6 | 140.6 |
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2022 | ||||||||||||
In millions, except per share amounts | Historical (as reported) |
Discontinued Operations (Note a) |
Pro Forma | |||||||||
Product revenue |
$ | 1,274 | $ | 55 | $ | 1,219 | ||||||
Service revenue |
2,519 | 492 | 2,027 | |||||||||
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|
|
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Total Revenue |
3,793 | 547 | 3,246 | |||||||||
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|
|
|
|||||||
Cost of products |
1,151 | 38 | 1,113 | |||||||||
Cost of services |
1,664 | 256 | 1,408 | |||||||||
Selling, general and administrative expenses |
695 | 72 | 623 | |||||||||
Research and development expenses |
147 | 31 | 116 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
3,657 | 397 | 3,260 | |||||||||
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|
|
|
|
|||||||
Income (loss) from operations |
136 | 150 | (14 | ) | ||||||||
Interest expense |
(285 | ) | | (285 | ) | |||||||
Other income (expense), net |
18 | | 18 | |||||||||
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|
|
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|
|||||||
Income (loss) from continuing operations before income taxes |
(131 | ) | 150 | (281 | ) | |||||||
Income tax expense (benefit) |
72 | 11 | 61 | |||||||||
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|
|
|
|
|
|||||||
Income (loss) from continuing operations |
(203 | ) | 139 | (342 | ) | |||||||
Net income (loss) attributable to noncontrolling interests |
| | | |||||||||
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Net income (loss) attributable to NCR Voyix |
$ | (203 | ) | $ | 139 | $ | (342 | ) | ||||
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|
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Amounts attributable to NCR Voyix common stockholders: |
||||||||||||
Income (loss) from continuing operations |
$ | (203 | ) | $ | (342 | ) | ||||||
Series A convertible preferred stock dividends |
(16 | ) | (16 | ) | ||||||||
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|
|
|
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Income (loss) from continuing operations attributable to NCR Voyix common stockholders |
$ | (219 | ) | $ | (358 | ) | ||||||
Income (loss) per common share from continuing operations |
||||||||||||
Basic |
$ | (1.60 | ) | $ | (2.62 | ) | ||||||
Diluted |
$ | (1.60 | ) | $ | (2.62 | ) | ||||||
Weighted average common shares outstanding |
||||||||||||
Basic |
136.7 | 136.7 | ||||||||||
Diluted |
136.7 | 136.7 |
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2021 | ||||||||||||
In millions, except per share amounts | Historical (as reported) |
Discontinued Operations (Note a) |
Pro Forma | |||||||||
Product revenue |
$ | 1,176 | $ | 69 | $ | 1,107 | ||||||
Service revenue |
2,516 | 446 | 2,070 | |||||||||
|
|
|
|
|
|
|||||||
Total Revenue |
3,692 | 515 | 3,177 | |||||||||
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|
|
|
|||||||
Cost of products |
1,032 | 45 | 987 | |||||||||
Cost of services |
1,735 | 212 | 1,523 | |||||||||
Selling, general and administrative expenses |
704 | 91 | 613 | |||||||||
Research and development expenses |
195 | 24 | 171 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
3,666 | 372 | 3,294 | |||||||||
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|
|
|
|
|||||||
Income (loss) from operations |
26 | 143 | (117 | ) | ||||||||
Loss on extinguishment of debt |
(42 | ) | | (42 | ) | |||||||
Interest expense |
(238 | ) | | (238 | ) | |||||||
Other income (expense), net |
(13 | ) | | (13 | ) | |||||||
|
|
|
|
|
|
|||||||
Income (loss) from continuing operations before income taxes |
(267 | ) | 143 | (410 | ) | |||||||
Income tax expense (benefit) |
70 | 15 | 55 | |||||||||
|
|
|
|
|
|
|||||||
Income (loss) from continuing operations |
(337 | ) | 128 | (465 | ) | |||||||
Net income (loss) attributable to noncontrolling interests |
| | | |||||||||
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|
|
|
|
|
|||||||
Net income (loss) attributable to NCR Voyix |
$ | (337 | ) | $ | 128 | $ | (465 | ) | ||||
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Amounts attributable to NCR Voyix common stockholders: |
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Income (loss) from continuing operations |
$ | (337 | ) | $ | (465 | ) | ||||||
Series A convertible preferred stock dividends |
(16 | ) | (16 | ) | ||||||||
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Income (loss) from continuing operations attributable to NCR Voyix common stockholders |
$ | (353 | ) | $ | (481 | ) | ||||||
Income (loss) per common share from continuing operations |
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Basic |
$ | (2.69 | ) | $ | (3.67 | ) | ||||||
Diluted |
$ | (2.69 | ) | $ | (3.67 | ) | ||||||
Weighted average common shares outstanding |
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Basic |
131.2 | 131.2 | ||||||||||
Diluted |
131.2 | 131.2 |
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
The Unaudited Pro Forma Condensed Consolidated Balance Sheet and Unaudited Pro Forma Condensed Consolidated Statements of Operations include the following adjustments:
Digital Banking Discontinued Operations:
(a) Reflects the discontinued operations of the Digital Banking Business, including associated assets, liabilities, equity, results of operations, and the non-recurring costs associated with the Transaction, primarily consisting of professional fees. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the amounts exclude general corporate overhead costs which were historically allocated, but did not specifically relate to the Digital Banking Business, as they did not meet the discontinued operations criteria. Such allocations included labor and non-labor expenses related to NCR Voyixs corporate support functions (e.g., information technology, human resources and legal, real estate, among others) that historically provided support to the Digital Banking Business.
Transaction Accounting Adjustments:
(b) Reflects the estimated cash proceeds of approximately $2.45 billion from Buyer to NCR Voyix in connection with the Transaction as consideration for the net assets sold to the Buyer utilized for:
i. | Repayment of the short-term debt held by NCR Voyix of $15 million; |
ii. | Repayment of the long-term debt held by NCR Voyix of $1,509 million and write-off of unamortized deferred financing fees of $11 million; |
iii. | Repayment of accrued interest on short- and long-term debt held by NCR Voyix of $18 million; |
iv. | Termination and contemporaneous repurchase of trade receivables of $300 million held within the T/R Facility, inclusive of $48 million of trade receivables related to the Digital Banking Business included within the net assets conveyed to the Buyer, as required to effectuate the Transaction; and |
v. | Payment of transaction costs of $61 million including legal, investment banking and third-party consulting fees. |
The final purchase price will be determined subsequent to the closing of the Transaction to reflect adjustments in accordance with the Purchase Agreement, including final net working capital adjustments.
(c) The Transaction is structured as an asset sale for income tax purposes. The gain on the Transaction will result in an estimated $425 million of income tax expense, $380 million of which has been classified as a current liability. The remaining $45 million non-cash deferred tax adjustment is caused by reversal of temporary differences related to the Digital Banking assets and utilization of tax attributes.
(d) Reflects the estimated pre-tax gain of $1,517 million, which is included in total stockholders equity on the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024, as a result of the completion of the Transaction. The estimated pre-tax gain is comprised of the estimated cash proceeds of approximately $2.45 billion, less the (i) historical net carrying value of the Digital Banking Business of $824 million, (ii) repurchased trade receivables related to the Digital Banking Business conveyed of $48 million and (iii) estimated transaction costs of $61 million.
Stockholders equity is inclusive of the estimated tax impact of the Transaction as described in (c) above and the impact of the write-off of unamortized deferred financing fees as described in (b) above, which is not included in the estimated pre-tax gain.
The estimated pre-tax gain reflected herein is based on the carrying value of the Digital Banking Business as of June 30, 2024. As a result, these estimates may materially differ from the actual pre-tax gain on the Transaction recorded as of the closing date of the Transaction.
(e) Reflects the estimated reduced interest expense by $59 million for the six months ended June 30, 2024 and $85 million for the year ended December 31, 2023, respectively, as a result of the payments made with the estimated cash proceeds received in connection with the Transaction to reduce short- and long-term debt obligations and to terminate the T/R Facility. This amount is based on the historical interest expense associated with the borrowings and the T/R Facility to be repaid in connection with the Transaction together with the recognition of related make-whole premiums.
Additionally, as a result of the short- and long-term debt repayments, NCR Voyix reflected a loss on extinguishment of debt related to the write-off of unamortized deferred financing fees of $11 million for the year ended December 31, 2023.
Further, as a result of the short- and long-term debt repayments and the T/R Facility termination, NCR Voyix reflected reduced other expense related to a reduction in certain bank fees incurred of $2 million for the six months ended June 30, 2024 and $3 million for the year ended December 31, 2023.
(f) Reflects the estimated fees for providing transitional services to the Buyer in accordance with the Transaction Service Agreement (the TSA) of $19 million for the year ended December 31, 2023. In connection with the Transaction, NCR Voyix entered into the TSA, pursuant to which NCR Voyix will provide certain transitional services such as accounting and treasury, legal, and other administrative support to the Buyer for a transitional period of up to 12 months after the closing of the Transaction.
(g) Reflects the tax effects of the Transaction Accounting Adjustments to pre-tax book income at the applicable statutory income tax rates in the respective jurisdictions except for the adjustments impacting interest expense, given there was a valuation allowance in the historical period. The amounts are considered preliminary, and as such, actual results could materially differ from these estimates.