Segment Information and Concentrations

6 Months Ended

Jun. 30, 2011

Segment Information and Concentrations [Abstract]

Segment Information and Concentrations

SEGMENT INFORMATION AND CONCENTRATIONS

Effective January 1, 2011, NCR reorganized its businesses and management thereof to a line of business model, changing from the previous functional geographic model. In order to align the Company's external reporting of its financial results with this organizational change, the Company modified its segment reporting. The Company now manages and reports its businesses in the following four segments:

• Financial Services - We offer solutions to enable customers in the financial services industry to reduce costs, generate new revenue streams and enhance customer loyalty. These solutions include a comprehensive line of ATM and payment processing hardware and software, and related installation, maintenance and managed and professional services. We also offer a complete line of printer consumables.

• Retail and Hospitality - We offer solutions to customers in the retail and hospitality industries designed to improve selling productivity and checkout processes as well as increase service levels. These solutions primarily include retail-oriented technologies, such as Point of Sale (POS) terminals and bar-code scanners as well as innovative self-service kiosks, such as self-checkout. We also offer installation, maintenance, and managed and professional services and a complete line of printer consumables.

• Entertainment - We offer solutions that are dedicated to providing the consumer the ability to rent or buy movies at their convenience through the use of self-service kiosks which we own and operate. This segment operates primarily in North America.

• Emerging Industries - We offer maintenance and managed and professional services for third-party computer hardware provided to select manufacturers, primarily in the telecommunications industry, who value and leverage our global service capability. Also included in our Emerging Industries segment are solutions designed to enhance the customer experience which include self-service kiosks to the travel and gaming and healthcare industries, as well as related installation, maintenance, and managed and professional services.

These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenue and segment operating income. Assets are not allocated to segments, and thus are not included in the assessment of segment performance, and consequently, we do not disclose total assets by reportable segment.

We have reclassified our prior period segment information to conform to the current period presentation. The accounting policies used to determine the results of the operating segments are the same as those utilized for the consolidated financial statements as a whole. Intersegment sales and transfers are not material.

In recognition of the volatility of the effects of pension expense on our segment results, and to maintain operating focus on business performance, pension expense, as well as other significant, non-recurring items are excluded from the segment operating results utilized by our chief operating decision maker in evaluating segment performance and are separately delineated to reconcile back to total reported income from operations.

The following table presents revenue and operating income by segment:

In millions	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
Revenue by segment
Financial Services	$	729		$	632		$	1,321		$	1,205
Retail and Hospitality	449			438			825			796
Entertainment	38			23			75			41
Emerging Industries	96			83			186			163
Consolidated revenue	1,312			1,176			2,407			2,205
Operating income (loss) by segment
Financial Services	77			75			124			108
Retail and Hospitality	22			15			33			20
Entertainment	(17		)	(10		)	(32		)	(22		)
Emerging Industries	19			8			33			25
Subtotal - segment operating income	101			88			158			131
Pension expense	53			50			104			106
Other adjustments(1)	1			7			1			12
Income from operations	$	47		$	31		$	53		$	13

(1) Other adjustments in the three and six months ended June 30, 2011 included $1 million of acquisition related costs. Other adjustments in the three and six months ended June 30, 2010 included $7 million and $12 million, respectively, for incremental costs directly related to the relocation of the worldwide headquarters.

The following table presents revenue from products and services for NCR:

In millions	Three months ended June 30				Six months ended June 30
	2011		2010		2011		2010
Product revenue	$	650	$	587	$	1,144	$	1,055
Professional and installation services revenue	178		140		315		258
Total solution revenue	828		727		1,459		1,313
Support services revenue	484		449		948		892
Total revenue	$	1,312	$	1,176	$	2,407	$	2,205