Segment Information and Concentrations

9 Months Ended

Sep. 30, 2011

Segment Information and Concentrations [Abstract]

Segment Information and Concentrations

SEGMENT INFORMATION AND CONCENTRATIONS

Effective January 1, 2011, NCR reorganized its businesses and the 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 five 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 Solutions (formerly "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.

• Hospitality and Specialty Retail - The business of Radiant is managed and reported as a separate segment, Hospitality and Specialty Retail. Through this line of business, we offer technology solutions to customers in the hospitality, convenience, and specialty retail industries, serving businesses that range from a single store or restaurant to global chains and the world's largest sports stadiums. Our solutions include Point of Sale (POS) hardware and software solutions, installation, maintenance, and managed and professional services and a complete line of printer consumables.

• Entertainment - We offer solutions that provide the consumer the ability to rent or buy movies at their convenience through 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 for the travel and gaming and healthcare industries, including self-service kiosks, 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 September 30						Nine months ended September 30
	2011			2010			2011			2010
Revenue by segment
Financial Services	$	770		$	655		$	2,091		$	1,860
Retail Solutions	461			430			1,286			1,226
Hospitality and Specialty Retail(1)	36			—			36			—
Entertainment	42			29			117			70
Emerging Industries	94			93			280			256
Consolidated revenue	1,403			1,207			3,810			3,412
Operating income (loss) by segment
Financial Services	81			63			205			171
Retail Solutions	22			25			55			45
Hospitality and Specialty Retail(1)	5			—			5			—
Entertainment	(13		)	(13		)	(45		)	(35		)
Emerging Industries	18			15			51			40
Subtotal - segment operating income	113			90			271			221
Pension expense	62			50			166			156
Other adjustments(2)	33			6			34			18
Income from operations	$	18		$	34		$	71		$	47

⁽¹⁾  The acquisition of Radiant was completed on August 24, 2011. Because the transaction was completed during the third quarter of 2011, the revenue and operating income results reflected for the Hospitality and Specialty Retail segment are partial, and reflect only the period from August 25, 2011 through September 30, 2011.

⁽²⁾  Other adjustments include $24 million and $25 million of acquisition related transaction costs for the the three and nine months ended September 30, 2011, respectively; $6 million of acquisition related severance costs for the three and nine months ended September 30, 2011; and $3 million of acquisition related amortization of intangible assets for the three and nine months ended September 30, 2011. Other adjustments include $6 million and $18 million of incremental costs directly related to the relocation of the Company's worldwide headquarters for the three and nine months ended September 30, 2010, respectively.

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

In millions	Three months ended September 30				Nine months ended September 30
	2011		2010		2011		2010
Product revenue	$	719	$	600	$	1,863	$	1,655
Professional and installation services revenue	193		148		508		406
Total solution revenue	912		748		2,371		2,061
Support services revenue	491		459		1,439		1,351
Total revenue	$	1,403	$	1,207	$	3,810	$	3,412