Segment Information and Concentrations

6 Months Ended

Jun. 30, 2012

Segment Information and Concentrations [Abstract]

Segment Information and Concentrations

12. SEGMENT INFORMATION AND CONCENTRATIONS

The Company 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 Solutions - We offer solutions to customers in the retail industry 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 (formerly Hospitality and Specialty Retail) - We offer technology solutions to customers in the hospitality industry, serving businesses that range from a single 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.

• Emerging Industries - We offer maintenance as well as 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 industries, including self-service kiosks, as well as related installation, maintenance, and managed and professional services.

As of January 1, 2012, the specialty retail customer accounts that were formerly part of the Hospitality and Specialty Retail segment are now included in the Retail Solutions segment, and the hospitality customer accounts that were formerly part of the Retail Solutions segment are now included in the Hospitality segment. As a result, the former Hospitality and Specialty Retail segment has been renamed Hospitality. Prior period information has not been reclassified to conform to the current period presentation, as the change was not considered material.

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.

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
	2012		2011		2012		2011
Revenue by segment
Financial Services	$	783	$	729	$	1,477	$	1,321
Retail Solutions	409		451		756		831
Hospitality(1)	130		—		243		—
Emerging Industries	87		92		177		178
Consolidated revenue	1,409		1,272		2,653		2,330
Operating income by segment
Financial Services	85		77		141		124
Retail Solutions	28		19		30		27
Hospitality(1)	21		—		40		—
Emerging Industries	20		20		44		36
Subtotal - segment operating income	154		116		255		187
Pension expense	39		53		78		104
Other adjustments(2)	14		1		27		1
Income from operations	$	101	$	62	$	150	$	82

⁽¹⁾  A substantial portion of the Hospitality segment's results relate to operations acquired from the acquisition of Radiant in the quarter ended September 30, 2011.

⁽²⁾  Other adjustments include $4 million and $8 million of acquisition related integration costs for the the the three and six months ended June 30, 2012, respectively; and $10 million and $19 million of acquisition related amortization of intangible assets for the three and six months ended June 30, 2012, respectively. Other adjustments in the three and six months ended June 30, 2011 include $1 million of acquisition related transaction costs.

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

In millions	Three months ended June 30				Six months ended June 30
	2012		2011		2012		2011
Product revenue	$	706	$	612	$	1,276	$	1,070
Professional and installation services revenue	220		176		409		312
Total solution revenue	926		788		1,685		1,382
Support services revenue	483		484		968		948
Total revenue	$	1,409	$	1,272	$	2,653	$	2,330