Segment Information and Concentrations

6 Months Ended

Jun. 30, 2013

Segment Information and Concentrations [Abstract]

Segment Information and Concentrations

14. 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 cash management 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 terminals and related software, 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 - We offer technology solutions to customers in the hospitality industry, serving businesses that range from a single store or restaurant to global chains and sports and entertainment venues. Our solutions include point of sale 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.

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
	2013		2012		2013		2012
Revenue by segment
Financial Services	$	782	$	786	$	1,496	$	1,481
Retail Solutions (2)	515		409		1,004		756
Hospitality	158		130		289		243
Emerging Industries	80		84		156		173
Consolidated revenue	1,535		1,409		2,945		2,653
Operating income by segment
Financial Services	95		86		152		143
Retail Solutions (2)	49		28		90		30
Hospitality	27		21		48		40
Emerging Industries	11		19		21		42
Subtotal - segment operating income	182		154		311		255
Pension expense	9		10		16		20
Other adjustments(1)	34		14		71		27
Income from operations	$	139	$	130	$	224	$	208

⁽¹⁾  Other adjustments for the three months ended June 30, 2013 include $14 million of acquisition-related costs, $17 million of acquisition-related amortization of intangible assets, $3 million of acquisition-related purchase price adjustments, and for the three months ended June 30, 2012 include $4 million of acquisition-related costs and $10 million of acquisition-related amortization of intangible assets. Other adjustments for the six months ended June 30, 2013 include $30 million of acquisition-related costs, $31 million of acquisition-related amortization of intangible assets, $9 million of acquisition-related purchase price adjustments and $1 million of legal costs related to the previously disclosed OFAC and FCPA investigations, and for the six months ended June 30, 2012 include $8 million of acquisition-related costs and $19 million of acquisition-related amortization of intangible assets.

⁽²⁾  For the three months ended June 30, 2013 and from the acquisition date of February 6, 2013 through June 30, 2013, Retalix contributed $82 million and $132 million, respectively, in revenue and $16 million and $25 million, respectively, in segment operating income to the Retail Solutions segment.

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

In millions	Three months ended June 30				Six months ended June 30
	2013		2012		2013		2012
Product revenue	$	743	$	706	$	1,410	$	1,276
Professional and installation services revenue	308		220		576		409
Total solution revenue	1,051		926		1,986		1,685
Support services revenue	484		483		959		968
Total revenue	1,535		1,409		$	2,945	$	2,653