15. CONDENSED CONSOLIDATING SUPPLEMENTAL GUARANTOR INFORMATION

The Company's 5.00% Notes, 4.625% Notes, 5.875% Notes and 6.375% Notes are guaranteed by the Company's subsidiary, NCR International, Inc. (Guarantor Subsidiary), which is 100% owned by the Company and has guaranteed fully and unconditionally the obligations to pay principal and interest for these senior unsecured notes. The guarantees are subject to release under certain circumstances as described below:


•	the designation of the Guarantor Subsidiary as an unrestricted subsidiary under the indenture governing the notes;


•	the release of the Guarantor Subsidiary from its guarantee under the Senior Secured Credit Facility;


•	the release or discharge of the indebtedness that required the guarantee of the notes by the Guarantor Subsidiary;


•	the permitted sale or other disposition of the Guarantor Subsidiary to a third party; and


•	the Company's exercise of its legal defeasance option of its covenant defeasance option under the indenture governing the notes.

Refer to Note 5, "Debt Obligations," for additional information.

In connection with the previously completed registered exchange offers for the 5.00% Notes, 4.625% Notes, 5.875% Notes and 6.375% Notes, the Company is required to comply with Rule 3-10 of SEC Regulation S-X (Rule 3-10), and has therefore included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(f) of SEC Regulation S-X.

The following supplemental information sets forth, on a consolidating basis, the condensed statements of operations and comprehensive income (loss), the condensed balance sheets and the condensed statements of cash flows for the parent issuer of these senior unsecured notes, for the Guarantor Subsidiary and for the Company and all of its consolidated subsidiaries (amounts in millions):



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended June 30, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	297		$	27		$	495		$	(116	)	$	703
Service revenue	327			8			566			—			901
Total revenue	624			35			1,061			(116		)	1,604
Cost of products	233			9			418			(116		)	544
Cost of services	236			3			675			—			914
Selling, general and administrative expenses	110			1			228			—			339
Research and development expenses	19			—			48			—			67
Restructuring-related charges	2			—			4			—			6
Total operating expenses	600			13			1,373			(116		)	1,870
Income (loss) from operations	24			22			(312		)	—			(266		)
Interest expense	(44		)	—			(20		)	19			(45		)
Other (expense) income, net	13			2			4			(19		)	—
Income (loss) from continuing operations before income taxes	(7		)	24			(328		)	—			(311		)
Income tax expense (benefit)	(2		)	11			23			—			32
Income (loss) from continuing operations before earnings in subsidiaries	(5		)	13			(351		)	—			(343		)
Equity in earnings of consolidated subsidiaries	(339		)	(359		)	—			698			—
Income (loss) from continuing operations	(344		)	(346		)	(351		)	698			(343		)
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	(344	)	$	(346	)	$	(351	)	$	698		$	(343	)
Net income (loss) attributable to noncontrolling interests	—			—			1			—			1
Net income (loss) attributable to NCR	$	(344	)	$	(346	)	$	(352	)	$	698		$	(344	)
Total comprehensive income (loss)	(323		)	(274		)	(327		)	602			(322		)
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			1			—			1
Comprehensive income (loss) attributable to NCR common stockholders	$	(323	)	$	(274	)	$	(328	)	$	602		$	(323	)



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended June 30, 2014

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	245		$	32		$	485		$	(40	)	$	722
Service revenue	322			7			607			—			936
Total revenue	567			39			1,092			(40		)	1,658
Cost of products	200			12			359			(40		)	531
Cost of services	239			3			405			—			647
Selling, general and administrative expenses	127			(1		)	121			—			247
Research and development expenses	34			—			30			—			64
Total operating expenses	600			14			915			(40		)	1,489
Income (loss) from operations	(33		)	25			177			—			169
Interest expense	(44		)	—			(20		)	18			(46		)
Other (expense) income, net	12			(1		)	4			(18		)	(3		)
Income (loss) from continuing operations before income taxes	(65		)	24			161			—			120
Income tax expense (benefit)	(23		)	13			39			—			29
Income (loss) from continuing operations before earnings in subsidiaries	(42		)	11			122			—			91
Equity in earnings of consolidated subsidiaries	132			121			—			(253		)	—
Income (loss) from continuing operations	90			132			122			(253		)	91
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	90		$	132		$	122		$	(253	)	$	91
Net income (loss) attributable to noncontrolling interests	—			—			1			—			1
Net income (loss) attributable to NCR	$	90		$	132		$	121		$	(253	)	$	90
Total comprehensive income (loss)	109			143			143			(284		)	111
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			2			—			2
Comprehensive income (loss) attributable to NCR common stockholders	$	109		$	143		$	141		$	(284	)	$	109



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the six months ended June 30, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	547		$	46		$	919		$	(205	)	$	1,307
Service revenue	628			15			1,130			—			1,773
Total revenue	1,175			61			2,049			(205		)	3,080
Cost of products	438			19			775			(205		)	1,027
Cost of services	457			5			1,055			—			1,517
Selling, general and administrative expenses	216			3			345			—			564
Research and development expenses	38			—			84			—			122
Restructuring-related charges	5			—			16			—			21
Total operating expenses	1,154			27			2,275			(205		)	3,251
Income (loss) from operations	21			34			(226		)	—			(171		)
Interest expense	(87		)	—			(39		)	37			(89		)
Other (expense) income, net	21			2			7			(37		)	(7		)
Income (loss) from continuing operations before income taxes	(45		)	36			(258		)	—			(267		)
Income tax expense (benefit)	(6		)	16			24			—			34
Income (loss) from continuing operations before earnings in subsidiaries	(39		)	20			(282		)	—			(301		)
Equity in earnings of consolidated subsidiaries	(265		)	(303		)	—			568			—
Income (loss) from continuing operations	(304		)	(283		)	(282		)	568			(301		)
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	(304	)	$	(283	)	$	(282	)	$	568		$	(301	)
Net income (loss) attributable to noncontrolling interests	—			—			3			—			3
Net income (loss) attributable to NCR	$	(304	)	$	(283	)	$	(285	)	$	568		$	(304	)
Total comprehensive income (loss)	(305		)	(246		)	(294		)	540			(305		)
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			—			—			—
Comprehensive income (loss) attributable to NCR common stockholders	$	(305	)	$	(246	)	$	(294	)	$	540		$	(305	)



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the six months ended June 30, 2014

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	485		$	49		$	916		$	(94	)	$	1,356
Service revenue	629			14			1,177			—			1,820
Total revenue	1,114			63			2,093			(94		)	3,176
Cost of products	383			17			701			(94		)	1,007
Cost of services	471			6			796			—			1,273
Selling, general and administrative expenses	258			—			234			—			492
Research and development expenses	51			—			76			—			127
Total operating expenses	1,163			23			1,807			(94		)	2,899
Income (loss) from operations	(49		)	40			286			—			277
Interest expense	(87		)	—			(37		)	35			(89		)
Other (expense) income, net	24			(3		)	4			(35		)	(10		)
Income (loss) from continuing operations before income taxes	(112		)	37			253			—			178
Income tax expense (benefit)	(40		)	20			53			—			33
Income (loss) from continuing operations before earnings in subsidiaries	(72		)	17			200			—			145
Equity in earnings of consolidated subsidiaries	215			184			—			(399		)	—
Income (loss) from continuing operations	143			201			200			(399		)	145
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	143		$	201		$	200		$	(399	)	$	145
Net income (loss) attributable to noncontrolling interests	—			—			2			—			2
Net income (loss) attributable to NCR	$	143		$	201		$	198		$	(399	)	$	143
Total comprehensive income (loss)	167			215			221			(434		)	169
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			2			—			2
Comprehensive income (loss) attributable to NCR common stockholders	$	167		$	215		$	219		$	(434	)	$	167



Condensed Consolidating Balance Sheet
June 30, 2015

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	20	$	14	$	391	$	—		$	425
Accounts receivable, net	73		32		1,320		—			1,425
Inventories	255		10		444		—			709
Due from affiliates	1,055		1,286		330		(2,671		)	—
Other current assets	219		31		278		(47		)	481
Total current assets	1,622		1,373		2,763		(2,718		)	3,040
Property, plant and equipment, net	152		1		195		—			348
Goodwill	876		—		1,882		—			2,758
Intangibles, net	179		—		684		—			863
Prepaid pension cost	—		—		137		—			137
Deferred income taxes	388		130		42		(185		)	375
Investments in subsidiaries	3,259		1,491		—		(4,750		)	—
Due from affiliates	1,091		21		39		(1,151		)	—
Other assets	388		53		104		—			545
Total assets	$	7,955	$	3,069	$	5,846	$	(8,804	)	$	8,066

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	41	$	—	$	18	$	—		$	59
Accounts payable	275		—		420		—			695
Payroll and benefits liabilities	80		1		97		—			178
Deferred service revenue and customer deposits	208		32		327		—			567
Due to affiliates	1,660		136		875		(2,671		)	—
Other current liabilities	221		5		232		(47		)	411
Total current liabilities	2,485		174		1,969		(2,718		)	1,910
Long-term debt	3,402		—		13		—			3,415
Pension and indemnity plan liabilities	400		—		286		—			686
Postretirement and postemployment benefits liabilities	23		—		154		—			177
Income tax accruals	3		11		167		—			181
Due to affiliates	17		39		1,095		(1,151		)	—
Other liabilities	31		—		237		(185		)	83
Total liabilities	6,361		224		3,921		(4,054		)	6,452
Redeemable noncontrolling interest	—		—		16		—			16
Stockholders’ equity
Total NCR stockholders’ equity	1,594		2,845		1,905		(4,750		)	1,594
Noncontrolling interests in subsidiaries	—		—		4		—			4
Total stockholders’ equity	1,594		2,845		1,909		(4,750		)	1,598
Total liabilities and stockholders’ equity	$	7,955	$	3,069	$	5,846	$	(8,804	)	$	8,066



Condensed Consolidating Balance Sheet
December 31, 2014

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	40	$	9	462		$	—		$	511
Accounts receivable, net	69		19		1,316		—			1,404
Inventories	242		6		421		—			669
Due from affiliates	626		1,228		476		(2,330		)	—
Other current assets	294		28		280		(98		)	504
Total current assets	1,271		1,290		2,955		(2,428		)	3,088
Property, plant and equipment, net	161		1		234		—			396
Goodwill	878		—		1,882		—			2,760
Intangibles, net	196		—		730		—			926
Prepaid pension cost	—		—		551		—			551
Deferred income taxes	363		128		43		(185		)	349
Investments in subsidiaries	3,519		1,771		—		(5,290		)	—
Due from affiliates	1,127		20		41		(1,188		)	—
Other assets	375		49		113		—			537
Total assets	$	7,890	$	3,259	$	6,549	$	(9,091	)	$	8,607

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	85	$	—	$	102	$	—		$	187
Accounts payable	248		—		464		—			712
Payroll and benefits liabilities	85		—		111		—			196
Deferred service revenue and customer deposits	149		21		324		—			494
Due to affiliates	1,318		124		888		(2,330		)	—
Other current liabilities	192		10		377		(98		)	481
Total current liabilities	2,077		155		2,266		(2,428		)	2,070
Long-term debt	3,454		—		18		—			3,472
Pension and indemnity plan liabilities	391		—		314		—			705
Postretirement and postemployment benefits liabilities	25		—		145		—			170
Income tax accruals	3		10		168		—			181
Due to affiliates	17		41		1,130		(1,188		)	—
Other liabilities	52		—		244		(185		)	111
Total liabilities	6,019		206		4,285		(3,801		)	6,709
Redeemable noncontrolling interest	—		—		15		—			15
Stockholders’ equity
Total NCR stockholders’ equity	1,871		3,053		2,237		(5,290		)	1,871
Noncontrolling interests in subsidiaries	—		—		12		—			12
Total stockholders’ equity	1,871		3,053		2,249		(5,290		)	1,883
Total liabilities and stockholders’ equity	$	7,890	$	3,259	$	6,549	$	(9,091	)	$	8,607



Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	61		$	(75	)	$	301		$	(41	)	$	246
Investing activities
Expenditures for property, plant and equipment	(9		)	—			(22		)	—			(31		)
Additions to capitalized software	(48		)	—			(31		)	—			(79		)
Proceeds from (payments of) intercompany notes	96			80			—			(176		)	—
Investments in equity affiliates	(1		)	—			—			1			—
Other investing activities, net	(7		)	—			4			—			(3		)
Net cash provided by (used in) investing activities	31			80			(49		)	(175		)	(113		)
Financing activities
Tax withholding payments on behalf of employees	(10		)	—			—			—			(10		)
Short term borrowings, net	15			—			13			—			28
Payments on term credit facility	(111		)	—			(5		)	—			(116		)
Payments on revolving credit facilities	(223		)	—			(385		)	—			(608		)
Borrowings on revolving credit facilities	223			—			289			—			512
Proceeds from employee stock plans	11			—			—			—			11
Other financing activities	—			—			—			—			—
Equity contribution	—			—			1			(1		)	—
Dividend distribution to consolidated subsidiaries	—			—			(41		)	41			—
Borrowings (repayments) of intercompany notes	—			—			(176		)	176			—
Net cash provided by (used in) financing activities	(95		)	—			(304		)	216			(183		)
Cash flows from discontinued operations
Net cash (used in) provided by operating activities	(17		)	—			—			—			(17		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(19		)	—			(19		)
Increase (decrease) in cash and cash equivalents	(20		)	5			(71		)	—			(86		)
Cash and cash equivalents at beginning of period	40			9			462			—			511
Cash and cash equivalents at end of period	$	20		$	14		$	391		$	—		$	425



Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2014

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	17		$	(46	)	$	169		$	(29	)	$	111
Investing activities
Expenditures for property, plant and equipment	(31		)	—			(35		)	—			(66		)
Additions to capitalized software	(43		)	—			(30		)	—			(73		)
Business acquisitions, net	(1,642		)	—			—			—			(1,642		)
Proceeds from (payments of) intercompany notes	40			50			—			(90		)	—
Changes in restricted cash	1,114			—			—			—			1,114
Investments in equity affiliates	(2		)	—			—			2			—
Other investing activities, net	(3		)	—			7			—			4
Net cash provided by (used in) investing activities	(567		)	50			(58		)	(88		)	(663		)
Financing activities
Tax withholding payments on behalf of employees	(24		)	—			—			—			(24		)
Short term borrowings, net	—			—			9			—			9
Payments on term credit facility	(3		)	—			—			—			(3		)
Borrowings on term credit facility	250			—			—			—			250
Payments on revolving credit facility	(255		)	—			—			—			(255		)
Borrowings on revolving credit facility	570			—			—			—			570
Debt issuance costs	(3		)	—			—			—			(3		)
Proceeds from employee stock plans	7			—			—			—			7
Other financing activities	—			—			(3		)	—			(3		)
Equity contribution	—			—			2			(2		)	—
Dividend distribution to consolidated subsidiaries	—			—			(29		)	29			—
Borrowings (repayments) of intercompany notes	—			—			(90		)	90			—
Net cash provided by (used in) financing activities	542			—			(111		)	117			548
Cash flows from discontinued operations
Net cash (used in) provided by operating activities	(38		)	—			—			—			(38		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(3		)	—			(3		)
Increase (decrease) in cash and cash equivalents	(46		)	4			(3		)	—			(45		)
Cash and cash equivalents at beginning of period	75			11			442			—			528
Cash and cash equivalents at end of period	$	29		$	15		$	439		$	—		$	483