16. 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 7, "Debt Obligations," for additional information.

In connection with the previously completed 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):



Consolidating Statements of Operations and Comprehensive Income (Loss)
For the year ended December 31, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	1,121		$	105		$	2,380		$	(895	)	$	2,711
Service revenue	1,337			33			2,292			—			3,662
Total revenue	2,458			138			4,672			(895		)	6,373
Cost of products	855			43			2,069			(895		)	2,072
Cost of services	986			13			1,833			—			2,832
Selling, general and administrative expenses	474			4			564			—			1,042
Research and development expenses	90			—			140			—			230
Restructuring-related charges	28			—			34			—			62
Total operating expenses	2,433			60			4,640			(895		)	6,238
Income (loss) from operations	25			78			32			—			135
Interest expense	(168		)	—			(78		)	73			(173		)
Other (expense) income, net	21			4			(9		)	(73		)	(57		)
Income (loss) from continuing operations before income taxes	(122		)	82			(55		)	—			(95		)
Income tax expense (benefit)	(38		)	52			41			—			55
Income (loss) from continuing operations before earnings in subsidiaries	(84		)	30			(96		)	—			(150		)
Equity in earnings of consolidated subsidiaries	(69		)	(161		)	—			230			—
Income (loss) from continuing operations	(153		)	(131		)	(96		)	230			(150		)
Income (loss) from discontinued operations, net of tax	(25		)	—			1			—			(24		)
Net income (loss)	$	(178	)	$	(131	)	$	(95	)	$	230		$	(174	)
Net income (loss) attributable to noncontrolling interests	—			—			4			—			4
Net income (loss) attributable to NCR	$	(178	)	$	(131	)	$	(99	)	$	230		$	(178	)
Total comprehensive income (loss)	(192		)	(154		)	(110		)	265			(191		)
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			1			—			1
Comprehensive income (loss) attributable to NCR common stockholders	$	(192	)	$	(154	)	$	(111	)	$	265		$	(192	)



Consolidating Statements of Operations and Comprehensive Income (Loss)
For the year ended December 31, 2014

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	1,039		$	111		$	2,137		$	(395	)	$	2,892
Service revenue	1,254			28			2,417			—			3,699
Total revenue	2,293			139			4,554			(395		)	6,591
Cost of products	828			41			1,679			(395		)	2,153
Cost of services	996			13			1,697			—			2,706
Selling, general and administrative expenses	483			2			527			—			1,012
Research and development expenses	148			—			115			—			263
Restructuring-related charges	32			1			71			—			104
Total operating expenses	2,487			57			4,089			(395		)	6,238
Income (loss) from operations	(194		)	82			465			—			353
Interest expense	(177		)	(1		)	(75		)	72			(181		)
Other (expense) income, net	38			(4		)	3			(72		)	(35		)
Income (loss) from continuing operations before income taxes	(333		)	77			393			—			137
Income tax expense (benefit)	(173		)	68			57			—			(48		)
Income (loss) from continuing operations before earnings in subsidiaries	(160		)	9			336			—			185
Equity in earnings of consolidated subsidiaries	341			392			—			(733		)	—
Income (loss) from continuing operations	181			401			336			(733		)	185
Income (loss) from discontinued operations, net of tax	10			—			—			—			10
Net income (loss)	$	191		$	401		$	336		$	(733	)	$	195
Net income (loss) attributable to noncontrolling interests	—			—			4			—			4
Net income (loss) attributable to NCR	$	191		$	401		$	332		$	(733	)	$	191
Total comprehensive income (loss)	93			319			229			(547		)	94
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			1			—			1
Comprehensive income (loss) attributable to NCR common stockholders	$	93		$	319		$	228		$	(547	)	$	93



Consolidating Statements of Operations and Comprehensive Income (Loss)
For the year ended December 31, 2013

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	1,107		$	85		$	1,977		$	(257	)	$	2,912
Service revenue	1,232			24			1,955			—			3,211
Total revenue	2,339			109			3,932			(257		)	6,123
Cost of products	844			17			1,548			(257		)	2,152
Cost of services	880			9			1,342			—			2,231
Selling, general and administrative expenses	467			5			399			—			871
Research and development expenses	94			—			109			—			203
Total operating expenses	2,285			31			3,398			(257		)	5,457
Income (loss) from operations	54			78			534			—			666
Interest expense	(104		)	2			(6		)	5			(103		)
Other (expense) income, net	(12		)	(8		)	16			(5		)	(9		)
Income (loss) from continuing operations before income taxes	(62		)	72			544			—			554
Income tax expense (benefit)	(23		)	25			96			—			98
Income (loss) from continuing operations before earnings in subsidiaries	(39		)	47			448			—			456
Equity in earnings of consolidated subsidiaries	491			409			—			(900		)	—
Income (loss) from continuing operations	452			456			448			(900		)	456
Income (loss) from discontinued operations, net of tax	(9		)	—			—			—			(9		)
Net income (loss)	$	443		$	456		$	448		$	(900	)	$	447
Net income (loss) attributable to noncontrolling interests	—			—			4			—			4
Net income (loss) attributable to NCR	$	443		$	456		$	444		$	(900	)	$	443
Total comprehensive income (loss)	442			331			437			(771		)	439
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income (loss) attributable to NCR common stockholders	$	442		$	331		$	440		$	(771	)	$	442



Consolidating Balance Sheet
December 31, 2015

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	12	$	20	$	296	$	—		$	328
Accounts receivable, net	44		33		1,174		—			1,251
Inventories	233		6		404		—			643
Due from affiliates	654		1,325		300		(2,279		)	—
Other current assets	126		31		209		(39		)	327
Total current assets	1,069		1,415		2,383		(2,318		)	2,549
Property, plant and equipment, net	137		1		184		—			322
Goodwill	860		—		1,873		—			2,733
Intangibles, net	161		—		637		—			798
Prepaid pension cost	—		—		130		—			130
Deferred income taxes	486		152		84		(140		)	582
Investments in subsidiaries	3,349		1,449		—		(4,798		)	—
Due from affiliates	1,072		17		38		(1,127		)	—
Other assets	362		55		104		—			521
Total assets	$	7,496	$	3,089	$	5,433	$	(8,383	)	$	7,635

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	4	$	—	$	9	$	—		$	13
Accounts payable	280		—		377		—			657
Payroll and benefits liabilities	93		1		95		—			189
Deferred service revenue and customer deposits	154		24		298		—			476
Due to affiliates	1,499		137		643		(2,279		)	—
Other current liabilities	205		3		277		(39		)	446
Total current liabilities	2,235		165		1,699		(2,318		)	1,781
Long-term debt	3,229		—		10		—			3,239
Pension and indemnity plan liabilities	433		—		263		—			696
Postretirement and postemployment benefits liabilities	27		3		103		—			133
Income tax accruals	4		13		150		—			167
Due to affiliates	18		37		1,072		(1,127		)	—
Other liabilities	32		—		187		(140		)	79
Total liabilities	5,978		218		3,484		(3,585		)	6,095
Redeemable noncontrolling interest	—		—		16		—			16
Series A convertible preferred stock	798		—		—		—			798
Stockholders’ equity
Total NCR stockholders’ equity	720		2,871		1,927		(4,798		)	720
Noncontrolling interests in subsidiaries	—		—		6		—			6
Total stockholders’ equity	720		2,871		1,933		(4,798		)	726
Total liabilities and stockholders’ equity	$	7,496	$	3,089	$	5,433	$	(8,383	)	$	7,635



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	334		49		113		—			496
Total assets	$	7,849	$	3,259	$	6,549	$	(9,091	)	$	8,566

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	3,413		—		18		—			3,431
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	5,978		206		4,285		(3,801		)	6,668
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	$	7,849	$	3,259	$	6,549	$	(9,091	)	$	8,566



Consolidating Statement of Cash Flows
For the year ended December 31, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	348		$	(335	)	$	748		$	(80	)	$	681
Investing activities
Expenditures for property, plant and equipment	(22		)	—			(57		)	—			(79		)
Proceeds from the sale of property, plant and equipment	—			—			19			—			19
Additions to capitalized software	(91		)	—			(59		)	—			(150		)
Proceeds from (payments of) intercompany notes	272			347			—			(619		)	—
Investments in equity affiliates	(1		)							1			—
Other investing activities, net	(6		)	—			7			—			1
Net cash provided by (used in) investing activities	152			347			(90		)	(618		)	(209		)
Financing activities
Short term borrowings, net	3			—			5			—			8
Payments on term credit facilities	(376		)	—			(7		)	—			(383		)
Payments on revolving credit facilities	(729		)	—			(965		)	—			(1,694		)
Borrowings on revolving credit facilities	829			—			869			—			1,698
Tax withholding payments on behalf of employees	(16		)	—			—			—			(16		)
Proceeds from employee stock plans	15			—			—			—			15
Dividend distribution to consolidated subsidiaries	—			—			(80		)	80			—
Series A convertible preferred stock issuance	794			—			—			—			794
Tender offer share repurchase	(1,005		)	—			—			—			(1,005		)
Equity contribution	—			—			1			(1		)	—
Borrowings (repayments) of intercompany notes	—			—			(619		)	619			—
Net cash provided by (used in) financing activities	(485		)	—			(796		)	698			(583		)
Cash flows from discontinued operations
Net cash used in discontinued operations operating activities	(43		)	—			—			—			(43		)
Effect of exchange rate changes on cash and cash equivalents	—			(1		)	(28		)	—			(29		)
(Decrease) increase in cash and cash equivalents	(28		)	11			(166		)	—			(183		)
Cash and cash equivalents at beginning of period	40			9			462			—			511
Cash and cash equivalents at end of period	$	12		$	20		$	296		$	—		$	328



Consolidating Statement of Cash Flows
For the year ended December 31, 2014

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	401		$	(108	)	$	331		$	(100	)	$	524
Investing activities
Expenditures for property, plant and equipment	(51		)	—			(67		)	—			(118		)
Proceeds from sales of property, plant and equipment	—			—			1			—			1
Additions to capitalized software	(82		)	—			(58		)	—			(140		)
Business acquisitions, net	(1,647		)	—			—			—			(1,647		)
Changes in restricted cash	1,114			—			—			—			1,114
Proceeds from (payments of) intercompany notes	42			106			—			(148		)	—
Investments in equity affiliates	(2		)	—			—			2			—
Other investing activities, net	(5		)	—			7			—			2
Net cash provided by (used in) investing activities	(631		)	106			(117		)	(146		)	(788		)
Financing activities
Payments on term credit facilities	(34		)	—			(3		)	—			(37		)
Borrowings on term credit facilities	250			—			—			—			250
Payments on revolving credit facilities	(946		)	—			(104		)	—			(1,050		)
Borrowings on revolving credit facilities	946			—			200			—			1,146
Debt issuance costs	(4		)	—			(1		)	—			(5		)
Tax withholding payments on behalf of employees	(28		)	—			—			—			(28		)
Proceeds from employee stock plans	13			—			—			—			13
Other financing activities	(1		)	—			(4		)	—			(5		)
Dividend distribution to consolidated subsidiaries	—			—			(100		)	100			—
Equity contribution	—			—			2			(2		)	—
Borrowings (repayments) of intercompany notes	—			—			(148		)	148			—
Net cash provided by (used in) financing activities	196			—			(158		)	246			284
Cash flows from discontinued operations
Net cash used in discontinued operations operating activities	(1		)	—			—			—			(1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(36		)	—			(36		)
Increase (decrease) in cash and cash equivalents	(35		)	(2		)	20			—			(17		)
Cash and cash equivalents at beginning of period	75			11			442			—			528
Cash and cash equivalents at end of period	$	40		$	9		$	462		$	—		$	511



Consolidating Statement of Cash Flows
For the year ended December 31, 2013

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(7	)	$	15		$	312		$	(39	)	$	281
Investing activities
Expenditures for property, plant and equipment	(35		)	(6		)	(75		)	—			(116		)
Proceeds from sales of property, plant and equipment	2			—			8			—			10
Additions to capitalized software	(81		)	—			(29		)	—			(110		)
Business acquisitions, net	(207		)	—			(756		)	183			(780		)
Dispositions	—			—			183			(183		)	—
Changes in restricted cash	(1,114		)	—			—			—			(1,114		)
Proceeds from (payments of) intercompany notes	(54		)	—			—			54			—
Investments in equity affiliates	(308		)	(33		)	—			341			—
Other investing activities, net	5			—			—			—			5
Net cash provided by (used in) investing activities	(1,792		)	(39		)	(669		)	395			(2,105		)
Financing activities
Short term borrowings, net	—			—			(1		)	—			(1		)
Payments on revolving credit facilities	(35		)	—			—			—			(35		)
Borrowings on term credit facilities	300			—			29			—			329
Payments on revolving credit facilities	(1,009		)	—			—			—			(1,009		)
Borrowings on revolving credit facilities	1,009			—			—			—			1,009
Proceeds from bond offering	1,100			—			—			—			1,100
Debt issuance costs	(36		)	—			—			—			(36		)
Tax withholding payments on behalf of employees	(30		)	—			—			—			(30		)
Proceeds from employee stock plans	57			—			—			—			57
Other financing activities	—			—			(3		)	—			(3		)
Dividend distribution to consolidated subsidiaries	—			—			(39		)	39			—
Equity contribution	—			30			311			(341		)	—
Borrowings (repayments) of intercompany notes	—			—			54			(54		)	—
Purchase of non-controlling interest	—			—			(24		)	—			(24		)
Net cash provided by (used in) financing activities	1,356			30			327			(356		)	1,357
Cash flows from discontinued operations
Net cash used in discontinued operations operating activities	(52		)	—			—			—			(52		)
Effect of exchange rate changes on cash and cash equivalents	(1		)	(1		)	(20		)	—			(22		)
Increase (decrease) in cash and cash equivalents	(496		)	5			(50		)	—			(541		)
Cash and cash equivalents at beginning of period	571			6			492			—			1,069
Cash and cash equivalents at end of period	$	75		$	11		$	442		$	—		$	528