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 3, "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. As of January 1, 2016, certain non-guarantor subsidiaries were acquired by, and merged into, the parent issuer. Accordingly, all prior period condensed consolidating guarantor financial statements were updated to reflect the mergers.



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended March 31, 2016

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	231		$	16		$	365		$	(64	)	$	548
Service revenue	377			8			511			—			896
Total revenue	608			24			876			(64		)	1,444
Cost of products	179			7			320			(64		)	442
Cost of services	284			3			335			—			622
Selling, general and administrative expenses	120			1			103			—			224
Research and development expenses	28			—			25			—			53
Restructuring-related charges	2			—			—			—			2
Total operating expenses	613			11			783			(64		)	1,343
Income (loss) from operations	(5		)	13			93			—			101
Interest expense	(45		)	—			(18		)	17			(46		)
Other (expense) income, net	11			(5		)	1			(17		)	(10		)
Income (loss) from continuing operations before income taxes	(39		)	8			76			—			45
Income tax expense (benefit)	(21		)	5			29			—			13
Income (loss) from continuing operations before earnings in subsidiaries	(18		)	3			47			—			32
Equity in earnings of consolidated subsidiaries	50			48			—			(98		)	—
Income (loss) from continuing operations	32			51			47			(98		)	32
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	32		$	51		$	47		$	(98	)	$	32
Net income (loss) attributable to noncontrolling interests	—			—			—			—			—
Net income (loss) attributable to NCR	$	32		$	51		$	47		$	(98	)	$	32
Total comprehensive income (loss)	24			35			28			(67		)	20
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Comprehensive income (loss) attributable to NCR common stockholders	$	24		$	35		$	32		$	(67	)	$	24



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended March 31, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	263		$	19	$	411		$	(89	)	$	604
Service revenue	344			7		521			—			872
Total revenue	607			26		932			(89		)	1,476
Cost of products	215			10		347			(89		)	483
Cost of services	248			2		353			—			603
Selling, general and administrative expenses	112			2		111			—			225
Research and development expenses	22			—		33			—			55
Restructuring-related charges	4			—		11			—			15
Total operating expenses	601			14		855			(89		)	1,381
Income (loss) from operations	6			12		77			—			95
Interest expense	(43		)	—		(19		)	18			(44		)
Other (expense) income, net	8			—		3			(18		)	(7		)
Income (loss) from continuing operations before income taxes	(29		)	12		61			—			44
Income tax expense (benefit)	(3		)	5		—			—			2
Income (loss) from continuing operations before earnings in subsidiaries	(26		)	7		61			—			42
Equity in earnings of consolidated subsidiaries	66			56		—			(122		)	—
Income (loss) from continuing operations	40			63		61			(122		)	42
Income (loss) from discontinued operations, net of tax	—			—		—			—			—
Net income (loss)	$	40		$	63	$	61		$	(122	)	$	42
Net income (loss) attributable to noncontrolling interests	—			—		2			—			2
Net income (loss) attributable to NCR	$	40		$	63	$	59		$	(122	)	$	40
Total comprehensive income (loss)	18			28		25			(54		)	17
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Comprehensive income (loss) attributable to NCR common stockholders	$	18		$	28	$	26		$	(54	)	$	18



Condensed Consolidating Balance Sheet
March 31, 2016

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	16	$	22	$	295	$	—		$	333
Accounts receivable, net	46		32		1,228		—			1,306
Inventories	256		10		459		—			725
Due from affiliates	633		1,331		476		(2,440		)	—
Other current assets	134		34		216		(43		)	341
Total current assets	1,085		1,429		2,674		(2,483		)	2,705
Property, plant and equipment, net	132		1		169		—			302
Goodwill	988		—		1,754		—			2,742
Intangibles, net	204		—		565		—			769
Prepaid pension cost	—		—		131		—			131
Deferred income taxes	473		152		81		(129		)	577
Investments in subsidiaries	3,195		1,499		—		(4,694		)	—
Due from affiliates	1,083		17		39		(1,139		)	—
Other assets	372		56		98		—			526
Total assets	$	7,532	$	3,154	$	5,511	$	(8,445	)	$	7,752

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	46	$	—	$	204	$	—		$	250
Accounts payable	257		—		392		—			649
Payroll and benefits liabilities	62		1		111		—			174
Deferred service revenue and customer deposits	217		11		281		—			509
Due to affiliates	1,641		142		657		(2,440		)	—
Other current liabilities	171		4		270		(43		)	402
Total current liabilities	2,394		158		1,915		(2,483		)	1,984
Long-term debt	3,259		—		10		—			3,269
Pension and indemnity plan liabilities	436		—		266		—			702
Postretirement and postemployment benefits liabilities	25		2		105		—			132
Income tax accruals	14		14		141		—			169
Due to affiliates	17		39		1,083		(1,139		)	—
Other liabilities	48		12		208		(129		)	139
Total liabilities	6,193		225		3,728		(3,751		)	6,395
Redeemable noncontrolling interest	—		—		10		—			10
Series A convertible preferred stock	809		—		—		—			809
Stockholders’ equity
Total NCR stockholders’ equity	530		2,929		1,765		(4,694		)	530
Noncontrolling interests in subsidiaries	—		—		8		—			8
Total stockholders’ equity	530		2,929		1,773		(4,694		)	538
Total liabilities and stockholders’ equity	$	7,532	$	3,154	$	5,511	$	(8,445	)	$	7,752



Condensed Consolidating Balance Sheet
December 31, 2015

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	15	$	20	293		$	—		$	328
Accounts receivable, net	94		33		1,124		—			1,251
Inventories	233		6		404		—			643
Due from affiliates	571		1,325		286		(2,182		)	—
Other current assets	129		31		206		(39		)	327
Total current assets	1,042		1,415		2,313		(2,221		)	2,549
Property, plant and equipment, net	140		1		181		—			322
Goodwill	979		—		1,754		—			2,733
Intangibles, net	212		—		586		—			798
Prepaid pension cost	—		—		130		—			130
Deferred income taxes	475		152		84		(129		)	582
Investments in subsidiaries	3,173		1,449		—		(4,622		)	—
Due from affiliates	1,072		17		38		(1,127		)	—
Other assets	362		55		104		—			521
Total assets	$	7,455	$	3,089	$	5,190	$	(8,099	)	$	7,635

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	4	$	—	$	9	$	—		$	13
Accounts payable	280		—		377		—			657
Payroll and benefits liabilities	94		1		94		—			189
Deferred service revenue and customer deposits	180		24		272		—			476
Due to affiliates	1,405		137		640		(2,182		)	—
Other current liabilities	215		3		267		(39		)	446
Total current liabilities	2,178		165		1,659		(2,221		)	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	14		13		140		—			167
Due to affiliates	18		37		1,072		(1,127		)	—
Other liabilities	38		—		170		(129		)	79
Total liabilities	5,937		218		3,417		(3,477		)	6,095
Redeemable noncontrolling interest	—		—		16		—			16
Series A convertible preferred stock	798		—		—		—			798
Stockholders’ equity
Total NCR stockholders’ equity	720		2,871		1,751		(4,622		)	720
Noncontrolling interests in subsidiaries	—		—		6		—			6
Total stockholders’ equity	720		2,871		1,757		(4,622		)	726
Total liabilities and stockholders’ equity	$	7,455	$	3,089	$	5,190	$	(8,099	)	$	7,635



Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 2016

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	184		$	(26	)	$	(135	)	$	—		$	23
Investing activities
Expenditures for property, plant and equipment	(3		)	—			(6		)	—			(9		)
Additions to capitalized software	(18		)	—			(13		)	—			(31		)
Proceeds from (payments of) intercompany notes	17			30			—			(47		)	—
Investments in equity affiliates	(6		)	—			—			6			—
Other investing activities, net	(8		)	—			—			—			(8		)
Net cash provided by (used in) investing activities	(18		)	30			(19		)	(41		)	(48		)
Financing activities
Short term borrowings, net	(4		)	—			(5		)	—			(9		)
Payments on term credit facilities	(56		)	—			—			—			(56		)
Payments on revolving credit facilities	(100		)	—			(80		)	—			(180		)
Borrowings on revolving credit facilities	231			—			280			—			511
Repurchase of common shares	(213		)	—			—			—			(213		)
Debt issuance cost	(8		)	—			—			—			(8		)
Proceeds from employee stock plans	3			—			—			—			3
Equity contribution	—			—			6			(6		)	—
Borrowings (repayments) of intercompany notes	—			—			(47		)	47			—
Tax withholding payments on behalf of employees	(6		)	—			—			—			(6		)
Net cash provided by (used in) financing activities	(153		)	—			154			41			42
Cash flows from discontinued operations
Net cash (used in) provided by operating activities	(12		)	—			—			—			(12		)
Effect of exchange rate changes on cash and cash equivalents	—			(2		)	2			—			—
Increase (decrease) in cash and cash equivalents	1			2			2			—			5
Cash and cash equivalents at beginning of period	15			20			293			—			328
Cash and cash equivalents at end of period	$	16		$	22		$	295		$	—		$	333



Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 2015

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(14	)	$	(2	)	$	136		$	(41	)	$	79
Investing activities
Expenditures for property, plant and equipment	(4		)	—			(9		)	—			(13		)
Additions to capitalized software	(21		)	—			(17		)	—			(38		)
Proceeds from (payments of) intercompany notes	52			10			—			(62		)	—
Other investing activities, net	(4		)	—			(2		)	—			(6		)
Net cash provided by (used in) investing activities	23			10			(28		)	(62		)	(57		)
Financing activities
Short term borrowings, net	—			—			2			—			2
Payments on term credit facilities	(17		)	—			(2		)	—			(19		)
Payments on revolving credit facilities	(98		)	—			(175		)	—			(273		)
Borrowings on revolving credit facilities	98			—			150			—			248
Proceeds from employee stock plans	6			—			—			—			6
Dividend distribution to consolidated subsidiaries	—			—			(41		)	41			—
Borrowings (repayments) of intercompany notes	—			—			(62		)	62			—
Tax withholding payments on behalf of employees	(9		)	—			—			—			(9		)
Net cash provided by (used in) financing activities	(20		)	—			(128		)	103			(45		)
Cash flows from discontinued operations
Net cash (used in) provided by operating activities	(4		)	—			—			—			(4		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(22		)	—			(22		)
Increase (decrease) in cash and cash equivalents	(15		)	8			(42		)	—			(49		)
Cash and cash equivalents at beginning of period	44			9			458			—			511
Cash and cash equivalents at end of period	$	29		$	17		$	416		$	—		$	462