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Condensed Consolidating Supplemental Guarantor Information (Notes)
12 Months Ended
Dec. 31, 2016
Condensed Consolidating Supplemental Guarantor Information [Abstract]  
Condensed Consolidating Supplemental Guarantor Information
16. GUARANTOR FINANCIAL STATEMENTS

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 6, "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. 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.
 





Consolidating Statements of Operations and Comprehensive Income (Loss)
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
(in millions)
Parent Issuer
 
Guarantor Subsidiary
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Product revenue
$
1,293

 
$
111

 
$
1,768

 
$
(435
)
 
$
2,737

Service revenue
1,615

 
36

 
2,155

 

 
3,806

Total revenue
2,908

 
147

 
3,923

 
(435
)
 
6,543

Cost of products
1,024

 
50

 
1,463

 
(435
)
 
2,102

Cost of services
1,170

 
12

 
1,477

 

 
2,659

Selling, general and administrative expenses
484

 
4

 
438

 

 
926

Research and development expenses
139

 

 
103

 

 
242

Restructuring-related charges
11

 

 
4

 

 
15

Total operating expenses
2,828

 
66

 
3,485

 
(435
)
 
5,944

Income (loss) from operations
80

 
81

 
438

 

 
599

Interest expense
(165
)
 

 
(74
)
 
69

 
(170
)
Other (expense) income, net
44

 
(23
)
 
(2
)
 
(69
)
 
(50
)
Income (loss) from continuing operations before income taxes
(41
)
 
58

 
362

 

 
379

Income tax expense (benefit)
(18
)
 
21

 
89

 

 
92

Income (loss) from continuing operations before earnings in subsidiaries
(23
)
 
37

 
273

 

 
287

Equity in earnings of consolidated subsidiaries
306

 
304

 

 
(610
)
 

Income (loss) from continuing operations
283

 
341

 
273

 
(610
)
 
287

Income (loss) from discontinued operations, net of tax
(13
)
 

 

 

 
(13
)
Net income (loss)
$
270

 
$
341

 
$
273

 
$
(610
)
 
$
274

Net income (loss) attributable to noncontrolling interests

 

 
4

 

 
4

Net income (loss) attributable to NCR
$
270

 
$
341

 
$
269

 
$
(610
)
 
$
270

Total comprehensive income (loss)
215

 
277

 
210

 
(488
)
 
214

Less comprehensive income (loss) attributable to noncontrolling interests

 

 
(1
)
 

 
(1
)
Comprehensive income (loss) attributable to NCR common stockholders
$
215

 
$
277

 
$
211

 
$
(488
)
 
$
215

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
$
1,189

 
$
105

 
$
2,339

 
$
(922
)
 
$
2,711

Service revenue
1,528

 
33

 
2,101

 

 
3,662

Total revenue
2,717

 
138

 
4,440

 
(922
)
 
6,373

Cost of products
904

 
43

 
2,047

 
(922
)
 
2,072

Cost of services
1,103

 
13

 
1,716

 

 
2,832

Selling, general and administrative expenses
501

 
4

 
537

 

 
1,042

Research and development expenses
102

 

 
128

 

 
230

Restructuring-related charges
32

 

 
30

 

 
62

Total operating expenses
2,642

 
60

 
4,458

 
(922
)
 
6,238

Income (loss) from operations
75

 
78

 
(18
)
 

 
135

Interest expense
(168
)
 

 
(78
)
 
73

 
(173
)
Other (expense) income, net
22

 
4

 
(10
)
 
(73
)
 
(57
)
Income (loss) from continuing operations before income taxes
(71
)
 
82

 
(106
)
 

 
(95
)
Income tax expense (benefit)
(33
)
 
52

 
36

 

 
55

Income (loss) from continuing operations before earnings in subsidiaries
(38
)
 
30

 
(142
)
 

 
(150
)
Equity in earnings of consolidated subsidiaries
(115
)
 
(161
)
 

 
276

 

Income (loss) from continuing operations
(153
)
 
(131
)
 
(142
)
 
276

 
(150
)
Income (loss) from discontinued operations, net of tax
(25
)
 

 
1

 

 
(24
)
Net income (loss)
$
(178
)
 
$
(131
)
 
$
(141
)
 
$
276

 
$
(174
)
Net income (loss) attributable to noncontrolling interests

 

 
4

 

 
4

Net income (loss) attributable to NCR
$
(178
)
 
$
(131
)
 
$
(145
)
 
$
276

 
$
(178
)
Total comprehensive income (loss)
(192
)
 
(154
)
 
(156
)
 
311

 
(191
)
Less comprehensive income (loss) attributable to noncontrolling interests

 

 
1

 

 
1

Comprehensive income (loss) attributable to NCR common stockholders
$
(192
)
 
$
(154
)
 
$
(157
)
 
$
311

 
$
(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
$
1,103

 
$
111

 
$
2,099

 
$
(421
)
 
$
2,892

Service revenue
1,445

 
28

 
2,226

 

 
3,699

Total revenue
2,548

 
139

 
4,325

 
(421
)
 
6,591

Cost of products
867

 
41

 
1,666

 
(421
)
 
2,153

Cost of services
1,119

 
13

 
1,574

 

 
2,706

Selling, general and administrative expenses
519

 
2

 
491

 

 
1,012

Research and development expenses
161

 

 
102

 

 
263

Restructuring-related charges
32

 
1

 
71

 

 
104

Total operating expenses
2,698

 
57

 
3,904

 
(421
)
 
6,238

Income (loss) from operations
(150
)
 
82

 
421

 

 
353

Interest expense
(177
)
 
(1
)
 
(75
)
 
72

 
(181
)
Other (expense) income, net
39

 
(4
)
 
2

 
(72
)
 
(35
)
Income (loss) from continuing operations before income taxes
(288
)
 
77

 
348

 

 
137

Income tax expense (benefit)
(169
)
 
68

 
53

 

 
(48
)
Income (loss) from continuing operations before earnings in subsidiaries
(119
)
 
9

 
295

 

 
185

Equity in earnings of consolidated subsidiaries
300

 
373

 

 
(673
)
 

Income (loss) from continuing operations
181

 
382

 
295

 
(673
)
 
185

Income (loss) from discontinued operations, net of tax
10

 

 

 

 
10

Net income (loss)
$
191

 
$
382

 
$
295

 
$
(673
)
 
$
195

Net income (loss) attributable to noncontrolling interests

 

 
4

 

 
4

Net income (loss) attributable to NCR
$
191

 
$
382

 
$
291

 
$
(673
)
 
$
191

Total comprehensive income (loss)
93

 
300

 
188

 
(487
)
 
94

Less comprehensive income (loss) attributable to noncontrolling interests

 

 
1

 

 
1

Comprehensive income (loss) attributable to NCR common stockholders
$
93

 
$
300

 
$
187

 
$
(487
)
 
$
93




Consolidating Balance Sheet
December 31, 2016
 
 
 
 
 
 
 
 
 
 
(in millions)
Parent Issuer
 
Guarantor Subsidiary
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
65

 
$
12

 
$
421

 
$

 
$
498

Accounts receivable, net
64

 
25

 
1,193

 

 
1,282

Inventories
272

 
13

 
414

 

 
699

Due from affiliates
680

 
1,509

 
400

 
(2,589
)
 

Other current assets
140

 
37

 
162

 
(61
)
 
278

Total current assets
1,221

 
1,596

 
2,590

 
(2,650
)
 
2,757

Property, plant and equipment, net
129

 

 
158

 

 
287

Goodwill
988

 

 
1,739

 

 
2,727

Intangibles, net
176

 

 
496

 

 
672

Prepaid pension cost

 

 
94

 

 
94

Deferred income taxes
499

 
98

 
82

 
(104
)
 
575

Investments in subsidiaries
3,275

 
2,822

 

 
(6,097
)
 

Due from affiliates
1,053

 

 
35

 
(1,088
)
 

Other assets
405

 
56

 
100

 

 
561

Total assets
$
7,746

 
$
4,572

 
$
5,294

 
$
(9,939
)
 
$
7,673

 
 
 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Short-term borrowings
$
46

 
$

 
$
4

 
$

 
$
50

Accounts payable
310

 
2

 
469

 

 
781

Payroll and benefits liabilities
129

 

 
105

 

 
234

Deferred service revenue and customer deposits
193

 
5

 
270

 

 
468

Due to affiliates
1,736

 
154

 
699

 
(2,589
)
 

Other current liabilities
224

 
6

 
263

 
(61
)
 
432

Total current liabilities
2,638

 
167

 
1,810

 
(2,650
)
 
1,965

Long-term debt
2,998

 

 
3

 

 
3,001

Pension and indemnity plan liabilities
473

 

 
266

 

 
739

Postretirement and postemployment benefits liabilities
24

 
3

 
100

 

 
127

Income tax accruals
17

 
4

 
121

 

 
142

Due to affiliates

 
35

 
1,053

 
(1,088
)
 

Other liabilities
54

 
5

 
183

 
(104
)
 
138

Total liabilities
6,204

 
214

 
3,536

 
(3,842
)
 
6,112

Redeemable noncontrolling interest

 

 
15

 

 
15

Series A convertible preferred stock
847

 

 

 

 
847

Stockholders’ equity


 


 


 


 


Total NCR stockholders’ equity
695

 
4,358

 
1,739

 
(6,097
)
 
695

Noncontrolling interests in subsidiaries

 

 
4

 

 
4

Total stockholders’ equity
695

 
4,358

 
1,743

 
(6,097
)
 
699

Total liabilities and stockholders’ equity
$
7,746

 
$
4,572

 
$
5,294

 
$
(9,939
)
 
$
7,673

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
99

 
33

 
1,119

 

 
1,251

Inventories
235

 
6

 
402

 

 
643

Due from affiliates
573

 
1,325

 
288

 
(2,186
)
 

Other current assets
132

 
31

 
203

 
(39
)
 
327

Total current assets
1,054

 
1,415

 
2,305

 
(2,225
)
 
2,549

Property, plant and equipment, net
140

 
1

 
181

 

 
322

Goodwill
980

 

 
1,753

 

 
2,733

Intangibles, net
212

 

 
586

 

 
798

Prepaid pension cost

 

 
130

 

 
130

Deferred income taxes
475

 
152

 
84

 
(129
)
 
582

Investments in subsidiaries
3,172

 
2,729

 

 
(5,901
)
 

Due from affiliates
1,072

 
17

 
38

 
(1,127
)
 

Other assets
362

 
55

 
104

 

 
521

Total assets
$
7,467

 
$
4,369

 
$
5,181

 
$
(9,382
)
 
$
7,635

 
 
 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
Short-term borrowings
$
4

 
$

 
$
9

 
$

 
$
13

Accounts payable
281

 

 
376

 

 
657

Payroll and benefits liabilities
95

 
1

 
93

 

 
189

Deferred service revenue and customer deposits
183

 
24

 
269

 

 
476

Due to affiliates
1,408

 
137

 
641

 
(2,186
)
 

Other current liabilities
216

 
3

 
266

 
(39
)
 
446

Total current liabilities
2,187

 
165

 
1,654

 
(2,225
)
 
1,781

Long-term debt
3,229

 

 
10

 

 
3,239

Pension and indemnity plan liabilities
436

 

 
260

 

 
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
5,949

 
218

 
3,409

 
(3,481
)
 
6,095

Redeemable noncontrolling interest

 

 
16

 

 
16

Series A Convertible Preferred Stock
798

 

 

 

 
798

Stockholders’ equity

 

 

 

 

Total NCR stockholders’ equity
720

 
4,151

 
1,750

 
(5,901
)
 
720

Noncontrolling interests in subsidiaries

 

 
6

 

 
6

Total stockholders’ equity
720

 
4,151

 
1,756

 
(5,901
)
 
726

Total liabilities and stockholders’ equity
$
7,467

 
$
4,369

 
$
5,181

 
$
(9,382
)
 
$
7,635








Consolidating Statement of Cash Flows
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
(in millions)
Parent Issuer
 
Guarantor Subsidiary
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by (used in) operating activities
$
272

 
$
(160
)
 
$
785

 
$
(3
)
 
$
894

Investing activities
 
 
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
(31
)
 

 
(42
)
 

 
(73
)
Proceeds from the sale of property, plant and equipment

 

 

 

 

Additions to capitalized software
(95
)
 

 
(59
)
 

 
(154
)
Proceeds from (payments of) intercompany notes
409

 
115

 

 
(524
)
 

Proceeds from divestitures
22

 

 
25

 

 
47

Investments in equity affiliates
(9
)
 
50

 

 
(41
)
 

Other investing activities, net
(9
)
 

 

 

 
(9
)
Net cash provided by (used in) investing activities
287

 
165

 
(76
)
 
(565
)
 
(189
)
Financing activities
 
 
 
 
 
 
 
 
 
Short term borrowings, net
(4
)
 

 
(4
)
 

 
(8
)
Payments on term credit facilities
(89
)
 

 
(8
)
 

 
(97
)
Payments on revolving credit facilities
(1,151
)
 

 
(280
)
 

 
(1,431
)
Borrowings on revolving credit facilities
1,051

 

 
280

 

 
1,331

Debt issuance costs
(9
)
 

 

 

 
(9
)
Tax withholding payments on behalf of employees
(16
)
 

 

 

 
(16
)
Proceeds from employee stock plans
15

 

 

 

 
15

Other financing activities

 

 
(2
)
 

 
(2
)
Dividend distribution to consolidated subsidiaries

 

 
(53
)
 
53

 

Repurchases of Company common stock
(250
)
 

 

 

 
(250
)
Equity contribution

 

 
9

 
(9
)
 

Borrowings (repayments) of intercompany notes
(17
)
 

 
(507
)
 
524

 

Net cash provided by (used in) financing activities
(470
)
 

 
(565
)
 
568

 
(467
)
Cash flows from discontinued operations
 
 
 
 
 
 
 
 
 
Net cash used in discontinued operations operating activities
(39
)
 

 

 

 
(39
)
Effect of exchange rate changes on cash and cash equivalents

 
(13
)
 
(16
)
 

 
(29
)
(Decrease) increase in cash and cash equivalents
50

 
(8
)
 
128

 

 
170

Cash and cash equivalents at beginning of period
15

 
20

 
293

 

 
328

Cash and cash equivalents at end of period
$
65

 
$
12

 
$
421

 
$

 
$
498



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
$
346

 
$
(335
)
 
$
747

 
$
(77
)
 
$
681

Investing activities
 
 
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
(22
)
 

 
(57
)
 

 
(79
)
Proceeds from sales 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

 

 
(77
)
 
77

 

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
)
 

 
(793
)
 
695

 
(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
)
Increase (decrease) in cash and cash equivalents
(30
)
 
11

 
(164
)
 

 
(183
)
Cash and cash equivalents at beginning of period
45

 
9

 
457

 

 
511

Cash and cash equivalents at end of period
$
15

 
$
20

 
$
293

 
$

 
$
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
$
405

 
$
(108
)
 
$
322

 
$
(95
)
 
$
524

Investing activities
 
 
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
(54
)
 

 
(64
)
 

 
(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
(634
)
 
106

 
(114
)
 
(146
)
 
(788
)
Financing activities
 
 
 
 
 
 
 
 
 
Payments on revolving 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

 

 
(95
)
 
95

 

Equity contribution

 

 
2

 
(2
)
 

Borrowings (repayments) of intercompany notes

 

 
(148
)
 
148

 

Net cash provided by (used in) financing activities
196

 

 
(153
)
 
241

 
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
(34
)
 
(2
)
 
19

 

 
(17
)
Cash and cash equivalents at beginning of period
79

 
11

 
438

 

 
528

Cash and cash equivalents at end of period
$
45

 
$
9

 
$
457

 
$

 
$
511