17. 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.



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended June 30, 2017

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	327		$	13		$	338		$	(60	)	$	618
Service revenue	422			7			546			—			975
Total revenue	749			20			884			(60		)	1,593
Cost of products	256			9			273			(60		)	478
Cost of services	291			3			358			—			652
Selling, general and administrative expenses	116			1			110			—			227
Research and development expenses	34			—			24			—			58
Total operating expenses	697			13			765			(60		)	1,415
Income (loss) from operations	52			7			119			—			178
Interest expense	(39		)	—			(19		)	17			(41		)
Other (expense) income, net	11			(1		)	—			(17		)	(7		)
Income (loss) from continuing operations before income taxes	24			6			100			—			130
Income tax expense (benefit)	10			2			21			—			33
Income (loss) from continuing operations before earnings in subsidiaries	14			4			79			—			97
Equity in earnings of consolidated subsidiaries	83			90			—			(173		)	—
Income (loss) from continuing operations	97			94			79			(173		)	97
Income (loss) from discontinued operations, net of tax	5			—			—			—			5
Net income (loss)	$	102		$	94		$	79		$	(173	)	$	102
Net income (loss) attributable to noncontrolling interests	—			—			—			—			—
Net income (loss) attributable to NCR	$	102		$	94		$	79		$	(173	)	$	102
Total comprehensive income (loss)	99			107			76			(183		)	99
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			—			—			—
Comprehensive income (loss) attributable to NCR common stockholders	$	99		$	107		$	76		$	(183	)	$	99



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended June 30, 2016

(in millions)	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	318		$	39	$	425		$	(106	)	$	676
Service revenue	395			9		540			—			944
Total revenue	713			48		965			(106		)	1,620
Cost of products	249			9		365			(106		)	517
Cost of services	283			3		371			—			657
Selling, general and administrative expenses	128			1		100			—			229
Research and development expenses	29			—		21			—			50
Restructuring-related charges	4			—		—			—			4
Total operating expenses	693			13		857			(106		)	1,457
Income (loss) from operations	20			35		108			—			163
Interest expense	(41		)	—		(20		)	18			(43		)
Other (expense) income, net	14			—		(11		)	(18		)	(15		)
Income (loss) from continuing operations before income taxes	(7		)	35		77			—			105
Income tax expense (benefit)	—			20		11			—			31
Income (loss) from continuing operations before earnings in subsidiaries	(7		)	15		66			—			74
Equity in earnings of consolidated subsidiaries	83			92		—			(175		)	—
Income (loss) from continuing operations	76			107		66			(175		)	74
Income (loss) from discontinued operations, net of tax	—			—		—			—			—
Net income (loss)	$	76		$	107	$	66		$	(175	)	$	74
Net income (loss) attributable to noncontrolling interests	—			—		(2		)	—			(2		)
Net income (loss) attributable to NCR	$	76		$	107	$	68		$	(175	)	$	76
Total comprehensive income (loss)	58			66		47			(117		)	54
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		(4		)	—			(4		)
Comprehensive income (loss) attributable to NCR common stockholders	$	58		$	66	$	51		$	(117	)	$	58



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the six months ended June 30, 2017

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	610		$	53		$	673		$	(164	)	$	1,172
Service revenue	827			14			1,058			—			1,899
Total revenue	1,437			67			1,731			(164		)	3,071
Cost of products	464			22			580			(164		)	902
Cost of services	576			5			712			—			1,293
Selling, general and administrative expenses	234			2			220			—			456
Research and development expenses	60			—			65			—			125
Total operating expenses	1,334			29			1,577			(164		)	2,776
Income (loss) from operations	103			38			154			—			295
Interest expense	(78		)	—			(35		)	33			(80		)
Other (expense) income, net	9			(1		)	11			(33		)	(14		)
Income (loss) from continuing operations before income taxes	34			37			130			—			201
Income tax expense (benefit)	9			18			20			—			47
Income (loss) from continuing operations before earnings in subsidiaries	25			19			110			—			154
Equity in earnings of consolidated subsidiaries	129			97			—			(226		)	—
Income (loss) from continuing operations	154			116			110			(226		)	154
Income (loss) from discontinued operations, net of tax	5			—			—			—			5
Net income (loss)	$	159		$	116		$	110		$	(226	)	$	159
Net income (loss) attributable to noncontrolling interests	—			—			—			—			—
Net income (loss) attributable to NCR	$	159		$	116		$	110		$	(226	)	$	159
Total comprehensive income (loss)	174			141			119			(260		)	174
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			—			—			—
Comprehensive income (loss) attributable to NCR common stockholders	$	174		$	141		$	119		$	(260	)	$	174



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the six months ended June 30, 2016

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	552		$	55		$	787		$	(170	)	$	1,224
Service revenue	776			17			1,047			—			1,840
Total revenue	1,328			72			1,834			(170		)	3,064
Cost of products	430			16			683			(170		)	959
Cost of services	570			6			703			—			1,279
Selling, general and administrative expenses	250			2			201			—			453
Research and development expenses	57			—			46			—			103
Restructuring-related charges	6			—			—			—			6
Total operating expenses	1,313			24			1,633			(170		)	2,800
Income (loss) from operations	15			48			201			—			264
Interest expense	(86		)	—			(38		)	35			(89		)
Other (expense) income, net	25			(5		)	(10		)	(35		)	(25		)
Income (loss) from continuing operations before income taxes	(46		)	43			153			—			150
Income tax expense (benefit)	(21		)	25			40			—			44
Income (loss) from continuing operations before earnings in subsidiaries	(25		)	18			113			—			106
Equity in earnings of consolidated subsidiaries	133			133			—			(266		)	—
Income (loss) from continuing operations	108			151			113			(266		)	106
Income (loss) from discontinued operations, net of tax	—			—			—			—			—
Net income (loss)	$	108		$	151		$	113		$	(266	)	$	106
Net income (loss) attributable to noncontrolling interests	—			—			(2		)	—			(2		)
Net income (loss) attributable to NCR	$	108		$	151		$	115		$	(266	)	$	108
Total comprehensive income (loss)	82			101			75			(184		)	74
Less comprehensive income (loss) attributable to noncontrolling interests	—			—			(8		)	—			(8		)
Comprehensive income (loss) attributable to NCR common stockholders	$	82		$	101		$	83		$	(184	)	$	82



Condensed Consolidating Balance Sheet
June 30, 2017

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	18	$	10	$	349	$	—		$	377
Accounts receivable, net	59		19		1,243		—			1,321
Inventories	304		12		512		—			828
Due from affiliates	627		1,633		497		(2,757		)	—
Other current assets	131		40		181		(62		)	290
Total current assets	1,139		1,714		2,782		(2,819		)	2,816
Property, plant and equipment, net	153		—		151		—			304
Goodwill	988		—		1,748		—			2,736
Intangibles, net	162		—		456		—			618
Prepaid pension cost	—		—		107		—			107
Deferred income taxes	530		98		85		(102		)	611
Investments in subsidiaries	3,440		2,844		—		(6,284		)	—
Due from affiliates	1,019		1		38		(1,058		)	—
Other assets	426		57		92		—			575
Total assets	$	7,857	$	4,714	$	5,459	$	(10,263	)	$	7,767

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	52	$	—	$	215	$	—		$	267
Accounts payable	310		2		419		—			731
Payroll and benefits liabilities	105		—		100		—			205
Deferred service revenue and customer deposits	236		4		281		—			521
Due to affiliates	1,916		140		701		(2,757		)	—
Other current liabilities	200		3		248		(62		)	389
Total current liabilities	2,819		149		1,964		(2,819		)	2,113
Long-term debt	3,013		—		2		—			3,015
Pension and indemnity plan liabilities	481		—		283		—			764
Postretirement and postemployment benefits liabilities	24		3		100		—			127
Income tax accruals	17		2		121		—			140
Due to affiliates	—		38		1,020		(1,058		)	—
Other liabilities	75		5		183		(102		)	161
Total liabilities	6,429		197		3,673		(3,979		)	6,320
Redeemable noncontrolling interest	—		—		14		—			14
Series A convertible preferred stock	786		—		—		—			786
Stockholders’ equity
Total NCR stockholders’ equity	642		4,517		1,767		(6,284		)	642
Noncontrolling interests in subsidiaries	—		—		5		—			5
Total stockholders’ equity	642		4,517		1,772		(6,284		)	647
Total liabilities and stockholders’ equity	$	7,857	$	4,714	$	5,459	$	(10,263	)	$	7,767



Condensed 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



Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2017

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	258		$	(22	)	$	(92	)	$	(6	)	$	138
Investing activities
Expenditures for property, plant and equipment	(25		)	—			(18		)	—			(43		)
Additions to capitalized software	(57		)	—			(27		)	—			(84		)
Proceeds from (payments of) intercompany notes	133			20			—			(153		)	—
Investments in equity affiliates	(2		)	—			—			2			—
Other investing activities, net	(1		)	—			1			—			—
Net cash provided by (used in) investing activities	48			20			(44		)	(151		)	(127		)
Financing activities
Short term borrowings, net	2			—			11			—			13
Payments on term credit facilities	(23		)	—			(2		)	—			(25		)
Payments on revolving credit facilities	(575		)	—			(40		)	—			(615		)
Borrowings on revolving credit facilities	615			—			240			—			855
Repurchase of Company common stock	(350		)	—			—			—			(350		)
Proceeds from employee stock plans	8			—			—			—			8
Other financing activities	(1		)	—			—			—			(1		)
Equity contribution	—			—			2			(2		)	—
Dividend distribution to consolidated subsidiaries	—			—			(6		)	6			—
Borrowings (repayments) of intercompany notes	—			—			(153		)	153			—
Tax withholding payments on behalf of employees	(24		)	—			—			—			(24		)
Net cash provided by (used in) financing activities	(348		)	—			52			157			(139		)
Cash flows from discontinued operations
Net cash used in operating activities	(5		)	—			—			—			(5		)
Effect of exchange rate changes on cash and cash equivalents	—			—			12			—			12
Increase (decrease) in cash and cash equivalents	(47		)	(2		)	(72		)	—			(121		)
Cash and cash equivalents at beginning of period	65			12			421			—			498
Cash and cash equivalents at end of period	$	18		$	10		$	349		$	—		$	377



Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2016

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	206		$	(74	)	$	14		$	(2	)	$	144
Investing activities
Expenditures for property, plant and equipment	(9		)	—			(15		)	—			(24		)
Additions to capitalized software	(45		)	—			(29		)	—			(74		)
Proceeds from (payments of) intercompany notes	123			78			—			(201		)	—
Investments in equity affiliates	(9		)	—			—			9			—
Proceeds from divestiture	22			—			25			—			47
Other investing activities, net	(8		)	—			—			—			(8		)
Net cash provided by (used in) investing activities	74			78			(19		)	(192		)	(59		)
Financing activities
Short term borrowings, net	(4		)	—			5			—			1
Payments on term credit facilities	(67		)	—			(6		)	—			(73		)
Payments on revolving credit facilities	(351		)	—			(80		)	—			(431		)
Borrowings on revolving credit facilities	426			—			280			—			706
Repurchase of Company common stock	(250		)	—			—			—			(250		)
Debt issuance costs	(8		)	—			—			—			(8		)
Proceeds from employee stock plans	6			—			—			—			6
Equity contribution	—			—			9			(9		)	—
Dividend distribution to consolidated subsidiaries	—			—			(2		)	2			—
Borrowings (repayments) of intercompany notes	—			—			(201		)	201			—
Tax withholding payments on behalf of employees	(7		)	—			—			—			(7		)
Net cash provided by (used in) financing activities	(255		)	—			5			194			(56		)
Cash flows from discontinued operations
Net cash used in operating activities	(20		)	—			—			—			(20		)
Effect of exchange rate changes on cash and cash equivalents	—			(2		)	(3		)	—			(5		)
Increase (decrease) in cash and cash equivalents	5			2			(3		)	—			4
Cash and cash equivalents at beginning of period	15			20			293			—			328
Cash and cash equivalents at end of period	$	20		$	22		$	290		$	—		$	332