18. 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.



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended March 31, 2018

(in millions)	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	277		$	5	$	282		$	(38	)	$	526
Service revenue	517			8		466			—			991
Total revenue	794			13		748			(38		)	1,517
Cost of products	229			4		225			(38		)	420
Cost of services	342			3		332			—			677
Selling, general and administrative expenses	164			1		80			—			245
Research and development expenses	46			—		20			—			66
Total operating expenses	781			8		657			(38		)	1,408
Income (loss) from operations	13			5		91			—			109
Interest expense	(39		)	—		(3		)	1			(41		)
Other (expense) income, net	(3		)	1		(2		)	(1		)	(5		)
Income (loss) from continuing operations before income taxes	(29		)	6		86			—			63
Income tax expense (benefit)	(8		)	2		13			—			7
Income (loss) from continuing operations before earnings in subsidiaries	(21		)	4		73			—			56
Equity in earnings of consolidated subsidiaries	76			59		—			(135		)	—
Income (loss) from continuing operations	55			63		73			(135		)	56
Income (loss) from discontinued operations, net of tax	(35		)	—		—			—			(35		)
Net income (loss)	$	20		$	63	$	73		$	(135	)	$	21
Net income (loss) attributable to noncontrolling interests	—			—		1			—			1
Net income (loss) attributable to NCR	$	20		$	63	$	72		$	(135	)	$	20
Total comprehensive income (loss)	35			62		88			(149		)	36
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		1			—			1
Comprehensive income (loss) attributable to NCR common stockholders	$	35		$	62	$	87		$	(149	)	$	35



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the three months ended March 31, 2017

(in millions)	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	281		$	40	$	337		$	(104	)	$	554
Service revenue	493			7		424			—			924
Total revenue	774			47		761			(104		)	1,478
Cost of products	207			13		308			(104		)	424
Cost of services	338			2		302			—			642
Selling, general and administrative expenses	134			1		95			—			230
Research and development expenses	30			—		37			—			67
Total operating expenses	709			16		742			(104		)	1,363
Income (loss) from operations	65			31		19			—			115
Interest expense	(39		)	—		(1		)	1			(39		)
Other (expense) income, net	(17		)	—		13			(1		)	(5		)
Income (loss) from continuing operations before income taxes	9			31		31			—			71
Income tax expense (benefit)	(2		)	16		—			—			14
Income (loss) from continuing operations before earnings in subsidiaries	11			15		31			—			57
Equity in earnings of consolidated subsidiaries	46			8		—			(54		)	—
Income (loss) from continuing operations	57			23		31			(54		)	57
Income (loss) from discontinued operations, net of tax	—			—		—			—			—
Net income (loss)	$	57		$	23	$	31		$	(54	)	$	57
Net income (loss) attributable to noncontrolling interests	—			—		—			—			—
Net income (loss) attributable to NCR	$	57		$	23	$	31		$	(54	)	$	57
Total comprehensive income (loss)	75			34		43			(77		)	75
Comprehensive income (loss) attributable to NCR common stockholders	$	75		$	34	$	43		$	(77	)	$	75



Condensed Consolidating Balance Sheet
March 31, 2018

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	21	$	11	$	316	$	—		$	348
Accounts receivable, net	55		11		1,272		—			1,338
Inventories	327		5		490		—			822
Due from affiliates	627		1,903		229		(2,759		)	—
Other current assets	106		41		173		(37		)	283
Total current assets	1,136		1,971		2,480		(2,796		)	2,791
Property, plant and equipment, net	206		—		132		—			338
Goodwill	2,228		—		518		—			2,746
Intangibles, net	485		—		71		—			556
Prepaid pension cost	—		—		129		—			129
Deferred income taxes	337		—		168		(31		)	474
Investments in subsidiaries	3,139		2,901		—		(6,040		)	—
Due from affiliates	32		—		39		(71		)	—
Other assets	479		65		63		—			607
Total assets	$	8,042	$	4,937	$	3,600	$	(8,938	)	$	7,641

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	34	$	—	$	—	$	—		$	34
Accounts payable	321		2		374		—			697
Payroll and benefits liabilities	91		—		99		—			190
Contract liabilities	261		7		270		—			538
Due to affiliates	1,982		123		654		(2,759		)	—
Other current liabilities	192		5		225		(37		)	385
Total current liabilities	2,881		137		1,622		(2,796		)	1,844
Long-term debt	3,036		—		2		—			3,038
Pension and indemnity plan liabilities	518		—		292		—			810
Postretirement and postemployment benefits liabilities	19		3		111		—			133
Income tax accruals	21		6		104		—			131
Due to affiliates	—		38		33		(71		)	—
Other liabilities	146		36		94		(31		)	245
Total liabilities	6,621		220		2,258		(2,898		)	6,201
Redeemable noncontrolling interest	—		—		16		—			16
Series A convertible preferred stock	822		—		—		—			822
Stockholders’ equity
Total NCR stockholders’ equity	599		4,717		1,323		(6,040		)	599
Noncontrolling interests in subsidiaries	—		—		3		—			3
Total stockholders’ equity	599		4,717		1,326		(6,040		)	602
Total liabilities and stockholders’ equity	$	8,042	$	4,937	$	3,600	$	(8,938	)	$	7,641



Condensed Consolidating Balance Sheet
December 31, 2017

(in millions)	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	97	$	11	429		$	—		$	537
Accounts receivable, net	62		12		1,196		—			1,270
Inventories	311		7		462		—			780
Due from affiliates	646		1,801		283		(2,730		)	—
Other current assets	78		39		162		(36		)	243
Total current assets	1,194		1,870		2,532		(2,766		)	2,830
Property, plant and equipment, net	207		—		134		—			341
Goodwill	2,228		—		513		—			2,741
Intangibles, net	503		—		75		—			578
Prepaid pension cost	—		—		118		—			118
Deferred income taxes	334		—		157		(31		)	460
Investments in subsidiaries	3,008		2,942		—		(5,950		)	—
Due from affiliates	31		1		39		(71		)	—
Other assets	472		63		51		—			586
Total assets	$	7,977	$	4,876	$	3,619	$	(8,818	)	$	7,654

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	52	$	—	$	—	$	—		$	52
Accounts payable	382		—		380		—			762
Payroll and benefits liabilities	124		—		95		—			219
Contract liabilities	216		6		236		—			458
Due to affiliates	1,884		130		716		(2,730		)	—
Other current liabilities	204		5		225		(36		)	398
Total current liabilities	2,862		141		1,652		(2,766		)	1,889
Long-term debt	2,937		—		2		—			2,939
Pension and indemnity plan liabilities	515		—		283		—			798
Postretirement and postemployment benefits liabilities	20		3		110		—			133
Income tax accruals	20		5		123		—			148
Due to affiliates	—		39		32		(71		)	—
Other liabilities	94		36		101		(31		)	200
Total liabilities	6,448		224		2,303		(2,868		)	6,107
Redeemable noncontrolling interest	—		—		15		—			15
Series A convertible preferred stock	810		—		—		—			810
Stockholders’ equity
Total NCR stockholders’ equity	719		4,652		1,298		(5,950		)	719
Noncontrolling interests in subsidiaries	—		—		3		—			3
Total stockholders’ equity	719		4,652		1,301		(5,950		)	722
Total liabilities and stockholders’ equity	$	7,977	$	4,876	$	3,619	$	(8,818	)	$	7,654



Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 2018

(in millions)	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	26		$	(124	)	$	74		$	—		$	(24	)
Investing activities
Expenditures for property, plant and equipment	(24		)	—			(5		)	—			(29		)
Additions to capitalized software	(35		)	—			(7		)	—			(42		)
Proceeds from (payments of) intercompany notes	54			125			—			(179		)	—
Other investing activities, net	(3		)	—			—			—			(3		)
Net cash provided by (used in) investing activities	(8		)	125			(12		)	(179		)	(74		)
Financing activities
Short term borrowings, net	(1		)	—			—			—			(1		)
Payments on term credit facilities	(34		)	—			—			—			(34		)
Payments on revolving credit facilities	(260		)	—			(238		)	—			(498		)
Borrowings on revolving credit facilities	375			—			238			—			613
Repurchase of Company common stock	(165		)	—			—			—			(165		)
Proceeds from employee stock plans	5			—			—			—			5
Borrowings (repayments) of intercompany notes	—			—			(179		)	179			—
Tax withholding payments on behalf of employees	(11		)	—			—			—			(11		)
Net cash provided by (used in) financing activities	(91		)	—			(179		)	179			(91		)
Cash flows from discontinued operations
Net cash used in operating activities	(4		)	—			—			—			(4		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			5			—			5
Increase (decrease) in cash, cash equivalents and restricted cash	(77		)	1			(112		)	—			(188		)
Cash, cash equivalents and restricted cash at beginning of period	98			10			435			—			543
Cash, cash equivalents and restricted cash at end of period	$	21		$	11		$	323		$	—		$	355



(in millions)	March 31, 2018
Reconciliation of cash, cash equivalents and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash and cash equivalents	$	21	$	11	$	316	$	—	$	348
Restricted cash included in Other assets	—		—		7		—		7
Total cash, cash equivalents and restricted cash	$	21	$	11	$	323	$	—	$	355



Condensed Consolidating Statement of Cash Flows
For the three months ended March 31, 2017

(in millions)	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	274		$	1	$	(236	)	$	—		$	39
Investing activities
Expenditures for property, plant and equipment	(4		)	—		(7		)	—			(11		)
Additions to capitalized software	(32		)	—		(9		)	—			(41		)
Proceeds from (payments of) intercompany notes	23			—		—			(23		)	—
Investments in equity affiliates	(2		)	—		—			2			—
Other investing activities, net	(1		)	—		—			—			(1		)
Net cash provided by (used in) investing activities	(16		)	—		(16		)	(21		)	(53		)
Financing activities
Short term borrowings, net	—			—		3			—			3
Payments on term credit facilities	(11		)	—					—			(11		)
Payments on revolving credit facilities	(155		)	—		(40		)	—			(195		)
Borrowings on revolving credit facilities	240			—		240			—			480
Repurchase of Company common stock	(350		)	—		—			—			(350		)
Proceeds from employee stock plans	3			—		—			—			3
Equity contribution	—			—		2			(2		)	—
Borrowings (repayments) of intercompany notes	—			—		(23		)	23			—
Tax withholding payments on behalf of employees	(22		)	—		—			—			(22		)
Net cash provided by (used in) financing activities	(295		)	—		182			21			(92		)
Cash flows from discontinued operations
Net cash used in operating activities	(3		)	—		—			—			(3		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—		8			—			8
Increase (decrease) in cash, cash equivalents, and restricted cash	(40		)	1		(62		)	—			(101		)
Cash, cash equivalents and restricted cash at beginning of period	67			12		428			—			507
Cash, cash equivalents and restricted cash at end of period	$	27		$	13	$	366		$	—		$	406



(in millions)	March 31, 2017
Reconciliation of cash, cash equivalents and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash and cash equivalents	$	27	$	13	$	361	$	—	$	401
Restricted cash included in Other assets	—		—		5		—		5
Total cash, cash equivalents and restricted cash	$	27	$	13	$	366	$	—	$	406