19. 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 September 30, 2018

In millions	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	234		$	7	$	348		$	(55	)	$	534
Service revenue	541			9		466			—			1,016
Total revenue	775			16		814			(55		)	1,550
Cost of products	225			4		299			(55		)	473
Cost of services	357			4		306			—			667
Selling, general and administrative expenses	132			1		93			—			226
Research and development expenses	40			—		19			—			59
Asset impairment charges	1			—		(1		)	—			—
Total operating expenses	755			9		716			(55		)	1,425
Income (loss) from operations	20			7		98			—			125
Interest expense	(42		)	—		(4		)	3			(43		)
Other (expense) income, net	—			2		(9		)	(3		)	(10		)
Income (loss) from continuing operations before income taxes	(22		)	9		85			—			72
Income tax expense (benefit)	(80		)	2		63			—			(15		)
Income (loss) from continuing operations before earnings in subsidiaries	58			7		22			—			87
Equity in earnings of consolidated subsidiaries	26			38		—			(64		)	—
Income (loss) from continuing operations	84			45		22			(64		)	87
Income (loss) from discontinued operations, net of tax	—			—		(1		)	—			(1		)
Net income (loss)	$	84		$	45	$	21		$	(64	)	$	86
Net income (loss) attributable to noncontrolling interests	—			—		2			—			2
Net income (loss) attributable to NCR	$	84		$	45	$	19		$	(64	)	$	84
Total comprehensive income (loss)	66			40		5			(42		)	69
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		3			—			3
Comprehensive income (loss) attributable to NCR common stockholders	$	66		$	40	$	2		$	(42	)	$	66



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

In millions	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	338		$	13	$	357		$	(51	)	$	657
Service revenue	518			6		482			—			1,006
Total revenue	856			19		839			(51		)	1,663
Cost of products	264			8		307			(51		)	528
Cost of services	340			1		322			—			663
Selling, general and administrative expenses	110			1		109			—			220
Research and development expenses	43			—		10			—			53
Total operating expenses	757			10		748			(51		)	1,464
Income (loss) from operations	99			9		91			—			199
Interest expense	(41		)	—		(3		)	2			(42		)
Other (expense) income, net	(13		)	1		7			(2		)	(7		)
Income (loss) from continuing operations before income taxes	45			10		95			—			150
Income tax expense (benefit)	14			1		16			—			31
Income (loss) from continuing operations before earnings in subsidiaries	31			9		79			—			119
Equity in earnings of consolidated subsidiaries	87			73		—			(160		)	—
Income (loss) from continuing operations	118			82		79			(160		)	119
Income (loss) from discontinued operations, net of tax	—			—		—			—			—
Net income (loss)	$	118		$	82	$	79		$	(160	)	$	119
Net income (loss) attributable to noncontrolling interests	—			—		1			—			1
Net income (loss) attributable to NCR	$	118		$	82	$	78		$	(160	)	$	118
Total comprehensive income (loss)	120			95		81			(177		)	119
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		(1		)	—			(1		)
Comprehensive income (loss) attributable to NCR common stockholders	$	120		$	95	$	82		$	(177	)	$	120



Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the nine months ended September 30, 2018

In millions	Parent Issuer			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	769		$	36	$	936		$	(156	)	$	1,585
Service revenue	1,577			25		1,417			—			3,019
Total revenue	2,346			61		2,353			(156		)	4,604
Cost of products	690			15		795			(156		)	1,344
Cost of services	1,053			10		964			—			2,027
Selling, general and administrative expenses	426			2		304			—			732
Research and development expenses	115			—		75			—			190
Asset impairment charges	166			—		17			—			183
Total operating expenses	2,450			27		2,155			(156		)	4,476
Income (loss) from operations	(104		)	34		198			—			128
Interest expense	(121		)	—		(10		)	6			(125		)
Other (expense) income, net	(15		)	4		(7		)	(6		)	(24		)
Income (loss) from continuing operations before income taxes	(240		)	38		181			—			(21		)
Income tax expense (benefit)	(56		)	6		30			—			(20		)
Income (loss) from continuing operations before earnings in subsidiaries	(184		)	32		151			—			(1		)
Equity in earnings of consolidated subsidiaries	179			159		—			(338		)	—
Income (loss) from continuing operations	(5		)	191		151			(338		)	(1		)
Income (loss) from discontinued operations, net of tax	(36		)	—		(2		)	—			(38		)
Net income (loss)	$	(41	)	$	191	$	149		$	(338	)	$	(39	)
Net income (loss) attributable to noncontrolling interests	—			—		2			—			2
Net income (loss) attributable to NCR	$	(41	)	$	191	$	147		$	(338	)	$	(41	)
Total comprehensive income (loss)	(85		)	148		102			(250		)	(85		)
Less comprehensive income (loss) attributable to noncontrolling interests	—			—		—			—			—
Comprehensive income (loss) attributable to NCR common stockholders	$	(85	)	$	148	$	102		$	(250	)	$	(85	)



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

In millions	Parent Issuer				Guarantor Subsidiary		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Product revenue	$	948			$	66	$	1,030		$	(215	)	$	1,829
Service revenue	1,522				20		1,363			—			2,905
Total revenue	2,470				86		2,393			(215		)	4,734
Cost of products	728				30		887			(215		)	1,430
Cost of services	1,013				6		940			—			1,959
Selling, general and administrative expenses	373				3		302			—			678
Research and development expenses	115				—		63			—			178
Total operating expenses	2,229				39		2,192			(215		)	4,245
Income (loss) from operations	241				47		201			—			489
Interest expense	(118		)		—		(8		)	4			(122		)
Other (expense) income, net	(41		)		—		29			(4		)	(16		)
Income (loss) from continuing operations before income taxes	82				47		222			—			351
Income tax expense (benefit)	23				19		36			—			78
Income (loss) from continuing operations before earnings in subsidiaries	59				28		186			—			273
Equity in earnings of consolidated subsidiaries	213				170		—			(383		)	—
Income (loss) from continuing operations	272			—	198		186			(383		)	273
Income (loss) from discontinued operations, net of tax	5				—		—			—			5
Net income (loss)	$	277			$	198	$	186		$	(383	)	$	278
Net income (loss) attributable to noncontrolling interests	—				—		1			—			1
Net income (loss) attributable to NCR	$	277			$	198	$	185		$	(383	)	$	277
Total comprehensive income (loss)	294				235		199			(435		)	293
Less comprehensive income (loss) attributable to noncontrolling interests	—				—		(1		)	—			(1		)
Comprehensive income (loss) attributable to NCR common stockholders	$	294			$	235	$	200		$	(435	)	$	294



Condensed Consolidating Balance Sheet
September 30, 2018

In millions	Parent Issuer		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	31	$	5	$	298	$	—		$	334
Accounts receivable, net	39		12		1,258		—			1,309
Inventories	326		6		584		—			916
Due from affiliates	639		2,077		386		(3,102		)	—
Other current assets	130		45		160		(39		)	296
Total current assets	1,165		2,145		2,686		(3,141		)	2,855
Property, plant and equipment, net	244		1		103		—			348
Goodwill	2,081		—		508		—			2,589
Intangibles, net	438		—		63		—			501
Prepaid pension cost	—		—		133		—			133
Deferred income taxes	345		—		153		(10		)	488
Investments in subsidiaries	3,177		2,806		—		(5,983		)	—
Long-term intercompany notes receivable	31		1		36		(68		)	—
Other assets	490		51		50		—			591
Total assets	$	7,971	$	5,004	$	3,732	$	(9,202	)	$	7,505

Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	62	$	—	$	184	$	—		$	246
Accounts payable	357		3		444		—			804
Payroll and benefits liabilities	121		—		104		—			225
Contract liabilities	205		6		216		—			427
Due to affiliates	2,192		116		794		(3,102		)	—
Other current liabilities	139		3		199		(39		)	302
Total current liabilities	3,076		128		1,941		(3,141		)	2,004
Long-term debt	2,879		—		2		—			2,881
Pension and indemnity plan liabilities	528		—		275		—			803
Postretirement and postemployment benefits liabilities	19		3		108		—			130
Income tax accruals	17		10		91		—			118
Due to affiliates	—		37		31		(68		)	—
Other liabilities	162		16		93		(10		)	261
Total liabilities	6,681		194		2,541		(3,219		)	6,197
Redeemable noncontrolling interest	—		—		14		—			14
Series A convertible preferred stock	846		—		—		—			846
Stockholders’ equity
Total NCR stockholders’ equity	444		4,810		1,173		(5,983		)	444
Noncontrolling interests in subsidiaries	—		—		4		—			4
Total stockholders’ equity	444		4,810		1,177		(5,983		)	448
Total liabilities and stockholders’ equity	$	7,971	$	5,004	$	3,732	$	(9,202	)	$	7,505



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 nine months ended September 30, 2018

In millions	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	226		$	(151	)	$	102		$	(14	)	$	163
Investing activities
Expenditures for property, plant and equipment	(85		)	—			(19		)	—			(104		)
Proceeds from sale of property, plant and equipment	1			—			2			—			3
Additions to capitalized software	(111		)	—			(19		)	—			(130		)
Proceeds from (payments of) intercompany notes	207			145			—			(352		)	—
Other investing activities, net	(4		)	—			—			—			(4		)
Net cash provided by (used in) investing activities	8			145			(36		)	(352		)	(235		)
Financing activities
Short term borrowings, net	(1		)	—			8			—			7
Payments on term credit facilities	(51		)	—			—			—			(51		)
Payments on revolving credit facilities	(1,055		)	—			(378		)	—			(1,433		)
Borrowings on revolving credit facilities	1,055			—			553			—			1,608
Repurchase of Company common stock	(210		)										(210		)
Proceeds from employee stock plans	16			—			—			—			16
Dividend distribution to consolidated subsidiaries	—			—			(14		)	14			—
Borrowings (repayments) of intercompany notes	—			—			(352		)	352			—
Tax withholding payments on behalf of employees	(30		)	—			—			—			(30		)
Net cash provided by (used in) financing activities	(276		)	—			(183		)	366			(93		)
Cash flows from discontinued operations
Net cash used in operating activities	(23		)	—			—			—			(23		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(12		)	—			(12		)
Increase (decrease) in cash, cash equivalents and restricted cash	(65		)	(6		)	(129		)	—			(200		)
Cash, cash equivalents and restricted cash at beginning of period	97			11			435			—			543
Cash, cash equivalents and restricted cash at end of period	$	32		$	5		$	306		$	—		$	343



In millions	September 30, 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	$	31	$	5	$	298	$	—	$	334
Restricted cash included in Other assets	1		—		8		—		9
Total cash, cash equivalents and restricted cash	$	32	$	5	$	306	$	—	$	343



Condensed Consolidating Statement of Cash Flows
For the nine months ended September 30, 2017

In millions	Parent Issuer			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	332		$	(58	)	$	3		$	(7	)	$	270
Investing activities
Expenditures for property, plant and equipment	(55		)	—			(26		)	—			(81		)
Proceeds from sales of property, plant and equipment	—			—			6			—			6
Additions to capitalized software	(101		)	—			(24		)	—			(125		)
Proceeds from (payments of) intercompany notes	182			55			—			(237		)	—
Investments in equity affiliates	(2		)	—			—			2			—
Other investing activities, net	(1		)	—			1			—			—
Net cash provided by (used in) investing activities	23			55			(43		)	(235		)	(200		)
Financing activities
Short term borrowings, net	—			—			10			—			10
Payments on term credit facilities	(34		)	—			(3		)	—			(37		)
Payments on revolving credit facilities	(1,070		)	—			(40		)	—			(1,110		)
Borrowings on revolving credit facilities	1,095			—			240			—			1,335
Repurchase of Company common stock	(350		)	—			—			—			(350		)
Proceeds from employee stock plans	11			—			—			—			11
Other financing activities	(1		)	—			—			—			(1		)
Equity contribution	—			—			2			(2		)	—
Dividend distribution to consolidated subsidiaries	—			—			(7		)	7			—
Borrowings (repayments) of intercompany notes	—			—			(237		)	237			—
Tax withholding payments on behalf of employees	(24		)	—			—			—			(24		)
Net cash provided by (used in) financing activities	(373		)	—			(35		)	242			(166		)
Cash flows from discontinued operations
Net cash used in operating activities	(14		)	—			—			—			(14		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			1			15			—			16
Increase (decrease) in cash, cash equivalents, and restricted cash	(32		)	(2		)	(60		)	—			(94		)
Cash, cash equivalents and restricted cash at beginning of period	67			12			428			—			507
Cash, cash equivalents and restricted cash at end of period	$	35		$	10		$	368		$	—		$	413



In millions	September 30, 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	$	35	$	10	$	360	$	—	$	405
Restricted cash included in Other assets	—		—		8		—		8
Total cash, cash equivalents and restricted cash	$	35	$	10	$	368	$	—	$	413