13. SEGMENT INFORMATION AND CONCENTRATIONS

The Company manages and reports the following three segments:

•

Software - Our software offerings include industry-based software platforms, applications and application suites for the financial services, retail, hospitality and small business industries. We also offer a portfolio of other industry-oriented software applications including cash management software, video banking software, fraud and loss prevention applications, check and document imaging, remote-deposit capture and customer-facing mobile and digital banking applications for the financial services industry; and secure electronic and mobile payment solutions, sector-specific point of sale software applications, and back-office inventory and store and restaurant management applications for the retail and hospitality industries. Additionally, we provide ongoing software support and maintenance services, as well as consulting and implementation services for our software solutions.

•

Services - Our global end-to-end services solutions include assessment and preparation, staging, installation, implementation, and maintenance and support for our solutions. We also provide systems management and complete managed services for our product offerings. In addition, we provide installation, maintenance and servicing for third party networking products and computer hardware from select manufacturers.


•	Hardware - Our hardware solutions include our suite of financial-oriented self-service ATM-related hardware, and our retail- and hospitality-oriented point of sale terminal, self-checkout kiosk and related hardware. We also offer other self-service kiosks, such as self-check in/out kiosks for airlines, and wayfinding solutions for buildings and campuses.

These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenue and segment operating income. Assets are not allocated to segments, and thus are not included in the assessment of segment performance, and consequently, we do not disclose total assets by reportable segment.

The accounting policies used to determine the results of the operating segments are the same as those utilized for the consolidated financial statements as a whole. Intersegment sales and transfers are not material.

To maintain operating focus on business performance, non-operational items are excluded from the segment operating results utilized by our chief operating decision maker in evaluating segment performance and are separately delineated to reconcile back to total reported income from operations.

The following table presents revenue and operating income by segment for the years ended December 31:



In millions	2018			2017			2016
Revenue by segment
Software License	$	308		$	336		$	341
Software Maintenance	366			374			372
Cloud	631			592			556
Professional Services	607			598			572
Software	1,912			1,900			1,841

Services	2,460			2,373			2,306

ATM	979			1,012			1,221
SCO	346			407			351
POS	708			806			674
IPS	—			18			150
Hardware ⁽¹⁾	2,033			2,243			2,396
Consolidated revenue	6,405			6,516			6,543
Operating income by segment
Software	492			563			573
Services	321			282			198
Hardware ⁽¹⁾	(125		)	(5		)	59
Subtotal - segment operating income	688			840			830
Other adjustments⁽²⁾	497			149			156
Income from operations	$	191		$	691		$	674


⁽¹⁾	On May 27, 2016, NCR completed the sale of substantially all of its IPS business to Atlas Holdings. The sale included all dedicated assets of the IPS division worldwide, other than in the MEA region. Accordingly, the revenue and operating income results exclude the results of the IPS operations, except for the IPS MEA operations, from May 27, 2016 through the end of the fourth quarter of 2016.

⁽²⁾ The following table presents the other adjustments for NCR for the years ended December 31:



In millions	2018		2017		2016
Transformation and restructuring costs	$	223	$	29	$	26
Acquisition-related amortization of intangibles	85		115		123
Acquisition-related costs	6		5		7
Goodwill and long-lived asset impairment charges	183		—		—
Total other adjustments	$	497	$	149	$	156

The following table presents revenue from products and services for NCR for the years ended December 31:



In millions	2018		2017		2016
Product revenue	$	2,341	$	2,579	$	2,737
Professional services and installation services revenue	1,094		1,055		1,011
Recurring revenue, including maintenance and cloud revenue	2,970		2,882		2,795
Total revenue	$	6,405	$	6,516	$	6,543

Revenue is attributed to the geographic area/country to which the product is delivered or in which the service is provided. The following table presents revenue by geographic area for NCR for the years ended December 31:



In millions	2018		%		2017		%		2016		%
Revenue by Geographic Area
United States	$	3,076	48	%	$	3,224	50	%	$	3,106	47	%
Americas (excluding United States)	631		10	%	585		9	%	637		10	%
Europe, Middle East and Africa (EMEA)	1,751		27	%	1,786		27	%	1,896		29	%
Asia Pacific (APJ)	947		15	%	921		14	%	904		14	%
Consolidated revenue	$	6,405	100	%	$	6,516	100	%	$	6,543	100	%

The following table presents property, plant and equipment by geographic area as of December 31:



In millions	2018		2017
Property, plant and equipment, net
United States	$	247	$	204
Americas (excluding United States)	13		19
Europe, Middle East and Africa (EMEA)	57		75
Asia Pacific (APJ)	42		43
Consolidated property, plant and equipment, net	$	359	$	341

Concentrations No single customer accounts for more than 10% of NCR’s consolidated revenue. As of December 31, 2018, NCR is not aware of any significant concentration of business transacted with a particular customer that could, if suddenly eliminated, have a material adverse effect on NCR’s operations. NCR also lacks a concentration of available sources of labor, services, licenses or other rights that could, if suddenly eliminated, have a material adverse effect on its operations.

A number of NCR’s products, systems and solutions rely primarily on specific suppliers for microprocessors and other component products, manufactured assemblies, operating systems, commercial software and other central components. NCR also utilizes contract manufacturers in order to complete manufacturing activities. There can be no assurances that any sudden impact to the availability or cost of these technologies or services would not have a material adverse effect on NCR’s operations.