Slide 1: Q1 2013 Earnings Conference Call
NCR Confidential Q1 2013 EARNINGS CONFERENCE CALL BILL NUTI, CHAIRMAN AND CEO April 30, 2013
Slide 2: Notes to Investors
NCR Confidential NOTES TO INVESTORS 2 Comments made during this conference call and in these materials may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as “seek,” “potential,” “expect,” “striv
Slide 3: Q1 2013 Key Takeaways
NCR Confidential Q1 2013 KEY TAKEAWAYS 3 (1) See reconciliation of GAAP to non-GAAP measures in the Supplementary Non-GAAP Materials and/or on the investor relations page of NCR’s website. (2) Post AT&T Spin-off, excluding Teradata (3) NPOI as a percentage of revenue (4) Software includes software,
Slide 4: Industry Highlights and Key Developments
NCR Confidential Industry Highlights Key Developments Financial Revenue of $714M, an increase of 3% y/y, 5% FX neutral Operating margin of 8.0%, down 20 bps y/y Continued to invest in services and R&D Acquired 25 new customers in the U.S. market during Q1, bringing total to 500 since beginni
Slide 5: Update: Retalix Acquisition
NCR Confidential Key Acquisition Objectives Demonstrates commitment to be a leader in omni-channel retail solutions enabling effortless transactions across multiple touch points and channels Improves revenue mix with a higher percentage of software and services/SaaS, resulting in margin expansio
Slide 6: Strategic Trajectory of Pension Transformation
NCR Confidential GOALS Eliminate US underfunding Create $50-70M (net of interest) of annual FCF Remove ~$1B of liability Pension expense declines to $20M annually PHASE II Reduce US underfunding Improve FCF Reduce overall liability ADDRESS AND RESOLVE LEGACY PENSION ISSUES Reduce man
Slide 7: Q1 2013 Summary
NCR Confidential Executed a balanced approach to strategic growth, while tackling legacy issues to ensure long-term benefits Q1 2013 SUMMARY 7 Retalix integration going well; strong start in Q1 On-going investments in innovation/R&D, Services and Sales Customer-focused approach drove market sh
Slide 8: Phase III Pension Strategy
NCR Confidential PHASE III PENSION STRATEGY BOB FISHMAN, CFO April 30, 2013
Slide 9: Phase III Pension Strategy
NCR Confidential PHASE III PENSION STRATEGY Phase I and Phase II completed in 2012 US: Shifted asset mix to ~100% fixed income by year-end 2012 International: ~ 65% fixed income by year-end 2012 Contributed $600M to the US pension plan financed through attractive capital market borrowings
Slide 10: Phase III Pension Strategy (cont'd)
NCR Confidential PHASE III PENSION STRATEGY (cont’d) Key activities as part of Phase III Terminate legacy Executive Non-qualified Retirement Plans Initiated early retirement offer through pension plan driving operational benefits Begin lump sum offer to term-vested participants not included
Slide 11: Mark-to-Market Accounting Change
NCR Confidential MARK-TO-MARKET ACCOUNTING CHANGE 11 Previously Reported 2012 Adjusted 2012 $ 292 $ (120) 232 644 42 191 146 409 $ 0.85 $ 2.46 589 589 $ 2.49 $ 2.49 2010 – 2012 Annual Impact GAAP Pension expense (benefit) Income (loss) from operations Income tax expense (benefit) Net income (loss) D
Slide 12: Supplementary Non-GAAP Materials
NCR Confidential SUPPLEMENTARY NON- GAAP MATERIALS
Slide 13: Non-GAAP Measures
NCR Confidential NON-GAAP MEASURES 13 While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and the related presentation materials will include non-GAAP measures in an effort to provide additio
Slide 14: Non-GAAP Measures
NCR Confidential NON-GAAP MEASURES 14 NPOI and Operational Gross Margin. The non-GAAP income from operations (i.e., non-pension operating income, or NPOI) and operational gross margin included in these materials exclude the impact of pension expense and certain special items. Due to the significant
Slide 15: Non-GAAP Reconciliations
NCR Confidential NON-GAAP RECONCILIATIONS 15 Q1 2013 Q1 2013 Gross Margin as a % of Revenue (GAAP) 26.2% Income from Operations (GAAP) $85 Pension Expense 0.2% Pension Expense 7 Acquisition-Related Amortization of Intangibles 1.0% Acquisition-Related Amortization of Intangibles 14 Acquisition-Relate
Slide 16: Non-GAAP Reconciliations
NCR Confidential 16 NON-GAAP RECONCILIATIONS Revenue Growth % (GAAP) to Constant Currency Revenue Growth % (non-GAAP) Q1 2013 Revenue growth % (GAAP) 13% Unfavorable foreign currency fluctuation impact 2% Constant currency revenue growth % (non-GAAP) 15%
Slide 17: Non-GAAP Reconciliations
NCR Confidential NON-GAAP RECONCILIATIONS 17 Full Year 2012 Full Year 2011 Full Year 2010 Income from Operations (GAAP) $644 $(51) $298 Pension Expense (Benefit) (120) 485 59 Acquisition-Related Amortization of Intangibles 38 12 - Acquisition-Related Costs 23 37 - OFAC and FCPA Investigations 4 - -
Slide 18: Non-GAAP Reconciliations
NCR Confidential NON-GAAP RECONCILIATIONS 18 Full Year 2012 Full Year 2011 Full Year 2010 Diluted Earnings Per Share from Continuing Operations (attributable to NCR) (GAAP) $2.46 $(0.19) $1.72 Pension Expense (Benefit) (0.28) 2.06 0.10 Acquisition-Related Amortization of Intangibles 0.15 0.05 - Acqu