Slide 1: NCR Q1 2010 Results & Pension Strategy
Exhibit 99.2 NCR Q1 2010 Results & Pension Strategy April 22, 2010
Slide 2: Note to Investors
Note to Investors Certain non-GAAP financial information regarding NCR’s operating results may be discussed during this presentation. Reconciliation of the differences between GAAP and non-GAAP measures are included elsewhere in this presentation and are available on the Investor page of NCR’s websi
Slide 3: Overview of Q1 Results/Announcements
Overview of Q1 Results/Announcements Q1 2010 Financial Results Above Expectations • A return to revenue growth • Gross margin improvement • Cost/expense program execution • Significant non-pension operating income (NPOI) (1) and non-pension EPS (1) growth 2010 Revenue & Non-GAAP Guidance Re-Affirmed
Slide 4: Q1 2010 vs. Q1 2009 Financial Highlights
Q1 2010 vs. Q1 2009 Financial Highlights Revenue up 2% to $1.03B Gross margin up 120 bps, inclusive of negative 70 bps effect from Entertainment NPOI (1) up 54% to $43M Non-GAAP EPS ex pension expense (1) $0.15; up 150% from $0.06 in Q1-2009 Improved backlog driven by 18% increase in orders; Double
Slide 5: Overview of NCR's Business
Overview of NCR’s Business Core Business Entertainment Pension Overview: NCR core vs. competitors Financials GAAP impacts • Core produces more revenue • Expect 2010 revenue of $125- • $1 billion underfunded status as • Core produces more profit $150 million and $30 million of 2009 year end • Core en
Slide 6: Addressing NCR's Valuation Gap
Addressing NCR’s Valuation Gap NCR trades at a material discount to the market and its peers, largely due to the current pension situation Pension assets invested in equities are not only volatile, but correlated with NCR’s operating businesses A significant portion of NCR’s capital is allocated to
Slide 7: Actions to Address Valuation Gap
Actions to Address Valuation Gap Pension Management Strategy • Shift asset allocation of US Pension Plans to 100% fixed income by the end of 2012 – Target 60% by end of 2010, 80% by end of 2011, and 100% by end of 2012 – Mostly high grade corporate bonds with an overall duration that approximates th
Slide 8: NCR Pension Update – Q1 2010
NCR Pension Update – Q1 2010 ( $ Millions) Pension Metrics & Funded Status Asset Return Discount rate Funded Status (2) (2) 3/31/10 YTD 12/31/09 3/31/10 12/31/09 3/31/10(2) US Plans 3.5% 5.75% 5.88% $ (822) $ (740) International 2% 4.9% 4.8% (226) (250) Global 2.9% 5.4% 5.45% $ (1,048) $ (990) ( $ M
Slide 9: US Plans Only – Funded Status Bridge
US Plans Only – Funded Status Bridge ($Millions) $ (52) $2,612 $2,582 $ (6) $ 88 Assets Benefit Fees & Asset Payments Expenses Returns Asset Value, Asset Value, (2) 12/31/09 3/31/10 $ (54) $ 46 Liabilities $ (44) $3,352 $3,404 Benefit Discount Rate Interest Payments Movement Liability Value, Liabili
Slide 10: NCR Historical Pension Overview
NCR Historical Pension Overview ($ Millions) Pension Assets Plan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 U.S. Plans $ 3,026 $ 2,686 $ 2,208 $ 2,797 $ 3,016 $ 3,098 $ 3,385 $ 3,423 $ 2,208 $ 2,582 International Plans 1,514 1,089 1,138 1,397 1,658 1,748 2,085 2,114 1,467 1,737 Total Plans $
Slide 11: Historical Funded Status, Funding and Expense
Historical Funded Status, Funding and Expense ($ Millions) Funded Status Plan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 U.S. Plans $ 618 $ 192 $ (492) $ (163) $ (178) $ (274) $ 95 $ 224 $ (1,019) $ (822) International Plans 329 (38) (242) (238) (281) (184) 39 94 (178) (226) Total Plans $ 947
Slide 12: Sensitivity Analysis - US Plans ONLY
Sensitivity Analysis - US Plans ONLY ($ Millions) Historical Asset Returns and Discount Rates for US Plan 10 yr 20 yr 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 avg avg Asset Returns -2% -6% -12% 36% 15% 10% 16% 7% -31% 28% 4% 10% Discount Rate 7.5% 7.3% 6.8% 6.3% 5.8% 5.5% 5.8% 6.3% 6.3% 5.8
Slide 13: Rationale – Analyzed Various Options
Rationale – Analyzed Various Options Shift pension asset allocation to 100% fixed income by end of 2012 • Risk of equity exposure in pension plan must be reduced – Size of NCR pension plan (and therefore the associated risk) is disproportionate to the size of NCR – Riskiness and volatility of pensio
Slide 14: Pension Legislation Could Provide Relief
Pension Legislation Could Provide Relief NCR Leading Industry Coalition to Possible Impact of Pension Funding Relief Legislation Secure Passage of Pension Relief on NCR Possible Impact of Pension Funding Key Impact on NCR Conditions Status Relief Legislation on NCR Provisions Two relief options; 2+7
Slide 15: 3-Year Vision for NCR
3-Year Vision for NCR Core Business Entertainment Pension Leading Financial #1 or #2 market share Under-funded Solutions provider leader in DVD Kiosk pension position Leading Retail Solutions Market (US & Intl) significantly reduced provider Physical DVD rental & Volatility and risk of Leader in Hos
Slide 16: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Loss from Operations (GAAP) to Non-Pension Operating Diluted Loss Per Share (GAAP) to Diluted Earnings Per Income (non-GAAP) Share (non-GAAP) Q1 Q1 Q1 Q1 2010 2009 2010 2009 Loss from Operations (GAAP) $ (18) $ (10) Diluted Loss Per Share (GAAP) $ (0.12) $