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NCR Announces First Quarter 2021 Results

Significant Profit Margin Expansion and Recurring Revenue up 9%

NCR Corporation (NYSE: NCR) reported financial results today for the three months ended March 31, 2021. First quarter and other recent highlights include:

  • Revenue of $1,544 million, up 3%; Recurring revenue up 9%
  • Significant profit margin expansion driven by cost reductions and favorable mix of revenue
  • Cash flow from operations of $155 million; Free cash flow of $98 million, up $118 million
  • GAAP diluted EPS of $0.19; Non-GAAP diluted EPS of $0.51, up 65%

“Our first quarter results represent a great start to the year with increased momentum in our shift to NCR-as-a-Service,” said Michael Hayford, President and Chief Executive Officer. “Our performance included strong recurring revenue growth, margin expansion and cash flow generation. We are benefiting from the successful execution of our strategy and are a stronger company than we were a year ago. We are confident our strategy will drive accelerated profitable growth and deliver long-term value creation for stockholders. Our financial position is strong, and our proposed transaction with Cardtronics remains on track for a mid-year 2021 close, subject to regulatory and Cardtroncs' shareholder approval.”

In this release, we use certain non-GAAP measures. These non-GAAP measures include "free cash flow," "adjusted EBITDA," and others with the words “non-GAAP" in their titles. These non-GAAP measures are listed, described and reconciled to their most directly comparable GAAP measures under the heading "Non-GAAP Financial Measures" later in this release.

First Quarter 2021 Operating Results

Revenue

First quarter revenue of $1,544 million increased 3% year over year. The following table shows revenue for the first quarter:

 

$ in millions

Q1 2021

 

Q1 2020

 

% Increase

(Decrease)

Banking

$

756

 

 

$

763

 

 

(1

%)

Retail

532

 

 

472

 

 

13

%

Hospitality

179

 

 

169

 

 

6

%

Other

77

 

 

99

 

 

(22

%)

Total Revenue

$

1,544

 

 

$

1,503

 

 

3

%

 

 

 

 

 

 

Software & Services Revenue

$

1,110

 

 

$

1,110

 

 

%

Software & Services Revenue %

72

%

 

74

%

 

 

 

 

 

 

 

 

Recurring Revenue

$

874

 

 

$

802

 

 

9

%

Recurring Revenue %

57

%

 

53

%

 

 

 

Banking revenue decreased 1% due to a decline in ATM hardware revenue partially offset by higher software and services revenue.

Retail revenue increased 13% due to growth in self-checkout and point-of-sale revenue, as well as higher services revenue.

Hospitality revenue increased 6% driven primarily by an increase in point-of-sale revenue, as well as higher services revenue.

Gross Margin

First quarter gross margin of $414 million increased from $397 million in the prior year period. Gross margin rate was 26.8%, up from 26.4%. First quarter gross margin (non-GAAP) of $425 million increased from $404 million in the prior year period. Gross margin rate (non-GAAP) was 27.5%, up from 26.9%. The increases in gross margin, both GAAP and non-GAAP, were driven by higher revenues and cost-saving actions taken in 2020, partially offset by the shift to recurring revenue.

Operating Expenses

First quarter operating expenses of $304 million decreased from $320 million in the prior year period. First quarter operating expenses (non-GAAP) of $277 million decreased from $300 million in the prior year period. The decreases in operating expenses, both GAAP and non-GAAP, were driven by cost-saving actions taken in 2020.

Operating Income

First quarter income from operations of $110 million increased from $77 million in the prior year period. First quarter operating income (non-GAAP) of $148 million increased from $104 million in the prior year period. The increases in operating income, both GAAP and non-GAAP, were driven by the impacts to gross margin and operating expenses described above.

Other Expense/Income

First quarter other expense (GAAP) of $62 million increased from $52 million in the prior year period. The increase in other expense (GAAP) was due to increases in acquisition related expenses, partially offset by lower interest income. First quarter other expense (non-GAAP) of $45 million decreased from $52 million. The decrease in other expense (non-GAAP) was due to lower interest expense.

Income Tax Expense/Benefit

First quarter income tax expense of $17 million increased from $1 million in the prior year period. The first quarter effective income tax rate was 35.4%, compared to 4.0% in the prior year period. First quarter income tax expense (non-GAAP) of $29 million increased from $7 million in the prior year period. The first quarter effective income tax rate (non-GAAP) was 28.2%, compared to 13.5% in the prior year period. The increases in income tax expense, both GAAP and non-GAAP, were primarily driven by higher income before taxes and a decrease in discrete tax benefits.

Net Income from Continuing Operations Attributable to NCR

First quarter net income from continuing operations attributable to NCR of $30 million increased from $23 million in the prior year period. The increase was driven by impacts to gross margin and operating expenses partially offset by higher income tax expense, described above.

Adjusted EBITDA

First quarter adjusted EBITDA of $258 million increased from $188 million in the prior year period. Adjusted EBITDA margin rate increased to 16.7%, compared to 12.5% in the prior year period. The increase in adjusted EBITDA was driven by impacts to gross margin and operating expenses, described above.

Cash Flow

First quarter cash provided by operating activities of $155 million increased from cash provided by operating activities of $54 million in the prior year period. First quarter free cash flow was $98 million, compared to free cash outflow of $20 million in the prior year period. The increases in cash provided by operating activities and free cash flow were both driven by higher operating earnings.

Impact from COVID-19

We continue to navigate through the challenging times presented by COVID-19, with a sharp focus on safeguarding our employees and helping our customers. Despite the unprecedented environment, our teams are executing at a high level and we are advancing our strategy.

While it is difficult to project how disruptive and protracted the pandemic will be, we do expect it will negatively impact our business. We expect all of our segment results to be negatively impacted by the COVID-19 pandemic. We expect our hardware revenues to be most impacted while our recurring revenue streams are expected to be more resilient.

The COVID-19 pandemic is complex and rapidly evolving. The ultimate impact on our overall financial condition and operating results will depend on the currently unknowable duration and severity of the pandemic, as well as any additional governmental and public actions taken in response. We continue to evaluate the long-term impact that COVID-19 may have on our business model. There can be no assurance that the measures we have taken or will take will completely offset the negative impact of COVID-19.

2021 First Quarter Earnings Conference Call

A conference call is scheduled for today at 4:30 p.m. Eastern Time to discuss the first quarter 2021 results. Access to the conference call and accompanying slides, as well as a replay of the call, are available on NCR's web site at http://investor.ncr.com. Additionally, the live call can be accessed by dialing 888-820-9413 (United States/Canada Toll-free) or 786-460-7169 (International Toll) and entering the participant passcode 7622865.

More information on NCR’s first quarter earnings, including additional financial information and analysis, is available on NCR’s Investor Relations website at http://investor.ncr.com/.

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leading software- and services-led enterprise provider in the financial, retail and hospitality industries. NCR is headquartered in Atlanta, Ga., with 36,000 employees globally. NCR is a trademark of NCR Corporation in the United States and other countries.

Website: www.ncr.com

Twitter: @NCRCorporation

Facebook: www.facebook.com/ncrcorp

LinkedIn: https://www.linkedin.com/company/ncr-corporation

YouTube: www.youtube.com/user/ncrcorporation

Cautionary Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements use words such as “expect,” “anticipate,” “outlook,” “intend,” “plan,” “confident,” “believe,” “will,” “should,” “would,” “potential,” “proposed,” “objective,” “could,” “may,” and words of similar meaning, as well as other words or expressions referencing future events, conditions or circumstances. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Statements that describe or relate to NCR’s plans, goals, intentions, strategies, or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements. Examples of forward-looking statements in this release include, without limitation, statements regarding NCR’s momentum and acceleration of our NCR-as-a-Service and 80/60/20 strategy, statements regarding our financial position, expectations regarding the closing of the proposed Cardtronics acquisition, expectations regarding growth and long-term value creation for our stockholders, expectations regarding execution of our 80/60/20 strategy and continued growth, statements regarding our plan to continue investing in strategic platforms, statements regarding our plans to mange our business through the COVID-19 pandemic and the health and safety of our employees and helping our customers, the expected impact of the COVID-19 pandemic on our business, segments and revenues, statements regarding our second quarter 2021 financial outlook including revenue, adjusted EBITDA margin and free cash flow, expectations regarding increasing revenue and cash flow linearity, and expectations regarding cost discipline, operating leverage, margin expansion and return on investment opportunities. Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of NCR’s control. Forward-looking statements are not guarantees of future performance, and there are a number of important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including those factors relating to: the impact of the coronavirus (COVID-19) pandemic on our business, financial condition and results of operations; domestic and global economic and credit conditions including, in particular, political, consumer, and unemployment conditions, the imposition or threat of protectionist trade policies or import or export tariffs, global and regional market conditions and spending trends, new tax legislation across multiple jurisdictions, modified or new global or regional trade agreements, execution of the United Kingdom’s exit from the European Union, uncertainty over further potential changes in Eurozone participation, fluctuations in oil and commodity prices, and our customer responses to the same; the transformation of our business model to an as-a-service company with focus on, among other items, increased software and services revenue, and recurring revenue; our ability grow software and services and expanding our customer base; our ability to successfully develop and introduce new solutions in the competitive, rapidly changing environment in which we do business; defects, errors, installation difficulties or development delays in our products; disruptions in our data center hosting facilities or cloud based hosting; our ability to compete effectively within the technology industry; reliance on third party suppliers; our multinational operations, including in new and emerging markets; our ability to successfully integrate acquisitions or effectively manage alliance activities, including but not limited to, the Cardtronics acquisition; the consummation of the Cardtronics acquisition, including approval by Cardtronics’ shareholders and regulatory approvals; continuous improvement, customer experience, restructuring and cost reduction initiatives; our ability to retain key employees, or attract quality new and replacement employees; financing and liquidity risks including: our level of indebtedness; the terms of the documents governing our indebtedness including financial and other covenants; the incurrence of substantially more debt, including secured debt, and similar liabilities, which would increase the risks described in our risk factors relating to indebtedness and repurchase obligations; sufficiency of our cash flows including to service our indebtedness; interest rate risk, which could cause our debt service obligations to increase significantly; our ability to raise the funds necessary to finance a required repurchase of our senior unsecured notes or our Series A Convertible Preferred Stock; a lowering or withdrawal of the ratings assigned to our debt securities by rating agencies; our pension liabilities; data protection, cybersecurity and privacy risks; intellectual property risks including protection, development and our ability to manage third party claims regarding patents and other intellectual property rights; legal and regulatory risks including unanticipated changes to our tax rates and additional income tax liabilities; environmental exposures from our historical and ongoing manufacturing activities; uncertainties with regard to regulations, lawsuits, claims, and other matters across various jurisdictions; other risks including the impact of the terms of our Series A Convertible Preferred Stock relating to voting power, share dilution and market price of our common stock, as well as rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders; actions or proposals from stockholders that do not align with our business strategies or the interests of our other stockholders; and potential write-down of the value of certain significant assets. Additional information concerning these and other factors can be found in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

Non-GAAP Financial Measures. While NCR reports its results in accordance with Generally Accepted Accounting Principles in the United States, or GAAP, in this release NCR also uses the non-GAAP measures listed and described below.

Non-GAAP Diluted Earnings Per Share (EPS), Gross Margin (non-GAAP), Gross Margin Rate (non-GAAP), Operating Expenses (non-GAAP), Operating Income (non-GAAP), Operating Margin Rate (non-GAAP), Other (Expense) (non-GAAP), Income Tax Expense (non-GAAP), Effective Income Tax Rate (non-GAAP), and Net Income from Continuing Operations Attributable to NCR (non-GAAP). NCR’s non-GAAP diluted EPS, gross margin (non-GAAP), gross margin rate (non-GAAP), operating expenses (non-GAAP), operating income (non-GAAP), operating margin rate (non-GAAP), other (expense) (non-GAAP), income tax expense (non-GAAP), effective income tax rate (non-GAAP), and net income from continuing operations attributable to NCR (non-GAAP) are determined by excluding, as applicable, pension mark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits, as well as other special items, including amortization of acquisition related intangibles and transformation and restructuring activities, from NCR’s GAAP earnings per share, gross margin, gross margin rate, expenses, income from operations, operating margin rate, other (expense), income tax expense, effective income tax rate and net income from continuing operations attributable to NCR, respectively. Due to the non-operational nature of these pension and other special items, NCR's management uses these non-GAAP measures to evaluate year-over-year operating performance. NCR believes these measures are useful for investors because they provide a more complete understanding of NCR's underlying operational performance, as well as consistency and comparability with NCR's past reports of financial results.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). NCR determines Adjusted EBITDA for a given period based on its GAAP net income from continuing operations attributable to NCR plus interest expense, net; plus income tax expense (benefit); plus depreciation and amortization; plus other income (expense); plus pension mark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition related intangibles and restructuring charges, among others. NCR uses Adjusted EBITDA to manage and measure the performance of its business segments. NCR also uses Adjusted EBITDA to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of the Company's ongoing business operations, including its ability to fund discretionary spending such as capital expenditures, strategic acquisitions and other investments.

Adjusted EBITDA margin is calculated based on Adjusted EBITDA as a percentage of total revenue.

Free Cash Flow. NCR defines free cash flow as net cash provided by (used in) operating activities less capital expenditures for property, plant and equipment, less additions to capitalized software plus pension contributions and pension settlements. NCR's management uses free cash flow to assess the financial performance of the Company and believes it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures, which can be used for, among other things, investment in the Company's existing businesses, strategic acquisitions, strengthening the Company's balance sheet, repurchase of Company stock and repayment of the Company's debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow does not have uniform definitions under GAAP and, therefore, NCR's definitions may differ from other companies' definitions of these measures.

NCR's definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP.

Use of Certain Terms

Recurring revenue includes all revenue streams from contracts where there is a predictable revenue pattern that will occur at regular intervals with a relatively high degree of certainty. This includes hardware and software maintenance revenue, cloud revenue, payment processing revenue, and certain professional services arrangements, as well as term-based software license arrangements that include customer termination rights.

 

Reconciliation of Gross Margin (GAAP) to Gross Margin (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Gross Margin (GAAP)

$

414

 

 

$

397

 

Transformation and restructuring costs

4

 

 

 

Acquisition-related amortization of intangibles

7

 

 

7

 

Gross Margin (Non-GAAP)

$

425

 

 

$

404

 

 

Reconciliation of Gross Margin Rate (GAAP) to Gross Margin Rate (Non-GAAP)

 

 

Q1 2021

 

Q1 2020

Gross Margin Rate (GAAP)

26.8

%

 

26.4

%

Transformation and restructuring costs

0.3

%

 

%

Acquisition-related amortization of intangibles

0.4

%

 

0.5

%

Gross Margin Rate (Non-GAAP)

27.5

%

 

26.9

%

 

Reconciliation of Operating Expenses (GAAP) to Operating Expenses (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Operating Expenses (GAAP)

$

304

 

 

$

320

 

Transformation and restructuring costs

(4)

 

 

(5)

 

Acquisition-related amortization of intangibles

(13)

 

 

(15)

 

Acquisition-related costs

(10)

 

 

 

Operating Expenses (Non-GAAP)

$

277

 

 

$

300

 

 

Reconciliation of Income from Operations (GAAP) to Operating Income (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Income (Loss) from Operations (GAAP)

$

110

 

 

$

77

 

Transformation and restructuring costs

8

 

 

5

 

Acquisition-related amortization of intangibles

20

 

 

22

 

Acquisition-related costs

10

 

 

 

Operating Income (Non-GAAP)

$

148

 

 

$

104

 

 

Reconciliation of Other (Expense) (GAAP) to Other (Expense) (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Other Income (Expense) (GAAP)

$

(62)

 

 

$

(52)

 

Acquisition-related cost

17

 

 

 

Other Income (Expense) (Non-GAAP)

$

(45)

 

 

$

(52)

 

 

Reconciliation of Income Tax (Benefit) Expense (GAAP) to Income Tax Expense (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Income Tax (Benefit) Expense (GAAP)

$

17

 

 

$

1

 

Transformation and restructuring costs

2

 

 

1

 

Acquisition-related amortization of intangibles

4

 

 

5

 

Acquisition-related costs

6

 

 

 

Income Tax Expense (Non-GAAP)

$

29

 

 

$

7

 

 

Reconciliation of Net Income from Continuing Operations Attributable to NCR (GAAP) to Earnings Before Interest,

Depreciation, Taxes and Amortization (Adjusted EBITDA)

 

$ in millions

Q1 2021

 

Q1 2020

Net Income (Loss) from Continuing Operations Attributable to NCR (GAAP)

$

30

 

 

$

23

 

Transformation and restructuring costs

8

 

 

5

 

Acquisition-related amortization of intangibles

20

 

 

22

 

Acquisition-related costs

27

 

 

 

Depreciation and amortization (excluding acquisition-related amortization of intangibles)

70

 

 

63

 

Interest expense

45

 

 

50

 

Interest income

(3)

 

 

(1)

 

Income tax expense (benefit)

17

 

 

1

 

Stock-based compensation expense

44

 

 

25

 

Adjusted EBITDA (Non-GAAP)

$

258

 

 

$

188

 

 

Reconciliation of Diluted Earnings Per Share from Continuing Operations (GAAP) to

Non-GAAP Diluted Earnings Per Share from Continuing Operations (Non-GAAP)

 

 

Q1 2021

 

Q1 2020

Diluted Earnings Per Share (GAAP) (1)

$

0.19

 

 

$

0.13

 

Transformation and restructuring costs

0.04

 

 

0.03

 

Acquisition-related amortization of intangibles

0.11

 

 

0.12

 

Acquisition-related costs

0.15

 

 

 

Diluted Earnings Per Share (Non-GAAP) (1)

$

0.51

 

 

$

0.31

 

 

(1) Non-GAAP diluted EPS is determined using the conversion of the Series A Convertible Preferred Stock into common stock in the calculation of weighted average diluted shares outstanding. GAAP EPS is determined using the most dilutive measure, either including the impact of dividends or deemed dividends on the Company's Series A Convertible Preferred Stock in the calculation of net income or loss available to common stockholders or including the impact of the conversion of the Series A Convertible Preferred Stock into common stock in the calculation of the weighted average diluted shares outstanding. Therefore, GAAP diluted EPS and non-GAAP diluted EPS may not mathematically reconcile.

 

 

Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (Non-GAAP)

 

$ in millions

Q1 2021

 

Q1 2020

Net cash provided by (used in) operating activities

$

155

 

 

$

54

 

Total capital expenditures

(61)

 

 

(79)

 

Pension contributions

4

 

 

5

 

Free cash flow

$

98

 

 

$

(20)

 

 
 

 

NCR CORPORATION

 

CONSOLIDATED STATEMENTS OF OPERATIONS

Schedule A

(Unaudited)

(in millions, except per share amounts)

 

 

For the Periods Ended March 31

 

Three Months

 

2021

 

2020

Revenue

 

 

 

Product

$

482

 

 

$

474

 

Service

1,062

 

 

1,029

 

Total Revenue

1,544

 

 

1,503

 

Cost of products

408

 

 

391

 

Cost of services

722

 

 

715

 

Total gross margin

414

 

 

397

 

% of Revenue

26.8

%

 

26.4

%

Selling, general and administrative expenses

238

 

 

255

 

Research and development expenses

66

 

 

65

 

Income (loss) from operations

110

 

 

77

 

% of Revenue

7.1

%

 

5.1

%

Interest expense

(45)

 

 

(50)

 

Other expense, net

(17)

 

 

(2)

 

Total other expense, net

(62)

 

 

(52)

 

Income (loss) from continuing operations before income taxes

48

 

 

25

 

% of Revenue

3.1

%

 

1.7

%

Income tax expense (benefit)

17

 

 

1

 

Income (loss) from continuing operations

31

 

 

24

 

Loss from discontinued operations, net of tax

 

 

 

Net income (loss)

31

 

 

24

 

Net income (loss) attributable to noncontrolling interests

1

 

 

1

 

Net income (loss) attributable to NCR

$

30

 

 

$

23

 

Amounts attributable to NCR common stockholders:

 

 

 

Income (loss) from continuing operations

$

30

 

 

$

23

 

Dividends on convertible preferred stock

(4)

 

 

(6)

 

Income (loss) from continuing operations attributable to NCR common stockholders

26

 

 

17

 

Loss from discontinued operations, net of tax

 

 

 

Net income (loss) attributable to NCR common stockholders

$

26

 

 

$

17

 

Income (loss) per share attributable to NCR common stockholders:

 

 

 

Income (loss) per common share from continuing operations

 

 

 

Basic

$

0.20

 

 

$

0.13

 

Diluted (1)

$

0.19

 

 

$

0.13

 

Net income (loss) per common share

 

 

 

Basic

$

0.20

 

 

$

0.13

 

Diluted (1)

$

0.19

 

 

$

0.13

 

Weighted average common shares outstanding

 

 

 

Basic

130.0

 

 

128.0

 

Diluted (1)

134.7

 

 

130.5

 

 

(1) Diluted EPS is determined using the most dilutive measure, either including the impact of the dividends and deemed dividends on NCR's Series A Convertible Preferred Shares in the calculation of net income or loss per common share from continuing operations and net income or loss per common share or including the impact of the conversion of such preferred stock into common stock in the calculation of the weighted average diluted shares outstanding.

 

 

 

NCR CORPORATION

 

REVENUE AND OPERATING INCOME SUMMARY

Schedule B

(Unaudited)

(in millions)

 

 

For the Periods Ended March 31

 

2021

 

2020

 

% Change

Revenue by segment

 

 

 

 

 

Banking

$

756

 

 

$

763

 

 

(1)

%

Retail

532

 

 

472

 

 

13

%

Hospitality

179

 

 

169

 

 

6

%

Other

77

 

 

99

 

 

(22)

%

Total Revenue

$

1,544

 

 

$

1,503

 

 

3

%

Adjusted EBITDA by segment

 

 

 

 

 

Banking

$

154

 

 

$

140

 

 

 

Banking adjusted EBITDA margin %

20.4

%

 

18.3

%

 

 

Retail

73

 

 

37

 

 

 

Retail adjusted EBITDA margin %

13.7

%

 

7.8

%

 

 

Hospitality

25

 

 

7

 

 

 

Hospitality adjusted EBITDA margin %

14.0

%

 

4.1

%

 

 

Other

10

 

 

8

 

 

 

Other adjusted EBITDA margin %

13.0

%

 

8.1

%

 

 

Total adjusted EBITDA by segment

262

 

 

192

 

 

 

Other income (expense)

(3)

 

 

(3)

 

 

 

Non-controlling interest in subsidiaries

(1)

 

 

(1)

 

 

 

Total adjusted EBITDA

$

258

 

 

$

188

 

 

 

Total adjusted EBITDA margin %

16.7

%

 

12.5

%

 

 

 
 

 

NCR CORPORATION

 

CONSOLIDATED BALANCE SHEETS

Schedule C

(Unaudited)

(in millions, except per share amounts)

 

 

March 31, 2021

 

December 31, 2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

319

 

 

$

338

 

Accounts receivable, net of allowances of $39 and $51 as of March 31, 2021 and December 31, 2020, respectively

1,212

 

 

1,117

 

Inventories

634

 

 

601

 

Other current assets

447

 

 

422

 

Total current assets

2,612

 

 

2,478

 

Property, plant and equipment, net

364

 

 

373

 

Goodwill

2,924

 

 

2,837

 

Intangibles, net

565

 

 

532

 

Operating lease assets

396

 

 

344

 

Prepaid pension cost

202

 

 

199

 

Deferred income taxes

946

 

 

965

 

Other assets

693

 

 

686

 

Total assets

$

8,702

 

 

$

8,414

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities

 

 

 

Short-term borrowings

$

52

 

 

$

8

 

Accounts payable

707

 

 

632

 

Payroll and benefits liabilities

227

 

 

268

 

Contract liabilities

594

 

 

507

 

Other current liabilities

638

 

 

673

 

Total current liabilities

2,218

 

 

2,088

 

Long-term debt

3,349

 

 

3,270

 

Pension and indemnity plan liabilities

839

 

 

851

 

Postretirement and postemployment benefits liabilities

117

 

 

120

 

Income tax accruals

101

 

 

102

 

Operating lease liabilities

377

 

 

325

 

Other liabilities

328

 

 

334

 

Total liabilities

7,329

 

 

7,090

 

Series A convertible preferred stock: par value $0.01 per share, 3.0 shares authorized, 0.3 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively; redemption amount and liquidation preference of $276 as of March 31, 2021 and December 31, 2020, respectively

273

 

 

273

 

Stockholders' equity

 

 

 

NCR stockholders' equity:

 

 

 

Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

 

 

 

Common stock: par value $0.01 per share, 500.0 shares authorized, 130.6 and 129.1 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

1

 

 

1

 

Paid-in capital

398

 

 

368

 

Retained earnings

976

 

 

950

 

Accumulated other comprehensive loss

(279)

 

 

(271)

 

Total NCR stockholders' equity

1,096

 

 

1,048

 

Noncontrolling interests in subsidiaries

4

 

 

3

 

Total stockholders' equity

1,100

 

 

1,051

 

Total liabilities and stockholders' equity

$

8,702

 

 

$

8,414

 

 
 

 

NCR CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Schedule D

(Unaudited)

(in millions)

 

 

For the Periods Ended March 31

 

Three Months

 

2021

 

2020

As Revised(1)

Operating activities

 

 

 

Net income (loss)

$

31

 

 

$

24

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

92

 

 

87

 

Stock-based compensation expense

44

 

 

25

 

Deferred income taxes

7

 

 

5

 

Impairment of other assets

 

 

1

 

Gain (loss) on disposal of property, plant and equipment

 

 

(2)

 

Changes in assets and liabilities:

 

 

 

Receivables

(91)

 

 

137

 

Inventories

(17)

 

 

(48)

 

Current payables and accrued expenses

34

 

 

(183)

 

Contract liabilities

74

 

 

108

 

Employee benefit plans

(10)

 

 

(3)

 

Other assets and liabilities

(9)

 

 

(97)

 

Net cash provided by operating activities

155

 

 

54

 

Investing activities

 

 

 

Expenditures for property, plant and equipment

(10)

 

 

(10)

 

Proceeds from sale of property, plant and equipment

 

 

7

 

Additions to capitalized software

(51)

 

 

(69)

 

Business acquisitions, net of cash acquired

(157)

 

 

(26)

 

Purchases of short-term investments

(5)

 

 

 

Proceeds from sales of short-term investments

5

 

 

 

Net cash used in investing activities

(218)

 

 

(98)

 

Financing activities

 

 

 

Short term borrowings, net

 

 

3

 

Payments on term credit facilities

(8)

 

 

(2)

 

Payments on revolving credit facilities

(318)

 

 

(573)

 

Borrowings on revolving credit facilities

448

 

 

1,397

 

Debt issuance costs

(1)

 

 

(1)

 

Cash dividend paid for Series A preferred shares dividends

(4)

 

 

(6)

 

Repurchases of common stock

 

 

(41)

 

Proceeds from employee stock plans

8

 

 

3

 

Tax withholding payments on behalf of employees

(22)

 

 

(24)

 

Net change in client funds obligations

 

 

12

 

Principal payments for finance lease obligations

(4)

 

 

 

Other financing activities

(1)

 

 

(3)

 

Net cash provided by (used in) financing activities

98

 

 

765

 

Cash flows from discontinued operations

 

 

 

Net cash provided by (used in) discontinued operations

(44)

 

 

3

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(6)

 

 

(14)

 

Increase (decrease) in cash, cash equivalents, and restricted cash

(15)

 

 

710

 

Cash, cash equivalents and restricted cash at beginning of period

406

 

 

563

 

Cash, cash equivalents, and restricted cash at end of period

$

391

 

 

$

1,273

 

 

(1) Certain amounts have been revised for the three months ended March 31, 2020 to correct for errors related to the business activities of JetPay Corporation, a wholly-owned subsidiary, which were more fully described in our 2020 Form 10-K filing.

 

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