Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - NCR CORP | d8k.htm |
| EX-99.1 - PRESS RELEASE ISSUED BY THE COMPANY, DATED FEBRUARY 3, 2011 - NCR CORP | dex991.htm |
 Supplementary Materials
February 3, 2011
Exhibit 99.2 |
 NCR Confidential
2
Note to Investors
These Supplementary Materials may include forward-looking
statements under the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on
current expectations and assumptions, and are subject to a
number of risks and uncertainties that could cause actual
results to vary materially. These risks and uncertainties are
detailed from time to time in NCR’s SEC reports, including, but
not limited to, Forms 10-Q, 10-K, 8-K and NCR’s annual report
to shareholders. These Supplementary Materials are dated
February 3, 2011, and NCR does not undertake any obligation
to publicly update or revise these materials, whether as a
result of new information, future events or otherwise.
NCR Confidential
2 |
 NCR Value
Equation (1)
Strong Revenue, NPOI,
EBITDAP
(2)
and Operational
EPS
2011E NPOI of $390-$410M
2011E EBITDAP of $505-
$525M
2011E Operational EPS of
$1.75 to $1.85
Anticipate PE and EBITDA
multiples will
increase
to
historical averages due to
reduced pension volatility
and leadership position in
core markets
*Excludes Entertainment and Pension
Bulk of investing
completed in 2010;
~$45M investment,
estimate $25M-$35M
NPOI loss and negative
$0.10 to $0.15
Operational EPS in 2011
2011E EBITDAP of
$10-$20M
Potential EBITDA multiple
of 10X or $100 -
$200M
valuation benefit
Less
after tax
underfunded position of
~$725M at 12/31/10
Less
after tax present
value of future service
cost (not included in
liability above) of
~$105M at 12/31/10
Less
after
tax
present
value of post retirement
obligation of ~$40M at
12/31/10
Plus
cash on balance
sheet of ~$496M at
12/31/10
Core Business*
Core Business*
Entertainment
Entertainment
Pension + Other B/S Items
Pension + Other B/S Items
NCR Confidential
3
(1)
See reconciliation of GAAP to non-GAAP measures in the non-GAAP supplementary materials
and/or on the investor relations page of NCR’s website. (2)
EBITDAP is calculated as GAAP income (loss) from operations plus pension expense, plus
depreciation/amortization and plus/minus special items. |
 NCR Pension
Update – Year-End 2010
Cash Funding for Pension Plans
2010
2011E
2012E
2013E
2014E
2015E
US Qualified Plan**
0
0
60
80
70
70
US Non-qualified Plan
9
10
10
10
10
10
International Plans***
96
115
115
115
100
45
Total
105
125
185
205
180
125
Pension Metrics & Funded Status
Asset Return
Discount
rate Funded Status
12/31/10 YTD
12/31/09
12/31/10
12/31/09
12/31/10
US Plans
12%
5.75%
5.25%
(822)
(903)
International Plans
8%
4.9%
4.6%
(226)
(94)*
Global
10%
5.4%
5.0%
(1,048)
(997)
( $ Millions)
( $ Millions)
NCR Confidential
4
** The funding requirement for the US qualified plan assumes we choose 15 year funding relief and do
not violate cashflow rules *** The funding of international plans is expected to decline to an annual amount of $10-$20
million (excluding the funding of future service cost) by 2016 as some of the
underfunded plans reach fully funded status Due to pension plan closures, service cost is expected to decline to a level of about $10m per
year All future funding estimates are approximations based on expected asset returns, discount rates, and
current local requirements The improvement in the global funded status was approximately $51m in 2010
*The ($94m) net funded status of international plans is comprised underfunded plans of ($373m), and
overfunded plans of $279m The overfunded plans are a result of local funding methodologies that use more conservative actuarial
assumptions than GAAP |
 Non-GAAP
Measures •
While NCR reports its results in accordance with generally accepted accounting principles in
the United States, or GAAP, in an effort to provide additional useful information
regarding NCR’s financial results, it also furnishes certain non-GAAP
information from time to time. This non-GAAP information should not be
considered as a substitute for, or superior to, results determined in accordance with
GAAP. •
The Non-Pension Operating Income (NPOI) and non-GAAP Earnings Per Share (Operational
EPS) discussed in these Supplementary Materials exclude the impact of pension expense and
certain special items. Due to the significant change in its pension expense from
year to year and the non-operational nature of pension expense and these special
items, NCR’s management uses NPOI and Operational EPS to evaluate
year-over-year operating performance.
NCR
may,
in
addition,
segregate
special
items
from
its
GAAP
results
from
time-
to-time to reflect the ongoing earnings per share performance of the company. NCR also
uses NPOI and Operational EPS to manage and determine the effectiveness of its business
management and as a basis for incentive compensation. NCR determines NPOI based on
its GAAP
income
(loss)
from
operations
excluding
pension
expense
and
special
items.
•
NCR utilizes EBITDAP (Earnings before Interest, Taxes, Depreciation, Amortization, Pension
Expense and Special Items), for its Core Business (which excludes Entertainment), given
the significance of its pension expense. NCR believes EBITDAP 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.
NCR
determines
EBITDAP
for
a
given period based on its GAAP income (loss) from operations plus pension expense plus
depreciation/amortization plus/minus special items.
•
The reconciliations of non-GAAP measures to comparable GAAP measures and other related
information on the following slides are also available on the Investor Relations page of
NCR’s website at www.ncr.com.
NCR Confidential
5 |
 Income (Loss)
from Continuing Operations (GAAP) to Non-Pension Operating Income (non-GAAP)
2010
2011E
Core
Income (Loss) from
Continuing Operations (GAAP)
$99
$180-$200
($25-$35)
Pension expense
208
210
-
Global headquarters relocation
18
-
-
Litigation Charge
8
-
-
Non-Pension Operating
Income (non-GAAP)
$333
$390-$410
($25-$35)
2011E
Entertainment
NCR Confidential
6 |
 Diluted
Earnings (Loss) Per Share from Continuing Operations (GAAP) to Diluted Earnings (Loss)
Per Share from Continuing Operations (non-GAAP) 2010
Diluted Earnings (Loss) Per Share
from Continuing Operations
(GAAP)
$0.69
$0.81-$0.91
($0.10-$0.15)
Pension expense
(0.93)
(0.94)
-
Impairment of assets related to an
Equity Investment
(0.05)
-
-
Global Headquarters relocation
(0.07)
-
-
Japanese subsidiary valuation reserve
0.24
-
-
Litigation charge
(0.03)
-
-
Diluted Earnings (Loss) Per Share
from Continuing Operations (non-
GAAP)
$1.53
$1.75-$1.85
($0.10-$0.15)
NCR Confidential
7
2011E
Entertainment
2011E
Core |
     Income
(Loss)
from
Operations
(GAAP)
to
Earnings
Before
Interest,
Taxes,
Depreciation,
Amortization, Pension Expense and Special Items (EBITDAP) (Non-GAAP)
Income (Loss) from Operations (GAAP) to Earnings Before Interest,
Taxes, Depreciation, Amortization, Pension Expense and Special Items
(EBITDAP) (non-GAAP)
2011E
Core Business
2011E
Entertainment
Income (Loss) from Continuing Operations (GAAP)
$180-$200
($25-$35)
Pension Expense
210
--
Depreciation & Amortization
115
45
EBITDAP
$505-$525
$10-$20
NCR Confidential
8 |