Pro Forma Information
The following unaudited pro forma consolidated financial information is
derived from the historical financial statements of NCR, which NCR
prepares in accordance with generally accepted accounting principles in
The unaudited pro forma balance sheet data assumes that the Transactions
(as defined below) were completed on
The unaudited pro forma information gives effect to the following transactions (the “Transactions”):
This unaudited pro forma financial information is not intended to represent and may not necessarily be indicative of either our financial position or results of operations that would have been reported had the Transactions been completed on the terms and dates described above and should not be taken as representative of and is not necessarily indicative of our future financial condition or results of operations.
Unaudited Pro Forma Consolidated Balance Sheet Data |
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September 30, 2015 | |||||||||||||||
In millions, except per share amounts | As Reported | Adjustments for the Transactions | Pro Forma | ||||||||||||
Assets | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | $ | 303 | $ | 820 | (1) | $ | 303 | ||||||||
$ | 210 | (1) | |||||||||||||
$ | (1,000 | ) | (1) | ||||||||||||
$ | (30 | ) | (1) | ||||||||||||
Accounts receivable, net | 1,424 | — | 1,424 | ||||||||||||
Inventories | 718 | — | 718 | ||||||||||||
Other current assets | 453 | — | 453 | ||||||||||||
Total current assets | 2,898 | — | 2,898 | ||||||||||||
Property, plant and equipment, net | 338 | — | 338 | ||||||||||||
Goodwill | 2,750 | — | 2,750 | ||||||||||||
Intangible Assets, net | 830 | — | 830 | ||||||||||||
Prepaid pension cost | 137 | — | 137 | ||||||||||||
Deferred income taxes | 383 | — | 383 | ||||||||||||
Other assets | 551 | — | 551 | ||||||||||||
Total assets | $ | 7,887 | $ | — | $ | 7,887 | |||||||||
Liabilities and stockholders’ equity | |||||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | $ | 5 | $ | — | $ | 5 | |||||||||
Accounts payable | 691 | — | 691 | ||||||||||||
Payroll and benefits liabilities | 210 | — | 210 | ||||||||||||
Deferred service revenue and customer deposits | 537 | — | 537 | ||||||||||||
Other current liabilities | 392 | — | 392 | ||||||||||||
Total current liabilities | 1,835 | — | 1,835 | ||||||||||||
Long-term debt | 3,243 | 210 | (2) | 3,453 | |||||||||||
Pension and indemnity plan liabilities | 684 | — | 684 | ||||||||||||
Postretirement and postemployment benefits liabilities | 180 | — | 180 | ||||||||||||
Income tax accruals | 176 | — | 176 | ||||||||||||
Other liabilities | 82 | — | 82 | ||||||||||||
Total liabilities | 6,200 | 210 | 6,410 | ||||||||||||
Redeemable noncontrolling interest | 12 | — | 12 | ||||||||||||
Convertible preferred stock | — | 795 | (3) | 795 | |||||||||||
Stockholders’ equity | |||||||||||||||
NCR stockholders’ equity | |||||||||||||||
Preferred stock | — | — | — | ||||||||||||
Common stock | 2 | (1 | ) | (4) | 1 | ||||||||||
Paid-in capital | 485 | (485 | ) | (4) | — | ||||||||||
Retained earnings | 1,357 | (519 | ) | (4) | 838 | ||||||||||
Accumulated other comprehensive (loss) income | (175 | ) | — | (175 | ) | ||||||||||
Total NCR stockholders’ equity | 1,669 | (1,005 | ) | 664 | |||||||||||
Noncontrolling interests in subsidiaries | 6 | — | 6 | ||||||||||||
Total stockholders’ equity | 1,675 | (1,005 | ) | 670 | |||||||||||
Total liabilities and stockholders’ equity | $ | 7,887 | $ | — | $ | 7,887 | |||||||||
Other data: | |||||||||||||||
Book value per share | $ | 9.82 | $ | 5.05 |
Notes to Unaudited Pro Forma Consolidated Balance Sheet Data |
||
(1) |
Reflects the $820 million to be received from the Strategic Investment and the borrowing under the revolving portion of our senior secured credit facility of $210 million, offset by the $1 billion offered to be paid in the Tender Offer and the related fees and expenses of $30 million. | |
(2) | Reflects the borrowing under the revolving portion of our senior secured credit facility to partially fund the Tender Offer and related fees and expenses. | |
(3) | Reflects the initial value of the perpetual convertible preferred stock of $820 million issued pursuant to the Strategic Investment less related fees and expenses of $25 million. | |
(4) | Reflects the $1 billion offered to be paid in the Tender Offer plus related fees and expenses of $5 million. | |
Unaudited Pro Forma Consolidated Statements of Operations Data |
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For the Nine Months Ended September 30, 2015 | For the Year Ended December 31, 2014 | |||||||||||||||||||||
In millions, except per share amounts | As Reported | Pro Forma | As Reported | Pro Forma | ||||||||||||||||||
Product revenue | $ | 1,995 | $ | 1,995 | $ | 2,892 | $ | 2,892 | ||||||||||||||
Service revenue | 2,698 | 2,698 | 3,699 | 3,699 | ||||||||||||||||||
Total revenue | 4,693 | 4,693 | 6,591 | 6,591 | ||||||||||||||||||
Cost of products | 1,539 | 1,539 | 2,153 | 2,153 | ||||||||||||||||||
Cost of services | 2,161 | 2,161 | 2,706 | 2,706 | ||||||||||||||||||
Selling, general and administrative expenses | 788 | 788 | 1,012 | 1,012 | ||||||||||||||||||
Research and development expenses | 175 | 175 | 263 | 263 | ||||||||||||||||||
Restructuring-related charges | 33 | 33 | 104 | 104 | ||||||||||||||||||
Total operating expenses | 4,696 | 4,696 | 6,238 | 6,238 | ||||||||||||||||||
Income (loss) from operations | (3 | ) | (3 | ) | 353 | 353 | ||||||||||||||||
Interest expense (1) | (131 | ) | (134 | ) | (181 | ) | (186 | ) | ||||||||||||||
Other expense, net | (14 | ) | (14 | ) | (35 | ) | (35 | ) | ||||||||||||||
Income (loss) from continuing operations before income taxes | (148 | ) | (151 | ) | 137 | 132 | ||||||||||||||||
Income tax expense (benefit) (1) | 50 | 49 | (48 | ) | (50 | ) | ||||||||||||||||
Income (loss) from continuing operations | (198 | ) | (200 | ) | 185 | 182 | ||||||||||||||||
(Loss) income from discontinued operations, net of tax | (4 | ) | (4 | ) | 10 | 10 | ||||||||||||||||
Net income (loss) | (202 | ) | (204 | ) | 195 | 192 | ||||||||||||||||
Net income attributable to noncontrolling interests | 4 | 4 | 4 | 4 | ||||||||||||||||||
Net income (loss) attributable to NCR | $ | (206 | ) | $ | (208 | ) | $ | 191 | $ | 188 | ||||||||||||
Amounts attributable to NCR common stockholders: | ||||||||||||||||||||||
(Loss) income from continuing operations | $ | (202 | ) | $ | (204 | ) | $ | 181 | $ | 178 | ||||||||||||
Dividends on convertible preferred shares | — | (36 | ) | — | (46 | ) | ||||||||||||||||
Dividend equivalents on convertible preferred shares related to redemption value accretion |
— | (2 | ) | — | (3 | ) | ||||||||||||||||
(Loss) income from continuing operations attributable to NCR common stockholders |
(202 | ) | (242 | ) | 181 | 129 | ||||||||||||||||
(Loss) income from discontinued operations, net of tax | (4 | ) | (4 | ) | 10 | 10 | ||||||||||||||||
Net income (loss) attributable to NCR common stockholders | $ | (206 | ) | $ | (246 | ) | $ | 191 | $ | 139 | ||||||||||||
Income (loss) per share attributable to NCR common stockholders: | ||||||||||||||||||||||
Income (loss) per common share from continuing operations | ||||||||||||||||||||||
Basic | $(1.19 | ) | $(1.85 | ) | $1.08 | $1.00 | ||||||||||||||||
Diluted | $(1.19 | ) | $(1.85 | ) | $1.06 | $0.97 | ||||||||||||||||
Net income (loss) per common share | ||||||||||||||||||||||
Basic | $(1.22 | ) | $(1.88 | ) | $1.14 | $1.07 | ||||||||||||||||
Diluted | $(1.22 | ) | $(1.88 | ) | $1.12 | $1.05 | ||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||
Basic | 169.5 | 131.0 | 167.9 | 129.4 | ||||||||||||||||||
Diluted | 169.5 | 131.0 | 171.2 | 132.7 | ||||||||||||||||||
Other data: | ||||||||||||||||||||||
Ratio of earnings to fixed charges (2) | N/A (3) | N/A (3) | 1.59 | 1.56 | ||||||||||||||||||
Ratio of earnings to fixed charges and preferred stock dividends (4) | — | N/A (5) | — | 1.28 |
Notes to Unaudited Pro Forma Consolidated Statements of Operations Data |
||
(1) | Reflects the additional interest expense and related tax impact related to the borrowing of $210 million under the revolving portion of our senior secured credit facility to partially fund the Tender Offer and to pay related fees and expenses, which is $3 million and $1 million, respectively, for the nine months ended September 30, 2015 and $5 million and $2 million, respectively, for the year ended December 31, 2014. | |
(2) | For purposes of calculating the ratio of earnings to fixed charges, (i) earnings consist of income (loss) from continuing operations before provision (benefit) for income taxes plus fixed charges less minority interest in pre-tax income of subsidiaries that have not incurred fixed charges, and (ii) fixed charges consist of interest expense, which includes amortization of deferred finance charges, and imputed interest on our lease obligations. The interest component of rent was estimated to equal 1/3 of such expense, which is considered a reasonable approximation of the interest factor. | |
(3) | For the nine months ended September 30, 2015, fixed charges exceeded earnings by $152 million, resulting in a ratio of less than one. On a pro forma basis, for the nine months ended September 30, 2015, fixed charges exceeded earnings by $155 million, resulting in a ratio of less than one. | |
(4) | For purposes of calculating the ratio of earnings to fixed charges and preferred stock dividends, (i) earnings consist of income (loss) from continuing operations before provision (benefit) for income taxes plus interest expense plus imputed interest on our lease obligations less minority interest in pre-tax income of subsidiaries that have not incurred fixed charges, and (ii) fixed charges consist of interest expense, which includes amortization of finance charges, imputed interest on our lease obligations, and preferred stock dividends consisting of dividends on our perpetual convertible preferred shares and dividend equivalents on perpetual convertible preferred shares related to the redemption value accretion. The interest component of rent was estimated to equal 1/3 of such expense, which is considered a reasonable approximation of the interest factor. | |
(5) | On a pro forma basis, for the nine months ended September 30, 2015, fixed charges and preferred stock dividends exceeded earnings by $193 million, resulting in a ratio of less than one. | |
About
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Twitter: @NCRCorporation
Forward-Looking Statements
This release contains forward-looking statements. Forward-looking statements use words such as “expect,” “anticipate,” “outlook,” “intend,” “believe,” “will,” “should,” “would,” “could” and words of similar meaning.
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.
Forward-looking statements are based on NCR’s 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 factors relating to: our ability to successfully
close the investment by Blackstone and achieve its potential benefits;
the price at which we ultimately determine to purchase shares in the
Tender Offer and the number of shares tendered in the Tender Offer; the
price and time at which we may make any additional share repurchases
following completion of the Tender Offer, the number of shares acquired
in such repurchases and the terms, timing, costs and interest rate on
any indebtedness incurred to fund such repurchases; domestic and global
economic and credit conditions, including, in particular, market
conditions and investment trends in the retail industry, and economic
and market conditions in
Important Information
On
View source version on businesswire.com: http://www.businesswire.com/news/home/20151130005315/en/
Source:
NCR Corporation
News Media Contact
Lou Casale,
212-589-8415
lou.casale@ncr.com
or
Investor
Contact
Gavin Bell, 212-589-8468
gavin.bell@ncr.com