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NCR Announces Strong Fourth Quarter Results

Stocks in this article: NCR

NCR contributed approximately $752 million to its international, executive and U.S. qualified pension plans in 2012 compared to $125 million in 2011. Contributions in 2012 included $500 million and $100 million discretionary contributions to the U.S. qualified pension plan in the third and fourth quarters of 2012, respectively. The net funded status of the Company's global pension plans improved by approximately $880 million and was approximately $(440) million as of December 31, 2012 compared to approximately $(1.32) billion as of December 31, 2011.

Other expense, net was $19 million in the fourth quarter of 2012, an increase of $3 million from the prior year period.

Income tax was a benefit of $1 million in the fourth quarter of 2012 compared to expense of $30 million in the fourth quarter of 2011 primarily driven by the reduction in income from operations.

NCR ended the fourth quarter of 2012 with $1.07 billion in cash and cash equivalents compared to a balance of $581 million at September 30, 2012. As of December 31, 2012, NCR had a total debt balance of $1.96 billion compared to $1.46 billion at September 30, 2012. Both increases were driven by the offering of $500 million aggregate principal amount of 4.625% senior notes due 2021 during the fourth quarter of 2012.

2013 Outlook

NCR expects full-year 2013 revenues to increase in the range of 9% to 11% on a constant currency basis (4) compared with 2012.

NCR expects its full-year 2013 Income from Operations (GAAP) to be $548 million to $563 million, non-pension operating income (NPOI) (2) to be in the range of $695 to $710 million, GAAP diluted earnings per share to be $2.06 to $2.16 and non-GAAP diluted earnings per share (2) to be in the range of $2.65 to $2.75 per diluted share. The 2013 NPOI and non-GAAP diluted EPS guidance excludes the items set forth in the supplemental non-GAAP reconciliation tables and accompanying footnotes that are included following the "Notes to Investors" at the end of this earnings release. NCR expects approximately $100 million of Other Expense, net including interest expense in 2013 and its full-year 2013 effective income tax rate to be approximately 26%.

The Company expects first quarter 2013 NPOI (2) to be in the range of $110 million to $115 million, compared to $101 million in the first quarter of 2012, and first quarter 2013 income from operations to be in the range of $76 million to $81 million, compared to $49 million in the first quarter of 2012. We expect the first quarter of 2013 tax rate to be approximately 20% and Other Expense, net including interest expense to be approximately $25 million.

             
    2013     2012
      Guidance     Actual
Year-over-year revenue (constant currency) (4)     9% - 11%     11%
Income from Operations (GAAP)     $548 - $563 million     $232 million
Non-pension operating income (2)     $695 - $710 million     $589 million
Diluted earnings per share (GAAP)     $2.06 - $2.16     $0.85
Diluted earnings per share excluding pension expense and special items (non-GAAP) (1)     $2.65 - $2.75     $2.49
 

Update regarding OFAC and FCPA Investigations

The Company and the Special Committee of the Company's Board of Directors have each completed their respective internal investigations regarding the anonymous allegations received from a purported whistleblower regarding certain aspects of the Company's business practices in China, the Middle East and Africa. The principal allegations relate to the Company's compliance with the Foreign Corrupt Practices Act (“FCPA”) and federal regulations that prohibit U.S. persons from engaging in certain activities in Syria.

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