Company News • 29.07.2008

NCR Announces 2008 Second-Quarter Results

Total revenue growth of 13 percent versus Q2-2007
Double-digit revenue growth across key geographies
GAAP EPS from continuing operations was $0.26 per diluted share; non-GAAP EPS from continuing operations was $0.40 per diluted share(1)
Cash provided by operating activities from continuing operations improved $85 million versus Q2-2007
NCR repurchased approximately 5 million shares in the second quarter

DAYTON, Ohio – NCR Corporation (NYSE: NCR) reported financial results today for the three months ended June 30, 2008. Reported revenue of $1.33 billion increased 13 percent over the second quarter of 2007 and included approximately 5 percentage points of benefit from foreign currency translation.

NCR reported second-quarter income from continuing operations of $45 million, or $0.26 per diluted share, compared to $51 million or $0.28 per diluted share in the second quarter of 2007. Income from continuing operations for the second quarter of 2008 included $32 million ($23 million after-tax) in costs, or $0.14 per diluted share, resulting from organizational realignment activities. In the second quarter of 2007, income from continuing operations included $6 million of after-tax costs, or $0.03 per diluted share, related to the manufacturing realignment, a tax adjustment related to prior periods, and the Fox River environmental matter. Excluding these items, non-GAAP earnings from continuing operations(1) in the second quarter of 2008 were $0.40 per diluted share, which compares to $0.31 per diluted share in the prior year period.

“NCR’s strong second quarter results were broad-based geographically and speak to continued solid demand for our self-service solutions,” said Bill Nuti, chairman and chief executive officer of NCR. “Even in a challenging global economy, consumers want to connect, interact and transact with businesses in new ways, and NCR is at the forefront of helping our customers meet that demand. At the same time, we are striving to make the most of this opportunity by managing for profitable revenue growth, building a sustainable and leading cost structure, and improving our working capital position.”

Second Quarter-2008 Highlights

Financial Highlights

Revenue growth in the Americas region of 11 percent was driven primarily by sales growth to financial institutions. In the Europe-Middle East-Africa (EMEA) region, revenues increased 16 percent due to strong demand for NCR products from Eastern European and Middle Eastern customers. NCR experienced 10 percent revenue growth in the Asia-Pacific-Japan (APJ) region. Total revenue growth of 13 percent was aided by approximately 5 percentage points of benefit from foreign currency translation. As shown on Schedule B, income from operations was $62 million in the second quarter of 2008 and included $7 million of pension expense and $32 million of costs related to the organizational realignment activities, as previously described. This compares to $79 million of income from operations in the second quarter of 2007, which included $8 million of pension expense and an $11 million benefit related to an update of estimated costs associated with the manufacturing realignment initiative, as previously described. Excluding these items and pension expense, non-GAAP income from operations(2) increased 33 percent to $101 million in the second quarter of 2008 compared to $76 million in the second quarter of 2007.

NCR generated $69 million of cash from operating activities during the second quarter of 2008, compared to using $16 million of cash in the year-ago period. Capital expenditures of $36 million in the second quarter of 2008 were up from $19 million in the year-ago period. NCR generated $33 million of free cash flow (cash from operations less capital expenditures)(3) in the second quarter of 2008, compared to a negative free cash flow of $35 million in the second quarter of 2007. Free cash flow, in the most recent quarter, benefited from reduced levels of accounts receivable and inventory.

Year-to-date, NCR generated $150 million of cash from operating activities, compared to $27 million during the year-ago period. Capital expenditures of $68 million in the first half of 2008 were up from $53 million in the first half of 2007. NCR generated $82 million of free cash flow (cash from operations less capital expenditures)(3) in the first half of 2008, compared to a negative free cash flow of $26 million in the first half of 2007. In addition, the company used $127 million of cash to repurchase approximately 5 million shares of NCR stock in the quarter.

New Product Highlights

In the second quarter, NCR continued to execute on the largest new product rollout in the company’s history, delivering enhanced solutions to customers in the financial and retail industry markets, as well as verticals such as travel and hospitality that offer newer growth opportunities for self-service solutions.

The rollout of NCR SelfServTM, NCR’s new ATM product family, continues to progress successfully with over 4,000 units ordered by more than 120 customers around the globe year-todate. NCR SelfServ has been installed by major customers in Australia, Canada, China, Spain and the United States. By year-end 2008, the company anticipates that new customer orders for NCR SelfServ will surpass those of the NCR Personas product line, further validating customer confidence in NCR’s SelfServ family of ATMs. In May, the next generation NCR FastLaneTM self-checkout solution was introduced at the 2008 Food Marketing Institute and MARKETECHNICS® show in Las Vegas. NCR FastLane now features a more refined, compact design that allows the device to be deployed beyond high-volume retail and grocery environments into other formats, such as department stores, convenience stores, pharmacies and more. The solution allows consumers to scan, bag and pay for goods on their own using cash and debit or credit, including the increasingly popular contactless payment cards.

NCR extended its self-service portfolio further into the hospitality market with the unveiling of the new NCR XpressPort kiosk, a sophisticated and modular hotel check-in kiosk designed to meet consumer demand for self-service in a high-touch environment. The NCR XpressPort kiosk is part of the NCR Xpress Hotel self-service solution, which allows guests to perform a number of tasks including checking-in and out, printing room keys, locating and modifying reservations and viewing and printing messages.