[November 30, 2015] |
|
NCR Corporation Provides Pro Forma Information with Respect to Its Tender Offer
NCR Corporation (NYSE: NCR) is providing the following additional
information with respect to its offer to purchase up to $1.0 billion of
shares of common stock, par value $0.01 per share, of NCR pursuant to
(i) auction tenders at prices specified by the tendering shareholders of
not less than $26.00 per share and not greater than $29.50 per share or
(ii) purchase price tenders, which will be deemed to have been tendered
at the minimum price of $26.00 per share, in either case net to the
seller in cash, less any applicable withholding taxes and without
interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 13, 2015 (the "Offer to Purchase"),
and the related Letter of Transmittal (the "Letter of Transmittal" and,
together with the Offer to Purchase, as they may be amended and
supplemented from time to time, the "Tender Offer").
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 United States. The pro forma financial information presented below
should be read in conjunction with our historical consolidated financial
statements and accompanying notes thereto included in our Annual Report
on Form 10-K for the year ended December 31, 2014 and our Quarterly
Report on Form 10-Q as of and for the nine months ended September 30,
2015.
The unaudited pro forma balance sheet data assumes that the Transactions
(as defined below) were completed on September 30, 2015 and the
unaudited pro forma statement of operations data for the year ended
December 31, 2014 and the nine months ended September 30, 2015 assumes
that the Transactions were completed on January 1, 2014.
The unaudited pro forma information gives effect to the following
transactions (the "Transactions"):
-
the issuance by NCR to funds managed by or affiliated with Blackstone
Capital Partners VI, L.P. and Blackstone Tactical Opportunities L.L.C.
of $820 million of a new issue of our perpetual convertible preferred
shares, which are convertible into shares of NCR common stock at an
initial conversion price of $30.00 per share and an initial conversion
rate of 33.33 shares of NCR common stock per share of preferred stock
and carry a cumulative annual dividend at a rate of 5.5%, which will
be payable quarterly in arrears and will be payable in kind for the
first sixteen dividend payment dates and thereafter in cash or in kind
at NCR's option (the "Strategic Investment");
-
the purchase by NCR of 38,461,538 shares of its common stock for an
aggregate purchase price of $1.0 billion pursuant to the Tender Offer
(which assumes that the Tender Offer is fully subscribed and that the
purchase price per share is determined to be $26.00 (the lowest
pershare purchase price under the terms of the Tender Offer)) funded
by the cash proceeds from the issuance of the convertible perpetual
preferred stock as well as borrowings under the revolving portion of
our senior secured credit facility; and
-
borrowings by NCR of $210 million under the revolving portion of our
senior secured credit facility to pay a portion of the cash proceeds
of the Tender Offer and related fees and expenses in connection with
the Strategic Investment and the Tender Offer.
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
|
|
|
|
|
|
|
|
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 (News - Alert)-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
|
|
|
|
|
|
|
|
|
|
|
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 NCR Corporation
NCR Corporation (NYSE: NCR) is the global leader in consumer transaction
technologies, turning everyday interactions with businesses into
exceptional experiences. With its software, hardware, and portfolio of
services, NCR enables nearly 550 million transactions daily across the
financial, retail, hospitality, travel, telecom and technology
industries. NCR solutions run the everyday transactions that make your
life easier.
NCR is headquartered in Duluth, Georgia with over 30,000 employees and
does business in 180 countries. NCR is a trademark of NCR Corporation in
the United States and other countries. NCR encourages investors to visit
its web site which is updated regularly with financial and other
important information about NCR.
Website: www.ncr.com
Twitter: @NCRCorporation
Facebook (News - Alert): www.facebook.com/ncrcorp
LinkedIn (News - Alert): http://linkd.in/ncrgroup
YouTube (News - Alert): www.youtube.com/user/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 China and Russia; the impact of our
indebtedness and its terms on our financial and operating activities;
our ability to successfully introduce new solutions and compete in the
information technology industry; the transformation of our business
model and our ability to sell higher-margin software and services; our
ability to improve execution in our sales and services organizations;
defects or errors in our products or problems with our hosting
facilities; manufacturing disruptions; collectability difficulties in
subcontracting relationships in emerging industries; the historical
seasonality of our sales; foreign currency fluctuations; the
availability and success of acquisitions, divestitures and alliances,
including the acquisition of Digital Insight; our pension strategy and
underfunded pension obligation; the success of our ongoing restructuring
plan; tax rates; compliance with data privacy and protection
requirements; reliance on third party suppliers; development and
protection of intellectual property; workforce turnover and the ability
to attract and retain skilled employees; environmental exposures from
our historical and ongoing manufacturing activities; uncertainties with
regard to regulations, lawsuits, claims and other matters across various
jurisdictions; and the other risks and uncertainties described in NCR's
filings with the Securities and Exchange Commission (the "SEC (News - Alert)"),
including under the headings "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in NCR's
annual report on Form 10-K for the year ended December 31, 2014 filed
with the SEC on February 27, 2015 and in any of NCR's subsequently filed
Form 10-Qs. Any forward-looking statement speaks only as of the date on
which it is made. NCR 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.
Important Information
On November 13, 2015, NCR Corporation filed with the United States
Securities and Exchange Commission (the "SEC") a Tender Offer Statement
on Schedule TO regarding the Tender Offer described in this document.
NCR Corporation's stockholders are strongly advised to read the Tender
Offer Statement on Schedule TO (as updated and amended) filed by NCR
Corporation with the SEC, because it contains important information that
NCR Corporation's stockholders should consider prior to making any
decisions with respect to such Tender Offer. The Tender Offer Statement
on Schedule TO and other documents filed by NCR Corporation with the SEC
are available for free at the SEC's website (http://www.sec.gov)
and may be obtained at no charge from NCR at http://investor.ncr.com
or by directing a request to Gavin Bell, Vice President of Investor
Relations, at 212-589-8468.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151130005315/en/
[ Back To TMCnet.com's Homepage ]
|