NCR Announces Intention to Separate into Two Independent Companies

  • NCR Corporation
  • 01.08.07
NCR Corporation (NYSE: NCR) announced its intention to separate into two independent publicly traded companies through the spin off of 100 percent of the company’s Teradata Data Warehousing business to holders of shares of NCR common stock.

The transaction, expected to be tax-free to NCR and its shareholders, will enable the two publicly traded companies, both leaders in their respective markets, to better focus on their distinct customer base, business strategy and operational needs.

Teradata, which had revenues of $1.5 billion and operating income (excluding pension expense) of $309 million (1) in 2005, is the leader in the enterprise data warehousing market. Teradata’s award-winning solutions enable organizations worldwide to gain a single, integrated enterprise view of their business to enhance decision-making, customer relationships and profitability.

After the spin off, NCR will continue to provide market-leading self-service technologies, which include automated teller machines (ATMs), retail self-checkout systems, automated bill payment systems, and airline, hotel and hospital self-check-in/out kiosks. In addition, NCR will focus on its other businesses, which include retail point-of-sale technologies and customer-support services as well as business consumables and check-processing and imaging solutions. Combined, these businesses had revenues of $4.5 billion and operating income (excluding pension expense) of $251 million(1) in 2005.

Bill Nuti, president and chief executive officer (CEO) of NCR, said, “This separation is a logical strategic step for NCR. We believe it will benefit our customers, business partners, employees and shareholders. Teradata and the new NCR operate in different markets each with solid prospects for the future, but they have markedly different business models. Both new companies should benefit from sharper management focus on their unique business opportunities. Each new entity should be able to more effectively pursue their specific growth and research and development agendas, while designing employee incentive plans that are more directly aligned with their own performance and growth objectives. In addition, NCR investors should benefit from increased transparency and clarity, which will allow them to more appropriately value the merits, performance and future prospects of both companies.”

NCR believes there are opportunities to expand earnings and cash flow following the Teradata separation by continuing to leverage its leadership position in the emerging self-service market, further enhancing operational excellence, and securing additional manufacturing cost reductions and supply-chain efficiencies. In addition, NCR expects to benefit from increased investment in its sales organization, which should further strengthen the company’s competitive position, market share and brand as it pursues self-service opportunities in new industry and geographic segments.

Following the separation, Bill Nuti will serve as president and CEO of NCR, and Mike Koehler, currently senior vice president of the Teradata Division, will serve as president and CEO of Teradata. Additional information on management and Board composition will be communicated in the future.

Consummation of the proposed spin off is subject to certain conditions, including final approval by NCR’s Board of Directors, receipt of a ruling from the Internal Revenue Service with respect to the spin off, the absence of any material changes or developments and the filing and effectiveness of registration statements with the Securities and Exchange Commission. Approval by NCR shareholders is not required.

The stock distribution ratio will be determined at a future date. The spin off is expected to be completed in six to nine months, subject to registration of the new security with the Securities and Exchange Commission and certain other customary conditions.

NCR has engaged JPMorgan as its financial advisor.

NCR will conduct a conference call today at 9:00 a.m. (ET) to discuss the proposed spin off of its Teradata Data Warehousing business. To participate in the conference call, dial (888) 677-5720 and enter passcode 3289068. Access to the conference call, as well as a replay of the call, is also available on NCR’s Web site at http://investor.ncr.com/. Additionally, a replay of the conference call can be accessed approximately one hour after the conference call concludes by dialing (800) 568-3942 or (203) 369-3812.

The company is scheduled to provide its 2006 fourth-quarter and full-year results, as well as its guidance for 2007, on Jan. 25, 2007.

About NCR Corporation

NCR Corporation (NYSE: NCR) is a leading global technology company helping businesses build stronger relationships with their customers. NCR’s Teradata® data warehouses, ATMs, retail systems, self-service solutions and IT services provide Relationship Technology™ that maximizes the value of customer interactions and helps organizations create a stronger competitive position. Based in Dayton, Ohio, NCR (www.ncr.com) employs approximately 29,300 people worldwide.

NCR and Teradata are trademarks or registered trademarks of NCR Corporation in the United States and other countries.




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