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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
Commission File Number 001-00395
NCR CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 31-0387920
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1700 South Patterson Blvd.
Dayton, Ohio 45479
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (937) 445-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, par value New York Stock Exchange
$.01 per share
Securities to be registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of February 22, 2000 was approximately $3.8 billion. At February
22, 2000, there were 93,834,699 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: Portions of the registrant's Annual Report to Stockholders for
the year ended December 31, 1999.
Part III: Portions of the registrant's Proxy Statement dated March 10,
2000, issued in connection with the annual meeting of
stockholders.
TABLE OF CONTENTS
PART I
Item Description Page
- ---- ----------- ----
1. Business..............................................................1
2. Properties............................................................5
3. Legal Proceedings.....................................................5
4. Submission of Matters to a Vote of Security Holders...................5
4.(a) Executive Officers of the Registrant..................................6
PART II
Description
-----------
5. Market for the Registrant's Common Equity and Related
Stockholder Matters..................................................8
6. Selected Financial Data...............................................8
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................8
7.(a) Quantitative and Qualitative Disclosures about Market Risk............8
8. Financial Statements and Supplementary Data...........................8
9. Changes in Accountants................................................8
9.(a) Disagreements with Accountants on Accounting and Financial
Disclosure...........................................................8
PART III
Description
-----------
10. Directors and Executive Officers of the Registrant....................9
11. Executive Compensation................................................9
12. Security Ownership of Certain Beneficial Owners and Management........9
13. Certain Relationships and Related Transactions........................9
PART IV
Description
-----------
14. Financial Statement Schedules, Reports on Form 8-K and Exhibits......10
This Report contains trademarks, service marks, and registered marks of the
Company and its subsidiaries, and other companies, as indicated.
PART I
Item 1. BUSINESS
General
NCR Corporation and its subsidiaries (NCR or the Company) provide solutions
designed specifically to enable businesses to build, expand and enhance their
relationships with their customers by facilitating transactions and transforming
data from transactions into useful business information.
Through its presence at customer interaction points, such as self service
(e.g., automated teller machines) or store automation (e.g., point-of-sale
workstations), NCR's solutions are designed to help businesses process consumer
transactions. They also offer businesses the opportunity to centralize detailed
information in a data warehouse, analyze the complex relationships among all of
the different data elements and respond with programs designed to improve
consumer acquisition, retention and profitability. NCR offers specific
solutions for the retail and financial industries and also provides solutions
for industries including telecommunications, transportation, insurance,
utilities and electronic commerce as well as consumer goods manufacturers and
government entities. These solutions are built on NCR's foundation of long-
established industry knowledge and consulting expertise, value-adding software,
global customer support services, a complete line of consumable and media
products and a range of hardware technology.
NCR was originally incorporated in 1884 and was a publicly traded company
on the New York Stock Exchange prior to its merger with a wholly-owned
subsidiary of AT&T Corp. (AT&T) on September 19, 1991. Effective December
31,1996, AT&T distributed to its stockholders all of its interest in NCR (the
Distribution) on the basis of one share of NCR common stock for each 16 shares
of AT&T common stock. The Distribution resulted in approximately 101.4 million
shares of NCR common stock outstanding as of December 31, 1996. NCR common stock
is listed on the New York Stock Exchange and trades under the symbol "NCR".
Revenue by similar classes of products and services is reported in Note 10,
"Segment Information and Concentrations" in the Notes to Consolidated Financial
Statements on pages 74-77 of NCR's 1999 Annual Report to Stockholders and is
incorporated herein by reference.
Geographic information is reported in Note 10, "Segment Information and
Concentrations" in the Notes to Consolidated Financial Statements on pages 74-77
of NCR's 1999 Annual Report to Stockholders and is incorporated herein by
reference.
NCR operates in one industry, the information technology industry, and its
business is structured along the four operating segments described below.
Retail Industry Solutions
Products, Services and Solutions
NCR's retail industry solutions are designed to improve customer service
and operating efficiency. These solutions bring together the Company's industry
expertise, professional consulting services, software, hardware and strategic
alliances to build integrated solutions that improve retail customers' business
results. Offerings for the retail industry are grouped into two solution
portfolios: Store Automation and Retail Data Warehousing.
Store Automation solutions are designed to improve service levels and
operating efficiency for retailers. Solutions may include point-of-sale
terminals, barcode scanners, scanner-scales, electronic shelf labeling,
kiosks/Web kiosks, applications software and other hardware and software
utilized in merchandise checkout areas, along with professional consulting and
customer support services.
Retail Data Warehousing solutions enable retailers to use information
gathered from customer transactions to analyze and manage every outlet, product
and consumer relationship, individually.
1
Target Markets and Distribution Channels
The major segments of the retail industry market served by NCR are general
merchandise, food and drug and hospitality. The general merchandise segment
includes department stores, specialty retailers, mass merchandisers and catalog
stores; the food and drug segment includes supermarkets, hypermarkets, grocery,
drug, wholesalers and convenience stores; and the hospitality segment includes
lodging (hotel/motel), fast food/quick service and restaurants.
NCR's offerings for the retail industry are marketed through a combination
of direct and indirect channels. The majority of the networked and scalable data
warehousing offerings sold by NCR into the retail industry are sold through the
Company's direct sales force. In addition to being sold by NCR's direct sales
force, NCR retail products, services and solutions are sold through alliances
with value-added resellers, distributors and dealers worldwide. NCR provides
supporting services, including collateral sales materials, sales leads, porting
facilities and marketing programs, to this sales channel. In recent years, over
90% of traditional retail product sales (primarily barcode scanners and point-
of-sale terminals) were sold by the direct sales force; the remainder were sold
through indirect channels.
Competition
NCR faces significant competition in the retail industry in all geographic
areas where it operates. The Company believes that key competitive factors can
vary by geographic area but typically include quality of the solutions or
products, total cost of ownership, industry knowledge of the vendor, and
knowledge, experience and quality of the vendor's consulting and support
services. NCR's competitors vary by solution, product, service offering and
geographic area.
Financial Industry Solutions
Products, Services and Solutions
NCR's financial industry solutions are designed to help the financial
services industry process consumer transactions, with particular focus on retail
banking. These offerings include four solution portfolios: Self Service,
Financial Data Warehousing, Payment and Imaging and Channel Delivery.
The Self Service solutions offer a complete range of self service consumer
interaction points. These Self Service solutions are principally automated
teller machines (ATMs), including specialized models that dispense customized
information and non-cash items such as tickets and coupons, along with
professional consulting and customer support services. NCR incorporates
biometrics technology, such as iris-scanning customer identification, in some
offerings.
Financial Data Warehousing solutions enable financial services institutions
to transform data about consumer behavior into information that can be used to
change the way financial businesses interact with those consumers.
Payment and Imaging solutions include item-processing devices that read and
sort checks and other paper items, image-processing devices that convert checks
and other paper items into electronic images, outsourced management of item-
image processing facilities, professional consulting and customer support
services, and products and services related to emerging methods of payment.
Channel Delivery solutions are designed to help banks reach customers
through new channels and include products and professional consulting and
customer support services related to bank branch automation, call centers, home
banking, switching and account processing.
Target Markets and Distribution Channels
NCR serves a number of segments in the financial services industry. These
segments include retail banking, which covers both traditional and newer
providers of consumer banking services and financial services, such as the
insurance and card payment industries, as well as the non-traditional financial
services segment, including companies that have diversified into the financial
services area to complement their core businesses. NCR's financial services
industry customers are located throughout the world in both established and
emerging markets. These customers range
2
from very large to very small financial service providers, reflecting, in NCR's
view, its ability to develop solutions for the variety of companies that make up
the world's financial services industry.
NCR has historically distributed most of its financial solutions, products
and services through NCR's direct sales channel, although certain revenues are
derived through sales by distributors. In recent years, over 90% of traditional
financial product sales were sold by the direct sales force; the remainder were
sold through indirect channels.
Competition
NCR faces significant competition in the financial services industry in all
geographic areas where it operates. The primary areas of competitive
differentiation can vary, but typically include quality of the solutions or
products, the industry knowledge of the vendor, the vendor's ability to provide
and support a total, end-to-end solution, the vendor's ability to integrate new
and existing systems, the fit of the vendor's strategic vision with the
customer's strategic direction and the quality of the vendor's support and
consulting services. NCR's competitors vary by solution, product, service
offering and geographic area.
Teradata Solutions
Products, Services and Solutions
NCR's Teradata Solutions Group (TSG) provides Data Warehousing and other
solutions to interface with customers through new channels. The customer base
primarily includes industries such as telecommunications, transportation,
insurance, utilities and electronic commerce as well as consumer goods
manufacturers and government entities. These solutions integrate software,
hardware, professional consulting services, customer support services and
products from leading technology firms that partner with NCR to meet customer
needs. These solutions are grouped primarily into two portfolios: National
Accounts Data Warehousing and Customer Interaction.
National Accounts Data Warehousing solutions help companies profitably
increase revenue by using data warehousing capabilities to gain insight into
consumers' activities and choices, asset use, operations and financial results.
Customer Interaction solutions are designed for all types of customer
interfaces, including call centers, Web interaction and kiosks.
Target Markets and Distribution Channels
The Teradata Solutions Group serves customers outside the retail and
financial industries, including customers in industries such as
telecommunications, transportation, insurance, utilities and electronic commerce
as well as consumer goods manufacturers and government entities.
NCR's Teradata Solutions Group's offerings are marketed through a
combination of direct and indirect channels. In recent years, approximately 90%
of NCR's revenue from the Teradata Solutions Group's offerings has been
generated by the Company's direct sales force. The remaining revenues have
historically been generated from the indirect channel and through alliances with
value-added resellers, distributors and OEMs.
Competition
NCR faces significant competition in the industries served by the Teradata
Solutions Group in all geographic areas where it operates. NCR believes that
key competitive factors in these markets are vendor experience, customer
referrals, database sophistication, support and professional service
capabilities, quality of the solutions or products, total cost of ownership and
industry knowledge of the vendor and platform scalability. In addition, the
movement toward common industry standards (such as Intel processors and UNIX(R)
and Microsoft operating systems) has accelerated product development, but has
also made differentiation more difficult. Hardware and operating system
commoditization has extended beyond PCs into the server business. In the markets
in which the Teradata Solutions Group competes, customers require applications,
database software, system software, hardware, professional services and systems
integration skills. Many competitors offer one or two of these components, but
NCR believes it is one of
3
few companies that can provide complete, open solutions that include all of
these customer requirements. NCR's competitors include companies such as
International Business Machines (IBM) and Oracle Corporation.
Systemedia Group
Products, Services and Solutions
Systemedia develops, produces and markets a complete line of business
consumables to complement the Company's solutions for the retail, financial and
other industries. These products include paper rolls, paper products and
imaging supplies for ink jet, laser, impact and thermal-transfer printers. In
addition, Systemedia develops Automatic Identification solutions that bring
together barcode labels, ribbons, software and printers to meet the product
marketing and distribution requirements of manufacturers and retailers.
Target Markets and Distribution Channels
The major industry segments targeted by the Systemedia Group include
general merchandise, food and drug, hospitality, financial and consumer goods
manufacturing. The Systemedia Group has a direct sales force in 27 countries
focused on providing solutions to major accounts. In addition, Systemedia
solutions are sold through office product resellers, value-added resellers and
telemarketing.
Competition
Competition in the consumable and media solutions business is significant
and varies by geographic area and product group. The primary areas of
competitive differentiation are typically quality, logistics and supply chain
management expertise and total cost of ownership. While price is always a
factor, the Systemedia Group focuses on total cost of ownership for all of its
products and services. Total cost of ownership takes into account not only the
per unit cost of the media, but also service, usage and support costs over the
life of the system.
Research and Development
Research and development expenditures for NCR are reported on page 40 of
NCR's 1999 Annual Report to Stockholders and are incorporated herein by
reference.
Seasonality
Seasonality information for NCR is reported on page 45 of NCR's 1999 Annual
Report to Stockholders and is incorporated herein by reference.
Backlog
NCR's operating results and the amount and timing of revenue are affected
by numerous factors, including the volume, mix and timing of orders received
during a period and conditions in the information technology industry and in the
general economy. The Company believes that backlog is not a meaningful indicator
of future business prospects due to the shortening of product delivery schedules
and the significant portion of revenue related to its customer support services
business, for which order information is not recorded. Accordingly, NCR believes
that backlog information is not material to an understanding of its business.
Sources and Availability of Raw Materials
Sources and availability of raw materials information for NCR is reported
on page 44 of NCR's 1999 Annual Report to Stockholders and is incorporated
herein by reference.
4
Patents and Trademarks
NCR owns approximately 1,300 patents in the United States and 1,400 in
foreign countries. The foreign patents are generally counterparts of NCR's
United States patents. Many of the patents owned by NCR are licensed to others
and NCR is licensed to use certain patents owned by others. In connection with
the Distribution, NCR entered into an extensive cross-licensing agreement with
AT&T and Lucent Technologies Inc. (Lucent), a former subsidiary of AT&T. While
NCR's portfolio of patents and patent applications is of significant value to
NCR, the Company does not believe that any particular individual patent is
itself of material importance to NCR's business as a whole.
NCR has registered certain trademarks and service marks in the United States
and in a number of foreign countries. NCR considers the mark "NCR" and many of
its other trademarks and service marks to be valuable assets.
Employees
At January 31, 2000, NCR had approximately 32,200 employees and
contractors.
Environmental Matters
Information regarding environmental matters is included in the material
captioned "Environmental Matters" on pages 78-80 of NCR's 1999 Annual Report to
Stockholders and is incorporated herein by reference.
Item 2. PROPERTIES
As of February 22, 2000, NCR operated approximately 695 facilities
consisting of approximately 14.7 million square feet throughout the world. On a
square footage basis, approximately 67% are owned, and 33% are leased. Within
the total facility portfolio, NCR operates approximately 31 research &
development and manufacturing facilities totaling approximately 4.0 million
square feet, 86% of which is owned. The remaining 10.7 million square feet
within the facility portfolio includes office, repair, warehouse, and other
miscellaneous sites, and is 60% owned. NCR maintains facilities in 78
countries.
NCR's business units are headquartered in: Dayton, Ohio (Teradata Solutions
Group and Systemedia Group); London, United Kingdom (Financial Solutions Group);
and Atlanta, Georgia (Retail Solutions Group).
NCR believes its plants and facilities are suitable and adequate, and have
sufficient productive capacity to meet its current needs.
Item 3. LEGAL PROCEEDINGS
The information required by this item is included in the material captioned
"Legal Proceedings" on page 80 of NCR's 1999 Annual Report to Stockholders and
is incorporated herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
5
Item 4. (a) EXECUTIVE OFFICERS OF THE REGISTRANT
The Executive Officers of NCR (as of March 8, 2000) are as follows:
Name Age Position and Offices Held
- ------------------------- ------------ ------------------------------------------------------------------
Lars Nyberg 48 Chairman of the Board, Chief Executive Officer,
and President
David Bearman 54 Senior Vice President and Chief Financial Officer
Wilbert J. M. Buiter 41 Senior Vice President, Human Resources
Patrick G. Cronin 39 Senior Vice President, Financial Solutions Group
Robert A. Davis 49 Senior Vice President, Communication, Quality and Technology
William J. Eisenman 53 Senior Vice President, Worldwide Customer Services Group
Anthony Fano 56 Senior Vice President, Retail Solutions Group
Jonathan S. Hoak 50 Senior Vice President and General Counsel
Mark V. Hurd 43 Senior Vice President, Teradata Solutions Group
Keith Taylor 49 Vice President, Systemedia Group
Lars Nyberg. Mr. Nyberg has been Chairman, Chief Executive Officer, and
President of NCR since June 1, 1995. Before joining NCR, from 1993 to 1995, Mr.
Nyberg was Chairman and Chief Executive Officer of the Communications Division
for Philips Electronics NV (Philips), an electronics and electrical products
company. He also served as a member of the Philips Group Management Committee
during that time. In 1992, Mr. Nyberg was appointed Managing Director, Philips
Consumer Electronics Division. From 1990 to 1992, he was the Chairman and Chief
Executive Officer of Philips Computer Division. Mr. Nyberg is a director of
Sandvik AB based in Sweden. He became a director of NCR in 1995.
David Bearman. Mr. Bearman has been Senior Vice President and Chief
Financial Officer of NCR since September 1, 1998. Before joining NCR, from 1989
to August 1998, Mr. Bearman was Executive Vice President and Chief Financial
Officer of Cardinal Health, Inc., a pharmaceutical services provider.
Wilbert J. M. Buiter. Mr. Buiter has been Senior Vice President, Human
Resources, of NCR since August 1, 1998. Before joining NCR, from July 1997 to
July 1998, Mr. Buiter was Senior Vice President, Human Resources, for Philips
Consumer Communications, a joint venture formed by Lucent and Philips. From
1995 to July 1997, Mr. Buiter was Senior Executive Officer of Philips Consumer
Communications, a division of Philips, and prior to that he was a Human
Resources Executive within Philips Product Division Communications Systems.
Patrick G. Cronin. Mr. Cronin became Senior Vice President, Financial
Solutions Group, in November 1999. From October 1998 to October 1999, Mr.
Cronin was Vice President, Worldwide Professional Services. From October 1997
to October 1998, Mr. Cronin was Vice President, Professional Services, of NCR's
Customer Services Group and from 1996 to 1997, he was Vice President,
Professional Services, of NCR's America's Region. Prior to that time, from 1995
to 1996, Mr. Cronin was Managing Partner for Professional Services in NCR's
America's Region and, from 1994 to 1995, he was Managing Partner for
Transportation in NCR's America's Region.
Robert A. Davis. Mr. Davis was appointed Senior Vice President,
Communication, Quality and Technology, in February 2000. From April 1999 to
February 2000 he was Senior Vice President, Quality and Public Relations. From
1995 to March 1999, Mr. Davis was Senior Vice President and Chief Quality
Officer for NCR. From 1994 to 1995, Mr. Davis was with Ideon Group, Inc., a
provider of credit card registry services, as Senior Vice President and Chief
Quality Officer.
William J. Eisenman. Mr. Eisenman became Senior Vice President, Worldwide
Customer Services Group, in November 1998. From 1995 to November 1998, Mr.
Eisenman was Senior Vice President, National Accounts Solutions Group. In 1994,
he was appointed Vice President, NCR Worldwide Services, Global Remote Services.
Anthony Fano. Mr. Fano became Senior Vice President, Retail Solutions
Group, in 1995. From 1994 to 1995, Mr. Fano was Senior Vice President, NCR
Europe and Middle East/Africa, responsible for all NCR sales and service
activity in that geographic region.
6
Jonathan S. Hoak. Mr. Hoak became Senior Vice President and General Counsel
for NCR in December 1993. He was a director of the Company from September 1996
until December 1996.
Mark V. Hurd. Mr. Hurd is Senior Vice President, Teradata Solutions Group,
formerly known as the National Accounts Solutions Group, a position he has held
since November 1998. From 1995 to November 1998, Mr. Hurd was Vice President,
Americas Sales and Worldwide Marketing. From 1994 to 1995, Mr. Hurd was Vice
President, Americas Professional Services.
Keith Taylor. Mr. Taylor has been Vice President, Systemedia Group, since
August 1999. From 1998 to August 1999, Mr. Taylor was Vice President, Worldwide
Customer Services, Asia/Pacific area. From 1997 to 1998, he was Director of
Logistics for NCR's Worldwide Customer Services, Europe/Middle East/Africa area.
From 1996 to 1997, Mr. Taylor was Director, Customer Services, Northern Europe
area, and from 1994 to July 1996, was Chief Financial Officer for NCR's
Worldwide Customer Services Group.
7
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
NCR common stock is listed on the New York Stock Exchange and trades under
the symbol "NCR." There were approximately 330,000 registered holders of record
of NCR common stock as of February 22, 2000. The following table presents the
high and low per share sales prices for NCR common stock for each quarter of
1999 and 1998.
1999 1998
-------- ---------
High Low High Low
------- ------- -------- --------
1st Quarter 55 3/4 40 3/8 1st Quarter 34 3/16 25 5/8
2nd Quarter 54 9/16 37 13/16 2nd Quarter 38 3/8 30 3/4
3rd Quarter 52 5/8 30 3rd Quarter 36 23 1/2
4th Quarter 38 5/8 26 11/16 4th Quarter 41 7/8 27 1/2
NCR does not anticipate the payment of cash dividends on NCR common
stock in the foreseeable future. The declaration of dividends will be subject to
the discretion of the Board of Directors of NCR. Payment of dividends on NCR
common stock will also be subject to such limitations as may be imposed by NCR's
credit facilities from time to time.
Item 6. SELECTED FINANCIAL DATA
The selected financial data for the five years ended December 31, 1999,
which appears on page 31 of NCR's 1999 Annual Report to Stockholders, is
incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's discussion of NCR's financial condition and results of
operations is included on pages 32-49 of NCR's 1999 Annual Report to
Stockholders and is incorporated herein by reference.
Item 7. (a) QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and qualitative disclosures about market risk are reported
in the material captioned "Derivative Financial Instruments and Market Risk" on
pages 48-49 of NCR's 1999 Annual Report to Stockholders and are incorporated
herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of NCR, together with the report
thereon of PricewaterhouseCoopers LLP dated February 8, 2000 and selected
quarterly financial data appearing on pages 51-81 of NCR's 1999 Annual Report to
Stockholders are incorporated herein by reference.
Item 9. CHANGES IN ACCOUNTANTS
None.
Item 9. (a) DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
8
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item with respect to directors of NCR
is included on pages 8-11 of NCR's Proxy Statement, dated March 10, 2000, and is
incorporated herein by reference.
Information regarding executive officers is furnished in a separate
disclosure in Part I of this report because the Company did not furnish such
information in its definitive proxy statement prepared in accordance with
Schedule 14A.
Item 11. EXECUTIVE COMPENSATION
The information regarding the Company's compensation of its named
executive officers is included in the material captioned "Executive
Compensation" on pages 20-29 of NCR's Proxy Statement, dated March 10, 2000, and
is incorporated herein by reference. The information regarding the Company's
compensation of its directors is included in the material captioned
"Compensation of Directors" on pages 13-14 of NCR's Proxy Statement, dated March
10, 2000, and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners
and management is included in the material captioned "Stock Ownership" on pages
6-7 of NCR's Proxy Statement, dated March 10, 2000, and is incorporated herein
by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
9
PART IV
Item 14. FINANCIAL STATEMENT SCHEDULES, REPORTS ON FORM 8-K AND EXHIBITS
Pages In
Annual Report
to Stockholders*
(a) The following documents are filed as part of this report:
(1) Financial Statements:
Report of Independent Accountants............................51
Consolidated Statements of Operations for the Years Ended
December 31, 1999, 1998 and 1997............................52
Consolidated Balance Sheets at December 31, 1999 and
1998........................................................53
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997............................54
Consolidated Statements of Changes in Stockholders' Equity
for the Years Ended December 31, 1999, 1998 and 1997........55
Notes to Consolidated Financial Statements................56-81
(2) Financial Statement Schedule:
Report of Independent Accountants on Financial
Statement Schedule
For each of the three years in the period ended December 31, 1999:
II - Valuation and Qualifying Accounts
* Incorporated by reference from the indicated pages of NCR's 1999 Annual
Report to Stockholders.
All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements or notes
thereto.
(b) Reports on Form 8-K
No reports filed on Form 8-K for the quarter ended December 31, 1999.
(c) Exhibits:
Exhibits identified in parentheses below, on file with the SEC, are
incorporated herein by reference as exhibits hereto.
Exhibit No. Description
- ----------- -----------
3.1 Articles of Amendment and Restatement of NCR Corporation, as
amended May 14, 1999 (Exhibit 3.1 to the NCR Corporation Form
10-Q for the period ended June 30, 1999) and Articles
Supplementary of NCR Corporation (Exhibit 3.1 to the NCR
Corporation Annual Report on Form 10-K for the year ended
December 31, 1996 (the "1996 NCR Annual Report")).
3.2 Bylaws of NCR Corporation, as amended and restated on February
3, 2000.
4.1 Common Stock Certificate of NCR Corporation.
4.2 Preferred Share Purchase Rights Plan of NCR Corporation, dated
as of December 31, 1996, by and between NCR Corporation and The
First National Bank of Boston (Exhibit 4.2 to the 1996 NCR
Annual Report).
10.1 Separation and Distribution Agreement, dated as of February 1,
1996 and amended and restated as of March 29, 1996 (Exhibit
10.1 to the Lucent Technologies Inc. Registration Statement on
Form S-1 (No. 333-00703) (the "Lucent Registration
Statement")).
10.2 Employee Benefits Agreement, dated as of November 20, 1996, by
and between AT&T Corp. and NCR Corporation (Exhibit 10.2 to the
1996 NCR Annual Report).
10.3 Volume Purchase Agreement, dated as of November 20, 1996, by
and between AT&T Corp. and NCR Corporation (Exhibit 10.3 to the
1996 NCR Annual Report).
10
10.4 Patent License Agreement, effective as of March 29, 1996, by
and among AT&T Corp., NCR Corporation, and Lucent Technologies
Inc. (Exhibit 10.7 to the Lucent Registration Statement).
10.5 Amended and Restated Technology License Agreement, effective as
of March 29, 1996, by and among AT&T Corp., NCR Corporation,
and Lucent Technologies Inc. (Exhibit 10.8 to the Lucent
Registration Statement).
10.6 Tax Sharing Agreement, dated as of February 1, 1996, and
amended and restated as of March 29, 1996, by and among AT&T
Corp., NCR Corporation, and Lucent Technologies Inc. (Exhibit
10.6 to the Lucent Registration Statement).
10.7 NCR Management Stock Plan (Exhibit 10.8 to the 1996 NCR Annual
Report).
10.8 NCR WorldShares Plan (Exhibit 10.9 to the 1996 NCR Annual
Report).
10.9 NCR Senior Executive Retirement, Death & Disability Plan
(Exhibit 10.10 to the NCR Corporation Registration Statement on
Form 10 (No. 001-00395), dated November 25, 1996 (the "NCR
Registration Statement")).
10.10 The Retirement Plan for Officers of NCR (Exhibit 10.11 to the
NCR Registration Statement).
10.11 Credit Agreement, dated as of November 20, 1996, among NCR
Corporation, The Lenders Party thereto, The Chase Manhattan
Bank, as Administrative Agent, and Bank of America National
Trust & Savings Association, as Documentation Agent (Exhibit
10.15 to the NCR Registration Statement).
10.12 NCR Change-in-Control Severance Plan for Executive Officers
(Exhibit 10.16 to the 1996 NCR Annual Report).
10.13 Change-in-Control Agreement by and between NCR and Lars Nyberg
(Exhibit 10.2 to the NCR Corporation Quarterly Report on Form
10-Q for the quarter ended June 30, 1997).
10.14 NCR Director Compensation Program (Exhibit 10.18 to the 1996
NCR Annual Report).
10.14.1 First Amendment to the NCR Director Compensation Program.
10.14.2 Second Amendment to the NCR Director Compensation Program.
10.15 NCR Long Term Incentive Program and NCR Management Incentive
Program (Exhibit 10.19 to the 1996 Annual Report).
10.16 NCR Supplemental Pension Plan for AT&T Transfers, restated
effective January 1, 1997 (Exhibit 10.1 to the NCR Corporation
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998).
10.17 NCR Mid-Career Hire Supplemental Pension Plan, restated
effective January 1, 1997 (Exhibit 10.2 to the NCR Corporation
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998).
10.18 NCR Nonqualified Excess Plan, restated effective January 1,
1996 (Exhibit 10.3 to the NCR Corporation Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998).
10.19 Purchase and Manufacturing Agreement, effective April 27, 1998,
by and between NCR Corporation and Solectron Corporation
(Exhibit 10.1 to the NCR Corporation Quarterly Report on Form
10-Q for the quarter ended June 30, 1998). Certain portions of
this exhibit have been granted confidential treatment by the
Securities & Exchange Commission.
10.20 Letter Agreement dated August 5, 1998 (Exhibit 10.2 to the NCR
Corporation Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998).
10.21 Termination Agreement dated May 26, 1999 (Exhibit 10.1 to the
NCR Corporation Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999).
10.22 Employment Agreement with Lars Nyberg.
13 Pages 30-81 of NCR's 1999 Annual Report to Stockholders.
21 Subsidiaries of NCR Corporation.
23 Consent of independent accountants.
27 Financial Data Schedule.
11
NCR will furnish, without charge, to a security holder upon written request a
copy of the 1999 Annual Report to Stockholders and the 2000 Proxy Statement,
portions of which are incorporated herein by reference. NCR will furnish any
other exhibit at cost. Document requests are available by writing to:
NCR - Investor Relations
1700 South Patterson Boulevard
Dayton, OH 45479
Phone: 937-445-5905
http://www.ncr.com/about_NCR/ir/invest_rel.asp
12
NCR Corporation
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Column A Column B Column C Column D Column E
- ------------------------------------------------ --------- ---------- ----------- ----------
Additions
Balance at Charged to Charged to Balance
Beginning Costs & Other at End
Description of Period Expenses Accounts Deductions of Period
- ------------------------------------------------ --------- ---------- ----------- ---------- ---------
Year Ended December 31, 1999
Allowance for doubtful accounts $ 47 $ 7 $ - $ 23 $ 31
Deferred tax asset valuation allowance 498 59 - 272 285
Inventory valuation reserves 93 21 - 47 67
Reserves related to business restructuring - 83 - 10 73
Year Ended December 31, 1998
Allowance for doubtful accounts $ 36 $ 26 $ - $ 15 $ 47
Deferred tax asset valuation allowance 553 103 - 158 498
Inventory valuation reserves 142 24 - 73 93
Reserves related to business restructuring 165 - (111) 54 -
Year Ended December 31, 1997
Allowance for doubtful accounts $ 54 $ 12 $ - $ 30 $ 36
Deferred tax asset valuation allowance 639 22 - 108 553
Inventory valuation reserves 152 29 - 39 142
Reserves related to business restructuring 247 - - 82 165
13
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of NCR Corporation
Our audits of the consolidated financial statements referred to in our report
dated February 8, 2000, appearing on page 51 of the 1999 Annual Report to
Stockholders of NCR Corporation (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
Dayton, Ohio
February 8, 2000
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NCR CORPORATION
Date: March 8, 2000 By:
/s/ Lars Nyberg
-------------------------------------
Lars Nyberg, Chairman of the Board,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title
- --------- -----
/s/ Lars Nyberg
- ------------------------------
Lars Nyberg Chairman of the Board, Chief Executive
Officer and President
/s/ David Bearman
- ------------------------------
David Bearman Senior Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
/s/ David Bohnett
- ------------------------------
David Bohnett Director
/s/ David R. Holmes
- ------------------------------
David R. Holmes Director
/s/ Linda Fayne Levinson
- ------------------------------
Linda Fayne Levinson Director
/s/ James R. Long
- ------------------------------
James R. Long Director
/s/ Ronald A. Mitsch
- ------------------------------
Ronald A. Mitsch Director
/s/ C. K. Prahalad
- ------------------------------
C.K. Prahalad Director
/s/ James O. Robbins
- ------------------------------
James O. Robbins Director
/s/ William S. Stavropoulos
- ------------------------------
William S. Stavropoulos Director
Date: March 8, 2000