NCR to separate into two independent companies, NCR and Teradata

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NCR Corp. intends 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 to better focus on their distinct customer base, business strategy and operational needs.

"The strategic rationale for separation is compelling," said Bill Nuti, president/chief executive officer of NCR in a conference call on Jan. 8. "NCR and Teradata are each major and attractive businesses, but they operate in different markets with markedly different business models. NCR is focused on providing self-service technologies and related solutions, while TD is focused on providing enterprise data warehousing solutions and consulting services in that space. The separation of Teradata from NCR will create two independent companies that are both market leaders, each focused on their separate businesses, customers and strategic initiative."

Mr. Nuti said 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.

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 spin off is expected to be completed in six to nine months.

Teradata, which had revenues of $1.5 billion and operating income (excluding pension expense) of $309 million  in 2005, is the leader in the enterprise data warehousing market. Teradata's 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 self-service technologies, which include automated teller machines, 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 profitability. Combined, these businesses had revenues of $4.5 billion and operating income (excluding pension expense) of $251 million in 2005.

Following the separation, Mr. Nuti will serve as president and CEO of NCR, and Mike Koehler, currently senior vice president of the Teradata Division, will serve as president/CEO of Teradata.

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