NCR Corp. (NCR, Financial) filed Quarterly Report for the period ended 2010-09-30.
Ncr Corp. has a market cap of $2.21 billion; its shares were traded at around $13.63 with a P/E ratio of 12.7 and P/S ratio of 0.5. Ncr Corp. had an annual average earning growth of 3.7% over the past 10 years.NCR is in the portfolios of David Einhorn of Greenlight Capital Inc, Whitney Tilson of T2 Partners Management, LP, Robert Olstein of Olstein Financial Alert Fund, Eric Mindich of Eton Park Capital Management, L.P., John Keeley of Keeley Fund Management, Steven Cohen of SAC Capital Advisors, Ron Baron of Baron Funds, Bruce Kovner of Caxton Associates, Mario Gabelli of GAMCO Investors, Kenneth Fisher of Fisher Asset Management, LLC, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Dodge & Cox.
Selling, general and administrative expenses were $173 million in the third quarter of 2010 as compared to $159 million in the third quarter of 2009. As a percentage of revenue, these expenses were 14.3% in the third quarter of 2010 compared to 14.0% in the third quarter of 2009. Pension costs included in selling, general, and administrative expenses were $17 million in the third quarter of 2010 as compared to $14 million in the third quarter of 2009. Selling, general, and administrative expenses in the third quarter of 2010 also included incremental costs of $6 million related to the relocation of the Companys global headquarters as well as a $6 million gain related to the sale of an office building in France. After considering the effect of higher pension costs, the global headquarters relocation costs, and the gain on sale of the office building in the third quarter of 2010, selling, general and administrative expenses remained fairly consistent as a percentage of revenue with the prior period despite higher incentive compensation costs.
Research and development expenses were $39 million in the third quarter of 2010 as compared to $36 million in the third quarter of 2009. As a percentage of revenue, these costs were 3.2% in both periods. Pension costs included in research and development expenses were $5 million in the third quarter of 2010 as compared to $4 million in the third quarter of 2009. After considering the effect of pension costs, research and development expenses remained consistent as a percentage of revenue even with higher incentive compensation costs during the third quarter of 2010.
Other income, net was $1 million in the third quarter of 2010 compared to other expense, net of $24 million in the third quarter of 2009. The other expense in the prior year period was due to an impairment charge of $17 million related to an equity investment and a $6 million charge related to litigation.
Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates calculated separately from the effect of significant or unusual items. Income tax represented a benefit of $45 million for the three months ended September 30, 2010 compared to a benefit of $12 million for the three months ended September 30, 2009. The increase in the benefit was primarily due to the release of a $40 million valuation allowance on specific deferred tax assets in NCRs subsidiary in Japan ($1 million of which was attributable to noncontrolling interests). The release in the third quarter of 2010 is due to the determination that the probability of realizing benefits from these assets increased, based on the sustained profitability of our operations in Japan. The benefit was offset by additional tax expense in the current period due to increased pre-tax income. Additionally, benefits were realized in both periods due to the reversal of certain reserves upon the closure of audits and the expiration of the statute of limitations on tax years in various jurisdictions.
During the nine months ended September 30, 2010, NCR incurred $32 million of postemployment expense compared to $39 million in the third quarter of 2009. The decrease in postemployment expense in the nine months ended September 30, 2010 is primarily due to a shift in the mix of employee demographics across multiple geographies as well additional expense that was recorded in the nine months ended September 30, 2009 related to an organizational realignment initiative.
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Ncr Corp. has a market cap of $2.21 billion; its shares were traded at around $13.63 with a P/E ratio of 12.7 and P/S ratio of 0.5. Ncr Corp. had an annual average earning growth of 3.7% over the past 10 years.NCR is in the portfolios of David Einhorn of Greenlight Capital Inc, Whitney Tilson of T2 Partners Management, LP, Robert Olstein of Olstein Financial Alert Fund, Eric Mindich of Eton Park Capital Management, L.P., John Keeley of Keeley Fund Management, Steven Cohen of SAC Capital Advisors, Ron Baron of Baron Funds, Bruce Kovner of Caxton Associates, Mario Gabelli of GAMCO Investors, Kenneth Fisher of Fisher Asset Management, LLC, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Dodge & Cox.
Highlight of Business Operations:
During the three months ended September 30, 2010, NCR incurred $7 million of postemployment expense compared to $17 million in the third quarter of 2009. The decrease in postemployment expense during the third quarter of 2010 was primarily due to a shift in the mix of employee demographics across multiple geographies as well as additional expense of approximately $3 million that was recorded in the third quarter of 2009 related to an organizational realignment initiative.Selling, general and administrative expenses were $173 million in the third quarter of 2010 as compared to $159 million in the third quarter of 2009. As a percentage of revenue, these expenses were 14.3% in the third quarter of 2010 compared to 14.0% in the third quarter of 2009. Pension costs included in selling, general, and administrative expenses were $17 million in the third quarter of 2010 as compared to $14 million in the third quarter of 2009. Selling, general, and administrative expenses in the third quarter of 2010 also included incremental costs of $6 million related to the relocation of the Companys global headquarters as well as a $6 million gain related to the sale of an office building in France. After considering the effect of higher pension costs, the global headquarters relocation costs, and the gain on sale of the office building in the third quarter of 2010, selling, general and administrative expenses remained fairly consistent as a percentage of revenue with the prior period despite higher incentive compensation costs.
Research and development expenses were $39 million in the third quarter of 2010 as compared to $36 million in the third quarter of 2009. As a percentage of revenue, these costs were 3.2% in both periods. Pension costs included in research and development expenses were $5 million in the third quarter of 2010 as compared to $4 million in the third quarter of 2009. After considering the effect of pension costs, research and development expenses remained consistent as a percentage of revenue even with higher incentive compensation costs during the third quarter of 2010.
Other income, net was $1 million in the third quarter of 2010 compared to other expense, net of $24 million in the third quarter of 2009. The other expense in the prior year period was due to an impairment charge of $17 million related to an equity investment and a $6 million charge related to litigation.
Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates calculated separately from the effect of significant or unusual items. Income tax represented a benefit of $45 million for the three months ended September 30, 2010 compared to a benefit of $12 million for the three months ended September 30, 2009. The increase in the benefit was primarily due to the release of a $40 million valuation allowance on specific deferred tax assets in NCRs subsidiary in Japan ($1 million of which was attributable to noncontrolling interests). The release in the third quarter of 2010 is due to the determination that the probability of realizing benefits from these assets increased, based on the sustained profitability of our operations in Japan. The benefit was offset by additional tax expense in the current period due to increased pre-tax income. Additionally, benefits were realized in both periods due to the reversal of certain reserves upon the closure of audits and the expiration of the statute of limitations on tax years in various jurisdictions.
During the nine months ended September 30, 2010, NCR incurred $32 million of postemployment expense compared to $39 million in the third quarter of 2009. The decrease in postemployment expense in the nine months ended September 30, 2010 is primarily due to a shift in the mix of employee demographics across multiple geographies as well additional expense that was recorded in the nine months ended September 30, 2009 related to an organizational realignment initiative.
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