Good morning and thank you all for holding. At this time I would like to inform you that your lines are on a listen-only mode until the question-and-answer segment of the call today. This call is being recorded. If you do have any objections, you may disconnect at this time. I would like to turn the call over to Gregg Swearingen, Vice President of Investor Relations. Thank you. Sir, you may begin.

Good morning, and thanks for joining us for our 2007 First Quarter Earnings Call. Bill Nuti, NCR's CEO, will lead our conference call this morning. And after Bill's remarks, Pete Bocian, NCR's CFO, will discuss our Q1 financial performance. Our discussion today includes forecasts and other information that are considered forward-looking statements. While these statements reflect our current outlook, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. These risk factors are described in NCR's periodic filings with the SEC and the our annual report to stockholders. On today's call, we will also be discussing certain non-GAAP information such as free cash flow and results excluding the impact of pension and other nonoperational items. Reconciliations of non-GAAP financial results to a reported and forecasted GAAP results and other information concerning such measures are included in our earnings release and also available on the investor page of NCR's website. A replay of this conference call will be available later today on NCR's website which can be accessed at NCR.com. For those listening to the replay of this call, please keep in mind that the information discussed is as of April 26, 2007. NCR assumes no obligation to update or revise the information included in this conference call, whether as a result of new information or future results. I would like to turn the call over to Bill.

Thank you, Gregg. Good morning, and thank you all for joining us as we discuss the first quarter results. We had a good start to the year as we drove 20% revenue growth in the ATM division, 10% revenue growth in Teradata, and 4% revenue growth with continued margin expansion in our customer services business unit. Overall, we generated 5% revenue growth and, excluding pension expense and special charges related to our manufacturing realignment and Teradata spin-off, our NPOI margin was 8%. I am especially encouraged by these results given the initiatives we are working on beyond our normal operating activities. We are making good progress on both the manufacturing realignment and the strategic separation of Teradata. Before Pete reviews the financial results in greater detail, I will discuss the business unit results beginning with our Teradata Data Warehousing division. Teradata reported first quarter revenue of $358 million, which is a 10% increase from the first quarter of 2006. Operating income in the quarter was $65 million, a modest decline from the $67 million earned in Q1 2006. Although Teradata earned higher revenue in the first quarter of 2007, the year-over-year margin comparison was affected by increased investments in sales and demand creation resources, as well as an increased legal reserve related to a 2002 matter in China. Additionally in the first quarter of 2006, operating margin was benefited by a higher than typical mix of software. Despite the mixed results in the first quarter, we are maintaining our guidance for Teradata's growth and operating margin for 2007. We had a good quarter in terms of adding new customers. Some of them included PhiladelphiaPark Casino, Compania de Telecommunications de El Salvador, NIB Bank in Pakistan, and a few other accounts that is wish to rename nameless but are ranked by…

Thanks, Bill. And good morning, everyone. Total revenue of $3.5 billion was up 5% year on year with about 2 points of benefit from foreign currency translation in the quarter. Adjusting for the 2 points of currency tailwind, revenue increased about 3%. We reported GAAP net income of $34 million or $0.19 per share, versus $0.22 per share in Q1 of 2006. The comparison of GAAP earnings per share includes some non-operational items in both years. In Q1 2007, special charges related to our manufacturing restructuring and the Teradata spin-off amounted to $48 million in the quarter, or $41 million after tax, which equates to $0.22 per share. I will discuss these items in more detail in a few minutes. In Q1 2006, NCR included $9 million of Customer Services related early retirement expense in its GAAP results, which equated to $0.04 per share. Normalizing both Q1 of '07 and '06, operationally we achieved EPS of $0.41 in Q1 of '07 versus $0.26 in Q1 of '06. In the quarter, we had pension expense of $11 million versus $44 million in Q1 of 2006. This reduction of pension expense was primarily driven by our decision to freeze our U.S. pension plan at the end of 2006 and by the $9 million special charge in the first quarter of 2006. We still anticipate around $65 million for full year 2007 pension expense, with some pension settlement type expenses expected in the second half of the year. For the remainder of my comments, I will exclude the impact of the 2007 special charges and pension expense from NCR's results. To analyze NCR's operational performance without the effect of the special charges and pension expense, please see the supplemental financial schedule on the investor page of the website that reconciles GAAP to non-GAAP…

Before moving on, I would like to personally thank you, Pete, for your years of leadership and significant contributions to NCR's success. You have been a tremendous resource for the company and for me. I want to wish you the best of luck in Seattle. To sum up, we are off to a good start in 2007, and we are committed to completing our manufacturing realignment in an efficient and fair manner and to accomplishing a successful spin-off of Teradata later this year. However, regardless of whether we are one company or two, our initiatives for success remain consistent. First, we want to drive profitable growth in the self-service and enterprise analytics markets. Next, we must strengthen our competitive position by improving our cost structure. These improvements will largely be driven through the phase 2 operational improvements that we previously discussed and by continuing our focus on maintaining a lean organization. And finally, we are committed to being a customer-focused company that continues to align our people and resources to provide our customers with the solutions and services they demand. Now, as it relates to the timeline for the strategic separation. We will most likely make our initial filing of Teradata's Form 10 in May. However, as is typically the case for these types of filings, Teradata's filing will then be amended with relevant information in the following weeks as we move toward the completion of the separation. As we get closer to the Teradata spin-off, we will be hitting the road to help you gain a better understanding of how each company will look in terms of profitability and capital structure. However, until we file our amendments to the Form 10, we will not have much in the way of new information. Earlier this month, we submitted a private letter-ruling request with the IRS requesting tax-free treatment for the spin, and we expect to hear back from them in a timely fashion. Before we move on to the Q&A, let me give you an update on our CFO search. We commenced the CFO search in February in conjunction with the upcoming strategic separation of Teradata from NCR. We have simply expanded this search to include CFOs for both companies. The interest has been excellent and we are considering both internal and external candidates. Now, let me turn the call over to the operator for Q&A.

(Operator Instructions) Reik Reed, you may ask your question. Please state your company name.

Hello.

Go ahead, we hear you.

Can you guys talk about the retail space? Bill, you talked about the weakness you have seen there. It seems like it is an incremental step function down. Can you break it up between Teradata, point-of-sale, and the self-service area?

I will hit point-of-sale first and then Teradata. On the point-of-sale side, we typically in the first quarter are rolling out several large assisted point of sale opportunities with major customers and we simply didn't have them in the first quarter. We also were anticipating one large customer to close in Q4, and begin rollouts in Q1. We did end up closing that opportunity in Q1. It was with the Federated Department Store group for an extremely large rollout of point-of-sale. We'll begin that now in Q2 versus Q1. So, the timing of major rollouts did impact us negatively in Q1. On the Teradata side, it is simply a difficult compare, as you well know. Teradata's retail business has traditionally been an engine of growth for us, and a major driver as we have expanded into new industries and have had success into new industries as well. It is certainly going to be a lower percentage of the business. We had some one-time large transactions in the first quarter of last year that didn't repeat themselves and the first quarter of this year. I would say it is a bit of lumpiness that we saw that impacted us in the Teradata space. Pete, do you have any other…

No, I think the retail, the backlog is very strong. That said, the move out of when the rollout started caused us to be a little more cautious on the volume potential for the year. Self-service activity in retail is strong and held its own in the first quarter. The decline was all in the traditional point-of-sale space. That's the way I look at it.

So sounds like there was customer specific issues that you are citing there, but you guys have also lowered the guidance a little bit and Bill, in your commentary, you identified some key issues. Can you talk a little about, more broadly -- is there something in the marketplace or is there something that NCR has to do specifically to get that moving?

Yes, just to the last point, I think we are, as we discussed before as well. We certainly are working towards going down market more effectively in the retail space beyond the tier one customer base. And certainly when a smaller number of your customers drives a great majority of your revenue, when you have one or two deals potentially fall out in a given quarter, you can end up where we did in Q1 on the assisted side. As Pete mentioned, however, we continue to see good traction in the self-service portion of the retail business. In terms of anything endemic in the space, I don't think that that's the case today, and we continue to keep a close eye on it.

Okay. Just on the Teradata side, can you talk about the factors behind the mix changes there and the expectations for mix and how that might affect margins in the next couple of quarters?

What we tried to do in release was sequence, call it the relative size of the three factors. I think the first data point we didn't talk about a lot last year is -- when we had a very low revenue quarter in Data Warehouse last year, we actually had a very strong mix. And to get above 20% margins with $326 million of revenue was a very, very strong mix. So when you look at the number one driver, it was really the mix in the quarter. We expect that there will be other quarters that have a more favorable mix. Net net, the guidance for the year didn't change. Then the second one is -- we had already baked into the plan the continued investment in demand creation and I quantified that in the script as kind of a $9 million number. And then the smaller piece was the legal reserve for a 2002 item, which was much smaller. Look at that as the kind of three factors that impacted Q1. The mix -- we fully expect to normalize over time, both from software content and a relative hardware mix. The demand creation was baked into the plan of record and the initial guidance -- and then the smaller China component we expect to recover from.

So, I guess what I am hearing you say, Pete, is that is no real -- we shouldn't expect any real change in mix from here. It is reasonably stable. And with respect to investments, maybe a similar story is that you are not going to see a step function increase. It is continued investment that you planned on for those areas. Is that correct? Also, can you tell us what the China legal issue is and how quickly that can be put to bed?

I think the way to look at it is the mix. Large deals drive different mix in different quarters. We don't expect that to be a full year impact and I reinforce the guidance around the NPOI targets. The demand creation is upticking, but it is the plan of record to continue to invest. And then, this is a 2002 item where we had to take -- we had an initial reserve and we had to adjust the reserve. It is not material enough to go into any more detail than that.

Thank you, guys.

Thanks, Reik.

Matt Summerville, you may ask your question and please state your company name.

Hey, it's Matt with Key. In terms of the duplicative costs you have with Scotland running and Budapest running, when do you think those costs come to an end? And Bill, can you rank order or give us a sense of how the downward trajectory looks and it would obviously be very helpful if you could quantify what that cost was in the first quarter.

As you mentioned, in the first quarter we had two factories full-out up and running as we were making this transition and managing our way through it. I do expect that we will get some slight benefit in Q2, as in Q2 we are now more so moving the head count out and the transition is in midstream. Most of the benefit, Matt, will come in Q3 and Q4 in this year. I don't think we've provided any numbers today, but we are comfortable that in Q3 and Q4, we should see the vast majority of that benefit from these most recent actions we took in January.

Okay. Based on what -- again, sticking with ATMs, based on what your customers are telling you, can you talk about Europe and Asia? How orders, backlog trends are there, and with Europe both Western and Eastern. And in the U.S., how you see the trajectory of Check 21 as well? What are you seeing among big banks, regionals, etcetera?

Very strong International, both order book and revenue. It continued in Q1, as we, in the Americas, the Americas continued to be weak. As we go forward and by the way, on the America side, when you look at the weakness in Q1 as well, I would cite that similar to retail, but only in the financial sense. We had several deployments underway with large customers to roll out what was in the backlog in the quarter, and so it did impact us to some extent, this lack of -- well, a timing issue in Q1 in the Americas. That being said, as we go forward, we are looking towards deposit automation to continue to mature. We have several thousand units in the United States today that are Check 21 I should say intelligent deposit enabled. Several pilots are now moving deeply into production. I don't expect there to be a material impact on the company in the Americas in 2007. I still expect that we'll see consistent maturation of these pilots and other customers moving in the direction of deposit automation, and I still continue to think 2008 will be a stronger year with respect to deposit automation upgrades as well as 2009.

You mentioned on Customer Services, the two keys are continuing to get the mix of business right. Do you see the revenue trend on the ATM line continuing at that sort of rate? And going forward, what are the other cost opportunities in that business?

Yes. So, just a couple of comments on the success we have had in services and in our annuity file value. Over the last few years, we have seen a rate of growth decline in that space. So we are playing catch up in many regards. So the year over year compares are favorable. As we move forward, I do expect us to continue to drive hard and greater annuity success. I won't give you a forecast right now. We don't have that crystal ball. But we are working hard to drive share on the services side, and frankly our services delivery is improving. So the quality of what we deliver to customers is improving. Therefore, I think we have a good opportunity to continue with some of the successes we have. But we don't have a forecast for you now, Matt.

The only thing I would add is in the 2 to 3% revised guidance; clearly the NCR content is going to lead the rest of the revenue portfolio. And Self-Service is going to lead all the NCR content. So without saying it is going to be like the 10% we just did, it is going to be the best performer based on certainly getting more volume helps like we did in Q1. But think of it that way. It has got the potential to grow the best. Then we have upticked the year for customer services. A piece of it related to the NCR content.

Okay, then, lastly on Teradata. I assume -- was that $9 million all Teradata related? That net increase and demand creation?

Yes, it was, Matt.

And then is that the rate you expect on a quarterly basis? Should we be thinking about somewhere in the neighborhood of $35 million to $40 million of net extra spend in that division versus 2006?

We are continuing to invest. It's baked into the Op margins. We continue to get strong gross margins from the business and we believe we can balance the revenue growth with the gross margin potential and deliver the 22, 23 and still invest for the future. And $9 million is what we did in Q1.

That's all I have. Congratulations, Pete.

Thank you, Matt.

Richard Farmer, you may ask your question. And please state your company name.

Richard Farmer, Merrill Lynch. Just a few questions. First, a follow up on the Teradata pipeline and the enterprise spending environment. I think you indicated that there wasn't really a weakness in enterprise demand like some of the other companies like IBM and Sun talked about in March. And this was more of a customer-specific, Teradata-specific pipeline trend that got you to your revenue in the March quarter. But could I just clarify that that's the correct interpretation?

Yes, Richard. And the activity level in Teradata also continues to improve. So I'm encouraged with what we call our funnel, and we've described in the past on this call as our funnel, which is a review of future potential opportunity that has continued to improve. We had good traction in the first quarter with regard to new customer wins. And looking out, both Pete and I remain relatively encouraged with the pipeline, sales activity and potential new customer wins for the rest the year.

Richard, I would say the 10% growth we had in the quarter was pretty much in line. So there weren't a lot of puts and takes around the revenue story in total for Teradata in Q1.

Yes, and on the macro environment, to answer this question. On macro environment in terms of the U.S., I am out of the forecast business on the economy. I will leave that to those economists out there in the market.

Okay. Thanks. Switching to the ATM business, I am just trying to understand -- obviously very strong growth, 20% in the quarter. The revenue guidance that you provided for the year is only slightly higher. Why wouldn't that strengthen the revenue and continue into the full year?

Yes, Richard. I think it is too early right now. We did have favorable timing of large transactions in the International markets come in and play in that Q1 success. I agree with strong revenue growth. Too early to call the ball for the rest of the year.

Okay. Thanks. And Pete, you made some comments on capital structure and you might elaborate a little. You talked about no share repurchase and maintaining flexibility for the capital structure for each of the entities. Would you consider a recapitalization similar to the debt finance share buyback that IBM announced? Could you elaborate a little on your plans for capital structure?

Yes, I will take that, Richard. First of all, to maintain maximum flexibility as we go through the separation process, we really are focused on building two strong balance sheets and two strong capital structures for these two new companies. So, we are likely to maintain a more conservative posture until the spin-off. However, that being said, everything is on the table subsequent to the spin in terms of what these two companies need to do to achieve the very best shareholder value. And we are really working through those strategic plans as we speak. Would we consider a recap? Yes. But there are a variety of other things that we would consider as well to drive shareholder value.

Okay, one final one. On ATM pricing trends and your expectations there going forward, any comments you may provide? Thank you.

Relative pricing stability would be my macro comment around the world. I would say we did see some more aggressiveness in the Americas market over the last few months, but nothing of substance. Certainly the internationally emerging markets tend to be more price-aggressive -- the Indias, the Chinas, and to some extent the Eastern Europes.

Richard, the way I look at it as, less of a in-market year on year pricing. It's much more of a mix. Clearly as we talked about before, there are certain markets where the profit potential and let's call it the overall functionality of the ATM can give us a better opportunity to get higher margins. I would call it more of a mix, which is why we talked about the Americas and other markets, more than it is a year on year pricing aggressiveness for that market.

Thanks very much.

Thank you.

Katie Huberty, you may ask your question and please state your company name.

Katie Huberty from Morgan Stanley. Bill, you mentioned deposit automation uptake as a factor in Western Europe's strength. Are we seeing a faster adoption rate in Europe versus the U.S. or is that strength just relative to expectations?

No, we have seen a faster adoption with regard to deposit automation in Europe. It is different than Check 21 in the United States. It is important that you understand the difference by country. I won't get into the specifics except to say -- actually, Katie, our largest deposit automation customer in the world is in Europe and they have been further ahead -- the implementation of which is different by country and slightly different or very different in most circumstances to Check 21 in the United States.

Okay. Then just quickly on Teradata, could we see the revenue mix start to shift back towards software as soon as the June quarter? Is that something you are looking for over the next two or three quarters?

Yes, I think it is just different deals have different mix depending on where the customer is and what additional slices of capacity they need. So we had a great mix in 2006 first quarter. We had a less favorable mix in first quarter of 2007. I expect it to normalize through the year and not be a full year factor as we go forward.

Katie, this is Bill. The way I would view -- it is more of a quarterly thing. There's really nothing new here. There's no dynamic that should change or affect the mix from normalizing throughout the rest of the year.

Great, thanks.

Gil Luria, you may ask your question, and please state your company name.

Wedbush. Just one question today. When you talk about handing off production to Selectron in the U.S. are you referring in the first stage to them taking over production in your existing plants? Or what is the timeline for them moving production to their own plant?

Yes -- to answer the last question first, because it is an important precursor. These are their plants and they are already up and running. We have been working with them for several months now to get them prepared to kickoff and really what we are looking at, Gil, is a transition. It is starting in Q3. We are being very careful about our transition here despite the fact that they are experts in manufacturing. In one instance, for one product line which has already been launched through Selectron in the company, not in the Financial Services based FastLanes. We have experienced extremely high quality off the end of the line and some additional cost savings. So we have been encouraged with the FastLane product line going through Selectron. We continue to work with them on the ATM side. The transition starts in Q3.

Thank you.

We have time for one more question. Matt Summerville. You may ask your question and please state your company name.

Just to follow up here on -- Pete, I think it was you that mentioned you anticipate $50 million of expenses related to the separation. Can you talk about what that encompasses?

Yes, those are characterized as one time costs associated with developing -- executing the transaction of creating two public companies. That would include investment banker costs, external counsel. We have some expertise from organizations that have been involved in spins before us as far as developing our shared services -- G&A, blueprint, setting up tax entities in each country has a cost to it. We have defined, where Teradata is going to have a legal entity going forward. Then we've got to go execute establishing those legal entities. It is really the tax investment banking, legal council, and some element of internal knowledge of how to do -- what to look for and how to effectively execute a spin-off.

Okay. Then assuming the companies are together for the full year for my model. What is the depreciation, amortization, and CapEx?

Yes, assuming starting the year and finishing the year in the same state, the expenditures is $175 million.

Okay.

As you know, that is PP&E and capitalized software, no service parts in that number. And the D&A number is $165 million.

Okay. Thank you.

Thank you, Matt and I wanted to just take an opportunity to thank everybody for being -- I am sorry we had to have a lot less time for this particular call. It was a little bit short. I appreciate you all being on the call and we look forward to speaking to you again in July.