Welcome and thank you for standing by. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. I will now turn the conference over to Mr. Gavin Bell. Sir, you may begin.

Thank you, Don. Good afternoon, and thanks, everyone, for joining us for our second quarter 2011 earnings call. Bill Nuti, NCR's Chairman and Chief Executive Officer, will lead our conference call this afternoon. After Bill’s opening remarks, John Bruno, Executive Vice President of our Industry Solutions Group, will update you on progress with respect to certain key initiatives; Bob Fishman, NCR’s Chief Financial Officer, will then provide comments on NCR’s total company financial results. Our discussion today includes forecast 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 in our annual report to stockholders. On today's call, we will also be discussing certain non-GAAP financial information, such as free cash flow, and results excluding the impact of pension and other items. Reconciliations of non-GAAP financial results to our reported and forecasted GAAP results and other information concerning such measures are included in our earnings press release and are also available on the Investor page of NCR’s website. A replay of this conference call will be available on NCR’s website, ncr.com. For those listening to the replay of this call, please keep in mind that the information discussed is as of July 21, 2011, and 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. With that, I'll turn the call over to Bill.

Thank you, Gavin. Good afternoon, and thank you all for joining us. Our second quarter results were strong and demonstrate the continuation of the positive business trends we've experienced over the past several quarters. The recovery in our core financial and retail industries is gaining traction. NCR's commitment to innovation has positioned us to win market share with leading technologies and solutions that deliver competitive advantages to our customers. This valued proposition extends to our Emerging Industries, where we are expanding in the telecom and technology, travel and entertainment verticals. The momentum and underlying strength across our Solutions business is supported by the solid performance of our Services group during the quarter, as well as our ongoing commitment to strengthening NCR as a company and accelerating our growth prospects. This strategy is clearly evidenced by our planned acquisition of Radiant Systems. As you know, we signed a definitive merger agreement to purchase Radiant Systems in a transaction valued at roughly $1.2 billion. This acquisition is a perfect fit for NCR, as it will add category leadership in hospitality, convenience and specialty retail. We've talked about hospitality being a natural growth vertical for NCR, and by virtue of this transaction, we'll become an immediate market share leader. Radiant possesses proven category expertise, and together with our global reach in resources, we will create a robust and globally accessible suite of solutions and technologies supported by a best-in-class services organization. We believe that the revenue opportunities available from this highly complementary combination are significant, and we also expect the combination will generate annualized pretax cost synergies of approximately $40 million to $50 million to be realized over 3 years. We believe the combination of NCR's and Radiant's assets and the mutual importance placed on software-enabled business models on innovation and on superior…

Thank you, Bill, and good afternoon, everyone. Bill updated you on our core lines of business so I'd like to give you an update and provide further insight onto progress, deploying SelfServ solutions across Entertainment and Emerging Industry segments. Looking first at Entertainment. We had approximately 9,600 kiosks deployed at the end of the second quarter compared to 8,000 at the end of 2010. As we said previously, we continue to redeploy underperforming kiosks as we seek to grow our transaction volume, improve our per unit economics and design our kiosk footprint to meet our profitability goals. We are having success in this area as our per unit economics continue to improve. As Bill mentioned, revenues grew 65%, and importantly, same-store sales grew 30% over last year's Q2. A total of 700 kiosks were deployed in the second quarter through partnerships across key strategic markets. Our biggest win was a competitive one, the deployment of more than 800 kiosks at Food Lion grocery stores across 11 states in the Southeast and mid-Atlantic regions. The kiosks will also be installed at other Delhaize America supermarkets, including Bottom Dollar Food, Harveys and Reid's grocery stores. Our partnership with Delhaize is particularly noteworthy because 200 of the kiosks are redeployed machines. As you know, we identified 1,600 underperforming kiosks at the end of 2010 and have been moving diligently and efficiently to adjust our offering in kiosk footprint. Together with the 300 kiosks redeployed in Q1, we have now returned 600 kiosks to the market with valuable partners in geographic areas that we expect will strengthen our per unit economics and drive revenue and profitability growth in the quarters ahead. We continue to pursue other strategic initiatives including premium pricing for new releases and cross-selling. Testing of our premium pricing offering is going…

Okay. Thanks, John. NCR's total revenue in the second quarter was $1.31 billion, up 12% versus Q2 2010. Second quarter revenues include a 6% benefit from foreign currency translation. We reported GAAP income from continuing operations attributable to NCR of $35 million or $0.22 per diluted share. This compares to GAAP income from continuing operations attributable to NCR of $20 million or $0.12 per diluted share in Q2 2010. NCR's results from continuing operations include special items in both periods. Income from continuing operations in the second quarter of 2011 included $53 million or $0.23 per diluted share after-tax of pension expense and $1 million or $0.01 per diluted share after-tax of acquisition-related costs. Income from continuing operations in the second quarter of 2010 included $50 million or $0.20 per diluted share after-tax of pension expense, and $7 million or $0.03 per diluted share after-tax of incremental costs related to the relocation of the company's global headquarters. Excluding these items, non-GAAP diluted income per share is $0.46 per share in Q2 2011 compared to non-GAAP earnings of $0.35 per diluted share in Q2 2010. To analyze NCR's operational performance without the effects of special items and pension expense, please see the supplemental financial schedule included in our earnings press release that reconciles our GAAP to non-GAAP results. Excluding the impact of special item from pension expense, our Q2 2011 gross margin was 23%, up 10 basis points from 22.9% in the prior-year period, resulting from higher product sales, favorable mix and the successful implementation of cost reduction initiatives, driven by our continuous improvement program. Operating expenses, excluding pension expense and special items, were 15.3% of revenue in Q2 2011 versus 15.4% in Q2 2010. The decrease was the result of our continued focus on expenses even with the higher revenue…

Thank you, Bob. NCR generated strong results during the second quarter. Steadfast execution, our commitment to innovation, global balance, end market share gains, are all contributing to sustained order momentum in our core solutions, as well as continued traction in Emerging Industries. In tandem, our Services business is delivering differentiated and value-added offers to our customers, and our ability to secure operational efficiencies across NCR is continuing to deliver good returns. Our results, particularly the performance in order momentum we're seeing in our core solutions, have given us the comfort to raise our full year revenue and earnings guidance. And we expect our growth profile will be greatly strengthened by our planned acquisition of Radiant. Radiant will give NCR a third core vertical in hospitality that fits very well, strategically, with our existing businesses, improves our revenue mix, particularly in software, and provides new opportunities to leverage our global footprint to drive international growth. As you can see, it's been a very successful and busy first half of the year. We're on track with our near-term goals and we're taking the steps to set us up for an improved longer-term growth profile with higher margins. We continue to execute well, we are excited about our future, and we look forward to updating you as the second half of the year unfolds. Thank you, and I'd like -- now, I could turn the call back to Gavin Bell before taking questions. Gavin?

Thanks, Bill. Before we open it up to Q&A and given that we discussed the Radiant acquisition on the call, I wanted to mention that our call today does not represent an offer to buy or the solicitation of an offer to sell any securities. NCR will file a tender offer statement on schedule PO, including an offer to purchase a related letter of transmittal and other tender offer documents with the SEC. These materials will be available on the SEC's website, www.sec.gov, and should be read carefully, when available, because they contain important information, including the terms and conditions of the offer. And with that, I'd like to open it up for questions. Don?

[Operator Instructions] Our first question comes from Julio Quinteros.

This is Roman Leal. I'm going to roll one in for Julio. I just wanted to dig a little bit deeper on the Oracle, which is very strong in Financial Services. How much of that is being driven by the smaller community banks and maybe even the credit units at this point? And then can you remind us what the -- what's the differential in terms of the economics between kind of typical small bank order versus a midsize regional order?

; Well, we had very strong growth in the midsize and regional bank segment in the U.S. this past quarter, over 100% growth, about 115% growth. And that's off a fairly solid number. So it was a driver of the year-over-year 27% total growth in the business. It's still smaller on an aggregate basis than the whole, but it's getting bigger by the quarter. So we've been pleased with our growth there, Roman. And the economics are simple. You should think about the midsize banks globally, not just in the U.S., as having a margin profile around twice the margin profile that we get in large banks, either top 10 or 20 banks around the world. So call it mid-40s to high-40s in that segment, it can even go higher. On certain quarters, we're in the low 50s versus mid-20s in large banks.

Okay, that's very helpful. And then on the Entertainment business, obviously, you're moving along and redeploying some of these underperforming kiosks. Just curious to hear, you're speaking to multiple parties and just kind of you still hold on to the optionality there. What's -- in your view, what's the kind of best case scenario here? Or what's your kind of ideal outcome?

What -- I don't know if there's a best case scenario here. I think we feel very good about how the business is operating today. On a go-forward basis, we feel good about this business becoming profitable next year, significantly. But we do have significant interest that's been expressed by multiple parties for this business. So at the end of the day, we're going to do what's in the best interest of the shareholder. And analyze any external offer, partnership or acquisition, as well as internally, what we think we can return to the shareholders over a reasonable amount of time, running this business as part of NCR.

The next question comes from Katy Huberty.

First, on the services side of the business, it surprised [ph] both on revenue and margins versus our model. So can you talk about where you are in the reinvestment and restructuring of that segment? Are you ahead of plan, given the results this quarter?

Yes, we're well ahead of plan, Katy. This business has done extraordinarily well for the last several quarters. We feel very good about where we are today. And we've made significant investments over the last 2 to 3 years in multiple dimensions, In people, in management, in infrastructure, in systems and tools. And so what we're seeing now is a combination of the productivity gains as a result of those investments, but we've also put a lot of time and effort into the creation of new offers, widening the offers we sell into the marketplace. So we are no longer just a break, fix and manage services business. Our offers are becoming much wider through our customer set. We're expanding those offers in multiple industries, and we're expanding those offers in multiple countries, in multiple industries. So what we're seeing now is the growth that's coming along with that plan. We did not anticipate the growth to be quite as robust as it is today, as early in the process of this transformation. We're pleased with it. That being said, we've got to continue the momentum. So there's a lot of work ahead of us to continue that momentum. Frankly, I'm pleased about the Radiant acquisition because it allows us, once closed, to expand the services footprint into this vertical market known as hospitality, that segment of the market, and this is a chance to expand that footprint. John?

Yes, Katy, I'd add only one additional comment to Bill's, and that would be our team has done a very good job in protecting and enhancing the base book of business, a thing we call file value, which year-on-year, we look at the total book of business and we always estimate erosion in your file value, contracts that may not renew or pricing that may not be what it needs to do in your plan. And our team has done a solid job in minimizing file value erosion and maintaining the profitability on those deals. And that only happens when you deliver excellent service. So the enhancements for the service portfolio and all the changes within the business has truly allowed for us to protect that base and then enhance it with all the things that Bill mentioned. And now, with the ability to go into the hospitality market and down market with Radiant is just a great opportunity for us, given the size, breadth and depth of that business.

Yes. And lastly, Katy, when you look at our Telecom and Technology business, which is now becoming a sizable services business, I mentioned to you earlier that we're expanding our offers. We're now providing services, value-added services, at mid-40s margins to telecom companies, becoming essentially their arm for delivery of managed services, and OEMs, becoming their back-end for delivery of services as well. That business grew 22%, year-on-year. So again, a number of adjacencies we've expanded into are growing faster than we quite frankly expected.

The next question comes from Gil Luria.

You raised guidance by $0.03, but it looks like the core business, you raised the guidance buy a lot more than that. It looks like in DVD, you're already at the high end of your guidance in terms of loss for the year. Would you mind updating your guidance for the DVD loss for the year so we can get a sense of how much better the core business is doing?

Go ahead, Bob.

Yes. We gave a range at the beginning of the year for the Entertainment business, and there's no doubt that we're probably tracking closer to the higher, I would say, the higher end of that loss. And so we need the core businesses to make up for that. That being said, we are on track to deliver the revenue for the business. We had a good Q1 and a good Q2. The financial business has strong backlog to support the NPOI for the full year. And the Retail business is going into the back half of the year with backlog up 10%. So core business doing well, Entertainment roughly on track and the Emerging Industries are continuing to track towards that 10% to 15% revenue growth.

I thought your original guidance was $25 million to $35 million NPOI loss, and you're already at $32 million after the second quarter. Wouldn't that mean that we're going to be above the high end of the range for Entertainment for the year?

Yes, there is no doubt, Gil, we have work to do. What the back half of the year is suggesting is we've got an extra $25 million of revenue than what we did in the first half of the year. That, plus some efficiencies in the business...

Will flow-through on that revenue [indiscernible]...

Well, the flow-through on the revenue should be strong. So I'm saying we're at the top end. We've got a shot at making that negative $35 million loss. We're pushing the team hard, Gil, and I'm not giving up on making that negative $35 million loss. But you're right, year-to-date, the number is tracking and causes some pressure on the back half of the year.

Then my second question is on Europe. There's been some technology companies that have reported issues in Europe. It seems like you're still doing well. Could you help us quantify how well you're doing there? Maybe help us understand the contribution from how well that market is doing for you versus how much you're doing from share gains?

Total orders, Gil, in Europe were up a little over 16% year-on-year. We did get significant help from foreign currency translation, but even then, orders were up healthily on a year-over-year basis. On the revenue side of the equation, revenue for Europe, we were up a little bit year-on-year, call it 3% for scale on revenue. So we built a little backlog in the quarter. I'd say, the biggest driver of our success in Europe is Financial. Financial in Europe was up over 33% year-on-year for us, so a very significant growth in orders in Financial on a year-on-year basis. When you look at revenue, again, Financial was a key driver, up 6%. By the way, software and technology, that Telecom and Technology business and services was up 28% year-on-year in that market and becoming very substantial in terms of revenue, but Financial is the key driver. We're seeing good traction in Europe, Gil. No question that the macroenvironment in Europe continues to concern us on a long-term basis, but we're executing very well there and we had a solid quarter.

I'm showing no further questions in the queue.

Okay. Thank you very much, folks, for joining our call and we'll talk to you next quarter.