Welcome, and thank you for standing by. [Operator Instructions] Today's conference call is being recorded. If you have any objections to this, you may disconnect at any time. And now I would like to introduce your host for today's conference call, Gavin Bell, Vice President of Investor Relations. Sir, please go ahead.

Thanks, Brad. Good afternoon, and thank you, everyone, for joining us for our Fourth 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, Peter Dorsman, Executive Vice President of our Industry Solutions Group and Global Operations 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 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 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 later today 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 February 6, 2012, 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. I'll now turn the call over to Bill.

Thank you, Gavin. Good afternoon, and thank you all for joining us. 2011 was a highly successful year for NCR featuring record revenue, gross margin and NPOI and $151 million or more than 400% year-over-year increase in free cash flow. We finished the year well ahead of expectations as full year revenues grew 13% and nonpension operating income, or NPOI, totaled $434 million, an increase of 28% versus 2010. Our operating margins continue to improve as evidenced by full year NPOI margin of 9.1%, excluding the Entertainment business, an increase of 110 basis points compared to 2010 and the highest since the 2007 Teradata spinoff. We ended the year with order growth up 18% versus last year. It is important to note that this growth does not include Hospitality and Specialty Retail, or HSR, a segment that we expect to be a key growth driver in 2012 and beyond. Backlog at the end of the year was over $1 billion, up 14% versus the prior year period. We've now delivered 9 consecutive quarters of year-on-year backlog growth, and we entered 2012 with our highest backlog for the first quarter in our history. Our financial results and strong pipeline demonstrates that our business strategy to deliver profitable revenue growth, gross margin expansion and an improved consumer experience is delivering tangible returns. Our discipline in the areas of strategy execution, investment and innovation, continuous improvement and a focus on delivering great service are all the reasons why 2011 was a successful year and why we entered 2012 with confidence. In terms of gross margin expansion, we are continuing to make progress in building our capabilities in 2 critical areas, software and services. Software revenues, including our rapidly growing software-as-a-service business, grew 52% in Q4 versus the prior quarter and 31% in full…

Thanks, Bill. And thank you to everyone who has joined us. Looking first at Financial Services, we generated 16% revenue growth in Q4, driven by continued strong and balanced performances across most key theaters including North America, BICMEA and CLA. Following a 60% increase in Q3, order growth remains healthy and was up 2% year-over-year during the fourth quarter and 24% for the full year, which resulted in backlog growth of 21%. A key component of our performance was the midsize and regional U.S. banks, which continue to ramp up spending in an effort to narrow the competitive gap with large financial institutions. Regional bank orders and revenue more than doubled in the fourth quarter compared to the prior year period. Our backlog is a result of our ability to deliver highly innovative solutions to our financial customers that differentiate their offering from competitors. One of these solutions is our single deposit module ATM. Recently, TruWest Credit Union, which serves 60,000 members in Phoenix, Arizona and Austin, Texas, agreed to replace its fleet of non-NCR ATMs with NCR SelfServ 32, 34 and 38 models, complete with our SDM technology. SDM is also being adopted by the Peoples Bank of Alabama, which is supplying NCR SelfServ ATMs, which will result in productivity gains and an improved transaction experience for its customers. Our innovations extend beyond ATM hardware. Our recent partnership with PayPal and S1 Corporation will enable realtime, person-to-person payments from bank ATMs to almost anyone with a mobile phone or e-mail address. Consumers will be able to transfer money to another person through our bank ATM simply by entering the amount of money to be sent and the recipient's e-mail address or mobile phone number. The service will initially be available in the U.S. with the ability to send money…

Thanks, Pete. NCR's total revenue in the fourth quarter was $1.64 billion, up 17% versus Q4 of 2010 on both an actual and constant currency basis. We reported GAAP loss from continuing operations of $13 million or $0.08 per diluted share. This compares to GAAP income from continuing operations of $33 million or $0.20 per diluted share in Q4 of 2010. NCR's results from continuing operations, includes special items in both periods. Income from continuing operations in the fourth quarter of 2011 included $56 million or $0.23 per share of pension expense, $98 million or $0.43 per share of an impairment charge related to the Entertainment line of business, $5 million or $0.02 per share of acquisition-related transaction costs, $1 million or $0.01 per share of acquisition-related severance costs and $9 million or $0.04 per share of acquisition-related amortization of intangible assets. Income from continuing operations in the fourth quarter of 2010 included $52 million or $0.27 per share of pension expense, a $14 million or $0.06 per share impairment charge related to an investment and an $8 million or $0.03 per share litigation charge. Excluding these items, non-GAAP diluted income per share was $0.65 per share in Q4 2011 versus earnings of $0.56 per diluted share in Q4 2010. To analyze NCR's operational performance without the effect 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 items and pension expense, our Q4 2011 gross margin was 25.2%, up 270 basis points from 22.5% in the prior year period, resulting from higher product and services sales, favorable customer and product mix, including significantly more software and the successful implementation of cost-reduction initiatives driven by our continuous improvement program. And…

Thanks, Bob and Peter. In summary, 2011 was a breakthrough year for NCR as we delivered double-digit profitable revenue growth, significant gross margin expansion and improved consumer loyalty. In addition, we continue to reshape the business model for our future with significant growth in software and services, becoming a large software company inside of what was once known as a hardware-only company. Moreover, we streamlined our strategic focus through the acquisition of Radiant, our alliance with Scopus Technology (sic) [Tecnologia] in Brazil and the disposition of our healthcare assets and our just-announced agreement to dispose the assets of our Entertainment line of business. In 2012, we will continue to focus on profitable growth and favorable mix shift in our core industries, expansion of our Emerging Industries, continuous improvement execution and creating competitive differentiation through world-class service delivery and innovation. Within the business, we also have an underlying set of strategic imperatives that align with our financial objectives for 2012 and beyond. First is to deliver on the promise of disruptive innovation in a manner that dramatically increases the value we deliver to our customers, while dramatically lowering the underlying cost structure of our solutions. Second is to emphasize the migration of our revenue mix to higher-margin software and services revenues. And third is to increasingly enable our sales force around the consultative selling model that better leverages the innovation we're bringing to market. Delivering value to our customers and innovation remains top priorities for all of NCR. We enabled 300 million customer transactions globally each day, which equates to 110 billion transactions each year. NCR is becoming the backbone behind how consumers are connecting, interacting and transacting with business. That concludes our prepared remarks. In addition to Bob and Peter, I've asked John Bruno to join us for the Q&A portion of this call. Let's open that up now.

[Operator Instructions] Our first question will come from Julio Quinteros of Goldman Sachs.

It's Roman Leal here for Julio. Few questions, first of all, can you remind us what the time line was for -- I believe your gross margin target of about 10% given all the moving parts and the exiting of Entertainment business, how do you think about that? Can you reach that a little bit quicker? Would be very helpful.

Yes. I think you're talking about NPOI margin of 10%. We gave you guidance that, that was our goal within the 3-year period last year, so 2013. I think we have an ample opportunity to move that up into 2012. I'd be disappointed in 2012 if one or 2 quarters, we didn't hit that number and be well on track in 2013. So we'll meet or exceed our commitment probably by 6 to 12 months.

Great. And are you guys ready to kind of walk us through what do you think the share of services revenue can get to from the roughly 50% currently?

I think share of service right now is up to 60%, you're right. The optimal for us to model is software and the services being about 80% of the business and solution, being hardware, being about 20%. I -- look at this juncture, we're growing services more quickly than we anticipated. As we've said, our file value is up 8%, both on a reported and FX neutral basis year-on-year. That's a big number for us. We're going to try to do that again this year. I think we’re at a reasonably good mix on services. The key for us is software growth. We're growing software faster than we thought as well, and I anticipate that we will grow software again more quickly than we anticipate this year. And by the end of next year, that software services number will be 80%, the rest of the company 20%. So we'll be where we want to be by the end of next year.

Okay. And on the retail side, what are some of the signals that make you bullish on an upcoming retail upgrade cycle? I mean is this mostly in the U.S? Mostly self-service? Or is it more broad based than that?

11% order growth in Q4 is the first signal. So we had a good quarter in terms of order growth in Q4 on Retail. So we're coming out of the blocks with a reasonably good backlog position in Retail in Q1. We have been, for the last 12 months, undergoing a lot of work internally to expand our Retail business in under-penetrated markets, moving more aggressively into the emerging countries, going down market vis-à-vis the channel. And we have a lot of innovation going on in that space. Some of which we'll talk to you about it in April that we think could change the curve of that business dramatically for us. So I feel very good about the outlook we gave you and would be disappointed if we didn't beat it.

Great. And just the last one, can you give us any more color on the order growth in the ATM business?

Yes. The order growth in the ATM business was 2% in Q4, but off of a Q3 that was up 60. So we had a huge Q3. A lot of orders that we wanted to get in Q4, frankly, were pulled in. So I'm comfortable with where we are. The backlog going into the year on financial is up 21%. So we're in a wonderful position coming into the year. The thing you want to keep an eye on is order growth in Q1, Q2.

Our next question will come from the Dan Dolev of Morgan Stanley.

Just 2 quick questions. First thing, you just mentioned order growth, can you talk a little bit -- it seems to me just from not -- what was not on the press release in terms of the financials was Europe. Can you just maybe talk about some of the -- what's going on in Europe right now and how has it been evolving early in the year in terms of orders and ATMs, et cetera? And then if you could just comment on some of the margin issues with Retail -- not issues, but margins are down, just if you can give some color on if you think this is going to be reversing anytime soon.

Yes. First I'll talk about Europe. Europe orders in the fourth quarter were down 11%. But on the year, we were up about 2% or 3% in orders. As I've said, many times before, about flattish. We expect the same for '12 kind of flat order growth that was baked into our current guidance. I'd like to think we can do better in Europe, but just given the conditions in Europe I think flat is really where we're going to land at the end of the year in terms of orders. Eastern Europe is doing significantly better than Western Europe. Although in Western Europe, we're doing something that's very important. We're winning market share while the market is challenged. So the good news is when the market does turn in Western Europe, we'll be better positioned in that part of the world. We have good quarters. We have okay quarters. Europe is not a significant issue for us in light of the many macro-concerns people have right now. And again I think flat is where it's going to land. Retail margins in the fourth quarter, Bob, can you?

Yes, I can take that one. What drove -- well first of all, for full year retail margin, operating margin is up from 4.6% to 4.7%. In Q4, it was down. Revenue was down and that drove some of it. Revenue was down 2%. But the biggest driver was our consumables business within the Retail line of business. Paper prices were higher year-on-year, and it had a negative impact on the overall operating margin.

Our next question will come from Gil Luria of Wedbush Securities.

In the ATM business in 2011, you grew far faster than the market and your competitors pointing to share gains in many regions. In 2012, how much of the 5% to 7% guidance is factoring first your continued share gains?

Not a lot, Gil. I mean right now the market is, if you look at any indicator, it's going to grow around 4% to 6% in that range, if you look at RBR or other sources in terms of units. And so our 5% to 7% does not anticipate the kinds of market share gains we experienced in '11, of current guidance.

In spite of the ramp in Brazil and the continued success in the U.S. and competitors withdrawing in Europe continuing going forward?

I'm sorry, Gil, say that again?

Let me just move to the Retail business. How much of a threat or opportunity is the introduction of more mobile products for retailers at the point-of-sale and supplementing the point-of-sale. You mentioned a few products in the prepared remarks that you have mobile, but do you see iPad-based solutions, iPad-only solutions as a threat to your Retail business? Or is there an opportunity for you to sell more products to those customers?

Gil, that could be the game changer for NCR. We introduced the product at NRF called Silver, and you should -- we'll get you information on it. It is potentially a game changer for us, assuming we execute from a distribution and go-to-market point of view in SMB, which we intend to do. It is a significantly better product than Square and a significantly more scalable product than Square and frankly better than other alternatives available in the market today. It's a SaaS-based, cloud-based offer that has very low incoming CapEx requirements and a reasonable month-to-month, if you will, subscription fee for the services of point-of-sale and a variety of other applications, and include loyalty and otherwise. It does fit on top of iPad, iPods in point-of-sale devices. We are currently in pilot and testing it. We will be going live and introducing it later this year and scale. You're talking about a product set that could help a company who lost its way in 1969, moving from electromechanical to digital to completely reversing the trend in a go-forward basis. So we are very enthusiastic about the mobile trend. And beyond mobile point-of-sale for small and medium business, we have a variety of mobile -- of applications for mobile self-checkout in-aisle applications, and we've introduced those as well in NRF, and we feel like that is a massive opportunity for the company. John, did you want to talk a little more about that?

Sure. Gil I think that's a great question, and I'd like you to think about it this way: There is a significant opportunity for our company as you go down market and you think about the small- to medium-sized business with the number of point-of-sale opportunities that are available to us that have not been pursued through traditional means of our current hardware platform. And as each one of these variants, which I like to see them as nothing more than a window into the cloud. It’s just a screen of glass, whether it's an iPad or an iPod, we want to ride those rails like crazy. SO I love the proliferation of those technologies, and I love the proliferation of those technologies over the broadband because that key to our success allows us to take some very feature-rich capabilities in workflow, cash and cashless transaction processing, our Advanced Marketing Solution, our preference manager, our loyalty application. We have got so much that we have embedded that fits and resides in what is now thin-wrapped appliances that we can expose into that environment. So we like that architecture, and we intend to lead in that space.

And Gil, just one more remark on this in terms of our software SaaS business. Our SaaS business now is about $15 million, growing at 133% year-on-year. So when you combine the SaaS assets of NCR and what was once Radiant, we have a fairly sizable business that's growing rapidly, and we think we can continue to exploit that. Now Silver wants -- help to manufacturing ramp later this year will be a key driver of that business going forward.

Our next question will come from Matt Summerville of KeyBanc.

I just have a couple of questions. Bill, can you clarify something for me. Was that Europe down 11%? Is that constant currency? Or does that include some sort of FX dynamic? And was that for NCR overall or the whole ATM business?

No. No. The 11% is Europe only. It's both as reported and FX neutral, because we didn't have any FX impact in Q4. It was a flat quarter. That was orders only for financial only in Europe in Q4. But as I said earlier, not unexpected and that it does not have services in it. It's important that I make sure that point, Matt, because services improves that number.

Got it. And if we look at North America outside of small bank, can you talk about what you're seeing in that market and then maybe spend a second talking about Asia, markets like China and India specifically, and what you expect for 2012? And then if you could just comment on pricing, again sticking with the ATM business?

Yes. North America has been on fire. North America just show you where in financial in Q4, just alone in financial was up 10% year-on-year in the financial space. As we said earlier in the prepared remarks, regional banks was a big portion of that. We're up 130-plus percent in orders in regional banks in Q4. Big banks continue to be very solid for us overall. By the way, revenue in Q4 in the small bank segment or the regional bank segment was up 222%. So we continue to see strong trends there and feel good about North America overall. As you go outside of North America, good traction in the emerging markets. We continue to -- we think we do a nice job in all the emerging markets around the world. Russia continues to be very solid for us, as an example, China, India as well. Pricing has been about the same, Matt. It continues to be more of a challenge in emerging markets where there's just endless opportunity and less of a challenge in domestic markets, or Western European and U.S.-based markets. So no real tangible change in pricing for a long time.

And then just one follow-up on the agreement you have with Coinstar on that asset purchase. It's described as up to $100 million in purchase price. Are there some things that we should be looking at? That will kind of help us -- I guess what determines if it's $100 million or not? And is there a low-end bandwidth on that, Bill? Do you know what I mean?

Yes. John?

Sure. So because it's an asset transaction and as we characterized it, it's the substantial side of the asset. No, there's nothing material to call your attention to. But however, there is a transition period in which we moved between where we are today through the closing of the transaction. And of course, the transaction itself contemplates if items didn't transfer as contemplated in the deal negotiation. But no, nothing at this time. But under the structuring, which it's written, that would be the appropriate way for us to interpret the up to $100 million. That would be correct.

Our next question will come from Michael Saloio of Sidoti & Company. Michael Saloio - Sidoti & Company, LLC: My question is also on the Redbox agreement. Can you give us a sense of how much of your EPS guidance for next year is related to the sale?

None. Michael Saloio - Sidoti & Company, LLC: Okay. So asked a different way, could you give us a sense of how the business was doing on the NPOI line in the fourth quarter?

Yes. Bob?

That's included in our schedule B. You can see it as a separate business. So in Q4, it lost $15 million, full year it lost $60 million in 2011. Michael Saloio - Sidoti & Company, LLC: Okay. And then going back to the last question, was there any -- did you get any upfront payout from Redbox.

No. As we've reported in the press release, it's an asset purchase agreement for the -- up to $100 million at the time of closing. And then the rest is under a master services agreement, which we will actually deliver as they acquire services in the areas of predominantly services and manufacturing.

Michael, the way you should think about the manufacturing and the services agreement is simple. They've committed in the contract to spend up to $25 million over 5 years of profit. So if you apply the 30% margin on that, it's about $75 million of revenue to us over that time period. Or at the end of 5 years, they cut us a check for $25 million if they don't do business with us. And the whole idea of this arrangement, and you should talk to them as well, but the whole idea was to -- beyond selling our assets for up to $100 million was to create a significant customer relationship with Redbox, where we can provide them services for their kiosks. And beyond their kiosks, there are other businesses, like their coin business, as well as a manufacturing agreement, where we think we are a better manufacturer of what we sell in the marketplace than perhaps who they're doing business today. So we'd hope over the next 5 years to expand that agreement and build upon this commitment they've made to us, but it's not in the current guidance.

Our next question comes from Kartik Mehta of Northcoast Research.

I wanted to understand a little bit about conversion of backlog to revenue. You've got this huge backlog, and what's the time frame for that to convert to revenue?

Backlog typically converts over 2 quarters, for the most part, Kartik, not entirely. If you think about it, we average about, the conversion of about 45% to 50% each quarter. So if you do the simple math, it's 2 quarters where the backlog kind of converts to full revenue in any given quarter. So I think you're looking at a 6-month window coming into the year, on that 40% [ph] backlog.

And then, Bill, as you look at the Radiant business, and obviously that business has got some good growth characteristics, and there's been a lot of talk about EMV, and I'm wondering what opportunities that could possibly provide for you to grow that business.

Well, EMV is an opportunity not only for the Hospitality business, it's an opportunity for NCR Retail. The entire conversion to EMV if moving ahead at the pace we think it might -- could cause an upgrade cycle in Retail across the board. Any other comments, John?

Yes. I think that everyone in this industry, including the incumbents and others are focused on this EMV upgrade and how it manifests itself because it changes a little bit in the way in which transaction processing is thought through today between securing the payment itself through the peripheral and how transaction processing is cleared. So we're going to continue to participate through standards bodies, through our innovation and of course embed as much of that technology as we can into our software stack. So we pay particular attention to it in Financial Services, in Retail and in Hospitality. But it's also important to us in our Travel business, as you'd imagine, because a lot of things happen at the point of service, via mobile or kiosk, inside an airport for upgrades and so forth. So it's an important part of our go-forward strategy.

Just out of curiosity, as that happened in Europe, what kind of impact did you see to get somewhat of a baseline of the potential opportunity here in the U.S.?

That's a great question. Unfortunately the answer is not so great because of the -- of our lack of mix and penetration on the geographies. Boy, do I wish I could tell you that we participate in this significant upgrade cycle. But if I did, then I would have told you, we participate in more point-of-sale transactions in more countries than we did. So I think as that happens here in the United States, it has a far more profound impact for us depending upon how it plays out because of our install base. But across places like Europe because we are largely in the largest countries, it didn't have as much of an impact for us because of our geographic mix. That in part and parcel is our strategy to get better balance and participate in those upgrade cycles in emerging markets and developed markets.

And then on the self-checkout business, is that business really becoming an international business? Or are there still opportunities in the U.S. that you are witnessing, and where you're seeing retailers order?

Yes. Growth continues in that portion of the business in the U.S. in grocery. And we still see greater density of penetration in the U.S., and you'll continue to see that. You'll also continue to see it move into different segments like drug and large-format drug. And the DIY segment continues to move forward aggressively. Same outside the U.S., and now you're seeing self-checkout go global, particularly in the international market, so places like Turkey, Korea, the Czech Republic, Thailand. We're seeing expansion of self-checkout to new markets.

And the footprint to Bill's point, whether it's petroleum or convenience, the conversations that we're able to have today based on the acquisition of Radiant and that customer base, as it things about self-service in labor-starved locations, where they only have one or 2 stores associates, has been tremendous. So it bodes very well for what the large big-box retailers have pushed for, which is a format change, smaller footprint, pedestals, self-checkout capabilities, those types of investment that we've made for Europe, as you mentioned, in particular in grocery both very well for the convenience market.

And think about self-checkout as a family of products, so the number of variants has increased dramatically. So whereas historically, to Bill's point, we were selling it in food and drug and do-it-yourself kinds of environments, you're now getting it into smaller format stores. They're also getting into products like our convertible SCO, where you can use it as either a self-checkout device or an assisted device, depending upon peak period volume. So think of it as growth opportunities domestically, global and some of it is coming from multiple variants we've introduced.

This is the year, Kartik, where the combination of mobile point-of-sale or mobile in-aisle scanning and self-checkout comes to life. And the 2 variants that will see growth will be the traditional SCO unit where you will use it to tender at a station, and then a standalone, if you will, kiosk-based SCO, where you can tender using only credit card, not cash. And so the marriage of mobile and self-checkout comes to life this year in a big way.

And then Bill, I just wanted to clarify a comment you made, you said order growth in Europe for ATM was down 11% in the fourth quarter. Is that specific countries in Western Europe? Or are you seeing that float off all across Western Europe?

No. It's very specific to the obvious countries in Europe that you would expect. Iberia, primarily Italy and to a lesser extent the U.K., but Eastern Europe is very strong for us. Even France is very strong for us. So we continue to see Eastern Europe be very strong and portions of Western Europe to be strong. But again flattish last year overall, and it'll be the same in '12, the same kind of mix in '12.

Our last question for the day will come from Zahid Siddique of Gabelli & Company. Zahid Siddique - Gabelli & Company, Inc.: A couple of questions. The first one is on the kiosk business, where does the Dish Network fit in into the equation?

It does not. This deal is with Coinstar, Redbox and as we complete this transaction and we exit the owner operator part of the business, as such it would terminate our relationship and the branding relationship we have with Dish and Blockbuster. Zahid Siddique - Gabelli & Company, Inc.: And any ongoing litigation would then be taken over by Redbox or I guess would be transferred over to Redbox?

No.

No, it doesn't exist. It's gone. It's over. Zahid Siddique - Gabelli & Company, Inc.: Okay. And then a question on the Radiant or the Hospitality business, what kind of margins should we expect in 2012 relative to 2011?

Our goal is to hit 50 in that business next year. We think we can hit 50 gross margin, 50 in that business. And we're going to strive for a little bit higher.

We have no further questions.

Well, thank you. Let me remind everyone that in May we have Analyst Day coming up, and that Gavin Bell will give all of you the logistics for that meeting, and we hope to see you there. Thank you very much for attending today's call, and we'll see you again in April. Bye-bye.

Thank you for your participation on the conference call today. At this time, all parties may disconnect.