Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

Overview

As more fully discussed in later sections of this MD&A, the following were the significant events for the second quarter of 2009:

• Announced a major investment in innovation, manufacturing and talent development that will lead to the creation of nearly 2,000 new jobs in the State of Georgia, and generate cost savings for NCR over the next ten years. This initiative will include the creation of our new worldwide global self-service headquarters in Duluth and a state-of-the-art, clean energy based manufacturing site in Columbus for the company's next generation NCR SelfServ ATM family.

• Announced that NCR will create a new manufacturing and research and development center in Brazil to produce technologically advanced, high availability automated teller machines for Brazil, Latin America, and Caribbean markets. The innovation center and manufacturing facility is expected to expand over time to include self-service technologies for a variety of industries.

• Repaid our $300 million of senior unsecured notes in June 2009.

During the first six months of 2009, we continued to focus on our strategic initiatives to provide maximum value to our stakeholders. The strategic initiatives and actions we are taking in 2009 are as follows:

1) Gain profitable share We continue to optimize our investments in demand creation to increase NCR's market share in areas with the greatest potential for profitable revenue growth, which include opportunities in self-service technologies with our core financial services and retail customers. We intend to expand and strengthen our geographic presence and sales coverage in addition to penetrating adjacent single and multi-channel self-service solution segments.

2) Expand into emerging growth industry segments The Company continues to focus on broadening the scope of our self-service solutions from our existing customers to expand these solution offerings to customers in newer industry-vertical markets including: travel and gaming, healthcare and public sector, entertainment, and software and technology. We expect to grow our business in these industries through integrated service offerings in addition to targeted acquisitions and strategic partnerships. One example of this was our announcement of our intention to invest approximately $60 million in the entertainment industry during the coming year, including the April 1, 2009 acquisition of TNR Holdings Corp.

3) Build the lowest cost structure in our industry The Company is continuing to focus on increasing the efficiency and effectiveness of our core functions and the productivity of our employees. While we continued to make progress in this regard in the second quarter, we intend to ensure that our execution throughout the second half of 2009 will allow us to capture efficiencies and intended cost savings.

4) Enhance our global service capability The Company continues to execute various initiatives to enhance its global service capability. We continue to focus on improving our service positioning, increasing our service attach rates for our products and continue to improve profitability in our services business. Our service capability provides us a growing competitive advantage in winning customers and it provides NCR with an ever-more attractive and stable revenue source.

5) Focus on working capital and balance sheet In 2008, NCR made significant improvements managing working capital, especially in the areas of accounts receivable and inventory. We have continued to focus on these areas to further improve our operating cash flow and working capital position. The Company will continue to make investments in areas that generate maximum growth, such as self-service research and development and demand creation.

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We expect to continue with these initiatives for the remainder of 2009 and beyond, as we refine our business model and position the Company for growth and profitability.