NCR Corporation reported financial results today for the three months ended March 31, 2015.

"We are off to a good start in 2015. Our first quarter results were in-line with our expectations and we improved execution across our organization,” said Chairman and CEO Bill Nuti. “Our constant currency growth was driven primarily by the impact of our omni-channel solutions in Financial Services. In Retail Solutions, we are beginning to see investment priorities shifting from security back towards omni-channel and customer experience solutions and while we are not pleased with the operating results in Retail Solutions in the first quarter, we continue to forecast improvement in the second half of the year. We expanded our total software revenues during the quarter, including strong cloud revenue growth, and further advanced our sales and services transformation initiatives as we work to build a stronger NCR. We are excited about the opportunities ahead of us this year and are focused on continuing to deliver innovation, value and leading omni-channel solutions to our customers."

* Income from operations in the first quarter of 2015 includes a $16 million charge related to the ongoing restructuring plan.

** NPOI includes approximately $18 million and non-GAAP diluted earnings per share includes approximately $0.08 of unfavorable foreign currency impacts.

*** Diluted earnings per share in the first quarter of 2015 includes $0.07 related to the ongoing restructuring plan.

In this release, we use the non-GAAP measures non-pension operating income (NPOI), non-GAAP diluted earnings per share and free cash flow, and we present certain measures on a constant currency basis. These non-GAAP measures are described and reconciled to their most directly comparable GAAP measures elsewhere in this release.

* Referred to as Software-as-a-Service or SaaS in prior Company earnings releases.

Software-related revenue increased 5% in the first quarter and increased 9% on a constant currency basis, including 19% growth in cloud revenue driven by Financial Services and Hospitality.

Revenue was down 3% as reported and was up 3% on a constant currency basis. Financial Services' constant currency growth was driven by improvements in software-related revenue in the Americas, Europe and Middle East Africa. Emerging Industries' constant currency growth was driven by improvements in our Telecom & Technology business. Hospitality's constant currency growth was driven by higher software-related revenue, partially offset by lower hardware revenue. Retail Solutions constant currency revenue results were negatively impacted by reduced spending by retailers, which we expect to improve in the second half of 2015.

Segment operating income was stronger in Financial Services driven by a higher mix of omni-channel solutions. Segment operating income was also stronger in Hospitality driven by higher software-related revenue including cloud revenue, and stronger in Emerging Industries due to higher services margins. Retail solutions operating income was down due to lower volume and a less favorable mix of software-related revenue.

Free cash flow improved by $75 million in the first quarter of 2015 as compared to the first quarter of 2014 driven by improvements in cash from operations, lower capital expenditures, and discontinued operations.

2015 Outlook

We are reaffirming our 2015 as reported guidance despite an increase in anticipated unfavorable foreign exchange impacts from our prior expectations. We previously expected unfavorable foreign currency impacts of 5% in revenue, $50 million in NPOI and $0.20 per share in non-GAAP diluted EPS. We now expect unfavorable foreign currency impacts of 6% in revenue, $75 million in NPOI and $0.30 per share in non-GAAP diluted EPS.

The Company is on track with progress to date with the restructuring plan. In 2015, NCR expects to incur a pre-tax charge of approximately $39 million to $64 million with $16 million recorded during Q1 2015. Cash payments in 2015 are expected to be approximately $71 million to $86 million with $16 million paid during Q1 2015. Savings are in line with previous expectations with approximately $18 million in 2014, $70 million in 2015 and $105 million in 2016, with about 50% of the savings benefiting NPOI.

Q2 2015 Outlook

For the second quarter of 2015, the Company expects non-pension operating income (NPOI) to be in the range of $190 million to $200 million, compared to $210 million in the second quarter of 2014, and income from operations to be in the range of $140 million to $150 million, compared to $169 million in the second quarter of 2014. The unfavorable foreign currency impact on NPOI is expected to be approximately $20 million in the second quarter of 2015. NCR expects its second quarter 2015 effective income tax rate to be approximately 28% and other expense, net including interest expense to be approximately $55 million.