NCR Atleos Corp

Previous wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying Condensed Consolidated Statements of Operations by comparing the results for the three months ended March 31, 2024 to the results for the three months ended March 31, 2023.

Current wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying Condensed Consolidated Statements of Operations by comparing the results for the three and six months ended June 30, 2024 to the results for the three and six months ended June 30, 2023.

Previous wording

On October 16, 2023, NCR Corporation (now known as NCR Voyix Corporation or “Voyix,” and referred to as “NCR” prior to the Separation), completed a Spin-off to NCR shareholders of its self-service banking, network, and telecommunications and technology businesses (the “Spin-off” or “Separation”). Concurrent with the Spin-off, the Company became a standalone publicly traded company and its financial statements are now presented on a consolidated basis. Prior to the Separation, the Company’s historical combined financial statements were prepared on a standalone basis and were derived from NCR’s consolidated financial statements and accounting records. The financial statements for all periods presented, including the historical results of the Company prior to October 16, 2023, are now referred to as “Condensed Consolidated Financial Statements”, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Current wording

On October 16, 2023, NCR Corporation (now known as NCR Voyix Corporation or “Voyix,” and referred to as “NCR” prior to the Separation), completed a Spin-off to NCR shareholders of its self-service banking, network, and telecommunications and technology businesses (the “Spin-off” or “Separation”). Concurrent with the Spin-off, the Company became a stand-alone publicly-traded company and its financial statements are now presented on a consolidated basis. Prior to the Separation, the Company’s historical combined financial statements were prepared on a stand-alone basis and were derived from NCR’s consolidated financial statements and accounting records. The financial statements for all periods presented, including the historical results of the Company prior to October 16, 2023, are now referred to as “Condensed Consolidated Financial Statements”, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Previous wording

In connection with the Spin-off, we entered into a Separation and Distribution Agreement and various other agreements with Voyix. These agreements provide a framework for our relationship with Voyix and govern various interim and ongoing relationships between Atleos and Voyix. These agreements with Voyix are described in the section of the Information Statement titled “Certain Relationships and Related Transactions-Agreements with NCR.” Following the Separation, certain functions continue to be provided by or for Voyix under the Transition Services Agreements or are being performed using Atleos’ own resources or third-party service providers. Additionally, certain maintenance services, manufacturing services, product resale and other support services and supply chain operations will continue to be provided by or to Voyix under the Commercial Agreements.

Current wording

In connection with the Spin-off, we entered into a Separation and Distribution Agreement and various other agreements with Voyix. These agreements provide a framework for our relationship with Voyix and govern various interim and ongoing relationships between Atleos and Voyix. These agreements with Voyix are described in the section of the Information Statement titled “Certain Relationships and Related Transactions-Agreements with NCR.” Following the Separation, certain functions continue to be provided by or for Voyix under the Transition Services Agreements or are being performed using Atleos’ own resources or third-party service providers. Additionally, certain maintenance services, manufacturing services, product resale and other support services and supply chain operations will continue to be provided by or to Voyix under the Commercial Agreements. On August 6, 2024, Voyix announced its intention to move the manufacturing services to another party and to further reduce the maintenance services that are being performed under the Commercial Agreements.

Previous wording

As of the date of this report, the Company has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the organization. Although the Company has not experienced cybersecurity incidents that are individually, or in the aggregate, material, the Company has experienced cyberattacks in the past, which the Company believes have thus far been mitigated by preventative, detective, and responsive measures put in place by the Company. For a detailed discussion of the Company’s cybersecurity related risks, see “Item 1.A Risk Factors—Data protection, cybersecurity and data privacy issues could adversely impact our business” in the Company’s 2023 Annual Report on Form 10-K.

Current wording

As of the date of this report, the Company has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the organization. Although the Company has not experienced cybersecurity incidents that are individually, or in the aggregate, material, the Company has experienced cyberattacks in the past, which the Company believes have thus far been mitigated by preventative, detective, and responsive measures put in place by the Company. For a detailed discussion of the Company’s cybersecurity related risks, see “Item 1A. Risk Factors—Data protection, cybersecurity and data privacy issues could adversely impact our business” in the Company’s 2023 Annual Report on Form 10-K.

Previous wording

We continue to be exposed to macroeconomic pressures such as higher interest rates, commodity and energy prices, foreign currency fluctuations, and increased logistics costs as a result of geopolitical challenges, including those due in part to the war between Russia and Ukraine and the conflict between Israel and Hamas. We continue to navigate through these challenges with a sharp focus on and goal of safeguarding our employees, helping our customers and managing impacts on our supply chain. Despite the rapidly changing environment, our teams are executing at a high level and we are advancing our strategy.

Current wording

We continue to be exposed to macroeconomic pressures such as higher interest rates, increased logistics costs, and foreign currency fluctuations as a result of geopolitical challenges, including those due to various conflicts in and around the Red Sea. We continue to navigate through these challenges with a sharp focus on and goal of safeguarding our employees, helping our customers and managing impacts to the business. Despite the rapidly changing environment, our teams are executing at a high level and we are advancing our strategy.

Previous wording

We expect that these factors will continue to negatively impact our business at least in the short-term. The ultimate impact on our overall financial condition and operating results will depend on the duration and severity of these geopolitical and macroeconomic pressures and any governmental and public actions taken in response. We continue to evaluate the long-term impact that these may have on our business model, however, there can be no assurance that the measures we have taken or will take will completely offset the negative impact.

Current wording

We expect that these factors may continue to negatively impact our business at least in the short-term. The ultimate impact on our overall financial condition and operating results will depend on the duration and severity of these geopolitical and macroeconomic pressures and any governmental and public actions taken in response. We continue to evaluate the long-term impact that these may have on our business model, however, there can be no assurance that the measures we have taken or will take will completely offset the negative impact.

Previous wording

The following tables show our key strategic financial metrics for the three months ended March 31, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.

Current wording

The following tables show our key strategic financial metrics for the three and six months ended June 30, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.

Previous wording

(1)Includes Related party interest expense, net, as presented in the Condensed Consolidated Statements of Operations.

Current wording

(1)Includes Related party interest expense, net, as presented in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023.

Previous wording

The following tables show our results for the three months ended March 31, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.

Current wording

The following tables show our results for the three and six months ended June 30, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.

Previous wording

Revenue results in the first quarter of 2024 were negatively impacted by the delayed transfer of seven legal entities to Atleos following our separation from Voyix, due to local processes of setting up Atleos legal entities. Prior to the Separation, the operating results of each of these entities were included within Atleos’ results under carve-out methodology as all entities were dedicated to the Atleos business. Of these seven entities, three transferred during the first quarter of 2024 and the remaining entities are expected to transfer in the second quarter of 2024. We estimate the delayed transfer of these entities resulted in an approximately $13 million decline in revenue in 2024 compared to the prior year period.

Current wording

Revenue results in the first half of 2024 were negatively impacted by the delayed transfer of seven legal entities to Atleos following our separation from Voyix, due to local processes of setting up Atleos legal entities. Prior to the Separation, the operating results of each of these entities were included within Atleos’ results under carve-out methodology as all entities were dedicated to the Atleos business. Of these seven entities, three transferred during the first quarter of 2024 and two entities transferred in the second quarter of 2024. The remaining two entities are expected to transfer in the second half of 2024. We estimate the delayed transfer of these entities resulted in an approximately $6 million and $19 million decline in revenue for the three and six months ended 2024 compared to the prior year period.

Previous wording

Total revenue increased 6% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the growth of recurring service revenue streams in our core business as well as revenues recognized pursuant to our commercial agreements with Voyix.

Current wording

Total revenue increased 4% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by the growth of recurring service revenue streams in our core business as well as revenues recognized pursuant to our commercial agreements with Voyix.

Previous wording

Product revenue for the three months ended March 31, 2024 increased 3% compared to the three months ended March 31, 2023, driven by approximately $25 million of product revenues earned under the commercial agreements with Voyix. This revenue increase was partially offset by a decline in non-core commerce-related revenue of approximately $11 million related to the wind-down of that business, ATM hardware revenue of approximately $3 million, Bitcoin-related revenues of approximately $3 million and ATM software license revenue of approximately $2 million. Declines in ATM hardware and software license revenue are partially due to the shift in the business from one-time hardware and perpetual license sales to recurring ATM as a Service and software subscriptions as well as a $2 million reduction due to the delayed legal entities described above.

Current wording

Product revenue for the three months ended June 30, 2024 decreased 6% compared to the three months ended June 30, 2023, due to declines in non-core commerce-related revenue of approximately $11 million related to the wind down of that business, ATM and other hardware revenue of approximately $14 million and Bitcoin-related revenues of approximately $7 million, partially offset by approximately $13 million of product revenues earned under the commercial agreements with Voyix. The decline in ATM hardware revenue is partially due to the shift in the business from one-time hardware sales to recurring ATM as a Service subscriptions as well as a $2 million reduction due to the delayed legal entities described above. The decline in Bitcoin-related revenue is due to a decrease in transaction volumes.

Previous wording

Services revenue for the three months ended March 31, 2024 increased 8% compared to the prior year period, driven primarily by 6% total growth in our core self-service banking and network offerings. Services revenue benefited from increases of approximately $26 million in hardware maintenance and installation revenue, $12 million in ATM as a Service revenue, $9 million of transaction processing services revenue as well as $9 million in other software-related revenues. The increase in transaction processing services was driven by an increase in withdrawal transaction volumes and the favorable mix of payments transactions year-over-year, while the growth in ATM as a Service revenue was due to the continued growth in our ATM as a Service offering, whereby we own the ATMs and charge per ATM for the service. The significant increase in hardware maintenance and installation was primarily due to an increase in the core business of approximately $6 million and approximately $19 million earned under the commercial agreements with Voyix. Included in the activity described above, the delayed transfer of legal entities resulted in a reduction of hardware maintenance and installation revenue and other software-related services revenue of approximately $6 million and $4 million, respectively.

Current wording

Services revenue for the three months ended June 30, 2024 increased 7% compared to the prior year period, driven primarily by 8% total growth in our core self-service banking and network offerings. Services revenue benefited from increases of approximately $23 million of transaction processing services revenue, $11 million in hardware maintenance and installation revenue, $10 million in ATM as a Service revenue as well as $13 million in other software-related revenues. The increase in transaction processing services was driven by an increase in withdrawal transaction volumes and the favorable mix of payments transactions year-over-year, while the growth in ATM as a Service revenue was due to the continued growth in our ATM as a Service offering, whereby we own the ATMs and charge per ATM for the service. The increase in hardware maintenance and installation was primarily due to an increase in the core business of approximately $7 million and approximately $5 million earned under the commercial agreements with Voyix. Included in the activity described above, the delayed transfer of legal entities resulted in a reduction of hardware maintenance and installation revenue and other software-related services revenue of approximately $3 million and $1 million, respectively.

Previous wording

Gross margin as a percentage of revenue forthe three months ended March 31, 2024 was 21.0% compared to 22.3% forthe three months ended March 31, 2023. Gross margin for the three months ended March 31, 2024 included $22 million of amortization of acquisition-related intangible assets and $1 million of stock-based compensation expense. Gross margin for the three months ended March 31, 2023 included $15 million of amortization of acquisition-related intangible assets and $5 million of stock-based compensation expense. Excluding these items, gross margin as a percentage of revenue decreased from 24.3% to 23.2% due to the impact of lower margins recognized on services provided under the commercial agreements with Voyix. Our services gross margin was also impacted by increased interest rates driving $2 million of higher rental cost on our vault cash agreements.

Current wording

Gross margin as a percentage of revenue forthe three months ended June 30, 2024 was 23.4% compared to 23.8% forthe three months ended June 30, 2023. Gross margin for the three months ended June 30, 2024 included $19 million of amortization of acquisition-related intangible assets, $3 million of transformation and restructuring costs and $1 million of stock-based compensation expense. Gross margin for the three months ended June 30, 2023 included $15 million of amortization of acquisition-related intangible assets and $8 million of stock-based compensation expense. Excluding these items, adjusted gross margin as a percentage of revenue (non-GAAP) decreased from 26.0% to 25.5% due to the impact of lower margins recognized on services provided under the commercial agreements with Voyix. Our services gross margin was also impacted by increased interest rates driving $2 million of higher rental cost on our vault cash agreements as well as incremental labor costs.

Previous wording

Selling, general, and administrative expenses were $132 million in the three months ended March 31, 2024, compared to $136 million in the three months ended March 31, 2023. As a percentage of revenue, selling, general and administrative expenses were 12.6% in the three months ended March 31, 2024 compared to 13.8% in the three months ended March 31, 2023. In the three months ended March 31, 2024, selling, general and administrative expenses included $1 million of transformation and restructuring costs, $3 million of amortization of acquisition-related intangible assets, $9 million of stock-based compensation expense, and $8 million of separation-related costs. In the three months ended March 31, 2023, selling, general and administrative expenses included $10 million of amortization of acquisition-related intangible assets, $8 million of stock-based compensation expense, and $7 million of separation-related costs. Excluding these items, selling, general and administrative expenses decreased as a percentage of revenue from 11.3% to 10.6% due to higher costs allocated to Atleos under carve-out accounting methodologies in the prior year period, compared to operations as a standalone company in the first quarter of 2024 which include separation cost dis-synergies.

Current wording

Selling, general, and administrative expenses were $132 million in the three months ended June 30, 2024, compared to $149 million in the three months ended June 30, 2023. As a percentage of revenue, selling, general and administrative expenses were 12.2% in the three months ended June 30, 2024 compared to 14.3% in the three months ended June 30, 2023. In the three months ended June 30, 2024, selling, general and administrative expenses included $4 million of amortization of acquisition-related intangible assets, $2 million of transformation and restructuring costs, $7 million of stock-based compensation expense, $6 million of separation-related costs and $1 million of acquisition-related costs. In the three months ended June 30, 2023, selling, general and administrative expenses included $10 million of amortization of acquisition-related intangible assets, $5 million of transformation and restructuring costs, $9 million of stock-based compensation expense and $33 million of separation-related costs. Excluding these items, adjusted selling, general and administrative expenses as a percentage of revenue (non-GAAP) increased from 8.8% to 10.4% due to lower costs allocated to Atleos under carve-out accounting methodologies in the prior year period, compared to operations as a stand-alone company in the second quarter of 2024 which include separation cost dis-synergies and higher employee-benefit related costs.

Previous wording

Research and development expenses were $17 million in the three months ended March 31, 2024, compared to $18 million in the three months ended March 31, 2023. As a percentage of revenue, research and development costs were 1.6% and 1.8% in the three months ended March 31, 2024 and 2023, respectively. In the three months ended March 31, 2023, research and development costs included $1 million of stock-based compensation expense. Excluding this item, research and development expenses as a percentage of revenue decreased slightly from 1.7% to 1.6%.

Current wording

Research and development expenses were $14 million in the three months ended June 30, 2024, compared to $19 million in the three months ended June 30, 2023. As a percentage of revenue, research and development costs were 1.3% and 1.8% in the three months ended June 30, 2024 and 2023, respectively. In the three months ended June 30, 2024, research and development costs included $1 million of transformation and restructuring costs and $1 million of stock-based compensation expense. In the three months ended June 30, 2023, research and development costs included $2 million of stock-based compensation expense. Excluding these items, adjusted research and development expenses as a percentage of revenue (non-GAAP) decreased from 1.6% to 1.1% due to higher costs allocated to Atleos under carve-out accounting methodologies in the prior year period, compared to operations as a stand-alone company in the second quarter of 2024.

Previous wording

Related party interest expense, net was $4 million in the three months ended March 31, 2023. Related party interest expense, net is primarily related to certain related party borrowings during the prior year period.

Current wording

Related party interest expense, net was $5 million in the three months ended June 30, 2023. Related party interest expense, net is primarily related to certain related party borrowings during the prior year period.

Previous wording

Other (expense) income, net was income of $3 million and none in the three months ended March 31, 2024 and 2023, respectively, with the components reflected in the following table:

Current wording

Other (expense) income, net was income of $4 million and $1 million in the three months ended June 30, 2024 and 2023, respectively, and income of $7 million and $1 million in the six months ended June 30, 2024 and 2023, respectively, with the components reflected in the following table:

Previous wording

Income tax provisions for interim (quarterly) periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items. Income tax expense was $4 million for the three months ended March 31, 2024 compared to $25 million for the three months ended March 31, 2023. The change was primarily driven by lower income before taxes in the three months ended March 31, 2024, compared to the prior year. The Company did not recognize any material discrete tax expenses or benefits in either period.

Current wording

Income tax provisions for interim (quarterly) periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items.

Previous wording

The following tables show our segment revenue and Adjusted EBITDA for the three months ended March 31, the relative percentage that those amounts represent to segment revenue, and the change in those amounts year-over-year.

Current wording

The following tables show our segment revenue and Adjusted EBITDA for the three and six months ended June 30, the relative percentage that those amounts represent to segment revenue, and the change in those amounts year-over-year.

Previous wording

(2)Other immaterial business operations, including commerce-related operations in countries that Voyix exited that are aligned to Atleos, that do not represent a reportable segment. For periods after the Separation, Other also includes revenues from commercial agreements with Voyix.

Current wording

(2)Other revenue represents certain other immaterial business operations, including commerce-related operations in countries that Voyix exited that are aligned to Atleos, that do not represent a reportable segment. For periods after the Separation, Other also includes revenues from commercial agreements with Voyix.

Previous wording

Self-Service Banking revenue increased 4% for the three months ended March 31, 2024, compared to the prior year period. For the three months ended March 31, 2024, ATM as a Service revenue increased approximately $12 million, software-related revenue increased approximately $9 million, and hardware maintenance and installation revenue increased $6 million, compared to the prior year period. Revenue results for the period were primarily due to the shift from non-recurring revenues to recurring ATM as a Service arrangements whereby we own the ATMs and charge per ATM for the service, as well as the shift to recurring software subscriptions. Included in the results described above, the delayed transfer of legal entities drove a reduction of approximately $12 million. Software and services revenue as a percent of total Self-Service Banking segment revenue were 73% and 71% in the three months ended March 31, 2024 and March 31, 2023, respectively.

Current wording

Self-Service Banking revenue increased 3% and 3% for the three and six months ended June 30, 2024, respectively, compared to the prior year period. For the three and six months ended June 30, 2024, ATM as a Service revenue increased approximately $10 million and $22 million, software-related revenue increased approximately $18 million and $27 million, hardware maintenance and installation revenue increased $7 million and $13 million and ATM hardware revenue decreased $17 million and $21 million, respectively, compared to the prior year period. Revenue results for the period were primarily due to the shift from non-recurring revenues to recurring ATM as a Service arrangements whereby we own the ATMs and charge per ATM for the service, as well as the shift to recurring software subscriptions. Included in the results described above, the delayed transfer of legal entities drove a reduction of approximately $6 million and $19 million for the three and six months ended June 30, 2024, respectively, compared to the prior year period. Software and services revenue as a percent of total Self-Service Banking segment revenue were 72% and 73% in the three and six months ended June 30, 2024, respectively, compared to 69% and 70% in the prior period.

Previous wording

Network revenue increased 3% for the three months ended March 31, 2024, compared to the prior year period. For the three months ended March 31, 2024, the increase in revenue was due to an approximately $9 million increase in transaction processing services revenue driven by an increase in higher value ATM transactions, and a $3 million increase in other software-related revenue, partially offset by a decrease in Bitcoin-related revenue of approximately $3 million.

Current wording

Network revenue increased 6% and 4% for the three and six months ended June 30, 2024, respectively, compared to the prior year period. For the three and six months ended June 30, 2024, the increase in revenue was due to approximately $23 million and $32 million increases, respectively, in transaction processing services revenue driven by an increase in higher value ATM transactions, and $1 million and $4 million increases, respectively, in other software-related revenue, partially offset by decreases in Bitcoin-related revenue of approximately $7 million and $10 million, respectively, due to decreases in transaction volumes.

Previous wording

T&T revenue increased 2% for the three months ended March 31, 2024, compared to the prior year period. The increase for the three months ended March 31, 2024 was due to a slight increase in hardware maintenance and installation services revenue.

Current wording

T&T revenue increased 4% and 3% for the three and six months ended June 30, 2024, respectively, compared to the prior year period. The increase for the three and six months ended June 30, 2024 was primarily due to one-time hardware sales.

Previous wording

Self-Service Banking Adjusted EBITDA decreased 4% for the three months ended March 31, 2024, compared to the prior year period due to higher allocated employee benefit-related costs and separation dis-synergies, partially offset by the favorable shift to ATM as a Service arrangements.

Current wording

Self-Service Banking Adjusted EBITDA decreased 9% and 6% for the three and six months ended June 30, 2024, respectively, compared to the prior year period due to separation dis-synergies, higher labor and employee benefit-related costs, and the impact of one-time hardware sales shifting to ATM as a Service arrangements that are amortized over the contract period, partially offset by the higher margin recurring revenue stream growth.

Previous wording

Network Adjusted EBITDA increased 15% for the three months ended March 31, 2024, compared to the prior year period due to increases in withdrawal transaction volumes, the mix of higher margin transaction revenue, and cost optimization initiatives. These improvements were partially offset by higher interest rates on our vault cash agreements driving additional cost of $2 million, as well as higher cash-in-transit costs driven by the higher volume of cash dispensed in the period, and an increase in employee benefit-related costs.

Current wording

Network Adjusted EBITDA increased 11% and 13% for the three and six months ended June 30, 2024, respectively, compared to the prior year period due to increases in withdrawal transaction volumes, the mix of higher margin transaction revenue, and cost optimization initiatives. These improvements were partially offset by higher interest rates on our vault cash agreements driving additional cost of $2 million and $4 million, respectively, as well as higher cash-in-transit costs driven by the higher volume of cash dispensed in the period, and an increase in employee benefit-related costs.

Previous wording

T&T Adjusted EBITDA for the three months ended March 31, 2024 was flat, compared to the prior year period.

Current wording

T&T Adjusted EBITDA increased 33% and 13% for the three and six months ended June 30, 2024, respectively, compared to the prior year period driven by increases in revenue.

Previous wording

Summarized cash flow information for the three months ended March 31, is as follows:

Current wording

Summarized cash flow information for the six months ended June 30, is as follows:

Previous wording

Cash provided by operating activities was $148 million in the three months ended March 31, 2024 compared to cash provided by operating activities of $120 million in the three months ended March 31, 2023. The increase in cash provided by operating activities of $28 million in the three months ended March 31, 2024 was primarily driven by the favorable movement in net working capital accounts of $54 million and an increase in non-cash charges of $19 million partially offset by a decline in net income of $45 million. As of March 31, 2024, cash provided by operating activities includes approximately $32 million of cash related to a temporary transfer of funds from Voyix in March, which was remitted back to Voyix in April.

Current wording

Cash provided by operating activities was $157 million in the six months ended June 30, 2024 compared to cash provided by operating activities of $200 million in the six months ended June 30, 2023. The decrease in cash provided by operating activities of $43 million in the six months ended June 30, 2024 was primarily driven by a decline in net income of $69 million partially offset by the favorable movement in net working capital accounts of $16 million and an increase in non-cash charges of $10 million.

Previous wording

Investing activities primarily include capital expenditures for property, plant and equipment of $24 million and additions to capitalized software of $6 million. Other investing activities primarily include business acquisitions, divestitures and investments, which were not significant in the three months ended March 31, 2024 and 2023.

Current wording

Investing activities in the six months ended June 30, 2024 primarily include capital expenditures for property, plant and equipment of $47 million and additions to capitalized software of $15 million. Investing activities in the six months ended June 30, 2023 primarily include capital expenditures for property, plant and equipment of $22 million and additions to capitalized software of $15 million. Other investing activities primarily include business acquisitions, divestitures and investments, which were not significant in the six months ended June 30, 2024 and 2023.

Previous wording

Our financing activities include borrowings and repayments of credit facilities and notes. Financing activities for the three months ended March 31, 2024 also included tax withholding payments on behalf of employees for stock based awards that vested of $6 million. Prior to the Spin-off, financing activities also include short-term borrowings with, and transfers to and from, NCR, consisting of, among other things, cash transfers and changes in receivables and payables and other transactions between Atleos and NCR. See Note 10, “Related Parties”, in the Notes to Condensed Consolidated Financial Statements for further discussion on transactions with NCR.

Current wording

Our financing activities include borrowings and repayments of credit facilities and notes. Financing activities for the six months ended June 30, 2024 also included tax withholding payments on behalf of employees for stock based awards that vested of $13 million. Prior to the Spin-off, financing activities also include short-term borrowings with, and transfers to and from, NCR, consisting of, among other things, cash transfers and changes in receivables and payables and other transactions between Atleos and NCR. See Note 10, “Related Parties”, in the Notes to Condensed Consolidated Financial Statements for further discussion on transactions with NCR.

Previous wording

The table below reconciles net cash provided by operating activities, the most directly comparable GAAP measure, to Atleos’ non-GAAP measure of Adjusted free cash flow-unrestricted for the three months ended March 31:

Current wording

The table below reconciles net cash provided by operating activities, the most directly comparable GAAP measure, to Atleos’ non-GAAP measure of Adjusted free cash flow-unrestricted for the six months ended June 30:

Previous wording

Long Term Borrowings The Senior Secured Credit Facility consists of term loan facilities in an aggregate principal amount of $1,585 million, of which $1,567 million was outstanding as of March 31, 2024. Additionally, the Senior Secured Credit Facility provides for a five-year Revolving Credit Facility with an aggregate principal amount of $500 million, of which $93 million was outstanding as of March 31, 2024. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of March 31, 2024, there were $25 million letters of credit outstanding.

Current wording

Long Term Borrowings The Senior Secured Credit Facility consists of term loan facilities in an aggregate principal amount of $1,585 million, of which $1,548 million was outstanding as of June 30, 2024. Additionally, the Senior Secured Credit Facility provides for a five-year Revolving Credit Facility with an aggregate principal amount of $500 million, of which $176 million was outstanding as of June 30, 2024. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of June 30, 2024, there were $26 million letters of credit outstanding.

Previous wording

Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company’s foreign subsidiaries at March 31, 2024 and December 31, 2023 were $288 million and $285 million, respectively. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.

Current wording

Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company’s foreign subsidiaries at June 30, 2024 and December 31, 2023 were $287 million and $285 million, respectively. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.

Previous wording

Summary As of March 31, 2024, our cash and cash equivalents totaled $343 million and our total debt was $3,018 million. Our borrowing capacity under our senior secured credit facility was $382 million at March 31, 2024.

Current wording

Summary As of June 30, 2024, our cash and cash equivalents totaled $374 million and our total debt was $3,082 million. Our borrowing capacity under our senior secured credit facility was $298 million at June 30, 2024.