In 1997, NCR embarked on a new phase of its existence, which began in 1884 when John H. Patterson founded the National Cash Register Company, maker of the first mechanical cash register. The new NCR, which was acquired by AT & T in 1991 and was subsequently spun off from At & T at the end of 1996, is divided into four major business groups: 
• Computer System Group
• Communications industry Business Unit
• Financial Systems Group
• Retail Systems Group

The Computer System group develops, manufactures, and markets computer systems. The other three groups represent specific industries targeted by NCR.

NCR generated $8 billion in revenues in 1995, the smallest of the AT&T groups (the new AT & T generated $51 billion in revenues, and Lucent Technologies generated $21 billion in revenues). However, NCR is the most international of the group, generating over 50 per cent of its revenues abroad, whereas AT & T as a whole generated only 10.9 per cent of total revenues from abroad. NCR has 3,79,000 employees worldwide, 19,000 of whom are in the United States. It also has 1100 offices and 31 development and manufacturing locations in more than 130 countries. Its top five countries in revenues are Japan, Germany, Switzerland, the United Kingdom, and France.

NCR’s leadership team is divided into product groups, geographic areas (Americas Region, Asia/pacific Region, and Europe and Middle East/Africa Region), and functional areas (such as Global Human Resources, Corporate Strategy, and finance and Administration.). The role of the leadership team is to set the vision, mission, and direction for NCR.

Effective July 1, 1996, Earl C. shanks was hired away from Farley industries Inc. and named as the head of the company’s treasury functions. He reports directly to Per-Olof Loof, head of the Financial Systems, Group and member of NCR’s leadership team. This was an important appointment, because in 1991 when AT & T acquired NCR, virtually all of NCR’s treasury functions were transferred to AT & T. Thus Shank’s mission is to rebuild the treasury group from zero. He is responsible for creating a global organization which will manage the company/s worldwide cash flows and foreign-exchange risk, establish adequate borrowing facilities, establish and implement finance and investment objectives and strategies for pension assets and benefits.

In 1990, the last year NCR issued an annual report before the merger, it noted that transfer pricing between geographic divisions is done at market prices. It also emphasized how interdependent its units are: “The methods followed in developing the geographic area data require the use of estimation techniques and do not take into account the extent to which NCR’s product development, manufacturing, and marketing depend upon each other. Thus, the information may not be as indicative of results as it would be if the geographic areas were independent organizations”.

Similar breakdowns are not found in the AT & T Annual Report, since foreign revenues are only 10.9 per cent of total revenues. AT & T provides revenues, operating income, and identifiable assets for only two geographic segments: United States and other geographic areas. FASB Statement Number 14 does not require the disclosure of geographic segment data if foreign revenues, earnings, and identifiable assets are less than 10 per cent of total revenues. However, AT & 1’s Annual Report mentions that foreign revenues in its segment disclosures include only revenues from foreign-based operations. Revenues from all international activities, including the foreign-segment revenues and those from international telecommunications services and export sales, provided 26.2 percent of consolidated revenues in 1995. AT & T had hoped to generate 50 percent of its revenues from abroad by the turn of the century. However, NCR, with nearly 60 percent of its revenues coming from abroad, is clearly more global than AT & T in general. 

Prior to the merger, NCR took advantage of foreign capital markets to borrow money. ln its 1990Annual Report, NCR reported notes payable totaling $182 million, classified as short-term borrowings from banks, mainly denominated in foreign currencies. NCR also included long-term obligations denominated in Eurodollars and in Japanese Yen.

If AT & T uses foreign capital markets, it does not disclose much information. AT & T’s 1995 Annual Report describes its debt obligations but does not disclose whether any are in a foreign currency. The annual report mentions, however, that a consortium of lenders provides revolving credit facilities to AT & T and AT & T Capital Both AT & T and AT & T Capital maintain lines of credit with different consortiums of primary foreign banks. In addition, AT & T lists its stock on exchanges in Brussels, Geneva, London, Paris, and Tokyo, in addition to several in the United States, so it is gaining access to equity capital abroad.

The objective of NCR’s risk-management strategy was to neutralize economic exposure from foreign-currency fluctuations, first through operational strategies and second with foreign-exchange contracts. To illustrate how significance those contracts were, on December 31, 1990 NCR had $1.271 billion in outstanding forward contracts, of which 60 per cent were in European currencies and 40 per cent were in Pacific currencies. There were no contracts in Latin American currencies, because those financial markets were not developed enough for forward contract. 

From an organizational standpoint, NCR put a lot of responsibility on the shoulders of group management. Each geographic unit had a group vice president and finance director responsible for the overall risk-management strategy of the group, subject to the approval of top management and corporate treasury. Each of the eight regions that composed the Latin America/Middle East/Africa group had a general manager and a finance director. Once the risk-management strategy and had been determined, the execution of the strategy was left to the local level, where market conditions vary considerably.

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