================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002

                        Commission File Number 001-00395


                                 NCR CORPORATION
             (Exact name of registrant as specified in its charter)


               Maryland                                      31-0387920
    (State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization)                       Identification No.)


                           1700 South Patterson Blvd.
                               Dayton, Ohio 45479
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (937) 445-5000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X    No ___
                                       ---

Number of shares of common stock, $0.01 par value per share, outstanding as of
April 30, 2002 was 98,479,673.



                                TABLE OF CONTENTS

                          PART I. Financial Information



                                  Description                                      Page
                                  -----------                                      ----
                                                                                
Item 1.   Financial Statements

          Condensed Consolidated Statements of Operations (Unaudited)
          Three Months Ended March 31, 2002 and 2001                                 3

          Condensed Consolidated Balance Sheets (Unaudited)
          March 31, 2002 and December 31, 2001                                       4

          Condensed Consolidated Statements of Cash Flows (Unaudited)
          Three Months Ended March 31, 2002 and 2001                                 5

          Notes to Condensed Consolidated Financial Statements                       6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                                 12

Item 3.   Quantitative and Qualitative Disclosures about Market Risk                19


                           PART II. Other Information

                                  Description                                      Page
                                  -----------                                      ----

Item 4.   Submission of Matters to a Vote of Security Holders                       20

Item 6.   Exhibits and Reports on Form 8-K                                          21

          Signatures                                                                22


                                       2



                          Part I. Financial Information

Item 1.  FINANCIAL STATEMENTS

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      In millions, except per share amounts



                                                                                                   Three Months Ended
                                                                                                        March 31
                                                                                            --------------------------------
                                                                                                 2002             2001
                                                                                            ---------------  ---------------
                                                                                                       
Product revenue                                                                              $         612    $         690
Service revenue                                                                                        635              686
                                                                                            ---------------  ---------------
Total revenue                                                                                        1,247            1,376
                                                                                            ---------------  ---------------

Cost of products                                                                                       400              442
Cost of services                                                                                       497              524
Selling, general and administrative expenses                                                           285              353
Research and development expenses                                                                       56               76
                                                                                            ---------------  ---------------
Total operating expenses                                                                             1,238            1,395
                                                                                            ---------------  ---------------

Income (loss) from operations                                                                            9              (19)

Interest expense                                                                                         2                4
Other expense, net                                                                                       1                3
                                                                                            ---------------  ---------------

Income (loss) before income taxes and cumulative effect of accounting change                             6              (26)

Income tax expense (benefit)                                                                             2             (147)
                                                                                            ---------------  ---------------

Income before cumulative effect of accounting change                                                     4              121
Cumulative effect of accounting change, net of tax                                                       -               (4)
                                                                                            ---------------  ---------------
Net income                                                                                   $           4    $         117
                                                                                            ===============  ===============

Net income per common share
  Basic before cumulative effect of accounting change                                        $        0.04    $        1.26
  Cumulative effect of accounting change                                                                 -            (0.04)
                                                                                            ---------------  ---------------
  Basic                                                                                      $        0.04    $        1.22
                                                                                            ===============  ===============

  Diluted before cumulative effect of accounting change                                      $        0.04    $        1.22
  Cumulative effect of accounting change                                                                 -            (0.04)
                                                                                            ---------------  ---------------
  Diluted                                                                                    $        0.04    $        1.18
                                                                                            ===============  ===============

Weighted average common shares outstanding
  Basic                                                                                               97.9             95.7
  Diluted                                                                                            100.6             99.3


See Notes to Condensed Consolidated Financial Statements.

                                       3



                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                      In millions, except per share amounts




                                                                                       March 31       December 31
                                                                                         2002            2001
                                                                                      ---------       -----------
                                                                                                 
Assets
Current assets
  Cash, cash equivalents and short-term investments                                   $   379          $   336
  Accounts receivable, net                                                              1,081            1,126
  Inventories, net                                                                        282              280
  Other current assets                                                                    205              221
                                                                                      -------          -------

Total current assets                                                                    1,947            1,963

Reworkable service parts and rental equipment, net                                        219              224
Property, plant and equipment, net                                                        608              629
Goodwill (Note 3)                                                                         452              457
Other assets (Note 3)                                                                   1,601            1,582
                                                                                      -------          -------

Total assets                                                                          $ 4,827          $ 4,855
                                                                                      =======          =======

Liabilities and Stockholders' Equity
Current liabilities
  Short-term borrowings                                                               $   106          $   138
  Accounts payable                                                                        334              362
  Payroll and benefits liabilities                                                        212              217
  Customer deposits and deferred service revenue                                          407              319
  Other current liabilities                                                               446              482
                                                                                      -------          -------
Total current liabilities                                                               1,505            1,518

Long-term debt                                                                              8               10
Pension and indemnity liabilities                                                         355              319
Postretirement and postemployment benefits liabilities                                    342              359
Other liabilities                                                                         561              600
Minority interests                                                                         18               22
                                                                                      -------          -------

Total liabilities                                                                       2,789            2,828
                                                                                      -------          -------

Commitments and contingencies (Note 5)

Stockholders' equity
  Preferred stock:  par value $0.01 per share, 100.0 shares
    authorized, no shares issued and outstanding at March 31,
    2002 and December 31, 2001, respectively                                                -                -
  Common stock:  par value $0.01 per share, 500.0 shares
    authorized, 98.4 and 97.4 shares issued and outstanding at
    March 31, 2002 and December 31, 2001, respectively                                      1                1
  Paid-in capital                                                                       1,257            1,235
  Retained earnings                                                                       865              861
  Accumulated other comprehensive loss                                                    (85)             (70)
                                                                                      -------          -------

Total stockholders' equity                                                              2,038            2,027
                                                                                      -------          -------

Total liabilities and stockholders' equity                                            $ 4,827          $ 4,855
                                                                                      =======          =======



See Notes to Condensed Consolidated Financial Statements.

                                       4



                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   In millions





                                                                                         Three Months Ended
                                                                                               March 31
                                                                                      ---------------------------
                                                                                         2002             2001
                                                                                      -----------       ---------
                                                                                                  
Operating Activities

Net income                                                                             $     4           $  117
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation and amortization                                                             80              105
  Deferred income taxes                                                                     (5)               7
  Income tax adjustment                                                                      -             (138)
  Other loss on assets, net                                                                  1                1
  Changes in assets and liabilities:
    Receivables                                                                             34              248
    Inventories                                                                             (1)             (40)
    Current payables                                                                       (45)            (184)
    Customer deposits and deferred service revenue                                          88               88
    Employee severance and pension                                                         (33)             (59)
    Other assets and liabilities                                                           (42)            (108)
                                                                                       -------           ------

Net cash provided by operating activities                                                   81               37
                                                                                       -------           ------


Investing Activities

Short-term investments, net                                                                  -              (10)
Net expenditures and proceeds for service parts                                            (23)             (25)
Expenditures for property, plant and equipment                                             (20)             (53)
Other investing activities, net                                                              5               (8)
                                                                                       -------           ------

Net cash used in investing activities                                                      (38)             (96)
                                                                                       -------           ------

Financing Activities

Purchases of company common stock                                                            -              (34)
Short-term borrowings, net                                                                 (32)              27
Long-term borrowings, net                                                                   (2)              (1)
Other financing activities, net                                                             34               34
                                                                                       -------           ------

Net cash provided by financing activities                                                    -               26
                                                                                       -------           ------


Effect of exchange rate changes on cash and cash equivalents                                 -               (9)
                                                                                       -------           ------

Increase (decrease) in cash and cash equivalents                                            43              (42)
Cash and cash equivalents at beginning of period                                           335              347
                                                                                       -------           ------

Cash and cash equivalents at end of period                                             $   378           $  305
                                                                                       =======           ======



See Notes to Condensed Consolidated Financial Statements.

                                       5



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared
by NCR Corporation (NCR or the Company) without audit pursuant to the rules and
regulations of the Securities and Exchange Commission and, in the opinion of
management, include all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the consolidated results of operations,
financial position, and cash flows for each period presented. The consolidated
results for interim periods are not necessarily indicative of results to be
expected for the full year. These financial statements should be read in
conjunction with NCR's 2001 Annual Report to Stockholders and Form 10-K for the
year ended December 31, 2001.

Certain prior year amounts have been reclassified to conform to the 2002
presentation.

2.   SUPPLEMENTAL FINANCIAL INFORMATION



In millions                                                          Three Months Ended
                                                                          March 31
                                                               --------------------------------
Comprehensive (Loss) Income                                         2002             2001
                                                               ---------------  ---------------
                                                                          
Net income                                                      $           4    $         117
Other comprehensive (loss) income, net of tax:
  Unrealized (loss) gain on securities                                     (2)               6
  Unrealized (loss) gain on derivatives                                    (1)               6
  Additional minimum pension liability                                      -               (6)
  Currency translation adjustments                                        (12)              (9)
                                                               ---------------  ---------------
Total comprehensive (loss) income                               $         (11)   $         114
                                                               ===============  ===============





In millions                                                        March 31       December 31
                                                                     2002             2001
                                                               ---------------  ---------------
                                                                          
Cash, Cash Equivalents and Short-Term Investments
Cash and cash equivalents                                       $         378    $         335
Short-term investments                                                      1                1
                                                               ---------------  ---------------
Total cash, cash equivalents and short-term investments         $         379    $         336
                                                               ===============  ===============

Inventories, Net
Work in process and raw materials                               $          85    $          82
Finished goods                                                            197              198
                                                               ---------------  ---------------
Total inventories, net                                          $         282    $         280
                                                               ===============  ===============


                                       6



3.  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill
--------

NCR adopted Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142), on January 1, 2002, and in accordance with
SFAS 142, NCR discontinued the amortization of goodwill assets upon adoption.
Assuming goodwill amortization had been discontinued at January 1, 2001, the
comparable net income and earnings per share (basic and diluted) for the
prior-year period would have been:



                                                                                                   Three Months Ended
In millions, except per share amounts                                                                   March 31
                                                                                            --------------------------------
                                                                                                 2002             2001
                                                                                            ---------------  ---------------
                                                                                                       
Net income:
Reported net income                                                                          $           4    $         117
Impact of goodwill amortization                                                                          -               16
                                                                                            ---------------  ---------------
Adjusted net income                                                                          $           4    $         133
                                                                                            ===============  ===============

Basic earnings per share:
Reported basic earnings per share                                                            $        0.04    $        1.22
Impact of goodwill amortization                                                                          -             0.17
                                                                                            ---------------  ---------------
Adjusted basic earnings per share                                                            $        0.04    $        1.39
                                                                                            ===============  ===============

Fully diluted earnings per share:
Reported fully diluted earnings per share                                                    $        0.04    $        1.18
Impact of goodwill amortization                                                                          -             0.16
                                                                                            ---------------  ---------------
Adjusted fully diluted earnings per share                                                    $        0.04    $        1.34
                                                                                            ===============  ===============


The changes in the carrying amount of goodwill by operating segment for the
quarter ended March 31, 2002, are as follows:



                                                                             Balance at                        Balance at
                                                                            December 31,                       March 31,
In millions                                                                     2001         Adjustments/1/       2002
                                                                           ---------------  ---------------  ---------------
                                                                                                    
Goodwill
Data Warehousing                                                            $         77     $        (1)     $         76
Financial Self Service                                                                21              (2)               19
Retail Store Automation                                                               28              (1)               27
Systemedia                                                                            13               -                13
Payment and Imaging                                                                    4               -                 4
Other                                                                                314              (1)              313
                                                                           ---------------  ---------------  ---------------
Total Goodwill                                                              $        457     $        (5)     $        452
                                                                           ===============  ===============  ===============


/1/ The adjustments relate to foreign currency fluctuations experienced during
the first three months of 2002.

As required by the adoption of SFAS 142, NCR is employing the transitional
goodwill impairment test to assess the potential impairment loss of its goodwill
assets. The company has not finalized its analysis, but expects to record a
non-cash impairment loss of between $300 million and $350 million as a
cumulative effect of accounting change in the second quarter of 2002.

                                       7



Other Intangible Assets
-----------------------

Other intangible assets were specifically identified when acquired, and
primarily consist of patents. NCR has not reclassified any other intangibles to
goodwill, nor has it recognized any other intangible assets that were previously
included in goodwill. NCR's other intangible assets are deemed to have definite
lives and are being amortized over original periods ranging from 3 to 10 years.
The following table outlines the gross carrying amount and accumulated
amortization for NCR's other intangible assets.

                                                      March 31, 2002
                                              -------------------------------
                                               Gross Carrying   Accumulated
In millions                                       Amount        Amortization
                                              ---------------  --------------
Other Intangible Assets

Patents                                          $        19       $      (11)
Other                                                      4               (1)
                                              --------------   --------------
Total Other Intangible Assets                    $        23       $      (12)
                                              ==============   ==============

The aggregate amortization expense for the three-month period ending March 31,
2002 was $1 million. The estimated annual amortization expense for the years
ending December 31, 2002, 2003, 2004, 2005 and 2006 is $4 million, $4 million,
$3 million, $1 million and zero, respectively.

4.  STOCK REPURCHASE PROGRAM

During the first quarter of 2002, NCR did not purchase any shares of its stock
under either of the Company's repurchase programs (the systematic repurchase
plan approved in December 2000 or the plan approved in October 1999). There is
approximately $181 million remaining under the plan approved by NCR's Board of
Directors in October 1999. During the first quarter of 2001, NCR repurchased
approximately 450,000 shares of its stock for approximately $20 million as part
of the systematic repurchase program authorized in December of 2000.

Following the end of the first quarter of 2002, the Company repurchased
approximately 102,000 shares as part of the systematic repurchase program. These
shares were repurchased on the open market at an average price of $38.08 per
share.

5.  CONTINGENCIES

In the normal course of business, NCR is subject to various regulations,
proceedings, lawsuits, claims and other matters, including actions under laws
and regulations related to the environment and health and safety, among others.
NCR believes the amounts provided in its consolidated financial statements, as
prescribed by generally accepted accounting principles, are adequate in light of
the probable and estimable liabilities. However, there can be no assurances that
the actual amounts required to discharge alleged liabilities from various
lawsuits, claims, legal proceedings and other matters, including the Fox River
environmental matter discussed below, and to comply with applicable laws and
regulations, will not exceed the amounts reflected in NCR's consolidated
financial statements or will not have a material adverse effect on its
consolidated results of operations, financial condition or cash flows. Any
amounts of costs that may be incurred in excess of those amounts provided as of
March 31, 2002 cannot currently be reasonably determined.

Environmental Matters
NCR's facilities and operations are subject to a wide range of environmental
protection laws, and NCR has investigatory and remedial activities underway at a
number of facilities that it currently owns or operates, or formerly owned or
operated, to comply, or to determine compliance, with such laws. Also, NCR has
been identified, either by a government agency or by a private party seeking
contribution to site cleanup costs, as a potentially responsible party (PRP) at
a number of sites pursuant to various state and federal laws, including the
Federal Water Pollution Control Act (FWPCA) and comparable state statutes, and
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA), as amended, and comparable state statutes.

Various federal agencies, Native American tribes and the State of Wisconsin
(Claimants) consider NCR to be a PRP under the FWPCA and CERCLA for alleged
natural resource damages (NRD) and remediation liability with respect to the Fox
River

                                       8



and Green Bay (Fox River site) due to, among other things, sediment
contamination allegedly resulting in part from NCR's former carbonless paper
manufacturing in Wisconsin. Claimants have also notified a number of other paper
manufacturing companies of their status as PRPs resulting from their ongoing or
former paper manufacturing operations in the Fox River Valley, and Claimants
have entered into a Memorandum of Agreement among themselves to coordinate their
actions, including the assertion of claims against the PRPs. Additionally, the
federal NRD Claimants have notified NCR and the other PRPs of their intent to
commence a NRD lawsuit, but have not as yet instituted litigation. In addition,
one of the Claimants, the U.S. Environmental Protection Agency (USEPA), has
formally proposed the Fox River site for inclusion on the CERCLA National
Priorities List, but no action has yet been taken on this proposal. During the
fourth quarter of 2000, the federal Claimants released a proposed Restoration
and Compensation Determination Plan (RCDP). The range of damages in the proposed
RCDP is from $176 million to $333 million.

On October 2, 2001, the Wisconsin Department of Natural Resources (WDNR) and
USEPA Region 5 made available for public review a Proposed Remedial Action Plan
(PRAP) for the Fox River site, along with a revised draft remedial investigation
and feasibility study (RI/FS) and related documents. The PRAP segregates the Fox
River into four segments and includes a fifth segment for Green Bay, describes
the various remedial alternatives that were considered for the cleanup of each
segment and then selects a proposed alternative. The proposed alternative in the
PRAP is to dredge a total of approximately 7,250,500 cubic yards of sediment
from three segments of the Fox River site, dispose of the dredged sediment in
local landfills after treatment, and utilize monitored natural recovery for the
other Fox River segment and for the Green Bay segment, at a total estimated cost
of approximately $370 million, including a 20% contingency. (The range of
estimated costs for other Fox River alternatives considered and rejected was
between approximately $18 million and $1,096 million and the range of estimated
costs for other Green Bay alternatives considered and rejected was between
approximately $18 million and $2,454 million, all exclusive of contingencies;
the latter number consists mainly of the cost of dredging the Green Bay, an
action that has been characterized by WDNR as infeasible.)

NCR, in conjunction with the other PRPs, has developed a substantial body of
evidence that may demonstrate that eventual selection of alternatives involving
river-wide restoration/remediation, particularly massive dredging, would be
inappropriate and unnecessary. There is ongoing debate within the scientific,
regulatory, legal, public policy and legislative communities over how to
properly manage large areas of contaminated sediments, and NCR believes there is
a high degree of uncertainty about the appropriate scope of alternatives that
may ultimately be required by Claimants. NCR's ultimate share of restoration/
remediation and damages liability cannot be determined at this time, except by
reference to a range of potential outcomes, due to uncertainties with respect
to: the scope and cost of the potential alternatives; the outcome of further
federal and state NRD assessments; the amount of NCR's share of such
restoration/remediation expenses; the timing of any restoration/remediation; the
evolving nature of restoration/remediation technologies and governmental
policies; the contributions from other parties; and the recoveries from
insurance carriers and other indemnitors. NCR believes the other currently named
PRPs would be required and are presently able to pay their respective shares
toward restoration and remediation, and that there are additional parties, some
of which have substantial resources, that may also be liable. Further, in 1978
NCR sold the business to which the claims apply, and NCR and the buyer, Appleton
Papers Inc. (API), have reached an interim settlement agreement under which the
parties are sharing both defense and liability costs.

Last year, NCR and API entered into an Interim Settlement with the Claimants,
which was approved by the federal court in Wisconsin. The key terms of the
Interim Settlement are as follows: (a) API/NCR will provide funds to the
Claimants totaling $10.375 million per year over a four-year period for
remediation or natural resource restoration activities at the Fox River site;
(b) the Claimants will not initiate an enforcement action (including natural
resource damage actions or administrative orders) against API or NCR during the
four-year period; and (c) before the term of the Interim Settlement expires, the
Claimants and API/NCR will engage in settlement discussions regarding all claims
against API/NCR at the Fox River site.

Given the numerous uncertainties regarding the cost estimates for remediation
and restoration of the Fox River site and the factors bearing upon NCR's share
of those costs, NCR's potential liability falls within a range as to which no
amount in the range is a better estimate than any other, and even then it is not
possible to estimate the high end of the range. It is possible that NCR's
exposure for costs could be higher than the low end of the range, but an
estimate of those amounts cannot be made. Also, a portion of NCR's potential
liability at the site under CERCLA may be joint and several. If, in the future,
one or more of the other PRPs described above were to become insolvent or unable
to pay their respective shares, NCR could be responsible for a portion of such
shares.

It is difficult to estimate the future financial impact of environmental laws,
including potential liabilities. NCR records environmental provisions when it is
probable that a liability has been incurred and the amount or range of the
liability is reasonably estimable. Provisions for estimated losses from
environmental restoration and remediation are, depending on the

                                       9



site, based primarily on internal and third-party environmental studies (except
for the Fox River site where the estimated costs are taken directly from the
above-described PRAP), estimates as to the number and participation level of any
other PRPs, the extent of the contamination, and the nature of required remedial
and restoration actions. Accruals are adjusted as further information develops
or circumstances change. Management expects that the amounts accrued from time
to time will be paid out over the period of investigation, negotiation,
remediation and restoration for the applicable sites. The amounts provided for
environmental matters in NCR's consolidated financial statements are the
estimated gross undiscounted amounts of such liabilities (except for the Fox
River site where the PRAP estimates certain long-term costs at net present
worth), without deductions for insurance or third-party indemnity claims. Except
for the sharing arrangement described above with respect to the Fox River site,
in those cases where insurance carriers or third-party indemnitors have agreed
to pay any amounts and management believes that collectability of such amounts
is probable, the amounts would be reflected as receivables in the consolidated
financial statements.

6.  EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net income by the weighted
average number of shares outstanding during the reported period. The calculation
of diluted earnings per share is similar to basic, except that the weighted
average number of shares outstanding include the additional dilution from
potential common stock such as stock options and restricted stock awards, when
appropriate.

7.  SEGMENT INFORMATION

NCR categorizes its operations into six reportable segments: Data Warehousing,
Financial Self Service, Retail Store Automation, Systemedia, Payment and
Imaging, and Other. Each of these segments includes hardware, software,
professional consulting, customer support and maintenance services, and third
party applications and technologies. Customer support services include staging
and implementation services, networking, multi-vendor integration services,
consulting services, solution-specific support services and outsourcing
solutions.

The following table presents data for revenue by operating segment (including
customer services maintenance) for the periods ended March 31:

In millions                                          Three Months Ended
                                                           March 31
                                                ------------------------------
Revenue                                              2002            2001
                                                -------------   --------------

Data Warehousing                                   $      290        $     282
Financial Self Service                                    329              336
Retail Store Automation                                   235              286
Systemedia                                                115              116
Payment and Imaging                                        66               73
Other                                                     212              283
                                                -------------   --------------

Total Revenue                                      $    1,247        $   1,376
                                                =============   ==============

                                       10



The following table presents data for operating income (loss) by operating
segment (including customer services maintenance) for the periods ended March
31:



In millions                                                                                 Three Months Ended
                                                                                                 March 31
                                                                                    -------------------------------
Operating Income (Loss)                                                                  2002             2001
                                                                                    --------------   --------------
                                                                                               
Data Warehousing                                                                       $        23      $        (5)
Financial Self Service                                                                          17               36
Retail Store Automation                                                                        (29)             (12)
Systemedia                                                                                       1               (1)
Payment and Imaging                                                                             12               12
Other                                                                                          (15)               8
                                                                                    --------------   --------------

Income from operations excluding goodwill amortization and special items                         9               38

Goodwill amortization in income (loss) from operations                                           -              (16)
                                                                                    --------------   --------------

Income from operations excluding special items                                                   9               22

Special items/1/                                                                                 -              (41)
                                                                                    --------------   --------------

Income (loss) from operations                                                          $         9      $       (19)
                                                                                    ==============   ==============


/1/  Special items in the first quarter of 2001 in operating income represent
     the provision for loans and receivables with Credit Card Center ($39
     million in Financial Self Service) and integration charges related to
     acquisitions ($2 million in Other).

                                       11



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


Results of Operations
---------------------

Our key solutions are Data Warehousing, Financial Self Service and Retail Store
Automation. In addition, Systemedia and our Payment and Imaging solutions are
reportable segments. A sixth category, Other, accumulates individually
insignificant and dissimilar businesses, such as exited businesses, networking
hardware and services, and managed services, which are not attributable to the
formally identified reportable segments. Each segment is comprised of hardware,
software, professional consulting services and customer support services.

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001
-------------------------------------------------------------------------------

For comparability to the 2002 results, the three months ended March 31, 2001
exclude the effects of special items and goodwill amortization from the gross
margin, operating expenses and operating income (loss) amounts presented and
discussed below. Special items impacting operating loss for the first quarter of
2001 included a $39 million provision for loans and receivables related to
Credit Card Center (CCC) and $2 million of acquisition-related integration
charges. Goodwill amortization expense included in operating income in the first
quarter of 2001 was $16 million.



In millions                                                                                           2002         2001
--------------------------------------------------------------------------------------------------------------------------
                                                                                                            
Consolidated revenue                                                                                $ 1,247        $ 1,376
Consolidated gross margin /1/                                                                           350            411
Consolidated operating expenses:
   Selling, general and administrative expenses /2/                                                     285            297
   Research and development expenses                                                                     56             76
--------------------------------------------------------------------------------------------------------------------------

Consolidated income from operations excluding goodwill amortization and special items                     9             38

Goodwill amortization                                                                                     -            (16)
--------------------------------------------------------------------------------------------------------------------------

Consolidated income from operations excluding special items                                               9             22

Special items /1,2/                                                                                       -            (41)
--------------------------------------------------------------------------------------------------------------------------

Consolidated income (loss) from operations                                                          $     9        $   (19)
==========================================================================================================================


/1/  Special items in the first quarter of 2001 excluded from consolidated gross
     margin represent $1 million of acquisition-related integration charges.

/2/  Special items in the first quarter of 2001 excluded from selling, general
     and administrative expenses represent a $39 million provision for loans and
     receivables related to CCC and $1 million of acquisition-related
     integration charges.

Revenue: Revenue for the three months ended March 31, 2002 was $1,247 million, a
decrease of 9% from the first quarter of 2001. When adjusted for the impact of
changes in foreign currency exchange rates, revenue decreased 7%.

By key solution (including customer services maintenance), Data Warehousing
experienced revenue growth of 3%, offset by revenue declines in Financial Self
Service and Retail Store Automation of 2% and 18%, respectively. The improvement
in Data Warehousing was driven by growth in customer service maintenance revenue
attributed to the larger installed customer base. The revenue decline in
Financial Self Service was due primarily to the constrained capital spending in
the Americas region and a lower level of growth in the Asia-Pacific region
compared to previous quarters. Retail Store Automation experienced significant
revenue declines against a difficult comparison to the prior-year period (which
included revenue from a major Kmart self-checkout rollout), and continued to be
affected by the United States economic environment and its impact on capital
spending.

Revenue in the first quarter of 2002 as compared with the first quarter of 2001
decreased in the Americas, Europe/Middle East/Africa (EMEA), Japan and
Asia-Pacific regions by 15%, 1%, 4%, and 7%, respectively. When adjusted for the
impact of changes in foreign currency exchange rates, revenue increased 2% in
the EMEA region and 7% in Japan, offset by a decline of 5% in the Asia-Pacific
region excluding Japan. The revenue decline in the Americas region was primarily
driven by the constrained capital spending related to the difficult economic
environment. The revenue declines in Japan and the

                                       12



EMEA region were primarily due to currency rate fluctuations. The decline in the
Asia-Pacific region was primarily driven by the economic downturn extending into
regional markets. The Americas region comprised 50% of our total revenue in the
first quarter of 2002, EMEA region comprised 31%, Asia Pacific region, excluding
Japan, comprised 10% and Japan comprised 9%.

Gross Margin and Operating Expenses: Gross margin as a percentage of revenue
(excluding the special items described above) decreased 1.8 percentage points to
28.1% in the first quarter of 2002 from 29.9% in the first quarter of 2001.
Products gross margin decreased 1.3 percentage points to 34.6% in the first
quarter of 2002 due largely to the overall lower volume of sales and a lower mix
of higher margin products in our Financial Self Service and Retail Store
Automation solutions. The declines were partially offset by improved product
margin in Data Warehousing relating to a higher software sales mix versus lower
margin hardware sales. Services gross margin decreased 2.1 percentage points to
21.7% in the first quarter of 2002 as lower than expected revenues in our
services business affected our ability to leverage our semi-fixed cost
infrastructure.

Total expenses in the first quarter of 2002 were $341 million compared to $373
million (excluding the special items and goodwill amortization described above)
for the first quarter of 2001. Selling, general and administrative expenses
decreased $12 million in the first quarter of 2002 from the first quarter of
2001. The decrease versus prior year is the result of our continued efforts to
improve our cost infrastructure and curtail our discretionary spending. Research
and development expenses decreased $20 million to $56 million in the first
quarter of 2002. As a percentage of revenue, research and development expenses
were 4.5% in the first quarter of 2002 compared to 5.5% in the first quarter of
2001. The decrease in research and development expenses is primarily a result of
the elimination of duplicative expenses in our customer relationship management
software relating to our acquisition of Ceres, LLC.

During the first quarter of 2002, we realized a $19 million benefit from pension
income versus a $33 million benefit in the first quarter of 2001.

Income Before Income Taxes and Cumulative Effect of Accounting Change: Operating
income was $9 million in the first quarter of 2002 compared to $38 million
(excluding the special items and goodwill amortization described above) in the
first quarter of 2001.

Other expense, net, was $3 million in the first quarter of 2002. Reported other
expense, net, was $7 million in the first quarter of 2001. Excluding a $1
million provision for interest receivable related to CCC and goodwill
amortization of $2 million, other expense, net, was $4 million in the first
quarter of 2001.

Income before income taxes was $6 million in the first quarter of 2002. The
reported loss before income taxes for the first quarter of 2001 was $26 million.
Excluding all special items (a $40 million provision for loans and receivables
related to CCC, and $2 million of acquisition-related integration charges) and
$18 million of goodwill amortization expense ($16 million in operating expense
and $2 million in other expense), income before income taxes was $34 million in
the first quarter of 2001.

Provision for Income Taxes: Income tax provisions for interim periods are based
on estimated annual income tax rates calculated without the effect of special
items and goodwill amortization. At an estimated effective tax rate of 30% for
2002, the first quarter income tax provision was $2 million compared to a $7
million provision in the first quarter of 2001.

Including the effect of the special items and goodwill amortization, the income
tax benefit in the first quarter of 2001 was $147 million. The tax benefit of
special items and goodwill amortization in the first quarter of 2001 was $154
million, and was comprised of a $138 million tax benefit related to the
favorable resolution of international tax issues and a $16 million benefit
related to acquisition-related integration charges, the provision for loans and
receivables with CCC and goodwill amortization.

Financial Condition, Liquidity, and Capital Resources
-----------------------------------------------------

Our cash, cash equivalents, and short-term investments totaled $379 million at
March 31, 2002 compared to $336 million at December 31, 2001.

Operating Activities: We generated cash flow from operations of $81 million in
the first three months of 2002 compared to $37 million generated in the first
three months of 2001. The cash generated from operations in the first three
months of 2002 was driven primarily by improved free cash flow and a continued
focus on balance sheet management. Compared to the

                                       13



prior-year period, receivable balances decreased $34 million in the first three
months of 2002 versus a $248 million decrease in the same period in 2001.
Revenues in December 2001 were $210 million lower than in December 2000
resulting in a commensurate decrease in year-end receivables for 2001.
Accordingly, subsequent collections of 2001 year-end receivables netted less
cash in the first quarter of 2002 than in the first quarter of 2001.
Approximately $36 million of receivables were factored without recourse during
the first quarter of 2002 compared to $80 million in the prior-year period.
Inventory balances increased $1 million in the first three months of 2002
compared to an increase of $40 million in the same period of 2001. Current
payables decreased $45 million in the first three months of 2002 compared to a
decrease of $184 million in the same period of 2001. The year over year change
was primarily driven by a lower volume of business during the fourth quarter of
2001 compared to the volume of business experienced during the fourth quarter of
2000. The timing of disbursements for employee severance and pension resulted in
a $33 million utilization of cash in the first three months of 2002 compared to
a $59 million utilization of cash in the prior-year period.

Investing Activities: Net cash flows used in investing activities was $38
million in the first three months of 2002 and $96 million in the same period of
2001. The improvement versus the prior-year period was primarily due to lower
capital expenditures during the first quarter of 2002 compared to the first
quarter of 2001. Capital expenditures were $20 million for the first quarter of
2002 and $53 million for the comparable period in 2001.

Financing Activities: Net cash provided by financing activities was zero during
the first three months of 2002 compared to $26 million in the same period of
2001. In the first three months of 2002, no cash was used for the purchase of
Company common stock pursuant to the systematic stock repurchase program
compared to a $34 million use for stock repurchases in the same period in 2001.
During the first three months of 2002, cash was utilized to repay short-and
long-term borrowings of $34 million, compared to a $26 million source of cash
from borrowing in the prior-year period. In the first three months of 2002 and
2001, other financing activities provided $34 million. Other financing
activities primarily relate to share activity under our stock option and
employee stock purchase plans.

Contractual and Other Commercial Commitments: There has been no significant
change in our contractual and other commercial commitments as described in our
2001 Annual Report to Stockholders and Form 10-K for the year ended December 31,
2001.

In October 2001, we entered into a $200 million 364-day unsecured revolving
credit facility with a one year term-out option and a $400 million five-year
unsecured revolving credit facility, both with a syndicate of financial
institutions. The credit facilities contain certain representations and
warranties; conditions; affirmative, negative and financial covenants; and
events of default customary for such facilities. Interest rates charged on
borrowings outstanding under the credit facilities are based on prevailing
market rates. No amounts were outstanding under the facilities at March 31, 2002
or December 31, 2001.

We believe that cash flows from operations, the credit facilities (existing or
future arrangements) and other short- and long-term debt financings, if any,
will be sufficient to satisfy our future working capital, research and
development, capital expenditures and other financing requirements for the
foreseeable future. Our ability to generate positive cash flows from operations
is dependent on general economic conditions, competitive pressures, and other
business and risk factors described below in Management's Discussion and
Analysis of Financial Condition and Results of Operations. If we are unable to
generate sufficient cash flows from operations, or otherwise comply with the
terms of our credit facilities, we may be required to refinance all or a portion
of our existing debt or seek additional financing alternatives.

Factors That May Affect Future Results
This quarterly report and other documents that we file with the Securities and
Exchange Commission (SEC), as well as other oral or written statements we may
make from time to time, contain information based on management's beliefs and
include forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995) that involve a number of known and unknown risks,
uncertainties and assumptions. These forward-looking statements are not
guarantees of future performance, and there are a number of factors including,
but not limited to, those listed below, which could cause actual outcomes and
results to differ materially from the results contemplated by such
forward-looking statements. We do not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

                                       14



Competition
-----------
Our ability to compete effectively within the technology industry is critical to
our future success.

We operate in the intensely competitive information technology industry. This
industry is characterized by rapidly changing technology, evolving industry
standards, frequent new product introductions, price and cost reductions, and
increasingly greater commoditization of products, making differentiation
difficult. In addition, this intense competition increases pressure on gross
margins that could impact our business and operating results. Our competitors
include other large, successful companies in the technology industry such as:
International Business Machines Corporation (IBM), Oracle Corporation, Unisys
Corporation, Diebold, Inc. and Wincor Nixdorf GmbH & Co., some of which have
widespread penetration of their platforms and service offerings. In addition, we
compete with companies in niche markets such as advanced retail solutions and
entry-level ATMs. If we are unable to compete successfully, the demand for our
solutions, including products and services would decrease. Any reduction in
demand could lead to fewer customer orders, a decrease in the prices of our
products and services, reduced revenues, reduced margins, operating
inefficiencies, reduced levels of profitability and loss of market share.

Our future competitive performance depends on a number of factors, including our
ability to: rapidly and continually design, develop and market, or otherwise
maintain and introduce solutions and related products and services for our
customers that are competitive in the marketplace; offer a wide range of
solutions from web-enabled kiosks to enterprise data warehouses; offer solutions
to customers that operate effectively within a computing environment which
includes the integration of hardware and software from multiple vendors; offer
products that are reliable and that ensure the security of data and information;
offer high quality, high availability network services; market and sell all of
our solutions effectively; and produce and deliver solutions at competitive
operating margins. These competitive factors and pricing pressures may impact
our ability to improve gross margins and profitability, especially in our more
mature solution offerings such as our Financial Self Service and traditional
Retail Store Automation solutions.

Introduction of New Solutions
-----------------------------
The solutions we sell are very complex, and we need to rapidly and successfully
develop and introduce new solutions.

We operate in a very competitive, rapidly changing environment, and our future
success depends on our ability to develop and introduce new solutions that our
customers choose to buy. If we are unable to develop new solutions, our business
and operating results would be impacted. This includes our efforts to rapidly
develop and introduce data warehousing software applications. The development
process for our complex solutions, including our software application
development programs, requires high levels of innovation from both our
developers and our suppliers of the components embedded in our solutions. In
addition, the development process can be lengthy and costly. It requires us to
commit a significant amount of resources to bring our business solutions to
market. If we are unable to anticipate our customers' needs and technological
trends accurately, or are otherwise unable to complete development efficiently,
we would be unable to introduce new solutions into the market on a timely basis,
if at all, and our business and operating results would be impacted. In
addition, if we are unable to successfully market and sell both existing and
newly developed solutions, such as our self-checkout technologies, electronic
shelf labels and full-function ATMs and outsourcing solutions, our operating
results would be impacted.

Our solutions, which contain both hardware and software products, may contain
known as well as undetected errors which may be found after the products'
introduction and shipment. While we attempt to remedy errors that we believe
would be considered critical by our customers prior to shipment, we may not be
able to detect or remedy all such errors, and this could result in lost
revenues, delays in customer acceptance and incremental costs, which would all
impact our operating results.

Reliance on Third Parties
-------------------------
Third party suppliers provide important elements to our solutions.

We rely on many suppliers for necessary parts and components to complete our
solutions. In most cases, there are a number of vendors producing the parts and
components that we utilize. However, there are some components that are
purchased from single sources due to price, quality, technology or other
reasons. For example, we depend on chips and microprocessors from Intel
Corporation and operating systems from UNIX(R) and Microsoft Windows NT(R).
Certain parts and components used in the manufacture of our ATMs and the
delivery of some of our Retail Store Automation solutions are also supplied by
single sources. If we were unable to purchase the necessary parts and components
from a particular vendor and we had to find an alternative supplier for such
parts and components, our new and existing product shipments and solutions
deliveries could be delayed, impacting our business and operating results.

                                       15



We have, from time to time, formed alliances with third parties that have
complementary products, services and skills. Many different relationships are
formed by these alliances such as outsourcing arrangements to manufacture
hardware and subcontract agreements with third parties to perform services and
provide products to our customers in connection with our solutions. These
alliances introduce risks that we cannot control such as non-performance by
third parties and difficulties with or delays in integrating elements provided
by third parties into our solutions. The failure of third parties to provide
high quality products or services that conform to the required specifications or
contractual arrangements could impair the delivery of our solutions on a timely
basis and impact our business and operating results.

Acquisitions and Alliances
--------------------------
Our ability to successfully integrate acquisitions or effectively manage
alliance activities will help drive future growth.

As part of our overall solutions strategy, we intend to continue to make
investments in companies, products, services and technologies, either through
acquisitions, joint ventures or strategic alliances. Acquisitions and alliance
activities inherently involve risks. The risks we may encounter include those
associated with assimilating and integrating different business operations,
corporate cultures, personnel, infrastructures and technologies or products
acquired or licensed, retaining key employees and the potential for unknown
liabilities within the acquired or combined business. The investment or alliance
may also disrupt our ongoing business, or we may not be able to successfully
incorporate acquired products, services or technologies into our solutions and
maintain quality. Further, we may not achieve the projected synergies once we
have integrated the business into our operations.

It is our policy not to discuss or comment upon negotiations regarding such
business combinations or divestitures until a definitive agreement is signed or
circumstances indicate a high degree of probability that a material transaction
will be consummated, unless the law requires otherwise.

Operating Result Fluctuations
-----------------------------
Our revenues and operating results could fluctuate for a number of reasons.

Future operating results could continue to be subject to fluctuations based on a
variety of factors, including:

Seasonality. Our sales are historically seasonal, with revenue higher in the
fourth quarter of each year. During the three quarters ending in March, June and
September, we have historically experienced less favorable results than in the
quarter ending in December. Such seasonality also causes our working capital
cash flow requirements to vary from quarter to quarter depending on the
variability in the volume, timing and mix of product sales. In addition, revenue
in the third month of each quarter is typically higher than in the first and
second months. These factors, among other things, make forecasting more
difficult and may adversely affect our ability to predict financial results
accurately.

Acquisitions and Alliances. As part of our solutions strategy, we intend to
continue to acquire technologies, products and businesses as well as form
strategic alliances and joint ventures. As these activities take place and we
begin to include the financial results related to these investments, our
operating results will fluctuate.

Cost/Expense Reductions. We are actively working to manage our costs and
expenses to continue to improve operating profitability without jeopardizing the
quality of our products. We are also striving to become the leading, low-cost
provider of certain Financial Self Service and Retail Store Automation
solutions. Our success in achieving targeted cost and expense reductions depends
on a number of factors, including our ability to achieve infrastructure
rationalizations, implement Six Sigma practices, improve accounts receivable
collections, and reduce inventory overhead, among other things. If we do not
successfully complete our cost reduction initiatives, our results of operation
or financial condition could be adversely affected.

Multinational Operations
------------------------
Continuing to generate substantial revenues from our multinational operations
helps to balance our risks and meet our strategic goals.

Currently, approximately 57% of our revenues come from our international
operations. We believe that our geographic diversity may help to mitigate some
risks associated with geographic concentrations of operations (e.g., adverse
changes in foreign currency exchange rates or business disruptions due to
economic or political uncertainties). However, our ability to sell our solutions
domestically in the United States and internationally is subject to the
following risks, among others: general economic and political conditions in each
country which could adversely affect demand for our solutions in these markets;
currency exchange rate fluctuations which could result in lower demand for our
products as well as generate currency

                                       16



translation losses; changes to and compliance with a variety of local laws and
regulations which may increase our cost of doing business in these markets or
otherwise prevent us from effectively competing in these markets; and the impact
of terrorist activity on the economy or markets in general, or on our ability,
or that of our suppliers, to meet commitments, or on the timing of purchases by
our customers.

Employees
---------
Hiring and retaining highly qualified employees helps us to achieve our business
objectives.

Our employees are vital to our success, and our ability to attract and retain
highly skilled technical, sales, consulting and other key personnel is critical,
as these key employees are difficult to replace. If we are not able to attract
or retain highly qualified employees in the future, our business and operating
results could be impacted.

Intellectual Property
---------------------
As a technology company, our intellectual property portfolio is key to our
future success.

Our intellectual property portfolio is a key component of our ability to be a
leading technology and services solutions provider. To that end, we aggressively
protect and work to enhance our proprietary rights in our intellectual property
through patent, copyright, trademark and trade secret laws, and if our efforts
fail, our business could be impacted. In addition, many of our offerings rely on
technologies developed by others, and if we are not able to continue to obtain
licenses for such technologies, our business would be impacted. Moreover, from
time to time, we receive notices from third parties regarding patent and other
intellectual property claims. Whether such claims are with or without merit,
they may require significant resources to defend and, if an infringement claim
is successful, in the event we are unable to license the infringed technology or
to substitute similar non-infringing technology, our business could be adversely
affected.

Economic Pressures
------------------
Our business is affected by the global economies in which we operate.

The recent economic downturn and the subsequent decline in capital spending by
many industries, particularly retail and telecommunications, could impact our
ability to meet our commitments to customers, the ability of our suppliers to
meet their commitments to us, or the timing of purchases (including upgrades to
existing data warehousing solutions and retail point of sale solutions) by our
current and potential customers. The extent of this impact, if any, is dependent
on a number of factors, including the duration and intensity of the downturn,
its effect on the markets in general and other general economic and business
conditions.

Environmental
-------------
Our historical and ongoing manufacturing activities subject us to environmental
exposures.

We have been identified as a potentially responsible party in connection with
the Fox River matter as further described in "Environmental Matters" under Note
5 of Notes to Condensed Consolidated Financial Statements, and we incorporate
such discussion in this Management's Discussion and Analysis of Financial
Condition and Results of Operations by reference and make it a part of this risk
factor.

Contingencies
-------------
Like other technology companies, we face uncertainties with regard to
regulations, lawsuits and other related matters.

We are subject to regulations, proceedings, lawsuits, claims and other matters,
including those that relate to the environment, health and safety, and
intellectual property. Such matters are subject to the resolution of many
uncertainties; thus, outcomes are not predictable with assurance. While we
believe that amounts provided in our financial statements are currently adequate
in light of the probable and estimable liabilities, there can be no assurances
that the amounts required to discharge alleged liabilities from lawsuits, claims
and other legal proceedings and environmental matters, and to comply with
applicable environmental laws, will not impact future operating results.

                                       17



Recently Issued Accounting Pronouncements

Statement of Financial Accounting Standards No. 142. We adopted Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
(SFAS 142) on January 1, 2002. SFAS 142, which supersedes Accounting Principles
Board Opinion No. 17, "Intangible Assets", defines new accounting treatment for
goodwill and other intangible assets. This standard eliminates the amortization
of goodwill and other intangible assets that have indefinite lives. It
establishes a requirement that goodwill and other intangible assets with
indefinite lives be tested at least annually for impairment, provides specific
guidance on such testing, and requires disclosures of information about goodwill
and other intangible assets in the years subsequent to their acquisition. As
required by the adoption of SFAS 142, we are employing the transitional goodwill
impairment test to assess the potential impairment loss of our goodwill assets.
We have not finalized the analysis, but expect to record a non-cash impairment
loss of between $300 million and $350 million as a cumulative effect of
accounting change in the second quarter of 2002.

Key Accounting Policies

There has been no significant change in our key accounting policies as described
in our 2001 Annual Report to Stockholders and Form 10-K for the year ended
December 31, 2001.

                                       18



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

We are exposed to market risk, including changes in foreign currency exchange
rates and interest rates. We use a variety of measures to monitor and manage
these risks, including derivative financial instruments. Since a substantial
portion of our operations and revenue occur outside the U.S., and in currencies
other than the U.S. dollar, our results can be significantly impacted by changes
in foreign currency exchange rates. To manage our exposures to changes in
currency exchange rates, we enter into various derivative financial instruments
such as forward contracts and options. These instruments generally mature within
12 months. At inception, select derivative instruments are designated as
cash-flow hedges of inventory purchases and sales, and of certain financing
transactions that are firmly committed or forecasted. Gains and losses on
qualifying cash-flow hedge transactions are deferred and recognized in the
determination of income when the underlying transactions are realized, canceled
or otherwise terminated. When hedging certain foreign currency transactions of a
long-term investment nature, gains and losses are recorded in the currency
translation adjustment component of stockholders' equity. Gains and losses on
other foreign exchange contracts are recognized in other income or expense as
exchange rates change.

For purposes of potential risk analysis, we use sensitivity analysis to quantify
potential impacts that market rate changes may have on the fair values of our
hedge portfolio related to firmly committed or forecasted transactions. The
sensitivity analysis represents the hypothetical changes in value of the hedge
position and does not reflect the related gain or loss on the forecasted
underlying transaction. As of March 31, 2002 and 2001, a 10% appreciation in the
value of the U.S. dollar against foreign currencies from the prevailing market
rates would result in a $63 million increase or a $40 million increase in the
fair value of the hedge portfolio, respectively. Conversely, a 10% depreciation
of the U.S. dollar against foreign currencies from the prevailing market rates
would result in a $24 million decrease or a $6 million decrease in the fair
value of the hedge portfolio as of March 31, 2002 and 2001, respectively.

The interest rate risk associated with our borrowing and investing activities at
March 31, 2002 was not material in relation to our consolidated financial
position, results of operations or cash flows. We generally do not use
derivative financial instruments to alter the interest rate characteristics of
our investment holdings or debt instruments.

The only financial instruments that we utilize that are not exchange traded are
foreign exchange forward contracts and options that we purchase exclusively from
large financial institutions. We record these contracts on our balance sheet at
fair market value based upon market-price quotations from the financial
institutions. Accordingly, we do not enter into non-exchange traded contracts
that require the use of fair value estimation techniques, and that would have a
material impact on our financial results.

We are potentially subject to concentrations of credit risk on accounts
receivable and financial instruments such as hedging instruments, short-term
investments, and cash and cash equivalents. Credit risk includes the risk of
nonperformance by counterparties. The maximum potential loss may exceed the
amount recognized on the balance sheet. Exposure to credit risk is managed
through credit approvals, credit limits, selecting major international financial
institutions (as counterparties to hedging transactions) and monitoring
procedures. Our business often involves large transactions with customers, and
if one or more of those customers were to default in its obligations under
applicable contractual arrangements, we could be exposed to potentially
significant losses. Moreover, the recent downturn in the U.S. economy could have
an adverse impact on the ability of our customers to pay their obligations on a
timely basis. However, we believe that the reserves for potential losses are
adequate. At March 31, 2002 and 2001, we did not have any major concentration of
credit risk related to financial instruments.

                                       19



                           Part II. Other Information

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the first
quarter of 2002. NCR's Annual Meeting of Stockholders was held on April 24,
2002. At the Annual Meeting, stockholders voted on three matters: a proposal to
elect C.K. Prahalad and William S. Stavropoulos as Class C directors, a proposal
to approve the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for 2002, and a stockholder proposal regarding adoption
of the MacBride Principles in Northern Ireland. The number of shares voted with
respect to each matter required to be reported herein are as follows:

1.   Election of Class C Directors:

     C.K. Prahalad                   For: 78,941,591       Withheld: 2,217,724
     William S. Stavropoulos         For: 78,948,701       Withheld: 2,210,613

     Directors whose term of office continued after the meeting:

     Lars Nyberg
     David R. Holmes
     Linda Fayne Levinson
     James R. Long
     James O. Robbins

2.   Approve appointment of PricewaterhouseCoopers LLP as independent
     accountants for 2002.

                           For:                      77,649,605
                           Against:                   3,094,170
                           Abstain:                     403,133

3.   Stockholder proposal regarding the Company's business operations in
     Northern Ireland.

                           For:                       9,399,691
                           Against:                  57,213,197
                           Abstain:                   2,228,563

                                       20



Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

     3.1      Articles of Amendment and Restatement of NCR Corporation as
              amended May 14, 1999 (incorporated by reference to Exhibit 3.1
              from the NCR Corporation Form 10-Q for the period ended June 30,
              1999) and Articles Supplementary of NCR Corporation (incorporated
              by reference to Exhibit 3.1 from the NCR Corporation Annual Report
              on Form 10-K for the year ended December 31, 1996 (the "1996 NCR
              Annual Report")).

     3.2      Bylaws of NCR Corporation, as amended and restated on June 25,
              2001 (incorporated by reference to Exhibit 3.2 from the NCR
              Corporation Form 10-Q for the quarter ended June 30, 2001).

     4.1      Common Stock Certificate of NCR Corporation (incorporated by
              reference to Exhibit 4.1 from the NCR Corporation Annual Report on
              Form 10-K for the year ended December 31, 1999).

     4.2      Preferred Share Purchase Rights Plan of NCR Corporation, dated as
              of December 31, 1996, by and between NCR Corporation and The First
              National Bank of Boston (incorporated by reference to Exhibit 4.2
              from the 1996 NCR Annual Report).

     4.3      NCR Corporation hereby agrees to furnish the Securities and
              Exchange Commission, upon its request, a copy of any instrument
              which defines the rights of holders of long-term debt of NCR
              Corporation and all of its subsidiaries for which consolidated or
              unconsolidated financial statements are required to be filed, and
              which does not exceed 10% of the total assets of NCR Corporation
              and its subsidiaries on a consolidated basis.

          (b) Reports on Form 8-K

              NCR filed a Current Report on Form 8-K dated April 23, 2002, which
              reported under Item 5 of such form the Press Release addressing
              NCR's results for the first quarter of 2002. NCR filed a Current
              Report on Form 8-K dated April 29, 2002, which reported under Item
              5 of such form the purchase of 25,000 shares of NCR stock by Lars
              Nyberg, Chairman and Chief Executive Officer of NCR Corporation.





UNIX is either a registered trademark or trademark of The Open Group in the
United States and/or other countries. Windows NT is either a registered
trademark or trademark of Microsoft Corporation in the United States and/or
other countries. Six Sigma is either a registered trademark or trademark of
Motorola, Inc. in the United States and/or other countries.

                                       21



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        NCR CORPORATION

Date: May 6, 2002                       By: /s/ Earl Shanks
                                        ------------------------------------

                                        Earl Shanks, Senior Vice President
                                        and Chief Financial Officer