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Response Letter to the SEC

 1700 S. Patterson Boulevard

 Dayton, OH 45479

 June 12, 2006

 Mr. Brad Skinner

 Accounting Branch Chief

 United States Securities and Exchange Commission

 Washington, D.C. 20549

Re:

NCR Corporation

Form 10-K for Fiscal Year Ended December 31, 2005

Filed March 10, 2006

Form 10-Q for Fiscal Quarter Ended March 31, 2006

Filed May 8, 2006

Form 8-K filed during Fiscal 2006

File No. 1-00395

 Dear Mr. Skinner,

 Thank you for your comment letter dated May 16, 2006 (the “Comment Letter”). We are interested in continuing to enhance our disclosures and, with that
objective, have considered the Commission’s comments. Set forth below is NCR Corporation’s (the “Company”) response to your comments based on your review of NCR’s Form 10-K for Fiscal Year Ended December 31, 2005, Form
10-Q for Fiscal Quarter Ended March 31, 2006, and Form 8-K filed during Fiscal 2006 (File No. 1-00395). The comments from your letter of May 16, 2006 are included below in bold. The Company’s response follows each comment. Please
do not hesitate to contact me if there are any comments or questions concerning our responses or if we can be of further assistance.

 Form 10-K for the period ended December 31, 2005

 Management’s
Discussion and Analysis, pages 9-22

 Operating Expenses, page 19

1.
Your current discussion indicates that “selling, general and administrative expenses” decreased in both dollar terms and as a percentage of revenues in 2005 in
comparison to 2004. Tell us what consideration you have given to actually discussing the changes in the individual costs, which, in the aggregate, encompass this line item in the statement

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 of operations.
In this regard, explain to us how you have considered identifying and quantifying the specific changes in your infrastructure expenditures that resulted in the reduction in your selling, general and administrative expenses. See
Item 303(a)(3)(i) and Instruction 4 to paragraph 303(a) of Regulation S-K.

 The decline in “selling, general and
administrative expenses” in 2005 compared to 2004 is primarily the result of our cost reduction program started in 2002 and further described in Note 3 of Notes to Consolidated Financial Statements and within the Management’s Discussion
and Analysis of Financial Condition and Results of Operations (MD&A) under “2005 Financial Overview” and “Restructuring and Re-engineering” in our Form 10-K for Fiscal Year Ended December 31, 2005. The infrastructure
savings are generated from a number of discrete programs and a general reduction in discretionary spending within the Information Technology, Real Estate, Human Resources, and Finance functional areas. We did not believe that discussing the changes
in the individual costs would add meaningfully to an understanding of NCR’s business as a whole. Many of these cost savings programs are disclosed in the Form 10-K and include migration to a new Enterprise Resource Planning (ERP) system,
movement to a global outsourcing provider and centralization of our staffing organization. As part of our disclosure considerations, we include additional information whenever there are large or unusual items that would be beneficial for a reader of
the financial statements to understand. We will continue to enhance our disclosure in this regard in future periods as the circumstances warrant.

 Interest and Other Expense and Income Items, page 19

2.
We note your discussion under this section regarding various individual items included in the line item “Other income (expense), net.” The discussion appears to provide
only limited discussion of the facts and circumstances regarding the timing and amount of these charges. In this regard, we note the following:

•

Your discussion of the write-down of the equity investment in Germany does not describe what led you to conclude that a write-down was necessary, how the amount of the write-down
was determined, whether there was a remaining balance after the write-down, or the status of the investee; and,

 We
believe our disclosure in Note 11 of Notes to Condensed Consolidated Financial Statements in our Form 10-Q for Fiscal Quarter Ended March 31, 2005 sufficiently explains the facts and circumstances surrounding the impairment charge. In that
note, we disclosed that:

 “At March 31, 2005, NCR held a 26% ownership in a company located in Germany. On April 5, 2005 the
German company publicly disclosed that it had been contacted by a third party who offered to purchase all of its outstanding shares. In the same disclosure, the German company also announced its 2004 operating results and its 2005 projections. These
events caused NCR to reassess our ability to recover the carrying amount of our

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 equity investment
which is accounted for under the Equity Method of Accounting for Investments in Common Stock (Accounting Principles Board [Opinion] No. 18). Based on our updated assessment, NCR determined the book value of the investment exceeded the fair
market value and determined that it was unlikely that we could recover the carrying amount of our investment. As a result, we wrote-down the book value of our investment by $10 million to the estimated fair market value. As these events provided
additional evidence with respect to conditions that existed at March 31, 2005, NCR adjusted the first quarter 2005 financial statements accordingly.”

 The balance of the investment, after the write-down, was $14 million as of March 31, 2005. Each quarter, we continue to assess the value of this investment in relation to the fair market value of the investee.
The current carrying amount of the investment at March 31, 2006 was $12 million, which we believe is currently recoverable.

•

Your discussion of the release of a $9 million reserve for exit activities does not explain when the reserve was recorded or how you determined the timing and amount of the
reserve release.

 The reserve for exit activities was provided prior to our 1997 spin-off from AT&T Corporation, and
was intended to account for losses on the sale of businesses when we anticipated exiting certain countries in the Middle East and Africa (MEA) region. Prior to the release of the reserve in Q4 2004, there had been no significant additions or
releases to the reserve since the end of 2000. Up until mid-2004, we believed that a local distributor could operate more profitably and therefore, we attempted to sell these businesses. However, during this time we found it challenging to sell
these businesses because it was difficult to find quality local representatives that could maximize the value for NCR. As disclosed in Note 3 of Notes to Consolidated Financial Statements and in the MD&A under “Interest and Other Expense
and Income Items” in our Form 10-K for Fiscal Year Ended December 31, 2004, due to a realignment in strategy in late 2004, we believed that we could profitably market a range of products in these countries by utilizing a shared resource
infrastructure and targeting growth opportunities. As a result of this realignment in Q4 2004, we determined that we would not sell these businesses and therefore the reserve was no longer required.

 Supplementally, explain to us how you considered providing a more detailed discussion of the amounts identified under this section.

 When evaluating our disclosure, we assessed the level of materiality for a particular item during the specific reporting period. As referenced above, the
write-down of the Germany equity investment was included in more detail in our Form 10-Q for Fiscal Quarter Ended March 31, 2005. The description of this item was condensed in the Form 10-K for Fiscal Year Ended December 31, 2005 due its
lower relative materiality to the total year, as compared to its materiality in the particular quarter. Also, as referenced above, the MEA

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 reserve release was
included in more detail in the Form10-K for Fiscal Year Ended December 31, 2004 and therefore was included in a more condensed manner in our Form 10-K for Fiscal Year Ended December 31, 2005.

3.
Supplementally, explain your basis for reporting the release of the $9 million reserve for exit activities as a non-operating item.

 We described this item in our Q4 2004 Press Release and subsequent filing on Form 8-K, as well as in the Form 10-K for Fiscal Years Ended
December 31, 2004 and 2005. Our intent was to indicate that this was a non-operational release of an accrual provided prior to our 1997 spin-off from AT&T. Accordingly, we classified this item in “Other Income and Expense” in
order to not distort operating income results in the reporting period and because this is where the original charge was believed to have been recorded.

4.
We note that the individual items in your discussion under this section do not appear to sum to the totals reported on your statements of operations. Explain to us how you have
considered quantifying, describing or otherwise addressing the other items included in this line item.

 Our objective in
describing “Other (income) expense, net” is to specifically identify any large or unusual items that have had a significant impact in the quarter or full year. The majority of the remaining balance consists of items that are typically
expected to be found in “Other Income and Expense” including interest income, minority interest, gain/loss on equity investments, etc.

 Income Taxes, page 19

5.
You recognized a $214 million tax benefit during 2005 which related to the successful resolution of prior year tax audits. Supplementally, explain to us, in reasonable detail,
how the timing and amount of the initial accrual and subsequent reversal were determined. As part of your response, identify the year(s) and jurisdiction(s) to which the adjustments related. Explain how you have considered providing corresponding
disclosure in your MD&A.

 During 2005, the Company realized income tax benefits totaling $214 million from the
favorable settlement of prior year domestic tax audits. During the second quarter of 2005, the Company settled the tax audit for years 1997-1999 with the appellate level of the IRS resulting in a tax benefit of $64 million. During the third quarter
of 2005, the Company settled the tax audit for years 2000-2002 with the examination level of the IRS resulting in a tax benefit of $150 million. This resolution was reached and signed by both the IRS and NCR within the quarter with no need for
escalation to the appellate level within the IRS. Approximately $1 million related to the state tax effect of federal items while the remaining balance of the accruals related to the US federal tax jurisdiction and to the years referenced above.

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 The initial tax
accruals were established based upon the nature of uncertain tax positions in the IRS federal return for the tax years 1997-2002, and accruals for the related interest were compounded each year. The accruals were established by specifically
identifying any risk items within the tax return and then assessing the likelihood of the items being challenged or overturned. Items determined to be not probable of being sustained are provided for. For items that are probable, a best estimate was
recorded for effective tax rate purposes. This methodology is followed on a consistent basis each year. The tax accruals were necessary due to uncertainty regarding the ultimate sustainability of tax return deductions taken for matters such as
worthless stock and debt of related parties and the taxation of dividend repatriation. These areas are prone to tax controversy and rely heavily on expert judgment as to valuations and complex areas of tax law.

 The tax benefits related to these settlements were disclosed in the Notes to Condensed Consolidated Financial Statements and the related MD&A in the
Form 10-Q for Fiscal Quarters Ended June 30, 2005 and September 30, 2005. The disclosure in Note 7 of the Notes to Consolidated Financial Statements and the MD&A in the Form 10-K for Fiscal Year Ended December 31, 2005 was
intended to quantify the amounts and provide further information concerning the benefits associated with these settlements. Within MD&A, we briefly described these settlements and provided the reader with a tax rate including and excluding any
non-recurring items. Our objective was to simplify the explanation and provide useful information to the readers of our financial statements.

6.
Explain to us, in reasonable detail, the facts and circumstances surrounding the $9 million adjustment to your tax accounts in the United Kingdom. Tell us what consideration you
have given to providing similar explanatory disclosure in your MD&A.

 As disclosed in Note 7 of the Notes to
Consolidated Financial Statements in the Form 10-K for Fiscal Year Ended December 31, 2005, the income tax benefit for 2005 included a non-cash $9 million benefit from an adjustment to our tax accounts in the United Kingdom. The adjustment
related to deferred taxes that were originally recorded in years prior to 2003. We determined that the impact of this adjustment was immaterial to the results of operations for all current and prior periods.

 During 2005, we devoted time to improving our processes for compiling detailed supporting documentation of our income tax balance sheet accounts for our
U.K. subsidiaries. This included developing enhanced support for tax payables/receivables, gross temporary differences, group relief payables/receivables and net operating losses. The result of this initiative identified some additional book/tax
differences that required an adjustment to the total deferred tax balances for our U.K. subsidiaries. We determined during the 2005 year-end review of the income tax provision that $9 million of the income tax benefit resulting

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 from the adjustment
to the U.K. income tax accounts described above was related to the correction of prior period errors. As a result of this finding, we completed a SAB 99 analysis to determine if the correction of these errors had a material impact between reporting
periods. Based on the analysis, we concluded that from both a quantitative and qualitative perspective, the errors were not material to either the periods when the deferred tax benefits should have been recognized (but were not), or to the current
period, when the cumulative impact of correcting the errors (the out-of-period adjustment) was recognized. In addition, we considered this event and the potential for material error in our assessment of the effectiveness of our internal control over
financial reporting. We concluded that this event did not represent a material weakness.

 The disclosure in Note 7 of the Notes to
Consolidated Financial Statements and the MD&A in the Form 10-K for Fiscal Year Ended December 31, 2005 was intended to quantify the $9 million benefit and provide further information concerning the non-recurring nature of this item. Within
MD&A, we briefly described the U.K. item and then, as mentioned above, we provided the reader with a tax rate including and excluding any non-recurring items. Our objective in providing this disclosure was to simplify the explanation of a
complicated item and provide useful information to the readers of our financial statements.

 Financial Condition,
Liquidity and Capital Resources, page 20

7.
We note your disclosure of the non-GAAP measure “free cash flow”. Please note, your presentation should include a discussion of all material limitations associated with
the measure. In this regard, “free cash flow” should not be used in a manner that inappropriately implies that the measure represents residual cash flow available for discretionary expenditures since there may be mandatory debt service
requirements or other non-discretionary expenditures that are not deducted from the measure. For further gui