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SEC Letter

 1700 S. Patterson Boulevard

 Dayton, OH 45479

 August 30, 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

 Forms 10-Q filed during Fiscal 2006

 Filed May 8, 2006 and August 4, 2006

 Forms 8-K filed during Fiscal 2006

 File
No. 1-00395

 Dear Mr. Skinner,

 Thank you for your
comment letter dated August 8, 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, Forms 10-Q filed during Fiscal 2006, and Forms 8-K filed during Fiscal 2006 (File No. 1-00395). The
comments from your letter of August 8, 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.
We note your response to previous comment number 1. Currently, the discussion of items that impacted operating expenses in 2005 does not indicate the extent to which changes in
reported amounts are attributable to reductions in personnel costs, real estate costs or other costs or offsetting increases in expenditures related to demand creation or research and development activities. Separately, the discussion appearing

 NCR Corporation

 Page 2

 under the subheading “Restructuring and Re-engineering” does not provide any detail regarding the extent to which costs
savings have impacted various financial statement line items such as cost of products, cost of services, selling, general and administrative and research and development expenses. As a result, it does not appear that the existing disclosure is
sufficiently detailed to provide investors an understanding of the causes of the material changes in your financial statement line items. In view of this, revise your disclosure to provide a more detailed discussion of the causes of the material
changes in your financial statement line items. Alternatively, explain to us why no revision is necessary. For further guidance, see Section III.D of SEC Release 33-6835.

 Response:

 The Company’s restructuring
and re-engineering, which began in 2002, has resulted in cost savings primarily related to selling, general and administrative expenses. In future filings, the Company will revise its discussion of operating expenses to state the following:

 “Our 2005 operating expenses, characterized as “selling, general and administrative expenses” and “research and
development expenses” in the Consolidated Statements of Operations, were $1,321 million in 2005 compared to $1,383 million in 2004. As a percentage of revenue, total operating expenses for 2005 improved to 21.9% from 23.1% in 2004. The decrease
in selling, general and administrative costs of $65 million reflects our continued efforts to reduce our infrastructure costs through information technology savings of approximately $29 million, real estate savings of approximately $7 million,
finance savings of approximately $9 million, and other savings from primarily human resource-related programs of approximately $10 million. The remainder of the decrease was due to a reduction in discretionary spending, somewhat offset by an
increase in demand creation spending within our Data Warehousing business. Research and development expenditures were comparable to prior year levels and primarily include research and development activities for our three major product
businesses.”

 Income Taxes, page 19

2.
We note your response to previous comment number 5. Given the nature and the amount of the adjustments related to the settlements of prior year domestic tax audits, it appears
that a more detailed description of the circumstances surrounding the adjustments is warranted. In this regard, it appears that information similar to that provided in your response would be helpful to investors.

 Response:

 In future filings, the Company
will revise its discussion of the $214 million tax benefit recognized in 2005. The revised discussion will include a similar explanation as provided in the Company’s June 12, 2006 response to comment number 5 in the Commission’s
Comment Letter dated May 16, 2006.

 NCR Corporation

 Page 3

3.
We note that the impact of the reversal of tax accruals has been material to you. Separately, we note the disclosure in your MD&A indicating that the settlement of ongoing
audits could be material to you in future periods. In view of this, tell us the amount of your recorded reserves related to these ongoing audits. Additionally, explain the consideration you have given to disclosing the amounts of these reserves.

 Response:

 The
Company’s income tax reserve balances as of December 31, 2005 totaled $174 million. The reserves, by type of issue, were as follows:

In millions

December 31,
2005

Foreign Transfer Pricing

$
100

Reorganizations, Liquidations and Divestitures

20

Interest (primarily foreign)

19

Foreign

15

Other and State

20

Total Reserves

$
174

 The reserves related to foreign transfer pricing involve audits in and offsets between multiple
jurisdictions. Jurisdictions with reserves in excess of $1 million included the United Kingdom, Spain, Canada and India. The Company recorded the additional tax liabilities, which result from uncertain tax positions as non-current liabilities in the
caption, “Income taxes.” While we have not previously disclosed the amount of the total tax reserves, upon the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB
Statement No. 109, we will provide the new required disclosure. Also, beginning in our Form 10-Q filing for the Fiscal Quarter Ended September 30, 2006, we will separately disclose the total amount of our tax reserves.

 Financial Condition, Liquidity and Capital Resources, page 20

4.
We note your response to previous comment number 7. Currently, you disclose that free cash flow indicates the amount of cash available after capital expenditures for, among other
things, investments in your existing businesses, strategic acquisitions, repurchase of NCR stock and repayment of debt obligations. However, it appears that the measure of free cash flow you have presented is before reduction for any of the items
you identify. As a result, it is not clear why you believe your presentation adequately reflects the guidance in the answer to question 13 in the FAQ.

 NCR Corporation

 Page 4

 Response:

 As disclosed in our
Form 10-Q for Fiscal Quarter Ended June 30, 2006, we define “free cash flow” as net cash provided by operating activities less capital expenditures for property, plant and equipment, and additions to capitalized software. Positive
free cash flow allows the Company to invest in existing businesses, invest in strategic acquisitions, repurchase NCR stock and repay debt obligations, along with payments of other discretionary and non-discretionary expenditures, not already
deducted from the measure of free cash flow. In future filings, the Company will revise its definition and indicate that free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other
non-discretionary expenditures that are not deducted from the measure.

 Report on Form 10-Q for the Quarterly Period
Ended June 30, 2006

 Notes to Consolidated Financial Statements

 Note 1. Basis of Presentation and Accounting Change, page 6

5.
We note your response to prior comment number 12 from our letter dated May 16, 2006. Further explain to us your basis for concluding that your prior method of accounting for
reworkable service parts is acceptable. As part of your response, provide the following:

•

Explain why you believe that the pattern of revenue recognition under maintenance contracts should govern the recognition of costs incurred in connection with fulfilling your
obligations under specific contracts;

•

Explain why you believe that it was appropriate to amortize the cost of the pool of parts over the expected period for which they were used, as opposed to recording the cost of
parts in the periods in which they were actually used. As part of your response, explain why it would be appropriate for different maintenance contracts to bear the same amount of cost for reworkable service parts without regard to the extent to
which parts were actually consumed in connection with specific contracts;

•

Explain the basis for your assertion that your prior method was consistent with the methods followed by others in your industry;

•

Explain your basis for not previously adopting a policy that was consistent with the guidance of Q&A #12 of TIS Section 2140 of the AICPA Technical Questions; and,

•

Quantify the impact that the change in method would have on the financial statements included in your most recent 10-K and any subsequent interim periods.

 NCR Corporation

 Page 5

 Response:

 We believe our
prior method of accounting for reworkable service parts was acceptable and our new method is preferable. Our prior method of depreciating the reworkable service parts over the period they were expected to be used resulted in an attribution of
expense that was not materially different from the preferable “inventory method.” Under our prior method, we viewed the use of a straight-line depreciation approach as acceptable as it represented a systematic and rational manner of
allocating expenses to the periods expected to benefit from the use of the reworkable service parts.

 In response to your comments above, we
acknowledge that the pattern of revenue recognition under maintenance contracts should not govern the recognition of costs incurred in connection with fulfilling our obligations under specific contracts. Further, we acknowledge that the cost of
parts should be recorded in the periods in which they are actually used, as opposed to amortizing the cost of the pool of reworkable service parts over the period they were expected to be used. However, our prior method of depreciating the cost of
reworkable service parts over their estimated useful life approximated the recognition of cost under the new “inventory method” because it systematically attributed the diminishing value of the reworkable service parts as they were
utilized in the satisfaction of our customer service maintenance obligations.

 While we acknowledge that different maintenance contracts
should not bear the same amount of cost for reworkable service parts without regard to the extent to which parts are actually consumed in connection with specific contracts, we do not report our customer services maintenance contracts on a
contract-by-contract basis. When aggregated for reporting within our consolidated financial statements, the costs recognized for depreciating our reworkable service parts under our prior method of accounting was not materially different than what
would have been reported under an “inventory method” whereby the costs would have been recognized as the parts were consumed.

 Effective April 1, 2006, we changed our method of accounting to the preferable “inventory method” as described in our June 12, 2006 response. Our new method of accounting for reworkable service parts recognizes expense
during periods in which the parts are used, reflects the parts at their lower of cost or fair value in a manner consistent with ARB 43, and more closely aligns the accounting with the management and use of the parts.

 Our previous method of accounting was consistently applied for over 30 years. We believe a method similar to our prior method was used by five other
companies in our industry or that engage in hardware maintenance businesses. Our primary U.S. competitor in the Automated Teller Machine (ATM) business lists “Rotable spares” as a component of the total for Property, Plant and Equipment.
They also disclosed that Property, Plant and Equipment are recorded at cost less accumulated depreciation. Another company in our industry disclosed the following in their Form 10-K: “Service parts for maintenance are valued at the lower of
amortized cost or market. Amortization of the aggregate service parts is computed on a straight-line basis over the estimated useful life of three to seven years.” The other three companies also provided similar disclosures in their recent
filings.

 NCR Corporation

 Page 6

 Our prior method of accounting approximated the results of operations that would have resulted if we had followed Q&A #12 of TIS
Section 2140 of the AICPA Technical Questions and was consistent with the accounting methods of others in the industry. The difference between the two methods is not material. In addition, we considered that industry practice and AICPA Qs
and As are both Category (d) GAAP and our prior method of accounting was disclosed within our prior period Forms 10-K. We did not adopt the guidance of Q&A #12 earlier because it was only recently that we started assessing accounting
alternatives as we transitioned to a more active approach to parts management within our Customer Services business. This more active approach includes improved analysis of parts usage, increased efficiency in moving parts between locations,
and better forecasting of purchasing requirements.

 As disclosed in Note 1 of our Form 10-Q for the Quarterly Period Ended June 30,
2006, we recorded the change in accounting in accordance with Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, and retrospectively applied the new inventory method to all prior periods.

 The following table shows the impact of retrospectively applying this change to our Balance Sheets. The impact of this change was to
increase inventories as a result of reclassifying reworkable service parts from a long term asset to inventory. There was no change in Total Assets.

In millions

December 31,
2005

December 31,
2004

 Inventories, net (as reported)

$
361

$
355

 Plus reworkable service parts, net

234

223

 Inventories, net (based on new accounting method)

$
595

$
578

 The following table shows the impact of retrospectively applying this change to our Cash Flows.

In millions

For the year
ended
December 31,
2005

For the year
ended
December 31,
2004

For the year
ended
December 31,
2003

Net cash provided by operating activities (as reported)

$
608

$
436

$
441

 Less expenditures for reworkable service parts

(94
)

(89
)

(96
)

Net cash provided by operating activities (based on new accounting method)

$
514

$
347

$
345

Net cash used in investing activities (as reported)

$
(255
)

$
(172
)

$
(235
)

 Plus expenditures for reworkable service parts

94

89

96

Net cash used in investing activities (based on new accounting method)

$
(161
)

$
(83
)

$
(139
)

 NCR Corporation

 Page 7

 As further outlined below, the impact of the accounting change on previously reported income from operations, net income and earnings per
share of the current and each prior period was not material. Therefore, in accordance with Staff Accounting Bulletin Topic 5:F, the cumulative effect of the change in accounting method of approximately $0.2 million was recorded in the Condensed
Consolidated Statement of Operations for the Fiscal Quarter Ended June 30, 2006.

 We assessed the materiality of the change in
accounting to the prior periods by considering both the quantitative and qualitative aspects. We determined that the quantitative impact to prior periods was not mat