ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-3236470
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Description
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Page
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Item 1.
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Financial Statements
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Item 2.
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Item 3.
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Item 4.
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PART II—OTHER INFORMATION
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Description
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Page
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements.
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
In millions, except per share amounts
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Product revenue
|
$
|
208
|
|
|
$
|
240
|
|
|
$
|
630
|
|
|
$
|
737
|
|
Service revenue
|
344
|
|
|
366
|
|
|
1,066
|
|
|
1,074
|
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||||
Total revenue
|
552
|
|
|
606
|
|
|
1,696
|
|
|
1,811
|
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||||
Costs and operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of products
|
72
|
|
|
98
|
|
|
239
|
|
|
300
|
|
||||
Cost of services
|
186
|
|
|
201
|
|
|
584
|
|
|
600
|
|
||||
Selling, general and administrative expenses
|
159
|
|
|
179
|
|
|
505
|
|
|
553
|
|
||||
Research and development expenses
|
46
|
|
|
51
|
|
|
154
|
|
|
173
|
|
||||
Impairment of goodwill, acquired intangibles and other assets
|
—
|
|
|
—
|
|
|
80
|
|
|
340
|
|
||||
Total costs and operating expenses
|
463
|
|
|
529
|
|
|
1,562
|
|
|
1,966
|
|
||||
Income (loss) from operations
|
89
|
|
|
77
|
|
|
134
|
|
|
(155
|
)
|
||||
Other income (expense), net
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(3
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(6
|
)
|
||||
Interest income
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Other income, net
|
2
|
|
|
35
|
|
|
1
|
|
|
49
|
|
||||
Total other income (expense), net
|
1
|
|
|
33
|
|
|
(4
|
)
|
|
46
|
|
||||
Income (loss) before income taxes
|
90
|
|
|
110
|
|
|
130
|
|
|
(109
|
)
|
||||
Income tax expense
|
41
|
|
|
32
|
|
|
63
|
|
|
56
|
|
||||
Net income (loss)
|
$
|
49
|
|
|
$
|
78
|
|
|
$
|
67
|
|
|
$
|
(165
|
)
|
Net income (loss) per weighted average common share
|
|
|
|
|
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|
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Basic
|
$
|
0.38
|
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
(1.16
|
)
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Diluted
|
$
|
0.37
|
|
|
$
|
0.55
|
|
|
$
|
0.51
|
|
|
$
|
(1.16
|
)
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
129.7
|
|
|
139.2
|
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129.6
|
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142.1
|
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||||
Diluted
|
131.6
|
|
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141.4
|
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131.3
|
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142.1
|
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
49
|
|
|
$
|
78
|
|
|
$
|
67
|
|
|
$
|
(165
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
1
|
|
|
(15
|
)
|
|
7
|
|
|
(37
|
)
|
||||
Securities:
|
|
|
|
|
|
|
|
||||||||
Reclassification of gain to net income
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
||||
Unrealized loss on securities, before tax
|
—
|
|
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(2
|
)
|
|
—
|
|
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(7
|
)
|
||||
Unrealized loss on securities, tax portion
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net change in securities
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||||
Defined benefit plan adjustment, before tax
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Defined benefit plan adjustment, tax portion
|
—
|
|
|
—
|
|
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(1
|
)
|
|
—
|
|
||||
Defined benefit plan adjustment, net of tax
|
2
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Other comprehensive income (loss)
|
3
|
|
|
(37
|
)
|
|
10
|
|
|
(60
|
)
|
||||
Comprehensive income (loss)
|
$
|
52
|
|
|
$
|
41
|
|
|
$
|
77
|
|
|
$
|
(225
|
)
|
In millions, except per share amounts
|
September 30,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
988
|
|
|
$
|
839
|
|
Accounts receivable, net
|
426
|
|
|
580
|
|
||
Inventories
|
44
|
|
|
49
|
|
||
Assets held for sale
|
—
|
|
|
214
|
|
||
Other current assets
|
59
|
|
|
52
|
|
||
Total current assets
|
1,517
|
|
|
1,734
|
|
||
Property and equipment, net
|
131
|
|
|
143
|
|
||
Capitalized software, net
|
193
|
|
|
190
|
|
||
Goodwill
|
396
|
|
|
380
|
|
||
Acquired intangible assets, net
|
13
|
|
|
22
|
|
||
Deferred income taxes
|
46
|
|
|
41
|
|
||
Other assets
|
18
|
|
|
17
|
|
||
Total assets
|
$
|
2,314
|
|
|
$
|
2,527
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
30
|
|
|
$
|
30
|
|
Short-term borrowings
|
—
|
|
|
180
|
|
||
Accounts payable
|
93
|
|
|
96
|
|
||
Payroll and benefits liabilities
|
125
|
|
|
120
|
|
||
Deferred revenue
|
361
|
|
|
367
|
|
||
Liabilities held for sale
|
—
|
|
|
58
|
|
||
Other current liabilities
|
79
|
|
|
102
|
|
||
Total current liabilities
|
688
|
|
|
953
|
|
||
Long-term debt
|
545
|
|
|
567
|
|
||
Pension and other postemployment plan liabilities
|
88
|
|
|
89
|
|
||
Long-term deferred revenue
|
14
|
|
|
15
|
|
||
Deferred tax liabilities
|
20
|
|
|
28
|
|
||
Other liabilities
|
27
|
|
|
26
|
|
||
Total liabilities
|
1,382
|
|
|
1,678
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 129.8 and 130.7 shares issued at September 30, 2016 and December 31, 2015, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
1,203
|
|
|
1,128
|
|
||
Accumulated deficit
|
(206
|
)
|
|
(204
|
)
|
||
Accumulated other comprehensive loss
|
(66
|
)
|
|
(76
|
)
|
||
Total stockholders’ equity
|
932
|
|
|
849
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,314
|
|
|
$
|
2,527
|
|
|
Nine Months Ended
September 30, |
||||||
In millions
|
2016
|
|
2015
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
67
|
|
|
$
|
(165
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
97
|
|
|
129
|
|
||
Stock-based compensation expense
|
49
|
|
|
43
|
|
||
Excess tax benefit from stock-based compensation
|
(3
|
)
|
|
—
|
|
||
Deferred income taxes
|
(9
|
)
|
|
(10
|
)
|
||
Gain on investments
|
—
|
|
|
(50
|
)
|
||
Impairment of goodwill, acquired intangibles and other assets
|
80
|
|
|
340
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
162
|
|
|
134
|
|
||
Inventories
|
4
|
|
|
(14
|
)
|
||
Current payables and accrued expenses
|
(14
|
)
|
|
(25
|
)
|
||
Deferred revenue
|
(7
|
)
|
|
13
|
|
||
Other assets and liabilities
|
(31
|
)
|
|
(25
|
)
|
||
Net cash provided by operating activities
|
395
|
|
|
370
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property and equipment
|
(32
|
)
|
|
(43
|
)
|
||
Proceeds from sales of property and equipment
|
5
|
|
|
—
|
|
||
Additions to capitalized software
|
(54
|
)
|
|
(51
|
)
|
||
Proceeds from the disposition of investments
|
—
|
|
|
69
|
|
||
Proceeds from sale of business
|
92
|
|
|
—
|
|
||
Business acquisitions and other investing activities, net
|
(16
|
)
|
|
(9
|
)
|
||
Net cash used in investing activities
|
(5
|
)
|
|
(34
|
)
|
||
Financing activities
|
|
|
|
||||
Repurchases of common stock
|
(69
|
)
|
|
(541
|
)
|
||
Proceeds from long-term borrowings
|
—
|
|
|
600
|
|
||
Repayments of long-term borrowings
|
(22
|
)
|
|
(247
|
)
|
||
Proceeds from credit facility borrowings
|
—
|
|
|
110
|
|
||
Repayments of credit facility borrowings
|
(180
|
)
|
|
(220
|
)
|
||
Excess tax benefit from stock-based compensation
|
3
|
|
|
—
|
|
||
Other financing activities, net
|
24
|
|
|
18
|
|
||
Net cash used in financing activities
|
(244
|
)
|
|
(280
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3
|
|
|
(16
|
)
|
||
Increase in cash and cash equivalents
|
149
|
|
|
40
|
|
||
Cash and cash equivalents at beginning of period
|
839
|
|
|
834
|
|
||
Cash and cash equivalents at end of period
|
$
|
988
|
|
|
$
|
874
|
|
|
As of
|
||||||
In millions
|
September 30,
2016 |
|
December 31,
2015 |
||||
Inventories
|
|
|
|
||||
Finished goods
|
$
|
29
|
|
|
$
|
32
|
|
Service parts
|
15
|
|
|
17
|
|
||
Total inventories
|
$
|
44
|
|
|
$
|
49
|
|
|
|
|
|
||||
Deferred revenue
|
|
|
|
||||
Deferred revenue, current
|
$
|
361
|
|
|
$
|
367
|
|
Long-term deferred revenue
|
14
|
|
|
15
|
|
||
Total deferred revenue
|
$
|
375
|
|
|
$
|
382
|
|
In millions
|
Balance,
December 31, 2015 |
|
Adjustments
|
|
Currency
Translation
Adjustments
|
|
Balance,
September 30, 2016 |
||||||||
Goodwill
|
|
|
|
|
|
|
|
||||||||
Americas Data and Analytics
|
$
|
251
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
251
|
|
International Data and Analytics
|
129
|
|
|
12
|
|
|
4
|
|
|
145
|
|
||||
Total goodwill
|
$
|
380
|
|
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
396
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||||||||||
In millions
|
Amortization
Life (in Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and Currency
Translation
Adjustments
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and Currency
Translation
Adjustments
|
|||||||||
Acquired intangible assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Intellectual property/developed technology
|
1 to 7
|
|
|
$
|
71
|
|
|
$
|
(59
|
)
|
|
$
|
83
|
|
|
$
|
(63
|
)
|
Customer relationships
|
3 to 10
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
||||
Trademarks/trade names
|
5
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(1
|
)
|
||||
In-process research and development
|
5
|
|
|
5
|
|
|
(4
|
)
|
|
5
|
|
|
(3
|
)
|
||||
Total acquired intangible assets
|
|
|
|
$
|
77
|
|
|
$
|
(64
|
)
|
|
$
|
92
|
|
|
$
|
(70
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
In millions
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amortization expense
|
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
32
|
|
|
|
Actual
|
|
For the years ended (estimated)
|
||||||||||||||||
In millions
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||
Amortization expense
|
|
$
|
40
|
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
In millions
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Effective tax rate
|
|
45.6
|
%
|
|
29.1
|
%
|
|
48.5
|
%
|
|
(51.4
|
)%
|
|
As of
|
||||||
In millions
|
September 30,
2016 |
|
December 31,
2015 |
||||
Contract notional amount of foreign exchange forward contracts
|
$
|
147
|
|
|
$
|
138
|
|
Net contract notional amount of foreign exchange forward contracts
|
$
|
77
|
|
|
$
|
25
|
|
In millions
|
2016
|
|
2015
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance at January 1
|
$
|
6
|
|
|
$
|
7
|
|
Provisions for warranties issued
|
6
|
|
|
6
|
|
||
Settlements (in cash or in kind)
|
(7
|
)
|
|
(8
|
)
|
||
Balance at September 30
|
$
|
5
|
|
|
$
|
5
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
In millions
|
Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds, September 30, 2016
|
$
|
428
|
|
|
$
|
428
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds, December 31, 2015
|
$
|
351
|
|
|
$
|
351
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In millions
|
Amounts Due
|
||
2016
|
$
|
8
|
|
2017
|
30
|
|
|
2018
|
60
|
|
|
2019
|
68
|
|
|
2020
|
412
|
|
|
Total
|
$
|
578
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
In millions, except per share amounts
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
49
|
|
|
$
|
78
|
|
|
$
|
67
|
|
|
$
|
(165
|
)
|
Weighted average outstanding shares of common stock
|
129.7
|
|
|
139.2
|
|
|
129.6
|
|
|
142.1
|
|
||||
Dilutive effect of employee stock options, restricted stock and other stock awards
|
1.9
|
|
|
2.2
|
|
|
1.7
|
|
|
—
|
|
||||
Common stock and common stock equivalents
|
131.6
|
|
|
141.4
|
|
|
131.3
|
|
|
142.1
|
|
||||
Income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.38
|
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
(1.16
|
)
|
Diluted
|
$
|
0.37
|
|
|
$
|
0.55
|
|
|
$
|
0.51
|
|
|
$
|
(1.16
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||||
Americas Data and Analytics
|
$
|
317
|
|
|
$
|
347
|
|
|
$
|
937
|
|
|
$
|
1,031
|
|
International Data and Analytics
|
235
|
|
|
221
|
|
|
690
|
|
|
666
|
|
||||
Total Data and Analytics
|
552
|
|
|
568
|
|
|
1,627
|
|
|
1,697
|
|
||||
Marketing Applications
|
—
|
|
|
38
|
|
|
69
|
|
|
114
|
|
||||
Total revenue
|
552
|
|
|
606
|
|
|
1,696
|
|
|
1,811
|
|
||||
Segment gross margin
|
|
|
|
|
|
|
|
||||||||
Americas Data and Analytics
|
185
|
|
|
197
|
|
|
532
|
|
|
580
|
|
||||
International Data and Analytics
|
113
|
|
|
104
|
|
|
326
|
|
|
315
|
|
||||
Total Data and Analytics
|
298
|
|
|
301
|
|
|
858
|
|
|
895
|
|
||||
Marketing Applications
|
—
|
|
|
15
|
|
|
33
|
|
|
46
|
|
||||
Total segment gross margin
|
298
|
|
|
316
|
|
|
891
|
|
|
941
|
|
||||
Stock-based compensation costs
|
(3
|
)
|
|
(3
|
)
|
|
(11
|
)
|
|
(10
|
)
|
||||
Amortization of acquisition-related intangible assets costs
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
|
(15
|
)
|
||||
Acquisition, integration and reorganization-related costs
|
(1
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||
Selling, general and administrative expenses
|
159
|
|
|
179
|
|
|
505
|
|
|
553
|
|
||||
Research and development expenses
|
46
|
|
|
51
|
|
|
154
|
|
|
173
|
|
||||
Impairment of goodwill, acquired intangibles and other assets
|
—
|
|
|
—
|
|
|
80
|
|
|
340
|
|
||||
Income (loss) from operations
|
$
|
89
|
|
|
$
|
77
|
|
|
$
|
134
|
|
|
$
|
(155
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
In millions
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Products (software and hardware)
(1)
|
$
|
208
|
|
|
$
|
240
|
|
|
$
|
630
|
|
|
$
|
737
|
|
Consulting services
|
169
|
|
|
194
|
|
|
540
|
|
|
560
|
|
||||
Maintenance services
|
175
|
|
|
172
|
|
|
526
|
|
|
514
|
|
||||
Total services
|
344
|
|
|
366
|
|
|
1,066
|
|
|
1,074
|
|
||||
Total revenue
|
$
|
552
|
|
|
$
|
606
|
|
|
$
|
1,696
|
|
|
$
|
1,811
|
|
•
|
$12 million
for employee severance and other employee-related costs,
|
•
|
$80 million
charge for asset write-downs, and
|
•
|
$27 million
for professional services, legal and other associated costs.
|
•
|
Total revenue was
$552 million
for the
third
quarter of
2016
, down 9% from the
third
quarter of
2015
, with an underlying
13%
decrease in product revenue and a
6%
decrease in services revenue.
|
•
|
Gross margin increased to
53.3%
in the
third
quarter of
2016
from
50.7%
in the
third
quarter of
2015
, driven by increase in both product and services gross margin.
|
•
|
Operating income was
$89 million
in the
third
quarter of
2016
, compared to
$77 million
in the
third
quarter of
2015
, driven by reduction in selling, general and administrative expenses.
|
•
|
Net income in the
third
quarter of
2016
was
$49 million
, compared to net income of $78 million in the
third
quarter of
2015
.
|
•
|
The Company completed the sale of its marketing applications business.
|
•
|
Business Analytics Solutions:
deliver high-value business outcomes realized by engaging with business users through solution-based selling that leverages analytic consulting and repeatable analytical intellectual property (IP)
|
•
|
Ecosystem Architecture Consulting:
best-in-class architecture consulting expertise to help customers build optimized analytical ecosystems independent of technology, leveraging both open source and commercial solutions
|
•
|
Hybrid Cloud:
leading technology and services to deliver an analytic ecosystem deployed in a hybrid cloud architecture, including offerings such as managed cloud, private cloud, public cloud, and on-premises software and hardware.
|
•
|
Cloud
- We plan to continue to expand our data warehouse offerings in the public cloud and in Teradata’s managed cloud environments. With our "Teradata Everywhere
TM
" initiative, we offer our customers greater flexibility and agility through the same Teradata Database that we offer on premises, now in a managed cloud, public cloud, or private cloud environment. For our customers, Teradata Everywhere
is designed to speed time to value, save costs, and encourage analytics use throughout the organization. We are building new services for cloud migration as well as for design, implementation and management of cloud and hybrid cloud environments.
|
•
|
On premises data warehouse
- We have introduced methods to make it easier to buy, expand, and seamlessly upgrade data warehouses. We expect that our IntelliFlex
TM
platform architecture, released in early 2016, will provide more flexible configurations and seamless expansions of our customers’ IDW environments, and that our software-only version of Teradata will allow us to expand with both new and existing customers.
|
•
|
Analytical ecosystem
- We are adding to our data load and integration software and service offerings capabilities that manage customers' analytical ecosystems with new products such as Teradata Unity
TM
, QueryGrid
TM
, and Listener
TM
. These offerings help connect and manage the customers' ecosystems to help manage and extract value from their data.
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Product revenue
|
$
|
208
|
|
|
37.7
|
%
|
|
$
|
240
|
|
|
39.6
|
%
|
Service revenue
|
344
|
|
|
62.3
|
%
|
|
366
|
|
|
60.4
|
%
|
||
Total revenue
|
$
|
552
|
|
|
100
|
%
|
|
$
|
606
|
|
|
100
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Product gross margin
|
$
|
136
|
|
|
65.4
|
%
|
|
$
|
142
|
|
|
59.2
|
%
|
Service gross margin
|
158
|
|
|
45.9
|
%
|
|
165
|
|
|
45.1
|
%
|
||
Total gross margin
|
$
|
294
|
|
|
53.3
|
%
|
|
$
|
307
|
|
|
50.7
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
159
|
|
|
28.8
|
%
|
|
$
|
179
|
|
|
29.5
|
%
|
Research and development expenses
|
46
|
|
|
8.3
|
%
|
|
51
|
|
|
8.4
|
%
|
||
Total operating expenses
|
$
|
205
|
|
|
37.1
|
%
|
|
$
|
230
|
|
|
37.9
|
%
|
In millions
|
2016
|
|
2015
|
||||
Gain on securities
|
$
|
—
|
|
|
$
|
35
|
|
Interest expense
|
(3
|
)
|
|
(3
|
)
|
||
Interest income
|
2
|
|
|
1
|
|
||
Other
|
2
|
|
|
—
|
|
||
Other income (expense), net
|
$
|
1
|
|
|
$
|
33
|
|
|
2016
|
|
2015
|
||
Effective tax rate
|
45.6
|
%
|
|
29.1
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas Data and Analytics
|
$
|
317
|
|
|
57.4
|
%
|
|
$
|
347
|
|
|
57.3
|
%
|
International Data and Analytics
|
235
|
|
|
42.6
|
%
|
|
221
|
|
|
36.4
|
%
|
||
Total Data and Analytics
|
552
|
|
|
100.0
|
%
|
|
568
|
|
|
93.7
|
%
|
||
Marketing Applications
|
—
|
|
|
—
|
%
|
|
38
|
|
|
6.3
|
%
|
||
Total segment revenue
|
$
|
552
|
|
|
100
|
%
|
|
$
|
606
|
|
|
100
|
%
|
Segment gross margin
|
|
|
|
|
|
|
|
||||||
Americas Data and Analytics
|
$
|
185
|
|
|
58.4
|
%
|
|
$
|
197
|
|
|
56.8
|
%
|
International Data and Analytics
|
113
|
|
|
48.1
|
%
|
|
104
|
|
|
47.1
|
%
|
||
Total Data and Analytics
|
298
|
|
|
54.0
|
%
|
|
301
|
|
|
53.0
|
%
|
||
Marketing Applications
|
—
|
|
|
—
|
%
|
|
15
|
|
|
39.5
|
%
|
||
Total segment gross margin
|
$
|
298
|
|
|
54.0
|
%
|
|
$
|
316
|
|
|
52.1
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Product revenue
|
$
|
630
|
|
|
37.1
|
%
|
|
$
|
737
|
|
|
40.7
|
%
|
Services revenue
|
1,066
|
|
|
62.9
|
%
|
|
1,074
|
|
|
59.3
|
%
|
||
Total revenue
|
$
|
1,696
|
|
|
100
|
%
|
|
$
|
1,811
|
|
|
100
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Product gross margin
|
$
|
391
|
|
|
62.1
|
%
|
|
$
|
437
|
|
|
59.3
|
%
|
Service gross margin
|
482
|
|
|
45.2
|
%
|
|
474
|
|
|
44.1
|
%
|
||
Total gross margin
|
$
|
873
|
|
|
51.5
|
%
|
|
$
|
911
|
|
|
50.3
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
505
|
|
|
29.8
|
%
|
|
$
|
553
|
|
|
30.5
|
%
|
Research and development expenses
|
154
|
|
|
9.1
|
%
|
|
173
|
|
|
9.6
|
%
|
||
Impairment of goodwill, acquired intangibles and other assets
|
80
|
|
|
4.7
|
%
|
|
340
|
|
|
18.8
|
%
|
||
Total operating expenses
|
$
|
739
|
|
|
43.6
|
%
|
|
$
|
1,066
|
|
|
58.9
|
%
|
In millions
|
2016
|
|
2015
|
||||
Gain on securities
|
$
|
—
|
|
|
$
|
50
|
|
Interest expense
|
(9
|
)
|
|
(6
|
)
|
||
Interest income
|
4
|
|
|
3
|
|
||
Other
|
1
|
|
|
(1
|
)
|
||
Other (expense) income, net
|
$
|
(4
|
)
|
|
$
|
46
|
|
|
2016
|
|
2015
|
||
Effective tax rate
|
48.5
|
%
|
|
(51.4
|
)%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas Data and Analytics
|
$
|
937
|
|
|
55.2
|
%
|
|
$
|
1,031
|
|
|
57.0
|
%
|
International Data and Analytics
|
690
|
|
|
40.7
|
%
|
|
666
|
|
|
36.8
|
%
|
||
Total Data and Analytics
|
1,627
|
|
|
95.9
|
%
|
|
1,697
|
|
|
93.7
|
%
|
||
Marketing Applications
|
69
|
|
|
4.1
|
%
|
|
114
|
|
|
6.3
|
%
|
||
Total segment revenue
|
$
|
1,696
|
|
|
100
|
%
|
|
$
|
1,811
|
|
|
100
|
%
|
Segment gross margin
|
|
|
|
|
|
|
|
||||||
Americas Data and Analytics
|
$
|
532
|
|
|
56.8
|
%
|
|
$
|
580
|
|
|
56.3
|
%
|
International Data and Analytics
|
326
|
|
|
47.2
|
%
|
|
315
|
|
|
47.3
|
%
|
||
Total Data and Analytics
|
858
|
|
|
52.7
|
%
|
|
895
|
|
|
52.7
|
%
|
||
Marketing Applications
|
33
|
|
|
47.8
|
%
|
|
46
|
|
|
40.4
|
%
|
||
Total segment gross margin
|
$
|
891
|
|
|
52.5
|
%
|
|
$
|
941
|
|
|
52.0
|
%
|
|
Nine Months Ended September 30,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
$
|
395
|
|
|
$
|
370
|
|
Less:
|
|
|
|
||||
Expenditures for property and equipment
|
(32
|
)
|
|
(43
|
)
|
||
Additions to capitalized software
|
(54
|
)
|
|
(51
|
)
|
||
Free cash flow
|
$
|
309
|
|
|
$
|
276
|
|
|
|
Total
Number
of Shares Purchased
|
|
Average
Price
Paid
per Share
|
|
Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
Dilution
Offset Program
|
|
Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
General Share
Repurchase Program
|
|
Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
Dilution
Offset Program
|
|
Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
General Share
Repurchase Program
|
|||||||||
Month
|
|
|
|
|
|
|
|||||||||||||||
First Quarter Total
|
|
2,003,600
|
|
|
$
|
23.38
|
|
|
103,600
|
|
|
1,900,000
|
|
|
$
|
9,929,458
|
|
|
$
|
528,496,830
|
|
Second Quarter Total
|
|
600,000
|
|
|
$
|
24.80
|
|
|
600,000
|
|
|
—
|
|
|
$
|
4,171,541
|
|
|
$
|
528,496,830
|
|
July 2016
|
|
307,978
|
|
|
$
|
24.89
|
|
|
150,000
|
|
|
157,978
|
|
|
$
|
1,442,851
|
|
|
$
|
524,554,570
|
|
August 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
7,642,701
|
|
|
$
|
524,554,570
|
|
September 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
9,490,535
|
|
|
$
|
524,554,570
|
|
Third Quarter Total
|
|
307,978
|
|
|
$
|
24.89
|
|
|
150,000
|
|
|
157,978
|
|
|
$
|
9,490,535
|
|
|
$
|
524,554,570
|
|
|
|
|
|
Reference Number
per Item 601 of
Regulation S-K
|
|
Description
|
|
|
|
||
2.1
|
|
|
Form of Separation and Distribution Agreement between Teradata Corporation and NCR Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated September 11, 2007 (SEC file number 001-33458)).
|
|
|
||
3.1
|
|
|
Amended and Restated Certificate of Incorporation of Teradata Corporation as amended and restated on September 24, 2007 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated September 25, 2007 (SEC file number 001-33458)).
|
|
|
||
3.2
|
|
|
Amended and Restated By-Laws of Teradata Corporation, as amended and restated on July 26, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated [August 1], 2016).
|
|
|
||
3.3*
|
|
|
Separation Agreement dated as of August 1, 2016 between Robert Fair and the Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated August 1, 2016).
|
|
|
|
|
3.4*
|
|
|
Separation Agreement dated as of August 1, 2016 between Rick Morton and the Company (incorporated by reference to Exhibit 3.8 to the Quarterly Report on Form 10-Q dated August 9, 2016).
|
|
|
|
|
3.5*
|
|
|
Offer letter from Teradata Corporation to Suzanne Zoumaras dated September 14, 2016.
|
|
|
|
|
4.1
|
|
|
Common Stock Certificate of Teradata Corporation (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q dated November 13, 2007 (SEC file number 001-33458)).
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Rule 13a-14(a), dated November 3, 2016.
|
|
|
||
31.2
|
|
|
Certification pursuant to Rule 13a-14(a), dated November 3, 2016.
|
|
|
||
32
|
|
|
Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 3, 2016.
|
|
|
||
101
|
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Statements of Income (Loss) for the three and nine month period ended September 30, 2016 and 2015, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine month period ended September 30, 2016 and 2015, (iii) the Condensed Consolidated Balance Sheets at September 30, 2016 and December 31, 2015, (iv) the Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2016 and 2015 and (v) the notes to the Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
TERADATA CORPORATION
|
||
|
|
|
|
|
Date: November 3, 2016
|
|
By:
|
|
/s/ Stephen M. Scheppmann
|
|
|
|
|
Stephen M. Scheppmann
Executive Vice President and Chief Financial Officer
|
Suzanne Zourmaras
|
|
Email: szouma@yahoo.com
|
2.
|
Pre-Employment Verification:
|
3.
|
U.S. Employment Eligibility:
|
4.
|
Teradata Employment Terms and Conditions:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Teradata Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
Date: November 3, 2016
|
|
/s/ Victor L. Lund
|
|
|
Victor L. Lund
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Teradata Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
Date: November 3, 2016
|
|
/s/ Stephen M. Scheppmann
|
|
|
Stephen M. Scheppmann
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
Date: November 3, 2016
|
|
/s/ Victor L. Lund
|
|
|
Victor L. Lund
|
|
|
Chief Executive Officer
|
|
|
|
Date: November 3, 2016
|
|
/s/ Stephen M. Scheppmann
|
|
|
Stephen M. Scheppmann
Executive Vice President and Chief Financial Officer
|