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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Emerging growth 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
June 30, |
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Six Months Ended
June 30, |
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In millions, except per share amounts
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2018
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2017
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2018
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2017
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||||||||
Revenue
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|
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||||||||
Recurring
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$
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312
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$
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281
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$
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614
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$
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554
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Perpetual software licenses and hardware
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97
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91
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166
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181
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Consulting services
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135
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141
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270
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269
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Total revenue
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544
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|
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513
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1,050
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1,004
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Cost of revenue
|
|
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Cost of recurring
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88
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72
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178
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139
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Cost of perpetual software licenses and hardware
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73
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57
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121
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118
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Cost of consulting services
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133
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142
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278
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280
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Total cost of revenue
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294
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271
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577
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537
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Gross profit
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250
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242
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473
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467
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Operating expenses
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|
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Selling, general and administrative expenses
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163
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165
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315
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|
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320
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Research and development expenses
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77
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78
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152
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148
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Total operating expenses
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240
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243
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467
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468
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Income (loss) from operations
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10
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(1
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)
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6
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(1
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)
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Other expense, net
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Interest expense
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(5
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)
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(4
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)
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(10
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)
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(7
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)
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Interest income
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4
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3
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7
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5
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Other expense
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(3
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)
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(1
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)
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(5
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)
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(2
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)
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Total other expense, net
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(4
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)
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(2
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)
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(8
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)
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(4
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)
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Income (loss) before income taxes
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6
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(3
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)
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(2
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)
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(5
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)
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Income tax expense
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2
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1
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|
|
1
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1
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Net income (loss)
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$
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4
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$
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(4
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)
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$
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(3
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)
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$
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(6
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)
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Net income (loss) per weighted average common share
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Basic
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$
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0.03
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$
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(0.03
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)
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$
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(0.02
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)
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$
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(0.05
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)
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Diluted
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$
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0.03
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$
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(0.03
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)
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$
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(0.02
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)
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$
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(0.05
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)
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Weighted average common shares outstanding
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Basic
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119.5
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127.9
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120.4
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129.2
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Diluted
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121.5
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127.9
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120.4
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129.2
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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In millions
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2018
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2017
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2018
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2017
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Net income (loss)
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$
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4
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$
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(4
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)
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$
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(3
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)
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$
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(6
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)
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Other comprehensive income:
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Foreign currency translation adjustments
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(21
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)
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5
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(17
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)
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10
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Derivatives
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Unrealized loss on derivatives, before tax
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(3
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)
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—
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(3
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)
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—
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Unrealized loss on derivatives, tax portion
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—
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—
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—
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—
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Unrealized loss on derivatives, net of tax
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(3
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)
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—
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(3
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—
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Defined benefit plans:
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Defined benefit plan adjustment, before tax
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4
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1
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4
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2
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Defined benefit plan adjustment, tax portion
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(1
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)
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—
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(1
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)
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—
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Defined benefit plan adjustment, net of tax
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3
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1
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3
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|
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2
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Other comprehensive (loss) income
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(21
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)
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6
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(17
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)
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12
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Comprehensive (loss) income
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$
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(17
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)
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$
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2
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$
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(20
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)
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$
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6
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In millions, except per share amounts
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June 30,
2018 |
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December 31,
2017 |
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Assets
|
|
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Current assets
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Cash and cash equivalents
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$
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882
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$
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1,089
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Accounts receivable, net
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369
|
|
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554
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Inventories
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28
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30
|
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Other current assets
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104
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77
|
|
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Total current assets
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1,383
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1,750
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Property and equipment, net
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187
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162
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Capitalized software, net
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95
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|
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121
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Goodwill
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397
|
|
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399
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Acquired intangible assets, net
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19
|
|
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23
|
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Deferred income taxes
|
54
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|
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57
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Other assets
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68
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44
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Total assets
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$
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2,203
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$
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2,556
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Liabilities and stockholders’ equity
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|
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Current liabilities
|
|
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Current portion of long-term debt
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$
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6
|
|
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$
|
60
|
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Short-term borrowings
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—
|
|
|
240
|
|
||
Accounts payable
|
83
|
|
|
74
|
|
||
Payroll and benefits liabilities
|
136
|
|
|
173
|
|
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Deferred revenue
|
461
|
|
|
414
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Other current liabilities
|
88
|
|
|
102
|
|
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Total current liabilities
|
774
|
|
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1,063
|
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Long-term debt
|
491
|
|
|
478
|
|
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Pension and other postemployment plan liabilities
|
109
|
|
|
109
|
|
||
Long-term deferred revenue
|
109
|
|
|
85
|
|
||
Deferred tax liabilities
|
8
|
|
|
4
|
|
||
Other liabilities
|
140
|
|
|
149
|
|
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Total liabilities
|
1,631
|
|
|
1,888
|
|
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Commitments and contingencies (Note 9)
|
|
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|
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Stockholders’ equity
|
|
|
|
||||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
—
|
|
|
—
|
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Common stock: par value $0.01 per share, 500.0 shares authorized, 119.0 and 121.9 shares issued at June 30, 2018 and December 31, 2017, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
1,376
|
|
|
1,320
|
|
||
Accumulated deficit
|
(714
|
)
|
|
(579
|
)
|
||
Accumulated other comprehensive loss
|
(91
|
)
|
|
(74
|
)
|
||
Total stockholders’ equity
|
572
|
|
|
668
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,203
|
|
|
$
|
2,556
|
|
|
Six Months Ended
June 30, |
||||||
In millions
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
64
|
|
|
70
|
|
||
Stock-based compensation expense
|
35
|
|
|
35
|
|
||
Deferred income taxes
|
(6
|
)
|
|
(20
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
185
|
|
|
192
|
|
||
Inventories
|
2
|
|
|
(8
|
)
|
||
Current payables and accrued expenses
|
(31
|
)
|
|
(13
|
)
|
||
Deferred revenue
|
90
|
|
|
58
|
|
||
Other assets and liabilities
|
(46
|
)
|
|
1
|
|
||
Net cash provided by operating activities
|
290
|
|
|
309
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property and equipment
|
(58
|
)
|
|
(30
|
)
|
||
Additions to capitalized software
|
(4
|
)
|
|
(4
|
)
|
||
Business acquisitions and other investing activities, net
|
—
|
|
|
(18
|
)
|
||
Net cash used in investing activities
|
(62
|
)
|
|
(52
|
)
|
||
Financing activities
|
|
|
|
||||
Repurchases of common stock
|
(157
|
)
|
|
(151
|
)
|
||
Repayments of long-term borrowings
|
(40
|
)
|
|
(15
|
)
|
||
Repayments of credit facility borrowings
|
(240
|
)
|
|
—
|
|
||
Other financing activities, net
|
18
|
|
|
12
|
|
||
Net cash used in financing activities
|
(419
|
)
|
|
(154
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(15
|
)
|
|
8
|
|
||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(206
|
)
|
|
111
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
1,089
|
|
|
974
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
883
|
|
|
$
|
1,085
|
|
|
June 30, 2018
|
|
Dec 31, 2017
|
||||
Cash and cash equivalents
|
$
|
882
|
|
|
$
|
1,089
|
|
Restricted cash
|
1
|
|
|
—
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
883
|
|
|
$
|
1,089
|
|
1.
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identify the contract with a customer,
|
2.
|
identify the performance obligations in the contract,
|
3.
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determine the transaction price,
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4.
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allocate the transaction price to the performance obligations in the contract, and
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5.
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recognize revenue when (or as) the Company satisfies a performance obligation.
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•
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Subscriptions
- The Company sells on and off-premises subscriptions to our customers through our subscription licenses, cloud, service model, and rental offerings. Teradata’s subscription licenses include a right-to-use license and revenue is recognized upfront at a point in time unless the customer has a contractual right to cancel, where revenue is recognized on a month-to-month basis. Cloud and service model arrangements include a right-to-access software license on Teradata owned or third party owned hardware such as the public cloud. Revenue is recognized ratably over the contract term. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. For our rental offering, the Company owns the hardware and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract and is generally accounted for as an operating lease and considered outside the scope of Topic 606.
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•
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Maintenance and software upgrade rights
- Revenue for maintenance and unspecified software upgrade rights on a when-an-if-available basis are recognized straight-line over the term of the contract.
|
•
|
Perpetual software licenses and hardware
- Revenue for software is generally recognized when the customer has the ability to use and benefit from its right to use the license. Hardware is typically recognized upon delivery once title and risk of loss have been transferred (when control has passed).
|
•
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Consulting services
- Revenue for consulting, implementation and installation services is recognized as services are provided. The Company accounts for individual services as separate performance obligations if a service is separately identifiable from other items in a combined arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer.
|
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Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(in millions)
|
2018
|
|
2017*
|
|
2018
|
|
2017*
|
||||||||
Americas
|
|
|
|
|
|
|
|
||||||||
Recurring
|
$
|
197
|
|
|
$
|
182
|
|
|
$
|
391
|
|
|
$
|
361
|
|
Perpetual software licenses and hardware
|
41
|
|
|
35
|
|
|
63
|
|
|
68
|
|
||||
Consulting services
|
49
|
|
|
54
|
|
|
97
|
|
|
109
|
|
||||
Total Americas
|
287
|
|
|
271
|
|
|
551
|
|
|
538
|
|
||||
International
|
|
|
|
|
|
|
|
||||||||
Recurring
|
113
|
|
|
99
|
|
|
222
|
|
|
193
|
|
||||
Perpetual software licenses and hardware
|
57
|
|
|
56
|
|
|
104
|
|
|
113
|
|
||||
Consulting services
|
87
|
|
|
87
|
|
|
173
|
|
|
160
|
|
||||
Total International
|
257
|
|
|
242
|
|
|
499
|
|
|
466
|
|
||||
Total Revenue
|
$
|
544
|
|
|
$
|
513
|
|
|
$
|
1,050
|
|
|
$
|
1,004
|
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30, 2018
|
|
January 1, 2018
(as adjusted)
|
||||
Accounts receivable, net
|
$
|
369
|
|
|
$
|
534
|
|
Contract assets
|
10
|
|
|
20
|
|
||
Current deferred revenue
|
461
|
|
|
395
|
|
||
Long-term deferred revenue
|
109
|
|
|
85
|
|
(in millions)
|
|
Total at June 30, 2018
|
|
Year 1
|
|
Year 2 and Thereafter
|
||||||
Remaining unsatisfied obligations
|
|
$
|
1,820
|
|
|
$
|
950
|
|
|
$
|
870
|
|
•
|
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.
|
•
|
Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment cost and are included in cost of revenues.
|
•
|
The Company does not adjust for the effects of a significant financing component if the period between performance and customer payment is one year or less.
|
•
|
The Company expenses the costs to obtain a contract as incurred when the expected amortization period is one year or less.
|
•
|
The Company reduced current deferred revenue and accumulated deficit by
$19 million
for contracts that were not complete as of the date of adoption and would have been recognized in a prior period under Topic 606. The revenue adjustment primarily relates to term licenses that are recognized upfront under Topic 606 but were recognized ratably under the previous guidance.
|
•
|
Prior to the adoption of Topic 606, the Company expensed sales commissions on long-term contracts. Under Topic 606, the Company capitalizes these incremental costs of obtaining customer contracts. The impact of this change resulted in an increase of other assets and a reduction in accumulated deficit of
$17 million
on January 1, 2018.
|
•
|
The tax impact of these items was
$10 million
, which was recorded as a deferred tax liability, resulting in a net
$26 million
reduction in accumulated deficit on January 1, 2018.
|
•
|
In addition, the Company reclassified
$20 million
of contract assets from accounts receivable to other current assets on January 1, 2018.
|
•
|
The impact to revenues was a net increase of
$19 million
and
$20 million
for the three and six months ended June 30, 2018 under Topic 606.
|
•
|
Topic 606 resulted in the amortization of capitalized contract costs that were recorded as part of the cumulative effect adjustment upon adoption. The amortization of these capitalized costs was offset by new capitalized costs in the period resulting in
$3 million
and
$8 million
less selling, general and administrative expenses for the three and six months ended June 30, 2018 under Topic 606.
|
•
|
As a result of the higher revenue and capitalization of contract costs under Topic 606, net income reported under Topic 606 was higher by
$4 million
or
$0.03
per share for the three months ended June 30, 2018 and higher by
$8 million
or
$0.07
for the six months ended June 30, 2018.
|
•
|
Total reported assets at June 30, 2018 were
$8 million
higher under Topic 606, which includes $
24 million
of capitalized contract costs that were expensed as incurred under the previous guidance, partially offset by
$16 million
of deferred costs related to the timing of revenue that would have been deferred under the previous guidance but recognized under Topic 606.
|
•
|
Total reported liabilities were
$36 million
less under Topic 606 primarily due to revenue that would have been deferred and recognized over time under the previous guidance, but is recognized upfront under Topic 606.
|
•
|
The adoption of Topic 606 had no impact on the Company’s total cash flows from operations.
|
(in millions)
|
|
January 1, 2018
|
|
Capitalized
|
|
Amortization
|
|
June 30, 2018
|
||||
Capitalized contract costs
|
|
17
|
|
|
10
|
|
|
(3
|
)
|
|
24
|
|
|
As of
|
||||||
In millions
|
June 30,
2018 |
|
December 31,
2017 |
||||
Inventories
|
|
|
|
||||
Finished goods
|
$
|
17
|
|
|
$
|
18
|
|
Service parts
|
11
|
|
|
12
|
|
||
Total inventories
|
$
|
28
|
|
|
$
|
30
|
|
|
|
|
|
||||
Deferred revenue
|
|
|
|
||||
Deferred revenue, current
|
$
|
461
|
|
|
$
|
414
|
|
Long-term deferred revenue
|
109
|
|
|
85
|
|
||
Total deferred revenue
|
$
|
570
|
|
|
$
|
499
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
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
|
3 to 5
|
|
$
|
35
|
|
|
$
|
(16
|
)
|
|
$
|
43
|
|
|
$
|
(20
|
)
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amortization expense
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
Actual
|
|
For the years ended (estimated)
|
|||||||||||||||||||||
In millions
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
||||||||||||
Amortization expense
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Effective tax rate
|
|
33.3
|
%
|
|
(33.3
|
)%
|
|
(50.0
|
)%
|
|
(20.0
|
)%
|
|
As of
|
||||||
In millions
|
June 30,
2018 |
|
December 31,
2017 |
||||
Contract notional amount of foreign exchange forward contracts
|
$
|
92
|
|
|
$
|
147
|
|
Net contract notional amount of foreign exchange forward contracts
|
$
|
34
|
|
|
$
|
23
|
|
Interest rate swap
|
$
|
500
|
|
|
$
|
—
|
|
In millions
|
2018
|
|
2017
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance at January 1
|
$
|
4
|
|
|
$
|
5
|
|
Provisions for warranties issued
|
2
|
|
|
3
|
|
||
Settlements (in cash or in kind)
|
(3
|
)
|
|
(4
|
)
|
||
Balance at June 30
|
$
|
3
|
|
|
$
|
4
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
In millions
|
June 30, 2018
|
|
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
|
$
|
364
|
|
|
$
|
364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
In millions
|
December 31, 2017
|
|
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
|
$
|
501
|
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions, except per share amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Weighted average outstanding shares of common stock
|
119.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
||||
Dilutive effect of employee stock options, restricted stock and other stock awards
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock and common stock equivalents
|
121.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Diluted
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
287
|
|
|
$
|
271
|
|
|
$
|
551
|
|
|
$
|
538
|
|
International
|
257
|
|
|
242
|
|
|
499
|
|
|
466
|
|
||||
Total revenue
|
544
|
|
|
513
|
|
|
1,050
|
|
|
1,004
|
|
||||
Segment gross profit
|
|
|
|
|
|
|
|
||||||||
Americas
|
154
|
|
|
158
|
|
|
301
|
|
|
309
|
|
||||
International
|
112
|
|
|
108
|
|
|
210
|
|
|
208
|
|
||||
Total segment gross profit
|
266
|
|
|
266
|
|
|
511
|
|
|
517
|
|
||||
Stock-based compensation costs
|
4
|
|
|
4
|
|
|
8
|
|
|
7
|
|
||||
Acquisition, integration, reorganization and transformation-related costs
|
—
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Amortization of capitalized software costs
|
12
|
|
|
19
|
|
|
27
|
|
|
40
|
|
||||
Total gross profit
|
250
|
|
|
242
|
|
|
473
|
|
|
467
|
|
||||
Selling, general and administrative expenses
|
163
|
|
|
165
|
|
|
315
|
|
|
320
|
|
||||
Research and development expenses
|
77
|
|
|
78
|
|
|
152
|
|
|
148
|
|
||||
Income (loss) from operations
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
$
|
6
|
|
|
$
|
(1
|
)
|
•
|
$21
to
$26 million
for employee severance and other employee-related costs,
|
•
|
$6
to
$8 million
charge for facilities lease related costs, and
|
•
|
$8
to
$11 million
for outside service, legal and other associated costs.
|
|
Six months Ended June 30,
|
||||||
In millions
|
2018
|
|
2017
|
||||
Employee severance and other employee related cost
|
$
|
—
|
|
|
$
|
2
|
|
Asset write-downs
|
—
|
|
|
6
|
|
||
Professional services, legal and other transformation costs
|
—
|
|
|
18
|
|
||
Employee separation benefits costs related to headquarter transition and business transformation
|
2
|
|
|
—
|
|
||
Transition support and other exit related costs for the headquarter transition and business transformation
|
3
|
|
|
—
|
|
||
Total reorganization and business transformation cost
|
$
|
5
|
|
|
$
|
26
|
|
•
|
Total revenue was
$544 million
for the
second
quarter of
2018
, up 6% from the
second
quarter of
2017
, with an underlying 11% increase in recurring revenue as the Company's business shifts to subscription-based transactions and a 7% increase in perpetual software licenses and hardware revenue, which was partially offset by a 4% decrease in consulting services revenue.
|
•
|
Gross margin decreased to
46.0%
in the
second
quarter of
2018
from
47.2%
in the
second
quarter of
2017
, due to higher mix of lower margin hardware revenue recognized in the quarter. The increased mix shift to hardware is due to more of the Company’s software license revenue being recognized over time in subscription-based transactions.
|
•
|
Operating expenses for the
second
quarter of
2018
decreased by 1% compared to the
second
quarter of
2017
.
|
•
|
Operating income was
$10 million
in the
second
quarter of
2018
, compared to operating loss of $1 million in the
second
quarter of
2017
, primarily due to higher revenue.
|
•
|
Net income in the
second
quarter of
2018
was
$4 million
, compared to a $4 million net loss in the
second
quarter of
2017
.
|
•
|
Annual Recurring Revenue ("ARR")
- is annual contract value for all active and contractually binding term-based contracts at the end of a period. It includes maintenance, software upgrade rights, cloud, subscription, rental and managed services.
|
•
|
Bookings Mix
- subscription bookings divided by the sum of subscription bookings plus perpetual bookings.
|
•
|
TCore
- is a metric that tracks a consistent unit of consumption across all of Teradata’s products over the wide variety of configuration and deployment options, both on-premises and in the cloud. It is determined from the number of physical central processing unit ("CPU") cores in a system and adjusted/reduced by the underlying hardware platform's input/output ("I/O") throughput performance capabilities.
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
312
|
|
|
57.4
|
%
|
|
$
|
281
|
|
|
54.8
|
%
|
Perpetual software licenses and hardware
|
97
|
|
|
17.8
|
%
|
|
91
|
|
|
17.7
|
%
|
||
Consulting services
|
135
|
|
|
24.8
|
%
|
|
141
|
|
|
27.5
|
%
|
||
Total revenue
|
$
|
544
|
|
|
100
|
%
|
|
$
|
513
|
|
|
100
|
%
|
•
|
Total ARR at the end of the second quarter of 2018 was $1.2 billion, an increase of 7% from the end of the second quarter of 2017. Beginning in the first quarter of 2018, recurring revenue and ARR now includes recurring revenue from our managed services business. The prior-period amounts have been updated to reflect the current period presentation.
|
•
|
Approximately 66% of our bookings in the second quarter of 2018 were subscription-based. We now expect subscription-based transactions to comprise 65 to 70 percent of our bookings mix for the full year.
|
•
|
We expect TCore growth in the mid to high teens in 2018.
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
224
|
|
|
71.8
|
%
|
|
$
|
209
|
|
|
74.4
|
%
|
Perpetual software licenses and hardware
|
24
|
|
|
24.7
|
%
|
|
34
|
|
|
37.4
|
%
|
||
Consulting services
|
2
|
|
|
1.5
|
%
|
|
(1
|
)
|
|
(0.7
|
)%
|
||
Total gross profit
|
$
|
250
|
|
|
46.0
|
%
|
|
$
|
242
|
|
|
47.2
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
163
|
|
|
30.0
|
%
|
|
$
|
165
|
|
|
32.2
|
%
|
Research and development expenses
|
77
|
|
|
14.2
|
%
|
|
78
|
|
|
15.2
|
%
|
||
Total operating expenses
|
$
|
240
|
|
|
44.1
|
%
|
|
$
|
243
|
|
|
47.4
|
%
|
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
4
|
|
|
$
|
3
|
|
Interest expense
|
(5
|
)
|
|
(4
|
)
|
||
Other
|
(3
|
)
|
|
(1
|
)
|
||
Other expense, net
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
|
2018
|
|
2017
|
||
Effective tax rate
|
33.3
|
%
|
|
(33.3
|
)%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
287
|
|
|
52.8
|
%
|
|
$
|
271
|
|
|
52.8
|
%
|
International
|
257
|
|
|
47.2
|
%
|
|
242
|
|
|
47.2
|
%
|
||
Total segment revenue
|
$
|
544
|
|
|
100
|
%
|
|
$
|
513
|
|
|
100
|
%
|
Segment gross profit
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
154
|
|
|
53.7
|
%
|
|
$
|
158
|
|
|
58.3
|
%
|
International
|
112
|
|
|
43.6
|
%
|
|
108
|
|
|
44.6
|
%
|
||
Total segment gross profit
|
$
|
266
|
|
|
48.9
|
%
|
|
$
|
266
|
|
|
51.9
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
614
|
|
|
58.5
|
%
|
|
$
|
554
|
|
|
55.2
|
%
|
Perpetual software licenses and hardware
|
166
|
|
|
15.8
|
%
|
|
181
|
|
|
18.0
|
%
|
||
Consulting services
|
270
|
|
|
25.7
|
%
|
|
269
|
|
|
26.8
|
%
|
||
Total revenue
|
$
|
1,050
|
|
|
100
|
%
|
|
$
|
1,004
|
|
|
100
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
436
|
|
|
71.0
|
%
|
|
$
|
415
|
|
|
74.9
|
%
|
Perpetual software licenses and hardware
|
45
|
|
|
27.1
|
%
|
|
63
|
|
|
34.8
|
%
|
||
Consulting services
|
(8
|
)
|
|
(3.0
|
)%
|
|
(11
|
)
|
|
(4.1
|
)%
|
||
Total gross profit
|
$
|
473
|
|
|
45.0
|
%
|
|
$
|
467
|
|
|
46.5
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
315
|
|
|
30.0
|
%
|
|
$
|
320
|
|
|
31.9
|
%
|
Research and development expenses
|
152
|
|
|
14.5
|
%
|
|
148
|
|
|
14.7
|
%
|
||
Total operating expenses
|
$
|
467
|
|
|
44.5
|
%
|
|
$
|
468
|
|
|
46.6
|
%
|
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
7
|
|
|
$
|
5
|
|
Interest expense
|
(10
|
)
|
|
(7
|
)
|
||
Other
|
(5
|
)
|
|
(2
|
)
|
||
Other expense, net
|
$
|
(8
|
)
|
|
$
|
(4
|
)
|
|
2018
|
|
2017
|
||
Effective tax rate
|
(50.0
|
)%
|
|
(20.0
|
)%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
551
|
|
|
52.5
|
%
|
|
$
|
538
|
|
|
53.6
|
%
|
International
|
499
|
|
|
47.5
|
%
|
|
466
|
|
|
46.4
|
%
|
||
Total segment revenue
|
$
|
1,050
|
|
|
100
|
%
|
|
$
|
1,004
|
|
|
100
|
%
|
Segment gross profit
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
301
|
|
|
54.6
|
%
|
|
$
|
309
|
|
|
57.4
|
%
|
International
|
210
|
|
|
42.1
|
%
|
|
208
|
|
|
44.6
|
%
|
||
Total segment gross profit
|
$
|
511
|
|
|
48.7
|
%
|
|
$
|
517
|
|
|
51.5
|
%
|
|
Six Months Ended June 30,
|
||||||
In millions
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
290
|
|
|
$
|
309
|
|
Less:
|
|
|
|
||||
Expenditures for property and equipment
|
(58
|
)
|
|
(30
|
)
|
||
Additions to capitalized software
|
(4
|
)
|
|
(4
|
)
|
||
Free cash flow
|
$
|
228
|
|
|
$
|
275
|
|
|
|
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
|
|
2,052,137
|
|
|
$
|
37.09
|
|
|
591,708
|
|
|
1,460,429
|
|
|
$
|
8,696,662
|
|
|
$
|
446,329,050
|
|
April 2018
|
|
737,315
|
|
|
$
|
39.65
|
|
|
217,100
|
|
|
520,215
|
|
|
$
|
2,778,696
|
|
|
$
|
425,673,533
|
|
May 2018
|
|
1,096,867
|
|
|
$
|
38.47
|
|
|
84,139
|
|
|
1,012,728
|
|
|
$
|
105,776
|
|
|
$
|
386,706,885
|
|
June 2018
|
|
232,499
|
|
|
$
|
41.12
|
|
|
46,007
|
|
|
186,492
|
|
|
$
|
4,521,075
|
|
|
$
|
379,010,024
|
|
Second Quarter Total
|
|
2,066,681
|
|
|
$
|
39.19
|
|
|
347,246
|
|
|
1,719,435
|
|
|
$
|
4,521,075
|
|
|
$
|
379,010,024
|
|
|
|
|
|
Reference Number
per Item 601 of
Regulation S-K
|
|
Description
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
101
|
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Statements of Income (Loss) for the three and six month period ended June 30, 2018 and 2017, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six month period ended June 30, 2018 and 2017, (iii) the Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017, (iv) the Condensed Consolidated Statements of Cash Flows for the six month period ended June 30, 2018 and 2017 and (v) the notes to the Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
TERADATA CORPORATION
|
||
|
|
|
|
|
Date: August 6, 2018
|
|
By:
|
|
/s/ Mark A. Culhane
|
|
|
|
|
Mark A.Culhane
Executive Vice President and Chief Financial Officer
|
1.1
|
Code
means the Internal Revenue Code of 1986, as amended.
|
1.2
|
Committee
means the Committee on Directors and Governance of the Board of Directors of Teradata Corporation.
|
1.3
|
Common Stock
means the common stock of Teradata Corporation, par value $.01 per share.
|
1.5
|
Deferred Stock Award
means the annual retainer and/or meeting fees, if any, elected by a Participant to be deferred as set forth in ARTICLE III.
|
1.6
|
Deferred Stock Grant
means the initial, annual or mid-year equity grants, if any, elected by a Participant to be deferred as set forth in ARTICLE IV.
|
1.7
|
Director
means a member of the Board of Directors of Teradata Corporation who is not an employee of the Company.
|
1.8
|
Effective Date
has the meaning set forth in the preamble of this Program.
|
1.9
|
Fair Market Value
of a share of Common Stock as of a specified date means the average of the closing price per share of Common Stock as listed on the New York Stock Exchange for the 20 trading days immediately preceding the specified date; provided, however, that for purposes of determining the exercise price of a Stock Option, “Fair Market Value” shall have the meaning provided in the Stock Incentive Plan.
|
1.10
|
Participant
means a Director, and any former Director entitled to payment of a benefit from the Program.
|
1.11
|
Restricted Shares
means actual shares of Common Stock bearing restrictions or conditions and issued to a Director pursuant to the Stock Incentive Plan.
|
1.12
|
Restricted Share Units
means awards granted pursuant to the Stock Incentive Plan that are denominated in shares of Common Stock that will be settled in an amount in cash, shares of Common Stock, or both, as designated in a Director’s individual award statement or agreement, at the end of a specified restricted period.
|
1.13
|
Stock Incentive Plan
means the Teradata Corporation 2007 Stock Incentive Plan, as amended and restated, or any successor equity compensation plan, including the Teradata 2012 Stock Incentive Plan as amended and restated as of February 23, 2016.
|
1.14
|
Stock Options
means stock options granted pursuant to the Stock Incentive Plan.
|
1.15
|
Year of Service
means the approximately 12 month period beginning on the date of an annual stockholders’ meeting of the Company and ending on the day before the Company’s annual stockholders’ meeting of the next following year, during which an individual serves as a Director.
|
2.1
|
Annual Compensation
. A Director will receive the compensation described in Sections 2.2 through 2.5 below, as determined by the Committee in its discretion, based on review of competitive data and consideration of such other factors as it may deem prudent and appropriate.
|
2.2
|
Annual Retainer
. For each Year of Service, a Director will receive an annual retainer as determined by the Committee, which may include an additional retainer amount for Committee Chairs and for the Chairman of the Board. A Director may elect to receive the retainer in cash, in Common Stock, or as a Deferred Stock Award, as described in ARTICLE III. If no election is made, the retainer will be paid in cash. If paid in cash or Common Stock, payment of 25% of the annual amount will be made on June 30, September 30,
|
2.3
|
Meeting Fees
. The Committee may determine that Directors will receive a meeting fee for each meeting attended, and may determine that Committee Chairs will determine whether a particular special meeting is subject to a meeting fee. Meeting fees, if any, will be paid quarterly at the same time as the retainer, for meetings attended in the immediately preceding quarter, and may be paid in cash, Common Stock or as a Deferred Stock Award as provided in Article III.
|
2.4
|
Initial Equity Grant
. On or about the date of first election to the Board, each Director will receive an initial equity grant in the form of Restricted Shares or Restricted Share Units under the Stock Incentive Plan, as determined by the Committee in its discretion. If such grant is made in the form of Restricted Share Units, a Director may elect to defer receipt of the Common Stock payable in respect of vested Restricted Share Units as a Deferred Stock Grant as provided in Article IV. A Director will receive only one initial equity grant for any continuous period served as a Director. If a Director ceases to serve as a Director for a period of at least three years and is later again elected as a Director, he or she will receive a second initial equity grant for the second period served as a Director.
|
2.5
|
Annual Equity Grant
. On or about the date of each annual stockholders’ meeting of the Company, each individual then serving as a Director or newly elected as a Director shall receive an equity grant under the Stock Incentive Plan, determined by the Committee, consisting of Restricted Shares, Restricted Share Units and/or Stock Options. If Stock Options are granted, the exercise price for each optioned share will be the Fair Market Value of one share of Common Stock on the grant date. Except as otherwise provided in the applicable award agreement, any Stock Options that are granted will be fully vested and exercisable on the first anniversary of the grant date, subject to the Director’s continued service through the vesting date. Except as otherwise provided in the applicable award agreement, any Restricted Share Units awarded will vest in four equal, quarterly installments commencing three months after the grant date, subject to the Director’s continued service through the applicable vesting date. If Restricted Shares or Restricted Share Units are awarded, the Committee may determine that the shares or units will be forfeited if the Director ceases to serve as a director during a restriction period determined by the Committee. If the annual equity grant is made in the form of Restricted Share Units, a Director may elect to defer receipt of the Common Stock payable in respect of vested Restricted Share Units as a Deferred Stock Grant as provided in ARTICLE IV.
|
2.6
|
Mid-Year Equity Grants
. The Committee in its discretion may grant Stock Options and/or awards of Restricted Shares or Restricted Share Units, as described in Section 2.5, to Directors who are newly elected to the Board after the annual stockholders’ meeting. If a mid-year equity grant is made in the form of Restricted Share Units, a Director may elect to defer receipt of the Common Stock payable in respect of vested Restricted Share Units as a Deferred Stock Grant as provided in ARTICLE IV.
|
3.1
|
Election to Defer
. For each calendar year, a Director may elect to defer receipt of pay for services relating to the retainer and meeting fees, if any, to be received in that calendar year, and receive them instead as a Deferred Stock Award. The election must be made prior to the January 1 of the calendar year in which the services relating to the retainer or meeting fees will be rendered by a Director or such later date as is permitted by guidance issued under Section 409A of the Code. The election to defer shall be irrevocable commencing on December 31 of the calendar year prior to the calendar year that such election is in effect (or such earlier date as specified on the deferral election form). Notwithstanding the foregoing, a newly-elected Director may make an election no later than 30 days after the date of his or her election to the Board of Directors, which deferral election shall become irrevocable as of the thirtieth (30th) day following the Director's election to the Board of Directors (or such earlier date as specified on the deferral election form) and shall apply only to the retainer and meeting fees for services to be performed after the deferral election becomes irrevocable. A new election to defer may be made for each subsequent calendar year, provided the deferral election is made prior to the January 1 of the calendar year and shall be irrevocable for the following calendar year. If a new election is not made, or a prior election is not revoked for the immediately succeeding calendar year, the most recent election to defer will remain in effect and be irrevocable for the following calendar year.
|
3.2
|
Form of Election
. The election to defer must be made in writing, and may be made electronically on a form provided by the Company.
|
3.3
|
Deferral Periods
. A Director may elect to receive the Deferred Stock Award at one of the following times:
|
(a)
|
on the date of termination as a Director consistent with the definition of
|
(c)
|
in one to five equal annual installments, payable on April 30 of each year, beginning on the April 30 next following the date of termination as a Director consistent with
|
3.4
|
Deferred Stock Awards
. If a Director elects to receive the annual retainer and meeting fees, if any, as a Deferred Stock Award, the Company will maintain a deferred stock account credited, as of the date a payment of the retainer or meeting fee would have otherwise been paid, with a number of stock units equal to the shares of Common Stock (rounded up to the nearest whole share) that could have been purchased with the amount deferred as of such date at the Fair Market Value of the Common Stock on such date. As of the date any dividend is paid to stockholders of Common Stock, the Director’s deferred stock account shall also be credited with an additional number of stock units equal to the number of shares of Common Stock (including fractions of a share) that could have been purchased at the Fair Market Value on such date with the dividend paid on the number of shares of Common Stock equivalent to the number of share units credited to the Director’s deferred stock account. In case of dividends paid in property, the dividend shall be deemed to be the fair market value of the property at the same time of distribution of the dividend, as determined by the Committee.
|
3.5
|
Distribution of Deferred Stock Award
. Payment of a Director’s Deferred Stock Award shall be made at the times elected by the Director at the time of his or deferral election. Distribution shall be made in shares of Common Stock. The Participant shall receive the number of whole shares of Common Stock to which the distribution is equivalent. The shares of Common Stock shall be paid from, and shall count against the share reserve of, the Stock Incentive Plan.
|
4.1
|
Election to Defer
. If and to the extent Restricted Share Units are granted to a Director for the initial equity grant described in Section 2.4 and/or in connection with the annual or mid-year equity grants described in Sections 2.5 and 2.6, respectively, a Director may elect to defer receipt of the Common Stock otherwise payable to the Director as such Restricted Share Units vest. For the annual equity grant, the election to defer must be made prior to the January 1 of the calendar year in which the grant is made. The election to defer shall be irrevocable commencing on December 31 of the calendar year prior to the calendar year that such election is in effect (or such earlier date as specified on the deferral election form). For both the initial and mid-year equity grants for newly-elected Directors, such Directors must make the deferral election no later than 30 days after the date of his or her election to the Board of Directors, which deferral election shall become irrevocable as of the thirtieth (30th) day following the Director's election to the Board of Directors (or such earlier date as specified on the deferral election form) and shall apply only to the initial and mid-year equity grants for services to be performed after the deferral election becomes irrevocable.
|
4.2
|
Form of Election
. The election to defer must be made in writing, and may be made electronically on a form provided by the Company.
|
4.3
|
Deferral Periods
. A Director may elect to receive the Common Stock at one of the times specified in Section 3.3 above.
|
4.4
|
Deferred Stock Accounts
. If a Director elects to defer receipt of the Common Stock otherwise payable in respect of Restricted Share Units awarded as initial, annual or mid-year equity grants, the Company will maintain a deferred stock account credited, as of the date of election to the Board, with a number of stock units equal to the shares of Common Stock the Director was entitled to receive as such Restricted Share Units vested. As of the date any dividend is paid to stockholders of Common Stock, the Director’s deferred stock account shall also be credited with an additional number of stock units equal to the number of shares of Common Stock (including fractions of a share) that could have been purchased at the Fair Market Value on such date with the dividend paid on the number of shares of Common Stock equivalent to the number of share units credited to the Director’s deferred stock account. In case of dividends paid in property, the dividend shall be deemed to be the fair market value of the property at the same time of distribution of the dividend, as determined by the Committee.
|
4.5
|
Distribution of Deferred Stock Grant
. Payment of a Director’s Deferred Stock Grant shall be made at the times elected by the Director at the time of deferral, in shares of Common Stock. The Participant shall receive the number of whole shares of Common Stock to which the amount of the distribution is equivalent. The shares of Common Stock shall be paid from, and shall count against the share reserve of, the Stock Incentive Plan.
|
5.1
|
Distribution Upon Death
. In the event of the death of a Participant, whether before or after termination of service, any Deferred Stock Award or Deferred Stock Grant due and unpaid on the date of the Participant’s death shall be distributed in shares of Common Stock, and any retainer or meeting fees due and unpaid on the date of the Participant’s death shall be paid in cash, to the Participant’s designated beneficiary, or if no beneficiary is designated, to the Participant’s estate, in a single lump sum within 90 days after the Participant’s death. Distribution of a Participant’s Stock Options will be according to the terms of the Stock Option agreements.
|
5.2
|
Designation of Beneficiary
. On the terms and subject to the conditions established by the Company or its designee, a Participant may designate one or more individuals or trusts as his or her beneficiary to receive payment of all or any designated portion of Deferred Stock Awards, Deferred Stock Grants, or retainer or meeting fees due and unpaid on the date of the Participant’s death, or revoke or change any such designation.
|
6.1
|
Taxes
. Each Director shall be responsible for all tax consequences of his or her participation in the Program. However, the Company shall be authorized to deduct from all distributions under the Program any taxes that may be required to be withheld by federal, state or local governments.
|
6.2
|
Unfunded Nature of Program
. This Program shall be unfunded. The funds used for payment of benefits hereunder shall, until such actual payment, continue to be part of the general funds of the Company, and no person other than the Company shall, by virtue of this Program, have any interest in any such funds. Nothing contained herein shall be deemed to create a trust of any kind or create any fiduciary relationship. To the extent that any person acquires a right to receive payments from the Company under this Program, such right shall be no greater than the right of any unsecured general creditor of the Company.
|
6.3
|
Non-alienation of Benefits
. No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, including assignment pursuant to a domestic relations order, and any attempt to do so shall be void. No such benefit shall, prior to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, or torts of the Participant.
|
6.4
|
Acceleration Upon a Change in Control
. As provided in the Stock Incentive Plan and applicable provisions of a Director’s individual award agreement or statement under this Program, the vesting of Stock Options, Restricted Shares and Restricted Share Units, and the payment of Deferred Stock Awards and Deferred Stock Grants, may accelerate upon the occurrence of a Change in Control (as defined in the Stock Incentive Plan). Notwithstanding the foregoing, to the extent necessary to comply with Section 409A, payment of Deferred Stock Awards and Deferred Stock Grants shall be made on the earlier of (a) a “change in the ownership,” a “change in the ownership of a substantial portion of the assets” or a “change in the effective control” of the Company within the meaning of Section 409A of the Code; or (b) at the time(s) specified in Section 3.3 pursuant to an election in effect under Section 3.1 or Section 4.1.
|
6.5
|
Amendment or Termination of the Program
. The Committee at any time may amend or terminate the Program, provided that no such action shall adversely affect the right of any Participant or Beneficiary to a benefit to which he or she has become entitled pursuant to
|
6.6
|
Adjustments
. The number and kind of shares of Common Stock subject to Stock Options, Restricted Shares, Restricted Share Units, Deferred Stock Awards and Deferred Stock Grants, and the exercise price of Stock Options, shall be subject to adjustment in accordance with the provisions of the Stock Incentive Plan.
|
6.7
|
Compliance with Section 409A
. Notwithstanding any of the foregoing provisions of the Program, to the extent required in order to comply with Section 409A(a)(2)(B)(i) of the Code, Deferred Stock Awards and Deferred Stock Grants shall be paid on the first business day after the date that is six months following a Director's “separation from service” within the meaning of Section 409A of the Code. The Program is intended to comply with the provisions of Section 409A of the Code, and the Treasury Regulations issued pursuant thereto; and the provisions of the Program will at all times be administered consistent therewith. Any provision of the Program that is inconsistent with, or in violation of, Section 409A of the Code, shall be void and of no effect. The Executive Vice President and Chief Human Resources Officer, and the General Counsel of the Company are delegated the responsibility to interpret and administer the Program consistent with Section 409A of the Code and to take necessary action pursuant to this Section 6.6 and Section 6.5 consistent with the intent that the Program be administered consistent with such provision.
|
•
|
Salary and target bonus continuation for 12 months, less required withholdings and deductions;
|
•
|
A pro-rated annual cash incentive bonus for the year of termination, payable following the determination of the actual Teradata performance for fiscal year 2018 and on the same schedule as these bonuses are paid to other eligible participants, and subject to the terms and conditions of the Company’s Management Incentive Plan and less required withholdings and deductions;
|
•
|
The Company will contribute towards your COBRA premiums the portion of the premiums currently paid by the Company for your medical, dental and/or vision benefits for up to twelve (12) months (however, you must apply for COBRA benefits, Teradata cannot do so on your behalf); and
|
•
|
Outplacement services as provided in the Plan.
|
|
|
•
|
The base salary continuation set forth in the first bullet above will be paid at the annual rate of $450,000, with the first severance payment to include retroactive pay to effect a salary increase to $450,000 as of March 1, 2018;
|
•
|
The target bonus continuation set forth in the first bullet point above, and the pro-rated annual cash incentive bonus set forth in the second bullet point above, will be paid at the target annual incentive rate of 80% of base salary;
|
•
|
All of your outstanding stock options will vest as of
July 6, 2018
, and will be exercisable until the earlier of 59 days after such date or the expiration of the applicable option;
|
•
|
All of your outstanding time-based restricted share units (other than the restricted share units granted to you on November 27, 2017) will vest in full (without pro-ration) as of
July 6, 2018
; and
|
•
|
All of your outstanding performance-based restricted share units (other than the performance-based restricted share units granted to you on November 27, 2017) that are earned based on actual Company performance for the entire performance period will vest in full (without pro-ration), effective as of the date that Company performance is certified for the applicable performance period.
|
|
|
|
Date: August 6, 2018
|
|
/s/ Victor L. Lund
|
|
|
Victor L. Lund
|
|
|
President and 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 officer(s) 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:
|
5.
|
The registrant’s other certifying officer(s) 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):
|
|
|
|
|
|
|
Date: August 6, 2018
|
|
/s/ Mark A. Culhane
|
|
|
Mark A. Culhane
|
|
|
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: August 6, 2018
|
|
/s/ Victor L. Lund
|
|
|
Victor L. Lund
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: August 6, 2018
|
|
/s/ Mark A. Culhane
|
|
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Mark A. Culhane
Executive Vice President and Chief Financial Officer
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