ý
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ANNUAL 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
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange
on which Registered
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Common Stock, $0.01 par value
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New York Stock Exchange
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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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Part III:
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Portions of the registrant’s Notice of Annual Meeting of Stockholders and Proxy Statement, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after registrant’s fiscal year end of December 31, 2018 are incorporated herein by reference.
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Item
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Description
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Page
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1.
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1A.
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1B.
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2.
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3.
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4.
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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10.
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11.
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12.
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13.
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14.
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15.
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16.
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||
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•
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Our ability to timely and effectively execute our new strategy and complete our business transformation;
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•
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The rapidly changing and intensely competitive nature of the information technology (“IT”) industry and the analytic data platform business, including the ongoing consolidation activity, threats from new and emerging analytic data technologies and competitors, and pressure on achieving continued price/performance gains for analytic data solutions;
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•
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Fluctuations in our operating results, timing of transactions, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues, particularly the pace and extent to which customers shift from perpetual licenses to subscription-based licenses;
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•
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The impact of global economic fluctuations on the markets in general or on the ability of our suppliers and customers to meet their commitments to us, or the timing of purchases by our current and potential customers; and
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•
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Risks inherent in operating in foreign countries, including the impact of foreign currency fluctuations, economic, political, legal, regulatory, compliance, cultural and other conditions abroad.
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•
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Improving customer experience and profitability by understanding behavior patterns,
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•
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Improving operational efficiency,
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•
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Driving financial transformation with accurate and timely data, and
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•
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Creating more efficient utilization of assets through machine learning of sensor data.
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•
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Relentlessly focus on consumption, focusing the entire company on annual recurring revenue ("ARR") growth;
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•
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Radically simplify, making Teradata's offerings easy to consume through improvements to the customer experience;
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•
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Pivot towards as-a-service, shifting from consulting first to as-a-service first;
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•
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Transform our go-to-market and brand, realigning our go-to-market organization and consulting resources to align with our strategy and megadata target market, and repositioning Teradata with our customers and the broader market; and
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•
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Deliver operational excellence through improved efficiency and execution across the organization.
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•
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Analyze Anything
- enables analytic users throughout the organization to use their preferred analytic tools and engines across data sources, at scale.
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•
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Deploy Anywhere
- provides analytic processing in the cloud and on-premises, providing flexibility to change as business needs evolve.
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•
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Buy Any Way
- allows companies choice in how they want to consume our solutions through a variety of purchase options at different price points.
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•
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Move Anytime
- includes software license portability when purchased via subscription that provides the flexibility to run analytics and move the software as needed across deployment options, such as moving from on-premises to cloud, between clouds, or from cloud to on-premises.
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•
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Grow awareness, highlighting our technology leadership, differentiation, and consulting expertise;
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•
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Create demand for and adoption of our Teradata Vantage analytical platform;
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•
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Educate the sales force to build skills and knowledge to deliver our value proposition; and
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•
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Provide a robust set of tools for use by our direct sales force.
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•
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Alliance Partners
: Our partner program is focused on working collaboratively with independent software vendors in several areas, including tools, data and application integration solutions, data mining, analytics, business intelligence, and specific analytic and industry solutions. Our goal is to provide choices to our customers with partner offerings that are optimized and certified to work with Teradata Vantage to deliver end-to-end analytic and data solutions and to fit within the customer’s analytic environment.
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•
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Systems Integrators
: In some cases, we also work with a range of systems integrators and consultants who engage in the design, implementation, and integration of analytic solutions and analytic applications for our joint customers. Our strategic partnerships with select global consulting and systems integration firms provide broad industry and technology expertise in the design of business solutions that leverage Teradata technology to enable enterprise analytics.
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•
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General economic and political conditions in each country that could adversely affect demand for our solutions in these markets;
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•
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Currency exchange rate fluctuations that could result in lower demand for our offerings as well as generate currency translation losses;
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•
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Currency fluctuations can affect margins on sales of our offerings in countries outside of the United States and margins on sales of offerings that include components sourced in the United States but sold outside of the United States;
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•
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The impact of civil and political unrest (relating to war, terrorist activity or other turmoil) on the economy or markets in general, or on our ability, or that of our suppliers, to meet commitments, which may occur in other countries where we have significant operations;
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•
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Cultural and management challenges associated with operating in developing countries;
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•
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Longer payment cycles for sales in foreign countries and difficulties in enforcing contracts and collecting accounts receivable;
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•
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Tariffs or other restrictions on foreign trade or investment; and
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•
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The impact of catastrophic weather or other negative effects of climate change on our facilities, operations and/or workforce, as well as those of our customers, supply chains and distribution channels, throughout the world, particularly those in coastal areas.
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•
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Changes in customer IT spending preferences and other shifts in market demands, which drive changes in the Company's competition;
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•
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Continued pressure on price/performance for analytic data platform solutions due to constant technology improvements in processor capacity and speed;
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•
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Changes in pricing, marketing and product strategies, such as potential aggressive price discounting and the use of different pricing models by our competitors;
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•
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Rapid changes in computing technology and capabilities that challenge our ability to maintain differentiation at the lower range of business intelligence analytic functions;
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•
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New and emerging analytic technologies, competitors, and business models;
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•
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Continued emergence of open source software that often rivals current technology offerings at a much lower cost despite its limited functionality;
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•
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Rapid changes in product delivery models, such as on-premises solutions versus cloud solutions;
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•
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Changing competitive requirements and deliverables in developing and emerging markets; and
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•
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Continuing trend toward consolidation of companies, which could adversely affect our ability to compete, including if our key partners merge or partner with our competitors.
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•
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Be expensive, time consuming and divert management attention away from normal business operations;
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•
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Require us to pay monetary damages or enter into non-standard royalty and licensing agreements;
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•
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Require us to modify our product sales and development plans; or
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•
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Require us to satisfy indemnification obligations to our customers.
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•
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The speed at which customers move to our subscription-based offerings;
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•
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Downturns in our customers’ businesses, in the domestic economy or in international economies where our customers do substantial business;
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•
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The size, timing and contractual terms of large orders for our offerings and services, which may impact our quarterly operating results (either positively or negatively);
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•
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The budgeting cycles of our customers and potential customers;
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•
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Changes in pricing policies resulting from competitive pressures, such as aggressive price discounting by our competitors, new pricing strategies, or other factors;
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•
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Changes in how customers prefer to purchase analytical solutions;
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•
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Changes in the mix of pre-tax earnings attributable to domestic versus international sales;
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•
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Unexpected needs for capital expenditures or other unanticipated expenses; and
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•
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Changes in certain assumptions, estimates and judgments of management (which are required in connection with the preparation of the Company’s financial statements) that could affect the reported amounts of assets, liabilities, revenues, costs, expenses and the related disclosure of contingent liabilities.
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•
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Assimilating and integrating different business operations, corporate cultures, personnel, infrastructure and technologies or offerings acquired or licensed;
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•
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Retaining key employees and maintaining relationships with employees, customers, clients or suppliers of the acquired companies;
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•
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Recurring revenue of the acquired company may decline or fail to be renewed;
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•
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The potential for unknown liabilities, as well as undetected internal control, compliance or quality issues within the acquired or combined business or additional costs not anticipated at the time of acquisition;
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•
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Disruptions of our ongoing business or inability to successfully incorporate acquired products, services or technologies into our solutions and maintain quality;
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•
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Failure to achieve the projected synergies after integration of acquired companies or a decline in value of the acquired business and related impairments;
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•
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Funding acquisition activities, whether through existing cash reserves, or through the use of debt, and the related impact on our liquidity and financial condition; and
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•
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Failure to realize all the economic benefits from these acquisitions, equity investments or joint ventures could result in an impairment of goodwill, intangible assets or other assets, which could result in a significant adverse impact to our results of operations.
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•
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Expose us to interest rate risk;
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•
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Increase our vulnerability to general adverse economic and industry conditions;
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•
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Limit our ability to obtain additional financing or refinancing at attractive rates;
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•
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Require the dedication of a substantial portion of our cash flow from operations to the payment of principal of, and interest on, our indebtedness, thereby reducing the availability of such cash flow to fund our growth strategy, working capital, capital expenditures, share repurchases and other general corporate purposes;
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•
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Limit our flexibility in planning for, or reacting to, changes in our business and the industry; and
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•
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Place us at a competitive disadvantage relative to our competitors with less debt.
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Item 1B.
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UNRESOLVED STAFF COMMENTS
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Item 2.
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PROPERTIES
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Item 3.
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LEGAL PROCEEDINGS
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Item 4.
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MINE SAFETY DISCLOSURES
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Item 5.
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MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
As of December 31,
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||||||||||||||||||||||
Company/Index
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
Teradata Corporation
|
|
$
|
100
|
|
|
$
|
96
|
|
|
$
|
58
|
|
|
$
|
60
|
|
|
$
|
85
|
|
|
$
|
84
|
|
S&P 500 Index
|
|
$
|
100
|
|
|
$
|
114
|
|
|
$
|
115
|
|
|
$
|
129
|
|
|
$
|
157
|
|
|
$
|
150
|
|
S&P Information Technology Index
|
|
$
|
100
|
|
|
$
|
120
|
|
|
$
|
127
|
|
|
$
|
145
|
|
|
$
|
201
|
|
|
$
|
201
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
For the Years Ended
December 31
|
|
||||||||||||||||||
In millions, except per share and employee amounts
|
2018
|
|
2017
(1)
|
|
2016
(2)
|
|
2015
(3)
|
|
2014
|
|
||||||||||
Revenue
(4)
|
$
|
2,164
|
|
|
$
|
2,156
|
|
|
$
|
2,322
|
|
|
$
|
2,530
|
|
|
$
|
2,732
|
|
|
Income (loss) from operations
|
$
|
43
|
|
|
$
|
68
|
|
|
$
|
235
|
|
|
$
|
(189
|
)
|
|
$
|
508
|
|
|
Other (expense) income, net
|
$
|
(16
|
)
|
|
$
|
(10
|
)
|
|
$
|
(14
|
)
|
|
$
|
45
|
|
|
$
|
(14
|
)
|
|
Income tax (benefit) expense
|
$
|
(3
|
)
|
|
$
|
125
|
|
|
$
|
96
|
|
|
$
|
70
|
|
|
$
|
127
|
|
|
Net income (loss)
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
125
|
|
|
$
|
(214
|
)
|
|
$
|
367
|
|
|
Net income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.96
|
|
|
$
|
(1.53
|
)
|
|
$
|
2.36
|
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.95
|
|
|
$
|
(1.53
|
)
|
|
$
|
2.33
|
|
|
|
At December 31
|
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||
Total assets
|
$
|
2,360
|
|
|
$
|
2,556
|
|
|
$
|
2,413
|
|
|
$
|
2,527
|
|
|
$
|
3,132
|
|
|
Debt and capital leases, including current portion
|
$
|
547
|
|
|
$
|
780
|
|
|
$
|
570
|
|
|
$
|
780
|
|
|
$
|
468
|
|
|
Total stockholders’ equity
|
$
|
495
|
|
|
$
|
668
|
|
|
$
|
971
|
|
|
$
|
849
|
|
|
$
|
1,707
|
|
|
Number of employees
|
10,152
|
|
|
10,615
|
|
|
10,093
|
|
|
11,300
|
|
|
11,500
|
|
|
1.
|
Includes $126 million tax impact related to the Tax Cuts and Job Act of 2017
|
2.
|
Includes $76 million ($70 million after-tax) for impairment of goodwill and acquired intangibles
|
3.
|
Includes $478 million ($457 million after-tax) for impairment of goodwill and acquired intangibles
|
4.
|
Periods prior to 2018 have not been adjusted under the modified retrospective adoption method of Topic 606.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ("MD&A")
|
•
|
Annual Recurring Revenue ("ARR")
- is the annual contract value for all active and contractually binding term-based contracts at the end of a period. It includes maintenance, software upgrade rights, subscription-based transactions and managed services.
|
•
|
Bookings Mix
- subscription bookings divided by the sum of subscription bookings plus perpetual bookings.
|
•
|
Revenue of $2,164 million increased by $8 million in
2018
as compared to
2017
,
with a 10% increase in recurring revenue as the Company's business shifts to subscription-based transactions, partially offset by a 21% decrease in perpetual software licenses and hardware revenue and a 2% decrease in consulting services revenue.
|
•
|
Gross margin was
47.4%
in
2018
, flat as compared to
2017
,
primarily due to improved consulting services margins resulting from operational improvements offset by revenue mix shift as the company transitions to subscription-based transactions, which has a short-term impact on the overall gross margin rate.
|
•
|
Operating expenses in 2018 increased by 3% as compared to 2017, primarily due to the investments that we made in 2018 related to our strategic initiatives including increasing sales and sales support headcount and investments in managed and public cloud and our new Vantage platform. Teradata also transitioned its corporate headquarters to San Diego, California from Dayton, Ohio, which increased operating expenses.
|
•
|
Operating income was
$43 million
in
2018
, down from
$68 million
in
2017
, primarily due to higher operating expenses.
|
•
|
Net income was
$30 million
in
2018
versus a net loss of
$(67) million
in
2017
.
Net income per share was
$0.25
in
2018
compared to net loss per share of
$(0.53)
in
2017
. The net loss for 2017 included a $126 million tax charge due to the enactment of The Tax Cuts and Jobs Act of 2017.
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|||||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
|
2016
|
|
Revenue
|
|||||||||
Recurring
|
$
|
1,254
|
|
|
57.9
|
%
|
|
$
|
1,145
|
|
|
53.1
|
%
|
|
$
|
1,135
|
|
|
48.9
|
%
|
Perpetual software license and hardware
|
340
|
|
|
15.7
|
%
|
|
429
|
|
|
19.9
|
%
|
|
600
|
|
|
25.8
|
%
|
|||
Consulting services
|
570
|
|
|
26.3
|
%
|
|
582
|
|
|
27.0
|
%
|
|
587
|
|
|
25.3
|
%
|
|||
Total revenue
|
$
|
2,164
|
|
|
100
|
%
|
|
$
|
2,156
|
|
|
100
|
%
|
|
$
|
2,322
|
|
|
100
|
%
|
•
|
At the end of 2018, ARR was $1.308 billion, a 10% increase from $1.184 billion at the end of 2017. The growth in ARR in 2018 was unfavorably impacted by 2% from foreign currency fluctuations. Beginning in 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.
|
•
|
79% of our bookings mix in 2018 were subscription-based and we expect a substantial majority of our total bookings mix in 2019 to continue to be subscription-based.
|
•
|
Revenue Mix
- The proportion of recurring, consulting, and perpetual software licenses and hardware that generates the total revenue of the Company. Changes in revenue mix can have an impact on gross profit even if total revenue remains unchanged.
|
•
|
Recurring Revenue Mix
- The proportion of various recurring revenue offerings that comprise the total of recurring revenue. For example, a higher mix of subscriptions including hardware rental would have a negative impact on total recurring gross profit.
|
•
|
Deal Mix
- Refers to the type of transactions closed within the period that generate the total perpetual software license and hardware revenue. For example, a higher mix of hardware versus software or the mix of Teradata versus third-party products.
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|||||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
|
2016
|
|
Revenue
|
|||||||||
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Recurring
|
$
|
880
|
|
|
70.2
|
%
|
|
$
|
841
|
|
|
73.4
|
%
|
|
$
|
864
|
|
|
76.1
|
%
|
Perpetual software licenses and hardware
|
118
|
|
|
34.7
|
%
|
|
170
|
|
|
39.6
|
%
|
|
282
|
|
|
47.0
|
%
|
|||
Consulting Services
|
28
|
|
|
4.9
|
%
|
|
13
|
|
|
2.2
|
%
|
|
43
|
|
|
7.3
|
%
|
|||
Total gross profit
|
$
|
1,026
|
|
|
47.4
|
%
|
|
$
|
1,024
|
|
|
47.5
|
%
|
|
$
|
1,189
|
|
|
51.2
|
%
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|||||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
|
2016
|
|
Revenue
|
|||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expenses
|
$
|
666
|
|
|
30.8
|
%
|
|
$
|
651
|
|
|
30.2
|
%
|
|
$
|
662
|
|
|
28.5
|
%
|
Research and development expenses
|
317
|
|
|
14.6
|
%
|
|
305
|
|
|
14.1
|
%
|
|
212
|
|
|
9.1
|
%
|
|||
Impairment of goodwill, acquired intangibles and other assets
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
80
|
|
|
3.4
|
%
|
|||
Total operating expenses
|
$
|
983
|
|
|
45.4
|
%
|
|
$
|
956
|
|
|
44.3
|
%
|
|
$
|
954
|
|
|
41.1
|
%
|
|
|
|
|
|
|
||||||
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Gain on securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest income
|
14
|
|
|
11
|
|
|
6
|
|
|||
Interest expense
|
(22
|
)
|
|
(15
|
)
|
|
(12
|
)
|
|||
Other
|
(8
|
)
|
|
(6
|
)
|
|
(10
|
)
|
|||
Total Other Expense, net
|
$
|
(16
|
)
|
|
$
|
(10
|
)
|
|
$
|
(14
|
)
|
|
2018
|
|
2017
|
|
2016
|
|||
Effective Tax Rate
|
(11.1
|
)%
|
|
215.5
|
%
|
|
43.4
|
%
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|||||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
|
2016
|
|
Revenue
|
|||||||||
Segment revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas
|
$
|
1,126
|
|
|
52.0
|
%
|
|
$
|
1,195
|
|
|
55.4
|
%
|
|
$
|
1,334
|
|
|
57.4
|
%
|
International
|
1,038
|
|
|
48.0
|
%
|
|
961
|
|
|
44.6
|
%
|
|
919
|
|
|
39.6
|
%
|
|||
Total Data and Analytics
|
2,164
|
|
|
100.0
|
%
|
|
2,156
|
|
|
100.0
|
%
|
|
2,253
|
|
|
97.0
|
%
|
|||
Marketing Applications
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
69
|
|
|
3.0
|
%
|
|||
Total segment revenue
|
$
|
2,164
|
|
|
100
|
%
|
|
$
|
2,156
|
|
|
100
|
%
|
|
$
|
2,322
|
|
|
100
|
%
|
Segment gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Americas
|
$
|
621
|
|
|
55.2
|
%
|
|
$
|
675
|
|
|
56.5
|
%
|
|
$
|
797
|
|
|
59.7
|
%
|
International
|
474
|
|
|
45.7
|
%
|
|
437
|
|
|
45.5
|
%
|
|
445
|
|
|
48.4
|
%
|
|||
Total Data and Analytics
|
1,095
|
|
|
50.6
|
%
|
|
1,112
|
|
|
51.6
|
%
|
|
1,242
|
|
|
55.1
|
%
|
|||
Marketing Applications
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
34
|
|
|
49.3
|
%
|
|||
Total segment gross profit
|
$
|
1,095
|
|
|
50.6
|
%
|
|
$
|
1,112
|
|
|
51.6
|
%
|
|
$
|
1,276
|
|
|
55.0
|
%
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
364
|
|
|
$
|
324
|
|
|
$
|
446
|
|
Less:
|
|
|
|
|
|
||||||
Expenditures for property and equipment
|
(153
|
)
|
|
(78
|
)
|
|
(53
|
)
|
|||
Additions to capitalized software
|
(7
|
)
|
|
(9
|
)
|
|
(65
|
)
|
|||
Free cash flow
|
$
|
204
|
|
|
$
|
237
|
|
|
$
|
328
|
|
|
Total
|
|
|
|
2020-
|
|
2022-
|
|
2024 and
|
||||||||||
In millions
|
Amounts
|
|
2019
|
|
2021
|
|
2023
|
|
Thereafter
|
||||||||||
Principal payments on long-term debt
|
$
|
500
|
|
|
$
|
19
|
|
|
$
|
69
|
|
|
$
|
412
|
|
|
$
|
—
|
|
Interest payments on long-term debt
|
79
|
|
|
20
|
|
|
37
|
|
|
22
|
|
|
—
|
|
|||||
Principal payments on capital leases
|
47
|
|
|
17
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments on capital leases
|
3
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Transition tax
|
105
|
|
|
3
|
|
|
19
|
|
|
28
|
|
|
55
|
|
|||||
Lease obligations
|
75
|
|
|
24
|
|
|
32
|
|
|
17
|
|
|
2
|
|
|||||
Purchase obligations
|
33
|
|
|
19
|
|
|
11
|
|
|
3
|
|
|
—
|
|
|||||
Total debt, lease and purchase obligations
|
$
|
842
|
|
|
$
|
104
|
|
|
$
|
199
|
|
|
$
|
482
|
|
|
$
|
57
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
/s/ PricewaterhouseCoopers LLP
|
Atlanta, GA
|
February 25, 2019
|
|
For the Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
|
|
|
|
||||||
Recurring
|
$
|
1,254
|
|
|
$
|
1,145
|
|
|
$
|
1,135
|
|
Perpetual software licenses and hardware
|
340
|
|
|
429
|
|
|
600
|
|
|||
Consulting services
|
570
|
|
|
582
|
|
|
587
|
|
|||
Total revenue
|
2,164
|
|
|
2,156
|
|
|
2,322
|
|
|||
Cost of revenue
|
|
|
|
|
|
||||||
Recurring
|
374
|
|
|
304
|
|
|
271
|
|
|||
Perpetual software license and hardware
|
222
|
|
|
259
|
|
|
318
|
|
|||
Consulting services
|
542
|
|
|
569
|
|
|
544
|
|
|||
Total cost of revenue
|
1,138
|
|
|
1,132
|
|
|
1,133
|
|
|||
Gross profit
|
1,026
|
|
|
1,024
|
|
|
1,189
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
666
|
|
|
651
|
|
|
662
|
|
|||
Research and development expenses
|
317
|
|
|
305
|
|
|
212
|
|
|||
Impairment of goodwill and other assets
|
—
|
|
|
—
|
|
|
80
|
|
|||
Total operating expenses
|
983
|
|
|
956
|
|
|
954
|
|
|||
Income from operations
|
43
|
|
|
68
|
|
|
235
|
|
|||
Other expense, net
|
|
|
|
|
|
||||||
Interest expense
|
(22
|
)
|
|
(15
|
)
|
|
(12
|
)
|
|||
Interest income
|
14
|
|
|
11
|
|
|
6
|
|
|||
Other expense
|
(8
|
)
|
|
(6
|
)
|
|
(8
|
)
|
|||
Total other expense, net
|
(16
|
)
|
|
(10
|
)
|
|
(14
|
)
|
|||
Income before income taxes
|
27
|
|
|
58
|
|
|
221
|
|
|||
Income tax (benefit) expense
|
(3
|
)
|
|
125
|
|
|
96
|
|
|||
Net income (loss)
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
125
|
|
Net income (loss) per weighted average common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.95
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
||||||
Basic
|
119.2
|
|
|
125.8
|
|
|
129.7
|
|
|||
Diluted
|
121.2
|
|
|
125.8
|
|
|
131.5
|
|
|
For the Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
125
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(13
|
)
|
|
16
|
|
|
(7
|
)
|
|||
Derivatives:
|
|
|
|
|
|
||||||
Unrealized loss on derivatives, before tax
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||
Unrealized loss on derivatives, tax portion
|
1
|
|
|
—
|
|
|
—
|
|
|||
Unrealized loss on derivatives, net of tax
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||
Defined benefit plans:
|
|
|
|
|
|
||||||
Reclassification of loss to net income (loss)
|
5
|
|
|
4
|
|
|
3
|
|
|||
Defined benefit plan adjustment, before tax
|
(14
|
)
|
|
(6
|
)
|
|
(12
|
)
|
|||
Defined benefit plan adjustment, tax portion
|
1
|
|
|
1
|
|
|
3
|
|
|||
Defined benefit plan adjustment, net of tax
|
(8
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|||
Other comprehensive (loss) income
|
(27
|
)
|
|
15
|
|
|
(13
|
)
|
|||
Comprehensive income (loss)
|
$
|
3
|
|
|
$
|
(52
|
)
|
|
$
|
112
|
|
|
At December 31
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
715
|
|
|
$
|
1,089
|
|
Accounts receivable, net
|
588
|
|
|
554
|
|
||
Inventories
|
28
|
|
|
30
|
|
||
Other current assets
|
97
|
|
|
77
|
|
||
Total current assets
|
1,428
|
|
|
1,750
|
|
||
Property and equipment, net
|
295
|
|
|
162
|
|
||
Capitalized software, net
|
72
|
|
|
121
|
|
||
Goodwill
|
395
|
|
|
399
|
|
||
Acquired intangible assets, net
|
16
|
|
|
23
|
|
||
Deferred income taxes
|
67
|
|
|
57
|
|
||
Other assets
|
87
|
|
|
44
|
|
||
Total assets
|
$
|
2,360
|
|
|
$
|
2,556
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
19
|
|
|
$
|
60
|
|
Short-term borrowings
|
—
|
|
|
240
|
|
||
Accounts payable
|
141
|
|
|
74
|
|
||
Payroll and benefits liabilities
|
224
|
|
|
173
|
|
||
Deferred revenue
|
490
|
|
|
414
|
|
||
Other current liabilities
|
135
|
|
|
102
|
|
||
Total current liabilities
|
1,009
|
|
|
1,063
|
|
||
Long-term debt
|
478
|
|
|
478
|
|
||
Pension and other postemployment plan liabilities
|
113
|
|
|
109
|
|
||
Long-term deferred revenue
|
105
|
|
|
85
|
|
||
Deferred tax liabilities
|
3
|
|
|
4
|
|
||
Other liabilities
|
157
|
|
|
149
|
|
||
Total liabilities
|
1,865
|
|
|
1,888
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at December 31, 2018 and 2017, respectively
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 116.8 and 121.9 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
1,418
|
|
|
1,320
|
|
||
Accumulated deficit
|
(823
|
)
|
|
(579
|
)
|
||
Accumulated other comprehensive loss
|
(101
|
)
|
|
(74
|
)
|
||
Total stockholders’ equity
|
495
|
|
|
668
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,360
|
|
|
$
|
2,556
|
|
|
For the Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
125
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
130
|
|
|
138
|
|
|
128
|
|
|||
Stock-based compensation expense
|
65
|
|
|
68
|
|
|
62
|
|
|||
Deferred income taxes
|
(18
|
)
|
|
(34
|
)
|
|
(3
|
)
|
|||
Gain on investments
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Impairment of goodwill, acquired intangibles and other assets
|
—
|
|
|
—
|
|
|
80
|
|
|||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Receivables
|
(34
|
)
|
|
(6
|
)
|
|
40
|
|
|||
Inventories
|
2
|
|
|
3
|
|
|
14
|
|
|||
Account payables and accrued expenses
|
108
|
|
|
12
|
|
|
11
|
|
|||
Deferred revenue
|
115
|
|
|
115
|
|
|
1
|
|
|||
Other assets and liabilities
|
(34
|
)
|
|
95
|
|
|
(10
|
)
|
|||
Net cash provided by operating activities
|
364
|
|
|
324
|
|
|
446
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Expenditures for property and equipment
|
(153
|
)
|
|
(78
|
)
|
|
(53
|
)
|
|||
Additions to capitalized software
|
(7
|
)
|
|
(9
|
)
|
|
(65
|
)
|
|||
Proceeds from sales of property and equipment
|
—
|
|
|
—
|
|
|
5
|
|
|||
Proceeds from disposition of investments
|
—
|
|
|
—
|
|
|
2
|
|
|||
Proceeds from sale of business
|
—
|
|
|
—
|
|
|
92
|
|
|||
Business acquisitions and other investing activities, net
|
(3
|
)
|
|
(21
|
)
|
|
(16
|
)
|
|||
Net cash used in investing activities
|
(163
|
)
|
|
(108
|
)
|
|
(35
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Repayments of long-term borrowings
|
(40
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|||
Proceeds from credit facility borrowings
|
—
|
|
|
420
|
|
|
—
|
|
|||
Repayments of credit-facility borrowings
|
(240
|
)
|
|
(180
|
)
|
|
(180
|
)
|
|||
Repurchases of common stock
|
(300
|
)
|
|
(351
|
)
|
|
(82
|
)
|
|||
Payments of capital leases
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities, net
|
31
|
|
|
32
|
|
|
30
|
|
|||
Net cash used in financing activities
|
(554
|
)
|
|
(109
|
)
|
|
(262
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(20
|
)
|
|
8
|
|
|
(14
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
(373
|
)
|
|
115
|
|
|
135
|
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
1,089
|
|
|
974
|
|
|
839
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
716
|
|
|
$
|
1,089
|
|
|
$
|
974
|
|
Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
715
|
|
|
$
|
1,089
|
|
|
$
|
974
|
|
Restricted cash
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
716
|
|
|
$
|
1,089
|
|
|
$
|
974
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Assets acquired by capital lease
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid during the year for:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
33
|
|
|
$
|
25
|
|
|
$
|
105
|
|
Interest
|
$
|
23
|
|
|
$
|
14
|
|
|
$
|
12
|
|
|
Common Stock
|
|
Paid-in
|
|
Retained Earnings (Accumulated
|
|
Accumulated Other Comprehensive
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit)
|
|
Income (Loss)
|
|
Total
|
|||||||||||
December 31, 2015
|
131
|
|
|
$
|
1
|
|
|
$
|
1,128
|
|
|
$
|
(204
|
)
|
|
$
|
(76
|
)
|
|
$
|
849
|
|
Net income
|
|
|
|
|
|
|
125
|
|
|
|
|
125
|
|
|||||||||
Employee stock compensation, employee stock purchase programs and option exercises
|
3
|
|
|
|
|
92
|
|
|
|
|
|
|
92
|
|
||||||||
Repurchases of common stock, retired
|
(3
|
)
|
|
|
|
|
|
(82
|
)
|
|
|
|
(82
|
)
|
||||||||
Pension and postemployment benefit plans, net of tax
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
(6
|
)
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||||||
December 31, 2016
|
131
|
|
|
$
|
1
|
|
|
$
|
1,220
|
|
|
$
|
(161
|
)
|
|
$
|
(89
|
)
|
|
$
|
971
|
|
Net loss
|
|
|
|
|
|
|
(67
|
)
|
|
|
|
(67
|
)
|
|||||||||
Employee stock compensation, employee stock purchase programs and option exercises
|
2
|
|
|
|
|
100
|
|
|
|
|
|
|
100
|
|
||||||||
Repurchases of common stock, retired
|
(11
|
)
|
|
|
|
|
|
(351
|
)
|
|
|
|
(351
|
)
|
||||||||
Pension and postemployment benefit plans, net of tax
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
16
|
|
|
16
|
|
|||||||||
December 31, 2017
|
122
|
|
|
$
|
1
|
|
|
$
|
1,320
|
|
|
$
|
(579
|
)
|
|
$
|
(74
|
)
|
|
$
|
668
|
|
Net income
|
|
|
|
|
|
|
30
|
|
|
|
|
30
|
|
|||||||||
Employee stock compensation, employee stock purchase programs and option exercises
|
2
|
|
|
|
|
98
|
|
|
|
|
|
|
98
|
|
||||||||
Repurchases of common stock, retired
|
(7
|
)
|
|
|
|
|
|
(300
|
)
|
|
|
|
(300
|
)
|
||||||||
Pension and postemployment benefit plans, net of tax
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||||||
Unrealized loss on derivatives, net of tax
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
(6
|
)
|
|||||||||
Adoption of Topic 606 (See Note 3)
|
|
|
|
|
|
|
26
|
|
|
|
|
26
|
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||||
December 31, 2018
|
117
|
|
|
$
|
1
|
|
|
$
|
1,418
|
|
|
$
|
(823
|
)
|
|
$
|
(101
|
)
|
|
$
|
495
|
|
1.
|
identify the contract with a customer,
|
2.
|
identify the performance obligations in the contract,
|
3.
|
determine the transaction price,
|
4.
|
allocate the transaction price to the performance obligations in the contract, and
|
5.
|
recognize revenue when (or as) the Company satisfies a performance obligation.
|
•
|
Subscriptions
- The Company sells on and off-premises subscriptions to our customers through our subscription licenses, cloud, service model, and hardware 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
|
•
|
Maintenance and software upgrade rights
- Revenue for maintenance and unspecified software upgrade rights on a when-and-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).
|
•
|
Consulting services
- 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. Revenue for consulting, implementation and installation services is recognized as services are provided by measuring progress toward the complete satisfaction of the Company’s obligation. Progress for services that are contracted for at a fixed price is generally measured based on hours incurred as a portion of total estimated hours. Progress for services that are contracted for on a time and materials basis is generally based on hours expended. These input methods (
e.g.
hours incurred or expended) of revenue recognition are considered a faithful depiction of our efforts to satisfy services contracts and therefore reflect the transfer of services to a customer under such contracts.
|
•
|
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.
|
•
|
Persuasive evidence of an arrangement exists
|
•
|
The offerings or services have been delivered to the customer
|
•
|
The sales price is fixed or determinable and free of contingencies or significant uncertainties
|
•
|
Collectibility is reasonably assured
|
•
|
Subscription license - revenue for these arrangements is typically recognized ratably over the contract term.
|
•
|
Cloud and service model - revenue for these arrangements are recognized outside the software rules and revenue is recognized ratably over the contract term.
|
•
|
Rentals - revenue for these arrangements is generally recognized straight-line over the term of the contract and are generally accounted for as operating leases.
|
•
|
Perpetual software and hardware - revenue is generally recognized upon delivery once title and risk of loss have been transferred.
|
•
|
Unspecified software upgrades - revenue is recognized straight-line over the term of the arrangement.
|
•
|
Maintenance support services - revenue is recognized on a straight-line basis over the term of the contract.
|
•
|
Consulting, implementation and installation services - revenue is recognized as services are provided. In certain instances, acceptance of the product or service is specified by the customer. In such cases, revenue is deferred until the acceptance criteria have been met. Delivery and acceptance generally occur in the same reporting period.
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation expense
|
$
|
67
|
|
|
$
|
55
|
|
|
$
|
49
|
|
|
Internal-use Software
|
|
External-use Software
|
||||||||||||||||||||
In millions
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Beginning balance at January 1
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
105
|
|
|
$
|
174
|
|
|
$
|
177
|
|
Capitalized
|
6
|
|
|
9
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||||
Amortization
|
(7
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(48
|
)
|
|
(69
|
)
|
|
(62
|
)
|
||||||
Ending balance at December 31
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
57
|
|
|
$
|
105
|
|
|
$
|
174
|
|
|
Actual
|
|
For the years ended (estimated)
|
||||||||||||||||||||
In millions
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||||
Internal-use software amortization expense
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
6
|
|
External-use software amortization expense
|
$
|
48
|
|
|
$
|
34
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In millions, except earnings (loss) per share
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) attributable to common stockholders
|
$
|
30
|
|
|
$
|
(67
|
)
|
|
$
|
125
|
|
Weighted average outstanding shares of common stock
|
119.2
|
|
|
125.8
|
|
|
129.7
|
|
|||
Dilutive effect of employee stock options, restricted shares and other stock awards
|
2.0
|
|
|
—
|
|
|
1.8
|
|
|||
Common stock and common stock equivalents
|
121.2
|
|
|
125.8
|
|
|
131.5
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
(0.53
|
)
|
|
$
|
0.95
|
|
|
At December 31
|
||||||
In millions
|
2018
|
|
2017
|
||||
Accounts receivable
|
|
|
|
||||
Trade
|
$
|
590
|
|
|
$
|
559
|
|
Other
|
12
|
|
|
7
|
|
||
Accounts receivable, gross
|
602
|
|
|
566
|
|
||
Less: allowance for doubtful accounts
|
(14
|
)
|
|
(12
|
)
|
||
Total accounts receivable, net
|
$
|
588
|
|
|
$
|
554
|
|
Inventories
|
|
|
|
||||
Finished goods
|
$
|
16
|
|
|
$
|
18
|
|
Service parts
|
12
|
|
|
12
|
|
||
Total inventories
|
$
|
28
|
|
|
$
|
30
|
|
Property and equipment
|
|
|
|
||||
Land
|
$
|
8
|
|
|
$
|
8
|
|
Buildings and improvements
|
84
|
|
|
82
|
|
||
Capital lease assets
|
52
|
|
|
—
|
|
||
Machinery and other equipment
|
495
|
|
|
404
|
|
||
Property and equipment, gross
|
639
|
|
|
494
|
|
||
Less: accumulated depreciation
|
(344
|
)
|
|
(332
|
)
|
||
Total property and equipment, net
|
$
|
295
|
|
|
$
|
162
|
|
Other current liabilities
|
|
|
|
||||
Sales and value-added taxes
|
$
|
34
|
|
|
$
|
30
|
|
Pension and other postemployment plan liabilities
|
10
|
|
|
9
|
|
||
Capital lease obligations - current portion
|
17
|
|
|
—
|
|
||
Other
|
74
|
|
|
63
|
|
||
Total other current liabilities
|
$
|
135
|
|
|
$
|
102
|
|
Deferred revenue
|
|
|
|
||||
Deferred revenue, current
|
$
|
490
|
|
|
$
|
414
|
|
Long-term deferred revenue
|
105
|
|
|
85
|
|
||
Total deferred revenue
|
$
|
595
|
|
|
$
|
499
|
|
Other long-term liabilities
|
|
|
|
||||
Transition tax
|
$
|
102
|
|
|
$
|
133
|
|
Capital lease obligations
|
30
|
|
|
—
|
|
||
Uncertain tax positions
|
17
|
|
|
14
|
|
||
Other
|
8
|
|
|
2
|
|
||
Total other long-term liabilities
|
$
|
157
|
|
|
$
|
149
|
|
|
|
|
|
In millions
|
2018
|
|
2017*
|
|
2016*
|
||||||
Americas
|
|
|
|
|
|
||||||
Recurring
|
$
|
801
|
|
|
$
|
739
|
|
|
$
|
703
|
|
Perpetual software licenses and hardware
|
127
|
|
|
234
|
|
|
369
|
|
|||
Consulting services
|
198
|
|
|
222
|
|
|
262
|
|
|||
Total Americas
|
1,126
|
|
|
1,195
|
|
|
1,334
|
|
|||
International
|
|
|
|
|
|
||||||
Recurring
|
453
|
|
|
406
|
|
|
368
|
|
|||
Perpetual software licenses and hardware
|
213
|
|
|
195
|
|
|
231
|
|
|||
Consulting services
|
372
|
|
|
360
|
|
|
320
|
|
|||
Total International
|
1,038
|
|
|
961
|
|
|
919
|
|
|||
Marketing applications
|
—
|
|
|
—
|
|
|
69
|
|
|||
Total Revenue
|
$
|
2,164
|
|
|
$
|
2,156
|
|
|
$
|
2,322
|
|
In millions
|
December 31, 2018
|
|
January 1, 2018
(as adjusted)
|
||||
Accounts receivable, net
|
$
|
588
|
|
|
$
|
534
|
|
Contract assets
|
$
|
14
|
|
|
$
|
20
|
|
Current deferred revenue
|
$
|
490
|
|
|
$
|
395
|
|
Long-term deferred revenue
|
$
|
105
|
|
|
$
|
85
|
|
In millions
|
|
Total at December 31, 2018
|
|
Year 1
|
|
Year 2 and Thereafter
|
||||||
Remaining unsatisfied obligations
|
|
$
|
2,547
|
|
|
$
|
1,200
|
|
|
$
|
1,347
|
|
•
|
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
$15 million
for the twelve months ended December 31, 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
$37 million
less selling, general and administrative expenses for the twelve months ended December 31, 2018 under Topic 606.
|
•
|
Because of higher revenue and the capitalization of contract costs under Topic 606, net income reported under Topic 606 was higher by
$33 million
or
$0.27
per share for the twelve months ended December 31, 2018.
|
•
|
Total reported assets at December 31, 2018 were
$43 million
higher under Topic 606, which includes
$54 million
of capitalized contract costs that were expensed as incurred under the previous guidance, partially offset by
$11 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
$16 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, offset by the change in deferred tax liability.
|
In millions
|
|
January 1, 2018
|
|
Capitalized
|
|
Amortization
|
|
December 31, 2018
|
||||
Capitalized contract costs
|
|
17
|
|
|
44
|
|
|
(7
|
)
|
|
54
|
|
In millions
|
Balance at December 31, 2017
|
|
Additions
|
|
Currency
Translation Adjustments |
|
Balance at December 31, 2018
|
||||||||
Goodwill
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
253
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
253
|
|
International
|
146
|
|
|
—
|
|
|
(4
|
)
|
|
142
|
|
||||
Total goodwill
|
$
|
399
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
395
|
|
|
|
|
December 31, 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
|
1 to 7
|
|
$
|
35
|
|
|
$
|
(20
|
)
|
|
$
|
43
|
|
|
$
|
(20
|
)
|
|
Actual
|
|
For the years ended (estimated)
|
||||||||||||||||||||||||||
In millions
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
|
||||||||||||||
Amortization expense
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
(79
|
)
|
|
$
|
(26
|
)
|
|
$
|
93
|
|
Foreign
|
106
|
|
|
84
|
|
|
128
|
|
|||
Total income before income taxes
|
$
|
27
|
|
|
$
|
58
|
|
|
$
|
221
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax (benefit) expense
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(10
|
)
|
|
$
|
132
|
|
|
$
|
67
|
|
State and local
|
6
|
|
|
2
|
|
|
7
|
|
|||
Foreign
|
19
|
|
|
25
|
|
|
25
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(20
|
)
|
|
(22
|
)
|
|
7
|
|
|||
State and local
|
(4
|
)
|
|
(4
|
)
|
|
1
|
|
|||
Foreign
|
6
|
|
|
(8
|
)
|
|
(11
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(3
|
)
|
|
$
|
125
|
|
|
$
|
96
|
|
Effective income tax rate
|
(11.1
|
%)
|
|
215.5
|
%
|
|
43.4
|
%
|
In millions
|
2018
|
|
2017
|
|
2016
|
|||
Income tax expense at the U.S. federal tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Foreign income tax differential
|
2.1
|
%
|
|
(22.6
|
)%
|
|
(14.0
|
)%
|
U.S. tax on foreign earnings
|
2.0
|
%
|
|
4.3
|
%
|
|
0.9
|
%
|
State and local income taxes
|
(25.0
|
)%
|
|
(11.0
|
)%
|
|
0.2
|
%
|
U.S. permanent book/tax differences
|
(2.7
|
)%
|
|
(1.5
|
)%
|
|
1.3
|
%
|
U.S. research and development tax credits
|
(29.5
|
)%
|
|
(11.2
|
)%
|
|
(1.6
|
)%
|
Change in valuation allowance
|
27.7
|
%
|
|
10.0
|
%
|
|
0.8
|
%
|
U.S. manufacturing deduction permanent difference
|
—
|
%
|
|
(8.0
|
)%
|
|
(3.5
|
)%
|
Goodwill impairment
|
—
|
%
|
|
—
|
%
|
|
8.9
|
%
|
Tax impact of sale of marketing applications business
|
—
|
%
|
|
—
|
%
|
|
9.9
|
%
|
Tax impact of equity compensation
|
(1.4
|
)%
|
|
0.7
|
%
|
|
2.4
|
%
|
Tax impact of U.S. tax law change - IRC Section 987
|
—
|
%
|
|
—
|
%
|
|
3.5
|
%
|
Deferred tax impact from U.S. rate change from Tax Reform
|
—
|
%
|
|
(27.0
|
)%
|
|
—
|
%
|
Tax impact of U.S. Tax Reform/ Transition Tax
|
(23.9
|
)%
|
|
250.0
|
%
|
|
—
|
%
|
Tax Impact of uncertain tax positions
|
20.2
|
%
|
|
(3.6
|
)%
|
|
(0.6
|
)%
|
Other, net
|
(1.6
|
)%
|
|
0.4
|
%
|
|
0.2
|
%
|
Effective income tax rate
|
(11.1
|
)%
|
|
215.5
|
%
|
|
43.4
|
%
|
In millions
|
2018
|
|
2017
|
||||
Deferred income tax assets
|
|
|
|
||||
Employee pensions and other liabilities
|
$
|
49
|
|
|
$
|
50
|
|
Other balance sheet reserves and allowances
|
18
|
|
|
13
|
|
||
Tax loss and credit carryforwards
|
63
|
|
|
59
|
|
||
Deferred revenue
|
20
|
|
|
3
|
|
||
Other
|
—
|
|
|
2
|
|
||
Total deferred income tax assets
|
150
|
|
|
127
|
|
||
Valuation allowance
|
(39
|
)
|
|
(32
|
)
|
||
Net deferred income tax assets
|
111
|
|
|
95
|
|
||
Deferred income tax liabilities
|
|
|
|
||||
Intangibles and capitalized software
|
17
|
|
|
30
|
|
||
Property and equipment
|
11
|
|
|
12
|
|
||
Other
|
19
|
|
|
—
|
|
||
Total deferred income tax liabilities
|
47
|
|
|
42
|
|
||
Total net deferred income tax assets
|
$
|
64
|
|
|
$
|
53
|
|
In millions
|
2018
|
|
2017
|
||||
Balance at January 1
|
$
|
28
|
|
|
$
|
30
|
|
Gross decreases for prior period tax positions
|
—
|
|
|
(1
|
)
|
||
Gross increases for prior period tax positions
|
3
|
|
|
—
|
|
||
Gross increases for current period tax positions
|
8
|
|
|
3
|
|
||
Decreases due to the lapse of applicable statute of limitations
|
(1
|
)
|
|
(4
|
)
|
||
Decreases relating to settlements with taxing authorities
|
(4
|
)
|
|
—
|
|
||
Balance at December 31
|
$
|
34
|
|
|
$
|
28
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Restricted shares
|
56
|
|
|
56
|
|
|
51
|
|
|||
Employee share repurchase program
|
3
|
|
|
3
|
|
|
2
|
|
|||
Total stock-based compensation before income taxes
|
65
|
|
|
68
|
|
|
62
|
|
|||
Tax benefit
|
(11
|
)
|
|
(21
|
)
|
|
(13
|
)
|
|||
Total stock-based compensation, net of tax
|
$
|
54
|
|
|
$
|
47
|
|
|
$
|
49
|
|
|
|
2017
|
|
2016
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
Risk-free interest rate
|
|
1.99
|
%
|
|
2.08
|
%
|
Expected volatility
|
|
35.0
|
%
|
|
35.2
|
%
|
Expected term (years)
|
|
6.3
|
|
|
6.3
|
|
Shares in thousands
|
Shares
Under
Option
|
|
Weighted-
Average
Exercise
Price per
Share
|
|
Weighted-
Average
Remaining
Contractual
Term (in
years)
|
|
Aggregate
Intrinsic
Value (in
millions)
|
|||||
Outstanding at January 1, 2018
|
5,373
|
|
|
$
|
37.63
|
|
|
4.5
|
|
$
|
30
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(885
|
)
|
|
$
|
23.69
|
|
|
|
|
|
||
Canceled
|
(207
|
)
|
|
$
|
47.79
|
|
|
|
|
|
||
Forfeited
|
(133
|
)
|
|
$
|
30.12
|
|
|
|
|
|
||
Outstanding at December 31, 2018
|
4,148
|
|
|
$
|
40.34
|
|
|
3.8
|
|
$
|
15
|
|
Fully vested and expected to vest at December 31, 2018
|
4,148
|
|
|
$
|
40.34
|
|
|
3.8
|
|
$
|
15
|
|
Exercisable at December 31, 2018
|
3,608
|
|
|
$
|
42.05
|
|
|
3.2
|
|
$
|
10
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Intrinsic value of options exercised
|
$
|
15
|
|
|
$
|
6
|
|
|
$
|
13
|
|
Cash received from option exercises
|
$
|
21
|
|
|
$
|
19
|
|
|
$
|
18
|
|
Tax benefit realized from option exercises
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
5
|
|
Shares in thousands
|
Number of
Shares
|
|
Weighted-
Average
Grant
Date Fair
Value
per Share
|
|||
Unvested shares at January 1, 2018
|
4,226
|
|
|
$
|
32.76
|
|
Granted
|
994
|
|
|
$
|
37.98
|
|
Vested
|
(1,636
|
)
|
|
$
|
37.86
|
|
Forfeited/canceled
|
(353
|
)
|
|
$
|
34.44
|
|
Unvested shares at December 31, 2018
|
3,231
|
|
|
$
|
34.27
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted-average fair value of restricted share units granted
|
$
|
37.98
|
|
|
$
|
34.88
|
|
|
$
|
26.61
|
|
Total fair value of shares vested (in millions)
|
$
|
53
|
|
|
$
|
50
|
|
|
$
|
61
|
|
Shares in thousands
|
Number of
Shares
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|||
Service-based shares
|
482
|
|
|
$
|
39.32
|
|
Performance-based shares
|
512
|
|
|
$
|
36.62
|
|
Total stock grants
|
994
|
|
|
$
|
37.98
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Employee share purchases
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|||
Aggregate cost
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
13
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
In millions
|
Pension
|
|
Postemployment
|
|
Pension
|
|
Postemployment
|
|
Pension
|
|
Postemployment
|
||||||||||||
Service cost
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
6
|
|
Interest cost
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
||||||
Expected return on plan assets
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
Settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Curtailment charge
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
1
|
|
|
4
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||||
Amortization of prior service (credit) cost
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
2
|
|
||||||
Divestiture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Total costs
|
$
|
9
|
|
|
$
|
13
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
Pension
|
|
Postemployment
|
||||||||||||
In millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at January 1
|
$
|
136
|
|
|
$
|
120
|
|
|
$
|
47
|
|
|
$
|
42
|
|
Service cost
|
8
|
|
|
9
|
|
|
8
|
|
|
7
|
|
||||
Interest cost
|
3
|
|
|
3
|
|
|
1
|
|
|
1
|
|
||||
Plan participant contributions
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain) loss
|
(5
|
)
|
|
(3
|
)
|
|
12
|
|
|
12
|
|
||||
Benefits paid
|
(2
|
)
|
|
(4
|
)
|
|
(14
|
)
|
|
(15
|
)
|
||||
Curtailment
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation adjustments
|
(4
|
)
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at December 31
|
$
|
132
|
|
|
$
|
136
|
|
|
$
|
54
|
|
|
$
|
47
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at January 1
|
$
|
75
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
(2
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(2
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Currency translation adjustments
|
(1
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Plan participant contribution
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at December 31
|
68
|
|
|
75
|
|
|
—
|
|
|
—
|
|
||||
Funded status (underfunded)
|
$
|
(64
|
)
|
|
$
|
(61
|
)
|
|
$
|
(54
|
)
|
|
$
|
(47
|
)
|
Amounts Recognized in the Consolidated Balance Sheet
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(1
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|
(7
|
)
|
||||
Non-current liabilities
|
(68
|
)
|
|
(69
|
)
|
|
(45
|
)
|
|
(40
|
)
|
||||
Net amounts recognized
|
$
|
(64
|
)
|
|
$
|
(61
|
)
|
|
$
|
(54
|
)
|
|
$
|
(47
|
)
|
Amounts Recognized in Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Unrecognized Net actuarial loss
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
44
|
|
|
$
|
37
|
|
Unrecognized Prior service (credit) cost
|
—
|
|
|
(1
|
)
|
|
3
|
|
|
3
|
|
||||
Total
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
47
|
|
|
$
|
40
|
|
In millions
|
2018
|
|
2017
|
||||
Accumulated pension benefit obligation
|
$
|
122
|
|
|
$
|
125
|
|
In millions
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
$
|
68
|
|
|
$
|
69
|
|
Accumulated benefit obligation
|
$
|
61
|
|
|
$
|
63
|
|
Fair value of plan assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension
|
|
Postemployment
|
||||||||||||
In millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Actuarial (gain) loss arising during the year
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
$
|
12
|
|
|
$
|
13
|
|
Amortization of loss included in net periodic benefit cost
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(2
|
)
|
||||
Prior service (credit) cost arising during the year
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Recognition of gain due to curtailment
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency exchange
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Total recognized in other comprehensive (loss) income
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
8
|
|
|
$
|
10
|
|
In millions
|
Pension
|
|
Postemployment
|
||||
Net loss to be recognized in other comprehensive income
|
$
|
1
|
|
|
$
|
5
|
|
|
Pension Benefit Obligations
|
|
Pension Benefit Cost
|
||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2016
|
Discount rate
|
2.2%
|
|
2.1%
|
|
2.1%
|
|
2.0%
|
|
2.4%
|
Rate of compensation increase
|
3.4%
|
|
3.3%
|
|
3.3%
|
|
3.3%
|
|
3.2%
|
Expected return on plan assets
|
N/A
|
|
N/A
|
|
2.8%
|
|
2.9%
|
|
3.0%
|
|
Postemployment
Benefit Obligations
|
|
Postemployment
Benefit Cost
|
||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2016
|
Discount rate
|
2.5%
|
|
2.6%
|
|
2.5%
|
|
2.6%
|
|
3.4%
|
Rate of compensation increase
|
3.0%
|
|
3.0%
|
|
3.0%
|
|
3.0%
|
|
3.0%
|
Involuntary turnover rate
|
2.5%
|
|
2.3%
|
|
2.5%
|
|
2.3%
|
|
2.0%
|
|
Actual Asset Allocation
as of December 31
|
|
Target Asset
|
||
|
2018
|
|
2017
|
|
Allocation
|
Equity securities
|
32%
|
|
32%
|
|
32%
|
Debt securities
|
51%
|
|
41%
|
|
50%
|
Insurance (annuity) contracts
|
12%
|
|
17%
|
|
12%
|
Real-estate
|
3%
|
|
8%
|
|
3%
|
Other
|
2%
|
|
2%
|
|
3%
|
Total
|
100%
|
|
100%
|
|
100%
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
|
|
Quoted Prices in Active Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
In millions
|
December 31, 2018
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Money market funds
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Equity funds
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Bond/fixed-income funds
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Real-estate indirect investments
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Insurance contracts
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Total assets at fair value
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
8
|
|
In millions
|
Insurance
Contracts
|
||
Balance as of January 1, 2018
|
$
|
12
|
|
Purchases, sales and settlements, net
|
(4
|
)
|
|
Balance as of December 31, 2018
|
$
|
8
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
|
|
Quoted Prices in Active
Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
In millions
|
December 31, 2017
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Money market funds
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Equity funds
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Bond/fixed-income funds
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
Real-estate indirect investments
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Insurance contracts
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Total assets at fair value
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
12
|
|
In millions
|
Insurance
Contracts
|
||
Balance as of January 1, 2017
|
$
|
11
|
|
Purchases, sales and settlements, net
|
1
|
|
|
December 31, 2017
|
$
|
12
|
|
|
Pension
|
|
Postemployment
|
||||
In millions
|
Benefits
|
|
Benefits
|
||||
Year
|
|
|
|
||||
2019
|
$
|
3
|
|
|
$
|
9
|
|
2020
|
$
|
4
|
|
|
$
|
9
|
|
2021
|
$
|
5
|
|
|
$
|
9
|
|
2022
|
$
|
5
|
|
|
$
|
9
|
|
2023
|
$
|
5
|
|
|
$
|
9
|
|
2024 - 2028
|
$
|
31
|
|
|
$
|
44
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. savings plan
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
19
|
|
International subsidiary savings plans
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
16
|
|
In millions
|
2018
|
|
2017
|
||||
Contract notional amount of foreign exchange forward contracts
|
$
|
256
|
|
|
$
|
147
|
|
Net contract notional amount of foreign exchange forward contracts
|
$
|
35
|
|
|
$
|
23
|
|
Contract notional amount of interest rate swap
|
$
|
500
|
|
|
$
|
—
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance at January 1
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
6
|
|
Accruals for warranties issued
|
5
|
|
|
6
|
|
|
8
|
|
|||
Settlements (in cash or kind)
|
(6
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Balance at end of period
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In millions
|
Total Amounts
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2022 and Thereafter
|
||||||||||||
Operating lease obligations
|
$
|
73
|
|
|
$
|
24
|
|
|
$
|
20
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
6
|
|
Sublease rentals
|
(10
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total committed operating leases less sublease rentals
|
$
|
63
|
|
|
$
|
18
|
|
|
$
|
16
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
6
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Rental expense
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
Sublease rental income
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
|
|
Quoted Prices
in Active Markets
for Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant Unobservable Inputs
|
||||||||
In millions
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds at December 31, 2018
|
$
|
246
|
|
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds at December 31, 2017
|
$
|
501
|
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap at December 31, 2018
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
In millions
|
|
||
2019
|
$
|
19
|
|
2020
|
18
|
|
|
2021
|
13
|
|
|
Total
|
50
|
|
|
Amount representing interest
|
(3
|
)
|
|
Present value of minimum lease payments
|
$
|
47
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Interest expense on term loan and credit facility
|
$
|
21
|
|
|
$
|
15
|
|
|
$
|
12
|
|
Interest expense on capital leases
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Segment revenue
|
|
|
|
|
|
||||||
Americas
|
$
|
1,126
|
|
|
$
|
1,195
|
|
|
$
|
1,334
|
|
International
|
1,038
|
|
|
961
|
|
|
919
|
|
|||
Total Data and Analytics
|
2,164
|
|
|
2,156
|
|
|
2,253
|
|
|||
Marketing Applications
|
—
|
|
|
—
|
|
|
69
|
|
|||
Total revenue
|
2,164
|
|
|
2,156
|
|
|
2,322
|
|
|||
Segment gross profit
|
|
|
|
|
|
||||||
Americas
|
621
|
|
|
675
|
|
|
797
|
|
|||
International
|
474
|
|
|
437
|
|
|
445
|
|
|||
Total Data and Analytics
|
1,095
|
|
|
1,112
|
|
|
1,242
|
|
|||
Marketing Application
|
—
|
|
|
—
|
|
|
34
|
|
|||
Total segment gross profit
|
1,095
|
|
|
1,112
|
|
|
1,276
|
|
|||
Stock-based compensation expense
|
15
|
|
|
13
|
|
|
14
|
|
|||
Amortization of acquisition-related intangible assets
|
—
|
|
|
—
|
|
|
2
|
|
|||
Acquisition, integration and reorganization-related costs
|
5
|
|
|
4
|
|
|
9
|
|
|||
Amortization of capitalized software costs
|
49
|
|
|
71
|
|
|
62
|
|
|||
Selling, general and administrative expenses
|
666
|
|
|
651
|
|
|
662
|
|
|||
Research and development expenses
|
317
|
|
|
305
|
|
|
212
|
|
|||
Impairment of goodwill, acquired intangibles and other assets
|
—
|
|
|
—
|
|
|
80
|
|
|||
Total income from operations
|
$
|
43
|
|
|
$
|
68
|
|
|
$
|
235
|
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
1,018
|
|
|
$
|
1,089
|
|
|
$
|
1,246
|
|
Americas (excluding United States)
|
108
|
|
|
107
|
|
|
123
|
|
|||
International
|
1,038
|
|
|
960
|
|
|
953
|
|
|||
Total revenue
|
$
|
2,164
|
|
|
$
|
2,156
|
|
|
$
|
2,322
|
|
In millions
|
2018
|
|
2017
|
||||
United States
|
$
|
226
|
|
|
$
|
119
|
|
Americas (excluding United States)
|
18
|
|
|
11
|
|
||
International
|
51
|
|
|
32
|
|
||
Property and equipment, net
|
$
|
295
|
|
|
$
|
162
|
|
In millions
|
Derivatives
|
|
Defined
benefit
plans
|
|
Foreign
currency
translation
adjustments
|
|
Total
AOCI
|
||||||||
Balance as of December 31, 2015
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
(47
|
)
|
|
$
|
(76
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(9
|
)
|
|
(7
|
)
|
|
(16
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Net other comprehensive loss
|
—
|
|
|
(6
|
)
|
|
(7
|
)
|
|
(13
|
)
|
||||
Balance as of December 31, 2016
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
$
|
(54
|
)
|
|
$
|
(89
|
)
|
Other comprehensive (loss) income before reclassifications
|
—
|
|
|
(5
|
)
|
|
16
|
|
|
11
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Net other comprehensive (loss) income
|
—
|
|
|
(1
|
)
|
|
16
|
|
|
15
|
|
||||
Balance as of December 31, 2017
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
(38
|
)
|
|
$
|
(74
|
)
|
Other comprehensive loss before reclassifications
|
(6
|
)
|
|
(13
|
)
|
|
(13
|
)
|
|
(32
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Net other comprehensive loss
|
(6
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|
(27
|
)
|
||||
Balance as of December 31, 2018
|
$
|
(6
|
)
|
|
$
|
(44
|
)
|
|
$
|
(51
|
)
|
|
$
|
(101
|
)
|
In millions
|
|
|
|
|
||||||||||
AOCI Component
|
|
Location
|
|
2018
|
|
2017
|
|
2016
|
||||||
Other Expense
|
|
Other Expense
|
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|||
Tax portion
|
|
Income tax benefit
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Total reclassifications
|
|
Net (loss) income
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
•
|
$21 to $26 million
for employee severance and other employee-related costs,
|
•
|
$6 to $8 million
of accelerated depreciation for right-to-use assets under ASC 842, and
|
•
|
$8 to $11 million
for outside service, legal and other associated costs.
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Employee severance and other employee related cost
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
14
|
|
Asset write-downs
|
|
—
|
|
|
—
|
|
|
80
|
|
|||
Professional services, legal and other associated cost
|
|
—
|
|
|
24
|
|
|
35
|
|
|||
Employee severance and other employee-related costs related to headquarter transition and business transformation
|
|
14
|
|
|
—
|
|
|
—
|
|
|||
Transition support and other exit related costs for the headquarter transition and business transformation
|
|
9
|
|
|
—
|
|
|
—
|
|
|||
Total reorganization and business transformation cost
|
|
$
|
23
|
|
|
$
|
26
|
|
|
$
|
129
|
|
In millions, except per share amounts
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
(1)
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
506
|
|
|
$
|
544
|
|
|
$
|
526
|
|
|
$
|
588
|
|
Gross profit
|
$
|
223
|
|
|
$
|
250
|
|
|
$
|
264
|
|
|
$
|
289
|
|
Operating (loss) income
|
$
|
(4
|
)
|
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
23
|
|
Net (loss) income
|
$
|
(7
|
)
|
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
15
|
|
Net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.06
|
)
|
|
$
|
0.03
|
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
(0.06
|
)
|
|
$
|
0.03
|
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
2017
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
491
|
|
|
$
|
513
|
|
|
$
|
526
|
|
|
$
|
626
|
|
Gross profit
|
$
|
225
|
|
|
$
|
242
|
|
|
$
|
250
|
|
|
$
|
307
|
|
Operating (loss) income
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
9
|
|
|
$
|
60
|
|
Net (loss) income
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
13
|
|
|
$
|
(74
|
)
|
Net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.61
|
)
|
Diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.61
|
)
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Index
|
|
|
Reference
Number per Item
601 of
Regulation S-K
|
|
Description
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statement of Income (Loss) for the twelve month periods ended December 31, 2018, 2017 and 2016, (ii) the Consolidated Statement of Comprehensive Income (Loss) for the twelve month periods ended December 31, 2018, 2017 and 2016, (iii) the Consolidated Balance Sheets at December 31, 2018 and 2017, (iv) the Consolidated Statement of Cash Flows for the twelve month periods ended December 31, 2018, 2017 and 2016, (v) the Consolidated Statement of Changes in Stockholders’ Equity for the twelve month periods ended December 31, 2018, 2017 and 2016, (vi) Financial Statement Schedule II, and (vii) the notes to the Consolidated Financial Statements.
|
*
|
Management contracts or compensatory plans, contracts or arrangements.
|
**
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission.
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
Description
|
|
Balance at
Beginning
of Period
|
|
Provision/reversals
Charged
to Costs &
Expenses
|
|
Charged
to Other
Accounts
|
|
Deductions
|
|
Balance
at End of
Period
|
||||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2018
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Year ended December 31, 2017
|
|
$
|
19
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
12
|
|
Year ended December 31, 2016*
|
|
$
|
22
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
19
|
|
Deferred tax valuation allowance
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2018
|
|
$
|
32
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Year ended December 31, 2017
|
|
$
|
26
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32
|
|
Year ended December 31, 2016
|
|
$
|
25
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Item 16.
|
FORM 10-K SUMMARY
|
|
|
|
|
|
|
|
TERADATA CORPORATION
|
||
|
|
|
||
Date: March 1, 2019
|
|
By:
|
|
/s/ Mark A. Culhane
|
|
|
|
|
Mark A. Culhane
|
|
|
|
|
Chief Financial Officer
|
▪
|
You will receive 48 weeks of separation pay in a lump sum, subject to applicable tax withholdings
|
▪
|
You will be eligible for your 2018 annual bonus (prorated based upon your departure date and subject to plan guidelines)
|
▪
|
Unvested equity, including outstanding time-based restricted share units and any stock options you have received, will be fully vested as of your departure date
|
▪
|
Benefits – You will receive twenty-six (26) weeks of subsidized COBRA
|
▪
|
Outplacement -You will receive two (2) months of outplacement services with RiseSmart
|
(a)
|
withholding from any wages or other cash compensation paid to you by Teradata and/or the Employer;
|
(b)
|
withholding otherwise deliverable Shares to be issued upon vesting/settlement of the Share Units; or
|
(c)
|
withholding from the proceeds of the sale of Shares acquired upon vesting/settlement of the Share Units either through a voluntary sale or through a mandatory sale arranged by Teradata (on your behalf pursuant to this authorization).
|
Entity
|
Organized under the laws of
|
Teradata International, Inc.
|
Delaware
|
Teradata US, Inc.
|
Delaware
|
Teradata Operations, Inc.
|
Delaware
|
Teradata Government Systems LLC
|
Delaware
|
Teradata Taiwan LLC
|
Delaware
|
Teradata Argentina Holdings LLC
|
Delaware
|
Teradata Belgium Holdings LLC
|
Delaware
|
Teradata Bermuda Holdings LLC
|
Delaware
|
Teradata Brazil Holdings LLC
|
Delaware
|
Teradata Chile Holdings LLC
|
Delaware
|
Teradata Colombia Holdings LLC
|
Delaware
|
Teradata Egypt Holdings LLC
|
Delaware
|
Teradata India Holdings LLC
|
Delaware
|
Teradata Indonesia Holdings LLC
|
Delaware
|
Teradata International Services LLC
|
Delaware
|
Teradata Mexico Holdings LLC
|
Delaware
|
Teradata Netherlands Holdings LLC
|
Delaware
|
Teradata New Zealand Holdings LLC
|
Delaware
|
Teradata Philippines LLC
|
Delaware
|
TD Nameholder Corporation
|
Delaware
|
Teradata de Argentina S.R.L.
|
Argentina
|
Teradata Australia Pty Ltd
|
Australia
|
Teradata GmbH
|
Austria
|
Teradata (Barbados) IP Holdings SRL
|
Barbados
|
Teradata Belgium SNC
|
Belgium
|
Teradata Bermuda IP Holdings L.P.
|
Bermuda
|
Teradata Financing Holdings L.P.
|
Bermuda
|
Teradata Bermuda Holdings ULC
|
Bermuda
|
Teradata Bermuda Operations Holdings ULC
|
Bermuda
|
TRDT Brasil Tecnologia Ltda.
|
Brazil
|
TRDT Brasil Holdings Ltda.
|
Brazil
|
Teradata Information Systems (Beijing) Limited
|
China
|
Teradata Canada ULC
|
Canada
|
Teradata Chile Tecnologías de Información Limitada
|
Chile
|
TDC Colombia Limitada
|
Colombia
|
Teradata Ceska republika spol. s r.o.
|
Czech Republic
|
Teradata Danmark ApS
|
Denmark
|
Teradata Egypt WLL
|
Egypt
|
Teradata Finland Oy
|
Finland
|
Teradata France S.A.S.
|
France
|
Teradata GmbH
|
Germany
|
Teradata (Hong Kong) Limited
|
Hong Kong
|
Teradata Magyarorszag Kft.
|
Hungary
|
Teradata India Private Limited
|
India
|
Lunexa Advantage Knowledge Processing Services Private Limited
|
India
|
PT. Tdata Indonesia
|
Indonesia
|
Teradata Ireland Limited
|
Ireland
|
Teradata Ireland Holdings L.P.
|
Ireland
|
Teradata Ireland Operations L.P.
|
Ireland
|
Teradata International Sales Limited
|
Ireland
|
Teradata Italia S.r.l.
|
Italy
|
Teradata Japan Ltd.
|
Japan
|
Teradata Korea Co., Ltd.
|
Korea
|
TData Corporation (Malaysia) Sdn. Bhd.
|
Malaysia
|
Teradata Solutions México, S. de R.L. de C.V.
|
Mexico
|
Teradata de México, S. de R.L. de C.V.
|
Mexico
|
Teradata Netherlands B.V.
|
Netherlands
|
Teradata Finance Company B.V.
|
Netherlands
|
Teradata (NZ) Corporation
|
New Zealand
|
Teradata Norge AS
|
Norway
|
Teradata Pakistan (Private) Limited
|
Pakistan
|
Teradata Global Consulting Pakistan (Private) Limited
|
Pakistan
|
Teradata Chile Tecnologías de Información Limitada – Sucursal Perú
|
Peru
|
Teradata Philippines, LLC, Manila Branch
|
Philippines
|
Teradata GCC (Philippines), Inc.
|
Philippines
|
Teradata Polska Sp. z o.o.
|
Poland
|
“Teradata” LLC
|
Russia
|
Teradata Saudi Arabia LLC
|
Saudi Arabia
|
Teradata (Singapore) Pte. Ltd.
|
Singapore
|
Teradata Iberia SL
|
Spain
|
Teradata Sweden AB
|
Sweden
|
Teradata (Schweiz) GmbH
|
Switzerland
|
Teradata Taiwan LLC, Taiwan branch
|
Taiwan
|
Teradata (Thailand) Co., Ltd.
|
Thailand
|
Teradata Bilisim Sistemleri Limited Sirketi
|
Turkey
|
Teradata Middle East and Africa (branch)
|
United Arab Emirates (UAE)
|
Teradata (UK) Limited
|
United Kingdom
|
Big Data Partnership Limited
|
United Kingdom
|
|
|
|
Date: March 1, 2019
|
|
/s/ Oliver G. Ratzesber
|
|
|
Oliver G. Ratzesberger
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: March 1, 2019
|
|
/s/ Mark A. Culhane
|
|
|
Mark A. Culhane
|
|
|
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: March 1, 2019
|
|
/s/ Oliver G. Ratzesber
|
|
|
Oliver G. Ratzesberger
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: March 1, 2019
|
|
/s/ Mark A. Culhane
|
|
|
Mark A. Culhane
|
|
|
Chief Financial Officer
|