UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2016 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33458 TERADATA CORPORATION (Exact name of registrant as specified in its charter) Delaware 75-3236470 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10000 Innovation Drive Dayton, Ohio 45342 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (866) 548-8348 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. ý ¨ Large accelerated filer Accelerated filer Non-accelerated filer ¨ Smaller reporting company ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý At April 29, 2016 , the registrant had approximately 130.0 million shares of common stock outstanding. 1
TABLE OF CONTENTS PART I—FINANCIAL INFORMATION Description Page Item 1. Financial Statements Condensed Consolidated Statements of (Loss) Income (Unaudited) Three Months Ended March 31, 2016 and 2015 3 Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months Ended March 31, 2016 and 2015 4 Condensed Consolidated Balance Sheets (Unaudited) March 31, 2016 and December 31, 2015 5 Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2016 and 2015 6 Notes to Condensed Consolidated Financial Statements (Unaudited) 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3. Quantitative and Qualitative Disclosures About Market Risk 26 Item 4. Controls and Procedures 26 PART II—OTHER INFORMATION Description Page Item 1. Legal Proceedings 27 Item 1A. Risk Factors 27 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27 Item 3. Defaults Upon Senior Securities 27 Item 4. Mine Safety Disclosures 27 Item 5. Other Information 27 Item 6. Exhibits 28 Signatures 29 2
Table of Contents Part 1—FINANCIAL INFORMATION Item 1. Financial Statements. Teradata Corporation Condensed Consolidated Statements of (Loss) Income (Unaudited) Three Months Ended March 31, In millions, except per share amounts 2016 2015 Revenue Product revenue $ 194 $ 241 Service revenue 351 341 Total revenue 545 582 Costs and operating expenses Cost of products 78 109 Cost of services 198 196 Selling, general and administrative expenses 174 184 Research and development expenses 57 63 Impairment of goodwill, acquired intangibles and other assets 80 — Total costs and operating expenses 587 552 (Loss) income from operations (42) 30 Other expense, net Interest expense (3) (1) Other income, net — 1 Total other expense, net (3) — (Loss) income before income taxes (45) 30 Income tax expense 1 8 Net (loss) income $ (46) $ 22 Net (loss) income per weighted average common share Basic $ (0.36) $ 0.15 Diluted $ (0.36) $ 0.15 Weighted average common shares outstanding Basic 129.4 145.2 Diluted 129.4 147.7 See Notes to Condensed Consolidated Financial Statements (Unaudited). 3
Table of Contents Teradata Corporation Condensed Consolidated Statements of Comprehensive Loss (Unaudited) Three Months Ended March 31, 2016 2015 In millions Net (loss) income $ (46) $ 22 Other comprehensive income (loss): Foreign currency translation adjustments 8 (31) Securities: Unrealized loss on securities, before tax — (9) Unrealized loss on securities, tax portion — 3 Unrealized loss on securities, net of tax — (6) Defined benefit plans: Defined benefit plan adjustment, before tax — 2 Defined benefit plan adjustment, tax portion — — Defined benefit plan adjustment, net of tax — 2 Other comprehensive income (loss) 8 (35) Comprehensive loss $ (38) $ (13) See Notes to Condensed Consolidated Financial Statements (Unaudited). 4
Table of Contents Teradata Corporation Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, In millions, except per share amounts 2016 2015 Assets Current Assets Cash and cash equivalents $ 917 $ 839 Accounts receivable, net 519 580 Inventories 54 49 Assets held for sale 139 214 Other current assets 48 52 Total current assets 1,677 1,734 Property and equipment, net 131 143 Capitalized software, net 190 190 Goodwill 384 380 Acquired intangible assets, net 17 22 Deferred income taxes 48 41 Other assets 17 17 Total assets $ 2,464 $ 2,527 Liabilities and stockholders’ equity Current liabilities Current portion of long-term debt $ 30 $ 30 Short-term borrowings 80 180 Accounts payable 83 96 Payroll and benefits liabilities 118 120 Deferred revenue 506 367 Liabilities held for sale 55 58 Other current liabilities 96 102 Total current liabilities 968 953 Long-term debt 560 567 Pension and other postemployment plan liabilities 81 89 Long-term deferred revenue 15 15 Deferred tax liabilities 20 28 Other liabilities 26 26 Total liabilities 1,670 1,678 Commitments and contingencies (Note 7) Stockholders’ equity Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively — — Common stock: par value $0.01 per share, 500.0 shares authorized, 129.4 and 130.7 shares issued at March 31, 2016 and December 31, 2015, respectively 1 1 Paid-in capital 1,158 1,128 Accumulated deficit (297) (204) Accumulated other comprehensive loss (68) (76) Total stockholders’ equity 794 849 Total liabilities and stockholders’ equity $ 2,464 $ 2,527 See Notes to Condensed Consolidated Financial Statements (Unaudited). 5
Table of Contents Teradata Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2016 2015 In millions Operating activities Net (loss) income $ (46) $ 22 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34 42 Stock-based compensation expense 21 17 Excess tax benefit from stock-based compensation (1) — Deferred income taxes (10) (6) Impairment of goodwill, acquired intangibles and other assets 80 — Changes in assets and liabilities: Receivables 66 37 Inventories (5) (4) Current payables and accrued expenses (16) 13 Deferred revenue 140 120 Other assets and liabilities (12) (19) Net cash provided by operating activities 251 222 Investing activities Expenditures for property and equipment (8) (17) Additions to capitalized software (18) (15) Business acquisitions and other investing activities, net (3) — Net cash used in investing activities (29) (32) Financing activities Repurchases of common stock (47) (269) Proceeds from long-term borrowings — 600 Repayments of long-term borrowings (7) (247) Repayments of credit facility borrowings (100) (220) Excess tax benefit from stock-based compensation 1 — Other financing activities, net 7 6 Net cash used in financing activities (146) (130) Effect of exchange rate changes on cash and cash equivalents 2 (13) Increase in cash and cash equivalents 78 47 Cash and cash equivalents at beginning of period 839 834 Cash and cash equivalents at end of period $ 917 $ 881 See Notes to Condensed Consolidated Financial Statements (Unaudited). 6
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