Document and Entity Information
Document and Entity Information - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | TERADATA CORP /DE/ | ||
Entity Central Index Key | 816,761 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Trading Symbol | TDC | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 122 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3.7 |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
Product and cloud revenue | $ 747 | $ 923 | $ 1,115 |
Service revenue | 1,409 | 1,399 | 1,415 |
Total revenue | 2,156 | 2,322 | 2,530 |
Costs and operating expenses | |||
Cost of product and cloud | 325 | 383 | 489 |
Cost of services | 809 | 751 | 765 |
Selling, general and administrative expenses | 652 | 664 | 765 |
Research and development expenses | 306 | 212 | 228 |
Impairment of goodwill, acquired intangibles and other assets | 0 | 80 | 478 |
Total costs and operating expenses | 2,092 | 2,090 | 2,725 |
Income (loss) from operations | 64 | 232 | (195) |
Interest expense | (15) | (12) | (9) |
Other income, net | 9 | 1 | 60 |
Total other (expense) income, net | (6) | (11) | 51 |
Income (loss) before income taxes | 58 | 221 | (144) |
Income tax expense | 125 | 96 | 70 |
Net (loss) income | $ (67) | $ 125 | $ (214) |
Net (loss) income per common share | |||
Basic (in usd per share) | $ (0.53) | $ 0.96 | $ (1.53) |
Diluted (in usd per share) | $ (0.53) | $ 0.95 | $ (1.53) |
Weighted average common shares outstanding | |||
Basic (in shares) | 125.8 | 129.7 | 139.6 |
Diluted (in shares) | 125.8 | 131.5 | 139.6 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (67) | $ 125 | $ (214) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 16 | (7) | (36) |
Securities: | |||
Reclassification of gain to net income (loss) | 0 | 0 | (26) |
Unrealized loss on securities, before tax | 0 | 0 | (7) |
Tax impact on securities | 0 | 0 | 2 |
Net change in securities | 0 | 0 | (31) |
Defined benefit plans: | |||
Reclassification of loss to net income (loss) | 4 | 3 | 3 |
Defined benefit plan adjustment, before tax | (6) | (12) | (9) |
Defined benefit plan adjustment, tax portion | 1 | 3 | 1 |
Defined benefit plan adjustment, net of tax | (1) | (6) | (5) |
Other comprehensive income (loss) | 15 | (13) | (72) |
Comprehensive (loss) income | $ (52) | $ 112 | $ (286) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 1,089 | $ 974 |
Accounts receivable, net | 554 | 548 |
Inventories | 30 | 34 |
Other current assets | 77 | 65 |
Total current assets | 1,750 | 1,621 |
Property and equipment, net | 162 | 138 |
Capitalized software, net | 121 | 187 |
Goodwill | 399 | 390 |
Acquired intangible assets, net | 23 | 11 |
Deferred income taxes | 57 | 49 |
Other assets | 44 | 17 |
Total assets | 2,556 | 2,413 |
Current liabilities | ||
Current portion of long-term debt | 60 | 30 |
Short-term borrowings | 240 | 0 |
Accounts payable | 74 | 103 |
Payroll and benefits liabilities | 173 | 139 |
Deferred revenue | 414 | 369 |
Other current liabilities | 102 | 88 |
Total current liabilities | 1,063 | 729 |
Long-term debt | 478 | 538 |
Pension and other postemployment plan liabilities | 109 | 96 |
Long-term deferred revenue | 85 | 14 |
Deferred tax liabilities | 4 | 33 |
Other liabilities | 149 | 32 |
Total liabilities | 1,888 | 1,442 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at December 31, 2017 and 2016, respectively | 0 | 0 |
Common stock: par value $0.01 per share, 500.0 shares authorized, 121.9 and 130.6 shares issued at December 31, 2017 and 2016, respectively | 1 | 1 |
Paid-in capital | 1,320 | 1,220 |
Accumulated deficit | (579) | (161) |
Accumulated other comprehensive loss | (74) | (89) |
Total stockholders’ equity | 668 | 971 |
Total liabilities and stockholders’ equity | $ 2,556 | $ 2,413 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 121,900,000 | 130,600,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net (loss) income | $ (67) | $ 125 | $ (214) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 138 | 128 | 170 |
Stock-based compensation expense | 68 | 62 | 56 |
Excess tax benefit from stock-based compensation | 0 | 0 | (2) |
Deferred income taxes | (34) | (3) | (39) |
Gain on investments | 0 | (2) | (57) |
Impairment of goodwill, acquired intangibles and other assets | 0 | 80 | 478 |
Changes in assets and liabilities, net of acquisitions: | |||
Receivables | (6) | 40 | 1 |
Inventories | 3 | 14 | (11) |
Account payables and accrued expenses | 12 | 11 | (8) |
Deferred revenue | 115 | 1 | 24 |
Other assets and liabilities | 95 | (10) | 3 |
Net cash provided by operating activities | 324 | 446 | 401 |
Investing activities | |||
Expenditures for property and equipment | (78) | (53) | (52) |
Additions to capitalized software | (9) | (65) | (68) |
Proceeds from sales of property and equipment | 0 | 5 | 0 |
Proceeds from disposition of investments | 0 | 2 | 85 |
Proceeds from sale of business | $ 0 | $ 92 | $ 0 |
Business acquisitions and other investing activities, net | (21) | (16) | (17) |
Net cash used in investing activities | $ (108) | $ (35) | $ (52) |
Financing activities | |||
Proceeds from long-term borrowings | 0 | 0 | 600 |
Repayments of long-term borrowings | (30) | (30) | (247) |
Proceeds from credit facility borrowings | 420 | 0 | 180 |
Repayments of credit-facility borrowings | (180) | (180) | (220) |
Repurchases of common stock | (351) | (82) | (657) |
Excess tax benefit from stock-based compensation | 0 | 0 | 2 |
Other financing activities, net | 32 | 30 | 18 |
Net cash used in financing activities | (109) | (262) | (324) |
Effect of exchange rate changes on cash and cash equivalents | 8 | (14) | (20) |
Increase in cash and cash equivalents | 115 | 135 | 5 |
Cash and cash equivalents at beginning of year | 974 | 839 | 834 |
Cash and cash equivalents at end of year | 1,089 | 974 | 839 |
Cash paid during the year for: | |||
Income taxes | 25 | 105 | 98 |
Interest | $ 14 | $ 12 | $ 8 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance (in shares) at Dec. 31, 2014 | 148 | ||||
Beginning Balance at Dec. 31, 2014 | $ 1,707 | $ 1 | $ 1,054 | $ 656 | $ (4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (214) | (214) | |||
Employee stock compensation, employee stock purchase programs and option exercises (in shares) | 2 | ||||
Employee stock compensation, employee stock purchase programs and option exercises | 78 | 78 | |||
Income tax benefit from stock compensation plans | (4) | (4) | |||
Repurchases of Company common stock, retired (in shares) | (19) | ||||
Repurchases of common stock, retired | (646) | (646) | |||
Pension and postemployment benefit plans, net of tax | (5) | (5) | |||
Unrealized gain on securities | (31) | (31) | |||
Currency translation adjustment | (36) | (36) | |||
Ending Balance (in shares) at Dec. 31, 2015 | 131 | ||||
Ending Balance at Dec. 31, 2015 | 849 | $ 1 | 1,128 | (204) | (76) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 125 | 125 | |||
Employee stock compensation, employee stock purchase programs and option exercises (in shares) | 3 | ||||
Employee stock compensation, employee stock purchase programs and option exercises | 92 | 92 | |||
Repurchases of Company common stock, retired (in shares) | (3) | ||||
Repurchases of common stock, retired | (82) | (82) | |||
Pension and postemployment benefit plans, net of tax | (6) | (6) | |||
Unrealized gain on securities | 0 | ||||
Currency translation adjustment | (7) | (7) | |||
Ending Balance (in shares) at Dec. 31, 2016 | 131 | ||||
Ending Balance at Dec. 31, 2016 | 971 | $ 1 | 1,220 | (161) | (89) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (67) | (67) | |||
Employee stock compensation, employee stock purchase programs and option exercises (in shares) | 2 | ||||
Employee stock compensation, employee stock purchase programs and option exercises | 100 | 100 | |||
Purchases of treasury stock, retired (in shares) | (11) | ||||
Repurchases of common stock, retired | (351) | (351) | |||
Pension and postemployment benefit plans, net of tax | (1) | (1) | |||
Unrealized gain on securities | 0 | ||||
Currency translation adjustment | 16 | 16 | |||
Ending Balance (in shares) at Dec. 31, 2017 | 122 | ||||
Ending Balance at Dec. 31, 2017 | $ 668 | $ 1 | $ 1,320 | $ (579) | $ (74) |
Description of Business, Basis
Description of Business, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Significant Accounting Policies | Description of Business, Basis of Presentation and Significant Accounting Policies Description of the Business. Teradata Corporation (“Teradata” or the “Company”) is a global leader in analytic data solutions and services. Our analytic data solutions comprise software, hardware, and related business consulting and support services for analytics across a company’s entire analytical ecosystem. Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates. Revenue Recognition. Teradata’s solution offerings typically include software, unspecified when-and-if-available software upgrades, hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when: • Persuasive evidence of an arrangement exists • The products 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 Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer. The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for perpetual software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for unspecified software upgrades or enhancements on a when-and-if-available basis are recognized straight-line over the term of the arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services 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. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue. The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above. For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period. Teradata’s analytic software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the analytic software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount). VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and when-and-if-available software upgrades (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the analytics solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs. In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products. When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices. The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the four previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace. The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2017 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP. Teradata’s new go-to-market offerings introduced in the second half of 2016, which are part of the overall business transformation strategy, include the following offerings: • Subscription license - Teradata’s subscription licenses include a right-to-use license and are typically sold with PCS. The revenue for these arrangements is typically recognized ratably over the contract term. The term of these arrangements varies between one and five years. • Cloud - These arrangements include a right-to-access software license that the customer does not have a right to take possession of without significant penalty during the hosting period and the services can be delivered through a managed or public cloud. These arrangements are recognized outside the software rules and revenue is recognized ratably over the contract term. The term of these arrangements typically varies between one and five years. • Rentals - Teradata owns the equipment and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract. The term of these arrangements typically varies between one and three years and are generally accounted for as operating leases. • Service model - Teradata owns the equipment to provide the service on-premises. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. The term of these arrangements varies between one and five years. Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of (Loss) Income. Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents. Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues. Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost. Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive (loss) income. Realized gains and losses are included in other income and expense in the Consolidated Statements of (Loss) Income. Long-Lived Assets Property and Equipment . Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter. Total depreciation expense on the Company’s property and equipment for December 31 was as follows: In millions 2017 2016 2015 Depreciation expense $ 55 $ 49 $ 53 Capitalized Software . Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use. Costs incurred for the development of analytic applications are expensed as incurred based on the frequency and agile nature of development. Prior to December 31, 2016, costs incurred for the development of analytic database software that will be sold, leased or otherwise marketed were capitalized between technological feasibility and the point at which a product was ready for general release. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications are complete. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred. Our research and development efforts have recently become more driven by market requirements and rapidly changing customers' needs. In addition, the Company started applying agile development methodologies to help respond to new technologies and trends. Agile development methodologies are characterized by a more dynamic development process with more frequent and iterative revisions to a product release features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, the Company did not capitalize any amounts for external-use software development costs in 2017 due to the relatively short duration between the completion of the working model and the point at which a product is ready for general release. Prior capitalized costs will continue to be amortized under the greater of revenue-based or straight-line method over the estimated useful life. The following table identifies the activity relating to capitalized software: Internal-use Software External-use Software In millions 2017 2016 2015 2017 2016 2015 Beginning balance at January 1 $ 13 $ 13 $ 13 $ 174 $ 177 $ 186 Capitalized 9 6 6 — 59 61 Amortization (6 ) (6 ) (6 ) (69 ) (62 ) (70 ) Ending balance at December 31 $ 16 $ 13 $ 13 $ 105 $ 174 $ 177 The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is: Actual For the years ended (estimated) In millions 2017 2018 2019 2020 2021 2022 Internal-use software amortization expense $ 6 $ 7 $ 7 $ 7 $ 7 $ 6 External-use software amortization expense $ 69 $ 49 $ 34 $ 22 $ — $ — Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2017 and does not include any new capitalization for future periods. Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. No impairment was recognized during 2017. Goodwill . Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 3 - Goodwill and Acquired Intangibles for additional information. Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims. Research and Development Costs. Research and development costs are expensed as incurred (except for the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support. Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2017 . Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service. The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension and postemployment accounting rules. Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income. Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. For the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment of or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend. Earnings (Loss) Per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted share awards and other stock awards. Refer to Note 5 for share information on the Company’s stock compensation plans. The components of basic and diluted earnings (loss) per share are as follows: For the years ended December 31 In millions, except (loss) earnings per share 2017 2016 2015 Net (loss) income attributable to common stockholders $ (67 ) $ 125 $ (214 ) Weighted average outstanding shares of common stock 125.8 129.7 139.6 Dilutive effect of employee stock options, restricted shares and other stock awards — 1.8 — Common stock and common stock equivalents 125.8 131.5 139.6 Earnings (loss) per share: Basic $ (0.53 ) $ 0.96 $ (1.53 ) Diluted $ (0.53 ) $ 0.95 $ (1.53 ) For 2017, due to the net loss attributable to Teradata common stockholders, largely due to the tax expense recorded as a result of the Tax Cuts and Jobs Act of 2017, potential common shares that would cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For 2017, the fully diluted shares would have been 127.8 million For 2015, due to the net loss attributable to Teradata common stockholders, largely due to the goodwill and acquired intangibles impairment charges, potential common shares that would cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For 2015, the fully diluted shares would have been 141.9 million . Options to purchase 2.7 million in 2017 , 5.2 million shares in 2016 and 4.5 million shares in 2015 of common stock, were not included in the computation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would have been anti-dilutive. Recently Issued Accounting Pronouncements Revenue Recognition. In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five-step process which includes the following: (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 entity satisfies a performance obligation. The new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application (modified retrospective method). The Company will adopt the new accounting guidance effective January 1, 2018 by utilizing the modified retrospective method. The Company is still evaluating and finalizing the impact on its consolidated financial position, results of operations and cash flows. Although the Company is still evaluating the impact on its consolidated financial statements, the Company believes the most significant impacts will likely include the following items: • As the Company transitions to the new go-to-market offerings, such as subscription-based licenses rather than perpetual licenses, the Company could potentially see a more significant impact in the amount of revenue recognized over time under the current rules but upfront under the new rules. This impact will result in revenue that is adjusted to retained earnings in the period of adoption and therefore not recognized in future periods or restated to prior periods due to the Company applying the modified retrospective method of adoption. • The Company currently expenses contract acquisition costs and believes that the requirement to defer incremental contract acquisition costs and recognize them over the term of the contract to which the costs relate will have an impact, especially as the Company transitions to longer-term, over-time revenue contracts. • The amount of revenue allocated to the delivered items and recognized upfront utilizing the relative selling price model is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions ( i.e ., the non-contingent amount) under current rules. Under the new rules, the amounts allocated to delivered items and recognized upfront could be higher if it is probable that a significant reversal in the amount of revenue recognized will not occur in future periods upon the delivery of additional items or meeting other specified performance conditions; and • The new standard will impact our internal control environment, including our financial statement disclosure controls, business process controls, new systems and processes, and enhancements to existing systems and processes. The Company expects to record approximately $20 million of adjustments to retained earnings for the revenue-related items discussed above. The Company also expects to record approximately $15 million of deferred compensation costs upon adoption that will then be amortized in future periods. The Company does not expect that the new standard will result in substantive changes in our performance obligations or the amounts of revenue allocated between multiple performance obligations, with the exception of contingent revenue discussed above. The Company is still in the process of evaluating and finalizing these impacts, and our initial assessment may change as the Company continues with implementing new systems, processes, accounting policies and internal controls. Leases. In February 2016, the FASB issued new guidance which requires a lessee to account for leases as finance or operating leases. Both leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases to determine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted |
Supplemental Financial Informat
Supplemental Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information At December 31 In millions 2017 2016 Accounts receivable Trade $ 559 $ 561 Other 7 6 Accounts receivable, gross 566 567 Less: allowance for doubtful accounts (12 ) (19 ) Total accounts receivable, net $ 554 $ 548 Inventories Finished goods $ 18 $ 20 Service parts 12 14 Total inventories $ 30 $ 34 Property and equipment Land $ 8 $ 8 Buildings and improvements 82 77 Machinery and other equipment 404 354 Property and equipment, gross 494 439 Less: accumulated depreciation (332 ) (301 ) Total property and equipment, net $ 162 $ 138 Other current liabilities Sales and value-added taxes $ 30 $ 28 Pension and other postemployment plan liabilities 2 7 Other 70 53 Total other current liabilities $ 102 $ 88 Deferred revenue Deferred revenue, current $ 414 $ 369 Long-term deferred revenue 85 14 Total deferred revenue $ 499 $ 383 Other long-term liabilities Transition tax $ 133 $ — Uncertain tax positions 14 20 Other 2 12 Total other long-term liabilities $ 149 $ 32 |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The following table identifies the activity relating to goodwill by operating segment: In millions Balance at December 31, 2016 Additions Currency Balance at December 31, 2017 Goodwill Americas Data and Analytics $ 251 $ 2 $ — $ 253 International Data and Analytics 139 — 7 146 Total goodwill $ 390 $ 2 $ 7 $ 399 During 2017, the Company recorded additional goodwill of $2 million , for an immaterial acquisition that occurred during the period. In the fourth quarter of 2017, the Company performed its annual impairment test of goodwill and determined that no impairment to the carrying value of goodwill was necessary. The Company reviewed two reporting units in its 2017 goodwill impairment assessment, as both geographic operating segments were considered separate reporting units for purposes of testing. Based on the Company's evaluation and weighting of the events and circumstances that have occurred since the most recent quantitative test, the Company concluded that it was not more likely than not that each reporting unit's fair value was below its carrying value. Therefore, the Company determined that it was not necessary to perform a quantitative goodwill impairment test for the reporting units in 2017. Acquired intangible assets were specifically identified when acquired, and are deemed to have finite lives. The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: December 31, 2017 December 31, 2016 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 $ 43 $ (20 ) $ 71 $ (61 ) Trademarks/trade names 5 — — 1 (1 ) In-process research and development 5 — — 5 (4 ) Total $ 43 $ (20 ) $ 77 $ (66 ) During 2017, the Company recorded additional intangibles of $18 million , for intellectual property related to an immaterial acquisition that occurred during the period. The gross carrying amount of acquired intangibles was reduced by certain intangible assets previously acquired that became fully amortized and were removed from the balance sheet. The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is: Actual For the years ended (estimated) In millions 2015 2016 2017 2018 2019 2020 2021 2022 Amortization expense $ 40 $ 10 $ 8 $ 7 $ 6 $ 4 $ 4 $ 2 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the years ended December 31, income (loss) before income taxes consisted of the following: In millions 2017 2016 2015 Income (loss) before income taxes United States $ (26 ) $ 93 $ (88 ) Foreign 84 128 (56 ) Total income (loss) before income taxes $ 58 $ 221 $ (144 ) For the years ended December 31, income tax expense consisted of the following: In millions 2017 2016 2015 Income tax expense Current Federal $ 132 $ 67 $ 74 State and local 2 7 9 Foreign 25 25 26 Deferred Federal (22 ) 7 (19 ) State and local (4 ) 1 (3 ) Foreign (8 ) (11 ) (17 ) Total income tax expense $ 125 $ 96 $ 70 Effective income tax rate 215.5 % 43.4 % (48.6 %) The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31 : In millions 2017 2016 2015 Income tax expense at the U.S. federal tax rate 35.0 % 35.0 % 35.0 % Foreign income tax differential (18.0 )% (13.2 )% 14.0 % State and local income taxes (11.0 )% 0.2 % 0.5 % U.S. permanent book/tax differences (12.0 )% (0.1 )% 3.1 % Change in valuation allowance for California R&D credit 10.0 % 0.8 % (3.4 )% U.S. manufacturing deduction permanent difference (8.0 )% (3.5 )% 5.5 % Goodwill impairment — % 8.9 % (100.1 )% Tax impact of sale of marketing applications business — % 9.9 % — % Impact of excess tax benefits and tax deficiencies — % 2.2 % — % Tax impact of U.S. tax law change - IRC Section 987 — % 3.5 % — % Deferred tax impact from U.S. rate change (27.0 )% — % — % Tax impact of transition Tax- U.S. tax reform 250.0 % — % — % Other, net (3.5 )% (0.3 )% (3.2 )% Effective income tax rate 215.5 % 43.4 % (48.6 )% The 2017 effective tax rate was impacted by the Tax Act, which was signed into law on December 22, 2017, making significant changes to the U.S. Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, the Company has determined its best estimate of the impact of the Tax Act in its year-end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing and has recorded $126 million as additional income tax expense in the fourth quarter of 2017. The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was $145 million of tax expense based on cumulative foreign earnings of $1.3 billion , which the Company expects to pay over an 8-year period. In addition, a tax benefit of $19 million was recorded, a majority of which related to the re-measurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The ultimate impact may differ materially from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act. The 2016 effective tax rate was impacted by the $57 million of goodwill impairment charges recorded in the first quarter of 2016, all of which was treated as a permanent, non-deductible tax item. In addition, a discrete tax charge of $22 million was recorded in the third quarter of 2016 related to the tax impact of the sale of the marketing applications business, which occurred on July 1, 2016. In the fourth quarter of 2016 , the Company recorded $8 million of tax expense associated with the issuance of new U.S. Treasury Regulations under Internal Revenue Code Section 987 on December 7, 2016, which clarified how companies calculate foreign currency translation gains and losses for income tax purposes for branches whose accounting records are kept in a currency other than the currency of the Company. Also in the fourth quarter of 2016, the Company elected to early adopt Accounting Standards Update 2016-09, Improvements to Employee Share-based Payment Accounting. As a result, the Company incurred a $5 million discrete tax expense associated with the net shortfall arising from 2016 equity compensation vestings and exercises. The 2015 effective tax rate was impacted by the $437 million of goodwill impairment charges recorded for 2015, of which $414 million was treated as a permanent non-deductible tax item. This resulted in full-year income tax expense in 2015 of $70 million , on a pre-tax net loss of $(144) million , causing a negative tax rate of (48.6)% . Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows: In millions 2017 2016 Deferred income tax assets Employee pensions and other liabilities $ 50 $ 59 Other balance sheet reserves and allowances 13 18 Tax loss and credit carryforwards 59 53 Deferred revenue 3 3 Other 2 — Total deferred income tax assets 127 133 Valuation allowance (32 ) (26 ) Net deferred income tax assets 95 107 Deferred income tax liabilities Intangibles and capitalized software 30 63 Property and equipment 12 22 Other — 6 Total deferred income tax liabilities 42 91 Total net deferred income tax assets $ 53 $ 16 As of December 31, 2017 , Teradata has net operating loss ("NOL") and tax credit carryforwards totaling $59 million (tax effected and before any valuation allowance offset and application of recognition criteria for uncertain tax positions). Of the total tax carryforwards, $15 million are NOL's in the U.S. and certain foreign jurisdictions, a small portion of which will begin to expire in 2019 and $44 million are California R&D tax credits that have an indefinite carryforward period (which has a $32 million valuation allowance offset recorded). Prior to the enactment of the Tax Act, the Company had not provided for taxes on the undistributed earnings of its foreign subsidiaries as the Company either reinvested or intended to reinvest those earnings outside of the U.S. As a result of the 2017 Tax Act, the Company has changed its indefinite reinvestment assertion related to foreign earnings that have been taxed in the U.S. and now considers a majority of these earnings no longer indefinitely reinvested. As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant U.S. tax impact in the future. However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain jurisdictions. The Company has not recorded any provisional foreign or state tax expense with respect to earnings which have been subject to federal income tax as they either would not be taxable upon remittance or they are considered permanently reinvested. Additional information and analysis are needed to determine the final amount of deferred tax liability considering factors such as whether non-U.S. entities are subject to withholding taxes, have reserve requirements, or have projected working capital and other capital needs in the country where the earnings were generated that would result in a decision to indefinitely reinvest a portion or all their earnings. The Company will disclose any future impact, if any, in the reporting period in which the accounting is completed, which will not exceed one year from the date of enactment of the Tax Act in accordance with SAB 118. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company reflects any interest and penalties recorded in connection with its uncertain tax positions as a component of income tax expense. As of December 31, 2017 , the Company’s uncertain tax positions totaled approximately $28 million , of which $2 million is reflected in current taxes payable as it is anticipated the liability will be settled within the next twelve months, and $14 million is reflected in the other liabilities section of the Company’s balance sheet as a non-current liability. The remaining balance of $12 million of uncertain tax positions relates to certain tax attributes both generated by the Company and acquired in various acquisitions, which are netted against the underlying deferred tax assets recorded on the balance sheet. The entire balance of $28 million in uncertain tax positions would cause a decrease in the effective income tax rate upon recognition. Teradata has recorded $2 million of interest accruals related to its uncertain tax liabilities as of December 31, 2017 . Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31 : In millions 2017 2016 Balance at January 1 $ 30 $ 38 Gross decreases for prior period tax positions (1 ) (7 ) Gross increases for current period tax positions 3 3 Decreases due to the lapse of applicable statute of limitations (4 ) (4 ) Balance at December 31 $ 28 $ 30 The Company and its subsidiaries file income tax returns in the U.S. and various state jurisdictions, as well as numerous foreign jurisdictions. As of December 31, 2017 , the Company has ongoing tax audits in a limited number of state and foreign jurisdictions. However, no material adjustments have been proposed or made in any of these examinations to date, which would result in any incremental income tax expense in future periods to the Company. The Company's tax returns for years 2014-2017 are still open for assessment by tax authorities in its major jurisdictions. |
Employee Stock-based Compensati
Employee Stock-based Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock-based Compensation Plans | Employee Stock-based Compensation Plans The Company recorded stock-based compensation expense for the years ended December 31 as follows: In millions 2017 2016 2015 Stock options $ 9 $ 9 $ 12 Restricted shares 56 51 41 Employee share repurchase program 3 2 3 Total stock-based compensation before income taxes 68 62 56 Tax benefit (21 ) (13 ) (17 ) Total stock-based compensation, net of tax $ 47 $ 49 $ 39 The Teradata Corporation 2007 Stock Incentive Plan (the “2007 SIP”), as amended, and the Teradata 2012 Stock Incentive Plan (the “2012 SIP”) provide for the grant of several different forms of stock-based compensation. The 2012 SIP was adopted and approved by stockholders in April 2012 and no further awards may be made under the 2007 SIP after that time. A total of approximately 17.5 million shares were authorized to be issued under the 2012 SIP. New shares of the Company’s common stock are issued as a result of the vesting of restricted share units and stock option exercises, and at the time of grant for restricted shares, for awards under both plans. As of December 31, 2017 , the Company’s primary types of stock-based compensation were stock options, restricted shares, restricted share units and the employee stock purchase program (the “ESPP”). Stock Options The Compensation and Human Resource Committee of Teradata’s Board of Directors has discretion to determine the material terms and conditions of option awards under both the 2007 SIP and the 2012 SIP (collectively, the “Teradata SIP”), provided that (i) the exercise price must be no less than the fair market value of Teradata common stock (as defined in both plans) on the date of grant, and (ii) the term must be no longer than ten years . Option grants generally have a four -year vesting period. The weighted-average fair value of options granted for Teradata equity awards was $11.08 in 2017, $10.68 in 2016 and $11.37 in 2015 . The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions: 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.99 % 2.08 % 1.76 % Expected volatility 35.0 % 35.2 % 34.4 % Expected term (years) 6.3 6.3 6.3 The following table summarizes the Company’s stock option activity for the year ended December 31, 2017 : 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, 2017 6,509 $ 36.22 5.3 $ 8 Granted 10 $ 29.04 Exercised (746 ) $ 25.28 Canceled (153 ) $ 46.56 Forfeited (247 ) $ 32.97 Outstanding at December 31, 2017 5,373 $ 37.63 4.5 $ 30 Fully vested and expected to vest at December 31, 2017 5,373 $ 37.63 4.5 $ 30 Exercisable at December 31, 2017 4,220 $ 39.60 3.4 $ 21 The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31 : In millions 2017 2016 2015 Intrinsic value of options exercised $ 6 $ 13 $ 8 Cash received from option exercises $ 19 $ 18 $ 9 Tax benefit realized from option exercises $ 2 $ 5 $ 3 As of December 31, 2017 , there was $13 million of total unrecognized compensation cost related to unvested stock option grants. That cost is expected to be recognized over a weighted-average period of 2.4 years. Restricted Shares and Restricted Share Units The Teradata SIP provides for the issuance of restricted shares, as well as restricted share units. These grants consist of both service-based and performance-based awards. Service-based awards typically vest over a three -year period beginning on the effective date of grant. These grants are not subject to future performance measures. The cost of these awards, determined to be the fair market value at the date of grant, is expensed ratably over the vesting period. For substantially all restricted share grants, at the date of grant, the recipient has all rights of a stockholder, subject to certain restrictions on transferability and a risk of forfeiture. A recipient of restricted share units does not have the rights of a stockholder and is subject to restrictions on transferability and risk of forfeiture. For both restricted share grants and restricted share units, any potential dividend rights would be subject to the same vesting requirements as the underlying equity award. As a result, such rights are considered a contingent transfer of value and consequently these equity awards are not considered participating securities. Performance-based grants are subject to future performance measurements over a one -to four -year period. All performance-based shares that are earned in respect of an award will become vested at the end of the performance and/or service period provided the employee is continuously employed by the Company and applicable performance measures and other vesting conditions are met. The fair value of each performance-based award is determined on the grant date, based on the Company’s stock price, and assumes that performance targets will be achieved. Over the performance period, the number of shares of stock that will be issued is adjusted upward or downward based upon management’s assessment of the probability of achievement of performance targets. The ultimate number of shares issued and the related compensation cost recognized as expense will be based on a comparison of the final achievement of performance metrics to the specified targets. The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2017 : Shares in thousands Number of Shares Weighted- Average Grant Date Fair Value per Share Unvested shares at January 1, 2017 4,042 $ 31.57 Granted 2,044 $ 34.88 Vested (1,487 ) $ 33.55 Forfeited/canceled (373 ) $ 29.05 Unvested shares at December 31, 2017 4,226 $ 32.76 The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested. 2017 2016 2015 Weighted-average fair value of restricted share units granted $ 34.88 $ 26.61 $ 32.82 Total fair value of shares vested (in millions) $ 50 $ 61 $ 45 As of December 31, 2017 , there was $98 million of unrecognized compensation cost related to unvested restricted share grants. The unrecognized compensation cost is expected to be recognized over a remaining weighted-average period of 2.4 years . The following table represents the composition of Teradata restricted share unit grants in 2017 : Shares in thousands Number of Shares Weighted- Average Grant Date Fair Value Service-based shares 1,736 $ 36.33 Performance-based shares 308 $ 26.68 Total stock grants 2,044 $ 34.88 Performance-based share units granted as part of our long-term incentive program for certain corporate officers and key executives will be earned based on Teradata's total shareholder return ("TSR") over a three -year performance period relative to the other companies in the S&P 1500 Technology Index. The number of shares issued, as a percentage of the amount subject to the performance share award, could range from 0% to 200% . The grant date fair value of the non-vested performance-based awards was determined using a Monte Carlo simulation model, which utilized multiple input variables that determined the probability of satisfying the market condition requirements applicable to each award. The compensation expense for the award will be recognized if the requisite service is rendered, regardless of whether the market conditions are achieved. Employee Stock Purchase Program The Company’s ESPP, effective on October 1, 2007 , and as amended effective as of January 1, 2013 , provides eligible employees of Teradata and its designated subsidiaries an opportunity to purchase the Company’s common stock at a discount to the average of the highest and lowest sale prices on the last trading day of each month. The ESPP discount was 15% of the average market price and is considered compensatory. Employees may authorize payroll deductions of up to 10% of eligible compensation for common stock purchases. A total of 4 million shares were authorized to be issued under the ESPP, with approximately 0.2 million shares remaining under that authorization at December 31, 2017 . The shares of Teradata common stock purchased by a participant on an exercise date (the last day of each month), for all purposes, are deemed to have been issued and sold at the close of business on such exercise date. Prior to that time, none of the rights or privileges of a stockholder exists with respect to such shares. Employee purchases and aggregate cost were as follows at December 31 : In millions 2017 2016 2015 Employee share purchases 0.6 0.6 0.5 Aggregate cost $ 15 $ 13 $ 17 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Pension and Postemployment Plans. Teradata currently sponsors defined benefit pension plans for certain of its international employees. For those international pension plans for which the Company holds asset balances, those assets are primarily invested in common/collective trust funds (which include publicly traded common stocks, corporate and government debt securities, real estate indirect investments, cash or cash equivalents) and insurance contracts. Postemployment obligations relate to benefits provided to involuntarily terminated employees and certain inactive employees after employment but before retirement. These benefits are paid in accordance with various foreign statutory laws and regulations, and Teradata’s established postemployment benefit practices and policies. Postemployment benefits may include disability benefits, supplemental unemployment benefits, severance, workers’ compensation benefits, continuation of health care benefits and life insurance coverage, and are funded on a pay-as-you-go basis. Pension and postemployment benefit costs for the years ended December 31 were as follows: 2017 2016 2015 In millions Pension Postemployment Pension Postemployment Pension Postemployment Service cost $ 9 $ 7 $ 8 $ 6 $ 8 $ 6 Interest cost 3 1 3 1 3 1 Expected return on plan assets (2 ) — (2 ) — (2 ) — Settlement charge — — 1 — 1 — Amortization of actuarial loss 1 2 1 1 2 — Amortization of prior service (credit) cost (1 ) 1 — 2 — — Divestiture — — (2 ) (1 ) — — Total costs $ 10 $ 11 $ 9 $ 9 $ 12 $ 7 The underfunded amount of pension and postemployment obligations is recorded as a liability in the Company’s consolidated balance sheet. The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31 : Pension Postemployment In millions 2017 2016 2017 2016 Change in benefit obligation Benefit obligation at January 1 $ 120 $ 115 $ 42 $ 49 Service cost 9 8 7 6 Interest cost 3 3 1 1 Plan participant contributions 1 1 — — Actuarial (gain) loss (3 ) 5 12 12 Benefits paid (4 ) (8 ) (15 ) (20 ) Currency translation adjustments 10 (2 ) — (1 ) Divestiture — (2 ) — (5 ) Benefit obligation at December 31 $ 136 $ 120 $ 47 $ 42 Change in plan assets Fair value of plan assets at January 1 $ 64 $ 63 $ — $ — Actual return on plan assets 5 2 — — Company contributions 5 6 — — Benefits paid (4 ) (8 ) — — Currency translation adjustments 4 — — — Plan participant contribution 1 1 — — Fair value of plan assets at December 31 75 64 — — Funded status (underfunded) $ (61 ) $ (56 ) $ (47 ) $ (42 ) Amounts Recognized in the Balance Sheet Non-current assets $ 10 $ 5 $ — $ — Current liabilities (2 ) (1 ) (7 ) (6 ) Non-current liabilities (69 ) (60 ) (40 ) (36 ) Net amounts recognized $ (61 ) $ (56 ) $ (47 ) $ (42 ) Amounts Recognized in Accumulated Other Comprehensive (Loss) Income Unrecognized Net actuarial loss $ 15 $ 21 $ 37 $ 26 Unrecognized Prior service (credit) cost (1 ) (1 ) 3 4 Total $ 14 $ 20 $ 40 $ 30 The following table presents the accumulated pension benefit obligation at December 31 : In millions 2017 2016 Accumulated pension benefit obligation $ 125 $ 110 The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31 : In millions 2017 2016 Projected benefit obligation $ 69 $ 60 Accumulated benefit obligation $ 63 $ 53 Fair value of plan assets $ — $ — The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income: Pension Postemployment In millions 2017 2016 2017 2016 Actuarial (gain) loss arising during the year $ (7 ) $ 5 $ 13 $ 4 Amortization of loss included in net periodic benefit cost (1 ) (1 ) (2 ) (1 ) Prior service (credit) cost arising during the year — — (1 ) 2 Recognition of loss due to settlement — (1 ) — — Foreign currency exchange 2 (1 ) — — Total recognized in other comprehensive (loss) income $ (6 ) $ 2 $ 10 $ 5 The following table presents the amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2018 : In millions Pension Postemployment Net loss to be recognized in other comprehensive income $ 1 $ 4 The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: Pension Benefit Obligations Pension Benefit Cost 2017 2016 2017 2016 2015 Discount rate 2.1% 2.0% 2.0% 2.4% 2.3% Rate of compensation increase 3.3% 3.3% 3.3% 3.2% 3.3% Expected return on plan assets N/A N/A 2.9% 3.0% 3.3% Postemployment Benefit Obligations Postemployment Benefit Cost 2017 2016 2017 2016 2015 Discount rate 2.6% 3.4% 2.6% 3.4% 3.5% Rate of compensation increase 3.0% 3.0% 3.0% 3.0% 3.0% Involuntary turnover rate 2.3% 2.0% 2.3% 2.0% 1.3% The Company determines the expected return on assets based on individual plan asset allocations, historical capital market returns, and long-term interest rate assumptions, with input from its actuaries, investment managers, and independent investment advisors. The company emphasizes long-term expectations in its evaluation of return factors, discounting or ignoring short-term market fluctuations. Expected asset returns are reviewed annually, but are generally modified only when asset allocation strategies change or long-term economic trends are identified. International discount rates were determined by examining interest rate levels and trends within each country, particularly yields on high-quality long-term corporate bonds, relative to our future expected cash flows. The discount rate used for countries with individually insignificant benefit obligation at year-end was derived by matching the plans’ expected future cash flows to the corresponding yields from the Citigroup Pension Liability Index. This yield curve has been constructed to represent the available yields on high-quality fixed-income investments across a broad range of future maturities. Gains and losses have resulted from changes in actuarial assumptions and from differences between assumed and actual experience, including, among other items, changes in discount rates and differences between actual and assumed asset returns. These gains and losses (except those differences being amortized to the market-related value) are only amortized to the extent that they exceed 10% of the higher of the market-related value of plan assets or the projected benefit obligation of each respective plan. Plan Assets. The weighted-average asset allocations at December 31, by asset category are as follows: Actual Asset Allocation as of December 31 Target Asset 2017 2016 Allocation Equity securities 32% 32% 31% Debt securities 41% 42% 47% Insurance (annuity) contracts 17% 17% 16% Real-estate 8% 7% 3% Other 2% 2% 3% Total 100% 100% 100% Fair Value. Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are more fully described in Note 9. The following is a description of the valuation methodologies used for pension assets as of December 31, 2017 . Common/collective trust funds (which include money market funds, equity funds, bond funds, real-estate indirect investments, etc.) : Valued at the net asset value (“NAV”) of shares held by the Plan at year end, as reported to the Plan by the trustee, which represents the fair value of shares held by the Plan. Because the NAV of the shares held in the common/collective trust funds are derived by the value of the underlying investments, the Company has classified these underlying investments as Level 2 fair value measurements. Insurance contracts: Valued by discounting the related future benefit payments using a current year-end market discount rate, which represents the fair value of the insurance contract. The Company has classified these contracts as Level 3 assets for fair value measurement purposes. The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2017 : 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 The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2017 : In millions Insurance Contracts Balance as of January 1, 2017 $ 11 Purchases, sales and settlements, net 1 Balance as of December 31, 2017 $ 12 The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016 : 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, 2016 (Level 1) (Level 2) (Level 3) Money market funds $ 1 $ — $ 1 $ — Equity funds 21 — 21 — Bond/fixed-income funds 27 — 27 — Real-estate indirect investments 4 — 4 — Insurance contracts 11 — — 11 Total assets at fair value $ 64 $ — $ 53 $ 11 The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2016 : In millions Insurance Contracts Balance as of January 1, 2016 $ 10 Purchases, sales and settlements, net 1 December 31, 2016 $ 11 Investment Strategy. Teradata employs several investment strategies across its various international pension plans. In some countries, particularly where Teradata does not have a large employee base, the Company may use insurance (annuity) contracts to satisfy its future pension payment obligations, whereby the Company makes pension plan contributions to an insurance company in exchange for which the pension plan benefits will be paid when the members reach a specified retirement age or on earlier exit of members from the plan. In other countries, the Company may employ local asset managers to manage investment portfolios according to the investment policies and guidelines established by the Company, and with consideration to individual plan liability structure and local market environment and risk tolerances. The Company’s investment policies and guidelines primarily emphasize diversification across and within asset classes to maximize long-term returns subject to prudent levels of risk, with the overall objective of enabling the plans to meet their future obligations. The investment portfolios contain a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across domestic and international stocks, small and large capitalization stocks, and growth and value stocks. Fixed-income assets are diversified across government and corporate bonds. Where applicable, real estate investments are made through real estate securities, partnership interests or direct investment, and are diversified by property type and location. Cash Flows Related to Employee Benefit Plans Cash Contributions. In 2018, the Company expects to contribute approximately $6 million to the international pension plans. Estimated Future Benefit Payments. The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: Pension Postemployment In millions Benefits Benefits Year 2018 $ 5 $ 7 2019 $ 5 $ 6 2020 $ 5 $ 6 2021 $ 6 $ 6 2022 $ 6 $ 6 2023 - 2027 $ 34 $ 24 Savings Plans. U.S. employees and many international employees participate in defined contribution savings plans. These plans generally provide either a specified percent of pay or a matching contribution on participating employees’ voluntary elections. The Company’s matching contributions typically are subject to a maximum percentage or level of compensation. Employee contributions can be made pre-tax, after-tax or a combination thereof. The following table identifies the expense for the U.S. and International subsidiary savings plans for the years ended December 31 : In millions 2017 2016 2015 U.S. savings plan $ 21 $ 19 $ 22 International subsidiary savings plans $ 17 $ 16 $ 18 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As a portion of the Company’s operations and revenue occur outside the U.S. and in currencies other than the U.S. dollar, the Company is exposed to potential gains and losses from changes in foreign currency exchange rates. To mitigate the impact of currency fluctuations, the Company uses foreign exchange forward contracts to hedge transactional exposures resulting predominantly from foreign currency denominated inter-company receivables and payables. The forward contracts are designated as fair value hedges of specified foreign currency denominated inter-company receivables and payables and generally mature in three months or less. The Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue leveraged derivative instruments. By using derivative financial instruments to hedge exposures to changes in exchange rates, the Company exposes itself to credit risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts. All derivatives are recognized in the Consolidated Balance Sheets at their fair value. The fair values of foreign exchange contracts are based on market spot and forward exchange rates and represent estimates of possible value that may not be realized in the future. Changes in the fair value of derivative financial instruments, along with the loss or gain on the hedged asset or liability, are recorded in current period earnings. The notional amounts represent agreed-upon amounts on which calculations of dollars to be exchanged are based, and are an indication of the extent of Teradata’s involvement in such instruments. These notional amounts do not represent amounts exchanged by the parties and, therefore, are not a measure of the instruments. Across its portfolio of contracts, Teradata has both long and short positions relative to the U.S. dollar. As a result, Teradata’s net involvement is less than the total contract notional amount of the Company’s foreign exchange forward contracts. The following table identifies the contract notional amount of the Company’s foreign exchange forward contracts at December 31 : In millions 2017 2016 Contract notional amount of foreign exchange forward contracts $ 147 $ 156 Net contract notional amount of foreign exchange forward contracts $ 23 $ 16 The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2017 and 2016 , were not material. Gains and losses from the Company’s fair value hedges (foreign currency forward contracts and related hedged items) were immaterial for the years ended December 31, 2017 , 2016 and 2015 . Gains and losses from foreign exchange forward contracts are fully recognized each period and reported along with the offsetting gain or loss of the related hedged item, either in cost of products or in other income, depending on the nature of the related hedged item. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to proceedings, lawsuits, governmental investigations, claims and other matters, including those that relate to the environment, health and safety, employee benefits, export compliance, intellectual property, tax matters, and other regulatory compliance and general matters. As first disclosed in the Company’s Form 10-Q for the second quarter of 2017, through internal processes, the Company discovered certain questionable expenditures for travel, gifts and other expenses at one of its international subsidiaries doing business in a single foreign country, Turkey. Teradata promptly initiated an internal investigation into the matter, with the assistance of outside counsel and forensic accountants, to determine whether the expenditures may have violated the U.S. Foreign Corrupt Practices Act (“FCPA”) or other potentially applicable anti-corruption laws. In February 2017, the Company voluntarily contacted the SEC and the U.S. Department of Justice (“DOJ”) to alert them to the relevant events and the Company's internal investigation. Teradata has fully cooperated with the government regarding the status of the Company's internal investigation and findings, including remedial actions and terminations. On January 16, 2018, the SEC advised that its staff will not recommend any enforcement action by the SEC against Teradata and that its investigation into this matter is closed. On February 20, 2018, the DOJ also advised the Company that it will not take any enforcement action and that its investigation into this matter is closed. Guarantees and Product Warranties. Guarantees associated with the Company’s business activities are reviewed for appropriateness and impact to the Company’s financial statements. Periodically, the Company’s customers enter into various leasing arrangements coordinated with a leasing company. In some instances, the Company guarantees the leasing company a minimum value at the end of the lease term on the leased equipment. As of December 31, 2017 , the maximum future payment obligation of this guaranteed value and the associated liability balance was $4 million . The Company provides its customers a standard manufacturer’s warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. Estimated future obligations due to warranty claims are based upon historical factors such as labor rates, average repair time, travel time, number of service calls and cost of replacement parts. For each consummated sale, the Company recognizes the total customer revenue and records the associated warranty liability using pre-established warranty percentages for that product class. The following table identifies the activity relating to the warranty reserve liability for the years ended December 31 : In millions 2017 2016 2015 Beginning balance at January 1 $ 5 $ 6 $ 7 Accruals for warranties issued 6 8 9 Settlements (in cash or kind) (7 ) (9 ) (10 ) Balance at end of period $ 4 $ 5 $ 6 The Company also offers extended and/or enhanced coverage to its customers in the form of maintenance contracts. The Company accounts for these contracts by deferring the related maintenance revenue over the extended and/or enhanced coverage period. Costs associated with maintenance support are expensed as incurred. Amounts associated with these maintenance contracts are not included in the table above. In addition, the Company provides its customers with certain indemnification rights. In general, the Company agrees to indemnify the customer if a third party asserts patent or other infringement on the part of the customer for its use of the Company’s products. The Company has indemnification obligations under its charter and bylaws to its officers and directors, and has entered into indemnification agreements with the officers and directors of its subsidiaries. From time to time, the Company also enters into agreements in connection with its acquisition and divesture activities that include indemnification obligations by the Company, including the sale of the marketing applications business. The fair value of these indemnification obligations is typically not readily determinable due to the conditional nature of the Company’s potential obligations and the specific facts and circumstances involved with each particular agreement. As such, the Company has generally not recorded a liability in connection with these indemnification arrangements. Historically, payments made by the Company under these types of agreements have not had a material effect on the Company’s consolidated financial condition, results of operations or cash flows. Leases. Teradata conducts certain of its sales and administrative operations using leased facilities, the initial lease terms of which vary in length. Many of the leases contain renewal options and escalation clauses that are not material to the overall lease portfolio. Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2017 , for the following fiscal years were: In millions Total Amounts 2018 2019 2020 2021 2022 and Thereafter Operating lease obligations $ 81 $ 27 $ 20 $ 16 $ 8 $ 10 Sublease rentals (14 ) (6 ) (5 ) (3 ) — — Total committed operating leases less sublease rentals $ 67 $ 21 $ 15 $ 13 $ 8 $ 10 The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31 : In millions 2017 2016 2015 Rental expense $ 24 $ 24 $ 26 Sublease rental income $ 5 $ 3 $ 3 The Company had no contingent rentals for these periods. Concentrations of Risk. The Company is potentially subject to concentrations of credit risk on accounts receivable and financial instruments such as hedging instruments, and cash and cash equivalents. Credit risk includes the risk of nonperformance by counterparties. The maximum potential loss may exceed the amount recognized on the balance sheet. Exposure to credit risk is managed through credit approvals, credit limits, selecting major international financial institutions (as counterparties to hedging transactions) and monitoring procedures. Teradata’s business often involves large transactions with customers, and if one or more of those customers were to default in its obligations under applicable contractual arrangements, the Company could be exposed to potentially significant losses. However, management believes that the reserves for potential losses were adequate at December 31, 2017 and 2016 . The Company is also potentially subject to concentrations of supplier risk. Our hardware components are assembled exclusively by Flex Ltd. (“Flex”). Flex procures a wide variety of components used in the manufacturing process on our behalf. Although many of these components are available from multiple sources, Teradata utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. Typically, these preferred suppliers maintain alternative processes and/or facilities to ensure continuity of supply. Given the Company’s strategy to outsource its manufacturing activities to Flex and to source certain components from single suppliers, a disruption in production at Flex or at a supplier could impact the timing of customer shipments and/or Teradata’s operating results. In addition, a significant change in the forecasts to any of these preferred suppliers could result in purchase obligations or components that may be in excess of demand. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as significant other observable inputs, such as quoted prices in active markets for similar assets or liabilities, or quoted prices in less-active markets for identical assets; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assets and liabilities measured at fair value on a recurring basis include money market funds and foreign currency exchange contracts. A portion of the Company’s excess cash reserves are held in money market funds which generate interest income based on the prevailing market rates. Money market funds are included in cash and cash equivalents in the Company’s balance sheet. Money market fund holdings are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. When deemed appropriate, the Company minimizes its exposure to changes in foreign currency exchange rates through the use of derivative financial instruments, specifically, forward foreign exchange contracts. The fair value of these contracts are measured at the end of each interim reporting period using observable inputs other than quoted prices, specifically market spot and forward exchange rates. As such, these derivative instruments are classified within Level 2 of the valuation hierarchy. Fair value gains for open contracts are recognized as assets and fair value losses are recognized as liabilities. The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2017 and 2016 , were not material. Any realized gains or losses would be mitigated by corresponding gains or losses on the underlying exposures. Further information on the Company’s use of forward foreign exchange contracts is included in Note 7. The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 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, 2017 $ 501 $ 501 $ — $ — Money market funds at December 31, 2016 $ 473 $ 473 $ — $ — |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Teradata's $600 million term loan is payable in quarterly installments, which commenced on March 31, 2016, with all remaining principal due in March 2020. The outstanding principal amount under the term loan agreement bears interest at a floating rate based upon a negotiated base rate or a Eurodollar rate plus a margin based on the leverage ratio of the Company. As of December 31, 2017 , the term loan principal outstanding was $540 million and carried an interest rate of 3.375% . Unamortized deferred issuance costs of approximately $1 million are being amortized over the five -year term of the loan. The Company was in compliance with all covenants as of December 31, 2017. Annual contractual maturities of outstanding principal on the term loan at December 31, 2017 , are as follows: In millions 2018 $ 60 2019 68 2020 412 Total $ 540 The following table presents interest expense on borrowings for the years ended December 31 : In millions 2017 2016 2015 Interest expense $ 15 $ 12 $ 9 Teradata’s term loan is recognized on the Company’s balance sheet at its unpaid principal balance, and is not subject to fair value measurement. However, given that the loan carries a variable rate, the Company estimates that the unpaid principal balance of the term loan would approximate its fair value. If measured at fair value in the financial statements, the Company’s term loan would be classified as Level 2 in the fair value hierarchy. Teradata's revolving credit facility (the “Credit Facility”) has a borrowing capacity of $ 400 million . The Credit Facility ends on March 25, 2020 at which point any remaining outstanding borrowings would be due for repayment unless extended by agreement of the parties for up to two additional one -year periods. The interest rate charged on borrowings pursuant to the Credit Facility can vary depending on the interest rate option the Company chooses to utilize and the Company’s leverage ratio at the time of the borrowing. In the near term, Teradata would anticipate choosing a floating rate based on the London Interbank Offered Rate (“LIBOR”). The Credit Facility is unsecured and contains certain representations and warranties, conditions, affirmative, negative and financial covenants, and events of default customary for such facilities. As of December 31, 2017 , the Company had $ 240 million in borrowings outstanding under the Credit Facility, which carried an interest rate of 5.0% , leaving $ 160 million in additional borrowing capacity available. Unamortized deferred costs on the original credit facility and new lender fees of approximately $1 million are being amortized over the five -year term of the credit facility. The Company was in compliance with all covenants as of December 31, 2017 . |
Segment, Other Supplemental Inf
Segment, Other Supplemental Information and Concentrations | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment, Other Supplemental Information and Concentrations | Segment, Other Supplemental Information and Concentrations Effective July 1, 2016, following the sale of the marketing applications business, Teradata is managing its business in two operating segments: (1) Americas region (North America and Latin America); and (2) International region (Europe, Middle East, Africa, Asia Pacific and Japan). For purposes of discussing results by segment, management excludes the impact of certain items, consistent with how management evaluates the performance of each segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by Teradata management to make decisions regarding the segments and to assess financial performance. The chief operating decision maker evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross profit. For management reporting purposes assets are not allocated to the segments . The following table presents segment revenue and segment gross profit for the Company for the years ended December 31 : In millions 2017 2016 2015 Segment revenue Americas Data and Analytics $ 1,195 $ 1,334 $ 1,470 International Data and Analytics 961 919 907 Total Data and Analytics 2,156 2,253 2,377 Marketing Applications — 69 153 Total revenue 2,156 2,322 2,530 Segment gross profit Americas Data and Analytics 676 796 871 International Data and Analytics 434 445 452 Total Data and Analytics 1,110 1,241 1,323 Marketing Application — 34 63 Total segment gross profit 1,110 1,275 1,386 Stock-based compensation expense 13 14 13 Amortization of acquisition-related intangible assets 1 2 16 Acquisition, integration and reorganization-related costs 6 9 11 Amortization of capitalized software costs 68 62 70 Selling, general and administrative expenses 652 664 765 Research and development expenses 306 212 228 Impairment of goodwill, acquired intangibles and other assets — 80 478 Total income (loss) from operations $ 64 $ 232 $ (195 ) Prior period segment information has been reclassified to conform to the current period presentation. Certain items, including amortization of certain capitalized software costs, were excluded from segment gross profit to conform to the way the Company manages and reviews the results by segment. The following table presents a further disaggregation of revenue for the Company for the years ended December 31: In millions 2017 2016 2015 Recurring revenue $ 1,047 $ 978 $ 956 Product - perpetual licenses and hardware 429 600 752 Consulting services 680 675 669 Marketing applications — 69 153 Total revenue $ 2,156 $ 2,322 $ 2,530 Recurring revenue is intended to depict the over-time revenue recognition model for these revenue streams. The recurrence of these revenue streams in future periods depends on a number of factors including contractual term periods and customers’ renewal decisions. The following table presents revenues by geographic area for the years ended December 31 : In millions 2017 2016 2015 United States $ 1,089 $ 1,246 $ 1,428 Americas (excluding United States) 107 123 125 International 960 953 977 Total revenue $ 2,156 $ 2,322 $ 2,530 The following table presents property and equipment by geographic area at December 31 : In millions 2017 2016 United States $ 119 $ 113 Americas (excluding United States) 11 4 International 32 21 Property and equipment, net $ 162 $ 138 Concentrations. No single customer accounts for more than 10% of the Company's revenue . As of December 31, 2017 , the Company is not aware of any significant concentration of business transacted with a particular customer that could, if suddenly eliminated, have a material adverse effect on the Company’s operations. The Company's hardware components are assembled exclusively by Flex. In addition, the Company utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. There can be no assurances that a disruption in production at Flex or at a supplier would not have a material adverse effect on the Company's operations. |
Business Combinations and Other
Business Combinations and Other Investment Activities | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations and Other Investment Activities | Business Combinations and Other Investment Activities During 2017, the Company completed one immaterial business acquisition, which complements and strengthens the Company's research and development department, and released hold-back amounts from prior-year acquisitions for $21 million . During 2016 , the Company completed one immaterial business acquisition, which complements and strengthens the Company's global portfolio, and released hold-back amounts from several prior-year acquisitions for $16 million . The Company also sold the marketing applications business on July 1, 2016 (see Note 15). During 2015 , the Company completed two immaterial business acquisitions for $17 million , which complemented and strengthened the Company's global portfolio. One of the acquisitions pertained to the marketing applications business, which the Company exited on July 1, 2016. In addition, the Company sold two equity investments for $85 million and recognized a gain of $57 million . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following table provides information on changes in accumulated other comprehensive (loss) income (“AOCI”), net of tax, for the years ended December 31 : In millions Available-for-sale securities Defined benefit plans Foreign currency translation adjustments Total AOCI Balance as of December 31, 2014 $ 31 $ (24 ) $ (11 ) $ (4 ) Other comprehensive loss before reclassifications (5 ) (8 ) (36 ) (49 ) Amounts reclassified from AOCI (26 ) 3 — (23 ) Net other comprehensive loss (31 ) (5 ) (36 ) (72 ) 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 ) The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income for the years ended December 31: In millions AOCI Component Location 2017 2016 2015 Defined benefit plans Cost of services $ (3 ) $ (3 ) $ (2 ) Defined benefit plans Selling, general and administrative expenses (2 ) (1 ) (1 ) Available for sale securities Other income — — 42 Tax portion Income tax benefit (expense) 1 1 (16 ) Total reclassifications Net (loss) income $ (4 ) $ (3 ) $ 23 Further information on the Company’s defined benefit plans is included in Note 6. |
Reorganization and Business Tra
Reorganization and Business Transformation | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Reorganization and Business Transformation | Reorganization and Business Transformation In the fourth quarter of 2015 the Company announced a plan to realign Teradata’s business by reducing its cost structure and focusing on the Company’s core data and analytics business. This business transformation included exiting the marketing applications business (see Note 15), rationalizing costs, and modifying the Company’s go-to-market approach. The Company incurred the following costs related to these actions for the years ended December 31: In millions 2017 2016 2015 Employee severance and other employee related cost $ 2 $ 14 $ 4 Asset write-downs — 80 140 Professional services, legal and other associated cost 24 35 8 Total reorganization and business transformation cost $ 26 $ 129 $ 152 The charges for asset write-downs were for non-cash write-downs of goodwill, acquired intangibles and other assets. In addition to the costs and charges incurred above, the Company made cash payments of less than $1 million in 2017, $20 million in 2016, and $14 million in 2015 for employee severance that did not have a material impact on its Statement of Operations due to Teradata accounting for its postemployment benefits under Accounting Standards Codification 712 , Compensation - Nonretirement Postemployment Benefits (“ASC 712”), which uses actuarial estimates and defers the immediate recognition of gains or losses. As of December 31, 2017, the Company does not have any significant liabilities associated with these transformation activities. |
Impairment and Sale of the Mark
Impairment and Sale of the Marketing Applications Business | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Impairment and Sale of the Marketing Applications Business | Impairment and Sale of the Marketing Applications Business The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying amount. During the second quarter of 2015, the Company determined that indicators were present in the marketing applications business which would suggest the fair value may have declined below the carrying value. The indicators were primarily lower than forecasted revenue and profitability levels for 2015 and future periods. Based on our analysis, the implied fair value of goodwill was substantially lower than the carrying value of goodwill. As a result, the Company recorded an impairment charge of $340 million during the second quarter of 2015. In the fourth quarter of 2015, the Company committed to a plan to exit the marketing applications business. The assets and liabilities for this business, which were included within our marketing applications segment, were classified as held for sale in the fourth quarter of 2015 and, therefore, the corresponding depreciation and amortization expense ceased at that time. The divestiture was not presented as discontinued operations in our consolidated financial statements because it did not have a major effect on the Company's operations and financial results. The Company then performed a goodwill impairment analysis of the business to be disposed of. As a result of this analysis, the Company recognized an additional goodwill impairment of $97 million in the fourth quarter of 2015. In addition, acquired intangible assets were reduced by $41 million to adjust the carrying amount of the disposal group's net assets and liabilities down to its fair value less cost to sell. On April 22, 2016, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) with TMA Solutions, L.P., a Cayman Islands exempted limited partnership and affiliate of Marlin Equity Partners (“Marlin Equity”), to sell the marketing applications business for $90 million in cash, subject to a post-closing adjustment for working capital, debt and other metrics. We recognized an impairment of goodwill of $57 million and acquired intangibles of $19 million in the first quarter of 2016 to adjust the carrying value of the net assets of our marketing applications business to fair value less cost to sell. P rior to the sale that occurred on July 1, 2016, the marketing applications business that was classified as held for sale generated revenue of $69 million and an operating loss of $112 million (which includes loss from impairment of goodwill and acquired intangibles of $76 million ) for the six months ended June 30, 2016. For the year ended December 31, 2015, the Company generated revenue of $153 million and an operating loss of $561 million (which includes loss from impairment of goodwill and acquired intangibles of $478 million ). The net assets held for sale as of July 1, 2016 were $87 million . O n July 1, 2016, pursuant to the Purchase Agreement, Teradata completed the sale of Teradata’s marketing applications business to Marlin Equity. The purchase price received for this business was approximately $92 million in cash, after a post-closing adjustment for working capital, debt and other metrics. Transaction costs and post-closing obligations were approximately $5 million . Upon completion of the divestiture of the held for sale assets in July 2016, no material gain or loss was recognized as the carrying value of the held for sale assets was equal to the purchase price received less costs to sell. The Company recorded tax expense of approximately $22 million in the third quarter of 2016 related to this transaction. The total tax expense, of which $14 million was cash taxes due to having zero tax basis in goodwill, was calculated based on the amount of proceeds allocated to the various jurisdictions in accordance with the Purchase Agreement at the local statutory rates. |
Quarterly Information (unaudite
Quarterly Information (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (unaudited) | Quarterly Information (unaudited) In millions, except per share amounts First (1) Second Third Fourth (2) 2017 Total revenues $ 491 $ 513 $ 526 $ 626 Gross profit $ 224 $ 242 $ 250 $ 306 Operating (loss) income $ (1 ) $ (1 ) $ 7 $ 59 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 ) 2016 Total revenues $ 545 $ 599 $ 552 $ 626 Gross profit $ 269 $ 310 $ 294 $ 315 Operating (loss) income $ (42 ) $ 87 $ 89 $ 98 Net (loss) income $ (46 ) $ 64 $ 49 $ 58 Net (loss) income per share: Basic $ (0.36 ) $ 0.49 $ 0.38 $ 0.45 Diluted $ (0.36 ) $ 0.49 $ 0.37 $ 0.44 (1) Loss from operation for the three months ended March 31, 2016 includes goodwill and acquired intangibles impairment charges of $76 million for the marketing application business. (2) Loss from operations for the three months ended December 31, 2017 includes $126 million tax impact related to 2017 U.S. Tax Reform. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events From February 8, 2018 through February 22, 2018, the Company purchased approximately 1.4 million shares for approximately $49 million . As of February 23, 2018, the Company had approximately $462 million of share repurchase authorization remaining under its general share repurchase program. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (In millions) 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, 2017 $ 19 $ (6 ) $ — $ 1 $ 12 Year ended December 31, 2016* $ 22 $ 3 $ — $ 6 $ 19 Year ended December 31, 2015** $ 19 $ 5 $ — $ 2 $ 22 Deferred tax valuation allowance Year ended December 31, 2017 $ 26 $ 6 $ — $ — $ 32 Year ended December 31, 2016 $ 25 $ 1 $ — $ — $ 26 Year ended December 31, 2015 $ 20 $ 5 $ — $ — $ 25 * Above amount included in the deductions within column D is $5 million of reserves transferred in the sale of the marketing application business. ** Above amounts include allowances classified as held for sale . |
Description of Business, Basi26
Description of Business, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract] | |
Description of the Business | Description of the Business. Teradata Corporation (“Teradata” or the “Company”) is a global leader in analytic data solutions and services. Our analytic data solutions comprise software, hardware, and related business consulting and support services for analytics across a company’s entire analytical ecosystem. |
Basis of Presentation | Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition. Teradata’s solution offerings typically include software, unspecified when-and-if-available software upgrades, hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when: • Persuasive evidence of an arrangement exists • The products 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 Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer. The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for perpetual software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for unspecified software upgrades or enhancements on a when-and-if-available basis are recognized straight-line over the term of the arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services 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. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue. The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above. For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period. Teradata’s analytic software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the analytic software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount). VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and when-and-if-available software upgrades (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the analytics solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs. In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products. When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices. The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the four previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace. The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2017 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP. Teradata’s new go-to-market offerings introduced in the second half of 2016, which are part of the overall business transformation strategy, include the following offerings: • Subscription license - Teradata’s subscription licenses include a right-to-use license and are typically sold with PCS. The revenue for these arrangements is typically recognized ratably over the contract term. The term of these arrangements varies between one and five years. • Cloud - These arrangements include a right-to-access software license that the customer does not have a right to take possession of without significant penalty during the hosting period and the services can be delivered through a managed or public cloud. These arrangements are recognized outside the software rules and revenue is recognized ratably over the contract term. The term of these arrangements typically varies between one and five years. • Rentals - Teradata owns the equipment and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract. The term of these arrangements typically varies between one and three years and are generally accounted for as operating leases. • Service model - Teradata owns the equipment to provide the service on-premises. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. The term of these arrangements varies between one and five years. |
Shipping and Handling | Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of (Loss) Income. |
Cash and Cash Equivalents | Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues. |
Inventories | Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost. |
Available-for-sale Securities | Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive (loss) income. Realized gains and losses are included in other income and expense in the Consolidated Statements of (Loss) Income. |
Long-Lived Assets | Long-Lived Assets Property and Equipment . Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter. |
Capitalized Software | Capitalized Software . Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use. Costs incurred for the development of analytic applications are expensed as incurred based on the frequency and agile nature of development. Prior to December 31, 2016, costs incurred for the development of analytic database software that will be sold, leased or otherwise marketed were capitalized between technological feasibility and the point at which a product was ready for general release. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications are complete. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred. Our research and development efforts have recently become more driven by market requirements and rapidly changing customers' needs. In addition, the Company started applying agile development methodologies to help respond to new technologies and trends. Agile development methodologies are characterized by a more dynamic development process with more frequent and iterative revisions to a product release features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, the Company did not capitalize any amounts for external-use software development costs in 2017 due to the relatively short duration between the completion of the working model and the point at which a product is ready for general release. Prior capitalized costs will continue to be amortized under the greater of revenue-based or straight-line method over the estimated useful life. The following table identifies the activity relating to capitalized software: Internal-use Software External-use Software In millions 2017 2016 2015 2017 2016 2015 Beginning balance at January 1 $ 13 $ 13 $ 13 $ 174 $ 177 $ 186 Capitalized 9 6 6 — 59 61 Amortization (6 ) (6 ) (6 ) (69 ) (62 ) (70 ) Ending balance at December 31 $ 16 $ 13 $ 13 $ 105 $ 174 $ 177 The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is: Actual For the years ended (estimated) In millions 2017 2018 2019 2020 2021 2022 Internal-use software amortization expense $ 6 $ 7 $ 7 $ 7 $ 7 $ 6 External-use software amortization expense $ 69 $ 49 $ 34 $ 22 $ — $ — Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2017 and does not include any new capitalization for future periods. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. |
Goodwill | Goodwill . Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. |
Warranty | Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims. |
Research and Development Costs | Research and Development Costs. Research and development costs are expensed as incurred (except for the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support. |
Pension and Postemployment Benefits | Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2017 . Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service. The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension and postemployment accounting rules. |
Foreign Currency | Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income. |
Income Taxes | Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. For the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment of or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. |
Stock-based Compensation | Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted share awards and other stock awards. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Revenue Recognition. In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five-step process which includes the following: (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 entity satisfies a performance obligation. The new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application (modified retrospective method). The Company will adopt the new accounting guidance effective January 1, 2018 by utilizing the modified retrospective method. The Company is still evaluating and finalizing the impact on its consolidated financial position, results of operations and cash flows. Although the Company is still evaluating the impact on its consolidated financial statements, the Company believes the most significant impacts will likely include the following items: • As the Company transitions to the new go-to-market offerings, such as subscription-based licenses rather than perpetual licenses, the Company could potentially see a more significant impact in the amount of revenue recognized over time under the current rules but upfront under the new rules. This impact will result in revenue that is adjusted to retained earnings in the period of adoption and therefore not recognized in future periods or restated to prior periods due to the Company applying the modified retrospective method of adoption. • The Company currently expenses contract acquisition costs and believes that the requirement to defer incremental contract acquisition costs and recognize them over the term of the contract to which the costs relate will have an impact, especially as the Company transitions to longer-term, over-time revenue contracts. • The amount of revenue allocated to the delivered items and recognized upfront utilizing the relative selling price model is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions ( i.e ., the non-contingent amount) under current rules. Under the new rules, the amounts allocated to delivered items and recognized upfront could be higher if it is probable that a significant reversal in the amount of revenue recognized will not occur in future periods upon the delivery of additional items or meeting other specified performance conditions; and • The new standard will impact our internal control environment, including our financial statement disclosure controls, business process controls, new systems and processes, and enhancements to existing systems and processes. The Company expects to record approximately $20 million of adjustments to retained earnings for the revenue-related items discussed above. The Company also expects to record approximately $15 million of deferred compensation costs upon adoption that will then be amortized in future periods. The Company does not expect that the new standard will result in substantive changes in our performance obligations or the amounts of revenue allocated between multiple performance obligations, with the exception of contingent revenue discussed above. The Company is still in the process of evaluating and finalizing these impacts, and our initial assessment may change as the Company continues with implementing new systems, processes, accounting policies and internal controls. Leases. In February 2016, the FASB issued new guidance which requires a lessee to account for leases as finance or operating leases. Both leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases to determine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact of this update on its consolidated financial statements. We currently believe that the most significant changes will be related to the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for real estate and equipment leases that are currently classified as operating leases and therefore not recorded on the consolidated balance sheets. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . In August 2016, the FASB issued an update addressing eight specific cash flow issues to reduce diversity in practice. The amended guidance is effective for fiscal years beginning after December 31, 2017, and for interim periods within those years. Early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material. Financial Instruments. In January 2016, the FASB issued new guidance which enhances the reporting model for financial instruments and related disclosures. This update requires equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The provisions are effective for public entities with fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, in certain circumstances. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material. Intra-entity asset transfers. In October 2016, the FASB issued accounting guidance to simplify the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Under this guidance, companies will be required to recognize the income tax consequences of an intra-entity asset transfer when the transfer occurs. Current guidance prohibits companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the period of adoption. The guidance is effective for periods beginning after December 15, 2017 and early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material. Classification of restricted cash . In December 2016, the FASB issued accounting guidance to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. Under this guidance, companies will be required to present restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The guidance is required to be applied retrospectively and is effective for periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material. Clarification on the definition of a business . In January 2017, the FASB issued accounting guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material. Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost. In March 2017, the FASB issued accounting guidance for “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”. The amendment requires the service cost component of net periodic benefit cost be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period and other components of the net periodic benefit cost be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. For public entities, the amendments are effective for interim and annual reporting periods beginning after December 15, 2017. The Company will adopt this amended guidance in the first quarter of 2018. The retroactive adoption of this standard will result in an increase in operating income and a corresponding decrease in other income (primarily related to the return on pension assets) for the years ended December 31 of $4 million in 2017 and $3 million in 2016. Stock Compensation. In May 2017, the FASB issued accounting guidance for "Compensation—Stock Compensation (Topic 718) - Scope of Modification Accounting". The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this update. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect any impact on its consolidated financial statements. Derivatives and Hedging. In August 2017, the FASB issued amendments to hedge accounting guidance. These amendments are intended to better align a company’s risk management strategies and financial reporting for hedging relationships. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. In addition, the new guidance amends presentation and disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including the interim periods within those years. The guidance requires the use of a modified retrospective approach. The Company is currently evaluating the impact of the guidance on our consolidated financial statements. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued guidance allowing companies the option to reclassify to retained earnings the tax effects related to items in Accumulated other comprehensive income (loss) as a result of the Tax Cuts and Jobs Act that was enacted on December 22, 2017. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. This guidance should be applied either in the period of adoption or retrospectively to each period in which the effects of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of the guidance on our consolidated financial statements. Recently Adopted Guidance Simplifying the measurement for goodwill . In January 2017, the FASB issued guidance to simplify the accounting for the impairment of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company early adopted this accounting guidance effective January 1, 2017. This amendment did not have an impact on the Company's consolidated financial statements. |
Description of Business, Basi27
Description of Business, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract] | |
Schedule Of Depreciation Expense | Total depreciation expense on the Company’s property and equipment for December 31 was as follows: In millions 2017 2016 2015 Depreciation expense $ 55 $ 49 $ 53 |
Schedule Of Activities Relating To Capitalized Software | The following table identifies the activity relating to capitalized software: Internal-use Software External-use Software In millions 2017 2016 2015 2017 2016 2015 Beginning balance at January 1 $ 13 $ 13 $ 13 $ 174 $ 177 $ 186 Capitalized 9 6 6 — 59 61 Amortization (6 ) (6 ) (6 ) (69 ) (62 ) (70 ) Ending balance at December 31 $ 16 $ 13 $ 13 $ 105 $ 174 $ 177 |
Aggregate Amortization Expense for Internal and External-Use Software | The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is: Actual For the years ended (estimated) In millions 2017 2018 2019 2020 2021 2022 Internal-use software amortization expense $ 6 $ 7 $ 7 $ 7 $ 7 $ 6 External-use software amortization expense $ 69 $ 49 $ 34 $ 22 $ — $ — |
Schedule Of Basic And Diluted Earnings Per Share | The components of basic and diluted earnings (loss) per share are as follows: For the years ended December 31 In millions, except (loss) earnings per share 2017 2016 2015 Net (loss) income attributable to common stockholders $ (67 ) $ 125 $ (214 ) Weighted average outstanding shares of common stock 125.8 129.7 139.6 Dilutive effect of employee stock options, restricted shares and other stock awards — 1.8 — Common stock and common stock equivalents 125.8 131.5 139.6 Earnings (loss) per share: Basic $ (0.53 ) $ 0.96 $ (1.53 ) Diluted $ (0.53 ) $ 0.95 $ (1.53 ) |
Supplemental Financial Inform28
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | At December 31 In millions 2017 2016 Accounts receivable Trade $ 559 $ 561 Other 7 6 Accounts receivable, gross 566 567 Less: allowance for doubtful accounts (12 ) (19 ) Total accounts receivable, net $ 554 $ 548 Inventories Finished goods $ 18 $ 20 Service parts 12 14 Total inventories $ 30 $ 34 Property and equipment Land $ 8 $ 8 Buildings and improvements 82 77 Machinery and other equipment 404 354 Property and equipment, gross 494 439 Less: accumulated depreciation (332 ) (301 ) Total property and equipment, net $ 162 $ 138 Other current liabilities Sales and value-added taxes $ 30 $ 28 Pension and other postemployment plan liabilities 2 7 Other 70 53 Total other current liabilities $ 102 $ 88 Deferred revenue Deferred revenue, current $ 414 $ 369 Long-term deferred revenue 85 14 Total deferred revenue $ 499 $ 383 Other long-term liabilities Transition tax $ 133 $ — Uncertain tax positions 14 20 Other 2 12 Total other long-term liabilities $ 149 $ 32 |
Goodwill and Acquired Intangi29
Goodwill and Acquired Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Operating Segment | The following table identifies the activity relating to goodwill by operating segment: In millions Balance at December 31, 2016 Additions Currency Balance at December 31, 2017 Goodwill Americas Data and Analytics $ 251 $ 2 $ — $ 253 International Data and Analytics 139 — 7 146 Total goodwill $ 390 $ 2 $ 7 $ 399 |
Gross Carrying Amount and Accumulated Amortization for Teradata's Acquired Intangible Assets | The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: December 31, 2017 December 31, 2016 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 $ 43 $ (20 ) $ 71 $ (61 ) Trademarks/trade names 5 — — 1 (1 ) In-process research and development 5 — — 5 (4 ) Total $ 43 $ (20 ) $ 77 $ (66 ) |
Aggregate Amortization Expense for Acquired Intangible Assets | The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is: Actual For the years ended (estimated) In millions 2015 2016 2017 2018 2019 2020 2021 2022 Amortization expense $ 40 $ 10 $ 8 $ 7 $ 6 $ 4 $ 4 $ 2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Taxes | For the years ended December 31, income (loss) before income taxes consisted of the following: In millions 2017 2016 2015 Income (loss) before income taxes United States $ (26 ) $ 93 $ (88 ) Foreign 84 128 (56 ) Total income (loss) before income taxes $ 58 $ 221 $ (144 ) |
Income Tax Expense | For the years ended December 31, income tax expense consisted of the following: In millions 2017 2016 2015 Income tax expense Current Federal $ 132 $ 67 $ 74 State and local 2 7 9 Foreign 25 25 26 Deferred Federal (22 ) 7 (19 ) State and local (4 ) 1 (3 ) Foreign (8 ) (11 ) (17 ) Total income tax expense $ 125 $ 96 $ 70 Effective income tax rate 215.5 % 43.4 % (48.6 %) |
The Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate | The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31 : In millions 2017 2016 2015 Income tax expense at the U.S. federal tax rate 35.0 % 35.0 % 35.0 % Foreign income tax differential (18.0 )% (13.2 )% 14.0 % State and local income taxes (11.0 )% 0.2 % 0.5 % U.S. permanent book/tax differences (12.0 )% (0.1 )% 3.1 % Change in valuation allowance for California R&D credit 10.0 % 0.8 % (3.4 )% U.S. manufacturing deduction permanent difference (8.0 )% (3.5 )% 5.5 % Goodwill impairment — % 8.9 % (100.1 )% Tax impact of sale of marketing applications business — % 9.9 % — % Impact of excess tax benefits and tax deficiencies — % 2.2 % — % Tax impact of U.S. tax law change - IRC Section 987 — % 3.5 % — % Deferred tax impact from U.S. rate change (27.0 )% — % — % Tax impact of transition Tax- U.S. tax reform 250.0 % — % — % Other, net (3.5 )% (0.3 )% (3.2 )% Effective income tax rate 215.5 % 43.4 % (48.6 )% |
Deferred Income Tax Assets and Liabilities | Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows: In millions 2017 2016 Deferred income tax assets Employee pensions and other liabilities $ 50 $ 59 Other balance sheet reserves and allowances 13 18 Tax loss and credit carryforwards 59 53 Deferred revenue 3 3 Other 2 — Total deferred income tax assets 127 133 Valuation allowance (32 ) (26 ) Net deferred income tax assets 95 107 Deferred income tax liabilities Intangibles and capitalized software 30 63 Property and equipment 12 22 Other — 6 Total deferred income tax liabilities 42 91 Total net deferred income tax assets $ 53 $ 16 |
Liability Related to Uncertain Tax Positions | Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31 : In millions 2017 2016 Balance at January 1 $ 30 $ 38 Gross decreases for prior period tax positions (1 ) (7 ) Gross increases for current period tax positions 3 3 Decreases due to the lapse of applicable statute of limitations (4 ) (4 ) Balance at December 31 $ 28 $ 30 |
Employee Stock-based Compensa31
Employee Stock-based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | The Company recorded stock-based compensation expense for the years ended December 31 as follows: In millions 2017 2016 2015 Stock options $ 9 $ 9 $ 12 Restricted shares 56 51 41 Employee share repurchase program 3 2 3 Total stock-based compensation before income taxes 68 62 56 Tax benefit (21 ) (13 ) (17 ) Total stock-based compensation, net of tax $ 47 $ 49 $ 39 |
Fair Value of Each Option Award on the Grant Date Using the Black-Scholes Option-Pricing Model | The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions: 2017 2016 2015 Dividend yield — % — % — % Risk-free interest rate 1.99 % 2.08 % 1.76 % Expected volatility 35.0 % 35.2 % 34.4 % Expected term (years) 6.3 6.3 6.3 |
The Company's Stock Option Activity | The following table summarizes the Company’s stock option activity for the year ended December 31, 2017 : 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, 2017 6,509 $ 36.22 5.3 $ 8 Granted 10 $ 29.04 Exercised (746 ) $ 25.28 Canceled (153 ) $ 46.56 Forfeited (247 ) $ 32.97 Outstanding at December 31, 2017 5,373 $ 37.63 4.5 $ 30 Fully vested and expected to vest at December 31, 2017 5,373 $ 37.63 4.5 $ 30 Exercisable at December 31, 2017 4,220 $ 39.60 3.4 $ 21 |
Total Intrinsic Value of Options Exercised and The Cash Received | The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31 : In millions 2017 2016 2015 Intrinsic value of options exercised $ 6 $ 13 $ 8 Cash received from option exercises $ 19 $ 18 $ 9 Tax benefit realized from option exercises $ 2 $ 5 $ 3 |
Restricted Stock and Restricted Stock Unit Activity | The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2017 : Shares in thousands Number of Shares Weighted- Average Grant Date Fair Value per Share Unvested shares at January 1, 2017 4,042 $ 31.57 Granted 2,044 $ 34.88 Vested (1,487 ) $ 33.55 Forfeited/canceled (373 ) $ 29.05 Unvested shares at December 31, 2017 4,226 $ 32.76 |
Weighted-Average Fair Value and Total Fair Value of Shares Vested | The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested. 2017 2016 2015 Weighted-average fair value of restricted share units granted $ 34.88 $ 26.61 $ 32.82 Total fair value of shares vested (in millions) $ 50 $ 61 $ 45 |
The Composition of Teradata Restricted Stock Grants | The following table represents the composition of Teradata restricted share unit grants in 2017 : Shares in thousands Number of Shares Weighted- Average Grant Date Fair Value Service-based shares 1,736 $ 36.33 Performance-based shares 308 $ 26.68 Total stock grants 2,044 $ 34.88 |
Employee Purchases and Aggregate Cost | Employee purchases and aggregate cost were as follows at December 31 : In millions 2017 2016 2015 Employee share purchases 0.6 0.6 0.5 Aggregate cost $ 15 $ 13 $ 17 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Postemployment Benefit Costs | Pension and postemployment benefit costs for the years ended December 31 were as follows: 2017 2016 2015 In millions Pension Postemployment Pension Postemployment Pension Postemployment Service cost $ 9 $ 7 $ 8 $ 6 $ 8 $ 6 Interest cost 3 1 3 1 3 1 Expected return on plan assets (2 ) — (2 ) — (2 ) — Settlement charge — — 1 — 1 — Amortization of actuarial loss 1 2 1 1 2 — Amortization of prior service (credit) cost (1 ) 1 — 2 — — Divestiture — — (2 ) (1 ) — — Total costs $ 10 $ 11 $ 9 $ 9 $ 12 $ 7 |
Accumulated Pension Benefit Obligation | The following table presents the accumulated pension benefit obligation at December 31 : In millions 2017 2016 Accumulated pension benefit obligation $ 125 $ 110 The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31 : In millions 2017 2016 Projected benefit obligation $ 69 $ 60 Accumulated benefit obligation $ 63 $ 53 Fair value of plan assets $ — $ — The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31 : Pension Postemployment In millions 2017 2016 2017 2016 Change in benefit obligation Benefit obligation at January 1 $ 120 $ 115 $ 42 $ 49 Service cost 9 8 7 6 Interest cost 3 3 1 1 Plan participant contributions 1 1 — — Actuarial (gain) loss (3 ) 5 12 12 Benefits paid (4 ) (8 ) (15 ) (20 ) Currency translation adjustments 10 (2 ) — (1 ) Divestiture — (2 ) — (5 ) Benefit obligation at December 31 $ 136 $ 120 $ 47 $ 42 Change in plan assets Fair value of plan assets at January 1 $ 64 $ 63 $ — $ — Actual return on plan assets 5 2 — — Company contributions 5 6 — — Benefits paid (4 ) (8 ) — — Currency translation adjustments 4 — — — Plan participant contribution 1 1 — — Fair value of plan assets at December 31 75 64 — — Funded status (underfunded) $ (61 ) $ (56 ) $ (47 ) $ (42 ) Amounts Recognized in the Balance Sheet Non-current assets $ 10 $ 5 $ — $ — Current liabilities (2 ) (1 ) (7 ) (6 ) Non-current liabilities (69 ) (60 ) (40 ) (36 ) Net amounts recognized $ (61 ) $ (56 ) $ (47 ) $ (42 ) Amounts Recognized in Accumulated Other Comprehensive (Loss) Income Unrecognized Net actuarial loss $ 15 $ 21 $ 37 $ 26 Unrecognized Prior service (credit) cost (1 ) (1 ) 3 4 Total $ 14 $ 20 $ 40 $ 30 |
Pre-Tax Net Changes in Projected Benefit Obligations Recognized in Other Comprehensive Income | The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income: Pension Postemployment In millions 2017 2016 2017 2016 Actuarial (gain) loss arising during the year $ (7 ) $ 5 $ 13 $ 4 Amortization of loss included in net periodic benefit cost (1 ) (1 ) (2 ) (1 ) Prior service (credit) cost arising during the year — — (1 ) 2 Recognition of loss due to settlement — (1 ) — — Foreign currency exchange 2 (1 ) — — Total recognized in other comprehensive (loss) income $ (6 ) $ 2 $ 10 $ 5 |
Amounts in Accumulated Other Comprehensive Income Expected to be Recognized as Components of Net Periodic Benefit Cost | The following table presents the amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2018 : In millions Pension Postemployment Net loss to be recognized in other comprehensive income $ 1 $ 4 |
Weighted-Average Rates and Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit | The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: Pension Benefit Obligations Pension Benefit Cost 2017 2016 2017 2016 2015 Discount rate 2.1% 2.0% 2.0% 2.4% 2.3% Rate of compensation increase 3.3% 3.3% 3.3% 3.2% 3.3% Expected return on plan assets N/A N/A 2.9% 3.0% 3.3% Postemployment Benefit Obligations Postemployment Benefit Cost 2017 2016 2017 2016 2015 Discount rate 2.6% 3.4% 2.6% 3.4% 3.5% Rate of compensation increase 3.0% 3.0% 3.0% 3.0% 3.0% Involuntary turnover rate 2.3% 2.0% 2.3% 2.0% 1.3% |
Weighted-Average Asset Allocations, by Category | The weighted-average asset allocations at December 31, by asset category are as follows: Actual Asset Allocation as of December 31 Target Asset 2017 2016 Allocation Equity securities 32% 32% 31% Debt securities 41% 42% 47% Insurance (annuity) contracts 17% 17% 16% Real-estate 8% 7% 3% Other 2% 2% 3% Total 100% 100% 100% |
Pension Plan Assets at Fair Value | The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016 : 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, 2016 (Level 1) (Level 2) (Level 3) Money market funds $ 1 $ — $ 1 $ — Equity funds 21 — 21 — Bond/fixed-income funds 27 — 27 — Real-estate indirect investments 4 — 4 — Insurance contracts 11 — — 11 Total assets at fair value $ 64 $ — $ 53 $ 11 The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2017 : 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 |
Changes in Fair Value of the Pension Plan Level 3 Assets | The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2017 : In millions Insurance Contracts Balance as of January 1, 2017 $ 11 Purchases, sales and settlements, net 1 Balance as of December 31, 2017 $ 12 The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2016 : In millions Insurance Contracts Balance as of January 1, 2016 $ 10 Purchases, sales and settlements, net 1 December 31, 2016 $ 11 |
Estimated Future Benefit Payments | The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: Pension Postemployment In millions Benefits Benefits Year 2018 $ 5 $ 7 2019 $ 5 $ 6 2020 $ 5 $ 6 2021 $ 6 $ 6 2022 $ 6 $ 6 2023 - 2027 $ 34 $ 24 |
U.S and International Subsidiary Savings Plans | The following table identifies the expense for the U.S. and International subsidiary savings plans for the years ended December 31 : In millions 2017 2016 2015 U.S. savings plan $ 21 $ 19 $ 22 International subsidiary savings plans $ 17 $ 16 $ 18 |
Derivative Instruments and He33
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Foreign Exchange Contracts | The following table identifies the contract notional amount of the Company’s foreign exchange forward contracts at December 31 : In millions 2017 2016 Contract notional amount of foreign exchange forward contracts $ 147 $ 156 Net contract notional amount of foreign exchange forward contracts $ 23 $ 16 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty Reserve Activity | The following table identifies the activity relating to the warranty reserve liability for the years ended December 31 : In millions 2017 2016 2015 Beginning balance at January 1 $ 5 $ 6 $ 7 Accruals for warranties issued 6 8 9 Settlements (in cash or kind) (7 ) (9 ) (10 ) Balance at end of period $ 4 $ 5 $ 6 |
Committed Operating Leases Less Sublease Rentals | Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2017 , for the following fiscal years were: In millions Total Amounts 2018 2019 2020 2021 2022 and Thereafter Operating lease obligations $ 81 $ 27 $ 20 $ 16 $ 8 $ 10 Sublease rentals (14 ) (6 ) (5 ) (3 ) — — Total committed operating leases less sublease rentals $ 67 $ 21 $ 15 $ 13 $ 8 $ 10 The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31 : In millions 2017 2016 2015 Rental expense $ 24 $ 24 $ 26 Sublease rental income $ 5 $ 3 $ 3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements | The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 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, 2017 $ 501 $ 501 $ — $ — Money market funds at December 31, 2016 $ 473 $ 473 $ — $ — |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Annual Contractual Maturities of Principal on Debt Outstanding | Annual contractual maturities of outstanding principal on the term loan at December 31, 2017 , are as follows: In millions 2018 $ 60 2019 68 2020 412 Total $ 540 |
Interest Expense on Borrowings | The following table presents interest expense on borrowings for the years ended December 31 : In millions 2017 2016 2015 Interest expense $ 15 $ 12 $ 9 |
Segment, Other Supplemental I37
Segment, Other Supplemental Information and Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Regional Segment Revenue and Segment Gross Margin | The following table presents segment revenue and segment gross profit for the Company for the years ended December 31 : In millions 2017 2016 2015 Segment revenue Americas Data and Analytics $ 1,195 $ 1,334 $ 1,470 International Data and Analytics 961 919 907 Total Data and Analytics 2,156 2,253 2,377 Marketing Applications — 69 153 Total revenue 2,156 2,322 2,530 Segment gross profit Americas Data and Analytics 676 796 871 International Data and Analytics 434 445 452 Total Data and Analytics 1,110 1,241 1,323 Marketing Application — 34 63 Total segment gross profit 1,110 1,275 1,386 Stock-based compensation expense 13 14 13 Amortization of acquisition-related intangible assets 1 2 16 Acquisition, integration and reorganization-related costs 6 9 11 Amortization of capitalized software costs 68 62 70 Selling, general and administrative expenses 652 664 765 Research and development expenses 306 212 228 Impairment of goodwill, acquired intangibles and other assets — 80 478 Total income (loss) from operations $ 64 $ 232 $ (195 ) |
Revenue by Product and Services | The following table presents a further disaggregation of revenue for the Company for the years ended December 31: In millions 2017 2016 2015 Recurring revenue $ 1,047 $ 978 $ 956 Product - perpetual licenses and hardware 429 600 752 Consulting services 680 675 669 Marketing applications — 69 153 Total revenue $ 2,156 $ 2,322 $ 2,530 |
Revenue from External Customers by Geographic Areas | The following table presents revenues by geographic area for the years ended December 31 : In millions 2017 2016 2015 United States $ 1,089 $ 1,246 $ 1,428 Americas (excluding United States) 107 123 125 International 960 953 977 Total revenue $ 2,156 $ 2,322 $ 2,530 |
Property and Equipment by Geographic Area | The following table presents property and equipment by geographic area at December 31 : In millions 2017 2016 United States $ 119 $ 113 Americas (excluding United States) 11 4 International 32 21 Property and equipment, net $ 162 $ 138 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (AOCI), Net of Tax | The following table provides information on changes in accumulated other comprehensive (loss) income (“AOCI”), net of tax, for the years ended December 31 : In millions Available-for-sale securities Defined benefit plans Foreign currency translation adjustments Total AOCI Balance as of December 31, 2014 $ 31 $ (24 ) $ (11 ) $ (4 ) Other comprehensive loss before reclassifications (5 ) (8 ) (36 ) (49 ) Amounts reclassified from AOCI (26 ) 3 — (23 ) Net other comprehensive loss (31 ) (5 ) (36 ) (72 ) 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 ) |
Impact and Respective Location of AOCI Reclassifications in Consolidated Statements of Income | The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income for the years ended December 31: In millions AOCI Component Location 2017 2016 2015 Defined benefit plans Cost of services $ (3 ) $ (3 ) $ (2 ) Defined benefit plans Selling, general and administrative expenses (2 ) (1 ) (1 ) Available for sale securities Other income — — 42 Tax portion Income tax benefit (expense) 1 1 (16 ) Total reclassifications Net (loss) income $ (4 ) $ (3 ) $ 23 |
Reorganization and Business T39
Reorganization and Business Transformation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The Company incurred the following costs related to these actions for the years ended December 31: In millions 2017 2016 2015 Employee severance and other employee related cost $ 2 $ 14 $ 4 Asset write-downs — 80 140 Professional services, legal and other associated cost 24 35 8 Total reorganization and business transformation cost $ 26 $ 129 $ 152 |
Quarterly Information (unaudi40
Quarterly Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations | In millions, except per share amounts First (1) Second Third Fourth (2) 2017 Total revenues $ 491 $ 513 $ 526 $ 626 Gross profit $ 224 $ 242 $ 250 $ 306 Operating (loss) income $ (1 ) $ (1 ) $ 7 $ 59 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 ) 2016 Total revenues $ 545 $ 599 $ 552 $ 626 Gross profit $ 269 $ 310 $ 294 $ 315 Operating (loss) income $ (42 ) $ 87 $ 89 $ 98 Net (loss) income $ (46 ) $ 64 $ 49 $ 58 Net (loss) income per share: Basic $ (0.36 ) $ 0.49 $ 0.38 $ 0.45 Diluted $ (0.36 ) $ 0.49 $ 0.37 $ 0.44 (1) Loss from operation for the three months ended March 31, 2016 includes goodwill and acquired intangibles impairment charges of $76 million for the marketing application business. (2) Loss from operations for the three months ended December 31, 2017 includes $126 million tax impact related to 2017 U.S. Tax Reform. |
Description of Business, Basi41
Description of Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Revenues | $ 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | $ 2,156 | $ 2,322 | $ 2,530 | |
Depreciation | $ 55 | $ 49 | $ 53 | |||||||||
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares) | 127.8 | 141.9 | ||||||||||
Decrease in weighted average dilutes shares (in shares) | (125.8) | (131.5) | (139.6) | |||||||||
Operating (loss) income | $ 59 | $ 7 | $ (1) | $ (1) | $ 98 | $ 89 | $ 87 | $ (42) | $ 64 | $ 232 | $ (195) | |
Internal-Use Software | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Period capitalized on a straight-line basis when the asset is substantially ready for use | 3 years | |||||||||||
Capitalized Software | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Intangible assets amortizable period | 4 years | |||||||||||
Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Fees payment term (in days) | 30 days | |||||||||||
Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Fees payment term (in days) | 90 days | |||||||||||
Equipment | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Estimated Useful lives (in years) | 3 years | |||||||||||
Equipment | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Estimated Useful lives (in years) | 20 years | |||||||||||
Building | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Estimated Useful lives (in years) | 25 years | |||||||||||
Building | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Estimated Useful lives (in years) | 45 years | |||||||||||
Employee Stock Option | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares) | 2.7 | 5.2 | 4.5 | |||||||||
New Accounting Pronouncement, Early Adoption, Effect | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Other income | $ 4 | $ 3 | ||||||||||
Operating (loss) income | $ 4 | $ 3 | ||||||||||
Subscription License | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 1 year | |||||||||||
Subscription License | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 5 years | |||||||||||
Software and Cloud Services | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 1 year | |||||||||||
Software and Cloud Services | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 5 years | |||||||||||
Rentals | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 1 year | |||||||||||
Rentals | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 3 years | |||||||||||
Utility Model | Minimum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 1 year | |||||||||||
Utility Model | Maximum | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Contract terms (in years) | 5 years | |||||||||||
Scenario, Forecast | Accounting Standards Update 2014-09 | ||||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Revenues | $ 20 | |||||||||||
Deferred compensation expense | $ 15 |
Description of Business, Basi42
Description of Business, Basis of Presentation and Significant Accounting Policies - Activities Relating to Capitalized Software (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Capitalized Computer Software, Net [Roll Forward] | |||
Beginning balance at January 1 | $ 187 | ||
Amortization | (68) | $ (62) | $ (70) |
Ending balance at December 31 | 121 | 187 | |
Internal-Use Software | |||
Movement in Capitalized Computer Software, Net [Roll Forward] | |||
Beginning balance at January 1 | 13 | 13 | 13 |
Capitalized | 9 | 6 | 6 |
Amortization | (6) | (6) | (6) |
Ending balance at December 31 | 16 | 13 | 13 |
External-Use Software | |||
Movement in Capitalized Computer Software, Net [Roll Forward] | |||
Beginning balance at January 1 | 174 | 177 | 186 |
Capitalized | 0 | 59 | 61 |
Amortization | (69) | (62) | (70) |
Ending balance at December 31 | $ 105 | $ 174 | $ 177 |
Description of Business, Basi43
Description of Business, Basis of Presentation and Significant Accounting Policies - Aggregate Amortization Expense for Internal and External-Use Software (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquired Intangible Assets Amortization [Line Items] | |||
Actual 2,017 | $ 8 | $ 10 | $ 40 |
2,018 | 7 | ||
2,019 | 6 | ||
2,020 | 4 | ||
2,021 | 4 | ||
2,022 | 2 | ||
Internal-use software amortization expense | |||
Acquired Intangible Assets Amortization [Line Items] | |||
Actual 2,017 | 6 | ||
2,018 | 7 | ||
2,019 | 7 | ||
2,020 | 7 | ||
2,021 | 7 | ||
2,022 | 6 | ||
External-use software amortization expense | |||
Acquired Intangible Assets Amortization [Line Items] | |||
Actual 2,017 | 69 | ||
2,018 | 49 | ||
2,019 | 34 | ||
2,020 | 22 | ||
2,021 | 0 | ||
2,022 | $ 0 |
Description of Business, Basi44
Description of Business, Basis of Presentation and Significant Accounting Policies - Components of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract] | |||||||||||
Net (loss) income attributable to common stockholders | $ (74) | $ 13 | $ (4) | $ (2) | $ 58 | $ 49 | $ 64 | $ (46) | $ (67) | $ 125 | $ (214) |
Weighted average outstanding shares of common stock | 125.8 | 129.7 | 139.6 | ||||||||
Dilutive effect of employee stock options, restricted shares and other stock awards | 0 | 1.8 | 0 | ||||||||
Common stock and common stock equivalents | 125.8 | 131.5 | 139.6 | ||||||||
Net (loss) income per share: | |||||||||||
Basic (in usd per share) | $ (0.61) | $ 0.11 | $ (0.03) | $ (0.02) | $ 0.45 | $ 0.38 | $ 0.49 | $ (0.36) | $ (0.53) | $ 0.96 | $ (1.53) |
Diluted (in usd per share) | $ (0.61) | $ 0.10 | $ (0.03) | $ (0.02) | $ 0.44 | $ 0.37 | $ 0.49 | $ (0.36) | $ (0.53) | $ 0.95 | $ (1.53) |
Supplemental Financial Inform45
Supplemental Financial Information (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable | ||
Trade | $ 559 | $ 561 |
Other | 7 | 6 |
Accounts receivable, gross | 566 | 567 |
Less: allowance for doubtful accounts | (12) | (19) |
Total accounts receivable, net | 554 | 548 |
Inventories | ||
Finished goods | 18 | 20 |
Service parts | 12 | 14 |
Total inventories | 30 | 34 |
Property and equipment | ||
Land | 8 | 8 |
Buildings and improvements | 82 | 77 |
Machinery and other equipment | 404 | 354 |
Property and equipment, gross | 494 | 439 |
Less: accumulated depreciation | (332) | (301) |
Total property and equipment, net | 162 | 138 |
Other current liabilities | ||
Sales and value-added taxes | 30 | 28 |
Pension and other postemployment plan liabilities | 2 | 7 |
Other | 70 | 53 |
Total other current liabilities | 102 | 88 |
Deferred revenue | ||
Deferred revenue, current | 414 | 369 |
Long-term deferred revenue | 85 | 14 |
Total deferred revenue | 499 | 383 |
Other long-term liabilities | ||
Transition tax | 133 | 0 |
Uncertain tax positions | 14 | 20 |
Other | 2 | 12 |
Total other long-term liabilities | $ 149 | $ 32 |
Goodwill and Acquired Intangi46
Goodwill and Acquired Intangible Assets - Goodwill by Operating Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2017 | |
Goodwill | ||
Balance at December 31, 2016 | $ 390 | |
Additions | $ 2 | 2 |
Currency Translation Adjustments | 7 | |
Balance at December 31, 2017 | 399 | |
Data and Analytics | ||
Goodwill | ||
Balance at December 31, 2016 | 251 | |
Additions | 2 | |
Currency Translation Adjustments | 0 | |
Balance at December 31, 2017 | 253 | |
Marketing Applications | ||
Goodwill | ||
Balance at December 31, 2016 | 139 | |
Additions | 0 | |
Currency Translation Adjustments | 7 | |
Balance at December 31, 2017 | $ 146 |
Goodwill and Acquired Intangi47
Goodwill and Acquired Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 43 | $ 77 |
Accumulated Amortization and Currency Translation Adjustments | (20) | (66) |
Intellectual property/developed technology | ||
Acquired Finite-Lived Intangible Assets | ||
Finite-lived Intangible Assets Acquired | 18 | |
Gross Carrying Amount | 43 | 71 |
Accumulated Amortization and Currency Translation Adjustments | $ (20) | (61) |
Trademarks/trade names | ||
Acquired Finite-Lived Intangible Assets | ||
Amortization Life (in Years) | 5 years | |
Gross Carrying Amount | $ 0 | 1 |
Accumulated Amortization and Currency Translation Adjustments | $ 0 | (1) |
In-process research and development | ||
Acquired Finite-Lived Intangible Assets | ||
Amortization Life (in Years) | 5 years | |
Gross Carrying Amount | $ 0 | 5 |
Accumulated Amortization and Currency Translation Adjustments | $ 0 | $ (4) |
Minimum | Intellectual property/developed technology | ||
Acquired Finite-Lived Intangible Assets | ||
Amortization Life (in Years) | 1 year | |
Maximum | Intellectual property/developed technology | ||
Acquired Finite-Lived Intangible Assets | ||
Amortization Life (in Years) | 7 years |
Goodwill and Acquired Intangi48
Goodwill and Acquired Intangible Assets - Aggregate Amortization Expense for Acquired Intangible Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense - Actual | $ 8 | $ 10 | $ 40 |
Amortization expense - 2018 | 7 | ||
Amortization expense - 2019 | 6 | ||
Amortization expense - 2020 | 4 | ||
Amortization expense - 2021 | 4 | ||
Amortization expense - 2022 | $ 2 |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
United States | $ (26) | $ 93 | $ (88) |
Foreign | 84 | 128 | (56) |
Income (loss) before income taxes | $ 58 | $ 221 | $ (144) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
Federal | $ 132 | $ 67 | $ 74 |
State and local | 2 | 7 | 9 |
Foreign | 25 | 25 | 26 |
Deferred | |||
Federal | (22) | 7 | (19) |
State and local | (4) | 1 | (3) |
Foreign | (8) | (11) | (17) |
Total income tax expense | $ 125 | $ 96 | $ 70 |
Effective income tax rate | 215.50% | 43.40% | (48.60%) |
Income Taxes - Difference Betwe
Income Taxes - Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at the U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
Foreign income tax differential | (18.00%) | (13.20%) | 14.00% |
State and local income taxes | (11.00%) | 0.20% | 0.50% |
U.S. permanent book/tax differences | (12.00%) | (0.10%) | 3.10% |
Change in valuation allowance for California R&D credit | 10.00% | 0.80% | (3.40%) |
U.S. manufacturing deduction permanent difference | (8.00%) | (3.50%) | 5.50% |
Goodwill impairment | 0.00% | 8.90% | (100.10%) |
Tax impact of sale of marketing applications business | 0.00% | 9.90% | 0.00% |
Impact of excess tax benefits and tax deficiencies | 0.00% | 2.20% | 0.00% |
Tax impact of U.S. tax law change - IRC Section 987 | 0.00% | 3.50% | 0.00% |
Deferred tax impact from U.S. rate change | (27.00%) | 0.00% | 0.00% |
Tax impact of transition Tax- U.S. tax reform | 250.00% | 0.00% | 0.00% |
Other, net | (3.50%) | (0.30%) | (3.20%) |
Effective income tax rate | 215.50% | 43.40% | (48.60%) |
Income Taxes - Additional infor
Income Taxes - Additional information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||||||||||
Tax Cuts and Jobs Act of 2017, existing income tax expense (benefit) | $ 126 | ||||||||||
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional liability | 145 | $ 145 | |||||||||
Revenues | 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | 2,156 | $ 2,322 | $ 2,530 |
Tax Cuts and Jobs Act of 2017, deferred tax asset, existing income tax expense (benefit) | 19 | ||||||||||
Impairment of goodwill and acquired intangibles | $ 57 | 437 | |||||||||
Income tax expense (benefit) | 125 | 96 | 70 | ||||||||
Tax expense, issuance of new US Treasury regulations | 8 | ||||||||||
Effective income tax rate reconciliation, excess tax expense | 5 | ||||||||||
Non-deductible goodwill amount | 414 | ||||||||||
Income (loss) before income taxes | $ 58 | $ 221 | $ (144) | ||||||||
Effective income tax rate | 215.50% | 43.40% | (48.60%) | ||||||||
Net operating loss and tax credit carryforwards | 59 | $ 59 | |||||||||
Research and development tax credit carryforwards | 44 | 44 | |||||||||
Tax liability related to uncertain tax positions | 28 | 30 | 28 | $ 30 | $ 38 | ||||||
Uncertain tax positions recognized as current liability on balance sheet | 2 | 2 | |||||||||
Uncertain tax positions | 14 | $ 20 | 14 | $ 20 | |||||||
Uncertain tax positions related to business acquisitions not recognized on balance sheet | 12 | 12 | |||||||||
Interest accruals related to uncertain tax liabilities | 2 | 2 | |||||||||
United States And Certain Foreign Jurisdictions | |||||||||||
Income Taxes | |||||||||||
Net operating loss carryforwards in the United States and certain foreign jurisdictions | 15 | 15 | |||||||||
Research Tax Credit Carryforward | State and Local Jurisdiction | |||||||||||
Income Taxes | |||||||||||
Valuation allowance | $ 32 | 32 | |||||||||
Marketing Applications | |||||||||||
Income Taxes | |||||||||||
Income tax expense (benefit) | $ 22 | ||||||||||
Non-US | |||||||||||
Income Taxes | |||||||||||
Revenues | $ 1,300 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets | ||
Employee pensions and other liabilities | $ 50 | $ 59 |
Other balance sheet reserves and allowances | 13 | 18 |
Tax loss and credit carryforwards | 59 | 53 |
Deferred revenue | 3 | 3 |
Other | 2 | 0 |
Total deferred income tax assets | 127 | 133 |
Valuation allowance | (32) | (26) |
Net deferred income tax assets | 95 | 107 |
Deferred income tax liabilities | ||
Intangibles and capitalized software | 30 | 63 |
Property and equipment | 12 | 22 |
Other | 0 | 6 |
Total deferred income tax liabilities | 42 | 91 |
Total net deferred income tax assets | $ 53 | $ 16 |
Income Taxes - Liability Relate
Income Taxes - Liability Related to Uncertain Tax Positions (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at January 1 | $ 30 | $ 38 |
Gross decreases for prior period tax positions | (1) | (7) |
Gross increases for current period tax positions | 3 | 3 |
Decreases due to the lapse of applicable statute of limitations | (4) | (4) |
Balance at December 31 | $ 28 | $ 30 |
Employee Stock-based Compensa55
Employee Stock-based Compensation Plans Stock-Based Compensation Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock options | $ 9 | $ 9 | $ 12 |
Restricted shares | 56 | 51 | 41 |
Employee share repurchase program | 3 | 2 | 3 |
Total stock-based compensation before income taxes | 68 | 62 | 56 |
Tax benefit | (21) | (13) | (17) |
Total stock-based compensation, net of tax | $ 47 | $ 49 | $ 39 |
Employee Stock-based Compensa56
Employee Stock-based Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized to be issued under the Teradata SIP (in shares) | 17,500,000 | |||
Weighted-average fair value of options granted for Teradata equity awards | $ 11.08 | $ 10.68 | $ 11.37 | |
Restricted stock unit awards granted | 2,044,000 | |||
Compensation expense for restricted stock awards | $ 56 | $ 51 | $ 41 | |
Total stock-based compensation, net of tax | $ 47 | $ 49 | $ 39 | |
Employee Stock Purchase Program | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee stock purchase program discount from average market price | 15.00% | |||
Percentage of authorized payroll deductions for common stock purchases by employees | 10.00% | |||
Shares authorized to be issued under the Employee Stock Purchase Program | 4,000,000 | |||
Remaining shares authorized to be issued under the Employee Stock Purchase Program | 200,000 | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option, term | 10 years | |||
Vesting period (in years) | 4 years | |||
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost related to unvested stock grants | $ 13 | |||
Cost expected to be recognized over a weighted-average period (in years) | 2 years 4 months 24 days | |||
Service-Based Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 3 years | |||
Performance Based Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 1 year | |||
Performance Based Awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 4 years | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost related to unvested stock grants | $ 98 | |||
Cost expected to be recognized over a weighted-average period (in years) | 2 years 4 months 23 days | |||
Special 2016 PSRSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period | 3 years | |||
Special 2016 PSRSU | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance share percentage | 0.00% | |||
Special 2016 PSRSU | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance share percentage | 200.00% |
Employee Stock-based Compensa57
Employee Stock-based Compensation Plans Fair Value of Each Option Award on the Grant Date Using the Black-Scholes Option-Pricing Model (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.99% | 2.08% | 1.76% |
Expected volatility | 35.00% | 35.20% | 34.40% |
Expected term (years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Employee Stock-based Compensa58
Employee Stock-based Compensation Plans Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Shares Under Option | ||
Outstanding at beginning of period (in shares) | 6,509 | |
Granted (in shares) | 10 | |
Exercised (in shares) | (746) | |
Canceled (in shares) | (153) | |
Forfeited (in shares) | (247) | |
Outstanding at end of period (in shares) | 5,373 | 6,509 |
Fully vested and expected to vest at period end (in shares) | 5,373 | |
Exercisable at period end (in shares) | 4,220 | |
Weighted-Average Exercise Price per Share | ||
Outstanding at beginning of period (in usd per share) | $ 36.22 | |
Granted (in usd per share) | 29.04 | |
Exercised (in usd per share) | 25.28 | |
Canceled (in usd per share) | 46.56 | |
Forfeited (in usd per share) | 32.97 | |
Outstanding at end of period (in usd per share) | 37.63 | $ 36.22 |
Fully vested and expected to vest at period end (in usd per share) | 37.63 | |
Exercisable at period end (in usd per share) | $ 39.60 | |
Weighted-Average Remaining Contractual Term | ||
Weighted-average remaining contractual term (in years) | 4 years 6 months | 5 years 3 months 18 days |
Fully vested and expected to vest at period end (in years) | 4 years 6 months | |
Exercisable at period end (in years) | 3 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 30 | $ 8 |
Fully vested and expected to vest at period end | 30 | |
Exercisable at period end | $ 21 |
Employee Stock-based Compensa59
Employee Stock-based Compensation Plans Total Intrinsic Value of Options Exercised and The Cash Received (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Intrinsic value of options exercised | $ 6 | $ 13 | $ 8 |
Cash received from option exercises | 19 | 18 | 9 |
Tax benefit realized from option exercises | $ 2 | $ 5 | $ 3 |
Employee Stock-based Compensa60
Employee Stock-based Compensation Plans Restricted Stock and Restricted Stock Unit Activity (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Shares | |
Unvested shares at January 1, 2016 (in shares) | shares | 4,042 |
Granted (in shares) | shares | 2,044 |
Vested (in shares) | shares | (1,487) |
Forfeited/canceled (in shares) | shares | (373) |
Unvested shares at December 31, 2016 (in shares) | shares | 4,226 |
Weighted-Average Grant Date Fair Value | |
Unvested shares at January 1, 2016 (in usd per share) | $ / shares | $ 31.57 |
Granted (in usd per share) | $ / shares | 34.88 |
Vested (in usd per share) | $ / shares | 33.55 |
Forfeited/canceled (in usd per share) | $ / shares | 29.05 |
Unvested shares at December 31, 2016 (in usd per share) | $ / shares | $ 32.76 |
Employee Stock-based Compensa61
Employee Stock-based Compensation Plans Weighted-Average Fair Value and Total Fair Value of Shares Vested (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of restricted shares units granted (in usd per share) | $ 34.88 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of restricted shares units granted (in usd per share) | $ 34.88 | $ 26.61 | $ 32.82 |
Total fair value of shares vested (in millions) | $ 50 | $ 61 | $ 45 |
Employee Stock-based Compensa62
Employee Stock-based Compensation Plans Composition of Teradata Restricted Stock Grants (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares | shares | 2,044 |
Weighted-average fair value of restricted shares units granted (in usd per share) | $ / shares | $ 34.88 |
Service-based shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares | shares | 1,736 |
Weighted-average fair value of restricted shares units granted (in usd per share) | $ / shares | $ 36.33 |
Performance-based shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares | shares | 308 |
Weighted-average fair value of restricted shares units granted (in usd per share) | $ / shares | $ 26.68 |
Employee Stock-based Compensa63
Employee Stock-based Compensation Plans Employee Purchases and Aggregate Cost (Details) - Employee Stock Puchase Program - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||
Employee share purchases (in shares) | 0.6 | 0.6 | 0.5 |
Aggregate cost | $ 15 | $ 13 | $ 17 |
Employee Benefit Plans Schedule
Employee Benefit Plans Schedule of Pension and Postemployment Benefit Costs (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 9 | $ 8 | $ 8 |
Interest cost | 3 | 3 | 3 |
Expected return on plan assets | (2) | (2) | (2) |
Settlement charge | 0 | 1 | 1 |
Amortization of actuarial loss | 1 | 1 | 2 |
Amortization of prior service (credit) cost | (1) | 0 | 0 |
Divestiture | 0 | (2) | 0 |
Total costs | 10 | 9 | 12 |
Postemployment Retirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 7 | 6 | 6 |
Interest cost | 1 | 1 | 1 |
Expected return on plan assets | 0 | 0 | 0 |
Settlement charge | 0 | 0 | 0 |
Amortization of actuarial loss | 2 | 1 | 0 |
Amortization of prior service (credit) cost | 1 | 2 | 0 |
Divestiture | 0 | (1) | 0 |
Total costs | $ 11 | $ 9 | $ 7 |
Employee Benefit Plans Changes
Employee Benefit Plans Changes in Benefit Obligations Plan Assets Funded Status and Reconciliation of Funded Status to Amounts Recognized in Consolidated Balance Sheets and in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | |||
Change in Pension Benefit Obligation | |||
Benefit obligation at January 1 | $ 120 | $ 115 | |
Service cost | 9 | 8 | $ 8 |
Interest cost | 3 | 3 | 3 |
Plan participant contributions | 1 | 1 | |
Actuarial (gain) loss | (3) | 5 | |
Benefits paid | (4) | (8) | |
Currency translation adjustments | 10 | (2) | |
Divestiture | 0 | (2) | |
Benefit obligation at December 31 | 136 | 120 | 115 |
Change in Pension Benefit Plan Assets | |||
Fair value of plan assets at January 1 | 64 | 63 | |
Actual return on plan assets | 5 | 2 | |
Company contributions | 5 | 6 | |
Benefits paid | (4) | (8) | |
Currency translation adjustments | 4 | 0 | |
Plan participant contribution | 1 | 1 | |
Fair value of plan assets at December 31 | 75 | 64 | 63 |
Funded status (underfunded) | (61) | (56) | |
Amounts Recognized in Balance Sheet, Pension | |||
Non-current assets | 10 | 5 | |
Current liabilities | (2) | (1) | |
Non-current liabilities | (69) | (60) | |
Net amounts recognized | (61) | (56) | |
Amounts Recognized in Accumulated Other Comprehensive Income, Pension | |||
Unrecognized Net actuarial loss | 15 | 21 | |
Unrecognized Prior service (credit) cost | (1) | (1) | |
Total | 14 | 20 | |
Postemployment Retirement Benefits | |||
Change in Pension Benefit Obligation | |||
Benefit obligation at January 1 | 42 | 49 | |
Service cost | 7 | 6 | 6 |
Interest cost | 1 | 1 | 1 |
Plan participant contributions | 0 | 0 | |
Actuarial (gain) loss | 12 | 12 | |
Benefits paid | (15) | (20) | |
Currency translation adjustments | 0 | (1) | |
Divestiture | 0 | (5) | |
Benefit obligation at December 31 | 47 | 42 | $ 49 |
Change in Pension Benefit Plan Assets | |||
Fair value of plan assets at January 1 | 0 | ||
Actual return on plan assets | 0 | 0 | |
Company contributions | 0 | 0 | |
Benefits paid | 0 | 0 | |
Currency translation adjustments | 0 | 0 | |
Plan participant contribution | 0 | 0 | |
Fair value of plan assets at December 31 | 0 | 0 | |
Funded status (underfunded) | (47) | (42) | |
Amounts Recognized in the Balance Sheet, Postemployment | |||
Current liabilities | (7) | (6) | |
Non-current liabilities | (40) | (36) | |
Non-current liabilities | (47) | (42) | |
Amounts Recognized in Accumulated Other Comprehensive Income, Pension | |||
Unrecognized Net actuarial loss | 37 | 26 | |
Unrecognized Prior service (credit) cost | 3 | 4 | |
Total | $ 40 | $ 30 |
Employee Benefit Plans Accumula
Employee Benefit Plans Accumulated Pension Benefit Obligation (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Retirement Benefits [Abstract] | ||
Accumulated pension benefit obligation | $ 125 | $ 110 |
Employee Benefit Plans Accumu67
Employee Benefit Plans Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 69 | $ 60 |
Accumulated benefit obligation | 63 | 53 |
Fair value of plan assets | $ 0 | $ 0 |
Employee Benefit Plans Pre-tax
Employee Benefit Plans Pre-tax Net Changes in Projected Benefit Obligations Recognized in Other Comprehensive Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total recognized in other comprehensive (loss) income | $ (6) | $ (12) | $ (9) |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial (gain) loss arising during the year | (7) | 5 | |
Amortization of loss included in net periodic benefit cost | (1) | (1) | (2) |
Prior service (credit) cost arising during the year | 0 | 0 | |
Recognition of loss due to settlement | 0 | (1) | (1) |
Foreign currency exchange | 2 | (1) | |
Total recognized in other comprehensive (loss) income | (6) | 2 | |
Postemployment Retirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial (gain) loss arising during the year | 13 | 4 | |
Amortization of loss included in net periodic benefit cost | (2) | (1) | 0 |
Prior service (credit) cost arising during the year | (1) | 2 | |
Recognition of loss due to settlement | 0 | 0 | $ 0 |
Foreign currency exchange | 0 | 0 | |
Total recognized in other comprehensive (loss) income | $ 10 | $ 5 |
Employee Benefit Plans Amounts
Employee Benefit Plans Amounts in Accumulated Other Comprehensive Income Expected to be Recognized as Components of Net Periodic Benefit Cost (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Net loss to be recognized in other comprehensive income | $ 1 |
Postemployment Retirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Net loss to be recognized in other comprehensive income | $ 4 |
Employee Benefit Plans Weighted
Employee Benefit Plans Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 2.10% | 2.00% | |
Rate of compensation increase | 3.30% | 3.30% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 2.00% | 2.40% | 2.30% |
Rate of compensation increase | 3.30% | 3.20% | 3.30% |
Expected return on plan assets | 2.90% | 3.00% | 3.30% |
Postemployment Retirement Benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 2.60% | 3.40% | |
Rate of compensation increase | 3.00% | 3.00% | |
Involuntary turnover rate | 2.30% | 2.00% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 2.60% | 3.40% | 3.50% |
Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Expected return on plan assets | 2.30% | 2.00% | 1.30% |
Employee Benefit Plans Weight71
Employee Benefit Plans Weighted Average Asset Allocations by Asset Category (Detail) | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 100.00% | 100.00% |
Target Asset | 100.00% | |
Equity securities | ||
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 32.00% | 32.00% |
Target Asset | 31.00% | |
Debt securities | ||
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 41.00% | 42.00% |
Target Asset | 47.00% | |
Insurance (annuity) contracts | ||
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 17.00% | 17.00% |
Target Asset | 16.00% | |
Real-estate | ||
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 8.00% | 7.00% |
Target Asset | 3.00% | |
Other | ||
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items] | ||
Actual Asset Allocation as of December 31 | 2.00% | 2.00% |
Target Asset | 3.00% |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Retirement Benefits [Abstract] | |
Amount of gains and losses to be amortized to the extent that they exceed 10% of the higher of the market-related value or the projected benefit obligation of each respective plan | 10.00% |
Estimated benefits in the next fiscal year | $ 6 |
Employee Benefit Plans Schedu73
Employee Benefit Plans Schedule of Pension Plan Assets at Fair Value (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance Contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | $ 12 | $ 11 | $ 10 |
Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 75 | 64 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 63 | 53 | |
Recurring | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 12 | 11 | |
Recurring | Money market funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 2 | 1 | |
Recurring | Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Money market funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 2 | 1 | |
Recurring | Money market funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 24 | 21 | |
Recurring | Equity funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Equity funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 24 | 21 | |
Recurring | Equity funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Bond/fixed-income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 31 | 27 | |
Recurring | Bond/fixed-income funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Bond/fixed-income funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 31 | 27 | |
Recurring | Bond/fixed-income funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Real-estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 6 | 4 | |
Recurring | Real-estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Real-estate | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 6 | 4 | |
Recurring | Real-estate | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Insurance Contract | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 12 | 11 | |
Recurring | Insurance Contract | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Insurance Contract | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Recurring | Insurance Contract | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | $ 12 | $ 11 |
Employee Benefit Plans Summary
Employee Benefit Plans Summary of Changes in Fair Value of Pension Plan Level 3 Assets (Detail) - Insurance Contract - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets at January 1 | $ 11 | $ 10 |
Purchases, sales and settlements, net | 1 | 1 |
Fair value of plan assets at December 31 | $ 12 | $ 11 |
Employee Benefit Plans Estimate
Employee Benefit Plans Estimated Future Benefit Payments (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 5 |
2,019 | 5 |
2,020 | 5 |
2,021 | 6 |
2,022 | 6 |
2023-2026 | 34 |
Other Postretirement Benefits Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 7 |
2,019 | 6 |
2,020 | 6 |
2,021 | 6 |
2,022 | 6 |
2023-2026 | $ 24 |
Employee Benefit Plans U.S and
Employee Benefit Plans U.S and International Subsidiary Savings Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
U.S. savings plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Cost | $ 21 | $ 19 | $ 22 |
International subsidiary savings plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Cost | $ 17 | $ 16 | $ 18 |
Derivative Instruments and He77
Derivative Instruments and Hedging Activities - Schedule of Foreign Exchange Contracts (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative | ||
Net contract notional amount of foreign exchange forward contracts | $ 23 | $ 16 |
Foreign Exchange Contract | ||
Derivative | ||
Contract notional amount of foreign exchange forward contracts | $ 147 | $ 156 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum future payment obligation of the guaranteed value and associated liabilities | $ 4 |
Commitments and Contingencies79
Commitments and Contingencies - Warranty Reserve Activity (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance at January 1 | $ 5 | $ 6 | $ 7 |
Accruals for warranties issued | 6 | 8 | 9 |
Settlements (in cash or kind) | (7) | (9) | (10) |
Balance at end of period | $ 4 | $ 5 | $ 6 |
Commitments and Contingencies80
Commitments and Contingencies - Future Minimum Operating Lease Payments and Committed Subleases Under Non-cancelable Leases (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease obligations - Total Amounts | $ 81 | ||
Operating lease obligations - 2018 | 27 | ||
Operating lease obligations - 2019 | 20 | ||
Operating lease obligations - 2020 | 16 | ||
Operating lease obligations - 2021 | 8 | ||
Operating lease obligations - 2022 | 10 | ||
Sublease rentals - Total Amounts | (14) | ||
Sublease rentals - 2018 | (6) | ||
Sublease rentals - 2019 | (5) | ||
Sublease rentals - 2020 | (3) | ||
Sublease rentals - 2021 | 0 | ||
Sublease rentals - 2022 | 0 | ||
Total committed operating leases less sublease rentals - Total Amounts | 67 | ||
Total committed operating leases less sublease rentals - 2018 | 21 | ||
Total committed operating leases less sublease rentals - 2019 | 15 | ||
Total committed operating leases less sublease rentals - 2020 | 13 | ||
Total committed operating leases less sublease rentals - 2021 | 8 | ||
Total committed operating leases less sublease rentals - 2022 | 10 | ||
Rental expense | 24 | $ 24 | $ 26 |
Sublease rental income | $ 5 | $ 3 | $ 3 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements (Detail) - Recurring - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Money market funds at December 31, 2017 | $ 501 | $ 473 |
Quoted Price as in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Money market funds at December 31, 2017 | 501 | 473 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Money market funds at December 31, 2017 | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Money market funds at December 31, 2017 | $ 0 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2017USD ($)extension | Mar. 31, 2016USD ($) | |
Revolving Credit Facility Ending in March 2020 | ||
Debt Instrument | ||
Credit facility maximum borrowing capacity | $ 400,000,000 | |
Senior Notes | Senior Unsecured Five Year Term Loan issued March 2015 | ||
Debt Instrument | ||
Term loan, face amount | $ 600,000,000 | |
Long-term debt, gross amount | $ 540,000,000 | |
Interest rate | 3.375% | |
Unamortized debt issuance expense | $ 1,000,000 | |
Revolving credit agreement period (in years) | 5 years | |
Line of Credit | Revolving Credit Facility | Revolving Credit Facility Ending in March 2020 | ||
Debt Instrument | ||
Unamortized debt issuance expense | $ 1,000,000 | |
Revolving credit agreement period (in years) | 5 years | |
Number of one year extensions | extension | 2 | |
Duration of extension term | 1 year | |
Current borrowing capacity | $ 240,000,000 | |
Remaining borrowing capacity | $ 160,000,000 | |
Interest rate | 5.00% |
Debt - Annual Contractual Matur
Debt - Annual Contractual Maturities of Principal on Debt Outstanding (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 60 |
2,019 | 68 |
2,020 | 412 |
Total | $ 540 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |||
Interest Expense, Debt | $ 15 | $ 12 | $ 9 |
Segment, Other Supplemental I85
Segment, Other Supplemental Information and Concentrations - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment, Other Supplemental I86
Segment, Other Supplemental Information and Concentrations - Regional Segment Revenue and Gross Margin for Company (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | $ 2,156 | $ 2,322 | $ 2,530 |
Gross margin | 306 | 250 | 242 | 224 | 315 | 294 | 310 | 269 | |||
Segment Gross Profit | 1,110 | 1,275 | 1,386 | ||||||||
Stock-based compensation expense | 13 | 14 | 13 | ||||||||
Amortization of acquisition-related intangible assets | 1 | 2 | 16 | ||||||||
Acquisition, integration and reorganization-related costs | 6 | 9 | 11 | ||||||||
Amortization of capitalized software costs | 68 | 62 | 70 | ||||||||
Selling, general and administrative expenses | 652 | 664 | 765 | ||||||||
Research and development expenses | 306 | 212 | 228 | ||||||||
Impairment of goodwill, acquired intangibles and other assets | 0 | 80 | 478 | ||||||||
Income (loss) from operations | $ 59 | $ 7 | $ (1) | $ (1) | $ 98 | $ 89 | $ 87 | $ (42) | 64 | 232 | (195) |
Americas Data and Analytics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 1,195 | 1,334 | 1,470 | ||||||||
Gross margin | 676 | 796 | 871 | ||||||||
International Data and Analytics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 961 | 919 | 907 | ||||||||
Gross margin | 434 | 445 | 452 | ||||||||
Data and Analytics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 2,156 | 2,253 | 2,377 | ||||||||
Gross margin | 1,110 | 1,241 | 1,323 | ||||||||
Marketing Applications | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 0 | 69 | 153 | ||||||||
Gross margin | $ 0 | $ 34 | $ 63 |
Segment, Other Supplemental I87
Segment, Other Supplemental Information and Concentrations - Revenue by Product and Services (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | |||||||||||
Recurring revenue | $ 1,047 | $ 978 | $ 956 | ||||||||
Product - perpetual licenses and hardware | 429 | 600 | 752 | ||||||||
Consulting services | 680 | 675 | 669 | ||||||||
Marketing applications | 0 | 69 | 153 | ||||||||
Total revenue | $ 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | $ 2,156 | $ 2,322 | $ 2,530 |
Segment, Other Supplemental I88
Segment, Other Supplemental Information and Concentrations - Schedule of Revenue by Geographical Area (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | $ 2,156 | $ 2,322 | $ 2,530 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 1,089 | 1,246 | 1,428 | ||||||||
Americas (excluding United States) | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 107 | 123 | 125 | ||||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 960 | $ 953 | $ 977 |
Segment, Other Supplemental I89
Segment, Other Supplemental Information and Concentrations - Schedule of Property and Equipment by Geographic Area (Detail) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Identifiable Assets By Segment [Line Items] | ||
Property and equipment, net | $ 162 | $ 138 |
United States | ||
Schedule Of Identifiable Assets By Segment [Line Items] | ||
Property and equipment, net | 119 | 113 |
Americas (excluding United States) | ||
Schedule Of Identifiable Assets By Segment [Line Items] | ||
Property and equipment, net | 11 | 4 |
International | ||
Schedule Of Identifiable Assets By Segment [Line Items] | ||
Property and equipment, net | $ 32 | $ 21 |
Business Combinations and Oth90
Business Combinations and Other Investment Activities - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Business_Acquisitions | Dec. 31, 2015USD ($)Business_AcquisitionsTransaction | |
Business Acquisition | |||
Business acquisitions and other investing activities, net | 21 | 16 | 17 |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition | |||
Number of businesses acquired | Business_Acquisitions | 1 | 2 | |
Consideration transferred | $ 21 | $ 16 | |
Business acquisitions and other investing activities, net | 17 | ||
Number of equity investments | Transaction | 2 | ||
Number of business acquisitions | 85 | ||
Other Nonoperating Income (Expense) | |||
Business Acquisition | |||
Gain (loss) on sale of equity investment | $ 57 |
Accumulated Other Comprehensi91
Accumulated Other Comprehensive (Loss) Income - Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | $ 971 | $ 849 | $ 1,707 |
Ending Balance | 668 | 971 | 849 |
Available-for-sale Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | 0 | 0 | 31 |
Other comprehensive loss before reclassifications | 0 | 0 | (5) |
Amounts reclassified from AOCI | 0 | 0 | (26) |
Net other comprehensive loss | 0 | 0 | (31) |
Ending Balance | 0 | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (35) | (29) | (24) |
Other comprehensive loss before reclassifications | (5) | (9) | (8) |
Amounts reclassified from AOCI | 4 | 3 | 3 |
Net other comprehensive loss | (1) | (6) | (5) |
Ending Balance | (36) | (35) | (29) |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (54) | (47) | (11) |
Other comprehensive loss before reclassifications | 16 | (7) | (36) |
Amounts reclassified from AOCI | 0 | 0 | 0 |
Net other comprehensive loss | 16 | (7) | (36) |
Ending Balance | (38) | (54) | (47) |
AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (89) | (76) | (4) |
Other comprehensive loss before reclassifications | 11 | (16) | (49) |
Amounts reclassified from AOCI | 4 | 3 | (23) |
Net other comprehensive loss | 15 | (13) | (72) |
Ending Balance | $ (74) | $ (89) | $ (76) |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive (Loss) Income - Impact and Location of AOCI Reclassifications in Consolidated Statements of Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Cost of services | $ (809) | $ (751) | $ (765) | ||||||||
Selling, general and administrative expenses | (652) | (664) | (765) | ||||||||
Other income | (6) | (11) | 51 | ||||||||
Income tax benefit (expense) | (125) | (96) | (70) | ||||||||
Net (loss) income | $ (74) | $ 13 | $ (4) | $ (2) | $ 58 | $ 49 | $ 64 | $ (46) | (67) | 125 | (214) |
Amount Reclassified from of Accumulated Other Comprehensive Income | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Cost of services | (3) | (3) | (2) | ||||||||
Selling, general and administrative expenses | (2) | (1) | (1) | ||||||||
Other income | 0 | 0 | 42 | ||||||||
Income tax benefit (expense) | 1 | 1 | (16) | ||||||||
Net (loss) income | $ (4) | $ (3) | $ 23 |
Reorganization and Business T93
Reorganization and Business Transformation (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||||
Impairment of goodwill and acquired intangibles | $ 57 | $ 437 | |||
Marketing Applications | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | $ 2 | $ 14 | 4 | ||
Impairment of goodwill and acquired intangibles | 0 | 80 | 140 | ||
Other restructuring costs | 24 | 35 | 8 | ||
Restructuring Charges | $ 26 | 129 | 152 | ||
Employee Severance | Marketing Applications | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Payments for restructuring | $ 1 | $ 20 | $ 14 |
Impairment and Sale of the Ma94
Impairment and Sale of the Marketing Applications Business - Narrative (Details) - USD ($) $ in Millions | Jul. 01, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 22, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Impairment of goodwill | $ 57 | $ 437 | ||||||||
Impairment of goodwill, acquired intangibles and other assets | (76) | $ 0 | $ (80) | (478) | ||||||
Proceeds from sale of business | 0 | 92 | 0 | |||||||
Income tax expense (benefit) | $ 125 | $ 96 | 70 | |||||||
Marketing Applications | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Income tax expense (benefit) | $ 22 | |||||||||
Income tax expense, related to goodwill | $ 14 | |||||||||
Marketing Applications | Discontinued Operations, Held-for-sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Impairment of goodwill | $ 97 | $ 340 | ||||||||
Impairment of intangible assets | 41 | |||||||||
Revenue | $ 69 | 153 | ||||||||
Operating loss | 112 | (561) | ||||||||
Impairment of goodwill, acquired intangibles and other assets | $ (76) | $ (478) | ||||||||
Assets held for sale | $ 87 | |||||||||
Marketing Applications | Discontinued Operations, Disposed of by Sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Impairment of goodwill | 57 | |||||||||
Payments to acquire intangible assets | $ 19 | |||||||||
Affiliated Entity | Marketing Applications | Discontinued Operations, Disposed of by Sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Consideration transferred | $ 90 | |||||||||
Proceeds from sale of business | 0 | |||||||||
Transaction cost | $ 5 |
Quarterly Information (Detail)
Quarterly Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 626 | $ 526 | $ 513 | $ 491 | $ 626 | $ 552 | $ 599 | $ 545 | $ 2,156 | $ 2,322 | $ 2,530 |
Gross profit | 306 | 250 | 242 | 224 | 315 | 294 | 310 | 269 | |||
Operating (loss) income | 59 | 7 | (1) | (1) | 98 | 89 | 87 | (42) | 64 | 232 | (195) |
Net (loss) income | $ (74) | $ 13 | $ (4) | $ (2) | $ 58 | $ 49 | $ 64 | $ (46) | $ (67) | $ 125 | $ (214) |
Net (loss) income per share: | |||||||||||
Basic (in usd per share) | $ (0.61) | $ 0.11 | $ (0.03) | $ (0.02) | $ 0.45 | $ 0.38 | $ 0.49 | $ (0.36) | $ (0.53) | $ 0.96 | $ (1.53) |
Diluted (in usd per share) | $ (0.61) | $ 0.10 | $ (0.03) | $ (0.02) | $ 0.44 | $ 0.37 | $ 0.49 | $ (0.36) | $ (0.53) | $ 0.95 | $ (1.53) |
Impairment of goodwill, acquired intangibles and other assets | $ 76 | $ 0 | $ 80 | $ 478 | |||||||
Impairment of goodwill | $ 57 | $ 437 | |||||||||
Tax Cuts and Jobs Act of 2017, existing income tax expense (benefit) | $ 126 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) shares in Millions, $ in Millions | 1 Months Ended | |
Feb. 22, 2018 | Feb. 23, 2018 | |
Subsequent Event [Line Items] | ||
Amount of shares purchased (in shares) | 1.4 | |
Shares purchased | $ 49 | |
Remaining authorized amount of shares repurchased | $ 462 |
SCHEDULE II-VALUATION AND QUA97
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 19 | $ 22 | $ 19 |
Provision/reversals Charged to Costs & Expenses | (6) | 3 | 5 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 1 | 6 | 2 |
Balance at End of Period | 12 | 19 | 22 |
Deferred tax valuation allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 26 | 25 | 20 |
Provision/reversals Charged to Costs & Expenses | 6 | 1 | 5 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Period | 32 | $ 26 | $ 25 |
Marketing Applications | Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Deductions | $ 5 |