Document and Entity Information
Document and Entity Information Document - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33458 | |
Entity Registrant Name | TERADATA CORP /DE/ | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-3236470 | |
Entity Address, Address Line One | 17095 Via Del Campo | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92127 | |
City Area Code | 866 | |
Local Phone Number | 548-8348 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 108.5 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000816761 | |
Current Fiscal Year End Date | --12-31 | |
NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information [Line Items] | ||
Title of each class: | Common Stock, $0.01 par value | |
Trading Symbol | TDC | |
Name of Each Exchange on which Registered: | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | ||
Revenue | $ 434 | $ 468 |
Cost of revenue | ||
Cost of revenue | 209 | 244 |
Gross profit | 225 | 224 |
Operating expenses | ||
Selling, general and administrative expenses | 158 | 151 |
Research and development expenses | 73 | 78 |
Total operating expenses | 231 | 229 |
Loss from operations | (6) | (5) |
Interest expense | (7) | (9) |
Interest income | 2 | 6 |
Other expense | (3) | (2) |
Total other expense, net | (8) | (5) |
Loss before income taxes | (14) | (10) |
Income tax benefit | (182) | 0 |
Net income (loss) | $ 168 | $ (10) |
Net income (loss) per common share | ||
Basic (in dollars per share) | $ 1.52 | $ (0.09) |
Diluted (in dollars per share) | $ 1.51 | $ (0.09) |
Weighted average common shares outstanding | ||
Basic (in shares) | 110.3 | 117.1 |
Diluted (in shares) | 111.3 | 117.1 |
Recurring | ||
Revenue | ||
Revenue | $ 345 | $ 331 |
Cost of revenue | ||
Cost of revenue | 120 | 106 |
Perpetual software licenses and hardware | ||
Revenue | ||
Revenue | 14 | 31 |
Cost of revenue | ||
Cost of revenue | 9 | 25 |
Consulting services | ||
Revenue | ||
Revenue | 75 | 106 |
Cost of revenue | ||
Cost of revenue | $ 80 | $ 113 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 168 | $ (10) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (19) | (6) |
Derivatives: | ||
Unrealized loss on derivatives, before tax | (14) | (4) |
Unrealized loss on derivatives, tax portion | 3 | 1 |
Unrealized loss on derivatives, net of tax | (11) | (3) |
Defined benefit plans: | ||
Defined benefit plan adjustment, before tax | 3 | 1 |
Defined benefit plan adjustment, tax portion | (1) | 0 |
Defined benefit plan adjustment, net of tax | 2 | 1 |
Other comprehensive loss | (28) | (8) |
Comprehensive income (loss) | $ 140 | $ (18) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 394 | $ 494 |
Accounts receivable, net | 448 | 398 |
Inventories | 28 | 31 |
Other current assets | 104 | 91 |
Total current assets | 974 | 1,014 |
Property and equipment, net | 334 | 350 |
Capitalized software, net | 30 | 36 |
Right of use assets - operating lease, net | 49 | 51 |
Goodwill | 394 | 396 |
Capitalized contract costs, net | 87 | 91 |
Deferred income taxes | 253 | 87 |
Other assets | 30 | 32 |
Total assets | 2,151 | 2,057 |
Current liabilities | ||
Current portion of long-term debt | 25 | 25 |
Current portion of finance lease liability | 60 | 55 |
Current portion of operating lease liability | 17 | 20 |
Accounts payable | 96 | 66 |
Payroll and benefits liabilities | 86 | 157 |
Deferred revenue | 555 | 472 |
Other current liabilities | 67 | 91 |
Total current liabilities | 906 | 886 |
Long-term debt | 448 | 454 |
Finance lease liability | 75 | 75 |
Operating lease liability | 37 | 38 |
Pension and other postemployment plan liabilities | 133 | 137 |
Long-term deferred revenue | 44 | 61 |
Deferred tax liabilities | 6 | 6 |
Other liabilities | 153 | 138 |
Total liabilities | 1,802 | 1,795 |
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 March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Common stock: par value $0.01 per share, 500.0 shares authorized, 108.3 and 110.9 shares issued at March 31, 2020 and December 31, 2019, respectively | 1 | 1 |
Paid-in capital | 1,567 | 1,545 |
Accumulated deficit | (1,050) | (1,143) |
Accumulated other comprehensive loss | (169) | (141) |
Total stockholders’ equity | 349 | 262 |
Total liabilities and stockholders’ equity | $ 2,151 | $ 2,057 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 108,300,000 | 110,900,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net income (loss) | $ 168 | $ (10) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 42 | 37 |
Stock-based compensation expense | 21 | 15 |
Deferred income taxes | (149) | 2 |
Changes in assets and liabilities: | ||
Receivables | (50) | 143 |
Inventories | 3 | (24) |
Current payables and accrued expenses | (43) | (171) |
Deferred revenue | 66 | 74 |
Other assets and liabilities | (48) | (17) |
Net cash provided by operating activities | 10 | 49 |
Investing activities | ||
Expenditures for property and equipment | (10) | (15) |
Additions to capitalized software | (2) | (1) |
Net cash used in investing activities | (12) | (16) |
Financing activities | ||
Repurchases of common stock | (73) | (56) |
Repayments of long-term borrowings | (6) | 0 |
Payments of finance leases | (9) | (3) |
Other financing activities, net | 0 | 33 |
Net cash used in financing activities | (88) | (26) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (10) | 1 |
(Decrease) increase in cash, cash equivalents and restricted cash | (100) | 8 |
Cash, cash equivalents and restricted cash at beginning of period | 496 | 716 |
Cash, cash equivalents and restricted cash at end of period | 396 | 724 |
Supplemental cash flow disclosure: | ||
Assets acquired under operating lease | 3 | 3 |
Assets acquired under finance lease | 15 | 15 |
Total cash, cash equivalents and restricted cash | $ 396 | $ 724 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Shares issued, beginning balance (in shares) at Dec. 31, 2018 | 117 | ||||
Stockholders’ equity, beginning balance at Dec. 31, 2018 | $ 495 | $ 1 | $ 1,418 | $ (823) | $ (101) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (10) | (10) | |||
Employee stock compensation, employee stock purchase programs and option exercises, net of tax (in shares) | 1 | ||||
Employee stock compensation, employee stock purchase programs and option exercises, net of tax | 48 | 48 | |||
Repurchases of common stock, retired (in shares) | (1) | ||||
Repurchases of common stock, retired | (58) | (58) | |||
Pension and postemployment benefit plans, net of tax | 1 | 1 | |||
Unrealized loss on derivatives, net of tax | (3) | (3) | |||
Currency translation adjustment | (6) | (6) | |||
Shares issued, beginning balance (in shares) at Mar. 31, 2019 | 117 | ||||
Stockholders’ equity, ending balance at Mar. 31, 2019 | 467 | $ 1 | 1,466 | (891) | (109) |
Shares issued, beginning balance (in shares) at Dec. 31, 2019 | 111 | ||||
Stockholders’ equity, beginning balance at Dec. 31, 2019 | 262 | $ 1 | 1,545 | (1,143) | (141) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 168 | 168 | |||
Employee stock compensation, employee stock purchase programs and option exercises, net of tax (in shares) | 1 | ||||
Employee stock compensation, employee stock purchase programs and option exercises, net of tax | 22 | 22 | |||
Repurchases of common stock, retired (in shares) | (4) | ||||
Repurchases of common stock, retired | (75) | (75) | |||
Pension and postemployment benefit plans, net of tax | 2 | 2 | |||
Unrealized loss on derivatives, net of tax | (11) | (11) | |||
Currency translation adjustment | (19) | (19) | |||
Shares issued, beginning balance (in shares) at Mar. 31, 2020 | 108 | ||||
Stockholders’ equity, ending balance at Mar. 31, 2020 | $ 349 | $ 1 | $ 1,567 | $ (1,050) | $ (169) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the results of operations, financial position and cash flows of Teradata Corporation ("Teradata" or the "Company") for the interim periods presented herein. The year-end 2019 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Teradata’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the " 2019 |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Compensation-Retirement Benefits-Defined Benefit Plans-General. In August 2018, the Financial Accounting Standards Board ("FASB") issued new guidance that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and is to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact it may have on its disclosures. Accounting for Income Taxes. In December 2019, the FASB issued new guidance to simplify the accounting for income taxes. The new guidance changes various subtopics of accounting for income taxes including, but not limited to, accounting for "hybrid" tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, intraperiod tax allocation exception to incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax law, and year-to-date loss limitation in interim-period tax accounting. The guidance is effective for fiscal years beginning after December 15, 2020 with early adoption permitted, including interim periods within those years. The Company is currently evaluating this new guidance to determine the impact it may have on our financial position, results of operations or cash flows. Recently Adopted Guidance Fair Value Measurement. In August 2018, the FASB issued new guidance that modifies disclosure requirements related to fair value measurement. The Company adopted this guidance on January 1, 2020, which did not have a material impact on our condensed consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued new guidance that reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this guidance on January 1, 2020, which did not have a material impact on our condensed consolidated financial statements. Codification Improvements to Financial Instruments-Credit Losses, Derivatives and Hedging, and Financial Instruments. In June 2016, the FASB issued Accounting Standards, Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers Disaggregation of Revenue from Contracts with Customers The following table presents a disaggregation of revenue: Three Months Ended March 31, in millions 2020 2019 Americas Recurring $ 214 $ 213 Perpetual software licenses and hardware 4 19 Consulting services 26 37 Total Americas 244 269 EMEA Recurring 84 73 Perpetual software licenses and hardware 9 7 Consulting services 25 33 Total EMEA 118 113 APAC Recurring 47 45 Perpetual software licenses and hardware 1 5 Consulting services 24 36 Total APAC 72 86 Total Revenue $ 434 $ 468 Rental revenue, which is included in recurring revenue in the above table, was as follows: Three Months Ended March 31, in millions 2020 2019 Rental revenue* $ 19 $ 14 *Rental revenue includes hardware maintenance. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and customer advances and deposits (deferred revenue or contract liabilities) on the condensed consolidated balance sheet. Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing and the right to receive payment is conditional upon the completion of other performance obligations. Contract assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. The following table provides information about receivables, contract assets and deferred revenue from contracts with customers: As of in millions March 31, 2020 December 31, 2019 Accounts receivable, net $ 448 $ 398 Contract assets $ 9 $ 8 Current deferred revenue $ 555 $ 472 Long-term deferred revenue $ 44 $ 61 Revenue recognized during the three months ended March 31, 2020 from amounts included in deferred revenue at the beginning of the period was $204 million . Transaction Price Allocated to Unsatisfied Obligations The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at March 31, 2020: in millions Total at March 31, 2020 Year 1 Year 2 and Thereafter Remaining unsatisfied obligations $ 2,661 $ 1,434 $ 1,227 The amounts above represent the price of firm orders for which work has not been performed or goods have not been delivered and exclude unexercised contract options outside the stated contractual term that do not represent material rights to the customer. Although the Company believes that the contract value in the above table is firm, approximately $1,818 million of the amount includes customer-only general cancellation for convenience terms that the Company is contractually obligated to perform unless the customer notifies us. The Company expects to recognize revenue of approximately $385 million The Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded in Capitalized contract costs, net on the Company’s balance sheet. The capitalized amounts are calculated based on the annual recurring revenue and total contract value for individual multi-term contracts. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line basis over the expected period of benefit, which is typically around four years . These costs are periodically reviewed for impairment. The following table identifies the activity relating to capitalized contract costs: in millions December 31, 2019 Capitalized Amortization March 31, 2020 Capitalized contract costs $ 91 $ 6 $ (10 ) $ 87 in millions December 31, 2018 Capitalized Amortization March 31, 2019 Capitalized contract costs $ 54 $ 7 $ (4 ) $ 57 |
Contract Costs
Contract Costs | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract Costs | Revenue from Contracts with Customers Disaggregation of Revenue from Contracts with Customers The following table presents a disaggregation of revenue: Three Months Ended March 31, in millions 2020 2019 Americas Recurring $ 214 $ 213 Perpetual software licenses and hardware 4 19 Consulting services 26 37 Total Americas 244 269 EMEA Recurring 84 73 Perpetual software licenses and hardware 9 7 Consulting services 25 33 Total EMEA 118 113 APAC Recurring 47 45 Perpetual software licenses and hardware 1 5 Consulting services 24 36 Total APAC 72 86 Total Revenue $ 434 $ 468 Rental revenue, which is included in recurring revenue in the above table, was as follows: Three Months Ended March 31, in millions 2020 2019 Rental revenue* $ 19 $ 14 *Rental revenue includes hardware maintenance. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and customer advances and deposits (deferred revenue or contract liabilities) on the condensed consolidated balance sheet. Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing and the right to receive payment is conditional upon the completion of other performance obligations. Contract assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. The following table provides information about receivables, contract assets and deferred revenue from contracts with customers: As of in millions March 31, 2020 December 31, 2019 Accounts receivable, net $ 448 $ 398 Contract assets $ 9 $ 8 Current deferred revenue $ 555 $ 472 Long-term deferred revenue $ 44 $ 61 Revenue recognized during the three months ended March 31, 2020 from amounts included in deferred revenue at the beginning of the period was $204 million . Transaction Price Allocated to Unsatisfied Obligations The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at March 31, 2020: in millions Total at March 31, 2020 Year 1 Year 2 and Thereafter Remaining unsatisfied obligations $ 2,661 $ 1,434 $ 1,227 The amounts above represent the price of firm orders for which work has not been performed or goods have not been delivered and exclude unexercised contract options outside the stated contractual term that do not represent material rights to the customer. Although the Company believes that the contract value in the above table is firm, approximately $1,818 million of the amount includes customer-only general cancellation for convenience terms that the Company is contractually obligated to perform unless the customer notifies us. The Company expects to recognize revenue of approximately $385 million The Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded in Capitalized contract costs, net on the Company’s balance sheet. The capitalized amounts are calculated based on the annual recurring revenue and total contract value for individual multi-term contracts. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line basis over the expected period of benefit, which is typically around four years . These costs are periodically reviewed for impairment. The following table identifies the activity relating to capitalized contract costs: in millions December 31, 2019 Capitalized Amortization March 31, 2020 Capitalized contract costs $ 91 $ 6 $ (10 ) $ 87 in millions December 31, 2018 Capitalized Amortization March 31, 2019 Capitalized contract costs $ 54 $ 7 $ (4 ) $ 57 |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information As of In millions March 31, December 31, Inventories Finished goods $ 17 $ 19 Service parts 11 12 Total inventories $ 28 $ 31 Deferred revenue Deferred revenue, current $ 555 $ 472 Long-term deferred revenue 44 61 Total deferred revenue $ 599 $ 533 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period. As a result of the 2017 Tax Act, the Company changed its indefinite reversal assertion related to its undistributed earnings of its foreign subsidiaries and no longer considers a majority of its foreign earnings permanently reinvested outside of the United States ("U.S."). As a result, the effective tax rates in the periods presented are largely based upon the forecasted pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. The effective tax rate is as follows: Three Months Ended March 31, In millions 2020 2019 Effective tax rate 1,300.0 % — % For the three months ended March 31, 2020 , a net $152 million discrete tax benefit was recorded. The Company recorded approximately $157 million of discrete tax benefit related to an intra-entity asset transfer of certain of its intellectual property ("IP") to one of its Irish subsidiaries, which occurred on January 1, 2020. The tax benefit for this intra-entity asset transfer was recorded as a deferred tax asset and represents the book and tax basis difference on the transferred assets measured based on the applicable Irish statutory tax rate. The tax deductions for amortization of the IP asset will be recognized in the future, and any amortization not deducted for tax purposes will be carried forward indefinitely under Irish tax laws. The Company expects to be able to realize the deferred tax assets resulting from these intra-entity asset transfers. This tax benefit was offset by discrete tax expense of $6 million related to equity compensation vesting. As a result of these discrete items, the Company recorded $182 million of income tax benefit on a on a pre-tax net loss of $14 million for the three months ended March 31, 2020 , resulting in an effective income tax rate of 1,300.0% . For the three months ended March 31, 2019 , no material discrete tax items were recorded. The Company estimates its annual effective tax rate for 2020 to be approximately 4,800% , which takes into consideration, among other things, the forecasted earnings mix by jurisdiction and the impact of discrete tax items described above. The 2017 Tax Act subjects U.S. shareholders to a tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. The Company has elected to provide for the tax expense related to GILTI in the year the tax is incurred and does not anticipate a material impact of GILTI tax to our forecasted marginal effective tax rate for 2020. In April 2020 we became aware of a withholding tax regulation that could be interpreted to apply to certain of our previous intra-group transactions. We are evaluating whether the interpretation of this regulation could apply to our facts and circumstances, and, upon conclusion of our analysis, we may establish a reserve related to this matter |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As a portion of Teradata’s operations is conducted 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. In an attempt 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 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. 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. 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 revenues or in other income (expense), depending on the nature of the related hedged item. In June 2018, Teradata executed a five-year interest rate swap with a $500 million initial notional amount to hedge the floating interest rate of its term loan, as more fully described in Note 10. The Company uses interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan. The notional amount of the hedge will step-down according to the amortization schedule of the term loan. The notional amount of the hedge was $475 million as of March 31, 2020. The Company performed an initial effectiveness assessment in the third quarter of 2018 on the interest rate swap, and the hedge was determined to be effective. The hedge is being evaluated qualitatively on a quarterly basis for effectiveness. Changes in fair value are recorded in Accumulated Other Comprehensive Loss and periodic settlements of the swap will be recorded in interest expense along with the interest on amounts outstanding under the term loan. The following table identifies the contract notional amount of the Company’s derivative financial instruments: As of In millions March 31, December 31, Contract notional amount of foreign exchange forward contracts $ 199 $ 150 Net contract notional amount of foreign exchange forward contracts $ 58 $ 41 Contract notional amount of interest rate swap $ 475 $ 482 All derivatives are recognized in the condensed consolidated balance sheets at their fair value. 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. Refer to Note 9 for disclosures related to the fair value of all derivative assets and liabilities. 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 foreign exchange and interest 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary 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, IP, tax matters and other regulatory compliance and general matters. We are not currently a party to any litigation, nor are we aware of any threatened litigation against us, that we believe would materially adversely affect our business, operating results, financial condition or cash flows. 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 with a third-party leasing company as part of a revenue transaction, whereby the leasing company purchases the equipment from Teradata and leases it to the customer. 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 March 31, 2020 , the maximum future payment obligation of this guaranteed value and the associated liability balance was $2 million . For customers that purchase hardware, the Company provides a standard manufacturer’s warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. The estimated liabilities for warranty costs are not material, given that most customers do not purchase hardware under the subscription model. The Company also offers extended and/or enhanced coverage to its customers in the form of maintenance contracts. Teradata 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. 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 offerings. 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. 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 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 March 31, 2020 and December 31, 2019 . 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 behalf of the Company. Although many of these components are available from multiple sources, Teradata utilizes preferred supplier relationships to provide more consistent and optimal 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 for components that may be in excess of demand. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
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, interest rate swaps 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, foreign exchange forward contracts. Additionally, in June 2018, Teradata executed a five-year interest rate swap with a $500 million initial notional amount in order to hedge the floating interest rate on its term loan. The fair value of these contracts and swaps 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 of unrealized gains for open contracts are recorded in other assets and the fair value of unrealized losses are recorded in other liabilities in the Company's balance sheet. The fair value of foreign exchange forward contracts recorded in other assets was $2 million at March 31, 2020 and immaterial at December 31, 2019. The fair value of foreign exchange forward contracts recorded in other liabilities at March 31, 2020 and December 31, 2019 was not material. Realized gains and losses from the Company’s fair value hedges net of corresponding gains or losses on the underlying exposures were immaterial for the three months ended March 31, 2020 and 2019. The Company’s other assets and liabilities measured at fair value on a recurring basis and subject to fair value disclosure requirements at March 31, 2020 and December 31, 2019 were as follows: Fair Value Measurements at Reporting Date Using In millions Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds at March 31, 2020 $ 122 $ 122 $ — $ — Money market funds at December 31, 2019 $ 141 $ 141 $ — $ — Liabilities Interest rate swap at March 31, 2020 $ 33 $ — $ 33 $ — Interest rate swap at December 31, 2019 $ 19 $ — $ 19 $ — |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt In June 2018, Teradata replaced an existing five-year, $400 million revolving credit facility with a new $ 400 million revolving credit facility (the "Credit Facility"). The Credit Facility expires in June 2023, 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. In addition, under the terms of the Credit Facility, Teradata from time to time and subject to certain conditions may increase the lending commitments under the Credit Facility in an aggregate principal amount up to an additional $200 million , to the extent that existing or new lenders agree to provide such additional commitments. The outstanding principal amount of the Credit Facility bears interest at a floating rate based upon, at Teradata’s option, a negotiated base rate or a Eurodollar rate plus, in each case, a margin based on Teradata’s leverage ratio. In the near term, Teradata would anticipate choosing a floating rate based on London Interbank Offered Rate ("LIBOR"). The Credit Facility is unsecured but is guaranteed by certain of Teradata’s material domestic subsidiaries and contains certain representations and warranties, conditions, affirmative, negative and financial covenants, and events of default customary for such facilities. As of March 31, 2020, the Company had no borrowings outstanding under the Credit Facility, leaving $400 million in additional borrowing capacity available under the Credit Facility. The Company was in compliance with all covenants under the Credit Facility as of March 31, 2020. Also, in June 2018, Teradata closed on a new senior unsecured $500 million five-year term loan, the proceeds of which plus additional cash-on-hand were used to pay off the remaining $525 million of principal on its previous term loan. The term loan is payable in quarterly installments, which commenced on June 30, 2019, with 1.25% of the initial principal amount due on each of the first eight payment dates; 2.50% of the initial principal amount due on each of the next four payment dates; 5.0% of the initial principal amount due on each of the next three payment dates; and all remaining principal due in June 2023. The outstanding principal amount of the term loan bears interest at a floating rate based upon a negotiated base rate or a Eurodollar rate, plus in each case, a margin based on the leverage ratio of the Company. As of March 31, 2020 , the term loan principal outstanding was $475 million . As disclosed in Note 7, Teradata entered into an interest rate swap to hedge the floating interest rate of the term loan. As a result of the swap, Teradata’s fixed rate on the term loan equals 2.86% plus the applicable leverage-based margin as defined in the term loan agreement. As of March 31, 2020 , the all-in fixed rate is 4.36% . The Company was in compliance with all covenants under the term loan as of March 31, 2020 . Teradata’s term loan is recognized on the Company’s balance sheet at its unpaid principal balance, net of deferred issuance costs, 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. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share is calculated by dividing net income 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 resulting from stock options, restricted stock awards and other stock awards. The components of basic and diluted earnings per share are as follows: Three Months Ended In millions, except per share amounts 2020 2019 Net income (loss) attributable to common stockholders $ 168 $ (10 ) Weighted average outstanding shares of common stock 110.3 117.1 Dilutive effect of employee stock options, restricted stock and other stock awards 1.0 — Common stock and common stock equivalents 111.3 117.1 Net income (loss) per share: Basic $ 1.52 $ (0.09 ) Diluted $ 1.51 $ (0.09 ) For the first quarter of 2019, due to the net loss attributable to Teradata common stockholders, 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. The fully diluted shares would have been 118.7 million for the first quarter of 2019. Options to purchase 2.2 million shares of common stock for the three months ended March 31, 2020 and 2.1 million shares of common stock for the three months ended March 31, 2019 were not included in the computation of diluted |
Segment and Other Supplemental
Segment and Other Supplemental Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Other Supplemental Information | Segment and Other Supplemental Information Teradata manages its business under three geographic regions, which are also the Company’s operating segments: (1) Americas region (North America and Latin America); (2) EMEA region (Europe, Middle East and Africa) and (3) APAC region (Asia Pacific and Japan). For purposes of discussing results by segment, management excludes the impact of certain items, consistent with the manner by which 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, who is our Interim President and Chief Executive Officer, 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: Three Months Ended In millions 2020 2019 Segment revenue Americas $ 244 $ 269 EMEA 118 113 APAC 72 86 Total revenue 434 468 Segment gross profit Americas 144 157 EMEA 61 50 APAC 30 34 Total segment gross profit 235 241 Stock-based compensation costs 4 3 Acquisition, integration, reorganization and transformation-related costs — 3 Amortization of capitalized software costs 6 11 Total gross profit 225 224 Selling, general and administrative expenses 158 151 Research and development expenses 73 78 Loss from operations $ (6 ) $ (5 ) |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Compensation-Retirement Benefits-Defined Benefit Plans-General. In August 2018, the Financial Accounting Standards Board ("FASB") issued new guidance that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and is to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact it may have on its disclosures. Accounting for Income Taxes. In December 2019, the FASB issued new guidance to simplify the accounting for income taxes. The new guidance changes various subtopics of accounting for income taxes including, but not limited to, accounting for "hybrid" tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, intraperiod tax allocation exception to incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax law, and year-to-date loss limitation in interim-period tax accounting. The guidance is effective for fiscal years beginning after December 15, 2020 with early adoption permitted, including interim periods within those years. The Company is currently evaluating this new guidance to determine the impact it may have on our financial position, results of operations or cash flows. Recently Adopted Guidance Fair Value Measurement. In August 2018, the FASB issued new guidance that modifies disclosure requirements related to fair value measurement. The Company adopted this guidance on January 1, 2020, which did not have a material impact on our condensed consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued new guidance that reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this guidance on January 1, 2020, which did not have a material impact on our condensed consolidated financial statements. Codification Improvements to Financial Instruments-Credit Losses, Derivatives and Hedging, and Financial Instruments. In June 2016, the FASB issued Accounting Standards, Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of revenue: Three Months Ended March 31, in millions 2020 2019 Americas Recurring $ 214 $ 213 Perpetual software licenses and hardware 4 19 Consulting services 26 37 Total Americas 244 269 EMEA Recurring 84 73 Perpetual software licenses and hardware 9 7 Consulting services 25 33 Total EMEA 118 113 APAC Recurring 47 45 Perpetual software licenses and hardware 1 5 Consulting services 24 36 Total APAC 72 86 Total Revenue $ 434 $ 468 |
Schedule of Operating Lease Income | Rental revenue, which is included in recurring revenue in the above table, was as follows: Three Months Ended March 31, in millions 2020 2019 Rental revenue* $ 19 $ 14 *Rental revenue includes hardware maintenance. |
Schedule of Assets and Liabilities Related to Contracts with Customers | The following table provides information about receivables, contract assets and deferred revenue from contracts with customers: As of in millions March 31, 2020 December 31, 2019 Accounts receivable, net $ 448 $ 398 Contract assets $ 9 $ 8 Current deferred revenue $ 555 $ 472 Long-term deferred revenue $ 44 $ 61 |
Schedule of Estimated Revenue Expected to be Recognized in the Future | The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at March 31, 2020: in millions Total at March 31, 2020 Year 1 Year 2 and Thereafter Remaining unsatisfied obligations $ 2,661 $ 1,434 $ 1,227 |
Contract Costs (Tables)
Contract Costs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Activity Related to Capitalized Contract Cost | The following table identifies the activity relating to capitalized contract costs: in millions December 31, 2019 Capitalized Amortization March 31, 2020 Capitalized contract costs $ 91 $ 6 $ (10 ) $ 87 in millions December 31, 2018 Capitalized Amortization March 31, 2019 Capitalized contract costs $ 54 $ 7 $ (4 ) $ 57 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Financial Information | As of In millions March 31, December 31, Inventories Finished goods $ 17 $ 19 Service parts 11 12 Total inventories $ 28 $ 31 Deferred revenue Deferred revenue, current $ 555 $ 472 Long-term deferred revenue 44 61 Total deferred revenue $ 599 $ 533 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rate | The effective tax rate is as follows: Three Months Ended March 31, In millions 2020 2019 Effective tax rate 1,300.0 % — % |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table identifies the contract notional amount of the Company’s derivative financial instruments: As of In millions March 31, December 31, Contract notional amount of foreign exchange forward contracts $ 199 $ 150 Net contract notional amount of foreign exchange forward contracts $ 58 $ 41 Contract notional amount of interest rate swap $ 475 $ 482 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements | The Company’s other assets and liabilities measured at fair value on a recurring basis and subject to fair value disclosure requirements at March 31, 2020 and December 31, 2019 were as follows: Fair Value Measurements at Reporting Date Using In millions Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds at March 31, 2020 $ 122 $ 122 $ — $ — Money market funds at December 31, 2019 $ 141 $ 141 $ — $ — Liabilities Interest rate swap at March 31, 2020 $ 33 $ — $ 33 $ — Interest rate swap at December 31, 2019 $ 19 $ — $ 19 $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share are as follows: Three Months Ended In millions, except per share amounts 2020 2019 Net income (loss) attributable to common stockholders $ 168 $ (10 ) Weighted average outstanding shares of common stock 110.3 117.1 Dilutive effect of employee stock options, restricted stock and other stock awards 1.0 — Common stock and common stock equivalents 111.3 117.1 Net income (loss) per share: Basic $ 1.52 $ (0.09 ) Diluted $ 1.51 $ (0.09 ) |
Segment and Other Supplementa_2
Segment and Other Supplemental Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Regional Segment Revenue and Gross Margin | The following table presents segment revenue and segment gross profit for the Company: Three Months Ended In millions 2020 2019 Segment revenue Americas $ 244 $ 269 EMEA 118 113 APAC 72 86 Total revenue 434 468 Segment gross profit Americas 144 157 EMEA 61 50 APAC 30 34 Total segment gross profit 235 241 Stock-based compensation costs 4 3 Acquisition, integration, reorganization and transformation-related costs — 3 Amortization of capitalized software costs 6 11 Total gross profit 225 224 Selling, general and administrative expenses 158 151 Research and development expenses 73 78 Loss from operations $ (6 ) $ (5 ) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 434 | $ 468 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 244 | 269 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 118 | 113 |
APAC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 72 | 86 |
Recurring | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 345 | 331 |
Recurring | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 214 | 213 |
Recurring | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 84 | 73 |
Recurring | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 47 | 45 |
Perpetual software licenses and hardware | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 14 | 31 |
Perpetual software licenses and hardware | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4 | 19 |
Perpetual software licenses and hardware | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9 | 7 |
Perpetual software licenses and hardware | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1 | 5 |
Consulting services | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 26 | 37 |
Consulting services | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25 | 33 |
Consulting services | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 24 | $ 36 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Operating Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Rental revenue | $ 19 | $ 14 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 448 | $ 398 |
Contract assets | 9 | 8 |
Deferred revenue, current | 555 | 472 |
Long-term deferred revenue | $ 44 | $ 61 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, revenue recognized | $ 204 |
Remaining performance obligation, amount of customer only general cancellation | 1,818 |
Remaining performance obligation, amount of non-cancelable contracts | $ 385 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Transaction Price Allocated to the Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 2,661 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 1,434 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 1,227 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period |
Contract Costs (Details)
Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized contract cost, amortization period | 4 years | |
Capitalized Contract Cost, Net [Roll Forward] | ||
Capitalized contract cost, net at period start | $ 91 | $ 54 |
Capitalized | 6 | 7 |
Amortization | (10) | (4) |
Capitalized contract cost, net at period end | $ 87 | $ 57 |
Supplemental Financial Inform_3
Supplemental Financial Information (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories | ||
Finished goods | $ 17 | $ 19 |
Service parts | 11 | 12 |
Total inventories | 28 | 31 |
Deferred revenue | ||
Deferred revenue, current | 555 | 472 |
Long-term deferred revenue | 44 | 61 |
Total deferred revenue | $ 599 | $ 533 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Effective tax rate (percentage) | 1300.00% | 0.00% | |
Discrete income tax benefit | $ 152,000,000 | $ 0 | |
Discrete tax benefit related to intra-entity asset transfer | 157,000,000 | ||
Tax expense related to equity compensation vesting | 6,000,000 | ||
Income tax benefit | 182,000,000 | 0 | |
Pre-tax net loss | $ 14,000,000 | $ 10,000,000 | |
Scenario, Forecast | |||
Operating Loss Carryforwards [Line Items] | |||
Effective tax rate (percentage) | 4800.00% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Detail) - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | |
Interest Rate Swap | |||
Derivative | |||
Derivative, term of contract (in years) | 5 years | ||
Derivative, contract notional amount | $ 500 | $ 475 | $ 482 |
Foreign Exchange Contract | |||
Derivative | |||
Derivative, contract notional amount | 199 | 150 | |
Net contract notional amount of foreign exchange forward contracts | $ 58 | $ 41 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Mar. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum future payment obligation of the guaranteed value and associated liabilities | $ 2 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | |
Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative, term of contract (in years) | 5 years | ||
Derivative, contract notional amount | $ 500 | $ 475 | $ 482 |
Fair value of foreign exchange forward contracts | 33 | 19 | |
Other Assets | Foreign Exchange Forward | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of foreign exchange forward contracts | 2 | 0 | |
Other Liabilities | Foreign Exchange Forward | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of foreign exchange forward contracts | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 122 | $ 141 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 122 | 141 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | 33 | 19 |
Interest Rate Swap | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | 0 | 0 |
Interest Rate Swap | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | 33 | 19 |
Interest Rate Swap | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | $ 0 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Jun. 11, 2018USD ($) | May 31, 2018USD ($) | Mar. 31, 2020USD ($)renewal | Jun. 30, 2018USD ($) |
Debt Instrument | ||||
Number of renewals | renewal | 2 | |||
Renewal term | 1 year | |||
Borrowings outstanding under the Credit Facility | $ 0 | |||
Term Loan | ||||
Debt Instrument | ||||
Extinguishment of debt, amount | $ 525,000,000 | |||
Revolving Credit Facility Ending in March 2020 | Revolving Credit Facility | ||||
Debt Instrument | ||||
Term of loan (years) | 5 years | |||
Credit facility maximum borrowing capacity | $ 400,000,000 | |||
Credit facility, additional borrowings capacity | 200,000,000 | |||
Revolving Credit Facility Ending In June 2023 | Revolving Credit Facility | ||||
Debt Instrument | ||||
Credit facility maximum borrowing capacity | 400,000,000 | $ 400,000,000 | ||
Senior Unsecured term loan Issued June 2018 | Senior Unsecured Term Loan | ||||
Debt Instrument | ||||
Term of loan (years) | 5 years | |||
Debt instrument, face amount | $ 500,000,000 | |||
Principal outstanding | $ 475,000,000 | |||
Debt Instrument, Redemption, Period One | ||||
Debt Instrument | ||||
Term loan, payable quarterly installments (percentage) | 1.25% | |||
Debt Instrument, Redemption, Period Two | ||||
Debt Instrument | ||||
Term loan, payable quarterly installments (percentage) | 2.50% | |||
Debt Instrument, Redemption, Period Three | ||||
Debt Instrument | ||||
Term loan, payable quarterly installments (percentage) | 5.00% | |||
Interest Rate Swap | ||||
Debt Instrument | ||||
Fixed rate on term loan (percentage) | 2.86% | |||
All-in fixed rate (percentage) | 4.36% |
Earnings per Share (Detail)
Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to common stockholders | $ 168 | $ (10) |
Weighted average outstanding shares of common stock (in shares) | 110.3 | 117.1 |
Dilutive effect of employee stock options, restricted stock and other stock awards (in shares) | 1 | 0 |
Common stock and common stock equivalents (in shares) | 111.3 | 117.1 |
Net income (loss) per share: | ||
Basic (in dollars per share) | $ 1.52 | $ (0.09) |
Diluted (in dollars per share) | $ 1.51 | $ (0.09) |
Weighted average number of shares outstanding, diluted and anti-dilutive (in shares) | 118.7 | |
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares) | 2.2 | 2.1 |
Segment and Other Supplementa_3
Segment and Other Supplemental Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment and Other Supplementa_4
Segment and Other Supplemental Information - Regional Segment Revenue and Gross Margin for Company (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information | ||
Segment revenue | $ 434 | $ 468 |
Gross profit | 225 | 224 |
Selling, general and administrative expenses | 158 | 151 |
Research and development expenses | 73 | 78 |
Loss from operations | (6) | (5) |
Americas | ||
Segment Reporting Information | ||
Segment revenue | 244 | 269 |
EMEA | ||
Segment Reporting Information | ||
Segment revenue | 118 | 113 |
APAC | ||
Segment Reporting Information | ||
Segment revenue | 72 | 86 |
Operating segments | ||
Segment Reporting Information | ||
Gross profit | 235 | 241 |
Operating segments | Americas | ||
Segment Reporting Information | ||
Gross profit | 144 | 157 |
Operating segments | EMEA | ||
Segment Reporting Information | ||
Gross profit | 61 | 50 |
Operating segments | APAC | ||
Segment Reporting Information | ||
Gross profit | 30 | 34 |
Segment reconciling items | ||
Segment Reporting Information | ||
Stock-based compensation costs | 4 | 3 |
Acquisition, integration, reorganization and transformation-related costs | 0 | 3 |
Amortization of capitalized software costs | $ 6 | $ 11 |
Uncategorized Items - tdc-03312
Label | Element | Value |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 2,000,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 2,000,000 |