UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 6, 2014

TERADATA CORPORATION
(Exact name of registrant as specified in its charter)

Commission File Number 001-33458

Delaware	 	75-3236470	
(State or other jurisdiction
of incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
10000 Innovation Drive
Dayton, Ohio 45342
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (866) 548-8348
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02	Results of Operations and Financial Condition.	
The Company is furnishing the following information as required under Item 2.02 “Results of Operations and Financial Condition” of Form 8-K and Item 7.01 “Regulation FD Disclosure.” Such information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.
On November 6, 2014, the Company issued a press release setting forth its third quarter 2014 revenue and earnings per share amounts. A copy of the press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
 
Item 7.01	Regulation FD Disclosure.	
The information set forth above under Item 2.02 “Results of Operations and Financial Condition” is furnished pursuant to this Item 7.01 and Exhibit 99.1 is hereby incorporated by reference into this Item 7.01.
 
Item 9.01	Financial Statements and Exhibits.	
(d) Exhibits:
The following exhibits are attached with this current report on Form 8-K:

Exhibit No.	  	Description	
		
99.1	  	Press Release, dated November 6, 2014, issued by the Company.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	 		 	TERADATA CORPORATION	
				
Date: November 6, 2014	 		 	By:	 	/s/ Stephen M. Scheppmann	
	 		 		 	Stephen M. Scheppmann	
	 		 		 	Executive Vice President and Chief Financial Officer	

Index to Exhibits

Exhibit No.	  	Description	
		
99.1	  	Press Release, dated November 6, 2014, issued by the Company.	

Exhibit 99.1

	 	NEWS RELEASE	
Teradata Reports 2014 Third Quarter Results
 
 	•	 	Revenue of $667 million, up 1 percent in constant currency (1)	
 
 	•	 	GAAP EPS $0.60, non-GAAP EPS $0.71 (2)	
 
 	•	 	Year-to-date Cash from Operations increased 30 percent versus prior year period	
ATLANTA, Georgia (November 6, 2014) – Teradata Corp. (NYSE: TDC ) reported revenue of $667 million for the quarter ended September 30, 2014, versus $666 million reported in the third quarter of 2013. Revenue in the third quarter increased 1 percent when compared in constant currency. (1)
Gross margin in the third quarter was 52.5 percent, as reported under U.S. Generally Accepted Accounting Principles (GAAP), versus 53.8 percent in the third quarter of 2013. On a non-GAAP basis, excluding stock-based compensation expense and the other special items described in footnote #2, gross margin was 53.8 percent, versus 55.0 percent in the third quarter of 2013. (2)
Teradata reported third quarter net income of $94 million, or $0.60 per diluted share, which compared to net income of $98 million, or $0.59 per diluted share, in the third quarter of 2013. Stock-based compensation expense and other special items reduced Teradata’s third quarter net income by $17 million (or 11 cents of EPS) as reported under GAAP. (2) Excluding stock-based compensation expense and the other special items detailed in footnote #2, non-GAAP net income in the third quarter of 2014 was $111 million, or $0.71 per diluted share, versus $116 million, or $0.70 per diluted share, in the third quarter of 2013. (2)
“We continue to experience excellent revenue growth with our Big Data analytics solutions which include Aster, Big Data appliances, Hadoop and related software tools and services,” said Mike Koehler, president and chief executive officer, Teradata Corporation. “Data Warehouse new customer wins in the quarter and year-to-date are at near record levels, and we are seeing strong market adoption of our Unified Data Architecture. Our increased investments in Big Data analytics and Integrated Marketing Cloud solutions will help drive further revenue growth longer term.”
 
1

Segment Revenue Performance
(in millions)

 	  	For the Three Months Ended September 30	 	
 	  	2014	 	  	2013	 	  	% Change
as Reported	 	 	% Change
in Constant
Currency (1)	 	
Americas	  	$	405	  	  	$	409	  	  	 	-1	% 	 	 	-1	% 	
International	  	 	262	  	  	 	257	  	  	 	2	% 	 	 	2	% 	
	  	 	 	 	  	 	 	 	  				 				
Total Revenue	  	$	667	  	  	$	666	  	  	 	0	% 	 	 	1	% 	

																	
 	  	For the Nine Months Ended September 30	 	
 	  	2014	 	  	2013	 	  	% Change
as Reported	 	 	% Change
in Constant
Currency (1)	 	
Americas	  	$	1,163	  	  	$	1,169	  	  	 	-1	% 	 	 	0	% 	
International	  	 	808	  	  	 	754	  	  	 	7	% 	 	 	7	% 	
	  	 	 	 	  	 	 	 	  				 				
Total Revenue	  	$	1,971	  	  	$	1,923	  	  	 	2	% 	 	 	3	% 	
	  	 	 	 	  	 	 	 	  				 				
Operating Income
Third quarter operating income of $123 million decreased from $132 million reported in the third quarter of 2013. On a non-GAAP basis, operating income was $150 million versus $158 million in the third quarter of 2013. (2) The difference was primarily due to lower product margins due to increased amortization of previously capitalized software development costs, product and deal mix and increased research and development expense.
Cash Flow
During the third quarter of 2014, Teradata generated $102 million of cash from operating activities, a 59 percent increase compared to $64 million in the prior-year period. Teradata generated $66 million of free cash flow (cash from operating activities less capital expenditures and additions to capitalized software) (3) in the third quarter of 2014, compared to $29 million in the same period in 2013.
Year to date, Teradata generated $583 million of cash from operating activities, a 30 percent increase compared to $447 million in the prior-year period. Teradata generated $489 million of free cash flow (3) in the first nine months of 2014, a 41 percent increase from $347 million generated in the same period in 2013.
Balance Sheet
Teradata ended the quarter with $848 million in cash, down $86 million from the cash balance at June 30, 2014. During the quarter Teradata purchased approximately 2.4 million shares of its stock worth approximately $102 million. Year to date, through September 30, Teradata purchased 6.9 million shares, worth approximately $293 million.
 
2

As of September 30, 2014, Teradata had total debt of $255 million outstanding under a term loan. Additionally, Teradata has $300 million available through a pre-arranged credit facility; however, no funds were drawn from the credit facility.
2014 Outlook
Teradata continues to expect full-year 2014 constant currency revenue growth to be at the low end of its original 3-7 percent guidance range. However, based on currency rates at the end of October 2014, currency translation is now expected to have a 1 percentage point headwind on Teradata’s full-year revenue comparison. (1)
Teradata continues to expect 2014 non-GAAP earnings per share (which excludes stock-based compensation expense and other special items) to be at the low end of the $2.85-$3.00 range. (2)
2014 Third Quarter Earnings Conference Call
A conference call is scheduled today at 8:30 a.m. (ET) to discuss the company’s third quarter 2014 results. Access to the conference call, as well as a replay of the call, is available on Teradata’s website at investor.teradata.com .
Supplemental financial information regarding Teradata’s operating results is also available on the Investor Relations page of Teradata’s website.
 
3

1.	The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates. See the foreign currency fluctuation schedule on the Investor Relations page of the company’s website at investor.teradata.com , which is used to determine revenue on a constant currency (CC) basis.	
(in millions)

 	  	For the Three Months
Ended September 30	 	  	 	 	 	 	 	 	For the Nine Months
Ended September 30	 	  	 	 	 	 	 	
 	  	2014	 	  	2013	 	  	Chg
As
Rpt’d	 	 	Chg
In
CC	 	 	2014	 	  	2013	 	  	Chg
As
Rpt’d	 	 	Chg
In
CC	 	
Revenue	  				  				  				 				 				  				  				 				
Products (software/hardware)	  	$	294	  	  	$	306	  	  	 	-4	% 	 	 	-3	% 	 	$	867	  	  	$	858	  	  	 	1	% 	 	 	1	% 	
	  	 	 	 	  	 	 	 	  				 				 	 	 	 	  	 	 	 	  				 				
Consulting services	  	 	200	  	  	 	200	  	  	 	0	% 	 	 	1	% 	 	 	592	  	  	 	593	  	  	 	0	% 	 	 	0	% 	
Maintenance services	  	 	173	  	  	 	160	  	  	 	8	% 	 	 	8	% 	 	 	512	  	  	 	472	  	  	 	8	% 	 	 	9	% 	
	  	 	 	 	  	 	 	 	  				 				 	 	 	 	  	 	 	 	  				 				
Total Services	  	$	373	  	  	$	360	  	  	 	4	% 	 	 	4	% 	 	$	1,104	  	  	$	1,065	  	  	 	4	% 	 	 	4	% 	
	  	 	 	 	  	 	 	 	  				 				 	 	 	 	  	 	 	 	  				 				
Total Revenue	  	$	667	  	  	$	666	  	  	 	0	% 	 	 	1	% 	 	$	1,971	  	  	$	1,923	  	  	 	2	% 	 	 	3	% 	
	  	 	 	 	  	 	 	 	  				 				 	 	 	 	  	 	 	 	  				 				
By segment	  				  				  				 				 				  				  				 				
Americas	  	$	405	  	  	$	409	  	  	 	-1	% 	 	 	-1	% 	 	$	1,163	  	  	$	1,169	  	  	 	-1	% 	 	 	0	% 	
International	  	 	262	  	  	 	257	  	  	 	2	% 	 	 	2	% 	 	 	808	  	  	 	754	  	  	 	7	% 	 	 	7	% 	
	  	 	 	 	  	 	 	 	  				 				 	 	 	 	  	 	 	 	  				 				
Total Revenue	  	$	667	  	  	$	666	  	  	 	0	% 	 	 	1	% 	 	$	1,971	  	  	$	1,923	  	  	 	2	% 	 	 	3	% 	

2.	Teradata reports its results in accordance with GAAP. However, as described below, the company believes that certain non-GAAP measures (such as non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted share, or EPS, which exclude certain items as well as free cash flow) are useful for investors. Our non-GAAP measures are not meant to be considered in isolation or as substitutes for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.	
Special items included in Teradata’s 2014 third quarter GAAP operating income results as reported in this release included $11 million of stock-based compensation expense; $12 million of amortization of acquisition-related intangible assets; and $4 million of acquisition, integration and reorganization expenses.
Teradata’s year-to-date 2013 GAAP net income included a $4 million income tax benefit related to the 2012 U.S. Research & Development tax credit. This benefit was included in Teradata’s non-GAAP results in the fourth quarter of 2012, since the benefit related to the 2012 tax reporting period. However, Teradata could not include the tax benefit in its GAAP results in the fourth quarter of 2012 due to the American Taxpayer Relief Act of 2012 not being enacted until January 2013. As a result, the
$4 million tax benefit was included in Teradata’s 2013 GAAP net income, but was excluded from the company’s non-GAAP net income. In addition to the tax item above, Teradata’s year-to-date 2014 GAAP net income also included $6 million impairment of an equity investment.
The following tables reconcile Teradata’s actual and projected results and EPS under GAAP to the company’s actual and projected non-GAAP results and EPS for the periods presented, which exclude certain items. Our management regularly uses supplemental non-GAAP financial measures, such as gross margin, operating income, net income and EPS, excluding certain items internally, to understand, manage and evaluate our business and support operating decisions. The company believes such non-GAAP financial measures (1) provide useful information to investors regarding the underlying business trends and performance of the company’s ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view of the company’s operating results excluding special items, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and projections of future results.
 
4

Teradata’s reconciliation of GAAP to non-GAAP results included in this release:
(in millions, except per share data)

 	 	For the Three Months Ended
September 30	 	 	 	 	 	For the Nine Months Ended
September 30	 	 	 	 	
 	 	2014	 	 	2013	 	 	Chg
as
Rpt’d	 	 	2014	 	 	2013	 	 	Chg
As
Rpt’d	 	
Gross Margin:	 				 				 				 				 				 				
GAAP Gross Margin	 	$	350	  	 	$	358	  	 	 	-2	% 	 	$	1,054	  	 	$	1,042	  	 	 	1	% 	
% of Revenue	 	 	52.5	% 	 	 	53.8	% 	 				 	 	53.5	% 	 	 	54.2	% 	 				
Excluding:	 				 				 				 				 				 				
Stock-based compensation expense	 	 	2	  	 	 	2	  	 				 	 	8	  	 	 	5	  	 				
Amortization of acquisition-related intangible assets	 	 	6	  	 	 	6	  	 				 	 	16	  	 	 	19	  	 				
Acquisition, integration and reorganization-related costs	 	 	1	  	 	 	—  	  	 				 	 	5	  	 	 	1	  	 				
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Non-GAAP Gross Margin	 	$	359	  	 	$	366	  	 	 	-2	% 	 	$	1,083	  	 	$	1,067	  	 	 	1	% 	
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
% of Revenue	 	 	53.8	% 	 	 	55.0	% 	 				 	 	54.9	% 	 	 	55.5	% 	 				
Operating Income:	 				 				 				 				 				 				
GAAP Operating Income	 	$	123	  	 	$	132	  	 	 	-7	% 	 	$	345	  	 	$	355	  	 	 	-3	% 	
% of Revenue	 	 	18.4	% 	 	 	19.8	% 	 				 	 	17.5	% 	 	 	18.5	% 	 				
Excluding:	 				 				 				 				 				 				
Stock-based compensation expense	 	 	11	  	 	 	12	  	 				 	 	36	  	 	 	39	  	 				
Amortization of acquisition-related intangible assets	 	 	12	  	 	 	11	  	 				 	 	35	  	 	 	33	  	 				
Acquisition, integration and reorganization-related costs	 	 	4	  	 	 	3	  	 				 	 	18	  	 	 	9	  	 				
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Non-GAAP Operating Income	 	$	150	  	 	$	158	  	 	 	-5	% 	 	$	434	  	 	$	436	  	 	 	0	% 	
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
% of Revenue	 	 	22.5	% 	 	 	23.7	% 	 				 	 	22.0	% 	 	 	22.7	% 	 				
Net Income:	 				 				 				 				 				 				
GAAP Net Income	 	$	94	  	 	$	98	  	 	 	-4	% 	 	$	249	  	 	$	265	  	 	 	-6	% 	
% of Revenue	 	 	14.1	% 	 	 	14.7	% 	 				 	 	12.6	% 	 	 	13.8	% 	 				
Excluding:	 				 				 				 				 				 				
Stock-based compensation expense	 	 	7	  	 	 	8	  	 				 	 	24	  	 	 	26	  	 				
Amortization of acquisition-related intangible assets	 	 	8	  	 	 	8	  	 				 	 	23	  	 	 	22	  	 				
Acquisition, integration and reorganization-related costs	 	 	2	  	 	 	2	  	 				 	 	10	  	 	 	6	  	 				
Net loss on equity investments	 	 	—  	  	 	 	—  	  	 				 	 	6	  	 	 	—  	  	 				
2012 R&D Tax Credit, enacted in 2013	 	 	—  	  	 	 	—  	  	 				 	 	—  	  	 	 	(4	) 	 				
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Non-GAAP Net Income	 	$	111	  	 	$	116	  	 	 	-4	% 	 	$	312	  	 	$	315	  	 	 	-1	% 	
	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
% of Revenue	 	 	16.6	% 	 	 	17.4	% 	 				 	 	15.8	% 	 	 	16.4	% 	 				
 
5

																					
 	  	For the Three Months
Ended September 30	 	  	For the Nine Months
Ended September 30	 	 	 	 	
Diluted Earnings Per Share:	  	2014	 	  	2013	 	  	2014	 	  	2013	 	 	2014 Full
Year
Guidance	 	
GAAP Diluted Earnings Per Share	  	$	0.60	  	  	$	0.59	  	  	$	1.57	  	  	$	1.59	  	 	$	2.33 - $2.48	  	
Excluding:	  				  				  				  				 				
Stock-based compensation expense	  	 	0.05	  	  	 	0.05	  	  	 	0.15	  	  	 	0.16	  	 	 	0.21	  	
Amortization of acquisition-related intangible assets	  	 	0.05	  	  	 	0.05	  	  	 	0.14	  	  	 	0.13	  	 	 	0.19	  	
Acquisition, integration and reorganization-related costs	  	 	0.01	  	  	 	0.01	  	  	 	0.06	  	  	 	0.03	  	 	 	0.08	  	
Net loss on equity investments	  	 	—  	  	  	 	—  	  	  	 	0.04	  	  	 	—  	  	 	 	0.04	  	
2012 R&D Tax Credit, enacted in 2013	  	 	—  	  	  	 	—  	  	  	 	—  	 	  	 	(0.02	) 	 	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Non-GAAP Diluted Earnings Per Share	  	$	0.71	  	  	$	0.70	  	  	$	1.96	  	  	$	1.89	  	 	$	2.85 - $3.00	  	

3.	As described above, the company believes that free cash flow is a useful non-GAAP measure for investors. Teradata defines free cash flow as cash provided/used by operating activities less capital expenditures for property and equipment, and additions to capitalized software. Free cash flow does not have a uniform definition under GAAP and therefore, Teradata’s definition may differ from other companies’ definitions of this measure. Teradata’s management uses free cash flow to assess the financial performance of the company and believes it is useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures for, among other things, investment in the company’s existing businesses, strategic acquisitions, strengthening the company’s balance sheet, repurchase of the company’s stock and repayment of the company’s debt obligations, if any. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. This non-GAAP measure is not meant to be considered in isolation, as a substitute for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.	
(in millions)

 	  	For the Three Months
Ended September 30	 	 	For the Nine Months
Ended September 30	 	
 	  	2014	 	 	2013	 	 	2014	 	 	2013	 	
Cash provided by operating activities (GAAP)	  	$	102	  	 	$	64	  	 	$	583	  	 	$	447	  	
Less capital expenditures for:	  				 				 				 				
Expenditures for property and equipment	  	 	(16	) 	 	 	(13	) 	 	 	(37	) 	 	 	(44	) 	
Additions to capitalized software	  	 	(20	) 	 	 	(22	) 	 	 	(57	) 	 	 	(56	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total capital expenditures	  	 	(36	) 	 	 	(35	) 	 	 	(94	) 	 	 	(100	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free Cash Flow (non-GAAP measure)	  	$	66	  	 	$	29	  	 	$	489	  	 	$	347	  	

6

Note to Investors
This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, future economic performance and statements concerning analysts’ earnings estimates, among other things. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause Teradata’s actual results to differ materially. In addition to the factors discussed in this release, other risks and uncertainties could affect our future results, and could cause actual results to differ materially from those expressed in such forward-looking statements. Such factors include those relating to: the global economic environment in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers, and other general economic and business conditions; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business, including the increased pressure on price/performance for data analytics solutions; fluctuations in our operating results, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues; risks inherent in operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, foreign currency fluctuations and other conditions abroad; the timely and successful development, production or acquisition and market acceptance of new and existing products and services, including our ability to accelerate market acceptance of new products and services as well as the reliability, quality, security and operability of new products because of the difficulty and complexity associated with their testing and production; tax rates; turnover of workforce and the ability to attract and retain skilled employees; availability and successful exploitation of new acquisition and alliance opportunities; our ability to execute integration plans for newly acquired entities, including the possibility that expected synergies and operating efficiencies may not be achieved, that such integration efforts may be more difficult, time-consuming or costly than expected, and that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; recurring revenue may decline or fail to be renewed; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company’s accounting policies; continued efforts to establish and maintain best-in-class and secure internal information technology and control systems; and other factors described from time-to-time in the company’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K and subsequent quarterly reports on Forms 10-Q, as well as the company’s annual reports to stockholders. The company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Teradata
Teradata (NYSE: TDC) helps companies get more value from data than any other company. Teradata’s leading portfolio of big data analytic solutions, integrated marketing applications, and services can help organizations gain a sustainable competitive advantage with data. Visit teradata.com.
Get to know Teradata:

Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries.

INVESTOR CONTACT:
Gregg Swearingen
Teradata
(937) 242-4600
gregg.swearingen@teradata.com	 	MEDIA CONTACT:
Mike O’Sullivan
Teradata
(937) 242-4786
mike.osullivan@teradata.com	
# # #
 
7

Schedule A
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts - unaudited)

 	  	For the Period Ended September 30	 	
 	  	Three Months	 	 	Nine Months	 	
 	  	    2014    	 	 	    2013    	 	 	    % Chg    	 	 	    2014    	 	 	    2013    	 	 	    % Chg    	 	
Revenue	  				 				 				 				 				 				
Products	  	$	294	  	 	$	306	  	 	 	-4	% 	 	$	867	  	 	$	858	  	 	 	1	% 	
Services	  	 	373	  	 	 	360	  	 	 	4	% 	 	 	1,104	  	 	 	1,065	  	 	 	4	% 	
	  	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Total revenue	  	 	667	  	 	 	666	  	 	 	0	% 	 	 	1,971	  	 	 	1,923	  	 	 	2	% 	
							
Product gross margin	  	 	175	  	 	 	188	  	 				 	 	551	  	 	 	546	  	 				
% of Revenue	  	 	59.5	% 	 	 	61.4	% 	 				 	 	63.6	% 	 	 	63.6	% 	 				
Services gross margin	  	 	175	  	 	 	170	  	 				 	 	503	  	 	 	496	  	 				
% of Revenue	  	 	46.9	% 	 	 	47.2	% 	 				 	 	45.6	% 	 	 	46.6	% 	 				
	  	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Total gross margin	  	 	350	  	 	 	358	  	 				 	 	1,054	  	 	 	1,042	  	 				
% of Revenue	  	 	52.5	% 	 	 	53.8	% 	 				 	 	53.5	% 	 	 	54.2	% 	 				
							
Selling, general and administrative expenses	  	 	181	  	 	 	183	  	 				 	 	557	  	 	 	547	  	 				
Research and development expenses	  	 	46	  	 	 	43	  	 				 	 	152	  	 	 	140	  	 				

Income from operations	  	 	123	  	 	 	132	  	 				 	 	345	  	 	 	355	  	 				
% of Revenue	  	 	18.4	% 	 	 	19.8	% 	 				 	 	17.5	% 	 	 	18.5	% 	 				
							
Other expense, net	  	 	—  	  	 	 	—  	  	 				 	 	(8	) 	 	 	(1	) 	 				

Income before income taxes	  	 	123	  	 	 	132	  	 				 	 	337	  	 	 	354	  	 				
% of Revenue	  	 	18.4	% 	 	 	19.8	% 	 				 	 	17.1	% 	 	 	18.4	% 	 				
							
Income tax expense	  	 	29	  	 	 	34	  	 				 	 	88	  	 	 	89	  	 				
	  	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
% Tax rate	  	 	23.6	% 	 	 	25.8	% 	 				 	 	26.1	% 	 	 	25.1	% 	 				
							
Net income	  	$	94	  	 	$	98	  	 				 	$	249	  	 	$	265	  	 				
	  	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
% of Revenue	  	 	14.1	% 	 	 	14.7	% 	 				 	 	12.6	% 	 	 	13.8	% 	 				
							
Net income per common share	  				 				 				 				 				 				
Basic	  	$	0.61	  	 	$	0.60	  	 				 	$	1.59	  	 	$	1.62	  	 				
Diluted	  	$	0.60	  	 	$	0.59	  	 				 	$	1.57	  	 	$	1.59	  	 				
							
Weighted average common shares outstanding	  				 				 				 				 				 				
Basic	  	 	154.5	  	 	 	163.2	  	 				 	 	156.6	  	 	 	164.0	  	 				
Diluted	  	 	157.1	  	 	 	166.4	  	 				 	 	159.1	  	 	 	167.1	  	 				

Schedule B
TERADATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions - unaudited)

 	  	September 30,	 	 	June 30,	 	 	December 31,	 	
 	  	2014	 	 	2014	 	 	2013	 	
Assets	  				 				 				
Current assets	  				 				 				
Cash and cash equivalents	  	$	848	  	 	$	934	  	 	$	695	  	
Accounts receivable, net	  	 	522	  	 	 	550	  	 	 	717	  	
Inventories	  	 	44	  	 	 	50	  	 	 	56	  	
Other current assets	  	 	92	  	 	 	103	  	 	 	95	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	  	 	1,506	  	 	 	1,637	  	 	 	1,563	  	
Property and equipment, net	  	 	157	  	 	 	156	  	 	 	161	  	
Capitalized software, net	  	 	198	  	 	 	196	  	 	 	195	  	
Goodwill	  	 	958	  	 	 	950	  	 	 	946	  	
Acquired intangible assets	  	 	130	  	 	 	126	  	 	 	149	  	
Deferred income taxes	  	 	23	  	 	 	24	  	 	 	24	  	
Other assets	  	 	46	  	 	 	47	  	 	 	58	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	3,018	  	 	$	3,136	  	 	$	3,096	  	

Liabilities and stockholders’ equity	  				 				 				
				
Current liabilities	  				 				 				
Current portion of long-term debt	  	$	45	  	 	$	38	  	 	$	26	  	
Accounts payable	  	 	118	  	 	 	112	  	 	 	114	  	
Payroll and benefits liabilities	  	 	127	  	 	 	125	  	 	 	136	  	
Deferred revenue	  	 	380	  	 	 	442	  	 	 	390	  	
Other current liabilities	  	 	101	  	 	 	129	  	 	 	110	  	

Total current liabilities	  	 	771	  	 	 	846	  	 	 	776	  	
Long-term debt	  	 	210	  	 	 	225	  	 	 	248	  	
Pension and other postemployment plan liabilities	  	 	73	  	 	 	72	  	 	 	76	  	
Long-term deferred revenue	  	 	22	  	 	 	26	  	 	 	25	  	
Deferred tax liabilities	  	 	68	  	 	 	73	  	 	 	87	  	
Other liabilities	  	 	32	  	 	 	32	  	 	 	27	  	

Total liabilities	  	 	1,176	  	 	 	1,274	  	 	 	1,239	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ equity	  				 				 				
Preferred stock	  	 	—  	  	 	 	—  	  	 	 	—  	  	
Common stock	  	 	2	  	 	 	2	  	 	 	2	  	
Paid-in capital	  	 	1,031	  	 	 	1,012	  	 	 	973	  	
Treasury Stock	  	 	(1,477	) 	 	 	(1,374	) 	 	 	(1,184	) 	
Retained earnings	  	 	2,282	  	 	 	2,188	  	 	 	2,033	  	
Accumulated other comprehensive income	  	 	4	  	 	 	34	  	 	 	33	  	

Total stockholders’ equity	  	 	1,842	  	 	 	1,862	  	 	 	1,857	  	

Total liabilities and stockholders’ equity	  	$	3,018	  	 	$	3,136	  	 	$	3,096	  	

Schedule C
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions - unaudited)

 	  	For the Period Ended September 30	 	
 	  	Three Months	 	 	Nine Months	 	
 	  	2014	 	 	2013	 	 	2014	 	 	2013	 	
Operating activities	  				 				 				 				
Net income	  	$	94	  	 	$	98	  	 	$	249	  	 	$	265	  	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				 				 				
Depreciation and amortization	  	 	44	  	 	 	39	  	 	 	128	  	 	 	109	  	
Stock-based compensation expense	  	 	11	  	 	 	12	  	 	 	36	  	 	 	39	  	
Excess tax benefit from stock-based compensation	  	 	(1	) 	 	 	(3	) 	 	 	(2	) 	 	 	(7	) 	
Deferred income taxes	  	 	(5	) 	 	 	1	  	 	 	(17	) 	 	 	7	  	
Loss on investments	  	 	—  	  	 	 	—  	  	 	 	9	  	 	 	—  	  	
Changes in assets and liabilities:	  				 				 				 				
Receivables	  	 	31	  	 	 	(31	) 	 	 	199	  	 	 	126	  	
Inventories	  	 	6	  	 	 	4	  	 	 	12	  	 	 	(19	) 	
Current payables and accrued expenses	  	 	(12	) 	 	 	(14	) 	 	 	(10	) 	 	 	(86	) 	
Deferred revenue	  	 	(66	) 	 	 	(51	) 	 	 	(13	) 	 	 	(5	) 	
Other assets and liabilities	  	 	—  	  	 	 	9	  	 	 	(8	) 	 	 	18	  	

Net cash provided by operating activities	  	 	102	  	 	 	64	  	 	 	583	  	 	 	447	  	
					
Investing activities	  				 				 				 				
Expenditures for property and equipment	  	 	(16	) 	 	 	(13	) 	 	 	(37	) 	 	 	(44	) 	
Additions to capitalized software	  	 	(20	) 	 	 	(22	) 	 	 	(57	) 	 	 	(56	) 	
Business acquisitions and other investing activities	  	 	(42	) 	 	 	—  	  	 	 	(49	) 	 	 	(39	) 	

Net cash used in investing activities	  	 	(78	) 	 	 	(35	) 	 	 	(143	) 	 	 	(139	) 	
					
Financing activities	  				 				 				 				
Repurchases of common stock	  	 	(98	) 	 	 	(3	) 	 	 	(282	) 	 	 	(187	) 	
Repayments of long-term borrowings	  	 	(8	) 	 	 	(3	) 	 	 	(19	) 	 	 	(11	) 	
Excess tax benefit from stock-based compensation	  	 	1	  	 	 	3	  	 	 	2	  	 	 	7	  	
Other financing activities, net	  	 	6	  	 	 	8	  	 	 	20	  	 	 	23	  	

Net cash provided by (used in) financing activities	  	 	(99	) 	 	 	5	  	 	 	(279	) 	 	 	(168	) 	
					
Effect of exchange rate changes on cash and cash equivalents	  	 	(11	) 	 	 	2	  	 	 	(8	) 	 	 	(7	) 	

Increase (decrease) in cash and cash equivalents	  	 	(86	) 	 	 	36	  	 	 	153	  	 	 	133	  	
Cash and cash equivalents at beginning of period	  	 	934	  	 	 	826	  	 	 	695	  	 	 	729	  	

Cash and cash equivalents at end of period	  	$	848	  	 	$	862	  	 	$	848	  	 	$	862	  	

Schedule D
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions - unaudited)

 	  	For the Three Months Ended September 30	 	
 	  	2014	 	 	2013	 	 	% Change
As Reported	 	 	% Change
Constant
Currency	 	
Segment Revenue	  				 				 				 				
Americas	  	$	405	  	 	$	409	  	 	 	-1	% 	 	 	-1	% 	
International	  	 	262	  	 	 	257	  	 	 	2	% 	 	 	2	% 	
	  	 	 	 	 	 	 	 	 				 				
Total revenue	  	 	667	  	 	 	666	  	 	 	0	% 	 	 	1	% 	
					
Segment gross margin	  				 				 				 				
					
Americas	  	 	231	  	 	 	233	  	 				 				
% of Revenue	  	 	57.0	% 	 	 	57.0	% 	 				 				
					
International	  	 	119	  	 	 	125	  	 				 				
% of Revenue	  	 	45.4	% 	 	 	48.6	% 	 				 				
	  	 	 	 	 	 	 	 	 				 				
Total gross margin	  	 	350	  	 	 	358	  	 				 				
% of Revenue	  	 	52.5	% 	 	 	53.8	% 	 				 				
					
Selling, general and administrative expenses	  	 	181	  	 	 	183	  	 				 				
Research and development expenses	  	 	46	  	 	 	43	  	 				 				

Income from operations	  	$	123	  	 	$	132	  	 				 				
	  	 	 	 	 	 	 	 	 				 				
% of Revenue	  	 	18.4	% 	 	 	19.8	% 	 				 				
		
 	  	For the Nine Months Ended September 30	 	
 	  	2014	 	 	2013	 	 	% Change
As Reported	 	 	% Change
Constant
Currency	 	
Segment Revenue	  				 				 				 				
Americas	  	$	1,163	  	 	$	1,169	  	 	 	-1	% 	 	 	0	% 	
International	  	 	808	  	 	 	754	  	 	 	7	% 	 	 	7	% 	
	  	 	 	 	 	 	 	 	 				 				
Total revenue	  	 	1,971	  	 	 	1,923	  	 	 	2	% 	 	 	3	% 	
					
Segment gross margin	  				 				 				 				
					
Americas	  	 	671	  	 	 	668	  	 				 				
% of Revenue	  	 	57.7	% 	 	 	57.1	% 	 				 				
					
International	  	 	383	  	 	 	374	  	 				 				
% of Revenue	  	 	47.4	% 	 	 	49.6	% 	 				 				
	  	 	 	 	 	 	 	 	 				 				
Total gross margin	  	 	1,054	  	 	 	1,042	  	 				 				
% of Revenue	  	 	53.5	% 	 	 	54.2	% 	 				 				
					
Selling, general and administrative expenses	  	 	557	  	 	 	547	  	 				 				
Research and development expenses	  	 	152	  	 	 	140	  	 				 				

Income from operations	  	$	345	  	 	$	355	  	 				 				
	  	 	 	 	 	 	 	 	 				 				
% of Revenue	  	 	17.5	% 	 	 	18.5	%